ABBV

EVERYTHING DIVIDENDS + 3 TOP IDEAS

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The Valuentum analyst team explains the difference between the adjusted Dividend Cushion ratio and its unadjusted counterpart. The success of the Dividend Growth Newsletter portfolio is covered, and Valuentum’s top 3 dividend growth ideas are unveiled. ~13 minutes. If you are unable to view the video below, please select the link here or view the transcript below. Kris Rosemann: Hello and welcome to the Valuentum Securities podcast. My name is Kris Rosemann and with me today is Chris Araos and Brian Nelson, the president of equity research and ETF analysis here at Valuentum, and today we’re going to be discussing the Dividend Cushion ratio, the Dividend Growth Newsletter portfolio, and some of our favorite dividend ideas on the market today. So … Read more

Big Pharma 1Q Earnings Roundup, Part II

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Image Source: Paw Paw Companies mentioned: ABBV, AGN, BMY, AMGN, MRK, PFE. AbbVie (ABBV) Riding Humira to the End AbbVie’s performance in the first quarter of 2016 was nothing short of impressive, as the firm grew revenue by more than 18% on an as reported basis from the year-ago period. Humira (arthritis), the company’s headlining drug, sales increased nearly 15% as reported. New drug Imbruvica (leukemia) showed solid momentum in the quarter, and AbbVie received two approvals for the expansion of the Imbruvica as a first line therapy for chronic lymphocytic leukemia. The treatment is expected to play a key role in the future of the company, especially after its patent on Humira expires in December of this year. The … Read more

Gilead: What’s Your Long Term Thesis?

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Shown: Pricing pressure continues to hurt Gilead’s gross margin; source: Gilead’s first-quarter 2016 presentation. We’re still sleeping better at night knowing that we avoided the first-quarter blowup at Gilead (GILD), “Gilead Disappoints, Harvoni Sales Drop 16% (April 2016).” Sales of Harvoni in the US dropped like a rock from the year-ago period, and as Gilead throws away its cash at buybacks to bolster accounting earnings per share, no longer does it hold the balance sheet it once did. Sure, something can be said about having ~$21 billion in cash, but it kind of loses its luster matched up with a similar amount of liabilities, as is the case with Gilead. Remember – it’s net cash that matters. To a large … Read more

April Deals May Flower Future Growth

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Image Source: Iqbal Osman By Kris Rosemann Thursday, April 28, was marked by a surge of M&A activity, as major corporations continue to search for growth as global economic concerns remain and the US economy shows signs of slowing. The world’s largest economy, which is accustomed to slow starts to the year, saw seasonally-adjusted GDP grow at a 0.5% rate in the first quarter of 2016, the slowest rate for the first quarter since 2014. Though a rebound in GDP growth in the second quarter has followed in nearly every year since the Great Recession, a variety of global pressures has caused US GDP growth to slow on a quarter-over-quarter basis since the second quarter of 2015 when it nearly … Read more

Treasury Erects Iron Tax Curtain

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Image Description/Source: Berlin Wall, 1963; Roger “If history is any guide, it would seem that tax lawmakers may want to think about the current political agenda’s similarities with respect to that of a “new” Berlin Wall–not one built of barbed wire but of prohibitive, restrictive tax laws–and whether such measures make sense in light of the events of the late 1980s.” – Valuentum Securities Late Monday April 4, the US Department of the Treasury launched an all-out attack on companies pursuing tax inversion deals and a technique called earnings stripping, the latter used as a means to minimize taxes after an inversion. Stating in no uncertain terms that such companies have only been successful due to the “benefits of being based … Read more

What Gilead’s Patent Miscue Means for Shareholders

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Source: Gilead Sciences Corporate Fact Sheet (pdf) By Brian Nelson, CFA There’s nothing quite like market instincts. They can’t be taught from reading textbooks, in the classroom, in a valuation model, or even with years and years of experience. It’s the intangibles that sometimes count the most. When we removed Gilead (GILD) from the portfolio of the Best Ideas Newsletter, “Alerts: High-grading! GILD–>JNJ… (Jan 2016),” we just knew something wasn’t right. Sure the introduction of Merck’s (MRK) once-daily single-tablet combination therapy, Zepatier, a significantly less expensive therapy to Gilead’s prized hepatitis C franchise was one major concern at the time, but the market is often not this inefficient when valuing equities. Almost counterintuitively, it became worrisome to us that for … Read more

Key Treatment Momentum Drives Big Pharma

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The momentum of key drugs and treatments is often a solid indicator for the coming performance of a pharmaceutical firm. Growing competition and other market pressures out of a company’s control can often cause material ebbs and flows in financial performance, making a strong and stable pipeline necessary to sustained success. As we walk through the results from some of the biggest names in the pharmaceuticals industry, let’s get a feel for the trajectory of each firm’s drug portfolio and pipeline moving into the rest of 2016. AbbVie (ABBV) AbbVie reported a quarter of strong growth January 29, as adjusted net revenues jumped more than 24% on an operational basis, and GAAP net revenue increase more than 17% from the … Read more

Early Read: Gilead Guides Revenue to Decline in 2016, Below Consensus

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Gilead’s (GILD) fourth-quarter report came and went, and it was just fine. Strong revenue and earnings growth and phenomenal free cash flow generation were all the rage in the quarterly press release. It even announced a new $12 billion share buyback program and upped its dividend 10% starting in the second quarter. We love the company that cured hepatitis C (“hep C”), but we no longer include it in the Best Ideas Newsletter portfolio. No quarterly report could ever cure our biggest concerns.   To put it straight, Gilead’s outlook for 2016 is nothing to write home about, and the probability of intense pricing competition in its blockbuster hep-C franchise taking its toll in 2017 and beyond is something even … Read more

Around the Horn in Biotech/Pharma: 3Q Earnings Review

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The biotech (IBB) and pharma (XLV) industries have been two of the strongest-performing segments of the market since the March 2009 panic bottom during the Financial Crisis, but the broader healthcare arena has been under siege as of late. New discoveries underscored by the development of a cure for hepatitis C with Gilead’s (GILD) Solvadi/Harvoni and a huge step forward in cystic fibrosis treatment with Vertex’s (VRTX) Orkambi have helped fuel the exuberance, but established pharma entities have also caught a bid as they successfully worked through the “patent cliff,” capturing the wave of dividend growth investors and acquiring budding new pipelines from smaller rivals along the way. The past few months haven’t been kind to biotech investors, however. What … Read more

If It Happened to AbbVie, Could It Also Happen to Gilead?

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The Valeant (VRX) and Citron saga is not all the drama happening in biotech these days. On October 22, federal health officials warned doctors and patients that two of AbbVie’s (ABBV) hepatitis C treatments can cause life-threatening liver injury in advanced stage patients. The Food and Drug Administration announced October 22 that it will require AbbVie to add new warnings to its Viekira Pak (1) and Technivie (2) drugs after deaths and liver transplants have been reported in patients who already had liver damage caused by the disease. During the second quarter, global sales of Viekira were $385 million, on pace for blockbuster status. Viekira is one of AbbVie’s top drugs, trailing only Humira in sales during the six months … Read more