The centerpiece of AbbVie’s $8.7 billion Cerevel acquisition just imploded.
Emraclidine, a schizophrenia program expected to compete with the newly-approved Cobenfy from Bristol Myers Squibb and Karuna, failed in two separate Phase 2 studies, AbbVie said Monday morning. There were no statistically significant differences between emraclidine and placebo on a schizophrenia assessment called PANSS across all dosing arms.
The news prompted an earthquake on Wall Street, with AbbVie’s stock
$ABBV
down more than 12% at market open. Bristol Myers shares
$BMY
shot up as much as 13%, its highest one-day jump since March 2006,
according
to
Bloomberg News
.
Cantor Fitzgerald analyst Olivia Brayer wrote the miss “wasn’t on anyone’s bingo card.” For Bristol Myers, it removes Cobenfy’s biggest competitor and may push peak sales estimates higher than the consensus of $4 billion. (BMS has not publicly said how much it expects in Cobenfy sales.)
Emraclidine’s failure also could illustrate how the mechanism behind the drug, and newer neuroscience programs more broadly, is less of a slam dunk than investors might have thought. When Cobenfy, then known as KarXT, read out positively in Phase 3, biopharma companies flooded the space with money: Bristol Myers acquired Karuna for $14 billion and AbbVie bought Cerevel.
Biotechs also raked in the cash. MapLight Therapeutics, which is developing a drug similar to Cobenfy, snagged a $225 million Series C last year. Neumora went public in September 2023 with a $250 million IPO. And Seaport Therapeutics, with much of the same leadership team that worked at Karuna, assembled a $225 million crossover round last month.
But the failure serves as a reminder that CNS drug development remains starkly challenging, even for two drugs using similar mechanisms like emraclidine and Cobenfy. Stifel analyst Paul Matteis said in an investor note that the “easier” perception of making these drugs is partly due to recency bias, but also because of wins across neuro like in Alzheimer’s, epilepsy and depression.
That is likely to change, he said: “The emraclidine failure today is likely to make investors incrementally more cautious on CNS ph2 studies (especially small ones) and the degree to which they firmly derisk a ph3.”
Cobenfy is an M1/M4-preferring muscarinic agonist, while emraclidine is an M4 muscarinic receptor agonist. Matteis added that questions might emerge for companies with schizophrenia drugs targeting only M4, including Neumora
$NMRA
and Neurocrine Biosciences
$NBIX
. Those companies’ stock prices ticked up about 3% and 1.4% each.
AbbVie executives previously described emraclidine as representing the “bulk of the value” of the Cerevel buyout. But it’s tough to see where that might come from, depending on how — or if — the company tries to bring it forward.
In the first Phase 2 study, EMPOWER-1 randomized patients 1-to-1-to-1 across two dose levels (10 mg and 30 mg) and placebo. The second trial, EMPOWER-2, randomized patients the same way, but looked at 15 mg and 30 mg. All participants, regardless of dosing, took emraclidine once per day. Researchers measured the drug’s effect on PANSS out to six weeks.
EMPOWER-1’s placebo group showed a PANSS decline of 13.5 points, compared to 14.7-point and 16.5-point declines in the 10 mg and 30 mg dosing arms, respectively. EMPOWER-2 demonstrated a 16.1-point decline in placebo patients, compared to 18.5-point and 14.2-point declines in the respective 15 mg and 30 mg dosing arms.
AbbVie did not report any p-values for the differences, and executives declined an interview request through a company spokesperson. The spokesperson told
Endpoints News
that AbbVie is “continuing to analyze the data to determine next steps.”
Matteis said a higher placebo effect than expected may have accounted for the failure, though “it’s outright surprising” to see both studies miss. He also noted that the 2-to-1 randomization of drug to placebo may have indicated to patients whether they were receiving the drug or not.
