ABBV
Abbvie INC
NYSE
10-Q: AbbVie Reports Q1 2024 Results, Completes ImmunoGen Acquisition
Sentiment:
Quarterly Report
3 May 2024 11:04 AM
AbbVie's first quarter 2024 results show a slight revenue increase and significant earnings growth, driven by key product performance and strategic acquisitions.
Better than expected
The diluted earnings per share significantly increased to $0.77 from $0.13 year-over-year, indicating better than expected profitability.
Net earnings attributable to AbbVie Inc. were $1.369 billion, a substantial increase from $239 million in the first quarter of 2023, showing better than expected results.
Delay expected
The company made a decision to revise the research and development plan for AGN-151607, a novel investigational neurotoxin, which contributed to a delay in the estimated timing of regulatory approval.
Capital raise
AbbVie issued $15 billion in senior notes to finance the acquisition of ImmunoGen and the proposed acquisition of Cerevel Therapeutics.
The company borrowed and repaid $5.0 billion under a term loan credit agreement in February 2024.
Summary
- AbbVie's net revenues for the first quarter of 2024 were $12.31 billion, a 0.7% increase compared to $12.225 billion in the same period of 2023.
- Operating earnings reached $2.798 billion, up from $2.768 billion year-over-year.
- Net earnings attributable to AbbVie Inc. were $1.369 billion, a substantial increase from $239 million in the first quarter of 2023.
- Diluted earnings per share were $0.77, compared to $0.13 in the prior year.
- The company completed the acquisition of ImmunoGen, Inc. on February 12, 2024, for $9.8 billion, adding Elahere to its oncology portfolio.
- Pro forma combined results, assuming the ImmunoGen acquisition occurred on January 1, 2023, show net revenues of $12.365 billion for Q1 2024 and a net loss of $413 million for Q1 2023.
- AbbVie issued $15 billion in senior notes to finance the ImmunoGen acquisition and the proposed acquisition of Cerevel Therapeutics.
- The company repurchased 5 million shares for $959 million during the quarter.
- Cash flow from operations was $4.04 billion, a slight decrease from $4.193 billion in the same period last year.
Sentiment
Score: 7
Explanation: The document presents a generally positive outlook with strong earnings growth and strategic acquisitions, but also acknowledges challenges such as Humira's decline and integration risks. The sentiment is cautiously optimistic.
Positives
- Net earnings attributable to AbbVie Inc. significantly increased to $1.369 billion.
- Skyrizi and Rinvoq demonstrated strong sales growth, indicating successful market penetration.
- The ImmunoGen acquisition expands AbbVie's oncology pipeline with a promising ADC therapy.
- Venclexta sales showed a strong increase, reflecting continued market share gains.
- The company successfully raised $15 billion through senior notes to fund strategic acquisitions.
- The company continues to invest in its pipeline with approximately 90 compounds, devices or indications in development.
Negatives
- Humira sales experienced a substantial decline of 35% globally due to biosimilar competition.
- Botox Cosmetic and Juvederm Collection sales decreased due to inventory destocking and reduced consumer demand.
- Operating cash flows decreased slightly due to acquisition-related expenses and increased R&D funding.
- Selling, general and administrative expenses increased due to acquisition and integration costs.
- Research and development expenses decreased due to an intangible asset impairment charge in the prior year, but increased funding to support the pipeline.
Risks
- Continued biosimilar competition for Humira poses a significant risk to revenue.
- The integration of ImmunoGen and the proposed acquisition of Cerevel Therapeutics may present challenges.
- Changes in fair value of contingent consideration liabilities can significantly impact earnings.
- Ongoing legal proceedings and government investigations could result in financial liabilities.
- The company is subject to market risks, including foreign exchange rate fluctuations and interest rate changes.
Future Outlook
AbbVie anticipates several regulatory submissions and data readouts from key clinical trials in the next 12 months and expects multiple mid-stage programs to transition into late-stage programs.
Management Comments
- AbbVie's mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medical challenges of tomorrow while achieving top-tier financial performance through outstanding execution.
- AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches; (iii) continuing to invest in and expand its pipeline in support of opportunities in immunology, oncology, aesthetics, neuroscience and eye care as well as continued investment in key on-market products; (iv) generating substantial operating cash flows to support investment in innovative research and development, and return cash to shareholders via a strong and growing dividend while also continuing to repay debt.
Industry Context
The results reflect the ongoing shift in the pharmaceutical industry towards biologics and targeted therapies, with AbbVie strategically expanding its oncology portfolio through acquisitions. The decline in Humira sales highlights the impact of biosimilar competition, a trend affecting many established blockbuster drugs.
Comparison to Industry Standards
- AbbVie's performance in Q1 2024 shows a mixed picture compared to industry standards. While the company's revenue growth is modest, the significant increase in earnings per share is notable.
- The 35% decline in Humira sales is consistent with the expected impact of biosimilar competition, which is a common challenge for companies with blockbuster drugs losing exclusivity, such as Amgen with Enbrel and Sanofi with Lantus.
- The strong growth of Skyrizi and Rinvoq is comparable to the success of other companies' new immunology drugs, such as Eli Lilly's Taltz and Novartis' Cosentyx.
- The acquisition of ImmunoGen is a strategic move similar to other large pharmaceutical companies acquiring smaller biotech firms to bolster their pipelines, such as Pfizer's acquisition of Seagen.
- AbbVie's investment in R&D, while slightly down compared to the prior year, remains a significant portion of its revenue, which is consistent with industry standards for large pharmaceutical companies.
Stakeholder Impact
- Shareholders will benefit from the increased earnings per share and strategic acquisitions.
- Employees may experience changes due to the integration of ImmunoGen and the proposed acquisition of Cerevel Therapeutics.
- Customers will have access to new therapies through the expanded product portfolio.
- Suppliers may see changes in demand due to the company's strategic shifts.
- Creditors will be impacted by the issuance of $15 billion in senior notes.
Next Steps
- AbbVie expects multiple mid-stage programs to transition into late-stage programs in the next 12 months.
- The company anticipates several regulatory submissions and data readouts from key clinical trials in the next 12 months.
- AbbVie will continue to integrate ImmunoGen and work towards the proposed acquisition of Cerevel Therapeutics.
Legal Proceedings
- Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan violated federal and state antitrust laws.
- Lawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescription opioid products.
- A federal securities lawsuit, Holwill v. AbbVie Inc., et al., was filed against AbbVie, its chief executive officer and former chief financial officer, alleging that reasons stated for Humira sales growth in financial filings between 2013 and 2018 were misleading.
- Lawsuits were filed against Allergan and certain of its former officers alleging they made misrepresentations and omissions regarding Allergan's textured breast implants.
- Two shareholder derivative lawsuits, Treppel Family Trust v. Gonzalez et al., and Katcher v. Gonzalez, et al., were filed alleging that certain AbbVie directors and officers breached fiduciary and other legal duties.
- A putative class action lawsuit, Camargo v. AbbVie Inc., was filed on behalf of Humira patients alleging that Humiras list price is excessive.
- A qui tam lawsuit, U.S. ex rel. Silbersher v. Allergan Inc., et al., was filed against several Allergan entities and others, alleging that their conduct before the U.S. Patent Office resulted in false claims for payment being made to federal and state healthcare payors.
- AbbVie Inc. is seeking to enforce patent rights relating to venetoclax, upadacitinib, and ubrogepant.
Key Dates
- December 6, 2023: AbbVie announced the proposed acquisition of Cerevel Therapeutics Holdings, Inc.
- February 12, 2024: AbbVie completed the acquisition of ImmunoGen, Inc.
- February 20, 2024: AbbVie announced Robert A. Michael will succeed Richard A. Gonzalez as CEO, effective July 1, 2024.
- April 25, 2024: AbbVie Inc. had 1,765,867,781 shares of common stock outstanding.
- July 1, 2024: Robert A. Michael will become CEO and Richard A. Gonzalez will become executive chairman of the board.
Keywords
AbbVie, ImmunoGen, Acquisition, Oncology, Humira, Skyrizi, Rinvoq, Elahere, Venclexta, Financial Results, Pharmaceuticals, Biotechnology, Earnings, Revenue, Biosimilars
ABBV
Abbvie INC
NYSE
Sector: TBD
Filings with Classifications
Better than expected
9 May 2025 1:24 PM
Quarterly Report
- The company reported an 8% increase in net revenues on a reported basis and a 10% increase on a constant currency basis, indicating strong growth.
- Operating earnings reached $3.7 billion, with diluted earnings per share at $0.72, reflecting improved profitability.
- Key growth drivers included Skyrizi and Rinvoq in immunology, and Vraylar and Botox Therapeutic in neuroscience, demonstrating successful product performance.
Better than expected
25 April 2025 7:48 AM
Quarterly Report
- AbbVie's first-quarter results exceeded expectations, leading to an increase in the company's full-year adjusted diluted EPS guidance.
Worse than expected
3 April 2025 4:13 PM
8-K Filing
- The company's full-year adjusted diluted EPS guidance has been lowered from $12.12 $12.32 to $11.99 $12.19 due to the $248 million IPR&D expense in Q1 2025.
Better than expected
24 March 2025 4:28 PM
Proxy Statement
- AbbVie's 2024 results exceeded expectations with strong revenue growth and a robust R&D pipeline, indicating better-than-expected performance.
Capital raise
26 February 2025 5:04 PM
Debt Offering Announcement
- AbbVie completed an underwritten public offering of $4 billion in senior notes.
- The offering was registered under the Securities Act of 1933.
- The proceeds from the notes offering are likely to be used for general corporate purposes, including refinancing existing debt, funding acquisitions, and investing in research and development.
Capital raise
19 February 2025 9:22 AM
Debt Offering Announcement
- AbbVie is issuing $4 billion in senior notes.
- The offering includes notes due in 2028, 2030, 2035, and 2055.
- The company expects to receive approximately $3.98 billion in net proceeds.
Better than expected
18 February 2025 5:00 PM
SEC Form 4
- The vesting of performance-based awards suggests that the company exceeded its performance targets, leading to the release of these shares to the executive.
Worse than expected
14 February 2025 1:17 PM
Annual Report (Form 10-K)
- Humira sales declined by 37% globally due to biosimilar competition, which is worse than expected.
Delay expected
14 February 2025 1:17 PM
Annual Report (Form 10-K)
- AbbVie received a Complete Response Letter (CRL) from the FDA for the New Drug Application (NDA) for ABBV-951 for the treatment of motor fluctuations in adults with advanced Parkinson's disease.
Worse than expected
31 January 2025 7:42 AM
Quarterly Report
- The full-year diluted EPS decreased by 12.1% on a GAAP basis and 8.9% on an adjusted basis.
- The company experienced a diluted loss per share in the fourth quarter on a GAAP basis.
- The fourth-quarter results included a significant unfavorable impact from acquired IPR&D and milestones expense.
- The company recorded a non-cash after-tax intangible asset impairment charge of $3.5 billion related to emraclidine.
Worse than expected
10 January 2025 8:31 AM
8-K Filing
- The document details a $3.5 billion impairment charge due to failed clinical trials, indicating worse than expected results for the emraclidine program.
Worse than expected
6 January 2025 4:02 PM
Earnings Guidance Update
- The updated guidance includes a $1.6 billion charge for acquired IPR&D and milestones expense, which significantly reduces both Q4 and full-year adjusted diluted EPS compared to previous guidance.
Worse than expected
4 November 2024 2:19 PM
Quarterly Report
- The company's diluted earnings per share of $0.88 for the quarter and $2.41 for the nine months ended September 30, 2024 were negatively impacted by significant expenses related to amortization of intangible assets, changes in fair value of contingent consideration liabilities, acquisition and integration costs, and litigation matters.
- The company's operating cash flows decreased compared to the prior year due to the timing of working capital, higher contingent consideration payments and decreased results from operations driven by acquisition-related cash expenses.
Delay expected
4 November 2024 2:19 PM
Quarterly Report
- AbbVie received a Complete Response Letter from the FDA for the New Drug Application for ABBV-951 due to observations identified during inspection of a third-party manufacturer.
Better than expected
30 October 2024 7:43 AM
Quarterly Report
- The company raised its full-year adjusted diluted EPS guidance, indicating better than expected performance.
- The company's adjusted diluted EPS of $3.00 was better than the previous year's $2.95.
- The company's net revenues increased by 3.8 percent on a reported basis, indicating better than expected performance.
Worse than expected
3 October 2024 4:07 PM
Earnings Guidance Update
- The $82 million expense for acquired IPR&D and milestones will negatively impact both GAAP and adjusted non-GAAP diluted earnings per share by $0.04.
- The full-year and third quarter adjusted diluted EPS guidance ranges have been lowered to reflect this expense.
Delay expected
7 August 2024 3:00 PM
Quarterly Report
- AbbVie received a Complete Response Letter from the FDA for ABBV-951 due to observations identified during inspection of a third-party manufacturer, delaying the potential approval of the drug.
Worse than expected
7 August 2024 3:00 PM
Quarterly Report
- The company's earnings per share were negatively impacted by acquisition-related costs and amortization of intangible assets.
- Humira sales declined significantly due to biosimilar competition, which was worse than expected.
- Operating cash flows decreased compared to the prior year due to working capital timing and acquisition-related expenses.
Capital raise
7 August 2024 3:00 PM
Quarterly Report
- AbbVie issued $15 billion in senior notes to finance the acquisitions of ImmunoGen and Cerevel Therapeutics.
- The company also borrowed and repaid $5.0 billion under a term loan credit agreement in connection with these acquisitions.
Better than expected
25 July 2024 7:41 AM
Quarterly Report
- The company's second-quarter results exceeded expectations, driven by strong performance in its ex-Humira portfolio.
- AbbVie raised its full-year adjusted diluted EPS guidance, indicating better than previously anticipated financial performance.
Delay expected
25 July 2024 7:41 AM
Quarterly Report
- AbbVie received a Complete Response Letter (CRL) from the FDA for the New Drug Application (NDA) for ABBV-951, citing observations identified during inspection of a third-party manufacturer, which will delay the launch of the product.
Worse than expected
3 July 2024 2:07 PM
Earnings Guidance Update
- The company's earnings guidance for both the full year and the second quarter has been lowered due to a significant $937 million IPR&D expense.
Better than expected
3 May 2024 11:04 AM
Quarterly Report
- The diluted earnings per share significantly increased to $0.77 from $0.13 year-over-year, indicating better than expected profitability.
- Net earnings attributable to AbbVie Inc. were $1.369 billion, a substantial increase from $239 million in the first quarter of 2023, showing better than expected results.
Capital raise
3 May 2024 11:04 AM
Quarterly Report
- AbbVie issued $15 billion in senior notes to finance the acquisition of ImmunoGen and the proposed acquisition of Cerevel Therapeutics.
- The company borrowed and repaid $5.0 billion under a term loan credit agreement in February 2024.
Delay expected
3 May 2024 11:04 AM
Quarterly Report
- The company made a decision to revise the research and development plan for AGN-151607, a novel investigational neurotoxin, which contributed to a delay in the estimated timing of regulatory approval.
Better than expected
26 April 2024 7:43 AM
Quarterly Report
- The company raised its full-year adjusted diluted EPS guidance, indicating better than expected future performance.
- First quarter results were well ahead of expectations, driven by excellent performance from the ex-Humira growth platform.
Worse than expected
3 April 2024 4:06 PM
Earnings Guidance Update
- The company's earnings per share guidance has been lowered due to a $164 million expense related to acquired IPR&D and milestones.
Capital raise
26 February 2024 5:08 PM
Debt Offering Announcement
- AbbVie is raising $15 billion through the issuance of senior notes.
- The notes are being sold to underwriters in a registered public offering.
- The proceeds will be used for specific purposes including acquisitions and debt repayment.
Worse than expected
12 February 2024 7:49 AM
Merger Announcement
- The acquisition is expected to be dilutive to AbbVie's EPS in 2024, with a $0.42 per share impact for the full year and $0.04 per share in the first quarter.
Worse than expected
2 February 2024 7:51 AM
Quarterly Report
- The full-year GAAP diluted EPS decreased by 59.0%, indicating worse than expected profitability.
- The overall net revenues decreased by 6.4% on a reported basis, showing worse than expected sales performance.
- Humira revenues experienced a substantial decline due to biosimilar competition, which was worse than expected.
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