AbbVie hikes lower end of full-year earnings guidance as Q3 sales top forecasts

Headline results for the third quarter:

Revenue

$8.5 billion (forecasts of $8.4 billion)

+3%

Profit

$1.9 billion

Versus $2.7 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Strong performance from our immunology and haematologic oncology portfolios led our growth this quarter," remarked CEO Richard Gonzalez. The executive also pointed out that the recent launches of the immunology therapies Rinvoq and Skyrizi are both "off to an impressive start."

AbbVie noted that following the recent termination of the development programme for the lung cancer treatment rovalpituzumab tesirine (Rova-T), acquired as part of its $5.8-billion purchase of Stemcentrx in 2016, it recorded an impairment charge of $823 million in the third quarter. "With this impairment there is no remaining balance on Stemcentrx-related intangible assets," the company said, adding its R&D efforts will now be focused on other therapies in its oncology portfolio.

The drugmaker also reiterated that its $63-billion pending acquisition of Allergan is slated to close in early 2020. Both companies received a second request for more information from the US Federal Trade Commission and "continue to cooperate fully with regulators." Allergan shareholders backed the merger in October.

Other results:

  • Immunology: $8.5 billion, down 1.6%
    • Humira: $4.94 billion, down 3.7%, beating consensus estimates of $4.89 billion, with quarterly sales falling 33.5% to $1 billion in markets outside the US due to biosimilar competition
    • Skyrizi: $91 million, including $76 million in the US, where the IL-23 inhibitor, partnered with Boehringer Ingelheim, was approved in April
    • Rinvoq: $14 million in the US, where it was approved in August
  • Haematologic oncology products: $1.5 billion, up 38.3%
    • Imbruvica: $1.3 billion, up 29.3%, above forecasts of $1.2 billion
    • Venclexta: $221 million
  • Hepatitis C product sales: $698 million, down 19%
    • Mavyret: $695 million, down 17.1%

Looking ahead:

AbbVie now expects earnings per share in 2019 of between $8.90 and $8.92, with the bottom end of the range lifted from an earlier forecast of $8.82. The company noted that the midpoint of the new guidance represents growth of 12.6%, up from a prior prediction of 12.1%. Analysts project AbbVie earnings of $8.93 per share on revenues of $33.2 billion for the year. The revised forecast includes a non-cash charge tied to a Skyrisi contingent consideration following regulatory approvals of the plaque psoriasis treatment in the second quarter, as well as the Stemcentrx-related impairment charge.

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