AbbVie - $ABBV.US

What’s AbbVie Business Model?

AbbVie Inc. researches and develops pharmaceutical products. The Company produces pharmaceutical drugs for specialty therapeutic areas such as immunology, chronic kidney disease, hepatitis C, women’s health, oncology, and neuroscience. AbbVie also offers treatments for diseases including multiple sclerosis, parkinson’s, and alzheimer’s disease.

What AbbVie is doing in more details?

AbbVie is a global, research-based biopharmaceutical company. The company has a portfolio of products that include a broad line of therapies that address some of the world’s most complex and serious diseases.

Its primary product is Humira, best known as a rheumatoid arthritis drug; it accounts for some 40% of the company’s total net revenues. Other key products include cancer treatment Imbruvica and hepatitis C drug Mavyret.

Products are sold globally, but the US is AbbVie’s largest market, accounting for more than 75% of total sales. In mid-2020, the company completed the acquisition of Allergan.

Where AbbVie is Operating?

AbbVie focuses on treating conditions such as chronic autoimmune diseases (including rheumatoid arthritis, psoriasis, and Crohn’s disease), cancers, and viral conditions (including hepatitis C).

It also has products that address metabolic or hormonal conditions, endocrinology ailments, and neurological disorders (including Parkinson’s disease).

Top product Humira is a biologic therapy that treats several autoimmune conditions and generates around 40% of total revenue. Leukemia and lymphoma drug Imbruvica accounts for more than 10% of sales, and hepatitis C medication Mavyret account for about 10% of sales.

Other major offerings include Creon (enzyme insufficiency), Lupron (endometriosis), and Synthroid (hyperthyroidism).

The company’s pipeline currently includes more than 90 compounds, devices or indications in development individually or under collaboration or license agreements and is focused on such important specialties as immunology, oncology, aesthetics, neuroscience, eye care and women’s health along with targeted investments in cystic fibrosis.

Of these programs, more than 50 are in mid- and late-stage development. It has a number of partnerships with other pharma firms to develop new treatments, including Calico Life Sciences (age-related diseases).

Where is the geographical reach of AbbVie?

AbbVie collects over 75% of sales from the US. Key foreign markets include Japan, Germany, Canada and France.

The Chicago-based company has six primary manufacturing facilities in the US, including Puerto Rico, (Illinois, Massachusetts, and Michigan) and five key international plants (in Italy, Ireland, Germany, Singapore, France, Costa Rica, and Brazil).

It operates seven US R&D facilities in Illinois, California, New Jersey, and Massachusetts, as well as in Germany and United Kingdom.

What is AbbVie’s Sales and Marketing Strategy?

AbbVie uses a combination of dedicated commercial resources, regional commercial resources and distributorships to market, sell and distribute its products worldwide.

In the US, AbbVie markets directly to physicians, consumers, managed care providers, insurers, pharmacy benefit managers (PBMs), hospitals, and government agencies (including the US Department of Veterans Affairs and the Department of Defense).

Products are primarily distributed through independent wholesalers; some sales are made directly to pharmacies and patients. Internationally, AbbVie principally markets to key opinion leaders, payers, physicians, and health systems and sells products directly and through distributors.

Three wholesale distributors ? McKesson, Cardinal Health, and AmerisourceBergen ?account for nearly all of US sales.

No individual wholesaler accounted for greater than 38% of AbbVie’s 2020 gross revenues in the US. AbbVie’s advertising expenses were $1.8 billion in 2020, $1.1 billion in 2019 and $1.1 billion in 2018.

What is AbbVie Financial Performance?

AbbVie has seen steady revenue growth the last three years. For this period, revenue posted a 40% increase since 2018.

In 2020, revenue grew 38% to $45.8 billion primarily driven by revenue growth related to Skyrizi and Rinvoq as well as the continued strength of HUMIRA in the US.

Net earnings declined around 40% in 2020 to $4.6 billion.

AbbVie ended 2020 with $8.4 billion in cash, a decrease of $31.5 billion from 2019.

Operating activities contributed $17.6 billion, while investing activities used $37.6 billion (primarily for acquisitions), and financing activities also used $11.5 billion for dividends payment and long-term debt and finance lease repayments.

What is AbbVie Future Strategy?

AbbVie may pursue acquisitions, technology licensing arrangements, and strategic alliances, or dispose of some of its assets, as part of its business strategy.

The company intends to continue to advance its mission in a number of ways, including: maximizing the benefits of the Allergan acquisition to create a more diversified revenue base with multiple long-term growth drivers; growing revenues by leveraging AbbVie’s commercial strength and international infrastructure across Allergan’s therapeutic areas and ensuring strong commercial execution of new product launches; continuing to invest in and expand its pipeline in support of opportunities in immunology, oncology, aesthetics, neuroscience, eye care and women’s health as well as continued investment in key on-market products; expanding operating margins; and returning cash to shareholders via a strong and growing dividend while also reducing debt.

The combination of AbbVie and Allergan creates a diverse entity with leadership positions across immunology, hematologic oncology, aesthetics, neuroscience, women’s health, eye care and virology.

AbbVie’s existing product portfolio and pipeline is enhanced with numerous Allergan assets and Allergan’s product portfolio benefits from AbbVie’s commercial strength, expertise and international infrastructure.

What are AbbVie’s Mergers and Acquisitions?

In early 2021, Allergan Aesthetics, an AbbVie company, announced that it entered into a warrant agreement with Chicago-based Cypris Medical, a privately held medical device company.

After the completion of a clinical trial within 2021, Allergan Aesthetics will have the right to exercise an option to acquire Cypris Medical, including the company’s Xact device. The planned clinical trial will evaluate the safety and effectiveness of Xact in treating midface descent as well as for neck lifts.

In May 2020, AbbVie completed the acquisition of Allergan plc (Allergan).

The acquisition of Allergan creates a diversified biopharmaceutical company positioned for success with a comprehensive product portfolio that has leadership positions in key therapeutic areas of immunology, hematologic oncology, aesthetics, neuroscience, eye care and women’s health.

AbbVie’s existing product portfolio and pipeline is enhanced with numerous Allergan assets and Allergan’s product portfolio benefits from AbbVie’s commercial strength, expertise and international infrastructure.

What is AbbVie’s Background?

Biopharmaceutical research company AbbVie was formed in 2012 by former parent Abbott Labs, which spun off AbbVie into a separate publicly-traded company in 2013.

As the company faced the patent expirations of many of its top sellers in the following years (including Aluvia, TriCor, Niaspan, and Humira), it focused on expanding its R&D operations.

After a failed attempt to purchase Irish rare-disease medication manufacturer Shire for $54 billion in 2014, AbbVie instead pumped up its oncology pipeline by acquiring Pharmacyclics for $20.8 billion in 2015 and Stemcentrx for $5.8 billion in 2016.

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