On Monday, AbbVie's share price encountered substantial decline.
On Monday, AbbVie's share price encountered substantial decline.
It was a downer for AbbVie (ABBV, down 2.37%) stock as the trading week started, with disheartening news from their labs. The company had pinned high hopes on a schizophrenia drug they were developing, but it didn't fare well in recent tests. Investors responded with intensity, selling off the shares, resulting in a 12% drop during late-afternoon trading.
Schizophrenia drug falters in clinical trial
Monday morning saw AbbVie announcing that their schizophrenia treatment with emraclidine didn't hit its primary target in a phase 2 trial. The drug had failed to display a statistically significant improvement on the PANSS (Positive and Negative Syndrome Scale) compared to a placebo.
The company appeared to be downplaying the situation, stating their disappointment with the results. They planned to delve deeper into the trial data to identify the best course of action for emraclidine. In such instances, a drug's continued development is often halted.
Roopal Thakkar, AbbVie's chief scientific officer, commented in the trial release, expressing their unwavering dedication to creating improved treatments for individuals suffering from psychiatric and neurological disorders.
There's always a ray of hope
Management's undying optimism for the development of new products for these afflictions comes as no surprise. In mid-August, they closed a whopping $8.7 billion deal to acquire Cerevel Therapeutics, the company behind emraclidine's development. The schizophrenia drug played a significant role in AbbVie's decision to acquire Cerevel.
However, Cerevel wasn't limited to a single focus. For their substantial investment, AbbVie also got their hands on several promising pipeline programs from the neuroscience-oriented biotech. The most promising of these is tavapadon, a Parkinson's disease treatment, which has shown positive results in late-stage trials, unlike emraclidine.
Investors may have second thoughts about the company's financial outlook due to the drug's failure, as they had put their money into AbbVie with high expectations. The company's future investments in finance and finance-related ventures could be impacted if they decide to halt the development of emraclidine.
Despite the setback, AbbVie still has other investments in their finance portfolio, such as the promising Parkinson's disease treatment tavapadon, which showed positive results in late-stage trials.