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Since AbbVie Inc.'s (NYSE: ABBV) inception, investors have been fretting about the eventual demise of its lead drug, Humira. The aging blockbuster has slowed down a bit during the first three months of the year, but the rest of the company's product lineup stepped up and delivered.
An immediate hit to Humira would still be devastating, but AbbVie's first quarter report suggests the company can keep the needle moving forward even if the record-breaking biologic doesn't reach the lofty revenue target the company touted last year. Here are a few hints in AbbVie's first quarter report that suggest the foundations that this company has built under the house of Humira can stand on their own.
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Tough target to hit?
Humira's most important U.S. patent expired last year, but Americans probably won't have access to cheaper biosimilar versions until 2023. That's why AbbVie confidently predicted annual Humira sales would climb to $21 billion by 2020 last October.
First quarter sales of the blockbuster rheumatoid arthritis therapy put it on pace to achieve $18.8 billion in a year. That's certainly not bad, but it finished the previous quarter on a $19.6 billion annualized run rate.
AbbVie attributed 2017's 18.5% gain in the U.S. to increasing patient populations and price increases, not a gain in market share. If insurers and pharmacy benefit managers play their cards right, anti-inflammatory drugs entering major markets could make it awfully hard to continue growing Humira sales with price increases alone.
Image source: Getty Images.
New lead growth driver?
AbbVie's new hepatitis C virus (HCV) treatment is priced to compete with Gilead Sciences (NASDAQ: GILD) market-leading treatments and the strategy's working. Mayvret has been a disaster for Gilead's HCV franchise, but it did more to push AbbVie's needle forward than any other product during the first quarter. AbbVie reported $919 billion in HCV antiviral sales, $656 million more than during the same period last year and $409 million more than during the previous quarter.
AbbVie's superstar leukemia tablet, Imbruvica put on another impressive showing. Sales of the tablets rose 39% to a $3.0 billion annualized run rate. Strong contributions from Mayvret and Imbruvica made this the first quarter I can remember where overall sales growth exceeded Humira's.
Before we get too excited about Mayvret's hugely successful launch, it's important to remember the boom-and-bust nature of past HCV treatment launches. Gilead Sciences recorded $19.1 billion in HCV sales in 2015, but the segment hit an annualized run rate of just $6 billion in the fourth quarter. Don't be surprised if chasing each other to the bottom causes Mayvret sales to plateau by the end of 2018.