Shares of AbbVie (ABBV) tacked on another 1.32% today to a close at $96 continuing a run that began back on January 31 at $81.02.
The trend picked up momentum on February 7 after the company reported fourth quarter earnings with better than expected sales for its blockbuster Humira drug that has picked up competition from biosimilar in Europe. The stock climbed 5.9% that day.
Now the shares are getting an added boost from better than expected quarterly numbers from Allergan (AGN). AbbVie is in the process of acquiring the Botox-maker.
I added AbbVie to my Dividend Portfolio on February 11, 2020. The shares are up 14.60% since then as of the close today February 11. The stock pays a forward dividend of 4.98%. (The stock paid a 5.62% forward dividend when I added it to that portfolio.)
The good news in AbbVie’s own fourth quarter earnings report was that Humira sales fell off more slowly than projected by Wall Street analysts. Analysts had projected Humira sales of $4.85 billion and actual sales came in at $4.92 billion. That may not seem like much of a difference but expectations are for Humira sales to fall off a cliff in the face of increased competition from biosimilars in Europe and a 2023 patent expiration in the United States. (AbbVie has used a thicket of manufacturing patents to extend the effective patent expiration on Humira in the United States from December 2016.) Each month of stronger than expected sales gives AbbVie not only more cash but more time for new drugs such as Skyrizi for psoriasis, Rinvoq for rheumatoid arthritis, and Imbruvica and Orilissa for cancers. AbbVie is in the process of expanding the labels for those drugs to cover more applications and larger markets. The uncertainty about the exact timing of the fall off in Humira sales is a key reason that AbbVie shares yield as much as they do.
And meanwhile on the Allergan acquisition front, that company reported earnings of $5.22 a share (before one-time items) on sales of $4.35 billion. That was a 21.7% jump in earnings year over year and a 6.6% increase in revenue. Analysts had been expecting Allergan to report earnings of $4.61 a share and $4.095 billion in sales. Allergan shares were up 1.3% on the news.
AbbVie’s acquisition of Allergan is expected to close in the first quarter of 2020.