01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
AbbVie Inc. reported first-quarter 2024 results with total net revenues of $12.31 billiona, a slight increase of 0.7% on a reported basis and 1.6% on a constant currency basis compared to the prior year.
Net earnings attributable to AbbVie Inc. were $1.369 billionb, a significant increase from $239 million in the first quarter of 2023, leading to diluted earnings per share of $0.77. This substantial earnings improvement was largely influenced by a significant decrease in "Other expense, net" which included a much smaller change in the fair value of contingent consideration compared to the prior year, and a reduction in acquired IPR&D and milestones expenses. The company's strategic focus remains on maximizing its diversified revenue base, leveraging commercial strength for new product launches, and investing in its pipeline across immunology, oncology, aesthetics, neuroscience, and eye care.
The acquisition of ImmunoGen for $9.8 billionc was completed in February 2024, significantly impacting the balance sheet with increased intangible assets and goodwill, and also contributed to higher operating expenses in the quarter. AbbVie is also advancing its proposed acquisition of Cerevel Therapeutics, further diversifying its therapeutic areas. Key growth drivers included strong performance from Skyrizi and Rinvoq, which saw substantial revenue increases of 47.6% and 59.3% respectively.
Conversely, Humira experienced a significant decline of 35.9%d due to ongoing biosimilar competition. The company continues to generate strong operating cash flows, providing resources for R&D investment and shareholder returns.
02—Key points
Key Highlights
- AbbVie reported Q1 2024 net revenues of $12.31 billion, up 0.7% year-over-year (1.6% on a constant currency basis).
- Net earnings attributable to AbbVie Inc. surged to $1.369 billion from $239 million in Q1 2023, resulting in diluted EPS of $0.77.
- The $9.8 billion acquisition of ImmunoGen was completed in February 2024, significantly increasing intangible assets and goodwill, and contributing to higher operating expenses.
- Key growth drivers Skyrizi and Rinvoq revenue increased by 47.6% and 59.3% respectively, demonstrating strong market uptake.
- Humira revenue declined by 35.9% due to ongoing biosimilar competition, highlighting a significant shift in the immunology portfolio.
- Operating cash flow remained strong at $4.04 billion, supporting continued R&D investment and shareholder returns.
- AbbVie announced plans to acquire Cerevel Therapeutics for approximately $8.7 billion, expanding its neuroscience portfolio.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, AbbVie Inc. kept $0.11.
- Revenue$12.31B100.0%
- Cost of revenue−$4.09B33.3%
- Gross profit$8.22B66.7%
- Operating costs−$5.42B44.0%
- Operating income$2.80B22.7%
- Interest, other & tax−$1.43B11.6%
- Net income$1.37B11.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $12.31B$12.22B | +0.7% |
| Cost of Revenue | $4.09B$3.99B | +2.7% |
| Gross Profit | $8.22B$8.24B | −0.3% |
| SG&A Expenses | $3.31B$3.04B | +9.1% |
| Operating Expenses | $9.51B$9.46B | +0.6% |
| Operating Income | $2.80B$2.77B | +1.1% |
| Interest Expense | $660.00M$553.00M | +19.3% |
| Net Income | $1.37B$239.00M | +472.8% |
| EPS (Basic) | $0.77$0.13 | +492.3% |
| EPS (Diluted) | $0.77$0.13 | +492.3% |
| Shares Outstanding (Basic) | 1.77B1.77B | −0.1% |
| Shares Outstanding (Diluted) | 1.77B1.78B | −0.2% |
05—Questions
Frequently Asked Questions
What was the primary driver for the significant increase in net earnings from Q1 2023 to Q1 2024?
The substantial increase in net earnings was primarily driven by a significant reduction in "Other expense, net." This was mainly due to a much smaller change in the fair value of contingent consideration liabilities in Q1 2024 compared to Q1 2023, which had a large unfavorable impact in the prior year. Additionally, acquired IPR&D and milestones expenses also decreased.
How is the acquisition of ImmunoGen impacting AbbVie's financials?
The acquisition of ImmunoGen, completed in February 2024 for $9.8 billion, has significantly increased AbbVie's intangible assets and goodwill on the balance sheet. In the first quarter, ImmunoGen contributed $91 million in net revenues but also reported operating losses of $404 million, inclusive of integration and amortization costs. Acquisition-related expenses also added to SG&A and R&D in the quarter.
What is the outlook for key growth products like Skyrizi and Rinvoq, given the decline in Humira?
Skyrizi and Rinvoq continue to be strong growth drivers, with revenues increasing by 47.6% and 59.3% respectively in Q1 2024. This growth is attributed to strong market share uptake and expansion across various indications. AbbVie is clearly leveraging these products to offset the ongoing revenue erosion from Humira due to biosimilar competition.
How is AbbVie managing its debt and liquidity following the ImmunoGen acquisition and the planned Cerevel Therapeutics acquisition?
AbbVie financed the ImmunoGen acquisition and plans to fund the Cerevel Therapeutics acquisition through a combination of significant debt issuance ($15.0 billion in senior notes) and existing cash flows. The company reported strong operating cash flow of $4.04 billion in Q1 2024 and has access to a $5.0 billion revolving credit facility. While debt has increased, AbbVie appears to maintain sufficient liquidity and financial flexibility.
06—Continue