Morningstar | ABBV Updated Forecasts and Estimates from 05 Nov 2018
AbbVie reported solid third-quarter results, with lower expenses leading to better-than-expected bottom-line growth, but we don't expect any major changes to our fair value estimate based on the minor outperformance. We view the stock as undervalued, with the market likely overly concerned about the Humira biosimilar competition and not appreciating the pipeline. Even though immunology drug Humira (62% of total sales) continues to post steady gains, up 10%, we expect biosimilar pressures to begin to cause this key pillar to decline in 2019. The high concentration of profits from Humira and the likely future declines lead us to view the company's moat as narrow even though the firm has a strong developing pipeline and steady portfolio of currently marketed drugs.Beyond the Humira gains, hepatitis C drug Mavyret and hematology drugs were key growth drivers that led to total growth of 19%, but we expect this total growth rate to slow significantly in 2019. European biosimilar pressure to Humira started in October and management's expectation of international discounting (including countries without biosimilars) of 26-27% is higher than we expected, likely due to the high number of simultaneous biosimilar launches. Also, we expect biosimilar pressure in the U.S. in late 2020, ahead of the 2023 time frame announced in settlements for some biosimilars, as we view an at-risk launch by Pfizer as likely by 2020. In addition to the pressure from Humira, we expect the bolus demand for Mavyret to level off in 2019, resulting in very minor growth for the drug next year.
Offsetting the expected slowing growth from Humira and Mavyret in 2019, we believe the hematology drugs Imbruvica and Venclexta will continue to post strong gains and the new pipeline launches should help stabilize the business. We expect the recent launch of endometriosis drug Orilissa, and the likely 2019 launches of immunology drugs risankizumab and upadacitinib to add three new major blockbusters.
AbbVie is a research-based biopharmaceutical company. The company's products are focused on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus and human immunodeficiency virus; neurological disorders, such as Parkinson's disease; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis; pain associated with endometriosis; as well as other serious health conditions. The company also has medicines in clinical development across immunology, oncology and neuroscience, with additional targeted investment in cystic fibrosis and women's health.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.