Top 3 reasons analysts questioning AbbVie's future performance

July 24, 2015

AbbVie on July 24 reported weaker-than-expected revenue for its most recent quarter, which some analysts say is due to increased competition for its anti-inflammatory drug, Humira.

On July 24, AbbVie reported weaker-than-expected revenue for its most recent quarter, which some analysts say is due to increased competition for its anti-inflammatory drug, Humira.

Here are the top 3 reasons analysts and investors are concerned about AbbVie:

  • AbbVie’s revenue grew 11% to $5.48 billion, which was lower than forecast. Analysts expected a revenue of $5.62 billion or $1.06 per share. However, the company’s profits soared to $1.37 billion, or 83 cents a share, up from $1.1 billion, or 68 cents a share, for the same quarter last year.

  • Investors are concerned that AbbVie won’t be able to sustain strong sales growth of Humira, which accounts for more than 60% of its revenue, after certain patents for the drug begin to expire in late 2016. Several other pharmaceutical manufacturers, including Amgen, are developing their rivals to Humira. Amgen plans to begin selling its drug in 2017.

  • FDA has approved a copy of a biotechnology drug using its new abbreviated criteria, which could result in lower-cost biosimilars to compete with Humira. However, AbbVie’s sales of Humira grew 18% in the quarter, even with competition from a biosimilar in India, Abbvie CFO Bill Chase told shareholders on a conference call.

Despite analysts’ concerns, AbbVie executives have said the company will defend Humira by wielding “hundreds of patents” globally that cover manufacturing processes and methods of use, according to The Wall Street Journal.

Related:AbbVie hopes to advance HCV treatment for genotype 4

In addition, AbbVie is diversifying, to reduce its dependence on Humira. Its hepatitis C regimen, Viekira Pak, generated $385 million in sales in the latest quarter. In May, the company purchased Pharmacyclics and bought the rights to the blood-cancer drug Imbruvica, which produced $234 million in sales in the quarter.