AbbVie sees 2014 approval of hepatitis drugs, shares rise
(Reuters) - AbbVie Inc issued a cautious 2014 profit forecast, but said it expects U.S. approval this year for its potentially lucrative new all-oral treatment for hepatitis C, sending its shares up 3.4 percent.
The company, before releasing fourth quarter earnings on Friday, released favorable data from four additional Phase III studies of its experimental treatment for the liver disease. AbbVie previously had said it expected approval of the treatment in early 2015.
"The excellent hepatitis C safety and efficacy data published today is positive for the shares" of AbbVie, Jefferies analyst Jeffrey Holford said. But he noted that expenses for launching the medicines will now be incurred in 2014, which had not been expected.
AbbVie's treatment is a combination of five oral medications that has been shown to knock out the hepatitis C virus in as soon as eight or 12 weeks of treatment, without serious safety issues.
AbbVie's drugs have produced cure rates well above 90 percent in clinical trials, without the need to be taken with older standard drugs that cause harsh side effects and must be taken for longer periods. But the drugs, which are taken together, could face tough competition from a more convenient and highly effective once-daily pill against the hepatitis C virus being developed by Gilead Sciences Inc.
"Overall, the hepatitis C Phase III results are good" for AbbVie's drugs, "but not as good as Gilead's," BMO Capital Markets analyst Alex Arfaei said Friday in a research note.
But Arfaei said AbbVie's drugs could capture peak annual sales of $2.8 billion, even if they only claim a 10 to 13 percent share of the hepatitis C market.
AbbVie, spun off early last year from Abbott Laboratories Inc, said it earned $1.13 billion, or 70 cents per share, in the quarter. That compared with $1.54 billion, or 98 cents per share, in the year-earlier period.
Excluding special items, the company earned 82 cents per share, matching the average analyst estimate, according to Thomson Reuters I/B/E/S.
Global revenue totaled $5.1 billion and was also in line with Wall Street expectations.
AbbVie said it expects full-year earnings of $3.00 to $3.10 per share, excluding special items. That is below the average estimate of $3.16, according to a Thomson Reuters poll.
Sales of AbbVie's rheumatoid arthritis treatment Humira, the world's biggest-selling drug, jumped 13 percent in the quarter to $3.04 billion - more than offsetting lower sales for most of the company's other medicines.
Sales of AndroGel, a gel that delivers the male hormone testosterone, fell 21 percent to $289 million in the quarter, while sales of HIV treatment Kaletra fell almost 9 percent to $228 million. Combined sales of TriCor and Trilipix, treatments for blood fats called triglycerides that are now facing cheaper generics, plunged 85 percent to $29 million.
Humira represented 60 percent of total AbbVie sales in the quarter, underscoring the company's reliance on the injectable product and its need to introduce big-selling new drugs such as its hepatitis C medicines.
Although Humira's U.S. patent lapses in late 2016, AbbVie officials have predicted it will take years longer for other drugmakers to develop their own biosimilar forms of Humira and win approvals for them.
Company shares jumped 57 percent last year, on faith that Humira will not be fettered by generic competition for years, and that AbbVie will successfully develop new medicines for hepatitis C, blood cancers and other diseases that will spur continued earnings growth.
Hepatitis C affects an estimated 170 million people worldwide, and if left untreated can lead to cirrhosis, liver cancer or the need for a new liver. Current treatments include use of interferon, an injectable drug that causes flu-like symptoms.
AbbVie shares were trading at $49.93 in morning trading on the New York Stock Exchange.
(Reporting by Ransdell Pierson; Editing by Jeffrey Benkoe and Phil Berlowitz)