Why Abbvie’s Stock Is Trading Lower Today

Stockchase rating for AbbVie Inc. is calculated according to the stock experts’ signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock. Life sciences companies are getting more interest from investors.

This news is a major blow for investors because Rova-T is widely believed to hold blockbuster potential. AbbVie’s stock was trading about 7.7% lower at $111.50 per share on Tuesday, The stock has a 52-week high of $121.50 and a 52-week low of $79.11. Rinvoq, unfortunately, was a key part of AbbVie’s plan. Wall Street estimated that the drug could bring in over $10 billion in sales a little past the middle of the decade. This new warning, however, could slow of the adoption rate for this entire class of potent medications.

Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. The biopharma’s aesthetics and cancer franchises exhibited slower-than-expected growth during the quarter. New drugs from Eli Lilly and Novo Nordisk have shown striking results in studies. If insurers step up to back them, the drugs—and the stocks—could take off.

Why Abbvie Abbv Stock Is Down Today

Indeed, AbbVie’s drug pipeline remains one of the strongest in this sector. Before Tuesday’s announcement, AGN stock had fallen around 32% over the past 12 months, while ABBV was down over 15%. The acquisition could provide a boost for AbbVie’s stock down the road as it is projected to increase the company’s cash flow as well as diversify its product portfolio. AbbVie is heavily reliant on revenue from Humira, which brought in $20 billion in revenue last year. But AbbVie has been looking to diversify its portfolio as cheaper alternatives are already becoming available in Europe.

why is abbvie stock dropping today

Brian Orelli, PhD has no position in any of the stocks mentioned. Keith Speights owns shares of AbbVie and Pfizer. The Motley Fool has no position in any of the stocks mentioned.

Is Abbvie A Bad News Buy?

Looking forward, Humira sales will be impacted by biosimilar competition, implying a meaningful decline in annual sales over the coming years. In fact, this has led investors concerns, reflecting in a decline in its P/S multiple over the recent years. IF ABBV stock moved by -5% over five trading days, THEN over the next twenty-one trading days ABBV stock moves an average of 3%, with a good 66% probability of a positive return over this period. Rova-T is also viewed by investors as a key drug that will reduce the company’s reliance on the megablockbuster drug Humira in the years ahead. Humira currently accounts for about two-thirds of AbbVie’s total sales so it’s critical for the company to develop other blockbuster drugs to better diversify its revenue stream.

AbbVie’s Rinvoq is one of these JAK-inhibiting prescription drugs. Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendationsfor help on deciding if you should buy, sell or hold the stock.

Why AbbVie Stock Is Tanking Today – The Motley Fool

Why AbbVie Stock Is Tanking Today.

Posted: Fri, 29 Jul 2022 07:00:00 GMT [source]

There is likely to be a revision in peak sales estimates for Rinvoq, given that the new ruling will imply Rinvoq can be used as only second or third line of treatment. That said, the recent decline in ABBV stock appears to be overdone. Most of the physicians prescribe janus kinase inhibitors for arthritis only after they have tried a tumor necrosis factor inhibitor. Also, AbbVie is looking to expand the use of Rinvoq into other indications, including, atopic dermatitis, psoriatic arthritis, and ulcerative colitis.

Abbv Overview

The company released its first-quarter earnings before the market opened on Friday, and while most of the numbers were fairly positive, there were certain trends that may have bothered investors. The good news is the company reported revenue of $13.54 billion, up 4.1% year over year, and earnings per share of $2.51, compared to EPS of $1.99 in the same period a year ago. The bad news was AbbVie reported lower sales of cancer drug Imbruvica and immunology stalwart Humira, thanks to competition from newer therapies.

On a similar note, the biopharma’s blood cancer franchise saw its global revenue sink by an eye-popping 9.1% in the second quarter, relative to the same period a year ago. AbbVie’s normally strong cancer unit contracted in the most recent quarter mainly due to a 17.1% drop in https://xcritical.com/ net revenue for the all-star blood disorder medication Imbruvica. The drug appears to be losing market share to newer competitors such as AstraZeneca’s Calquence. Much of this growth in ABBV stock over the recent years can be attributed to favorable changes in its revenues.

Biotechs have strong balance sheets, better than a few years ago. Better to buy individual biotech stocks over ETFs. His long-term concern comes out of Washington which is proposing drug-pricing laws. One mixed quarter doesn’t worry him; the stock has been a war horse. ABBV stock is down 7.5% as of Friday morning but is up 6.8% since the start of the year. However, things quickly turn grim for ABBV stock with its revenue of $13.54 billion.

  • As it stands right now though, Rinvoq accounts for less than 3% of AbbVie’s revenue, and its potential was still unclear.
  • The drugmaker’s Q2 results aren’t sitting well with shareholders today.
  • Though shares are down today, it’s still up 5% YTD.
  • Are off by 7.8% in Wednesday afternoon’s trading session following a decision from the Food and Drug Administration to require a heart-risk warning on the label of its arthritis treatment Rinvoq.
  • Even with a share price drop on Friday, the stock is up more than 6% this year.
  • View our full suite of financial calendars and market data tables, all for free.
  • As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Along with synergies, AbbVie expects the acquisition to provide significant cash flow generation. AbbVie and Allergan generated a combined operating cash flow of $19 billion in 2018. AbbVie is looking to use the new cash flow to reduce its debt and continue its dividend growth, which are reasons for investors to be happy. The FDA’s decision was rooted in data regarding Pfizer’s arthritis medicine Xeljanz. The two drugs in question are built around the same JAK-inhibiting approach, and in its later-stage testing it was shown to increase the risk of blood clots and related heart problems.

Sign Up NowGet this delivered to your inbox, and more info about our products and services. The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. AbbVie closed at $156.35 in the latest trading session, marking a -1.89% move from the prior day. This move lagged the S&P 500’s daily gain of 1.61%. Meanwhile, the Dow gained 1.45%, and the Nasdaq, a tech-heavy index, added 0.36%.

Abbvie Seeks U S, Europe Ok Of Rinvoq For Crohn’s Disease >abbv

Even after this drop, though, AbbVie’s shares aren’t exactly cheap (with trailing P/E of about 30), and this JAK regulatory news will take a while to fully understand. All told, investors might be better off to sidestep this beaten-down biotech stock for the time being. The Internal Revenue Service has proposed rule changes that could significantly impact how beneficiaries will manage inherited retirement accounts. AbbVie’s strengths such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Biotech M&a Activity Expected To Pick Up

Another negative for ABBV stock comes from its outlook for the full year of 2022. The company cut its previous EPS guidance from $14 to $14.20 to a new why is abbvie stock dropping today outlook between $13.92 and $14.12. That’s not a good look for AbbVie with the midpoint below Wall Street’s estimate of $14.11 per share for the year.

While the FDA may be erring on the side of caution for now, ABBV stock is currently feeling the heat. Investors were banking on Rinvoq revenues to largely replace those lost by Humira. Humira is the latest drug to fall off the patent cliff for AbbVie, a concern for many long-term investors. These sorts of violent swings have become more commonplace in the Big Pharma space of late. However, most of the recent volatility has been to the upside, as investors seek growth stocks with better valuations.

Blood cancer drug Venclexta had a reported $473 million in revenue, up 16.9% year over year. AbbVie ABBV stock fell over 15% through Tuesday morning trading. The significant drop came after the company announced that it will acquire Allergan PLC AGN in a deal worth approximately $63 billion. The drop brought AbbVie stock to a new 52-week low of $66.56 per share. Meanwhile, Allergan stock jumped about 27% after the news.

Deja una respuesta

Tu dirección de correo electrónico no será publicada. Los campos obligatorios están marcados con *