Earlier this month, pharma giant AbbVie (ABBV 1.05%) reported the results from its phase 3 clinical trial testing of atogepant for the preventive treatment of migraine in adults who met the criteria for episodic migraine.

Let's take a look at why the results of the study could soon lead to an approval from the U.S. Food and Drug Administration (FDA), as well as what impact that would have on AbbVie and its shareholders.

A patient meets with a doctor for an appointment.

Image source: Getty Images.

A highly prevalent medical condition

Before going into the results of atogepant's phase 3 clinical trial, let's start by discussing the prevalence of migraines and the differentiation between the various frequencies of migraine disorders.

Migraine is a neurological disease with often incapacitating neurological symptoms. Secondary symptoms such as nausea, vomiting, and sensitivity to sound, light, touch, and smell often accompany the hallmark symptom of a migraine, which is a severe, throbbing pain typically on one side of the head.

Migraines can further be classified into three categories based on their frequency. Migraines that occur fewer than 10 days per month are considered to be low-frequency episodic migraines. Migraines occurring 10-14 days per month are diagnosed as high-frequency episodic migraines. Finally, migraines that occur at least 15 days per month are classified as chronic migraines.

It's estimated that 17.1% of American women and 5.6% of American men suffer with episodic migraines, whereas 1.3% of women and 0.5% of men in the U.S. suffer from chronic migraines.

Arguably the most important piece of information to know about episodic migraines is that optimal treatment is the greatest predictor of whether a patient will progress to chronic migraines.

The American Headache Society found that only 2.5% of patients receiving "maximal treatment optimization" to control their episodic migraines progressed to chronic migraines in the following year. Maximal treatment optimization is essentially when a patient's migraine headaches are being effectively controlled with available treatment options such that migraine affects their life as little as possible. This is in stark contrast to the 8.1% of patients receiving "very poor" treatment who progressed to chronic migraines in the following year. In other words, the treatments that these patients are receiving are not doing an adequate job of addressing the disruptions to their lives from migraines.

A meaningful reduction in monthly headache days

Atogepant has proven itself as an effective treatment for the prevention of episodic migraines, which is backed up by the data from its phase 3 trial.

Patients treated with 10-milligram, 30-milligram, and 60-milligram once-daily doses of atogepant reported respective decreases of mean or average monthly headache days of 3.9 (with a previous baseline of 8.4), 4 (8.8 baseline), and 4.2 (9 baseline), which were all significantly more than the 2.5-day reduction in the placebo group (8.4 baseline).

Through the duration of the 12-week treatment period, 55.6%, 58.7%, and 60.8% of patients receiving 10 mg, 30 mg, and 60 mg, respectively, of atogepant once daily attained at least a 50% reduction in monthly migraine days.

The drug was also well tolerated in the phase 3 study. While patients receiving atogepant were more likely to complain of constipation (6.9%-7.7% versus 0.5% for placebo), nausea (4.4%-6.1% versus 1.8% for placebo), and urinary tract infection (3.9%-5.7% versus 4.5% for placebo), the majority of these complaints were mild to moderate in severity. Against the potential benefit of the drug in reducing monthly migraine days, this led to a low discontinuation rate for atogepant.

Potential to seize share in a growing market

AbbVie is anticipating a regulatory decision from the FDA late in the third quarter, which ends Sept. 30. Given the efficacy of atogepant and the mild side effects associated with the drug, I believe an FDA approval for atogepant is imminent.

This would greatly complement AbbVie's existing migraine drug portfolio, which consists of Botox (used to treat chronic migraine among other conditions) and Ubrelvy (used to treat, but not prevent, acute migraines).

Upon approval from the FDA, atogepant could capture share in a global migraine drug market that research company Market Data Forecast expects to grow by 4.9% annually, from $4.4 billion in 2021 revenue to $5.6 billion by 2026.

Atogepant's phase 3 results lead me to believe that the drug could realistically capture 15% market share, which would equate to approximately $800 million in annual revenue by 2026. Even compared with the $56.4 billion in revenue that analysts are forecasting this year for AbbVie, an additional $800 million in annual revenue in five years would be significant.

Atogepant is one of many promising drugs for AbbVie

Vice Chairman Dr. Michael Severino noted during AbbVie's Q2 2021 earnings call that AbbVie and Boehringer Ingelheim's immunology drug, Skyrizi, remains on track to submit its regulatory application to the FDA for a Crohn's disease indication in the coming months.

Given that Skyrizi was able to nearly double its first-half revenue from $630 million in 2020 to $1.25 billion in 2021 with its market-leading 34% psoriasis patient share, another indication for a multi-billion-dollar market could drive further growth for the drug.

Meanwhile, AbbVie and Johnson & Johnson's blockbuster oncology drug, Imbruvica, posted 5% year-over-year growth in the first half, from $2.52 billion in 2020 to $2.65 billion in 2021. AbbVie is expecting that its Imbruvica and Venclexta combo will be approved next year to treat both stage 1 chronic lymphocytic leukemia and relapsed or refractory mantle cell lymphoma, which should also lead to future growth for the two oncology drugs.

AbbVie's strong drug portfolio and its S&P 500-beating 4.3% dividend yield offer income investors a safe dividend with the potential for future growth, which is what I believe makes the stock a buy at this time.