AbbVie's (ABBV) Q4 Earnings Beat, 2020 View Solid, Stock Up
Zacks Investment Research | Feb 07, 2020 02:07AM ET
AbbVie Inc. (NYSE:ABBV) reported earnings of $2.21 per share in the fourth quarter, marginally beating the Zacks Consensus Estimate of $2.20 as well as the company’s guided range of $2.17-$2.19. Earnings rose 16.3% year over year.
Meanwhile, the company’s revenues of $8.70 billion matched the company’s expectations and also came in line with the Zacks Consensus Estimate. Meanwhile, the top line improved 4.8% year over year.
Shares of AbbVie have gained 9.5% in the past year compared with the industry’s rally of 13.6%.
Quarter in Detail
Key drug Humira recorded sales increase of 0.5% on an operational basis with revenues from the same coming in at $4.92 billion. Sales in the United States climbed 9.8% to $3.97 billion. However, Humira sales in the ex-U.S. markets were down 25.4% on an operational basis and 27.3% on a reported basis to $948 million. International sales were severely affected by the launch of several direct biosimilar drugs in Europe by other pharma companies including Amgen (NASDAQ:AMGN) Sandoz and Biogen (NASDAQ:BIIB).
New immunology drugs Skyrizi and Rinvoq registered sales of $216 million and $33 million, respectively. In the previous quarter, Skyrizi and Rinvoq recorded sales of $91 million and $14 million, respectively.
While Skyrizi (risankizumab) was approved in the United States and Europe for plaque psoriasis in April 2019, Rinvoq (upadacitinib) won the FDA nod in August 2019 for moderate-to-severe rheumatoid arthritis (RA). Rinvoq was also approved in the EU during December 2019.
AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales surged 37.2% on an operational basis to $1.55 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.
Fourth-quarter net revenues from Imbruvica were $1.3 billion, up 28.9% year over year. U.S. sales of Imbruvica grossed $1.07 billion, up 28% from the year-ago figure. International sales of the drug ascended 33.8% to $223 million. Notably, AbbVie shares international profits earned from Imbruvica with Johnson & Johnson (NYSE:JNJ) .
The company’s leukemia drug Venclexta generated revenues of $251 million in the reported quarter, doubling year over year. AbbVie has partnership with Roche (OTC:RHHBY) for Venclexta.
Other products that delivered an encouraging performance include Duodopa, which recorded revenue growth of 7.1% on an operational basis and 4.1%, reportedly. While Creon generating sales only from U.S. markets witnessed a revenue increase of 11.5%.
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Chronic hepatitis C virus products recognized sales worth $632 million, down 26.4% operationally year over year. Sales of Mavyret were $628 million, down 23.1% operationally.
Other drugs that recorded sales decline include Androgel, Kaletra and Sevoflurane, which fell 69.1%, 35.3% and 3.6%, respectively, on operational basis during the quarter. Moreover, sales of Synthroid dipped 2.2%. Synagis and Lupron sales decreased 1.2% and 6.6% each on an operational basis during the quarter.
Adjusted SG&A expenses increased 5.5% to $1.9 billion while R&D expenses were $1.33 billion in the fourth quarter, sliding 0.7% year over year. Adjusted operating margin represented 44.6% of sales.
Closing in on Allergan Acquisition
AbbVie is set to acquire Botox maker Allergan (NYSE:AGN) in a cash-and-stock deal of $63 billion. Subject to necessary approvals, the deal is expected to close in the first quarter of 2020. Last month, Allergan and AbbVie announced a definitive agreement to divest the mid-stage candidate brazikumab and marketed medicine Zenpep to AstraZeneca and Nestle, respectively, in connection with the pending merger.
2020 Guidance
AbbVie expects adjusted EPS to be in the range of $9.61-$9.71 for 2020 for the standalone company which means excluding Allergan. The earnings guidance represents a year-over-year increase of 8.1% at the mid-point. The Zacks Consensus Estimate for current-year earnings per share is pegged at $8.93. The better than expected guidance resulted in shares to go up in pre-market trading. Shares were up 3.1% in pre-market trading.
The company also expects a standalone revenue growth approaching 8% on an operational basis.
AbbVie Inc. Price, Consensus and EPS Surprise
AbbVie currently carries a Zacks Rank #4 (Sell).
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