AbbVie: Weak Drug Study Data Triggers Fair Value Cut

AbbVie's negative top-line data from the DBL3001 study was surprising given the strong data from a small Phase I study in DLBCL. Despite strong data for this regimen in the non-GCB subgroup in an early-stage study, the low number of patients may have been a factor that skewed the early data positive and made replicating the results in the larger study more difficult. AbbVie has additional studies with Imbruvica ongoing in other forms of lymphoma, but we are skeptical the drug will work well in the follicular setting based on poor early stage data. We expect the majority of Imbruvica sales will focus in the chronic lymphocytic leukemia (CLL) market. However, the drug holds some potential to expand into the multiple myeloma market with data expected in 2019 from the IMMPACT study in the refractory setting.

By 2022, we now expect AbbVie to report Imbruvica sales of $4.8 billion, down from $5.4 billion due to the trial setback. While the negative study also hurts Johnson and Johnson (AbbVie's partner in commercializing the drug), the impact on the firm's valuation is more diluted due to Johnson and Johnson's more diversified operating structure.

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