Can Humira/Cancer Drugs Help AbbVie (ABBV) Beat Q4 Earnings?

AbbVie, Inc. (NYSE:ABBV) flagship product, Humira sales decelerated in the first three quarters of 2019 given the launch of biosimilars in international markets, especially Europe. The drug is approved for several inflammatory indications and generates more than half of the company’s revenues. The declining trend in international Humira sales is likely to have continued in the fourth quarter. However, the drugs sales in the United States are likely to have remained strong in the to-be-reported quarter.

AbbVie’s shares have risen 5.8% in the past year, underperforming the industry’s increase of 10.7%.

The Zacks Consensus Estimate for Humira stands at $4.88 billion. The Zacks Consensus Estimate for U.S. sales is pegged at $3.92 billion while that for international sales is $959 million.

Sales of its key oncology medicine, Imbruvica are likely to have been driven by increased adoption rates in the approved indications, especially front-line chronic lymphocytic leukemia (“CLL”). The drug is marketed in partnership with J&J (NYSE:JNJ) globally. The Zacks Consensus Estimate for the drug is pegged at $1.29 billion.

Sales of another leukemia drug, Venclexta, were strong in the first nine months of 2019 driven by continued uptake in the broad relapsed/refractory CLL setting and the recently approved indications for first-line CLL and AML. The trend most likely continued in the fourth quarter. AbbVie markets Venclexta in partnership with Roche (OTC:RHHBY) . The Zacks Consensus Estimate for the drug is pegged at $245 million.

Sales of other drugs like Duodopa, Creon, Synthroid, Synagis and Lupron must have increased in the quarter.

However, AbbVie’s new HCV drug, Mavyret recorded a decline in the first three quarters of 2019, primarily due to lower patient volumes in certain international markets and competitive dynamics in the United States. We do not expect to see an improvement in the fourth-quarter results. The Zacks Consensus Estimate for the HCV segment, mainly comprising Mavyret, stands at $667 million.

Overall, in the fourth quarter, higher sales of Humira in the United States, and Imbruvica and Venclexta are likely to have made up for lower sales of Humira in international markets. AbbVie is set to acquire Botox maker Allergan (NYSE:AGN) in a cash-and-stock deal for $63 billion. The deal, if it gets all necessary approvals, is expected to close in early 2020. Last week, Allergan and AbbVie announced a definitive agreement to divest Allergan's mid-stage candidate brazikumab and marketed medicine, Zenpep to AstraZeneca and Nestle, respectively in connection with the pending merger. An update is expected on the conference call. (Read More: AbbVie to Report Q4 Earnings: What’s in the Cards?)

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