AbbVie Inc.'s Future Growth Relies on Immunology Drugs

As AbbVie Inc. looks to address the declining sales of its mega-blockbuster arthritis drug Humira, industry analysts are pointing to newer immunology drugs as crucial for the pharmaceutical giant's future growth.

Humira Sales Decline Prompts Focus on New Drugs

When AbbVie reports its second-quarter results, there will be significant attention on the sales performance of Humira. Despite generating over $200 billion in sales over the past two decades and establishing itself as one of the best-selling biopharmaceutical products of all time, Humira faced competition from biosimilars earlier this year. Analysts predict that Humira sales will reach approximately $13.8 billion this year, representing a decline of about 35% from 2022.

Newer Drugs Skyrizi and Rinvoq Gain Importance

With the decline in Humira sales, investors and analysts are keeping a close eye on AbbVie's newer drugs, Skyrizi and Rinvoq, as potential successors. All three drugs are used to treat similar conditions such as Crohn's disease and psoriatic arthritis. In a recent research note, Goldman Sachs analysts emphasized that AbbVie's second-quarter results will have a significant impact on the company's outlook for 2024, hinging on the performance of Humira, Rinvoq, and Skyrizi.

Rinvoq Receives Approval for Ulcerative Colitis Treatment

Adding to the potential of AbbVie's newer drugs, it was announced on Tuesday that Canada's health regulator has approved Rinvoq for the treatment of adults with moderate to severe ulcerative colitis.

Impact of Lower-Cost Biosimilar Competition

AbbVie's second-quarter results come after the recent entry of several biosimilar competitors for Humira into the market, some of which offer substantial discounts compared to Humira's list price. For example, Mark Cuban Cost Plus Drug Company plans to offer the Coherus BioSciences Inc. biosimilar Yusimry at a 90% discount to Humira's list price. This increased competition has had a negative impact on AbbVie's stock, resulting in an 11.8% decline year-to-date, while the S&P 500 has seen an 18.9% gain.

In summary, AbbVie's focus on newer immunology drugs like Skyrizi and Rinvoq becomes crucial as the sales of Humira face ongoing challenges from biosimilar competitors. The company's second-quarter results will provide insights into the potential for future growth and its impact on the pharmaceutical industry landscape.

AbbVie's Strategy Aims for Growth and Diverse Revenue Streams

AbbVie, a leading pharmaceutical company, has successfully maintained the position of its flagship drug Humira on formularies – the lists of covered prescription drugs managed by health insurers and pharmacy benefit managers. While there have been some price concessions impacting Humira sales in the near term, the real challenge lies ahead as more biosimilar versions of Humira enter the market.

According to analysts at BMO Capital Markets, the competition from these biosimilars is expected to have a significant impact on sales volume in the coming months. Their recent report forecasts Humira sales of $3.77 billion in the second quarter, slightly below the FactSet consensus of $3.95 billion.

On a brighter note, two other drugs from AbbVie's portfolio, Skyrizi and Rinvoq, are showing promising prescription trends. Skyrizi has been particularly successful in capturing a growing share of the plaque psoriasis market. Furthermore, Rinvoq recently received expanded approval from the U.S. Food and Drug Administration as a once-daily treatment for adults with moderate to severe Crohn’s disease.

This success is part of AbbVie's larger strategy to diversify its revenue streams beyond Humira. CEO Richard Gonzalez revealed at an industry conference earlier this year that he expects Skyrizi and Rinvoq to surpass Humira's peak revenues of $21 billion by 2027, with continued significant growth anticipated in the following years.

In addition to these developments, analysts also see promising growth potential in AbbVie's neuroscience business. Vraylar, an antipsychotic drug, received FDA approval last year for the treatment of major depressive disorder when used in combination with antidepressants.

Another area of potential growth is AbbVie's aesthetics business. Sales of Botox and Juvederm, both popular aesthetic treatments, exceeded analyst expectations in the first quarter. Now, with growing interest indicated by Google search trends, analysts believe that the aesthetics market may be steadily recovering from the post-pandemic lull.

AbbVie's proactive approach to expanding its product portfolio and capitalizing on emerging market trends positions it for continued growth and success in the pharmaceutical industry.