AbbVie Stock Declines After Schizophrenia Drug Trials Miss Mark, But Retail Stays Stoic

Shares of pharma major AbbVie Inc ($ABBV) tumbled over 12% on Monday after the company disclosed that its Schizophrenia drug trial failed to meet their primary endpoint.

AbbVie said its two phase 2 EMPOWER trials investigating emraclidine as a once-daily, oral monotherapy treatment for adults with schizophrenia (experiencing an acute exacerbation of psychotic symptoms) did not meet their primary endpoint of showing a statistically significant improvement in the change from baseline.

Chief Scientific Officer Roopal Thakkar said the firm continues to analyze the data to determine next steps.

Following the development, AbbVie became the fourth most trending ticker on Stocktwits. Despite the negative news, retail sentiment jumped into the ‘bullish’ territory (71/100) from the ‘bearish’ zone a day ago. The move was accompanied by ‘extremely high’ retail chatter.

Many users on Stocktwits are expressing optimism on the stock, believing the current fall in stock price to have provided a buy-on-dips opportunity.

The company recently announced third-quarter results that saw the firm’s net revenue decline 4% year-over-year (YoY) to $14.46 billion. Adjusted diluted earnings per share (EPS) rose to $3 compared to $2.95 in the same period a year ago.

In October, the firm also announced the acquisition of Aliada, a biotechnology company advancing therapies using a novel blood-brain barrier (BBB)-crossing technology to address challenging central nervous system (CNS) diseases.

AbbVie had said it will acquire all outstanding Aliada equity for $1.4 billion in cash, subject to certain customary adjustments. The transaction is expected to close in the fourth quarter of 2024.

Shares of AbbVie have gained over 9% since the beginning of the year.

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