What happened
Shares of drugmaker AbbVie (ABBV +1.10%) are off by 7.8% in Wednesday afternoon's trading session following a decision from the Food and Drug Administration to require a heart-risk warning on the label of its arthritis treatment Rinvoq.
So what
As part of its routine reviews of clinical trial data, the FDA announced today that all Janus kinase (JAK) inhibitors approved for use as arthritis treatments in the United States are now to be sold with a label cautioning their users that such drugs raise the risk of serious heart-related events, cancer, blood clots, and even death. AbbVie's Rinvoq is one of these JAK-inhibiting prescription drugs.
Image source: Getty Images.
Blame Pfizer (PFE +0.36%), however. The FDA's decision was rooted in data regarding Pfizer's arthritis medicine Xeljanz. The two drugs in question are built around the same JAK-inhibiting approach, and in its later-stage testing it was shown to increase the risk of blood clots and related heart problems.
Now what
The knee-jerk reaction is understandable. While AbbVie is best known for its arthritis, plaque psoriasis, and Crohn's disease treatment Humira, Rinvoq was one of the pharmaceutical franchises hoped to help replace the loss of sales linked to the expiration of Humira's patents.
As it stands right now though, Rinvoq accounts for less than 3% of AbbVie's revenue, and its potential was still unclear. The pharmaceutical giant also still has more than two dozen drugs in its portfolio -- many of which are already bigger franchises than Rinvoq -- and even more in the research and development pipeline. There's also nothing to firmly suggest arthritic patients will abandon or avoid the drug simply because of the label warning. Once investors work through the initial shock of Wednesday's news, the sell-off could readily become a buying opportunity for investors already eyeing the stock.
