AbbVie Sees Humira Growth Offsetting Heart-Drug Weakness
01/30/2013| 11:49am US/Eastern
--AbbVie sees 2013 adjusted earnings in line with Wall Street view, sales flat versus 2012
--Sales of arthritis drug Humira seen growing strongly, offsetting declines for TriCor
--AbbVie says drug R&D pipeline to contribute to future sales growth
(Adds details and background throughout.)
By Peter Loftus
AbbVie (>> AbbVie Inc), the pharmaceutical company recently spun out from Abbott Laboratories (>> Abbott Laboratories), predicted that continued strong sales growth for the arthritis drug Humira would help cushion the impact of declining sales for its heart drugs during 2013.
The new company's initial forecast of 2013 earnings was in line with current Wall Street expectations, but AbbVie didn't say how it compared with what 2012 earnings would have been if AbbVie were a standalone company last year.
Sales are expected to be somewhat above $18 billion, or roughly flat with the level posted for Abbott's proprietary pharmaceutical unit last year.
AbbVie shares declined 26 cents, or 0.7%, to $37.06 in recent trading.
Abbott Labs spun off AbbVie to Abbott shareholders Jan. 1 in a bid for a higher market valuation for Abbott Labs' surviving diversified businesses, which are poised for stronger earnings growth in coming years than AbbVie.
The challenge for the newly independent AbbVie is that it is heavily reliant on Humira, whose $9.27 billion in 2012 sales accounted for about half of total revenue. Sales of another product, heart drug TriCor, are in decline because of new generic competition. Meanwhile, significant new products may not emerge from AbbVie's research-and-development pipeline for a couple of years.
"We see AbbVie as essentially a Humira story until the company is able to further diversify its business," J.P. Morgan analyst Chris Schott said.
But AbbVie executives on Wednesday tried to convince analysts and investors that AbbVie shares are a good investment, as cash flow from Humira would support a competitive dividend to reward shareholders while they wait for new products to jump-start sales and earnings growth.
AbbVie Chief Executive Richard Gonzalez said drugs in the late-stage R&D pipeline, which include a promising treatment for hepatitis C, have the potential to add between $4 billion and $6 billion in peak annual sales.
"We believe we have a very robust pipeline that can drive meaningful growth for us," he said on a conference call with analysts.
AbbVie predicted Humira sales would rise in the low double digits on a percentage basis during 2013. The company expects continued growth from newly approved uses, as well as market-share gains and geographic expansion.
AbbVie also expects double-digit sales growth for its Androgel testosterone-replacement therapy and more-modest sales growth for some other products, including the Synthroid thyroid-hormone replacement therapy.
Combined sales of TriCor and other heart drugs, including Trilipix and Niaspan, are expected to decline by roughly $1.2 billion, to less than $1 billion, for 2013. They have been hit by generic competition as well as questions surrounding efficacy.
One of the more closely watched programs in AbbVie's R&D pipeline is a potential new treatment for the liver disease hepatitis C. AbbVie is racing with Gilead Sciences Inc. (>> Gilead Sciences, Inc.) and other companies to bring to market an all-oral therapy for hepatitis C--removing an injected drug that is part of current standard therapy--which analysts expect to be a multibillion-dollar market.
Mr. Gonzalez said AbbVie hoped to be first to market with an all-oral regimen for the most-common subtype of hepatitis C in the U.S., genotype 1. He said the company expected to file for regulatory approval of the regimen in mid-2014, with potential market entry in early 2015.
AbbVie also is developing potential new treatments for cancer and multiple sclerosis.
For full-year 2013, AbbVie expects earnings of $2.66 to $2.76 a share, or $3.03 to $3.13 a share excluding certain costs for restructuring, the separation of the company and other items.
The forecast brackets the current mean estimate of analysts surveyed by Thomson Reuters of $3.08 per share.
Write to Peter Loftus at email@example.com
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