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AbbVie (ABBV) Outperforms Industry This Year So Far: Here's Why

·4-min read

AbbVie ABBV stock has risen 4.4% this year so far compared with an increase of 0.5% for the industry.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research


AbbVie has become one of the top-most pharma companies after it acquired Botox maker Allergan in a cash-and-stock deal for $63 billion in May 2020. The deal has transformed AbbVie’s portfolio by lowering its dependence on Humira, its flagship product, which has already lost patent protection in Europe and is due to face biosimilar competition in the United States in 2023. AbbVie has one of the most popular cancer drugs in its portfolio, Imbruvica, which it markets in partnership with J&J JNJ. Its newest immunology drugs Skyrizi (risankizumab) and Rinvoq (upadacitinib) position it well for long-term growth.

Humira continues to witness strong demand trends in the United States despite new mechanisms of action and competition from indirect biosimilars. Currently approved for several indications, Humira sales have increased consistently, backed by robust demand trends.

Among AbbVie’s other immunology medicines, Skyrizi and Rinvoq are going strong, bolstered by approval in new indications. The drugs generated sales of $2.19 billion and $1.06 billion in the first half of 2022, rising 77.9% and 59.2%, respectively, year over year.  Both Skyrizi and Rinvoq were approved for active psoriatic arthritis in 2021/early 2022. Rinvoq was approved for atopic dermatitis, ulcerative colitis and ankylosing spondylitis and Skyrizi for Crohn’s disease in the first half of 2022. With approvals for such new indications, sales of these drugs could be higher in 2023/2024 and have the potential to replace Humira when generics are launched in the United States in 2023.

In fact, on the second-quarter conference call, AbbVie raised the full-year guidance for Skyrizi, following a strong sales performance in the first half of 2022. Skyrizi and Rinvoq are expected to generate combined sales of $7.5 billion in 2022 and more than $15 billion by 2025

Meanwhile, new migraine drugs, Ubrelvy and Qulipta, represent a $1 billion-plus peak sales opportunity each.

In its oncology franchise, the strong growth of Venclexta sales is making up for lower U.S. sales of J&J-partnered Imbruvica. U.S. sales of AbbVie/J&J’s Imbruvica are being hurt by lower new patient starts in CLL due to delayed recovery from the pandemic and increasing competition from newer therapies.

AbbVie markets Venclexta/Venclyxto in partnership with Roche RHHBY. AbbVie and Roche jointly commercialize Venclexta in the United States while AbbVie markets it outside the country.

Strong share performance across all approved indications is boosting sales of Venclexta/Venclyxto. AbbVie expects to file a regulatory application seeking approval of Venclexta in relapsed/refractory multiple myeloma in 2023 and in myelodysplastic syndrome or MDS in 2024.

Robust demand for Botox Cosmetic and Juvederm is boosting sales of AbbVie’s aesthetics franchise. Though Juvederm’s sales declined 15.7% in the second quarter due to the impact of COVID in China as well as the suspension of AbbVie’s aesthetics business operations in Russia, a key market for fillers, AbbVie expects sales to improve in the second half, gaining from lessening COVID impact and two new filler launches in the United States

AbbVie also has an impressive late-stage pipeline with several early/mid-stage candidates that have blockbuster potential. Several data readouts are expected in 2022, which could be catalysts for the stock.

Zacks Rank & Stock to Consider

AbbVie currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the biotech sector is Alkermes ALKS which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alkermes’ estimates for 2022 have narrowed from a loss of 16 cents to earnings of 20 cents over the past 30 days. Earnings estimates for 2023 have gone up from 32 cents to 50 cents over the same time frame. Shares of Alkermes have risen 10.1% this year so far.

Earnings of Alkermes beat estimates in all the last four quarters, delivering a surprise of 325.48%, on average.

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