AbbVie’s (NYSE:ABBV) common drug Humira is dropping floor within the worldwide markets resulting from competitors from biosimilars. Whereas ABBV’s Humira faces challenges, a Wall Road Journal report highlighted that pharmacy-benefit managers (PBMs) like CVS Well being’s (NYSE:CVS) Caremark and UnitedHealth’s (NYSE:UNH) Optum Rx would profit from the entry of biosimilars within the U.S.
It’s price mentioning that Humira (used for the therapy of arthritis, ankylosing spondylitis, and Crohn’s illness) has been essentially the most profitable drug for ABBV and generated document revenues for this biopharmaceutical firm. Nonetheless, Humira is dropping floor within the worldwide market and has reported a gross sales decline prior to now two consecutive quarters as a result of entry of cheaper biosimilars.
The challenges will probably enhance additional as biosimilars, together with Amgen’s (NASDAQ:AMGN) candidate, enter the U.S. market in 2023.
ABBV’s CEO and board chairman Richard Gonzales expects the “bulk of the erosion” to happen in 2023 as biosimilars enter the U.S. market. He expects “some extra erosion in 2024, in 2025 and past.” Nonetheless, Gonzales is assured and expects to return to development.
Whereas ABBV’s Humira revenues will decline (study extra about ABV’s financials right here), the Wall Road Journal report highlighted that PBMs persuading sufferers to undertake cheaper alternate options would probably earn money.
In opposition to this background, let’s see what’s in retailer for ABBV inventory.
Is AbbVie a Purchase, Promote, or Maintain?
AbbVie inventory has a Reasonable Purchase consensus ranking on TipRanks based mostly on 5 Purchase, six Maintain, and one Promote. In the meantime, analysts’ worth goal of $156.09 implies 2.2% draw back potential.
Nonetheless, ABBV inventory carries a “Good 10” rating on TipRanks. In the meantime, hedge funds purchased 249.2K ABBV inventory final quarter.
Backside Line
The lack of exclusivity for Humira is a detrimental improvement for ABBV. Nonetheless, its diversified portfolio and upside from Skyrizi and Rinvoq might proceed to help ABBV’s development. Whereas analysts are cautiously optimistic about ABBV inventory, CVS inventory has a Sturdy Purchase consensus ranking on TipRanks. In the meantime, UNH has a Reasonable Purchase consensus ranking on TipRanks.
