Key facts
- Abivax stock fell over 32% on Tuesday.
- Phase 3 trial data for ulcerative colitis drug obefazimod showed strong efficacy.
- Rare malignancy events were detected in a small number of patients on the higher dose.
- Abivax stated the malignancy events were unrelated to treatment.
- Jefferies downgraded the stock to Hold, citing the malignancy overhang.
- Stifel analysts believe approval remains likely despite the safety signal.
Abivax's stock experienced a sharp decline of over 32% despite strong efficacy data from its Phase 3 trial for the ulcerative colitis drug obefazimod. The positive clinical remission rates, which significantly outperformed placebo and analyst expectations, were overshadowed by the detection of rare malignancy events, including prostate, breast, and skin cancers, in a small number of patients receiving the higher dose. While Abivax stated these events were unrelated to treatment, investors reacted negatively, leading to a downgrade by Jefferies and concerns about a "potential labelling overhang" according to Stifel analysts, though they still anticipate likely approval. The downturn may also alter the outlook for the company's deals.