AbbVie Cuts 178 Jobs at Stemcentrx as $5.8 Billion Rova-T Bet Fails

April 2016, Bio-PharmaceuticalsAbbVie announced it would acquire the venture capital-backed oncology company Stemcentrx for $5.8 billion to strengthen the biopharmaceutical giant’s anticancer drug portfolio and help reduce its reliance on its blockbuster product, Humira. Now, however, it appears that before this reliance could be alleviated, AbbVie is already seeking alternative strategies. On March 27, AbbVie announced the elimination of 178 positions at Stemcentrx.

According to the WARN filing, the reductions will come from the company’s South San Francisco, U.S. location, with 178 positions classified as “permanent layoffs.” In 2016, the company had 240 employees, meaning that the majority of its workforce would be laid off.

According to the latest report on worker adjustment and retraining notifications, Stemcentrx’s most valuable asset is its cancer drug, known as Rova-T (rovalpituzumab tesirine). This agent consists of a cytotoxic chemical linked to an antibody that targets delta-like protein 3 (DLL3), a protein associated with tumor stem cells and found in more than 80% of cancer patients. Biomarkers are used to help select cancer patients who express this protein. In 2016, AbbVie paid $5.8 billion in cash to acquire the drug, with commitments for up to $4 billion in milestone payments. Following this substantial acquisition, expectations for Rova-T surged. While there was widespread optimism about the drug’s promising sales prospects, its development failed to meet expectations after the acquisition.

Rova-T Development Status (from AbbVie's official website)

Previously, AbbVie was evaluating the efficacy of Rova-T in combination with Opdivo (nivolumab) and Opdivo plus Yervoy (ipilimumab) as a second-line treatment for extensive-stage small cell lung cancer (SCLC). In December 2018, AbbVie announced its decision to discontinue the Phase 3 clinical trial, Tahoe, which was designed to assess Rova-T in patients with advanced or metastatic SCLC with high DLL3 expression who had progressed after first-line platinum-based chemotherapy or upon first disease progression. The termination was prompted by findings from the data monitoring committee that patients receiving Rova-T exhibited lower survival rates compared to those in the control group.

Furthermore, another Phase 2 clinical trial of Rova-T also demonstrated poor performance. In this open-label trial involving 177 patients, the best overall response rate to Rova-T was 29%, the objective response rate was only 16%, and the median overall survival was 5.6 months. AbbVie has abandoned its plan to seek accelerated approval from the FDA for Rova-T as a third-line treatment for recurrent or refractory small cell lung cancer (SCLC). Following this decision, AbbVie began conducting an impairment assessment of intangible assets related to Stemcentrx. In January 2019, AbbVie announced that asset impairments resulting from a series of trial failures and minimally effective trial outcomes would lead to a $4 billion loss. The company stated it would continue to evaluate information on Stemcentrx-related clinical development programs and monitor further impairment of the remaining $1 billion in intangible assets.

A series of poor trial results has also made this huge acquisition one of the worst mergers and acquisitions in the biopharmaceutical industry recently. Now, AbbVie has finally decided to reform Stemcentrx. (Compiled by Sina Medicine / Fan Dongdong)

Reference Sources:

1、Pain intensifies for AbbVie as it slashes 178 jobs from Stemcentrx

2、First AbbVie chopped a PhIII, then they wrote off $4B in book value. Now 178 Stemcentrx workers are getting the ax

3、https://www.abbvie.com/our-science/pipeline/rova-t.html

Source: Pharmaceutical First Time Author: Fan Dongdong