On May 1, 2020 AbbVie (NYSE:ABBV) reported financial results for the first quarter ended March 31, 2020 (Press release, AbbVie, MAY 1, 2020, View Source [SID1234556895]).
"During this challenging time, we are doing everything possible to ensure our employees remain safe, our patients receive their medicines and assistance is available to help those most deeply impacted by the COVID-19 pandemic," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "Our business continues to perform well and remains strong, which speaks volumes as to the robustness of our portfolio and the commitment from our many dedicated employees across the organization."
Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year’s foreign exchange rates. 1
Worldwide net revenues were $8.619 billion, an increase of 10.1 percent on a reported basis, or 10.7 percent operationally, including a 240 basis point stocking benefit related to the COVID-19 pandemic.
Global HUMIRA net revenues of $4.703 billion increased 5.8 percent on a reported basis, or 6.4 percent operationally. U.S. HUMIRA net revenues were $3.656 billion, an increase of 13.7 percent. Internationally, HUMIRA net revenues were $1.047 billion, a decrease of 14.9 percent on a reported basis, or 12.8 percent operationally, due to biosimilar competition.
Global net revenues from the hematologic oncology portfolio were $1.549 billion, an increase of 32.1 percent on a reported basis, or 32.3 percent operationally. Global IMBRUVICA net revenues were $1.232 billion, an increase of 20.6 percent, with U.S. net revenues of $966 million and international profit sharing of $266 million. Global VENCLEXTA net revenues were $317 million.
Global SKYRIZI net revenues were $300 million and global RINVOQ net revenues were $86 million.
On a GAAP basis, the gross margin ratio in the first quarter was 77.5 percent. The adjusted gross margin ratio was 82.7 percent.
On a GAAP basis, selling, general and administrative expense was 19.7 percent of net revenues. The adjusted SG&A expense was 18.6 percent of net revenues.
On a GAAP basis, research and development expense was 16.0 percent of net revenues. The adjusted R&D expense was 14.3 percent of net revenues, reflecting funding actions supporting all stages of our pipeline.
On a GAAP basis, the operating margin in the first quarter was 41.8 percent. The adjusted operating margin was 49.8 percent.
On a GAAP basis, net interest expense was $428 million. The adjusted net interest expense was $284 million.
On a GAAP basis, the tax rate in the quarter was 2.8 percent. The adjusted tax rate was 9.7 percent.
Diluted EPS in the first quarter was $2.02 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $2.42, including a $0.09 stocking benefit related to the COVID-19 pandemic.
Note: "Operational" comparisons are presented at constant currency rates and reflect comparative local currency net revenues at the prior year’s foreign exchange rates. 2
AbbVie announced a donation of $35 million to support COVID-19 relief efforts with partners International Medical Corps, Direct Relief and Feeding America. In the U.S., AbbVie’s funds will be used to support healthcare capacity for hospitals as well as protect vulnerable populations by enabling access to food and essential supplies. In Europe, the donation will provide critical equipment and supplies to patients and front-line healthcare workers in the hardest-hit countries. Additionally, AbbVie is doubling the AbbVie Foundation match for COVID-19-related contributions by its employees, whereby the AbbVie Foundation will match $2 to every $1 employees donate to a nonprofit for this purpose.
AbbVie is supporting COVID-19 clinical research by collaborating with health authorities and institutions globally to determine antiviral activity as well as efficacy and safety of KALETRA/ALUVIA (lopinavir/ritonavir), AbbVie’s antiretroviral therapy for the treatment of HIV, against COVID-19. Collaboration partners include European health authorities and the U.S. Food and Drug Administration (FDA), Centers for Disease Control and Prevention, National Institutes of Health and Biomedical Advanced Research and Development Authority. Along with industry partners, the company has joined the Innovative Medicines Initiative to support research and discovery of targeted medicines against COVID-19.
AbbVie has initiated the Phase 2 iNSPIRE clinical trial to evaluate the potential of IMBRUVICA (ibrutinib) to treat patients with moderate to severe COVID-19. The trial will evaluate the role of IMBRUVICA in preventing pro-inflammatory cytokines through multiple pathways and reducing the risk of pulmonary failure, the most common cause of mortality related to COVID-19 infection. The study aims to determine the safety and efficacy of adding IMBRUVICA to best supportive care in treating patients with COVID-19 pulmonary distress.
AbbVie announced it received final approval from the European Commission (EC) and has entered into a consent decree agreement with staff of the U.S. Federal Trade Commission (FTC) regarding AbbVie’s pending acquisition of Allergan. The consent decree remains subject to further review and approval by the Commissioners of the FTC. AbbVie and Allergan anticipate deal closing in May 2020.
AbbVie announced the FDA approval of IMBRUVICA in combination with rituximab for the treatment of previously untreated patients with chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL). The approval is based on positive results from the landmark Phase 3 E1912 study, in which IMBRUVICA plus rituximab demonstrated superior progression free survival (PFS) against the chemoimmunotherapy regimen of fludarabine, cyclophosphamide and rituximab (FCR) for previously untreated patients with CLL. This milestone marks the 11th FDA approval for IMBRUVICA since it was first approved in 2013 and the sixth in CLL. IMBRUVICA is jointly developed and commercialized with Janssen Biotech, Inc.
AbbVie announced that the EC has approved VENCLYXTO (venetoclax) in combination with obinutuzumab for the treatment of adult patients with CLL who were previously untreated. VENCLYXTO plus obinutuzumab is the first chemotherapy-free, fixed-duration combination regimen approved by the EC for patients with previously untreated CLL. Approval is based on data from the Phase 3 CLL14 trial, which showed that patients treated with obinutuzumab plus one year of treatment with VENCLYXTO had superior PFS and higher rates of undetectable minimal residual disease compared to patients receiving a standard of care chemoimmunotherapy regimen of obinutuzumab and chlorambucil. Venetoclax is being developed by AbbVie and Roche and is jointly commercialized by AbbVie and Genentech, a member of the Roche Group, in the U.S. and by AbbVie outside of the U.S.
Recent Events (continued)
AbbVie announced results from two Phase 3 studies (VIALE-A and VIALE-C) for VENCLEXTA (venetoclax) in patients with previously-untreated acute myeloid leukemia (AML) who are ineligible for intensive chemotherapy. The VIALE-A trial, which evaluated VENCLEXTA in combination with azacitidine versus azacitidine plus placebo, met its dual primary endpoints of overall survival (OS) and composite complete remission rate. The VIALE-A study was stopped early due to positive efficacy results at the first interim analysis for OS. The VIALE-C trial, which evaluated VENCLEXTA in combination with low-dose cytarabine (LDAC) versus LDAC plus placebo, did not demonstrate statistically significant improvement in the primary endpoint of OS, but results were indicative of clinical activity of VENCLEXTA in combination with LDAC. In November 2018, AbbVie received accelerated approval in the U.S. for VENCLEXTA in combination with azacitidine, decitabine, or LDAC for the treatment of newly-diagnosed AML in adults who are age 75 years or older, or who have comorbidities that preclude use of intensive induction chemotherapy based on the Phase 1/2 studies. The results of VIALE-A and VIALE-C will be provided to the FDA and submitted for regulatory approval by other global health authorities later this year.
AbbVie announced that the EC has approved a change to the marketing authorization for MAVIRET (glecaprevir/pibrentasvir) to shorten once-daily treatment duration from 12 to 8 weeks in treatment-naïve, compensated cirrhotic, chronic hepatitis C (HCV) patients with genotype (GT) 3 infection. The decision makes MAVIRET the only pan-genotypic (GTs 1-6) 8-week treatment option for treatment-naïve, chronic HCV patients, without cirrhosis or with compensated cirrhosis. The approval is supported by data from the Phase 3b EXPEDITION-8 study, which showed that with 8 weeks of MAVIRET, an overall 98 percent patients achieved a sustained virologic response 12 weeks after treatment (SVR12), and for patients with GT3, the SVR12 rate was over 95 percent.
Full-Year 2020 Outlook
AbbVie is updating its standalone GAAP diluted EPS guidance for the full-year 2020 from $7.66 to $7.76 to $7.60 to $7.70, representing growth of 44.9 percent at the midpoint. AbbVie is confirming the previous expectation to deliver standalone adjusted diluted EPS for the full-year 2020 of $9.61 to $9.71, representing growth of 8.1 percent at the midpoint. The company’s standalone 2020 adjusted diluted EPS guidance excludes $2.01 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items.
Statements Required by the Irish Takeover Rules
The directors of AbbVie accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of AbbVie (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Any holder of 1 percent or more of any class of relevant securities of AbbVie Inc. may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013.