UPDATE 2-Fast-growing Humira extends domination of AbbVie

Fri Jul 26, 2013 12:07pm EDT

By Ransdell Pierson

July 26 (Reuters) - AbbVie Inc's reliance on its Humira arthritis drug became even more evident during the second quarter, when the product's sales jumped 12 percent and accounted for almost 56 percent of the U.S. drugmaker's revenue.

And AbbVie officials on Friday forecast more big growth for the world's best-selling medicine.

"Humira is off to a strong start in the first half of the year, and as a result we now expect global Humira sales growth of 14 to 15 percent" for the full year, excluding the impact of foreign exchange, Chief Executive Rick Gonzalez told analysts on a conference call.

He said sales of the drug, approved for rheumatoid arthritis as well as psoriasis, Crohn's disease and other conditions, will grow largely because of expected approval for new uses and its adoption in more countries.

The bullish sales forecast comes in spite of new competition for Humira, including a recently approved pill from Pfizer Inc called Xeljanz.

AbbVie, reporting second-quarter results on Friday, said Humira sales vaulted to $2.61 billion in the period, putting it on track to become a $10 billion-a-year cash cow. Sales of the drug rose 16 percent in the first quarter, accounting for 51.7 percent of AbbVie's total sales.

The company plans to lessen its reliance on Humira by developing lucrative drugs for other diseases, including oral treatments for hepatitis C that could be approved by early 2015, and a promising treatment called ABT-199 for various blood cancers.

Three experimental AbbVie drugs, used in combination, have proven able to eliminate the potentially dangerous hepatitis C 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 to develop oral therapies for hepatitis C that dispense with interferon, an injectable drug used with current therapies that causes flu-like symptoms.

"It's a tight race, (but) we're feeling very, very good about our position," Scott Brun, AbbVie's head of drug development, said during the Friday conference call.

FAITHFUL CASH COW

In the meantime, all eyes remain on Humira, which has posted strong growth, quarter after quarter, since it was approved in 2002. Some investors have nicknamed AbbVie "Humira Inc."

"We see AbbVie as essentially a Humira story until the company is able to further diversify its business," JPMorgan analyst Chris Schott said in a research note.

Rheumatoid arthritis, the biggest use for Humira, is an autoimmune disorder in which the body's immune system mistakenly attacks healthy tissue. It affects an estimated 1.5 million Americans.

Many analysts expect Humira sales to climb long after its U.S. patent lapses in late 2016 because it will likely take rivals years to win approval for "biosimilar" forms of the drug.

AbbVie and its array of patent-protected prescription drugs were spun out early this year from Abbott Laboratories.

AbbVie reported better-than-expected second-quarter results due to Humira's showing and sales growth of its Creon digestive enzymes drug, Synagis to prevent lung disease caused by respiratory syncytial virus, and Duodopa for Parkinson's disease.

But sales of TriCor and Trilipix, drugs used to lower blood fats called triglycerides, plunged 66 percent to $107 million due to competition from cheaper generics.

The company earned $1.07 billion, or 66 cents per share, in the quarter. Excluding special items, profit was 82 cents per share, 3 cents above the average estimate of analysts polled by Thomson Reuters I/B/E/S.

Sales totaled $4.69 billion, topping Wall Street expectations of $4.54 billion.

AbbVie raised the low end of its full-year profit forecast. It now expects earnings, excluding special items, of $3.07 to $3.13 per share. In April it forecast $3.03 to $3.13.

The company said that in the year-ago second quarter, based on sales of the same products it sells now, it earned $1.27 billion, or 80 cents per share. On the same basis, sales in the latest quarter were up 4.4 percent from a year earlier.

AbbVie shares were up 1.5 percent to $44.91 near midday on the New York Stock Exchange. The shares have jumped 29 percent since the company went public at the beginning of the year, compared with an overall 18 percent advance for the drug sector.

JPMorgan's Schott maintained his "neutral" rating on AbbVie, saying it could take several years for its new drugs to arrive.

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