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Maverick Capital Eliminates Its Position in AbbVie

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Maverick Capital and AbbVie

Maverick Capital sold its position in global pharmaceutical company AbbVie (ABBV) during the fourth quarter of 2014. The company accounted for 3.99% of the fund’s portfolio, which held 4,723,578 shares of AbbVie.

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AbbVie reports loss on termination of Shire deal

In the fourth quarter of 2014, AbbVie’s revenue grew 8.9% operationally to $5.45 billion. Including foreign exchange impact, its sales were up by 5.1% on a reported basis. This growth was primarily driven by the arthritis drug Humira. On a reported basis, Humira sales were up 10.6% to $3.4 billion. AbbVie’s sales growth was also driven by operational growth from key products Synagis, Creon, and Duodopa.

AbbVie reported a net loss of $810 million, or $0.51 per diluted share, which includes a breakup fee for terminating a merger deal with Shire (SHPG). In October 2014, ABBV abandoned the $54 billion Shire deal, which would have been a significant tax inversion for AbbVie. This merger was terminated after the US government introduced a new tax rule to discourage corporate mergers. The company’s adjusted earnings per share (or EPS) were $0.89.

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Humira drives 2014 growth

AbbVie’s 2014 global sales grew 7% to $19.96 billion, and the company’s EPS grew 6% to $1.10. This growth was primarily driven by Humira, which recorded 19% operational growth. Other key products—Synthroid, Synagis, CREON, and Duodopa—also reported good growth during 2014.

ABBV shares fall after Viekira’s disappointing forecast

AbbVie’s 2015 adjusted EPS is expected to grow by 34% to $4.25–$4.45. The company expects its new hepatitis C oral treatment Viekira Pak to achieve revenues of $3 billion in 2015. AbbVie expects competition and additional price pressure for Viekira as Merck & Co. (MRK) expects to launch a rival treatment in 2016.

ABBV shares fell 3.6% on the day of its earnings release.

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Value to shareholders

On February 19, ABBV increased its quarterly dividend by 4% to $0.51 per share. Since the company’s inception in 2013, AbbVie has increased its dividend by 28%. You can invest in ABBV by investing in the Health Care Select Sector SPDR Fund (XLV). ABBV accounts for 3.43% of XLV.

Overview of AbbVie

AbbVie (ABBV) is a global biopharmaceutical research and development company that was formed in 2013 after it separated from Abbott Laboratories (ABT). AbbVie develops and markets advanced therapies that address some of the world’s most complex and serious diseases. The company markets medicines in more than 170 countries.

In the next part of this series, we’ll discuss Maverick Capital’s position change in Twenty-First Century Fox (FOXA).

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