AbbVie's Born -- What Now?

Abbott Laboratories (NYSE: ABT  ) shares plunged nearly 50% this week. What the heck happened? Relax, it was just the new spinoff AbbVie coming fully to life.

The Abbott name and ticker will remain with the main company, which now limits its focus to generics, nutritional products, diagnostics, and medical devices. AbbVie houses the brand-name pharmaceuticals and biologics. But will those brands support the new company?

Humira reliance
Abbott knows that AbbVie depends on the continued success of its anti-TNF biologic Humira. The drug has nine approved indications and four potentials sitting in late-stage trials. Humira reported sales of $7.9 billion in 2011 and still pulled in double-digit growth last year. But there's a massive step down from Humira to the next best-selling drug.

Here's a look at the leading proprietary drug sales in the nine months that ended the last reported quarter.

 

Total U.S. Sales (in millions)

YoY Growth (%)

Ex-U.S. Sales (in millions)

YoY Growth (%)

Humira

2,964

26

3,621

6

Trilipix/Tricor

897

-7

N/A

N/A

AndroGel

787

28

N/A

N/A

Niaspan

634

-12

N/A

N/A

Lupron

414

3

175

13

Synthroid

383

-1

N/A

N/A

Kaletra

196

-13

567

-14

Niaspan and Tricor face generic competition this year due to patent expirations. HIV drug Kaletra continues to lose ground against competitors. The testosterone replacement treatment AndroGel remains as AbbVie's second best hope right now.

The company needs another strong contender to rise through the pipeline and help Humira out.

The pipeline
AbbVie has a busy pipeline with 10 phase 3 projects and even more in phase 2. Here are the two late-stage standouts I'll watch.

Multiple sclerosis treatment daclizumab, a partnership project with Biogen Idec (NASDAQ: BIIB  ) , should report data sometime next year. Brian Orelli discussed the mid-stage trial results containing promising efficacy better than Teva's (NYSE: TEVA  )  Iaquinimod. But side effect risks presented that included elevated liver enzymes. Daclizumab is a bit behind the pipes of Biogen's oral MS treatment BG-12, which is expected to receive official word from the FDA by spring.

Abbott's next contender belongs to an emerging generation of hepatitis C treatments that don't require a concurrent dose of interferon. The company's oral combination medication is in phase 3 studies and running nearly parallel to Gilead's  (NASDAQ: GILD  )  sofosbuvir. Both drugs performed well in mid-stage trials, and the phase 3 data could draw a clearer picture of a victor. It will be some time before AbbVie's data reports since the trial was still enrolling at the end of last year.

Foolish final thoughts
It will take time before AbbVie proves its capabilities. Humira continues to perform well, but there's inherent risk in relying on one drug. Watch the company over the course of this next year to see how its pipeline projects pan out.

Want to learn more about AbbVie and Abbott? To help investors better understand recent spinoff situation, The Fool has created a brand new premium report on both stocks. Inside, we outline all of the must-know opportunities and risks facing both companies, so make sure to claim this report by clicking here now.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2179917, ~/Articles/ArticleHandler.aspx, 10/20/2014 4:18:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement