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AbbVie Stock Declined 4.2% on Friday Despite Upbeat Q2 Performance

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Setting aside a significant portion of funds for litigation may have hurt investors’ confidence, which also impacted ABBV stock on Friday.

AbbVie (NYSE: ABBV) has reported encouraging results for the second quarter of 2022. However, following the results, shares of the company declined 4.2% on Friday. This could be due to weakness in the company’s hematologic oncology and aesthetics portfolios, and its decision to set aside $2.20 billion for litigation.

The biopharmaceutical company reported adjusted earnings of $3.37 per share in the second quarter, up from the previous year’s figure of $3.03 per share. The metric also beat the Street estimate of $3.32 per share.

AbbVie’s global net revenues of $14.58 billion rose 4.5%, reportedly, over the prior year and 6.1% on an operational basis. However, the metric marginally missed the consensus estimate of $14.60 billion. The upside can be largely attributed to the strength in the company’s immunology and neuroscience portfolios.

The global net revenues from the immunology portfolio were $7.21 billion, up 17.8% from the year-ago period. Within the segment, the performance of AbbVie’s rheumatoid arthritis drug, Humira, remained strong, as its net revenues of $5.36 billion jumped 5.8% year over year. However, biosimilar competition has started weighing on the drug’s sales in the global markets.

The company also saw combined international Skyrizi and Rinvoq net revenues of $1.84 billion in the June quarter.

Global net revenues of $1.66 billion from the neuroscience portfolio rose 13.7% from the same quarter last year. Under this portfolio, the company witnessed a year-over-year rise of 12.6% and 13.9% in the net revenues from Botox Therapeutic and Vraylar, respectively.

However, the hematologic oncology portfolio witnessed a 9.1% year-over-year fall in global net revenues to $1.65 billion in the reported quarter. Within the portfolio, a 16.2% year-over-year rise in the net revenues from Venclexta was offset by a 17.1% year-over-year decline in the total net revenues of Imbruvica.

Also, the global net revenues from the company’s aesthetics portfolio were down 4.4% year-over-year to $1.371 billion in the reported quarter. A 19.5% decline in Juvederm, largely due to the COVID-19-related restrictions in China and the Russia-Ukraine war, weighed on the 18.9% year-over-year rise in the net revenues from the Botox Cosmetic arm.

AbbVie’s 2022 Outlook

AbbVie has confirmed its adjusted EPS guidance range of $13.78-$13.98 for the full-year 2022. This guidance includes an unfavorable impact of 23 cents per share related to acquired IPR&D and milestones spending done year-to-date through the second quarter of 2022.

ABBV Sets Aside $2.20B for Litigation

AbbVie apportioned $2.20 billion in the second quarter of 2022 to resolve several lawsuits against the company’s Allergan unit over past sales of opioid products. According to a report by Reuters, AbbVie has been charged with more than 3,000 lawsuits from state and local governments across the nation over the drug.

Wall Street Is Cautiously Optimistic about ABBV Stock

According to TipRanks, the Street is cautiously optimistic about ABBV stock and has a Moderate Buy consensus rating based on 10 Buys, three Holds, and one Sell. AbbVie’s average price forecast of $163 implies 13.6% upside potential to current levels. Shares of the stock are up 8.9% so far in 2022.

TipRanks data shows that financial bloggers are 91% Bullish on ABBV, compared to the sector average of 71%.

Key Takeaways for ABBV Investors

AbbVie has been witnessing strength in the demand for Skyrizi and Rinvoq. The company is well on track to deliver combined global annual net revenues of $7.5 billion for Skyrizi and Rinvoq. In fact, Skyrizi has been approved by the FDA as the first and only specific interleukin-23 inhibitor for the treatment of adults with moderate to severe Crohn’s disease.  

Moreover, significant progress in ABBV’s product pipeline instills optimism among investors. Considering the primary catalysts supporting the company, investors can consider this pharmaceutical company to reap handsome returns in the long run.

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