AbbVie, the pharmaceutical giant known for its blockbuster drug Humira, is facing scrutiny from analysts as it approaches its upcoming earnings report. The company, which was spun off from Abbott Laboratories in 2013, has seen its stock price rise nearly 22% year-to-date and 26.4% from a year ago, despite facing challenges in its flagship product.
Humira, once the world’s best-selling drug, has been experiencing a decline in sales due to competition from lower-cost biosimilars. In the second quarter, Humira sales totaled $2.8 billion, a significant drop of almost 30% compared to the same period last year. This decline has been further exacerbated by decisions from major health insurers to remove Humira from their preferred drug lists.
UnitedHealth Group recently announced that it would exclude Humira from some of its reimbursement lists starting January 1, recommending less expensive biosimilar alternatives instead. Similarly, Cigna plans to remove Humira from certain lists in 2025, following a comparable move by CVS Health’s Caremark unit earlier this year.
Despite these challenges, AbbVie’s CEO Robert Michael remains optimistic. During the company’s second-quarter earnings call, he stated that AbbVie’s growth platform, excluding Humira, which accounts for over 80% of total sales, is expected to outperform initial full-year sales guidance by more than $1 billion. This growth is primarily driven by strong performance in immunology and oncology sectors.
In a recent development, AbbVie received FDA approval for Vyalev, a 24-hour infusion treatment for advanced Parkinson’s disease. This approval marks a significant step in addressing the needs of approximately 500,000 Americans diagnosed with Parkinson’s, although the actual number of affected individuals could be much higher.
AbbVie has also been expanding its portfolio through strategic acquisitions. In August, the company completed its purchase of Cerevel Therapeutics, which specializes in developing therapies for
neurological and psychiatric disorders. One of Cerevel’s key products is Emraclidine, a treatment for schizophrenia and Alzheimer’s disease psychosis.
As AbbVie prepares to report its quarterly results on October 30, analysts are adjusting their price targets for the company’s stock. Bank of America Securities raised its target to $195 from $185, maintaining a neutral rating. The investment firm cited the upcoming data readout for AbbVie-Cerevel’s Emraclidine as a key factor in its decision.
BMO Capital also increased its price target to $220 from $214, reaffirming an outperform rating. The firm highlighted the strong performance of AbbVie’s immunology drugs Skyrizi and Rinvoq, which saw sales growth of 45% and 56% respectively in the second quarter.
Bernstein analyst Courtney Breen initiated coverage of AbbVie with a market perform rating and a $203 price target. Breen noted that while the outlook for the biopharma industry is generally positive, investment outcomes will likely be tied to specific company
opportunities rather than sector-wide trends.
As AbbVie navigates the challenges posed by Humira’s declining sales, the company’s success will largely depend on its ability to leverage its diverse portfolio and bring new, innovative treatments to market. The upcoming earnings report will provide crucial insights into AbbVie’s strategy for maintaining growth and profitability in an increasingly competitive pharmaceutical landscape.