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AbbVie Takes $3.5B Impairment Charge for Failed Schizophrenia Drug
ABBVAbbVie(ABBV) Investopedia·2025-01-10 16:51

Core Viewpoints - AbbVie (ABBV) shares declined after the company announced a 3.5billionimpairmentchargeduetothefailureofitsexperimentalschizophreniadrug,emraclidine[1][3]−TheimpairmentchargeisrelatedtotheacquisitionofCerevelTherapeuticsHoldings,fromwhichAbbVieobtainedemraclidine[1][3]−ThePhase2trialofemraclidinedidnotmeetprimaryendpoints,leadingtoasignificantdecreaseinestimatedfuturecashflowsfortheproduct[1][2][3]FinancialImpact−AbbVie′ssharesfell13.5 billion impairment charge due to the failure of its experimental schizophrenia drug, emraclidine [1][3] - The impairment charge is related to the acquisition of Cerevel Therapeutics Holdings, from which AbbVie obtained emraclidine [1][3] - The Phase 2 trial of emraclidine did not meet primary endpoints, leading to a significant decrease in estimated future cash flows for the product [1][2][3] Financial Impact - AbbVie's shares fell 1% in recent trading but are up approximately 7% over the past year [2] - The 3.5 billion impairment charge reflects the financial impact of the drug's failure on the company's balance sheet [1][3] Drug Development Update - Emraclidine, an experimental medicine for treating schizophrenia in adults, failed to meet primary endpoints in its Phase 2 trial [1][3] - Following the trial results, AbbVie evaluated the impact, concluding a significant reduction in future cash flows for the product [2][3]