12:00 AM
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Oct 22, 2012
 |  BioCentury  |  Finance

Abbott's wild ride

Bardoxolone failure, AbbVie forecast erase Abbott's gains on HCV data

Abbott Laboratories (NYSE:ABT) had a rollercoaster ride last week, gaining $4.3 billion in market cap on positive HCV data before losing more than $8.6 billion on details of its AbbVie pharmaceutical spinout and safety signals for chronic kidney disease candidate bardoxolone.

Last Monday, shares rose $2.77 to $72.05 after Abbott reported data from the Phase IIb Aviator trial of an interferon-free regimen including three of Abbott's antivirals. The regimen - ABT-450 plus ABT-267, ABT-333, ritonavir and ribavirin for 12 weeks - produced an SVR12 in 99% of treatment-naive patients and in 93% of null responders (see Cover Story).

The gains were short-lived. Abbott lost $4.9 billion in market cap on Wednesday after reporting 3Q12 earnings, including revenues of $9.8 billion that missed the Street's estimate of $9.9 billion (see "EPS Watch," A21).

Abbott also disclosed that AbbVie's tax rate will be about 22%, which is higher than the low-teens rate previously forecast. The pharma said the higher rate reflects less investing overseas and more emphasis on paying dividends.

Abbott lost a further $3.8 billion in value on Thursday after partner Reata Pharmaceuticals Inc. said it would terminate the Phase III BEACON trial in Type II diabetics with CKD after seeing "excess serious adverse events and mortality" in patients receiving bardoxolone methyl.

Abbott has rights to the antioxidant inflammation modulator (AIM) outside the U.S. and certain Asian markets under a 2010 deal in which Reata received $450 million comprising an upfront payment, near-term milestones and an undisclosed equity investment from the pharma.

In 2011, Abbott shelled out an additional $400 million for Reata's remaining AIMs, which activate nuclear factor (erythroid-derived 2)-like 2 (NFE2L2; NRF2). Under the deal, the partners equally share costs and profits for all indications, excluding select autoimmune diseases, for which Abbott and Reata split costs and profits 70/30.

Abbott said the bardoxolone data would not affect AbbVie's financials....

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