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Abbvie Stock Analysis – November 2018

Abbvie Stock Analysis – November 2018. Harsha Talakad Rajashekhara , Saraja Samant , Shalin Rajpara Presented November 13, 2018. About the company. Founded in 2013 as a spinoff of Abbot Labs and trading on NYSE with a market cap of $134.45 billion.

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Abbvie Stock Analysis – November 2018

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  1. Abbvie Stock Analysis – November 2018 HarshaTalakadRajashekhara, SarajaSamant, ShalinRajpara Presented November 13, 2018

  2. About the company • Founded in 2013 as a spinoff of Abbot Labs and trading on NYSE with a market cap of $134.45 billion 14 manufacturing facilities in 5 countries 5 Year revenue CAGR of 10% 8 research facilities in 3 countries 1101 products on the market 29000 employees

  3. Portfolio and Market Data

  4. Macroeconomic Drivers

  5. Corporate Lifecycle • Company Trends • Decreasing revenue growth from a major revenue stream (Humira) • Modifications to existing formulas to expand their utility • New acquisitions and research partnerships • Significant number of drugs in the pipeline • A growth trend in earnings and revenue Revenue • Conclusion • We believe that Abbvie is at the precipice of growth and maturity stage Launch Growth Maturity Decline Timeline

  6. SWOT Analysis Strengths Weaknesses • Global reach: Products sold in 200+ countries • Robust Pipeline: 20 new drug approvals expected by end of 2020 • High dependence on Humira, Imbruvica and Mavyret • Highly Levered growth strategy can prove risky in case of an economic downturn Opportunities Threats • Leukemia drug market expected to grow to $12B by 2022 • High barriers of entry • Aging population • Patents and Litigations are a general threat in the pharmaceutical industry • Biosimilars tend to eat into drug sales

  7. Porters Five Forces Threat of Competition Bargaining power of suppliers Threat of Substitutes Barriers to entry Bargaining power of buyers • Expiring patents • Biosimilar drugs • High • Biosimilar drugs • Generic drugs • Major revenue streams patent protected • High • Large number of products sourced from a single supplier • Moderate • High fixed cost • Long drug development process • Supply chain development • High • Buyers have a low bargaining power in the drug market • Low

  8. Strategic Acquisitions Pharmacyclics Inc. is a clinical-stage biopharmaceutical company focused on discovering and developing innovative small-molecule drugs for the treatment of cancer and immune mediated diseases. Date: 4th March, 2015 Deal Size: $21 billion ImmuVen develops drugs to treat infectious diseases, cancer, and autoimmune disorders. Date: 1st January, 2014 Deal Size: Unspecified Stemcentrx develops therapies that cure and significantly improve survival for cancer patients. It provides disease specific treatments that attack tumors at the roots. Date: 28th April, 2016 Deal Size: $5.8 billion

  9. Product Pipeline

  10. Management Discussion and Analysis

  11. Financial Statistics (Amounts in USD)

  12. Comparable Company Analysis – DuPont Model

  13. Comparable Company Analysis – Valuation

  14. Discounted Cash Flow Analysis

  15. Recommendation

  16. Thank You

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