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AbbVie Crohn's Disease Drug Gets Orphan Drug Status in U.S.

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AbbVie Inc. (ABBV - Free Report) announced that the FDA has granted Orphan Drug Designation to its investigational IL-23 inhibitor, risankizumab (ABBV-066; formerly BI 655066), for the treatment of Crohn's disease in pediatric patients.

Note that AbbVie’s share price has gained 9.0% in the past one month which fared better than a 0.3% decline for the Zacks classified Large Cap Pharma industry.

We remind investors that in Mar 2016, AbbVie and Boehringer Ingelheim announced a collaboration agreement under which the former will be responsible for the development and commercialization of risankizumab globally. However, in Apr 2016, AbbVie acquired all rights to risankizumab under this collaboration agreement.

Apart from being studied in phase II for Crohn’s disease, risankizumab is being evaluated for immunological disorders including psoriasis, psoriatic arthritis and asthma.

The company is conducting a phase III study on the candidate for psoriasis and a phase II trial for psoriatic arthritis. Data from these trials are expected in 2017.

Upon successful development and subsequent approval, risankizumab will serve a high-potential but competitive market that is crowded by other drugs like Stelara, Cosentyx and Enbrel.

AbbVie has a deep pipeline consisting of several interesting late-stage candidates including elagolix (uterine fibroids), atrasentan (chronic kidney disease), veliparib (triple-negative breast cancer and previously treated squamous NSCLC) and ABT-494 (Crohn’s disease and ulcerative colitis).

Meanwhile, AbbVie’s recent approvals include Duopa (advanced Parkinson’s disease) in 2014 in the U.S., Empliciti (multiple myeloma) in Nov 2015 in the U.S. and Zinbryta (relapsing remitting multiple sclerosis) in late May 2016 in the U.S. and in Jul 2016 in Europe. The company expects to advance several immuno-oncology candidates into development in 2017.

Zacks Rank & Key Picks

AbbVie currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Heska Corporation , Cambrex Corporation and Vanda Pharmaceuticals, Inc. (VNDA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates have increased from $1.13 to $1.35 for 2016 and from $1.38 to $1.53 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 301.64%. Its share price has increased 70.9% year to date.

Cambrex’s earnings estimates increased from $2.46 to $2.55 for 2016 and from $2.91 to $3.06 for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%. Its share price has increased 6.4% year to date.

Vanda’s loss estimates have narrowed from 68 cents to 56 cents for 2016 while its earnings estimates have increased from 16 cents to 17 cents for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%. Its share price surged 76.7% year to date.

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