(Bloomberg) — AbbVie Inc. shares fell the most in three years after two mid-stage trials of its drug to treat schizophrenia failed to meet their primary goal, a blow to the company’s $8.7 billion acquisition of Cerevel Therapeutics earlier this year.
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The medicine, emraclidine, didn’t show a statistically significant improvement on a scale used for measuring the severity of symptoms of the mental illness, AbbVie said Monday. The company plans to analyze the data to determine next steps.
AbbVie shares fell as much as 12% as of 9:32 a.m. in New York, their biggest intraday drop since September 2021. The stock had gained 29% this year through Friday’s close, outperforming a 26% rise in the S&P 500.
Investors saw AbbVie’s failed trials as good news for Bristol Myers Squibb Co., which in late September gained US approval for the first new type of schizophrenia drug in seven decades. Bristol shares jumped as much as 13%, the most since March 2006.
“This outcome is a real dagger” for AbbVie, Mizuho analyst Jared Holz wrote in a note, calling it “another example of a major disappointment a buyer may face when acquiring a company prior to pivotal data.”
For decades, schizophrenia treatments have largely focused on dopamine receptors. But those drugs don’t work for many patients. And due to their unpleasant side effects, such as weight gain and drowsiness, fewer than half of patients stay on their medications.
The treatments from AbbVie and Bristol are part of a new class of drugs that have a different target — muscarinic receptors, which modulate brain circuits that are disrupted in patients with schizophrenia.
Bristol acquired its schizophrenia treatment when it agreed to buy Karuna Therapeutics for $14 billion last year. AbbVie’s drug works slightly differently than Bristol’s treatment.
–With assistance from Robert Langreth.
(Adds shares, analyst note starting in third paragraph.)
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