What happened

Shares of biotech giant AbbVie (NYSE:ABBV) gained a healthy 15% in September, according to data from S&P Global Market Intelligence.

The spark? AbbVie's shares perked up after the company's presentation at the Morgan Stanley Healthcare Conference on Sept. 10. While the company didn't reveal anything new during this presentation, CEO Richard Gonzalez's comments about the upcoming Allergan (NYSE:AGN) acquisition, as well as how the company plans to create value as Humira goes off patent, appear to have gone a long way toward reassuring investors.   

An open road with the word recovery written across it.

Image source: Getty Images.

So what

Prior to last month's rally, AbbVie's shares were down by an unsightly 28% for the year, thanks to the growing concerns about Humira's future. In short, AbbVie's flagship medication has been experiencing a sharper-than-expected drop in international sales following the introduction of biosimilars in Europe. A similar pattern could very well emerge in the U.S. once biosimilars hit the market.  

As Gonzalez noted during this latest investor presentation, though, AbbVie should be able to continue to post industry-leading levels of revenue and earnings growth well into the next decade, even after Humira loses patent protection in the United States. Keeping with this theme, this megamerger with Allergan will immediately lower Humira's overall importance in terms of revenue growth and the biotech now sports a healthy stable of new growth products -- several of which should turn out to be megablockbusters in their own right.

Now what

Can AbbVie's shares continue to rebound? The short answer is yes. AbbVie has been one of the cheapest large-cap biotech stocks for the better part of the last 12 months. So, as the fear over Humira's demise begins to fade and the positive impacts of this Allergen tie-up come into view, AbbVie's shares should begin to garner a more typical valuation for a top biotech.