AbbVie Reports Second-Quarter 2019 Financial Results
NORTH CHICAGO, Ill., July 26, 2019 /PRNewswire/ -- AbbVie (NYSE:ABBV) announced financial results for the second quarter ended June 30, 2019.
"We continue to see strong momentum in our business, as we delivered revenue and adjusted EPS ahead of our expectations for the quarter and announced plans to acquire Allergan, a transformative transaction that will provide scale and diversity to our business and position AbbVie for top-tier performance over the long term," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Based on our strong performance year-to-date and our confidence in the outlook for the second half, we are raising our revenue and adjusted EPS guidance for 2019."
Second-Quarter Results
-- Worldwide net revenues were $8.255 billion, a decrease of 0.3 percent on
a GAAP basis. Adjusted net revenues were flat on a reported basis and
increased 1.5 percent operationally.
-- Global HUMIRA net revenues of $4.870 billion decreased 6.1 percent on a
reported basis, or 4.8 percent operationally. U.S. HUMIRA net revenues
were $3.793 billion, an increase of 7.7 percent. Internationally, HUMIRA
net revenues were $1.077 billion, a decrease of 35.2 percent on a
reported basis, or 31.0 percent operationally, due to biosimilar
competition.
-- Global net revenues from the hematologic oncology portfolio were $1.268
billion, an increase of 38.7 percent on a reported basis, or 39.1
percent operationally. Global IMBRUVICA net revenues were $1.099
billion, an increase of 29.3 percent, with U.S. net revenues of $886
million and international profit sharing of $213 million. Global
VENCLEXTA net revenues were $169 million.
-- Global HCV net revenues were $784 million, a decrease of 19.4 percent on
a reported basis, or 17.1 percent operationally. In the U.S., HCV net
revenues of $396 million decreased 6.2 percent in the quarter.
Internationally, HCV net revenues of $388 million decreased 29.5 percent
on a reported basis, or 25.4 percent operationally.
-- On a GAAP basis, the gross margin ratio in the second quarter was 78.0
percent. The adjusted gross margin ratio was 82.7 percent.
-- On a GAAP basis, selling, general and administrative expense was 20.0
percent of net revenues. The adjusted SG&A expense was 19.6 percent of
net revenues.
-- On a GAAP basis, research and development expense was 15.6 percent of
net revenues. The adjusted R&D expense was 14.9 percent of net revenues,
reflecting funding actions supporting all stages of our pipeline.
-- On a GAAP basis, the operating margin in the second quarter was 41.2
percent. The adjusted operating margin was 48.2 percent.
-- On a GAAP basis, net interest expense was $309 million. On a GAAP basis,
the tax rate in the quarter was 8.1 percent. The adjusted tax rate was
8.7 percent.
-- Diluted EPS in the second quarter was $0.49 on a GAAP basis. Adjusted
diluted EPS, excluding specified items, was $2.26.
-- Recorded a $2.3 billion increase in fair value of contingent
consideration related to SKYRIZI future milestones and royalty payments,
which was primarily due to a higher risk-adjusted cash flow forecast
following regulatory approvals in the second quarter, as well as lower
discount rates.
Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates.
Recent Events
-- AbbVie and Allergan plc announced that the companies have entered into a
definitive transaction agreement under which AbbVie will acquire
Allergan in a cash and stock transaction for a transaction equity value
of approximately $63 billion. The proposed acquisition is
transformational for both companies and provides immediate scale,
diversity and profitability to AbbVie's growth platform; enhances
long-term R&D investment and sustained focus on innovative science; and
increases global commercial scale to further maximize the value of
Allergan's portfolio. The combined company will produce robust cash flow
to support continued dividend growth and reduction of debt levels.
Additional information on the transaction can be found at
www.abbvie.com/abbvie-allergan.html
-- AbbVie announced the U.S. Food and Drug Administration (FDA) and
European Commission (EC) approvals of SKYRIZI (risankizumab) for the
treatment of moderate to severe plaque psoriasis in adult patients who
are candidates for systemic therapy. The approvals 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. SKYRIZI is part of a collaboration between Boehringer
Ingelheim (BI) and AbbVie, with AbbVie leading development and
commercialization globally.
-- At the World Congress of Dermatology, AbbVie presented new two-year data
showing SKYRIZI patients with moderate to severe psoriasis maintained
complete skin clearance. Longer-term results from the Phase 3 IMMhance
study showed 73 percent and 72 percent of patients treated with
continuous SKYRIZI experienced complete skin clearance (defined as
static Physician Global Assessment (sPGA) 0 and Psoriasis Area and
Severity Index 100, respectively) at week 94, among patients who
achieved a sPGA 0/1 at week 28. No new safety findings were observed at
two years.
-- At the European Congress of Rheumatology, AbbVie presented new long-term
data from upadacitinib Phase 3 studies SELECT-EARLY and SELECT-COMPARE
showing a significantly higher proportion of patients with rheumatoid
arthritis treated with upadacitinib monotherapy or in combination with
methotrexate (MTX) maintained clinical remission compared with MTX or
adalimumab plus MTX, respectively, at 48 weeks. Additionally, findings
from an integrated safety analysis across five studies in the SELECT
Phase 3 clinical program support the well-characterized safety profile
of upadacitinib in patients with moderately to severely active
rheumatoid arthritis.
-- AbbVie announced FDA approval for VENCLEXTA (venetoclax) in combination
with obinutuzumab as a chemotherapy-free combination regimen for
previously untreated chronic lymphocytic leukemia (CLL) or small
lymphocytic lymphoma (SLL) patients. The FDA reviewed the submission
under the Real-Time Oncology Review pilot program and approval was based
on data from the Phase 3 CLL14 trial evaluating VENCLEXTA in combination
with obinutuzumab compared to patients who received chlorambucil plus
obinutuzumab. This is the fourth approval and the fifth Breakthrough
Therapy designation for VENCLEXTA. 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.
-- At the American Society of Clinical Oncology (ASCO) Annual Meeting and
European Hematology Association (EHA) Annual Congress, AbbVie presented
over forty abstracts including results from the Phase 3 CLL14 trial of
VENCLEXTA plus obinutuzumab in previously untreated CLL patients,
results from the Phase 3 BELLINI trial of VENCLEXTA plus bortezomib and
dexamethasone in patients with relapsed/refractory (r/r) multiple
myeloma (MM) and results from the Phase 3 CLL12 trial of IMBRUVICA
(ibrutinib) in the asymptomatic watch and wait population of CLL. AbbVie
also presented new IMBRUVICA six-year and five-year data from the Phase
3 RESONATE and RESONATE-2 trials, respectively, evaluating its long-term
safety and efficacy benefit in CLL/SLL patients. IMBRUVICA is jointly
developed and commercialized with Janssen Biotech, Inc.
-- AbbVie announced the FDA lifted the partial clinical hold placed on
CANOVA, a Phase 3 trial evaluating VENCLEXTA for the investigational
treatment of r/r MM. The CANOVA trial evaluates VENCLEXTA in combination
with dexamethasone versus pomalidomide in combination with dexamethasone
in patients with r/r MM positive for the translocation (11;14)
abnormality. The partial clinical hold removal is based upon agreement
on revisions to the CANOVA study protocol, including new risk mitigation
measures, protocol-specified guidelines and updated futility criteria.
The t(11;14) genetic biomarker is among the most common and routinely
tested genetic abnormalities in patients with MM.
-- AbbVie provided an update on the depatuxizumab mafodotin (Depatux-M)
glioblastoma program, announcing that the Phase 3 INTELLANCE-1 study did
not meet its primary endpoint of overall survival at the interim
analysis and demonstrated no survival benefit for newly diagnosed
patients receiving Depatux-M. The Independent Data Monitoring Committee
responsible for interim analysis data review recommended stopping the
study due to lack of survival benefit for patients receiving Depatux-M
and enrollment in all ongoing Depatux-M studies has been halted. Results
will be submitted for presentation at a medical conference and for
publication in a peer-reviewed journal.
-- At the American Academy of Neurology Annual Meeting, AbbVie presented
six abstracts, including two oral presentations showing AbbVie's
research progress in difficult to treat neurological conditions.
Investigators presented pharmacokinetics and safety/tolerability data on
ABBV-951, a levodopa/carbidopa prodrug, delivering a 24-hour continuous,
subcutaneous infusion under investigation for the treatment for advanced
Parkinson's disease. Investigators also presented data from a Phase 1,
multiple-dose study of elezanumab in patients with relapsing forms of
multiple sclerosis.
-- AbbVie announced that it has resolved U.S. HUMIRA (adalimumab)
litigation with BI. Under the terms of the resolution, AbbVie will grant
BI a non-exclusive license to its HUMIRA-related intellectual property
in the United States. The U.S. license for BI will begin on July 1,
2023. BI will pay royalties to AbbVie for licensing its HUMIRA patents
and acknowledges the validity and enforceability of the licensed
patents. AbbVie will make no payments of any form to BI.
-- AbbVie announced the acquisition of Mavupharma, a privately held
biopharmaceutical company focused on novel approaches to target the
STING (STimulator of INterferon Genes) pathway for the treatment of
cancer. STING pathway signaling plays an important role in the
generation of an immune response directed at tumors, and enhancing STING
signaling has shown promise in a variety of tumor models. STING pathway
stimulation has the potential to increase the susceptibility of tumors
and broaden treatment options for patients. The collaboration broadens
AbbVie's oncology research platform to expand the development of
potentially life-changing treatments for patients.
Full-Year 2019 Outlook
AbbVie is updating its GAAP diluted EPS guidance for the full-year 2019 from $7.26 to $7.36 to $5.69 to $5.79, representing growth of 56.8 percent at the midpoint, inclusive of a non-cash charge for SKYRIZI contingent consideration following regulatory approvals in the second quarter. AbbVie is raising its previously announced adjusted EPS guidance range for the full-year 2019 from $8.73 to $8.83 to $8.82 to $8.92, representing growth of 12.1 percent at the midpoint. The company's 2019 adjusted diluted EPS guidance excludes $3.13 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
Statements Required by the Irish Takeover Rules
The earnings guidance contained in this press release constitutes a profit forecast for the purposes of the Irish Takeover Rules. In accordance with Rule 28.4 of the Irish Takeover Rules, this profit forecast shall be repeated in the proxy statement, including the scheme document and the reports required by Rule 28.3 of the Irish Takeover Rules shall be mailed to Allergan shareholders with the proxy statement, including the scheme document.
The directors of AbbVie accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of AbbVie (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Any holder of 1% or more of any class of relevant securities of AbbVie Inc. may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013.
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 or LinkedIn.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our second-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.
No Offer or Solicitation
This release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the proposed acquisition of Allergan or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this release is not an offer of securities for sale into the United States. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. Any securities issued in the proposed acquisition are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act of 1933, as amended. The proposed acquisition will be made solely by means of the scheme document (or, if applicable, the takeover offer document), which will contain the full terms and conditions of the proposed acquisition, including details with respect to the Allergan shareholder vote in respect of the proposed acquisition. Any decision in respect of, or other response to, the proposed acquisition, should be made only on the basis of the information contained in the scheme document.
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, the possibility that the proposed acquisition of Allergan will not be pursued, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other conditions to the proposed acquisition, failure to realize the expected benefits of the proposed acquisition, failure to promptly and effectively integrate Allergan's businesses, significant transaction costs and/or unknown or inestimable liabilities, potential litigation associated with the proposed acquisition, 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 June 30, 2019
(Unaudited)
% Change vs. 2Q18
Net Revenues (in millions) International
Total
U.S. Int'l. Total U.S. Operational Reported Operational Reported
---
ADJUSTED NET
REVENUES
a $5,964 $2,291 $8,255 9.5% (13.8)% (18.4)% 1.5% -%
Immunology 3,835 1,083 4,918 8.9 (30.7) (34.9) (3.9) (5.2)
Humira 3,793 1,077 4,870 7.7 (31.0) (35.2) (4.8) (6.1)
Skyrizi 42 6 48
n/m
n/m
n/m
n/m
n/m
Hematologic Oncology 1,003 265 1,268 35.5 54.1 52.1 39.1 38.7
Imbruvicab 886 213 1,099 27.9 35.9 35.9 29.3 29.3
Venclexta 117 52 169
>100.0
>100.0
>100.0
>100.0
>100.0
HCV 396 388 784 (6.2) (25.4) (29.5) (17.1) (19.4)
Mavyret 396 384 780 (6.0) (20.4) (24.7) (14.0) (16.3)
Viekira - 4 4
n/m (86.4) (88.8) (87.9) (90.3)
Other Key Products 720 311 1,031 (6.9) (3.2) (9.9) (5.7) (7.8)
Creon 257 257 17.5
n/a
n/a 17.5 17.5
Lupron 168 41 209 (6.4) 3.2 (4.5) (4.5) (6.0)
Synthroid 203 203 4.9
n/a
n/a 4.9 4.9
Synagis - 38 38
n/a (3.9) (11.9) (3.9) (11.9)
Duodopa 24 91 115 12.8 11.0 3.6 11.3 5.3
Sevoflurane 18 73 91 (3.3) (16.3) (21.9) (14.1) (18.8)
Kaletra 10 67 77 (33.9) (6.8) (12.9) (10.8) (16.0)
AndroGel 22 22 (83.0)
n/a
n/a (83.0) (83.0)
Orilissa 18 1 19
n/m
n/m
n/m
n/m
n/m
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
n/m = not meaningful
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.
Key Product Revenues
Six Months Ended June 30, 2019
(Unaudited)
% Change vs. 6M18
Net Revenues (in millions) International Total
U.S. Int'l. Total U.S. Operational Reported Operational Reported
---
ADJUSTED NET
REVENUES
a $11,234 $4,849 $16,083 9.7% (14.1)% (18.6)% 1.0% (0.7)%
Immunology 7,050 2,314 9,364 8.1 (26.8) (31.3) (3.9) (5.4)
Humira 7,008 2,308 9,316 7.4 (27.0) (31.5) (4.3) (5.8)
Skyrizi 42 6 48
n/m
n/m
n/m
n/m
n/m
Hematologic Oncology 1,937 504 2,441 37.8 54.5 52.5 41.0 40.6
Imbruvicab 1,715 406 2,121 30.2 37.6 37.6 31.6 31.6
Venclexta 222 98 320
>100.0
>100.0
>100.0
>100.0
>100.0
HCV 799 800 1,599 4.4 (25.2) (29.0) (13.2) (15.5)
Mavyret 799 771 1,570 4.8 (20.5) (24.3) (9.6) (11.8)
Viekira - 29 29 (100.0) (69.1) (72.7) (70.6) (74.2)
Other Key Products 1,459 865 2,324 (3.9) (2.7) (8.3) (3.4) (5.6)
Creon 484 484 13.1
n/a
n/a 13.1 13.1
Lupron 359 79 438 0.5 1.0 (6.7) 0.6 (0.9)
Synthroid 385 385 2.7
n/a
n/a 2.7 2.7
Synagis - 325 325
n/a (6.6) (10.9) (6.6) (10.9)
Duodopa 46 180 226 20.1 11.3 3.9 12.8 6.8
Sevoflurane 35 148 183 (2.0) (13.2) (19.1) (11.4) (16.3)
Kaletra 23 132 155 (15.0) 1.7 (3.9) (1.0) (5.7)
AndroGel 96 96 (62.8)
n/a
n/a (62.8) (62.8)
Orilissa 31 1 32
n/m
n/m
n/m
n/m
n/m
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
n/m = not meaningful
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 and Six Months Ended June 30, 2019 and 2018
(Unaudited) (In millions, except per share data)
Second Quarter Six Months
Ended June 30 Ended June 30
2019 2018 2019 2018
---
Net revenues $
8,255 $
8,278 $
16,083 $
16,212
Cost of products
sold 1,819 1,934 3,513 3,861
Selling, general and
administrative 1,654 1,760 3,334 3,551
Research and
development 1,291 1,322 2,580 2,566
Acquired in-process
research and
development 91 246 69
Other expense - 500 500
Total operating
costs and expenses 4,855 5,516 9,673 10,547
Operating earnings 3,400 2,762 6,410 5,665
Interest expense,
net 309 272 634 523
Net foreign exchange
loss 6 8 12 16
Other expense, net 2,278 470 2,413 317
Earnings before
income tax expense 807 2,012 3,351 4,809
Income tax expense 66 29 154 43
Net earnings $
741 $
1,983 $
3,197 $
4,766
Diluted earnings per
share $
0.49 $
1.26 $
2.14 $
2.99
Adjusted diluted
earnings per sharea $
2.26 $
2.00 $
4.40 $
3.87
Weighted-average
diluted shares
outstanding 1,484 1,572 1,483 1,584
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 June 30, 2019
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
2Q19
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
807 $
741 $
0.49
Adjusted for specified items:
Intangible asset
amortization 388 321 0.22
Milestones and other
R&D expenses 35 35 0.02
Acquired IPR&D 91 86 0.06
Change in fair value
of contingent
consideration 2,304 2,304 1.55
Restructuring 8 6
Litigation reserves 10 8
Acquisition related
costs 31 27 0.02
Tax audit settlement - (178) (0.12)
Other 20 20 0.02
As adjusted (non-
GAAP) $
3,694 $
3,370 $
2.26
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. Acquisition related
costs reflect transaction and
financing costs related to the
proposed Allergan acquisition.
2. The impact of the specified items by line item was as follows:
2Q19
Cost of
SG&A
R&D Acquired Interest Other
expense, expense,
products IPR&D net net
sold
---
As reported (GAAP) $
1,819 $
1,654 $
1,291 $
91 $
309 $
2,278
Adjusted for specified items:
Intangible asset amortization (388)
Milestones and other R&D expenses - (35)
Acquired IPR&D - (91)
Change in fair value of contingent consideration - (2,304)
Restructuring (3) (5)
Litigation reserves - (10)
Acquisition related costs - (24) (7)
Other (1) (19)
As adjusted (non-GAAP) $
1,427 $
1,620 $
1,232
$ $
302 $
(26)
3. The adjusted tax
rate for the second
quarter of 2019 was 8.7
percent, as detailed
below:
2Q19
Pre-tax Income Tax rate
earnings taxes
8.1
As reported (GAAP) $
807 $
66 %
Specified items 2,887 258 8.9
%
8.7
As adjusted (non-GAAP) $
3,694 $
324 %
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended June 30, 2018
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
2Q18
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
2,012 $
1,983 $
1.26
Adjusted for specified items:
Intangible asset amortization 324 266 0.17
Milestones and other R&D expenses 55 55 0.03
Calico collaboration 500 500 0.32
Charitable contributions 120 93 0.06
Change in fair value of contingent consideration 485 485 0.30
Impacts of U.S. tax reform - (202) (0.13)
Other (20) (15) (0.01)
As adjusted (non-GAAP) $
3,476 $
3,165 $
2.00
Milestones and other R&D expenses
are associated with milestone
payments for previously announced
collaborations. Impacts of U.S. tax
reform reflects a net tax benefit
related to the timing of the
legislation's phase in on certain
subsidiaries. Other primarily
includes milestone revenue under a
previously announced collaboration.
2. The impact of the specified items by line item was as follows:
2Q18
Net Cost of
SG&A
R&D Other Other
revenues operating expense,
products expense net
sold
---
As reported (GAAP) $
8,278 $
1,934 $
1,760 $
1,322 $
500 $
470
Adjusted for specified items:
Intangible asset amortization - (324)
Milestones and other R&D expenses - (55)
Calico collaboration - (500)
Charitable contributions - (120)
Change in fair value of contingent consideration - (485)
Other (20) (3) 3
As adjusted (non-GAAP) $
8,258 $
1,607 $
1,643 $
1,267
$ $
(15)
3. The adjusted tax rate for the second quarter of 2018 was 9.0 percent, as detailed below:
2Q18
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
2,012 $
29 1.5
%
Specified items 1,464 282 19.3
%
As adjusted (non-GAAP) $
3,476 $
311 9.0
%
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Six Months Ended June 30, 2019
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
6M19
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
3,351 $
3,197 $
2.14
Adjusted for specified items:
Intangible asset amortization 773 639 0.43
Milestones and other R&D expenses 75 75 0.05
Acquired IPR&D 246 241 0.16
Change in fair value of contingent consideration 2,473 2,475 1.67
Restructuring 171 139 0.09
Litigation reserves 20 16 0.01
Acquisition related costs 31 27 0.02
Tax audit settlement - (267) (0.18)
Other 20 20 0.01
As adjusted (non-GAAP) $
7,160 $
6,562 $
4.40
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. Acquisition related
costs reflect transaction and
financing costs related to the
proposed Allergan acquisition.
2. The impact of the specified items by line item was as follows:
6M19
Cost of
SG&A
R&D Acquired Interest Other
expense, expense,
products IPR&D net net
sold
---
As reported (GAAP) $
3,513 $
3,334 $
2,580 $
246 $
634 $
2,413
Adjusted for specified items:
Intangible asset amortization (773)
Milestones and other R&D expenses - (75)
Acquired IPR&D - (246)
Change in fair value of contingent consideration - (2,473)
Restructuring (9) (107) (55)
Litigation reserves - (20)
Acquisition related costs - (24) (7)
Other (1) (19)
As adjusted (non-GAAP) $
2,730 $
3,183 $
2,431
$ $
627 $
(60)
3. The adjusted tax rate for the first six months of 2019 was 8.3 percent, as detailed below:
6M19
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
3,351 $
154 4.6
%
Specified items 3,809 444 11.6
%
As adjusted (non-GAAP) $
7,160 $
598 8.3
%
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Six Months Ended June 30, 2018
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
6M18
Earnings Diluted
Pre-tax After-tax
EPS
---
As reported (GAAP) $
4,809 $
4,766 $
2.99
Adjusted for specified items:
Intangible asset amortization 654 538 0.34
Milestones and other R&D expenses 87 87 0.05
Acquired IPR&D 69 69 0.04
Calico collaboration 500 500 0.32
Charitable contributions 120 93 0.06
Change in fair value of contingent consideration 337 337 0.21
Litigation reserves 118 100 0.06
Impacts of U.S. tax reform - (357) (0.22)
Other 31 32 0.02
As adjusted (non-GAAP) $
6,725 $
6,165 $
3.87
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 legislation's
phase in on certain subsidiaries.
Other primarily includes milestone
revenue under a previously
announced collaboration and
restructuring charges associated
with streamlining global
operations.
2. The impact of the specified items by line item was as follows:
6M18
Net Cost of
SG&A
R&D Acquired Other Other
revenues operating expense,
products IPR&D expense net
sold
---
As reported (GAAP) $
16,212 $
3,861 $
3,551 $
2,566 $
69 $
500 $
317
Adjusted for specified items:
Intangible asset amortization - (654)
Milestones and other R&D expenses - (87)
Acquired IPR&D - (69)
Calico collaboration - (500)
Charitable contributions - (120)
Change in fair value of contingent consideration - (337)
Litigation reserves - (118)
Other (20) (28) (23)
As adjusted (non-GAAP) $
16,192 $
3,179 $
3,313 $
2,456
$
$ $
(20)
3. The adjusted tax rate for the first six months of 2018 was 8.3 percent, as detailed below:
6M18
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
4,809 $
43 0.9
%
Specified items 1,916 517 27.0
%
As adjusted (non-GAAP) $
6,725 $
560 8.3
%
===
View original content:http://www.prnewswire.com/news-releases/abbvie-reports-second-quarter-2019-financial-results-300891626.html
SOURCE AbbVie
