01—Abstract
Summary
Summary of the 10-K filed February 18, 2022. Cited figures are marked; the original filing is the authoritative source.
AbbVie Inc. reported robust performance in its 2021 10-K filing, with total net revenues reaching $56.2 billiona, a significant increase driven largely by the full year inclusion of Allergan results post-acquisition and strong growth across its diverse product portfolio.
The company highlighted growth in immunology, hematologic oncology, neuroscience, and aesthetics segments. The company's strategic focus remains on leveraging its diversified revenue base, expanding its pipeline through continued investment in R&D and strategic collaborations, and returning value to shareholders via dividends and debt reduction. Despite continued challenges from COVID-19 impacting new patient starts in certain areas, AbbVie demonstrated resilience, underscored by a substantial increase in operating cash flow and a significant increase in its quarterly cash dividend.
Investors should note the substantial amortization of intangible assets related to the Allergan acquisition, which impacts reported earnings per share. The company is also navigating the upcoming loss of patent protection for Humira, with plans to offset this through growth in newer immunology products like Skyrizi and Rinvoq.
02—Key points
Key Highlights
- AbbVie's total net revenues reached $56.2 billion in 2021, a 22.7% increase over 2020, largely due to the full year impact of the Allergan acquisition and growth in key therapeutic areas.
- Humira, despite facing biosimilar competition in Europe and a slight market share decrease in the US due to newer product launches, still contributed significantly with $20.7 billion in total net revenues.
- Newer immunology products, Skyrizi and Rinvoq, demonstrated substantial growth, with net revenues increasing by 84.9% and over 100% respectively, indicating strong market adoption and pipeline success.
- The Aesthetics and Neuroscience segments showed significant recovery and growth, driven by increased brand investment and a strong rebound from COVID-19 impacts, with Botox Cosmetic and Vraylar being key contributors.
- AbbVie generated strong operating cash flow of $22.8 billion, supporting its strategic objectives, including continued investment in R&D, returning value to shareholders through dividends (an 8.5% increase in quarterly dividend declared), and debt reduction.
- The company continues to invest heavily in R&D, with a pipeline of approximately 90 compounds, devices, or indications, indicating a commitment to future growth and innovation.
- Despite robust financial performance, the company faces ongoing risks related to patent expirations (particularly for Humira), potential biosimilar competition, and regulatory changes in the pharmaceutical industry.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, AbbVie Inc. kept $0.21.
- Revenue$56.20B100.0%
- Cost of revenue−$17.45B31.0%
- Gross profit$38.75B69.0%
- Operating costs−$20.83B37.1%
- Operating income$17.92B31.9%
- Interest, other & tax−$6.38B11.4%
- Net income$11.54B20.5%
Where FY2021 revenue went
$56.20B- Cost of revenue: $17.45B, 31% of revenue
- SG&A: $12.35B, 22% of revenue
- Net income: $11.54B, 21% of revenue
- Other operating costs: $8.48B, 15% of revenue
- Interest, other & tax: $6.38B, 11% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 18, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $56.20B$45.80B | +22.7% |
| Cost of Revenue | $17.45B$15.39B | +13.4% |
| Gross Profit | $38.75B$30.42B | +27.4% |
| SG&A Expenses | $12.35B$11.30B | +9.3% |
| Operating Expenses | $38.27B$34.44B | +11.1% |
| Operating Income | $17.92B$11.36B | +57.7% |
| Interest Expense | $2.42B$2.45B | −1.3% |
| Net Income | $11.54B$4.62B | +150.0% |
| EPS (Basic) | $6.48$2.73 | +137.4% |
| EPS (Diluted) | $6.45$2.72 | +137.1% |
| Shares Outstanding (Basic) | 1.77B1.67B | +6.2% |
| Shares Outstanding (Diluted) | 1.78B1.67B | +6.2% |
05—Questions
Frequently Asked Questions
What was AbbVie's overall financial performance in 2021?
AbbVie reported strong financial performance in 2021, with total net revenues reaching $56.2 billion, an increase of 22.7% compared to 2020. This growth was driven by the full year inclusion of Allergan's results and significant revenue increases across key therapeutic areas like immunology, hematologic oncology, neuroscience, and aesthetics. Operating earnings were $17.9 billion, and diluted earnings per share were $6.45, although the latter was impacted by substantial amortization of intangible assets from the Allergan acquisition.
How is AbbVie managing the upcoming patent expiration of Humira?
AbbVie's strategy to mitigate the impact of Humira's patent expiration involves driving growth from its newer immunology products, Skyrizi and Rinvoq. These products have shown substantial year-over-year revenue increases and are gaining market share and expanding indications. The company also benefits from its diversified product portfolio across other therapeutic areas to offset potential revenue declines from Humira.
What is AbbVie's approach to returning value to shareholders?
AbbVie is committed to returning value to shareholders through a combination of increasing cash dividends and share repurchases. In October 2021, the company's board declared an 8.5% increase in its quarterly cash dividend. Additionally, AbbVie continues to repurchase its own stock, with a remaining authorization of $2.5 billion as of December 31, 2021, and is focused on reducing debt.
What are the key growth drivers for AbbVie beyond Humira?
AbbVie's key growth drivers include its immunology franchise with Skyrizi and Rinvoq, which are experiencing rapid adoption and indication expansion. In hematologic oncology, Imbruvica and Venclexta continue to perform well. The Aesthetics segment, bolstered by the Allergan acquisition, with products like Botox Cosmetic and the Juvederm Collection, is a significant contributor. The Neuroscience portfolio, including Botox Therapeutic and Vraylar, also shows strong growth.
What significant risks does AbbVie highlight in its 2021 10-K filing?
AbbVie identifies several key risks, including the expiration or loss of patent protection for its products, particularly Humira, and the subsequent competition from generics and biosimilars. Other significant risks include the potential impact of public health outbreaks like COVID-19 on operations, challenges in research and development success, third-party intellectual property challenges, regulatory changes, pricing pressures, and the complexity of manufacturing biologic products. The company also notes risks associated with its debt obligations and the successful integration of acquired businesses.
06—Continue