Q2 2023 AbbVie Inc Earnings Call
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, Rob, Michael President and Chief Operating Officer, Jeff Stuart Executive Vice President and Chief Commercial Officer, Scott <unk> Executive Vice President and Chief Financial Officer, Carrie Strom.
Senior Vice President Abby and President Global Allergan, Anesthetics, and Tom Hudson Senior Vice President of R&D, and Chief Scientific Officer joined.
Joining us for the Q&A portion of the call is ripple Becker Senior Vice President development, and regulatory Affairs, and Chief Medical Officer.
Before we get started I'll note that some statements. We make today may be considered forward looking statements based on our current expectations Abbvie cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in our forward looking statements.
Information about these risks and uncertainties is included in our SEC filings Abbvie undertakes no obligation to update these forward looking statements except as required by law.
On today's conference call non-GAAP financial measures will be used to help investors understand abbey's business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website.
Following our prepared remarks, we'll take your questions so with that I'll turn the call over to Rick.
Thank you Liz good morning, everyone and thank you for joining us today.
2023 is an important year for Abbvie as we experience Humira biosimilar competition in the U S market.
As we execute our long term diversification growth strategy.
No roughly seven months into the year I'm extremely pleased with the progress that we're making against these objectives.
The U S. Humira biosimilar impact is playing out as projected and slightly better than our planning assumptions, we are competing very effectively with the various biosimilar offerings.
We have exceeded our guidance in both first and second quarters with the over achievement predominantly driven by our growth platform based portfolio excluding humira.
Which as you know is the critical driver in a rapid return to growth in 2025 and beyond.
To that point as.
This platform demonstrated operational revenue growth of nearly 8% this quarter with growth expected to further accelerate in the second half of this year.
Across all stages of development.
Including recent strong data prescribed <unk> in ulcerative colitis as well as the recent U S approvals for <unk> in Crohn's disease, and have kinley and relapsed or refractory <unk>.
Important new therapies for patients.
So in summary, I'm extremely pleased with the strong momentum and execution across the business.
Reinforces our confidence in our ability to return to robust growth in 2020, but with high single digit compounded growth rate to the end of the decade with that I will turn the call over to Rob for additional comments on our business performance Rob. Thank you Rick Abbvie delivered excellent results once again this quarter.
We are demonstrating strong execution across our business with each of our five key therapeutic areas, beating expectations. We reported adjusted earnings per share up $2 91.
Which is <unk> 11 cents above our guidance midpoint.
Net revenues were nearly $13 9 billion more than $350 million ahead of our guidance with the vast majority of the beat coming from our ex Humira growth platform.
In immunology Sky <unk> and RIN bulk are demonstrating impressive growth with sales for both therapies up more than 50% versus the prior year.
These two agents have achieved differentiated clinical profiles, including head to head data versus Humira and other novel therapies Sky.
<unk> are now collectively approved across 10 large indications and we are forecasting combined revenue growth of more than $3 $5 billion. This year with.
With ongoing programs and several additional disease areas, we expect both <unk> and <unk> to deliver robust growth into the next decade and significantly exceed Humira peak revenue.
U S. Humira is also performing well with first half erosion coming in better than our expectations due to volume.
We have been carefully analyzing the biosimilar marketplace, where the total number of competitors has now expanded to eight.
While many of these biosimilars have been added to payer formularies Humira continues to maintain strong parity access base.
Based on the volume trends and parity access we now anticipate U S. Humira erosion of approximately 35% an improvement of two points versus our original guidance.
Neuroscience is another area that is outperforming expectations based on our current run rate. This portfolio is now on pace to add more than $1 billion of incremental revenue. This year with continued strong growth from <unk> as well as our leading migraine portfolio.
In aesthetics. The outlook continues to improve we delivered positive growth this quarter driven by strong international performance and stabilizing trends in the U S. These positive trends give us the confidence to once again raise our full year guidance for aesthetics and as a clear marker.
Leader, we are focused on expanding the aesthetics category with increased commercial investment and continued innovation to support robust long term growth.
Given the strong and balanced performance across our diverse portfolio, we are raising our full year adjusted earnings per share guidance by 23.
And now expect adjusted earnings per share between $10 and 90.
And $11 and Tencent.
In closing our operational execution has been outstanding and we are very well positioned to deliver on our commitments in 2023 and beyond.
With that I'll turn the call over to Jeff for additional comments on our commercial highlights Jeff. Thank you, Rob I'll start with immunology, which delivered total revenues of $6 $8 billion exceeding our expectations <unk> continues to perform exceptionally well global sales were approximately $1 $9 billion, reflecting.
Very strong operational growth of 51%.
Our performance in psoriasis continues to be impressive total prescription share in the U S. Biologic market is now at 32% double the share of the next closest biologic therapy.
When you consider that sky riskiest, capturing roughly one add up to every in play patients, which are either new to therapy or switching there remains substantial opportunity for continued robust sales growth.
And based on the available clinical data, we are seeing from emerging competitive therapies in psoriasis psoriasis, including oral <unk>, we feel very confident in <unk> long term potential with robust sales growth expected through the early part of the next decade.
We are also seeing very nice prescription growth in psoriatic arthritis, especially in the U S. Dermatology segment, where <unk> is approaching the leading new patient biologic market share.
<unk> momentum across Psoriatic disease is very solid globally as well with total in play share leadership in nearly 30 key countries.
Turning now to IBD, where sky Ritchie has demonstrated a very compelling clinical profile, including strong endoscopic data paired with convenient dosing ups.
Uptake in Crohn's disease has been rapid with total in play patient share of approximately 25% in the U S. Roughly at parity leadership with still Laura.
This uptake is very encouraging for <unk> potential in ulcerative colitis, where we recently reported positive maintenance data with approval and commercialization anticipated next year.
Given the momentum we're seeing across all of the approved indications, we will be raising our full year sales outlook for <unk>.
Moving now to <unk>, which delivered global sales of $918 million, reflecting operational growth of nearly 57%.
Key element of <unk> success is its strong differentiation. It has now approved across seven distinct indications, including four in rheumatology to an IBD as well as atopic dermatitis.
It's the only JAK inhibitor now approved to treat both crohn's disease, and ulcerative colitis, and we have established strong and broad commercial access for each of the core diseases with formulary coverage for Crohn's expected to ramp quickly over the next months.
As it pertains to <unk> performance, we are seeing increasing prescriptions across each of the room indications globally.
Further market share momentum in atopic dermatitis, including now high teens in play patient share in the U S.
And robust uptake in IBD, where RIN book has demonstrated strong rates of remission and endoscopic improvement.
<unk> is now capturing roughly one out of every four in play ulcerative colitis patients in the second line plus setting.
And the early data for Crohn's, which launched just in May also shows a very strong ramp in new patient starts we remained well positioned for continued momentum in this new indication as the only JAK inhibitor approved to treat crohn's disease.
This level of performance along with the development of ongoing projects across several other diseases, such as giant cell arteritis, and systemic lupus and rheumatology and multiple additional derm indications reinforces the long term potential for RIN book with strong sales growth expected through the early part of the next decade.
Global Humira sales were $4 billion down 24, 8% on an operational basis due to biosimilar competition.
Erosion in the U S remains slightly better than our expectations due to volume with the vast majority of the impact this quarter driven by price.
Turning now to hematologic oncology, where total revenues were approaching $1 5 billion and <unk> global revenues were $907 million down 28% consistent with our expectations.
<unk> global sales were $571 million up 15% on an operational basis with strong demand for both cielo and AML.
And we were particularly pleased with the international performance here following continued reimbursement progress in the EU and inclusion in China's national reimbursement list.
We also recently received the U S approval for <unk> in third line plus <unk> further expanding our on market portfolio and heme Orca early prescription trends have been encouraging.
With a more robust opportunity to expected as we progressed development in earlier lines of therapy.
We also anticipate approval and commercialization in Europe , and Japan later this year.
In neuroscience revenues were nearly $1 9 billion up 14, 2% on an operational basis.
<unk> continues to exceed our expectations.
<unk> of $658 million were up 33, 9% on an operational basis with increasing momentum across all indications following the <unk> approval late last year.
Within migraine, we remain the clear market leader with unique treatment options for both acute and chronic conditions or oral <unk> portfolio contributed $292 million in combined sales this quarter, reflecting growth of more than 30% as we continued to see strong prescription demand for.
For both <unk> and <unk> Liptak.
Lastly, total botox therapeutic sales were $748 million up 11, 3% on an operational basis, reflecting nice momentum in chronic migraine as well as other approved indications.
This franchise continues to outperform our expectations and we will be raising our full year guidance for the collective neuroscience portfolio.
So overall I'm extremely pleased with the performance and execution across the therapeutic portfolio with growth expected to accelerate through the second half of the year.
And with that I'll turn the call over to Kerry for additional comments on aesthetics, Eric Thank.
Thank you Jeff.
Second quarter global aesthetic sales were approximately $1 4 billion up two 9% on an operational basis with strong performance from our international portfolio offsetting the economic impact in the U S.
U S sales were $829 million down six 2% our U S portfolio continues to perform well from a competitive perspective and as expected. The aesthetics markets continued to be impacted by lower consumer spending related to inflationary pressures, which weighed on year over year growth rates.
U S. Botox cosmetic sales were $420 million, a decline of six 5% versus the prior year.
While the U S cosmetic toxin market declined low single digits in the second quarter on a year over year basis growth rates improved through the quarter with June showing a return to positive year over year market growth.
Botox cosmetic continues to be the clear market leader, maintaining strong and stable share despite new competitive entrants.
U S. Juvederm sales were $125 million down 14, 5% on a year over year basis, as we continue to see a more pronounced impact from inflationary dynamics on higher priced more deferrable procedures such as seller.
U S solar market declined approximately 20% in the quarter on a year over year basis due to the persistent inflationary environment. Our Juvederm collection remains the market leader and share with favorable in the quarter.
The economic metrics that we track for the U S have largely stabilized our consumer market research shows a meaningful recovery from last summer and those intending to get treated with toxins and Hillary.
<unk>, we have now lapped the beginning of the market downturn, which occurred in the second quarter of last year based on these factors, we expect growth rates for the U S facial injectables to improve in the second half of this year.
Our international aesthetics portfolio continues to perform exceptionally well with strong results in many key markets second quarter sales were $555 million, reflecting operational growth of nearly 20% international.
International Botox cosmetic sales of $265 million increased approximately 14% on an operational basis and international Juvederm sales were $243 million up approximately 28% on an operational basis.
Growth in the Asia Pacific region, with particularly robust as aesthetic treatment rates in China have fully recovered to pre COVID-19 levels. We continue to anticipate strong normalized growth through the remainder of the year in China.
We are very pleased with the strong performance of our international aesthetics portfolio over the first half of the year and continue to expect a similarly strong results in the second half.
In the third quarter, we will be facing a challenging year over year comparison due to a shipment timing benefit we saw in the third quarter of 2022. This is expected to result in relatively flat growth for international portfolio in the third quarter.
On a full year basis, we expect our international aesthetics sales to grow high single digits.
We continue to invest to drive future growth for our aesthetics portfolio with a focus on enhanced promotional activities improved digital products and services through our Ali platform Salesforce expansion and injector training.
We continue to invest in our pipeline as well and we remain committed to our regular cadence of new product introductions and indication expansion for botox cosmetic and Juvederm, We recently announced the FDA approval Skin-deep. The first <unk> acid filler in the U S for improved skin smoothness of the cheeks.
Which along with our recently launched <unk> filler for jaw line Contouring will help sustain our leadership position in the U S solar market.
Our investments will allow us to maintain a strong leadership position in the highly underpenetrated and rapidly growing global aesthetics markets. We remain very confident in the long term outlook for our Fedex portfolio and continue to expect to deliver greater than $9 billion in 2029.
In the near term the improving aesthetics outlook in the U S and continued robust international performance gives us confidence to once again raise our full year aesthetics guidance with an expectation for continued operational growth over the back half of the year.
With that I'll turn the call over to Tom.
Thank you Carey, we've continued to make very good progress with our pipeline over the quarter, we had a substantial amount of activity across our R&D pipeline is resulting in new approvals and advancements of several programs.
The allergy, we received FDA approval for Rainbow can close disease, marking its seventh FDA approval across gastroenterology, rheumatology and dermatology.
In our <unk> development program, when both demonstrated a very rapid and strong impact on symptoms as well as endoscopic improvement.
Given its strong benefit risk profile, we believe <unk> will be an important new medicine for patients suffering from moderate to severe crohn's disease.
While closed disease approval marks the completion of the core indications. We believe <unk> has the potential to become a highly effective therapy and several additional important diseases. We recently began phase III studies for <unk> in systemic lupus and hidradenitis suppurativa.
We remain on track to begin phase III studies in alopecia reactor later this year. We'll also see data later this year from our phase two study in vitiligo, which could support advancement to phase III in this indication as well.
Moving to <unk>, where in the quarter, we announced positive topline results from our phase III maintenance trial in ulcerative colitis.
In this study <unk> met the primary and key secondary endpoints at week 52, compared to the withdrawal alarm demonstrating.
Demonstrating that patients continuing treatment with sky rizzi maintained high levels of clinical remission.
As well as more stringent endpoints, such as endoscopic improvement histologic endoscopic mucosal improvement.
And steroid free remission.
It is important to note that approximately 75% of the patients in this study had failed advanced therapy, including not only anti TNF, but also other biologics JAK inhibitors and this one <unk> modulators.
This represents a very difficult to treat population in ulcerative colitis Sky really strong performance in patients with and without failure to advance therapies.
Including patients who were naive to advanced therapy demonstrate its utility across the spectrum of moderate to severe UC patients.
We remain on track to submit our regulatory applications in the third quarter with approvals anticipated in 2024.
We also recently published results from a head to head trial, comparing <unk> to a tesla in patients with moderate psoriasis with <unk> demonstrated clear superiority to a Tesla on all primary and ranked secondary endpoints at week 16 and 52.
At week 52 of the study 64% of patients achieved absolute skin clearance as measured by past 100, and FPGA clear compared to just 3% for Tesla underscoring <unk> ability to drive very high and durable responses in these moderate.
<unk>.
In addition to higher clinical efficacy outcomes that patients treated with <unk>, which is a self injectable administered quarterly reported improvements in health related quality of life measures and greater treatment satisfaction compared to those treated with a Tesla, which is an orally administered twice.
Daily.
Additionally, Sky Sky, Rishi demonstrated favorable safety and tolerability compared to a Tesla.
The rates of adverse events, including serious and severe aes were numerically higher with the Tesla then with Sky rescue treatment <unk>.
Previous to a similar to previous studies, but Tesla treatment was associated with high rates of the gastrointestinal distress, such as nausea, diarrhea, and vomiting, which resulted in a 7% discontinuation rate in the first 16 weeks of treatment compared to no discontinuation.
<unk> for <unk> patients.
We're incredibly pleased with these results, which further underscores <unk> position as a best in category treatment for moderate to severe psoriasis, providing very high efficacy durable responses is safe and tolerable profile and convenient quarterly administration.
In oncology, we received accelerated approval in the U S where it currently as a monotherapy treatment for patients with relapsed or refractory <unk>, who have received two or more systemic therapies.
We also recently received positive <unk> opinion with an approval decision in Europe expected later this year.
<unk> is a very aggressive disease, where later line patients have limited options.
We're extremely excited to bring this new subcutaneous treatment option to patients.
In the quarter, we also announced positive topline results from the Follicular lymphoma cohort of our phase II trial evaluating <unk> in patients who have received at least two prior lines of therapy.
In this study at Kenley performed very well as a mono therapy, demonstrating an overall response rate of 82%. We are pleased with these results and plan to discuss these data with regulatory agencies about the potential to support a submission for accelerated approval.
Beyond the mid stage studies supporting accelerated approvals in later lines of therapy. We also have phase III trials ongoing in earlier lines of <unk> and Follicular lymphoma, and we look forward to providing updates on these programs as the data mature.
And our <unk> program. We recently saw top line results from the phase III transform one trial evaluating <unk> in combination with <unk> for patients with treatment naive myelofibrosis.
The study met the primary endpoint at week 24, demonstrating a statistically significant improvement in the percentage of patients who achieved spleen volume reduction of at least 35% compared to <unk> plus placebo.
For the primary endpoint.
<unk> combination showed a doubling of improvement over rux alone with.
With 63% of patients or the inevitable next combination achieving SVR, 35% compared to 32% in the rux plus placebo combination.
In this study.
Nevertheless combination did not achieve the first ranked secondary endpoint, which was improvement in total symptom score.
At week 24.
Additional follow up data on SVR and TSS as well as other endpoints are expected in the fourth quarter of this year, we plan to wait for these more mature data before engaging with regulatory agencies in order to have a more comprehensive picture of the patient's clinical response and clinical benefit.
<unk> can provide.
Looking to the remainder of this year, we remain on track for several additional data readouts from our late stage oncology programs, including phase III data from <unk> Canova trial in relapsed refractory multiple myeloma patients with $11 14 mutation.
As a reminder, this is an event driven study.
And we're just waiting.
With just a handful of the remaining events. So we would expect to have these data in house in the coming months.
And we remain on track to see phase II data for <unk> in second line plus advanced non squamous non small cell lung cancer in the fourth quarter.
We're also making very good progress with several earlier line earlier stage solid tumor programs. We recently initiated a phase II study for <unk> hundred five one our anti <unk> antibody inhibitor of cellular carcinoma and plan to begin phase two in several additional solid tumors over the course of the next one.
Months.
The recent <unk> meeting, we presented promising initial results from our phase one study evaluating our next generation <unk> ADC, a BBB 400, and several advanced solid tumor types, we're seeing responses across multiple tumors, indicating broad activity results in late line colorectal.
Patients with particularly encouraging where monotherapy treatment with 400 resulted in a confirmed overall response rate of 22%.
Well in excess of standard of care, which is typically less than 2% to 3%.
We're also encouraged by the durability of response seen in these already these are the results of these patients had an average of five prior lines of therapy. So this level of efficacy is very encouraging.
Based on these results we plan to start our phase II program later this year beginning with our second line colorectal cancer study.
Now moving to neuroscience, where in the quarter, we received a positive <unk> opinion recommending approval of a toy Japan for migraine prevention.
We anticipate a decision in the coming months and if approved <unk> would be the only oral <unk> antagonist approved in Europe for prevention of both episodic and chronic migraine. This is a debilitating condition that impacts tens of millions of people in Europe .
Look forward to making this new oral treatment option available to patients once approved.
Also in the area of neuroscience, AVP 906 hour a beta antibody for Alzheimers disease is rapidly advancing two dose escalation studies.
This antibody is demonstrating a long half life and very low antidrug antibodies, both important attributes to achieve a best in class profile for our a beta antibody.
Dose selection in phase II is expected to begin early next year.
And lastly.
Aesthetics pipeline, we recently submitted our regulatory application for Botox in messenger muscle prominence in China, which is the initial focus for our program given the prevalence of message of muscle prominence.
In Asian populations, and the significant unmet need for minimally invasive treatment options.
Participant prominence program for Botox, we remain on track to see data from two additional phase III studies later this year with our regulatory submission in the U S expected near the end of the year.
So in summary, we had.
<unk> had a very productive first half of the year across all stages and therapeutic areas of our pipeline and we look forward to the second half of 2023 with several important clinical and regulatory milestones with.
With that I'll turn the call over to Scott.
Thank you Tom I'm very pleased with the performance and outlook over the business, including the strong momentum from our ex Humira growth platform.
Starting with our second quarter results, we reported adjusted earnings per share of $2 91.
Which is <unk> <unk> above our guidance midpoint.
These results include a <unk> 15 unfavorable impact from acquired IP R&D expense.
Total net revenues were nearly $13 9 billion.
More than $350 million ahead of our guidance and down four 2% on an operational basis, excluding a 0.7% unfavorable impact from foreign exchange.
<unk>. These results reflect high single digit sales growth from our growth platform.
The adjusted operating margin ratio was 47% of sales this.
This includes adjusted gross margin of 84, 7% of sales.
Adjusted R&D investment of 12, 5% of sales.
Acquired IP R&D expense of 2% of sales and.
And adjusted SG&A expense of 23, 2% of sales.
Net interest expense was $454 million.
The adjusted tax rate was 15, 8%.
Turning to our financial outlook, we are raising the midpoint of our full year adjusted earnings per share guidance by 23.
And now expect adjusted earnings per share between $10 90 and.
And $11 10.
This guidance does not include an estimate for acquired IP R&D expense that may be incurred beyond the second quarter.
We now expect total net revenues of approximately $53 4 billion, an increase of $1 billion.
At current rates, we expect foreign exchange to have a modest unfavorable impact on full year sales growth.
This guidance includes the following updated assumptions.
With more than half of the sales improvement attributed to our ex Humira growth platform.
We now expect Sky Ritchie global sales of approximately seven 6 billion.
An increase of $200 million due to continued strong performance across all approved indications.
We now expect neuroscience sales of approximately $7 7 billion.
An increase of $300 million.
Reflecting robust prescription growth for <unk> following the <unk> approval as well as better than expected performance of Botox Therapeutics and <unk> Liptak.
First statics, we now expect global revenue of approximately $5 4 billion, an increase of 100 million.
Primarily reflecting momentum from botox cosmetic.
Lastly, we now anticipate U S humira erosion of approximately 35%.
Resulting in the sales guidance increase of $400 million based.
Based on volume trends and strong parity access.
Moving to the P&L, we continue to anticipate adjusted gross margin of 84% of sales.
And now expect adjusted R&D expense of $6 9 billion.
SG&A expense of $12 7 billion.
And an adjusted operating margin ratio of approximately 46, 5% of sales.
Turning to the third quarter, we anticipate net revenues of approximately $13 7 billion.
Which includes U S humira erosion of approximately 40%.
At current rates, we expect foreign exchange to have a modest unfavorable impact on sales growth.
We expect adjusted earnings per share between $2 80.
And $2 90.
This guidance does not include acquired IP R&D expense that may be incurred in the quarter.
In closing Abbvie has once again delivered strong top and bottom line performance and we are very pleased with the momentum of the business heading into the second half of the year with that I'll turn the call back over to Liz. Thanks, Scott 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, we'll take the first question please.
Zama demand Guggenheim Securities.
Hi, great. Thanks for taking my question.
One on just curious given the strong quarter.
Our guidance really it.
It sounds like you've talked about your floor EPS.
Is that do you still see a floor of $10 70 or is it different and.
Can you talk anymore at that point or when.
Is that happening and then my second question is also on IRI.
A lot of focus there I'm curious do you have any thoughts around and look at the person with the products around September one.
Do you expect and we have the products to be <unk>.
And that first group of Ken and then Im curious just on <unk>, specifically and how you see that might be at risk from Iraq, given youre going after a lot of lifecycle development there.
Is there a.
Our lifecycle may not be quite as long.
How are you thinking about prioritizing investing.
Paul molecule like <unk>.
Thank you.
Obama this is Rick I'll take the <unk>.
<unk> question and.
And maybe Robert can also tag team on the first one and the second one as well.
So if you look at the floor. If you step back and you look at how the business is performing obviously the business is performing extremely well.
A significant part of the over achievement is not the Humira business.
Fact of the $1 4 billion, we're raising.
As Scott said only $400 million of it is humira, so $1 billion of it is the growth platform.
So all of that speaks.
<unk>.
We have very strong momentum going into <unk>.
Into 2024.
And we've talked before on these calls about well one will drop your occur and as you think about the floor. I think you have to sort of think about the trough year at the same time, we've said in the past that.
We significantly over achieved in 2023 that would increase the probability that the trough in 2024, and we said that in the backdrop of primarily thinking about it.
As humira over achieving and obviously now what we're seeing.
It is the majority of the other products that are over achieving the growth platform.
So as we look at 'twenty, four and as we look at it.
The trough I think we have to let the year play out a little bit further to see where we're going but I would say that we.
We're feeling pretty we're feeling very good about 2004, and the growth of that non euro business could more than offset.
The overall performance that we're seeing this year, especially the over performance that we're seeing on Humira.
So it's too early to.
Raise the floor, but what I would tell you is the performance that we're seeing now gives us a tremendous amount of confidence of what 'twenty looks like Rob anything you'd add I'll just add that we have now collectively raised revenue guidance by $1 4 billion as Rick mentioned, we raised $400 million of first quarter $1 billion. This quarter. When you look at it its really across.
The key therapeutic areas that will drive long term growth, we've raised sky rosy.
Statics neuroscience and also a humira. So we do feel very good about the parts of the business.
We've debated when we update the floor that will come at some point may or may not come until we can actually give the Q4.
Guidance.
On the Q4 call of 2020 for guidance, but as we look at it the fundamentals of this are very very strong and we are seeing performance across all therapeutic areas.
Second question IRA.
No I think it's very difficult to predict and our planning assumptions. We have we have assumed for <unk>.
Some products to be impacted here early on.
And Bronco is obviously one product that we're looking at carefully I would say, it's right from how you would calculate it.
Based on the data that we would have it would be right on the bubble.
Of where the cutoff would occur in the first 10 products. So it could be 10 could be nine could be 11, depending upon how some other products and I say it that way because remember we're using the data that we have we're not 100% sure that that is the data that CMS is going to use so theres not perfect clarity.
<unk> around it.
But I would say that's one that we obviously you have on the radar screen and we're looking at carefully.
Anything you'd add.
When when IRA was passed a year ago, we obviously modeled the impact and we reaffirmed our long term guidance expectation of high single digit growth in the second half of this decade that remains we looked at what it means in terms of inflation penalties part D benefit redesign negotiations. So we did make assumptions around that I think rick's correct in that there is still enough uncertainty we're going to know.
Soon right September versus one David.
<unk> announced the first list, we have modeled it but we feel good even with IRA. Although it does have an impact has impacted everyone. In the industry. We can still deliver on our long term growth expectations. On your question and then keep in mind too when you look at the Medicare percentage of business for for Abbvie in the U S. It's about 20% globally, it's a little bit lower obviously.
So you look at us relative to our peers, we have a lower percent of the business is exposed to Medicare and then when we look at specific Renbarger thing you have to keep in mind with RIN vote with indication expansion.
The percent of sales youre talking about by the time.
She will be selected for negotiation potentially in later part of the decade, you are talking about something more like 10% to 12%.
Because you have to keep in mind, the new indications and Medicaid sort of a younger patient population. So that's the way we're looking at Red Oak will continue to develop it.
Obviously, you have a number of indications that could launch later in the decade, we feel very good about that those indications can collectively contribute a couple of billion dollars of revenue will continue to drive that robust growth, we expect from <unk> as well and so.
We've modeled the impact of IRA we don't expect it to impact the development plans for rent book.
Thank you <unk> operator next question please.
This shot J P Morgan.
Great. Thanks, so much just two questions from me I guess first can you just elaborate in terms of what youre seeing with Biosimilar Humira as we think about kind of the price and volume dynamics I guess specifically.
Any surprises from your side in terms of how this is playing out and then just any qualitative comments you can provide about how you see this kind of translating as we kind of think out to 2024 and.
And then my second question was just on the Sky Ranch the updated guidance.
A little more color on that $7 6 billion of at this point, how much is coming from psoriasis versus psoriatic arthritis versus this crohn's launch that seems to be off to such a strong start. So I'm just just directional color on like the mix of the indications would be very helpful. Thank you.
Yeah, Hi, Chris It's Jeff.
I'll answer your first question so in a nutshell, we havent been surprised at.
At any of the dynamics that we've seen play out we've called it very very accurately so again nothing thats really.
Other than some some small volume.
Holding on a little bit better.
It's really different so we're quite pleased with how our contracting and access has played out and that parity access for humira.
Has been important and again, it's what we believed would happen.
We think it's good for patients obviously, you can maintain their therapy with very little volatility and it's certainly provided us with a lot of predictability and so I think we've managed sort of the first half with the with the Amgen launch and then the second half dine.
<unk> dynamics very very well.
And if you looked at 'twenty four as I've highlighted before we do have two year agreements with some of our accounts and we negotiated those in good faith, and we expect them to be to be honored and remember these are parity contracts for both 'twenty three and 'twenty four.
With Humira access coexisting with these multiple biosimilars. So I would say based on these dynamics. We are confident that humira access will remain quite meaningful in 2024.
We know that as more biosimilars become established we're also as we've highlighted appropriately planning for.
Some volume loss in those certain so called wax sensitive accounts over time, so really no surprises in terms of what we've seen overall so we're quite pleased that Chris. This is Rob just give you some color both in terms of the 'twenty three guidance and the erosion assumptions around that and then I'll talk about 'twenty four briefly as well in the first half of the year, obviously, the vast majority of that erosion.
From price, we saw very little volume impact, but now with eight biosimilars on the market and some pursuing a low X strategy. We have assumed high single digit volume erosion in the second half of the year, which would put the full year volume impact at mid single digits. The rest of the 35% comes from prices, we've negotiated with higher rebates and maintain strong parity access now while we're not providing 2000 <unk>.
Our guidance today for U S. Humira. It is reasonable assume that there will be additional price erosion. Some will come from the <unk> of the rebates that increase in the second half of this year and some will come from rebate increases negotiated for 2020 for parity access I'd also expect more volume erosion in 2000 and for given the major entry of Biosimilars. This year, especially those that are pursuing a low X strategy.
We've taken a close look at consensus estimates analyst estimates have a very wide range of different seen the lowest estimate the highest estimate approaches $4 billion. However, I would say the average of those estimates appears to be a reasonable expectation for next year, obviously, we'll give formal guidance likely on the Q4 call, which is our customary practice, but if you look at the average of those.
But that should give you a good sense.
Thanks, Chris Operator, nimble Terry sorry, and then I'll take this is relative to your question on Sky <unk>. So of the $200 million split evenly between Psoriatic, a $100 million in IBD, a $100 million of that.
Seven 6 billion Psoriatic is about $6 seven and IBD is around $900 million.
Thanks, Chris Operator next question please.
<unk> <unk> Wells Fargo.
Great. Thank you very much for taking my question and congrats in the quarter.
One clarification question and then one question clarification. So Vic you mentioned that you would think again.
At this point Youre not talking about.
Increasing the Florida, but you feel comfortable about the fluid EPS range of $7 70 is that is that fed muted to time point at 224. That's the first clarification question and then second one is when we talk to investors.
Do a fee.
Comfort level about the ex Humana portfolio, but one question that comes up all the time is that the lack of shiny object our pipeline beyond <unk>.
<unk> <unk>.
Got it and then we'll.
To the extent that you agree with that assessment.
How do you plan to mitigate that.
Anything in the pipeline that investors are missing at this point. Thank you.
Okay.
This is Rick so as far as the $10 70, I would tell you that we feel highly confident in the 2017 so.
There shouldn't be any concern there and as I said with how the growth.
The growth platform is performing we would expect to update at some point the floor and obviously by the way I'm, saying in the update would be an upward direction.
So hopefully that gives some clarity around the floor.
When you think about the pipeline.
About the way we operate as we design our investment in R&D.
Well to deliver the kind of growth that we expect for the business over the long term, both short term and the long term.
Our expectations of the business haven't changed our expectations are to build a strategy that allows this business to grow at the top tier and be able to do it over the long term and do it in a consistent way and I'd say.
As I look at our historical performance, we've obviously delivered on that but as I look at a forward looking performance through the end of this decade and into the early part of the Thirty's. We're highly confident we can deliver a high single digit growth with the pipeline that we have now and ultimately with the assets that we have in the marketplace and how they are performing in the marketplace.
And their ability to be able to drive significant growth and you've seen that in the performance that we're delivering now when you look at that growth platforms growth in first quarter and then look at it in second quarter, it's accelerating at a very good pace and it will continue to accelerate as we go through the rest of this year and that once we get to <unk>.
Stable tail relatively stable tail on humira, it will be that growth it emerges to be able to drive the company and that's what gives us such a high level of confidence.
But I think when you look at our pipeline.
Certainly we invested significantly in <unk> and <unk> and that investment is paying off extremely well we have a number of assets in our pipeline that will continue to help accelerate that growth as we move forward. So <unk> four.
T 11, and 14 in Mds are examples of that 95 one.
You do that Resubmission and get that product on the marketplace is a huge need for that product in the marketplace in a number of other assets that won't go through every one of them. The rest of our investment in R&D has really been focusing on assets that are designed to be able to sustain our growth.
2030 40 forward.
So as I look at our pipeline and I know you don't have as much visibility as we do but when I look at our pipeline for things like the.
The 400 platform and the C met.
Platform that we have.
We are seeing in CRC.
Non small cell, that's a significant opportunity for us.
There is another significant opportunity for us our neuroscience portfolio was $9 six and other assets is another significant opportunity for us and it will emerge in that timeframe.
Next generation BG paid to greater that we're excited about.
The second generation Bcl two.
That we're very interested in pursuing in multiple myeloma and so theres a number of assets here. They just haven't emerged to the point that you have.
Clear visibility to all of that data, but we do have visibility to where they are progressing and so I think it's just hard for you to assess at earlier pipeline, but it's really designed to deliver on that long term growth. So we're confident between now and the early thirties and as that pipeline matures.
And the data comes out three three is another good example of where we have a lot of data now is demonstrating that is probably best in class.
By specific.
In myeloma.
So as that data emerges youre going to get more visibility to it and then obviously we have the ability to go out and acquire things and find things that we're interested in.
Okay. Thank you Mohit operator next question please.
Paris Glen Morgan Stanley .
Hi, Thanks, so much for taking the questions maybe a couple for me maybe Rick just to follow up on that last comment maybe just an update on your.
M&A BD appetite here, particularly now.
Assets that can contribute more near term to growth.
And then again want to see what you guys are hearing out there regarding the.
<unk> long acting botox competitor it sounds like Youre seeing stable market share, but any feedback on that product. Thank you.
Okay.
So M&A I mean, obviously, we have a very active group rooms.
Constantly working in the area.
Business development.
We're primarily focused in the areas that we operate in franchises, so think of things like immunology.
<unk> science certain areas of neuroscience oncology statics as an example.
Constant we looked at it and then I hear will be I would say the key areas of focus.
As I've said before we don't need anything to be able to drive that high single digits.
Obviously, if we can grow even faster that's a good thing.
As all of us recognize that if we find assets that are out there that are later stage assets and they fit our strategy and they fit the target product profile that we would expect.
Because we only look for assets that can significantly change standard of care. That's what we're good at and so we evaluate lots of things, but many of them don't meet that threshold that we're looking for.
But if we find something we would obviously pursue it if it was in an area that we thought we could we can maximize the value of it and so.
We will continue to do that.
So I can say I feel good about where we are and what we can drive and I feel good about how we're looking at assets that are on the outside we certainly have the financial.
With all to be able to.
To acquire.
Assets that are out there and as we've mentioned before.
Obviously require now larger assets and so we continue to look at those but they have to meet our criteria they have to be able to deliver a good return to the business.
On taxi I feel very good about how the team area and the team are performing.
Against actually but I'll, let carey actually describe to you how our outlooks.
Thanks, Rick so in terms of taxi, it's been more than six months since their launch and the uptake has been quite limited from our perspective.
<unk> single digits, so for context, as we benchmark our competitive launches and you would benchmark this launch versus the most recent.
Toxin to enter the U S market, you would see it's tracking to about 25% of where another product would be at the same point in its launch.
And in terms of customer feedback, we continue to hear that expectations are just not being that on duration.
<unk> expectations on the customer side and on the consumer side. So we have yet to see impact on botox share and Botox will continue to be the clear market leader as the other toxins compete for the number Q3 for our position in our customers' offices.
We are very pleased with the team's ability to execute on these competitive strategies here and actually there are clear focus not only on the competitive strategies, but also on the broader focus and vision to gravity entire toxin market in the U S, which we continue to see as the biggest opportunity now Andy.
In the future.
Thank you Karen operator next question please.
And then <unk> BMO.
Hey, guys, sorry about that I was on mute. Thank you for taking my question.
I want to just talk about kind of how you think about market share across the broad portfolio, specifically sky Brazilian Rainbow kind of going forward is there a potential ceiling for them on a market share you can realize in these markets and maybe comment on some of the gating factors for market share growth in each patient provider and reimbursement agreements. Thank you so much.
Yes, Hi, Evan it's Jeff I'll take that one one of the aspects that we have that I highlight and we look very carefully at we look at both sort of in play capture.
Which I often refer to for example, right now the in play capture for Sky.
<unk> psoriasis is about 50%. So we're capturing one out of every two patients.
And our market share is about 32% as I highlighted so theoretically as we studied these markets that if theres not major innovation a major disruption that comes in place and we really don't see that in psoriasis, you get such a high level of efficacy with Sky Rizzi.
Your your market your market share. So the 32 starts to ramp up over time towards your in play capture because you get the persistency effects in the falloff that take place in the market. So really when you look at that I could say the same thing for example, with RIN Volk I mentioned that it's capturing 25% of.
Second line plus in play share it as like a 3% market share. So in terms of the ability to sort of grow that market share over time, we really monitor that that capture rate in the early years and then you just sort of the in place sort of pulls up your market share over time. So that's why we're quite encouraged at the speed of the.
The ramps that we're seeing there and the ability to move that market share now when we started the models you don't fully get there because typically something else launches time goes by but we can feel very very encouraged as we look at our in play momentum that the market share starts to approach that over our long range planning cycle.
The other thing I would add this is Rick is within so Tesla ahead to Ed I would say currently sky really not competing much against Oh, Tesla, which is a pretty sizable opportunity.
And we're very pleased with this head to head data so that will open up another pool of patients today sky really doesn't necessarily compete against.
So that data will obviously.
Obviously allow us to be able to position it quite effectively against a tesla.
Alright. Thank you Evan operator next question please Chris.
Chris Raymond Piper Sandler.
Thanks, just maybe.
Pipeline line of questioning here, Rick I heard you mentioned maybe.
Maybe PV 951, but it wasn't in your prepared comments, maybe I know you guys were saying youre working to respond to the CFO later this year could do for in the first half is that still the case.
Then maybe also.
Also on the pipeline a couple of quarters ago. I think you guys talked about an interest in combo opportunity in IBD with GOP to you and license I think from scripts any updated thoughts here with this.
Sort of mechanism as a combo agent.
Hi, it's rupal I can take those so for 95 one.
The team is still.
On track for a resubmission this year consistent with what <unk>.
You just stated.
And in fact, we've we've launched in Japan, and Theres already commercial patients receiving it. So the team is very excited about that and what was described earlier the unmet need is still quite high and we still believe in a very strong profile.
In that asset.
Along the lines of combinations as you as you mentioned on <unk>, we feel with something like a sky rizzi the data that we've seen in Crohn's and ulcerative colitis.
Still potentially an opportunity to even increase.
The scopic or mucosal healing, even higher we're seeing high ranges already at 50%, 60%, but we can still potentially go higher than something like a <unk> can directly address.
And it seemed to be mainly on patient levels as opposed to competition wondering if you're seeing this and to what do you attribute it. So that's the first question on the second question on the Q1 call. The company said it would narrow the EPS range when it had clarity on Biosimilar humira and the landscape for that.
So your narrowed that range today, despite most biosimilars having been on the market for only three <unk> three weeks what do you know now that you didn't know when you reported in April that gives you the confidence to narrow the range today or is it all about the performance of the rest of the portfolio and really not about humira. Thank you.
Yeah, It's Jeff now, we we don't see any any a slowdown in the IBD market. I mean this market has been just one of the highest growth markets. We've seen from a <unk> perspective over over many many years, there's such unmet need and so now we're not seeing any patient.
Blowdown I would say look if we look at our particular data I mean, you are seeing very fast ramps on this in place share from from Sky regime, Crohn's disease, now you're seeing an equally fast ramp in the early weeks from Rainbow can crohn's disease, and again, we're capturing up to 25% of the sex.
[noise] line plus patients.
In ulcerative colitis, so I do not know what data Takeda is looking at but we're seeing that the competitors in that space in the leading competitors are still Laura and Entyvio and of course, our own humira, but it's still are in entyvio, they're under pressure in terms of incremental patient capture since our launch and we'll continue to monitor but we.
Don't see we don't see any patient flow issues in the marketplace.
Steve This is Rob on your second question I think it takes a combination of both we're seeing very strong performance from the <unk> platform as you can see by the guidance Reyes, that's certainly a contributor but now that we're beyond the middle of the year. We know the device on was that a enter the market. We know they're facing prices. We've maintained strong parity access and so that also increase our confidence.
Which is why we've narrowed the range of 2000, but it's a combination of both extra Mayo growth platform performing very strongly as well as where we sit today with some of our competition for Humira.
Thanks, Steve Operator next question please.
Carter Gould Barclays.
Thank you questions quarter I guess.
Two.
All your comments on the pipeline and previous comments on BD.
What can I get your your thoughts on how the more assertive F. T. C. Here is limiting your target list on BT or your ability to complete deals and then maybe just on botox.
Was hoping for a little bit more color on the sustainability of the west trends versus maybe some some of that demand getting pushing with a quarter. After some of the the shutdowns COVID-19 impacts and whatnot X U S. Thank you.
Okay.
So I'll take the first question.
You know obviously the F. T C appears to be applying a lot more scrutiny two transactions, having said that I would say even before this happened [noise].
We would always evaluate.
An acquisition of a product or company and the backdrop of what we thought the competitive environment would be our position in that market meeting.
Similarly to go out and try to do transactions that we thought would be extremely difficult from an F. T. C standpoint, so I I think the way we think about the FCC's situation now is.
May require more time to get acquisitions through.
It may even require that you are willing to to pursue litigation in order to get those through.
In the end.
If your position is that what you're what you're trying to do is not anti competitive you won't be able to ultimately prevail in that process and I think we're seeing that some of these transactions go to court.
Something on our own industry.
Other industries I think that's playing out and so I think ultimately it will end up being more of a delay, but not something that stifles your ability to do things that are appropriate to do that's my perspective on it.
Sure sure.
In terms of via Fedex market internationally been very pleased with the performance so far and we expect to can continue to expect to see that type of strong performance or the rest of the year.
We're continuing to invest in key growth markets, like Japan, and and markets like Brazil and of course, China has become our second biggest market globally and in China, and the first quarter week I'd see significant crowd. That's America was reopening from covered and some pent up demand that came through in Q1 in early Q2 and now China.
Has returned to normalize high growth rates.
And so you know despite some economic pressures that are we really continue to see strong growth as we continue to invest and expand our promotional set front their field forest ranch after training in our consumer efforts.
And that China will continue to be a really attractive market for us based on that commercial expansion and also we're going to have a steady flow of new product launches throughout the decade and that market. One thing to note, which we did mentioned in our prepared remarks is that we do expect Q3 to be relatively flat internationally based on shipment timing.
Last year with that returned to ground. Thank you for and high single digit ground for the full year internationally and Carter you are specifically asking about international Botox I think if you just looked at the run right through the six months of the year, that's probably a good proxy for where we expect international Botox to land.
We're holding strong sharp positions Lawrence is very very good. So there's really no dynamic there was Carrie mentioned I mean, you have to.
Keep in mind that Hillary is.
Very large market for us is frozen internationally, we do have the Q3 dynamic, but when you look at the full year for international that high single digit growth is certainly a way to think about the international business for a statics.
Thanks Carter operator next question please.
David Risinger Larynx partners.
Yes, thanks, very much so I have two questions Rick you had mentioned.
That you were expecting stabilization of humorous sales at some point could you provide some perspective on when you might expect that and then second with respect to the filler franchise.
Obviously, it's performing strongly could you discuss the prospects, including the driver of weight loss drug patients seeking to compensate for facial Halloween. Thank you very much.
Okay.
On the Humira Tellez as Rob mentioned earlier, obviously, you had the annualization of the impact that we have this year. The second half Annualization, that's gonna roll into 24, if you go down further price erosion in 24, both based on the contracts that we have and how we're expecting the market to play out.
I'd say the pricing in the marketplace has been consistent with what our original assumptions were so I think the expectation.
To see stabilization of that tale in 25.
And if it operates similar to what we see in the international markets, which I think it probably will at that point.
It becomes relatively stable.
26 going forward and it should be still a substantial tail.
That we maintain but we'll see less less erosion pressure on it at that point.
Sure you want to talk a little bit about the you know because of the impact.
So in terms of the filler opportunity an outback I guess.
[laughter] I'll I'll start a zoom out a little bit and just comment on that yeah. That's still our market continues to be really attracted especially internationally as you've already seen here right now with China, driving some strong growth and and really some of the key did you feel better and brands have just become available in China.
Two years and will continue to have like I said, I can't and since you've been launches in China.
And then and then our increased investment all over the World and continues to drive our fellow business. It gives us a lot of optimism their internationally now in the U S. We have sad that the inflationary dynamics have impacted the U S market for seller and more than toxin just by the nature of the fill our pricing and procedure.
And also in terms of the patient journey patients tend to start on tocsin before they add seller and so you know for all those reasons. We believe that that's hot seller market will continue to improve in the second half of the year, although it will add to talk to the market recovery of that now in terms of the question around Xanthic you know.
We have been keeping an eye on that and how these weight loss products could have an impact on the aesthetics market and what we see is that really anything that gets a consumer engaged in their appearance, including products like a zantac or a positive tailwind for the aesthetics business and we are hearing some <unk>.
Customers say that this you know facial Halloween for for Killers is R for that that the results of these products is an opportunity for hilary's, we see that on social media were tracking it and and other forms of media and we think that you know like many other consumer trends around aesthetics physical disk.
Continue to be a a tailwind in a positive dynamic of the business.
[noise] operator thinks David Risinger, Operator next question. Please.
Anderson Wolf research.
I'll take you a couple of questions how much uncertainty there in terms of contracting an ini category 2024 from a pricing standpoint, first kind of busy and <unk>.
And when will you be able to provide an update on how those pricing discussions are going for those two brands. So not the formal sales guidance for those products, but how the present discussions are going.
And what is your expectation today for that level of price erosion in 2024.
The what it's been in 2023.
Okay.
So I think Jeff and I will tag team. This one it's a great question because of luck.
I think we all know there has been some question out in the marketplace since the first quarter about iron iron pricing and so let me try to frame our perspective on on the price of it because I think there's there's some misconception. That's that's developed in the marketplace to sell.
[noise] extent around.
Pricing.
The first thing I would say to you. This is a market we know well we've been in this market for a long time.
Obviously, the clear leader in this market. So it's a market, we we know extremely well.
Let's see we know any trends that are occurring in this market.
To a high degree of detail and what I would tell you is that we see no fundamental change in the way pricing is being dealt with in this marketplace, nor do we expect to see any fundamental change that occurs in the foreseeable future so that brings.
Each of the rebate question in the first quarter.
And I would tell you that we're operating exactly the same way we have historically operated in this segment as it relates to rebating or a discount.
We got a new indication or we got a new product.
Things that we evaluate is okay, what level of Rebating, what should we do in order to maximize two things for the product.
Speed at which we can drive the ramp and.
The ultimate peak sales that we can drive for that asset we weigh those two things against how.
How we look at contracting and getting unemployment.
And so when you get an indication you make the tradeoff do I Wanna be on Formula don't I, if I do I have to provide some level of incremental rebates.
Then a financially positive decision for the asset and the company and if it is we make that decision.
And I would say that sky regime Rainbow classic examples of that strategy.
And.
I would say yeah, well look at how they're performing we're gonna grow those two assets. Despite the increase rebates three and a half billion dollars. This year.
That's a pretty good trade off.
Do you have anything you'd add.
Yeah, maybe just to build on that point, Rick I mean this this this this fact base of seven indications in one year in one category with one firm. It's just it's really unprecedented it's not gonna happen again and I think it is important you know think about how it works I mean, when you get a new indication in their sequencing over time, you know you've got a clue.
Near the payers P N T clinical committee and they don't meet every day. They they need every couple of months. So there's a there's a process there and then you've gotta be added to the formulary structure. So either after somehow gain a new spot by indication of replace a competitor.
And that's not easy as well and so that's why what we see in the marketplace.
Many competitive firms have to offer these free or bridge programs and not just for a quarter or two some sometimes there are multiple quarters are years until that access Rams Rams and I would say in contrast strict as you noted on average we achieved fully paid access for those seven indications and about 60.
Days really really unprecedented so that means we had to give very little free goods. We had almost immediate paid access and profit flow and then of course that rapid revenue accumulation that you highlighted so definitely the right trade offs and we don't see that recurring.
And then Tim on your on your second question. We've said this before you know the the the high single digit price impact this year as a function again as Jeff mentioned seven new indications you would not expect that type of price erosion going forward. It should not be what investors are modeling. So I wouldn't be concerned about high single digit price erosion in 24.
Thanks, Tim Operator, we have time for one final question.
And that'll be from Jeff Meacham Bank of America.
Great morning, guys. Thanks for the question.
Oh U S. Samir, you're you're obviously well past the initial biosimilar wave, but you're still seeing some sequential decline so.
What's the context here and is there a dynamic that could impact sky brassiere invoke even indirectly a U S.
And then I'm in a bit of clocks I know you guys have more details to come but is there a threshold you're looking for and transform one to to move forward or or even to inform development and other indications just thinking about maybe the tolerability profile and and the comps and and and thank you.
Jeff This is Rob I'll I'll I'll answer your question of international human or if you look at the twenty-three erosion, it's about $600 million, it's really split and I'd say three buckets about $300 million of it is new Biosimilar markets markets like Canada, Puerto Rico, Mexico. Those are number we have additional waves coming in so that's the.
The next wave coming in so about half of it is that and then I'd say I'd characterize about $200 million being really the impact of new agents like Sky Roseann Ringbark right. So you you have.
Agents to deliver a higher standard of care and so you're going to see to share erosion just through that dynamic. Unfortunately, we've brought forward our our own products that do that and so I would say of that 600 200 is roughly that and then in the international markets. You typically see some I'd say low low to mid single digit price erosion just typically.
A year over year, so that's about another 100 million so.
It's important to characterize it the right way, it's not so much markets that were biosimilar several years ago. It's more recent biosimilar market, our own competition of our own agents as well as a typical price erosion you see an international market.
Hi, it's Rupel I'll I'll take the new vehicle X question. So we will continue to monitor to the spleen volume reduction and see how that looks towards the end of the year and if it maintains a high level of AD. Tom describe that's that's something that Ah is definitely Ah.
Positive the other things that will get that.
Will reveal themselves over the longer term is the the marrow fibrosis and that along with the spleen volume reduction.
Actually some of our earlier data may be correlate of Ah for survival of events. So we'll get an early look at those and then in terms of Tolerability, what we've seen thus far is consistent with what we've seen initially and it is a.
Tight tradeable.
Dosing. So you know the clinicians can tailor in this study to what the what the patient needs.
More to come by.
A year and.
Okay. Thanks, Jeff 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 Dot Abby Dot com. Thanks again for joining us.
Yes, we are concluded again. Thank you for your participation you may please disconnect at this time.
[music].
[music].
[music].