Today, investors in pharmaceutical giant AbbVie (NYSE:ABBV) are seeing a lot of red. Shares of ABBV stock are currently down approximately 7.5% at the time of writing on heavy volume.
These sorts of violent swings have become more commonplace in the Big Pharma space of late. However, most of the recent volatility has been to the upside, as investors seek growth stocks with better valuations. Indeed, AbbVie’s drug pipeline remains one of the strongest in this sector.
Accordingly, world-class investors like Warren Buffett have jumped aboard ABBV stock over the years. Despite trimming his holdings in recent quarters, the Oracle of Omaha appears to still be a big believer in the value associated with AbbVie’s portfolio.
That said, news has arisen today around one of AbbVie’s key arthritis drugs that has provided investors with a significant setback. Let’s dive into what’s going on with this pharma giant today.
FDA Labeling Requirements Pin Down ABBV Stock
Today, investors seem to be increasingly bearish on one of AbbVie’s core arthritis drugs. Why? The FDA has required AbbVie to include additional labeling requirements for its Rinvoq drug. Its Rinvoq drug will now be required to disclose a warning that it carries an increased risk of blood clots and death. This warning is on top of the harshest warning labels that this immune therapy already displays.
Reportedly, these warnings come after test results of a related drug from pharma giant Pfizer (NYSE:PFE) showed increased risks of blood clots and death. Accordingly, the FDA requirements for Rinvoq are understandable.
While the FDA may be erring on the side of caution for now, ABBV stock is currently feeling the heat. Investors were banking on Rinvoq revenues to largely replace those lost by Humira. Humira is the latest drug to fall off the patent cliff for AbbVie, a concern for many long-term investors.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.