The U.S. drugmaker will also pay about a 9% tax rate in 2018, according to Executive Vice President and CFO William Chase on the company’s fourth-quarter 2017 earnings call. That figure that will gradually move up to 13% over the next five years after the new U.S. tax law brought down corporate rates. Also, not surprisingly, Gonzalez indicated that the company will be in the market for acquisitions that might help drive growth in the 2023 to 2025 time frame. Barclays analyst Geoff Meacham was more conservative, writing in a note to investors that despite the stronger quarter, he sees AbbVie shares as fairly valued ahead of clarity on the Humira patent dispute with Amgen Inc. and the need for more data on the incoming pipeline. The company will make decisions about its current cash balance in a February meeting of the company’s board of directors, Gonzalez said, but a dividend increase is likely, as are share buybacks.

why is abbvie stock dropping

The key takeaway is that AbbVie now has an extra few years to flesh out its oncology portfolio in an effort to drive growth once Humira’s sales do eventually start to slide. Humira, after all, is slated to make up over half of the company’s revenues in the next two to three years, despite the strong commercial trajectories for its game-changing blood cancer drugs, Imbruvica and Venclexta. The company Imbruvica, for cancer, accounts for about 9 percent of company revenue. Food and Drug Administration for Venclexta for acute myeloid leukemia later this year. And based on data to date, AbbVie expects Venclexta in combination withRoche’s Rituxan could become a new chemotherapy-free standard treatment for relapsed chronic lymphocytic leukemia. Rova-T, upadacinitib and elagolix are expected to be some of the most high-value drugs to be launched in recent years, with the potential to reach a collective $4 billion in worldwide sales by 2020, according to a 2017 report from market intelligence firm Evaluate.

Abbvie Boosts 2018 Sales Expectations, Sends Stock Climbing

It also expects to push $750 million more into pension funding and increase employee compensation. Gonzalez also indicated AbbVie is developing a plan to grow its stock dividend and repurchase more shares. It expects the tax rate would slowly increase over the next five years to about 13 percent.

why is abbvie stock dropping

However, Amgen’s drug is scheduled to hit the market in Europe in the fourth-quarter of this year. As part of the unexpected increase in available cash, the company plans to invest about $2.5 billion in U.S. capital projects. David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… That’s right — they think these 10 stocks are even better buys. Get the latest local business news delivered FREE to your inbox weekly. It’s expected to reap more than $2.5 billion in 2018, Chase said.

Filter News

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. That removed the immediate threat of copycat versions of Humira entering the U.S. market, AbbVie’s stock took off like a rocket last year. A vastly improved search engine helps you find the latest on companies, business leaders, and news more easily.

why is abbvie stock dropping

Tax reform wasn’t the only reason for the upward reevaluation. Humira continues to grow sales, and its Mavyret for hepatitis C has exceeded expectations. Humira sales rose 14 percent for the quarter, hitting $4.89 billion, also benefiting from price increases. The company projects Humira sales alone of hitting $21 billion by 2020. Which is likely to raise the question among payers, some politicians and the public, if the company is benefiting from tax breaks and strong growth, why isn’t it passing some of that along to patients with more affordable drugs?

Abbvie To Award Shareholders, Increase Employees’ Pay On Rosy 2018 Forecast

AbbVieprovidedan unexpectedly strong 2018 guidance revision, largely built on the new corporate tax rate. A U.S. Food and Drug Administration decision on elagolix is expected in the second quarter of this year, while a Rova-T decision could come by the end of the year. Upadacinitib, also known as ABT-494, recently snagged a breakthrough therapy designation to treat eczema, a status that can why is abbvie stock dropping speed up regulatory decisions once the drug is filed, and sets upadacinitib up to be a successor to Humira. With AbbVie’s cash influx and bullish expectations for the year, analysts were quick to ask whether a deal was in order; Gonzalez pointed to the company’s pipeline. Per the agreement, Amgen will delay the launch of its Humira biosimilar, called Amjevita, in the U.S. until 2023.

why is abbvie stock dropping

“I would say our primary focus is looking for opportunities that can drive strong growth in that 2023, 2024, 2025 time frame,” he said. “We feel confident that we can drive growth with the late-stage pipeline ahead of that.” Autoimmune medicine Humira, the cornerstone of AbbVie’s portfolio, made $4.89 billion in the latest quarter, but it was momentum from the company’s newer hepatitis C drug, Mavyret, that seemed to surprise analysts and investors.

Leave a Reply

Your email address will not be published.