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AbbVie (ABBV) Stock Down as FDA Issues New Warning for Rinvoq

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AbbVie’s ABBV stock declined 7% on Wednesday to a three-month low as the FDA said that it will have to add a new warning on the label of its JAK inhibitor drug, Rinvoq (upadacitinib). The warning is about an increased risk of serious heart-related events, cancer, blood clots, and even death.

The FDA also asked for similar warnings to be added to the labels of other JAK inhibitor medicines like Pfizer’s PFE Xeljanz/Xeljanz XR, and Lilly LLY/Incyte’s INCY Olumiant, which are approved to treat certain chronic inflammatory conditions. The FDA’s decision followed its completed review of safety data from Pfizer’s post-marketing study, ORAL Surveillance, on Xeljanz in patients with rheumatoid arthritis (“RA”).

The FDA’s review of the final data from the study showed that patients treated with both low as well as high doses of Xeljanz experienced a higher rate of serious heart-related events such as heart attack and stroke, cancer, blood clots, and death compared to those treated with another class of drugs — TNF inhibitors. Previously, the FDA thought that only a higher dose of Xeljanz would increase such risks.

The FDA required the warnings to be added not just to Xeljanz’s label but also on Olumiant and Rinvoq even though no similar safety studies on these two medicines have been conducted. The FDA argued that since they share the same mechanism of action as Xeljanz, they may carry similar risks as identified in Xeljanz’s safety study.

AbbVie’s stock has risen 4.8% this year so far compared with an increase of 15.5% for the industry.

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In the United States, Rinvoq is only approved to treat the RA indication. The FDA had earlier delayed its decision on the supplemental biologics license application (sBLA) for Rinvoq in AD as well as for two other indications, active psoriatic arthritis and active ankylosing spondylitis in adults. The FDA cited the ongoing review of Pfizer’s post-marketing study on Xeljanz (discussed above) as the reason for all delays.

Rinvoq is a key new drug in AbbVie’s portfolio, which, along with another new drug, Skyrizi is gradually lowering AbbVie’s dependence on its main immunology medicine, Humira. AbbVie was expecting that with many new indications expected to be approved in the next couple of years, sales of these drugs could be higher and have the potential to replace Humira when generics are launched in 2023. AbbVie expects the combined revenues of these two drugs to be more than $15 billion by 2025. However, with new warnings on Rinvoq’s labels, AbbVie might not be able to meet its sales target for the drug.

However, it is not yet clear that patients will stop using Rinvoq just because of a new warning on the drug’s label. Also, Rinvoq accounts for around 3% of AbbVie’s sales and the company has several other drugs in its portfolio— including the blockbuster product, Botox acquired from the Allergan buyout — which can make up for lost Humira sales once it loses protection.

Rinvoq generated sales of $681 million in the first half of 2021. Rinvoq is also being reviewed in late-stage studies for Crohn’s disease, ulcerative colitis, and giant cell arteritis.

AbbVie currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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