You want to put your money into a no-brainer stock. You want the kind of stock that would have been the equivalent of investing your money in Michael Jordan in the 1990s, if it had been possible.
AbbVie Inc. (NYSE: ABBV) is a research-based biopharmaceutical company that developed in 2013 as an offshoot of Abbott Laboratories. The hyperpopular drug Humira, an autoimmune and intestinal disease injection from Behçet, has flown billions straight to the bank. But what happens when the generic rivals come knocking at your door? Beginning in 2023, competition on AbbVie Inc. so it leans on Rinvoq and Skyrizi to improve the results.
Let’s take a look at what you need to know about AbbVie Inc. and the pros and cons of investing in the company. If you are looking for dividends, AbbVie Inc. offer you great opportunities.
About AbbVie Inc.
AbbVie Inc. develops and markets medicines worldwide, including these well-known names that treat the following conditions:
- HUMIRA — Behçet .’s Autoimmune and Intestinal Diseases
- SKYRIZ — psoriasis
- RINVOQ — Rheumatoid Arthritis
- IMBRUVICA and VENCLEXTA — chronic lymphocytic leukemia and small lymphatic lymphoma
- MAVYRET — chronic HCV infection genotype 1-6
- CREON – pancreatic enzyme therapy
- Synthroid – hypothyroidism
- Lentil/Constella — irritable bowel syndrome
- Lupron – advanced prostate cancer, endometriosis and central precocious puberty and anemia caused by fibroids
- ORILISSA – moderate to severe endometriosis pain
- Duopa and Duodopa — Parkinson’s disease
- Lumigan/Ganfort — reduction of elevated intraocular pressure (IOP) in patients with open-angle glaucoma (OAG) or ocular hypertension
- Ubrelvy – migraine
- Restasis – tear production
The company reported net sales of $14.583 billion for the second quarter of 2022, up 4.5% on a reported basis and 6.1% operating. Immunology portfolio net income was $7.207 billion, an increase of 17.8% on a reported basis or 19.2% on an operational basis.
US Humira net income was $4.664 billion, an increase of 9.6%. Internationally, Humira’s net income was $699 million, a decrease of 13.8% on a reported basis or 7.3% on an operational basis.
In the end, sales were disappointing and earnings per share rose to $3.37 (an increase of 11%). Sales of hematologic oncology drugs from AbbVie Inc. declined 9% due to Imbruvica’s loss of market share, thanks to competitors. The company is sticking to its full-year outlook for adjusted diluted earnings per share between $13.78 and $13.98.
Pros and Cons of Investing in AbbVie Inc.
There are many reasons to love AbbVie Inc. but if you’re committed to negative stock moves, you may want to consider the downsides of investing in AbbVie Inc. consider.
First, let’s look at some of the benefits of investing in AbbVie Inc.:
- Dividend Yield: If a company pays out more dividends than it earns, it may not be able to support its future dividend payments to investors. The company has a dividend payout ratio of 79.89% of earnings, indicating that it distributes the majority of its earnings. However, it is important to consider whether AbbVie Inc. generate sufficient free cash flow to pay its dividend. It paid out 42% of its free cash flow as dividend, a comfortable payout rate. In addition, AbbVie Inc. increased its dividend for 50 consecutive years, demonstrating a strong track record of dividend growth.
- Exposure to the marijuana industry: The burgeoning marijuana industry deserves a second and third look due to the fact that the industry itself is still in its infancy with great potential. AbbVie Inc. has successfully promoted marijuana-based drugs, including Marinol, which helps relieve nausea during chemo treatments and restores appetite during AIDS treatments. The company is unlikely to be negatively impacted by the recreational marijuana debate due to its focus on medical cannabis.
- Main class setup: Humira isn’t the only lion in AbbVie Inc’s lineup. AbbVie Inc. has about 16 drugs in his treasury, including non-household names, such as those for prostate cancer, testosterone boosters, and those that aid in pancreatic therapy.
What are the disadvantages? These are equally important to weigh up when considering your investment options. One of the biggest drawbacks is competition in the biopharma arena. Let’s see:
- Contest: In January, Humira’s first rival will be officially launched in the US, marking the end of approximately 20 years of success and a nearly $200 billion money-maker. Cheaper versions have already appeared, including in India and Europe. Not surprisingly, biosimilars AbbVie Inc. should be under great pressure. However, the company knows what’s coming, so the company has done everything it can to reduce its dependence on the drug.
- Struggling stock future: It’s not a question of the past, it’s a question of now and in a few months. Stocks can struggle to gain traction based on the competition already mentioned. Investors may want to consider investing cautiously now and pulling the line until the January 2023 headwinds come and go.
Should AbbVie Inc. be a dividend player in your portfolio?
There’s no question that Humira biosimilars pose a huge threat, potentially leaving the company in a loop. However, it is worth acknowledging that AbbVie Inc. anticipated these changes.
It is worth looking at the progress of AbbVie Inc. regarding continued sales of Rinvoq (upadacitinib) and Skyrizi (risankizumab). The company has confirmed a revenue forecast of more than $15 billion for both drugs by 2025 – to be precise, the company expects risk-adjusted sales of more than $7.5 billion for Rinvoq and more than $7.5 billion for Rinvoq. Skyrizi. However, is the company putting too many eggs in one basket? It is worth considering before investing.
In addition, before investing based on the possible events of 2025, it is important to evaluate your goals and investment timeline to determine whether the Chicago-based company deserves a place in your portfolio. It’s a good idea to make sure you’re investing as part of a diversified portfolio; check your other investments to get an idea of how they fit into your overall strategy.