AbbVie Inc

We selectively increased exposure to healthcare, including initiating a position in AbbVie. Healthcare has been a notable laggard relative to the broader market in recent years despite many companies continuing to generate resilient cash flows, maintain strong balance sheets and return meaningful capital to shareholders. In an environment where valuations have become increasingly concentrated in a narrow segment of the market, we continue to find bottom-up opportunities among high-quality healthcare businesses capable of sustaining attractive and growing shareholder distributions.

AbbVie Inc. is strategically enhancing its portfolio through the acquisition of Apogee Therapeutics, which was announced at a significant premium, indicating strong confidence in future growth. The acquisition aligns with AbbVie's strategy to bolster its pipeline and replace lost sales from expiring patents. The manager believes that this M&A activity is essential for large pharmaceutical companies like AbbVie to sustain growth and maintain competitive advantages in the market. The overall trends within health care are improving, further supporting AbbVie's growth potential.

AbbVie was the Fund’s top performer over the quarter, gaining +25.8% (in USD). The American pharmaceutical company posted solid results as growth in recently launched drugs Skyrizi and Rinvoq (now accounting for 42% of sales) surpassed consensus expectations along with three of the company’s four key business segments. The strong momentum in Skyrizi and Rinvoq offset Humira’s expected declines, highlighting the strength of AbbVie’s broad drug portfolio and prompting management to raise guidance for the full year. Encouragingly, both Skyrizi and Rinvoq continue to see market share gains across dermatology and inflammatory bowel disease indications and since patent protection is running through 2033, AbbVie is well positioned to dull the impact of its next big patent cliff.

AbbVie was the Fund’s top performer over the quarter, gaining +25.8% (in USD). The American pharmaceutical company posted solid results as growth in recently launched drugs Skyrizi and Rinvoq (now accounting for 42% of sales) surpassed consensus expectations along with three of the company’s four key business segments. The strong momentum in Skyrizi and Rinvoq offset Humira’s expected declines, highlighting the strength of AbbVie’s broad drug portfolio and prompting management to raise guidance for the full year. Encouragingly, both Skyrizi and Rinvoq continue to see market share gains across dermatology and inflammatory bowel disease indications and since patent protection is running through 2033, AbbVie is well positioned to dull the impact of its next big patent cliff.

We bought shares of AbbVie Inc., a large biopharmaceutical company with a product portfolio across immunology, oncology, aesthetics, neurosciences, and eye care. Two key growth drivers are Skyrizi, a biologic therapy for plaque psoriasis, psoriatic arthritis, Crohn’s disease, and Ulcerative colitis; and Rinvoq, an oral, once daily treatment for multiple inflammatory diseases. After having recently settled litigation with generic manufacturers regarding the generic entry for Rinvoq which pushed out the expected date of competition to 2037, AbbVie has no major patent expirations until the mid-2030s. We expect AbbVie to generate high single-digit top-line growth and low double-digit bottom-line growth for many years.

AbbVie has been a long-term holding in the fund, and we maintained the position on the belief it continued to offer healthy fundamentals and a compelling valuation. The pharmaceutical stock AbbVie accounted for a large portion of our performance advantage, indicating its strong contribution to the fund's overall success.

AbbVie faced challenges in Q2, including a decline in Humira sales and sluggish growth in the Aesthetics segment. However, the Immunology franchise is performing strongly, with Skyrizi and Rinvoq now accounting for approximately 40% of total revenues. This robust growth prompted management to raise full-year earnings guidance, indicating commercial momentum and increased visibility into the durability of these assets. The company also benefits from a strong pipeline and a proven ability to scale new therapies, positioning it well to navigate current industry headwinds.

AbbVie faced challenges in Q2, including a decline in Humira sales and sluggish growth in the Aesthetics segment. However, the Immunology franchise is performing strongly, with Skyrizi and Rinvoq now accounting for approximately 40% of total revenues. This robust growth prompted management to raise full-year earnings guidance, indicating commercial momentum and increased visibility into the durability of these assets. The company benefits from a strong pipeline and a proven ability to scale new therapies, positioning it well to navigate current industry headwinds.

AbbVie (ABBV) was a strong positive contributor to performance during the first quarter of 2025. The stock benefited from a confluence of company-specific and macro drivers, including robust fourth-quarter results reported in February and renewed investor interest in the pharmaceutical sector broadly. AbbVie’s fourth quarter earnings exceeded expectations on both revenue and EPS, driven by continued growth in its immunology and neuroscience franchises, alongside stabilizing trends in Humira sales post loss of patent exclusivity. Importantly, during the first quarter AbbVie announced a large licensing deal with Gubra, which gives AbbVie co-development and co-commercialization rights on their lead clinical-stage obesity drug. This asset provides optionality in one of the most attractive therapeutic areas in biopharma today and underscores management’s willingness to reposition the company for long-term growth beyond its core inflammation franchise.

AbbVie (ABBV) was a strong positive contributor to performance during the first quarter of 2025. The stock benefited from a confluence of company-specific and macro drivers, including robust fourth-quarter results reported in February and renewed investor interest in the pharmaceutical sector broadly. AbbVie’s fourth quarter earnings exceeded expectations on both revenue and EPS, driven by continued growth in its immunology and neuroscience franchises, alongside stabilizing trends in Humira sales post loss of patent exclusivity. Importantly, during the first quarter AbbVie announced a large licensing deal with Gubra, which gives AbbVie co-development and co-commercialization rights on their lead clinical-stage obesity drug. This asset provides optionality in one of the most attractive therapeutic areas in biopharma today and underscores management’s willingness to reposition the company for long-term growth beyond its core inflammation franchise.