Biotech stocks rose Thursday as AbbVie announced plans to buy cancer drug developer ImmunoGen for $10.1 billion. 

Shares of ImmunoGen jumped more than 80% Thursday, putting it on track for its highest close since November 2000. Meanwhile, AbbVie’s stock rose more than 2%. 

ImmunoGen develops cancer drugs called antibody-drug conjugates, or ADCs, which are designed to directly kill cancer cells and spare healthy ones. Shares of other biotech companies developing ADCs, which are among the hottest areas in the pharmaceutical industry, jumped on the news of the buyout. 

That includes Sutro Biopharma‘s stock, which spiked about 16% Thursday and shares of Mersana Therapeutics, which rose nearly 17%. Shares of ADC Therapeutics also popped about 15% Thursday.

The SPDR S&P Biotech ETF, which focuses on small and midsize biotech companies, rose 3% Thursday. The Nasdaq Biotechnology Index advanced more than 1%.

Under the terms of the deal, AbbVie will pay $31.26 a share in cash for ImmunoGen, a roughly 95% premium to Wednesday’s closing price. AbbVie said it expects to complete the acquisition, which aims to strengthen its oncology pipeline, in the middle of 2024.

Guggenheim analyst Michael Schmidt said the price of the deal reflects the “increasing interest we have seen from large biopharma companies wanting to increase their exposure” in ADCs, which he called an “attractive area.”

For example, Pfizer agreed to acquire Seagen, a pioneer in ADCs, for $43 billion earlier this year. Merck and Daiichi Sankyo also recently agreed to jointly develop and commercialize three potential ADCs in a deal worth up to $22 billion.

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