Regeneron Pharmaceuticals (NASDAQ:REGN) and AbbVie (NYSE:ABBV) have managed to deliver strong fourth quarter earnings. However, investors seem to be ignoring these well-established pharmaceutical players with diversified product portfolios, deep research pipelines, broad geographic presence, robust cash flows, and healthy balance sheets.

Hence, now may just be the right time to take a closer look at these potential long-term pharma winners.

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1. Regeneron Pharmaceuticals

Regeneron Pharmaceuticals' fiscal 2020 performance has been quite remarkable, considering the many pressures it faced due to COVID-19 related restrictions. The company's revenue jumped 30% year over year to $8.5 billion, and net income is up year over year by a staggering 66% to $3.5 billion. The company's cash flows from operations also rose by 7.7% to $2.6 billion.

Ironically, these results have not instilled much confidence in the stock. That said, a company as fundamentally strong as Regeneron cannot remain ignored for long.

Regeneron's blockbuster retinal disease drug, EYLEA, continues to be a force to reckon with, clocking sales of $7.9 billion globally (in conjucnction with Bayer). Even when considering the upcoming U.S. patent expiration in June 2023, competition from Novartis' (NYSE:NVS) Beovu and Roche Holdings' (OTC:RHHBY) Lucentis, as well as future competition from Roche's investigational therapy, Faricimab, EYLEA is well-positioned to withstand competitive pressures.

As of now, EYLEA is the only available therapy with real-world efficacy, safety, and convenience data based on over 30 million injections administered to date. The drug accounted for just over 55% of Regeneron's total revenues in fiscal 2020, which is lower than the 70% total revenue contribution of the drug in fiscal 2019.

In fiscal 2020, more than 80% of Regeneron's top line growth  came from products other than Eylea. Prominent among them have been immunology drug Dupixent, cancer drug Libtayo, and COVID-19 combinational monoclonal antibody regimen called REGEN-COV. Dupixent's global sales jumped 75% year over year to over $4 billion in fiscal 2020. Already approved by the U.S. Food and Drug Administration (FDA) for treating atopic dermatitis, sinus infections, and asthma, Dupixent is also being studied in late-stage clinical trials for eight additional diseases. There is also much scope for growth for Dupixent in existing indications, considering that the drug has reached only 6% of the 2.2 million eligible  patients in the U.S.

Libtayo is also emerging as a major growth driver, having already secured FDA approvals for two types of skin cancers, squamous cell carcinoma  and basal cell carcinoma. However, a much bigger catalyst for the drug will be a potential FDA approval in advanced lung cancer by Feb. 28.

Finally, there is REGEN-COV, Regeneron Pharmaceuticals' antibody cocktail which has secured FDA emergency use authorization (EUA) for patients with mild to moderate cases of COVID-19. Although previously forgotten amid the euphoria surrounding COVID-19 vaccines, governments across the world are slowly becoming aware of the importance of this therapeutic in the global fight against the virus. The company has reported clinical data demonstrating the potential of REGEN-COV as prophylactic therapy for patients exposed to COVID-19. This antibody cocktail regimen  has also demonstrated efficacy against the U.K. and South African variants of the virus in vitro studies. Regeneron has already entered into agreements to supply up to 1.5 million doses and 200,000 doses to the U.S. and German governments, respectively. 

Despite the many positives, Regeneron Pharmaceuticals is trading at a forward price-to-earnings (P/E) multiple of 12.1 and price-to-sales multiple of 6.1. This is quite cheap for a company with multiple promising growth assets in its kitty. Hence, healthcare investors can expect handsome returns from this stock in the long run.

2. AbbVie

Biopharmaceutical company AbbVie pays a handsome dividend yield of 4.9%, which is much higher than the S&P 500's yield of 1.6%. With a dividend payout ratio of 58.2% in the last 12 months, this S&P Dividend Aristocrat (first as a part of Abbott Laboratories and then post spinoff in 2008, as an independent company) has sufficient financial flexibility to continue to increase its dividend payouts for foreseeable future.

However, this high-yield stock has not seen any meaningful appreciation, even after it released stellar fourth quarter results and handsomely beat consensus estimates. Investor fears related to the upcoming Humira patent expiry and generic erosion of this blockbuster franchise in the U.S. post-2023 refuse to quell, and for a good reason. In fiscal 2020, the drug accounted for 43% of AbbVie's total revenues, which is quite significant.

But the situation is not as dire as it seems. To start with, being a biologic drug, Humira may not face the same pace of generic erosion as seen for small molecule drugs. This has already been seen in Europe, where Humira has already lost patent protection and is facing competition from biosimilars such as Amgen's (NASDAQ:AMGN) Amgevita, Novartis' (NYSE:NVS) Hyrimoz, Biogen (NASDAQ:BIIB) and Samsung Bioepis' Imraldi, and Mylan's (NASDAQ:MYL) Hulio. Yet Humira's fiscal 2020 international market revenues were $3.7 billion, which is a modest year-over-year decline of 13.6%. Small molecule drugs usually report up to a 90% reduction in market share within the first year of entry of generic competition.

Hence, Humira will continue to be a cash cow, not only till 2023, but even for few more years. Until then, AbbVie expects to position two recently launched immunology drugs, Skyrizi and Rinvoq, as alternatives to Humira. FDA has already approved Skyrizi  for plaque psoriasis and Rinvoq for rheumatoid arthritis. Both these drugs have also proved superiority to Humira in their respective approved indications. AbbVie is also studying Skyrizi and Rinvoq in other Humira indications, and expects the two drugs to fetch risk-adjusted sales over $15 billion  by 2025.

AbbVie also has high hopes for its blood cancer drugs, Imbruvica and Venclexta, which together earned revenues close to $6.6 billion in 2020. The company expects these drugs to report double-digit revenue growth in 2021. Finally, although the aesthetics portfolio acquired from Allergan did not perform well in 2020, AbbVie remains confident of its recovery in the years post-pandemic. Hence, considering these assets, the chances of the company facing a dramatic revenue decline post-2023 seem low.

AbbVie is trading at forward P/E multiple of only 7.7, which is quite cheap. Considering the company's very promising and diversified portfolio, it is well-positioned for a solid future growth trajectory and can prove to be a promising investment for retail investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.