Q4 2020 Abbvie Inc Earnings Call

Yeah.

Operator: Welcome to the AbbVie 4th Quarter 2020 Earnings Conference Call. All participants will be able to listen only to the question and answer portion of this call. You may ask a question by pressing star 1 on your phone.

Yeah.

Good morning, and thank you for standing by welcome to the Abbvie fourth quarter 2020 earnings Conference call. All participants will be able to listen only until the question and answer portion of this call. You may ask a question by pressing star one on your phone I would now like to introduce MS. Liz Shea Vice President of Investor.

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 Severino, 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 Geoff Stewart, Executive Vice President, Commercial Operations. Before we get started, I remind you that some statements we make today may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act.

Relations.

Good morning, and thanks for joining US also on the call with me today are Rick in 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&A portion of the call is Jeff Stuart Executive Vice President commercial operations before we get.

<unk> I remind you that some statements we make today may be considered forward looking statements for purposes of the private Securities Litigation Reform Act of 1095, Abbvie cautions that these forward looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on abbey's operations and financial results that may cause actual results to differ materially.

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 and finances, that may cause actual results to differ materially from those indicated in the. Additional information about these risks and uncertainties is included in our 2019 annual report on Form 10-K and in our other SEC filings. AbbVie undertakes no obligation to update these forward-looking statements except as required. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand AbbVie's ongoing business. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website.

Those indicated interest.

Statements additional information about these risks and uncertainties is included in our 2019 annual reports on form 10-K and in our other SEC filings Abbvie undertakes no obligation to update these forward looking statements except as required by law on today's conference call as in the past non-GAAP financial measures will be used to help investors understand.

Abbvie is ongoing business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website unless otherwise noted our commentary on sales growth is on a comparable basis, which includes full year full current year and historical results for <unk>.

Liz Shea: Unless otherwise noted, our commentary on sales growth is on a comparable basis, which includes full year, full current year, and historical results for allergies. For this comparison of underlying performance, all historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policy and exclude the divestitures of ZENPAP and Biocorp. References to Operational Growth and Further Exclusion. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to you. Thank you, Liz. Good morning, everyone.

Dan.

So this comparison of underlying performance all historically reported Allergan revenues have been recast to conform to Abbvie is revenue recognition accounting policies and exclude the divestitures of <unk> and <unk> references.

References to operational growth further excludes the impact of exchange.

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 fourth quarter and full year 2020 performance as well as our expectations for 2021. Mike will then provide an update on recent advancements across our pipeline, and Rob will discuss the quarter and our 2021 guidance in more detail. Following our remarks, we'll take your questions. We delivered another strong quarter with adjusted earnings per share of $2.92, exceeding the midpoint of our guidance by $0.08. For the fourth quarter, total net revenues were up nearly 7% on a comparable operational basis.

Thank you Lee good morning, everyone and thank you for joining us today, I will discuss our fourth quarter and full year 2020 performance as well as our expectations from 'twenty to 'twenty one.

Mike will then provide an update on recent advancements across our pipeline and Rob will discuss the quarter, Andrew 'twenty 'twenty, one guidance in more detail.

Following our remarks, we will take your questions.

We delivered another strong quarter with adjusted earnings per share of $2 92.

Exceeding the midpoint of our guidance by <unk> <unk>.

Fourth quarter total net revenues were up nearly 7% on a comparable operational basis. This performance was driven by robust double digit sales growth from our immunology, Fremont and neuroscience franchises as well as 9% comparable operational sales growth of botox cosmetic.

Rick Gonzalez: This performance was driven by robust double-digit sales growth from our Immunology, PMONC, and Neuroscience franchises, as well as 9% comparable operational sales growth of Botox Cosmetic, which is demonstrating a rapid recovery. Our fourth quarter performance tops off another excellent and truly transformational year for AbbVie, which included the successful acquisition and integration of Allergan, creating a stronger and much more diverse AbbVie, with leadership across Significant contributions from our two new best-in-category immunology medicines, Ringo and Sky Rizzi, which combined for more than $2.3 billion in 2020 sales, their first full year on the market.

<unk>, which is demonstrating a rapid recovery.

Our fourth quarter performance topped off another excellent and truly transformational year for Abbvie, which included the successful acquisition and integration of Allergan, creating a stronger and much more diverse abbvie with leadership across numerous attractive high growth markets.

<unk> contributions from our two new best in category Immunology medicines were invoked and Scott reserves, which combined for more than $2 3 billion in 2020 sales their first full year on the market.

Rick Gonzalez: We expect the combined contribution from Winvoke and Skyrizzy to nearly double in 2021 to approximately $4.6 billion, based on their continued strong uptake in RA and psoriasis, as well as Winvoke's anticipated approvals in PSA, ankylosing spondylitis, and atopic dermatitis later this year. We delivered continued robust growth from our leading HEMON portfolio, with Imbruvica We expect our HEMON franchise to grow double digits again in 2021. We have also added two compelling oncology pipeline assets. Epicritamab, a potential best-in-class CD3 by CD20 bispecific antibody in development for B-cell malignancies, and limzoparlamab, an anti-CD47 monoclonal antibody being studied in multiple cancers.

We expect the combined contribution from Wind-broken Sky Ritchie to nearly double in 2021 to approximately $4 6 billion.

Based on their continued strong uptake in <unk> in psoriasis as well as win votes anticipated approvals and PSA ankylosing spondylitis and atopic dermatitis later this year.

We delivered continued robust growth from our leading <unk> portfolio with <unk> contributing more than $6 $6 billion in combined 2020 sales, we expect our <unk> franchise to grow double digits again in 2021.

We also added two compelling oncology pipeline assets Epicritic Mab potential best in class CD three by CD 20 by specific antibody in development for B cell malignancies, and Lemzo parlor, Mab and anti CD 47, monoclonal antibody being studied in multiple cancers.

Rick Gonzalez: These two assets will further support the growth of our HEMON franchise across our long-range plan. The acquisition of Allergan brought us a substantial neuroscience portfolio with compelling therapies for migraine and psychiatric conditions, augmenting our already existing neuroscience franchise. The newly combined neuroscience franchise delivered nearly $4.9 billion in comparable 2020 revenue and is expected to grow double digits in 2021. We also added the leading global aesthetics franchise.

These two assets will further support the growth of our <unk> franchise across our long range plan.

The acquisition of Allergan.

So substantial neuroscience portfolio with compelling therapies for migraine and psychiatric conditions augmenting our already existing neuro franchise.

Newly combined neuroscience franchise delivered nearly $4 9 billion and comparable 2020 revenue.

And is expected to grow double digits in 2021.

We also added the leading global aesthetics franchise are.

Rick Gonzalez: A largely cash-paid portfolio with roughly $3.5 billion in comparable 2020 revenue. As I previously noted, this portfolio has demonstrated a rapid V-shaped recovery, and we view aesthetics as an extremely attractive long-term growth opportunity. And importantly, we've made excellent progress in 2020 with our pipeline. We expect our R&D pipeline advancements to lead to the approval of more than a dozen new products or indications over the next two years, including a total of six additional indications for RINVOC and SCIRISI, which will cover all of Humira's major indications, plus new significant disease areas, including atopic dermatitis, expanded indications for Venquexta and Valar, and several new product approvals, including a ToeJapan for episodic migraine, Noviticlax for myelofibrosis, and ABBV951, a potentially transformative next-generation therapy for advanced Parkinson's.

Largely cash pay portfolio with roughly $3 5 billion and comparable 2020 revenues as I. Previously noted this portfolio has demonstrated a rapid V shape recovery and we view aesthetics is an extremely attractive long term growth opportunity.

And importantly, we've made excellent progress in 2020 with our pipeline.

We expect our R&D pipeline advancements to lead to the approval of more than a dozen new products or indications over the next two years, including a total of six additional indications for <unk>, which will cover all of Humira as major indications plus new significant disease areas.

<unk> atopic dermatitis <unk>.

Expanded indications moving flex and day, Laura and several new product approvals, including a total Japan for episodic migraine and <unk> for myelofibrosis.

<unk> 95, one a potentially transformative next generation therapy for advanced Parkinson's disease.

These new opportunities will collectively add meaningful revenue growth in advance of the U S. Humira LOE.

Yeah.

We've entered 2021.

Strong position, which is reflected in our revenue and earnings per share guidance.

Just on the recent outperformance of our business, we expect full year 2021 comparable operational sales growth of a perhaps approximately nine 4% with total abbvie sales expected to be approximately $1 $7 billion above current consensus and we.

Rick Gonzalez: These new opportunities will collectively add meaningful revenue growth in advance of the U.S. Humira LOE. We've entered 2021 in a strong position, which is reflected in our revenue and earnings per share guidance. Based on the recent outperformance of our business, we expect full-year 2021 comparable operational sales growth of approximately 9.4%. Total AbbVie sales are expected to be approximately $1.7 billion above current consensus. And we anticipate 2021 adjusted earnings per share of $12.32 to $12.52, representing growth of 17.6% at the mid. This level of guidance represents impressive performance with nearly all aspects of our business expected to perform at or above current consensus for 2021. The Allergan integration continues to go very well. Transition has been seamless despite the size of the transaction and the timing of the COVID pandemic.

We anticipate 2021 adjusted earnings per share of $12 32.

The $12 52.

Representing growth of 17, 6% at the midpoint.

This level of guidance represents impressive performance with nearly all aspects of our business expected to perform at or above current consensus for 2021.

The Allergan integration continues to go very well.

The transition has been seamless despite the size of the transaction and the timing of the Covid pandemic.

While we are making excellent progress against our expense synergies, which Rob will cover in more detail here momentarily.

It remains increasingly clear to us that there are significant opportunities for long term revenue contributions across numerous allergan and growth platforms.

As we recently disclosed we believe you will be the first to market and leading oilseeds ERP for acute migraine represents a $1 billion plus peak sales opportunity.

And total Japan.

A potential once daily oral treatment for the prevention of episodic and chronic migraine also represents a $1 billion plus peak sales opportunity.

Rick Gonzalez: Well, we're making excellent progress against our expense synergies, which Rob will cover in more detail here momentarily. It remains increasingly clear to us that there are significant opportunities for long-term revenue contributions across numerous Allergan growth platforms. As we recently disclosed, we believe you will. The first-to-market and leading oil CGRP for acute migraine represents a $1 billion plus peak sales opportunity. I told you, Pat.

We expect <unk> peak sales to approach $4 billion within its currently approved indications of schizophrenia.

Polar one disorder bipolar depression.

With major depressive disorder, or mbd, representing a potentially significant incremental growth opportunity.

And statics, which is poised to regain its growth trajectory. This year is expected to generate high single digit revenue growth over the next decade.

Rick Gonzalez: A potential once-daily oral treatment for the prevention of episodic and chronic migraine also represents a $1 billion plus peak sales opportunity. We expect Baylor's peak sales to approach $4 billion within its currently approved indications of schizophrenia, bipolar 1 disorder, and bipolar depression, with Major Depressive Disorder, or MDD, representing a potentially significant incremental growth opportunity. Anesthetics, which is poised to regain its growth trajectory this year, is expected to generate high single-digit revenue growth over the next decade.

We continue to closely monitor the Covid dynamics, which will have an impact on our business again in 2021 predominantly in the first half of the year, but significantly moderated from the 2020 impact.

And despite.

The recent COVID-19 resurgence within select geographies, we feel the global health care system is much better equipped with COVID-19 treatment protocols and PPE.

<unk> and treat patients throughout the current year.

That said some therapeutic areas continue to be more impacted than others like CLO HCV certain hospital based procedures, among others, which we have contemplated in our 2021 guidance.

Rick Gonzalez: We continue to closely monitor the COVID dynamics, which will have an impact on our business again in 2021, predominantly in the first half of the year, but significantly moderated from the 2020 impact. And despite the recent COVID resurgence within select geographies, we feel the global healthcare system is much better equipped with COVID treatment protocols and PPE to safely see and treat patients throughout the current year. That said, some therapeutic areas continue to be more impacted than others, like CLL, HCV, and certain hospital-based procedures, among others, which we have contemplated in our 2021 guidance. Overall, we've been pleased with the rate of recovery across our business, a testament to our differentiated product profiles and our commercial execution. So, in summary.

Overall, we've been pleased with the rate of recovery across our business, a testament to our differentiated product profiles and our commercial execution.

So in summary.

We've assembled an impressive set of growth assets and the outlook for average business remains strong.

With Greenberg from Sky revenue is expected to contribute more than $15 billion and risk adjusted sales by 20% to 25% and our expectations for continued robust growth across Piedmont.

Science and aesthetics.

We have a high degree of confidence that we will be able to successfully successfully absorb this.

Mirror LOE impact in 2023.

Supported an immediate return to total sales growth in 2024 and produce compelling high single digit compounded annual total sales growth in 2025 through the remainder of the decade with the diversified portfolio and pipeline that we have today.

With that I will turn the call over to Mike for additional comments on our R&D programs like thanks.

Thank you Rick.

We've clearly made significant progress with our pipeline over the past few years, particularly our late stage programs in hematologic oncology with <unk>, and then <unk> and in immunology with Rainbow and Sky Ritchie.

Rick Gonzalez: We've assembled an impressive set of growth assets, and the outlook for AbbVie's business remains strong, with Grinvold and Skye Rizzi expected to contribute more than $15 billion in risk-adjusted sales by 2025 and our expectations for continued robust growth across chemo, neuroscience, and aesthetics. We have a high degree of confidence that we will be able to successfully absorb the chimera LOE impact in 2023, support an immediate return to total sales growth in 2024, and produce compelling, high single-digit compounded annual total sales growth in 2025 through the remainder of the decade. With that, I'll turn the call over to Mike for additional comments on our R&D programs. Thank you, Rick.

Since inception, our R&D organization has delivered an impressive set of new products, which collectively contributed approximately $11 billion in revenue in 2020.

We also continued to see significant evolution of our early and mid stage clinical programs with many assets expected to transition to late stage Registrational studies over the next several years.

We will continue to replenish our late stage pipeline with innovative assets that have the potential to drive additional growth for abbvie in the second half of the decade.

At our recent immunology investor event in December we provided a detailed overview of our immunology programs highlighting the robust data generated to date for <unk> and sky risky across approved and pipeline indications.

Included in this event, we presented positive top line data from two new phase III studies for invoke <unk>.

Results from the first induction study in ulcerative colitis and results from the head to head study versus diplomat and atopic dermatitis.

Michael Severino: We've clearly made significant progress with our pipeline over the past few years, particularly our late-stage programs in hematologic oncology, with Imbruvica and Venclexta, and in immunology, with Rinvoke and Skyrizia. Since inception, our R&D organization has delivered an impressive set of new products, which collectively contributed approximately $11 billion in revenue in 2020. We also continue to see significant evolution of our early and mid-stage clinical programs, with many assets expected to transition to late-stage registrational studies over the next several years. We will continue to replenish our late-stage pipeline with innovative assets that have the potential to drive additional growth for AbbVie in the second half of the decade. At our recent Immunology Investor event in December, we provided a detailed overview of our immunology program. Highlighting the robust data generated to date for RINVOC and SCIRISI across approved and pipeline indications. Additionally, included in this event, we presented positive top-line data from two new phase three studies for RINVOTE. Results from the first induction study in ulcerative colitis and results from the head-to-head study versus dupilumab in atopic dermatitis.

We expect to see results from the second phase III UC induction study later this quarter and from the UC maintenance study in the middle of this year with regulatory submissions anticipated in the second half of 2021.

Our regulatory applications for <unk> in atopic dermatitis are currently under review and we expect an approval decision in the U S. In the second quarter based on priority review.

And in Europe in the second half of the year.

We recently received European Commission approval for invoke in Psoriatic arthritis, and ankylosing spondylitis and expect approval decisions for those indications in the U S. In the first half of this year.

I want to take a moment to address the topic of safety, specifically mace and malignancies. Following the results from Tofacitinib post marketing safety study.

At present, there are no data to suggest the safety outcomes from their study applied to our specific JAK one inhibitor such as Rainbow.

We are not aware of any signal for an elevated risk of mace or malignancies with Rins book are any JAK inhibitor others intelligence.

We conducted a pool database analysis across our clinical trials for DVT Mace and malignancies at the time of <unk> regulatory submission and have updated it periodically including up to the present.

Michael Severino: We expect to see results from the second Phase 3 UC induction study later this quarter and from the UC maintenance study in the middle of this year, with regulatory submissions anticipated in the second half of 2021. Our regulatory applications for RINVOC and atopic dermatitis are currently under review, and we expect an approval decision in the U.S. in the second quarter based on priority review, and in Europe in the second half of the year. We recently received European Commission approval for RINVOC in psoriatic arthritis and ankylosing spondylitis and expect approval decisions for those indications in the U.S. in the first half of this year.

Rates with <unk> have not been elevated relative to competitors or to expected baseline rates and.

Importantly, there has been no increase or a meaningful change in those rates over time.

Additionally, we adjudicate events from Mason, DVT, which is which is considered the highest standard of evidence.

If we look across our long term database in RA a population that is at increased risk for mace events, our rates remained low.

At the approved dosing raw, we have followed more than 3700 treated patients totaling more than 9000 patient years of experience.

Our rate of Mace events is 0.4 per 100 patient years, which compares favorably to the expected rate of 1.0 to one seven events per 100 patient years.

Michael Severino: I want to take a moment to address the topic of safety, specifically Mace and Malignancies, following the results of Topacitnib's post-marketing safety study. At present, there are no data to suggest the safety outcomes from their study apply to a specific JAK1 inhibitor, such as Renvo. We are not aware of any signal for an elevated risk of MACE or malignancies with RINVOC or any JAK inhibitor other than

In addition, there is no evidence of a dose response between the 15 and 30 milligram doses.

Similarly, the rate of malignancy, excluding non melanoma skin cancer with similar follow up is 0.8 events per 100 patient years.

This rate is also consistent with the expected range of rates of <unk> six to <unk> 94 per 100 patient years and again, we see no evidence of a dose response between 15 and 30 milligrams.

Michael Severino: We conducted a pooled database analysis across our clinical trials for DBT, MACE, and malignancies at the time of RINVO's regulatory submission and have updated it periodically, including up to the present. Rates with RINVOKE have not been elevated relative to comparator or to expected baseline. Importantly, there has been no increase or meaningful change in those rates over time. Additionally, we adjudicate events for MACE and DBT, which is considered the highest standard of evidence.

Moving now to <unk>.

We also recently reported topline results from the phase III programs for <unk> in Crohn's disease, and Psoriatic arthritis.

In the two Crohn's induction studies <unk> demonstrated significant improvements in clinical remission, and endoscopic endpoints compared to placebo with symptom improvement seen as early as week four.

Based on the data generated to date, we believe Sky racing has the potential to become an important new treatment option for patients with moderate to severe crohn's disease.

Michael Severino: If we look across our long-term database in RA, a population that is at increased risk for MACE events, our rates remain low. At the approved dose in RA, we have followed more than 3,700 treated patients, totaling more than 9,000 patient years of experience. Our rate of MACE events is 0.4 per 100 patients, which compares favorably to the expected rate of 1.0 to 1.7 events per 100,000. In addition, there is no evidence of a dose response between the 15 and 30 milligram doses.

We expect to see results from the maintenance study in Crohn's disease. Later this year with regulatory submissions anticipated in the second half of 2021.

We're also very pleased with Sky <unk> results in the phase III studies in Psoriatic arthritis, where we saw significant improvements in disease activity across both skin and joint endpoints compared to placebo.

We believe that the activity, we have seen on joint disease and the impressive skin clearance that is a hallmark of the Sky <unk> program make it a compelling offering for patients with mixed joint and skin involvement.

We plan to submit our regulatory applications for <unk> in Psoriatic arthritis in the first half of this year.

Michael Severino: Similarly, the rate of malignancy, excluding non-melanoma skin cancer, with similar follow-up, is 0.8 events per 100 patients. This rate is also consistent with the expected range of rates of 0.86 to 0.94 per 100 patients. And again, we see no evidence of a dose response between. Moving now to Sky Rizzy.

We're making good progress with our early and mid stage immunology programs as well, where we expect several data readouts and phase transitions in 2021.

We expect to begin three new studies for ABV, one five for our TNF steroid conjugate, including a phase <unk> dose ranging study and RA as well as phase II studies in Crohn's disease and Polymyalgia romantic.

Michael Severino: We also recently reported top-line results from the Phase III programs for SCIRIS-E in Crohn's disease and psoriatic arthritis. In the two Crohn's induction studies, Guy Rizzi demonstrated significant improvements in clinical remission and endoscopic endpoints compared to placebo, with symptom improvement seen as early as week four. Based on the data generated today, we believe Sky RISD has the potential to become an important new treatment option for patients with moderate to severe Crohn's disease. We expect to see results from the maintenance study in Crohn's disease later this year, with regulatory submissions anticipated in the second half of 2021. We're also very pleased with Sky Rizzi's results in the phase three studies in psoriatic arthritis, where we saw significant improvements in disease We plan to submit our regulatory applications for Oreskei RISD and psoriatic arthritis in the first half of this year.

And we'll see proof of concept data in the second quarter for Robert Gala Man, our CD 40 antagonist in phase II for ulcerative colitis and for ABB won 57 are oral ror Gamma T inhibitor in phase one for psoriasis.

Both of these programs experienced slight COVID-19 related delays with results now expected for both in the second quarter of this year.

In oncology, we continued to make significant progress advancing our pipeline with numerous data readouts and regulatory milestones last year.

As well as the addition of several new assets brought in through our in licensing efforts, including Genmab CD three by CD 20-F, <unk> and IMAX anti CD 47, Lemzo Parliament.

We showcased new data from several programs at the recent ash meeting.

Where we presented nearly 40 abstracts from a different assets.

Notable presentations included.

Data from the phase II Captivate trial, evaluating <unk> plus <unk> in frontline CLO, which showed patients who achieved undetectable Mardi. Following this combination maintain their deep remission at one year, Marc after stopping therapy.

With a 95% rate of disease free survival.

We also presented new five year data from <unk> Murano trial, demonstrating the benefits of fixed duration, then collects the combinations in helping patients achieve sustained progression free survival.

Michael Severino: We're making good progress with our early and mid-stage immunology programs as well, where we expect several data readouts and phase transitions in 2021. For example, we expect to begin three new studies for ABBV154, our TNF steroid conjugate, including a Phase 2B dose-ranging study in RA, as well as Phase 2 studies in Crohn's disease and polymyalgia rheumatica. And we'll see proof-of-concept data in the second quarter for Ravigalumab, our CD40 antagonist in Phase 2 for ulcerative colitis, and for ABBB157, our oral ROR gamma T inhibitor in Phase 1 for psoriasis. Both of these programs experienced flight COVID-related delays, with results now expected for both in the second quarter of this year.

The latest results from Iran. In the relapsed refractory <unk> setting showed a median progression free survival of 54 months in the net cluster and Rituximab group compared to 17 months in the Bendamustine Rituximab group three or more years after stopping treatment.

Updated dose escalation data from a phase one study evaluating <unk> in B cell malignancies were also presented at ash.

<unk> is a subcutaneously delivered by specific CD three by CD 20 antibody being developed in collaboration with Genmab.

In the phase II study at <unk> Mab demonstrated encouraging single agent antitumor activity in heavily pretreated patients with a consistent and favorable safety profile showing no grade three or higher Crs events as well as limited neurotoxicity.

Michael Severino: In oncology, we continue to make significant progress advancing our pipeline with numerous data readouts and regulatory milestones last year, as well as the addition of several new assets brought in through our in-licensing efforts, including GenMab's CD3xCD20 F-Karitamab and iMab's anti-CD47 Lemzoparlamab. We showcased new data from several programs at the recent ASH, where we presented nearly 40 abstracts from eight different assets. Notable Presentations Included

We believe that Chris <unk> has the potential to become a best in class therapy across a number of these cell malignancies, including diffuse large b cell lymphoma, and Follicular lymphoma.

The phase III trial in relapsed refractory <unk> Bcl recently began and we will provide updates on <unk> as its development program progresses.

Initial results were also presented from a phase one study evaluating <unk> 383 be in relapsed refractory multiple myeloma.

Michael Severino: Data from the Phase II CAPTIVATE trial, evaluating Imbruvica plus Venclexta in frontline CLL, which showed patients who achieved undetectable MRD following this combination maintained their deeper mission at the one-year mark after stopping therapy, with a 95% rate of disease-free survival. We also presented new five-year data from Venclexta's Murano trial demonstrating the benefits of fixed-duration Venclex The latest results from Murano in the relapse-refractory CLL setting showed a median progression-free survival of 54 months in the Venclexta and Rituximab group compared to 17 months in the Bendamustine Rituximab group.

Dnb 38, <unk> is a novel bi specific T cell engaging immunotherapy targeting <unk> and <unk> three being developed in collaboration with <unk> bio.

These phase one results demonstrated that the <unk> CD three by specific provided overall response rates at 80%.

With a large number of patients achieving a very good partial response or better.

<unk>, having received multiple prior lines of therapy.

<unk> hundred 80, <unk> was well tolerated at all doses tested with a few off target toxicities and no grade three or higher Crs observed.

With its safety profile efficacy and the convenience of once every three week dosing. This agent has the potential to become a promising treatment option for myeloma patients.

And our partner I Mab published an abstract with initial results from our phase one study evaluating lemzo Harlem add in AML and Mds.

These results demonstrated encouraging activity and relapsed refractory AML patients.

Michael Severino: Three or more years after stopping treatment. Updated dose escalation data from a Phase I study evaluating F-Karitimab in B-cell malignancies were also presented at AbbVie. Eptaritumab is a subcutaneously delivered bispecific CD3 by CD20 antibody being developed in collaboration with Genmab. In the Phase I study, epiridomab demonstrated encouraging single-agent anti-tumor activity in heavily pretreated patients, with a consistent and favorable safety profile, showing no grade 3 or higher CRS events, as well as limited neurotoxicity. 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. The Phase III trial in relapsed refractory DLDCL recently began, and we will provide updates on EPCRIT-MM as its development program progresses. Initial results were also presented from a Phase I study evaluating TNB383B, a novel bispecific T cell engaging immunotherapy targeting BCMA and CD3 being developed in collaboration with ToneoBio, in relapsed refractory multiple myeloma.

And Lemzo Carlos <unk> was well tolerated with no serious hematological adverse events reported to date.

Based on these promising initial results we plan to begin new studies this year for <unk> in AML Mds and in multiple myeloma.

We also recently saw data from an interim analysis of our phase II study evaluating <unk> in heavily pre treated non squamous non small cell lung cancer patients.

The encouraging results from stage one of this study met the criteria for advancing the program.

With <unk>, demonstrating a 54% objective response rate in patients with wild type Egfr, we have highly expressed <unk>.

In Egfr wild type patients with over expressed <unk>, which includes both high and intermediate expression. The objective response rate was 35%.

Based on these results we believe that there is an important role for <unk> in this target population, which represents roughly 25% of the non squamous non small cell lung cancer population.

We will be opening the second stage of the study and are planning discussions with regulators regarding the potential of this study to support an accelerated filing.

We expect 2021 to be another important year for our oncology pipeline.

With several regulatory submissions as well as data readouts across all stages of development.

Michael Severino: These Phase 1 results demonstrated that BCMA CD3 BISPECIFICS provided overall response rates of 80%, with a large number of patients achieving a very good partial response or better. Despite having received multiple prior lines of therapy. PNB383B was well tolerated at all doses tested. Few off-target toxicities and no grade 3 or higher CRS were observed. With its safety profile, efficacy, and the convenience of once every three weeks dosing, this agent has the potential to become a promising treatment option for myeloma patients, and our partner IMAB published an abstract with initial results from a phase one study evaluating Lemzoparlamab in AML and MDS. These results demonstrated encouraging activity in relapsed refractory AML patients, and Lemzo Parlamab was well tolerated, with no serious hematological adverse events reported to date.

This year, we expect to see day.

Data from <unk> in the phase III Shine study in frontline mcl with regulatory submissions expected in the second half of the year.

Data for <unk> in combination with <unk> in second line or greater Mcl, and frontline CLO with regulatory submission for frontline <unk> expected in the second half of the year.

We also expect to see data from registration, enabling studies for <unk> in high risk Mds and <unk> in relapsed refractory myelofibrosis.

And we expect to see data from numerous programs in our early stage oncology pipeline.

In addition, the programs under collaboration with Calico are also progressing well.

Our partnered effort is comprised of a strong pipeline of novel targets, which includes more than 20 active programs in discovery or preclinical development.

Importantly, we currently have programs, which has advanced into clinical development in two areas immuno oncology and neuro degeneration.

Michael Severino: Based on these promising initial results, we plan to begin new studies this year for limbs of Parlimab in AML, MDS, and in multiple myeloma. We also recently saw data from an interim analysis of a phase 2 study evaluating TELUSO-V in heavily pretreated, non-squamous, non-small cell lung cancer. The encouraging results from Stage 1 of this study met the criteria for advancing the program. With TELUSO-V demonstrating a 54% objective response rate in patients with wild-type EGFR, we have highly expressed CMAP, and EGFR wild-type patients with overexpressed, which includes both high and intermediate expression; the objective response rate was 35%. Based on these results, we believe that there is an important role for TLSO-B in this target population, which represents roughly 25% of the non-squamous, non-small cell lung cancer population.

The lead Calico program in oncology is focused on <unk> inhibitors, which act at multiple steps in the cancer immunity cycle and have potential applicability in a broad variety of tumor types.

The discovery of novel orally bio available <unk> inhibitors represent a significant breakthrough in a target class that has historically been considered undruggable.

We currently have two assets in phase one development ABV, CLS $5 79 and $4 four.

We've seen evidence of immune activation in the clinic with this pathway and we expect to see proof of concept data from this program in 2022.

The lead Calico program in neuroscience is in EIF, <unk> activator, which targets a key regulator of the highly conserved integrated stress response pathway.

Inhibition of this pathway has the potential to prevent pathology and restore function in a number of neuro degenerative diseases, such as ALS and Parkinson's disease as well as in traumatic brain injury.

Michael Severino: We will be opening the second stage of the study and are planning discussions with regulators regarding the potential of this study to support an accelerated filing. We expect 2021 to be another important year for our oncology pipeline, with several regulatory submissions, as well as data readouts across all stages of development. This year, we expect to see... Data for Imbruvica in the Phase III SHINE Study in Frontline MCL, with regulatory submissions expected in the second half of the year. Data for Imbruvica in combination with Venklexta and second line or greater MCL and frontline CLL, with regulatory submissions for frontline CLL expected in the second half of the year. We also expect to see data from registration-enabling studies for Benclexta in high-risk MDS and Nividoclax in relapsed refractory myelofibrosis, and we expect to see data from numerous programs in our early stage oncology pipeline. In addition, programs under collaboration with Calico are also progressing well.

Our Lee the EIF <unk> activator.

<unk> CLS 7262 is currently progressing through phase one and we plan to begin a study later this year in patients with ALS.

And other neuroscience updates last year, we completed our Registrational program for <unk> in episodic migraine prevention, and we recently submitted our regulatory application to the FDA.

We expect an approval decision by the end of the third quarter.

The data generated in our phase III program support a strong benefit risk profile and we believe that <unk> has the potential to offer meaningful benefits to patients is a safe effective oral treatment option for the prevention of episodic migraine.

In 2021, we expect to see data from several late stage neuroscience assets, including results from two phase III studies for <unk> in major depressive disorder and results from the pivotal program for <unk> 95, one in advanced Parkinson's disease with regulatory submissions for 95 one.

As expected in the second half of the year.

We also expect to see proof of concept data for <unk> in a phase II study in multiple sclerosis, and ABV AE 12, our lead anti Tau antibody in a phase II study in Alzheimer's disease.

Michael Severino: Our partnered effort is comprised of a strong pipeline of novel targets, which includes more than 20 active programs in discovery or preclinical development. And, most importantly, we currently have programs that have advanced into clinical development in two areas, immuno-oncology and neurodegeneration. The LEAD-Calico program in oncology is focused on PTPN2 inhibitors.

In addition to 812, we have a number of promising approaches in alzheimers, including our neuro inflammation programs aimed at <unk> II and CD 33 currently in clinical development as well as other Tau approaches in preclinical development.

These include Tau antibodies with different epitope specificity as well as approaches to clear intracellular Tau.

Michael Severino: The discovery of novel, orally bioavailable PTPN2 inhibitors represents a significant breakthrough in a target class that has historically been considered undruggable. We currently have two assets in Phase 1 development, ABBV and CLS579 and 484. We've seen evidence of immune activation in the clinic with this pathway, and we expect to see proof of concept data from this program in 2020. The lead calico program in neuroscience is an EIF-2B activator that targets a key regulator of the highly conserved integrated stress response pathway. Inhibition of this pathway has the potential to prevent pathology and restore function in a number of neurodegenerative diseases, such as ALS and Parkinson's, as well as in traumatic brain injury.

And aesthetics, we continue to make excellent progress with our portfolio of facial toxins and dermal fillers with several regulatory submissions data Readouts and pivotal study starts expected this year.

Our programs include new indications for botox as well as innovative toxins, such as new liquid formulations, and both long and short acting toxins.

We also have programs to develop new indications for the Juvederm collection as well as novel dermal fillers, such as harmonica, which will be entering registration, enabling studies in the U S.

And in Eyecare based.

Based on the positive results from the Phase III studies evaluating our topical eye drop AGN <unk> five eight floor for the treatment of symptoms associated with Presbyopia, we plan to submit our regulatory application later this month.

And expect an approval decision in the fourth quarter of this year.

So in summary, our R&D productivity remained high last year, despite multiple COVID-19 related challenges and we were able to maintain steady continuity and minimize delays.

Michael Severino: Our lead EIF-2B activator, ABBV-CLS-7262, is currently progressing through phase one, and we plan to begin a study later this year in patients with ALS and other neuroscience updates. Last year we completed our registrational program for Itojapan in episodic migraine prevention, and we recently submitted our regulatory application to the FDA. We expect an approval decision by the end of this third. The data generated in our Phase III programs support a strong benefit-risk profile, and we believe that EtojoPan has the potential to offer meaningful benefits. A Safe, Effective Oral Treatment Option for the Prevention of Episodic Migraine.

We're entering 2021, well positioned for continued success and we expect significant program advancement across all stages of our pipeline again this year.

This includes five new asset or a major indication approvals half a dozen regulatory submissions more than 10 pivotal study readouts and more than 15 data readouts from early and mid stage programs.

With that I'll turn the call over to Rob for additional comments on our fourth quarter performance and our 2021 guidance Rob. Thank you, Mike starting with fourth quarter results. We once again delivered strong top and bottom line performance.

Reported adjusted earnings per share up $2 92.

Above our guidance midpoint by <unk> <unk>.

Total net revenues were approximately $13 $9 billion.

Up six 8% on a comparable operational basis and ahead of our expectations.

Immunology global sales were approximately $6 billion.

Michael Severino: In 2021, we expect to see data from several late stage neuroscientists, including results from two phase three studies for Braylor in major depression and results from the pivotal program for ABBV 951 in advanced parking. With regulatory submissions for 9-5-1 expected in the second half, we also expect to see proof-of-concept data for elizanumab in a Phase II study in multiple sclerosis and ABBV8E12, our lead anti-Tau antibody, in a Phase II study in Alzheimer's. In addition to AD-12, we have a number of promising approaches in Alzheimer's, including our neuroinflammation programs aimed at TREM-2 and CD33, currently in clinical development, as well as other TAO approaches in preclinical. These include tau antibodies with different epitope specificity, as well as approaches to clear intracellular tau.

Up 14, 8% on operational basis.

Within immunology Humira sales were approximately $5 2 billion.

Four 4% on operational basis with continued high single digit growth in the U S offset by Biosimilar competition across international markets.

Guy Ritchie sales were $525 million and <unk> sales were $281 million with both products demonstrating strong sequential growth above expectations.

Hematologic oncology delivered another strong quarter with revenue of approximately $1 $8 billion.

Up 15, 5% on operational basis with solid growth from <unk> and <unk>.

Aesthetic sales were more than $1 1 billion.

With botox cosmetic and Juvederm, both experiencing a rapid recovery from the Covid pandemic.

Neuroscience revenues were nearly $1 $4 billion.

Up 14, 9% on a comparable operational basis led by <unk> in our migraine portfolio.

We also saw a significant contribution from eyecare, which had sales of more than $900 million.

Turning now to the P&L profile for the fourth quarter. Adjusted gross margin was 81, 8% of sales adjusted R&D investment was 12, 6% of sales and adjusted SG&A expense was 22, 3% of sales.

Michael Severino: In aesthetics, we continue to make excellent progress with our portfolio of facial toxins and dermal fillers, with several regulatory submissions, data readouts, and pivotal study starts expected this year. Our programs include New Indications for Bowtie, as well as innovative toxins, such as new liquid formulations and both long and short asthma toxins. We also have programs to develop new indications for the Juvederm collection, as well as novel dermal fillers, such as Harmonica, which will be entering registration-enabling studies in the U.S., and InEyeCare. Based on the positive results from the Phase 3 studies evaluating our topical eyedrop, AGN 190584, for the treatment of symptoms associated with presbyopia,

The adjusted operating margin ratio was 46, 9% of sales an improvement of 230 basis points versus the prior year.

Net interest expense was $618 million and the adjusted tax rate was 11, 6%.

Okay.

As we look ahead to 2021, our full year adjusted earnings per share guidance is between $12 32 and.

And $12 52.

<unk> growth of 17, 6% at the midpoint.

Excluded from this guidance is $5 63.

Of known intangible amortization and specified items.

We expect adjusted net revenue of approximately $55 7 billion at current rates, we expect foreign exchange to have a 1% favorable impact on full year comparable sales growth.

This forecast comprehends the following assumptions for our key products and therapeutic areas.

Robert A. Michael: We plan to submit our regulatory application later this year and expect an approval decision in the fourth quarter of this year. So, in summary, our R&D productivity remained high last year despite multiple COVID-related challenges. And we were able to maintain study continuity and minimize delays. We're entering 2021 well positioned for continued success, and we expect significant program advancement across all stages of our pipeline again this year. This includes five new asset or major indication approvals, half a dozen regulatory submissions, more than 10 pivotal study readouts, and more than 15 data readouts from early and mid-stage. With that, I'll turn the call over to Rob for additional comments on our fourth quarter performance and our 2021 guidance. Rob, thank you, Mike. Starting with the fourth quarter results, we once again delivered strong top and bottom line performance. We reported adjusted earnings per share of $2.92, above our guidance midpoint by $0.08.

We expect immunology global sales of approximately $25 billion, including U S humira growth of approximately 8%.

Internationally Humira revenue of approximately $3 billion at current exchange rates.

Global sales of approximately $2 9 billion.

And revoke global sales of approximately $1 7 billion.

We expect hematologic oncology to grow double digits with improving our global revenue of approximately $5 7 billion and then collects the global sales of approximately $1 8 billion.

Prosthetics, we expect global sales of approximately $4 5 billion.

Including approximately $1 $8 billion from Botox, cosmetic and approximately $1 $3 billion from Jupiter.

For neuroscience, we expect global revenue of approximately $5 7 billion, including Botox therapeutic sales of approximately $2 3 billion.

Railcar sales of approximately $1 8 billion.

And your <unk> sales of approximately $400 million.

For eye care, we expect global sales of approximately $2 9 billion.

Including approximately $550 million from Restasis, which assumes no generic competition in the first half of 2021.

For women's health, we expect global revenue of approximately $1 1 billion.

Yes.

For our remaining larger products, we expect global sales of approximately $2 billion from Maverick $1 $2 billion from Creon $1 billion from Linzess $800 million from Synthroid and $750 million from Lupron.

Robert A. Michael: Total net revenues were approximately $13.9 billion, up 6.8% on a comparable operational basis and ahead of our expectations. Immunology Global sales were approximately $6 billion, up 14.8% on an operational basis. Within Immunology, Humira sales were approximately $5.2 billion, up 4.4% on an operational basis, with continued high single-digit growth in the U.S., offset by biosimilar competition across international markets. Guy Rizzi's sales were $525 million, and RIMVOC's sales were $281 million, with both products demonstrating strong sequential growth above expectations. Emetologic Oncology delivered another strong quarter with revenue of approximately $1.8 billion, up 15.5% on an operational basis with solid growth from Imbruvica and VanClexta. Aesthetic sales were more than $1.1 billion, with Botox Cosmetic and Juvederm both experiencing a rapid recovery from the COVID pandemic.

Looking at the P&L for 2021, we are forecasting full year adjusted gross margin of approximately 83% of sales.

Adjusted R&D investment of approximately $6 6 billion and adjusted SG&A expense of approximately $11 8 billion.

This guidance includes approximately $1 $7 billion and expense synergies from the Allergan acquisition.

We are forecasting an adjusted operating margin ratio of approximately 50% of sales, which represents an improvement of roughly 200 basis points versus 2020.

We expect adjusted net interest expense of approximately $2 4 billion, our non-GAAP tax rate to be approximately 12, 5% and our share count to be roughly flat to Q4 2020.

As we look ahead to the first quarter, we anticipate net revenue approaching $12 7 billion at current rates, we expect foreign exchange had a 1% favorable impact on comparable sales growth.

We are forecasting an adjusted operating margin ratio of approximately 50% of sales and we model a non-GAAP tax rate of 12, 3%.

Robert A. Michael: Neuroscience revenues were nearly $1.4 billion, up 14.9% on a comparable operational basis, led by Raylar and our Migraine Portfolio. We also saw a significant contribution from iCare, which had sales of more than $900 million. During the P&L profile for the fourth quarter, adjusted gross margin was 81.8% of sales, adjusted R&D investment was 12.6% of sales, and adjusted SG&A expense was 22.3% of sales. The Adjusted Operating Margin Ratio was 46.9%, an improvement of 230 basis points versus the prior year. Net interest expense was $618 million, and the adjusted tax rate was 11.6%. As we look ahead to 2021, our full-year adjusted earnings per share guidance is between $12.32 and $12.52, reflecting growth of 17.6% at the midpoint. Excluded from this guidance is $5.63 of known intangible amortization and specified items.

We expect adjusted earnings per share between $2 79.

And $2 83.

Excluding approximately $1 32 of.

Of known intangible amortization and specified items.

Finally, abbvie strong business performance and outlook continues to support our capital allocation priorities.

Our cash balance at the end of December was $8 $4 billion, and we expect to generate free cash flow of approximately $21 billion in 2021. This.

This fully supports a strong and growing dividend, which we have more than tripled since inception as well as rapid debt repayment, we expect to pay down $17 billion of combined company debt by the end of 2021, including the $8 $6 billion that was repaid in 2020.

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

We anticipate that our net leverage ratio will be approximately two times by the end of 2022.

Our strong cash flow also allows for continued business development with approximately $2 billion allocated annually to augment our pipeline with the most promising external technologies and innovative mid to late stage assets.

Robert A. Michael: We expect adjusted net revenue of approximately $55.7 billion. At current rates, we expect foreign exchange to have a 1% favorable impact on full-year comparable sales growth. This forecast includes the following assumptions for our key product and therapeutic areas. We expect immunology global sales of approximately $25 billion, including U.S. Humira growth of approximately 8 percent, and international Humira revenue of approximately $3 billion at current exchange rates. Guy Rizzi Global Sales of approximately $2.9 billion, and Rinvoke Global Sales of approximately $1.7 billion. We expect hematologic oncology to grow double digits, with Imbruvica global revenue of approximately $5.7 billion, and Venclex global sales of approximately $1.8 billion. For Aesthetics, we expect global sales of approximately $4.5 billion. Including approximately $1.8 billion from Botox Cosmetic and approximately $1.3 billion from Juvederm. For neuroscience, we expect global revenue of approximately $5.7 billion, including Botox therapeutic sales of approximately $2.3 billion. Raylar Sales of approximately $1.8 billion, and Urbeldi Sales of approximately $400 million.

In closing we are very pleased with Abbvie strong performance in 2020, we've driven top tier growth, while also advancing our strategic priorities and we expect to deliver robust performance in 2021 and over the long term.

With that I'll turn the call back over Liz Thanks, Rob We will now open the call for questions and the interest of hearing from as many analysts as possible over the remainder of the call. We ask that you. Please limit your questions to one or two.

Operator first question please.

And as a reminder, if you would like to ask a question. Please press star one.

And our first question today is from Geoffrey Porges from F VP Leerink.

Thank you very much as usual appreciate Robert detailed from your guidance from congratulations on the result up a quick.

Question on Sky, one on <unk> the first one.

One of your competitors have.

As a result of it.

Post marketing study recently I'm, just wondering if you've had any discussions with regulators about.

Conducting any other studies for RIN broke or updating the label for <unk> as a result of that negative signal and then secondly on Scott.

Our commercial question.

Your current price for 150 milligram dose about $85000 and Youre using forex that does for ulcerative colitis could you just tell us how.

How you can manage that.

Feasible to have.

From a different prices.

The big difference from dosing thanks.

Okay.

Okay. This is Mike.

We will take your second question first and then we can cover the Sky racing question with Richard.

Robert A. Michael: For iCare, we expect global sales of approximately $2.9 billion, including approximately $550 million from Restasis, which assumes no generic competition in the first half of 2021. For Women's Health, we expect global revenue of approximately $1.1 billion. For remaining larger products, we expect global sales of approximately $2 billion from Maverette, $1.2 billion from Creon, $1 billion from Linzess, $800 million from Synthroid, and $750 million from Lupron. Looking at the P&L for 2021, we are forecasting full year adjusted gross margin of approximately 83% of sales, adjusted R&D investment of approximately $6.6 billion, and adjusted SG&A expense of approximately $11.8 billion. This guidance includes approximately $1.7 billion in expense synergies from the Allergan Acquisition. We are forecasting an adjusted operating margin ratio of approximately 50% of sales, which represents an improvement of roughly 200 basis points versus 2020. We expect adjusted net interest expense of approximately $2.4 billion, our non-gap tax rate to be approximately 12.5%, and our share count to be roughly flat to Q4 2020.

Spectra Ringbark I assume youre talking about the Tofacitinib safety study, which topline results fairly recently in the last several days and showed in that program that they were unable to exclude a risk of mace or malignancy based on the criteria that were used to analyze that data sets.

As I said in my prepared remarks, we've kept a very very close eye on our data.

Both at the time of the NDA and.

In an ongoing manner since that time, and we've not seen a signal.

Our rates have not been elevated.

With respect to comparator or baseline rates and the rates overall remained low.

With respect to your specific question about wet weather, we've had discussions with regulators.

<unk> have not asked us to do a long term safety study.

In the way that Pfizer was asked so that has not been discussed with regulators and we have not had any contact with the regulators around labeling updates.

Up to the present time Gregg.

Alright.

And with respect to Sky Ritchie, Yes, hi, it's Jeff It just Stuart on the commercial question, we have anticipated the.

The different markets and how we will approach the pricing now it's important that we're just starting to see the <unk> data. We saw the induction data, we'll see the maintenance data I think it is important that as we look at our strategy that we're honing is for <unk> for Crohn's youre going to have an induction dose which is.

<unk>, which is an IV at a different dose and we know that based on the form and some things we can.

I believe we can price debt to market and also we are coming with a unique approach for the maintenance as well, depending on where that dosing falls out.

Robert A. Michael: As we look ahead to the first quarter, we anticipate net revenue approaching $12.7 billion. At current rates, we expect foreign exchange to have a 1% favorable impact on comparable sales growth. We are forecasting an adjusted operating margin ratio of approximately 50% of sales, and we model a non-gap tax rate of 12.3%. We expect adjusted earnings per share between $2.79 and $2.83, excluding approximately $1.32 of known intangible amortization and specified

And we would be using at that point, which is known as <unk>.

On body injector, so the combination of the forms as well as basically the ways that we will deliver the medication when we get there. We believe that we can we can price effectively to the market and manage it across the indications.

This is Eric because I think the bottom line is we've contemplated that it's a good question Jeff.

But I think we have a strategy that will allow us to deal with that and.

And impact the margin appropriate way.

Thanks, Geoff Operator next question please.

And our next question is from <unk> from Mizuho Securities.

Robert A. Michael: Finally, AbbVie's strong business performance and outlook continue to support our capital allocation priorities. Our cash balance at the end of December was $8.4 billion, and we expect to generate free cash flow of approximately $21 billion in 2021. This fully supports a strong and growing dividend, which we have more than tripled since inception, as well as rapid debt repayment, where we expect to pay down $17 billion of combined company debt by the end of 2021, including the $8.6 billion that was repaid in 2020. We expect to achieve a net debt to EBITDA ratio just below 2.5 times by the end of 2021, with further deleveraging through 2023. We anticipate that our net leverage ratio will be approximately twice that by the end of 2022.

Hi, great. Thanks, so much for taking the questions maybe two if I could so one appreciate the long term guidance you've given recently on the topline I was just wondering.

How we should maybe think about the margin progression as we think about the Humira LOE and.

And a couple of years and then as we saw it could get past that and your sales touch to ramp up again, if you can maybe give us some sense of where you think your margins could sort of come back to and then the other one I have is just on <unk> again I appreciate that.

<unk> you Kevin there didn't one of the big events for you guys. This year will be the phase III data and MDT.

Curious kind of what gives you confidence that maybe you can just talk about whether it's rhonda.

The study design.

Gives you confidence on.

Why should we be confident so going into that data readout. Thanks.

Sure.

Of all of this is Rob I'll take your question on margin progression I think when you consider the greater than 2 billion expense synergies from Allergan by next year and the P&L leverage that will come from the sales growth. We also expect for next year you should expect that our operating margin will continue to expand through 'twenty two upon to answer your U S. Biosimilars in 'twenty, three and given Humira as profitability. It is it is reasonably expect op margin pullback.

Robert A. Michael: Our strong cash flow also allows for continued business development, with approximately $2 billion allocated annually to augment our pipeline with the most promising external technologies and innovative mid- to late-stage assets. In closing, we are very pleased with AbbVie's strong performance in 2020. We've driven top-tier growth while also advancing our strategic priorities, and we expect to deliver robust performance in 2021 and over the long term. With that, I'll turn the call back over to you, Liz.

And we've indicated before.

45% range based on our current <unk> P. I think it'll be a little bit higher than that.

But then when we returned to growth immediately and 24 will return to revenue growth, but very strong revenue growth. Starting in 25, you can expect them RPM margins. Once again expand we've had a long history of expanding operating margin by leveraging the P&L and I would expect that to continue as we start to see very strong revenue growth starting in 'twenty five and beyond.

<unk>.

Obama this is Rick Mike and I'll cover the second question on <unk>.

It is important to recognize that what we've communicated and long term guidance on <unk> based on the three currently approved indication. So it doesn't count on the fact that <unk> would be successful now having said that I think we do have.

Operator: Thanks Rob. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions. Operator, first question please. And as a reminder, if you would like to ask a question, please press star one.

I'd say, we're cautiously optimistic about.

About the.

MDT indication and I'll, let Marc kind of walk through how we look at it what gives us that level of confidence, but in the event, we want to play out that it doesn't impact the guidance that we gave.

So this is Mike I'll pick up from here.

Think that our optimism and I think that's the right way to express it in a disease like MPD, which is a challenging disease to work and is based on a couple of features one is based on the basic pharmacology of <unk>.

Operator: And our first question today is from Jeffrey Porteous from SVB Layering. Thank you very much, and as usual, I appreciate all the detail and the guidance, and congratulations on the results. A quick question on SCIRISI and one on RINVOC.

Which has a unique mix of of <unk> II specificity and other features that lead clinically to what's been described as a brightening effect.

Operator: First, one of your competitors had a negative result in a post-marketing study recently. I'm just wondering if you've had any discussions with regulators about conducting any other studies for RINVOC or updating the label for RINVOC as a result of that negative signal. And then secondly on SCIRISI, a commercial question. Your current price for the 150 milligram dose is about $85,000, and you're using 4X the dose for ulcerative colitis. Could you just tell us how you can manage that?

Which seems to be beneficial in a number of settings.

It's also driven by the results that we have from the <unk> study that is positive.

Debt, we already have in hand, so with one positive study, we would need only one.

At least one or of course, both of the next two studies.

To read out positive either of those outcomes would support a filing we've done a deep dive into the study design and the patient population. We think it is a well designed study.

And we think the patient characteristics.

With respect to.

Baseline factors and other elements are all very appropriate for this sort of study and we can assess that.

Michael Severino: And is it feasible to have sort of different prices despite the big difference in dosage? Okay, this is Mike. I will take your second question first, and then we can cover the Skyrizzy question. With respect to RINVOC, I assume you're talking about the Topacitinib safety study, which presented its top-line results fairly recently, in the last several days, and showed in that program that they were unable to exclude a risk of MACE or malignancy based on the criteria that were used to analyze that data set. As I said in my prepared remarks, we've kept a very, very close eye on our data, both at the time of the NDA and, in an ongoing manner since that time, and we've not seen any signals.

In a blinded aggregate way.

In a way that's completely consistent with the study rules for the conduct of the study and so all of those things.

Make us feel optimistic that it's a molecule with a good chance to work well designed study well conducted study and we look forward to seeing the results.

As I mentioned Mvd's, a challenging area and for that reason.

Didn't build it into our deal model and we Didnt factored into our guidance as Rick said, So we view this as upside.

Thank you and our next question is from Randall <unk> from RBC capital markets.

Great back to Rainbow can atopic derm, how quickly do you guys expect that launch to ramp and maybe just help us with expectations given coinciding JAK competition from arrow.

Timing to payer ramp coverage and then what we sense a lot of pace.

Michael Severino: Our rates have not been elevated with respect to comparator or baseline rates, and the rates overall remain low. With respect to your specific question about whether we've had discussions with regulators, regulators have not asked us to do a long-term safety study in the way that Pfizer was asked, so that has not been discussed with regulators, and we have not had any contact with regulators around labeling and with respect to Sky Rizzy. Yeah, hi, it's Geoff. It's Geoff Stewart.

<unk> warehousing, maybe if you could help quantify your thinking around that opportunity within the $1 7 billion.

Outlook for the year that would be helpful. And then a quick follow up Rick you don't get asked about I care a lot.

$3 billion Global franchise, you have some pipeline behind it it could be a good growth business, but it's declining any appetite to strategically add to that business or repositioned it or should we view it more as a mature cash flow generator.

Geoff Stewart: On the commercial question, you know, we have anticipated the different markets and how we will approach the pricing. Now, it's important that we're just starting to see the Skyrizzy data. We saw the induction data. We'll see the maintenance data. I think it's important that as we look at our strategy that we're honing for Skyrizzy, you're going to have an induction dose, which is an IV at a different dose. And we know that based on the form.

Yeah.

Yes, Hi, it's Jeff Stuart I'll start off with the atopic Derm commercial question.

We're very encouraged with the market that we're about to enter I will give you some context there. So when we look at the population we see that just on the moderate to severe.

Atopic derm patients that the market size of the potential is at least two and probably closer to three times the size of the psoriasis market and so this is.

Very very encouraging in terms of our ability to enter.

It's also significantly Underpenetrated I mean, if you look at the psoriasis market Youre talking about.

Geoff Stewart: I believe we can price that to market. And also, we're coming up with a unique approach for maintenance as well, depending on where that dosing falls out. And we would be using at that point what is known as an on-body injector. So the combination of the forms as well as basically the ways that we will deliver the medication when we get there, we believe that we can price it effectively into the market. So this is Rick.

Far greater than 10, or 12% penetration and in the single digits to low single digits, where we are right now with the one biologic do pillow map. So it's a very very attractive.

The thing that I would say is that we see from them from our go to market approach that we know the HCP is very intimately.

About 85% of the market is driven by the <unk>, we know that <unk> is very well and there's a 90% roughly 90% overlap with the big prescribers of <unk> and drugs like <unk> and our Humira.

Rick Gonzalez: So I think the bottom line is we've contemplated that. It's a good question, Geoff. But I think we have a strategy that will allow us to deal with that and impact the market in an appropriate way. Thanks, Geoff. Operator, next question, please. And our next question is from Vamil Divan from Mizuho Securities. Hi, Gary.

We are very very encouraged at the ability for this segment to rapidly expand despite the fact, there will be multiple new entrants coming in.

To get to your specific question about the access ramp we have a very strong position as you know with <unk> right now and the existing indication of RA, we have greater than 95% commercial access that's the dominant channel for atopic derm and our anticipation is we will have very strong access debt.

We'll build to that level over the course of 'twenty one.

Operator: Thanks so much for taking the questions, maybe two if I could. So one, I appreciate the long-term guidance you've given recently on the top line. I'm just wondering how we should maybe think about the margin progression as we think about the HMARA LOE in a couple of years, and then as we sort of get past that and your sales start to ramp up again, if you can maybe give some sense of where you think your margins could sort of come back to. And then the other one I have is just on Braylor.

Obviously, it's going to take some time once we get the approval to go through the the final approvals on the big commercial plans and so we see it starting off slow, but then building into the middle of the year and certainly getting to a significant level at the end of the year. So the combination of the market.

The asset itself, which looks very very strong as you've seen from the data and the way that we will play in our derm segment as well as the allergy segment gives us a lot of confidence for a strong ramp in 'twenty, one and beyond.

The only thing I would add to Jeff's comments I mean, if you look at Rainbow did $731 million last year.

Operator: Again, appreciate the guidance you've given there. I think one of the big events for you guys this year will be the phase three data in MDD. I'm just curious kind of what gives you confidence, that maybe you can just talk about whether it's from the drug or the study design, sort of what gives you confidence or why should we be confident sort of going into that data readout. Thanks. This is Rob.

Obviously, if you look at the running rate.

The fourth quarter as strong running rate coming out of the fourth quarter, but that's $1 billion worth of growth.

From 'twenty to 'twenty one.

Majority of that growth is going to come from continued.

Performance NRA.

I think where you will see the most significant impact from atopic dermatitis will be as we flow into 'twenty two much like as you saw what happened in the RA market. It takes time for physicians to start day adapted once they do the momentum picks up.

I don't remember the specific number im not sure we gave that guidance anyway.

Robert A. Michael: I'll take your question on margin progression. I think when you consider the greater than $2 billion expense reduction from Allergan by next year and the P&L leverage that will come from the sales growth that we also expect for next year, you should expect that our operating margin will continue to expand through 2022. Upon the entry of U.S. biofilmers in 2023, and given human error's profitability, it is reasonable to expect operating margin to pull back. And as we've indicated before, the 45% range, based on our current LRP, I think it'll be a little bit higher than that. But then when we return to growth immediately in 2024, we'll return to revenue growth, very strong revenue growth starting in 2025. You can expect then, you know, operating margins once again to expand. We've had a long history of expanding operating margin by leveraging the P&L, and I would expect that to continue as we start to see very strong revenue growth starting in 2025 and beyond. Yeah, Vamo, this is Rick.

But I would be thinking about it more that it's continued penetration and growth in our raw that's driving the bulk of that growth Bob anything you want to add.

On your question regarding warehouse patients, who have a very modest amount of warehouse patients assumed in the forecast. So we're not counting the $1 7 billion doesn't really count on that and keep in mind that <unk> was on the product sales lesser impacted by.

By Covid and so there is not really significant warehousing in that forecast.

Randall on your second question I would say, we absolutely agree with your point of view I think I hear is a very attractive market the kinds of markets that I think we look for in the.

The very best debt is where there are specialized physicians, who really drive the use of medications based on the clinical data and being able to re state markets.

Improved standard of care in those markets and certainly I hear I think fits.

Fits that description.

So we would have a strong appetite to look for opportunities and we are looking for opportunities now that we could add to that I care business to be able to drive growth, obviously restasis as.

Rob indicated in his formal remarks, we built in a half a year that's still an unknown of when that product will go generic or it will go generic but I think even aside from that regardless of what happens with restasis longer term. This is an area that we would have interest in if we could find the right kind of assets.

To add to it.

Enthusiastically do that.

Thanks, Richard Thanks, Operator next question please.

And our next question is from Chris Schott from Jpmorgan.

Great. Thanks, so much for the questions.

Elaborate a little bit more on aesthetics and Andrew some of the learnings you've had net franchise since you've acquired it have there been changes in the way you think about approaching the business commercially your levels of investment I'm trying to get my hands around.

Rick Gonzalez: Mike and I will cover the second question on Baylor. It's important to recognize that what we've communicated in long-term guidance on Baylor is based on the three currently approved. It doesn't count on the fact that M.D.D. would be successful. Now, having said that, I think we do have, you know, I'd say we're cautiously optimistic about the M.D.D. indication. And I'll let Mark kind of walk through how we look at it and what gives us that level of confidence. But in the event that it weren't to play out, that wouldn't impact the guidance. So this is Mike.

That high single digit growth over time does seem healthier than the street I'm anticipating I'm trying to get a little bit more color.

What youre seeing in the market that gives you confidence in that.

And then my second question was just on <unk> the growth has slowed here a bit.

Elaborate a bit more and how much of this is there any COVID-19 related dynamics playing out here how much of this is competitive and true sense of just how youre seeing the health of that franchise over time. Thanks, so much okay.

Chris This is Rick so I'll cover the strategy question for you.

Say as we've studied the aesthetics market and had an opportunity to be able to operate the business now for some time.

Michael Severino: I'll pick up from here. I think that our optimism, and I think that's the right way to express it in a disease like MDD, which is a challenge. The work is based on a couple of things. One is based on the basic pharmacology of Crayolar, which has a unique mix of D3, D2 specificity and other features that lead clinically to what's been described as a brightening effect, which seems to be beneficial in a number of settings.

I think we're even more enthusiastic about the long term ability to be able to grow. This this market I would say some of the areas that were a bit of a surprise to us is the responsiveness of this market too.

To patient activation.

And I would say that the strategy that we've put in place is one where we are funding the business on a.

On a very continuous basis at.

Michael Severino: It's also driven by the results that we have from the MDV study that is positive, which we already have in hand. So with one positive study, we would need only one, at least one, or, of course, both of the next two studies, you know, to read out positive results for either of those. We've done a deep dive into the study design and the patient population. A well-designed study, and we think about patient characteristics with respect. Baseline Factors. Other elements are all very appropriate for this sort of study, and we can assess that. Blinded Aggregate Way when it's completely dark.

At a high level to achieve the level of activation that we're looking for and we think that will certainly you can see the response like as an example in botox already we're seeing a very aggressive response.

Being able to grow the market.

You saw that Botox botox cosmetic.

In the fourth quarter, 9% I would expect that we can continue to drive that level of growth.

And.

As part of Lee.

Legacy Allergan and I think it was much more episodic in the way this was funded quarter to quarter, where we basically built a funding plan that will allow them to continue to drive activation over a longer John I'd say, the second thing Thats fits.

Of interest to US is I think this is a market where you can drive significant innovation. If you fund that innovation in a way again on a more continuous basis.

Michael Severino: Consistent with study roles. Reynolds, And so all of those things make us feel optimistic that it's a molecule with a good chance to work. A well-designed study and a well-conducted study. And we look forward to seeing what comes out of it. But, you know, as I mentioned, MDD is a challenging area. And for that reason, we didn't build it into our deal model, and we didn't factor it into our guidance, as Rick said.

And advance those programs more aggressively and have a well thought out strategic roadmap as to where youre trying to drive some of these markets as Mike mentioned in his comments.

<unk> is to basically try to advance the level of performance of the toxin market significantly over time.

And the same with the filler market there are certainly.

Things that we can do to expand the areas that you can use fillers.

Both within the U S and globally and that's a significant opportunity, but long term, we think theres an opportunity to take some of the biologic expertise that we have here at abbvie and create more biologically active still.

Michael Severino: So we view this as follows. Thanks, Vamil. Operator, next question, please. Thank you. And our next question is from Randall Stanicky from RBC Capital Markets. Great.

Fillers that not only do physical filling but also improve collagen elastin and other kinds of characteristics that would improve skin quality and we think that will be if we're successful we think that will be a significant opportunity to drive long term growth and then the last thing I'd say is the geographic footprint that abbvie as we are.

Operator: Back to RINVOKE and Atopic Derm. How quickly do you guys expect that launch to ramp, and maybe just help us with expectations given the coinciding JAK competition from Avro Sitnev, the timing to payer ramp, and the coverage? And then, you know, what we sense is a lot of patient warehousing. Maybe if you could help quantify your thinking around that opportunity within the $1.7 billion outlook for the year, that would be helpful. And then a quick follow-up, Rick, you don't get asked about iCare a lot. It's a $3 billion global franchise. You have some pipeline behind it.

Obviously, you have a very broad geographic footprint and the structure that we've set up is this totally integrated global unit that we're operating the aesthetics business really gives them the freedom to go out and expand.

Or more aggressively fund.

Areas around the globe that they think there is a significant opportunity a good case in point is.

I believe it was in the fourth quarter, we funded a significant expansion in China.

To be able to increase the sales force there to be able to drive it more.

More deeply into <unk>.

Broader set of the cities in China to the next level down.

We're already seeing the benefits of that in China is already back to growing much like it did pre COVID-19. So I think theres a lot of attracting attractive attribute about that.

Geoff Stewart: It could be a good growth business, but it's declining. Any appetite to strategically add to that business or reposition it, or should we view it more as a mature cash flow generator? Thanks. Yeah, hi, it's Jeff Stewart.

On <unk>, maybe Jeff and I will tag team on that one.

We're clearly seeing is the probe it is having an impact on patient starts and CLO, we're not only seeing it and moving up what we're seeing in <unk> as well and then somewhat logical when you think about these oncology practices of trying to reduce density.

Geoff Stewart: I'll start off with the Atopic Durham commercial question. We're very encouraged by the market that we're about to enter, and I'll give you some context there.

And <unk> is a disease, where you can.

Many patients cases, you can delay therapy for some period of time I would say that the vast majority of it.

When we look at when I look at the overall share and the reason why I'm talking about the overall share is being flex. There is now gaining a significant level of momentum in this in this market as well when I look at our overall shares in first line second line or third line.

Geoff Stewart: So when we look at the population, we see that just for the moderate to severe atopic derm patients, the market size or the potential is at least two and probably closer to three times the size of the psoriasis market. So this is very, very encouraging in terms of our ability to end this. It's also significantly underpenetrated. Look at the psoriasis market you're talking about. Far greater than, you know, 10 or 12% penetration and in the single digits, the low single digits, where we are right now with the one biologic dupilumab. So it's very, very attractive.

Continue to have the dominant share positions and assets.

Say, probably partially due to your question if I look Eric <unk>.

I'd say, it's performing at the expectation we have.

The personal lines shares about 12% slightly higher than second line, maybe 14% and I don't recall the third lines very similar debt. So I'd say that's within the range of what we saw with themselves within the range of what we had modeled.

Geoff Stewart: The other thing that I would say is that we see from our go-to-market approach that we know the HCPs very intimately. So about 85% of the market is driven by the DERMs. We know the DERMs very well, and there's a 90%, roughly 90% overlap with the big prescribers of dupilumab and drugs like Skyrizzy and Arxiv. So, we are very, very encouraged at the ability for this segment to rapidly expand. Despite the fact there will be multiple new entrants. To get to your specific question about the access.

So it's not really a competitive issue that we're dealing with it's more a function of getting those patients starts back up from the level. They were before anything you want to add Jeff I think Rick that's that's exactly right. The only thing I would say in terms of our forecast we think that in the first part of the year. The early part of the year, we'll continue to see some.

Suppression in the new patient starts, but as we as we hit the as we hit the second and third quarter, we anticipate that the market will recover.

Thanks, Chris Operator next question please.

And our next question is from Tim Anderson from Wolfe Research.

Geoff Stewart: You know, we have a very strong position, as you know, with Renvoke right now in the existing indication of RA. We have greater than 95 percent. Obviously, it's going to take some time once we get the approval to go through the final approvals on the big commercial plans. And so we see it starting off slow but then building into the middle of the year and certainly getting to a significant level at the end of the year. So the combination of the market and the asset itself, which looks very, very strong, as you've seen from the data, and the way that we will play in our DERM segment, as well as the allergy segment, gives us a lot of confidence for a strong. The only thing I would add to Geoff's comments is, I mean, if you look at Renvogue, it did $731 million last year. Obviously, if you look at the running rate, so, you know, out of the fourth quarter, that's a strong running rate coming out of the fourth quarter. But that's a billion dollars worth of growth from 20 to 21.

Hi.

Can you hear me this is Nick Kumar on for.

Sure Tim Anderson.

What is your long term guidance assume for potential austerity measures in the ex U S countries in 2021 and beyond similar to what we saw in the post 2008 time period, except this time around it would be the follow up from the Covid impact.

Yes, Nicole this is Rick.

I think this is something we've got experience with if you think about.

The economic crisis, we saw a similar kind of uptick in price erosion outside the United States and in particular I'd say in the European.

Union.

We have factored in a reasonable assumption into our into our guidance for 2021, but I feel good about that I think it is reflective of what we what we're likely to see.

So I think we're covered from that perspective, and you want to add Rob that covers it.

Thanks, Nicole Operator next question please.

And our next question is from Steve Scala from Cowen.

Thank you two questions Abbvie delivered one of the first completely clean and compelling quarters in pharma. This cycle and I have to believe has something in reserve upside as the year unfolds I am sure you monitor the competition so beyond the Abbvie management team itself.

Rick Gonzalez: The majority of that growth is going to come from continued performance in RA. I think where you will see the most significant impact from atopic dermatitis will be as we flow into 22, much like what happened in the RA market. It takes time for physicians to start to adapt to it, but once they do, their momentum picks up.

What about your business do you think is allowing you to execute in this way, which you attributed mainly to the products themselves payer strategies geographic mix or is there something else and the second question is the ongoing <unk> phase III trials utilize doses up to three milligrams, while the successful.

Rick Gonzalez: So I don't remember the specific number. I'm not sure we gave them that guidance. But I would be thinking about it more that it's continued penetration and growth in R.A. that's driving the bulk of that growth. Bob, anything you want to add? Yeah, I just, on your question regarding warehouse patients, we have a very modest amount of warehouse patients assumed in the forecast. So we're not counting, the 1.7 billion doesn't really count on that.

Prior trials were up to four five milligrams to why were the doses lowered in the first place and.

What placebo response mitigation methods are included in the ongoing trial. Thank you.

Robert A. Michael: And keep in mind that RenVolk was the product that was less impacted by COVID. And so there's not really any significant warehousing impact. And then, Randall, on your second question, I would say we absolutely agree with your point of view. I think iCare is very attractive.

Okay. Steve This is Eric I'll cover the first one and Mike can cover the second one.

I would say.

First and foremost we are a very disciplined organization and how we approach execution in the marketplace.

Tend to probably even to some extent obsessively plan and go out and try to execute against that plan and I think in times of difficulties that kind of discipline.

Rick Gonzalez: You know, the kinds of markets that I think we look for and that we're the very best at are where there are specialized physicians who really drive the use of medications based on clinical data and are able to restate markets and improve the standard of care in those markets. And certainly, eye care, I think, fits that description. So, we would have a strong appetite to look for opportunities, and we are looking for opportunities that you can add to that eye care business to be able to drive growth. Obviously, we're in stasis as Rob indicated in his formal remarks that we've built in a half a year, but that's still an unknown as to when that product will go generic or if it will go generic. But I think even aside from that, regardless of what happens with the stasis, in the longer term, this is an area that we would have interest in. And if we could find the right kind of assets to add to it, we would be enthusiastic. Thanks, Randall.

<unk> to demonstrate itself.

And Thats when you see when you see the biggest differences so thats not to say other people don't do it like that I am not that familiar with how others operate but.

I know, how we operate and I know, how we contingency plan.

We look at Okay. If that doesn't work what are we going to do and we do that ahead of time if that doesn't work what are we going to do and I think that kind of contingency planning and focus on execution is helpful. I would say the second thing is if I look at our business, we put a strategy in place and I feel very good about how the business is performing overall I mean, I would say the business is firing on all.

Cylinders.

And you can look at our fourth quarter performance.

To your point and I think it demonstrates that and you can look at our guidance and it demonstrates that almost every single product area is performing at or above most of them above where consensus was and that I think is another indicator.

For you.

And we have a much more diverse business now.

Operator: Operator, next question, please. And our next question is from Chris Schott from J.P. Morgan. Great. Thanks so much for the questions. Can you just elaborate a little bit more on aesthetics?

We have four major growth platforms that are helping us drive that level of growth or new products launches are doing extremely well, obviously <unk> Rainbow car, but I'd also say you broadly and Baylor are performing extremely well.

Rick Gonzalez: Maybe just some of the learnings you've had in that franchise since you acquired it. Have there been changes in the way you think about approaching the business commercially or levels of investment? I'm just trying to get my hands around that high single-digit growth over time. It does seem healthier than the street had been anticipating.

And the pipeline I would say one of the things that gives me. The most confidence is when I look at the pipeline behind that it's designed to be able to drive our long term growth because one of the things that we focus on is how we're going to make sure that we continue to drive this business to perform at the level is performing over the long term and so if I look.

I look at the Sky <unk> and wind Vogue.

R&D execution around the follow on indications, it's been nothing less than spectacular both from a timing standpoint, and the kind of data that we have been able to produce when I look at our newmont strategy. We've had a very disciplined strategy there of <unk>.

Rick Gonzalez: I'm just trying to get a little bit more color on what you're seeing in the market that gives you confidence in that. And then my second question was just on Imbruvica. The growth has slowed down here a bit. Can you elaborate a bit more?

Ensuring that we have enough assets to continue to grow what has become a very large franchise for us and our franchisees $6 $6 billion as we said, we're going to grow in double digits.

Rick Gonzalez: Is there any COVID-related dynamics playing out here, how much of this is competitive? And I'm just trying to get a sense of just how you're seeing the health of that. Okay, Chris. This is Rick.

Over the long term, what's going to allow us to do that will obviously improve because it's going to continue to drive share complex. There is going to continue to drive share in CLO, but they can flex the has indication expansions in the area of potential in areas like <unk> and our broader AML population and <unk>.

Rick Gonzalez: So I'll cover the aesthetics question for you. You know, I'd say as we've studied the aesthetics market and had an opportunity to be able to, you know, operate the business now for some time, I think we're, we're even more enthusiastic about the long term ability to be able to grow this, this market, I would say some of the areas that were a bit of a surprise to us is the responsiveness of this market to patient activation, and I would say that the strategy that we've put in place is one where we are funding the business on a very continuous basis at a high level to achieve the level of activation that we're looking for, and we think that will, certainly you can see the response, like as an example in Botox, already we're seeing a very aggressive response.

Several other areas that I look at <unk>.

We should get that products approved and gives us an opportunity in myelofibrosis and then you look at Genmab and you look at.

<unk> <unk> 47, those will all allow us to ensure that we can sustain that growth profile over the long term neuroscience same thing a total.

Japan will allow us to expand into the broader migraine population. So I feel very good about what we've put in place our ability to execute against that.

I think there's not one silver bullet that I can point to I think it's all of those things certainly.

Our ability and market access has helped a lot in the U S.

We're very good at that but you have to have the right kinds of assets in order to execute that.

You have to have assets that are differentiated like sky resilient Rainbow.

It's the combination of all of that gives you. This performance and gives you the long term sustainable ability to deliver that kind of performance that I feel awfully good about where we are.

Rick Gonzalez: I think this is a market where you can drive significant innovation if you fund that innovation in a way, again, on a more continuous basis, and advance those programs more aggressively, and have a well thought out strategic roadmap as to where you're trying to drive some. As Mike mentioned in his comments, our goal is to basically try to improve the level of performance of the toxin market significantly over time, and the same with the filler market. There are certainly things that we can do to expand the areas that we can use fillers, both within the U.S. and globally, and that's a significant opportunity. Long term, we think there is an opportunity to use some of the biologic expertise that we have here at AbbVie. Fillers They not only do physical filling but also improve collagen and elastin.

So this is Mike I'll take the <unk> question I believe you're talking about the ongoing <unk> studies and what I would say there is that the.

Dose selection was based on everything we know about dose response, not only from the prior MDT studies, but across the program and we've done a deep dive into that and we're confident that we're at a dose that ought to have.

Optimal effect in these indications in this indication.

With respect to your question about placebo response rate managing or controlling the placebo response is extremely important in all studies, but particularly in depression studies and other other studies in Ah in psychiatry.

And I would say that there are many different approaches that are taken that are complementary to each other the first and most important is appropriate site selection one has to select sites with an appropriate patient population with experienced investigators.

Rick Gonzalez: Other kinds of characteristics that would improve skin quality, and we think that'll be if we're successful. We think that will be a significant opportunity, Director, AbbVie; that is, the geographic footprint that AbbVie has. We obviously have a very broad geographic footprint, and the structure that we've set up is this totally integrated global unit that we are operating the aesthetics business really gives them the freedom. [inaudible] Unknown Speaker On Imbruvica, maybe Geoff and I will tag team on that one.

Who are also experienced evaluators in a clinical trial setting and that's one of the most important things to getting.

High quality data to determine whether a drug works.

The next element has to do with investigator training investigator manuals protocol design and also with respect to inclusion and exclusion criteria to make sure that you have a patient population that is representative of the population that you would expect to treat flow.

Rick Gonzalez: What we're clearly seeing is that COVID is having an impact on patient starts in CLL. We're not only seeing it in Imbruvica, but we're seeing it. And it's somewhat logical when you think about it, these oncology practices of trying to reduce density. CLL is a disease where you can, in many patients, reduce it, you can delay therapy for some period of time. I would say that's the vast majority of it.

Registration study is successful and we've taken a look at all of these things we've taken a look at the blinded aggregate data and we feel good that the measures that we have in place.

Will effectively control.

The placebo response and give us a quality readout.

Thanks, Steve Operator next question please.

Our next question is from Gary Nachman from BMO capital markets.

Rick Gonzalez: When we look at, when I look at the overall share, and the reason why I'm talking about the overall share is BenClexa is now gaining a significant level of momentum in this market as well. When I look at our overall shares in first line, second line, or third line, we continue to have a dominant share position. And I'd say, probably partially to your question, if I looked at CalQuest, I would say it's performing, you know, at the expectation we have. I think the first line share is about 12%, slightly higher on the second line, maybe 14%, and I don't recall the third line share. So I'd say that's within the range of what we saw with MCL. It's within the range of what we had modeled, so it's not really a competitive issue.

Hi, Good morning could you talk about how much more you're planning on investing behind the neuroscience franchise to accelerate growth there to get into a long term targets you talked about like the $4 billion in <unk>, even with that MVD and how you see the long term potential and botox therapeutic.

And then how are you thinking about the launch for a total Japan later this year and how will you leverage the work that you've done so far with your <unk>.

How do you think that product will take off in the migraine market. Thank you.

Well I'd say on the.

On the neuroscience investment I mean, we obviously have a very broad neuroscience investment I mean, we have a significant investment from an R&D standpoint.

Yeah.

And disease modifying approaches for a number of different neurological diseases that Mike has talked about and mentioned in his comments earlier. So I would say we have a significant R&D investment. We obviously are investing in <unk> to continue to expand.

Rick Gonzalez: It's more a function of getting those patients' starts back up to the level they were before. Anything you want to add, Geoff?

Operator: I think, Rick, that's exactly right. The only thing I would say in terms of our forecast, we think that in the first part of the year, the early part of the year, we'll continue to see some suppression in new patient starts. But as we hit the end of the year, we'll continue to see some suppression in the new patient. Thanks, Chris. Operator, next question, please. And our next question is from Kim Anderson from Wolf Research. Hi, can you hear me?

Net asset.

Again, our goal will be to invest in these areas, where you can get maximum.

Capture market share capture.

I think if you look at <unk> and you look at the projections that we've made over time, if you look at the sequential.

Year over year dollar growth of that business, that's how you get to that number.

And basically we've been able to sustain that we expect to continue to sustain as relatively low market share, but thats not unusual and in this market because theres a lot of generic.

Products that.

Operator: This is Nicole Mahar on behalf of Tim Anderson. What does your long-term guidance assume for potential austerity measures in the ex-US countries in 2021 and beyond similar to what we saw in the post-2008 time period, except this time around, it would be the fallout from the COVID impact? Yeah, Nicole. This is Rick.

Psychiatrists cycle patients through and sometimes in combination with patients. So we're going to invest in the business to be able to drive the maximum level of profitable share as we do in any other segment that we're in.

Same thing on Botox Therapeutics, obviously, we have R&D programs in there to continue.

To expand the opportunities and therapeutics.

Anything you want to add from an investment standpoint, Rob I.

I think if you look at the overall portfolio, we've detailed out what we expect for railcar and that's without the additional indication. We think we can get to approaching $4 billion. When you look at the migraine portfolio peak sales of greater than $1 billion for both the relevant Anatol, Japan. We have 95, one in the pipeline that we think can be a significant contributor obviously botox therapeutic will continue to grow.

Rick Gonzalez: You know, I think this is something we've had experience with, you know, if you think about, you know, the economic crisis, I thought we saw a similar kind of uptick in price erosion outside the United States, and in particular, I'd say in the European Union, we have factored in a reasonable assumption into our into our guidance for 2021. So I feel good about that. I think it is reflective of what we what we're likely to see. So I think we're [inaudible] and Rob. Nicole.

So we feel pretty good about the portfolio, we have and that that double digit growth outlook is supported by a number of very promising assets.

Operator: Operator, next question, please. And our next question is from Steve Scala from Cohen. Thank you. Two questions.

Yes, Hi, it's Jeff I'll take the second question on <unk>.

I think first the asset itself is very very attractive and when you look at the response on the migraine free days at the 10 to 60 milligram, it's really impressive data very impressive data as this very strong oral and so we think that we can come at this in a couple of different ways. Obviously you.

Operator: AbbVie delivered one of the first completely clean and compelling quarters in pharma this cycle, and I have to believe it has something in reserve for Upside as the year unfolds. I'm sure you monitor the competition. So beyond the AbbVie management team itself, what about your business do you think is allowing you to execute in this way? The second question is: the ongoing VRAILR Phase 3 trials utilized doses up to 3 milligrams, while the successful prior trials used up to 4.5 milligrams. So why were the doses lowered in the first place?

You highlighted the leveraging <unk>, we've got debt dedicated sales force that calls on the specialty organization the neuro the neurologists as well as the headache specialists.

Actually carry both <unk> and a total Japan.

And they are in their call plan to really leverage the knowledge of a very established sales force and as well as focused on the big primary care writers that see a lot of the migraine sufferer. So this is this is an important dynamic that will.

Rick Gonzalez: And what placebo response mitigation methods are included in the ongoing trials? Thank you. Okay, Steve. This is Rick.

Operator: I'll cover the first one. Page PAGE of NUMPAGES http://official.verbalink.com Page PAGE of NUMPAGES http://official.verbalink.com Page PAGE of NUMPAGES, You know, I would say. First and foremost, we are a very disciplined organization in how we approach. [inaudible] I know how we make contingency plans, and we look at if that doesn't work, what are we going to do? And we do that ahead of time. If that doesn't work, what are we going to do?

We'll be able to leverage when we get into the market towards the end of the year.

So we're looking at the ability to see how you look on the back end of the of the migraine journey. So patients are on <unk>.

Botox Therapeutics for example, which is very substantial it's the leading in play share for chronic migraine, but many of those patients don't get full efficacy results. So ultimately the combination of botox plus a total Japan as a way to get really migraine freedom in the toughest patients.

Is another area over the long term that we think and can leverage these assets across the board whether it's your <unk> on the front end with acute a total Japan and the middle oral for episodic and chronic or botox on the backend. We think it's a nice portfolio that we can commercially manage overtime to hit our ambitions that Rob described.

Rick Gonzalez: And I think that kind of contingency planning and focus on execution is helpful. I'd say the second thing is that when I look at our business, we have a strategy in place, and I feel very good about how the business is performing overall. I mean, I would say the business is firing also, and you can look at our fourth-quarter performance to your point. And I think it demonstrates that, and you can look at our guidance, and it demonstrates that almost every single product area is performing at or above, most of them above what consensus was. And that, I think, is another indicator for you.

Thanks, Gary Operator next question please.

Thank you and our next question is from Nathan Jacob from UBS.

Hi.

<unk> from UBS, Thanks for taking the question.

So first on the ADC Sarah you see.

For inflammatory conditions, just wanted to get an update there. It's been I believe you said delayed for COVID-19, do you still believe that this approach.

Rick Gonzalez: And we have a much more diverse business now, four major growth platforms that are helping us drive that level of growth. Our new product launches are doing extremely well. Obviously, Skyrizzy and Rainbow Car, but I'd also say Ubrelvi and Bailar are performing, you know, extremely well.

Can lead to success.

For refractory RA or other inflammatory conditions, just wondering about your confidence in this technology understanding it's still early in development.

Rick Gonzalez: And the pipeline, I would say one of the things that gives me the most confidence is when I look at the pipeline behind that that's designed to be able to drive our long-term growth because one of the things that we focus on is how we're going to make sure that we continue to drive this business to perform at the level it's performing over the long term. And so if I look, I see the Skyrizzy and Rainbow R&D execution around the follow-on indications. It's been nothing less than spectacular, both from a timing standpoint.

And then secondly, as it relates to.

Your current.

<unk> could you remind us of what the.

The current in play market share for.

<unk> and <unk>.

Psoriasis. Thank you so much.

Okay. This is Mike I'll take your first question on <unk>.

<unk> $105 for our TNF steroid conjugate has not been delayed because of Covid. There were some delays in other early immunology programs, our CD 40, and our ror Gamma T program experienced modest delays, but $105, where it did not as.

Rick Gonzalez: When I look at our HEMOG strategy, we've had a very disciplined strategy there of ensuring that we have enough assets to continue to grow what has become a very large franchise for us. [inaudible] Watery ML population, several other areas. Then I look at Nebidoclax.

As we said at the time.

Of.

The COVID-19.

Peak over the course of the last summer there were a small number of studies that we delayed initiation and delayed enrollment.

Rick Gonzalez: Unknown Executive, Jeff Bezos, Jeff Bezos, Jeff Bezos, Jeff Bezos, Jeff Bezos, So I feel very good about what we've put in place and our ability to... So I think there's not one silver bullet that I can point to. I think it's all of those things.

Programs that I'm talking about.

TD <unk> and ror Gamma T. We're impacted modestly in that time period or about $1. Four was not so that remains on track.

We remain confident in it.

We have selected <unk> as the agent to go forward remember that we had to $33 700 million in one platform. We selected 154 because of the advantages it had and linker technology.

Rick Gonzalez: Certainly, our ability to gain market access has helped a lot in the U.S. I think we're very good at that. But you have to have the right kinds of assets in order to do that. You have to have assets that are different.

Planning to initiate a large phase II study in the first half of this year and then today. We're now saying that we will also be studying phase II crohn's disease.

Rick Gonzalez: So it's the combination of all of that and the ability to deliver that. I feel awesomely good about this. This is Mike.

Michael Severino: I'll take the BrailleR question. I believe you're talking about the ongoing MDD studies, and what I would say there is that the dose selection was based on everything we know about dose response, not only from the prior MDD studies, but across the program, and we've done a deep dive into that. Optimal Effect

As well as Polymyalgia romantic day.

And so that's an important set of indications that covers a wide range of opportunities.

<unk> in Crohn's disease are areas, where we're very active TMR polymyalgia romantic day is a new area, where theres not a lot of therapeutics unfortunate, it's a well established areas of medicine, but theres very little in terms of treatment for these patients they have considerable pain and suffering from their condition.

Michael Severino: With respect to your question about the placebo response rate, managing or controlling the placebo response rate... M.R. S. C. M. R. M. N. P. M. N. M. N. M. P. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N. M. N And I would say that there are many different approaches that are taken that are complementary to each other. The first and most important is appropriate site selection. One has to select sites with an appropriate patient population and experienced investigators who are also experienced evaluators in a clinical trial setting, and that's one of the most important things to get high-quality data to determine whether a drug works. The next element has to do with investigator training, investigator manuals, protocol design, and also with respect to inclusion and exclusion criteria to make sure that you have a patient population that is representative of the population that you would expect We've taken a look at all of these things, and Associated Press I feel good that the measures that we have will effectively control them. Thank you all for joining us.

And it's particularly steroid responsive so we think it is.

Very attractive target for a steroid ADC approach to one 504 remains on track and we continue to have confidence in it.

Thanks, Mike, It's Jeff I'll take the in play share. So if we look at the psoriasis market in <unk>, we have on our latest data point, 33% of in play share which of course is new patients coming in are newly switch patients.

If you look at the total abbvie share it's approximately 45% so very remarkable when you add humira plus <unk> in the dermatology space. If you look at the raw space.

Our latest data points are between 15 and 16% in terms of in play share for RIN Vulcan.

And Thats basically neck and neck with Humira. So for a total abbvie share of roughly a third of the Ara market.

Because this is where the only thing I'd add on that is when you look at that <unk>, 33% inflationary, it's almost double what the next closest competitor.

Operator: Thank you. Thank you. Thanks, Steve.

It's impressive.

GAAP between Sky Rosy.

Operator: Operator, next question please. Thank you. Our next question is from Gary Nachman from BMO Capital Markets. Hi, good morning.

The number two player in the other day is as these brands get more experience in the market.

We will also start to talk about the total T Rx share and I think Scott reserves at that point now I think its total Trs share now it's 14%.

Michael Severino: Could you talk about how much more you plan on investing in the neuroscience franchise to accelerate growth there to get to the long-term targets you talked about, like the $4 billion in Braylor, even without MDD, and how you see the long-term potential in Botox Therapeutics? And then, how are you thinking about the launch of ToeJapan later this year, and how will you leverage the work that you've done so far with Ubrelvi? How do you think that product will take off in the migraine market? Thank you.

14% something like that that's right.

And that's pretty impressive from this short period of time I think it's close to number two.

In the market.

<unk> sure. So they are both doing well.

Very very well.

Thanks, Praveen operator next question please.

Our next question is from Chris Raymond from Piper Sandler.

Hey, Thanks, Steve just a couple of questions.

First on the relationship with them.

Gary.

We've got a few inbound questions on the treatment of the royalty.

Michael Severino: Well, I'd say on the, uh... Neuroscience investment. I mean, we obviously have a very broad neuroscience investment. I mean, we have a significant investment from an R&D standpoint.

And I know you've answered this question a little bit in the past, but also just noticing the big non cash.

GAAP charge you took this quarter.

If you back out of non-GAAP earnings. So I know you have described accounting for this as a business combination.

Michael Severino: So I'd say we have a significant R&D investment. We obviously are investing in Baylor to continue to expand that asset. Again, our goal will be to invest in these areas where you can get maximum value. Capture, Market Share Capture.

But can you maybe give a little bit more color on the rationale and the accounting behind that noncash charge and then is there also some threshold number or other event, where you'd add this royalty expense back to non-GAAP.

And then on.

Abbvie $9 51.

Michael Severino: I think if you look at Baylor and you look at the projections that we've made over time, if you look at the sequential year over year dollar growth of that business, that's how you get to that number. Basically, we're going to be able to sustain that. We expect to continue to have a relatively low market share, but that's not unusual. And in this market, because there are a lot of generic products that psychiatrists cycle patients through, and sometimes in combination. So we're going to invest in the business to be able to drive the maximum level of profitable share, as we do in any other segment that we're in. Same thing with Botox Therapeutics. Obviously, we have R&D programs in place to continue to expand the opportunities in therapeutics. Anything you want to add from an investment standpoint, Rob?

We picked up.

Decent amount of cash.

Well excitement around this asset in Parkinson's.

I know phase III is expected later this year, but I wonder if you could maybe talk about the launch Youre launch expectations on this and maybe contrast, it to do a doper experience.

Just from our feedback it seems like this could expand the addressable PD population pretty sizeable.

Eric maybe frame how this sort of factors into your long range $10 billion neuroscience guidance. Thanks.

Yeah, Chris Chris.

Chris I'll take your question on contingent consideration. So yes, we did account for this as a business combination so that means each quarter, we do mark to market the fair value of the future milestone royalty payments and you did see us take our fair value write up this quarter based on the higher sales outlook as we communicated during the immunology day event in December and then you see in the guidance we provide today.

Geoff Stewart: I think if you look at the overall portfolio, we've detailed out what we expect for Raylar, and that's without the additional indications we think we can get to approaching $4 billion. When you look at the migraine portfolio, you know, peak sales are greater than a billion for both the Umbrella and ToeJapan. We have 951 in the pipeline that we think can be a significant contributor. Obviously Botox Therapeutics will continue to grow, so we feel pretty good about the portfolio we have and that double-digit growth outlook is supported by a number of very promising, I'll take the second question on a toad.

Obviously the outlook for <unk>.

<unk> continues to increase and so we are recognizing that liability going forward. We also take into consideration gives us a fair value measure what the market is assuming so it's not just our own forecast. What's also our street expectations are and those are also increased as we have seen a very nice ramp are starting to see obviously the confidence from the street, increasing that translate into a higher outlook for sky.

Richard which then translates into higher future potential royalties one of the reasons I wanted to stress also on the free cash flow in my remarks today is because there is some confusion over that.

Geoff Stewart: I think first, the asset itself is very, very attractive. And when you look at the response on the migraine-free days at the 10 to the 60 milligrams, it's really impressive data, very impressive data as this very strong oral. And so we think that we can come at this in a couple of different ways. Obviously, you highlighted the leverage of Ubrelvi. You know, we've got a dedicated sales force that calls on the specialty organization, the neurologist, as well as the headache specialist. They'll actually carry both Ubrelvi and ToeJapan.

So how we account for it but it's important to keep in mind that when I talk about free cash flow of $21 billion. This year that accounts for the royalty payments to be II and so you can look at a few different ways. You can look at it from a if you can track the connect consideration accretion that we're recording in the liability on the balance sheet as an indicator of the future outlook.

But also as we monitor our cash flow pretty carefully.

What does that contribute to overall cash flow. So we would not be going back and we've made a determination as a business combination. We don't we should not anticipate that we would reverse that but we'll provide obviously more clarity on what those royalties look like going forward given the size of the assets.

Geoff Stewart: [inaudible] So this is an important dynamic that we will be able to leverage when we get into the market. Also, you know, we're looking at the ability to see how you look on the back end of the migraine journey. So patients are on... Botox Therapeutics. Very substantial.

I would also say in that time period, when we did.

It was an absolute requirement on the account right.

It wasn't like it was a judgment call or something we desire to do the accounting said it had to be accounted for in that fashion. It's since been changed going forward, but the window at which we that occurred that was.

The required accounting treatment, so our number two Jeff and I'll cover number two.

Net of a high level look and then Jeff maybe can give more specificity around it if you look at <unk>.

Geoff Stewart: It's the leading in-place share for chronic, but many of those patients don't get full efficacy results. So ultimately, the combination of Botox plus a toe, [inaudible] http://www.youtube.com.uk, Thanks, Gary.

I mean this is this is a.

Therapy that has absolutely phenomenal efficacy and you can see these patients.

You cannot move.

Move really in.

You turn on the pump and you start giving them.

The drug.

And within a very short period of time, they regain their motion the challenges is a very difficult.

Operator: Operator, next question, please. Thank you. And our next question is from Navin Jacob from UBS. Hi Naveen from EBS.

Treatment too.

<unk> for the patient to basically deal with and the caregiver to deal with on a long term sustainable basis, you have to do surgery and Sterne Agee tube you have to maintain that G to open.

Operator: Thanks for taking the question. So first on the ADC, thera-ADC for inflammatory conditions, just wanted to get an update there. It's been, I believe you said, delayed for COVID-19.

So that does somewhat limit the population that is able to use it and so we view this as a way to significantly expand the market.

Michael Severino: Do you still believe that this approach can lead to success in pro-refractory RA or other inflammatory conditions? I was just wondering about your confidence in this technology, understanding it's still early in development. And then secondly, as it relates to your current state of affairs with RINVOC and SCIRIZE, could you remind us of what the current in-play market share for RINVOC is in RA and SCIRIZE in psoriasis? Thank you so much. This is Mike.

Jeff obviously far more familiar with it so I'll, let him give you a little more specific but thats. The general concept I think this could be a significant.

Wanted to be a significant treatment for these patients who need it.

This kind of therapy and two I think we could expand the market from the significantly yes, I think just to add on that Rick hits, we hear the same thing from our Kols, they're very very encouraged with the perspective, you look at Dewalt there do adult.

About a half a billion dollar product with a really difficult challenge on Onboarding for these patients right you have to do the JPEG surgery, you have challenges with the size of the pump Nonetheless.

Michael Severino: I'll take your first question. ABBV 154, our TNF steric conjugate, has not been delayed. There were some delays in other early immunology programs, our CD40 and our ROR gamma T. As we said, at the time of the COVID-19 pandemic, Of course, last summer, there were a small number of studies that we delayed initiation and delayed enrollment. The programs that I'm talking about, CD40 and ROR gamma-T were impacted modestly in that time period, but 154 was not. So that remains on track. We remain confident. We have selected 154 as the agent to go forward.

Nonetheless, it is so remarkable that we do get that levels of sales. So if I give you some perspective on the market. If you look at the advance Parkinson disease market, 90% of it is really old generic <unk>, where the patients just have to take more and more all medications before they can have any any relief and then there's <unk>.

Phil in Big trouble, so only a minority of about 10% ever get to let's say more advanced device aided therapy, which is duo bar do dopa and deep brain stimulation. So as we study the market we agree that as we look at the ability to sort of move from a more convenient way a simple wafer and <unk>.

Prologis too to get a more advanced therapy without doing a procedure, whether its brain surgery or the or the GI surgery. We think we can start to move upstream into that 90% of the really non workable oral.

Michael Severino: Remember that we had two, 3373 and 154, and we selected 154 because to Initiate a Large Phase 2B Study in the First Half of This Year, and then today. We're now saying that we will also be studying phase two Crohn's disease as well as polymyalgia. So that's an important set of indications. It covers a wide range of opportunities. R.A. and Crohn's disease

Segment. So we are encouraged at the at the recent feedback from our Kols and our study sites and are anticipating and planning for our launch in the coming years.

Thanks, Chris Operator next question please.

And our next question is from Gregg Gilbert from <unk>.

Yes, Hi, I was curious if youre botox cosmetic guidance from the U S assumes.

<unk> is on the market are off the market this year and then longer term.

Michael Severino: PMR, Polymyalgia Rheumatica, is a new area where there's not a lot of therapeutics. Unfortunately, it's a well-established area in medicine, but there's very little in terms of treatment for these conditions. Unknown Executive, Mohit Bansal, Carson Wong, Perry Siatis, Marcella Pinella, AbbVie, A very attractive target for a steroid ADC. The 154 remains on track, and we continue. Thanks, Mike. It's Jeff.

Curious about botox cosmetic versus therapeutic many years ago Allergan started to explore the idea of separating the two from a reimbursement and pricing standpoint, I believe it involve litigation with the government at one point, but.

I don't know if thats still ongoing or if youre still thinking through that possibility.

It has implications longer term about keeping those assets together, possibly spinning aesthetic some day if conditions warrant. Thank you.

Yes, so I don't know that were going to specifically comment on what we've assumed as it relates to.

Sure.

So I just don't think it's probably appropriate first of all it's not that large of a product to begin with so it wouldn't have a material impact.

Geoff Stewart: I'll take the in-place share. So if we look at the psoriasis market and Skyrizzy, we have, at our latest data point, 33% of in-place share, which is, of course, new patients coming in or newly switched. If you look at the total AbbVie share, it's approximately 45%, so it's very remarkable when you add Humira plus Skyrizzy in the dermatolog If you look at the RA space, our latest data points are between 15 and 16% in terms of in-place share for RINVOC and RA, and that's basically neck and neck with Humira, so for a total AbbVie share of roughly a third of the RA market. This is Rick. The only thing I'd add on that is, when you look at Skyrizzy's 33% in-play share, it's almost double what the next closest competitor is. It's impressive the gap between Sky Roosevelt and Trump. Number Two Player.

On Botox cosmetics.

I'd say on the.

<unk>.

On the <unk>.

The second question I will.

I'll tell you emphatically, we have no interest in spinning off.

<unk> business.

We have a program in place where we manage the.

The differences between them.

The reimbursement associated with Botox therapeutics.

Cash paid portion of the cosmetics business has been in place for quite some time, we're quite comfortable that we can manage that quite effectively.

It's an important thing that you can track carefully, but we have a good system in place to be able to do that.

But we have no interest in.

Great.

These steady business or any aspects of it.

Thanks, Gregg operator next question please.

Our next question is from Geoff Meacham from Bank of America.

Hey, guys, it's Aspen on for Jeff. Thanks, So much for the questions. A couple quick ones. So within the context of the Xeljanz data.

Do you guys have an early view from from our field as to whether docs are differentiating <unk> and Scott started unlocking jokes and safety profiles and then quickly on the mid to early stage pipeline is obviously a lot going on in your Haemonchus space.

Rick Gonzalez: And the other thing is, you know, as these brands get more experience in the market, we'll also start to talk about the total TRX share. And I think Sky Rises is at that point now. I think its total TRX share now is 14%, 3%, and that's pretty impressive for this short period of time. I think it's close to number two in the market. So they're both doing, you know, very, very well. Thanks, Naveen.

But just kind of want to get a sense of how strategically important some more newer disruptive technologies are to abbvie such as.

Cell or gene therapy. Thanks.

Yes, I'll take the the early view from the field I think it's important at least we've heard from our team that some of this data is not really new.

It was.

Available in the interim analysis that debt.

It helped lead to the label that we have and so really the early reports from our from our field, particularly from the Kols and the big prescribers is a little bit of a shoulder shrug like not that.

Geoff Stewart: Operator, next question, please. And our next question is from Chris Raymond on Piper Sandler. Hey, thanks. Yeah, just a couple questions.

Operator: First, on the relationship with BI and Scarizi, we got a few inbound questions on the treatment of the royalty. And I know you've answered this question a little bit in the past, but also, I just noticed the big non-cash gap charge you took this quarter. You back out of non-gap earnings. So I know you have described accounting for this as a business combination. But can you maybe give a little bit more color on the rationale and the accounting behind that? And the non-cash charge?

Not that new news I would say from the standpoint of of of the comparison between RIN Vulcan Zelle, James I mean, the if you look at the penetration of the JAK class really across the world and particularly in the U S. There has been a significant lift that we just talked about with that in place share and so really what we're what we're hearing from the.

The field and from the prescribers are they view <unk> as a differentiated asset in terms of the overall risk benefit and Thats why that share is moving so quickly and so that's really what we what we hear in the early days from our from our teams that are connected to those big Rheumatologists.

Operator: And then, on AbbVie 951, we picked up a decent amount of KOL excitement around this asset in Parkinson's. I know phase three is expected later this year, but I wonder if you could maybe talk about the launch, you know, your launch expectations for this and maybe contrast them to the Doodopa experience? Just from our feedback, it seems like this could expand the addressable PD population pretty sizably. And, I don't know, Rick, maybe frame how this sort of factor into your long-range $10 billion neuroscience guidance. Chris, I'll take your question on contingent consideration.

So this is Michael I'll take the question on the Haemonchus portfolio mid stage and newer technologies, but I would say is there is a lot going on in our <unk> portfolio, obviously with our late stage molecules in the mid stage I think you'll see a focus on T cell redirection, which is of course, a newer technology and I think a very.

<unk> attractive approach.

To harness the immune system to control these cancers and you see good progress with.

With our CD serve ICD, <unk> and RBC M. A T cell redirecting therapies and so that is clearly an area of focus for us now.

We will continue to be in the future.

With respect to two gene therapy gene therapy is not a single thing that can be used in different ways gene replacement is not an area that we've been focused on.

Gene delivery is an enabling technology for other therapeutic approaches like cell based therapies and we have early programs in cell based therapies in <unk> and in other areas solid tumor oncology.

Robert A. Michael: So yes, we did account for this as a business combination. That means, you know, each quarter we mark to market the fair value of the future milestone royalty payments. And you should see us take a fair value right up this quarter based on the higher sales outlook as we communicated during the Immunology Day event in December and then you see in the guidance we provide today. Obviously, the outlook for Sky Risen continues to increase, and so we're recognizing that liability going forward. We also take into consideration, because it's a fair value measure, what the market is assuming.

And potentially other areas in the future and so that's something that we are keeping a close eye on and making sure that we have access to the enabling technologies, we need to prosecute those targets I think that for those sorts of approaches we're probably one generation away from things that are broadly applicable, but we are exploring possibilities that we think.

Robert A. Michael: So it's not just our own forecast, but it's also what street expectations are, and those have also increased as we've seen a very nice ramp. We're starting to see obviously increased confidence on the street, and that's translated into a higher outlook for Sky Risen, which then translates into higher future potential royalties. One of the reasons, you know, I wanted to stress free cash flow in my remarks today is because there is some confusion over, you know, that's how we account for it, but it's important to keep in mind that when I talk about free cash flow of $21 billion this year, that accounts for the royalty payments of 2BI. And so you can look at it a few different ways.

Ken can fulfill that next generation need.

So we are keeping up.

Our broad INR essentially therapeutically agnostic, what I mean by that is we look for the best tool to do the job. We don't find the tool and then figure out how to use it and so in each of these cases, we're going after strong biology whats going after things that we think will raise the bar on the standard of care and I think a number of the newer technologies that I mentioned fit that bill.

Thanks, Aspen operator, we have time for one final question.

Thank you. Our final question today is from Luisa Hector from Van Berg.

Hello, Thank you for taking my question.

Thank you for the guidance from the cost lines and I just wanted given that we have Gary.

This may have to consider with Covid and then the alagoas inclusion in the synergy.

Robert A. Michael: You can look at it from a number of different angles. I'd also say in that time period when we did B.I., it was an absolute requirement of the accountant for it to be, it wasn't like it was a judgment call or something we desired to do; the accountant said it had to be accounted for in that form, that's that. It's been changed going forward, but the window at which that occurred was the Unknown Speaker.

Could you comment on the implied cost ratio for 2021.

<unk> represents.

The combined entity.

And is there anything else, we should be thinking about todays call from the lines as we look out to 'twenty two.

We are it related savings.

Maybe sticking a ones that may.

And could you tell us the level of synergies.

Already in 2020, thank you.

Hi, Louis So this is Rob so I think now that we have first full year with combined company and Youre looking at these profiles I think you can assume they're indicative of in the range of what you would expect going forward and so.

Geoff Stewart: So on number two, Geoff and I will cover number two; I'll give you sort of a high-level look, and then Geoff, maybe. You know, if you look at doodopa, I mean, this is a therapy that has absolutely phenomenal results for people who cannot move really. You turn on the pump and you start giving them the drug, and you know within a very short period of time, they regained The challenge is that it is a very difficult treatment. [inaudible] And so we view this as a way to significantly expand the market. Jeff's obviously far more familiar with it, so I'll let him give you a little more. This is the general concept. I think this could be a significant treatment for these patients who need this kind of therapy, and two, I think it could expand the market.

This is probably a cleaner guide and say when you have a partial year like we had in 2020.

Relates to the synergies we achieved in 2020, we choose about $600 million of synergies about 400 million that was in R&D and 200 million SG&A and you see we've now increased that to $1 7 billion in 2021 with about roughly half of that coming from R&D about in the 40% range as SG&A and about 10% coming from cost of goods.

Thanks, Louisa and that concludes today's conference call, if you'd like to listen to a replay of the call. Please visit our website at investors that Abbvie dot com. Thanks again for joining us.

Geoff Stewart: Yeah, I think just to add to that, Rick, we hear the same thing from our KOLs. They're very, very encouraged. And, you know, from the perspective of Duopa or Duodopa, you know, about a half a billion dollar product with a really difficult challenge onboarding for these patients, right? You have to do the JPEG surgery, you have challenges with the size of the pump.

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

Geoff Stewart: Nonetheless, it's so remarkable that we do get that level of sale. So if I give you some perspective on the market, if you look at the advanced Parkinson's disease market, 90% of it is really old generic orals where the patients just have to take more and more oral medication before they can have any relief. And then they're still in big trouble.

Geoff Stewart: So only a minority, about 10%, ever get to, let's say, more advanced device-aided therapy, like Duopa and Deep Brain Stimulation. We think we can start to move upstream into that 90% of the really non-workable oral segment. So we are encouraged at the recent feedback from our KOLs and our study sites, participating and planning for our launch. Thanks, Chris.

Operator: Operator, next question, please. And our next question is from Greg Gilbert from Truist. Yes, I was curious if your Botox cosmetic guidance for the U.S. assumes that Juvo is on the market or off the market this year. And then, longer term, I'm curious about Botox cosmetic versus therapeutic. Many years ago, Allergan started to explore the idea of separating the two from a reimbursement and pricing standpoint. I believe it involved litigation with the government at one point, but I don't know if that's still ongoing or if you're still thinking through that possibility since it has implications longer term about keeping those assets together or possibly spinning out aesthetics someday if conditions warrant.

Operator: Thank you. Yeah, so I don't know that we're going to specifically comment on what we've assumed doesn't relate. First of all, it's not that large of a project.

Rick Gonzalez: I'd say on the, On your second question, I will tell you emphatically, we have no interest in spinning off the aesthetic business. You know, we have a program in place where we manage the differences between the Reimbursement Associated with Botox Therapeutics and the Cash Paid Portion of the Cosmetic Business Experience. We've been doing this for quite some time. We're quite comfortable with it.

Rick Gonzalez: We can manage it quite effectively. It's an important thing. Thanks, Greg. Operator, next question, please. Our next question is from Geoff Meacham from Bank of America. Hey guys, it's Aspen on for Geoff. Thanks so much for the questions. A couple quick ones.

Operator: So, in the context of the ZelleGEMS data, Do you guys have an early view from the field as to whether doctors are differentiating RIMBOK and GLGAN safety profiles? And then quickly on the mid to early stage pipeline, there's obviously a lot going on in your HEMONC space, but just kind of want to get a sense of how strategically important some newer disruptive technologies are to AbbVie, such as cell or gene therapy. Yeah, I'll take the early view from the field.

Operator: I think it's important, at least we've heard from our team that some of this data is not really new. It was, you know, available in the interim analysis that helped led to the label that we have. And so really, the early reports from our field, particularly from the KOLs and the big prescribers, are a little bit of a shoulder shrug, like not that, not that new news. I would say from the standpoint of, [inaudible],,,,,,,, So this is Mike.

Michael Severino: I'll take the question on the HEMONC portfolio mid-stage in newer technologies. What I would say is there is a lot going on. See a focus.

Michael Severino: Tell me to wrap up, of course, a newer technology and I think a very attractive approach to harness the immune system to control Progress. Cd3 by Cd20, NRBCMA, T-cell redirecting therapies, and so that is clearly an area of focus for us now. With respect to gene therapy, gene therapy is not a single thing; gene replacement is not an area that we've been focused on. Gene delivery is an enabling technology for other therapeutics, Cell-Based Therapies, and we have early programs in cell-based therapies.

Michael Severino: Solares, Solid Tumor Oncology. And so that's something that we are keeping a close eye on and making sure that we have access to. I think that for those sorts of approaches, we're probably one generation away from things that are broadly applicable, but we are exploring. And so, we are keeping a broad eye and are essentially therapeutically agnostic. What I mean by that is we look for the best tool to do the job. If we don't find a tool, we figure out how to use it.

Michael Severino: And so in each of these cases, we're going after strong biology, we're going after things that we think will raise the bar, and a number of the newer technologies that I mentioned. Thanks, Aspen. Operator, we have time for one final question. Thank you. Our final question today is from Luisa Hector from Berenberg. Hello, thank you for taking my question. And thank you for the guidance on the cost lines. And I just wondered, given that we have various layers to consider with COVID and then the Allagan inclusion and vicinity.

[music].

Robert A. Michael: Could you comment on the implied cost ratios for 2021 and how representative these are of the combined entity? And is there anything else we should be thinking about for those cost lines as we look out to 22? COVID-related savings may be sticky, maybe ones that may reverse. And could you tell us the level of synergies that you achieved already in 2020? Thank you.

Robert A. Michael: So I think now that we have, you know, our first full year with the combined company, and you're looking at these profiles, I think you could assume they're indicative of, you know, in the range of what you'd expect going forward. And so, you know, that that is probably a cleaner guide than say, when you have a partial year like we do. As it relates to the synergies we achieved in 2020, we achieved about 600 million synergies, about 400 million of that was in R&D, and 200 million in SG&A. And you see we've now increased that to 1.7 billion in 2021, with about roughly half of that coming from R& Thanks, Luisa, and that concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors.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 fourth quarter 2020 earnings conference call. All participants will be able to listen only to the question and answer portion of this call. You may ask a question by pressing star one on your phone.

Operator: I would now like to introduce Miss 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 Severino, 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 Geoff Stewart, Executive Vice President, Commercial Operations. Before we get started, I remind you that some statements we make today may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act.

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 and finances that may cause actual results to differ materially from those indicated in the. Additional information about these risks and uncertainties is included in our 2019 annual report on Form 10-K and in our other SEC files. AbbVie undertakes no obligation to update these forward-looking statements, except as required. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand AbbVie's ongoing business. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website.

Rick Gonzalez: Unless otherwise noted, our commentary on sales growth is on a comparable basis, which includes full year, full current year, and historical results for allergies. For this comparison of underlying performance, all historically reported Allergan revenues have been recast to conform to AbbVie's revenue recognition accounting policy and exclude the divestitures of ZENPAP and Biobank. References to operational growth further exclude. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to you. Thank you, Liz. Good morning, everyone.

Rick Gonzalez: And thank you for joining us today. I'll discuss our fourth quarter and full year 2020 performance as well as our expectations for 2021. Mike will then provide an update on recent advancements across our pipeline, and Rob will discuss the quarter and our 2021 guidance in more detail. Following our remarks, we'll take your questions. We delivered another strong quarter with adjusted earnings per share of $2.92, exceeding the midpoint of our guidance by $0.08. For the fourth quarter, total net revenues were up nearly 7% on a comparable operational basis.

[music].

Rick Gonzalez: This performance was driven by robust double-digit sales growth from our Immunology, EMONC, and Neuroscience franchises, as well as 9% comparable operational sales growth of Botox Cosmetic, which is demonstrating a rapid recovery. Our fourth quarter performance tops off another excellent and truly transformational year for AbbVie, which included the successful acquisition and integration of Allergan, creating a stronger and much more diverse AbbVie, with leadership across numerous attractive high-growth markets. Significant contributions from our two new best-in-category immunology medicines

Rick Gonzalez: Rindhok and Sky Rizzi, which combined for more than $2.3 billion in 2020 sales, their first full year on the market. We expect the combined contribution from Renvoke and Skyrizzy to nearly double in 2021, to approximately $4.6 billion, based on their continued strong uptake in RA and psoriasis, as well as Renvoke's anticipated approvals in PSA, ankylosing spondylitis, We delivered continued robust growth from our leading HEMONC portfolio, with Imbruvica and VanClexta contributing more than $6.6 billion in combined 2020 sales. We expect our HEMONC franchise to grow double digits again in 2021. We also added two compelling oncology pipeline assets, epicritomab, a potential best-in-class CD3 by CD20 bispecific antibody in development for B-cell malignancies, and limzoparlamab, an anti-CD47 monoclonal antibody being studied in multiple cancers. These two assets will further support the growth of our He-Man franchise across our long-range plan.

Rick Gonzalez: The acquisition of Allergan brought us a substantial neuroscience portfolio with compelling therapies for migraine and psychiatric conditions, augmenting our already existing neuro franchise. The newly combined neuroscience franchise delivered nearly $4.9 billion in comparable 2020 revenue and is expected to grow double digits in 2021. We also added the leading global aesthetics franchise.

Rick Gonzalez: A largely cash-paid portfolio with roughly $3.5 billion in comparable 2020 revenue. As I previously noted, this portfolio has demonstrated a rapid V-shaped recovery and we view aesthetics as an extremely attractive long-term growth opportunity. And importantly, we've made excellent progress in 2020 with our pipeline. We expect our R&D pipeline advancements to lead to the approval of more than a dozen new products or indications over the next two years, including a total of six additional indications for RINVOC and SCIRISI, which will cover all of Humira's major indications, plus new significant disease areas, including atopic dermatitis, expanded indications for Venquexta and Valar, and several new product approvals, including a ToeJapan for episodic migraine, Neviticlax for myelofibrosis, and ABVV951, a potentially transformative next-generation therapy for advanced Parkinson's.

Good morning, and thank you for standing by welcome to the Abbvie fourth quarter 2020 earnings Conference call. All participants will be able to listen only until the question and answer portion of this call.

They ask a question by pressing star one on your phone 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 Severino, 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 Jeff Stuart Executive Vice President commercial operations before we get stuck.

I remind you that some statements we make today may be considered forward looking statements for purposes of the private Securities Litigation Reform Act of 1995, Abbvie cautions that these forward looking statements are subject to risks and uncertainties, including the impact of the COVID-19 pandemic on abbey's operations and financial results that may cause actual results to differ materially from.

Rick Gonzalez: These new opportunities will collectively add meaningful revenue growth in advance of the U.S. Humira LOE. We've entered 2021 in a strong position, which is reflected in our revenue and earnings per share guidance. Based on the recent outperformance of our business, we expect full year 2021 comparable operational sales growth of approximately 9.4%, with total AbbVie sales expected to be approximately $1.7 billion above current consensus. And we anticipate 2021 adjusted earnings per share of $12.32 to $12.52, representing growth of 17.6% at the midpoint. This level of guidance represents impressive performance with nearly all aspects of our business expected to perform at or above current consensus for 2021. The Allergan integration continues to go very well. Transition has been seamless despite the size of the transaction and the timing of the COVID pandemic.

Those indicators.

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

Abbvie is ongoing business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website unless otherwise noted our commentary on sales growth is on a comparable basis, which includes full year full current year and historical results for allergy.

Dan.

This comparison of underlying performance all historically reported Allergan revenues have been recast to conform to Abbvie is revenue recognition accounting policies and exclude the divestitures of the untapped and bio case.

References to operational growth further excludes the impact of exchange following our prepared remarks, we'll take your questions. So with that I'll now turn the call over to Rick. Thank.

Thank you Liz good morning, everyone and thank you for joining us today I'll discuss our fourth quarter and full year 2020 performance as well as our expectations from 'twenty 'twenty one Mike.

Rick Gonzalez: Well, we're making excellent progress against our expense synergies, which Rob will cover in more detail here momentarily. It remains increasingly clear to us that there are significant opportunities for long-term revenue contributions across numerous Allergan growth platforms. As we recently disclosed, we believe you, The first to market and leading oil CGRP for acute migraine represents a $1 billion plus peak sales opportunity, and Tony Japan.

Mike will then provide an update on recent advancements across our pipeline and Rob will discuss the quarter and 'twenty 'twenty one guidance in more detail.

Following our remarks, we'll take your questions.

We delivered another strong quarter with adjusted earnings per share of $2.92 exceeding the midpoint of our guidance by <unk> <unk>.

Fourth quarter total net revenues were up nearly 7% on a comparable operational basis. This performance was driven by robust double digit sales growth from our immunology, Hey, Marc and.

Rick Gonzalez: The potential once-daily oral treatment for the prevention of episodic and chronic migraine also represents a $1 billion plus peak sales opportunity. We expect Baylor's peak sales to approach $4 billion within its currently approved indications of schizophrenia, bipolar one disorder, and bipolar depression, with Major Depressive Disorder, or MDD, representing a potentially significant incremental growth opportunity. Anesthetics, which is poised to regain its growth trajectory this year, is expected to generate high single-digit revenue growth over the next decade.

In neuroscience franchises as well as 9% comparable operational sales growth of botox cosmetic just demonstrating a rapid recovery.

Our fourth quarter performance topped off another excellent and truly transformational year for Abbvie, which.

Included the successful acquisition and integration of Allergan, creating a stronger and much more diverse abbvie with leadership across numerous attractive high growth markets Cigna.

Significant contributions from our two new best in category Immunology medicines were invoked and sky risen, which combine for more than $2 $3 billion in 2020 sales their first full year on the market.

Rick Gonzalez: We continue to closely monitor the COVID dynamics, which will have an impact on our business again in 2021, predominantly in the first half of the year, but significantly moderated from the 2020 impact. And despite the recent COVID resurgence within select geographies, we feel the global healthcare system is much better equipped with COVID treatment protocols and PPE to safely see and treat patients throughout the current year. That said, some therapeutic areas continue to be more impacted than others, like CLL, HCV, and certain hospital-based procedures, among others, which we have contemplated in our 2021 guidance. Overall, we've been pleased with the rate of recovery across our business, a testament to our differentiated product profiles and our commercial execution. So, in summary.

We expect the combined contribution from Wind-broken Sky Rosy to nearly double in 2021 to approximately $4 6 billion based on their continued strong uptake in our in psoriasis as well as Lindbergh anticipated approvals and PSA ankylosing spondylitis in atopic derm.

Titus later this year.

We delivered continued robust growth from our leading newmont portfolio with improve again, thank <unk> contributing more than $6 $6 billion in combined 2020 sales, we expect our humana franchise to grow double digits again in 2021.

We also added two compelling oncology pipeline assets Epicritic Mab potential best in class CD three by CD 20 by specific antibody in development for B cell malignancies, and Lemzo Parliament.

And anti CD 47, monoclonal antibody being studied in multiple cancers.

These two assets will further support the growth of our franchise across our long range plan.

Rick Gonzalez: We've assembled an impressive set of growth assets, and the outlook for AbbVie's business remains strong. Grinvold and Skye Rizzi are expected to contribute more than $15 billion in risk-adjusted sales by 2025, and our expectations for continued robust growth across T-MON, neuroscience, and aesthetics. We have a high degree of confidence that we will be able to successfully absorb the Humira LOE impact in 2023, support an immediate return to total sales growth in 2024, and produce compelling high single-digit compounded annual total sales growth in 2025 through the remainder of the decade with the diversified portfolio and pipeline that we have today. With that, I'll turn the call over to Mike for additional comments on our R&D programs. Thank you, Rick.

The acquisition of Allergan.

Brian So substantial neuroscience portfolio with compelling therapies for migraine and psychiatric conditions augmenting our already existing neuro franchise. The newly combined neuroscience franchise delivered nearly $4 $9 billion and comparable 2020 revenue and is expected to grow them.

Digits in 2021.

We also added the leading global aesthetics franchise are largely cash pay portfolio with roughly $3 5 billion and comparable 2020 revenues as I. Previously noted this portfolio has demonstrated a rapid V shape recovery and we view aesthetics is an extremely attractive.

Our long term growth opportunity.

And importantly, we've made excellent progress in 2020 with our pipeline, we expect our R&D pipeline advancements to lead to the approval of more than a dozen new products or indications over the next two years, including a total of six additional indications for <unk>, which.

Michael Severino: We've clearly made significant progress with our pipeline over the past few years, particularly our late-stage programs in hematologic oncology, with Imbruvica and Venclexta, and in immunology, with Rinvoke and Skyrizia. Since inception, our R&D organization has delivered an impressive set of new products, which collectively contributed approximately $11 billion in revenue in 2020. We also continue to see significant evolution of our early and mid-stage clinical programs, with many assets expected to transition to late-stage registrational studies over the next several years. We will continue to replenish our late-stage pipeline with innovative assets that have the potential to drive additional growth for AbbVie in the second half of the decade. At our recent Immunology Investor event in December, we provided a detailed overview of our immunology program. Highlighting the robust data generated to date for RINVOC and SCIRISI across approved and pipeline indications. At this event, we presented positive top-line data from two new Phase III studies for RINVOTE. Results from the first induction study in ulcerative colitis and results from the head-to-head study versus Diplomat in atopic dermatitis.

We will cover all of Humira as major indications plus new significant disease areas, including atopic dermatitis <unk>.

Expanded indications will then flex day in day law, and several new product approvals, including a total Japan for episodic migraine, Nevada lacks for myelofibrosis.

<unk> 95, one a potentially transformative next generation therapy for advanced Parkinson's disease.

These new opportunities will collectively add meaningful revenue growth in advance of the U S. Humira LOE.

We've entered 2021.

Strong position, which is reflected in our revenue and earnings per share guidance.

Just on the recent outperformance of our business, we expect full year 2021 comparable operational sales growth of a perhaps approximately nine 4% with total abbvie sales expected to be approximately $1 $7 billion above current consensus and we.

We anticipate 2021 adjusted earnings per share of $12 32.

$12 52.

Representing growth of 17, 6% at the midpoint.

This level of guidance represents impressive performance with nearly all aspects of our business expected to perform at or above current consensus from 'twenty to 'twenty one.

Michael Severino: We expect to see results from the second Phase 3 UC induction study later this quarter and from the UC maintenance study in the middle of this year, with regulatory submissions anticipated in the second half of 2021. Our regulatory applications for RINVOC and atopic dermatitis are currently under review, and we expect an approval decision in the U.S. in the second quarter based on priority review, and in Europe in the second half of the year. We recently received European Commission approval for RINVOC in psoriatic arthritis and ankylosing spondylitis and expect approval decisions for those indications in the U.S. in the first half of this year. I want to take a moment to address the topic of safety.

The Allergan integration continues to go very well.

The transition has been seamless despite the size of the transaction and the timing of the Covid pandemic.

While we're making excellent progress against our expense synergies, which Rob will cover in more detail here momentarily.

It remains increasingly clear to us that there are significant opportunities for long term revenue contributions across numerous allergan and growth platforms.

As we recently disclosed we believe you're relevant the first to market, leading oilseeds ERP for acute migraine represents a $1 billion plus peak sales opportunity.

Michael Severino: Specifically Mace and Malignancies, following the results from Topaz Hytnib's post-marketing safety study. At present, there are no data to suggest the safety outcomes from their study apply to a specific JAK1 inhibitor, such as Renvo. We are not aware of any signal for an elevated risk of MACE or malignancies with RINVOC or any JAK inhibitor other than Zeldin. We conducted a pooled database analysis across our clinical trials for DBT, MACE, and malignancies at the time of RINVOLC's regulatory submission and have updated it periodically, including up to the present. Rates with RINVOC have not been elevated relative to comparators or to expected baseline rates. Importantly, there has been no increase or meaningful change in those rates over time.

And total Japan.

A potential once daily oral treatment for the prevention of episodic and chronic migraine also represents a $1 billion plus peak sales opportunity.

We expect very large peak sales to approach $4 billion within its currently approved indications of schizophrenia.

Polar one disorder bipolar depression.

With major depressive disorder, or mbd, representing a potentially significant incremental growth opportunity.

And steady which is poised to regain its growth trajectory. This year is expected to generate high single digit revenue growth over the next decade.

Yes.

We continue to closely monitor the Covid dynamics, which will have an impact on our business again in 2021 predominantly in the first half of the year, but significantly moderated from the 2020 impact.

Michael Severino: Additionally, we adjudicate events for MACE and DBT, which is considered the highest standard of evidence. If we look across our long-term database in RA, a population that is at increased risk for MACE events, our rates remain low. At the approved dose in RA, we have followed more than 3,700 treated patients, totaling more than 9,000 patient years of experience. Our rate of MACE events is 0.4 per 100 patients, which compares favorably to the expected rate of 1.0 to 1.7 events per 100,000. In addition, there is no evidence of a dose response between the 15 and 30 milligram doses. Similarly, the rate of malignancy, excluding non-melanoma skin cancer, with similar follow-up, is 0.8 events per 100 patients. This rate is also consistent with the expected range of rates of 0.86 to 0.94 per 100 patients. And again, we see no evidence of a dose response between Moving now to Sky Rizzy.

Despite.

The recent COVID-19 resurgence within select geographies, we feel the global health care system is much better equipped with COVID-19 treatment protocols and PPE.

<unk> and treat patients throughout the current year.

That said some therapeutic areas continue to be more impacted than others like CLO HCV certain hospital based procedures, among others, which we have contemplated in our 2021 guidance.

Overall, we've been pleased with the rate of recovery across our business, a testament to our differentiated product profiles and our commercial execution.

So in summary.

We've assembled an impressive set of growth assets and the outlook for average business remains strong.

With grinberg from Sky, originally expected to contribute more than $15 billion and risk adjusted sales by 2025, and our expectations for continued robust growth across key month.

Science and aesthetics, we have a high degree of confidence that we will be able to successfully successfully absorb.

Humira LOE impact in 2023.

Supported an immediate return to total sales growth in 2024 and produce compelling high single digit compounded annual total sales growth in 2025 through the remainder of the decade with the diversified portfolio and pipeline that we have today.

Michael Severino: We also recently reported top-line results from the Phase III programs for SCIRIS-E in Crohn's disease and psoriatic arthritis. In the two Crohn's induction studies, Guy Rizzi demonstrated significant improvements in clinical remission and endoscopic endpoints compared to placebo, with symptom improvement seen as early as week four. Based on the data generated today, we believe Sky RISD has the potential to become an important new treatment option for patients with moderate to severe Crohn's disease. We expect to see results from the maintenance study in Crohn's disease later this year, with regulatory submissions anticipated in the second half of 2021. We're also very pleased with Sky Rizzi's results in the phase three studies in psoriatic arthritis, where we saw significant improvements in disease We plan to submit our regulatory applications for Oriska-Risi and psoriatic arthritis in the first half of this year.

With that I will turn the call over to Mike for additional comments on our R&D programs like <unk>.

Thank you Rick.

We've clearly made significant progress with our pipeline over the past few years, particularly our late stage programs in hematologic oncology with <unk>, and then <unk> and in immunology with Rainbow can sky rosy.

Since inception, our R&D organization has delivered an impressive set of new products, which collectively contributed approximately $11 billion in revenue in 2020.

We also continued to see significant evolution of our early and mid stage clinical programs with many assets expected to transition to late stage Registrational studies over the next several years.

We will continue to replenish our late stage pipeline with innovative assets that have the potential to drive additional growth for abbvie in the second half of the decade.

At our recent immunology investor event in December we provided a detailed overview of our immunology programs highlighting the robust data generated to date for Rainbow and Sky Ritchie across approved and pipeline indications.

Michael Severino: We're making good progress with our early and mid-stage immunology programs as well, where we expect several data readouts and phase transitions in 2021. For example, we expect to begin three new studies for ABBV154, our TNF steroid conjugate, including a phase 2B dose-ranging study in RA, as well as phase 2 studies in Crohn's disease and polymyalgia rheumatica. And we'll see proof-of-concept data in the second quarter for Rabigalumab, our CD40 antagonist in Phase 2 for ulcerative colitis, and for ABBV157, our oral ROR gamma T inhibitor in Phase 1 for psoriasis. Both of these programs experienced flight COVID-related delays, with results now expected for both in the second quarter of this year.

Included in this event, we presented positive top line data from two new phase III studies for invoke <unk>.

Results from the first induction study in ulcerative colitis and results from the head to head study versus diplomat and atopic dermatitis.

We expect to see results from the second phase III UC induction study later this quarter and from the UC maintenance study in the middle of this year with regulatory submissions anticipated in the second half of 2021.

Our regulatory applications for <unk> in atopic dermatitis are currently under review and we expect an approval decision in the U S. In the second quarter based on priority review.

And in Europe in the second half of the year.

We recently received European Commission approval for invoke in Psoriatic arthritis, and ankylosing spondylitis and expect approval decisions for those indications in the U S. In the first half of this year.

Michael Severino: In ontology, we continue to make significant progress advancing our pipeline with numerous data readouts and regulatory milestones last year, as well as the addition of several new assets brought in through our in-licensing efforts, including GenMab's CD3xCD20 fCurritamab and iMab's anti-CD47 Lemzoparlamab. We showcased new data from several programs at the recent, where we presented nearly 40 abstracts from eight different assets. Notable Presentations Included

I want to take a moment to address the topic of safety, specifically mace and malignancies. Following the results from Tofacitinib post marketing safety study.

At present, there are no data to suggest the safety outcomes from their study apply to a specific JAK one inhibitor such as <unk>.

We are not aware of any signal for an elevated risk of mace or malignancies with Rins book are any JAK inhibitor others intelligence.

We conducted a pool database analysis across our clinical trials for DVT Mace and malignancies at the time of <unk> regulatory submission and have updated it periodically including up to the present.

Michael Severino: Data from the Phase 2 Captivate trial, evaluating Imbruvica plus Venclexta in frontline CLL, which showed patients who achieved undetectable MRD following this combination maintained their deeper mission at the one-year mark after stopping therapy, with a 95% rate of disease-free survival. We also presented new five-year data from BenClexta's Murano trial demonstrating the benefits of fixed-duration BenClext The latest results from Murano in the relapse-refractory CLL setting showed a median progression-free survival of 54 months in the Venclexta and Rituximab group compared to 17 months in the Vendamustine Rituximab group, three or more years after stopping treatment.

Rates with <unk> have not been elevated relative to competitors or to expected baseline rates.

Importantly, there has been no increase or a meaningful change in those rates over time.

Additionally, we adjudicate events from Mason, DVT, which is which is considered the highest standard of evidence.

If we look across our long term database and RA a population that is at increased risk for mace events our rates remain low.

At the approved dose of <unk>.

We have followed more than 3700 treated patients totaling more than 9000 patient years of experience.

Our rate of Mace events is 0.4 per 100 patient years, which compares favorably to the expected rate of 1.0 to $1 seven events per 100 patient years.

Michael Severino: Updated dose escalation data from a phase one study evaluating eptoridomab in B-cell malignancies were also presented at AbbVie. Ebcretamab is a subcutaneously delivered bispecific CD3 by CD20 antibody being developed in collaboration with GenMab. In the Phase I study, Epiridomab demonstrated encouraging single-agent anti-tumor activity in heavily pre-treated patients, with a consistent and favorable safety profile, showing no grade 3 or higher CRS events, as well as limited neurotoxicity. We believe that Karotimab has the potential to become a best-in-class therapy for a number of B-cell malignancies, including diffuse large B-cell lymphoma and follicular lymphoma.

In addition, there is no evidence of a dose response between the 15 and 30 milligram doses.

Similarly, the rate of malignancy, excluding non melanoma skin cancer with similar follow up is 0.8 events per 100 patient years.

This rate is also consistent with the expected range of rates of <unk> six to <unk> 94 per 100 patient years and again, we see no evidence of a dose response between 15 and 30 milligrams.

Moving now to <unk>.

We also recently reported topline results from the phase III programs for <unk> in Crohn's disease, and Psoriatic arthritis.

In the two Crohn's induction studies <unk> demonstrated significant improvements in clinical remission, and endoscopic endpoints compared to placebo with symptom improvement seen as early as week four.

Michael Severino: The Phase 3 trial in relapsed refractory DL-BCL recently began, and we will provide updates on EPCRIT-MM as its development program progresses. Initial results were also presented from a Phase I study evaluating TNB383B in relapsed refractory multiple myeloma. DNB383b is a novel bispecific T cell engaging immunotherapy targeting BCMA and CD3 being developed in collaboration with ToneoBio. These Phase 1 results demonstrated that BCMA CD3 BISPECIFICS provided overall response rates of 80%, with a large number of patients achieving a very good partial response or better. Despite having received multiple prior lines of therapy.

Based on the data generated to date, we believe Sky racing has the potential to become an important new treatment option for patients with moderate to severe crohn's disease.

We expect to see results from the maintenance study in Crohn's disease. Later this year with regulatory submissions anticipated in the second half of 2021.

We're also very pleased with Sky <unk> results in the phase III studies in Psoriatic arthritis, where we saw significant improvements in disease activity across both skin and joint endpoints compared to placebo.

We believe that the activity, we have seen on joint disease and the impressive skin clearance that is a hallmark of the Sky <unk> program make it a compelling offering for patients with mixed joint and skin involvement.

We plan to submit our regulatory applications for <unk> in Psoriatic arthritis in the first half of this year.

Michael Severino: CNB383B was well tolerated at all doses tested, with few off-target toxicities and no grade 3 or higher CRS observed. With its safety profile, efficacy, and the convenience of once every three weeks dosing, this agent has the potential to become a promising treatment option for myeloma patients, and our partner IMAB published an abstract with initial results from a phase one study evaluating Lemzoparl These results demonstrated encouraging activity in relapsed refractory AML patients, and Lemzo Parlamab was well tolerated, with no serious hematological adverse events reported to date.

We're making good progress with our early and mid stage immunology programs as well, where we expect several data readouts and phase transitions in 2021.

We expect to begin three new studies for ABV, one five for our TNF steroid conjugate, including a phase II dose ranging study in <unk> as well as phase II studies in Crohn's disease and Polymyalgia Rheumaticky.

And we'll see proof of concept data in the second quarter for Robert Gala Man, our CD 40 antagonist in phase II for ulcerative colitis and for <unk> <unk> seven our oral ror Gamma T inhibitor in phase one for psoriasis.

Both of these programs experienced slight COVID-19 related delays with results now expected for both in the second quarter of this year.

Michael Severino: Based on these promising initial results, we plan to begin new studies this year for Lems of Parlimat in AML, MDS, and in multiple myeloma. We also recently saw data from an interim analysis of a phase 2 study evaluating TELUSO-V in heavily pre-treated, non-squamous, non-small cell lung cancer. The encouraging results from Stage 1 of this study met the criteria for advancing the program. With TELUSO-B demonstrating a 54% objective response rate in patients with wild-type EGFR, we have highly expressed CMAP, and EGFR wild-type patients with overexpressed, which includes both high and intermediate expression; the objective response rate was 35%. Based on these results, we believe that there is an important role for TLSO-B in this target population, which represents roughly 25% of the non-squamous, non-small cell lung cancer population.

In oncology, we continued to make significant progress advancing our pipeline with numerous data readouts and regulatory milestones last year.

As well as the addition of several new assets brought in through our in licensing efforts, including Genmab CD three by CD 20-F, <unk> and IMAX anti CD 47, Lemzo Parliament.

We showcased new data from several programs at the recent ash meeting.

Where we presented nearly 40 abstracts from a different assets.

Notable presentations included.

Data from the phase II Captivate trial, evaluating <unk> plus <unk> in frontline CLO, which showed patients who achieved undetectable Mardi. Following this combination maintained their deep remission at the one year Marc after stopping therapy.

With a 95% rate of disease free survival.

We also presented new five year data from bank <unk> Murano trial, demonstrating the benefits of fixed duration, then collects the combinations in helping patients achieve sustained progression free survival.

Michael Severino: We will be opening the second stage of the study and are planning discussions with regulators regarding the potential of this study to support an accelerated filing. We expect 2021 to be another important year for our oncology pipeline, with several regulatory submissions, as well as data readouts across all stages of development. This year, we expect to see... Data for Imbruvica in the Phase III SHINE Study in Frontline MCL, with regulatory submissions expected in the second half of the year. Data for Imbruvica in combination with Venclexta and second line or greater MCL and frontline CLL, with regulatory submissions for frontline CLL expected in the second half of the year. We also expect to see data from registration-enabling studies for Venclexta in high-risk MDS and Nebidoclax in relapsed refractory myelofibrosis, and we expect to see data from numerous programs in our early stage oncology pipeline. In addition, programs under collaboration with Calico are also progressing well.

The latest results from Iran. In the relapse refractory CLO setting showed a median progression free survival of 54 months in the net cluster and Rituximab group compared to 17 months in the Bendamustine Rituximab group three or more years after stopping treatment.

Updated dose escalation data from a phase one study evaluating <unk> in B cell malignancies were also presented at ash.

<unk> is our subcutaneously delivered by specific PV three by CD 20 antibody being developed in collaboration with Genmab.

In the phase one study at <unk> Mab demonstrated encouraging single agent antitumor activity in heavily pretreated patients with a consistent and favorable safety profile showing no grade three or higher Crs events as well as limited neurotoxicity.

We believe that Chris <unk> has the potential to become a best in class therapy across a number of D cell malignancies, including diffuse large b cell lymphoma, and Follicular lymphoma.

The phase III trial in relapsed refractory <unk> Bcl recently began and we will provide updates on <unk> as its development program progresses.

Michael Severino: Our partnered effort is comprised of a strong pipeline of novel targets, which includes more than 20 active programs in discovery or preclinical development. We currently have programs that have advanced into clinical development in two areas, immuno-oncology and neurodegeneration. The LEAD-Calico program in oncology is focused on PTPN2 inhibitors. Unknown Executive, Joseph G. H. P. S. R. M. M. M. O. M. O. M. O. M. O. M. O. M. O. The discovery of novel, orally bioavailable PTPN2 inhibitors represents a significant breakthrough in a target class that has historically been considered undruggable.

Initial results were also presented from a phase one study evaluating <unk> 383 be in relapsed refractory multiple myeloma.

Dnb 38, <unk> is a novel bi specific T cell engaging immunotherapy targeting <unk> and CD three being developed in collaboration with today, Ohio.

These phase one results demonstrated that the <unk> CD three by specific provided overall response rates of 80%.

With a large number of patients achieving a very good partial response or better despite having received multiple prior lines of therapy.

<unk> hundred 80, <unk> was well tolerated at all doses tested with a few off target toxicities and no grade three or higher Crs observed.

Michael Severino: We currently have two assets in Phase 1 development, ABBV, CLS, 579, and 484. We've seen evidence of immune activation in the clinic with this pathway, and we expect to see proof of concept data from this program in 2020. The lead calico program in neuroscience is an EIF-2B activator that targets a key regulator of the highly conserved integrated stress response pathway. Inhibition of this pathway has the potential to prevent pathology and restore function in a number of neurodegenerative disorders, such as ALS and Parkinson's, as well as in traumatic brain injury.

With its safety profile efficacy and the convenience of once every three week dosing. This agent has the potential to become a promising treatment option for myeloma patients.

And our partner I Mab published an abstract with initial results from our phase one study evaluating lemzo Harlem add in AML and Mds.

These results demonstrated encouraging activity in relapsed refractory AML patients.

And Lemzo Parliament was well tolerated with no serious hematological adverse events reported to date.

Michael Severino: Our lead EIF-2B activator, ABBV-CLS-7262, is currently progressing through phase one, and we plan to begin a study later this year in patients with ALS and other neuroscience updates. Last year we completed our registrational program for Itojapan and episodic migraine prevention, and we recently submitted our regulatory application to the FDA. We expect an approval decision by the end of this third. The data generated in our Phase 3 programs support a strong benefit-risk profile, and we believe that EtojoPan has the potential to offer meaningful benefits. A Safe, Effective Oral Treatment Option for the Prevention of Episodic Migration

Based on these promising initial results we plan to begin new studies this year for <unk> in AML Mds and in multiple myeloma.

We also recently saw data from an interim analysis of our phase II study evaluating <unk> in heavily pre treated non squamous non small cell lung cancer patients.

The encouraging results from stage one of this study met the criteria for advancing the program.

With <unk>, demonstrating a 54% objective response rate in patients with wild type Egfr, we have highly expressed <unk>.

In Egfr wild type patients with over expressed T map, which includes both high and intermediate expression. The objective response rate was 35%.

Based on these results we believe that there is an important role for <unk> in this target population, which represents roughly 25% of the non squamous non small cell lung cancer population.

Michael Severino: In 2021, we expect to see data from several late stage neuroscientists, including results from two phase three studies for Braylor in major depression and results from the pivotal program for ABBV 951 in advanced parking. With regulatory submissions for 951 expected in the second half, we also expect to see proof-of-concept data for elizanumab in a Phase II study in multiple sclerosis and ABBV8E12, our lead anti-tau antibody, in a Phase II study in Alzheimer's. In addition to AD-12, we have a number of promising approaches in Alzheimer's, including our neuroinflammation programs aimed at These include tau antibodies with different epitope specificity, as well as approaches to clear intracellular tau.

We will be opening the second stage of the study and are planning discussions with regulators regarding the potential of this study to support an accelerated filing.

We expect 2021 to be another important year for our oncology pipeline.

With several regulatory submissions as well as data readouts across all stages of development.

This year, we expect to see day.

Data from <unk> in the phase III Shine study in frontline mcl with regulatory submissions expected in the second half of the year.

Data for <unk> in combination with <unk> in second line or greater Mcl, and frontline CLO with regulatory submission for frontline <unk> expected in the second half of the year.

We also expect to see data from registration, enabling studies for <unk> in high risk Mds and <unk> in relapsed refractory myelofibrosis.

And we expect to see data from numerous programs in our early stage oncology pipeline.

In addition, the programs under collaboration with Calico are also progressing well.

Michael Severino: In aesthetics, we continue to make excellent progress with our portfolio of facial toxins and dermal fillers, with several regulatory submissions, data readouts, and pivotal study starts expected this year. Our programs include new indications for Botox, as well as innovative toxins, such as new liquid formulations and both long and short acting toxins. We also have programs to develop new indications for the Juvederm collection, as well as novel dermal fillers, such as Harmonica, which will be entering registration-enabling studies in the U.S., and InEyeCare. Based on the positive results from the Phase 3 studies evaluating our topical eyedrop, AGN 190584, for the treatment of symptoms associated with presbyopia,

Our partnered effort is comprised of a strong pipeline of novel targets, which includes more than 20 active programs in discovery or preclinical development.

Importantly, we currently have programs, which has advanced into clinical development in two areas immuno oncology and neuro degeneration.

The lead Calico program in oncology is focused on <unk>, two inhibitors, which act at multiple steps in the cancer immunity cycle and have potential applicability in a broad variety of tumor types.

The discovery of novel orally bio available <unk> inhibitors represent a significant breakthrough in a target class that has historically been considered undruggable.

We currently have two assets in phase one development ABV, CLS 579 and $4 four.

We've seen evidence of immune activation in the clinic with this pathway and we expect to see proof of concept data from this program in 2022.

Michael Severino: We plan to submit our regulatory application later this year and expect an approval decision in the fourth quarter of this year. So, in summary, our R&D productivity remained high last year despite multiple COVID-related challenges. We were able to maintain study continuity and minimize delay.

The lead Calico program in neuroscience is in EIF, <unk> activator, which targets a key regulator of the highly conserved integrated stress response pathway.

Inhibition of this pathway has the potential to prevent pathology and restore function in a number of neuro degenerative diseases, such as ALS and Parkinson's disease as well as in traumatic brain injury.

Michael Severino: We're entering 2021 well positioned for continued success, and we expect significant program advancement across all stages of our pipeline again this year. This includes five new assets or major indication approvals, and half a dozen regulatory submissions. More than 10 pivotal study readouts and more than 15 data readouts from early and mid-stage programs. With that, I'll turn the call over to Rob for additional comments on our fourth quarter performance and our 2021 guidance. Rob, thank you, Mike.

Our Lee the EIF <unk> activator ABV CLS 7262 is currently progressing through phase one and we plan to begin a study later this year in patients with ALS.

And other neuroscience updates last year, we completed our Registrational program for a total Japan in episodic migraine prevention, and we recently submitted our regulatory application to the FDA.

We expect an approval decision by the end of the third quarter.

The data generated in our phase III program support a strong benefit risk profile and we believe that <unk> has the potential to offer meaningful benefits to patients is a safe effective oral treatment option for the prevention of episodic migraine.

Robert A. Michael: Starting with fourth-quarter results, we once again delivered strong top and bottom line performance. We reported adjusted earnings per share of $2.92, above our guidance midpoint by $0.08. Total net revenues were approximately $13.9 billion, up 6.8% on a comparable operational basis and ahead of our expectations. Immunology global sales were approximately $6 billion, up 14.8% on an operational basis. Within Immunology, Humira sales were approximately $5.2 billion, up 4.4% on an operational basis, with continued high single-digit growth in the U.S., offset by biosimilar competition across international markets. Guy Rizzi's sales were $525 million, and Rimbaud's sales were $281 million, with both products demonstrating strong sequential growth above expectation. Emetologic Oncology delivered another strong quarter with revenue of approximately $1.8 billion, up 15.5% on an operational basis with solid growth from Imbruvica and Benclexta. Aesthetic sales were more than $1.1 billion, with Botox Cosmetic and Juvederm both experiencing a rapid recovery from the COVID pandemic. Neuroscience revenues were nearly $1.4 billion, up 14.9% on a comparable operational basis, led by Raylar and our Migraine Portfolio. We also saw a significant contribution from iCare, which had sales of more than $900 million.

In 2021, we expect to see data from several late stage neuroscience assets, including results from two phase III studies for <unk> in major depressive disorder and results from the pivotal program for <unk> 95, one in advanced Parkinson's disease with regulatory submissions for 95, one expect.

In the second half of the year.

We also expect to see proof of concept data for <unk> in a phase II study in multiple sclerosis, and ABV AE 12, our lead anti Tau antibody in a phase II study in Alzheimer's disease.

In addition to 812, we have a number of promising approaches in alzheimers, including our neuro inflammation programs aimed at <unk> II and CD 33 currently in clinical development as well as other Tau approaches in preclinical development.

These include Tau antibodies with different epitope specificity as well as approaches to clear intracellular Tau.

Anesthetics, we continue to make excellent progress with our portfolio of facial toxins and dermal fillers with several regulatory submissions data Readouts and pivotal study starts expected this year.

Our programs include new indications for botox as well as innovative toxins, such as new liquid formulations in both long and short acting toxins.

We also have programs to develop new indications for the Juvederm collection as well as novel dermal fillers, such as harmonica, which will be entering registration, enabling studies in the U S.

And in Eyecare base.

Based on the positive results from the Phase III studies evaluating our topical eye drop AGN, one nine O five eight floor for the treatment of symptoms associated with Presbyopia, we plan to submit our regulatory application later this month.

Robert A. Michael: During Now the P&L profile for the fourth quarter, adjusted gross margin was 81.8% of sales, adjusted R&D investment was 12.6% of sales, and adjusted SG&A expense was 22.3% of sales. The Adjusted Operating Margin Ratio was 46.9%, an improvement of 230 basis points versus the prior year. Net interest expense was $618 million, and the adjusted tax rate was 11.6%. As we look ahead to 2021, our full-year adjusted earnings per share guidance is between $12.32 and $12.52, reflecting growth of 17.6% at the midpoint. Excluded from this guidance is $5.63 of known intangible amortization and specified items.

And expect an approval decision in the fourth quarter of this year.

So in summary, our R&D productivity remained high last year, despite multiple COVID-19 related challenges and we were able to maintain steady continuity and minimize delays.

We're entering 2021, well positioned for continued success and we expect significant program advancement across all stages of our pipeline again this year.

This includes five new asset or a major indication approvals half a dozen regulatory submissions more than 10 pivotal study readouts and more than 15 data readouts from early and mid stage programs.

With that I'll turn the call over to Rob for additional comments on our fourth quarter performance and our 2021 guidance Rob. Thank you, Mike starting with fourth quarter results. We once again delivered strong top and bottom line performance.

Reported adjusted earnings per share up $2 92.

Above our guidance midpoint by <unk> <unk>.

Total net revenues were approximately $13 $9 billion.

Up six 8% on a comparable operational basis and ahead of our expectations.

Immunology global sales were approximately $6 billion.

Robert A. Michael: We expect adjusted net revenue of approximately $55.7 billion. At current rates, we expect foreign exchange to have a 1% favorable impact on full-year comparable sales growth. This forecast includes the following assumptions for our key product and therapeutic areas. We expect immunology global sales of approximately $25 billion, including U.S. HUMERA growth of approximately 8 percent, and international HUMERA revenue of approximately $3 billion at current exchange rates. Guy Rizzi Global Sales of approximately $2.9 billion, and Renvo Global Sales of approximately $1.7 billion.

Up 14, 8% on operational basis within immunology Humira sales were approximately $5 2 billion.

Up four 4% on operational basis with continued high single digit growth in the U S offset by Biosimilar competition across international markets.

Guy Ritchie sales were $525 million and <unk> sales were $281 million with both products demonstrated strong sequential growth above expectations.

Metalogic oncology delivered another strong quarter with revenue of approximately $1 8 billion.

Up 15, 5% on operational basis with solid growth from <unk> and <unk>.

<unk> sales were more than $1 1 billion.

With botox cosmetic and Juvederm, both experiencing a rapid recovery from the Covid pandemic.

Neuroscience revenues were nearly $1 4 billion.

Robert A. Michael: We expect hematologic oncology to grow double digits, with Imbruvica global revenue of approximately $5.7 billion and VanCleck's global sales of approximately $1.8 billion. For Aesthetics, we expect global sales of approximately $4.5 billion, including approximately $1.8 billion from Botox Cosmetic and approximately $1.3 billion from Juvederm. For neuroscience, we expect global revenue of approximately $5.7 billion, including Botox therapeutic sales of approximately $2.3 billion, Raylar sales of approximately $1.8 billion, and Urbeldi sales of approximately $400 million.

Up 14, 9% on a comparable operational basis led by rail or in our migraine portfolio.

We also saw a significant contribution from eyecare, which had sales of more than $900 million.

Turning now to the P&L profile for the fourth quarter. Adjusted gross margin was 81, 8% of sales adjusted R&D investment was 12, 6% of sales and adjusted SG&A expense was 22, 3% of sales.

Adjusted operating margin ratio was 46, 9% of sales an improvement of 230 basis points versus the prior year.

Net interest expense was $618 million and the adjusted tax rate was 11, 6%.

As we look ahead to 2021, our full year adjusted earnings per share guidance is between $12 32 and.

Robert A. Michael: For iCare, we expect global sales of approximately $2.9 billion, including approximately $550 million from Restasis, which assumes no generic competition in the first half of 2021. For Women's Health, we expect global revenue of approximately $1.1 billion. For our remaining larger products, we expect global sales of approximately $2 billion from Maverette, $1.2 billion from Creon, $1 billion from Linzess, $800 million from Synthroid, and $750 million from Lupron. Looking at the P&L for 2021, we are forecasting full year adjusted gross margin of approximately 83% of sales, adjusted R&D investment of approximately $6.6 billion, and adjusted SG&A expense of approximately $11.8 billion This guidance includes approximately $1.7 billion in expense synergies from the Allergan acquisition. We are forecasting an adjusted operating margin ratio of approximately 50% of sales, which represents an improvement of roughly 200 basis points versus 2020.

And $12 52.

<unk> growth of 17, 6% at the midpoint.

Excluded from this guidance is $5 63.

Of known intangible amortization and specified items.

We expect adjusted net revenue of approximately $55 7 billion at current rates, we expect foreign exchange to have a 1% favorable impact on full year comparable sales growth.

This forecast comprehends the following assumptions for our key products and therapeutic areas.

We expect immunology global sales of approximately $25 billion, including U S humira growth of approximately 8%.

Internationally Humira revenue of approximately $3 billion at current exchange rates.

Global sales of approximately $2 $9 billion and revoke global sales of approximately $1 7 billion.

We expect hematologic oncology to grow double digits with improving our global revenue of approximately $5 7 billion and.

And then collects the global sales of approximately $1 8 billion.

Prosthetics, we expect global sales of approximately $4 5 billion.

Including approximately $1 $8 billion from Botox, cosmetic and approximately $1 $3 billion from Juvederm.

For neuroscience, we expect global revenue of approximately $5 7 billion, including Botox therapeutic sales of approximately $2 3 billion.

Robert A. Michael: We expect adjusted net interest expense of approximately $2.4 billion, our non-gap tax rate to be approximately 12.5%, and our share count to be roughly flat to Q4 2020. As we look ahead to the first quarter, we anticipate net revenue approaching $12.7 billion. At current rates, we expect foreign exchange to have a 1% favorable impact on comparable sales growth. We are forecasting an adjusted operating margin ratio of approximately 50% of sales, and we model a non-gap tax rate of 12.3%. We expect adjusted earnings per share between $2.79 and $2.83, excluding approximately $1.32 of known intangible amortization and specified items. Finally, AbbVie's strong business performance and outlook continue to support our capital allocation priorities. Our cash balance at the end of December was $8.4 billion, and we expect to generate free cash flow of approximately $21 billion in 2021.

Railcar sales of approximately $1 8 billion.

And your Bellevue sales of approximately $400 million.

For eye care, we expect global sales of approximately $2 9 billion.

Including approximately $550 million from Restasis, which assumes no generic competition in the first half of 2021.

For women's health, we expect global revenue of approximately $1 1 billion.

For our remaining larger products, we expect global sales of approximately $2 billion from Maverick $1 $2 billion from Creon $1 billion from Linzess $800 million from Synthroid and $750 million from Lupron.

Looking at the P&L for 2021, we are forecasting full year adjusted gross margin of approximately 83% of sales adjusted R&D investment of approximately $6 6 billion and adjusted SG&A expense of approximately $11 8 billion.

This guidance includes approximately $1 $7 billion and expense synergies from the Allergan acquisition.

We are forecasting an adjusted operating margin ratio of approximately 50% of sales, which represents an improvement of roughly 200 basis points versus 2020.

We expect adjusted net interest expense of approximately $2 4 billion, our non-GAAP tax rate to be approximately 12, 5% and our share count to be roughly flat to Q4 2020.

Robert A. Michael: This fully supports a strong and growing dividend, which we have more than tripled since inception, as well as rapid debt repayment, where we expect to pay down $17 billion of combined company debt by the end of 2021, including the $8.6 billion that was repaid in 2020. We expect to achieve a net debt to EBITDA ratio just below 2.5 times by the end of 2021, with further deleveraging through 2023. We anticipate that our net leverage ratio will be approximately two times by the end of 2022. Our strong cash flow also allows for continued business development, with approximately $2 billion allocated annually to augment our pipeline with the most promising external technologies and innovative mid- to late-stage assets.

As we look ahead to the first quarter, we anticipate net revenue approaching $12 7 billion at current rates, we expect foreign exchange had a 1% favorable impact on comparable sales growth we.

We are forecasting an adjusted operating margin ratio of approximately 50% of sales and we model a non-GAAP tax rate up 12, 3%.

We expect adjusted earnings per share between $2 79.

And $2 83.

Excluding approximately $1 32 of.

Of known intangible amortization and specified items.

Finally, abbvie strong business performance and outlook continues to support our capital allocation priorities.

Our cash balance at the end of December was $8 $4 billion, and we expect to generate free cash flow of approximately $21 billion. In 2021. This fully supports a strong and growing dividend, which we have more than tripled since inception as well as rapid debt repayment, we expect to pay down $17 billion of.

Combined company debt by the end of 2021, including the $8 $6 billion that was repaid in 2020.

Robert A. Michael: In closing, we are very pleased with AbbVie's strong performance in 2020. We've driven top-tier growth while also advancing our strategic priorities, and we expect to deliver robust performance in 2021 and over the long term. With that, I'll turn the call back over to Liz. Thanks, Rob.

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

We anticipate that our net leverage ratio will be approximately two times by the end of 2022.

Liz Shea: We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions. Operator, first question please. And as a reminder, if you would like to ask a question, please press star one. And our first question today is from Jeffrey Porteous from SVB Layering. Thank you very much. And, as usual, I appreciate all the detail and the guidance and congratulations on the results. A quick question on SCIRISI and one on RINVOC.

Our strong cash flow also allows for continued business development with approximately $2 billion allocated annually to augment our pipeline with the most promising external technologies and innovative mid to late stage assets.

In closing we are very pleased with Abbvie strong performance in 2020, we've driven top tier growth, while also advancing our strategic priorities and we expect to deliver robust performance in 2021 and over the long term.

With that I'll turn the call back overlays. Thanks.

Thanks, Rob we will now open the call for questions and the interest of hearing from as many analysts as possible over the remainder of the call. We ask that you. Please limit your questions to one or two operator first question. Please Andrew.

Operator: First, one of your competitors had a negative result in a post-marketing study recently. I'm just wondering if you've had any discussions with regulators about conducting any other studies for RINVOC or updating the label for RINVOC as a result of that negative signal. And then secondly, on SCIRISI, a commercial question. Your current price for the 150 milligram dose is about $85,000, and you're using 4X the dose for ulcerative colitis.

As a reminder, if you would like to ask a question. Please press star one.

And our first question today is from Geoffrey Porges from F. VP leerink. Thanks.

Thank you very much as usual appreciate all the detail from your guidance from congratulations on the result.

A quick question on Sky resumed.

First.

One of your competitors have a negative result.

Post marketing study recently I'm, just wondering if you've had any discussions with regulators about.

Conducting any other studies for embark or updating the label for <unk> as a result of that negative signal and then secondly on Scott.

Our commercial question.

You can't price for over 150 milligram dose is about $85000 and youre using forex that does for ulcerative colitis could you just tell us how.

Operator: Could you just tell us how you can manage that, and is it feasible to have sort of different prices despite the big difference in dosage? Okay, this is Mike. I will take your second question first, and then we can cover the Skyrizzy question. With respect to RINVOC, I assume you're talking about the Topacitinib safety study, which presented its top-line results fairly recently, in the last several days, and showed in that program that they were unable to exclude a risk of MACE or malignancy based on the criteria that were used to analyze that data set.

How you can manage that.

Feasible to have.

Sort of different prices.

The big difference in dosing.

Okay. This is Mike.

I'll take your second question first and then we can cover the <unk> question with Richard.

Spectra <unk> I assume you're talking about the Tofacitinib safety study, which topline results fairly recently in the last several days and showed in that program that they were unable to exclude a risk of mace or malignancy based on the criteria that were used to analyze that data sets.

Michael Severino: As I said in my prepared remarks, we've kept a very, very close eye on our data, both at the time of the NDA and since. Our rates have not been elevated with respect to comparator or baseline rates, and the rates overall remain low. With respect to your specific question about whether we've had discussions with regulators, regulators have not asked us to do a long-term safety study in the way that Pfizer was asked, so that has not been discussed with regulators, and we have not had any contact with regulators around labeling and with respect to Sky Rizzy. Yeah, hi, it's Geoff. It's Geoff Stewart.

As I said in my prepared remarks, we've kept it very very close eye on our data.

Both at the time of the NDA and.

In an ongoing manner since that time, we've not seen a signal.

Our rates have not been elevated with respect to comparator or baseline rates and the rates overall remained low.

With respect to your specific question about wet weather, we've had discussions with regulators regulators have not asked us to do a long term safety study.

The way that Pfizer was asked so that has not been discussed with regulators and we have not had any contact with the regulators around labeling updates.

To the present time right.

Alright.

Geoff Stewart: On the commercial question, you know, we have anticipated the different markets and how we will approach the pricing. Now, it's important that we're just starting to see the Skyrizzy data.

And with respect to Sky Ritchie, Yes, Hi, it's Jeff It's Jeff Stuart on the commercial question, we have anticipated the.

The different markets and how we will approach the pricing now it's important that we're just starting to see the sky Rizzi data. We saw the induction data, we'll see the maintenance data I think it is important that as we look at our strategy that we're honing is for <unk> for Crohn's youre going to have an induction dose which is.

Geoff Stewart: We saw the induction data. We'll see the maintenance data. I think it's important that as we look at our strategy that we're honing for Skyrizzy, you're going to for Crohn's, you're going to have an induction dose, which is an IV at a different dose. And we know that based on the form.

Rick Gonzalez: I believe we can price that to market. And we're coming with a unique approach for maintenance as well, depending on where that dosing falls out. And we would be using at that point what is known as an on-body injector. So the combination of the forms as well as basically the ways that we will deliver the medication when we get there, we believe that we can price it effectively into the market. So this is Rick. So I think the bottom line is we've contemplated that. It's a good question, Geoff.

Which is a nice Z at a different dose and we know that based on the form and some things we can.

Believe we can price debt to market and also we are coming with a unique approach for the maintenance as well, depending on where that dosing falls out.

And we would be using at that point, which is known a.

On body injector, so the combination of the forms as well as basically the ways that we will deliver.

The medication when we get there we believe that we can we can price effectively to the market and manage it across the indications.

Michael Severino: But I think we have a strategy that will allow us to deal with that and impact the market in an appropriate way. Thanks, Geoff. Operator, next question, please. And our next question is from Vamil Divan from Mizuho Securities. Hi Gary.

This is Richard I think the bottom line is we've contemplated that it's a good question.

But I think we have a strategy that will allow us to deal with that and <unk>.

Impact the margin appropriate way.

Thanks, Geoff Operator next question. Please and our next question is from one of the van from Mizuho Securities.

Robert A. Michael: Thanks so much for taking the questions, maybe two if I could. So one, I appreciate the long-term guidance you've given recently on the top line. I'm just wondering how we should maybe think about the margin progression as we think about the HMARA LOE in a couple of years, and then as we sort of get past that and your sales threshold ramps up again, if you can maybe give some sense of where you think your margins could sort of come back to. And then the other one I have is just on BrailleARC.

Hi, great. Thanks, so much for taking the questions maybe two if I could so one appreciate the long term guidance, you've given recently on the topline.

Just wondering.

How we should maybe think about the margin progression as we think about the Humira LOE and.

And a couple of years and then as we saw it could get past that and your sales touch a ramp up again, if you can maybe give some sense of where you think your margins could sort of come back to and then the other one I have is just on <unk> again I appreciate that.

Rick Gonzalez: Again, appreciate the guidance you've given there. I think one of the big events for you guys this year will be the phase three data in MDD. I'm just curious kind of what gives you confidence, that maybe you can just talk about whether it's from the drug or the study design, sort of what gives you confidence or why should we be confident sort of going into that data readout. Thanks. This is Rob.

To get in there I think one of the big events for you guys. This year will be the phase III data and MDT Andrew.

Curious kind of what gives you confidence that maybe you can just talk about whether it's from John.

The study design instead of one.

Gives you confidence from.

Why should we be confident so going into that data readout. Thanks.

Michael Severino: I'll take your question on margin progression. I think when you consider the greater than $2 billion in expense synergies from Allergan by next year and the P&L leverage that will come from the sales growth that we also expect for next year, you should expect that our operating margin will continue to expand through 2022. Upon the entry of U.S. biofilmers in 2023, and given human error's profitability, it is reasonable to expect operating margin to pull back. And as we've indicated before, the 45% range, based on our current LRP, I think it'll be a little bit higher than that. But then, when we return to growth immediately in 2024, we'll return to revenue growth, but very strong revenue growth starting in 2025. You can expect then, you know, operating margins once again to expand. We've had a long history of expanding operating margin by leveraging the P&L, and I would expect that to continue as we start to see very strong revenue growth starting in 2025 and beyond. Yeah, Vamo, this is Rick.

Sure.

Of all of this is Rob I'll take your question on margin progression I think when you consider the greater than 2 billion expense synergies from Allergan by next year and the P&L leverage that will come from the sales growth. We also expect for next year, you should expect that our operating margin will continue to expand through 'twenty. Two upon the entry of U S. Biosimilars in 'twenty, three and given Humira as profitability. It is it is reasonably expect op margin pullback.

We've indicated before.

45% range based on our current <unk> P. I think it'll be a little bit higher than that.

But then when we returned to growth immediately and 24 will return to revenue growth, but very strong revenue growth. Starting in 25, you can expect then RPM margins. Once again expand we've had a long history of expanding operating margin by leveraging the P&L and I would expect that to continue as we start to see very strong revenue growth starting in 'twenty five and beyond.

Mike and I will cover the second question on Baylor. It's important to recognize that what we've communicated in long-term guidance on Baylor is based on the three currently approved. It doesn't count on the facts. M.D.D. would be successful.

<unk>.

Obama this is Rick Mike and I'll cover the second question on <unk>.

It's important to recognize that what we've communicated and long term guidance on Baylor is based on the three currently approved indication. So it doesn't count on the fact that <unk> would be successful now having said that I think we do have.

Now, having said that, I think we do have, you know, I'd say we're cautiously optimistic about the M.D.D. indication. And I'll let Mark kind of walk through how we look at it and what gives us that level of confidence. But in the event that it weren't to play out, that wouldn't impact the guidance that we're giving. So this is Mike. I'll pick you up from here. I think that our optimism, and I think that's the right way to express it in a disease like MDD, which is a challenge, working is based on a couple of things. One is based on the basic pharmacology of Crayo-R, which has a unique mix of D3, D2 specificity and other features that lead clinically to what's been described as a brightening effect.

I'd say, we're cautiously optimistic about.

About the <unk>.

MTV indication and I'll, let Marc kind of walk through how we look at it what gives us that level of confidence, but in the event. It werent to play out that it doesn't impact the guidance that we gave.

So this is Mike I'll pick up from here.

Think that our optimism and I think that's the right way to express it in a disease like MPD, which is a challenging disease to work and is based on a couple of features one is based on the basic pharmacology of <unk>.

Which has a unique mix of <unk> II specificity and other features that Lee clinically to what's been described as a brightening.