By Puyaan Singh and Bhanvi Satija (Reuters) -AbbVie shares fell over 12% on Monday after an experimental schizophrenia drug the company acquired last year failed two mid-stage studies, widening rival Bristol Myers Squibb’s lead in the market for new treatments for the condition. AbbVie’s emraclidine failed to help reduce symptom severity in trials testing it […]
Health
AbbVie’s closely watched schizophrenia drug fails two studies, shares slide
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By Puyaan Singh and Bhanvi Satija
(Reuters) -AbbVie shares fell over 12% on Monday after an experimental schizophrenia drug the company acquired last year failed two mid-stage studies, widening rival Bristol Myers Squibb’s lead in the market for new treatments for the condition.
AbbVie’s emraclidine failed to help reduce symptom severity in trials testing it in patients who face an acute worsening of psychotic symptoms, including hallucinations and delusion.
The results are set to wipe $40 billion from the market value of AbbVie, which has been spending aggressively on deals as blockbuster rheumatoid arthritis drug Humira, once the world’s best-selling treatment, faces a sharp fall in sales due to competition from close copies.
An $8.7 billion “mistake” is likely to weigh on investor sentiment for some time, said Piper Sandler analyst Christopher Raymond, referring to AbbVie’s 2023 deal for Cerevel Therapeutics to gain access to emraclidine.
Some analysts had expected emraclidine to bring in more than $1 billion in revenue for AbbVie.
Shares of rival Bristol Myers, which received U.S. approval for its schizophrenia treatment in September, surged 10.2% to $59.66.
Bristol and AbbVie’s drug belong to a new class of treatments that aim to reduce symptoms of schizophrenia without some of the side effects such as tremors and weight gain seen with commonly used antipsychotics.
AbbVie said it was continuing to analyze the trial data to determine its next steps.
“While schizophrenia trials are notoriously difficult to predict, we are surprised by the results given the otherwise promising data we have seen,” said Guggenheim Securities analyst Vamil Divan.
He said the data could renew investor focus on AbbVie’s near-term growth drivers as Humira loses market.
While AbbVie has managed to keep hold of at least 80% of the Humira market this year, it is expected to lose further share in 2025.
(Reporting by Puyaan Singh and Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli)