Abbott Laboratories (ABT; Abbott Park, North Chicago, Illinois) is a pharmaceuticals health care company that was founded by Chicago physician, Dr. Wallace Calvin Abbott in 1888. ABT employs 90,000 people, operates in over 130 countries, and had over $30B in revenue in 2009. In their most recent quarter, ABT reported fourth quarter earnings of $0.92 per share which included an after-tax charge of 23 cents a share related primarily to restructuring costs and the acquisitions of Solvay Pharmaceuticals and Piramal Healthcare Solutions. Excluding various items, Abbott would have reported adjusted earnings of $1.30 versus $1.18. Fourth quarter revenues increased 13.4% to $9.97B.
From Marketwatch, Abbott also issued a 2011 earnings forecast that fell below most estimates. The company said it sees 2011 adjusted earnings coming in between $4.54 and $4.64 a share. According to Factset, analysts had been looking for adjusted earnings of $4.64. Reported earnings for 2011, which includes various accounting items, should be between $3.76 and $3.86 a share, Abbott added.
Pharmaceutical sales for the quarter jumped 23% to $5.94B, helped by the inclusion of products from Solvay and Piramal. Abbott acquired Solvay last year for roughly $6B. The lipid franchise posted sales of $0.9B during the quarter with TriCor/TriLipix sales increasing 19.2%. Meanwhile, Humira recorded sales growth in both the US (13.2%) and international markets (12.9%) during the quarter. Fourth quarter Humira sales increased 13% to $1.9B. ABT leans heavily on Humira, which generates 33% of pharmaceutical sales and 19% of company revenue! A few threats to Humira are noted below. Humira is off patent in 2016, although it is harder to make generic bioequivolents.
- Enbrel is perceived to have a slightly better risk benefit profile, and is also the market leader in rheumatology and dermatology
- The anti-TNF mAb space is becoming increasingly competitive. UCB has Cimzia for Crohn’s disease, MRK/JNJ have a second-generation injectable anti-TNF antibodies Simponi (under litigation along with Remicade when SGP bought MRK)
- Newer biologics that act against different targets (IL-12/23) and have potentially improved efficacy profiles, such as Stelara (JNJ; ABT also has a mAb in their pipeline against the same target – briakinumab)
- Threat from true disease-modifying small-molecule drugs with advantages such as oral dosing, including Pfizer’s tasocitinib (Janus kinase inhibitor), currently in phase III trials, and CF-101 (an A-3 adenosine receptor agonist).
…
