With me on stage is CEO Rob Michael, currently President and COO, I guess, but soon to be.
Right. Soon to be, yep.
Jeff Stewart, Chief Commercial Officer, and Roopal Thakkar, who's Senior VP, Chief Medical Officer, Global Therapeutics. So guys, welcome.
Thanks for having us, Jeff.
Thank you. Thank you.
I guess let's kick it off with the most, you know, topical. So in the, you know, I&I space, with the, you know, HUMIRA erosion, you know, you guys have given guidance. You've laid the stage, and I'm sure in the next 12 months you'll be thrilled to not have a question on this.
The growth platform is 80% of our business and growing mid-teen, so we do look forward to talking about the growth platform.
Right. Because you're.
We understand we're still getting questions on HUMIRA.
Exactly. But I want to ask you, though, about the outlook for SKYRIZI and RINVOQ in the context of sort of I&I, you know, kind of disruption this year, and then obviously that sort of ends, you know, in the next several years, and you're back to sort of stable growth, you know, organic and even beyond I&I.
Yeah. I think if you look at the business overall, I mean, we're very pleased with the performance of the growth platform. I mean, this year alone, you're talking about $5.6 billion of growth, you saw in the first quarter, mid-teens growth delivery from the ex-HUMIRA platform, and that's the fundamental strategy to really drive that long-term growth outlook. We do expect to return a robust growth next year. We've said, you know, think of that in terms of above industry average, so above single digits, which is industry average, but then accelerating the years beyond, ultimately delivering, a high single-digit compound growth in this decade. And so you look at the performance of SKYRIZI and RINVOQ, they've been exceptional. We've had, obviously the, the broad indication footprint, really, really nice, share capture. We look at dynamic share. You look at TRX share.
There's still a lot of headroom for growth. The IBD indications for SKYRIZI and RINVOQ are performing exceptionally well. We're seeing continued momentum. It helps to have 10 head-to-heads between SKYRIZI and RINVOQ that demonstrate the differentiation that we truly believe in. You're seeing that market adoption. You saw for SKYRIZI the head-to-head against the STELARA, and the impact on just immediately saw the in-play share capture, the inflection there, really strong performance. And then, you know, as we think about as we navigate this period with the HUMIRA US biosimilar entry last year, we've now had five quarters with that entry, and we've essentially called it, you know, either right on or we've beaten it most quarters. And so we have a pretty good handle. I'd say the event that many investors are focused on with CVS, we anticipated. We knew that was changing.
We knew that exclusion was happening on April 1st. That was baked into our guidance. You saw us on the first quarter call. We took up our overall revenue guidance by $800 million, didn't change HUMIRA, because we anticipated that. So we can certainly get into more detail on that, but that was fully expected. You know, HUMIRA last year declined about $6.5 billion. This year, based on our guidance, we're about $4.5 billion. You know, we're managing through that, and despite that erosion, we've still now returned to growth. We're actually going to deliver growth one year after the US HUMIRA LOE event, and no one in our industry has been able to deliver that. And that's on the back of very strong performance from the growth platform. And so we're very excited about that. We're very excited about the future of the pipeline.
We have exciting programs in oncology with 383, our BCMA bispecific, CD3 bispecific, and myeloma, 400, our ADC, using the Topo I warhead. And then obviously with ImmunoGen, ELAHERE is off to a very strong start. There's a very exciting ADC pipeline there. You know, clearly with Cerevel, the addition of emraclidine to tavapadon, their core antagonist, gives us depth in the neuroscience pipeline. So as we look at the business today, we're very confident in our ability to drive that growth, and our focus really is how do we drive growth in the next decade, and that's largely how we're thinking about BD. But SKYRIZI and RINVOQ are performing exceptionally well, and, you know, we went through this event with HUMIRA last year, and you did not see significant price concessions on SKYRIZI and RINVOQ in this year.
And so it gives you a sense of just how robust those therapies are performing.
Yeah. Let's stay on that. So when you think about 2025 and beyond, as you know, invest in new indications and you grow the current indications, what would you say are sort of the next wave of indications to come?
Sure. So we'll have with SKYRIZI, we anticipate the UC approval in the middle of this year, and we expect that to drive another inflection in terms of the shape of the growth trajectory for SKYRIZI. And that will certainly round out then you think about the SKYRIZI indications. But then for RINVOQ, we have another wave of indications coming, I think in terms of the 2026, 2027, 2028 time frame, covering vitiligo, HS, alopecia, lupus, and GCA. Those collectively will add $a few billion in peak revenue for RINVOQ. And so you'll see another inflection in growth for RINVOQ with those additional indications. And we would expect SKYRIZI and RINVOQ to grow very robustly through the early part of the next decade, think until 2033. We expect very robust growth.
We upped our guidance for 2027 to greater than $27 billion for these two assets, and we would expect that growth to continue to be robust beyond those years. And so, we will have, again, the indication expansion for SKYRIZI, but also the next wave of indication for RINVOQ will certainly help that long-term outlook.
Right. And I know you guys haven't given specifics on it, but I just wanted at a high level get your perspective, Rob, on maybe the Part D benefit changes to come.
Sure. Yeah. So we've, we've talked about that actually now twice on the fourth quarter call and the first quarter call. And the reason we wanted to highlight it is because it was very clear as we were having conversations with investors that it didn't seem like it was fully understood the, the implication of the Part D benefit redesign for 2025. Now that said, while it will have an impact, I'll talk you through what that impact looks like. Design with a high out-of-pocket burden, you will see lower prescription abandonment rates, but that represents probably a third of the population. The other two-thirds either are, you know, LIS eligible, and therefore they don't have the out-of-pocket burden, or they're in the standard benefit design, but they have low out-of-pocket burden.
So for one-third of the patients, there'll be a volume offset, but that's why it's not, you know, it doesn't offset the higher cost share. That cost share will impact immunology, oncology, and VRAYLAR next year. I've said think of it in terms of being worth several points of growth next year, but even with that growth, that impacted growth included, we're still going to deliver robust growth, think, you know, above industry average, above high single digits. So we've already baked that in. And then when you get in the years beyond, you know, a lot of investors focus on, negotiation impact, and we obviously IMBRUVICA has been selected. But one thing to keep in mind is when a product is selected for negotiation and no longer has that cost share liability and the Part D benefit redesign, so there's a natural offset.
The other thing to highlight is HUMIRA is part of that impact next year on the Part D benefit redesign, and HUMIRA will be declining. And so we don't have another step function in terms of IRA beyond 2025. So when you think about the company, we will not have any major LOEs the rest of this decade. We'll essentially have that Part D benefit redesign, but no additional significant impact beyond. And so we're in a position now with that growth platform to deliver very, very strong growth, which ultimately allows us to deliver a high single-digit compound growth in this decade, inclusive of the impact of IRA.
Right. And you mentioned it, but the head-to-head, you know, against Stelara with the Stelara LOE, though, I imagine that over time has become less of a worry for you had to have an indirect impact on your growth portfolio.
Let Jeff cover that. Yeah. I think that's, that's very, very accurate. I mean, this, this head-to-head trial, which was our ninth, I would say was probably the most substantial investment that we made. And when you looked at the results, it's, it's very significant. I mean, particularly so you have double the impact versus STELARA, really high-dose STELARA on healing of the bowel, and that data has really made all of the global gastroenterologists really stand up pretty hard and say, "This is, this is practice-changing data." And not only do we hear that from the podium, I mean, we see it in our data. To, to Rob's point, SKYRIZI around the world was performing extremely well before that data was released, and since that data was released, the acceleration of our share capture, largely at the expense of STELARA, is very, very clear.
So the way we see over time, you know, when you see that level of differentiation, it's certainly going to mitigate to a large degree the impact of the STELARA biosimilar. And so that again, that clinical investment, among the others, is really going to help us continue to have just significant momentum, not just in IBD, but across SKYRIZI and RINVOQ as the years go by.
Right. Makes sense. Well, let's switch gears to oncology. So, bringing an ADC platform in-house, maybe talk about, you know, how post the closing of the deal kind of does that shift your thinking? Do you as you sort of look under the hood, do you want to add more to the ELAHERE program? Do you want to expand, you know, more broadly into ADCs? And many of your peers obviously are heavily investing in ADCs, and that should continue.
Sure. Yeah. I think that's organically happening along with having ELAHERE now. In addition to the treatment where we have ELAHERE today, we have an ability to double that penetration into the sensitive population from resistant and potentially medium and going into earlier lines of maintenance. That being said, to get into potentially lower levels of expression or endometrial cancer or others, there's another backup asset, next-gen, that binds to two epitopes, may have greater internalization. As we think of ADCs, what's next-gen? That could be one that follows. That's in the clinic now, so that's already running.
That's ovarian cancer, which is the segment we're talking about is dominated by chemotherapy, and we can see a lot of opportunities there as we go on earlier and able to combine what we've noticed with this particular ADC in warhead, that it's able to combine at full dose with bevacizumab, which is very commonly used in ovarian cancer, and actually with carboplatin, which is used as induction. So that profile is starting to shape up nicely as we think about ADCs. Then if you look at our where we were at in colon cancer, we'll be entering phase III today to this year with ABBV-400, which is our follow-on to Teliso-V. So we're taking the c-Met antibody but binding, putting on a topoisomerase warhead.
Now that warhead is AbbVie's, and that's available even to go to ELAHERE or to the next-gen ELAHERE as well. What we're seeing in colon cancer that we didn't see with Teliso-V is greater depth of response. So we're seeing high levels of response in a very refractory patient population, and we're going to enter into the phase III of that segment this year. You take ovarian, which has high unmet need. Colon cancer is very similar. It's dominated by chemo, but a much larger patient population, with very low five-year survival rates. Then if I think about what's even bigger than that, it's lung cancer.
We have Teliso-V now in later lines of therapy in c-Met, intermediate to high expression in phase III, but we see ABBV-400 to have that opportunity to expand into lung cancer further into earlier lines of therapy in EGFR wild type and, in fact, potentially mutant in combination with osimertinib. So that ability could really expand our participation in that ADC market because the other thing you want with these ADCs, especially for next-gen, is that ability to combine with other therapies in a tolerable way so you're not getting the same chemo-like adverse events that you do with chemo. So you want to really replace chemo. So we're starting to see that play out in ovarian, lung and colon.
And then for ABBV-400, later this year, we'll see that data from lung to see exactly where we can take them, but we anticipate better efficacy than when we've seen with Teliso-V.
For sure. It sounds like ADCs are much more foundational and.
Yeah.
Going to get a lot of capital in terms of R&D dollars, you know, going forward.
Yeah.
So the maintenance ovarian is probably the bigger of the opportunities when you guys look at your kind of long-term guidance with the platinum-sensitive?
I think we've talked about in platinum-resistant, and then you have a doubling in platinum-sensitive, and then you have another doubling in sort of in the medium population. You know, there is obviously an opportunity there as well in maintenance, but that's the way we've characterized it. As you think about the expansion as being a multi-billion-dollar peak sales opportunity, you'll, that's the way we're thinking about the expansion potential for ELAHERE.
Then from a promotion perspective, have you redeployed some folks from, say, the IMBRUVICA or the hem/onc into ELAHERE, or was that sort of a natural kind of transition?
No. So the way that we're looking at that since we've closed the deal, I mean, the ELAHERE team has done a really, really beautiful job. I mean, if you look at timeline sales, it's the most rapidly growing ADC that's been launched to date. And this goes back to Roopal's standpoint, which is you kind of got a chemo-only,
Yep.
Competitively open space. So they've done a super job with, you know, calling on the core physicians, educating around the FR- alpha. So as we look going forward, and similar to what we did when we closed the Allergan deal, which is we can bring a lot of resource. Now we're not planning on, you know, shifting from IMBRUVICA or VENCLEXTA, which mostly call on the hematologists, but basically to supplement where we can go deeper into the call plan, so sort of, you know, deeper into the, of the clinical oncologists, which we think is going to get us more momentum, probably more education around the FR- alpha, in terms of particularly to women that are diagnosed through digital channels, etc.
We have plans in place to continue to invest on the commercial side into that footprint, which has been a great early launch footprint, but we're going to be able to do more to continue to fuel that as those indications start to gate in.
I mean, ImmunoGen really gave us an opportunity to have an early entry in a solid tumor. So we obviously have, as Roopal mentioned, our own programs. Think about, you know, ABBV-400. So we were investing in ADCs, but with them having a commercial footprint, an on-market asset that was ramping very nicely, it just gave us that early entry. And so we've brought that now that solid tumor commercial infrastructure in to complement our hematology footprint. And so that we saw it as an acceleration of that investment.
Gotcha. Makes sense. Let's switch gears to neuro. And so, you know, any updated thoughts? I know with the Cerevel data coming and, you know, there's a lot going on in the competitive landscape. Any updated thoughts on how you think that could play out?
The data that's been read out was in Parkinson's with the tavapadon, and we saw nice strong data there as an adjunct to levodopa/carbidopa. These are patients where they're still trying to optimize oral therapy, and you can add this on. It has a 24-hour half-life, so it can smooth some of these adverse effects they're suffering from from Parkinson's, and we saw an extra hour of on time. So that the next phase II studies, phase III studies, sorry, we'll read out the rest of this over the course of this year. And those are actually even in earlier lines of therapy against placebo. So once we have that, then obviously we'll go through a submission process, and it fits nicely in non-overlapping way with VYALEV or ABBV-951, which is already launched ex-US, and we anticipate approvals this year, this summer.
And then you can have the two, the patients who are trying to optimize oral therapy and then the ones that can't anymore that are truly advanced that aren't ready for a surgery, but now you come in with a subcutaneous option, which the uptake, globally, has been quite strong.
Right.
Yeah. And to add to Roopal's commentary just to make sure it's clear, you know, we don't see any overlap with tavapadon. I think, you know, addressing the early part of Parkinson's disease, whereas, you know, VYALEV or 951 and DUOPA, you know, address the later side. So they don't, there's really no overlap. They're very complementary, but it really gives us a nice round out of the Parkinson's franchise.
Yeah. Well, investors also, you know, vis-à-vis KarXT, kind of look at this as a zero-sum game, and I think it doesn't play out that way typically commercially, right? I mean, both, you know, both parties can typically.
Oh, I think the muscarinics absolutely can take, you know, quite a bit of share of the overall market. But I would say, and I think, you know, Roopal, you should highlight this. I mean, I think we feel very good about the profile of Emra relative to KarXT, although I don't see it as a zero-sum game, but I like our competitive profile.
Yeah. From an adverse event perspective, we only have the one agent. We don't have a cholinergic and an anti-cholinergic.
Yep.
Mismatch. It's also—it's so—it's once a day. That's also a nice benefit for patients with schizophrenia. They don't want to take it twice a day. We don't have a food effect, where it appears that agent has a significant food effect. So twice a day, you have to plan your meals around that. Could be quite challenging. Then you have gastrointestinal adverse events due to the anti-cholinergic, cholinergic competition, which we don't see that happening. Then potential for, maybe a smoother potential if you have better tolerability to convert a patient that's on an oral to a long-acting injectable. From a CMC standpoint, we only have to worry about one, one agent, one molecular entity to convert that to LAI. So we see that as a very nice.
Yeah.
Nice profile that's emerging.
But Jeff, to your point, I mean, it isn't a zero-sum game. I mean, having multiple, multiple new mechanisms in the Muscarinic class, you know, will help with the overall adoption.
Mm-hmm.
With these agents. There's no question about that. You know, depending on what research you look at, you know, it's on the low end that it's 30% or 40% of the total antipsychotic market and probably even higher. So having multiple players, multiple investment, education over these things is net-net going to be a very, I think, very positive for patients. And we feel, as Roopal said, pretty confident in our profile.
Right.
As we come in, you know, second.
You would totally expect, you know, naturally step edits to happen in the class initially. But I think over time, though, better, you know, better clinical profile for muscarinics, I think, is going to ultimately lead to much better, longer duration of use, I would say.
It's a great question. I mean, you know, typically, I mean, you do get step edits with the older generics, although the promise of these agents is so different that I think what will happen naturally is if there are step edits early, patients will cycle through super fast because they're so poorly tolerated. And to your point.
Yeah.
I think in many territories around the world, it's given the profile, it would be difficult for payers, given the pressure from advocacy and the clinicians, to really stand in front of agents that looked like what we see with, with Emra, for example.
Right.
But it'll take a little bit of time to mature. But, that's how we see the payer landscape play out, which is similar to what you highlighted.
VRAYLAR is also, you know, growing, very nicely. Maybe just in the next several years, what would you say is the one, is the bigger driver there? Is it just, you know, market expansion? Do we have geographic expansion? Just give us some perspective on that.
Yeah. It's, it's largely share. So if we take a look at the two big indications are, are growing about the same pace. So we have the, the bipolar disorder.
Yep.
We have the adjunctive MDD, what we highlighted before, schizophrenia. We, we don't promote it, and it's, it's not a real player based on the profile. So it's the two these two big indications. As we watch basically the ramp and our, our in-play capture, the large driver of value is going to be ongoing share capture. The market's so big that even small changes in share, you know, deliver a lot of value.
Yeah.
We do so have some geographic expansion, but it's pretty nominal. So it's a U.S. story around the ability for us to move those two big indications. What is encouraging when we go talk to the psychiatrists and the big prescribers, we can see in the most recent market research that we have the highest perceived value in the bipolar segment and very, very close to the top, tied for number one in the adjunctive MDD segment. So we've got a very nice product there that we can gain a lot of share.
Right. Let's switch gears to, to BOTOX. So where would you say that we are in the kind of the economic cycle? I know it's been, it's been flattish. It's been up and down the past couple quarters, but it feels like we're maybe coming at the end of, you know, kind of this,
Yeah.
Perhaps under economic uncertainty, and maybe there you'll expect to see a little bit more growth there.
So, if you've, you know, on the U.S. toxin market, we saw it really return, the market returned to growth in the third quarter last year.
Yep.
We saw that continue in the fourth quarter. We saw again the first quarter, you know, think in, like, terms of mid-single-digit market growth. So we are seeing a recovery there. We've actually given you know, if you look at the guidance we've given for the aesthetics business this year, it's high single-digit growth. So we'd say.
Yep.
You know, we've returned to growth. The U.S., we're seeing this sequential improvement. Even fillers were somewhat, I think, the market was essentially flat.
Right.
It tends to lag, you know, somewhere around two quarters of toxins, but we're seeing, you know, nice recovery there in the overall market. But what's really encouraging is the share performance. There was a lot of questions around the impact of DAXXIFY, what that meant for.
Yep.
For BOTOX Cosmetic. We've held our share, throughout that entire, launch. And so it's, you know, it's been pretty resilient. And then we've actually seen with JUVÉDERM, the JUVÉDERM family, we've seen actually share increase as we've had the launches of JUVÉDERM VOLUX and SKINVIVE. We've seen a nice improvement in share. And so when I look at the fundamentals of the aesthetics business, they're very strong. We had a dynamic in the first quarter with shifting promotions, and that I think what you're referring to is probably as you look at the revenue, looking at something that's, you know, flattish, but if you kind of if you kind of adjust for the share performance, the market performance, and, you know, back out that, you know, it was essentially an inventory change in the quarter.
Right.
It's performing in line with our expectations, and we're still very confident in being able to deliver on the outlook this year and ultimately delivering on the longer-term outlook of greater than $9 billion by 2029.
What would you say from a long-term kind of growth perspective? Would you say, I mean, is this mid- to high-single-digit,
You would, yeah. What you'd have to believe to get to this is the business, the aesthetics business, will have to grow high single digits. Now, if you look historically, these markets have grown mid-teens, right?
Yep.
So you don't necessarily need that type of growth. The other area I'd point to is, I mean, innovation's going to play a role. I mean, we have, in some cases, additional indications for BOTOX like platysma and masseter, which each add $200 million. But we're very excited about the short-acting BoNT/E, that you know, fast onset, fast offset, short-acting toxin that we think can really drive an inflection in the market, growth. I mean, this is a market that has very low penetration rates. And one of the biggest barriers is fear of an unnatural look. And so if you have an offering in which you now can present an opportunity for a consumer to try BOTOX with less risk, and then they like the result, they're coming back, and they're going to want BOTOX.
And so you could see a very nice inflection in market growth as well as more share capture. And so we're very excited about the opportunity there. We also would say our programs around regenerative fillers, biostimulatory fillers can also drive that innovation can drive growth on the filler side of the business. So those are things that we're looking at that will ultimately help us drive that high single digit, you know, average growth expectation to get to that $9 billion.
Makes sense. Yeah. And then next couple, and final few minutes, let's talk a little bit about, you know, BD. So you guys did some, you know, a few deals. I know, the focus is mostly on, on sort of delevering, but, what's the in the near term, but, you know, where do you see of all the therapeutic areas that you guys are in, where do you see the biggest opportunities? And maybe give us some, some context on kind of size or scale from here.
Sure. Sure. I mean, if given our current portfolio can deliver that high single-digit compound growth in this decade, our BD priorities are really around identifying assets that can drive growth in the next decade. And that's large, if you think about Cerevel and ImmunoGen, both fit that profile, and they gave us further depth in our ADC pipeline with ImmunoGen and further depth in neuroscience with Cerevel. At the same time, over the last year and a half, we've been actively investing in, I'd say, early-stage, smaller-sized opportunities to really deepen our core. And that's really what I'm looking for is, you know, how do we continue to deepen our core as we think about driving growth in the next decade, given that we have good line of sight for this decade? And so we've done a number of deals.
If you look at a number of mechanisms in immunology that are very interesting that can certainly contribute to that long-term growth outlook. The Umoja in situ CAR-T opportunity is, we're very excited about that. We do think we think about oncology, multispecifics, you know, ADCs, in situ CAR-T. Those are areas where we're, we're, we're really doubling down in. And so that was a very attractive transaction. We recently announced the Gilgamesh collaboration, which is another approach to addressing mood and anxiety disorders, is a great example, to Tentarix, the multispecifics platform for immunology and oncology. So these are, you know, all, I'd say, you know, smaller-sized opportunities but very important as we really bolster our pipeline for that long-term growth. It isn't really because we're focusing on deleveraging.
We've committed to getting back to net leverage at 2x in a 2- to 3-year timeframe. We can generate enough cash to be able to do both. So it's not so much a balance sheet limitation why we're looking at smaller-sized deals. It's more about the portfolio status and the fact that we really want to invest for the long term now, given that we have such a strong portfolio for the short term. So that's strategically a choice we're making, not really constrained by the balance sheet. We can pursue. We have the financial wherewithal to pursue opportunities, but it's really more of a strategic focus on looking for more early-stage, long-term growth drivers.
What are the hurdles to adding a new therapeutic area, for example?
You know, I would, I'd never say never, but I mean, if you think about it, you know, we have good diversity now. We have a number of areas where we can go deeper in our core, and that's where we've really been focused is on those areas. If there's an adjacency or another pillar, as I think about the growth in the next decade that can, you know, that fits our profile, I would never say never, but it's not, I'd say, a high priority for our BD strategy. But we never rule it out if it makes sense, if it's something that we see differentiation. You can elevate standard of care. We can leverage our capabilities. We can get a good return on that investment. We wouldn't shy away from that.
There's plenty of opportunities in your core therapeutic areas.
There's plenty. And certainly focusing on building depth there is our focus.
Awesome. Thanks, guys.
Great. Thanks, Jeffrey.
Thank you, Jeff.