On July 27, 2023 AbbVie (NYSE:ABBV) reported financial results for the second quarter ended June 30, 2023 (Press release, AbbVie, JUL 27, 2023, View Source [SID1234633446]).
"AbbVie’s second quarter results were well ahead of our expectations as we continue to demonstrate outstanding operational execution. The strong performance was driven predominantly by our non-Humira business, which delivered high single-digit sales growth, in line with our long-term outlook," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We continue to make progress across all stages of our pipeline and based upon the strong momentum of our diversified portfolio, we are once again raising our full year guidance."
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Note: "Operational" comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
Second-Quarter Results
•Worldwide net revenues were $13.865 billion, a decrease of 4.9 percent on a reported basis, or 4.2 percent on an operational basis.
•Global net revenues from the immunology portfolio were $6.813 billion, a decrease of 5.5 percent on a reported basis, or 5.0 percent on an operational basis.
◦Global Humira net revenues of $4.012 billion decreased 25.2 percent on a reported basis, or 24.8 percent on an operational basis. U.S. Humira net revenues were $3.452 billion, a decrease of 26.0 percent. Internationally, Humira net revenues were $560 million, a decrease of 19.8 percent on a reported basis, or 17.0 percent on an operational basis.
◦Global Skyrizi net revenues were $1.883 billion, an increase of 50.4 percent on a reported basis, or 51.0 percent on an operational basis.
◦Global Rinvoq net revenues were $918 million, an increase of 55.1 percent on a reported basis, or 56.7 percent on an operational basis.
•Global net revenues from the hematologic oncology portfolio were $1.478 billion, a decrease of 10.4 percent on a reported basis, or 9.8 percent on an operational basis.
◦Global Imbruvica net revenues were $907 million, a decrease of 20.8 percent, with U.S. net revenues of $666 million and international profit sharing of $241 million.
◦Global Venclexta net revenues were $571 million, an increase of 13.1 percent on a reported basis, or 15.0 percent on an operational basis.
•Global net revenues from the neuroscience portfolio were $1.885 billion, an increase of 13.6 percent on a reported basis, or 14.2 percent on an operational basis.
◦Global Botox Therapeutic net revenues were $748 million, an increase of 10.2 percent on a reported basis, or 11.3 percent on an operational basis.
◦Global Vraylar net revenues were $658 million, an increase of 33.9 percent.
◦Global Ubrelvy net revenues were $196 million, an increase of 5.9 percent on a reported basis, or 6.0 percent on an operational basis.
•Global net revenues from the aesthetics portfolio were $1.384 billion, an increase of 1.0 percent on a reported basis, or 2.9 percent on an operational basis.
◦Global Botox Cosmetic net revenues were $685 million, a decrease of 1.4 percent on a reported basis, or an increase of 0.7 percent on an operational basis.
◦Global Juvederm net revenues were $368 million, an increase of 6.9 percent on a reported basis, or 9.7 percent on an operational basis.
•On a GAAP basis, the gross margin ratio in the second quarter was 69.4 percent. The adjusted gross margin ratio was 84.7 percent.
•On a GAAP basis, selling, general and administrative (SG&A) expense was 23.6 percent of net revenues. The adjusted SG&A expense was 23.2 percent of net revenues.
•On a GAAP basis, research and development (R&D) expense was 12.5 percent of net revenues. The adjusted R&D expense was 12.5 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 second quarter was 32.5 percent. The adjusted operating margin was 47.0 percent.
•Net interest expense was $454 million.
•On a GAAP basis, the tax rate in the quarter was 22.3 percent. The adjusted tax rate was 15.8 percent.
•Diluted EPS in the second quarter was $1.14 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $2.91. These results include an unfavorable impact of $0.15 per share related to acquired IPR&D and milestones expense.
Note: "Operational" comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
2
Recent Events
•AbbVie announced that the U.S. Food and Drug Administration (FDA) approved Rinvoq (upadacitinib) for the treatment of adults with moderately to severely active Crohn’s disease (CD) who have had an inadequate response or intolerance to one or more TNF blockers. The approval is based on results from three studies in which Rinvoq achieved the co-primary endpoints of clinical remission and endoscopic response, compared to placebo, as both induction and maintenance therapy. This is the seventh FDA approved indication for Rinvoq across gastroenterology, rheumatology and dermatology.
•AbbVie announced Skyrizi (risankizumab) met the primary and key secondary endpoints in a 52-week Phase 3 maintenance study in patients with moderately to severely active ulcerative colitis (UC). In UC patients with a clinical response to Skyrizi induction treatment, a significantly higher proportion of patients treated with Skyrizi (180 mg or 360 mg) achieved the primary endpoint of clinical remission (per Adapted Mayo Score) at week 52 compared to withdrawal from Skyrizi treatment. Safety results in this study were consistent with the known safety profile of Skyrizi, with no new safety risks observed. Skyrizi is part of a collaboration between Boehringer Ingelheim and AbbVie, with AbbVie leading development and commercialization globally.
•AbbVie announced the British Journal of Dermatology published results from the head-to-head Phase 4 IMMpulse study that evaluated the efficacy and safety of Skyrizi compared to Otezla among adult patients with moderate plaque psoriasis (PsO) eligible for systemic therapy. In the study, significantly more patients achieved co-primary endpoints of psoriasis area and severity index (PASI) 90 and static physician’s global assessment (sPGA) 0/1 at week 16 with Skyrizi versus Otezla. Skyrizi was well-tolerated with no new safety signals identified.
•At the 2023 European Congress of Rheumatology (EULAR), AbbVie presented results from the Phase 2 SLEek study which demonstrated that Rinvoq, alone or as combination therapy, met the primary and key secondary endpoints in adults with moderately to severely active systemic lupus erythematosus (SLE). AbbVie also presented long-term data further supporting the efficacy and safety profile of Rinvoq across additional rheumatic diseases. Presentations included five-year results from the SELECT-COMPARE clinical trial evaluating Rinvoq and Humira (adalimumab), both in combination with methotrexate (MTX), in adult patients with moderate to severely active rheumatoid arthritis (RA) who had an inadequate response to MTX; three-year results from the SELECT-PsA 1 clinical trial evaluating Rinvoq in psoriatic arthritis (PsA) patients with prior inadequate response or intolerance to one or more non-biologic disease-modifying antirheumatic drugs (DMARDs); and one-year results from the SELECT-AXIS 2 clinical trial evaluating Rinvoq in patients with active ankylosing spondylitis (AS) who had an inadequate response to biologic DMARD therapy.
•At the 2023 Digestive Disease Week (DDW) Annual Meeting, AbbVie presented 29 abstracts demonstrating the breadth of its gastroenterology portfolio. Notable presentations highlighted efficacy and safety outcomes from the Rinvoq and Skyrizi clinical trial programs in adults with moderately to severely active CD as well as investigational use of Linzess (linaclotide) in treating functional constipation in pediatric patients aged 6 to 17 years.
•AbbVie and Genmab announced that the FDA approved Epkinly (epcoritamab) as the first bispecific antibody for the treatment of adult patients with relapsed or refractory (r/r) diffuse large B-cell lymphoma (DLBCL), not otherwise specified (NOS), including DLBCL arising from indolent lymphoma and high-grade B-cell lymphoma, after two or more lines of systemic therapies. Additionally, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Tepkinly (epcoritamab) for the treatment of adults with r/r DLBCL. Epkinly/Tepkinly is being co-developed by AbbVie and Genmab.
Recent Events (Continued)
•AbbVie and Genmab announced positive topline results from the follicular lymphoma (FL) cohort of the Phase 1/2 EPCORE NHL-1 clinical trial evaluating Epkinly in patients with r/r FL. The topline results showed an overall response rate (ORR) of 82 percent, which exceeded the protocol prespecified threshold for efficacy, and the median duration of response (DOR) was not reached and longer follow-up will be required. No new safety signals were observed with Epkinly and full study results will be submitted for presentation at a future medical meeting. Based on the topline results, AbbVie and Genmab will engage global regulatory authorities to discuss next steps.
•At the European Hematology Association (EHA) (Free EHA Whitepaper) Annual Congress, AbbVie announced new data from two studies which continued to show sustained progression free survival (PFS) in chronic lymphocytic leukemia (CLL) patients after fixed-duration treatment with Venclexta (venetoclax) combination regimens across different lines of therapy. The findings were from a six-year median follow-up from the Phase 3 CLL14 study as well as a final seven-year follow-up from the Phase 3 MURANO trial. Venclexta is being developed by AbbVie and Roche. It is jointly commercialized by AbbVie and Genentech, a member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.
•AbbVie announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending the approval of atogepant for the prophylaxis of migraine in adults who have four or more migraine days per month. The positive CHMP opinion is based on results from two pivotal Phase 3 studies evaluating atogepant for the prophylaxis of migraine in adults with episodic or chronic migraine. If approved, AbbVie will be the only company to offer a once daily oral calcitonin gene-related peptide (CGRP) receptor antagonist treatment spanning both episodic and chronic migraine in the European Union (EU).
•Allergan Aesthetics announced that the FDA approved Skinvive by Juvederm for improved skin smoothness of the cheeks. Skinvive is the first and only hyaluronic acid (HA) intradermal microdroplet injection for skin smoothness available in the U.S. with results lasting through six months with optimal treatment.
•AbbVie and Calibr announced an expanded strategic collaboration to advance several innovative preclinical and early-stage clinical assets across AbbVie’s core therapeutic areas including immunology, oncology, neuroscience and other areas of interest. This partnership is an expansion of the collaboration AbbVie and Scripps Research formed in 2019 to develop a broad range of potential new and novel therapeutics.
Full-Year 2023 Outlook
AbbVie is raising its adjusted diluted EPS guidance for the full year 2023 from $10.57 – $10.97 to $10.90 – $11.10, which includes an unfavorable impact of $0.23 per share related to acquired IPR&D and milestones expense incurred year-to-date through the second quarter 2023. The company’s 2023 adjusted diluted EPS guidance excludes any impact from acquired IPR&D and milestones that may be incurred beyond the second quarter of 2023, as both cannot be reliably forecasted.