3 Reasons to Buy AbbVie Stock Like There's No Tomorrow

AbbVie (NYSE: ABBV) has performed fairly well this year despite significant volatility. The company's shares are up 10%, slightly above the S&P 500's 8% return. Will the healthcare leader maintain this momentum? Some may worry that AbbVie faces significant near-term risks, given the continued sales decline of its former best-selling drug, Humira, which has been off patent for several years. No one expects Humira to post revenue growth, but depending on how quickly it loses market share to biosimilars and whether or not AbbVie's other growth drivers are making enough progress to fill that gaping hole, the company's shares may fall.

Further, AbbVie is facing pricing pressure for its cancer medicine, Imbruvica, due to government-led price negotiations in the U.S. These headwinds may harm the stock's performance. However, for investors focused on the long game, there are still great reasons to invest in AbbVie. Let's consider three of them.

1. AbbVie's main growth pillars

AbbVie didn't take long to resume revenue growth after losing patent exclusivity for Humira in 2023. It posted decent sales growth the following year, which is quite impressive given that Humira is the best-selling medicine in the pharmaceutical industry's history. Many drugmakers spend several years recording declining revenue after losing patent exclusivity for medicines that aren't nearly as successful as Humira was.

AbbVie was able to bounce back quickly thanks to a diversified lineup across many therapeutic areas, but the two most important medicines in the company's portfolio -- by some margin -- are Skyrizi and Rinvoq, two immunology drugs. Skyrizi and Rinvoq have earned indications across many of Humira's old ones. They have performed so well that they have even surprised management.

Consider, for instance, that AbbVie expects combined revenue from Skyrizi and Rinvoq to exceed $31 billion this year, even though the company originally expected $27 billion in sales in 2027. The good news is that Skyrizi and Rinvoq shouldn't start facing biosimilar competition until 2033 at the earliest. In the meantime, they should continue driving excellent top-line growth. So, AbbVie's medium-term outlook is bright.

2. AbbVie's deep pipeline

AbbVie is already planning for life after Skyrizi and Rinvoq. The company boasts a deep product pipeline, including candidates it has licensed from other companies or inherited through acquisitions. Several of AbbVie's candidates look particularly promising. Let's consider two of them. First, AbbVie is developing ABBV-295, an investigational weight loss therapy. In March, the company released data from a phase 1 study for this candidate. AbbVie reported that ABBV-295 led to weight loss of 7.86% to 9.73% after 13 weeks when administered every other week for the first 5 weeks, then monthly thereafter.

These are highly encouraging results over such a short period, and the fact that ABBV-295 could be administered monthly makes it even more promising, since current weight loss options are administered weekly. Analysts predict that the weight-loss market will exceed $100 billion by the next decade, making this a potentially highly lucrative area for AbbVie, provided it can make significant progress with ABBV-295. Elsewhere, AbbVie recently announced the acquisition of Apogee Therapeutics (NASDAQ: APGE) for $10.9 billion in cash. The key asset from this acquisition is zumilokibart.

This investigational therapy targets eczema and other immunology conditions. One of zumilokibart's main differentiators is its dosing schedule: It could be administered every three or six months after induction, whereas many of the leading medicines in this niche are administered monthly. zumilokibart could help AbbVie deepen its strong position in immunology and, eventually, help it move beyond Skyrizi and Rinvoq.

3. The dividend remains strong

One great reason to invest in AbbVie is its fantastic dividend program. When counting the time it spent as a division of its former parent company, Abbott Laboratories (NYSE: ABT), AbbVie is a Dividend King. Those are corporations that have increased their payouts for 50 or more consecutive years. AbbVie has been a great dividend stock since it split from Abbott in 2013. The company has hiked its dividends by an impressive 203.5% over the past decade. It also offers a forward yield of 2.7%, above the S&P 500's average of about 1.1%. AbbVie's dividend program makes the stock that much more attractive. The company could deliver excellent returns over the long run, especially with dividends reinvested.

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