AbbVie Reports First-Quarter 2019 Financial Results
NORTH CHICAGO, Ill., April 25, 2019 /PRNewswire/ -- AbbVie (NYSE:ABBV) announced financial results for the first quarter ended March 31, 2019.
"We are off to another excellent start, including first quarter sales and earnings above expectations," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Additionally, we have made tremendous progress advancing our pipeline, including the recent approval of SKYRIZI, which has the potential to set a new standard of care in psoriasis and represents a significant long-term opportunity for AbbVie. We are extremely pleased with our strong performance and based on the continued business momentum, are increasing our full-year EPS guidance."
First-Quarter Results
-- Worldwide net revenues of $7.828 billion decreased 1.3 percent on a
reported basis and increased 0.4 percent operationally.
-- Global HUMIRA net revenues of $4.446 billion decreased 5.6 percent on a
reported basis, or 3.8 percent operationally. In the U.S., HUMIRA net
revenues of $3.215 billion grew 7.1 percent in the quarter.
Internationally, HUMIRA net revenues of $1.231 billion decreased 27.9
percent on a reported basis, or 23.0 percent operationally, due to
biosimilar competition.
-- Global net revenues from the hematologic oncology portfolio of $1.173
billion increased 42.8 percent on a reported basis, or 43.2 percent
operationally. Global IMBRUVICA net revenues were $1.022 billion, with
U.S. net revenues of $829 million and international profit sharing of
$193 million. Global VENCLEXTA net revenues were $151 million.
-- Global HCV net revenues of $815 million decreased 11.3 percent on a
reported basis, or 9.1 percent operationally. In the U.S., HCV net
revenues of $403 million grew 17.3 percent in the quarter.
-- On a GAAP basis, the gross margin ratio in the first quarter was 78.4
percent. The adjusted gross margin ratio was 83.3 percent.
-- On a GAAP basis, selling, general and administrative expense was 21.5
percent of net revenues. The adjusted SG&A expense was 20.0 percent of
net revenues.
-- On a GAAP basis, research and development expense was 16.5 percent of
net revenues. The adjusted R&D expense was 15.3 percent of net revenues,
reflecting funding actions supporting all stages of our pipeline.
-- On a GAAP basis, the operating margin in the first quarter was 38.5
percent. The adjusted operating margin was 48.1 percent.
-- On a GAAP basis, net interest expense was $325 million. On a GAAP basis,
the tax rate in the quarter was 3.5 percent. The adjusted tax rate was
7.9 percent.
-- Diluted EPS in the first quarter was $1.65 on a GAAP basis. Adjusted
diluted EPS, excluding specified items, was $2.14, up 14.4 percent.
Recent Events
-- AbbVie announced regulatory approvals for SKYRIZI for the treatment of
adult patients with moderate to severe plaque psoriasis who are
candidates for systemic therapy or phototherapy. The approvals from the
U.S. Food and Drug Administration (FDA) and the Japanese Ministry of
Health, Labour and Welfare are based on results from four pivotal Phase
3 studies, ultIMMa-1, ultIMMa-2, IMMvent and IMMhance, evaluating more
than 2,000 patients with moderate to severe plaque psoriasis.
Additionally, the European Medicines Agency's Committee for Medicinal
Products for Human Use adopted a positive opinion for SKYRIZI for the
treatment of moderate to severe plaque psoriasis in adult patients who
are candidates for systemic therapy. SKYRIZI is part of a collaboration
between Boehringer Ingelheim and AbbVie, with AbbVie leading development
and commercialization globally.
-- At the American Academy of Dermatology (AAD) Annual Meeting, AbbVie
presented data from 19 abstracts, including 10 oral presentations and 9
poster presentations. Long-term data from multiple studies investigating
SKYRIZI for the treatment of plaque psoriasis were presented, including
the first integrated efficacy analyses highlighting response over time
and across various subgroups. Additionally, AbbVie presented up to 40
months of SKYRIZI safety data indicating adverse events were low and
similar to comparator groups and data showing that psoriasis patients
achieved significantly higher PASI 90 response rates after switching to
SKYRIZI versus those who remained on adalimumab. AbbVie also presented
results from a Phase 2 upadacitinib atopic dermatitis study, as well as
data from HUMIRA (adalimumab) in multiple psoriatic diseases.
-- AbbVie announced that the FDA accepted for priority review its New Drug
Application (NDA) for upadacitinib for the treatment of adult patients
with moderate to severe rheumatoid arthritis. Upadacitinib is an
investigational once-daily oral JAK1-selective inhibitor being studied
for multiple immune-mediated diseases. The NDA is supported by data from
the global upadacitinib SELECT Phase 3 rheumatoid arthritis program
evaluating more than 4,000 patients with moderate to severe rheumatoid
arthritis across five of six Phase 3 studies. AbbVie anticipates a
regulatory decision in the third quarter of 2019.
-- AbbVie announced that the FDA approved the use of IMBRUVICA (ibrutinib)
in combination with obinutuzumab, for adult patients with previously
untreated chronic lymphocytic leukemia/small lymphocytic lymphoma
(CLL/SLL). This milestone marked the 10th FDA approval for IMBRUVICA in
six different disease areas since 2013 and expands the use of IMBRUVICA,
which can already be administered as a single agent or in combination
with bendamustine and rituximab for adult CLL/SLL patients. The FDA
approval is based on results from the Phase 3 iLLUMINATE study, which
showed the combination of IMBRUVICA plus obinutuzumab significantly
improved progression-free survival compared to chlorambucil plus
obinutuzumab in previously untreated CLL/SLL patients who were 65 years
or older, or less than 65 years old with coexisting conditions. The FDA
also updated the IMBRUVICA label to include additional long-term
efficacy follow-up data from the Phase 3 RESONATE and RESONATE-2
studies, supporting its use as a single agent in CLL/SLL. IMBRUVICA is
jointly developed and commercialized with Janssen Biotech, Inc.
-- AbbVie announced that the FDA granted a fifth Breakthrough Therapy
Designation to VENCLEXTA (venetoclax), for use in combination with
obinutuzumab as a fixed duration investigational combination, for
untreated adult patients with CLL. The designation coincides with the
completion of the supplemental New Drug Application (sNDA) submission to
the FDA for approval in previously-untreated CLL patients. In addition,
the sNDA was granted priority review by the FDA. The sNDA for the
VENCLEXTA and obinutuzumab combination is based on data from the Phase 3
CLL14 trial and is being reviewed by the FDA under its Real-Time
Oncology Review pilot program. Venetoclax is being developed by AbbVie
and Roche and is jointly commercialized by AbbVie and Genentech, a
member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.
-- AbbVie provided an update on the VENCLEXTA multiple myeloma program,
announcing that the FDA placed a partial clinical hold on all clinical
trials evaluating VENCLEXTA for the investigational treatment of
multiple myeloma. The partial clinical hold followed a review of data
from the ongoing Phase 3 BELLINI trial, a study in relapsed/refractory
multiple myeloma, in which a higher proportion of deaths was observed in
the VENCLEXTA arm compared to the control arm of the trial. This action
does not impact any of the approved indications for VENCLEXTA, such as
CLL or acute myeloid leukemia, and is limited to investigational
clinical trials in multiple myeloma. Additional analyses are ongoing and
data will be published in a peer-reviewed journal and/or presented at a
future medical meeting.
-- AbbVie announced a strategic partnership with Teneobio, a biotechnology
company developing a new class of biologics for the treatments of
cancer, autoimmunity and infectious diseases. Under the agreement,
AbbVie and Teneobio will develop and commercialize TNB-383B, a B-cell
maturation antigen (BCMA)-targeting immunotherapeutic for the potential
treatment of multiple myeloma. TNB-383B is a bispecific antibody that
simultaneously targets BCMA and CD3 and is designed to direct the body's
own immune system to target and kill BCMA expressing tumor cells. The
collaboration broadens AbbVie's oncology research platform to expand the
development of potentially life-changing treatments for patients.
-- AbbVie announced a strategic collaboration with Voyager Therapeutics, a
clinical-stage gene therapy company focused on developing life-changing
treatments for severe neurological diseases. The Voyager Therapeutics
transaction expands collaborative efforts on vectorized antibodies to
target pathological species of alpha-synuclein for the potential
treatment of Parkinson's disease and other diseases characterized by the
abnormal accumulation of misfolded alpha-synuclein protein. Voyager's
vectorized antibody platform and approach aims to improve the delivery
of sufficient quantities of antibodies across the blood-brain barrier by
delivering the genes that encode for the production of therapeutic
antibodies. The collaboration broadens AbbVie's neuroscience research
platform to expand the development of potentially life-changing
treatments for patients.
Full-Year 2019 Outlook
AbbVie is raising its GAAP diluted EPS guidance for the full-year 2019 to $7.26 to $7.36. The company's 2019 GAAP guidance does not reflect a non-cash charge for contingent consideration related to the approval of SKYRIZI, which is planned to be communicated on the second-quarter earnings call. AbbVie is raising its previously announced adjusted EPS guidance range for the full-year 2019 from $8.65 to $8.75 to $8.73 to $8.83, representing growth of 11.0 percent at the mid-point. The company's 2019 adjusted diluted EPS guidance excludes $1.47 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
About AbbVie
AbbVie is a global, research-driven biopharmaceutical company committed to developing innovative advanced therapies for some of the world's most complex and critical conditions. The company's mission is to use its expertise, dedicated people and unique approach to innovation to markedly improve treatments across four primary therapeutic areas: immunology, oncology, virology and neuroscience. In more than 75 countries, AbbVie employees are working every day to advance health solutions for people around the world. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on Twitter, Facebook, LinkedIn or Instagram.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our first-quarter performance. The call will be webcast through AbbVie's Investor Relations website at investors.abbvie.com. An archived edition of the call will be available after 11:00 a.m. Central time.
Non-GAAP Financial Results
Financial results for 2019 and 2018 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. AbbVie's management believes non-GAAP financial measures provide useful information to investors regarding AbbVie's results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. The company's 2019 financial guidance is also being provided on both a reported and a non-GAAP basis.
Forward-Looking Statements
Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project" and similar expressions, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie's operations is set forth in Item 1A, "Risk Factors," of AbbVie's 2018 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission (SEC). AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
AbbVie Inc.
Key Product Revenues
Quarter Ended March 31, 2019
(Unaudited)
% Change vs. 1Q18
Net Revenues (in millions) International
Total
U.S. Int'l. Total U.S. Operational Reported Operational Reported
---
ADJUSTED NET
REVENUES
a $5,270 $2,558 $7,828 10.0% (14.2)% (18.6)% 0.4% (1.3)%
Immunology 3,215 1,231 4,446 7.1 (23.0) (27.9) (3.8) (5.6)
Humira 3,215 1,231 4,446 7.1 (23.0) (27.9) (3.8) (5.6)
Hematologic Oncology 934 239 1,173 40.4 55.0 53.0 43.2 42.8
Imbruvicab 829 193 1,022 32.8 39.6 39.6 34.0 34.0
Venclexta 105 46 151
>100.0
>100.0
>100.0
>100.0
>100.0
HCV 403 412 815 17.3 (24.9) (28.4) (9.1) (11.3)
Mavyret 403 387 790 18.3 (20.4) (23.8) (4.9) (6.9)
Viekira - 25 25 (100.0) (58.5) (62.9) (60.4) (64.7)
Other Key Products 726 554 1,280 (2.5) (2.5) (7.5) (2.5) (4.7)
Creon 227 227 8.6
n/a
n/a 8.6 8.6
Lupron 191 38 229 7.4 (1.4) (9.0) 5.7 4.2
Synthroid 182 182 0.3
n/a
n/a 0.3 0.3
Synagis - 287 287
n/a (7.0) (10.8) (7.0) (10.8)
Duodopa 22 89 111 28.5 11.6 4.2 14.4 8.3
Sevoflurane 17 75 92 (0.6) (10.1) (16.2) (8.5) (13.6)
Kaletra 13 65 78 3.4 12.6 7.7 10.9 6.9
AndroGel 74 74 (42.9)
n/a
n/a (42.9) (42.9)
Note: "Operational" comparisons are
presented at constant currency
rates and reflect comparative
local currency net revenues at the
prior year's foreign exchange
rates.
n/a = not applicable
a Adjusted net revenues exclude
specified items. Refer to the
Reconciliation of GAAP Reported to
Non-GAAP Adjusted Information for
further details. Percentage change
is calculated using adjusted net
revenues.
b Reflects profit sharing for
Imbruvica international revenues.
AbbVie Inc.
Consolidated Statements of Earnings
Quarter Ended March 31, 2019 and 2018
(Unaudited) (In millions, except per share data)
First Quarter
Ended March 31
2019 2018
---
Net
revenues $
7,828 $
7,934
Cost
of
products
sold 1,694 1,927
Selling,
general
and
administrative 1,680 1,791
Research
and
development 1,289 1,244
Acquired
in-
process
research
and
development 155 69
Total
operating
costs
and
expenses 4,818 5,031
Operating
earnings 3,010 2,903
Interest
expense,
net 325 251
Net
foreign
exchange
loss 6 8
Other
(income)
expense,
net 135 (153)
Earnings
before
income
tax
expense 2,544 2,797
Income
tax
expense 88 14
Net
earnings $
2,456 $
2,783
Diluted
earnings
per
share $
1.65 $
1.74
Adjusted
diluted
earnings
per
sharea $
2.14 $
1.87
Weighted-
average
diluted
shares
outstanding 1,483 1,596
a Refer to the Reconciliation of
GAAP Reported to Non-GAAP
Adjusted Information for further
details.
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended March 31, 2019
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
1Q19
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
2,544 $
2,456 $
1.65
Adjusted for specified items:
Intangible asset
amortization 385 318 0.21
Milestones and other
R&D expenses 40 40 0.03
Acquired IPR&D 155 155 0.10
Change in fair value
of contingent
consideration 169 171 0.12
Restructuring 163 133 0.09
Litigation reserves 10 8
Tax audit settlement - (89) (0.06)
As adjusted (non-
GAAP) $
3,466 $
3,192 $
2.14
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects
upfront payments related to R&D collaborations and licensing arrangements with third parties. Restructuring is primarily associated with
streamlining global operations.
2. The impact of the specified items by line item was as follows:
1Q19
Cost of
SG&A
R&D Acquired Other
products sold IPR&D (income)
expense,
net
---
As reported (GAAP) $
1,694 $
1,680 $
1,289 $
155 $
135
Adjusted for specified items:
Intangible asset amortization (385)
Milestones and other R&D expenses - (40)
Acquired IPR&D - (155)
Change in fair value of contingent consideration - (169)
Restructuring (6) (107) (50)
Litigation reserves - (10)
As adjusted (non-GAAP) $
1,303 $
1,563 $
1,199
$ $
(34)
3. The adjusted tax rate for the first quarter of 2019 was 7.9 percent, as detailed below:
1Q19
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
2,544 $
88 3.5
%
Specified items 922 186 20.2
%
As adjusted (non-GAAP) $
3,466 $
274 7.9
%
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended March 31, 2018
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
1Q18
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
2,797 $
2,783 $
1.74
Adjusted for specified items:
Intangible asset
amortization 330 272 0.17
Milestones and other
R&D expenses 32 32 0.02
Acquired IPR&D 69 69 0.04
Change in fair value
of contingent
consideration (148) (148) (0.09)
Litigation reserves 118 100 0.06
Impacts of U.S. tax
reform - (155) (0.10)
Other 51 47 0.03
As adjusted (non-
GAAP) $
3,249 $
3,000 $
1.87
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects
upfront payments related to R&D collaborations and licensing arrangements with third parties. Impacts of U.S. tax reform reflects a net tax benefit
related to the timing of the new legislation's phase in on certain subsidiaries. Other primarily includes restructuring charges associated with
streamlining global operations.
2. The impact of the specified items by line item was as follows:
1Q18
Cost of
SG&A
R&D Acquired Other
products sold IPR&D (income)
expense,
net
---
As reported (GAAP) $
1,927 $
1,791 $
1,244 $
69 $
(153)
Adjusted for specified items:
Intangible asset amortization (330)
Milestones and other R&D expenses - (32)
Acquired IPR&D - (69)
Change in fair value of contingent consideration - 148
Litigation reserves - (118)
Other (25) (3) (23)
As adjusted (non-GAAP) $
1,572 $
1,670 $
1,189
$ $
(5)
3. The adjusted tax rate for the first quarter of 2018 was 7.6 percent, as detailed below:
1Q18
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
2,797 $
14 0.5
%
Specified items 452 235 51.8
%
As adjusted (non-GAAP) $
3,249 $
249 7.6
%
===
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SOURCE AbbVie
