Shares of AbbVie Inc.ABBV have soared nearly 18% less than a week after the company reported outstanding results for the third quarter and upped its guidance for the full year.
The Chicago-area pharmaceutical titan had quarterly earnings of $2.83 per share, beating the Zacks consensus estimate of $2.75. Over the last four quarters, the company has topped consensus earnings estimates four times. Revenue for the quarter also surpassed estimates, coming in at nearly $14 billion. The company also boosted its guidance for the year by a few cents to between $10.47 and $10.49.
AbbVie is embracing a philosophy often used in football to describe what happens when a player gets hurt – "next man up."
In this case, the company needs its other drugs to step up and fill the gap when biosimilars start to eat away at its megablockbuster Humira's market share. Of course, Humira—the best-selling drug in the world—isn't going anywhere just yet. In the third quarter, the Crohn's disease medication achieved sales of more than $5 billion and increased revenue year over year in the U.S. while they declined internationally.
Six months after AbbVie acquired Allergan, the company likes what it's seeing from its two immunology treatments, Skyrizi and Rinvoq. On an earnings call with analysts, company management said during the third quarter the two drugs combined for $650 million in sales. This puts the duo on pace to hit more than $2 billion in sales in the year after launch. Fierce Pharma reported that AbbVie CEO Rick Gonzalez said market share for the two drugs is booming, particularly Skyrizi.
AbbVie shares have been on a hot streak ever since the company reported third-quarter results last week.
Analysts forecast combined sales of Skyrizi and Rinvoq will top out at $11 billion a year. That's far short of the $20 billion in revenue Gonzalez thinks is attainable with expanded indications for Rinvoq.
AbbVie has completed three clinical trials aimed at testing the drug's effectiveness in treating eczema, a market currently controlled by Dupixent, from Sanofi SNY and Regeneron Pharmaceuticals Inc. REGN. Gonzalez thinks Rinovoq can make good headway in a market he estimated at $3 billion and welcomed additional competition, reasoning that it would lead to more patients pursuing treatment.
SVB Leerink analyst Geoffrey Porges is less bullish about Rinovoq's prospects. He thinks concerns about blood clots could narrow the drug's use to those patients who didn't respond to any of the others.
Allergan-acquired Botoxd contributed nicely to AbbVie's results. The blockbuster recorded $916 million in sales for the quarter, while the antipsychotic Vraylar generated revenue of nearly $360 million. The latter has a chance to be a blockbuster if it can earn approval for use in major depressive disorder.
Disclosure: The author has a position in AbbVie and Sanofi.
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