AbbVie due diligence report.

Oto Suvari
Aug 13 · 3 min read

Hatchworks has conducted due diligence on AbbVie, the pharmaceutical company.

Their current market capitalization is $96.59B and they have raised a total amount of $7.28B. It is currently listed on the NYSE under the symbol ‘’ABBV’’. AbbVie is a defensive stock as there will always be people in need of healthcare. Hatchworks is increasing exposure in defensives, because they are less risky than regular stocks and during economic weakness owing to a higher degree of revenue and yield protection. Every 11–12 years there is an economic recession. The last recession happened in 2009 so the firm believes we are due for another one.

Looking at their projected net-income growth for 2020E and 2021E, it shows a solid clip of 7%. Their estimated revenue for 2020E is $34.77B, thereby the EV/Revenue multiple for 2020E is 3.65x. Also, they expect to have a net income of $11.72B for 2021E which generates a P/E multiple of 7.07x. The operating margin for AbbVie is 47% where competitors such as JNJ, MRK and PFE are significantly lower than that. In this context, Hatchworks is an investor.

The Hatchscore is 5.6 out of 10. Full details can be found on Hatchnet: www.hatch-net.com/companies


What is AbbVie?

AbbVie is a biopharmaceutical company that specialises in therapeutic drug research and development like the medication HUMIRA. Its products are intended for treating rheumatoid arthritis, psoriasis, Crohn’s disease, thyroid disease, Parkinson disease, HIV, low testosterone levels and complications associated with chronic renal disease. It sells products in the U.S., Japan, Germany, Canada, Italy, Spain, the Netherlands, the U.K., Brazil, and internationally.


Big investors:

- Capital Research Global Investors
- Vanguard Group, inc. (The)
- Blackrock Inc.
- State Street Corporation

Advisors and Bookrunners:

- PJT Partners
- Alibaba JP Morgan, Morgan Stanley
- Goldman Sachs Group inc.

What are the risks?

- AbbVie depends on a single drug, Humira for more than 60% of its total revenues. This puts the company at risk if any problems arise for the drug.
- Humira has been facing a lot of competition in the health industry.
- If Humira loses market share to competitors, AbbVie may see a significant drop in earnings and thus market value.

Competitors:

· Johnson & Johnson (JNJ)
· Merck (MRK)
· Enbrel by Pfizer (PFE)

Management team:

- Richard A. Gonzalez: CEO
- Michael E. Severino: VP
- Robert A. Michael: CFO

The Hatchworks Team


Legal Disclaimer — This report summary has been generated as a result of Hatchworks’ proprietary company vetting and filtering system. The level of due diligence conducted on investible assets conducted ranges from mediocre to significant, the latter being the case where Hatchworks has explicitly taken strategic positions in. By no means is the information in this file to be relied on as investment advice; this includes Hatchworks’ algorithmic composite score known as ’Hatchscore’. You will note that this report does not include a ‘buy’, ‘sell’ or ‘hold’ recommendation. Hatchworks has not received any compensation for this research. For more information you can reach us at info@hatchworksvc.com. This report is not for distribution in the United States of America. It is closed to U.S citizens. If you are a U.S. citizen, you should delete this report or return to sender.

Oto Suvari

Written by

Research & Development at Hatchworks & Neuchatel Ltd. Heading up the group’s R&D activities for Hatchworks, SPECTRE (www.spectre.ai) and linked projects.

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