As Imbruvica loses steam, AbbVie takes $2.1B charge and points to CMS price negotiations

Sales of AbbVie and Johnson & Johnson’s leukemia blockbuster Imbruvica are taking a hit from the introduction of BeiGene’s transformative oral treatment Brukinsa.

But what about the impact of the Inflation Reduction Act? In August, Imbruvica was one of the 10 drugs identified by the Centers for Medicare & Medicaid Services (CMS) that will be subject to price negotiations in 2026.

On Friday, as AbbVie presented its third-quarter earnings, the company said that it has recorded a $2.1 billion impairment charge, based on “revised cash flows” for Imbruvica, which drops its carrying value in the United States to $1.8 billion.

“As we calculated the future cash flows, we looked at what we had assumed was a reasonable assumption on the price,” Scott Reents, AbbVie’s chief financial officer said in a conference call. “In terms of the negotiated price that we assume—we’re in the middle of these negotiations—it really wouldn’t be appropriate for us to talk about what that is.”

The CMS will send each company with a drug on the list an initial offer on Feb. 1 of next year, with negotiations continuing for six months. AbbVie will find out on Sept. 1, 2024, what the price will be, Reents said.

As for the third quarter of this year, AbbVie reported Imbruvica sales at $908 million, which was down 20% from the same period in 2022. For the first three quarters of the year, AbbVie’s Imbruvica sales were $2.7 billion, a 22% drop from the same period a year ago.

In BeiGene’s last quarterly report, in May, the company reported Brukinsa sales had more than doubled, to $211 million, with $139 million of that coming in the U.S.

A year ago, BeiGene revealed Brukinsa’s superiority over Imbruvica in a head-to-head trial in previously treated chronic lymphocytic leukemia (CLL) and small lymphotic lymphoma (SLL).

As for the company overall, AbbVie reported third-quarter revenue of $13.9 billion, a 6% decrease year over year. The decline wasn’t as much as the company expected, however, as it raised its revenue forecast for the year by $600 million. Since the drugmaker issued its initial guidance in February, AbbVie has increased the figure by $2 billion, chief operating officer Rob Michael noted.

AbbVie expected more erosion this year from its mega-blockbuster Humira, which is facing biosimilar competition in the U.S. for the first time. Humira sales came in at $3.55 billion in the quarter, a 36% year-over-year decline.

Humira’s quarterly sales peaked at $5.6 billion in the fourth quarter of last year before Amgen launched Amjevita in January. A flood of other biosimilar versions of Humira entered the market this summer.

Price cuts—as opposed to volume declines—have accounted for most of the erosion, Michael said, and it will continue as such in 2024. He added that $7 billion was a “reasonable expectation,” for Humira sales next year, though the company has yet to divulge its forecast. Through the first three quarters, Humira has generated $11.1 billion in sales.

Helping compensate for the loss of Humira sales have been AbbVie’s highly touted immunology follow-ons Skyrizi and Rinvoq. Sales of both products increased by more than 50% in the quarter. In the first three quarters, the duo has combined for sales of $8.1 billion.