- Total Net Revenues: Nearly $14.5 billion, reflecting 5.6% operational growth.
- Adjusted Earnings Per Share (EPS): $2.65, $0.10 above guidance midpoint.
- Immunology Revenues: Approximately $7 billion.
- Skyrizi and Rinvoq Combined Sales: More than $4.1 billion, 50% operational growth.
- Humira Global Sales: $2.8 billion, down 28.9% operationally.
- Oncology Revenues: More than $1.6 billion.
- Imbruvica Global Revenues: $833 million, down 8.2% operationally.
- Venclexta Global Sales: $637 million, up 15.8% operationally.
- Neuroscience Revenues: Nearly $2.2 billion, up 15.2% operationally.
- Botox Therapeutic Global Sales: $814 million, up 9.6% operationally.
- Global Aesthetic Sales: Approximately $1.4 billion, 2.8% operational growth.
- Adjusted Gross Margin: 85.2% of sales.
- Adjusted R&D Expense: 13.3% of sales.
- Adjusted SG&A Expense: 22.9% of sales.
- Adjusted Operating Margin Ratio: 42.6% of sales.
- Net Interest Expense: $506 million.
- Adjusted Tax Rate: 18.8%.
- Full Year Adjusted EPS Guidance: Raised to $10.71 - $10.91.
- Full Year Total Net Revenues Guidance: Approximately $55.5 billion.
- Skyrizi Full Year Sales Guidance: Approximately $11 billion.
- Rinvoq Full Year Sales Guidance: Approximately $5.7 billion.
- Venclexta Full Year Sales Guidance: Approximately $2.5 billion.
- Aesthetics Full Year Sales Guidance: Approximately $5.5 billion.
- Third Quarter Net Revenues Guidance: Approximately $14.2 billion.
- Third Quarter Adjusted EPS Guidance: $2.92 - $2.96.
Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AbbVie Inc (ABBV, Financial) reported a 4% increase in operational sales for the first half of 2024, with mid-single-digit growth in the second quarter.
- The ex-Humira growth platform, covering over 80% of total sales, is expected to outperform initial full-year sales guidance by more than $1 billion.
- Skyrizi and Rinvoq are showing strong momentum, contributing over $4.1 billion in combined sales this quarter, reflecting 50% operational growth.
- The neuroscience segment, including Vraylar, Ubrelvy, and Qulipta, continues to gain market share and is competitively well-positioned.
- AbbVie Inc (ABBV) raised its full-year adjusted earnings per share guidance by $0.10 to between $10.71 and $10.91, reflecting strong business performance.
Negative Points
- Global sales of Humira fell by 28.9% due to biosimilar competition, with further erosion expected.
- The aesthetics segment experienced slower-than-expected market growth, particularly in the US and China, leading to a moderated outlook for the remainder of the year.
- The introduction of biosimilars has led to a significant impact on Humira's market share, with some patients switching to new mechanisms like Skyrizi and Rinvoq.
- The company faces economic headwinds in China, impacting sales growth for products like Juvederm.
- AbbVie Inc (ABBV) received a complete response letter from the FDA for its 951 regulatory application in the US, delaying its approval.
Q & A Highlights
Q: Last quarter you gave some early commentary on how to think about 2025. Any update on how you're thinking about the 2025 outlook, particularly growth for revenue relative to EPS?
A: We haven't given guidance yet for 2025, but we have indicated that we'll be returning to robust revenue growth despite headwinds from Medicare Part D redesign and continued Humira erosion. We characterize robust growth as above industry average growth, which we see in the low-single digits. We expect incremental contributions from Skyrizi UC and 951, and less of a headwind from Humira erosion. EPS growth will be in line with revenue growth, benefiting from operating margin expansion, though offset by interest expense from financing for Cerevel and ImmunoGen. - Scott Reents, CFO
Q: Can you elaborate on the price versus volume dynamics for Rinvoq and Skyrizi this quarter?
A: The strong performance is driven by multiple factors, including consumer investments, sales force adjustments, and the impact of Humira switching. We see about 20% of Humira patients moving to other mechanisms like Skyrizi and Rinvoq. Contracting for 2025 is progressing well, and we expect to maintain parity access for Humira for a meaningful portion of lives. Skyrizi and Rinvoq are expected to have robust and consistent access with low single-digit price erosion. - Jeffrey Stewart, Chief Commercial Officer
Q: Should there be any expectation for divestments or other concessions as we contemplate the Cerevel deal closing?
A: We've made very good progress with the FTC and have certified substantial compliance to their second request. No divestments are expected. The transaction is expected to close soon, potentially as early as next week. We're excited about the potential best-in-class therapies in Cerevel's pipeline. - Robert Michael, CEO
Q: How are you managing the growth for Skyrizi and Rinvoq in IBD across both UC and Crohn's? Is there any cannibalization there with Rinvoq?
A: We have a sophisticated approach with multiple representatives and medical experts for both drugs across both indications. Skyrizi is positioned as the frontline agent, while Rinvoq is positioned in later lines. Cannibalization is modest, and overall share capture is strong. - Jeffrey Stewart, Chief Commercial Officer
Q: Can you talk more about the pipeline in the IBD space and the potential of oral IBD drugs?
A: We have the NX-13 asset from Landos, which shows good outcomes in ulcerative colitis and works through NF-kappa-beta. It has potential as a monotherapy without a boxed warning and could also be combined with Rinvoq. We see multiple opportunities for novel mechanisms and combinations to address unmet needs in IBD. - Roopal Thakkar, Chief Scientific Officer
Q: Regarding the 2024 sales guidance, why won't total sales do better and what were your reservations about raising sales guidance today?
A: We did raise the revenue guidance from $55 billion to $55.5 billion, reflecting strong performance across Skyrizi, Rinvoq, and Venclexta, though offset by a reduction in aesthetics guidance. The implied second-half operational growth is slightly higher than the first half. - Scott Reents, CFO
Q: Do you still feel that your aesthetics business is a good strategic asset for you, and if so, where do you see the synergies within your organization?
A: We like the aesthetics business for its growth profile and profitability. It operates as a fully integrated standalone unit and has exceeded deal model expectations. Despite macroeconomic headwinds, we are confident in its long-term potential given low penetration rates and upcoming innovations. - Robert Michael, CEO
Q: How do you think pharma will fare under a Democratic versus a Republican presidency and how are you going to navigate through that uncertainty?
A: It's hard to handicap the election, but we've modeled the impact of the Inflation Reduction Act and still expect to deliver on our long-term outlook. We support addressing patient out-of-pocket burden but believe the price-setting provisions will harm long-term innovation. We hope any administration will reconsider these provisions. - Robert Michael, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
