After you receive this email, we will be selling 100 shares of AbbVie (ABBV) at roughly $135.78. Following the trade, the Charitable Trust will own 1,000 shares of AbbVie. This trim will decrease ABBV’s weighting in the portfolio from about 3.53% to about 3.22%.
We are making another small trim Wednesday in a stock that has been on the 52-week high list day after day. This trade is part of our portfolio management plan to peel off shares from several stocks that have pushed to new highs in the market comeback so that we can replenish a cash position we actively deployed at lower prices.
AbbVie has been a very strong performer over the past month, gaining more than 16% since the start of December for several different reasons. Let’s break them down.
On a company level, one of the bearish debates around AbbVie this year centered on whether the FDA would crackdown on the JAK inhibitor class due to safety concerns, even though Rinvoq has shown to be safe and effective in all of its studies. Any strict labeling by the FDA would impact the Rinvoq franchise, which is one AbbVie’s most important growth medicines. Rinvoq is so important for AbbVie because it is expected to replace a large portion of the sales that the company will miss after Humira loses its patent protection in the United States in 2023.
Well, the bear thesis on AbbVie took a big step back earlier this month after the FDA approved Rinvoq for the treatment of adults with active psoriatic arthritis. The news signaled the FDA may be easing on Rinvoq and the JAK class at large, which if true, means AbbVie’s 2023 earnings per share floor is higher than what the bears anticipate.