What happened
Shares of the pharmaceutical giant AbbVie (ABBV -1.03%) fell by as much as 9% in early morning trading Thursday. The drugmaker's shares have recovered since hitting this intra-day low, but they were still down by a hefty 7.8% as of 1:14 p.m. ET Thursday afternoon.
What sparked this sell-off? Ahead of the opening bell, AbbVie reported 2023 first-quater earnings that didn't sit well with some shareholders.
So what
The headline from AbbVie's latest financial report is that its flagship immunology medicine, Humira, saw a 26.1% dip in U.S. sales and a 20% drop in international sales during the three-month period, relative to the same period a year ago. Humira's sales plunged in the quarter in response to biosimilar (generic biologics) competition in both the U.S. and abroad. This event was widely anticipated by Wall Street analysts and industry insiders, but the stark reality of the situation apparently didn't sink in until today's earnings report.
Unfortunately, AbbVie's quarterly report contained additional problems beyond Humira's marked decline. Specifically, AbbVie's portion of sales from the blood cancer drug Imbruvica dropped by 27% in the U.S. and 19.7% internationally, reflecting increased competition in the hotly contested BTK inhibitor space. AbbVie also reported a 5.4% dip in global medical aesthetics sales in the first quarter of the year, thanks in large part to weakness in its Juvederm franchise.
Now what
Is AbbVie stock a buy on this pullback? As I've mentioned elsewhere, AbbVie is staring down a slew of competitive threats in immunology, oncology, and medical aesthetics right now. The pharma company does sport a deep pipeline in these areas, but it may take time for newer products to offset these forthcoming sales declines. As such, investors may want to watch this developing story unfold from the sidelines for now.
