CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page1of22
AbbVie(ABBV)EarningsReport:Q42015ConferenceCallTranscriptThefollowingAbbVieconferencecalltookplaceonJanuary29,2016,09:00AMET.Thisisatranscriptofthatearningscall:
CompanyPart icipants
LarryPeepo;AbbVie,Inc.;InvestorRelationsRickGonzalez;AbbVie,Inc.;Chairman&CEOMichaelSeverino;AbbVie,Inc.;ChiefScientificOfficerBillChase;AbbVie,Inc.;CFO
OtherPart icipants
ChrisSchott;JPMorganChase;AnalystJamiRubin;GoldmanSachs;AnalystMarcGoodman;UBS;AnalystMarkSchoenebaum;ISIGroup;AnalystDavidRisinger;MorganStanley;AnalystVamilDivan;CreditSuisse;AnalystAlexArfaei;BMO;AnalystSteveScala;Cowen;AnalystJohnBoris;SunTrustRobinsonHumphrey;AnalystColinBristow;BofAMerrillLynch;AnalystAndrewBaum;Citi;Analyst
MANAGEMENTDISCUSSIONSECTION
Operator :
WelcometotheAbbViefourth-quarter2015earningsconferencecall.
(OperatorInstructions)
Thiscallisbeingrecorded.Ifyouhaveanyobjectionsyoumaydisconnectatthispoint.
IwouldnowliketointroduceMr.LarryPeepo,VicePresidentofInvestorRelations.
LarryPeepo (InvestorRelations):
Goodmorning.Thanksforjoiningustoday.
AlsoonthecallwithmeareRickGonzalez,ChairmanoftheBoardandChiefExecutiveOfficer;MichaelSeverino,ExecutiveVicePresidentofResearch&DevelopmentandChiefScientificOfficer;andBillChase,ExecutiveVicePresidentofFinanceandChiefFinancialOfficer.
BeforewegetstartedIremindyouthatsomestatementswemaketodaymaybeconsideredforward-lookingstatementsforthepurposesofthePrivateSecuritiesLitigationReformActof1995.AbbViecautionsthattheseforward-lookingstatementsaresubjecttorisksanduncertaintiesthatmaycauseactualresultstodiffermateriallyfromthoseindicatedintheforward-lookingstatements.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page2of22
AdditionalinformationaboutthefactorsthatmayaffectAbbVie'soperationsisincludedinour2014annualreportonForm10-KandinourotherSECfilings.AbbVieundertakesnoobligationtoreleasepubliclyanyrevisionstoforward-lookingstatementsasaresultofsubsequenteventsordevelopmentsexceptasrequiredbylaw.
Ontoday'sconferencecallasinthepastnon-GAAPfinancialmeasureswillbeusedtohelpinvestorsunderstandAbbVie'songoingbusinessperformance.Thesenon-GAAPfinancialmeasuresarereconciledwithcomparableGAAPfinancialmeasuresinourearningsreleaseandregulatoryfilingsfromtodaywhichcanbefoundonourwebsite.
Followingourpreparedremarkswewilltakeyourquestions.SowiththatIwillnowturnthecallovertoRick.
RickGonzalez (Chairman&CEO):
Thankyou,Larry.Goodmorningeveryoneandthankyouforjoiningustoday.
ThismorningIwillbrieflydiscussourfourth-quarterperformanceandour2015operationalhighlights.MikewillthenprovideupdatesonrecentadvancementsacrossourR&DprogramsandBillwilldiscussthequarterandour2016guidanceinmoredetail.Asalways,followingourremarkswewilltakeyourquestions.
Wedeliveredanotherstrongperformanceinthefourthquarterwithresultsaheadofexpectationsincludingadjustedearningspershareof$1.13,representinggrowthof27%versusthefourthquarterof2014.Ourfourth-quarterperformancecapsoffaverystrongyearforAbbViewithsalesandearningswellaboveouroriginalprojectionsfortheyear.Wedelivered22%globaloperationalsalesgrowthin2015andweincreasedongoingearningspersharebymorethan29%.
We'vedrivenstrongcommercial,operationalandR&Dexecution,resultinginindustry-leadingperformancewithbothstrongrevenuegrowthandimprovementinouroperatingmarginprofile.AbbVie'sEPSgrowthfor2015ranksusamongthetopgrowthcompaniesinourindustry.
Clearly,2015wasayearofexcellentperformance.WedeliveredoutstandingresultsfromourcurrentportfoliowithstronggrowthfromHUMIRAwhichdrove19%globaloperationalgrowthin2015includingUSgrowthofnearly29%andinternationaloperationalgrowthof8.6%.WesawcontinuedstrongmomentumfromIMBRUVICAwithfull-year2015salesinexcessof$1billion.
GlobalVIEKIRAperformance,althoughbelowouroriginalexpectations,generatedmorethan$1.6billioninitsfirstyearonthemarket.AndwehadstrongperformancefromotherproductsinourportfolioincludingCreon,LupronandDuodopa.
Overthepastyearwe'veseensignificantpipelineadvancementandachievedanumberofimportantdevelopmentandregulatorymilestones.WesecuredapprovalsforseveralassetsincludingHUMIRAasatreatmentforHS,ouroncedailyHCVcombinationinJapanandourpartnerreceivedapprovalforelotuzumabforrelapsedrefractorymultiplemyeloma.
Wesuccessfullycompletedregistrationalstudiesandsubmittedregulatoryapplicationsforanumberofprogramsincludingvenetoclaxforrelapsed/refractoryCLL,IMBRUVICAforfirst-lineCLL,Z inbrytaformultiplesclerosisandHUMIRAforuveitis.Wesuccessfullycompletedmid-stageclinicaltrialsandtransitionedintotheregistrationenablingphaseofdevelopmentforseveralkeyprogramsincludingourselectiveJAK1inhibitorAVG-494inRA,ourpan-genotypicnext-generationHCBcombinationelagolixforuterinefibroidsandABT-414,ourantibodydrugconjugateforglioblastomamultiforme.
Wealsoreportedcompellingdatafromseveraldevelopmentprogramsincludingelagolixpivotaldatain
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page3of22
endometriosis,theHELIOSandRESONATE-2IMBRUVICAdatawhichweanticipatewillbereflectedintheproductlabelthisyearandvenetoclaxdatainseveralcancertypesincludingrobustresultsinCLLandAML.Infact,thedatawepresentedonvenetoclaxthisyearhasresultedinthreebreakthroughtherapydesignations,astatusgrantedbytheFDAwhenclinicalevidenceindicatesthatamedicinemaydemonstrateasubstantialimprovementoverexistingtherapies.
Webelievevenetoclaxhassignificantpotentialacrossawiderangeofbloodcancerswiththefirstofpotentiallynumerousindicationscominginthefirsthalfofthisyear.Theprogresswe'vemadewithourpipelineincludingtheimpressivedatawe'vesharedoverthepastyearhasfurtherincreasedourlevelofconfidenceandderiskedmanyofourkeyR&Dprograms.Numerousassetsinourlatestagepipelinehavetheopportunitytogeneratemultibillion-dollarpeakyearsalesandrepresentanopportunityformeaningfulrevenuegrowthintheyearstocome.
2016promisestobeanothermilestonefilledyearwithsignificantactivityacrossourpipelinewhichMikewilldiscussinmoredetailhereinjustafewmoments.In2015wealsoaugmentedourportfolioandourpipelinethroughstrategiclicensingandacquisitionactivity.TheacquisitionofPharmacyclicsprovidedamajornewgrowthplatforminakeystrategicarea:hematologicaloncology.
IMBRUVICA,whichisnowablockbustertherapy,offerssignificantgrowthpotentialthroughitsexistingandexpandinglistofindicationsandlinesoftherapy.WeremainexcitedaboutthepotentialforIMBRUVICAandwearepleasedthatourthesisisplayingoutasweexpected.
Withinthehematologicaloncologysegment,wehaveinvestedstrategicallytobuildaportfolioofmedicineswiththepotentialtotransformthecareofalargerangeofmalignancies.Ourportfolioincludesthreenovelmechanismsofaction:BTKinhibition,BCL-2inhibition,PI3kinasedualinhibition.Thesemechanismsareeitheron-market,underregulatoryrevieworinregistrationenablingtrials.
We'rewell-positionedtobuilduponourleadershipinthiscategorywithuniquecombinationsoftheseandotheragents.Overthepastyearwe'vedeliveredastrongreturnofcapitaltoourinvestors,includingarapidlygrowingdividendwhichhasgrown42%sinceourinceptionaswellassharerepurchase.Weremaincommittedtoabalancedcapitalallocationstrategy,returningcashtoshareholderswhilecontinuingtoaddstrategicallytoourpipeline.
FollowingouracquisitionofPharmacyclicslastyearourfocusinthenear-termisoncontinuingtoaugmentourtherapeuticareasoffocus,especiallyoncologyandimmunology.Weevaluateopportunitiesthatfitourstrategiccriteriaandcandeliverstrongreturns.
In2015wealsodroveimprovedefficiencyacrossouroperations,deliveringsignificantoperatingmarginexpansionwhilecontinuingtoinvestinR&DandSG&Atodrivefuturegrowth.Wehavedeliveredasignificantlevelofmarginexpansiontodateandweremaincommittedtodoingmoretoimproveouroperatingmarginprofilegoingforward.
Ourfocusonoperatingefficiencieswilldriveouradjustedoperatingmarginprofiletogreaterthan50%by2020.We'veentered2016withstrongmomentumwhichweintendtobuildupontodriveahighlevelofperformanceacrossouroperationsandstronggrowth.Ourfull-year2016EPSguidanceof$4.90to$5.10representsgrowthof16.5%atthemidpoint,positioningAbbVietobeamongtheindustryleadersforEPSgrowthonceagainthisyear.
Onourthird-quarterconferencecallweoutlinedourlong-termguidanceforanumberofkeymetricsincludingourexpectationsfortop-andbottom-linegrowthandmarginexpansionoverourfive-yearplan.Weremaincommittedtodeliveringontheselong-termobjectiveswhichwillgeneratedouble-digitEPSgrowthonaveragethrough2020.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page4of22
Soinsummary,we'repleasedwithourstrongexecutionandthesignificantadvancementswemadein2015.Overthepastyearwe'vedemonstratedastrongtrackrecordofsuccesswithpositiveclinicaldataandregulatoryoutcomesandwelookforwardtonumerousimportantpipelinemilestonesintheyearahead.
We'veconsistentlydeliveredonourcommitmentsandarepositionedforanotheryearofstronggrowth.We'vebuiltastrongfoundationandwe'refocusedongeneratingtop-tierfinancialperformanceintheyearstocome.
WiththatIwillturnthecallovertoMikeforadditionalcommentsonourR&Dprogram.Mike?
MichaelSeverino (ChiefScientificOfficer):
Thankyou,Rick.In2015wesignificantlyadvancedandderiskedourpipelineandachievedanumberofimportantregulatorymilestones.Andweexpect2016tobeaveryproductiveyearaswellwithpotentialforseveralregulatorysubmissionsandapprovals,keydatareadoutsandphasetransitions.
Wehaveabroadpipelinethatincludesmorethan50activeclinicaldevelopmentprogramsincludingmorethan20newproductsorindicationsinlatestagedevelopmentaroundaregulatoryreview.
TodayI'llhighlightrecentupdatesanddiscusssomeofthemilestonesweanticipateintheyeartocome.I'llstartwithhematologiconcology,anareawherewehaveinvestedheavilyandareuniquelypositioned.
AsRickmentioned,wehavebuiltastrategicportfolioofassetsincludingmultiplemechanismsofactionthathavesignificantpotentialaloneandincombination.ThedevelopmentprogramsforourflagshiponcologyproductIMBRUVICAcontinuestoprogressnicely.Ournextopportunityforlabelexpansionisinthefirst-lineCLLsetting.
DatafromtheRESONATE-2trialintreatment-naiveCLLpatientsrecentlypublishedinTheNewEnglandJournalofMedicineshowedtreatmentwithIMBRUVICAresultedinan84%reductionintheriskofdiseaseprogressionversuschlorambucilwith87%ofpatientsremainingonsingleagentIMBRUVICAtreatmentat18months.Additionally,treatmentwithIMBRUVICAshowedan84%reductioninoverallmortality.WebelieveRESONATE-2representsapracticechangingstudythatwillsetanewtreatmentstandardformanytreatment-naivepatients.
WesubmittedasupplementalnewdrugapplicationtotheFDAwhichiscurrentlyunderpriorityreviewandweanticipateapprovalinthefirsthalfof2016.IMBRUVICAisalsobeingevaluatedinmidtolatestagetrialsinfollicularlymphoma,marginalzonelymphoma,diffuselargeB-celllymphoma,multiplemyeloma,graftversushostdiseaseandpancreaticcancer.
AttherecentASHmeeting,65IMBRUVICA-relatedabstractswerepresentedincludingdatafromseveralstudiesandpotentialnewindications.Andthereispotentialfordataflowandpossibleregulatorysubmissionsthisyearforseveralindicationsincludingtreatment-naivemantle-celllymphoma,relapsed/refractoryfollicularlymphomaandtreatment-naivediffuselargeB-celllymphomawithtimingdependentonevent-drivenanalysesofongoingstudies.
Intheareaofimmuno-oncologyongoingtrialsevaluatingIMBRUVICAincombinationwithcheckpointinhibitorsareprogressingwellwiththepotentialtoseeproof-of-conceptdatainsolidtumorsoverthecourseoftheyear.
Anotherimportantstrategicassetinouroncologyportfolioisvenetoclax,ournovelBcL-2inhibitor,whichhasdemonstratedstrongefficacy,achievingdeeplevelsofresponseanddurablediseasecontrolbothasmonotherapyandincombinationwithrituxaninpatientswithrelapsedrefractoryCLL.Venetoclaxis
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page5of22
currentlyunderpriorityreviewforrelapsed/refractoryCLLincludingpatientswhosetumorsharborthe17pdeletionmutationandweexpectFDAactioninthefirsthalfof2016.
AtASHwepresenteddataintherelapsed/refractoryCLLpatientsincombinationwithRituxan,showinganoverallresponserateof86%andacompleteresponserateof47%.Additionally,minimalresidualdiseasenegativityinthebonemarrowwasobservedin55%ofallpatientstreatedwiththecombination.We'reveryencouragedbythedepthoftheresponsesdrivenbycombinationtherapyinthispatientpopulation.
Basedonthesedata,earlierthismonththeFDAgrantedbreakthroughtherapydesignationforvenetoclaxwhenusedincombinationwithRituxan.WealsobelieveBcL-2willbeeffectiveinotherhematologicmalignancies.Werecentlypresentedencouragingvenetoclaxdataintreatment-naiveAMLpatientsover65yearsofagewhoareineligibleforintensiveinductionchemotherapy.
Theearlydatashowedcombinationtreatmentwithvenetoclaxandhypomethylatingagentsresultedincompleteresponseratesofapproximately71%whichisroughlydoubletheresponseratethatwouldbeexpectedwiththecurrentstandardofcare.AndbasedonthesepromisingresultsearlierthisweektheFDAgrantedthethirdvenetoclaxbreakthroughtherapydesignation.Wearemovingexpeditiouslyintheregistrationaltrialsforthisindication.
InadditiontoIMBRUVICAandvenetoclaxwearedevelopingadualPI3kinaseinhibitorduvelisibcurrentlyinlatestagedevelopment.IncollaborationwithourpartnerInfinitywe'llseedataonduvelisibinrelapsed/refractoryNHLandCLLinthesecondhalfoftheyearwithpotentialregulatorysubmissionstofollow.Wearewell-positionedtocontinuetoevolvethetreatmentlandscapeinCLLandotherbloodcancersbyexploringnovelcombinationsincludingtheprogramsinourpipelineandothermechanismsWithagoaltoachievedeepdurablediseasecontroland/orremissionswhilereducingoreliminatingtheuseoftoxicchemotherapy.
Tothatendwehavenumerouscombinationtrialsunderwayorstartingin2016.ThisincludesourPhase3studyofachemotherapy-freecombinationofvenetoclaxandGazyvainfirst-lineunfitCLLpatients.Thisstudyisunderwayandenrollingwell.
AlargePhase3studyisbeinginitiatedincollaborationwiththeGermanCLLworkinggrouptoevaluatetreatmentwithvenetoclaxincombinationwithavarietyoftherapiesincludingGazyvaandIMBRUVICAinpreviouslyuntreatedfitCLLpatients.Thisstudy,whichweexpecttoinitiatemidyear,willassesstheabilityofvenetoclax-basedcombinationstodriveachievementofminimalresidualdisease,whichhasbeenassociatedwithimprovedsurvivalinCLLpatients.
Toaugmentongoinginvestigatorsponsoredandcollaborativegroupstudiesevaluatingvenetoclaxandibrutinibcombinationswearedesigningcompany-sponsoredstudiestoevaluatethecombinationinfirst-lineCLLpatients.Inaddition,AbbVieandGenentecharefinalizingplanstopursueregistrationwillstudiesevaluatingcombinationsofvenetoclaxwithproteasomeinhibitorsinmultiplemyelomaandasImentionedpreviouslyincombinationwithhypomethylatingagentsinAML.Finally,wearepreparingtoinitiateadosefindingstudyevaluatingvenetoclaxandduvelisibinpatientswithavarietyofhematologicmalignancies.
Inadditiontoourworkinhematologiconcology,wehavealsobeeninvestinginanumberofprogramsforthetreatmentofsolidtumorsincludingourPARPinhibitorveliparibwithfivePhase3studiesunderwayinlung,breastandovariancancerandABT-414whichisindevelopmentforglioblastomamultiformeorGBM.GBMisthemostcommonandmostaggressivetypeofmalignantprimarybraintumor.PreviouslyreportedinterimresultsfromaPhase1clinicaltrialofABT-414showedthatroughly25%ofpatientswithEGFRamplificationortheB3varianttreatedwithABT-414inadditiontostandardofcareachievedan
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page6of22
objectiveresponse.
Theseresultsillustratealevelofefficacynottypicallyseeninthisdifficult-to-treatcancerwherehistoricdataofresponseratesinourrefractorypopulationhavebeenlessthan10%.Laterthisyearwe'llseeadditionaldataforABT-414insecond-lineGBM.Ifthedataareconsistentwithearlierstudies,thesetrialscouldrepresentapathtoaregulatorysubmissioninthesecondhalfof2016.
Inparallel,largerrandomizedcomparativeregistrationaltrialsareongoinginfirst-andsecond-lineGBM.Wealsohaveanactiveprogramfocusedondrivingthenextwaveofimmuno-oncologydevelopmentbeyondcheckpointinhibitors.WerecentlyenteredintoacollaborationwithM.D.AndersonCancerCenterfocusedonthediscoveryanddevelopmentofnewimmuno-oncologytherapies.
Throughthisagreementwe'repairingM.D.Anderson'scuttingedgepreclinical,translationalandclinicalcapabilitieswithourstrengthinbiology,proteinengineeringandchemistrywithagoaltoacceleratethedevelopmentofnewmedicines.Weanticipateanumberofimmuno-oncologyassetsmovingintotheclinicthisyearandwelookforwardtosharingmoredetailsonourstrategyinthisareaatourR&DdayinJune.
Movingontoimmunology,ourstrategyiscentereduponidentifyingtreatmentsthatofferdifferentiatedprofilesrelativetocurrentlyavailabletherapieswithagoalofcontinuingtoraisethestandardofcare.Wehavemultiplemidandlatestagepipelineassetswithbest-in-classpotential.
Inlate2015weinitiatedaPhase3programinrheumatoidarthritisforourselectiveJAK1inhibitorABT-494followingpositiveresultsfromourmid-stageclinicaltrials.WeareparticularlyexcitedabouttheresultsofABT-494inadifficult-to-treatpopulation:anti-TNFinadequateresponders,agrowingsegmentoftheREmarket.ResultsfromtheBALANCE-ItrialinthispatientpopulationrecentlypresentedatACRillustratetheagent'spotentialtobeabest-in-classtherapywithACR20responsesupto73%andACR50responsesupto44%.
AdditionaldatafromourPhase2programwillbepresentedoverthecourseof2016andweexpecttocommercializeABT-494in2019.Wealsohaveadditionalimmunologycandidatesindevelopmentandwillseemid-stagedatafrommultipleprogramsin2016.
Finally,inimmunologywecontinuetoinnovatewithHUMIRA.LastyearwereceivedEUandUSapprovalforanewformulationofHUMIRA.Additionally,wehavesubmittedregulatoryapplicationsforanimprovedHUMIRApendeviceandourUSandEuropeanregulatoryapplicationsforuveitisarecurrentlyunderreviewwithdecisionsexpectedinthesecondhalfofthisyear.
Movingnowtovirologywhereourgoalistodevelopanext-generationassetthatoffershighcureratesinaribavirinandritonavir-freeregimen.Mid-stagedataindicatethatournewpan-genotypiccombinationcandelivercureratesapproaching100%andwebelievethemajorityofpatientswillbewellservedwithaneight-weektreatmentoption.
LatelastyearweinitiatedacomprehensiveregistrationalprogramincludingsixglobalPhase3studies.Wewillstarttoseedatafromourregistrationaltrialslaterthisyearandthiscombinationispoisedforcommercialentrynextyear.
Inneurologywe'refocusedontherapiesforthetreatmentofconditionslikeAlzheimer'sdisease,Parkinson's,MSandotherneurodegenerativeconditions.Z inbrytaisourfirst-in-classinvestigationalbiologicforrelapseremittingmultiplesclerosiswhichiscurrentlyunderregulatoryreviewintheUSandEuropewithregulatorydecisionsexpectedinthefirsthalfof2016.ThefilingsarebaseduponstrongpivotaltrialresultswhichdemonstratedpatientstreatedwithZ inbrytahadastatisticallysignificant45%reductioninannualizedrelapseratesversusAvonex,anestablishedstandardofcare.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page7of22
Giventheproductprofile,novelmechanismofactionanditsonce-monthlysubcutaneousadministrationwebelieveZ inbrytahasthepotentialtobeanimportanttherapeuticoption.LastyearweenteredintoacollaborationwithC2NDiagnosticstodevelopandcommercializeaportfolioofanti-tauantibodiesforthetreatmentofseriousneurodegenerativedisorders.
LastyearweinitiatedaPhase1programinpatientswithprogressivesupernuclearpalsyandweremainontracktostartclinicaldevelopmentwithC2NinAlzheimer'sdiseasein2016.Finally,elagolixisourcompoundinPhase3developmentforendometriosisanduterinefibroids.Ourgoalwithelagolixandendometriosisistobringtomarketanoraltherapythatprovidesahighlevelofefficacywithminimalmenopausalsideeffectssuchashotflashwhilepreservingbonehealth.
Wereportedpositiveresultsfromourfirstpivotaltrialinendometriosislastyearandplantoreporttop-lineresultsfromthesecondpivotalstudyinthefirstquarterof2016.WealsoplantopresentmoredetailedfindingsfrombothregistrationaltrialsattheASRNmeetinginOctober.WealsorecentlyinitiatedaPhase3programinvestigatingtheeffectofelagolixonbleedingrelatedtouterinefibroids.
Soinsummary,wecontinuetomakesignificantprogresswithourpipelineandareontracktoadvanceseveralprogramsin2016.We'vebuiltapromisinglate-stagepipelinecomprisedofpotentiallytransformationalmedicineswhichwillfuelourfuturegrowth.
WelookforwardtocoveringourfullpipelineinmoredetailatanR&DpipelinereviewtobeheldinChicagoduringthe2016ASCOmeetinginJune.Wehopeyouwilljoinus.
WiththatIwillturnthecallovertoBillforadditionalcommentsonthequarterandour2016guidance.
BillChase (CFO):
Thankyou,Mike.ThismorningI'llsharewithyouthehighlightsofourfull-year2015performance,provideanoverviewofourfourth-quarterresultsandthenwalkthroughouroutlookfor2016.
Wehadastrongperformancein2015,allowingustoraiseourfull-yearEPSguidancerangetwiceduringtheyearandultimatelydeliversales,marginexpansionandearningsprojectionsthatexceededouroriginalexpectations.Forthefull-year2015,adjustednetrevenueswere$22.8billion,up22%onanoperationalbasis.Weexpandedouradjustedoperatingmarginprofileto42.3%in2015,up610basispointsfortheyear.AndasRickmentionedwereportedadjustedearningspershareresultsof$4.29,upmorethan29%fortheyear.
Turningtothefourthquarter,totaladjustedsaleswere$6.4billion,upmorethan24%onanoperationalbasis.Unfavorableimpactsfromforeignexchangeratefluctuationsreducedsalesgrowthinthequarterby6%.HUMIRAdeliveredglobalsalesof$3.8billioninthequarter,up16%operationallyexcludingtheimpactofforeignexchange.
IntheUS,HUMIRAsalesweremorethan$2.3billion,increasingnearly21%reflectingexceptionalgrowthacrossallthreemajorcategories:rheumatology,gastroanddermatology.Internationally,HUMIRAsaleswerenearly$1.4billioninthequarter,upastrong9.7%onanoperationalbasisexcludinganunfavorableimpactfromexchange.GlobalHUMIRAsalesforthefull-year2015were$14billion,up19.1%operationallyversustheprioryear.
InternationalHUMIRAsalesin2015increased8.6%onanoperationalbasis.
GlobalIMBRUVICAnetrevenueswere$343millioninthequarter.USsaleswere$295millionandourinternationalprofit-sharingwas$48million.
SincetheclosingofthePharmacyclicsacquisitiononMay26,IMBRUVICAhasdriven$754millionofnew
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page8of22
revenueforAbbVieandwearepleasedwithitsprogress.AsignificantportionofourvaluationforPharmacyclicsisattributedtoadvancingintofirst-linetherapyintreatment-naiveCLLpatientsandthesubmissionofthestrongRESONATE-2datatotheFDAthisquarterbodeswellforthisassumption.
GlobalVIEKIRAsalesinthefourthquarterwere$554million.Theinternationallaunchhasexceededourplanningexpectations,resultinginahighermixofinternationalsalesagainthisquarter.Asexpected,VIEKIRAX,ourtwo-drugonce-dailyribavirin-freecombinationforthetreatmentofgenotype1BinJapanlaunchedlateinthefourthquarter.
GlobalsalesofDuodopa,ourtherapyforadvancedParkinson'sdisease,grew24.4%onanoperationalbasisinthequarter.Wesawcontinueddouble-digitgrowthinternationallyforDuodopawithamodestlevelofUSsalesasexpected.GlobalDuodopasalesforthefull-year2015were$231million,up23.5%operationallyversustheprioryear.
GlobalCreonsaleswere$185million,up22.8%.Full-yearsalesofCreonwere$632million,up22.5%versus2014.Creonmaintainsitsleadershippositioninthepancreaticenzymemarketwithroughly70%share.
GlobalLupronsaleswere$235millioninthefourthquarter,up15.6%onanoperationalbasis.Forthefullyear,globalLupronsaleswere$826million,up9.3%exceedingourexpectations.Luproncontinuestoholdaleadershippositionandmaintainssignificantshareofthemarket.
TurningtotheP&Lprofileforthefourthquarter,theadjustedgrossmarginratiowas80.5%excludingamortizationandotherspecifieditems.ExcludingtheimpactofPharmacyclics,wesawanearly100basisimprovementyearoveryear.InthefourthquarteradjustedR&Dwas15.9%ofsalesandadjustedSG&Awas23.9%ofsales,contributingtocontinuedimprovementinouroperatingmarginprofile.
Operatingmargininthequarterwas40.1%ofsalescomparedto35.8%inthefourthquarterof2014.AdjustingforthenegativeimpactsofforeignexchangeandtheacquisitionofPharmacyclicsoperatingmarginincreasedby540basispoints.
Asareminder,thefourth-quartermarginprofileisgenerallythelowestofanyquarterduringtheyear.ThisreflectsseasonalproductmiximpactsfromhighersalesofproductslikeSynagis,alowermarginpartneredproduct.
Netinterestexpensewas$199millionandtheadjustedtaxratewas21.6%inthefourthquarter.Fourth-quarteradjustedEPSwas$1.13excludingnon-cashamortizationexpenseandspecifieditems.OnaGAAPbasiswepostedEPSof$0.92.
Aswelookaheadto2016,weareconfirmingourpreviouslyissuedfull-yearadjustedEPSguidancerangeof$4.90to$5.10.Thisguidanceexcludes$0.42pershareofnon-cashamortizationandnon-cashPharmacyclicsacquisitionimpactsaswellas$0.03pershareofotherspecifieds.
Onthetopline,weexpectmid-teensrevenuegrowthonanoperationalbasisexcludingroughly2%negativeimpactfromexchange.Includedinourtop-lineguidanceareassumptionsforourkeyproductsasfollows.
HUMIRAhasaveragedwellover$1billionofannualgrowthforanumberofyears.In2016weexpectHUMIRAtoonceagainbeanimportantcontributortoourperformancewithhighteensgrowthexpectedintheUS.Internationally,weareforecastingmid-single-digitoperationalgrowth,reflectingthelatestmarketdynamicsincludingthelaunchofabiosimilarforEnbrel.
ForIMBRUVICAweexpectrevenuestoAbbVieofatleast$1.8million.WeanticipateglobalVIEKIRAsales
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page9of22
ofapproximately$2billionfortheyear.ThislevelofsalesincludesignificantinternationalgrowthwithafullyearofsalesinJapan.
Weexpectcontinueddouble-digitgrowthforDuodopa,includinganincreasedUSsalescontribution.AsmentionedonpreviouscallsweanticipateagradualrampforproductsalesintheUSasphysicianscontinuetogetmorefamiliarwiththeproduct.
ForSynagis,weexpectmid-single-digitoperationalgrowthin2016.RegardingAndroGelwe'reforecasting2016salesofroughly$500million.ForCreonweexpecthighsingle-digitsalesgrowth.ForLupronandSynthroid,weexpectsalestoberoughlyflatyearoveryearandweexpectdeclinesinseveralproductswithcontinuedlipidfranchiseerosionaswellasnegativemarkettrendsinHIVandothermatureproducts.
TurningbacktotheP&Lfor2016,weareforecastinganadjustedgrossmarginratioapproaching82%.WeareforecastingR&Dexpenseabove15%ofsalesandweexpecttoseesalesleveragewithSG&Alevelsatapproximately23%ofsales,wellbelowthe24.6%bookedin2015.Asaresult,in2016weareforecastinganincreaseinouroperatingmarginprofileof100basispoints,reflectingongoinginitiativesandsalesleverage.
Excludingyear-over-yearimpactsofforeignexchangeinPharmacyclicsthisoperatingmarginimprovementwouldexceed300basispoints.Weareforecastingnetinterestexpenseofabout$800millionforthefullyearandweexpectanadjustedtaxrateofapproximately21%to22%in2016.
Regardingourfirst-quarteroutlook,weexpectadjustedearningspershareinthequarterof$1.13to$1.15.Thisguidancereflectsgrowthofapproximately21%atthemidpoint.
Ourfirst-quarteradjustedEPSguidanceexcludesroughly$0.11ofnon-cashamortizationandspecifieditems.Weareforecastingrevenuegrowthinthefirstquarterjustabove20%excludingroughly4%negativeexchange.
Whileourfull-yearoutlookforinternationalHUMIRAgrowthismidsingledigitsinthefirstquarterweanticipateanoperationalinternationalgrowthrateof3%.Thisisthedirectresultofadifficultcomparisontotheprior-yearquarterwhereweposteda15%increaseforthebrandduetoshipmenttiming.
Soaswelookbackwe'reverypleasedwithAbbVie'sperformanceinourfirstthreeyearsasanindependentCompany.In2015wedeliveredsales,marginexpansionandearningswellaboveouroriginaloutlookandweexpecttobuildonthatmomentumin2016withindustry-leadinggrowthandanexcitingpipeline.
WiththatIwillturnitbackovertoLarry.
LarryPeepo (InvestorRelations):
Thanks,Bill.Wewillnowopenthecallforquestions.
QUESTIONS&ANSWERS
Operator,we'lltakeourfirstquestionplease.
Operator :
(OperatorInstructions)
ChrisSchott,JPMorgan.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page10of22
ChrisSchott (Analyst-JPMorganChase):
Great.Thanksverymuchandthanksforthequestions.
Firstoneshere--justanyperspectiveontherecentAmgenIPRDdecisiononyourformulationpatentandwhatthatmeansforHUMIRA?Andmaybewhilewe'retalkingaboutIP,maybeanythoughtsaswellontheCoherusandBIfilingsonyourdosingpatents?
Thatwouldbemyfirstquestion.
Thesecondone,themid-single-digitgrowthforinternationalHUMIRA,couldyouelaboratealittlebitmoreonthedriversandassumptionsthere?IguessspecificallywhatareyouanticipatingintermsofpricingorvolumecompetitionwhenwethinkaboutbiosimilarREMICADEandEnbrel?
Thankssomuch.
RickGonzalez (Chairman&CEO):
Hi,Chris,it'sRick.SoI'llcoverthosetwo.LetmedotheHUMIRAonefirst.
Soaswementionedinourpreviouscall,weareanticipatingthatwewillseeindirectbiosimilarcompetitionoutsidetheUS,meaningEnbrelbiosimilarsoutsidetheUSthisyear.Soifyouthinkaboutourgrowthratewefinishedthisyearinternationallyatabout8.6%andwe'reguidingfornextyearataboutmidsingledigits.Youcanbreakitupintosortoftwocomponents.
Onewouldbeobviouslyasthebrandgetsalittlebitbiggerthegrowthrateasapercentageisslowingdownabit.AndthenwehavebuiltinwhatareasetofassumptionsofwhatkindofpriceimpactwemightseefromEnbrelincertainmarkets,particularlyinEuropeIwouldsayandthatrepresentsabout2%ofourgrowth.Soyoucanofitcomingdownabout2%basedonthat.Sothat'stheHUMIRApiece.
OntheAmgenIPRandtheotherIPRs,andIthinkingeneralacrossallofthelitigationaspectsofHUMIRA,Ithinkit'simportanttorecognizethatwehavenowenteredanewphaseofourbiosimilarstrategy.Inourthird-quartercallwelaidoutadetailedexplanationofourpatentestateinanefforttoreallyprovidetheinvestmentcommunitywithacomprehensivesetofinformationaroundtheIPandwhatwethoughtthelitigationtimelineswouldlooklikegoingforward.WhatIcantellyouisnothinghaschangedfromthatassessment.
Westillbelieveineverythingthatwe'vedescribedtoyouaspartofthat.Butnowwe'reintheactivelitigationprocesswithotherplayers,whetherthatbeIPRlitigationorotherkindoflitigationthatwillstarttoplayout.
It'sjustnotprudentforustolayoutfortheworldaplay-by-playanalysisofourpositionsaroundthis.That'sjustnotthesmartthingtodofromalitigationstandpoint.
SowhatI'dtellyouisI'dreiteratethepointsthatwemadebefore.WehavealargerobustportfolioofIP.WehavedonesignificantworkfromaninnovationstandpointinthisareaandwehaveprosecutedallthisIPbasedontheworkthatwe'vedone,theinvestmentthatwe'vemadeandwefeelgoodabouttheIPinourportfolioandaswe'vesaidbeforeweintendtovigorouslydefendourIP.
Thisisgoingtoneedtoplayoutovertime.Wearecertainlypleasedwiththedecisionofthepatentoffice.Butwe'renotgoingbasicallydoaplay-by-playonthisbecausethatpotentiallycouldjeopardizeourposition.
ChrisSchott (Analyst-JPMorganChase):
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page11of22
Allright.Thanksverymuch.
Operator :
JamiRubin,GoldmanSachs.
JamiRubin (Analyst-GoldmanSachs):
Thankyou.IjustwanttotalkaboutUSHUMIRAsalesthispastquarterIguess20%,or21%wasabitbelowconsensusexpectations.Ifyoulookatvolumegrowthandpricecontributionthatshouldhaveledtoslightlyhighergrowth.
I'mwonderingifyoucantalkaboutwhatishappeningtonetpriceincreases,aretheysticking?AndwithrespecttoyourhighteensguidanceforUSHUMIRAsalesin2016,whatagainareyourassumptionsforprice?Thanksverymuch.
BillChase (CFO):
Hi,Jami,it'sBill.Look,Ithinkwe'veseenspectaculargrowthnumbersoutofHUMIRAintheUSallyearlongandcertainlyQ421%isn'tabadnumber.IfyoulookatthemarketTRxgrowthrightnowonthequarteritwasabout13%.
Fromaninventorystandpoint,sequentiallyquarterversusquarteritstayedroughlyflatatalittlelessthanhalfamonth.ButonethingthatisimpactingthisnumberiswehadslightlyhigherinventorynumbersinthechannelinQ42014andifyouadjustthatoutitprettymuchgetsyoubacktowhereguidancehadus.Sowehaven'tseenanythingonthisbrandthatwouldleadustopauseandrestateourexpectations.
AsIsaidonthecallandinmycommentswe'reexpectinghighteensgrowth.Soit'sgoingverywell.
Fromapriceperspectiveit'snormalforthesesortsofproductstotakepriceincreasestowardstheendoftheyearorthebeginningoftheyear.Wecertainlyhavedonethatatthebeginningoftheyear.SothereisgoingtobeapricedynamiconHUMIRAin2016andwe'llhavetoseehowthingspanoutastheyearprogressesaboveandbeyondthat.
RickGonzalez (Chairman&CEO):
AndJami,thisisRick.TheonlythingIwouldaddismuchlikethediscussionwehadlastquarteraboutinternationalthirdquarterifyoulookatourorderingorifyoulookatourgrowthratepatternsoverthelastseveralyears,whatyou'llseeistypicallyfourthquarterisalittlebitlowerfromagrowthstandpoint.
ButIthinkwhatyou'reaskingisareweseeinganykindofaslowdownintheUS?We'renot.TheUSisperformingveryrobustly.
WeguidedIthinkatthebeginningofthisyeartoaboutthesamenumber,highteensandobviouslyoverachievedthat.AndsowefeelverygoodabouttheperformancegoingforwardwithHUMIRA.
Operator :
MarcGoodman,UBS.
MarcGoodman (Analyst-UBS):
Yes,goodmorning.YoumentionedtheHUMIRApriceincreasewhichwaslike10%-ish.Howmuchofthatisactuallyflowingthroughtothebottomlinethisyearthatyouprojectandhowhasthatchangedasfarasthegrosstonetoverthepastcoupleofyears?
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page12of22
Andthensecond,ifyoucouldtalkabouthepatitisCalittlebit.ObviouslytheUSthere'sonedynamicandobviouslywithMerckcomingintheygotapproved,theysettheirpricinglastnight,ifyoucouldcommentonthat.
ThensecondlyifyoucouldtalkaboutJapan,whereweareandhowit'sdoing.Iknowyoudidn'thavealotofJapaninthequarterbutnowit'sbeenagoodmonthandahalflatersomaybeyoucanjustgiveusasenseforhowJapanisdoingandtherampandhowmuchJapanisgoingtobeapieceofthatO-USthisyear?
RickGonzalez (Chairman&CEO):
Okay.SoletmetaketheHUMIRApricepiece.Iunderstandallofthefocusonprice.Ithinkallofusinthisindustryrecognizealloftheheadlineswe'dseenaroundpriceandIthinkanimportantperspectivetostepbackandthinkaboutforourbusiness,thisisnotabusinessthatishighlydependentuponprice,ourbusinessI'mtalkingabout.
Soasyoulookatouroperationalgrowthin2015at22%,only2%ofthatwaspriceacrossthebusiness.IfyoulookatHUMIRAroughlyaround25%oftheoverallgrowthisdrivenbyprice.
Now,youdohavecertainmanaged-carecontractsthathavesomelevelofpriceprotectionsoallthepricedoesn'tfallthroughat100%.Anddependinguponwherethepriceincreasesareandthemagnitudeofthosepriceincreaseslessofitwillfallthroughinalaterpriceincreaseasanexample.
ButoverallthevastmajorityofourgrowthwhetheritbeHUMIRAorotherassetsinourpipelineisdrivenbyvolumegrowth.AndIthinkthat'sanimportantperspectivefortheinvestorcommunitytounderstand.
AsfarasHCVisconcerned,asweplannedoutfor2016,I'dsaytheMercklabelcameinprettymuchspotonwhatwehadexpected.SoIthinkit'swithinourexpectations.WehavebuiltintoourassumptionsforHCValevelofcompetitionandsomelevelofpricecompetition.
We'regoingtohavetoseehowthatplaysout.It'snot--wedon'tbelievewehaveanyexposurethereatall,sowe'renotconcernedaboutthat.Butwehavebuiltinwhatwebelieveisanappropriatelevelofbothpriceandvolumecompetitionthatwecanseeinthemarketplacein2016.
Japantoyourpoint,welaunchedverylateinthefourthquarter.Andsofar,andIhadanupdatejustaweekorsoagofromtheteam,Japanisgoingwell.It'strackingonourexpectations.
Operator :
MarkSchoenebaum,EvercoreISI.
MarkSchoenebaum(Analyst-ISIGroup):
Heyguys,thanks.WonderingifIcouldtakealeftturnhereawayfromhepCanddrugpricingandtalkalittlebitaboutyourpipelinewhichisarguablynotdiscussedalotonthestreet.Sonumberone,I'dloveto--andalsocompetition.
Sofirstofall,I'dlovetogetyourthoughtson,there'sbeenalotofnewsintheJAKspace,I'dlovetogetyourthoughtscomparingbaricitinibto494.I'dalsolovetogetanupdateonhowyou'rethinkingaboutABT-122andALX-0061,what'sthenextstepwhenwemakeanextstep?
AndifpossiblethrowinacommentaboutACP-196versusIMBRUVICA.ThismoleculehasobviouslycomeintotheheadlinesafterAZNpaidIthink$7billionforit.Thankyouverymuch.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page13of22
MichaelSeverino (ChiefScientificOfficer):
SureMark,thisisMike.Iwilltakethosequestions.
YourfirstquestionwasaboutourJAKfranchiseandcompetition.IthinkthatifwelookatJAKinhibitorstherehadbeenafairamountofenthusiasmseveralyearsagothatactualresultsdidn'tliveuptoexpectationsforthefirstgenerationofthosemoleculessuchastofacitinib.
ButthecurrentgenerationIthinkhaveveryniceprofiles.AndIthinkbaricitinibhasgeneratedaniceprofilebasedonthedatathatweseentoday.We'llseemoreastheyproceedthroughtheregulatoryreview.
AndIthinktheclassisgoingtogetuseovertime.Whatweseewiththisclassisittendstostartslowandbuildovertimeandworkfrommoreresistantpatientsuptoearlyotherlinesoftherapy.AndweseethatwiththerapiesinRAandimmunologyingeneral.
SowhenIcomparethetwoIfeelveryencouragedbytheresultsthatwe'veseenwithABT-494.We'veseenverystrongefficacy,notjustattheACR20levelbutatmuchhigherlevelsofresponse:ACR50,ACR70DASremission,etc.
Andwe'veseenthatacrosstwolargePhase2bstudiesincludingaTNFinadequateresponder.ThosearetheresultsthatImentionedinouropeningcomments.AndthereweseealevelofresponseinTNFinadequaterespondersthatwebelievehasthepotentialtobebest-in-class.
SoifyoulinkthatupwithwhatIsaidabouthowRAdynamicsplayoutthosedataaregoingtobeveryimportantandwebelievethatthatisabigopportunityforthismolecule.Wedobelieveovertimethat494willcertainlyhaveuseinearlierlinesoftherapybutwhenwelookatthebalancedprofileof494wefeelverygoodaboutit.
SomovingontoABT-122inAblynx,thoseareinmid-stagetrialsandwewillseedatafromABT-122midyearandfromAblynxtowardsthebackendoftheyear.Andoncewehavethosedata,thenthatwillbethetimetomakedecisionsaboutnextstepsandwe'llbesharingthosedataassoonasit'sreasonabletodosoafterwegetthem.
MarkSchoenebaum(Analyst-ISIGroup):
Whatarethehurdlesforsuccessinthosetrials?
MichaelSeverino (ChiefScientificOfficer):
Wellourgeneralapproachhasbeenthatwebelieveweneedtoraisethestandardofcare.Sowhatwe'regoingtowanttoseeissomethingthatisoverandabovethelevelofefficacythatcanbeachievedwithcomparableagentsifyouwill.SoABT-122combines17inTNFssoyou'regoingtowanttoseesomethinginthediseasepopulationswe'vestudiedinRAandinpsoriaticarthritisthat'sbetterthanonecangetwiththosemechanismsalone.
AndAblynxisanotherapproachatIL-6youwanttoseesomethingthat'sbetterthantheexistingtherapiesthatareoutthere.Nowobviouslythesearen'tcomparativestudiesbutwe'llhavethedatawebelievetomakethoseassessmentsandtodeterminewhetherwewilladvancethoseprogramsthisyearasIsaid.
SowiththerecertainlyhasbeenalotoftalkaboutAcertagivenitsrelativelyearlystageofdevelopment.WhatIwouldsayfirstandforemostiswe'vesetaveryhighbarwithIMBRUVICA.We'vesetaveryhighbarwithefficacyandalsowithsafety.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page14of22
IquotedsomeofthenumbersfromRESONATE-2.Wedon'tbelievewe'veleftanyroomonthetablefortheretobeastoryofimprovedefficacyandwefeelverygoodaboutthesafetyprofileofIMBRUVICA.
WithAcertawe'relookingatmuchearlierdata.We'relookingatPhase1b/2astudies.Ithinkthestudythathasgarneredthemostattentionisabouta61patientdoserisingstudywithanexpansion.
Andit'sreallyjustnotpossibletocomparethoseveryearlytrialstoamoleculelikeIMBRUVICAwhichhasmultiplePhase3readoutsandhasbeenonthemarketnowforaconsiderableperiodoftime.Sowe'llseeastheirprogramcontinuestoprogresswhatthey'reabletodemonstrate.
Theyhavecomparativestudiesthatwillreadoutinacoupleofyearstime.AndIthinkthat'sreallythefirsttimewewillbeabletomakeanysortofcomparativeassessment.Thoseareopenlabelstudiessothat'salimitationofthem.
AndIwillalsoaddthatAcerta'scomparativestudiesareinrelapsedrefractorypatientsandIMBRUVICAismovingtothefrontlineovertimeandthatmomentumisgoingtokeepup.SowefeelveryconfidentinourpositionwithIMBRUVICA.
RickGonzalez (Chairman&CEO):
TheonlyotherthingI'dadd--thisisRick.WhenwedidtheacquisitionofPharmacyclics,wediditwiththeknowledgeofAcerta.Sowethoroughlyreviewedbasedontheinformationthatwehadatthattimethecompoundandevaluatingwhetherornotwethoughtitwasarisk.
AndIthinkoneofthethingstokeepinmindisafollowerstrategyinoncologyatleasthistoricallyhasnotworkedverywell.Andthereasonitdoesn'tworkverywellisiftheinnovatorkeepsadvancingthebartheregulatoryenvironmentchangesonthefollowerandwhattheyneedtodotobeabletogettheirapprovals.Andit'smoredifficult,ittakesmoretime,it'smoreexpensivebecausetheycan'tdosinglearmstudiestogetapproval.
ThesecondthingI'dsayisthereseemstobetwothesesoutthere.Onewouldbeimprovedefficacy,onewouldbeimprovedsafetyprofileparticularlyaroundbleedinganda-fib.
Iwouldn'tsaythatthoseareissuesthatareinhibitingourabilitytobeabletoadvancethebrandandthestandardofcaretoday.ButwhatIwouldalsosayaswehaveevaluateditwebelievethatthevastmajorityofthedatawouldsupportthatthoseareon-mechanismsideeffects.
Andsowe'llhavetoseewhattheirdataprovesoutandwe'llhavetoseewhattheirinclusionandexclusioncriteriaisonthetrialsthattheyruntomakesureit'sabalancedviewtobeabletodemonstratewhatthebleedinga-fibratewouldbe.Andrememberwedidn'tseea-fibinIMBRUVICAuntilwegottosomethinglike1,500patientsorso.AndIthinkwesawbleedingatabout500,600,somethinglikethat,right?
Sowehavetoseealotmoredatatoseearealsignalandithastobeinapopulationthat'sconsistentwiththepopulationthat'sbeingtreatedandwe'llseewhatthedatalookslike.ButIthinktheevidencetodaywouldsuggestthatthoseareon-mechanism.Andsowe'llhavetoseehowitplaysoutbutIwouldtellyouthatwe'reconfidentinourpositionwithIMBRUVICA.
Operator :
DavidRisinger,MorganStanley.
DavidRisinger (Analyst-MorganStanley):
Thanksverymuch.SoIwantedtogobacktothepositiveIPRdecisions.Couldyoupleasecharacterize
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page15of22
thebreadthofthosetwopatents,the157and158patentswhichweresurprisinglyupheld?SpecificallyyoumusthaveanopiniononthelikelihoodthatotherbiosimilarmanufacturersbeyondAmgenwillinfringethesepatentsbecauseit'schallengingtomakeastablemonoclonalantibodywithoutinfringing.
AndthensecondI'minterestedinyourperspectiveondurationoftherapyforIMBRUVICAcurrentlyandhowyouexpectthattoevolvewithnewindications.Andthenalsoifyoucouldshareanythoughtsonvenetoclaxonthatfrontwithrespecttoexpecteddurationoftherapyaswell,thatwouldbeveryhelpful.Thankyou.
RickGonzalez (Chairman&CEO):
David,thisisRick.OntheIPRpart,youknowIguesswhatI'dsayisitwasn'tsurprisingtous.WeobviouslyhaveaprettyhighlevelofconfidenceintheIP.
Youknowasfarasothersthatwouldinfringe,we'recertainlynotinapositiontobeabletoanswerthatquestionbecausewedon'tknowwhattheirformulationsare.Iguessthebestplacetogetthatanswerwouldbetoaskthem.
ButasIsaidwe'renotgoingtotalkalotabouthowwe'repositioningthingsandhowweplanonrunningtheIPRprocessgoingforward.Themostimportantthinghereisthatweprevail.AndIrealizethatprobablydoesn'tgiveyougreatcomfortbutyouhavetorecognizeourresponsibilityistomakesurethatweputthebestpositionforwardandthatwedon'ttipoff--wedon'ttipoffouropponentsinthisprocessastowhatourstrategyis.
SoIapologizeforthatpartofitbutthat'sthetrade-offwehavetomakehere.Andyou'regoingtoseemoreofthisplayoutovertimeandIthinkyou'llgetafeelforit.AndyoucangetotherpeopletoevaluatewhatyouthinkthatwilllooklikefromanIPstandpoint,althoughI'dsaymuchlikethisparticularpatentsomepeopleopinethattheydidn'tthinkitwasverystrongandyousawhowthepatentofficemadetheirdecision.SoIthinkthat'saboutallwecantalkaboutasitrelatestothelitigation.
ThesecondwouldbeondurationoftherapyonIMBRUVICA.IfyoulookatthedurationoftherapytodayI'dsayit'strackingonwhatweexpectedaspartoftheoriginaldealmodelthatweputtogether.TogiveyousomeflavorforthatI'dsayit'sabout75%oftheclinicaltrialduration.
Ithasbeenincreasingovertime.Thereareanumberofelementsthatbasicallywehaveanalyzedandhaveprogramsinplace.Someofthosearepayerrelatedandsomeareotherkindsofthingsthatwehavetocontinuetoworkthrough.
IthinkoneofthethingsthatwillbeextremelyhelpfulistheRESONATE-2datahere.Becausenowyouhaveabsolutedatathatsupportsthatifyoukeepthesepatientsontherapyforalongerperiodoftimethenyougetverygoodoutcomes.SoIthinknotonlyfromthestandpointofallowingustobeabletomoveintofrontlinebutasanotherpieceofstrong,credibleevidencethatmaintainingtherapyoveralongerperiodoftimegivespatientsthebenefitthatwe'relookingfor.
Oneofthethingsthatwedidseeisincertainphysicianpopulationsfromadurationstandpointwhenbloodcountsimprovedsomephysicianswouldtakepatientsoffoftherapyandobviouslythat'snotsomethingthatwewouldwant.SoIthinkRESONATE-2isastrongsupportingsetofdatathatwillhelpgivephysicianstheknowledgeandinformationtheyneedtobeconvincedthattheyshouldkeepthemontherapyeventhoughthebloodcountshaveimproved.
Andthenonvenetoclax,Idon'tknow,Mike,canyoutalkatallaboutthat?It'salittlehardtotellatthispoint.
MichaelSeverino (ChiefScientificOfficer):
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page16of22
ThisisMike.WithrespecttodurationoftherapywithvenetoclaxIthinkit'searlytomakeastatementbecausewe'retreatingmanydifferentpopulationsnowinclinicaltrials.Wehavealargenumberofpatientscontinuingontherapy,sothosemeandurationsoftherapyareincreasingasthedatasetmatures.
SoIthinkwecan'tgiveaspecificnumber.Ithinkwhatwecansayisthattheresponseswe'reseeingareverygood.
We'rekeepingpatientsontherapy.Thereisgooddurabilityofthoseresponses.AndasthedatasetmaturesandaswemovetoalabelIthinkwecanupdateyouonthat.
Operator :
VamilDivan,CreditSuisse.
VamilDivan (Analyst-CreditSuisse):
Thankssomuch.Acoupleofquestions.
One,justintermsofhepCIappreciatethecommentsyoumadefornextyearandhowyou'relookingintothat.Canyougiveusasenseifyou'veseenanyimpactonprescriptiontrendsfromthelabelchangethatyouhadtomakebacknearthestartofthefourthquarterandifthat'simpactedthingsatall?
Andthenmaybeonthepipeline,againIappreciateallthecommentsthatweremadeearlierandalsoinresponsetoMark'squestions,maybeifyoujuststreamlinethingsalittlebitandjustflagifyoucouldthetwoorthreemostimportantdatareleasesthatyouthinkinvestorsshouldbefocusedonforAbbViebetweennowandyourJuneR&Dday.Thankssomuch.
RickGonzalez (Chairman&CEO):
ThisisRick.IwilltaketheHCVone.Wehaveseenanimpact.
Maybethebestwaytodescribeitwouldbethis.Yousawwhatourrevenueswereinthefourthquarter.Wehadflaggedthatthe$3billionrunningrateinthefourthquarterthatwethought,Iflagged,thatwemightmissitbutwewouldberelativelycloseandthatiswhatwehadbeentrackingagainstforthefourthquarter.
I'dsayinthefourthquarterthereweretwoimpactsandoneofthemisgoingtobethelabelchange.That'swhyI'mgoingthroughthisexplanationforyou.
SoonewastheVAvolumesstayedverylowthroughthefourthquarterbecauseofthefundingissueintheVA.Sothatwasoneoftheimpacts.
ButthenthesecondwaswhatwesawfromcollateralimpactonthelabelandI'dsaywelostaboutonesharepoint.SotherewassomebleedoverimpacttoothersegmentsbecausetheChild-PughBisn'tworthonesharepoint.
Ithasstabilizednowatthatlevel.AndsoIthinktheimpacthasflowedthroughandwewouldassumethatinwhatwe'vebuiltfor2016.Butthat'sbeentheoverallimpact.
MichaelSeverino (ChiefScientificOfficer):
Andintermsofdatareleasestokeepaneyeon,aswesaidinourremarkswe'regoingtoseeresultsfromtheelagolixendometriosissecondpivotalstudyinthefirstquarter.We'lltoplinethat,sothatwillobviouslybesomethingtokeepanIoutfor.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page17of22
AtEASLwe'llpresentalargeamountofdataonournext-generationhepCprogramincludingeight-weekand12weekcomponentsofourPhase2program.Sothatwillbesomethingtokeepaneyeon.
AndatASCOIwouldlooktoourdatainCLLinvenetoclaxandalsoAMLinvenetoclaxasupdatesthatwecankeepaneyeoutfor.
Operator :
AlexArfaei,BMOCapitalMarkets.
AlexArf aei(Analyst-BMO):
Goodmorningfolksandthanksfortakingthequestions.Obviouslythereisquiteabitofskepticismaboutyour2020HUMIRAguidance.AndgivenwhatyousaidtodayaboutEuropeandthefactthatbiosimilarcompetitionwillonlyincreasethere,canyouhelpusunderstandhowyougetthere,basicallyhelpusbridgethedifferencebetweenwhereconsensusisrightnowtoyourexpectationforgreaterthan$18billionby2020forHUMIRA?
AndthenI'mcuriousaboutwhataresomeofthethingsthatyouwillbelookingforduringtheupcomingREMICADEbiosimilarSBApanel?Thankyou.
RickGonzalez (Chairman&CEO):
SoAlex,thisisRick.Youknowifyouthinkaboutwhatwedescribedforyouonthe2020HUMIRAguidanceex-USwebasicallysaidthatwewouldseedirectbiosimilarcompetitioninthefourthquarterof2018.Wehavesomeimpactfromindirectbiosimilarstartingin2016.
Idescribedearlierinthecallwhatthatimpactassumptionisfor2016.Itwillobviouslyhaveaflow-throughimpactinto2017asthatexpandsandbasicallyflowsthrough.
ButthenifyouthinkabouttheerosioncurvethatIdescribedonthethird-quartercall,sowhatwesaidwasinternationallythebrandwillpeakat2018andthenitwillgentlystarttodeclineandifyougettotheendof2020it'sdownabout15%orso.That'sacombinationofvolumeandprice.
NowI'dalsotellyoubecauseofthecategoryisstillgrowingobviouslythenthegrowthwouldhavebeenthereandsomeofthatgrowthwenttoabiosimilarplayer.Soitbasicallysaysthatabout30%ofthetotalopportunitywouldhavegoneoverthatperiodoftime.Andthat'sapointatwhichweseesomelevelofstabilizationgoingforward.
SoIthinkthat'sthewayyouwouldcharacterizeit.Andalthoughwedon'thavedirectknowledgeofhoweachanalystbuildsconsensusaroundtheirinternationalandUSsetsofassumptions,whatIwouldsayisthebiggestdifferencebetweenconsensusandourforecastisthatsomepeoplearestillforecastingthatHUMIRAseesbiosimilarcompetitionintheUnitedStates.
Thenumberistoobigtobeanythingotherthanthat,thechange.SoafterourguidancewhatwedidseeiswesawHUMIRAmoveupprettysignificantlybutnotallthewayouttoour2020forecast.Sotherearestillsomeindividualswhowe'reassumingthattheyseebiosimilarcompetitionprobablynowinthat2019timeframeit'sprettymuchslidoutto.
Soitisthedifferencebetweenthatandultimatelyourassumptionthatwewillgetthrough2020to2022andIthinkthat'sthebiggestsingleimpact.Asfarasthe[RemC]panelIthinkaswetalkedaboutinternationallywe'vebeenwatchingthisplayoutintheinternationalmarketsandstudyingitcarefully.Andaswe'veindicatedtothemarketplacemany,manytimesbeforewe'renotseeingadirectimpactonHUMIRA.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page18of22
Andobviouslyifyoulookatourgrowthratesin2015andyoulookatourgrowthrateinfourthquarter,Ithinkthat'sindicativeofthefactthatwe'renotseeinganysubstantialimpactaswell.Andsowewouldn'tassumethattherewouldbeanimpactintheUnitedStateseither,thatreallyfitsinadifferentcategory.Ithinktheonethingthatwillbeinterestingtolookatinthepaneliswehaveassumedinourplanningassumptionsthatbiosimilarplayersgetextrapolation.
Wedon'tagreewiththat.Wethinkit'simportantforanydrugtobetestedintheindicationthatit'sgoingtobeusedinandgeneratesomeclinicaldata.ButI'dsayweplanfromaconservativestandpointthatwewillseeextrapolationinallthemajormarketsaroundtheworld.
IthinkaswegoforwardhereifsomehowwegotanindicationthatthatwerenotgoingtobethecaseintheUnitedStatesthatwouldbeapositivetous.Sothat'soneofthethingsthatwe'llbelookingat.
Operator :
SteveScala,Cowen.
SteveScala(Analyst-Cowen):
Thankyou.Youmentionedthe$2billioninVIEKIRAsalesin2016.ThatislessthanannualizingQ42015saleswhichwerealreadyabitheldbackasyoudescribedacoupleofminutesago.
Soitseemsastheseexpectationsoryou'reexpectingaslowdownquarteroverquarterin2016despitethelaunchinJapan.Sowhereareyouexpectingtoseethepressure?
Secondly,wherespecificallyinMerck'shepClabeledasAbbVieseecompetitiveadvantagesforVIEKIRAifany?Andthenlastly,whathasbeentheuptakeofthenewformulationofHUMIRAintheEU?Thankyouverymuch.
RickGonzalez (Chairman&CEO):
Steve,thisisRick.Iwilltakethefirstone.Soyouarecorrectthatifyoulookatwhatwe'reguidinggoingforwarditislessthanourfourth-quarterannualizedandthatisourintent.
There'stwofactorsthere.Let'sbehonest,we'vehadtroublepredictingthisnumber,sowewantedtogointo2016withanumberthatwehadaveryhighlevelofconfidencethatwecouldhit.
Sothatiscertainlyacomponentofit.ThesecondcomponentisweareassumingsomelevelofcompetitionfromMerck.
Sowe'llhavetoseehowitplaysoutbutIwouldsaywe'regoingtosetthisoneatanumberthatwehaveahighlevelofconfidencethatwethinkwecandeliver.AndI'dmuchrathersurpriseyouonthepositivethansithereandapologizeonthemiss.AndMike,whydon'tyoucoverthelabel.
MichaelSeverino (ChiefScientificOfficer):
Well,sorecognizingthattheMercklabelhasjustcomeoutwhatIwouldsayiswewouldlookparticularlyattheimpactofRAVsonresponse.Andthisissomethingwe'vebeensayingsincethePhase3datawerepresented.TheUSlabelrecommendsRAVtestingforMerckandguidesbothregimenandtreatmentdurationbasedonthat.
AndwithVIEKIRA,that'snotthecase.Andalsowhenwelookatournext-generationregimentandwelookatactivityinanumberofpreclinicalsystems,invirusesthatcarrythoseresistancemutations,weseeveryhighlevelsofactivityforouragent.Sowethinkthatthat'sgoingtobeastrengthforourprogramsgoingforward.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page19of22
RickGonzalez (Chairman&CEO):
Andthenonyourlastquestion,wehavenotlaunchedthenewHUMIRAformulationinternationallyorintheUS.Weneedanewpendeviceforthisformulationandsowehavesubmittedthepeninbothjurisdictions.We'llhavetowaitforthattogetapprovedandoncethat'sapprovedthenwe'llmakeourdecisionsonlaunchingthose.
Operator :
JohnBoris,SunTrust.
JohnBoris (Analyst-SunTrustRobinsonHumphrey):
Thanksfortakingthequestionsandcongratulationsontheresults.FirstquestionhastodowiththeJapanesemarkets.AreyouanticipatinganyimpacttoyourfranchisesfrompricedecreasesinJapaninApril?
Secondquestion,whatpercentofHUMIRArevenuesinUSandex-UScomefromrheumatoidarthritis?Andcanyougivesomecolorontimingaroundwhenthepenmightseeorsecureapproval?
AndthenlastquestionjusthastodowithABT-494,itseemsthatcompetitivelybaricitinibandthedeveloperstherehavelatchedontoanimportantareaofdiabeticnephropathythatappearstohaveaneffectthatwouldbeaverylargeuntappedmarket.I'msureyou'lltalkaboutthisinJunebutanythoughtsaroundfurtherbroadeningthedevelopmentoutsideofRAforABT-494?Thanks.
RickGonzalez (Chairman&CEO):
SoJohn,thisisRick.I'lltakethefirstone.SotheJapanesemarketpriceadjustments,weareawareofit.
Ithasbeencommunicatedtous.Soit'sbuiltintoour2016guidance.
Idon'tthinkit'ssomethingwecantellyoubecausereallytheJapaneseauthoritiesneedtoreleasethat,notus.ButI'dsayitwasintherangeslightlylowerthanwewouldhaveexpected.
SoIthinkit'sfineandasIsaidit'sintheguidancealready.Butweareawareofwhatthenumberis.TheHUMIRAindicationmix,itwasRAyousaid?
BillChase (CFO):
Yes,RA,John,rightnowisjustabitunder35%ofglobalsales.
RickGonzalez (Chairman&CEO):
Andthenthependevicestheyweresubmittedrecently,sowe'rethinkingsecondhalfof2016.AndthenABT-494,Mike?
MichaelSeverino (ChiefScientificOfficer):
Sure.ThisisMike.
SowithrespecttobroadeningoutABT-494development,weobviouslybelievethatABT-494hasbroadpotentialinRA.Inotherimmunologically-mediatedconditionswehaveprogramsunderwayininflammatoryboweldiseaseandIthinkthedatasupportthatwe'relikelytoseeagoodeffectthere.
Withrespecttodiabeticnephropathy,it'sanintriguingidea.It'scertainlysomethingwe'dconsiderandperhapsthatisagoodtopicforourR&DdayinJune.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page20of22
Operator :
ColinBristow,BankofAmerica.
ColinBristow(Analyst-BofAMerrillLynch):
Goodmorningandthanksfortakingthequestionandalltheusefulcolor.SofirstonHUMIRA,justinthe4Qcanyoucommentspecificallyoratleastqualitativelyonthelevelofrebatinginthequarterandhowitcomparesyearoveryearandsequentially?
SecondonhepC,canyougiveussomeideaofthenumberofcontractsperhapsasaproportionof2015whichyousecuredwithexclusivityfor2016?Andthenthirdly,andsorryifImissedthisbutontheHUMIRAex-USfront,canyougiveusanupdateontheimpactyou'rethinkfrombiosimilarREMICADE?
Ithinkpreviouslyyousaidaround3%share.Andthenjustfollowingonfromthattheme,howdoyouanticipatethethreatfromthebiosimilarEnbrelgivenit'saninjectableversusaninfusion?Thanks.
BillChase (CFO):
Socallon,it'sBillChase.OntherebatingaroundHUMIRAobviouslywedon'tgotoanygreatlengthsexplainingthelevelsofrebating.
WhatyouneedtothinkaboutwithourpricingdynamiconHUMIRAispriceincreasesinthelaterhalfoftheyeartendtohavelessofafallthroughthat'srelatedtobasicallypricingcapsincertainprograms.Sototheextentthatwetakepricelaterintheyear,ourrebategoesupforthoseparticularprograms.ButIdon'twanttogetintoanyspecificnumbersaroundthatatthispointintime.
RickGonzalez (Chairman&CEO):
OntheHCVcontractingwhenweoriginallylaunched,andtheexclusivecontractsthatwehadweremultiyearcontractswiththeexceptionoftheMedicaidcontractswhichmanyofthoseareannualcontracts.TheygetbidoutonayearlybasissoI'dsaycertainlythemajorityofourbusinessisunderamultiyearcontractingstrategy.
OnHUMIRARemC,Imaynothaveheardthequestioncorrectlybutwehaven'tcommunicatedthatit'shada3%impactbuthadvirtuallynoimpactonourbusiness.Overallifyoulookattheiroverallbiologicshareissomewherearound3%butthevastmajorityofthathascomefromREMICADE.
AndthenEnbreliswhatIdescribedearlierthatweareanticipatingabouta2%impactfromagrowthratestandpoint.Themajorityofthat,thevastmajorityofthatisprice.Therearecertainmarketswheretherewillbeapriceimpact.
LarryPeepo (InvestorRelations):
Operator,wehavetimeforonemorequestion,please.
Operator :
AndrewBaum,Citi.
AndrewBaum(Analyst-Citi):
Thankyou,threequestionsplease.Firstly,you'veexpressedpreviouslyyourconfidenceintherobustnessofthe135patentwithintheUSandIknowit'shadaverylengthyprosecutionhistorytoattaininclusionintheUSPTO.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page21of22
CouldyoucontrastthatwiththewithdrawalofthesimilarpatentsfromEurope?WhatunderpinstheconfidenceintheUSbuildingonthelengthypatentprosecutionifyou'dliketocomment?
Second,perhapsyoucouldgointoalittlebitmoredetailintermsofthereferencepricingforanti-TNFagentswithinEurope.ObviouslythinkingoftheimpactofEnbrelanddraggingdownthepricesofthecategory.
Andfinally,justonAcerta'sBTKinhibitordoyoubelievethattheyinfringedAbbVie'sintellectual-property?Thankyou.
RickGonzalez (Chairman&CEO):
Thanks,Andrew.Onthe135patent,asIsaidbeforewe'renotgoingtogothroughalotofdetailbackandforth.ButtheonethingIdowanttoclarifyisrememberIPinEuropeisdifferentthanIPintheUnitedStatesinhowitisultimatelyprosecuted.
Thesecondthingisit'simportanttorememberthatalthoughwewithdrewtheparentpatentwediditbecausetherewasoneparticularassaythatwehadasecondpatentthatdidn'thavethatquestion.Andthereforewepulledthatpatentinordertobasicallyjustfocusonthisotherpatent.Soit'snotlikewewithdrewitbecausewewereconcernedaboutit.
Andsoultimately--butthatisnotanissuefromaUSstandpoint.Ithinkthat'sprobablyasmuchaswe'regoingtotalkaboutit.
Referencepricing,obviouslypartofwhatIindicatedearlierisreferencepricebutI'dsayalsotherearesomemarketswheretherecouldbesomehospitalnegotiationsalsothatcouldhaveanimpacthere.Andsowefactoredinwhatwethinkiscertainlyaconservativenumber,butIthinkit'sanappropriatenumbertobeabletoultimatelyplanfor2016.
AndthenonAcertaBTK,theIP,againwehavesignificantIPinthisarea.AndifwebelieveAcertainfringesthatIPwe'llenforcetheIP.
LarryPeepo (InvestorRelations):
Thanks,Andrew.Andthatconcludestoday'sconferencecall.
Ifyou'dliketolistentoareplayofthecallpleasevisitourwebsiteatAbbvieinvestor.com.Thanksagainforjoiningus.
Operator :
Thatconcludestoday'sconference.
Allrightsreserved(c)2014TheStreet,Inc.
Pleasefeelfreetoquoteupto200wordspertranscript.Anyquoteshouldbeaccompaniedby"ProvidedbyTheStreet"andalinktothecompletetranscriptandwww.thestreet.com.Anyotheruseormethodofdistributionisstrictlyprohibited.
THEINFORMATIONCONTAINEDINEACHWRITTENORAUDIOTRANSCRIPT(the"TRANSCRIPT")ISAREPRODUCTIONOFAPARTICULARCOMPANY'SCONFERENCECALL,CONFERENCEPRESENTATIONOROTHERAUDIOPRESENTATION.THETRANSCRIPTSAREPROVIDED"ASIS"AND"ASAVAILABLE"ANDTHESTREETISNOTRESPONSIBLEINANYWAYNORDOESITMAKEANYREPRESENTATIONORWARRANTYREGARDINGTHEACCURACYORCOMPLETENESSOFTHETRANSCRIPTSASPRODUCED,NORTHESUBSTANCEOFAPARTICULARCOMPANY'SINFORMATION.
CompanyName:AbbVieIncCompanyTicker:ABBVSector:HealthCareIndustry:Drugs
EventDescription:Q42015EarningsCallMarketCapasofEventDate:93.36BPriceasofEventDate:54.03
©2014TheStreet,Inc.Al l R ightsReserved Page22of22
THETRANSCRIPTSAREPROVIDEDFORINFORMATIONALPURPOSESONLY.THESTREETISNOTPROVIDINGANYINVESTMENTADVICEORENDORSINGANYPARTICULARCOMPANY.