On February 2, 2024 AbbVie (NYSE:ABBV) reported financial results for the fourth quarter and full year ended December 31, 2023 (Press release, AbbVie, FEB 2, 2024, View Source [SID1234639813]).
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"2023 was another outstanding year, marked by strong operational execution and significant overperformance from our non-Humira growth platform. During the year we meaningfully increased R&D investment and bolstered our pipeline with the proposed ImmunoGen and Cerevel Therapeutics acquisitions," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "2024 is an exciting year for AbbVie, as we are well positioned to fully absorb Humira erosion and achieve modest operational revenue growth, followed by a return to robust growth in 2025 and a high single-digit CAGR through the end of the decade."
Fourth-Quarter Results
•Worldwide net revenues were $14.301 billion, a decrease of 5.4 percent.
•Global net revenues from the immunology portfolio were $6.953 billion, a decrease of 12.3 percent, due to Humira biosimilar competition.
◦Global Humira net revenues of $3.304 billion decreased 40.8 percent on a reported basis, or 40.7 percent on an operational basis. U.S. Humira net revenues were $2.740 billion, a decrease of 45.3 percent. Internationally, Humira net revenues were $564 million, a decrease of 1.5 percent on a reported basis, or 1.0 percent on an operational basis.
◦Global Skyrizi net revenues were $2.394 billion, an increase of 51.9 percent on a reported basis, or 51.6 percent on an operational basis.
◦Global Rinvoq net revenues were $1.255 billion, an increase of 62.9 percent on a reported basis, or 62.8 percent on an operational basis.
•Global net revenues from the oncology portfolio were $1.509 billion, a decrease of 7.4 percent on a reported basis, or 7.6 percent on an operational basis.
◦Global Imbruvica net revenues were $903 million, a decrease of 19.0 percent, with U.S. net revenues of $683 million and international profit sharing of $220 million.
◦Global Venclexta net revenues were $589 million, an increase of 14.3 percent on a reported basis, or 13.7 percent on an operational basis.
•Global net revenues from the neuroscience portfolio were $2.094 billion, an increase of 22.6 percent on a reported basis, or 22.4 percent on an operational basis.
◦Global Botox Therapeutic net revenues were $776 million, an increase of 6.6 percent on a reported basis, or 6.7 percent on an operational basis.
◦Global Vraylar net revenues were $789 million, an increase of 39.8 percent.
◦Global Ubrelvy net revenues were $234 million, an increase of 18.9 percent.
◦Global Qulipta net revenues were $114 million.
•Global net revenues from the aesthetics portfolio were $1.371 billion, an increase of 6.4 percent on a reported basis, or 6.9 percent on an operational basis.
◦Global Botox Cosmetic net revenues were $718 million, an increase of 11.8 percent on a reported basis, or 12.3 percent on an operational basis.
◦Global Juvederm net revenues were $334 million, an increase of 3.4 percent on a reported basis, or 3.8 percent on an operational basis.
•On a GAAP basis, the gross margin ratio in the fourth quarter was 60.1 percent. The adjusted gross margin ratio was 83.9 percent.
•On a GAAP basis, selling, general and administrative (SG&A) expense was 22.3 percent of net revenues. The adjusted SG&A expense was 24.7 percent of net revenues.
•On a GAAP basis, research and development (R&D) expense was 13.5 percent of net revenues. The adjusted R&D expense was 13.4 percent of net revenues, reflecting funding actions supporting all stages of our pipeline.
•Acquired IPR&D and milestones expense was 2.0 percent of net revenues.
•On a GAAP basis, the operating margin in the fourth quarter was 22.3 percent. The adjusted operating margin was 43.8 percent.
•On a GAAP basis, net interest expense was $378 million. The adjusted net interest expense was $363 million.
•On a GAAP basis, the tax rate in the quarter was 32.1 percent. The adjusted tax rate was 17.2 percent.
•Diluted EPS in the fourth quarter was $0.46 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $2.79. These results include an unfavorable impact of $0.15 per share related to acquired IPR&D and milestones expense.
Recent Events
•AbbVie and ImmunoGen announced a definitive agreement under which AbbVie will acquire ImmunoGen, and its flagship cancer therapy Elahere (mirvetuximab soravtansine-gynx), a first-in-class antibody-drug conjugate (ADC) approved for platinum-resistant ovarian cancer (PROC). The acquisition accelerates AbbVie’s entry into the solid tumor space and enhances AbbVie’s oncology pipeline through the addition of multiple promising next-generation ADCs. The transaction values ImmunoGen at a total equity value of approximately $10.1 billion. Additional information on the transaction can be found at investors.abbvie.com.
•AbbVie and Cerevel Therapeutics announced a definitive agreement under which AbbVie will acquire Cerevel Therapeutics and its robust neuroscience pipeline of multiple clinical-stage and preclinical candidates with potential across several diseases including schizophrenia, Parkinson’s disease (PD) and mood disorders. The acquisition complements AbbVie’s neuroscience portfolio, adding a wide range of potentially best-in-class assets that may transform standards of care across psychiatric and neurological disorders. The transaction values Cerevel Therapeutics at a total equity value of approximately $8.7 billion. Additional information on the transaction can be found at investors.abbvie.com.
•AbbVie announced lutikizumab showed positive results in a Phase 2 trial in adults with moderate to severe hidradenitis suppurativa (HS) who had previously failed anti-TNF therapy. In the study, patients who received lutikizumab 300 mg weekly or 300 mg every other week showed higher response rates in the primary endpoint of achieving HS clinical response (HiSCR 50) and the secondary endpoint of skin pain (NRS30) at week 16, than those treated with placebo. Based on these data, AbbVie will advance its clinical program of lutikizumab in HS to Phase 3.
•AbbVie announced positive topline results from the Phase 2 LUMINOSITY trial evaluating telisotuzumab-vedotin (Teliso-V) in patients with c-Met protein overexpression, epidermal growth factor receptor (EGFR) wild type, advanced/metastatic nonsquamous non-small cell lung cancer (NSCLC). The results demonstrated a compelling overall response rate (ORR) per independent central review of 35 percent and 23 percent across c-Met High and c-Met Intermediate patients, respectively. Data from the study will be presented at a future medical meeting and AbbVie will discuss with global health authorities the potential to support an accelerated approval.
•AbbVie announced new data for Epkinly (epcoritamab) which showed strong, durable treatment response for patients with difficult-to-treat relapsed/refractory (r/r) follicular lymphoma (FL). Data from the Phase 1/2 EPCORE NHL-1 study showed patients treated with Epkinly experienced 82% ORR including 63% complete response (CR) rate. Additionally, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation (BTD) to Epkinly and the European Medicines Agency (EMA) validated a Type II application for Tepkinly (epcoritamab) for the treatment of adult patients with r/r FL after two or more therapies. Epkinly/Tepkinly is being co-developed by AbbVie and Genmab.
•AbbVie and Umoja Biopharma, an early clinical-stage biotechnology company, announced two exclusive option and license agreements to develop multiple in-situ generated CAR-T cell therapy candidates in oncology using Umoja’s proprietary VivoVec platform. The first agreement provides AbbVie an exclusive option to license Umoja’s CD19 directed in-situ generated CAR-T cell therapy candidates including UB-VV111, Umoja’s lead clinical program for hematologic malignancies. Under the terms of the second agreement, AbbVie and Umoja will develop up to four additional in-situ generated CAR-T cell therapy candidates for discovery targets selected by AbbVie.
•AbbVie announced the launch of Produodopa (foslevodopa/foscarbidopa) in the European Union (EU) for the treatment of advanced PD. Produodopa is the first-and-only subcutaneous 24-hour infusion of levodopa-based therapy for the treatment of severe motor fluctuations in people living with advanced PD whose symptoms are inadequately controlled by other therapies. In clinical trials, Produodopa demonstrated sustained improvements in "Off" time (when symptoms return between medication doses), "On" time (when symptoms are controlled) without dyskinesia (involuntary movement), and morning akinesia ("Off" time upon waking).
•AbbVie announced The Lancet published detailed clinical trial results evaluating the efficacy, safety and tolerability of Ubrelvy (ubrogepant) 100 mg for the acute treatment of migraine when administered during the prodrome (i.e., 1-6 hours before the predicted onset of headache pain) of a migraine attack. The Phase 3 study, PRODROME, showed that Ubrelvy given during the prodrome significantly reduced the likelihood of development of moderate or severe headache and reduced functional disability compared to placebo within 24 hours post-dose. Ubrelvy is the first and only acute treatment for migraine that has demonstrated data in the prodrome phase in a Phase 3, double-blind, placebo-controlled trial.
•AbbVie and BigHat Biosciences announced a research collaboration to leverage artificial intelligence and machine learning to discover next-generation therapeutic antibodies. Working closely with AbbVie, BigHat will utilize its Milliner platform, a suite of machine learning technologies integrated with a high-speed wet lab, to guide the design and selection for high quality antibodies for multiple therapeutic targets.
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Full-Year 2024 Outlook
AbbVie is issuing its adjusted diluted EPS guidance for the full-year 2024 of $11.05 to $11.25. This guidance includes a $0.32 per share dilutive impact related to the proposed ImmunoGen and Cerevel Therapeutics acquisitions, which are anticipated to close in the middle of 2024. The company’s 2024 adjusted diluted EPS guidance excludes any impact from acquired IPR&D and milestones that may be incurred during 2024, as both cannot be reliably forecasted.
Long-Term Outlook
AbbVie is reaffirming its expectations for a high single-digit compound annual revenue growth rate through 2029. This guidance assumes 2024 as the base year in the compound annual growth rate calculation.
AbbVie is raising its long-term outlook for Skyrizi and Rinvoq revenues. The company now expects combined Skyrizi and Rinvoq 2027 revenues of more than $27 billion, an increase of approximately $6 billion compared to previous guidance for combined revenues of more than $21 billion in 2027.
AbbVie is also raising its long-term outlook for Ubrelvy and Qulipta revenues. The company now expects peak combined Ubrelvy and Qulipta revenues of more than $3 billion, an increase of approximately $1 billion compared to previous guidance for peak revenues of more than $1 billion for each asset.
Additional detail regarding AbbVie’s long-term outlook can be found in the presentation at investors.abbvie.com.