Abivax shares fall 40% as cancer safety signal stalls big-pharma acquisition talks
Jefferies cuts price target to $90 citing regulatory overhang, while potential suitors including Eli Lilly and Pfizer pause bidding war pending October data review
Shares of French biotechnology company Abivax SA plummeted up to 40 per cent in Paris and New York following the release of Phase 3 maintenance trial data for its ulcerative colitis treatment, obefazimod. The sharp decline erased billions in market value and halted a year-long rally driven by intense speculation that the company would be acquired by major pharmaceutical firms.
The global 44-week ABTECT study demonstrated robust efficacy, with patients receiving 25 mg and 50 mg doses achieving clinical remission rates of 50.8 per cent and 51.3 per cent respectively. This resulted in a placebo-adjusted remission rate of approximately 40 per cent, outperforming competitors such as Pfizer’s Velsipity and matching the performance of AbbVie’s Rinvoq.
However, the data also revealed a cluster of malignancies exclusively within the high-dose 50 mg cohort. Diagnoses included prostate cancer, breast cancer, colonic dysplasia, and four cases of non-melanoma skin cancer. Abivax leadership and independent clinical investigators stated there was no evidence of a causal link between the drug and these cancers, noting that colonic dysplasia is an inherent risk of long-term inflammatory bowel disease and that skin cancer patients had an average age of 62, significantly higher than the trial baseline of 42.
Jefferies analyst Faisal Khurshid downgraded the stock from Buy to Hold, reducing the price target from $160 to $90. Khurshid cited a significant regulatory overhang that could deter potential buyers, arguing that the safety signal introduces uncertainty that cannot be easily dismissed, particularly with no other valuation-inflecting data events scheduled for the next year.
The incident has stalled acquisition interest from major pharmaceutical companies, including Eli Lilly, AstraZeneca, Pfizer, and Takeda. While bullish analysts from Stifel and Citizens JMP argue the signal may result in a labeling restriction rather than an existential threat, the leverage has shifted back to corporate development teams who are now waiting for further clarity.
Abivax plans to submit a new drug application to the FDA in the fourth quarter of this year, aiming for a commercial launch in 2027. The next critical data review is scheduled for October, when the company will present the full dataset from the ABTECT trial, providing the first opportunity for independent oncology boards to verify the lack of an organ-specific clustering pattern.
