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Is Amgen the New Champion in the Biotech World

Amgen (AMGN) grabbed headlines in August when it became the first biotechnology stock listed in the prestigious Dow Jones Industrial Average, offering mutual funds and exchange-traded funds that follow the index more access to the company’s shares.

With its share price worth $243.21, Amgen has been hailed responsible for roughly 1,600.20 Dow points – roughly 5.8% of its total.

Does this make Amgen the new champion of the biotechnology sector?

Although it has not explicitly declared that it is developing drugs mainly for older adults, Amgen’s pipeline notably focuses on the fast-rising senior population across the globe.

This is quite strategic considering that the world population of seniors is projected to double from the current number to reach more than 2 billion by 2050.

A noteworthy strategy it employed to expand its market share is cutting the prices of some of its most popular products.

For example, Amgen lowered the price of its heart disease treatment Repatha by as much as 60% in 2018. Since the drug has become one of the more affordable options in the market, making it more accessible to more users.

This led to a 20% rise in sales revenue by 2019, with Repatha expected to rake in a higher number in 2020 – a highly probable expectation considering the 32% climb it recorded in its second quarter earnings report this year. So far, Repatha has generated $200 million in sales in the second quarter.

Another notable drug that recorded a climb in sales is Evenity, which targets postmenopausal women with osteoporosis.

Evenity generated an impressive increase of $101 million compared to the $28 million it earned in the same period in 2019.

Despite its $142.08 billion market capitalization, Amgen is not immune to the effects of the pandemic.

For one, sales of arthritis drug Enbrel fell by 9% year over year to record only $1.2 billion while cancer therapy Neulasta showed a 28% decline to $593 million.

The drop in their performance was attributed to pricing pressure and biosimilar competition.

In addressing the issue, Amgen also ventured in creating a competitive and lucrative biosimilar portfolio.

So far, its biosimilar version of AbbVie’s (ABBV) best selling drug arthritis drug Humira has managed to rake in over $200 million in sales in 2019.

Two more oncology biosimilars, MVASI and KANJINTI, which were only launched in the US last year, generated $588 million in sales.

This year, Amgen will launch another potential biosimilar blockbuster called AVSOLA. This would be in direct competition with Johnson & Johnson’s (JNJ) antitumor treatment Revicade.

Outside these biosimilars, Amgen has over 50 clinical trials queued, which include more than 20 Phase 3 studies. Ultimately, the company’s goal is to displace all the deadweights in its current portfolio.

One of the most exciting products in Amgen’s pipeline right now is its heart failure drug Omecamtiv Mecarbil, which recently completed Phase 3 clinical trials.

With cardiovascular diseases identified as one of the leading causes of death worldwide, the success of Omecamtiv Mecarbil would translate into a strong foothold for Amgen in this huge market and a key growth driver in the long run.

Another blockbuster in Amgen’s portfolio is Otezla, which it acquired from its $13.4 billion deal with Celgene prior to its merger with Bristol Myers Squibb (BMY) in 2019.

Although Otezla has already been marketed as an adult arthritis and psoriasis treatment, Amgen has been working on expanding its indication to include Behcet's disease, pediatric psoriasis, and pediatric arthritis.

Even without the expanded indications, Otezla has been a hot seller for Amgen.

In fact, the pandemic did not stop it from reaching a 14% year over year revenue growth every quarter, with its second quarter earnings reaching $561 million.

Other than the expanded use to cover more age ranges in the arthritis and psoriasis sector, Amgen is also studying whether Otezla can be used as a COVID-19 treatment.

If these studies prove to be successful, then Amgen will easily make up the price of the Otezla purchase quicker than anticipated.

More importantly, it would be able to add another massive moneymaker in its already formidable anti-inflammation program. By the end of 2021, Amgen’s revenues would be considerably bigger.

Amgen’s second quarter earnings reports showed a respectable 6% rise in its year over year revenue, with the company generating $6.2 billion despite the ongoing health and financial crises.

Beyond its growth in the US market, Amgen has been busy with international expansion. To date, the company has established a key partnership with China’s BeiGene (BGNE).

It further strengthened its presence in Asia thanks to its acquisition of Japan’s Astellas Pharma earlier this year.

These moves are promising since China and Japan are the second and third biggest pharmaceutical markets in the world, and both countries are showing strong growth in their senior populations.

Needless to say, these partnerships would put Amgen in a strategic position to capture a share of that growth.

Investing in healthcare and biotechnology stocks has always been one of my go-to advice to people.

National healthcare spending is expected to increase at an average rate of 5.5% annually until 2027.

By then, the cost would reach a whopping $6 trillion, resulting in an estimated $1 in every $5 of the GDP getting allocated to healthcare spending within this decade.

Amgen is a blue chip biotechnology stock that has a presence in over 100 countries and develops groundbreaking treatments that can help people across the globe.

As a leading company in the healthcare and biotechnology industry, Amgen holds a strong position to leverage this growth to its advantage.

While the 2.48% trailing annual dividend yield is pretty average, Amgen also prides itself of consistently boosting its dividend every year since 2011.

It also engages in opportunistic share buybacks, so its investors have more ways to get rewarded.

Since Amgen stock shares are not exactly cheap right now, income-oriented investors should be on the lookout for a market crash and seize the opportunity to scoop up shares of this valuable biotechnology giant.

October 1, 2020/by Mad Hedge Fund Trader

It's Crunch Time for COVID-19 Vaccine Developers

Biotech Letter

Mark your calendars because the world is about to find out whether the leading candidates of the COVID-19 vaccine race will be effective as early as October.

Other than saving lives in this pandemic, also hinged on the results is over $100 billion in investors’ money – an amount that reflects just how much value the stock market is putting on the COVID-19 vaccine candidates under development today.

One of the leading companies in the race is Johnson & Johnson (JNJ).

With a market capitalization of almost $400 billion, many believe that this biopharmaceutical giant will soon be hailed as the king of the coronavirus stock list.

What we know so far is that JNJ’s subsidiary, called Janssen Vaccines, is set to launch a massive-scale Phase 3 study of its COVID-19 vaccine candidate, A26.COV2-S, this September.

The company’s study, which will be randomized, double-blind, and placebo-controlled, is expected to involve approximately 60,000 participants suffering from moderate to severe cases of COVID-19.

The move to include 60,000 participants is seen as a competitive advantage for JNJ because this is double the usual late-stage volunteer number.

For comparison, Moderna’s (MRNA) mRNA-1273 as well as Pfizer (PFE) and BioNTech’s (BNTX) BNT162b2 will only target a maximum of 30,000 patients each in their trials.

On top of the more expansive trial coverage, JNJ has another advantage that could help it pull ahead of the pack.

During the preclinical testing of Ad26.COV2-S on primates, the vaccine candidate showed that a single dose could be enough to fight off the virus.

In contrast, the candidates from other COVID-19 vaccine developers like AstraZeneca (AZN), Pfizer, and Moderna require two doses to trigger a similar response.

While the well-being of every man, woman, and child hangs on the success of the COVID-19 trials, concerns have been raised that the assessment for these candidates might be compromised because of the upcoming US presidential election.

However, the leading COVID-19 developers assured people that it won’t be the case.

Apart from JNJ, Pfizer, Moderna, AstraZeneca, other vaccine makers like GlaxoSmithKline (GSK), Sanofi (SNY), and Regeneron (REGN) plan to issue statements that no candidate will be submitted without extensive data on its efficacy and safety.

Most investors are focused on the COVID-19 stocks these days, and who can blame them?

Sales of the vaccines in 2021 alone could reach $20 billion per company. This is massive profit even for Big Pharma standards.

In fact, this amount is higher than the projected sales of today’s current top-selling drug, Humira from AbbVie (ABBV), which is expected to clock roughly $19.6 billion in the same period.

However, the COVID-19 vaccines will only be profitable for as long as there is a pandemic. If this disease becomes a non-recurring sickness, then the vaccines will no longer be as profitable in the long run.

This is why it’s crucial to review the core operations of a company and determine its capacity to keep generating revenue and profits while also maintaining a strong balance sheet and returning value to its investors.

JNJ is a great example of this type of business.

Outside its COVID-19 efforts, the company has been diversifying its portfolio. Its latest move is the $6.5 billion acquisition of Momenta Pharmaceuticals (MNTA), marking the biopharmaceutical titan’s expansion into the immunology sector.

One of the most significant assets JNJ acquired from this deal is Nipocalimab, which is an incredibly promising first-in-class autoimmune disease treatment.

This drug could be the answer to rare and life-threatening blood disorders, such as hemolytic disease, which affects newborns and babies. To date, there are roughly 195 million individuals suffering from this condition worldwide.

Throughout its history, JNJ has proven itself to be a stable company even in the most unstable market conditions.

It has a reliable growth record and a healthy cash flow, which would be valuable in acquiring bolt-on companies, creating new drugs, and boosting the dividend every year.

JNJ has managed to increase dividends annually for 58 years now, with its most recent dividend raise reaching 6.3% just last April. Its stock currently yields 2.7%.

More importantly, JNJ offers an impressive biotechnology pipeline. With an incredible history of over 130 years, this stock is definitely one for keeps.

September 8, 2020/by Mad Hedge Fund Trader

More Dark Horses in the Covid-19 Vaccine Race

Biotech Letter

Another biotechnology company is cashing in on its COVID-19 vaccine efforts: CureVac (CVAC).

CureVac, which has a market capitalization of $9.9 billion, is hoping to follow the footsteps of Moderna (MRNA) and BioNTech (BNTX).

Earlier this year, both small-cap companies saw their value skyrocket, with Moderna now reporting a market capitalization of $27.3 billion while BioNTech is at $16.3 billion.

While the jump in their market capitalization is definitely newsworthy, what is even more impressive is that neither company has a product out in the market today. That is, up until the pandemic struck.

Now, CureVac is looking into raking in the same benefits from its own COVID-19 vaccine work.

Here is a snapshot of how well this stock is doing so far.

CureVac, which raised $213.13 million in its IPO, initially priced its shares at $16 each, started trading at $44 per share and ended the day at $55.90 per share.

The week after, CureVac shares started trading at $79.33 in the premarket hours of Monday, with the price expected to reach an all-time high of approximately $85 per share.

Aside from the Bill and Melinda Gates Foundation, CureVac also attracted backing for its COVID-19 vaccine candidates from the German government and GlaxoSmithKline (GSK). So far, the company has recorded $640 million in funding for its coronavirus program.

What we know about CureVac’s vaccine candidate is that it utilizes the same mRNA-based technology as Moderna and Pfizer (PFE).

While the newly minted biotechnology company is behind competitors, the results of their study are expected to be released by the next quarter.

Prior to prioritizing its COVID-19 vaccine work, CureVac has been focusing on developing cancer and rare disease treatments.

CureVac is also developing CV8102, which is a treatment that can target four different kinds of tumors.

Another frontrunner in its pipeline is CV7202, which is its rabies drug candidate. Its second-generation lipid nanoparticle (LNP) flu vaccine, called CV6301, is also a promising treatment.

Apart from CureVac, another small-cap biotechnology company has been competing against the COVID-19 vaccine frontrunners like AstraZeneca (AZN) and Johnson & Johnson (JNJ).

Earlier this month, Novavax (NVAX) announced the launch of the Phase 2B clinical trial of its COVID-19 vaccine.

The trial for the coronavirus vaccine, called NVX-CoV2373, is set in South Africa and is anticipated to not only provide the company with a larger group but also test the vaccine’s efficacy in an environment where the disease is currently surging.

Although Novavax is also behind the leaders, the level of transmission rate in South Africa, which accounts for half of the COVID-19 cases in Africa, is expected to provide the company a better chance of evaluating its candidate.

Other than that, Novavax has also secured manufacturing deals that can handle more than 2 billion doses.

Novavax has been working on a COVID-19 vaccine since February, with the company receiving $388 million in funding from the Coalition for Epidemic Preparedness Innovations.

By July, the company received a $1.6 billion investment from the US government courtesy of Trump’s Operation Warp Speed project.

If Novavax’s vaccine candidate earns approval, then the company could realistically expect over $10 billion in annual sales.

Riding the momentum, Novavax has also been working on a flu vaccine candidate, called NanoFlu, which can record as much as $1.7 billion in yearly sales.

With the current financial climate, the unprecedented demand for a vaccine will unsurprisingly drive the shares of companies like Novavax and CureVac even higher.

However, it is better to err on the side of caution when it comes to these ultra risky biotechnology companies.

The biotechnology industry has no shortage of investors on the lookout for stocks that can easily make them filthy rich. Although these high-profile stocks can definitely result in massive gains, there are still a number of critical caveats to bear in mind.

While waiting for the actual candidates to get launched, it is safer to bet on tested and proven businesses for now and perhaps dip your toe in the unfamiliar water currently dominated by these small-cap biotechnology companies.

August 18, 2020/by Mad Hedge Fund Trader

August 13, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 13, 2020
Fiat Lux

Featured Trade:

(HOW ROCHE’S STRATEGIC MOAT KEEPS IT AFLOAT)
(RHHBY), (MRK), (GILD), (LLY), (BPMC), (PFE), (JNJ), (ABBV), (NVS)

August 13, 2020/by Mad Hedge Fund Trader

How Roche's Strategic Moat Keeps it Afloat

Biotech Letter

Moat is a concept that Warren Buffett's followers are well-acquainted with.

In a nutshell, it describes a company’s capacity to keep its competitive edge over its rivals. For the Oracle of Omaha, the safest bets are businesses with large moats because it indicates a strong ability to ward off competitors.

One company that has a particularly strong moat is Roche (RHHBY).

Roche has been at the forefront of the fight against the COVID-19 pandemic.

In mid-March, Roche became the first-ever commercial company to receive an FDA Emergency Use Authorization for its COVID-19 tests. What made this kit, called Cobas SARS-CoV-2 test, impressive is that the turnaround time of less than 4 hours was incredibly fast compared to others.

By April, Roche’s tests were already administered to roughly 4 million people, with some users paying as low as $5 for every test.

Following the success of its tests, Roche ventured into developing a COVID-19 cure.

While there’s still no conclusive data on its tests, Roche secured agreements with the European Commission to be one of the suppliers of the experimental COVID-19 drugs to any of the 27 EU members looking to buy for their constituents.

The deal involves Roche’s RoActemra. Meanwhile, the other supplier is Merck (MRK) with its Rebif.

Aside from that, Roche is also working alongside Gilead Sciences (GILD) in investigating whether Remdesivir could work better when combined with RoActemra.

The other drug undergoing similar compatibility tests with Remdesivir is Eli Lilly’s (LLY) Olumiant.

However, there remains a much bigger story for Roche outside its COVID-19 efforts.

Looking at the company’s first-quarter earnings report, Roche’s pharmaceutical arm generated over 80% of its total revenue for that period.

This is primarily thanks to its strong lineup of drugs, which recorded a 7% increase to reach roughly $13 billion in sales compared to the previous quarter. Overall, Roche recorded a 52.9% growth in its year-over-year quarterly earnings.

The key growth drivers of the company came from its oncology sector.

Leading the charge is bladder and urinary tract cancer treatment Tecentriq, followed by breast cancer drug Perjeta.

Roche’s efforts to expand the label of its blockbuster drug Tecentriq sets expectations for further growth as well.

To further boost its dominance in the oncology field, Roche recently signed an agreement with Blueprint Medicines (BPMC) to gain commercial rights to market thyroid and lung cancer treatment Pralsetinib outside the U.S., excluding Greater China.

This will allow Roche to directly compete with Eli Lilly’s newly gained blockbuster drug Rotovmo, which the company got from its $8 billion takeover of Loxo Oncology in 2019.

Apart from its oncology sector, Roche also saw promising results from other treatments like hemophilia medicine Hemlibra and multiple sclerosis treatment Ocrevus.

On top of Roche’s 37 approved treatments in the market today, the company is expected to submit regulatory findings for almost 20 products this year alone.

Meanwhile, Roche’s $4.3 billion acquisition of Spark Therapeutics in 2019 provided a much-need boost to the company’s gene therapy space.

Despite the uncertainties brought about by the pandemic, Roche’s shares still saw a 10.5% jump this year. In fact, the company increased its 2020 earnings estimate by 0.8% while it expects a 1.4% rise in 2021.

For context, Roche generated $61.5 billion in revenue in 2019 and raked in approximately $13.5 billion in profits. To date, the company pays its shareholders a dividend that yields close to 2.5%.

These reports highlight Roche’s financial stability and strength.

So far, Roche has been able to corner three of the major diseases today: cancer, hemophilia, and multiple sclerosis.

This makes the company one of the biggest names in the biotechnology and healthcare sector in terms of sales.

In fact, Roche is projected to be the No.1 in the field by 2026 with an annual revenue of $62 billion, achieving a compound rate of over 3.6% since its 2019 numbers.

Pfizer (PFE) is expected to land second place, with sales estimated to reach over $56 billion. The rest of the list includes companies poised to record more than $50 billion in sales, namely, Johnson & Johnson (JNJ), AbbVie (ABBV), and Novartis (NVS).

Roche

August 13, 2020/by Mad Hedge Fund Trader

August 4, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 4, 2020
Fiat Lux

Featured Trade:

(MERCK’S SLOW BUT STEADY COVID-19 HEADWAY)

(MRK), (GILD), (REGN), (AZN), (PFE), (MRNA), (ABBV), (BMY), (RHHBY)

August 4, 2020/by Mad Hedge Fund Trader

Merck's Slow but Steady Covid-19 Headway

Biotech Letter

Is it truly better late than never?

Merck has been decisively cautious in its approach of potential COVID-19 treatments and even more so when it comes to their vaccine candidates.

Recently though, the company has finally offered a glimpse of its progress.

The first promising update is Merck’s work on MK-4482, which is an antiviral candidate aimed at treating COVID-19 patients. Basically, this candidate works by preventing the SARS-CoV-2 from replicating.

The laboratory results showed that an increasing dose of MK-4482 can effectively halt the progress of the virus in a patient’s system.

Judging from the timeline followed up to this point, Merck plans to begin huge trials by September.

The MK-4482 is expected to compete with Gilead Sciences’ (GILD) Remdesivir, with the Merck candidate possibly edging out the latter.

This is because the SARS-CoV-2 tends to mutate, rendering Remdesivir less potent the next time it is administered to patients. In comparison, MK-4482 has demonstrated an ability to fight off the mutated versions of the virus.

MK-4482 also comes in tablet form, making it a preferable and more convenient option compared to Gilead’s intravenous infusion and even Regeneron’s (REGN) injectable antiviral cocktail REGN-COV2.

On the COVID-19 vaccine front, Merck has been working with Thermis Biosciences in developing a candidate based on a measles virus vector platform originally developed by the Institut Pasteur researchers.

However, this is not Merck’s only shot on goal.

The company is also collaborating with the International AIDS Vaccine Initiative to develop another vaccine candidate, V590.

The two are using the same platform that Merck created for its already approved Ebola vaccine. The goal is to start human testing by the third quarter of 2020.

Merck is also looking into offering a single-dose vaccine instead of the double dose shots its competitors are working on, with one of its candidates developed to be taken orally instead of via injectibles.

If they succeed, then Merck’s vaccines will be more accessible and convenient for a lot of patients.

Aside from developing V590, Merck plans to use the same approved technology to advance its other antivirals in its clinical testing pipeline.

In fact, Merck’s move to acquire Thermis Bioscience demonstrates the company’s resolve to focus on strengthening its vaccine program. The primary expectation for this newly formed partnership is to come out swinging and eventually win big on the COVID-19 vaccine race.

The victory will then serve as a springboard for a new and powerful revenue stream for Merck, which would serve to quiet the fears of the company’s investors fretting over the patent expiration of blockbuster drug Keytruda.

The impending loss of exclusivity for cancer treatment Keytruda has been hanging over Merck’s head for quite some time now.

Aside from the potential biosimilar competition, Keytruda has been facing stiff competition against biotechnology giants like Bristol Myers Squibb (BMY), Roche (RHHBY), and Regeneron.

Needless to say, fears over this have been overshadowing the company’s impressive internal pipeline – a reaction that pretty much mirrors the experience of AbbVie (ABBV) on the pending patent loss of its blockbuster Humira.

However, Merck has been working on products that could rake in an additional $13 billion to $18 billion to its sales every year.

The list includes immuno-oncology antibody candidates, additional vaccines, and even HIV treatments.

The company also has more than $40 billion on its balance sheet, putting it in a favorable position to acquire more companies or products that could bolster its franchise.

Since the pandemic broke out, Merck has lagged behind its COVID-19 rivals AstraZeneca (AZN), Pfizer (PFE), and Moderna (MRNA).

Looking at its progress and future plans though, it looks like the company has set out to achieve a tortoise over the hare victory particularly in the COVID-19 vaccine race.

With incredible uncertainty hovering over the rest of 2020, it is only natural to seek stocks for an all-weather portfolio.

While there are many factors to consider, looking at businesses that allocated sensibly to capital expenditures and R&D is definitely a great way to start.

Merck’s strategic partnerships with companies like Thermis Biosciences, Taiho Pharmaceuticals, and Astex Pharmaceuticals also play significant roles in this aspect.

Although Merck has not provided a particularly strong performance so far this year, this biotechnology and health care giant is poised to stage a strong comeback when the dust settles.

merck

August 4, 2020/by Mad Hedge Fund Trader

August 4, 2020

Diary, Newsletter, Summary

Global Market Comments
August 4, 2020
Fiat Lux

Featured Trade:

(MEET THE ITALIAN LEONARDO FIBONACCI)

(MRK), (GILD), (REGN), (AZN), (PFE), (MRNA), (ABBV), (BMY), (RHHBY)

August 4, 2020/by Mad Hedge Fund Trader

July 30, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
July 30, 2020
Fiat Lux

Featured Trade:

(ABBVIE'S UNEXPECTED UPSIDES)
(ABBV), (GMAB), (REGN)

July 30, 2020/by Mad Hedge Fund Trader

AbbVie's Unexpected Upsides

Biotech Letter

After going through what could arguably be described as one of the most promising quarterly stock market performances in the past 10 years, the horrific stock market crash at the beginning of 2020 feels like a distant memory.

With the revival of the financial sector, people now will not stop complaining about exorbitant market valuations.

Despite that, not all stocks are offered at premium prices. There are several companies that remain at relatively bargain prices regardless of the encouraging market revival in the past months.

A stock that falls under this category is AbbVie (ABBV).

In the past three months, AbbVie shares jumped by over 20%. Even so, this biotechnology and healthcare stock remains unreasonably cheap, only trading at roughly 10 times its expected earnings.

Looking at the company’s profile, investors appear to shun AbbVie shares out of fear stemming from the looming US patent exclusivity loss for its highest selling rheumatoid arthritis drug Humira by 2023.

While the reality is that Humira will soon face biosimilar competition, the sales for AbbVie’s cash cow remain impressive.

In the first quarter of 2020, Humira generated $3.7 billion in revenue in the US alone, showing off a 13.7% climb year-over-year.

However, AbbVie is not twiddling its thumbs, waiting for the Humira patent exclusivity to expire in the next 3 years.

Instead, the Illinois-based company has been busy developing its next blockbuster products.

The frontrunners in AbbVie’s lineup are leukemia and lymphoma drugs Venclexta and Imbruvica.

The two generated a total of approximately $5.5 billion in annual revenues in 2019 – and 2020 is projected to record a strong double-digit growth.

In the first quarter of this year alone, Venclexta and Imbruvica raked in a total of $1.5 billion in global sales or a 32% year-over-year increase.

Still, AbbVie’s oncology franchise has yet to stop growing.

Riding the momentum of its cancer research expansion, AbbVie also recently established a partnership with Denmark’s GenMab (GMAB).

The goal is to come up with 3 anticancer antibodies, which will ultimately be able to attack cancer cells without damaging the normal and healthy ones.

If the programs succeed, AbbVie will pay $3.15 billion. This is on top of the $750 million it already offered upfront to GenMab.

However, the biggest move AbbVie made in an effort to lessen the top-line exposure to Humira is its acquisition of Allergan.

AbbVie is projected to collect over $2 billion in savings annually within 3 years since this $63 billion acquisition.

This will translate to roughly $1 per share, with 2021 earnings per share hitting $11.80 compared to $10.25 estimated in 2020.

More importantly, AbbVie gains access to Allergan’s crown jewel Botox.

While this drug is commonly known as a cosmetic procedure treatment, it can also be used to treat a wide range of medical conditions.

Just this July, Allergan received FDA approval to expand the use of Botox to cover some pediatric patients including those with cerebral palsy.

Aside from Botox, AbbVie also picked up a couple of exciting products like antipsychotic drug Vraylar.

On top of the drugs from its Allergan acquisition, AbbVie has been developing new-generation autoimmune treatments.

Two of these products, Rinvoq and Skyrizi, are expected to generate $20 billion in annual sales – a number comparable to Humira’s record.

In fact, Rinvoq is anticipated to transform into an aggressive rival of Regeneron’s (REGN) very own cash cow, atopic dermatitis drug Dupixent.

One advantage of Rinvoq over Dupixent is that AbbVie’s drug comes in the form of a pill while Regeneron’s product is an injection. This easily makes Rinvoq the more convenient option.

Even if Rinvoq fails to take away from Dupixent’s market share, the AbbVie drug can still benefit from the same group. After all, there are at least 10% to 25% of the patient pool who are unresponsive to Regeneron’s product.

That means AbbVie could earn roughly $340 million at a minimum after 2 years of its Rinvoq launch.

On the COVID-19 front, AbbVie attracted attention when its cholesterol drug Tricor was found to be effective in fighting SARS-CoV2.

There’s still no conclusive data, but the optimism was spurred when scientists at the Hebrew University in Israel and New York’s Mount Sinai Medical Center claimed that Tricor could potentially downgrade the deadly virus into “nothing worse than a common cold.”

Thanks to the promising results, the researchers will advance Tricor into animal studies.

The hope is that the drug can eventually be included in the list of treatments fast-tracked by the FDA both in the US and Israel.

Apart from that, AbbVie’s HIV treatment Kaletra has been used in China as another form of COVID-19 treatment.

Overall, AbbVie is a great pick among income-seeking investors. It offers a high yield, a promising pipeline and approved products, and a low payout ratio.

AbbVie generated $8.6 billion in revenue during the quarter that threatened to push the world into a recession, demonstrating a 10.1% increase from the same period in 2019. In terms of earnings per share, AbbVie recorded $2.02 in the said period compared to the $1.65 last year.

AbbVie

July 30, 2020/by Mad Hedge Fund Trader

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