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Will AbbVie Inc (ABBV) Earnings Stay Healthy?

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AbbVie Inc (NYSE:ABBV)

AbbVie Inc (NYSE:ABBV) will release its quarterly report on Friday, and with its stock having jumped considerably since it started trading as a separate entity, investors are hoping for more good news from the drugmaker. Yet even if AbbVie Inc (NYSE:ABBV) earnings contract slightly from pro forma figures from the previous year, the company has some promising prospects in its pipeline to help it drive long-term growth in future years.

AbbVie Inc (NYSE:ABBV) has historically relied on a single drug, Humira, for much of its revenue, and the company’s spinoff from Abbott Laboratories (NYSE:ABT) only magnified the importance of Humira to its results. Yet AbbVie knows it has to move beyond its blockbuster drug to find potential replacements down the road. Let’s take an early look at what’s been happening with AbbVie Inc (NYSE:ABBV) over the past quarter and what we’re likely to see in its quarterly report.

Stats on AbbVie

Analyst EPS Estimate $0.79
Change From Year-Ago EPS (1.3%)
Revenue Estimate $4.54 billion
Change From Year-Ago Revenue 1%
Earnings Beats in Past 4 Quarters 1*

Source: Yahoo! Finance. *Out of one earnings release since spinoff.

Can AbbVie earnings perk up this quarter?
Analysts have generally gotten more optimistic in recent months about AbbVie Inc (NYSE:ABBV) earnings, keeping their short-term estimates for the June quarter unchanged but raising their full-year 2013 consensus by a penny per share. The stock’s ascent has slowed in recent months, but it still posted a 5% gain since mid-April.

AbbVie’s first-quarter results underscore the importance of Humira to the company’s overall results. Sales of $2.2 billion for the drug represented half of AbbVie Inc (NYSE:ABBV)’s overall revenue, and those figures continue to accelerate higher as a new indication for ulcerative colitis sent Humira revenue up 16% worldwide and up 23.7% in the U.S. market. Yet Humira’s coming expiration dates of 2016 in the U.S. and 2018 in Europe make it clear that the company has to move forward with new initiatives.

One possibility comes from the company’s direct-acting antiviral combination to treat hepatitis C, which earned favorable status as a breakthrough therapy from the FDA in May. The problem, though, is that the hep-C space is extremely competitive, with both Gilead Sciences, Inc. (NASDAQ:GILD) and Johnson & Johnson (NYSE:JNJ) having submitted their own hep-C treatments for FDA priority review. Although Johnson & Johnson (NYSE:JNJ)’s simeprevir was first to get into the FDA’s review process, it shares the same drawback as AbbVie’s treatment in that it only treats one genotype of the hep-C virus.

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