AbbVie's stock price plummets!

On Monday (November 11, 2024), at the closing bell, AbbVie's stock price plummeted by more than 12%, resulting in a loss of over $30 billion in market value. Such a situation is uncommon for AbbVie, which has seen its stock price soar in recent years, and even among all MNCs (multinational corporations), this is one of the largest single-day stock price drops in the past period.

The reason for the decline is related to AbbVie's announcement of the failure of two clinical trials. On Monday, AbbVie announced that its investigational schizophrenia drug Emraclidine did not meet the primary endpoints in two Phase II clinical trials.

Emraclidine is one of the key pipeline assets AbbVie obtained after acquiring Cerevel. This acquisition was initially disclosed in December 2023 and was finally completed in August 2024 at a high price of $8.7 billion. The acquisition of Cerevel was an important step for AbbVie in the field of neuroscience, and recently AbbVie also acquired another CNS (Central Nervous System) Biotech, Aliada Therapeutics (Aliada), for $1.4 billion, further increasing its investment in CNS.

The failure of these two Phase II clinical studies is indeed a significant blow to AbbVie's neuroscience segment, but the market's reaction was indeed unexpected by many.

Are there any hopes for the two failed Phase II clinical trials?

Let's take a look at the two Phase II studies announced by AbbVie—EMPOWER-1 and EMPOWER-2.

Both Phase II studies aimed to investigate the efficacy, safety, and tolerability of specific doses of Emraclidine (CVL-231) in patients with schizophrenia and acute exacerbation of psychosis, with a treatment period of 6 weeks, where patients took Emraclidine/placebo tablets once a day.

The only difference between the two studies was the dose being investigated, with EMPOWER-1 examining two dose groups of 10mg and 30mg, and EMPOWER-2 examining two dose groups of 15mg and 30mg, to fully explore the therapeutic dose range of Emraclidine.

In addition, the primary endpoint of the studies was the change in the total score of the Positive and Negative Syndrome Scale (PANSS) from baseline at week 6. (PANSS is a tool used to assess the severity of symptoms in patients with schizophrenia. This scale includes several sub-items to assess the patient's positive symptoms (such as hallucinations, delusions, etc.), negative symptoms (such as emotional indifference, social withdrawal, etc.), and social function.)

The study results showed that neither of the studies met the primary endpoint.

The detailed data showed that in the EMPOWER-1 study, the mean PANSS total scores for the 10mg Emraclidine group, 30mg Emraclidine group, and the placebo group were -14.7, -16.5, and -13.5, respectively. Both Emraclidine groups showed improvements in PANSS total scores over the placebo group, but the improvements were not significant.

In the EMPOWER-2 study, the mean PANSS total scores for the 15mg Emraclidine group, 30mg Emraclidine group, and the placebo group were -18.5, -14.2, and -16.1, respectively, with the 30mg Emraclidine group showing a worse improvement in PANSS total scores compared to the placebo group.

From the primary endpoint data alone, this drug indeed has not shown the expected efficacy at this time.

On the positive side, the safety of Emraclidine was consistent with what was observed in the previous Phase 1b trial, with no serious adverse reactions. The most common adverse events in the EMPOWER-1 and EMPOWER-2 studies were headache (9.4% and 10.8% for the placebo group, 14.1% for EMPOWER-1 10mg, 14.6% for EMPOWER-2 15mg, 13.2% and 13.0% for 30mg), dry mouth (2.3% and 0.8% for the placebo group, 3.9% for EMPOWER-1 10mg, 0.8% for EMPOWER-2 15mg, 9.3% and 5.3% for 30mg), and indigestion (3.1% and 1.5% for the placebo group, 3.9% for EMPOWER-1 10mg, 3.1% for EMPOWER-2 15mg, 7.8% and 2.3% for 30mg).

Although the studies did not meet the primary endpoints, AbbVie stated that it would not give up on this drug and would continue to analyze the data to determine the next steps, so there may still be a turn of events.

AbbVie Neuroscience Sector Analysis

In AbbVie's revenue report, the proportion of the neuroscience segment is not small.

According to AbbVie's 2023 financial report, AbbVie's total revenue from all marketed products in 2023 was $54.318 billion, a year-on-year increase of 6.4%. In terms of proportion, the top three were immunology, neuroscience, and oncology, with revenues of $26.136 billion (about 48%), $7.717 billion (about 14%), and $5.915 billion (about 11%), respectively. Among the three, the neuroscience segment was the only one with positive growth, with a year-on-year increase of 18.2%.

Looking at the marketed products (data based on the 2023 financial report), AbbVie's neuroscience segment is mainly composed of Botox Therapeutic, Vraylar, Ubrelvy, Duodopa, and Qulipta. According to the latest 2024 Q3 financial report, except for Duodopa, the other products all show positive growth of 14% to 34%.

From AbbVie's pipeline disclosed at the beginning of the year, its neuroscience segment (orange marked in the figure) still has a large number of early pipelines, especially those in the Phase II clinical stage, with indications focusing on Alzheimer's disease, amyotrophic lateral sclerosis, stroke, spinal cord injury, bipolar disorder, and epilepsy.

From the perspective of M&A, many of AbbVie's neuroscience pipelines actually come from M&A transactions. In 2019, when AbbVie acquired Allergan for a high price of $63 billion, it obtained many neuroscience pipelines from the other party. In the past two years, the more attention-grabbing one was its $8.7 billion acquisition of Cerevel, obtaining 10 pipelines (7 research and development drugs). In the most recent acquisition, AbbVie acquired Aliada for $1.4 billion, obtaining 1 core pipeline and a key delivery technology platform.

Overall, Emraclidine, which failed in the Phase II study, is indeed one of the important pipelines in AbbVie's neuroscience segment and was highly anticipated. Although this drug has temporarily encountered setbacks in its schizophrenia indication, it still has Alzheimer's disease indication in research and development, currently in the Phase I clinical stage.

Summary

Emraclidine targets the M4 muscarinic acetylcholine receptor (M4 mAChR), which is mainly distributed in the central nervous system and is related to the regulation of various neurological and psychiatric disorders. Emraclidine is a selective positive allosteric modulator of this receptor, which can enhance/promote the response of M4 mAChR to its native ligand.

Just over a month ago, the FDA approved BMS's Cobenfy for the treatment of adult schizophrenia. Cobenfy and Emraclidine have a similar mechanism of action, targeting mAChR rather than dopamine receptors, and is the first product to treat schizophrenia with this mechanism.

Just two days before AbbVie announced the failure of Emraclidine's Phase II studies, BMS announced positive long-term study data for Cobenfy, further consolidating its position in the treatment of schizophrenia. Some analysts commented, "This result is obviously good for BMS, as Cobenfy will not face competition from Emraclidine."

With the collision of the two pieces of news, while AbbVie's stock price plummeted on Monday, BMS's stock price quietly rose by about 12%.

【Editor’s note】The above content (~6400 words) is a quick translation of a Chinese article (posted on 2024-11-12) by DrugTimes team. To read the original article, please click here . All comments are warmly welcome. Many thanks!