Earnings Call: Q4 2020

Feb 3, 2021

Good morning and thank you for standing by. Welcome to the AbbVie Fourth Quarter 2020 Earnings Conference Call. I would now like to introduce Ms. Liz Hsieh, Vice President of Investor Relations. Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer Michael Severino, Vice Chairman and President and Rob Michael, Executive Vice President and Chief Financial Officer. Joining us for the Q and A portion of the call is Jeff Stewart, Executive Vice President, Commercial Operations. Before we get started, I remind you that some statements we make today may be considered forward looking statements for purposes of the Private Securities Litigation Reform Act of 1995. AbbVie cautions that these forward looking statements are subject to risks and uncertainties, including the impact of the COVID-nineteen pandemic on AbbVie's operations and financial results That may cause actual results to differ materially from those indicated in the forward looking statements. Additional information about these risks and uncertainties is included in our 2019 annual report on Form 10 ks and in our other SEC filings. AbbVie undertakes no obligation to update these forward looking statements except as required by law. On today's conference call as in on the call will be recorded. Please note that the company's financial results are will be conducting a call to our financial results and financial results from today, which can be found on our website. Unless otherwise noted, our commentary on sales growth is on a comparable basis, which includes full year, full current year and historical results for Allergan. For this comparison of underlying performance, All historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policies and exclude the divestitures of Zenpep and Biocase. References to operational growth further excludes the impact of exchange. Following our prepared remarks, we'll take your questions. With that, I'll now turn the call over to Rick. Thank you, Liz. Good morning, everyone, and thank you for joining us today. I'll discuss our Q4 and full year 2020 performance as well as our expectations for 2021. Mike will then provide an update on recent advancements across our pipeline and Rob will discuss the quarter and our 2021 guidance in more detail. Following our remarks, will take your questions. We delivered another strong quarter with adjusted earnings per share of $2.92 are participating in the midpoint of our guidance by $0.08 4th quarter total net revenues were up nearly 7% on a comparable operational basis. This performance was driven by robust double digit sales growth from our immunology, HemOnc in neuroscience franchises as well as 9% comparable operational sales growth of BOTOX Cosmetic, which is demonstrating a rapid recovery. Our Q4 performance tops off another excellent and truly transformational year for AbbVie, which included The successful acquisition and integration of Allergan, creating a stronger and much more diverse AbbVie With leadership across numerous attractive high growth markets. Significant contributions from our 2 new best in category immunology medicines, will be conducting their 1st full year on the market. We expect the combined contribution from Linvok and SKYRIZI to nearly double in 2021 are participating in the range of $4,600,000,000 based on their continued strong uptake in RA and psoriasis As well as Winvoke's anticipated approvals in PSA, ankylosing spondylitis and atopic dermatitis later this year. We delivered continued robust growth from our leading HemOnc portfolio with IMBRUVICA and VENCLEXTA contributing more than 6 $600,000,000 in combined 2020 sales. We expect our HemOnc franchise to grow double digits again in 2021. We also added 2 compelling oncology pipeline assets epikritamab, a potential best in class CD3xCD20 are participating in development for B cell malignancies and lenzoparlimab, an anti CD are in the range of 47 monoclonal antibody being studied in multiple cancers. These two assets will further support the growth of our hemon franchise across our long range plan. The acquisition of Allergan brought us a substantial neuroscience portfolio with compelling therapies for migraine and psychiatric conditions, augmenting our already existing neuro franchise. The newly combined neuroscience franchise delivered nearly $4,900,000,000 in comparable 2020 revenue And is expected to grow double digits in 2021. We also added the leading global aesthetics franchise, are in a largely cash paid portfolio with roughly $3,500,000,000 in comparable 2020 revenues. As I previously noted, This portfolio has demonstrated a rapid V shaped recovery and we view aesthetics as an extremely attractive long term growth opportunity. Expect our R and D pipeline advancements to lead the approval of more than a dozen new products or indications over the next 2 years, including have a total of 6 additional indications for RINVOC and SKYRIZI, which will cover all of HUMIRA's major indications are participating in the same period, plus new significant disease areas, including atopic dermatitis, expanded indications for VENCLEXTA and VALAR and several new product approvals, including atogepant for episodic migraine, navitoclax for myelofibrosis in ABVD-nine fifty one, a potentially transformative next generation therapy for advanced Parkinson's disease. These new opportunities will collectively add meaningful revenue growth in advance of the U. S. HUMIRA LOE. We've entered 2021 in a strong position, which is reflected in our revenue and earnings per share guidance. Based on the recent outperformance of our business, we expect full year 2021 comparable operational sales growth of are expected to be approximately $1,700,000,000 above current have a listen only mode. We anticipate 2021 adjusted earnings per share of $12.32 are in the range of $12.52 representing growth of 17.6% at the midpoint. This level of guidance represents impressive performance with nearly all aspects of our business expected to perform at were above current consensus for 2021. The Allergan integration continues to go very well. The transition has been seamless despite the size of the transaction and the timing of the COVID pandemic. While we're making excellent progress against our expense synergies, which Rob will cover in more detail here momentarily, It remains increasingly clear to us that there are significant opportunities for long term revenue contributions across numerous Allergan Growth platforms. As we recently disclosed, we believe uBrelvi, the first to market and leading oral CGRP for acute migraine, represents a $1,000,000,000 plus peak sales opportunity. Etogepan, a potential once daily oral treatment for the prevention of episodic and chronic migraine also represents a $1,000,000,000 plus peak sales opportunity. We expect Vaylor's peak sales to approach $4,000,000,000 within its currently approved indications Representing a potentially significant incremental growth opportunity. Anesthetics, which is poised to regain its growth trajectory this year is expected to generate high single digit revenue growth We continue to closely monitor the COVID dynamics, which will have an impact on our business again in 2020 are in the first half of the year, but significantly moderated from the 2020 impact. And despite The recent COVID resurgence within select geographies, we feel the global healthcare system is much better equipped with COVID treatment protocols and PPE to safely see and treat patients throughout the current year. That said, some therapeutic areas continue to be more impacted than others, like CLL, are in the range of HCB, certain hospital based procedures among others, which we have contemplated in our 2021 guidance. Overall, we've been pleased with the rate of recovery across our business, a testament to our differentiated product profiles and our commercial execution. So in summary, we've assembled an impressive set of growth assets and the outlook for Avi's business remains strong. With RINVOC and SKYRIZI expected to contribute more than $15,000,000,000 in risk adjusted in sales by 2025 and our expectations for continued robust growth across Keymont, neuroscience and aesthetics, We have a high degree of confidence that we will be able to successfully absorb the HUMIRA LOE impact in 2023, support an immediate return to total sales growth in 2024 and produce compelling high single digit compounded annual total sales growth in 2025 through the remainder of the decade with the diversified portfolio and pipeline that we have today. With that, I'll turn the call over to Mike for additional comments on our R and D programs. Mike? Thank you, Rick. We've clearly made significant progress with our pipeline over the past few years, particularly our late stage programs in hematologic oncology with IMBRUVICA and VENCLEXTA And in immunology with RINVOK and SKYRIZI. Since inception, our R and D organization has delivered an impressive set of new products, We also continue to see significant evolution of our early and mid stage clinical programs, with many assets expected to transition to late stage are participating in the next several years. We will continue to replenish our late stage pipeline with innovative assets that have the potential to drive additional growth for AbbVie in the second half of the decade. At our recent immunology investor event in December, we provided a detailed overview of our immunology programs, Highlighting the robust data generated to date for RINVOK and SKYRIZI across approved and pipeline indications. Included in this event, we presented positive top line data from 2 new Phase 3 studies for RINVOQ. Results from the first induction study in ulcerative colitis and results from the head to head study versus dupilumab in atopic dermatitis. We expect to see results from the 2nd Phase 3 UC induction study later this quarter And from the UC maintenance study in the middle of this year, with regulatory submissions anticipated in the second half of twenty twenty one. Our regulatory applications for RINVOK in atopic dermatitis are currently under review and we expect an approval decision in the U. S. In the second quarter based on priority review and in Europe in the second half of the year. We recently received European Commission approval for RINVOQ in psoriatic arthritis and ankylosing spondylitis and expect approval decisions for those indications in the U. S. In the first half of this year. I want to take a moment to address the topic of safety, Specifically MACE and malignancies following the results from tofacitinib's post marketing safety study. At present, There are no data to suggest the safety outcomes from their study apply to a specific JAK1 inhibitor such as RINVOK. We are not aware of any signal for an elevated risk of MACE or malignancies with RINVOC or any JAK inhibitor other than XELJANZ. We conducted a pooled database analysis across our clinical trials for DBT, MACE and malignancies at the time of RINVOC's regulatory submission and have updated it periodically, including up to the present. Rates with Renvok have not been elevated relative to comparators or to expected baseline rates. Importantly, there has been no increase or meaningful change in those rates over time. Additionally, we adjudicate events from MACE and DBT, Which is considered the highest standard of evidence. If we look across our long term database in RA, A population that is at increased risk for MACE events, our rates remain low. At the approved dose in RA, We have followed more than 3,700 treated patients, totaling more than 9,000 patient years experience. Our rate of MACE events is 0.4 per 100 patient years, which compares favorably to the expected rate of 1.0 to 1.7 events per 100 patient years. In addition, there is no evidence of a dose response between the 15 30 milligram doses. Similarly, the rate of malignancy excluding non melanoma skin cancer with similar follow-up is 0.8 events per 100 patient years. This rate is also consistent with the expected range of rates of 0.86 to 0.94 per 100 patient years. And again, we see no evidence of a dose response are in between 15 30 milligrams. Moving now to SKYRIZI. We also recently reported top line results from the Phase 3 programs for SKYRIZI in Crohn's disease and psoriatic arthritis. In the 2 Crohn's induction studies, SKYRIZI demonstrated significant improvements in clinical remission and endoscopic endpoints compared to placebo with symptom improvement seen as early as week 4. Based on the data generated to date, We believe SKYRIZI has the potential to become an important new treatment option for patients with moderate to severe Crohn's disease. We expect to see results from the maintenance study in Crohn's disease later this year with regulatory submissions anticipated in the second half of twenty twenty one. We're also very pleased with SKYRIZI's results in the Phase 3 studies in psoriatic arthritis, We believe that the activity we have seen on joint disease and the impressive skin clearance that is a hallmark of the SKYRIZI program make it a compelling offering for patients with mixed joint and skin involvement. We plan to submit our regulatory application as well, where we expect several data readouts and phase transitions in 2021. We expect to begin 3 new studies for ABBV-one hundred and fifty four, our TNF steroid conjugate, including a Phase And we'll see proof of concept data in the Q2 for rabagalumab, our CD40 antagonist in Phase are in the range of 2 for ulcerative colitis and for ABBV-one hundred and fifty seven, our oral ROR gamma T inhibitor in Phase 1 for psoriasis. Both of these programs experienced slight COVID related delays with results now expected for both in the Q2 of this year. In oncology, we continue to make significant progress advancing our pipeline with numerous data readouts and regulatory milestones last year, as well as the addition of several new assets brought in through our in licensing efforts, We showcased new data from several programs at the recent ASH meeting, where we presented nearly 40 abstracts from 8 different assets. Notable presentations included data from the Phase 2 CAPTIVATE trial evaluating IMBRUVICA plus VENCLEXTA in frontline CLL, which showed patients who achieved undetectable MRD following this combination maintain their deeper mission at the 1 year mark after stopping therapy with a 95% rate of disease free survival. We also presented new 5 year data from VENCLEXTA's MIRANO trial demonstrating the benefits of fixed duration VENCLEXTA combinations in helping patients achieve sustained progression free survival. The latest results from Murano in the relapsedrefractory CLL setting showed a median progression free survival of 54 months in the VENCLEXTA and rituximab group compared to 17 months in the bendamustine rituximab group 3 or more years after stopping treatment. Updated dose escalation data from a Phase 1 study evaluating eptiridumab in B cell malignancies were also presented at ASH. Eptiridumab is a subcutaneously delivered bispecific CD3xCD20 antibody are being developed in collaboration with Genmab. In the Phase 1 study, eptaritamab demonstrated encouraging single agent antitumor have a very strong performance in the Q4 of 2018. We have a very strong performance in the Q4 of 2018. We have a very strong performance in the Q4 of 2018. We have a very strong performance in the Q4 of 2018. We have a strong performance in the Q4 of 2018. We have a strong performance in the Q4 of 2019. We have a strong performance in the Q4 of 2018. We have a strong performance in the Q4 of 2019. We have a strong performance in We believe epridumab has the potential to become a best in class therapy across a number of B cell malignancies, including diffuse large B cell lymphoma and follicular lymphoma. The Phase 3 trial in relapsedrefractory DLBCL recently began and we will provide updates on epkiridumab as its development program Initial results were also presented from a Phase 1 study evaluating TNB-383B in relapsed refractory multiple myeloma. DNB-three eighty three B is a novel, bispecific T cell engaging immunotherapy Targeting BCMA and CD3 being developed in collaboration with Teneo Bio. These Phase 1 results demonstrated that BCMA CD3 bispecific provided overall response rates of 80%, with a large number of patients achieving a very good partial response or better despite having received multiple prior lines of therapy. TMB-383B was well tolerated at all doses tested with a few off target toxicities and no Grade 3 or higher CRS observed. With its safety profile, efficacy and the convenience of once every 3 week dosing, this agent has the potential become a promising treatment option for myeloma patients. And our partner I Mab published in abstract with initial results from a Phase 1 study evaluating lemzoparlimab in AML and MDS. These results demonstrated encouraging activity in relapsed refractory AML patients. And lemzoparlimab was well tolerated with no serious hematological adverse events reported to date. Based on these promising initial results, We plan to begin new studies this year for lemsaparlimab in AML, MDS and in multiple myeloma. We also recently saw data from an interim analysis of a Phase 2 study evaluating TELUSOV in heavily pretreated nonsquamous The encouraging results from Stage 1 of this study met the criteria for advancing the program With TELUSO B demonstrating a 54% objective response rate in patients with wild type eGFR, we have highly expressed In EGFR wild type patients with overexpressed TMAT, which includes both high and intermediate expression, the objective response rate was 35%. Based on these results, We believe that there is an important role for TULISOV in this target population, which represents roughly 25% of the non squamous non small cell lung cancer will be opening the 2nd stage of the study and are planning discussions with regulators regarding the potential of this study to support an accelerated We expect 2021 to be another important year for our oncology pipeline with several regulatory submissions as well as data readouts across all stages of development. This year, We expect to see data for IMBRUVICA in the Phase 3 SHINE study in frontline MCL with regulatory submissions expected in the second half of the year. Data for IMBRUVICA in combination with VENCLEXTA and second line or greater MCL and frontline CLL with regulatory submission for frontline CLL expected in the second half of the year. We also expect to see data from registration enabling studies for VENCLEXTA in high risk MDS and nivitoclax in relapsedrefractory are in the range of 2nd consecutive quarter. And we expect to see data from numerous programs in our early stage oncology pipeline. In addition, the programs under collaboration with Calico are also progressing well. Our partnered effort is comprised of a strong pipeline of novel targets, which includes more than 20 active programs in discovery or preclinical development. Importantly, we currently have programs which have advanced into clinical development in 2 areas, immuno oncology and neurodegeneration. The lead Calico program in oncology is focused on PTPN2 inhibitors, which act at multiple steps in the cancer immunity cycle and have potential applicability in a broad variety of tumor types. The discovery of novel, orally bioavailable PTPN2 inhibitors represents a significant breakthrough in We've seen evidence of immune activation in the clinic with this pathway and we expect to see proof of concept data from this program in 2022. The lead Calico program in neuroscience is an EIF-2b activator, which targets a key regulator of the highly conserved integrated stress response pathway. Inhibition of this pathway has the potential to prevent pathology and restore function in a number of neurodegenerative diseases, Such as ALS and Parkinson's disease as well as in traumatic brain injury. Our lead EIF-2b activator, ABBV CLS 7,162 is currently progressing through Phase 1 and we plan to begin a study later this year in patients with ALS. In other neuroscience updates, last year we completed our registrational program for etogepan in episodic migraine prevention And we recently submitted our regulatory application to the FDA. We expect an approval decision by the end of the Q3. The data generated in our Phase 3 program support a strong benefit risk profile and we believe that etogipan has the potential to offer meaningful benefits to patients as a safe, effective oral treatment option for the prevention of episodic migraine. In 2021, we expect to see data from several late stage neuroscience assets, including results from 2 Phase 3 studies for VRAYLAR in major depressive disorder and results from the pivotal program for ABBV-nine fifty one in advanced Parkinson's disease, with regulatory submissions for 951 expected in the second half of the year. We also expect to see proof of concept data for elizanimab in a Phase 2 study in multiple sclerosis and ABBV 8E12, are lead anti tau antibody in a Phase 2 study in Alzheimer's disease. In addition to AD12, we have a number of promising approaches in Alzheimer's, are participating in the U. S. And CD33 currently in clinical development as well as other tau approaches in preclinical development. These include tau antibodies with different epitope specificity as well as approaches to clear intracellular tau. In aesthetics, we continue to make excellent progress with our portfolio of facial toxins and dermal fillers. With several regulatory submissions, data readouts and pivotal study starts expected this year. Our programs include new indications for BOTOX as well as innovative toxins such as new liquid formulations in both long and short acting toxins. We also have programs to develop new indications for the JUVEDERM collection as well as novel dermal fillers such as HARMONICA, which will be entering registration enabling studies in the U. S. And in eye care, based on the positive results from the Phase 3 studies evaluating our topical eye drop, AGN-190, for the treatment of symptoms associated with presbyopia. We plan to submit our regulatory application later this month are in the range of multiple COVID related challenges and we were able to maintain study continuity and minimize delays. We're entering 2021 well positioned for continued success and we expect significant program advancement across all stages of our pipeline again this year. This includes 5 new asset or major indication approvals, half a dozen regulatory submissions, more than 10 pivotal study readouts and more than 15 data readouts from early and mid stage programs. With that, I'll turn the call over to Rob for additional comments on our 4th quarter and our 2021 guidance. Rob? Thank you, Mike. Starting with 4th quarter results, we once again delivered strong top and bottom line performance. We reported adjusted earnings per share of $2.92 above our guidance midpoint by $0.08 Total net revenues were approximately $13,900,000,000 up 6.8% on a comparable operational basis and ahead of our expectations. Immunology Global sales were approximately $6,000,000,000 up 14.8% on an operational basis. Within immunology, HUMIRA sales were approximately $5,200,000,000 up 4.4% on an operational basis With continued high single digit growth in the U. S. Offset by biosimilar competition across international markets. SKYRIZI sales were $525,000,000 and RINVOX sales were $281,000,000 With both products demonstrating strong sequential growth above expectations. Hematologic Oncology delivered another strong quarter With revenue of approximately $1,800,000,000 up 15.5 percent on an operational basis with solid growth from IMBRUVICA and VENCLEXTA. Aesthetics sales were more than $1,100,000,000 with Botox Cosmetic and Juvederm both experiencing a rapid recovery from the COVID pandemic. Neuroscience revenues were nearly $1,400,000,000 up 14.9% on a comparable operational basis led by VRAYLAR and our migraine portfolio. We also saw a significant contribution from eye care, which had sales of more than $900,000,000 Turning now to the P and L profile for the 4th quarter, Adjusted gross margin was 81.8 percent of sales, adjusted R and D investment was 12.6% of sales and adjusted SG and A expense was 22.3 percent of sales. The adjusted operating margin ratio was 46.9 percent of sales, An improvement of 2 30 basis points versus the prior year. Net interest expense was $618,000,000 and the adjusted tax rate was 11.6%. As we look ahead to 2021, Our full year adjusted earnings per share guidance is between $12.32 $12.52 Reflecting growth of 17.6 percent at the midpoint. Excluded from this guidance is $5.63 We expect adjusted net revenue of approximately $55,700,000,000 At current rates, we expect foreign exchange to have a 1% favorable impact on full year comparable sales growth. This forecast comprehends the following assumptions for our key products and therapeutic areas. We expect immunology global sales of are participating in the Q4 of 2018. We are now ready to take our questions. We are now ready to begin the call. We are ready to take our questions. We expect hematologic oncology to grow double digits with IMBRUVICA global revenue of approximately $5,700,000,000 and VENCLEX to global sales of approximately $1,800,000,000 For Aesthetics, we expect global sales of approximately $4,500,000,000 Including approximately $1,800,000,000 from BOTOX Cosmetic and approximately $1,300,000,000 from Juvederm. For neuroscience, we expect global revenue of approximately $5,700,000,000 including BOTOX Therapeutics sales of approximately 2,300,000,000 VRAYLAR sales of approximately $1,800,000,000 and YUREVELVI sales of approximately $400,000,000 For eye care, we expect global sales of approximately $2,900,000,000 including approximately $550,000,000 from RESTASIS, For our remaining larger products, we expect global sales of approximately $2,000,000,000 from MAVERET, are in the range of $1,200,000,000 from Creon, dollars 1,000,000,000 from LINZESS, dollars 800,000,000 from Synthroid and $750,000,000 from Lupron. Looking at the P and L for 2021, we are forecasting full year adjusted gross margin of approximately 83% of sales, are interested in R and D investment of approximately $6,600,000,000 and adjusted SG and A expense of approximately $11,800,000,000 This guidance includes approximately $1,700,000,000 in expense synergies from the Allergan acquisition. We are forecasting an adjusted operating margin ratio of approximately 50% of sales, which represents an improvement of roughly 200 basis points We expect adjusted net interest expense of approximately $2,400,000,000 Our non GAAP tax rate to be approximately 12.5 percent and our share count to be roughly flat to Q4 2020. As we look ahead to the Q1, we anticipate net revenue approaching $12,700,000,000 At current rates, We expect foreign exchange to have a 1% favorable impact on comparable sales growth. We are forecasting an adjusted operating margin ratio We expect adjusted earnings per share between $2.79 $2.83 excluding approximately $1.32 of known intangible amortization and specified items. Finally, AbbVie's strong business performance and outlook Our capital allocation priorities. Our cash balance at the end of December was $8,400,000,000 and we expect to generate free cash flow of approximately $21,000,000,000 in 2021. This fully supports have a strong and growing dividend, which we have more than tripled since inception, as well as rapid debt repayment, where we expect to pay down $17,000,000,000 of combined company debt by the end of 2021, including the $8,600,000,000 that was repaid in 2020. We expect to achieve a net debt to EBITDA ratio just below 2.5 times by the end of 2021 with further deleveraging through 2023. We anticipate that our net leverage ratio will be approximately 2x by the end of 2022. Our strong cash flow also allows for continued business development with approximately $2,000,000,000 allocated annually to augment our pipeline with the most promising external technologies and innovative mid to late stage assets. In closing, We are very pleased with AbbVie's strong performance in 2020. We've driven top tier growth while also advancing our strategic priorities. And we We expect to deliver robust performance in 2021 and over the long term. With that, I'll turn the call back over to Liz. Thanks, Rob. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the And our first question today is from Geoffrey Porges from SVB Leerink. Thank you very much. And as usual, appreciate all the detail and the guidance and congratulations on the results. A quick question discussions with regulators about conducting any other studies for RINVOC or updating the label for RINVOC as a result of that negative signal. And then secondly on SKYRIZI, a commercial question. Your current price for the 150 milligram dose is about 85 You're using 4x the dose for ulcerative colitis. Could you just tell us, how you can manage that? And is it feasible to have Okay. This is Mike. I will take your second question first, and then, we can cover the SKYRIZI question. With respect to RINVOC, I assume you're talking about the tofacitinib safety study, which top line results are in the last several days and showed in that program that they were unable to exclude Risk of MACE or malignancy based on the criteria that were used to analyze that data set. As I said in my prepared remarks, We've kept a very, very close eye on our data, both at the time of the NDA and in an ongoing manner since that time, And we've not seen a signal. Our rates have not been elevated with respect to comparator or baseline rates and the rates overall remain low. With respect to your specific question about whether we've had discussions with regulators, regulators have not asked us to do a long term safety study in the way that Pfizer was asked, so that has not been discussed with regulators. And we have not had any contact with regulators And with respect to SKYRIZI? Yes. Hi, it's Jeff Stewart. On the commercial question, we have anticipated The different markets and how we will approach the pricing. Now it's important that we're just starting to see the SKYRIZI data, we saw the induction data, we'll see the maintenance data. I think it's important that as we look at our strategy that we're honing are going to have an induction dose, which is an IV at a different dose and we know that based on the form and some We believe we can price that to market and also we're coming with a unique approach for the maintenance as well depending on where that dosing falls out. And we would be using at that point, which is known a on body injector. So the combination of the forms as well as basically the ways that we will deliver the medication when we get there, We believe that we can price effectively to the market and manage it across the indications. This is Rick. I think the bottom line is we've contemplated that. It's a good question, Jeff. But I think we have a strategy that will allow us to deal with that And our next question is from Vamil Divan from Mizuho Securities. Hi, great. Thanks so much for taking the questions. Maybe 2 if I could. So one, I appreciate the long term guidance you've given recently on the top line. I'm just wondering, how we should maybe think about the margin progression as we think about are in a couple of years and then as we sort of get past that and your sales starts to ramp up again, if you can maybe give us some sense of where you think your margins could And then the other one I have is just on BRAHMAR. Again, appreciate the guidance you've given there. One of the big events for you guys is here will be the Phase 3 data in MDD. I'm just curious kind of what gives you confidence and maybe you can just talk about whether it's around To drill out with the study design, sort of what gives you confidence or why should we be dominant, sort of going into that data readout? Thanks. Pavel, this is Rob. I'll take your question on margin progression. I think when you consider the greater than $2,000,000,000 expense synergies from Allergan by next year and the P and L leverage that will come from the sales growth that we also expect for next year. You should expect that our ARPU margin will continue to expand through 'twenty two. Upon the entry of U. S. Biosimilars in 23 and given HUMIRA's profitability, it is reasonable to expect operating margin to pull back. We've indicated before are in the 45% range based on our current LRP, I think it will be a little bit higher than that. But then when we return to growth immediately in in 'twenty four will return to revenue growth, a very strong revenue growth starting in 'twenty five. You can expect then operating margins once again expand. We've had a long history are participating in the operating margin by leveraging the P and L and I would expect that to continue as we start to see very strong revenue growth Starting in 'twenty five and beyond. Yes, Vamil, this is Rick. Mike and I will cover the second question on VALAR. It's important to recognize that what we've communicated in long term guidance on Baylor is based on the 3 currently approved indicate, so it doesn't count on the fact that MDD would be successful. Now having said that, I think we do have, I'd say we're cautiously optimistic about the MDD indication. And I'll let Mark kind of walk through how we look at it and what gives us that level of confidence. But in the event it weren't to play out, that doesn't impact the guidance that we gave. This is Mike. I'll pick up from here. I think that our optimism and I think that's the right way to express in a disease like MDD, which is a challenging disease to work in, is based on a couple of features. One is based on the basic pharmacology of Vraylar, which have a unique mix of D3, D2 specificity and other features that lead clinically to what's been described as a brightening effect, which seems to be beneficial in a number of settings. It's also driven by the results that we have from the MDD study that is are positive that we already have in hand. So with one positive study, we would need only 1, at least 1 or of course both of the next two studies, to read out positive, either of those outcomes would support a filing. We've done a deep dive into the study design and the patient population. We think it's a well designed study, and we think the patient characteristics, with respect to baseline factors and other elements are all very appropriate for this sort of study and we can assess that in a blinded aggregate way, in a way that's completely consistent with study rules for the conduct of the study. But as I mentioned, MDD is a challenging area. And for that reason, we didn't build into our deal model and we didn't factor it into our guidance, As Rick said, so we view this as upside. Thanks, Vamil. Operator, next question please. Thank you. And our next question is from Randall Stanicky from RBC Capital Markets. Great. Back to RINVOC and atopic derm, how quickly Do you guys expect that launch to ramp? And maybe just help us with expectations given coinciding JAK competition from avaracitinib, the timing to payer ramp participants are in the coverage and then what we sense is a lot of patient warehousing. Maybe if you could help quantify your thinking around that opportunity within the $1,700,000,000 And then a quick follow-up, Rick, you don't get asked about eye care a lot. It's a $3,000,000,000 global franchise, you have some pipeline behind it. It could be a good growth business, but it's declining. Any appetite to Yes. Hi, it's Jeff Stewart. I'll start off with the atopic derm commercial question. We're very encouraged with are participating in the market that we're about to enter. I'll give you some context there. So when we look at the population, we see that just on the moderate to severe And so this is very, very encouraging in terms of our ability to enter. It's also significantly under penetrated. I mean, if you look at in the psoriasis market, you're talking about far greater than 10% or 12% penetration and in the single digits, the low single digits where we are right now with the 1 biologic dupilumab. So it's very, very attractive. The other thing that I would say is that we see from our go to market approach that we know the HCP is very intimately. So about 85% of the market is driven by the derms. We know the derms very well and there's are roughly 90% overlap with the big prescribers of dupilumab and drugs like SKYRIZI and our HUMIRA. So we are very, very encouraged at the ability for this segment to rapidly expand despite the fact there will be multiple new entrants coming in. To get to your specific question about the access ramp, We have a very strong position as you know with RINVOC right now in the existing indication of RA. We have greater than 95% commercial access, that's the dominant channel for atopic derm. And our anticipation is we will have very strong access that will build to that level over the course of 2021. Obviously, it's going to take some time once we get the approval to go through the final approvals on the big commercial plans and so we see it starting off slow, but then building into the middle of the year and certainly getting to a significant level at the end of the year. So the combination of the market, the asset itself, which looks very, very strong as you've seen from the data and the way that we will play in our derm segment as well as the allergy segment, give us a lot of confidence for a strong ramp The only thing I would add to Jeff's comments, I mean, if you look at RINVOC, it did $731,000,000 last year. Obviously, if you look at the running rate, so out of the 4th quarter, it has strong running rate coming out of the 4th quarter. But that's $1,000,000,000 worth Growth from 2020 to 2021. The majority of that growth is going to come from continued know performance in RA. I think where you will see the most significant impact from atopic dermatitis will be as we flow into are in the range of 20 2, much like as you saw what happened in the RA market. It takes time for physicians to start to adapt it. Once do, their momentum picks up. So I don't remember the specific number. I'm not sure we gave that guidance anyway. But I would be thinking about it more that it's continued penetration and growth in RA that's driving the bulk of that growth. Rob, anything you want to add? Yes. Just on your question regarding warehouse patients, we have a very modest amount of warehouse patients assumed in the forecast. So we're not counting the 1.7 doesn't really count on that and keep in mind that RINVOC was on the product that was lesser impacted by COVID. And so there's not really are in that forecast. And then Randall on your second question, I would say we absolutely agree with your point of view. I think eye care is a very attractive The kinds of markets that I think we look for and that we're very best at is where there are specialized physicians who really drive the use of medications based on the clinical data and being able to restate markets and improve standard of care in those markets. And certainly eye care, I think, fits that description. So we would have a strong appetite to look for opportunities and we are looking for opportunities now that we could add to that eye care business to be able to drive growth. Obviously, with STASIS, as Rob indicated in his formal remarks, we've built in a half a year. That's still an unknown of when that product will go generic or if it will go generic. But I think even aside from that regardless of what happens with RESTASIS, longer term this is an area that we would have interest in. If we could find the right kind of assets To add to it, we would enthusiastically do that. Thanks, Randall. Operator, next question please. And our next question is from Chris Schott from JPMorgan. Great. Thanks so much for the questions. Can you just elaborate a little bit more on aesthetics and maybe Some of the learnings you've had in that franchise since you acquired it. Have there been changes in the way you think about approaching the business commercially or levels of investment? I'm I'm trying to get my hands around that high single digit growth over time. It does seem healthier than the Street have been anticipating. I'm just trying to get a little bit more Color of what you're seeing in the market that gets you confidence in that? And then my second question was just on IMBRUVICA. The growth has slowed here a bit. Can you just elaborate a bit more on how much of this is is there any COVID related dynamics playing out here? How much of this is competitive? I'm just trying to sense of just how you're seeing the health of that franchise over time? Thanks so much. Yes. Chris, this is Rick. So I'll cover the aesthetics question for you. I'd say as we've studied the aesthetics market and had an opportunity to be able to operate the business now for some time, I think we're even more enthusiastic about the long term ability to be able to grow this market. I would say some of the areas that were a bit of a surprise to us is the responsiveness of this market to patient activation. And I would say that the strategy that we've put in place is one where we are funding the business participants are on a continuous basis at a high level to achieve are in the range of the level of activation that we're looking for and we think that will certainly you can see the response like as an example in BOTOX Already we're seeing a very aggressive response and being able to grow the market. You saw the Botox cosmetic grew in the 4th quarter 9%, I would expect that we can continue to drive that level of growth. And as part of Legacy Allergan, I think it was much more episodic in the way this was funded quarter to that's of interest to us is, I think this is a market where you can drive significant innovation if you fund that innovation in a way, participants again on a more continuous basis and advance those programs more aggressively and have a well thought out are in the strategic roadmap as to where you're trying to drive some of these markets. As Mike mentioned in his comments, our goal is to basically try to advance the level of performance of the toxin market significantly over time And the same with the filler market. There are certainly things that we can do to expand the areas that you can use fillers Both within the U. S. And globally and that's a significant opportunity. But long term, we think there's an opportunity to take of the biologic expertise that we have here at AbbVie and create more biologically active and other kinds of characteristics that will improve skin quality. And we think that will be if we're successful, we think that will be a significant opportunity will be participating in the Q4 2020 earnings conference call. And then the last thing I'd say is the geographic footprint that AbbVie has. We obviously have a very broad geographic footprint And the structure that we've set up is this totally integrated global unit that we're operating the aesthetics business really gives them the freedom A good case in point is, I believe it was in the Q4, we funded a significant expansion in China, to be able to increase the sales force there to be able to drive it more deeply into a broader set of the cities in China to the next level down and we're already seeing the benefits of that. China is already back to growing much like it did pre COVID. So I think there's a lot of attractive attributes about that. On IMBRUVICA, maybe Jeff and I will tag team on that one. What we're clearly seeing is that COVID is having an impact on patient starts in CLL. We're not only seeing it in IMBRUVICA, but we're seeing it in VENCLEXTA as well. And it's somewhat logical when you think about it. These oncology practices are trying to reduce density, and CLL is a disease where you in many patients' cases, you can delay therapy for some period of time. I would say that's the vast majority of it. When we look at when I look at the overall share and the reason why I'm talking about the overall share is VENCLEXTA is now gaining a significant level of momentum in in this market as well. When I look at our overall shares in first line, second line or third line, we continue to have the Dominant share position. And I'd say probably partially to your question, if I look at Calquence, I'd say it's performing at the expectation we have. I think the first line share is about 12%, Slightly higher in second line, maybe 14% and I don't recall the 3rd line share. Very similar. Yes. So I'd say that's within the range of what we saw with MCL, it's within the range of what we had modeled. So it's not really a competitive issue that we're dealing with. It's more a function of getting those patients start back up to the level they were before. Anything you want to add, Jeff? No, I think Rick that's exactly right. The only thing I would say in terms of our forecast, we think that in the ask, we think that in the first part of the year, the early part of the year, we'll continue to see some suppression in the new patient starts. But we hit the as we hit the second and third quarter, we anticipate that the market will recover. Thanks, Chris. Operator, next question please. And our next question is from Tim Anderson from Wolfe Research. Hi. Can you hear me? This is Nicole Mahar on for Tim Anderson. What does your long term assume for potential austerity measures in the ex U. S. Countries in 2021 and beyond, similar to what we saw in the post-two thousand and Yes, Nicole, this is Rick. I think this is something we've had experience with. If you think about The economic crisis, I thought we saw a similar kind of uptick in price erosion outside the United States and in particular, I'd say in the European Union, we have factored in a reasonable assumption into our guidance for are in the 20 1, so I feel good about that. I think it is reflective of what we're likely to see. So I think we're covered from that perspective. And our next question is from Steve Scala from Cowen. Thank you. Two questions. EBI delivered 1 of the first completely clean and compelling quarters in pharma this cycle and I have to believe has something in reserve for upside as the year unfolds. I'm sure you monitor So beyond the AbbVie management team itself, what about your business do you think is allowing you to execute in this way? Would you attribute are participating mainly to the products themselves, payer strategies, geographic mix or is there something else? And the second question is the ongoing VRAYLAR are Phase 3 trials utilized doses up to 3 milligrams, while the successful prior trials were up to 4.5 milligrams. So why were the doses lowered in the 1st place? And, what placebo response mitigation methods are included in the Thank you. Okay, Steve, this is Rick. I'll cover the first one and Mike can cover the second one. I would say, 1st and foremost, we are a very disciplined organization in how we approach execution in the market Probably even to some extent obsessively plan and then go out and try to execute against that plan. And I think in times of difficulties, that kind of discipline tends to demonstrate itself, And that's when you see the biggest differences. So that's not to say other people don't do it like that. I'm not that familiar with how others operate, but I know how we operate and I know how we contingency plan, and we look at, okay, if that doesn't work, what are we going to do? And we do that ahead of time. If that doesn't work, what are we going to do? And I think that kind of contingency planning and focus on execution is helpful. I'd say the second thing is, if I look at our business, We put a strategy in place and I feel very good about how the business is performing overall. I mean, I would say the business is firing on all cylinders. And you can look at our 4th quarter performance, to your point. And I think it demonstrates that. And you can look at our guidance and it demonstrates Almost every single product area is performing at or above, most of them above what consensus was and that I think is another indicator for you. And we have a much more diverse business now. We have 4 major growth platforms that are helping us drive that level of growth, our new product launches are doing extremely well. Obviously, SKYRIZI and RINVOC are, but I'd also say, UBRELVI and VALAR are performing extremely well. And the pipeline, I would say one of the things that gives me the most confidence is when I look at the pipeline behind that, that's designed to be able to drive our long term growth, because one of the things that we focus on is We're going to make sure that we continue to drive this business to perform at the level it's performing over the long term. And so if I look at the SKYRIZI and WINVOC R and D execution around the follow on indications, it's been nothing less than spectacular, both from a are in a timing standpoint and the kind of data that we have been able to produce. When I look at our Humach strategy, we've had a very disciplined strategy there $6,600,000,000 as we said, we're going to grow at double digits. Over the long term, what's going to allow us to do that? Well, Obviously, IMBRUVICA is going to continue to drive share, VENCLEXTA is going to continue to drive share in CLL, but VENCLEXTA has indication expansions in the area potential in the areas like T1114 and a broader AML population And several other areas. Then I look at nabetoclax, we should get that product approved and give us an opportunity in myelofibrosis. And then you look at Genmab and you look at our CD47, those will all allow us to ensure that we can sustain that growth profile over the long term. From neuroscience, same thing. Atogepant will allow us to expand into the broader migraine population. So I feel very good about what we put in place and our ability to execute against that. So I think there's not one silver bullet that I can point to. I think it's all of those things. Certainly, our ability in market access has helped a lot in the U. S. I'd say We're very good at that. But you have to have the right kinds of assets in order to execute that. You have to have assets that are differentiated like SKYRIZI and So it's the combination of all of that that gives you this performance and gives you the long term sustainable ability to deliver that kind and I feel awfully good about where we are. So this is Mike. I'll take the VRAYLAR question. I believe you're talking about the ongoing and what I would say there is that the dose selection was based on everything we know about dose response, not only from the prior MDD studies, but across are in the program and we've done a deep dive into that and we're confident that we're at a dose that ought to have optimal effect in these indications in this indication. With respect to your question about placebo response rate, managing or controlling the placebo response is extremely important in all studies, but particularly in depression and other studies in psychiatry. And I would say that there are many different approaches that are taken that are complementary to each other. The first and most important is appropriate site selection. One has to select are participating in the appropriate patient population with experienced investigators, who are also experienced evaluators in a are in clinical trial setting and that's one of the most important things to getting high quality data to determine whether a drug works. The next element has with investigator training, investigator manuals, protocol design and also with respect to inclusion and exclusion criteria to make sure that you have a patient population that is representative of the population that you would expect to treat post registration study successful and we've taken a look at all of these things. We've taken a look at the blinded aggregate data and we feel good that the measures that we have in place will effectively control the placebo response and give us a quality readout. Thanks, Steve. Operator, next question please. Thank you. Our next question is from Gary Nachman from BMO Capital Markets. Hi, good morning. Could you talk about how much more you plan on investing behind the neuroscience franchise to accelerate growth there To get to the long term targets, you talked about like the $4,000,000,000 in Bralar even without MDD and how you see the long term potential in BOTOX Therapeutic? And then how are you thinking about the launch for atogepant later this year? And how will you leverage the work that you've done so far with UBRELVI? How do you think that product will take off in the migraine market? Thank you. Well, I'd say on the neuroscience investment, I mean, we obviously have a very broad neuroscience investment. I mean we have a significant investment from an R and D standpoint and in disease modifying approaches for a number of different neurological diseases that Mike has talked about and mentioned in his comments earlier. So I'd say we have a are participating in BAYLAR to continue to expand that asset. Again, our goal will be to invest in these areas where you can get maximum capture market share capture. I think if you look at Vaylor and you look at the projections that we've made over time, if you look at the sequential, year over year dollar growth of that business, that's how you get to that number. You can and basically we've been able to sustain that. We expect to continue to sustain. Has relatively low market share, but that's not unusual in this market because there's a lot of generic products that will be able to drive the maximum level of profitable share as we do in any other segment that we're in. Same thing on BOTOX Therapeutics. Obviously, we have R and D programs in there to continue to expand the opportunities in therapeutics. Anything you want to add from an investment standpoint, Rob? I think if you look at the overall portfolio, we've detailed out what we expect for VRAYLAR and that's without the additional indication we think we can get to approaching $4,000,000,000 When you look at the migraine portfolio, peak sales are greater than 1,000,000,000 For both the UBRELVI and atogepant, we have 951 in the pipeline that we think can be a significant contributor. Obviously, Botox Therapeutics continue to grow. So We feel pretty good about the portfolio we have and that double digit growth outlook is supported by a number of very promising assets. Hi, it's Jeff. I'll take the second question on etogepant. I think first, the asset itself is very, very attractive. And when you look at the response on the migraine free days at the 10 to 60 milligram, it's really impressive data, very impressive data as this very strong oral. And so we think that we can come at this in a couple of different ways. Obviously, you highlighted the leveraging will actually carry both UBRELVI and etogepant in their call plan to really leverage the knowledge of a very established sales force and as well as focus on the big primary care writers that see a lot of the migraine sufferers. So this is an important dynamic that we'll be able to leverage when we get into the market towards the end of the year. Also, we're looking at the ability to see how you look on the back end of the migraine journey. So patients are BOTOX Therapeutics for example, which is very substantial. It's the leading in play share for chronic migraine. But many of those patients don't get full efficacy results. So ultimately, the combination of BOTOX plus etogepant as a way to get really migraine freedom in the toughest patients is another area over the long term that we think can leverage these are participating in the middle, oral for episodic and chronic We think it's a nice portfolio that we can commercially manage over time to hit our ambitions that Rob described. Thanks, Gary. Operator, next question please. Thank you. And our next question is from Navin Jacob from UBS. Hi, Naveen from UBS. Thanks for taking the question. So first on the ADC, steroid ADC Just wanted to get an update there. It's been, I believe you said delayed for COVID-nineteen. Do you still believe that this approach can lead to success in for refractory RA or other inflammatory conditions. Just wondering about your Confidence in this technology, understanding it's still early in development. And then secondly, as it relates to Your current state of affairs with RINVOK and SKYRIZI, could you remind us of what the current in play market share for Okay. This is Mike. I'll take your first question. ABBV-one hundred and fifty four, our TNF starting conjugate has not been delayed because of COVID. There were some delays in other early immunology programs, our CD40 and our ROR gamma T program experienced modest delays, but 154 did not. As we said at the time The COVID peak over the course of last summer, there were a small number of studies that we delayed initiation and delayed enrollment. The programs that I'm talking about, TD40 and ROR Gamma T were impacted modestly in that time period, but 154 was not. So that remains on track. We remain confident in it. We have selected 154 as the agent to go forward. Remember that we had 2, 3,373 and And then today we're now saying that we will also be studying Phase 2 Crohn's disease As well as polymyalgia rheumatica. And so that's an important set of indications. It covers a wide range of opportunities. RA and Crohn's disease are areas where we're very active. PMR, polymyalgia rheumatica are in a new area where there's not a lot of therapeutics. Unfortunately, it's a well established area in medicine, but there's very little in terms of treatment for these patients. They have considerable pain and suffering from their condition, and it's particularly steroid responsive. So we think it is are very attractive target for a steroid ADC approach. The 154 remains on track and we continue to have confidence in it. Thanks, Mike. It's Jeff. I'll take the in place share. So if we look at the psoriasis market and SKYRIZI, We have on our latest data point, 33% of in place share, which is of course is new patients coming in or newly switched patients. If you look at the total AbbVie share, it's approximately 45%. So very remarkable when you add HUMIRA plus SKYRIZI in the dermatology space. If you look at the RA space, our latest data points are between 15% 16% in in place share for Rinvoken RA and that's basically neck and neck with HUMIRA, so for a total AbbVie share of roughly a third of the This is Rick. The only thing I'd add on that is when you look at that SKYRIZI 33% in place share, it's almost double what the next closest competitor is. I mean, it's impressive the gap between SKYRIZI and the number 2 player. And the other thing is, as these brands get more experience in the market, We'll also start to talk about the total TRx share and I think SKYRIZI is at that point now. I think its total TRx share now is 14%, 13 point 14%, something like that. That's right. And that's pretty impressive for this short period of time. I think it's close to number 2 in the market in TRx share. So they're both doing very, very well. Thanks, Naveen. Operator, next question please. And the next question is from Chris Raymond from Piper Sandler. Thanks. Just a couple of questions. First on the relationship with BI on SKYRIZI. We had a few inbound questions on the treatment of the royalty. And I know you've answered this question a little bit in the past, but also just noticing the big non cash GAAP charge you took this quarter, you back out of non GAAP earnings. So, I know you have described accounting for this as a business combination, But can you maybe give a little bit more color on the rationale and the accounting behind that non cash charge? And then is there also some threshold number or other event And then on AbbVie 951, We picked up a decent amount of KOL excitement around this asset in Parkinson's. I know Phase 3 is expected later this year, But I wonder if you could maybe talk about the launch, your launch expectations on this and maybe contrast it to the duodopa experience. Just from our feedback, it seems like this could expand the addressable PD population pretty sizably. And I don't know, Rick, maybe frame how this sort of factors into your long range, dollars 10,000,000,000 neuroscience guidance? Thanks. Yes. Chris, I'll take your question on contingent consideration. So yes, we did account for this as a business combination. So that means each quarter we do mark to market the fair value of the future milestone royalty payments. And you did see us take a fair value write up this quarter based on the higher sales outlook as we communicated during the Immunology Day event in December and then you in the guidance provided today, obviously, the outlook for SKYRIZI continues to increase and so we're recognizing that liability going forward. We also take into consideration because it's a fair value measure what the market is assuming. So it's not just our own forecast, but it's also what Street expectations are. And those have also increased As we've seen a very nice ramp, we're starting to see obviously the confidence from the Street increase and that's translated into a higher outlook for SKYRIZI which then translates into higher are in the range of potential royalties. One of the reasons I wanted to stress also on the free cash flow in my remarks today is because there is some confusion over That's how we account for it, but it's important to keep in mind that when I talk about free cash flow of $21,000,000,000 this year, that accounts for the royalty payments of 2BI. And so you can look at it a few different ways. You can look at it from a you can track the consideration accretion that we're recording and the liability on the balance sheet as So we would not be going back. We made a determination as a business combination. We don't we should not anticipate that we would reverse that, But we'll provide obviously more clarity on what those royalties look like going forward given the size of the asset. I mean, I'd also say in that time period when are in that fashion. It's since been changed going forward, but the window at which we that occurred, that was The required accounting treatment. So on number 2, Jeff and I will cover number 2. I'll give you sort of a high level Look and then Jeff maybe give you more specificity around it. If you look at duodopa, I mean this is a therapy that has absolutely phenomenal efficacy. You can see these patients who cannot move really And you turn on the pump and you start giving them the drug and within a very short period of time they regain their motion. The challenge is, it's a very difficult treatment to for the patient to basically deal with and the caregiver to deal with on a long term sustainable basis. You have to do surgery, insert a G tube, you have to maintain that G tube open. So that does somewhat limit the population that is able to use it. And so we view this as a way to significantly expand the market. Jeff is obviously far more familiar with it. So I'll let him give you a little more specifics, but that's the general concept. I think this could be a significant, one, it could be a significant treatment for these patients who need This kind of therapy and 2, I think you could expand the market pretty significantly. Yes, I think just to add on that Rick, We hear the same thing from our KOLs. They're very, very encouraged. And with the perspective, you look at DUOP or DUADOPA, right, you have to do the JPEG surgery, you have challenges with the size of the pump. Nonetheless, it's so remarkable that we do get that levels of sales. So If I give you some perspective on the market, if you look at the advanced Parkinson disease market, 90% of it is really old generic orals where the patients just have to take more and more oral medication before they can have participants are in a position to be able to get are in the range of 2,000,000,000,000 of the range of 2,000,000,000 of the just sort of move from a more convenient way, a simple way for a neurologist to get a more advanced therapy without doing a procedure, Whether it's brain surgery or the GI surgery, we think we can start to move upstream into that 90% of the really non workable oral segment. So we are encouraged at the recent feedback from our KOLs and our study are anticipating and planning for our launch in the coming years. Thanks, Chris. Operator, next question please. And our next question is from Gregg Gilbert from Truist. Yes. Hi. I was curious if your BOTOX Cosmetic guidance in the U. S. Assumes that Jeuveau is on the market or off the market this year? And then longer term, curious about BOTOX Cosmetic Many years ago, Allergan started to explore the idea of separating the 2 from a reimbursement and pricing standpoint. I believe it involved litigation with the government at one point. But I don't know if that's still ongoing or if you're still thinking through that possibility since it has implications longer term about keeping those assets together possibly spinning aesthetics someday if conditions warrant. Thank you. So I don't know that we're going to specifically comment on what we've assumed as it relates to the Jeuveau. I just don't think it's probably appropriate. First of all, it's not that large of a product to begin with, so it wouldn't have a material impact on BOTOX I'd say on the second question, I will tell you emphatically, we have no interest in spinning off the aesthetics business. We have a program in place where we manage The differences between the reimbursement associated with BOTOX Therapeutics and The cash paid portion of the cosmetics business has been in place for quite some time. We're quite comfortable with that we can manage it quite effectively. It's an important thing that you track carefully, but we have a good system in place to be able to do that. Thanks, Greg. Operator, next question please. Our next question is from Geoff Meacham from Bank of America. Hey, guys. It's Aspen on for Jeff. Thanks so much for the questions. A couple of quick ones. So In the context of the Xeljanz data, do you guys have an early view from the field as to whether docs are differentiating And then quickly on the mid to early Yes, I'll take the early view from the field. I think it's important, at least we've heard from our teams that some of this data is not really new. It was available in the interim analysis that helped led to the label that we have. And so really the early reports from our field, particularly from the KOLs and the big prescribers is a a little bit of a shoulder shrug, like not that new news. I would say from the standpoint of the comparison between RINVOC and XELJANZ. I mean, the if you look at the penetration of the JAK class really across the world and particularly in the U. S, There has been a significant lift that we just talked about with that in place share. And so really what we're hearing from the field and from the prescribers are they view RINVOC as a differentiated asset in terms of the overall risk benefit and that's why that share is moving so quickly. And so that's really what we hear in the early days from our teams that are connected to those big rheumatologists. So this is Mike. I'll take the question on the hemonc portfolio mid stage and newer technologies. What I would say is there is a lot going on in our hemonc are in the mid stage. I think you'll see a focus on T cell redirection, which is of course a newer are participating in the technology and I think a very attractive approach to harness the immune system to control these cancers and you see good progress with are CD3xCD20 and our BCMA T cell redirecting therapies. And so that is clearly an area of focus for us now and I will continue to be in the future. With respect to gene therapy, gene therapy is not a single thing. It can be used in different ways. Gene replacement is not an area that we've been focused on. Gene delivery is an enabling technology for other therapeutic approaches like cell based therapies and we have early programs in cell based therapies in hemonc and in other areas, are in the range of solid tumor oncology, and potentially other areas in the future. And so that's something that we are keeping a close eye on and making sure that we have access to the enabling technologies we need to prosecute those targets. I think that for those sorts of approaches, we're probably 1 generation away from are broadly applicable, but we are exploring possibilities that we think can fulfill that next generation need. And so we are keeping a broad eye and are essentially therapeutically agnostic. What I mean by that is we look are the best tool to do the job. We don't find a tool, and then figure out how to use it. And so in each of these cases, we're going after strong biology. We're going after things that we think will raise the bar on the standard of care and I think a number of the newer technologies that I mentioned fit that bill. Thanks, Aspen. Operator, we have time for one final question. Thank you. Our final question today is from Luisa Hector from Berenberg. Hello. Thank you for taking my questions. And thank you for the guidance on the cost lines. And I just wondered given that we have Various layers to consider with COVID and then the Allergan inclusion and the synergies. Could you comment on the implied cost ratios for 2021 and how representative these are of the combined entity? And is there anything else we should be thinking about for those lines as we look out to 2022 COVID related savings, maybe sticky, maybe ones that may reverse. And could you tell us at the level of synergies that you achieved already in 2020. Thank you. Hi, Luisa, this is Rob. So I think now that we have our first full year with combined company and you're looking at these profiles, I think you can assume they're indicative of in the range of what you'd expect going forward. And That is probably a cleaner guide than say when you have a partial year like we had in 2020. As it relates to the synergies we had achieved in 2020, we achieved about $600,000,000 of synergies, about $400,000,000 that was in R and D and $200,000,000 in SG and A. And you see we've now increased that to $1,700,000,000 in 20 are in the range of $1,000,000 with about a little bit roughly half of that coming from R and D about in the 40% range SG and A and about 10% coming from cost of goods. Thanks, Luisa. And that concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors. Atabvie.com. Thanks again for joining us. Thank you. This does conclude today's conference. You may disconnect at this time.