ABBV
AbbVie Reports Third-Quarter 2015 Financial Results AbbVie (NYSE:ABBV) announced financial results for the third quarter ended September 30, 2015. We are pleased with our outperformance in the third...
Friday, October 30, 2015 4 min read
Key Takeaway: NORTH CHICAGO, Ill. , Oct. 30, 2015 /PRNewswire/ -- AbbVie (NYSE: ABBV ) announced financial results for the third quarter ended September 30, 2015 .
"We are pleased with our outperformance in the third quarter and our progress year-to-date. We've driven strong commercial, opera
Full Press Release Details
NORTH CHICAGO, Ill. , Oct. 30, 2015 /PRNewswire/ -- AbbVie (NYSE: ABBV ) announced financial results for the third quarter ended September 30, 2015 .
"We are pleased with our outperformance in the third quarter and our progress year-to-date. We've driven strong commercial, operational and R&D execution, resulting in industry-leading top- and bottom-line performance," said Richard A. Gonzalez , chairman and chief executive officer, AbbVie. "We are well-positioned to deliver robust EPS growth in 2015 and beyond, and we continue to make significant progress advancing our pipeline and other strategic actions that will help AbbVie achieve top-tier growth over the long term."
Key Events from the Third Quarter
AbbVie Raises Full-Year 2015 Outlook
AbbVie is raising its adjusted diluted earnings-per-share guidance for the full-year 2015 to $4.26 to $4.28 . The company's 2015 adjusted diluted earnings-per-share guidance excludes $1.10 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 $3.16 to $3.18 on a GAAP basis.
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. Together with its wholly-owned subsidiary, Pharmacyclics, AbbVie employs more than 28,000 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.
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our third-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 challenges to intellectual property, and 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 and in item 1A, "Risk Factors" of Part II of AbbVie's second quarter 2015 Quarterly Report on Form 10-Q, which have 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.
| AbbVie Inc. |
| Key Product Revenues |
| Quarter Ended September 30, 2015 |
| (Unaudited) |
| | | % Change vs. 3Q14 |
| | Net Revenues (in millions) | | International | Total |
| | U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported |
| NET REVENUES | $3,690 | $2,254 | $5,944 | 31.4% | 19.5% | 2.0% | 26.2% | 18.4% |
| Humira | 2,268 | 1,379 | 3,647 | 30.4 | 7.1 | (8.9) | 19.6 | 12.1 |
| Imbruvica | 267 | 37 a | 304 | n/m | n/m | n/m | n/m | n/m |
| Viekira | 242 | 227 | 469 | n/m | n/m | n/m | n/m | n/m |
| Creon | 161 | -- | 161 | 8.3 | n/a | n/a | 8.3 | 8.3 |
| Synagis | -- | 93 | 93 | n/a | (1.2) | (14.6) | (1.2) | (14.6) |
| Lupron | 158 | 43 | 201 | 7.8 | 6.2 | (13.8) | 7.4 | 2.4 |
| Synthroid | 188 | -- | 188 | (5.4) | n/a | n/a | (5.4) | (5.4) |
| Kaletra | 39 | 129 | 168 | (27.1) | (18.8) | (36.3) | (20.6) | (34.4) |
| AndroGel | 177 | -- | 177 | (23.6) | n/a | n/a | (23.6) | (23.6) |
| Sevoflurane | 21 | 101 | 122 | 4.5 | 1.4 | (11.3) | 1.8 | (9.0) |
| Duodopa | 3 | 58 | 61 | n/m | 21.6 | 2.3 | 28.7 | 9.4 |
| 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 |
| a Reflects profit sharing for Imbruvica international revenues |
| AbbVie Inc. |
| Key Product Revenues |
| Nine Months Ended September 30, 2015 |
| (Unaudited) |
| | | % Change vs. 9M14 |
| | Net Revenues (in millions) | | International | Total |
| | U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported |
| NET REVENUES | $9,710 | $6,749 | $16,459 | 26.4% | 15.4% | (1.1%) | 21.2% | 13.4% |
| Humira | 6,073 | 4,222 | 10,295 | 32.2 | 8.3 | (8.0) | 20.3 | 12.2 |
| Imbruvica | 364 | 47 a | 411 b | n/m | n/m | n/m | n/m | n/m |
| Viekira | 607 | 478 | 1,085 | n/m | n/m | n/m | n/m | n/m |
| Creon | 447 | -- | 447 | 22.3 | n/a | n/a | 22.3 | 22.3 |
| Synagis | -- | 474 | 474 | n/a | 1.5 | (11.7) | 1.5 | (11.7) |
| Lupron | 464 | 127 | 591 | 10.5 | (2.7) | (16.3) | 7.0 | 3.4 |
| Synthroid | 561 | -- | 561 | 7.4 | n/a | n/a | 7.4 | 7.4 |
| Kaletra | 123 | 392 | 515 | (24.4) | (8.2) | (22.3) | (12.1) | (22.8) |
| AndroGel | 500 | -- | 500 | (29.0) | n/a | n/a | (29.0) | (29.0) |
| Sevoflurane | 59 | 307 | 366 | (4.0) | (4.9) | (16.6) | (4.7) | (14.8) |
| Duodopa | 6 | 163 | 169 | n/m | 19.3 | (0.8) | 23.2 | 3.1 |
| 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 |
| a Reflects profit sharing for Imbruvica international revenues |
| b Reflects Imbruvica revenue from the May 26 close date of the Pharmacyclics acquisition |
| AbbVie Inc. |
| Consolidated Statements of Earnings |
| Quarter and Nine Months Ended September 30, 2015 and 2014 |
| (Unaudited) (In millions, except per share data) |
| | Third Quarter Ended September 30 | | Nine Months Ended September 30 |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Net revenues | $5,944 | | $5,019 | | $16,459 | | $14,508 |
| Cost of products sold | 1,167 | | 1,094 | | 3,025 | | 3,307 |
| Selling, general and administrative | 1,474 | | 1,595 | | 4,650 | | 4,383 |
| Research and development | 1,418 | | 812 | | 3,210 | | 2,418 |
| Acquired in-process research and development | -- | | 308 | | 150 | | 324 |
| Other expense | -- | | 250 | | -- | | 250 |
| Total operating costs and expenses | 4,059 | | 4,059 | | 11,035 | | 10,682 |
| Operating earnings | 1,885 | | 960 | | 5,424 | | 3,826 |
| Interest expense, net | 197 | | 128 | | 487 | | 262 |
| Net foreign exchange loss | 13 | | 174 | | 191 | | 182 |
| Other (income) expense, net | 28 | | (29) | | 25 | | (24) |
| Earnings before income tax expense | 1,647 | | 687 | | 4,721 | | 3,406 |
| Income tax expense | 408 | | 181 | | 1,094 | | 822 |
| Net earnings | $1,239 | | $506 | | $3,627 | | $2,584 |
| Diluted earnings per share | $0.74 | | $0.31 | | $2.21 | | $1.60 |
| Diluted earnings per share, excluding specified items | $1.13 | | $0.89 | | $3.16 | | $2.43 a) |
| Average diluted shares outstanding | 1,664 | | 1,610 | | 1,635 | | 1,609 |
| AbbVie Inc. |
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
| Quarter Ended September 30, 2015 |
| (Unaudited) (In millions, except per share data) |
| 1. Specified items impacted results as follows: |
| | 3Q15 |
| | Earnings | Diluted |
| | Pre-tax | After-tax | EPS |
| As reported (GAAP) | $1,647 | $1,239 | $0.74 |
| Adjusted for specified items: | | | |
| Intangible asset amortization | 125 | 94 | 0.05 |
| Separation costs | 45 | 39 | 0.02 |
| Pharmacyclics transaction and other costs | 120 | 85 | 0.05 |
| Milestones and other R&D expenses | 480 | 433 | 0.27 |
| Other | 12 | 9 | 0.00 |
| As adjusted (non-GAAP) | $2,429 | $1,899 | $1.13 |
| | 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. Pharmacyclics transaction and other costs reflect transaction, financing, integration and other costs related to the acquisition of Pharmacyclics. Milestones and other R&D expenses are associated with a milestone payment for a previously announced collaboration and the purchase of an FDA priority review voucher from a third-party. Other is primarily associated with restructuring activities. |
| 2. | The impact of the specified items by line item was as follows: |
| | 3Q15 |
| | Cost of products sold | SG&A | R&D |
| As reported (GAAP) | $1,167 | $1,474 | $1,418 |
| Adjusted for specified items: | | | |
| Intangible asset amortization | (125) | -- | -- |
| Separation costs | -- | (45) | -- |
| Pharmacyclics transaction and other costs | (45) | (57) | (18) |
| Milestones and other R&D expenses | | -- | (480) |
| Other | (6) | (2) | (4) |
| As adjusted (non-GAAP) | $991 | $1,370 | $916 |
| | 3Q15 |
| | Pre-tax | Income | |
| | income | taxes | Tax rate |
| As reported (GAAP) | $1,647 | $408 | 24.8% |
| Specified items | 782 | 122 | 15.6% |
| As adjusted (non-GAAP) | $2,429 | $530 | 21.9% |
| AbbVie Inc. |
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
| Quarter Ended September 30, 2014 |
| (Unaudited) (In millions, except per share data) |
| 1. Specified items impacted results as follows: |
| | 3Q14 |
| | Earnings | Diluted |
| | Pre-tax | After-tax | EPS |
| As reported (GAAP) | $687 | $506 | $0.31 |
| Adjusted for specified items: | | | |
| Intangible asset amortization | 98 | 70 | 0.04 |
| Separation costs | 109 | 98 | 0.06 |
| Acquired IPR&D | 308 | 206 | 0.13 |
| Calico collaboration | 250 | 250 | 0.15 |
| Shire transaction costs | 276 | 172 | 0.11 |
| Other | 139 | 147 | 0.09 |
| As adjusted (non-GAAP) | $1,867 | $1,449 | $0.89 |
| | 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 upfront payment related to the previously announced Infinity collaboration. Calico collaboration reflects the upfront payment related to the previously announced Calico collaboration. Shire transaction costs are expenses related to the terminated Shire transaction. Other specified items are primarily associated with an additional year of the Branded Prescription Drug Fee as required by new IRS regulations. |
| 2. | The impact of the specified items by line item was as follows: |
| | 3Q14 |
| | Cost of products sold | SG&A | R&D | Acquired IPR&D | Net foreign exchange loss | Interest expense (income) | Other (income) expense |
| As reported (GAAP) | $1,094 | $1,595 | $812 | $308 | $174 | $128 | $221 |
| Adjusted for specified items: | | | | | | | |
| Intangible asset amortization | (98) | -- | -- | -- | -- | -- | -- |
| Separation costs | (4) | (104) | (1) | -- | -- | -- | -- |
| Acquired IPR&D | -- | -- | -- | (308) | -- | -- | -- |
| Calico collaboration | -- | -- | -- | -- | -- | -- | (250) |
| Shire transaction costs | -- | (36) | -- | -- | (165) | (75) | -- |
| Other | (44) | (129) | -- | -- | -- | -- | 34 |
| As adjusted (non-GAAP) | $948 | $1,326 | $811 | -- | $9 | $53 | $5 |
| | 3Q14 |
| | Pre-tax | Income | |
| | income | taxes | Tax rate |
| As reported (GAAP) | $687 | $181 | 26.3% |
| Specified items | 1,180 | 237 | 20.1% |
| As adjusted (non-GAAP) | $1,867 | $418 | 22.4% |
| AbbVie Inc. |
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
| Nine Months Ended September 30, 2015 |
| (Unaudited) (In millions, except per share data) |
| 1. Specified items impacted results as follows: |
| | 9M15 |
| | Earnings | Diluted |
| | Pre-tax | After-tax | EPS |
| As reported (GAAP) | $4,721 | $3,627 | $2.21 |
| Adjusted for specified items: | | | |
| Intangible asset amortization | 279 | 212 | 0.13 |
| Separation costs | 244 | 208 | 0.12 |
| Pharmacyclics transaction and other costs | 540 | 342 | 0.20 |
| Milestones and other R&D expenses | 480 | 433 | 0.27 |
| Acquired IPR&D | 150 | 150 | 0.10 |
| Shire termination | 170 | 170 | 0.10 |
| Other | 80 | 57 | 0.03 |
| As adjusted (non-GAAP) | $6,664 | $5,199 | $3.16 |
| | 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. Pharmacyclics transaction and other costs reflect transaction, financing, integration and other costs related to the acquisition of Pharmacyclics. Milestones and other R&D expenses are associated with a milestone payment for a previously announced collaboration and the purchase of an FDA priority review voucher from a third-party. 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 of 2014. Other is primarily associated with restructuring activities. |
| 2. | The impact of the specified items by line item was as follows: |
| | 9M15 |
| | Cost of products sold | SG&A | R&D | Acquired IPR&D | Interest expense | Foreign exchange (gain)/loss |
| As reported (GAAP) | $3,025 | $4,650 | $3,210 | $150 | $487 | $191 |
| Adjusted for specified items: | | | | | | |
| Intangible asset amortization | (279) | -- | -- | -- | -- | -- |
| Separation costs | (5) | (239) | -- | -- | -- | -- |
| Pharmacyclics transaction and other costs | (64) | (279) | (111) | -- | (86) | -- |
| Milestones and other R&D expenses | -- | -- | (480) | -- | -- | -- |
| Acquired IPR&D | -- | -- | -- | (150) | -- | -- |
| Shire termination | -- | -- | -- | -- | -- | (170) |
| Other | (18) | (42) | (20) | -- | -- | -- |
| As adjusted (non-GAAP) | $2,659 | $4,090 | $2,599 | -- | $401 | $21 |
| | 9M15 |
| | Pre-tax | Income | |
| | income | taxes | Tax rate |
| As reported (GAAP) | $4,721 | $1,094 | 23.2% |
| Specified items | 1,943 | 371 | 19.1% |
| As adjusted (non-GAAP) | $6,664 | $1,465 | 22.0% |
| AbbVie Inc. |
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
| Nine Months Ended September 30, 2014 |
| (Unaudited) (In millions, except per share data) |
| 1. Specified items impacted results as follows: |
| | 9M14 |
| | Earnings | Diluted |
| | Pre-tax | After-tax | EPS |
| As reported (GAAP) | $3,406 | $2,584 | $1.60 |
| Adjusted for specified items: | | | |
| Intangible asset amortization | 307 | 218 | 0.14 |
| Separation costs | 299 | 282 | 0.17 |
| Milestones and other R&D expenses | 40 | 40 | 0.03 |
| Acquired IPR&D | 324 | 222 | 0.14 |
| Calico collaboration | 250 | 250 | 0.15 |
| Shire transaction costs | 283 | 179 | 0.11 |
| Other | 148 | 154 | 0.09 |
| As adjusted (non-GAAP) | $5,057 | $3,929 | $2.43 |
| | 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. Milestones and other R&D expenses are associated with payments for previously announced collaborations. Acquired IPR&D reflects upfront payments related to previously announced collaborations. Calico collaboration reflects the upfront payment related to the recently announced Calico collaboration. Shire transaction costs are expenses related to the terminated Shire transaction. Other is associated with restructuring activities and an additional year of the Branded Prescription Drug Fee as required by new IRS regulations. |
| 2. | The impact of the specified items by line item was as follows: |
| | 9M14 |
| | Cost of products sold | SG&A | R&D | Acquired IPR&D | Net foreign exchange loss | Interest expense (income) | Other (income) expense |
| As reported (GAAP) | $3,307 | $4,383 | $2,418 | $324 | $182 | $262 | $226 |
| Adjusted for specified items: | | | | | | | |
| Intangible asset amortization | (307) | -- | -- | -- | -- | -- | -- |
| Separation costs | (10) | (286) | (3) | -- | -- | -- | -- |
| Milestones and other R&D expenses | -- | -- | (40) | -- | -- | -- | -- |
| Acquired IPR&D | -- | -- | -- | (324) | -- | -- | -- |
| Calico collaboration | -- | -- | -- | -- | -- | -- | (250) |
| Shire transaction costs | -- | (43) | -- | -- | (165) | (75) | -- |
| Other | (51) | (131) | -- | -- | -- | -- | 34 |
| As adjusted (non-GAAP) | $2,939 | $3,923 | $2,375 | -- | $17 | $187 | $10 |
| | 9M14 |
| | Pre-tax | Income | |
| | income | taxes | Tax rate |
| As reported (GAAP) | $3,406 | $822 | 24.1% |
| Specified items | 1,651 | 306 | 18.5% |
| As adjusted (non-GAAP) | $5,057 | $1,128 | 22.3% |
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