During August, Neil Woodford, fund manager of CF Woodford Equity Income (GB00BLRZQ737), an IC Top 100 Fund, added two new US listed healthcare companies to the portfolio, one of which was AbbVie (ABBV:NYQ).
This is a global company which discovers, develops, and commercialises therapies to address a range of diseases. Its discovery and development is focused on a core set of therapeutic areas including immunology, kidney disease, liver disease, neuroscience, oncology and women's health.
"Our main portfolio activity in August focused on taking advantage of the indiscriminate share price falls that accompanied the market panic towards the end of the month," says Mr Woodford. "This allowed us to add to a number of existing holdings at incredibly attractive valuation levels. We also introduced two new US healthcare positions to the portfolio in the form of AbbVie and Theravance Biopharma (TBPH:NMQ).
"AbbVie trades on one of the most attractive valuations in its sector despite also offering one of the fastest anticipated growth rates. This is in part explained by fears about the future of Humira, AbbVie's treatment for auto-immune conditions such as rheumatoid arthritis, Crohn's disease and ulcerative colitis.
"Humira is the biggest selling drug in the world and continues to grow quickly but is due to come off patent soon. The valuation discounts an immediate threat to the franchise once the patent estate starts to expire, but we believe that this significantly underestimates the extent to which AbbVie can protect the Humira franchise through further innovation and overestimates the probability that generic biosimilars can be launched."
AbbVie accounts for 0.23 per cent of CF Woodford Equity Income's assets.
Together with its wholly-owned subsidiary, Pharmacyclics, AbbVie employs more than 28,000 people worldwide and markets medicines in over 170 countries. The company has a market cap of about $99bn and a yield of 3.43 per cent.
