AbbVie Piles on $8 Billion in Debt for Its Apogee Deal -- Should Dividend Investors Worry?

AbbVie (NYSE: ABBV) is aiming high with its $10.6 billion planned purchase of Apogee Therapeutics (NASDAQ: APGE). The deal, pending regulatory approvals, is expected to close in the third quarter.

The move is designed to supplement the pharmaceutical giant's already strong immunology portfolio. However, to fund the acquisition of the biotech company, AbbVie is taking on significant debt, which concerns some analysts. The payoff, AbbVie says, likely won't come for six years, with the deal not expected to boost adjusted earnings per share (EPS) until 2032.

Here are three reasons the deal makes sense, particularly for long-term investors:

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Apogee has a potential blockbuster in Zumilokibart

Apogee's most important drug is a monoclonal antibody that targets interleukin-13, a cytokine seen in type 2 inflammation. Zumilokibart is seen primarily as an atopic dermatitis (AD) treatment that could expand into being a therapy for asthma and eosinophilic esophagitis (EoE). AD is one of the largest and most underpenetrated immunology markets, with tens of millions of patients worldwide.

Current biologics, such as Dupixent, require injections every two or three weeks, which limits adherence and convenience. Zumilokibart's three– to six-month dosing interval could improve patient compliance and quality of life, potentially capturing a significant share of the AD market and easily making it worth billions in annual sales. Dupixent, for example, had 15.7 billion euros in sales in 2025, according to Sanofi, equivalent to about $18 billion.

The company has no plans to cut its dividend

AbbVie has an above-average dividend yield of about 2.8% at its current share price. The company has increased its quarterly dividend, counting its time as a subsidiary of Abbott Labs (NYSE: ABT), for 53 consecutive years.

That is part of what AbbVie is, and the company knows that many investors expect an above-average dividend. The company raised its dividend, effective this year, by 5.5% to $1.73 and has increased its dividend by more than 330% since its spinoff from Abbott Labs in 2013. The company has stated its aim to preserve its A2/A- credit rating and reach about 2 times net leverage within two to three years after closing the deal.

Short-term loss for long-term gain

AbbVie will take on $8 billion in debt to make the deal work. In the short term, that means the company will have to pay an additional $2.9 billion in interest. Chief Financial Officer Scott Reents, on the company's second-quarter earnings call, said the deal will have a $0.14 expected dilution on the company's annual adjusted earnings, dropping them to $13.87 to $14.07 from $13.91 to $14.11.

That's OK, because AbbVie's finances are ridiculously healthy. In the second quarter, it reported revenue of $16.9 billion, up 10.2%, and EPS of $2.03, an increase of 290% from the same period a year ago.

It's important to note that AbbVie has fared well through its acquisitions, including a $63 billion purchase of Allergan in 2020, which brought it a portfolio of aesthetic and neuroscience drugs, providing the financial runway to support the development of Skyrizi and Rinvoq. Those two immunology drugs have replaced the revenue lost by Humira, the former top-selling drug in the world, now that its patents have expired.

More recently, the company's $10.1 billion deal in 2024 to buy ImmunoGen brought it the drug Elahere, an antibody-drug conjugate to treat platinum-resistant ovarian cancer. In the second quarter, AbbVie reported $211 million in Elahere sales, an increase of 33%, year over year.

AbbVie is playing the long game, and so should you

The company has already proven it is capable of thinking ahead to preserve its future growth. The purchase of Apogee, though there's no guarantee, could pay off handsomely with a drug with a safe profile that could unseat Dupixent as the top atopic dermatitis therapy.

In the pharmaceutical world, there is no such thing as staying even. Either a company is increasing sales, or it isn't. AbbVie is focused on improving its chances of developing blockbuster therapies to increase sales. The stock's gain this year is only 7.5%, but during the past decade, it has delivered a total return of more than 450%, giving plenty of reason to be patient for its latest acquisition to pay off.

James Halley has positions in AbbVie. The Motley Fool has positions in and recommends AbbVie and Abbott Laboratories. The Motley Fool has a disclosure policy.