AbbVie Q1 2025 Earnings Report

AbbVie EPS Results

• Actual EPS: $2.46
• Consensus EPS: $2.40
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: $2.31

AbbVie Revenue Results

• Actual Revenue: $13.34 billion
• Expected Revenue: $12.91 billion
• Beat/Miss: Beat by +$428.98 million
• YoY Revenue Growth: +8.40%

AbbVie Announcement Details

• Quarter: Q1 2025
• Date: 4/25/2025
• Time: Before Market Opens
• Conference Call Date: Friday, April 25, 2025
• Conference Call Time: 9:00AM ET

AbbVie (NYSE:ABBV) is a US-based biopharma company with global operations. The company originated as the bio-pharma segment of Abbott Laboratories and was spun off in late 2012. The company officially IPOd on January 2, 2013; contrary to criticisms, the move was solely to protect the parent company from expiring patents. Post-spin, AbbVie emerged as a research-based biopharma that has more than doubled in size. AbbVie, like its parent Abbot Laboratories, is a well-established dividend growth stock.

Over the years, AbbView Inc. has made numerous acquisitions. Among the more notable are ImmuVen, Pharamcyclics and Allergan plc. Allergan plc was an Ireland-based pharmaceutical company focused on health-oriented aesthetic products and is the owner of Botox. Botox accounts for the bulk of the company’s Aesthetics portfolio revenue and about 4% of the net as of 2022. The total revenue in 2021 was $56.20 billion with a 31% operating margin.

Today, AbbVie operates as a diversified multi-national pharmaceutical company with a patient-centric approach to research. It is in business to discover, develop, manufacture and market pharmaceuticals globally but in a way that best serves the needs of patients and the global community.

The company’s original winner, Humira, is still the number one revenue source but the portfolio has been greatly expanded. Other profitable therapies include but are not limited to SKYRIZI for psoriasis, RINVOQ for rheumatoid arthritis and IMBRUVICA and VENCLEXTA for chronic leukemia conditions.

The company is focused on research and has a number of collaborations and partnerships to that end. Among the many avenues of research and innovation are the advancement of precision medicine or pMedicine. PMeds are designed not only to target the specific causes of diseases, often at the genetic level, but the patients that are most likely to benefit from them. Assuming there are 2 highly effective drugs for 1 disease, PMedicine seeks to identify which patients respond better to each.

As of 2022, AbbVie employed more than 50,000 people globally with 21,000 in STEM-related positions. To date, the company had invested more than $50 billion into research through more than 250 partnerships. Partnerships are with universities, medical facilities, research organizations and other pharmaceutical companies. The company’s operations span 20 countries, treating more than 60 million people and 40 conditions annually.

AbbVie has 5 focus areas for its research and products. These are Immunology, Oncology, Neurology, Virology and Eye Care. The company has a robust pipeline of new products that are in some stage of clinical trials. In most cases, trials are underway for multiple indications, including some therapies that have already been approved for 1 or more conditions.

AbbVie is a leader in ESG and sustainability. The company is a member of the Fortune 100 and one of the Fortune 100’s “Best Companies To Work For”. It is a Top 50 Company regarding diversification and a member of the Dow Jones Sustainability World Index and the S&P ESG Index. Among its many positions is sustainable operations so it can deliver life-changing therapies to those who need them most.

AbbVie Q1 2025 Earnings Call Transcript

Key Takeaways

• AbbVie delivered Q1 adjusted EPS of $2.46, beating the guidance midpoint by $0.10, with net revenues of $13.3 billion (up $550 million versus expectations) and raised full‐year EPS guidance to $12.09–$12.29.
• The ex-HUMIRA portfolio grew over 21% in the quarter, and management expects to exceed prior peak revenues by 2026, while not yet factoring in any potential sectoral tariffs.
• SKYRIZI and RINVOQ achieved combined sales of $5.1 billion (+65%), capturing roughly half of new Crohn’s patients in the US and leading in-play share in ulcerative colitis.
• Pipeline momentum includes pivotal data due in 2025 for litekizumab, ABBV-383, next-gen ADCs (tmAbA and ABBV-706), plus strategic deals to acquire Nimble Therapeutics (oral peptides) and license Gubra’s amylin analog for obesity.
• US HUMIRA revenues fell 49.5% to $1.1 billion due to biosimilar erosion, prompting a lower full-year HUMIRA outlook; the aesthetics business also saw a 10–20% decline, leading to adjusted guidance.

Presentation

[Operator]

Welcome to the AbbVie First Quarter twenty twenty five Earnings Conference Call. All participants will be able to listen only until the question and answer portion of this call. As a reminder, this call is being recorded. I would now like to introduce Ms. Shay, Senior Vice President, Investor Relations.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Good morning, and thanks for joining us. Also on the call with me today are Rob Michael, Chief Executive Officer Jeff Stewart, Executive Vice President, Chief Commercial Officer Rupal Thakkar, Executive Vice President, Research and Development, Chief Scientific Officer and Scott Runtz, Executive Vice President, Chief Financial Officer. Before we get started, I'll note that some statements we make today may be considered forward looking statements based on our current expectations. AbbVie cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in our forward looking statements. Additional information about these risks and uncertainties is included in our SEC filings.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

AbbVie undertakes no obligation to update these forward looking statements except as required by law. On today's conference call, non GAAP financial measures will be used to help investors understand AbbVie's business performance. These non GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release regulatory filings from today, which can be found on our website. Following our prepared remarks, we'll take your questions. So with that, I'll turn

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

the call over to Rob.

[Robert Michael, CEO at AbbVie]

Thank you, Liz. Good morning, everyone, and thank you for joining us. AbbVie is off to an excellent start to the year with first quarter results exceeding expectations across several of our therapeutic areas. We also continue to advance our promising internal pipeline and add external opportunities to further strengthen our business and long term outlook.

[Robert Michael, CEO at AbbVie]

Turning to our first quarter performance, we delivered adjusted earnings per share of $2.46 which is $0.10 above our guidance midpoint. Total net revenues were more than $13,300,000,000 nearly $550,000,000 ahead of our expectations. I'm especially pleased with the performance of our ex HUMIRA platform, which delivered robust sales growth of more than 21%. Immunology, neuroscience, oncology, anesthetics are all performing at or above our expectations, and we are well positioned to exceed our previous peak revenue in just the second full year following The U. S.

[Robert Michael, CEO at AbbVie]

HUMIRA LOE. Based on this strong performance, we are raising our full year adjusted earnings per share guidance by $0.10 and now expect adjusted EPS between $12.09 and $12.29 As you are aware, there is speculation that sectoral tariffs could be forthcoming. Any related impact from these tariffs, as well as other potential new or reciprocal tariffs, have not been contemplated in our guidance. To the extent there is an impact, we believe it would be in line with our peers, given that AbbVie has an extensive manufacturing presence in The United States, including API, biologics, toxins, and small molecules. And over the next decade, we anticipate investing more than $10,000,000,000 of capital in The US to support our volume growth and our expansion into new areas such as obesity.

[Robert Michael, CEO at AbbVie]

Turning back to our performance, I'm very pleased with the excellent progress we are making with several pipeline programs that have the potential to be meaningful sources of growth. These include lutekizumab across several immunology indications, three eighty three in multiple myeloma, and our next generation ADCs, including tMAbA for several solid tumor types and seven zero six for small cell lung cancer. We also continue to add depth to our pipeline with strategic transactions that can help drive growth in the next decade. This includes the recent acquisition of Nimble Therapeutics to expand our immunology portfolio with oral peptides, as well as the license agreement with GUBRA to develop an amylin analog for the treatment of obesity. Obesity represents a significant global health concern with high unmet need.

[Robert Michael, CEO at AbbVie]

This market will continue to evolve with improved offerings, and we believe our program with GUBRA has the potential to deliver a differentiated asset. Going forward, we plan to invest further in obesity along with other opportunities across our existing five key growth areas. In summary, the fundamentals of our business are strong and we are well positioned for the long term. AbbVie has a clear runway to growth for at least the next eight years, including a high single digit revenue CAGR through 2029. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights.

[Robert Michael, CEO at AbbVie]

Jeff?

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Thank you, Rob. I'll start with the quarterly results for immunology, which delivered total revenues of more than $6,200,000,000 exceeding our expectations. SKYRIZI and RINVOQ are performing exceptionally well, contributing $5,100,000,000 in combined sales this quarter, reflecting growth of more than 65%. I'm especially encouraged with our portfolio performance across IBD, where SKYRIZI and RINVOQ continue to capture significant share, given their efficacy, safety, and dosing profiles. In Crohn's disease, which is roughly two thirds of the overall IBD market, these two treatments together are capturing roughly one out of every two in play patients in The U.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

S. And total prescription share is now in the mid teens. Internationally, our Crohn's portfolio has achieved in play leadership in nearly a dozen key countries. In ulcerative colitis, SKYRIZI has already achieved the leading in play share in The U. S.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Following the launch in the second half of last year. SKYRIZI and RINVOQ together are now capturing one out of every three in play UC patients, a very strong leadership position for AbbVie. We are also seeing strong momentum across indications in dermatology and rheumatology as well. For SKYRIZI, we continue to gain share in psoriatic disease, where we have achieved the leading in place share of new and switching patients in nearly 30 countries and see substantial room for total share growth. For RINVOQ, we are seeing increasing prescription demand globally across each of the room indications, as well as additional momentum in atopic dermatitis, the fastest growing immunology market, where we have two compelling head to head studies versus Dupixent.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

We are also preparing for the global launch of giant cell arteritis, another new source of growth for RINVOQ. We received European approval earlier this month and expect FDA approval soon. The addition of this indication further rounds out RINVOQ's rheumatology label and gives patients with GCA access to a new compelling oral therapeutic option. Overall, SKYRIZI and RINVOQ are demonstrating impressive results across all of their approved indications, and we will be raising our full year sales guidance for both products. Turning now to HUMIRA, which delivered global sales of $1,100,000,000 down 49.5% on an operational basis, below our expectations, primarily due to faster share erosion from biosimilar competition as well as further molecule compression in The U.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

S. As a result, we will be lowering our full year sales guidance for U. S. HUMIRA. Moving to oncology, where total revenues were 1,600,000,000 exceeding our expectations.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

IMBRUVICA global sales were $738,000,000 down 11.9%, reflecting competitive dynamics in CLL. VENCLEXTA global revenues were $665,000,000 up 12.3% on an operational basis. This strong performance reflects continued momentum in CLL, as well as shared leadership in frontline AML among patients who are ineligible for intensive induction chemotherapy. We also have an emerging commercial portfolio in solid tumors. This includes Elihere, our leading ADC for ovarian cancer with global sales of $179,000,000 as well as Calico V, a potential new medicine for late line non small cell lung cancer patients, with U.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

S. Regulatory approval and commercialization expected in the next couple of months. Talicia V will be supported by a dedicated sales force and medical affairs team, which will target academic and community cancer treatment centers to reinforce the importance of c Met as a biomarker and build relationships that support our emerging solid tumor franchise. Turning now to aesthetics, which delivered global sales of $1,100,000,000 down 10.2% on an operational basis. This was in line with our expectations.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

BOTOX Cosmetic global revenues were $556,000,000 down 10.7% on an operational basis and Juvederm sales were $231,000,000 down 20% on an operational basis. As we have seen over the last several quarters, economic headwinds have continued to impact market conditions. Based on the trends we are seeing, including a decline in recent consumer sentiment, we are moderating our assumptions for category growth globally and adjusting our full year sales guidance for aesthetics accordingly. While near term aesthetics market conditions remain challenging, the long term prospects for the category remain attractive, given high consumer interest and low penetration rates for facial injectables. I'm particularly excited about Bondi, our fast acting, short duration toxin, which we recently submitted for U.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

S. Regulatory review. This first in class toxin represents a distinctive innovation for the treatment of glabellar lines and has the potential to be an important catalyst for new patient activation into the facial aesthetics category. We anticipate commercialization next year. Moving now to neuroscience, where total revenues were approximately $2,300,000,000 up 17% on an operational basis, with all key products exceeding our expectations.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

RHELAR global sales were $765,000,000 up 10.3%, reflecting share capture in both Bipolar I disorder and adjunctive major depression. We continue to get very positive feedback on Vraylar's profile in terms of dosing flexibility, low sedation, and the ability to treat a full spectrum of symptoms. We are very competitively positioned with our migraine portfolio, where all three of our therapies continue to deliver double digit operational growth. BOTOX Therapeutic global revenues were $866,000,000 up 17%. Ubrellvy global sales were $240,000,000 up 18%.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

And QLIPTA global revenues were $193,000,000 up 48.3%. And in Parkinson's disease, VIOLEV global sales were $63,000,000 reflecting continued strong uptake in Japan and Europe. We are also pleased with the early launch feedback in The U. S, where revenues are expected to ramp gradually over the next couple of quarters as we work to establish the appropriate Medicare coverage and benefit determination. Lastly, we are making excellent progress with the development of tabapidone in Parkinson's disease.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

This first in class D1D5 selective dopamine agonist has a favorable benefit risk profile and the potential to differentiate in several areas, such as sedation and impulse control. Tevapadon could potentially be used as a monotherapy for early Parkinson's disease, as well as an adjunctive therapy to levodopa for more advanced patients, which would be a complementary addition to our existing PD portfolio with VIALEV and DUOPA. We expect to submit to vapadon for regulatory review later this year with commercialization expected in 2026. Overall, I'm extremely pleased with the execution and strong momentum across our commercial portfolio. And with that, I'll turn the call over to Ruppel for comments on our R and D highlights.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Ruppel?

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Thank you, Jeff. I will start with immunology. We received European approval for RINVOQ in GCA and expect FDA approval soon. We remain on track for several important data readouts this year, as well including Phase III data for RINVOQ in alopecia areata and vitiligo, and data from SKYRIZI's head to head study in psoriasis versus SOTIC2. Our early and mid stage immunology pipeline continues to advance.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Recent initiations include a phase two study evaluating SKYRIZI in combination with lutekizumab in psoriatic arthritis, and a Phase I study for our next generation TL1A antibody, which is designed to have less frequent dosing compared to other TL1As in development, and will be evaluated in combination with SKYRIZI in both Crohn's disease and ulcerative colitis. This summer, we will start a phase two study evaluating a combination of lutekizumab and our anti CD40 ravagalumab in rheumatoid arthritis. Moving to our ADCs in oncology. We anticipate accelerated approval in the second quarter for Taliso V as a monotherapy in previously treated nonsquamous, non small cell lung cancer with high c Met expression. This is a segment of lung cancer with high unmet need, and when approved, Taliso V will be the first c Met directed ADC for these patients.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

We're also making good progress with TMAb A, our next generation c Met ADC, A phase two dose optimization study evaluating tmAbA with a PD-one inhibitor as a frontline combination therapy in EGFR wild type non small cell lung cancer was recently initiated. In the EGFR mutant segment, we plan to initiate studies for tmAbA as a monotherapy in the second line setting and in combination with osimertinib in the first line setting. Preliminary phase one results will be presented at the upcoming ASCO meeting. This year, phase two data from our CRC study evaluating tmAbA in combination with bevacizumab will be available, which could enable a phase three study in an all comers population. Progress also continues with ABBV-seven zero six in small cell lung cancer.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Recall, this ADC utilizes the same topo warhead and linker technology as tmAbA, but with an antibody that targets across doses with an objective response rate of approximately sixty percent in patients with relapsed or refractory small cell lung cancer. Based on maturing duration of response and progression free survival data, we plan to advance seven zero six into a trial in a relapsedrefractory population and a dose optimization study in combination with with the goal of establishing a chemosparing regimen as a new standard of care. In the area of hematologic oncology, the data readout remains on track for the phase three VENCLEXTA MDS trial, and if positive, our regulatory submissions would follow later in the year. A regulatory submission for PIVEC in BPDCN is also planned for this year. We continue to make good progress with our BCMA CD3 bispecific ABBV383 in multiple myeloma.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Recruitment is going well in the phase three monotherapy study in later lines, and we are on track to be fully enrolled by early next year. Additionally, we continue to evaluate three eighty three in various combinations, including with Pomalyst, Brevlimid, Darzalex, and iberdomide. We'll begin seeing data from these combinations next year, which could enable phase three studies in earlier lines of therapy. Now moving to neuroscience. Interim data from the long term TEMPO-four Phase III study continued to support to vabadon's favorable benefitrisk profile.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Efficacy in both early and advanced Parkinson's patients was maintained beyond a year, and the safety profile was consistent with that observed in the previous phase three studies, with no new safety concerns identified. Rates of adverse events of special interest remained low, with impulse control disorder and peripheral edema less than one percent, dyskinesia approximately two percent, and sedation less than five percent. These results underscore tevapadon's potential to become an important new treatment option for patients with Parkinson's disease. Our regulatory application is planned for later in the year. Moving to other areas of our pipeline.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

In aesthetics, the regulatory application for our rapid onset short acting toxin Bonte was recently submitted. We also began the clinical program to evaluate co administration of Bonte and Botox, which has the potential to be co formulated as a novel product, offering the combined benefits of rapid onset and Botox like duration. In obesity, our partner, GUBRA, recently announced positive interim results from the first part of a multiple ascending dose study for our long acting amylin analog, ABBV-two ninety five. This initial phase of the study tested one and two milligrams, dosed once weekly for six weeks in healthy, lean, and overweight patients. The study showed two ninety five performed well, demonstrating a dose dependent mean weight loss compared to placebo and a tolerability profile consistent with the results from the single ascending dose study.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Mean weight loss in the two milligram cohort, which had a mean BMI of twenty four, was 7.8% compared to a weight gain of 2% in the placebo arm on day forty three. The second phase of this study is ongoing and is evaluating higher doses in overweight and obese patients with twelve week dosing. Titration and longer dosing intervals will also be assessed. Full data from this part of the study are expected next year. To summarize, significant progress continues with our pipeline, and we look forward to important data readouts, regulatory submissions, and approvals throughout 2025.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

With that, I'll turn the call over to Scott.

[Scott Reents, Executive VP & CFO at AbbVie]

Thank you, Rupal. Starting with our first quarter results, we reported adjusted earnings per share of $2.46 which is $0.10 above our guidance midpoint. These results include a $0.13 unfavorable impact from acquired IP R and D expense. Total net revenues were more than $13,300,000,000 reflecting robust growth of 9.8% on an operational basis, excluding a 1.4 unfavorable impact from foreign exchange. Adjusted gross margin was 84.1% of sales, adjusted R and D expense was 15.4% of sales, and adjusted SG and A expense was 24.6% of sales.

[Scott Reents, Executive VP & CFO at AbbVie]

The adjusted operating margin ratio was 42.3 of sales, which includes a 1.9% unfavorable impact from acquired IPR and D expense. Net interest expense was $627,000,000 The adjusted tax rate was 14.2%. Turning to our financial outlook, we are raising our full year adjusted earnings per share guidance to between $12.09 and $12.29 Please note that this guidance does not include an estimate for acquired IPR and D expense that may be incurred beyond the first quarter. We now expect total net revenues of approximately $59,700,000,000 an increase of $700,000,000 This reflects an estimated 0.6% unfavorable impact from foreign exchange on full year sales growth. This updated revenue forecast includes the following approximate assumptions for several of our key products.

[Scott Reents, Executive VP & CFO at AbbVie]

We now expect SKYRIZI global revenues of $16,500,000,000 an increase of $600,000,000 reflecting share gains in psoriasis and IBD RINVOQ global sales of $8,200,000,000 an increase of $300,000,000 reflecting momentum across all approved indications. US HUMIRA revenues of 3,500,000,000 a decrease of $500,000,000 reflecting higher erosion from biosimilar competition, as well as further molecule compression. Botox Therapeutic global sales of $3,600,000,000 an increase of 100,000,000 reflecting growth in chronic migraine and other indications. Total oral CGRP revenues of $2,200,000,000 an increase of $100,000,000 reflecting strong prescription demand. IMBRUVICA global revenues of $2,800,000,000 an increase of $100,000,000 reflecting lower erosion.

[Scott Reents, Executive VP & CFO at AbbVie]

VENCLEXTA global sales of $2,700,000,000 an increase of 100,000,000 reflecting continued uptake in both CLL and AML across our key countries. And for aesthetics, we now expect global sales of $5,100,000,000 as we are moderating our assumptions for market growth globally. As a result, total sales guidance for BOTOX and Juvederm will each be lower by roughly $100,000,000 Moving to the P and L for 2025. We continue to forecast full year adjusted gross margin of approximately 84% of sales and adjusted SG and A expense of approximately $13,200,000,000 We now expect adjusted R and D expense of approximately $8,900,000,000 reflecting additional investment in our robust pipeline for long term growth. We also now anticipate an adjusted operating margin ratio of roughly 46.5% of sales, in line with our previous expectations, after including the 0.4 unfavorable impact of acquired IPR and D expense incurred through the first quarter.

[Scott Reents, Executive VP & CFO at AbbVie]

Turning to the second quarter, we anticipate net revenues of approximately $15,000,000,000 This reflects an estimated 0.3% unfavorable impact from foreign exchange on full year sales growth. We are forecasting an adjusted operating margin ratio of roughly 49.5%. We expect adjusted earnings per share between $3.26 and $3.3 This guidance does not include acquired IPR and D expense that may be incurred in the quarter. Our guidance is based on current trade rules and does not reflect the impact of any additional trade policy shifts, including pharmaceutical sector tariffs. While it's difficult to quantify in the absence of actual policy details, it's worth noting any related unfavorability in 2025 would reflect a partial year, given the timeline for a February investigation.

[Scott Reents, Executive VP & CFO at AbbVie]

We are actively preparing for a number of potential scenarios and would expect to put into place mitigation strategies as we have more information. Relevant to these dynamics, I would also highlight that AbbVie has a significant US manufacturing presence that spans 11 sites with plans to add four new manufacturing plants to our network, expanding our production for API, drug product, peptides, and devices in The United States. As we continue to invest and grow our U. S. Operational footprint, we believe a more competitive tax policy, building on what was accomplished through 2017 tax reform, will encourage a sustainable shift towards U.

[Scott Reents, Executive VP & CFO at AbbVie]

S. Manufacturing over the long term. In closing, I'm very pleased with the excellent start to the year. We are demonstrating strong momentum across the portfolio and continue to be well positioned to deliver robust growth in 2025 and beyond. With that, I'll turn the call back over to Liz.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Scott. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to one or two. Operator, first question, please.

[Operator]

For our first question, we'll go to the line of Chris Schott from JPMorgan. Please go ahead.

[Chris Schott, Managing Director at JP Morgan]

Great. Thanks for the question and congrats on the results. Just two for me. Maybe first on SKYRIZI and RINVOQ. Obviously, some big step up in the guidance here.

[Chris Schott, Managing Director at JP Morgan]

Can you just elaborate a little bit more on which of the indications are most attributable to the upside we're seeing right now? And maybe just talk a little bit about the competitive landscape, maybe particularly Tremfya, more broadly launching in IBD and how you're thinking about that dynamic? And then just my second question was second immunology on HUMIRA. Can you just talk a bit more about how you're thinking about the tail for HUMIRA in light of some of the erosion that you're seeing this year? Thanks so much.

[Scott Reents, Executive VP & CFO at AbbVie]

Chris, this is Scott. I'll start with kind of where we saw the increase attributed to for the various indications, and I'll turn to Jeff for your other questions. So we raised SKYRIZI by $600,000,000 to 16,500,000,000.0 and that's split between $200,000,000 in psoriatic and 400,000,000 in IBD indications. And then with respect to RINVOQ, we raised that $300,000,000 and that's across all of the approved indications, so you can attribute that to 100 for rheumatology, one hundred for derm, and the remaining 100 for IBD.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Yeah, thanks Chris, it's Jeff. Maybe I'll give some sense. We're obviously very, very pleased with the performance of SKYRIZI and RINVOQ in immunology as you've seen from their report. Maybe to give some perspective, it's not uncommon to start to see in class competition. We've seen that in psoriasis, we've seen that across the board.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

And maybe I'll just give a little bit of a perspective over sort of the historical dynamics that we've seen with the IL-twenty three category. So for example, if you go back to like 2018, '20 '19 when the IL-23s were starting to come in psoriasis, the total patient share at that time in the early days was about seven percent of the IL-twenty three class. Now it's over sixty. And if we look at where IBD is, obviously we launched first with SKYRIZI and Crohn's and everything's recently launching here at UC, it's about seven percent of the total patient share in IBD. So you can imagine as we start to watch what this category is going to mean to transform IBD, we remain very confident.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

It's not a zero sum game. We feel very confident in our profile and what we're able to deliver if we look across UC, if we look across our head to head data versus sequence versus the other trials. And so net net, we see very, very strong momentum across the board, regardless of competitors that may come in. And then my thoughts on the HUMIRA tail, again, as I highlighted and Scott highlighted in his remarks, we are seeing a bit of faster erosions as the biosimilar start to play out. And this is of course the third year of the biosimilar event.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

So it's really not too surprising. We also do continue to see the molecule continue to erode. So as we look and we don't have full visibility and we'll be monitoring the 26 access as we go throughout the year. We do expect it to step down again, just makes sense that will be the fourth full year. So we'll have deeper visibility of that tail sometime over the course of the year.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

But as we said before, the real impact of the tail is when HUMIRA does not have a meaningful headwind to our overall growth as a corporation. So, we expect that to start to develop over that 26 time period.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Okay. Thank you, Scott. Operator thank you, Chris. Operator, next question please.

[Operator]

Next, we'll go to the line of Terence Flynn from Morgan Stanley. Please go ahead.

[Terence Flynn, Equity Research Analyst at Morgan Stanley]

Great. Thanks so much. Congrats on the quarter. And maybe two questions for me as well. You alluded to tariffs potentially.

[Terence Flynn, Equity Research Analyst at Morgan Stanley]

Can you just elaborate a little bit more there in terms of what that means for maybe inventory and then any contemplation on any changes to IP domiciling? And the second question I had is on the your Amylin program there. I know you talked a little bit about next steps, but was just wondering if you can elaborate in terms of how much higher you're going on doses, what you'd expect that to translate to in efficacy and maybe the size of those cohorts, like how many more patients will we get in this next update? Thank you.

[Robert Michael, CEO at AbbVie]

Thanks, Terrence. This is Rob. So Scott and I will handle your first question and Rupe will handle your second question. So just to, I think, back up and maybe talk about AbbVie's manufacturing network and then I can mention how we're thinking about potential mitigation. I think it's important to know that we have a broad footprint that allows us to assure supply for our patients around the world.

[Robert Michael, CEO at AbbVie]

That's really why you've been able to see us avoid supply disruptions during events like the COVID pandemic. And today, we have a robust U. S. Manufacturing network with more than 6,000 American workers across 11 sites. As I mentioned in my remarks, that includes manufacturing of API, biologics, toxins and small molecules.

[Robert Michael, CEO at AbbVie]

For example, our largest product SKYRIZI is made in The U. S. For the domestic market. And given our expected volume growth and our expansion into areas like obesity, As I mentioned, we'll continue increasing our U. S.

[Robert Michael, CEO at AbbVie]

Footprint with over $10,000,000,000 in planned capital investment during the next decade. In terms of potential mitigation, in the near term, we could take inventory management actions or secure alternate sources of API. We could also look at cost efficiencies and productivity initiatives as a source of mitigation, which we always do. I think what's more challenging is trying to pass the tariff impacts to our customers, especially with penalties in the government channel and with existing contracts in the commercial setting. So I don't see that as a viable source for mitigation.

[Robert Michael, CEO at AbbVie]

Longer term, we will add more U. S. Manufacturing capacity, which is part of the planned capital investment of over $10,000,000,000 So specific to 2025, we would look to mitigate the impact as much as possible with a combination of supply chain actions, cost efficiencies and any additional overperformance from our growth platform. But in the meantime, we have enough confidence in the momentum of our business to raise our guidance this year, which should be viewed as a positive.

[Scott Reents, Executive VP & CFO at AbbVie]

David, with respect to IP, IP has been looked at, I think, when people try to assess the impact of potential tariffs on our sector. IP has been looked at as kind of a proxy as to what that impact might be. Certainly directionally, think that is something that would be somewhat telling. That said, when we look at our profile overall, Rob mentioned the strong U. S.

[Scott Reents, Executive VP & CFO at AbbVie]

Presence that we have, but we don't see our profile suggesting any sort of outsized impact for us as a company. The tax rate is something that you can look at, which is essentially when you think of the bookends of the minimum tax for earnings outside The U. S. For income earned in The U. S, that really kind of aligns with where that IP is structured.

[Scott Reents, Executive VP & CFO at AbbVie]

And that blending of your income produces generally, directionally your tax rate. You see us being relatively in line with our peers, and so that suggests that we have a similar IP profile from an overall perspective. I'd also just quickly point out that sometimes with Allergan, as that was a company that we redomiciled back to The U. S, it was a foreign headquarter company. Call that Allergan was a series of several companies that were put together over a few years and those companies all have significant U.

[Scott Reents, Executive VP & CFO at AbbVie]

S. Presence as well. So Allergan's is not just similar from ours as a whole either. So I think when you think about that IP profile, it's important from a tariff perspective. It's also very important from a tax reform perspective.

[Scott Reents, Executive VP & CFO at AbbVie]

There was a lot of progress made in leveling the playing field for U. S. Companies in 2017 tax reform, that did a lot of good things and really helped invest in The U. S. As well as can create a competitive environment for our companies.

[Scott Reents, Executive VP & CFO at AbbVie]

We see it as an important piece of building upon that tax reform to encourage further and long term, as I mentioned in my remarks, sustainable investment. So I see a tax reform initiative building on 2017 coupled with tariffs as something that will encourage U. S. Manufacturing over the long term and we feel very good about our profile right now.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Hi, it's Rupo and I'll answer the two ninety five question regarding the multiple ascending dose study. Currently, the data you've seen were at one and two milligrams. And we have the opportunity here in this study to go several fold higher than the two milligrams. And we also have the opportunity to go beyond six weeks, namely around twelve weeks before we get into formal Phase 2b, which I would say around next year, which we would go quite a bit longer. The sample size, what you've seen here may be a little bit larger because of the multiple ascending dose format here.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

We'll see larger sample sizes once we get into the formal phase 2b. The other opportunities here are also to look at titration at the one milligram or maybe even lower. We don't see any adverse events beyond suppression of appetite. So there's an opportunity to be able to start low and start titrating up to doses quite a bit higher than two milligrams. But we're open to watch this study and be flexible.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

The other important findings would be around muscle and bone. So those would be other things that will be evaluated. As well as looking at dosing, the half life is around two seventy hours, so that could give us an opportunity to go twice a month and even potentially monthly. So all that will be captured in this data set. We expect to see some data next year and then that will allow us to best design a more formal Phase 2b study.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Terrence. Operator, next question please.

[Operator]

Next we'll go to the line of Carter Gould from Cantor. Please go ahead.

[Carter Gould, MD & Senior Analyst at Cantor Fitzgerald]

Good morning. Thanks for taking the question. Obviously there's been a lot of discussion around drug pricing kind of resurfacing and some rumblings around most favored nation kind of bubbling back to the surface. Wanted to get a sense understanding of your expectations and flexibility, if need be to take actions outside The U. S.

[Carter Gould, MD & Senior Analyst at Cantor Fitzgerald]

And then maybe more of a commercial question as we think about the potential co administration of Bonti and BOTOX. Can you help kind of help frame how you think that would impact the market? Is this something that could just grow the overall pie, move share, etcetera? Any thoughts on that

[Carter Gould, MD & Senior Analyst at Cantor Fitzgerald]

front would be appreciated. Thank you.

[Robert Michael, CEO at AbbVie]

Hey, Carter, it's Rob. I'll take your first question and Jeff will take the second question. I think as we've studied the environment, we are very supportive of a balanced approach that addresses affordability while also encouraging innovation. And you've seen many of our peers reinforcing the importance for the EU to properly value innovation, which we echo and would support any policies that encourage that outcome. That said, we hope the administration contemplates the harm that international reference pricing could have on The U.

[Robert Michael, CEO at AbbVie]

S. Healthcare industry and future innovation. I think anything like price controls, cost increases or higher taxes just leaves less investment available across the industry to advance new innovative medicines. That said, I'm very encouraged by the administration's willingness to address the pill penalty in the IRA and as fixing that would support long term innovation in our industry. And so as we look at the push, I think, for the EU to more properly value the innovation is an absolute appropriate push.

[Robert Michael, CEO at AbbVie]

We're encouraged by some of the policies that really support innovation. Scott also talked about tax reform, and I think that's an important lever as well as we think about what are the things that will drive investment in The U. S. And drive more innovation. And I think if you just look at AbbVie as an example, we've invested over $5,000,000,000 of capital since tax reform in 2017.

[Robert Michael, CEO at AbbVie]

I mean, that includes a new oncology research center in South San Francisco that includes SKYRIZI manufacturing capabilities in The US, eye care capacity expansion in Waco, Texas and technology infrastructure upgrades across our footprint, just to name a few. And importantly, as Scott mentioned, tax reform allowed us to acquire Allergan, an Irish domicile company that we then re domiciled into The U. S. I mean that transaction enabled AbbVie to continue increasing our R and D investment through the HUMIRA LOE which is unprecedented. That will ultimately that will help us really lead to more innovation in our pipeline and ultimately impact patients of the future.

[Robert Michael, CEO at AbbVie]

So when we think about policy, we think tax reform has provided the right incentives to invest more in The US and more in innovation, and that's what we would encourage.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Yeah, and thank you for the question. So let give a quick update on the Bon T and the combination approach in terms of how we're starting to think about it. Obviously, we're super pleased with the recent filing on Bon T. And as we've highlighted before, the short acting toxin will operate on two different levels for us. First, it will stimulate the funnel.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

It will basically be a market stimulator because we know there's lots of considerrs in the marketplace that are just worried about going to a full strength toxin because it lasts for three to four months. So the approachability of a short acting toxin that works in about eight point five hours and is gone in two point five weeks makes the market much more approachable for the people in the consideration phase. So we think it's going to work on the market and our share because obviously we've done studies with BOTOX after BONTEA. Now in the combination use, Carter, it's very interesting. This is more of a pure sort of share play.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

When we talk to the consumers, many of the consumers are using a lot of Botox and you start saying, can you imagine Botox that works almost immediately, so an immediate acting Botox. That gives us the potential and we'll have to see how those trials and those studies play out to actually restate the whole market. Because what's remarkable about Bonte is that we can see a two grade change in the glabellar lines in 8.5. So nothing has ever worked even close to that fast. So we could even have a premium toxin that sits alongside Botox one day or a replacement product for just simply a better Botox, an immediate acting Botox.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

So it gives us a lot of flexibility and it's certainly very exciting as Rupel has highlighted the program that will begin here for the combination.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Carter. Operator, next question please.

[Operator]

Next we'll go to the line of Courtney Breen from Bernstein. Please go ahead.

[Courtney Breen, Senior Research Analyst at Bernstein]

Hi all, thanks for taking the question today. I wanted to loop back to kind of part of the inventory and tariffs conversation. We've been able to get some explicit answers from some of the peer companies. So just wanted to see if you were able to give us context as to whether you have enough inventory in The U. S.

[Courtney Breen, Senior Research Analyst at Bernstein]

To support products like RINVOQ, Botox, Vraylar, Humira for the rest of this year? And what about 'twenty six and 'twenty seven? And then the second question is just on the back of the prior Bonte question. Can you give us a little bit of context as to the pricing strategy for that kind of tester market? Because arguably, kind of with a shorter directing time horizon you have kind of less value.

[Courtney Breen, Senior Research Analyst at Bernstein]

And so I'd love to see, understand a little bit more about how you're thinking about placing these products together. Thank you.

[Robert Michael, CEO at AbbVie]

This is Rob. I'll take your first question and Jeff will take the second. Look, absent policy details, we're not going to get into speculating on the impact. I think you've known us to be a company that, once we have a full understanding, we're very transparent and detailed if you think about how we approach the Part D benefit redesign. As soon as we understood that impact, we were well in advance of the implementation of that, discussing the impact on the company.

[Robert Michael, CEO at AbbVie]

But with tariffs, we don't have the policy details for the sectoral tariffs. It's premature to speculate on the impact. Once we have that information, we'll communicate at the appropriate time.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

And regarding the pricing, obviously, we just had the filing, it's premature. We go through a very rigorous pricing analysis as we would get closer to launch. And some of the considerations that we would look for, which is obviously as I mentioned, the rotation of even more patients into the aesthetic practices brings a lot of value practices. And if you think about it, the lifetime value of those new patients is very meaningful. So that could play into dynamics ultimately how we price the Bunty once we ultimately make that decision sometime next year.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Obviously, it does work shorter, so that might imply a different or lower price point to start the trial. But those are all considerations commercially that we will go through as we go through our launch readiness process over the course of the year to really optimize the impact of that product as we bring it to the market.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Courtney. Operator, next question please.

[Operator]

Next, we'll go to the line of Mohit Bansal from Wells Fargo. Please go ahead.

[Mohit Bansal, Managing Director at Wells Fargo Securities]

Okay, thank you very much for taking my question. Congrats on all the progress. I would love to understand a little bit more about your thought process around GUPRAZANELIN. And there have been a couple of strategies. So, course, Novo is trying to combine GLP-one, but then there's a strategy or thought process that Amlan could be a good agent as a standalone agent.

[Mohit Bansal, Managing Director at Wells Fargo Securities]

So how are you thinking about this, especially with the longer acting version? Do you think there's a strategy to just use this as a single agent, especially among patients who cannot tolerate GLP-one? Would love to get your thoughts there. Thank you.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Hey, Mohit, it's Rupol. I'll take that. So thanks for highlighting some of the potential here, and I think we're thinking about it quite broadly. So as you stated, there's an opportunity here as a monotherapy. I think the way we think about it is tolerability is key.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

We see a number of dropouts, upwards of thirty percent even after a month of starting with the current set of assets. And then when we look over the course of the year, sixty percent to seventy percent of the patients will drop. Now there's a variety of factors that drive that discontinuation, but a key component is tolerability. So to have a monotherapy that's tolerable, that provides meaningful weight loss, and potentially has other potential benefits. We've seen pre clinically preservation of muscle.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

We'll have to see if that plays out. But that could be another benefit in the long term. When this launches, we do anticipate many of the patients will have already been on assets that are available today. So it could serve as a nice follow on for folks that couldn't tolerate or came off for other reasons and want to go somewhere else. Now in terms of combinations, recall when we did this deal, one thing we liked about it was also the neutral pH of the formulation.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

So that could enable combinations with a variety of mechanisms. And as Rob stated, we are continuing to be interested in this space and we'll be thinking about other potential opportunities which could include combinations that may drive, further weight loss. But key for us would be tolerability and durability of use.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Mohit. Operator, next question please.

[Operator]

Next we'll go to the line of Steve Scala from TD Cowen. Please go ahead.

[Steve Scala, Pharmaceutical Analyst at TD Cowen]

Thank you so much. Two questions. First of all, Bristol appears to think there's a path forward with Cobenfi in adjuvant schizophrenia based on existing data. Where does AbbVie stand in its analysis of the future of miraclodine? For instance, has a path forward become more clear in the last few months?

[Steve Scala, Pharmaceutical Analyst at TD Cowen]

Secondly, I believe AbbVie has more plants in Ireland than any other company. Curious how you think about that as well as your overall OUS footprint. Do you cut back OUS to invest in The US? Or do you maintain the present OUS given the fact that in four years we could have a different administration with very different views? And related to this topic, yesterday Roche said that their US plants are 50% utilized.

[Steve Scala, Pharmaceutical Analyst at TD Cowen]

I'm wondering if AbbVie would share a similar percentage. Thank you.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Hey, it's Rupl. I'll start with the schizophrenia questions. In terms of the recent data, it's difficult for us to comment.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

I think that'll be a discussion between the company and health authorities regarding the utility of a failed study. That would be their discussion to have. How we look at miraclotide is that we do still see potential and we want to approach this in a stepwise manner. The first step would be, to look to see if we can further dose escalate beyond what was previously studied. We saw, variable PK levels in those patients from the pivotal studies.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Some were low and we think there's an opportunity to raise that. So a multiple ascending dose study will be initiated this year and that would apply to potentially monotherapy in schizophrenia as well as the adjunctive setting. So as that data rolls out and if we're able to utilize a higher dose, then we would again stepwise go forward into a phase two setting to further de risk and apply our learnings in terms of trial design. And then if we see strong data there, which could be as a monotherapy, could be as an adjunct, and also in neurodegeneration psychosis, then we would move into the phase three setting. But I would say we still believe there's opportunity here.

[Robert Michael, CEO at AbbVie]

And then Steve, this is Rob. I'll take your question on, the manufacturing footprint. As I mentioned in my remarks earlier, obviously at AbbVie, we have a very broad footprint. An important part of the strategy is to assure supply and as I mentioned earlier, we went through a global pandemic without any supply disruptions and that strategy certainly paid off. We also have, I'd say, a very robust manufacturing network in The U.

[Robert Michael, CEO at AbbVie]

S. I think what's been widely misunderstood is as an example, our largest product is made in The US. And so, when we look at our global footprint, we consider Assurance of Supply. As Scott mentioned earlier, clearly, obviously, tax has an influence on longer term, how you'd want to structure your supply chain. So certainly, I think with a more competitive tax policy, that sort of provide the appropriate incentives.

[Robert Michael, CEO at AbbVie]

We try to say we have obviously been ramping our volume considerably. You look at just the performance, just then think about biologics capacity and just the tremendous ramps we've seen for SKYRIZI and RINVOQ. And so we stay ahead of the curve. We ensure that we are investing appropriately so we can keep up with that demand. I'd say the commercial team puts a lot of pressure on operations because they're performing so well, but operations stays ahead of the curve and invest appropriately.

[Robert Michael, CEO at AbbVie]

And so when we look at the investment, when I mentioned the greater than $10,000,000,000 investment, that takes into account in The U. S, that takes into account our volume growth that we expect in addition to new areas that we will invest. For example, peptide manufacturing, as an example, as we enter that space, obviously now as we enter into obesity, it makes sense to add that capability. And so that will also be, part of our supply chain strategy here. So that's the way we're thinking about it.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

All right, thanks, Steve. Operator, next question please.

[Operator]

Next we'll go to the line of Dave Risinger from Leerink Partners. Please go ahead.

[David Risinger, Senior Managing Director, Biopharma at Leerink Partners]

Thanks very much, and congrats on the performance. So I have two questions please. And they're both a bit high level. So the first is the industry is facing three major US government risks, actions that are harming biopharma innovation, significant FDA disruption and questioning of proven medical science, tariff threats and also the Trump administration's agenda to take prices down more than the Biden administration took down drug prices. So considering what appears to be a lack of appreciation in Washington of the benefits that the biopharmaceutical industry brings to Americans, can you please comment on how your executive team and board are engaging differently today with Washington leadership to change the political agenda for the better?

[David Risinger, Senior Managing Director, Biopharma at Leerink Partners]

And then second, the press release mentions that guidance doesn't reflect any trade policy shifts, including pharmaceutical sector tariffs. Can you describe the potential trade policy shifts that you're considering or thinking of beyond tariffs? Thank you.

[Robert Michael, CEO at AbbVie]

David, I'll take the first question. Rupli, you can certainly add on as it relates to FDA. And then Scott, you can take that last question. So we're obviously not a member of pharma today, Abi, but we continue to communicate with the association really to seek alignment on the most critical issues for the industry. Now, AbbVie has a large government affairs organization that engages with lawmakers and the administration on our top policy priorities and that includes tax reform, we've talked about that quite a bit today, IRA, 340B, and patient affordability in Medicare.

[Robert Michael, CEO at AbbVie]

And we have actually seen some positive results from that engagement. I mean, just this week, Congress released a report on 340B which included a recommendation that changed the law to more clearly define a patient, which should help address the abuse that is occurring with this program. I would also view the 340B policies in the latest executive order as a positive. I also, previously mentioned that seeking to eliminate the pill penalty, is a positive, for innovation. So we will continue to work with lawmakers as we always have on policies that support a healthy US Biopharma industry, continued innovation and patient affordability.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Hi, it's Rupol. Regarding, FDA interactions, I would say our teams have been in active discussions with the FDA on multiple programs across therapeutic areas, sometimes daily interactions, and no signals of a slowdown. We are monitoring the situation closely. However, thus far, we haven't experienced any delays to our timelines.

[Scott Reents, Executive VP & CFO at AbbVie]

And it's Scott. Just with respect to your question on my initial comments, it's just the trade policy shift we're talking about here is the pharmaceutical sector tariff or the potential pharmaceutical sector tariffs. It's not any additional things that we were contemplating. Certainly, environment has some uncertainty out there, but specific to that comment, we were speaking of the pharmaceutical sector tariffs.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, David. Thank you. Operator, next question, please.

[Operator]

Next, we'll go to the line of Vamil Divan from Guggenheim Securities. Please go ahead.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Great. Thanks for taking my questions. Congrats on the quarter. And don't think you've addressed these. Sorry if I missed some of this.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

But one on the tariff discussion, I was curious about the aesthetic side. I know that pharmaceutical products are excluded from the current tariffs, but I thought products like your breast implant and Juvederm may be included right now. So curious if that's the case or not. And if it is, then why wouldn't there be some accounting for that in your new guidance? Maybe you just absorb it within your guidance?

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Any impact there? And second is just on the aesthetics side. Appreciate macro issues and all the macroeconomic pressures. But I'm just curious if you can comment on the market share dynamics. And is there any sort of share shifts that you're seeing, either in toxins or fillers, that may be impacting things beyond the macro component?

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Thanks.

[Scott Reents, Executive VP & CFO at AbbVie]

Thanks, Famil, it's Scott. You are right, it's a great question regarding the current tariff rules that are in place. So in general, pharmaceutical products and our products are exempt from those similar to our peers. However, there's a couple exceptions to that, and then specific to aesthetics, yes, there are some application of the rules to aesthetics, but we have absorbed the aesthetics impact in the guidance, and I would tell you it's modest. It's something approximately $30,000,000 So it's something fairly modest in the current rules and that is something that we have absorbed.

[Scott Reents, Executive VP & CFO at AbbVie]

So all of the guidance that I gave and reaffirmed today from the margin profiles and otherwise includes us absorbing that.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

And Vamil, it's Jeff. So I'll go over your market share, give you some flavor on that and I'll focus on our two big markets, The U. S. And China. So as I mentioned, we were right on our guidance, right on our forecast for the first quarter.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Remember, biggest impact there was the price because we reversed the Alley redesign from last year. And so when we looked at basically what happened from the third quarter to the first fourth quarter to the first quarter, we know we took a market share hit in toxins in that fourth quarter. The good news is we've seen a complete re engagement in the basically the old Alley program with all of our accounts. So, things are quite stable and we actually had a one market share point gain back from where we were. Now we still have to gain some more share over the course of the year to come back to where we were pre the change to Ali.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

So we have lost year over year some share in toxins. In The U. S. In filler, our share is very, very stable. We did not see a significant share impact on the filler side of the business.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

It's just been sort of a double digit market pressure there. Now in China, I'm quite pleased with the share performance. We've recently had a couple of significant approvals sequentially. We have the masseter approval for BOTOX, which is sort of in the lower face and jawline and also VOLOX, which is in Juvederm. So we've actually seen significant positive momentum in BOTOX share in China as well as positive share in filler.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

So it's a little variable across the board. Our big push will be to recover that share over the course of the year in The U. S. Toxin space. Hope that helps.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Vamil. Operator, next question please.

[Operator]

Next we'll go to the line of Alexandria Hammond from Wolfe Research. Please go ahead.

[Alexandria Hammond, Director, Head of Therapeutics at Wolfe Research LLC]

Thanks for taking the question and congrats on the quarter. So SKYRIZI and RINVOQ have consistently surpassed expectations, but we've been getting some questions on what might drive long term growth in I and I as it relates to these assets. Could you comment on when we should start seeing results from your SKYRIZI and RINVOQ combination trials? And as a follow-up, what combination are you most excited about from a mechanistic perspective? Thank you.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Hi, it's Rupal. I'll start on the SKYRIZI question and the combinations. So the studies have initiated and we would anticipate next year starting to see early data readouts. And I would say we're excited about several of these mechanisms. We've utilized quite a bit of data that we've already collected to see what could be, the best combination.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

And ultimately clinical data will guide that path. But we use biopsy data, the team has applied machine learning, to these datasets, spatial omics, a variety of different techniques. And the ones that we like are one, the alpha-four beta-seven combination. We think that could be a good combination. We like lutekizumab, which is a bispecific to anti and importantly, IL-one beta.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

We see that overexpression in patients with IBD that have failed, other advanced therapies. We see something similar, for TREM1 which would be another potential combination. And then as I mentioned, we also have an agent designed to be longer acting TL1A that could also be a very good fit with IL-twenty three like SKYRIZI. The other thing we'll be doing since I mentioned a variety of different combinations is also capturing a number of biomarkers to see if there's any potential for pretreatment segmentation in the future, consistent with what we do in oncology. Thus far, no real successes.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

Would say maybe there's hints in TL1A. But we're gonna generate that data as well to see if there's opportunities to be able to use biomarkers in the future to segment these patients.

[Scott Reents, Executive VP & CFO at AbbVie]

And maybe, Alexander, I might add, when we look at SKYRIZI and RINVOQ, certainly we're very pleased with the strong demand in the quarter and that led to us taking a combined $900,000,000 of increased guidance for the year. We've also given the long term guidance in 2027, which we feel continue to feel very confident in. And also, think it's worthwhile to think about RINVOQAS will have a second wave of indications towards the end of the decade. They'll add a couple of billion dollars of sales. And we really see these two products even before the combination that Rupl spoke about as having a long runway for at least the next eight years and we feel very good about that from that perspective.

[Robert Michael, CEO at AbbVie]

And this is Rob. I'll just add on to that. I think strategically, we look at the company and we have this clear runway to growth for at least the next eight years. We can use that time and obviously we're looking to elevate the standard of care for immunology patients. We think these combination studies are a way to accomplish that.

[Robert Michael, CEO at AbbVie]

But we're gonna use that time to, just as we did with Humira, we came up with SKYRIZI and RINVOQ as a way to elevate the standard of care and that was the second, that really launched into a second chapter of the company. The third chapter is going to be, as you think about the growth beyond SKYRIZI and RINVOQ, and we have the time and we're investing appropriately to identify what those drivers will be within immunology and outside of We have five key growth areas that we're very confident can drive growth, but obviously you've now seen us enter the obesity space as we think about, more sources of growth and we think that's also an opportunity. So we think the company is very well positioned to grow very nicely for at least the next eight years and then use that time and the investment that's available to grow beyond that.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Alexandria. Operator, next question please.

[Operator]

Next, we'll go to the line of James Shin from Deutsche Bank. Please go ahead.

[James Shin, Director of Biopharma Equity Research at Deutsche Bank]

Hey, guys. Good morning. Thank you for the question. I had a question on current immunology pricevolume dynamics. Specifically, is the low single digit headwind being realized?

[James Shin, Director of Biopharma Equity Research at Deutsche Bank]

If so, is it somehow being blended where Humira is seeing outsized headwinds, while Sky and RINVOQ are seeing tailwinds? Or is there some sort of co pay shift or is there a shift in co pay utilization over year over year or sequentially? Thank you.

[Scott Reents, Executive VP & CFO at AbbVie]

James, it's Scott. So I think I'll start with SKYRIZI and RINVOQ. If you look at the first quarter, those were both driven by strong demand. Now we've talked about pricing being slightly negative for those two products on full year basis. We did see a little bit of favorable price in the quarter and that's just a gating issue.

[Scott Reents, Executive VP & CFO at AbbVie]

So in the quarter, probably two things. One, Jess organization continues to do a very good job of focusing on co pay utilization and effectively managing that. We saw a little bit of benefit from co pay utilization. And then in addition, we had anticipated some channel mix changes later in the year, but those actually came to fruition a little bit earlier than we thought. And so those factors, I would say, along with some other gating issues combined to being price favorability, but we still anticipate negative pricing headwinds on a full year basis.

[Scott Reents, Executive VP & CFO at AbbVie]

With respect to HUMIRA, we talked about in the quarter and on the full year that there is a decrease in volume associated with share erosion as well as the compression of the overall molecule. So that volume is going continue. I think you'll see that volume a little bit more pronounced throughout the year, but there certainly continues to be some price. You've got some unwinds of accruals that cause price impacts, but you also have just the changing of the rebating dynamics as we entered into a new contract year.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, James. Operator, next question please.

[Operator]

Next we'll go to the line of Geoff Meacham from Citibank. Please go ahead.

[Geoff Meacham, Managing Director at Citi]

Hey guys, thanks for the question. Rob, had another one on policy. I wanted to get your perspective on PBM reform, which is often mentioned as highly likely to happen this year. What would you say are the main elements that you'd want to see in reform? And the second one on BD, is there a therapeutic area that you guys feel like you still have to add to?

[Geoff Meacham, Managing Director at Citi]

I wasn't sure if neuro remains one of the top priorities just post emeraclidine and it does seem like multiple shots on goal in metabolic disease is kind of the approach a lot of other biopharmers are taking, but I wanted to get your perspective. Thank you.

[Robert Michael, CEO at AbbVie]

Jeff, I'll take those questions. So on PBM reform, I think we're supportive of anything that helps with patient affordability. And so to the extent that that improves the dynamic on patient affordability, that that is truly realized in their pockets, that's favorable. So we are supportive the efforts there, but it's really all about making sure that we're addressing patient affordability. As it relates to business development, we obviously really like the five key growth areas that we have today.

[Robert Michael, CEO at AbbVie]

As I mentioned, those will certainly drive very strong growth for at least the next eight years. I think sometimes there's a misconception about neuroscience for AbbVie. It's more than just psychiatry. We have a very strong migraine franchise that's performing exceptionally well. In Parkinson's, we're seeing great results.

[Robert Michael, CEO at AbbVie]

And we've been in Parkinson's for a long time with Duopa. But as you think about the ramps we're seeing with BioLev, the innovation we've brought those patients and then Tivapadon, came from Cerevul, we could really start to see, our Parkinson's franchise emerge. And so when I think about neuroscience, I would think about it really in four segments. There's psychiatry, it's an important segment. There's migraine, there's Parkinson's and there's all other neurodegeneration.

[Robert Michael, CEO at AbbVie]

And we obviously are investing in Alzheimer's. And so you just look at the business development activity, since the beginning of last year in neuroscience, extended our discovery collaboration in psychiatry with Gideon Richter who discovered RAYLAR. You know, we added a novel mechanism for mood disorders with Gilgamesh. We acquired a next generation A beta antibody that's very promising for Alzheimer's from Aliata and we're also investing in novel approaches for migraine disease. So we are actively investing in neuroscience.

[Robert Michael, CEO at AbbVie]

We obviously, you know, added obesity because we do think of ourselves as being a company that's going be very large in the next decade. So it doesn't hurt to have another source of growth and we have evaluated various options beyond the five and we chose to move into obesity for a number of reasons. It's obviously an extremely attractive market, has high prevalence and plenty of headroom for growth. It's a market that has ample space for multiple players and new entrants and I think we're also uniquely positioned with our aesthetics business to access that channel in addition to therapeutics. And importantly, and it's something we always focus on, is where are there high areas of unmet need?

[Robert Michael, CEO at AbbVie]

As we think about our portfolio, that's really our strategy, is to drive a remarkable impact for our patients by elevating standard of care. When we look at obesity, there's plenty of opportunity, whether it's reducing GI side effects, improving body composition, more consistent weight loss across patient types, longer lasting weight loss. And so as we evaluate that opportunity, we found the amylin class to be very attractive given it's the most validated non GLP-one mechanism for obesity and has very encouraging early data. And we believe the amylin opportunity with GUBRA has the potential to deliver a differentiated asset. So we will continue investing in obesity.

[Robert Michael, CEO at AbbVie]

We'll continue investing in our five key growth areas. And we think that gives us, the right mix to drive growth for long term.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Jeff. Operator, next question, please.

[Operator]

Next, we'll go to the line of Tim Anderson from Bank of America. Please go ahead.

[Tim Anderson, Managing Director, Senior Equity Research Analyst at Bank of America]

Thank you. I have a question on drug, advertising. So AbbVie is the number one spender on this. It's hard to turn on TV without seeing something like a RISI ad. And that says you see a very positive ROI from that level of spending.

[Tim Anderson, Managing Director, Senior Equity Research Analyst at Bank of America]

As you know, there's been occasional talk by the administration about limiting such advertising. So my question is, do you think there's any basis in reality for that? I know you'll say it shouldn't happen, but that doesn't mean that it won't potentially happen. But then on obesity, as you noted, your amylin is long acting. Doesn't that imply that a really kind of key next part of the portfolio is a long acting GLP, or are you not interested in the GLP-one space at all?

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Yes, thanks Tim, it's Jeff. And you're right, it's difficult to know if DTC reform would take place or what it might look like. I think you're right, we're very supportive of the First Amendment rights to be able to advertise. And obviously, we work with the FDA on every single claim that we make on television. If there were to be a change, we would be able to pivot.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

I mean, we could shift our investment to disease awareness that could help us drive because we have such leading in place share to continue to basically invest in the right way to consumers. We certainly could move to other channels because it's not really clear if it would just be mass media or etcetera. So certainly, the whole market would take a step back if that were to happen and our brands would still be very, very competitive in terms of our ability to pivot and toggle were that to happen. So difficult to predict, but we would be of course planning for any of those contingencies were they to take place.

[Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer at AbbVie]

And Tim, it's Rupel regarding different mechanisms. So as stated previously, we think there's opportunity as a monotherapy and also as a potential combination. I would say we haven't ruled out any particular mechanism that we would combine with. The other thing to mention, I think I already stated this, but we do have a neutral pH in the current formulation for two ninety five, so that potentially makes it more amenable to combinations. But mechanisms that you mentioned and potentially others, I would say, are on the table for us.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Tim. Operator, next question please.

[Operator]

Next we'll go to the line of Chung Nguyen from UBS. Please go ahead.

[Trung Huynh, Executive Director - Equity Research at UBS Group]

Great, thanks. I've got two questions if I can. So first, just very quickly, you did touch on the pricing dynamics with SKYRIZI and RINVOQ. But did the strong performance include any notable onetime contributions, inventory build or pull forward effects? And then second, similar to Vamil's aesthetics question, but China reciprocal tariffs have been enacted.

[Trung Huynh, Executive Director - Equity Research at UBS Group]

Is that contemplated in your guide? And is that material to your aesthetics business? And then just I know it's early days, but are you seeing any shifts in demand there? Thank you.

[Scott Reents, Executive VP & CFO at AbbVie]

Sung, it's Scott. I'll answer your questions. Thanks for the questions. So with respect to SKYRIZI and RINVOQ, I would say the one item that I would point to, again, was strong demand overall. The one thing that also helped the growth in the quarter was with respect to the retailer destocking.

[Scott Reents, Executive VP & CFO at AbbVie]

So in the past, we've talked about there's some retail inventory buildup as a form of price speculation in the fourth quarter. I talked about in the fourth quarter call that we didn't see a lot of that. And then that was, again, confirmed we did not see unwind like there has been in prior years. So there was a year over year benefit from the lack of destocking from the retail buildup in the first quarter. But again, that was fairly modest.

[Scott Reents, Executive VP & CFO at AbbVie]

When we talk about our overall growth globally, 72% operationally, The demand was really in the 60s and so you just saw a small portion from that retail destocking. With respect to the China tariff, yes, you're right. There is some impact for aesthetics in those products and those numbers. But again, that impact is fairly modest. We've contemplated that in our guidance.

[Scott Reents, Executive VP & CFO at AbbVie]

And so I would say overall, the existing tariffs, you're talking about $30,000,000 approximately globally and a decent component of that is with respect to the aesthetics business. And then maybe, I don't know if Jeff would like to comment on, I think you'd ask if there's if we've seen demand changes in China?

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

No, we haven't over the last thirty days. I mean, obviously, things are things change quickly, but as I mentioned, if we look at the quarter, we've been encouraged by the share growth we've seen in China based on the recent approvals for both the toxin and the filler category.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Chong. Operator, we have time for one final question.

[Operator]

And for our final question, we'll go to the line of Evan Seigerman from BMO Capital Markets. Please go ahead.

[Conor MacKay, Equity Research Senior Associate at BMO Capital Markets]

Hi there. This is Connor McKay on for Evan. Thanks for taking our question, and congrats on a great quarter.

[Conor MacKay, Equity Research Senior Associate at BMO Capital Markets]

BIOLEV and Ella here were two products that outside of

[Conor MacKay, Equity Research Senior Associate at BMO Capital Markets]

your I and I business came in sort of meaningfully ahead of analyst expectations. Can you maybe walk us through what's driving the strength for each of those? Thank you.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Yes, maybe I'll start on your question and thank you for that. So certainly, as I mentioned in the prepared remark and Rob as well, Vylev is emerging as a very, very important product and we communicated certainly that it could continue to exceed expectations.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

So, it's quite remarkable. We continue to see strong uptake in Japan, across Europe. And while we're only in the commercial market, is about 30% of the market in The U. S, because we're still waiting on the full Medicare reimbursement, the market feedback is exceptional. I mean, this is a really amazing product to help patients sleep through the night, control the movement disorders.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

It's unlike DUOPA, lasts for twenty four hours. It's a more simple subcu injection versus surgery that you might get. So it's playing out exactly as we had hoped and so you're just seeing some strength of that in the quarter. And that's also why we remarked that we're excited to bring tovapadon, which is also showing some very nice data here and we're getting ready for the file to start to really build out a more meaningful Parkinson's category. And then Elijure, we continue to see nice uptake, very unique product.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

Obviously, it's got a 30% approval in overall survival. It's well tolerated, non chemo. So The U. S. Business continues to perform very well.

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

And we are starting to see the international launches. We've pulled forward significant international launches from the time that we had done the deal with Immunogen and we're going to start to see those international launches ramp here over the next several quarters. So that gives some sense over that brand

[Jeffrey Stewart, Executive VP & Chief Commercial Officer at AbbVie]

as well.

[Robert Michael, CEO at AbbVie]

Colin, this is Rob. I'm glad you asked a question about Eli here because oncology doesn't get enough attention for the company. Eli here came to us through the Immunogen acquisition. It was a very successful acquisition.

[Robert Michael, CEO at AbbVie]

It basically combined their ADC capabilities with ours and now you're starting to see the AbbVie internally discovered ADCs emerge. We've talked about Taliso V. We're very excited about tmAbA-seven zero six. You think about long term growth drivers for AbbVie, oncology with that emerging pipeline. And Rupl and I both mentioned, March, the bispecific for multiple myeloma.

[Robert Michael, CEO at AbbVie]

We have, I think, a very exciting emerging oncology pipeline that could be an important growth driver for the company. So I appreciate the specific question about Ella here.

[Elizabeth Shea, SVP, Investor Relations at AbbVie]

Thanks, Colin, and that concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors.abby.com. Thanks again for joining us.

[Operator]

Thank you all for joining the AbbVie first Quarter twenty twenty five Earnings Conference Call. That concludes today's conference. Please disconnect at this time, and we hope you have a wonderful rest of your day.

Participants

Executives

• Elizabeth Shea, SVP, Investor Relations
• Robert Michael, CEO
• Jeffrey Stewart, Executive VP & Chief Commercial Officer
• Roopal Thakkar, Executive VP of Research and Development & Chief Scientific Officer
• Scott Reents, Executive VP & CFO

Analysts

• Chris Schott, Managing Director at JP Morgan
• Terence Flynn, Equity Research Analyst at Morgan Stanley
• Carter Gould, MD & Senior Analyst at Cantor Fitzgerald
• Courtney Breen, Senior Research Analyst at Bernstein
• Mohit Bansal, Managing Director at Wells Fargo Securities
• Steve Scala, Pharmaceutical Analyst at TD Cowen
• David Risinger, Senior Managing Director, Biopharma at Leerink Partners
• Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC
• Alexandria Hammond, Director, Head of Therapeutics at Wolfe Research LLC
• James Shin, Director of Biopharma Equity Research at Deutsche Bank
• Geoff Meacham, Managing Director at Citi
• Tim Anderson, Managing Director, Senior Equity Research Analyst at Bank of America
• Trung Huynh, Executive Director - Equity Research at UBS Group
• Conor MacKay, Equity Research Senior Associate at BMO Capital Markets