Absci Shares Plunge Following Clinical Setback and Analyst Downgrade

Absci US00091E1091

Shares of biotechnology firm Absci are experiencing significant selling pressure in today's trading session. The decline follows disappointing clinical trial results for a key drug candidate and a substantial downgrade from analysts at Morgan Stanley.

Morgan Stanley revised its rating on Absci from "Overweight" to "Equalweight," a move accompanied by a sharp reduction in its price target. The bank slashed its target from $5.80 to $4.32 per share. This reassessment contributed to a double-digit percentage intraday drop in the stock's value.

Clinical Trial Failure Triggers Strategic Shift

The immediate catalyst for the sell-off was underwhelming interim Phase 1 data for the company's ABS-101 program, targeting TL1A. Absci confirmed that the candidate's half-life failed to meet the necessary threshold to compete with next-generation TL1A treatments. Consequently, the company is halting internal development of ABS-101. Management stated it will now explore external partnerships or alternative applications for the asset.

This decision carries direct financial implications. Morgan Stanley removed ABS-101 from its valuation models, noting that previous assumptions regarding partnership revenue in the inflammatory bowel disease space are no longer viable. A central pillar of the near-term value creation strategy has been dismantled.

Financial Results Compound Concerns

Alongside the clinical setback, a substantial revenue shortfall is alarming investors. Recent financial data revealed quarterly revenue of just $380,000. This figure falls a staggering 72.86% below the consensus estimate of $1.4 million. While the reported loss per share (EPS) of -$0.20 was roughly in line with expectations, the weak top-line performance is dominating market sentiment.

• Stock Movement: The equity fell 9.1% to an intraday low of $3.55.
• Revenue Miss: $0.38 million reported versus a $1.4 million forecast.
• Price Target: Morgan Stanley's revised target stands at $4.32.

Pipeline Pivot to Dermatology

In response to the failure of ABS-101, Absci's leadership is redirecting focus toward its ABS-201 program. This AI-designed antibody is being investigated for treating androgenetic alopecia, a form of hair loss. The company has already dosed the first healthy subjects in its Phase 1/2a "HEADLINE" study.

This strategic pivot involves considerable risk. ABS-201 is only in the earliest stages of clinical testing. Absci intends to develop and commercialize the drug independently, a path that will require ongoing capital investment until initial efficacy data is expected in the second half of 2026.

The stock remains in a clear downtrend as the market recalibrates the probability of success for the remaining pipeline. Investors are now looking ahead to management's presentation at the J.P. Morgan Healthcare Conference on January 14, 2026, where further details on the revised corporate strategy are anticipated.