AbbVie takes $4B hit on Rova-T failures

AbbVie
The woe keeps coming for AbbVie and its 2016 Stemcentrx deal (AbbVie).

AbbVie’s once-highly lauded cancer drug Rova-T, bought from a $5.8 billion deal with Stemcentrx in 2016, will cost the company an additional $4 billion in an impairment charge as the woe keeps coming from this ill-fated deal.

A month ago, AbbVie said would stop enrollment in a phase 3 trial of Rova-T, in lung cancer patients. The decision came after a data-monitoring committee found that patients taking Rova-T had worse survival rates than patients in the control arm.

This was the latest setback in a round of poor shows from AbbVie coming after it abandoned its plans to seek an accelerated FDA approval for Rova-T as a third-line treatment for relapsed or refractory SCLC.

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The company made that call after the drug turned up weak phase 2 data. Of the 177 patients in the open-label test, the best overall response rate was 29%, with objective response rate at just 16%. The median overall survival was 5.6 months. 

Now, in an SEC form posted a few days before the start of the J.P. Morgan healthcare conference, the biopharma said: “On Jan. 4, 2019, AbbVie determined that it will record an impairment charge on intangible assets acquired as part of AbbVie’s 2016 acquisition of Stemcentrx, Inc. (Stemcentrx).

“On Dec. 5, 2018, AbbVie announced the decision to stop enrollment for the TAHOE trial, a Phase 3 study evaluating rovalpituzumab tesirine (Rova-T), an investigational antibody-drug conjugate targeting the cancer-stem cell-associated delta-like protein 3, as a second-line therapy for advanced small-cell lung cancer.

“Following this decision, AbbVie began an evaluation of the Stemcentrx-related intangible assets for impairment. The estimated net impact of this impairment and the related adjustment to contingent consideration liabilities is approximately $4 billion.

“AbbVie continues to evaluate information with respect to the Stemcentrx-related clinical development programs and will monitor the remaining $1 billion of intangible assets for further impairment.”