Okay, so, thank you and good morning. Thank you for coming. So we're delighted to have AbbVie at our 44th annual healthcare conference, and representing the company, we have a number of members of management: Rob Michael, who is president and CEO and COO and, of course, incoming CEO; Jeff Stewart, who's Executive Vice President and Chief Commercial Officer; and Roopal Thakkar, who is Senior Vice President, Chief Medical Officer of Global Therapeutics. Also here is Scott Reents, who is Executive Vice President and CFO. So thank you so much for making the journey. Lots to talk about at AbbVie. There's always great stuff going on. But let's start out with kind of a big picture, Rob, question, Rob. So as the incoming CEO, what should investors expect relative to changes at AbbVie, if any?
Well, Steve, as you know, I've been with AbbVie since our inception. So, you know, my goal is to make it as seamless as possible for investors. I've actually been part of developing this strategy, you know, running the business and building the culture. And so as I think about the transition, because I've been part of all of that, I would expect it to be as seamless as I can possibly make it. When I look at the business, we're in a very strong position to deliver on the high single-digit growth CAGR that we expect for this decade. So it's really about driving continued strong execution for AbbVie. And then, you know, we're very focused on developing the assets that will drive growth in the next decade. We're doing things like investing more in R&D internally.
You've seen us actually increase that investment over the last couple of years despite the fact that we've seen our earnings decline. We've actually put more behind R&D because we're very excited about the programs in our pipeline as we think about the drivers of growth in the next decade, but also continuing to invest in external innovation. You saw this, obviously, with ImmunoGen and Cerevel late last year. The focus now is really more on early-stage assets, smaller-sized deals that can help drive growth in the next decade, in really the five key growth areas we've talked about before: immunology, oncology, aesthetics, neuroscience, and eye care. And so, I would say expect more of the same. I think we've, we've performed exceptionally well. We've delivered top-tier performance since AbbVie's inception. We're known for our execution.
We're excited about the portfolio we have in place that we've assembled over the first 11 years. So really now it's really about focusing on developing assets that can drive growth in the next decade.
Okay. I should have mentioned this at the outset, but should you have a question anywhere along the line, just raise your hand. We'll repeat your question and get it answered. So, let's move to, we wanna talk about the growth products in the future, but let's talk about Humira as well because it's, of course, still a big part of your business. It certainly has been impressively resilient in 2023. What has the and it has surprised us. What has surprised you the most? And maybe, Jeff, this is the best question, or maybe your best answer.
You know, overall, it was fairly consistent with what we had thought. You know, we knew in 2023 that we had to think about two phases of the biosimilar launches, sort of the first phase where there was one major competitor, and then the second half of the year. I think we made some good decisions as we thought about that relative to our contracting with our payers because recall that being parity or on an equal footing with biosimilars was the goal. So, as you may remember, we had differential rates of concessions in the first half versus the second half. So I think that worked very well for us. I mean, that was a very predictable approach. I would have to say that, you know, as the year went on, we did see some more resiliency on volume.
But overall, I think, you know, we envisioned our strategy. We executed very well against it with the payer contracting. And so not too many surprises other than we did start to see some beats on the overall volume or our percent of continued capture rate for Humira as the year went on, Steve.
Okay. We're nearly a third, we're nearly through the first quarter of 2024. Are things progressing as the company had envisioned?
Yes. Things are right on track in terms of how we thought about this, second year of the biosimilar, the biosimilar competition. I would say that, you know, we see the volume and pricing playing out as we predicted again, which gives us some significant comfort. So first, we knew that there were certain segments of the market that would start to adopt biosimilars. We've seen that in managed Medicaid. We've seen some of that in the IDNs. We saw that last year with Kaiser. We're seeing it in certain segments of the templated business at CVS. So no, no surprises in terms of where we sit overall. While we will see some of that volume degradation, we still see the majority, the vast majority of the business will remain at a parity position with these biosimilars over the course of 2024.
I think it's an important year, and it's tracking as we expect. But if you think about it, it's the first full year with biosimilars on the market. We now have 10 biosimilars on the market. We now have an approved interchangeable for the most high-volume presentation of Humira. We're gonna go through another round of payer contracting next later this year. And so we'll start to understand as we go through this year, heading into next year, as we think about the longer-term tail, which I would say, we're gonna take this year to study it, understand those dynamics, and also then I think we'll be in a position in the 2025 timeframe to start to articulate what that looks like.
I wouldn't expect that tail to emerge until the 2020 timeframe, but I think in 2025, we'll have a better sense of what that looks like. I would say we're obviously very pleased with the amount of parity access that we were able to retain this year, which drove some of the upside that you're referring to. And so we saw, frankly, more volume retention than we expected, but it's played out, as we expected. We've been, I think, contracting well to maintain that parity access. We've obviously conceded price to deliver that. But I think what's important for investors to keep in mind is, you know, we should be in a position sometime next year to really articulate what that tail looks like. But I wouldn't expect that tail to really start to emerge until the 2026 timeframe.
And what are the factors that produce a tail in the first place? We investors have witnessed a lot of massive patent expirations, and yeah, there's always residual sales, but it just seems that Humira is gonna retain more than most. What are the factors that lead that to occur?
Well, I would say, you know, some of the factors are going to be what ultimately where the prices settle. And, you know, we can see, just like we saw in Europe, that the net prices were determined very quickly. I mean, we saw those by the middle of the year. So basically, the payers in the eastern and western countries, they see net prices of the low list price biosimilars, of which there's many, between 80% and 86%. So that gives you some sense of, you know, maybe where floor discounting may go. Okay. So that's one dynamic to think about.
I think the second thing that we're gonna watch over time is that we believe the biosimilar market, particularly in the pharmaceutically reimbursed place or pharmacy benefit space, will not act like a small molecule market where you see, you know, huge channel dynamics in terms of Orange Book automatic substitution because even though there's interchangeables, it'll be a little bit different, Steve. So what I mean by that is these are different pens. They have different caps. They have different loading mechanisms, right? So there's still gonna be a lot of education where something has basically changed for that individual patient or that specific doctor, despite the fact that it might have hit an interchangeable designation.
So when we look at that way, there's always gonna be, I think, some resistance in terms of where that volume may come out versus a small molecule, purely interchangeable orange book type AB-rated material. So those are several factors, to Rob's point, that we're gonna continue to study and understand as we move through 2024 and probably early 2025 to have a better analytical understanding of where that tail ends up.
I'm forgetting why this number is in my mind, but, if we assume the tail was gonna be $5 billion-ish, has the company ever said that, or is that something that,
We have not articulated it yet.
Okay. Okay.
Easy.
Seems like a good number, though. I mean, you had to come up with a number, or? Okay. Let's move on. We have so many things to talk about in terms of what's on the market now, but I would like to ask Roopal a question. We're also waiting the full pivotal phase II data for Telisotuzumab . What should we expect or what should we look at first when we see the presentation?
Sure. Well, I would say a lot of the key data we already have in front of us. Fuller data will be forthcoming this year at a congress and publication. But the key there is in those patients that are eGFR wild type that have elevations in c-Met. What we've observed in the high expression is a 35% ORR, which is, you know, a doubling or 3x of what we would see as chemotherapy being able to perform. And what we've also observed is what we initially saw was a six-month duration of response. And with the latest data cut, it's nine months. So 35% ORR, nine-month DOR. And when we look at median overall survival at that cut of data from last year, which we've already talked about. I think it was press released is a little over 14 months.
So taken together, we feel that there's an opportunity to take that package to the health authority, FDA, to discuss potential for accelerated approval. That'll those conversations will happen at the first half of this year. While that's happening, the phase III, that would be in a similar patient population against chemotherapy, is currently ongoing. It's been ongoing for some time, and it's enrolling nicely.
What should we think about the potential of this product if everything goes well?
Well, I think it's really exciting. If we're able to get this thing out the door, get it into patients' hands, we'll see it in the high potentially initially. The phase three is in high and intermediate. There's also potential, and I'll come back to it in a second with 400. But before I go there, there is potential when we look at patients in the mutant EGFR mutant population, commonly prescribed osimertinib. When those patients progress, there's a higher expression of c-Met. 50% of those patients that progress will have elevations in c-Met. And our early data has shown an ORR of 50% and very strong data consistent with the wild type. So that's the next step in potential and pot and also earlier lines of therapy. I mentioned 400 initially. That's our next-generation c-Met antibody.
It has a different warhead, which is a topoisomerase warhead, very stable linker, very nice drug properties. And that one has shown very strong efficacy in colorectal cancer. And we'll see data in lung and GEA middle of this year. At that time, we'll start looking at 400 and Teliso-V together and make some decisions if one or the other, potentially using in sequence because they're different warheads. There's been initial data that's been published in other tumor types that suggest you can do that. And then the other potential opportunity is actually combining them and having a chance in early lines of therapy to replace chemotherapy. So that's the work that's gonna be progressing. And in CRC, we will kick off a phase III study as monotherapy and third line plus.
And then next year, we'll look to see a combination therapy with 400 in CRC while we're waiting the other tumor types to read out.
Great. Questions from the audience? Let's talk about another pipeline drug, and that is, emraclidine.
Right.
Phase II data, pivotal phase II data we're awaiting in schizophrenia second half of this year. What should be our expectations for this data? So investors need to have expectations going into an event. Help us craft that expectation.
Yeah. Absolutely. So it's, I would say, it starts with the phase I-B data for emraclidine. And I just said phase I-B, but it was 80 patients. So it was a very large 1b, and it had placebo, and it had two different doses. And when we looked at that data, it performed as well as anything has ever performed in schizophrenia, looking at positive symptoms and negative symptoms. And that's what was one of the triggers that gave us confidence to look at this company and all their assets much more carefully, obviously leading up to the proposed transaction. Now, what would we look for in the phase II? Well, first of all, call it phase II, but each study is over 370 patients and is against placebo. So we see these two studies as pivotal.
The second piece, along with the efficacy that we saw in phase I-B, we would like to see something similar, recognizing the efficacy was very high in I-B. When you look across studies, when there's movement from proof of concept data to phase III data, you do see a step down 10%, 15%, maybe a little bit more. Even if you do see that, it is still among the highest efficacy that we've seen comparing favorably with the large atypical class that's been entrenched for decades. That's the efficacy side of it. Really, what's key here is the safety aspect. When we look at how these patients are treated today, the tolerability is very challenging. The compliance is very challenging, especially if you consider if they would ever get a therapy more than once a day.
There's a strong metabolic effect, weight gain, movement disorders, sedation with other competitors, anticholinergic effects, especially in the gastrointestinal side of things. So when we're looking for the emraclidine data, as we saw in phase I-B and blinded data, we're seeing very low level of adverse events that would be consistent with how the current market treats these patients today. And then the convenience, I think, is a key aspect of this. Once a day, no requirement for another asset to deal with adverse events. And then in the future or not the future, but present. The future will see it, but the work simplified for a long-acting injectable because it's a singular asset with very strong tolerability. Usually, physicians will wanna see how they do on an oral. And if the patient tolerates it well, then you convert them to a longer-acting.
If they're not tolerating, you're not gonna give them something with a very long half-life. So I would say those are the key facets of emraclidine that have us excited and something that hopefully we'll be able to show here at the end of the year, by the end of the year.
We're obviously very excited about the Cerevel transaction. I mean, clearly, emraclidine extends our presence in psychiatry beyond Vraylar. We also have a very interesting opportunity. I think 932 would be another compound I would certainly pay some attention to as we think about our psychiatry franchise, but also the core antagonist that Cerevel has, the opportunity there on major depression, tavapadon. As you think about our own Parkinson's franchise, we're very excited about Vyalev and Produodopa in the European markets in Israel. You know, that's what we previously talked about as 951 has a, you know, certainly can continue to drive strong growth in Parkinson's. So as I think about how Cerevel fits with AbbVie and really helping us drive that long-term growth in neuroscience, I think it was a very nice transaction for us.
Great. We'll come back to the pipeline, but let's move back to some of the current growth drivers. Maybe we'll start with Skyrizi. In 2024, what indications are gonna be the primary drivers of growth, and, and what, on the other end, will be those that grow less robustly?
Yeah. If you look at Skyrizi and our guidance this year, we expect to grow about $2.7 billion, really very robust growth. A billion seven of that is in psoriatic. We're seeing extremely strong NRx share, still around 50%. Our TRx share is in the mid-30s. You can see there's a lot of headroom for growth continuing in psoriatic. That would be, I think, approximately 25% growth rates, so pretty robust. But IBD, we expect about $1 billion of growth. That's 100%. That's a doubling of sales. We're just seeing, especially since we revealed the head-to-head data of SEQUENCE versus Stelara, we've seen an inflection in NRx share. I think NRx share is around 22% now. It's in the TRx share mid-single digit. So tremendous growth in Crohn's. And then we anticipate the UC approval in the middle of this year.
As we look at that, that overall portfolio for Skyrizi between psoriatic and IBD, we obviously increased our, our long-term, guidance expectations for that on the Q4 call, but we're seeing very nice performance from the asset.
The UC data didn't look as competitive as we would have liked, given the fact that the maintenance data in biologically experienced patients seem less than that of your competitors. Why is that not the right conclusion?
Yeah. I can talk about that. Let me go back to Crohn's just for a moment and lead up to a more complete response. In Crohn's, we saw very, very strong efficacy. You could be challenged by comparing that data to another trial because one thing that we see in Crohn's is the so-called control arm or placebo arm was still pretty high in the maintenance data. I want you to hold onto that thought. The reason for that is when you do these certain types of trials in IBD, everyone gets induction therapy. So, I mean, all the patients got Skyrizi, and then two groups continued Skyrizi with the two doses, and the other group stopped, but they already had Skyrizi on board.
And what we observed was it took 30 or 40 weeks or so for the withdrawal patients to actually start to settle down, okay? And what we're observing is something very similar in the ulcerative colitis data, where Skyrizi is so powerful that it's maintaining the placebo patients way out to week 52. Now, how do you put this into context? Well, you look at the head-to-head data of Crohn's against ustekinumab. That way, cross-trial comparisons are unnecessary. And when we did that, you saw either a doubling of 50% of all our efficacy endpoints, which is actually a very dramatic difference in efficacy against a very strong competitor. So you have that setup.
So now when we go to ulcerative colitis and we look at a setting where context is more simple, which I would say is the bio-naïve context, you look at the induction data, and it beats any competitor to date. And another competitor in the 23 space has now failed their Crohn's data head-to-head. And when we look at that one in UC and the naïve data, you see very high efficacy and extremely high efficacy in the maintenance data. Now, back to the Bio-IR. What happened there was we studied in the UC study probably the toughest-to-treat population ever in a phase III program in ulcerative colitis. 75% of the patients in the maintenance study had seen a previous biologic or advanced therapy like a JAK inhibitor. In fact, we had no cap on the number of biologics.
As you sequence through biologics or a JAK inhibitor, your efficacy continues to step down. More than a third of the patients had been on three or more biologics or JAK inhibitors. The 360 arm had 15% of patients that had already been on a JAK inhibitor. We had the highest levels of extensive disease or pancolitis ever studied in a phase three. What that does is puts a little bit of pressure on the top-line data. Because Skyrizi is so strong, it brings up the control a little bit. If you look at in total, it is still very strong efficacy. When a clinician will use it, like they do with Crohn's, very often, they'll see the very strong efficacy that we're talking about here. Jeff.
Steve talked from a commercial perspective. It's very, very attractive because, as Roopal highlighted, the naïve data is absolutely spectacular for UC. So the way that we come at the market, particularly given the sequencing that we have to do for Rinvoq, is our representatives will be able to highlight really best-in-class efficacy for UC, which is clearly in the data. And then, of course, you can sequence in Rinvoq over time. So you have a very nice sort of commercial ability to manage the portfolio, to maximize both share between Skyrizi and Rinvoq. So that's how we plan to communicate this nice data for UC.
Questions from the audience? Okay. Let's move to another important growth driver, that being Rinvoq. So you're doing this head-to-head LEVEL UP study of Dupixent plus Rinvoq, sequential therapy versus Rinvoq alone in second-line AD. What is a win? How would you define a big win for AbbVie out of this trial?
Yeah. So, let me just talk briefly about the design. So this will be a head-to-head with Dupixent, and we will start with the labeled, initiation dose, which is 15 milligrams. And then, within the trial, they'll be able to use it like they do, clinically, which is starting at 15 and then being able to titrate up. So that's the design of the study, and that will come after a systemic therapy. So head-to-head with Dupixent. Now, what are we looking for? We've designed this in a way so we can see skin clearance - this is the EASI score - and in particular, itch, getting down to, itch score in 0-1 range. Now, these endpoints will be shown, separately and together, and we will see high levels of achievement.
So consistent with what we've observed with psoriasis over the years, we're initially talking about passing 50 and 75, then 90, then 100, raising the bar on those standards. What we, anticipate delivering with this data set is raising the bar on the standard of care of what can be achieved in atopic derm, becoming more consistent with what can be achieved with psoriasis. So that's one key driver, in itch in particular. The other aspect is we'll have endpoints at week two and week four so we can show the rapid onset, which for many patients is within a day or two, they're telling us now they can finally sleep at night because they don't have, the itch along with the skin clearance. So those data sets is what will be read out.
Because it'll be on label, once the data are available, we'll be able to more robustly speak about that to prescribers.
And Level Up is a very important study commercially because we've never been able to, really uniquely to the United States, really frame the perspective of the performance of Dupixent versus Rinvoq. So, for example, if you think of our capture rate, so the capture rate in the United States is roughly in the high teens, 17%-18%. So we're a sort of a deep second to Dupixent, which still has the majority of that. If you look in the international markets where we've been able to highlight the original head-to-head trial, our capture rate is in the 20s, 30s, in some cases, the 40s.
Having a study that's uniquely tailored to what the U.S. label looks like and the way that you have to rotate through the doses, start with the 15, higher endpoints, we think it's gonna be very important to expand our capture rate in the U.S., which, while it's not bad, it lags other parts of the world.
Questions from the audience? Yes?
We have one question about the potential safety profile in the head-to-head study. What's our expectation? How will we communicate to the community?
So the question is about the safety profile in the head-to-head study. What should be our expectation, and how will that be communicated?
Yeah. So in all the original atopic dermatitis data, the safety profile has been very strong. So it's given as a monotherapy. It's not combined with a methotrexate, say, if you're referencing the rheumatology outcomes with tofacitinib. These patients are not in their 60s. They're quite young. And what we've observed is a very nice tolerability and a very favorable safety profile. So we expect to see that be consistent with the original phase III data.
probability that ultimately the label warning is removed from Rinvoq is what? What is that probability?
Well, Rinvoq, along with many other biologics in the class, will have a boxed warning due to, you know, potential infection risks and future malignancies.
That was referring to cardiovascular safety.
Oh, cardiovascular safety. Well, I don't have an outcome study. We were never required to do one. So you won't be able to reverse it there because that data that's in our label is driven by tofacitinib. So unless something changes there, the agency would then shift it there. That being said, I would say since a few years, post-launch, clinicians are becoming more and more comfortable. And the reason for that is, and what we're told, is they're not seeing the adverse events that are in the box warning, whether they're cardiovascular or thromboembolic. They're not seeing that. So if they're not seeing that, they have more confidence in using it. And plus, they're seeing very high benefit and efficacy, in particular in inflammatory bowel disease, where, similar to atopic dermatitis, the patients are substantially younger than they are in rheumatoid arthritis.
It's utilized in general as a monotherapy. Efficacy in Crohn's and ulcerative colitis, like what we see with Rinvoq, whether it's in naïve populations and jurisdictions where that's on label or in biologic-experienced, is the highest that's ever been achieved. There is a lot of uptake, and it continues to grow very strongly, I would say.
And just to add to Roopal's point, I think it's important, which is while it's very unlikely that you're gonna see a change of the sequencing or, you know, the loss of front line that happened with ORAL Surveillance in the JAK class, we've basically pivoted the positioning into second-line plus. And in every single indication now, you know, as the end of last year, whether it's atopic dermatitis, I mentioned Crohn's, UC, every single rheumatology indication, we are now at Rinvoq, the leading second-line plus product there. So we've done very, very well. And the second and third line are now bigger than many of the front-line indications as more and more innovation is coming to the market. And so it's quite attractive. And that's what's really driven, you know, we grew Rinvoq almost by 60% last year.
We're able to continue to have a very, very strong engine here despite that loss of the front-line access in some of those indications.
I'd say despite the label change, I think I think we managed that very well. Obviously, we did take up our long-term guidance for Rinvoq. We, we didn't have that in our original guidance. I think Jeff and his team have done a remarkable job. If you think about the power of having both Skyrizi and Rinvoq, we've been able to make those adjustments in the U.S. market and continue to grow the business.
We're actually out of time, but please allow me three more questions. So we'll keep this short. So, Botox, not an infrequent investor question, is about these long-acting competitors. AbbVie has said from time to time that it's working on long-acting. It's working on short-acting. Apologies if I missed it, but I don't remember ever seeing anything from the company on those programs. So what's going on with those?
Kimmy, can I mention real briefly?
Yeah.
So, on the long-acting, there is quite a bit of work on the formulation side. But that is like the long-acting. It is a longer-term strategy, but that's ongoing. However, what a need really appears to be, maybe more so in aesthetics than a long-acting - 'cause we've seen how that's played out - is a short-acting. And the reason for that is there's many patients, individuals on the sidelines that aren't sure they wanna start using it 'cause they're afraid of an unnatural outcome. And once they get it, it's hard to reverse it. So you have that maybe for two, three, four months. What BoNT/E allows is someone to dip their toe in to decide if they like that outcome or even use it for an event. You got a high school reunion or something coming up, you can use it. Now, how does that work?
It's injected, and within hours, within hours, you see the onset of efficacy. It peaks at day seven to the same level that we've seen Botox and then degrades off quickly over the next week or 2 weeks. Now, that data has been shared, and we are in the midst of that, assembling that application and finishing off the CMC work. That submission will actually go in this year. That will be in people's hands to access the number of patients that don't wanna try it yet because once they do, they like it, and then Botox is there for them.
Okay. That seems like it's progressed. I missed that. That's great. Very, very briefly, Vraylar phase III autism spectrum disorder data coming. What do you want our expectations to be?
So what I'd like you to think about is that one is a, a very small indication in pediatrics, and it's specifically on the irritability side of it, consistent with other approvals. So it's a very small sort of niche indication. But I think what, what we'd like folks to think about is the very strong data we see in full-spectrum bipolar and in adjunctive MDD in the growth we're gonna continue to see there, and the 932 data, which we're gonna start generating this year, which is a follow-on to Vraylar, which will lean the molecule more, more towards the D3 receptor than D2. We'll be kicking off studies in bipolar, and generalized anxiety disorder, which we currently don't access today with Vraylar. And that will allow us to also potentially move into unipolar depression, maybe even as a monotherapy. But that those phase IIs will start this year.
Last question for Rob. You know what investors think the future of AbbVie is. You can see it. We publish it and so forth. What are we missing? What, what, what's gonna be better than expected? Is it the current products? They've become bigger. Is it the pipeline? It's going to blossom, and we don't see it? Is it that Humira tail? What is it that we aren't seeing?
Yeah. I would have told you six months ago, I'd say a big driver was the growth platform. And we took up our guidance that we've seen as the street move up, which is nice. There's more belief now in the high single digits. So I think we're, we've gotten a lot closer there. So I think what's remaining is more credit for the pipeline. And you will see as more data emerges, you know, we do get some level of criticism around internal R&D. But I would point to the ability to return to growth very quickly, one year after the LOE was driven by our own internal Rinvoq asset as well as the work we did on Skyrizi. A lot of excitement. We didn't get a chance to talk about the BCMAx CD3 bispecific 383. That's got tremendous potential.
400 has tremendous potential. So I would say what, what will emerge from the pipeline, I think, will surprise to the upside.
Great. Sounds exciting. Thank you so much. Thank you to the audience for participating.