AbbVie's Not as Vulnerable as the Street Believes

NEW YORK (TheStreet) -- It has now been three full quarters since health care conglomerate Abbott labs  (ABT) separated its drug business into a new entity called AbbVie  (ABBV). Since that split, shares of AbbVie, which have outperformed Abbott, have soared more than 45%.

Now, although the spinoff, which was originally announced in late 2011, was a long-anticipated move, the Street seems surprised that AbbVie has performed so well on its own. Truth be told, I am surprised, too. And with AbbVie's valuation having surpassed large-cap rivals, like Pfizer  (PFE), AbbVie's pipeline, which includes blockbuster drug Humira, has suddenly come into question. Not only do I believe these fears are overblown, but I also think -- expensive or not -- investors can still do well in AbbVie stock.

First, I will grant that it's within the Street's right to compare AbbVie's third-quarter results to the company's July and April quarters. I will also admit that unlike its previous reports, AbbVie's revenue and margin growth weren't as compelling. What I did notice was that AbbVie is still delivering on key initiatives as promised by management upon the Abbott separation.

Revenue advanced 3.3% to $4.66 billion, which easily beat estimates of $4.52 billion. As has been the case for some time, rheumatoid arthritis drug Humira, which posted worldwide growth of close to 20%, did all of the heavy lifting. I won't debate the fact that AbbVie relies on Humira quite a bit, which has raised some concerns. That's also the case for many Big Pharma rivals that have produced flagship products.

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