TLDR
- AbbVie settled litigation with generic drug manufacturers, blocking cheaper Rinvoq versions until 2037
- Stock climbed nearly 5% Thursday morning following the settlement announcement
- Wells Fargo calls it a “big win” adding $11-24 per share value with extended patent runway
- Settlement provides about 5 additional years beyond previous 2032 expiry expectations
- Rinvoq treats inflammatory conditions like rheumatoid arthritis, eczema, and Crohn’s disease
AbbVie shares surged nearly 5% Thursday morning after the pharmaceutical company announced settlements with all generic manufacturers seeking to produce cheaper versions of its Rinvoq medication. The agreements secure patent protection until April 2037.
The settlement covers all companies that filed applications for generic versions of upadacitinib tablets, marketed as Rinvoq. No generic competitors can enter the U.S. market before April 2037, assuming the FDA grants pediatric exclusivity.
These licensing agreements include standard acceleration provisions. The patent protection could end six months earlier if the FDA does not grant market exclusivity for that period.
Rinvoq serves as an anti-inflammatory drug treating chronic conditions including rheumatoid arthritis, eczema, and Crohn’s disease. The medication works by reducing inflammation in the body, helping manage symptoms like pain, swelling, and stiffness.
Extended Market Protection Boosts Value
Wells Fargo analyst Mohit Bansal called the settlement a “big win” for AbbVie. He noted that consensus estimates previously modeled patent expiry in 2032.
Bansal estimates the extended protection could add between $11 to $24 per share in discounted cash flow value. The analyst maintains an Overweight rating with a $240 price target.
The settlement provides approximately five additional years of patent protection beyond analyst expectations. This extension creates what Wells Fargo describes as a “really long runway” for Rinvoq revenue.
Bansal suggested AbbVie’s other major drug, Skyrizi, could potentially secure similar settlement terms. This possibility would further strengthen the company’s long-term revenue outlook.
AbbVie represents a unique investment opportunity in the pharmaceutical sector due to its extended growth runway, according to the Wells Fargo analyst. The company’s immunology portfolio continues driving growth expectations.
Strong Financial Performance Continues
The patent settlement adds to AbbVie’s recent positive developments. In its second-quarter 2025 results released in late July, the company beat Wall Street estimates.
AbbVie registered revenue of $15.4 billion, surpassing expectations by over $400 million. Both Rinvoq and Skyrizi contributed substantially to this performance.
The company expects these anti-inflammatory drugs to generate over $25 billion in combined sales by year-end 2025. This projection reflects continued strong demand for AbbVie’s immunology treatments.
AbbVie reported earnings per share of $2.97, beating its guidance midpoint by $0.11. The company subsequently raised its full-year revenue projection to approximately $60.5 billion for 2025.
The Illinois-based pharmaceutical company has made recent moves to expand its pipeline. It expressed interest in acquiring private biotech firm Gilgamesh’s Bretisilocin program for up to $1.2 billion.
This program focuses on developing treatments for moderate-to-severe major depressive disorders. The acquisition would diversify AbbVie’s therapeutic portfolio beyond immunology.
Canada’s health regulator recently approved AbbVie’s cancer medicine Elahere this month. The drug targets adults with difficult-to-treat cancers like ovarian or fallopian tube cancer that have returned after other treatments.
Wall Street maintains a Moderate Buy consensus on AbbVie shares. The rating comes from 13 Buy recommendations and five Hold ratings among 18 analysts tracked by TipRanks.
The average price target stands at $220.47, indicating marginal downward risk of 0.40% from current levels. The settlement announcement provides AbbVie with extended revenue visibility through the mid-2030s for one of its key growth drivers.
