AbbVie Inc.

Overview Key strengths Key risks Market-leading position in the high-margin, patent-protected market for prescription drugs, which is relatively insensitive to the business cycle. Moderate revenue concentration in immunology (about 50% of 2022 revenue) is compounded by intensifying competition from new products and rising adoption of biosimilars in the U.S. Good product diversity with 11 blockbuster drugs, and no product expected to represent more than 25% of revenues over the next several years, following the recent loss of exclusivity on Humira. More aggressive financial policy than most Big Pharma peers, with a tolerance for leverage of 2x-3x. This is compounded by below average investment in internal research and development (R&D; about 13% of 2023 revenue-year to date), which increases the company?s

...AbbVie is a leading global branded biopharmaceutical company with good positions in several therapeutic areas. AbbVie benefits from the same high barriers to entry, good pricing power, strong profitability, and limited sensitivity to the business cycle as other rated Big Pharma peers. The company's scale (2022 revenue of about $58 billion), profitability (adjusted EBITDA margins of 53%), product diversity (top product expected to represent less than 25% of revenues over the next few years, an improvement from prior levels), and therapeutic diversity (top therapeutic area is expected to be in the 43%-50% range) are in line with or better than most peers'. We also believe AbbVie has a uniquely strong commercial presence, backing its dominant position in immunology. Conversely its level of investment in R&D (11% of revenue in 2022, compared to peers averaging about 19%) and geographic concentration (79% of 2022 revenue was in the U.S.), are weaknesses relative to peers. For more details, see...

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