AbbVie(ABBV) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - AbbVie reported Q3 2024 sales of $14.5 billion, reflecting robust operational growth of 4.9$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$1.6 billion [14][18] - Oncology revenues were $1.7 billion, with Venclexta sales up 18.2$677 million [24] - Neuroscience revenues grew 16% to $2.3 billion, driven by Vraylar sales up 16.6$875 million [26] - Aesthetics sales grew 1.8% to $1.2 billion, with Botox Cosmetic sales up 6.5$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]