(Reuters) - AbbVie Inc reported a better-than-expected quarterly profit on Thursday, on higher sales of its rheumatoid arthritis treatment Humira and its Hepatitis C drugs, leading the company to raise its full-year earnings forecast.
The company’s shares, which have been under pressure due to setbacks to its drug pipeline, gained about 3.6 percent to $95.22 in late morning trading.
Sales from the company’s Hepatitis C franchise soared to $919 million, easily beating consensus estimate of $572 million, according to brokerage Bernstein.
The revenue rise was fueled by sales of newly approved Mavyret, and comes when the market for Hepatitis C treatments in the United States is steadily shrinking as the impact of the disease lessens. AbbVie said it now expects $3.5 billion in sales from Hepatitis C drugs this year.
The company’s growth in Hepatitis C comes in contrast to Bristol-Myers Squibb Co, which also released earnings on Thursday. Bristol’s hepatitis C franchise all but disappeared with sales of just $3 million.
“We have an asset that will allow us to be able to stay highly competitive and in a leadership position going forward,” AbbVie CEO Rick Gonzalez said about Mavyret on the company’s conference call, playing down concerns about the shrinking market. “We think we have the right tools to be effective over the long term.”
Still, rheumatoid arthritis treatment Humira - the world’s best-selling prescription medicine - brings in nearly two-thirds of AbbVie’s total revenue. Quarterly sales of the drug rose to $4.71 billion, a 20 percent increase from last year.
The company has been aggressively protecting the pricey drug, negotiating with rivals Amgen Inc, Samsung Bioepis and Biogen Inc to fend off U.S. competition from their biosimilars.
AbbVie said it doesn’t expect direct biosimilar competition to Humira in the United States until at least 2022.
Cancer treatment Imbruvica raked in $762 million in sales, just above expectations.
The drugmaker raised 2018 adjusted earnings per share expectation to between $7.66 and $7.76, from between $7.33 and $7.43 previously forecast.
AbbVie said the forecast accounts for an effective tax rate approaching 9 percent this year, following the new U.S. tax law.
On its conference call, AbbVie said that it was going to be investing more aggressively in research and development (R&D) as a result of the tax reform.
But its forecast for 2018 R&D spending as a percentage of its sales is actually down from last year. The company said it expects to spend just over 16 percent of its sales on R&D this year, down from 17.1 percent in 2017.
Net earnings rose to $2.78 billion, or $1.74 per share, in the quarter, from $1.71 billion, or $1.06 per share, a year earlier.
Excluding items, AbbVie earned $1.87 per share, ahead of analysts’ estimate of $1.79.
AbbVie’s net revenue rose 21.4 percent to $7.93 billion, ahead of average estimate of $7.59 billion.
The company also said it would roll out part of a previously announced share repurchase program by May 1, and buy back up to $7.5 billion of stock.
Reporting by Tamara Mathias and Mrinalini Krothapalli in Bengaluru and Michael Erman in New York; Editing by Shounak Dasgupta, Sriraj Kalluvila and Frances Kerry