How Is AbbVie Positioned in June?



Humira woes

AbbVie (ABBV) stock has suffered this year due to concerns about the generic erosion of its flagship immunology drug, Humira. In the first quarter, Humira reported revenue of $4.45 billion, a YoY (year-over-year) rise of 3.8% on an operational basis and a rise of 5.6% on a reported basis.

According to AbbVie’s first-quarter earnings conference call, the US contributed ~$3.21 billion of its revenue in the quarter, a YoY rise of 7% driven by robust demand and wholesaler inventory levels, while ex-US markets contributed the remaining $1.23 billion of its revenue, a YoY fall of 23% due to increasing biosimilar competition. Humira accounted for 56.80% of the company’s total revenue. Despite the headwinds, the company reported revenue of $7.83 billion in the first quarter, a YoY fall of 1.34% but $17.26 million higher than the consensus estimate.

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On its first-quarter earnings conference call, AbbVie guided for a 7% YoY rise in Humira sales in the US market and $1.0 billion worth of international market sales for the drug at April currency rates for 2019. The company expects Humira to lose $5.0 billion worth of sales in international markets due to the patent expiry of the drug.

Guidance and projections

AbbVie has guided for YoY operational revenue growth of 1% and a YoY negative revenue impact attributable to foreign exchange movements of 1% for 2019. The company has also increased its 2019 adjusted diluted EPS guidance from $8.65–$8.75 to $8.73–$8.83. This new guidance represents a YoY rise of 11% at the midpoint.

Wall Street analysts expect AbbVie’s revenues to be $32.80 billion, $34.73 billion, and $37.06 billion, respectively, in 2019, 2020, and 2021. Analysts also expect the company’s non-generally accepted accounting principles EPS to be $8.78, $9.46, and $10.36, respectively, in 2019, 2020, and 2021.


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