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Will AbbVie's (ABBV) New Drugs Continue to Drive Q4 Earnings?

AbbVie’s ABBV fourth-quarter revenues are likely to be driven by revenues generated from the sales of its immunology and neuroscience products.

Around half of the company’s revenues is expected to be generated from its immunology franchise, consisting of three blockbuster drugs — Humira, Rinvoq and Skyrizi. Humira, which is also AbbVie’s flagship product, accounts for more than one-third of the company’s total revenues. We expect the company’s flagship drug Humira to register strong growth in the United States, which is more than likely to offset the downward trend in the drug’s international sales due to generic erosion.

However, AbbVie will face generic competition for Humira in the United States this year following the loss of exclusivity. Last week, Amgen announced the launch of Amjevita in the United States, the first company to launch a biosimilar of Humira in the country. In fact, many other companies have also developed their own Humira biosimilars, which are expected to be launched at various times this year per agreements with AbbVie. These launches are likely to lead to a significant decline in Humira sales in subsequent quarters.

The Zacks Consensus Estimate for U.S. sales of Humira is pegged at $5.58 billion, while that for international sales is $539 million. Our model estimates Humira U.S. sales to stand at $5.54 billion, while ex-U.S. sales are expected at around $564 million.

AbbVie’s stock has gained 1.1% in the past year compared with the industry‘s 8.2% growth.

Zacks Investment Research
Zacks Investment Research

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The robust sequential revenue growth for newer immunology drugs — Skyrizi and Rinvoq — seen in the previous quarters is likely to have continued in the fourth quarter of 2022. The rise in sales is likely due to label expansions of both drugs to include new patient populations in the last few quarters. During the fourth quarter, Rinvoq received FDA approval for a sixth indication in active non-radiographic axial spondyloarthritis, while Skyrizi received label expansion in European Union for Crohn’s disease indication.

The Zacks Consensus Estimate for Rinvoq and Skyrizi sales in the fourth quarter is pegged at $868 million and $1.55 billion, respectively. Our model estimates Rinvoq and Skyrizi sales to be pegged at around $859 million and $1.47 billion, respectively.

Sales of the company’s neuroscience franchise are expected to have been driven by Vraylar and Botox. The new migraine drugs, Qulipta and Ubrelvy, are expected to generate additional sales. The Zacks Consensus Estimate for the neuroscience franchise stands at $1.90 billion, while our estimates for the franchise are pegged at $1.93 billion.

In the aesthetics franchise, we expect both Botox and Juvederm sales to continue to be hurt by economic pressure impacting consumers' discretionary spending. ABBV’s suspension of its aesthetics business operations in Russia has also affected its sales, as Russia is a key market for fillers. The Zacks Consensus Estimate and our model estimate for aesthetics product sales stand at $1.28 billion and $1.25 billion, respectively.

U.S. sales growth of key oncology medicine, Imbruvica — developed in partnership with J&J JNJ — is being hurt by increased competition from novel oral therapies. Per J&J’s fourth-quarter earnings, Imbruvica sales declined 18.5%. However, strong demand for the J&J-partnered drug in the international market is likely to have offset some of the decline in U.S. sales of the drug during the soon-to-be-reported quarter. The Zacks Consensus estimates and our model predict Imbruvica sales to be pegged at $1.12 billion.

We expect the sales of another oncology drug, Venclexta — developed in collaboration with Roche RHHBY — are likely to rise as new patient starts are expected to improve. The Zacks Consensus Estimate and our model estimates for the Roche-partnered drug are pegged at $529 million and $534 million, respectively.

AbbVie Inc. Price and EPS Surprise


AbbVie Inc. Price and EPS Surprise
AbbVie Inc. Price and EPS Surprise

AbbVie Inc. price-eps-surprise | AbbVie Inc. Quote


Zacks Rank & Stock to Consider

AbbVie currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is Arcus Biosciences RCUS which sports a Zacks Rank #1 (Strong Buy) at present. You can the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, estimates for Arcus Biosciences’ 2023 loss per share have narrowed from $4.75 to $4.57. Shares of Arcus Biosciences have lost 30.4% in the year-to-date period.

Earnings of Arcus Biosciences beat estimates in two of the last four quarters missed the mark on one occasion and met the mark on another. On average, RCUS witnessed a trailing four-quarter positive earnings surprise of 56.74%, on average. In the last reported quarter, Arcus Biosciences’ earnings beat estimates by 14.29%.

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