) reported fourth quarter 2013 earnings of 82 cents per share, a
penny short of the Zacks Consensus Estimate. Revenues slipped
1.8% to $5.111 billion in the fourth quarter of 2013, missing the
Zacks Consensus Estimate of $5.126 billion. Currency movement
negatively impacted revenues by 0.7%. Revenues were also impacted
by the loss of exclusivity on TriCor/TriLipix as well as the
performance of products like AndroGel, Kaletra and Zemplar.
Including one-time items, fourth quarter 2013 earnings came in
at 70 cents per share, down 28.6%.
Full year earnings were $3.14 per share, a penny below the
Zacks Consensus Estimate. Revenues grew 2.2% to $18.790 billion,
just short of the Zacks Consensus Estimate of $18.798
The Quarter in Detail
Key drug, Humira, recorded growth of 13.4% with revenues
coming in at $3.04 billion. U.S. sales increased 18.1% ($1.667
billion). Ex- U.S. sales increased 8.2% to $1.372 billion. Other
products that performed well included Synthroid (up 12.8% to $189
million), Creon (up 9.3% to $115 million) and Duodopa (up 20.1%
to $49 million).
TriCor/TriLipix revenues fell 85.4% to $29 million. Niaspan
sales declined 88.9% to $31 million.
AbbVie said that adjusted SG&A was 26.5% of sales in the
fourth quarter - this reflects the company's investment in its
Adjusted R&D was 15.6% of fourth quarter 2013 sales,
reflecting the company's investment in its mid- and late-stage
pipeline as well as its efforts to expand Humira's label.
AbbVie's pipeline represents significant potential - the
company's late-stage pipeline includes several compounds or
indications in phase III development targeting therapeutic areas
like hepatitis C virus (HCV), immunology, and endometriosis.
Guidance Lags Expectations
AbbVie expects 2014 earnings in the range of $3.00 to $3.10
per share on revenues of about $19 billion. The Zacks Consensus
Estimate of $3.17 is well above the guidance range. Meanwhile,
the Zacks Consensus Estimate for revenues is slightly above the
company's guidance at $19.2 billion.
HCV Data Overshadows Results
Along with reporting fourth quarter results, AbbVie announced
that it has completed its phase III HCV studies. The company
provided data from four additional studies that evaluated its
all-oral, interferon-free therapy with/without ribavirin (RBV) in
patients with chronic genotype 1 (GT1) HCV infection. The results
confirmed previously presented data and showed high sustained
virologic response rates 12 weeks post treatment (SVR12) and
The high rates of response and tolerability coupled with low
discontinuation rates are encouraging - AbbVie remains on track
to file for its HCV treatment early in the second quarter of
The company believes it could gain approval for its HCV
combination therapy this year itself.
AbbVie is going through a transition period with its lipid
franchise (TriCor, TriLipix and Niaspan) facing generic
competition. We expect 2014 to remain challenging as the company
absorbs the impact of the loss of exclusivity on the lipid
franchise. However, this year should be catalyst rich for AbbVie
as it continues to invest in its pipeline.
Even though AbbVie missed expectations in the fourth quarter,
we expect investor focus to remain on the HCV data presented by
AbbVie currently carries a Zacks Rank #3 (Hold). While we are
positive on AbbVie's strong late-stage pipeline, dividend yield
and growth strategy, we remain concerned about its dependence on
Humira. We believe AbbVie will continue pursuing in-licensing
deals and collaborations to boost its pipeline.
Some better-ranked stocks in the health care sector include
H. Lundbeck A/S
). While H. Lundbeck A/S and Medivation are Zacks Rank #1 (Strong
Buy) stocks, Allergan is a Zacks Rank #2 (Buy) stock.
ABBVIE INC (ABBV): Free Stock Analysis Report
ALLERGAN INC (AGN): Free Stock Analysis
MEDIVATION INC (MDVN): Free Stock Analysis
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