ABBV
Abbvie INC
NYSE
8-K: AbbVie Updates 2025 Earnings Guidance to Reflect $248 Million IPR&D Expense in Q1
Sentiment:
8-K Filing
3 April 2025 4:13 PM
AbbVie adjusts its 2025 earnings guidance to incorporate a $248 million expense related to acquired IPR&D and milestones in the first quarter.
Worse than expected
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.
Summary
- AbbVie has updated its 2025 financial guidance to include the impact of acquired In-Process Research and Development (IPR&D) and milestone expenses.
- The company expects to incur $248 million in acquired IPR&D and milestone expenses during the first quarter of 2025.
- This expense will negatively impact both GAAP and adjusted non-GAAP diluted earnings per share by $0.13.
- As a result, AbbVie's full-year 2025 adjusted diluted earnings per share guidance range is now $11.99 $12.19, down from the previously announced $12.12 $12.32.
- The first quarter 2025 adjusted diluted earnings per share guidance range is $2.34 $2.38.
- The updated guidance does not include the impact of the AbbVie and Gubras licensing agreement, as the transaction closed after the first quarter of 2025.
- AbbVie does not forecast acquired IPR&D and milestone expenses beyond Q1 2025 due to the uncertainty of future transactions.
Sentiment
Score: 5
Explanation: The announcement is neutral. While the IPR&D expense negatively impacts earnings, it reflects ongoing investment in the pipeline. The company is still expected to be profitable.
Negatives
- The $248 million IPR&D expense negatively impacts both GAAP and adjusted non-GAAP diluted earnings per share by $0.13 in Q1 2025.
- The full-year adjusted diluted EPS guidance has been lowered from $12.12 $12.32 to $11.99 $12.19.
Risks
- The final results for the quarter ended March 31, 2025, are subject to financial statement closing procedures and may differ from these preliminary estimates.
- Future acquired IPR&D and milestone expenses are uncertain and cannot be reliably forecasted.
- Forward-looking statements are subject to risks and uncertainties, including challenges to intellectual property, competition, R&D difficulties, litigation, and changes in regulations.
Future Outlook
AbbVie's full-year 2025 adjusted diluted earnings per share guidance range, including the impact of first quarter 2025 acquired IPR&D and milestones expense, is $11.99 $12.19.
Management Comments
- AbbVie does not forecast acquired IPR&D and milestones expense beyond the first quarter of 2025 due to the uncertainty of the future occurrence and timing of these transactions.
Industry Context
Pharmaceutical companies often incur significant IPR&D expenses when acquiring or licensing new drug candidates, which can impact short-term profitability but are viewed as investments in future growth.
Comparison to Industry Standards
- IPR&D expenses are common in the pharmaceutical industry, especially for companies focused on innovation and growth through acquisitions and licensing.
- Companies like Johnson & Johnson, Pfizer, and Merck also regularly report IPR&D expenses as part of their financial results.
- The impact of IPR&D expenses on earnings can vary significantly depending on the size and timing of the transactions.
Stakeholder Impact
- Shareholders may react negatively to the lowered earnings guidance.
- Analysts will likely adjust their earnings models to reflect the IPR&D expense.
- The impact on employees, customers, suppliers, and creditors is expected to be minimal.
Key Dates
- January 31, 2025: Date of previously announced adjusted diluted earnings per share guidance for 2025.
- March 31, 2025: End of the first quarter of 2025.
- April 3, 2025: Date of the 8-K filing.
- December 31, 2025: End of the full-year 2025.
Keywords
earnings guidance, IPR&D, milestones, adjusted EPS, AbbVie, financial results
ABBV
Abbvie INC
NYSE
Sector: TBD
Filings with Classifications
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Better than expected
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Worse than expected
3 April 2025 4:13 PM
8-K Filing
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Better than expected
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Debt Offering Announcement
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Worse than expected
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Quarterly Report
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Worse than expected
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Worse than expected
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Quarterly Report
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Quarterly Report
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Better than expected
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Quarterly Report
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Worse than expected
3 October 2024 4:07 PM
Earnings Guidance Update
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Delay expected
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Quarterly Report
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Worse than expected
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Quarterly Report
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Capital raise
7 August 2024 3:00 PM
Quarterly Report
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Better than expected
25 July 2024 7:41 AM
Quarterly Report
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Delay expected
25 July 2024 7:41 AM
Quarterly Report
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Worse than expected
3 July 2024 2:07 PM
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Better than expected
3 May 2024 11:04 AM
Quarterly Report
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Capital raise
3 May 2024 11:04 AM
Quarterly Report
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Delay expected
3 May 2024 11:04 AM
Quarterly Report
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Better than expected
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Worse than expected
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Earnings Guidance Update
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Capital raise
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Debt Offering Announcement
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Worse than expected
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Merger Announcement
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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.
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