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AbbVie's Humira and Imbruvica Drive Performance in 2016
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North Chicago, IL-based AbbVie Inc. (ABBV - Free Report) came into existence on Jan 1, 2013, after Abbott Laboratories (ABT - Free Report) divested its pharmaceutical division. AbbVie has a presence in the rheumatoid arthritis, cancer, psoriasis, Crohn’s disease, HIV, hepatitis C virus (HCV), testosterone, thyroid disease, Parkinson’s disease, ulcerative colitis, and chronic kidney disease markets.
The biopharmaceutical company’s share price is up 5.9% so far this year - a year fraught with challenges for the pharma/biotech sector, as it faced immense flak for steep drug prices. This compares favorably with the 6.1% fall for the Zacks categorized Large-Cap Pharma industry.
Let us analyse the reasons for the same.
Strong Earnings Performance: AbbVie delivered positive earnings surprises in two of the three quarters of 2016, reported so far this year.
AbbVie’s next year’s EPS growth rate is 13.1%, while for the long term (3-5 years), its EPS growth rate is 14.54%. Next year, sales growth is expected to be 10%.
Humira Doing Well: AbbVie’s flagship product Humira is approved for several indications like rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis, axial spondyloarthritis, pediatric Crohn’s disease and chronic plaque psoriasis. Humira has been performing well and sales should be continue to be driven by growing awareness, favorable clinical data, additional indications and expansion into new markets. The company expects Humira to bring in total sales of more than $18 billion in 2020.
Imbruvica, a Key Driver: Cancer drug, Imbruvica was added to AbbVie’s pipeline with the May 2015 acquisition of Pharmacyclics. AbbVie expects Imbruvica peak sales of more than $7 billion and revenues of about $5 billion in 2020. Imbruvica, currently approved for quite a few indications, has multi-billion dollar potential and AbbVie is exploring the potential to expand Imbruvica’s label into solid tumors and autoimmune diseases.
Collaborations and Agreements to Strengthen Pipeline: AbbVie has been actively pursuing partnership deals and collaborations for candidates across several therapeutic areas including oncology, immunology, neuroscience, and infectious diseases. Some partners include Roche (Venclexta – oncology), Biogen Inc. (BIIB - Free Report) (Zinbryta – multiple sclerosis), Bristol-Myers Squibb Company (BMY - Free Report) (Empliciti – multiple myeloma), Ablynx (vobarilizumab – inflammatory diseases including rheumatoid arthritis and systemic lupus erythematosus) and Boehringer Ingelheim (risankizumab – immunology) among others.
Efforts to Strengthen Presence in Oncology and HCV: AbbVie continues to work on expanding and accelerating its presence in oncology, building upon its growing position in hematological oncology. The company acquired cancer drug maker Stemcentrx and gained a late-stage candidate, rovalpituzumab tesirine or Rova-T, which is currently in registrational studies for small cell lung cancer (SCLC). According to AbbVie, the candidate has blockbuster potential and could be launched in 2018. AbbVie intends to study the candidate for additional indications and estimates peak sales close to $5 billion.
AbbVie is also studying marketed oncology drug Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory CLL patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies.
We are also positive on the company’s progress with the development of interferon-free treatments for HCV.
Conclusion
Viekira faces intense pricing pressure and competition in the HCV market. Moreover, quite a few companies are working on bringing Humira biosimilars to the market. Yet, we believe AbbVie’s deep pipeline and strong financial position will continue to help the company navigate tough times.
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AbbVie's Humira and Imbruvica Drive Performance in 2016
North Chicago, IL-based AbbVie Inc. (ABBV - Free Report) came into existence on Jan 1, 2013, after Abbott Laboratories (ABT - Free Report) divested its pharmaceutical division. AbbVie has a presence in the rheumatoid arthritis, cancer, psoriasis, Crohn’s disease, HIV, hepatitis C virus (HCV), testosterone, thyroid disease, Parkinson’s disease, ulcerative colitis, and chronic kidney disease markets.
The biopharmaceutical company’s share price is up 5.9% so far this year - a year fraught with challenges for the pharma/biotech sector, as it faced immense flak for steep drug prices. This compares favorably with the 6.1% fall for the Zacks categorized Large-Cap Pharma industry.
Let us analyse the reasons for the same.
Strong Earnings Performance: AbbVie delivered positive earnings surprises in two of the three quarters of 2016, reported so far this year.
AbbVie’s next year’s EPS growth rate is 13.1%, while for the long term (3-5 years), its EPS growth rate is 14.54%. Next year, sales growth is expected to be 10%.
Humira Doing Well: AbbVie’s flagship product Humira is approved for several indications like rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis, axial spondyloarthritis, pediatric Crohn’s disease and chronic plaque psoriasis. Humira has been performing well and sales should be continue to be driven by growing awareness, favorable clinical data, additional indications and expansion into new markets. The company expects Humira to bring in total sales of more than $18 billion in 2020.
Imbruvica, a Key Driver: Cancer drug, Imbruvica was added to AbbVie’s pipeline with the May 2015 acquisition of Pharmacyclics. AbbVie expects Imbruvica peak sales of more than $7 billion and revenues of about $5 billion in 2020. Imbruvica, currently approved for quite a few indications, has multi-billion dollar potential and AbbVie is exploring the potential to expand Imbruvica’s label into solid tumors and autoimmune diseases.
Collaborations and Agreements to Strengthen Pipeline: AbbVie has been actively pursuing partnership deals and collaborations for candidates across several therapeutic areas including oncology, immunology, neuroscience, and infectious diseases. Some partners include Roche (Venclexta – oncology), Biogen Inc. (BIIB - Free Report) (Zinbryta – multiple sclerosis), Bristol-Myers Squibb Company (BMY - Free Report) (Empliciti – multiple myeloma), Ablynx (vobarilizumab – inflammatory diseases including rheumatoid arthritis and systemic lupus erythematosus) and Boehringer Ingelheim (risankizumab – immunology) among others.
Efforts to Strengthen Presence in Oncology and HCV: AbbVie continues to work on expanding and accelerating its presence in oncology, building upon its growing position in hematological oncology. The company acquired cancer drug maker Stemcentrx and gained a late-stage candidate, rovalpituzumab tesirine or Rova-T, which is currently in registrational studies for small cell lung cancer (SCLC). According to AbbVie, the candidate has blockbuster potential and could be launched in 2018. AbbVie intends to study the candidate for additional indications and estimates peak sales close to $5 billion.
AbbVie is also studying marketed oncology drug Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory CLL patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies.
We are also positive on the company’s progress with the development of interferon-free treatments for HCV.
Conclusion
Viekira faces intense pricing pressure and competition in the HCV market. Moreover, quite a few companies are working on bringing Humira biosimilars to the market. Yet, we believe AbbVie’s deep pipeline and strong financial position will continue to help the company navigate tough times.
AbbVie carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>