Although AbbVie’s (ABBV) stock has declined so far this year, the company’s financial performance remains strong. Its first-quarter earnings released on April 29 showed that both revenue and profit exceeded expectations. One of the key growth drivers behind this outperformance is the immunology drug Skyrizi. The drug has been approved for multiple indications, including plaque psoriasis—a condition that causes thick, scaly patches on the skin.
Skyrizi is one of the leaders in this field, but will it lose significant market share due to intensifying competition? Johnson & Johnson (JNJ) certainly hopes so, as the company recently launched a direct competitor to Skyrizi. However, even in the face of this challenge, AbbVie’s medium-term outlook remains strong, and Skyrizi is expected to continue its growth trajectory.
On March 18, Johnson & Johnson announced that the U.S. Food and Drug Administration (FDA) had approved Icotyde, a once-daily oral treatment for plaque psoriasis. Compared to Skyrizi and J&J’s own Tremfya, the new therapy offers the advantage of convenience—both of the latter are typically administered via subcutaneous injection for maintenance therapy, and many patients naturally prefer oral medications. However, when prescribing drugs, physicians consider not only the route of administration but also factors such as efficacy.
This is precisely where Skyrizi holds a clear advantage. The Psoriasis Area and Severity Index (PASI) is used to assess disease severity, with a maximum score of 72—the higher the score, the more severe the condition. In clinical trials for plaque psoriasis treatments, achieving a 90% reduction in PASI score from baseline (PASI 90) is an important measure of efficacy. Although no head-to-head clinical trials exist, data show that approximately 50% of patients treated with Icotyde achieved PASI 90 by week 16, whereas in Skyrizi’s Phase 3 studies, that figure was around 70%. In other words, Skyrizi is significantly more effective and should maintain its lead even against competition from J&J’s Icotyde.
Moreover, Skyrizi has several other indications, including ulcerative colitis and Crohn’s disease. Although plaque psoriasis was its first and likely its largest growth driver, multiple indication expansions have solidified Skyrizi’s strong position.
Skyrizi is one of two growth pillars supporting AbbVie’s financial performance, the other being Rinvoq, an immunosuppressant also approved for multiple indications. Both drugs continue to exceed expectations. AbbVie originally forecast combined sales of $27 billion for the two drugs by 2027, then raised that projection to $31 billion. Now, the company expects combined sales of Skyrizi and Rinvoq to surpass that figure this year alone.
This growth trajectory is remarkable. In addition, AbbVie has other growth drivers such as the migraine drug Qulipta. Its deep pipeline will help support future patent expirations for Skyrizi and Rinvoq—just as the company successfully navigated the patent cliff for Humira, the best-selling drug in history. Notably, AbbVie is also trying to enter the weight-loss drug market, with an early-stage candidate recently posting encouraging results.
The company also offers an attractive forward dividend yield of 3.2% and has raised its dividend for 54 consecutive years, earning recognition as a Dividend King.
Summary: Johnson & Johnson has launched Icotyde, a new oral psoriasis drug, in an attempt to challenge AbbVie’s core growth driver, Skyrizi. Although the oral formulation offers a convenience advantage, clinical data show that Skyrizi is more effective and is supported by multiple indications. Investors need not overreact to heightened competition.
