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AbbVie buys Apogee for $10.9bn to acquire inflammatory disease drug

Drugmaker’s largest deal in more than half a decade comes amid surge of M&A in sector

AbbVie is buying biotech Apogee Therapeutics in a $10.9bn deal, strengthening its pipeline for immunology and inflammation medicines.

As part of the deal, Apogee’s shareholders will receive $135.11 a share in cash, a 49 per cent premium to the biotech’s closing price on Thursday, AbbVie said in a statement on Monday.

Apogee’s shares closed 46.7 per cent higher at $132.55 in New York while AbbVie rose 6.2 per cent to $230.01.

The acquisition, AbbVie’s largest in more than half a decade, confirms an earlier FT report that a deal was near. It comes amid a wave of biotech dealmaking as Big Pharma spends big to boost its pipelines of experimental medicines.

Chicago-based AbbVie is acquiring Apogee’s developmental drug for atopic dermatitis, which is an itchy skin condition affecting more than 200mn people globally. Apogee’s lead drug, zumilokibart, offers a longer-acting alternative to the blockbuster inflammatory medicine Dupixent, co-developed by Sanofi and Regeneron, which generated $17.8bn in revenue last year.

Similar to Dupixent, zumilokibart has the potential to be used against a wide range of inflammatory diseases such as atopic dermatitis and asthma. Apogee plans to start a phase-three trial for zumilokibart as a treatment for atopic dermatitis later this year.

AbbVie’s Humira, used to treat a host of inflammatory diseases, including rheumatoid arthritis and psoriasis, is the best-selling prescription drug in history.

AbbVie has migrated Humira patients to two newer immunology drugs, Skyrizi and Rinvoq, amid rising competition after its patent on the blockbuster drug expired.

“For more than two decades, AbbVie has led and shaped the field of immunology, bringing the science, scale and expertise needed to address some of the most complex diseases,” AbbVie chief executive Robert Michael said in a statement. “Apogee’s pipeline adds highly differentiated clinical-stage assets, further expanding our robust immunology portfolio.”

More than $200bn of healthcare acquisitions have been agreed so far in the sector this year, according to LSEG. Large pharmaceutical companies, facing looming patent expirations, are aggressively pursuing small and midsized biotechs for their new drugs.

“There remains a fundamental need for small and mid-cap biotech M&A, which is driven by the patent expirations that the large-cap biopharma companies are expected to face at the end of this decade,” Morgan Stanley said in a recent report.

Massachusetts-based Apogee was founded by biotech venture capital firms Venrock and Fairmount in 2022. Last month, it struck a $1.3bn financing and royalty deal with Blackstone to fund the development and launch of zumilokibart, but the agreement left open the possibility for Apogee to sell itself.

Shares in Apogee, which went public in 2023, have more than doubled in price over the past year. Shares in AbbVie, which has a market capitalisation of about $382bn, have risen almost a third over the same period.

The group has historically been one of the most active pharmaceutical acquirers. In 2024, AbbVie struck a $10.1bn deal for oncology biotech Immunogen as well as an $8.7bn deal for psychiatric drug developer Cerevel Therapeutics, whose lead drug has since flopped in clinical trials. In 2019, it bought Botox maker Allergan in an $80bn deal.

Apogee “fits naturally” with AbbVie and “reflects [a] desire to pursue longer dosing interval treatment in inflammatory disease,” Evan Seigerman, an analyst at BMO Capital Markets said in a report on Friday.

AbbVie was advised by Morgan Stanley and Paul Weiss. Apogee was represented by Jefferies, Goldman Sachs and Kirkland & Ellis.

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Hedge fund to pay Avis $650mn in settlement after wild stock swings

Pentwater Capital rapidly sold shares in US car rental group as price soared then plummeted

Avis Budget reached a settlement with hedge fund Pentwater Capital after the US car rental group accused the investor of wrongly profiting from wild swings in the company’s shares earlier this year.

Pentwater will pay the company $650mn in cash, according to a regulatory filing on Monday, ending a dramatic period during which Avis’s chief executive publicly blamed one of its biggest shareholders for a precipitous drop in its share price.

“We have entered into a settlement agreement, subject to court approval, with Pentwater to settle our pending lawsuit for the recovery of short-swing profits,” Avis said, referring to a US securities law that prevents insiders or large shareholders from making quick gains from stock trades.

The car rental company had filed a lawsuit against the hedge fund last week under seal.

Shares in the car rental group surged more than 300 per cent over three weeks in April before crashing.

Avis chief executive Brian Choi said during an earnings call in April that Pentwater’s rapid selling of stock was likely to have contributed to the company’s 38 per cent drop in a single day. The fund had recently disclosed it sold millions of shares, and Choi vowed to “aggressively pursue” any ill-gotten profits.

“Given the quantum of shares sold in such a short span of time, our stock price experienced a significant decline,” Choi said at the time. “It seems the only insider active during this period of excess volatility was Pentwater Capital.”

The hedge fund said in a regulatory filing around the time of the earnings call that it was in discussions with Avis about voluntarily handing back gains made from selling shares that triggered the short-swing profits rule.

Pentwater did not immediately respond to requests for comment on Monday.

Avis’s volatile April was driven by Pentwater’s control of the relatively small number of shares available for other investors to buy and sell, analysts said.

In late March, Pentwater began adding to its already large Avis position, buying millions of the company’s shares, filings show. The net effect was a huge reduction in the number of the car rental group’s shares available to the public.

Avis ended the first quarter of this year with revenues of $2.5bn and a net loss of $234mn. Its stock was heavily shorted before April’s rally began.

The share price was pushed higher as Pentwater added to its stake and short sellers covered their positions by buying back stock in a process known as a short squeeze.

Shares in Avis jumped more than 10 per cent in after-market trading following Pentwater’s agreement to pay the $650mn settlement.

“Avis was a multibillion-dollar company behaving like a microcap stock because of its tiny float,” said David Capablanca, head of short seller Fugazi Research.

Apollo’s flagship private credit fund hit by 17% redemption requests

Vehicle meets less than a third of withdrawal requests as investor exodus accelerates

Investor redemption requests at Apollo’s flagship retail private credit fund surged to 17 per cent of the vehicle’s value in the second quarter, underscoring fears of falling returns and rising stress in debt markets.

The firm’s $15bn Apollo Debt Solutions fund pitched to wealthy individual investors reported roughly $2.4bn of withdrawal requests in the most recent period. The fund met less than 30 per cent of the withdrawals it faced in the quarter, capping redemptions at 5 per cent of the value of the vehicle.

The Apollo fund, which has an investment portfolio worth nearly $26bn, had been hit with withdrawal requests of 11 per cent in the first quarter.

The rising withdrawal requests at the fund signal that the broader investor exodus from private credit has not abated, even as public markets have rallied and a sell-off in loans to private equity-backed software companies has moderated.

The funds have been a significant fundraising source for private investment groups, offering lucrative fees for the asset managers. However, private credit has faced scrutiny over its lending to the software industry, given the risks companies face from advances in AI.

Investors have sought to pull nearly $15bn from nine major funds tracked by the FT in the second quarter. The funds, which manage roughly $200bn across their investment portfolios, have met less than 40 per cent of the withdrawal requests.

Analysts across Wall Street expect the pace of redemptions from these private credit vehicles, known as business development companies, to continue to face pressure this year with some predicting redemptions could soon peak.

Apollo said it recorded $300mn of new commitments to the fund, which it said would limit net outflows to $400mn in the quarter. It also noted that redemption requests were concentrated from investors in its offshore funds, typically pitched to non-US investors.

“The vast majority of investors in the fund continue to choose to remain invested,” the fund said in a letter to shareholders. “We have a fiduciary duty to act in the best interests of all fund investors. Adhering to our stated targets — and delivering on them — is important in our role as long-term stewards of capital.”

The Apollo fund, like most of the vehicles operated by its competitors, is relying on a gating mechanism that allows the investment manager to restrict redemptions when they eclipse a 5 per cent threshold.

John Zito, co-president of Apollo Asset Management, told a conference hosted by Morgan Stanley earlier this month that the retail-focused funds were performing as designed. Apollo’s fund has generated a 6.2 per cent return over the past year.

“The nice thing is, is no matter how much you’ve attacked the private debt business, there’s been no run. There’s been no SVB,” he said, referring to the 2023 failure of Silicon Valley Bank when depositors raced to pull capital from the lender. “There’s been no financial institution failing. The structure is right.”

Mukesh Ambani points to succession plan for Reliance Industries

Reliance Succession: Three Bodies, One Soul

The annual shareholder meet of one of India’s most critical conglomerates, Reliance Industries, is a significant event in the country’s corporate calendar.

This year, near the end of the two-hour bonanza of speeches by his family, 69-year-old Mukesh Ambani, one of the most powerful billionaires in India, spoke with some detail about his succession plans for the conglomerate that runs the world’s largest petrochemical refinery, one of the largest telecom companies with a strong pivot towards AI and is creating a massive retail empire.

It has long been expected that the businesses will be operationally divvied up but held jointly between his three kids, the 34-year-old twins Akash and Isha and their 31-year-old sibling, Anant. But as we wrote in a detailed story last year, there have been concerns, including by some large shareholders, about the ability of the three heirs to lead the company in the absence of their father.

On Friday, as his wont, Ambani announced grand plans for his companies, including the nearly $4bn IPO for his telecom arm, Jio Platforms, and a strong pivot towards green energy. Hit first by the trade conflict with the US last year and then the war in the Middle East, Ambani’s petroleum business has been particularly affected. But, he said on Friday: “Tough times never last; tough nations do.”

One of the key plans for the conglomerate, he said, was succession, with his three heirs completing three years on the board of the flagship Reliance Industries.

Akash is heading the technology business, including Jio Infocomm, which has 524mn users and is betting big on AI. Isha helms the consumer business that includes the expanding Reliance Retail, quick commerce and luxury products. And Anant is leading the energy arms and the transition towards renewables.

Without a doubt, Ambani is a supremely talented businessman. After a bitter succession battle with his brother Anil over the business group founded by their father Dhirubhai Ambani, Mukesh inherited half of the constituent companies about 25 years ago.

He wants to avoid such division and bitterness for his three kids. Strongly implying a joint succession plan, he said: “They are three bodies, one soul. Their soul is Reliance. One single indivisible Reliance, now and forever.”

The company had groomed nearly 500 young leaders who would assist the next Ambani generation in their business, he said. While he will “continue to provide hands-on leadership, the generational transfer of day-to-day management at Reliance is almost complete”.

His comments firm up previous expectations. But to gain the trust of the shareholders, the three siblings will need to step forward beyond these annual speeches, as some investors feel they don’t know the potential heirs well enough.

For now, the chatter in Mumbai suggests momentum may be with the family of the other “A” of corporate India, Gautam Adani (who recently overtook Ambani to become Asia’s richest man). The Adanis continue to consolidate their position in sectors such as infrastructure and are expanding into new areas including energy and media, competing directly with the Ambanis but arguably with more hunger.

Mounjaro maker is collaborating with small biotechs on AI as a tool for drug discovery

Eli Lilly is deploying its cash pile into untested drug development strategies, including an “App Store” for scientists, as the pharma group aims to shield itself from the expiry of patents on its blockbuster weight-loss drugs.

The Indianapolis-headquartered group last year launched its own data centre with 1,016 advanced Blackwell computer chips, bought from semiconductor giant Nvidia, as part of a push into AI as a tool for drug discovery.

Lilly’s computing investment included a new collaboration with about 100 smaller biotechs, allowing them to work with AI models in return for their data, chief executive Dave Ricks told the FT in an interview.

He acknowledged that using AI to find new treatments is in its infancy but said the project was “like the App Store” for biotech scientists, referring to Apple’s marketplace that spurred software development.

“I hear speeches from [AI] founders saying, ‘oh, we’re going to make drugs with our computers.’ I don’t think that’s a present reality,” he said. “But of course, we also need to invest in those technologies.”

Lilly’s revenues have been powered by its weight-loss products, including its Mounjaro injections and Foundayo pills. Its profits more than doubled in the first quarter with earnings per share jumping to $8.26.

By the end of 2025 it had amassed cash and other highly liquid assets of $7.3bn, a 121 per cent year-on-year rise, giving it the dry powder to invest heavily in diversifying its business before its blockbuster weight-loss drugs start to come off patent in the 2030s.

Biotechs that have joined Lilly’s AI training hub include drug research firm Charles River Laboratories, which announced it would take part in the collaboration last week.

“It’s an open-source, federated model so that the cost to use it is participating with your data,” Ricks said, adding that all the data is being shared anonymously. “Our scientists use those models too so we get better and better.”

The group, which this year celebrates its 150-year anniversary, said it had also signed about 20 deals to license AI technology from third parties. That is more than any other pharmaceutical company as of May, according to UBS.

In March Lilly also announced a $2bn deal with AI drug discovery business Insilico Medicine, gaining the exclusive rights to sell a GLP-1 drug if it is successfully developed and approved.

Ricks added that the AI hub was not available to everyone and “a Russian-based AI lab” would not be getting access.

Although AI remains an unproven technology as far as drug discovery is concerned, Lilly’s investment underscores a wariness about future competitors from the tech sector.

Google’s parent company Alphabet spun out a drug discovery business called Isomorphic Labs in 2021. Anthropic is integrating its Claude chatbot into tools such as lab management systems, genomic analysis platforms and biomedical databases, while Nvidia has open-source tools and GPUs dedicated to drug discovery.

Lilly’s AI spending has won applause from its shareholders. Using excess cash to do deals with Nvidia and partner with young biotechs in its hub “could potentially inform future drug discovery”, said Kevin Gade, chief operating officer at investment firm Bahl & Gaynor, which manages about $58bn and owns Lilly shares.

Lilly’s collaborations with Nvidia include a San Francisco lab where the pharma group’s scientists will work alongside the AI group’s engineers to search for new treatments.

“If AI is going to work, it pretty much has to apprentice under successful scientists over a long period of time . . . Lilly is the only company that is really doing that right now,” said Gade.

The success of its weight-loss injections and pills has propelled Eli Lilly’s market capitalisation to around $1.1tn, above that of JPMorgan. The group generated more net income than ExxonMobil or Walmart in the first quarter of the year.

Ricks declined to specify how much the company was spending on data centres, but said it was part of the company’s increasing R&D budget, which would be in the “high teens” in billions of dollars this year, up from $13bn in 2025.

With the gains from AI yet to be felt in launching new medicines, Ricks, 59, is also preparing for Lilly’s future the old-fashioned way by buying up biotechs. So far this year, Lilly has announced 11 acquisitions, more than in 2025 and 2024 combined, according to S&P data.

The group’s announcement in May that it is acquiring three vaccine companies working on treatments for infections like shingles showed it was willing to spend even on medicines with long development timelines, Ricks said. “We have a pretty long runway of growth and cash flow and ability to invest in R&D,” he added.

Lilly continues to trounce its only rival in weight-loss competition, Novo Nordisk, which was Europe’s largest company in 2023 but has since seen its shares tumble.

As of the first week of June, Lilly’s obesity and diabetes weight-loss drugs totalled 1.6mn US prescriptions, compared with 1.1mn in the US for those of Novo, according to data from Iqvia.

Sales of weight-loss drugs are expected to get a boost in July when the US government starts an unprecedented pilot programme to offer these medicines through Medicare, a government-funded health scheme for older Americans.

Previously, the US government has not funded weight-loss drugs but their temporary inclusion was part of pricing deals both Novo and Lilly announced with the White House last year. The agreement is scheduled to last until the end of 2027.

Ricks pushed back against the suggestion that inclusion in the Medicare programme would cannibalise Lilly’s current sales.

“It’s not a risk, it’s an opportunity,” he said. “The growth in volume will be way offsetting whatever we would lose marginally in pricing.”

“We’re actually going to actively work to communicate with seniors who are buying out of their own pocket to switch,” he said. “It’s better for them.”