Good morning once again, and welcome to TD Cowen's 46th Annual Healthcare conference. We are absolutely delighted to have AbbVie back with us again this year. Representing the company, we have three members of management, Scott Reents, who's Executive Vice President and CFO, Jeff Stewart, who's the Executive Vice President and Chief Commercial Officer, and Roopal Thakkar, who is Executive Vice President, R&D, and CSO. Thank you for making the journey to be with us. Lots to talk about, the outlook for the company, the commercialized products today, as well as what's going on in R&D. We'd probably like to start there because it is quite likely the case that AbbVie simply doesn't get full credit for what has gone on on the labs and what's going on today and the growth potential that that could drive.
We do wanna spend some time on that. Why don't we start out there? This kinda gets to clinical trial conduct. This is more of a curiosity than anything of mine, but there's a number of big immunology companies in this industry, obviously. A couple have said that they're struggling in immunology trials to deal with this high placebo rate, and it's leading many trials to not be successful. We look at a company like AbbVie, and you're just chugging along, delivering positive results, and really not having that problem. We're just wondering, what is it that AbbVie is doing different than other companies that allows you to be successful when playing in the same markets?
Well, thank you for having us, Steve, here today. I'll talk about this in a couple different ways. One is we've been very fortunate, I would say over the last 20 years in immunology to have assets that drive very high levels of efficacy. One way to differentiate from placebo is to beat it by a lot. When you have assets like HUMIRA, years ago and now SKYRIZI and RINVOQ and some emerging assets, that is one helpful thing, and our focus has always been to differentiate from existing standard of care, eventually to restate standard of care. That's one point.
The second point, when you have so many assets, you run a number of studies, global studies, and one thing that we do very carefully is train sites on the endpoints of interest and carefully monitor that data real-time, rather than waiting for long periods where some may wait till 50% enrollment or even further before they do thoughtful monitoring. That's a component. The other two things I'll mention are patient selection and endpoint selection and the stringency of those endpoints. A couple real-time examples. Endpoint selection, we have a rheumatoid arthritis trial that just read out very important in RA as we see it because the field still today around 50% will recycle anti-TNF therapy. For example, if someone is taking etanercept, they're not doing well, they may go to HUMIRA.
We did a study to compare going on to HUMIRA or RINVOQ recently called the SELECT-SWITCH study, and the endpoint we used was a DAS remission endpoint, so it's very difficult to achieve. When we do an endpoint like this, we see a doubling of response with RINVOQ versus HUMIRA, which is, you know, has been for many years a gold standard in rheumatoid arthritis. Now we've doubled that, so that will contribute to our promotional materials and our approach in rheumatoid arthritis. That's one example. Just yesterday, I believe we put out our data for a subcutaneous induction trial for SKYRIZI in Crohn's disease.
We're currently approved with an IV induction, which shows very strong efficacy, and we just observed efficacy with subcutaneous that was even higher than the IV, particularly when you look at the objective endpoint of endoscopic response. That goes along the lines of endpoint selection. This one is independent of symptoms, independent of the clinician at the site, independent of the patient. These are assessed as a with a third party that doesn't know the patient or the timing of the endoscope. There we demonstrated, I think, almost a 45-point delta with 60% endoscopic response in a treatment-naive patient population. Both of those principles are being applied to hidradenitis suppurativa. I believe some of these companies may have a tough time dealing with placebo in HS.
It's a very dynamic disease, and it can relapse and remit, and if you catch someone in the wrong spot, they could have a high placebo response. Two things that we're doing there, I bring these up because they're gonna be important readouts, phase III readouts later this year for Lutikizumab, our anti-IL-1 alpha/beta molecule, bispecific antibody, and RINVOQ. Two things that we're doing there is Lutikizumab is being studied in a patient population that includes treatment-naive patients that could have a higher placebo response, along with treatment failure, those that have already been treated with biologics. There what we have done is utilized a Hi-SCR 75. This is a 75% reduction. That's a very stringent endpoint. It's something that we originally created for HUMIRA many, many years ago, and that was a Hi-SCR 50.
We will use that Hi-SCR 50 for RINVOQ, but RINVOQ is being studied in a population that's 100% biofailure. You see there's a, there can be a strategy there of using some of these methods on how we best control placebo, and we've seen some recent data readouts that show when you do this and have great medicines, you can really have great data and help as many patients as possible.
Okay. Makes sense. By the way, should the audience have questions, just raise your hand and we'll call on you. Since you mentioned Lutikizumab in HS, what is the goal? Do you need to have best in disease efficacy, or what is the goal of these studies?
The one thing that we observed with Lutikizumab was very high efficacy in the phase II program that was 100% TNF failure with approximately 70% that were early stage three. That gets to patient selection and maybe why we fully differentiated well from placebo. We observed a very strong safety profile. We didn't see high rates of fungal infections, for example. We didn't see flares of inflammatory bowel disease, which can happen with certain agents in HS or other diseases that are prone to IBD. That being said, we took it forward in phase III and are looking at a treatment-naive population and a failure population. Think of that in HS, how we would think about SKYRIZI in inflammatory bowel disease, being able to cover naive patients and maybe some more resistant patients.
RINVOQ, on the other hand, is targeting a full 100% TNF or biologic failure population, which is consistent with some of its positioning in the second line. That will provide us, our commercial organization, our medical organization with two assets considering multiple lines of therapy, so a portfolio approach similar to what we have executed very successfully in inflammatory bowel disease. That's the ultimate approach and strategy.
Okay.
That's a very under-penetrated market, HS, even lower penetration than atopic dermatitis, which is maybe growing beyond the 5%. HS is lower than that and has a prevalence that's similar to IBD, so there's a great amount of potential there if we can see positive data for both of these and then, eventually having a launch.
The next question kind of bridges both finance and research. What is AbbVie doing with this one trial policy? Are you in your future study designs, are you embracing one trial or are you sticking with the old way just in case, or how are you approaching this?
Steve, it's interesting you bring that up, right in the same conversation that we're having with HS. The lutikizumab phase III and the RINVOQ phase III are both single studies. It was something that has been available for many, many years, and it's something that we leveraged for both of those assets in HS. Again, we'll see a readout in those phase IIIs later this year. It takes a discussion with the health authority and the division to make sure that they're comfortable with the number of patients that you're studying, the amount of safety data that you'll have, how long they've been on therapy, and the endpoints. That being said, going forward, I think that does create some efficiencies and opportunities for many more assets that can be studied in a single trial.
That's something that we've always looked at, and in fact, we're looking at several years ago, even before this new updated guidance came out. I agree, that could be a benefit and could lead to greater speed and simplicity, especially at the site level.
Okay. maybe best poised to Jeff, what are AbbVie's plans? Well, first of all, maybe you can update us on SKYRIZI in GI disease overall, but specifically ulcerative colitis. Is there a need, is there a plan to test a subcutaneous version in the induction phase?
I think as Roopal mentioned, Steve, that we're very, very happy with this readout that we saw earlier in the week because it fits right within overall how we're positioning SKYRIZI in IBD and especially Crohn's. We're positioned in frontline bio-naive that this is your first go-to medication. As I highlighted recently, our capture rate, despite the launch of a competitor, is still very, very high. It's about 75% in that segment and about 60/40 overall. We do see that this new subcu data is gonna allow us to not only close a gap, but to frame the power of the data that has just been revealed. That's also very exciting.
You know, we wanted to try to understand, because the dosing is different between UC and Crohn's, about how we would read out in this first trial with Crohn's, which was exceptionally positive. Maybe, Roopal, you can discuss the next steps for ulcerative colitis.
As Jeff stated, ulcerative colitis has a higher dosing regimen during the induction period. That's something that I would say we'll evaluate now. The most encouraging news is the data that we saw looks better than the IV striking data for endoscopic response in naive, which is our positioning for SKYRIZI. I think there is a potential opportunity, but we'll take a look at that. Remember, Crohn's will cover two-thirds of the IBD market already, and we'll get that submission together quickly and hand it over to Jeff's team, hopefully with a nice label in 2027.
Sticking with this topic, in a few years, we may see the anti-TL1A arrive in IBD. How do you view that, Jeff? Is that a major obstacle, minor obstacle? How would you view it?
I think when we look at the overall profile of SKYRIZI and RINVOQ, it's gonna be difficult for those agents from what we've seen so far, to really differentiate or have a significant needle mover. Will they take some share? Will the segment grow? Yes, of course. Again, that's on the backdrop of a really, really dynamic IBD market. The penetration, the biopenetration still has quite a ways to go. We also see the line of therapy expansion we've talked before, so that in many cases, second and third line are gonna grow faster than front line, which is still a significant market space. We know that we have a very, very strong share position.
I think 1 of the key aspects when we looked at the TL1A assets a few years ago, we liked them, but what we really liked about them was the potential to be used in combination to truly reset the standard of care. That's why when we looked at the profile of SKYRIZI, and Roopal can sort of expand on this, when we look at how durable it is, you know, the length of the therapy that you get, that's why we did the licensing deal for a long-acting TL1A, because we think the real breakthrough is when those two come together, both very, very safe, both potentially, you know, proven, but to reset the standard. Roopal's program in terms of combination therapy is moving apace now, and we should see that readout to see if our theory in fact works out.
Our TL1A asset will be probably the third one actually to enter into our platform IBD study assessing these combinations that Jeff was describing. Because of that strong safety profile and durability and high levels of efficacy with SKYRIZI, we see now the opportunity to combine biologic therapies with the same observation of TL1A relatively safe. As Jeff stated, we like those, we like the efficacy, but as a monotherapy does not differentiate with SKYRIZI or RINVOQ. In particular, if you look at the most recent induction data that I just described a few moments ago, they definitely can't differentiate, especially in the naive population.
Before we initiate those TL1A combos with SKYRIZI, which are all in process, we also have in our own internal alpha-4 beta-7 asset that's very potent, that's being combined now with SKYRIZI, and lutikizumab, which we were previously discussing in the context of HS. That is also part of this platform study. These data will read out this year and will allow us to make some decisions on what to take forward, both one of the combinations and in parallel with this work that we're doing clinically, we are working with our development sciences team to create co-formulation. That's gonna be very important from a patient convenience standpoint. We're hopeful that we can break the efficacy ceiling that we've observed thus far in the IL-23 class, even in the TL1A class.
Later in the year, we'll be able to initiate the TL1A combination with Skyrizi. We also have a TREM1 antibody, which is a master regulator in the inflammatory cascade. That one will also be assessed in IBD. First, we'll look at it as monotherapy and see if there's potential for combinations. One could even imagine some combinations that don't even include Skyrizi, based on the number of assets that we have.
Scott, maybe you can remind us what the company said about the long-term growth outlook for the business. What do you need to see from Roopal's side of the organization to give you the confidence to push that out even further?
Sure. No, happy to answer the question, Steve. We've provided a high single-digit CAGR through the decade from 2024 to 2029 is when we originally gave that period of time. The high single digit growth through the decade which puts us in the top tier. We've also are fortunate to have, you know, cleared our big LOE event with HUMIRA. The assets that we have in place today, the products that we have give us a clear line of sight to growth well into the next decade as well. That's on the top line. Certainly, we do see further EPS expansion beyond the revenue growth over that period of time as we, you know, focus and leverage the SG&A line. We'll continue to invest heavily in R&D.
You've seen us increase our R&D in terms of profile, but also in absolute dollars by a few billion dollars since 2022, for example. We'll continue to do that as we drive out that pipeline. I'd say what, you know, what we need to continue to see, you know, certainly when we do things like extend outside of Roopal's area, but extend the RINVOQ LOE to 2037, a very, very positive aspect as well. As we look at across the portfolio what that next generation of the growth drivers are, so it's the readouts, it's all the activity that Roopal just mentioned in immunology. Certainly, we're very excited about our oncology pipeline as well. There's a lot going on there that we're gonna watch.
Of course, neuroscience is one that we've spoken about a lot. It's our fastest-growing area currently. In that area, you know, we've talked about having three $5 billion dollar areas with VYLEV approaching $5 billion, our oral CGRPs in the migraine space exceeding $5 billion peak, and then Parkinson's with VYLEV and Tavapadone and DUODOPA also being in a $5 billion dollar. We see a strong momentum there, but we also have an exciting pipeline behind that as well. Still looking at Emraclidine. Certainly, we're very excited about Bretisilocin, which you brought in from the Gilgamesh transaction. I think it's just the continued development of the pipeline we have in-house, and we're not done obviously from a business development standpoint.
We've acquired over 30 assets and platforms over the past two years, investing, you know, $8 billion in external innovation. We're gonna continue to ensure that, you know, Roopal has everything he needs in his armamentarium to make sure he's developing and driving that pipeline and provides with those growth drivers for the future.
Great. That's, that's a robust outlook, a strong growth, beyond the end of this decade. Maybe both Jeff and Roopal can kind of walk us through the building blocks that are going to be able to deliver that, especially as you get into the next decade. How are you going to deliver that bar of growth?
Well, I think it's the breadth of the assets that we have will facilitate that long-term growth. Scott mentioned several of these. Immunology, we've talked about quite a bit already today. What I would add to immunology is our B-cell depletion strategy. One of the deals that we did as part of that $8 billion was Capstan, and that provides us with in vivo mRNA-based CAR-T, which could have a tremendous impact in patients in rheumatologic disease. Thus far, we've seen proof of mechanism in healthy patients where we do deplete B cells and then naive B cell repopulates. We are now moving into patients, rheumatoid arthritis, lupus, Sjögren's are some ideas.
You could even see us testing multiple sclerosis potentially, and even other disease states that aren't classically thought of as being B-cell driven. That could be a tremendous opportunity because this would allow to deliver the CAR immediately without transforming anyone's blood cells, no requirement for lymphodepletion, no genomic DNA integration because it's mRNA-based, transient expression, so you don't have a CAR living there the whole time depleting B cells, patients requiring antibiotics or IVIG, for example, and the ability to potentially redose. In parallel with that, we have our own monoclonal antibody against CD19 with a linker and a warhead, which is a steroid element, and that we've also observed B-cell depletion.
That is also in the clinic, and later this year we'll start seeing that data to continue to raise the bar on where we see standard of care emerging beyond all the work that we're doing in IBD and HS. That's immunology. Neuroscience, Scott walked through the Parkinson's opportunity. We anticipate tavapadone being approved later this year. That will be an exceptional complement for VYLEV, which is Jeff's team is ramping this very nicely across the globe. That gives a 24-hour oral option that could come in right before patients would move to a 24-hour subcutaneous option. As part of this, we are looking still in schizophrenia with emraclidine. Recall that was dosed at 30 milligrams in the last two pivotals that didn't differentiate from the high placebo response that we saw.
However, we are now moving into a 100 mg dose testing. We've surpassed 75 mg, and we'll see if 100 mg is tolerated, which would give us better receptor occupancy. Once we clear that dose exploration, we'll move into phase II for schizophrenia, including monotherapy. Recall that's from Cerevel along with tavapadone. The other very exciting one that Scott mentioned is bretisilocin. This is the psychedelic. Why we like this one is it's short-acting, resulting in a very quick office time because that can be a burden to the patient and to the clinic, and it's a 5-HT2A agonist, and the opportunity there is not just a single dose but potentially multiple dosing. The concern with these psychedelics is a 5-HT2A/2B agonism, which can result in cardiac valvular issues, what we saw years ago with fen-phen.
Bretisilocin seems to deliver the efficacy experience but is actually an antagonist at that particular receptor that we believe results in the valvular issues. We'll see second phase two arms read out and we'll be moving into phase III, and that could be very exciting and totally reshaping how major depression is treated. We're also studying PTSD is on the plan. In oncology, we're very excited about our antibody-drug conjugates. We're on market with ELAHERE now. In ovarian cancer, which is largely driven by chemotherapy, this allows us to give us a replacement to conventional chemo. We have a follow-on molecule to that 151 that will read out this year that may allow for greater depth in FR alpha expression, not just high, but going lower. We have our own topo warhead version of ELAHERE.
This year, we'll also see a readout for Temab-A in ovarian cancer, which is currently under development in lung cancer and CRC. We saw very exciting data with Temab-A and CRC, which as a disease state is similar to ovarian cancer, which is dominated by chemotherapy and a victim, I would say, of minimal innovation over the last two or three decades. In ovarian being so much larger, the data was in combination with bevacizumab in third line plus against bev/Lonsurf the standard of care. We saw 30% ORR against zero. That will be a phase III approach that we can take right now in all comers. We're very excited about that. We had strong data in pancreatic cancer. We have two phase IIs moving forward there.
We're also anticipating head and neck cancer results this year on the ADC front. Small cell lung cancer ABBV-706, which binds CEACAM6, showed 80% ORR in second line small cell lung cancer. Those Phase IIIs will also be kicked off. One final ADC I'll mention that's coming soon at ASCO, I think we anticipate showing this data. It's taking technology from lutikizumab, in fact, and from Temab-A and combining it together where we have a bispecific against PSMA STEAP1 with the same linker technology and topoisomerase inhibitor payload in prostate cancer. The very early data was encouraging. We'll have more data to share at ASCO. That creates a very exciting portfolio-
Of ADCs that will drive growth in 2030 and beyond. In multiple myeloma, I think, Steve, you have asked us over the years about ABBV-383 or TNB-383B in multiple myeloma and how we see that fitting in to a potentially one would consider a very crowded space in myeloma. The difference being is this asset drives high level of efficacy, has a, I would say, lower affinity binding to CD3, so it has a much lower CRS profile, and the molecule is designed to be delivered once a month. That phase III will read out this year, and we'll be able to potentially launch that and really move into that space with a high efficacy agent that's delivered once a month immediately with a single step up, potentially out of the hospital.
That is very desirable from a patient burden standpoint, but in particular from a clinical site standpoint, because majority of myeloma or heme malignancies are treated in the community 70%-80%. That's where you see less penetration for high efficacy or even CAR T like compounds because of the burden. Remember, in our pipeline, we have a BCMA GPRC5D and also a very unique molecule, BCMA CD38. These are all moving forward in patients, and we could see these also contributing to 2030 and beyond.
You know, we're also studying an amylin analog in obesity, which leverages our development capabilities, our knowledge of immunology, where we see obese patients in psoriasis and HS, or knowledge in CNS, migraine, where we see a high prevalence of obesity overlapping. Jeff's team and their presence in the aesthetics market, direct to patient approach. We'll see some data this year, early data from the multi-ascending dose of the amylin, though it will not be in obese patients yet, mostly men. We'll get a sense of what doses that we can take forward and what type of weight loss we can deliver.
The key there is being tolerability and why we like the amylin class with lower rates of nausea, vomiting, and diarrhea, and hopefully more sustainable use because majority of the patients tend to drop off of therapy after one year with the classic incretin class. All of those combined, I think, gives us a very strong position for 2030 and beyond.
Yep.
A couple of follow-ups, for Scott and or Jeff. What has the company said about the potential of tavapadone? Have you given a peak potential? I simply don't remember. Secondly, one asset that should be growing well into the next decade is BOTOX. Maybe you can give us an update there and what's your outlook? How confident are you in a positive outlook for that asset?
Yeah, we haven't given peak potential for tavapadone, we certainly think it's significant. We have this asset for oral selective dopamine agonist D1, D5 that we got from our Cerevel acquisition, we think it's kind of a very nice AbbVie play that we've talked about before. Roopal talked about lutikizumab and RINVOQ in HS. We've talked about SKYRIZI and RINVOQ in IBD or PSA. In this case, we're really having significant momentum with VYALEV. We're creating a sub Q space after the orals, now we're bringing oral tavapadone as monotherapy or in combination with the standard of care, which is oral levodopa carbidopa. We think that can be a very significant asset before you move to VYALEV. This idea of playing in different market segments is significant.
When you look across those segments, so think tavapadone, VYALEV, and even on the back end, we still have several hundred million dollars of DUODOPA, which is a surgery, that's where we've given that approach that we think that's at a minimum, a $5 billion opportunity.
Tavapadone's a part of that.
Okay.
Certainly not the whole thing. The largest will be VYALEV. We're really excited about that. The data has surprised us at every turn. Why is it different? Well, first, it's different because it's once a day, works for 24 hours. The efficacy is very, very strong, but the tolerability profile, because of the selectivity, is excellent. I mean, you don't get the somnolence, you don't get the edema that you see in the older generation, and you certainly don't get, from what we've seen with a significant amount of data, the impulse control disorder, and that's what the physicians have really been worried about with this prior class of drugs. It's a significant asset that we're gonna launch later this year.
BOTOX continues to be an incredible asset, across the board in both aesthetics, but even the therapeutics is even far bigger. This is a multi-billion dollar asset. We did announce that it was selected for negotiation, but the Medicare segment of that is about 30%. So we'll probably, you know, if we do get negotiating, because we're challenging that based on the fact that there's blood product within there, which is actually an exclusion, so we'll see how that legal challenge goes with the government. Nonetheless, this will continue to be a very significant brand well into the future. We do have basically, Steve, backup toxins behind it that we're gonna continue to invest in.
Great profile overall, and I would say the neuroscience momentum is very significant and meaningful for the company.
We are out of time, I'd like to ask one final question, and I'll pose it to Scott. What do you foresee or anticipate will be the biggest surprise or change at AbbVie over the next decade?
Look, I don't think it's, would be a surprise to us. I think as you've listened to over the past half hour, Rupel go through the pipeline, there's a lot of exciting things. I think the breadth of what we have going on there, we have some very exciting products I think that Jeff and his organization will be able to capitalize on. I think we're very excited about that opportunity. I think that's gonna be the, maybe the surprise, not internally, but maybe there'll be some surprise out there, because I think we will be able to not only bring those products to the market, but also execute very well as we've been known to do, and I think that's where you're gonna see us.
I suppose when I say it's a surprise to the market, when I look at the story that Rupel just laid out, you know, the assets we have in place to drive growth into the next decade, you know, and then I look at where we're trading from a P/E multiple, I suppose that's a surprise that we're as low as we are. I mean, we're around 16 right now, and we see certainly we have an opportunity for much more expansion beyond that as that information becomes kinda processed and we see this develop over time.
Great. Sounds exciting. We'll look forward to watching that.