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AbbVie (ABBV) Q3 Earnings Beat, Shares Down Despite Raised View
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AbbVie Inc. (ABBV - Free Report) reported adjusted earnings of $2.95 per share for third-quarter 2023, beating the Zacks Consensus Estimate of $2.86. The reported earnings also exceeded the guidance of $2.76-$2.86. However, earnings declined 19.4% year over year.
ABBV’s revenues of $13.93 billion beat the Zacks Consensus Estimate of $13.70 billion. Sales declined 6.0% year over year on a reported basis and 5.8% on an operational basis. The downside was caused by lower sales of Humira, Imbruvica and Aesthetics products, which was partially offset by the rise in product sales of key drugs like Rinvoq, Skyrizi, Vraylar, Ubrelvy and Qulipta.
All growth rates mentioned below are on a year-on-year basis and at constant exchange rates (CER).
Quarter in Detail
In immunology, AbbVie’s flagship drug, Humira, recorded a year-over-year sales decline of 36.2% to $3.55 billion on an operational basis. Sales in the United States declined 39.1% to $3.02 billion, while ex-U.S. market sales were down 12.2% on an operating basis to $527 million. The drug’s sales beatthe Zacks Consensus Estimate and our model estimates pegged at $3.50 billion and $3.49 billion, respectively.
This substantial decline in Humira sales was due to the drug’s recent loss of exclusivity in the United States. Earlierthis January, Amgen (AMGN - Free Report) announced the launch of the first Humira biosimilar in the United States, called Amjevita.
Like Amgen, several other companies like Boehringer Ingelheim, Coherus BioSciences and Sandoz (SDZNY - Free Report) have also started marketing their own Humira biosimilars since the onset of this month. Sandoz markets its Humira biosimilar under the trade name Hyrimoz. Like Amgen and Sandoz, more generic drugmakers are planning to launch their own Humira biosimilars throughout this year. These subsequent launches are expected to erode Humira’s sales in subsequent quarters. The drug lost its exclusivity in ex-U.S. territories following the launch of generics in 2018.
Net revenues from Rinvoq in the third quarter were $1.11 billion, up 59.6% on an operational basis year over year. The upside can be attributed to label expansions to the drug to include new patient populations in recent quarters. Rinvoq sales beat the Zacks Consensus Estimate and our model estimates of $1.04 billion and $1.03 billion, respectively.
Net revenues recorded from Skyrizi in the second quarter were $2.13 billion, up 51.9% on an operational basis year over year. This uptick in sales is due to label expansions to the drug to include new patient populations in recent quarters. Though Skyrizi sales beat our model estimates of $2.10 billion, it marginally missed the Zacks Consensus Estimate of $2.14 billion.
Sales from the neuroscience portfolio increased 22.0% on an operational basis to $2.04 billion, driven by higher sales of the depression drug Vraylar and recently approved migraine drugs Ubrelvy and Qulipta. Neuroscience sales figures beat the Zacks Consensus Estimate and our model estimate of $1.97 billion and $1.98 billion, respectively.
While Botox Therapeutic sales rose 7.4% to $748 million, sales of Vraylar increased 35.4% to $751 million. Sales of AbbVie’s oral migraine drug Ubrelvy were $233 million, up 45.6% year over year.
The recently launched Qulipta generated $132 million in product revenues compared with $96 million in second-quarter 2023.
AbbVie’s oncology/hematology sales declined 8.6% on an operational basis to $1.51 billion in the quarter, as growth of Venclexta sales was more than offset by lower sales of Imbruvica. The oncology/hematology sales figure beat the Zacks Consensus Estimate and our model estimates, both of which were pegged at $1.44 billion.
Third-quarter net revenues from Imbruvica were $908 million, down 20.0% year over year. AbbVie markets the drug in partnership with Johnson & Johnson (JNJ - Free Report) . The company shares international profits earned from Imbruvica with J&J.
U.S. sales of J&J-partnered Imbruvica grossed $678 million, down 20.2% from the year-ago figure. Sales of the J&J-partnered Imbruvica declined amid rising competition from novel oral treatments in the United States. AbbVie’s share of profit from the international sales of the J&J-partnered drug declined 19.6% to $230 million.
AbbVie’s leukemia drug Venclexta generated revenues of $590 million in the reported quarter, reflecting 14.0% year-over-year growth.
In May, the FDA approved AbbVie’s lymphoma drug Epkinly, which is marketed in collaboration with Genmab. Per the terms of the agreement, AbbVie shares profits earned from Epkinly sales in the United States and Japan while holding exclusive rights for other global territories. The drug’s sales, which reflects AbbVie’s share of profit from U.S. revenues, were $14 million.
AbbVie’s aesthetics portfolio sales were down 4.0% on an operational basis to $1.24 billion due to declining product sales. Sales of Juvederm declined 7.9% on an operating basis to $321 million, while Botox Cosmetic sales fell 1.7% to $620 million.
Eye care portfolio sales declined 2.4% on an operational basis to $605 million. Sales of Ozurdex, a key drug in the portfolio, rose 12.8% year over year to $120 million.
Shares of AbbVie were down 5.7% in pre-market trading on Oct 27, likely due to a softer sales performance of Skyrizi. In the year so far, the stock has lost 10.2% against the industry’s 5.0% rise.
Image Source: Zacks Investment Research
Cost Discussion
Adjusted SG&A expenses rose 7.8% to $3.33 billion, while adjusted R&D expenses were $1.72 billion in the third quarter, up 7.0% year over year. The adjusted operating margin contributed 46.7% to sales.
Raises Guidance for 2023 & 2024
AbbVie raised its earnings per share (“EPS”) guidance for 2023. The company expects adjusted EPS in the range of $11.19-$11.23, up from the previously provided EPS guidance of $10.86-$11.06.
AbbVie also lifted its EPS guidance floor for the full year 2024. The company now expects adjusted EPS to be at least $11.00 per share, up from the previously-issued guidance of $10.70.
Our Take
AbbVie’s third-quarter results were better than expected, with the top and the bottom line beating the consensus mark. The lower-than-expected drop in Humira sales, coupled with strong demand for newer approved drugs, also helped the company raise its profit outlook for this year as well as the next one.
The raised outlook was also likely one of the reasons for a rise in quarterly cash dividends by 4.7% to $1.55 per share, beginning with the first dividend payable on Feb 25, 2024.
Image: Shutterstock
AbbVie (ABBV) Q3 Earnings Beat, Shares Down Despite Raised View
AbbVie Inc. (ABBV - Free Report) reported adjusted earnings of $2.95 per share for third-quarter 2023, beating the Zacks Consensus Estimate of $2.86. The reported earnings also exceeded the guidance of $2.76-$2.86. However, earnings declined 19.4% year over year.
ABBV’s revenues of $13.93 billion beat the Zacks Consensus Estimate of $13.70 billion. Sales declined 6.0% year over year on a reported basis and 5.8% on an operational basis. The downside was caused by lower sales of Humira, Imbruvica and Aesthetics products, which was partially offset by the rise in product sales of key drugs like Rinvoq, Skyrizi, Vraylar, Ubrelvy and Qulipta.
All growth rates mentioned below are on a year-on-year basis and at constant exchange rates (CER).
Quarter in Detail
In immunology, AbbVie’s flagship drug, Humira, recorded a year-over-year sales decline of 36.2% to $3.55 billion on an operational basis. Sales in the United States declined 39.1% to $3.02 billion, while ex-U.S. market sales were down 12.2% on an operating basis to $527 million. The drug’s sales beatthe Zacks Consensus Estimate and our model estimates pegged at $3.50 billion and $3.49 billion, respectively.
This substantial decline in Humira sales was due to the drug’s recent loss of exclusivity in the United States. Earlierthis January, Amgen (AMGN - Free Report) announced the launch of the first Humira biosimilar in the United States, called Amjevita.
Like Amgen, several other companies like Boehringer Ingelheim, Coherus BioSciences and Sandoz (SDZNY - Free Report) have also started marketing their own Humira biosimilars since the onset of this month. Sandoz markets its Humira biosimilar under the trade name Hyrimoz. Like Amgen and Sandoz, more generic drugmakers are planning to launch their own Humira biosimilars throughout this year. These subsequent launches are expected to erode Humira’s sales in subsequent quarters. The drug lost its exclusivity in ex-U.S. territories following the launch of generics in 2018.
Net revenues from Rinvoq in the third quarter were $1.11 billion, up 59.6% on an operational basis year over year. The upside can be attributed to label expansions to the drug to include new patient populations in recent quarters. Rinvoq sales beat the Zacks Consensus Estimate and our model estimates of $1.04 billion and $1.03 billion, respectively.
Net revenues recorded from Skyrizi in the second quarter were $2.13 billion, up 51.9% on an operational basis year over year. This uptick in sales is due to label expansions to the drug to include new patient populations in recent quarters. Though Skyrizi sales beat our model estimates of $2.10 billion, it marginally missed the Zacks Consensus Estimate of $2.14 billion.
Sales from the neuroscience portfolio increased 22.0% on an operational basis to $2.04 billion, driven by higher sales of the depression drug Vraylar and recently approved migraine drugs Ubrelvy and Qulipta. Neuroscience sales figures beat the Zacks Consensus Estimate and our model estimate of $1.97 billion and $1.98 billion, respectively.
While Botox Therapeutic sales rose 7.4% to $748 million, sales of Vraylar increased 35.4% to $751 million. Sales of AbbVie’s oral migraine drug Ubrelvy were $233 million, up 45.6% year over year.
The recently launched Qulipta generated $132 million in product revenues compared with $96 million in second-quarter 2023.
AbbVie’s oncology/hematology sales declined 8.6% on an operational basis to $1.51 billion in the quarter, as growth of Venclexta sales was more than offset by lower sales of Imbruvica. The oncology/hematology sales figure beat the Zacks Consensus Estimate and our model estimates, both of which were pegged at $1.44 billion.
Third-quarter net revenues from Imbruvica were $908 million, down 20.0% year over year. AbbVie markets the drug in partnership with Johnson & Johnson (JNJ - Free Report) . The company shares international profits earned from Imbruvica with J&J.
U.S. sales of J&J-partnered Imbruvica grossed $678 million, down 20.2% from the year-ago figure. Sales of the J&J-partnered Imbruvica declined amid rising competition from novel oral treatments in the United States. AbbVie’s share of profit from the international sales of the J&J-partnered drug declined 19.6% to $230 million.
AbbVie’s leukemia drug Venclexta generated revenues of $590 million in the reported quarter, reflecting 14.0% year-over-year growth.
In May, the FDA approved AbbVie’s lymphoma drug Epkinly, which is marketed in collaboration with Genmab. Per the terms of the agreement, AbbVie shares profits earned from Epkinly sales in the United States and Japan while holding exclusive rights for other global territories. The drug’s sales, which reflects AbbVie’s share of profit from U.S. revenues, were $14 million.
AbbVie’s aesthetics portfolio sales were down 4.0% on an operational basis to $1.24 billion due to declining product sales. Sales of Juvederm declined 7.9% on an operating basis to $321 million, while Botox Cosmetic sales fell 1.7% to $620 million.
Eye care portfolio sales declined 2.4% on an operational basis to $605 million. Sales of Ozurdex, a key drug in the portfolio, rose 12.8% year over year to $120 million.
Shares of AbbVie were down 5.7% in pre-market trading on Oct 27, likely due to a softer sales performance of Skyrizi. In the year so far, the stock has lost 10.2% against the industry’s 5.0% rise.
Image Source: Zacks Investment Research
Cost Discussion
Adjusted SG&A expenses rose 7.8% to $3.33 billion, while adjusted R&D expenses were $1.72 billion in the third quarter, up 7.0% year over year. The adjusted operating margin contributed 46.7% to sales.
Raises Guidance for 2023 & 2024
AbbVie raised its earnings per share (“EPS”) guidance for 2023. The company expects adjusted EPS in the range of $11.19-$11.23, up from the previously provided EPS guidance of $10.86-$11.06.
AbbVie also lifted its EPS guidance floor for the full year 2024. The company now expects adjusted EPS to be at least $11.00 per share, up from the previously-issued guidance of $10.70.
Our Take
AbbVie’s third-quarter results were better than expected, with the top and the bottom line beating the consensus mark. The lower-than-expected drop in Humira sales, coupled with strong demand for newer approved drugs, also helped the company raise its profit outlook for this year as well as the next one.
The raised outlook was also likely one of the reasons for a rise in quarterly cash dividends by 4.7% to $1.55 per share, beginning with the first dividend payable on Feb 25, 2024.
AbbVie Inc. Price
AbbVie Inc. price | AbbVie Inc. Quote
Zacks Rank
AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.