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Jefferies Analyst Says AbbVie Hepatitis C Price-War Fears Overblown

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AbbVie Inc (NYSE: ABBV) shares are likely to rally with the expected near-term release of new data on two key drug candidates, an analyst said Monday.

Jefferies' Jeffrey Holford maintained a Buy rating and $80 target on the company.

AbbVie's recent selloff on fears of a price war with Gilead Sciences, Inc. (NASDAQ: GILD) over competing treatments for hepatitis C are overblown.

AbbVie shares are down nearly 15 percent in the past month following its agreement to provide the recently launched Viekira Pak hepatitis treatment to pharmacy benefits manager Express Scripts Holding Co. (NASDAQ: ESRX) at a presumed discount.

AbbVie changed hands recently at $56, down 1.6 percent.

The company recently added to fears of a downward spiral on Viekira Pak pricing with "conservative guidance," according to Holford, who called the recent selloff "a great entry point."

The company last week said Viekira sales will hit an "exit rate" of $3 billion in annualized sales at the end of 2015. But Holford estimates that 2015 sales of the drug will total $3 billion.


Meanwhile, a looming competitive threat to AbbVie's blockbuster Humira anti-inflamatory drug from Amgen Inc. (NASDAQ: AMGN) and others will be held off for up to three years by additional patent filings on Humira, according to Holford.

In the near-term, Holford sees a "rally point" for AbbVie with the release of interim data from studies on its ABT-199 blood cancer treatment and for its elotuzumab, a myeloma drug under development with Bristol-Myers Squibb Co (NYSE: BMY).

Holford also said he expects "improved visibility" on Viekira Pak sales from prescription data for February and March, and from AbbVie's first-quarter report expected in April.

Analysts in general appear to favor AbbVie, with 11 of 16 following the stock maintaining a Buy rating or equivalent. Six maintain Hold ratings, according to FactSet.

Latest Ratings for ABBV

DateFirmActionFromTo
Sep 2019UpgradesNeutralBuy
Sep 2019UpgradesNeutralBuy
Sep 2019MaintainsOverweight

View More Analyst Ratings for ABBV
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Posted-In: Jefferies Jeffrey HolfordAnalyst Color Health Care Analyst Ratings General

 

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