AbbVie(ABBV) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted earnings per share for the third quarter were $1.86, exceeding guidance by $0.10 [5][31] - Total net revenues reached nearly $15.8 billion, reflecting high single-digit sales growth and beating expectations by approximately $300 million [5][31] - Adjusted gross margin was 83.9% of sales, with adjusted R&D expense at 14.3% and adjusted SG&A expense at 21.6% [31] - The adjusted operating margin ratio was 30.9% of sales, including a 17% unfavorable impact from acquired IPR&D expense [31] Business Line Data and Key Metrics Changes - Immunology revenues totaled approximately $7.9 billion, up 11.2% operationally, with SKYRIZI and RINVOQ showing combined sales growth of over 40% [11][12] - SKYRIZI global sales were $4.7 billion, reflecting operational growth of 46%, while RINVOQ revenues were nearly $2.2 billion, up 34.1% [11][12] - Oncology revenues were nearly $1.7 billion, remaining relatively flat year-over-year, with VENCLEXTA and newer products offsetting declines from IMBRUVICA [15][16] - Aesthetics sales were approximately $1.2 billion, down 4.2% operationally, with BOTOX and JUVÉDERM experiencing declines [16][17] - Neuroscience revenues exceeded $2.8 billion, up 19.6% operationally, driven by strong performance from UBRELVY, QULIPTA, and VRAYLAR [18][19] Market Data and Key Metrics Changes - The U.S. aesthetics market is currently facing challenges, with overall consumer sentiment low, impacting discretionary spending [17] - The IL-23 market is expanding rapidly, with SKYRIZI and RINVOQ maintaining strong positions despite competition from TREMFYA [49][50] - The Parkinson's disease treatment market is seeing significant uptake for VYALEV, with a competitive advantage over ONAPGO due to its 24-hour coverage [74][75] Company Strategy and Development Direction - AbbVie is focused on pipeline advancement across immunology, oncology, neuroscience, and aesthetics, with approximately 90 programs in development [7][8] - The company is investing heavily in R&D, anticipating $9 billion in adjusted R&D expense for 2025, to support numerous pipeline opportunities [7][9] - AbbVie is committed to external innovation, including recent acquisitions to enhance its psychiatry and immunology pipelines [8][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changes in the PBM model and emphasized the importance of differentiated medicines [39][44] - The outlook for 2026 remains strong, with expectations for continued growth driven by the performance of SKYRIZI, RINVOQ, and the neuroscience portfolio [52][54] - Management highlighted the potential for significant growth in the neuroscience franchise, particularly with emerging products like tavapadon and VYALEV [61][78] Other Important Information - AbbVie announced a 5.5% increase in its quarterly cash dividend, reflecting a commitment to delivering a sustainable dividend [9][34] - The company has executed approximately 30 deals since the beginning of 2024, focusing on external innovation across key growth areas [35] Q&A Session Summary Question: Implications of the new PBM model and IRA price negotiations for VRAYLAR and LINZESS - Management emphasized the adaptability of AbbVie to changes in the PBM model and stated that the outcomes of IRA negotiations would not impact long-term guidance [39][44] Question: Competitive dynamics in the IL-23 market and outlook for 2026 - Management noted strong growth for SKYRIZI and RINVOQ, with confidence in maintaining competitive positions despite the entry of TREMFYA [49][50][54] Question: Long-term outlook for SKYRIZI and RINVOQ and market stress in aesthetics - Management indicated that the long-term guidance for SKYRIZI and RINVOQ may be exceeded, while also addressing challenges in the aesthetics market and plans for revitalization [59][63]