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    AbbVie Inc (ABBV)

    Q4 2023 Summary

    Published Jan 10, 2025, 5:10 PM UTC
    Initial Price$148.47October 1, 2023
    Final Price$154.97December 31, 2023
    Price Change$6.50
    % Change+4.38%

    What went well

    • 1. AbbVie's neuroscience portfolio shows strong growth potential, particularly with the launch of ABBV-951 for advanced Parkinson's disease.* The company is establishing a new high-efficacy category, with positive uptake observed in Japan and Germany following recent launches.
    • 2. AbbVie has promising assets in Alzheimer's disease, with three Phase II studies expected to read out later this year or early next year.* These assets could significantly enhance their position in the Alzheimer's market, addressing various symptoms with differentiated profiles.
    • 3. Exceptional commercial execution and efficient R&D investment have enabled AbbVie to successfully navigate the Humira patent expiration.* The company's ability to quickly address challenges and focus on assets like Skyrizi, Rinvoq, and others has led to continued top-tier financial performance.

    Q&A Summary

    1. Immunology Growth Beyond 2027
      Q: Will Skyrizi and Rinvoq continue growing post-2027?
      A: Management anticipates robust growth for both Skyrizi and Rinvoq beyond 2027, driven by significant market opportunities and new indications. They expect Rinvoq to have a higher growth rate due to up to five new indications, but both therapies will grow nicely, capturing significant market share in expanding markets like atopic dermatitis and IBD.

    2. Humira Long-Term Revenue
      Q: What's the outlook for Humira's tail revenues?
      A: The company expects Humira's U.S. tail revenue to emerge in 2025-2026, but will provide more specifics once the impact of biosimilars is clearer. Internationally, they foresee a gradual decline due to final waves of biosimilar entry and share shifts to newer agents like Skyrizi and Rinvoq.

    3. Part D and IRA Impact
      Q: How will Part D redesign and IRA affect growth?
      A: The impacts are included in the company's long-term guidance. The Part D redesign starting in 2025 will create a few points of growth headwind due to higher cost sharing, partially offset by volume gains from improved abandonment rates. They also acknowledge the IRA negotiation process, noting it's premature to discuss specifics on Imbruvica pricing until finalized.

    4. CEO Succession Planning
      Q: Update on CEO succession timing?
      A: CEO Rick Gonzalez stated there's nothing new to report but detailed that the transition will occur when the company comfortably navigates the Humira LOE and the business is performing well. The board is actively involved, and an announcement will be made when appropriate, likely with Gonzalez serving as Executive Chair during the transition.

    5. Neuroscience and Alzheimer's Pipeline
      Q: Thoughts on upcoming Alzheimer's assets?
      A: AbbVie is optimistic about its Alzheimer's pipeline, including assets like ABBV-916, which may offer a differentiated profile with potential for subcutaneous dosing and lower incidence of ARIA. They also highlight ABBV-552 and collaborations like emaracladine with Cerevel, aiming to address various symptoms of Alzheimer's with innovative treatments.

    6. Obesity Drugs and Aesthetics
      Q: Impact of obesity drugs on aesthetics business?
      A: Management has not observed any significant impact, positive or negative, from obesity drugs on their aesthetics business. They believe these drugs may reinforce long-term growth as patients become more engaged in their appearance, potentially increasing interest in aesthetic treatments post-weight loss.

    7. ImmunoGen Acquisition Plans
      Q: Strategy for ImmunoGen's ovarian cancer drug?
      A: AbbVie plans to move the drug into earlier lines of ovarian cancer therapy, including first-line maintenance settings, by exploring combinations with existing treatments like carboplatin, Bevacizumab, and PARP inhibitors. They acknowledge longer progression-free survival (PFS) and overall survival (OS) in earlier settings but are committed to starting studies as soon as possible.

    8. Operating Margin Expectations
      Q: Will operating margins expand in 2025?
      A: Operating margins are expected to expand starting in 2025 with the return to robust growth, continuing steadily over several years and peaking at around 50%. This expansion factors in the full-year impact of recent acquisitions like ImmunoGen and Cerevel.

    9. Future M&A Plans
      Q: Thoughts on M&A in 2024?
      A: AbbVie continues to focus on identifying early-stage opportunities across key areas like immunology, oncology, neuroscience, aesthetics, and eye care. While the company is well-positioned financially to pursue acquisitions, their current portfolio supports growth expectations, and future deals are likely to be smaller in size, aimed at bolstering the pipeline for the next decade.

    10. Skyrizi Impact on Rinvoq
      Q: Will Skyrizi's UC approval affect Rinvoq sales?
      A: The company believes Skyrizi and Rinvoq have complementary positioning in markets like Crohn's disease and ulcerative colitis. Skyrizi, with impressive efficacy, is positioned for frontline use, while Rinvoq is indicated after a TNF inhibitor. They expect minimal cannibalization and significant overall share growth for AbbVie in these therapeutic areas.

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