Company Reports

AbbVie holds a strong portfolio of marketed and pipeline drugs. While biosimilar competition to key drug Humira pushed down overall revenue in 2023, AbbVie returned to growth in 2024 as the remaining portfolio has been able to mitigate these losses.

AbbVie reported 10.2% top-line growth and 22.9% adjusted diluted EPS growth in the second quarter. Management raised 2026 revenue guidance by $300 million to $67.6 billion but slightly lowered its adjusted diluted EPS guidance range to $13.87-$14.07 due to the pending Apogee acquisition.

On June 22, AbbVie announced an agreement to acquire immunology-focused biopharma firm Apogee Therapeutics for $10.1 billion (net of cash acquired). The deal is expected to close in the third quarter. AbbVie shares rose 6%.

AbbVie holds a strong portfolio of marketed and pipeline drugs. While biosimilar competition to key drug Humira pushed down overall revenue in 2023, AbbVie returned to growth in 2024 as the remaining portfolio has been able to mitigate these losses.

AbbVie reported 12% revenue and 8% adjusted earnings per share growth in the first quarter. Management raised full-year guidance to $67.3 billion in revenue (10% growth) and adjusted EPS of $14.08-$14.28 (40%-42% growth from an acquisition-laden 2025). Shares rose more than 3% intraday on April 29.

AbbVie reported 9% revenue growth in 2025 and provided 2026 guidance of $67 billion in revenue (10% growth) and a 150-basis-point improvement in adjusted operating margin. Shares fell 4% in trading on Feb. 4.

AbbVie reported 9.1% revenue growth and a 30.9% adjusted operating margin (including deal-related in-process research and development expense) in the third quarter. Management slightly raised full-year guidance, which now stands at $60.9 billion in revenue and adjusted EPS of $10.61-$10.65.

AbbVie holds a strong portfolio of marketed and pipeline drugs. While biosimilar competition to key drug Humira pushed down overall revenue in 2023, AbbVie returned to growth in 2024 as the remaining portfolio has been able to mitigate these losses.

AbbVie reported second-quarter revenue of $15.4 billion (6.6% growth) and adjusted diluted earnings per share of $2.97 (12.1% growth). Management raised full-year revenue guidance to $60.5 billion from $59.7 billion and adjusted diluted EPS to $11.88-$12.08 from $11.67-$11.87.

President Trump released an executive order on May 12 calling for a 30-day negotiation period between the Department of Health and Human Services and the biopharma industry, with the threat of a rule from the Centers for Medicare and Medicaid Services to lower US drug prices if no deal is reached.

AbbVie reported 8.4% revenue growth and 6.5% adjusted diluted EPS growth in the first quarter. Management raised its 2025 adjusted diluted EPS guidance by 10 cents at the midpoint to a range of $12.09-$12.29, but this does not include the Gubra licensing agreement or potential pharma tariffs.

President Donald Trump issued an executive order on April 15 listing several potential policy changes aimed at lowering US drug prices.

President Trump has announced that "major" pharmaceutical product tariffs are likely to be revealed soon, but at the same time, paused broader tariffs for most trade partners for 90 days to allow time for negotiations.

On April 2, President Donald Trump announced a 10% tariff on imports from all countries, effective on April 5. However, pharmaceuticals appear to be among the exemptions listed in the full executive order, as part of Annex II.

AbbVie's 2024 revenue grew 4.6% on a constant currency basis, with 2025 guidance of 5.7% growth and new 2027 guidance for combined sales of immunology drug Skyrizi and Rinvoq of $31 billion (up from prior guidance of $27 billion).

AbbVie holds a strong portfolio of marketed and pipeline drugs. While the increasing competition to the company's key drug Humira should slow the growth for the company in the near term, we believe the firm's remaining portfolio will mitigate these losses.

Following President-elect Donald Trump’s Nov. 14 announcement of the nomination of Robert F. Kennedy Jr. as secretary of the US Department of Health and Human Services, there have seen several more nominations for leadership in the 13 HHS divisions, including Dr. Mehmet Oz (Centers for Medicare and Medicaid Services) on Nov. 19, Dr. Marty Makary (US Food and Drug Administration) and Dr. Dave Weldon (Centers for Disease Control and Prevention) on Nov. 22, and Dr. Jay Bhattacharya (National Institutes of Health) on Nov. 26. Overall, we think these selections show a consistent theme of introducing potential disruptive forces to US healthcare, although their lack of experience and the power of career staffers in these agencies could serve to blunt any significant proposed changes. We continue to see obesity drugs and vaccines as areas of potential scrutiny, although without any clarity on proposals, we’re not making any changes to our fair value estimates following these announcements.

President-elect Donald Trump announced on Nov. 14 that he is nominating Robert F. Kennedy Jr. to be secretary of the Department of Health and Human Services under his new administration in 2025. RFK Jr. has strong views on public health and, if confirmed, could use his position to make changes at several of the 13 HHS divisions. In our Nov. 8 note, we discussed the potential tailwinds of a Trump administration, including possible repeal of the Medicare negotiation provision in the Inflation Reduction Act, less Federal Trade Commission scrutiny of acquisitions, and a likely continuation of lower corporate taxes. However, if RFK’s nomination is confirmed, we expect more “wild card” headwinds to the industry will come to fruition. As the HHS covers the US Food and Drug Administration and the Centers for Disease Control and Prevention, an HHS secretary skeptical of vaccine and obesity drug benefits could work to erode public trust, put up roadblocks for approval of new vaccines, and prevent the CDC from recommending any vaccines that make it through the approval process. With less federal guidance, we think it is possible certain states could waver in support of broad mandates for childhood vaccines. All of these could weigh on sales of vaccines in the US, including covid vaccine makers Moderna and BioNTech and big biopharma vaccine makers like GSK (we model 14% of GSK revenue from US vaccine sales in 2024), Pfizer (12%), Merck (9%), and Sanofi (6%).

We’re maintaining our fair value estimate for AbbVie at $176 and slightly raising our fair value for Bristol-Myers Squibb to $66 from $63 following two pivotal study failures for AbbVie’s schizophrenia drug candidate emraclidine, which was the centerpiece of the recent $8.7 billion Cerevel acquisition. Cerevel had previously shown a strong efficacy and safety profile for emraclidine in a smaller phase 1b study in schizophrenia, creating the potential for differentiation from Bristol’s recently approved schizophrenia drug Cobenfy. However, both phase 2 studies of emraclidine, Empower-1, and Empower-2, failed to show any statistically significant improvement in the key efficacy endpoint after six weeks of treatment. If data had been positive, AbbVie had expected it to be sufficient to file for regulatory approval. We think AbbVie’s immunology and oncology portfolios continue to support its wide moat. At the same time, Bristol’s Cobenfy approval adds to the firm’s wide moat established with its strong oncology and cardiovascular foundation. Following the emraclidine trial failures, AbbVie shares have fallen close to our fair value estimate, while Bristol shares still look slightly undervalued.

We think that President-elect Donald Trump brings a mix of potential headwinds and tailwinds to the biopharma industry, and we’re not making any adjustments to our fair value estimates at this time. We had previously assumed that the most likely case was split control of the presidency and Congress by Democrats and Republicans. However, with Republicans locking in control of the Senate and holding a lead in elections in the House, we think it looks increasingly likely that Trump and his party could have control across both branches of government, making any potential policy priorities more likely to be implemented.