Could AbbVie Crash Lilly's Weight‑Loss Party?

AbbVie's (NYSE: ABBV) most important therapeutic area has historically been immunology, where it has marketed billion-dollar drugs like Humira, which was once the world's best-selling medicine. The pharmaceutical giant remains a leader in this niche, but it also has a notable presence elsewhere and is now branching out into the fast-growing weight-loss market. Last month, AbbVie reported encouraging clinical trial results for a promising anti-obesity candidate. Could the company eventually pose a serious challenge to Eli Lilly (NYSE: LLY), the leader in this area?

Image source: Getty Images.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

Looking closer at AbbVie's clinical win

On March 9, AbbVie reported phase 1 data for ABBV-295, an investigational weight loss medicine. There are several things to note about this candidate. First, it is an amylin analog, that is, it mimics the action of the amylin hormone, which is responsible for satiety, controlling post-meal glucose spikes, and other functions. So, ABBV-295 isn't a GLP-1 medicine.

Second, AbbVie is developing this therapy as a potential long-acting option. It is investigating it in weekly, bi-weekly, and monthly dosing regimens. How did ABBV-295 perform in the early stage trial? The medicine led to a mean weight loss of 7.75% to 9.79% over 12 weeks in those taking it weekly, and an average weight loss between 7.86% and 9.73% over 13 weeks in those taking it biweekly or monthly. These are pretty strong results over such short periods.

The weight loss market and beyond

Is ABBV-295 the next big thing in the anti-obesity space? It's hard to say. It is still in the early stages of development, and although the data looks promising so far, it has a long way to go before even starting phase 3 studies. Meanwhile, many other drugmakers have promising phase 2 or phase 3 anti-obesity assets. The list includes Eli Lilly, Novo Nordisk, Roche, Regeneron, AstraZeneca, and others. The market will likely be far more crowded before AbbVie, even has the chance to launch ABBV-295. Unless it can demonstrate stronger efficacy than all of these -- and, for now, we have no reason to suspect it will -- it won't become one of the leaders.

That said, AbbVie doesn't need to topple Eli Lilly in this niche to deliver excellent returns. AbbVie's core therapeutic area will remain immunology, and in that department, it is doing fine. AbbVie's two key growth drivers right now, Skyrizi and Rinvoq, have earned indications across several autoimmune conditions. Their sales continue to grow at a good clip, as they have for years. AbbVie projects that, between them, they will generate more than $31 billion in revenue this year.

That is already well above Humira's peak sales and comes a year ahead of schedule, as AbbVie had predicted about $31 billion in revenue for Skyrizi and Rinvoq in 2027. Further, this duo should continue driving sales growth for AbbVie into the next decade, as neither will lose patent exclusivity anytime soon. Skyrizi and Rinvoq are the core of AbbVie's business right now, but attractive pipeline candidates like ABBV-295 could also contribute meaningfully to its financial results down the road.

And even if the weight management medicine fails in clinical trials, AbbVie has a deep pipeline of investigational products that should eventually allow it to rejuvenate its approved-drug portfolio. Some of the most promising candidates in AbbVie's pipeline include ABBV-383, an investigational cancer treatment currently in phase 3 studies. It belongs to the class of bispecific antibodies, a newer category of drugs that could set new standards of care across the oncology market.

AbbVie has many other exciting pipeline projects. Lastly, the company is a Dividend King, or a corporation with 50 or more consecutive years of payout increases. That's a great selling point, especially in today's volatile environment. So, AbbVie stock is attractive for long-term income seekers, and not because it is likely to dethrone Eli Lilly in the weight loss market -- it isn't. Rather, it is an innovative pharmaceutical leader that generates solid financial results, boasts a deep pipeline, and has a fantastic dividend program.

Prosper Junior Bakiny has positions in Eli Lilly and Novo Nordisk. The Motley Fool has positions in and recommends AbbVie, AstraZeneca Plc, and Regeneron Pharmaceuticals. The Motley Fool recommends Novo Nordisk and Roche Holding AG. The Motley Fool has a disclosure policy.