By Gianluca Lo Nostro
June 2 (Reuters) – Abivax shares tumbled on Tuesday after the French biotech reported late-stage data for its experimental inflammatory bowel drug, with investors focusing on safety concerns even as the treatment showed strong efficacy.
The shares were down 30% in early Paris trading, leading losses on Europe’s STOXX 600 benchmark index, after a spectacular rally last year that saw the stock rise more than 16-fold.
Obefazimod is an oral drug being developed for ulcerative colitis, a chronic disease that causes inflammation and ulcers in the colon. In a 44-week maintenance study, 50.8% of patients on the 25 mg dose and 51.3% on the 50 mg dose achieved clinical remission, compared with 10.4% on placebo.
Both doses met the trial’s main goal, showing respective placebo-adjusted remission rates of 39.3% and 40.3%, among the strongest reported in a large ulcerative colitis programme.
However, three patients on the 50 mg dose had one case each of prostate cancer, breast cancer and colonic dysplasia. Abivax said in its report on the study, published on Monday, that investigators considered the cases unrelated to treatment.
In a note to investors, Jefferies analysts said the cancer cases “broke” its investment thesis, as they may hang over the sentiment regardless of the reason.
“Even if proven to be not drug-related or very low incidence, we expect an overhang to investor interest, strategic optionality, and commercial uptake,” they wrote.
Truist Securities analysts also said that safety questions, with causality still up for debate, were likely to drive share volatility, even though the drug’s efficacy was impressive.
Abivax was not immediately available for additional comment on concerns over the cancer cases.
On the other hand, Yale Jen, senior managing director at brokerage Laidlaw & Company, said the selloff could be an overreaction toward any safety concerns, while calling the overall results a “homerun” for the drug’s development.
(Reporting by Gianluca Lo Nostro; Editing by Milla Nissi-Prussak)
