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>>> AbbVie's Humira Downfall Is Swift As Biosimilars Hammer Away At Sales


Investor's Business Daily

by ALLISON GATLIN

04/27/2023


https://www.investors.com/news/technology/abbvie-stock-abbvie-earnings-q1-2023/?src=A00220


AbbVie (ABBV) stock crumbled Thursday after the first approved biosimilar copycat to launch in the U.S. hammered away at Humira's legendary sales.

Though Amgen's (AMGN) biosimilar, dubbed Amjevita, launched halfway through the first quarter, global sales of immunology blockbuster Humira slumped more than 25% to $3.54 billion. Wall Street projected a steeper 30% decline, but Amjevita is only the first biosimilar to hit U.S. shelves. According to GoodRx, seven more are expected to launch in the U.S. this year.

The company, though, says Humira's decline is tracking in line with expectations.

"We are one quarter into the U.S. biosimilar event for Humira — and we are managing the erosion well," Chief Executive Rick Gonzalez said on the company's call with analysts. In the first quarter, the company saw "in-line performance from U.S. Humira, where biosimilar erosion is tracking as expected — with much of the impact driven by price."

Meanwhile, AbbVie's newer immunology drugs, Skyrizi and Rinvoq missed sales forecasts, said Lee Brown, global sector lead for health care at research firm Third Bridge. The company, on the other hand, says it still expects both drugs to contribute a combined $11 billion to sales this year.

"Growth rates in the first quarter for both products are consistent with our full-year expectations," Vice Chairman Rob Michael said on the company's call.

On today's stock market, AbbVie stock tumbled 8% to finish at 148.87. Shares were forming a saucer-with-handle base and a buy point at 168.21, according to MarketSmith.com.

Adjusted earnings tumbled north of 22% to $2.46 per share and missed expectations by a nickel. But sales beat AbbVie stock analysts' forecast at $12.23 billion, though declined 9.7% on a strict, as-reported basis.

Humira sales tumbled more than 26% in the U.S. and north of 20% abroad. The drug is AbbVie's bestseller, but has faced biosimilar competition in Europe since 2018. Humira's international sales have trended lower since then. AbbVie stock analysts now expect a similar trajectory for U.S. sales.

To contend with Humira's downfall, AbbVie has focused on next-generation immunology treatments Skyrizi and Rinvoq. During the first quarter, Skyrizi sales surged almost 45% to $1.36 billion. But the Street projected a higher $1.44 billion, Third Bridge's Brown said.

This "could prompt analysts to reconsider the sales trajectory for this important drug," he said in a note to clients.

Further, Rinvoq "appeared to post a very impressive performance" as sales popped almost 48% to $686 million, Brown said. But analysts called for a stronger $710 million in Rinvoq sales.

Standouts Include Neurology, Oncology

There were several standouts in the quarter, however, says Brown.

Botox as a treatment for migraines brought in $719 million in sales, growing north of 17%. Vraylar, a treatment for bipolar 1 disorder and depression, grew more than 31% to $561 million in sales.

Further, sales of cancer drug Venclexta climbed almost 14% to $538 million. That helped offset a 25% dive for a Johnson & Johnson (JNJ)-partnered cancer treatment called Imbruvica. AbbVie is withdrawing its accelerated approval for Imbruvica in patients with mantle cell lymphoma due to some requirements by the Food and Drug Administration in retaining the accelerated approval status.

The company raised its earnings guide for the year and now expects per-share profit of $10.72-$11.12. AbbVie stock analysts had projected adjusted profit of $11.01 a share on sales of $52.73 billion.

AbbVie stock has a strong IBD Digital Composite Rating of 95, putting it in the top 5% of all stocks in terms of fundamental and technical measures.

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