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4 Reasons Why You Should Add AbbVie (ABBV) to Your Portfolio
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AbbVie (ABBV - Free Report) is a good stock to own in the drug and biotech sector. An investor looking to invest his money in a relatively safe yet prospective sector can look to the drug and biotech sector, which includes large profitable companies. Their profits provide regular funds for innovation, which is the key to the growth of biotech companies.
AbbVie has become one of the top-most pharma companies after it acquired Botox maker Allergan in a cash-and-stock deal for $63 billion in May 2020. AbbVie has one of the most popular cancer drugs in its portfolio, Imbruvica and its newest immunology drugs Skyrizi (risankizumab) and Rinvoq (upadacitinib) position it well for long-term growth.
Earnings estimates for AbbVie’s earnings have risen from $13.99 per share to $14.09 per share for 2022 over the past 60 days. AbbVie’s stock has risen 33.4% in the past year compared with an increase of 22.2% for the industry.
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Allergan Deal Diversifies Portfolio: AbbVie’s acquisition of Allergan significantly expanded and diversified its revenue base with new therapeutic areas, enhancing its long-term growth potential. The acquisition strengthened AbbVie’s existing leadership position in immunology and hematological oncology while providing additional growth franchises in aesthetics and neuroscience.
AbbVie’s rationale behind the Allergan deal was to add a new blockbuster product to its portfolio, Allergan’s Botox, ahead of generic competition for Humira. Humira generics are already denting revenues in Europe and are expected to be launched in the United States in 2023. AbbVie is heavily dependent on Humira and is looking to diversify its portfolio. Approved for therapeutic and aesthetic use, Botox is a key top-line driver for Allergan and looks fit to be the next revenue driver for AbbVie after Humira loses exclusivity in the United States.
Successful New Drugs & Promising Pipeline: AbbVie has several new drugs in its portfolio, which have the potential to drive revenues once Humira loses U.S. exclusivity in 2023. Key recent FDA approvals include that of Oriahnn (elagolix) for reducing heavy menstrual bleeding (HMB) in premenopausal women with uterine fibroids in May 2020, Orilissa (elagolix) for management of pain associated with endometriosis, a common gynecologic disorder in July 2018, Ubrelvy, an oral CGRP for acute migraine in December 2019, Skyrizi (risankizumab) for plaque psoriasis in April 2019 and Rinvoq (upadacitinib) for moderate-to-severe rheumatoid arthritis (RA) in August 2019. Skyrizi and Rinvoq have demonstrated differentiated clinical profiles versus Humira and are gradually lowering AbbVie’s dependence on Humira. With many new indications coming in the next couple of years, sales of these drugs could be higher and have the potential to replace Humira when generics are launched in 2023. Meanwhile, new migraine drugs, Ubrelvy and Qulipta, represent a $1 billion-plus peak sales opportunity each.
AbbVie also has an impressive late-stage pipeline with several early/mid-stage candidates that have blockbuster potential.
Strong Oncology Portfolio: AbbVie has built a substantial oncology franchise with Imbruvica and Venclexta. It expects oncology to be its major growth driver over the next 10 years. AbbVie markets Venclexta/Venclyxto in partnership with Roche (RHHBY - Free Report) and Imbruvica with J&J (JNJ - Free Report) .
AbbVie and Roche jointly commercialize Venclexta in the United States while AbbVie markets it outside the country.
Imbruvica, currently approved for five hematologic cancers, has multi-billion-dollar potential. Several studies on AbbVie and J&J’s Imbruvica are ongoing to evaluate the drug alone or in combination in different patient segments. AbbVie and J&J are positioning Imbruvica as a “pipeline in a molecule.” The treatment is in several company-sponsored studies.
AbbVie and Roche are also studying Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory chronic lymphocytic leukemia (CLL) patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies like multiple myeloma and AML. Label expansion approvals in the past couple of years have expanded the eligible patient population of Venclexta significantly, which is boosting sales from the drug.
In 2020, AbbVie signed oncology deals with Genmab (jointly develop and commercialize Genmab's three early-stage investigational bispecific antibody therapeutics) and I-Mab Biopharma (development and commercialization of lemzoparlimab for multiple cancers) to boost the long-term growth of the hematology/oncology franchise.
Another Stock to Consider
Another stock worth considering is Pfizer (PFE - Free Report) , which has a Zacks Rank of 1 (Strong Buy). Pfizer’s stock has risen 56% in the past year.
Estimates for Pfizer’s 2022 earnings have gone up from $4.77 to $5.50 over the past 30 days.
Pfizer’s earnings performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. PFE has a four-quarter earnings surprise of 10.85%, on average.
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4 Reasons Why You Should Add AbbVie (ABBV) to Your Portfolio
AbbVie (ABBV - Free Report) is a good stock to own in the drug and biotech sector. An investor looking to invest his money in a relatively safe yet prospective sector can look to the drug and biotech sector, which includes large profitable companies. Their profits provide regular funds for innovation, which is the key to the growth of biotech companies.
AbbVie has become one of the top-most pharma companies after it acquired Botox maker Allergan in a cash-and-stock deal for $63 billion in May 2020. AbbVie has one of the most popular cancer drugs in its portfolio, Imbruvica and its newest immunology drugs Skyrizi (risankizumab) and Rinvoq (upadacitinib) position it well for long-term growth.
There are several reasons to own the stock.
Good Rank and Rising Estimates & Share Price: AbbVie currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for AbbVie’s earnings have risen from $13.99 per share to $14.09 per share for 2022 over the past 60 days. AbbVie’s stock has risen 33.4% in the past year compared with an increase of 22.2% for the industry.
Allergan Deal Diversifies Portfolio: AbbVie’s acquisition of Allergan significantly expanded and diversified its revenue base with new therapeutic areas, enhancing its long-term growth potential. The acquisition strengthened AbbVie’s existing leadership position in immunology and hematological oncology while providing additional growth franchises in aesthetics and neuroscience.
AbbVie’s rationale behind the Allergan deal was to add a new blockbuster product to its portfolio, Allergan’s Botox, ahead of generic competition for Humira. Humira generics are already denting revenues in Europe and are expected to be launched in the United States in 2023. AbbVie is heavily dependent on Humira and is looking to diversify its portfolio. Approved for therapeutic and aesthetic use, Botox is a key top-line driver for Allergan and looks fit to be the next revenue driver for AbbVie after Humira loses exclusivity in the United States.
Successful New Drugs & Promising Pipeline: AbbVie has several new drugs in its portfolio, which have the potential to drive revenues once Humira loses U.S. exclusivity in 2023. Key recent FDA approvals include that of Oriahnn (elagolix) for reducing heavy menstrual bleeding (HMB) in premenopausal women with uterine fibroids in May 2020, Orilissa (elagolix) for management of pain associated with endometriosis, a common gynecologic disorder in July 2018, Ubrelvy, an oral CGRP for acute migraine in December 2019, Skyrizi (risankizumab) for plaque psoriasis in April 2019 and Rinvoq (upadacitinib) for moderate-to-severe rheumatoid arthritis (RA) in August 2019. Skyrizi and Rinvoq have demonstrated differentiated clinical profiles versus Humira and are gradually lowering AbbVie’s dependence on Humira. With many new indications coming in the next couple of years, sales of these drugs could be higher and have the potential to replace Humira when generics are launched in 2023. Meanwhile, new migraine drugs, Ubrelvy and Qulipta, represent a $1 billion-plus peak sales opportunity each.
AbbVie also has an impressive late-stage pipeline with several early/mid-stage candidates that have blockbuster potential.
Strong Oncology Portfolio: AbbVie has built a substantial oncology franchise with Imbruvica and Venclexta. It expects oncology to be its major growth driver over the next 10 years. AbbVie markets Venclexta/Venclyxto in partnership with Roche (RHHBY - Free Report) and Imbruvica with J&J (JNJ - Free Report) .
AbbVie and Roche jointly commercialize Venclexta in the United States while AbbVie markets it outside the country.
Imbruvica, currently approved for five hematologic cancers, has multi-billion-dollar potential. Several studies on AbbVie and J&J’s Imbruvica are ongoing to evaluate the drug alone or in combination in different patient segments. AbbVie and J&J are positioning Imbruvica as a “pipeline in a molecule.” The treatment is in several company-sponsored studies.
AbbVie and Roche are also studying Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory chronic lymphocytic leukemia (CLL) patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies like multiple myeloma and AML. Label expansion approvals in the past couple of years have expanded the eligible patient population of Venclexta significantly, which is boosting sales from the drug.
In 2020, AbbVie signed oncology deals with Genmab (jointly develop and commercialize Genmab's three early-stage investigational bispecific antibody therapeutics) and I-Mab Biopharma (development and commercialization of lemzoparlimab for multiple cancers) to boost the long-term growth of the hematology/oncology franchise.
Another Stock to Consider
Another stock worth considering is Pfizer (PFE - Free Report) , which has a Zacks Rank of 1 (Strong Buy). Pfizer’s stock has risen 56% in the past year.
Estimates for Pfizer’s 2022 earnings have gone up from $4.77 to $5.50 over the past 30 days.
Pfizer’s earnings performance has been mixed, with the company exceeding earnings expectations in three of the last four quarters while missing in one. PFE has a four-quarter earnings surprise of 10.85%, on average.