Biotech Values

[DewDiligence]

Re: ABT vs ABBV

ABBV has the HCV assets. You expect them to be first to market in oral GT1. Do you feel ABBV's reign at the top will be short lived?

It’s not that I’m bearish on ABBV, but rather that the new ABT (without ABBV) is more of a thematic play on The Global Demographic Tailwind. Assuming that the valuation is not out of line*, the new ABT is a must-own stock, IMO, for the reasons described in #msg-75216470, #msg-74567343, #msg-68255872, #msg-61699995, #msg-61960541, #msg-62037218, and #msg-50473238.

I’m bullish on ABBV too, but not to the same extent as the new ABT. Despite the excellent prospects in HCV (#msg-81414058), ABBV will initially derive more than half of its profits from a single drug—Humira—that goes off-patent in a few years. Thus, ABBV should be viewed as a relatively high-risk holding for a mature pharma company.

*When the when issued shares begin trading Monday, I expect that ABT.WI will comprise 55-60% of the combined valuation of the existing Abbott and that ABBV.WI will comprise 40-45% of the combined valuation.