(Bloomberg) — AbbVie Inc. shares fell. (ABBV) fell by the most in three years after two mid-stage trials of its schizophrenia drug failed to meet their primary target, a blow to the company’s $8.7 billion acquisition of Cerevel Therapeutics earlier this year. .
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AbbVie said Monday that the drug imraclidine did not show a statistically significant improvement on a scale used to measure the severity of symptoms of mental illness. 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 decline since September 2021. The stock had risen 29% this year through Friday’s close, outpacing the S&P 500’s 26% rise.
Investors saw AbbVie’s failed trials as good news for Bristol-Myers Squibb, which in late September won 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 result is a real dagger” for AbbVie, Mizuho analyst Jared Holz wrote in a note, calling it “yet another example of the significant disappointment a buyer can experience when acquiring a company before pivotal data emerges.”
For decades, treatments for schizophrenia have focused largely on dopamine receptors. But these medications do not work for many patients. Because of their unpleasant side effects, such as weight gain and drowsiness, less than half of patients continue taking their medications.
The AbbVie and Bristol treatments are part of a new class of drugs that have a different target — muscarinic receptors, which modulate brain circuits that malfunction in patients with schizophrenia.
The Bristol company got a hold of the schizophrenia cure when it agreed to buy Karuna Therapeutics for $14 billion last year. The AbbVie drug works a little differently than the Bristol treatment.
-With assistance from Robert Langrith.
(Adds stock and analyst note starting in third paragraph.)
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