December 28, 2016
By Mark Terry, BioSpace.com Breaking News Staff
AbbVie has had a pretty good year, with an increase in revenue of about 15 percent in the first three quarters, and an overall improvement in earnings of 26 percent from the prior year. But the company hasn’t made big changes. In the last year, shares traded for a low of $51.18 on January 13, 2016, and a high of $67.39 on August 15. Shares are trading today for $62.49.
It faces some headwinds in the upcoming year. Keith Speights, writing for The Motley Fool, takes a look at three of them.
1. Biosimilars to Humira
Humira sales grew 11 percent in the third quarter, year over year, and is responsible for 63 percent of the company’s total revenue. That’s a good thing, but a lot of companies are now developing biosimilars to the drug, which has the potential to nibble away at its dominance.
There are also biosimilars to AbbVie’s other drugs, Enbrel and Remicade, but the company’s chief financial officer, William Chase, has said they haven’t had a big effect on Humira sales. However, Biogen is expected to have a biosimilar approved in Europe for Humira next year, and this seems to be a company and an area where AbbVie might suffer.
2. Other rivals
If Humira is their chief concern, it’s not the only one. Its hepatitis C (HCV) drug, Viekira, never really got much traction in the U.S. market, and with Merck ’s launch this year of Zepatier, is struggling even more.
And AstraZeneca is hoping to get its acalabrutinib approved in the U.S. to treat B-cell cancers sometime in 2017, which would go head-to-head with AbbVie’s Imbruvica. In a Phase I/II trial in patients with relapsed/refractory chronic lymphocytic leukemia, acalabrutinib had a better safety profile than Imbruvica.
Speights writes, “If AstraZeneca wins approval, AbbVie could have a real fight on its hands. The company is fully aware of the potential threat from acalabrutinib and is moving to quickly advance Imbruvica into other indications to stay ahead of AstraZeneca.”
3. Pipeline
AbbVie has a solid dozen late-stage programs. It expects to submit Elagolix for approval to treat endometriosis in 2017, and also hopes for approval for its next-generation HCV treatment. Three clinical trials data of its autoimmune drug risankizumab will also be presented, in addition to additional readouts from clinical trials for new indications for Imbruvica and Venclexta. Speights writes, “The perennial risk for AbbVie (and any other drugmaker, for that matter) is from problems with pipeline candidates. Regulatory agency rejections and late-stage clinical failures present the biggest threats.”
Big approvals could mean big gains, with big failures being the reverse. Speights thinks the company’s pipeline is very promising, but the biggest concern is the threats to Humira. “The company still depends so heavily on this one product that any bumps in the road make a big difference to its bottom line…. Even with these real risks, AbbVie should continue to be a solid pick for investors—at least while the company can stave off competition to Humira in the U.S.”
