Much has been written about AbbVie (NYSE:ABBV) and its dependence on the revenues of its blockbuster, HUMIRA, but not much is ever written regarding its strong pipeline of clinical products. HUMIRA deserves all the attention as it makes up more than 60% of the company’s revenues every quarter but it also has a strong pipeline that investors should not forget about. One of those strong candidates is elagolix which recently showed in a Phase 2 trial that it helps reduce heavy menstrual bleeding and I would like to see what it means for the company.

The Phase 2b study which was assessing elagolix for heavy menstrual bleeding in women showed strong results in a 567 person trial. The trial assessed elagolix on a standalone basis or with add-back therapy involving estradiol/norethindrone acetate. The trial enrolled patients with uterine fibroids which is a noncancerous growth in the uterus, predominately in women of birthing age. The cause of the disease is not known but the main symptom is the heavy bleeding.

The reason this trial was important was because it met the primary endpoint of reducing the heavy menstruations when compared to a placebo. Menstrual blood loss is typically measured using an assay called the alkaline hematin method that quantifies the amount of blood lost and when the patients in this trial were measured between a six month period the results were great.

The patients which exhibited hot flushes, headaches, or insomnia were given the add-back therapy and this helped reduce those symptoms. In addition to reducing these symptoms, the individuals which were given the add-back therapy experienced no bone mineral density loss when compared to the individuals which just took elagolix alone.

Elagolix which was licensed from Neurocrine Biosciences (NASDAQ:NBIX) back in 2010 is now advanced to Phase 3 trials. It is taken orally and is important in the healthcare world because it is showing that it is better than the current standard of care right now. From a substitutes standpoint this product faces adversaries in the form of medications with less efficacy and complete removal of the fibroid by surgery. If I were a patient I definitely would want to try Elagolix over surgery any day if it was covered by my insurance. Roughly 170M women are afflicted with this situation in the world today which means AbbVie can help bolster its revenue stream with this efficacious product if it gets approved.

I actually initiated my position in AbbVie in early June of 2016 and have been pretty happy about the purchase thus far. I will only purchase shares of AbbVie if they get below $61, because I believe that is where it offers additional value. I’ve selected $61 because it is the middle of the stock’s 52-week range.

I swapped out of Seagate (NASDAQ:STX) in favor of AbbVie during the 2016 second-quarter portfolio change-out because I ended up turning a profit in the name (6.2%, or 21.3% annualized) and wanted to lock in those profits. So far I have lost some massive gains on the swap. For now, here is a chart to compare how AbbVie and Seagate have fared against each other and the S&P 500 since I swapped the names.

Source: Google Finance

At the end of the day, it only matters what a stock has done for one’s portfolio. For me, AbbVie is one of my mid-sized positions and has done well, as I’m up 9.3% on the name, while it occupies roughly 4% of my portfolio. I continue to believe in the name as a value stock. I own the stock for the value portion of my portfolio, and I will continue to hold onto the stock for now.

I am up 17.2% since the inception of my portfolio, while the S&P 500 is up 12.9%. For 2017 my portfolio is up 6.7% while the market is up 4.9%. Below is a quick glance of my portfolio and how each position therein is performing. Thanks for reading, and I look forward to your comments.

Company

Ticker

% change incl. DIV

% of Portfolio

Facebook, Inc.

(NASDAQ:FB)

18.2%

10.0%

AbbVie Inc.

9.3%

4.0%

Wyndham Worldwide Corporation

(NYSE:WYN)

7.1%

3.9%

PulteGroup, Inc.

(NYSE:PHM)

6.0%

3.9%

3M Company

(NYSE:MMM)

2.3%

3.7%

O’Reilly Automotive, Inc.

(NASDAQ:ORLY)

-1.0%

5.2%

SEI Investments Company

(NASDAQ:SEIC)

-1.4%

7.2%

General Electric Company

(NYSE:GE)

-3.0%

8.7%

Silver Wheaton Corp.

(NYSE:SLW)

-3.2%

10.3%

Valero Energy Corporation

(NYSE:VLO)

-5.4%

3.5%

Gilead Sciences Inc.

(NASDAQ:GILD)

-17.9%

18.6%

VFC MAY 19 2017 52.50 PUT

(NYSE:VFC)

-61.7%

0.2%

Cash

$

20.65%

Disclaimer: This article is in no way a recommendation to buy or sell any stock mentioned. This article is meant to serve as a journal for myself as to the rationale of why I bought/sold this stock when I look back on it in the future. These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

Disclosure: I am/we are long ABBV.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.



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