He has an outperform rating and a $133 price target. The stock recently traded at $106.61, down 0.81%, and has dropped 12% since Aug. 31.
On Sept. 1, the Food and Drug Administration mandated new heart safety and cancer warnings for Rinvoq and other companies’ JAK inhibitor class of medicines.
“Physicians agreed Rinvoq is still likely to get approved for atopic dermatitis (AD), given its overall risk/benefit,” Nachman said. “Even with limited use, it could still be a solid opportunity.”
So, “Our sensitivity analysis to already conservative Rinvoq forecasts suggests the selloff has been overdone,” he said.
Looking at the company overall, “ABBV is well positioned to successfully manage through Humira's U.S. loss of exclusivity starting in January 2023, with investors appropriately cautious and expectations reasonably low,” Nachman said.
“ABBV is executing very well with its key growth drivers, including strong Skyrizi and Rinvoq trends. Its May 2020 Allergan acquisition has considerably decreased its concentration in Humira.”
Morningstar analyst Damien Conover wasn’t too concerned about the FDA news either. It puts “moderate pressure” on Rinvoq, which is estimated at 6% of AbbVie’s 2023 sales, he said. But it doesn’t affect his fair value estimate of $108 for the stock or his narrow moat rating.