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    AbbVie Inc (ABBV)

    Q2 2024 Summary

    Published Jan 10, 2025, 5:10 PM UTC
    Initial Price$181.88April 1, 2024
    Final Price$170.37July 1, 2024
    Price Change$-11.51
    % Change-6.33%

    What went well

    • Skyrizi and Rinvoq are demonstrating exceptional growth, with combined sales exceeding $4.1 billion (up 50%) , capturing increasing market share across multiple indications. This strong momentum is expected to offset the impact of Humira biosimilar competition and drive long-term growth.
    • AbbVie is confident in the long-term growth outlook for its aesthetics portfolio, expecting market growth to accelerate as economic conditions improve. The company is launching innovative treatment options in key markets like the U.S. and China, aiming to maintain its leadership position in aesthetics.
    • Active business development strategy, with nearly a dozen deals executed this year to expand the pipeline in core areas such as immunology, oncology, and neuroscience, positioning AbbVie for strong growth in the next decade.

    What went wrong

    • AbbVie has moderated its near-term revenue outlook for its aesthetics business due to slower-than-expected market growth, particularly in the U.S. and China, impacted by sustained economic headwinds. This raises concerns about the company's ability to achieve its long-term growth targets for the aesthetics segment. , ,
    • The company anticipates that HUMIRA will have lower access in 2025 compared to 2024 due to increasing biosimilar competition, which may lead to further erosion of HUMIRA sales and negatively impact revenues. ,
    • There may be potential pricing pressures on key growth drivers SKYRIZI and RINVOQ due to ongoing contracting negotiations and the dynamics introduced by biosimilar HUMIRA, which could impact future revenue growth and profitability. ,

    Q&A Summary

    1. 2025 Revenue and EPS Outlook
      Q: How will revenue and EPS grow in 2025?
      A: AbbVie expects robust revenue growth above industry average in 2025 despite headwinds from Medicare Part D redesign and continued HUMIRA erosion. They anticipate EPS growth in line with revenue, supported by operating margin expansion offset by interest expenses related to financing for Cerevel and ImmunoGen.

    2. HUMIRA Erosion and SKYRIZI/Rinvoq Growth
      Q: How is HUMIRA erosion affecting SKYRIZI and Rinvoq?
      A: As patients switch from HUMIRA, around 20% are moving to new mechanisms, particularly SKYRIZI and Rinvoq . This trend is observed across all indications and may represent a downside for HUMIRA but an upside for SKYRIZI and Rinvoq, benefiting AbbVie in the long term.

    3. Contracting and Pricing for 2025
      Q: What are the contracting and pricing expectations for 2025?
      A: AbbVie has multiyear contracts in place for HUMIRA and expects to maintain parity access for a meaningful portion of lives, though HUMIRA access will be lower next year due to biosimilar adoption . They anticipate robust and consistent access for SKYRIZI and Rinvoq with low single-digit price erosion . The negotiating season is progressing, and dynamics are in line with expectations.

    4. Aesthetics Business Outlook
      Q: How confident are you in the long-term growth of the aesthetics business?
      A: Despite a moderated short-term guide, AbbVie remains confident in achieving $9 billion in aesthetics sales by 2029, driven by low global market penetration and expected market recovery. Upcoming innovations like additional BOTOX indications and new toxins will contribute to growth.

    5. Cerevel Acquisition Update
      Q: What's the status of the Cerevel acquisition?
      A: AbbVie has made good progress with the FTC, with no divestments expected, and anticipates closing the Cerevel deal soon, potentially as early as next week. This acquisition adds promising neuroscience assets to their portfolio.

    6. Pipeline Developments in Immunology
      Q: How is the immunology pipeline evolving beyond SKYRIZI and Rinvoq?
      A: AbbVie is excited about assets like NX-13, with anticipated positive data in ulcerative colitis. They are exploring novel mechanisms and combination therapies, including bispecifics and multispecifics like lutikizumab, to address high unmet needs in IBD .

    7. VRAYLAR Growth Amid Competition
      Q: How will VRAYLAR maintain growth with new competitors in MDD?
      A: VRAYLAR is now the most preferred agent for bipolar disorder. Its full-spectrum coverage and favorable tolerability profile, including minimal sedation and flexible dosing, position it well to continue growing market share despite competition.

    8. Managing SKYRIZI and Rinvoq in IBD
      Q: How are you managing growth and potential cannibalization between SKYRIZI and Rinvoq in IBD?
      A: AbbVie has a sophisticated approach with multiple teams representing both drugs. SKYRIZI is positioned as the frontline agent with strong efficacy, while RINVOQ is used in later lines. Cannibalization is modest, and execution is yielding strong results.

    9. HUMIRA Access and Lives Covered
      Q: What portion of HUMIRA lives will continue in 2025?
      A: AbbVie expects to maintain parity access for a meaningful portion of lives, though HUMIRA access will be lower in 2025, potentially around half compared to previous years, due to market shifts toward biosimilars.

    10. Navigating Political Uncertainty
      Q: How will you navigate political uncertainty and policy impacts?
      A: AbbVie models the impact of the Inflation Reduction Act and expects to deliver on its long-term outlook. They are hopeful that future administrations will reconsider provisions that harm innovation, such as price-setting measures, and are focused on addressing patient out-of-pocket burdens.

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