We need a new blockbuster not Martin Shkreli pricing
We need a new blockbuster not Martin Shkreli pricing
Why AbbVie's Blockbuster Humira Is Already In Trouble This Year
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AbbVie's (ABBV) biggest drug, Humira, could be in trouble as biosimilars take share in Europe beginning this year, an analyst said Wednesday as he downgraded the stock and slashed his price target.
X
On the stock market today, though, AbbVie gained 3.6% to close at 103.01, after announcing the preliminary results of its modified Dutch auction tender offer. AbbVie expects to acquire about 71.4 million shares of its common stock at 105 per share. This will total about $7.5 billion, excluding fees.
Credit Suisse analyst Vamil Divan downgraded AbbVie to underperform from a neutral rating, and cut his price target to 89 from 104. He sees Humira biosimilars — nearly identical biologic copies — cropping up in Europe in 2018-2020 and in the U.S. in 2023.
European sales will take the brunt of early competition from Humira biosimilars, Divan said in a report. He expects a 32% decline in Humira sales outside the U.S. from 2018-2020, above the 18%-20% dip that AbbVie expects.
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"We expect relatively rapid erosion of Humira sales in the EU following the entry of multiple biosimilar versions of the drug in (the fourth quarter)," he said. "There are already three biosimilars approved in the EU, and we believe there could be another two to three approved in 2019."
Humira Biosimilars Coming
Reports often cite Humira as one of the best-selling drugs in the U.S. of all products from pharmaceutical companies. In 2017, it generated $18.43 billion in sales globally. Of that, $12.36 billion came from the U.S. Humira treats several forms of arthritis, psoriasis and Crohn's disease.
Divan further calls for rapid erosion in Humira sales in the U.S. beginning in 2023. But pressure is already apparent. AbbVie recently lowered its 2018 U.S. Humira sales guidance to about $13.7 billion, an 11% year-over-year decline.
"We believe these pressures will intensify as we expect a decreased ability for companies such as AbbVie to extract price increases from the system in the future while copay accumulator programs will also effectively further lower net prices going forward," he said.
AbbVie Outperforming — For Now
AbbVie stock has outperformed shares of other pharmaceutical companies since January 2017. Over that time, it has risen 61%. Meanwhile, shares of pharmaceutical companies have advanced 21%.
Divan credits AbbVie's stock performance to better insight into competition from Humira biosimilars as it reaches legal settlements with potential rivals. The firm is also enjoying a low 9% tax rate this year, trending up to 13% over time. Investors are also enthusiastic for its late-stage pipeline.
But, in addition to looming Humira competition, the late-stage pipeline is "stretched," Divan said. A late-stage drug called risankizumab will enter the highly competitive psoriasis market. Further, he questions the safety and differentiation of upadacitinib, a potential psoriasis and arthritis drug.
AbbVie management, though, still sees more than $5 billion in sales potential for both drugs.
Divan notes the tender offer news "may lead to some acute, unpredictable volatility, but our cautious outlook is driven by longer-term fundamental concerns we have with the story."
AbbVie shares are currently consolidating with a buy point at 125.96. Stocks of pharmaceutical companies collectively advanced 1.4%.
RELATED:
AbbVie Inc
NYSE: ABBV
100.28 USD −2.73 (2.65%)
May 31 ·
Reprints
- ALLISON GATLIN
- 5/30/2018
AbbVie's (ABBV) biggest drug, Humira, could be in trouble as biosimilars take share in Europe beginning this year, an analyst said Wednesday as he downgraded the stock and slashed his price target.
X
On the stock market today, though, AbbVie gained 3.6% to close at 103.01, after announcing the preliminary results of its modified Dutch auction tender offer. AbbVie expects to acquire about 71.4 million shares of its common stock at 105 per share. This will total about $7.5 billion, excluding fees.
Credit Suisse analyst Vamil Divan downgraded AbbVie to underperform from a neutral rating, and cut his price target to 89 from 104. He sees Humira biosimilars — nearly identical biologic copies — cropping up in Europe in 2018-2020 and in the U.S. in 2023.
European sales will take the brunt of early competition from Humira biosimilars, Divan said in a report. He expects a 32% decline in Humira sales outside the U.S. from 2018-2020, above the 18%-20% dip that AbbVie expects.
IBD Newsletters
Get exclusive IBD analysis and action news daily.
"We expect relatively rapid erosion of Humira sales in the EU following the entry of multiple biosimilar versions of the drug in (the fourth quarter)," he said. "There are already three biosimilars approved in the EU, and we believe there could be another two to three approved in 2019."
Humira Biosimilars Coming
Reports often cite Humira as one of the best-selling drugs in the U.S. of all products from pharmaceutical companies. In 2017, it generated $18.43 billion in sales globally. Of that, $12.36 billion came from the U.S. Humira treats several forms of arthritis, psoriasis and Crohn's disease.
Divan further calls for rapid erosion in Humira sales in the U.S. beginning in 2023. But pressure is already apparent. AbbVie recently lowered its 2018 U.S. Humira sales guidance to about $13.7 billion, an 11% year-over-year decline.
"We believe these pressures will intensify as we expect a decreased ability for companies such as AbbVie to extract price increases from the system in the future while copay accumulator programs will also effectively further lower net prices going forward," he said.
AbbVie Outperforming — For Now
AbbVie stock has outperformed shares of other pharmaceutical companies since January 2017. Over that time, it has risen 61%. Meanwhile, shares of pharmaceutical companies have advanced 21%.
Divan credits AbbVie's stock performance to better insight into competition from Humira biosimilars as it reaches legal settlements with potential rivals. The firm is also enjoying a low 9% tax rate this year, trending up to 13% over time. Investors are also enthusiastic for its late-stage pipeline.
But, in addition to looming Humira competition, the late-stage pipeline is "stretched," Divan said. A late-stage drug called risankizumab will enter the highly competitive psoriasis market. Further, he questions the safety and differentiation of upadacitinib, a potential psoriasis and arthritis drug.
AbbVie management, though, still sees more than $5 billion in sales potential for both drugs.
Divan notes the tender offer news "may lead to some acute, unpredictable volatility, but our cautious outlook is driven by longer-term fundamental concerns we have with the story."
AbbVie shares are currently consolidating with a buy point at 125.96. Stocks of pharmaceutical companies collectively advanced 1.4%.
RELATED:
AbbVie Inc
NYSE: ABBV
100.28 USD −2.73 (2.65%)
May 31 ·
Novartis got CHMP opinion for Humira biosim. Analysts dropped AbbVie to neutral from overweight. Price target dropped From $138 to $105. Abbvie is on a downward spiral and job security is at risk. The recent run to $123 was its last charge. Stock treated me very well. No complaints, but now sadly all good things must end. Miles White knew this scenario would play out and thats why Abbott dumped it.
You're seeing the beginning of the end for ABBV. Sorry folks !!!
AbbVie Inc
NYSE: ABBV
$98.05 USD DOWN−0.89 (0.90%)
You're seeing the beginning of the end for ABBV. Sorry folks !!!
AbbVie Inc
NYSE: ABBV
$98.05 USD DOWN−0.89 (0.90%)
F YOU. F ING IDIOT YOU FARTBAG!! STOP SPOUTING OBVIOIS BS!!!! ABBV HEADED FOR $200!!!
Look it’s real simple. Humira has been surviving on big price increases. FDA now has Humira, Abbvie and Ricky on there radar. Ricky is using every financial trick available to inflate the stock price. He does not have many cards left. Analysts have started to catch on and downgrade the stock. Will be at $75 within 6 months.
No way..Ricky has many avenues to jack up share price, expect major pipeline announcement coming up
Assuming you are correct, when is the announcement coming? New product or existing pipeline product?
Agree we don't even have a pipeline now. Time to start looking for other work.
Or time for the mega-deal to sell the company we expected five years ago.
Wow, these copay accumulators are killing Humira. When the discounts run out, patients pay the full cost. YIKES !!!
What is the company's strategy to deal with the copay accumulators?
I feel sorry for Humira legacy reps and all AbbVie Employees.
Miles White saw this scenario playing out way back in 2012 and took appropriate action. Looks like it was a smart play. Good luck Abbvie employees.
Plans are underway for a massive restructure at Abbvie.
AbbVie Inc
NYSE: ABBV
86.99 USD −2.96 (3.29%)
Jul 20, 11:50 AM EDT
This company will either have to merge, make a massive acquisition or restructure big time. All three scenarios mean layoffs. Company now about to pay a big price for its terrible leadership.
all my manager wants our district to do is go around and plant GI issues with ILs. before that, all he wanted me to do was go around and plant depression issues with Otezla. before that all he wanted was to plant efficacy issues with Enbrel. Seems all they want us to do is talk about other products. how bout we talk about Humira. It's pretty good on its own.
With the government and private companies spending money to speed up the uptake of biosimilars and Ricky's ability to raise prices curbed by Trump, we won't see Humira numbers like this again after this year...