AbbVie raises profit forecast, but Humira concerns weigh on shares

(Reuters) - AbbVie Inc’s better-than-expected quarterly profit and revenue and raised full-year earnings forecast failed to impress investors who focused on the uncertainty around its blockbuster drug Humira as it struggles against cheaper rivals.

FILE PHOTO: A screen displays the share price for pharmaceutical maker AbbVie on the floor of the New York Stock Exchange July 18, 2014. REUTERS/Brendan McDermid

The company’s shares fell as much as 2.2 percent to $76.91.

“The results or guidance raise do not fundamentally change the story, in our view, as concerns around Humira’s longevity remain,” Credit Suisse analyst Vamil Divan said.

Sales of Humira, which treats rheumatoid arthritis and psoriasis, have accounted for the bulk of AbbVie’s total revenue for years. However, revenue from the drug fell for the first time in years in the January-March quarter.

The company is under pressure to demonstrate it can compensate for the expected drop in revenue from Humira when it loses patent protection in the United States, its biggest market, in 2023, by successfully launching new medicines and adding innovative treatments to its pipeline.

On a conference call with analysts, the company said the impact new rivals in Europe are having on Humira sales is as expected.

In the first quarter, Humira brought in sales of $4.45 billion, a fall of 5.6 percent from last year but ahead of the $4.38 billion forecast by eight analysts polled by Refinitiv.

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AbbVie executives talked up Skyrizi, a psoriasis treatment that won U.S. approval earlier this week which it hopes will help it retain its hold on the market.

“We’re pretty comfortable with how the biosimilars are sorting themselves out,” Chief Executive Officer Richard Gonzalez said on the call.

“I would expect that you will start to see Humira slow somewhat in the psoriasis category as Skyrizi starts to ramp in a very significant way.”

Skyrizi is likely to contribute about $150 million to 2019 revenue, Gonzalez added.

AbbVie raised its adjusted earnings forecast for the year to between $8.73 and $8.83 per share, from $8.65 to $8.75 and said it expected continued business momentum to drive growth.

Excluding items, the company earned $2.14 per share, beating estimates of $2.05, according to IBES data from Refinitiv.

Net revenue dropped 1.3 percent to $7.83 billion but beat the average analyst estimate of $7.75 billion.

AbbVie’s net earnings fell to $2.46 billion in the three months ended March 31, from $2.78 billion a year earlier.

Reporting by Tamara Mathias in Bengaluru; Editing by Maju Samuel