AbbVie turns to newer immunology drugs as blockbuster Humira faces lower-cost competition – MarketWatch
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Earnings Outlook
Published: July 25, 2023 at 10:41 a.m. ET
Investors look for signs that Skyrizi, Rinvoq can take the baton as Humira sales falter
AbbVie management expects combined sales of two newer immunology drugs to surpass Humira’s peak sales by 2027, CEO Richard Gonzalez said early this year.
Win McNamee/Getty Images
[]As AbbVie Inc. ABBV, -1.08% looks to plug holes in the sales of its mega-blockbuster arthritis drug Humira, newer immunology drugs will be key to the pharmaceutical giant’s future growth, analysts say.
[]When AbbVie reports second-quarter results Thursday morning, all eyes will be on sales of Humira, which has generated over $200 billion in sales over the past two decades to become one of the top-selling biopharmaceutical products of all time but faced its first biosimilar competition early this year. Analysts expect Humira to generate about $13.8 billion in sales this year, down about 35% from 2022.
[]As Humira sales falter, investors and analysts are looking for signs that newer AbbVie drugs Skyrizi and Rinvoq can take the baton. All three drugs are used to treat some of the same conditions, such as Crohn’s disease and psoriatic arthritis. AbbVie announced Tuesday morning that Canada’s health regulator has approved Rinvoq for treatment of adults with moderate to severe ulcerative colitis.
[]Among all the big pharma companies reporting earnings in the coming weeks, AbbVie results hold some of “the greatest potential for thesis shifting revelations,” as the trajectory of Humira, Rinvoq and Skyrizi will have a major impact on the 2024 outlook, Goldman Sachs analysts wrote in a recent research note.
[]AbbVie’s second-quarter results come just a few weeks after a slew of new Humira biosimilar competitors entered the market on July 1–some with hefty discounts to Humira’s list price. In early June, for example, Mark Cuban Cost Plus Drug Company said it would offer the Coherus BioSciences Inc. CHRS, +0.45% biosimilar Yusimry to customers at a 90% discount to the Humira list price.
[]The lower-cost Humira competition has weighed on AbbVie’s stock. The shares are down 11.8% in the year to date, while the S&P 500 has gained 18.9%.
[]AbbVie has already indicated that it has had some success maintaining Humira’s position on formularies–the lists of covered prescription drugs maintained by health insurance plans and pharmacy benefit managers. With formulary access relatively secure, much of the near-term drop in Humira sales may stem from price concessions, analysts say. But with even more Humira biosimilars set to enter the market later in the year, the competition could have more impact on sales volume, BMO Capital Markets analysts wrote in a report last week. The analysts forecast Humira sales will total $3.77 billion in the second quarter, below the FactSet consensus of $3.95 billion.
[]Skyrizi and Rinvoq, meanwhile, are both showing strong prescription trends, the BMO analysts wrote, and Skyrizi is continuing to claim a growing share of the plaque psoriasis market. Rinvoq in May received an expanded U.S. Food and Drug Administration approval, as a once-daily pill for adults with moderate to severe Crohn’s disease.
[]Combined, AbbVie management expects Skyrizi and Rinvoq in 2027 will surpass the $21 billion in peak revenues generated by Humira, “with continued significant growth anticipated in the following years,” CEO Richard Gonzalez said at an industry conference early this year.
[]Analysts also see growth potential in AbbVie’s neuroscience business, particularly with the antipsychotic drug Vraylar, which got an FDA label expansion last year as a treatment for major depressive disorder, in combination with antidepressants.
[]Second-quarter strength in AbbVie’s aesthetics business may also come as a positive surprise to investors on Thursday, some analysts say. Sales of AbbVie’s Botox and Juvederm, a dermal filler, beat analyst expectations in the first quarter. Now, Google search trends point to growing interest in the treatments, and “we believe market conditions may be steadily picking back up” after a post-pandemic lull, the Goldman Sachs analysts wrote.
Raytheon’s stock has worst selloff in more than 3 years after company says some Pratt & Whitney engines need to be removed from service
[]Raytheon’s stock tumbled 10% on Tuesday after the company said it needs to remove certain Pratt & Whitney jet engines from service.
[]Eleanor Laise is a healthcare reporter for MarketWatch and is based in Washington.
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