AbbVie Raises Outlook on Strong Performance Amid Shire Offer

Jun 23, 2014 4:10 pm ET

(Updates with closing shares in fourth paragraph.)

June 23 (Bloomberg) -- AbbVie Inc., the U.S. drugmaker bidding to buy Shire Plc, raised its outlook for 2014 on prospects for its experimental cancer and multiple sclerosis drugs.

AbbVie now expects earnings-per-share from $3.06 to $3.16 on an adjusted basis, the North Chicago-based company said today in a statement. AbbVie cited positive data from its experimental pipeline in making the announcement, including two oncology programs and final-stage tests of an MS treatment.

The forecast continues to exclude potential revenue from AbbVie’s hepatitis C treatment, which has been given accelerated approval by U.S. regulators.

AbbVie rose less than 1 percent to $53.75 at the close in New York. Shire fell 1.6 percent to 43.03 pounds in London.

AbbVie’s latest $46.5 billion offer for Dublin-based Shire was rejected on June 20. A takeover would enable AbbVie to access Shire’s growing stable of treatments for rare diseases, and allow it to redomicile in a country with a lower tax rate. After the bid was rejected, two people with knowledge of the matter said AbbVie is considering raising its offer again.

“Its significance for their Shire bid is that AbbVie is approaching this deal from a position of strength,” said Alex Arfaei, an analyst with BMO Capital Markets Corp., in an e-mail. He said he wasn’t surprised by the raised forecast and already had estimated that AbbVie’s 2014 earnings would exceed the company’s initial guidance of $3.00 to $3.10 per share.

His forecast is at $3.15, compared with $3.13, the average of 13 analysts’ estimates compiled by Bloomberg.

“Shire would be nice to have for AbbVie but not need to have,” he said.