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AbbVie (ABBV) Reports Second-Quarter 2014 Financial Results



7/25/2014 8:58:17 AM

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NORTH CHICAGO, Ill., July 25, 2014 /PRNewswire/ --

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

AbbVie (NYSE:ABBV) today announced financial results for the second quarter ended June 30, 2014.

"This was another very strong quarter for AbbVie, as we delivered sales and earnings per share above our original guidance and announced plans to merge with Shire, a strategic action that will further enhance our long-term growth prospects," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.  "Last month, we raised our 2014 earnings-per-share guidance, reflecting strong underlying business performance.  We continue to expect positive trends for the second half of the year, as well as additional progress from our pipeline, including the expected U.S. approval of our interferon-free HCV combination."

Second-Quarter Results

  • Worldwide sales were $4.926 billion in the second quarter, up 5.0 percent.  On an operational basis, sales increased 4.8 percent, excluding a 0.2 percent favorable impact from foreign exchange rate fluctuations.  Excluding sales from our lipid franchise due to the loss of exclusivity, sales increased 12.3 percent on an operational basis in the quarter.  
  • Second-quarter sales growth was driven primarily by the continued strength of HUMIRA.  Global HUMIRA sales increased 26.2 percent, or 25.4 percent on an operational basis, excluding the impact of foreign exchange rate fluctuations.  Total company sales growth was also driven by strong growth from key products including Synthroid, Sevoflurane and Duodopa.
  • The adjusted gross margin ratio in the second quarter was 79.6 percent, excluding intangible asset amortization and other specified items.  The gross margin ratio under U.S. generally accepted accounting principles (GAAP) was 77.4 percent.  
  • Adjusted selling, general and administrative (SG&A) expense was 27.1 percent of sales in the second quarter, reflecting continued investment in our growth brands and the expected HCV launch.  On a GAAP basis, SG&A was 29.4 percent of sales.
  •  Adjusted research and development (R&D) was 16.1 percent of sales in the quarter, reflecting funding actions in support of our mid- and late-stage pipeline and the continued pursuit of additional HUMIRA indications.  On a GAAP basis, R&D was 16.9 percent of sales.
  • Net interest expense was $69 million, and the adjusted tax rate was 22.2 percent in the quarter. On a GAAP basis, the second-quarter tax rate was 23.4 percent.
  • Second-quarter diluted earnings per share were $0.68 on a GAAP basis.  Adjusted diluted earnings per share, excluding intangible asset amortization expense and other specified items, were $0.82.  

Key Events from the Second Quarter

  • AbbVie announced it reached an agreement with Shire's Board of Directors for a recommended transaction to combine the two companies.  The proposed combination is strategically compelling for both companies and will create a larger and more diversified biopharmaceutical company with multiple leading franchises.  The new company will also have significant financial capacity for future acquisitions, investment and enhanced shareholder distributions and value creation.
  • AbbVie announced the initiation of a Phase 3 clinical trial evaluating the safety and efficacy of its investigational compound, veliparib (ABT-888), when added to carboplatin and paclitaxel, two chemotherapeutic medicines, in patients with human epidermal growth factor receptor 2-(HER2) negative metastatic or locally-advanced breast cancer, containing BRCA1 and/or BRCA2 gene mutations.  The trial will recruit approximately 270 patients.  The primary efficacy outcome is progression-free survival.  The secondary pre-specified outcome measures include overall survival, clinical benefit rate, objective response rate and duration of response. The start of this trial followed initiation of Phase 3 clinical work in two other settings: non-small cell lung cancer and neoadjuvant treatment of triple negative breast cancer.
  • Biogen Idec and AbbVie announced positive top-line results from the Phase 3 DECIDE trial, designed to evaluate the superiority of once-monthly, subcutaneous daclizumab high-yield process (DAC HYP) when compared to intramuscular interferon beta-1a (IFN -1a), as a potential treatment for relapsing-remitting multiple sclerosis (RRMS), the most common form of multiple sclerosis.  Results showed that DAC HYP was superior on the study's primary endpoint, demonstrating a statistically significant 45 percent reduction in annualized relapse rate (ARR) compared to IFN -1a (p<0.0001). 
  • AbbVie presented interim results from a Phase 1b clinical trial of ABT-199/GDC-0199, an investigational B-cell lymphoma 2 (BCL-2) selective inhibitor, in combination with rituximab.  Results showed an overall response rate of 84 percent, in patients with relapsed/refractory chronic lymphocytic leukemia (CLL).  These results were presented at the 50th Annual Meeting of the American Society of Clinical Oncology (ASCO).  The combination of ABT-199/GDC-0199 and rituximab is being investigated in an ongoing Phase 3 clinical trial for the treatment of relapsed/refractory CLL.
  • AbbVie presented updated data from another Phase 1 study of ABT-199/GDC-0199 as a monotherapy including results from the trial arms investigating the compound as a treatment for patients with relapsed/refractory CLL and a variety of subtypes of non-Hodgkin's lymphoma (NHL), including diffuse large B-cell lymphoma (DLBCL).  ABT-199/GDC-0199 as a monotherapy in patients with relapsed/refractory CLL harboring the 17p deletion is under investigation in an ongoing Phase 2 clinical trial.
  • Also at ASCO, AbbVie released preliminary results from an ongoing Phase 1 study of ABT-414, an anti-epidermal growth factor receptor (EGFR) monoclonal antibody drug conjugate, in combination with temozolomide, which showed four objective responses, including one complete response, in patients with recurrent or unresectable glioblastoma multiforme.  The trial was designed to evaluate the toxicities, pharmacokinetics and recommended Phase 2 dose of ABT-414 when administered every other week in combination with temozolomide in patients with recurrent or unresectable glioblastoma.  Other important assessments included adverse events, pharmacokinetic parameters, objective response and tumor tissue epidermal growth factor receptor biomarkers.
  • The New Drug Application for AbbVie's investigational, all-oral, interferon-free regimen for the treatment of adult patients with chronic genotype 1 hepatitis C virus (HCV) infection was accepted by the U.S. Food and Drug Administration (FDA) and granted priority review.  Additionally, the Marketing Authorization Applications for AbbVie's HCV regimen were validated and are under accelerated assessment by the European Medicines Agency (EMA). 
  • AbbVie and Bristol-Myers Squibb announced that the FDA has granted elotuzumab, an investigational humanized monoclonal antibody, Breakthrough Therapy Designation for use in combination with lenalidomide and dexamethasone for the treatment of multiple myeloma in patients who have received one or more prior therapies.  Phase 3 studies are ongoing and expected to complete in 2015.
  • On June 19, the AbbVie board of directors declared a quarterly cash dividend of $0.42 per share, payable Aug. 15, 2014 to stockholders of record at the close of business on July 15, 2014. 

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