The Number That Could Test AbbVie Stock
AbbVie’s post-Humira growth story has been a triumph, but the single drug driving that narrative is showing the first hint of a slowdown.
AbbVie (ABBV) investors have had a good run. The stock is trading near its high, and the latest quarter saw the company beat revenue expectations and raise its full-year earnings guidance. On the surface, everything looks solid. But for a company that has staked its future on replacing the monumental sales of Humira, the grand total is less important than the growth rate of its designated heir: the immunology drug Skyrizi.
A Slight Shift In A Powerful Engine
Skyrizi’s sales grew 29.2% year-over-year in the most recent quarter, an impressive figure for a drug that brought in $4.5 billion. The reason this number should give you pause is the comparison. In the prior quarter, Skyrizi’s operational growth was 31.9%. This is not a sharp decline, or even a stall. It is, however, a deceleration. For a stock whose narrative is built on rapid growth, any change in trajectory is worth a closer look.
Why This One Drug Carries So Much Weight
Skyrizi transcends the role of a typical product to serve as the primary engine of AbbVie’s new era. The drug now accounts for $4.5 billion of the company’s $15 billion in total net revenues. Its 30.9% growth rate is more than double the company’s overall sales growth of 12.4%, acting as the primary heavy-lifter for the enterprise alongside a surging neuroscience division. The investment case for AbbVie rests heavily on the assumption that Skyrizi and its partner, Rinvoq, can grow fast enough to make the loss of Humira a distant memory. A sustained slowdown in Skyrizi’s growth would put immense pressure on the rest of the portfolio and could challenge the company’s ability to deliver the top-tier growth it has promised.
Where Abstract Fears Meet Hard Data
The biggest worry among skeptics has been the intensifying competitive landscape in immunology, a concern voiced by analysts on the company’s own earnings call. For a long time, that was an abstract risk. While this slight deceleration is a natural mathematical byproduct of Skyrizi’s massive expanding revenue base, skeptics will inevitably view it as the first potential sign of competitor friction at the margins. A stock trading near its highs with a valuation that appears to bake in continued high growth is vulnerable to any evidence that the story is changing. If this growth rate continues to soften, it could prompt the market to re-evaluate AbbVie not as a high-octane growth story, but as a more mature pharmaceutical giant, a shift that typically comes with a lower valuation multiple.
So what is the one thing to watch? It is simple: the next Skyrizi year-over-year growth number. Was this quarter’s 29.2% a one-time blip, or is it the beginning of a new, slower, and more challenging chapter for AbbVie’s most important drug?
Don’t Bet It All On One Number
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