AbbVie raises annual earnings guidance despite drop in Q1 sales, profit on biosimilar hit to Humira

Headline results for the first quarter:

Revenue

$7.8 billion (in line with forecasts)

-1.3%

Profit

$2.5 billion

Versus $2.8 billion

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

What the company said:

"We are off to another excellent start, including first quarter sales and earnings above expectations," remarked CEO Richard Gonzalez, adding "additionally, we have made tremendous progress advancing our pipeline, including the recent approval of Skyrizi, which has the potential to set a new standard of care in psoriasis and represents a significant long-term opportunity for AbbVie." Gonzalez said "I would expect that you will start to see Humira slow somewhat in the psoriasis category as Skyrizi starts to ramp in a very significant way.”

Skyrizi is likely to contribute about $150 million to 2019 revenue, Gonzalez added.

The CEO further noted "based on the continued business momentum, are increasing our full-year EPS guidance."

Other results:

  • Humira: $4.45 billion, down 5.6 percent, but topping estimates of $4.38 billion. Sales of the product rose 7.1 percent in the US to $3.2 billion, but slipped 27.9 percent in other markets to $1.2 billion "due to biosimilar competition".
  • Haematologic oncology products: $1.2 billion, up 42.8 percent
    • Imbruvica: $1 billion, up 34 percent
    • Venclexta: $151 million
  • Hepatitis C product sales: $815 million, down 11.3 percent
    • Mavyret: $790 million, down 6.9 percent

Looking ahead:

AbbVie now expects earnings per share in 2019 of between $8.73 and $8.83, which it noted represents growth of 11 percent at the midpoint of the range, lifted from an earlier estimate of $8.65 to $8.75.

Pipeline update:

In addition to its US approval earlier this week, Skyrizi was cleared in Japan in March for the treatment of plaque psoriasis, generalised pustular psoriasis, erythrodermic psoriasis and psoriatic arthritis, marking the first approval of the IL-23 inhibitor. The treatment was also authorised in Canada earlier this month.

For related analysis, see ViewPoints: Key takeaways from AbbVie's Q1 earnings and investor call.

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