AbbVie(ABBV) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements and Supplementary Data This section presents AbbVie's unaudited condensed consolidated financial statements for the period ended June 30, 2025, including key statements and detailed supporting notes Condensed Consolidated Statements of Earnings AbbVie's Q2 2025 net revenues grew to $15.4 billion, but net earnings decreased to $938 million due to higher operating costs Condensed Consolidated Statements of Earnings (Q2 & H1 2025 vs 2024) | (in millions, except per share data) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $15,423 | $14,462 | $28,766 | $26,772 | | Operating earnings | $4,894 | $3,998 | $8,627 | $6,796 | | Net earnings attributable to AbbVie Inc. | $938 | $1,370 | $2,224 | $2,739 | | Diluted earnings per share | $0.52 | $0.77 | $1.24 | $1.53 | Condensed Consolidated Balance Sheets Total assets increased slightly to $137.2 billion by June 30, 2025, while a rise in liabilities led to a total stockholders' deficit of $138 million Condensed Consolidated Balance Sheet Highlights | (in millions) | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $29,261 | $25,582 | | Intangible assets, net | $57,031 | $60,068 | | Goodwill | $35,638 | $34,956 | | Total assets | $137,182 | $135,161 | | Total current liabilities | $39,767 | $38,749 | | Long-term debt and finance lease obligations | $62,959 | $60,340 | | Total liabilities | $137,320 | $131,797 | | Total equity (deficit) | ($138) | $3,364 | Condensed Consolidated Statements of Cash Flows Operating cash flow for H1 2025 increased to $6.8 billion, with cash and equivalents rising to $6.5 billion at period end Cash Flow Summary (Six Months Ended June 30) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | $6,788 | $6,311 | | Cash flows from investing activities | ($1,916) | ($10,690) | | Cash flows from financing activities | ($3,968) | $4,722 | | Net change in cash and equivalents | $943 | $316 | | Cash and equivalents, end of period | $6,467 | $13,130 | Notes to Condensed Consolidated Financial Statements Detailed disclosures cover acquisitions, collaborations, financial instruments, litigation, and product revenue breakdowns - AbbVie entered a definitive agreement to acquire Capstan Therapeutics for approximately $2.1 billion upfront in June 2025[24] - Completed the acquisition of Nimble Therapeutics for $210 million upfront in January 2025[25] - Entered into a license option agreement with ADARx Pharmaceuticals with a $335 million upfront payment and a licensing agreement with Gubra A/S with a $350 million upfront payment[30][31] - The recorded accrual balance for litigation was approximately $1.8 billion as of June 30, 2025, down from $2.5 billion at December 31, 2024[97] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses H1 2025 revenue growth of 7.4% to $28.8 billion, driven by key products offsetting Humira's decline, alongside analysis of margins and liquidity - For the first six months of 2025, worldwide net revenues increased 7% on a reported basis and 8% on a constant currency basis to $28.8 billion[120] - Strategic objectives include diversifying revenue, leveraging commercial strength, investing in the pipeline, and returning cash to shareholders[119] - The company is evaluating the impact of the 'One Big Beautiful Bill Act of 2025' and Executive Order 14297 on drug pricing[123][124] Results of Operations H1 2025 net revenues rose 7.4% to $28.8 billion, as strong growth from Skyrizi and Rinvoq offset Humira's decline from biosimilar competition Key Product Revenue Growth (H1 2025 vs H1 2024, Constant Currency) | Product | H1 2025 Net Revenues (in millions) | % Change (Constant Currency) | Key Driver | | :--- | :--- | :--- | :--- | | Skyrizi | $7,848 | +66.2% | Strong market share uptake across all indications. | | Rinvoq | $3,746 | +49.3% | Strong market share uptake across all indications. | | Humira | $2,301 | -54.3% | Direct biosimilar competition. | | Vraylar | $1,665 | +13.5% | Continued market share uptake and market growth. | | Botox Therapeutic | $1,794 | +15.5% | Continued market share uptake and market growth. | | Imbruvica | $1,492 | -10.7% | Decreased demand and unfavorable pricing in the U.S. | - Gross margin as a percentage of net revenues increased to 71% for H1 2025 from 69% in H1 2024, primarily due to increased leverage from revenue growth and lower amortization[152] - Acquired IPR&D and milestones expense for H1 2025 was $1.07 billion, including upfront payments for deals with Gubra A/S ($350M) and ADARx ($335M)[155] - Other expense, net, included a $4.3 billion charge for the change in fair value of contingent consideration liabilities in H1 2025, up from $2.1 billion in H1 2024, driven by higher estimated Skyrizi sales and lower discount rates[158] Financial Position, Liquidity and Capital Resources The company maintained strong liquidity with $6.8 billion in operating cash flow, deploying capital for dividends, debt repayment, and share repurchases Capital Allocation (Six Months Ended June 30, 2025) | Activity | Amount (in millions) | | :--- | :--- | | Cash Dividend Payments | $5,835 | | Share Repurchases | $606 | | Other Acquisitions and Investments | $1,274 | | Capital Expenditures | $504 | - In H1 2025, the company issued $4.0 billion in new senior notes and repaid $6.8 billion in maturing long-term debt[162] - The company's stock repurchase authorization had approximately $2.9 billion remaining as of June 30, 2025[88] - In January 2025, AbbVie added a new $3.0 billion five-year revolving credit facility, bringing total revolving credit facilities to $8.0 billion, with no amounts outstanding as of June 30, 2025[168] Quantitative and Qualitative Disclosures About Market Risk This section refers to the company's Annual Report on Form 10-K for the year ended December 31, 2024, for a detailed discussion of the company's market risk - The company's discussion of market risk is incorporated by reference from its Annual Report on Form 10-K for the year ended December 31, 2024[175] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO evaluated and concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[176] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[177] PART II. OTHER INFORMATION Legal Proceedings This section incorporates by reference the detailed information on legal proceedings from Note 12 of the financial statements - Information regarding legal proceedings is provided in Note 12 to the Condensed Consolidated Financial Statements and is incorporated by reference[181] Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, no shares were repurchased under the public program, with approximately $2.9 billion remaining in the repurchase authorization Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 1,102 | $183.12 | | May 2025 | 995 | $189.46 | | June 2025 | 1,081 | $190.21 | | Total | 3,178 | $187.52 | - The maximum dollar value of shares that may yet be purchased under the company's plans or programs is $2,896,110,760[182] Other Items No director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[183] Exhibits This section lists all exhibits filed with the Form 10-Q, including required certifications and interactive data files - Lists required certifications from the CEO and CFO under Rules 13a-14(a) and Section 906 of the Sarbanes-Oxley Act[186] - Includes the iXBRL (Inline eXtensible Business Reporting Language) formatted financial statements and cover page data[186]