AbbVie (ABBV -0.30%) knocked the ball out of the park when it reported its first-quarter earnings results in April. Revenue and earnings came in higher than expected thanks to strong momentum for new HIV drug Mavyret and solid growth for top-selling Humira.
The big drugmaker provides an update on its second-quarter performance on Friday, July 27, 2018. Here's what you can expect from AbbVie's Q2 earnings announcement.
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1. Humira slowing down a bit
Don't anticipate real weakness for Humira in the second quarter. Sales for the autoimmune disease drug should still be enormous -- just as they've been for years.
However, international sales growth for Humira is likely to drop in Q2. The primary reason for this is that AbbVie benefited from the timing of shipments in the first quarter that won't be a factor this time around. As a result, Humira sales are likely to slip quarter over quarter.
What about in the U.S., where AbbVie makes close to 64% of its total revenue for Humira? In Q1, Humira's sales were dented a bit by inventory destocking at a major specialty pharmacy. The company thinks there will be some continued destocking in Q2, which could dampen sales for Humira a little. Still, there's no need for any tears: Humira will probably rake in more than $20 billion this year -- the most money ever made in one year by a prescription drug.
2. Spreading the wealth in oncology
Sales for Imbruvica soared 38% year over year in the first quarter. The cancer drug's upward momentum will almost certainly continue, but don't look for growth quite at that level. However, Imbruvica could very well make in the ballpark of $850 million in Q2.
The good news for AbbVie is that another oncology drug could begin to step up. Venclexta first won Food and Drug Administration approval in April 2016 for treating chronic lymphocytic leukemia (CLL) patients with a genetic abnormality called a 17p deletion. However, the market for this indication hasn't been significant enough for the company to even report detailed sales figures for Venclexta so far.
But AbbVie won another key FDA approval for Venclexta early last month as a second-line treatment in combination with Roche's Rituxan for patients with CLL or small lymphocytic lymphoma (SLL) with or without the 17p deletion. There will only be a few weeks of sales at best in Q2, however, so AbbVie still might not provide a revenue figure for Venclexta. It could be the last quarter to leave the drug out, though: Venclexta could achieve annual sales of $3 billion by 2022 and approaching $700 million next year.
3. Big bucks but moderating growth for Mavyret
Mavyret was the star of the show when AbbVie reported its Q1 earnings results. The hepatitis C virus (HCV) drug is likely to shine once again in the second quarter with sales of around $950 million. However, that estimate represents slowing quarter-over-quarter growth of 3%.
This isn't bad news at all. Mavyret stormed out of the gate after winning regulatory approval. AbbVie captured a huge market share in Japan almost immediately. Its HCV drug now claims a market share of 45% in the important U.S. market.
But AbbVie faces a strong competitor in Gilead Sciences. The big biotech has been predicting that its HCV market share will stabilize in mid-2018. I expect that Gilead is right, which means that Mavyret's sales will likely stabilize, too.
Ain't afraid of no ghosts
I think that AbbVie's Q2 results will be solid. Wall Street expects that the company will report revenue of $8.2 billion and adjusted earnings per share of $1.97. That sounds about right to me. That doesn't mean that the company's performance will be fully appreciated, though.
In AbbVie's Q2 conference call, CEO Rick Gonzalez talked about short-sellers "seeing ghosts" when they looked at the company's stock. They're still seeing those ghosts: Andrew Left's Citron Research tweeted last week that AbbVie "is the next great short" because of potential U.S. drug pricing changes.
More important, I think that the long-term outlook for the company continues to look good, too. My view is that Humira, Imbruvica, Mavyret, and Venclexta, along with promising pipeline candidates elagolix, risankizumab, and upadacitinib, will ultimately be "ghostbusters" for AbbVie.
