|R&D chief John Leonard (Pharma)|
AbbVie takes over after the big split - Abbott Laboratories
2012: $4.32 billion
2011: $4.12 billion
Change: Up 4.7%
As a percentage of sales: 10.8%
R&D chief: John Leonard
This is the last time you'll see Abbott ($ABT) on this list. The company split its business last year, with the pharma side being cleaved off into the newly launched AbbVie ($ABBV), with one giant drug product under its wing and some ambitious plans to bring more specialty pharma products to the marketplace.
In the leadup to the split, AbbVie made big news with its hepatitis C contender, which is considered just a few steps behind Gilead's ($GILD) top hep C prospect. But there's more to AbbVie than hepatitis C. Among its 9 other drugs in Phase III, AbbVie is particularly bullish about daclizumab for multiple sclerosis and an intestinal gel--the levodopa/carbidopa combo Duodopa--for Parkinson's, as well as some promising follow-up indications for Humira, including pediatric Crohn's disease.
"AbbVie is a new type of company, a biopharmaceutical company, poised to discover and develop new medicines in some of the most complex areas of health care," Leonard told analysts late last year. Analysts, though, have been skittish about some of these programs, a number of which won't reach the make-or-break stage for another two years.
AbbVie has certainly been willing to make some big gambles. The company paid $450 million in cash for Facet Biotech, which delivered daclizumab. And it pledged the same amount in upfront and near-term cash to gain rights to the chronic kidney disease drug bardoxolone from Reata. But you don't hear as much about bardoxolone these days, at least not since patients in a closely watched study died, forcing investigators to shut down the Phase III study.
AbbVie can't afford many more such setbacks. Its pipeline is too thin with a ways to go in the clinic. In their first guidance, AbbVie execs recently said that the pipeline should start making a big contribution to the company in late 2015. That's just before Humira--a growing $9 billion franchise--begins to lose patent protection.
The wild card for AbbVie, though, is how long the company can count on those Humira billions. As one of the first big biologics to face biosimilar competition, it could prove to be a test case on just how effective legal teams will be when it comes to protecting these complex therapies. Every month it can successfully hold out is worth hundreds of millions of dollars.
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