Oct 30, 2020 SOURCE: PR NewsWire
AbbVie Reports Third-Quarter 2020 Financial Results
NORTH CHICAGO, Ill., Oct. 30, 2020 /PRNewswire/ -- AbbVie (NYSE: ABBV) announced financial results for the third quarter ended September 30, 2020.
"We continue to be very well positioned for the long-term. Results from key growth products - including Skyrizi, Rinvoq and Ubrelvy - continue to track ahead of our expectations, our aesthetics portfolio is demonstrating a strong V-shaped recovery, our hematologic-oncology franchise is delivering double-digit growth and we're advancing numerous attractive late-stage pipeline programs," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We are also executing effectively on Allergan integration initiatives with synergy and accretion targets tracking well."
Third-Quarter Results
-- Worldwide GAAP net revenues were $12.902 billion, an increase of 52.1
percent on a reported basis. Worldwide adjusted net revenues of $12.882
billion increased 4.1 percent on a comparable operational basis.
-- Global net revenues from the immunology portfolio were $5.790 billion,
an increase of 14.8 percent on a reported basis, or 15.0 percent on an
operational basis.
-- Global Humira net revenues of $5.140 billion increased 4.1 percent
on a reported basis, or 4.4 percent on an operational basis. U.S.
Humira net revenues were $4.189 billion, an increase of 7.7 percent.
Internationally, Humira net revenues were $951 million, a decrease
of 9.3 percent on a reported basis, or 8.0 percent on an operational
basis, due to biosimilar competition.
-- Global Skyrizi net revenues were $435 million.
-- Global Rinvoq net revenues were $215 million.
-- Global net revenues from the hematologic oncology portfolio were $1.722
billion, an increase of 16.5 percent on a reported basis, or 16.4
percent on an operational basis.
-- Global Imbruvica net revenues were $1.370 billion, an increase of
9.0 percent, with U.S. net revenues of $1.119 billion and
international profit sharing of $251 million.
-- Global Venclexta net revenues were $352 million, an increase of 59.0
percent on a reported basis, or 58.3 percent on an operational
basis.
-- Global net revenues from the aesthetics portfolio were $967 million, a
decrease of 3.1 percent on a comparable operational basis.
-- Global Botox Cosmetic net revenues were $393 million, a decrease of
2.2 percent on a comparable operational basis.
-- Global net revenues from the neuroscience portfolio were $1.249 billion,
an increase of over 100.0 percent on a reported basis, or 12.1 percent
on a comparable operational basis.
-- Global Botox Therapeutic net revenues were $523 million, a decrease
of 1.8 percent on a comparable operational basis.
-- Global Vraylar net revenues were $358 million, an increase of 48.4
percent on a comparable operational basis.
-- Global Ubrelvy net revenues were $38 million.
-- On a GAAP basis, the gross margin ratio in the third quarter was 60.9
percent. The adjusted gross margin ratio was 81.7 percent.
-- On a GAAP basis, selling, general and administrative expense was 22.1
percent of net revenues. The adjusted SG&A expense was 21.1 percent of
net revenues.
-- On a GAAP basis, research and development expense was 13.2 percent of
net revenues. The adjusted R&D expense was 11.7 percent of net revenues,
reflecting funding actions supporting all stages of our pipeline.
-- On a GAAP basis, the operating margin in the third quarter was 25.2
percent. The adjusted operating margin was 48.8 percent.
-- On a GAAP basis, net interest expense was $620 million.
-- On a GAAP basis, the tax rate in the quarter was 7.5 percent. The
adjusted tax rate was 11.7 percent.
-- Diluted EPS in the third quarter was $1.29 on a GAAP basis. Adjusted
diluted EPS, excluding specified items, was $2.83.
Note: "Comparable Operational" comparisons include full-quarter current year and prior year results for Allergan, which was acquired on May 8, 2020, as if the acquisition closed on January 1, 2019, and are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates. Refer to the Key Product Revenues schedules for further details. "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 that it has submitted an application for a new
indication to the U.S. Food and Drug Administration (FDA) for Rinvoq
(upadacitinib), a selective and reversible JAK inhibitor, for the
treatment of adult patients with active ankylosing spondylitis (AS).
AbbVie also submitted an application to the European Medicines Agency
(EMA) for Rinvoq for the treatment of adult patients with active AS who
have responded inadequately to conventional therapy. The applications
are supported by data from SELECT-AXIS 1, a Phase 2/3 study in which
Rinvoq demonstrated significant improvements in signs and symptoms in
patients with active AS. In the study, twice as many patients receiving
Rinvoq (52 percent) met the primary endpoint of Assessment of
SpondyloArthritis International Society (ASAS) 40 response versus
placebo (26 percent) at week 14. The safety profile of Rinvoq in AS was
consistent with previously reported studies across therapeutic areas,
including rheumatoid arthritis (RA), atopic dermatitis (AD) and
psoriatic arthritis (PsA), with no new significant safety risks
detected.
-- AbbVie announced that it submitted applications to the FDA and EMA
seeking approval for Rinvoq for the treatment of adults (15 mg and 30
mg, once daily) and adolescents (15 mg, once daily) with moderate to
severe AD. The applications are supported by data from three pivotal
Phase 3 studies. In all three studies, Rinvoq met the co-primary and all
secondary endpoints, demonstrating significant improvement in skin
clearance and reduction in itch in adults and adolescents with moderate
to severe AD compared to placebo. No new safety risks of Rinvoq were
observed in these studies compared to the safety profile observed in
patients with RA, PsA or AS receiving Rinvoq.
-- AbbVie announced the FDA full approval of Venclexta (venetoclax) in
combination with azacitidine, or decitabine, or low-dose cytarabine
(LDAC) for the treatment of newly-diagnosed acute myeloid leukemia (AML)
in adults who are age 75 years or older, or who have comorbidities that
preclude the use of intensive induction chemotherapy. The FDA had
previously granted accelerated approval to Venclexta for this indication
in 2018. The approval is supported by data from a series of trials
including two Phase 3 trials - VIALE-A and VIALE-C. The VIALE-A trial
showed that significantly more patients treated with Venclexta in
combination with azacitidine achieved complete remission and lived
longer versus patients treated with azacitidine alone. Additionally, The
National Comprehensive Cancer Network (NCCN) guidelines recommend the
Venclexta and azacitidine combination as a Category 1 Preferred AML
treatment regimen for patients ineligible for intensive chemotherapy.
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 and I-Mab signed a broad, global collaboration agreement for the
development and commercialization of lemzoparlimab, an innovative
anti-CD47 monoclonal antibody internally discovered and developed by
I-Mab for the treatment of multiple cancers. The collaboration provides
AbbVie with an exclusive global license, excluding greater China, to
develop and commercialize lemzoparlimab and both companies will have the
potential to expand the collaboration to additional transformative
therapies. Under the terms of the agreement, AbbVie will pay I-Mab $180
million in an upfront payment to exclusively license lemzoparlimab,
along with $20 million in a milestone payment based on Phase 1
lemzoparlimab trial results. I-Mab will be eligible to receive up to an
additional $1.74 billion in success-based milestone payments.
-- At the 2020 Virtual Migraine Trust International Symposium (MTIS) AbbVie
presented 15 abstracts evaluating the safety, efficacy, and impact on
patients and the healthcare system of AbbVie's migraine treatment and
prevention portfolio. Presentations included new data from the Phase 3
ADVANCE trial evaluating investigational medicine atogepant for the
preventive treatment of migraine; real-world evidence assessing safety,
tolerability, and potential benefits of treatment with Botox
(onabotulinumtoxinA) in combination with calcitonin gene-related peptide
(CGRP) monoclonal antibodies (mAbs) for chronic migraine prevention; and
Phase 3 data measuring the efficacy and safety of Ubrelvy (ubrogepant)
for the acute treatment of migraine with mild pain.
-- At the 2020 International Congress of Parkinson's Disease and Movement
Disorders AbbVie presented 18 abstracts that highlighted new and updated
data evaluating AbbVie's neuroscience portfolio and pipeline.
Presentations included final data from the Phase 3 12-week DYSCOVER
study, the first randomized trial of Duodopa (levodopa/carbidopa
intestinal gel) (LCIG) on the duration and severity of dyskinesia in
patients with advanced Parkinson's disease (PD). Overall, the results of
this pivotal study demonstrated clinically meaningful benefit with LCIG
treatment in reducing dyskinesia compared to optimized medical treatment
in patients with advanced PD.
-- AbbVie announced that the FDA granted Orphan Drug and Fast Track
designations for elezanumab (ABT-555), an investigational treatment for
patients following spinal cord injury. Elezanumab is currently in phase
2 studies for the treatment of spinal cord injuries, multiple sclerosis
and acute ischemic stroke.
-- Allergan Aesthetics presented 4 abstracts at the annual American Society
for Dermatologic Surgery (ASDS) virtual meeting. Presentations included
data on patient satisfaction following chin augmentation with hyaluronic
acid fillers as well as patient satisfaction and the efficacy of
treatment of upper facial lines with Botox.
-- Allergan Aesthetics entered into an agreement with Luminera, a privately
held aesthetics company based in Israel, to acquire Luminera's full
dermal filler portfolio and R&D pipeline further enhancing Allergan
Aesthetics' leading dermal filler portfolio. Luminera's key value driver
for the future is HArmonyCa, an innovative dermal filler intended for
facial soft tissue augmentation comprised of a combination of
cross-linked hyaluronic acid (HA) with embedded calcium hydroxyapatite
(CaHA) microspheres that is highly differentiated in the dermal filler
category. HArmonyCa is currently commercially available in Israel and
Brazil and Allergan Aesthetics will continue to develop this product for
its International and U.S. markets.
-- Allergan Aesthetics and Skinbetter Science announced the launch of a new
long-term, educational initiative - DREAM: Driving Racial Equity in
Aesthetic Medicine. The DREAM Initiative is committed to furthering the
principles of racial and ethnic diversity, inclusion, respect and
understanding in the fields of dermatology and plastic surgery.
-- AbbVie announced positive top-line results from the Phase 3 GEMINI 1 and
GEMINI 2 trials evaluating AGN-190584, an ophthalmic solution of
pilocarpine 1.25%, for the treatment of symptoms associated with
presbyopia. In both studies, AGN-190584 met the primary endpoint,
demonstrating a statistically significant improvement in near vision.
The majority of secondary endpoints were also met in both Phase 3
studies. Additional details from the GEMINI 1 and GEMINI 2 studies will
be presented at future medical meetings and will serve as the basis for
a New Drug Application (NDA) submission to the FDA in the first half of
2021.
-- AbbVie and Harvard University announced a collaborative research
alliance, launching a multi-pronged effort at Harvard Medical School to
study and develop novel therapies against emergent viral infections,
with a focus on those caused by coronaviruses and by viruses that lead
to hemorrhagic fever. AbbVie will provide $30 million over three years
and additional in-kind support leveraging AbbVie's scientists, expertise
and facilities to advance collaborative research and early-stage
development efforts across five program areas that address a variety of
therapeutic modalities including immunity and immunopathology, host
targeting for antiviral therapies, antibody therapeutics, small
molecules and translational development.
Full-Year 2020 Outlook
AbbVie is updating its GAAP diluted EPS guidance for the full-year 2020 from $4.12 to $4.22 to $3.89 to $3.91, which includes the results of Allergan from May 8, 2020 through December 31, 2020.
AbbVie is updating its adjusted diluted EPS for the full-year 2020 from $10.35 to $10.45 to $10.47 to $10.49, which includes the results of Allergan from May 8, 2020 through December 31, 2020, representing annualized net accretion from the Allergan transaction of 12 percent. The combined company's 2020 adjusted diluted EPS guidance excludes $6.58 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
Company Declares Dividend Increase of 10.2 Percent
AbbVie is announcing today that its board of directors declared an increase in the company's quarterly cash dividend from $1.18 per share to $1.30 per share beginning with the dividend payable on February 16, 2021 to shareholders of record as of January 15, 2021. This reflects an increase of approximately 10.2 percent, continuing AbbVie's strong commitment to returning cash to shareholders through a growing dividend. Since the company's inception in 2013, AbbVie has increased its quarterly dividend by 225 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About AbbVie
AbbVie's mission is to discover and deliver innovative medicines that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on people's lives across several key therapeutic areas: immunology, oncology, neuroscience, eye care, virology, women's health and gastroenterology, in addition to products and services across its Allergan Aesthetics portfolio. 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 third-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, failure to realize the expected benefits of the Allergan acquisition, failure to promptly and effectively integrate Allergan's businesses, significant transaction costs and/or unknown or inestimable liabilities, potential litigation associated with the Allergan 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.
AbbVie Inc.
Key Product Revenues
Quarter Ended September 30, 2020
(Unaudited)
% Change vs. 3Q19
Net Revenues (in millions)
Reported Comparable Operational a, b
---
U.S. Int'l. Total U.S. Int'l. Total U.S. Int'l Total
---
ADJUSTED NET REVENUESc $9,889 $2,993 $12,882 58.4% 33.9% 51.9% 6.0% (1.6)% 4.1%
Immunology 4,759 1,031 5,790 19.6 (3.0) 14.8 19.6 (1.9) 15.0
Humira 4,189 951 5,140 7.7 (9.3) 4.1 7.7 (8.0) 4.4
Skyrizi 379 56 435
>100.0
>100.0
>100.0
>100.0
>100.0
>100.0
Rinvoq 191 24 215
>100.0
>100.0
>100.0
>100.0
>100.0
>100.0
Hematologic Oncology 1,323 399 1,722 11.7 36.1 16.5 11.7 35.6 16.4
Imbruvicad 1,119 251 1,370 7.4 17.0 9.0 7.4 17.0 9.0
Venclexta 204 148 352 42.8 88.6 59.0 42.8 86.7 58.3
Aesthetics 617 350 967 n/m n/m n/m (4.4) (0.7) (3.1)
Botox Cosmetic* 237 156 393
n/m
n/m
n/m (0.1) (5.4) (2.2)
Juvederm Collection* 115 159 274
n/m
n/m
n/m (14.0) 12.2 (0.5)
Other Aesthetics* 265 35 300
n/m
n/m
n/m (3.4) (22.9) (6.2)
Neuroscience 1,053 196 1,249 >100.0 >100.0 >100.0 14.0 2.1 12.1
Botox Therapeutic* 429 94 523
n/m
n/m
n/m (2.0) (1.0) (1.8)
Vraylar* 358 358
n/m
n/a
n/m 48.4
n/a 48.4
Duodopa 25 98 123 (2.5) 6.7 4.7 (2.5) 3.2 2.0
Ubrelvy* 38 38
n/m
n/a
n/m
n/m
n/a
n/m
Other Neuroscience* 203 4 207
n/m
n/m
n/m (7.3) 66.0 (6.3)
Eye Care 549 291 840 n/m n/m n/m (4.8) (4.7) (4.8)
Lumigan/Ganfort* 62 87 149
n/m
n/m
n/m (8.3) (3.3) (5.4)
Alphagan/Combigan* 84 39 123
n/m
n/m
n/m (10.7) 2.2 (6.8)
Restasis* 284 15 299
n/m
n/m
n/m (5.4) 68.0 (3.2)
Other Eye Care* 119 150 269
n/m
n/m
n/m 3.8 (11.0) (5.1)
Women's Health 227 12 239 >100.0 >100.0 >100.0 (19.0) 12.8 (17.8)
Lo Loestrin* 129 5 134
n/m
n/m
n/m (22.5) 48.5 (21.1)
Orilissa/Oriahnn 24 1 25 (5.1) 78.7 (3.2) (5.1) 80.3 (3.2)
Other Women's Health* 74 6 80
n/m
n/m
n/m (16.5) (10.4) (16.0)
Other Key Products 995 271 1,266 (2.3) (26.5) (8.7) (19.7) (28.3) (21.7)
Mavyret 185 229 414 (50.0) (29.9) (40.6) (50.0) (31.0) (41.1)
Creon 282 282 5.9
n/a 5.9 5.9
n/a 5.9
Lupron 99 34 133 (47.6) (18.0) (42.1) (47.6) (13.9) (41.3)
Linzess/Constella* 240 8 248
n/m
n/m
n/m 9.6 13.7 9.7
Synthroid 189 189 (3.6)
n/a (3.6) (3.6)
n/a (3.6)
a "Comparable Operational"
comparisons include full-quarter
current year and prior year
results for Allergan products, as
if the acquisition closed on
January 1, 2019, and are presented
at constant currency rates that
reflect comparative local currency
net revenues at the prior year's
foreign exchange rates.
b All historically reported Allergan
revenues have been recast to
conform to AbbVie's revenue
recognition accounting policies
and reporting conventions for
certain rebates and discounts.
Historically reported Allergan
revenues also exclude Zenpep and
Viokace product revenues, which
were both divested as part of the
acquisition, as well as specified
items.
c 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.
d Reflects profit sharing for
Imbruvica international revenues.
* Represents product(s) acquired as
part of the Allergan acquisition.
n/a = not applicable
n/m = not meaningful
AbbVie Inc.
Key Product Revenues
Nine Months Ended September 30, 2020
(Unaudited)
% Change vs. 9M19
Net Revenues (in millions)a
Reported Comparable Operational b, c
---
U.S. Int'l. Total U.S. Int'l. Total U.S. Int'l. Total
---
ADJUSTED NET REVENUESd $24,194 $7,732 $31,926 38.4% 9.1% 30.0% 5.8% (8.7)% 2.0%
Immunology 13,162 3,033 16,195 19.3 (10.2) 12.4 19.3 (8.3) 12.9
Humira 11,819 2,861 14,680 8.5 (14.8) 3.0 8.5 (12.8) 3.5
Skyrizi 934 131 1,065
>100.0
>100.0
>100.0
>100.0
>100.0
>100.0
Rinvoq 409 41 450
>100.0
>100.0
>100.0
>100.0
>100.0
>100.0
Hematologic Oncology 3,736 1,126 4,862 19.7 41.2 24.1 19.7 41.9 24.2
Imbruvicae 3,140 750 3,890 13.9 20.9 15.2 13.9 20.9 15.2
Venclexta 596 376 972 63.4
>100.0 79.5 63.4
>100.0 80.5
Aesthetics 947 501 1,448 n/m n/m n/m (21.7) (25.4) (23.0)
Botox Cosmetic* 384 235 619
n/m
n/m
n/m (16.3) (25.2) (19.9)
Juvederm Collection* 171 216 387
n/m
n/m
n/m (33.0) (26.4) (29.5)
Other Aesthetics* 392 50 442
n/m
n/m
n/m (20.6) (22.4) (20.8)
Neuroscience 1,674 433 2,107 >100.0 59.5 >100.0 12.3 (2.9) 9.6
Botox Therapeutic* 683 137 820
n/m
n/m
n/m (7.5) (13.7) (8.6)
Vraylar* 550 550
n/m
n/a
n/m 67.1
n/a 67.1
Duodopa 75 290 365 5.0 6.7 6.4 5.0 7.2 6.8
Ubrelvy* 60 60
n/m
n/a
n/m
n/m
n/a
n/m
Other Neuroscience* 306 6 312
n/m
n/m
n/m (9.2) 41.2 (8.6)
Eye Care 823 434 1,257 n/m n/m n/m (1.6) (10.3) (4.7)
Lumigan/Ganfort* 97 128 225
n/m
n/m
n/m (1.5) (6.4) (4.2)
Alphagan/Combigan* 131 61 192
n/m
n/m
n/m (8.6) (1.5) (6.5)
Restasis* 422 21 443
n/m
n/m
n/m (1.3) 18.0 (0.7)
Other Eye Care* 173 224 397
n/m
n/m
n/m 3.9 (16.1) (8.4)
Women's Health 399 18 417 >100.0 >100.0 >100.0 (13.4) (3.7) (13.1)
Lo Loestrin* 207 7 214
n/m
n/m
n/m (14.9) 15.4 (14.3)
Orilissa/Oriahnn 84 3 87 46.6
>100.0 48.3 46.6
>100.0 48.3
Other Women's Health* 108 8 116
n/m
n/m
n/m (23.7) (21.9) (23.5)
Other Key Products 2,783 905 3,688 (8.6) (25.8) (13.5) (16.0) (25.4) (18.3)
Mavyret 565 784 1,349 (51.6) (28.6) (40.5) (51.6) (28.3) (40.3)
Creon 810 810 8.1
n/a 8.1 8.1
n/a 8.1
Lupron 461 110 571 (15.6) (9.3) (14.5) (15.6) (5.2) (13.8)
Linzess/Constella* 370 11 381
n/m
n/m
n/m 7.9 20.8 8.2
Synthroid 577 577 (0.8)
n/a (0.8) (0.8)
n/a (0.8)
a Net revenues include Allergan
product revenues from the date of
the acquisition, May 8, 2020,
through September 30, 2020.
b "Comparable Operational"
comparisons include full-period
current year and prior year
results for Allergan products, as
if the acquisition closed on
January 1, 2019, and are presented
at constant currency rates that
reflect comparative local currency
net revenues at the prior year's
foreign exchange rates.
c All historically reported Allergan
revenues have been recast to
conform to AbbVie's revenue
recognition accounting policies
and reporting conventions for
certain rebates and discounts.
Historically reported Allergan
revenues also exclude Zenpep and
Viokace product revenues, which
were both divested as part of the
acquisition, as well as specified
items.
d 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.
e Reflects profit sharing for
Imbruvica international revenues.
* Represents product(s) acquired as
part of the Allergan acquisition.
n/a = not applicable
n/m = not meaningful
AbbVie Inc.
Consolidated Statements of Earnings
Quarter and Nine Months Ended September 30, 2020 and 2019
(Unaudited) (In millions, except per share data)
Third Quarter Nine Months
Ended September 30
Ended September 30
---
2020 2019 2020 2019
---
Net revenues $
12,902 $
8,479 $
31,946 $
24,562
Cost of products sold 5,050 1,920 10,703 5,433
Selling, general and administrative 2,846 1,657 8,068 4,991
Research and development 1,706 2,285 4,667 4,865
Acquired in-process research and development 45 898 246
Total operating costs and expenses 9,647 5,862 24,336 15,535
Operating earnings 3,255 2,617 7,610 9,027
Interest expense, net 620 420 1,662 1,054
Net foreign exchange loss 20 19 54 31
Other expense, net 115 177 989 2,590
Earnings before income tax expense 2,500 2,001 4,905 5,352
Income tax expense 187 117 321 271
Net earnings 2,313 1,884 4,584 5,081
Net earnings attributable to noncontrolling interest 5 4
Net earnings attributable to AbbVie Inc. $
2,308 $
1,884 $
4,580 $
5,081
Diluted earnings per share attributable to AbbVie Inc. $
1.29 $
1.26 $
2.77 $
3.41
Adjusted diluted earnings per sharea $
2.83 $
2.33 $
7.62 $
6.73
Weighted-average diluted shares outstanding 1,774 1,483 1,637 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 September 30, 2020
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
3Q20
Earnings Diluted
Pre-tax After-taxa
EPS
---
As reported (GAAP) $
2,500 $
2,308 $
1.29
Adjusted for specified items:
Intangible asset amortization 2,117 1,800 1.02
Acquisition and integration costs 792 682 0.38
Milestones and other R&D expenses 40 38 0.02
Acquired IPR&D 45 45 0.02
Change in fair value of contingent consideration 197 197 0.11
Other 30 (22) (0.01)
As adjusted (non-GAAP) $
5,721 $
5,048 $
2.83
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect amortization of the acquisition date fair value step-up for inventory as well as compensation expense and other integration costs related to the Allergan acquisition. Milestones and other R&D expenses include milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing
arrangements with third parties. Other primarily includes tax settlements and COVID-19 related expenses.
2. The impact of the specified items by line item was as follows:
3Q20
Net Cost of
SG&A
R&D Acquired Net Other
revenues products IPR&D foreign expense,
sold exchange net
loss
---
As reported (GAAP) $
12,902 $
5,050 $
2,846 $
1,706 $
45 $
20 $
115
Adjusted for specified items:
Intangible asset amortization - (2,117)
Acquisition and integration costs - (551) (104) (137)
Milestones and other R&D expenses - (40)
Acquired IPR&D - (45)
Change in fair value of contingent consideration - (197)
Other (20) (20) (19) (16) 5
As adjusted (non-GAAP) $
12,882 $
2,362 $
2,723 $
1,513
$ $
25 $
(82)
3. The adjusted tax rate for the third quarter of 2020 was 11.7 percent, as detailed below:
3Q20
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
2,500 $
187 7.5
%
Specified items 3,221 481 14.9
%
---
11.7
As adjusted (non-GAAP) $
5,721 $
668 %
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended September 30, 2019
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
3Q19
Earnings Diluted
Pre-tax After-taxa EPS
---
As reported (GAAP) $
2,001 $
1,884 $
1.26
Adjusted for specified items:
Intangible asset
amortization 389 323 0.22
Milestones and other
R&D expenses 20 20 0.01
Change in fair value
of contingent
consideration 271 271 0.19
Restructuring 17 14
Litigation reserves 7 5
Stemcentrx-related
impairment 939 823 0.56
Acquisition related
costs 158 128 0.09
As adjusted (non-
GAAP) $
3,802 $
3,468 $
2.33
a Represents net earnings attributable to AbbVie Inc.
Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Restructuring is primarily associated with streamlining global operations. Stemcentrx-related impairment refers to the net impact of the intangible asset impairment and the related fair value
adjustment to contingent consideration liabilities. Acquisition related costs reflect transaction and financing costs related to the Allergan acquisition.
2. The impact of the specified items by line item was as follows:
3Q19
Cost of
SG&A
R&D Interest Other expense,
products sold expense, net net
---
As reported (GAAP) $
1,920 $
1,657 $
2,285 $
420 $
177
Adjusted for specified items:
Intangible asset amortization (389)
Milestones and other R&D expenses - (20)
Change in fair value of contingent consideration - (271)
Restructuring (6) (3) (8)
Litigation reserves - (7)
Stemcentrx-related impairment - (1,030) 91
Acquisition related costs - (26) (132)
As adjusted (non-GAAP) $
1,525 $
1,621 $
1,227 $
288 $
(3)
3. The adjusted tax rate for the third quarter of 2019 was 8.8 percent, as detailed below:
3Q19
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
2,001 $
117 5.9
%
Specified items 1,801 217 12.1
%
---
As adjusted (non-GAAP) $
3,802 $
334 8.8
%
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Nine Months Ended September 30, 2020
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
9M20
Earnings Diluted
Pre-tax After-taxa
EPS
---
As reported (GAAP) $
4,905 $
4,580 $
2.77
Adjusted for specified items:
Intangible asset
amortization 3,967 3,361 2.05
Acquisition and
integration costs 2,899 2,624 1.60
Milestones and other
R&D expenses 225 202 0.12
Acquired IPR&D 898 898 0.54
Change in fair value
of contingent
consideration 1,078 1,078 0.65
Other 147 (187) (0.11)
As adjusted (non-
GAAP) $
14,119 $
12,556 $
7.62
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect transaction and financing costs, compensation expense and other integration costs as well as amortization of the acquisition date fair value step-up for inventory related to the 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, tax settlements and COVID-19 related charitable contributions and expenses.
2. The impact of the specified items by line item was as follows:
9M20
Net revenues Cost of products
SG&A
R&D Acquired IPR&D Interest Net foreign Other expense,
sold expense, net exchange net
loss
---
As reported (GAAP) $
31,946 $
10,703 $
8,068 $
4,667 $
898 $
1,662 $
54 $
989
Adjusted for specified items:
Intangible asset amortization - (3,967)
Acquisition and integration costs - (1,020) (1,290) (315) (274)
Milestones and other R&D expenses - (225)
Acquired IPR&D - (898)
Change in fair value of contingent consideration - (1,078)
Other (20) (64) (64) (48) 9
As adjusted (non-GAAP) $
31,926 $
5,652 $
6,714 $
4,079
$ $
1,388 $
63 $
(89)
3. The adjusted tax rate for the first nine months of 2020 was 11.0 percent, as detailed below:
9M20
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
4,905 $
321 6.5
%
Specified items 9,214 1,238 13.4
%
---
11.0
As adjusted (non-GAAP) $
14,119 $
1,559 %
===
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Nine Months Ended September 30, 2019
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
9M19
Earnings Diluted
Pre-tax After-taxa
EPS
---
As reported (GAAP) $
5,352 $
5,081 $
3.41
Adjusted for specified items:
Intangible asset
amortization 1,162 962 0.65
Milestones and other
R&D expenses 95 95 0.06
Acquired IPR&D 246 241 0.16
Change in fair value
of contingent
consideration 2,744 2,746 1.85
Restructuring 188 153 0.10
Litigation reserves 27 21 0.01
Stemcentrx-related
impairment 939 823 0.56
Acquisition related
costs 189 155 0.10
Tax audit settlement - (267) (0.18)
Other 20 20 0.01
As adjusted (non-
GAAP) $
10,962 $
10,030 $
6.73
a Represents net earnings attributable to AbbVie Inc.
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. Stemcentrx-related impairment refers to the net
impact of the intangible asset impairment and the related fair value adjustment to contingent consideration liabilities. Acquisition related costs reflect transaction and financing costs related to the Allergan acquisition.
2. The impact of the specified items by line item was as follows:
9M19
Cost of
SG&A
R&D Acquired IPR&D Interest Other expense,
products sold expense, net net
---
As reported (GAAP) $
5,433 $
4,991 $
4,865 $
246 $
1,054 $
2,590
Adjusted for specified items:
Intangible asset amortization (1,162)
Milestones and other R&D expenses - (95)
Acquired IPR&D - (246)
Change in fair value of contingent consideration - (2,744)
Restructuring (15) (110) (63)
Litigation reserves - (27)
Stemcentrx-related impairment - (1,030) 91
Acquisition related costs - (50) (139)
Other (1) (19)
As adjusted (non-GAAP) $
4,255 $
4,804 $
3,658
$ $
915 $
(63)
3. The adjusted tax rate for the first nine months of 2019 was 8.5 percent, as detailed below:
9M19
Pre-tax Income Tax rate
earnings taxes
---
As reported (GAAP) $
5,352 $
271 5.1
%
Specified items 5,610 661 11.8
%
---
As adjusted (non-GAAP) $
10,962 $
932 8.5
%
===
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SOURCE AbbVie
