Good morning, everyone. My name is Dave Risinger. I'm very pleased to host a couple of senior executives from AbbVie. Immediately to my left is the CSO, Roopal Thakkar, and to his left is the CFO, Scott Reents. Very much appreciate you joining the Leerink Partners Global Healthcare Conference. Maybe Scott, you can kick us off with some high-level remarks on the company's growth prospects and how we should think about the margin profile in coming years.
Yeah, of course. Happy to do that. First, thank you very much for having us down and, beautiful weather, so it's never hard to come down here from Chicago, this time of year. Appreciate you having us. When we think about the business, I mean, I think we've been pretty. We've talked a lot about the prospects. Obviously, we're excited the way 2025 performed, the momentum coming in. We're excited with our guidance of $67 billion in 2026. Really, when we look at the business, we have the portfolio of assets in place today, on market de-risk the. We've talked about this a lot, driving high single-digit growth through the decade.
We're very confident and continue to be very confident in doing that, as well as a clear line of sight to robust growth into the next decade as well. We have what we need to continue to grow. When you think about that growth and what's gonna drive that growth, certainly SKYRIZI and RINVOQ, now entering their eighth year on market, continue to generate strong growth, over 20% combined growth in the year, off a large base. Just really have been happy with the performance of those. You know, they're operating in you know, strong products that are differentiated among other assets within their various indications, but they're in indications that are growing well, that markets are growing well.
When we look at the market share that we have on an actual basis, we still have a lot of room versus the end play. We see a lot of headroom for continued share growth in addition to that market growth. We're happy to see that. You know, outside of immunology, we also continue to have strong growth in neuroscience, our second fastest growing area. You know, when we had our earnings call at the fourth quarter call and gave the guidance, we talked about a couple of things where we've seen particular momentum. The oral CGRPs for migraine, UBRELVY and QULIPTA.
The uptake and the momentum from those two has been strong enough that we've indicated that we'll have in excess of $5 billion of growth or, I'm sorry, total peak sales for those assets. When we look into our emerging Parkinson's franchise. Certainly, we've been on the market with DUODOPA for a number of years and had good results, but the launch of Vyalev is very promising, and we have an asset that will be coming to market within this growth period I'm talking about, tavapadon. That Parkinson's group of products will be also in excess of $5 billion. You know, a number of assets across the entire portfolio, and we can talk about those in addition to the pipeline, which I know we'll get into. From an earnings perspective, we've done a nice job.
You've seen us expand operating margin this year. In fact, we have, you know, fast growth from EPS in excess of top line. The top line's growing just under 10% on a reported basis. EPS growing over 13%. We're continuing to drive efficiencies within our SG&A line and leverage that SG&A line. As we're expanding that operating margin, we're making sure that we invest in the future. R&D is something you'll see us continue to be in that 14%-15% profile. We've continued to increase R&D on an absolute basis, $a few billion since 2022, and that's an important piece of our story when we look to what comes after the assets that we have in place today to drive that long-term growth.
We're very excited about the positioning of the company. I think we've been very thoughtful, we've been good executors, and we'll continue to be. The pipeline is something that, you know, when we look at across the board, what we're seeing is encouraging and exciting as well.
Excellent. So you touched on SKYRIZI and RINVOQ, and you mentioned market share. The investment community has been concerned about Tremfya gaining share in IBD and also concerned about the icotrokinra forthcoming launch. Could you just contextualize that and just sort of level set in terms of how you see those competitive threats and the ability of SKYRIZI and RINVOQ to continue to grow in the face of them?
Yeah, happy to do that. I think it's. I will certainly do that, David, and then I think it'd be helpful if Roopal gave some thoughts as well, because there's some important profile aspects of the products as well. You know, when we look at these markets, as I said they're growing, SKYRIZI and RINVOQ have continued to perform well. The, you know, the competition in particular in IBD is something that we're mindful. We do not ever take, you know, competition lightly. We're focused on it. When I talk about the guidance and when I give the guidance, it always contemplates the competitive effects, and we've made some reasonable assumptions.
When we step back and look at IBD, you know, SKYRIZI continues to get its more than its fair share, called 60% of new patients within IBD starts. That continues to go well. Tremfya being an IL-23, you're not seeing it. It's not a one for one, give or take away either, where you're seeing some real expansion of the IL-23 class. If you use an example we saw in psoriasis, we've seen the IL-23s, you know, be north of two-thirds of that market over time, and continuing to grow with that headroom that's from an end-play. When you look at IBD, you see the end-play is very high, again, around that call two-thirds side. You also see the actuals are still well below that.
You've got a lot of room to grow, and that's not gonna be a zero-sum game between the two. Now, that being said, as I mentioned, SKYRIZI getting more than its fair share. We're continuing to see that. Even I think, you know, more impressive in front line, first line, you're seeing 75% of new patient share for SKYRIZI. In those naive patients we're seeing even greater uptake because of the profiles that we have there. When we put together the guidance, you know, we'll look at the competition. We'll take that into consideration. We don't see that as a significant impact to our ability to continue to grow market share or achieve these numbers.
Yeah. We're able to bolster that positioning that Scott just referenced in the front line. We're very enthusiastic about the subcutaneous data that just read out for SKYRIZI, and that will be submitted this year, and we'll be preparing for approval and launch next year. Why we're enthusiastic is in particular in that biologic-naive patient population, this is that frontline patient population that Scott referenced, where we already have a strong position. We see that further bolstered by the data where we saw 60% endoscopic response, 70% clinical remission, both of those with 45-point deltas, which is higher than what we've observed with SKYRIZI given intravenously. That will be new data that will enter into the field and again help that positioning in the front line.
The other, notable change moving into this year is for RINVOQ, where the label has been updated to allow more flexibility for the physician to prescribe RINVOQ in a second-line setting after the failure of, let's say, a biologic and not being forced to step through an anti-TNF. If the physician feels it's not advisable to use, they can turn right to RINVOQ. One could imagine a patient getting SKYRIZI in the front line, and for the few patients that don't do well down the road, they can then switch to RINVOQ without having to worry about stepping through. That label update and this new data for CD induction for SKYRIZI will start entering into the market, and I would say continue to enhance our position. That way, the teams can continue to be, I would say, very effective.
Excellent. What was the timing of that RINVOQ label update?
It was the third quarter-
Yes, in the fall.
-of last year.
Got it.
That will again enter into sales materials and conversations over the course of this year, where people understand now where the opportunity has updated with RINVOQ. So that's an exciting place to be, where we can have the dual conversation and come to IBD with a portfolio, not just a single asset. It really further supports SKYRIZI in the front line and gives an opportunity for potential expanded use of RINVOQ in the second line.
Got it.
I think we can be competitive across the board in an expanding IBD marketplace.
Excellent. Remind us about when you'll be able to file for the subcutaneous induction and then that clock.
Yeah. We're here in March. We just got the data. Give us a couple months to submit it. The supplements are reviewed in approximately 10 months. That's usually the timeline, and FDA keeps to their timeline, and we stay on time, then the earlier part of next year, we would anticipate an approval and then a fairly rapid launch.
Obviously, in UC, it's a different, you know, volume that's required. Could you speak to that?
Yeah. The dose is higher in ulcerative colitis, so we'll take a fulsome look at the dataset, including our PK/PD data, which we haven't seen 'cause we've just seen the top-line data, and then make a decision if there is a rapid pathway in ulcerative colitis. The Crohn's indication would cover about two-thirds of IBD, so the majority of IBD is covered. If we see a path forward there after we speak with regulators, then that's something else that we would pursue.
Excellent. Why don't we pivot to the recent amylin press release? Congrats on that.
Thank you.
Would love to hear your perspectives and the prospects for that drug candidate.
We're quite encouraged by the data, David. We are seeing almost a 10% efficacy delta only at 12 weeks. What's really encouraging is that the population studied was not an obese population on average, meaning the BMI that we studied was more in a healthy population under 30 and majority male. Only 12% of that population was female. Majority of percentage of weight loss usually occurs in higher BMI settings and when there's more women in the trial and usually beyond 12 weeks. We had the disadvantage of not having any of those three factors in the study and still saw an almost 10% delta in the higher treatment arms, and one of them was actually every other week.
That sets up a potential of a profile that could be every other week, potentially even monthly, a favorable safety profile and room to move on efficacy as we move into the relevant patient population and treat longer. We're very enthusiastic about moving into phase Ib, which will include patients that have, I would say, real obesity. We also have the opportunity to study a dose higher than the 14 milligrams studied, and in fact, the 14 milligrams was only given for 1 week before the weight was observed in this study. Longer duration, potentially higher dose, and the right patient population for us, I think it was not anticipated to be this good. We're very excited to move this forward and then kicking off a phase II also later this year to further optimize the dose.
We want the best tolerability we can get to drive durability and then to optimize the weight loss, which is already fairly substantial only in week 12.
Excellent. What was the average BMI of patients that were in-
I think it was 29 and change.
Okay.
Just under 30.
Got it.
Typically, you would see 35, 36 above that.
Yeah. Very impressive.
Yeah.
How have you discussed the balance between amylin and calcitonin for this agent?
Well, you're right. It is a DACRA format, so it binds both. We don't see any detriment to weight loss where I think there were some arguments that you could be better off specifically going after amylin. We haven't observed that. There could be a benefit potentially to bone if you also target calcitonin. We will learn more about this over time when we're able to do DEXA scans, also MRIs to understand the full metabolic impact, whether that's bone and then the distribution between fat and muscle. We'll be collecting all of that over time, but so far encouraged by the DACRA mechanism of this based on the weight loss that we've seen thus far in the wrong patient population-
Yeah.
-in a way.
Excellent. We have a lot of ground to cover, another 15 minutes or so. I would like to ask you just to sort of focus on, as there is a lot of pipeline readouts to look forward to, but maybe you could focus on, you know, some of the bigger catalysts that are going to be turning over, you know, over the next year or so, i.e., you know, that have implications for drugs that can be, you know, multi-billion in peak sales.
Yeah. We talked about RINVOQ briefly in IBD. We will also see in Hidradenitis Suppurativa phase III readout for RINVOQ later this year. That'll be the 16-week double-blinded data. Then also for our novel bispecific lutikizumab, which targets IL-1 alpha and beta. That will be reading out later this year in HS as well. HS is an under-penetrated market, one of the least penetrated under 5%, and the prevalence is similar to IBD. We feel that there's a robust opportunity in HS and something we can replicate potentially if both are approved to the setting that we have in IBD where you have SKYRIZI on one hand and also RINVOQ in IBD, something similar could happen with lutikizumab and RINVOQ. Both of those will have phase III readouts this year.
The other important readout in immunology is our IBD combination studies. Currently, SKYRIZI is being partnered with lutikizumab and our own alpha-4 beta-7 agent, and that data will read out this year, and if one or both are positive, we'll be moving them forward towards a phase III program. Raising the bar on efficacy is the potential with these orthogonal mechanisms while maintaining a favorable safety profile. The other readouts that we'll see, which will be early, but we've entered patients with their B-cell depletion therapies. One was obtained through the Capstan deal, which is an in vivo CD19 mRNA-based CAR T, and we'll start seeing patients this year. We have our own anti-CD19 antibody drug conjugate with actually a steroid warhead, and we'll start seeing patient-level data this year. That's immunology.
Then maybe I'll turn to oncology because we probably don't spend as much time talking about oncology and maybe the investor community underappreciates this one. We'll see phase III readout for our T-cell engaging BCMA antibody in etentamig, and that will be in a third-line setting in multiple myeloma. We don't feel the market has crowded out an agent like this because of the profile being developed. It's a single step-up dose and monthly dosing immediately. So you don't have to wait six-plus months to get to monthly dosing. This may drive enhanced safety profile, lower rate of infections, and the opportunity to continue to combine this with other therapies to move up in lines of therapy. That readout later this year as well.
We will also see more data from our ADC portfolio. We're already in the market with ELAHERE as an ADC and Emrelis as an ADC. One's in ovarian cancer, one's in lung cancer. Our next generation molecule that's similar to ELAHERE will read out later this year to see if we can go after lower levels of FR-alpha. Temab-A , which is our next gen asset that targets c-Met similar to Emrelis, will also have readouts in ovarian cancer and head and neck cancer. We've seen strong data in third line colorectal cancer, which will be initiating a phase III there. We'll see readouts in second line against FOLFIRI to see if we can replace irinotecan. That'll be important data. We have bispecific in prostate cancer, 969 that's against PSMA.
STEAP1 has our same topo warhead platform that we have in Temab-A. That will see data at ASCO in prostate cancer. The team's very excited about that readout potential this year as well. Turning to neuroscience, we'll see a second set of data, phase II data for the Gilgamesh asset called bretasilocin. That's our psychedelic short-acting agent that showed very strong efficacy in depression. We'll see another set of data there, and if that's positive, we'll have a clear signal to move very quickly into phase III in depression, and we're also contemplating an indication in PTSD if this continues to show the efficacy that we've seen thus far.
We'll have readouts in the migraine franchise in menstrual migraine later this year for ATOGEPANT and UBRELVY, and that could allow further expansion of our CGRP portfolio, and that would be a global program.
Excellent.
I would say a variety of exciting readouts.
Excellent. I guess just touching on Temab-A, what are you hoping that that will demonstrate in ovarian cancer?
Well, I would hope consistent data that we've seen with other assets that are targeting FR-alpha and others, including even HER2. Where we see c-Met today is non-overlapping with FR-alpha and HER2, and we see high unmet need. If there's a biomarker population there that's driving efficacy above the 35% threshold, I would say, then you have a potential co-positioning with an FR-alpha agent like ELAHERE, and then we can have a biomarker approach similarly against c-Met. We've already seen the behavior with Temab-A in combination with bevacizumab in colorectal cancer, and bev is commonly used in ovarian cancer, so you can anticipate a combination approach in maybe even earlier lines.
That would be exciting because physicians wanna optimize that benefit risk, and if we deliver a targeted therapy that is, partnered with a biomarker, then that will catch, people's attention. We'd be very excited if that data looks strong, and then we'd be moving that in parallel while we're waiting, for ABBV-151 is the name of the asset, which is a biparatopic similar to ELAHERE and similar warhead, so non-topo warhead. That might have the potential to combine even with chemotherapy, where these maytansinoid warheads don't drive as much cytopenia as maybe the topoisomerase inhibitors do. We'll be able to have a full spectrum coverage potentially of ovarian cancer over time.
Excellent. Scott, I wanted to pivot back to you just to talk about the financials a little bit more. AbbVie has a phenomenal track record of, you know, delivering very consistent and strong financial performance. In particular, you know, it's notable that the company can provide the level of detailed guidance that it does, including quarterly guidance, which, you know, I think makes the company unique among peers. Could you just talk a little bit about, you know, I guess the culture of execution at AbbVie at a high level and the financial discipline to be able to, you know, see things more clearly than your competitors can see for their own businesses?
Yeah, look, I think that, you know, there's been a couple things that we've taken the approach. You know, one, we are engaged in regular discussions continually, not just with the commercial organization and how the top line is looking, but across the company to understand the P&L in total. We have some pretty robust meetings. We spend a lot of time, you know, walking through and thinking through the various aspects, what would be going on. I would say that, you know, the granularity that we provide, you know, is just coming directly out of our materials, we're talking through it. I think it's important for us to ensure that we're giving that right level of a picture of what the company is.
I think maybe it's a little bit born out of, you know, being still it feels like a relatively new company when we spun out, more than a decade ago. It's been a, you know, a lot of activity over the years. The Humira LOE is something certainly that probably informed our psyche a bit in making sure that we were providing the level of information not only with respect to that franchise, but also to the remainder of the business. We knew that that had a finite life and we needed to make sure that the ex Humira, the growth platform, was properly understood and accounted for when providing that guidance. There's enough dynamics we felt was important.
But you know, we're proud of the fact that we try to give investors a good picture. I think we've been ahead of certain things like the Part D redesign. I think we're one of the first companies to really get out there and just talk conceptually about it at a level of granularity, but also provide even ultimately on a product-by-product line, you know, where we thought that that impact would be so people could fully understand it. It's important, you know, the volume's important. We try to understand that this is a volume-driven business, but pricing is a very dynamic environment, so we try to give the right color where appropriate.
Excellent. You know, clearly the company's set for solid growth in coming years. That, I guess, means the company doesn't need to execute M&A. At the same time, the stock is trading at a relatively low P/E-to-growth ratio, which implies that, you know, there's still some lack of visibility on mega blockbuster pipeline candidates...
Yeah.
...which is logical. Those, you know, there's a lot of readouts forthcoming. Ultimately people wanna see, you know, bright, shiny objects that can replace SKYRIZI someday. How do you think about M&A and external business development from that vantage point? Meaning you've got a long runway, but at the same time, you know, investors are already looking out, right, to many, many years from now. Like, just like they did for Merck with, you know, the turning of the clock in 2020.
Yeah.
People started to ask about the Keytruda cliff in 2028.
Certainly. Yeah. Maybe a couple of things. I think you're exactly right. I mean, when we look at our earnings profile, if you look at the consensus numbers, what we do trade at a discount to where we think we should trade from a P/E multiple perspective. I think especially when you look at our ability to execute over time, I'd say the quality and the durability of our growth over time, you know, it's de-risked. We don't have LOEs, just one really to speak of in 2030 with VRAYLAR. But by and large, you know, a very solid profile. I think it's a high quality, high durability of earnings. We think that should garner more respect from a multiple perspective.
I think you couple that with, you know, your question on the BD, two things. You know, one, when we look at what our needs are, our needs are farther out. Our needs are more the back half of the next decade, say, in terms of what are those growth drivers gonna be and making sure we're getting the market. At the same time, RINVOQ, you know, has an LOE date in 2037 at this point. You know, we have a long runway, which gives us the flexibility and the time to ensure that what we're bringing in-house fits that time horizon appropriately.
That's why you've seen us do over 30 transactions, roughly $8 billion in the last 2 years to bring things externally into and put it in Roopal's R&D engine to make sure we have the tools that we need when we're looking at combination studies or combination therapies, both in immunology with SKYRIZI, but also in the oncology space with the recently acquired PD-1/VEGF that we announced earlier this year. That's, you know, really bringing for those future. You know, we do have the balance sheet that gives us the flexibility. We're right around 2 times net debt to EBITDA. We've proven that we can lever up and then, you know, deliver upon a deleveraging plan. We've done that. While it's not our top priority, we certainly will look out in the marketplace.
If we see something that is quality differentiated, something that we have a high conviction on that makes sense within our business, even if it is a little more near-term, you know, to your comment, I guess, that we may or may not necessarily need right now, but if it's the right asset in the right area, we have the ability to execute upon that. We would if we saw something that was appropriate for us. We'll continue to build out our external innovation. We'll continue to feed and invest in the internal R&D pipeline that we have and maintain that 14%-15% profile growing, you know, significantly on an absolute basis year-over-year as we invest in R&D.
Really, the primary is that future, but we have the ability and I think we've got the discipline. If we see something appropriate, we can act on it.
Excellent. All right. Well, maybe we can just wrap up with Roopal where you started on HS.
Sure.
With respect to those readouts for RINVOQ and lutikizumab, can you just provide some perspective on you know, what the efficacy bars are from your vantage point? Obviously, they're two very different agents. Also, with respect to lutikizumab, maybe just provide some context on whether in the wake of its failure last year in ulcerative colitis, whether that might have impacted your expectations for its ability to perform in HS or not.
Ulcerative colitis was a little different than HS, where I wouldn't call it a failure. It just didn't differentiate from Humira as much as we did. We think there's activity there. We saw strong activity in phase II for HS, so that's what motivated us to move as quickly as possible into phase III. In that setting, it was a 100% TNF failure population with a Hurley score of greater than three, which was around 70% of the patient population. It was a very resistant refractory patient population, and we saw very strong efficacy, high deltas from placebo. That's why we moved into phase III, where we think we could potentially differentiate on efficacy and the safety profile, which was very strong also in phase II.
In phase III, we're including those that have failed a biologic and those that are naive to a biologic. You could even see a higher efficacy profile. We have a stringent endpoint there, which is a HiSCR 75. That will be reading out this year, and the positioning could be in a naive population or in a post-biologic. RINVOQ is being positioned post-biologic, where we think it'll be used, and that patient population that was enrolled in phase III is all biologic failure. You see a portfolio setup that is similar to what we have in IBD, and we think both of them can be highly efficacious in the patient populations that we're studying.
Excellent
... exit out later this year. Again, HS is still under-penetrated and has a prevalence that's similar to IBD.
Excellent. Just one final question. How are the stats set up for the lutikizumab trial that includes both naive and experienced patients?
Yeah. It's a single study, so it's highly powered, I would say. We'll be able to split and look at both groups, and I think it would be very similar to how we've seen splits in IBD, where when you look at labeling, you'll see those that are advanced therapy naive and those that are post-advanced failure patients, I would say. Then hopefully we'll be able to communicate something like that in labeling ultimately for lutikizumab.
Excellent. Well, we'll look forward to the results.
Yeah.
Thanks so much for being here.
Thank you.
with us here. Really appreciate it.
Thank you for having us.