AbbVie Inc . (NYSE:ABBV), a global biopharmaceutical company, has updated its earnings outlook for the second quarter and full year of 2024, reflecting significant research and development expenses. The company's recent SEC filing on Wednesday reveals an expected pre-tax charge of $937 million due to acquired in-process research and development (IPR&D) and milestones expense. This charge is anticipated to affect both GAAP diluted earnings per share (EPS) and adjusted non-GAAP diluted EPS by $0.52.
The preliminary figures suggest that AbbVie's second quarter results, which have not yet been finalized, include these substantial expenses related to collaborations and licensing agreements. The exact figures are pending the company's financial statement closing procedures, and there remains a possibility of deviation from these early estimates.
AbbVie's updated full-year guidance for 2024, inclusive of the second quarter's acquired IPR&D and milestones expense, now stands at an adjusted diluted EPS range of $10.61 to $10.81. For the second quarter of 2024 alone, the adjusted diluted EPS is projected to be between $2.53 and $2.57.
The company had previously announced its adjusted diluted EPS guidance for 2024 on April 26, 2024, which at the time did not account for any acquired IPR&D and milestones expense beyond the first quarter. The updated forecast now incorporates these costs.
AbbVie emphasizes that while costs related to acquired IPR&D and milestones can arise from various transactions, they are not routinely forecasted due to the uncertainties surrounding their timing and occurrence. The detailed guidance, including the estimated expenses for the second quarter, is furnished in Exhibit 99.1 of the SEC filing.
In other recent news, AbbVie has made several significant business moves. The biopharmaceutical company recently acquired Celsius Therapeutics for $250 million, adding the investigational drug CEL383 to its immunology portfolio. This acquisition highlights AbbVie's commitment to expanding its treatment options for inflammatory diseases.
In addition to the acquisition, AbbVie has launched Allē Payment Plans, a program designed to make aesthetic treatments more financially accessible to patients. This move is in response to market research indicating that cost is a significant barrier for potential patients considering such treatments.
On the regulatory front, AbbVie received a Complete Response Letter from the FDA regarding its New Drug Application for ABBV-951, a treatment for Parkinson's disease. The letter raises concerns about a third-party manufacturing facility but does not question the safety or efficacy of the drug.
In terms of financial analysis, Piper Sandler has raised its price target for AbbVie from $185.00 to $190.00, maintaining an Overweight rating. Deutsche Bank has reiterated its Hold rating on AbbVie, while Cantor Fitzgerald has initiated coverage on the company with an Overweight rating and a 12-month price target of $200.
Lastly, AbbVie has entered into a partnership with FutureGen Biopharmaceutical to develop FG-M701, a novel TL1A antibody aimed at treating inflammatory bowel disease. Despite these developments, AbbVie is implicated in opioid crisis settlements exceeding $46 billion.
InvestingPro Insights
With AbbVie Inc. (NYSE:ABBV) navigating the complexities of research and development expenses, investors are keenly observing its financial health and market standing. According to real-time data from InvestingPro, AbbVie boasts a robust market capitalization of $289.9 billion, signaling investor confidence in its scale and stability within the biopharmaceutical sector. The company's commitment to shareholder returns is underscored by its track record of raising dividends for 11 consecutive years, which is complemented by a current dividend yield of 3.74%. Despite a slight decrease in revenue growth over the last twelve months, ending Q1 2023 at -4.12%, AbbVie's gross profit margin remains high at 69.17%, highlighting its ability to maintain profitability amidst challenging market conditions.
An InvestingPro Tip that stands out for AbbVie is the anticipation of net income growth this year, which aligns with the company's updated earnings outlook for 2024. Additionally, the company's valuation implies a strong free cash flow yield, suggesting that AbbVie may continue to generate ample cash to support its operations and strategic initiatives. For investors seeking a deeper dive into AbbVie's financial landscape and future prospects, InvestingPro offers 10 additional tips on the platform, which can be accessed with a special offer: use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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