AbbVie, a prominent global biopharmaceutical company, acquired Stemcentrx, a privately held biotechnology company, in 2016. This acquisition was a high-stakes venture aimed at strengthening its oncology portfolio. This substantial investment reflected AbbVie’s aspirations for Stemcentrx’s experimental therapies.
The Rationale Behind the Acquisition
AbbVie acquired Stemcentrx primarily for its lead investigational drug, rovalpituzumab tesirine (Rova-T). Rova-T was designed to treat small cell lung cancer (SCLC) and other neuroendocrine tumors. It operates as an antibody-drug conjugate (ADC), combining a targeted antibody with a cytotoxic agent.
Rova-T’s antibody component targets delta-like protein 3 (DLL3), a protein found on over 80% of SCLC tumor cells but not typically on healthy tissues. By binding to DLL3, Rova-T aimed to deliver its toxic payload directly to cancer cells, minimizing harm to healthy cells. This targeted approach generated considerable excitement, given the challenges in treating advanced SCLC. The acquisition was valued at approximately $5.8 billion upfront, with potential additional milestone payments of up to $4 billion. This underscored AbbVie’s high hopes for Rova-T’s potential multi-billion dollar peak revenues.
Rova-T’s Clinical Trial Pathway
Rova-T’s clinical development began with promising early-stage results. Initial Phase 1/2 studies in relapsed SCLC patients showed encouraging signs. These studies reported overall response rates of 44% in patients with high DLL3 expression, fueling initial optimism.
Despite early indicators, Rova-T faced significant setbacks in later-stage trials. The Phase 3 TAHOE study, comparing Rova-T to topotecan as a second-line therapy for DLL3-high SCLC, was halted early. An independent data monitoring committee recommended discontinuing enrollment because Rova-T showed inferior overall survival compared to topotecan, the standard chemotherapy. Patients treated with Rova-T in the TAHOE study had a median overall survival of 6.3 months, compared to 8.6 months for those on topotecan.
Further disappointment came with the Phase 3 MERU trial, evaluating Rova-T as a first-line maintenance therapy for advanced SCLC. An interim analysis revealed no survival benefit for patients receiving Rova-T compared to placebo, leading to the termination of the study and the entire Rova-T program. The safety profile in these later trials was consistent with earlier observations, but lack of efficacy led to the program’s discontinuation.
The Aftermath for AbbVie
Rova-T’s failure had substantial financial repercussions for AbbVie. In early 2019, the company recorded an impairment charge of approximately $4 billion related to Stemcentrx’s intangible assets. This significant write-down reflected the asset’s diminished value following unsuccessful clinical trials. The initial acquisition cost was approximately $5.8 billion upfront, and subsequent failures effectively wiped out a large portion of that investment.
This setback prompted AbbVie to re-evaluate its oncology pipeline and drug development strategy. The company announced it would prioritize other development programs within its oncology portfolio, shifting focus from Rova-T. The Rova-T experience underscored the inherent risks in pharmaceutical research and development, particularly for high-value acquisitions based on early-stage data. It highlighted the importance of robust clinical trial outcomes in validating a drug’s potential and the substantial financial exposure companies face when promising candidates do not succeed.