ABBV or BMY: Which Biopharma Giant Has Better Prospects for Now?

Core Insights - AbbVie, Inc. (ABBV) and Bristol Myers Squibb (BMY) are prominent players in the biopharmaceutical industry, each with diverse portfolios and global reach [1][2] - Both companies have established strong positions in their respective therapeutic areas, making it challenging to choose between them based on fundamentals, growth prospects, and valuations [3] AbbVie Overview - AbbVie's flagship drug, Humira, has lost patent protection, leading to significant sales erosion due to biosimilar competition, particularly in 2024 and expected to worsen in 2025 [4] - The acquisition of Allergan for $63 billion has diversified AbbVie's product offerings and reduced reliance on Humira [4] - AbbVie's immunology drugs, Skyrizi and Rinvoq, are performing well, particularly in treating inflammatory bowel diseases, helping to offset Humira's declining sales [5] - AbbVie has a robust oncology portfolio with drugs like Imbruvica and Venclexta, with recent label expansions increasing the patient population for Venclexta [6] - The approval of Vyalev for advanced Parkinson's disease in October 2024 further enhances AbbVie's portfolio [6] - AbbVie is pursuing promising R&D initiatives, including next-generation immunology approaches and innovative therapies for neuropsychiatric disorders, alongside active M&A strategies [7] - As of March 31, 2025, AbbVie reported $64.5 billion in long-term debt and $5.4 billion in short-term obligations, with cash and equivalents around $5.2 billion [8] Bristol Myers Squibb Overview - BMY's Growth Portfolio, including drugs like Reblozyl and Opdualag, has stabilized revenue amid generic competition for legacy drugs [9][10] - Reblozyl has shown strong performance since its approval, contributing significantly to revenue growth [10] - Opdivo continues to gain momentum with consistent label expansions, and recent FDA approvals for new drugs like Cobenfy broaden BMY's portfolio [11][12] - Despite new drug launches, BMY faces revenue pressure from legacy drugs, which saw a 20% decline in the first quarter due to generic competition [13] - BMY's long-term debt stood at $46.1 billion as of March 31, 2025, with cash and equivalents of $12.1 billion [14] Financial Estimates and Performance - The Zacks Consensus Estimate for AbbVie's 2025 sales indicates a 6.6% year-over-year increase, with EPS expected to improve by 20.65, although recent estimates have declined [15] - For BMY, the 2025 sales estimate suggests a 4.13% decrease, while EPS is projected to increase by 487.83%, influenced by low EPS figures in 2024 [17] - Year-to-date, ABBV shares have gained 11.8%, while BMY shares have decreased by 11.2%, compared to a 1.6% gain in the large-cap pharma industry [18] - In terms of valuation, ABBV trades at 14.76X forward earnings, slightly higher than BMY's 7.60X, while the industry average is 15.16X [19] - BMY offers a higher dividend yield of 5.20% compared to ABBV's 3.4%, which is attractive for investors [22] Investment Outlook - Both companies are considered safe investments in the biopharma sector, but selecting one over the other is complex due to their current Zacks Rank of 3 (Hold) [23] - AbbVie's diverse portfolio and strong performance from its immunology drugs position it favorably despite challenges from declining Humira sales [24] - BMY's efforts to counteract revenue declines from legacy drugs through new approvals and acquisitions are commendable, but challenges remain for 2025 [25]