How Far Will AbbVie's Humira Revenue Fall in 2023?

 Investors don't have much to complain about when it comes to Humira. The world's best-selling drug has earned AbbVie  (ABBV)  well over $100 billion in total revenue since earning its first marketing approval two decades ago.

Of course, all good things must come to an end.

Wall Street analysts expect AbbVie's revenue to decline nearly 10% from 2022 to 2023. The primary driver of the change in fortunes is the loss of patent protections for Humira. The blockbuster will be exposed to competition from nearly 10 biosimilar competitors by the end of next year. Biosimilars aren't exact copies of an innovator biologic drug product, but they can be thought of as generic versions of biologic drugs.

Things may get worse before they get better. Humira's revenue will tumble even further in 2023 and could decline by more than two-thirds by the time the dust settles. What does that mean for AbbVie's long-term trajectory?

Biosimilars Cometh for Humira

Humira is used to treat autoimmune diseases ranging from rheumatoid arthritis to plaque psoriasis. AbbVie has been able to squeeze increasing amounts of revenue from the product by increasing selling prices.

In the first six months of 2022, Humira generated $10.1 billion in global revenue including $8.6 billion in the United States. The country lacks price regulations that are common in other parts of the globe, while the product became exposed to biosimilar competition in Europe years ago.

AbbVie generated 37% of full-year 2021 revenue from global sales of Humira. That increased to 39% in the first six months of 2022. Among drug developers with a market cap of at least $100 billion, only Merck  (MRK)  leans on a single product to generate more than 30% of total revenue. It wields the immuno-oncology blockbuster Keytruda, which will dethrone Humira as the world's top seller in 2023.

Investors won't feel the full onslaught of lower-priced biosimilar competition immediately. Amjevita from Amgen  (AMGN)  will launch in January 2023, but most others won't hit the market until the summer. That provides AbbVie with another six months of healthy revenue generation from its golden goose. A swift decline will follow.

Biosimilars from at least six other companies will plow into the market by mid-2023. Another three could follow soon after, bringing the total number of competitors to 10. No other biologic drug has more than five biosimilars approved. That could bring Humira's total annual U.S. revenue run rate to $10 billion by the end of next year and to $5 billion or less within a few years.

AbbVie has already coughed up the majority of its European market share to biosimilars. The copycats collectively snagged 59% market share on a prescription volume basis two years after launching. Uptake in the United States is expected to be much faster due to structural differences in the market and higher prices.

As a result, Wall Street analysts expect the business to generate roughly $59 billion in full-year 2022 revenue and "only" $55.3 billion in full-year 2023 revenue.

A Possible Silver Lining

It's not as if AbbVie didn't have time to prepare a contingency plan. The pharma titan completed a gargantuan $63 billion merger with Allergan in spring 2020, which provided a blockbuster aesthetics and eye disease portfolio. That included the best-known product in the industry, Botox. Meanwhile, the company's internal pipeline has delivered multiple blockbusters of its own including Skyrizi and Rinvoq.

Organic and acquired growth will help to significantly blunt the impact of Humira's swiftly changing competitive landscape. There will still be some pain ahead considering the product generates nearly 40% of AbbVie's revenue, but it could've been a lot worse. At least it was a good run.

https://www.thestreet.com/investing/how-far-will-abbvies-humira-revenue-fall-in-2023