AbbVie Reports Third-Quarter 2023 Financial Results
AbbVie (NYSE:ABBV) announced financial results for the third quarter ended September 30, 2023.
“We delivered another quarter of outstanding results driven by accelerating performance across our non-Humira growth platform, which is demonstrating double-digit growth,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. “Based upon the strength and momentum of our business, we are once again raising our full-year 2023 guidance as well as our floor EPS outlook for next year. We are also increasing our quarterly dividend, underscoring our confidence in AbbVie’s long-term outlook.”
Third-Quarter Results
Worldwide net revenues were $13.927 billion, a decrease of 6.0 percent on a reported basis, or 5.8 percent on an operational basis.
Global net revenues from the immunology portfolio were $6.783 billion, a decrease of 11.3 percent.
Global Humira net revenues of $3.547 billion decreased 36.2 percent. U.S. Humira net revenues were $3.020 billion, a decrease of 39.1 percent. Internationally, Humira net revenues were $527 million, a decrease of 12.6 percent on a reported basis, or 12.2 percent on an operational basis.
Global Skyrizi net revenues were $2.126 billion, an increase of 52.1 percent on a reported basis, or 51.9 percent on an operational basis.
Global Rinvoq net revenues were $1.110 billion, an increase of 59.8 percent on a reported basis, or 59.6 percent on an operational basis.
Global net revenues from the oncology portfolio were $1.512 billion, a decrease of 8.4 percent on a reported basis, or 8.6 percent on an operational basis.
Global Imbruvica net revenues were $908 million, a decrease of 20.0 percent, with U.S. net revenues of $678 million and international profit sharing of $230 million.
Global Venclexta net revenues were $590 million, an increase of 14.6 percent on a reported basis, or 14.0 percent on an operational basis.
Global net revenues from the neuroscience portfolio were $2.043 billion, an increase of 22.1 percent on a reported basis, or 22.0 percent on an operational basis.
Global Botox Therapeutic net revenues were $748 million, an increase of 7.1 percent on a reported basis, or 7.4 percent on an operational basis.
Global Vraylar net revenues were $751 million, an increase of 35.4 percent.
Global Ubrelvy net revenues were $233 million, an increase of 45.6 percent.
Global Qulipta net revenues were $132 million.
Global net revenues from the aesthetics portfolio were $1.239 billion, a decrease of 4.7 percent on a reported basis, or 4.0 percent on an operational basis.
Global Botox Cosmetic net revenues were $620 million, a decrease of 2.7 percent on a reported basis, or 1.7 percent on an operational basis.
Global Juvederm net revenues were $321 million, a decrease of 8.6 percent on a reported basis, or 7.9 percent on an operational basis.
On a GAAP basis, the gross margin ratio in the third quarter was 53.4 percent. The adjusted gross margin ratio was 83.5 percent.
On a GAAP basis, selling, general and administrative (SG&A) expense was 24.2 percent of net revenues. The adjusted SG&A expense was 23.9 percent of net revenues.
Research and development (R&D) expense on a GAAP and adjusted basis was 12.4 percent of net revenues, reflecting funding actions supporting all stages of our pipeline.
Acquired IPR&D and milestones expense was 0.5 percent of net revenues.
On a GAAP basis, the operating margin in the third quarter was 16.4 percent. The adjusted operating margin was 46.7 percent.
Net interest expense was $398 million.
On a GAAP basis, the tax rate in the quarter was 8.8 percent. The adjusted tax rate was 15.7 percent.
Diluted EPS in the third quarter was $1.00 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $2.95. These results include an unfavorable impact of $0.04 per share related to acquired IPR&D and milestones expense.
Note: “Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
Recent Events
AbbVie announced that it submitted applications for a new indication to the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) for Skyrizi (risankizumab) for the treatment of adult patients with moderately to severely active ulcerative colitis (UC). The submissions are supported by two Phase 3 clinical trials demonstrating Skyrizi achieved the primary endpoint of clinical remission (per Adapted Mayo Score) and key secondary endpoints as an induction and maintenance treatment. Skyrizi is part of a collaboration between Boehringer Ingelheim and AbbVie, with AbbVie leading development and commercialization globally.
AbbVie announced positive topline results from SEQUENCE, a Phase 3 study evaluating Skyrizi versus Stelara (ustekinumab) in patients with moderately to severely active Crohn’s disease (CD) who have failed one or more anti-TNF therapies. In the study, Skyrizi met both primary endpoints (non-inferiority for clinical remission per CDAI at week 24 and superiority of endoscopic remission at week 48) versus Stelara. All secondary endpoints in the trial achieved statistical significance for superiority versus Stelara. Safety results were consistent with the overall safety profile of Skyrizi, with no new safety risks identified.
AbbVie announced that its Phase 2b study evaluating Rinvoq (upadacitinib) in adults with non-segmental vitiligo (NSV) met the primary endpoint of percent change from baseline in the Facial Vitiligo Area Scoring Index (F-VASI) at week 24 with the 11 mg and 22 mg doses versus placebo. The percent reduction from baseline in F-VASI at week 52 was numerically greater than results at week 24 for all Rinvoq doses. No new safety signals were identified beyond the known safety profile for Rinvoq. Based on these data, AbbVie is advancing its clinical program of Rinvoq in vitiligo to Phase 3.
At the United European Gastroenterology (UEG) Week 2023, AbbVie shared 23 abstracts, including 11 oral presentations and 12 poster presentations, spanning research on Skyrizi and Rinvoq in both CD and UC. Highlights included late-breaking data from the head-to-head Phase 3 SEQUENCE study evaluating Skyrizi versus Stelara in CD, primary efficacy and safety results from the Phase 3 INSPIRE induction study for Skyrizi in UC, as well as analyses on clinical and endoscopic outcomes from AbbVie’s maintenance trials for Skyrizi and Rinvoq in CD and for Rinvoq in UC.
At the European Academy of Dermatology and Venereology (EADV) Congress, AbbVie announced new data analyses from the Measure Up 1, Measure Up 2 and AD Up Phase 3 studies that further demonstrated the long-term efficacy and safety profile of Rinvoq among adults and adolescents 12 years and older with moderate to severe atopic dermatitis (AD). Across all 3 studies, response rates for EASI 75 and vIGA-AD 0/1 (co-primary endpoints) and for EASI 90 and WP-NRS 0/1 at week 16 were sustained through week 140 among patients treated with Rinvoq. Safety results were consistent with the known safety profile of Rinvoq, with no new safety signals observed.
AbbVie announced that the European Commission (EC) granted conditional marketing authorization for Tepkinly (epcoritamab) as a monotherapy for the treatment of adult patients with relapsed or refractory (r/r) diffuse large B-cell lymphoma (DLBCL) after two or more lines of systemic therapy. Tepkinly is the first and only subcutaneous T-cell engaging bispecific antibody approved for the treatment of this patient population in the European Union (EU). This conditional marketing authorization approval represents AbbVie’s second approved hematological cancer treatment in the EU and is supported by data from the pivotal Phase 1/2 EPCORE NHL-1 clinical trial. Tepkinly is being co-developed by AbbVie and Genmab.
In August 2023, as part of Inflation Reduction Act (IRA) of 2022, the company’s oncology product Imbruvica, sold in the U.S., was included on the list of products selected for price negotiation by the Centers for Medicare & Medicaid Services (CMS). The selection contributed to a significant decrease in the estimated future cash flows for the product and represented a triggering event which required the company to evaluate the underlying definite lived-intangible asset for impairment. The company utilized a discounted cash flow analysis to estimate the fair value of the intangible asset resulting in a partial impairment of both the gross and net carrying amount. Based on the revised cash flows, the company recorded a pre-tax impairment charge of $2.1 billion to cost of products sold in the condensed consolidated statement of earnings for the third quarter of 2023. The remaining intangible asset carrying value related to Imbruvica in the U.S. totaled $1.8 billion as of September 30, 2023.
AbbVie announced results from CANOVA, a Phase 3 study evaluating Venclexta (venetoclax) plus dexamethasone (VenDex) for patients with t(11;14)-positive r/r multiple myeloma (MM) who received two or more prior treatments. Data did not demonstrate that the treatment combination significantly improved progression-free survival (PFS), the primary endpoint of the trial. Patients receiving VenDex showed improvement in median PFS of 9.9 months compared to 5.8 months with the combination of study comparator pomalidomide and dexamethasone (PomDex); however, the results did not reach statistical significance. Results were presented at the International Myeloma Society (IMS) Annual Meeting and AbbVie will discuss the data with health authorities to further understand the potential of venetoclax as a biomarker-driven therapy in MM. Venclexta is being developed by AbbVie and Roche. It is jointly commercialized by AbbVie and Genentech, a member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.
AbbVie announced that the (EC) approved Aquipta (atogepant) for the prophylaxis of migraine in adults who have four or more migraine days per month. The approval makes Aquipta the only once-daily oral calcitonin gene-related peptide (CGRP) receptor antagonist (gepant) treatment in the EU for the preventive treatment of both chronic and episodic migraine. The approval is based on two pivotal Phase 3 studies that demonstrated statistically significant reduction in mean monthly migraine days with Aquipta compared to placebo in adult patients with both chronic and episodic migraine.
Allergan Aesthetics announced positive topline results from the second of three Phase 3 clinical studies evaluating Botox Cosmetic (onabotulinumtoxinA) for the treatment of moderate to severe platysma prominence associated with platysma muscle activity. All primary and secondary endpoints were met for this study and results were consistent with findings from the first Phase 3 study. Results support Botox Cosmetic as a potential treatment option for moderate to severe platysma prominence and data will be included as part of an upcoming FDA regulatory submission expected near the end of the year. If approved, Botox Cosmetic will be the first and only neurotoxin for this indication.
Allergan Aesthetics announced positive topline results from two pivotal Phase 3 clinical studies evaluating trenibotulinumtoxinE (BoNT/E) for the treatment of moderate to severe glabellar lines. All primary and secondary endpoints were met for both studies and results support trenibotulinumtoxinE as a novel botulinum neurotoxin serotype E characterized by a rapid onset of action as early as 8 hours after administration and short duration of effect within 2-3 weeks.
AbbVie announced that it exercised its exclusive right to acquire of Mitokinin, a discovery-stage biotechnology company developing a potentially first-in-class disease-modifying treatment for Parkinson’s Disease (PD). Mitokinin’s lead compound, a selective PINK1 activator, is designed to address mitochondrial dysfunction that is believed to be a major contributing factor to PD pathogenesis and progression.
Full-Year 2023 Outlook
AbbVie is raising its adjusted diluted EPS guidance for the full year 2023 from $10.86 – $11.06 to $11.19 – $11.23, which includes an unfavorable impact of $0.27 per share related to acquired IPR&D and milestones expense incurred year-to-date through the third quarter 2023. The company’s 2023 adjusted diluted EPS guidance excludes any impact from acquired IPR&D and milestones that may be incurred beyond the third quarter of 2023, as both cannot be reliably forecasted.
AbbVie Raises 2024 EPS Guidance Floor
AbbVie is raising its adjusted diluted EPS guidance floor for the full year 2024 from $10.70 to $11.00, which excludes any impact from acquired IPR&D and milestones, as both cannot be reliably forecasted. This is an update to guidance that was initially issued in February 2023 as part of AbbVie’s fourth quarter 2022 earnings call. As a result of this update, AbbVie does not expect adjusted diluted EPS for full year 2024 to be below $11.00 per share. The company will issue its formal 2024 adjusted diluted EPS guidance range in conjunction with fourth quarter 2023 results.
Company Declares Dividend Increase of 4.7 Percent
AbbVie is announcing today that its board of directors declared an increase in the company’s quarterly cash dividend from $1.48 per share to $1.55 per share beginning with the dividend payable on February 15, 2024 to shareholders of record as of January 16, 2024. This reflects an increase of approximately 4.7 percent, continuing AbbVie’s strong commitment to returning cash to shareholders through a growing dividend. Since the company’s inception in 2013, AbbVie has increased its quarterly dividend by more than 285 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About AbbVie
AbbVie’s mission is to discover and deliver innovative medicines that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on people’s lives across several key therapeutic areas: immunology, oncology, neuroscience and eye care – and products and services across our Allergan Aesthetics portfolio. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on X (formerly Twitter), Facebook, Instagram, YouTube or LinkedIn.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central Time to discuss our third-quarter performance. The call will be webcast through AbbVie’s Investor Relations website at investors.abbvie.com. An archived edition of the call will be available after 11:00 a.m. Central Time.
Non-GAAP Financial Results
Financial results for 2023 and 2022 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. AbbVie’s management believes non-GAAP financial measures provide useful information to investors regarding AbbVie’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.
Forward-Looking Statements
Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project” and similar expressions and uses of future or conditional verbs, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Such risks and uncertainties include, but are not limited to challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie’s operations is set forth in Item 1A, “Risk Factors,” of AbbVie’s 2022 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission, as updated by its Quarterly Reports on Form 10-Q and in other documents that AbbVie subsequently files with the Securities and Exchange Commission that update, supplement or supersede such information. AbbVie undertakes no obligation, and specifically declines, to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
AbbVie Inc.
Key Product Revenues
Quarter Ended September 30, 2023
(Unaudited)
% Change vs. 3Q22
Net Revenues (in millions)
Reported
Operationala
U.S.
Int’l.
Total
U.S.
Int’l.
Total
Int’l.
Total
NET REVENUES
$10,852
$3,075
$13,927
(7.7) %
0.8 %
(6.0) %
1.4 %
(5.8) %
Immunology
5,696
1,087
6,783
(14.7)
12.1
(11.3)
11.9
(11.3)
Humira
3,020
527
3,547
(39.1)
(12.6)
(36.2)
(12.2)
(36.2)
Skyrizi
1,875
251
2,126
53.5
42.5
52.1
40.7
51.9
Rinvoq
801
309
1,110
59.0
61.8
59.8
61.2
59.6
Oncology
973
539
1,512
(12.3)
(0.4)
(8.4)
(1.0)
(8.6)
Imbruvicab
678
230
908
(20.2)
(19.6)
(20.0)
(19.6)
(20.0)
Venclexta
281
309
590
8.1
21.1
14.6
19.9
14.0
Epkinlyc
14
—
14
n/m
n/m
n/m
n/m
n/m
Aesthetics
759
480
1,239
—
(11.4)
(4.7)
(9.7)
(4.0)
Botox Cosmetic
388
232
620
5.0
(13.3)
(2.7)
(10.9)
(1.7)
Juvederm Collection
116
205
321
(6.4)
(9.8)
(8.6)
(8.7)
(7.9)
Other Aesthetics
255
43
298
(4.0)
(8.1)
(4.6)
(7.0)
(4.4)
Neuroscience
1,817
226
2,043
24.0
8.9
22.1
8.4
22.0
Botox Therapeutic
626
122
748
7.2
6.5
7.1
8.6
7.4
Vraylar
750
1
751
35.2
>100.0
35.4
>100.0
35.4
Duodopa
25
93
118
10.6
6.6
7.4
2.3
4.0
Ubrelvy
230
3
233
43.7
>100.0
45.6
>100.0
45.6
Qulipta
131
1
132
>100.0
n/m
>100.0
n/m
>100.0
Other Neuroscience
55
6
61
(31.9)
6.2
(29.9)
9.6
(29.7)
Eye Care
310
295
605
(14.0)
13.1
(2.7)
13.9
(2.4)
Ozurdex
34
86
120
(4.5)
22.3
13.2
21.7
12.8
Lumigan/Ganfort
28
63
91
(53.0)
2.7
(24.8)
1.4
(25.5)
Alphagan/Combigan
30
40
70
(16.0)
10.1
(3.1)
17.3
0.4
Restasis
104
13
117
(20.7)
35.0
(17.0)
42.1
(16.5)
Other Eye Care
114
93
207
16.3
11.9
14.2
12.0
14.2
Other Key Products
751
212
963
(4.6)
4.4
(2.8)
4.9
(2.7)
Mavyret
167
203
370
(12.3)
5.2
(3.5)
5.8
(3.2)
Creon
305
—
305
(9.1)
n/m
(9.1)
n/m
(9.1)
Linzess/Constella
279
9
288
6.8
(11.1)
6.2
(13.0)
6.1
a
“Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
b
Reflects profit sharing for Imbruvica international revenues.
c
Reflects profit sharing for Epkinly U.S. revenues.
n/m = not meaningful
AbbVie Inc.
Key Product Revenues
Nine Months Ended September 30, 2023
(Unaudited)
% Change vs. 9M22
Net Revenues (in millions)
Reported
Operationala
U.S.
Int’l.
Total
U.S.
Int’l.
Total
Int’l.
Total
NET REVENUES
$30,773
$9,244
$40,017
(8.2) %
(1.8) %
(6.8) %
1.6 %
(6.0) %
Immunology
15,963
3,220
19,183
(10.9)
4.6
(8.6)
8.1
(8.1)
Humira
9,420
1,680
11,100
(30.8)
(17.9)
(29.1)
(14.8)
(28.7)
Skyrizi
4,648
721
5,369
50.9
41.8
49.6
45.5
50.1
Rinvoq
1,895
819
2,714
54.4
56.1
54.9
61.0
56.4
Oncology
2,807
1,599
4,406
(15.6)
(1.3)
(10.9)
0.2
(10.4)
Imbruvicab
1,982
711
2,693
(23.4)
(18.0)
(22.0)
(18.0)
(22.0)
Venclexta
811
888
1,699
9.4
18.1
13.8
21.4
15.5
Epkinlyc
14
—
14
n/m
n/m
n/m
n/m
n/m
Aesthetics
2,365
1,558
3,923
(4.9)
—
(3.0)
5.3
(1.0)
Botox Cosmetic
1,217
747
1,964
(1.1)
0.7
(0.4)
6.0
1.6
Juvederm Collection
363
681
1,044
(13.3)
(0.8)
(5.6)
4.5
(2.3)
Other Aesthetics
785
130
915
(6.3)
0.5
(5.4)
5.4
(4.7)
Neuroscience
4,929
694
5,623
18.0
7.9
16.7
11.7
17.2
Botox Therapeutic
1,827
388
2,215
11.3
10.9
11.3
16.6
12.3
Vraylar
1,967
3
1,970
33.6
>100.0
33.7
>100.0
33.7
Duodopa
74
279
353
2.8
—
0.6
1.1
1.5
Ubrelvy
574
7
581
18.8
>100.0
20.3
>100.0
20.3
Qulipta
292
2
294
>100.0
n/m
>100.0
n/m
>100.0
Other Neuroscience
195
15
210
(51.3)
6.4
(49.3)
11.8
(49.1)
Eye Care
938
892
1,830
(25.8)
5.5
(13.3)
9.0
(11.9)
Ozurdex
107
247
354
2.6
13.1
9.7
16.1
11.7
Lumigan/Ganfort
142
198
340
(23.6)
(3.1)
(12.9)
(0.9)
(11.8)
Alphagan/Combigan
90
116
206
(43.5)
4.2
(24.0)
10.6
(21.4)
Restasis
265
43
308
(48.8)
14.2
(44.5)
20.1
(44.1)
Other Eye Care
334
288
622
13.0
5.1
9.2
8.6
10.9
Other Key Products
2,222
616
2,838
(1.0)
(1.2)
(1.1)
2.1
(0.4)
Mavyret
531
590
1,121
(5.6)
(1.5)
(3.5)
1.8
(1.8)
Creon
892
—
892
(5.2)
n/m
(5.2)
n/m
(5.2)
Linzess/Constella
799
26
825
7.7
7.0
7.7
9.3
7.8
a
“Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
b
Reflects profit sharing for Imbruvica international revenues.
c
Reflects profit sharing for Epkinly U.S. revenues.
n/m = not meaningful
AbbVie Inc.
Consolidated Statements of Earnings
(Unaudited)
(in millions, except per share data)
Third Quarter
Ended September 30
Nine Months
Ended September 30
2023
2022
2023
2022
Net revenues
$ 13,927
$ 14,812
$ 40,017
$ 42,933
Cost of products sold
6,485
5,022
14,711
13,244
Selling, general and administrative
3,372
3,304
9,679
11,843
Research and development
1,723
1,614
5,748
4,720
Acquired IPR&D and milestones
66
40
496
454
Other operating expense (income), net
—
229
(179)
57
Total operating costs and expenses
11,646
10,209
30,455
30,318
Operating earnings
2,281
4,603
9,562
12,615
Interest expense, net
398
497
1,306
1,568
Net foreign exchange loss
25
36
97
108
Other expense (income), net
(95)
(330)
3,121
427
Earnings before income tax expense
1,953
4,400
5,038
10,512
Income tax expense
172
448
989
1,139
Net earnings
1,781
3,952
4,049
9,373
Net earnings attributable to noncontrolling interest
3
3
8
10
Net earnings attributable to AbbVie Inc.
$ 1,778
$ 3,949
$ 4,041
$ 9,363
Diluted earnings per share attributable to AbbVie Inc.
$ 1.00
$ 2.21
$ 2.26
$ 5.24
Adjusted diluted earnings per sharea
$ 2.95
$ 3.66
$ 8.32
$ 10.18
Weighted-average diluted shares outstanding
1,771
1,776
1,772
1,777
a Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details.
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Quarter Ended September 30, 2023
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 1,953
$ 1,778
$ 1.00
Adjusted for specified items:
Intangible asset amortization
2,039
1,728
0.98
Intangible asset impairment
2,114
1,660
0.93
Acquisition and integration costs
60
54
0.03
Change in fair value of contingent consideration
8
8
—
Other
59
22
0.01
As adjusted (non-GAAP)
$ 6,233
$ 5,250
$ 2.95
a Represents net earnings attributable to AbbVie Inc.
Intangible asset impairment reflects a partial impairment charge related to the U.S. Imbruvica intangible asset acquired as part
of the 2015 acquisition of Pharmacyclics, Inc. The intangible asset impairment was triggered by selection of Imbruvica for price
negotiation as part of the IRA of 2022, which contributed to a significant decrease in the estimated future cash flows for the
product.
Reported GAAP earnings and adjusted non-GAAP earnings for the three months ended September 30, 2023 included acquired
IPR&D and milestones expense of $66 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.04 to
both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Quarter Ended September 30, 2023
(in millions)
Cost of
products
sold
SG&A
R&D
Other
expense
(income),
net
As reported (GAAP)
$ 6,485
$ 3,372
$ 1,723
$ (95)
Adjusted for specified items:
Intangible asset amortization
(2,039)
—
—
—
Intangible asset impairment
(2,114)
—
—
—
Acquisition and integration costs
(18)
(40)
(2)
—
Change in fair value of contingent consideration
—
—
—
(8)
Other
(13)
(2)
(1)
(43)
As adjusted (non-GAAP)
$ 2,301
$ 3,330
$ 1,720
$ (146)
3. The adjusted tax rate for the third quarter of 2023 was 15.7 percent, as detailed below:
Quarter Ended September 30, 2023
(dollars in millions)
Pre-tax
earnings
Income taxes
Tax rate
As reported (GAAP)
$ 1,953
$ 172
8.8 %
Specified items
4,280
808
18.9 %
As adjusted (non-GAAP)
$ 6,233
$ 980
15.7 %
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Quarter Ended September 30, 2022
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 4,400
$ 3,949
$ 2.21
Adjusted for specified items:
Intangible asset amortization
2,024
1,673
0.94
Intangible asset impairment
770
604
0.34
Acquisition and integration costs
348
348
0.20
Change in fair value of contingent consideration
(214)
(218)
(0.12)
Litigation matters
110
94
0.05
Other
58
78
0.04
As adjusted (non-GAAP)
$ 7,496
$ 6,528
$ 3.66
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs primarily reflect integration costs related to the Allergan acquisition. Other primarily
includes restructuring charges associated with streamlining global operations.
Reported GAAP earnings and adjusted non-GAAP earnings for the three months ended September 30, 2022 included acquired
IPR&D and milestones expense of $40 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.02 to
both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Quarter Ended September 30, 2022
(in millions)
Cost of
products
sold
SG&A
R&D
Other
operating
expense
(income),
net
Other
expense
(income),
net
As reported (GAAP)
$ 5,022
$ 3,304
$ 1,614
$ 229
$ (330)
Adjusted for specified items:
Intangible asset amortization
(2,024)
—
—
—
—
Intangible asset impairment
(770)
—
—
—
—
Acquisition and integration costs
(22)
(91)
(6)
(229)
—
Change in fair value of contingent consideration
—
—
—
—
214
Litigation matters
—
(110)
—
—
—
Other
(39)
(14)
(1)
—
(4)
As adjusted (non-GAAP)
$ 2,167
$ 3,089
$ 1,607
$ —
$ (120)
3. The adjusted tax rate for the third quarter of 2022 was 12.9 percent, as detailed below:
Quarter Ended September 30, 2022
(dollars in millions)
Pre-tax
earnings
Income taxes
Tax rate
As reported (GAAP)
$ 4,400
$ 448
10.2 %
Specified items
3,096
517
16.7 %
As adjusted (non-GAAP)
$ 7,496
$ 965
12.9 %
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Nine Months Ended September 30, 2023
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 5,038
$ 4,041
$ 2.26
Adjusted for specified items:
Intangible asset amortization
6,057
5,101
2.87
Intangible asset impairment
2,824
2,289
1.29
Acquisition and integration costs
38
15
0.01
Change in fair value of contingent consideration
3,432
3,348
1.88
Other
75
16
0.01
As adjusted (non-GAAP)
$ 17,464
$ 14,810
$ 8.32
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs primarily reflect integration costs related to the Allergan acquisition, including a one-time
gain of $169 million related to the termination of a development liability associated with a previously divested product.
Intangible asset impairment primarily reflects a partial impairment charge of $2.1 billion related to the U.S. Imbruvica
intangible asset acquired as part of the 2015 acquisition of Pharmacyclics, Inc. The intangible asset impairment was triggered
by selection of Imbruvica for price negotiation as part of the IRA of 2022, which contributed to a significant decrease in the
estimated future cash flows for the product.
Reported GAAP earnings and adjusted non-GAAP earnings for the nine months ended September 30, 2023 included acquired
IPR&D and milestones expense of $496 million on a pre-tax and $477 million on an after-tax basis, representing an
unfavorable impact of $0.27 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Nine Months Ended September 30, 2023
(in millions)
Cost of
products
sold
SG&A
R&D
Other
operating
expense
(income),
net
Other
expense
(income),
net
As reported (GAAP)
$ 14,711
$ 9,679
$ 5,748
$ (179)
$ 3,121
Adjusted for specified items:
Intangible asset amortization
(6,057)
—
—
—
—
Intangible asset impairment
(2,194)
—
(630)
—
—
Acquisition and integration costs
(66)
(134)
(7)
169
—
Change in fair value of contingent consideration
—
—
—
—
(3,432)
Other
(45)
(13)
(4)
10
(23)
As adjusted (non-GAAP)
$ 6,349
$ 9,532
$ 5,107
$ —
$ (334)
3. The adjusted tax rate for the first nine months of 2023 was 15.2 percent, as detailed below:
Nine Months Ended September 30, 2023
(dollars in millions)
Pre-tax
earnings
Income taxes
Tax rate
As reported (GAAP)
$ 5,038
$ 989
19.6 %
Specified items
12,426
1,657
13.3 %
As adjusted (non-GAAP)
$ 17,464
$ 2,646
15.2 %
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Nine Months Ended September 30, 2022
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 10,512
$ 9,363
$ 5.24
Adjusted for specified items:
Intangible asset amortization
5,728
4,794
2.69
Intangible asset impairment
770
604
0.34
Acquisition and integration costs
595
567
0.32
Change in fair value of contingent consideration
647
657
0.37
Pylera divestiture
(172)
(126)
(0.07)
Litigation matters
2,497
2,021
1.13
Other
281
295
0.16
As adjusted (non-GAAP)
$ 20,858
$ 18,175
$ 10.18
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs primarily reflect integration costs related to the Allergan acquisition. Litigation matters
primarily include a charge related to a potential settlement of litigation involving Allergan’s past sales of opioid products.
Other primarily includes restructuring charges associated with streamlining global operations.
Reported GAAP earnings and adjusted non-GAAP earnings for the nine months ended September 30, 2022 included acquired
IPR&D and milestones expense of $454 million on a pre-tax and $439 million on an after-tax basis, representing an
unfavorable impact of $0.25 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Nine Months Ended September 30, 2022
(in millions)
Cost of
products
sold
SG&A
R&D
Other
operating
expense
(income),
net
Other
expense
(income),
net
As reported (GAAP)
$ 13,244
$ 11,843
$ 4,720
$ 57
$ 427
Adjusted for specified items:
Intangible asset amortization
(5,728)
—
—
—
—
Intangible asset impairment
(770)
—
—
—
—
Acquisition and integration costs
(84)
(263)
(19)
(229)
—
Change in fair value of contingent consideration
—
—
—
—
(647)
Pylera divestiture
—
—
—
172
—
Litigation matters
—
(2,497)
—
—
—
Other
(160)
(107)
(7)
—
(7)
As adjusted (non-GAAP)
$ 6,502
$ 8,976
$ 4,694
$ —
$ (227)
3. The adjusted tax rate for the first nine months of 2022 was 12.8 percent, as detailed below:
Nine Months Ended September 30, 2022
(dollars in millions)
Pre-tax
earnings
Income taxes
Tax rate
As reported (GAAP)
$ 10,512
$ 1,139
10.8 %
Specified items
10,346
1,534
14.8 %
As adjusted (non-GAAP)
$ 20,858
$ 2,673
12.8 %
View original content:https://www.prnewswire.com/news-releases/abbvie-reports-third-quarter-2023-financial-results-301969530.html
SOURCE AbbVie
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