Us Government Could Seek Over $1 Billion From J&J For Cancer Treatment Costs

AbbVie Inc. ABBV reported fourth-quarter 2024 adjusted earnings of $2.16 per share, which beat the Zacks Consensus Estimate of $2.13. The reported earnings also exceeded the company’s guidance of $2.06-$2.10 issued earlier this month. Earnings declined around 23% year over year due to increased IPR&D expenses incurred during the quarter.

See the Zacks Earnings Calendar to stay ahead of market-making news.

ABBV’s revenues of $15.10 billion beat the Zacks Consensus Estimate of $14.87 billion. Sales rose 5.6% year over year on a reported basis and 6.1% on an operational basis.

Revenues in the fourth quarter were driven by robust sales of key drugs Rinvoq, Skyrizi, Venclexta and Vraylar, coupled with significant contributions from newer drugs, namely Ubrelvy, Elahere, Epkinly and Qulipta. Sales of Humira and Imbruvica declined year over year.

All growth rates mentioned below are on a year-on-year basis and at constant exchange rates (CER).

Immunology Drugs Drive ABBV’s Top Line

In immunology, net revenues from Rinvoq for the fourth quarter totaled $1.83 billion, up 47.1%. The upside can be attributed to label expansions of the drug to include new patient populations in recent quarters. Rinvoq’s sales beat the Zacks Consensus Estimate and our model estimate of $1.72 billion and $1.70 billion, respectively.

Net revenues recorded from Skyrizi were $3.78 billion, up 57.9%. This surge in sales was due to label expansions of the drug to include new patient populations in recent quarters. Skyrizi sales beat the Zacks Consensus Estimate of $3.58 billion and our model estimate of $3.56 billion.

AbbVie’s flagship product Humira recorded a sales decline of 48.7% to $1.68 billion in the fourth quarter. Sales in the United States declined 54.5% to $1.25 billion, while ex-U.S. market sales were down 20.5% on an operating basis to $436 million. Humira sales missed the Zacks Consensus Estimate of $1.94 billion and our model estimate of $1.92 billion.

This substantial decline in Humira sales was due to the drug’s loss of exclusivity in the United States since January 2023. The drug lost its exclusivity in ex-U.S. territories following the launch of generics in 2018.

ABBV’s Neuroscience Drugs’ Performance

Sales from the neuroscience portfolio increased 19.9% to $2.51 billion, driven by higher sales of Botox Therapeutic, depression drug Vraylar, and migraine drugs Ubrelvy and Qulipta. Neuroscience sales beat the Zacks Consensus Estimate and our model estimate of $2.47 billion and $2.49 billion, respectively.

While Botox Therapeutic sales rose 13% to $873 million, sales of Vraylar increased 17.1% to $924 million.

Sales of Ubrelvy totaled $303 million, up 29.6%. Qulipta sales increased 76.2% to $201 million.

ABBV’s Oncology Drugs’ Performance

AbbVie’s oncology/hematology sales rose 12.9% to $1.69 billion in the quarter, as sales from the recently acquired ovarian cancer drug Elahere and rising Venclexta sales more than offset the declining Imbruvica sales. While the metric beat the Zacks Consensus Estimate of $1.67 billion, the same was in line with our model estimates.

Fourth-quarter net revenues from Imbruvica totaled $848 million, down 6.2%. However, sales of the drug beat the Zacks Consensus Estimate of $806 million and our model estimate of $819 million. ABBV markets this drug in partnership with Johnson & Johnson JNJ.

U.S. sales of J&J-partnered Imbruvica declined 8.6% to $625 million due to rising competition from novel oral treatments. AbbVie shares international profits earned from Imbruvica with J&J. The company’s share of profit from the drug’s international sales rose 1.2% to $223 million.

AbbVie’s leukemia drug Venclexta generated revenues of $655 million in the reported quarter, reflecting 13% growth. AbbVie markets Venclexta in collaboration with Roche RHHBY. Sales from the Roche-partnered drug missed both the Zacks Consensus Estimate and our model estimate of $674 million.

Elahere, added from this year’s acquisition of ImmunoGen, generated revenues of $148 million compared with $139 million reported in the third quarter of 2024. Sales of the drug beat the Zacks Consensus Estimate of $145 million as well as our model estimate of $146 million.

Epkinly sales, which comprise AbbVie’s share of profit from U.S. revenues and product revenues from international markets, amounted to $40 million in the quarter compared with $43 million in the previous quarter.

ABBV’s Aesthetics & Other Drugs

AbbVie’s aesthetics portfolio sales were down 4.4% to $1.30 billion. Botox Cosmetic sales fell 3.4% to $687 million. Juvederm sales declined 15.1% to $279 million.

Eye care portfolio sales rose 11.4% to $646 million. Sales of Ozurdex, a key drug in the portfolio, rose 1.4% to $120 million.

ABBV’s Cost Discussion

Adjusted SG&A expenses rose 0.6% year over year to $3.56 billion. Adjusted R&D expenses amounted to $2.27 billion, up 18.3%.

Full-Year 2024 Results

AbbVie reported revenues of $56.33 billion, up 4.6% year over year. The company’s adjusted earnings for the full year were $10.12 per share, down 8.9% from the year-ago period’s levels.

ABBV’s Updated Financial Outlook Encouraging

For 2025

AbbVie issued fresh guidance for 2025. It expects adjusted earnings per share (EPS) to be in the range of $12.12-$12.32. This guided range does not include any impact from the company’s proposed acquisitions and potential milestone payments. The Zacks Consensus Estimate for 2025 earnings is pinned at $12.18 per share.

Beyond 2025

Management reaffirmed its expectations for a high single-digit compound annual revenue growth rate through 2029. For calculation purposes, this forecast assumes 2024 as the base year.

The company also raised its 2027 forecast for combined Skyrizi and Rinvoq sales. It now expects to record combined revenues of more than $31 billion, up $4 billion over its previously issued forecast.

Shares of AbbVie were up over 5% in pre-market trading today, likely due to the encouraging guidance update. In the past year, the stock has gained about 5% against the industry’s 1% decline.

GSK said Friday that its majority owned ViiV Healthcare unit has received European Commission approval for Vocabria, in combination with Johnson & Johnson's Rekambys, for the treatment of HIV-1 infection in adolescents 12 years of age and older weighing at least 35 kilograms.

The marketing authorizations are backed by data from an ongoing phase 1/2 study of the combination therapy's safety, tolerability and pharmacokinetics, the company said, adding that 139 of the study's 144 adolescent participants remained virologically suppressed with the therapy.

The European Medicines Agency approved the combination of Vocabria and Rekambys in December 2020 for the treatment of HIV-1 in adults who are virologically suppressed, GSK said.

Pfizer and Shionogi are also shareholders of ViiV Healthcare, according to the statement.

Teva Pharmaceutical Industries TEVA reported fourth-quarter 2024 adjusted earnings of 71 cents per share, which beat the Zacks Consensus Estimate of 70 cents. Adjusted earnings declined 29% year over year.

See the Zacks Earnings Calendar to stay ahead of market-making news.

Revenues for the fourth quarter were $4.23 billion, beating the Zacks Consensus Estimate of $4.10 billion. However, total revenues declined 5% from the year-ago quarter on both reported and constant currency basis. The decline is mainly due to the absence of the one-time $500 million upfront payment received in the prior-year quarter from partner Sanofi SNY for the collaboration agreement for its anti-TL1A asset, duvakitug. The decline was partially offset by higher revenues from generic products globally and strong growth from branded drugs, Austedo, Ajovy and Uzedy, along with the sale of certain product rights.

Teva Pharmaceutical Industries Ltd. Price, Consensus and EPS Surprise

Teva Pharmaceutical Industries Ltd. price-consensus-eps-surprise-chart | Teva Pharmaceutical Industries Ltd. Quote

Poor Generics Sales Hurt TEVA’s United States Unit

Sales in the United States segment (previously the North America segment) were $1.98 billion, down 13% year over year. The decline was primarily due to the upfront payment from Sanofi as discussed above, partially offset by higher revenues from Austedo, Uzedy and product rights sales. The segment’s revenues missed the Zacks Consensus Estimate of $2.01 billion as well as our model estimate of $2.03 billion.

Generic/biosimilar product revenues rose 1% from the year-ago period to $674 million in the United States, driven mainly by the launch of a generic version of Novo Nordisk’s diabetes drug, Victoza (in late June), and higher revenues from a generic version of Roche’s Rituxan. The sales growth was partially offset by lower revenues from generic versions of Revlimid and ProAir. Generic revenues missed the Zacks Consensus Estimate of $840 million as well as our model estimate of $893.5 million.

Teva has a decent pipeline of biosimilars, with some being developed in partnership with Alvotech. A biosimilar version of AbbVie’s ABBV Humira called Simlandi was approved in February 2024 and launched in May. Selarsdi, a biosimilar version of J&J’s JNJ Stelara, was approved in April 2024, and per a settlement with J&J, Teva is expected to launch the biosimilar in the first quarter of 2025. In October 2024, the FDA accepted Teva’s application seeking approval for TVB-009P, a biosimilar candidate to Amgen’s bone drug, Prolia (denosumab). The FDA’s decision is expected in the second half of 2025.

Huntington's disease drug, Austedo, recorded sales of $518 million in the United States, up 27% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales beat the Zacks Consensus Estimate of $484 million and our model estimate of $476.5 million.

Ajovy recorded sales of $63 million for the quarter, up 11% year over year, driven by volume growth. Ajovy sales beat the Zacks Consensus Estimate of $60 million as well as our model estimate of $59.1 million.

Ajovy’s market share in the United States increased in terms of the total number of prescriptions from 25.7% in the year-ago quarter to 29.6% in the reported quarter.

Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, generated sales of $43 million in the fourth quarter compared with $9 million in the year-ago quarter.

Copaxone recorded sales of $63 million in the United States, down 13% year over year due to generic erosion and increased competition. Copaxone sales beat the Zacks Consensus Estimate of $53 million as well as our model estimate of $55.5 million.

Combined sales of Bendeka and Treanda declined 21% from the year-ago quarter to $41 million. Sales of Bendeka and Treanda were hurt by generic erosion. Teva lost orphan drug exclusivity for bendamustine products in December 2022.

Distribution revenues generated by Anda rose 2% year over year in the quarter to $402 million due to volume growth.

TEVA’s Europe and International Markets Segment Performance

The Europe segment recorded revenues of $1.35 billion, up 1% year over year on a reported basis. Sales were down 2% on a constant currency basis, mainly due to higher sales of certain product rights in the year-ago quarter. Europe revenues beat the Zacks Consensus Estimate of $1.26 billion as well as our model estimate of $1.18 billion.

Generic product revenues in Europe rose 5% in constant currency terms to $979 million. Copaxone sales declined 11% to $50 million. Revenues from Ajovy sales increased 28% on a constant currency basis to $58 million.

In the International Markets segment, sales rose 10% year over year to $661 million. In constant currency terms, sales increased 17% from a year ago, driven mainly by revenues from the sale of certain product rights and higher generic revenues, partially offset by regulatory price reductions and generic competition to off-patented products in Japan. International Markets revenues beat the Zacks Consensus Estimate of $604 million as well as our model estimate of $615.9 million.

The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $241 million, down 2% year over year on both reported and constant currency basis.

TEVA’s Margin Discussion

Adjusted gross margin was 54.8% for the quarter, down 340 basis points (bps) year over year. The decline is mainly due to the upfront payment received in 2023 for the duvakitug collaboration with Sanofi as well as lower revenues from Copaxone, partially offset by higher revenues from Austedo and certain other product rights.

Adjusted research & development expenses increased 9% year over year to $248 million. Selling and marketing expenditure rose 7% from the year-ago level to $650 million. General and administrative expenses increased 4% from the prior-year level to $302 million.

Adjusted operating income fell 24% year over year in the reported quarter to $1.17 billion. Adjusted operating margin declined 710 bps to 27.6% in the quarter due to increased operating costs and lower adjusted gross margin.

FY24 Results

Revenues in 2024 were clocked at $16.54 billion, representing a 4% year-over-year increase on a reported basis and a 6% increase on a constant currency basis compared with 2023 results. Sales beat the guided range of $16.1-$16.5 billion.

Adjusted diluted earnings per share (EPS) for the full year was $2.49, which was within the guidance range of $2.40-$2.50 per share.

TEVA’s Guidance for 2025

Rolling into 2025, Teva expects total revenues in 2025 to be in the range of $16.8–$17.4 billion. The Zacks Consensus Estimate for total sales in 2025 is $16.94 billion.

Teva expects Austedo sales to be in the $1.90-$2.05 billion band and Ajovy sales of approximately $600 million in 2025. TEVA anticipates Copaxone revenues in 2025 to be approximately $370 million. The revenue guidance for Uzedy is approximately $160 million in 2025, reflecting solid growing demand for the product.

Teva expects adjusted EPS to be in the range of $2.35-$2.65 per share in 2025. The guidance range was lower than the Zacks Consensus Estimate of $2.76 per share. The adjusted tax rate is expected to be in the range of 15-18%.

The company expects adjusted operating income in the band of $4.1-$4.6 billion in 2025. Teva expects adjusted EBITDA in the range of $4.5-$5 billion. Free cash flow is expected to be in the range of $1.7-$2.1 billion, while capital expenditures are expected to be approximately $500 million.

Teva’s shares lost 13.9% on Wednesday, despite fourth-quarter earnings and revenues beat, as the sales and profit guidance for 2025 was below expectations.

In the past three months, shares of TEVA have gained 0.5% compared with the industry’s growth of 1%.

AbbVie ABBV is set to report fourth-quarter and full-year 2024 earnings on Jan. 31, before the opening bell. The Zacks Consensus Estimate for the quarter’s sales and earnings is pegged at $14.92 billion and $2.09 per share, respectively. The company’s earnings estimates for 2025 have declined from $12.27 per share to $12.17 in the past 30 days.

See the Zacks Earnings Calendar to stay ahead of market-making news.