AbbVie, Inc. (NYSE: ABBV)
Shares of AbbVie plummeted as much as 15.6% Thursday after the FDA issued a warning that the company’s hepatitis C drugs Viekira Pak and Technivie could cause sever liver injury in patients with advanced liver disease.
ABBV Hep-C Outlook
Jefferies analyst Brian Abrahams wrote in an investment note that the warning is a “moderate positive” for Gilead Sciences. But he added that AbbVie’s Viekira Pak was already expected to be “displaced” by a similar drug from Merck & Co. Inc. next year. Bernstein analyst, Tim Anderson, noted that’s AbbVie’s drug requires patients to take four to six pills per day. That compares negatively with the once-per-day regimen for Gilead’s Harvoni and Merck’s upcoming pill, which is slated for approval in early 2016. “In the ultra-competitive hep C market, this is likely a damaging event,” Anderson wrote in an investment note. Yahoo Finance
Meanwhile, Adam Feuerstein of thestreet.com noted that Viekira Pak amounts to only 7% of AbbVie’s revenue and that shareholders overreacted to the warning. He also pointed out that Viekira Pak and Technivie are not recommended nor approved for hepatitis C patients with underlying severe liver disease such as cirrhosis. Doctors shouldn’t be prescribing the drugs to these advanced liver disease patients, yet some apparently were, resulting in the liver injuries that were reported to the FDA. Thestreet.com
After the market closed on Thursday, AbbVie issued a press release announcing appropriate changes to labes for Viekira Pak and Technivie. The news had muted effect on after-hours trading. PR Newswire
ABBV Technical Analysis
ABBV stock reacted fast and hard to the FDA warning hitting a two year low of $45.45 before closing down $10.3% at $48.27. The stock has traded in a downward channel since Biotech (IBB) turned weak in August and has also shown relative weakness to IBB over the past month. ABBV broke below the down channel today but managed to recover some and close near the bottom of the channel. It has also closed below VWAP and the 9, 20 and 50 moving averages on the daily for three days in a row. The stock may have found a bottom today but I will not touch it unless and until it gets back into the channel and above VWAP. If it does that with solid price action and volume, it could be a long to the top of the channel. It will take a bullish market and biotech sector to move it further and Q3 earnings report on October 30 should provide a catalyst.
ABBV Company Profile
AbbVie Inc. (AbbVie) is a global, research-based biopharmaceutical company. The Company develops and markets therapies that address a range of diseases. The Company’s products are focused on treating conditions, such as chronic autoimmune diseases, including rheumatoid arthritis, psoriasis and Crohn’s disease; hepatitis C (HCV); human immunodeficiency virus (HIV); endometriosis; thyroid disease; Parkinson’s disease; complications associated with chronic kidney disease and cystic fibrosis, and other health conditions, such as low testosterone. AbbVie also has a pipeline of new medicines, including over 30 compounds or indications in Phase II or Phase III development across a range of medical specialties, such as immunology, virology/liver disease, oncology, renal disease, neurological diseases and women’s health. The Company’s product portfolio includes HUMIRA, HCV products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products. Google Finance