Morning Brew: AbbVie Acquires Immunogen in $10B Deal, Salesforce Soars on Earnings

AbbVie (ABBV, Financial) has made a significant move in the pharmaceutical industry by agreeing to purchase Immunogen (IMGN, Financial), a company specializing in antibody-drug conjugates for cancer treatment, for a sum of around $10 billion in cash. This strategic acquisition is set to bolster AbbVie's oncology portfolio with the addition of Immunogen's ovarian cancer therapy, Elahere. The deal, which is anticipated to be finalized by mid-2024, is expected to enhance AbbVie's diluted earnings per share starting in 2027. Shares of Immunogen soared by approximately 82% following the announcement, while AbbVie's stock remained relatively unchanged.

Investors received a positive signal as the core Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred measure of inflation, showed a year-over-year increase of 3.5% in October, aligning with expectations and indicating a slight cooling from September's 3.7%. This lowest reading of the year suggests that inflation pressures may be easing, potentially influencing the Fed to maintain current interest rates in December and consider rate cuts in the following year. On a month-to-month basis, the core PCE rose by 0.2%, reflecting a continued slowing trend.

Salesforce (CRM, Financial) experienced a notable surge of 9% in pre-market trading as the company's quarterly performance exceeded expectations, with future prospects looking even brighter. Analysts have reaffirmed their positive outlook on the stock, with JP Morgan adjusting its price target upwards in light of Salesforce's growth potential, particularly due to the impact of artificial intelligence on its earnings and forecasts. The company's robust free cash flow generation has also been a point of commendation among analysts.

At the UBS global technology conference, semiconductor companies including Intel (INTC, Financial), Qualcomm (QCOM, Financial), and Western Digital (WDC, Financial) shared insights into the state of the industry. Teradyne (TER, Financial) discussed its investment in Technopropbe and its potential to increase market share in high-performance computing. Seagate Technology (STX, Financial) provided commentary suggesting that its December quarter is tracking largely in line with expectations.

Johnson & Johnson MedTech (JNJ, Financial) announced the acquisition of medical device company Laminar for an upfront payment of $400M, with additional payments contingent on future clinical and regulatory milestones. Laminar, which specializes in treatments for cardiac arrhythmia, will become part of Johnson & Johnson's Biosense Webster division. The acquisition is expected to enhance the company's portfolio in the growing market for atrial fibrillation treatments.

Initial jobless claims for the week ending November 25th saw a slight increase to 218K, which was in line with expectations. The four-week moving average showed a minor decrease, while continuing claims rose to 1.927M. These figures come as the U.S. labor market remains relatively tight, with the insured unemployment rate holding steady at 1.3%.

Lattice Semiconductor (LSCC, Financial) shares gained traction as Deutsche Bank initiated coverage with a buy rating and a price target of $70. The analyst highlighted Lattice's unique position in the market, with above-average revenue growth and industry-leading gross margins. Despite near-term industry headwinds, the analyst believes the stock's current valuation already reflects these challenges.

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