Q2 2020 Abbvie Inc Earnings Call

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Good morning, and thank you for standing by welcome to the Abbvie second quarter Twentytwenty earnings Conference call, all participants will be able to listen only until the question and answer portion and you may ask a question by pressing star one Oh.

Operator: Good morning, and thank you for standing by. Welcome to the AbbVie second quarter 2020 earnings conference call. All participants will be able to listen only to the question and answer portion, and you may ask a question by pressing star one.

I'd now like to introduce Ms., Liz Shea Vice President of Investor Relations.

Good morning, and thanks for joining us on the call with me today are written Dallas Chairman of the Board and Chief Executive Officer, Michael Severino, Vice Chairman and President and Rob Michael Executive Vice President and Chief Financial Officer, joining us for the Q and a portion of the call is where Schumacher Vice Chairman external affairs, Chief legal officer, and corporate Secretary before we get started.

Operator: I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations. Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer, Michael Savarino, Vice Chairman and President, and Rob Michael, Executive Vice President and Chief Financial Officer. Joining us for the Q&A portion of the call is Laura Schumacher, Vice Chairman, External Affairs, Chief Legal Officer, and Corporate Secretary. Before we get started, I remind you that some statements we make today may be considered forward-looking statements for purposes of the private securities litigation.

Liz Shea: AbbVie cautions that these forward-looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on AbbVie's operations, results, and financial results that may cause actual results to differ materially from those indicated in the forward-looking statement. Additional information about these risks and uncertainties is included in our 2019 Annual Report on Form 10-K and in our other SEC filings. undertakes no obligation to us. On today's conference call, as in the past, non-GAAP financial measures will be used to help. These non-GAAP financial measures are reconciled with comparable GAAP financial measures, which can be found on our website.

I remind you that some statements we make today, maybe considered forward looking statements for purposes of the private Securities Litigation Reform Act of 1985.

I'd be cautions that these forward looking statements are subject to risks and uncertainties, including the impact of the code 19 pandemic on Abbvies operations results and financial results that may cause actual results to differ materially from those indicated in the forward looking statements.

Additional information about these risks and uncertainties is included in their 2019 annual report on form 10-K in or other SEC filings Abbvie undertakes no obligation to update these forward looking statements except as required by law on today's conference call as in the past non-GAAP financial measures will be used to help investors understand abbey's ongoing business performance. These non-GAAP.

Liz Shea: Please note that the second quarter financial results and guidance provided on today's call for sales, EPS, and line items of the P&L reflect a full period of legacy AbbVie operations and a partial year of the Allergan Portfolio since the transaction closed in early May of this year. In addition, we have provided a quarterly comparable historical trend analysis for key product revenues of the newly combined company as a supplemental table in our earnings report. This table supports the comparison of sales growth on a comparable operational basis.

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. Please note that the second quarter financial results and guidance provided on today's call for sales Es and line items of the TNL reflect a full period of legacy Abbvie operations and a partial year contribution from the Allergan portfolio.

Since the transaction closed in early May of this year. In addition, we've provided a quarterly comparable historical trend analysis for key product revenues of the newly combined company as a supplemental table in our earnings release. This quarter. This table supports the comparison of sales growth on a comparable operational basis, including full quarter current year and historical results for.

Liz Shea: Including Full Quarter, Current Year, and Historical Results for Comparable Operational Percent Changes are presented at a constant rate. For this comparison of underlying performance, all historically reported Allergan... and exclude the recent divestitures of Zantac and, Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to Rick. Thank you, Liz. Good morning, everyone.

Allergan on a pro forma basis comparable operational percent changes are presented at a constant at constant currency rates for this comparison of underlying performance. All historically reported allergan revenues have been recast informed.

Policies and exclude the recent divestitures untapped and biogas.

Following our prepared remarks, we'll take your questions. So with that I'll now turn the call over to Rick.

Rick Gonzalez: And thank you for joining us. Today, I'll discuss our second quarter performance and highlights, and for the first time, I'll provide our 2020 outlook for the newly combined company. Mike will then discuss recent advancements across R&D programs, and Rob will review the quarter and our updated guidance in more detail. Following our remarks, we'll take your questions.

Thank you Liz good morning, everyone and thank you for joining us today ill discuss our second quarter performance in Iowa.

And for the first time I'll provide our 2020 outlook for the newly combined company.

Mike will then discuss recent advancements gross R&D programs and Rob will review the quarter and our updated guidance in more detail. Following our remarks, we'll take your questions.

I'd like to start off by recognizing all of our employees, including those joining abbvie for Allergan for all of their hard work and dedication during this pandemic.

Rick Gonzalez: I'd like to start off by recognizing all of our employees, including those joining AbbVie from Allergan, for all of their hard work and dedication during this pandemic. The AbbVie team has been working diligently and carefully within our facilities and remotely to ensure that our business continues to operate properly and our patients continue to receive their medicine. Before I speak to the strong financial performance this quarter, I'd like to characterize the state of the recovery of the business from the COVID crisis. Let me start with the legacy AbbVie side of the business, which demonstrated robust performance leading into the pandemic and has remained resilient. The impact on continuing patients for Humira and new patients for RENVO, Skyrizzy, and Venclexta was not as pronounced as we had previously anticipated.

Rick Gonzalez: While patient flow has not recovered in most therapeutic segments, we're encouraged by the level of stabilization and the recent positive demand trend. Overall, the legacy AbbVie business continues to perform very well, with standalone revenue growth in the second quarter of approximately eight and a half percent on an operational basis, excluding the negative impact from COVID. On the Legacy Allergan side of the business, we saw a significant COVID-related impact on Botox Therapeutics and our Aesthetics business in the second quarter. However, both businesses are seeing a rapid recovery and are now performing near pre-COVID levels. Other key brands, such as Velar and Ubrelvi, were impacted in a manner similar to the AbbVie-based business, and we're pleased with the recent trends and progress. Overall, COVID had a substantial impact on second-quarter reported revenue, with an estimated net unfavorable impact of more than $900 million.

Heavy team has been working diligently and carefully within our facilities and remotely to ensure that our business continues to operate properly and locations continue to receive their medicines.

Before I speak to the strong financial performance this quarter I'd like to characterize the state of the recovery of the business from the coated prices, let me start with the legacy Abbvie side of the business.

Rick Gonzalez: However, by the end of June, the total business had recovered to more than 90% of pre-COVID levels. So I'm pleased with the resilience and the rapid recovery across our portfolio, and I'm confident in the continued strong underlying demand and performance of the combined new company. Despite the impact of COVID, we delivered a strong second quarter performance. Adjusted earnings per share of $2.34 were well above our expectations.

Rick Gonzalez: The $0.21 feet included $0.11 of net accretion from Allergan, as well as $0.10 of favorable performance versus the midpoint of our standalone guide. Total revenues were $10.4 billion, including approximately $8.4 billion of legacy AbbVie sales, significantly above our expectations for the standalone portfolio, but continued robust performance in both HEMONC and immunology, despite the impact of COVID. PMOC revenues of approximately $1.6 billion were up strong double digits again this quarter, and Provica sales grew approximately 17% on an operational basis, reflecting continued strong performance in CLL, where we remain the clear market leader, and Clutch DeSales were up more than 80% on an operational basis, with strong growth in CLL and AML.

Rick Gonzalez: During the quarter, we also announced a strategic collaboration with GenMap to further build our oncology portfolio with a CD3 by CD20 bispecific antibody that has the potential to be a best-in-class therapy across B-cell malignancies. Our leading immunology business delivered revenues of more than $5.3 billion, reflecting growth of more than 8.5% on an operational basis. U.S. humeral revenue growth remains strong, up 5%, with continued demand from the large installed patient base, partially offset by the impact of COVID-19. The international and humeral biosimilar dynamics in the quarter were better than our expectations. Guy Rizzi continues to perform well and has maintained its leading in-place psoriasis patient share, which includes both new and switching patients, at more than 30 percent.

Which is demonstrated robust performance leading into a pandemic and has remained resilient.

Impact on continuing patients for Humira and new patients were when boat Scott Rosy and Venclexta, we're not as pronounced as we previously anticipated well patient flow has not recovered and most therapeutic segments. We're encouraged by the level of stabilization and the recent positive demand trends.

Overall, the legacy Abbvie business continues to perform very well with Standalone revenue growth in the second quarter of approximately 8% on an operational basis, excluding the negative impact from Covance.

On the legacy Allergan side of the business, we saw a significant improvement related impacts.

On botox therapeutic and our instead its business in the second quarter.

Both businesses are seeing a rapid recovery and are now performing near pre Cove as levels. Other key brands such as very large and you broke being were impacted in a manner similar to the Abbvie based business and we're pleased with the recent trends and progress.

Overall corporate had a substantial impact on second quarter reported revenues with an estimated net unfavorable impact of more than $900 million. However by the end of June the total business had recovered to more than 90% of pre cobas levels. So I'm pleased with the resilience and the.

Rapid recovery across our portfolio and I'm confident in the continued strong underlying demand and performance of the combined new company.

Despite the impact from Covidien, we delivered a strong second quarter performance adjusted earnings per share of $2 in 34 cents were well above our expectations. The 21 cents beat included 11 cents of net accretion from Allergan them as well as 10.

Rick Gonzalez: As expected, we saw modest delays to new patient starts during the quarter as a result of the COVID-19 dynamic. However, recent prescription trends and increasing enrollment in our Ambassador Program, two leading indicators, demonstrate a strong growth trajectory and support our full-year guidance of $1.4 billion. We're also seeing very encouraging trends for Winvoke, where rheumatology office visits are approaching pre-COVID levels. Revenues were up more than 70% on a sequential basis and currently reflect 15% in-play RA patient share, which is now nearly at parity to Humira, the market leader in in-play share and above all other agents in the sector. We're also making excellent progress with our immunology pipeline, which Mike will discuss further momentarily. Additionally, as I noted during the quarter, we successfully completed the acquisition of Allergan, creating a stronger and more diverse AbbVie.

Sense of favorable performance versus the midpoint of our Standalone guidance.

Total revenues were $10.4 billion, including approximately $8.4 billion of legacy Abbvie sales significantly above our expectations for the Standalone portfolio with continued robust performance in both human and immunology, despite the impact from cobot.

Seamap revenues of approximately $1.6 billion were up strong double digits again this quarter Imbruvica sales grew approximately 17% on an operational basis, reflecting continued strong performance in CLL, where we remain nuclear market leader.

Reflects the sales were up more than 80% on an operational basis with strong growth in CLL and am Mel.

During the quarter, we also announced a strategic collaboration with Genmab to further build our oncology portfolio with the Cdthree by CD 20 by specific antibody that has the potential to be a best in class therapy across B cell malignancies.

Our leading immunology business delivered revenues are more than $5.3 billion, reflecting growth of more than 8.5% on an operational basis.

US you know revenue growth remained strong up 5% with continued demand from the large installed patient base, partially offset by the impact of covert 19.

International Humira Biosimilar dynamics in the quarter were better than our expectations.

Sky risen continues to perform well and has maintained its leading in place psoriasis patients share, which includes both new and switching patients at more than 30%.

As expected we saw modest delays to new patient starts during the quarter as a result of because over 19 dynamics.

However, recent prescription trends in increasing enrollment in our ambassador program to leading indicators demonstrated strong growth trajectory and support our full year guidance of $1.4 billion.

We're also seeing very encouraging trends for wind Voake, where rheumatology office visits are approaching pre covert levels Rainbow revenues were up more than 70% on a sequential basis and currently reflect 15% in play or a patient share which is now nearly at parity chief.

Humira the market leader in employee share and above all other agents in the segment.

We're also making excellent progress with our immunology pipeline, which Mike will discuss further momentarily.

As I noted during the quarter, we successfully completed the acquisition of our again, creating a stronger and more diverse abbvie.

Rick Gonzalez: The transaction significantly expands and diversifies AbbVie's revenue base and complements our existing leadership positions in immunology and hematological oncology, with additional growth franchises in aesthetics and neuroscience. We have growth opportunities in neuroscience with Botox Therapeutics, Baylor, and Ubrelda. And we have the leading global aesthetics business with flagship brands, including Botox Cosmetics and Juvedo. I'll start with neuroscience, which had sales of roughly $735 million for AbbVie in the second quarter. Baylor continues to demonstrate rapid growth and is well on its way to surpassing $1 billion in annual revenue.

The transaction significantly expands and Diversifies Abbvies ROE revenue base and complements our existing leadership positions in immunology and Hematological oncology with additional growth franchises in hysterics and neuroscience.

We have growth opportunities in neuroscience with Botox therapeutics, Baylor and you broke.

And we have the leading global statics business with flagship brands, including Botox cosmetics.

And Juvederm.

I'll start with neuroscience, which had sales of roughly $735 million to abbvie in the second quarter.

Well our continues to demonstrate rapid growth and as well on its way to surpassing $1 billion in annual revenues underlying demand has remained resilient. Despite the cobot 19 pandemic with strong double digit growth again this quarter.

Rick Gonzalez: Underlying demand has remained resilient despite the COVID-19 pandemic, with strong double-digit growth again this quarter. We see significant room for continued expansion within Baylor's existing indications, bipolar disorder, and schizophrenia. Major Depressive Disorder, or MDD, represents another potential large indication, with two Phase III trials well underway.

We see significant room for continued expansion within balers existing indications bipolar disorder and schizophrenia.

Major depressive disorder or MDD represents another potential large indication with two phase three trial is well underway.

Also within those items, we now have a portfolio migraine therapies that have the potential to support long term growth in a highly attractive and underserved market.

Rick Gonzalez: Also within neuroscience, we now have a portfolio of migraine therapies that have the potential to support long-term growth in a highly attractive and underserved market. Our migraine portfolio is anchored by Botox Therapeutic, which had revenues of roughly $300 million for AbbVie in the second quarter. Despite multiple new competitive entrants, Botox Therapeutics has largely retained its total treated patient base, a testament to its efficacy, safety, and brand recognition. Like many physician-administered products, Botox Therapeutics saw a significant impact from COVID-19 in the second quarter, with global sales down approximately 20% on a comparable operational basis. However, we're pleased by the recent data trends, which demonstrate a fast recovery, and performance is now close to pre-COVID levels. The launch of Ubrelvi, the first-to-market and leading oral CGRP for acute migraine, is off to an excellent start.

Our migraine portfolio is anchored with botox therapeutic which had revenues of roughly $300 million to abbvie in the second quarter. Despite multiple new competitive entrants botox therapeutic is largely retain its total treated patient base, a testament to its efficacy safety and Brad.

And recognition.

Like many physician administered products botox therapeutic saw significant impact from Kobin 19 in the second quarter with global sales down approximately 20% on a comparable operational basis. However, we are pleased by the recent data trends, which demonstrate a fast recovery.

And performance is now close to pre cobot levels.

The launch of you welding the first to market and leading all CRP for acute migraine is off to an excellent start feedback from physicians has been very positive given new barrel. These efficacy safety and convenient dosing profile relative to current standards of care.

Rick Gonzalez: Feedback from physicians has been very positive, given Ubrelvi's efficacy, safety, and convenient dosing profile relative to current standards of care. Commercial access for UberLV is now at 70%, which, along with increased consumer promotion, will further support the product's launch trajectory. We're also developing a tozopam for the prevention of episodic and chronic migraines.

Commercial access through building is now at 70%, which along with increased consumer promotion will further support the products launch trajectory.

We're also developing a toe Japan for the prevention of episodic and chronic migraine. We recently disclosed positive topline results from a phase three study in episodic migraine, which will support regulatory submission early next year.

Rick Gonzalez: We recently disclosed positive top-line results from a Phase III study in episodic migraine, which will support regulatory submission early next year. As a fourth pillar of growth, we now have the world's leading global aesthetics franchise, which generated sales of roughly $480 million for AbbVie in the second quarter. However, as anticipated, we saw a decline in year-over-year comparable operational growth with aesthetics healthcare providers closed during the initial phase of CO

As a fourth pillar of growth, we now have the world's leading global aesthetics franchise, which generated sales of roughly $480 million to abbvie in the second quarter as anticipated we saw a decline in year over year comparable operational growth with the steps healthcare providers close during.

The initial phase of coven.

It's now been roughly two months since most major geographies have begun to reopen.

Rick Gonzalez: It's now been roughly two months since most major geographies have begun to reopen, and we're pleased with the strong recovery trends we're seeing. As of the end of June, the vast majority of our aesthetics accounts have reopened in the U.S., and we're seeing considerable pent-up demand. Current U.S. aesthetic revenues have recovered and are approaching 95% of pre-COVID levels. Outside the U.

And we're pleased with the strong recovery trends we're seeing.

As of the ended June the vast majority of our aesthetics accounts of reopened in the U.S and we're seeing considerable pent up demand current use is static revenues have recovered and are approaching 95% of pre covert levels.

Outside the US we're also seeing steady recovery trends in China, and Western Europe current internationalist statics revenues have recovered to approximately 90% of pre covert levels. Overall, we're very pleased with the momentum were seeing our aesthetics franchise.

Rick Gonzalez: Current international aesthetics revenues have recovered to approximately 90% of pre-COVID levels. Overall, we're very pleased with the momentum we're seeing on our aesthetics franchise. More broadly, we see aesthetics as a durable cash pay business with an opportunity for significant market growth, as well as continued new innovation, driving long-term performance. While strategically important, the acquisition of Allergan will also drive strong financial benefits. The integration has been relatively seamless, and we're impressed by the caliber of talent that we've welcomed into AbbVie.

More broadly.

We see a statics is a durable cash pay business with an opportunity for significant market growth as well as continued new innovation driving long term performance.

Well strategically important the acquisition of dollar game will also drives strong financial benefits integration has been relatively seamless and were impressed by the caliber talent that we welcome in the Abbvie.

We remain on track with our synergy target of more than $2 billion and expense rationalization by the third year from transaction closing, which Rob will discuss further in his prepared remarks here momentarily.

Rick Gonzalez: We remain on track with our synergy target of more than $2 billion in expense rationalization by the third year from transaction closing, which Rob will discuss further in his prepared remarks here momentarily. When you take these synergies into consideration, along with the continued P&L leverage from our expected sales growth, we expect further operating margin expansion over the next couple of years. While the COVID crisis remains a fluid situation, our business continues to remain resilient and demonstrate strong underlying growth. Although we continue to carefully watch COVID-related events in the U.S., we're pleased with our recent business trends and the progress we're making towards recovery, and we expect performance will continue to ramp to normalized levels over the course of the second half of 2020. With these current assumptions and based on our recent outperformance of our base business, today we're issuing full year 2020 adjusted earnings per share guidance for our new combined company of $10.35 to $10.45, reflecting growth of 16.3% at the midpoint.

When you take these synergies into consideration along with the continued TNL leverage from our expected sales growth. We expect further operating margin expansion over the next couple of years.

While the covered crisis remains of fluid situation, our business continues to remain resilient and demonstrated strong underlying growth.

Although we continue to carefully watch covert related events in the US we're pleased with our recent business trends and the progress we're making towards recovery and we expect performance will continue to ramp to normalized levels over the course of the second half of 2020.

With these current assumptions and based on our recent outperformance of our base business today, we're issuing full year 2020 adjusted earnings per share guidance for our new combined company of $10.35 to $10.45, reflecting growth of 16 point.

3% at the midpoint.

This guidance assumes 70 cents of net accretion from the Allergan transaction in 2020, which represents 11% accretion on an annualized basis ahead of our initial projections for the transaction. This despite the cobot impact the outlined earlier.

Rick Gonzalez: This guidance assumes $0.70 of net accretion from the Allergan transaction in 2020, which represents 11% accretion on an annualized basis, ahead of our initial projections for the transaction, despite the COVID impact that I outlined earlier. Overall, we continue to see good momentum across our total portfolio and across our pipeline. We reported a very strong second quarter performance and remain encouraged by the recent recovery trends, which are faster than we expected. We continue to expect the COVID pandemic will have a transient impact on our business, with further recovery continuing through the second half of 2020. With the closing of the Allegan transaction, AbbVie is well-positioned for enhanced long-term growth potential, a growing dividend, rapid debt repayment, and strong investment in innovation across our therapeutic category. With that, I'll turn the call over to Mike.

Overall, we continue to see good momentum across our total portfolio and across our pipeline. We reported a very strong second quarter performance and remain encouraged by the recent recovery trends, which are faster than we expected.

We continue to expect decoded pandemic, we'll have a transient impact on our business with further recovery continuing through the second half of 2020.

With the closing of the Allegheny transaction Abbvie is well positioned for enhance long term growth potential of growing dividend rapid debt repayment and strong investment and innovation across our therapeutic categories with that I'll turn the call over to Mike Mike.

Mike: Thank you, Rick. We had a very productive quarter, with continued progress across all stages of our pipeline. Additionally, with the recent closing of the Allegan acquisition, we added promising pipeline assets in the areas of aesthetics and neuroscience. We look forward to sharing updates as those programs progress through development. In immunology, we continue to advance our programs for RINBOK and SCIRIS-E in several new disease areas. This year, we intend to submit regulatory applications for three additional indications for RINVO. In June, we submitted applications for RENVOC and psoriatic arthritis, and we expect to file applications for atopic dermatitis and ankylosing spondylitis later this year. We also recently reported top-line results from our three registrational trials for RINVOC and atopic dermatitis. Two of these Phase 3 studies, Measure Up 1 and Measure Up 2, evaluated RINVOC as monotherapy for the treatment of adolescent and adult subjects with moderate to severe atopic dermatitis or candidates for systemic therapy.

Thank you Rick.

We had a very productive quarter with continued progress across all stages of our pipeline.

Additionally, with the recent closing of the Allegan acquisition, we added promising pipeline assets in the areas of aesthetics and neuroscience.

We look forward to sharing updates as those programs progress through development.

In immunology, we continue to advance our programs are in bulk and Sky result in several new disease areas.

This year, we intend to submit regulatory applications for three additional indications for invoke.

In June we submitted applications for Renvela can sorry, attic arthritis, and we expect to file applications for a topic dermatitis, an ankle dosing spondylitis later this year.

We also recently reported topline results from our three Registrational trials are involved in atopic dermatitis.

Two of these phase three studies measure up one and measure up to evaluated renvela as a monotherapy for the treatment of adolescent and adult subjects with moderate to severe atopic dermatitis for candidates for systemic therapy.

Mike: In the Measure Up 1 and Measure Up 2 studies, both doses of RINVOC met all primary and secondary objectives, demonstrating significant improvement in skin clearance and itch compared to placebo. In Measure Up One, roughly 70% of patients receiving the 15-milligram dose and 80% of patients on the 30 mg dose achieved a 75% or greater improvement in skin lesions by week 16. We saw similar rates of skin clearance in the Measure Up 2 study, with roughly 60% of patients receiving the low dose and 73% of patients on the high dose achieving a 75% or greater improvement by week 16. We also saw very rapid responses in these, with clinically meaningful reductions in itch observed as early as one day after the first dose in patients receiving 30 mg, and two days after the first dose in patients receiving 15 million in both studies.

In the measure up one in measure up to studies, both doses of rental met all primary and secondary endpoints demonstrating significant improvement in skin clearance and niche compared to placebo.

In measure up one roughly 70% of patients receiving the 15 milligram dose and 80% of patients on the 30 milligram dose achieved to 75% or greater improvement in skin lesions by weak 16.

We saw similar rates of skin clearance in the measure up to study with roughly 60% of patients receiving the low dose and 73% of patients on the high dose, achieving a 75% or greater improvement by weeks weak 16.

We also saw very rapid responses in these studies with clinically meaningful reductions in niche observed as early as one day. After the first dose in patients receiving 30 milligrams and two days after the first dose in patients receiving 15 milligrams in both studies.

We also saw very strong results in our third Registrational trial, the add up study.

Mike: We also saw very strong results in our third registrational trial, the ADD-UP study, which evaluated RINVOC in combination with topical corticosteroids. Similar to the results from the two measure-up trials, RINVOC met all primary and secondary endpoints in the add-on study, with patients who received RINVOC showing significant improvements in skin clearance and reduction in itch compared to patients receiving placebo plus topical steroids following 16 weeks Treatment with RENVOC also led to a significant increase in the number of steroid-free days, and more patients receiving RENVOC were able to stop using topical corticosteroids altogether.

Which evaluated ran belk in combination with topical corticosteroids.

Similar to the results from the to measure up trials reinvestment all primary and secondary endpoints in the add up study.

With patients who received bring real rainbow showing significant improvements in skin clearance and reduction in etch compared to patients receiving placebo plus topical steroids falling 16 weeks of treatment.

Treatment with rent bulk also led to a significant increase in the number of steroids free days and more patients receiving lynbrook, we're able to stock topical corticosteroids altogether.

We're very encouraged by both the level of efficacy and the safety profile, we've seen across all three phase III atopic dermatitis studies and we remain very confident that renvela has the potential to provide a strong benefit risk profile in moderate to severe atopic dermatitis.

Mike: We're very encouraged by both the level of efficacy and the safety profile we've seen across all three Phase III atopic dermatitis studies, and we remain very confident that RINVLC has the potential to provide a strong benefit-risk profile in moderate to severe atopic dermatitis. In addition to these three registrational studies, we are also evaluating RINPOC in a head-to-head Phase 3 trial against dupilumab and expect to see data from this study later this year. In the area of inflammatory bowel disease, our Phase 3 program for RINVOC and ulcerative colitis is progressing ahead of schedule.

Okay.

In addition to these three Registrational studies, we're also evaluating renvela and a head to head phase III trial against diplomat and expect to see data from this study later this year.

In the area of inflammatory bowel disease, our phase three program for invoking ulcerative colitis is progressing ahead of schedule.

And we now expect to see topline data from the first phase three induction study later this year.

Mike: And we now expect to see top-line data from the first phase 3 induction study later this year. We have also recently reported top-line results from a proof-of-concept study evaluating our novel TNF steroid conjugate, ABBV3373, in RA. In this study, our goal was to drive a greater reduction in disease activity beyond the levels that can be achieved with Humira or other high-efficacy agents such as Renvo. To achieve adequate statistical power, we used pre-planned historical data from Humira in combination with in-file data when comparing ABBV 3373 to Humira. The study used two analyses for the primary endpoint, which evaluated improvement from baseline in DAS 28.

We also recently reported topline results from a proof of concept study evaluating our novel TNF started conjugate ADB Threethree seven three and Ray.

Mike: The first analysis used a propensity-matching strategy to compare 3373 with historical Humira data. This analysis showed a greater change in DAS 28 from baseline to week 12 for 3373 compared to the pre-specified Humira data. The second analysis used a Bayesian approach to compare 3373 to a combined in-trial and historical Humira dataset, and this analysis predicted with a 90% probability that 3373 was associated with a greater improvement in DAS 28. Based on these encouraging results, we plan to advance the TNF-starred conjugate program in RA, with a phase 2b dose-ranging study expected to begin in the first half of 2021. We also plan to begin clinical studies next year in other immune-mediated diseases. Also in the area of immunology, we're making good progress advancing the programs for Skyrizzy in new disease areas. We expect to see data from Phase III studies in psoriatic arthritis later this year and in Crohn's at the end of this year or early next, with regulatory submissions for both indications expected in 2021.

In this study our goal is to drive a greater reduction in disease activity beyond the levels that can be achieved with humira or other high efficacy agents such as rent book.

To achieve adequate statistical power, we used preplanned historical acumera data in combination with any trial data when comparing ADB 33732 humira.

The study use to analyses for the primary endpoint, which evaluated improvement from baseline in Das 28 score.

The first analysis used a propensity matching strategy to compare threethree seven three with historical he married data.

This analysis showed a greater change in das 28 from baseline to week 12 for 3373 compared to the pre specified humira data.

The second analysis used a basie an approach to compare threethree seventhree to a combined in trial and historical he married dataset.

And this analysis predicted with a 90% probability that threethree seven three was associated with a greater improvement in Das 28.

Based on these encouraging results we plan to advance the TNF started conjugate program in our area with a phase twob dose ranging study expected to begin in the first half of 2021.

We also plan to begin clinical studies next year and other immune mediated diseases.

Also in the area of immunology, we're making good progress advancing the programs for Sky Rizzi in new disease areas.

We expect to see data from phase three studies in Psoriatic arthritis later, this year and in Crohns disease at the end of this year or early next year with regulatory submissions for both indications expected in 2021.

In oncology.

Mike: We continue to advance our HEMONC strategy with several important data readouts and study starts occurring this year. We've established a leading HEMONC portfolio within Bruvica and Benck-Lexta in areas such as CLL and AMC, and we will continue to generate data to demonstrate the utility of both drugs across a wide range of patient populations and cancers at the recent IHA Congress. Detailed results from the Phase 3 VLEA study were reported, which showed that treatment with VanClexta plus azacitidine resulted in a 34% reduction in the risk of death compared to azacitidine plus placebo in AML patients who are ineligible for intensive chemotherapy. The median overall survival for patients in the Venclextra arm was 14.7 months versus 9.6 months in the placebo arm. Patients in the BenClexa arm also showed more than double the rate of composite complete remission compared to those treated with azacitidine alone. This filing is currently being reviewed by the FDA under the Real-Time Oncology Review Program and Project Orbit. To date, the AML program has focused on Benklecht's disease as a frontline treatment for transplant-ineligible patients.

We continue to advance our Hmong strategy with several important data readouts in study starts occurring this year.

We've established a leading hmong portfolio with Imbruvica and Venclexta in areas, such as CLL and ammo.

And we will continue to generate data to demonstrate the utility of both drugs across a wide range of patient populations and cancer types.

At the recent Ehow Congress.

Detailed results from the phase III. The Alley Ace study were reported which showed that treatment with a combination of Venclexta plus eight decitabine resulted in a 34% reduction in the risk of death compared to eight decitabine plus placebo in AML patients who are ineligible for intensive chemotherapy.

The median overall survival for patients in the Venclexta arm was 14.7 months versus 9.6 months in the placebo arm.

Patients in the Venclexta arm also showed more than double the rate of composite complete remission compared to those treated with Asia Decitabine alone.

This filing is currently being reviewed by the FDA under the real time Oncology review program and project Orbis.

To date, the AML program has focused on venclexta views as of frontline treatment in transplant ineligible patients.

This year, we're expanding the program into other patient segments with the goal of establishing Venclexta as the gold standard across the AML patient spectrum.

Mike: This year, we are expanding the program into other patient segments with the goal of establishing Venclexta as a gold standard across the AML patient spectrum. Earlier this year, we initiated two Phase III studies evaluating Venkata as a maintenance therapy in AML. One trial in fit patients with AML who have received a stem cell transplant but remain at high risk for relapse, and a second trial in patients with AML who are in first remission after receiving conventional induction and consolidation chemotherapy.

Earlier this year, we initiated two phase three studies evaluating venclexta as a maintenance therapy in AML.

One trial and fit patients with AML, who have received stem cell transplant, but remain at high risk for relapse and a second trial in patients with AML during first remissions after receiving conventional induction and consolidation chemotherapies.

In addition building upon the survival advantage observed in the transplant in eligible population we are planning to initiate a new randomized study later this year testing venclexta in combination with intensive chemotherapy in patients who are eligible for more intensive induction regimens.

Mike: In addition, building upon the survival advantage observed in the transplant-ineligible population, we are planning to initiate a new randomized study later this year testing Venclexta in combination with intensive chemotherapy in patients who are eligible for more intensive induction regimens. Our comprehensive development program will position VenClexta as a foundation for combination therapies in AML across all patient segments. We also recently announced a broad oncology collaboration with GenMap to jointly develop and commercialize three next-generation bispecific antibody products and establish a discovery collaboration to create additional differentiated antibody-based therapeutics for cancer. The lead asset in this partnership, Epiridomab, a CD3 by CD20 bispecific antibody, has demonstrated a strong efficacy profile, favorable safety, and a more convenient dosing regimen in early phase trials. We believe that Karitimab has the potential to become a best-in-class therapy across a number of B-cell malignancies, including diffuse large B-cell lymphoma and follicular lymphoma, and we are rapidly advancing it to Phase III trials.

Our comprehensive development program will position Venclexta as a foundation for combination therapies in AML across all patient segments.

We also recently announced abroad oncology collaboration with Gen man to jointly develop and commercialize three next generation by specific antibody products and establish a discovery collaboration to create additional differentiated antibody based therapeutics for cancer.

The lead asset in this partnership have created a man a cdthree by Cdtwenty by specific antibody has demonstrated a strong efficacy profile favorable safety and a more convenient dosing regimen in early phase trials.

We believe that thread and add has the potential to become a best in class therapy across a number of b cell malignancies, including diffuse large b cell lymphoma, and Follicular lymphoma, and we're rapidly advancing to phase III trials.

And lastly, a few updates from other areas of our pipeline.

Mike: And lastly, a few updates from other areas of our pipeline. We previously presented positive progression pre-survival data from two phase three studies for bilirubin in front-line ovarian cancer and BRCA breast cancer. Based on developments in the field and additional discussions with the FDA, we will not be submitting regulatory applications without mature overall survival data. We will continue to follow patients in the ongoing trials as overall survival data mature. In iCare, we recently announced receipt of a complete response letter from the FDA for the Abicapar BLA. The CRL indicated that the rate of intraocular inflammation observed in the Phase III program resulted in an unfavorable benefit-risk ratio. We are currently reviewing the ABICAPAR program to determine next steps and will provide updates as they become available. In Women's Health, during the quarter, we received FDA approval of Orian as the first non-surgical oral treatment for the management of heavy menstrual bleeding associated with uterine fibroids in premenopausal women. This new non-surgical treatment represents an important therapeutic option for women suffering from uterine fibrosis and Neuroscience.

We previously presented positive progression free survival data from two phase three studies for deliberate in frontline ovarian cancer and bracket breast cancer.

Based on developments in the field and additional discussions with the FDA, we will not be submitting regulatory applications without mature overall survival data.

We will continue to follow patients in the ongoing trials as overall survival data mature.

In Eyecare, we recently announced receipt of a complete response letter from the FDA for the pickup Harvey ally.

The CRL indicated that the rate of intra ocular inflammation observed in the phase three program resulted in an unfavorable benefit risk profile ratio.

We are currently reviewing their big apart program to determine next steps and will provide updates as they become available.

In women's health in the quarter, we received FDA approval of Oregon as the first nonsurgical oral treatment for the management of heavy menstrual bleeding associated with uterine fibroids in pre menopausal women.

This new non surgical treatment represents an important therapeutic option for women suffering from uterine fibroids.

And in neuroscience.

We recently reported topline results from a phase three study evaluating until Japan for the prevention of episodic migraine.

Mike: We recently reported top-line results from a Phase III study evaluating Etojapan for the prevention of episodic migraines. In this study, all three doses of Etojapan met the primary endpoint, evaluating the change from baseline in mean monthly migraine days across the 12-week treatment period. The two higher doses, 30 mg and 60 mg, also met all secondary endpoints, while the 10 milligram dose met four out of six of the second

In this study all three doses of until Japan met the primary endpoint evaluating the change from baseline in mean monthly migraine days across the 12 week treatment period.

The two higher doses 30 milligrams and 60 milligrams also met all secondary endpoints, while the 10 milligram dose met for out of sex of the secondaries.

Our again had previously reported positive results from one registration, enabling studies and following the second positive study, we plan to submit our regulatory applications and episodic migraine prevention in the first quarter of 2021.

Rob: Allegan had previously reported positive results from one registration-enabling study, and following this second positive study, we plan to submit our regulatory applications for episodic migraine prevention in the first quarter of 2021. In summary, we've seen tremendous progress across all stages of our pipeline in the first half of the year, and we remain on track for further advancements in the remainder of 2020. With that, I'll turn the call over to Rob for additional comments on our second quarter performance and financial outlook.

In summary, we've seen tremendous progress across all stages of our pipeline in the first half of the year and we remain on track for further advancements in the remainder of 2020.

With that I'll turn the call over to arrive for additional comments on our second quarter performance and financial outlook, Rob. Thank you Mike.

Rob: Thank you, Mike. Starting with the second quarter results, we will deliver top and bottom line performance ahead of expectations. We reported adjusted earnings per share of $2.34, above our guidance midpoint by $0.21. This includes $0.10 of stronger performance from Legacy AbbVie and $0.11 of accretion from Allergate. Total net revenues were $10.4 billion, including $2 billion in sales contribution from the Allergan Portfolio. Legacy AbbVie was approximately $300 million ahead of our stand-alone sales force, driven by Ren Volk, Sky Rizzi, and Humero. COVID-related inventory stocking for the first quarter largely reversed as expected. U.S. Humira sales were approximately $4 billion, ahead of expectations due to the lower impact from COVID on continuing patient prescriptions. Wholesale or inventory levels remain below half a month in the quarter.

Rob: International Humerus Sales were $863 million, down 17.4% operationally, reflecting biosimilar competition across Europe and other international markets, and ahead of our expectations. Guy Rizzi Global Sales were $330 million, with continued strong U.S. in-play market share. We also continue to see robust demand for Rinvoke, with sales of $149 million in the quarter and a rapid increase in U.S. in-play market share. Bruvica Global Net Revenues were approximately $1.3 billion, up 17.2%, driven by continued strong performance in CLL. Benklexa revenues were $303 million, with strong demand across all approved indications. Global Maverick sales were $376 million, down 51.4% on an operational basis, as treated patient volumes declined during the COVID pandemic. Allergan Aesthetics contributed sales of $481 million in the quarter.

Starting with second quarter results, we deliver top and bottom line performance ahead of expectations. We reported adjusted earnings per share of $2.34 above our guidance midpoint by 21 cents. This includes 10 cents a stronger performance from legacy Abbvie and 11 cents of accretion from Allergan.

Rob: Botox Cosmetic, with sales of $226 million, and Juvederm, with sales of $113 million, are both seeing a faster than expected recovery from the COVID pandemic. Neuroscience Global revenues were $734 million. These results were led by Botox Therapeutic, Raylar, and Ubrelvi, with combined sales of more than $500 million. We also saw a significant contribution from our iCare, which had global sales of $417 million. Starting now, the P&L profile for the second quarter. The Adjusted Gross Margin was 82.8% of sales, and Adjusted R&D Investment was 12.8% of sales. And Adjusted SG&A Expense was 22.9% of sales. The adjusted operating margin ratio was 47% of sales, including a negative impact of 70 basis points due to the reversal of COVID-related inventory stocking from the first quarter. The Adjusted Net Interest Expense was $484 million, and the adjusted tax rate was 11.4%.

Total net revenues were $10.4 billion, including $2 billion in sales contribution from the Allergan portfolio.

Legacy Abbvie was approximately $300 million ahead of our Standalone sales guidance, driven by RIN bulk sky Rizzi and Humira.

Covert related inventory stocking for the first quarter largely reverse as expected.

You are generic sales were approximately $4 billion ahead of expectations due to lower impact from Covance and continuing patient prescriptions.

Wholesaler inventory levels remain below half a month in the quarter.

International Humira sales were $863 million down, 17.4% operationally, reflecting biosimilar competition across Europe, and other international markets and ahead of our expectations.

Got resi global sales were $330 million with continued strong use and play market share.

We also continue to see robust demand for invoke with sales of $149 million in the quarter and a rapid increase in us and play market share.

Hematologic oncology global sales were nearly $1.6 billion up 25.8% on operational basis with continued strong performance of both Imbruvica and Venclexta.

Imbruvica Global net revenues were approximately $1.3 billion up 17.2% driven by continued strong performance in CLL.

Thanks, Alexia revenues were $303 million with strong demand across all approved indications.

Global Maverick sales were $376 million down 51.4% on operational basis as treated patient volumes have declined during the covert pandemic.

Our again aesthetics contributed sales of $481 million in the quarter.

Botox cosmetic with sales of $226 million and Juvederm with sales of $113 million are both seeing a faster than expected recovery from the covert pandemic.

Neuroscience Global revenues were $734 million. These results were led by Botox therapeutic railcar annual belviq with combined sales of more than $500 million.

We also saw a significant contribution from our eye care business, which had global sales of $417 million.

Turning now to the piano profile for the second quarter.

Adjusted gross margin was 82.8% of sales adjusted R&D investment was 12.8% of sales and adjusted selling expense was 22.9% of sales.

The adjusted operating margin ratio was 47% of sales, including a negative impact of 70 basis points due the reversal of cobot related inventory stocking from the first quarter.

Adjusted net interest expense was $484 million and the adjusted tax rate was 11.4%.

Today, we're issuing combined company guidance for the first time.

Rob: Today we are issuing combined company guidance for the first time. As Rick previously discussed, we are closely monitoring the impact of the COVID pandemic and have factored the latest trends into our updated forecast. We now expect fully or adjusted earnings per share between $10.35 and $10.45, including $0.70 of accretion from the Allergan transaction, which represents an annualized contribution of 11%. Also excluded from this guidance is $6.23 of known intangible amortization and specified items.

As Rick previously discussed we're closely monitoring the impact of the covert pandemic and a factor the latest trends into our updated forecast.

We now expect full year adjusted earnings per share between $10.35 and $10.45, including 70 cents accretion from the Allergan transaction, which represents an annualized contribution of 11%.

Excluded from this guidance is $6.23 of known intangible amortization and specified items.

This guidance now contemplates full year revenue of approximately $45.5 billion.

Rob: This guidance now contemplates full-year revenue of approximately $45.5 billion, at current rates. We now expect foreign exchange to have a 30 basis point unfavorable impact on fully reported sales growth. Included in this revenue guidance are the following updates for your assumption. We now expect U.S. Humira sales growth of approximately 8%. We now expect international Humira sales of approximately $3.5 billion. For RenVoke, we now expect global revenues of approximately $600 million.

At current rates, we now expect foreign exchange had a 30 basis point unfavorable impact on full year reported sales growth.

Included in this revenue guidance are the following updated full year assumptions.

We now expect us humira sales growth of approximately 8%.

We now expect international Humira sales of approximately $3.5 billion.

For rent Voake, we now expect global revenues of approximately $600 million.

For global HCV, we now expect sales of approximately $2.1 billion as treatments remain below pre coded levels.

Rob: For the global HCV market, we now expect sales of approximately $2.1 billion as treatments remain below pre-COVID levels. For the Aesthetics market, we expect global sales of approximately $2.4 billion, including approximately $1 billion from Botox Cosmetic and approximately $650 million from Juvederm. For neuroscience, we expect global sales of approximately $3.5 billion, including approximately $1.4 billion from Botox Therapeutic and approximately $950 million from Braylar. For iCare, we expect global revenues of approximately $2.1 billion, including approximately $700 million from Restasis, which assumes no generic competition in 2020. For Women's Health, we expect global revenues of approximately $700 million. All other Foliar Product Guidance assumptions remain unchanged.

For aesthetics, we expect global sales of approximately $2.4 billion, including approximately $1 billion from botox cosmetic and approximately $650 million from Juvederm.

For neuroscience, we expect global sales of approximately $3.5 billion, including approximately $1.4 billion from botox therapeutic and approximately $950 million from railcar.

For Eyecare, we expect global revenues of approximately $2.1 billion, including approximately $700 million former station, which assumes no generic competition in 2020.

For women's health, we expect global revenues of approximately $700 million.

All other full year product guidance assumptions remain unchanged.

Moving in a piano, we now forecast adjusted gross margin just above 82% of sales adjusted R&D investment to be approximately $5.8 billion adjusted as an expense to be approximately $9.9 billion and adjusted operating margin of approximately 48% of sales.

Rob: Moving into P&L, we now forecast adjusted gross margin just above 82% of sales, adjusted R&D investment to be approximately $5.8 billion, adjusted SG&A expense to be approximately $9.9 billion, and adjusted operating margin of approximately 48% of sales. This P&L guidance includes approximately $600 million in expense synergies for the partial year in 2020. We remain on track to deliver greater than $2 billion in expense synergies by 2022. We now expect adjusted net interest expense of approximately $2 billion, which includes the cost of financing the Allergan transaction. We now model a non-gap tax rate of just above 11% for the newly combined company.

This PNR guidance includes approximately $600 million and expense synergies for the partial year in 2020.

We remain on track to deliver greater than $2 billion and expense synergies by 2022.

We now expect adjusted net interest expense of approximately $2 billion, which includes the cost of financing the Allergan transaction.

We now model in non-GAAP tax rate of just above 11% for the newly combined company.

Finally, we now expect our full year average share count to approach 1.7 billion shares, including the equity issue to finance the Allergan acquisition.

Rob: Finally, we now expect our full-year average share count to approach 1.7 billion shares, including the equity issue to finance the Allergan acquisition. As we look ahead to the third quarter, we anticipate adjusted revenue of approximately $12.8 billion. At current rates, we expect foreign exchange to have a modest, unfavorable impact on reported sales growth.

As we look ahead to the third quarter, we anticipate adjusted revenue of approximately $12.8 billion at current rates, we expect foreign exchange had a modest unfavorable impact on reported sales growth.

We are forecasting an adjusted operating margin ratio of just above 48% of sales.

Rob: We are forecasting an adjusted operating margin ratio of just above 48% of sales. We model a non-gap tax rate of 11.6%, and we expect the average share count to approach 1.8 billion. We expect adjusted earnings per share between $2.73 and $2.77, excluding approximately $1.59 of known intangible amortization and specified items.

We model a non-GAAP tax rate of 11.6% and we expect the average share count to approach 1.8 billion shares.

We expect adjusted earnings per share between $2.73 and $2.77, excluding approximately $1.59 cents of known intangible amortization and specified items.

Abby remains well positioned to execute on our capital allocation priorities, including rapidly paying down debt supporting a strong and growing dividend and pursuing additional innovative mid to late stage pipeline assets.

Rob: AbbVie remains well-positioned to execute on our capital allocation priorities, including rapidly paying down debt, supporting a strong and growing dividend, and pursuing additional innovative mid- to late-stage pipeline assets. We generated $6.9 billion of operating cash flow in the first half of the year, and our cash balance at the end of June was $6 billion. We're on track to pay down 15 to $18 billion of combined company debt by the end of 2021, of which nearly $7 billion has already been repaid. We expect to achieve a net debt to EBITDA ratio of 2.5 times by the end of 2021, with further deleveraging through 2023. In closing, AbbVie's performance and financial condition remain strong.

We generated $6.9 billion of operating cash flow in the first half of the year and our cash balance at the end of June was $6 billion.

We're on track to pay down 15, $18 billion of combined company debt by the end of 2021 of which nearly $7 billion has already been repaid.

We expect to achieve a net debt to EBITDA ratio of 2.5 times by the end of 2021 with further deleveraging through 2023.

In closing Abbvies performance and financial condition remains strong we're very pleased with the momentum of the business heading into the second half of 2020.

Rob: We are very pleased with the momentum of the business heading into the second half of 2020. With that, I'll turn the call back over to Liz Shea. Thanks, Rob. We will now open the call to questions. Operator, first question, please. Thank you. And as a reminder to ask a question, please press star one.

With that I'll turn the call back over to lists.

Operator: Our first question today is from Randall Stanicky from RBC Capital Markets. Great. Thanks, guys. One for Rick and one for Rob.

Thanks, Rob who will now open the call for questions. Operator first question. Please.

Thank you and as a reminder to ask a question. Please press star one.

First question today is from Randall Stanicky from RBC capital markets.

Great. Thanks, guys I said too.

One for Rick and one for Rob brick bigger picture question, a huge part of the story Randall Cradle, sorry to interrupt we can't hear you very well is there anything you can turn up there Mike or pick up.

Christopher Thomas Schott: Rick, a bigger picture question, a huge part of the. Randall, Randall, sorry to interrupt. We can't hear you very well. Is there any way you could, Great, is that better? Wiley. Great. Rick, I wanted to ask you, a big part of the AbbVie story is growth on the other side of Humira in 2023. There's still some trepidation from investors in getting comfortable with the step down. What would you say to those investors to get people comfortable that there's a growth story on the other side of Humira? And what do you need to do specifically between now and then to position the business for that? Okay.

Great is that better.

Okay.

Great Rick I wanted to ask a big part of the App be story is growth on the other side of Humira in 2023, Theres still some trepidation with from investors and getting comfortable with the step down what would you say to those investors.

To get people comfortable that Theres a growth story on the other side of Humira and what do you need to do specifically between now and then strategically to position the business for that.

Okay. Rather did you have a second question or is that yeah. The second question Alaskan upfront for Rob.

Christopher Thomas Schott: Randall, did you have a second question, or is that... Yeah, the second question. I'll ask it up front for Rob. Just, if you could help us understand the steady state, the run rate for R&D. I think you said $5.8 billion for this year. That'll go higher on an annualized basis, but you're also pulling a billion dollars of R&D synergies out of that as well. Okay, I'll cover your first question, Randall, and then Rob can jump in and talk through the R&D funding question that you have. So, look, I think it's a great question.

You can help us understand the steady state the run rate for R&D. I think you said 5.8 billion for this years I don't go higher on an annualized basis, but you're also pulling a billion dollars of R&D synergies out of that as well.

Okay I'll cover your first question rental and then and then Rob can jump in talks to the R&D funding question. The job. So look I think it's a great question. It is one that obviously the vast majority of investors are interested in.

Rick Gonzalez: It is one that, obviously, the vast majority of investors are interested in. We have described, I think, to investors the rationale for why we were excited about doing the Allergan transaction. It obviously gives us a tremendous amount of ability to be able to manage our way through the loss of exclusivity in the U.S. for Humira. It provides us with two more major growth franchises for the company to help drive growth. And it allows us to continue to invest aggressively both in internal R&D as well as external. And so I think it provides the framework to allow us to continue to perform as we have done over the last number of years. I mean, clearly, we certainly have a track record of showing that we can grow this business and we can build on this business. We've demonstrated that since 2013 when we spun out.

We have described I think to investors are the rationale of Ah why we're excited about doing the algorithm transaction.

It obviously gives us a tremendous amount ability to be able to manage our way through the loss of exclusivity in the use of Humira and provides us with the two more major growth franchises for the company to help drive growth and it allows us to continue to invest aggressively both internal R&D as.

Well as.

External and so I think it provides a framework to allow us to continue to perform as we have performed over the last a number of years I mean, clearly we have a we certainly have a track record of showing that we can grow this business and we can build on this business.

With demonstrated that since 2013, when we spun off.

Rick Gonzalez: So what makes me excited and what makes me comfortable that I can ultimately grow the business through the LOE? Well, I think it starts with – look, we have six – yeah, six major growth assets in our business today if you step back and you look at them. Six medicines that have tremendous opportunities to be able to grow. Skyrizzy, Winvoke, Embruvica, Benclexta, Velar, Ubrelli.

So what makes me excited what makes me comfortable that I can ultimately grow the business through the I'll.

I think it starts with what we have six yes, six major growth assets in our business today, if you step back from all of them six medicines in a tremendous opportunity to be able to grow skier visit limbo Imbruvica Venclexta Vale are you building a will probably haven't told us.

Rick Gonzalez: We'll probably have a Toyo Japan here in the not-too-distant future. And we'll have a seventh asset. All in markets that have a significant opportunity to be able to grow. When I look at our R&D productivity, both in the indication expansion area, as well as new assets, and I'll talk about that here in a second, I'm very comfortable with our ability to be able to continue to drive the pipeline. When you look at the projections that we made for Renvoke and Skyrizzy, as an example, when we made those projections a year or two ago, those peak projections for 2025, we based those projections on the fact that those assets had to achieve roughly high single-digit market share positions. As we mentioned, right now, if you look at Skyrizzy, it's achieving an in-play share of 30%.

During the not too distant future. So we'll have a seventh asset all end markets that had a significant opportunity to be able to grow when I look at R&D productivity, both in the indication expansion area.

As well as new at new assets and I'll talk about that here in a second.

Im very comfortable with are going to be able to continue to drive the pipeline.

When you look at the projections that we made for rent growth and Sky Lindsay as an example, when we made those projections our year or two ago boutique projections for 2025, we base those projections on the fact that those assets had to achieve roughly high single digit markets.

Share positions as we mentioned right now if you look at Sky revenues achieved in one place share up 30%.

When growth has really stood up all.

Rick Gonzalez: Ringgold has really stood up and rapidly started to capture share. It's at 15% and growing at a very aggressive clip. I would predict it will quickly become the in-play market leader above Shumera here in the not-too-distant future. But they're already significantly above what those estimates were. The longer you stay at in-play shares that look like that, obviously, the greater you're going to exceed that. If you get to 20% instead of high single digits, obviously, the revenue will be approximately two times what we originally projected. So that gives me a high level of comfort.

Rapidly started to capture share, it's it's 15% and growing at a very aggressive clip.

I would predict it will quickly become the in play market leader above Humira.

Here in the not too distant future, but they're already significantly above what those estimates were the longer you stay at in place shares that looked like that obviously, the greater youre going to exceed that if you get to 20% instead of high single digits. Obviously, the revenue will be approximately two times, what we originally projected so.

That gives me a high level of comfort when I look at Venclexta as an example.

Rick Gonzalez: When I look at Vinclexta as an example, there's still a significant opportunity to grow there. If we get an indication expansion, both broadening AML as well as T1114 and multiple myeloma, those are two significant opportunities that will continue to be able to drive growth. Imbruvica still has a significant opportunity to be able to drive growth. When I look at Velar as an example, that's a very interesting asset.

There's still a significant opportunity to grow there if we get an indication expansion, both broadening HTML as well into tier holding pointing in multiple myeloma.

Those are two significant opportunities that will continue to be able to drive growth Imbruvica is still has significant opportunity to be able to drive growth when I look at Baylor as an example, and thats a very interesting asset as it has a great profile in that market the drug does.

Rick Gonzalez: It has a great profile in that market, and the drug is obviously growing significantly. I mean, it's been growing now at the rate of about 80% or 90% year over year.

It's obviously growing significantly growing now at the rate of about 80 or 90% year over year, there's still plenty of room to grow and bipolar and schizophrenia.

Rick Gonzalez: There's still plenty of room to grow in bipolar and schizophrenia, and if one of those two phase three studies plays out effectively, MDD will be a very large additional indication, which will allow us to be able to drive significant growth there. And then there's the migraine franchise. I think migraine is something that's underappreciated.

And if one of those two phase three studies.

Plays out effectively.

MDD will be a very large additional indication, which will allow us to be able to drive significant and growth. There and then there is the migraine franchise any migrating something thats underappreciated. If you look at the penetration right now of oral agents.

Rick Gonzalez: If you look at the penetration right now of oral agents in the acute area, it's running about 12 to 14% of total scripts. So obviously, there's a significant opportunity to be able to continue to expand that market. We think we have the assets to be able to do that. And, obviously, we think we have the promotional ability to do it.

In acute area, it's rolling about 12% to 14%.

Total scripts. So obviously there is a significant opportunity to be able to continue to expand that market.

We think we have the asset to be able to do that.

And obviously, we think we haven't yet the promotional.

So I think we have the tools right now to be able to drive significant growth through the alone.

Rick Gonzalez: So I think we have the tools right now to be able to drive significant growth through the LOE. On the other side of the LOE, obviously, our pipeline will continue to play out with the additional indications. You're starting to see assets like our TNF steroid evolve.

On the other side of the Ela, we obviously our pipeline will continue to play out with the additional indications.

You are starting to see assets like or TNF steroids.

Evolve I think the Genmab collaboration is an important collaboration to continue to build out.

Rick Gonzalez: I think the GenMap collaboration is an important collaboration to continue to build out our HEMONT and potentially solid tumor platform. And so, there are a lot of exciting opportunities. So, you know, I feel very confident in one, how the business is running now despite all of the disruption associated with COVID. But if I look at the part of the business that we control directly, I feel very good about how the business is running. And so, I believe we will make our way through it. And I think as we get a little closer, investors will gain an even greater appreciation of that. Randall, this is Robin.

Our key non can potentially solid tumor platform and so there's a lot of exciting opportunities. So.

You know I feel very confident and one how the business is running now.

Despite all of the disruption associated with Covance, but if I look at departed.

Of the business that we control directly I feel very good about how the businesses line and so I believe we will navigate our way through and I think as we look closer.

Investors will.

Gain an even greater appreciation of that.

Randall This is Rob on your question on R&D. So if you think through the partial year synergy the 600 million about 400 million that comes from R&D and by 2020 to about 50% of the greater than 2 billion in synergies will come from R&D. So while I expect the expenses to annualize, obviously or the partially or close we'll also see those synergies ramp up to the best way.

Rick Gonzalez: Your question on R&D. So if you think through the partial year synergies of $600 million, about $400 million of that comes from R&D. And by 2022, about 50% of the greater than $2 billion in synergies will come from R&D.

Think about it as a steady state R&D level in the 6 billion range.

Great. Thanks.

Thanks, Randall operator next question please.

Rob: So while I would expect the expenses to annualize, obviously, or the partial year close, we'll also see those synergies ramp up. So the best way to think about it is a steady state R&D level in the $6 billion range. Great, thanks. Thanks, Randall.

Operator: Operator, next question, please. Thank you. Our next question is from Navin Jacob from UBS. Hi, thanks for taking the question. Just wanted to expand on some of the opportunities that Rick had just mentioned. Again, Naveen, can you please talk speak up a little bit?

Thank you. Our next question is from Maven Jacob some years, yes.

Hi, Thanks for taking the question just wanted to expand and some of the opportunity that a record just men again nothing I can you can you talk speak up a little bit are well, let's see rig in turn our end up sure. So is this okay can you hear me. Okay. That's that's better. Thank you, okay I will yet.

Navin Jacob: Well, let's see if we can turn our end around. Sure, sir. Is this okay? Can you hear me?

Operator: Okay. That's better. Thank you. Okay. I will yell. So, with regard to hearing you now, we have turned our end up. So, you probably don't need to yell.

So with regard to inherited now returned our end up so okay alright.

Well, alright, alright fair enough.

Operator: All right. All right. Fair enough.

With regard to.

Navin Jacob: With regard to the Venclexa opportunity and multiple myeloma, the Canova trial, wondering if you could give us an update there and how large that potential opportunity could be? Obviously, relapsed refractory multiple myeloma is, was pretty. This is Mike.

The venclexta opportunity in multiple myeloma Granolas trial wondering if you could give us an update there and how large could that potential opportunity be obviously.

Relapse refractory multiple myeloma as.

It's pretty.

Pretty competitive so just wondering what sort of how we should be thinking about that where that excitement is coming from and then if you could remind us also about your subcutaneous Ah version pump version of the.

Of Duodopa, that's supposed to read out in the first half of 2021, how should we be thinking about that opportunity could that be a.

A blockbuster opportunity.

This is Mike I'll take those with respect to Venclexta, we see.

Mike: I'll take those. With respect to BenClexta, we see very real potential in the T11-14 multiple myeloma population. If we look across our trials, early phase trials, and then some sets of analyses of later phase trials where we have data from T11-14, we see very consistent responses. We see high response rates, and we see long progression-free survival in the T11-14 population. And that makes sense because that T11-14 population has a transformed cell that has a B cell-like phenotype, and it's BCL2 high.

Very real potential in the PLM 14, multiple myeloma population.

If we look across our trials early phase trials and subset analyses of later phase trials, where we have data from T. 11, 14, we see very consistent responses, we see high response rates and we see long progression free survival.

In the T. 11, 14 population and that makes sense because that T. 11, 14 population has a transform solve that has a b cell like phenotype and its bcl two high so it would be expected to be uniquely sensitive to venclexta into bcl two inhibition. So we have the phase three study well underway now it's an event driven.

Mike: So we have the Phase 3 study well underway now. It's an event-driven trial, but we would hope to have data, you know, in the near future. And, you know, that study is designed to confirm those earlier observations. In terms of how large an opportunity it can be, the T11-14 population is about 20% of multiple myeloma, and multiple myeloma is a big indication. So 20% of that is a lot.

Trial.

But we would hope to have data.

In the in the near future.

In 21 and.

That.

Study.

Is designed to confirm those earlier observations in terms of how large and opportunity and can be the T. 11, 14 population is about 20% of multiple myeloma multiple myeloma is a big indication. So 20% of that is a lot to now as you mentioned, it's becoming a competitive space, but one of the advantages of high.

Mike: Now, as you mentioned, it's becoming a competitive space, but one of the advantages of having a biomarker-driven therapy is that we can identify, and physicians can identify in practice, what patients are likely to respond to Venclexta. So they'll know what a Venclexta patient looks like, and we think that'll be a real option and a real advantage.

Having a biomarker driven therapy is that we can identify and physicians can identify and practice what patients are likely.

To respond to Venclexta. So I'll know what had been clecs to patient looks like and we think that will be a real opportunity and a real advantage. So.

Mike: So we're very optimistic about that aspect of the program, and we think it represents an important additional role for VanClexta. With respect to 951, that is a program that's designed to deliver Duopa-like efficacy through a subcutaneous insulin pump-like device. And so to do that, we had to develop two novel prodrugs. These are NMEs that are rapidly converted to the active agents in circulation, and they allow delivery of levofopa and carbidopa ultimately through this insulin pump-like device that you just can't do with apparent compounds because of their physical properties, chemical limitations, and local tolerability.

We are were very optimistic about that aspect to the program and we think it represents an important additional role for Venclexta with respect to 951.

That is a program that's designed to deliver to local like efficacy through a subcutaneous insulin pump like device.

And so to do that we had to develop two novel programs. These are and Emmys.

That are rapidly converted to the activations in circulation and they allowed delivery.

I believe it opened carbidopa ultimately through this insulin pump like device that you just can't do.

With apparent compounds because of their physical properties and chemicals limitations and and local tolerability limitations. So it really does represent a real breakthrough what we know about the efficacy.

Mike: So it really does represent a real breakthrough. What we know about the efficacy of DUOPA is that it is very, very strong. It really is transformational, but it takes a lot to get that effect. Patients have to have a gastric tube placed and threaded down into the small bowel.

Mike: They have to maintain that. So this is a much more patient-accessible, patient-friendly, if you will, way to deliver the same sort of efficacy. And so we think that it has the potential to really expand the number of patients who would be willing to consider a therapy, you know, such as 951. And it's a big market. If you look at Duopa, despite all the limitations, it's doing about half a billion dollars in sales. If you look at deep brain stimulation, there's also considerable use. In aggregate, this market today is well over a billion dollars, probably a billion and a half dollars. And not all patients who would qualify by their patient profile are willing to undergo these therapies. So we think that 951 can be a very good option. Thanks, Sabine.

Of Duodopa is that it is it is very very strong it really is transformational but it takes a lot to get that efficacy patients have tampa gastric to place to send threaded down into the small now they have to maintain that so this is a much more patient accessible patient friendly with if you will way to deliver the same sort of efficacy.

And so we think that has the potential to really expand the number of patients who would be willing to consider a therapy.

You know such as such as 951, and it's a big market.

If you look into opa. Despite all the limitations, it's doing about half a million dollars in sales. If you look at deep brain stimulation. There's also considerably used in aggregate this market today.

Is well over $1 billion, probably a billion and a half dollars.

And not all patients who would qualify by their patient profile are willing to undergo these therapies. So we think that.

Nine fiberlan can be a very real opportunity and can be quite substantial.

Thanks to the operator next question please.

Operator: Operator, next question, please. Thank you. And our next question is from Chris Schott from J.P. Morgan. Great, thanks so much for the questions. Just two for me.

Thank you at our next question is from Chris Schott from JP Morgan.

Great. Thanks, so much further questions just two for me. The first can you just elaborate a little bit more about how you're thinking about the size of the opportunity for written book in a topic term note. We have the phase three I guess, just a little bit more just how you see is fitting into the treatment paradigm and then my second question was on the 2020 guidance if I back out the 70 cents.

Chris Schott: The first, can you just elaborate a little bit more about how you're thinking about the size of the Invoke in Atopic Derm now that we have this? I guess just a little bit more about how you.

With our going accretion it seems like the base Abbvie numbers are unchanged. Despite what looked like very very strong results. The first half of the years I missed it a little bit the dynamics that are happening with that kind of underlying abbvie set of assumptions. Thanks. So much.

Chris Schott: [inaudible] Seems like the base AbbVie numbers are unchanged despite what looked like very, very strong results in the first half of the year. So can you just help me understand a little bit of the dynamics with that kind of underlying AbbVie. This is Mike. I'll take the first one and then I'll hand it over to Rick for the second one.

This is Mike I'll take the first one and then I'll hand, it over to a rate for the second with respect to atopic dermatitis. We're very we're very pleased with the results that we demonstrated across the phase three trials, they actually exceeded our expectations based on this phase twob results in those to be results were very strong.

Mike: With respect to atopic dermatitis, you know, we're very pleased with the results that we demonstrated across the Phase 3 trials. They actually exceeded our expectations based on the Phase 2B results, and those 2B results were very strong and earned us a breakthrough therapy designation. And we're pleased not only with the efficacy but also with the safety profile. You know, we've said for quite some time that one needs to look at the safety of a drug in the intended population because things like background therapy, risk factors in the population can have a substantial influence on what that profile looks like, not only for the active agent but for the comparator or for placebo. And if you look at the profile in the AD studies, it looks very favorable to our eye.

Along and had earned US breakthrough therapy designation and we're pleased not only with the efficacy, but also with the safety profile. We've said for quite some time that that one needs to look at the safety of a drug in the intended population because things like background therapy is risk factors that population can have oh.

Substantial influence on what that profile looks like not only for the activation, but but for the comparator for placebo and if you look at the profile in the studies.

It looks very favorable to ROI.

And these were substantial studies in a substantial program overall this wasn't a.

Mike: And these were substantial studies and a substantial program overall. This wasn't, you know, a quick study to get an indication of expansion. We ran a Phase 3 program for atopic dermatitis that could stand alone for an additional submission. So we think that a very strong data package will be a real advantage when we bring this indication to market. If you look at the size of the market overall, I think it's been underappreciated for years. Now, that's changing.

A quick study to get an indication expansion, we ran a phase three program freight topic dermatitis that could stand alone for an additional submission. So we think that very strong data package will be a real advantage when when we bring this indication to market.

If you look at the size of the market overall I think it's been under appreciated for years now that's changing now there are a large number of patients who would be eligible for systemic therapy.

Mike: There are a large number of patients who would be eligible for systemic therapy, and obviously, diplomab is off to a good start over the past several years in that indication. But if you look at their efficacy, only about half of patients achieve an adequate response if you consider that an adequate response in EZ75. And so, you know, in our study, we drove, you know, very good numbers there, higher than that, you know, roughly 50%, albeit through, you know, cross-trial comparisons. So we think that there is a real opportunity for a high-efficacy agent in this space. And so, you know, it can play on both ends of the spectrum.

Obviously diplomat is off off to a good start over the past several years in non indication.

But if but if you look at their efficacy only about half of patients achieve.

An adequate response, if you consider that adequate response and easy 75.

And so you know in our study we drove very good numbers, they are higher than that than than that roughly 50%, albeit there through.

Cross trial comparisons. So we think that there is a real opportunity.

For.

Hi, efficacy agent in this space and so it really can play on both ends of the spectrum patients who don't achieve inadequate response with earlier therapies. This is an obvious choice, but with the efficacy in the safety profile that we've observed we see no reason why it wouldn't be used up front as well and of course will have head to head data.

Mike: For patients who don't achieve an adequate response with earlier therapies, this is an obvious choice. But with the efficacy and the safety profile that we've observed, we see no reason why it wouldn't be used up front as well. And, of course, we'll have head-to-head data against diplomab later this year, as we said in our prepared remarks. Chris, this is Rob.

Against Depillo Nab later on this year as we said in our prepared remarks.

Chris This is Rob I'll take your question on guidance. So if you take that 70 cents of accretion and you back off the midpoint of 10 40. It gives you a standalone of 970.

Rob: I'll take your question on guidance. So if you take that $0.70 of accretion and you back off the midpoint of $10.40, it gives you a standalone of $9.70 EPS, which is $0.04 higher than our previous guidance. And it's really driven by the sales changes that we've made today. So for US Humira, we took that up 1%, which equals about $150 million, because we're seeing less impact of COVID on continuing patients. Humira OUS, we've taken up $100 million, and we're seeing less erosion than we initially had planned.

EPS, which is four cents higher than our previous guidance, it's really driven by the sale changes. Although we've made today. So for US Humira, we took that up 1%, which equals about $150 million is we're seeing less impact of covidien continuing patients.

Humor O us we've taken up $100 million were seeing less erosion than we initially planned on RIN bulk thats up $100 million as well really driven by the rapid in place share that we're seeing and thats, partially offset by Maverick as we've seen the market really declined during covert but net net our revenues up about $150 million EPS up four cents versus our previous guidance for Standalone Abbey.

Rob: On RINVO, that's up $100 million as well, really driven by the rapid in-place share that we're seeing. And that's partially offset by Maverick, as we've seen the market really decline during COVID. But net net revenues up about $150 million, and EPS up $0.04 versus our previous guidance for standalone AbbVie. And the only thing I'd add on that is, you know, obviously, we were more favorable on base AbbVie in the quarter than the four cents, but there's still uncertainty as it relates to COVID. And so we're keeping some coverage there to see how things play out in the third quarter. Thanks, Chris.

And the only thing I'd add on that is obviously, we will more favorable on base abbvie in one quarter within the four cents, but theres still uncertainty as it relates to covert until we're keeping some coverage there.

To see how things play out in the third quarter.

Thanks, Chris Operator next question please.

Steve Scala: Operator, next question, please. Thank you. And our next question is from Steve Scala from Cohen. Thank you. First, congratulations on delivering ahead of expectations in the midst of a major integration, new launches, and a global pandemic. It's really impressive.

Thank you and our next question is from Steve Scala from Colin.

Thank you first congratulations on delivering ahead of expectations in the midst of a major integration new launches and a global pandemic. It's really impressive Rick you stated that the impact of the pandemic was less than expected that certainly hasn't been the case that other companies.

Rick Gonzalez: Rick, you stated that the impact of the pandemic was less than expected, but that certainly hasn't been the case at other companies. You also said that you're seeing recovery in the aesthetics portfolio, which sounds as though it's snapped back faster than the legacy AbbVie. So I'm just curious to what you attribute these dynamics.

You also said that you're seeing recovery in the aesthetics portfolio, which sounds as though its snap back faster than the legacy as the so I'm just curious to what do you attribute these dynamics and do you expect to second half of the year to look more like the first half or more like may and June relative to patient volumes clinic.

Rick Gonzalez: And do you expect the second half of the year to look more like the first half or more like May and June relative to patient volumes, clinic traffic, and so forth? And then, secondly, you stated that you expected margin improvement over the next few years. Could you provide some parameters around that expectation? Thank you. Okay, so this is Rick. I'll take I'll take the first one.

Perfect and so forth.

And then secondly, you stated that you expect margin improvement over the next few years could you provide some parameters around that expectation. Thank you.

Okay.

Rick Gonzalez: Your observation is correct. So I think the way to think about it is that, both in the second quarter, many of the assets didn't drop as far as we expected. That was part of the favorability. I'd say that was particularly the case in a number of areas in the legacy AbbVie portfolio associated with the business. On the aesthetics, it is pretty much the way you're describing it.

So this is Rick I'll take a I'll take the first one.

Rocks relation is correct. So I think the way to think about it is that both in the second quarter. Many of the assets Didnt drop as far as we expected that was part of the favorability a I'd say I was particularly in the case in number of areas in the legacy Abbvie port.

Leo.

Associated with the business.

On the aesthetics it is pretty much the way you're describing it what we saw happening you statics business and tools.

Rick Gonzalez: What we saw happen in the aesthetics business and to a very similar extent to Botox Therapeutic is that we saw a rapid drop in the case of aesthetics as those practices virtually closed. You know, I say almost all, if not all, of the practices and close. So aesthetic revenues dropped significantly for a period of time in that mid-April timeframe. As we started to see geographies remove the shelter-in-place orders around the U.S., we saw aesthetic practices quickly put in place safety measures to be able to allow patients to come back into their offices. And I'd say the vast majority of those practices ramped back up and went back into doing procedures fairly quickly as we approached that mid-May time frame. We actually saw, let's take Botox as an example. Botox would be the leading indicator because it's the procedure, Botox cosmetic. It is the procedure that people would go to first.

To a very similar extends to botox therapeutic.

And that we saw rapid drop in the case of obstetrics as those practices virtual enclosed.

Almost all if not all of the practice and closed so a static revenues dropped significantly for a period of time in that mid April timeframe.

As we started to see geographies removed the show through in place orders around the U.S.. We saw the aesthetics practices quickly put in place safety measures to be able to allow patients to come back into their offices.

And I'd say the vast majority of those practices ramp back up and went back into a doing procedures fairly quickly as we approach that mid may timeframe, we actually saw let's take both US as an example, moatize would give a leading indicator because it's the procedure.

Got it cosmetics. It is the procedure the people will go to first.

Rick Gonzalez: It ramped back up, went well over 100% of pre-COVID levels to around 120, 125%, and then it, and that was obviously pent-up demand that was coming back in to the channel, so patients returned quickly, and then as that pent-up demand started to burn off as we got through June, you started to see a drop back down, and now it's settled in sort of in the mid-90s right now, we think it'll reach, you know, it'll stabilize back up over the course of third quarter, back close to pre-COVID levels, and then start growing again, and so I can tell you I'm extremely pleased with how both aesthetics and Botox therapeutics have returned. I think it is a testament of those brands and those patients. As far as the assumptions we made in the second half, obviously, we're assuming the second half performs a lot better than the first half.

It ramped back up went well over 100% improved over the levels will run will hold and 20, 125% and then it and that was obviously pent up demand that was coming back in to the channel. So patients would turn quickly and then as that pent up demand started to burn off.

Off as we got through June.

You are starting to see a drop back down a notch settled in sort of in the mid Ninetys right. Now we think it will reach will stabilize back up over the course of third quarter back close to pre goes and levels and then start growing again and so I can say I'm extremely pleased with how focused statics.

And Botox therapeutic said, we'll turn I think it is a testament of a those brands and those patients.

As far as the assumptions we made in the second half obviously, we're assuming in second half performs a lot better than the first half we're not assuming any kind of about.

Rick Gonzalez: We're not assuming any kind of broad-based shelter-in-place activity, and we'll continue to see more and more patients come back into physicians' offices. On the AbbVie side of the business, we are monitoring those patients by individual practice, which is appropriate for our particular businesses. And I'd say, for the most part, they are returning close to pre-COVID levels, although they do vary a little bit by specialty. As an example, room and GI have come back faster than medical dorm has, but medical dorm has returned as well. To some extent, we're continuing to see it return. Oncology practices In certain conditions, we saw some tailing off of CLL treatment. In the second quarter, that's now returning to normalized levels.

A broad base shelter in place activity.

And we'll continue to see more and more patients come back in the physicians offices on the Abbvie side of the business. We are monitoring those patients by by individual practice, it's appropriate for our open tubular business is what I'd say.

For the most part they are returning close to print cobas levels.

They do vary a little bit by specialty as an example room on G. I have come back faster than medical dorm has the medical billing has homes has returned as well.

To some extent more continuing to see it return oncology practices in certain.

Conditions.

We've seen we saw some tailing off of CLL treatment.

In the second quarter, that's now returning back to.

Normalized levels, so I think.

Rick Gonzalez: So I think the second half will obviously be much better than the first half, and I think we should return to normalized levels as we proceed through the second half of the year. Bob, anything you want to add on that? I can answer the question on that. Steve, this is Rob.

The second half will obviously be much better than the first half and I think we should return to normalized levels. As we proceed through the second half of the year Bob anywhere on that.

But I can ethic answer the question on margin that.

Steve This is Rob an operating margin I think when you when you think about it we have a partially or synergies and of top line thats been pressured by cobot now we have a 48% operating margin profile. As you think about 21 22, we're going to obviously run we're going to ramp those synergies as well as we'll see topline growth in where you'd see the piano levers that weve demonstrated in past years, So I would.

Rob: On operating margin, I think when you think about we have a partial year of synergies and a top line that's been pressured by COVID, we have a 48% operating margin profile. As you think about 21 and 22, we're going to obviously run, we're going to ramp those synergies, as well as we'll see top line growth and where you'd see the P&L leverage that we've demonstrated So I would expect to see our operating margin expand in 21 and 22. When we get to 2023 with the US Jumeirah event, obviously, we would see operating margin pull back, but I would expect it to be in the 40% to 45% range, which still puts us in the top tier in the industry. Thanks, Steve. Operator, next question, please. Thank you. Our next question is from Jeffrey Portis of Lering. Thank you very much and perfect congratulations.

I expect to see our operating margin expanded 21, and 22 ways to down 23 with the U.S. Chimera event, obviously, we would see operating margin pull back, but I would expect it to be in the 45% range. We're still puts his top tier in the industry.

Thank you.

Thanks, Steve Operator next question please.

Thank you. Our next question is from Jeffrey purchase from Leerink.

Thank you very much alright, alright congratulations.

Jeffrey Holford: I'm very happy to get the guidance. Could you talk a little bit about it? Particularly, what's the size of the addressable opportunity for the full portfolio of oral migraines? And perhaps how much of an issue is the constipation data that you've seen. And then, Rick, look, there's a massive economic disruption going on.

Very helpful forget pre guidance could you talk a little bit about Perjure Pam.

Particularly what causes the addressable opportunity for the full portfolio of oral migrating merit.

And perhaps how much of an issue.

Constipation.

Okay that you've seen.

And then Rick look there's massive economic disruption going on.

Rick Gonzalez: And I'd be interested in your commentary about how consumers and payers are reacting. [inaudible] Generic to brand, how is that playing out in your experience with observation? All right, great.

And I'd be interested in your commentary about how consumers and payers.

Acting through.

To that disruption and how that's factored into your garden are we seeing switches from Ivy to oral from from our generic to brands how is that playing out in your experience in observation Greg.

Alright, great.

So.

Mike: So maybe we'll have Mike talk a little bit about the profile of the drug, and what I'd say is I think we probably want to come back at a later date once we've had a little better opportunity to analyze the chronic migraine market. And it's going to depend to a great extent on the profile of the drug, obviously. But it's a very large market, a very significant market. But, Mike, maybe if you want to talk a little bit about constipation, I'll come back and talk about payer dynamics. I'll talk about Atogepant.

Maybe we'll have Mike talk a little bit about the profile of the drug and what I'd say is I think we probably want to come back at a later date once we've got a little better opportunity to analyze.

The chronic unemployed.

The chronic migraine market and it's going to depend to a greater extent on the profile as rug obviously.

But it's a very large market, a very significant market and but Mike maybe if you want to talk a little bit about constipation I'll come back and government the payer dynamics or I'll talk about a touch brand. We're very pleased with the data we've seen and of course this fits into an important part of our migraine portfolio with you belviq for acute migraine now.

Mike: We're very pleased with the data we've seen. And, of course, this fits into an important part of our migraine portfolio with Hubrelvi for acute migraine, now Atogepant with two data readouts in episodic migraine and an ongoing program in chronic migraine. And, of course, there's Botox therapeutic for chronic migraine.

With that told Japan.

With two data readouts in episodic migraine and an ongoing program and chronic migraine and of course, there's botox therapeutic and chronic migraine. So it really rounds out our portfolio. The efficacy that we saw was very strong.

Mike: So it really rounds out our portfolio. The efficacy that we saw was very strong. As we said in our prepared remarks, we hit the primary and all secondaries across the two upper doses and the primary and four out of the six secondaries for the lowest dose studied. So that is an efficacy profile that I think exceeded our expectations, you know, going into the study. With respect to safety, our view of the safety profile looks very favorable. The constipation that was observed in the overwhelming majority of cases was mild or moderate. It didn't limit treatment, so patients stayed on treatment. It could be managed easily with interventions like stool softeners or fiber supplementation. So we don't see it as something that is limiting, particularly in light of the very strong efficacy that we have demonstrated. And, you know, the only other point I'd add is that we have a good understanding of it, and it's on target. So it comes with efficacy.

As we said in our prepared remarks, we hit the primary and all secondaries across.

The two upper doses and the primary and four out of six secondaries.

For the lowest dose study.

So that is an efficacy profile that I think exceeded our expectations going into the study with respect to the safety our view of the safety profile looks very favorable.

The constipation that was it was observed.

In the overwhelming majority of cases was mild or moderate.

It didn't limit treatments to patients state on treatment it can be managed easily.

With interventions like store softeners or fiber supplementation. So we don't see it as something that is limiting.

Particularly in light of the very strong efficacy that we have demonstrated and the only other point I'd add is that we have a good understanding of it and it's on target to it. It comes with the efficacy gets very strong efficacy and you have this manageable tolerability profile that I described.

Rick Gonzalez: You get the very strong efficacy, and you have this manageable tolerability profile that I described. Jeff, on your second question, you probably recall back to our first quarter guidance when we outlined that we had built into our forecast for the remainder of the year some impact or some channel shifting that we thought could occur due to the high unemployment. And, you know, essentially, we haven't seen much of that at all.

Jeff on the on your second question, you probably recall back on our first quarter guidance.

Rick Gonzalez: In fact, I would tell you, we haven't seen any of it to any material effect right now. And one of the things that we do to watch that carefully is our PAP program. We've been advertising extensively to consumers to make sure that they know if they lost their insurance or they lost their jobs and they don't have insurance coverage and they can't afford their AbbVie medicines to come to us. We have a very extensive patient assistance program, and we're not seeing any significant increase in those requests. It could be because of the furloughs. We're not 100% sure yet. And potentially, we could see some increase as we go further here, depending upon what happens with stimulus programs going forward. But we have still maintained some level of coverage in our forecast that we're providing now. So we believe we have sufficient coverage to deal with it, and we'll just have to see how it sorts itself out. Thanks, Jeffrey.

And we outlined that we have built in to our forecasts for the remainder of the mirrors some impact or.

Some channel shifting that we thought critic or due to the high unemployment.

And.

Essentially we havent seen much of that all back I would tell you we haven't seen any of intending material effect right now one of the things that we do to watch that carefully is RP program, we've been advertising extensively to consumers to make sure that they know what they lost their insurance or they lost those.

And they don't have insurance coverage and again for their abbvie medicines to come to US we have very extensive.

Patient assistance program, and we're not seeing any significant increase and those requests could be because were four lows.

100% sure yet.

And potentially we could see some increase as we go further hearing depending upon what happens.

With that with stimulus programs going forward, we have still maintain some level of coverage in our forecast that we're providing now so we believe we have sufficient coverage to deal with it and we'll just have to see how it sorts itself out.

Thanks, Jeffrey Operator next question please.

Operator: Operator, next question, please. Thank you. Our next question is from Vamil Divan from Mizuho. Hi, great. Thank you so much for taking my questions.

Thank you. Our next question is found pharma van from Mizuho.

Hi, great. Thank you so much current taking my questions maybe just.

Vamil Kishore Divan: Maybe just to continue on the migraine question. You mentioned your well-being and the potential there. Can you maybe just talk a little bit about the net pricing that you're thinking about in that space? I guess, you know, maybe relative to the injectable antibodies that are out for prevention already, there are only two players, it sounds like, here between you and Biohaven, it's just the four on the injectable side. So just trying to get a sense of how you see this sort of pricing dynamic play out. We're getting a lot of questions on that front.

Continuing the migrating a question.

You mentioned you won't be in the potential there can you maybe just talk a little bit of want to net pricing that you're thinking about in that space.

He has given you maybe going to maybe relative to the injectable antibodies that are out the conventional ready to go into two players it sounds like here between you and bio Haven.

Or on the technical side, so just trying to get a sense.

You see this or pricing dynamics play out we're doing one a question on that front and then maybe.

Rick Gonzalez: And then maybe for Rick, I'm just curious about some of these executive orders we've seen on the drug pricing side for the administration. I don't know if I may have missed some of your comments earlier, but just curious if you have any sort of additional thoughts on what you heard from some of your peers on this issue this week on their calls. But every company obviously has a different product mix and maybe different perspectives. I'd be curious what your views are, especially as it relates to the rebate rule order. Thanks so much.

Rick just curious around some of these executive orders we've seen on that.

The drug pricing sensory administration I don't know, let me I missed some of your comments earlier, but just curious if you have any sort of additional thoughts about the hurt some of your peers and this issue. This week of their calls, but every component of the different product mix and maybe than different perspectives secures will use our especially as it relates to the rebate rule order.

Thanks much.

Rick Gonzalez: All right. Okay, I'll cover both of those questions. So on migraine, I mean, obviously, we don't we don't publicly talk about our net price. We have fairly significant managed care coverage on the asset already, I think it's about 70%. And obviously, it had to be priced in a way that was appropriate to be able to get that level of coverage.

All right.

Okay I'll cover both of those questions.

Rick Gonzalez: This is a market where market expansion is important. As I said, I think if you look at the penetration right now of acute migraine products against at least the oral CGOPs against the total migraine acute market, it's about 12% penetrated right now. So there is a significant opportunity to be able to grow that market, and that gives you some idea of the magnitude of this market. So you certainly want it to be in a position where it can have access to be able to allow patients to be able to use the product.

So on migraine I mean, obviously, we don't we don't a public we've talked about our net price.

We have fairly significant managed care coverage on the asset already I think it's about 70%.

And obviously you had to be priced and way that was appropriate to be able to get that level of coverage. This is a market where market expansion.

Is important.

As I said I think if you look at the penetration right now other Q.

Migraine products against the.

Earnings the oilseed Europeans against the total.

Migrant acute market, it's about 12% penetrated right now so there's a significant opportunity to be able to grow that market.

And it gives you some idea of the magnitude of this market. So you certainly want to be at up in a position where it can have access to the other will allow patients to be able to use the products and product certainly have demonstrated.

Rick Gonzalez: These products certainly have demonstrated that they have strong demand from patients to be able to provide them with appropriate levels of relief. And so, I would just tell you that's an important aspect of the overall strategy here to be able to grow this market over the long term. On the executive orders, you know, as you have probably seen, they're pretty high-level at this point, and they provide some high-level direction. So I think until we see them sort of start to sort out, it's a little bit difficult to give you a lot of specificity around what they look like.

That they have a strong demand from patients.

To be able to provide them appropriate levels of really and so that I would just telling the that's an important aspect of the overall strategy here is to be able to grow this market over the long term I think executive orders as you as you will probably be seen were pretty high level at this point and they provide some high level direction.

Yeah.

So I think until we see them sort of.

So to sort out.

I think its alone but difficult to give you a lot of specificity around what they look like now I will say if I look at them in the backdrop of Abbvies business I would say a I don't think they will have a a significant impact on our business. If you look at part B is an example, we have a very small.

Rick Gonzalez: Now I will say, if I look at them in the backdrop of AbbVie's business, I would say I don't think they will have a significant impact on our business. If you look at Part B as an example, we have a very small Part B business. I think it's around two or 3%. 3%, I guess is the right number now. So it's a very insignificant part.

All part B business I think is around two or 3%, 30% I guess is the right number now.

Rick Gonzalez: If you look at the importation bill or executive order, it's very similar to what's already been given out to the states, and it excludes biologics, which obviously is an important part of our business. If you look at the third one, it's insulin and EpiPen. We're not in that business. And then there is the rebate rule.

So it's a very insignificant part if you look at the importation bill.

Our executive order is very similar to what's already been given out to the states and excludes biologics, which obviously is an important part of our business.

If you look at the cold one its insulin and won't be pound, we're not in that business.

Rick Gonzalez: Certainly, as we look at rebates, we're absolutely supportive of patients being able to get the benefit of the discount associated with the rebate or discount. But, as we've said many times before, for us, whether it's a rebate or a discount is not very material to us. What I would say is, when I look at that executive order, it does say that you have to be able to implement it without increasing the premium. And everything I know about how rebates are redistributed, I would say that I think that that will be difficult to do.

And then the rebate rule.

Yes, certainly as we look at rebates were absolutely supportive of patients being able to get the benefit of the discount associated with the rebate or discount as we've said many times before for us whether it's a rebate or discount is want.

That is not very material to us.

Well I wouldn't say is when I look at that executive order. It does say that you have to be able to implementing it without.

Increasing premiums.

And everything I know about how rebates or redistributed.

I would say that I think that that will be difficult to do.

So I don't know how that will ultimately play out so that's a high level look at what we what we think about them right now, but I think right now I wouldn't anticipate that they have a significant.

Rick Gonzalez: So I don't know how that will ultimately play out. So, I mean, that's a high-level look at what we think about them right now. But I think right now, I wouldn't anticipate that they have a significant risk associated with them. Thanks, Vamil. Operator, next question, please.

Risk associated with Abbvie.

Thanks, Simon Operator next question please.

Thank you enter next question that's from David Risinger from Morgan Stanley.

Operator: Thank you. And our next question is from David Risinger from Morgan Stanley. Great, thanks so much.

Great. Thanks, so much and congrats on all of the encouraging updates.

David Risinger: And congratulations on all of the encouraging updates. So first, Rick, could you please discuss, maybe in a little bit more detail, the most significant revenue synergy opportunities you see as a result of the combination with Allergan. I know that the combined company can do more with certain franchises, but if you could put some finer points on that, that would be very helpful.

So first Rick could you please discuss.

Maybe in a little bit more detail. The most significant revenue synergy opportunities you see as a result, so if the combination with Allergan and I know that.

The combined company can do more with certain franchises, but if you could put some finer points on that that would be very helpful.

And then second.

Rick Gonzalez: And second, with respect to next year's readouts, AbbVie has a very large pipeline of phase two candidates with proof of concept readouts in 2021. But could you point us to the ones that have the biggest commercial potential? So, you know, if there is validation in 2021, what are the biggest product opportunities that we should be paying attention to? And then one little tidbit: the Ubrelvi number was $22 million in the quarter. So I'll cover the first one, then we'll have Mike cover the second, and Rob can cover the third.

With respect to next year's read outs.

He has a very large pipeline of phase two candidates with proof of concept breed out some 2021.

But could you point us to the ones that have the biggest commercial potential.

So if.

You know if there is validation and 2021.

What are the biggest product opportunities that we should be paying attention to and then one little tidbit.

The U. Burrelles. The number was 22 million in the quarter that was strong how much stocking was in there. Thank you.

Okay.

So I'll cover the first one more might cover the second and Rob can cover the third.

Mike: So if I look at the business overall, I said that the integration has gone very smoothly, and I think, you know, that's a tribute to all the planning that we did. We had some extra time to be able to do it, and I think that benefited us. And so I think the two organizations have come together in a way that's been quite good. Certainly, when you look at managed care, that's an area that we have demonstrated that we're quite skilled at being able to effectively manage our way through that. And then the third area I'd say is that, if I look at aesthetics, it is a very attractive market. It has a significant opportunity to be able to grow that market, which I mean by bringing more people into the market more quickly. You can do that in several different ways.

So if I look at the business overall, I said that the integration has gone very seamlessly I think that's that's a tribute to all the planning that we did add some extra time you'd be able to do it and I think that benefited us and so I think the two organizations have come together in a way that's been a it's been quite.

Good.

Now I would say I think the places where we have an opportunity to be able to provide.

Some synergy and benefit certainly when you look our therapeutic businesses. When you look there are.

Many of the.

Tactical kinds of execution techniques that we use in the marketplace I think many of those are applicable to a two the allergan therapeutic portfolio certainly when you look at managed care. That's an area that we've demonstrated that we are quite skilled.

That being able to.

To effectively manage our way through that and then the third area I'd say is if I look at a static sustaining says I is a very attractive market. It has a significant opportunity to be able to grow that market.

Which I mean by bringing in more people into the market more quickly you can do that several different ways. Obviously some of its driven by promotional activity I'd say Allergan is very skilled from a social media standpoint.

Rick Gonzalez: Obviously, some of it's driven by promotional activity. I'd say Allergan is very skilled from a social media standpoint, and I think that's an area that's probably been underfunded historically. It's an area that we have a high level of interest in funding to a greater extent, and we obviously have the financial wherewithal to be able to do that. The second thing is being able to bring more new innovation more rapidly into that market, and I think that's an area that we'll also be able to provide a benefit both in the way we operate R&D and the ability to be able to rapidly innovate. I think that will be a benefit to the overall business. So that's an area that, over time, you can expect us to continue to make sure that we're doing what we know how to do to be able to ultimately grow that market over the long term. Those would be some of the things I'd tell you at eye level. Now, I'll take the second question.

And I think Thats an area, that's probably been under funded historically, it's an area that we have a high level of interest in funding to a greater extent and we obviously have the financial wherewithal to be able to do that the second thing is being able to bring more new renovation more rapidly into that market.

And I think Thats an area that will also be able to provide a or a benefit.

Both in.

The way, we operate R&D and the ability to be able to rapidly innovate I think that will be a benefit to the overall business and I think we have an opportunity to be able to accelerate the growth of that business in a meaningful way over time, and it's a market I liked a lot I think both based on demographics, the cash pay aspects of it and how.

Responds to to appropriate innovation in that market. So that's an area that I think over and over time you can expect.

US to continue to make sure that we're doing.

What we know how to do to be able to ultimately grow that market over the long term those of you some events at day at high level Bank.

I'll take the second question. So we do as you point out have a number of data readouts from phase two studies or other proof of concept studies in 2021 and also in the following years in 2022 and beyond and a number of these are very large opportunities I'd point to our oncology programs.

Mike: So we do, as you point out, have a number of data readouts from phase two studies or other proof of concept studies in 2021 and also in the following years, 2022 and beyond. And a number of these are very large opportunities. You know, I'd point to our oncology programs. We have a number of immuno-oncology programs that would be large opportunities if they hit. Our GARP program, I think, is a very good example of that. Our bispecifics, I think, are a very good example of that.

We have a number of immuno oncology programs that would be large opportunities. If they hit our GARP program. I think is a very good example of that our bi specifics I think are very good example of that.

Mike: You know, we just brought in, through the GenMab collaboration, F-Karitamab, which is a large opportunity. Obviously, that's post-proof of concept, but there are two additional molecules there that are just a little bit earlier in development that could be large opportunities. We have bispecifics in BCMA, more than one program, that could be very large opportunities if they were, in fact, best in class, and we think they have the potential to be best in class. The last thing I would point to in oncology is our novel, so-targeted ADC technology with ABBV155 being in the lead in non-small cell lung cancer. That is a BCLXL warhead targeted by a B7H3 antibody.

We just brought in three that through the Genmab clat collaboration and create a man, which is a large opportunity. Obviously, that's post proof proof of concept, but there are two additional molecules there.

That are just a little bit earlier in development that can be large opportunities.

We have bi specifics in BC umang more than one program.

That could be very large opportunities. If they were in fact best in class and we think they have potential to to be best in class.

Last thing I'd point to an oncology is our novel so targeted ADC technology with a BBB one find five being in the lead.

In non small cell lung cancer that is on a bcl XL warhead targeted by a disseminates thing and Bonnie if that were to hit.

Mike: If that were to hit and we'd see those data next year, that would be a large opportunity. Obviously, in immunology, we're advancing our TNF steroid program, but those are data that we've already reported out. And then the last thing that I would mention is in our neuroscience portfolio, obviously, Alzheimer's disease. If those programs were to hit, they would be a very large opportunity given the enormous unmet medical need. Now, obviously, in Alzheimer's disease, it's higher risk, higher reward, but if we got favorable data, it would be a very, very meaningful opportunity. And Dave, this is Rob.

And we see those data next year that would be a large opportunity obviously in immunology, we're advancing or TNF steroids.

Program, but.

Those are data that we've already reported out and then the last thing that I would mention.

Is in our nurse science portfolio, obviously alters disease, if those programs where they hit they would be a very large opportunity given the in the enormous unmet medical need now obviously, an all time rich diseases higher risk higher reward, but if we got favorable data.

It would be a very very meaningful opportunity.

And Dave This is Rob on your relative if you look at just the full quarter revenue of 27 million. It really follows a prescription growth on sequential basis. So there's really a negligible stocking impact and we'd expect to see continued sequential growth for that product.

Mike: On Ubrelvi, if you look at just the full quarter, revenue of $27 million, it really follows the prescription growth on a sequential basis. So there's really a negligible stocking impact, and we'd expect to see continued sequential growth for that product. Thanks, David. Operator, next question, please.

Thanks, David Operator next question please.

Operator: Thank you. Our next question is from Chris Raymond from Piper Sandler. Thanks. You know, I'm just back to toe-to-toe with Japan in the sort of a competitive setup.

Thank you. Our next question is from Chris Raymond Sandpiper Sandler.

Okay. Thanks.

Christopher Joseph Raymond: So Rick, I heard your comments on how this is underappreciated. We've done some checks that seem to indicate that that's the case. And I know this is not approved yet. So, pardon the commercial question here, but you know, there's been some chatter out there, especially from some biohaven bulls that the placebo adjusted migraine days maybe don't matter as much as absolute days. And so just maybe, you know, you're in the field with Ubrella V, you know, from a rep to doc dialogue perspective, what do you guys see as the most important attribute, especially as you'll be positioning this in the prevention setting versus, you know, sub cues and the other oral therapy? or the other oral therapy that happens to be a dissolving tablet. Well, this is Mike.

Just back to a tour, Japan in the sort of a competitive set up so so Rick I heard your comments on how this is under appreciated.

We've done some chefs who seem to indicate that that's the case and I know this it's not approved yet so pardon if you don't mind the commercial question here, but.

There's been some chatter out there, especially from some some bio haven.

Bowls that the placebo adjusted migraine days, maybe don't matter as much as absolute days.

So just maybe you're in the steel with as you grow the.

From a rep to dock dialogue perspective, what do you guys see use and most important attribute especially as you'd be positioning this and the prevention setting versus.

Subcu and the other oral therapies.

Or the other oral therapy that happens to be a dissolving tablets.

Well this is Mike I'll take the first part of that and then then Rick may want to add.

Mike: I'll take the first part of that, and then Rick may want to add something. With respect to efficacy, the most important attribute is the placebo-adjusted number of migraine days. If one were solely to look at the total days, one could conclude that placebo is, in fact, a good therapy for these patients because we see reductions, and so you have to account for that. And there are differences from study to study based on design, population, and role and what that placebo difference is. So it absolutely has to be taken into account.

With respect to efficacy the most important attribute is the placebo adjusted migraine days, if one were solely to look at the total days.

One could conclude that placebo is in fact, a good therapy for these patients because we see reductions and so you have to account for that.

And there are.

Differences from study to study based on design population enrolled and what that placebo differences. So it absolutely has to be taken into account.

And when you look at our placebo adjusted.

Rick Gonzalez: And when you look at our placebo-adjusted results, they're very strong. (Inaudible) I would just reiterate what Mike said. I mean, physicians are well skilled at understanding what placebo rates are, and I just don't even think it's appropriate not to represent a product's efficacy without looking at the placebo rate. So I mean, I think that will be the way doctors look at it, and I think that is the way the products will be marketed. Certainly, if I had a lower rate, I may have an interest in that, but at the end of the day, I think that is the appropriate way to look at it.

Results. They are very strong they range between 1.2, and 1.7 days, which which in this disease areas out very meaningful.

Response rates.

And it's higher than what has been recorded.

With other oral agents, obviously with the caveat of cross trial comparison, so we think that on the most important efficacy parameter we performed very very well and of course, we've we've we've hit all the secondaries across two of those three doses as I described and as we get the data out into the public domain, you'll get you'll get more color on that.

Averages for the they will make says I mean physicians are well skilled and understanding what placebo rates are and.

Just starting to think it's appropriate not to represent a products efficacy without looking at the placebo right. So.

So.

Right.

I think that will be the way doctors look at it and I think that is the way the products will be marketed and.

Certainly if I had a lower rate.

They have an interest in that.

But at the end of the day I think that is the appropriate way to look at it.

Great. Thank you.

Christopher Joseph Raymond: Thanks, Chris. Operator, next question, please. Thank you. Our next question is from Tim Anderson from Wolf Research. Hi, and thank you.

Operator next question please.

Thank you. Our next question is Frontend Anderson from Wolfe Research.

Hi, Thank you a few pipeline questions. Please.

Timothy Minton Anderson: A few pipeline questions, please. On the TNF steroid conjugate, I have a mixed view of that approach. For those that are skeptical, what's the most common reason that you hear?

On the tuna story conjugate.

Okay wells have a mixed view of that approach.

Those that are skeptical what's the most common reason that you here.

Mike: Second question on Bray-Lar, what are your odds of regulatory success? And in depression, even just qualitatively, that's a high risk, medium risk, or low risk endeavor. Ben, can you clarify why your GenMab CD3, CD20 would be best in class? Okay, I'll take those questions.

Second question on Braille are what are your odds of regulatory success.

And in depression, even just qualitatively is this a high risk medium risk for low risk and dumper.

And then can you clarify why your Jen, Matt Cdthree CD 20 would be best in class.

Okay I'll take those questions with respect to the TNF started conch get what I would say is it's important to keep in mind that this is an early phase trial and this was intended to be a proof of concept trial.

Mike: You know, with respect to the TNF steroid conjugate, what I would say is, it's important to keep in mind that this is an early phase trial, and this was intended to be a proof of concept trial. One can't do a fully powered head-to-head against an active competitor like Humira in phase one or phase two because that typically requires, or always requires essentially, a large phase three study. Head-to-head studies are often amongst the largest studies in a phase three program.

One can't do a fully powered head to head against an active comparator like humira.

In in.

Phase one or phase two.

Because that typically requires are always requires essentially a large phase three study head to head studies are often amongst the largest studies in a phase III program. So what we were looking for was evidence to support the profile that I described.

Mike: So, what we were looking for was evidence to support the profile that I described, which is that we had a high probability of success in those trials downstream. You know, if folks have a mixed view, then, you know, what we hear is they'd like to see those later data, and what I would say is we're well on the path to generating them. We're pleased with the results that we've seen, and we think it's a very promising platform, and we're going to be advancing it to larger-scale trials, and people will get the data that they're looking for. With respect to RALAR in the adjunctive treatment of major depressive disorder, I think the question was, how would I characterize the risk there?

Which is that we had a high probability of success in those trials downstream if if.

Folks have mixed view than what we hear is they'd like to see those later data and what I would say is we're well on the path to generating them.

We're pleased with the results that we've seen and we think it's a very promising.

Platform, and we're going to be advancing into larger scale trials and people will get the data that they're looking for.

With respect to railcar.

In the adjunctive treatment a major depressive disorder I think the question with how would I characterize the risk there.

They're already is one positive study in hand, and two of the two studies that are underway really need one additional study to read out positive to support the indication I think that.

Mike: There is already one positive study in hand, and so of the two studies that are underway, we would need one additional study to read out positive to support the indication. I think that historically, this has been a challenging indication, but I think both the rationale and the data from earlier studies in the RALAR program are strong, so I would probably put it in the moderate probability range. We didn't build it into our model.

Historically this has been a challenging indication.

But I think the both the rationale and the data from earlier.

Studies in the radar program, our strong so I would probably put it in in a moderate probability range, we didnt building into our model.

Our success with very low is not dependent on it but we think it represents.

Mike: Our success with RALAR was not dependent on it, but we think it represents a very attractive upside opportunity if, in fact, it hits. And with respect to why GenMab CD3 by CD20 has the potential to be best in class, I would point to two things. One is the efficacy data reported from the early phase trials, particularly in DLBCL, which is a very difficult-to-treat tumor type, puts it at the higher end of efficacy, and the safety profile has been very favorable in terms of what's been observed to date, both with respect to cytokine release syndrome and the lack of occurrence in the early phase trials of higher-grade CRS, and also with respect to the neurological symptoms that can accompany this class of therapy.

Very attractive upside opportunity if in fact it hits.

And with respect to why Genmab Cdthree by CD 20 has potentially best in class I'd point to two things one is the efficacy data reported.

From the early phase trials, particularly in DLT, Bcl, which is a very difficult to treat.

Tumor type puts it at the higher end of efficacy and the safety profile has been very favorable in terms of what's been observed to date, both with respect to cytokine release syndrome.

And the lack of occurrence in the early phase trials of of of higher grade.

Rs and also with respect to.

The neurological symptoms that.

And that can accompany this class of therapy. So it seems to have shredded that sweet spot between achieving a very strong efficacy with a good safety profile Innoswitch Subcu administration.

Mike: So it seems to have threaded that sweet spot between achieving very strong efficacy with a good safety profile. It also has sub-Q administration with its existing formulation. Others are working towards that, but GenMab already has the data in hand. And the dosing schedule fits very well into the regimens that will be used in the diseases that we'd study, particularly DLBCL in follicular lymphoma. So it's the aggregate of that that we think gives it a very, very strong profile. Operator, do we have time for one final question, please? Thank you.

With its existing formulation others are working towards that but genmab already has the data in hand, and the dosing schedules fits very well into the regimens.

It will be used.

In the diseases that would study, particularly the l. bcl onto a killer lymphoma. So we'd see aggregated that that we think gives it a very very strong profile.

Thank you.

Operator, we have time for one final question. Please.

Operator: Our final question today is from Terence Flynn from Goldman Sachs. Great, thanks for taking the question. Congratulations on the elegant integration.

Thank you My final question today is from Terence Flynn from Goldman Sachs.

Great. Thanks for taking the question congrats on the Allergan integration.

Terence Flynn: You mentioned in your comments that RINVOC uptake is accelerating here. I was just wondering if you could provide a little bit more color on that. Is that being driven by COVID and maybe teleprescribing having an advantage over some of the injectables? And if so, do you see that as being a durable change here as we come out of the pandemic? And then the second one I had, it was just

You mentioned, you're in your comments that RIN Voake Uptakes accelerating here was just wondering if you could provide a little bit more color on that is that being driven by cove, it and maybe tell what prescribing Haven, an advantage over some of the Injectables and if so do you see that as being a durable change here as we come out of the pandemic and then the second one ahead. It was just.

On Venclexta I noticed you are running some trials for solid tumors, maybe just remind us of the rationale here behind that approach and and how optimistic are you. There as you move into later stages. Thank you.

Rick Gonzalez: I noticed you're running some trials for solid tumors. Maybe just remind us of the rationale here behind that approach and how optimistic you are as you move into later stages? Thank you. Okay, thanks. I'll take the first question, Mike, and cover the second one.

Okay. Thanks, I'll take the first question, Mike and cover the second one so when vote clearly has started the ramping a fairly significant way I think it's associated with two things.

Rick Gonzalez: So, Winvo has clearly started the ramp in a fairly significant way. But I think it's associated with two things. One thing is, anytime you see a product, it's about eight months into its launch. You typically start to see that inflection point. Unsuccessful Products. As you go out and present the data to physicians and start to educate physicians, and they start to get some use, you tend to see that inflection point start to happen around six months. So I think it's the natural inflection point that we would have expected if the product had been successfully accepted into the marketplace the way we hoped as a high-efficacy agent. I think there is some benefit that we're seeing during the COVID crisis that it isn't oral, so it's a little easier to prescribe than an injectable might be. So we're probably getting some collateral benefit associated with that, but I don't think that's the fundamental benefit. So I'll take the question with respect to Venclexta in solid tumors. I think there are two different lines of evidence.

One is anytime you see a product it's about eight months into its launch.

Typically started to see that inflection point.

Unsuccessful products as you go out and you present, the data into physicians and started to educate physicians and they start to get some use we tend to see that inflection point start to happen around six months.

So I think it's the natural inflection point that we would have expected.

If the product was being successfully accepted into the marketplace, where we hoped as a as.

As a high efficacy agent I think there is some.

Benefit that we're seeing grooming cobrand crisis that it is an oral so it's a little easier to the prescribed and injectable might be so we'll probably getting some collateral benefit associated with that but I don't think thats the fundamental that we're saying.

Right. So I'll take the question with respect to Venclexta in solid tumors I think there's two different lines as evidenced in breast cancer there are.

Mike: In breast cancer, there is an investigator-sponsored study that showed promise in breast cancer, and so there's a follow-up study there to confirm that, and if that were confirmed, it would obviously be a substantial opportunity, given the unmet need there. And then there are other solid tumors, such as both small cell lung cancer and non-small cell lung cancer, where there's preclinical rationale that warrants exploration. And so I would characterize the solid tumor program in Venclexta as higher risk but high reward, worthy of exploration. The solid tumor program in Venclexta has not been baked into our thinking and isn't necessary for any of the success that we have talked about with the molecule. But if something were to hit there, it represents a very nice upside, and I think there's enough rationale to warrant the exploration. Okay. Thank you.

Mike: So 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. This does conclude today's conference. You may disconnect at this time. ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? , , , , , , , , , , , , , , , ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? Good morning, and thank you for standing by.

Operator: Welcome to the AbbVie second quarter 2020 earnings conference call. All participants will be able to listen only to the question and answer portion, and you may ask a question by pressing star one. I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations. Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer, Michael Savarino, Vice Chairman and President, and Rob Michael, Executive Vice President and Chief Financial Officer. Joining us for the Q&A portion of the call is Laura Schumacher, Vice Chairman, External Affairs, Chief Legal Officer, and Corporate Secretary. Before we get started, I remind you that some statements we make today may be considered forward-looking statements for purposes of the private securities litigation.

Operator: AbbVie cautions that these forward-looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on AbbVie's operations, results, and financial results that may cause actual results to differ materially from those indicated in the forward-looking statement. Additional information about these risks and uncertainties is included in our 2019 Annual Report on Form 10-K and in our other SEC filings. undertakes no obligation to us. On today's conference call, as in the past, non-GAAP financial measures will be used to help. These non-GAAP financial measures are reconciled with comparable GAAP financial measures, which can be found on our website.

Operator: Please note that the second quarter financial results and guidance provided on today's call for sales, EPS, and line items of the P&L reflect a full period of legacy AbbVie operations and a partial year of the Allergan Portfolio since the transaction closed in early May of this year. In addition, we have provided a quarterly comparable historical trend analysis for key product revenues of the newly combined company as a supplemental table in our earnings report. This table supports the comparison of sales growth on a comparable operational basis.

Operator: Including Full Quarter, Current Year, and Historical Results for Comparable Operational Percent Changes are presented at a constant, For this comparison of underlying performance, all historically reported Allergan... and exclude the recent divestitures of ZENPAP. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to Rick. Thank you, Liz. Good morning, everyone.

Operator: And thank you for joining us. Today, I'll discuss our second quarter performance and highlights, and for the first time, I'll provide our 2020 outlook for the newly combined company. Mike will then discuss recent advancements across R&D programs, and Rob will review the quarter and our updated guidance in more detail. Following our remarks, we'll take your questions.

Operator: I'd like to start off by recognizing all of our employees, including those joining AbbVie from Allergan, for all of their hard work and dedication during this pandemic. The AbbVie team has been working diligently and carefully within our facilities and remotely to ensure that our business continues to operate properly and our patients continue to receive their medicine. Before I speak to the strong financial performance this quarter, I'd like to characterize the state of the recovery of the business from the COVID crisis. Let me start with the legacy AbbVie side of the business, which demonstrated robust performance leading into the pandemic and has remained resilient. The impact on continuing patients for Humira and new patients for Renvo, Skyrizzy, and Venklexta was not as pronounced as we had previously anticipated.

In that there is an investigator.

Operator: While patient flow has not recovered in most therapeutic segments, we're encouraged by the level of stabilization and the recent positive demand trend. Overall, the legacy AbbVie business continues to perform very well, with standalone revenue growth in the second quarter of approximately eight and a half percent on an operational basis, excluding the negative impact from COVID. On the Legacy Allergan side of the business, we saw a significant COVID-related impact on Botox Therapeutics and our Aesthetics business in the second quarter. However, both businesses are seeing a rapid recovery and are now performing near pre-COVID levels. Other key brands, such as Velar and Ubrelvi, were impacted in a manner similar to the AbbVie-based business, and we're pleased with the recent trends and progress. Overall, COVID had a substantial impact on second-quarter reported revenue, with an estimated net unfavorable impact of more than 900 million dollars.

Operator: However, by the end of June, the total business had recovered to more than 90% of pre-COVID levels. So I'm pleased with the resilience and the rapid recovery across our portfolio, and I'm confident in the continued strong underlying demand and performance of the combined new company. Despite the impact of COVID, we delivered a strong second quarter performance. Adjusted earnings per share of $2.34 were well above our expectations.

Operator: The $0.21 feet included $0.11 of net accretion from Allergan, as well as $0.10 of favorable performance versus the midpoint of our standalone guide. Total revenues were $10.4 billion, including approximately $8.4 billion of legacy AbbVie sales, significantly above our expectations for the standalone portfolio, with continued robust performance in both HEMONC and immunology, despite the impact of COVID. PMOC revenues of approximately $1.6 billion were up strong double digits again this quarter, and Provica sales grew approximately 17% on an operational basis, reflecting continued strong performance in CLL, where we remain the clear market leader, and Clexta sales were up more than 80% on an operational basis, with strong growth in CLL and AML.

Sponsored study that showed promise in breast cancer and so there's a follow up study there to confirm that and if that were confirmed it would be obviously a substantial opportunity given the unmet need there and then there are other solid tumors such as.

Operator: During the quarter, we also announced a strategic collaboration with GenMap to further build our oncology portfolio with a CD3 by CD20 bispecific antibody that has the potential to be a best-in-class therapy across B-cell malignancies. Our leading immunology business delivered revenues of more than $5.3 billion, reflecting growth of more than 8.5% on an operational basis. U.S. humeral revenue growth remains strong, up 5%, with continued demand from the large installed patient base partially offset by the impact of COVID-19. The International Humeral Biosimilar Dynamics in the Quarter were better than our expectations. Skyrizzy continues to perform well and has maintained its leading in-play psoriasis patient share, which includes both new and switching patients, at more than 30 percent. As expected, we saw modest delays to new patient starts during the quarter as a result of the COVID-19 dynamic.

Operator: However, recent prescription trends and increasing enrollment in our Ambassador Program, two leading indicators, demonstrate a strong growth trajectory and support our full year guidance of $1.4 billion. We're also seeing very encouraging trends for Winvoke, where rheumatology office visits are approaching pre-COVID levels. Renvoke revenues were up more than 70% on a sequential basis and currently reflect 15% in-play RA patient share, which is now nearly at parity to Humira, the market leader in in-play share, and above all other agents in the sector. We're also making excellent progress with our immunology pipeline, which Mike will discuss further momentarily. As I noted during the quarter, we successfully completed the acquisition of Allergan, creating a stronger and more diverse AbbVie. The transaction significantly expands and diversifies AbbVie's revenue base and complements our existing leadership positions in immunology and hematological oncology, with additional growth franchises in aesthetics and neuroscience.

Operator: We have growth opportunities in neuroscience with Botox Therapeutics, Baylar, and Ubrelvi. And we have the leading global aesthetics business with flagship brands, including Botox Cosmetics, and Jupiter. I'll start with neuroscience, which had sales of roughly $735 million to AbbVie in the second quarter. Baylor continues to demonstrate rapid growth and is well on its way to surpassing $1 billion in annual revenue.

Operator: Underlying demand has remained resilient despite the COVID-19 pandemic, with strong double-digit growth again this quarter. We see significant room for continued expansion within Baylor's existing indications, bipolar disorder, and schizophrenia. Major Depressive Disorder, or MDD, represents another potential large indication, with two Phase III trials well underway.

Operator: Also within neuroscience, we now have a portfolio of migraine therapies that have the potential to support long-term growth in a highly attractive and underserved market. Our migraine portfolio is anchored by Botox Therapeutic, which had revenues of roughly $300 million for AbbVie in the second quarter. Despite multiple new competitive entrants, Botox Therapeutics has largely retained its total treated patient base, a testament to its efficacy, safety, and brand recognition. Like many physician-administered products, Botox Therapeutics saw a significant impact from COVID-19 in the second quarter, with global sales down approximately 20% on a comparable operational basis. However, we're pleased by the recent data trends, which demonstrate a fast recovery, and performance is now close to pre-COVID levels. The launch of Ubrelvi, the first-to-market and leading oral CGRP for acute migraine, is off to an excellent start.

Operator: Feedback from physicians has been very positive, giving Ubrelvi's efficacy, safety, and convenient dosing profile relative to current standards of care. Commercial access for UBELVI is now at 70%, which, along with increased consumer promotion, will further support the product's launch trajectory. We're also developing a toji pan for the prevention of episodic and chronic migraines.

Operator: We recently disclosed positive top-line results from a Phase III study in episodic migraine, which will support regulatory submission early next year. As a fourth pillar of growth, we now have the world's leading global aesthetics franchise, which generated sales of roughly 480 million dollars for AbbVie in the second quarter. As anticipated, we saw a decline in year-over-year comparable operational growth among aesthetic healthcare providers closed during the initial phase of COVID. However, it's now been roughly two months since most major geographies have begun to reopen, and we're pleased with the strong recovery trends we're seeing. As of the end of June, the vast majority of our aesthetics accounts have reopened in the U.S., and we're seeing considerable pent-up demand. Current U.S. aesthetic revenues have recovered and are approaching 95% of pre-COVID levels.

Operator: Outside the US, we're also seeing steady recovery trends in China and Western Europe. Current international aesthetics revenues have recovered to approximately 90% of pre-COVID levels. Overall, we're very pleased with the momentum we're seeing on our aesthetics franchise. More broadly, we see aesthetics as a durable cash-pay business with an opportunity for significant market growth, as well as continued new innovation, driving long-term performance. While strategically important, the acquisition of Allergan will also drive strong financial benefits. The integration has been relatively seamless, and we're impressed by the caliber of talent that we've welcomed into AbbVie.

Operator: We remain on track with our synergy target of more than $2 billion in expense rationalization by the third year from transaction closing, which Rob will discuss further in his prepared remarks here momentarily. When you take these synergies into consideration, along with the continued P&L leverage from our expected sales growth, we expect further operating margin expansion over the next couple of years. While the COVID crisis remains a fluid situation, our business continues to remain resilient and demonstrate strong underlying growth. Although we continue to carefully watch COVID-related events in the U.S., we're pleased with our recent business trends and the progress we're making towards recovery, and we expect performance will continue to ramp to normalized levels over the course of the second half of 2020. With these current assumptions and based on our recent outperformance of our base business, today we're issuing full year 2020 Adjusted Earnings Per Share guidance for our new combined company of $10.35 to $10.45, reflecting growth of 16.3% at the midpoint.

Operator: This guidance assumes $0.70 of net accretion from the Allergan transaction in 2020, which represents 11% accretion on an annualized basis, ahead of our initial projections for the transaction, despite the COVID impact that I outlined earlier. Overall, we continue to see good momentum across our total portfolio and across our pipeline. We reported a very strong second quarter performance and remain encouraged by the recent recovery trends, which are faster than we expected. We continue to expect that the COVID pandemic will have a transient impact on our business.

Operator: Further recovery continuing through the second half of 2020. With the closing of the Allergan transaction, AbbVie is well-positioned for enhanced long-term growth potential, a growing dividend, rapid debt repayment, and strong investment in innovation across our therapeutic categories. With that, I'll turn the call over to Mike.

Mike: Thank you, Rick. We had a very productive quarter, with continued progress across all stages of our pipeline. Additionally, with the recent closing of the Allegan acquisition, we added promising pipeline assets in the areas of aesthetics and neuroscience. We look forward to sharing updates as those programs progress through development.

Mike: In immunology, we continue to advance our programs for RINBOK and SCIRIS-E in several new disease areas. This year, we intend to submit regulatory applications for three additional indications for RINVO. In June, we submitted applications for RENVOC and psoriatic arthritis, and we expect to file applications for atopic dermatitis and ankylosing spondylitis later this year. We also recently reported top-line results from our three registrational trials for RINVOC and atopic dermatitis. Two of these Phase 3 studies, Measure Up 1 and Measure Up 2, evaluated RINVOC as monotherapy for the treatment of adolescent and adult subjects with moderate to severe atopic dermatitis or candidates for systemic therapy.

Mike: In the Measure Up 1 and Measure Up 2 studies, both doses of RINVOC met all primary and secondary objectives, demonstrating significant improvement in skin clearance and itch compared to placebo. In Measure Up One, roughly 70% of patients receiving the 15-milligram dose and 80% of patients on the 30 milligram dose achieved a 75% or greater improvement in skin lesions by week 16. We saw similar rates of skin clearance in the Measure Up 2 study, with roughly 60% of patients receiving the low dose and 73% of patients on the high dose achieving a 75% or greater improvement by week 16. We also saw very rapid responses in these, with clinically meaningful reductions in itch observed as early as one day after the first dose in patients receiving 30 mg, and two days after the first dose in patients receiving 15 million in both studies.

Mike: We also saw very strong results in our third registrational trial, the ADD-UP study, which evaluated RINVOC in combination with topical corticosteroids. Similar to the results from the two measure-up trials, RINVOC met all primary and secondary endpoints in the add-on study. Patients who received RINVOC showed significant improvements in skin clearance and reduction in itch compared to patients receiving placebo plus topical steroids following 16 weeks of treatment.

Mike: Treatment with RENVOC also led to a significant increase in the number of steroid-free days, and more patients receiving RENVOC were able to stop topical corticosteroids altogether. We're very encouraged by both the level of efficacy and the safety profile we've seen across all three Phase III atopic dermatitis studies, and we remain very confident that RINVLG has the potential to provide a strong benefit-risk In addition to these three registrational studies, we are also evaluating RINPOC in a head-to-head Phase 3 trial against dupilumab and expect to see data from this study later this year. In the area of inflammatory bowel disease, our Phase 3 program for RINVOC and ulcerative colitis is progressing ahead of schedule.

Both small cell lung cancer, non small cell lung cancer, where there's preclinical rationale.

Mike: And we now expect to see top-line data from the first phase three induction study later this year. We also recently reported top-line results from a proof-of-concept study evaluating our novel TNF steroid conjugate, ABBV3373NRA. In this study, our goal was to drive a greater reduction in disease activity beyond the levels that can be achieved with Chimera or other high-efficacy agents, such as Renvo

Mike: To achieve adequate statistical power, we used pre-planned historical Humira data in combination with in-trial data when comparing ABBV 3373 to Humira. The study used two analyses for the primary endpoint, which evaluated improvement from baseline in DAS 28. The first analysis used a propensity matching strategy to compare ABBV 3373 with historical Humira data.

Mike: This analysis showed a greater change in DAS 28 from baseline to week 12 for 3373 compared to the pre-specified Humira data. The second analysis used a Bayesian approach to compare 3373 to a combined in-trial and historical Humira dataset. And this analysis predicted with a 90% probability that 3373 was associated with a greater improvement in DAS28. Based on these encouraging results, we plan to advance the TNF-started conjugate program in RA, with a Phase IIb dose-ranging study expected to begin in the first half of 2021. We also plan to begin clinical studies next year in other immune-mediated diseases. Also, in the area of immunology, we're making good progress advancing the programs for Skyrizzy in new disease areas. We expect to see data from Phase III studies in psoriatic arthritis later this year and in Crohn's at the end of this year or early next, with regulatory submissions for both indications expected in 2021.

Mike: We continue to advance our HEMONC strategy with several important data readouts and study starts occurring this year. We've established a leading HEMONC portfolio within Bruvica and Benck-Lexna in areas such as CLL and AMC, and we will continue to generate data to demonstrate the utility of both drugs across a wide range of patient populations and cancers at the recent IHA Congress. Detailed results from the Phase 3 VLA-A study were reported, which showed that treatment with VanClexta plus azacitidine resulted in a 34% reduction in the risk of death compared to azacitidine plus placebo in AML patients who are ineligible for intensive chemotherapy. The median overall survival for patients in the Venclexa arm was 14.7 months versus 9.6 months in the placebo arm. Patients in the Venclexa arm also showed more than double the rate of composite complete remission compared to those treated with azacitidine alone. This filing is currently being reviewed by the FDA under the Real-Time Oncology Review Program and Project ORBIT. To date, the AML program has focused on venclextus use as a frontline treatment in transplant-ineligible patients.

Mike: This year, we are expanding the program into other patient segments with the goal of establishing VenClexta as a gold standard across the AML patient spectrum. Earlier this year, we initiated two Phase III studies evaluating VenClexta as a maintenance therapy in AML. One trial in fit patients with AML who have received a stem cell transplant but remain at high risk for relapse, and a second trial in patients with AML who are in first remission after receiving conventional induction and consolidation chemotherapy.

Mike: In addition, building upon the survival advantage observed in the transplant-ineligible population, we are planning to initiate a new randomized study later this year testing Venclexta in combination with intensive chemotherapy in patients who are eligible for more intensive induction regimens. Our comprehensive development program will position VenClexta as a foundation for combination therapies in AML across all patient segments. We also recently announced a broad oncology collaboration with GenMap to jointly develop and commercialize three next-generation bispecific antibody products and establish a discovery collaboration to create additional differentiated antibody-based therapeutics for cancer. The lead asset in this partnership, Epiridomab, a CD3 by CD20 bispecific antibody, has demonstrated a strong efficacy profile, favorable safety, and a more convenient dosing regimen in early phase trials. We believe that Karitimab has the potential to become a best-in-class therapy across a number of B-cell malignancies, including diffuse large B-cell lymphoma and follicular lymphoma, and we are rapidly advancing it to Phase III trials.

Mike: And lastly, a few updates from other areas of our pipeline. We previously presented positive progression-free survival data from two Phase III studies for bolivar in frontline ovarian cancer and BRCA breast cancer. Based on developments in the field and additional discussions with the FDA, we will not be submitting regulatory applications without mature overall survival data. We will continue to follow patients in the ongoing trials as overall survival data mature. In iCare, we recently announced receipt of a complete response letter from the FDA for the Abicapar BLA. The CRL indicated that the rate of intraocular inflammation observed in the Phase III program resulted in an unfavorable benefit-risk ratio. We are currently reviewing the ABICAPAR program to determine next steps and will provide updates as they become available. In Women's Health, during the quarter, we received FDA approval of Orian as the first non-surgical oral treatment for the management of heavy menstrual bleeding associated with uterine fibroids in premenopausal women. This new non-surgical treatment represents an important therapeutic option for women suffering from uterine fibrosis and Neuroscience.

That warrants exploration.

Mike: We recently reported top-line results from a Phase III study evaluating Itojipan for the prevention of episodic migraines. In this study, all three doses of Etojapat met the primary endpoint, evaluating the change from baseline in mean monthly migraine days across the 12-week treatment period. The two higher doses, 30mg and 60mg, also met all secondary ends, while the 10 milligram dose met four out of six of the second.

Mike: Allergan had previously reported positive results from one registration-enabling study, and following this second positive study, we plan to submit our regulatory applications for episodic migraine prevention in the first quarter of 2021. In summary, we've seen tremendous progress across all stages of our pipeline in the first half of the year, and we remain on track for further advancements in the remainder of 2020. With that, I'll turn the call over to Rob for additional comments on our second quarter performance and financial outlook.

So why would I would characterize the solid tumor program as as as higher risk, but high reward worthy of exploration the solid tumor program and then Clecs is.

Rob: Thank you, Mike. Starting with the second quarter results, we will deliver top and bottom line performance ahead of expectations. We reported adjusted earnings per share of $2.34, above our guidance midpoint by $0.21. This includes $0.10 of stronger performance from Legacy AbbVie and $0.11 of accretion from Allergan. Total net revenues were $10.4 billion, including $2 billion in sales contribution from the Allergan portfolio. Legacy AbbVie was approximately $300 million ahead of our standalone sales guide, driven by Ren Volk, Sky Rizzi, and Humera. COVID-related inventory stocking for the first quarter largely reversed as expected. U.S. Humira sales were approximately $4 billion, ahead of expectations due to the lower impact from COVID on continuing patient prescriptions. Wholesale or inventory levels remain below half a month in the quarter.

Rob: International Humerus sales were $863 million, down 17.4% operationally, reflecting biosimilar competition across Europe and other international markets, and ahead of our expectations. Guy Rizzi Global Sales were $330 million, with continued strong U.S. in-play market share. We also continue to see robust demand for Rinvoke, with sales of $149 million in the quarter and a rapid increase in U.S. in-play market share. Bruvica Global Net Revenues were approximately $1.3 billion, up 17.2%, driven by continued strong performance in CLL. Benklexa revenues were $303 million, with strong demand across all approved indications. Global Maverick sales were $376 million, down 51.4% on an operational basis, as treated patient volumes declined during the COVID pandemic. Allergan Aesthetics contributed sales of $481 million in the quarter.

Rob: Botox Cosmetic, with sales of $226 million, and Juvederm, with sales of $113 million, are both seeing a faster than expected recovery from the COVID pandemic. Neuroscience Global Revenues were $734 million. These results were led by Botox Therapeutic, Braylar, and Ubrelvi.

Rob: Combined sales of more than $500 million. We also saw a significant contribution from our eye care business, which had global sales of $417 million. Starting now with the P&L profile for the second quarter. The Adjusted Gross Margin was 82.8% of sales. The Adjusted R&D Investment was 12.8% of sales, and the Adjusted SG&A Expense was 22.9% of sales. The adjusted operating margin ratio was 47% of sales, including a negative impact of 70 basis points due to the reversal of COVID-related inventory stocking from the first quarter. Adjusted Net Interest Expense was $484 million, and the adjusted tax rate was 11.4%.

Rob: Today we are issuing combined company guidance for the first time. As Rick previously discussed, we are closely monitoring the impact of the COVID pandemic and have factored the latest trends into our updated forecast. We now expect fully or adjusted earnings per share between $10.35 and $10.45, including $0.70 of accretion from the Allergan transaction, which represents an annualized contribution of 11%. Also excluded from this guidance is $6.23 of known intangible amortization and specified items.

Rob: This guidance now contemplates full-year revenue of approximately $45.5 billion. At current rates, we now expect foreign exchange to have a 30 basis point unfavorable impact on fully reported sales growth. Included in this revenue guidance are the following updated for your assumption. We now expect U.S. Humira sales growth of approximately 8%. We now expect international Humira sales of approximately $3.5 billion.

Rob: For RenVoke, we now expect global revenues of approximately $600 million. For global HCV, we now expect sales of approximately $2.1 billion as treatments remain below pre-COVID levels. For aesthetics, we expect global sales of approximately $2.4 billion, including approximately $1 billion from Botox Cosmetic and approximately $650 million from Juvederm.

Rob: For neuroscience, we expect global sales of approximately $3.5 billion, including approximately $1.4 billion from Botox Therapeutic and approximately $950 million from Braylar. For iCare, we expect global revenues of approximately $2.1 billion, including approximately $700 million from Restasis, which assumes no generic competition in 2020. For Women's Health, we expect global revenues of approximately $700 million. All other Foliar Product Guidance Assumptions remain

Rob: Moving to the P&L, we now forecast adjusted gross margin just above 82% of sales, adjusted R&D investment to be approximately $5.8 billion, adjusted SG&A expense to be approximately $9.9 billion, and adjusted operating margin of approximately 48% of sales. This P&L guidance includes approximately $600 million in expense synergies for the partial year in 2020. We remain on track to deliver greater than $2 billion in expense synergies by 2022. We now expect adjusted net interest expense of approximately $2 billion, which includes the cost of financing the Allergan transaction. We now model a non-gap tax rate of just above 11% for the newly combined company.

Rob: Finally, we now expect our full-year average share count to approach 1.7 billion shares, including the equity issued to finance the Allergan acquisition. As we look ahead to the third quarter, we anticipate adjusted revenue of approximately $12.8 billion. At current rates, we expect foreign exchange to have a modest, unfavorable impact on reported sales growth.

Rob: We are forecasting an adjusted operating margin ratio of just above 48% of sales. We model a non-gap tax rate of 11.6%, and we expect the average share count to approach 1.8 billion. We expect adjusted earnings per share between $2.73 and $2.77, excluding approximately $1.59 of known intangible amortization and specified items.

Rob: AbbVie remains well-positioned to execute on our capital allocation priorities, including rapidly paying down debt, supporting a strong and growing dividend, and pursuing additional innovative mid- to late-stage pipeline assets. We generated $6.9 billion of operating cash flow in the first half of the year, and our cash balance at the end of June was $6 billion. We're on track to pay down 15 to $18 billion of combined company debt by the end of 2021, of which nearly $7 billion has already been repaid. We expect to achieve a net debt to EBITDA ratio of 2.5 times by the end of 2021, with further deleveraging through 2023. In closing, AbbVie's performance and financial condition remain strong.

Not been baked into our thinking and isn't necessary for any of the success that we have talked about with the molecule, but if something were to hit their represents a very nice upside and I think theres enough rationale the warranty ex exploration.

Rob: We are very pleased with the momentum of the business heading into the second half of 2020. With that, I'll turn the call back over to Liz Shea. Thanks, Rob. We will now open the call to questions. Operator, first question, please.

Operator: Thank you. And as a reminder to ask a question, please press star one. Our first question today is from Randall Stanicky from RBC Capital Markets. Great. Thanks, guys. One for Rick and one for Rob.

Christopher Thomas Schott: Rick, a bigger picture question, a huge part of the. Randall, Randall, sorry to interrupt. We can't hear you very well. Is there any way you could, Great, is that better? Wiley.

Christopher Thomas Schott: Great. Rick, I wanted to ask you, a big part of the AbbVie story is growth on the other side of Humira in 2023. There's still some trepidation from investors in getting comfortable with the step down.

Rick Gonzalez: What would you say to those investors to get people comfortable that there's a growth story on the other side of Humira? And what do you need to do specifically between now and then to position the business for that? Okay. Randall, did you have a second question, or is that... Yeah, the second question. I'll ask it up front for Rob. Just, if you could help us understand the steady state, the run rate for R&D. I think you said 5.8 billion for this year.

Christopher Thomas Schott: That'll go higher on an annualized basis, but you're also pulling a billion dollars of R&D synergies out of that as well. Okay, I'll cover your first question, Randall, and then Rob can jump in and talk through the R&D funding question that you have. So look, I think it's a great question.

Rick Gonzalez: It is one that, obviously, the vast majority of investors are interested in. We have described, I think, to investors the rationale for why we're excited about doing the Allergan transaction. It obviously gives us a tremendous amount of ability to be able to manage our way through the loss of exclusivity in the US for Humira. It provides us with two more major growth franchises for the company to help drive growth. And it allows us to continue to invest aggressively both in internal R&D as well as external. And so I think it provides the framework to allow us to continue to perform as we have done over the last number of years. I mean, clearly, we certainly have a track record of showing that we can grow this business and we can build on this business. We've demonstrated that since 2013 when we spun out. So what makes me excited and what makes me comfortable that I can ultimately grow the business through the LOE?

Rick Gonzalez: I think it starts with, look, we have six, yeah, six major growth assets in our business today. If you step back and look at them, six medicines that have tremendous opportunities to be able to grow. Skyrizzy, Winvoke, Embruvica, Fenclexta, Velar, Ubrelli.

Rick Gonzalez: We'll probably have a Tojopan here in the not too distant future. We'll have a seventh asset, all in markets that have a significant opportunity to be able to grow. When I look at our R&D productivity, both in the indication expansion area, as well as new assets, and I'll talk about that here in a second, I'm very comfortable with our ability to be able to continue to drive the pipeline. When you look at the projections that we made for Renvoke and Skyrizzy, as an example, when we made those projections a year or two ago, those peak projections for 2025, we based those projections on the fact that those assets had to achieve roughly high single-digit market share positions. As we mentioned, right now, if you look at Skyrizzy, it's achieving an in-play share of 30%. Ringgold has really stood up and rapidly started to capture share.

Rick Gonzalez: It's at 15% and growing at a very aggressive clip. I would predict it will quickly become the in-play market leader above Shumera here in the not-too-distant future. But they're already significantly above what those estimates were. The longer you stay at in-play shares that look like that, obviously, the greater you're going to exceed that.

Rick Gonzalez: If you get to 20% instead of high single digits, obviously, the revenue will be approximately two times what we originally projected. So that gives me a high level of comfort. When I look at Vinclexta as an example, there's still a significant opportunity to grow there. If we get an indication expansion, both broadening AML as well as T1114 and multiple myeloma, those are two significant opportunities that will continue to be able to drive growth. Imbruvica still has a significant opportunity to be able to drive growth. When I look at Valar as an example, that's a very interesting asset.

Rick Gonzalez: It has a great profile in that market, and the drug does. It's obviously growing significantly. I mean, it's been growing now at the rate of about 80 or 90% year over year.

Rick Gonzalez: There's still plenty of room to grow in bipolar and schizophrenia, and if one of those two phase three studies plays out effectively, MDD will be a very large additional indication, which will allow us to be able to drive significant growth there. And then there's the migraine franchise. I think migraine is something that's underappreciated.

Rick Gonzalez: If you look at the penetration right now of oral agents in the acute area, it's running about 12 to 14% of total scripts. So obviously, there's a significant opportunity to be able to continue to expand that market. We think we have the assets to be able to do that. And, obviously, we think we have the promotional ability to do it.

Rick Gonzalez: So I think we have the tools right now to be able to drive significant growth through the LOE. On the other side of the LOE, obviously, our pipeline will continue to play out with the additional indications. You're starting to see assets like our TNF steroid evolve.

Rick Gonzalez: I think the GenMap collaboration is an important collaboration to continue to build out our HEMONC and potentially solid tumor platform. And so, there are a lot of exciting opportunities. So, you know, I feel very confident in one, how the business is running now despite all of the disruption associated with COVID. But if I look at the part of the business that we control directly, I feel very good about how the business is running.

Hi, Thank you.

Rick Gonzalez: And so, I believe we will navigate our way through it. And I think as we get a little closer, investors will gain an even greater appreciation of it. Randall, this is Robin.

Rob: Your question on R&D. So if you think through the partial year synergies of $600 million, about $400 million of that comes from R&D. And by 2022, about 50% of the greater than $2 billion in synergies will come from R&D.

Rob: So while I would expect the expenses to annualize, obviously, or the partial year close, we'll also see those synergies ramp up. So the best way to think about it is a steady state R&D level in the $6 billion range. Great, thanks. Thanks, Randall. Operator, next question, please.

Operator: Thank you. Our next question is from Navin Jacob from UBS. Hi, thanks for taking the question. Just wanted to expand on some of the opportunities that Rick had just mentioned. Again, Naveen, can you please talk speak up a little bit?

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Navin Jacob: Well, let's see if we can turn our end around. Sure, sir. Is this okay? Can you hear me?

Operator: Okay. That's better. Thank you. Okay. I will yell.

Operator: So, with regard to... I can hear you now. We turned our end up. So you probably don't need to yell.

Today's conference call, if you'd like to listen to a replay of the call. Please visit our website and investors that Abbvie dotcom. Thanks again for joining us.

Navin Jacob: All right. All right. Fair enough.

Mike: With regard to the Venclexa opportunity and multiple myeloma, the Canolis trial, wondering if you could give us an update there, and how large that potential opportunity could be? Obviously, relapsed refractory multiple myeloma is... pretty, um... Thank you all so much for joining us today, and we hope you have a great rest of your day.

Operator: Thank you. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. This is Mike. I'll take those,

Chris Schott: With respect to BenClexa, we see very real potential in the T11-14 multiple myeloma population. If we look across our trials, early phase trials, and then some sets of analyses of later phase trials where we have data from T11-14, we see very consistent responses. We see high response rates, and we see long progression-free survival in the T11-14 population. And that makes sense because that T11-14 population has a transformed cell that has a B cell-like phenotype, and it's BCL2 high.

Chris Schott: So we have the Phase 3 study well underway now. It's an event-driven trial, but we would hope to have data, you know, in the near future, in 21. And, you know, that study is designed to confirm those earlier observations. In terms of how large an opportunity it can be, the T11-14 population is about 20 percent of multiple myeloma.

Mike: Multiple myeloma is a big indication, so 20 percent of that is a lot. Now, as you mentioned, it's becoming a competitive space, but one of the advantages of having a biomarker-driven therapy is that we can identify, and physicians can identify in practice, what patients are likely to respond to Venclexta. So they'll know what a Venclexta patient looks like, and we think that'll be a real option and a real advantage.

Mike: So we're very optimistic about that aspect of the program, and we think it represents an important additional role for VanClexta. With respect to 951, that is a program that's designed to deliver Duopa-like efficacy through a subcutaneous insulin pump-like device. And so to do that, we had to develop two novel prodrugs. These are NMEs that are rapidly converted to the active agents in circulation, and they allow delivery of levofopa and carbidopa ultimately through this insulin pump-like device that you just can't do with apparent compounds because of their physical properties. Chemical Limitations and Local Tolerability

Mike: So it really does represent a real breakthrough. What we know about the efficacy of Duopa is that it is very, very strong. It really is transformational. But it takes a lot to get that effect. Patients have to have a gastric tube placed and threaded down into the small bowel.

Thank you. This does conclude today's conference you may disconnect at this time.

Mike: They have to maintain that. So this is a much more patient-accessible, patient-friendly, if you will, way to deliver the same sort of efficacy. And so we think that it has the potential to really expand the number of patients who would be willing to consider a therapy, you know, such as 951. And it's a big market. If you look at Duopa, despite all the limitations, it's doing about half a billion dollars in sales. If you look at deep brain stimulation, there's also considerable use. In aggregate, this market today is well over a billion dollars, probably a billion and a half dollars.

Mike: And not all patients who would qualify by their patient profile are willing to undergo these therapies. So we think that 951 can be a very real opportunity. Thanks, Sabine.

Mike: Operator, next question, please. Thank you. And our next question is from Chris Schott from J.P. Morgan. Great, thanks so much for the questions. Just two for me.

Mike: The first, can you just elaborate a little bit more about how you're thinking about the size of the Invoke in Atopic Derm now that we have this? I guess just a little bit more about how you. [inaudible] Seems like the base AbbVie numbers are unchanged, despite what looked like very, very strong results in the first half of the year, so just help me understand a little bit of the dynamics with that kind of underlying AbbVie. This is Mike. I'll take the first one, and then I'll hand it over to Rick for the second one.

Mike: With respect to atopic dermatitis, you know, we're very pleased with the results that we demonstrated across the phase three trials. They actually exceeded our expectations based on the phase 2B results, and those 2B results were very strong and earned us a breakthrough therapy designation. And we're pleased not only with the efficacy but also with the safety profile. You know, we've said for quite some time that one needs to look at the safety of a drug in the intended population because things like background therapy, risk factors in the population can have a substantial influence on what that profile looks like, not only for the active agent but for the comparator or for placebo. And if you look at the profile in the AD studies, it looks very favorable to our eye. And these were substantial studies and a substantial program overall. This wasn't, you know, a quick study to get an indication of expansion.

Mike: We ran a phase three program for atopic dermatitis that could stand alone for an additional submission. So we think that very strong data package will be a real advantage when we bring this indication to market. If you look at the size of the market overall, I think it's been underappreciated for years. Now that's changing.

Mike: There are a large number of patients who would be eligible for systemic therapy, and obviously, dipilumab is off to a good start over the past several years in that indication. But if you look at their efficacy, only about half of patients achieve an adequate response if you consider that an adequate response in EZ75. And so, you know, in our study, we drove, you know, very good numbers there, higher than that, you know, roughly 50%, albeit through, you know, cross-trial comparisons. So we think that there is a real opportunity for a high efficacy agent in this space. And so, you know, it can play on both ends of the spectrum.

Mike: For patients who don't achieve an adequate response with earlier therapies, this is an obvious choice. But with the efficacy and the safety profile that we've observed, we see no reason why it wouldn't be used up front as well. And, of course, we'll have head-to-head data against dipilumab later this year, as we said in our prepared remark. Chris, this is Rob.

I'll take your question on guidance. So if you take that $0.70 of accretion and you back off the midpoint of $10.40, it gives you a standalone of $9.70 EPS, which is $0.04 higher than our previous guidance. And it's really driven by the sales changes that we've made today. So for US Humira, we took that up 1%, which equals about $150 million, because we're seeing less impact of COVID on continuing patients. Humira OUS, we've taken up $100 million, and we're seeing less erosion than we initially had planned. On RINVOC, that's up $100 million as well, really driven by the rapid in-place share that we're seeing. And that's partially offset by Maverick, as we've seen the market really decline during COVID. But net net revenues are up about $150 million, and EPS is up $0.04 versus our previous guidance for standalone AbbVie. And the only thing I'd add on that is, you know, obviously, we were more favorable on base AbbVie in the quarter than the fourth.

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Good morning, Thank you for standing by welcome to the Abbey's second quarter Twentytwenty earnings Conference call, all participants will be able to listen only until the question and answer portion.

I ask a question by pressing star one.

I would now like to introduce let's let's say vice president of Investor Relations.

Good morning, and thanks for joining US also on the call with me today are reconcile is chairman of the board in Chief Executive Officer, Michael Severino, Vice Chairman and President and Rob Michael Executive Vice President and Chief Financial Officer, joining us for the Q and a portion of the calling for Schumacher Vice Chairman External Affairs, Chief Legal officer, and corporate Secretary before we get started.

I remind you that some statements we make today, maybe considered forward looking statements for purposes of the private Securities Litigation Reform Act of 1995.

The cautions that these forward looking statements are subject to risks and uncertainties, including the impact of the Coca 19 pandemic on happy separation result, and financial results that may cause actual results to differ materially from those indicated in the forward looking statements.

Additional information about these risks and uncertainties is included in our 2019 annual report on form 10-K in our other SEC filings Abby undertakes no obligation to update these forward looking statements except as required by law on today's conference call as in the past non-GAAP financial measures can be used to help investors understand how these ongoing business performance. These non-GAAP.

Yes, what measures are reconciled the comparable GAAP financial measures in our earnings release and regulatory filing from today, which can be found on our website. Please note that the second quarter financial results and guidance provided on today's call for sales F and white items of the piano reflect a full period of legacy Abby operations and a partial year contribution from the Allergan portfolio.

Since the transaction closed in early May of this year. In addition, we've provided a quarterly comparable historical trend analysis for key product revenue was up a newly combined company as a supplemental table in our earnings release. The square. This table supports the comparison of sales growth on a comparable operational basis, including full quarter current year and historical results for.

Well again on a pro forma basis comparable operational percent changes are presented at a constant at constant currency rate.

For this comparison of underlying performance all historically reported Allergan revenues have been recast informed.

Policies and exclude the recent divestitures untapped and biogas.

Following our prepared remarks, we'll take your questions. So with that I'll now turn the call over to Rick.

Thank you Liz good morning, everyone. Thank you for joining us today ill discuss our second quarter performance highlights.

For the first time, I'll provide or 2020 outlook to the newly combined company. Mike will then discuss recent advancements across R&D programs and Rob will review the quarter and our updated guidance in more detail. Following our remarks, we'll take your questions.

[noise] I'd like to start off by recognizing all of our employees, including those joining abbvie for our down for all of their hard work and dedication. During this pandemic. The abbvie team has been working diligently and carefully within our facilities and remotely to ensure their business continues to operate properly oh patients can.

We continue to receive their medicines.

Before I speak to the strong financial performance this quarter I'd like to characterize the state of the recovery of the business from the Cobot crisis.

Let's start with the legacy Abbvie side of the business.

She has demonstrated robust performance leading into a pandemic and has remained resilient.

The impact on continuing patients for Humira and new patients for when boat, Scott Rosy and Venclexta, we're not as pronounced as we previously anticipated well patient flow has not recovered and most therapeutic segments. We're encouraged by the level of stabilization and the recent positive demand trends.

Yes.

Overall, the legacy Abbvie business continues to perform very well, which standalone revenue growth in the second quarter of approximately eight now percent on an operational basis, excluding the negative impact from cobot.

On the legacy Alexander side of the business, we saw significant posted related impacts.

On Botox therapeutic and other studies business in the second quarter.

Both businesses are seeing a rapid recovery and only outperforming near pre kogas levels. Other key brands such as very large you brought me were impacted in a manner similar to the I'd be based business and we're pleased with the recent trends and progress.

Overall corporate has a substantial impact on second quarter reported revenues with an estimated net unfavorable impact of more than $900 million.

However by the end of June the total business had recovered to more than 90% of pre covert levels. So I'm pleased with the resilience and the rapid recovery across our portfolio and I'm confident in the continued strong underlying demand and performance of the combined new company.

[noise] despite the impact from Covidien, we delivered a strong second quarter performance adjusted earnings per share up $2.34 were well above our expectations. The 21 cents beat included 11 cents of net accretion from Allergan him as well as 10.

Okay favorable performance versus the midpoint of our Standalone guidance.

Total revenues were $10.4 billion, including approximately $8.4 billion of legacy Abbvie sales significantly above our expectations for the Standalone portfolio with continued robust performance in both M&A and immunology, despite the impact from cobot.

Hey, Mike revenues of approximately $1.6 billion were up strong double digits again this quarter Imbruvica sales grew approximately 17% on an operational basis, reflecting continued strong performance in CLL, where we remain the clear market leader.

Flex to sales were up more than 80% on an operational basis with strong growth in CLL and am Mel.

During the quarter, we also announced a strategic collaboration with Gen map to further build our oncology portfolio with the Cdthree by CD 25 specific antibody. It has the potential to be a best in class therapy across B cell malignancies.

Our leading immunology business delivered revenues are more than $5.3 billion, reflecting growth of more than 8.5% our operational basis.

You bet you know revenue growth remained strong up 5% with continued demand from the large installed patient base, partially offset by the impact of covert 19.

Internationally Humira Biosimilars dynamics in the quarter were better than our expectations.

Got region continues to perform well and has maintained its leading in place psoriasis patients share, which includes both new and switching patients have more than 30%.

As expected we saw modest delays to new patient starts during the quarter as a result will be kogan 19 dynamics.

However, recent prescription trends and increasing enrollment no ambassador program to leading indicators demonstrate a strong growth trajectory and support our for your guidance of $1.4 billion.

We're also seeing very encouraging trends for when Voake, where rheumatology office visits are approaching pre covert levels Rainbow revenues were up more than 70% on a sequential basis and currently reflect 15% in play or a patient share which is now new really at parity choose.

Mirror the market leader in place share and above all other agents in the segment.

We're also making excellent progress with our immunology pipeline, which Mike will discuss further momentarily.

As I noted during the quarter, we successfully completed the acquisition of our again, creating a stronger and more diverse abbey.

The transaction significantly expands and Diversifies Abbvies Rep revenue base and complements our existing leadership positions in immunology and Hematological oncology with additional growth franchise is going to statics and neuro science.

Growth opportunity to know science with Botox therapeutics, they lar and royalty and we have the leading global aesthetics business with flagship brands, including Botox cosmetics.

And Juvederm.

I'll start with neuroscience, which had sales of roughly $735 million to abbvie in the second quarter.

They are continues to demonstrate rapid growth.

And as well on its way to surpassing $1 billion in annual revenues underlying demand has remained resilient. Despite gober 19 pandemic with strong double digit growth again this quarter.

We see significant room for continued expansion within balers existing indications bipolar disorder and schizophrenia.

Major depressive disorder or MDD represents another potential large indication with two phase three trials well underway.

Also within those items, we now have a portfolio of migraine therapies that have the potential to support long term growth highly attractive and underserved market.

Migraine portfolio is anchored with botox therapeutic which had revenues of roughly $300 million to abbvie in the second quarter. Despite multiple new competitive entrants botox therapeutic is largely retain its total treated patient base, a testament to its efficacy safety and brand.

Recognition.

Like many physician administered products botox therapeutic saw significant impact from Kogan 19 in the second quarter with global sales down approximately 20% on a comparable operational basis. However, we're pleased by the recent data trends, which demonstrate a fast recovery.

And performance is now close to pre covered levels.

The launch of your Robby.

First to market and leading all see GRP for acute migraine is off to an excellent start feedback from physicians has been very positive given your brokerage efficacy safety and convenient dosing profile relative to current standards of care.

Commercial access for you Belby is now, 70%, which along with increased consumer promotion.

Further support the products launch trajectory.

We're also developing a total Japan for the prevention of episodic and chronic migraine. We recently disclosed positive topline results from a phase three study in episodic migraine, which will support regulatory submission early next year.

As a fourth pillar of growth, we now have the world's leading global aesthetics franchise, which generated sales of roughly $480 million to abbvie in the second quarter as anticipated we saw a decline in year over year comparable operational growth with the steps health care providers close.

During the initial phase up Cove it.

It's now been roughly two months since most major geographies had begun to reopen.

And we're pleased with the strong recovery trends we're seeing.

As of the ended June the vast majority of our aesthetics accounts of reopen in the U.S. and we're seeing considerable pent up demand current use is steady revenues have recovered and are approaching 95% pretty covert levels.

Outside the U.S., we're also seeing steady recovery trends in China, and Western Europe current internationalist statics revenues that were covered grew approximately 90% of pre covert levels. Overall, we're very pleased with the momentum were seeing our aesthetics franchise.

More broadly.

We see a steady acts as a durable cash pay business with an opportunity for significant market growth as well as continued new innovation driving long term performance.

Well strategically important the acquisition of Allergan will also drive strong financial benefits.

Integration has been relatively seamless and were impressed by the caliber talent that we welcome in the happy.

We remain on track with our synergy target a more than $2 billion, an expense rationalization by the third year from transaction closing, which Rob will discuss further in his prepared remarks here momentarily.

When you take these synergies into consideration along with the continued DNL leverage from our expected sales growth. We expect further operating margin expansion over the next couple of years.

Well the government crisis remains a fluid situation our business continues to remain resilient and demonstrates strong underlying growth.

Although we continue to carefully watch covert related events in the U.S.. We're pleased with our recent business trends and the progress we're making towards recovery and we expect performance will continue to ramp to normalized levels over the course of the second half of 20 Twond.

With these current assumptions and based on our recent outperformance of our base business today, we're issuing full year 2020 adjusted earnings per share guidance for our new combined company up $10.35 to $10.45, reflecting growth of 16.

3% at the midpoint.

Guidance assumes 70 cents of net accretion from the Allegan transaction in 2020, which represents 11% accretion on an annualized basis ahead of our initial projections for the transaction.

Despite the cobot impact the outlined earlier.

Overall, we continue to see good momentum across our total portfolio and across our pipeline. We reported a very strong second quarter performance and remain encouraged by the recent recovery trends, which are faster than we expected.

We continue to expect to cope with pandemic, we'll have a transient impact on our business with further recovery continuing through the second half of 2020.

With the closing of the elegant transaction Abbvie is well positioned for enhance long term growth potential a growing dividend rapid debt repayment and strong investment and innovation across our therapeutic categories with that I'll turn the call over to Mike Mike.

Thank you Rick.

We had a very productive quarter with continued progress across all stages of our pipeline.

Additionally, with the recent closing of the Allegan acquisition, we added promising pipeline assets in the areas of aesthetics and narrow science.

We look forward to sharing updates as those programs progress through development.

In immunology, we continue to advance our programs for rent Bowcan, Scott receipt in several new disease areas.

This year, we intend to submit regulatory applications for three additional indications for invoke.

In June we submitted applications Forendo can sorry, attic arthritis, and we expect to file applications for a topic dermatitis ankylosing spondylitis later this year.

We also recently reported topline results from our three Registrational trials for rent book any atopic dermatitis.

Two of these phase three studies measure up one and measure up to evaluated written bulk as a monotherapy for the treatment of adolescent and adult subjects with moderate to severe atopic dermatitis for candidates for systemic therapy.

In the measure up one in measure up to studies, both doses of rentals met all primary and secondary endpoints demonstrating significant improvement in skin clearance and ditch compared to placebo.

In measure up one roughly 70% of patients receiving the 15 milligram dose and 80% of patients on the 30 milligram dose achieved to 75% or greater improvement in skin lesions by weak 16.

We saw similar rates of skin clearance in the measure up to study with roughly 60% of patients receiving the low dose and 73% of patients on the high dose achieving a 75% or greater improvement by weeks Weve 16.

We also saw very rapid responses in these studies with clinically meaningful reductions in niche observed as early as one day. After the first dose in patients receiving 30 milligrams and two days after the first dose in patients receiving 15 milligrams in both studies.

We also saw very strong results in our third Registrational trial, the add up study.

Which evaluated to invoke in combination with topical corticosteroids.

Similar to the results from the to measure up trials Rinpoche met all primary and secondary endpoints in the add up study.

With patients who received bring about rainbow showing significant improvements in skin clearance and reduction in etch compared to patients receiving placebo plus topical steroids falling 16 weeks of treatment.

Treatment with Randgold also led to a significant increase in the number of steroids free days and more patients receiving lynbrook, we're able to stop topical corticosteroids altogether.

We're very encouraged by both the level of efficacy and the safety profile, we've seen across all three phase III atopic dermatitis studies and we remain very confident that renvela has the potential to provide a strong benefit risk profile in moderate to severe atopic dermatitis.

Okay.

In addition to these three Registrational studies, we're also evaluating revoking a head to head phase three trial against diplomat and expect to see data from this study later this year.

In the area of inflammatory bowel disease, our phase three program for invoking ulcerative colitis is progressing ahead of schedule.

And we now expect to see topline data from the first phase three induction study later this year.

We also recently reported topline results from a proof of concept study evaluating our novel TNF started conjugate ADB threethree seven three and already.

In this study our goal is to drive a greater reduction in disease activity beyond the levels that can be achieved with humira or other high efficacy agents such as rent book.

To achieve adequate statistical power, we used preplan historical acumera data in combination with any trial data when comparing a BBB 33732 humira.

The studies to analyses for the primary endpoint, which evaluated improvement from baseline in Das 28 score.

The first analysis used a propensity matching strategy to compare threethree seventhree with historical he married data.

This analysis showed a greater change in Dastwenty eight from baseline to week 12 for 3373 compared to the pre specified humira data.

The second analysis use the basie, an approach to compare threethree seventhree to a combined in trial and historical he married dataset.

And this analysis predicted with a 90% probability that threethree seven three was associated with a greater improvement in Dastwenty eight.

Based on these encouraging results we plan to advance the TNF start conjugate program and already with the phase to be dose ranging study expected to begin in the first half of 2021.

We also plan to begin clinical studies next year and other immune mediated diseases.

Also in the area of immunology, we're making good progress advancing the programs for sky rizzi into disease areas.

We expect to see data from phase three studies in Psoriatic arthritis later, this year and in Crohns disease at the end of this year or early next year with regulatory submissions for both indications expected in 2021.

In oncology.

We continue to advance our Hmong strategy with several important data readouts in studies starts occurring this year.

We've established a leading hmong portfolio with Imbruvica and Venclexta in areas, such as CLL and ammo.

And we will continue to generate data to demonstrate the utility of both drugs across a wide range of patient populations and cancer types.

At the recent E Hot Congress.

Detailed results from the phase three the Aliased study were reported which showed that treatment with a combination of Venclexta plus eight decided team resulted in a 34% reduction in the risk of death compared to a society and plus placebo in AML patients who are eligible for intensive chemotherapy.

The median overall survival for patients in the Venclexta arm was 14.7 months versus 9.6 months into placebo arm.

Patients in the then Clecs arm also showed more than double the rate of composite complete remission compared to those treated with age decitabine alone.

This filing is currently being reviewed by the FDA under the real time Oncology review program and project Orbis.

To date, the email program has focused on venclexta views as up frontline treatment in transplant ineligible patients.

This year, we're expanding the program into other patient segments with the goal of establishing Venclexta as the gold standard across the am outpatient spectrum.

Earlier this year, we initiated two phase three studies evaluating venclexta as a maintenance therapy and I am now.

One trial and fit patients with an now who have received stem cell transplant, but remain at high risk for relapse and a second trial in patients with AML during first remission after receiving conventional induction and consolidation chemotherapy.

In addition building upon the survival advantage observed in the transplant in eligible population, we're planning to initiate a new randomized study later this year testing venclexta in combination with intensive chemotherapy in patients who are eligible for more intensive induction regimens.

Our comprehensive development program will position Venclexta as a foundation for combination therapies in and now across all patient segments.

We also recently announced abroad oncology collaboration with Jen Matt to jointly develop and commercialize three next generation by specific antibody products and establish a discovery collaboration to create additional differentiated antibody based therapeutics for cancer.

The lead asset in this partnership have created a man.

Cdthree by Cdtwenty by specific antibody has demonstrated a strong efficacy profile favorable safety and a more convenient dosing regimen in early phase trials.

We believe that thread and add has the potential to become a best in class therapy across a number of b cell malignancies, including diffuse large b cell lymphoma, and molecular lymphoma, and we are rapidly advancing to phase three trials.

And lastly, a few updates from other areas of our pipeline.

We previously presented positive progression free survival data from two phase three studies for deliberate in frontline ovarian cancer and bracket breast cancer.

Based on developments in the field and additional discussions with the FDA, we will not be submitting regulatory applications without mature overall survival data.

We will continue to follow patients in the ongoing trials as overall survival data mature.

And I care, we recently announced receipt of a complete response letter from the FDA for the a pick apart be ally.

The CRL indicated that the rate of inter ocular inflammation observed in the phase three program resulted in an unfavorable benefit risk profile for ratio.

We are currently reviewing that pick apart program to determine next steps and will provide updates as they become available.

In women's health in the quarter, we received FDA approval of Oregon as the first nonsurgical oral treatment for the management of heavy menstrual bleeding associated with uterine fibroids in pre menopausal women.

This new non surgical treatment represents an important therapeutic option for women suffering from uterine fibroids.

And in neuroscience.

We recently reported topline results from a phase three study evaluating until Japan for the prevention of episodic migraine.

In this study all three doses of intelligent Pat met the primary endpoint evaluating the change from baseline in mean monthly migraine days across the 12 week treatment period.

The two higher doses 30 milligrams and 60 milligrams also met all secondary endpoints, while the 10 milligram dose met for out of sex of the secondaries.

I will again had previously reported positive results from one registration, enabling studies and following the second positive study we plan to submit our regulatory applications in episodic migraine prevention in the first quarter of 2021.

In summary, we've seen tremendous progress across all stages of our pipeline in the first half of the year and we remain on track for further advancements in the remainder of 2020.

With that I'll turn the call over to Rob for additional comments on our second quarter performance and financial outlook, Rob. Thank you Mike.

Starting with second quarter results, we deliver top and bottom line performance ahead of expectations.

Reported adjusted earnings per share of $2 in 34 cents above our guidance midpoint by 21 cents.

This includes 10 cents a stronger performance from legacy Abbvie and 11 cents of accretion from Allergan.

Total net revenues were $10.4 billion, including $2 billion in sales contribution from the Allergan portfolio.

Legacy Abbvie was approximately $300 million ahead of our Standalone sales guidance.

Driven by rent bulk sky Rizzi and Humira.

Cobot related inventory stocking for the first quarter largely reverse as expected.

You are generic sales were approximately $4 billion ahead of expectations due to the lower impact from Cove, It I continuing patient prescriptions.

Wholesaler inventory levels remain below half a month in the quarter.

International Humira sales were $863 million down, 17.4% operationally, reflecting biosimilar competition across Europe, and other international markets and ahead of our expectations.

Got ready global sales were $330 million with continued strong U.S. and play market share.

We also continue to see a robust demand for rent bulk with sales of $149 million in the quarter and a rapid increase in us and play market share.

Hematologic oncology global sales were nearly $1.6 billion up 25.8% on operational basis with continued strong performance of both Imbruvica and Venclexta.

Imbruvica Global net revenues were approximately $1.3 billion up 17.2% driven by continued strong performance in CLL.

Thanks, Alexia revenues were $303 million with strong demand across all approved indications.

Global Maverick sales were $376 million down 51.4% on operational basis as treated patient volumes have declined during the covert pandemic.

Allergy anesthetics contributed sales of $481 million in the quarter Botox cosmetic with sales of $226 million and Juvederm with sales of $113 million are both seeing a faster than expected recovery from the covert pandemic.

Neuroscience Global revenues were $734 million. These results were led by Botox therapeutic railcar and your ralphie with combined sales of more than $500 million.

We also saw a significant contribution from our eye care business, which had global sales of $417 million.

Turning now to the piano profile for the second quarter.

Adjusted gross margin was 82.8% of sales.

Adjusted R&D investment was 12.8% of sales and adjusted selling expense was 22.9% of sales.

The adjusted operating margin ratio was 47% of sales, including a negative impact of 70 basis points due the reversal of kobin related inventory stocking from the first quarter.

Adjusted net interest expense was $484 million and the adjusted tax rate was 11.4%.

Today, we're issuing combined company guidance for the first time.

As Rick previously discussed we're closely monitoring the impact of the covert pandemic and a factor the latest trends into our updated forecast.

We now expect full year adjusted earnings per share between $10.35 and $10.45, including 70 cents of accretion from the Allergan transaction, which represents an annualized contribution of 11%.

Excluded from this guidance is $6.23 of known intangible amortization and specified items.

This guidance now contemplates full year revenue of approximately $45.5 billion.

At current rates, we now expect foreign exchange have a 30 basis point unfavorable impact on full year reported sales growth.

Included in this revenue guidance are the following updated full year assumptions.

We now expect us humira sales growth of approximately 8%.

We now expect international Humira sales of approximately $3.5 billion.

For rent Voake, we now expect global revenues of approximately $600 million.

For a global HCV, we now expect sales of approximately $2.1 billion as treatments remain below pre covered levels.

Statics, we expect global sales of approximately $2.4 billion, including approximately $1 billion from botox cosmetic and approximately $650 million from Juvederm.

For neuroscience, we expect global sales approximately $3.5 billion, including approximately $1.4 billion from botox therapeutic and approximately $950 million from railcar.

For Eyecare, we expect global revenues of approximately $2.1 billion, including approximately $700 million from Restasis, which assumes no generic competition in 2020.

For women's health, we expect global revenues of approximately $700 million.

All other full year product guidance assumptions remain unchanged.

Moving to the piano, we now forecast adjusted gross margin just above 82% of sales adjusted R&D investment to be approximately $5.8 billion adjusted EBTIDA expense to be approximately $9.9 billion and adjusted operating margin of approximately 48% of sales.

This guidance includes approximately $600 million in expense synergies for the partial year in 2020.

We remain on track to deliver a greater than $2 billion and expense synergies by 2022.

We now expect adjusted net interest expense of approximately $2 billion, which includes the cost of financing the Allergan transaction.

We now model and non-GAAP tax rate of just above 11% for the newly combined company.

Finally, we now expect our full year average share count to approach 1.7 billion shares, including the equity issue to finance the Allergan acquisition.

As we look ahead to the third quarter, we anticipate adjusted revenue of approximately $12.8 billion at current rates, we expect foreign exchange had a modest unfavorable impact on reported sales growth.

We are forecasting an adjusted operating margin ratio of just about 48% of sales.

We model a non-GAAP tax rate of 11.6% and we expect the average share count to approach 1.8 billion shares.

We expect adjusted earnings per share between $2.73 and $2.77, excluding approximately $1.59 cents of known intangible amortization and specified items.

Abby remains well positioned to execute on our capital allocation priorities, including rapidly paying down debt supporting a strong and growing dividend and pursuing additional innovative mid to late stage pipeline assets.

We generated $6.9 billion of operating cash flow and the first half of the year and our cash balance at the end of June was $6 billion.

We're on track to pay down 15, $18 billion of combined company debt by the end of 2021 of which nearly $7 billion has already been repaid.

We expect to achieve a net debt to EBITDA ratio of 2.5 times by the end of 2021 with further deleveraging through 2023.

In closing Abbvies performance and financial condition remains strong we're very pleased with the momentum of the business heading into the second half of 2020.

With that I'll turn the call back over to list.

Thanks, Rob we will now open the call for questions. Operator first question. Please.

Thank you and that's a reminder to ask a question. Please press star one.

Next question today is from Randall Stanicky from RBC capital markets.

Great. Thanks, guys I just had two.

One for Rick and one for Rob brick bigger picture question. The huge part of the story Randall Randall sorry to interrupt we can't hear you very well is there anything you can turn up there Mike or pick up.

Great that better.

Okay.

Great Rick I wanted to ask a big part of the Abbvie story is growth on the other side of Humira in 2023, Theres still some trepidation with from investors and getting comfortable with the step down what would you say to those investors.

To get people comfortable that Theres a growth story on the other side of Humira and what do you need to do specifically between now and then strategically to position the business for that.

Okay, rather that you have a second question or is that yeah. The second question I'll ask it upfront for Rob.

You can help us understand the steady state the run rate for R&D. I think you said 5.8 billion for this year that will go higher on an annualized basis, but you're also pulling a billion dollars of R&D synergies out of that as well.

Okay I'll cover your first question on rail or more.

Then Rob can jump and talk to the R&D funding question. The job. So look I think it's a great question. It is one that obviously the vast majority of investors are interested in.

We have described I think to investors the rationale of.

Why we're excited about doing the allograft transaction.

Obviously gives us a tremendous amount ability to be able to manage our way through the loss of exclusivity in the us of Humira and provides us with two more major growth franchises for the company helped drive growth and it allows us to continue to invest aggressively both internal R&D as well.

Well as.

External and so I think it provides a framework to allow us to continue to perform as we have performed over the last number of years I mean, clearly about we certainly have a track record of showing that we can grow this business and we can build on this business.

We've demonstrated that since 2013, when we spotted hawk.

So what makes me excited what makes me comfortable that I could ultimately grow the business food yellow.

I think it starts with what we have six yes, six major growth assets in our business today, if you step back from the let them six medicines tremendous opportunity to be able to grow skier visit when invoke Imbruvica Venclexta Vale are you building a will probably havent Jose.

Well not too distant future, but we'll have a seventh asset all end markets that have a significant opportunity to be able to grow when I look at R&D productivity, both in the indication expansion area.

As well as new at new assets and I'll talk about that here in a second.

I'm very comfortable with are going to be able to continue to drive the pipeline.

When you look at the projections that we made for rent growth and Sky Rizzi as an example, when we made those projections our euro two ago those peak projections for 2025, we base those projections on the fact that those assets had to achieve roughly high single digit markets.

Their positions as we mentioned right now if you look at Sky residents, achieving one place share up 30%.

When growth has really stood up Paul.

Rapidly started to capture the.

It's it's 15% and growing at a very aggressive clip.

We predicted it will quickly become the in play market leader of Bugs humor.

Here and will not too distant future, but there are already significantly above what those estimates were the longer you stay at in place shares that look like that obviously, the greater youre going to exceed that if you get to 20% instead of high single digits. Obviously, the revenue will be approximately two times, what we originally projected so.

That gives me a high level of comfort when I look at Venclexta as an example.

There's still a significant opportunity to grow there if we get an indication expansion, both broadening HML as well as the tier holding 14 on multiple myeloma.

Those are two significant opportunities that will continue to be able to drive growth Imbruvica is still has significant opportunity to be able to drive growth.

Well I look at Vail or as an example, and Thats a very interesting asset as it owns a great profile in that market the drug does.

It's obviously growing significantly growing now at the rate of about 80 or 90% year over year, there's still plenty of room to grow and bipolar and schizophrenia.

And if one of those two phase three studies a plays out effectively.

MDD will be a very large additional indication, which will allow us to be able to drive significant growth. There and then there is the migraine franchise I think migrating something thats under appreciated if you look at the penetration right now of oral agents.

In acute area, it's wrong about 12% to 14%.

Total scripts. So obviously there is a significant opportunity to be able to continue to expand that market.

We think we have the asset to be able to do that.

And obviously, we think we have the promotional.

So I think we have the tools right now to be able to drive significant growth through the yellow.

On the other side of the Ela, we obviously our pipeline will continue to play out with the additional indications you're starting to see assets like or TNF steroids.

Evolve I think the Genmab collaboration is an important collaboration to continue to build out.

Our team can potentially solid tumor platform and so there's a lot of exciting opportunities. So.

No I feel very confident and want to how the business is running now.

Despite all of the disruption associated with Kogut, but if I look at the park that.

Of the business that we control directly I feel very good about how the businesses line and so I believe we will navigate our way through it and I think as we get a little closer.

Investors will will gain an even greater appreciation of that.

Randall This is Rob on your question on R&D. So if you think through the partial year synergy the 600 million about 400 million of that comes from R&D and by 2020 to about 50% of the greater than 2 billion in synergies will come from R&D. So while I expect the expenses to annualize, obviously or the partially or close we'll also see those synergies ramp up so the best way to.

Think about it as a steady state R&D level in the 6 billion range.

Great. Thanks.

Thanks, Randall operator next question please.

Thank you. Our next question is from Maven Jacob from yes.

Hi, Thanks for taking the question just wanted to expand on some of the opportunities that Rick I. Just meant again I mean I can you can you talk speak up a little bit are well, let's see weird and tour on that sure. So is this okay can you hear me. Okay. That's that's better. Thank you, Okay I will yeah.

So.

With regard to here now returned to our end up so okay, all right well.

Well.

All right, Okay fair enough with regard to.

The venclexta opportunity in multiple myeloma Granolas trial wondering if you could give us an update there and.

How large could that potential opportunity be obviously relapse refractory multiple myeloma as it's pretty.

Any competitive so just wondering what sort of how we should be thinking about that where that excitement is coming from and then if you could remind us also about your subcutaneous Ah version pump version of the.

Of Duodopa, that's supposed to read out in the first half of 2021.

How should we be thinking about that opportunity could that be a a blockbuster opportunity.

This is Mike I'll take those with respect to Venclexta, we see a very real potential in the PLM 14, multiple myeloma population.

If we look across our trials early phase trials for then subset analyses of later phase trials for we have data from T. 11, 14, we seem very consistent responses, we see high response rates and we see long progression free survival.

On the T. 11, 14 population and that makes sense because that T. 11, 14 population as a transform solve that has up you sell like phenotype and its bcl two high so it would be expected to be uniquely sensitive to venclexta into bcl two inhibition. So we have the phase three study well underway now it's an event driven trial.

But we would hope to have data.

In the in the near future.

In 21 and.

That's a study.

Is designed to confirm those earlier observations in terms of how large an opportunity that can be a the t. 11, 14 population is about 20% a multiple myeloma multiple myeloma is a big indication so 20% of that there's a lot to now as you mentioned, it's becoming a competitive space, but one of the advantages of having a.

Biomarker driven therapy is that we can identify and physicians can identify in practice what patients are likely to respond to venclexta. So I'll know what are then clecs to patient looks like and we think that will be a real opportunity and a real advantage. So.

Where were very optimistic about that aspect for the program and we think it represents an important additional role for Venclexta with respect to 951.

That is up program, that's designed to deliver to local like efficacy.

Through a subcutaneous insulin pump like device.

And so to do that we had to develop two novel programs. These are an emmys.

That are rapidly converted to the active agents in circulation and they allowed delivery.

I believe it opened carbidopa ultimately through this insulin pump like device that you just can't do.

With apparent compounds because of the physical properties and chemical limitations and local tolerability limitations. So it really does represent a real breakthrough what we know about the efficacy.

Of Duodopa is that it is it is very very strong it really is transformational but it takes a lot to get that efficacy patients have tampa gastric to place and threaded down into the small bow. They have to maintain that so this is a much more patient accessible patient friendly with if you will way to deliver the same sort of efficacy.

And so we think that has the potential to really expand the number of patients who would be willing to consider a therapy.

You know such as such as 951, and it's a big market.

If you look at Delta despite all the limitations, it's doing about half a billion dollars themselves. If you look at deep brain stimulation. There's also considerably used in aggregate this market today.

Is well over a billion dollars, probably a billion and a half dollars.

And not all patients who would qualify by their patient profile are willing to undergo these therapy. So we think that nine fiberlan can be a very real opportunity and can be quite substantial.

Thanks to be operator next question. Please.

Thank you and our next question is from Chris Schott from JP Morgan.

Great. Thanks, so much further questions just two for me. The first can you just elaborate a little bit more about how you're thinking about the size of the opportunity for written voake in a topic Durham now that we have the phase three I guess, just a little bit more just how you see is fitting into the treatment paradigm and then my second question was on the 2020 guidance if I back out the 70 cents.

Allergan accretion it seems like the base Abbvie numbers are unchanged. Despite what looks like very very strong results. The first half of the year serious I missed it a little bit the dynamics that are happening with that kind of underlying abbvie set of assumptions. Thanks. So much.

This is Mike I'll take the first one and then I'll hand, it over to rent for the second with respect to atopic dermatitis. We're very we're very pleased with the results that we demonstrated across the phase three trials they actually exceeded our.

Our expectations based on that phase to be results in those to be results were very strong and had earned us a breakthrough therapy designation and we're pleased not only with the efficacy, but also with the safety profile. We've said for quite some time that that one needs to look at the safety of a drug in the intended population because things like background therapy is risk factors that pocket.

Relation.

And have Oh.

Substantial implants on what that profile looks like not only for the active agent, but but for the comparator for placebo and if you look at the profile in the studies.

It looks very favorable to our eye.

And these were substantial studies and a substantial program overall this wasn't a.

Quick study to get an indication expansion, we ran a phase three program freight topic dermatitis that could stand alone for an additional submission. So we think that very strong data package will be a real advantage from when we bring this indication to market.

If you look at the size of the market overall I think it's been under appreciated for years Thats changing now there are a large number of patients who would be eligible for systemic therapy.

Obviously diplomat is off off to a good started over the past several years in that indication.

But if but if you look at their efficacy only about half of patients achieve.

An adequate response, if you consider that adequate response and easy 75.

And so you know in our study we drove very good numbers, they are higher than that than than that roughly 50%, albeit there through.

Cross trial comparisons. So we think that there is a real opportunity.

Floor.

Hi, efficacy agent in this space and so it really can play on both ends of the spectrum patients who don't achieve.

An adequate response with earlier therapies. This is an obvious choice, but with the efficacy in the safety profile that we've observed we see no reason why it wouldn't be used up front as well and of course will have head to head data.

Tends to below NAV later on this year as we said in her prepared remarks.

Chris This is Rob I'll take your question on the guidance. So if you take that 70 cents of accretion and you back off the midpoint of 10 40. It gives you a standalone of 970.

EPS, which is four cents higher than our previous guidance, it's really driven by the sales changes, though we've made today. So for US Humira, we took that up 1%, which equals about $150 million is we're seeing less impact of kogan on continuing patients.

Oh, you as we've taken up $100 million are seeing less erosion that we initially had planned on renvela thats up $100 million as well really driven by the rapid in place share that we're seeing and that's partially offset by Maverick as we've seen the market really declined during cobot, but net net revenues up about 150 million EPS up four cents versus our previous guidance for Standalone Abbey.

And the only thing I'd add on that is obviously, we will more favorable and base abbvie in one quarter than the fourth.