Leerink Partners Starts Abbvie (ABBV) at Market Perform
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Leerink Partners initiates coverage on Abbvie (NYSE: ABBV) with a Market Perform rating and a price target of $70.00.
Analyst Geoffrey Porges commented, "Our initiation is based on a generally positive view of the company’s current business and near term prospects, but reflects significant uncertainty about the durability of its dominant franchise, Humira. Humira faces well known challenges from both branded and biosimilar entrants in the coming years, but we generally expect revenue to continue to grow through the end of the decade, notwithstanding many heart stopping moments and real and imaginary challenges from competitors via the courts, the patent office and the marketplace. This is the most significant uncertainty facing the company, and the biggest variable in our valuation analysis. Our base case assumes biosimilar entry in the US in 2020. If we incorporate biosimilar introduction in 2018, our valuation declines by $10-$17/share, and if we postpone it to 2022, it increases by $8/share (to $78). We forecast that Humira will grow from $16.4bn this year to $17.9bn in 2020. Our Humira revenue forecast is 0%-5% above consensus for the 2017-2020 period."
Shares of Abbvie closed at $60.14 yesterday.
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