AbbVie's Schizophrenia Failure Disappoints But Analysts Show Confidence In Immunology Portfolio

On Monday, AbbVie Inc ABBV stock plunged after two trials investigating emraclidine as a once-daily, oral monotherapy treatment for adults with schizophrenia failed two Phase 2 trials.

The studies did not meet their primary endpoint of showing a statistically significant improvement in the change from baseline in the Positive and Negative Syndrome Scale (PANSS) total score compared to the placebo group at week 6.

Truist says due to the failure, Bristol Myers Squibb & Co’s BMY Cobenfy (xanomeline and trospium chloride, KarXT) is poised to have less commercial competition.

The analyst also adds that the update will likely raise questions about strategy in neuroscience for AbbVie, which was highlighted during their third-quarter earnings call.

The analyst, with a Buy rating and $215 price target, is still positive on AbbVie’s growth prospects particularly from their immunology I&I franchise.

Emraclidine was part of AbbVie’s acquisition of Cerevel last year, which also included Tavapadon, which recently reported positive Phase 3 results in Parkinson’s disease.

The trial met its primary endpoint – patients treated with tavapadon in both dose groups experienced a statistically significant reduction (improvement) from baseline compared to placebo (placebo: +1.8; 5 mg: -9.7; 15 mg: -10.2 versus placebo) in the Movement Disorder Society – Unified Parkinson’s Disease Rating Scale (MDS-UPDRS) Parts II and III combined score at week 26.

Also Read: AbbVie’s Emraclidine For Schizophrenia ‘Surprisingly Disappoints,’ Analyst Says Pipeline Is Underappreciated

BMO Capital Markets writes, “AbbVie core I&I thesis intact, but this one stings.”

The analyst has lowered the price target from $228 to $208 and maintains the Outperform rating, citing confidence in the immunology portfolio.

BMO analyst writes that While Neurocrine Biosciences Inc’s NBIX mixed phase 2 data from NBI-1117568 showed some efficacy, there was absolutely no benefit in these trials. Bristol’s Cobenfy is now poised to dominate the schizophrenia market, the analyst adds.

BMO has reduced the probability of success for emraclidine to 0%, which was previously estimated to reach a potential $3.9 billion in global unadjusted peak sales in the Schizophrenia indication.

Price Action: ABBV stock is down 0.84% at $172.96 at last check Tuesday.

Photo via Shutterstock

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