Full Press Release Details
NORTH CHICAGO, Ill., Oct. 27, 2017 /PRNewswire/ -- AbbVie (NYSE: ABBV ) announced financial results for the third quarter ended September 30, 2017.
"We are pleased with the significant progress we have made with our strategic priorities, including the recent settlement of our HUMIRA patent disputes with Amgen, and the significant advancement with our late-stage pipeline of innovative products," said Richard A. Gonzalez , chairman and chief executive officer, AbbVie. "This quarter we achieved a number of milestones, including promising data from several pivotal studies, regulatory approvals for MAVYRET and the U.S. regulatory submission and priority review designation for elagolix. We remain confident in our ability to continue to successfully execute on our long-term strategy and fuel sustainable industry-leading performance."
Third-Quarter Results
Key Events from the Third Quarter
Full-Year 2017 Outlook
AbbVie is updating its GAAP diluted EPS guidance for the full-year 2017 to $4.27 to $4.29 . AbbVie now expects to deliver adjusted diluted EPS for the full-year 2017 of $5.53 to $5.55 , representing growth of 14.9 percent at the midpoint. The company's 2017 adjusted diluted EPS guidance excludes $1.26 per share of intangible asset amortization expense, changes in the fair value of contingent consideration, and other specified items.
Update To Long-Term Strategic and Financial Objectives
Today, AbbVie is providing an update to the company's long-term strategic and financial objectives, including its progress against the long-range guidance provided in October 2015 . AbbVie is on track to meet or exceed its long-range guidance, and now expects global HUMIRA sales to approach $21 billion in 2020. For 2018, AbbVie expects adjusted EPS in the range of $6.37 to $6.57 , reflecting growth of approximately 15 to 19 percent from the mid-point of the 2017 revised guidance range. The company's 2018 adjusted diluted EPS guidance excludes intangible asset amortization expense, changes in the fair value of contingent consideration, and other specified items. The company has also posted a slide presentation regarding the strategic update on the Investor Relations website at investors.abbvie.com .
Company Declares Dividend Increase of 11 Percent
AbbVie is also announcing today that its board of directors declared an increase in the company's quarterly cash dividend from $0.64 per share to $0.71 per share beginning with the dividend payable on February 15, 2018 to shareholders of record as of January 12, 2018 . This reflects an increase of approximately 11 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 dividend by more than 77 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.
AbbVie is a global, research-driven biopharmaceutical company committed to developing innovative advanced therapies for some of the world's most complex and critical conditions. The company's mission is to use its expertise, dedicated people and unique approach to innovation to markedly improve treatments across four primary therapeutic areas: immunology, oncology, virology and neuroscience. In more than 75 countries, AbbVie employees are working every day to advance health solutions for people around the world. For more information about AbbVie, please visit us at www.abbvie.com . Follow @abbvie on Twitter, Facebook 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 and to provide an update to the company's long-term strategic and financial objectives. The call will be webcast through AbbVie's Investor Relations website at investors.abbvie.com . The company has also posted a slide presentation regarding today's strategic update, which can also be found on the Investor Relations website. An archived edition of the call will be available after 11:00 a.m. Central time .
Non-GAAP Financial Results
Financial results for 2017 and 2016 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 2017 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 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, 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 2016 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.
| AbbVie Inc. | ||||||||||||||
| Key Product Revenues | ||||||||||||||
| Quarter Ended September 30, 2017 | ||||||||||||||
| (Unaudited) | ||||||||||||||
| % Change vs. 3Q16 | ||||||||||||||
| Net Revenues (in millions) | International | Total | ||||||||||||
| U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported | |||||||
| ADJUSTED NET REVENUES a | $4,586 | $2,409 | $6,995 | 13.3% | 0.9% | 3.0% | 8.8% | 9.5% | ||||||
| Humira | 3,151 | 1,550 | 4,701 | 19.1 | 6.8 | 9.7 | 14.8 | 15.8 | ||||||
| Imbruvica b | 574 | 114 | 688 | 31.0 | 80.7 | 80.7 | 37.3 | 37.3 | ||||||
| HCV | 60 | 216 | 276 | (19.5) | (29.8) | (28.7) | (27.7) | (26.8) | ||||||
| Lupron | 161 | 40 | 201 | 4.1 | 1.6 | 3.5 | 3.6 | 4.0 | ||||||
| Creon | 215 | — | 215 | 14.8 | n/a | n/a | 14.8 | 14.8 | ||||||
| Synagis | — | 116 | 116 | n/a | 23.5 | 21.0 | 23.5 | 21.0 | ||||||
| Synthroid | 191 | — | 191 | 1.5 | n/a | n/a | 1.5 | 1.5 | ||||||
| AndroGel | 147 | — | 147 | (14.9) | n/a | n/a | (14.9) | (14.9) | ||||||
| Kaletra | 16 | 69 | 85 | (39.2) | (40.4) | (38.2) | (40.2) | (38.4) | ||||||
| Sevoflurane | 19 | 81 | 100 | 0.5 | (3.3) | (3.4) | (2.6) | (2.7) | ||||||
| Duodopa | 16 | 78 | 94 | 56.4 | 16.6 | 21.5 | 22.0 | 26.3 |
| Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. | |
| n/a = not applicable | |
| a | Adjusted net revenues exclude specified items. Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details. Percentage change is calculated using adjusted net revenues. |
| b | Reflects profit sharing for Imbruvica international revenues. |
| AbbVie Inc. | ||||||||||||||
| Key Product Revenues | ||||||||||||||
| Nine Months Ended September 30, 2017 | ||||||||||||||
| (Unaudited) | ||||||||||||||
| % Change vs. 9M16 | ||||||||||||||
| Net Revenues (in millions) | International | Total | ||||||||||||
| U.S. | Int'l. | Total | U.S. | Operational | Reported | Operational | Reported | |||||||
| ADJUSTED NET REVENUES a | $13,284 | $7,193 | $20,477 | 14.1% | 1.2% | 0.8% | 9.2% | 9.1% | ||||||
| Humira | 9,048 | 4,487 | 13,535 | 19.8 | 6.8 | 6.0 | 15.1 | 14.8 | ||||||
| Imbruvica b | 1,559 | 306 | 1,865 | 36.0 | 75.4 | 75.4 | 41.2 | 41.2 | ||||||
| HCV | 124 | 640 | 764 | (56.6) | (30.5) | (30.7) | (36.7) | (36.9) | ||||||
| Lupron | 488 | 117 | 605 | 0.6 | (0.5) | (0.1) | 0.4 | 0.5 | ||||||
| Creon | 596 | — | 596 | 15.3 | n/a | n/a | 15.3 | 15.3 | ||||||
| Synagis | — | 456 | 456 | n/a | (1.7) | (0.8) | (1.7) | (0.8) | ||||||
| Synthroid | 576 | — | 576 | 3.1 | n/a | n/a | 3.1 | 3.1 | ||||||
| AndroGel | 437 | — | 437 | (12.7) | n/a | n/a | (12.7) | (12.7) | ||||||
| Kaletra | 54 | 256 | 310 | (39.9) | (24.3) | (21.7) | (27.7) | (25.7) | ||||||
| Sevoflurane | 56 | 255 | 311 | (2.4) | (3.8) | (5.5) | (3.5) | (4.9) | ||||||
| Duodopa | 44 | 211 | 255 | 70.8 | 12.3 | 11.7 | 19.2 | 18.7 |
| Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. | |
| n/a = not applicable | |
| a | Adjusted net revenues exclude specified items. Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details. Percentage change is calculated using adjusted net revenues. |
| b | Reflects profit sharing for Imbruvica international revenues. |
| AbbVie Inc. | |||||||||||||||
| Consolidated Statements of Earnings | |||||||||||||||
| Quarter and Nine Months Ended September 30, 2017 and 2016 | |||||||||||||||
| (Unaudited) (In millions, except per share data) | |||||||||||||||
| Third Quarter Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net revenues | $ | 6,995 | $ | 6,432 | $ | 20,477 | $ | 18,842 | |||||||
| Cost of products sold | 1,616 | 1,504 | 4,760 | 4,278 | |||||||||||
| Selling, general and administrative | 1,452 | 1,381 | 4,324 | 4,202 | |||||||||||
| Research and development | 1,222 | 1,106 | 3,580 | 3,176 | |||||||||||
| Acquired in-process research and development | — | 80 | 15 | 160 | |||||||||||
| Total operating cost and expenses | 4,290 | 4,071 | 12,679 | 11,816 | |||||||||||
| Operating earnings | 2,705 | 2,361 | 7,798 | 7,026 | |||||||||||
| Interest expense, net | 252 | 250 | 752 | 675 | |||||||||||
| Net foreign exchange loss (gain) | 9 | (4) | 28 | 313 | |||||||||||
| Other expense, net | 349 | 101 | 484 | 152 | |||||||||||
| Earnings before income tax expense | 2,095 | 2,014 | 6,534 | 5,886 | |||||||||||
| Income tax expense | 464 | 416 | 1,277 | 1,324 | |||||||||||
| Net earnings | $ | 1,631 | $ | 1,598 | $ | 5,257 | $ | 4,562 | |||||||
| Diluted earnings per share | $ | 1.01 | $ | 0.97 | $ | 3.27 | $ | 2.78 | |||||||
| Adjusted diluted earnings per share a | $ | 1.41 | $ | 1.21 | $ | 4.11 | $ | 3.62 | |||||||
| Weighted-average diluted shares outstanding | 1,603 | 1,640 | 1,602 | 1,633 |
| AbbVie Inc. | |||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | |||||||||||
| Quarter Ended September 30, 2017 | |||||||||||
| (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 3Q17 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 2,095 | $ | 1,631 | $ | 1.01 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 268 | 201 | 0.13 | ||||||||
| Milestones and other R&D expenses | 32 | 32 | 0.02 | ||||||||
| Change in fair value of contingent consideration | 401 | 401 | 0.25 | ||||||||
| Litigation reserves | 4 | 3 | — | ||||||||
| Other | 6 | 5 | — | ||||||||
| As adjusted (non-GAAP) | $ | 2,806 | $ | 2,273 | $ | 1.41 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||
| 3Q17 | |||||||||||||||
| Cost of products sold | SG&A | R&D | Other expense, net | ||||||||||||
| As reported (GAAP) | $ | 1,616 | $ | 1,452 | $ | 1,222 | $ | 349 | |||||||
| Adjusted for specified items: | |||||||||||||||
| Intangible asset amortization | (268) | — | — | — | |||||||||||
| Milestones and other R&D expenses | — | — | (32) | — | |||||||||||
| Change in fair value of contingent consideration | — | — | — | (401) | |||||||||||
| Litigation reserves | — | (4) | — | — | |||||||||||
| Other | (6) | — | — | — | |||||||||||
| As adjusted (non-GAAP) | $ | 1,342 | $ | 1,448 | $ | 1,190 | $ | (52) |
| 3Q17 | ||||||||||
| Pre-tax income | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 2,095 | $ | 464 | 22.1 | % | ||||
| Specified items | 711 | 69 | 9.7 | % | ||||||
| As adjusted (non-GAAP) | $ | 2,806 | $ | 533 | 19.0 | % |
| AbbVie Inc. | |||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | |||||||||||
| Quarter Ended September 30, 2016 | |||||||||||
| (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 3Q16 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 2,014 | $ | 1,598 | $ | 0.97 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 208 | 168 | 0.11 | ||||||||
| Acquired IPR&D | 80 | 80 | 0.05 | ||||||||
| Acquisition related costs | 123 | 70 | 0.04 | ||||||||
| Change in fair value of contingent consideration | 104 | 104 | 0.06 | ||||||||
| Other | (40) | (26) | (0.02) | ||||||||
| As adjusted (non-GAAP) | $ | 2,489 | $ | 1,994 | $ | 1.21 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||||||
| 3Q16 | |||||||||||||||||||||||
| Net revenues | Cost of products sold | SG&A | R&D | Acquired IPR&D | Other expense, net | ||||||||||||||||||
| As reported (GAAP) | $ | 6,432 | $ | 1,504 | $ | 1,381 | $ | 1,106 | $ | 80 | $ | 101 | |||||||||||
| Adjusted for specified items: | |||||||||||||||||||||||
| Intangible asset amortization | — | (208) | — | — | — | — | |||||||||||||||||
| Acquired IPR&D | — | — | — | — | (80) | — | |||||||||||||||||
| Acquisition related costs | — | (53) | (16) | (54) | — | — | |||||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | — | (104) | |||||||||||||||||
| Other | (46) | (8) | 3 | (1) | — | — | |||||||||||||||||
| As adjusted (non-GAAP) | $ | 6,386 | $ | 1,235 | $ | 1,368 | $ | 1,051 | $ | — | $ | (3) |
| 3Q16 | ||||||||||
| Pre-tax income | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 2,014 | $ | 416 | 20.7 | % | ||||
| Specified items | 475 | 79 | 16.6 | % | ||||||
| As adjusted (non-GAAP) | $ | 2,489 | $ | 495 | 19.9 | % |
| AbbVie Inc. | |||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | |||||||||||
| Nine Months Ended September 30, 2017 | |||||||||||
| (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 9M17 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 6,534 | $ | 5,257 | $ | 3.27 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 808 | 606 | 0.37 | ||||||||
| Milestones and other R&D expenses | 68 | 68 | 0.04 | ||||||||
| Acquired IPR&D | 15 | 15 | 0.01 | ||||||||
| Acquisition related costs | 73 | 49 | 0.03 | ||||||||
| Change in fair value of contingent consideration | 547 | 546 | 0.34 | ||||||||
| Litigation reserves | 97 | 65 | 0.04 | ||||||||
| Other | 19 | 16 | 0.01 | ||||||||
| As adjusted (non-GAAP) | $ | 8,161 | $ | 6,622 | $ | 4.11 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||
| 9M17 | |||||||||||||||||||
| Cost of products sold | SG&A | R&D | Acquired IPR&D | Other expense, net | |||||||||||||||
| As reported (GAAP) | $ | 4,760 | $ | 4,324 | $ | 3,580 | $ | 15 | $ | 484 | |||||||||
| Adjusted for specified items: | |||||||||||||||||||
| Intangible asset amortization | (808) | — | — | — | — | ||||||||||||||
| Milestones and other R&D expenses | — | — | (68) | — | — | ||||||||||||||
| Acquired IPR&D | — | — | — | (15) | — | ||||||||||||||
| Acquisition related costs | (52) | (14) | (5) | — | (2) | ||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | (547) | ||||||||||||||
| Litigation reserves | — | (97) | — | — | — | ||||||||||||||
| Other | (14) | (5) | — | — | — | ||||||||||||||
| As adjusted (non-GAAP) | $ | 3,886 | $ | 4,208 | $ | 3,507 | $ | — | $ | (65) |
| 9M17 | ||||||||||
| Pre-tax income | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 6,534 | $ | 1,277 | 19.5 | % | ||||
| Specified items | 1,627 | 262 | 16.1 | % | ||||||
| As adjusted (non-GAAP) | $ | 8,161 | $ | 1,539 | 18.9 | % |
| AbbVie Inc. | |||||||||||
| Reconciliation of GAAP Reported to Non-GAAP Adjusted Information | |||||||||||
| Nine Months Ended September 30, 2016 | |||||||||||
| (Unaudited) (In millions, except per share data) | |||||||||||
| 1. Specified items impacted results as follows: | |||||||||||
| 9M16 | |||||||||||
| Earnings | Diluted | ||||||||||
| Pre-tax | After-tax | EPS | |||||||||
| As reported (GAAP) | $ | 5,886 | $ | 4,562 | $ | 2.78 | |||||
| Adjusted for specified items: | |||||||||||
| Intangible asset amortization | 554 | 445 | 0.27 | ||||||||
| Milestones and other R&D expenses | 70 | 70 | 0.04 | ||||||||
| Acquired IPR&D | 160 | 160 | 0.10 | ||||||||
| Acquisition related costs | 327 | 229 | 0.15 | ||||||||
| Change in fair value of contingent consideration | 145 | 145 | 0.09 | ||||||||
| Venezuela devaluation loss | 298 | 298 | 0.18 | ||||||||
| Other | 4 | 31 | 0.01 | ||||||||
| As adjusted (non-GAAP) | $ | 7,444 | $ | 5,940 | $ | 3.62 |
| 2. The impact of the specified items by line item was as follows: | |||||||||||||||||||||||||||
| 9M16 | |||||||||||||||||||||||||||
| Net revenues | Cost of products sold | SG&A | R&D | Acquired IPR&D | Net foreign exchange loss | Other expense, net | |||||||||||||||||||||
| As reported (GAAP) | $ | 18,842 | $ | 4,278 | $ | 4,202 | $ | 3,176 | $ | 160 | $ | 313 | $ | 152 | |||||||||||||
| Adjusted for specified items: | |||||||||||||||||||||||||||
| Intangible asset amortization | — | (554) | — | — | — | — | — | ||||||||||||||||||||
| Milestones and other R&D expenses | — | — | — | (70) | — | — | — | ||||||||||||||||||||
| Acquired IPR&D | — | — | — | — | (160) | — | — | ||||||||||||||||||||
| Acquisition related costs | — | (144) | (36) | (135) | — | — | (12) | ||||||||||||||||||||
| Change in fair value of contingent consideration | — | — | — | — | — | — | (145) | ||||||||||||||||||||
| Venezuela devaluation loss | — | — | — | — | — | (298) | — | ||||||||||||||||||||
| Other | (66) | (61) | (15) | 6 | — | — | — | ||||||||||||||||||||
| As adjusted (non-GAAP) | $ | 18,776 | $ | 3,519 | $ | 4,151 | $ | 2,977 | $ | — | $ | 15 | $ | (5) |
| 9M16 | ||||||||||
| Pre-tax income | Income taxes | Tax rate | ||||||||
| As reported (GAAP) | $ | 5,886 | $ | 1,324 | 22.5 | % | ||||
| Specified items | 1,558 | 180 | 11.6 | % | ||||||
| As adjusted (non-GAAP) | $ | 7,444 | $ | 1,504 | 20.2 | % |