Good morning, everybody. I'm Chris Schott at JP Morgan, and it's my pleasure to be hosting a fireside chat today with AbbVie. From the company, we have Rob Michael, President and Chief Operating Officer, Jeff Stewart, Chief Commercial Officer, Scott Reents, CFO, and Roopal Thakkar, Chief Medical Officer. So, thanks everyone for joining us today.
Thanks for having us, Chris.
Yeah. Rob, so Rob, maybe just to kick off, looking at 2024, can you just walk through some of your top priorities?
Yeah.
There's been a lot of activity with the company, so how, how have those maybe changed over the course of the last year or so?
You know, the focus for the company is clearly on trying to return to growth in 2025, like strong growth in 2025. So it's really about the growth platform. I'm gonna have Jeff co-cover some of the details, but if you think about it, it's really the five key therapeutic brands, SKYRIZI, RINVOQ, UBRELVY, VRAYLAR, QULIPTA, as well as the Aesthetics portfolio. So maybe Jeff can talk about some of the progress we're making on those five brands, and I'll come back on the pipeline.
Yeah, I mean, these big brands, you know, as Rob described, the growth platform, we have very, very strong momentum. So if you think about SKYRIZI and RINVOQ, we anticipate continued very, very strong share gains over the year. That's driven by sort of fundamental, sort of commercial execution, and I think also several catalysts that we'll see over the year. Some of those are R&D catalysts that have already taken place. We often describe for SKYRIZI and RINVOQ really an unprecedented position with nine head-to-head trials across all of those big indications against really leading players. And so a full year impact of having those big head-to-head trials is gonna be very, very important going forward. And then we have additional indications.
So for example, our performance has been very strong in IBD for both SKYRIZI and RINVOQ, and we'll have the fourth indication approved really in the middle of the year. So SKYRIZI and RINVOQ are powerhouses.
Really, what we're seeing now is essentially, we're seeing nice share capture in psoriasis, rheum, AD for the brands, but really it's IBD that's really taken off. I mean, for Crohn's right now, for in-place patients, we're capturing one out of three between SKYRIZI and RINVOQ. Then, for RINVOQ, as Jeff mentioned, we have the UC approval on RINVOQ. We're capturing one out of five.
Hmm.
There's really a tremendous share ramp that we're seeing for IBD.
Great. So if we move to another big platform, which is our neuroscience platform, it's also very encouraging. So we had significant growth with the approval of adjunctive major depressive disorder for VRAYLAR. That brand is growing very, very nicely. And then we have really what we think of sort of our triple play in migraine. So we have BOTOX Therapeutic, strong growth across the globe. We see that continuing in 2024. And then our oral products, both UBRELVY and QULIPTA. So in 2024, we're going to see the expansion of QULIPTA into the international markets.
Mm-hmm
... which is very, very strong, and just continued momentum up into sort of the leading share position there for those oral CGRPs. So this is attractive.
Neuroscience probably isn't appreciated as much as we would like it to be.
Mm-hmm.
I mean, it's our second largest therapeutic area. It's gonna grow by over $1 billion in 2023. We talked about VRAYLAR with the adjunctive MDD approval about a year ago. We've seen tremendous ramp. We're gonna grow about 35% in 2023. And then you look at the oral CGRP portfolio with UBRELVY and QULIPTA, those on a combined basis will approach 50% growth. So we're seeing really nice momentum on our neuroscience portfolio, really driven by psychiatry with VRAYLAR and then migraine portfolio, inclusive of BOTOX therapeutic. About 40% of BOTOX therapeutic is for chronic migraine.
Excellent. And if we move on to another large platform, which, of course, is aesthetics. So we are seeing some nice recovery in those markets. I'll describe that.
Yeah
... you know, briefly. So for example, BOTOX, typically what happens after you've had, like, some economic disruption, in this case, the hyperinflationary approach, BOTOX comes back first. That's sort of the lead there, and we see that. We see return-to-market growth in the third quarter. We're gonna continue to see momentum in the fourth quarter. And our share position-
Yeah
... despite the launch of other, other products, you know, so-called long-acting products, has not, has not moved at all. So we've been incredibly efficient at, you know, maintaining our leading share position of about 68%. Now, the fillers are also recovering. That market is recovering as well. Typically, it's on a, a couple quarter lag-
Yep
... from the toxin market. And what's also encouraging, we're seeing that that's recovering, and our share position is even stronger than it was before. So we're actually seeing share gains, mostly being driven by some of our new product launches, our new toxins, such as VOLUX and SKINVIVE. So that's also very attractive in terms of our overall momentum as we come into 2024.
There's been questions on the aesthetics business, but we, you know, we're seeing it trend very nicely. We expect it to return to growth in 2024. As Jeff mentioned, toxins are clearly on that trend. We've now seen two quarters of very nice growth.
Mm-hmm.
Fillers are getting there, but we're most encouraged by the share performance. Despite Daxxify coming in the market, we've held our share for BOTOX. And then to see JUVEDERM gaining share with the new launches of VOLBELLA and SKINVIVE is very encouraging.
Great. And we continue on with, of course, eye care. And eye care is right now it's a very stable business, but we're anticipating a big transformation in the pipeline with REGENXBIO. So fundamentally, our strategy there is in interventional retina and interventional glaucoma. And, you know, we continue to build out that business. It's a very, very attractive business. Commercially, it's very easy to get to the top physicians in a very efficient, sort of SG&A-driven manner. And we look forward to continuing to see that data set on the gene therapy with REGENXBIO, because it's really potentially highly transformative in both wet AMD. Roopal can talk about this a little bit later if we need to, and also diabetic retinopathy. So that's—
Yeah
... a significant opportunity for us.
Maybe to round out the 24 priorities, if you think of the pipeline milestones, Jeff mentioned the UC approval in SKYRIZI is an important milestone for us this year, as well as 951 approval in the U.S. We now just announced the E.U. approval. We've been approved in Japan, so it will now have essentially by the middle of the year the global launch of 951. That's important. Potential submission of telisotuzumab vedotin, our ADC targeting c-Met, as well as phase 3 starts for lutikizumab in immunology, as well as 383, our BCMA bispecific in oncology. So some important pipeline milestones as well.
Excellent.
I would say, just lastly before we move on, to Rob's point, obviously, we had two of these very important deals for the company-
Mm-hmm.
which were designed really to provide the growth in the next decade, because we're in very strong position here for this decade, given the momentum that we described. But certainly, it will be a big focus of the management team to be able to close those deals, integrate properly, and really begin what will be traditionally in our company, very strong execution on integration.
We're obviously very excited about both deals, then, of course, managing the U.S. HUMIRA biosimilar erosion, which has gone exceptionally well. But I'd say, you know, it's really about the growth platform, advancing the pipeline, and then closing and integrating these deals.
Excellent. Maybe on, on the BD front, you took some dilution with the transactions, I think about $0.32-
Yeah.
You announced. You reiterated, though, the $11 trough earnings level.
Yeah.
Can you speak to what gave you confidence?
Sure
... to be able to restate that commitment despite some of the dilution that did come?
Of course. Yeah, so if you recall, originally the floor was at $10.70. We took it up to $11 on the Q3 call, really because of the momentum of the growth platform. It was greater than $1 billion and $4 above our original guidance, so we flowed that through on the third quarter call. Fast-forward then to December, we're announcing these deals. We essentially, at that point, had a good sense of where HUMIRA contracting was landing, and essentially, we are gonna have more parity access than we initially anticipated. So it was really that level of, I'd say, volume that we expect to still capture in 2024 for HUMIRA that we initially did not anticipate we would, that allowed us to essentially absorb that dilution.
Okay. And I guess the question, just greater visibility. You've got HUMIRA in the nearer term, obviously, SKYRIZI, RINVOQ trends are going in a nice direction. Did that factor into your willingness to look to do deals that maybe weren't near-term accretive?
Yeah
And you could kinda maybe absorb more dilution than otherwise?
I'd say it's the overall growth platform performance.
Okay.
So we look at just the momentum we're building, we expect to return to strong growth in 2025. When you look at the trajectory, you know, we've committed to high single-digit CAGR for the company from 2024 through 2029 on the top line, and operating margin expansion, which would mean the earnings would grow faster than sales. So there's plenty of capacity. You know, by the time we get to 2028, these two deals essentially offset each other. So there's some near-term dilution that we can easily absorb, given the rate of growth from the growth platform.
Okay, great. On the margin profile, I know as you kinda touched on there, 2024 is expected to come in this kinda 46%-47% range. Just remind us, underlying assumptions there, did that change at all with the recent transactions? And then just how do I think about margin progression as we look out to 2025 and beyond?
I think there's enough room in that range where we would look at the additional R&D that we're gonna be investing-
Mm-hmm
... for these two transactions, that we could still operate within that range. And so, you know, we'll give you guidance on the Q4 call, but expect it to be within that 46%-47% range.
Okay.
And then we do expect to return to operating margin expansion, starting in 2025. Given the amount of, you know, growth on the top line, we've had a long history of being able to leverage the P&L. We'll fully invest in the business. That will essentially be the gating item for how rapidly we expand operating margin will be. We'll make sure that we're investing in R&D and SGA to drive long-term growth, but we do expect operating margin to begin expanding again in 2025-
Okay
and then beyond.
Great. And then you talked about the company's ability to delever back down to 2x by 2026. Just... Should we talk about or think about AbbVie mostly focused on maybe smaller, earlier-stage deals post these transactions? Just how do I think about the, the balance of leverage versus the longer-term opportunity?
Sure. I mean, I think, we have more balance sheet capacity. It's really not about balance sheet capacity, it's really more about organizational focus.
Okay.
We wanna make sure that we close and integrate these two companies well.
Mm-hmm.
We really like the portfolio we have. We look across the growth platform, plus these two assets which are set up to help drive growth in the next decade. We're very satisfied with the position we're in. We will continue to look for early-stage opportunities will be smaller in size because it's the... The focus for BD throughout 2023 was looking for assets that can drive long-term growth, really, think in the next decade. We have clear line of sight for this decade with our current portfolio. We didn't need to go outside to supplement that. So even though these two deals will add some level of revenue this decade, it wasn't really about that, it was more about the next decade. So our BD focus doesn't change.
We continue to look for assets that can drive growth in the next decade, but they will be more early-stage, smaller-sized deals for the foreseeable future.
Okay, that's helpful. Maybe moving over to, to HUMIRA. Talk a little bit about expectations for, for 2024 as we think about access and pricing. I think, maybe on the second quarter call, you talked about, I think, at that time, it was a $7 billion U.S. consensus number you thought was a reasonable target.
Yeah.
Is that still the case? And, just any other details you might want to share.
Sure. Well, well, clearly, you know, since we, I provided that on both the Q2 call and the Q3 call, I mentioned that the analyst sell side average of $7 billion was a reasonable expectation. Well, clearly, since then, things transpired more positively. I mean, we at that point, we weren't anticipating the level of parity access. You know, we will still have parity access for the vast majority of lives. It will step down year-over-year, but we'll still have, I think, a very good position, and so it is reasonable to assume we'll be, we'll be better than that. You know, we'll obviously give you more details on the call. I have said, and this will still hold true, that expect the majority of the erosion in 2024 to really come from price.
Okay.
That's for two reasons: one, if you recall, in the middle of the year, we increased our rebates. We knew we had, you know, at that point, it was 7-9 biosimilars coming in the middle of the year. We felt it was important to make sure that we maintain parity access, make sure that our patients have that continuity of access, so we did offer additional rebates in the second half of the year. So you'll see an annualization impact from that. Plus, we did offer additional rebates for 2024 to maintain that level of parity access, and so it will be predominantly price. There will be some volume. As I mentioned, we're not gonna be quite at the level of, of parity access we had in 2023, but still, the vast majority lives will be covered.
Okay. And then just maybe, I know there was an announcement with CVS last week. Just put some perspective of how to think about that relative to those comments you made.
Yeah. So I think if you, if you listen to what Rob just highlighted, the vast majority of our lives will still be at parity, right? So if you take the CVS announcement in particular, they have a couple big segments of business. They have template lives, which are typically smaller employers, unions, et cetera, and they've got custom lives, which are big health plans, like Anthem, for example. So some of their formularies on the template side, so let's say half of their, of their business, are going to disadvantage HUMIRA in favor of low list price biosimilars.
Mm-hmm.
That's very consistent with what we said over time. As time goes by, you'll see more adoption, particularly with certain clients that want to assess those lower list price products. So no surprises there. Again, still the majority of even CVS will be at parity.
Okay.
So when you also take a look at another component of the announcement, this was for an agreement on a co-branded HUMIRA, which is essentially just the same HUMIRA, slightly different packaging because it's got a small little Cordavis logo. That's their distribution company.
Okay.
That will be available for the lives that want to continue to think about HUMIRA as parity. So it's really nothing beyond that, so very consistent with what we planned for. We obviously knew that this was going to take place, and also very consistent with what Rob had just highlighted.
The success you've had this year or last year and this year on, on HUMIRA, does that change at all how you think about the tail of the product? Maybe just share your thoughts of-
Yeah
... as we look out the next few years, what should we think about from here?
I mean, we're having a lot of internal conversations right now, what the tail looks like. Obviously, this is an unprecedented situation in the industry, and so we've learned a lot over the course of last year. I think there's still more learning as we go through 2024. So I wouldn't expect us to give any more additional color on the tail in 2024. But I think certainly as it settles out in 2025, 2026, you know, sometime in the 2025 timeframe, could we come out and give a little bit more guidance on what the tail could look like?
Mm-hmm.
I think that would be an appropriate time. But I think we need to see. If you think about, you know, it's gonna be the first, you know, full year with biosimilars this year. We have to look at, you know, what does interchangeability mean? There's enough, I think, moves in the market that could take place, that it, I think it's prudent to see how 2024 plays out before we start to opine on the tail. We're clearly very, very, pleased with the way it's transpired and the way the team has managed it. But certainly, I don't think it's a bit premature to be giving a lot more color on the tail in 2024, but I think in 2025, we can be in that position.
Okay. Okay, excellent. Maybe staying on immunology and shifting over to SKYRIZI, RINVOQ. We're coming off a very strong 2023 kind of trends for both assets.
Yeah.
Just high level, talk about, as you think about how large these products could become, just any, any perspective-
Yeah
... you can share.
I think probably the best proxy is looking at the relationship between in-place shares, so that's the dynamic share capture, new patients, switching patients, and TRx share, to get a sense of, like, how much head room for growth is there, right? And TRx share doesn't always get to in-place share, but it'll continue to pull up if in-place share is higher. So if you think about, let's go through it, RA for RINVOQ. Our in-place share is in the low teens, right? I think our TRx share right now is just under 7%. So that tells you there's certainly more room for growth there.
Mm-hmm.
Atopic dermatitis, in-place share is in the high teens, and then our TRx share is the high single digits. So a lot of room for growth there. And then in SKYRIZI with psoriasis, we're capturing one out of two patients, so 50% in-place share, and the TRx share is in the mid- to high 30s. So there's still a lot of room in those indications. Where you'll, I think, would see the most rapid growth from where we are today, though, is in IBD.
Okay.
So IBD, we mentioned earlier that between SKYRIZI and Crohn's, we're capturing about a 33% in-place share. So if and I think our share is in the mid-single digits, our TRx share is in the mid-single digits, so tremendous growth potential there.
Mm-hmm.
And then in UC, it's in the high teens, almost 20% for RINVOQ. We'll have SKYRIZI as well, and that one is also in the. It's, I think, in the mid-single digits TRx share. So there's plenty of room for growth in those indications. Plus, we're gonna have new indications for RINVOQ, alopecia, vitiligo, lupus, GCA-
Mm
... that will come online later in this decade, and so that'll be another inflection of growth. So when you think about that, new size, and these are markets that are growing-
Yeah
... right? So you add market growth, you think about the share growth potential, the new indications, they could become quite significant.
Yeah. And, and you expect that with those new indications coming on over time, that this should be a growth franchise for the foreseeable future, is it?
I mean, it should be, it should be a strong growth franchise. I mean, right now, we've said at least the, until 2033.
Mm-hmm.
And that's where I, you know, when I look at... I get the question a lot on the difference between our outlook and sell-side consensus. The biggest disconnect is SKYRIZI and RINVOQ, and you just don't see the type of growth. You see, I think it's somewhat like low single-digit growth from 27 on. It will continue—the both brands will continue to grow robustly, and so we would expect that robust growth through the early part of the next decade.
Excellent. Pricing, I think, is kind of debate in immunology. I know there was some noise with Q1 last year, it kind of quieted down a little bit. Just share your perspective as, you know, maybe HUMIRA prices come lower and biosimilar prices come down. Does that impact at all your payer discussions or how you think about price for your branded assets?
You know, the payers are always looking for discounts. They'll basically try to do different levers in terms of their formularies. That's just normal negotiation. But if you really take a step back, you know, one of the biggest fundamental aspects is how distinctive SKYRIZI and RINVOQ are.
Mm-hmm.
So again, I highlighted in the opening remarks, you know, we have, we have nine head-to-head trials. The last one, the ninth that we just looked at, was an IBD versus the market-leading STELARA, and it was a huge difference in terms of overall healing on endoscopy, which is now the number one driver of basically market share and preference. So the ability for us-
... to physicians and also to payers and the medical officers of the payers to sort of highlight that distinction, helps gives us some significant protection, in terms of the biosimilars that start to, have started to appear.
Mm-hmm.
So in the last two years, we've seen no material pressure on the price. Now, it's gonna continue to grow over time, and we'll have to continue to defend the value, but we're really prepared to do that. I think the second key point that I'll make, which is sometimes not very apparent, is if you recall a couple of years ago, which you'll remember, that RINVOQ in the United States is actually stepped behind TNF based on the Xeljanz oral surveillance study that came out in RA. So in some ways, it's already basically stepped behind, if you wanna call it a biosimilar or whatever is a lower-priced option for a huge piece of the business.
So in some ways, there's this moat around that drug in terms of basically it's feeding into growing markets in the second, third, and fourth line, and you're still achieving that level of growth. So when we look at it, we think that the level of distinction, the market structure is gonna allow us to navigate pricing very well.
So I guess in that context, is thinking about something like a low single-digit price erosion, is that, is that a sort of a reasonable way to envision what price could look like here?
I think that's a reasonable assumption. We'll obviously be more specific when we give the guidance on the Q4 call, so where we've landed for 2024. But I think for modeling purposes, I think that's a very fair approach.
But to your point that, you know, last year when we saw the, higher price erosion, that was a unique time point-
Yeah
... with seven indications that all came in one year, which was really, again, unprecedented.
Mm-hmm.
We were able to, with those concessions at that moment in time, basically achieve paid access, you know, within 60 days. So it was a huge lever to basically drive the type of volume and overall value that we've created in 2023 as we go into 2024.
I mean, it was an appropriate trade-off when you consider that these two brands will grow over 50% in 2023, and so that's with high single-digit price concessions that will not continue.
Yeah. Yeah. Excellent. I guess just on RINVOQ, I was hoping to get a little bit more color on the IBD opportunity there. I think that's been one that SKYRIZI has been a great drug. I think there's a little more controversy around, around RINVOQ after the label change. So can you just talk about the launches you've seen there, how those are trending versus your expectations? And you shared some of those in-place share numbers, but where do you think share can go for that product in IBD?
Maybe I'll ask Roopal to talk about... 'Cause I think it's really critical over a drug like RINVOQ and IBD just doesn't move that way based on commercial execution. It's a very, very special product in IBD, and then maybe I'll address your share question.
Yeah. Thanks, Jeff. A couple of things.
Mm-hmm.
So in ulcerative colitis, we've seen the highest level of efficacy noted. Even with phase 2 readouts for other mechanism, phase 3 data from RINVOQ, for UC in particular, is still unmatched. And there's a couple of drivers that clinicians and patients really like, and one is just the rapid onset. It being an oral, works very fast. The second piece is you're able to not only improve symptoms to very high levels, but as Jeff was referencing, heal the gut, which is very important for clinicians as they see that as a marker for continued improvement and lack of other sequelae that the patients could have. So you combine that with the ability to remove steroids, it sets up a very, very nice profile as an oral.
And then what we thought going into RINVOQ development many, many years ago, that likely the JAK inhibitor pathway may not work in Crohn's disease. And I think we've seen that played out with other JAK inhibitors, which are not likely gonna ever get to market. But RINVOQ was a standout in Crohn's disease, so we see that as very differentiated. Even within the class, the mechanism for RINVOQ is very unique. And with that one, all the observed benefits that we saw in ulcerative colitis, we also saw the ability to take people off of their steroids during induction-
Mm-hmm
... which is extremely unique. We haven't even seen that with biologics. So that sets up a very impressive profile. And as Jeff was saying, the so-called moat, in a way, majority of the patients that are gonna be taking these drugs, 60%-70%+, have already seen an anti-TNF. So it's not like they have to wait to step through. Many of them can access it immediately and get that relief.
So if you think about the size there, we were always a little bit surprised, many years ago, at how fast IBD grew, even in the HUMIRA days.
Mm-hmm.
There's not a lot of medications. There's more in UC, which is the smaller of the two indications. There's not a lot of medications in Crohn's. So to Rob's point, when you look at, we just recently launched RINVOQ, and SKYRIZI hasn't been out very long, and the world hasn't fully seen the impact of the head-to-head versus STELARA. So today we're capturing one out of three patients, and the TRX share is in the, you know, mid-single digits. So you have significant headroom for, basically the wheel to turn and to create a lot of value. So, in some ways, if you look at one angle on the market, which is biopenetration, so what percent of the moderate to severe population-
... is exposed to a biologic. IBD is the highest, but on the other way to look at it is, you haven't seen basically really the lines of therapy start to develop like you have in the other areas. So in our view, it's actually an immature market, where there's still probably the most unmet needs in all of the, you know, biologic immunology, immunology area, and we've got two really nice horses to play there for a long time.
Yeah. Yeah. Should be a nice growth driver going forward.
Yeah.
Pivoting over to aesthetics, sounds like some encouraging trends you're seeing. Just elaborate a little bit more in terms of, you know, have we seen a bottom for this business? Can we really be comfortable that we're getting back to growth in 2024?
We're certainly seeing very nice trends, and we anticipated this. I mean, when we look at historically, this market in the U.S. grew in the mid-teens. And when we studied, whenever there's been, you know, economic headwind, it's rebounded very robustly coming out of that, right? We're starting to see, and not surprisingly, given the price points, you tend to see toxins recover before fillers. So we're very encouraged. As I mentioned, we saw a return of growth in the third quarter. We've seen an acceleration in the fourth quarter. We expect that to continue for toxins, and fillers are right behind it. So you know, all the metrics we're tracking are very encouraging in terms of, the market is recovering, and we're starting to see an acceleration in the overall market growth.
And in terms of your longer-term expectations, has anything changed in terms of-
No, it's been somewhat controversial. I've seen some reports on, you know, questioning our ability to hit the $9 billion-
Yeah
... by 2029, greater than $9 billion by 2029. And you think about it, from 2023 to 2029, to deliver that, you need high single-digit growth. I mentioned the market historically has grown in the mid-teens, right? So it's a market, you know, the penetration rates are very low. We're very good at driving that growth. And so, you know, clearly by, you know, market growth by itself should help you get there, but we're not counting on market growth alone. We have a very interesting pipeline. Jeff can talk about how Bonti, our short-acting toxin, fits into the overall portfolio. We're very excited about that. As a trial toxin for those consumers who are on the sidelines because they're fearful of an unnatural look, it's a great way to try it.
And we can talk a bit more on the details of how that would work, but ultimately, that could be an inflection in the market growth, and certainly also drive more share capture for BOTOX if it works. In short-acting, the consumer comes back, they're most likely going to want to have BOTOX going forward. So that's certainly something we're very excited about. Think about the masseter and platysma indications for BOTOX. Those will each add $200 million in revenue. And then we have the regenerative fillers that also will drive growth in the filler space. So we look at the combination of the market growth potential, given the penetration rates and history, as well as the pipeline. We feel very confident in delivering on that greater than $9 billion by 2029.
Great. Great. Continuing along, CNS, I know this is an important area for the company, maybe one that doesn't get as much attention as some others.
Yeah.
Maybe just bigger picture question, like, why is this the right market for AbbVie? I mean, it seems like you had some real success with these assets. Can you just talk a little bit about your kind of broader organizational interest in the space?
Yeah, I think that one aspect is that we, we always had some significant interest in, in neuroscience, but we didn't have a lot of significant on-market brands. We essentially had DUOPA. You know, there was a long history with Abbott many years ago, but that was the time has passed. And we had this very significant neuroscience discovery with Alzheimer's, degenerative issues like advanced Parkinson's, et cetera. So the Allergan acquisition for us was transformative because we're able to have some very nice on-market brands that came super fast with UBRELVY, QULIPTA, I mentioned therapeutic BOTOX, and then certainly VRAYLAR, which was a really special product that then got super boosted by this recent approval. So suddenly, when you have that on market, you start to say, "Okay, how can I build this out over time?
How can I anticipate my advanced pipeline?" And we just think it's very, very special. We think that there's very good pricing. We have fantastic commercial infrastructure. Our sales reps and medical experts, in some cases, have decades of relationships with psychiatrists, and they know these markets very, very well. So it's a nice fit. I mean, as we look at our growth rates, I mean, neuroscience is right up there with immunology in terms of the growth that we see. And it was through that lens that we basically looked to see, because we knew when VRAYLAR, which is a big driver, would go LOE-
Yeah
This was a piece of our consideration set for the recent acquisition with Cerevel. And so fantastic market, commercial expertise, very strong personnel, and then a back integrated into Roopal's area in discovery-
Mm-hmm
... which is powerful.
Well, maybe just to add, Jeff, the other thing that's attractive is the headroom for efficacy outcomes. So if you look at migraine, unipolar depression, depression, schizophrenia, anxiety, all these other states that we'd be interested in there, there's still a tremendous amount of room to gain efficacy to get to a cure-like level. It's reminiscent of IBD a little bit where efficacy still has a ways to go to serve. So a huge unmet need still exists.
We're very excited about Cerevel because it really gives us, with Emraclidine, a clear growth driver in psychiatry beyond VRAYLAR. Very attractive. And then, they have a very compelling KOR antagonist in their pipeline that fits very nicely within our overall neuroscience franchise. And so between our own pipeline, what Cerevel brings to the table, we feel that neuroscience will be a strong growth driver for a long time.
Can I ask on the Cerevel transaction, just your willingness to take kind of, or comfort of taking clinical development risk here? I mean, certainly, a very exciting class. Seems like the phase 1 data was obviously very positive, but-
... Just talk about as you when you thought about committing the capital there, how the diligence you did and the comfort you have in the asset.
Yeah, well, it starts out with a large phase Ib study, about 80 patients, so larger than a typical Ib. I would say that's outside of oncology. And then we saw the pattern with two doses achieving benefits in positive symptoms and negative symptoms. So you look at that together, and then you continue to see the profile, which is a singular molecular entity, once-a-day dosing with a good half-life, no need for titration, no food effect. That sets up a very strong profile. So that starts it all. And then when we look at the design of what's called a phase II, we see them more as pivotal based on their sizes. Two studies, over 370 patients, powered to achieve their endpoints adequately, as you would do in a phase III.
A very robust statistical analysis plan that contemplates, adjustments for multiple testing, all the things you would want to see to make it, robust from a regulatory standpoint. So those are the two ends of it. And in the middle, we're able to see aggregated, blinded data as the trials continue, and if you compare that data to what we see in Ib, again, aggregate, it looks similar, and that's from an efficacy standpoint and from a safety standpoint. So it sets up a very strong profile and some elements of de-risking before we get to the data. And the other thing is, when you take a profile like that, that has a very strong safety profile, very different from the atypicals. We don't see the sedation, the metabolic effects, the weight gains, the movement disorders, nor do we see anticholinergic effects.
Again, being a singular molecular entity, onboarding could be simple for a patient population in schizophrenia, that adherence can be very challenging if they can't take their meds. So being once a day helps there, and then not having the adverse events as they onboard really helps keep them on, especially outside of a clinical trial setting. A lot of things you do in a clinical trial don't always translate to the real world. So if you can have an enhanced profile, that's gonna help us in the real world. And the other big swing factor is that when you have that profile I just described, it allows you to transition to a long-acting injectable, potentially much more smoothly from an R&D standpoint, CMC standpoint.
Also, if you can stabilize the patient quickly and see that they're tolerating, then you're not worried about taking a risk for a depot injection once a month or even further stretched out. Because if they're not stable and they're not tolerating, then you don't want to give them a long-term because it's hard to reverse.
Sure
... once it's in.
Yeah.
So taken all together, I think that led us, along with the high unmet need and the large market, if you will, that exists, even if there's multiple assets, I seeing us with that profile being able to be very competitive.
Yeah. Yeah. Seems like a nice market opportunity. I know when I was starting to cover the group, these were some of, like, the biggest products across the industry, and-
Yeah
... I know it's been a while since we've had a lot of innovation, but it seems like that's kind of exciting.
There's a lot there.
Just pivoting over to your other acquisition here with the ImmunoGen. Just talk a little bit about what attracted you to this asset and how you kind of see it fitting into the broader oncology portfolio.
Yeah. I think with ELAHERE here, essentially being on market gives us an early entry into the solid tumors. We obviously have a pipeline in ADCs with telisotuzumab vedotin 400. So there was a nice fit there. It was an area, obviously, we've done a lot of research in ADCs. We saw the opportunity to get an early start on solid tumors, but also, we're excited about their pipeline as well. 151, their next generation ADC, targeting FR alpha, is very compelling. And then pivekimab in blood cancers, obviously, as you know, we have a presence in hematology. So we saw a very nice fit there as well, and we put it all together, and we thought about, you know, our main objective being driving growth into the next decade. It met all that criteria.
Okay. Can you talk a little bit about another maybe clinical development risk question? Like, how you think about the product moving upstream.
Yeah.
Where are you most confident? Where are you gonna see, you know-
Yeah
... the data we've seen so far translate? What's, what's the riskier piece of this?
That's right. So right now we see really terrific data in the platinum resistant, where it's a very high unmet need. There is accelerated approval, strong uptake, then a pivotal study, confirmatory study, reading out and under review right now that showed an overall survival benefit, which that has not been observed in an extended duration of an additional four months at the median. So that right there is very impressive. And in the resistant population, that's roughly half, the other half is the sensitive population. So there's no mechanistic reason why it wouldn't work in sensitive. It has to deal with, you know, do you progress before six months or after six months? That defines it. So again, nothing mechanistic or nothing driving that.
Mm-hmm.
There's also data in sensitive that's being generated now that looks very similar to resistant. So that, in effect, doubles the population. So you can take the programs that you're running and run them in sensitive as well, and also an opportunity that it's combinable with platinum in a safe way at full dose. So we've seen evidence of that. So that allows you to move further upstream. Also, we've seen evidence of efficacy in the medium expressers. If around the 35% is around the high expressers, 30% is the medium, so in effect, another doubling, potentially. And then we're able to do that in combination with a bevacizumab or a platinum, and then move even earlier, right after induction, where some patients qualify for PARP inhibition. We have an opportunity to combine there, or move on to bevacizumab for maintenance.
We've already seen data that can combine there. So it can start checking all the different categories, and we can start rapidly moving into studies that'll start reading out later in the... Well, very late in this decade, but mostly into the 2030s and beyond, as Rob was describing. And with 151, that's a biparatopic that binds to two different epitopes, may have a greater internalization, more stable linker, better half-life, that we can look at everything we just saw, potentially endometrial, triple-negative breast, lung can also play there. But with that enhanced potency, potentially even low FRα expressers. So that's how we would think about. So I think there's quite a bit of development work that we can do and still very high unmet need.
Great. Maybe last question here in the last minute or two. The street assigns still pretty fairly limited value, I'd say, for AbbVie's internal pipeline. What are you most excited about? Is there kind of like maybe two or three assets you'd point us to, to pay attention to?
Yeah, a couple, three. I mean, Rob, Rob alluded to a couple of them. So 383, I'll talk about, that's our BCMA CD3 bispecific, high-affinity bivalent interaction with BCMA, univalent low interaction to CD3. It seems to create a very nice balance and a nice half-life. So what does that mean? High efficacy, strong safety, mostly what we've observed now, what we showed at ASH, was CRS is in the grade one range and single-digit grade two, nothing three or beyond. That enables potentially outpatient dosing rather than the need for multiple hospitalizations, and the potential for no need for a step-up dosing, which that means you can start treating these patients very quickly and get them controlled because patients with myeloma can progress like that, so you want to get a handle on it.
So that creates a very nice profile that our experts are very excited about. Outpatient dosing once a month is a very nice profile, potentially best in class. We'll be moving rapidly into phase 3 monotherapy this year and multiple other dose optimization combinations with other lines of therapy to getting into earlier lines, second line, et cetera. So that's a very nice one. Rob also mentioned 400 as part of our cMet franchise. I will say telisotuzumab vedotin will talk to regulators this year. 400 has a higher DAR, has more warhead, it has topoisomerase. That lets us look at the same disease states like lung, but in particular, colorectal, which we see high unmet need. We've seen very strong data there in late lines, and we'll rapidly start developing that into earlier lines.
So those are a couple of big ones that I'd like to mention. Thank you.
Great. Well, appreciate the time, and thanks for joining us today.
Thanks.
Thank you very much.
Yeah. Thanks so much. Good to-