AbbVie Profit Beats Analysts’ Estimates in First QuarterDrew Armstrong
AbbVie Inc. may reap another $1.5 billion in new annual sales of Humira, the rheumatoid arthritis drug that makes up half its revenue, as new uses for the medicine are approved, the company said.
First-quarter sales of Humira increased 16 percent from a year earlier, helping the North Chicago, Illinois-based drugmaker report earnings and revenue today that beat analyst estimates. The quarter’s results were the first since AbbVie was split from parent Abbott Laboratories.
“We expect new indications to add $1.5 billion in peak-year sales,” AbbVie Chief Financial Officer Richard Gonzalez said today on a conference call. The company is seeking new uses for the drug in other immune and inflammatory diseases, even as new competitors enter the market. “Humira currently offers the broadest label in the category,” he said.
AbbVie is also trying to develop medicines that will diversify its product line beyond Humira, which generated $9.27 billion last year and makes up about 50 percent of AbbVie’s sales. The company’s dependence on Humira isn’t a major concern yet given the biotechnology drug’s strength in the market, said Jeffrey Holford, an analyst at Jefferies Group LLC who has a buy rating on AbbVie’s shares.
The drugmaker “has patent extension and reformulation strategies to prevent or delay biosimilars entering the market when the initial molecule patents expire,” Holford said in a note to clients.
AbbVie rose 3.6 percent to $45.84 at 4 p.m. New York time. The stock had gained 34 percent this year, when it began trading on the open market in January. AbbVie reaffirmed its full-year profit forecast of $3.03 a share to $3.13 a share excluding certain items.
First-quarter earnings excluding one-time items of 68 cents a share beat by 1 cent the average of 10 analysts’ estimates compiled by Bloomberg. Net income was $968 million, or 60 cents a share, the company said in a statement. Revenue was $4.33 billion, beating analysts’ estimates of $4.3 billion.
AbbVie has been expanding Humira’s use with new indications in the U.S. for other immune system and inflammatory diseases, including psoriasis and ulcerative colitis. U.S. sales of the drug increased 24 percent, largely driven by the additional uses, the company said.
As other company medicines lose patent protection in the primary care area, the drugmaker is focusing on treatments for smaller populations with significant unmet medical needs, Chief Financial Officer William Chase said in January. AbbVie plans to fire its cardiology sales force, said a person familiar with the matter earlier this month, as drugs in that portfolio face generic competition.
AbbVie’s experimental hepatitis C therapy is the closest of its major experimental compounds to reaching the market. The combination of drugs, if approved, is likely to face competition from therapies being developed by Gilead Sciences Inc. and Bristol-Myers Squibb Co.
“We would expect a very early 2015 launch,” John Leonard, the company’s chief scientific officer, said on the conference call today. “We’re working as fast as we can. It’s a very competitive space.”
Other therapies in development include medicines to treat conditions such as Parkinson’s, a nervous system disorder, and endometriosis, a disease of the uterus.
Elagolix, the endometriosis drug, is in the last of three phases of clinical trials usually required before regulatory approval. AbbVie also is researching the medicine for uterine fibroids, and the treatment is in late mid-stage trials for that indication.
The company also has a drug, ABT-719, to treat the rapid failure of the kidneys. The compound may enter the final phase of trials late next year, AbbVie said.