13. AbbVie ($ABBV)
2014 revenue: $19.96 billion
2013 revenue: $18.79 billion
|AbbVie CEO Richard Gonzalez|
AbbVie, from its creation from a spinoff, has taken steps to move beyond supporting itself primarily off the massive sales of rheumatoid arthritis powerhouse Humira. But having had its game-changing M&A play for Shire ($SHPG) tripped up by tax rule changes, the North Chicago, IL-based drugmaker was left riding that same horse hard for the year.
It is not that Humira isn't paying off; it rang up $11 billion in global sales last year. It is just that the drug's days are numbered. There is a biosimilar in India from local drugmaker Zydus Cadila, and more importantly, it loses its U.S. patent protection in 2016.
AbbVie won admittance into the rapidly expanding market for oral, interferon-free hepatitis C treatments, with approval of Viekira Pak late in the year, but even that has not been the prize it had hoped for. It came to market in December, a year after Gilead Sciences ($GILD) had been sucking up market share, first with hep C fighter Sovaldi, then with its own combo, Harvoni. That has left AbbVie needing to discount its product. It also negotiated an exclusive arrangement with Express Scripts ($ESRX) at a discount of its lower retail price, sparking a price war with Gilead that is likely to dampen revenues for both. In a few weeks in Q4, AbbVie sold nearly $50 million worth of its hep C treatment, and it is projected to generate $2.5 billion this year, but that compares to the $12.4 billion that Gilead's two hep C treatments generated in 2014.
AbbVie had hoped the Viekira approval would be the icing on the cake in a year in which it made a major buy to immediately expand its portfolio beyond Humira. It was on the cusp of a $55 billion deal for specialty drugmaker Shire, a so-called tax inversion that would have also lowered its tax rate, but tax changes in the U.S. persuaded AbbVie it was no longer worth that price.
Analysts are enthusiastic about the results that AbbVie's candidate for treating non-small cell lung cancer has been showing. But many think AbbVie needs to find another M&A target. Some even speculate that if it doesn't, the drugmaker might end up a target of M&A itself.
-- Eric Palmer (email | Twitter)
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