Abivax (NASDAQ:ABVX) shares fell sharply on Tuesday after investors focused on reports of rare malignancy cases in a late-stage clinical trial, overshadowing better-than-expected efficacy results for the company’s experimental ulcerative colitis treatment.
The Paris-listed biotech company saw its stock drop more than 32% in early European trading by 07:34 GMT.
Obefazimod Delivers Strong Remission Rates
Results from the 44-week study showed that obefazimod achieved clinical remission in approximately half of treated patients across both dosage groups.
Patients receiving the 25-milligram dose recorded a remission rate of 50.8%, while those treated with the 50-milligram dose achieved a rate of 51.3%. By comparison, only 10.4% of patients in the placebo group reached clinical remission.
The outcome significantly exceeded market expectations and appeared to compare favorably with currently available treatment options for ulcerative colitis.
Rare Malignancy Cases Weigh on Investor Sentiment
While obefazimod was generally well tolerated throughout the study, investor attention shifted toward a small number of malignancy cases reported during the trial.
The cases were described as rare, isolated events and were not considered related to the treatment. Nevertheless, their inclusion in the study data raised concerns among investors and contributed to the sharp decline in the company’s share price.
Analysts Highlight Strong Efficacy but Note Added Uncertainty
Analysts at Stifel said the study results reinforced the competitive positioning of obefazimod within the ulcerative colitis treatment landscape.
The trial results were “clearly above expectations and outperforming current therapies, confirming the differentiated profile of obefazimod,” Stifel analysts led by Damien Choplain said in a note, adding that the malignancy events “introduced uncertainty and put the share price under pressure.”
The analysts also suggested that the reported cases may ultimately have limited implications for the drug’s overall safety profile.
“While the malignancy signal cannot be ignored, we view it as a potential labelling overhang rather than evidence of a clear causal safety risk,” they wrote.