AbbVie posts fantastic Q2 numbers but its stock falls. Here's why -- and why the negative reaction is missing the bigger story.
AbbVie Inc (NYSE:ABBV) did it again. The big drugmaker posted fantastic numbers in its first-quarter results reported in April. AbbVie announced more great results with its second-quarter earnings update on Friday.
Net revenue jumped 19% year over year to $8.28 billion. Adjusted earnings per share (EPS) soared nearly 41% in the second quarter to $2. Both numbers topped Wall Street estimates. AbbVie even boosted its full-year 2018 adjusted EPS guidance from between $7.66 and $7.76 to between $7.76 and $7.86.
Despite AbbVie's blowout Q2 results, the market frowned. The big pharma company's share price declined in early trading on Friday. Here are two reasons behind this surprising response -- and one big reason why investors actually should be excited about AbbVie's Q2 update.
AbbVie did it again. The big drugmaker posted fantastic numbers in its first-quarter results reported in April. AbbVie announced more great results with its second-quarter earnings update on Friday.
Net revenue jumped 19% year over year to $8.28 billion. Adjusted earnings per share (EPS) soared nearly 41% in the second quarter to $2. Both numbers topped Wall Street estimates. AbbVie even boosted its full-year 2018 adjusted EPS guidance from between $7.66 and $7.76 to between $7.76 and $7.86.
Despite AbbVie's blowout Q2 results, the market frowned. The big pharma company's share price declined in early trading on Friday. Here are two reasons behind this surprising response -- and one big reason why investors actually should be excited about AbbVie's Q2 update.
A big reason to be excited
There were actually several reasons why investors should have responded more enthusiastically to AbbVie's impressive Q2 results. However, I think I can roll the main reasons for excitement into one statement: Non-Humira growth should be the big storyline for AbbVie going forward.
Of course, Mavyret will continue to be a key way that AbbVie's non-Humira sales grow. But we can't leave out Imbruvica. Q2 sales for the cancer drug soared nearly 36% year over year. Approvals for more indications could be on the way.
Speaking of approvals, AbbVie just snagged a big one for Orilissa (elagolix). The FDA approved the drug in managing pain associated with endometriosis on July 24. AbbVie is also evaluating Orilissa in a late-stage study targeting treatment of uterine fibroids.
In April, AbbVie submitted for FDA approval of risankizumab in treating psoriasis. The drug, along with another candidate, upadacitinib, is an important component of AbbVie's strategy to maintain its dominance in the immunology market even after Humira loses patent protection. They're also key reasons why market research firm EvaluatePharma ranks AbbVie's pipeline as No. 2 in the industry.
But could sinking sales for Humira keep the spotlight off of AbbVie's other bright spots? Maybe. However, don't believe the doomsayers predicting that AbbVie is in trouble. The company recently signed an agreement to keep Mylan (NASDAQ:MYL)'s biosimilar to Humira off the U.S. market until 2023 in a similar deal that it made last year with Amgen (NASDAQ:AMGN). AbbVie should have plenty of time for its current drugs and pipeline candidates to generate growth and offset any decline in sales for Humira.
Is the negative reaction to AbbVie's second quarter warranted? I don't think so. Imbruvica, Mavyret, Orilissa, a loaded pipeline, and a great dividend should turn investors' frowns into smiles over the long run.