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AbbVie Stock Rises After Leerink Partners Upgrades Its Rating

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Key Takeaways

  • AbbVie shares rose after a Leerink Partners analyst upgraded the stock's rating to outperform.
  • The improved rating comes after ABBV stock previously fell nearly 19% this month after two drug study setbacks.
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AbbVie’s (ABBV - Free Report) shares rose 3.0% on Friday after Leerink Partners analyst, David Risinger, upgraded his rating on the stock from Market Perform to Outperform.

Excluding Friday’s movement, AbbVie stock fell almost 19% in November, mainly due to the failure oftwo registration-enabling phase II studies on emraclidine, its once-daily oral candidate for treating schizophrenia. Earlier this month, AbbVie announced that the studies failed to meet their primary endpoints. Emraclidine was added to AbbVie’s pipeline with the acquisition of Cerevel this year and it was a key reason for AbbVie to buy the company, thus bringing the deal’s viability into question.

Additionally, the drug and biotech sector saw a major downturn in the past couple of months due to disappointing third-quarter sales and profits, guidance cuts, pipeline setbacks and the appointment of Robert F. Kennedy Jr., a vaccine skeptic, as the head of Health and Human Services. All these factors have significantly hurt the shares of almost all large drugmakers.

AbbVie stock has gained 14.2% so far this year compared withan increase of 5.8% for the industry.

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Here’s Why Leerink Upgraded ABBV Stock

According to Risinger, the stock's decline due to the emraclidine-related pipeline setback and the “election-related downdraft” should be used as a buying opportunity.

Risingerexpects continued strong sales of AbbVie’s key immunology drug, Skyrizi, especially for the newly approved ulcerative colitis (UC) indication. Skyrizi was approved for the UC indication in June in the United States and in July in the EU this year.The analyst also said that the share price does not fully reflect proper expectations for the company’s pipeline and future M&A deals, which can boost growth.

Moreover, Risinger feels that though emraclidine failed, some other pipeline candidates added from the Cerevel acquisition may demonstrate positive data from phase II studies in the coming years. In September, AbbVie announced positive top-line data from a pivotal phase III TEMPO-1 study, which evaluated another candidate, tavapadon, added from the Cerevel acquisition, in adults with early Parkinson’s disease. The study achieved its primary endpoint.

Patients who received two fixed doses (5mg and 15mg) of once-daily tavapadon for 26 weeks achieved statistically significant improvement in disease burden. AbbVie intends to use the data from this study while seeking regulatory approval for tavapadon in PD indication.

ABBV’s Successful New Drugs — Skyrizi and Rinvoq

AbbVie lost patent protection for its key blockbuster drug, Humira, in the United States in January 2023 and in the EU in 2018. Sales of Humira are declining due to loss of exclusivity and biosimilar erosion. However, AbbVie has successfully navigated Humira's loss of exclusivity by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well due to approvals in new indications.

Both these medicines are likely to support top-line growth in the next few years. In the popular inflammatory bowel disease (IBD) space, which includes two conditions, UC and Crohn’s disease (CD), Rinvoq's uptake continues to be strong. Skyrizi is performing extremely well in CD and expects rapid access for the UC indication, as discussed above. AbbVie expects Skyrizi and Rinvoq to double their respective sales in IBD indications in 2024.

ABBV Boasts an Attractive Pipeline

AbbVie has several early/mid-stage pipeline candidates with blockbuster potential. The company expects several regulatory submissions, approvals and key data readouts in the next 12 months.

For blood cancers and solid tumors, AbbVie has an exciting and diverse pipeline of promising new therapies like ABBV-383, a BCMA CD3 bispecific, in late-stage development for relapsed/refractory multiple myeloma and Teliso-V, a promising c-Met ADC, which has been developed for nonsquamous non-small cell lung cancer. AbbVie filed a biologics license application to the FDA for Teliso-V in September.

AbbVie’s Zacks Rank & Stock to Consider

AbbVie has a Zacks Rank #3 (Hold).

AbbVie Inc. Price and Consensus

AbbVie Inc. Price and Consensus

AbbVie Inc. price-consensus-chart | AbbVie Inc. Quote

Some better-ranked drug/biotech companies are Gilead (GILD - Free Report) and Pfizer (PFE - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for Gilead’s 2024 earnings have risen from $3.75 to $4.32 per share over the past 30 days. For 2025, earnings estimates have risen from $7.28 to $7.38 per share over the same timeframe.Year to date, Gilead’s shares have risen 11.4%.

Gilead’s earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 15.46%.

The Zacks Consensus Estimate for Pfizer’s earnings has risen from $2.67 to $2.91 per share for 2024 over the past 60 days, while that for 2025 has risen from $2.86 to $2.92. Pfizer’s shares have lost 10.9% year to date.

Pfizer beat on earnings in each of the trailing four quarters, delivering an average surprise of 74.50%.


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