AbbVie's (NYSE:ABBV) share price has been hit pretty hard this year by the COVID-19 pandemic. But its underlying business hasn't.
The big drugmaker announced its first-quarter results before the market opened on Friday. AbbVie easily beat Wall Street's revenue and earnings estimates, delivering strong year-over-year growth on its top and bottom lines. The company also maintained its full-year 2020 adjusted earnings outlook, projecting 8.1% year-over-year growth at the midpoint of its guidance range.
All of these items are significant. But here are the three most important things to know about AbbVie's Q1 update.
1. Humira is still humming along
When Humira first began to face biosimilar competition in Europe, some might have thought the end was nigh for the world's best-selling drug. International sales for Humira plummeted throughout 2019. And international sales for the immunology drug continued to fall in the first quarter of 2020, down 14.9% year over year.
But the big picture for Humira continues to look pretty good. AbbVie reported total Q1 sales for the drug of $4.7 billion, up 5.8% year over year. This growth amounted to an extra $257 million for the company.
Although Humira continues to struggle in international markets, it's performing really well in the U.S. with sales jumping 13.7% year over year to nearly $3.7 billion. To be sure, it's only a matter of time before Humira's U.S. sales begin to sink. The drug faces biosimilar competition in the U.S. beginning in 2023. However, the longer Humira still hums along, the more time AbbVie has to get its post-Humira strategy fully into place.
2. Key drugs of the future gaining momentum
That leads to the second important thing to know about AbbVie's Q1 update. The key drugs that are critical to the company's post-Humira future are gaining solid momentum.
First-quarter sales for AbbVie's blood cancer franchise soared 32.1% year over year. Imbruvica generated sales of $1.2 billion, a 20.6% increase over the prior-year period total. Venclexta is on track to reach blockbuster status with sales more than doubling in Q1 to $317 million.
Another blockbuster-to-be, immunology drug Skyrizi, raked in sales of $300 million after winning FDA approval in April 2019. Rinvoq, which was approved by the FDA in August 2019 for treating rheumatoid arthritis, made $86 million in Q1, up from $47 million in the previous quarter.
3. Allergan closing imminent
There's another component to AbbVie's plan for coping with the coming loss of exclusivity for Humira in the U.S. that's also critical -- the company's acquisition of Allergan (NYSE:AGN). AbbVie confirmed that it expects to close the transaction this month.
The company had already announced in March that it received final approval for the acquisition in Europe and that it had entered into a consent agreement with the U.S. Federal Trade Commission (FTC). The only news in AbbVie's Q1 update was that this consent decree was still subject to additional review and approval by the FTC's commissioners. However, AbbVie doesn't anticipate any roadblocks.
Assuming all goes as planned, AbbVie's next quarterly update will include sales from Allergan's blockbuster Botox franchise, fast-rising star Vraylar, and more. Humira will still be a major contributor to AbbVie, but after the second quarter, the immunology drug will no longer generate more than half of the company's total revenue.
What about COVID-19?
With the COVID-19 pandemic wreaking havoc on the financial results for many companies, you might have expected that it would be one of the biggest stories in AbbVie's Q1 update. But it wasn't.
AbbVie actually benefited from the pandemic in Q1. The company stated that its revenue increased by 240 basis points because of stocking up related to the COVID-19 outbreak.
It just might benefit even more in the future. The drugmaker is evaluating Imbruvica in a phase 2 clinical study in treating COVID-19 patients. AbbVie is also working with global health authorities to determine if HIV drug Kaletra could be effective in treating COVID-19.
The big pharma stock could still be affected in the future to some extent by the pandemic, though. AbbVie acknowledged that there are uncertainties related to the COVID-19 outbreak. The company is assuming that stay-at-home orders will be gradually lifted beginning in May and that business will largely return to normal over the next few months for physicians' offices and hospitals. If those assumptions don't pan out, COVID-19 could be a much more important factor in AbbVie's quarterly updates later this year.