AbbVie's Migraine Franchise Scored a Big Win. Is This Dividend King a No-Brainer Buy Right Now?

AbbVie (NYSE: ABBV), a pharmaceutical giant, is best known for its work in immunology. Over the decade between 2013 (when it became a stand-alone publicly traded company) and 2023, the drugmaker's biggest growth driver was Humira, a medicine for several autoimmune disorders that was once the world's best-selling drug. Humira lost U.S. patent exclusivity in 2023, but since then, Skyrizi and Rinvoq, two other immunology medicines, have become AbbVie's growth pillars.

However, the healthcare leader does have products in other areas that are performing well. One of them is Qulipta, a migraine treatment. And recently, Qulipta achieved a meaningful clinical win that could help boost its sales over the medium term. What does this mean for AbbVie's prospects? Let's find out.

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A milestone in sight

Qulipta was first approved in the U.S. in 2021 for the preventive treatment of migraine and later earned a label expansion to treat chronic migraine in adults. AbbVie recently announced top-line results from a Phase 3 clinical trial for the medicine in patients with menstrual migraine. During the study, Qulipta led to a meaningful reduction in migraine days compared with a placebo during the perimenstrual period. That was the primary endpoint. Qulipta also hit all secondary endpoints during the trial (including acute medication use and functional disability) while introducing no new safety signals.

The medicine seems likely to earn a label expansion in this indication, given these results. But how large an opportunity is it? As AbbVie notes, there are no medicines approved specifically for menstrual migraine. According to some estimates, around 12% of Americans experience migraines, and at least 60% of those who menstruate and experience migraines say that they happen around the time of their menstrual cycle. Assuming an even split among migraine patients between people who menstruate and people who don't, we could be looking at a total market opportunity of more than nine million adult patients for Qulipta in this indication in the U.S. Of course, there are some complications.

Even if Qulipta becomes the first medicine approved in this narrow niche, it won't achieve anything close to 100% penetration. Its eventual sales in this market will depend on factors such as health insurance coverage, physician adoption, and how many patients believe their menstrual migraines are severe enough to warrant pharmaceutical management. This subset might be far lower than the total number who experience menstrual migraine. Patients who want treatment might also choose alternatives; there may not be medicines approved specifically for menstrual migraines, but other treatments can help. Still, this clinical win should have a meaningful impact on Qulipta's performance.

Is the stock a buy?

But how much will Qulipta truly contribute from here on out? In the second quarter, the medicine posted $350 million in sales, up 31% year over year. Some analysts expect the therapy to eventually generate peak sales of over $2 billion. And for context, it generated $1 billion in revenue last year. But AbbVie's total revenue in the second quarter alone grew 10% year over year to $17 billion.

In other words, although Qulipta can contribute, AbbVie's most important growth opportunities lie elsewhere. The company's Skyrizi and Rinvoq should remain its biggest growth drivers for the foreseeable future. These immunology drugs have exceeded expectations. Management expects more than $31 billion in combined revenue for the two of them this year. It had initially predicted they would reach that milestone in 2027. That 2027 target itself had been raised by $4 billion from an earlier forecast.

AbbVie should also expand its immunology lineup. The company recently closed the $10.9 billion acquisition of Apogee Therapeutics, granting it access to zumilokibart, a promising late-stage immunology asset. Zumilokibart is being developed for eczema and several other indications. And according to some analysts, it could achieve peak sales of $5.2 billion in eczema alone. This drug might become one of the heirs to AbbVie's current growth pillars. And the company has a pipeline full of other promising candidates, even beyond its core therapeutic area.

Expect consistent financial results from AbbVie over the long run. Lastly, the drugmaker is an excellent dividend stock. AbbVie is a Dividend King: A company that has raised its payouts for at least 50 straight years. All these factors make AbbVie an excellent stock to buy and hold, especially for income-seeking investors.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool has a disclosure policy.