AbbVie, which this month abandoned its planned $55 billion purchase of Dublin drugmaker Shire, reported impressive quarterly earnings on demand for its Humira arthritis drug and said it could deliver strong long-term growth without rushing into another big merger attempt.
"The underlying growth prospects of AbbVie don't require us to do a deal of that size," AbbVie Chief Executive Richard Gonzalez said in conference call, but added the company was keen on smaller acquisitions, particularly of treatments involving rare diseases, cancer and hepatology.
AbbVie shares rose 3.5 percent to $63.35 in morning trading. (Get the latest quote here.)
The Chicago drugmaker, which significantly boosted its full-year earnings forecast, said it had earned $506 million, or 31 cents per share, in the third quarter. That compared with $964 million, or 60 cents per share, a year earlier.
Excluding special items, including charges for the attempted Shire deal, AbbVie earned 89 cents per share. Analysts on average expected 77 cents, according to Thomson Reuters I/B/E/S.
Sales rose 7.8 percent to $5.02 billion, $200 million above forecasts.
"We see today's results as reinforcing our view that AbbVie shares remain well-positioned heading into 2015," said JPMorgan analyst Chris Schott. He said AbbVie could win U.S. marketing approval within weeks for a combination treatment for hepatitis C that may bolster earnings next year and beyond.
AbbVie, spun off early last year from Abbott Laboratories , is also testing treatments for cancer, Parkinson's Disease, endometriosis and other diseases.
The company had hoped to buy Shire and locate the combined company in Britain to take advantage of the nation's lower tax rate. But AbbVie walked away after tax law changes announced by the U.S. Treasury made the tax-inversion deal less attractive.
Sales of Humira, the world's top-selling drug, jumped almost 18 percent to $3.26 billion. They accounted for 65 percent of total sales, underscoring the company's need for other products to broaden its portfolio.
Gonzalez attributed Humira's sales growth to the wide range of approved uses of the drug, including for Crohn's disease and psoriasis, and because it is still being introduced in more countries 12 years after its U.S. launch.
Although Humira's U.S. patent lapses in late 2016, AbbVie has said it will take years for other drugmakers to develop and win approval for their own generic versions.
A few other AbbVie brands showed strong growth in the quarter, including thyroid hormone replacement drug Synthroid, whose sales rose 24 percent to $200 million.
But others declined, including cholesterol treatments and AndroGel testosterone gel, whose sales have been hurt by safety concerns for the drug class.
AbbVie raised its 2014 profit forecast to between $3.25 and $3.27 per share from its prior view of $3.06 to $3.16.