When AbbVie bought Stemcentrx, it was eyeing an initial approval for Rova-T in 2018 and as much as $5 billion in peak sales. It didn't work out that way. (AbbVie)

Deal size:
$10.2 billion
Date announced: April 28, 2016

When AbbVie splashed $5.8 billion upfront and reserved another $4 billion in milestones for Stemcentrx in 2016, the primary focus was Rova-T, which then looked to be the first targeted therapy for small cell lung cancer.

At that time, AbbVie was eyeing an initial approval in 2018 and as much as $5 billion in peak sales. That could have helped fill a yawning revenue gap once Humira yields to cheaper biosimilars. But fast-forward to August 2019, when the company officially pulled the plug on the antibody-drug conjugate after it failed yet another lung cancer trial.

The drug counted Silicon Valley investor Peter Thiel among its original backers and was armed with a seemingly workable mechanism of action: targeting the stem cell protein DLL3 that’s found in many small cell lung cancers. But the drug started showing some problems soon after the acquisition.

At 2016’s American Society of Clinical Oncology annual meeting, preliminary results from a phase 1 study showed that Rova-T elicited a response in 10 out of 26 (39%) patients with high levels of DLL3, and 41 (68%) achieved a clinical benefit. The drug also prolonged these patients’ lives by a median of 5.8 months.

Industry watchers were not impressed, pointing out that the survival benefit was only an incremental improvement over the historical average and certainly not enough to justify the hefty $5.8 billion AbbVie had paid.

RELATED: It's official—AbbVie dumps Rova-T after another lung cancer fail

But the first real disappointment came in 2018, from a phase 2 trial that was supposed to support the drug’s filing in third-line SCLC. In that study, called Trinity, the objective response rate hit merely 16% with a median overall survival of 5.6 months.

The lackluster performance forced AbbVie to ditch its plan for accelerated approval and instead turn to its phase 3 Meru and Tahoe studies in the first- and second-line settings.

Bad news just kept flooding in. In April 2018, AbbVie halted a trial of another Stemcentrx candidate—an antibody drug conjugate called SC-007—in solid tumors. "[T]here was a benefit/risk profile imbalance observed,” the company said at the time.

Then, in December 2018, AbbVie said it would stop enrollment in the Tahoe study after a data monitoring committee found that patients on standard chemotherapy actually lived longer than those in the Rova-T arm.

It was a painful development. AbbVie took a $5.1 billion write-off related to the Stemcentrx acquisition, the company said in its annual securities filing in February. The ax also fell on former Stemcentrx employees as AbbVie cut loose 178 jobs from the biotech.

Finally, AbbVie called it quits on Rova-T in August 2019, after the Meru trial testing the drug as a first-line maintenance therapy failed to move the needle at an interim analysis. By that time, the PD-1/L1 immuno-oncology agents, including Roche’s Tecentriq, Bristol-Myers Squibb’s Opdivo and Merck & Co.’s Keytruda had already raked up FDA approvals in SCLC.

The company didn’t reply to a FiercePharma request for comment.