Full Press Release Details
NORTH CHICAGO, Ill. , April 23, 2015 /PRNewswire/ -- AbbVie (NYSE: ABBV ) announced financial results for the first quarter ended March 31, 2015 .
"AbbVie had an exceptional first quarter, delivering on our projection of top-tier EPS growth, as well as robust sales growth and significant margin expansion," said Richard A. Gonzalez , chairman and chief executive officer, AbbVie. "We also announced the acquisition of Pharmacyclics, which will establish AbbVie as a leader in the hematologic oncology market and provide an important growth platform for the future. And, we continued to gain momentum with the launch of our HCV therapy, Viekira, and further advancement of our late stage pipeline. Certainly, 2015 is a pivotal year for AbbVie and we are off to an impressive start."
First-Quarter Results
Key Events from the First Quarter
Full-Year 2015 Outlook
Today, AbbVie is raising its adjusted diluted earnings-per-share guidance for the full-year 2015 to $4.10 to $4.30 from $4.05 to $4.25 . The company's 2015 adjusted diluted earnings-per-share guidance excludes $0.53 per share of intangible asset amortization expense, deal costs, integration, and other specified items, and includes $0.20 of dilution related to the Pharmacyclics acquisition. AbbVie's diluted earnings-per-share guidance is $3.57 to $3.77 on a GAAP basis, excluding certain transaction related costs to be quantified following the close of the Pharmacyclics acquisition.
AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company's mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world's most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries. For further information on the company and its people, portfolio and commitments, please visit www.abbvie.com . Follow @abbvie on Twitter or view careers on our Facebook or LinkedIn page.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our first-quarter performance. Participating on the call will be Rick Gonzalez , chairman and chief executive officer; Bill Chase, executive vice president and chief financial officer; Laura Schumacher, executive vice president, business development, external affairs and general counsel; Mike Severino , executive vice president, research and development and chief scientific officer; and Larry Peepo , vice president of investor relations. The call will be webcast through AbbVie's Investor Relations Web site at www.abbvieinvestor.com . An archived edition of the call will be available after 11:00 a.m. Central time .
Non-GAAP Financial Results
Financial results for 2014 and 2015 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. AbbVie's management believes non-GAAP financial measures provide useful information to investors regarding AbbVie's results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. The company's 2015 financial guidance is also being provided on both a reported and a non-GAAP basis.
Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project" and similar expressions, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to , the likelihood that the Pharmacyclics transaction is consummated and the expected benefits of the transaction,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," in AbbVie's 2014 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
Important Additional Information
This press release does not constitute an offer to purchase, or a solicitation of an offer to sell, shares of common stock of Pharmacyclics, nor is it a substitute for the Registration Statement on Form S-4 and tender offer materials that AbbVie filed with the Securities and Exchange Commission ("SEC") on March 23, 2015, each as amended.
In addition to the Schedule TO, the Schedule 14D-9 and the Registration Statement described above, AbbVie and Pharmacyclics file annual, quarterly and current reports, proxy statements and other information with the SEC. The Schedule TO, the Schedule 14D-9, the Registration Statement and any other relevant materials, and any other documents filed with the SEC by AbbVie or Pharmacyclics, are available without charge at the SEC's website at www.sec.gov , or from the companies' websites, at www.abbvieinvestor.com and http://www.pharmacyclics.com , respectively.
Free copies of the exchange offer materials (including the Registration Statement and the Schedule TO) are also available on AbbVie's website at www.abbvieinvestor.com and copies of the Schedule 14D-9 are available on Pharmacyclics' website http://www.pharmacyclics.com . Copies of the exchange offer materials (including the Registration Statement and the Schedule TO) may also be obtained free of charge from Georgeson Inc., the information agent for the exchange offer, by calling, toll-free, (888) 680-1528 or emailing [email protected] .
| AbbVie Inc. Key Product Sales Quarter Ended March 31, 2015 (Unaudited) | ||||||||
| % Change vs. 1Q14 | ||||||||
| Sales (in millions) | International | Total | ||||||
| U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported | |
| TOTAL SALES | $2,650 | $2,390 | $5,040 | 19.1% | 16.5% | 2.3% | 17.8% | 10.5% |
| Humira | 1,664 | 1,447 | 3,111 | 39.6 | 14.8 | 0.2 | 26.0 | 18.0 |
| Synagis | -- | 335 | 335 | n/a | 8.0 | (5.5) | 8.0 | (5.5) |
| Viekira | 138 | 93 | 231 | n/m | n/m | n/m | n/m | n/m |
| Lupron | 150 | 42 | 192 | 7.0 | (5.1) | (14.2) | 3.8 | 1.5 |
| Synthroid | 186 | -- | 186 | 18.8 | n/a | n/a | 18.8 | 18.8 |
| Kaletra | 41 | 139 | 180 | (23.8) | 13.1 | (1.7) | 3.1 | (7.7) |
| AndroGel | 153 | -- | 153 | (39.8) | n/a | n/a | (39.8) | (39.8) |
| Creon | 127 | -- | 127 | 18.8 | n/a | n/a | 18.8 | 18.8 |
| Sevoflurane | 18 | 108 | 126 | (2.8) | (1.1) | (12.1) | (1.3) | (10.9) |
| Duodopa | n/m | 53 | 53 | n/m | 18.9 | 1.2 | 19.5 | 1.8 |
| Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. |
| n/a = not applicable |
| n/m = not meaningful |
| AbbVie Inc. Consolidated Statements of Earnings Quarter Ended March 31, 2015 and 2014 (Unaudited) (In millions, except per share data) | ||||
| 2015 | 2014 | |||
| Net sales | $5,040 | $4,563 | ||
| Cost of products sold | 942 | 1,100 | ||
| Selling, general and administrative | 1,473 | 1,340 | ||
| Research and development | 811 | 772 | ||
| Acquired in-process research and development | 127 | -- | ||
| Total operating cost and expenses | 3,353 | 3,212 | ||
| Operating earnings | 1,687 | 1,351 | ||
| Interest expense, net | 126 | 65 | ||
| Net foreign exchange loss | 164 | 3 | ||
| Other (income) expense, net | 1 | (3) | ||
| Earnings before income tax expense | 1,396 | 1,286 | ||
| Income tax expense | 374 | 306 | ||
| Net earnings | $1,022 | $980 | ||
| Diluted earnings per share | $0.63 | $0.61 | ||
| Diluted earnings per share, excluding specified items | $0.94 | $0.71 | a) | |
| Average diluted shares outstanding | 1,608 | 1,609 |
| AbbVie Inc. | ||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | ||||||
| Quarter Ended March 31, 2015 | ||||||
| (Unaudited) (In millions, except per share data) | ||||||
| 1. | Specified items impacted results as follows: | |||||
| 1Q15 | ||||||
| Earnings | Diluted | |||||
| Pre-tax | After-tax | EPS | ||||
| As reported (GAAP) | $1,396 | $1,022 | $0.63 | |||
| Adjusted for specified items: | ||||||
| Intangible asset amortization | 68 | 52 | 0.03 | |||
| Separation costs | 104 | 89 | 0.05 | |||
| Acquired IPR&D | 127 | 127 | 0.08 | |||
| Shire termination | 170 | 170 | 0.11 | |||
| Other | 95 | 63 | 0.04 | |||
| As adjusted (non-GAAP) | $1,960 | $1,523 | $0.94 | |||
| Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. Separation costs are expenses related to the separation of AbbVie from Abbott. Acquired IPR&D primarily reflects the C 2 N collaboration. Shire termination reflects the completed liquidation of remaining foreign currency positions related to the terminated Shire transaction, as communicated in the fourth quarter. Other is primarily associated with restructuring activities and interest expense for the Pharmacyclics acquisition. | ||||||
| 2. | The impact of the specified items by line item was as follows: | |||||
| 1Q15 | ||||||
| Cost of products sold | SG&A | IPR&D | Foreign exchange (gain)/loss | Interest expense | ||
| As reported (GAAP) | $942 | $1,473 | $127 | $164 | $126 | |
| Adjusted for specified items: | ||||||
| Intangible asset amortization | (68) | -- | -- | -- | -- | |
| Separation costs | (3) | (101) | -- | -- | -- | |
| Acquired IPR&D | -- | -- | (127) | -- | -- | |
| Shire termination | -- | -- | -- | (170) | -- | |
| Other | (9) | (27) | -- | -- | (59) | |
| As adjusted (non-GAAP) | $862 | $1,345 | -- | ($6) | $67 | |
| 3. | The adjusted tax rate for the first quarter of 2015 was 22.3 percent, as detailed below: | |||||
| 1Q15 | ||||||
| Pre-tax | Income | |||||
| income | taxes | Tax rate | ||||
| As reported (GAAP) | $1,396 | $374 | 26.8% | |||
| Specified items | 564 | 63 | 11.2% | |||
| As adjusted (non-GAAP) | $1,960 | $437 | 22.3% | |||
| AbbVie Inc. | ||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | ||||||
| Quarter Ended March 31, 2014 | ||||||
| (Unaudited) (In millions, except per share data) | ||||||
| 4. | Specified items impacted results as follows: | |||||
| 1Q14 | ||||||
| Earnings | Diluted | |||||
| Pre-tax | After-tax | EPS | ||||
| As reported (GAAP) | $1,286 | $980 | $0.61 | |||
| Adjusted for specified items: | ||||||
| Intangible asset amortization | 110 | 80 | 0.05 | |||
| Separation costs | 80 | 88 | 0.05 | |||
| Restructuring/Other | 4 | 2 | 0.00 | |||
| As adjusted (non-GAAP) | $1,480 | $1,150 | $0.71 | |||
| Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. Separation costs are expenses related to the separation of AbbVie from Abbott. Restructuring/Other is primarily associated with previously announced restructuring activities. | ||||||
| 5. | The impact of the specified items by line item was as follows: | |||||
| 1Q14 | ||||||
| Cost of products sold | SG&A | R&D | ||||
| As reported (GAAP) | $1,100 | $1,340 | $772 | |||
| Adjusted for specified items: | ||||||
| Intangible asset amortization | (110) | -- | -- | |||
| Separation costs | (2) | (77) | (1) | |||
| Restructuring/Other | (2) | (2) | -- | |||
| As adjusted (non-GAAP) | $986 | $1,261 | $771 | |||
| 6. | The adjusted tax rate for the first quarter of 2014 was 22.3 percent, as detailed below: | |||||
| 1Q14 | ||||||
| Pre-tax | Income | |||||
| income | taxes | Tax rate | ||||
| As reported (GAAP) | $1,286 | $306 | 23.8% | |||
| Specified items | 194 | 24 | 12.4% | |||
| As adjusted (non-GAAP) | $1,480 | $330 | 22.3% |