AbbVie(US:ABBV)2024-02-19 16:00Revenue and Financial Performance - For the year ended December 31, 2023, net revenues were $54.318 billion, a decrease of 6% from $58.054 billion in 2022[297]. - Net earnings attributable to AbbVie Inc. for 2023 were $4.863 billion, a decline of 59% compared to $11.836 billion in 2022[297]. - Basic earnings per share for 2023 were $2.73, down from $6.65 in 2022, reflecting a 59% decrease[297]. - Operating earnings for 2023 were $12.757 billion, down 30% from $18.117 billion in 2022[297]. - Total stockholders' equity decreased to $10.360 billion in 2023 from $17.254 billion in 2022, a decline of 40%[301]. - Total cash flows from operating activities for 2023 were $22,839 million, down from $24,943 million in 2022, indicating a decrease of about 8.5%[305]. - The company declared dividends totaling $10,647 million in 2023, compared to $10,179 million in 2022, reflecting an increase of approximately 4.6%[305]. - AbbVie reported net earnings attributable to AbbVie Inc. of $4.863 billion for 2023, down from $11.836 billion in 2022, resulting in a basic earnings per share (EPS) of $2.73 compared to $6.65 in the previous year[341]. Product Portfolio and Market Presence - Humira accounted for approximately 27% of AbbVie's total net revenues in 2023[12]. - AbbVie's immunology portfolio includes therapies for conditions such as rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis, with significant market presence in North America and the European Union[11]. - Skyrizi is approved for multiple autoimmune diseases and is administered via subcutaneous injection, with a treatment regimen that includes induction doses[13]. - Rinvoq is indicated for several inflammatory diseases and is available in North America, the European Union, and Japan, targeting patients with inadequate responses to TNF blockers[15]. - Imbruvica is approved for treating chronic lymphocytic leukemia and certain forms of non-Hodgkin lymphoma, highlighting AbbVie's focus on oncology products[16]. - Venclexta is used in combination therapies for treating acute myeloid leukemia and chronic lymphocytic leukemia, showcasing AbbVie's commitment to innovative cancer treatments[17]. - Botox Cosmetic and the Juvederm Collection of Fillers are key products in AbbVie's aesthetics portfolio, maintaining market leadership in the U.S. and globally[19]. - AbbVie's eye care products, including Ozurdex and Lumigan, address significant unmet needs in vision preservation and management of intraocular pressure[24]. - Mavyret is approved for treating chronic hepatitis C virus infections in both adult and pediatric patients, emphasizing AbbVie's diverse therapeutic offerings[26]. Competition and Market Challenges - AbbVie's immunology products face competition from anti-TNF products and JAK inhibitors, while its oncology products compete with BTK inhibitors[34]. - Humira is facing direct biosimilar competition globally, which is expected to exert competitive pressure on AbbVie's revenues[35]. - AbbVie expects ongoing pricing pressures from insurers and providers, particularly in the U.S. market due to federal laws requiring rebates and discounts[70]. Research and Development - AbbVie invests significantly in research and development, with numerous compounds in clinical development targeting complex diseases[54]. - The research and development process typically takes 8 to 12 years, with no guarantee of regulatory approval for new drugs[56]. - AbbVie partners with third parties, including biotechnology companies and academic institutions, to enhance its drug development efforts[54]. - The FDA requires substantial effort and financial resources for the approval of new pharmaceutical products, including successful completion of preclinical tests and clinical trials[58]. Regulatory and Compliance - Compliance with regulatory requirements is costly and materially affects AbbVie's business, impacting the time and costs associated with obtaining product approvals[67]. - The Inflation Reduction Act of 2022 mandates government-set prices for select high expenditure Medicare drugs starting in 2026, which could significantly impact revenues[73]. - In the European Union, governments regulate pharmaceutical product prices through national health care systems, affecting reimbursement and market access[76]. - Japan's National Health Insurance system sets drug prices and mandates price cuts every other year, impacting the profitability of pharmaceutical products[78]. - The company anticipates that regulatory obligations and compliance costs may expand in the future, affecting its operational strategy[62]. Financial Position and Capital Expenditures - Total assets as of December 31, 2023, were $134.711 billion, a decrease from $138.805 billion in 2022[301]. - Cash and equivalents increased to $12.814 billion in 2023 from $9.201 billion in 2022, marking a 39% increase[301]. - AbbVie's capital expenditures for pollution control in 2023 were approximately $16 million, with estimated expenditures of $22 million for 2024[87]. - The company estimates that a 100 basis point increase in interest rates would decrease the fair value of long-term debt by $3.9 billion[295]. Acquisitions and Investments - The company announced a definitive agreement to acquire Cerevel Therapeutics for approximately $8.7 billion, with a cash offer of $45.00 per share, expected to close in 2024[342]. - AbbVie completed the acquisition of ImmunoGen for approximately $10.1 billion at $31.26 per share, with the accounting impact to be included in Q1 2024 financial statements[344]. - Cash outflows related to other acquisitions and investments totaled $1.2 billion in 2023, compared to $539 million in 2022 and $1.4 billion in 2021[349]. - AbbVie entered a collaboration with REGENXBIO for RGX-314, making an upfront payment of $370 million and potential milestone payments of up to $1.4 billion[354]. Employee and Workforce Diversity - AbbVie employed approximately 50,000 employees in over 70 countries as of January 31, 2024[89]. - Women represented 52% of management positions globally, and 37% of AbbVie's workforce comprised members of historically underrepresented populations as of December 2023[95]. - AbbVie invests in competitive compensation and benefits programs, including health promotion and mental health awareness campaigns[91]. - The company has developed a talent pipeline through ongoing investment in functional and leadership training[90]. - AbbVie has a structured onboarding experience for new employees to support faster integration and performance[92]. Debt and Financial Instruments - As of December 31, 2023, the company has €5.4 billion in unsecured senior Euro notes outstanding, which are subject to foreign currency risk[294]. - The company has foreign currency forward exchange contracts with notional amounts totaling $1.8 billion as of December 31, 2023, designated as cash flow hedges[397]. - The company entered into a cross-currency swap contract with a notional amount of €433 million to hedge against foreign currency debt exposure[400]. - The company’s total liabilities for unrecognized tax benefits were $6.681 billion as of December 31, 2023, compared to $6.502 billion in 2022[339].