2017 revenue: $28.22 billion
2016 revenue: $25.63 billion
Headquarters: North Chicago, Illinois
AbbVie had a monster year in 2017, leading the industry in stock price movement. Behind the showing was the megablockbuster Humira, the world's bestselling med and one that continues to churn out record sales as it sidesteps would-be competition.
Humira turned in $18.4 billion in 2017, and don't expect it to slow down any time soon. AbbVie recently struck a patent settlement with Samsung Bioepis to make sure the biosim developer's U.S. partner, Merck & Co., can't launch before 2023. The deal followed a similar contract with Amgen. And that's expected to push Humira's annual sales past the $20 billion mark.
Jefferies analyst Ian Hilliker said after the deals were announced that he believes it's "increasingly unlikely" that other biosim developers will be able to negotiate for U.S. launch dates earlier than 2023. Jefferies is predicting global Humira sales will peak next year at $20.9 billion.
To put it into context for AbbVie, Humira generated 65% of the company's total revenue last year. The company boasts 100 patents on the med and has worked to defend its key drug against potential biosimilar competitors.
But like many other drugs that lead pharma's sales charts, price hikes have played a big role in Humira's growth. The company has more than doubled the med's price in recent years, and a 9.7% hike in January could add $1.2 billion to this year's U.S. healthcare costs, an analyst wrote. In 2016, the company was among a group of drugmakers that generated 100% of earnings growth through price hikes, according to Credit Suisse.
During 2017, AbbVie's share prices soared 54%, more than doubling its market cap to $154 billion. The Illinois drugmaker led large pharma companies by share price gain during the year, according to a report from EP Vantage.
AbbVie faced some controversy in 2017, when execs reportedly told Leerink Partners analyst Geoffrey Porges they considered backing away from a pledge CEO Richard Gonzalez had made to limit price increases to under 10%, and just once a year; the company denied the analyst's view.
As with everything else, Humira's dominance will eventually come to an end. Though it has years now to prepare for that, AbbVie is working on advancing other products, notably the cancer drugs Imbruvica and Venclexta. In his note, Porges wrote that AbbVie believes it can generate $10 billion to $12 billion with those treatments. The drugmaker expects other drug programs to enter the oncology fray through "internal and external sources," according to the analyst's report.
Neurology, the third component of AbbVie's strategy, should start making meaningful contributions in the middle of the next decade, the executives told Porges.
AbbVie is a major winner from the Trump administration's tax changes, too—probably the biggest winner in pharma. Shortly after the changes went through, company execs said they're expecting a staggeringly low tax rate of 9% for this year. Around the same time, the company announced it's buying back $10 billion in shares. Also with the savings, the company said it plans to spend $2.5 billion on U.S. capital projects, accelerate pension funding and donate $350 million to charity, along with boosting its dividend.