By Elsa Ohlen

AbbVie gave investors reason to cheer, reporting higher earnings than expected for a fifth straight quarter and raising its financial forecasts for the year.

But the outlook is complex. Investors are concerned about potential high tariffs on pharmaceuticals, the potential for prices to fall, and a steep decline in sales of Abbvie's Humira, one of the world's best selling drugs.

AbbVie raised its forecast for full-year profit by 10 cents, with one huge caveat. It said it now expects adjusted earnings per share of between $12.09 and $12.29 for 2025, excluding the effects of shifts in U.S. trade policy, including tariffs on pharmaceuticals, that could affect its business.

On April 2, President Donald Trump unveiled sweeping so-called reciprocal tariffs. Pharmaceuticals were spared, but he has vowed to impose a "major" tariff on the sector "very shortly."

"The overriding question will be in the near-term whether there's a cap on how far [AbbVie] stock can move as long as tariff/drug pricing debates remain without further clarity or resolution," Cantor Fitzgerald analyst Carter Gould wrote Friday.

For the first quarter, adjusted EPS was $2.46 from sales of $13.3 billion. The consensus call among analysts tracked by FactSet was for EPS of $2.38 on sales of $12.9 billion.

Revenue from its immunology portfolio rose 17% from the same period a year ago to $6.3 billion.

Declining sales of Humira, a drug for rheumatoid arthritis and other immune disorders, were offset by sales of newer immunology drugs Skyrizi and Rinvoq, which rose 71% and 57%, respectively. Humira revenue was $1.1 billion in the quarter, falling 50% from a year earlier as a result of competition from generic drugs.

"We have increasing concerns over pricing and the number of units sold in the U.S. now that generics have entered the market," Edward Jones analyst John Boylan said about Humira. "It may take time before we see a resumption of predictable sales and earnings growth."

AbbVie stock rose 2.1% to $184.33 in early trading, while the S&P 500 rose marginally.

Shares are up 6.5% so far this year. The S&P 500 has fallen 6.7%.

Another risk for the stock is that the Trump administration is exploring so-called most-favored-nation pricing in an attempt to lower drug prices for Americans. That would peg U.S. medicine prices to the lowest level paid by comparable countries.

According to Leerink analyst David Risinger, who covers pharma companies including AbbVie, that approach could backfire. "There is a concern that these actions will harm future innovation, treatments and disease cures for Americans," Rising told Barron's this week.

Another concern, he said, is the potential effects of funding cuts at the Food and Drug Administration and the National Institutes of Health. "We fear a devastating impact from the Republican initiatives in Washington to take down science and innovation and drug industry economics which will have a significant impact long-term," Rising said.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 25, 2025 12:03 ET (16:03 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.