Last month, AbbVie (ABBV 2.10%) submitted a New Drug Application to the U.S. Food and Drug Administration (FDA) for the compound ABBV-951 to treat motor fluctuations in patients with advanced Parkinson's disease.
The pharma company expects to make more submissions to other regulatory authorities in the months ahead for the experimental treatment. Thus, it's worth asking the following question: What will the global sales potential of the drug be if approved by the FDA and other agencies? Let's dig into the Parkinson's disease market to find out.
NYSE: ABBV
Key Data Points
An encouraging treatment for a challenging condition
Parkinson's disease is a progressive and chronic neurological disorder with symptoms including tremors, muscle rigidity, slow movement, and balance difficulty. The motor symptoms result from the loss of dopamine-producing brain cells, according to AbbVie.
Advanced Parkinson's disease can lead to involuntary movements, which makes a patient's daily activities more difficult. AbbVie says an estimated 50% of Parkinson's disease patients progress to advanced disease within two years of diagnosis, and 80% to 100% of patients reach that stage after 10 years.
The prognosis of Parkinson's disease is characterized by two states: 'off' and 'on'. Patients in an 'off' state have experienced a recurrence of their symptoms like tremor and stiffness. Patients in an 'on' state have achieved control over their symptoms with their treatment. The goal for healthcare providers and their patients is to improve quality of life and slow down the progression of Parkinson's disease.
Patients with advanced Parkinson's disease were randomized into two groups for AbbVie's phase 3 clinical trial that evaluated the efficacy of the drug in controlling motor fluctuations. One group received the experimental drug under the skin and also got oral placebo capsules for the standard of care medicines (carbidopa and levodopa). And the control group received oral capsules containing immediate-release carbidopa and levodopa and an under-the-skin delivery of a placebo ABBV-951 substance.
Though specific data from the phase 3 clinical trials hasn't yet been released, AbbVie noted that the group receiving ABBV-951 and oral placebo capsules for carbidopa and levodopa fared significantly better. This was measured by the amount of 'on' time that each group achieved. These initial results suggest that ABBV-951 could be a game-changing treatment for patients with advanced Parkinson's disease.
Image source: Getty Images.
Billion-dollar annual sales potential
With more than 10 million people living with Parkinson's disease, the already massive market is increasing. Analysts expect the global Parkinson's disease market will grow 8.1% annually, from $4.5 billion in 2018 to $8.4 billion by 2026.
Management teams tend to look through the prism of rose-colored glasses when making forecasts. But this doesn't appear to be the case with AbbVie. The company anticipates that ABBV-951 will achieve $1 billion in peak annual sales potential, making it a blockbuster drug. This implies that ABBV-951 will capture approximately 12% of the global Parkinson's disease market, which seems reasonable for the drug's efficacy and a company with AbbVie's marketing capabilities.
For context, this would represent a respectable 1.7% sales bump over the $59.6 billion in sales that AbbVie is expected to haul in during 2022.
AbbVie is a blue-chip bargain
Aside from ABBV-951, AbbVie has nearly five dozen other compounds in development for a variety of indications as of April. Even with its mainstay medicine Humira losing exclusivity in the U.S. next year, this should help grow AbbVie's revenue and earnings over the long haul.
And at a forward price-to-earnings (P/E) ratio of 10.7, the stock is moderately cheaper than the pharmaceutical industry average of 12.7. All told, AbbVie could be a great stock to buy and hold forever.
