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What: Pharmaceutical juggernaut AbbVie (NYSE:ABBV) found its wings in October and leaped higher by 11%, according to data from S&P Capital IQ, following better than expected third-quarter earnings and the termination of a megamerger which led to more immediate benefits for current AbbVie shareholders.

So what: if AbbVie was trying to save the best for last it certainly did an excellent job with the company blowing past Wall Street's third-quarter earnings expectations early Friday morning.

For the quarter AbbVie produced revenue of $5.02 billion, up nearly 8% from the year-ago period, fueled by Humira's remarkable 17.5% increase in sales. Through nine months Humira now has $9.18 billion in sales and could rival Lipitor's record of $12.6 billion for highest annual sales ever. In addition to Humira, Synthroid, Creon, Synagis and Duodopa all saw sales increase by double-digit percentages.

Profit per share came in at $0.89, up 8.5% over the prior-year period and well above the company's previous forecast which had called for $0.77-$0.79 in EPS. Furthermore, AbbVie significantly boosted its full-year EPS guidance to a fresh range of $3.25-$3.27 from prior guidance of $3.06-$3.16. Comparatively speaking, Wall Street had expected AbbVie to report $4.83 billion in sales and EPS of just $0.77. 

Source: Shire.

The other factor pushing shares higher was the company's cancelled buyout agreement of Shire (NASDAQ:SHPG) following a change in tax inversion rules by U.S. regulators. With the deal less favorable for AbbVie – AbbVie had planned on purchasing Shire and moving its headquarters overseas to take advantage of lower Irish corporate tax rates – the company announced its termination and instead immediately enacted a new $5 billion share repurchase agreement and boosted its quarterly cash dividend by 17% to $0.49 from $0.42.  

Now what: AbbVie gave investors a lot to cheer about in October with a better-than-expected earnings report, headlined by anti-inflammatory drug Humira, as well as instant money in their pocket with a dividend increase.

However, AbbVie also reminded investors that it's somewhat at a loss on how to replace Humira's sales once it does begin losing its patent exclusivity. AbbVie's initial agreement to purchase Shire was heralded as a synergy of two pipelines and hailed possible cost savings, while downplaying the tax savings aspect of the corporate move. However, once the tax savings weren't nearly as enticing AbbVie jumped ship. That implies to me that management is still struggling with ways to generate substantial growth beyond Humira.

Morgan Stanley Healthcare Conference presentation slide. Source: AbbVie.

Therein lies the conundrum with AbbVie: it's eventually going to lose Humira, but profitability and sales for the company and Humira are expected to increase substantially through 2017. With that said, I could see modest upside in AbbVie shares in the coming year or two as long as it continues to dominate in the anti-inflammatory market, but would bet on some degree of weakness if the company doesn't deliver a blockbuster pipeline drug or acquire one of its peers prior to 2017.