With biosimilars makers eager to grab a piece of Humira's $12.5 billion-plus revenue, copies of AbbVie's ($ABBV) blockbuster are on their way. What analysts disagree on, though, is when they'll arrive and how long it'll take them to make their presence known--and a pair of UBS analysts, for one, thinks the Illinois pharma has some marketing maneuvers up its sleeve to minimize their impact.
According to UBS analysts Marc Goodman and Ami Fadia, should the entry of Humira biosimilars put branded sales on a serious downswing, AbbVie has some room to pare down costs. Right now, it ranks as the No. 2 ad spender in Big Pharma, and last year it shelled out 56% of its budget--$203.2 million--on advertising the drug.
"The opportunity for management to cut Humira marketing spend in a downside scenario is only just starting to resonate with some investors," they wrote, as quoted by Barron's.
On top of that, management has in place significant rebates and discounts for managed care contracts that "will create a challenge for biosimilars."
With the rheumatoid arthritis giant driving a hefty portion of the company's top-line success, it's no surprise AbbVie is readying its defenses. While the company made some recent moves to diversify its business--like ponying up $21 billion for Imbruvica-maker Pharmacyclics--it's still largely reliant on its top dog.
All things considered, Goodman and Fadia still consider AbbVie their "favorite large-cap pharma name"--but not everyone agrees with them. Tuesday, Citi's Andrew Baum reiterated the sell rating issued when his firm launched coverage of the company more than four months back, pointing to Amgen ($AMGN), which filed two Humira patent challenges with the U.S. Patent Trial and Appeal board last week.
After three years on the market, biosimilars will grab 36% of Humira market share, including 25% of patients who'd already been using the branded drug, Baum said in February, predicting Humira revenues would decline from a peak $16 billion in 2017 to just $6 billion in 2022.
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