AbbVie Inc. (ABBV -0.94%) won an important patent battle last fall that protects its cash cow, Humira, for a few more years; however, Humira will face off against biosimilars eventually, and that makes launching new drugs critical if it wants to continue growing. Can this company's research team deliver? While there are many intriguing drugs advancing through AbbVie's pipeline, perhaps it's Rova-T, upadacitinib, and risankizumab that are most important to its future.

Defeating solid tumors

Gene therapies are making big advances in the fight back against blood cancer, but the tumor microenvironment is more challenging to penetrate, and that's been an obstacle for drug developers. One drug that may be able to successfully help patients with solid tumors, however, is Rova-T, an investigational antibody-drug conjugate that AbbVie acquired for $5.8 billion up front, plus milestones, in 2016.

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Rova-T targets DLL3, a protein that's expressed in more than 80% of small-cell lung cancer tumors, but that isn't found in healthy tissue. Once Rova-T binds to DLL3, it delivers a toxic payload that's designed to cause cancer cell death and tumor shrinkage.

Initially, Rova-T's being evaluated in third-line or greater small-cell lung cancer, a setting plagued by poor outcomes and limited treatment choices. Small-cell lung cancer accounts for 15% of all lung cancers, and sadly, extensive-stage SCLC has just a five-year survival rate.

Data from a third-line Rova-T study is expected in Q2 2018, and if it's good, then AbbVie plans to file for an accelerated approval. If Rova-T gets a priority review from regulators, then it could make it to market late this year or early in 2019.

Trials are under way that could establish Rova-T as a first- and second-line small-cell lung cancer drug. Also, trials evaluating it in combination with the multibillion-dollar checkpoint inhibitor, Opdivo, and in other solid tumor cancers expressing DLL3 are being conducted, too. AbbVie expects it could begin unveiling data from its combination trial and DLL3 basket study later this year. 

If Rova-T wins a regulatory nod in late-line small cell lung cancer and data from its other trials pan out, then AbbVie thinks it could be a multibillion-dollar drug because its addressable market could be big and there's a significant need for new treatment options for these patients. 

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Taking the baton

Protecting Humira's $18 billion per year plus in market share when biosimilars emerge is paramount, and launching upadacitinib and risankizumab may do that.

Upadacitinib is a JAK1 inhibitor that's designed to be more selective than competing therapies with the same mechanism of action. Last year, AbbVie unveiled results from three phase 3 studies in rheumatoid arthritis, and success in those trials has the company planning to file for an FDA green light by the end of 2018, as long as two more RA trials that are expected to have data available soon pan out, too.

Rheumatoid arthritis affects 23.7 million people worldwide, and as a result, it's a multibillion-dollar indication. Given that trials so far are showing upadacitinib to be effective in combination with methotrexate -- a common first-line treatment -- and as a monotherapy, it could eventually carve out meaningful market share.

Its opportunity isn't limited to rheumatoid arthritis, though. AbbVie's conducting studies in other autoimmune disorders that could open its use up to even more people. For instance, phase 3 studies in psoriatic arthritis and Crohn's disease are under way, and pivotal trials in eczema and ulcerative colitis are planned. It appears upadacitinib may have a good shot at disrupting those indications, given that positive phase 2 data in eczema had the FDA granting it breakthrough therapy designation last month. If so, then AbbVie thinks upadacitinib's peak sales could be $6.5 billion someday.

Risankizumab's peak sales opportunity may be smaller, but not by much.

Recently, AbbVie reported data from its fourth successful study of risankizumab in psoriasis. That study showed that 73% of patients achieved PASI 90 and nearly half achieved PASI 100, or complete skin clearance, after taking risankizumab. For comparison, only 2% and 1% of patients achieved those levels in the placebo arm of the study, respectively.

AbbVie targets having its filing for FDA approval of risankizumab done by the end of Q2, and that suggests an FDA decision will be on deck early next year. AbbVie believes the results are good enough for risankizumab to win market share in both new patients and patients who are already on anti-TNF drugs, including Humira, and if they're right, then its opportunity in psoriasis, as well as in other indications, including Crohn's disease and ulcerative colitis, could turn it into a $5 billion-per-year drug, according to management.

Looking forward

There's no telling what will happen with Rova-T, upadacitnib, and risankizumab's ongoing trials or if the FDA will sign off on these drugs. Nevertheless, these three drugs represent AbbVie's best shot at overcoming any future decline in Humira demand and continuing its streak of sales and profit growth. I think the odds of success are pretty good for these drugs, and that's why I consider AbbVie a top stock to buy. Regardless, anyone interested in owning AbbVie in portfolios will want to keep close tabs on the progress being made with these drugs in 2018.