The shares of AbbVie (ABBV) climbed nearly 5% on Thursday morning after the American drugmaker reached a settlement with manufacturers producing “generic” or cheaper versions of its drug Rinvoq.
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Under the settlement, these generic drugmakers are barred from producing the cheaper versions of the drug until 2037. However, patent protection for the drug could elapse six months earlier if the U.S. Food and Drug Administration does not grant the company market exclusivity for that time period.
Rinvoq is an anti-inflammatory drug used to treat chronic conditions such as rheumatoid arthritis, eczema, and Crohn’s disease. It works by calming down inflammation inside the body, making symptoms like pain, swelling, and stiffness much more manageable.
AbbVie Eyes Growth
AbbVie’s victory in its litigation against the manufacturers adds to a list of recent updates that is exciting investors in the company. In its second-quarter results for Fiscal year 2025 released in late July, the firm beat Wall Street estimates.
The Illinois-based pharma company registered a revenue of $15.4 billion, surpassing expectations by over $400 million. Its anti-inflammatory drugs Rinvoq and Skyrizi both contributed significantly to this and are expected to bring in over $25 billion in sales at the end of this year.
Furthermore, AbbVie reported an earnings per share of $2.97, which was over its guidance midpoint by $0.11. The company, consequently, raised its revenue projection and is now expecting about $60.5 billion in sales by the close of 2025.
Meanwhile, AbbVie has also made recent moves to expand its manufacturing pipeline. It recently stated interest in acquiring private biotech firm Gilgamesh’s Bretisilocin program for up to $1.2 billion. The program is an initiative that seeks to develop drugs to treat moderate-to-severe major depressive disorders.
Furthermore, Canada’s national health regulator this month stamped AbbVie’s cancer medicine called Elahere. The drug is targeted at adults with certain tough-to-treat cancers—like ovarian or fallopian tube cancer—that have come back after other treatments.
Is ABBV a Buy, Hold, or Sell?
Reacting to the latest update, Wells Fargo (WFC) called AbbVie’s settlement a “big win”, adding that it gives the pharma company a “really long runway” for Rinvoq. This will add about $11 to $24 per share for the model, the top banker said, sticking to its Overweight rating on ABBV stock with a $240 price target.
Across Wall Street, AbbVie’s shares hold a Moderate Buy consensus recommendation based on 13 Buys and five Holds by 18 analysts, as seen on TipRanks. The average ABBV price target is $220.47, which indicates a marginal downward risk of 0.40%.
