Q1 2025 Earnings Summary
- Strong Immunology Performance: AbbVie’s core immunology assets, Skyrizi and Rinvoq, delivered robust demand leading to upward revisions in guidance (Skyrizi increased by approximately $600 million to $16.5 billion and Rinvoq by $300 million), demonstrating solid market momentum and strong fundamentals.
- Robust Manufacturing & Capital Investment: The company’s extensive U.S. manufacturing network—spanning 11 sites with plans to add more capacity and over $10 billion of capital investment planned over the next decade—ensures supply reliability and cost efficiencies, mitigating potential external disruptions.
- Promising Pipeline Innovation: Ongoing combination trials in immunology, expected to yield early data next year, along with advancing novel treatments in oncology, neuroscience, and obesity, position AbbVie for long-term growth through multiple therapeutic avenues and enhanced market differentiation.
- Humira's Ongoing Erosion: The continued volume decline and nearly 49.5% operational drop in global Humira sales—accelerated by biosimilar competition—could significantly drag on future overall revenue and margins.
- Pricing Headwinds for Key Immunology Assets: Despite strong demand in the quarter, both Skyrizi and Rinvoq face anticipated negative pricing headwinds over the full year, which may pressure margins and dilute overall profitability.
- Uncertainty from Trade Policy and Tariffs: Potential shifts in U.S. trade policies and the looming risk of pharmaceutical sector tariffs introduce uncertainty. Even though the current estimated impact on aesthetics is modest (~$30 million), further policy changes could exacerbate cost pressures and disrupt supply chains.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | 8% increase (from $12,310M to $13,343M) | Total Revenue increased by 8% YoY driven largely by strong performance in key immunology products such as Skyrizi (+70%) and Rinvoq (+57%), which offset the significant decline in Humira revenue. This shift in the product mix, along with strong U.S. market performance, contributed to the overall revenue growth compared to Q1 2024. |
Humira Revenue (Immunology) | Nearly 50% decrease (from $2,270M to $1,121M) | Humira revenue declined by nearly 50% YoY due to loss of exclusivity and increased biosimilar competition. This situation, noted in prior periods, led to substantial market share erosion and pricing pressures, which continued to impact performance in Q1 2025. |
Skyrizi Revenue | ~70% increase (from $2,008M to $3,425M) | Skyrizi revenue increased by approximately 70% YoY as a result of strong market share uptake and expansion across multiple indications. The product’s robust growth reflects sustained market momentum and successful efforts to capture new prescriptions compared to Q1 2024. |
Rinvoq Revenue | ~57% increase (from $1,093M to $1,718M) | Rinvoq revenue grew by around 57% YoY driven by enhanced market share capture across its approved indications. Continued momentum and strategic positioning in various therapeutic areas, relative to the previous period, supported this significant increase. |
U.S. Revenue | ~10% increase (from $9,041M to $9,979M) | U.S. revenue increased by approximately 10% YoY, likely fueled by stronger domestic demand and improved performance in the immunology portfolio. This growth contrasts with prior performance and reflects ongoing market recovery and pricing improvements in the U.S. segment. |
International Revenue | Modest increase (from $3,269M to $3,364M) | International revenue saw only a modest increase YoY, indicating stable but subdued growth in global markets. The mild improvement compared to Q1 2024 suggests that the competitive and pricing pressures affecting some products are influencing international markets as well. |
Cash and Equivalents | 71% drop (from $18,067M to $5,175M) | Cash and equivalents fell dramatically by about 71% YoY, reflecting significant liquidity changes driven by heavy capital deployment including acquisitions, strategic investments, and financing activities. This sharp decline contrasts with previous periods and suggests a deliberate reallocation of cash resources. |
Total Equity | 82% decline (from $8,047M to $1,462M) | Total equity decreased by roughly 82% YoY, likely due to major fair value adjustments on equity awards and related financing activities. These adjustments, which affected the balance sheet markedly relative to Q1 2024, reflect underlying changes in the company’s equity valuation practices and capital structure. |
Acquired IPR&D Cash Flow | 51% increase (from $164M to $248M) | Acquired IPR&D cash flow improved by about 51% YoY, driven by higher upfront acquisition charges and milestone payments linked to strategic deals. This increase, noted against the previous period’s figures, reflects AbbVie’s continued investment in expanding its R&D pipeline and enhancing its portfolio through acquisitions. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Adjusted EPS | FY 2025 | $12.12 to $12.32 | $12.09 to $12.29 | lowered |
Total Net Revenues | FY 2025 | Approximately $59 billion | $59.7 billion | raised |
Adjusted Gross Margin | FY 2025 | 84% of sales | 84% of sales | no change |
Adjusted SG&A Expense | FY 2025 | Approximately $13.2 billion | $13.2 billion | no change |
Adjusted Operating Margin Ratio | FY 2025 | 47% of sales | 46.5% of sales | lowered |
Net Revenues | Q1 2025 | Approximately $12.8 billion | no current guidance | no current guidance |
Adjusted EPS | Q1 2025 | $2.47 to $2.51 | no current guidance | no current guidance |
Operating Margin Ratio | Q1 2025 | 44.5% | no current guidance | no current guidance |
Foreign Exchange Impact | Q1 2025 | 1.6% unfavorable impact | no current guidance | no current guidance |
Net Revenues | Q2 2025 | no prior guidance | $15 billion | no prior guidance |
Adjusted EPS | Q2 2025 | no prior guidance | $3.26 to $3.30 | no prior guidance |
Operating Margin Ratio | Q2 2025 | no prior guidance | 49.5% | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Net Revenues | Q1 2025 | ~$12.8B | $13.343B | Beat |
Immunology Sales | Q1 2025 | ~$6.1B | $6.264B (Humira: $1.121B+ Skyrizi: $3.425B+ Rinvoq: $1.718B) | Beat |
Skyrizi | Q1 2025 | ~$3.2B | $3.425B | Beat |
Rinvoq | Q1 2025 | ~$1.6B | $1.718B | Beat |
Oncology Sales | Q1 2025 | ~$1.5B | $1.633B (Imbruvica: $738M+ Venclexta: $665M+ Elahere: $179M+ Epkinly: $51M) | Beat |
Aesthetics Sales | Q1 2025 | ~$1.1B | $1.102B (Botox Cosmetic: $556M+ Juvederm: $231M+ Other: $315M) | Beat |
Neuroscience | Q1 2025 | ~$2.1B | $2.219B (Botox Therapeutic: $866M+ Vraylar: $765M+ others: $588M) | Beat |
Eye Care Sales | Q1 2025 | ~$550M | $506M (Ozurdex: $123M + Lumigan/Ganfort: $106M + Alphagan/Combigan: $60M + Other: $217M) | Missed |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Immunology Performance | Consistently characterized by robust growth of Skyrizi and Rinvoq with detailed discussions on volume‐driven gains and modest low‐single digit price concessions in Q2–Q4 2024 ( , , ) | Q1 2025 continues to emphasize strong demand with over 65% combined growth, while noting slightly negative full‑year pricing headwinds ( , , ) | Consistent robust growth with persistent, manageable pricing headwinds. |
Humira Erosion due to Biosimilar Competition | All earlier quarters (Q2–Q4 2024) detailed significant sales declines, volume compression, and evolving rebates due to biosimilar competition ( , , ) | Q1 2025 reports faster share erosion and volume declines; the narrative stresses that erosion remains a key headwind going into the year ( , , ) | Ongoing market share loss, with an accelerated decline noted in Q1 2025. |
Aesthetics Business Outlook | Earlier calls (Q2–Q4 2024) discussed near‐term economic headwinds, market share challenges in toxins and fillers, and long‑term growth potential driven by innovation ( , , , ) | Q1 2025 maintains that economic headwinds persist but highlights innovation (e.g. BoNT/E) and a cautious yet optimistic long‑term view ( , ) | Recurring near‑term challenges yet maintained optimism for long‑term growth. |
Pipeline Innovation and Diversification | Q2–Q4 2024 emphasized a robust, diversified pipeline across oncology, neuroscience, and immunology with growing deal activity; obesity was mentioned but less prominently ( , , ) | Q1 2025 expands the focus to include a stronger emphasis on obesity alongside oncology, neuroscience, and immunology with new data and strategic asset advancement ( , , ) | Broader diversification with enhanced emphasis on obesity and deeper pipeline developments. |
Manufacturing and Capital Investment Strategy | Not mentioned in Q2–Q4 2024 earnings discussions | Q1 2025 introduces detailed plans for expanding the U.S. manufacturing footprint with 4 new plants and over $10 billion in capital investment, also addressing anti‑tariff strategies ( , , ) | A new strategic focus on U.S. manufacturing expansion and tariff mitigation. |
Strategic M&A and Business Development Activities | Q2–Q4 2024 consistently highlighted a strong track record of acquisitions (e.g. Allergan, Cerevel) and early‑stage deals to bolster pipeline depth ( , , ) | Q1 2025 underscores further acquisitions (e.g. Nimble Therapeutics) and licenses (with Gubra) to drive growth in immunology, neuroscience, and obesity ( , , ) | Steady M&A momentum with new deals targeting growth areas and pipeline expansion. |
Trade Policy and Tariff Uncertainty | No mention in previous periods | Q1 2025 discusses potential pharmaceutical tariffs, their modest impacts (e.g. ~$30 million on aesthetics), and mitigation strategies leveraging U.S. manufacturing expansion ( , , ) | An emerging topic in Q1 2025, reflecting rising concerns about trade policy impacts. |
Medicare Part D Redesign Impact | Q2 and Q4 2024 provided specific figures with a 3–4% headwind and multi‑billion-dollar adverse effect on revenue, particularly affecting key products ( , , , ) | Q1 2025 references the redesign in terms of transparency and impact assessment without detailed quantification, indicating a shift in communication style ( ) | A consistent challenge, though Q1 2025 is less specific as the company adopts a “full understanding then transparent” approach. |
Emerging Oncology Asset (Tmab-A/ABBV-400) Potential | Q2–Q4 2024 detailed encouraging Phase I data, planned Phase II/III studies, and potential uses across NSCLC, CRC, and gastroesophageal cancers ( , , ) | Q1 2025 continues the asset’s development with updated plans for combination studies and upcoming data presentations at ASCO, reinforcing its multi-indication potential ( ) | Steady advancement with expanding clinical programs and reinforcing its potential across multiple cancer types. |
Neuroscience Portfolio Uncertainty (Cerevel Acquisition) | Q2 revealed progress toward completing the Cerevel deal; Q3 mentioned uncertainties (placebo effects, pivotal study challenges) and Q4 discussed intangible asset impairments alongside cautious optimism ( , , ) | Q1 2025 shifts focus to positive pipeline elements like Tavapadon with optimistic regulatory prospects, with less emphasis on uncertainties compared to previous calls ( , , ) | A reduction in expressed uncertainty, suggesting improved clarity or integration of Cerevel assets. |
Pricing Dynamics and Contracting Negotiations Impacting Revenue | Across Q2–Q4 2024, discussions centered on low single-digit price erosion, scheduled contracting renewals, and the interplay of rebates and volume growth ( , , , ) | Q1 2025 maintains the narrative of modest pricing concessions but also highlights better-than-expected revenue outcomes and improved EPS guidance driven by volume strength ( , , ) | A consistent trend of modest concessions offset by strong volume; Q1 2025 shows a slightly more favorable contracting outcome. |
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Immunology Guidance
Q: Which indications drove raised guidance?
A: Management raised Skyrizi’s revenue forecast by $600M (split $200M psoriatic, $400M IBD) and Rinvoq’s by $300M (evenly across indications), boosting full-year EPS guidance to $12.09–$12.29. -
Immunology Pricing
Q: What’s the trend in immunology pricing?
A: Despite strong demand for Skyrizi and Rinvoq, minor negative pricing headwinds are expected for the full year, with favorable quarterly pricing partly due to effective co‐pay management. -
Government Policy
Q: How will U.S. policies impact the sector?
A: Management is closely engaging with lawmakers to balance affordability and innovation while mitigating risks from potential price controls and trade policy shifts. -
Aesthetics Tariffs
Q: How do tariffs affect the aesthetics business?
A: The modest tariff impact, estimated at about $30 million globally, has been absorbed in guidance with no major change in demand particularly in China. -
Tariff Mitigation & IP
Q: How are tariff risks and IP domiciling managed?
A: The company employs inventory tactics, alternative sourcing, and robust U.S. investments while maintaining a strong IP profile similar to its peers. -
Drug Pricing Regulations
Q: Could pricing controls hurt earnings?
A: AbbVie remains flexible and well-positioned to pivot to alternative strategies if new pricing regulations were imposed, protecting innovation and growth. -
Reciprocal Tariffs & Destocking
Q: Did destocking or tariffs impact quarterly pricing?
A: Limited retail destocking contributed modestly to pricing dynamics, with overall strong demand minimizing the impact from reciprocal tariffs. -
Advertising Restrictions
Q: Might advertising restrictions affect our edge?
A: AbbVie values First Amendment rights and is prepared to shift focus toward disease awareness if mass media restrictions were ever imposed. -
Inventory & BoNT/E Pricing
Q: Is U.S. inventory sufficient; pricing strategy for BoNT/E?
A: Current U.S. inventory levels adequately support key products, while the pricing strategy for BoNT/E will be finalized during the launch process. -
PBM Reform & BD Focus
Q: What are priorities in PBM reform and BD?
A: The focus remains on patient affordability with ongoing business development in immunology and expanding neuroscience pipelines. -
Manufacturing Footprint
Q: How is the U.S. versus OUS manufacturing balanced?
A: AbbVie continues investing in a robust U.S. manufacturing network while maintaining strategic international capabilities to ensure supply security. -
Combination Trials
Q: When will combination study data emerge?
A: Skyrizi/Rinvoq combination trials have started, with early data expected next year and multiple combination mechanisms under exploration. -
Obesity Dosing Strategy
Q: What is the dosing plan for the obesity asset?
A: Early studies with the long-acting amylin analog showed promising weight loss at 2 mg; higher doses and extended intervals are under evaluation for stronger efficacy. -
Schizophrenia Asset Outlook
Q: What is the future of the schizophrenia asset?
A: AbbVie sees potential for the schizophrenia asset by further exploring higher dosing in a stepwise study design to derive clearer efficacy signals.