AbbVie investors are running for the exits after comments on biosimilars from the FDA head, proposed rebate rule changes from the Trump administration and an ominous short-seller tweet. But they don’t need to be, industry watchers say.

Earlier this week, FDA Commissioner Scott Gottlieb, M.D., went after drugmakers for "trying to unfairly delay or derail the entry of biosimilar competitors"—and vowed to stop letting them get away with it. The Office of Management and Budget is also reviewing a proposed rule from the Department of Health and Human Services that could remove protections to drug-company rebates, impacting pricing.

And Thursday, those two events prompted Citron Research to label AbbVie "the next great drug short" in a tweet that helped send the Illinois drugmaker’s shares spiraling downward.

"Gottlieb's comments for biosimilars and the removal of safe harbor is a DIRECT hit on Abbvie's abuse of Humira," the tweet continued, with Citron predicting AbbVie’s share price would plummet to $60 in one year’s time.

The way Evercore ISI analyst Josh Schimmer sees it, though, things aren’t that black and white. Changing rebate rules "may not be very simple, and predicting response to any change is equally challenging." Plus, the current rules apply to Medicare, not to rebates offered to private payers, "which will create its own element of nuances and unpredictability."

And FDA initiatives meant to speed up biosimilar approval and adoption may not necessarily threaten AbbVie and its cash cow Humira either, Bloomberg’s Max Nisen contends. AbbVie has already signed deals with Humira copycats delaying their market entry until 2023, meaning a major sales slide is still more than four years away.

As for Citron’s prediction? While it’s been right in the past—Citron’s Andrew Left was the one to foreshadow the epic demise of Valeant, now Bausch Health—"their track record in biopharma is rather mixed," Schimmer pointed out. And as he figures, the AbbVie story is "all about new product cycles anyways."

"Given where valuations are in the large cap biotech group, strong adoption curves for new products may be enough to drive shares higher," he wrote.

-----------------------------------------------------------------------------------------------------------------------------------------------

Editor's Note:

To apply for becoming a contributor of en-CPhI.cn,

welcome to send your CV and sample works to us,

Email: Julia.Zhang@ubmsinoexpo.com.