What happened

Shares of AbbVie (ABBV -0.35%), a blue-chip biopharma, fell by a staggering 11.1% in March, according to data from S&P Global Market Intelligence. This large-cap biopharma thus lost approximately $20 billion in market capitalization last month.

On the bright side, AbbVie's stock did perform modestly better than both the Dow Jones Industrial Average and the S&P 500 in March. What's more, AbbVie's shares have also lost less ground through the entirety of the first quarter of 2020 than all of the major U.S. stock indices. 

An elderly man chewing on his nails.

Image source: Getty Images.

So what

What went wrong for AbbVie in March? Late last year, AbbVie took on a boatload of debt to acquire Allergan (AGN). The company's balance sheet, in turn, isn't in the greatest of shape at the moment. The reason that matters is that investors are clearly favoring companies with strong balance sheets during this marketwide meltdown. AbbVie, with its highly leveraged sheet, doesn't exactly fit that description. 

Another important issue to bear in mind is that Allergan's medical aesthetics business is likely to take a big hit from the COVID-19 public health crisis. Elective procedures like Botox injections are sure to decline with stringent social distancing measures in place. That's unwelcome news for AbbVie and its shareholders as the biopharma gears up to close on this $63 billion megamerger.   

Now what

The silver lining is that this top biotech stock is now stupid cheap, especially with its dividend yield sitting at a monstrous 6.28% at current levels. Specifically, AbbVie's shares are presently valued at a paltry 7.4 times expected earnings. That's an absurd valuation for a company with a proven track record of generating top-notch levels of revenue growth. As such, bargain hunters many want to pounce on this beaten-down biopharma stock soon.