Markets responded too negatively to AbbVie (NYSE:ABBV) after the drug giant reported Q4 results that missed analyst estimates. Management issued weak Q4 estimates that disappointed markets.
So what? If generics are pressuring revenue, investors already know about it. And with management already expecting pressure for HUMIRA, the selloff should prove short-lived.
Q4 Results
AbbVie reported EPS of $1.90, up 28% from last year. Adjusted operational sales grew by 8.3%, helped by sales from its hematological oncology portfolio. HUMIRA sales came in weak, falling 15% Y/Y after direct biosimilar competition in Europe hurt results.
Management is unfazed by the weaker Humira numbers. It already planned for the long view on the competition. As discounting hurts total revenue, AbbVie expects double-digit EPS growth and strong revenue growth.
This is despite $2 billion in revenue erosion expected in 2019.
Its hematological oncology segment is performing well because of Venclexta and Imbruvica. The unit brought in $4 billion and will grow by 25%, adding another $1 billion to growth.
Looking ahead, the firm has applications for immunology therapies, risankizumab for treating psoriasis and upadacitinib for treating rheumatoid arthritis.This drug is also in Phase 3 programs for treating atopic dermatitis and ulcerative colitis.
With analysts setting a $96.40 price target on ABBV stock, chances are low that they will downgrade the stock.
Disclosure: Author owns shares of AbbVie
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