Morningstar | ABBV Updated Forecasts and Estimates from 29 Apr 2019
AbbVie reported first-quarter results slightly ahead of our expectations, but we don't expect any significant impact to our fair value estimate based on the minor outperformance, and we continue to view the stock as undervalued. With its increasing focus on the erosion of sales from immunology drug Humira, we believe the investment community is not fully appreciating the company's solid pipeline of next-generation immunology drugs. While we expect the Humira biosimilar pressure to increase internationally and to start in 2023 in the U.S., we believe the company has a strong enough position with several other marketed drugs and new pipeline drugs to support a narrow moat.In the quarter, total sales were largely flat operationally, with international declines from Humira offset by growth in oncology drugs and U.S. Humira sales, a trend we expect to continue throughout the year. However, as AbbVie laps the heavy international biosimilar Humira competition later in the year, we expect growth will improve in 2020. Also, AbbVie is making solid strides in bringing next-generation immunology drugs to the market that hold superior profiles over Humira. The recent approval of Skyrizi brings a new psoriasis drug to the market with leading efficacy and a slight dosing advantage over Johnson & Johnson’s Tremfya, which holds a similar mechanism of action. Also, we expect approval of rheumatoid arthritis drug upadacitinib in the third quarter, and the drug looks well positioned for refractory patients. Beyond the new launches, AbbVie's currently marketed cancer drugs Imbruvica and Venclexta continue to post strong growth, and we expect this to continue as both drugs move into earlier lines of therapy. While AbbVie looks increasingly well positioned for the biosimilar Humira competition in the U.S. expected in 2023, we do expect significant total sales declines in 2023-24 (down 9% and 16%, respectively) before stabilizing in 2025.
For a complete review of AbbVie's pipeline and currently marketed portfolio, please see "Annual Drug Pipeline Report: Moats Remain Secure as Innovation Counters Pricing and Generic Headwinds, but M&A Accelerating."
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.
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