AbbVie targets 2015 growth with focus on new specialty drugs
AbbVie Inc., the drug unit that split from Libertyville Township-based Abbott Laboratories on Jan. 1, will seek treatments for unmet medical needs in a push to grow sales in 2015, the company's new chief financial officer said.
The competition is less keen to find drugs for conditions with few current therapies than for primary care, CFO William Chase said today in an interview in New York. AbbVie will focus on these illnesses, such as Parkinson's and endometriosis, a disease of the uterus, where the North Chicago-based company already has treatments under development, he said.
Abbott split off AbbVie as a way to let investors choose between a medical products company that makes devices, diagnostics and nutrition products, and AbbVie, a drugmaker based largely around Humira, a best-selling rheumatoid arthritis injection that generated $7.93 billion in 2011.
"We're not going to be a primary care company going forward," Chase said. "What we're really looking for is specialty segments."
The goal is for those products to come on line in 2015, Chase said. "In 2015, the pipeline will kick in and at which point we're confident AbbVie will return to growth, Chase said.
Until then, sales likely will be little changed. The company over the next two years will lose about $2.5 billion of what it projects will be $18 billion in 2013 revenue as patents expire, Chase said. The sales loss will be offset by more revenue from Humira and Androgel, a testosterone product.
AbbVie, which began trading yesterday, declined less than 1 percent to $34.83 at the close in New York.
The company plans to increase its dividend, currently $1.60 a share annually, Chase said, without providing a timeline.
''The way investors should be looking at us, is in the short term you get a very healthy dividend and a commitment to maintain and grow that dividend,'' he said. ''And in the 2015 period, we're going to have an inflection as the pipeline plays out that's going to return this stock to a growth stock. We view it in its most simple form as a value play with a great optionality on the pipeline."
The company doesn't plan any major acquisitions, preferring to focus on smaller, single-drug deals that will help boost the number of treatments in development.
Starting in 2015, the company has four major product prospects that Chase said would be worth about $4 billion to $6 billion a year in peak sales. Among the leading experimental drugs is a hepatitis C treatment targeted for the market in early 2015 that will do away with shots of interferon, the standard yearlong treatment that has flu-like side-effects.
Levodopa/Carbidopa, a gel used for Parkinson's, may be on sale in 2014 and would generate about $1 billion a year, said Chase. AbbVie also is developing daclizumab, a treatment for multiple sclerosis in the late stage of clinical trials that may reach the market by late 2015 or early 2016.
Finally, the company has elagolix, a drug for endometriosis. The uterine disease affects about 17 million women, Chase said, and AbbVie's drug could have fewer side effects than current therapies. The company is targeting a 2016 approval.