French biotechnology company Abivax shares plunge 30% due to safety concerns over intestinal disease medication

Source: Global Market Broadcast

Shares of French biotechnology company Abivax (stock code: ABVX.PA) plummeted 30% in early trading on the 2nd, making it the biggest decliner in the STOXX 600 index. Previously, the company released late-stage clinical trial data for its experimental inflammatory bowel disease drug, Obefazimod. Although the therapy demonstrated strong clinical efficacy, cases of cancer observed during the trial have raised significant market concerns regarding the drug's safety.

Obefazimod is an investigational oral medication for chronic ulcerative colitis. In a 44-week maintenance study, clinical remission rates for patients taking 25mg and 50mg doses reached 50.8% and 51.3%, respectively, while the placebo group achieved only 10.4%. The data show that both doses met the primary endpoint of the trial, with placebo-adjusted remission rates of 39.3% and 40.3%, ranking among the highest efficacy data ever reported in similar large-scale studies.

However, among patients taking the 50mg dose, there was one case each of prostate cancer, breast cancer, and colonic intraepithelial neoplasia. Although Abivax emphasized in the research report released on Monday that the involved investigators believe there is no direct causal relationship between these malignancies and the drug, the news has still caused major turmoil in the capital markets. As of now, Abivax has not issued any further comments on this matter.

Market analysts are generally cautious. Jefferies analysts pointed out that regardless of the ultimate cause, these cancer cases cast a shadow over investor sentiment, the company’s strategic options, and future commercialization efforts. Analysts from Truist Securities also believe that despite the drug’s impressive efficacy, contentious safety concerns—whether causally relevant or not—are bound to result in significant short-term stock price volatility.

However, some industry experts have differing opinions. Yale Jen, Senior Managing Director at investment bank Laidlaw & Company, noted that from an overall clinical data perspective, the results of the drug’s development are “truly groundbreaking,” and the current stock sell-off is likely an overreaction to safety concerns.