- AbbVie withstood the first months of U.S. copycat competition to its lucrative arthritis drug Humira about as Wall Street had expected, conceding on price to maintain insurance coverage in response to Amgen launching the country’s first biosimilar rival in January.
- U.S. Humira sales totaled nearly $3 billion, a decline of 26% from the same period one year ago and just over analysts’ consensus forecasts. AbbVie executives told investors on a Thursday conference call that most of that impact was driven by price changes.
- Amgen, which recorded $51 million in U.S. revenue for its biosimilar Amjevita, is selling its Humira rival at two different prices: a 5% discount to Humira’s nearly $90,000 annual list price, and a 55% discount. The approach is meant to address the unique demands of the U.S. healthcare system, in which insurers rely on manufacturers providing rebates off of a drug’s sticker price.
Humira is facing biosimilar competition for the first time in the U.S., more than two decades after its first approval there.
It’s a turning point for AbbVie, which for years has relied on ever-climbing sales of the many-purposed drug to drive its business. But it’s also a problem that the company has spent years preparing for. So far, AbbVie’s plan appears to be mostly holding up, although Amgen’s biosimilar is only the first of at least eight other copycats set to launch in the U.S. year.
While substantial, the 26% decline AbbVie reported in year-over-year Humira sales is mainly due to the company’s negotiations with U.S. insurers to keep the drug’s access equal to the incoming biosimilars. The sales numbers just about tracked with what analysts had forecast for the first quarter.
“The vast majority of the impact, particularly in the first quarter, is going to be price, and that's the price that we conceded to get to that 90-plus percent level of parity access,” said Scott Reents, AbbVie’s CFO, at an investor conference in March.
AbbVie executives reiterated that view on Thursday’s conference call and indicated they expect a similar 27% year-over-year erosion in the second quarter.
Sales of Amgen’s biosimilar haven’t yet amounted to much in the U.S. between launching in January and the end of March. Much of that was inventory building and, on their own earnings conference call Thursday, Amgen executives told investors to expect second quarter sales to be lower.
“I think we were clear in saying this would be a gradual uptake for this product,” one Amgen executive said. “And we think that we still have been able to use the time that we have ahead of competition wisely to build that demand.”
Still, shares in AbbVie fell 8% on Thursday, which many analysts attributed to lower-than-expected sales of the arthritis and psoriasis drug Skyrizi, one of two drugs AbbVie sees as replacing Humira. Global sales of the product were $1.36 billion, about $75 million less than consensus forecasts.
“Skyrizi miss caught most of investors’ attention, which we think was well explained by management,” Piper Sandler analyst Christopher Raymond wrote in a client note, pointing to inventory destocking and pricing headwinds.
AbbVie expects Skyrizi and another inflammatory disease drug called Rinvoq will earn at least $17.5 billion combined by 2025, and more than $21 billion by 2027. By comparison, Humira sales totaled just over $21 billion in 2022.
Company CEO Rick Gonzalez, who has run AbbVie since 2013, said Thursday that he plans to stay in his role at least through this year to help manage that planned transition.
“I've had many, many discussions with the board about succession,” Gonzalez said in response to an analyst’s question. “The board knows I'm committed to be here to ensure a successful and smooth transition. The criteria that we're operating against are we need to completely get through the transition for Humira biosimilars here in the U.S.”