Jefferies Strongly Reiterates Top Pick Call On AbbVie

Consensus seems to be underappreciating “several key pipeline opportunities” for AbbVie Inc ABBV, including Rova-T in small cell lung cancer, Jefferies’ Jeffrey Holford said in a report.

While maintaining a Buy rating and a price target of $90 on the company, the analyst commented, “We strongly reiterate ABBV as our Top Pick.”

Holford wrote that his revenue and EPS estimates were 14 percent and 25 percent ahead of consensus “as we believe that consensus introduces US Humira biosimilars too early in 2019,” while Rova-T had greater potential than was being widely anticipated.

Rova-T Estimates

Pivotal 3L data for Rova-T is scheduled for the second half of 2017. Holford raised his peak sales estimate to $4.3 billion. The risk-adjusted revenue estimate for 2020 and 2025 are at $1.6 billion and $2.8 billion, versus consensus forecasts of $628 million and $1.8 billion, respectively.

Citing the lack of effective treatments for SCLC, the analyst wrote, “Most commentators have likely not appreciated the unique revenue build characteristics for Rova-T, which is based on a 6-week course of therapy, and is not as dependent upon duration of response as IO-based therapies to generate revenue. Our analysis also shows that the majority of patients will likely receive Rova-T, regardless of what competing IO data show.”

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