AbbVie Inc. ABBV, -4.71% shares dropped 5.5% in heavy Thursday morning trade after short seller Citron Research described the company as “the next great drug short” in a tweet and said it planned to release reports about the company.
The Citron tweet came the day after Food and Drug Administration Commissioner Scott Gottlieb put out a plan to encourage the development and uptake of lower-priced biosimilar drugs, accusing large drugmakers in a speech of stymying the competition.
Those remarks, along with a proposed policy that could endanger drug rebates — a widespread, longtime feature of the U.S. pharmaceutical pricing system — are “a DIRECT hit on Abbvie’s abuse of Humira,” Citron said in the tweet, referring to the company’s anti-inflammatory therapy.
Humira is the world’s top-selling drug and, as a result, has been a top target for biosimilar copycats. The short seller also predicted that AbbVie shares, which closed at $94.40 on Wednesday, would drop to $60. On Wednesday, Gottlieb spoke of pharmaceutical companies that dangle “big rebates to lock up payers in multiyear contracts right on the eve of biosimilar entry.”
Notably, though, other companies have also been accused of levying contractual negotiations to prevent the uptake of biosimilars, including Johnson & Johnson JNJ, -1.46% to protect its rheumatoid arthritis therapy Remicade (according to a lawsuit filed against it by Pfizer Inc. PFE, -0.80% ).
Many pharmaceutical companies’ shares declined in Thursday morning trade, and the SPDR S&P Pharmaceuticals ETF XPH, +0.00% slumped 1%. AbbVie shares have dropped 4.1% over the last three months, compared with a 4.1% rise in the S&P 500 SPX, -0.40% and a 2.2% rise in the Dow Jones Industrial Average DJIA, -0.53%
