Will AbbVie’s Legal Woes Metastasize?

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I began following AbbVie (ABBV) closely during its HCV wars with Gilead (GILD) a few years ago. Gilead won the battle; Solvaldi and Harvoni delivered much stronger efficacy than Vikeira Pak, making Abbvie’s presence in the HCV space non-existent. The government practically used AbbVie as a stalking horse to help tamp down runaway HCV costs. I cast the company off as a “one trick pony” given that Humira was over 60% of AbbVie’s total revenue.

AbbVie never gave up on its HCV dreams and that sticktoitiveness appears to have payed off. Q1 2018 HCV sales, driven by Mavyret, almost doubled. The growth of HCV and Imbruvica reducedĀ Humira to less than 60% of total revenue:

Imbruvica continues to expand its position as the market share leader for second-line Mantle Cell Lymphoma and Leukemia. Its revenue grew 39% Y/Y. The biggest surprise of the quarter was likely HCV, which doubled revenue Y/Y to $919 million. It just surpassed Imbruvica as AbbVie’s second-largest drug. $850 million of those sales came from Mavyret, the company’s HCV regimen indicated to treat genotypes 1-6.

Management estimated that Mavyret controls market share in the U.S. of 45%. The company also projected full-year HCV sales of $3.5 billion. Those extra sales will likely come at the expense of Gilead (GILD), the leader in HCV treatments.

Blow out earnings energized ABBV bulls. However, the euphoria could be short-lived. The company recently suffered a small legal setback. According to Shocking The Street, a premium investment service the Shock Exchange runs in conjunction with Seeking Alpha, If those legal woes metastasize then AbbVie could be in deep trouble. Read more:

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