BofA Securities has updated its outlook on AbbVie (NYSE: NYSE:ABBV), increasing the price target to $195 from $185 while maintaining a Neutral rating on the stock.
The adjustment comes in anticipation of the data readout from AbbVie/Cerevel's emraclidine (M4 PAM) trials in Q4.
The analyst from BofA Securities discussed the heightened investor debate surrounding the potential results of the phase 2 trials EMPOWER-1 and -2.
This discussion is particularly relevant given the recent approval of BMY's KarXT and the data from Neurocrine (NASDAQ:NBIX)'s phase 2 NBI-568.
Investors are speculating on whether emraclidine's efficacy will be on par with KarXT, which has shown an 8-9 point placebo-adjusted PANSS and an effect size of 0.6-0.7.
Despite concerns about emraclidine potentially underperforming compared to KarXT, based on research and discussions with key opinion leaders (KOLs), BofA Securities maintains a positive outlook. The firm expects emraclidine to exhibit comparable efficacy to KarXT, despite the possibility of a slight decrease in efficacy in larger registrational trials.
In other recent news, AbbVie has received FDA approval for VYALEV™, a 24-hour continuous infusion therapy for adults with advanced Parkinson's disease. This breakthrough treatment is designed to manage motor fluctuations, a common challenge in Parkinson's disease.
The approval was based on a pivotal Phase 3 study and further supported by a 52-week open-label study. In financial updates, Truist Securities has increased AbbVie's stock price target to $215, maintaining a Buy rating, while Morgan Stanley maintained its Overweight rating with a stable price target of $218.00.
Despite a decrease in its projected 2024 aesthetics revenue to $5.5 billion and an adjustment in its 2024 profit outlook due to increased research and development costs, the company's revenue forecasts remain unchanged with estimates set at $55.6 billion for 2024, $59.5 billion for 2025, and $63.7 billion for 2026.
Additionally, AbbVie has submitted a Biologics License Application for the approval of Teliso-V, a potential new treatment for a subset of lung cancer patients.
InvestingPro Insights
As AbbVie (NYSE:ABBV) approaches its critical data readout, InvestingPro data provides additional context to the BofA Securities analysis. AbbVie's market capitalization stands at $333.08 billion, reflecting its significant presence in the biotechnology sector. The company's P/E ratio (adjusted) of 25.67 for the last twelve months suggests investors are willing to pay a premium for its earnings, possibly due to growth expectations in areas like emraclidine.
InvestingPro Tips highlight AbbVie's strong dividend profile, noting that the company "has raised its dividend for 12 consecutive years." This consistent dividend growth, coupled with a current dividend yield of 3.29%, may appeal to income-focused investors despite the upcoming trial results uncertainty.
Another relevant InvestingPro Tip indicates that "net income is expected to grow this year," aligning with the optimistic outlook on emraclidine's potential. However, it's worth noting that "10 analysts have revised their earnings downwards for the upcoming period," which could reflect caution about near-term performance.
For readers interested in a more comprehensive analysis, InvestingPro offers 9 additional tips for AbbVie, providing a deeper understanding of the company's financial health and market position.
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