Q4 2022 Abbvie Inc Earnings Call
Speaker 1: Thank you for standing by. Welcome to the Abbey Fourth Quarter 2022 earnings.
Speaker 2: conference call. All participants will be able to listen only until the question and answer. Fortune of this call.
Speaker 3: But you may ask a question by pressing star one on your phone. I would now like to turn the introduce the call to Ms. Liz Shea, Senior Vice President of Investor Relations. You may proceed. Good morning and thanks for joining us. Also on the call with me today are Rick and Zalas, Chairman of the Board and Chief Executive Officer, Rob Michael, Vice Chairman and President, Jeff Stewart, Executive Vice President, Chief Commercial Officer, Carrie Stromb, Senior Vice President and President, Al Organicetics, and Tom Hudson, Senior Vice President, R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call are Scott Rents, Senior Vice President and Chief Financial Officer, and Rupal Sacker, Vice President Global Regulatory Affairs. Before we get started, I'll note that some statements we make today may be considered forward-looking statements based on our current expectations. Add the questions of these forward-looking statements or subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements.
Speaker 4: Additional information about these risks and uncertainties is included in our SEC filing. Add the address. No obligation to update these forward-looking statements except as required by law. On today's conference call, non- GAAP financial measures will be used to help investors understand Abuse Business Performance. These non- GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings release.
Speaker 5: Thank you Liz. Good morning everyone and thank you for joining us today. I'll provide perspective on our overall performance and outlook and then Jeff Kerry, Tom and Rob or you are business highlights pipeline progress financial results and 2020-23 guidance in more detail.
Speaker 6: productive year for ABB. We delivered four year 2022 adjusted earnings per share of $13.77 from reflecting double-digit growth.
Speaker 7: As I reflect on our 10 years as an independent company, we have made excellent progress evolving Abby into a leading biopharmaceutical company.
Speaker 8: There are also building a substantial portfolio of novel, heave and solid tumor assets for oncology.
Speaker 9: We expect continued robust performance in neuroscience.
Speaker 10: Second, we've established a product in it.
Speaker 11: Our R&D engine is discovered in developed.
Speaker 12: and have more than doubled our annual R&D investment since our inception.
Speaker 13: Lastly, he maintained a strong financial position.
Speaker 14: which we have increased by 270% since our inception.
Speaker 15: And we have also used it as capacity to pursue value enhancing business development. So augment our existing portfolio and pipeline.
Speaker 16: With these strong operating characteristics, we remain well positioned.
Speaker 17: to absorb the impact from the Emera Eloy and quickly return to robust sales growth in 2025.
Speaker 18: This guidance range contemplates the expected headwind from direct biosimilar competition with US U.S. sales down approximately 37%.
Speaker 19: which is at the lower end of our previous erosion projection.
Speaker 20: which we expect will collectively generate $11.1 billion of revenue.
Speaker 21: Revenue Pressure in E-Mont.
Speaker 22: affecting near-term performance, protections, fillers, and body conjuring.
Speaker 23: It's also important to note that well as possible 2023 could outperform our guidance depending upon the shape of the Emerald Rosenberg. We don't anticipate that 2024 earnings will be lower than the $10.70 floor of the 2023 adjusted earnings per share guidance which we are issuing today. In summary, we are executing well across our business and see numerous opportunities for a diverse portfolio to drive on term growth.
Speaker 24: With that, I'll turn this all over to Jeff. Jeff? Thank you, Rick. I'll start with the quarterly results for immunology, which delivered total revenues of more than $7.9 billion, up 19.5% on an operational basis. Skyrision-Rinvoker performing exceptionally well, contributing more than $2.3 billion in combined sales this quarter, reflecting operational growth of 70%. Skyrision continues to exceed our expectations, outperforming our initial full-year guidance by more than $750 million.
Speaker 25: to more than 28 percent.
Speaker 26: and are already achieving a total in-play patient share of more than 15%.
Speaker 27: In rheumatology, global prescriptions are ramping nicely across rain votes for approved indications. RA, PSA, Encolosing Spondylitis, and Non-Radiographic Axial Spa. We continue to see positive market share momentum in both the U.S. and across key international geographies.
Speaker 28: and a mid-teens in-placere in the U.S., which are both tracking in line with our expectations.
Speaker 29: Internationally, RINVOTE you see is now approved in 50 countries.
Speaker 30: with reimbursement discussions progressing in line with our expectations.
Speaker 31: This strong adoption in UC amongst U.K. gastroenterologist is very encouraging for RINVOC's potential and Crohn's disease as well. We are on track for U.S. and EMA regulatory decisions in the second quarter and are preparing for the commercial launch.
Speaker 32: In the U.S., we have secured broad formulary access for Humera, and composing more than 90% of all covered lives, which enables us to compete for patient volume at parity to bio-similars.
During now the hematologic oncology where total revenues were $1.6 billion down 11.2% on an operational basis.
In Bruvica Global revenues were approximately $1.1 billion down 19.5%.
with continued strong demand in both AML and CLL.
We are particularly pleased with the international performance driven by robust share gains in the EU and across Asia.
Ray Larr continues to demonstrate robust growth.
Raylar was also recently approved as an adjunctive treatment for major depressive disorder, marking its fourth approved indication and adding a new substantial opportunity for long-term growth.
and this is important with or without symptoms of anxiety.
We are also pursuing in the US commercial approval for Qlypta as a preventative treatment for patients with chronic migraine.
which would further strengthen our competitive profile.
Rounding out the migraine portfolio is Botox therapeutic, a unique treatment with a dozen approved therapeutic indications and the clear branded leader in chronic migraine prevention.
and a billion dollar plus peak sales opportunity.
Thank you, Jeff. Full year 2022 global aesthetic sales were approximately $5.3 billion. Reflecting growth of 5% on an operational basis.
Global Botox cosmetic sales were approximately $2.6 billion of nearly 21% operationally, and Global Juve at-erm sales were approximately $1.4 billion, down roughly 2% operationally.
In the US, we began to see a slowdown in aesthetic procedures in the second quarter of last year, which coincided with the softening in economic metrics.
Similarly, US Jewelterms saw strong growth in the first quarter of the year, but still their market declines throughout the second half of the year resulted in full year sales being down approximately 17% versus a robust 2021.
While we have not seen major improvements in these metrics, data over the course of the last several months has shown stabilization.
It remains difficult to predict the duration of these economic headlin, but as Rick noted, we have modeled them to persist through the end of 2023.
International Botox cosmetic sales of nearly $1 billion were up approximately 29% operationally, and International Juvenile Sales grew approximately 9% on an operational basis.
While our aesthetics portfolio in China continues to be impacted by COVID-related headwind, the current wave appears to have peaked. We expect the situation to improve through the first half of 2023 with full recovery in China beginning in the third quarter. In the first quarter, the current wave appears to have peaked.
Despite the transitory challenges we're facing, we remain confident in the long-term outlook for our aesthetics portfolio.
We have a series of new technology products launching this year to drive growth in the aesthetics market and support our customers and consumers.
And Japan, which is growing rapidly and is expected to be one of our fastest growing markets in 2023.
Additionally, we are focused on delivering new product innovation.
With that, I'll turn the call over to Tom.
We expect significant program advancement across all stages of our pipeline this year. In immunology, we continue to make very good progress with programs in our core diseases, as well as in adjacent areas of rheumatology and dermatology, where we are extending our portfolio.
We're nearing completion of SCAR-RISI's Registration Program in Alps sort of Calitis, which is the last major indication expansion program for SCAR-RISI.
Results from these studies will add to the body of evidence supporting scaris as a best in category agent in these indications.
We're also nearing completion of the core indication expansion programs for RINVogue. Our regulatory applications for RINVogue and Crohn's disease are under review and we anticipate approval decisions in the second quarter.
Our Phase 3 program is already underway in one of these indications, Giants' cell arthritis. And later this year, we plan to begin Phase 3 studies for four additional diseases, systemic lupus, hydrodynamitis, suprativa, reteligal, and alopecia aeroyata.
Moving now to our oncology portfolio, where we expect several important to regulatory and clinical milestones this year.
Results from these studies are expected to support regulatory submissions in the second half of the year for Ben Kleksta and Navidiklaks in their respective indications.
We also anticipate regulatory approval of this year for EPCORITIMAP in real-assure fractures, large B-cellum formah in several major geographies, including the U.S. in the second quarter, and in Europe and Japan in the second half of the year.
We believe that EPCRIDIMAB has the potential to become a core therapy for B cell malignancies.
and multiple phase 2 studies in CLL and MCL.
Now moving to our solid tumor pipeline. We remain on track to see data later this year from our Phase II study evaluating Teliso V and second line plus advanced non-squamous non-small cell lung cancer.
Our Phase 3 Contributorist Study in Patients with Over-Express C-MET is also ongoing.
which represents approximately 25% of the non-small cell lung cancer population. We believe TellizoV has the potential to become an important new treatment option for these patients.
We're also making good progress with our next generation C-MAT ADC, AVV-V400, which utilizes a more potent TOPO-Oizomberies inhibitor payload.
elsewhere in the Solitude RepiPlanet. We have begun to see their encouraging data from several programs, which we plan to advance into Phase II studies this year.
We also plan to advance ABBV 647 into Phase II Doors Optimizing Study this year based on the promising results from our early stage program.
We're very excited by this approval and pleased with the label which highlights real our strong benefit risk profile in this indication.
This innovative approach to delivering dual-per-like efficacy to a subcutaneous delivery system represents a potentially transformative improvement to current treatment options.
with a less invasive, non-surgical delivery system. It also has the potential to significantly expand the patient population currently addressed by DUOPA, or...
We remain on track for approval decisions this year in both US and Europe . In the US, we anticipate approval in the first half of the year with product launch expected in the second half after we secured reimbursement.
And in the area of migraine, we remain on track for an FDA approval decision in the second quarter of this year for Calypta.
as a preventive treatment for patients with chronic migraine.
If approved, this would be another differentiating feature for colipta, as it would be the only oral CGRP approved for prevention in patients with chronic migraine.
This is a common and debilitating disease that significantly impacts quality of life, and we look forward to making this new oral treatment option available to patients once approved. And in our aesthetics pipeline, we expect to see results this year from several toxin programs.
As well as data from our Phase III study for Botox in Massive Muscle prominence, where we expect to submit regulatory applications in certain international markets in the second half of the year, including China and Canada.
Starting with fourth court results, we reported a just at earnings per share of $3.60, which is $0.7 above our guidance midpoint. These results include a 13-cent unfavorable impact from acquired IPRD expense.
So, in that revenues were $15.1 billion, up 3.8% on an operational basis, excluding a 2.2% unfair will impact from foreign exchange.
This includes a just-at-gross margin of 86% of sales, a just-at-RD investment of 11.5% of sales, acquired IPRD expense of 1.6% of sales, and a just-at-SNA expense of 20.8% of sales.
During to our financial outlook for 2023, our full-year adjusted earnings per share guidance is between $10.70 and $11.10.
We expect net revenues of approximately $52 billion.
At current rates, we expect foreign exchange to have a neutral impact on full of your sales growth. This revenue forecast comprehends the following approximate assumptions for our key products and therapeutic areas.
reflecting growth of more than 2.2 billion due to strong market share performance across all approved indications.
and humorous sales of $13.7 billion.
In hematologic oncology, we expect then to collect the sales of $2.2 billion and then move a revenue of $3.5 billion.
For neuroscience, we expect revenue of $7.2 billion, representing growth of more than 10 percent, including Botox therapeutic sales of $2.8 billion.
Vail ourselves of $2.5 billion and total oral CGRP revenue of $1.1 billion, including your brelvy growth of approximately 17.5%.
We forecast an adjusted operating margin ratio of 47% of sales.
This profile includes a 70-base point benefit that is fully offset in tax expense given the transition of Puerto Rico's ex-ice tax to an income tax effective at the beginning of this year.
including an impact of 1.3 points from the Puerto Rico Tax Transition.
At current rates, we expect foreign exchange to have a 1% unfavorable impact on sales growth.
On Collegiate Revenue of $1.4 billion.
Neuroscience revenue of $1.5 billion.
and I care sales approaching $600 million.
We are forecasting an adjusted operating margin ratio of 46% of sales and we model a non-gap tax rate of 13.3%.
We expect adjusted earnings per share between $2.39 and $2.49.
This guidance does not include acquired IPR&D expense that may be incurred in the quarter.
We expect to generate a just-at-free cash flow of nearly $19 billion in 2023, which is net of $1.4 billion in SkyRizzi royalty payments.
Our strong cash flow also provides capacity for continued business development to further augment our portfolio.
In closing, we are very pleased with Abby's strong results in 2022. And with our diverse portfolio, we continue to be well positioned to deliver long-term growth.
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. Thank you. Our first question comes from Mohit Banzal with Wells Fargo. Your line is open.
In some ways, you have always been playing defensive, given that sense andception, Humara has always been an issue. Now that you are beginning to get past that, do you think something you'll change fundamentally, you would want to change fundamentally with the company and the way you
You allocate internal versus external R&D spend. That would be very helpful. This is this is wreck. So it's a good question. We've always heard that question. I think there's a number of dynamics that play into it. When you look at R&D expense as a profile.
And so that obviously dilutes out the profile of the business.
The second thing I'd say is we obviously fund R&D at a level that we believe we can drive productivity. And I think if you look at our productivity over the last 10 years, the data I've seen suggests we are one of the most productive.
Certainly when you look at products like SkyWizzy and Rinvo, the return on those assets is tremendous.
We've seen some incredibly encouraging data out of that program thus far. It's the next generation, you know, on the energy program. They combine with checkpoint inhibitors.
And if that program continues to advance the way we see it now, we would want to expand our phase two and then phase three trials in that program significantly across the relatively broad range of solid tumors. That will require a significant increase in investment.
So we tend to drive R&D based on programs that we have, high-level of confidence. It can be productive, it can be successful, and we don't constrained R&D in any way from that perspective.
Another program will be our A-Baton program. If that program proves to deliver high rates of amyloid reduction and low area, that will be another program that will want to rapidly move into phase 3. And so I can tell you, I'm very comfortable with the productivity we're getting out of R&D.
and they go into the later stage development programs and they will drive further need for investment.
or obviously appreciate the color this year, but how should we think about 2024 dynamics in the US? Thank you. Thank you.
There's maybe all the start and then Rob can fill in anything that I might miss.
I would say this year you've seen that the range is a little bit wider than what we normally project.
And we did that based on the fact that, you know, as Femera goes by a similar, obviously very small changes in the assumptions we're making on erosion for the American have a fairly significant impact. So we widen the range by about 10 cents. And that's reflected in this guidance.
about when will we hit the trough and will it be 23 or will it be 24?
Based on this plan, the truck should occur in 2023.
is because the strength of the growth platform has the ability to win where it will grow in 23 and where it will grow in 24 to offset what will obviously be further erosion of Tumerra in 2024. In 2024 you will basically have...
So when you analyze that, you're going to have an impact that slows to room to 24.
And then we would expect further erosion of Humera, both price and probably to a greater extent volume in 2024. But the growth platform has the ability to grow through that based on those assumptions. And so that's the philosophy that we operate with on the guidance.
in Bruvica and Ben Kleck's to the CLE market, we did not anticipate that that market would actually not recover. I mean, that's actually down 20% versus pre-pandemic levels. And then we did see some additional share impact on Bruvica. And then as FedEx, we saw obviously, in the month of May, we started to see a slowdown in the economy. We had a very strong first quarter.
So both those things really are what drove the top line miss. We made earnings. Now we have factored both those things into the 2023 guidance to give investors confidence that we've set it appropriately. But we always look to set the most responsible guidance we can and we feel good about where we set 2023.
Great, thanks so much to two for me. We're just following up on the 2023 guidance being a trough number. It seems like you're still going to have about a $12 billion US Humara franchise here. So you just try to maybe a little bit more color of what you're envisioning 2024 to look like for Humara. Like, is it reasonable to think about another down?
35 to 40% year as we look up to 24. I think we're just turning our hands around just the how much growth in that core platform, you know, and how much of a headwind, I guess, you know, is going to be facing at the same time. My second question was just on aesthetics trends as we move through this year. I think you've talked about some signs of at least.
pricing is in the contracts that we put together. And so I think that's something that we have a high level of confidence. There will be further pressure on price as we move into 24 and there will probably be further pressure on volume in 24.
And that's one of the things that allows us to be able to see.
The underlying growth from the growth platform. So a number of things happen between 23 and 24 and then 25 as we move forward. As you mentioned in your second comment, we would certainly expect that the US economy will start to recover in 24.
It may recover earlier than that and if it does, that would be great. We didn't want to put a plan together to assume that because obviously that's difficult for us to predict. But I think we would all expect that 24 will see a recovery in the U.S. economy and we would fully expect for the aesthetics business to return back to historical growth rates.
very quickly when that happens. And so that will be another opportunity for that business to be able to grow. And I would say in Brubica is the other key issue for us as we move forward. We really expect the majority of the erosion that we see on in Brubica will occur this year. And so that will be another opportunity for that.
Well, I would tell you, even though I don't want to make a prediction in 24 of what QMARO will look like, I think we have a high level of confidence that we have the ability if the erosion curve looks like how we've modeled it now between 23 and 24, that we have the ability to have the growth platform growth through that, so we can absorb that impact.
In the second half, you'll see because we've contracted rebates, you'll see a step up in the price erosion. Although you also will see more volume with nine biosolvers coming in the market in the middle of the year we would expect more volume erosion. I think as we think about 24, we would expect based on the contract to see a step up in price, but I'll be at not the same level.
I reflected in their practices, market research with consumers where they said yes, we're interested in the category that we want to see what's going on with the economy, perhaps before a new patient might want to enter the category. And based on that, we are modeling for those trends.
continue in 2023. And what that means for US talks and market is the market growth would be around a mid single digit decline for US filler market around a 10% decline. And like we said, those growth rates would be different by quarter as we lost LAPA strong first part of the year.
Thanks, Chris. Operator, next question, please. Thank you for your question. Our next question is from Gary Nockman with BMO Capital Markets. Your line is open. Hi, good morning. First question is on NURRO in the quarter. It's actually weaker than we thought. So, was there any additional pressure?
annual cap on business development that you have more capacity to do deal. So how much capacity do you guys have? What areas are you looking to be most aggressive and how important is it to add sizeable marketed products into the mix or would it be mostly focused on pipeline? Thanks
for Raylar that we would anticipate a pretty rapid inflection in adoption for the depression indication, the junk of depression indication. As I mentioned in my remarks, that's what we've seen. So we're quite encouraged. I mean, we can see significant trend break on the new prescription adoption.
would be good opportunities for us and then we look to see if we can find those kinds of assets. As I mentioned before, I think we're in the fortunate position that we can drive very strong growth with the assets that we have on the market today, as well as what's coming out of our pipeline over the next three or four years. That gives us the ability to be able to return to growth and then drive that high-sum of digital growth through the end of the decade.
cap in place when we get the allergina acquisition. That allowed us to focus again on some earlier stage assets and I'd remind everyone that was about four times where our historical practice had been for those kinds of assets. So it was plenty of capacity to do that.
But we're certainly in a position now that the right thing were to come along. We could do a transaction that would be much larger. We certainly have the financial wherewithal to be able to do that. And we certainly shown that we were able to do that and create value in the assets that we bring in.
The areas that we typically look in are aligned with our therapeutic growth areas. So immunology, oncology, certain areas of neuroscience, and I care, I would say, are the predominant areas as well as aesthetics. We obviously continue to look for opportunities in aesthetics. They tend to be smaller acquisitions though. And so, at the end of the day, I feel good about where we are and we've been quite active. We have a very active business development group.
and we'll continue to look at those. And like I said, if we find something that's of interest and it could really help us round out a category that we're in, then you should expect us to act on that.
Thanks, Gary. Operator, next question please. Thank you for your question. It comes from Carter Gold with Barclays. Your line is open.
Great, thank you. Thanks for taking the question. Maybe to come back to aesthetics, it does sound like you built in, you know, conservatism on a number of fronts. Wanted to also, you didn't touch as much around sort of China reopening and how you expect that sort of business to, it just comes back if you expected to sort of return to how it was or if that will evolve differently. And then, um,
I guess disappear going forward. Thank you. Mary, why don't you touch on the aesthetic question? Yes, so your question around China, and I'd say, you know, China is our second largest global business. It has demonstrated significant growth in the past few years and proven to be very.
responsive to the increased promotion that we're putting into that market. Of course, in 2022, China, a COVID-related issue did impact the aesthetics market, but especially in the second and fourth quarters. Now, as we look at the year beginning in China and as everyone.
in the market in Q3 and for the last, the second half of the year. So, despite the challenges in 2022, China still posted positive growth and we will definitely be continuing our investments in China in 2023 and beyond. Thank you. I think Carter, this is Rob, I'll try to answer your second question. I think the way to think about...
Clearly as we go through the year, we always look at the trends and contemplate what that could mean for floats rather than 24. But the reason we gave you that guidance range, we mentioned that the 1070 being the way to think about it as a floor for 24 is because of the dynamics around the humerus erosion. So if we do better in 23 and more of it happens in 24, then you can at least anchor back to, we're not going to fall below that.
I think you should think about Humera in 24 that we believe we're going to get to a certain level of price and volume in 24 almost regardless of what happens in 22 because of the competitive dynamics.
And so when we talk about the shift, what we're really talking about is inflating 23.
If you anchor 24, they solid point that we have a high level of confidence of where humorous tail will be in 24. And the only thing that happens to shift it between 23 and 24 is if we do much better in 23 than we expected. So that's in plate 23.
but it's so anchors against the 24 point. That's the way to think about this. Thanks, Carter. Operator, next question, please. Thank you for your question. It comes from Steve Scala with Cowan. Your line is open.
Thank you so much. The low end of 2023, guidance implies 22 percent EPS erosion. The high end of Q1 guidance assumes 21 percent EPS erosion. How is it possible that Q1 could be in line with the full year and not appreciably better? Thank you.
It seems as though the Q1 guide is low, or is that because Avv believes the floor on Humira price is already reached? Maybe another way to restate the question. What should be our anticipation for the quarterly cadence of EPS as we go through the year? Thank you. Steve, so I think the best way is...
It's one anchor on the guidance we gave you on US Humor today. So we said for the first quarter, we said it would be 27% erosion. And that's going to, you know, the vast majority of that will be price. And we said because there'll be nine biosolvers coming to market in the middle of the year, we would expect more of the erosion and coming the second half of the year. So you have to factor that dynamic into the way you look at the quarters that there'll be more erosion.
in the second half of the year for humor, first half of the year. Then you also have to factor in that you've got things like an aesthetics, but we haven't quite laughed the economic impact yet. So in the first quarter, you have a dynamic where you will see aesthetics still down. But when we get into the middle of the year, when we laugh it, that also affects your growth rates.
And then the underlying performance of the growth platform, as we continue to drive those brands, you'll see those growth rates accelerate. So those are all the things I would factor as you look at. The quarterly, really, we've given you Q1 and then full year. We haven't given you Q2, Q3, and 4. But those are the variables I would look at.
Thank you for your question and we'll come from Tim Anderson with Wolf Research. Your line is open.
Thank you. I'm going to talk to you with a couple more questions on the same subject of others. The US Humeera erosion guidance of minus 37% and 23%. How much of that is price versus volume? If I look at what your Q1 US Humeera erosion guidance of minus 38.
Humor or Ritrogen is, so the guidance is minus 27%. Given that volumes for Humor or call it 5% positive, that would suggest the price cuts maybe in the 30 to 35% range. So can we triangulate off of the Q1 guidance to understand what percent of that minus 37% comes from price?
So Tim, on your question related to price and volume, the way to think about it is, in the first half of the year, the 27% of the first quarter,
And then your question on 24, is your question in terms of the percentage or the absolute?
The criticism is Rob, I'll take your first question. I think for modeling purposes, I would expect Opera Margin stay roughly at this level in 24 and then begin expanding again in 25 with our return to robust sales growth. I think the pace of that expansion will depend on investment needs as we will always prioritize R&D and S&D investment to drive long-term growth, but that's the best way to think through.
24 and then what's how pretty marginal look like in 25 and beyond. Chris is Jeff. I'll maybe kick off on your immunology question and ask Tom to comment on some dynamics as well. It is very, very clear that certainly in the midterm, the most excitement across these immunology categories are for SkyRizzi and RinVoke.
It's quite striking. And I think Tom mentioned there's still incredible interest in the next wave of dermatologic indications that follow on for atopic dermatitis study he highlighted. And really as I noted in my remarks, I mean the amount of excitement around.
Sure, I mean I think that the just want to start saying that with Skyrision and Rhinvoke really raised the bar in terms of efficacy and you see you know what's the because of healing for example. So the bar is getting higher and we will continue to do that but even to show that we're raising the bar we're also going to do we're going to read out head to head studies this year with the Lara.
cardiovascular and others that are similar to what we've seen with previous ones. So, I mean, again, without having seen the data, it's all difficult to kind of predict how they'll be able to do except that our data with wind broke and SkyRizzi are very strong, durable and again very strong at the level of endoscopy also. So, we think we have already a competitive edge.
Thank you for your question. It comes from Colin Bristow with UBS. Your line is open.
Hey good morning and thanks for taking the questions and for all the help for Colour so far. So maybe a broader question just with God's humour of advice similar. I'm curious what is the broader impact you anticipate on the I and I market in terms of net price? This has been sort of...
a question we've been getting a lot of people are trying to wrap their heads around. And then maybe just one on your CF triplet. I know the trials ongoing. Can you give us an update here? How's the progress? Should we still expect data later this year? Thank you. I'll take the one on the immunology marketplace.
wrap their heads around. And then maybe just one on your CF triplet. I know the trial's ongoing. Can you give us an update here? How's the progress? Should we still expect data later this year? Thank you. I'll take the one on the on the immunology marketplace. I think that
You know, the impact overall on the category for net price would be modest. And I think a lot of it has to do with what Tom and I have discussed before, which is just the pure profile of some of these agents, particularly SkyRizzi and RinVoke and either others in the pipeline that are coming. I mean, they really are setting different standards of care versus what they've seen in the past and certainly the physicians and the payers are recognizing this. I'll give a really quick example on one of our major products, which is RinVoke. I mean, RinVoke, based on the label changes that have taken place, is already a post-TNF type of dynamic.
And where we believe that two of the three components of for this drug, this triplet, we have best in class assets. But we were looking for another part of the triplet called a C2 corrector. We're last year, other previous ones basically didn't give the meaningful improvement. We were expecting in FVV1 or sweat chloride. So we've actually in our discovery groups continued to develop new ones.
We'll have data this year to actually show how they behave together and later this part of the tool I'll be able to give it up there. Thanks Colin. Operator next question please.
It's just becoming an increasingly complicated pricing environment. There are a number of reforms being proposed in Europe . So I guess my first question is, do you see these changes being material or any headwinds to you in your growth XUS?
And frankly, it was a policy decision because we really think that the UK government needs to reform that V-PASS. They didn't plan properly for how things might dynamically evolve in the UK, and it's a very substantial part of the revenue now that is causing problems, I think, across all of the companies.
It was a position of policy position. Net neutrality didn't matter, frankly, whether we were in or not in the UK as a relatively modest business for us. We are seeing, perhaps more importantly, some changes in the German law, as you're probably aware of. And that is, I think, a modest net pressure that will come in Europe or in Germany in particular.
because there's the move, as you may know, from one year of free pricing to six months. There's a modest increase in rebates, for example. So we do see some austerity impact, but on the bigger scheme, I wouldn't say it's material to our growth platform that we've been discussing. And trying to this is Rob, in terms of international pricing, I mean, typically we see year-over-year decline of low-to-mid-single digits, and that's the way we're modeling it for 23 as well. And then on farm and Mrs. Rec, obviously every year we evaluate any kind of significant investment that we're going to make.
And we make a decision as to whether or not we believe that investment is appropriate and is going to have the right level of return at that point in time. And ultimately, we made the decision around far on the base on that. We have a very significant government affairs group that's been active and been in place ever since we came into existence back in 2013. We've grown that organization.
We did grow it somewhat this year as well, anticipation of not being part of pharma. We plan on being active as we have been in the past. We try to appropriately advocate for things that we think are appropriate for patients. And I think that group is quite capable of being able to do that. And I would tell you that we tell you that.
At a point in the future, we might decide to go back in the bar. But at this point, we made the decision that we think that investment could be used elsewhere It's as simple as that. Thanks, operator, next question, please.
Thank you. Our next question is from Jeff Meacham with Bank of America. Your line is open. Morning guys. Thanks so much for the question. I appreciate all the perspectives on guidance. I just had a follow up on it. Rick, on your comment on the Humera scale for starting next year in the US, I think when you look at other geography, international revenues, you're still seeing, you know, double digits of lines after four years or so. Maybe just give us some context for...
You know, what you're seeing there broadly versus what we could expect of it, whether the U.S. and just to be clear, when you see next year the impact from all the Meriby similar, how much do you think that similar Stilara may play a role here when you look at your assumptions for Merero-Rosion? And then second question, just on the BPD front, you guys talked about.
So I think on the humoric tale just to maybe clarify what I said is I would expect that as we move through 2024 that in 2025 and 2026 we would start to see
You know, you had different countries going by or similar at different periods in time. So you can't necessarily look at that as an analog because it's so heterogeneous in the year that those countries went by or similar. So you are correct. Yes, it is still experiencing double-digit lines, but it's being driven by the fact that those countries have not, some of those countries have not reached stability yet. But typically, and the US markets are a little different because you have all...
a large number of, you have a small number of large payers who drive the bulk of the activity in this market. So it's more like some of the countries that did other kinds of...
Jeff, this is Rob just to add to that. So if you just look at this year, so about half of the erosion is going to come from newer markets like Puerto Rico, Canada, and Mexico. So that is Rick mentioned. We have different waves. And so you're still seeing some of those waves come through. You also have some volume going to new agents like Skyrision Rimbo, right? So that's something to keep in mind that, you know, that's a dynamic that's also playing out for a Humor on those markets.
And then you took me to see negative price trends in international markets, again, low to mid-single digits, so you're going to see some level of pressure there. So those are all factoring into the year-over-year international, you merit something to make sure you're keeping in mind. If you look at the Stolara dynamic with the biosimilar, I think there's a couple of dynamics that we're watching. And it does go back to my prior comments over the clinical differentiation.
So we think we can parry quite well with the ultimate arrival of that IEL, the 1223 versus our pure 23s.
I think on your third question, again, what tends to drive our BD strategy is the long-term strategic roadmap that we put in place across the franchise. So if you think about it, you mentioned immunology as an example. I would say in immunology we have two fundamental objectives that we're trying to drive.
And then we look outside those areas at the adjacent seas.
And we look for where are the opportunities for us to be able to bring in either existing mechanism or something we can either develop within our own discovery group or something that we can acquire on the outside as a mechanism that we currently have. But we tend to look for where there are areas of large ummet need and relatively significant patient populations. So I use two examples to illustrate the point.
So that's how we focus BD in these areas. That's not to say we would never look at a more new shop opportunity or an old opportunity, but I wouldn't say orphan is something that is core to our strategy. Thank you.
I'm Ditalygo, maybe Jeff and I will tag TeamLight. I would certainly say a topical has a place, but it is difficult for people that have large areas of their body that are impacted by something like Ditalygo for a topical to be a
build on that. When we look at the valuation of, for example, that indication or H.S. or alopecia, which again are those derm-oriented indications that will follow on pretty quickly in the middle of the decade on top of a topic dermatitis, we do exactly what Rick highlighted is we will segment the patients based on the body surface area.
And we would anticipate that as well above a base case scenario. Perfect example is Crohn's disease. You know, there will not be another Jack inhibitor in Crohn's disease for the United States just because they just don't work. And yet you have spectacular results with the selective Jack with Rinboq. So we take that all into that competitive context.
you actually have effects, the cardiovascular effects, having related to the TGF data activated in some of the endothiose cells in the valves and so on, of the heart. Here, we're using Garp as our target. Garp is actually a receptor for TGF data. That's called latent.
We'll have baskets to actually continue to explore its indication space. But right now we're expanding, when we're going to face those learning studies, it's indications where we've actually seen data in our phase one study. Thanks, Robin. Next question, please.
Thank you for your question. It comes from Simon Baker with the red burn. Your line is open. Thank you very much for taking on our questions. Two if I may please. Just going back to US Humila, giving us the expected erosion is extremely helpful. It's also extremely impressive that you feel confident enough to give a point estimate for the percentage erosion in 23. So, notwithstanding that, I wonder if you could give us what the likely pushes and pulls us, is this something where we should be thinking more about?
with the with Amgion and other segments of their own business. They were often moving around the list prices as well. So all in all, you know, within the range that we would expect from Amgion. This is Rob, I'll take the question on that leverage. So the two times is, think about it as our sustainable.
Hey, thanks for squeezing me in. I wanted to confirm if you were planning to submit the in Bribica plus bank collect stuff frontline CLL combination to the FDA following the ash this year. And then on 9-5-1 in Parkinson's, we saw top line data from competitor in last month. I don't have the full data yet. One thing that sticks out is that they are lower discontinuation rates. So you're just wondering if there's any insight on devices or trial design that may explain this. Thank you.
A 951, you know, this is interesting on the competitors you bring up. So when you run these patients in, you could have discontinuation rates. And if you include them or not include them, it's going to impact what happens post-run-in. So for example, when you see our data set, we count the run-in, discontinuation, and post-run-in as you get into the main part of the trial.
Jeff Stewart, Executive Vice President, Chief Commercial Officer, Kerry Strom, Senior Vice President and President, Al-Arganistetics, and Tom Hudson, Senior Vice President, R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call are Scott Rents, Senior Vice President, Chief Financial Officer, and Rupal Thacker, Vice President Global Regulatory Affairs. Before we get started, I'll note that some statements we make today may be considered forward-looking statements based on our current expectations. If you're interested, then, accept from the Director of the Documentary Chief of Administrative Accountant