Analyst Note| Damien Conover, CFA |
AbbVie reported strong fourth-quarter earnings and issued robust 2021 guidance above our expectations. We plan to slightly raise our fair value estimate on the basis of the favorable update. The strong traction of the firm’s next-generation immunology drugs Rinvoq and Skyrizi are helping to propel the outperformance and position the firm to better mitigate pressure from the likely heavy U.S. biosimilar competition to Humira in 2023. While we don’t expect the new immunology drugs to completely offset the loss of U.S. market exclusivity for Humira, the growing entrenchment of new drugs helps support the firm’s narrow moat.