ABBVIE INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

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ABBVIE INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (form 10-Q)


The following is a discussion and analysis of the financial condition of AbbVie
Inc. (AbbVie or the company) as of June 30, 2022 and December 31, 2021 and the
results of operations for the three and six months ended June 30, 2022 and 2021.
This commentary should be read in conjunction with the Condensed Consolidated
Financial Statements and accompanying notes appearing in Item 1, "Financial
Statements and Supplementary Data."

EXECUTIVE OVERVIEW

Company Overview

AbbVie is a global, diversified research-based biopharmaceutical company
positioned for success with a comprehensive product portfolio that has
leadership positions across immunology, oncology, aesthetics, neuroscience and
eye care. AbbVie uses its expertise, dedicated people and unique approach to
innovation to develop and market advanced therapies that address some of the
world's most complex and serious diseases.

AbbVie's products are generally sold worldwide directly to wholesalers,
distributors, government agencies, health care facilities, specialty pharmacies
and independent retailers from AbbVie-owned distribution centers and public
warehouses. Certain products (including aesthetic products and devices) are also
sold directly to physicians and other licensed healthcare providers. In the
United States, AbbVie distributes pharmaceutical products principally through
independent wholesale distributors, with some sales directly to retailers,
pharmacies, patients or other customers. Outside the United States, AbbVie sells
products primarily to customers or through distributors, depending on the market
served. Certain products are co-marketed or co-promoted with other companies.
AbbVie has approximately 50,000 employees. AbbVie operates as a single global
business segment.

2022 Strategic Objectives

AbbVie's mission is to discover and develop innovative medicines and products
that solve serious health issues today and address the medical challenges of
tomorrow while achieving top-tier financial performance through outstanding
execution. AbbVie intends to continue to advance its mission in a number of
ways, including: (i) maximizing the benefits of a diversified revenue base with
multiple long-term growth drivers; (ii) growing revenues by leveraging AbbVie's
commercial strength and international infrastructure across therapeutic areas
and ensuring strong commercial execution of new product launches;
(iii) continuing to invest in and expand its pipeline in support of
opportunities in immunology, oncology, aesthetics, neuroscience and eye care as
well as continued investment in key on-market products; (iv) expanding operating
margins; and (v) returning cash to shareholders via a strong and growing
dividend while also reducing debt. In addition, AbbVie anticipates several
regulatory submissions and data readouts from key clinical trials in the next 12
months.

Financial Results

The company’s financial performance for the six months ended June 30, 2022
included delivering worldwide net revenues of $28.1 billion, operating earnings
of $8.0 billion, diluted earnings per share of $3.03 and cash flows from
operations of $9.9 billion. Worldwide net revenues grew by 4% on a reported
basis and 6% on a constant currency basis, reflecting growth across its
immunology, neuroscience and aesthetics portfolios.

Diluted earnings per share was $3.03 for the six months ended June 30, 2022 and
included the following after-tax costs: (i) $3.1 billion related to the
amortization of intangible assets; (ii) $1.9 billion for charges related to
litigation matters; (iii) $875 million for the change in fair value of
contingent consideration liabilities; and (iv) $219 million of acquisition and
integration expenses. These costs were partially offset by an after-tax gain of
$126 million related to the divestiture of Pylera. Additionally, financial
results reflected continued funding to support all stages of AbbVie's pipeline
assets and continued investment in AbbVie's on-market brands.

Following the closing of the Allergan acquisition, AbbVie implemented an
integration plan designed to reduce costs, integrate and optimize the combined
organization. The integration plan is expected to realize approximately $2.5
billion of annual cost synergies in 2022.

To achieve these integration objectives, AbbVie expects to incur total
cumulative charges of approximately $2 billion through 2022. These costs consist
of severance and employee benefit costs (cash severance, non-cash severance,
including accelerated equity award compensation expense, retention and other
termination benefits) and other integration expenses.

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Recent Global Events

Russia/Ukraine

In response to the military conflict between Russia and Ukraine, the United
States and other North Atlantic Treaty Organization member states, as well as
certain non-member states, announced targeted economic sanctions and export
controls on Russia and Belarus. These include restrictions on the export and
transfer of products containing certain toxins, including Botox, to Russia and
Belarus. With the exception of Botox, AbbVie is not prohibited to continue the
sale of essential pharmaceutical products to help ensure patients receive an
uninterrupted supply of their medicines. In March 2022, AbbVie announced the
suspension of operations for all aesthetics products in Russia. In April 2022,
AbbVie also announced that all profits from the sales of essential medicines in
Russia will be donated to support direct humanitarian relief efforts in Ukraine.
While the company's operations in Russia, Belarus and Ukraine are not
significant, if the conflict escalates and results in broader economic and
political concerns, AbbVie's business could be adversely impacted.

Impact of the Coronavirus Disease 2019 (COVID-19)

In response to the ongoing public health crisis posed by COVID-19, AbbVie
continues to focus on ensuring the safety of employees. Throughout the pandemic,
AbbVie has followed health and safety guidance from state and local health
authorities and implemented safety measures for those employees who are
returning to the workplace.

AbbVie also continues to closely manage manufacturing and supply chain resources
around the world to help ensure that patients continue to receive an
uninterrupted supply of their medicines. Clinical trial sites are being
monitored locally to protect the safety of study participants, staff and
employees. While the impact of COVID-19 on AbbVie's operations to date has not
been material, AbbVie continues to experience lower new patient starts in
certain products and markets. AbbVie expects this matter could continue to
negatively impact its results of operations throughout the duration of the
pandemic.

The extent to which COVID-19 may impact AbbVie's financial condition and results
of operations remains uncertain and is dependent on numerous evolving factors,
including the measures being taken by authorities to mitigate against the spread
of COVID-19, the emergence of new variants and the effectiveness of vaccines and
therapeutics.

Research and Development

Research and innovation are the cornerstones of AbbVie's business as a global
biopharmaceutical company. AbbVie's long-term success depends to a great extent
on its ability to continue to discover and develop innovative products and
acquire or collaborate on compounds currently in development by other
biotechnology or pharmaceutical companies.

AbbVie's pipeline currently includes approximately 80 compounds, devices or
indications in development individually or under collaboration or license
agreements and is focused on such important specialties as immunology, oncology,
aesthetics, neuroscience and eye care. Of these programs, more than 40 are in
mid- and late-stage development.

The following sections summarize transitions of significant programs from
mid-stage development to late-stage development as well as developments in
significant late-stage and registration programs. AbbVie expects multiple
mid-stage programs to transition into late-stage programs in the next 12 months.

Significant Programs and Developments

Immunology

Skyrizi

•In January 2022, AbbVie announced that the U.S. Food and Drug Administration
(FDA) approved Skyrizi for the treatment of adults with active psoriatic
arthritis.

•In June 2022, AbbVie announced that the FDA approved Skyrizi for the treatment
of adults with moderately to severely active Crohn’s disease.

Rinvoq

•In January 2022, AbbVie announced its submission of a supplemental New Drug
Application (sNDA) to the FDA for Rinvoq for the treatment of adults with active
non-radiographic axial spondyloarthritis (nr-axSpA) with objective signs of
inflammation who have responded inadequately to nonsteroidal anti-inflammatory
drugs (NSAIDs).


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•In January 2022, AbbVie announced that the FDA approved Rinvoq for the
treatment of moderate to severe atopic dermatitis in adults and children 12
years of age and older whose disease did not respond to previous treatment and
is not well controlled with other pills or injections, including biologic
medicines, or when use of other pills or injections is not recommended.

•In February 2022, AbbVie was notified that the European Commission (EC) is
requesting the European Medicines Agency (EMA) to assess safety concerns
associated with JAK inhibitor products authorized in inflammatory diseases and
to evaluate the impact of these events on their benefit-risk balance. The
assessment covers all JAK inhibitors approved for use in inflammatory diseases.

•In February 2022, AbbVie announced top-line results from its second Phase 3
induction study, U-Excel, for Rinvoq in patients with moderate to severe Crohn's
disease who had an inadequate response or were intolerant to conventional or
biologic therapy met the primary and most key secondary endpoints.

•In March 2022, AbbVie announced that the FDA approved Rinvoq for the treatment
of adults with moderately to severely active ulcerative colitis (UC) who have
had an inadequate response or intolerance to one or more tumor necrosis factor
(TNF) blockers.

•In April 2022, AbbVie announced that the FDA approved Rinvoq for the treatment
of adults with active ankylosing spondylitis who have had an inadequate response
or intolerance to one or more TNF blockers.

•In May 2022, AbbVie announced positive top-line results from U-ENDURE, its
Phase 3 maintenance study for Rinvoq in adult patients with moderate to severe
Crohn's disease who had an inadequate response or were intolerant to a
conventional or biologic therapy. The results showed that more patients treated
with Rinvoq achieved the co-primary and secondary endpoints at one year compared
to placebo.

•In July 2022, AbbVie announced that the EC approved Rinvoq for the treatment of
adults with moderately to severely active UC who have had an inadequate
response, lost response or were intolerant to either conventional therapy or a
biologic agent.

•In July 2022, AbbVie announced its submission of an sNDA to the FDA and a
marketing authorization application (MAA) to the EMA for Rinvoq for the
treatment of adult patients with moderately to severely active Crohn’s disease.

•In July 2022, AbbVie announced that the EC approved Rinvoq for the treatment of
adult patients with active nr-axSpA.

Oncology

Teliso-V

•In January 2022, AbbVie announced that the FDA granted Breakthrough Therapy
Designation to investigational telisotuzumab vedotin (Teliso-V) for the
treatment of patients with advanced/metastatic epidermal growth factor receptor
wild type, nonsquamous non-small cell lung cancer with high levels of c-Met
overexpression whose disease has progressed on or after platinum-based therapy.

•In May 2022, AbbVie initiated a Phase 3 clinical trial to evaluate Teliso-V
versus docetaxel for the treatment of patients with previously treated c-Met
overexpressing, epidermal growth factor receptor wild type, advanced/metastatic
non-squamous non-small cell lung cancer.

Imbruvica

•In February 2022, AbbVie submitted an sNDA to the FDA for Imbruvica for the
treatment of pediatric and adolescent patients one year and older with chronic
graft versus host disease after failure of one or more lines of systemic
therapy.

Epcoritamab

•In March 2022, Genmab A/S (Genmab) announced that FDA granted orphan-drug
designation to the investigational medicine, epcoritamab (DuoBody-CD3xCD20), for
the treatment of follicular lymphoma. Genmab and AbbVie are co-developing
epcoritamab and will share commercial responsibilities in the U.S. and Japan,
with AbbVie responsible for further global commercialization.

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•In June 2022, AbbVie announced primary results from the large B-cell lymphoma
expansion cohort in the EPCORE NHL-1 phase 2 clinical trial evaluating
epcoritamab, an investigational subcutaneous bispecific antibody. In this study,
epcoritamab demonstrated efficacy with durable responses in patients who had
previously received at least two prior lines of anti-lymphoma therapy including
chimeric antigen receptor T-cell therapy.

Aesthetics

Juvederm Collection

•In February 2022, AbbVie announced that the FDA approved JUVEDERM VOLBELLA XC
for improvement of infraorbital hollows in adults over the age of 21.

BoNTE

•In March 2022, AbbVie initiated three Phase 3 clinical trials to evaluate the
efficacy and safety of BoNTE (AGN-151586) for the treatment of glabellar lines.

Neuroscience

Vraylar

•In February 2022, AbbVie submitted an sNDA to the FDA for Vraylar for the
adjunctive treatment of major depressive disorder in patients who are receiving
ongoing antidepressant therapy.

Qulipta

•In March 2022, AbbVie announced results from the Phase 3 PROGRESS trial for
Qulipta in the preventive treatment of chronic migraine in adults met the
primary endpoint and resulted in significant improvements in all secondary
endpoints after adjustment for multiple comparisons.

•In June 2022, AbbVie submitted an sNDA to the FDA for Qulipta for the
preventative treatment of chronic migraine in adults.

•In July 2022, AbbVie submitted an MAA to the EMA for Qulipta for the
prophylactic treatment of migraine in adult patients who have at least four
migraine days per month.

ABBV-951

•In May 2022, AbbVie submitted a New Drug Application to the FDA for ABBV-951
(foscarbidopa/foslevodopa) for the treatment of motor fluctuations in patients
with advanced Parkinson's disease.

Eye Care

Vuity

•In April 2022, AbbVie announced that the Phase 3 VIRGO trial evaluating the
safety and efficacy of investigational twice-daily administration of Vuity 1.25%
in adults with presbyopia met its primary efficacy endpoint.

•In June 2022, AbbVie submitted an sNDA to the FDA for twice-daily
administration of Vuity 1.25% in adults with presbyopia.

For a more comprehensive discussion of AbbVie’s products and pipeline, see the
company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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RESULTS OF OPERATIONS

Net Revenues

The comparisons presented at constant currency rates reflect comparative local
currency net revenues at the prior year's foreign exchange rates. This measure
provides information on the change in net revenues assuming that foreign
currency exchange rates had not changed between the prior and current periods.
AbbVie believes that the non-GAAP measure of change in net revenues at constant
currency rates, when used in conjunction with the GAAP measure of change in net
revenues at actual currency rates, may provide a more complete understanding of
the company's operations and can facilitate analysis of the company's results of
operations, particularly in evaluating performance from one period to another.

                                            Three months ended                                Percent change                                Six months ended                                Percent change
                                                 June 30,                         At actual                   At constant                       June 30,                        At actual                   At constant
(dollars in millions)                     2022               2021               currency rates               currency rates              2022              2021               currency rates               currency rates
United States                         $   11,410          $ 10,804                          5.6  %                       5.6  %       $ 21,758          $ 20,554                          5.9  %                       5.9  %
International                              3,173             3,155                          0.6  %                       7.6  %          6,363             6,415                         (0.8) %                       5.3  %
Net revenues                          $   14,583          $ 13,959                          4.5  %                       6.1  %       $ 28,121          $ 26,969                          4.3  %                       5.7  %

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The following table details AbbVie’s worldwide net revenues:

                                                                          Three months ended                                 Percent change                               Six months ended                                Percent change
                                                                               June 30,                          At actual                  At constant                       June 30,                        At actual                  At constant
(dollars in millions)                                                    2022                2021             currency rates               currency rates               2022              2021             currency rates               currency rates
Immunology
Humira                       United States                         $    4,664             $ 4,257                         9.6  %                       9.6  %       $   8,657          $ 8,164                         6.0  %                       6.0  %
                             International                                699                 811                       (13.8) %                      (7.3) %           1,442            1,771                       (18.6) %                     (13.1) %
                             Total                                 $    5,363             $ 5,068                         5.8  %                       6.8  %       $  10,099          $ 9,935                         1.7  %                       2.7  %
Skyrizi                      United States                         $    1,079             $   565                        91.1  %                      91.1  %       $   1,860          $ 1,046                        77.8  %                      77.8  %
                             International                                173                 109                        59.1  %                      73.9  %             332              202                        64.7  %                      78.1  %
                             Total                                 $    1,252             $   674                        85.9  %                      88.3  %       $   2,192          $ 1,248                        75.7  %                      77.9  %
Rinvoq                       United States                         $      412             $   296                        39.4  %                      39.4  %       $     723          $   541                        33.7  %                      33.7  %
                             International                                180                  82                       >100.0 %                     >100.0 %             334              140                       >100.0 %                     >100.0 %
                             Total                                 $      592             $   378                        56.3  %                      60.7  %       $   1,057          $   681                        55.1  %                      59.2  %
Hematologic Oncology
Imbruvica                    United States                         $      862             $ 1,099                       (21.6) %                     (21.6) %       $   1,736          $ 2,098                       (17.2) %                     (17.2) %
                             Collaboration revenues                       283                 282                         0.5  %                       0.5  %             582              551                         5.6  %                       5.6  %
                             Total                                 $    1,145             $ 1,381                       (17.1) %                     (17.1) %       $   2,318          $ 2,649                       (12.5) %                     (12.5) %
Venclexta                    United States                         $      253             $   223                        13.4  %                      13.4  %       $     481          $   448                         7.5  %                       7.5  %
                             International                                252                 212                        19.1  %                      29.3  %             497              392                        26.8  %                      36.7  %
                             Total                                 $      505             $   435                        16.2  %                      21.2  %       $     978          $   840                        16.5  %                      21.1  %
Aesthetics
Botox Cosmetic               United States                         $      449             $   366                        22.4  %                      22.4  %       $     862          $   671                        28.3  %                      28.3  %
                             International                                246                 218                        12.9  %                      19.2  %             474              390                        21.5  %                      27.7  %
                             Total                                 $      695             $   584                        18.9  %                      21.2  %       $   1,336          $ 1,061                        25.8  %                      28.1  %
Juvederm Collection          United States                         $      147             $   196                       (24.9) %                     (24.9) %       $     295          $   319                        (7.5) %                      (7.5) %
                             International                                197                 232                       (15.0) %                      (8.1) %             459              430                         6.7  %                      13.0  %
                             Total                                 $      344             $   428                       (19.5) %                     (15.7) %       $     754          $   749                         0.7  %                       4.3  %
Other Aesthetics             United States                         $      287             $   363                       (20.9) %                     (20.9) %       $     572          $   663                       (13.6) %                     (13.6) %
                             International                                 45                  59                       (24.4) %                     (20.2) %              83              102                       (18.3) %                     (14.3) %
                             Total                                 $      332             $   422                       (21.4) %                     (20.8) %       $     655          $   765                       (14.2) %                     (13.7) %
Neuroscience
Botox Therapeutic            United States                         $      557             $   488                        14.2  %                      14.2  %       $   1,057          $   917                        15.3  %                      15.3  %
                             International                                121                 115                         5.6  %                      15.6  %             235              218                         8.0  %                      16.3  %
                             Total                                 $      678             $   603                        12.6  %                      14.5  %       $   1,292          $ 1,135                        13.9  %                      15.5  %
Vraylar                      United States                         $      492             $   432                        13.9  %                      13.9  %       $     919          $   778                        18.1  %                      18.1  %

Duodopa                      United States                         $       26             $    25                         3.2  %                       3.2  %       $      50          $    50                        (1.2) %                      (1.2) %
                             International                                 94                 102                        (7.4) %                       2.2  %             191              206                        (7.2) %                       1.3  %
                             Total                                 $      120             $   127                        (5.4) %                       2.3  %       $     241          $   256                        (6.0) %                       0.8  %
Ubrelvy                      United States                         $      185             $   126                        47.6  %                      47.6  %       $     323          $   207                        56.4  %                      56.4  %

Qulipta                      United States                         $       33             $     -                            n/m                          n/m       $      44          $     -                            n/m                          n/m
Other Neuroscience           United States                         $      145             $   167                       (13.6) %                     (13.6) %       $     318          $   323                        (1.7) %                      (1.7) %
                             International                                  5                   4                         9.6  %                      12.9  %               9                8                        10.4  %                      12.6  %
                             Total                                 $      150             $   171                       (12.9) %                     (12.8) %       $     327          $   331                        (1.4) %                      (1.3) %


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                                                                   Three months ended                                Percent change                                Six months ended                                Percent change
                                                                        June 30,                         At actual                   At constant                       June 30,                        At actual               
   At constant
(dollars in millions)                                            2022               2021               currency rates               currency rates              2022              2021               currency rates               currency rates
Eye Care
Lumigan/Ganfort             United States                    $       60          $     72                        (17.4) %                     (17.4) %       $    127          $    138                         (8.3) %                      (8.3) %
                            International                            70                77                         (8.1) %                      (0.9) %            143               154                         (6.9) %                      (0.1) %
                            Total                            $      130          $    149                        (12.5) %                      (8.7) %       $    270          $    292                         (7.5) %                      (3.9) %
Alphagan/Combigan           United States                    $       54          $    102                        (48.5) %                     (48.5) %       $    124          $    182                        (32.3) %                     (32.3) %
                            International                            38                40                         (2.3) %                       6.6  %             75                78                         (3.1) %                       6.0  %
                            Total                            $       92          $    142                        (35.6) %                     (33.1) %       $    199          $    260                        (23.6) %                     (20.9) %
Restasis                    United States                    $      151          $    312                        (51.5) %                     (51.5) %       $    386          $    579                        (33.2) %                     (33.2) %
                            International                            17                15                         14.9  %                      24.2  %             28                28                         (0.2) %                      14.0  %
                            Total                            $      168          $    327                        (48.4) %                     (48.0) %       $    414          $    607                        (31.7) %                     (31.0) %
Other Eye Care              United States                    $      142          $    130                          9.7  %                       9.7  %       $    266          $    247                          7.7  %                       7.7  %
                            International                           185               171                          7.4  %                      16.0  %            339               330                          2.6  %                      10.5  %
                            Total                            $      327          $    301                          8.4  %                      13.2  %       $    605          $    577                          4.8  %                       9.3  %
Other Key Products
Mavyret                     United States                    $      203          $    204                          0.2  %                       0.2  %       $    372          $    374                         (0.4) %                      (0.4) %
                            International                           195               238                        (18.0) %                      (9.8) %            406               483                        (15.9) %                      (8.4) %
                            Total                            $      398          $    442                         (9.7) %                      (5.3) %       $    778          $    857                         (9.1) %                      (4.9) %
Creon                       United States                    $      318          $    280                         13.6  %                      13.6  %       $    605          $    554                          9.2  %                       9.2  %
Linzess/Constella           United States                    $      247          $    260                         (4.2) %                      (4.2) %       $    480          $    475                          1.3  %                       1.3  %
                            International                             8                 8                        (12.5) %                      (7.8) %             15                15                         (3.8) %                       0.7  %
                            Total                            $      255          $    268                         (4.5) %                      (4.4) %       $    495          $    490                          1.1  %                       1.2  %

All other                                                    $    1,009          $  1,221                        (17.5) %                     (16.4) %       $  2,220          $  2,697                        (17.8) %                     (16.8) %
Total net revenues                                           $   14,583          $ 13,959                          4.5  %                       6.1  %       $ 28,121          $ 26,969                          4.3  %                       5.7  %


n/m - Not meaningful

The following discussion and analysis of AbbVie’s net revenues by product is
presented on a constant currency basis.

Global Humira sales increased by 7% for the three months and 3% for the six
months ended June 30, 2022 primarily driven by market growth across therapeutic
categories, partially offset by direct biosimilar competition in certain
international markets. In the United States, Humira sales increased by 10% for
the three months and 6% for the six months ended June 30, 2022 primarily driven
by market growth across all indications and favorable pricing. This increase was
partially offset by lower market share following corresponding market share
gains of Skyrizi and Rinvoq. Internationally, Humira revenues decreased by 7%
for the three months and 13% for the six months ended June 30, 2022 primarily
driven by direct biosimilar competition in certain international markets.

Net revenues for Skyrizi increased by 88% for the three months and 78% for the
six months ended June 30, 2022 primarily driven by continued strong volume and
market share uptake since launch as a treatment for plaque psoriasis as well as
market growth. Net revenues for the three and six months ended June 30, 2022
were also favorably impacted by recent regulatory approvals and expansion of
Skyrizi for the treatment of psoriatic arthritis.

Net revenues for Rinvoq increased by 61% for the three months and 59% for the
six months ended June 30, 2022 primarily driven by continued strong volume and
market share uptake since launch for the treatment of moderate to severe
rheumatoid arthritis as well as market growth. Net revenues for the three and
six months ended June 30, 2022 were also favorably impacted by recent regulatory
approvals and expansion of Rinvoq for the treatment of psoriatic arthritis,
atopic dermatitis, ankylosing spondylitis and ulcerative colitis.

Net revenues for Imbruvica represent product revenues in the United States and
collaboration revenues outside of the United States related to AbbVie's 50%
share of Imbruvica profit. AbbVie's global Imbruvica revenues decreased by 17%
for the three months and 13% for the six months ended June 30, 2022 as a result
of decreased market demand and lower new patient starts in the United States.
The decrease in net revenues for the six months ended June 30, 2022 was also
partially offset by increased collaboration revenues.

Net revenues for Venclexta increased by 21% for the three and six months ended
June 30, 2022 primarily due to continued expansion of Venclexta for the
treatment of patients with chronic lymphocytic leukemia (CLL),
relapsed/refractory CLL and acute myeloid leukemia.

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Net revenues for Botox Cosmetic used in facial aesthetics increased by 21% for
the three months and 28% for the six months ended June 30, 2022 due to increased
consumer demand driven by targeted brand investment.

Net revenues for Juvederm Collection used in facial aesthetics decreased by 16%
for the three months ended June 30, 2022 due to COVID-19 restrictions in China
and suspension of aesthetic operations in Russia. Net revenues for Juvederm
Collection increased 4% for the six months ended June 30, 2022 due to market
growth partially offset by COVID-19 restrictions in China and suspension of
aesthetic operations in Russia. In the United States, net revenues for the three
and six months ended June 30, 2022 were unfavorably impacted by higher revenues
in the prior year due to a one-time promotion in the three months ended June 30,
2021.

Net revenues for Botox Therapeutic used primarily in neuroscience and urology
therapeutic areas increased by 14% for the three months and 15% for the six
months ended June 30, 2022 due to market growth.

Net revenues for Vraylar for the treatment of schizophrenia, bipolar I disorder
and bipolar depression increased by 14% for the three months and 18% for the six
months ended June 30, 2022 due to higher market share and market growth.

Net revenues for Ubrelvy for the acute treatment of migraine with or without
aura in adults increased by 48% for the three months and 56% for the six months
ended June 30, 2022 primarily due to increased market share uptake since launch.

Net revenues for Mavyret decreased by 5% for the three and six months ended June
30, 2022 due to the continued disruption of global HCV markets due to the
COVID-19 pandemic.

Gross Margin
                                                                 Three months ended                                          Six months ended
                                                                      June 30,                                                   June 30,
(dollars in millions)                                2022              2021             % change               2022              2021              % change
Gross margin                                     $     10,413       $    9,436                 10  %       $     19,899       $    18,233                  9  %
as a % of net revenues                                  71  %            68  %                                    71  %            68   %


Gross margin as a percentage of net revenues increased for the three and six
months ended June 30, 2022 compared to the prior year. Gross margin percentage
for the three and six months ended June 30, 2022 was favorably impacted by
changes in product mix and lower amortization of intangible assets associated
with the Allergan acquisition.

Selling, General and Administrative

                                                           Three months ended                                         Six months ended
                                                                June 30,                                                  June 30,
(dollars in millions)                          2022              2021             % change               2022              2021             % change

Selling, general and administrative $ 5,412 $ 3,164

             71  %       $      8,539       $    6,006                 42  %
as a % of net revenues                            37  %            23  %                                    30  %            22  %


Selling, general and administrative (SG&A) expenses as a percentage of net
revenues increased for the three and six months ended June 30, 2022 compared to
the prior year. SG&A expense percentage for the three and six months ended June
30, 2022 was unfavorably impacted by litigation reserve charges of $2.2 billion
for the three months and $2.4 billion for the six months ended June 30, 2022.

Research and Development and Acquired IPR&D and Milestones

                                                          Three months ended                                        Six months ended
                                                               June 30,                                                 June 30,
(dollars in millions)                        2022              2021             % change               2022              2021             % change
Research and development                  $  1,609          $ 1,767                    (9) %       $      3,106       $    3,434                (10) %
as a % of net revenues                          11  %            13  %                                    11  %            13  %
Acquired IPR&D and milestones             $    269          $   132                    >100%       $        414       $      317                 31  %


Research and development (R&D) expenses as a percentage of net revenues
decreased for the three and six months ended June 30, 2022 compared to the prior
year. R&D expense percentage was favorably impacted by the purchase of priority
review vouchers from third parties during the three and six months ended June
30, 2021, increased scale of the combined company and synergies realized as well
as lower integration costs related to the acquisition of Allergan.

2022 Form 10-Q | [[Image Removed: abbv-20220630_g2.gif]] 32

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Acquired IPR&D and milestones expense represents upfront and subsequent
development milestone payments incurred prior to regulatory approval to acquire
rights to in-process R&D projects through R&D collaborations, licensing
arrangements or other asset acquisitions. Acquired IPR&D and milestones expense
in the six months ended June 30, 2022 included a charge of $130 million as a
result of acquiring Syndesi Therapeutics SA and its portfolio of novel
modulators of the synaptic vesicle protein 2A, including its lead molecule
SDI-118, which is being evaluated to target nerve terminals to enhance synaptic
efficiency. There were no individually significant transactions during the three
months ended June 30, 2022 and the three and six months ended June 30, 2021.

Other Operating Income

Other operating income for the three and six months ended June 30, 2022 included
$172 million of income related to the sale of worldwide commercial rights of a
mature brand Pylera, which is used for the treatment of peptic ulcers with an
infection by the bacterium Helicobacter pylori. See Note 4 to the Condensed
Consolidated Financial Statements for additional information. Other operating
income for the three and six months ended June 30, 2021 included $68 million of
income related to the sale of a biologics facility.

Other Non-Operating Expenses (Income)

                                      Three months ended               Six months ended
                                           June 30,                        June 30,
(in millions)                          2022              2021         2022          2021
Interest expense               $      556              $  615      $   1,104      $ 1,247
Interest income                       (24)                 (9)           (33)         (19)
Interest expense, net          $      532              $  606      $   1,071      $ 1,228

Net foreign exchange loss      $       47              $   14      $      72      $    23
Other expense, net                  1,533               2,658            757        2,263


Interest expense, net decreased for the three and six months ended June 30, 2022
compared to the prior year primarily due to a lower average debt balance as a
result of deleveraging.

Other expense, net included charges related to changes in fair value of
contingent consideration liabilities of $1.6 billion for the three months and
$861 million for the six months ended June 30, 2022 and $2.7 billion for the
three months and $2.3 billion for the six months ended June 30, 2021. The fair
value of contingent consideration liabilities is impacted by the passage of time
and multiple other inputs, including the probability of success of achieving
regulatory/commercial milestones, discount rates, the estimated amount of future
sales of the acquired products and other market-based factors. For the three and
six months ended June 30, 2022, the change in fair value represented higher
estimated Skyrizi sales driven by stronger market share uptake, partially offset
by higher discount rates. For the three and six months ended June 30, 2021, the
change in fair value represented higher estimated Skyrizi sales driven by
stronger market share uptake, favorable Skyrizi clinical trial results and lower
discount rates.

Income Tax Expense

The effective tax rate was 22% for the three months and 11% for the six months
ended June 30, 2022 compared to 34% for the three months and 14% for the six
months ended June 30, 2021. The effective tax rate in each period differed from
the U.S. statutory tax rate of 21% principally due to the impact of foreign
operations which reflects the impact of lower income tax rates in locations
outside the United States, tax incentives in Puerto Rico and other foreign tax
jurisdictions, business development activities and accretion on contingent
consideration. The decrease in the effective tax rate for the three and six
months ended June 30, 2022 over the prior year was primarily due to differences
in the company's jurisdictional mix of earnings and accretion on contingent
consideration.

2022 Form 10-Q | [[Image Removed: abbv-20220630_g2.gif]] 33

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

                                        Six months ended
                                            June 30,
(in millions)                          2022          2021
Cash flows provided by (used in):
Operating activities                $   9,913      $ 9,767
Investing activities                   (1,461)        (584)
Financing activities                   (9,651)      (9,058)


Operating cash flows for the six months ended June 30, 2022 increased compared
to the prior year primarily due to improved results of operations resulting from
revenue growth, partially offset by the timing of working capital cash flows.

Investing cash flows for the six months ended June 30, 2022 included payments
made for net purchases of investment securities totaling $1.4 billion,
acquisitions and investments of $394 million and capital expenditures of
$305 million. Investing cash flows for the six months ended June 30, 2021
included capital expenditures of $383 million, payments made for acquisitions
and investments of $345 million and net sales and maturities of investment
securities totaling $9 million.

Financing cash flows for the six months ended June 30, 2022 included repayment
of $2.9 billion aggregate principal amount of the company's 3.45% senior notes.
Additionally, financing cash flows included repayment of a $2.0 billion floating
rate term loan due May 2025 and issuance of a new $2.0 billion floating rate
term loan as part of the term loan refinancing in February 2022. Financing cash
flows for the six months ended June 30, 2021 included repayment of $1.8 billion
aggregate principal amount of the company's 2.3% senior notes, €750 million
aggregate principal amount of the company's 0.5% senior euro notes and $750
million aggregate principal amount of floating rate senior notes.

Financing cash flows also included cash dividend payments of $5.0 billion for
the six months ended June 30, 2022 and $4.6 billion for the six months ended
June 30, 2021. The increase in cash dividend payments was primarily driven by
the increase in the quarterly dividend rate.

On June 23, 2022, the company announced that its board of directors declared a
quarterly cash dividend of $1.41 per share for stockholders of record at the
close of business on July 15, 2022, payable on August 15, 2022. The timing,
declaration, amount of and payment of any dividends by AbbVie in the future is
within the discretion of its board of directors and will depend upon many
factors, including AbbVie's financial condition, earnings, capital requirements
of its operating subsidiaries, covenants associated with certain of AbbVie's
debt service obligations, legal requirements, regulatory constraints, industry
practice, ability to access capital markets and other factors deemed relevant by
its board of directors.

The company's stock repurchase authorization permits purchases of AbbVie shares
from time to time in open-market or private transactions at management's
discretion. The program has no time limit and can be discontinued at any time.
AbbVie repurchased 8 million shares for $1.1 billion during the six months ended
June 30, 2022 and 5 million shares for $550 million during the six months ended
June 30, 2021.

Credit Risk

AbbVie monitors economic conditions, the creditworthiness of customers and
government regulations and funding, both domestically and abroad. AbbVie
regularly communicates with its customers regarding the status of receivable
balances, including their payment plans and obtains positive confirmation of the
validity of the receivables. AbbVie establishes an allowance for credit losses
equal to the estimate of future losses over the contractual life of outstanding
accounts receivable. AbbVie may also utilize factoring arrangements to mitigate
credit risk, although the receivables included in such arrangements have
historically not been a significant amount of total outstanding receivables.

Credit Facility, Access to Capital and Credit Ratings

Credit Facility

AbbVie currently has a $4.0 billion five-year revolving credit facility that
matures in August 2024. This credit facility enables the company to borrow funds
on an unsecured basis at variable interest rates and contains various covenants.
At June 30, 2022, the company was in compliance with all covenants, and
commitment fees under the credit facility were insignificant. No amounts were
outstanding under the company's credit facility as of June 30, 2022 and December
31, 2021.

2022 Form 10-Q | [[Image Removed: abbv-20220630_g2.gif]] 34

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Access to Capital

The company intends to fund short-term and long-term financial obligations as
they mature through cash on hand, future cash flows from operations or has the
ability to issue additional debt. The company's ability to generate cash flows
from operations, issue debt or enter into financing arrangements on acceptable
terms could be adversely affected if there is a material decline in the demand
for the company's products or in the solvency of its customers or suppliers,
deterioration in the company's key financial ratios or credit ratings or other
material unfavorable changes in business conditions. At the current time, the
company believes it has sufficient financial flexibility to issue debt, enter
into other financing arrangements and attract long-term capital on acceptable
terms to support the company's growth objectives.

Credit Ratings

In March 2022, Moody's Investors Service (Moody's) affirmed its Baa2 senior
unsecured long-term rating and the Prime-2 short-term rating. At the same time,
Moody's revised the outlook to positive from stable. Unfavorable changes to the
ratings may have an adverse impact on future financing arrangements; however,
they would not affect the company's ability to draw on its credit facility and
would not result in an acceleration of scheduled maturities of any of the
company's outstanding debt.

CRITICAL ACCOUNTING POLICIES

A summary of the company's significant accounting policies is included in Note
2, "Summary of Significant Accounting Policies" in AbbVie's Annual Report on
Form 10-K for the year ended December 31, 2021. There have been no significant
changes in the company's application of its critical accounting policies during
the six months ended June 30, 2022.

FORWARD-LOOKING STATEMENTS

Some statements in this quarterly report on Form 10-Q may be forward-looking
statements for purposes of the Private Securities Litigation Reform Act of
1995. The words "believe," "expect," "anticipate," "project," and similar
expressions, among others, generally identify forward-looking statements. 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 the forward-looking statements. Such risks and uncertainties
include, but are not limited to, failure to realize the expected benefits from
AbbVie's acquisition of Allergan, failure to promptly and effectively integrate
Allergan's businesses, challenges to intellectual property, competition from
other products, difficulties inherent in the research and development process,
adverse litigation or government action, changes to laws and regulations
applicable to our industry and the impact of public health outbreaks, epidemics
or pandemics, such as COVID-19. Additional information about the economic,
competitive, governmental, technological and other factors that may affect
AbbVie's operations is set forth in Item 1A, "Risk Factors," in AbbVie's Annual
Report on Form 10-K for the year ended December 31, 2021, which has been filed
with the Securities and Exchange Commission. AbbVie notes these factors for
investors as permitted by the Private Securities Litigation Reform Act of 1995.
AbbVie undertakes no obligation to release publicly any revisions to
forward-looking statements as a result of subsequent events or developments,
except as required by law.

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