You might not have noticed it, but AbbVie (ABBV 0.43%) is on a roll -- at least when it comes to winning drug approvals. Since the beginning of 2019, the big biotech has racked up U.S. Food and Drug Administration (FDA) approvals for a combination of Imbruvica and Gazyva in treating chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL), a combination of Venclexta and Gazyva as a first-line treatment for CLL/SLL, and Skyrizi in treating plaque psoriasis.

On Friday, AbbVie added another key FDA approval with a positive decision for Rinvoq (upadacitinib) in treating rheumatoid arthritis. This latest FDA approval is AbbVie's biggest regulatory victory so far this year. And it just might be the most important immunology win for the company since Humira.

Businessman holding "FDA approved" card

Image source: Getty Images.

Better than Humira

Humira has emerged as the gold standard in treating rheumatoid arthritis. However, Rinvoq appears to be even better than its predecessor.

AbbVie announced results last year from the Select-Compare phase 3 clinical study evaluating Rinvoq versus Humira in treating rheumatoid arthritis. The company used five different clinical outcome measurements to compare its two drugs. Rinvoq scored better than Humira on all five measures of efficacy.

Three of those outcomes were based on the American College of Rheumatology's measurements of improvement in the systems of rheumatoid arthritis -- ACR20, ACR50, and ACR70, which indicate 20%, 50%, and 70% improvement, respectively. Seventy-one percent of patients taking Rinvoq achieved an ACR20 response, compared with 63% of patients taking Humira. Rinvoq looked even more impressive on ACR50 response rate, with 45% of patients achieving the level of improvement versus 29% for patients receiving Humira. Nearly twice as many patients taking Rinvoq achieved an ACR70 response than those on Humira (25% compared to 13%).

In addition, a significantly higher percentage of patients receiving Rinvoq achieved clinical remission (29%) than patients receiving Humira (18%). Low disease activity was observed in 45% of patients taking Rinvoq compared to 29% of patients taking Humira.

To put icing to the cake, Rinvoq is more convenient to take than Humira. While Humira is an injection, Rinvoq is an oral medication taken once daily. Even better, AbbVie designed the packaging for Rinvoq to make it really easy for individuals with rheumatoid arthritis to get pills from the bottle. This design was so effective that it was awarded the Arthritis Foundation Ease of Use Commendation.

But not bigger than Humira

Since Rinvoq is more effective and more convenient to take than Humira, can it surpass Humira in sales? The chances are slim. Humira reigns as the best-selling drug in the world, racking up sales of nearly $20 billion last year. The dynamics in the immunology market are very different than when Humira began its climb to the top. However, Rinvoq appears very likely to become AbbVie's biggest immunology drug after Humira.

Earlier this year, market researcher EvaluatePharma ranked upadacitinib as the No. 2 most valuable pipeline drug in development. It also projected that upadacitinib would be the second-biggest new drug launch of 2019. At the time, EvaluatePharma estimated that the drug would generate sales of $2.2 billion by 2024. Now, however, EvaluatePharma has a more optimistic outlook for upadacitinib, projecting sales of $2.5 billion by 2024.

AbbVie plans to launch upadacitinib in the U.S. under the brand name Rinvoq later in August. The drugmaker has expectations that are even more upbeat than EvaluatePharma's. AbbVie executives have stated that they expect Rinvoq will achieve peak annual sales in the ballpark of $6.5 billion.

Not all of those sales will be made in treating rheumatoid arthritis, though. AbbVie is also evaluating Rinvoq in late-stage clinical studies targeting atopic dermatitis, Crohn's disease, giant cell arteritis, psoriatic arthritis, and ulcerative colitis. The company is also conducting a phase 2 clinical study of the drug in treating axial spondyloarthritis. 

Other arrows in AbbVie's quiver

Humira certainly casts a long shadow over AbbVie. Rinvoq is a critical component of the company's strategy to offset declining sales for its top drug as it faces competition from biosimilar rivals. However, AbbVie also has several other arrows in its quiver in addition to Rinvoq.

AbbVie's blood cancer drugs Imbruvica and Venclexta continue to enjoy strong momentum. The company expects Orilissa will be a blockbuster in the future in its currently approved indication of managing endometriosis pain and potentially in treating uterine fibroids. AbbVie thinks that Skyrizi will deliver sales of close to $5 billion, although that's more optimistic than some analysts predict.

The company is also counting on the pending acquisition of Allergan to reduce its dependence on Humira. AbbVie anticipates that the transaction will close in early 2020.

AbbVie stock currently trades at only a little over seven times expected earnings. Many investors clearly aren't convinced that the company's efforts to overcome the headwinds for Humira will work out. But if Rinvoq achieves the success AbbVie is hoping for, this stock likely won't remain this cheap.