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AbbVie to take $4B impairment charge after drug disappoints in cancer trials

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AbbVie to take $4B impairment charge after drug disappoints in cancer trials

AbbVie Inc. said it will take a $4 billion impairment charge related to its 2016 acquisition of Stemcentrx Inc., which brought experimental cancer treatment Rova-T into the drug giant's pipeline.

North Chicago, Ill.-based AbbVie halted patient enrollment in a late-stage study of Rova-T, also known as rovalpituzumab tesirine, last month after the drug failed to prolong the lives of lung cancer patients compared to chemotherapy.

In March 2018, AbbVie had said it will not seek accelerated approval for Rova-T in the U.S. as a third-line treatment for small-cell lung cancer after a mid-stage clinical trial did not show the desired efficacy in treating the disease.

AbbVie purchased Stemcentrx in a transaction valued at about $5.8 billion, plus milestone payments, as it sought new products to fill an anticipated revenue gap as its blockbuster autoimmune therapy Humira, the world's best-selling medicine in 2017, begins to face competition from less expensive copycats.

The company will review drug development programs related to the Stemcentrx acquisition and will look at the remaining $1 billion in intangible assets for additional impairment.