AbbVie scores surprisingly good Q2 results but pipeline worries persist

July has been a tough month for AbbVie, marked by a stinging patent loss on its megablockbuster Humira and a negative verdict in the first bellwether case against its once-blockbuster testosterone drug AndroGel. Even the better-than-expected earnings announced today created some concerns among investors.

That's because the Illinois pharma can’t escape the burden presented by rheumatoid arthritis treatment Humira, which accounts for 60% of its sales and is the world’s top-selling drug. Sales of the drug rose 14% year-over-year during the quarter to $4.7 billion, beating analysts’ expectations, but the company itself has predicted that biosimilar competition will start taking a toll on sales next year. That has left investors desperate for signs of anything coming out of the company’s pipeline that will help make up for the impending loss.

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Some of AbbVie’s newer entries did do well during the quarter, to be sure. One standout was cancer drug Imbruvica, which was up nearly 43% to $626 million. That helped drive total revenues up 8% to $6.94 billion. Earnings rose 19% to $1.9 billion, or earnings per share of $1.42, which beat estimates by 2 cents.

But other key products underperformed expectations, including AbbVie’s hepatitis C drug Viekira Pak, down 46% to $225 million, and hormone treatment Lupron, which dropped 4% to $210 million.

With so much of AbbVie’s future top line reliant on Humira replacements, much of the discussion during the post-earnings conference call centered on two key pipeline assets to treat inflammatory diseases: risankizumab, an IL-23 inhibitor AbbVie is developing with Boehringer Ingelheim, and upadacitinib, a JAK1 inhibitor. During the quarter, the company announced positive phase 3 trial results on upadacitinib in RA, as well as good results in a phase 2 trial of risankizumab in Crohn’s disease.

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As one analyst pointed out at the beginning of the Q&A session, however, there are safety concerns with JAK inhibitors. In April, the FDA surprised Eli Lilly and Incyte with a complete-response letter on their JAK inhibitor to treat RA, baricitinib, in the wake of reports of deep venous thrombosis (DVT) and pulmonary embolism (PE) during late-stage trials. Michael Severino, M.D., executive VP of R&D and chief medical officer, pointed out that RA patients are at an increased risk of DVT and PE to begin with, and that the company is monitoring adverse events in its trials and is not concerned.

CEO Richard Gonzalez said he believes upadacitinib and risankizumab, along with Humira, present “significant opportunities” across a range of inflammatory diseases. The go-to-market strategy, he said during the call, will vary, but “generally speaking, we view this portfolio of assets … as the way that we will compete in the marketplace. Certainly we have the gold standard in product in Humira. … It’s really the flagship product,” he said, adding that he’s confident the drug will continue to hold a leadership position, despite the entry of biosimilars.

RELATED: Jury smacks AbbVie with $150M verdict in AndroGel's bellwether Low-T trial

As for AndroGel, its sales have been declining for quite some time—not surprising considering the increased warnings about cardiovascular side effects and the ongoing class-action lawsuit—and sales did decline 10% during the quarter to $154 million. On July 25, the jury in the case ruled that the company fraudulently misrepresented AndroGel and awarded $150 million in punitive damages to plaintiff Jesse Mitchell, who took the testosterone product and suffered a heart attack in 2012.

Gonzalez said during the earnings call that the company was surprised by the negative verdict. “We’ll see how the other [cases] play out,” he said. “There’s no fundamental change in how we view the liability of this based on this single case.” Some legal experts predict the verdict won’t survive an appeal, but AbbVie’s legal woes are far from over: A second bellwether AndroGel case filed against the company begins in September.