Key Takeaways:
Abivax SA shares collapsed more than 40 percent on June 2 after rare malignancy cases emerged in the company's Phase 3 ABTECT maintenance trial for obefazimod in ulcerative colitis, triggering a securities fraud investigation.
"The cancer cases are well within the range of what could be expected for the patient population," Chris Rabbat, global head of medical affairs at Abivax, said on a conference call with analysts.
The stock fell from a pre-announcement close of $129.69 to as low as $71 midday, erasing all gains since mid-August 2025. Trading volume surged to more than eight times the daily average. Jefferies downgraded Abivax from Buy to Hold and cut its price target to $90 from $160, a 44 percent reduction, citing the cancer signal as a material overhang. Short interest climbed to approximately 12 percent of the float within 24 hours of the disclosure.
The selloff came despite what analysts described as best-in-class efficacy. The 25 mg and 50 mg once-daily doses of obefazimod, a small molecule that upregulates miR-124 in immune cells, achieved clinical remission rates of 50.8 percent and 51.3 percent at Week 44 versus 10.4 percent for placebo — a placebo-adjusted rate of roughly 40 percent. That compares with 39 percent for AbbVie Inc.'s Rinvoq and 32 percent for Pfizer Inc.'s Velsipity, though cross-trial comparisons carry caveats. About 40 percent of patients in the trial had failed prior advanced therapies.
The safety data told a different story. Abivax reported one case each of prostate cancer, breast cancer and colonic dysplasia on the 50 mg dose, plus two cases each of basal and squamous cell carcinoma. No malignancies occurred on the low dose or placebo. The company reported placebo-like infection rates and numerically more discontinuations on placebo than on either obefazimod dose.
Levi & Korsinsky and SueWallSt both announced investigations into whether Abivax adequately disclosed material safety risks before the disclosure. The stock had initially rallied about 20 percent in after-hours trading on June 1 when the Phase 3 efficacy data were first released, before reversing as the cancer cases received broader coverage.
Abivax plans to file for US Food and Drug Administration approval toward the end of 2026. The biotech expects to publish Phase 2b induction data in Crohn's disease in mid-2027. The malignancy signal now threatens to delay or complicate the regulatory path for obefazimod, which had been viewed as a potential $18 billion takeover target for large pharmaceutical companies including AstraZeneca Plc and Eli Lilly & Co.
This article is for informational purposes only and does not constitute investment advice.
