Analyzing AbbVie’s Business Journey: A Detailed Case Study
About Company
AbbVie is a publicly-traded US-based biopharmaceutical firm set up in 2013. It came into existence as a by-product of Abbott Laboratories.
What type of firm is AbbVie?
AbbVie is a publicly-traded firm.
To which industry does AbbVie belong?
AbbViebelongs to the biopharmaceutical industry.
How many people work for AbbVie?
As of January 2022, the biopharmaceutical giant hires approximately 50,000 workers worldwide.
When was AbbVie set up?
The US-based biopharmaceutical firm came into existence in 2013, nine years back.
How was AbbVie founded?
The company was created as an outcome of a spin-off performed by Abbott Laboratories in 2013.
Where is the central office of AbbVie situated?
The firm has its central office in North Chicago, Illinois.
Who are the top competitors of AbbVie?
The top competitors of AbbVie are the following:
- Johnson & Johnson
- Merck
- Roche
- Pfizer
Which territory does AbbVie serve?
The company features a worldwide client base. It has a formidable presence in more than 170 nations in the world.
Which company was the forerunner of AbbVie?
The forerunner of the firm was Abbott Laboratories.
What are the various products provided by AbbVie?
AbbVie offers the following products:
Pharmaceutical drugs
- Imbruvica (generic ibrutinib)
- Humira (generic adalimumab)
- Zinbryta (generic daclizumab)
- Venclexta (generic venetoclax)
- Norvir (generic ritonavir)
- Kaletra (generic lopinavir)
- Skyrizi (generic risankizumab)
- Mavyret/Maviret (generic pibrentasvir/glecaprevir)
- Rinvoq (generic upadacitinib)
Brief History
On October 19, 2011, Abbott Laboratories declared its strategy to split into two publicly-traded firms.
The fresh Abbott Laboratories would concentrate on diversified merchandise comprising diagnostic devices, medical equipment, and nutrition goods. At the same time, AbbVie would run as a research-oriented pharmaceutical producer.
The split was in force from January 1, 2013. AbbVie was formally registered on the New York Stock Exchange with the ticker symbol ABBV on January 2, 2013.
As stated by Miles White, Chief Executive Officer at that period, the objective of the separation was to permit the marketplaces to assess the two commercial enterprises disjointedly. A few venture capitalists were worried that the separation took place to safeguard the worth of the equipment trade from the slump of worth confronting the medicine segment due to the impending cessation of exclusive rights on Humira, which represented approximately 50% of the medicine segment’s earnings.
Till December 2015, AbbVie hired more than 28,000 worldwide and offered goods to citizens in over 170 nations.
In March 2020, once the COVID-19 pandemic grew into a worldwide catastrophe, the administration of Israel declared that it would compel AbbVie to certify its exclusive rights for Kaletra, the trademark for ritonavir/lopinavir, a static dose combination drug for the cure and deterrence of AIDS/HIV which was assumed to have certain pertinence to combating COVID-19 as well. In reply, the company declared that it would stop wholly implementing its exclusive rights on the medicine.
In June 2021, the US Senate Finance Committee, under the chairmanship of Ron Wyden (Democratic-Oregon), commenced a probe to find out if the firm utilized the Tax Cuts and Jobs Act of 2017 for repurchasing its shares utilizing earnings put aside by the tax regulations. In a communication to Richard Gonzalez, the CEO of AbbVie, Wyden observed that the firm sustained a pretax loss (2020) in the United States of US $4.5 billion and an international pretax gain of US $7.9 billion during the same period. Wyden charged the firm with transferring earnings to avert the US taxation burden.
What are the various brands available under AbbVie?
The various brand names available under the company are as follows:
Immunology
RINVOQ – Extended-release pills for oral consumption
HUMIRA – Hypodermic injections
SKYRIZI – Hypodermic injections
Oncology
VENCLEXTA – For oral consumption
Virology
KALETRA – For oral solution and oral consumption
NORVIR – Pills for oral solution and oral consumptionand oral powder
MAVYRET – Pills for oral consumption
VIEKIRA PAK – Co-bundled for oral consumption
Neurology
BOTOX – For intradetrusor, intramuscular, or intradermal application
CELEXA – Pills
DEPAKOTE ER and DEPAKOTE – Extended and delayed-release pills for oral consumption
FETZIMA – Extended-release pills for oral consumption
DUOPA – For enteral suspension
LEXAPRO – Oral solution and pills for oral consumption
NAMENDA – Pills for oral consumption
NAMENDA XR – Extended-release pills for oral consumption
SAPHRIS – Sublingual pills
QUILIPTA – Pills for oral consumption
Besides, AbbVie manufactures drugs for other specialty areas.
What are the various subsidiaries of AbbVie Corporation?
The various subsidiaries of the company are:
- Allergan
- Pharmacyclics
- AbbVie GK
- AbbVie Logistics B.V.
- Syndesi Therapeutics SA
- Stemcentrx, Inc.
- AbbVie Products, LLC
- Odyssea Pharma SPRL
- Allergan Thailand
- Mavupharma, Inc.
- Kos Pharmaceuticals
- AbbVie Ireland Unlimited Company
- Allergan de Colombia SA
- Repros Therapeutics
- Allergan Korea Ltd.
- Allergan Costa Rica SRL
- Mpex Pharmaceuticals Inc.
- Allergan Holdings Ltd.
- Axcan Pharma US Inc.
- Fournier Laboratories Ireland Ltd.
- Knoll LLC
- Eden Biodesign, LLC
- TeneoOne Inc.
- Vicuron Pharmaceuticals
- Oculeve, Inc.
- AGN LLC
- Allergan Funding SCS
- AbbVie Operations Singapore Pte Ltd.
Debates
1) Anti-competitive exercises
The company has been charged with utilizing anti-competitive copyright brushes to thwart potentially more inexpensive biosimilars from getting into the marketplace. AbbVie is presently mired in a legislative conflict versus Alvotech Iceland, which is attempting to introduce a Humira biosimilar to the pharma marketplaces. Forest Laboratories, an ancillary of AbbVie, has faced charges of utilizing illegitimate contracts to stop generic variants of Namenda, its Alzheimer’s medication, from participating in the market.
In 2018, the company consented to disburse US $25 million to settle claims that it took advantage of bribe proposals for endorsing Tricor, its cholesterol medication. In 2020, the firm consented to disburse US $24 million for settling charges that it took advantage of bribery strategies for boosting Humira, its rheumatoid arthritis medication, with “nurse ambassadors.”
2) Drug price raises
Humira is a medication that has applications in curing Crohn’s disease, rheumatoid arthritis, as well as other autoimmune disorders. Initially launched in 2003, the company has subsequently hiked the medication’s rate by over four hundred and seventy percent, concluding in a yearly provision currently priced at around US $77,000. AbbVie has raised the cost of Imbruvica; a medication applied to cure mantle cell lymphoma and other types of carcinogenic disorders, by eighty-two percent after it was introduced in 2013. This year (2022), the medication has been priced at US $181,529. For patients consuming 4 pills per day, the cost price is around US $242,039.
3) Promotion of Opioid analgesics
In 2022 July, AbbVie consented to compensate US $2.37 billion for reconciling United States legal proceedings versus its Allergan division on promoting opioid analgesics. As a component of the resolution, AbbVie abnegated any misconduct. The firm’s stock slumped 6% after a revenue statement release that incorporated a US $2.2 billion fee associated with the opioid arrangement.
Other controversies
As stated by the Wall Street Journal in 2016 January, ibrutinib, which is a specialty medication, came with a price of US $116,600 to $155,400 per year across-the-board in the US. Despite offering healthcare insurance and rebates, the exorbitant price made it difficult for a large number of patients to replete their prescriptions. The company furnished ballpark figures for worldwide sales of the medication at US $1 billion (2016) and US $5 billion (2020).
Richard A. Gonzalez – Chief Executive Officer and Chairman of the BOD
Richard A. Gonzalez currently serves as the Chief Executive Officer and Chairman of the Board of Directors of AbbVie, a worldwide biopharmaceutical firm that recruits around 50,000 personnel around the world and sells drugs in over 175 nations.
Before AbbVie’s split from Abbott in January 2013, Richard Gonzalez had a 30-year stint with Abbott. Richard was in the position of Chief Operating Officer and President of the company before temporarily relinquishing office in 2007. Gonzalez occupied different top management berths in the healthcare products trade of Abbott, including the following:
- President and Senior Vice President of the erstwhile Hospital Products Division
- Chief Operating Officer and President of the Medical Products Group
- General Manager and Divisional Vice President for Diagnostics Operations in Canada and the United States
- President and Vice President of the Health Systems Division
Mr. Richard has been a venerable stalwart in the greater Chicago business community. He is an affiliate of the Commercial Club of Chicago and serves as a representative of AbbVie in the Civic Committee. Gonzalez is also an associate of the Business Roundtable, which is the sole countrywide establishment entirely standing for the CEOs of the USA’s top corporations.
AbbVie stock performance
The common stocks of AbbVie are traded on the New York Stock Exchange (NYSE) with the ticker symbol ABBV. The stocks are components of the following indices:
- Standard & Poor 100
- Standard & Poor 500
On September 27, 2022, AbbVie (ABBV) ended trading at US $141.72 with the data furnished below at 4:03 pm EDT (Eastern Daylight Time).
Stock chart
| Day’s Open | US $142.59 |
| Previous Close | US $141.21 |
| Intraday High | US $145.54 |
| Intraday Low | US $141.29 |
| 52-week Range | US $106.86-175.91 |
| 1-day change | +0.51 (+0.36%) |
| Price (Closing) | US $141.72 |
| Volume traded | 5,590,212 |
| Ask | 142.68 x 800 |
| Bid | 141.74 x 1000 |
| Average volume | 5,376,056 |
| Earnings Per Share (Trailing 12 Months) | US $7.07 |
| Market capitalization | US $250.575 Billion |
| Price Earning Ratio (Trailing 12 Months) | 20.05 |
| Earnings date | October 27 to October 31, 2022 |
| One-year target estimate | US $158.85 |
| Beta (5Year Monthly) | 0.69 |
| Ex-dividend date | October 13, 2022 |
| Forward dividend and yield | 5.64 (3.94%) |
AbbVie Financials at a glimpse
| Operating income | ↓ US $17.92 billion (2021) |
| Net income | ↓US $11.54 billion (2021) |
| Total equity | ↑ US $15.44 billion (2021) |
| Total assets | ↓ US $146.53 billion (2021) |
| Revenue | ↑ US $56.20 billion (2021) |
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