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AbbVie Q2 2023 Earnings Call Transcript


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Participants

Corporate Executives

  • Elizabeth Shea
    Senior Vice President, Investor Relations
  • Richard A. Gonzalez
    Chairman of the Board and Chief Executive Officer
  • Robert A. Michael
    President and Chief Operating Officer
  • Jeffrey R. Stewart
    Executive Vice President, Chief Commercial Officer
  • Carrie C. Strom
    Senior Vice President, AbbVie, and President, Global Allergan Aesthetics
  • Thomas Hudson
    Senior Vice President, Research and Development, Chief Scientific Officer
  • Scott T. Reents
    Executive Vice President, Chief Financial Officer
  • Roopal Thakkar
    Senior Vice President of Development and Regulatory Affairs and Chief Medical Office

Analysts

Presentation

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer; Rob Michael, President and Chief Operating Officer; Jeff Stewart, Executive Vice President and Chief Commercial Officer; Scott Reents, Executive Vice President and Chief Financial Officer; Carrie Strom, Senior Vice President, AbbVie, and President, Global Allergan Aesthetics; and Tom Hudson, Senior Vice President, R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call is Roopal Thakkar, Senior Vice President, Development and Regulatory Affairs, and Chief Medical Officer.

Before we get started, I'll note that some statements we make today maybe 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. 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 and 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 now turn the call over to Rick.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Thank you, Liz. Good morning, everyone, and thank you for joining us today. 2023 is an important year for AbbVie as we experienced Humira biosimilar competition in the U.S. market and as we execute our long-term diversification growth strategy. Now roughly seven months into the year, I'm extremely pleased with the progress that we're making against these objectives. The U.S. Humira biosimilar impact is playing out as projected and slightly better than our planning assumptions. We are competing very effectively with the various biosimilar offerings.

We have exceeded our guidance in both first and second quarters, with the overachievement predominantly driven by our growth platform, the base portfolio, excluding Humira, which, as you know, is the critical driver in our rapid return to growth in 2025 and beyond. To that point, this platform demonstrated operational revenue growth of nearly 8% this quarter, with growth expected to further accelerate in the second-half of this year. We were also once again raising our full-year revenue guidance by $1 billion, which is on top of the $400 million sales increase we delivered in the first quarter, for a total overachievement of $1.4 billion. And lastly, we are making good progress with our pipeline across all stages of development, including recent strong data for Skyrizi in ulcerative colitis as well as the recent U.S. approvals for Rinvoq and Crohn's disease and Epkinly in relapsed or refractory DLBCL, both important new therapies for patients.

So, in summary, I'm extremely pleased with the strong momentum and execution across the business. It reinforces our confidence in our ability to return to robust growth in 2025 with high-single-digit compounded growth rate to the end of the decade.

With that, I will turn the call over to Rob for additional comments on our business performance. Rob?

Robert A. Michael
President and Chief Operating Officer at AbbVie

Thank you, Rick. AbbVie delivered excellent results once again this quarter. We are demonstrating strong execution across our business with each of our five key therapeutic areas beating expectations. We reported adjusted earnings per share of $2.91, which is $0.11 above our guidance midpoint. Total net revenues were nearly $13.9 billion, more than $350 million ahead of our guidance, with the vast majority of the beat coming from our ex-Humira growth platform.

In Immunology, Skyrizi and Rinvoq are demonstrating impressive growth, with sales for both therapies up more than 50% versus the prior year. These two agents have achieved differentiated clinical profiles, including head-to-head data versus Humira and other novel therapies. Skyrizi and Rinvoq are now collectively approved across 10 large indications, and we are forecasting combined revenue growth of more than $3.5 billion this year. With ongoing programs in several additional disease areas, we expect both Skyrizi and Rinvoq to deliver robust growth into the next decade and significantly exceed Humira peak revenue.

U.S. Humira is also performing well, with first-half erosion coming in better than our expectations due to volume. We have been carefully analyzing the biosimilar marketplace, where the total number of competitors has now expanded to eight. While many of these biosimilars have been added to payor formularies, Humira continues to maintain strong parity access. Based on the volume trends and parity access, we now anticipate U.S. Humira erosion of approximately 35%, an improvement of 2 points versus our original guidance.

Neuroscience is another area that is outperforming expectations. Based on the current run rate, this portfolio is now on pace to add more than $1 billion of incremental revenue this year, with continued strong growth from Vraylar as well as our leading migraine portfolio. In Aesthetics, the outlook continues to improve. We delivered positive growth this quarter, driven by strong international performance and stabilizing trends in the U.S. These positive trends give us the confidence to once again raise our full-year guidance for Aesthetics. And as the clear market-leader, we are focused on expanding the Aesthetics category with increased commercial investment and continued innovation to support robust long-term growth.

Given the strong and balanced performance across our diverse portfolio, we are raising our full-year adjusted earnings per share guidance by $0.23, and now expect adjusted earnings per share between $10.90 and $11.10.

In closing, our operational execution has been outstanding, and we are very well-positioned to deliver on our commitments in 2023 and beyond.

With that, I will turn the call over to Jeff for additional comments on our commercial highlights. Jeff?

Jeffrey R. Stewart
Executive Vice President, Chief Commercial Officer at AbbVie

Thank you, Rob. I'll start with Immunology, which delivered total revenues of $6.8 billion, exceeding our expectations. Skyrizi continues to perform exceptionally well. Global sales were approximately $1.9 billion, reflecting very strong operational growth of 51%. Our performance in psoriasis continues to be impressive. Total prescription share in the U.S. biologic market is now at 32%, double the share of the next closest biologic therapy. When you consider that Skyrizi is capturing roughly one out of two every in-play patients which are either new to therapy or switching, there remains substantial opportunity for continued robust sales growth. And based on the available clinical data we are seeing from emerging competitive therapies in psoriasis, including orals, we feel very confident in Skyrizi's long-term potential, with robust sales growth expected through the early part of the next decade. We are also seeing very nice prescription growth in psoriatic arthritis, especially in the U.S. dermatology segment, where Skyrizi is approaching the leading new patient biologic market share. Skyrizi's momentum across psoriatic disease is very solid globally as well, with total in-play share leadership in nearly 30 key countries.

Turning now to IBD, where Skyrizi has demonstrated a very compelling clinical profile, including strong endoscopic data paired with convenient dosing. Uptake in Crohn's disease has been rapid, with total in-play patient share of approximately 25% in the U.S., roughly at parity leadership with STELARA. This uptake is very encouraging for Skyrizi's potential in ulcerative colitis, where we recently reported positive maintenance data with approval and commercialization anticipated next year. Given the momentum we're seeing across all of the approved indications, we will be raising our full-year sales outlook for Skyrizi.

Moving now to Rinvoq, which delivered global sales of $918 million, reflecting operational growth of nearly 57%. A key element of Rinvoq success is its strong differentiation. It is now approved across seven distinct indications, including four in rheumatology, two in IBD as well as atopic dermatitis. It's the only potent daily oral medication with compelling head-to-head data against multiple novel therapies, including superiority to Humira in RA and Dupixent in AD. It's the only JAK inhibitor now approved to treat both Crohn's disease and ulcerative colitis, and we have established strong and broad commercial access for each of the core diseases, with formulary coverage for Crohn's expected to ramp quickly over the next months.

As it pertains to Rinvoq performance, we are seeing increasing prescriptions across each of the rheum indications globally, further market share momentum in atopic dermatitis, including now high-teens in-play patient share in the U.S., and robust uptake in IBD, where Rinvoq has demonstrated strong rates of remission and endoscopic improvement. Rinvoq is now capturing roughly one out of every four in-play ulcerative colitis patients in the second-line plus setting. In the early data for Crohn's, which launched just in May, also shows a very strong ramp in new patient starts. We remained well-positioned for continued momentum in this new indication as the only JAK inhibitor approved to treat Crohn's disease. This level of performance, along with the development of ongoing projects across several other diseases, such as giant cell arthritis and systemic lupus in rheumatology and multiple additional derm indications reinforces the long-term potential for Rinvoq with strong sales growth expected through the early part of the next decade.

Global Humira sales were $4 billion, down 24.8% on an operational basis due to biosimilar competition. Erosion in the U.S. remained slightly better than our expectations due to volume, with the vast majority of the impact this quarter driven by price.

Turning now to Hematologic Oncology, where total revenues were approaching $1.5 billion. Imbruvica global revenues were $907 million, down 20.8%, consistent with our expectations. Venclexta global sales were $571 million, up 15% on an operational basis, with strong demand for both CLL and AML. And we were particularly pleased with the international performance here, following continued reimbursement progress in the EU and inclusion in China's national reimbursement list. We also recently received the U.S. approval for Epkinly in third-line plus DLBCL, further expanding our on-market portfolio in hem onc. Early prescription trends have been encouraging, with a more robust opportunity expected as we progress development in earlier lines of therapy. We also anticipate approval and commercialization in Europe and Japan later this year.

In Neuroscience, revenues were nearly $1.9 billion, up 14.2% on an operational basis. Vraylar continues to exceed our expectations. Sales of $658 million were up 33.9% on an operational basis, with increasing momentum across all indications following the MDD approval late last year. Within migraine, we remain the clear market-leader with unique treatment options for both acute and chronic conditions. Our oral CGRP portfolio contributed $292 million in combined sales this quarter, reflecting growth of more than 30% as we continue to see strong prescription demand for both Ubrelvy and Qulipta. Lastly, total Botox Therapeutic sales were $748 million, up 11.3% on an operational basis, reflecting nice momentum in chronic migraine as well as other approved indications. This franchise continues to outperform our expectations and we will be raising our full-year guidance for the collective neuroscience portfolio.

So, overall, I'm extremely pleased with the performance and execution across the therapeutic portfolio, with growth expected to accelerate through the second-half of the year.

And with that, I'll turn the call over to Carrie for additional comments on Aesthetics. Carrie?

Carrie C. Strom
Senior Vice President, AbbVie, and President, Global Allergan Aesthetics at AbbVie

Thank you, Jeff. Second quarter global aesthetic sales were approximately $1.4 billion, up 2.9% on an operational basis, with strong performance from our international portfolio offsetting the economic impact in the U.S. U.S. aesthetic sales were $829 million, down 6.2%. Our U.S. portfolio continues to perform well from a competitive perspective. And as expected, the aesthetics markets continued to be impacted by lower consumer spending related to inflationary pressures, which weighed on year-over-year growth rate.

U.S. Botox Cosmetic sales were $420 million, a decline of 6.5% versus the prior year. While the U.S. cosmetic toxin market declined low-single-digits in the second quarter on a year-over-year basis, growth rates improved through the quarter, with June showing a return to positive year-over-year market growth. Botox cosmetic continues to be the clear market-leader, maintaining strong and stable share, despite new competitive entrants. U.S. Juvederm sales were $125 million, down 14.5% on a year-over-year basis, as we continue to see a more pronounced impact from inflationary dynamics on higher priced more deferrable procedures, such as filler. The U.S. filler market declined approximately 20% in the quarter on a year-over-year basis due to the persistent inflationary environment. Our Juvederm collection remains the market-leader and share was stable in the quarter.

The economic metrics that we track for the U.S. have largely stabilized. Our consumer market research shows a meaningful recovery from last summer, and those intending to get treated with toxins and fillers. Additionally, we have now lapped the beginning of the market downturn, which occurred in the second quarter of last year. Based on these factors, we expect growth rates for the U.S. facial injectables to improve in the second half of this year.

Our international aesthetics portfolio continues to perform exceptionally well with strong results in many key markets. Second quarter sales were $555 million, reflecting operational growth of nearly 20%. International Botox cosmetic sales of $265 million increased approximately 14% on an operational thesis and international Juvederm sales were $243 million, up approximately 28% on an operational basis. Growth in the Asia-Pacific region was particularly robust as esthetic treatment rates in China have fully recovered to pre-COVID levels. We continue to anticipate strong normalized growth through the remainder of the year in China. We are very pleased with the strong performance of our international aesthetics portfolio over the first half of the year and continue to expect similarly strong results in the second half.

In the third quarter, we will be facing a challenging year-over-year comparison due to a shipment timing benefit we saw in the third quarter of 2022. This is expected to result in relatively flat growth for international portfolio in the third quarter. On a full-year basis, we expect our international aesthetic sales to grow high-single-digits. We continue to invest to drive future growth for our Aesthetics portfolio, with a focus on enhanced promotional activities, improve digital products and services through our HEALEY platform, sales force expansion and injector training. We continue to invest in our pipeline as well and we remain committed to our regular cadence of new product introductions and indication expansion for Botox cosmetic and Juvederm.

We recently announced the FDA approval of Skinvive, the first hyaluronic acid filler in the U.S. for improved skin smoothness of the cheeks, which along with the recently launched VOLUX filler for jawline contouring, will help sustain our leadership position in the U.S. filler market. Our investments will allow us to maintain a strong leadership position in the highly underpenetrated and rapidly growing global aesthetics markets. We remain very confident in the long-term outlook for our Aesthetics portfolio and continue to expect to deliver greater than $9 billion in 2029. In the near term, the improving Aesthetics outlook in the U.S. and continued robust international performance gives us confidence to once again raise our full-year Aesthetics guidance with an expectation for continued operational growth over the back-half of the year.

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

Thomas Hudson
Senior Vice President, Research and Development, Chief Scientific Officer at AbbVie

Thank you, Carrie. We've continued to make very good progress with our pipeline over the quarter. We had a substantial amount of activity across our R&D pipeline, resulting in new approvals and advancements of several programs. In Immunology, we received FDA approval for Rinvoq in Crohn's disease, marking its seventh FDA approval across gastroenterology, rheumatology and dermatology. In our Crohn's development program, Rinvoq demonstrated a very rapid and strong impact on symptoms as well as endoscopic improvement. Given its strong benefit-risk profile, we believe Rinvoq will be an important new medicine for patients suffering from moderate to severe Crohn's disease. While Crohn's disease approval marks the completion of the core indications, we believe Rinvoq has the potential to become a highly effective therapy in several additional important diseases.

We recently began Phase 3 studies for Rinvoq in systemic lupus and hidradenitis suppurativa, and we remain on-track to begin Phase 3 studies in alopecia areata later this year. We'll also see data later this year from a Phase 2 study in vitiligo, which could support advancement to Phase 3 in this indication as well.

Moving to Skyrizi, where in the quarter, we announced positive topline results from our Phase 3 maintenance trial in ulcerative colitis. In this study, Skyrizi met the primary and key secondary endpoints at week 52 compared to the withdrawal arm, demonstrating that patients continuing treatment with Skyrizi maintained high levels of clinical remission as well as more stringent endpoints, such as endoscopic improvement, histologic, endoscopic mucosal improvement and steroid-free remission. It's important to note that approximately 75% of the patients in this study had failed advanced therapy, including not only anti-TNFs, but also other biologics, JAK inhibitors and S1P modulators. This represents a very difficult-to-treat population in ulcerative colitis, Skyrizi's strong performance in patients with and without failure to advance therapies, including patients who were naive to advanced therapy demonstrate its utility across the spectrum of moderate-to-severe UC patients. We remain on-track to submit our regulatory applications in the third quarter with approvals anticipated in 2024.

We also recently published results from a head-to-head trial, comparing Skyrizi to Otezla in patients with moderate psoriasis, with Skyrizi demonstrating clear superiority to Otezla on all primary and ranked secondary endpoints at week 16 and 52. At week 52 of the study, 64% of patients achieved absolute skin clearance as measured by PASI 100 and sPGA clear compared to just 3% for Otezla, underscoring Skyrizi's ability to drive very high and durable responses in these moderate patients. In addition to higher clinical efficacy outcomes, the patients treated with Skyrizi, which is a self injectable administered quarterly, reported improvements in health-related quality-of-life measures and greater treatment satisfaction compared to those treated with Otezla, which is an oral administered twice daily.

Additionally Skyrizi demonstrated favorable safety and tolerability compared to Otezla. The rates of adverse events, including serious and severe AEs were numerically higher with Otezla than with Skyrizi treatment. Previous to -- similar to previous studies, Otezla treatment was associated with high rates of a gastrointestinal distress, such as nausea, diarrhea and vomiting, which resulted in a 7% discontinuation rate in the first 16 weeks of treatment compared to no discontinuations for Skyrizi patients. We're incredibly pleased with these results, which further underscores Skyrizi's position as a best-in-category treatment for moderate to severe psoriasis, providing very high efficacy, durable responses, a safe and tolerable profile and convenient quarterly administration.

In Oncology, we received accelerated approval in the U.S. for Epkinly as a monotherapy treatment for patients with relapsed or refractory DLBCL, who had received two or more systemic therapies. We also recently received positive CHMP opinion, with an approval decision in Europe expected later this year. DLBCL is a very aggressive disease, where later-line patients have limited options. We're extremely excited to bring this new subcutaneous treatment option to patients.

In the quarter, we also announced positive topline results from the follicular lymphoma cohort of a Phase 2 trial, evaluating Epkinly in patients who have received at least two prior lines of therapy. In this study, Epkinly performed very well as a monotherapy, demonstrating an overall response rate of 82%. We are pleased with these results and plan to discuss these data with regulatory agencies about the potential to support a submission for accelerated approval. Beyond the mid-stage studies, supporting accelerated approvals in later lines of therapy, we also have Phase 3 trials ongoing in earlier lines of DLBCL and follicular lymphoma and we look forward to providing updates on these programs as the data mature.

In our Navitoclax program, we recently saw topline results from the Phase 3 Transform-1 trial, evaluating Navitoclax in combination with ruxolitinib for patients with treatment naive myelofibrosis. The study met the primary endpoint at week 24, demonstrating a statistically significant improvement in the percentage of patients who achieved spleen volume reduction of at least 35% compared to rux plus placebo. For the primary endpoint, the Navitoclax combination showed the doubling of improvement over rux alone, with 63% of patients on the Navitoclax combination achieving SVR35 compared to 32% in the rux plus placebo combination. In this study, the Navitoclax combination did not achieve the first ranked secondary endpoint, which was improvement in total symptom score at week 24. Additional follow-up data on SVR and TSS, as well as other endpoints, are expected in the fourth quarter of this year. We plan to wait for these more mature data before engaging with regulatory agencies in order to have a more comprehensive picture of the patients' clinical response and clinical benefit that Navitoclax can provide.

Looking to the remainder of this year, we remain on-track for several additional data readouts from our late-stage oncology programs, including Phase 3 data from Venclexta's CANOVA trial in relapsed refractory multiple myeloma patients, with t(11;14) mutation. As a reminder, this is an event-driven study and we're just waiting -- we're waiting for just a handful of remaining events. So, we'd expect to have these data in-house in the coming months. And we remain on-track to see Phase 2 data for Teliso-V in second-line plus advanced non-squamous, non-small cell lung cancer in the fourth quarter.

We're also making very good progress with several earlier line earlier-stage solid tumor programs. We recently initiated a Phase 2 study for ABBV-151, our anti-GARP antibody in hepatocellular carcinoma and plan to begin Phase 2 in several additional solid tumors over the course of the next 12 months. At the recent ASCO Meeting, we presented promising initial results from a Phase 1 study, evaluating our next-generation cMet ADC ABBV-400 in several advanced solid tumor types. We're seeing responses across multiple tumors, indicating broad activity. Results in late-line colorectal patients were particularly encouraging, where monotherapy treatment with 400 resulted in a confirmed overall response rate of 22%, well in excess of standard-of-care, which is typically less than 2% to 3%. We're also encouraged by the durability of response seen in these early results. These patients had an average of five prior lines of therapy. So, this level of efficacy is very encouraging. Based on these results, we plan to start our Phase 2 program later this year, beginning with the second-line colorectal cancer study.

Now moving to Neuroscience, where in the quarter, we received a positive CHMP opinion, recommending approval of atogepant for migraine prevention. We anticipate a decision in the coming months. And if approved, atogepant would be the only oral CGRP antagonist approved in Europe for prevention of both episodic and chronic migraine. This is a debilitating condition that impacts tens of millions of people in Europe and we look forward to making this new oral treatment option available to patients once approved. Also in the area of Neuroscience, ABBV-906, our a-beta antibody for Alzheimer's disease is rapidly advancing through dose-escalation studies. This antibody is demonstrating a long half-life and very low anti-drug antibodies, both important attributes to achieve a best-in-class profile for our a-beta antibody. Dose selection in Phase 2 is expected to begin early next year.

And lastly, in our Aesthetics pipeline, we recently submitted our regulatory application for Botox in masseter muscle prominence in China, which is the initial focus for our program, given the prevalence of masseter muscle prominence in Asian populations and a significant unmet need for minimally-invasive treatment options. In our Platysma Prominence program for Botox, we remain on-track to see data from two additional Phase 3 studies later this year, with our regulatory submission in the U.S. expected near the end of the year.

So, in summary, we had a very productive first-half of the year across all stages and therapeutic areas of our pipeline and we look forward to the second-half of 2023 with several important clinical and regulatory milestones.

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

Scott T. Reents
Executive Vice President, Chief Financial Officer at AbbVie

Thank you, Tom. I'm very pleased with the performance and outlook of the business, including the strong momentum from our ex-Humira growth platform.

Starting with our second quarter results. We reported adjusted earnings per share of $2.91, which is $0.11 above our guidance midpoint. These results include a $0.15 unfavorable impact from acquired IPR&D expense. Total net revenues were nearly $13.9 billion, more than $350 million ahead of our guidance and down 4.2% on an operational basis, excluding a 0.7% unfavorable impact from foreign exchange. Importantly, these results reflect high-single-digit sales growth from our growth platform. The adjusted operating margin ratio was 47% of sales. This includes adjusted gross margin of 84.7% of sales, adjusted R&D investment of 12.5% of sales, acquired IPR&D expense of 2% of sales and adjusted SG&A expense of 23.2% of sales. Net interest expense was $454 million. The adjusted tax-rate was 15.8%.

Turning to our financial outlook. We are raising the midpoint of our full-year adjusted earnings per share guidance by $0.23, and now expect adjusted earnings per share between $10.90 and $11.10. This guidance does not include an estimate for acquired IPR&D expense that may be incurred beyond the second quarter. We now expect total net revenues of approximately $53.4 billion, an increase of $1 billion. At current rates, we expect foreign exchange to have a modest unfavorable impact on full year sales growth. This guidance includes the following updated assumptions, with more than half of the sales improvement attributed to our ex-Humira growth platform.

We now expect Skyrizi global sales of approximately $7.6 billion, an increase of $200 million due to continued strong performance across all approved indications. We now expect Neuroscience sales of approximately $7.7 billion, an increase of $300 million, reflecting robust prescription growth for Vraylar following the MDD approval as well as better-than-expected performance of Botox Therapeutics and Qulipta. And for Aesthetics, we now expect global revenue of approximately $5.4 billion, an increase of $100 million, primarily reflecting momentum from Botox Cosmetic. Lastly, we now anticipate U.S. Humira erosion of approximately 35%, resulting in a sales guidance increase of $400 million based on volume trends and strong parity access.

Moving to the P&L. We continue to anticipate adjusted gross margin of 84% of sales, and now expect adjusted R&D expense of $6.9 billion; SG&A expense of $12.7 billion; and an adjusted operating margin ratio of approximately 46.5% of sales.

Turning to the third quarter, we anticipate net revenues of approximately $13.7 billion, which includes U.S. Humira erosion of approximately 40%. At current rates, we expect foreign exchange to have a modest unfavorable impact on sales growth. We expect adjusted earnings per share between $2.80 and $2.90. This guidance does not include acquired IPR&D expense that may be incurred in the quarter.

In closing, AbbVie has once again delivered strong top- and bottom-line performance. And we are very pleased with the momentum of the business heading into the second half of the year.

With that, I will turn the call back over to Liz.

Elizabeth Shea
Senior Vice President, 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, we'll take the first question please.

Questions and Answers

Operator

Vamil Divan, Guggenheim Securities.

Vamil Divan
Analyst at Guggenheim Securities

Hi. Great. Thanks for taking my questions. So, one, I'm just curious, given the strong quarter and the guidance raise, in terms of -- you talked about your floor EPS, is that do you still see a floor of $10.70 or is it different? And can you talk anymore at this point or when you see that floor happening?

And then my second question was just around IRA, and obviously, a lot of focus there. I'm curious if you have any thoughts around, look at the first list products around September 1, do you expect any AbbVie products to be included in that first group of 10? And then I'm curious just on Rinvoq specifically, and how you see that might be at risk from IRA, given you're doing up with lot of life cycle development there? And is there a chance of a lifecycle may not be quite as long, but then how are you thinking about prioritizing investing behind a small molecule like Rinvoq? Thank you.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Vamil, this is Rick. I'll take the first question, and maybe, Rob and I can also tag team on the first one and the second one as well.

So, if you look at the floor, if you step-back and look at how the business is performing, obviously, the business is performing extremely well. And a significant part of the overachievement is not the Humira business. In fact, of the $1.4 billion raising, as Scott said, only $400 million of it is Humira, so $1 billion of it is the growth platform. So, all that speaks that we have very strong momentum going into 2024.

And we've talked before on these calls about, well, when will the trough year, and when you think about the floor, I think, you have to sort of think about the trough year at the same time. We've said in the past that if we significantly overachieved in 2023, that would increase the probability that the trough year was in 2024. And we said that in the backdrop, primarily thinking about it, as Humira over-achieving. And obviously now, what we're seeing is the majority of the other products that are over-achieving, the growth platform. So, as we look at 24 and as we look at the trough, I think, we have to let the year play-out a little bit further to see where we're going. But, I would say that we're feeling pretty -- we're feeling very good about '24. And the growth of that non-Humira business could more than offset the overall performance that we're seeing this year, especially, the over-performance that we're seeing on Humira.

So, it's too early to raise the floor. But what I would tell you is the performance that we're seeing now gives us a tremendous amount of confidence in what '24 looks like.

Rob, anything you'd add?

Robert A. Michael
President and Chief Operating Officer at AbbVie

I'd just add that we've now collectively raised revenue guidance by $1.4 billion. As Rick mentioned, raised $400 million in the first quarter, $1 billion this quarter. When you look at it, it's really across the key therapeutic areas that will drive long-term growth. We've raised Skyrizi, Aesthetics, Neuroscience and also Humira. So, we do feel very good about the progress of the business.

We've debated when we update the floor that will come at some point may not come until we actually give the Q4 guidance -- on the Q4 call of 2024 guidance, but as we look at it, the fundamentals of the business are very, very strong, and we're seeing performance across all our therapeutic areas.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

On your second question, IRA, I think it's very difficult to predict. In our planning assumptions, we have we have assumed for some products to be impacted here early on. Imbruvica is obviously one product that we're looking at carefully. I would say, it's right from how we would calculate it. Based on the data that we would have, it would be right on the bubble of where the cut-off would occur in those first 10 products. So, it could be 10, could be nine, could be 11, depending upon how some other products. And I say it that way, because remember, we're using the data that we have We're not 100% sure that, that is the data that CMS is going to use. So, there's not perfect clarity around it. But I would say that's one that we obviously have on the radar screen and we're looking at carefully.

Anything you'd add, Rob?

Robert A. Michael
President and Chief Operating Officer at AbbVie

When IRA was passed a year ago, we obviously modeled the impact and we reaffirmed the long-term guidance expectation of high-single-digit growth in the second-half of this decade, that remains. We looked at what it means in terms of inflation penalties, Part D benefit, redesign negotiations. So, we did make assumptions around that. I think, Rick is correct in that, there is still enough uncertainty. We're going to know soon, right? September 1 is when they expect to announce the first list. We have modeled it, but we feel good. Even with IRA, although it does have an impact, and it hasn't impacted everyone in the industry, we can still deliver on our long-term growth expectations.

On your question -- and then keep in mind too, when you look at the Medicare percent of business for for AbbVie, in the U.S., it's about 20%; globally, it's a little bit lower, obviously. And so, you look at us relative to our peers, we have a lower percent of the business that's exposed to Medicare. And then we look at specific to our Rinvoq, the thing you have to keep in mind Rinvoq, with indication expansion, the percent of sales you're talking about by the time, it potentially should be selected for negotiation, potentially in later part of the decade, you're talking about something more like 10% to 12%, because if you keep in mind the new indications, and Medicaid serves younger patient populations. And so, that's the way we're looking at Rinvoq to continue to develop it.

We obviously have a number of indications that could launch later in the decade. We feel very good about that. Those indications can collectively contribute a couple billion dollars of revenue, will continue to drive that robust growth we expect from Rinvoq and Skyrizi as well. And so, we've modeled the impact of IRA. We don't expect that to impact the development plans for Rinvoq.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thank you, Vamil. Operator, next question please?

Operator

Chris Schott, JPMorgan.

Chris Schott
Analyst at JPMorgan Chase and Company

Great. Thanks so much. Just two questions for me. I guess first, can you just elaborate in terms of what you're seeing with biosimilar Humira as we think about, kind of, the price and volume dynamics? I guess, specifically, any surprises from your side in terms of how this is playing out? And then just any qualitative comments you can provide about how you see this kind of translating as we kind of think out to 2024?

And then my second question was just on the Skyrizi updated guidance. So, a little bit more color on that $7.6 billion of -- at this point, how much is coming from psoriasis versus psoriatic arthritis versus this Crohn's you launched, it seems to be off to such a strong start. So, just directional color of like the mix of the indications would be very helpful. Thank you.

Jeffrey R. Stewart
Executive Vice President, Chief Commercial Officer at AbbVie

Yeah. Hi, Chris, it's Jeff, and I'll answer your first question. So, in a nutshell, we haven't been surprised at any of the dynamics that we've seen play-out. We've called it very, very accurately. So, again, nothing that's really -- other than some small volume holding on a little bit better, that's really different. So, we're quite pleased with how our contracting and access has played out. And that parity access for Humira has been important, and again, it's what we believed would happen. We think it's good for patients, obviously, we can maintain their therapy with very little volatility. And it's certainly provided us with a lot of predictability. And so, I think we've managed sort of the first-half with the Amgen launch and then the second half, dynamics very, very well.

And if you look at '24, as I've highlighted before, we do have two-year agreements with some of our accounts. And we negotiated those in good faith, and we expect them to be to be honored. And remember, these are parity contracts for both '23 and '24, with Humira access coexisting with these multiple biosimilars. So, I would say, based on these dynamics, we are confident that Humira access will remain quite meaningful in 2024. And we know that as more biosimilars become established, we're also, as we've highlighted, appropriately planning for some volume loss in those certain so-called WAC sensitive accounts over time. So, really no surprises in terms of what we've seen overall. So, we're quite pleased.

Robert A. Michael
President and Chief Operating Officer at AbbVie

Chris, this is Rob. Just to give you some color both in terms of the '23 guidance and the erosion assumptions around that, and then I'll talk about '24 briefly as well.

In the first-half of the year, obviously, the vast majority of that erosion came from price. We saw a very little volume impact. But now, with a, biosimilars on the market and some pursuing a low WAC strategy, we have assumed high-single-digit volume erosion in the second-half of the year, which would put the full-year volume impact at mid-single-digits, the rest of 35% comes from price as we've negotiated those higher rebates and maintain strong parity access.

Now, while we're not providing '24 guidance today for U.S. Humira, it is reasonable assume that there will be additional price erosion, somewhat will come from the annualization of the rebates that increased in the second-half of this year and some will come from rebate increases negotiated for 2024 parity access. I'd also expect more volume erosion in '24, given the mid-year entry of biosimilars this year, especially those that are pursuing a low WACC strategy.

We've taken a close look at consensus estimates, analyst estimates, have a very wide range. The difference in the lowest estimate and the highest estimate approaches $4 billion. However, I'd say the average of those estimates appears to be a reasonable expectation for next year. Obviously, we'll give formal guidance likely on the Q4 call, which is our customary practice. But if you look at the average of those estimates, that should give you a good sense.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thanks, Chris. Operator -- sorry.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

And then -- sorry.

Robert A. Michael
President and Chief Operating Officer at AbbVie

Yeah. And then, I'll take -- Chris, relative to your question on Skyrizi. So, of the $200 million, it's split evenly between psoriatic $100 million and IBD $100 million. So, that $7.6 billion, psoriatic is about $6.7 and IBD is around $900 million.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Thanks, Chris.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Operator, next question please?

Mohit Bansal
Analyst at Wells Fargo Securities

Great. Thank you very much for taking my question and congrats on the quarter. One clarification question, and then one question. So, clarification. So, Rick, you mentioned that, you think, again, at this point, not talking about increasing the floor, but you feel comfortable about the floor EPS range of $10.70. Is that fair to beat in 2023 or '24? That's the first clarification question.

And then second one is, when we talk to investors, they do feel comfortable about the ex-Humira portfolio. But one question that comes up all the time is that, I mean, the lack of shiny object or pipeline beyond Skyrizi and -- Skyrizi and Rinvoq. To the extent, you agree with that assessment? How do you plan to mitigate that or is there anything in the pipeline that investors are missing at this point? Thank you.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Okay. This is Rick. So, as far as the $10.70, I would tell you that we feel highly confident in the $10.70. So, there shouldn't be any concern there. And as I said, with how the growth platform is performing, we would expect to update at some point the floor, and obviously, by the way, I'm saying the update will be in a upward direction. So, hopefully, that gives you some clarity around the floor.

The other thing is when you think about the pipeline, what I tell you about the way we operate is we design our investment in R&D to be able to deliver the kind of growth that we expect for the business over the long-term, both short-term and long-term. Our expectations for the business haven't changed. Our expectations are to build a strategy that allows this business to grow at the top-tier and be able to do it over the long-term and do it in a consistent way. And I'd say, as I look at our historical performance, we've obviously delivered on that, but as I at our look forward-looking performance through the end of this decade and into the early part of the 30s, we're highly confident we can deliver high-single-digit growth, with the pipeline that we have now and ultimately with the assets that we have in the marketplace and how they're performing in the marketplace and their ability to be able to drive significant growth, and you see that in the performance that we're delivering now.

If you look at our growth platforms, growth in first quarter and then look at -- in the second quarter, it's accelerating at a very good pace and it will continue to accelerate as we go through the rest of this year. And that, once we get to a stable tail or a relatively stable on Humira, it will be that growth, it emerges to be able to drive the Company and that's what gives us such a high level of confidence. But I think when you look at our pipeline, certainly, we invested significantly in Skyrizi and Rinvoq and that investment is paying-off extremely well. We have a number of assets in our pipeline that will continue to help accelerate that growth as we move forward. So, venetoclax for t(11;14) and MDS are examples of that. 951, we should do that resubmission and get that product on the market. There is a huge need for that product in the marketplace. And a number of other assets, I won't go through every one of them.

The rest of our investment in R&D has really been focusing on assets that are designed to be able to sustain our growth from 2030, '40 forward. And so, as I look at our pipeline, and I know you don't have as much visibility as we do, but when I look at our pipeline for things like the the 400 platform and cMet that platform that we have, the data that we're seeing in CRC non-small cell, that's a significant opportunity for us. GARP is another significant opportunity for us. Our Neuroscience portfolio, with 916 and other assets, is another significant opportunity for us, that will emerge in that timeframe. We have a next-generation BTK degrader that we're excited about. We have a second-generation BCL-2, that we're very interested in pursuing in multiple myeloma. And so, there's a number of assets here. We just haven't emerged to the point that you have clear visibility to all that data, but we do have visibility to where they are progressing.

And so, I think, it's just hard for you to assess that earlier pipeline. But it's really designed to deliver on that long-term growth. So, we're confident between now and the early 30s. And as that pipeline matures and the data comes out -- 383 is another good example of where we have a lot of data now that is demonstrating, that is probably best-in class by specific in myeloma. And so, as that data emerges, you're going to get more visibility to it. And then obviously, we have the ability to go out and acquire things as we find things that we're interested in.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Okay. Thank you, Mohit. Operator, next question please?

Operator

Terence Flynn, Morgan Stanley.

Terence Flynn
Analyst at Morgan Stanley

Hi, thanks so much for taking the questions. Maybe a couple for me. Maybe, Rick, just to follow-up on that last comment, maybe just an update on your M&A BD appetite here, particularly, assets that can contribute more near-term to growth. And then again, one, to see what you guys are hearing out there regarding the long-acting Botox competitor. It sounds like you're seeing stable market share. But any feedback on that product? Thank you.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Okay. So, M&A, I mean, obviously we have a very active group who is constantly working in the area of business development. We're primarily focused in the areas that we operate in franchises. So, think of things like immunology, neuroscience, certain areas of neuroscience, oncology, aesthetics, as an example, we constantly look at, and then eye care would be, I would say, the key areas of focus.

And as I said before, we don't need anything to be able to drive that high-single-digits. Obviously, if we can grow even faster, that's a good thing. I think all of us recognize that. If we find assets that are out there, that are later-stage assets and they fit our strategy, and they fit the kind of target product profile that we would expect, because we only look for assets that can significantly change standard-of-care. That's what we're good at. And so, we evaluate lots of things, but many of them don't meet that threshold that we're looking for. But if we find something, we would obviously pursue it, if it was in an area that we thought we could maximize the value of it. And so, we'll continue to do that.

So, like I said, I feel good about where we are and what we can drive and I feel good about what -- how we're looking at assets that are in the outside. We certainly have the financial wherewithal to be able to acquire assets that are out there. And as we've mentioned before, we obviously acquire now larger assets, and so we continue to look at those. But they have to meet our criteria and they have to be able to deliver a good return to the business.

On DAXI, I feel very good about how the team -- Carrie and the team are performing against that. But I'll let Carrie actually describe to you how it looks.

Carrie C. Strom
Senior Vice President, AbbVie, and President, Global Allergan Aesthetics at AbbVie

Thanks, Rick. So, in terms of DAXI, it's been more than six months since their launch, and the uptake has been quite limited from our perspective, in the low-single-digits. So, for context, as we benchmark our competitive launches and you would benchmark this launch versus the most recent toxin to enter the U.S. market, you would see it's tracking to about 25% of where another product would be at the same point in its launch.

And in terms of customer feedback, we continue to hear that expectations are just not being met on duration, that's expectations on the customer side and on the consumer side. So, we have yet to see impact on Botox share and Botox will continue to be the clear market-leader as the other toxins compete for the number two, three, four position in our customers' offices.

We are very pleased with the team's ability to execute on these competitive strategies here and actually, they have a clear focus not only on the competitive strategies, but also on the broader focus and vision to grow the entire toxin market in the U.S., which we continue to see as the biggest opportunity now and in the future.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thank you, Carrie. Operator, next question, please?

Operator

Evan Seigerman, BMO.

Evan Seigerman
Analyst at BMO Capital Markets

Hey, guys. Sorry about that, I was on mute. Thank you for taking my question. I wanted to just talk about kind of how you think about market share across the growth portfolio, specifically Skyrizi and Rinvoq kind of going forward. Is there a potential ceiling for them and we're in a market share you can realize in these markets, and maybe comment on some of the gating factors for market share growth in each, the patient provider and reimbursement agreements? Thank you so much.

Jeffrey R. Stewart
Executive Vice President, Chief Commercial Officer at AbbVie

Yeah. Hi, Evan, it's Jeff, I'll take that one. One of the aspects that we have that I highlight and we look very carefully at, we look at both sort of in-play capture, which I often refer to, for example, right now the in-play capture for Skyrizi in psoriasis is about 50%. So, we are capturing one out of every two patients. And our market share is about 32% as I highlighted. So, theoretically, as we study these markets that, if there's not major innovation or major disruption that comes in place, and we really don't see that in psoriasis, you get such a high level of efficacy with Skyrizi. Your market -- your market share, so the 32% starts to ramp-up over time towards your in-play capture, because you get they persistency effects in the fall-off that take place in the market.

So, really when you look at that, I could say the same thing for example with Rinvoq. I mentioned that it's capturing 25% of second-line plus in-play share, it has like a 3% market share. So, in terms of the ability to sort of grow that market share over time, we really monitor that capture rate in the early years and then you just sort of the in-place sort of pulls up your market share over time. So, that's why we're quite encouraged at the speed of the ramps that we're seeing there, and the ability to move that market share.

Now, when we study the models, you don't fully get there, because typically something else launches time goes by, but we can feel very, very encouraged as we look at our in-play momentum that the market share starts to approach that over our long-range planning cycle.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

The only other thing I would add, this is Rick, is with Otezla head-to-head, I would say currently, Skyrizi is not competing much against Otezla, which is a pretty sizable opportunity. And we're very pleased with this head-to-head data. So, that will open up another pool of patients that today, Skyrizi doesn't necessarily compete against. So, that data will obviously allow us to be able to position it quite effectively against Otezla.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

All right. Thank you, Evan. Operator, next question, please?

Operator

Chris Raymond, Piper Sandler.

Christopher Raymond
Analyst at Piper Sandler Companies

Thanks. Just maybe a pipeline line of questioning here. Rick, I heard you mentioned, ABBV-951, but it wasn't in your prepared comments. Maybe -- I know you guys were saying you're working to respond to the CRL later this year, with a PDUFA in the first half. Is that still the case?

And then maybe also on the pipeline. A couple of quarters ago, I think you guys talked about an interesting combo opportunity in IBD with that GLP-2 in-license, I think, from Scripps. Any updated thoughts here with this sort of mechanism as a combo agent? Thanks.

Roopal Thakkar
Senior Vice President of Development and Regulatory Affairs and Chief Medical Office at AbbVie

Hi, it's Roopal, I can take those. So, for 951, the team is still on-track for a resubmission this year consistent with what you just stated. And in fact, we've we've launched in Japan, and there is already commercial patients receiving it. So, the team is very excited about that and what was described earlier, the unmet need is still quite high. And we still believe in a very strong profile in that asset.

Along the lines of combinations, as you mentioned, on GLP-2, we feel with something like Skyrizi, the data that we've seen in Crohn's and ulcerative colitis, there's still potentially an opportunity to even increase endoscopic or mucosal healing even higher. We're seeing high ranges already, 50%, 60%, but we can still potentially go higher and something like a GLP-2 can directly address mucosal healing. So, that could be a potential combo. There's other assets in our Immunology pipeline that we are also considering for combination, but when you have an asset like Skyrizi and the safety profile that, we continue to observe, that creates, I would say, multiple opportunities.

Robert A. Michael
President and Chief Operating Officer at AbbVie

If I can just add, we didn't really opt-in yet. The -- our collaboration with Calibr, which we expanded this week to more programs, includes them doing a Phase 1a study, which is almost finished. We're going to see the data and make that decision. It does fall into our -- part of our immunology program, which is in epithelial repair, which Roopal just mentioned. And so, this is one of the assets which we think, if you get a healthier gut to repair, that we -- in combination with immunomodulators, will get a better response over time.

We have another program called RIPK1, which also is involved in epithelial repair. So, multiple strategies, but this is one where we will be making a decision and announcing later time this year.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thank you, Chris. Operator, next question please?

Operator

Steve Scala, TD Cowen.

Steven R. Scala
Analyst at Cowen & Co. LLC

Thank you. A couple of questions. This morning, Takeda noted weakness in the U.S. GI market, and it seem to be mainly on patient levels as opposed to competition. I'm wondering if you're seeing this, and to, what do you attribute it? So, that's the first question.

On the second question, on the Q1 call, the Company said it would narrow the EPS range when it had clarity on biosimilar Humira and the landscape for that. So, you narrowed that range today, despite most biosimilars having been on the market for only three weeks. What do you know now that you didn't know when you reported in April that gives you the confidence to narrow the range today or is it all about the performance of the rest of the portfolio and really not about Humira? Thank you.

Jeffrey R. Stewart
Executive Vice President, Chief Commercial Officer at AbbVie

Yeah, hi, Steve, it's Jeff. No, we don't see any slowdown in the IBD market. I mean this market has been just one of the highest-growth markets we've seen from a CAGR perspective over many, many years. There's such unmet need. And so, no, we're not seeing any patient slowdown. I would say, look, if we look at our particular data, I mean, you're seeing very fast ramps on this in-play share from Skyrizi in Crohn's disease, now you're seeing an equally fast ramp in the early weeks from Rinvoq in Crohn's disease. And again we're capturing up to 25% of the second-line plus patients in ulcerative colitis. So, I don't know what data Takeda is looking at, but we're seeing that the competitors in that space, and the leading competitors are Stelara and Entyvio and, of course, our own Humira. But it's Stelara and Entyvio, they're under pressure in terms of incremental patient capture since our launch, and we'll continue to monitor. But we don't see any patient flow issues in the marketplace.

Robert A. Michael
President and Chief Operating Officer at AbbVie

And Steve, this is Rob. On your second question, I think, it's a combination of both. We are seeing very strong performance from the ex-Humira growth platform as you can see it by the guidance raise. So, that's certainly a contributor. But now that, we're beyond the middle of the year, we know the biosimilars have entered the market, we know they're facing prices. We've maintained strong parity access. And so, that also increased our confidence, which is why we've narrowed the range to $0.20. But it's a combination of both, the ex-Humira growth platform performing very strongly as well as where we sit today with biosimilar competition for Humira.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thanks, Steve. Operator, next question please?

Operator

Carter Gould, Barclays.

Carter Gould
Analyst at Barclays

Thank you for the question. Congrats on the quarter. I guess, two. Acknowledging all your comments on the pipeline and previous comments on BD, Rick, I was looking to get to your thoughts on how the more sort of FTC here is limiting your target list on BD or your ability to complete deals? And then maybe just on Botox, just -- I was hoping for a little bit more color on the sustainability of the ex-U.S. trends versus maybe some of that demand getting pushed into the quarter after some of the shutdowns, COVID impacts and whatnot, ex-U.S. Thank you.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Yeah. So, I'll take the first question. Obviously, the FTC appears to be applying a lot more scrutiny to transactions. Having said that, I would say, even before this happened, we would always evaluate an acquisition of a product or a company in the backdrop of what we thought the competitive environment would be and our position in that market, meaning we didn't necessarily go out and try to do transactions that we thought would be extremely difficult from an FTC standpoint.

So, I think the way we think about the FTC situation now is, look, it may require more time to get acquisitions through, it may even require that you're willing to pursue litigation in order to get those through. But in the end, if your position is that what you're trying to do is not anticompetitive, you will be able to ultimately prevail in that process. And I think we're seeing that as some of these transactions go to court, some not, in our own industry. But in other industries, I think, that's playing out. And so, I think ultimately, it will end up being more of a delay, but not something that staples your ability to do things that are appropriate to do. That's my perspective on it.

Carrie?

Carrie C. Strom
Senior Vice President, AbbVie, and President, Global Allergan Aesthetics at AbbVie

Sure. In terms of the Aesthetics market internationally, like we said, we've been very pleased with the performance so far, and we expect to -- we continue to expect to see that type of strong performance through the rest of the year. We're continuing to invest in key growth markets, like Japan and in markets like Brazil. And of course, China has become our second biggest market globally. And in China, in the first quarter, we did see significant growth as the market was reopening from COVID and some pent-up demand that came through in Q1 and early Q2. And now China has returned to normalized high growth rates. And so, despite some economic pressures there, we really continue to see strong growth as we continue to invest and expand our promotional footprint there through field force, through injector training and our consumer efforts. And China will continue to be a really attractive market for us. Based on that commercial expansion and also, we're going to have a steady flow of new product launches throughout the decade in that market.

One thing to note, which we did mention in our prepared remarks is that we do expect Q3 to be relatively flat internationally based on shipment timings from last year with that return to growth in Q4 and high single-digit-growth for the full year internationally.

Robert A. Michael
President and Chief Operating Officer at AbbVie

And then, Carter, you were specifically asking about international Botox. I think if you just look at the run rate through the six months of the year, that's probably a good proxy for where we expect international Botox to land. It's -- we're holding strong share positions. Performance is very, very good. So, there's really no dynamic there as Carrie mentioned. I mean, you have to keep in mind that fillers is a very large market for us -- business for us internationally. We do have the Q3 dynamic.

But when you look at the full year for international, that high single-digit-growth, is certainly a way to think about the international business for Aesthetics.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Thanks, Carter. Operator, next question, please?

Operator

David Risinger, Leerink Partners.

David Risinger
Analyst at Leerink Partners

Yes. Thanks very much. So, I have two questions. Rick, you had mentioned that you're expecting stabilization of Humira sales at some point. Could you provide some perspective on when you might expect that?

And then second, with respect to the filler franchise, obviously, it's performing strongly, could you discuss the prospects including the driver of weight loss drug patients seeking to compensate for facial hallowing? Thank you very much.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

On the Humira tail, as Rob mentioned earlier, obviously, you have the annualization of the impact that we have this year, the second half annualization that's going to roll into '24. We're going to have further price erosion in '24, both based on the contracts that we have and how we're expecting the market to play out. And I'd say the pricing in the marketplace has been consistent with what our original assumptions were.

So, I think, the expectation is that you'll start to see stabilization of that tail in '25. And benefit operates similar to what we see in the international markets, which I think it, probably, will at that point. It becomes relatively stable, I'd say, in '26 going forward. And it should be still a substantial tail that we maintain. But we'll see less erosion pressure on it at that point.

I don't know, Carrie, do you want to talk a little bit about the Otezla impact?

Carrie C. Strom
Senior Vice President, AbbVie, and President, Global Allergan Aesthetics at AbbVie

Sure. So, in terms of the filler opportunity and outlook, I guess, I'll [Speech Overlap] I'll start -- I'll zoom out a little bit and just comment on that, the filler market continues to be really attractive, especially internationally, as you've already seen here right now. with China driving some strong growth. And really some of the key Juvederm brands have just become available in China in the past few years, and we'll continue to have, like I said, a cadence of Juvederm launches in China. And then our increased investment all over the world and continues to drive our filler business and gives us a lot of optimism there internationally.

Now in the U.S., we have said that the inflationary dynamics have impacted the U.S. market for filler and more than toxin just by the nature of the filler pricing and procedure. And also in terms of the patient journey patients tend to start on toxin before they add filler. And so, for all those reasons, we believe that the top -- the filler market will continue to improve in the second half of the year although it will lag the toxin market recovery a bit.

Now in terms of the question around Ozempic, we have been keeping an eye on that and how these weight loss products could have an impact on the Aesthetics market. And what we see is that really anything that gets a consumer engaged in their appearance, including products like Ozempic are a positive tailwind for the Aesthetics business. And we are hearing some customers say that this facial hollowing for fillers is -- or for -- that's a result of these products is an opportunity for fillers. We see that on social media. We're tracking it in other forms of media. And we think that like many other consumer trends around Aesthetics, this will just continue to be a tailwind and a positive dynamic for the business.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Operator -- thanks, David Risinger. Operator, next question, please?

Operator

Tim Anderson, Wolfe Research.

Tim Anderson
Analyst at Wolfe Research

Thank you. A couple of questions. How much uncertainty is there in terms of contracting in the I&I category in 2024 from a pricing standpoint for Skyrizi and Rinvoq? And when will you be able to provide an update on how those pricing discussions are going for those two brands? So, not the formal sales guidance for those products, but how the pricing discussions are going.

And what is your expectation today for that level of price erosion in 2024 relative to what it's been in 2023? Thank you.

Richard A. Gonzalez
Chairman of the Board and Chief Executive Officer at AbbVie

Okay. So, I think Jeff and I will tag team this one. It's a great question, because, look, I think we all know there has been some question out in the marketplace since the first quarter about I&I pricing. And so, let me try to frame our perspective on the pricing, because I think there's some misconception that's developed in the marketplace to some extent around I&I pricing. I guess the first thing I'd say to you, this is a market we know well. We've been in this market for a long time. We're obviously a clear leader in this market. So, it's a market we know extremely well. And obviously, we know any trend that's occurring in this market to a high degree of detail.

And what I would tell you is that we see no fundamental change in the way pricing is being dealt with in this marketplace nor do we expect to see any fundamental change that occurs in the foreseeable future. So, that brings me to the rebate question in the first quarter. And I would tell you that we're operating exactly the same way we have historically operated in this segment as it relates to rebating or discounting. When we get a new indication or when we get a new product, one of the things that we evaluate is, okay, what level of rebating should we do in order to maximize two things for the product: the speed at which we can drive the ramp and the ultimate peak sales that we can drive for that asset. We weigh those two things against how we look at contracting and getting on formulary.

And so, when you get an indication, you make a trade off. Do I want to be on formulator? Don't I? If I do, I have to provide some level of incremental rebates. Is that a financially positive decision for the asset and the Company? And if it is, we make that decision. And I would say that Skyrizi and Rinvoq are classic examples of that strategy. And I would say, look at how they're performing. We're going to grow those two assets despite the increased rebates, $3.5 billion this year. And that's a pretty good trade-off.

I don't know, Jeff, anything you'd add?

Jeffrey R. Stewart
Executive Vice President, Chief Commercial Officer at AbbVie

Yeah. Maybe just to build on that point, Rick. I mean this fact base of seven indications in one year in one category with one firm, it's just -- it's really unprecedented. It's not going to happen again. And I think it's important to think about how it works. I mean, when you get a new indication and they're sequencing over time, you've got to clear the payer's P&T clinical committee, and they don't meet every day. They meet every couple of months. So, there's a process there. And then you've got to be added to the formulary structure. So you either have to somehow gain a new spot by indication or replace a competitor. And that's not easy as well. And so that's why what we see in the marketplace many competitive firms have to offer these free or bridge programs and not just for a quarter or two, sometimes there are multiple quarters or years until that access ramps.

And I would say, in contrast, Rick, as you noted, on average, we achieved fully paid access for those seven indications in about 60 days, really, really unprecedented. So that means we had to give very little free goods, we had almost immediate paid access and profit flow and then, of course, that rapid revenue accumulation that you highlighted. So, definitely the right trade-off, and we don't see that recurring.

Robert A. Michael
President and Chief Operating Officer at AbbVie

And then Tim, on your second question, I mean, we've said this before, the high-single-digit price impact this year is a function, again, as Jeff mentioned, seven new indications, we do not expect that type of price erosion going forward. It should not be what investors are modeling. We -- so, I wouldn't be concerned about high-single-digit price erosion in '24.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

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

Operator

And that will be from Geoff Meacham, Bank of America.

Geoff Meacham
Analyst at Bank of America Merrill Lynch

Great. Good morning, guys. Thanks for the question. On OUS Humira, you're obviously well past the initial biosimilar way, but you're still seeing some sequential decline. So, what's the context here? And is there a dynamic that could impact Skyrizi or Rinvoq even indirectly OUS?

And then on Navitoclax, I know you guys have more details to come, but is there a threshold you're looking for and Transform-1 to move forward or even to inform development in other indications, just thinking about maybe the tolerability profile and the comps in that? Thank you.

Robert A. Michael
President and Chief Operating Officer at AbbVie

So, Geoff, this is Rob. I'll answer your question on international Humira. If you look at the '23 erosion, its's about $600 million, it's really split in, I'd say, three buckets. About $300 million of it is new biosimilar markets, markets like Canada, Puerto Rico, Mexico, those

Are -- remember, we have additional waves coming in. So, that's the next wave coming in, so about half of it is that. And then I'd say I characterize about $200 million being really the impact of new agents like Skyrizi and Rinvoq, right? So, you have agents that deliver higher standard of care, and so you're going to see share erosion just through that dynamic. And fortunately, we've brought forward our own products that do that. And so I'd say of that $600 million, $200 million is roughly that.

And then in the international markets, you typically see some, I'd say, low- to mid-single-digit price erosion just typically year-over-year. So that's about another $100 million. So, it's important to characterize it the right way. It's not so much markets that were biosimilar several years ago. It's more recent biosimilar markets, our own competition from our own agents as well as the typical price erosion you see in the international market.

Roopal Thakkar
Senior Vice President of Development and Regulatory Affairs and Chief Medical Office at AbbVie

Hi, it's Roopal. I'll take the Navitoclax question. So we'll continue to monitor the spleen volume reduction and see how that looks towards the end of the year. And if it maintains the high level that Tom described, that's something that is definitely a positive. The other things that we'll get that will reveal themselves over the longer term is the marrow fibrosis and that, along with the spleen volume reduction and actually some of our earlier data maybe correlative for survival events. So, we'll get an early look at those.

And then in terms of tolerability, what we've seen thus far is consistent with what we've seen initially, and it is a titratable dosing. So, the clinicians can tailor in the study to what the patient needs. So, more to come by year-end.

Elizabeth Shea
Senior Vice President, Investor Relations at AbbVie

Okay. Thanks, Geoff. 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.abbvie.com. Thanks again for joining us.

Operator

[Operator Closing Remarks]

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