AbbVie announced financial results for the third quarter ended September 30, 2017.
- Reports Third-Quarter Diluted EPS of $1.01 on a GAAP Basis; Adjusted Diluted EPS of $1.41, Reflecting Growth of 16.5 Percent
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NORTH CHICAGO, Ill., Oct. 27, 2017 /PRNewswire/ -- AbbVie announced financial results for the third quarter ended September 30, 2017. "We are pleased with the significant progress we have made with our strategic priorities, including the recent settlement of our HUMIRA patent disputes with Amgen, and the significant advancement with our late-stage pipeline of innovative products," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "This quarter we achieved a number of milestones, including promising data from several pivotal studies, regulatory approvals for MAVYRET and the U.S. regulatory submission and priority review designation for elagolix. We remain confident in our ability to continue to successfully execute on our long-term strategy and fuel sustainable industry-leading performance." Third-Quarter Results
Key Events from the Third Quarter
Full-Year 2017 Outlook AbbVie is updating its GAAP diluted EPS guidance for the full-year 2017 to $4.27 to $4.29. AbbVie now expects to deliver adjusted diluted EPS for the full-year 2017 of $5.53 to $5.55, representing growth of 14.9 percent at the midpoint. The company's 2017 adjusted diluted EPS guidance excludes $1.26 per share of intangible asset amortization expense, changes in the fair value of contingent consideration, and other specified items. Update To Long-Term Strategic and Financial Objectives Today, AbbVie is providing an update to the company's long-term strategic and financial objectives, including its progress against the long-range guidance provided in October 2015. AbbVie is on track to meet or exceed its long-range guidance, and now expects global HUMIRA sales to approach $21 billion in 2020. For 2018, AbbVie expects adjusted EPS in the range of $6.37 to $6.57, reflecting growth of approximately 15 to 19 percent from the mid-point of the 2017 revised guidance range. The company's 2018 adjusted diluted EPS guidance excludes intangible asset amortization expense, changes in the fair value of contingent consideration, and other specified items. The company has also posted a slide presentation regarding the strategic update on the Investor Relations website at investors.abbvie.com. Company Declares Dividend Increase of 11 Percent AbbVie is also announcing today that its board of directors declared an increase in the company's quarterly cash dividend from $0.64 per share to $0.71 per share beginning with the dividend payable on February 15, 2018 to shareholders of record as of January 12, 2018. This reflects an increase of approximately 11 percent, continuing AbbVie's strong commitment to returning cash to shareholders through a growing dividend. Since the company's inception in 2013, AbbVie has increased its dividend by more than 77 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years. About AbbVie AbbVie is a global, research-driven biopharmaceutical company committed to developing innovative advanced therapies for some of the world's most complex and critical conditions. The company's mission is to use its expertise, dedicated people and unique approach to innovation to markedly improve treatments across four primary therapeutic areas: immunology, oncology, virology and neuroscience. In more than 75 countries, AbbVie employees are working every day to advance health solutions for people around the world. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on Twitter, Facebook or LinkedIn. Conference Call AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our third-quarter performance and to provide an update to the company's long-term strategic and financial objectives. The call will be webcast through AbbVie's Investor Relations website at investors.abbvie.com. The company has also posted a slide presentation regarding today's strategic update, which can also be found on the Investor Relations website. An archived edition of the call will be available after 11:00 a.m. Central time. Non-GAAP Financial Results Financial results for 2017 and 2016 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. AbbVie's management believes non-GAAP financial measures provide useful information to investors regarding AbbVie's results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. The company's 2017 financial guidance is also being provided on both a reported and a non-GAAP basis. Forward-Looking Statements Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "project" and similar expressions, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie's operations is set forth in Item 1A, "Risk Factors," of AbbVie's 2016 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. AbbVie Inc.
Key Product Revenues
Quarter Ended September 30, 2017
(Unaudited)
% Change vs. 3Q16
Net Revenues (in millions) International Total
U.S. Int'l. Total U.S. Operational Reported Operational Reported
---- ------ ----- ---- ----------- -------- ----------- --------
ADJUSTED NET
REVENUESa $4,586 $2,409 $6,995 13.3% 0.9% 3.0% 8.8% 9.5%
Humira 3,151 1,550 4,701 19.1 6.8 9.7 14.8 15.8
Imbruvicab 574 114 688 31.0 80.7 80.7 37.3 37.3
HCV 60 216 276 (19.5) (29.8) (28.7) (27.7) (26.8)
Lupron 161 40 201 4.1 1.6 3.5 3.6 4.0
Creon 215 - 215 14.8 n/a n/a 14.8 14.8
Synagis - 116 116 n/a 23.5 21.0 23.5 21.0
Synthroid 191 - 191 1.5 n/a n/a 1.5 1.5
AndroGel 147 - 147 (14.9) n/a n/a (14.9) (14.9)
Kaletra 16 69 85 (39.2) (40.4) (38.2) (40.2) (38.4)
Sevoflurane 19 81 100 0.5 (3.3) (3.4) (2.6) (2.7)
Duodopa 16 78 94 56.4 16.6 21.5 22.0 26.3
Note: "Operational" growth reflects the
percentage change over the prior year
excluding the impact of exchange rate
fluctuations.
n/a = not applicable
a Adjusted net revenues exclude
specified items. Refer to the
Reconciliation of GAAP Reported to
Non-GAAP Adjusted Information for
further details. Percentage change
is calculated using adjusted net
revenues.
b Reflects profit sharing for
Imbruvica international revenues.
AbbVie Inc.
Key Product Revenues
Nine Months Ended September 30, 2017
(Unaudited)
% Change vs. 9M16
Net Revenues (in millions) International Total
U.S. Int'l. Total U.S. Operational Reported Operational Reported
---- ------ ----- ---- ----------- -------- ----------- --------
ADJUSTED NET REVENUESa $13,284 $7,193 $20,477 14.1% 1.2% 0.8% 9.2% 9.1%
Humira 9,048 4,487 13,535 19.8 6.8 6.0 15.1 14.8
Imbruvicab 1,559 306 1,865 36.0 75.4 75.4 41.2 41.2
HCV 124 640 764 (56.6) (30.5) (30.7) (36.7) (36.9)
Lupron 488 117 605 0.6 (0.5) (0.1) 0.4 0.5
Creon 596 - 596 15.3 n/a n/a 15.3 15.3
Synagis - 456 456 n/a (1.7) (0.8) (1.7) (0.8)
Synthroid 576 - 576 3.1 n/a n/a 3.1 3.1
AndroGel 437 - 437 (12.7) n/a n/a (12.7) (12.7)
Kaletra 54 256 310 (39.9) (24.3) (21.7) (27.7) (25.7)
Sevoflurane 56 255 311 (2.4) (3.8) (5.5) (3.5) (4.9)
Duodopa 44 211 255 70.8 12.3 11.7 19.2 18.7
Note: "Operational" growth reflects the
percentage change over the prior year
excluding the impact of exchange rate
fluctuations.
n/a = not applicable
a Adjusted net revenues exclude
specified items. Refer to the
Reconciliation of GAAP Reported to
Non-GAAP Adjusted Information for
further details. Percentage change
is calculated using adjusted net
revenues.
b Reflects profit sharing for
Imbruvica international revenues.
AbbVie Inc.
Consolidated Statements of Earnings
Quarter and Nine Months Ended September 30, 2017 and 2016
(Unaudited) (In millions, except per share data)
Third Quarter Nine Months
Ended September 30 Ended September 30
2017 2016 2017 2016
---- ---- ---- ----
Net revenues $6,995 $6,432 $20,477 $18,842
Cost of products
sold 1,616 1,504 4,760 4,278
Selling, general and
administrative 1,452 1,381 4,324 4,202
Research and
development 1,222 1,106 3,580 3,176
Acquired in-process
research and
development - 80 15 160
--- --- --- ---
Total operating cost
and expenses 4,290 4,071 12,679 11,816
----- ----- ------ ------
Operating earnings 2,705 2,361 7,798 7,026
Interest expense,
net 252 250 752 675
Net foreign exchange
loss (gain) 9 (4) 28 313
Other expense, net 349 101 484 152
--- --- --- ---
Earnings before
income tax expense 2,095 2,014 6,534 5,886
Income tax expense 464 416 1,277 1,324
--- --- ----- -----
Net earnings $1,631 $1,598 $5,257 $4,562
====== ====== ====== ======
Diluted earnings per
share $1.01 $0.97 $3.27 $2.78
===== ===== ===== =====
Adjusted diluted
earnings per sharea $1.41 $1.21 $4.11 $3.62
===== ===== ===== =====
Weighted-average
diluted shares
outstanding 1,603 1,640 1,602 1,633
a Refer to the Reconciliation of GAAP
Reported to Non-GAAP Adjusted
Information for further details.
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended September 30, 2017
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
3Q17
Earnings Diluted
Pre-tax After-tax EPS
------- --------- ---
As reported (GAAP) $2,095 $1,631 $1.01
Adjusted for specified items:
Intangible asset
amortization 268 201 0.13
Milestones and other
R&D expenses 32 32 0.02
Change in fair value
of contingent
consideration 401 401 0.25
Litigation reserves 4 3 -
Other 6 5 -
As adjusted (non-
GAAP) $2,806 $2,273 $1.41
====== ====== =====
Milestones and other R&D expenses
are associated with milestone
payments for previously announced
collaborations. Other includes
restructuring charges associated
with streamlining global
operations.
2. The impact of the specified items by line item was as follows:
3Q17
Cost of SG&A R&D Other
expense,
products net
sold
----
As reported (GAAP) $1,616 $1,452 $1,222 $349
Adjusted for specified items:
Intangible asset amortization (268) - - -
Milestones and other R&D expenses - - (32) -
Change in fair value of contingent consideration - - - (401)
Litigation reserves - (4) - -
Other (6) - - -
As adjusted (non-GAAP) $1,342 $1,448 $1,190 $(52)
====== ====== ====== ====
3. The adjusted tax
rate for the third
quarter of 2017 was
19.0 percent, as
detailed below:
3Q17
Pre-tax Income Tax rate
income taxes
------ -----
As reported (GAAP) $2,095 $464 22.1%
Specified items 711 69 9.7%
As adjusted (non-GAAP) $2,806 $533 19.0%
====== ==== ====
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended September 30, 2016
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
3Q16
Earnings Diluted
Pre-tax After-tax EPS
------- --------- ---
As reported (GAAP) $2,014 $1,598 $0.97
Adjusted for specified items:
Intangible asset
amortization 208 168 0.11
Acquired IPR&D 80 80 0.05
Acquisition related
costs 123 70 0.04
Change in fair value
of contingent
consideration 104 104 0.06
Other (40) (26) (0.02)
As adjusted (non-
GAAP) $2,489 $1,994 $1.21
====== ====== =====
Acquired IPR&D primarily reflects an
R&D collaboration. Acquisition
related costs primarily includes
compensation expense and other costs
associated with the acquisition of
Stemcentrx, as well as the
amortization of the acquisition date
fair value step-up for inventory
related to the acquisition of
Pharmacyclics. Other includes
milestone revenue under a previously
announced collaboration, prior
period royalty revenue related to a
patent lawsuit settlement and
restructuring charges associated
with streamlining global operations.
2. The impact of the specified items by line item was as follows:
3Q16
Net Cost of SG&A R&D Acquired Other
revenues expense,
products IPR&D net
sold
----
As reported (GAAP) $6,432 $1,504 $1,381 $1,106 $80 $101
Adjusted for specified items:
Intangible asset amortization - (208) - - - -
Acquired IPR&D - - - - (80) -
Acquisition related costs - (53) (16) (54) - -
Change in fair value of contingent consideration - - - - - (104)
Other (46) (8) 3 (1) - -
As adjusted (non-GAAP) $6,386 $1,235 $1,368 $1,051 $ - $(3)
====== ====== ====== ====== === === ===
3. The adjusted tax
rate for the third
quarter of 2016 was
19.9 percent, as
detailed below:
3Q16
Pre-tax Income Tax rate
income taxes
------ -----
As reported (GAAP) $2,014 $416 20.7%
Specified items 475 79 16.6%
As adjusted (non-GAAP) $2,489 $495 19.9%
====== ==== ====
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Nine Months Ended September 30, 2017
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
9M17
Earnings Diluted
Pre-tax After-tax EPS
------- --------- ---
As reported (GAAP) $6,534 $5,257 $3.27
Adjusted for specified items:
Intangible asset
amortization 808 606 0.37
Milestones and other
R&D expenses 68 68 0.04
Acquired IPR&D 15 15 0.01
Acquisition related
costs 73 49 0.03
Change in fair value
of contingent
consideration 547 546 0.34
Litigation reserves 97 65 0.04
Other 19 16 0.01
As adjusted (non-
GAAP) $8,161 $6,622 $4.11
====== ====== =====
Milestones and other R&D expenses are
associated with milestone payments
for previously announced
collaborations. Acquired IPR&D
primarily reflects an upfront
payment related to a licensing
arrangement with a third party.
Acquisition related costs primarily
includes the amortization of the
acquisition date fair value step-up
for inventory related to the
acquisition of Pharmacyclics. Other
includes restructuring charges
associated with streamlining global
operations.
2. The impact of the specified items by line item was as follows:
9M17
Cost of SG&A R&D Acquired Other
expense,
products IPR&D net
sold
----
As reported (GAAP) $4,760 $4,324 $3,580 $15 $484
Adjusted for specified items:
Intangible asset amortization (808) - - - -
Milestones and other R&D expenses - - (68) - -
Acquired IPR&D - - - (15) -
Acquisition related costs (52) (14) (5) - (2)
Change in fair value of contingent consideration - - - - (547)
Litigation reserves - (97) - - -
Other (14) (5) - - -
As adjusted (non-GAAP) $3,886 $4,208 $3,507 $ - $(65)
====== ====== ====== === === ====
3. The adjusted tax
rate for the first nine
months of 2017 was 18.9
percent, as detailed
below:
9M17
Pre-tax Income Tax rate
income taxes
------ -----
As reported (GAAP) $6,534 $1,277 19.5%
Specified items 1,627 262 16.1%
As adjusted (non-
GAAP) $8,161 $1,539 18.9%
====== ====== ====
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Nine Months Ended September 30, 2016
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
9M16
Earnings Diluted
Pre-tax After-tax EPS
------- --------- ---
As reported (GAAP) $5,886 $4,562 $2.78
Adjusted for specified items:
Intangible asset
amortization 554 445 0.27
Milestones and other
R&D expenses 70 70 0.04
Acquired IPR&D 160 160 0.10
Acquisition related
costs 327 229 0.15
Change in fair value
of contingent
consideration 145 145 0.09
Venezuela
devaluation loss 298 298 0.18
Other 4 31 0.01
As adjusted (non-
GAAP) $7,444 $5,940 $3.62
====== ====== =====
Milestones and other R&D expenses are
associated with milestone payments
for previously announced
collaborations. Acquired IPR&D
primarily reflects an R&D
collaboration, as well as upfront
payments related to licensing
arrangements with third parties.
Acquisition related costs primarily
includes compensation expense,
financing and other costs associated
with the acquisition of Stemcentrx
and Boehringer Ingelheim compounds,
as well as the amortization of the
acquisition date fair value step-up
for inventory related to the
acquisition of Pharmacyclics. Other
includes a charge for the impairment
of an intangible asset,
restructuring charges associated
with streamlining global operations,
a charge to increase tax reserves,
milestone revenue under a previously
announced collaboration and prior
period royalty revenue related to a
patent lawsuit settlement.
2. The impact of the specified items by line item was as follows:
9M16
Net Cost of SG&A R&D Acquired Net Other
revenues foreign expense,
products IPR&D exchange net
sold loss
---- ----
As reported (GAAP) $18,842 $4,278 $4,202 $3,176 $160 $313 $152
Adjusted for specified items:
Intangible asset amortization - (554) - - - - -
Milestones and other R&D expenses - - - (70) - - -
Acquired IPR&D - - - - (160) - -
Acquisition related costs - (144) (36) (135) - - (12)
Change in fair value of contingent consideration - - - - - - (145)
Venezuela devaluation loss - - - - - (298) -
Other (66) (61) (15) 6 - - -
As adjusted (non-GAAP) $18,776 $3,519 $4,151 $2,977 $ - $15 $(5)
======= ====== ====== ====== === === === ===
3. The adjusted tax
rate for the first nine
months of 2016 was 20.2
percent, as detailed
below:
9M16
Pre-tax Income Tax rate
income taxes
------ -----
As reported (GAAP) $5,886 $1,324 22.5%
Specified items 1,558 180 11.6%
As adjusted (non-
GAAP) $7,444 $1,504 20.2%
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Company Codes: NYSE:ABBV |
