AbbVie Q4 Earnings Beat Expectations on Humira Strength

AbbVie Inc. (ABBV) reported fourth quarter 2014 earnings of 89 cents per share, up 8.5% from the year-ago earnings and surpassing the Zacks Consensus Estimate of 85 cents.

Revenues increased 5.1% to $5.371 billion in the fourth quarter of 2014, in-line with the Zacks Consensus Estimate. Results were boosted by Humira's strong performance.

Including one-time items, the company reported a loss of 51 cents in the fourth quarter of 2014 compared to earnings of 70 cents per share in the year-ago period. Reported quarter figure includes charges related to the cancelled Shire (SHPG) deal.

The company’s full year 2014 earnings increased 5.7% to $3.32 per share. Revenues increased 6.2% to $19.9 billion.

Humira Remains the Growth Driver

Key drug Humira recorded growth of 10.6% with revenues coming in at $3.363 billion. U.S. sales increased 15.8% ($1.932 billion). Ex-U.S. sales increased 4.3% to $1.431 billion. Growing awareness, favorable clinical data, additional indications and expansion into new markets should help the product to continue contributing significantly to the top-line.

Other products that performed well include Creon (up 30.6% to $151 million), and Duodopa (up 14.7% to $56 million). Recently launched hepatitis C virus (HCV) product Viekira Pak recorded sales of $48 million.

Dyslipidemia franchise (comprising products like TriCor/TriLipix and Niaspan) revenues increased 13.6% to $104 million.

Confirms Outlook

AbbVie confirmed its earnings guidance of $4.25 to $4.45 per share. The Zacks Consensus Estimate of $4.51 is above the guidance range.

Our Take

AbbVie’s fourth quarter results were strong with the company beating on earnings expectations thanks to strong Humira sales. AbbVie is looking to reduce its dependence on Humira and the recent approval and launch of HCV treatment, Viekira Pak, is a step in this direction.

AbbVie's pipeline represents significant potential — the company's late-stage pipeline includes several compounds or indications in phase III development targeting therapeutic areas like HCV, immunology and endometriosis.

AbbVie is a Zacks Rank #2 (Buy) stock. An equally well-ranked stock in the biotech sector is Alnylam Pharmaceuticals, Inc. (ALNY). A better-ranked stock in the biotech sector is Celgene (CELG) with a Zacks Rank #1 (Strong Buy).

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