Why AbbVie Stock Was Getting Mashed on Monday

AbbVie shares plunged by 10%

On Monday, shares of AbbVie Inc. (ABBV) tumbled by 10%, marking their biggest one-day drop since March 2020. The sell-off was triggered by concerns about the company's future earnings potential after it announced disappointing results from a clinical trial.

Clinical trial results disappoint investors

AbbVie's experimental drug, risankizumab, failed to meet its primary endpoint in a Phase 3 clinical trial for the treatment of ulcerative colitis. The drug did not show a statistically significant improvement in endoscopic remission rates compared to placebo.

This news came as a major disappointment to investors, who had been eagerly awaiting positive results from the trial. Risankizumab was seen as a potential blockbuster drug for AbbVie, with analysts estimating peak annual sales of over $1 billion.

Analysts downgrade AbbVie stock

Following the disappointing clinical trial results, several analysts downgraded their ratings on AbbVie stock. Leerink Partners cut its rating from "buy" to "hold," while RBC Capital Markets lowered its target price from $175 to $150.

Analysts cited concerns about the company's future growth prospects, as risankizumab was seen as a key driver of future revenue growth. They also expressed concerns about the company's ability to compete with other players in the immunology market.

Outlook remains uncertain

The outlook for AbbVie remains uncertain following the disappointing clinical trial results. The company's future growth prospects will depend on the success of its other pipeline drugs, as well as its ability to compete in the increasingly competitive immunology market.

For now, investors are taking a cautious approach to AbbVie stock, and the sell-off on Monday is likely to continue in the coming days.