AbbVie (ABBV) crushed third-quarter earnings views Friday, but an analyst suggested 2018 guidance is setting the Big Pharma giant up for a fourth-quarter miss.
XOn the stock market today, AbbVie stock sank 0.8%, to 79.56. Shares of pharmaceutical companies broadly dipped a fraction at the stock market's close.
Piper Jaffray analyst Christopher Raymond acknowledged AbbVie's third-quarter "beat and raise," but asked, "What about the fourth quarter?" In the third quarter, adjusted profit topped estimates by 13 cents. But AbbVie only raised its full-year outlook by 10 cents at the midpoint.
"Implications with a 13-cent beat and a 10-cent raise (for 2018) are for a potential fourth-quarter miss, as consensus currently models $1.96 adjusted EPS," he said in a report to clients. The new outlook for 2018 implies fourth-quarter adjusted earnings will come in at $1.89-$1.91 a share.
Humira Sales Beat Expectations
For the third quarter, AbbVie reported adjusted earnings of $2.14 per share, rising 51.8% to top the averages of analysts polled by FactSet and Zacks Investment Research for $2.01.
Total sales of $8.236 billion grew 17.8%. That narrowly topped estimates from analysts polled by FactSet for $8.233 billion, but lagged the average of analysts polled by Zacks for $8.26 billion.
Humira proved to be a bright spot, advancing 9% on a reported basis to $5.124 billion. Humira is AbbVie's biggest drug. It treats several forms of arthritis, Crohn's disease and plaque psoriasis. In the U.S., third-quarter Humira sales grew 12.5% to about $3.55 billion.
Internationally, Humira sales brought in about $1.58 billion. But that's where Humira sales are likely to soften. Last month, biosimilar versions of Humira from Amgen (AMGN), Novartis (NVS), Mylan (MYL) and a Samsung-Biogen (BIIB) joint effort called Samsung Bioepis, launched in Europe. Biosimilars are nearly identical copies of biologic drugs.
AbbVie said on the conference call with analysts Friday that biosimilar versions of Humira are available at 10%-80% discounts in Europe, according to Reuters. U.S. versions of the drug aren't expected until 2023 under agreements with AbbVie.
Piper Jaffray's Raymond noted that worldwide Humira sales beat expectations for $5.107 billion in the third quarter. The beat was driven by growth in U.S. Humira sales.
Guidance Indicates Fourth-Quarter Miss
Other sales were mixed. Hepatitis C drugs generated $862 million, but that missed expectations for $898 million. Among them, Mavyret generated $839 million. Mavyret treats six genotypes of hepatitis C and is a stout rival to Gilead Sciences' (GILD) hepatitis C drugs.
Respiratory drug Synagis brought in $97 million, but that lagged views for $109 million. General anesthetic Sevoflurane missed with $86 million vs. estimates for $97 million.
But sales of cancer treatments Imbruvica and Venclexta beat with $972 million and $96 million. Analysts expected $899 million and $84 million, respectively.
AbbVie also raised its adjusted earnings guidance for the year. The pharmaceutical company now sees adjusted profit of $7.90-$7.92 per share, up 10 cents at the midpoint from its prior view for $7.76-$7.86 per share. At the midpoint, adjusted earnings would rise 41.3% year over year.
The new outlook topped the average of analysts polled by FactSet for $7.88. Analysts also called for full-year sales of $32.92 billion.
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The post AbbVie Sinks Despite Earnings Beat As Guidance Suggests Looming Miss appeared first on Investor's Business Daily.
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