Pharma major AbbVie (ABBV, Financial) would be reporting its fourth quarter numbers on Friday, January 30, and analysts are having high hopes that the company will provide transparency over some of the looming issues that might impact its bottom line growth in the long run. Analysts are expecting the company to report earnings growth of 4.7% year over year, which are expected to amount to $2.18 per share for the full year. Revenue for the entire year is also expected to show an increase of 6% basically due to the firm product range and on account of the rich product pipeline of the company. Let’s find out what information is expected to be passed on by the management during the final quarter’s earnings call, but before that let’s take a quick glance at the forecasts for the quarter as well as for the 2015 fiscal year.
Looking at the stated forecasts
The company estimates that the growth in earnings would be majorly through the release of the hepatitis C drug Viekiera Pak which has captured the major markets that were previously held by Gilead Sciences (GILD, Financial) after it released two drugs for the similar treatment, Harvoni and Sovaldi.
It is predicted that the company would generate sales of $5.34 billion in the quarter, up 4.4% from that reported a year back. Earnings could come in at $0.85 a share, up 4.3% on a year-over-year basis.
In fact, the company has also given projections on the outlook for the coming fiscal year towards the beginning of this year and it is notable that AbbVie’s management remains upbeat on generating improved earnings which is estimated to be in the range of $4.25-$4.45 a share for the full year. Reuters’ analysts are expecting the earnings for 2015 to be around $4.32 a share, which is far below the company’s set expectations.
Recent product range to catch the limelight
The earnings call shall throw light upon the sales of the vital hepatitis C drug approved by the U.S. FDA recently in December as analysts are of the opinion that AbbVie would continue to capture over 20% of the $15 billion hepatitis C market. The all new treatment comes cheaper at around $83,000 when compared with Gilead’s Sovaldi which is priced at $84,000 for the 12-week treatment.
This drug will promote the maximum sales in 2015 and is projected to clock over $2.5 billion as revenue for the company in the 2015 fiscal year. This drug might steal the show since the company has been signing exclusive deals for the drug with several health insurers and pharmacy-benefits managers.
For the year 2014, the company bets on the sale of its patented drug, Humira, which is believed to 10% growth in drug sales on a conservative note by JP Morgan analysts. This drug might key in revenue of over $12.5 billion for the full year, thereby improving the revenue from this drug sales by 15% year over year. In fact the company is highly reliant on this drug for its increase in revenue for the past years as well, and the warning signal approaches in 2016 when Humira is expected to lose the patent protection. After late 2016, AbbVie’s future profits might see erosion if the company does not bring up some life saving drug patent before this patent expiry. Hence, this drug’s sales growth in 2014 would give better understanding on the company’s current position in this competitive market.
Last word
The drug company that spun out Abbott Laboratories (ABT, Financial) two years back is expecting to report better earnings as it has a rich and promising product range which is highly competitive and has created a hold on the market. The company is also interested in gaining growth through acquistions and some highlights may be there on the hunt for the best acquistions to beef up the company’s current product pipeline. Analysts are awaiting the release which will provide further information on the upcoming drug range, and will give vital clues on whether AbbVie holds a promising future going ahead.
