A bullish first-quarter report could reinvigorate AbbVie stock, an analyst said Thursday after a C-suite setback this week sent shares tumbling.
Mizuho Securities analyst Vamil Divan expects AbbVie to have a "solid quarter" and boosted his projections for fellow pharma Eli Lilly. Meanwhile, Divan calls for Pfizer's sales to be in line with expectations despite a likely shortfall for Covid antiviral drug Paxlovid.
"All three stocks have performed relatively well over the past six to eight weeks, driven by macro factors and, less so, company-specific updates," he said in a note to clients. "The recent stock performance raises expectations for quarterly results."
On the stock market today, AbbVie stock advanced 2.1% to close at 162.31. Lilly stock sank a fraction to 301.86. Pfizer stock inched up 2 cents to 53.12.
AbbVie Stock Takes A Breather
AbbVie stock hit the skids on Wednesday after the company announced President and Vice Chairman Michael Severino will depart at the end of May. Severino is leaving his post after eight years and is heading to Flagship Pioneering, a biotech company creator.
But the first-quarter report could give investors a new flash point, he said. Divan says prescription trends look promising for most of AbbVie's key products, with the exception of blood cancer drug Imbruvica.
Analysts polled by FactSet currently expect AbbVie's blood cancer drugs, which include Imbruvica and Venclexta, to generate a combined $1.73 billion in sales. That would represent a 3.4% increase over the year-earlier period. But sales of Imbruvica — which accounts for the lion's share of the unit — fell in the fourth quarter.
Still, Divan expects AbbVie's immunology treatments Humira and Skyrizi to outperform. AbbVie stock analysts call for $4.88 billion in Humira sales and for $898 million from Skyrizi. Humira sales growth would be flat year over year, though Skyrizi would pop more than 56%.
U.S. biosimilar rivals are expected to dig into Humira sales in 2023. The lower-cost knockoffs are already available in Europe and have taken a chunk of Humira's sales power. But Divan says views for Humira's U.S. decline are reasonable, and the company has a number of newer products.
Lilly Investors Focus On Pipeline
Divan raised his expectations for Eli Lilly's sales to $7.72 billion, up 13% year over year, based on the company's new Covid antibody, bebtelovimab. The U.S. government recently purchased $720 million in doses. He also expects Lilly's diabetes treatments to perform well.
Yet, investors are likely closely focused on pipeline news from Lilly, namely its experimental drug tirzepatide and donanemab. The former is a potential diabetes treatment that could help patients lose weight. The latter is an investigational Alzheimer's treatment.
"Any material news on either of those programs will likely determine how Lilly shares react to the quarterly update," Divan said.
Divan kept his buy ratings on Lilly stock and AbbVie stock. But he has a neutral rating on Pfizer stock. He expects Pfizer's sales to come in line with analysts' expectations. He expects light sales of Covid antiviral Paxlovid and called for sales misses from Ibrance and Xeljanz. Ibrance is a breast cancer treatment, while Xeljanz is an immunology drug.
He cut his Pfizer forecast to $24.79 billion in sales, an increase of 70%.
AbbVie Stock, Lilly Stock Peak
Prior to the news of Severino's departure, AbbVie stock had peaked at a record high with a nearly 30% increase this year as of April 8.
Similarly, shares of Eli Lilly hit a fresh high on April 7 with an almost 13% gain this year. Lilly stock broke out of a cup base with a buy point at 284 on March 17, according to MarketSmith.com. Now, Lilly stock is narrowly above its buy zone.
Pfizer shares, on the other hand, have pulled back from a December high. Shares are consolidating with an entry at 61.81.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
