AbbVie Stock: The 20-Year Humira Monopoly Ends; So, What’s Next?

AbbVie‘s (ABBV) two-decade Humira monopoly came to an end Tuesday after Amgen (AMGN) launched its biosimilar knockoff at a 55% discount to the original. But AbbVie stock advanced.

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The biosimilar called Amjevita is the first to hit the U.S. market. But through deals with AbbVie, a handful of others will also launch this year.

Biosimilars are lower-cost versions of biologic drugs. The first Humira biosimilars launched in Europe in 2018 and AbbVie saw sales of its biggest moneymaker — a treatment for a host of inflammatory conditions — plummet.

“With our track record of developing and manufacturing biologics and decades of experience in inflammation, Amgen is uniquely equipped to supply this biosimilar medicine while reducing costs,” said Murdo Gordon, Amgen’s executive vice president of global commercial operations, in a written statement.

On today’s stock market, AbbVie stock rose 1.4% to close at 147.75. Amgen stock advanced 0.3% and closed at 252.40.

AbbVie Stock: Humira Impact Will Be Near Term

AbbVie isn’t shying away from the looming Humira challenge. During the J.P. Morgan Healthcare Conference this month, Chief Executive Richard Gonzalez called the U.S. biosimilar launch “the event that we have all been long planning for here at AbbVie.”

He expects the launch of biosimilars from companies like Amgen, Organon (OGN), Boehringer Ingelheim and Pfizer (PFE) to impact AbbVie’s near-term performance. Amgen says it will offer Amjevita at two prices — 5% and 55% below the list price for Humira. The different prices give options to health plans and pharmacy benefit managers.

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Evercore ISI analyst Umer Raffat says the 5% discounted version will likely see better performance as “it offers more rebates to the middleman.”

Meanwhile, AbbVie stock has hit the skids since early January. Shares touched a high point on Jan. 6 at 168.11, barely nudging out of a saucer-with-handle buy point at 167.85. But the breakout turned out to be a flop and shares have since plunged 13% below that high point.

2023 Will Offer An Earnings Floor: CEO

AbbVie’s Gonzalez says Humira is available to more than 90% of people in the U.S. with insurance. He also said the company is well positioned to absorb the impact of the Humira loss of exclusivity and return to growth in 2025.

“When we issue formal 2023 guidance on the fourth-quarter call, it’s important to note that the lower end of our (earnings per share) outlook range will represent floor earnings for the company,” he said during the conference.

Currently, AbbVie stock analysts polled by FactSet expect AbbVie to earn $11.74 in 2023, a decline of 15% vs. estimates for 2022. They also call for Humira sales of $13.35 billion this year, tumbling 37% compared with expectations for last year.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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