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Presentation

AbbVie Inc. beats earnings expectations. Reported EPS is $2.46, expectations were $2.38.

Operator: Welcome to the AbbVie First Quarter 2025 Earnings Conference Call. All participants will be able to listen only until the question and answer portion of this call. As a reminder, this call is being recorded. I would now like to introduce Ms. Shea, Senior Vice President, Investor Relations.

Liz Shea: Good morning, and thanks for joining us. Also on the call with me today are Rob Michael, Chief Executive Officer Jeff Stewart, Executive Vice President, Chief Commercial Officer Roopal Thakkar, Executive Vice President, Research and Development, Chief Scientific Officer and Scott Reents, Executive Vice President, Chief Financial Officer. Before we get started, I’ll note that some statements we make today may be considered forward-looking statements based on our current expectations. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in our forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings.

AbbVie undertakes no obligation to update these forward-looking statements, except as required by law. On today’s conference call, non-GAAP financial measures will be used to help investors understand AbbVie’s business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website. Following our prepared remarks, we’ll take your questions. So with that, I’ll turn the call over to Rob.

Rob Michael: Thank you, Liz. Good morning, everyone, and thank you for joining us. AbbVie is off to an excellent start to the year with first quarter results exceeding expectations across several of our therapeutic areas. We also continued to advance our promising internal pipeline and add external opportunities to further strengthen our business and long term outlook. Turning to our first quarter performance, we delivered adjusted earnings per share of $2.46 which is $0.10 above our guidance midpoint. Total net revenues were more than $13.3 billion nearly $550 million ahead of our expectations. I’m especially pleased with the performance of our ex-Humira platform, which delivered robust sales growth of more than 21%. Immunology, neuroscience, oncology, and anesthetics are all performing at or above our expectations.

And we are well positioned to exceed our previous peak revenue in just the second full year following the US Humira LOE. Based on this strong performance, we are raising our full year adjusted earnings per share guidance by $0.10 and now expect adjusted EPS between $12.09 and $12.29. As you are aware, there is speculation that sectoral tariffs could be forthcoming. Any related impact from these tariffs as well as other potential new or reciprocal tariffs have not been contemplated in our guidance. To the extent there is an impact, we believe it would be in line with our peers, given that AbbVie has an extensive manufacturing presence in the United States, including API, biologics, toxins and small molecules. And over the next decade, we anticipate investing more than $10 billion of capital in the US to support our volume growth and our expansion into new areas such as obesity.

Turning back to our performance, I’m very pleased with the excellent progress we are making with several pipeline programs that have the potential to be meaningful sources of growth. These include Lutikizumab across several immunology indications, 383 in multiple myeloma and our next generation ADCs, including TmAb A for several solid tumor types and 706 for small cell lung cancer. We also continue to add depth to our pipeline with strategic transactions that can help drive growth in the next decade. This includes the recent acquisition of Nimble Therapeutics to expand our immunology portfolio with oral peptides as well as the license agreement with Gubra to develop an amylin analog for the treatment of obesity. Obesity represents a significant global health concern with high unmet need.

This market will continue to evolve with improved offerings, and we believe our program with Gubra has the potential to deliver a differentiated asset. Going forward, we plan to invest further in obesity along with other opportunities across our existing five key growth areas. In summary, the fundamentals of our business are strong and we are well positioned for the long term. AbbVie has a clear runway to growth for at least the next eight years, including a high single digit revenue CAGR through 2029. With that, I’ll turn the call over to Jeff for additional comments on our commercial highlights. Jeff?

Jeff Stewart: Thank you, Rob. I’ll start with the quarterly results for immunology, which delivered total revenues of more than $6.2 billion exceeding our expectations. Skyrizi and Rinvoq are performing exceptionally well, contributing $5.1 billion in combined sales this quarter, reflecting growth of more than 65%. I’m especially encouraged with our portfolio performance across IBD, where Skyrizi and Rinvoq continue to capture significant share given their efficacy, safety and dosing profiles. In Crohn’s disease, which is roughly two thirds of the overall IBD market, these two treatments together are capturing roughly one out of every two in play patients in the US and total prescription share is now in the mid-teens. Internationally, our Crohn’s portfolio has achieved in-play leadership in nearly a dozen key countries.

In ulcerative colitis, Skyrizi has already achieved the leading in-play share in the US following the launch in the second half of last year. Skyrizi and Rinvoq together are now capturing one out of every three in-play UC patients, a very strong leadership position for AbbVie. We are also seeing strong momentum across indications in dermatology and rheumatology as well. For Skyrizi, we continue to gain share in psoriatic disease, where we have achieved the leading in-play share of new and switching patients in nearly 30 countries and see substantial room for total share growth. For Rinvoq, we are seeing increasing prescription demand globally across each of the room indications as well as additional momentum in atopic dermatitis, the fastest growing immunology market, where we have two compelling head to head studies versus Dupixent.

We are also preparing for the global launch of giant cell arteritis, another new source of growth for Rinvoq. We received European approval earlier this month and expect FDA approval soon. The addition of this indication further rounds out Rinvoq’s rheumatology label and gives patients with GCA access to a new compelling oral therapeutic option. Overall, Skyrizi and Rinvoq are demonstrating impressive results across all of their approved indications, and we will be raising our full year sales guidance for both products. Turning now to Humira, which delivered global sales of $1.1 billion down 49.5% on an operational basis, below our expectations, primarily due to faster share erosion from biosimilar competition as well as further molecule compression in the US.

As a result, we will be lowering our full year sales guidance for US Humira. Moving to Oncology, where total revenues were $1.6 billion exceeding our expectations. Imbruvica global sales were $738 million down 11.9%, reflecting competitive dynamics in CLL. Venclexta global revenues were $665 million up 12.3% on an operational basis. This strong performance reflects continued momentum in CLL as well as shared leadership in frontline AML among patients who are ineligible for intensive induction chemotherapy. We also have an emerging commercial portfolio in solid tumors. This includes Elahere, our leading ADC for ovarian cancer with global sales of $179 million as well as Teliso-V, a potential new medicine for late line non-small cell lung cancer patients with US Regulatory approval and commercialization expected in the next couple of months.

Teliso-V will be supported by a dedicated sales force and medical affairs team, which will target academic and community cancer treatment centers to reinforce the importance of c-Met as a biomarker and build relationships that support our emerging solid tumor franchise. Turning now to aesthetics, which delivered global sales of $1.1 billion down 10.2% on an operational basis. This was in line with our expectations. BOTOX Cosmetic global revenues were $556 million down 10.7% on an operational basis and Juvederm sales were $231 million down 20% on an operational basis. As we have seen over the last several quarters, economic headwinds have continued to impact market conditions. Based on the trends we are seeing, including a decline in recent consumer sentiment, we are moderating our assumptions for category growth globally and adjusting our full year sales guidance for aesthetics accordingly.

While near term aesthetics market conditions remain challenging, the long term prospects for the category remain attractive, given high consumer interest and low penetration rates for facial injectables. I’m particularly excited about BoNT/E, our fast acting, short duration toxin, which we recently submitted for US Regulatory review. This first in class toxin represents a distinctive innovation for the treatment of glabellar lines and has the potential to be an important catalyst for new patient activation into the facial aesthetics category. We anticipate commercialization next year. Moving now to neuroscience, where total revenues were approximately $2.3 billion up 17% on an operational basis, with all key products exceeding our expectations.

VRAYLAR global sales were $765 million up 10.3%, reflecting share capture in both Bipolar I disorder and adjunctive major depression. We continue to get very positive feedback on VRAYLAR’s profile in terms of dosing flexibility, low sedation and the ability to treat a full spectrum of symptoms. We are very competitively positioned with our migraine portfolio, where all three of our therapies continue to deliver double digit operational growth. BOTOX Therapeutic global revenues were $866 million, up 17%. UBRELVY global sales were $240 million up 18%. And QLIPTA global revenues were $193 million, up 48.3%. And in Parkinson’s disease, VYALEV global sales were $63 million reflecting continued strong uptake in Japan and Europe. We are also pleased with the early launch feedback in the US, where revenues are expected to ramp gradually over the next couple of quarters as we work to establish the appropriate Medicare coverage and benefit determination.

Lastly, we are making excellent progress with the development of Tavapadon in Parkinson’s disease. This first in class D1D5 selective dopamine agonist has a favorable benefit risk profile and the potential to differentiate in several areas, such as sedation and impulse control. Tavapadon could potentially be used as a monotherapy for early Parkinson’s disease as well as an adjunctive therapy to levodopa for more advanced patients, which would be a complementary addition to our existing PD portfolio with VYALEV and DUOPA. We expect to submit Tavapadon for regulatory review later this year with commercialization expected in 2026. Overall, I’m extremely pleased with the execution and strong momentum across our commercial portfolio. And with that, I’ll turn the call over to Roopal for comments on our R&D highlights.

Roopal Thakkar: Thank you, Jeff. I will start with immunology. We received European approval for Rinvoq in GCA and expect FDA approval soon. We remain on track for several important data readouts this year as well including Phase III data for Rinvoq in alopecia areata and vitiligo and data from Skyrizi’s head to head study in psoriasis versus SOTIQ2 [ph]. Our early and mid-stage immunology pipeline continues to advance. Recent initiations include a Phase II study evaluating Skyrizi in combination with Lutikizumab in psoriatic arthritis and a Phase I study for our next generation TL1A antibody, which is designed to have less frequent dosing compared to other TL1As in development and will be evaluated in combination with Skyrizi in both Crohn’s disease and ulcerative colitis.

This summer, we will start a Phase II study evaluating a combination of Lutikizumab and our anti CD40 Ravagalimab in rheumatoid arthritis. Moving to our ADCs and oncology, we anticipate accelerated approval in the second quarter for Teliso-V as a monotherapy in previously treated non-squamous non-small cell lung cancer with high c-Met expression. This is a segment of lung cancer with high unmet need and when approved, Teliso-V will be the first c-Met directed ADC for these patients. We’re also making good progress with tmAb A, our next generation c-Met ADC, a Phase 2 dose optimization study evaluating tmAb A with a PD-1 inhibitor as a frontline combination therapy in EGFR wild type non-small cell lung cancer was recently initiated. In the EGFR mutant segment, we plan to initiate studies for tmAb A as a monotherapy in the second line setting and in combination with Osimertinib in the first line setting.

Preliminary Phase 1 results will be presented at the upcoming ASCO meeting. This year, Phase 2 data from our CRC study evaluating tmAb A in combination with Bevacizumab will be available, which could enable a Phase 3 study in an all comers population. Progress also continues with ABBV-706 in small cell lung cancer. Recall, this ADC utilizes the same topo warhead and linker technology as tmAb A, but with an antibody that targets SEZ6. In the Phase 1 study, 706 was efficacious across doses with an objective response rate of approximately 60% in patients with relapsed or refractory small cell lung cancer. Based on maturing duration of response and progression free survival data, we plan to advance 706 into a trial in a relapsed refractory population and a dose optimization study in combination with a PD-L1 in the frontline with the goal of establishing a chemo sparing regimen as a new standard of care.

In the area of hematologic oncology, the data readout remains on track for the Phase 3 VENCLEXTA MDS trial. And if positive, our regulatory submissions would follow later in the year. A regulatory submission for PIVEC in BPDCN is also planned for this year. We continue to make good progress with our BCMA CD3 bispecific ABBV-383 in multiple myeloma. Recruitment is going well in the Phase 3 monotherapy study in later lines, and we are on track to be fully enrolled by early next year. Additionally, we continue to evaluate 383 in various combinations, including with Pomalyst, Revlimid, DARZALEX and Iverdemine [ph]. We’ll begin seeing data from these combinations next year, which could enable Phase 3 lines of therapy. Now moving to neuroscience.

Interim data from the long term TEMPO-4 Phase 3 study continued to support Tavapadon’s favorable benefit risk profile. Efficacy in both early and advanced Parkinson’s patients was maintained beyond a year and the safety profile was consistent with that observed in the previous Phase III studies with no new safety concerns identified. Rates of adverse events of special interest remained low with impulse control disorder and peripheral edema less than 1%, dyskinesia approximately 2% and sedation less than 5%. These results underscored Tavapadon’s potential to become an important new treatment option for patients with Parkinson’s disease. Our regulatory application is planned for later in the year. Moving to other areas of our pipeline. In aesthetics, the regulatory application for our rapid onset short acting toxin BoNT/E was recently submitted.

We also began the clinical program to evaluate co administration of BoNT/E and BOTOX, which has the potential to be co-formulated as a novel product, offering the combined benefits of rapid onset and Botox like duration. In obesity, our partner, Gubra recently announced positive interim results from the first part of a multiple ascending dose study for our long acting amylin analog ABBV-295. This initial phase of the study tested one and two milligrams dosed once weekly for six weeks in healthy, lean and overweight patients. The study showed 295 performed well, demonstrating a dose dependent mean weight loss compared to placebo and a tolerability profile consistent with the results from the single ascending dose study. Mean weight loss in the two milligram cohort, which had a mean BMI of 24 was 7.8% compared to a weight gain of 2% in the placebo arm on day 43.

The second phase of this study is ongoing and is evaluating higher doses in overweight and obese patients with 12 week dosing. Titration and longer dosing intervals will also be assessed. Full data from this part of the study are expected next year. To summarize, significant progress continues with our pipeline and we look forward to important data readouts, regulatory submissions and approvals throughout 2025. With that, I’ll turn the call over to Scott.

Scott Reents: Starting with our first quarter results, we reported adjusted earnings per share of $2.46 which is $0.10 above our guidance midpoint. These results include a $0.13 unfavorable impact from acquired IPR&D expense. Total net revenues were more than $13.3 billion reflecting robust growth of 9.8% on an operational basis, excluding a 1.4% unfavorable impact from foreign exchange. Adjusted gross margin was 84.1% of sales. Adjusted R&D expense was 15.4% of sales and adjusted SG&A expense was 24.6% of sales. The adjusted operating margin ratio was 42.3% of sales, which includes a 1.9% unfavorable impact from acquired IPR&D expense. Net interest expense was $627 million. The adjusted tax rate was 14.2%. Turning to our financial outlook.

We are raising our full year adjusted earnings per share guidance to between $12.09 and $12.29. Please note that this guidance does not include an estimate for acquired IPR&D expense that may be incurred beyond the first quarter. We now expect total net revenues of approximately $59.7 billion an increase of $700 million. This reflects an estimated 0.6% unfavorable impact from foreign exchange on full year sales growth. This updated revenue forecast includes the following approximate assumptions for several of our key products. We now expect Skyrizi global revenues of $16.5 billion an increase of $600 million reflecting share gains in psoriasis and IBD. Rinvoq global sales of $8.2 billion, an increase of $300 million reflecting momentum across all approved indications.

US Humira revenues of $3.5 billion a decrease of $500 million reflecting higher erosion from biosimilar competition as well as further molecule compression. BOTOX Therapeutic global sales of $3.6 billion, an increase of $100 million reflecting growth in chronic migraine and other indications. Total oral CGRP revenues of $2.2 billion an increase of $100 million reflecting strong prescription demand. Imbruvica global revenues of $2.8 billion an increase of $100 million reflecting lower erosion. Venclexta global sales of $2.7 billion an increase of $100 million reflecting continued uptake in both CLL and AML across our key countries. And for aesthetics, we now expect global sales of $5.1 billion as we are moderating our assumptions for market growth globally.

As a result, total sales guidance for BOTOX and Juvederm will each be lower by roughly $100 million. Moving to the P&L for 2025, we continue to forecast full year adjusted gross margin of approximately 84% of sales and adjusted SG&A expense of approximately $13.2 billion. We now expect adjusted R&D expense of approximately $8.9 billion reflecting additional investment in our robust pipeline for long term growth. We also now anticipate an adjusted operating margin ratio of roughly 46.5% of sales, in line with our previous expectations after including the 0.4% unfavorable impact of acquired IPR&D expense incurred through the first quarter. Turning to the second quarter, we anticipate net revenues of approximately $15 billion. This reflects an estimated 0.3% unfavorable impact from foreign exchange on full year sales growth.

We are forecasting an adjusted operating margin ratio of roughly 49.5%. We expect adjusted earnings per share between $3.26 and $3.30 This guidance does not include acquired IPR&D expense that may be incurred in the quarter. Our guidance is based on current trade rules and does not reflect the impact of any additional trade policy shifts, including pharmaceutical sector tariffs. While it’s difficult to quantify in the absence of actual policy details, it’s worth noting any related unfavorability in 2025 would reflect a partial year given the timeline for 232 investigation. We are actively preparing for a number of potential scenarios and would expect to put into place mitigation strategies as we have more information. Relative to these dynamics, I would also highlight that AbbVie has a significant US manufacturing presence that spans 11 sites with plans to add four new manufacturing plants to our network, expanding our production for API, drug product, peptides and devices in the United States.

As we continue to invest and grow our US operational footprint, we believe a more competitive tax policy building on what was accomplished through 2017 tax reform will encourage a sustainable shift towards US Manufacturing over the long term. In closing, I’m very pleased with the excellent start to the year. We are demonstrating strong momentum across the portfolio and continue to be well positioned to deliver robust growth in 2025 and beyond. With that, I’ll turn the call back over to Liz.

Liz Shea: Thanks, Scott. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to one or two.

Operator: For our first question, we’ll go to the line of Chris Schott from JPMorgan. Please go ahead. Great. Thanks for the question and congrats on the results.

Chris Schott: Just two for me. Maybe first on Skyrizi and Rinvoq, obviously some big step up in the guidance here. Can you just elaborate a little bit more on which of the indications are most attributable to the upside we’re seeing right now? And maybe just talk a little bit about the competitive landscape, maybe particularly Tremfya more broadly launching in IBD and how you’re thinking about that dynamic? And then just my second question was on second immunology on Humira. Can you talk a bit more about how you’re thinking about the tail for Humira in light of some of the erosion that you’re seeing this year?

Scott Reents: Chris, this is Scott. I’ll start with kind of where we saw the increase attribute to for the various indications and I’ll turn to Jeff for your other questions. So we raised Skyrizi by $600 million to $16.5 billion and that split between $200 million in psoriatic and $400 million in IBD indications. And then with respect to Rinvoq, we raised that $300 million and that’s across all of the approved indications. So you can attribute that to $100 million for rheumatology, $100 million for derm and the remaining $100 million for IBD.

Jeff Stewart: Yes. Thanks, Chris. It’s Jeff. And maybe I’ll give some sense. We’re obviously very, very pleased with the performance of Skyrizi and Rinvoq in immunology as you’ve seen from the report. Maybe to give some perspective, it’s not uncommon to start to see in class competition. We’ve seen that in psoriasis. We’ve seen that across the board. And maybe I’ll just give a little bit of perspective over sort of the historical dynamics that we’ve seen with the IL-23 category. So for example, if you go back to like 2018, 2019 when the IL-23s were starting to come in psoriasis, the total patient share at that time in the early days was about 7% of the IL-23 class. Now it’s over 60%. And if we look at where IBD is, obviously, we launched first with Skyrizi and Crohn’s and everything’s recently launching here in UC, it’s about 7% of the total patient share in IBD.

So you can imagine as we start to watch what this category is going to mean to transform IBD, we remain very confident. It’s not a zero sum game. We feel very confident in our profile and what we’re able to deliver if we look across UC, if we look across our head to head data versus sequence versus the other trials. And so net net, we see very, very strong momentum across the board, regardless of competitors that may come in. And then my thoughts on the Humira tail. Again, as I highlighted and Scott highlighted in his remarks, we are seeing a bit of faster erosions as the biosimilar start to play out. And this is, of course, the third year of the biosimilar event. So it’s really not too surprising. We also do continue to see the molecule continue to erode.

So as we look and we don’t have full visibility and we’ll be monitoring the 26 access as we go throughout the year. We do expect it to step down again. Just makes sense. That will be the fourth full year. So we’ll have deeper visibility of that tail sometime over the course of the year. But as we said before, the real impact of the tail is when Humira does not have a meaningful headwind to our overall growth as a corporation. So we expect that to start to develop over that ’26 time period. Okay.

Operator: Next we’ll go to the line of Terence Flynn from Morgan Stanley. Please go ahead.

Terence Flynn: Great. Thanks so much. Congrats on the quarter. And maybe two questions for me as well. You alluded to some of the mitigation strategies you’re taking with respect to tariffs potentially. Could you just elaborate a little bit more there in terms of what that means for maybe inventory and then any contemplation on any changes to IP domiciling? And the second question I had is on the amylin program there. I know you talked a little bit about next steps, but was just wondering if you can elaborate in terms of how much higher you’re going on doses, what you’d expect that to translate to in efficacy and maybe the size of those cohorts, like how many more patients will we get in this next update?

Rob Michael: This is Rob. So Scott and I will handle your first question and Roopal will handle your second question. So just to, I think, back up and maybe talk about AbbVie’s manufacturing network and then I can mention how we’re thinking about potential mitigation. I think it’s important to know that we have a broad footprint that allows us to assure supply for our patients around the world. And that’s really why you’ve been able to see us avoid supply disruptions during events like the COVID pandemic. I mean and today, we have a robust US manufacturing network with more than 6,000 American workers across 11 sites. As I mentioned in my remarks, that includes manufacturing of API, biologics, toxins and small molecules. For example, our largest product Skyrizi is made in the US for the domestic market.

And given our expected volume growth and our expansion into areas like obesity, as I mentioned, we’ll continue increasing our US footprint with over $10 billion in planned capital investment during the next decade. In terms of potential mitigation, in the near term, we could take inventory management actions or secure alternate sources of API. We could also look at cost efficiencies and productivity initiatives as a source of mitigation, which we always do. I think what’s more challenging is trying to pass the tariff impacts to our customers, especially with penalties in the government channel and with existing contracts in the commercial setting. So I don’t see that as a viable source for mitigation. Longer term, we will add more US manufacturing capacity, which is part of the planned capital investment of over $10 billion.

So specific to 2025, we would look to mitigate the impact as much as possible with a combination of supply chain actions, cost efficiencies and any additional overperformance from our growth platform. But in the meantime, we have enough confidence in the momentum of our business to raise our guidance this year, which should be viewed as a positive.

Scott Reents: David, with respect to IP, IP has been looked at, I think, when people try to assess the impact of potential tariffs on our sector. IP has been looked at as kind of a proxy as to what that impact might be. And certainly directionally, think that is something that would be somewhat telling. That said, when we look at our profile overall, Rob mentioned the strong US presence that we have, but we don’t see our profile suggesting any sort of outsized impact for us as a company. The tax rate is something that you can look at, which is essentially when you think of the bookends of the minimum tax for earnings outside the US for tax earned in or income earned in the US that really kind of aligns with where that IP is structured.

And that blending of your income kind of produces generally directionally your tax rate. You see us being relatively in line with our peers. And so that suggests that we have a similar IP profile from an overall perspective. I’d also just quickly point out that sometimes with Allergan, as that was a company that we redomiciled back to the US, it was a foreign headquarter company. Recall that Allergan was a series of several companies that were put together over a few years. And those companies all have a significant US presence as well. So Allergan’s profile is not dissimilar from ours as a whole either. So I think when you think about that IP profile, it’s important from a tariff perspective. It’s also very important from a tax reform perspective.

There was a lot of progress made in leveling the playing field for US companies in 2017 tax reform that did a lot of good things and really helped invest in the US as well as can create a competitive environment for our companies. We see it as an important piece of building upon that tax reform to encourage further and long term, as I mentioned in my remarks, sustainable investment. So I see a tax reform initiative building on 2017 coupled with tariffs as something that will encourage US manufacturing over the long term, we feel very good about our profile right now.

Roopal Thakkar: Hi, it’s Roopal and I’ll answer the 295 question regarding the multiple ascending dose study. Currently, what the data you’ve seen were at 1 mg and 2 mg and we have the opportunity here in this study to go several fold higher than the 2 milligrams. And we also have the opportunity to go beyond six weeks, namely around 12 weeks before we get into formal Phase 2b, which I would say around next year, we would go quite a bit longer. The sample size, what you’ve seen here maybe a little bit larger because of the multiple ascending dose format here. We’ll see larger sample sizes once we get into the formal Phase 2b. The other opportunities here are also to look at titration at the 1 milligram or maybe even lower. We don’t see any adverse events beyond suppression of appetite.

So there’s an opportunity to be able to start low and start titrating up to doses quite a bit higher than 2 milligrams, but we’re open to watch this study and be flexible. The other important findings would be around muscle and bone. So those would be other things that will be evaluated as well as looking at dosing. The half-life is around 270 hours. So that could give us an opportunity to go twice a month and even potentially monthly. So all that will be captured in this data set. We expect to see some data next year and then that will allow us to best design a more formal Phase 2b study.

Operator: We’ll go to the line of Carter Gould from Cantor. Please go ahead.

Carter Gould: Good morning. Thanks for taking the question. Obviously, there’s been a lot of discussion around drug pricing kind of resurfacing and some rumblings around most favored nation kind of bubbling back to the surface. Wanted to get a sense understanding of your expectations and flexibility, if need be to take actions outside the US? And then maybe more of a commercial question, as we think about the potential co administration of BoNT/E and BOTOX, can you kind of help frame how you think that would impact the market? Is this something that could just grow the overall pie, move share, etc.? Any thoughts on that front would be appreciated.

Rob Michael: Thank you. Hey, Carter, it’s Rob. I’ll take your first question and Jeff will take the second question. I think as we’ve studied the environment, I mean, we are very supportive of a balanced approach that addresses affordability while also encouraging innovation. And you’ve seen many of our peers reinforcing the importance for the EU to properly value innovation, which we echo and would support any policies that encourage that outcome. That said, we hope the administration contemplates the harm that international reference pricing could have on US healthcare industry and future innovation. I think anything like price controls, cost increases or higher taxes just leaves less investment available across the industry to advance new innovative medicines.

That said, I’m very encouraged by the administration’s willingness to address the pill penalty in the IRA and is fixing that would support long term innovation in our industry. And so as we look at the push, I think, for the EU to more properly value the innovation is an absolute appropriate push. We’re encouraged by some of the policies that really support innovation. And Scott also talked about tax reform. And I think that’s an important lever as well as we think about what are the things that will drive investment in the US and drive more innovation. And I think if you just look at AbbVie as an example, we’ve invested over $5 billion of capital since tax reform in 2017. I mean that includes a new oncology research center in South San Francisco that includes Skyrizi manufacturing capabilities in the US, eye care capacity expansion in Waco, Texas and technology infrastructure upgrades across our footprint, just to name a few.

And importantly, as Scott mentioned, tax reform allowed us to acquire Allergan, an Irish domiciled company that we then redomiciled into the US. I mean that transaction enabled AbbVie to continue increasing our R&D investment through the Humira LOE, which is unprecedented. That will ultimately help us really lead to more innovation in our pipeline and ultimately impact patients of the future. So when we think about policy, we think tax reform has provided the right incentives to invest more in the US and more in innovation. And that’s what we would encourage.

Jeff Stewart: Let me give a quick update on the BoNT/E and the combination approach in terms of how we’re starting to think about it. Obviously, we’re super pleased with the recent filing on BoNT/E. And as we’ve highlighted before, the short acting toxin will operate on two different levels for us. First, it will stimulate the funnel. It will basically be a market stimulator because we know there’s lots of considerors in the marketplace that are just worried about going to a full strength toxin because it lasts for three to four months. So the approachability of a short acting toxin that works in about 8.5 hours and is gone in 2.5 weeks makes the market much more approachable for the people in the consideration phase. So we think it’s going to work on the market and our share, because obviously we’ve done studies with BOTOX after BoNT/E.

Now in the combination use, Carter, it’s very interesting. This is more of a pure sort of share play. When we talk to the consumers, many of the consumers are using a lot of BOTOX and you start saying, can you imagine a BOTOX that works almost immediately, so an immediate acting BOTOX. That gives us the potential and we’ll have to see how those trials and those studies play out to actually restate the whole market. Because what’s remarkable about BoNT/E is that we can see a two grade change in the glabellar lines in 8.5 hours. So nothing has ever worked even close to that fast. So we could even have a premium toxin that sits alongside BOTOX one day or a replacement product for just simply a better BOTOX, an immediate acting BOTOX. So it gives us a lot of flexibility and it’s certainly very exciting as Roopal has highlighted the program that will begin here for the combination.

Operator: Next we’ll go to the line of Courtney Breen from Bernstein. Please go ahead.

Courtney Breen: I wanted to look back to kind of part of the inventory and tariff conversation. We’ve been able to get some explicit answers from some of the peer companies. So just wanted to see if you were able to give us context as to whether you have enough inventory in the US to support products like Rinvoq, Botox, Vraylar or Humira for the rest of this year? And what about ’26 and ’27? And then the second question is just on the back of the BoNT/E question. Can you give us a little bit of context as to the pricing strategy for that kind of tester market? Because arguably kind of with a shorter directing time horizon, you have kind of less value. And so I’d love to see understand a little bit more about how you’re thinking about placing these products together.

Rob Michael: Thank you. This is Rob. I’ll take your first question and Jeff will take the second. Look, absent policy details, we’re not going to get into speculating on the impact. I think you’ve known us to be a company that once we have a full understanding, we’re very transparent and detailed. If you think about how we approach the Part D benefit redesign, as soon as we understood that impact, we were well in advance of the implementation of that discussing the impact on the company. But with tariffs, we don’t have the policy details for the sectoral tariffs. So it’s premature to speculate on the impact. And once we have that information, we’ll communicate at the appropriate time.

Jeff Stewart: And regarding the pricing, obviously, it’s since we just had the filing, it’s premature. We go through a very rigorous pricing analysis as we would get closer to launch. And some of the considerations that we would look for, which is, obviously, I mentioned, the rotation of even more patients into the aesthetic practices brings a lot of value to those practices. And if you think about it, the lifetime value of those new patients is very meaningful. So that could play into dynamics ultimately how we price the BoNT/E once we ultimately make that decision sometime next year. Obviously, it does work shorter. So that might imply a different or lower price point to start the trial. But those are all considerations commercially that we will go through as we go through our launch readiness process over the course of the year to really optimize the impact of that product as we bring it to the market.

Operator: Next, we’ll go to the line of Mohit Bansal from Wells Fargo. Please go ahead.

Mohit Bansal: Great. Thank you very much for taking my question and congrats on all the progress. I would like to understand a little bit more about your thought process around Gubra? And there have been couple of strategies. So of course, Novo is trying to combine GLP-1, but then there is a strategy or thought process that amylin could be a good agent as a standalone agent. So how are you thinking about this, especially with the longer acting version? Do you think there’s a strategy to just use this as a single agent, especially among patients who cannot tolerate GLP-1? We’d love to get your thoughts there.

Roopal Thakkar: You. Mohit, it’s Roopal. I’ll take that. So thanks for highlighting some of the potential here. And I think we’re thinking about it quite broadly. So as you stated, there’s an opportunity here as a monotherapy. I think the way we think about it is tolerability is key. We see a number of dropouts, upwards of 30% even after a month of starting with the current set of assets. And then when we look over the course of the year, 60% to 70% of the patients will drop. Now there’s a variety of factors that drive that discontinuation, but a key component is tolerability. So to have a monotherapy that’s tolerable, that provides meaningful weight loss and potentially has other potential benefits. We’ve seen pre clinically preservation of muscle.

We’ll have to see if that plays out. But that could be another benefit in the long term. When this launches, we do anticipate many of the patients will have already been on assays that are available today. So it could serve as a nice follow on for folks that couldn’t tolerate or came off for other reasons and want to go somewhere else. Now in terms of combinations, recall, when we did this deal, one thing we liked about it, was also the neutral pH of the formulation. So that could enable combinations with a variety of mechanisms. And as Rob stated, we continue to be interested in this space and we’ll be, thinking about other potential opportunities, which could include combinations that may drive further weight loss. But key for us would be tolerability and durability of use.

Operator: Next we’ll go to the line of Steve Scala from TD Cowen. Please go ahead.

Steve Scala: First of all, Bristol appears to think there’s a path forward with co-benefit in adjuvant schizophrenia based on existing data. Where does AbbVie stand in its analysis of the future of emraclidine? For instance, has a path forward become more clear in the last few months? Secondly, I believe AbbVie has more plants in Ireland than any other company. Curious how you think about that as well as your overall OUS footprint. Do you cut back OUS to invest in the US? Or do you maintain the presence OUS, given the fact that in four years we could have a different administration with very different views? And related to this topic, yesterday, Roche said that their US plants are 50% utilized. I’m wondering if AbbVie would share a similar percentage.

Roopal Thakkar: I’ll start with schizophrenia question. In terms of the recent data, it’s difficult for us to comment. I think that will be a discussion between the company and health authorities regarding the utility of a failed study. That would be their discussion to have. How we look at emraclidine is that we do still see potential and we want to approach this in a stepwise manner. The first step would be to look to see if we can further dose escalate beyond what was previously studied. We saw variable PK levels in those patients from the pivotal studies, some were low and we think there’s an opportunity to raise that. So a multiple ascending dose study will be initiated this year and that would apply to potentially monotherapy in schizophrenia as well as the adjunctive setting.

So as that data rolls out and if we’re able to utilize a higher dose, then we would again stepwise go forward into a Phase 2 setting to further derisk and apply our learnings in terms of trial design. And then if we see strong data there, which could be as a monotherapy, could be as an adjunct and also in neurodegeneration psychosis, then we would move into the Phase 3 setting. But I would say we still believe there’s opportunity here.

Rob Michael: And then Steve, this is Rob. I’ll take your question on the manufacturing footprint. As I mentioned in my remarks earlier, obviously, AbbVie, we have a very broad footprint. An important part of the strategy is to assure supply. And as I mentioned earlier, we went through a global pandemic without any supply disruptions and that strategy certainly paid off. We also have, I’d say, a very robust manufacturing network in the US I think what’s been widely misunderstood is Skyrizi as an example, our largest product is made in the US and so when we look at our global footprint, we consider assurance of supply. As Scott mentioned earlier, clearly, obviously, tax has an influence on longer term, how you’d want to structure your supply chain.

So certainly, I think with a more competitive tax policy, that sort of provide the appropriate incentives. We try to say we have obviously been ramping our volume considerably. You look at just the performance, just then think about biologics capacity and just the tremendous ramps we’ve seen for Skyrizi and Rinvoq. And so we stay ahead of the curve. We ensure that we are investing appropriately so we can keep up with that demand. I’d say the commercial team puts a lot of pressure on operations because they’re performing so well, but operations stays ahead of the curve and invest appropriately. And so when we look at the investment, when I mentioned the greater than 10 billion investment, that takes into account in the US, that takes into account our volume growth that we expect in addition to new areas that we will invest.

For example, peptide manufacturing as an example, as we enter that space, obviously now as we enter into obesity, it makes sense to add that capability. And so that will also be part of our supply chain strategy here. So that’s the way we’re thinking about it.

Operator: Next, we’ll go to the line of Dave Risinger from Leerink Partners. Please go ahead.

Dave Risinger: Thanks very much, and congrats on the performance. So I have two questions, please. And they’re both a bit high level. So the first is the industry is facing three major US Government risks, actions that are harming biopharma innovation, including actions significant FDA disruption and questioning of proven medical science, tariff threats and also the Trump administration’s agenda to take prices down more than the Biden administration took down drug prices. So considering what appears to be a lack of appreciation in Washington of the benefits that the biopharmaceutical industry brings to Americans, can you please comment on how your executive team and Board are engaging differently today with Washington leadership to change the political agenda for the better?

And then second, the press release mentions that guidance doesn’t reflect any trade policy shifts, including pharmaceutical sector tariffs. Can you describe the potential trade policy shifts that you’re considering or thinking of beyond tariffs?

Rob Michael: So we’re obviously not a member of pharma today, AbbVie, but we do continue to communicate with the association really to seek alignment on the most critical issues for the industry. Now AbbVie has a large government affairs organization that engages with lawmakers and the administration on our top policy priorities. And that includes tax reform. We’ve talked about that quite a bit today IRA, 340B and patient affordability in Medicare. And we have actually seen some positive results from that engagement. I mean, just this week, Congress released a report on 340B, included a recommendation that changed the law to more clearly define a patient, which should help address the abuse that is occurring with this program.

I would also view the 340B policies in the latest executive order as a positive. I also previously mentioned that seeking to eliminate the pill penalty is a positive for innovation. So we will continue to work with lawmakers as we always have on policies that support a healthy US biopharma industry, continued innovation and patient affordability.

Roopal Thakkar: Regarding FDA interactions, I would say our teams have been in active discussions with the FDA on multiple programs across therapeutic areas, sometimes daily interactions and no signals of a slowdown. We are monitoring the situation closely. However, thus far, we haven’t experienced any delays to our timelines.

Scott Reents: Just with respect to your question on my initial comments, it’s just the trade policy shift we’re talking about here is the potential pharmaceutical sector tariffs. It’s not any additional things that we were contemplating. Certainly, the environment has some uncertainty out there, but specific to that comment we were speaking of the pharmaceutical sector tariffs.

Operator: Next we’ll go to the line of Vamil Divan from Guggenheim Securities. Please go ahead.

Vamil Divan: Congrats on the quarter. One on the tariff discussion, I was curious about the aesthetic side. I know that pharmaceutical products are excluded from the current tariffs, but I thought products like your breast implants and Juvederm may be included right now. So curious if that’s the case or not? And if it is, then why wouldn’t there be some accounting for that in your new guidance? Maybe you just absorb it within your guidance? Any impact there? And then secondly, just on the aesthetics side, appreciate macro issues and all the macroeconomic pressures. But I’m just curious if you can comment on the market share dynamics. And is there any sort of share shifts that you’re seeing either in toxins or fillers that may be impacting things beyond the macro component?

Scott Reents: You are right. It’s a great question regarding the current tariff rules that are in place. So in general, pharmaceutical products and our products are exempt from those similar to our peers. However, there is a couple of exceptions to that. And then specific to aesthetics, yes, there are some application of the rules to aesthetics. But we have absorbed the aesthetics impact in the guidance. And I would tell you it’s modest. It’s something approximately $30 million. So it’s something fairly modest in the current rules and that’s something that we have absorbed. So all of the guidance that I gave and reaffirmed today from the margin profiles and otherwise includes us absorbing that.

Jeff Stewart: So I’ll go over your market share, give you some flavor on that. And I’ll focus on our two big markets, the US and China. So as I mentioned, we were right on our guidance, right on our forecast for the first quarter. Remember, biggest impact there was the price because we reversed the Alley [ph] redesign from last year. And so when we looked at basically what happened from the fourth quarter to the first quarter, we know we took a market share hit in toxins in that fourth quarter. The good news is we’ve seen a complete reengagement in the basically the old Alley program with all of our accounts. So things are quite stable. And we actually had a one market share point gain back from where we were. Now we still have to gain some more share over the course of the year to come back to where we were pre the change to Alley.

So we have lost year-over-year some share in toxins. In the US in filler, our share is very, very stable. We did not see a significant share impact on the filler side of the business. It’s just been sort of a double digit market pressure there. Now in China, I’m quite pleased with the share performance. We’ve recently had a couple of significant approvals sequentially. We have the masseter approval for BOTOX, which is sort of in the lower face and jawline and also VOLUX, which is in Juvederm. So we’ve actually seen significant positive momentum in BOTOX share in China as well as positive share in filler. So it’s a little variable across the board. Our big push will be to recover that share over the course of the year in the US toxin space. Hope that helps.

Operator: Next, we’ll go to the line of Alexandria Hammond from Wolfe Research.

Alexandria Hammond: So Skyrizi and Rinvoq have consistently surpassed expectations, but we’ve been getting some questions on what might drive long term growth in I&I as it relates to these assets. Could you comment on when we should start seeing results from your Skyrizi and Rinvoq combination trials? And as a follow-up, what combination are you most excited about from a mechanistic perspective?

Roopal Thakkar: I’ll start on the Skyrizi question and the combinations. So the studies have initiated and we would anticipate next year starting to see early data readouts. And I would say we’re excited about several of these mechanisms. We’ve utilized quite a bit of data that we’ve already collected to see what could be the best combination. And ultimately clinical data will guide that path, but we use biopsy data. The team has applied machine learning, to these data sets, spatial omics, a variety of different techniques. And the ones that we like are one, the alpha-4 beta-7. We think that could be a good combination. We like Lutikizumab, which is a bispecific to anti IL-1 alpha and importantly, IL-1 beta. We see that overexpression in patients with IBD that have failed other advanced therapies.

We see something similar for TREM1, which would be another potential combination. And then we as I mentioned, we also have a longer acting an agent designed to be longer acting TL1A that could also be a very good fit with IL-23 like Skyrizi. The other thing we’ll be doing since I mentioned a variety of different combinations is also capturing a number of biomarkers to see if there’s any potential for pretreatment segmentation in the future consistent with what we do in oncology. Thus far no real successes, would say maybe there’s hints in TL1A. But we’re going to generate that data as well to see if there’s opportunities to be able to use biomarkers in the future to segment these patients.

Scott Reents: I might add, when we look at Skyrizi and Rinvoq, certainly we’re very pleased with the strong demand in the quarter and that led to us taking a combined $900 million of increased guidance for the year. We’ve also given the long term guidance in 2027, which we continue to feel very confident in. And also I think it’s worthwhile to think about Rinvoq will have a second wave of indications towards the end of the decade. It will add a couple of billion dollars of sales. And we really see these two products even before the combination that Roopal spoke about as having a long runway of at least for at least the next eight years and we feel very good about that from that perspective.

Rob Michael: And this is Rob. I’ll just to add on to that. I think from strategically, when we look at the company and we have this clear runway to growth for at least the next eight years, we can use that time and obviously we’re looking to elevate the standard of care for immunology patients. We think these combination studies are a way to accomplish that. But we’re going to use that time to and just as we did with Humira, we came up with Skyrizi and Rinvoq as a way to elevate the standard of care And that really launched into a second chapter of the company. Third chapter is going to be as you think about the growth beyond Skyrizi and Rinvoq. And we have the time and we’re investing appropriately to identify what those drivers will be and within immunology and outside of it.

I mean we have five key growth areas that we’re very confident can drive growth. But obviously, you’ve now seen us enter the obesity space as we think about more sources of growth. We think that’s also an opportunity. So we think the company is very well positioned to grow very nicely for at least the next eight years and then use that time and the investment that’s available to grow beyond that.

Operator: Next, we’ll go to the line of James Shin from Deutsche Bank. Please go ahead.

James Shin: I had a question on current immunology price volume dynamics. Specifically, is the low single digit headwind being realized? If so, is it somehow being blended where Humira is seeing outsized headwinds, while Skyrizi and Rinvoq are seeing tailwinds? Or is there some sort of co pay shift or is there a shift in co pay utilization year-over-year or sequentially?

Scott Reents: James, it’s Scott. So I think I’ll start with Skyrizi and Rinvoq. If you look at the first quarter, those were both driven by strong demand. Now we’ve talked about pricing being slightly negative for those two products on a full year basis. We did see a little bit of favorable price in the quarter and that’s just a gating issue. So in the quarter, probably two things. One, Jess organization continues to do a very good job of focusing on co pay utilization and effectively managing that. So we saw a little bit of benefit from co pay utilization. And then in addition, we had anticipated some channel mix changes later in the year, but those actually came to fruition a little bit earlier than we thought. And so those factors, I would say, along with some gating issues combined to being price favorability, but we still anticipate negative pricing headwinds on a full year basis.

With respect to Humira, we talked about in the quarter and on the full year that there is a decrease in volume associated with share erosion as well as the compression of the overall molecule. So that volume is going to continue. I think you’ll see that volume a little bit more pronounced throughout the year, but there certainly continues to be some price. You’ve got some unwinds of accruals that cause price impacts, but you also have just the changing of the rebating dynamics as we entered into a new contract year.

Operator: Next we’ll go to the line of Geoff Meacham from Citibank. Please go ahead.

Geoff Meacham: Rob, had another one on policy. Wanted to get your perspective on PBM reform, which is often mentioned as highly likely to happen this year. What would you say are the main elements that you’d want to see in reform? And the second one on BD, is there a therapeutic area that you guys feel like you still have to add to? I wasn’t sure if neuro remains one of the top priorities just post emeraclidine and it does seem like multiple shots on goal in metabolic disease is kind of the approach a lot of other biopharmers are taking, but I wanted to get your perspective.

Jeff Stewart: So on PBM reform, I think we’re supportive of anything that helps with patient affordability. And so to the extent that that improves the dynamic on patient affordability that that is truly realized in their pockets, that’s favorable. So we are supportive of the efforts there. But it’s really all about making sure that we’re addressing patient affordability. As it relates to business development, we obviously really like the five key growth areas that we have today. As I mentioned, those will certainly drive very strong growth for at least the next eight years. I think sometimes there’s a misconception about neuroscience for AbbVie. It’s more than just psychiatry. We have a very strong migraine franchise that’s performing exceptionally well.

In Parkinson’s, we’re seeing great results. And we’ve been in Parkinson’s for a long time with Duopa. But as you think about the ramps we’re seeing with BioLev, the innovation we’ve brought for those patients and then Tavapadon, came from Cerevel, we could really start to see our Parkinson’s franchise emerge. And so when I think about neuroscience, I would think about it really in four segments. There’s psychiatry, it’s an important segment. There’s migraine, there’s Parkinson’s and there’s all of the neurodegeneration. And we obviously are investing in Alzheimer’s. And so you just look at the business development activity since the beginning of last year in neuroscience, extended our discovery collaboration in psychiatry with Gedeon Richter, who discovered Vraylar.

We added a novel mechanism for mood disorders with Gilgamesh. We acquired a next generation A beta antibody that’s very promising for Alzheimer’s from Aliada. And we’re also investing in novel approaches for migraine disease. So we are actively investing in neuroscience. We obviously added obesity because we do think of ourselves as being a company that’s going be very large in the next decade. So it doesn’t hurt to have another source of growth. And we have evaluated various options beyond the five and we chose to move into obesity for a number of reasons. It’s obviously an extremely attractive market, has high prevalence and plenty of headroom for growth. It’s a market that has ample space for multiple players and new entrants. And I think we’re also uniquely positioned with our aesthetics business to access that channel in addition to therapeutics.

And importantly, and it’s something we always focus on is where are there high areas of unmet need. As we think about our portfolio, that’s really our strategy is to drive a remarkable impact for our patients by elevating standard of care. When we look at obesity, there’s plenty of opportunity, whether it’s reducing GI side effects, improving body composition, more consistent weight loss across patient types, longer lasting weight loss. And so as we evaluate that opportunity, we found the amylin class to be very attractive given it’s the most validated non-GLP-1 mechanism for obesity and has very encouraging early data. And we believe the amylin opportunity with Gubra has the potential to deliver a differentiated asset. So we will continue investing in obesity.

We’ll continue investing in our five key growth areas. And we think that gives us the right mix to drive growth for long term.

Operator: Next, we’ll go to the line of Tim Anderson from Bank of America.

Tim Anderson: I have a question on drug advertising. So AbbVie is the number one spender on this. It’s hard to turn on TV without seeing something like a ad. And that says you see a very positive ROI from that level of spending. As you know, there’s some occasional talk by the administration about limiting such advertising. So my question is, do you think there’s any basis in reality for that? I know you’ll say it shouldn’t happen, but that doesn’t mean that it will potentially happen. But then on obesity, as you noted, your amylin is long acting. Doesn’t that imply that a really kind of key next part of the portfolio is a long acting GLP? Or are you not interested in the GLP-1 space at all?

Jeff Stewart: And you’re right. It’s difficult to know if DTC reform would take place or what it might look like. I think you’re right. We’re very supportive of the First Amendment rights to be able to advertise. And obviously, we work with the FDA on every single claim that we make on television. And if there were to be a change, we would be able to pivot. I mean, we could shift our investment to disease awareness that could help us drive because we have such leading in-play share to continue to basically invest in the right way to consumers. We certainly could move to other channels because it’s not really clear if it would just be mass media or etc. So certainly, the whole market would take a step back if that were to happen and our brands would still be very, very competitive in terms of our ability to pivot and toggle were that to happen. So difficult to predict, but we would be, of course, planning for any of those contingencies were they to take place.

Roopal Thakkar: Regarding different mechanisms. So as stated previously, we think there’s opportunity as a monotherapy and also as a potential combination. Would say we haven’t ruled out any particular mechanism that we would combine with. The other thing to mention, I think I already stated this, but we do have a neutral pH in the current formulation for 295. So that potentially makes it more amenable to combinations. But mechanisms that you mentioned and potentially others, would say, are on the table for us.

Operator: Next, we’ll go to the line of Trung Huynh from UBS.

Trung Huynh: I’ve got two questions if I can. So first, just very quickly, you did touch on the pricing dynamics with Skyrizi and Rinvoq. But did the strong performance include any notable onetime contributions, inventory build or pull forward effects? And then second, similar to Vamil’s aesthetics question, but China reciprocal tariffs have been enacted. Is that contemplated in your guide? And is that material to your aesthetics business? And then just I know it’s early days, but are you seeing any shifts in demand there?

Scott Reents: So with respect to Skyrizi and Rinvoq, I would say the one item that I would point to, again, was strong demand overall. The one thing that also helped the growth in the quarter was with respect to the retailer destocking. So in the past, we’ve talked about there’s some retail inventory buildup as a form of price speculation in the fourth quarter. I talked about in the fourth quarter call that we didn’t see a lot of that. And then that was again confirmed, we did not see there was no unwind like there has been in prior year. So there was a year-over-year benefit from the lack of destocking from the retail buildup in the first quarter. But again, that was fairly modest. When we talk about our overall growth globally, 72% operationally, the demand was really in the 60s.

And so you just saw a small portion from that retail destocking. With respect to the China tariff, yes, you’re right. There is some impact for aesthetics in those products in those numbers. But again, that impact is fairly modest. We’ve contemplated that in our guidance. And so I would say overall, the existing tariffs, you’re talking about $30 million approximately globally and a decent component of that is with respect to the aesthetics business. And then maybe, I don’t know if Jeff would like to comment on, I think you’d ask if there’s if we’ve seen demand changes in China?

Jeff Stewart: No, we haven’t over the last 30 days. I mean, things are things change quickly. But as I mentioned, if we at the quarter, we’ve been encouraged by the share growth we’ve seen in China based on the recent approvals for both the toxin and the filler category.

Operator: And for our final question, we’ll go to the line of Evan Seigerman from BMO Capital Markets.

Unidentified Analyst: This is Connor McKay [ph] on for Evan. Thanks for taking our question and congrats on a great quarter. Vyalev and Elahere were two products that outside of your I&I business came in sort of meaningfully ahead of analyst expectations. Can you maybe walk us through what’s driving the strength for each of those?

Jeff Stewart: Certainly as I mentioned in the prepared remark and Rob as well, Vyalev is emerging as a very, very important product. And we communicated certainly that it could continue to exceed expectations. So it’s quite remarkable. We continue to see strong uptake in Japan, across Europe. And while we’re only in the commercial market, which is about 30% of the market in the US, because we’re still waiting on the full Medicare reimbursement, the market feedback is exceptional. I mean this is a really amazing product to help patients sleep through the night, control the movement disorders. It’s unlike Duopa, it lasts for 24 hours. It’s a more simple subcu injection versus surgery that you might get. So it’s playing out exactly as we had hoped.

And so you’re just seeing some strength of that in the quarter. And that’s also why we remarked that we’re excited to bring Tavapadon, which is also showing some very nice data here and we’re getting ready for the file to start to really build out a more meaningful Parkinson’s category. And then Elahere, we continue to see nice uptake, very unique product. Obviously, it’s got a 30% approval in overall survival. It’s well tolerated non-chemo. So the US business continues to perform very well. And we are starting to see the international launches. We’ve pulled forward significant international launches from the time that we had done the deal with ImmunoGen, and we’re going to start to see those international launches ramp here over the next several quarters.

So that gives some sense over that brand as well.

Rob Michael: I’m glad you asked a question about Elahere because oncology doesn’t get enough attention for the company. Elahere came to us through the ImmunoGen acquisition. It was a very successful acquisition. It basically combined their ADC capabilities with ours. And now you’re starting to see the AbbVie internally discovered ADCs emerge. We’ve talked about Teliso-V. We’re very excited about tmAb A-706. You think about long term growth drivers for AbbVie, oncology with that emerging pipeline and Roopal and I both mentioned 383, the bispecific for multiple myeloma. We have, I think, a very exciting emerging oncology pipeline that could be an important growth driver for the company. So I appreciate the specific question about Elahere.

Liz Shea: 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.abbvie.com. Thanks again for joining us.

Operator: Thank you all for joining the AbbVie first quarter 2025 earnings conference call. That concludes today’s conference. Please disconnect at this time, and we hope you have a wonderful rest of your day.