Specialization and expansion
AbbVie was originally just a part of Abbott Laboratories, a company based in Abbott Park, Illinois. The company had two major segments: pharmaceuticals and medical devices. In 2012, the company decided to spin-off its innovative pharmaceutical business out of which AbbVie Inc. was established. The generic drugs business, however, remained with Abbott Laboratories. AbbVie’s new headquarter is located in neighboring Lake Bluff, Illinois. During 2020, AbbVie completed its largest M&A deal so far by acquiring Ireland-based Allergan for 63 billion U.S. dollars. This is one of the biggest M&A deals of the biopharmaceutical history ever.How to delay the patent expiration of a blockbuster?
Among AbbVie’s various products, Humira (adalimumab) has an outstanding position. Humira is used for the treatment of a wide variety of inflammatory conditions, such as rheumatoid arthritis and Crohn’s disease. Over the last four years, the product generated annual revenues of about 20 billion U.S. dollars. Before the appearance of Pfizer’s COVID-19 vaccine Comirnaty, Humira was the global top drug based on revenue. In some years, the blockbuster made up around two thirds of the company’s total revenues. Given the threat through patent expiration and generic/biosimilar competition, such a dependence on one product could potentially have negative effects for a pharmaceutical company. Biosimilars of Humira have already been available in several countries since 2014. In AbbVie’s major market, the U.S., Humira started facing biosimilar competition only from 2023, but already combined with heavy revenue losses. AbbVie was quite ‘famous’, and often criticized, due to its aggressive patent strategy and pricing policy for Humira in the United States: dozens of patents were filed for the drug, but for various medical conditions, while between 2016 and 2021 alone Humira's net price increased by 60 percent.
