AbbVie Inc (NYSE: ABBV) will announce its fourth-quarter and full-year 2013 financial results on Jan. 31, 2014. AbbVie will host a live webcast of the earnings conference call at 8 a.m. Central time (9 a.m. Eastern).
Wall Street expects Abbvie to report earnings of 82 cents a share, according to analysts polled by Thomson Reuters. Abbvie's earnings have topped Street view in all of the past three quarters, with upside surprises ranging between 1.5 percent and 5.1 percent. Two analysts have raised their profit view in the past month.
Quarterly revenue is estimated to fall 2 percent to $5.10 billion from $5.21 billion. Abbvie sees fourth-quarter sales of about $5 billion.
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AbbVie, which was spun off from Abbott Labs (NYSE:ABT) in January 2013, gets more than half of its revenues from Humira, a mega-blockbuster drug with sales of $9.3 billion in 2012 and on track to peak at $13 billion in 2017.
Humira is indicated for a broad range of autoimmune diseases such as rheumatoid arthritis and psoriasis, which collectively make up one of the world's largest biopharma markets worth $30 billion. The consensus view calls for Humira to generate sales of $3.06 billion for the fourth quarter.
For the full year, the Street expects Abbvie to earn $3.14 a share on revenue of $18.75 billion. In 2012, the company earned $3.35 a share on revenue of $18.38 billion. The company expects earnings of $3.11 to $3.13 a share and sees revenue "somewhere above" $18.5 billion.
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Humira's growth should continue as biologics gain deeper penetration in autoimmune markets driven by more aggressive treatment strategies.
Other key products that attract investor attention includes Androgel, Kaletra, Lupron and Synthroid. If the company manages to achieve revenue increases in these products, it bodes well for valuation. On the other hand, the Street could focus on the pipeline and new indications of Humira.
Investors focus will be on 2014 guidance and pipeline updates, particularly for the HCV franchise. AbbVie's HCV regimen includes the next-generation program that could be ribavirin free, once daily and pan-genotypic. BMO Capital Markets analyst Alex Arfae estimates the HCV regimen could reach peak sales of $2.8 billion with only 10-13 percent market share
Moreover, due to the strong launch of Gilead Science's (GILD) Sovaldi, the market is heavily discounting the potential for AbbVie's HCV regimen, which is expected to launch in early 2015.
The HCV market is expected to be sustainable for at least 7-10 years as treatment is rationed for more advanced patients. There are roughly 300,000-350,000 HCV patients are estimated to be on treatment in major markets by 2014-2015.
In December, Abbvie demonstrated that 96 percent sustained virologic response in its late stage study of treatment-experienced patients with genotype 1 Hepatitis C at 12 weeks with three direct-acting-antiviral (3D) regimen plus ribavirin.
Investors should be looking for additional updates on ABT-199, a promising drug for chronic lymphocytic leukemia (CLL) that potently achieves antitumor activity while sparing platelets; but need to manage tumor lysis syndrome. ABT-199 is being developed in collaboration with Roche.
In addition, it started the second Phase 3 pivotal trial to evaluate elagolix for the treatment of endometriosis. Based on the strong phase-2 data, analysts cautiously expect approval and launch in 2016, and forecasted sales of $500 million by 2020.
The market would look for updates on studies evaluating daclizumab in patients with relapsing/remitting multiple sclerosis (MS). Daclizumab High-Yield Process (DAC HYP) is believed to target the activated immune cells that can play a key role in MS without causing general immune cell depletion. A second registrational study, the DECIDE trial, is expected to complete in mid-2014, supporting a potential regulatory submission by year-end 2014.
For the third quarter, AbbVie's net earnings fell to $964 million from $1.59 billion in the previous year. Earnings per share dropped to 60 cents from $1.01 last year. Adjusted earnings per share came in at 82 cents. Net sales increased 3.3 percent to $4.66 billion, with Humira sales rising 19.1 percent to $2.77 billion.
AbbVie shares, which trade 15.1 times its forward earnings, have dropped 3 percent since its last quarterly report. During the past 52-weeks, they traded between $35.01 and $54.78 and gained 29 percent in the past year.