AbbVie Loses Potential Acquisition Catalyst in Revolution Medicines Deal
"Let's go to Avy. Ay, >> let's go to Avy. We love Pharma M&A news, of course, though this one supposedly uh apparently may not be happening. So Ay shares, ticker ABBV. So those are down just 0.8% 810 of 1% after hours. So the latest news here is that apparently the company saying that it's not in talks to acquire cancer drug maker Revolution Medicines because earlier we did get a report from the Wall Street Journal saying that they could be in advanced talks uh to purchase Revolution. That would have been a deal worth $20 billion. And you know rallied right now. >> Exactly. Yeah. And so very interesting now that we're getting uh this response from AVY clarifying that they are not in talks at the moment. But yeah, the acquisition would have given him a foothold in the pancreatic cancer market that's expected to expand 10fold to more than $3 billion by 2035 accord according to Bloomberg Intelligence and Revolution has a drug uh that it is leading that sector."
The commentary highlights that AbbVie (ABBV) has clarified it is not in talks to acquire Revolution Medicines, defusing earlier acquisition rumors that had suggested a potential $20 billion deal. This lost opportunity removes a catalyst that could have provided AbbVie with a significant entry into an expanding pancreatic cancer market, which is expected to grow substantially by 2035.
AbbVie (ABBV) Quality Dividend Play
"stock number one, which is going to be AVY, stock ticker ABBV. And if you've been subscribed to my newsletter, the Stock Investors Edge, then you know this has been one of my longest held positions in my portfolio. After all, the company spun off from Abbott Labs back in 2013. And since that spin-off, all the stock has done is climb 550%, now making it one of the largest pharmaceutical companies within the S&P 500. Analysts right now rate the stock a moderate buy with an average price target of $252 per share, implying more than 10% upside from current levels to go along with that 3.1% dividend yield."
The speaker highlights AbbVie (ticker ABBV) as a long-term, high-quality dividend stock with stable cash flow and a history of growth, now trading at an attractive level with an analyst moderate buy rating and a 12‐month price target of 252.
Healthcare Opportunity in ABBV
"Beginning with stock number one, which is going to be AVY, stock ticker ABBV. And when it comes to AVY, it's one of my favorite positions in my portfolio, one of my longest held positions in my portfolio, and a top performing healthcare company. That was until recently. And we're getting a little bit of a sell-off that could have me sniffing opportunity. The company currently has a market cap of $374 billion, making it the largest company we're going to look at today. And over the past 12 months, shares are up 8%. Year-to-date though, up 21%. However, since the stock hit a record high of nearly $245 back at the beginning of October, shares of AVY have fell roughly 12%. If we got this stock price down closer to the $200 level, that would be a fantastic entry point. Analysts rate the stock a buy with an average 12-month price target of $244, implying nearly 15% upside and a dividend yield of nearly 3.5%."
The speaker highlights ABBV as a top healthcare pick currently undergoing a sell-off. He notes strong historical performance, significant revenue figures, and a tactical entry point if the price drops closer to $200, supported by a buy rating and a 12-month price target indicating 15% upside.
AbbVie Successfully Navigated the Humira Cliff but Faces Future Risks
"Abbvie has proven that it can successfully navigate a difficult patent cliff. Humira wasn't just Abbvie's top-selling drug for years. But Abbvie was able to significantly reduce its dependence on Humira, even before it lost US patent exclusivity in 2023 through some key acquisitions, the company developed two successors to Humira that will together generate more revenue this year than Humira did at its peak. The main reason I didn't give Abbvie an even higher score is just the intrinsic risk that's associated with developing new drugs, and there's potential negative impact of tariffs on pharmaceutical imports to the US if the Trump administration goes ahead with that."
The speaker emphasizes that AbbVie managed to overcome the major setback of losing Humira exclusivity by successfully diversifying its revenue stream through acquisitions. However, he expresses concerns over inherent risks in new drug development and possible negative impacts from tariffs, which temper his enthusiasm despite acknowledging the company's overall strength.