AbbVie Stock Hit a Record on ‘Big Win’ for Blockbuster Drug. The Case for Buying In.

AbbVie stock is up 24% so far this year. (Dreamstime)

Key Points

About This Summary

• AbbVie shares hit a record high after a deal extended Rinvoq’s patent exclusivity to 2037.
• Analysts are optimistic about AbbVie’s stock, citing Rinvoq’s strong performance and potential new uses.
• Rinvoq’s importance grows as economic macro uncertainty hurts AbbVie’s aesthetics business, which includes Botox.

Shares of AbbVie closed at a record after it struck a deal that will extend patent exclusivity for its blockbuster autoimmune medicine Rinvoq until 2037. Wall Street analyst say the stock might still have room to run.

The patent extension is a positive for AbbVie as it continues to deal with declining sales of its former cash cow Humira, which lost patent protection in 2023.

It’s a “big win for Rinvoq,” said William Blair analysts led by Matt Phipps. “This is clearly a positive development, supporting longer-term protection of the Rinvoq franchise, which continues to exceed Street expectations, and upside to our current estimates, as we had previously assumed a 2033 loss of exclusivity.”

AbbVie said it settled litigation with all generic manufacturers that filed so-called abbreviated new drug applications with the U.S. Food and Drug Administration to make generic versions of upadacitinib, sold under the brand name Rinvoq. The company said it doesn’t see any generics entering the U.S. market until April 2037.

“Given the strong growth outlook for the company’s ex-Humira portfolio, particularly for Skyrizi and Rinvoq, we expect shares to outperform,” Phipps said in a research note. He raised his target for the stock price to $238 from $231.

The stock edged down 0.8% to $ 218.39 in early trading Friday. The shares rose 4.1% Thursday to close at a record high of $220.22.

The move comes as the pharmaceutical sector grapples with uncertainty about potential tariffs, drug pricing, and shake-ups at regulatory bodies under the Department for Health and Human Services, led by Robert F. Kennedy Jr.

BMO analysts led by Evan Seigerman also see good things ahead for AbbVie, noting that Rinvoq sales have consistently beaten expectations.

Further drug-trial results could lift the stock in the coming year, he said. For example, the company is investigating the drug as a treatment for other conditions. Phase 3 trial data for Rinvoq in vitiligo is expected later this year, with approval in 2026 if the data is positive, while results for its use for the skin condition hidradenitis suppurativa and the autoimmune disease lupus could come in 2026, Seigerman said.

Additional uses for the drug could add billions to sales. Rinvoq’s potential has also become increasingly important as uncertainty about the economy is weighing on AbbVie’s so-called aesthetics franchise, which includes Botox.

Seigerman raised his price target on shares to $240 from $215, reiterating an Outperform rating on the stock. According to FactSet, 61% of analysts have a Buy rating or the equivalent on AbbVie shares.

“ABBV appears well-positioned to successfully manage through Humira’s U.S. [loss of exclusivity], with investors appropriately cautious & expectations reasonably low,” he wrote.

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