AbbVie Settles Rinvoq Patent Dispute: What It Means for the Stock

Shares of AbbVie ABBV rose over 4% to a record high on Thursday after the company announced that it had settled patent litigation with all generic manufacturers who had sought the FDA’s approval for generic versions of its blockbuster immunology drug, Rinvoq (upadacitinib). Post this settlement, ABBV does not expect generic competition for Rinvoq before April 2037. The deal effectively adds four years of exclusivity, as the company had previously stated that it expects the drug to go off patent in 2033.

This marks a major milestone for the stock, as Rinvoq is a key growth driver for AbbVie. Sales of the drug soared 48% year over year to nearly $3.75 billion in the first half of 2025, accounting for 13% of the company’s total revenues. This upside was driven by strong volume growth and continued market share gains across all approved indications, especially in the inflammatory bowel disease (IBD) space, which includes two conditions — ulcerative colitis (UC) and Crohn’s disease (CD). The drug is presently approved for a total of eight indications.

Beyond its current label, Rinvoq is also being evaluated in several new indications that could further expand its growth profile. AbbVie plans to file for approval in alopecia areata later this year, while phase III data in vitiligo are expected in 2025. Additional late-stage readouts in hidradenitis suppurativa and systemic lupus erythematosus are anticipated in 2026. Collectively, AbbVie believes that the next wave of these potential approvals could add roughly $2 billion to Rinvoq’s peak-year sales.

The stronger-than-expected sales of Rinvoq, together with AbbVie’s other blockbuster immunology drug Skyrizi, have not only mitigated the impact of Humira’s continued erosion but also reaffirmed their role as growth drivers for the company. AbbVie is gradually returning to growth in 2025, driven by the robust performance of both these drugs, despite it being only the second year following the U.S. Humira LOE. It expects combined sales of these two drugs to cross $25 billion in 2025, including over $8 billion from Rinvoq sales.

ABBV’s Peers in the Immunology Space

The targeted market is highly competitive. A key player in the immunology market is Johnson & Johnson JNJ, which markets two blockbuster drugs — Stelara and Tremfya. Both of these J&J medications are approved for multiple immunology indications, including UC and CD. Since Stelara lost U.S. patent exclusivity earlier this year, J&J has shifted focus to Tremfya to maintain its market position.

Another pharma giant expanding its presence in immunology is Eli Lilly LLY, following the FDA approval of Omvoh for the UC indication in late 2023. Omvoh marked Lilly’s first immunology drug approved for a type of IBD in the United States, playing a key role in expanding its portfolio in this therapeutic area. The Lilly drug received FDA approval for the CD indication in January.

ABBV’s Price Performance, Valuation and Estimates

Shares of AbbVie have outperformed the industry year to date, as seen in the chart below.

From a valuation standpoint, AbbVie is trading at a premium to the industry. Based on the price/earnings (P/E) ratio, the company’s shares currently trade at 16.14 times forward earnings, slightly higher than its industry’s average of 14.75. The stock is also trading above its five-year mean of 12.87.

EPS estimates for 2025 and 2026 have increased slightly in the past 30 days.

AbbVie currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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