AbbVie's (ABBV) Forecasts Lower Q2 EPS on R&D Costs

Business Insider

05-07-2025

AbbVie (ABBV) expects a $0.42 drop in second-quarter earnings per share (EPS), driven by a hefty $823 million pre-tax expense tied to acquired research and development (R&D) and milestone payments. The pharmaceutical giant is doubling down on external innovation to expand its drug pipeline.
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These expenses stem from deals like collaborations and licensing agreements, but AbbVie does not forecast them in advance due to their unpredictable timing.
As a result, AbbVie has revised its Q2 adjusted EPS guidance to $2.84–$2.88, down from earlier projections. Full-year guidance has also been trimmed to $11.67–$11.87, reflecting the impact of the one-time charge.
AbbVie Eyes Long-Term Growth
The expense reflects AbbVie's strategy to secure future growth amid looming patent expirations, especially for its key immunology drug, Humira. By investing in new drug candidates and technologies, the company aims to maintain its competitive edge in key therapeutic areas like oncology, neuroscience, and immunology.
While investors may be rattled by the earnings dip, the move signals a long-term play. AbbVie's pipeline includes over 90 programs in clinical development, with more than half in mid- or late-stage trials.
ABBV Makes $2.1B Bet on Capstan
The guidance cut follows the company's announcement of a $2.1 billion Capstan Therapeutics acquisition to boost its pipeline with next-gen cell therapy tech.
The deal includes Capstan's lead drug, CPTX2309, a Phase 1 in vivo CAR-T therapy aimed at treating autoimmune diseases by reprogramming immune cells inside the body using mRNA and lipid nanoparticles.
Overall, AbbVie's efforts to expand its drug pipeline are impressive and bode well for long-term growth.
Is ABBV a Buy, Hold, or Sell?
Turning to Wall Street, ABBV stock has a Moderate Buy consensus rating based on 11 Buys and six Holds assigned in the last three months. At $213, the average AbbVie price target implies a 12.53% upside potential. The stock has gained 5.1% over the past six months.