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Piper Sandler has adjusted its outlook on AbbVie (NYSE: NYSE:ABBV), a biopharmaceutical company, by raising its price target to $209 from $196. The firm has maintained its Overweight rating on the stock.
The revision reflects new insights from a dermatology survey that suggests upcoming competition in the atopic dermatitis (AD) market, particularly from Galderma's nemolizumab, which is expected to receive approval within the year.
The survey indicates that while Regeneron (NASDAQ:REGN)'s Dupixent continues to lead as the first-line therapy for AD, nemolizumab could present a significant challenge, especially for patients with severe itch.
Despite this potential shift, Piper Sandler believes that current consensus forecasts for Regeneron are not under immediate threat. However, they advise that investors should monitor the launch of nemolizumab closely.
In the second-line AD treatment market, AbbVie's Rinvoq has reportedly hit a plateau, facing competition from Leo Pharma's Adbry. The market landscape is set to become more competitive with expected data releases on several novel treatment mechanisms in the near future. This includes phase 3 data for Amgen (NASDAQ:AMGN)'s anti-OX40 rocatinlimab and phase 2 data for the anti-IL-7Rα bempikibart, both anticipated to be announced by the end of the year.
The analyst underscored the dynamic nature of the AD treatment sector, with multiple mid to late-stage data points expected soon.
In other recent news, AbbVie's newly approved drug, TEPKINLY, has received conditional approval from the European Commission for the treatment of adult patients with relapsed or refractory follicular lymphoma.
The approval is based on the EPCORE NHL-1 clinical trial results, demonstrating a response rate of 83%. The drug's development is a collaborative effort between AbbVie and Genmab (NASDAQ:GMAB), targeting multiple B-cell malignancies. In parallel, the Biden administration has initiated price negotiations with Medicare for ten high-cost prescription drugs, including Imbruvica by AbbVie. These discussions are part of the Inflation Reduction Act's efforts to control drug prices.
The U.S. government anticipates saving $6 billion in the first year from these negotiations, with the new prices set to take effect in 2026. AbbVie has also completed its acquisition of Cerevel Therapeutics, expanding its neuroscience portfolio and reaffirming its full-year adjusted diluted earnings per share guidance for 2024.
Goldman Sachs has increased AbbVie's price target to $200 from $190, while maintaining a Buy rating on the shares, indicating a continued growth trajectory for AbbVie's products Skyrizi and Rinvoq.
InvestingPro Insights
As Piper Sandler updates its outlook on AbbVie, it's essential to consider the company's financial health and market performance. According to InvestingPro data, AbbVie boasts a robust market capitalization of $346.86 billion, underscoring its significant presence in the biopharmaceutical industry. The company's P/E ratio stands at 26.73 when adjusted for the last twelve months as of Q2 2024, which may suggest a higher valuation compared to industry peers. However, with a dividend yield of 3.16% and a history of raising its dividend for 11 consecutive years, AbbVie demonstrates a commitment to returning value to shareholders.
InvestingPro Tips highlight that AbbVie's net income is expected to grow this year, and 14 analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook on the company's profitability. Furthermore, the stock has experienced a strong return over the last three months, with a 25.22% price total return, which aligns with Piper Sandler's optimistic stance on AbbVie's market position.
For investors seeking deeper insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/ABBV, which provide a comprehensive analysis of AbbVie's financial metrics and market trends. These tips can offer valuable guidance for making informed investment decisions in the context of the competitive atopic dermatitis treatment landscape.
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