Never mind that AbbVie’s hep C revenues continued to miss the mark in Q1: It had best-seller Humira to bail it out, and the way company execs see it, that’s a good thing.
On Thursday, the Illinois drugmaker reported quarterly sales of $5.96 billion that nailed consensus estimates of the same amount, thanks in large part to a $151 million beat on U.S. sales for Humira. The blockbuster med raked in $3.58 billion in worldwide revenue for the period, smoking analysts’ $3.49 billion forecast; its home market generated $2.20 billion of that haul.
And it was a good thing for AbbVie ($ABBV) that they did. Hep C combo med Viekira--which has been fighting stiff competition since it won FDA approval in late 2014--has struggled in the past, and Q1 was no different. Globally, its $414 million sales tally missed expectations by about $111 million. But it lost most of that ground in the U.S., where its $125 million underperformed forecasts by nearly $70 million.
The reason? Merck ($MRK), a new player on the scene with recently approved Zepatier, has been “more aggressive than we anticipated from a pricing standpoint,” CEO Richard Gonzalez told investors on a conference call, and that’s “caused us to lose price, but also volume,” he acknowledged. All things considered, he no longer expects the med to hit $2 billion in 2016 sales, and he painted $1.6 billion as a more realistic picture.
Still, the way Gonzalez sees it, investors shouldn’t worry. “You should look at this quarter as an example,” he told them, pointing out that revenue still managed to fall in line with expectations despite Viekira’s weak numbers. AbbVie turned out a “good balanced performance” across a range of different assets, he said.
Analysts haven’t all been quite so convinced, especially considering that IP challenges and up-and-coming biosimilar competition are flying at Humira from all directions. AbbVie, though, has maintained that its pipeline should enable it “to grow through even the most bear case possible for Humira biosimilar erosion,” which it doesn’t expect to play out, Evercore ISI analyst Mark Schoenebaum wrote in a note to clients.
And AbbVie also made moves on Thursday to expand its pipeline further, agreeing to nab California cancer drugmaker Stemcentrx for $5.8 billion. The transaction will bolster an oncology portfolio that currently stars forecast-beating Imbruvica, a blood-cancer med the company got its hands on through last year’s $21 billion Pharmacyclics buyout.
As a result of its latest buy, the drugmaker now expects to see its adjusted diluted EPS fall between $4.62 and $4.82 for the year, down from a $4.82 to $5.02 range. But it doesn’t expect any big acquisitions to alter that number further.
“We have a lot of things going right now, and we’ve filled a lot of the needs we have,” Gonzalez said. “I would not expect that we would go out and do another significant transaction--even a transaction of this size.”
- read AbbVie's release
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