Strong immunology and neuroscience sales fueled AbbVie’s latest quarterly beat as the pharma’s stock continues to hit all-time highs.
AbbVie beat third quarter sales and earnings expectations and raised its full-year profit outlook Friday, powered by its immunology blockbusters and growing neuroscience business. Meanwhile, CEO Rob Michael said the company has plenty of capacity for more acquisitions but signaled a preference for bolt-on transactions over another megadeal like AbbVie’s $63 billion Allergan buy in 2020.
Both Q3 sales and earnings per share (EPS) came in above consensus estimates, with sales hitting $17.4 billion and EPS clocking in at $3.82.
The results prompted the pharma to raise its full-year EPS guidance from a range of $13.76–13.96 to $13.95–$13.99.
“Another beat and raise quarter should keep the AbbVie train rolling,” Guggenheim analysts wrote Friday before the company’s earnings call. Most of AbbVie’s key franchises came in at or slightly above expectations, according to the analysts.
The quarter adds to AbbVie’s momentum on Wall Street, continuing the pharma’s trend of trading at an all-time high. As of mid-morning Friday, AbbVie was trading at $294 per share.
Unsurprisingly, AbbVie’s immunology franchise drove the beat, bringing in $9.17 billion—16% year-over-year growth and aligning with consensus estimates. Blockbuster Skyrizi has grew 23% year-over-year to $5.7 billion. The pharma raised its full-year guidance for Skyrizi for the third time this year, now projecting $21.8 billion in sales, AbbVie Chief Commercial Officer Jeffrey Stewart said on the Friday investor call.
Meanwhile, autoimmune blockbuster Rinvoq experienced 24% growth to rake in $2.7 billion in the third quarter, modestly beating estimates and more than offsetting Humira’s 31% year-over-year erosion, according to William Blair analysts.
The most notable beat, according to William Blair, was AbbVie’s neuroscience portfolio, which recorded 19% year-over-year growth at $3.4 billion in Q3 revenue.
“In neuroscience, we’re on track to deliver growth of 20% this year, which has made us the industry leader,” Michael said on Friday’s call.
The neuroscience beat was fueled in part by antipsychotic Vraylar, with global sales topping $1 billion, reflecting a 14% year-over-year increase. Other contributors included a 100% jump for Parkinson’s disease drug Vyalev, 38% growth for migraine prevention pill Qulipta and a 27% rise for migraine treatment Ubrelvy.
Not every AbbVie portfolio shared in the gains, however. The pharma’s aesthetics franchise performed slightly below expectations, with Juvederm filler sales declining 12%.
Still, Michael pointed to AbbVie’s existing strength to drive growth into the next decade and give the company room to chase deals.
“Given that our existing products or pipeline give us a clear line of sight to strong, durable growth into the 2030s, we have ample financial capacity to pursue the deals we’re interested in,” he said on the call when asked about M&A strategy.
“Now, I would expect these to be more bolt-on additions versus a large transformational deal like Allergan, and that’s because our business already has good breadth,” the CEO explained. “For us, it’s really more about adding further depth to these areas to drive that long-term growth.”
While AbbVie has one of pharma’s highest net debt balances—around $60 billion—Leerink Partners believes the company has plenty of leverage to execute.
In September, Michael spoke at the Morgan Stanley Annual Global Healthcare Conference, saying that AbbVie has “plenty of capacity to be able to continue to execute deals, whether that is an early-stage opportunity that’s going to drive long-term growth, a late-stage asset or even on market.”
