Core Viewpoint - The healthcare industry, with annual expenditures of $4.9 trillion in the U.S., presents significant opportunities for dividend investing through quality companies that exhibit consistent growth and strong financial health [1][4]. Group 1: Medtronic - Medtronic is a leading healthcare technology company with a focus on cardiovascular, diabetes, medical-surgical, and neuroscience products, conducting over 190 active clinical trials and holding 43,000 active patents [4][6]. - The company has a history of 47 consecutive annual dividend increases and is on track to become a Dividend King upon its 50th increase, currently yielding 3.2% [5][6]. - Analysts project Medtronic's earnings to grow by 6% to 7% annually over the next three to five years, supported by strategic moves such as spinning off its diabetes business [6][5]. Group 2: AbbVie - AbbVie is a pharmaceutical giant known for its successful drug Humira and has effectively transitioned post-patent expiration, with new drugs Rinvoq and Skyrizi showing promise [8][10]. - The company has achieved 53 consecutive dividend increases since its 2013 spin-off from Abbott Laboratories, currently yielding 3.5% and averaging a 7.7% increase in dividends over the past five years [9][10]. - Analysts expect AbbVie to generate nearly $60 billion in revenue this year, with long-term earnings growth projected at 13% annually, highlighting its strong product development capabilities [10][9]. Group 3: Johnson & Johnson - Johnson & Johnson is a highly recognized healthcare company that spun off its consumer segment in 2023 to focus on pharmaceuticals and medical devices [11][12]. - The company boasts an AAA credit rating and has maintained 62 consecutive years of dividend payments and increases [12][13]. - Analysts forecast earnings growth of just over 6% annually for the next three to five years, with a dividend payout ratio of only 50% of estimated earnings for 2025, starting with a yield of 3.3% [13][12].

Core Insights - IGI Therapeutics SA and AbbVie Inc. have entered into an exclusive licensing agreement for IGI's investigational asset ISB 2001, aimed at oncology and autoimmune diseases [1][2] - AbbVie will have exclusive rights to develop, manufacture, and commercialize ISB 2001 in North America, Europe, Japan, and Greater China [2] Financial Terms - IGI will receive an upfront payment of $700 million and is eligible for up to $1.225 billion in milestone payments, along with tiered, double-digit royalties on net sales [3] - The total potential financial benefit for IGI from this agreement could reach $1.925 billion [3] Product Details - ISB 2001 is a first-in-class trispecific T-cell engager targeting BCMA and CD38 on myeloma cells and CD3 on T cells, currently in Phase 1 for relapsed/refractory multiple myeloma [3] - Recent data from a study presented at the 2025 ASCO Annual Meeting showed a sustained overall response rate (ORR) of 79% and a complete/stringent complete response (CR/sCR) rate of 30% in heavily pretreated relapsed/refractory myeloma patients [4] Regulatory Status - The U.S. FDA granted ISB 2001 Orphan Drug Designation in July 2023 and Fast Track Designation for relapsed/refractory myeloma patients in May 2025 [5] Market Context - Other companies in the industry are also pursuing significant partnerships, such as AstraZeneca's reported talks with Summit Therapeutics for a $15 billion deal and BioNTech's agreement with Bristol Myers Squibb involving $1.5 billion upfront [5][6] - AbbVie’s stock price increased by 2.63% to $195.63 following the announcement [7]

Core Viewpoint - IGI Therapeutics and AbbVie have entered into an exclusive licensing agreement for ISB 2001, a novel trispecific T-cell engager targeting multiple myeloma, which is currently in Phase 1 clinical trials [1][2]. Company Overview - IGI Therapeutics is a clinical-stage biotechnology company focused on developing innovative biologics in oncology, utilizing its proprietary BEAT® technology platform to create first-in-class multispecific therapies [7]. - AbbVie is a global biopharmaceutical company dedicated to discovering and delivering innovative medicines across various therapeutic areas, including oncology [8]. Product Details - ISB 2001 is designed to target BCMA and CD38 on myeloma cells and CD3 on T cells, aiming to improve safety and efficacy compared to first-generation bispecific antibodies [3]. - The drug has shown a sustained overall response rate (ORR) of 79% and a complete/stringent complete response (CR/sCR) rate of 30% in a heavily pretreated patient population [3]. Licensing Agreement - Under the agreement, AbbVie will have exclusive rights to develop, manufacture, and commercialize ISB 2001 in North America, Europe, Japan, and Greater China [2]. - IGI will receive an upfront payment of $700 million and could earn up to $1.225 billion in milestone payments, along with tiered, double-digit royalties on net sales [2]. Regulatory Designations - ISB 2001 received Orphan Drug Designation from the U.S. FDA in July 2023 and Fast Track Designation for treating relapsed/refractory myeloma patients in May 2025 [4]. BEAT® Platform - The BEAT® platform enables the development of next-generation immune cell engagers with enhanced stability and function, addressing limitations of traditional bispecific antibody production [5]. - Key features include multispecific versatility, optimized engineering for precise modulation, and robust manufacturability [5].

Core Insights - AbbVie and IGI Therapeutics have entered into an exclusive licensing agreement for ISB 2001, a novel investigational asset targeting relapsed/refractory multiple myeloma [1][2] - ISB 2001 is a first-in-class trispecific T-cell engager developed using IGI's BEAT® protein platform, demonstrating promising clinical results [6][7] - The agreement includes an upfront payment of $700 million to IGI, with potential milestone payments totaling up to $1.225 billion, along with tiered royalties on net sales [2] Company Overview - AbbVie is focused on discovering and delivering innovative medicines across key therapeutic areas, including oncology, with a commitment to addressing significant health issues [3][4] - The company is advancing a dynamic pipeline of investigational therapies for various cancer types, including blood cancers and solid tumors, with over 35 investigational medicines currently in clinical trials [5] Product Details - ISB 2001 targets BCMA and CD38 on myeloma cells and CD3 on T cells, currently in Phase 1 clinical trials, showing an overall response rate of 79% and a complete response rate of 30% in heavily pretreated patients [6][7] - The U.S. FDA has granted ISB 2001 Orphan Drug Designation and Fast Track Designation for treating relapsed/refractory myeloma patients [8] Technology Platform - IGI's BEAT® platform enables the development of next-generation immune cell engagers, addressing limitations of traditional bispecific antibodies and enhancing manufacturability and therapeutic potential [9]

Core Viewpoint - President Trump has threatened to impose tariffs of up to 200% on imported pharmaceuticals, indicating a significant shift in trade policy that could impact the pharmaceutical industry in the U.S. [1][2] Group 1: Tariff Announcement - The proposed tariffs would be set at a very high rate, potentially reaching 200% [1] - Trump mentioned that there would be a grace period of about one to one and a half years for drugmakers to adjust before the tariffs take effect [2] - This announcement marks Trump's most significant comment on pharmaceutical tariffs since the initiation of a Section 232 investigation in April [3] Group 2: Industry Impact - The planned tariffs are expected to negatively affect pharmaceutical companies, which have warned that such levies could increase costs, deter investments in the U.S., and disrupt the drug supply chain, ultimately putting patients at risk [4] - The pharmaceutical industry is already facing challenges from Trump's drug pricing policies, which threaten their profitability and ability to invest in research and development [4] Group 3: Manufacturing Incentives - Trump has stated that the tariffs would encourage drug companies to relocate their manufacturing operations back to the U.S. [5] - Companies like Eli Lilly, Johnson & Johnson, and AbbVie are reportedly increasing their investments in the U.S. as domestic drug manufacturing has significantly declined over the past few decades [5]

Core Insights - AbbVie has effectively managed the loss of exclusivity for Humira by launching two new immunology drugs, Skyrizi and Rinvoq, with significant sales expected in the upcoming quarterly report [1][3][8] Group 1: Drug Performance and Sales Expectations - Skyrizi and Rinvoq have been launched across major indications previously covered by Humira, including a new indication for atopic dermatitis, showing strong performance particularly in inflammatory bowel disease (IBD) [2] - AbbVie anticipates combined sales of $6 billion for Skyrizi and Rinvoq in the second quarter, with individual estimates of $4 billion for Skyrizi and $2 billion for Rinvoq [3][8] Group 2: Expansion in Other Therapeutic Areas - AbbVie is also expanding its oncology and neuroscience portfolios, adding new therapies such as Epkinly, Elahere, and Emrelis, bringing its total oncology therapies to five [4] - The neuroscience segment has seen growth driven by increased uptake of migraine treatments, Ubrelvy and Qulipta [4] Group 3: Competitive Landscape - The immunology market is highly competitive, with key players like Johnson & Johnson and Eli Lilly also expanding their portfolios. Johnson & Johnson is focusing on Tremfya after Stelara lost patent exclusivity [5] - Eli Lilly has recently received FDA approval for Omvoh, marking its entry into the IBD market, which enhances its immunology offerings [6] Group 4: Valuation and Market Performance - AbbVie shares have outperformed the industry year to date, trading at a price/earnings (P/E) ratio of 14.21, slightly below the industry average of 15.01 [7][10] - The bottom-line estimate for AbbVie in 2025 remains at $12.28, with a slight increase in the 2026 estimate from $14.05 to $14.06 [11]

Group 1 - The article discusses ongoing recession talks, indicating that these discussions have been prevalent for several years [1] - The author emphasizes a focus on dividend investing in quality blue-chip stocks, BDCs, and REITs, aiming to build investment portfolios for lower and middle-class workers [2] - The author expresses a personal investment strategy of buy-and-hold, with plans to rely on dividends for retirement income in the next 5-7 years [2] Group 2 - The article includes a disclosure of a beneficial long position in SCHD shares, indicating a personal investment interest [3] - It clarifies that the article is not providing financial advice and encourages readers to conduct their own due diligence [2][4] - The article notes that past performance is not indicative of future results, highlighting the uncertainty in investment outcomes [4]

Summary of US Large Cap Pharmaceuticals: Mid-Year State Of Play Industry Overview - The report focuses on the US Large Cap Pharmaceuticals sector, analyzing key companies such as ABBV, LLY, JNJ, MRK, BMY, and PFE [6][5][32]. Core Insights and Arguments 1. **Revenue Growth and Stability**: Projected revenues from growth/stable products for 2025-2030 are as follows: ABBV at $10.39 billion, LLY at $3.06 billion, JNJ at $1.68 billion, MRK at $1.37 billion, BMY at $0.60 billion, and PFE at $0.54 billion [5]. 2. **Patent Cliff Exposure**: The number of years to the next major patent cliff varies, with ABBV and MRK at 3.5 years, while LLY and JNJ face longer timelines [5]. 3. **Market Sentiment**: The report indicates a "Launch Trade" momentum, with high investor psychology impacting stock performance, particularly for ABBV and GILD as popular longs, while MRK is viewed as a funding underweight [6]. 4. **Macro Environment**: A friendlier US macro backdrop with diminished recession risks and benign inflation data is noted, which could complicate the case for large-cap biopharma relative to other sectors [6]. 5. **Drug Pricing Uncertainty**: Ongoing debates regarding drug pricing and potential implementation of Most Favored Nation (MFN) pricing are highlighted as significant uncertainties affecting investor sentiment [6]. 6. **Key Catalysts for 2H25**: Important upcoming catalysts include LLY's ATTAIN-1 data for an oral obesity pill, BMY's ADEPT-2 Phase 3 data for Alzheimer's treatment, and MRK's CADENCE trial outcomes [6]. Additional Important Considerations 1. **Tariff Implications**: The report discusses potential tariffs on pharmaceuticals, with an expected starting rate of 25% on transfer pricing, potentially dropping to around 10% based on negotiations [6]. 2. **Investor Positioning**: The healthcare sector is experiencing a positioning cleanse, with Medtech favored over large-cap biopharma [6]. 3. **Earnings Setup**: Investor sentiment is more comfortable with ABBV, PFE, and LLY, while concerns are raised regarding BMY's performance [6]. 4. **Government Exposure**: The report notes that government end-market exposure varies significantly among companies, with LLY and MRK having over 35% exposure to Medicare/Medicaid revenues [5]. Conclusion The US Large Cap Pharmaceuticals sector is navigating a complex landscape characterized by macroeconomic factors, regulatory uncertainties, and evolving investor sentiment. Key companies are positioned differently based on their revenue growth potential, patent cliff exposure, and government market dependencies. The upcoming catalysts and tariff implications will be critical in shaping the sector's performance in the second half of 2025.

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Insights - The report highlights the acquisition of Capstan Therapeutics by AbbVie for up to $2.1 billion, focusing on in vivo CAR-T therapy development [6][15] - The report emphasizes the growing interest and investment in in vivo CAR-T technology, with multiple companies actively pursuing diverse delivery systems [7][26] - The pharmaceutical and biotechnology sector saw a weekly increase of 3.64%, outperforming the CSI 300 index by 2.1 percentage points, ranking 4th among 31 sub-industries [8][31] Summary by Sections 1. AbbVie Acquisition of Capstan - AbbVie announced the acquisition of Capstan Therapeutics for a maximum of $2.1 billion, focusing on in vivo CAR-T therapies [6][15] - Capstan's main asset, CPTX2309, is an RNA delivery candidate for anti-CD19 CAR-T therapy, currently in Phase I clinical trials [15][20] 2. MNC's Active Layout in In Vivo CAR-T Technology - MNC has been actively investing in in vivo CAR-T technology through collaborations and acquisitions, focusing on both lentiviral and lipid nanoparticle delivery systems [7][26] - The report notes that over 20 disclosed mRNA technology projects in in vivo CAR-T are primarily concentrated in the lipid nanoparticle direction [22][30] 3. Weekly Performance of the Pharmaceutical Sector - The pharmaceutical sector increased by 3.64% in the first week of July, outperforming the CSI 300 index [31] - Among sub-sectors, other biological products saw the highest increase of 8.28%, while medical equipment experienced the largest decline of 0.21% [35][36] 4. Recommended Stocks - Recommended stocks include major pharmaceutical and biotechnology companies such as Heng Rui Medicine, East China Medicine, and others [9]

AbbVie - AbbVie is a pharmaceutical leader with a strong portfolio, particularly in immunology with products Skyrizi and Rinvoq, achieving a revenue increase of 8.4% year-over-year to $13.3 billion in Q1, with adjusted earnings per share at $2.46, a 6.5% increase [3][4] - Skyrizi generated $3.4 billion in sales, a 70.5% year-over-year increase, while Rinvoq's revenue was $1.7 billion, up 57.2% year-over-year; management forecasts combined annual sales exceeding $31 billion by 2027, significantly higher than the previous year's $17.7 billion [4][5] - AbbVie has a deep pipeline with approximately 90 products in development, allowing it to navigate patent cliffs and maintain long-term success [5][7] - AbbVie has increased its dividends by 310% since 2013 and has a track record of 53 consecutive years of payout increases, indicating strong potential for sustained passive income [8] Abbott Laboratories - Abbott Laboratories is a leader in the medical device space, with a diversified operation across diagnostics, pharmaceuticals, and nutrition, which helps mitigate challenges in specific segments [9][10] - The diabetes care segment, particularly the FreeStyle Libre continuous glucose monitoring system, has been a significant growth driver, becoming the most successful medical device in history in terms of dollar sales [11][12] - Abbott has increased its dividends by almost 146% over the past decade, reinforcing its reputation as a Dividend King and indicating a strong foundation for long-term dividend growth [13]