AbbVie Reports Second-Quarter 2020 Financial Results

AbbVie Reports Second-Quarter 2020 Financial Results

NORTH CHICAGO, Ill., July 31, 2020 - AbbVie (NYSE:ABBV) announced financial results for the second quarter ended June 30, 2020.

"AbbVie delivered another strong quarterly performance, ahead of our guidance. The adverse impact from COVID-19 on legacy AbbVie was less than expected, demonstrating the robustness and resiliency of our key brands, and new patient starts have stabilized and started to recover," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "The integration of Allergan is going well, with a strong recovery in the aesthetics portfolio and accretion ahead of expectations."

Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates.

Second-Quarter Results

Note: "Comparable Operational" comparisons include full-quarter current year and prior year results for Allergan, which was acquired on May 8, 2020, as if the acquisition closed on January 1, 2019, and are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates. Refer to the Key Product Revenues schedules for further details. "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year's foreign exchange rates.

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Full-Year 2020 Outlook

AbbVie previously issued standalone GAAP diluted EPS guidance for the full-year 2020 of $7.60 to $7.70. AbbVie is issuing combined company GAAP diluted EPS guidance for the full-year 2020, which includes the results of Allergan from May 8, 2020 through December 31, 2020, of $4.12 to $4.22.

AbbVie previously issued standalone adjusted diluted EPS for the full-year 2020 of $9.61 to $9.71. AbbVie is issuing combined company adjusted diluted EPS guidance for the full-year 2020, which includes the results of Allergan from May 8, 2020 through December 31, 2020, of $10.35 to $10.45, representing annualized net accretion from the Allergan transaction of 11 percent. The combined company's 2020 adjusted diluted EPS guidance excludes $6.23 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.

Combined company guidance supersedes previously issued standalone guidance.

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, eye care, virology, women's health and gastroenterology, in addition to products and services across its Allergan Aesthetics portfolio. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on Twitter, Facebook or LinkedIn.

AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our second-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 2020 and 2019 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 2020 financial guidance is also being provided on both a reported and a non-GAAP basis.

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, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on AbbVie's operations, results and financial results, 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, failure to realize the expected benefits of the Allergan acquisition, failure to promptly and effectively integrate Allergan's businesses, significant transaction costs and/or unknown or inestimable liabilities, potential litigation associated with the Allergan acquisition, 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 2019 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission (SEC). 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.

Key Product Revenues

Quarter Ended June 30, 2020

c All historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policies and reporting conventions for certain rebates and discounts. Historically reported Allergan revenues also exclude Zenpep and Viokace product revenues, which were both divested as part of the acquisition, as well as specified items.

d Reflects profit sharing for Imbruvica international revenues.

* Represents product(s) acquired as part of the Allergan acquisition.

n/a = not applicable

n/m = not meaningful

Key Product Revenues

Six Months Ended June 30, 2020

c All historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policies and reporting conventions for certain rebates and discounts. Historically reported Allergan revenues also exclude Zenpep and Viokace product revenues, which were both divested as part of the acquisition, as well as specified items.

d Reflects profit sharing for Imbruvica international revenues.

* Represents product(s) acquired as part of the Allergan acquisition.

n/a = not applicable

n/m = not meaningful

Consolidated Statements of Earnings

Quarter and Six Months Ended June 30, 2020 and 2019

(Unaudited) (In millions, except per share data)

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

Quarter Ended June 30, 2020

(Unaudited) (In millions, except per share data)

1. Specified items impacted results as follows:

Acquisition related costs reflect transaction, financing and integration costs related to the Allergan acquisition as well as amortization of the acquisition date fair value step-up for inventory. Milestones and other R&D expenses include milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Other primarily includes COVID-19 related expenses and tax audit settlements.

2. The impact of the specified items by line item was as follows:

3. The adjusted tax rate for the second quarter of 2020 was 11.4 percent, as detailed below:

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

Quarter Ended June 30, 2019

(Unaudited) (In millions, except per share data)

1. Specified items impacted results as follows:

Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Restructuring is primarily associated with streamlining global operations. Acquisition related costs reflect transaction and financing costs related to the Allergan acquisition.

2. The impact of the specified items by line item was as follows:

3. The adjusted tax rate for the second quarter of 2019 was 8.7 percent, as detailed below:

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

Six Months Ended June 30, 2020

(Unaudited) (In millions, except per share data)

1. Specified items impacted results as follows:

Acquisition related costs reflect transaction, financing and integration costs related to the Allergan acquisition as well as amortization of the acquisition date fair value step-up for inventory. Milestones and other R&D expenses include milestone payments for previously announced collaborations and the purchase of an FDA priority review voucher from a third party. Other primarily includes the impacts of tax law changes and COVID-19 related charitable contributions and expenses.

2. The impact of the specified items by line item was as follows:

3. The adjusted tax rate for the first six months of 2020 was 10.6 percent, as detailed below:

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

Six Months Ended June 30, 2019

(Unaudited) (In millions, except per share data)

1. Specified items impacted results as follows:

Milestones and other R&D expenses are associated with milestone payments for previously announced collaborations. Acquired IPR&D primarily reflects upfront payments related to R&D collaborations and licensing arrangements with third parties. Restructuring is primarily associated with streamlining global operations. Acquisition related costs reflect transaction and financing costs related to the Allergan acquisition.

2. The impact of the specified items by line item was as follows:

3. The adjusted tax rate for the first six months of 2019 was 8.3 percent, as detailed below: