AbbVie Shares Plunge as Experimental Schizophrenia Drug Flops in Trials

pills

In an unexpected turn, AbbVie Inc. (ABBV) encountered a setback in its venture into schizophrenia treatment. The company’s shares plummeted, experiencing their most substantial single-day drop in three years, after the revelation that their new drug, Emraclidine, tanked in two pivotal mid-stage trials.

Emraclidine, which AbbVie had hoped would redefine schizophrenia treatment, failed to demonstrate a statistically significant improvement in symptom severity, as measured by a common scale for the disorder. This news came as a rude awakening for investors, who watched AbbVie’s stock drop by more than 12% in early trading, marking the largest intraday decline since September 2021. Despite this, AbbVie’s shares had previously enjoyed a 25% increase year-to-date, outpacing the broader market’s 26% rise in the S&P 500.

The trial’s failure caused mixed reactions in the market. At Bristol Myers Squibb Co. (BMY), there was a welcome surprise as shares jumped nearly 13% following U.S. approval for their own schizophrenia drug—a significant step forward in treatment after seven decades. The contrasting fortunes of these two giants underscore the high-stakes, high-risk nature of pharmaceutical innovation.

Mizuho analyst Jared Holz didn’t mince words, describing the situation as “a real dagger” for AbbVie, particularly poignant given the company’s $8.7 billion acquisition of Cerevel Therapeutics earlier in the year, which was largely predicated on this drug’s potential. The setback highlights the ever-present risk when big pharma bets big on unproven therapies.

Both companies are exploring treatments targeting muscarinic receptors, a novel approach aimed at modulating brain circuits disrupted by schizophrenia, differing from the traditional dopamine-focused treatments that often leave patients grappling with side effects like weight gain and drowsiness, leading to poor medication adherence.

As AbbVie sifts through the data to find a silver lining or perhaps a new path forward, the industry watches closely. The journey from lab to market is fraught with such trials, pun intended, but in the grand scheme of things, even these setbacks contribute to the evolving narrative of medical science, where the punchline is often a healthier humanity.

Price Action: AbbVie shares were trading down by 12.43% at $174.14 at the time of publication Monday.

Be the first to comment

Leave a Reply

Your email address will not be published.


*

This site uses Akismet to reduce spam. Learn how your comment data is processed.