AbbVie Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• 2025 Performance: Delivered record net sales, exceeded financial commitments, advanced pipeline, and made strategic acquisitions. Full-year adjusted earnings per share were $10, $0.54 above initial guidance midpoint. Total net revenues excluding IPR&D were $61.2 billion, beating initial guidance by over $2 billion.
• R&D Investment: Increased adjusted R&D expense by nearly $1 billion in 2025, funding 90 clinical programs. Obtained approvals for RINVOQ for GCA, EMERALIS for nonsquamous non-small cell lung cancer, and Epkinle for second-line follicular lymphoma. Made over $5 billion in BD investments, including in vivo CAR T platform, next-generation psychedelic, trispecific antibody, long-acting amylin analog, and siRNA platform.
• Commercial Highlights: Immunology saw strong performance from SKYRIZI and RINVOQ. Neuroscience had robust growth with Violet's launch. Oncology had mixed results with VENCLEXTA growth offsetting IMBRUVICA decline. Aesthetics focused on market stimulation with new programs.
• R&D Highlights: Immunology has pivotal data readouts and regulatory submissions planned. Oncology has progress with tmAbA and deals with Remagen. Neuroscience has approvals and studies planned for various programs. Other pipelines have phase studies ongoing.

Segment Performance

• Immunology: Fourth quarter revenues approximately $8.6 billion. SKYRIZI total sales were $5 billion (31.9% operational growth), RINVOQ total sales were nearly $2.4 billion (28.6% operational growth). Full-year combined SKYRIZI and RINVOQ revenues were approximately $25.9 billion, an increase of over $8 billion year-over-year. HUMIRA global sales were over $1.2 billion, down 26.1% operationally due to biosimilar competition.
• Neuroscience: Full-year revenues were over $10.7 billion, with Q4 revenues over $2.9 billion (17.3% operational growth). Driven by Vraylar, Botox Therapeutic, Ubrellvi, and QULYPTA. Violet (Parkinson's disease) Q4 sales were $183 million, up ~33% sequentially, expected to be a blockbuster in 2026.
• Oncology: Q4 revenues were nearly $1.7 billion, down 2.5% operationally. VENCLEXTA global sales were $710 million (6.4% operational growth). IMBRUVICA was down 20.8% due to competitive dynamics and pricing.
• Aesthetics: Q4 global sales were nearly $1.3 billion, down 1.2% operationally. BOTOX Cosmetic revenues were $717 million (3.8% operational growth), Juvederm sales were $249 million (down 10.8% operationally).

Guidance

• 2026 Full-Year: Adjusted EPS guidance $14.37-$14.57. Total net revenues expected ~$67 billion (9.5% growth). Foreign exchange expected to have ~0.8% favorable impact. Immunology global sales ~$34.5 billion, neuroscience ~$12.5 billion, oncology ~$6.5 billion, aesthetics ~$5 billion.
• First Quarter 2026: Anticipated net revenues ~$14.7 billion. Foreign exchange expected to have ~2% favorable impact. Adjusted operating margin ~46%, non-GAAP tax rate ~13.7%, adjusted EPS $2.97-$3.01.

Risks

• Biosimilar Competition: Continued erosion of HUMIRA sales due to biosimilars.
• Pricing Pressures: IMBRUVICA IRA pricing negatively impacting oncology portfolio growth.
• Macroeconomic Headwinds: Affecting aesthetics market with category growth challenges.
• Competitive Landscape: Intense competition in immunology impacting market share and pricing.
• Regulatory and Clinical Trial Challenges: Potential delays or issues with regulatory approvals and clinical trial outcomes.

Question and Answer

• Q: Could you please provide some more details on the psychedelic that's in development? A: Roopal Thakkar said the psychedelic works through 5-HT2A serotonergic pathway, has short hallucination time, high efficacy leading to remission-like state, with two more readouts before phase three.
• Q: Is the market now largely getting this right at this point regarding consensus growth expectations for SKYRIZI and RINVOQ? A: Robert Michael said the street is not modeling upside for neuroscience and oncology, with potential for further growth in neuroscience (e.g., Parkinson's franchise) and oncology (e.g., tmAbA pipeline).
• Q: How are you thinking about the opportunities on the forward here in terms of BD lens? A: Robert Michael said AbbVie invested over $8B in external innovation in last two years, focused on early-stage opportunities in core areas to drive growth in next decade, with interest in both early and late-stage differentiated assets.
• Q: Could you frame expectations for the upcoming RINVOQ and Lutekizumab Phase III HS data? A: Roopal Thakkar said RINVOQ study in treatment failure population, lutekizumab in naive and experienced populations, both with strong efficacy potential similar to IBD strategy.
• Q: On Botox being selected for Medicare price reductions in 2028, what does exemption from future pricing mandates constitute? A: Robert Michael said the agreement balances affordability and access, exempts from tariffs and pricing mandates including demonstration projects, with no impact on long-term growth guidance.
• Q: How is the expansion strategy into primary care for migraine going? A: Jeffrey Stewart said AbbVie has strong position in migraine with UBRELVY and QLIPTA, significant primary care presence, and continues to stretch lead in the category.
• Q: Can you talk about the sizing of the RINVOQ in vitiligo opportunity and competitive threat from IL-fifteen directed therapies? A: Jeffrey Stewart said RINVOQ vitiligo opportunity ~$2B+ peak, Roopal Thakkar said RINVOQ has strong efficacy and tolerability, with ability to compete despite potential competition.
• Q: On 932 in bipolar, how does it compare to Vraylar and potential expansion into other indications? **A: Roopal Thakkar said 932 has potential for less D2-related movement disorder, will see phase two data later this year, with potential indication expansion in psychiatry and other areas.