Yahoo Finance AbbVie Inc (ABBV) Q1 2024 Earnings Call Transcript Highlights: Surpassing Expectations with ...
Adjusted Earnings Per Share: $2.31, $0.11 above guidance midpoint.
Total Net Revenues: $12.3 billion, $400 million ahead of expectations.
Ex-Humira Growth Platform Revenue Growth: Over 15% this quarter.
Skyrizi and Rinvoq Combined Growth: Above 50%.
Full Year Adjusted EPS Guidance: Raised by $0.16, now between $11.13 and $11.33.
Immunology Revenues: Approximately $5.4 billion.
Skyrizi Global Sales: $2 billion, operational growth of 48%.
Rinvoq Global Sales: Approximately $1.1 billion, operational growth of 61.9%.
Humira Global Sales: Approximately $2.3 billion, down 35.2% operationally.
Oncology Revenues: More than $1.5 billion.
Neuroscience Revenues: Nearly $2 billion, up 16% operationally.
Global Aesthetics Sales: Over $1.2 billion, slight operational decline.
Adjusted Operating Margin Ratio: 42.2% of sales.
Adjusted Gross Margin: 82.9%.
Adjusted R&D Expense: 14.7%.
Adjusted SG&A Expense: 24.6%.
Adjusted Net Interest Expense: $429 million.
Adjusted Tax Rate: 14.8%.
Full Year Revenue Forecast: Approximately $55 billion, an increase of $800 million.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Congrats on the progress and congrats, Rob, as well. So maybe let's just start with 2024. I mean so thanks for this guidance. But when we look from 2024 to '25, there are a couple of headwinds that you have highlighted in the past. So obviously, IRA Part D redesign will be there and Humira may have another leg down. And given the volume erosion here, people are a little bit concerned there. Can you help us understand that what is your current thinking on the trough, '24 versus '25? And could you give us some confidence that you can continue to grow in '25 despite these headwinds from IRA and Humira? A: Robert A. Michael - AbbVie Inc. - President & COO: So Mohit, this is Rob. I'll take that question. So if you think about '24, '25, I mean, clearly, the ex-Humira growth platform is demonstrating great momentum. If you just think about Skyrizi and Rinvoq alone are growing by more than $4 billion per year. Aesthetics will recover to high single-digit growth. Our neuroscience franchise will grow by over $1 billion this year on the heels of strong momentum for Vraylar and our migraine portfolio, and we will have incremental contributions from VYALEV and Elahere in '25. So we have several drivers that will offset Humira erosion next year as well as the Part D benefit redesign impact and allow us to still deliver robust revenue growth.
Q: So maybe I could just ask a couple on the aesthetics side. It sounds like your commentary is pretty generally in line with what you said before, but obviously, the number was a little lighter this quarter than even your guidance on what people are expecting. So can you maybe just talk a little bit more about that? You mentioned some shift in promotional efforts to the second quarter and maybe inventory levels then as a result being lower, and maybe I don't know if you can quantify that a little bit. And was this sort of planned when you gave your guidance back in February? Or is this something that's sort of evolved over the course of the quarter? Maybe just kind of why the decision, maybe it would be helpful to give us some comfort on the outlook there. A: Carrie C. Strom - AbbVie Inc. - Senior VP of AbbVie & President of Global Allergan Aesthetics: This is Carrie. Thanks for the question. So first, I'll give a little bit of context to the fundamentals in terms of market growth and market share, which were in line with our expectations. So our market share continues to be strong and stable. For Botox Cosmetic, despite a new competitor, strong stable share at high levels. And then for our Juvederm line, continued share strength, even some share pickup in the past few quarters as we launch our new products. So like you said, those fundamentals are in line with our expectations.
Q: Great. When we think about the 2024 upcoming contracting season, which obviously has been quite dynamic for Humira over the past year plus, can you provide us with any insights in terms of structural aspects within your contracts that you build in that may help provide offsets? We often have limited visibility. We're looking at the prescription volume trends, and it feels as if our calculus is sometimes incomplete. But what can you reassure us in terms of the dynamics as we're seeing this year to play out and how you're approaching contracting for the forward? A: Jeffrey Ryan Stewart - AbbVie Inc. - Executive VP & Chief Commercial Officer: Chris, it's Jeff. So the contracting season typically starts April or May. And frankly, as we've highlighted before, can run in the immunology category really through the end of the year. So we have a few philosophies that we look towards, which are we want to continue to basically make sure that patients, if possible, based on our pricing concessions aren't disrupted because when you start to disrupt patients, they do struggle with the change. It's a change in their treatment course. And so as we look to that, we've historically highlighted that we are negotiating for parity contracts with Humira. And we do put some controls in place in some cases, but not all. We seek multiyear contracts with our payers to try to establish the relationship, the pricing, et cetera. And we will think of ways to make sure that those contracts can hold. So they have some teeth in them. They can't just be willy-nilly discarded. And so it is a long term, in some cases, partnership over a couple of years with these payers.
Q: Just a couple more on the Humira front. I think in Humira, you had mentioned that in 2024, you expected most of the impact would be price versus volume. But I think The Street has been concerned that we're seeing more volume erosion, particularly with the CVS book of business. I'm just interested in your latest thinking as we think about price versus volume for the remainder of this year. As we consider CVS, Cigna, et cetera, how should we think about that balance just so there's kind of surprises as, I guess, we watch these volume trends playing out? And then maybe just on a related topic, can you talk at all about the tail for Humira sales in the U.S.? I guess [the heart of] the question, do you expect that you'll see most players or payers eventually switch out Humira like we're seeing at CVS? And if so, is it still reasonable to think about there being a kind of a decent tail of revenue, I guess, for this product in the U.S. over time? A: Jeffrey Ryan Stewart - AbbVie Inc. - Executive VP & Chief Commercial Officer: Yes. Great question. There's a lot in there. Let me go through it in a systematic fashion. So I think, first, to directly answer your question. We still, as we look forward, believe that the significant majority of our lives will be at parity. So that means our guidance around the majority being price is still holding in our go-forward look. Let me give you some perspective. I had some in my opening remarks over what's happening with CVS. So the first is that, as I mentioned, the step-down in volume was really anticipated. And based on our analysis of the data, which I'll highlight, it's really right in line with our expectations.
Q: Congrats to Rick, and best of luck to Rob in the new role. Just wondering if you could maybe frame a little bit for us the opportunity for Skyrizi in UC versus Crohn's disease. I think last time, we heard from J&J, Crohn's represented about $7 billion of Stelara sales. Obviously, you guys have made decent inroads there based on your comments. But just
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
