AbbVie Inc. Q3 FY2024 earnings call

Management Statement and Operational Highlights

• AbbVie is performing exceptionally well with double-digit sales growth from ex-Humira platform, successful acquisition of Cerevel Therapeutics, and progress in pipeline.
• Diversified portfolio delivered sales $260M above expectations with mid-single-digit operational sales growth. Ex-Humira platform drove over achievement, with Skyrizi and Rinvoq combined sales expected to exceed $17B this year, $1.3B above initial expectations.
• Completed acquisition of Cerevel Therapeutics, strengthening neuroscience pipeline. Positive Phase 3 results for tavapadon in Parkinson’s and progress on emraclidine in schizophrenia.
• Commercial highlights: Skyrizi and Rinvoq showing robust growth in immunology; Oncology products like Venclexta performing well; Neuroscience products like Vraylar and Botox Therapeutic strong; Aesthetics facing economic challenges but with innovation opportunities.

Segment Performance

• Immunology: Total revenues exceeded $7 billion, up 4.8% operationally. Skyrizi global sales were $3.2 billion, up 51.5% operationally. Rinvoq global sales were $1.6 billion, up 47.4% operationally. Humira global sales were $2.2 billion, down 36.5% operationally due to biosimilar competition.
• Oncology: Total revenues were approximately $1.7 billion. Imbruvica global revenues were $828 million, down 8.8%. Venclexta global sales were $677 million, up 18.2% operationally. Elahere and Epkinly showed strong launch trajectories.
• Neuroscience: Total revenues were more than $2.3 billion, up 16% operationally. Vraylar sales were $875 million, up 16.6% operationally. Ubrelvy and Qulipta combined revenues were $445 million, up ~22%. Botox Therapeutic global sales were $848 million. Vyalev, a transformative therapy for advanced Parkinson’s disease, was launched.
• Aesthetics: Global sales were more than $1.2 billion, up 1.8% operationally. U.S. Botox Cosmetic sales were $414 million, up 6.5%. Juvederm U.S. sales were $105 million. International aesthetics sales were $448 million, down 1.6% operationally due to economic challenges in key markets.

Guidance

• Raised full-year revenue guidance by $500M, now expecting total revenue ~$56B.
• Raised full-year adjusted EPS guidance by $0.15, expecting adjusted EPS between $10.90 and $10.94.
• Updated guidance for specific products: Skyrizi global sales approx. $11.5B (up $500M), Rinvoq total revenue $5.8B (up $100M), U.S. Humira total sales $7.4B (down $400M), Imbruvica total revenue $3.3B (up $200M), Venclexta total sales $2.6B (up $100M), Aesthetics global revenue $5.3B (down $200M), Vraylar total sales $3.3B (down $100M), Botox therapeutic global revenue $3.3B (up $100M).
• Anticipated net revenues in Q4 approaching $14.8B, expecting adjusted EPS between $2.94 and $2.98.

Risks

• Biosimilar competition: Impacting Humira sales as molecule volume shifts to other mechanisms.
• Economic challenges: Affecting aesthetics sales, particularly Juvederm in key markets.
• Trial outcomes: Potential placebo effects in emraclidine pivotal studies and uncertainty around trial results' impact on Cerevel acquisition valuation.

Question and Answer

Q: Chris Schott with J.P. Morgan asked about Humira volumes shifting to newer drugs and 2025 outlook.

A: Rob Michael and Jeff Stewart responded that AbbVie is confident in mid-single-digit growth in 2025, with Skyrizi and Rinvoq's momentum offsetting Humira's decline.

Q: Mohit Bansal with Guggenheim Securities inquired about the head-to-head trial against Entyvio for Skyrizi.

A: Roopal Thakkar stated that Skyrizi shows strong endoscopic improvement in naive ulcerative colitis patients, giving confidence in differentiation.

Q: Vamil Divan with Guggenheim Securities asked about emraclidine trial expectations and safety profile.

A: Roopal Thakkar mentioned emraclidine's single-agent, once-daily profile with no food effect, and discussed safety and efficacy expectations.

Q: Trung Huynh with UBS asked about aesthetics business dependence on economic recovery.

A: Rob Michael stated AbbVie's confidence in long-term aesthetics growth despite current economic challenges, citing innovation like BoNT/E as a driver.

Q: Geoff Meacham with Citi asked about eye care's strategic ranking and BD focus.

A: Rob Michael said eye care is part of five key growth areas, with BD focusing on early-stage opportunities in core areas.

Q: James Shin with Deutsche Bank asked about managing placebo effect in emraclidine trials.

A: Roopal Thakkar discussed measures like limiting countries/sites, central review, and rater training to manage placebo responses.

Q: Carter Gould with Barclays asked about Aliada acquisition differentiation and neuroscience strategy.

A: Roopal Thakkar and Rob Michael discussed Aliada's brain delivery technology and neuroscience strategy focusing on psychiatry, migraine, Parkinson’s, and neurodegeneration.

Q: Steve Scala with Cowen asked about Cerevel acquisition focus and emraclidine data confidence.

A: Rob Michael and Roopal Thakkar stated confidence in Cerevel acquisition and emraclidine trial potential, noting strong effect size in Phase 1b.

Q: Luisa Hector with Berenberg asked about Vraylar channel mix and Gedeon Richter collaboration.

A: Scott Reents discussed Vraylar channel mix adjustment, and Roopal Thakkar talked about Gedeon Richter collaboration for psychiatry assets.