Abivax shares soared 36%. The company dispelled concerns about a cancer-causing drug

Shares of the French biotechnology company Abivax rose by more than a third during trading on Tuesday, June 30, following the release of new data on its lead candidate—a drug for treating intestinal diseases. The new study results dispelled concerns among some investors that the drug might cause cancer as a side effect, Bloomberg notes.

Abivax shares rose by about 36% during trading in Paris, marking their biggest one-day gain since January, according to Bloomberg. In pre-market trading in New York, the company’s shares were up 32%.

This occurred following the publication of study data: the incidence of cancer among patients with ulcerative colitis who were taking obefazimod did not exceed the typical rates reported in scientific literature. In early June, the company’s stock price plummeted by approximately 44% following the release of a report that revealed cases of cancer among patients taking a higher dose of obefazimod. The tumors developed in individuals who were at risk for cancer and, in some cases, already had a history of skin cancer.

Recent data indicate that more than 37% of patients who initially did not respond to treatment achieved clinical remission approximately 10 months after starting the medication.

"These results suggest that a significant proportion of patients who initially showed no improvement may still derive substantial benefit from a longer course of treatment," Abivax stated.

Analysts at Jefferies called the new data “encouraging,” but expressed doubt that it would be enough for investors, according to CNBC. In their view, “the risk of cancer may be difficult to dismiss, while the company’s calendar of other significant events is sparse, there are cash needs, and the prospects for growth catalysts lie outside of mergers and acquisitions.”

In their view, institutional investors and doctors are likely to put the issue of malignant tumors behind them, but retail investors may still have reservations about buying the company's stock.

At the same time, analysts have described obefazimod as a potentially best-in-class treatment for ulcerative colitis, according to CNBC. Abivax is also testing this drug for Crohn’s disease (a chronic inflammatory disease that can affect the entire gastrointestinal tract, from the mouth to the rectum), which opens the door to the multibillion-dollar market for treatments for inflammatory bowel diseases, CNBC reports.

“The updated data should put an end to concerns” about whether there are signs that obefasimod could cause tumors, noted analysts at Piper Sandler, led by Allison Bratzel. The study also demonstrated the compound’s “remarkable” efficacy, Bratzel added. Her comments were reported by Bloomberg.

Abivax is being positioned as a prime takeover target, even though its stock soared by nearly 1,700% last year, according to CNBC. The Paris-based newspaper La Lettre reported earlier this year that the American pharmaceutical giant Eli Lilly wants to buy Abivax at a price twice the market value.

Abivax emphasized that the company plans to submit an application for approval of obefasimod to the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2026. It was previously reported that the drug is expected to hit the market in 2027, but experts agree that the company will be acquired before then, according to CNBC.

This article was AI-translated and verified by a human editor