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Drug giant AbbVie reported strong third-quarter earnings, reflecting the acquisition of Botox owner Allergan earlier this year.
Courtesy of AbbVie
One product that’s seeing a V-shaped recovery is the anti-wrinkle treatment Botox, now owned by
AbbVie.
In the company’s September quarter, sales of such aesthetic products jumped 70% from the June stretch. Prescription product sales grew nicely, too, allowing the North Chicago-based firm to beat September earnings forecasts and raise its 2020 year outlook.
In Friday morning trading after the earnings announcement, AbbVie stock (ticker: ABBV) rose 5% to $84.90, as the
S&P 500 index,
a broad measure of the market, dropped 2% in the background.
“[W]e continue to demonstrate strong execution across our portfolio and remain encouraged by the overall recovery trends,” said CEO Richard Gonzalez on the Friday morning conference call.
AbbVie acquired Botox owner Allergan two quarters ago and that combination resulted in a 52% year-over-year increase in AbbVie revenue in the September quarter, to $12.9 billion. Measured on their own, AbbVie’s businesses grew 4% from the year-ago period. The company’s biggest product, the autoimmune treatment Humira, grew sales in the U.S. by 8%, to $4.2 billion, but suffered attrition abroad where it now competes against biosimilar versions.
The company is racing to develop other drugs ahead of the impact of biosimilars on Humira’s U.S. sales, and Gonzalez thinks AbbVie’s succeeding. Two second-generation autoimmune treatments, Rinvoq and Skyrizi, will deliver $2.2 billion in combined revenue this year, he said on the conference call. In December, AbbVie will host an investor conference to highlight its portfolio of products for autoimmune diseases like arthritis and psoriasis.
For the September quarter, AbbVie earned $2.3 billion, or $1.29 a share. Adjusting for stock options and special charges that investors ignore these days, the company said it earned $2.83 a share, compared with a year-earlier number of $2.33 (adjusted the same way). The recent quarter’s result beat the consensus average by 7 cents.
The quarter’s strength prompted AbbVie to raise its guidance for the year’s “adjusted” earnings per share to $10.48 from $10.40. Strong cash flow also led it to raise the dividend to $5.20 a year from $4.72, starting in February.
Most analysts share AbbVie’s optimism, and the average price target for the stock among those surveyed by FactSet is $110—leaving plenty of upside.
Write to Bill Alpert at william.alpert@barrons.com
