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AbbVie Inc. 8-K Report, Financial Results (Jul 25, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 25, 2024
Period End
July 25, 2024
Security
ABBV
In the record · 2016–202610-K1110-Q328-K163

ABBV filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 163 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Nov ’16Nov ’16
  2. Material agreement8-K · May ’20May ’20
  3. Leadership change8-K · Nov ’22Nov ’22
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed July 25, 2024. Cited figures are marked; the original filing is the authoritative source.

AbbVie reported second-quarter 2024 results that beat its internal expectations, according to CEO Robert A.

Michael. Net revenues rose 4.3% reported (5.6% operational) to $14.462 billiona. GAAP diluted EPS fell 32.5% to $0.77, while adjusted diluted EPS declined 8.9% to $2.65.

Both figures absorbed a $0.52b per-share hit from acquired IPR&D and milestones expense ($937 million pre-tax). The GAAP operating margin was 27.6%, compared with an adjusted operating margin of 42.6%. The GAAP tax rate was 36.0%, versus an adjusted rate of 18.8%.

The quarter shows a clear shift in the revenue mix away from Humira. Global Humira sales fell 29.8% to $2.814 billionc as U.S. biosimilar competition continued. Growth came from Skyrizi (+44.8% to $2.727 billion) and Rinvoq (+55.8% to $1.430 billion), along with Vraylar, Botox Therapeutic, Venclexta and Qulipta.

Management raised its full-year 2024 adjusted diluted EPS guidance to $10.71 to $10.91d from $10.61 to $10.81. The raise includes the $0.60 per-share year-to-date IPR&D and milestones charge, and the guidance excludes any future IPR&D or milestone charges because they cannot be reliably forecast. The filing also covers a leadership change, with Robert A.

Michael becoming CEO effective July 1, 2024 and Richard A. Gonzalez becoming executive chairman.

It lists several regulatory and pipeline events, including the FDA approval of Skyrizi for ulcerative colitis, a positive CHMP opinion for Skyrizi, the Rinvoq GCA filings, the Epkinly approval in follicular lymphoma, and a Complete Response Letter for ABBV-951 that cited third-party manufacturing inspection observations. The forward-looking statements section also references the pending acquisition of Cerevel Therapeutics.

02—Key points

Key Highlights

  1. Net revenues of $14.462 billion grew 4.3% reported (5.6% operational), led by immunology and neuroscience growth.
  2. GAAP diluted EPS fell 32.5% to $0.77 from $1.14, while adjusted diluted EPS declined 8.9% to $2.65 from $2.91, mainly due to a $0.52 per-share acquired IPR&D and milestones charge.
  3. Skyrizi (+44.8% to $2.727 billion) and Rinvoq (+55.8% to $1.430 billion) are offsetting the steep Humira decline (-29.8% to $2.814 billion).
  4. Full-year 2024 adjusted diluted EPS guidance was raised to $10.71 to $10.91 from $10.61 to $10.81, inclusive of $0.60 per share of year-to-date IPR&D and milestones expense.
  5. Robert A. Michael became CEO effective July 1, 2024, succeeding Richard A. Gonzalez, who becomes executive chairman.
  6. Key regulatory milestones include FDA approval of Skyrizi for ulcerative colitis and Epkinly for relapsed or refractory follicular lymphoma, plus a Rinvoq GCA submission.
  7. The FDA issued a Complete Response Letter for ABBV-951 (Parkinson's) citing third-party manufacturing inspection observations, not safety or efficacy concerns.

03—Questions

Frequently Asked Questions

  1. Why did GAAP EPS drop so sharply while revenue grew?

    GAAP diluted EPS fell to $0.77 from $1.14 mainly because of higher acquired IPR&D and milestones expense ($937 million pre-tax in Q2 2024 versus $280 million in Q2 2023), which reduced EPS by $0.52. The GAAP tax rate also rose to 36.0% from 22.3%, and the change in fair value of contingent consideration added a $1,476 million charge. Adjusted EPS, which excludes items such as intangible amortization and contingent consideration changes, fell a more modest 8.9%.

  2. Is AbbVie's Humira decline being offset by newer drugs?

    Partially. Global Humira revenue fell 29.8% to $2.814 billion, but Skyrizi and Rinvoq together generated about $4.157 billion in Q2 2024, up roughly 47% year over year. Combined immunology revenue rose 2.3% reported to $6.971 billion. Growth in oncology, neuroscience and certain other products also contributed to the overall 4.3% revenue increase.

  3. Did AbbVie change its full-year guidance?

    Yes. Adjusted diluted EPS guidance was raised to $10.71 to $10.91, up $0.10 at both ends of the prior $10.61 to $10.81 range. The company noted that the raised figure includes a $0.60 per-share year-to-date charge for acquired IPR&D and milestones. Guidance excludes any such charges that may occur after the second quarter because they cannot be reliably forecast.

  4. What does the CEO transition mean for investors?

    Robert A. Michael took over as CEO effective July 1, 2024, and joined the board. Richard A. Gonzalez, who had led the company since its 2013 inception, became executive chairman. The filing does not describe changes to strategy, so investors may want to watch management commentary on the post-Humira growth plan and the pipeline.

  5. What regulatory risks or setbacks should investors watch?

    The main setback is the FDA Complete Response Letter for ABBV-951, an investigational treatment for motor fluctuations in advanced Parkinson's disease. The letter cited inspection observations at a third-party manufacturer, not safety, efficacy or labeling issues, and did not request additional trials. Investors should monitor the timing of resubmission and approval. The filing also notes the pending Cerevel Therapeutics acquisition as a forward-looking risk factor.

04—Continue

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