AbbVie results beat expectations despite low-cost competition to blockbuster Humira

By Eleanor Laise

Drugmaker raises its full-year earnings outlook, boosts 2024 dividend 4.7%

AbbVie Inc. (ABBV) on Friday reported third-quarter sales and profit that topped analyst expectations and raised its full-year earnings outlook, even as its blockbuster autoimmune drug Humira wrestles with new, lower-cost competitors.

The drugmaker posted net income of $1.778 billion, or $1.00 per share, after net income of $3.949 billion, or $2.21 per share in the year-earlier period. Adjusted earnings per share came to $2.95, beating the FactSet consensus of $2.87. Third quarter revenues totaled $13.927 billion, down 6% from a year earlier but ahead of the FactSet consensus of $13.718 billion.

AbbVie is navigating one of the most significant losses of U.S. market exclusivity in the industry's history, analysts say, as Humira this year faced its first biosimilar competition. Third-quarter global Humira sales came to $3.547 billion, down 36% from a year earlier but ahead of the FactSet consensus of $3.511 billion.

Humira sales volumes have not been hit as hard as many investors expected, as AbbVie has secured the drug's place on many formularies--or lists of covered drugs--maintained by insurance plans and pharmacy-benefit managers. Given that placement, many analysts expect Humira sales to be weighed down largely by price concessions rather than volume declines.

Analysts have been looking for sales of AbbVie's key growth products, including arthritis drugs Skyrizi and Rinvoq, to help pick up the slack as Humira faces lower-cost competition. Skyrizi sales jumped 52% from a year earlier, to $2.126 billion in the quarter, beating the FactSet consensus of $2.101 billion. Rinvoq sales came to $1.11 billion, up nearly 60% from the year-earlier period and ahead of the FactSet consensus of $1.03 billion. Management said earlier this year that it expects Skyrizi and Rinvoq in 2027 will exceed the $21 billion in peak revenues generated by Humira.

Sales of antipsychotic drug Vraylar came to $751 million in the quarter, beating the FactSet consensus of $735 million.

AbbVie's aesthetics business had quarterly sales of $1.239 billion, falling short of the FactSet consensus of $1.346 billion, as sales of Botox cosmetic treatments and Juvederm, a dermal filler, both declined from the year-earlier period and missed analysts' estimates.

The August selection of AbbVie's cancer drug Imbruvica for the first round of Medicare drug price negotiations contributed to a significant decrease in estimated future cash flows for the product, AbbVie said, leading the company to record a $2.1 billion pre-tax impairment charge to the cost of products sold in the third quarter. Global Imbruvica sales came to $908 million in the quarter, down 20% from a year earlier.

The company now expects full-year 2023 adjusted EPS in the range of $11.19 to $11.23, up from $10.86 to $11.06 previously. AbbVie also raised its 2024 adjusted earnings per share guidance floor to $11.00, from $10.70.

The dividend will increase 4.7%, starting with the dividend payable in February 2024, AbbVie said.

AbbVie stock is down 10% in the year to date, while the S&P 500 SPX is up 7.8%.

-Eleanor Laise

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10-27-23 0742ET

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