1. Jiaxin Yang Sang Hyuk Yoon November 3, 2016
NYSE: ABBV
Jiaxin Yang
Sang Hyuk Yoon
November 3, 2016

2. Abbvie Overview Company Overview Revenue Breakdown Management Timeline
Founded
Founded in 2012
Location
Headquartered in Illinois
Sector
Healthcare
Industry
Drug Manufacturers - Major
Products
HUMIRA, IMBRUVICA, HCV, Additional Virology, Metabolic/Hormones, Endocrinology, Ohters
Customers
Managed care provider, Hospitals, Governments
Management
Timeline
Richard A. Gonzalez
Chief Executive Officer
William J. Chase
Chief Financial Officer
Azita Saleki-Gerhardt
Senior Vice President of Operations
Michael E. Severiono
Chief Scientific Officer
Timohty J. Richmond
Senior Vice President of Human Recources
October 2011
Abbott announced the plan of spin-off of AbbVie
January 2013
AbbVie got listed on the NYSE
May 2015
AbbVie completed the acquisition of Pharmacyclics
June 2016
AbbVie closed the acquisition of Stemcentrx
December 2016
HUMIRA’s patent expected to expire in US
Data from Form 10-K and Capital IQ

3. Innovative-driven, patient-focused specialty biopharmaceutical company
Management
Innovative-driven, patient-focused specialty biopharmaceutical company 1 2 3 4
Growing Revenue through continued strong performance from its existing portfolio of on-market products as well as growth from pipeline products
Continued investment in its pipeline in support of opportunities in immunology, oncology, and virology, as well as continued investment in key on-market products
Expanding gross and operating margins
Augmentation of its pipeline through concerted focus on strategic licensing, acquisition and partnering activity with a focus on identifying compelling programs that fit’ AbbVie’s strategic criteria 5
Returning cash to shareholders via dividends and share repurchases
Data from Form 10-K

4. Key Products - Treat autoimmune diseases
HUMIRA
- Treat autoimmune diseases
- Approved in U.S. , E.U. and other over 60 markets including Japan, China, Brazil and Australia
- Expiration of the patent in U.S. in December 2016 and in E.U. in April 2018
VIEKIRA PAK
- Treat Hepatitis C (HCV); HCV affects 160 million worldwide
- Granted EU marketing authorization in January 2015
- Key driver of Abbvie’s future performance
IMBRUVICA
- A novel, orally active, selective covalent inhibitor of Bruton’s Tyrosine Kinase (BTK)
- Acquired through the acquisition of Pharmacyclics, Inc. (Pharmacyclics) in May 2015
- Hematological oncology market $27 billion in 2014, growing to $50 billion by 2020
DUODOPA
- AbbVie’s levodopa-carbidopa intestinal gel for the treatment of advanced Parkinson’s disease
- US Parkinson’s disease population of 1 million of which 190 thousands may be eligible for therapy
- One of key focus for the business in the future
Data from Form 10-K

5. Macroeconomics
Data from World Bank.
Data from World Bank.

6. Macroeconomics
Data from World Bank.
Data from PwC.

7. . - Porter’s Five Forces Threat of New Entrants Substitutes Supplier
Bargaining
Power
Buyer
Rivalry
High
Low
Moderate
Effect of
Compliments
Forces
Level
Factors
Threat of New Entrants
Low
High Capital Requirements
Economies of Scale
Threat of Substitutes
High
Bio-similar & Generic Drugs
Alternative Treatments
Supplier Bargaining Power
In-house Production
Multitude of Suppliers
Buyer
Bargaining Power
Moderate
Patent-protected Products
Rivalry
Fragmented Market
Merger & Acquisition
Effect of Compliments
Regulation (Affordable Care Act)
Healthcare Provider

8. SWOT Analysis Strength Opportunity Weakness Threats
Blockbuster Drug (HUMIRA)
Various Products
Patents Protection
Strong Brand Presence
Strength
Increasing Market Demand
Aging and Growing Population
Merger & Acquisition
Biotechnology Boom
Opportunity
Highly Dependent on HUMIRA
Patent Expiration
Complex Manufacturing Process
One Segment
Weakness
Government Regulations
Generic & Bio-simliar Products
Currency Exchange Rate
Litigation
Threats

9. Recent News
10/28/2016
AbbVie reported third quarter 2016 financial results
Raised 2016 Diluted EPS guidance range to $3.74-$3.76 Increased quarterly dividend by 12.3% up to $0.64 per share
10/22/2016
FDA warned two of AbbVie’s new hepatitis C treatments, Viekira Pak and Technivie
9/29/2016
AbbVie opened first phase of its Global Manufacturing Facility in Singapore
Information from AbbVie Website and Wall Street Journal

10. Technical Analysis Trailing P/E 15.35 Forward P/E 10.20 Beta 1.43
52-Week Change
-9.58%
S&P Week Change
0.09%
52 Week High
68.12
52 Week Low
50.71
50-Day Moving Average
62.13
200-Day Moving Average
62.87
Dividend Yield
4.16%
Date
Cost
Volume
Current Price
Gain
Total Gain
Portfolio Weight
2013/01/02
$27.08
100 shares
$56.79
$29.71
$2, (109.71%)
1.37%
Data from Yahoo Finance

11. Financial Performance
Data from Form 10-K and Capital IQ

12. Financial Performance
Data from Form 10-K and Capital IQ

13. Comparable Companies Company Name Market Capitalization Main Business
Amgen Inc. (NasdaqGS:AMGN)
$108,002mm
Discovers, develops, manufactures, and delivers human therapeutics worldwide
Bristol-Myers Squibb Company (NYSE:BMY)
$85,233mm
Discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide
Gilead Sciences Inc. (NasdaqGS:GILD)
$97,496mm
Research-based biopharmaceutical company
Discovers, develops, and commercializes medicines in areas of unmet medical needs in North America, South America, Europe, and the Asia-Pacific
Eli Lilly and Company (NYSE:LLY)
$78,649mm
Discovers, develops, manufactures, and markets pharmaceutical products worldwide
Two segments: Human Pharmaceutical Products and Animal Health Products
Data from Capital IQ

14. Comparable Companies
Data from Form 10-K and Capital IQ

15. Comparable Analysis Comparable Company TEV/LTM Revenue TEV/LTM EBIT
TEV/LTM EBITDA
LTM P/Diluted EPS
Eli Lilly and Company (LLY)
4.0x
16.6x
32.4x
Gilead Sciences Inc. (GILD)
3.4x
5.2x
6.5x
Bristol-Myers Squibb Company (BMY)
4.7x
15.0x
25.5x
Amgen Inc. (AMGN)
9.1x
14.5x
Comparable Statistics
TEV/LTM Revenue
TEV/LTM EBIT
TEV/LTM EBITDA
LTM P/Diluted EPS
High
4.7x
23.5x
16.6x
32.4x
Low
3.4x
5.5x
5.2x
6.5x
Mean
4.2x
14.1x
11.5x
19.7x
Median
4.3x
13.7x
12.0x
20.0x
Data from Form 10-Q and Capital IQ

16. Comparable Analysis Implied Price: $63.61 ABBV ABBV Implied Price
Cash& ST Investments
$ ,002.00
Debt
$ ,845.00
Shares Outstanding
$ ,664.11
ABBV Implied Price
Multiples
TEV/LTM Revenue
TEV/EBIT
TEV/LTM EBITDA
LTM P/Diluted EPS
High $ $ $ $
Low $ $ $ $
Mean $ $ $ $
Median $ $ $ $
weight
10%
40%
Implied Price: $63.61

17. Revenue Drivers
Data from Form 10-K and Capital IQ

18. Discount Rate
WACC: 8.77% + Premium: 1.00% ↓
Discount Rate: 9.77%

19. Discounted Cash Flow
Implied Price:
$ 59.61

20. Sensitivity Analysis
Price Range: $53.29 ~ $75.70

21. Hold Recommendation Comparable $63.61 Growing Demand M & A DCF $59.61
Current
$56.79
Patent Expiration
FDA Warning
Growing Demand
M & A
Hold