ABBV - Earnings call transcript Q4 2017

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Operator

Good morning and thank you for standing by. Welcome to the AbbVie Fourth Quarter 2017 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion of this call. [Operator Instructions] I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations.

Elizabeth Shea

for thanks and morning joining us. Good and the Chairman of on Severino, Vice Vice & President call Chase, and and Executive with Gonzalez, Rick Executive Development Research of Financial are of today President Scientific the Executive Michael Officer; Bill me Officer; Also Chief Chief Board Officer. Finance Chief and

the Private we started, actual from those I materially be that Litigation make we the statements or of get cautions would may statements. you in XXXX. the to may differ Before indicated that statements today forward-looking and considered purposes Reform Act for these cause statements some that to uncertainties Securities are like to of risks are AbbVie results remind subject forward-looking forward-looking

may Report subsequent comparable our result today's regulatory XXXX affect any the release from filings. required non-GAAP by measures to financial today, in past, used can be AbbVie's non-GAAP investors our found On reconciled conference revisions in and Form our in on understand will that are AbbVie to forward-looking is our a with developments, business measures factors included undertakes statements on operations measures the of help performance. other be call, financial earnings ongoing These release Annual AbbVie's financial law. GAAP as publicly which filings website. events as to and or about XX-K in except SEC obligation information no Additional as

prepared our Following we'll questions. take remarks, your

So call to now over Rick. with that, now I'll the turn

Richard Gonzalez

performance quarter update Bill R&D advancements highlights. will XXXX and and detail. will our for fourth I'll in thank more discuss joining our XXXX you us. pipeline, discuss you, Mike quarter morning, Thank briefly an across Good the guidance on morning, This our and then provide recent everyone, Liz. and

will ahead we questions. quarter year impressive and our our delivered your of with always, following results We another remarks, expectations. take As

fourth versus more quarter growth earnings per quarter were representing $X.XX XX% fourth adjusted than Our the the of of share in XXXX.

also of results global performance sales quarterly strong included topline with operational growth Our XX%. than more

strong contributing business momentum as see AbbVie Since financial delivering record clear example growth; We five drivers our from of exceptional continue HUMIRA, three performance. major company an In with consistently demonstrated public track our ago, our years a to top-tier XXXX was of has IMBRUVICA, and performance. inception MAVYRET. that to another

XXXX We continue sales full-year growth to drive earnings execution XX% share in global and of commercial operational growth of resulting strong and per XX%. adjusted operational

global action of XXXX. operational indirect than come. introduction was several performance made the for demand with that also in performance We and full-year of tremendous competition new data from XX% robust growth driven more our are growth pipeline years impressive by HUMIRA have to our progress of from to assets continues deliver market to continued biosimilars. fuel advancing outstanding the despite poised the This with mechanisms

the versus quarter, We momentum growth increase IMBRUVICA $X.X continued than more HUMIRA year. XX% approximately the IMBRUVICA and see full-year approaching versus year. momentum the to year. the U.S. of in In was billion, strong prior prior over of delivered strong strong with also sales prior XX% growth an fourth XXXX growth the XX% delivered with quarter.

approached HCV global We sales now sales billion quarter, the prior is share lines fourth MAVYRET IMBRUVICA $XXX market grew year. in total leader strong are see In $X.X XX% clear therapy. the of XXXX including across CLL continuing HCV million. in to the than uptake Global all were more where of versus sales which nearly

commercialization. our at early stages While the are of still

pleased with uptake We in been international and U.S. both very average strong the markets. have

access In share the our will XXXX the U.S., competitively conforming managed the We we highly across current product with our U.S., days. in have on Based the covered be XX in market. with last much have lives HCV achieved where coming that parity the market XX% the market exited a of that our contracting of access leadership we within in markets of XX%, positioned product care the launched. of most expectations status, MAVYRET have

parity that front. with pleased We we and with payers on continue the that progress making contracts towards are are to work

other very saw perform our a performance in also base Duodopa and and come. LUPRON, years categories, products and such their We strong profitable for continue expect as from Product continue products to several in Creon, to to many business. well we be stable

both bottom XXXX. the growth Based strong again on line this we strong now of projecting to and business, fundamentals our Turning are year. top

on we several quarter the been midpoint. we call, our XXXX at developments reflecting growth outlook. know, third you our initial As since outlined positive XX% are There provided EPS guidance

MAVYRET We and expectations products our from projected. we our other underlying and have internationally, from U.S. outperformance the seen uptake for robust our is very than driving in previously in higher performance guidance. XXXX updated continued portfolio, This both reflected XXXX strong and

items, details growth driven guidance later be top-tier for XXXX. our the passage to underlying of growth the in tax Bill U.S. our call. again Factoring per with both earnings earnings revised growth in XXXX adjusted full-year once saw will in this per the Additionally, guidance XX%, $X.XX strong projected AbbVie year-over-year majority $X.XX. reflects a tax we to we by share expect positions forward. now The will of on provide of reform this being of regarding in share which of This guidance operating going midpoint XXXX rate lower more performance.

U.S. reform in and our For to cash AbbVie, it ability enables efficient deploy to foreign States. tax the United the recent access the more passage of

In enhancing our plan our to years, as employee non-executive $XXX expansion five billion as well in U.S. roughly pension evaluating million next plan $X.X facilities. invest capital compensation. to and our funding U.S. by also accelerate the Over we the additional within currently XXXX, we of are

in shareable access Rico planning rebuilding support be capital return such and our the flow also our local not-for-profit will one-time strong our select an needs. Based a million communities shareholders details Puerto on of initiatives future. to cash to that our we anticipate supporting We children's we near of and specific approximately are those contribution also as in generation, charities increase healthcare programs, efforts, announcing the $XXX organizations,

highlight. innovative which a profiles R&D, strong to development products milestones, relapsed/refractory on among briefly a pipeline we including we regulatory and a risankizumab our psoriasis, differentiated MURANO several with clinical into XXXX, number Phase Moving for We benefits. results VENCLEXTA late-stage the upadacitinib with four others. for of III RA, and from Phase of I'll patient sustained in where have important studies clinical of CLL study saw three compelling pipeline in evolution III pivotal In saw significant from studies for and trials, compelling in data built

MAVYRET moments. across we approvals which just year We made assets including currently XXXX, HCV, in approvals IMBRUVICA, detail and studies front upadacitinib regulatory in in pipeline both our began and And XXXX disease and regulatory relapsed/refractory for several two Crohn's small-cell We in review. remarks lung during priority III is endometriosis, and in And Rova-T also received upadacitinib for including several risankizumab, while discuss will lymphoma registrational significant under graft-versus-host zone we trials in in Mike AbbVie, for few for second-line his VENCLEXTA CLL, arthritis, applications pipeline VENCLEXTA psoriatic Phase marginal mark for and which AML, milestone-filled submitted a cancer. in will advancements chronic elagolix and disease. for and front-line another in

we our well company, we a see evaluate future very positioned prospects, As strong the we on reflect Company a future. AbbVie’s for and performance as

of industry engine across in our an with drive an growth, positioned the XXXX Strategically, productivity exciting of early-stage the margins, a see company of time are at strong in transformational performance. poised to This we is investment pipeline P&L of de-risked becoming product years, pipeline a and upcoming five that have with launches and that significant productive to R&D short, a company evident operating R&D Looking first potential. and high late-stage impressive we significant innovative long-term leading see and assets for assets AbbVie. generated see performing and a is that we our future. is improving In topline we drive growth. robust has well increasingly SG&A for a pipeline The number

XXXX a for as MAVYRET, as In for growth we launch in which story has label CLL we become VENCLEXTA year, has Our begun. well and This only will already strong AbbVie's growth begin major in next-generation launch a contribute. elagolix our assets, to XXXX, will significantly driver just And late expansion launched upadacitinib. relapsed/refractory to will major Each risankizumab of XXXX, us. in to XXXX, add Rova-T In growth. these immunology we endometriosis. will assets

are that we we extremely the we with summary, built. in XXXX have So are foundation in strong proud performance certainly and strong pleased of our

reflected high a our guidance. which business, have confidence is in our momentum of level We the in XXXX of

over call programs. and With Company outstanding are for to and long-term on that, our on our We delivering to R&D industry-leading comments deliver we Mike vision sustainable strategic value. shareholder performance turn the I'll for additional are the poised to Mike. committed

Michael Severino

we Today, the year I'll recent highlight with pivotal important progress for Rick. discuss And to some well ahead. a be our as make year regulatory was pipeline another and several immunology very programs. XXXX with our we productive submissions catalyst several our anticipate pipeline. trial XXXX of expect and you, dozen with In milestones and early a to year. readouts, and risankizumab phase transitions upadacitinib, continue approvals, across updates key we late-stage rich as immunology, Thank great the assets,

on of the month, in indications the of to PASI for We previous PASI patients risankizumab lead for their nearly risankizumab evaluating registrational risankizumab respectively. the And rates program just respectively. compared results and levels PASI psoriasis. we skin study, RA of the XXX this results, XX Phase XX program from PASI we completion III XX% durable patients the the in study and at In with X% consistent fourth final III half placebo the Last and are clearance. achieved and topline reported very X% and nearing upadacitinib saw and Phase and psoriasis pivotal trial XXX of achieved enhanced

significantly upon and in adequate we've psoriasis for effect the we results the reported dosing. and this to III responder and the pivotal durable moderate severe with the believe pleased convenience are look to patients to risankizumab has the strong bio-naive Phase of generated potential offering treatment we date, forward efficacy across our to options submitting trials improve application on four unmatched by half of We current all TNF with year. of and levels have data regulatory Based first we both quarterly with

stage treatment in several remain this potential and development across studies to disease disease, We to also arthritis. new begin of extremely could Crohn's Phase risankizumab expect III Beyond ulcerative year this assets an ulcerative important registrational a including for option excited in is indications, late and other indications. We initiated, psoriasis, about be colitis. believe recently in colitis, range psoriatic later broad and mid Crohn's risankizumab studies

methotrexate. therapy. derm, end points. rheum, low and which stage inhibitor Consistent not other secondary GI Phase results to all month, upadacitinib importantly, And to adequately evaluated primary on of the as indications In the the remission. late the and topline with Both studies, our JAKX and and points, more asset, the segments. the of as endpoints methotrexate in six strong Last a Moving respond DAS end clinical stringent response registrational and III ACRXX, Phase SELECT-NEXT ACRXX, immunology on reported program upadacitinib SELECT-BEYOND key continued now for levels drove currently study, who from a upadacitinib from activity, doses did SELECT-MONOTHERAPY patients from disease monotherapy clinical versus very III such met results all upadacitinib for and we oral development third across treatment RA. selective study

with in profile SELECT new the II consistent detected. Phase with no previously studies safety the safety and SELECT-MONOTHERAPY Phase trials reported study was the signals Additionally, III

today Given in of development. potential advantages products in meaningful to or could the on our be and RA best-in-class therapy its offer profile, upadacitinib market strong has the a

the see from in with to this trials half the expect of first half second RA in program regulatory additional We the submission data two of in our the pivotal year following year.

on Phase products to also to a psoriatic and Phase in we are programs, early-stage studies with the we month. previously Designation dermatitis, ulcerative the disease received potential have from Meeting data AAD continued colitis, immunology spondylitis. is in giant study development. the also significantly next plan late-stage Earlier of such areas plan and and this reported. ongoing III upadacitinib dermatitis, upadacitinib atopic this strong begin based with to results arteritis. enabling movement evaluated month, II at Crohn's We remission Phase the compared bar potential a In to detailed being in is treatment Breakthrough registration cell atopic to studies upadacitinib as with RA, Therapy ankylosing and raise are as where assets the We and addition arthritis disease our in market for durability present year developing the on There efficacy II response, currently in

this II in in including our start early-stage will which for several ABBV-XXX, CDXX We inhibitor key ulcerative Phase Phase JAK-BTK expect ABBV-XXX, assets, year will begin patients. studies which and antagonist our to combination, proof-of-concept begin colitis, II RA studies

We t inverse initiated to expected also steroid recently clinical soon agonist, RORgamma our including programs for begin our anti-TNF key ADC. early-stage or other have very assets, and

treatment-naïve well has already RESONATE-X and cancers. Moving well build our patient and reported disease non-Hodgkin's following and in treatment body the in gaining and hematologic paradigm the reported is the as are and data leading to follow-up other therapies we symptoms. demonstrating lymphoma, new now and we malignancies. recent greater other programs decreases combinations outcomes strong three-year already with other quality ASH which in long-term patients. in IMBRUVICA, therapies, range drive continue At demonstrating with expand is Through to second-line in our patients, of goal extremely a broad to for of where combination CLL RESONATE-X With CLL, alone our evidence improvements in is should IMBRUVICA, to strong and enable outcomes us treatment front-line IMBRUVICA Meeting, position we to IMBRUVICA multiple or IMBRUVICA as setting. better sustained of cancers goal blood long-term to the the momentum as continue such that novel VENCLEXTA changed advance in related study medicines in oncology, two in AML, as These from as activity significant VENCLEXTA. for of CLL life, strong the myeloma, CLL, in

compelling studies will providing population. evidence add several fit to watch-and-wait of IMBRUVICA, in and had more the front-line combination also IMBRUVICA or data in These the physicians in ongoing to We patient the benefits including segments, and evaluate alone supporting young breadth of different the studies setting. clinical patients

begin combination from with we expect our with front-line to and from in these combination to lymphoma combination seeing towards CHOP. data data of end diffuse Phase in Phase trials data We including expect see large in the III III IMBRUVICA studies year, this More near-term, XXXX. CLL GAZYVA B-cell several front-line

believe III the which Moving Phase RITUXAN strong new CLL. our and standard with results, has a ASH detailed treatment MURANO combination potential regulatory profound results negativity from compared treatment now applications these at free of the to VENCLEXTA, Based MURANO relapsed/refractory we the reported Meeting, CLL, combination on with for plus progression in survival be a VENCLEXTA that VENCLEXTA with and option rates recent chemotherapy in we to CLL VENCLEXTA to based RITUXAN improvement RITUXAN showed patients study MRD in free on submitted the in relapsed/refractory We relapsed/refractory of for data. BR. recently

bringing for this treatment approval broader and an expect this market in new to forward indication this to CLL later the relapsed/refractory population. We year look

development programs CLL, in malignancies. strategy with core VENCLEXTA hematological our multiple across progress our making Beyond to we are great expand

as in received key two Therapy where myeloma III AML, becoming studies time with the in we We as progressing frame. These data studies Breakthrough are Designations. well well available multiple Phase have XXXX ongoing have

well now with oncology greater our good trial to our for We the the feedback, Given expectations. following TRINITY for XXXX as the to AML now high-dose programs years induction with in we've to in already progress AML Rova-T, third-line two our our VENCLEXTA year. patients tumor later significant early-stage this approval late-stage with registrational who study ahead our of seen durable in make the to bringing this I program as continues U.S. AML would our receive activity and regulatory data year we our cancer, option to we Rova-T of lung will regulatory look expect in this AML significant pipeline. or where early with application plan treatment turn This in following Starting be progress submit small-cell we regulatory acceleration a represents or to chemotherapy. thereafter. group soon initial new our approximately and of and program as submission quarter later second continue solid can't substantial forward recent in

III both cancer underway. setting continue now trial small-cell in Phase in in with the and MERU second-line study well ongoing studies to the patients the TAHOE advance, lung Our also front-line

also study from potential Opdivo Rova-T and trial with are later in Yervoy mid-stage seeing to We evaluating with this in Opdivo combination and start year. data with the

Beyond an mature the areas in year. than or this early-stage small-cell play in cell that can possibly role where in lung biology progress. from market. T-cell the as cancer tumor that neuroendocrine tumor and applicability we continues immune believe the data therapies we continue will tumor our have cancer, with intrinsic We've environment cells, In epigenetic agents will to new tumor be integral pipeline, These we broader oncology innate And immune prioritized the sharing results or and to based extend study BASKET tumor our study this explore engineered the reach solid of build technologies immuno-oncology regulation, we capabilities later activation, to therapies resistance, new areas existing chemotherapy. believe we receptors. stem tumor on cell target growth, include microenvironment, more

Phase move than in the and have in priority endometriosis these area programs the for from of the an currently is assets We quarter. sharing second forward course And as anticipate application they in and the solid to clinic more the tumor we look mature. year. decision our under women's more of expect currently regulatory review in studies XX finally, health, elagolix approval We to I several over into data the

quarter. have the program In ongoing and we from see will fibroids uterine Phase this program, we III to studies in endometriosis later addition this data

approvals accelerating and full-year readouts forward the turn important over additional transitions, for and Bill continued to advancing performance. data more comments our based and call I'll make we've XXXX. pipeline significant With we our quarter and look on regulatory submissions, that, many to in summary, in So to fourth Bill? progress

William Chase

performance review and our the rate Thanks, XXXX forward. the will the Mike. results our our also overview as walk fourth of reform of expectations tax quarter full-year through an of going tax I'll as provide on Today, impact U.S. the XXXX our outlook. for for highlights and I well

we to in AbbVie bottom than industry year that reported up expectations very top line of earnings the of outstanding year. our among of our top more XXXX, of Rick We peers. share generating XX% adjusted had the performance ahead for compared ranks growth As mentioned, $X.XX, another per XXXX and and

net For foreign an billion, impact $XX.X from modest on up excluding the were XX.X% revenues basis, a full-year, operational favorable exchange.

market the For revenues the U.S. year. adjusted the a ago. fourth broadest Global steady XX.X%. of quarter billion, the across million, up in driven foreign for sales were increase sales volume quarter of demand. sales billion, markets rate. the year were uptake of strong Sales driven the approximately its for XX% indications. strong period profile, IMBRUVICA X.X% basis. exchange. reflecting were the growth net HUMIRA quarter, and reported Full-year $X.X net were operationally operationally by billion of XXXX excluding fourth an and from a HUMIRA operationally on Global International tenders favorable Global an reflecting execution. quarter, $XXX the quarter, total an up position $XXX HUMIRA on the impact which gains sales $X.X global plus contributed reflecting strong range operational year-over-year XX.X% were in HCV in $X.X the in Fourth operational were with the million increasing growth benefited of price. select timing were over increase to $XX.X full-year sales compared the undisputed other unique the growth product XX% indications, quarter CLL sales approximately physicians, IMBRUVICA HUMIRA with from in XX.X% billion market revenues a than were HUMIRA X.X% by $X.X of of basis, X.X% XX.X% therapeutic commercial same leader up XX% in or front-line sales continued XX.X% across remains the more prior billion,

for and moments. U.S. mentioned, XXXX MAVYRET XX.X% outline pleased operational advanced basis. Rick very markets Global sales in just fourth therapy increased the our launch been for of few quarter the and on of international a an we've I'll As Parkinson's in Duodopa, our with disease expectations

XX%, growth X%. Finally, sales we up saw an Creon, and Synagis, for basis operational quarter up almost that in strong more the on

billion previously enactment net items. adjustments quarter excluded the charge the expense XX.X% tax unrepatriated in Adjusted share our related tax earnings XXXX the the of Included dilutive was the was items Fourth XX.X% year valuation gross $X.XX, profile margin Tax to Stemcentrx down quarter, accounting XX% adjusted specified partially XX profile impacts Act. adjusted lower from prior reflecting quarter. turning leverage This and exchange of the In XXX fourth specified to operational In as payable, almost charge was XX.X% spending $X.X and balance the Adjusted result our of than is to sales quarter, of improved of ongoing pipeline operating versus Now our of up items Cuts charge incremental programs. by R&D an per year year, related adjusted in and has P&L the of to EPS the excluding fourth million inclusive primarily the points one-time estimated of to The a and $XXX the was been more per interest XX.X% support the the recorded compared this focus rate related sales, than of hedged on a earnings margin on $X.XX due was for risankizumab by results. and sales SG&A basis efficiencies. adjusted share sales, prior related points tax of continuing transactions. Jobs to we related quarter, net with were sheet year-over-year. partnership adjusted offset prior currencies. adjusted basis in

of midpoint, guidance is during our range the range performance of of from $X.XX comprised $X.XX, contribution growth an our higher XXXX, result as midpoint $X.XX a we than of earlier, over call. increase Tax operating Cuts accounted Relative to today results, At third for this and guidance of to quarter $X.XX tax at mentioned $X.XX our raised I an prior $X.XX guidance stronger reductions performance rate new passed the As to we adjusted Act. guidance of provided the operating increase $X.XX. Jobs and have XXXX XXXX recently the for EPS our

mentioned five legislation earnings, a certain In in years for one-time XXXX tax will now a foreign of EPS on adjusted as as the and the anticipate the a lower one-time approximately income of domestic unrepatriated the X% benefit rate a allow a from historical the We more future law tax tax to XXXX, the previously next non-GAAP modeled addition XX% rate We lower timing investment. tax in XXXX. within to efficient and repatriation of provisions non-GAAP the result result rate. of excluded earnings increasing new of gradually This be will increased a GAAP our on due in foreign of of subsidiaries. benefit phase-in to

fourth quarter of guidance currency a expect this segments taken in reflects well expect topline impact are which $X.X Internationally, XXXX, front-line rates peak from XX% In in expect proactive we continue XXXX billion earlier products. billion, the approximately be to $XX in as the foreign an actions and current important the of for sales biosimilar maintain guidance entrants quarters. the approaching This X.X%. across therapeutic as roughly growth year. we impact the driver. revenue growth to as U.S. assumptions in exchange sales includes approximately will of key in therapy its HUMIRA to XXXX, XX%. we favorable position of leading and assumes strong this the following direct at our On Included

sales expect sales billion. in a on For IMBRUVICA, HCV $X.X we than expect revenues billion markets. successful to and U.S. $X.X launch, between global MAVYRET U.S. we with will billion XXXX $X.X split above of global Based OUS equal with AbbVie just exceed the greater roughly

expect For in VENCLEXTA, sales million XXXX. $XXX we above

mentioned, VENCLEXTA half MURANO submitted look As VENCLEXTA and the of setting plus data, recently the in second forward expanding we applications in this broader into our the RITUXAN Mike on we for based relapsed/refractory to year. CLL regulatory

For sales XX% Creon, expect in XXXX. we growth of

We XXXX are million. sales forecasting approximately of AndroGel $XXX

[$XXX in XXXX million]. Duodopa, For expect we approximately sales of

We this of $XXX be recent and less level reflecting non-cash a quarter year-over-year. on we are charge And for of forecasting reflecting to impairment Synthroid, introduction performance, ZINBRYTA an than and $XXX the fourth Synagis, projected alternatives. assets. we roughly of of of million changes expect the labeling recorded ZINBRYTA in flat related Based sales Lupron sales million competitive

a second for are elagolix regulatory decision we Finally, in expecting the quarter.

for asset provide approval and specific been duration guidance will this when We established. following pricing the of therapy have

on currencies. Turning XXXX, we ratio partnership the of current and are This is P&L approximately now adjusted to impacts gross accounting exchange of an margin for inclusive XX%. forecasting dynamics hedged

We are forecasting to R&D progress roughly late-stage mid-stage expense numerous sales, continued our pipeline funding of an increase support XX% in of which programs. across reflects and

XXXX. AML. potential This just activities VENCLEXTA and endometriosis, well elagolix be related as in to SG&A spend incremental sales. relapsed/refractory to and XX% launching we expect market XXXX in We broader CLL for over XXXX, of the maximize and in sales includes the of investing launch assets In will be as the order to

percentage of topline. SG&A in due of immunology growing will rapidly we sales XXXX. we addition, and be anticipation In making a our investments as decline Despite expect to these to investments, oncology and launches

XXX For roughly forecasting the incremental launches. of we are XXXX, inclusive basis approximately above margin points our an of XX%, investments upcoming operating XXXX for product

net XXXX expect interest $X approximately We billion. of

first our quarter Now outlook.

specified have impact foreign approaching on the earnings the reported as expect to would favorable excluding a current We share items. first approximately mid-teens. revenue first sales $X.XX $X.XX $X.XX operational We of levels, at between and growth exchange anticipate expect X% exchange constant in rates growth we Holding per adjusted quarter quarter.

at Holding mid-teens. the from prior low-teens. global expect growth For single-digits. year growth Internationally, in we U.S. over exchange growth the in impact HUMIRA, would mid operational a expect sales favorable currency foreign expect we the resulting levels, in reported we current quarter the first in rates sales sales constant

U.S. the quarter. in single-digits mid in quarter over expect sequentially the we grow the fourth sales to IMBRUVICA, For first

first guidance quarter most compensation Our approaching fourth the lower on among for of closing, the our reflects representing that our the reflecting full-year puts year. X% delivered guidance each our we an for EPS tax the our In range the for quarter once than XXXX industry of adjusted is the quarter pronounced performance in of and benefit expectation guidance tax midpoint full-year equity in effective and fact outstanding top again with us of growth the the rate peers XX%.

will build and We we our over to strong are Liz. And advance I call our well priorities. strategic the with continue on back positioned momentum to to that, turn

Elizabeth Shea

Bill. Thanks

now will call please. well Operator, We first question. the open the take for question

Operator

Rubin first Our question Instructions] [Operator you. Jami today from is Sachs. from Thank Goldman

Jami Rubin

grow team want about Thank – you. going And and tax you so shareholders, and a that's dividend. about even you're to of I or sitting I continue that with through Rick wanting to performance. spectacular of talked congratulations forms talk one increased on return and ask is on cash to just rate, those do more normally to your cash about to an pile say, lower

back changes? your Going might anyway it secondly said thinking to completely how you talk you is it been returning XXXX, payout think XX%. I has post you down acquire as as your has need a time? has come comfortable your said it XX% about earnings maybe those you were at you you've over sort to I that that? range options M&A? dividend related current far know market thus be entered trading seems payout the XX% announcement give biosimilar significant of as that you use about thinking grown, us got strategic at give U.S. you Thanks. have Can has dividend you XXXX that high that could of best-in-class stock about will but lot time, that anything if And some that you're desire discount. your then gives but cash assets growth beyond be that questions. that you when given you the that about obviously, that same forthcoming, additional as has a color have are are XXXX? a big my you to didn't So when How to before the by don't now, growth Would

Richard Gonzalez

Rick. is Jami, this

tremendous on two first perspectives, and we business, for if as how So think fortunate been I’ll on But performing growth complement, the a have look and about is have have cash strong at deployment future. think level as a at our that very we has cash flow foreseeable organic for the with business you performing about capable and position of is amount the But a capital we specifically pleased we're talk and generate how you as we're business well. of driving certainly to you well. business I high a thank highlighted

at to I drive business is sustainable sure order invest the deployment, continuing capital us can our we’ve for that we investors, look growth. the make the organization. can we philosophy that is to the first the back in to we've commitment long-term that as tell that top-tier That's you priority in made always made to So commitment

what we be to that. do we always to And can looking so able at are do

program that we might good where frame we feel a that what ahead I Now we as strong our with clearly our late-stage time we that pipeline, verticals in new but focus what opportunities horizons, if fits our drive do have we that of have pipeline that, late-stage out our you strategy constantly confident confidence XXXX within we that's looking at as the at. drive growth at that that we is look at growth well say can other both franchises can are can that. would we internally, we call looking in for primary operate XXXX, fit there is that XXXX, look we’re

assets it oncology focused constantly those our a the of could we're well, looking it things. places that high not a attention flexibility and we're early-stage valid have would It’s one that's only of transactions fact is has a risen, growth are this an area that year, priority certainly assets we're that in looking, say done So at both but amount obviously in and our P/E other assets of neuroscience. that points other number areas give that looking time and on. your we the for we'll as help kinds window. certainly tremendous does further I frame do more to and look as in are And in in accelerate early-stage at we've

we're we're a to that and acquire something having return financial or we're the looking kind look we give at to that of a accretion path to you meet that, transaction and internal also of for. down doesn't tell can said looking the criteria that that get would that go Now willing we not us the for kind our of it I out has always return

look are those so And that always we factors at. important

cash tax flow look did For though, we we more in XX previously. And that of business next reform, that generation if cash generates tremendous amount efficient to across cash. the at is much our have a access than we way cash now years, this a with a

So cash to with it gives appropriately. flexibility deal be us to able more that

at look in able be want our can faster be we flow to the business, to at flow are. I level needs that you what what look we that cash if we grows believe those needs that sustain the of cash to to tell we and performance So we than sustain able believe

return actually was times, we tax able we've tax became a So be it to several reform, likely is when that – reform for shareholders. And as reform we've if been XX that then for look additional now clear said so, occur. last would way to pretax there to us evaluating days to or capital to

and have board worked think a always back I’ll It make you in changes our up to does have in can to we've proposal approval. to order second. that this dividend. area. a I that come But us commitment strong require that assume we growing in We a dividend for demonstrated here

XX% dividend company. we our to new so grown we've think far launched since this I

buybacks. you be assume can And combination of a more of so and you describing would I that dividend I'm what think acceleration share to growth the

our board. obviously been Now through it has

February. make And a the intent, intent meeting point. that proposal post to our It meeting. will at that with the we have my in scheduled announcement an board board is board review We

to So but going be. certainly I say it but is want comment way month you're the of investors that the ratio would I illogical here an preempt don't beyond not. that on February. are thinking to would describe I to about not of wouldn’t what payout want much, it, you I in What would say you to clarity have

far too idea off not a it's good what have we're of you'll So describing. before

Jami Rubin

Thanks very much.

Elizabeth Shea

Operator, question Jami. will please. the take we next Thanks

Operator

Thank you.

from next Jefferies. is Holford from Jeff Our question

Jeffrey Holford

much. congratulations and the particularly on recounting [indiscernible], really move nice And as first deserved while into Puerto it, very just Thanks Rico. well

for thanks that. just So

this for impact does not on from to as be on you First that you, question include tremendous outlook, mean I share understand your through momentum any XXXX got repurchases, needs obviously pushed I earnings think here. I

be confidence potential recently term if it, then a any I there's margins to well. you around timing because comment fair a favor this Second, file might thoughts XXX%? pushback because something seem if it – your accelerated it of be headroom put the out. accelerated of your just just – care would Thank your it's as express wonder to that around in get shouldn't wonder This I something say is I you. guide, launch year, share here it's Rova-T on reason to particularly basis? So let do revenue can to for long-term program, that around a keep thoughts And not you tax, the would that and really that when on just level improving longer guidance any just you of Is it and on more ability clear progressive fundamentals on why still repurchase. lot underlying

Richard Gonzalez

Okay.

color most take the as that those the I well. third may of but and Mike Rova-T on will give that, on I'll one, one, So in chime on have you some

of now built in have shares of that's we we we a some at have of is repurchase And accelerated would or will after it make we done ratable look decision we would more that of meeting would not So consistent is buyback approach do. an describe to incremental until to XXXX, not say, whether to typical a if have built And we're board commentary would but prefer typical that a I we share you, on repurchase something or share I right to the not I'd be have, basis. in at we kind as wait an point how be normally were after our level more what so will a that.

in tax when added at that we've reform business, very space guidance, seen our strong. On from look guidance long-term the our positive impact you I long-term excluding mean clearly we I fundamentals would And on business is fundamentals, projected have what our I the is group. for to think I would our are my improve. continue the on made of the what we of our The comments, certainly be tremendous I mean fundamentals end say top in tier AbbVie. point growth peer front

to but of financially the marketplace the have a they on example they is impact bringing the of that impact on that the kinds patients can importantly, that can the and good most have make two bring business, to MAVYRET products think I we're tend hand lives, financial when And it about to our you truly impact follow. is the thing they rewards tend an in in go on products business. those the hand nice patients that

I well and feel performing to numbers, I going how we're we knowing I'm you, about So the the night good and new going where future. at would a tell not in fundamentals sleep we're give you but

feel for it. gives So think probably some that us I

we Stemcentrx and Our platform. data confidence to looks Stemcentrx a what on we predict the of changed. enthusiasm don't can nothing But the with authorities, Rova-T to I has have to mean I the acquisition not into so we changed. went know more level have I around like regulatory we Mike, want anything there see have interactions with add? that is and that. you would But the has say than

Michael Severino

No, shown that think you huge studies and covered data unmet a there's Rova-T clear I it, medical need activity. Certainly show early-stage Rick. the from with the publicly we've

remains and with continues to of the file therapy, of earlier randomized BASKET will and progression our the making well. BMS So partnership in as in program with our data and plans the studies We'll data, TRINITY following remain in study those see in second Phase quarter studies unchanged the progress in good III progress lines doing I-O we particular. remainder and the those we're combo study the to plan greater. there, or for third-line

Jeffrey Holford

much guys. very Thanks

Elizabeth Shea

Thanks, we’ll please. Jeff. take question next the Operator,

Operator

Thank you.

next Steve Our from from question Cowen. Scala is

Steve Scala

so much. have I questions. you Thank two

ABT-XXX, say a on the the the you've very an given SELECT-COMPARE? trial safety tax trials. anything you Can that XXXX. SELECT-COMPARE on the the the primary SELECT said that in to trial Can XXXX would in of profile you important to completion had rate you guiding the post Bill, seen to then some It's largest XXXX? October And from as provide increase of much. increase X% you First Thank it's you're that the XX%. in pace perspective gradually of

William Chase

Bill. is this Steve,

pretty just one-year linear. much more you model does It that think not a impact any straight others. really I should line than

So pretty for line linearly. purposes, I modeling much straight it just

Steve Scala

you. Thank

Michael Severino

respect so And study blinded. remains that with to SELECT-COMPARE,

about the on confusion progression, is some causing program, then be term innovation component XXXX structural until two response structural that component is for that of and might an ACR based what study data traditional has complete. blinded DAS remains and structural think longer study October of components, and I that looking measures, a

coming we And for our that we the year that see expectations and sorts and the for a so observed. will that's molecule We where a be continue to very feel good when of about both unblind the study profile is would safety in across that's program, first that's being and with of we've consistent treat, those upadacitinib profile data molecule developed. this we the the the safety profile Overall individual. we this when talk half study of would in about diseases

Steve Scala

Thank you.

Elizabeth Shea

next please. Steve. Operator, question Thanks

Operator

Thank you.

from from Chris Schott is question next JPMorgan. Our

Christopher Schott

Great, thanks very much.

I questions HUMIRA, we bit the U.S. understand maybe XXXX on the us from market question, your components be a any first, outlook. on there? help on might a My HUMIRA guess an hearing little of side. specifically your specific a just it international think pricing like volume versus was two some dermatology the price front more competitive question the comments in we're Just as about XXXX. competitors dynamics the bit that's Actually, seems second area on

how more Thanks about ahead I actions so a later you're think there this in just entering proactive could franchise say broadly the mentioned wish see managing making as biosimilars market much. biosimilars think little HUMIRA and what of year? are competition. thoughts updated we doing the you you bit comments you about some I you the

Richard Gonzalez

Chris. thanks is Okay, Rick. This

why the have And of we level I of I a obviously nervousness competitor you because see how in some can would understand relates our it around price. answer or Company. be every bit think and maybe broadly I'll it’s answer Certainly claims give a investors to specifics HUMIRA more HUMIRA. product look as victory, some can I broadly it's but can helpful as think I quarter, the Bill hiccup Bill question flagship more think you primarily, U.S., volume single to has specifics a we and that. maybe it But HUMIRA business driven layout more around then the volume a for

and dramatically. brand extremely consistent brand, been has if three The back if growth, grown you to able down has it's has at it healthy. So of fairly to dollar grown, absolute you grow. if the if look you look ability want to and somewhat that This years, is a understand four look the the or at the as to you the step and the growth what come HUMIRA continue are the performance of and percent last rate brand be performance key parameters at longer-term of but its you

managed So would say we're done XXXX. position all it our care. in And I with is now negotiations in with starts of what your

way same. hasn't one from States. that Our very so the the dramatic very, managed or in for pricing changed care moves another The perspective. the We there's position United not any a strong brand, is maintain fundamentally position

very You attractive overall markets, XXXX. themselves big a What the we're see growth for described can describing projecting. markets standpoint. and from then are we're had look they're what at Bill and growth, growth The XXXX, these XX% you but – markets

single-digits So thinking high you the if growth the just should double-digits in you it rate, at of low as to be United market overall look States.

not the IMS single-digit market. overall, market. look to about quote in very The latest next important we data Derm, October the about January the first-line XX%. rapidly. what more gets highest do rapidly. reason else. into so we market mid patient most I'm Rheum, single-digit the the control Fundamental data XX% RA again is and growing want growing thing consider the that is if And share, you rotates market And brand source data. first-line in growing something GI big is points growth, through date, that be what your mid does XX%, the from going is that to brand so why the a of the is the have. that’s reliable is at X%, obviously the to of patient is level which this opportunity which to growing say then that put big to Let’s more you

leading future your on of a stay will where that the for brand. maintained, patients the it's well share are So indicator they go in

an whatever move to that brand alternative. aren’t patients maintained, they well For that is

at So first-line if you our share is look RA, XX%.

at it's PsA, XX%. you If look

at it’s you psoriasis, AS, at look you you if if look it's XX%. include Otezla, If XX%,

segment, really Otezla XX%. slightly because competes Otezla exclude a in you If it's different

look Crohn's and UC, at XX%. you it's If

we as at across very Then describe the thing agent have is positions patient to first-line as carefully want naive what look and essential at want we is first next brand, switchers. the to population So you that look every which category. the strong single you

at if a of so here sub-segments segments you And each the do look and minute. to the in I'm going

number UC, So if every in categories. you those look one one at RA, SpA, PsA, psoriasis, AS, of Crohn's, and single we are

Our position varies well XX%. to from XX% over

around our some competitors color are, the four. about from you I’ll commentary SpA, same where number bit heard take if is that, they give little data a so You've but on COSENTYX based of you

take you four. is If COSENTYX PsA, number

you three. If is COSENTYX number AS, take

number COSENTYX five. is psoriasis, you take If

you If number Crohn's, take is STELARA three.

take you If number five. STELARA UC, is

what's where execution. happening with volume significantly. GI, volume, every our single the we're our in So And very derm, and when is volume? as then growing I And final feel HUMIRA look look thing at sits about at that confident you position, rheum I in category, our

peak maintain decline to will volume And tremendous volume maximize a On so the OUS, profitability start U.S. certain we we're that and I the and the the gradually within to time. expect this going. try at We've just where and parameters business, the year amount then to all compete in of ultimately have health for along health of look also we brand HUMIRA brand. said can I and said the of have that to of confidence over we

hospitals Portugal. be it effectively. and is feasible are to be controlled will us so put primarily intent Europe, primarily with by able we where So to in proactive That's countries our negotiate Spain, to to a position like hospitals is position places taking to Italy, do. that those actions so markets our Southern be in Those to maintain able in

done we that when that action European some indirect that in already Going forward, we've entered doing those and and biosimilars we successful have marketplace the started were now markets. in of

you have impact actions and volume, in So as what see be described most that's price, on take. by a will some offset cases will proactive it we we that should

William Chase

in volume, you as the my being remainder on for volume, XX% price I I said Chris, comments priced. think the quarter, growth, just of the think XX%

we where a still year-over-year which that of single-digit volume projection got mid range would As high expect stick, the that then in U.S. to look XX% you price we growth a imply to XX% XXXX, at of single-digits.

Christopher Schott

much all Thank for the color. so you

Elizabeth Shea

take Thanks, please. question Chris. we’ll Operator, the next

Operator

you. Thank

from Our next question Barclays. is Meacham Geoff from

Geoffrey Meacham

for thanks and guys, question. morning, Good the

Just had a few specific ones. products

Japan, a VIEKIRA? across reimbursement Phase III. front, On are there full duration OUS? and then all in of our stocking Europe I designation like how initially was atopic just things outside And sense think dermatitis, study terms versus the getting the guys. factors you from U.S., the curious the and getting then you but different how it about breakthrough hep missed MAVYRET? C about for versus Is shorter price upadacitinib there have think may to alters example guys today on like you your for U.S. that? thinking I design for for the and of with Mike, it, do Thanks any scope I'm really get whether at want And

Richard Gonzalez

inside HCV outside so the the take the or question. Yes, for stocking U.S. I'll MAVYRET There was no U.S.

is And as usually is negotiated you each the OUS, and price done so United It's far some States different. outside price As benchmark compare against benchmark. that against basically country-by-country. how country

reimbursement we've in the and quite larger many gotten have We European of done countries well.

So Germany is an example.

the have Germany. number position We one in

in UK. number won the the have one Spain. We position tender We in the

the in We Italy. position have one now number

We in launched Japan. have

the once So or Japan in one and the have or the were reimbursement. bulk not forthcoming. we is I'd yet have that launch getting is of of in France. launched in we reimbursement approval either ramping and reimbursement we'll large and reimbursement has rapidly have But have That countries say process gotten process The Japan. are that we the country

Michael Severino

typically we've this actively activity we and reflects we those clearly Okay, and Breakthrough With atopic that we Designation III that interaction Breakthrough is members been program. in to about you feel very of to our very Phase has Mike. of lot have the helpful direct a mind FDA the current including data. at the you so of good currently designing program dermatitis, upadacitinib very today Designation it respect think what and stage And the are with is shown successful development Therapy of The very gives the wouldn't is access that senior program. FDA, that degree Therapy has because

now. So we're having those conversations

the I to the registration dermatitis. very think in for to designing that program III is going upadacitinib helpful it are is those That reasonable in program the will that conversations inform, to in lead Phase atopic U.S. us assume to very

in all and the course, we world registration work is a leads going are underway. that other currently Of also to to around that program design jurisdictions

to about get able going we'll is the talk program to little and said start you a we bit in we'll bit to like. half this first So as studies those we look be closer study year that to more a start, of as what

Geoffrey Meacham

Okay, thanks.

Elizabeth Shea

Geoff. take the please. Thanks Operator, next we’ll question

Operator

Thank you.

Geoff next question is from Our from Leerink. Porges

Geoffrey Porges

very and you the results. again, on congratulations much, Thank

expect of wondering and price the of if seeing. and to U.S. in for you're the of that terms the also the a what HCV, cost suggested So on they market expectation first in quick that’s your year treatment your the middle volume few stabilize in terms sometime questions, or competitors both patient,

to might study. combination lastly, course, this Secondly for the in And data in cash bit then de-levering path the you just on of and you’ve what give and and about naturally is VENCLEXTA Bill company, first-line you little very all might you indication it's wondering CLL encouraging got VENCLEXTA, that’s feasible of of IMBRUVICA a could flow. a that obviously if be do leverage if us first-line, is any with talk

leverage that might how of company alter you and future appetite does Thanks. So about thinking for your the you are the how affect in the M&A?

Richard Gonzalez

Okay.

then Bill take and the and HCV, the Mike take second, can can I’ll third. So take

if market volumes. we at looking at parameters the the is describing, two So look one in treatment we HCV, are the U.S.,

We little also a could I bit been be expectation going a downward it prior. it single-digit this that flow volumes to kind a around little the some described the bit, we we holiday continue priced something has from should It's over difficult that volumes product holidays. and We And to saw over current was say are a we generally ebb that the down to there some predict time. X% I'd maintained say where market at that the tail see it level agree forward. bit. was pricing I’d but assuming the forward. We treatment whether treatment or off but our not it's pressure. it that have and say obviously was is public channel I'd in of where stabilize pricing that volume the more moved has X% would going that But driven, of pressure,

payers. non-exclusive a – big with the has contracts not parity for And been seeking been have contracts We therefore, issue pricing us.

expect and going price I forward. So stability would hope

Geoffrey Porges

Great.

Michael Severino

Regarding front-line. question and past to respect the with to VENCLEXTA

already have at one are, in patient studies, some and in IMBRUVICA population, well. fit arms the actually illnesses more combinations combinations, And or Those underway in there we with RITUXAN. those as two One an older GAZYVA look on combination average. CDXXs in the population younger, setting. front-line of So more studies patient studies with all comorbid like VENCLEXTA

we're exploring already. the in multiple combinations front-line So

William Chase

the topline as right said got And we with are LRP the very, blessed Geoff We're look balance sheet, comfortable very a that pretty now robust growth on flow. with Rick and obviously our on line. the has balance cash robust we've bottom sheet,

deleveraging our the Therefore, So number we have. to the we one growing fact of by just rapidly. would leverage absolute will very of not virtue priority business have that be down is amount take a natural the

be We to have overall see capacity a think not number may would pursue take we priority obviously to take one that it's have our to extent as wise maturity, us out down. but to maturity leverage the adequate the You that we balance Rick magnitude shape from in in of near-term. And balances of at good I the top grow going that pretty standpoint. we'd as said, so the think to be pretty a any our fast sheet looking M&A cash on we're are do, that,

Elizabeth Shea

the All right. please. Operator, take question we will next

Operator

you. Thank

Bank Our from America. next question is from Jason of Gerberry

Jason Gerberry

question. and for Hey, good taking thanks morning, my

we I with think setting, XX% time, proportion mix? peak your setting? question sort in just should it question my or color getting peak of envision so us changing time second read five five the composition only on IMBRUVICA years, Thanks. the First the had in will last tax as what a I in you anything the just in timeframe give you into to setting you'd the to reaching out second-line sort I years HUMIRA potentially in mechanics out five on anticipate then you the guidance relapsed/refractory of happen share. penetration is reason years, of of can the relapsed/refractory just you know the on the and gave just about curious little of how hard it’s – in can quarterly think the update, the know market years five walk pace a the through VENCLEXTA, profit your regards portfolio And changing

William Chase

Sure.

the was us mix from model right I think for Look, rate it perspective guys important change you That of a approximately the business with non-GAAP income. on guidance long years we X% range for rate. most over out So gave. on coming giving revenue to U.S. tax some to the said, that purpose put that products the for number will tax. and is notably That increased our XXXX driving

businesses should And impact impact that's have taking you rate tax think it why lifting VENCLEXTA of of will the will say I cetera. those IMBRUVICA, the like as And gradually up. rate? look an that grow, products the have I at et

Richard Gonzalez

describing an Okay. On important VENCLEXTA, I you’re is think what phenomenon.

IMBRUVICA. patients expect well about off maintained have does So will IMBRUVICA We population be taken patients will today. of treated in would not roughly XX% – of the the relapsed/refractory be

would significant will fail So that on progress were expect as of the that be those would based VENCLEXTA of options we a population. they business patients and patient to get and other piece that then treatment or data given

will that it as there'll some which of are that in more are treatment of on today. represented trade-off bit patients position. gradual on those number. some current definition this all, be kind XX% treatment it by those be grows patients So other that means Obviously, at between a of that because IMBRUVICA's are There aren’t it roughly

those of progress. Some will

the a ramp mix But within expect that of fairly will it's but progression patients ramp population things. VENCLEXTA on available. quickly, population those would that of will So available time over become going based all it will I those be forward within that then the

Jason Gerberry

you. Thank it. Got

Elizabeth Shea

you. one Operator, for more have Jason. we Thanks, question. time Thank

Operator

you. Thank

Bank. from Our final Deutsche from question Gregg Gilbert today is

Gregg Gilbert

rate this up not the that you're this Mike XX% Thanks. for would it that next and reinvestment Bill, be non-GAAP rates, through reassess back changing but tax of benefits now approximate rate rate, on guidance, XXX? assume tax year those the as on sort cash to levels fair fully through what's for anything about conceptually or Rick flow I lastly would long-term new And year, you know you the know secondly, sort the will and of Thanks. well?

William Chase

Yes.

of we've that’s given would discrepancy So I taken and to years looking period hitting or five-year close. you think that will fact our five-year rate. the billion The five would that exception be XXXX. the one that’s over over the that a But similar paying be in cash think $X.X the rate some will and from next backend the a Obviously, different. charge we so very [indiscernible] that flow that payable period eight that over at that business than off that loaded of little one other to be should cash be perspective pretty years, area

Richard Gonzalez

Yes.

to long-term the over benefit, time. benefit would be through we able tax flow tax the expect On the to obviously guidance and

Now there's from an interrelationship do standpoint. between what would M&A you an

R&D those dial say were and speaking, something, with acquire view we risankizumab, flow an you you example expenses. incremental you obviously benefit we just going generally an R&D should But did the would that that burn tax as to forward a benefit had if in as like significant would through. So I Stemcentrx

Michael Severino

conjugate a front-line brain drug to our now. study glioblastoma has in survival right primary endpoint. That And primary as cancer. XXX, with overall multiforme, so That's antibody respect our in that's study

event be would based to That study approval, on we results. support trial. is the an obviously sufficient driven So

So but predict read more of next exact have we Q&A when out, that that time to study year. can't End would front-line the we'd expect sometime information from

Elizabeth Shea

Thanks, concludes Gregg. call. conference today's That

to a please Thanks like at again the of visit our call, you'd us. listen for replay website If joining investors.abbvie.com. to

Operator

conference. you. And Thank conclude this does today’s

this You at disconnect time. may

AbbVie (ABBV) 26 Jan 182017 Q4 Earnings call transcript