) reported third quarter 2013 earnings of 82 cents per share,
beating the Zacks Consensus Estimate of 78 cents. Revenues
increased 3.3% to $4.658 billion in the third quarter of 2013,
above the Zacks Consensus Estimate of $4.512 billion. Currency
movement negatively impacted revenues by 0.3%. Revenues increased
despite the loss of exclusivity on TriCor/Trilipix.
Including one-time items, third quarter 2013 earnings came in
at 60 cents per share, down 40.6%.
The Quarter in Detail
Key drug, Humira, recorded growth of 19.1% with revenues
coming in at $2.77 billion. U.S. sales increased 22.3% ($1.389
billion). Ex- U.S. sales increased 16.1% to $1.381 billion.
TriCor/Trilipix revenues fell 88.3% to $39 million.
Other products that performed well included Synthroid (up
22.9% to $161 million), Creon (up 9.8% to $101 million), Zemplar
(up 9.9% to $100 million) and Duodopa (up 24.3% to $46
AbbVie said that adjusted SG&A was 26.1% of sales in the
third quarter - this reflects the company's investment in its
Adjusted R&D was 15.2% of third quarter 2013 sales,
reflecting the company's investment in its mid- and late-stage
pipeline as well its efforts to expand Humira's label. Humira is
currently in phase III studies in patients suffering from
hidradenitis suppurativa (HS), a chronic inflammatory skin
AbbVie's pipeline represents significant potential - earlier
this year, the company had said that it is targeting 15
regulatory approvals between 2013 and 2017. The company's
late-stage pipeline includes several compounds or indications in
phase III development targeting therapeutic areas like hepatitis
C, immunology, multiple sclerosis and endometriosis.
Phase III results on the company's triple direct-acting
antivirals (3-DAAs) plus ribavirin regimen for the treatment of
hepatitis C virus (HCV) infection should start coming out later
this year. Positive data would allow the company to file for
approval in the second quarter of 2014.
Outlook Revised Again
Based on its strong performance so far this year, AbbVie
raised the lower end of its 2013 earnings outlook. The company
now expects earnings in the range of $3.11 to $3.13 per share
(old guidance: $3.07 to $3.13 per share). The Zacks Consensus
Estimate of $3.13 is at the higher end of the guidance range.
We believe AbbVie is poised for strong growth. Humira should
continue driving sales thanks to factors like additional
indications, increasing penetration, geographic expansion, and
share gains. New indications could boost peak sales potential for
Humira by another $1.5 billion.
2013 and 2014 represent a transition period for the company
which is facing generic competition for its lipid franchise -
TriCor, TriLipix and Niaspan.
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.
Companies that currently look attractive include
Johnson & Johnson
). While Roche is a Zacks Rank #1 (Strong Buy) stock, Johnson
& Johnson and Bayer are Zacks Rank #2 (Buy) stocks.
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