AbbVie Q2 2021 Earnings Call Transcript

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Provided by Quartr
July 29, 2021

There are 21 speakers on the call.

Operator

Thank you for standing by and welcome to the AbbVie Second Quarter 2021 Earnings Conference Call. I would now like to introduce Ms. Liz Hsieh, Vice President of Investor Relations. Ma'am, you may proceed.

Speaker 1

Listen. Good morning and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer listen to the operator for the Q and A portion of the call is Laura Schumacher, Vice Chairman and President Rob Michael, Executive Vice President and Chief Financial Officer and Jeff Stewart, Executive Vice President, Commercial Operations. To the Q and A portion of the call is Laura Schumacher, Vice Chairman, External Affairs, Chief Legal Officer and Corporate Secretary. Before we get started, I remind you that some statements we make today may be considered forward looking statements for purposes of the Private Securities Litigation Reform Act of 1995.

Speaker 1

Listen to the company's comments. AbbVie cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward looking statements. Listen. Additional information about these risks and uncertainties is included in our SEC filings. AbbVie undertakes no obligation to update these forward looking statements, listen only on today's conference call, non GAAP financial measures will be used to help investors understand AbbVie's business performance.

Speaker 1

Listen to the financial results. These non GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website. Listen. Unless otherwise noted, our commentary on sales growth is on a comparable basis, which includes full current year and historical results for Allergan. Listen.

Speaker 1

For this comparison of underlying performance, all historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policies listen and exclude the divestitures of Zenpap and Biocase. References to operational growth further exclude the impact of exchange. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to Rick.

Speaker 2

Thank you, Liz. Listen. Good morning, everyone, and thank you for joining us today. I'll discuss our Q2 performance and outlook, and then Jeff, Mike and Rob will review our business highlights, listen to the financial results in more detail. AbbVie delivered another excellent quarter with adjusted earnings per share listen to the financial results of $3.11 exceeding the midpoint of our guidance by $0.04 Total adjusted net revenues of nearly $14,000,000,000 listen to the call for questions.

Speaker 2

We're up 19.3 percent on a comparable operational basis, approximately $375,000,000 ahead of our expectations. These results demonstrate our strong and balanced performance across each of our major growth franchises, listen to the Q1 of 2019, including double digit comparable operational revenue growth from immunology, hemonc, neuroscience and aesthetics. Looking at the most recent trends, the vast majority of our portfolio is well into the recovery phase from the pandemic. Listen. In immunology, we continue to see strong recovery across the room, derm and gastro segments listen with positive trends across all key indicators, including new patient starts.

Speaker 2

SKYRIZI and RINVO continue to ramp nicely listen in their initial indications with both products demonstrating robust double digit sequential revenue growth. In neuroscience, listen. VALOR is demonstrating strong new prescription volume in the atypical antipsychotic market listen and the launch of UBRELVI, the leading oral CGRP for acute migraine continues to exceed our expectations. Aesthetics listen to the Q1 of 2019. We're pleased with the rapid market growth in both toxins and fillers, listen driven by our increased promotional resources globally, brand strength and COVID related pent up demand.

Speaker 2

Listen to the listen. While the recovery across the AbbVie portfolio is going very well in aggregate, in certain disease areas like CLL and listen to the

Speaker 3

Q1 of the year.

Speaker 2

We continue to see a residual impact from the pandemic. We expect these specialty areas to further recover listen as the year progresses. One of AbbVie's greatest strengths is the dedication and engagement of our people. Listen. Across AbbVie, the majority of our employees have safely returned to the workplace and our field teams are now predominantly conducting listen to live engagements with physicians and customers where protocols and guidelines permit.

Speaker 2

I'm extremely proud of the listen to the team work and collaboration our people have demonstrated throughout this pandemic to bring our medicines to patients and keep our business performing at a strong level. Listen. As an organization, we have also made a tremendous amount of progress with the Allergan transaction and integration. Listen. We just recently completed our 1st full year as a combined company, which I'd say has gone exceptionally well.

Speaker 2

Listen. We're tracking well against the operational and financial commitments we outlined at the time of the transaction, with accretion performing above listen to our original projections. But I'm particularly pleased with the robust revenue performance that we've been able to drive listen to the Q1 since acquiring Allergan, with 2021 sales tracking to grow significantly faster than legacy Allergan's historical performance. Listen. Our results continue to show that we have created a stronger and much more diverse company with numerous listen to the products within our newly combined portfolio, delivering robust growth.

Speaker 2

Based on the continued strong momentum of our business in the quarter listen to our progress year to date. We are once again raising our full year 2021 EPS guidance. We now expect adjusted earnings per share listen to the Q1 of $12.52 to $12.62 reflecting growth of 19% at the midpoint. Our strong performance allows us to continue to fully invest in the business for long term growth. Listen.

Speaker 2

As you'll hear from Mike momentarily, we continue to make excellent progress across all stages of our research and development programs. Listen. In closing, I'm extremely pleased with our performance in the quarter and with our continued strong momentum of the business, listen, which has positioned us well for the remainder of 2021 and many years to come. With that, I'll turn the call over to Jeff for additional comments on commercial highlights. Thank you, Rick.

Speaker 4

I'll start with immunology, which delivered global revenues of more than $6,100,000,000 listen, reflecting growth of 13.8 percent on an operational basis. Gyrizi and RINVO continue to have significant impact on AbbVie's growth and performance, listen to the company's financial results, contributing more than $1,000,000,000 in combined sales this quarter. SYRISI global revenues were up 17.4% on a sequential basis, listen to the Q1 of 2019. In the U. S, SKYRIZI continues to perform well listen and has maintained its leading in play psoriasis patient share, which includes both new and switching patients at approximately 34%.

Speaker 4

SKYRIZI's total prescription share capture is now approaching 20%, 2nd only to HUMIRA. Listen. Internationally, SKYRIZI has achieved in play patient share leadership in 13 markets, including Canada, listen to the Q1 of 2019. RINVOQ is also demonstrating robust growth with global sales up nearly 25% on a sequential basis. Listen.

Speaker 4

We continue to see in play patient share of approximately 15% in the U. S. RA market, where physician and patient feedback remain listen very positive on RINVOC's strong benefit risk profile. Internationally, RINVOC access and share continue to ramp nicely in RA listen with in play market leadership now in half a dozen key countries. We are also making excellent progress with the regulatory approval and listen to the commercial launch of PSA and AS across several OUS countries.

Speaker 4

And we look forward to the approval and commercialization of RINVOC in atopic dermatitis listen later this year following the recent CHMP positive opinion for both the 15 30 milligram doses. HUMIRA global sales were approximately $5,100,000,000 up 3.6% on an operational basis, listen with continued high single digit revenue growth in the U. S, offset by biosimilar competition across the international markets, listen, where revenues were down 12.6 percent on an operational basis. In hematologic oncology, sales were approximately $1,800,000,000 listen to the company's financial results, up 13.2% on an operational basis. AbbVie maintains a strong leadership position in CLL with a combined portfolio, listen to the call, including both IMBRUVICA and VENCLEXTA, new patient share of approximately 42% and total patient share listen to the company's results of approximately 72% across all lines of therapy.

Speaker 4

IMBRUVICA Global revenues were approximately $1,400,000,000 listen up 7.2%. In the U. S, performance continues to be impacted by lower new patient starts in CLL, listen, which remain below pre COVID levels as well as increasing competitive dynamics from newer therapies, including VENCLEXTA and other BTK inhibitors. VENCLEXTA sales increased 38.3% on an operational basis with strong demand across all approved indications. Listen.

Speaker 4

We're particularly pleased with the performance in AML with robust share in the U. S. And increasing momentum internationally following recent approvals listen

Speaker 3

in the EU and Asia.

Speaker 4

In neuroscience, revenues were more than $1,400,000,000 up listen to the Q1 of 2019. We continue to see strong momentum with Vraylar, which recently achieved listen to all time highs in weekly prescriptions and market share. VRAYLAR revenues of $432,000,000 were up more than 25% on a comparable listen to the

Speaker 3

Q4 of fiscal 2020.

Speaker 4

And UBRELVI once again delivered robust results. Sales of our leading acute migraine treatment were $126,000,000 listen to the Q1 of 2019. Feedback from physicians remains very positive, highlighting UBRELVIEN's rapid and sustained pain relief, listen

Speaker 5

to

Speaker 4

the listen roughly 9% of new prescriptions in the large acute migraine market with more than 1,000,000 cumulative total prescriptions since the launch. Listen. We continue to believe there is substantial room for long term growth in this rapidly expanding acute market based on unmet need and strong patient demand. Listen. In migraine prevention, we've also been planning and preparing for the forthcoming regulatory approval and commercial launch of etogipan, listen to our oral CGRP for episodic migraine.

Speaker 4

We are very encouraged with the efficacy profile of etogipan, listen to the Q1 of 2019, including reduction in migraine days versus placebo as well as the overall percentage of responder rates in patients. Listen. Now the launch of etogepant will be supported by our existing migraine sales force with commercial access expected to ramp strongly. We remain on track listen to the U. S.

Speaker 4

Regulatory decision in September. Botox Therapeutics continues to perform well listen across nearly a dozen medical indications with a total sales of $603,000,000 up more than 38% on an operational basis. Listen. In chronic migraine, BOTOX Therapeutic remains a foundational prevention treatment and the clear branded leader in new patient starts. Listen.

Speaker 4

Lastly, in our other therapeutic areas, we saw significant contribution from eye care, MAVERIT sales were $442,000,000 up 13.9% on an operational basis, although treated patient volumes remain suppressed listen and we also saw double digit comparable operational revenue growth for both Creon and LINZESS. So overall, I'm pleased with the momentum of our therapeutic portfolio, which is demonstrating a strong recovery listen as well as our progress with new recent product launches. And with that, I'll turn the call over to Mike for additional comments on our R and D programs. Mike?

Speaker 5

Listen. Thank you, Jeff. I'll start with immunology, where we had several notable pipeline events in the quarter. In the area of inflammatory bowel disease, listen. We reported positive top line results from the Phase 3 maintenance studies for RINVOQ in ulcerative colitis and SKYRIZI in Crohn's disease.

Speaker 5

Listen. In the RINVOQ UC maintenance study, both the 15 30 milligram doses met the primary listen and all secondary endpoints at week 52. In the induction portion of the program, RINVOQ demonstrated a very strong impact on the disease listen and the results from this maintenance study demonstrate that patients continuing treatment with RINVOC maintain high levels of clinical remission, listen to the clinical response and endoscopic improvement at the 1 year mark. In fact, listen to the next slide. Maintenance treatment with either dose of RINVOQ resulted in some of the highest rates of remission and endoscopic improvements seen in UC clinical studies.

Speaker 5

Listen. With the 30 milligram RINVOQ dose, 52% of patients achieved clinical remission, 62% listen to the company's performance. 49% achieved histologic endoscopic mucosal improvement listen and 68% achieved steroid free remission. We are very pleased with how RINVOG performed from a safety perspective as well. Listen.

Speaker 5

In this maintenance study, the exposure adjusted event rates for overall adverse events, including serious listen and severe events were higher in the placebo group than in either rainbow dose group. Additionally, the exposure adjusted rates listen for MACE, VTE and malignancies, excluding non melanoma skin cancer, were comparable between RINVOT Group's and placebo. Listen. These results provide further evidence that RINVOC has the potential to become a highly effective therapy listen for patients with moderate to severe ulcerative colitis. We're also nearing completion of the Crohn's disease program for Renvok listen and expect to see data from the 1st Phase 3 induction study later this year.

Speaker 5

Results from the 2nd induction study and the maintenance study listen to the Q1 of 2019, with regulatory submissions also anticipated in 2022. Listen. We also saw very impressive results from SKYRIZI in the maintenance phase of our Crohn's disease program, particularly with the 3 60 milligram listen. Importantly, when we look at the most stringent endpoints, we see strong separation between SKYRIZI 3 60 milligrams and control, listen with response rates of 39% for endoscopic remission and 29% for deep remission listen compared to 13% and 10% for the withdrawal group at week 52. We remain on track to submit our regulatory applications for listen to the call for Renvoke in UC and SKYRIZI in Crohn's in the coming months.

Speaker 5

In the quarter, listen. We also announced updates regarding our regulatory applications for RINVOC in atopic dermatitis, psoriatic arthritis and ankylosing spondylitis. Listen. In June, RINVOC received a positive CHMP opinion in Europe, recommending both the 15 milligram and 30 milligram doses listen in moderate to severe atopic dermatitis. This CHMP opinion puts us on track for European approval in August.

Speaker 5

Listen to the Q4 of 2018. When approved, atopic dermatitis will be the 4th indication for RINVOK in Europe. Regarding our supplemental NDAs in the U. S, listen. We recently announced that we were notified by the FDA that they would not meet our PDUFA action dates for RINVOC in psoriatic arthritis, listen to the listen to the agency cited their ongoing review of the topacitinib oral surveillance study, listen to the FDA's data.

Speaker 5

The FDA has not requested listen to any additional safety analyses for Renvoke since the PDUFA dates were missed. While there are no new action dates, based on our discussions with the agency, listen. We expect decisions on our regulatory applications in the next few months following completion of the agency's review listen to the tofacitinib oral surveillance data. We remain confident in the benefit risk profile for RINVOQ across all indications listen and we'll continue to work with the FDA to bring RINVOC to market in these new disease areas. In our early stage immunology pipeline, listen.

Speaker 5

We recently began 2 new trials for ABBV-one hundred and fifty four, our TNF steroid conjugate. We initiated a definitive dose ranging study listen to the FDA and also started our Phase 2 study in polymyalgia rheumatica. Later this year, we expect to begin the Phase 2 study for

Speaker 3

listen to the slide 4 in Crohn's disease.

Speaker 5

Also in the quarter, we completed the induction stage of a Phase 2 proof of concept study listen to the Q1 of 2019. While this CD40 antagonist demonstrated greater efficacy compared to listen to the historical control. The efficacy results did not meet our pre specified criteria. As a result, we will not be advancing ravagalumab listen to the call in ulcerative colitis. In oncology, we continue to make good progress across all stages of our pipeline.

Speaker 5

Listen. At the recent ASCO and EHA meetings, data were presented from the GLOVE and CAPTIVATE studies listen to the results from these two studies demonstrated that the listen to the oral, fixed duration IMBRUVICA plus VENCLEXTA regimen has the potential to provide deeper and more durable remission listen and extend progression free survival as a frontline treatment across the spectrum of age and fitness status for CLL patients. Listen. We plan to submit these data to regulatory agencies and look forward to bringing this new fixed duration treatment option listen to CLL patients once approved. Earlier this month, we received a breakthrough therapy designation for VENCLEXTA listen in combination with azacitidine for previously untreated higher risk MDS patients based on the strong data demonstrated thus far listen in our ongoing Phase 1b study.

Speaker 5

We expect to see final results from this study in the coming months and plan to discuss the data with regulators listen regarding the potential to support an accelerated approval for VENCLEXTA in MDS. Also in the quarter, listen. We saw interim results from a Phase 1 study evaluating the BCMA CD3 bispecific antibody, listen to TMB-383B in multiple myeloma patients who have received at least 3 prior lines of therapy. Listen. 383 performed very well as a monotherapy in these heavily pretreated patients, demonstrating an objective response rate listen to the results of nearly 80% and a very good partial response or better rate of 63% and a complete response rate of nearly 30% listen at doses greater than 40 milligrams in the dose escalation cohort.

Speaker 5

Based on these promising results, listen. We exercised our right to acquire TNB-383B from Teneo Bio. We expect listen to the transaction to close in the coming months and we'll provide more information on our development plan for 383 in multiple myeloma later this year. Listen. This is a highly competitive area.

Speaker 5

But based on the data to date, we believe this BCMA CD3 bispecific has the potential listen to the company's ability to be differentiated on efficacy, safety and dosing interval and could be best in class as both a monotherapy listen and combination therapy across lines of treatment in multiple myeloma. We continue to make good progress listen with the Nabitoclax program in myelofibrosis, which consists of randomized Phase 3 trials in both the frontline and relapsed refractory setting listen as well as a single arm Phase 2 study. Based on feedback from the FDA, we intend to submit our regulatory application listen to the Phase 3 data together with the Phase 2 trial results. We expect the Phase 3 data readout and regulatory submissions listen in the second half of twenty twenty two with navitoclax approval in myelofibrosis anticipated in 2023. Listen.

Speaker 5

In neuroscience, we recently completed the Phase 2 proof of concept studies for 2 assets, elozanimab in multiple sclerosis and listen to ABBV8E12 in Alzheimer's disease. In their respective studies, neither asset met the efficacy endpoints of the trial, listen and we will be discontinuing the development of elizanimab in MS and AD12 in Alzheimer's disease. Listen. Given the enormous unmet need in Alzheimer's disease, we remain committed to finding disease modifying therapies, listen and we continue to pursue a range of approaches. We have several additional programs that are either in the clinic today or are in preclinical development.

Speaker 5

Listen. These include programs that modulate the neuro inflammatory response in Alzheimer's disease, such as our TREM-two listen to the CD33 programs that are both in clinical development and programs that target pathologic tau through novel mechanisms, listen to

Speaker 6

the FDA's approval of the FDA's approval

Speaker 7

of the FDA's approval of

Speaker 5

the FDA's approval of the FDA's approval of the FDA's approval of listen. Following the accelerated approval of aducanumab in the U. S, there has been an increased focus on abeta directed programs. Listen. We have monitored this area closely over the last several years.

Speaker 5

And based on all of the available data, we believe there is a continued opportunity listen to the A beta directed monoclonal antibody that clears plaque more rapidly than existing agents with a reduced risk listen to the FDA's question and answer session. We have profiled a number of A beta antibodies pre clinically listen and we have a candidate with the potential to meet these requirements. We expect to introduce this candidate into the clinic by the end of this year or early next year. Listen. Also in neuroscience, we're nearing completion of our registrational program for ABBV-nine fifty one listen in advanced Parkinson's disease.

Speaker 5

We recently completed an interim analysis in the first of 2 Phase 3 studies listen to our subcutaneous levodopacarbidopa delivery system demonstrated safety and efficacy comparable to DUOPA after 6 months of treatment. Listen. The primary objective of this trial was safety, but efficacy was also evaluated as secondary endpoints. In this analysis, listen to the slide. 951 performed very well, demonstrating a 52% reduction in normalized off time and a 41% increase listen to the patient's response and the patient's response.

Speaker 5

Patients also benefited from 951's 24 hour listen to the continuous levodopacarbidopa infusion with patients experiencing substantial benefits in sleep and reduction in morning off time. Listen. Full data from the 6 month interim analysis will be presented at a medical meeting later this year. Listen. Data from a second Phase 3 study are expected in the Q4 with our regulatory submissions anticipated listen later this year or early next year.

Speaker 5

And lastly, in eye care, at the recent meeting for the American Society For Cataract listen to the results from the Phase 3 GEMINI-one study evaluating our topical eye drop, AGN-190, listen to the treatment of symptoms associated with presbyopia. In this study, listen to the Q1 of 2019. We are pleased to announce that the Q1 of 2019 was a record onset of action within 15 minutes listen and sustain vision improvements for up to 6 hours. 584 has the potential to be a convenient listen to the on demand solution for patients with mild to moderate presbyopia and we look forward to an approval decision later this year. Listen.

Speaker 5

So in summary, we've made great progress with our pipeline in the first half of this year and we look forward to several additional data readouts, listen to regulatory submissions and approvals throughout the remainder of 2021. With that, I'll turn the call over to Rob listen for additional comments on our Q2 performance and financial outlook. Rob?

Speaker 6

Thank you, Mike. Starting with 2nd quarter results, we reported adjusted earnings per share listen to the Q1 of 2019, up 32.9% compared to prior year and above our guidance midpoint. Listen. Total adjusted net revenues were nearly $14,000,000,000 up 19.3% on a comparable operational basis, listen excluding a 1.6% favorable impact from foreign exchange. The adjusted operating margin ratio was 49.7% of sales, listen to an improvement of 260 basis points versus the prior year.

Speaker 6

This includes adjusted gross margin of 82.2 percent of sales, listen to the

Speaker 3

financial results. Adjusted R and D investment of 11.3

Speaker 6

percent of sales and adjusted SG and A expense of 21.2 percent of sales. Listen. Net interest expense was $606,000,000 and the adjusted tax rate was 12.6%. As Rick previously mentioned, we are raising our full year adjusted earnings per share guidance to between $12.52 listen to the Q1 of 2019 and $12.62 reflecting growth of 19% at the midpoint. Excluded from this guidance is $6.48 listen to the full year of known intangible amortization and specified items.

Speaker 6

This guidance now contemplates full year revenue growth of 10.7% on a comparable operational basis. At current rates, we now expect foreign exchange to have a 0.9% listen to the favorable impact on full year comparable sales growth. This implies a full year revenue forecast of approximately $56,300,000,000 Included in this guidance are the following updated full year assumptions. We now expect Aesthetics Global revenue of approximately $4,900,000,000

Speaker 7

listen to the

Speaker 6

call, including approximately $2,000,000,000 from BOTOX Cosmetic and approximately $1,400,000,000 from Juvederm. We listen to the results of the company. We now expect RESTASIS sales of approximately $1,100,000,000 and assume no generic competition in 2021. Expect global revenue of approximately $900,000,000 And for MAVERET, we now expect global sales of approximately $1,900,000,000 listen. Looking at the P and L for 2021, we are now forecasting adjusted R and D investment of approximately listen to the Q3 of fiscal 2020.

Speaker 6

We expect to be approximately $6,700,000,000 and adjusted SG and A expense of approximately $11,900,000,000 All other full year assumptions remain unchanged. Listen. As we look ahead to the Q3, we anticipate net revenue of approximately $14,300,000,000 At current rates, listen. We expect foreign exchange to have a 0.5% favorable impact on comparable sales growth. We expect adjusted earnings per share between 3 point listen to $0.18 $3.22 excluding approximately $1.64 of known intangible amortization and specified items.

Speaker 6

Finally, we continue to make great progress on our Allergan transaction commitments. Listen. We are exceeding our revenue expectations in several areas, including BOTOX, VRAYLAR, uBrelvi and eye care. Listen. We have also delivered expense synergies of almost $800,000,000 during the first half of this year and are on track to deliver synergies of approximately listen to the company's financial results and we have already paid down $12,000,000,000 of combined listen to the company's financial results.

Speaker 6

We expect to achieve $17,000,000,000 of cumulative debt pay down by the end of this year with further deleveraging through 2023. Listen to the financial results. This will bring our net leverage ratio to 2.4 times by the end of 2021 and approximately 2 times by the end of 2022. Listen. In closing, AbbVie has once again delivered outstanding performance, and we are very pleased with the strong momentum of the business listen to the Q2 of 2019, ending into the second half of the year.

Speaker 6

With that, I'll turn the call back over to Liz.

Speaker 1

Thanks, Rob. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to 1 or 2. Operator, first question please.

Operator

Thank you, Ms. Shay. Our first question is from Vamil Divan with

Speaker 7

So maybe 2 if I could. So one, Rick, you mentioned several of the Allergan products maybe getting better than your expectation. Can you maybe I mean, I know you want to share share your secret sauce, but in terms of what is it that you've noticed that has helped to drive those products, because it seems like it's pretty much across the board listen from aesthetics to VRAYLAR, UBRELVI. So is it around promotion efforts? Is it around sort of payer dynamics?

Speaker 7

Anything you could share would be helpful listen there. And then the second one on IMBRUVICA. I just want to confirm, I think you guys said that the new patient share across all indications now is 42%. Listen. I just want to see you guys are in line with what you expected at this point.

Speaker 7

Obviously, there's been questions around some of the competitors that have entered the market. And maybe you can just talk about sort of listen to the patients who are not studying on IMBRUVICA. So what are you seeing as the reasons why they might be choosing a competitive? Thank you.

Speaker 2

Vamil, this is Rick. I'll cover certainly part of the first question and maybe I'll ask Jeff to jump in and cover any listen. I think as you look at this business, one of the things that I think listen to the company. AbbVie is sort of known for is that we tend to operate in a very focused and disciplined way, listen to the growth franchise. We expect every one of our major businesses to develop listen to the financials and financials and financials and financials and financials and financials and financials and financials and financials and financials and financials and listen to the Aesthetics as the example.

Speaker 2

Early on, we made the decision that we were going to fully integrate the Aesthetics business listen to the call to make sure that it had the focus and attention that it needed, because we believe this business had a significant opportunity to be able to grow. Listen. We did that globally. So if you look at Allergan in the past internationally, those people representing those products also had to represent eye

Speaker 3

care and other therapeutic products. So we moved those out into

Speaker 8

the therapeutic areas of

Speaker 2

listen to the therapeutic areas of AbbVie internationally and solely dedicated the aesthetics group internationally listen to Justo products. And then in the U. S, we operate with a similar structure and a fully integrated listen to our R and D organization that's totally committed to just developing aesthetics products and it reports directly to Mike and then the Head of the business listen to our prosthetics reports directly to me. And we had them develop a plan that they are now executing against to be able to deliver against that. So I think listen.

Speaker 2

It's really 3 aspects of it from my perspective. It's 1, the structure we put in place and that was a thoughtful listen to the planned out structure. 2, it's the disciplined processes that we use to be able to execute across all of our businesses. Listen. And the third, I'd say we have consistently invested and we do invest in businesses that we think have the opportunity to be able to drive long term growth and listen to the performance in a way that we can drive that at maximum speed.

Speaker 2

And certainly, as you look at aesthetics, we've increased the investment in SG and A, And we've increased the investment in R and D. Jeff, anything you'd add?

Speaker 4

I think, Rick, I would agree. I think listen to the next question. A big piece, Vamil, is the level of the investment. So as we looked at the particularly the neuroscience compounds, Vraylar and UBRELVI, listen. We were able to structure the sales forces a little differently, which was important from a commercial execution listen and also really upgrade and drive some of the investment around patient activation.

Speaker 4

So I think that listen. All of these brands are spectacular brands, leadership position and when we got that investment profile right, we've seen the listen to the question on the hematology share, listen to the 42% that I referred to was the combined AbbVie share. So that's IMBRUVICA plus VENCLEXTA across all lines of CLL. Listen. So if you take

Speaker 7

a look, if I give you

Speaker 4

a little bit more color on the latest data that we have, for example, in Frontline, we have listen to the full year of 25% total AbbVie share, which is made up around 24% for IMBRUVICA and 11% for VENCLEXTA. Listen. For second line share, for example, we have a 48% total AbbVie position, listen, which is approximately 33% for IMBRUVICA and 15% for VENCLEXA. So both of these brands are now operating at a very significant share level across listen to the CLL. I'll give you some more thoughts as you asked for in terms of color in the market.

Speaker 4

Beyond that leadership level that we have across listen to the CLL indication. We do see that the CLL market is still suppressed. So for example, patient starts listen year to date are down in the high single digits and even within the quarter, they were down in the low single digits. We see that improving listen and so that outlook looks to improve over the 2nd part of the year. In terms of overall share dynamics, listen over the last several quarters, we have lost a few share points to Calquence within the range of our expectations as they've ramped with their listen to the CLL ramp, but also interesting, we've seen that there's been some share increases in monotherapy CD20, listen, which we think is also a COVID type of effect that will ultimately revert back to normality as we go along through the listen to the pandemic.

Speaker 4

So overall, the franchise is performing very, very well. And as you heard from Mike, we're tremendously excited about the future of the HemOnc franchise

Speaker 6

And Vamil, this is Rob. I'm going to come back to your first question. Just one more thing we should mention is, we've been able to re leverage our international infrastructure. Listen to the Aesthetics franchise focused fully internationally on that business, whereas Allergan had it combined with therapeutics. So we've been able to bring that focus in, that level of investment.

Speaker 6

I think we've also been able to leverage our market access prowess. So we're very strong across the globe. Listen. And so when you think about the opportunities for us going forward, I think international certainly plays a big role as we leverage the Allergan business.

Speaker 9

Listen. Thanks, Vamil. Operator, next question please.

Operator

Thank you for your question. Our next question is from Chris Schott with JPMorgan. You may ask your question.

Speaker 10

Great. Thanks so much. Just another one on this FedEx, obviously some incredibly strong numbers here. Can you just elaborate a little bit more on sustainability of this growth? So I guess I'm trying to get a better sense of how much of what we're seeing right now is catch up listen as we exit lockdowns versus a more sustained step up in sales going forward.

Speaker 10

Just any color on that would be appreciated. My second question was RINVOC listen in UC. Can you just help put some of this data into context as you think about the competitive landscape? And particularly relative to what you had listen to the Q1 of 2019. I think you had about $1,000,000,000 in IBD sales by 2025.

Speaker 10

And I guess now we've seen more of this data set. Just How comfortable are you feeling with that target and ultimately the role Renvolk is going to play in this space? Thanks so much.

Speaker 2

Hey, Chris, this is Rick. I'll take the aesthetics question and then Mike can maybe cover the second question if you had. So it's a great question and it's one that we have been looking at very carefully. I mean, if you just step back and you look at the performance of the business, we've done a number of things to listen to the business. We believe this business is significantly underpenetrated.

Speaker 2

When you look at the available patient population here listen and your ability to drive long term penetration, it's tremendous. And so that's why we've done the things that we've done to try to drive that demand. Listen globally, the aesthetic sales were up 31%. If we look at the U. S.

Speaker 2

Toxin and filler business, the market's up about listen to the Q1 of 2019. So but it's hard to evaluate. I can tell you the vast majority of it is driven by fundamental demand and we can see that through the listen to the funnel that we see patients coming in and how many of them are activated to go get procedures. Listen. But we just conducted a fairly robust market research study to try to understand, how much of it was COVID related.

Speaker 2

Listen. And we look at things like how many of those patients got stimulus checks, how many of them were affected from an employment standpoint and are now back at work. I'd say that study, if you looked at the data in that study, the conclusion that you would draw from that is very little of it is COVID related. Listen. Now, I think the flaw is this, most patients are not going to say they use stimulus money for these kinds of procedures or other kinds of things.

Speaker 2

So I think to the best of our ability, what I would tell you is about 2 thirds of the performance, I think is fundamental demand listen and maybe 1 third of it is pent up demand. We're going to need a couple more quarters, I think, to see how that plays out. But I'd say that's our best assessment right now. So very robust growth either way, listen and it could sustain a little bit better than that. But I think you can pretty well count on 2 thirds of it being listen to the fundamental demand that's sustainable longer term.

Speaker 2

Mike? Well, I'll take the question on

Speaker 5

listen to the Q3. Q3 has exceeded our expectations from an efficacy perspective and the results there are very strong. Q3 has been very difficult to treat pharmacologically listen to the question and response has been challenging and the book has delivered those results now listen closely across a number of studies. And I think from a safety perspective, it's also performed very well. I commented in my prepared remarks the fact that

Speaker 10

listen to

Speaker 5

the overall rates of AEs, serious AEs are actually lower than Rinfelpharm. Now the reason for that is that many of these AEs are driven by listen to the results and with an improvement in the disease, you do see them improve as well. And with respect to events of interest, the safety profile has looked very, listen to the SEC and other events of interest rates have been comparable to controls. And so overall, we feel very confident in the markets. We feel very confident listen to the long term guidance that we put out.

Speaker 5

One thing that's important to keep in mind is that long term guidance is 2025 guidance, and our IBD assets will be in listen relatively early stage of launch that FIGHT 5. But the profiles that I've talked about not only for RINVOT, but also for listen to the 2020 5 guidance, but for the long term growth of the Bakken. Significant opportunity there as well.

Speaker 9

Listen. Thanks, Chris. Operator, next question please.

Operator

Thank you. Our next question will be from Ronny Gal with Bernstein. You may ask your questions, sir.

Speaker 11

Good morning and thank you for taking the questions. First one is on AbbVie-nine fifty one. You've mentioned the efficacy rates. I I was wondering if you can talk a little bit about the skin safety profile as compared to the Neoderm product or the apomorphine IV from Europe, listen, especially when it comes to some more severe effects like abscess and Octa. The second question is staying with the pipeline is a little bit about your A beta.

Speaker 11

Listen. It didn't take long for you guys to walk into that. I was kind of wondering if you can talk a little bit about the science that you're discovering. Is the right approach to get to the best effect with minimal side effects to try to remove as much plaque as possible in a very targeted manner or should the approach be to go after soluble aggregate and approach the removal listen to the Q1 of 2019.

Speaker 5

Okay. So this is Mike. I'll take both of those questions. With respect to 951, we'll publish full data listen to the Phase 3 study that I described, at a medical meeting, and then ultimately, in peer reviewed journals as well. But what I can say listen to the skin safety, has looked good to our eye and is within our expectations well within our expectations.

Speaker 5

Listen. As one would expect with the cutaneous device, there are some local reactions, but those have generally been mild and resolved listen to the treatment we've not seen significant issues with more severe types of skin. We feel good about listen to the patient friendly aspects of subcutaneous delivery that has some parallels listen to an insulin pump like device will be a real advantage here because it will allow patients to get that to OPA like efficacy that's transformative without the need for listen to the placement of a gastric tube that's unthreaded in the small bowel and very, very difficult to manage. And so we feel very good about the potential for 951. With respect to abeta, I think if one looks at all of the data, it's quite clear that if you can remove plaque listen rapidly, then there will be a benefit.

Speaker 5

And the key parameter that we would need to see is deep reductions in level of plaque listen and rapid reductions in the level of PAC, because you won't start to see a cognitive benefit, we believe, until you get to that listen to the amyloid negativity level by pet, which is 20 centilloids until you reduce patients to that level. Listen to the goal would be to get them there as rapidly as possible and to do that, while minimizing the impact of ARIA. And we think that that listen can be done through epitope selection. There are slight differences in the amyloid forms that are present in vessel wall compared to plaque. Listen and with appropriate epitope selection, we believe in our preclinical data, it would support that you can do that with reduced listen to risk of area and of course we now need to see whether the clinical data support that as well.

Speaker 5

But those are the basic principles that we're following. We've obviously had these candidates before look at aducanumab approval, because as I said, we've been monitoring, this area quite closely. But we think this is a good time to advance those candidates and to determine whether the science I described plays out in the clinic. But our approaches with respect to A beta are based on plaque,

Speaker 3

listen.

Speaker 11

Thank you.

Speaker 9

Thanks, Ronnie. Operator, next question please.

Operator

Thank you. Our next question is from Andrew Baum with Citi. You may ask your question.

Speaker 12

Many thanks. A couple of questions for Jeff. Firstly, on the outlook for rebating in oncology, this is somewhat of a novelty, at least historically. I note that ESI excluded Calquence listen to their formulary. There's obviously increased therapeutic competition in the space.

Speaker 12

How should we be thinking about the rebasing outlook in oncology going forward more broadly? Listen. 2nd, on the U. S. Payer mix through COVID and now in the recovery stage, could you outline the magnitude of which you've had to listen to the Medicaid component and the patient assistance programs or whether you're seeing that improvement.

Speaker 12

So some sense of

Speaker 4

Yes. Thank you, Andrew. And to start with oncology, I mean largely as you know, listen. The rebating has been done through the sort of the GPO channel, and particularly with the physician in office listen to the dynamics that are in that sector. We don't see significant rebating happening at the PBM level.

Speaker 4

Listen. And if it is, it's quite modest. I think the certainly from the ESI standpoint that you highlighted, listen to the question and answer session. That was not certainly something that AbbVie approached that particular payer with listen to any sort of deal. Our philosophy is that these drugs are very important for oncologists to have listen basically open access for all of these agents.

Speaker 4

So I think it is something that we've seen some of these lights that have started to turn on, listen but they've been quite modest and I don't think that they're going to be super accelerant that we should be listen overly worried about. That's my position on that. I think the second approach in terms of, sorry, that was the question on the magnitude of the Medicaid. Yes. This has been quite interesting.

Speaker 4

We've seen certainly on all of the data, the fact that the enrollment in Medicaid They're there. So we don't see massive movements around our channel shifting. Listen that link to the magnitude of what you might see in terms of the enrollments. So it's relatively modest, certainly manageable. And I think listen.

Speaker 4

Certainly, as we see, the jobs position come back and that could be quite strong, I think we'll see any listen to the modest movement will be corrected over the next several quarters.

Speaker 3

And this

Speaker 2

is Rick Gilliam. I'd add to the second question is, so we have a very listen to the extensive and I would say generous PAP program in place that's really designed to ensure that patients who can't afford our medicines listen, have the ability to be able to access those medicines free of charge in many cases. Listen. As an example, 99% of the applications we get for uninsured patients we approve, listen. We actually just increased the program to listen to the federal poverty level across all of our brands.

Speaker 2

And so listen. It's a program that I think is designed to fulfill the mission that I just described and that is that listen to patients who need our medicines can get them from us if they can't afford to pay for them through whatever system that they operate in. Listen. And but we have not seen and much to our surprise, we have not seen that program increase dramatically even through COVID. Listen and we advertise directly to patients that if they lost their job during COVID that we would provide our medicines to them.

Speaker 2

But I wouldn't say, listen. As I said, much to our surprise, we didn't see the volume go up dramatically.

Speaker 9

Thank you, Andrew. Next question, please.

Operator

Listen. Thank you. Our next question is from Geoffrey Porges with Leerink. Your line is open, sir.

Speaker 13

Thank you very much. Listen to the questions, but I'll focus first on RINVOC. Rick, you've given the long term guidance of a listen to the call, dollars 7,000,000,000 in revenue by 2025, I think, and by all means, correct me if I don't recall correctly. But listen. If you only get the 15 milligram dose approved, if that's the outcome of the deliberations of the FDA, But you get the approvals in Europe, can you achieve that revenue guidance?

Speaker 13

Are you confident enough in the 15 milligram program? Listen. And then secondly, for Mike, your CF development program seems to have been sort of reactivated. And could you talk a little bit about your conviction a little bit more detail on 119? We don't know much about that.

Speaker 13

Listen. Are you confident that it can be active C2 corrector that matches up to your competition? Because clearly, that's a big revenue listen to the opportunity that we have in factored in. Thanks.

Speaker 2

Jeffrey, this is Rick. On your first question, yes, the guidance for RINVOC is look at $8,000,000,000 and I would say we're confident that even with the 15 milligram, we will sustain that guidance. Listen. If you look at the performance of the 15 milligram, it's quite remarkable. And so we feel good about listen to the performance of INVOQ.

Speaker 2

We continue to see strong uptake of INVOQ and the physician interest and It's consistent with what we would expect. So I think we're fine there.

Speaker 5

So this is Mike. I'll take to the question on the CF program. When we restructured the collaboration with Galapagos a few years ago to take direct operational control listen to the program we had a couple of goals. One is we wanted to make sure that we're optimizing the potentiator and C1 components of the regimen. Listen.

Speaker 5

We felt we had a best in class C1 in 2,222. But we believed we needed to make a switch in the potentiator to one that we already had in hand and we've listen. We also believe that we needed a C2 corrector that at in that time period a few years ago did not exist. Listen. So we needed a C2 corrector that had the potential to be best in class.

Speaker 5

And so what we did is we put a significant internal listen to the regulatory efforts to come up with a number of compounds. 119 is the most advanced and a very promising one that we believe fit that bill. Listen. And based on all the preclinical profiling, we think 119 can be a best in class T2 corrector. And with the other components of our triple, we think we deliver best in class efficacy with appropriate pharmacological properties, dosing, listen low DDIs, etcetera.

Speaker 5

And so we are now in a proof of concept Phase 2 study in the clinic to determine whether those preclinical data We'll in fact bear out. What I would say here is the preclinical assays are good. They're much more predictive than they are in other areas because we fundamentally know what the defect is listen in CF and we can study it in appropriate tissues, in human tissues listen in vitro, but ultimately we're going to need to see the clinical data. By right around the end of the year, we'll see internally proof of concept results for that triple. Listen.

Speaker 5

We'd probably be in a position to announce them externally early next year. Those will be data that will include impact on FEV1 with the triple. Listen. And so that will tell us whether we can be best in class. And I agree, if we are best in class, I think it's a very significant opportunity and we would progress it rapidly.

Speaker 5

That's a proof of concept study. So if it's successful, we'd have some additional dose ranging to do. We're studying the highest dose of 119 to determine whether it can have that effect. Listen to the we have to do some additional dose ranging to determine the optimal dose of 119, but that can be done listen rapidly and then we would, if successful move into Phase 3 development.

Speaker 9

Great. Thanks. Thanks, Mike. Listen. Thanks, Jeff.

Speaker 9

Operator, next question please.

Operator

Thank you. Our next question is from Geoff Meacham with Bank of America. Your line is open, sir.

Speaker 14

Good morning, everyone. Thanks for the question. Just had a few quick ones. Another one on JAK Safety. Listen.

Speaker 14

Mike, you mentioned you expect regulatory action in the next few months. Can you just give us some perspective on that? Is there any data that you're still waiting on to submit? And listen. Is there still the potential for an advisory panel?

Speaker 14

And then the second one is on UBRELVI. Maybe just give us some color on the new start dynamic. Listen to what are the patients you're capturing, what share are you gaining from and maybe just help us with kind of listen to what other wins do you have to make with respect to formulary access and share? Thank you.

Speaker 5

I'll take the first question and then Jeff will take the second question on uprolevy. So with respect to JAK safety, We have indicated that we believe that an action is possible in the next few months that's based on our discussions with the agency and what listen to what timing we think is reasonable. It's not a specific action date like the PDUFA dates that had been set in the past. So listen. We will continue to monitor it as the process continues to move along.

Speaker 5

But the rate limiting factor, listen as we understand it is the agency's review of the tofacitinib oral surveillance data. And I think once that is completed, we would be able to move look forward with good speed with our review. But there are no additional data listen from a safety perspective or no other substantial analysis that the agency is waiting on for us. We provided our updated benefit risk listen quite some time ago as we announced publicly, and the agency has not requested any additional data. So it's really that review of the listen to the oral surveillance that's gating as we understand it.

Speaker 5

With respect to an advisory panel, the agency always has the authority to call 1 listen if they desire to have one. But what I would say is if they were planning on having an advisory committee, I would expect them to already be preparing for that listen and have that process in motion and we would know that, and there's no indication that that is underway at this time. Great.

Speaker 4

And I'll take the UBRELVI question. As I mentioned, we're very, very pleased with UBRELVI and really our overall migraine listen to the portfolio that we're rapidly developing here. To give you some sense, it's quite remarkable. I mean, if you look at the total listen to oral CGRP category. So that's us and the competitor.

Speaker 4

It's about 18% of all new prescriptions and it continues to grow very, very quickly. So again, it shows you how hard patients and physicians are looking for the adoption of these particular agents, listen even though you have to step through a triptan, in some cases to triptan. So the market demand is very, very substantial. When we look to the overall performance, listen. We can see that roughly the 2 agents are sort of splitting the acute indication.

Speaker 4

Some of the more weeklies are now being a little listen only to the new preventative episodic approval from Nurtec. But nonetheless, I think that's a small piece of the story. Listen when we sort of peel out some of their preventative new preventative scripts, we still have the leadership position for the acute market. Listen. But I really think the bigger picture is how fast that segment will expand over time and we anticipate that we'll continue to lead that based on UBAROVI's overall listen to the profile.

Speaker 4

Our overall access dynamics are quite good. So we really have roughly a 90 listen to the next question and answer session. Again, some of that access is demands a step through a triptan. But overall, when you look at how fast that look at the categories going. We don't really anticipate that there's major new plans that we need to achieve any sort of incremental access position.

Speaker 4

And so basically, our commercial strategy continues to be how hard can we drive this acute segment and lead that listen to the Q3 of 2019. And as I mentioned in my prepared remarks, anticipating the arrival in the late Q3 for atogepant, which has just a look spectacular profile for episodic migraine. So thank you.

Speaker 15

Thanks, Chad.

Speaker 5

Thank you.

Speaker 9

Listen. Operator, next question please.

Operator

Our next question is from Tim Anderson with Wolfe Research. You may ask your question.

Speaker 8

Thank you. Listen. It's well known that AbbVie rebates heavily on HUMIRA in the U. S. So in biosimilars launch, won't you potentially have room to pull back on those rebates, which could basically be a meaningful offset to lost HUMIRA volume.

Speaker 8

It seems like it could end up being in the 1,000,000,000 of dollars that you could pull back listen and I realize there's a RINVOC and SKYRIZI dynamic to consider. And related to that line of questioning, how does the prospect of listen interchangeability biosimilars impact your thinking on this front. If interchangeable generics are allowed or not allowed, how does that impact what listen to the rebate dollars. And then second question, a quick one, just the range of outcomes for when IMBRUVICA listen to the U. S.

Speaker 8

This is in the realm of possibilities that AbbVie enters into settlement agreements with legal challengers

Speaker 2

listen to that. Hi, Tim. It's Rick. So I'll cover the first two questions that you have there.

Speaker 13

Yes. I would say, let

Speaker 2

me start with interchangeability. We've outlined now over the last year or 2, I think pretty listen specifically what we view the biosimilar impact in the U. S. To be and we are assuming that there will be 2 interchangeable biosimilars and that's in the thought process of the erosion models that we have described listen many, many times now. So we are assuming there will be interchangeability.

Speaker 2

We're certainly not in to the position where we're going to talk about what we're going to do from the standpoint of rebates. We've always competed look very effectively in these markets. Certainly, the focus for us going forward is the next generation assets, listen to SkyRISI and RINVOK and you can see those two assets this year will do $4,600,000,000 so call it $5,000,000,000 listen. They're rapidly growing, and they're doing exactly what we had hoped they would do. They have higher levels of efficacy, listen and they are ramping dramatically and they will buffer the impact of biosimilar impact in the U.

Speaker 2

S. Listen. So what I'd say is the strategy is going exactly the way we had hoped it would go. Listen

Speaker 3

to the full year.

Speaker 2

We'll fill out the

Speaker 3

range of indications on SKYRIZI

Speaker 2

and RINVOT and continue to drive those assets into the marketplace effectively.

Speaker 3

Hi, this is Laura Schumacher. Listen to our IMBRUVICA composition of matter patent expires in May of 2028, assuming that we get the pediatric extension. Listen. We do have later expiring IP covering methods of use, formulations, crystal forms and the like. Listen.

Speaker 3

Our long range plan currently assumes the loss of exclusivity in the U. S. In May of 2028 when the composition of matter patent expires. Listen. There is litigation ongoing with 1 remaining ANDA filer and we're awaiting a decision on that.

Speaker 9

Listen. Thank you. Okay.

Speaker 2

Thank you.

Speaker 9

Thank you, Tim. Operator, next question please.

Operator

Listen. Thank you. Our next question is from Matthew Harrison with Morgan Stanley. You may ask your question.

Speaker 16

Great. Good morning. Thanks for taking the question. Just a follow-up question on CF for you. I guess, first, two parts here.

Speaker 16

First, Are you confident that you have a potentiator that's active and improved versus the Galapagos compound? Because I think we've seen a lot of listen to the questions. And then, second, I know you talked about FEV1. Have you looked at sweat chloride at all? Obviously, you need a larger patient sample size to get a good directional view on FEV1.

Speaker 16

I'm wondering if you look listen to the small patient numbers on sweat chloride. Thanks.

Speaker 5

So this is Mike. I'll take that. With respect to the potentiator, we are convinced that we have a listen to the potential of the potential of the potential of the potential of the potential of the potential of the potential of the potential of the potential of the potential of the

Speaker 3

potential of the potential of

Speaker 5

the potential of the potential of the listen. We think that, that potentiator, it has clear signs of activity. We think the listen to the Q1 Director is very good and probably best in class based on the data that we have seen that were generated listen earlier in the collaboration, we thought that the principal piece that was missing was that C2 and we think we have a good one. With respect listen to the endpoints. While it does take a larger sample size to look at FEV1, we feel like FEV1 is what really matters here.

Speaker 5

That's what's going to translate into clinical benefit listen to the patients and so our proof of concept study will show us FEV1 and that's the primary measure that we are going to use determine whether to advance the triple or not.

Speaker 9

Thank you, Matthew. Operator, next question please.

Operator

Listen. Thank you. Our next question is from Steve Scala with Cowen. Your line is open, sir.

Speaker 17

Thank you. A couple of questions. Listen. Many of the questions so far suggest concerns around Renbok, but I'm wondering if this could all turn into be a positive. Listen to the question.

Speaker 17

So to what extent do you believe RINVOC prescribing might be being held back by competitor product concerns? Listen. So once those concerns are resolved and or RINVOC emerges unscathed, if it does, RINVOC could even do better and we could be looking at listen to the sharp acceleration in share gains and prescription trends in Q4. So that's the first question. Listen.

Speaker 17

And secondly, on Humira contract renewals that will be signed in coming months for 2022, listen to the question and answer session. What is the typical duration of those contracts? Are they typically 12 months, 24 months, 36 months? If you can give us an idea of that, that would be helpful. Thank you.

Speaker 4

Listen. Yes, it's a very good question and it's a question we thought a lot about. Let me give you some perspective on

Speaker 17

listen to the Q1 of 2019. So if you look at

Speaker 4

our, let's say, our demand performance, and I think I mentioned in my prepared remark, we've been very consistent about listen to the Q1 of 2019. We expect to see a

Speaker 2

significant increase in the Q1 of 2019.

Speaker 4

We expect to see a significant increase in the listen to the Q1 of 2019. So we're very, very stable. And I do believe that there is some overhang listen to the TNFs, really our own product HUMIRA. Listen. So it's not outside of the realm of possibility as this resolves and really largely as you probably heard or seen, Xeljanz has lost in place share over that period.

Speaker 4

So I do believe there's a little overhang in certain listen to the next question. Probably significant segments of rheumatology. So we are anxiously awaiting the resolution here of oral surveillance, which obviously listen to the regulatory submissions, but it's not outside of the realm of possibility given the very listen to significant differentiated data that we have in our packages, that we could see an acceleration as things resolve. So we're going to anxiously be monitoring and certainly be prepared to anticipate any outcome there.

Speaker 2

And Steve, this is Rick. On the contracting question, listen. It varies quite a bit based on product and by managed care organization, but I'd say so it can be some of them can be as short as 12 months. It's probably more common to be in the 24 month range from a contracting standpoint.

Speaker 18

Listen. Thank you.

Speaker 9

Thanks, Steve. Operator, next question please.

Operator

Thank you. Our next question is from Chris Raymond with Piper Sandler. Please ask your question.

Speaker 18

Listen. Thanks. Just on the A beta program, I know you answered a few questions, but I think I heard you describe the product that you're targeting list the plaques and not the soluble forms of A beta. Just kind of maybe if you wondering if you can give a little bit more color on the driver that of going forward with that. Do you guys listen.

Speaker 18

Does your science sort of tell you that amyloid beta oligomers, for example, are not a driver of the disease? Or is this more of a decision that's driven listen by the regulatory precedence of approving targeting the abeta plaques. And then maybe also if you can give a little more detail on listen to the molecule, is it likely an IV or possibly subcu delivered antibody? Thanks.

Speaker 5

So this is Mike. I'll take that. With respect to the focus on plaque, I think when one looks at all of the data, you can include that if you can reduce plaque rapidly from that point forward, you can see a benefit. So in other words, getting the majority of patients listen to a level where they are amyloid negative by pet, so below 20 centiloids and doing that rapidly is what's required to see a benefit emerge over time. And part of the importance of speed is that you're not going to see that benefit until listen to that level.

Speaker 5

So if you spend the entire period of a trial getting to that level, you don't then have an opportunity within that trial see an improvement in cognition. And of course, for patients, if you don't get to that level fast enough, they're not going to drive benefit for a period of listen to the call for questions. So that's our focus listen. With respect to different components and the role of oligomers, I think it's Hard to tease that apart right now. What we know from the data is what I said that getting patients to amyloid negativity, the reducing plaque listen to the to that question.

Speaker 5

It's going to relate to ultimately the delivered dose and then listen to those forms that can be delivered. So for example, there are on body injectors and other things that can deliver more than the traditional 1 or 2 listen to the FDA. So there are approaches that listen to the BIV or subcu, but I think it's a little bit early to make predictions on how that will all play out.

Speaker 16

Thank you.

Speaker 9

Thanks, Chris. Operator, next question please.

Operator

Thank you. It comes from Luisa Hector with Berenberg. Your line is open.

Speaker 15

Listen. Hello. Thank you for taking my questions. Sorry, going back to Rimboc again, but I just wanted to check that the approval listen to the pending indications, isn't a particular gating item for your filing in UC. Listen.

Speaker 15

And then I see that you haven't changed your guidance of IMbVoq for this year. And I know previously you've stated listen to the AD would only ever be a small contribution this year. But rather than sales, I just wonder whether there's any particular savings on your launch costs listen this year due to the delay. And then maybe on TMB383, again, listen. I think I've understood this is now 100% belonging to you.

Speaker 15

So just to check, no impact from the Amgen acquisition. And then when might listen to the Q1. We see a Phase 2 start. It looks like you have a dose data, very compelling. So how soon could we be looking out for that listen to the results starting data.

Speaker 15

Thank you.

Speaker 5

Okay. This is Mike. I'll start with the rainbow question and pass it to Rob and then I'll come back for the 383 question. Listen. With respect to the UC filing, the UC filing is not dependent on the approvals in the other indications.

Speaker 5

Listen. And obviously, the timing of review of the UC filing would carry it out to a point, where those matters would,

Speaker 6

listen. Yes. And then on your question regarding the guidance for RINVOX, so you're right, we did give guidance of 1,700,000,000 listen to the Q1 of 2019. We said that would be a minor contribution. Think of it in the couple of $100,000,000 range.

Speaker 6

But given the strong performance out of the RA indication, we've maintained that listen to the guidance despite the fact that those approvals are delayed. There is some level of savings in terms of SG and A related to the approvals being delayed. Listen but at the same time we're investing the business. You look at what we're doing with aesthetics. Obviously, in other parts of the Allergan business there's opportunity to invest more broadly.

Speaker 6

So listen to the Q1. Overall, SG and A is up because we are investing for long term growth, but

Speaker 5

there is some level of savings associated with the rainbow delays. With respect to 383, the BCMA CD3 bispecific. You're correct, there is no impact of the Amgen acquisition of Teneo Bio on that. Listen to the asset would be ours and would be unencumbered by anything related to the Amgen acquisition. In terms of Phase 2 timing, listen.

Speaker 5

We plan to move forward very rapidly, not only with Phase 2, but with Phase 3 studies with this asset. We think the data that have been generated listen to our very strong, very high levels of response, good levels at the BGPR or better threshold listen to the FDA's FDA approval as well and a profile that would fit well with combination therapy and move to earlier lines of therapy. Listen.

Speaker 9

Thanks, Louisa. Listen. Operator, next question please.

Operator

Our next question will come from Daniel Bessby with RBC Capital Markets. You may proceed with your question.

Speaker 19

Good morning. I've got two questions. First, a bigger picture question on SKYRIZIYA and RINVOQ. Listen. You've guided the peak sales for both products in the early 2030s.

Speaker 6

There's been a lot of

Speaker 19

focus on near term regulatory hurdles, particularly for RenVoc, listen. There's also a lot that could happen competitively between now and then. So with that said, what do you view as the biggest potential longer term competitive threats for both of those drugs, listen particularly given the ongoing emergence and maturation of new drug modalities. And second, can you talk a little bit about listen to the assumptions you've built into overall guidance relating to the Delta variant and whether that's changed at all the way you think about the second half recovery? Thank you.

Speaker 2

We go through a fairly rigorous, in fact, I'd say a very rigorous long range planning process where we evaluate what we think look at the competitive alternatives might be and the profile of our assets versus other assets. Listen. And I would say, as we look at RINBOC and SKYRIZI and the clinical data that has been generated, Certainly achieving or exceeding the expectations that we had for those assets. I don't see anything on the horizon that would make it in listen or even longer term guidance out to typically do a 10 year long range planning process. Listen.

Speaker 2

So yes, there are certainly many, many modalities that are available today across many of these therapeutic areas. Listen. It's having the right kind of asset, it has the right kind of clinical performance and then everything else that wraps around that listen to market access and all the other things you have to be effective at in order to achieve the level of performance listen to the details that these assets are achieving. And so bottom line is, I think we feel very confident in our assumptions here. As it relates to the Delta variant, I think as we look at the guidance that we are providing in the second half, listen.

Speaker 2

It certainly is reflective of what we assume. We don't assume dramatic changes listen in the U. S. Or other major markets around the world from where we are today. We're not assuming major levels of recovery listen in certain markets either that are currently in lockdowns like Australia as an example or in many of the Asian markets listen outside of China and Singapore.

Speaker 2

So I think we've properly represented it. I think the healthcare system in the U. S. In particular, listen. I think the experience that we had last year, I think tells us that the healthcare system can much better treat these patients listen and we're not assuming that we see anything that would be significant in a shift in the U.

Speaker 2

S. From a lockdown standpoint.

Speaker 9

Listen. Thanks, Daniel. Operator, we have time for one final question.

Operator

It will come from Gary Nachman with BMO Capital Markets. Your line is open,

Speaker 20

Hi, good morning and thanks for squeezing me in. Sorry, but one more on RINVOG first. Curious why you think Europe doesn't seem listen as concerned with the JAK class the way the FDA has been since you got the positive opinion on atopic derm for both doses there And how you see uptake in Europe versus the U. S. Overall?

Speaker 20

Is there a difference in perception you think in those regions with the class? Listen. And then regarding VRAYLAR for MDD, how are the Phase 3 studies gone overall? Did you change anything with listen to enrollment numbers or sites during the course of the pandemic since these Phase III data are coming soon. And have you done any more work sizing up the potential market listen to the where you think it would be used most for MDD, what types of patients?

Speaker 20

Thank you.

Speaker 5

Listen. So this is Mike. I'll start and then I'll pass it over to Jeff for some initial additional comments. With respect to RINVOC listen and the regulatory environment and the prescriber perception, prescriber environment between Europe and the U. S, we do see differences.

Speaker 5

Listen and the European authorities and the European prescribing base seems to place less emphasis listen to the molecules that generated the data, than the EU has listen. Why that is? I can't give you a single reason other than these are both very large competent jurisdictions that have come to their own impressions listen to the data and those impressions have differed somewhat. As you've said, for atopic derm, we got the positive opinion from the CHMP listen for both the 15 30 milligram doses. We think the data are very supportive of that listen to the decision, and we look forward to launching that indication in Europe.

Speaker 5

And we think it's going to be listen to the U. S. When we do get to approval. Listen. With respect to uptake in Europe, Jeff, I don't know if you want to comment.

Speaker 4

Yes. As I mentioned in my remarks, the uptake on RINVOC in many major markets listen to the question and answer session. Now as you know, waiting for reimbursement takes a little bit more time than the U. S. But as I highlighted, listen.

Speaker 4

We have in play leadership and this is including the TNFs, the biosimilars in Germany, France, Canada, for example. Listen. So it's quite strong. I think another point that I'd like to make and we certainly see it in some of the early launch countries with PSA and listen. There appears to be a synergistic effect, which makes some sense from a commercial standpoint.

Speaker 4

As countries like Germany start to introduce PSA listen to A and AS, the entire RINVOK molecule starts to accelerate and move faster. And so again, given the last question I answered, listen. We're anxiously awaiting the approval of those extra room indications there. So it's quite strong. Listen.

Speaker 4

And as I highlighted again and Mike mentioned, our label here in atopic derm is going to look quite strong in the listen to the European markets. Mike, maybe you can hit on MDD and then I'll address the market structure there.

Speaker 5

With respect to Vraylar and MDD, listen. We did a deep dive on the Phase 3 studies shortly after closing the acquisition of Allergan. Listen. And what I would say is we found that the studies were very well designed. We were comfortable with important considerations like patient selection, listen to the selection of sites that we believe would give quality data.

Speaker 5

We looked at the blinded aggregate characteristics look at the baseline characteristics and you don't know who's on active or placebo, but you can just see if you're enrolling the right patient population listen and we believe we were. All of the measures are designed and seem to be behaving appropriately. And so we feel good about the design characteristics of that listen to the study and we did not feel that it was necessary to make any changes, but we did do that deep dive to be sure of that. As I said, what we found was in fact reassuring. Listen.

Speaker 5

With respect to the market opportunity, I'll just make a couple of comments and I'll hand it off to Jeff for some more detail. But what I would say is listen to your depression, obviously, is a substantial indication and it's one that is very difficult to treat with existing agents. About listen to the FDA. 50% of patients don't achieve adequate control with monotherapy with frontline agents like SSRIs or SNRIs. Listen.

Speaker 5

And so there is an important opportunity for adjunctive therapy. And obviously, this is an adjunctive MDD indication. So that would be the population that we would be looking at. Jeff, do you want to comment in more detail on that? Yes.

Speaker 4

I mean, if we look at the market structure, obviously, you have schizophrenia, which is a relatively modest listen to the market and we have a good growing position there with our existing indication. And then you have the prescriptions and really listen to the different bipolar segments. And what I would say about not the big depression market, but the adjunctive MDD market that Mike spoke about, listen. It's about the same size in terms of a prescription value to the bipolar segment. Listen.

Speaker 4

Adjunctive MDD, if the studies were to progress as we see is really gives us a chance to access a market that's equally sized to the one that we're competing in today. So it's quite attractive as we continue to look for the final readout of those trials.

Speaker 1

Listen. Thanks, Gary. That concludes today's conference call. Listen to a replay of the call, please visit our website at investors. Abbvie.com.

Speaker 1

Thanks again for joining us.

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Earnings Conference Call
AbbVie Q2 2021
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