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.

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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