The paragraph introduces AbbVie's Fourth Quarter 2024 Earnings Conference Call. It begins with the operator providing instructions and notifying participants that the call is recorded. Liz Shea, Senior Vice President of Investor Relations, then introduces key executive members present on the call and mentions that the discussion will include forward-looking statements subject to risks and uncertainties. She notes that non-GAAP financial measures will be used for discussing AbbVie's performance and directs that these measures are reconciled with GAAP measures in the company's earnings release on their website. The paragraph concludes with Rob Michael, the CEO, taking over to continue the call.

In the fourth quarter, AbbVie capped a successful year by surpassing financial expectations, reporting a strong adjusted earnings per share and total net revenues. Despite challenges from U.S. Humira erosion, their ex-Humira platform excelled with significant sales growth. Looking forward to 2025 and beyond, AbbVie is well-positioned for robust revenue growth, with expectations of high single-digit growth through 2029, driven by Skyrizi and Rinvoq, which are anticipated to generate nearly $24 billion in revenue by 2025. This growth is set to continue, with sales projections for these assets exceeding $31 billion by 2027, indicating strong market performance, particularly in inflammatory bowel disease (IBD).

The paragraph discusses several factors supporting growth in various therapeutic areas for the coming decade. In immunology, growth is driven by market share capture, robust access, and new indications for Skyrizi and Rinvoq. Neuroscience is performing strongly with expected sales of $10 billion by 2025, showing growth in psychiatry, migraine, and Parkinson's. Oncology has promising long-term prospects with treatments like Venclexta, Elahere, Teliso-V, and a BCMA-CD3 bispecific for multiple myeloma. Aesthetics, while currently affected by challenging market conditions, is expected to recover and deliver high single-digit revenue growth by 2029. Additionally, the company has made significant progress in R&D with recent drug approvals and anticipates further approvals and regulatory submissions in the coming years.

The paragraph discusses AbbVie's recent successes and future plans in the fields of immunology, oncology, and neuroscience. It highlights the company's significant number of early-stage deals and its capacity to pursue external innovation to drive growth. The paragraph cites strong financial performance in 2024, with Skyrizi and Rinvoq posting significant sales and year-over-year increases, particularly in the U.S. market for psoriasis and atopic dermatitis. Skyrizi has a significant market share in the biologic psoriasis segment, and future data is expected to further bolster its position. Rinvoq is capturing a notable share in atopic dermatitis, supported by ongoing studies. Jeff Stewart concludes by emphasizing optimism for continued growth.

The paragraph discusses the strong market performance of AbbVie's drugs, Skyrizi and Rinvoq, across several therapeutic areas. In rheumatology, Rinvoq leads in the second-line treatment for RA, and both drugs have a major share in psoriatic arthritis and IBD markets. In Crohn's disease, they capture about half the market share, and their launch in ulcerative colitis has been successful, gaining a third of the market. Internationally, Skyrizi and Rinvoq also hold leading positions. The narrative contrasts their growth with the declining sales of Humira due to biosimilar competition and the shift to novel treatments, benefiting Skyrizi and Rinvoq.

The paragraph discusses anticipated changes in access to Humira in 2025 due to increased biosimilar contracts, resulting in continued parity access for about half of U.S. covered lives. In oncology, Imbruvica's global revenues declined due to competitive pressures, while Venclexta and Elahere showed positive sales trends. Neuroscience revenues reached $9 billion for the year, driven by strong sales growth in Vraylar, Botox Therapeutic, Ubrelvy, and Qulipta. The company is also introducing Vyalev, a new treatment for advanced Parkinson's disease.

The paragraph discusses the high interest and positive impact of a non-surgical delivery system for Parkinson's disease, noting successful international uptake and anticipated gradual U.S. sales growth due to Medicare considerations. Additionally, the potential of tavapadon as a monotherapy for early Parkinson's and an adjunct for advanced cases is highlighted, complementing other treatments in the portfolio. The speaker expresses satisfaction with overall commercial progress. The focus then shifts to aesthetic sales, with Carrie Strom reporting a decline in global and U.S. sales due to challenging market conditions and inflation, particularly affecting the filler market, while the toxin market shows slight growth.

In Q4, the company's facial injectable market share declined, despite being a leader in toxins and fillers. An updated Alle consumer loyalty program launched in October faced integration challenges, negatively impacting market share and inventory levels. The company reinstated its original program, which led to positive early indicators for sales recovery. International aesthetic sales saw a 3.2% decline, mainly due to lower Juvéderm sales and flat Botox sales, with China's economic challenges affecting performance. Looking ahead to 2025, modest growth in U.S. aesthetic sales is expected, spite of a projected one-time price adjustment in Q1. The company focuses on competitive positioning and product launches in China while planning for long-term growth due to high consumer interest and low market penetration.

Allergan Aesthetics, part of AbbVie, is making significant strides in R&D across its pipeline, with a strong focus on immunology and oncology. In immunology, regulatory reviews are underway for Rinvoq, with notable upcoming data and trial initiations for conditions like alopecia areata, vitiligo, and psoriasis. Skyrizi is set for comparative studies in IBD, with additional studies in atopic dermatitis and psoriatic arthritis. In oncology, there are key milestones expected, particularly in the ADC pipeline, with a regulatory application for Teliso-V aimed at non-small cell lung cancer pending an approval decision in the first half of the year.

The paragraph outlines recent advancements and ongoing studies related to cancer treatment options. Teliso-V is highlighted as a potential first c-Met-directed ADC for non-small cell lung cancer, with a strong need due to limited patient options and poor prognosis. A Phase 3 study for ABBV-400 (Temab-A) targets refractory metastatic colorectal cancer, comparing it as a monotherapy to a combination of chemotherapy and bevacizumab. Temab-A is also being tested in various lung cancer programs, including a planned Phase 2 study for EGFR wild-type non-small cell lung cancer involving a PD-1 inhibitor and potential dose optimization studies for EGFR mutant segments. In addition, ABBV-706, another ADC targeting SEZ6, has shown promising data in small cell lung cancer, leading to forthcoming studies. The paragraph also notes that Elahere is approved in the U.S. for treating platinum-resistant ovarian cancer.

The paragraph outlines the current development status of several drug candidates across oncology and neuroscience. In oncology, Elahere is in Phase 3 for platinum-sensitive ovarian cancer and is being tested in combination with other treatments. IMGN-151 is in Phase 1, being optimized for dose, and studied with standard care agents. PIVAC, another ADC from ImmunoGen for Blastic Plasmacytoid Dendritic Cell Neoplasm, may soon have a regulatory application following positive Phase 2 results. Additionally, a Phase 3 study of Venclexta for MDS is near completion. In neuroscience, analysis of Emraclidine trials for schizophrenia, Alzheimer's, and Parkinson's psychosis highlighted a variable placebo effect but indicated a path forward, including exploring higher doses.

The paragraph discusses ongoing and upcoming studies and regulatory progress related to several medications. For Emraclidine, higher doses are being evaluated for potential use as a monotherapy in schizophrenia, with a multiple ascending dose study planned and Phase 2 trials in adjunctive and monotherapy schizophrenia, as well as psychosis related to Alzheimer's and Parkinson's Disease, expected in 2026. Tavapadon has shown promising results as it met primary and secondary endpoints in a Phase 3 trial for Parkinson's Disease, displaying strong efficacy and safety as both a monotherapy and add-on treatment. Additionally, regulatory submissions for Tavapadon will follow the release of longer-term safety data this year. For aesthetics, the company is working on additional data for a BoNT/E treatment for glabellar lines as requested by the FDA, with a submission anticipated mid-year. Overall, the advancements highlight progress in their drug development pipeline across various stages.

The paragraph discusses financial results and projections for a company, reporting adjusted earnings per share of $2.16, surpassing guidance by $0.08, despite an $0.88 negative impact from acquired IPR&D expenses. The company achieved $15.1 billion in net revenues, with 6.1% growth after excluding currency effects. The ex-Humira platform grew by 22%, and various expense ratios, such as gross margin, R&D, SG&A, and operating margin, are detailed. The company forecasts 2025 adjusted earnings per share between $12.12 and $12.32, excluding potential IPR&D expenses, and anticipates $59 billion in net revenues, reflecting 5.7% growth. A 4% negative impact is expected from Medicare Part D changes, with a 1% unfavorable effect from currency rates on sales growth.

The article paragraph outlines the expected sales performance in various segments for a global pharmaceutical company. The global immunology sales are projected to be $29.4 billion, driven by products like Skyrizi and Rinvoq. Oncology sales are expected to reach $6.3 billion, with IMBRUVICA and Venclexta being key contributors, while aesthetics sales are anticipated to be $5.3 billion. Neuroscience is forecasted to generate $10 billion in sales across products like Vraylar and Botox Therapeutics. Eye care sales are expected to total $2.2 billion. The Medicare Part D benefit redesign is noted to have several unfavorable financial impacts across the product lines.

The paragraph provides a financial forecast for AbbVie for 2025, including key performance metrics such as an adjusted gross margin of 84%, R&D investment of 14.5%, SG&A expenses of $13.2 billion, and an operating margin ratio of 47%. The adjusted net interest expense is expected to be $2.6 billion, influenced by transactions with ImmunoGen and Cerevel, and the non-GAAP tax rate is projected at 15.6%. The company anticipates a flat share count compared to 2024. For the first quarter, expected net revenues are approximately $12.8 billion with a 1.6% negative impact from foreign exchange. Details for key therapeutic sales are provided, including immunology, oncology, aesthetics, neuroscience, and eye care, with an operating margin forecast of 44.5% and a non-GAAP tax rate of 13.8%. Adjusted EPS is anticipated between $2.47 and $2.51, excluding potential IPR&D expenses. AbbVie reports robust business performance supporting its capital allocation priorities, with a cash balance of $5.5 billion and expected free cash flow of $17 billion in 2025, including $2.7 billion from Skyrizi royalties.

The paragraph details AbbVie's strong financial outlook, supported by free cash flow that will enable increased dividends, debt repayment, and business development. The company plans to pay down nearly $3 billion in debt this year, aiming for a net leverage ratio of 2x by the end of 2026. AbbVie is optimistic about its 2024 results and future growth in 2025 and beyond. During a call, Vamil Divan from Guggenheim Securities inquires about the pricing strategy for Skyrizi and market share for Botox and Juvéderm. Jeff Stewart responds, highlighting that Skyrizi and Rinvoq are primarily volume-based businesses and that price declines, although expected, will be modest year-over-year.

The paragraph discusses the company's strategic focus and market dynamics. Rob Michael highlights consistent low single-digit price concessions in formularies, with a notable one-time impact from the Part D redesign. The strategy for drugs like Skyrizi and Rinvoq aims to elevate the standard of care and drive growth beyond Humira, supported by strong market performance and updated revenue guidance. Carrie Strom addresses market share for Botox and Juvéderm in the U.S., noting minor share erosion but optimism in regaining share thanks to the positive reception of a reverted loyalty program. The share loss was spread across competitors rather than concentrated with one.

In this discussion, Chris Schott from J.P. Morgan asks about the factors driving the upside in 2027 guidance for Skyrizi and Rinvoq, particularly regarding share capture and growth rates beyond 2027. Jeff Stewart responds by emphasizing that the primary driver is share capture rather than pricing changes, with significant gains seen across various indications, particularly in IBD and psoriasis. He notes strong TRx share trends for Skyrizi and substantial ramp-ups in IBD. Scott Reents provides a breakdown of the 2027 guidance, stating a combined target of $31 billion for both drugs, with Rinvoq projected at $11 billion and Skyrizi at $20 billion. Rinvoq's revenue is further broken down into $4.8 billion for rheumatology, $2.5 billion for dermatology, and $3.7 billion for IBD.

The paragraph discusses financial guidance and growth expectations for the pharmaceutical products Skyrizi and Rinvoq. It highlights that Skyrizi is projected to generate $20 billion, with $12.5 billion from psoriatic conditions and $7.5 billion from inflammatory bowel disease (IBD). Rinvoq is forecasted to increase by $1 billion, attributed to rheumatology, dermatology, and IBD. The company expects growth beyond 2027, aided by five new indications for Rinvoq, potentially adding $2 billion in peak sales. Overall, Rinvoq is anticipated to grow faster than Skyrizi beyond 2027, with strong performance for both until at least 2032. Geoff Meacham from Citigroup then asks about a partial impairment announced in a press release related to Cerevel.

The paragraph discusses Cerevel's valuation and the drivers for its remaining value, focusing on Tavapadon and Emraclidine. Despite optimism about Tavapadon, accounting rules prevent an increase in its intangible value. For Emraclidine, there's potential in treating adjunctive schizophrenia and neurodegenerative psychosis. The opportunity for monotherapy exists but carries higher risk, impacting its valuation. The overall outlook remains positive for Tavapadon, with continued potential for Emraclidine. The discussion also touches on the revaluation of intangibles and the consideration of risk-adjusted revenues. A longer-term growth perspective questions if 2025 might be a growth trough for Cerevel.

The paragraph discusses Jeff Stewart's and Rob Michael's perspectives on the future of the aesthetics business amidst current economic challenges. They anticipate a recovery by 2025, after which they expect high-single-digit annual growth through 2029, projecting the business to exceed $7 billion. Market growth is driven by low global market penetration and innovations, particularly in fillers and toxins. Despite macroeconomic pressures, AbbVie's aesthetics division continues to invest, aiming to capitalize on future market opportunities.

The paragraph discusses a business strategy focused on integrating R&D and business development for long-term success. Carrie Strom highlights the potential of BoNT/E to attract new patients to the aesthetic and toxin market, addressing concerns like cost and unnatural appearance due to its fast-acting and short-duration characteristics. The commercial strategy aims to initially engage consumers with BoNT/E and then convert them to using Botox. Roopal Thakkar adds that an R&D study will begin this year combining BoNT/E with Botox for immediate and long-term benefits. The paragraph ends with Terence Flynn from Morgan Stanley asking about the volume impacts related to the Part D redesign.

The paragraph discusses two main topics: the potential progression of Phase 2 UC data for an oral NLRX1 agonist into Phase 3 trials, and the impact of Part D redesign on business volume and growth. Scott Reents explains that a 4% net impact is expected due to Part D redesign, with a modest volume offset primarily affecting the standard eligible patient segment. One-third of the market could benefit from lower out-of-pocket costs, but overall, the cost-sharing applies to the entire Medicare business, which affects the volume-price relationship. Rob Michael and Roopal Thakkar add their insights, with Thakkar particularly focusing on the asset from Landos related to the NLRX1 question.

The paragraph discusses the development and potential of a new treatment for ulcerative colitis, which has shown promising early results. A robust Phase 2 trial with a placebo comparator is planned, which could lead to a Phase 3 trial if results remain positive. The treatment may be used in combination with other drugs like Skyrizi and Rinvoq. Additionally, Jeff Stewart addresses a question regarding the growth of the inflammatory and rheumatoid arthritis (IRA) market, noting that not all Humira prescriptions are switching to biosimilars. Instead, about 20% are moving to newer treatments like Skyrizi and Rinvoq. Over time, the use of Humira and its biosimilars has decreased as physicians adopt more advanced therapies.

The paragraph discusses the evolving dynamics in the pharmaceutical market, particularly in the areas of inflammatory bowel disease (IBD) and atopic dermatitis. The introduction of new head-to-head trials and drug indications is making it harder to measure market growth, although it remains modest. There's a trend towards expansion in the lines of therapy, with newer drugs like Skyrizi and Rinvoq enabling treatment shifts beyond traditional methods. This has led to significant growth in second and third line markets, especially in atopic dermatitis. The speaker, Rob Michael, notes high single-digit growth in psoriasis and IBD, and mid-teens growth in atopic dermatitis, due to low current penetration rates and significant potential for expansion.

The paragraph discusses two main topics: the commercial potential of ABBV-400, also known as Temab-A, and AbbVie's M&A strategy. Jeff Stewart highlights the promising prospects of ABBV-400 in the treatment of colorectal cancer, citing its impressive monotherapy results compared to traditional chemotherapy. He compares its potential success to Elahere, which was rapidly adopted in the U.S. oncology market for ovarian cancer due to its innovation in a largely chemo-based field. Stewart emphasizes that ABBV-400 is an underappreciated asset with significant growth potential. Additionally, the paragraph briefly touches on AbbVie's successful track record in mergers and acquisitions, despite setbacks like emraclidine, and mentions the company's intent to leverage its strengths in related product areas.

The paragraph discusses a strategic focus on developing and optimizing therapies for cancer, particularly using ADCs (antibody-drug conjugates). Roopal Thakkar highlights the importance of targeting high-expression tumors with minimal impact on healthy tissue, emphasizing patient selection and care individualization through biomarker utilization. The commitment is to establish these therapies, like Teliso-V, initially as standalone treatments and then in combination therapies for colorectal and lung cancer. The approach seeks to minimize side effects common to other treatments, like alopecia and diarrhea, by using the Topo Warhead platform and optimizing doses for better safety and tolerability. Additionally, the strategy includes considerations for mergers and acquisitions to enhance the company's offerings.

The paragraph discusses the company's strategic focus on growth through strategic transactions and partnerships. It highlights past acquisitions, such as Skyrizi from BI, Imbruvica from Pharmacyclics, and assets from Allergan and Immunogen, which have strengthened their positions in various fields like blood cancers, neuroscience, aesthetics, and eye care. The company is actively pursuing early-stage deals, having signed more than 20 since early 2024, particularly in immunology, oncology, and neuroscience, to drive growth over the next decade. They are adding novel mechanisms and platforms in these areas and collaborating on new treatments for mood disorders and Alzheimer's, emphasizing five key areas: neuroscience, aesthetics, eye care, immunology, and oncology, which have large markets and significant unmet needs.

The paragraph discusses the company's business development (BD) efforts focused on pipeline growth and potential market opportunities. Steve Scala from TD Cowen questions changes in guidance on Part D redesign and its anticipated financial impact, as well as whether Medicare pricing is influencing the commercial market. Scott Reents responds, explaining that they provided early and detailed guidance on Part D impacts, which have adjusted over time due to changes in business mix, not their understanding of Part D itself. Steve also inquires about the company's aesthetics market forecast for 2030, previously set at over $9 billion.

In the article, there is a discussion about a shift in the expected growth impact from a 3% to a 4% headwind due to Part D redesign, influenced by a business mix change in areas like immunology and oncology. Rob Michael adds that despite challenges, such as the U.S. Humira erosion, Part D redesign, and a stronger U.S. dollar, the company expects robust growth in 2025, driven by products like Skyrizi and Rinvoq, as well as advancements in neuroscience. Jeff Stewart addresses negotiations, stating there are no negative impacts from them, and notes increased consumption in oncology due to the benefit redesign, particularly for Imbruvica and Venclexta.

The paragraph discusses changes in Part D benefits, highlighting a beneficial policy that reduces the cap on out-of-pocket expenses for cancer medication, which is expected to encourage adherence to treatment. It mentions anticipated market dynamics, noting that the volume impact will be less significant than the price impact. Additionally, Scott Reents discusses long-term guidance for aesthetic products, projecting high single-digit compound annual growth rates from 2025 to 2029. He contrasts this with historical low double-digit growth. Tim Anderson from Bank of America asks about the potential impact of obesity drugs on the aesthetics business, suggesting that the popularity of newer treatments could either benefit or harm the market for toxins and fillers, depending on how patients allocate their out-of-pocket spending.

The paragraph discusses two main topics. Carrie Strom addresses the impacts of the obesity market on aesthetics, noting it causes short-term financial constraints for consumers but also drives interest in aesthetic treatments, which benefits providers in the long term. Additionally, Rob Michael discusses PBM reform, indicating that AbbVie does not have a preference between rebate systems or discounts, as they are confident in their product's competitive advantage based on clinical benefits and value, regardless of the system in place.

The paragraph discusses Rinvoq's performance in the atopic dermatitis market and addresses a question about its future potential and potential contributors like lutikizumab. Jeff Stewart highlights the recent significant increase in new patient capture for Rinvoq, despite competition from other interleukin products, and mentions that its market share has surpassed 20%. This growth is attributed to Rinvoq's effectiveness in achieving stringent endpoints, such as reducing itch to minimal levels and nearly clearing the skin.

The paragraph primarily discusses the competitive positioning and market share growth of Rinvoq compared to DUPI (likely Dupixent) in the pharmaceutical market. Rinvoq is performing well outside the U.S., sometimes even surpassing Dupixent in certain markets partly due to initial marketing strategies. The speaker expresses optimism for Rinvoq's future and mentions continued investment in this therapeutic area. Roopal Thakkar highlights a low market penetration rate, indicating many patients remain untreated, and introduces lutikizumab as the next product under development. The discussion then shifts to a Q&A session where Trung Huynh from UBS inquires about sales patterns and any unusual trends for Skyrizi and Rinvoq before upcoming changes to Medicare Part D.

The paragraph involves a discussion about geographic growth expectations for aesthetics, particularly between the U.S. and China. Scott Reents notes minimal impact from stocking on Skyrizi and Rinvoq, while Carrie Strom highlights the strategic planning for economic recovery in key markets like the U.S. and China, which have faced challenges in recent years. Additionally, significant growth is anticipated in Japan, deemed an underdeveloped market. The conversation also mentions pipeline catalysts in China that have contributed to increased market share for Allergan's aesthetics products. Liz Shea then prompts the operator to proceed with the final question from Chris Shibutani of Goldman Sachs.

In the paragraph, Roopal Thakkar discusses strategic plans for immunology beyond 2030, emphasizing the potential of combination therapies, particularly with assets like Skyrizi. The approach includes investigating monotherapies and combinations, with co-formulations as a goal for convenience and longer-acting therapies. Additionally, biomarkers are being considered to optimize these assets' development. The potential revenue implications and clinical benefits of these strategies are considered important. The question of eye care's future role, a small revenue segment linked to Allergan, is raised, but the paragraph primarily focuses on the broader immunology strategy.

The paragraph discusses AbbVie's strategies in immunology and eye care. For immunology, the company is exploring longer-acting agents like TL1A and TREM-1, developing bi-specifics like Lutikizumab, and working on oral peptides such as IL-23 and TL1A with improved potency and long half-lives. These efforts could lead to combination therapies. In eye care, Rob Michael highlights AbbVie's focus on glaucoma, retinal disease, and prescription dry eye, emphasizing the potential growth of the REGENXBIO Gene Therapy Program for wet AMD and diabetic retinopathy. He notes the potential of eye care as a long-term growth area for the company. Liz Shea closes the discussion.

The paragraph concludes a conference call and provides information on how to access a replay by visiting AbbVie's investor website. The operator then confirms the end of the conference and instructs participants to disconnect.

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