AbbVie takes $4B impairment charge on Stemcentrx
- After a Phase 3 trial setback last month, AbbVie began evaluating Stemcentrx's intangible assets to estimate an impairment charge, which the pharma has ballparked at $4 billion, according to a Jan. 4 filing with the Securities and Exchange Commission.
- AbbVie acquired the company in 2016 for cash and stock payments of $5.8 billion and said it will monitor the remaining $1 billion of Stemcentrx intangible assets "for further impairment."
- At the time of the deal, Stemcentrx had been seeking breakthrough therapy designation for Rova-T and AbbVie predicted the drug had "a multi-billion dollar peak revenue opportunity with expected commercialization in 2018."
When it touted the acquisition deal in 2016, AbbVie saw it as a route into small cell lung cancer treatment with Rova-T (rovalpituzumab tesirine), as well as a way to boost its early-stage clinical pipeline in solid tumors.
At the time, AbbVie expected the deal to become profitable by 2020. Instead, Rova-T has seen setback after setback and has now merited a multi-billion impairment charge.
Last month, AbbVie stopped enrollment in the TAHOE Phase 3 trial for Rova-T in second-line advanced SCLC after patients died sooner on the treatment arm compared with the chemotherapy arm.
This wasn't the first challenge for Rova-T. AbbVie had already said it would not push the drug through for accelerated approval in third-line SCLC. Clinical trials of Rova-T in advanced solid tumors and in extensive-stage small cell lung cancer are still ongoing, according to ClinicalTrials.gov.
While AbbVie said stopping the TAHOE study wouldn't affect other Rova-T studies, it will cut down on potential therapeutic applications for the drug. And this has been borne out by AbbVie's decision to write down the assets, effectively acknowledging that the value of the deal has faltered.
Despite the Rova-T wounding, AbbVie still appears confident about picking up assets in oncology. Last week it paid $105 million upfront for exclusive global rights to Tizona Therapeutics' preclinical CD39-targeted therapies.
This will feed into the company's immuno-oncology portfolio, led by Imbruvica (ibrutinib). Imbruvica is approved for certain types of lymphoma and leukemia.
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