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In the TEMPO-1 study, patients who received two fixed doses (5mg and 15mg) of once-daily tavapadon, a D1/D5 dopamine receptor partial agonist, for 26 weeks achieved statistically significant improvement in the Movement Disorder Society - Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Parts II and III combined score. MDS-UPDRS is a scale used to evaluate various aspects of Parkinson's disease including non-motor and motor experiences of daily living and motor complications. The study also met a key secondary endpoint by demonstrating statistically significant improvement in experiences of daily living as measured by MDS-UPDRS Part II at week 26.
Another phase III study (adjunctive) on tavapadon, called TEMPO-3, met its primary endpoint. Top-line data from another phase III study, TEMPO-2, which is evaluating flexible doses of tavapadon, is expected by the end of the year.
The positive Parkinson’s study data comes as a breather for AbbVie after its other Parkinson’s candidate, ABBV-951, hit a roadblock, having faced FDA’s rejection twice. However, results from the remaining two studies will help determine tavapadon’s commercial opportunity.
Like tavapadon, AbbVie has several promising R&D programs in its pipeline with the potential to drive long-term growth. These include next-generation approaches in immunology, a focus on bispecifics, antibody-drug conjugates or ADCs as well as innovative therapies for neuropsychiatric and neurodegenerative disorders. Other than a strong pipeline, AbbVie also boasts some successful new medicines. However, it faces headwinds like biosimilar erosion of blockbuster immunology drug Humira, declining sales of Imbruvica and slowing sales of some aesthetic products.
Let us discuss these factors in detail to better analyze how to play the stock.
ABBV’s Successful New Drugs Skyrizi and Rinvoq
AbbVie lost patent protection for Humira in the United States in January 2023 and in the EU in 2018. Sales of Humira are declining due to loss of exclusivity and biosimilar erosion. However, AbbVie has successfully navigated Humira's loss of exclusivity by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications. Both these medicines are likely to support top-line growth in the next few years. AbbVie expects the combined sales (risk-adjusted) of Skyrizi and Rinvoq to be more than $27 billion by 2027. These drugs have the potential to replace Humira.
In the popular inflammatory bowel disease (IBD) space, which includes two conditions, ulcerative colitis (“UC”) and Crohn’s disease (”CD”), Rinvoq's uptake continues to be very strong in both indications. Skyrizi is seeing tremendous performance in CD and expects rapid access for the UC indication, for which approval was received in the United States in June and in the EU in July. AbbVie expects Skyrizi and Rinvoq to double their respective sales in IBD indications in 2024.
Meanwhile, new migraine drugs, Ubrelvy and Qulipta/Aquipta, represent a combined $3 billion-plus peak sales opportunity.
Boosted by its new product launches, AbbVie expects to return to robust revenue growth in 2025 with a high single-digit CAGR through the end of the decade.
ABBV Boasts an Attractive Pipeline
AbbVie has several early/mid-stage pipeline candidates that have blockbuster potential. The company expects several regulatory submissions and approvals and key data readouts in the next 12 months.
For blood cancers and solid tumors, AbbVie has an exciting and diverse pipeline of promising new therapies like ABBV-383, a BCMA CD3 bispecific, in late-stage development for relapsed/refractory multiple myeloma and Teliso-V, a promising c-Met ADC, which has been developed for nonsquamous non-small cell lung cancer. AbbVie filed a biologics license application to the FDA for Teliso-V last week.
AbbVie and partner Genmab’s (GMAB - Free Report) Epkinly/Tepkinly (formerly epcoritamab) was approved for relapsed or refractory (r/r) third-line diffuse large B-cell lymphoma in the United States and EU in 2023 and for third-line r/r follicular lymphoma in the United States in June 2024 and in EU in August.
AbbVie on an Acquisition Spree This Year
AbbVie has been on an acquisition spree lately, which is strengthening its pipeline. It has signed several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience areas.
In 2024, it acquired smaller biotechs like Landos Biopharma and Celsius Therapeutics, which are making novel drugs for treating IBD. It also signed a license agreement with China’s FutureGen to develop a next-generation anti-TL1A antibody for IBD. Among the larger deals, AbbVie acquired ImmunoGen, which added antibody-drug conjugate Elahere, and Cerevel Therapeutics in 2024.
ABBV Stock Price Increase & Attractive Valuation
AbbVie stock has gained 27.5% so far this year compared withan increase of 20.2% for the industry. The stock has also outperformed the sector and the S&P 500 index, as seen in the chart below.
ABBV Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
The stock has also been consistently trading above its 50-day and 200-day moving averages since early July.
From a valuation standpoint, AbbVie appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 16.70 forward earnings, lower than 19.04 for the industry. The stock is cheaper than some other large drugmakers like Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
ABBV Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2024 earnings has risen from $10.86 to $10.87 per share over the past 60 days.For 2025, earnings estimates have risen from $12.12 to $12.14 per share over the past 60 days.
ABBV Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in ABBV Stock
AbbVie faces its share of headwinds like Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and slow market growth trends for fillers in the United States and China. However, AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks set to return to robust growth next year. Strong sales performance of drugs like Rinvoq, Skyrizi, Venclexta and Vraylar, coupled with significant contributions from newer drugs Ubrelvy, Elahere, Epkinly and Qulipta, should keep driving the company’s top line.
AbbVie expects its ex-Humira growth drugs, which cover more than 80% of its total sales, to outperform its initial expectations, driven by strong performance in immunology and oncology. It expects its ex-Humira growth platform to deliver nearly $6 billion of sales growth in 2024. Importantly, the erosion in Humira sales in the United States has been lower than management’s expectations. The stock has an attractive dividend yield of around 3.2%.
AbbVie’s reasonable valuation, rising estimates, a solid pipeline and the prospect of growth in sales and profits in 2025 are good enough reasons for those who own this Zacks Rank #3 (Hold) stock to stay invested. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Buying ABBV stock at the current attractive valuation can prove prudent for long-term investors.
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Should You Buy AbbVie Stock After Recent Parkinson's Study Success?
Last week, AbbVie (ABBV - Free Report) announced that a pivotal phase III study evaluating pipeline candidate tavapadon for treating early Parkinson's disease met the primary endpoint. The candidate was added to AbbVie’s pipeline with the August 2024 acquisition of Cerevel Therapeutics, a neuroscience drugmaker, for around $8.7 billion.
ABBV’s Positive Parkinson’s Study Data
In the TEMPO-1 study, patients who received two fixed doses (5mg and 15mg) of once-daily tavapadon, a D1/D5 dopamine receptor partial agonist, for 26 weeks achieved statistically significant improvement in the Movement Disorder Society - Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Parts II and III combined score. MDS-UPDRS is a scale used to evaluate various aspects of Parkinson's disease including non-motor and motor experiences of daily living and motor complications. The study also met a key secondary endpoint by demonstrating statistically significant improvement in experiences of daily living as measured by MDS-UPDRS Part II at week 26.
Another phase III study (adjunctive) on tavapadon, called TEMPO-3, met its primary endpoint. Top-line data from another phase III study, TEMPO-2, which is evaluating flexible doses of tavapadon, is expected by the end of the year.
The positive Parkinson’s study data comes as a breather for AbbVie after its other Parkinson’s candidate, ABBV-951, hit a roadblock, having faced FDA’s rejection twice. However, results from the remaining two studies will help determine tavapadon’s commercial opportunity.
Like tavapadon, AbbVie has several promising R&D programs in its pipeline with the potential to drive long-term growth. These include next-generation approaches in immunology, a focus on bispecifics, antibody-drug conjugates or ADCs as well as innovative therapies for neuropsychiatric and neurodegenerative disorders. Other than a strong pipeline, AbbVie also boasts some successful new medicines. However, it faces headwinds like biosimilar erosion of blockbuster immunology drug Humira, declining sales of Imbruvica and slowing sales of some aesthetic products.
Let us discuss these factors in detail to better analyze how to play the stock.
ABBV’s Successful New Drugs Skyrizi and Rinvoq
AbbVie lost patent protection for Humira in the United States in January 2023 and in the EU in 2018. Sales of Humira are declining due to loss of exclusivity and biosimilar erosion. However, AbbVie has successfully navigated Humira's loss of exclusivity by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well, bolstered by approvals in new indications. Both these medicines are likely to support top-line growth in the next few years. AbbVie expects the combined sales (risk-adjusted) of Skyrizi and Rinvoq to be more than $27 billion by 2027. These drugs have the potential to replace Humira.
In the popular inflammatory bowel disease (IBD) space, which includes two conditions, ulcerative colitis (“UC”) and Crohn’s disease (”CD”), Rinvoq's uptake continues to be very strong in both indications. Skyrizi is seeing tremendous performance in CD and expects rapid access for the UC indication, for which approval was received in the United States in June and in the EU in July. AbbVie expects Skyrizi and Rinvoq to double their respective sales in IBD indications in 2024.
Meanwhile, new migraine drugs, Ubrelvy and Qulipta/Aquipta, represent a combined $3 billion-plus peak sales opportunity.
Boosted by its new product launches, AbbVie expects to return to robust revenue growth in 2025 with a high single-digit CAGR through the end of the decade.
ABBV Boasts an Attractive Pipeline
AbbVie has several early/mid-stage pipeline candidates that have blockbuster potential. The company expects several regulatory submissions and approvals and key data readouts in the next 12 months.
For blood cancers and solid tumors, AbbVie has an exciting and diverse pipeline of promising new therapies like ABBV-383, a BCMA CD3 bispecific, in late-stage development for relapsed/refractory multiple myeloma and Teliso-V, a promising c-Met ADC, which has been developed for nonsquamous non-small cell lung cancer. AbbVie filed a biologics license application to the FDA for Teliso-V last week.
AbbVie and partner Genmab’s (GMAB - Free Report) Epkinly/Tepkinly (formerly epcoritamab) was approved for relapsed or refractory (r/r) third-line diffuse large B-cell lymphoma in the United States and EU in 2023 and for third-line r/r follicular lymphoma in the United States in June 2024 and in EU in August.
AbbVie on an Acquisition Spree This Year
AbbVie has been on an acquisition spree lately, which is strengthening its pipeline. It has signed several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience areas.
In 2024, it acquired smaller biotechs like Landos Biopharma and Celsius Therapeutics, which are making novel drugs for treating IBD. It also signed a license agreement with China’s FutureGen to develop a next-generation anti-TL1A antibody for IBD. Among the larger deals, AbbVie acquired ImmunoGen, which added antibody-drug conjugate Elahere, and Cerevel Therapeutics in 2024.
ABBV Stock Price Increase & Attractive Valuation
AbbVie stock has gained 27.5% so far this year compared withan increase of 20.2% for the industry. The stock has also outperformed the sector and the S&P 500 index, as seen in the chart below.
ABBV Stock Outperforms Industry, Sector & S&P 500
The stock has also been consistently trading above its 50-day and 200-day moving averages since early July.
From a valuation standpoint, AbbVie appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 16.70 forward earnings, lower than 19.04 for the industry. The stock is cheaper than some other large drugmakers like Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
ABBV Stock Valuation
The Zacks Consensus Estimate for 2024 earnings has risen from $10.86 to $10.87 per share over the past 60 days.For 2025, earnings estimates have risen from $12.12 to $12.14 per share over the past 60 days.
ABBV Estimate Movement
Stay Invested in ABBV Stock
AbbVie faces its share of headwinds like Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and slow market growth trends for fillers in the United States and China. However, AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks set to return to robust growth next year. Strong sales performance of drugs like Rinvoq, Skyrizi, Venclexta and Vraylar, coupled with significant contributions from newer drugs Ubrelvy, Elahere, Epkinly and Qulipta, should keep driving the company’s top line.
AbbVie expects its ex-Humira growth drugs, which cover more than 80% of its total sales, to outperform its initial expectations, driven by strong performance in immunology and oncology. It expects its ex-Humira growth platform to deliver nearly $6 billion of sales growth in 2024. Importantly, the erosion in Humira sales in the United States has been lower than management’s expectations. The stock has an attractive dividend yield of around 3.2%.
AbbVie’s reasonable valuation, rising estimates, a solid pipeline and the prospect of growth in sales and profits in 2025 are good enough reasons for those who own this Zacks Rank #3 (Hold) stock to stay invested. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Buying ABBV stock at the current attractive valuation can prove prudent for long-term investors.