Q4 2024 Summary
Published Feb 14, 2025, 7:04 PM UTC- AbbVie's Tmab-A (ABBV-400) is an underappreciated oncology asset showing promising monotherapy results in colorectal cancer, significantly outperforming older chemotherapy treatments, with potential to become a very significant product for patients over time.
- AbbVie has a strong M&A track record and continues to pursue strategic transactions to bolster its pipeline, having signed more than 20 early-stage deals since the beginning of 2024 across immunology, oncology, and neuroscience, which can drive growth in the next decade.
- Despite short-term headwinds, AbbVie's aesthetics business is expected to benefit in the long term from increased consumer interest, including opportunities arising from the obesity market, as new patients are introduced to aesthetics treatments, supporting significant long-term growth potential given high consumer interest and low penetration rates.
- AbbVie increased its projected headwind from the Medicare Part D redesign from 3% to 4%, indicating a more significant negative impact on revenues than previously expected. This change reflects a business mix shift with higher exposure in areas like immunology and oncology. ( )
- The company lowered its long-term revenue guidance for its aesthetics business, now expecting a high single-digit revenue CAGR through 2029, with revenues projected to be north of $7 billion in 2029, compared to the previous expectation of over $9 billion by 2030. This revision is due to challenging market conditions and economic headwinds in key markets like the U.S. and China. ( , )
- Market share declines in key aesthetics products, with BOTOX Cosmetic's U.S. market share dropping to the low to mid-60s% and JUVEDERM to the low to mid-40s%. The share erosion reflects increased competition and changes in consumer spending, and while the company aims to regain share, the challenges may persist amid economic uncertainties. ( )
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | Up approximately 5.6% from $14.301B in Q4 2023 to $15.102B in Q4 2024 | Growth driven by robust domestic performance, with the U.S. contributing 78% (or $11.734B) of the total revenue, which helped offset challenges in other segments and built on prior momentum. |
Operating Income (EBIT) | Dropped sharply from $3.195B in Q4 2023 to –$1.490B in Q4 2024 | A reversal exceeding 100% decline due to a confluence of factors such as rising SG&A expenses (up 21%), a dramatic increase in R&D spending (up 251%), and additional costs including litigation reserve charges and integration costs from recent acquisitions that reversed prior profitability. |
Net Income | Reversed from a profit of $822M in Q4 2023 to a loss of $22M in Q4 2024 | The turnaround reflects increased operating costs and margin pressure, with higher SG&A and R&D expenses—along with other integration and litigation-related charges—eroding earnings that had previously been positive. |
Earnings Per Share (Basic) | Fell from $0.46 in Q4 2023 to –$0.01 in Q4 2024 | The decline in EPS mirrors the drop in net income, as higher expenses and reduced profitability directly impacted shareholder earnings, reversing the favorable prior period performance. |
SG&A Expenses | Increased from $3.193B in Q4 2023 to $3.855B in Q4 2024 (~21% rise) | Higher SG&A costs were driven by increased litigation reserve charges and acquisition/integration costs related to deals such as those involving ImmunoGen and Cerevel Therapeutics, which outweighed the growth in revenues. |
Research & Development | Jumped from $1.927B in Q4 2023 to $6.774B in Q4 2024 (an increase of roughly 251%) | A substantial rise in R&D spending reflects increased funding for pipeline asset development and costs related to recent acquisitions; this aggressive investment strategy contrasts with the previous period’s lower expenditure partly due to absent impairment charges. |
Geographic Revenue Breakdown | U.S. revenue remained dominant at 78% ($11.734B) of Q4 2024 total revenue | The strong U.S. market performance underlines domestic dominance, which provided stability and offset variable international performance, reinforcing the company’s strategic focus on its home market. |
Cash Flow Impact | Net cash declined by $1.733B | The drop in cash flow is attributed to substantial dividend increases, debt repayments, and higher capital expenditures on acquisitions and litigation costs, which reduced liquidity compared to the prior period. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Net revenues | Q1 2025 | no prior guidance | Approximately $12.8B | no prior guidance |
Foreign exchange impact | Q1 2025 | no prior guidance | 1.6% unfavorable | no prior guidance |
Immunology sales | Q1 2025 | no prior guidance | $6.1B | no prior guidance |
Skyrizi | Q1 2025 | no prior guidance | $3.2B | no prior guidance |
Rinvoq | Q1 2025 | no prior guidance | $1.6B | no prior guidance |
U.S. HUMIRA | Q1 2025 | no prior guidance | $900M | no prior guidance |
Oncology | Q1 2025 | no prior guidance | $1.5B | no prior guidance |
Aesthetics | Q1 2025 | no prior guidance | $1.1B | no prior guidance |
Neuroscience | Q1 2025 | no prior guidance | $2.1B | no prior guidance |
Eye care | Q1 2025 | no prior guidance | $550M | no prior guidance |
Operating margin ratio | Q1 2025 | no prior guidance | ~44.5% of sales | no prior guidance |
Non-GAAP tax rate | Q1 2025 | no prior guidance | ~13.8% | no prior guidance |
Adjusted EPS | Q1 2025 | no prior guidance | $2.47 – $2.51 | no prior guidance |
Adjusted EPS | FY 2025 | no prior guidance | $12.12 – $12.32 | no prior guidance |
Total net revenues | FY 2025 | no prior guidance | ~$59B (5.7% operational growth) | no prior guidance |
Foreign exchange impact | FY 2025 | no prior guidance | ~1% unfavorable | no prior guidance |
Adjusted gross margin | FY 2025 | no prior guidance | ~84% of sales | no prior guidance |
Adjusted R&D investment | FY 2025 | no prior guidance | ~14.5% of sales | no prior guidance |
Adjusted SG&A expense | FY 2025 | no prior guidance | ~$13.2B | no prior guidance |
Adjusted operating margin ratio | FY 2025 | no prior guidance | ~47% of sales | no prior guidance |
Adjusted net interest expense | FY 2025 | no prior guidance | ~$2.6B | no prior guidance |
Non-GAAP tax rate | FY 2025 | no prior guidance | ~15.6% | no prior guidance |
Free cash flow | FY 2025 | no prior guidance | ~$17B (includes ~$2.7B Skyrizi royalty) | no prior guidance |
Debt repayment | FY 2025 | no prior guidance | ~$3B total debt | no prior guidance |
Global immunology sales | FY 2025 | no prior guidance | ~$29.4B | no prior guidance |
Skyrizi | FY 2025 | no prior guidance | ~$15.9B | no prior guidance |
Rinvoq | FY 2025 | no prior guidance | ~$7.9B | no prior guidance |
HUMIRA | FY 2025 | no prior guidance | ~$5.6B | no prior guidance |
Oncology | FY 2025 | no prior guidance | ~$6.3B | no prior guidance |
IMBRUVICA | FY 2025 | no prior guidance | ~$2.7B | no prior guidance |
VENCLEXTA | FY 2025 | no prior guidance | ~$2.6B | no prior guidance |
ELAHERE | FY 2025 | no prior guidance | ~$750M | no prior guidance |
Aesthetics | FY 2025 | no prior guidance | ~$5.3B | no prior guidance |
BOTOX Cosmetic | FY 2025 | no prior guidance | ~$2.8B | no prior guidance |
JUVEDERM | FY 2025 | no prior guidance | relatively flat | no prior guidance |
Neuroscience | FY 2025 | no prior guidance | ~$10B | no prior guidance |
Braila | FY 2025 | no prior guidance | ~$3.5B | no prior guidance |
BOTOX Therapeutic | FY 2025 | no prior guidance | ~$3.5B | no prior guidance |
Oral CGRP | FY 2025 | no prior guidance | ~$2.1B | no prior guidance |
VYALEV | FY 2025 | no prior guidance | ~$300M | no prior guidance |
Eye care | FY 2025 | no prior guidance | ~$2.2B | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Q4 2024 Net Revenue | Q4 2024 | ~$14.8 billion | $15.102 billion | Beat |
FY 2024 Net Revenue | FY 2024 | ~$56 billion | $56.33 billion (12,310+ 14,462+ 14,460+ 15,102) | Beat |
Skyrizi | FY 2024 | ~$11.5 billion | $11.718 billion (2,008+ 2,727+ 3,205+ 3,778) | Beat |
Rinvoq | FY 2024 | ~$5.8 billion | $5.971 billion (1,093+ 1,430+ 1,614+ 1,834) | Beat |
Imbruvica | FY 2024 | ~$3.3 billion | $3.347 billion (838+ 833+ 828+ 848) | Beat |
Venclexta | FY 2024 | ~$2.6 billion | $2.583 billion (614+ 637+ 677+ 655) | Missed |
Aesthetics | FY 2024 | ~$5.3 billion | $5.176 billion total (Botox Cosmetic: 633, 729, 671, 687+ Juvederm & Other Aesthetics similarly summed) | Missed |
Vraylar | FY 2024 | ~$3.3 billion | $3.267 billion (694+ 774+ 875+ 924) | Missed |
Botox Therapeutic | FY 2024 | ~$3.3 billion | $3.283 billion (748+ 814+ 848+ 873) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Aesthetics business | Q3: $1.2B (1.8% growth) ; Q2: $1.4B (2.8% growth) ; Q1: $1.2B (flat to slightly down). Noted China weakness and inventory changes. | Sales at ~$1.3B with a 4.4% decline; U.S. market challenged by high inflation; loyalty program reinstatement showing early recovery. Company expects modest growth in 2025. | Continues to face near-term headwinds (inflation, China) but long-term optimism remains. |
HUMIRA erosion | Q3: -36.5% ops. decline ; Q2: -28.9% ; Q1: Volume step-down tied to CVS formulary. | $5B U.S. erosion in 2024; 2025 HUMIRA forecast at $5.6B with a $600M Part D impact. 20% of switch volume goes to Skyrizi/Rinvoq. | Consistent negative pressure from biosimilars, partial offset by newer assets. |
SKYRIZI and RINVOQ | Both grew strongly over prior quarters, consistently capturing significant share across multiple indications. | Combined 2024 sales reached $17.7B; expecting $24B in 2025. Strong uptake in IBD, psoriasis, RA. | Bullish sentiment with robust, sustained growth and long-term market leadership. |
Immunology pipeline expansions | Prior calls focused on combination therapies in IBD and novel mechanisms (e.g., TL1A, TREM-1, alpha4beta7). | Rinvoq aiming for indications in GCA, alopecia areata, vitiligo; Skyrizi combos (e.g., TREM1) in IBD. | Ongoing investment and broadening clinical programs indicate strong pipeline momentum. |
Oncology pipeline | Q3: Teliso-V regulatory filings, ABBV-400 expansions; ELAHERE approvals. | Teliso-V in review for accelerated approval; Tmab-A Phase III in colorectal cancer; ELAHERE and VENCLEXTA show growth. | Consistent pipeline progression with ADCs, bispecifics, and expanded indications. |
Neuroscience pipeline | Q3–Q1: Cerevel acquisition, expansions in schizophrenia, Parkinson’s, and Alzheimer’s. | Focus on Parkinson’s (VYALEV, Tavapadon) and Emraclidine. Positive Tavapadon Phase III results; exploring higher emraclidine doses. | Strengthening presence in neuro with new data and partnerships driving future potential. |
M&A and strategic partnerships | Q3–Q1: Added Cerevel, ImmunoGen; multiple early-stage immunology and oncology partnerships. | Over 20 early-stage deals in 2024; focus on immunology, oncology, neuroscience (e.g., ADCs, novel combos). | Continued BD momentum to bolster pipeline and long-term growth. |
Medicare Part D redesign | Q2: 3% estimated headwind ; Q1: Anticipated major hit in 2025. | 4% headwind to growth in 2025; ~$2B revenue impact across key products (HUMIRA, IMBRUVICA, etc.). | Escalating concern over reimbursement changes, modest volume offset. |
Macroeconomic headwinds | Consistent mentions of China economic slowdown and inflation in aesthetics. | Consumer spending remains suppressed in aesthetics; filler market declined ~10%. | Persistent near-term pressure but generally steady outlook. |
Obesity market opportunities | No mention in previous periods. | Discussed as both a headwind (wallet share) and a tailwind (new patient flow) in aesthetics. | Newly emerging theme with uncertain net impact on aesthetics. |
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Skyrizi and Rinvoq Growth
Q: What's driving the 2027 guidance increase for Skyrizi and Rinvoq?
A: The primary driver is share capture across indications, particularly in IBD and psoriasis. Skyrizi's guidance increased by $3 billion, with $2 billion from IBD and $1 billion from psoriatic diseases. Rinvoq's guidance rose by $1 billion, contributing from various indications. The robust performance is expected to continue beyond 2027, with both assets maintaining growth at least through 2032. -
Part D Redesign Impact
Q: How will the Part D redesign affect financials and volume?
A: The Part D redesign presents a 4% headwind to growth across the business. The volume offset is modest and primarily comes from standard eligible patients, about one-third of the population who will benefit from lower out-of-pocket costs. The cost-sharing applies to the entire Medicare book, so the volume does not fully offset the price impact. -
Aesthetics Business Outlook
Q: When will the aesthetics business recover, and what's the outlook?
A: The aesthetics business is expected to recover, with 2025 anticipated as the trough. Long-term guidance projects high single-digit compound annual growth from 2025 through 2029, potentially exceeding $7 billion in revenues. New products like BoNT/E are seen as catalysts for growth by activating new patients and driving more consumers into the toxin category. -
Immunology Market Growth
Q: Why is the I&I market growing rapidly?
A: The I&I market continues to grow due to expanding lines of therapy and the emergence of second and third-line markets in conditions like atopic dermatitis and IBD. Physicians are more willing to move patients to advanced therapies like Skyrizi and Rinvoq, leading to significant market growth. Projections show high single-digit growth in psoriasis and IBD, and mid-teens growth in atopic dermatitis. -
Pipeline Developments
Q: What's the progress on the NLRX1 agonist in UC?
A: The NLRX1 agonist showed promising early data in Phase Ib ulcerative colitis. A robust Phase II study with a placebo comparator is underway. If successful, it could advance to Phase III and potentially be combined with Skyrizi or Rinvoq. -
M&A Strategy
Q: What's AbbVie's approach to M&A?
A: AbbVie continues to pursue assets that add depth to its pipeline, focusing on areas that can drive growth in the next decade, such as immunology, oncology, and neuroscience. The company has a strong track record and remains financially capable of pursuing opportunities that offer differentiation in large markets with high unmet needs. -
PBM Reform Impact
Q: How would PBM reforms affect AbbVie?
A: AbbVie is confident in competing effectively regardless of changes to the rebate system. The company does not have a strong preference between rebates or discounts and can compete based on product attributes and the value provided to health systems. -
Atopic Dermatitis Growth
Q: What's the outlook for Rinvoq in atopic dermatitis?
A: Rinvoq is gaining in atopic dermatitis, with new patient capture increasing. The drug excels in stringent endpoints like minimal disease activity and significant itch reduction, distinguishing it from competitors. There's optimism for continued growth, and additional assets are being considered to strengthen the position in this indication. -
Eye Care Business Role
Q: How does eye care fit into AbbVie's portfolio?
A: AbbVie's eye care business focuses on glaucoma, retinal diseases, and prescription dry eye. It's a scientifically driven, efficient business participating in large markets with high unmet needs. The company sees potential for it to be a long-term growth driver, especially with programs like the gene therapy for wet AMD and diabetic retinopathy from ReGenXBio.