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Why AbbVie (ABBV) Stock Is Trading Up Today

ABBV Cover Image

What Happened?

Shares of pharmaceutical company AbbVie (NYSE: ABBV) jumped 4.4% in the morning session after the company announced it settled litigation with generic drug manufacturers to extend patent protection for its blockbuster autoimmune drug, RINVOQ. The agreement prevents generic competition for the drug in the U.S. until at least April 2037, a significant victory for the company. This extension provides about five more years of market exclusivity than some analysts had previously expected. RINVOQ is a crucial growth driver for AbbVie, especially as it manages lost revenue from its former mega-blockbuster, Humira. The drug's sales have been climbing rapidly, reaching $6 billion the previous year and are forecast to potentially hit peak sales of over $12 billion. This settlement secures a major future revenue stream for the company.

After the initial pop the shares cooled down to $220.35, up 4.1% from previous close.

Is now the time to buy AbbVie? Access our full analysis report here, it’s free.

What Is The Market Telling Us

AbbVie’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock gained 3.7% on the news that the company posted strong second-quarter earnings that beat expectations and raised its full-year financial forecast. The pharmaceutical giant disclosed adjusted earnings of $2.97 per share and revenues of $15.42 billion, both numbers surpassing analyst estimates. This performance was driven by robust sales from its immunology drugs, Rinvoq and Skyrizi, which successfully offset lower sales from the company's older drug, Humira. Confident in its momentum, AbbVie lifted its full-year guidance for both revenue and adjusted earnings per share. In response to the strong results, analysts at firms including Morgan Stanley and Raymond James increased their price targets on the stock.

AbbVie is up 22.8% since the beginning of the year, and at $220.35 per share, has set a new 52-week high. Investors who bought $1,000 worth of AbbVie’s shares 5 years ago would now be looking at an investment worth $2,457.

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