AbbVie(ABBV) - 2024 Q1 - Quarterly Results

Q1 2024 Financial Performance Overview AbbVie's Q1 2024 performance was marked by strong ex-Humira growth, particularly in Skyrizi and Rinvoq, leading to a slight revenue increase and an upward revision of full-year adjusted EPS guidance Executive Summary & Highlights AbbVie reported a slight revenue increase to $12.310 billion, driven by strong growth in its ex-Humira platform, particularly Skyrizi and Rinvoq. While GAAP EPS saw a significant increase of 492.3%, adjusted diluted EPS decreased by 6.1% to $2.31. The company successfully completed the acquisition of ImmunoGen and raised its full-year 2024 adjusted EPS guidance Q1 2024 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Revenues | $12.310 Billion | +0.7% (Reported) | | GAAP Diluted EPS | $0.77 | +492.3% | | Adjusted Diluted EPS | $2.31 | -6.1% | Q1 2024 Global Net Revenues by Portfolio | Portfolio | Net Revenues (Global) | Change (Reported YoY) | | :--- | :--- | :--- | | Immunology | $5.371 Billion | -3.9% | | Oncology | $1.543 Billion | +9.0% | | Neuroscience | $1.965 Billion | +15.9% | | Aesthetics | $1.249 Billion | -4.0% | - Successfully completed the acquisition of ImmunoGen, adding its flagship cancer therapy, Elahere, to the portfolio[1] - Raised the full-year 2024 adjusted diluted EPS guidance range to $11.13 - $11.33 from the previous $10.97 - $11.17[1] Management Commentary The CEO and COO expressed satisfaction with the quarter's strong operational execution, highlighting that results were well ahead of expectations. They credited the performance to the ex-Humira growth platform and raised the full-year outlook based on this momentum - Chairman and CEO, Richard A. Gonzalez, highlighted the company's outstanding operational execution and strong quarterly results, attributing success to the company culture and productive R&D engine[2] - President and COO, Robert A. Michael, noted that first-quarter results were well ahead of expectations, driven by the excellent performance of the ex-Humira growth platform, leading to an increase in the full-year outlook[2] Detailed Financial Results This section provides a comprehensive breakdown of AbbVie's financial performance, including overall metrics and detailed portfolio-level revenue analysis Overall Performance Total net revenues for Q1 2024 were $12.310 billion, a 0.7% reported increase. GAAP operating margin was 22.7%, while the adjusted operating margin stood at 42.2%. GAAP diluted EPS was $0.77, and adjusted diluted EPS was $2.31, which included an unfavorable $0.08 impact from acquired IPR&D and milestones expense Q1 2024 Financial Performance Summary | Metric | GAAP | Adjusted | | :--- | :--- | :--- | | Net Revenues | $12.310 B | - | | Gross Margin Ratio | 66.7% | 82.9% | | Operating Margin | 22.7% | 42.2% | | Tax Rate | 21.8% | 14.8% | | Diluted EPS | $0.77 | $2.31 | - Both GAAP and Adjusted EPS results include an unfavorable impact of $0.08 per share related to acquired IPR&D and milestones expense[7] Portfolio Performance Analysis The growth of Skyrizi and Rinvoq in the Immunology portfolio and strong performance in Neuroscience partially offset the decline in Humira revenues due to biosimilar competition and weakness in the Aesthetics portfolio. The Oncology portfolio saw solid growth, bolstered by the new addition of Elahere Immunology Portfolio The Immunology portfolio generated $5.371 billion in revenue, a 3.9% reported decrease. This was driven by a 35.9% decline in Humira sales due to biosimilar competition, which was significantly offset by strong growth from Skyrizi (+47.6%) and Rinvoq (+59.3%) Q1 2024 Immunology Portfolio Global Net Revenues | Product | Net Revenues | Change (Reported YoY) | Change (Operational YoY) | | :--- | :--- | :--- | :--- | | Total Immunology | $5.371 B | -3.9% | -3.1% | | Humira | $2.270 B | -35.9% | -35.2% | | Skyrizi | $2.008 B | +47.6% | +48.0% | | Rinvoq | $1.093 B | +59.3% | +61.9% | Oncology Portfolio The Oncology portfolio's net revenues grew 9.0% to $1.543 billion. Venclexta sales increased by 14.2%, while Imbruvica sales declined by 4.5%. The portfolio also includes $64 million in revenue from Elahere following the ImmunoGen acquisition Q1 2024 Oncology Portfolio Global Net Revenues | Product | Net Revenues | Change (Reported YoY) | Change (Operational YoY) | | :--- | :--- | :--- | :--- | | Total Oncology | $1.543 B | +9.0% | +9.8% | | Imbruvica | $838 M | -4.5% | -4.5% | | Venclexta | $614 M | +14.2% | +16.3% | | Elahere | $64 M | N/A | N/A | Neuroscience Portfolio The Neuroscience portfolio delivered strong growth of 15.9%, reaching $1.965 billion in revenue. Key growth drivers included Vraylar (+23.6%), Ubrelvy (+33.8%), and Qulipta (+97.7%), along with a 4.1% increase in Botox Therapeutic sales Q1 2024 Neuroscience Portfolio Global Net Revenues | Product | Net Revenues | Change (Reported YoY) | | :--- | :--- | :--- | | Total Neuroscience | $1.965 B | +15.9% | | Botox Therapeutic | $748 M | +4.1% | | Vraylar | $694 M | +23.6% | | Ubrelvy | $203 M | +33.8% | | Qulipta | $131 M | +97.7% | Aesthetics Portfolio The Aesthetics portfolio saw a revenue decrease of 4.0% to $1.249 billion. Both Botox Cosmetic (-3.9%) and the Juvederm Collection (-16.4%) experienced declines in sales Q1 2024 Aesthetics Portfolio Global Net Revenues | Product | Net Revenues | Change (Reported YoY) | Change (Operational YoY) | | :--- | :--- | :--- | :--- | | Total Aesthetics | $1.249 B | -4.0% | -2.5% | | Botox Cosmetic | $633 M | -3.9% | -2.6% | | Juvederm | $297 M | -16.4% | -13.7% | Recent Events and Business Developments This section outlines AbbVie's recent strategic corporate activities, including leadership changes, mergers and acquisitions, and key regulatory and clinical advancements across its product pipeline Corporate and M&A AbbVie announced a CEO transition, with Robert A. Michael succeeding Richard A. Gonzalez. The company completed its acquisition of ImmunoGen, adding the cancer therapy Elahere, and also announced an agreement to acquire Landos Biopharma to strengthen its autoimmune disease pipeline. Strategic partnerships were formed with OSE Immunotherapeutics and Tentarix Biotherapeutics - Announced that President and COO Robert A. Michael will succeed Richard A. Gonzalez as CEO, effective July 1, 2024[8] - Completed the acquisition of ImmunoGen, adding its flagship antibody-drug conjugate (ADC), Elahere, to the oncology portfolio[9] - Announced a definitive agreement to acquire Landos Biopharma, gaining its lead investigational asset NX-13 for the treatment of ulcerative colitis[17] - Entered into strategic partnerships with OSE Immunotherapeutics to develop OSE-230 for inflammation and with Tentarix Biotherapeutics for multi-specific biologics in oncology and immunology[18] Regulatory and Clinical Updates The company achieved several key regulatory and clinical milestones. Elahere received full FDA approval, and Epkinly was granted Priority Review for a new indication. Positive Phase 3 data were reported for Rinvoq in two separate studies (GCA and AD), and long-term efficacy data for Qulipta was presented. Additionally, Juvederm Voluma XC received FDA approval for a new aesthetic application - The FDA granted full approval for Elahere for FRα-positive, platinum-resistant ovarian cancer based on the confirmatory MIRASOL Phase 3 trial[10] - The FDA granted Priority Review for Epkinly's supplemental Biologics License Application (sBLA) for adult relapsed or refractory follicular lymphoma (FL)[11] - Rinvoq achieved its primary endpoint in the Phase 3 SELECT-GCA study for giant cell arteritis and demonstrated superiority versus Dupixent in the Phase 3b/4 LEVEL UP study for atopic dermatitis[12][13] - Allergan Aesthetics received FDA approval for Juvederm Voluma XC for the improvement of moderate to severe temple hollowing[16] Full-Year 2024 Outlook This section details AbbVie's updated financial guidance for the full fiscal year 2024, reflecting adjustments based on recent performance and strategic developments Updated Financial Guidance AbbVie raised its full-year 2024 adjusted diluted EPS guidance from the previous range of $10.97 - $11.17 to a new range of $11.13 - $11.33. This updated guidance includes the $0.08 per share negative impact from IPR&D and milestones expense incurred in the first quarter Full-Year 2024 Adjusted Diluted EPS Guidance | Guidance | Range | | :--- | :--- | | Previous | $10.97 - $11.17 | | Updated | $11.13 - $11.33 | - The updated 2024 guidance includes an unfavorable impact of $0.08 per share related to acquired IPR&D and milestones expense from Q1 2024[20] Financial Statements and Reconciliations This section provides detailed financial statements, including key product revenues, consolidated earnings, and reconciliations of GAAP to non-GAAP measures, offering transparency into AbbVie's financial reporting Key Product Revenues This section provides a detailed breakdown of net revenues for key products, segmented by U.S. and international markets. It includes reported and operational percentage changes compared to the prior year, offering a granular view of product performance across geographies - The table details revenues for all major products, including Humira, Skyrizi, Rinvoq, Imbruvica, Venclexta, Botox, and Vraylar, showing their respective contributions and growth trends[28] Consolidated Statements of Earnings This statement presents AbbVie's income statement for the first quarter of 2024 compared to the same period in 2023, prepared in accordance with GAAP. It details revenues, costs, operating earnings, and net earnings, culminating in the diluted earnings per share Consolidated Earnings Summary (GAAP) | (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net revenues | $12,310 | $12,225 | | Operating earnings | $2,798 | $2,768 | | Net earnings attributable to AbbVie | $1,369 | $239 | | Diluted EPS | $0.77 | $0.13 | Reconciliation of GAAP to Non-GAAP Measures This section provides a detailed reconciliation of reported GAAP financial results to adjusted non-GAAP results for the first quarters of 2024 and 2023. It specifies adjustments for items such as intangible asset amortization, acquisition costs, and changes in contingent consideration to arrive at the non-GAAP figures used in management's analysis and guidance - For Q1 2024, pre-tax GAAP earnings of $1,755 million were adjusted by items totaling $3,083 million (primarily $1,891 million in intangible asset amortization) to reach non-GAAP pre-tax earnings of $4,838 million[31][34] - The adjusted tax rate for Q1 2024 was 14.8%, compared to the GAAP tax rate of 21.8%[34]