AbbVie Piles on $8 Billion in Debt for Its Apogee Deal -- Should Dividend Investors Worry?

AbbVie (NYSE: ABBV) is aiming precocious with its $10.6 cardinal planned acquisition of Apogee Therapeutics (NASDAQ: APGE). The deal, pending regulatory approvals, is expected to adjacent successful the 3rd quarter.

The determination is designed to supplement the pharmaceutical giant's already beardown immunology portfolio. However, to money the acquisition of the biotech company, AbbVie is taking connected important debt, which concerns immoderate analysts. The payoff, AbbVie says, apt won't travel for six years, with the woody not expected to boost adjusted net per stock (EPS) until 2032.

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Here are 3 reasons the woody makes sense, peculiarly for semipermanent investors:

Apogee has a imaginable blockbuster successful Zumilokibart

Apogee's astir important cause is simply a monoclonal antibody that targets interleukin-13, a cytokine seen successful benignant 2 inflammation. Zumilokibart is seen chiefly arsenic an atopic dermatitis (AD) attraction that could grow into being a therapy for asthma and eosinophilic esophagitis (EoE). AD is 1 of the largest and astir underpenetrated immunology markets, with tens of millions of patients worldwide.

Current biologics, specified arsenic Dupixent, necessitate injections each 2 oregon 3 weeks, which limits adherence and convenience. Zumilokibart's three– to six-month dosing interval could amended diligent compliance and prime of life, perchance capturing a important stock of the AD marketplace and easy making it worthy billions successful yearly sales. Dupixent, for example, had 15.7 cardinal euros successful income successful 2025, according to Sanofi, equivalent to astir $18 billion.

The institution has nary plans to chopped its dividend

AbbVie has an above-average dividend output of astir 2.8% astatine its existent stock price. The institution has accrued its quarterly dividend, counting its clip arsenic a subsidiary of Abbott Labs (NYSE: ABT), for 53 consecutive years.

That is portion of what AbbVie is, and the institution knows that galore investors expect an above-average dividend. The institution raised its dividend, effectual this year, by 5.5% to $1.73 and has accrued its dividend by much than 330% since its spinoff from Abbott Labs successful 2013. The institution has stated its purpose to sphere its A2/A- recognition standing and scope astir 2 times nett leverage wrong 2 to 3 years aft closing the deal.