AbbVie Takes $3.5B Hit as Emraclidine Fails in Schizophrenia Trials, Tavapadon Shows Promise in Parkinson's

In a significant setback for AbbVie, the pharmaceutical giant announced a $3.5 billion impairment charge following the failure of its schizophrenia drug candidate, emraclidine, in two mid-stage clinical trials. The news comes just over a year after AbbVie's $8.7 billion acquisition of Cerevel Therapeutics in December 2023, which brought emraclidine into its portfolio.

Emraclidine's Disappointing Performance

AbbVie revealed in a recent SEC filing that emraclidine, a next-generation antipsychotic drug candidate, failed to meet its primary efficacy endpoint in two Phase II EMPOWER studies. The drug, which works as a positive allosteric modulator of the muscarinic M4 receptor, was being tested as a once-daily, oral monotherapy in adults with schizophrenia experiencing an acute exacerbation of psychotic symptoms.

In the EMPOWER-1 study, emraclidine showed only a slight improvement in scores versus placebo on the Positive and Negative Syndrome Scale (PANSS). More concerning, the EMPOWER-2 study found that the lower dose of emraclidine led to an increase in PANSS scores, indicating a worsening of symptoms. These disappointing results led to a 12% drop in AbbVie's stock price when announced in November 2024.

Financial Implications and Ongoing Evaluation

The failure of emraclidine has resulted in a significant financial blow to AbbVie. The company stated in its SEC filing, "Following the results of these trials, AbbVie began an evaluation of the emraclidine intangible asset for impairment which resulted in a significant decrease in the estimated future cash flows for the product." This evaluation led to the estimated $3.5 billion non-cash after-tax intangible asset impairment charge.

Despite this setback, AbbVie continues to evaluate the Cerevel-related clinical development program. The remaining assets from the Cerevel acquisition are valued at approximately $3.6 billion. Notably, emraclidine is still being studied in a Phase I trial for Alzheimer's disease psychosis, though the future of this program remains uncertain given the recent failures in schizophrenia.

Tavapadon Shows Promise in Parkinson's Disease

While emraclidine's failure has been a significant blow, another drug acquired through the Cerevel deal has shown more promising results. Tavapadon, a therapy for Parkinson's disease, has demonstrated success in multiple Phase III trials throughout 2024.

In September 2024, the TEMPO-1 study showed that 5 mg of tavapadon improved combined scores on the Movement Disorder Society-Unified Parkinson's Disease Rating Scale by 9.7 points at 26 weeks, indicating better motor performance. The drug also met secondary endpoints, showing improved motor experiences of daily living.

Following this success, tavapadon continued to impress in the TEMPO-2 and TEMPO-3 trials, demonstrating significant improvements in motor function and daily living complications. These positive results have exceeded AbbVie's initial expectations, according to Chief Scientific Officer Roopal Thakkar, M.D. The company plans to submit an approval request for tavapadon to the FDA this year.