AbbVie acquiring cancer drug startup StemcenTrx for $5.8 billion

Drug research giant AbbVie announced a deal to buy cancer drug startup Stemcentrx in a $5.8 billion cash and stock deal this morning.

The terms of the deal include $2 billion in cash and $3.8 billion in stock upfront, plus another $4 billion in milestone-based payouts to StemCentrx, and $3.8 in stock.

The deal values the company at up to $10.2 billion, according to a memo from early StemCentrx investor Founders Fund.

The VC firm claims Stemcentrx as its largest investment to date at $300 million.

This is the third acquisition for AbbVie so far as it makes moves into cancer drug research. The drug company purchased Pharmacyclics last year for $21 billion for a promising cancer drug.

Stemcentrx currently has five cancer drug trials in the pipeline, with a focus on attacking the stem cells responsible for creating tumors.

“We believe the acquisition of Stemcentrx will strengthen and accelerate our ability to deliver innovative therapies that will have a remarkable impact on patients’ lives,” Abbvie CEO Richard A. Gonzalez said in a statement

The deal is also a nod to Founders Fund’s bet in biotech. The firm likes to invest in cutting-edge technology but is not generally considered a med-tech investment firm. However, the news would make Stemcentrx the largest portfolio exit in the history of Founders Fund.

The deal is expected to close in Q2 of 2016.