AbbVie’s New Immunology Drugs Offset Humira’s Decline, Stock Up 4%
AbbVie Inc. (ABBV) saw its stock rise by 4% early Friday following its impressive fourth-quarter earnings report and a positive outlook for 2025. The North Chicago-based pharmaceutical giant managed to offset the decline in sales of its blockbuster drug, Humira, through the growth of its newer immunology drugs, primarily Skyrizi and Rinvoq.
Strong Earnings Performance
Despite facing challenges, AbbVie reported earnings of $2.16 per share, surpassing the $2.12 consensus estimate from FactSet. This marks a significant improvement from the previous year’s earnings of 46 cents per share, although it recorded a loss of 2 cents per share attributed to an impairment charge related to its schizophrenia and Alzheimer’s disease drug. The company’s revenue for the quarter was $15.102 billion, up from $14.301 billion a year ago, again exceeding the FactSet expectation of $14.832 billion.
Humira’s Decline
AbbVie’s towering revenue from Humira has experienced a steep decline of 49.1%, generating $1.682 billion in the fourth quarter compared to $3.308 billion in the same period last year. This decline is largely due to the availability of biosimilars competing with Humira since its loss of exclusivity in 2023. Notably, U.S. Humira revenue fell by 54.5% to $1.246 billion, while international sales decreased by 22.7% to $436 million. This substantial revenue drop underscores the urgent need for AbbVie to bolster its immunology portfolio with new offerings.
Emerging Immunology Drugs: Skyrizi and Rinvoq
AbbVie’s pivot to newer immunology treatments appears to be a successful strategy. Global revenue from Skyrizi soared by 57.7% to $3.778 billion, beating consensus estimates. Similarly, sales from Rinvoq grew by 42.6% to $1.834 billion. This growth reflects not only new patient acquisitions but also the expanding indications for these therapies.
Collectively, AbbVie estimates that these two drugs will surpass $31 billion in combined revenue through 2027. The company is also optimistic about sustaining high single-digit compound annual revenue growth until 2029, driven by strong performance across its immunology and oncology segments, which recorded 4.9% and 12% revenue jumps, respectively. The global net revenue from the neuroscience portfolio also contributed positively, increasing by 19.8% to $2.509 billion.
Financial Outlook
Looking ahead, AbbVie provided an upbeat forecast for 2025, projecting adjusted EPS in the range of $12.12 to $12.32, closely aligning with analyst expectations of $12.15. The CEO, Rob Michael, expressed confidence, stating, “We are entering 2025 with significant momentum and expect net revenues to exceed their previous peak in just the second full year following the U.S. Humira loss of exclusivity.” This anticipated growth is critical as it positions the company to tackle the legacy revenue impact from Humira.
Challenges and Strategic Moves
AbbVie faces ongoing challenges, particularly given the impairment charge related to its emraclidine drug, used for schizophrenia, which failed to meet the main goals in a pivotal Phase 2 trial. The company is actively analyzing the data to determine its next steps in this therapeutic area. Additionally, AbbVie incurred an 88-cent charge per share related to acquired in-process research and development expenses.
Moreover, a slowdown in the aesthetics segment, which saw a 5.2% decline and a 4.2% drop in Botox revenue to $687 million, could influence future growth trajectories. The company will need to strategize effectively to mitigate these downturns while capitalizing on its immunology drugs.
Accumulating Market Presence
As AbbVie continues to navigate through this transitional phase, its stock has gained 6.8% over the past 12 months, while the S&P 500 has experienced a 25% increase. This performance highlights investors’ confidence in AbbVie’s ability to recover and grow despite the downward pressure from Humira.
Conclusion
AbbVie’s proactive diversification into newer immunology drugs is proving essential in countering the decline of Humira, positioning the company for sustained growth in the coming years. With robust sales in Skyrizi and Rinvoq and a positive financial outlook for 2025, AbbVie demonstrates solid potential amidst the industry’s challenges. As investors keep a close eye on upcoming trials and market dynamics, AbbVie remains a stock worth considering in the pharmaceutical domain.
