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AbbVie (ABBV) Outperforms Industry Year to Date: Here's Why
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Rapid development and regulatory approvals of some medicines and vaccines, especially for COVID-19, put the drug/biotech sector on track after soft third-quarter results and cautious outlook for the rest of the year. A key company in the Zacks Large Cap Pharmaceuticals industry, AbbVie (ABBV - Free Report) has outperformed the industry this year so far.
AbbVie’s stock has risen 16.6% this year so far compared with an increase of 1% for the industry
Here we discuss some aspects driving AbbVie’s stock this year so far.
AbbVie’s acquisition of Allergan in May 2020 significantly expanded and diversified its revenue base with new therapeutic areas, enhancing its long-term growth potential. The acquisition strengthened AbbVie’s existing leadership position in immunology and hematological oncology while providing additional growth franchises in aesthetics and neuroscience.
AbbVie’s rationale behind the Allergan deal was to add a new blockbuster product to its portfolio, Allergan’s Botox, ahead of generic competition for its key immunology drug, Humira. Humira generics are already denting revenues in Europe and are expected to be launched in the United States in 2023. AbbVie is heavily dependent on Humira and is looking to diversify its portfolio. Approved for therapeutic and aesthetic use, Botox is a key top-line driver for Allergan and looks fit to be the next revenue driver for AbbVie after Humira loses exclusivity.
AbbVie had a rather fruitful year as far as striking collaboration deals and pipeline development are concerned.
Importantly, its two new immunology drugs, Skyrizi and Rinvoq, were approved in 2019. Skyrizi and Rinvoq are performing beyond management expectations and AbbVie expects combined revenues of these two drugs to be approximately $2.2 billion in 2020. With many new indications coming in the next couple of years, sales of these drugs could be higher and have the potential to replace Humira when generics are launched in 2023.
AbbVie gained FDA approval for another new drug — Oriahnn/elagolix — in 2020 for reducing heavy menstrual bleeding (HMB) in premenopausal women with uterine fibroids. It also gained FDA approval for Imbruvica in combination with Roche’s (RHHBY - Free Report) Rituxan for first-line chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL) and EU approval for Venclyxto and Roche’s Gazyva for first-line CLL this year.
It announced successful data from late-stage studies on migraine prevention candidate, atogepant, several studies on Rinvoq in atopic dermatitis, head-to-head plaque psoriasis study on Skyrizi versus Novartis’ (NVS - Free Report) Cosentyx, among others.
Important collaboration deals included AbbVie’s oncology deals with Genmab (GMAB - Free Report) for joint development and commercialization of Genmab's three early-stage investigational bispecific antibody therapeutics and I-Mab Biopharma for development and commercialization of lemzoparlimab for multiple cancers.
Conclusion
AbbVie has its share of headwinds in the form of sales erosion due to direct biosimilar competition to Humira in international markets and declining sales of HCV medicine, Mavyret. Nonetheless, strong demand trends for Humira in the United States, a strong portfolio of new drugs and continued strong sales performance of Imbruvica and Venclexta keep the stock afloat.
Its earnings estimates have risen by 0.6% for 2021 over the past 60 days.
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AbbVie (ABBV) Outperforms Industry Year to Date: Here's Why
Rapid development and regulatory approvals of some medicines and vaccines, especially for COVID-19, put the drug/biotech sector on track after soft third-quarter results and cautious outlook for the rest of the year. A key company in the Zacks Large Cap Pharmaceuticals industry, AbbVie (ABBV - Free Report) has outperformed the industry this year so far.
AbbVie’s stock has risen 16.6% this year so far compared with an increase of 1% for the industry
Here we discuss some aspects driving AbbVie’s stock this year so far.
AbbVie’s acquisition of Allergan in May 2020 significantly expanded and diversified its revenue base with new therapeutic areas, enhancing its long-term growth potential. The acquisition strengthened AbbVie’s existing leadership position in immunology and hematological oncology while providing additional growth franchises in aesthetics and neuroscience.
AbbVie’s rationale behind the Allergan deal was to add a new blockbuster product to its portfolio, Allergan’s Botox, ahead of generic competition for its key immunology drug, Humira. Humira generics are already denting revenues in Europe and are expected to be launched in the United States in 2023. AbbVie is heavily dependent on Humira and is looking to diversify its portfolio. Approved for therapeutic and aesthetic use, Botox is a key top-line driver for Allergan and looks fit to be the next revenue driver for AbbVie after Humira loses exclusivity.
AbbVie had a rather fruitful year as far as striking collaboration deals and pipeline development are concerned.
Importantly, its two new immunology drugs, Skyrizi and Rinvoq, were approved in 2019. Skyrizi and Rinvoq are performing beyond management expectations and AbbVie expects combined revenues of these two drugs to be approximately $2.2 billion in 2020. With many new indications coming in the next couple of years, sales of these drugs could be higher and have the potential to replace Humira when generics are launched in 2023.
AbbVie gained FDA approval for another new drug — Oriahnn/elagolix — in 2020 for reducing heavy menstrual bleeding (HMB) in premenopausal women with uterine fibroids. It also gained FDA approval for Imbruvica in combination with Roche’s (RHHBY - Free Report) Rituxan for first-line chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL) and EU approval for Venclyxto and Roche’s Gazyva for first-line CLL this year.
It announced successful data from late-stage studies on migraine prevention candidate, atogepant, several studies on Rinvoq in atopic dermatitis, head-to-head plaque psoriasis study on Skyrizi versus Novartis’ (NVS - Free Report) Cosentyx, among others.
Important collaboration deals included AbbVie’s oncology deals with Genmab (GMAB - Free Report) for joint development and commercialization of Genmab's three early-stage investigational bispecific antibody therapeutics and I-Mab Biopharma for development and commercialization of lemzoparlimab for multiple cancers.
Conclusion
AbbVie has its share of headwinds in the form of sales erosion due to direct biosimilar competition to Humira in international markets and declining sales of HCV medicine, Mavyret. Nonetheless, strong demand trends for Humira in the United States, a strong portfolio of new drugs and continued strong sales performance of Imbruvica and Venclexta keep the stock afloat.
AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its earnings estimates have risen by 0.6% for 2021 over the past 60 days.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>