UBS Reiterates Buy on AbbVie (ABBV) Following Conference Call

UBS reiterated a Buy rating and $78.00 price target on Abbvie (NYSE: ABBV) following the company's conference call. Management assumes no biosimiliars before 2022, and low mid-single digit annual price increases. On Humira biosimilar, management believes US biosimilars will likely infringe its dosing patents as they have to demonstrate efficacy at equal dosing.

Analyst Marc Goodman commented, "(1) On Humira US sales, mgt assumes no biosimiliars before 2022, and low mid-single digit annual price increases. For OUS, sales will peak in 2018 and then decrease by 15-18% driven by biosimilars and price erosion; (2) Imbruvica sales will mostly be driven by market penetration and front line status, and also from label expansion into DLBCL, FL, and MM; (3) On Humira biosimilar, mgt believes US biosimilars will likely infringe its dosing patents as they have to demonstrate efficacy at equal dosing. Once launched, biosimilars will take the majority of share of new starts, but the brand should be able to maintain share in existing pts. (4) Management pointed to >50% operating margin in 2020 vs. ~42.5% at YE15. Absorbing a ~200bps hit for partnerships, management expects a 10% move, 25% of which will come from Humira royalty reduction in 2017-18, 30% from cost reduction, and the rest from leverage as expenses grow at a lower rate than revenues. Tax rate is will remain at ~20-21%."

For an analyst ratings summary and ratings history on Abbvie click here. For more ratings news on Abbvie click here.

Shares of Abbvie closed at $59.55 yesterday.

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