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AbbVie's (ABBV) Q1 Earnings and Sales Surpass Estimates

AbbVie Inc. ABBV reported earnings of $2.42 per share in the first quarter, comfortably beating the Zacks Consensus Estimate of $2.27 and came ahead of the guided range of $2.28-$2.30. Earnings rose 16.3% year over year.

Meanwhile, the company’s revenues of $8.62 billion beat the Zacks Consensus Estimate of $8.44 billion. Meanwhile, the top line improved 10.1% year over year.

The company’s top- and bottom-lines both benefited from stocking benefit related to the COVID-19 pandemic.

Shares were up 0.9% in pre-market trading. AbbVie’s shares have declined 7.2% so far this year compared with the industry’s 1.7% decrease.

Quarter in Detail

Key drug Humira recorded sales increase of 6.4% on an operational basis with revenues from the same coming in at $4.7 billion. Sales in the United States climbed 13.7% to $3.66 billion. However, Humira sales in the ex-U.S. markets were down 12.8% on an operational basis and 14.9% on a reported basis to $1 billion. International sales were affected by the launch of several direct biosimilar drugs in Europe by other pharma companies including Amgen, Sandoz and Biogen.

New immunology drugs Skyrizi and Rinvoq registered sales of $300 million and $86 million, respectively. In the previous quarter, Skyrizi and Rinvoq recorded sales of $216 million and $33 million, respectively. Strong sequential growth in sales of both drugs in the past couple of quarter demonstrates strong uptake.

While Skyrizi (risankizumab) was approved in the United States and Europe for plaque psoriasis in April 2019, Rinvoq (upadacitinib) won the FDA nod in August 2019 for moderate-to-severe rheumatoid arthritis ("RA"). Rinvoq was also approved in the EU during December 2019.

AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales surged 32.3% on an operational basis to $1.55 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.

First-quarter net revenues from Imbruvica were $1.2 billion, up 32.3% year over year operationally. U.S. sales of Imbruvica grossed $966 million, up 25% from the year-ago figure. AbbVie’s share of profit from International sales of the drug rose 37.9% to $266 million. Notably, AbbVie shares international profits earned from Imbruvica with Johnson & Johnson JNJ.

The company’s leukemia drug Venclexta generated revenues of $317 million in the reported quarter, which more than doubled year over year. AbbVie has partnership with Roche RHHBY for Venclexta.

Other products that delivered an encouraging performance include Duodopa and Kaletra, which recorded revenue growth of 14% and 11.4%, respectively on an operational basis. Creon and Synthroid, generating sales only from U.S. markets, witnessed a revenue increase of 21.9% and 12.3%, respectively. Orilissa sales more than doubled year over year.

Chronic hepatitis C virus products recognized sales worth $564 million, down 30.2% operationally year over year. Sales of Mavyret were $559 million, down 28.6% operationally.

Other drugs that recorded sales decline include Synagis, AndroGel and Sevoflurane,  falling 4.1%, 89.1% and 12.2%, respectively, on an operational basis during the quarter.

Adjusted SG&A expenses increased 2.3% to $1.6 billion while R&D expenses were $1.2 billion in the first quarter, rising 2.9% year over year. Adjusted operating margin represented 49.8% of sales.

Closing in on Allergan Acquisition

AbbVie is set to acquire Botox maker Allergan AGN in a cash-and-stock deal of $63 billion.  In January, Allergan and AbbVie announced a definitive agreement to divest Allergan’s mid-stage candidate, brazikumab and marketed medicine, Zenpep to AstraZeneca and Nestle, respectively in connection with the pending merger. While AbbVie's pending acquisition of Allergan received European Commission's final approval last month, the deal is still under review with the United States Federal Trade Commission. The companies expect to close the deal this month.

2020 Guidance

AbbVie maintained its previous outlook for adjusted EPS to be in the range of $9.61-$9.71 for 2020 for the standalone company, which means excluding Allergan. The earnings guidance indicates a year-over-year increase of 8.1% at the mid-point. The Zacks Consensus Estimate for current-year earnings per share is pegged at $10.16.

The company will provide guidance for the combined entity following the close of Allergan acquisition.

AbbVie Inc. Price, Consensus and EPS Surprise

 

AbbVie Inc. Price, Consensus and EPS Surprise
AbbVie Inc. Price, Consensus and EPS Surprise

AbbVie Inc. price-consensus-eps-surprise-chart | AbbVie Inc. Quote

Zacks Rank

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

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