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AbbVie: Poised For Continued Growth In 2018

Mar. 06, 2018 4:39 PM ETAbbVie Inc. (ABBV)AMGN, ABT23 Comments
Stefano Sengos profile picture
Stefano Sengos


  • Growth and diversity in pipeline look to be reflective on share price in 2018.
  • New Capital Return Program expected to aid in a dividend hike in coming quarters.
  • Humira will continue to lead the immunology drug market in 2018.

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Business Description

AbbVie (NYSE:ABBV) is a pharmaceutical company that discovers, develops and markets both biopharmaceuticals and small molecule drugs. It originated in 2013 as a spin-off of Abbott Laboratories. They produce pharmaceutical drugs for specialty therapeutic areas such as immunology, chronic kidney disease, hepatitis C, women's health, oncology, and neuroscience. They also offer treatments for diseases such as multiple sclerosis, Parkinson and Alzheimer's.

Humira Patent Dispute

AbbVie recently won a patent infringement case involving top selling drug Humira (60% of revenue). The case occurred last August when AbbVie filed a complaint against Amgen (AMGN) in response to a 351K biologics license application filed by Amgen with the FDA seeking approval to market a drug that is biosimilar to Humira. AbbVie now has protection over their most profitable product for the next 5 years as sales are expected to increase for the drug.

New Capital Return Program

Since their origination as a spin-off of Abbott Laboratories (ABT), AbbVie has been seen as top prospect for dividend growth investors. Recently, they are one of the best companies from a dividend perspective, seeing a 140% increase in dividend payment since it went public. On February 15th, AbbVie announced their capital return program that encompasses two parts: an increase in their quarterly dividends from $0.71 to $0.96 and a new $10 billion share repurchasing authorization. Management mentioned that their repurchasing program surpasses any existing repurchasing authorizations. Although there is no concrete information as to how quickly this program will be completed, AbbVie is one of the best companies for shareholders and

This article was written by

Stefano Sengos profile picture
A committed and driven Finance and Economics student at the University of Delaware. Healthcare analyst for the school run investment club, where I focus on large/specialty pharmaceutical equities and ETFs to add value to our $2MM AUM portfolio.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (23)

tikigod18 profile picture
Best thing about this drop is that ABBV goes ex soon. I will get the new higher dividend buying more shares than before.

Unless you are a trader, it's the income that matters, not the daily price of your holdings.

Will it get to $140 this year? No idea, but it will before it is sold. My son already owns some, and will inherit mine. he won't be selling either.

I used to deliver Meals on Wheels to a legally blind lady whose mother bought some small amount of PG MANY years ago. They turned into a really nice amount of money because it just sat there compounding for 50-60 plus years. PG was founded October 31, 1837. Not going anywhere IMO.

We all worry too much about daily fluctuations. Is your income this month higher than it was last March? If so, don't care so much about the principal, as long as you don't own crap that might cut the divvy, or halt it altogether.
Stefano Sengos profile picture
Thank you for all your great comments! AbbVie is a great company with a lot of growth for the future. To answer some concerns about the recent news about ROVA-T, I do not believe this will affect the share price negatively in the future. The markets reaction is normal and does bring up some concerns about the drugs riskiness, but their pipeline (with Imbruvica and Elogolix) is very strong and should fend off biosimilars that will come in 2023 when Humira's patent expires. ROVA-T still has the potential to hit the market and become successful, but like most things in the pharmaceutical industry, time will tell. Great time to buy in my opinion!
tikigod18 profile picture
why down today?----> Trump suing the drug manufacturers.

fake news.
probably correcting.. i can see it going back to 105ish and going back up.. it has had a spectacular run.. really nice growth and income stock... for the long haul.. thinking of picking some up .. to go with my PFE and TEVA :)
why down today?
tikigod18 profile picture
People are so short sighted. ABBV was $100 only a few months ago, and last fall was much lower.

Corrections DO happen.
Gordon Gekko Greed profile picture
My next purchase will either be ABBV or MO in the next few weeks. If MO is around $65 or less when I get ready to buy that will be my first choice.
somedata1 profile picture
Long ABBV. May add more when it's trading at 100/share. Only if GILD could have half success as ABBV's stock performance... Long GILD and will add at 64/share.

CRSP and EDIT are worth 11 shares of speculation. I swear gene editing will be the future of medicine.
You won't get $100/share for ABBV unless we get a recession of sorts. ABBV is much better than GILD. I really don't get why someone who invest in GILD over ABBV
somedata1 profile picture
I think you are right.

I already got in at 112/share for ABBVIE and am planning to buy more.
$112 is a good price when they are raising their dividends and I believe the stock will hit $140+ this year. I own three Jan 2019 calls up 450% and I'm not selling. They will be worth much more if the stock hits $140 or even $150.

I have missed out on many stocks in the past waiting for that elusive dip and when it happened, I was too scared to take advantage. Happened with NVDA and others.
"Growth and diversity in pipeline look to be reflective on share price in 2018."

There were so many who called this company a failure and a one trick pony. Stock price has proved otherwise.

Far from it !
PACKER man profile picture
Just added more shares to my ABBV position; exc article; rest writing and substance...thx!
Abbvie seems to be digesting its outsized gains but is still above its 50 day. I share the optimism but patience is key here.
Buyandhold 2012 profile picture
Stefano, AbbVie is up by 81.6% in the past 12 months.

Even better than Amazon, which is only up by 80.09% in the past 12 months.

And AbbVie pays a decent dividend.

So much for the naysayers who kept saying that AbbVie was a one trick pony too reliant on Humira.
snaimpally profile picture
Thanks for the very informative article. I switched from PFE to ABBV mid-2017 and it has performed very well. I have picked up a little more stock recently. It pays a decent dividend and the stock has appreciated nicely.
LookingAtStocks profile picture
Good article...I'm long ABBV and looking to buy more when /where appropriate.
Thanks for updating financial and pipeline information. ABBV is one of my largest holdings and even if it sits where it is, it's the best place for my money because of their expansive dividend policy. Surprised you don't own any of the stocks mentioned. I think biotech is the safest place to be unless the Dems take control of the House in November.
Yechwando profile picture
Out of curiosity, how do Democrats affect biotechnology stocks?
CSYJ profile picture
Hey Stefano,

How come you forgot to list Gilead in your competitive landscape for the competing HCV DAA's (Gilead's Harvoni and Epclusa) agaidnt ABBV's Mavyret? You do ko GIlead executve management declared a while back they would defend their market share aggressively and thus far, they have done so $ for $ against ABBV for HCV DAA market right, as evidenced by discounts at VA, which prompted the VA to declare they would rid just about all veetrans with HCV in a year or two. DId you know about that?
Now this is an article where you can tell that the author actually knows what he is talking about. I constantly see articles on many stocks including this one, where it's clear that the author didn't do their research.

This was actually a very informative article. Very bullish on ABBV with a few Jan 2019 calls and some shares I recently purchased. $140-$150 this year can definitely happen.
BA Man profile picture
Agree with btw3006. New follower. Glad to be in the 1st 10.
Keep this writing style, full of information without causing my eyes to glaze over!
Long ABBV for the duration.
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