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A month has gone by since the last earnings report for AbbVie (ABBV). Shares have lost about 2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AbbVie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
AbbVie Beats on Q2 Earnings & Sales
AbbVie reported earnings of $2.34 per share for the second quarter of 2020, comfortably beating the Zacks Consensus Estimate of $2.24 and exceeding the guided range of $2.10-$2.16. Earnings rose 3.5% year over year.
Revenues of $10.43 billion beat the Zacks Consensus Estimate of $10.12 billion. Sales rose 26.3% on a reported basis and included a partial quarter of revenues from Allergan. However, on a comparable operational basis, sales declined 5.3% due to the negative impact of the COVID-19 pandemic.
The comparable operational growth rate includes full quarter, current year, and historical results for Allergan on a pro forma basis and are presented on a constant currency basis.
However, the company said that the impact of COVID-19 related business disruption on legacy AbbVie drugs was less severe than expected. However, for the legacy Allergan side of business, the company saw significant COVID-related impacts on BotoxTherapeutic and the aesthetics business. Overall, second-quarter sales were hurt by more than $900 million due to COVID-19. However, the company said that by the end of June, the total business had recovered to more than 90% of pre-COVID levels.
The Q1 inventory stockpiling benefits were largely reversed in the second quarter.
The total revenues included approximately $8.4 billion of legacy AbbVie sales, which performed above expectations due to continued robust performance in both hematology/oncology and immunology franchises. The Allergan portfolio contributed $2 billion to total revenues. Revenues include Allergan’s product revenues from the date of the acquisition till quarter end.
Quarter in Details
In the immunology franchise, Humira sales declined 0.7% (down 0.2% on a comparable operational basis) to $4.84 billion as higher U.S. sales were offset by a decline in international markets.
Sales in the United States climbed 4.8% to $3.97 billion, driven by higher demand, which was partially offset by lower new patient starts due to COVID-19 impact. However, the negative impact of COVID-19 on Humira sales was lower than expected. Humira sales in the ex-U.S. markets were down 17.4% on a comparable operational basis and 19.9% on a reported basis to $863 million.
International sales were severely impacted by the launch of several direct biosimilar drugs in Europe and other international markets.
In 2020, Humira is expected to record revenue growth of approximately 8% in the United States versus 7% expected previously. International Humira sales are expected to approach $3.5 billion versus the previous expectation of $3.4 billion in 2020.
New immunology drugs Skyrizi and Rinvoq registered sales of $330 million and $149 million, respectively. In the previous quarter, Skyrizi and Rinvoq recorded sales of $300 million and $86 million, respectively. Strong sequential growth in sales of both drugs in the past couple of quarter reflects strong uptake. However, the company did witness modest delays to new patient starts for Skyrizi in the quarter due to COVID-19.
AbbVie expects Skyrizi global revenues of approximately $1.4 billion. Rinvoq global revenues are expected to be approximately $600 million versus $500 million expected previously.
AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales rose 25.8% on an operational basis to $1.59 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.
Second-quarter net revenues from Imbruvica were $1.29 billion, up 17.2% year over year operationally. driven by continued penetration for patients with CLL. U.S. sales of Imbruvica grossed $1.06 billion, up 19% from the year-ago figure. AbbVie logged $233 million of international profit sharing with J&J, up 9.4% year over year.
Venclexta generated revenues of $303 million in the reported quarter, reflecting growth of 81.5% year over year on an operational basis, driven by continued share gains in first-line CLL and relapsed/refractory CLL indications.
In 2020, Imbruvica global revenues are expected to be approximately $5.5 billion while Venclexta global sales are expected to be approximately $1.3 billion.
In Aesthetics franchise, Botox Cosmetic net revenues were $226 million, a decrease of 43.1% on a comparable operational basis while Juvederm Collection of filler recorded sales of $113 million, down 60.4% on a comparable operational basis. Sales of both the products were hurt as aesthetics health care providers were closed during the initial phase of COVID-19. However, several aesthetics accounts reopened by the end of June and the company said that revenue trends are recovering due to considerable pent-up demand.
In 2020, AbbVie expects global aesthetics sales of approximately $2.4 billion, including approximately $1 billion from Botox Cosmetic and approximately $650 million from Juvederm.
In Neuroscience franchise, Botox Therapeutic net revenues decreased 22.3% on a comparable operation basis to $297 million as COVID-19 pandemic hurt sales of this physician administered product. However, Vraylar sales were up 70.4% to $192 million. Duodopa sales rose 4.6% to $118 million.
In 2020, AbbVie expects global neuroscience sales of approximately $3.5 billion, including approximately $1.4 billion from Botox Therapeutic and approximately $950 million from Vraylar.
In Eye Care, Restasis sales of $144 million declined 19.5% on a comparable operational basis. In Women’s Health, Lo Loestrin’s sales of $80 million declined 8.9% on a comparable operational basis. AbbVie’s new drug Orilissa recorded sales of $31 million same as in the previous quarter.
In 2020, AbbVie expects global Eyecare sales of approximately $2.1 billion, including approximately $700 million from Restasis, assuming no generic competition in 2020.
Among other key drugs. Mavyret sales totaled $376 million in the quarter, down 51.4% on a comparable operational basis due to competitive pressure in the United States and lower patient volumes due to COVID-19 as well as lower patient volumes in certain international markets.