UPDATE 3-AbbVie delivers on strong growth of Humira arthritis drug
By Ransdell Pierson
April 26 (Reuters) - AbbVie Inc's quarterly profit rose 10 percent on surging sales of its Humira treatment for rheumatoid arthritis, and the company said it plans to launch several potentially lucrative new treatments for hepatitis C by early 2015.
Shares of AbbVie, the pharmaceuticals business spun off by Abbott Laboratories early this year, rose 2.7 percent in midday trading, amid little change for the drug sector.
Sales of Humira, which accounts for more than half of AbbVie sales, jumped 16 percent in the quarter to $2.24 billion and outpaced the company's earlier predictions of low double-digit growth for the medicine for the full year.
"Humira is off to a strong start this year, well on track to achieve our sales growth outlook," company Chief Executive Richard Gonzalez told analysts in a conference call on Friday.
AbbVie plans to lessen its dependence on Humira by developing big-selling drugs for other diseases, including a number of oral treatments for hepatitis C that Gonzalez said will likely be approved by early 2015.
Three experimental AbbVie drugs, which are used in combination with each other, have proven able to eliminate the dangerous liver virus in more than 90 percent of patients. That is well above cure rates for current hepatitis C drugs which cause harsher side effects and are used for far longer periods.
AbbVie is racing against Gilead Sciences Inc and Bristol-Myers Squibb Co, which are also testing potential blockbuster oral therapies for hepatitis C that dispense with interferon, an injectable drug used with current therapies that causes flu-like symptoms.
Gonzalez said about 175,000 patients a year were treated for hepatitis C in 2011. But he estimated the number could swell to 350,000 per year, with demand for simpler treatments for the disease which can cause cirrhosis and liver cancer and create the need for a liver transplant.
"There will be motivation to go treat those patients," Gonzalez said.
AbbVie's hepatitis C drugs could pull in annual sales of $3 billion, said Morningstar analyst Damien Conover.
AbbVie said it earned $968 million, or 60 cents per share, in the first quarter. That compared with $883 million, or 56 cents per share, in the year-earlier period.
Excluding special items, AbbVie earned 68 cents per share. Analysts, on average, were expecting 67 cents per share, according to Thomson Reuters I/B/E/S.
AbbVie said global quarterly sales rose 3.7 percent to $4.33 billion, which was in line with the average analyst estimate, according to Thomson Reuters I/B/E/S. Sales would have risen 5.1 percent if not for the stronger dollar, which hurts the value of sales in overseas markets.
Humira's 16 percent sales growth in the quarter was typical of its performance in recent years.
Many investors have fretted that newer treatments for rheumatoid arthritis could slow down growth of AbbVie's injectable drug, including a pill from Pfizer Inc called Xeljanz that was approved in the United States last November.
Humira's continued growth prospects got a possible boost late on Thursday when European regulators declined to approve Xeljanz. They cited risk of side effects and questioned how well the pill slowed down structural damage to joints.
Gonzalez, who in January shrugged off the Xeljanz threat as not "worrisome," on Friday said the European Union's rejection for Pfizer's drug will have no near-term impact on Humira. Besides rheumatoid arthritis, the AbbVie drug also garners big sales for treatment of psoriasis and Crohn's disease -- which, like rheumatoid arthritis, are linked to inflammation.
Pfizer vowed late Thursday to challenge the decision by the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP).
Morningstar's Conover predicted Xeljanz will eventually be approved in Europe, but not for at least another few years.
"Any delay will meaningfully help Humira over the next few years," Conover said.
European regulators appear to have "raised the bar" for approving drugs for rheumatoid arthritis, Conover said, wanting greater assurance they slow down progression of the disease, and not merely treat pain, swelling and other symptoms.
Gonzalez said Humira continues to have robust sales growth in Europe in large part because it is deemed able to put disease into remission "and able to hold it in remission for long periods of time."