When it comes to biotechnology market investing, sometimes it’s best just to de-risk your portfolio by sticking with well-known firms like AbbVie (NYSE:ABBV). There’s no perfectly safe investment, but among pharmaceutical plays, AbbVie stock involves less risk than many others in the sector.
For one thing, it’s a well-known and highly respected company. Plus, there’s no shortage of trading volume when it comes to ABBV stock. With 10 million shares of the stock traded on a typical day, you shouldn’t have any problems getting in and out of your position.
Perhaps most importantly, AbbVie has a pipeline of medical solutions that should keep the revenues flowing in. And after an acquisition that could transform the pharmaceutical industry as we know it, the upward trajectory of ABBV stock may just be unstoppable.
AbbVie Stock at a Glance
An argument could be made, based on the price action alone, that ABBV is a great novel coronavirus stock. The rebound from the March low of $62.55 has been smooth and practically uninterrupted. That’s the kind of price movement that inspires confidence and can help take ABBV far beyond $100.
The next objective for the bulls could be to take out the previous high mark from 2018. In particular, they’ll want to keep their eye on $125 as that will have psychological significance. Breaking above that number with heavy volume will deal a major blow to the bears and short sellers.
That, however, is a longer-term goal for current and prospective ABBV stockholders. For the time being, it’s perfectly fine to buy shares at the current price point or wait for small dips to build your position. Just be sure to have an exit plan in place in case things don’t go as planned, which is always a possibility in the markets.
The Buyout That Changed Everything
For any serious aficionado of the biotechnology sector, there are a handful of mergers and acquisitions every year that are considered game changers. They have the potential to transform not only the companies involved, but the industry as a whole.
AbbVie’s acquisition of Allergan would most certainly qualify as one of these transformative acquisitions. After regulators approved the buyout, the acquisition was finalized and AbbVie became a substantially bigger company.
Does bigger necessarily mean better? Not always, but in this instance the addition to AbbVie’s already considerable pipeline has been warmly welcomed by virtually all stakeholders. Allergan was famous among biotech investors, and rightly so as the company’s flagship product, Botox, consistently drove strong revenues.
Besides, Allergan brings more to the table than Botox. As AbbVie elaborated upon finalizing the acquisition: “Allergan provides new growth opportunities in Neuroscience, with Botox® Therapeutics, Vraylar® and Ubrelvy™ and a global aesthetics business, with leading brands including Botox® and Juvederm®.”
A New Use for an Old Treatment
That’s a significant enhancement of AbbVie’s pipeline, which was already robust on its own. Yet the news only gets better from here as America’s most important pharmaceutical regulator just gave the nod of approval to use a well-known treatment in a new way.
You might think of Botox as just a way to treat wrinkles in the face. However, the U.S. Food and Drug Administration recently determined that there’s more to Botox than cosmetic procedures.
Specifically, the FDA approved AbbVie’s supplemental biologics license application allowing Botox to be prescribed for specified instances of the “signs and symptoms of detrusor (bladder muscle) overactivity associated with an underlying neurologic condition” in patients aged five through 17.
This regulatory approval should do much more for AbbVie than provide a new revenue stream for Botox. Just as significantly, it could enhance Botox’s profile as more than a cosmetic treatment. Now, Botox could gain a reputation as a treatment with real importance and substance in the medical community. That’s great for AbbVie’s reputation as well.
The Final Word on AbbVie Stock
Any bears and short-sellers could have a tough time fighting the progress of a bigger and better AbbVie. Thus, traders should prepare for higher prices in ABBV stock. The bulls won’t have much difficulty, if any, in knocking through the $125 level.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.