Core Insights - AbbVie has successfully navigated the challenges of losing patent protection for Humira, maintaining growth through its strong immunology portfolio and diversification efforts [1][2] - Despite a significant decline in Humira sales, AbbVie has seen substantial increases in sales from Rinvoq and Skyrizi, which are expected to continue to grow [2][3] Financial Performance - AbbVie reported Q3 sales of $14.46 billion, reflecting a 3.8% year-over-year increase, surpassing consensus estimates by 120 basis points [2][3] - The immunology segment grew by 4.8%, driven by a 13% increase in oncology sales and a 15.6% increase in neuroscience sales [2][3] - Adjusted earnings reached $3.00, up 1.7% year-over-year, exceeding forecasts by 270 basis points, indicating strong financial health [3] Guidance and Analyst Reactions - AbbVie raised its adjusted diluted EPS guidance, indicating strong operational momentum and expectations for continued growth in 2025 [4][5] - Analysts have responded positively to AbbVie's Q3 results, with all tracked revisions indicating higher price targets, suggesting a bullish outlook for the stock [5][6] Market Performance - Following the Q3 release, AbbVie’s stock price increased by 7%, reaching a new all-time high, supported by strong trading volume [7] - Technical indicators suggest a continued uptrend, with price targets ranging from $212 to $220 aligning with analyst revisions [7] Dividend and Capital Return - AbbVie offers a solid dividend yield of over 3.2%, which is significantly higher than the broad market average, indicating strong capital return potential [6]

Core Insights - AbbVie and EvolveImmune Therapeutics have announced a collaboration to develop multispecific therapeutic antibodies for cancer treatment, leveraging EvolveImmune's proprietary T-cell engager platform [1][3] - The partnership aims to address therapeutic challenges in both solid and hematologic malignancies by enhancing T-cell functionality and overcoming cancer cell resistance [2][3] Financial Terms - EvolveImmune will receive $65 million in upfront fees and equity investment from AbbVie, with potential for up to $1.4 billion in option fees and milestones, along with tiered royalty payments on net sales [3] Company Profiles - AbbVie is focused on advancing cancer treatment through innovative therapies and has a dynamic pipeline targeting various cancer types, including blood cancers and solid tumors [5][6] - EvolveImmune is developing first-in-category biotherapeutics aimed at overcoming cancer-driven immunodeficiency, with first-in-human clinical trials expected in 2025 [7]

Core Insights - Dividend-paying stocks have significantly outperformed non-payers, making them a powerful long-term investment option [1][2] Performance Data - From 1973 to 2023, the average annual total return for different categories of dividend stocks is as follows: - Dividend growers and initiators: 10.19% - Dividend payers: 9.17% - No change in dividend policy: 6.74% - Dividend non-payers: 4.27% - Dividend shrinkers and eliminators: (0.63%) - Equal-weighted S&P 500 index: 7.72% [3] Recommended Dividend Stocks - Five promising dividend-paying stocks include: 1. **Altria (MO)**: Yield 8.2%, 5-Year Avg. Dividend Growth Rate 4%, 10-Year Avg. Annual Return 5.51% [5][6] 2. **Chevron (CVX)**: Yield 4.3%, 5-Year Avg. Dividend Growth Rate 6.5%, 10-Year Avg. Annual Return 5.65% [5][8] 3. **Verizon Communications (VZ)**: Yield 6.5%, 5-Year Avg. Dividend Growth Rate 2%, 10-Year Avg. Annual Return 3.12% [5][9] 4. **AbbVie (ABBV)**: Yield 3.3%, 5-Year Avg. Dividend Growth Rate 7.7%, 10-Year Avg. Annual Return 14.45% [5][10] 5. **Realty Income (O)**: Yield 5%, 5-Year Avg. Dividend Growth Rate 3.7%, 10-Year Avg. Annual Return 7.4% [5][11] ETF Options - For those less confident in selecting individual stocks, several dividend-focused ETFs are available: - SPDR Portfolio S&P 500 High Dividend ETF (SPYD): Yield 4.18%, 5-Year Avg. Annual Return 8.67% [14] - Schwab U.S. Dividend Equity ETF (SCHD): Yield 3.61%, 5-Year Avg. Annual Return 13.05% [14] - iShares Core Dividend Growth ETF (DGRO): Yield 2.24%, 5-Year Avg. Annual Return 12.59% [14] - Vanguard Dividend Appreciation ETF (VIG): Yield 1.65%, 5-Year Avg. Annual Return 12.93% [14]

Group 1 - AbbVie Inc. (NYSE: ABBV) has not seen significant movement in its share price since August, but the release of its Q3 2024 results indicates investor satisfaction [1] - The company is being analyzed by a macroeconomist with over 20 years of experience in various industries, including investment management and investment banking [1] Group 2 - The investing group Green Growth Giants focuses on opportunities in the green economy, building on the themes presented in the Long Term Tips profile [1]

Financial Data and Key Metrics - AbbVie reported Q3 2024 sales of $14.5 billion, reflecting robust operational growth of 4.9% [55] - The ex-Humira platform grew nearly 18%, contributing significantly to the overall performance [55] - Adjusted EPS for Q3 was $3, $0.10 above the guidance midpoint, with a full-year adjusted EPS guidance raised to $10.90-$10.94 [55][57] - Skyrizi and Rinvoq combined sales are expected to exceed $17 billion in 2024, $1.3 billion above initial expectations [8] Business Line Performance - Immunology revenues were $7 billion, with Skyrizi sales up 51.5% to $3.2 billion and Rinvoq sales up 47.4% to $1.6 billion [14][18] - Oncology revenues were $1.7 billion, with Venclexta sales up 18.2% to $677 million [24] - Neuroscience revenues grew 16% to $2.3 billion, driven by Vraylar sales up 16.6% to $875 million [26] - Aesthetics sales grew 1.8% to $1.2 billion, with Botox Cosmetic sales up 6.5% to $414 million [31] Market Performance - Skyrizi achieved in-play biologic share leadership in approximately 30 key countries, with a 32% U.S. in-play patient share in Crohn's disease [16] - Rinvoq captured double-digit in-play patient share in the U.S. for ulcerative colitis and Crohn's disease, with both indications available in over 75 countries [18] - Venclexta saw strong momentum in Europe due to guideline changes recommending its combination use with BTK inhibitors [24] Strategic Direction and Industry Competition - AbbVie completed the acquisition of Cerevel Therapeutics, strengthening its neuroscience pipeline, particularly in Parkinson's and schizophrenia [10] - The company is advancing key R&D programs, including the U.S. approval of Vyalev for advanced Parkinson's and the submission of Teliso-V for non-small cell lung cancer [11] - Skyrizi and Rinvoq have demonstrated strong differentiation with compelling head-to-head data against competitors like Humira, Stelara, and Dupixent [21] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving robust mid-single-digit growth for 2025, driven by strong performance from Skyrizi and Rinvoq [72] - The company highlighted the potential for long-term growth in immunology, oncology, neuroscience, and aesthetics, supported by a strong pipeline and strategic acquisitions [7][10] - AbbVie announced a 5.8% increase in its quarterly cash dividend, reflecting confidence in its financial stability and growth prospects [12] Other Important Information - AbbVie raised its full-year revenue guidance by $500 million, now expecting total revenues of approximately $56 billion [57] - The company generated $11 billion in free cash flow, supporting a strong dividend and debt repayment strategy [64] - AbbVie is on track to achieve a net leverage ratio of two times by the end of 2026 [65] Q&A Session Summary Question: Humira Volume Shifting to Newer Drugs and 2025 Growth Outlook - Management confirmed that the shift of Humira volumes to Skyrizi and Rinvoq is a net positive, with robust mid-single-digit growth expected for 2025 [72][73] - The company noted that consensus estimates for Humira may need adjustment due to faster-than-expected erosion [73] Question: Skyrizi Head-to-Head Trial Against Entyvio - AbbVie is confident in Skyrizi's superiority in ulcerative colitis, particularly in naive patients, with endoscopic improvement rates of 76% [82][83] Question: Emraclidine Data Expectations - Management expects emraclidine to differentiate based on its safety profile and tolerability, with data readouts expected in Q4 2024 [87][88] Question: Skyrizi and Rinvoq Formulary Positioning for 2025 - AbbVie anticipates no material changes in formulary access for Skyrizi and Rinvoq in 2025, with low single-digit rebate changes expected [95][96] Question: Aesthetics Business Long-Term Outlook - The company remains confident in achieving $9 billion in aesthetics sales by 2029, driven by innovation like BoNT/E, despite near-term economic challenges [111][112] Question: Eye Care and Future Therapeutic Areas - Eye care is part of AbbVie's five key growth areas, with potential for opportunistic investments in metabolics and cardio if differentiation is achieved [116][117] Question: Emraclidine Placebo Effect Management - AbbVie has implemented strategies to manage placebo effects in emraclidine trials, including limiting sites and rigorous rater training [121][122] Question: Aliada Acquisition and Neuroscience Strategy - The Aliada acquisition enhances AbbVie's neuroscience pipeline, particularly in Alzheimer's, with potential for subcutaneous dosing and reduced ARIA risk [125][126] Question: Vraylar Channel Mix Pressure - Vraylar experienced slight channel mix pressure in Q3, leading to a $100 million reduction in guidance, offset by growth in Botox Therapeutics [143][144]

Core Viewpoint - AbbVie Inc. reported strong third-quarter earnings and revenue growth, driven by robust sales of key drugs, despite a significant decline in Humira sales due to loss of exclusivity [1][5][6]. Financial Performance - Adjusted earnings per share for Q3 2024 were $3.00, exceeding the Zacks Consensus Estimate of $2.92 and the company's prior guidance of $2.88-$2.92, reflecting a 1.7% year-over-year increase [1]. - Revenues reached $14.46 billion, surpassing the Zacks Consensus Estimate of $14.28 billion, with a reported sales increase of 3.8% year-over-year and 4.9% on an operational basis [1][2]. Drug Sales Performance - Key drugs driving revenue included Rinvoq ($1.61 billion, up 47.4%), Skyrizi ($3.21 billion, up 51.5%), and contributions from newer drugs like Ubrelvy, Elahere, Epkinly, and Qulipta [2][3][4]. - Humira sales declined 36.5% to $2.23 billion, with U.S. sales down 41.6% to $1.77 billion, missing estimates due to loss of exclusivity [5][6]. - Neuroscience portfolio sales increased 16% to $2.36 billion, driven by Botox Therapeutic and Vraylar, with sales exceeding estimates [7]. - Oncology/hematology sales rose 13% to $1.69 billion, supported by Elahere and Venclexta, also beating estimates [8]. Cost and Guidance - Adjusted SG&A expenses were flat at $3.33 billion, while adjusted R&D expenses increased 19.8% year-over-year to $2.06 billion [14]. - AbbVie raised its 2024 adjusted EPS guidance to a range of $10.90-$10.94, up from the previous guidance of $10.67-$10.87 [15].

Core Insights - AbbVie reported revenue of $14.46 billion for the quarter ended September 2024, reflecting a year-over-year increase of 3.8% and surpassing the Zacks Consensus Estimate by 1.29% [1] - The earnings per share (EPS) for the quarter was $3.00, compared to $2.95 in the same quarter last year, resulting in an EPS surprise of 2.74% over the consensus estimate of $2.92 [1] Revenue Performance by Product - Creon (US): $338 million, exceeding the estimated $303.41 million, with a year-over-year increase of 10.8% [3] - Rinvoq (International): $444 million, above the estimated $433.05 million, showing a significant year-over-year increase of 43.7% [3] - Rinvoq (US): $1.17 billion, surpassing the $1.12 billion estimate, with a year-over-year growth of 46.1% [3] - Skyrizi (International, Immunology): $427 million, slightly above the estimated $426.56 million, representing a 70.1% year-over-year increase [3] - Total Neuroscience Revenue: $2.36 billion, exceeding the $2.32 billion estimate, with a year-over-year increase of 15.7% [3] - Total Aesthetics Revenue: $1.24 billion, below the estimated $1.34 billion, showing no year-over-year change [3] - Total Immunology Revenue: $7.05 billion, above the estimated $6.86 billion, with a year-over-year increase of 3.9% [3] - Total Eye Care Revenue: $525 million, slightly below the estimated $529.68 million, reflecting a year-over-year decline of 13.2% [3] - Total Linzess/Constella Revenue: $234 million, below the estimated $265.25 million, with a year-over-year decrease of 18.8% [3] - Total Qulipta Revenue: $176 million, exceeding the estimated $167.27 million, with a year-over-year increase of 33.3% [3] - Other Neuroscience Revenue: $84 million, above the estimated $63 million, showing a year-over-year increase of 37.7% [3] Stock Performance - AbbVie shares have returned -3.8% over the past month, contrasting with the Zacks S&P 500 composite's +1.8% change, indicating underperformance relative to the broader market [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [4]

Financial Performance - AbbVie reported quarterly earnings of $3 per share, exceeding the Zacks Consensus Estimate of $2.92 per share, and compared to earnings of $2.95 per share a year ago, representing an earnings surprise of 2.74% [1] - The company posted revenues of $14.46 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.29%, and compared to year-ago revenues of $13.93 billion [2] - AbbVie has surpassed consensus EPS estimates and revenue estimates four times over the last four quarters [2] Stock Performance - AbbVie shares have increased by approximately 22.3% since the beginning of the year, matching the S&P 500's gain of 22.3% [3] - The current consensus EPS estimate for the coming quarter is $2.99 on revenues of $14.8 billion, and for the current fiscal year, it is $10.85 on revenues of $55.85 billion [7] Industry Outlook - The Large Cap Pharmaceuticals industry, to which AbbVie belongs, is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact AbbVie's stock performance [5]

Form 8-K Current Report (October 3, 2024) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) AbbVie updated its full-year and Q3 2024 adjusted diluted EPS guidance due to an estimated **$82 million** pre-tax acquired IPR&D and milestones expense impacting Q3 earnings by **$0.04** per share - Third quarter 2024 earnings are expected to include **$82 million** in pre-tax acquired IPR&D and milestones expense[4](index=4&type=chunk) - This expense is projected to have an unfavorable impact of **$0.04** on both GAAP and adjusted non-GAAP diluted earnings per share for Q3 2024[4](index=4&type=chunk) Adjusted Diluted EPS Guidance | Guidance Period | Adjusted Diluted EPS Range | | :--- | :--- | | Full-Year 2024 | $10.67 - $10.87 | | Q3 2024 | $2.88 - $2.92 | - AbbVie clarifies it does not forecast acquired IPR&D and milestones expense due to the uncertainty of timing and occurrence[5](index=5&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, noting that forward-looking statements are subject to risks and uncertainties detailed in the 2023 Annual Report on Form 10-K, with no obligation for public updates - The report includes forward-looking statements subject to risks and uncertainties under the Private Securities Litigation Reform Act of 1995[7](index=7&type=chunk) - Investors are directed to Item 1A, "Risk Factors," of AbbVie's 2023 Annual Report on Form 10-K for operational risk factors[7](index=7&type=chunk) - AbbVie disclaims any obligation to publicly release revisions to forward-looking statements, except as required by law[7](index=7&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists exhibits filed with the Form 8-K, primarily Exhibit 99.1, which contains updated 2024 guidance, noting that the information is furnished rather than filed for legal purposes - Exhibit 99.1, containing guidance inclusive of acquired IPR&D and milestones expense, is furnished with this report[6](index=6&type=chunk)[8](index=8&type=chunk) - The information in this report and its exhibits is not considered "Filed" under Section 18 of the Securities Exchange Act of 1934, limiting certain legal liabilities[6](index=6&type=chunk)

Core Insights - AbbVie reported third-quarter diluted EPS of $0.88 on a GAAP basis, a decrease of 12.0 percent, while adjusted diluted EPS was $3.00, an increase of 1.7 percent, impacted by an unfavorable $0.04 per share from acquired IPR&D and milestones expense [1][9] - The company achieved net revenues of $14.460 billion, reflecting a 3.8 percent increase on a reported basis and a 4.9 percent increase on an operational basis [2][26] - AbbVie raised its 2024 adjusted diluted EPS guidance from $10.67 - $10.87 to $10.90 - $10.94, including an unfavorable impact of $0.64 per share related to acquired IPR&D and milestones expense [1][25] Financial Performance - Global net revenues from the immunology portfolio were $7.046 billion, up 3.9 percent reported and 4.8 percent operationally; Humira revenues decreased by 37.2 percent to $2.227 billion, while Skyrizi and Rinvoq saw increases of 50.8 percent and 45.3 percent, respectively [3][32] - Oncology portfolio revenues reached $1.687 billion, an increase of 11.6 percent reported and 13.0 percent operationally, with Venclexta growing by 14.8 percent to $677 million [4][32] - Neuroscience portfolio revenues were $2.363 billion, up 15.6 percent reported and 16.0 percent operationally, with Botox Therapeutic and Vraylar contributing significantly to this growth [5][6][32] - Aesthetics portfolio revenues were $1.239 billion, showing a slight decrease of 0.1 percent reported but an increase of 1.8 percent operationally, with Botox Cosmetic revenues increasing by 8.2 percent [7][32] Strategic Developments - AbbVie completed the acquisition of Cerevel, enhancing its neuroscience portfolio with complementary assets, including potential treatments for schizophrenia and Parkinson's disease [11] - The company announced a 5.8 percent increase in its quarterly dividend, reflecting a commitment to returning cash to shareholders [27] - AbbVie received FDA approval for Vyalev, a new treatment for motor fluctuations in advanced Parkinson's disease, and positive results from the Phase 3 TEMPO-1 trial for tavapadon were reported [13][12]