AbbVie's Chairman of the Board and Chief Executive Officer, Rick Gonzalez, opened the conference call by introducing the other executives on the call and noting that some of the statements made may be considered forward-looking. He also mentioned the use of non-GAAP financial measures and that they can be found in the earnings release and regulatory filings. He concluded by expressing his pleasure with the progress AbbVie is making in 2023 towards their objectives of managing Humira biosimilar competition in the US market and executing their long-term diversification growth strategy.

AbbVie has exceeded their guidance for the second quarter, with the majority of the success attributed to their growth platform, excluding Humira. They are also making progress with their pipeline, with recent approvals for Skyrizi, Rinvoq, and Epkinly. AbbVie reported adjusted earnings per share of $2.91 and total net revenues of nearly $13.9 billion, both above their guidance.

Skyrizi and Rinvoq have achieved strong sales growth, with combined revenue of over $3.5 billion this year. Humira is also performing well, with erosion of 35%, and neuroscience and aesthetics have seen positive growth. AbbVie is investing in these areas to ensure continued growth.

Rob announced that the company has raised its full year adjusted earnings per share guidance by $0.23, and Jeff discussed the success of Skyrizi in immunology and IBD. Skyrizi delivered total revenues of $1.9 billion, reflecting strong operational growth of 51%, and achieved 32% total prescription share in the U.S. biologic market. In addition, Skyrizi is approaching the leading new patient biologic market share in psoriatic arthritis and has total in-play share leadership in nearly 30 countries. Skyrizi also has a very compelling clinical profile, including strong endoscopic data paired with convenient dosing.

Skyrizi's uptake in Crohn's disease has been rapid, leading to an increase in the full year sales outlook. Rinvoq has seen global sales of $918 million and is approved across seven distinct indications. It has strong differentiation and is capturing one out of every four in-play ulcerative colitis patients in the second line plus setting, as well as a strong ramp in new patient starts for Crohn's.

AbbVie reported a strong performance across several diseases, including giant cell arteritis and systemic lupus in rheumatology, and multiple additional derm indications. Global Humira sales were down due to biosimilar competition, but Imbruvica and Venclexta both saw growth. In neuroscience, Vraylar continues to exceed expectations with sales up 33.9% and a market leader in migraine. Epkinly was recently approved in the US for DLBCL, with approval and commercialization in Europe and Japan expected later this year.

In the second quarter, global aesthetics sales were $1.4 billion, with U.S. sales being $829 million. U.S. Botox Cosmetic sales were $420 million, down 6.5%, while U.S. Juvederm sales were $125 million, down 14.5%. The oral CGRP portfolio contributed $292 million in combined sales, with total Botox Therapeutic sales at $748 million, up 11.3%. Growth is expected to accelerate in the second half of the year.

Filler market declined by 20% in the quarter, but Juvederm collection remained stable. Consumer market research shows a recovery from last summer and those intending to get treated with toxins and fillers. The international aesthetics portfolio performed well with strong sales in many key markets, particularly in Asia Pacific. However, there is a shipment timing benefit in the third quarter of 2022 which is expected to result in relatively flat growth for the international portfolio in the third quarter, but high single digit growth for the full year.

In the quarter, Allergan invested to drive future growth in the aesthetics portfolio with promotional activities, digital products and services, and sales force expansion. They also invested in their pipeline, resulting in the FDA approval of SkinVive, a hyaluronic acid filler, and Volux filler for jawline contouring. Allergan is confident in the long-term outlook for their aesthetics portfolio and raised their full year aesthetics guidance. Additionally, Rinvoq was approved by the FDA for Crohn's disease, and it demonstrated a rapid and strong impact on symptoms and endoscopic improvement.

In the quarter, AbbVie announced positive top-line results from their Phase III maintenance trial in ulcerative colitis for Skyrizi, showing that patients who continued treatment with Skyrizi maintained high levels of clinical remission. They are on track to submit regulatory applications in the third quarter and anticipate approvals in 2024. Additionally, a head-to-head trial comparing Skyrizi to Otezla in patients with moderate psoriasis showed Skyrizi's superiority on all primary and ranked secondary endpoints. AbbVie is also currently conducting Phase III studies for Rinvoq in systemic lupus, hidradenitis, suprativa, and planning to begin Phase III studies in alopecia areata later this year, as well as a Phase II study in vitiligo.

Skyrizi is a self-injectable treatment administered quarterly for moderate-to-severe psoriasis that has been shown to be more effective than Otezla, an oral treatment administered twice daily. Skyrizi has been associated with higher clinical efficacy outcomes, improved health-related quality of life measures, greater treatment satisfaction, and favorable safety and tolerability compared to Otezla, which was associated with higher rates of adverse events and gastrointestinal distress. Additionally, Skyrizi has received accelerated approval in the U.S. for the treatment of relapsed or refractory DLBCL.

In the quarter, Epkinly performed well as a monotherapy and demonstrated an 82% overall response rate, and Phase III trials are ongoing in earlier lines of DLBCL and follicular lymphoma. The Phase III TRANSFORM one trial evaluating navitoclax in combination with ruxolitinib in for treatment naive myelofibrosis met the primary endpoint at week 24, showing a doubling of improvement over rux alone. However, the navitoclax combination did not achieve the first ranked secondary endpoint. Additional follow-up data on SVR and TSS are expected in the fourth quarter and will be used to engage with regulatory agencies.

AbbVie is on track to receive data from multiple late-stage oncology programs, including the CANOVA trial in relapsed/refractory multiple myeloma patients with t(114) mutation and Teliso-V in second-line plus advanced non-squamous, non-small cell lung cancer in the fourth quarter. Additionally, they have initiated a Phase II study for ABBV-151 in hepatocellular carcinoma and presented promising initial results from a Phase I study evaluating their next-generation c-Met ADC, ABBV-400, in several advanced solid tumor types. Lastly, they received a positive CHMP opinion recommending approval of atogepant for migraine prevention, with a decision expected in the coming months.

AbbVie reported adjusted earnings per share of $2.91 for the second quarter, which was $0.11 above the guidance midpoint. The results included a $0.15 unfavorable impact from acquired IP R&D expense. The company is advancing their A-beta antibody for Alzheimer's disease to dose escalation studies and submitted a regulatory application for Botox in masseter muscle prominence in China. They are also on track to see data from two additional Phase III studies for Botox in platisma prominence later this year.

Boehringer Ingelheim reported total net revenues of nearly $13.9 billion, with high single-digit sales growth from their growth platform. The adjusted operating margin ratio was 47% of sales, with net interest expense at $454 million and an adjusted tax rate of 15.8%. The company raised their full year adjusted earnings per share guidance to between $10.90 and $11.10, with total net revenues of approximately $53.4 billion. This includes expectations for Skyrizi global sales of $7.6 billion, neuroscience sales of $7.7 billion, aesthetics sales of $5.4 billion, and U.S. Humira erosion of 35%.

AbbVie has had a strong quarter and has raised its guidance. Scott, the CFO, anticipates net revenues of approximately $13.7 billion, with adjusted earnings per share between $2.80 and $2.90. Vamil Divan asked about the floor EPS and if any AbbVie products would be included in the first group of 10 products subject to IRI. He also asked about the risk to Rinvoq from IRI and if its life cycle may be shorter.

Rick Gonzalez and Rob Michael discussed the company's performance and the potential for the trough year to occur in 2024. They are feeling confident about the success of the non-Humira business, which could offset the over performance of Humira and potentially raise the floor for the company. They have collectively raised revenue guidance by $1.4 billion, with $400 million of that from the first quarter and $1 billion from this quarter.

Rick Gonzalez and Rob Michael discuss the potential impact of the IRA on their business, with Imbruca being one product they are closely monitoring. They have made assumptions in their planning to account for the IRA, and they are expecting high single-digit growth in the second half of this decade regardless of the outcome. They expect to have more clarity on the impact of the IRA on September 1st.

AbbVie has modeled the impact of the International Reference Pricing (IRP) and does not expect it to affect the development plans for Rinvoq. The company has also seen biosimilar Humira play out in terms of price and volume dynamics, and they provide updated guidance for Skyrizi.

Jeff Stewart and Rob Michael provide color on the $7.6 billion of Humira's sales and the dynamics of the Amgen launch and the multiple biosimilars. They are confident that Humira access will remain meaningful in 2024, but there will be some volume loss in certain accounts over time. They are pleased with the predictability and parity access for Humira. They have two-year agreements with some accounts for both '23 and '24.

Chris discussed the erosion of U.S. Humira in the first half of the year, which was mostly due to price with little volume impact. In the second half of the year, they expect higher single-digit volume erosion and the rest of the 35% comes from price with higher rebates and maintained parity access. For 2024, there will be additional price erosion due to annualized rebates and rebate increases, as well as more volume erosion due to midyear entry of biosimilars. Rob Michael clarified that the $200 million from Skyrizi is split evenly between psoriatics and IBD, with psoriatics at $7.6 billion and IBD at $900 million.

Rick Gonzalez of AbbVie Inc. is confident that the company's EPS floor of $10.70 will remain intact and that it may even be increased at some point. He believes that AbbVie's current pipeline, which includes Skyrizi and Rinvoq, is more than sufficient to drive high single-digit growth for the company through the end of this decade and into the early part of the ‘30s.

AbbVie has seen accelerating growth in its growth platform and is confident that it will continue to do so. The company has invested in Skyrizi and Rinvoq and is seeing positive returns from those investments. Other investments in R&D have been focused on assets that will help sustain growth from 2030-2040, such as the 400 platform, cement platform, CRC, non-small cell, neuroscience portfolio, 916, and a next-generation BTK degrader. AbbVie is also interested in pursuing a second-generation BCL-2 in multiple myeloma.

Rick Gonzalez discusses Allergan's active business development group and their interest in potential acquisitions that align with their franchises, such as immunology, neuroscience, oncology, aesthetics, and eye care. Allergan is primarily focused on acquiring late-stage assets that can significantly change the standard of care.

Rick is pleased with the team's ability to execute on competitive strategies and grow the entire toxin market in the U.S. DAXI has been launched for more than six months, but uptake has been low and customer feedback is that expectations are not being met. Botox continues to be the clear market leader, and the team is focused on the competitive strategies as well as the broader vision to grow the entire toxin market.

Jeff Stewart addressed Evan Seigerman's question about market share growth potential for Skyrizi and Rinvoq. He explained that the in-play capture rate for Skyrizi in psoriasis is currently 50%, and its market share is 32%. Similarly, Rinvoq has an in-play capture rate of 25% and a market share of 3%. Stewart believes that, without major innovation or disruption, the market share for these drugs will increase over time due to persistency effects and fall off in the market.

The team is on track to resubmit ABBV-951 for approval later this year with a PDUFA in the first half. Additionally, the team believes that the unmet need is still quite high and they have launched the asset in Japan with commercial patients already receiving it. With Skyrizi, the data seen in Crohn's and ulcerative colitis suggests that there is an opportunity to increase endoscopic or mucosal healing even higher than the already high ranges of 50-60%.

Takeda noted weakness in the U.S. GI market, and Chris and Tom discussed potential strategies to address this, including a collaboration with Caliber and an asset called RIPK1. Chris also noted that AbbVie had narrowed its EPS range due to clarity on the biosimilar Humira market and the performance of the rest of the portfolio.

Jeff Stewart reported that there is no slowdown in the IBD market, and the competitors in that space, such as Stelara and Entyvio, are under pressure in terms of incremental patient capture since Humira's launch. Rob Michael added that the ex-Humira growth platform is performing strongly, and the competition from biosimilars is facing prices, which has increased the confidence in the guidance range.

Rick Gonzalez and Carrie Strom discussed the FTC's increased scrutiny on transactions and how it may require more time and even litigation to get them through. Despite this, they believe that if the position is not anticompetitive, it will ultimately prevail. In terms of the aesthetics market internationally, they have been pleased with the performance and are continuing to invest in key growth markets like Japan and Brazil, with China becoming their second biggest market globally.

Rick mentioned that Humira sales are expected to stabilize at some point and that they are expecting high single-digit growth for international aesthetics for the full year. He also mentioned that they are holding strong share positions and that fillers are a large market for them internationally. He mentioned that Q3 may be relatively flat internationally due to shipment timing from last year, but that they are expecting return to growth in Q4. He mentioned that China is an attractive market for them and that they will continue to invest and expand in that market with new product launches.

Rick Gonzalez and Carrie Strom discussed the prospects of the filler franchise, which is performing strongly. They noted that the pricing in the marketplace has been consistent with the original assumptions, and that the Humira tail should start to stabilize in 2025. Strom also mentioned that the filler market continues to be attractive, especially internationally, with China driving strong growth due to the Juvederm brand becoming available there. In the US, inflationary dynamics have impacted the US market for filler more than toxin.

Rick Gonzalez provides an update on the pricing discussions for Skyrizi and Rinvoq in the I&I category for 2024. He states that there is some misconception in the marketplace about I&I pricing, but he explains that they believe there will be a positive tailwind for the aesthetics business due to consumer trends around aesthetics, such as weight loss products. He also believes that any products that get a consumer engaged in their appearance will be beneficial for the aesthetics business.

Rick discussed how the company has been in the market for a long time and is a leader in the market, and sees no fundamental change in the way pricing is dealt with. He then discussed how the company evaluates rebates and discounts when a new indication is received, and how they make a trade-off between being on formulary and providing incremental rebates. He then gave the example of Skyrizi and Rinvoq, and how they will grow despite the increased rebates. Jeff Stewart then added that the company's success with seven indications in one year is unprecedented and won't happen again.

The process of gaining access to a new indication is lengthy and complex, and often requires companies to offer free or bridge programs for multiple quarters or years until access ramps up. In contrast, the company was able to gain fully paid access for seven indications in around 60 days, with minimal free goods and rapid profit flow and revenue accumulation. Outside the US, Humira has seen some sequential decline even after the initial biosimilar wave, and it is unclear if this could have an impact on Skyrizi or Rinvoq.

Rob Michael discussed the $600 million in '23 erosions for International Humira, which is split into three buckets: $300 million from new biosimilar markets, $200 million from new agents like Skyrizi and Rinvoq, and $100 million from low to mid-single-digit price erosion. Roopal Thakkar then discussed that navitoclax will be monitored for spleen volume reduction, marrow fibrosis, and potential correlative survival events.

Jeff discussed the early results of a study and its tolerability. He noted that the dosing can be tailored to the patient needs and that more information will be available by the end of the year. The conference call concluded with a reminder to visit the website for a replay of the call.

This summary was generated with AI and may contain some inaccuracies.