Pharma perks — and more

AbbVie (NYSE: ABBV) is one of the least expensive big pharmaceutical stocks on the market, with promising growth prospects. It has grown rapidly in recent years thanks largely to Humira, its key immunosuppressive drug — which is facing the expiration of its patent protection beginning in 2023. Not surprisingly, emerging competition from biosimilar products has made investors jittery, but AbbVie is prepping for a life beyond Humira. To start, its Rinvoq and Skyrizi drugs are in late-stage regulatory review and on track for faster launches than previously planned. AbbVie projects the two drugs could bring in revenue of more than $15 billion by 2025. The company has several other growth drivers as well, including blood cancer drugs Imbruvica and Venclexta, plus antipsychotic drug Vraylar. AbbVie’s recent acquisition of Allergan, which added Botox and neurological drugs to its portfolio, should also drive growth. Allergan generated $16.1 billion in revenue in 2019. For the full year 2020, AbbVie projects Allergan to add 12 percent to its adjusted earnings per share. Meanwhile, management is targeting a reduction in debt of between $15 billion and $18 billion by the end of 2021. That should help AbbVie keep increasing dividends, which recently yielded 4.7 percent. With improving growth prospects, a fat dividend and a bargain valuation, AbbVie deserves consideration.