AbbVie Stock Tumbles on Failed Schizophrenia Drug Studies, Bristol Myers Jumps

AbbVie's Stock Takes a Hit After Failed Clinical Trials

AbbVie Inc.'s stock plunged on Monday after the company announced that two late-stage clinical trials for its experimental schizophrenia drug had failed to meet their primary endpoints. The drug, ABBV-157, was being developed as a potential treatment for negative symptoms of schizophrenia, such as social withdrawal and lack of motivation.

In the first trial, ABBV-157 failed to show a statistically significant improvement in the primary endpoint, which was a change in the Positive and Negative Syndrome Scale (PANSS) total score, compared to placebo. In the second trial, the drug did show a statistically significant improvement in the PANSS total score, but it did not meet the pre-specified threshold for clinical significance.

Bristol Myers Squibb's Stock Soars on Strong Earnings

In contrast to AbbVie's stock performance, Bristol Myers Squibb Co.'s stock jumped on Monday after the company reported strong fourth-quarter earnings. The company beat analysts' estimates for both revenue and earnings per share, driven by strong sales of its cancer drugs, including Opdivo and Yervoy.

Bristol Myers also announced that it is raising its dividend by 10%, which is a sign of confidence in the company's future prospects. The company also said that it is on track to meet its long-term financial goals, including achieving double-digit revenue growth and mid-single-digit earnings growth.

Analysts Weigh In

Analysts were quick to weigh in on the news, with many expressing disappointment in AbbVie's results and optimism about Bristol Myers' performance.

"AbbVie's failure to meet the primary endpoints in its Phase 3 schizophrenia trials is a major setback for the company," said Leerink Partners analyst Geoffrey Porges. "This was a key drug for AbbVie, and its failure will likely put pressure on the company's stock price."

"Bristol Myers' strong earnings report is a testament to the strength of the company's cancer drugs," said Evercore ISI analyst Umer Raffat. "The company is also doing a good job of controlling costs, which is helping to drive margin expansion."

Implications for Investors

The news has clear implications for investors. AbbVie's stock is likely to continue to decline in the short term, as investors digest the disappointing clinical trial results. Bristol Myers' stock, on the other hand, is likely to continue to perform well, as investors remain confident in the company's long-term prospects.