"We would recommend taking advantage in weakness in ABBV's shares," SunTrust Robinson Humphrey Inc.'s John T. Boris said in a note, reaffirming his buy rating and $157 price target on the stock.
Shares of AbbVie were down 11.2% to $99.84 in afternoon trading on Thursday. The stock remains up 3.2% year to date and 52.7% over the past 12 months.
The North Chicago, Ill., biopharmaceutical company said Thursday morning it would not seek accelerated approval for rovalpituzumab tesirine, or Rova-T, in third-line relapsed/refractory small-cell lung cancer (SCLC). Third line refers to treatment given to a patient when the initial and subsequent therapies do not work or no longer work.
AbbVie, after consulting with the U.S. Food and Drug Administration, made the decision "based on magnitude of effect across multiple parameters" in a Phase 2 study, according to the announcement.
"Although the Rova-T news is a setback in a very difficult to treat SCLC, it does not materially change our overall outlook on ABBV's long-term growth prospects," Boris said.
AbbVie is continuing its Phase 3 studies of Rova-T in first- and second-line SCLC.
"We would recommend using this news as a buying opportunity," especially since data from the first-line and second-line Phase 3 studies have primary completion dates in the second half of next year, Boris said.
AbbVie acquired Rova-T as part of its purchase of Stemcentrx Inc. in a $5.8 billion cash-and-stock deal in 2016.