With a market cap of more than $243 billion, AbbVie (ABBV 0.22%) is one of the largest pharmaceutical companies on the planet. As an investment, its shares have outperformed the market over the past five years with a total return of 175% against the market's 107%. 

Will the future be as lucrative for shareholders? Or will headwinds to its revenue growth end up spoiling the party? In my view, AbbVie is probably going to be successful in the long term, but the next few years will be quite challenging. 

An investor talks with several doctors and nurses while sitting in front of a laptop at a conference room.

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Financial performance has been strong

AbbVie develops and markets drugs in the areas of immunology, oncology, and neuroscience. And since its acquisition of Allergan in 2020, it also makes medical aesthetics treatments like Botox. It has dozens of approved drugs on the market -- and dozens more candidates in its expansive development pipeline. All of this contributes to keeping the business running on a relatively stable footing.

Further, AbbVie's operational efficiency and recent history of profitable growth make it an appealing stock for many investors. Over the past five years, its quarterly revenue has grown by more than 119%, and its trailing 12-month revenue stands at $55.2 billion.

With all the money it pours into drug development, the company has shown its ability to be highly profitable. Its cash return on capital invested is 22.1%, placing it firmly ahead of big pharma stock peers like Gilead Sciences, Sanofi, and Novartis. And it's growing free cash flow much faster too, increasing it by 165% over the past three years.

ABBV Cash Return on Capital Invested (CROCI) (TTM) Chart

ABBV Cash Return on Capital Invested (TTM) data by YCharts

What's more, the stock pays a good dividend that at current share prices has a forward yield of 4.2%, and management regularly boosts that payout.

Can growth possibly endure the decline of Humira?

As favorable as this looks, there's reason to believe that the next few years could be difficult for AbbVie. That's because of its heavy reliance on the arthritis drug, Humira. In last year's third quarter, this medication was responsible for net revenue of $5.4 billion out of AbbVie's total revenue of $14.3 billion.

However, in 2023 Humira will start to face serious competition from biosimilars in the U.S. It already faces such competition in the E.U. where sales have dropped off significantly. And that's a serious challenge. Humira is prescribed for no fewer than 16 indications in rheumatology, gastrology, and dermatology, making it the world's best-selling immunology drug by far. Finding a single new treatment that can better address all of the same disease markets would be difficult, to say the least. 

So instead the company has developed two new therapies, Skyrizi and Rinvoq. Between them, they could eventually provide treatments for all of the same conditions as Humira does. Importantly, Skyrizi and Rinvoq have both demonstrated better results than Humira for certain indications -- and they have also outperformed some alternatives produced by competitors. So, at least in theory, the pair should be able to bolster AbbVie's revenue as Humira fades.

By 2025, management expects Rinvoq and Skyrizi together to bring in more than $15 billion per year. Of course, at Humira's peak, it was booking sales of nearly $20 billion per year. Therefore, AbbVie will need to launch a few other blockbusters if it wants to make up the full revenue shortfall that is likely to come from all that biosimilar competition. Still, given how many different projects the company has in phase 3 clinical trials, there's reason to believe that's how things will work out.

The plan seems to be working so far

In a nutshell, with Skyrizi and Rinvoq expanding their sales and other potentially lucrative treatments waiting in the wings, the risk profile of the stock has shifted. Whereas before, the risk was that the company's top line would shrink as sales of Humira flagged, the more probable risk now is that its rate of growth might slow for a time while Humira's replacements ramp up. That's a far easier problem to stomach.

The looming pressure on revenue might still dissuade investors seeking a typical growth stock with the potential to multiply in value. There are other businesses that don't have similar hurdles in their near-term futures.

On the other hand, investors who are willing to take on some risk should consider investing in AbbVie now. If it outperforms throughout the upcoming headwinds, shareholders are sure to benefit from the refutation of the market's expectations. And so long as earnings remain at current levels, it's still positioned to provide healthy dividend payments. With its successful history of execution, it's hard to see how AbbVie could struggle for too long.