AbbVie Reports First-Quarter 2020 Financial Results

NORTH CHICAGO, Ill., May 1, 2020 /PRNewswire/ -- AbbVie (NYSE:ABBV) announced financial results for the first quarter ended March 31, 2020.

"During this challenging time, we are doing everything possible to ensure our employees remain safe, our patients receive their medicines and assistance is available to help those most deeply impacted by the COVID-19 pandemic," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Our business continues to perform well and remains strong, which speaks volumes as to the robustness of our portfolio and the commitment from our many dedicated employees across the organization."

First-Quarter Results

    --  Worldwide net revenues were $8.619 billion, an increase of 10.1 percent
        on a reported basis, or 10.7 percent operationally, including a 240
        basis point stocking benefit related to the COVID-19 pandemic.
    --  Global HUMIRA net revenues of $4.703 billion increased 5.8 percent on a
        reported basis, or 6.4 percent operationally. U.S. HUMIRA net revenues
        were $3.656 billion, an increase of 13.7 percent. Internationally,
        HUMIRA net revenues were $1.047 billion, a decrease of 14.9 percent on a
        reported basis, or 12.8 percent operationally, due to biosimilar
        competition.
    --  Global net revenues from the hematologic oncology portfolio were $1.549
        billion, an increase of 32.1 percent on a reported basis, or 32.3
        percent operationally. Global IMBRUVICA net revenues were $1.232
        billion, an increase of 20.6 percent, with U.S. net revenues of $966
        million and international profit sharing of $266 million. Global
        VENCLEXTA net revenues were $317 million.
    --  Global SKYRIZI net revenues were $300 million and global RINVOQ net
        revenues were $86 million.
    --  On a GAAP basis, the gross margin ratio in the first quarter was 77.5
        percent. The adjusted gross margin ratio was 82.7 percent.
    --  On a GAAP basis, selling, general and administrative expense was 19.7
        percent of net revenues. The adjusted SG&A expense was 18.6 percent of
        net revenues.
    --  On a GAAP basis, research and development expense was 16.0 percent of
        net revenues. The adjusted R&D expense was 14.3 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 41.8
        percent. The adjusted operating margin was 49.8 percent.
    --  On a GAAP basis, net interest expense was $428 million. The adjusted net
        interest expense was $284 million.
    --  On a GAAP basis, the tax rate in the quarter was 2.8 percent. The
        adjusted tax rate was 9.7 percent.
    --  Diluted EPS in the first quarter was $2.02 on a GAAP basis. Adjusted
        diluted EPS, excluding specified items, was $2.42, including a $0.09
        stocking benefit related to the COVID-19 pandemic.

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 announced a donation of $35 million to support COVID-19 relief
        efforts with partners International Medical Corps, Direct Relief and
        Feeding America. In the U.S., AbbVie's funds will be used to support
        healthcare capacity for hospitals as well as protect vulnerable
        populations by enabling access to food and essential supplies. In
        Europe, the donation will provide critical equipment and supplies to
        patients and front-line healthcare workers in the hardest-hit countries.
        Additionally, AbbVie is doubling the AbbVie Foundation match for
        COVID-19-related contributions by its employees, whereby the AbbVie
        Foundation will match $2 to every $1 employees donate to a nonprofit for
        this purpose.
    --  AbbVie is supporting COVID-19 clinical research by collaborating with
        health authorities and institutions globally to determine antiviral
        activity as well as efficacy and safety of KALETRA/ALUVIA
        (lopinavir/ritonavir), AbbVie's antiretroviral therapy for the treatment
        of HIV, against COVID-19. Collaboration partners include European health
        authorities and the U.S. Food and Drug Administration (FDA), Centers for
        Disease Control and Prevention, National Institutes of Health and
        Biomedical Advanced Research and Development Authority. Along with
        industry partners, the company has joined the Innovative Medicines
        Initiative to support research and discovery of targeted medicines
        against COVID-19.
    --  AbbVie has initiated the Phase 2 iNSPIRE clinical trial to evaluate the
        potential of IMBRUVICA (ibrutinib) to treat patients with moderate to
        severe COVID-19. The trial will evaluate the role of IMBRUVICA in
        preventing pro-inflammatory cytokines through multiple pathways and
        reducing the risk of pulmonary failure, the most common cause of
        mortality related to COVID-19 infection. The study aims to determine the
        safety and efficacy of adding IMBRUVICA to best supportive care in
        treating patients with COVID-19 pulmonary distress.
    --  AbbVie announced it received final approval from the European Commission
        (EC) and has entered into a consent decree agreement with staff of the
        U.S. Federal Trade Commission (FTC) regarding AbbVie's pending
        acquisition of Allergan. The consent decree remains subject to further
        review and approval by the Commissioners of the FTC. AbbVie and Allergan
        anticipate deal closing in May 2020.
    --  AbbVie announced the FDA approval of IMBRUVICA in combination with
        rituximab for the treatment of previously untreated patients with
        chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL).
        The approval is based on positive results from the landmark Phase 3
        E1912 study, in which IMBRUVICA plus rituximab demonstrated superior
        progression free survival (PFS) against the chemoimmunotherapy regimen
        of fludarabine, cyclophosphamide and rituximab (FCR) for previously
        untreated patients with CLL. This milestone marks the 11th FDA approval
        for IMBRUVICA since it was first approved in 2013 and the sixth in CLL.
        IMBRUVICA is jointly developed and commercialized with Janssen Biotech,
        Inc.
    --  AbbVie announced that the EC has approved VENCLYXTO (venetoclax) in
        combination with obinutuzumab for the treatment of adult patients with
        CLL who were previously untreated. VENCLYXTO plus obinutuzumab is the
        first chemotherapy-free, fixed-duration combination regimen approved by
        the EC for patients with previously untreated CLL. Approval is based on
        data from the Phase 3 CLL14 trial, which showed that patients treated
        with obinutuzumab plus one year of treatment with VENCLYXTO had superior
        PFS and higher rates of undetectable minimal residual disease compared
        to patients receiving a standard of care chemoimmunotherapy regimen of
        obinutuzumab and chlorambucil. 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 announced results from two Phase 3 studies (VIALE-A and VIALE-C)
        for VENCLEXTA (venetoclax) in patients with previously-untreated acute
        myeloid leukemia (AML) who are ineligible for intensive chemotherapy.
        The VIALE-A trial, which evaluated VENCLEXTA in combination with
        azacitidine versus azacitidine plus placebo, met its dual primary
        endpoints of overall survival (OS) and composite complete remission
        rate. The VIALE-A study was stopped early due to positive efficacy
        results at the first interim analysis for OS. The VIALE-C trial, which
        evaluated VENCLEXTA in combination with low-dose cytarabine (LDAC)
        versus LDAC plus placebo, did not demonstrate statistically significant
        improvement in the primary endpoint of OS, but results were indicative
        of clinical activity of VENCLEXTA in combination with LDAC. In November
        2018, AbbVie received accelerated approval in the U.S. for VENCLEXTA in
        combination with azacitidine, decitabine, or LDAC for the treatment of
        newly-diagnosed AML in adults who are age 75 years or older, or who have
        comorbidities that preclude use of intensive induction chemotherapy
        based on the Phase 1/2 studies. The results of VIALE-A and VIALE-C will
        be provided to the FDA and submitted for regulatory approval by other
        global health authorities later this year.
    --  AbbVie announced that the EC has approved a change to the marketing
        authorization for MAVIRET (glecaprevir/pibrentasvir) to shorten
        once-daily treatment duration from 12 to 8 weeks in treatment-naïve,
        compensated cirrhotic, chronic hepatitis C (HCV) patients with genotype
        (GT) 3 infection. The decision makes MAVIRET the only pan-genotypic (GTs
        1-6) 8-week treatment option for treatment-naïve, chronic HCV patients,
        without cirrhosis or with compensated cirrhosis. The approval is
        supported by data from the Phase 3b EXPEDITION-8 study, which showed
        that with 8 weeks of MAVIRET, an overall 98 percent patients achieved a
        sustained virologic response 12 weeks after treatment (SVR12), and for
        patients with GT3, the SVR12 rate was over 95 percent.

Full-Year 2020 Outlook

AbbVie is updating its standalone GAAP diluted EPS guidance for the full-year 2020 from $7.66 to $7.76 to $7.60 to $7.70, representing growth of 44.9 percent at the midpoint. AbbVie is confirming the previous expectation to deliver standalone adjusted diluted EPS for the full-year 2020 of $9.61 to $9.71, representing growth of 8.1 percent at the midpoint. The company's standalone 2020 adjusted diluted EPS guidance excludes $2.01 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 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 percent 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 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 2020 and 2019 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 2020 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, including the impact of the COVID-19 pandemic on AbbVie's operations, results and financial results, 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 2019 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.

Profit Forecasts

AbbVie is updating its GAAP diluted EPS guidance for the full-year 2020 from $7.66 to $7.76 to $7.60 to $7.70, representing growth of 44.9 percent at the midpoint.

AbbVie is confirming its adjusted diluted EPS guidance for the full-year 2020 of $9.61 to $9.71, representing growth of 8.1 percent at the midpoint.

AbbVie expects adjusted diluted EPS for the second quarter of 2020 of between $2.10 and $2.16, excluding approximately 53 cents of non-cash amortization and other specified items.

The guidance statements above regarding GAAP EPS and adjusted EPS for the full-year 2020 and adjusted EPS for the second quarter of 2020 each constitute a profit forecast for the purposes of the Rule 28 of the Irish Takeover Rules.

The company will issue 2020 combined company guidance following the close of the planned Allergan acquisition.

* Adjusted Earnings Per Share ("EPS") is a non-GAAP diluted earnings per share, typically reported in AbbVie's quarterly and annual financial results for the full year, guidance and in the earnings calls for the next quarter guidance updates. This is not prepared in accordance with U.S. GAAP. This non-GAAP financial measure should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP.

Adjusted EPS is calculated as net income excluding certain non-cash items and factors which are unusual or unpredictable, which include: amortization and impairment of intangible assets; change in fair value of contingent consideration; major restructuring costs, integration and other related transaction costs relating to acquisitions; litigation reserves; R&D milestones and acquired IPR&D, together with the tax effects of all these items.

Basis of preparation

The AbbVie profit forecasts (the "Profit Forecasts") are based on the unaudited interim financial results for the three months ended March 31, 2020 and a forecast of the results for the nine months to December 31, 2020.

In accordance with Rule 28 of the Irish Takeover Rules, the directors of AbbVie confirm that the Profit Forecasts have been properly compiled on the basis of the assumptions stated below on a basis consistent with the accounting policies of AbbVie, which are in accordance with U.S. GAAP and those which AbbVie anticipates will be applicable for the full year ending December 31, 2020 (as adjusted for AbbVie non-GAAP policy to disclose adjusted earnings excluding specified items).

The AbbVie non-GAAP profit forecast does not include the proposed acquisition of Allergan. However, the AbbVie GAAP profit forecast includes estimated one-time expenses relating to the transaction such as financing costs, legal, consultants, accountants, regulatory and other fees, which are expected to be incurred in 2020.

Principal assumptions

The Profit Forecasts have been compiled on the basis of the following assumptions:

Assumptions which are within AbbVie's influence or control:

    --  Executed licensing and partnership collaboration transaction impacts and
        transactions expected to be executed in the next quarter are included.
        In line with AbbVie's historical practices, management continues to
        evaluate and pursue opportunities for further partnership collaborations
        and in-licensing transactions. No material acquisitions or disposals are
        anticipated in 2020;
    --  There will be no material change in the operational strategy or current
        management of AbbVie during the year ending December 31, 2020 other than
        those already announced;
    --  There will be no major site closures or rationalization during the
        nine-month forecast period to December 31, 2020.
    --  Share repurchases and issuances are expected to be relatively flat
        during the nine-month forecast period to December 31, 2020.

Assumptions which are outside of AbbVie's influence or control:

    --  There will be no material supply chain, manufacturing and distribution
        disruptions and other business interruptions, including natural
        disasters or industrial disputes;
    --  There will be no material adverse events that affect AbbVie's key
        products, including adverse regulatory and clinical findings or
        publications, product recalls, liability claims, or loss of patent
        protection;
    --  There will be no material changes to current litigation provisions due
        to a new or ongoing litigation claim;
    --  There will be no material change in general market, economic,
        competitive environments or levels of demand in countries in which
        AbbVie operates that would materially affect AbbVie's business;
    --  There will be no material change to AbbVie customers' agreements,
        rebates, or discount programs from those currently prevailing;
    --  With respect to COVID-19 that: "stay at home" orders will be gradually
        lifted, starting in May, across Europe and the United States; over the
        subsequent 60 days, physicians' offices and hospitals will reopen for
        more routine patient diagnosis and care; and patients will start
        returning to physician offices for routine treatment in that timeframe.
        An increase to AbbVie's patient assistance programs, as well as a shifts
        in the U.S. payor mix due to increased unemployment has also been
        factored in.
    --  There will be no changes in exchange rates, interest rates, bases of
        taxes, tax laws or interpretations, or legislative or regulatory
        requirements from those currently prevailing that would have a material
        impact on AbbVie's operations or its accounting policies;
    --  There will be no material change to discount rate assumptions for
        calculating the fair value of contingent consideration from those
        currently prevailing; and
    --  There will be no intangible asset impairments due to unfavorable
        clinical study results or safety signals.


                                                                                       
       
              AbbVie Inc.

                                                                                     
       
           Key Product Revenues

                                                                                   
       
         Quarter Ended March 31, 2020

                                                                                       
       
              (Unaudited)




                                                                                                                                  
          
        % Change vs. 1Q19


                                          Net Revenues (in millions)                         International         
          
        Total


                                                     U.S.            Int'l.  Total                                                    U.S.                               Operational                 Reported               Operational                 Reported

                                                                                                                                                                                                                                                             ---


     
              ADJUSTED NET REVENUES
     a          $6,158             $2,461  $8,619                                                    16.8%                                    (2.0)%                   (3.8)%                     10.7%                    10.1%



     
              Immunology                         4,004              1,085   5,089                                                     24.5                                      (9.7)                   (11.8)                      15.1                      14.5



     Humira                                        3,656              1,047   4,703                                                     13.7                                     (12.8)                   (14.9)                       6.4                       5.8



     Skyrizi                                         266                 34     300                                         
      n/m                              
      n/m                    
       n/m                  
      n/m                     
      n/m



     Rinvoq                                           82                  4      86                                         
      n/m                              
      n/m                    
       n/m                  
      n/m                     
      n/m





     
              Hematologic Oncology               1,167                382   1,549                                                     25.0                                       61.1                      59.9                       32.3                      32.1



     Imbruvicab                                      966                266   1,232                                                     16.6                                       37.9                      37.9                       20.6                      20.6



     Venclexta                                       201                116     317                                                     91.5                    
      >100.0                
       >100.0                
      >100.0                  
      >100.0





     
              HCV                                  234                330     564                                                   (41.9)                                    (18.8)                   (20.0)                    (30.2)                   (30.8)



     Mavyret                                         234                325     559                                                   (42.0)                                    (14.7)                   (16.0)                    (28.6)                   (29.2)



     Viekira                                           -                 5       5                                         
      n/m                                              (80.6)                   (81.2)                    (80.3)                   (80.9)





     
              Other Key Products                   769                543   1,312                                                      3.9                                        0.2                     (1.8)                       2.4                       1.5



     Creon                                           276                       276                                                     21.9                     
      n/a                    
       n/a                                    21.9                      21.9



     Lupron                                          195                 38     233                                                      2.1                                        2.1                     (0.3)                       2.1                       1.7



     Synthroid                                       205                       205                                                     12.3                     
      n/a                    
       n/a                                    12.3                      12.3



     Synagis                                           -               270     270                                         
      n/a                                               (4.1)                    (5.6)                     (4.1)                    (5.6)



     Duodopa                                          25                 99     124                                                     10.2                                       14.9                      12.0                       14.0                      11.7



     Sevoflurane                                      16                 63      79                                                    (6.1)                                    (13.5)                   (15.8)                    (12.2)                   (14.0)



     Kaletra                                          14                 72      86                                                      3.2                                       13.1                      10.8                       11.4                       9.5



     Orilissa                                         30                  1      31                                        
      >100.0                           
      >100.0                
       >100.0                
      >100.0                  
      >100.0



     AndroGel                                          8                         8                                                   (89.1)                    
      n/a                    
       n/a                                  (89.1)                   (89.1)



      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 Ended March 31, 2020 and 2019

            
            
         (Unaudited) (In millions, except per share data)




                                                First Quarter
                                   Ended March 31


                             2020                           2019

                                                            ---

     Net
      revenues                      $
              8,619                       $
      7,828


     Cost
      of
      products
      sold                  1,942                                    1,694


      Selling,
      general
      and
      administrative        1,695                                    1,680


      Research
      and
      development           1,379                                    1,289


      Acquired
      in-
      process
      research
      and
      development               -                                     155


      Total
      operating
      costs
      and
      expenses              5,016                                    4,818





      Operating
      earnings              3,603                                    3,010




      Interest
      expense,
      net                     428                                      325


     Net
      foreign
      exchange
      loss                      5                                        6


      Other
      expense,
      net                      72                                      135



      Earnings
      before
      income
      tax
      expense               3,098                                    2,544


      Income
      tax
      expense                  88                                       88



     Net
      earnings                      $
              3,010                       $
      2,456





      Diluted
      earnings
      per
      share                          $
              2.02                        $
      1.65





      Adjusted
      diluted
      earnings
      per
      sharea                         $
              2.42                        $
      2.14





      Weighted-
      average
      diluted
      shares
      outstanding           1,484                                    1,483



                            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, 2020


                                                             
           
               (Unaudited) (In millions, except per share data)





      1.     Specified items impacted results as follows:




                                                                                         
              
                1Q20


                                                                               
              Earnings                                             Diluted


                                                                 Pre-tax                                              After-tax              
           EPS

                                                                                                                                                       ---


     
                As reported (GAAP)                                     $
              
                3,098                                                   $
     
     3,010         $
     
     2.02



     Adjusted for specified items:



     Intangible asset amortization                                  444                                                                 371                             0.24



     Acquisition related costs                                      188                                                                 158                             0.11



     Milestones and other R&D expenses                              135                                                                 115                             0.08



     Change in fair value of contingent consideration                72                                                                  72                             0.05



     Other                                                           66                                                               (113)                          (0.08)



     
                As adjusted (non-GAAP)                                 $
              
                4,003                                                   $
     
     3,613         $
     
     2.42



               Acquisition related costs reflect
                transaction and financing costs
                related to the proposed Allergan
                acquisition. Milestones and other
                R&D expenses include milestone
                payments for previously announced
                collaborations and the purchase of
                an FDA priority review voucher
                from a third party. Other
                primarily includes the impacts of
                tax law changes, charitable
                contributions to support COVID-19
                relief efforts and restructuring
                charges associated with
                streamlining global operations.




               2.     The impact of the specified
                items by line item was as follows:

                                                                                       
         
       1Q20


                                                             Cost of            
     SG&A         
      R&D                  Interest        Other
                                                       products                                                  expense,       expense,
                                                         sold                                                       net            net




     
                As reported (GAAP)                                $
     
     1,942                       $
     
     1,695                             $
     
       1,379      $
     
     428       $
     
     72



     Adjusted for specified items:



     Intangible asset amortization                            (444)



     Acquisition related costs                                                          (44)                                                     (144)



     Milestones and other R&D expenses                                                                                   (135)



     Change in fair value of contingent consideration                                                                                                    (72)



     Other                                                      (4)                     (52)                              (10)



     
                As adjusted (non-GAAP)                            $
     
     1,494                       $
     
     1,599                             $
     
       1,234      $
     
     284 
     
     $



               3.     The adjusted tax
                rate for the first
                quarter of 2020 was 9.7
                percent, as detailed
                below:

                                                            
     
          1Q20


                                                Pre-tax                     Income     Tax rate
                                          earnings                     taxes




     
                As reported (GAAP)                   $
     
       3,098                             $
      
      88      2.8


                                                                                                                %



     Specified items                               905                            302                     33.4

                                                                                                            %


                   As adjusted (non-GAAP)               $
     
       4,003                            $
      
      390      9.7


                                                                                                                %


                                                                          
              
                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                                                   IPR&D        expense,
                                                         sold                                                                     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


                                                                                                               %

View original content:http://www.prnewswire.com/news-releases/abbvie-reports-first-quarter-2020-financial-results-301050918.html

SOURCE AbbVie