(Reuters) -AbbVie will buy drug developer Landos Biopharma for up to $212 million as the Humira-maker aims to expand its pipeline of medicines to treat immune system-related illnesses, the companies said on Monday.
Landos is currently conducting a mid-stage study of its lead experimental drug NX-13 in a type of an inflammatory bowel disease called ulcerative colitis.
AbbVie (NYSE:ABBV)'s blockbuster drug Rinvoq is approved to treat the disease while the company has also sought the U.S. Food and Drug Administration's approval for its other key drug Skyrizi.
Under the deal, AbbVie will buy Landos for $20.42 per share in cash, or about $137.5 million in total. The offer marks a 161% premium to Friday's close of $7.83.
Landos' shares surged to $22.13 before the bell after a short trading halt.
AbbVie has also agreed to pay Landos shareholders an additional up to $11.14 per share, or around $75 million in total, contingent on certain clinical development milestones.
The deal is expected to close in the second quarter, the companies said.