AbbVie slides 3.8% as J&J wins FDA approval for oral psoriasis drug
Icotyde becomes first oral peptide blocking IL-23 receptor, posing direct threat to AbbVie's $17.5B Skyrizi franchise
AbbVie shares tumbled 3.8% on Wednesday after Johnson & Johnson secured FDA approval for Icotyde (icotrokinra), the first oral peptide blocking the IL-23 receptor for moderate-to-severe plaque psoriasis, posing a direct competitive threat to AbbVie's flagship injectable treatment Skyrizi.
The stock decline erased $8.31 per share, closing at $211.45 and trimming the drugmaker's market capitalization to $391.6 billion. The drop represents the most significant single-day decline for AbbVie in months, reflecting investor concern over potential market share erosion in one of its fastest-growing therapeutic areas.
Icotyde's approval is supported by data from the ICONIC clinical development program, which included four Phase 3 studies involving 2,500 patients. In head-to-head superiority trials, approximately 70% of patients achieved clear or almost clear skin (IGA 0/1) at Week 16, while 55% reached a Psoriasis Area and Severity Index (PASI) 90 response. The drug demonstrated a favorable safety profile, with adverse reaction rates within 1.1% of placebo through Week 16.
The approval marks a significant advancement in psoriasis treatment. Unlike injectable biologics, Icotyde offers a once-daily pill format that precisely blocks the IL-23 receptor with high affinity, demonstrating potent inhibition of IL-23 signaling in human T cells, according to Johnson & Johnson's press release.
The competitive threat is substantial for AbbVie. Skyrizi, which generated $11.7 billion in revenue in 2024, is forecast to reach $17.3 to $17.5 billion in 2025. The drug achieved $4.7 billion in third-quarter 2025 sales, marking a 47% year-over-year increase. Combined with Rinvoq, AbbVie's immunology portfolio has grown from $17.7 billion in 2024 to $25.9 billion in 2025.
Skyrizi currently dominates the U.S. biologic psoriasis market with a 45% market share, capturing 55% of new and switching prescriptions. AbbVie leads the overall psoriasis drug market with a 12.5% share. The introduction of an oral competitor with comparable efficacy could accelerate physician and patient adoption of less invasive administration methods.
The convenience advantage of oral administration is significant in the psoriasis market. Many patients struggle with injection-based therapies due to needle phobia or administration inconvenience. Icotyde's once-daily pill format could attract patients who have delayed systemic treatment due to injection concerns, as well as those seeking to switch from injectable therapies.
Analysts have maintained a generally positive outlook on AbbVie despite the competitive pressure. The stock currently carries an analyst target price of $248.86, with 21 buy ratings and 9 hold ratings, suggesting room for recovery. However, the competitive dynamics in the IL-23 inhibitor market could lead to revised growth projections for Skyrizi.
The broader interleukin inhibitors market, where IL-23 inhibitors led with a 27.5% revenue share in 2024, is projected to grow at a compound annual growth rate of 15.32% through 2031. The psoriasis segment alone accounted for 37.0% of the interleukin inhibitors market in 2024.
AbbVie's valuation metrics reflect market confidence in its diversified portfolio. The company trades at a forward price-to-earnings ratio of 15.22, significantly more reasonable than its trailing P/E of 93.44, which was distorted by one-time factors. The company pays a quarterly dividend of $6.65 per share, yielding 3.0%.
The competitive challenge from Icotyde comes as AbbVie continues navigating the patent expiration of Humira, which once generated $20 billion annually but now faces biosimilar competition. Skyrizi and Rinvoq have been the primary drivers of AbbVie's growth strategy as it transitions from Humira dependence.
Investors will be watching AbbVie's upcoming earnings call for management commentary on the competitive threat and potential response strategies. Options could include increased investment in Skyrizi marketing, development of next-generation therapies, or pricing adjustments to maintain market share.