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ABBV – Market expectations are for Uniform ROA to fall to historical lows, and management may have concerns about their Aesthetics franchise, product approvals, and Vraylar

June 15, 2021

  • AbbVie Inc. (ABBV:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 13.3x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about their Aesthetics franchise, product approvals, and Vraylar
  • Specifically, management may lack confidence in their ability to sustain neuroscience revenue growth, maintain strong top- and bottom-line performance, and cultivate prescription growth across their new immunology agents. Moreover, they may be concerned about Humira biosimilar competition across international markets, the potential of their pivotal program for Skyrizi in Crohn’s disease, and the risk-benefit profile of Rinvoq across all indications. Furthermore, management may lack confidence in their ability to drive innovation and investment opportunities in their Aesthetics franchise, obtain commercial approval for new products and indications, including oral CGRP, and launch additional indications for Imbruvica and Venclexta. Additionally, management may lack confidence in their ability to exceed adjusted EPS guidance, gain market share, and further generate expense synergies from their Allergan transaction. Finally, they may be concerned about the pandemic’s impact on new patient starts and they may be overstating the potential of Vraylar as a Schizophrenia treatment