AbbVie Inc. ABBV posted better-than-expected third-quarter 2018 earnings while its revenues missed estimates by a slight margin. Moreover, the company raised its expectations for 2018 bottom line. Shares rose almost 3.4% in pre-market.
Shares of AbbVie have declined 17.1% in a year's time against the industry 's 5% rise.
The biopharmaceutical company reported earnings of $2.14 per share in the third quarter, beating the Zacks Consensus Estimate of $2.01. The figure surged 51.8% year over year. Earnings per share also exceeded the guided range of $2.00 and $2.02.
The company posted revenues of $8.24 billion in the quarter under review, missing the Zacks Consensus Estimate of $8.26 billion. However, the top line increased 17.8% year over year. Excluding a 0.7% favorable impact from foreign exchange rate fluctuations, operational revenues rose 18.5%. Revenues growth was higher than the projection of approximately 17% on an operational basis.
Quarter in Detail
Key drug Humira recorded sales growth of 9.8% on an operational basis with revenues from the same coming in at $5.1 billion. Sales in the United States increased 12.5% to $3.5 billion, better than expectations. Humira sales in the ex-U.S. markets were up 4.2% on an operational basis and 1.8% on reported basis to $1.58 billion, almost in-line with the projected figure of $1.6 billion.
Third-quarter net revenues from Imbruvica were $972 million, up 41.3% year over year. U.S. sales of Imbruvica grossed $812 million, up 41.5% from the year-ago figure and also higher than the guided figure of $725 million. AbbVie logged $160 million of international profit sharing with Johnson & Johnson JNJ .
The company's leukemia drug, Venclexta, brought in revenues of $96 million, up more than 100% year over year.
Other products that delivered an impressive performance include Duodopa. It recorded revenue growth of 13.3% on operational basis and 12.1% on reported basis. Another product, Creon witnessed an increase of 11.3% in revenues on both operational and reported basis.
HCV (chronic hepatitis C virus) products recorded sales of $862 million, up more than 100% year over year, on the back of strong demand for Mavyret, which was launched in the second half of 2017. The company's expectation for HCV sales was $850 million.
However, sales of two key drugs, Androgel and Sevoflurane, fell 8.3% and 10.4%, respectively, operationally, during the quarter.
Adjusted SG&A expenses increased 8.4% to $1.56 billion while R&D expenses escalated 6% to $1.27 billion in the third quarter. Adjusted operating margin was 47.2% of sales.
In October, a label expansion of cancer drug, Venclyxto (Venclexta), in combination with Roche's RHHBY Rituxan (rituximab) for the treatment of patients with chronic lymphocytic leukemia ("CLL") in second or later-line setting was approved in Europe. Data from a phase III study showed that Venclexta in combination with Roche's Gazyva had superior progression-free survival ("PFS") in first-line CLL compared to standard of care. A label expansion application for the drug is under review in the United States for treating acute myeloid leukemia in first-line setting.
During the quarter, AbbVie entered into a license agreement with Sandoz, a generic arm of Novartis NVS , which will grant non-exclusive license relating to Humira in the United States and other countries. The agreement restricts Sandoz from launching a biosimilar version of the drug till Sep 30, 2023 in the United States. The restriction on the launch of a biosimilar version in Europe expired on Oct 16, 2018.
2018 Outlook Raised
AbbVie raised its adjusted EPS guidance to the range of $7.90-$7.92 for 2018 from $7.76-$7.86 predicted earlier. The earnings guidance reflects a year-over-year surge of 41.3% at the mid-point. The Zacks Consensus Estimate for current-year earnings is pegged at $7.86 per share.
Price, Consensus and EPS Surprise
Price, Consensus and EPS Surprise | Quote
AbbVie currently carries 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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