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    AbbVie Inc (ABBV)

    Q1 2025 Earnings Summary

    Reported on Apr 25, 2025 (Before Market Open)
    Pre-Earnings Price$180.37Last close (Apr 24, 2025)
    Post-Earnings Price$187.12Open (Apr 25, 2025)
    Price Change
    $6.75(+3.74%)
    • 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.
    MetricYoY ChangeReason

    Acquired IPR&D and Milestones (FY2024)

    Increased from $778 million in FY2023 to $2.757 billion in FY2024

    The large increase was primarily driven by significant upfront acquisition payments: AbbVie paid $1.4 billion for Aliada Therapeutics and $250 million for Celsius Therapeutics, which far outweighed the change in development milestone payments (declining from $196 million in FY2023 to $130 million in FY2024).

    Acquired IPR&D and Milestones (Q1 2025)

    Increased from $164 million in Q1 2024 to $248 million in Q1 2025 (+51% YoY)

    The Q1 2025 increase reflects impending uncertainties in future asset acquisitions and licensing agreements: Although specific transactions beyond the first quarter were not detailed, the guidance indicates that similar transaction-driven expenses, driven by executed collaborations or licensing deals, are contributing to the expense rise, despite the inherent uncertainty in timing.

    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    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

    TopicPrevious MentionsCurrent PeriodTrend

    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.

    1. 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.

    2. 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.

    3. 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.

    4. 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.

    5. 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.

    6. 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.

    7. 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.

    8. 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.

    9. 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.

    10. 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.

    11. 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.

    12. 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.

    13. 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.

    14. 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.