GMAB - AbbVie: The Inevitable Is Happening

2024-04-29 15:08:53 ET

Summary

• AbbVie Inc.'s shares dropped last week due to concerns about the erosion of Humira and despite the company beating revenue and EPS expectations.
• Humira's global sales fell 36% YoY, but AbbVie's other growth products performed well, leading to overall revenue growth after four consecutive down quarters.
• AbbVie's long-term growth prospects have improved due to the better-than-expected performance of several key products, the recent acquisition of ImmunoGen and the expected acquisition of Cerevel Therapeutics.
• In today's article, I analyze the recent developments and AbbVie's growth prospects and upside potential in the following years.

Shares of AbbVie Inc. ( ABBV ) closed nearly 5% lower after the first quarter earnings announcement last week, despite the company beating revenue and EPS expectations. Apparently, investors are worried about the erosion of Humira and the most recent move by Cigna which will offer a biosimilar version of Humira with no out-of-pocket cost to patients and a deep 85% discount to the branded version AbbVie is still selling. AbbVie has done a great job managing Humira’s loss of exclusivity, but in reality, the company was just delaying the inevitable and I would not be worried about Humira going forward given its ever-declining relevance, the strong performance of growth products, the recent acquisitions, the expected pipeline progress, and the company returning to top-line growth this year....

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