10-QPeriod: Q1 FY2018

AbbVie Inc. Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 4, 2018For Securities:ABBV

Summary

AbbVie Inc. reported strong financial performance for the first quarter of 2018, with a significant increase in net revenues and earnings compared to the prior year. Net revenues grew by 21.4% to $7.9 billion, driven by robust sales of key products like HUMIRA and IMBRUVICA, alongside substantial growth in the HCV segment due to the launch of MAVYRET. Earnings per share also saw a healthy increase, reflecting operational efficiencies and strategic growth initiatives. The company demonstrated strong operational cash flow generation, which was utilized for pipeline investments, share repurchases, and increased dividend payments to shareholders, underscoring a commitment to shareholder returns. AbbVie continues to advance its robust pipeline with numerous compounds in clinical development, particularly in immunology, oncology, and neurology, positioning the company for sustained long-term growth. The company also successfully adopted new revenue recognition standards (ASC 606) with minimal impact and is preparing for future accounting standard changes.

Financial Highlights

51 data points
Beta

Revenue

$7.93B

75.7% Gross Margin

Net Income

$2.78B

35.1% Net Margin

EPS (Diluted)

$1.74

Total Assets

$69.34B

Cash & Equivalents

$9.01B

Free Cash Flow

$2.53B

Financial Statements
Beta
Revenue$7.93B
Cost of Revenue$1.93B
Gross Profit$6.01B
SG&A Expenses$1.79B
Operating Expenses$5.03B
Operating Income$2.90B
Interest Expense$309.00M
Net Income$2.78B
EPS (Basic)$1.74
EPS (Diluted)$1.74
Shares Outstanding (Basic)1.59B
Shares Outstanding (Diluted)1.60B

Key Highlights

  • 1AbbVie reported a 21.4% year-over-year increase in net revenues to $7.9 billion for Q1 2018, driven by strong performance across key products and segments.
  • 2HUMIRA sales grew 14.4% to $4.7 billion, and IMBRUVICA sales increased 38.5% to $762 million, demonstrating continued market strength.
  • 3The HCV segment experienced over 100% growth, largely attributable to the successful launch of MAVYRET.
  • 4Diluted earnings per share rose to $1.74, up from $1.06 in the prior year, indicating improved profitability.
  • 5Operating cash flow was robust at $2.6 billion, supporting significant shareholder returns through dividends ($1.1 billion) and share repurchases ($1.3 billion).
  • 6AbbVie is actively investing in its pipeline with over 60 compounds in clinical development across key therapeutic areas, with more than 30 in mid- to late-stage development.
  • 7The company announced a new $10.0 billion stock repurchase program and a cash tender offer to further enhance shareholder value.

Frequently Asked Questions

AbbVie's revenue growth was primarily driven by the sustained strong performance of its flagship product HUMIRA, significant growth from IMBRUVICA in oncology, and the substantial increase in the HCV segment following the launch of MAVYRET. Geographic expansion and favorable pricing also contributed to the overall revenue increase.

AbbVie is returning value to shareholders through a combination of increased cash dividends and share repurchases. The company declared a higher quarterly cash dividend and repurchased approximately $1.3 billion of its common stock during the quarter. Additionally, a new $10.0 billion stock repurchase program was authorized, indicating a continued focus on shareholder returns.

AbbVie maintains a robust pipeline with over 60 compounds and indications in clinical development, focusing on immunology, oncology, and neurology, as well as targeted investments in cystic fibrosis and women's health. Key developments include positive Phase 3 results for upadacitinib in rheumatoid arthritis and progress on risankizumab for psoriasis. The company is actively advancing multiple mid- and late-stage assets.

AbbVie adopted ASC 606 (Revenue from Contracts with Customers) using the modified retrospective method, which had a minimal impact on net earnings for Q1 2018, increasing net revenues by $43 million and net earnings by $15 million. The company also adopted other standards, such as ASC 2016-16 (Income Taxes), which resulted in a cumulative-effect adjustment to retained earnings. Management believes these adoptions did not materially alter the overall financial picture presented.