Why Shares Of Small-Cap Biopharma AC Immune Are Plunging

Shares of Swiss biopharma AC Immune SA ACIU have lost about half their market capitalization on an adverse clinical readout for an out-licensed investigational Alzheimer's drug.

What Happened: AC Immune's licensing partner Roche Holdings AG's Basel ADR Common Stock RHHBY Genentech said a mid-stage study evaluating semorinemab in early — or prodromal-to-mild — Alzheimer's disease failed to meet the primary efficacy endpoint, according to a Wednesday press release from AC Immune. 

The top-line results showed that semorinemab, an anti-Tau antibody, did not meet the primary efficacy endpoint of reducing decline on Clinical Dementia Rating-Sum of Boxes compared to placebo, AC Immune said.

The drug also failed to meet two secondary endpoints: the Alzheimer's Disease Assessment Scale-Cognitive Subscale 13 and the Alzheimer's Disease Cooperative Study Group – Activities of Daily Living Inventory. 

Why It's Important: Alzheimer's disease has become a tough nut to crack for biopharma companies, with exceedingly high failure rates in development. 

Tau therapies are one of two approaches biopharma companies are widely adopting to find a breakthrough treatment for Alzheimer's.

AC Immune out-licensed semorinemab to Genentech under an exclusive worldwide license agreement executed in June 2012. Apart from the upfront payment and the research and development milestone payments AC Immune has already received, the company is eligible to receive commercialization milestone payments as well as royalties on net sales of products.

What's Next: Additional data analysis is ongoing, and Genentech plans to present the results from TAURIEL at an upcoming medical congress, AC Immune said.

The second Phase 2 study of semorinemab in patients with moderate Alzheimer's disease remains ongoing, the company said. 

ACIU Price Action: At last check, AC Immune shares were plummeting 42.03% to $5.06. 

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