Earlier this week, AbbVie ABBV announced that it is in-licensing rights to develop phase I candidate, GUB014295, a long-acting amylin analog for the treatment of obesity, from Danish research company, Gubra.

While the obesity field is greatly dominated by GLP-1 products, the amylin hormone is gaining steam as a potential target for treating obesity. It regulates appetite by slowing down stomach emptying, which makes a person feel full and helps prevent overeating.

AbbVie will lead the development of the candidate. For the deal, AbbVie will pay Gubra an upfront payment of $350 million and be entitled to make milestone payments of up to $1.875 billion to the latter.

The obesity market has gained tremendous popularity and is expected to reach $100 billion by 2030, per a Goldman Sachs report. Eli Lilly LLY and Novo Nordisk NVO currently dominate the space with their respective GLP-1 drugs Zepbound and Wegovy. However, several large drugmakers like Merck MRK, Pfizer, Amgen, and AstraZeneca, among others, are trying to get a share of the obesity space either by developing candidates in-house or buying rights to obesity candidates through licensing deals with smaller biotechs. The deal marks AbbVie’s entry into the obesity space.

Long-term investors, however, are not focused on one-off news like these. They focus on the company’s fundamentals to understand how to play the stock.

ABBV’s Successful New Drugs — Skyrizi and Rinvoq

AbbVie lost patent protection for Humira in the United States in January 2023 and in the EU in 2018. Humira's sales are declining due to the loss of exclusivity and biosimilar erosion. However, AbbVie has successfully navigated Humira's loss of exclusivity by launching two other successful new immunology medicines, Skyrizi and Rinvoq, which are performing extremely well.

Skyrizi and Rinvoq generated combined sales of $17.7 billion in 2024. The drugs are seeing strong performance across all their approved indications, especially in the popular inflammatory bowel disease (IBD) space, which includes two conditions — ulcerative colitis (UC) and Crohn’s disease (CD). Importantly, Skyrizi and Rinvoq have demonstrated compelling head-to-head data against several novel therapies in clinical studies, which have given them a competitive advantage.

AbbVie expects to record combined Skyrizi and Rinvoq sales of more than $31 billion in 2027. Strong immunology market growth, market share gains and momentum from new indications, such as the recent launch of Skyrizi in UC, as well as the potential for five new indications for Rinvoq over the next few years, are expected to drive these drugs’ growth.

ABBV Boasts an Attractive Pipeline

AbbVie has several early/mid-stage pipeline candidates with blockbuster potential. The company expects several regulatory submissions, approvals and key data readouts in the next 12 months.

ABBV also has an exciting and diverse pipeline of promising new therapies in blood cancers and solid tumors like ABBV-383, a BCMA CD3 bispecific (relapsed/refractory multiple myeloma) and Temab-A (metastatic colorectal cancer). Teliso-V, a promising c-Met ADC, is under review in the United States for nonsquamous non-small cell lung cancer, with an approval decision expected in the first half of 2025.

In November, AbbVie gained approval for Vyalev, a transformative therapy for treating advanced Parkinson’s disease. Studies are also ongoing to evaluate new indications for Botox and Juvederm collection of fillers.

AbbVie on an Acquisition Spree

The company has been on an acquisition spree in the past couple of years, which is strengthening its pipeline. It has signed several M&A deals in the immunology space, its core area, while also signing some early-stage deals in oncology and neuroscience areas. It has inked more than 20 early-stage deals since the beginning of 2024, including promising technologies and innovative mechanisms that can elevate the standard of care in immunology, oncology and neuroscience. The latest deal with Gubra is a testament to this trend.

ABBV’s Slowing Aesthetics Sales & Humira Erosion

Sales of AbbVie’s blockbuster drug Humira are declining due to biosimilar erosion. Humira volume is rapidly eroding compared to other novel mechanisms (including Skyrizi and Rinvoq). The decline expected to be sharper in 2025 as more plans exclude branded Humira and move to exclusive biosimilar contracts.

AbbVie is witnessing declining sales of Juvederm fillers in the United States and China due to challenging market conditions. The slowing growth of the U.S. facial injectables market and persistent economic headwinds, which are affecting consumer spending in China, are hurting Juvederm's sales due to its higher price point. Juvederm sales declined 14.6% in 2024.

ABBV’s global sales of aesthetics portfolio declined 0.6% in 2024. On the fourth-quarter conference call, AbbVie also lowered its guidance for its aesthetics franchise’s long-term growth. It expects a high single-digit CAGR for this franchise through 2029. This guidance translates to a little more than $7 billion, much lower than the previous expectation of more than $9 billion for 2030.

ABBV Stock Price, Valuation and Estimate Revision

AbbVie stock has gained 14.8% in the past year compared with an increase of 0.3% for the industry.

ABBV Stock Outperforms Industry

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From a valuation standpoint, AbbVie is not very cheap. Going by the price/earnings ratio, the company’s shares currently trade at 16.52 forward earnings, just slightly lower than 17.80 for the industry. The stock is cheaper than some other large drugmakers like Eli Lilly and Novo Nordisk but priced much higher than most other large drugmakers. The stock is also trading above its five-year mean of 11.76.

ABBV Stock Valuation

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The Zacks Consensus Estimate for 2025 earnings has risen from $12.24 per share to $12.29 while that for 2026 has increased from $13.81 to $13.93 per share over the past 30 days.

ABBV Estimate Movement

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Stay Invested in ABBV Stock

AbbVie faces its share of headwinds, such as Humira biosimilar erosion, increasing competitive pressure on cancer drug Imbruvica and slow market growth trends for fillers in the United States and China. It also faced some key pipeline setbacks in 2024.

However, AbbVie has faced its biggest challenge — Humira’s patent cliff — quite well and looks well-positioned for continued strong growth in the years ahead. The company saw a rapid return to sales growth in 2024 after revenues declined in 2023 due to Humira loss of exclusivity (LOE), driven by its ex-Humira platform. AbbVie’s ex-Humira drugs rose around 19% (on a reported basis) in 2024, exceeding its internal expectations.

Boosted by its new product launches, AbbVie expects to return to robust mid-single-digit revenue growth in 2025 with a high single-digit CAGR through 2029 as it has no significant LOE event for the rest of this decade. A substantial portion of this growth is expected to be driven by robust performances from Skyrizi and Rinvoq.

AbbVie’s rising estimates, a solid pipeline and the prospect of growth in 2025 sales and profits are good enough reasons to stay invested in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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