Despite launching nearly two decades ago, worldwide sales of AbbVie's (ABBV 0.54%) lead drug, Humira still generates more revenue than most countries. As you can imagine, patent-protected exclusivity expected to expire in the U.S. in 2023 has been a major concern for AbbVie for a long time. In fact, eight years ago, Abbott spun out its biopharmaceutical segment into a separate company to protect the parent from Humira's impending patent cliff.

Overcoming Humira's far-off patent losses has been central to AbbVie's existence for so long that it can be hard to realize problems festering in the present. In case you hadn't noticed, sales of two drugs the company is relying on to offset eventual Humira losses are running into trouble and the worst is still to come.

Scientist looking at something important.

Image source: Getty Images.

The beginning of Imbruvica's end

In 2015, AbbVie acquired Pharmacyclics for about $21 billion to gain rights to the portion of sales for Imbruvica, a new cancer drug that Johnson & Johnson (JNJ -2.13%) already owned part of. AbbVie's share of Imbruvica sales grew last year to $5.3 billion, which worked out to 12% of the company's total revenue. 

Unfortunately for AbbVie, Imbruvica sales will probably get cut to shreds long before Humira begins losing ground to U.S. biosimilar competition in 2023. That's because it's a first-generation Bruton's tyrosine kinase (BTK) inhibitor that isn't nearly as targeted as next-generation BTK inhibitors from AstraZeneca (AZN -0.68%) and BeiGene (BGNE -3.14%)

Off-target effects make Imbruvica difficult to tolerate and it's already losing ground to new BTK-inhibitors with better safety profiles. Last November, the FDA approved Calquence from AstraZeneca to treat newly diagnosed patients with the most common form of leukemia. As a result, AbbVie reported Imbruvica sales in the first quarter that were 11% lower than during the previous three-month period.

Class effect

Unfortunately for AbbVie, competition for leukemia patients from next-generation BTK inhibitors is about to rise exponentially. Interim phase 3 trial results BeiGene announced in April suggested Beigene's new BTK inhibitor, Brukinsa will wipe the floor with Imbruvica when long-term survival data reads out. During the head-to-head Alpine study, relapsed leukemia patients randomized to receive Brukinsa were significantly more likely to respond to treatment than those given Imbruvica.   

Brukinsa earned its first FDA approval in 2019 to treat a rare lymphoma and it's going to be a while before BeiGene can apply for approval to treat first-line leukemia. In the meantime, though, oncologists who saw Brukinsa shrink tumors more often than Imbruvica will be even more likely to reach for available next-generation drugs from this class.

Another negative class effect

Off-target side effects aren't an issue limited to cancer treatments that inhibit out-of-control Bruton's tyrosine kinases. In February, the FDA alerted the public to the increased risk of heart problems and cancer found during a post-marketing safety study with Xeljanz. This is a Janus kinase inhibitor (JAK) from Pfizer (NYSE: PFE) the FDA approved to treat rheumatoid arthritis in 2012.

AbbVie's Rinvoq is a new JAK inhibitor the FDA approved to treat rheumatoid arthritis in 2019. Investors hoping Rinvoq will offset Humira losses should probably brace for disappointment. Xeljanz isn't the only JAK inhibitor out there with a troubled safety profile.

Don't panic

Right now, you can find better pharma stocks to buy than AbbVie, but you shouldn't dump the stock if you're already holding it. While a lot of Humira profits have been funneled into kinase inhibitors, AbbVie's bet on Allergan could produce decades of reliable sales.

It's been years since Botox has been the only brand of botulinum toxin approved by the FDA but the Botox brand still dominates. Botox sales reached an annualized $4 billion in the first quarter and this revenue stream isn't going anywhere but up for the foreseeable future.