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AbbVie’s stock surges 4.4% after securing 12 more years of exclusivity for Rinvoq, boosting sales projections and investor confidence.
AbbVie’s agreement prevents generic competition for Rinvoq in the U.S. until April 2037.
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AbbVie shares saw an uptick on the stock market increasing by 4.4%, following the company’s announcement of settling its litigation with generic drug manufactures, extending its patent protection for its autoimmune drug Rinvoq. The treatments extension offers 12 more years of market exclusivity. Sales of the drug have continued to climb, reaching $6 billion in sales over the past year, and is projected to hit a peak of over $12 billion.
"This is clearly a positive development, supporting longer-term protection of the Rinvoq franchise, which continues to exceed Street expectations, and upside to our current estimates, as we had previously assumed a 2033 loss of exclusivity," William Blair analyst Matt Phipps said in a report to clients.3
AbbVie stock has seen an 18% increase this year, trading at $220 per share and is seeing 50% year-over-year growth due to the success of Rinvoq. With the company’s stock not being volatile, along with its consistent growth, AbbVie stock has only seen five moves above 5% over the last year indicating that the patent extension marks a significant impact on the company and its value to investors. AbbVie’s stock has seen signification movement over the last year including an increase of 3.7%, following news of strong second quarter earnings, surpassing expectations and bolstering its full-year financial forecast. Rinvoq is currently seeking approvals in multiple indications in severe skin conditions including vitiligo, hidradenitis suppurativa, along with systemic lupus erythematosus.
"Management previously highlighted that the next wave of potential approvals in Rinvoq in these indications could add roughly $2 billion to peak-year sales for the product," Phipps said. "With the extension of four additional years of exclusivity, we assume this number will likely go higher."3
Rinvoq is a JAK inhibitor currently being studied in multiple immune-mediated inflammatory diseases.2 In human leukocyte cellular assays, Rinvoq inhibits cytokine-induced STAT phosphorylation mediated by JAK1 and JAK1/JAK3 more potently than JAK2/JAK2 mediated STAT phosphorylation.2As of now the relevance of inhibition of specific JAK enzymes to therapeutic effectiveness and safety is unknown. Earlier this year in April, AbbVie announced FDA’s approval for Rinvoq for giant cell arthritis (GCA) indications for adults, following the treatments successful results in a Phase III clinical trial.
"This FDA approval will now provide an alternative treatment option that can offer patients with GCA the possibility of tapering off steroids and achieving sustained remission," said Roopal Thakkar, M.D., executive vice president, research and development, chief scientific officer, AbbVie. "With this new indication for RINVOQ, we are underscoring AbbVie's commitment to exploring how we can identify and address unmet needs for patients with immune-mediated diseases."2
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