Core Insights - AbbVie (ABBV) has seen a stock increase of 22.5% in 2025, outperforming the industry, sector, and S&P 500 index, which has seen a decrease of 0.1% [1][3][8] Company Performance - The strong stock performance is attributed to rising investor optimism as AbbVie successfully navigated the loss of exclusivity for its blockbuster drug, Humira, which previously accounted for over 50% of total revenues [4][5] - AbbVie launched two successful immunology drugs, Skyrizi and Rinvoq, which are performing well and expected to support top-line growth in the coming years [5][8] - Combined sales of Skyrizi and Rinvoq reached $11.6 billion in the first half of 2025, with projections of over $25 billion in 2025 and more than $31 billion by 2027 [7][8] Drug Performance - Skyrizi is annualizing at almost $18 billion, while Rinvoq is at over $8 billion, with both drugs showing strong performance in the inflammatory bowel disease market [8][9] - AbbVie expects to file for new indications for Rinvoq, which could add approximately $2 billion to peak-year sales [10][11] Oncology and Neuroscience Contributions - AbbVie's oncology segment generated $3.3 billion in the first half of 2025, driven by higher sales of Venclexta and contributions from new drugs [12] - Sales in the neuroscience portfolio increased by 20.3% to nearly $5 billion, supported by products like Botox Therapeutic and newer migraine treatments [13] Acquisition Strategy - AbbVie has executed over 30 M&A transactions since early 2024, focusing on immunology, oncology, and neuroscience to strengthen its pipeline [14] - Recent acquisitions include a licensing agreement for a treatment for obesity and a deal for a novel therapy for major depressive disorder [14][15] Challenges - Humira's sales are declining significantly due to biosimilar competition, with a more than 50% drop in the first half of 2025 [16] - Sales of Juvederm fillers have also decreased by 22.2% due to macroeconomic challenges and weakened consumer sentiment [17] Valuation and Estimates - AbbVie shares trade at a price/earnings ratio of 15.93, higher than the industry average of 14.78, indicating a relatively high valuation [18][19] - The Zacks Consensus Estimate for 2025 earnings has slightly decreased from $12.08 to $12.02, while the estimate for 2026 has increased from $14.07 to $14.33 [22] Future Outlook - AbbVie is expected to return to mid-single-digit revenue growth in 2025, driven by the performance of Skyrizi and Rinvoq, with no significant loss of exclusivity events anticipated for the rest of the decade [25][26] - The company is well-positioned for continued growth, supported by a solid pipeline and recent patent settlements [26][27]

Core Viewpoint - Johnson & Johnson's stock is performing well in 2023, with a year-to-date increase of over 23%, despite challenges in the broader healthcare sector [1][2]. Group 1: Stock Performance and Valuation - The stock is expected to reach its early 2022 all-time high of approximately $186, with potential to exceed $200 [1]. - The company has shown resilience against the backdrop of ongoing legal issues related to its talc products [1]. Group 2: Legal Strategy and Market Perception - Johnson & Johnson has shifted its legal strategy from seeking bankruptcy settlements to contesting lawsuits in court, which may have positively influenced market sentiment [2]. - There is a perception that plaintiff's lawyers may have overreached in their legal pursuits against the company [2]. Group 3: Business Segments and Growth Drivers - Johnson & Johnson is not solely a pharmaceutical company; it has a significant medical device segment that contributes to steady growth, particularly in cardiovascular products [2]. - The company has a robust drug portfolio, with thirteen drugs experiencing double-digit growth rates, which mitigates concerns over the impending patent cliff for its key drug, Stelara [3][4].

Core Viewpoint - AbbVie has successfully managed the loss of exclusivity for its blockbuster drug Humira by launching new immunology drugs, Skyrizi and Rinvoq, which are expected to drive revenue growth in the coming years [5][6][24]. Financial Performance - AbbVie stock has increased by 16.1% this year, outperforming the industry average of 4.0% and also surpassing the sector and S&P 500 index [1][3]. - The company anticipates a return to robust revenue growth in 2025, following the decline due to Humira's loss of exclusivity [6][24]. - AbbVie’s ex-Humira drugs saw a reported growth of approximately 19% in 2024, exceeding internal expectations [23]. Product Performance - Skyrizi and Rinvoq generated combined sales of $17.7 billion in 2024, with expectations to exceed $31 billion by 2027 due to strong market growth and new indications [8][9]. - The drugs are particularly strong in the inflammatory bowel disease market, including ulcerative colitis and Crohn's disease, and have shown competitive advantages in clinical studies [8][9]. Pipeline and Acquisitions - AbbVie has a diverse pipeline with several early/mid-stage candidates that have blockbuster potential, with multiple regulatory submissions and approvals expected in the next 12 months [11][12]. - The company has been actively acquiring new technologies and candidates, signing over 20 early-stage deals since the beginning of 2024, including a recent entry into the obesity treatment space [13]. Challenges and Market Conditions - AbbVie faces challenges such as the erosion of Humira's sales due to biosimilars and declining sales of Juvederm fillers, which fell by 14.6% in 2024 [14][15]. - The aesthetics portfolio's global sales declined by 0.6% in 2024, with a lowered long-term growth guidance for this segment [16]. Valuation and Estimates - AbbVie shares currently trade at a price/earnings ratio of 16.21, slightly lower than the industry average of 16.28, but higher than its five-year mean of 11.88 [17]. - The Zacks Consensus Estimate for 2025 earnings has increased from $12.18 to $12.30 per share over the past 60 days, indicating positive sentiment [19].