The paragraph is the introduction to AbbVie's Third Quarter 2024 Earnings Conference Call. The operator welcomes attendees and introduces Liz Shea, Senior Vice President of Investor Relations. Liz thanks participants for joining and introduces key executives present on the call, including Rob Michael, Jeff Stewart, Roopal Thakkar, Scott Reents, and Carrie Strom. She mentions that forward-looking statements may be made during the call and are subject to risks and uncertainties, with further details available in AbbVie's SEC filings. Non-GAAP financial measures will be used for business performance analysis, with reconciliations available on their website. The call will include prepared remarks followed by a Q&A session. Rob Michael then takes over the call.

AbbVie is experiencing strong performance, exceeding expectations with increased sales driven by its ex-Humira platform, and achieving nearly 18% growth in that area. Key products like Skyrizi and Rinvoq are performing well, with combined sales projected to surpass initial expectations by $1.3 billion. Additionally, several other products have shown double-digit growth, highlighting the robustness of AbbVie's portfolio. As a result, the company has raised its full-year revenue and adjusted EPS guidance for the third time this year. AbbVie has also completed the acquisition of Cerevel Therapeutics, enhancing its neuroscience pipeline and positioning it for sustained long-term growth.

The paragraph discusses the successful integration of the Cerevel team into the organization, highlighting positive outcomes in their drug development pipeline. Key achievements include positive Phase 3 results for tavapadon in Parkinson's, progress in schizophrenia studies, U.S. approvals for Vyalev and Botox, and regulatory submission of Teliso-V. AbbVie's growth platform has outperformed expectations, and a 5.8% increase in the quarterly dividend has been announced. Jeffrey R. Stewart reports strong results in immunology, with significant revenue growth, especially from Skyrizi, which has gained market leadership in several countries for psoriatic disease.

The paragraph discusses the strong market performance and growth potential of Skyrizi, a biologic therapy for psoriatic disease, Crohn's disease, and ulcerative colitis. In the U.S., it captures a significant share of the psoriatic disease market and is gaining global market leadership in Crohn's disease across the U.S., Japan, and Canada. Skyrizi's attributes, such as near-complete skin clearance and convenient dosing, contribute to its rapid uptake. The drug shows promising results in treating Crohn's and ulcerative colitis, particularly among patients new to biologics. Due to positive trends and broad formulary access, the company plans to increase its sales guidance for Skyrizi.

The paragraph discusses Rinvoq's strong global sales growth, reaching $1.6 billion, with significant prescription increases across all approved indications, particularly in the U.S. for ulcerative colitis and Crohn’s disease, and accelerating in atopic dermatitis due to positive study results. The drug is available in over 75 countries, with sales expected to rise, leading to an increased full-year sales guidance. Alongside Rinvoq, Skyrizi is also experiencing growth, with both drugs showing competitive advantages and substantial momentum for existing and new indications, contributing to future revenue growth. The success is attributed to their strong differentiation and superior head-to-head performance against other therapies in various conditions.

The paragraph discusses the performance and growth prospects of several pharmaceutical products. Skyrizi and Rinvoq are expected to see long-term growth, bolstered by ongoing studies and shifting market dynamics favoring them over Humira, which experienced a sales decline due to biosimilar competition and novel treatment options. In Oncology, Imbruvica faced declining sales due to competition, but Venclexta showed strong growth, particularly in Europe, due to updated guidelines and its leading position in frontline AML. New products, Elahere and Epkinly, are showing promising launch performance. In neuroscience, Vraylar is performing robustly, contributing to overall revenue growth.

In the article paragraph, the company reports strong sales growth across various pharmaceutical and therapeutic categories. Sales reached $875 million, marking a 16.6% operational increase due to prescription growth in bipolar disorder and adjunctive major depressive disorder (MDD) treatments. Migraine therapies, particularly Ubrelvy and Qulipta, earned $445 million, growing by approximately 22%. Global Botox Therapeutic sales were $848 million, due to strong performance in chronic migraine and other indications. The company also announced the U.S. approval of Vyalev for advanced Parkinson’s disease, anticipating gradual sales growth. Vyalev is approved in 35 countries, projecting peak sales to exceed $1 billion. In the aesthetics segment, third-quarter global sales were over $1.2 billion, with U.S. sales at $791 million, driven by Botox Cosmetic, contributing $414 million with a 6.5% increase over the previous year.

The paragraph highlights that despite modest share erosion, favorable pricing and growth in the facial toxin market have bolstered Botox Cosmetics' market leadership. Juvederm's market share is steady, but sales face challenges due to high filler prices and a weaker U.S. economic environment, impacting inventory levels. International sales declined by 1.6%, with China's economic challenges particularly affecting Juvederm. The company is adjusting its Juvederm sales outlook while remaining optimistic about potential growth due to China's new government stimulus. Notably, Botox Cosmetic received approval in China for treating masseter muscle prominence, marking a global first and aiming to tap into a key aesthetic concern in the region.

The paragraph discusses recent developments and future plans in the fields of aesthetics, immunology, and oncology. In aesthetics, the FDA approved Botox Cosmetic for treating platysma bands, allowing the company to expand its market beyond facial treatments and promising growth with the potential new BoNT/E product. In immunology, they started a Phase 2 study for Crohn's disease, testing Skyrizi in combination with novel biologics like lutikizumab and ABBV-382, aiming to enhance therapy through dual mechanism approaches. In oncology, the company mentions ongoing progress across their hematologic and solid tumor pipelines.

The paragraph discusses recent developments in cancer treatments by a company. They submitted an application to the FDA for Teliso-V, aiming to treat non-squamous non-small cell lung cancer with overexpressed c-Met, with an anticipated approval in early 2025. They also received a positive recommendation in Europe for Elahere, targeting platinum-resistant ovarian cancer with high FRα expression, based on positive Phase 3 trial results. New Phase 1 data on ABBV-400 showed promise in treating advanced non-small cell lung cancer and gastroesophageal cancer, with noteworthy response rates, particularly in patients with high c-Met expression. Overall, the company is expanding its c-Met targeted therapies.

The paragraph discusses recent advancements in various medical treatments. It highlights the plan to start Phase 2 studies for a new compound in non-small cell lung cancer and gastroesophageal cancer, as well as a Phase 3 study for late-line colorectal cancer. In hematologic oncology, Tepkinly received European approval for treating relapsed refractory follicular lymphoma, and Epcoritamab became the first bispecific T-cell engager approved in the U.S. and Europe for treating certain lymphomas. In neuroscience, Vyalev was approved by the FDA as a groundbreaking subcutaneous 24-hour infusion therapy for advanced Parkinson’s disease, offering significant benefits over existing treatments. Additionally, positive results from the Phase 3 TEMPO-1 trial were announced, demonstrating the efficacy of tavapadon in reducing Parkinson's disease symptoms.

The paragraph discusses the promising results of the tavapadon studies for treating Parkinson’s disease, indicating its potential as both a monotherapy in early stages and an adjunctive treatment for advanced cases. It mentions upcoming results from the TEMPO-2 and TEMPO-4 studies, as well as ongoing investment in neuroscience innovations. This includes collaborations, such as with Gedeon Richter, and strategic acquisitions, like Aliada, to advance treatments for neuropsychiatric conditions and Alzheimer's disease. Additionally, it highlights the recent U.S. approval of Botox for treating moderate to severe platysma bands, a first for neurotoxins in this indication.

The paragraph discusses the progress in developing non-surgical treatments for platysma bands, highlighting Botox as a promising option. The company plans to submit a regulatory application for BoNT/E, a rapid onset short-acting toxin, by year-end. The company's R&D has been productive, advancing their portfolio. Financially, they reported a stronger-than-expected third quarter, with adjusted earnings per share at $3, higher than guidance. Revenue reached nearly $14.5 billion, with significant growth in their ex-Humira platform. The adjusted operating margin was 46.7%, and they raised their full-year earnings guidance, excluding potential future acquired IPR&D expenses.

The company forecasts total net revenues of approximately $56 billion, with a $500 million increase. It expects a 0.7% unfavorable impact on full-year sales growth due to foreign exchange rates. Key product sales include Skyrizi at $11.5 billion, Rinvoq at $5.8 billion, U.S. Humira at $7.4 billion, Imbruvica at $3.3 billion, Venclexta at $2.6 billion, Aesthetics at $5.3 billion, Vraylar at $3.3 billion, and Botox in the therapeutic space at $3.3 billion. Financial forecasts for 2024 include an 84% adjusted gross margin, 14% adjusted R&D investment, and 23.5% adjusted SG&A expense. The adjusted operating margin is expected to be 44.5%, with a 2.1% unfavorable impact from acquired IPR&D expenses. Fourth-quarter net revenues are anticipated to approach $14.8 billion, with a neutral foreign exchange impact on sales growth.

The paragraph discusses AbbVie's financial performance and outlook. The company expects adjusted earnings per share between $2.94 and $2.98, excluding potential expenses from a recent acquisition. AbbVie has a strong cash balance of nearly $7.3 billion and generated over $11 billion in free cash flow, supporting a 5.8% increase in its quarterly dividend to $1.64 per share starting in 2025. The company is on track to pay down $7 billion in debt maturities and aims for a net leverage ratio of two times by the end of 2026. AbbVie continues to engage in business development, having executed over a dozen early-stage deals this year, and expresses confidence in its growth platform, especially regarding Skyrizi and Rinvoq. The paragraph concludes with an invitation for questions during the call.

The paragraph discusses AbbVie's outlook for 2025, focusing on the shift of Humira volumes to newer drugs like Skyrizi and Rinvoq. Robert A. Michael expresses confidence in achieving robust mid-single-digit growth for both topline and bottom line, despite the decline in Humira volumes. This decline is being offset by strong performance and increased guidance for Skyrizi and Rinvoq, especially in IBD indications. Michael indicates that the current market consensus may not fully reflect these positive trends.

The paragraph discusses the company's strong positioning in the business landscape two years after the U.S. Humira loss of exclusivity (LOE), highlighting robust growth in top and bottom lines across various sectors beyond just Skyrizi and Rinvoq. It praises the performance in oncology with drugs like Elahere and Venclexta, and notes positive developments in Europe for combination therapies. The neuroscience franchise, particularly Vraylar, is doing well, and the migraine portfolio is promising. Despite short-term challenges in aesthetics due to economic conditions, there is confidence in long-term growth. Jeff Stewart adds that the Humira market is shrinking, aligned with expectations, as shown in IQVIA data, prompting a strategic adaptation.

The paragraph discusses the declining performance of a specific molecule but highlights positive factors that have driven overperformance in Q2 and Q3, such as strong share gains for Skyrizi and Rinvoq, consumer investments, sales strategies, and the impact of a new UC launch. Liz Shea and Chris are part of the discussion addressing these dynamics. Following this, Mohit Bansal asks a question regarding a trial comparing their product against Entyvio, seeking clarity on their confidence in the data and whether they aim for non-inferiority or superiority. Roopal Thakkar responds, highlighting promising data from Skyrizi in ulcerative colitis, especially in a patient population with no prior exposure to biologics, indicating potential to differentiate from other treatments.

The paragraph features a discussion on clinical trials involving Skyrizi, ustekinumab, and vedolizumab for Crohn's disease, emphasizing endoscopic improvement as a key objective endpoint that indicates long-term outcomes. Mohit Bansal acknowledges this explanation before Vamil Divan from Guggenheim Securities shifts the focus to emraclidine, asking about expectations for upcoming data, especially in relation to Bristol's drug approval, efficacy, safety, and potential liver testing requirements. Roopal Thakkar responds to Vamil's inquiries, beginning with observations from the recent approval.

The paragraph discusses the positive aspects of emraclidine, highlighting its lack of a boxed warning and unique mechanism of action targeting the muscarinic class. It notes concerns about potential gastrointestinal adverse events and unexpected anticholinergic effects like bladder retention and the need for hepatic monitoring. The paragraph contrasts these concerns with emraclidine's favorable profile, mentioning it as a single-agent, once-daily medication without food effects, significant GI issues, bladder or hepatic concerns based on Phase 1b data. It also mentions an opportunity in treating neurodegeneration-associated psychosis in older patients sensitive to anticholinergic effects. The timing of upcoming data releases may lead to one or two press releases, depending on how closely the data are available.

The paragraph discusses the current status and expectations for the drugs Skyrizi and Rinvoq, focusing on their contracting, formulary positioning, and pricing for 2025. Jeffrey R. Stewart notes that contracting is nearing completion, with expectations of no significant changes in access across Medicare and commercial plans, maintaining broad access. Despite a modest negative pricing environment anticipated in the near term, low single-digit changes in rebates are expected. Subsequently, Chris Shibutani raises a question about upcoming competitor oral data and potential new mechanisms of action, such as a TL1A in the pipeline. Roopal Thakkar responds to Shibutani's question.

The paragraph discusses a comparison between Skyrizi, a subcutaneous treatment, and an oral treatment, apremilast, in terms of efficacy and patient preference for psoriasis treatment. Skyrizi demonstrated significantly higher efficacy and patient preference due to its quarterly dosing and tolerability. The paragraph notes that Skyrizi achieved a 50% higher rate of full skin clearance (PASI 100) compared to apremilast. The author expresses confidence in Skyrizi’s efficacy, especially with its global market potential, and believes it offers an advantage over emerging oral treatments, highlighting its delivery method, response durability, and dosing convenience.

The paragraph discusses the company's competitive strategy and development in various medical treatments. They highlight the importance of combining different mechanisms, like TL1a, especially in treatments for conditions like ulcerative colitis and Crohn’s disease. They mention that while ulcerative colitis data is promising as a monotherapy, it is not particularly differentiated compared to other treatments like Skyrizi and Rinvoq. In Crohn's disease, they emphasize the need for combination therapies, pairing TL1a with their novel alpha 4 beta 7 mechanism. Additionally, they have strong data for hidradenitis suppurativa using IL-1 alpha beta lutikizumab, noting its potential against disease drivers and resistance to other biologics. They express excitement about these and other early-stage developments in their pipeline, with more information to be provided as data matures. The paragraph ends with a transition to a Q&A segment where another topic about the economic impact on the aesthetics business is raised by Trung Huynh from UBS. Robert A. Michael from the company responds, indicating he will address this question.

The paragraph discusses the strategic outlook and growth projections for a company aiming to exceed $9 billion in revenue by 2029, implying an 11% compound growth rate. Historically, the market has grown in low double digits, but future growth is expected to be in high single digits, requiring innovative strategies beyond market recovery to meet targets. The company is focused on introducing a fast-acting BoNT/E product in 2026, expected to address consumer concerns about unnatural appearances, potentially expanding the market and increasing market share. The speaker anticipates assessing market recovery in 2025-2026 to evaluate the $9 billion target and plans to update guidance around 2026. The paragraph concludes with a transition to questions from the audience, specifically addressing the strategic importance of the eye care segment.

In the paragraph, Robert A. Michael addresses a question about potential new therapeutic areas (TAs) for business development, particularly metabolic or cardiovascular. He emphasizes that the company's main focus is on five key growth areas: eye care, immunology, oncology, neuroscience, and aesthetics. Although eye care is important, it is not the top growth driver compared to the other four areas. The company is actively building depth across 24 core areas within these verticals, with significant internal R&D investments and an active business development strategy focused on early-stage opportunities. While metabolic or cardiovascular opportunities could be considered if they show differentiation and potential for growth in the next decade, they are not the primary focus at present. However, the company is open to pursuing such opportunities if they create value and can leverage their financial resources.

The paragraph discusses strategies for managing the placebo effect in clinical studies, particularly in the context of Cerevel's trials. Roopal Thakkar highlights the importance of factors like limiting countries and sites, implementing a central review for eligibility, and training and certifying raters to control placebo responses. The Phase 1b study showed a significant effect size despite potential placebo influence, and there's confidence that the treatment remains competitive due to its safety and tolerability, even if efficacy sees a slight decline. This part of the discussion transitions into a question from Carter Gould about the differentiation of an acquisition related to enhanced brain delivery, which wasn’t addressed in detail within the paragraph.

The paragraph discusses AbbVie's long-term strategy in neuroscience, specifically targeting Alzheimer's disease. They highlight their investments and partnerships in the field, including a collaboration with Alector and TREM2, and various assets targeting different aspects of Alzheimer's pathology, such as tau and beta amyloid. AbbVie aims to differentiate through innovative approaches like a new deal with Aliada, which could provide higher concentrations and extended half-life for convenient dosing. The goal is to achieve more effective treatment with fewer side effects, such as reduced ARIA risks, potentially easing the burden on patients and caregivers.

The paragraph discusses the strategic focus of a company on its neuroscience franchise, which is divided into four main segments: psychiatry, migraine, Parkinson’s, and neurodegeneration. The company has invested in these areas for long-term growth, highlighting specific investments and partnerships such as Cereval and Gedeon Richter in psychiatry, the oral CGRPs and Botox Therapeutic in migraine, and Vyalev and davapidone (a disease-modifying approach) for Parkinson’s. The company is also investing in Alzheimer’s with Aliada and exploring adjacencies like ALS and MS. The overall goal is to grow the neuroscience franchise as a key long-term growth driver.

The paragraph discusses Cerevel's focus in prepared remarks due to recent developments like the Phase 3 trials for tavapadon and the expected emraclidine data in the fourth quarter. Rob and Roopal emphasize the significance of these events and the unmet need in Parkinson's treatments. They express confidence in maintaining a strong effect size and safety profile for the drugs, noting the importance of tolerability in therapy. The paragraph addresses concerns about the potential impact of placebo responses but maintains a positive outlook on the trial outcomes.

The paragraph discusses the challenges patients face with atypical medications, such as weight, metabolic, and motor symptoms, leading them to stop medication and end up hospitalized. Emraclidine is seen as a potential competitive alternative. The conversation shifts to a Q&A session about Vraylar, where Scott T. Reents explains that a slight change in the channel mix led to a $100 million reduction in guidance, although this was offset by an increase in Botox Therapeutics revenue, keeping overall neuroscience guidance stable. Roopal Thakkar confirms an extension of a fruitful collaboration with Gedeon Richter.

The paragraph discusses the development of a follow-up medication to Vraylar that is more targeted towards the D3 receptor and is set to enter Phase II clinical trials for treating bipolar depression, major depressive disorder (MDD), and generalized anxiety disorder. The speaker emphasizes the importance of psychiatry in their neuroscience strategy and highlights the potential for a stronger partnership with Gedeon Richter to develop more treatments for depression, bipolar disorder, schizophrenia, and anxiety. The call concludes with an invitation to visit the AbbVie investor website for a replay.

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