Shares of biotech Abivax plummet 30% after reports of cancer in trial participants

Shares of French biotech company Abivax plummeted 30% after the publication of fresh data on its lead project - a drug to treat ulcerative colitis. Despite the fact that Abivax shares soared nearly 1,700% last year, pharmaceutical giants, particularly Eli Lilly, are eyeing it, La Lettre wrote. Most Wall Street analysts still expect the company's stock price to rise. Is it worth buying them on the fall?

Abivax quotes on the U.S. premarket on June 2 fell 29.6% after the publication of results from a clinical trial of obifazimod, a drug for the treatment of ulcerative colitis.

In the new study, the drug demonstrated clinically significant efficacy in terms of maintenance therapy, and the remission rate at both dosages tested was about 40%. However, the results of the study also showed the presence of cancer cases in patients taking the higher dose of the drug.

One case each of prostate cancer, breast cancer and colorectal dysplasia was reported in the study group. Abivax emphasized that these cases were not related to treatment.

There were also four cases of skin cancer reported with the higher 50-mg dose of the drug, of which two were found to be unrelated or unlikely to be related to the drug, and the remaining patients had a history of skin cancer, Abivax said.

After the publication of the results, analysts on Wall Street began to revise their estimates. For example, an analyst at Jefferies downgraded Abivax shares from "buy" to "hold" and lowered his target price from $160 to $90, MarketScreener reports. His target implies a 19.5% drop in the stock relative to the last closing price.

"The cancer data complicates the situation. Even if it is unrelated background noise, we think it is a very real negative, especially given the lack of other significant events for the company's value over the next year," CNBC quoted a Jefferies analyst as saying," the Jefferies analyst was quoted as saying by CNBC.

"A "reasonable explanation" for the cancer cases seems plausible, but it "does not seem like the kind of negative factor that can be easily dismissed," Jefferies added.

Morgan Stanley maintained its recommendation to buy Abivax shares (Overweight rating), reducing the target price from $145 to $132. His assessment implies the shares growth by 18% relative to the last closing price.

Six of the eight analysts covering Abivax stock recommend buying it. One maintains a neutral stance, while one more advises to sell.

In mid-2025, results from the final phase of a trial of the ulcerative colitis drug obifazimod exceeded even the most optimistic expectations, CNBC reports.

Analysts have characterized the experimental drug as a potential best-in-class treatment for ulcerative colitis, the channel notes. Abivax is also testing this drug against Crohn's disease, which opens it up to the multi-billion dollar market for irritable bowel syndrome (IBS), CNBC notes.

Earlier this year, analysts Stifel and Van Lanschot Kempen named Abivax as a potential takeover target, despite the fact that its shares soared nearly 1,700% last year. Paris-based newspaper La Lettre wrote that US pharmaceutical giant Eli Lilly wants to buy Abivax at twice the market price.

Abivax CEO Mark de Garidel told CNBC in March that he was confident in the positive results of the supporting research, and made it clear that the company was in no rush to make a deal or partnership as terms would be more favorable once the data was available.

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