Q3 2023 AbbVie Inc Earnings Call

October 27, 2023

Operator: Good morning, and thank you for standing by. Welcome to the AbbVie third quarter, 2023 Earnings Conference Call. All participants will be in a listen only mode until the question and answer portion of this call. You may ask a question by pressing star one on your phone. I would now like to introduce Ms. Liz Shea, Senior Vice President, Investor Relations. Thank you, you may begin.

Operator: Good morning and thank you for standing by. Welcome to the AbbVie Q4 2023 earnings conference call. All participants will be in a listen-only mode until the question-and-answer portion of this call. You may ask a question by pressing star one on your phone. I would now like to introduce Ms. Liz Shea, Senior Vice President, Investor Relations. Thank you. You may begin.

Good morning, and thank you for standing by and welcome to the Abbvie third quarter 2023 earnings Conference call all participants will be in it.

Excuse me it will be in a listen only mode until the question and answer portion of this call. You may ask a question by pressing star one on your phone I would now like to introduce MS. Liz Shea Senior Vice President Investor Relations. Thank you you may begin.

Liz Shea: 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 Stewart, Executive Vice President, Chief Commercial Officer, Scott Reents, Executive Vice President, Chief Financial Officer, Carrie Strom, Senior Vice President, AbbVie and President, Global Allergan Aesthetics, and Tom Hudson, Senior Vice President, R&D and Chief Scientific Officer. Joining us for the Q&A portion of the call is Roopal Thakkar, 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.

Liz Shea: 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, Chief Commercial Officer, Scott Reents, Executive Vice President, Chief Financial Officer, Carrie Strom, Senior Vice President Abbvie, and President Global Allerg Anesthetics and Tom Hudson, Senior Vice President of R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call. It Triple Soccer Senior Vice President development, and regulatory Affairs, and Chief Medical Officer.

Liz Shea: 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, Chief Commercial Officer, Scott Reents, Executive Vice President, Chief Financial Officer, Carrie Strom, Senior Vice President Abbvie, and President Global Allergan Anesthetics and Tom Hudson, Senior Vice President of R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call is Roopal Thakkar, Senior Vice President, development and regulatory affairs, and Chief Medical Officer.

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 Chief Commercial Officer, Scott <unk> Executive Vice President Chief Financial Officer, Carrie Strom Senior Vice President of Abbvie, and President Global allergy Anesthetics and Tom Hudson.

Senior Vice President of R&D, and Chief Scientific officer, joining us for the Q&A portion of the call. It Triple Soccer Senior Vice President development, and regulatory Affairs, and Chief Medical Officer.

Liz Shea: Joining us for the Q&A portion of the call is Roopal Thakkar, Senior Vice President, development and regulatory affairs, and Chief Medical Officer.

Liz Shea: Before we get started, I will 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. Additional 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.

Liz Shea: Additional 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 AbbVie'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.

Additional information about these risks and uncertainties is included in our SEC filings at the undertakes no obligation to update these forward looking statements except as required by law.

Liz Shea: On today's conference call, non-GAAP financial measures will be used to help investors understand the AbbVie'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.

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.

Rick Gonzalez: Thank you, Liz. Good morning, everyone, and thank you for joining us today. AbVie continues to perform exceptionally well. We once again delivered an excellent quarter with results ahead of our expectations. We are now several quarters into the US biosimilar event for Humira and continue to effectively manage erosion. We've been able to maintain significant volume with the majority of the impact to date driven by lower price. Importantly, our growth platform, the base business excluding Humira, which includes a well-diversified portfolio with multiple leading products in highly attractive markets across immunology, neuroscience, oncology, and aesthetics, continues to demonstrate robust performance and outperform expectations. This platform, which is the critical driver in our return to rapid growth in 2025 and beyond, delivered strong double-digit revenue growth this quarter, a considerable acceleration from the first half of this year.

Rick Gonzalez: Thank you, Liz. Good morning, everyone and thank you for joining us today. AbbVie continues to perform exceptionally well, we once again delivered an excellent quarter with results ahead of our expectations. We will now several quarters into the U.S biosimilar event for Humira. We continue to effectively manage erosion. We've been able to maintain significant volume with the majority of the impact to date, driven by lower price.

<unk> continues to perform exceptionally well, we once again delivered an excellent quarter with results ahead of our expectations.

We will now several quarters into the U S biosimilar event for Humira.

We continue to effectively manage erosion.

We've been able to maintain significant volume with the majority of the impact to date driven by lower price.

Rick Gonzalez: Importantly, our growth platform, the base business, excluding Humira, which includes a well diversified portfolio with multiple leading products in highly attractive markets across immunology, neuroscience, oncology and aesthetics continues to demonstrate robust performance and outperform expectations. This platform, which is the critical driver in a return to rapid growth in 2025 and beyond, delivered strong double digit revenue growth this quarter.

<unk> robust performance and outperform expectations.

This platform, which is the critical driver in a return to rapid growth in 2025 and beyond delivered strong double digit revenue growth this quarter.

Rick Gonzalez: A considerable acceleration from the first half of this year. We anticipate this platform, which is led by Skyrizi, Rinvoq, Vraylar and Botox will continue to drive significant revenue growth going forward. At the same time, we have several promising R&D programs with the potential to contribute meaningfully in the latter part of this decade and into the 2030s. This includes next generation approaches in immunology, and focus on Biospecifics, ADCs and novel IOs in oncology. As well as innovative therapies to potentially treat a range of neuropsychiatric and neurodegenerative disorders.

Rick Gonzalez: We anticipate this platform, which is led by Skyrizi, Rinvoq, Vraylar, and Botox, will continue to drive significant revenue growth going forward. At the same time, we have several promising R&D programs with the potential to contribute meaningfully in the latter part of this decade and into the 2030s. This includes next-generation approaches in immunology, a focus on bispecifics, ADCs, and novel IO in oncology, as well as innovative therapies to potentially treat a range of neuropsychiatric and neurodegenerative disorders. In summary, I'm extremely pleased with the continued strong momentum and execution across our business. The growth platform is substantially outperforming our expectations, giving us the confidence to once again raise our financial outlook, including upgraded guidance for full-year earnings, which Rob will share momentarily.

We anticipate this platform, which is led by Sky regime.

When vote <unk> and Botox will continue to drive significant revenue growth going forward.

At the same time, we have several promising R&D programs with the potential to contribute meaningfully in the latter part of this decade and into the two thirds. This includes next generation approaches in immunology and focus on Biospecifics Adcs and novel Io.

LNG as well as innovative therapies to potentially treat a range of neuropsychiatric and neurodegenerative disorders.

Rick Gonzalez: In summary, I'm extremely pleased with the continued strong momentum and execution across our business. The growth platform is substantially outperforming our expectations. Giving us some confidence to once again raise our financial outlook, including upgraded guidance to a floor earnings, which Rob will share momentarily. In further underscoring our confidence in AbbVie's long term outlook, today we also announced an increase in our quarterly dividend, which we have grown by more than 285% since our inception. With that, I will turn the call over to Rob for additional comments on our business performance, Rob. Thank you Rick our results one.

Some confidence to once again raise our financial outlook, including upgraded guidance to a floor earnings, which Rob will share momentarily.

Rick Gonzalez: In further underscoring our confidence in AbbVie's long-term outlook, today we also announced an increase in our quarterly dividend, which we have grown by more than 285% since our inception. With that, I'll turn the call over to Rob for additional comments on our business performance. Rob?

And further underscoring our confidence in <unk> long term outlook today, we also announced an increase in our quarterly dividend, which we have grown by more than 285% since our inception with that I will turn the call over to Rob for additional comments on our business performance, Rob. Thank you Rick our results one.

Rob Michael: Thank you, Rick. Our results once again demonstrate the strength of our broad portfolio and support AbbVie's long-term growth outlook. We reported adjusted earnings per share of $2.95, which is $0.14 above our guidance midpoint. Total net revenues were $13.9 billion, roughly $225 million ahead of our guidance. The performance of our ex-Humira growth platform continues to be very strong, with revenue growth above 12% this quarter, including more than 50% growth from both Skyrizi and Rinvoq, our best-in-category immunology medicines. We continue to anticipate that these two products will collectively exceed Humira peak revenues by 2027, with robust growth expected into the next decade. Neuroscience also delivered strong performance, with operational sales growth of more than 20% this quarter, driven by our leading portfolio for migraine and psychiatric conditions. And lastly, aesthetics performance was highlighted by the return to growth of the US toxin market.

Robert Michael: Thank you, Rick. Our results once again demonstrate the strength of our broad portfolio and support AbbVie's long term growth outlook. We reported adjusted earnings per share of $2,95. Which is 14c above our guidance midpoint. Total net revenues were $13.9 billion, roughly $225 million ahead of our guidance. The performance of our ex-Humira growth platform continues to be very strong, with revenue growth above 12% this quarter, including more than 50% growth from both [inaudible], our best in category immunology medicines. We continue to anticipate that these.

Robert Michael: Thank you, Rick. Our results once again demonstrate the strength of our broad portfolio and support AbbVie's long term growth outlook. We reported adjusted earnings per share of $2,95. Which is 14c above our guidance midpoint. Total net revenues were $13.9 billion, roughly $225 million ahead of our guidance. The performance of our ex-Humira growth platform continues to be very strong, with revenue growth above 12% this quarter, including more than 50% growth from both Skyrizi and Rinvoq, our best in category immunology medicines.

Once again demonstrate the strength of our broad portfolio and support <unk> long term growth outlook, we reported adjusted earnings per share of $2 95.

Which is <unk> 14 above our guidance midpoint.

Total net revenues were $13 $9 billion roughly $225 million ahead of our guidance.

The performance of our ex Humira growth platform continues to be very strong with revenue growth above 12% this quarter, including more than 50% growth from both <unk> and <unk>, our best in category Immunology medicines, we continue to anticipate that these.

Robert Michael: We continue to anticipate that these 2 products will collectively exceed Humira pick revenues by 2027 with robust growth expected into the next decade. Neuroscience also delivered strong performance, with operational sales growth of more than 20% this quarter. Driven by our living portfolio for migraine and psychiatric conditions. And lastly, aesthetics performance was highlighted by the return to growth of the U.S toxin market.

Two products will collectively exceed Humira peak revenues by 2027 with robust growth expected into the next decade.

<unk> also delivered strong performance with operational sales growth of more than 20% this quarter.

Given by our leading portfolio from migraine and psychiatric conditions and.

And lastly, aesthetics performance was highlighted by the return to growth of the U S toxin market.

Robert Michael: This outstanding execution across our well diversified portfolio gives us the confidence to once again raise our near term financial outlook. We are increasing our full year revenue guidance by $600 million and have now raised total revenue by $2 billion since our initial guidance in February, including more than 1.4 billion from our ex-Humira growth platform.

Rob Michael: This outstanding execution across our well-diversified portfolio gives us the confidence to once again raise our near-term financial outlook. We are increasing our full-year revenue guidance by $600 million and have now raised total revenue by $2 billion since our initial guidance in February, including more than $1.4 billion from our ex-Humira growth platform. As a result, we are also raising our full-year adjusted earnings per share guidance by $0.25 and now expect adjusted EPS between $11.19 and 11.23. Given the strong momentum of our growth platform, which is significantly outperforming our expectations this year, we are now raising the floor guidance for 2024 adjusted EPS to $11, which is $0.30 better than our previous expectations. This floor guidance continues to exclude any impact from IPR&D expense. As is our typical practice, we'll provide our formal EPS guidance range for 2024 on the Q4 call.

This outstanding execution across our well diversified portfolio gives us the confidence to once again raise our near term financial outlook.

We are increasing our full year revenue guidance by $600 million and have now raised total revenue by $2 billion since our initial guidance in February including more than one 4 billion from our ex Humira growth platform.

Robert Michael: As a result, we are also raising our full year adjusted earnings per share guidance by 25c. And now expect adjusted EPS between $11,19 and $11,23. Given the strong momentum of our growth platform, which is significantly outperforming our expectations this year, we are now raising the floor guidance for 2024 adjusted EPS to $11, which is 30c better than our previous expectations. This floor guidance continues to exclude any impact from IPR&D expense.

And now expect adjusted EPS between $11 19.

And $11 23.

Given the strong momentum of our growth platform, which is significantly outperforming our expectations. This year. We are now raising the floor guidance for 2020 for adjusted EPS to $11, which is 30 <unk> better than our previous expectations.

This floor guidance continues to exclude any impact from IP R&D expense.

Robert Michael: As is our typical practice, we will provide our formal EPS guidance range for 2024 on the fourth quarter call. Finally, today we are announcing a 4.7% increase in our quarterly cash dividend from $1,48 to $1,55. Beginning with the dividend payable in February 2024. Since inception, we have grown our quarterly dividend by more than 285%. In summary, I'm very pleased with the strong execution across our portfolio. We remain confident in our long term outlook, including a return to robust revenue growth in 2025, with a high single digit CAGR to the end of the decade. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights, Jeff.

Rob Michael: Finally, today we are announcing a 4.7% increase in our quarterly cash dividend from $1.48 to $1.55, beginning with a dividend payable in February 2024. Since inception, we have grown our quarterly dividend by more than 285%. In summary, I'm very pleased with the strong execution across our portfolio. We remain confident in our long-term outlook, including a return to robust revenue growth in 2025 with a high single-digit CAGR to the end of the decade. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights. Jeff? Thank you, Rob. We once again delivered strong results across our therapeutic portfolio this quarter. I'll start with immunology, which delivered total revenues of nearly $6.8 billion, exceeding our expectations. Skyrizi and Rinvoq continue to demonstrate impressive growth and are now on pace to deliver approximately $11.6 billion in combined sales this year.

Finally today, we are announcing a four 7% increase in our quarterly cash dividend from $1 48 to $1 55.

Beginning with the dividend payable in February 2024, since inception, we have grown our quarterly dividend by more than 285%.

In summary, I'm very pleased with the strong execution across our portfolio. We remain confident in our long term outlook, including a return to robust revenue growth in 2025 with a high single digit CAGR to the end of the decade.

With that I'll turn the call over to Jeff for additional comments on our commercial highlights Jeff.

Jeffrey Ryan Stewart: Thank you, Rob. We once again delivered strong results across our therapeutic portfolio this quarter. I'll start with immunology, which delivered total revenues of nearly $6.8 billion, exceeding our expectations. Skyrizi and Rinvoq continue to demonstrate impressive growth and are now on pace to deliver approximately $11.6 billion in combined sales this year. This performance is especially encouraging, recognizing that we are still in the early launch phase for both assets in IBD.

Our expectations.

<unk> and <unk> continue to demonstrate impressive growth and are now on pace to deliver approximately $11 $6 billion in combined sales this year.

Rob Michael: This performance is especially encouraging, recognizing that we are still in the early launch phase for both assets in IBD, an area of high unmet need where we are very competitively positioned with two complementary assets, each having generated strong response rates and durable remission across our development programs. Skyrizi total sales were $2.1 billion, reflecting operational growth of more than 50%. This robust performance includes further share gains in psoriasis, where we remain the clear market leader, capturing roughly 1/3 of the total prescriptions in the US biologic market and approximately 50% of in-play patients who are either new to therapy or switching. Increasing momentum in psoriatic arthritis, where Skyrizi is now the leading in-play biologic therapy in the US dermatology segment, as well as continued rapid uptake in Crohn's disease, where we are capturing roughly 1/4 of in-play patients.

This performance is especially encouraging recognizing that we are still in the early launch phase for both assets in IBD and <unk>.

Jeffrey Ryan Stewart: An area of high unmet need, where we are very competitively positioned with two complementary assets, each having generated strong response rates and durable remission across our development programs. Skyrizi total sales were $2.1 billion, reflecting operational growth of more than 50%. This robust performance includes further share gains in psoriasis, where we remain the clear market leader, capturing roughly one third of the total prescriptions in the U.S biologic market and approximately 50% of in play patients who are either new to therapy or switching.

<unk> total sales were $2 1 billion, reflecting operational growth of more than 50%.

This robust performance includes further share gains in psoriasis, where we remain the clear market leader, capturing roughly one third of the total prescriptions in the U S biologic market and approximately 50% of in play patients who are either new to therapy or switching.

Jeffrey Ryan Stewart: Increasing momentum in psoriatic arthritis, where Skyrizi is now the leading in play biologic therapy in the U.S dermatology segment. As well as continued rapid uptake in Crohn's disease, where we are capturing roughly one out of every four in play patients. Importantly, we recently announced positive results from sequence, the ninth, and perhaps the most impactful head to head study across our development program for Skyrizi and Rinvoq.

As well as continued rapid uptake in Crohn's disease, where we are capturing roughly one out of every four in play patients.

Rob Michael: Importantly, we recently announced positive results from Sequence, the ninth and perhaps the most impactful head-to-head study across our development program for Skyrizi and Rinvoq. Sequence is a phase 3 head-to-head study in Crohn's, which demonstrated Skyrizi's superiority versus Stelara across key efficacy parameters, including impressive statistically significant differences in both clinical and endoscopic remission. The detailed data from this trial were presented earlier this month, and we plan to share the findings more broadly now via our medical personnel and representatives in the field. We anticipate these strong head-to-head results will clearly support Skyrizi as the best-in-category therapy for Crohn's, which is important for continued rapid share capture. So based on this very positive data, as well as our continued momentum, we will be once again raising the full-year sales outlook for Skyrizi.

Importantly, we recently announced positive results from sequence the ninth and perhaps the most impactful head to head study across our development program for <unk> and <unk>.

Jeffrey Ryan Stewart: Sequences of phase III head to head study in Crohn's, which demonstrated Skyrizi's superiority versus Stelara across key efficacy parameters, including impressive statistically significant differences in both clinical and endoscopic remission. The detailed data from this trial were presented earlier this month and we plan to share the findings more broadly now, via our medical personnel and representatives in the field.

The detailed data from this trial were presented earlier this month and we plan to share the findings more broadly now via our medical personnel and representatives in the field.

Jeffrey Ryan Stewart: We anticipate these strong head to head results will clearly support Skyrizi as the best in category therapy for Crohn's, which is important for continued rapid share capture. So, based on this very positive data, as well as our continued momentum, we will be once again raising the full year sales outlook for Skyrizi. Moving now to Rinvoq, which delivered global sales of $1.1 billion, reflecting operational growth of nearly 60%, with increasing prescriptions across each of the approved indications.

So based on this very positive data as well as our continued momentum we will be once again, raising the full year sales outlook for <unk>.

Rob Michael: Moving now to Rinvoq, which delivered global sales of $1.1 billion, reflecting operational growth of nearly 60% with increasing prescriptions across each of the approved indications. In particular, I'm very excited about Rinvoq's growth potential in gastroenterology, where uptake is exceeding our expectations. In ulcerative colitis, Rinvoq is now capturing more than 25% total in-play patient share in the US second-line plus setting, nearly at parity to the current market-leading therapy. In Crohn's disease, Rinvoq is ramping very significantly. The inflection we are seeing is even faster when compared to our timeline launch in UC just last year. Given this impressive momentum in IBD, we will now be raising our full-year sales outlook for Rinvoq. Global Humira sales were more than $3.5 billion, down 36.2% due to biosimilar competition. The erosion impact in the US.

Moving now to <unk>, which delivered global sales of $1 1 billion, reflecting operational growth of nearly 60% with increasing prescriptions across each of the approved indications.

Jeffrey Ryan Stewart: In particular, I'm very excited about Rinvoq's growth potential in gastroenterology, where uptake is exceeding our expectations. And ulcerative colitis, Rinvoq is now capturing more than 25% total in play patient share in the U.S second line plus setting, nearly at parity to the current market leading therapy. And in Crohn's disease, Rinvoq is ramping very significantly. The inflection we're seeing is even faster when compared to our time line launch in UC just last year.

And ulcerative colitis revoke is now capturing more than 25% total in play patient share in the U S. Second line plus setting nearly at parity to the current market leading therapy.

And in Crohn's disease, where invoke is ramping very significantly the inflection we're seeing is even faster when compared to our time line launch and you see just last year.

Jeffrey Ryan Stewart: Given this impressive momentum in IBD, we will now be raising our full year sales outlook for Rinvoq. Global Humira sales were more than $3.5 billion down 36, 2% due to Biosimilar competition. The erosion impact in the U.S played out largely in line with our expectations this quarter, while performance across our international markets is trending better than expected.

Global Humira sales were more than $3 5 billion down 36, 2% due to Biosimilar competition.

Rob Michael: played out largely in line with our expectations this quarter, while performance across our international markets is trending better than expected. Turning now to oncology, where total revenues were $1.5 billion. In Imbruvica, global revenues were $908 million, down 20% and consistent with our expectations. Venclexta global sales were $590 million, up 14% on an operational basis, with strong demand for both CLL and AML across our key countries. The US launch of Epkinli in third-line plus DLBCL is also tracking well, with commercialization also now underway in Europe and Japan following the recent respective approvals. In neuroscience, total revenues were more than $2 billion, up 22% on an operational basis. Vraylar continues to demonstrate robust growth.

The erosion impact in the U S played out largely in line with our expectations this quarter, while performance across our international markets is trending better than expected.

Jeffrey Ryan Stewart: Turning now to oncology, where total revenues were $1.5 billion. Imbruvica global revenues were $908 million down 20% and consistent with our expectations. Venclexta global sales were $590 million, up 14% on an operational basis with strong demand for both CLL and AML across our key countries. The U.S launch of [inaudible] and third line plus DLBCL is also tracking well, with commercialization also now underway in Europe and Japan, following the recent respective approvals.

And <unk> global revenues were $908 million down, 20% and consistent with our expectations.

Then collects the global sales were $590 million up 14% on an operational basis with strong demand for both <unk> and AML across our key countries.

The U S launch of the Kinley and third line plus <unk> is also tracking well with commercialization also now underway in Europe and Japan following the recent respective approvals.

Jeffrey Ryan Stewart: In neuroscience, total revenues were more than $2 billion, up 22% on an operational basis. Vraylar continues to demonstrate robust growth, global sales of $751 million were up 35.4%. And we have seen a significant uplift in new prescriptions across all indications, following the approval as an adjunctive treatment for major depressive disorder late last year. Our leading oral CGRP portfolio for migraine contributed $365 million in combined sales this quarter, reflecting growth of nearly 65%, as we continued to see strong demand for both Ubrelvy and Qulipta.

<unk> continues to demonstrate robust growth global sales of $751 million were up 35, 4%.

Rob Michael: Global sales of $751 million were up 35.4%, and we have seen a significant uplift in new prescriptions across all indications following the approval as an adjunctive treatment for major depressive disorder late last year. Our leading oral CGRP portfolio for migraine contributed $365 million in combined sales this quarter, reflecting growth of nearly 65% as we continue to see strong demand for both Ubrelvy and Qulipta. Atogepant was also recently approved as a new therapy in Europe, branded as Aquipta, where it is the only once-daily oral CGRP for prevention of both episodic and chronic migraine, further strengthening our competitive product profile and long-term growth opportunity. Lastly, total Botox Therapeutic global sales were $748 million, up 7.4% on an operational basis, reflecting momentum in chronic migraine, as well as other approved indications.

And we have seen a significant uplift in new prescriptions across all indications following the approval as an adjunctive treatment for major depressive disorder late last year.

Our leading oral <unk> portfolio for migraine contributed $365 million in combined sales this quarter, reflecting growth of nearly 65% as we continued to see strong demand for both <unk> and <unk> liptak.

Jeffrey Ryan Stewart: Atogepant was also recently approved as a new therapy in Europe, branded as Aquipta, where it is the only once daily oral CGRP for prevention of both episodic and chronic migraine. Further strengthening our competitive product profile and long term growth opportunity. Lastly, total botox therapeutic global sales were $748 million, up seven 7.4% on an operational basis. Reflecting momentum in chronic migraine, as well as other approved indications.

Further strengthening our competitive product profile and long term growth opportunity.

Lastly, total botox therapeutic global sales were $748 million up seven 4% on an operational basis.

Reflecting momentum in chronic migraine as well as other approved indications.

Rob Michael: So overall, I'm extremely pleased with commercial execution across the therapeutic portfolio, especially with our growth platform, which is demonstrating strong revenue growth. And with that, I'll turn the call over to Carrie for additional comments on aesthetics. Carrie?

Jeffrey Ryan Stewart: So, overall I'm extremely pleased with commercial execution across the therapeutic portfolio, especially with our growth platform, which is demonstrating strong revenue growth. And with that, I'll turn the call over to Kerry for additional comments on aesthetics, Gary. Thank you, Jeff third quarter global aesthetic sales were approximately $1 2 billion. An operational decline of 4%. In the U S aesthetic sales of $759 million were roughly flat to last year as growth for botox cosmetic was offset by declines in other brands that continue to be impacted by lower consumer spending related to inflationary pressures.

Carrie Strom: Thank you, Jeff. Q3 global aesthetic sales were approximately $1.2 billion, an operational decline of 4%. In the US, aesthetic sales of $759 million were roughly flat to last year, as growth for Botox Cosmetic was offset by declines in other brands that continue to be impacted by lower consumer spending related to inflationary pressures. US Botox Cosmetic sales were $388 million, an increase of 5%. We are beginning to see a recovery in the US toxin market, which posted positive year-over-year growth in the Q3 following three consecutive quarters of declines due to economic pressures. Botox continues to perform very well despite increasing competition. It remains the clear market leader with a strong and stable share, and we have seen little to no share impact from new competitive entrants. US

Carrie C. Strom: Thank you, Jeff. Third quarter global aesthetic sales were approximately $1.2 billion, an operational decline of 4%. In the U.S, aesthetic sales of $759 million were roughly flat to last year, as growth for botox cosmetic was offset by declines in other brands that continue to be impacted by lower consumer spending related to inflationary pressures. U.S Botox cosmetic sales were $388 million, an increase of 5%. We are beginning to see a recovery in the U.S toxin market, which posted positive year over year growth in the third quarter, following three consecutive quarters of declines, due to economic pressures.

An operational decline of 4%.

In the U S aesthetic sales of $759 million were roughly flat to last year as growth for botox cosmetic was offset by declines in other brands that continue to be impacted by lower consumer spending related to inflationary pressures.

U S. Botox cosmetic sales were $388 million, an increase of 5%. We are beginning to see a recovery in the U S toxin market, which posted positive year over year growth in the third quarter following three consecutive quarters of declines due to economic pressures.

Carrie C. Strom: Botox continues to perform very well, despite increasing competition. It remains the clear market leader with a strong and stable share, and we have seen little to no share impact from new competitive entry. U.S [inaudible] sales were $116 million in the third quarter, a decline of six 4% versus prior year, as recovery in the facial filler market continues to lag the cosmetic toxin market.

Carrie Strom: Juvederm sales were $116 million in Q3, a decline of 6.4% versus prior year, as recovery in the facial filler market continues to lag the cosmetic toxin market. The filler market is improving, however. As a higher-priced, more deferrable procedure relative to toxins, this segment of the aesthetics market continues to be suppressed by lower consumer spending. In Q3, the US facial filler market was down low teens % compared to the prior year. Juvederm remains the market-leading facial filler in the US, and share was stable in the quarter. While the US facial injectable markets continue to be impacted by lower consumer spending in this inflationary environment, we are seeing signs of stabilization and even a return to growth in the cosmetic toxin segment. This gives us confidence in a stable to improving outlook in the US as we end this year and enter 2024.

USG <unk> sales were $116 million in the third quarter, a decline of six 4% versus prior year as recovery in the facial filler market continues to lag the cosmetic toxin market.

Carrie C. Strom: The solar market is improving however, as a higher priced, more deferrable procedure relative to toxins. This segment of the aesthetics market continues to be suppressed by lower consumer spending. In the third quarter, the U.S facial solar market was down [inaudible] percentage compared to the prior year. [inaudible] remains market leader facil solar in the U.S and shares with stable in the quarter. While the U.S facial and injectable market continues to be impacted by lower consumer spending in an inflationary environment, we are seeing signs of stabilization and even a return to growth in the cosmetic toxin segment.

In the third quarter the U S facial filler market was down low teens percentage compared to the prior year.

<unk> remains the market, leading facial seller in the U S and share with stable in the quarter.

While the U S facial injectable markets continue to be impacted by lower consumer spending in this inflationary environment. We are seeing signs of stabilization and even a return to growth in the cosmetic toxin segment.

Carrie C. Strom: This gives us confidence in a stable to improving outlook in the U.S, as we end this year and enter 2024. Internationally. third quarter aesthetic sales were $480 million, representing an operational decline of nine 9.7%. As anticipated, year over year performance in the quarter was impacted by a shipment timing benefit we experienced in the third quarter of last year. Results were also impacted by softening economic conditions across the major international aesthetic markets, primarily China.

Carrie Strom: Internationally, Q3 aesthetic sales were $480 million, representing an operational decline of 9.7%. As anticipated, year-over-year performance in the quarter was impacted by a shipment timing benefit we experienced in Q3 of last year. Results were also impacted by softening economic conditions across major international aesthetic markets, primarily China. Despite the economic pressures that are currently impacting our aesthetics portfolio, we remain very confident in its long-term growth outlook. In September, we began launching SkinVive in the US, and in the next few years, we plan to launch new indications for Botox in the lower face segment and our novel fast-onset, short-duration toxin, BoNT/E. In addition to our R&D programs, we have a robust ALI technology pipeline, which will bring new tech products into the US market to help our customers acquire, retain, and cross-sell more aesthetics patients.

<unk> third quarter aesthetic sales were $480 million, representing an operational decline of nine 7%.

The anticipated year over year performance in the quarter was impacted by a shipment timing benefit we experienced in the third quarter of last year.

The results were also impacted by softening economic conditions across the major international aesthetic markets, primarily China.

Carrie C. Strom: Despite the economic pressures that are currently impacting our aesthetics portfolio, we remain very confident in its long term growth outlook. In September, we began launching [inaudible] in the U.S, and in the next few years, we plan to launch new indications for Botox in the lower face segment and our novel fast onset short duration toxin quantity. In addition to our R&D programs, we have a robust Ali technology pipeline, which will bring new tech products into the U.S market to help our customers acquire, retain and cross-sell more aesthetics patient.

In September we began launching <unk> in the U S and in the next few years, we plan to launch new indications for Botox in the lower face segment and our novel fast onset short duration toxin quantity.

In addition to our R&D programs, we have a robust Ali technology pipeline, which will bring new tech products into the U S market to help our customers acquire retain and cross sell more esthetics patient.

Carrie Strom: Our strong leadership positions in both cosmetic toxins and facial fillers, combined with the significant investments we're making to drive market acceleration, will position us for strong growth going forward. With that, I'll turn the call over to Tom.

Carrie C. Strom: Our strong leadership positions in both cosmetic toxins and facial sellers, combined with the significant investments we're making to drive market acceleration, will position us for strong growth going forward. With that, I'll turn the call over to Tom. Thank you Carrie. In immunology, we had two important milestones in the third quarter for <unk> and inflammatory bowel disease. Following completion of the phase III maintenance trial in ulcerative colitis, we submitted our regulatory applications for <unk> in this indication in the U S and Europe with approval anticipated in 2024.

With that I'll turn the call over to Tom.

Tom Hudson: Thank you, Carrie. In immunology, we had two important milestones in Q3 for Skyrizi in inflammatory bowel disease. Following completion of the phase 3 maintenance trial in ulcerative colitis, we submitted our regulatory applications for Skyrizi in this indication in the US and Europe, with approvals anticipated in 2024. We also recently presented results from the Sequence head-to-head trial comparing Skyrizi to Stelara in patients with moderate to severe Crohn's disease. We're extremely pleased with how Skyrizi performed in this study, which enrolled very difficult-to-treat patients who all failed anti-TNF therapy. Skyrizi met the primary and all secondary endpoints in the trial, demonstrating clear superiority to Stelara on all endpoints at week 48, with a more than doubling of effect in endoscopic remission at 32% of Skyrizi versus 16% for Stelara, and endoscopic response at 45% versus 22% for Stelara.

Thank you Carrie.

Tom Hudson: Thank you, Carrie. In immunology, we had two important milestones in the third quarter for Skyrizi and inflammatory bowel disease. Following completion of the phase III maintenance trial in ulcerative colitis, we submitted our regulatory applications for Skyrizi, in this indication in the U.S and Europe with approval anticipated in 2024. We also recently presented results from the sequence, head to head trial, comparing Skyrizi to Stelara in patients with moderate to severe Crohn's disease. We're extremely pleased with how Skyrizi performed in this study, which enrolled very difficult to treat patients who all failed anti TNF therapy.

In immunology, we had two important milestones in the third quarter for <unk> and inflammatory bowel disease.

Following completion of the phase III maintenance trial in ulcerative colitis, we submitted our regulatory applications for <unk> in this indication in the U S and Europe with approval anticipated in 2024.

We also recently presented results from the sequence head to head trial, comparing <unk> in patients with moderate to severe crohn's disease. We're extremely pleased with how <unk> performed in this study, which enrolled very difficult to treat patients who all failed anti TNF therapy.

Tom Hudson: Skyrizi met the primary and all secondary endpoints in the trial, demonstrating clear superiority to Stelara on all endpoints at week 48, with a more than doubling of effect in endoscopic remission at 32% of Skyrizi versus 16% for Stelara, and endoscopic response at 45% versus 22% for Stelara. Furthermore, steroid free clinical remission was 61% for Skyrizi versus 40% for Stelara.

At 45% versus 22% for stellar <unk>.

Tom Hudson: Furthermore, steroid-free clinical remission was 61% for Skyrizi versus 40% for Stelara. So these compelling head-to-head Crohn's data, combined with the additional indication approval for ulcerative colitis expected next year, will further position Skyrizi as a highly effective, durable, safe, and well-tolerated treatment option for patients with moderate to severe inflammatory bowel disease. We continue to make very good progress with the second wave of Rinvoq development programs as well. In addition to the ongoing phase 3 programs in GCA, lupus, and HS, we recently began the phase 3 program for Rinvoq in alopecia areata. We also recently announced positive top-line results from a phase 2 study for Rinvoq in vitiligo. In this study, Rinvoq met the primary and all secondary endpoints at week 24, demonstrating a significant improvement in both facial and total body vitiligo scoring measures compared to placebo.

Furthermore, steroid free clinical remission with 61% for <unk> versus 40% for Stella.

Tom Hudson: So, these compelling, head to head closed data combined with the additional indication approval for ulcerative colitis expected next year, will further position Skyrizi as a highly effective, durable, safe and well tolerated treatment option for patients with moderate to severe inflammatory bowel disease. We continued to make very good progress with the second wave of Rinvoq, development programs as well, in addition to the ongoing phase III programs in GTA, Lupus and HS. We recently began the phase III program for Rinvoq in Alopecia Areata.

We continued to make very good progress with the second wave of <unk> development programs as well in addition to the ongoing phase III programs in GTA Lupus and Hs. We recently began the phase III program for <unk> in Alopecia <unk>.

Tom Hudson: We also recently announced positive topline results from a phase II study for Rinvoq in vitiligo. In this study Rinvoq met the primary and all secondary endpoints at week 24, demonstrating a significant improvement in both facial and total body vitiligo scoring measures, compared to placebo. Importantly, these results continued to improve through week 52 of the study, illustrating Rinvoq's potential to provide significant skin re-pigmentation to patients suffering from vitiligo.

Tom Hudson: Importantly, these results continued to improve through week 52 of the study, illustrating Rinvoq's potential to provide significant skin repigmentation to patients suffering from vitiligo. Based on these results, we're advancing Rinvoq to phase 3 in this indication, with studies expected to begin soon. Moving to oncology, where in the quarter we received approval in Europe and Japan for epcoritamab as a monotherapy treatment for patients with relapsed or refractory DLBCL who have received two or more systemic therapies. These approvals represent important regulatory milestones for epcoritamab, and we look forward to bringing this new subcutaneous treatment option to patients in these international markets. We also continue to make good progress with the development programs in earlier lines of DLBCL and follicular lymphoma, and we look forward to providing updates on these programs as the data mature.

Importantly, these results continued to improve through week 52 of the study illustrating.

Illustrating <unk> potential to provide significant skin re pigmentation to patients suffering from vitiligo.

Tom Hudson: Based on these results, we are advancing Rinvoq to phase III in this indication with studies expected to begin soon. Moving to oncology, where in the quarter we received approval in Europe, and Japan for [inaudible] as a monotherapy treatment for patients with relapsed or refractory DLBCL, who have received two or more systemic therapies. These approvals represent important regulatory milestones for [inaudible]. And we look forward to bringing this new subcutaneous treatment option to patients in these international markets.

Moving to oncology, where in the quarter, we received approval in Europe, and Japan for <unk> as a monotherapy treatment for patients with relapsed or refractory <unk>, who have received two or more systemic therapies. These approvals represent important regulatory milestones for <unk>.

And we look forward to bringing this new subcutaneous treatment option to patients in these international markets.

Tom Hudson: We also continued to make good progress with the development programs in earlier lines of DLBCL and Follicular lymphoma, and we look forward to providing updates on these programs, as the data mature. In our Venclexta multiple myeloma program, we recently announced topline results for the phase III Qdoba trial, evaluating Venclexta plus dexamethasone, compared to Pom Dex in relapsed refractory patients with a T1114 mutation. In this study, the primary endpoint of IOS CSS PFS was longer with index versus PomDex, but did not meet statistical significance. Venclexta the combination also resulted in numerically higher.

Tom Hudson: In our Venclexta multiple myeloma program, we recently announced top-line results for the phase 3 CANOVA trial evaluating Venclexta plus dexamethasone compared to pomalidomide in relapsed refractory patients with a t(11;14) mutation. In the study, the primary endpoint of IRC-assessed PFS was longer with Venclexta versus pomalidomide, but did not meet statistical significance. The Venclexta combination also resulted in numerically higher response rates and longer overall survival compared to pomalidomide. While the differences in efficacy measures were not statistically significant, we believe the totality of the data shows a benefit with the Venclexta combination, and we plan to discuss the results with regulatory agencies. We'll provide updates on the program as they become available. Beyond Venclexta, we have several exciting multiple myeloma programs emerging from our earlier stage pipeline.

In our <unk> multiple myeloma program, we recently announced topline results for the phase III Qdoba trial evaluating <unk> plus dexamethasone.

Appeared to Pom Dex in relapsed refractory patients with a $11 14 mutation in this study the primary endpoint of iOS CSS PFS was longer with index versus Pom Dex, but did not meet statistical significance. Then collects the combination also resulted in numerically higher.

Tom Hudson: Venclexta combination also resulted in numerically higher response rates and longer overall survival, compared to PomDex, while the differences in efficacy measures were not statistically significant, we believe the totality of the data show a benefit with the Venclexta combination and we plan to discuss the results with regulatory agencies, We will provide updates on the program as they become available. Behind Venclexta, we have several exciting, multiple myeloma programs emerging from our earlier stage pipeline, we continue to make good progress with our BCMA-CD3 Bispecific [inaudible], we're nearing completion of the dose optimization work, and are on track to begin phase III studies in the first half of next year. At an upcoming medical meeting we plan to present updated phase one efficacy. Safety results as well as monthly administration dose data. We're also making good progress with our next generation Bcl two inhibitor <unk> 453, which is currently in phase one studies and. And we will provide updates as the data become available.

<unk> rates and longer overall survival compared to pom dex, while the differences in efficacy measures would not statistically significant we believe the totality of the data show a benefit with the van collects the combination and we plan to discuss the results with regulatory agencies, we will provide updates on the program.

They become available.

Behind <unk>, we have several exciting multiple myeloma programs emerging from our earlier stage pipeline, we continue to make good progress with our <unk> bi specific <unk> III.

Tom Hudson: We continue to make good progress with our BCMA CD3 bispecific ABV-383, where we're nearing completion of the dose optimization work and are on track to begin Phase 3 studies in the first half of next year. At an upcoming medical meeting, we plan to present updated Phase 1 efficacy and safety results, as well as monthly administration dose data. We're also making good progress with our next generation BCL-2 inhibitor ABV-453, which is currently in Phase 1 studies, and we'll provide updates as the data become available. Now moving to neuroscience, where in the quarter we received approval for Aquipta in Europe, which is now the only oral CGRP antagonist approved in Europe for prevention of both episodic and chronic migraine. And lastly, in our aesthetics pipeline, we recently announced top-line results from a second Phase 3 study evaluating Botox in platysma prominence.

We're nearing completion of the dose optimization work.

Tom Hudson: And are on track to begin phase III studies in the first half of next year. At an upcoming medical meeting we plan to present updated phase one efficacy. Safety results as well as monthly administration dose data. We're also making good progress with our next generation Bcl two inhibitor <unk> 453, which is currently in phase one studies and. And we will provide updates as the data become available.

Tom Hudson: At an upcoming medical meeting, we plan to present updated phase one efficacy and safety results as well as monthly administration data. We're also making good progress with our next generation BCL2 inhibitor EBBD453, which is currently in phase one studies and we will provide updates as the data become available. Now, moving to neuroscience, where in the quarter we received approval for Aquipta on Europe, which is now the only oral CGRP antagonist approved in Europe, for prevention of both episodic and chronic migraine.

At an upcoming medical meeting we plan to present updated phase one efficacy.

Safety results as well as monthly administration dose data.

We're also making good progress with our next generation Bcl two inhibitor <unk> 453, which is currently in phase one studies and.

And we will provide updates as the data become available.

Now moving to neuroscience, where in the quarter. We received approval for equipped on Europe, which is now the only oral <unk> antagonist approved in Europe for prevention of both episodic and chronic migraine.

Tom Hudson: And lastly, in our aesthetics pipeline, we recently announced topline results from our second phase III study evaluating Botox in platysma prominence, similar to results from the first phase III study, all primary and secondary endpoints were met. With Botox demonstrating a significant reduction in platysma prominence and vertical neck bands. We anticipate a regulatory submission in the U.S near the end of the year.

Tom Hudson: Similar to results from the first phase 3 study, all primary and secondary endpoints were met, with Botox demonstrating a significant reduction in platysma prominence and vertical neck bands. We anticipate a regulatory submission in the US near the end of the year. In addition to indication expansion for Botox, we continue to advance our novel toxin pipeline. We recently announced positive top-line results from two phase 3 trials evaluating BoNT/E, our rapid-onset, short-acting novel toxin in glabellar lines. BoNT/E performed very well in both studies, meeting the primary and all secondary endpoints compared to placebo. BoNT/E was well tolerated, and no safety concerns were identified. We're very pleased with these results, which demonstrate this toxin's rapid onset of action and short duration of effect.

With Botox is demonstrating a significant reduction infosys my provenance and vertical nexsan.

We anticipate a regulatory submission in the U S. The end of the year.

Tom Hudson: In addition to indication expansion for Botox, we continued to advance our novel toxin pipeline, we recently announced positive topline results from two phase III trials, evaluating BoNT, our rapid onset, short acting novel toxin in glabellar lines. BoNT performed very well in both studies, meeting the primary and all secondary endpoints compared to placebo. BoNT was well tolerated and no safety concerns were identified.

<unk> performed very well in both studies meeting the primary and all secondary endpoints compared to placebo <unk> was well tolerated and no safety concerns were identified.

Tom Hudson: We're very pleased with these results, which demonstrate these toxins rapid onset of action and short duration of effect. Patients treated with BoNT showed an improvement in glabellar lines, as early as eight hours following injection and a duration of effect of two to three weeks. This highly differentiated clinical profile could offer patients a novel option compared to currently available neurotoxins. We plan to complete the remaining development work over the course of the next few quarters and anticipate submitting our regulatory applications in the second half of next year.

Tom Hudson: Patients treated with BoNT/E showed an improvement in glabellar lines as early as eight hours following injection and a duration of effect of two to three weeks. This highly differentiated clinical profile could offer patients a novel option compared to currently available neurotoxins. We plan to complete the remaining development work over the course of the next few quarters and anticipate submitting our regulatory applications in the second half of next year. So in summary, we continue to make good progress across all stages and therapeutic areas of our pipeline, and we look forward to several more important milestones in the remainder of this year, including phase two data for Teliso-V in second line plus advanced non-squamous non-small cell lung cancer, which has the potential to support an accelerated approval. Phase two proof of concept data for our anti-IL-1 alpha beta bispecific antibody lutikizumab in hidradenitis suppurativa.

This highly differentiated clinical profile could offer patients a novel option compared to currently available neurotoxins.

We plan to complete the remaining development work over the course of the next few quarters and anticipate submitting our regulatory applications in the second half of next year.

Tom Hudson: So, in summary, we continue to make good progress across all stages and therapeutic areas of our pipeline and we look forward to several more important milestones in the remainder of this year, including phase two data for [inaudible] in second line plus invest non squamous, non small cell lung cancer. Which has the potential to support an accelerated approval. Phase II proof of concept data for our anti IL1 alpha beta bispecific antibody lutikizumab and hydrogenitis supppurativa.

Which has the potential to support an accelerated approval.

Phase II proof of concept data for our anti IL, one alpha beta by specific antibody <unk> and hydrogen itis Super of Tivo.

Tom Hudson: Regulatory approval in Europe for ABV-951, our novel subcutaneous levodopa/carbidopa delivery system for advanced Parkinson's disease. We also plan to submit updated 951 data in the US near the end of the year. With that, I'll turn the call over to Scott.

Tom Hudson: And regulatory approval in Europe for ABDB951, our novel subcutaneous level carbidopa delivery system for advanced Parkinson's disease. We also plan to submit updated 951 data in the U.S near the end of the year. With that, I'll turn the call over to Scott.

We also plan to submit updated 95, one data in the U S near the end of the year.

With that I'll turn the call over to Scott.

Scott Reents: Thank you, Tom. I'm very pleased with the momentum of our business. The strong performance we are demonstrating from our immunology Growth platform continues to support AbbVie's long-term growth outlook. Starting with our Q3 results, we reported adjusted earnings per share of $2.95, which is $0.14 above our guidance midpoint. These results include a $0.04 unfavorable impact from acquired IPR&D expense. Total net revenues were $13.9 billion, roughly $225 million ahead of our guidance, and down 5.8% on an operational basis, excluding a 0.2% unfavorable impact from foreign exchange. Importantly, these results reflect double-digit sales growth from our immunology Growth platform. The adjusted operating margin ratio was 46.7% of sales. This includes adjusted gross margin of 83.5% of sales, adjusted R&D investment of 12.4% of sales, acquired IPR&D expense of 0.5% of sales, and adjusted SG&A expense of 23.9% of sales.

Scott T. Reents: Thank you, Tom. I am very pleased with the momentum of our business. The strong performance we are demonstrating from our ex-Humira growth platform continues to support AbbVie's long term growth outlook. Starting with our third quarter results, we reported adjusted earnings per share of $2.95. Which is 14c Above our guidance midpoint.

I am very pleased with the momentum of our business. The strong performance. We are demonstrating from our ex Humira growth platform continues to support <unk> long term growth outlook.

Starting with our third quarter results, we reported adjusted earnings per share of $2 95.

Which is <unk> 14.

Above our guidance midpoint.

Scott T. Reents: These results include a [inaudible] unfavorable impact from acquired IPR&D expense. Total net revenues were $13.9 billion. Roughly $225 million ahead of our guidance and down five 5.8% on an operational basis, excluding a 0.2% unfavorable impact from foreign exchange. Importantly, these results reflect double digit sales growth from our ex-Humira growth platform. The adjusted operating margin ratio was 46.7% of sales. This includes adjusted gross margin of 83.5% of sales, adjusted R&D investment of 12.4% of sales, acquired IPR&D expense of 0.5% of sales and adjusted SG&A expense of 23.9% of sales.

Total net revenues were $13 9 billion.

Roughly $225 million ahead of our guidance and down five 8% on an operational basis, excluding a 0.2% unfavorable impact from foreign exchange.

Importantly, these results reflect double digit sales growth from our ex humira growth platform.

The adjusted operating margin ratio was 46, 7% of sales.

This includes adjusted gross margin of 83, 5% of sales.

Adjusted R&D investment of 12, 4% of sales.

<unk> IP R&D expense of 0.5% of sales and.

And adjusted SG&A expense of 23, 9% of sales.

Scott Reents: Net interest expense was $398 million. The adjusted tax rate was 15.7%. Turning to our financial outlook, we are raising the midpoint of our full-year adjusted earnings per share guidance by $0.25 and now expect adjusted earnings per share between $11.19 and $11.23. This guidance does not include an estimate for acquired IPR&D expense that may be incurred in the fourth quarter. We now expect total net revenues of approximately $54 billion, an increase of $600 million. At current rates, we expect foreign exchange to have a 0.5% unfavorable impact on full-year sales growth. The updated revenue forecast contemplates a full-year sales increase of $300 million, roughly split evenly between Skyrizi and Rinvoq, reflecting strong uptake in IBD. The remaining $300 million full-year sales increase is primarily attributed to better-than-expected performance of international Humira and Restasis.

Scott T. Reents: Net interest expense was $398 million, the adjusted tax rate was 15.7%. Turning to our financial outlook, we are raising the midpoint of our full year adjusted earnings per share guidance by 25c. And now expect adjusted earnings per share between $11,19 and $11,23. This guidance does not include an estimate for acquired IPR&D expense that may be incurred in the fourth quarter.

Turning to our financial outlook.

We are raising the midpoint of our full year adjusted earnings per share guidance by 25.

And now expect adjusted earnings per share between $11 and 19.

And $11 23.

This guidance does not include an estimate for acquired IP R&D expense that may be incurred in the fourth quarter.

Scott T. Reents: We now expect total net revenues of approximately $54 billion. An increase of $600 million. At current rates, we expect foreign exchange to have a 0.5% unfavorable impact on full year sales growth. The updated revenue forecast contemplates. A full year sales increase of $300 million. Roughly split evenly between Sky <unk> and revoke. Reflecting strong uptake in IBD. The remaining $300 million full year sales increase is primarily attributed to better than expected performance of international Humira and Restasis. Moving to the P&L, we continue to forecast an adjusted operating margin ratio of approximately 46, 5% of sales.

Scott T. Reents: We now expect total net revenues of approximately $54 billion. An increase of $600 million. At current rates, we expect foreign exchange to have a 0.5% unfavorable impact on full year sales growth. The updated revenue forecast contemplates a full year sales increase of $300 million, roughly split evenly between Skyrizi and Rinvoq, reflecting strong uptake in IBD. The remaining $300 million full year sales increase is primarily attributed to better than expected performance of international Humira and Restasis.

An increase of $600 million.

At current rates, we expect foreign exchange to have a 0.5% unfavorable impact on full year sales growth.

The updated revenue forecast contemplates.

A full year sales increase of $300 million.

Roughly split evenly between Sky <unk> and revoke.

Reflecting strong uptake in IBD.

The remaining $300 million full year sales increase is primarily attributed to better than expected performance of international Humira and Restasis.

Scott Reents: Moving to the P&L, we continue to forecast an adjusted operating margin ratio of approximately 46.5% of sales. We now expect adjusted net interest expense of roughly $1.7 billion. We forecast our non-GAAP tax rate to be approximately 15.5%, reflecting IPR&D occurred through the third quarter. Turning to the fourth quarter, we anticipate net revenues of approximately $14 billion. At current rates, we expect foreign exchange to have a modest unfavorable impact on sales growth. We expect adjusted earnings per share between $2.87 and $2.91. This guidance does not include acquired IPR&D expense that may be incurred in the quarter. Finally, AbbVie's strong business performance continues to support our capital allocation priorities. We generated more than $16.5 billion of adjusted free cash flow, which is net of approximately $1.1 billion of Skyrizi royalty payments in the first nine months of the year.

Scott T. Reents: Moving to the P&L, we continue to forecast an adjusted operating margin ratio of approximately 46.5% of sales. We now expect adjusted net interest expense of roughly $1.7 billion. And we forecast our non-GAAP tax rate to be approximately 15.5%, reflecting the IPR&D occurred through the third quarter. Turning to the fourth quarter, we anticipate net revenues of approximately $14 billion. At current rates, we expect foreign exchange to have a modest unfavorable impact on sales growth.

Moving to the P&L, we continue to forecast an adjusted operating margin ratio of approximately 46, 5% of sales.

We now expect adjusted net interest expense of roughly $1 7 billion.

And we forecast our non-GAAP tax rate to be approximately 15, 5%, reflecting the IP R&D occurred through the third quarter.

Turning to the fourth quarter, we anticipate net revenues of approximately $14 billion.

At current rates, we expect foreign exchange to have a modest unfavorable impact on sales growth.

Scott T. Reents: We expect adjusted earnings per share between $2,87 and $2,91. This guidance does not include acquired IPR&D expense that may be incurred in the quarter. Finally, AbbVie's strong business performance continues to support our capital allocation priorities. We generated more than $16.5 billion of adjusted free cash flow, which is net of approximately $1.1 billion of Skyrizi royalty payments in the first nine months of the year. And our cash balance at the end of September was approximately $13.3 billion.

And $2 91.

This guidance does not include acquired IP R&D expense that may be incurred in the quarter.

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

We generated more than $16 5 billion.

Adjusted free cash flow, which is net of approximately $1 1 billion of Sky <unk> royalty payments.

In the first nine months of the year.

Scott Reents: Our cash balance at the end of September was approximately $13.3 billion. Underscoring our confidence in AbbVie's long-term outlook, today we announced a 4.7% increase in our quarterly cash dividend, beginning with a dividend payment in February 2024. We remain on track to achieve, by the end of this year, $34 billion of cumulative debt paydown since the Allergan transaction, maintaining a net leverage ratio around 1.8 times. In closing, AbbVie has once again delivered outstanding results, and our financial outlook remains very strong. With that, I'll turn the call over to Liz.

And our cash balance at the end of September was approximately $13 $3 billion.

Scott T. Reents: Underscoring our confidence in AbbVie's long term outlook, today we announced a 4.7% increase in our quarterly cash dividend, beginning with the dividend payment in February of 2024. And we remain on track to achieve by the end of this year $34 billion of cumulative debt paydown, since the Allergan transaction. Maintaining our net leverage ratio around 1.8 times. In closing, AbbVie has once again delivered outstanding results, and our financial outlook remains very strong. With that, I'll turn the call over to Liz.

Beginning with the dividend payment.

In February of 2024.

And we remain on track to achieve by the end of this year $34 billion of cumulative debt paydown since the Allergan transaction.

Maintaining our net leverage ratio around one eight times.

Scott T. Reents: In closing, AbbVie has once again delivered outstanding results, and our financial outlook remains very strong. With that, I'll turn the call over to Liz. 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.

Scott T. Reents: In closing, AbbVie has once again delivered outstanding results, and our financial outlook remains very strong. With that, I'll turn the call over to Liz.

With that I'll turn the call over to list.

Liz Shea: Thanks, Scott. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to one or two. Operator, we'll take the first question, please.

Liz Shea: Thanks, Scott. We will now open the call for questions in the interest of hearing from as many analysts as possible, over the remainder of the call, we ask that you please limit your questions to one or two. Operator, we'll take the first question. Please.

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.

Operator: Yes. Our first question comes from Chris Shibutani with Goldman Sachs. Your line is open.

Operator: Yes. My first question comes from Chris Shibutani, with Goldman Sachs. Your line is open.

[Analyst]: Thank you very much. Good morning. The 2024 earnings guidance, it seemed as if you were quite confident heading in that $11 floor. As we await further details from top-line and other margin structures, can you maybe identify some of the key push pulls that actually gave you that conviction to go to $11 and where directionally we should be thinking about the source of further growth on the forward? Thank you.

Chris Shibutani: Thank you very much. Good morning. The 2024 earnings guidance, it seemed as if you were quite confident heading in that $11 floor. As we await further details from top-line and other margin structures, can you maybe identify some of the key push pulls that actually gave you that conviction to go to $11 and where directionally we should be thinking about the source of further growth on the forward? Thank you.

Chris Shibutani: Thank you very much, good morning. The 2024 earnings guidance, it seems as if you were quite confident heading in that $11 floor, as we await further details from topline and other margin structures. Can you maybe identify some of the key push pulls that actually gave you that conviction to go to above them, and where directionally, we should be thinking about the source of further growth on the floor? Thank you.

That $11 floor as we await further details from topline and other margin structures can you maybe identify some of the key push calls that actually gave you that conviction at boto above them and we're directionally, we should be thinking about the source of further growth on the floor. Thank you.

Scott Reents: Hi, Chris. It's Rob. I'll take that question. So since we provided that guidance in February, recall we gave the $10.70 EPS floor to really help investors model earnings regardless of whether the trough occurred in 2023 or 2024. We've raised growth platform sales by $1.4 billion covering immunology, neuroscience, and aesthetics. We're seeing the IBD indications for Skyrizi and Rinvoq ramp very nicely, and we continue to capture more share in their other indications. Both Vraylar and our migraine portfolio have outperformed our share forecast, and the strong recovery of Botox has led us to raise guidance for aesthetics twice this year. So given the clear overperformance of the growth platform, we decided to raise the floor to $11 ex IPR&D.

Rob Michael: Hi, Chris. It's Rob. I'll take that question. So since we provided that guidance in February, recall we gave the $10.70 EPS floor to really help investors model earnings regardless of whether the trough occurred in 2023 or 2024. We've raised growth platform sales by $1.4 billion covering immunology, neuroscience, and aesthetics. We're seeing the IBD indications for Skyrizi and Rinvoq ramp very nicely, and we continue to capture more share in their other indications. Both Vraylar and our migraine portfolio have outperformed our share forecast, and the strong recovery of Botox has led us to raise guidance for aesthetics twice this year. So given the clear overperformance of the growth platform, we decided to raise the floor to $11 ex IPR&D.

Robert Michael: Hi, Chris, it's Rob, I'll take that question. So, since we provided that guidance in February, you'll recall we gave the 1070 EPS floor to really help investors model earnings regardless of whether the troffer occurred in '23 '24. We've raised growth platform sales by $1.4 billion covering immunology neuroscience and aesthetics, we're seeing the IBD indications for Skyrizi and Rinvolq ramped very nicely and we continue to capture more share and there are other indications.

Rune bulk ramped very nicely and we continue to capture more share and there are other indications.

Robert Michael: Vraylar and our migraine portfolio have outperformed our share forecast and a strong recovery of Botox has led us to raise guidance for aesthetics twice this year. So, given the clear over performance of the growth platform, we decided to raise the floor to $11 XIPRD. We hope this provides investors with a view of the low end of the 2024 guidance range and also confirms that '24 will indeed be the trough year. And given that we expect to deliver a high single digit CAGR from '24 to the end of decade, it should allow investors to value of the company with a better growth multiple.

Scott Reents: We hope this provides investors with a view of the low end of the 2024 guidance range and also confirms that 2024 will indeed be the trough year. Given that we expect to deliver a high single-digit CAGR from 2024 to the end of the decade, it should allow investors to value the company with a better growth multiple.

Rob Michael: We hope this provides investors with a view of the low end of the 2024 guidance range and also confirms that 2024 will indeed be the trough year. Given that we expect to deliver a high single-digit CAGR from 2024 to the end of the decade, it should allow investors to value the company with a better growth multiple.

We will indeed be the trough year and given that we expect to deliver a high single digit CAGR from 24 to the end of decade. It should allow investors to value of the company with a better growth multiple.

Liz Shea: Thanks, Chris. Operator, next question, please.

Liz Shea: Thanks, Chris. Operator, next question please.

Operator: Yes. Our next question comes from Mohit Bansal with Wells Fargo. Your line is open.

Operator: Yes. Our next question comes from Mohit Bansal, with Wells Fargo. Your line is open.

[Analyst]: Great. Thank you very much for taking my question. I have a question regarding aesthetics. So it seems like you are keeping the guidance here. So the first part of the question is, it seems like across the board there is a 10% quarter-over-quarter decline on all the products. Can you help us understand what's happening sequentially? And then if you are keeping the guidance, it seems like there would be quite a bump in Q4. So how should we think about that?

Mohit Bansal: Great. Thank you very much for taking my question. I have a question regarding aesthetics. So it seems like you are keeping the guidance here. So the first part of the question is, it seems like across the board there is a 10% quarter-over-quarter decline on all the products. Can you help us understand what's happening sequentially? And then if you are keeping the guidance, it seems like there would be quite a bump in Q4. So how should we think about that?

Mohit Bansal: Great. Thank you very much for taking my question. I have a question regarding tactic. So, it seems like you are keeping the guidance here, the first part of the question is, it seems like across the board there is a 10% quarter over quarter decline on all the progress. Can you help us understand what's happening, sequentially? And then, if you are keeping the guidance, it seems like there would be quite a bump in fourth quarter. So, how should we think about that?

I have a question regarding a tactic. So it seems like you are keeping the guidance here.

So the first part of the question is it seems like across the board there is a 10% quarter over quarter decline on all the progress can you help us understand what's happening sequentially and then if you are keeping the guidance. It seems like they would be quite a bump in fourth quarter. So how should we think about that.

Scott Reents: Maybe I'll start. This is Rob. I'll start with your question. So one thing to keep in mind is that we mentioned in the last call that we had some dynamics in the international market when you look at the growth rates where we had more difficult comparison because of some of the stocking that occurred in the prior year. So that's something to keep in mind. We also do have a certain amount of seasonality that occurs in our business in the US in particular. So those are things to keep in mind. I'd say as we look at it, we're very encouraged by the return to growth of the US toxin market. Botox is performing very well, and we're certainly doing a very nice job maintaining our share position despite competitive pressure. So I'd say we're very pleased there.

Rob Michael: Maybe I'll start. This is Rob. I'll start with your question. So one thing to keep in mind is that we mentioned in the last call that we had some dynamics in the international market when you look at the growth rates where we had more difficult comparison because of some of the stocking that occurred in the prior year. So that's something to keep in mind. We also do have a certain amount of seasonality that occurs in our business in the US in particular. So those are things to keep in mind. I'd say as we look at it, we're very encouraged by the return to growth of the US toxin market. Botox is performing very well, and we're certainly doing a very nice job maintaining our share position despite competitive pressure. So I'd say we're very pleased there.

Robert Michael: Maybe I'll start, this is Rob, I'll start with your question. One thing to keep in mind is that, we mentioned in last call that we had some dynamics in the international market, when you look at the growth rates, where we had more difficult comparison because of some of the set some stocking that occurred in the prior year is that something to keep in mind.

Robert Michael: We also do have a certain amount of seasonality that occurs in our business, in the U.S in particular, so those are things to keep in mind. I'd say, as we look at it, we're very encouraged by the return to growth of the U.S toxin market, Botox's performing very well and we're certainly doing a very nice job maintaining our share position, despite competitive pressure.

Scott Reents: I'd say on fillers, what we're seeing is probably more of a lag in the recovery. We've studied this market historically. We do tend to see a lag, and that's really relative to, if you think about, the price point for fillers versus toxins. It's natural to assume that the recovery will take a little bit longer. So we are seeing that recovery take a little bit longer. We're still very, very encouraged by the trends we're seeing. We're very excited about the new fillers we've launched, both SkinVive and Volux. We're starting to see some nice share momentum come from those new introductions. So from that standpoint, we feel very good.

Rob Michael: I'd say on fillers, what we're seeing is probably more of a lag in the recovery. We've studied this market historically. We do tend to see a lag, and that's really relative to, if you think about, the price point for fillers versus toxins. It's natural to assume that the recovery will take a little bit longer. So we are seeing that recovery take a little bit longer. We're still very, very encouraged by the trends we're seeing. We're very excited about the new fillers we've launched, both SkinVive and Volux. We're starting to see some nice share momentum come from those new introductions. So from that standpoint, we feel very good.

Robert Michael: So I'd say, we're very pleased there. I'd say on fillers, what we're seeing is probably more of a lag in the recovery and we've studied this market historically, we do tend to see a lag and that's really relative to - if you think about the price point, for fillers versus toxins, it's natural to assume that the recovery will take a little bit longer. So, we are seeing that recovery take little bit longer. We are still very very encouraged by the trends we're seeing. We're very excited about the new fillers we've launched, both Skinvive and [inaudible], we're starting to see some nice share momentum come from those new introductions. From that standpoint, we feel very good. and then as we've been monitoring.

For fillers versus toxins.

Natural to assume that the recovery will take a little bit longer. So we are seeing that recovery take little bit longer. We are still very very encouraged by the trends. We're seeing we're very excited about the new fillers, we've launched both skin veeva vault <unk>, we're starting to see some nice share momentum come from those new introductions and so from that standpoint, we feel very good and then as we've been monitoring.

Scott Reents: Then as we've been monitoring the situation in China, as all of you, I'm sure, have been watching very carefully, we saw, as you recall, a very strong recovery in the first half of the year. We've seen it moderate, and we're keeping a close eye on that. That's something we're obviously paying a lot of attention to. Now we look at the rest of the international business. It's growing nicely. As I think about the guidance for this year, I'd say we're fairly close. I'm not overly concerned. We don't adjust guidance for ±$100 million. If it was greater than that, we would consider it. That's something to keep in mind. But as we look at the long-term outlook for this business, we're very confident. If you think about the US.

Rob Michael: Then as we've been monitoring the situation in China, as all of you, I'm sure, have been watching very carefully, we saw, as you recall, a very strong recovery in the first half of the year. We've seen it moderate, and we're keeping a close eye on that. That's something we're obviously paying a lot of attention to. Now we look at the rest of the international business. It's growing nicely. As I think about the guidance for this year, I'd say we're fairly close. I'm not overly concerned. We don't adjust guidance for ±$100 million. If it was greater than that, we would consider it. That's something to keep in mind. But as we look at the long-term outlook for this business, we're very confident. If you think about the US.

Robert Michael: And then, as we've been monitoring the situation in China, as all of you I'm sure have been watching very carefully, we saw as you recall, a very strong recovery in the first half of the year, we've seen it moderate and we're keeping a close eye on that. That's something we're obviously paying a lot of attention to and how we look at the rest of the international business, it's growing nicely.

The situation in China as all of you I'm sure have been watching very carefully we saw as you recall a very strong recovery in the first half of the year, we've seen it moderate and we're keeping a close eye on that and so that's something we're obviously paying a lot of attention to and how we look at the rest of the international business, it's growing nicely.

Robert Michael: I think about the guidance for this year, I'd say we're fairly close, we're not overly concerned. We don't adjust guidance for plus or minus $100 million, if it was greater than that, we would consider it. So, that's something to keep in mind, but as we look at this, the long term outlook for this business, we're very confident. And we think about the U.S toxins market has historically grown in the mid teens and it's still heavily underpenetrated in the low single digits. And market growth is really the key to deliver on our long term outlook.

I'd say, we're fairly close I, we're not overly concerned we don't adjust guidance for plus or minus $100 million. If it was greater than that we would consider it. So that's something to keep in mind, but as we look at this the long term outlook for this business were very confident and we think about the use toxins market has historically grown in the mid teens and it's.

Scott Reents: neurotoxins market, it's historically grown in the mid-teens, and it's still heavily underpenetrated in the low single digits. Market growth is really the key to deliver on our long-term outlook. We've seen this market rebound very strongly following a period of economic pressure, and we've demonstrated time and again that we can increase new patient starts through our promotional efforts. Something I think probably isn't appreciated is that we do have several innovations that can accelerate that growth. I mean, you think about the masseter and platysma indications for Botox. Those can each add a few hundred million dollars. Our novel short-acting toxin, BoNT/E, has the potential to activate new patients. That could really drive an inflection in market growth. As you think about one of the biggest barriers for new patients, it is fear of an unnatural look.

Rob Michael: neurotoxins market, it's historically grown in the mid-teens, and it's still heavily underpenetrated in the low single digits. Market growth is really the key to deliver on our long-term outlook. We've seen this market rebound very strongly following a period of economic pressure, and we've demonstrated time and again that we can increase new patient starts through our promotional efforts. Something I think probably isn't appreciated is that we do have several innovations that can accelerate that growth. I mean, you think about the masseter and platysma indications for Botox. Those can each add a few hundred million dollars. Our novel short-acting toxin, BoNT/E, has the potential to activate new patients. That could really drive an inflection in market growth. As you think about one of the biggest barriers for new patients, it is fear of an unnatural look.

Still heavily underpenetrated in the low single digits and market growth is really the key to deliver on our long term outlook.

Robert Michael: We've seen this market rebound very strongly following a period of economic pressure, and we've demonstrated time and again that we can increased new patient starts to our promotional efforts. And something I think probably isn't appreciated, is that we do have several innovations that can accelerate that growth. You think about the masseter and platysma indications for Botox, those can each add a few hundred million dollars. Our novel short acting toxin BoNT has the potential to activate new patients, that could really drive an inflection in market growth. As you think about one of the biggest barriers for new patients is fear of unatural look, and the short acting toxin opportunity is a great way to unlock that. And then, if you look at our regenerative fillers pipeline, those are aimed at providing both short and long term treatment benefits for consumers.

Well short acting toxin bond T has the potential to activate new patients that could really drive an inflection in market growth as you think about one of the biggest barriers for new patients is fear of a natural look and the short acting toxin opportunity is a great way to unlock that and then if you look at our regenerative fillers pipeline those are aimed at providing both short and long term treatment benefits for consumers.

Scott Reents: The short-acting toxin opportunity is a great way to unlock that. Then if you look at our regenerative fillers pipeline, those are aimed at providing both short- and long-term treatment benefits for consumers. As I mentioned, we're also very excited about the new fillers we launched, both SkinVive and Volux. With this business, you see us go through some cycles with economic pressure, but over the long term, we feel very confident that we can certainly deliver very robust growth and deliver on that greater than $9 billion expectation for 2029.

Rob Michael: The short-acting toxin opportunity is a great way to unlock that. Then if you look at our regenerative fillers pipeline, those are aimed at providing both short- and long-term treatment benefits for consumers. As I mentioned, we're also very excited about the new fillers we launched, both SkinVive and Volux. With this business, you see us go through some cycles with economic pressure, but over the long term, we feel very confident that we can certainly deliver very robust growth and deliver on that greater than $9 billion expectation for 2029.

Robert Michael: And then, if you look at our regenerative fillers pipeline, those are aimed at providing both short and long term treatment benefits for consumers. And as I mentioned, we're also very excited about the new floors we've launched, both Skinvive and [inaudible]. So, with this business, you see us go through some cycles with economic pressure, but over the long term, we feel very confident that we can certainly deliver very robust growth and deliver on that greater than $9 billion expectation for 2029.

And as I mentioned, we're also very excited about the new floor as we launch boats can be even <unk>. So.

With this business you see us go through some cycles with economic pressure, but over the long term, we feel very confident that we can certainly deliver very robust growth and deliver on that greater than $9 billion expectation for 2029.

[Analyst]: Mohit, this is Rick. The other thing, if you're looking at it sequentially, you have to keep in mind is we do Botox Therapeutic in the Q4. So that elevates revenue in the Q4, and that occurs every year. So if you're looking at Q3 to Q4 and trying to understand why is there a big step up, part of that step up is that.

Rick Gonzalez: Mohit, this is Rick. The other thing, if you're looking at it sequentially, you have to keep in mind is we do Botox Therapeutic in the Q4. So that elevates revenue in the Q4, and that occurs every year. So if you're looking at Q3 to Q4 and trying to understand why is there a big step up, part of that step up is that.

Rick Gonzalez: Mohit, this is Rick, the other thing if you're looking at it sequentially, you have to keep in mind is we do Botox a day in the fourth quarter, so that elevates revenue in the fourth quarter. And that occurs every year. If you're looking at third quarter to fourth quarter and trying to understand why is there a big step up, part of that step up is that.

And that occurs every year.

Third quarter to fourth quarter I'm trying to understand why is there a big step up part of that step up is that.

Liz Shea: Okay. Thanks, Mohit. Operator, next question, please.

Liz Shea: Thanks, Mohit. Operator, next question please.

Thanks, Mohit operator next question please.

Operator: Yes. Our next question comes from Chris Schott with J.P. Morgan. Your line is open.

Operator: Yes. Our next question comes from Chris Schott, with JP Morgan. Your line is open.

Liz Shea: Great. Thanks so much. Just maybe a two-parter really focused on immunology for 2024. So maybe first on Skyrizi and Rinvoq, I guess with more of the 2024 formulary discussions complete, we're seeing some great volume trends. But are you still comfortable that we should expect more normalized price erosion for those two products versus the high single digits we're seeing this year? And then the second one was on Humira for 2024. I think, Rob, you might have commented last quarter on your comfort with where consensus sits. And again, maybe similar question with maybe more color about formulary for next year. Is that something you're still comfortable? And just how should we think about dynamics there? Thank you.

Chris Schott: Great. Thanks so much. Just maybe a two-parter really focused on immunology for 2024. So maybe first on Skyrizi and Rinvoq, I guess with more of the 2024 formulary discussions complete, we're seeing some great volume trends. But are you still comfortable that we should expect more normalized price erosion for those two products versus the high single digits we're seeing this year? And then the second one was on Humira for 2024. I think, Rob, you might have commented last quarter on your comfort with where consensus sits. And again, maybe similar question with maybe more color about formulary for next year. Is that something you're still comfortable? And just how should we think about dynamics there? Thank you.

Chris Schott: Great, thanks so much. Just maybe a two part, really focused on immunology for 2024. Maybe, first on Skyrizi and Rinvoq, I guess with more of the 24 formulary discussions complete we're seeing great volume trends, but are you still comfortable that we should expect more normalized price erosion for those two products, versus the high single digits we're seeing this year?

Chris Schott: And then, the second one was on Humira for 2024, I think Rob, you might have commented last quarter of your comfort with where consensus sits and again, maybe similar question with maybe more color about formulary for next year. Is that something you are still comfortable and just how should we think about dynamics there? Thank you.

[Analyst]: Yeah. Thank you, Chris and Shea. I'll take the first question. Yeah, we're very comfortable as we see things start to evolve and close here as we move into 2024. I mean, if you think about all the indications that we've had, seven over the last 18 months. I highlighted in my remarks nine head-to-head trials. We're just in a very, very nice position for Skyrizi and Rinvoq as we move into 2024 to continue some very strong momentum that we're seeing in the actual. So quite confident in terms of how we're looking at that. And to your key point there on the price, we continue to see that we're not going to have a repeat of what we saw this year. And remember the background there were those seven indications that came very fast, all on top of each other.

Rick Gonzalez: Yeah. Thank you, Chris and Shea. I'll take the first question. Yeah, we're very comfortable as we see things start to evolve and close here as we move into 2024. I mean, if you think about all the indications that we've had, seven over the last 18 months. I highlighted in my remarks nine head-to-head trials. We're just in a very, very nice position for Skyrizi and Rinvoq as we move into 2024 to continue some very strong momentum that we're seeing in the actual. So quite confident in terms of how we're looking at that. And to your key point there on the price, we continue to see that we're not going to have a repeat of what we saw this year. And remember the background there were those seven indications that came very fast, all on top of each other.

Jeffrey Ryan Stewart: Yes. Thank you, Chris. It's Jeff, I'll take the first question. We're very comfortable, as we see things start to evolve and close here as we move into 2024. If you think about all of the indications that we've had, seven over the last 18 months, I highlighted in my remarks, nine head to head trials, we're just in a very very nice position for Skyrizi and Rinvoq as we move into '24 to continue some very strong momentum that we're seeing in the actual. So, quite confident in terms of how we're looking at that. And to your key point there on the price.

I mean, if you think about all of the indications that we've had.

Seven over the last 18 months I highlighted in my remarks, <unk> head to head trials, where just a very very nice position for <unk> as we move into 2004 to continue.

Some very strong momentum that we're seeing in the actual so quite quite quite confident in terms of how we're looking at that and to your key point there on the price.

Jeffrey Ryan Stewart: And to your key point there on the price, we continue to see that we're not going to have a repeat of what we saw this year. And remember, the background there were those seven indications that came very fast, all on top of each other. And so, that was the root cause of those concessions that won't repeat. Next year we have really one more big indication, not seven and that Skyrizi, you see that Tom highlighted. So, we will see the normalized price erosion more in line with industry norms versus what we saw this year.

We continue to see that we're not going to have a repeat of what we saw this year and remember the background. There were those those those seven indications that came very fast all on top of each other and so that was the root cause of that of those.

[Analyst]: And so that was the root cause of those concessions that won't repeat. Next year, we have really one more big indication, not seven, and that's Skyrizi UC that Tom highlighted. So we'll see the normalized price erosion more in line with industry norms versus what we saw this year.

Rick Gonzalez: And so that was the root cause of those concessions that won't repeat. Next year, we have really one more big indication, not seven, and that's Skyrizi UC that Tom highlighted. So we'll see the normalized price erosion more in line with industry norms versus what we saw this year.

Sessions that won't repeat next year, we have really one more big indication not seven and that Sky Rizza, you see that Tom highlighted so we will see the normalized price erosion more in line with industry norms versus what we saw this year.

Scott Reents: And then, Chris, this is Rob on Humira. I think if you think about the annualization rebates that, given the rebates that increased in the second half of this year, so you have an annualization impact and the additional rebates to secure preferred access next year, really price should be the main driver of the erosion in 2024. I mean, volume will have an impact, particularly in WAC-sensitive accounts, but price will make up the vast majority of the erosion next year. And while we're not giving 2024 guidance today, as you've mentioned, Chris, I've highlighted the average. It was about $7 billion when I mentioned that, was a reasonable expectation for US Humira next year. Now, there are a few analysts who have forecasted US Humira above $8 billion next year, which is just not a reasonable expectation given the price dynamic.

Rob Michael: And then, Chris, this is Rob on Humira. I think if you think about the annualization rebates that, given the rebates that increased in the second half of this year, so you have an annualization impact and the additional rebates to secure preferred access next year, really price should be the main driver of the erosion in 2024. I mean, volume will have an impact, particularly in WAC-sensitive accounts, but price will make up the vast majority of the erosion next year. And while we're not giving 2024 guidance today, as you've mentioned, Chris, I've highlighted the average. It was about $7 billion when I mentioned that, was a reasonable expectation for US Humira next year. Now, there are a few analysts who have forecasted US Humira above $8 billion next year, which is just not a reasonable expectation given the price dynamic.

Robert Michael: And then, Chris, this is Rob. On Humira, I think if you think about the [inaudible] rebates, given the recent increase in the second half of this year, you have [inaudible] impact and the additional rebates to secure parity access next year, price should be the main driver of erosion in '24. I mean, volume will have an impact, particularly in wax sensitive accounts, but price will make up the vast majority of erosion next year. And while we're not giving '24 guidance today, as you've mentioned, Chris I've highlighted the average. It was about 7 billion when I mentioned that was a reasonable expectation for U S. Humira next year now there are a few animals, who have forecasted U S. Humira above $8 billion next year, which is just not a reasonable expectation given the price dynamic.

Given the recent increase in the second half of this year. So you have annual nation impact and the additional rebates to secure parity access next year really price should be the main driver of erosion in 'twenty four I mean volume will have an impact, particularly in wax sensitive accounts, but price will make up the vast majority of erosion next year and while we're not giving 'twenty four guidance today as you've mentioned, Chris I've highlighted the average.

Robert Michael: And while we're not giving '24 guidance today, as you've mentioned, Chris I've highlighted the average was about 7 billion, when I mentioned that was a reasonable expectation for U.S Humira next year. Now, there are a few analysts who have forecasted U.S Humira above $8 billion next year, which is just not a reasonable expectation, given the price dynamic.

It was about 7 billion when I mentioned that was a reasonable expectation for U S. Humira next year now there are a few animals, who have forecasted U S. Humira above $8 billion next year, which is just not a reasonable expectation given the price dynamic.

Liz Shea: Thanks, Chris. Operator, next question, please.

Liz Shea: Thanks, Chris. Operator, next question please.

Operator: Yes. Our next question comes from Terence Flynn with Morgan Stanley. Your line is open.

Operator: Yes. Our next question comes from Terence Flynn, with Morgan Stanley. Your line is open.

Liz Shea: Great. Thanks so much for taking the question. Obviously, you guys are very well positioned coming out of the Humira LOE in terms of the growth franchise, but I think there's also a focus from investors on maybe bolstering the pipeline. So as you guys think about M&A and business development, maybe you could just walk us through your latest thoughts and anything in terms of therapeutic areas of interest and stage of development. Thank you.

Terence Flynn: Great. Thanks so much for taking the question. Obviously, you guys are very well positioned coming out of the Humira LOE in terms of the growth franchise, but I think there's also a focus from investors on maybe bolstering the pipeline. So as you guys think about M&A and business development, maybe you could just walk us through your latest thoughts and anything in terms of therapeutic areas of interest and stage of development. Thank you.

Terence Flynn: Great. Thanks so much for taking the question. Obviously, you guys are very well positioned coming out of the Humira LOE, in terms of the growth franchise, but I think there is also a focus from investors on maybe bolstering the pipeline. So, as you guys think about M&A and business development, maybe you could just walk us through your latest thoughts and anything in terms of therapeutic areas of interest and stage of development. Thank you.

Obviously, you guys are very well positioned coming out of the Humira LOE in terms of the growth franchise, but I think there is also a focus from investors on maybe bolstering the pipeline. So as you guys think about M&A and business development, maybe you could just walk us through your latest thoughts and anything in terms.

Therapeutic areas of interest and stage of development. Thank you.

[Analyst]: Okay. Terence, this is Rick. I'll cover that question for you. Yeah, I think as we look at the business, as Rob indicated, we're extremely comfortable with how the growth platform is performing, and I'd say how we're managing the biosimilar erosion, which gives us a lot of confidence that we can deliver this high single digit going forward from 2025 going forward through the end of the decade. So I'd say the bulk of what we're looking at, and we're in a fortunate position from that standpoint. There are many companies in our sector who need to go out and do lots of BD to be able to drive the growth that they're trying to achieve. We're not in that position.

Rick Gonzalez: Okay. Terence, this is Rick. I'll cover that question for you. Yeah, I think as we look at the business, as Rob indicated, we're extremely comfortable with how the growth platform is performing, and I'd say how we're managing the biosimilar erosion, which gives us a lot of confidence that we can deliver this high single digit going forward from 2025 going forward through the end of the decade. So I'd say the bulk of what we're looking at, and we're in a fortunate position from that standpoint. There are many companies in our sector who need to go out and do lots of BD to be able to drive the growth that they're trying to achieve. We're not in that position.

Rick Gonzalez: Okay. Terence, this is Rick, I'll cover that question for you. I think is when you look at the business, as Rob indicated, we are extremely comfortable with how the growth platform is performing and I would say, how we're managing the biosimilar erosion, which gives us a lot of confidence that we can deliver in this high single digit going forward from '25 and going forward through the end of the decade. So I would say the bulk of what we're looking at and we're in a fortunate position from that standpoint, there are many companies in our sector, who need to go out and do lots of BD to be able to drive the growth that they're trying to achieve we're not in that position, but I would say the bulk of what we're looking at.

Rick I'll cover it.

Question for you I think is when you look at the business.

As Rob indicated.

We are extremely comfortable with how the growth platform is performing and I would say, how we're managing the biosimilar erosion, which gives us a lot of confidence that we can deliver in this high single digit going forward from 25.

Rick Gonzalez: So, I would say the bulk of what we're looking at and we're in a fortunate position from that standpoint, there are many companies in our sector who need to go out and do lots of BD to be able to drive the growth that they're trying to achieve, we're not in that position. I would say the bulk of what we're looking at is we're looking to add assets that could give us incremental pipeline and revenue growth towards the end of this decade and into the 30s that's where the bulk of our focus is on.

Going forward through the end of the decade, So I would say the bulk of what we're looking at and we're in a fortunate position from that standpoint, there are many companies in our sector, who need to go out and do lots of BD to be able to drive the growth that they're trying to achieve we're not in that position, but I would say the bulk of what we're looking at.

[Analyst]: So I'd say the bulk of what we're looking at is we're looking to add assets that could give us incremental pipeline and revenue growth towards the end of this decade and into the '30s. That's what the bulk of our focus is on. I'd say if I look at AbbVie's track record, certainly BD has been a critical part of how we've grown this company over the last 11 years. I'd say for the most part, we have done a pretty good job. When we acquire assets and bring them in, we can make them perform quite well. Skyrizi is a good example of that. Certainly, Allergan was another good example of that, and there are many others. So I'd say we value BD as a very important tool in how we should grow the business and how we should position our leadership positions in these franchises.

Rick Gonzalez: So I'd say the bulk of what we're looking at is we're looking to add assets that could give us incremental pipeline and revenue growth towards the end of this decade and into the '30s. That's what the bulk of our focus is on. I'd say if I look at AbbVie's track record, certainly BD has been a critical part of how we've grown this company over the last 11 years. I'd say for the most part, we have done a pretty good job. When we acquire assets and bring them in, we can make them perform quite well. Skyrizi is a good example of that. Certainly, Allergan was another good example of that, and there are many others. So I'd say we value BD as a very important tool in how we should grow the business and how we should position our leadership positions in these franchises.

As we're looking to add assets that could give us incremental pipeline and revenue growth towards the end of this decade and into the Thirty's.

The bulk of our focus is on.

Rick Gonzalez: And I would say, if I look at add these track record, certainly BD has been a critical part of how we've grown this company over the last 11 years and I'd say, for the most part we've done a pretty good job, when we acquire assets and bring them in. We can make them perform quite well, Skyrizi's a good example of that, certainly Allergan was another good example of that and there are many others. So I'd say, we valued BD as a very important tool and how we should grow the business and how we should position our leadership positions in these franchises.

We can we can make them perform quite well. It's a good example of that certainly Allergan was another. Good example of that and there are many others. So I'd say, we valued BD.

A very important tool and how we should grow the business and how we should position our leadership positions in these franchises.

[Analyst]: Our primary focus is within the franchises that we're operating in. So let's take immunology as an example. I would say our greatest focus in immunology is to continue to add additional mechanisms, in particular, that could be used in combination in order to create deeper levels of clinical response in areas like IBD, rheumatology, and other areas. So we continue to look for those. We have several already that are in development now, like LUDI, like RIPK-1, and several others in our pipeline. But we're continuing to look for additional assets that we could add to that. And like I said, especially focused on combination therapy because we think that is the way to get much deeper clinical remission or responses in those patients who aren't responding to things like Skyrizi and Rinvoq, which obviously perform exceptionally well. So that's a big area. Oncology is another big area.

Rick Gonzalez: Our primary focus is within the franchises that we're operating in. So let's take immunology as an example. I would say our greatest focus in immunology is to continue to add additional mechanisms, in particular, that could be used in combination in order to create deeper levels of clinical response in areas like IBD, rheumatology, and other areas. So we continue to look for those. We have several already that are in development now, like LUDI, like RIPK-1, and several others in our pipeline. But we're continuing to look for additional assets that we could add to that. And like I said, especially focused on combination therapy because we think that is the way to get much deeper clinical remission or responses in those patients who aren't responding to things like Skyrizi and Rinvoq, which obviously perform exceptionally well. So that's a big area. Oncology is another big area.

Richard Gonzalez: Our primary focus is within the franchises that we're operating in. So, let's take immunology as an example. I would say our greatest focus in immunology is to continue to add additional mechanisms, in particular that could be used in combination, in order to create deeper levels of clinical response in areas like IBD, rheumatology, and other areas. So, we continue to look for those, we have several already that are in development now like, [inaudible], [inaudible] one, and several others in our pipeline. But we're continuing to look for additional assets that we could add to that and, like I said, especially focused on combination therapy. Because we think that is the way to get much deeper clinical remission or responses in those patients who aren't responding to things like Skyrizi and Rinvoq, which obviously perform exceptionally well.

I would say our greatest focus in immunology is to continue to add additional mechanisms.

In particular that could be used in combination.

In order to create deeper levels of clinical response in areas like IBD.

Rheumatology.

And other areas. So we continue to look for those we have several already that are in development now like movie.

<unk>, one and several others in our pipeline, but we're continuing to look for additional assets that we could add to that and like I said, especially focused on combination therapy. Because we think that is the way to get much deeper clinical remission or responses in those patients who aren't responding to things.

<unk>, obviously perform.

Exceptionally well.

Rick Gonzalez: So, that's a big area. Oncology is another big area, we have a high level of interest in next generation CAR-T technology, we have a high level of interest in T cell engagers beyond our BCMA product. As we look at that asset continued to develop, we are very convinced it has a best in class profile and it shows us that for the right indications T cell engagers can be extremely effective.

[Analyst]: We have a high level of interest in next-generation CAR-T technology. We have a high level of interest in T-cell engagers beyond our BCMA product. I think as we look at that asset continue to develop, we are very convinced it has a best-in-class profile. And it shows us that for the right indications, T-cell engagers can be extremely effective. And they're much easier to use and can be much more broadly brought to patients than CAR-Ts, at least the current version of CAR-Ts. So I'd say that's an area that we have a high level of interest. In psychiatry, we're interested in additional assets in anxiety, mood, and a variety of other assets, but that gives you some feel for it. And we obviously have the financial wherewithal to go out and do transactions. We need to make sure we find the right transaction.

Rick Gonzalez: We have a high level of interest in next-generation CAR-T technology. We have a high level of interest in T-cell engagers beyond our BCMA product. I think as we look at that asset continue to develop, we are very convinced it has a best-in-class profile. And it shows us that for the right indications, T-cell engagers can be extremely effective. And they're much easier to use and can be much more broadly brought to patients than CAR-Ts, at least the current version of CAR-Ts. So I'd say that's an area that we have a high level of interest. In psychiatry, we're interested in additional assets in anxiety, mood, and a variety of other assets, but that gives you some feel for it. And we obviously have the financial wherewithal to go out and do transactions. We need to make sure we find the right transaction.

Beyond.

CMA product.

As we look at that asset continued to develop.

We are very convinced it has a best in class.

Profile.

And it shows us that for the right indications T cell engages can be extremely effective.

Rick Gonzalez: And they're much easier to use and can be much more broadly brought to patients and CAR-Ts, at least the current version of CAR-Ts. So I'd say, that's an area that we have a high level of interest. In psychiatry, we're interested in additional assets, in anxiety and mood. And a variety of other assets, but that gives you some feel for it. And we obviously have the financial wherewithal to go out and do transactions, we need to make sure we find the right transaction, so, it's a value enhancing asset for the company and when we find them, we will act on them quickly.

In psychiatry, we're interested in additional assets in anxiety and mood.

And a variety of other assets, but that gives you some some feel for it.

And we obviously have the financial wherewithal to go out and do.

<unk>.

We need to make sure we find the right transaction.

[Analyst]: It's a value-enhancing asset for the company. When we find them, we will act on them, and we will act on them quickly.

Rick Gonzalez: It's a value-enhancing asset for the company. When we find them, we will act on them, and we will act on them quickly.

It's a value enhancing asset for the company and when we find them. We will act on them and we will act on them quickly.

Liz Shea: Thanks, Terence. Operator, next question, please.

Liz Shea: Thanks, Terrence. Operator, next question please.

Operator: Yes. Our next question comes from Tim Anderson with Wolfe Research. Your line is open.

Operator: Yes. Our next question comes from Tim Anderson, with Wolfe Research. Your line is open.

Rick Gonzalez: Hi. Thanks for taking our question. This is Alice Nettleton. I'm for Tim Anderson. A question on obesity and its interface with immunology and a lot of other drug categories, frankly. Are you aware that payers have to cover obesity medicines? And if that's correct, it's a big expense, and payers will be looking for offsets. One offset would be for payers to squeeze other therapeutic areas as hard as they can. An example could be immunology, where there's now a really good product, your own Humira, at a much lower price. So we're wondering how much payers might start to force a step edit for products like Skyrizi. It's a relevant question because yesterday, one of the issues Bristol noted with its Sotyktu product is step edits, and they cite biosimilar Humira as the reason. Thank you.

Alice Jennifer Nettleton: Hi, thanks for taking our question. This is Alice Nettleton, on for Tim Anderson, a question on obesity and its interface INI and a lot of other drug categories, frankly. Have you [inaudible] payers have to cover obesity medicines. If that's correct, that's a big expense and payers will be looking for offsets. One offset would be for payers to squeeze other therapeutic areas as hard as they can. An example could be INI, whether's now a really good product [inaudible] Humira at a much lower price.

Have you is that payers have to cover obesity medicines.

That's correct, that's a big expense and payers will be looking for offsets.

One offset would be for payers to squeeze other therapeutic areas as hard as they can and example could be ini with US now a really good product humira at a much lower price.

Alice Jennifer Nettleton: So, we are wondering how much pay as might start to force a step edit for products like Skyrizi? It's a relevant question because yesterday, Wednesday issues, Bristol noted with [inaudible] to your product is step edits in they cite biosimilar Humira as the reason. Thank you.

Got it for products like Sky regime.

It's a relevant question because yesterday Wednesday issues, Bristol Natus with it take to your product is step edits in these slight biosimilar Humira SME.

[Analyst]: Yeah. Hi. Thank you for the question. It's Jeff. And I think you've got to take a step back regardless of the obesity issues and think about the overall strategy that we pursued, which was one of fundamental distinction. And I'll take your point over some of these head-to-head trials, and there's nine of them, right? So if you take Skyrizi, just in psoriasis, we have gross superiority versus every mechanism in the category. So a head-to-head of gross superiority versus Humira, versus the leading IL-17 Cosentyx, versus the oral Otezla. And we also have versus Stelara. So fundamentally, when payers think about stepping or not stepping or how they would think about that, there's a medical dynamic there. And that distinctiveness that we have across our program is very, very important to help manage maybe the urge of the payers to think of formulary structures like that.

Jeff Stewart: Yeah. Hi. Thank you for the question. It's Jeff. And I think you've got to take a step back regardless of the obesity issues and think about the overall strategy that we pursued, which was one of fundamental distinction. And I'll take your point over some of these head-to-head trials, and there's nine of them, right? So if you take Skyrizi, just in psoriasis, we have gross superiority versus every mechanism in the category. So a head-to-head of gross superiority versus Humira, versus the leading IL-17 Cosentyx, versus the oral Otezla. And we also have versus Stelara. So fundamentally, when payers think about stepping or not stepping or how they would think about that, there's a medical dynamic there. And that distinctiveness that we have across our program is very, very important to help manage maybe the urge of the payers to think of formulary structures like that.

Thank you.

Jeffrey Ryan Stewart: Hi, thank you for the question, it's Jeff. I think you've got to take a step back, regardless of the obesity issues and think about the overall strategy that we pursued, which was one of fundamental distinction, and I'll take your point over some of these head to head trials, and there's nine of them. So, if you take Skyrizi, just in psoriasis, we have gross superiority versus every mechanism in the category. So, a head to head of growth superiority versus Humira, versus the leading IL17 Cosentyx, versus the oral Otezla.

Regardless of the obesity issues and think about the overall strategy that we pursued which was one of fundamental distinction and I'll take your point over.

Some of these head to head trials and Theres nine of them right. So if you take sky Rizzi just in psoriasis, we have gross superiority versus every mechanism in the category. So a head to head of growth superiority versus humira.

Versus the leading IL 17, co centex versus the oral Oh Tesla.

Jeffrey Ryan Stewart: And we also have versus Stelara, so, fundamentally when payers think about stepping, or not stepping, or how they would think about that, there is a medical dynamic there and that distinctiveness that we have across our program is very very important to help manage the urge of the payers to think of formulary structures like that. If you think about your comments that you heard yesterday or the day before, that's a very different dynamic, if you are not that different or you have the same efficacy as a Humira, it's not going to go that well on some of these formularies. and so I think you've got to take a step back and look at the fundamental distinctiveness that we have on both <unk> and <unk> and I think my last comment would be lets take <unk>, which is growing very fast 60% okay.

Dynamic there and that distinctiveness that we have across our program is very very important to help manage.

The urge of the payers to think of formulary structures like that if you think about your comments that you have that you heard yesterday or the day before.

[Analyst]: If you think about your comments that you heard yesterday or the day before, that's a very different dynamic. I mean, if you're not that different or you have the same efficacy as a Humira, it's not going to go that well on some of these formularies. And so I think you got to take a step back and look at the fundamental distinctiveness that we have on both Skyrizi and Rinvoq. And I think my last comment would be, let's take Rinvoq, which is growing very fast, 60%, okay? All of that is in the second-line plus setting. So from a strategic standpoint, it's already stepped. And so when you take a look at those dynamics, we remain quite confident that as we rely on the power of raising the standard of care, that will help us navigate any of these scenarios, whether it's related to obesity or not.

Jeff Stewart: If you think about your comments that you heard yesterday or the day before, that's a very different dynamic. I mean, if you're not that different or you have the same efficacy as a Humira, it's not going to go that well on some of these formularies. And so I think you got to take a step back and look at the fundamental distinctiveness that we have on both Skyrizi and Rinvoq. And I think my last comment would be, let's take Rinvoq, which is growing very fast, 60%, okay? All of that is in the second-line plus setting. So from a strategic standpoint, it's already stepped. And so when you take a look at those dynamics, we remain quite confident that as we rely on the power of raising the standard of care, that will help us navigate any of these scenarios, whether it's related to obesity or not.

It is a very different dynamic I mean, if you are not that different or you have the same efficacy as a as a humira.

Not going to go that well on some of these formularies and so I think you've got to take a step back and look at the fundamental distinctiveness that we have on both <unk> and <unk> and I think my last comment would be lets take <unk>, which is growing very fast 60% okay.

Jeffrey Ryan Stewart: I think you've got to take a step back and look at the fundamental distinctiveness that we have on both Skyrizi and Rinvoq. And I think my last comment would be, let's take Rinvoq, which is growing very fast, 60%. All of that is in the second line plus setting, so, from a strategic standpoint, it's already stepped. And so, when you when you take a look at those dynamics, we remain quite confident that, as we rely on the power of raising the standard of care, that will help us navigate any of these scenarios, whether it's related to obesity or not.

All of that is in the second line plus setting so from a strategic standpoint, it's already stepped.

And so when you when you take a look at those dynamics, we remain quite confident that as we rely on the power of raising the standard of care that will help us navigate any of these scenarios, whether it's related to obesity or not.

Liz Shea: Thanks, Alice. Operator, next question, please.

Elizabeth Shea: Thanks, Alice. Operator, next question please.

Operator: Our next question comes from Vamil Divan with Guggenheim Securities. Your line is open.

Operator: Our next question comes from [inaudible], with Guggenheim Securities. Your line is open.

Vamil Divan: Great. Thanks for taking my question. I hope you can hear me. I'm in transit right now. But the two questions I have, actually, one is maybe building on Terence's question around business development boost in the pipeline. I think we get a lot of other questions just around sort of maybe underappreciated assets within your pipeline. So I don't know if you can maybe just comment on that and if there's a couple of assets that you point out that you think people are overlooking or there might be some underappreciated upside. And then the second one is just on this charge you took today or this quarter on Imbruvica regarding the Medicare drug pricing program. And obviously, I understand why you did it. I'm curious on the amount and the timing.

Unknown: Great. Thanks for taking my questions, I hope you can hear me okay, I'm in transit right now but, the two questions I have actually, one is maybe building on the Terrence's question around business development pipeline. I think we've got a lot of other questions just around the underappreciated assets within the pipeline, but hoping you can maybe just comment on that.

Right now but.

The two questions I have actually one is maybe building on the tariff question around business development pipeline I think we've got a lot of other questions just around sort of.

Underappreciated assets within the pipeline, but hoping you can maybe just comment on that.

Unknown: There's a couple of assets as it played out do you think people are overlooking or they might be underappreciated upside? And then the second one is just on the charge you took today on this quarter, on improved cost regarding the Medicare drug pricing program, and obviously, I understand he why. I'm curious on the amount and the timing, why is it now, as opposed to may be waiting to see how the losses play out or negotiation process plays out. And then, in terms of the amount, how are you, what your assumptions were [inaudible] to avoid what you're assuming around the impacts of that program will have on the pricing [inaudible] a charge. Thank you.

Vamil Divan: So why did you do it now as opposed to maybe waiting to see how the lawsuits play out or the negotiation process plays out? And then in terms of the amount or how, what your assumptions were, as much as you can share, obviously, there's competitive dynamics here, too, but sort of what you're assuming around the impact that this program would have on the pricing of Imbruvica and doing a derisking thinking.

Why is it now as opposed to may be waiting to see how the losses play out or negotiation process plays out and then in terms of the amount, but how are you.

What are your assumptions.

Sure.

<unk> been able to achieve it.

What you're assuming around the impacts of that program will have on the pricing.

There will be a charge.

[Analyst]: All right, Bombal, this is Rick. I'll take the first question, and then Scott will take the second question. So on the pipeline, I think as I look at the pipeline and how we built the pipeline and how it's playing out, I don't know that I would call it underappreciated because you don't necessarily have access to all the data that we have on some of these programs. But we obviously invested significantly over the last several years in rapidly developing the indications for Rinvoq and Skyrizi. And a lot of our focus had been built around that. But in parallel, we were advancing a number of other programs along the way. And I would say the investment that we made on Skyrizi and Rinvoq are pretty clear, the kind of return that we are getting for those assets. I mean, they're growing at a phenomenal rate.

Rick Gonzalez: All right, Bombal, this is Rick. I'll take the first question, and then Scott will take the second question. So on the pipeline, I think as I look at the pipeline and how we built the pipeline and how it's playing out, I don't know that I would call it underappreciated because you don't necessarily have access to all the data that we have on some of these programs. But we obviously invested significantly over the last several years in rapidly developing the indications for Rinvoq and Skyrizi. And a lot of our focus had been built around that. But in parallel, we were advancing a number of other programs along the way. And I would say the investment that we made on Skyrizi and Rinvoq are pretty clear, the kind of return that we are getting for those assets. I mean, they're growing at a phenomenal rate.

Rick Gonzalez: [inaudible], this is Rick, I'll take the first question and then Scott will take the second question. So, on the pipeline I think, as I look at the pipeline and how we built the pipeline and how it's playing out, I don't know that I would call underappreciated, because you don't necessarily have access to all of the data that we have on some of these programs. But we obviously invested significantly over the last several years and rapidly developing the indications for Rinvoq and Skyrizi, and a lot of our focus had been built around that. But in parallel, we were advancing a number of other programs along the way.

We will take the second question.

So on the pipeline I think as I look at the pipeline and how we built the pipeline and how its playing out I think I don't know that I would call underappreciated, because you don't necessarily have.

Access to all of the data that we have on some of these programs, but we obviously invested significantly over the last several years and rapidly developing the indications for <unk> and a lot of our focus had been built around that but in parallel we were advancing a number of other programs along the way.

Rick Gonzalez: And I would say, the investment that we made on Skyrizi and Rinvoq are pretty clear, the kind of return that we're getting for those assets, they are growing at a phenomenal rate. In fact, in the not too distant future, the combination of those two products on a running rate basis will be larger than Humira. That gives you some idea of how rapidly those products are growing and how large they are.

[Analyst]: In fact, in the not-too-distant future, the combination of those two products on a running-rate basis will be larger than Humira to give you some idea of how rapidly those products are growing and how large they are. But if I look at our pipeline, the real meaningful programs that we have in our pipeline that will be true needle movers for the company, there are several of them that are advancing now that I think we have a high level of confidence in. ABV-400, our Topo Warhead platform with our c-Met version of that. We're seeing very encouraging data in CRC. We'll follow that with non-small cell lung cancer. And that platform is demonstrating to us that it is a broad-based platform that we can expand to a number of other areas. And that should be a fairly significant opportunity for us going forward.

Rick Gonzalez: In fact, in the not-too-distant future, the combination of those two products on a running-rate basis will be larger than Humira to give you some idea of how rapidly those products are growing and how large they are. But if I look at our pipeline, the real meaningful programs that we have in our pipeline that will be true needle movers for the company, there are several of them that are advancing now that I think we have a high level of confidence in. ABV-400, our Topo Warhead platform with our c-Met version of that. We're seeing very encouraging data in CRC. We'll follow that with non-small cell lung cancer. And that platform is demonstrating to us that it is a broad-based platform that we can expand to a number of other areas. And that should be a fairly significant opportunity for us going forward.

In fact in the not too distant future. The combination of those two products on a running rate basis will be larger than humira that gives you some idea.

How rapidly those products are growing and how large they are.

Rick Gonzalez: But, if I look at our pipeline, the real meaningful programs that we have in our pipeline that will be true needle movers for the company, there are several of them are advancing now that I think we have a high level of confidence in. 400, our [inaudible] platform, with our [inaudible] version of that, we've seen very encouraging data in CRC, we will follow that with non small cell lung cancer. And that platform is demonstrating to us that it is a broad based platform that we can expand to a number of other areas.

400, our <unk> platform.

With our <unk>.

<unk> met version of that.

We've seen very encouraging data in Crs soon.

We will follow that with non small cell lung cancer.

And that platform is demonstrating to us.

It's a broad based platform that we can expand to a number of other areas and.

Rick Gonzalez: And that should be a fairly significant opportunity for us going forward later, sort of the 27, 28 times the timeframe, I think is when it will have meaningful benefit play through. And then I'd say, the second one is 383, our BCMA bispecific. As we indicated earlier, we're seeing more and more data out of that program that clearly tells us this has a best in class profile, high levels of efficacy, very good safety and very convenient dosing. We figured out is that ideal profile to be able to enter this market and, as you know, multiple myeloma is a very large market and there are very significant products in this market. So those are two opportunities.

[Analyst]: Later, sort of the 2027, 2028 kinds of timeframe, I think is when it will have meaningful benefit playthrough. And then I'd say the second one is 383, our BCMA bispecific. As we indicated earlier, we're seeing more and more data out of that program that clearly tells us this has a best-in-class profile, high levels of efficacy, and very good safety and very convenient dosing. We think it has that ideal profile to be able to enter this market. And as you know, multiple myeloma is a very large market. There are very significant products in this market. So those are two opportunities. I would also say 916 and some of our TAO programs are also exciting programs that are running in parallel to these. We'll be getting more data on those next year. And I think those have significant opportunities as well.

Rick Gonzalez: Later, sort of the 2027, 2028 kinds of timeframe, I think is when it will have meaningful benefit playthrough. And then I'd say the second one is 383, our BCMA bispecific. As we indicated earlier, we're seeing more and more data out of that program that clearly tells us this has a best-in-class profile, high levels of efficacy, and very good safety and very convenient dosing. We think it has that ideal profile to be able to enter this market. And as you know, multiple myeloma is a very large market. There are very significant products in this market. So those are two opportunities. I would also say 916 and some of our TAO programs are also exciting programs that are running in parallel to these. We'll be getting more data on those next year. And I think those have significant opportunities as well.

These are sort of the 27 28 times a timeframe I think is when it will have meaningful benefit play through and.

And then I'd say the second one is 383, our <unk> bi specific.

We indicated earlier, we're seeing more and more data out of that program that clearly tells US. This has a best in class profile high levels of efficacy and <unk>.

Very good safety and very convenient dosing, we figured out is that ideal profile to be able to enter this market and as you know multiple myeloma is a very large market and there are very significant products in this market. So those are two opportunities.

Rick Gonzalez: So, those are two opportunities, I would also say 916, some of our Tau programs are also exciting programs that are running in parallel to these. We will be getting more data on those next year, and I think those have significant opportunities as well. The third program I'd talk about is in our eye care business. So, our [inaudible] bio program for both wet AMD and diabetic retinopathy.

As a 91 six.

Some of our Tau programs are also exciting programs that are running in parallel to these.

We will be getting more data on those next year and I think those have significant opportunities as well.

[Analyst]: The third program I'd talk about is in our eye care business. It's our REGENXBIO program for both wet AMD and diabetic retinopathy. We're seeing some very, very encouraging data out of that program. And that could be a nice opportunity for us as well. And it continues to advance well. So there are a number of important programs that you'll start to see more and more data as we go through 2024 and into 2025 that I think will give the market an opportunity to be able to better assess those. Bansal, this is Scott with respect to your question on the Imbruvica charge. So I think a couple of things.

Rick Gonzalez: The third program I'd talk about is in our eye care business. It's our REGENXBIO program for both wet AMD and diabetic retinopathy. We're seeing some very, very encouraging data out of that program. And that could be a nice opportunity for us as well. And it continues to advance well. So there are a number of important programs that you'll start to see more and more data as we go through 2024 and into 2025 that I think will give the market an opportunity to be able to better assess those.

The third program I'd talk about is in our eye care business and.

Since our <unk> bio program for both wet AMD and diabetic retinopathy.

Rick Gonzalez: We're seeing some very very encouraging data out of that program and that could be a nice opportunity for us as well and it continues to advance well. So, there are a number of important programs that you'll start to see more and more data as we go through '24, and into '25 that I think will give the market an opportunity to be able to better set both.

Rob Michael: Bansal, this is Scott with respect to your question on the Imbruvica charge. So I think a couple of things.

Seth boats.

Scott T. Reents: [inaudible], this is Scott, with respect to your question on the [inaudible] charge. I think a couple of things, as we have signaled in some of our regulatory filings, our last 10Q, for instance, we had indicated that, if we were if Imbruvica were to be selected in the negotiation process, under the inflation reduction act that there would likely trigger an impairment, so, we had anticipated that this will be happy and so, the timing it really relates to the fact that under the rules you have to look at the fair value of that intangible asset, with respect to future cash flows and so, the accounting rules would require that we would make that analysis upon selection, as we had previewed in our filings.

[Analyst]: As we have signaled in some of our regulatory filings, our last 10-Q, for instance, we had indicated that if Imbruvica were to be selected in the negotiation process under the Inflation Reduction Act, that there would likely trigger an impairment. And so we had anticipated that this would be happening. And so the timing really relates to the fact that under the rules, you have to look at the fair value of that intangible asset with respect to future cash flows. And so the accounting rules would require that we would make that analysis upon selection as we had kind of previewed in our filings. And so we went through the process under that triggering event to determine what the impairment should be. And I would say that when you look at that impairment, the magnitude of the impairment is driven by a number of factors.

Scott Reents: As we have signaled in some of our regulatory filings, our last 10-Q, for instance, we had indicated that if Imbruvica were to be selected in the negotiation process under the Inflation Reduction Act, that there would likely trigger an impairment. And so we had anticipated that this would be happening. And so the timing really relates to the fact that under the rules, you have to look at the fair value of that intangible asset with respect to future cash flows. And so the accounting rules would require that we would make that analysis upon selection as we had kind of previewed in our filings. And so we went through the process under that triggering event to determine what the impairment should be. And I would say that when you look at that impairment, the magnitude of the impairment is driven by a number of factors.

An impairment so we would anticipate that this will be happy and so the timing it really relates to the fact that under under the rules you have to look at the fair value of that intangible asset with respect to future cash flows and so the accounting rules would require that we would make that analysis upon selection as we had kind of previewed.

Scott T. Reents: So, we went through the process under that triggering event to determine what the impairment should be. And I would say that, when you look at that impairment, the magnitude of the impairment is driven by a number of factors, but really one of the biggest factors that you're seeing there is, it requires you to discount the future cash flow. So, as we calculated the future cash flows, look at what we had assumed it was a reasonable assumption on the price, when you discount those backs. And so, that creates part of the the magnitude of this adjustment. in terms of the negotiated price that we assumed I think we're in the middle of these negotiations.

[Analyst]: But really, one of the biggest factors that you're seeing there is it requires you to discount the future cash flows. So as we calculated the future cash flows, looked at what we had assumed was a reasonable assumption on the price, we discount those back. And so that creates part of the magnitude of this adjustment. In terms of the negotiated price that we assumed, I think we're in the middle of these negotiations, and it really wouldn't be appropriate for us to talk about what that is. But we looked at a number of factors, and we think that process is going to play out. Certainly, we will see on 1 February in a private conversation with CMS what they anticipate, at least an initial thought on price. But it won't be finalized until 1 September of next year.

Scott Reents: But really, one of the biggest factors that you're seeing there is it requires you to discount the future cash flows. So as we calculated the future cash flows, looked at what we had assumed was a reasonable assumption on the price, we discount those back. And so that creates part of the magnitude of this adjustment. In terms of the negotiated price that we assumed, I think we're in the middle of these negotiations, and it really wouldn't be appropriate for us to talk about what that is. But we looked at a number of factors, and we think that process is going to play out. Certainly, we will see on 1 February in a private conversation with CMS what they anticipate, at least an initial thought on price. But it won't be finalized until 1 September of next year.

The future cash flows looked at what we had assumed it was a reasonable assumption on the price when you discount those backs and so that creates part of the the magnitude of this adjustment in terms of the negotiated price that we assumed I think we're in the middle of these negotiations.

Scott T. Reents: In terms of the negotiated price that we assumed, I think we're in the middle of these negotiations. And this really wouldn't be appropriate for us to talk about what that is, but we looked at a number of factors and we think that process is going to play out, certainly we will see on February 1st in a private conversation with CMS, what they anticipate, at least an initial thought on price, but it won't be finalized until September 1st of next year. So, what we will see what that prices is as that process plays out.

And it's really wouldn't be appropriate for us to talk about what that is but we looked at a number of factors and we think that process is going to play out certainly we will see on February <unk> and a private conversation with CMS, what they anticipate at least an initial thought on price, but it won't be finalized until September <unk> of next year and so what we will see what that prices as that process plays out.

[Analyst]: We will see what that price is as the process plays out.

Scott Reents: We will see what that price is as the process plays out.

Liz Shea: Thanks, Bombal. Operator, next question, please.

Liz Shea: Thanks, [inaudible]. Operator, next question please.

Thanks, Shlomo operator next question please.

Operator: Yes. Our next question comes from Steve Scala with TD Cowen. Your line is open.

Operator: Yes. Our next question comes from Steve Scala, with TD Cowen. Your line is open.

Liz Shea: Thank you very much. I have two questions and one clarification. First, the clarification is the base year for the high single-digit revenue growth to the end of the decade: is the base year 2023 or, excuse me, 2024 or 2025? I think it's 2025, but maybe you can clarify that. Second, given AbbVie's stated interest in building the oncology business, I assume that AbbVie took a hard look at the ADC deal that Merck signed with Daiichi. I'm just curious what about it didn't you like? Was it the profile of the products? Was it the price? Or do you feel you have everything you need already? And then the last question is, at least one other company has changed its tax rate guidance stemming from a recent IRS document clarifying Section 174 tax legislation. Do you have any perspective on this update and why it doesn't impact AbbVie?

Steve Scala: Thank you very much. I have two questions and one clarification. First, the clarification is the base year for the high single-digit revenue growth to the end of the decade: is the base year 2023 or, excuse me, 2024 or 2025? I think it's 2025, but maybe you can clarify that. Second, given AbbVie's stated interest in building the oncology business, I assume that AbbVie took a hard look at the ADC deal that Merck signed with Daiichi. I'm just curious what about it didn't you like? Was it the profile of the products? Was it the price? Or do you feel you have everything you need already? And then the last question is, at least one other company has changed its tax rate guidance stemming from a recent IRS document clarifying Section 174 tax legislation. Do you have any perspective on this update and why it doesn't impact AbbVie?

Steve Scala: Thank you very much, I have two questions and one clarification. First the clarification, is the base year for the high single digit revenue growth to the end of the decade, is the base of your 2023, 2024, or 2025? I think it's '25, but maybe you can clarify that. Second, given AbbVie's stated interest in building the oncology business, I assume that AbbVie took a hard look at the ADC deal that Merck signed with Daiichi. I'm just curious what about it didn't you like, was it the profile of the products, was it the price or do you feel you have everything you need already?and then the <unk>.

2024, or 2025, I think it's 25, but maybe you can clarify that.

Second given <unk> stated interest in building the oncology business I assume that Abbvie took a hard look at the ADC deal that Merck signed with Daiichi I'm just curious what about it didn't you like was it the profile of the products was it the price or do you feel you have everything you need already and then the <unk>.

Steve Scala: already?and then the <unk>.

Steve Scala: And then the last question is, at least one other company has changed its tax rate guidance stemming from a recent IRS document clarifying section 174 tax legislation. Do you have any perspective on this update and why it doesn't impact AbbVie? Thank you.

Last question is at least one other company has changed its tax rate guidance stemming from a recent IRS document clarifying section 174 tax legislation do you have any perspective on this update and why it doesn't impact abbvie. Thank you.

Liz Shea: Thank you.

Steve Scala: Thank you.

[Analyst]: Steve, this is Rob. I'll take your first question. The base year is 2024. If you think about it, we signaled that we expect to return a robust growth in 2025. That high single-digit CAGR really would pick up that first year of robust growth of 2025. If you start in 2025, you'd miss that year of growth. Our intention has always been 2024 is a base year, and that high single-digit CAGR starts from 2024 to the end of the decade. Okay. Steve, this is Rick. I'll take the second question. Obviously, I'm not going to comment on whether we looked at that same transaction. That probably wouldn't be appropriate. What I can tell you is we knew it was there. Maybe that gives you some idea of our perspective on it.

Rob Michael: Steve, this is Rob. I'll take your first question. The base year is 2024. If you think about it, we signaled that we expect to return a robust growth in 2025. That high single-digit CAGR really would pick up that first year of robust growth of 2025. If you start in 2025, you'd miss that year of growth. Our intention has always been 2024 is a base year, and that high single-digit CAGR starts from 2024 to the end of the decade.

Robert Michael: Steve, this is Rob, I'll take your first question. So, the base year is '24, and if you think about it, we signaled that we expect to return a robust growth in '25 and so, that high single digit CAGR really will pick up that first year of robust growth of '25. If you started in '25 you'd miss that year of growth. And so, our intention has always been '24 as a base year in that high single digit CAGR starts from '24 to the end of the decade.

This year in that high single digit CAGR starts from 24 to the end of the decade.

Rick Gonzalez: Okay. Steve, this is Rick. I'll take the second question. Obviously, I'm not going to comment on whether we looked at that same transaction. That probably wouldn't be appropriate. What I can tell you is we knew it was there. Maybe that gives you some idea of our perspective on it.

Rick Gonzalez: Okay, Steve, this is Rick, I'll take the second question. Obviously, I'm not going to comment where we looked at that same transaction, that probably wouldn't be appropriate. But what I can tell you is, we knew it was there, so maybe that gives you some idea of our perspective on it. But the reality is, we believe we have what we need with 400, we believe that platform and we own that platform, we developed it internally, will give us everything that we need in that area and so, it wasn't something that we were looking at. Scott?

Obviously, I'm not going to comment.

Looked at.

That same transaction that probably wouldn't be appropriate.

But what I can tell you is we knew it was there. So maybe that gives you some idea of our perspective on it but the reality is we believe we have what we need with 400.

[Analyst]: But the reality is, we believe we have what we need with 400. We believe that platform, and we own that platform. We developed it internally. It gives us everything that we need in that area. And so, it wasn't something that we were looking at. And Scott?

Rick Gonzalez: But the reality is, we believe we have what we need with 400. We believe that platform, and we own that platform. We developed it internally. It gives us everything that we need in that area. And so, it wasn't something that we were looking at. And Scott?

We believe that platform and we own that platform, we developed it internally.

Give us everything that we need in that area and so it wasn't something that we were looking at.

Operator: Yeah. Hey, it's Scott. So with respect to the tax legislation, I certainly can talk about what our facts are. But when we've looked at, certainly, this results out of tax reform legislation a few years ago, the tax rules, there's always a little bit of uncertainty. And what happened this quarter, there was guidance that came out that I would say clarified a certain approach and treatment. Prior to that guidance, though, there was a little bit of a diversity of opinion amongst advisors and ourselves as to how we might implement. So I would tell you that we were already implementing consistent with how that guidance ultimately came out. And that's why you're not seeing any impact to us on our tax rate.

Scott Reents: Yeah. Hey, it's Scott. So with respect to the tax legislation, I certainly can talk about what our facts are. But when we've looked at, certainly, this results out of tax reform legislation a few years ago, the tax rules, there's always a little bit of uncertainty. And what happened this quarter, there was guidance that came out that I would say clarified a certain approach and treatment. Prior to that guidance, though, there was a little bit of a diversity of opinion amongst advisors and ourselves as to how we might implement. So I would tell you that we were already implementing consistent with how that guidance ultimately came out. And that's why you're not seeing any impact to us on our tax rate.

Scott T. Reents: So, with respect to the tax legislation. Certainly, when we can talk about what our facts are but when we've looked at it certainly this results out of tax reform legislation a few years ago. The tax rules, there is always a little bit of uncertainty and what happened this quarter, there was guidance that came out that, I would say, clarified a certain approach in treatment. Prior to that guidance there was a little bit of a diversity of opinion amongst advisors and ourselves as to how you might implement. So, I would tell you that we were already implementing consistent with how that guidance ultimately came out and that's why youre not seeing any impact to us, on our tax rate.

Scott So with respect to the tax legislation.

Certainly when we can talk about what our facts are but when we've looked at it certainly this results out of tax reform legislation a few years ago. The tax rules. There is always a little bit of uncertainty and what happened. This quarter. There was guidance that came out that I would say clarified a certain approach in treatment prior to that guidance. So there was a little bit of a diversity of.

Opinion amongst advisors and ourselves as to how you might implement so I would tell you that we were already implementing consistent with how that guidance ultimately came out and thats why youre not seeing any impact to us on our tax rate.

Liz Shea: Thanks, Steve. Operator, next question, please.

Liz Shea: Thanks, Steve. Operator, next question please.

Operator: Next question comes from Gary Nachman with Raymond James. Your line is open.

Operator: Our next question comes from Gary Nachman, with Raymond James. Your line is open.

[Analyst]: Great. So first, back to the trough raise in 2024, how are you thinking about spending levels for both SG&A and R&D into the trough year next year to set up for growth in 2025 and beyond? And do you have a better sense of where the operating margin might end up next year? And then secondly, Skyrizi and Rinvoq have been doing very well in the IBD indications. Talk about how much headroom you see for those products and you see in Crohn's with that landscape likely getting more competitive in the coming years. And any updated thoughts on 2025 guidance for those products? Thank you.

Gary Nachman: Great. So first, back to the trough raise in 2024, how are you thinking about spending levels for both SG&A and R&D into the trough year next year to set up for growth in 2025 and beyond? And do you have a better sense of where the operating margin might end up next year? And then secondly, Skyrizi and Rinvoq have been doing very well in the IBD indications. Talk about how much headroom you see for those products and you see in Crohn's with that landscape likely getting more competitive in the coming years. And any updated thoughts on 2025 guidance for those products? Thank you.

Gary Jay Nachman: Great. First, back to the trough raised in 2024, how are you thinking about spending levels for both SG&A and R&D into the trough year next year, to set up for growth in '25 and beyond? And you have a better sense of where the operating margin might end up next year? And then secondly, Skyrizi and Rinvoq have been doing very well in the IBD indications, talk about how much headroom you see today's products in UC and Crohn's, with that landscape likely getting more competitive in the coming years, and any updated thoughts on 2025 guidance for those products. Thank you.

First back to the trough raised in 2024, how are you thinking about spending levels for both SG&A and R&D into the trough year next year to set up for growth in 'twenty, five and beyond and you have a better sense of where the operating margin might end up next year.

And then secondly, Scott anything Rins have been doing very well in the IBD indications talk about how much headroom you see today's products in UC and crohn's with that landscape likely getting more competitive in the coming years and any updated thoughts on 2025 guidance for those products.

Thank you.

Operator: Hi, Gary. It's Scott. I'll start with your question regarding operating margin. So when we've looked at the operating margins we've talked about in the past, for 2023 and 2024, we had talked about those being very, very similar. So when you think about the operating margins that we've talked about for this year and next year, it's really in that 46% to 47% range. This year, our guidance is 46.5%. We would expect operating margin in 2024 to be very similar to what we're seeing this year. Then I think as a result, roughly the gross margin is going to be in line in 2024 with what we're seeing this year as well as the expense profile. So very consistent with this year. Of course, we'll refine that when we come out with guidance.

Scott Reents: Hi, Gary. It's Scott. I'll start with your question regarding operating margin. So when we've looked at the operating margins we've talked about in the past, for 2023 and 2024, we had talked about those being very, very similar. So when you think about the operating margins that we've talked about for this year and next year, it's really in that 46% to 47% range. This year, our guidance is 46.5%. We would expect operating margin in 2024 to be very similar to what we're seeing this year. Then I think as a result, roughly the gross margin is going to be in line in 2024 with what we're seeing this year as well as the expense profile. So very consistent with this year. Of course, we'll refine that when we come out with guidance.

Scott T. Reents: Hey, Gary, it's Scott, I'll start with your question regarding the operating margin. So, when we've looked at the operating margins, we talked about in the past, for '23 and '24 we have talked about those being very very similar. So, when you think about the operating margins that we've talked about for this year and next year, it's really in that 46% to 47% range. This year our guidance is 46, 5% and we would expect operating margin in '24 to be very similar to what we're seeing this year.

Talked about those being very very similar so when you think about the operating margins that we've talked about for this year and next year, it's really in that 46% to 47% range. This year. Our guidance is 46, 5% and we would expect operating margin of 24 to be very similar to what we're seeing this year.

Scott T. Reents: And then, I think as a result, roughly the gross margin is going to be in line in '24 with what we're seeing this year, as well as the expense profile, very consistent with this year. Of course, we find that when we come out with guidance.

Course, where we find that when we come out with guidance.

Rob Michael: Yeah. And this is Jeff. I'll highlight your comment on the headspace and IBD. I mean, the IBD market is very, very attractive. If we think back historically, we were always, frankly, a little surprised at how fast Humira back in the day grew when we started to achieve the UC and the Crohn's indications. And again, I would say we're very, very pleasantly encouraged about the momentum. The momentum is very, very significant. So there is significant headroom. And what we see in the market dynamic is that, unlike what you might think, that patients would always want to rotate off of their medications because of the severity of the disease, actually, physicians haven't been able to really move the market very much over the years simply because it's very dangerous to try to go to another drug that hasn't provided any increase in benefit for those patients.

Jeff Stewart: Yeah. And this is Jeff. I'll highlight your comment on the headspace and IBD. I mean, the IBD market is very, very attractive. If we think back historically, we were always, frankly, a little surprised at how fast Humira back in the day grew when we started to achieve the UC and the Crohn's indications. And again, I would say we're very, very pleasantly encouraged about the momentum. The momentum is very, very significant. So there is significant headroom. And what we see in the market dynamic is that, unlike what you might think, that patients would always want to rotate off of their medications because of the severity of the disease, actually, physicians haven't been able to really move the market very much over the years simply because it's very dangerous to try to go to another drug that hasn't provided any increase in benefit for those patients.

Jeffrey Ryan Stewart: This is Jeff, I'll highlight your comment on the head space in IBD. IBD market is very very attractive, if we think back historically, we were always frankly, a little surprised at how fast Humira back in the day grew when we started to achieve the UC and the Crohn's indications. And again, I would say were very very pleasantly encouraged about the momentum, the momentum is very very significant. So, there is significant headroom.

Your comment on the head space in IBD.

IBD market is very very attractive if we think back historically, we were always frankly, a little surprised at how fast humira back in the day grew when we started to achieve the UC and the Crohn's indications and again I would say were very very pleasantly incur.

Encouraged about the momentum the momentum is very very significant so there is significant headroom.

Jeffrey Ryan Stewart: So, there is significant headroom and what we see in the market dynamic is that, unlike what you might think that patients would always want to rotate off of their medications because of the severity of the disease, actually positions haven't been able to really move the market very much over the years, simply because it's very dangerous to try to go to another drug that hasn't provided any increase in benefit for those patients. It puts those patients at risk.

And what we see in the market dynamic is that.

Unlike what you might think that patients would always want to rotate off of their medications because of the severity of the disease actually positions haven't been able to really move the market very much over the years simply because it's very dangerous to try to go to another drug that hasnt provided any increase in benefit for those patients it puts those.

Rob Michael: It puts those patients at risk. So when you look at what Tom had highlighted, our ability with two complementary assets, for example, in the US, Skyrizi position in the early lines, Rinvoq position in later lines, both of which have exceptional performance criteria versus the market, that gives us a lot of confidence. The other thing that gives us a lot of confidence because there will be more competitive entries in the future is we think our profiles are going to hold up exceptionally well. And then there's the commercial executional component. In most of the countries around the world, we have dual sales forces that basically will carry two products with four big indications. So our ability to compete in the market for share, even as it gets a little more competitive over time, is still going to be very, very strong.

Jeff Stewart: It puts those patients at risk. So when you look at what Tom had highlighted, our ability with two complementary assets, for example, in the US, Skyrizi position in the early lines, Rinvoq position in later lines, both of which have exceptional performance criteria versus the market, that gives us a lot of confidence. The other thing that gives us a lot of confidence because there will be more competitive entries in the future is we think our profiles are going to hold up exceptionally well. And then there's the commercial executional component. In most of the countries around the world, we have dual sales forces that basically will carry two products with four big indications. So our ability to compete in the market for share, even as it gets a little more competitive over time, is still going to be very, very strong.

Jeffrey Ryan Stewart: So, when you look at what Tom had highlighted, our ability with two complementary assets, for example, in the U.S, Skyrizi position in the early lines, Rinvoq position in later lines, both of which have exceptional performance criteria versus the market, that gives us a lot of confidence. The other thing that gives us a lot of confidence, because there will be more competitive entries in the future, is we think our profiles are going to hold up exceptionally well and then there's the commercial execution component. And most of the countries around the world will have dual sales forces that basically will carry two products with four big indications. So, our ability to compete in the market for sure.

We'll be more competitive entries in the future is we think our profiles are going to hold up exceptionally well and then theres the commercial execution component and most of the countries around the world. We have dual sales forces that basically will carry two products with four big indications so our ability to compete in the market for sure.

Jeffrey Ryan Stewart: So, our ability to compete in the market for share, even as it gets a little more competitive over time is still going to be very very strong. So, lots of headroom in the market, lots of unmet need in the market and we believe we have the best position in the market for the foreseeable future.

Even as it gets a little more competitive over time is still going to be very very strong. So lots of headroom in the market lots of unmet need in the market and we believe we have the best position in the market for the foreseeable future.

Rob Michael: So lots of headroom in the market, lots of unmet need in the market. We believe we have the best position in the market for the foreseeable future.

Jeff Stewart: So lots of headroom in the market, lots of unmet need in the market. We believe we have the best position in the market for the foreseeable future.

[Analyst]: Gary, this is Rob. On your question regarding the 2025 guide, we do periodically update the long-term guidance for our portfolio. We're obviously very pleased with the momentum we're seeing both from Skyrizi and Rinvoq, particularly in IBD. If you recall, last time we provided guidance for Skyrizi, we had about $2.5 billion of revenue in IBD in 2025. It was $1.8 billion for Rinvoq. Those are obviously ramping very nicely. We have a lot of confidence. We periodically update that guidance. We'll find the right time to provide a holistic update to our long-term guide. But clearly, the momentum is there. The street reflects that too. I mean, if I look at consensus now for Skyrizi, I think it's around $11 billion. So it's $1 billion higher than our 2025 guide. So I think the market's recognizing the strong momentum.

Rob Michael: Gary, this is Rob. On your question regarding the 2025 guide, we do periodically update the long-term guidance for our portfolio. We're obviously very pleased with the momentum we're seeing both from Skyrizi and Rinvoq, particularly in IBD. If you recall, last time we provided guidance for Skyrizi, we had about $2.5 billion of revenue in IBD in 2025. It was $1.8 billion for Rinvoq. Those are obviously ramping very nicely. We have a lot of confidence. We periodically update that guidance. We'll find the right time to provide a holistic update to our long-term guide. But clearly, the momentum is there. The street reflects that too. I mean, if I look at consensus now for Skyrizi, I think it's around $11 billion. So it's $1 billion higher than our 2025 guide. So I think the market's recognizing the strong momentum.

Robert Michael: Gary, this is Rob, on your question regarding '25 guide, we do periodically update the long term guidance for our portfolio. We're obviously very pleased with the momentum we're seeing both from Skyrizi and Rinvoq, particularly in IBD. As you recall, when we provided that last one provided guidance for Skyrizi, we had about $2.5 billion of revenue in IBD on 2025, and it was $1.8 billion for Rinvoq, and those are obviously ramping very nicely with a lot of confidence.

You recall when we provided that last one provided guidance for <unk>, we had about $2 5 billion of revenue in IBD on 2025, and it was $1 8 billion for invoke and those are obviously ramping very nicely with a lot of confidence.

Robert Michael: We periodically update that guidance, we'll find the right time to provide a holistic update to our long term guide, but clearly the momentum is there and the Street reflects that too, when I look at consensus now for Skyrizi, I think it's around $11 billion, so, it's a $1 billion higher than our 2025 guide. So, I think the market's recognizing the strong momentum and we will update that long term guide holistically at the appropriate time.

[Analyst]: We'll update that long-term guide holistically at the appropriate time.

Rob Michael: We'll update that long-term guide holistically at the appropriate time.

Long term guide holistically at the appropriate time.

Liz Shea: Next question, please.

Operator: Next question comes from Luisa Hector with Berenberg. Your line is open.

Operator: Our next question comes from Luisa Hector, with Berenberg. Your line is open.

Carrie Strom: Hi, there. Thank you for taking my question. To continue with IBD, I just wondered if you could talk a little bit more about the AbbVie pipeline emerging behind Skyrizi and Rinvoq and how we think about that and maybe potential combinations with Skyrizi. With a recent competitor launch in psoriasis with a label where the FDA has asked for mention of TNF safety warnings, I wondered whether the FDA has mentioned anything to you about the review of label in that regard. Thank you.

Luisa Hector: Hi, there. Thank you for taking my question. To continue with IBD, I just wondered if you could talk a little bit more about the AbbVie pipeline emerging behind Skyrizi and Rinvoq and how we think about that and maybe potential combinations with Skyrizi. With a recent competitor launch in psoriasis with a label where the FDA has asked for mention of TNF safety warnings, I wondered whether the FDA has mentioned anything to you about the review of label in that regard. Thank you.

Luisa Caroline Hector: Hello, thank you for taking my question. To continue with IBD, I just wonder if you could talk a little bit more about [inaudible] the pipeline emerging behind Skyrizi and Rinvoq and how we think about [inaudible] and maybe potential combinations with Skyrizi. And with the recent [inaudible] launch [inaudible] with the label where the FDA resolves to mention it at CMS [inaudible] warnings. I wonder if the FDA has mentioned anything to you about the reveal of label in that regard? Thank you.

To continue.

With ITC I, just wonder if you could talk a little bit more about the pipeline.

Emerging behind.

As Jim Lynde bulk and how we think about Boston and maybe potential combinations with <unk>.

And with the recent Kentucky no.

Yes.

Your line.

Within April.

Hey, Bob.

Awesome.

Thank you.

I wanted to do.

About <unk> of <unk>.

Michael and Matt Mccall.

Okay.

[Analyst]: Hi, it's Roopal. I'll take the IBD question. So you've heard already some mention of lutikizumab. That's our IL-1 alpha beta bispecific antibody. That's an in-house antibody. And we have observed data where there's resistance to anti-TNF and other biologics with patients with an IL-1 beta signal. So we'll be entering into ulcerative colitis looking at a potential biomarker approach. But in addition to that, we'll also be looking at a set of combinations as was already mentioned. For example, with Skyrizi, we have lutikizumab. We have other agents as well. RIPK-1 was also mentioned. There's also some partnerships that we have. GLP-2 is another mechanism we're interested in. And another one I'll mention is an IL-2 mutein. All of these are under assessment.

Roopal Thakkar: Hi, it's Roopal. I'll take the IBD question. So you've heard already some mention of lutikizumab. That's our IL-1 alpha beta bispecific antibody. That's an in-house antibody. And we have observed data where there's resistance to anti-TNF and other biologics with patients with an IL-1 beta signal. So we'll be entering into ulcerative colitis looking at a potential biomarker approach. But in addition to that, we'll also be looking at a set of combinations as was already mentioned. For example, with Skyrizi, we have lutikizumab. We have other agents as well. RIPK-1 was also mentioned. There's also some partnerships that we have. GLP-2 is another mechanism we're interested in. And another one I'll mention is an IL-2 mutein. All of these are under assessment.

Okay.

Roopal Thakkar: Hi, it's a Roopal, I'll take the IBD question. So, you have heard already some mention of Ludikizumab, that's our IL-1 alpha beta bispecific antibody. That's an in house antibody and we have observed data where there is resistance to anti TNF and other biologics with patients with one beta signal. So, we will be entering into ulcerative colitis looking at a potential biomarker approach, but in addition to that, we'll also be looking at a set of combinations, as was already mentioned for example, with Skyrizi, we have Ludikizumab.

So.

You have heard already some mention of <unk> thats, our IL, one alpha beta by specific antibody.

That's an in house.

The body and we have observed.

Data, where there is resistance to anti TNF and other biologics with patients with one beta signal. So we will be entering into ulcerative colitis looking at a potential biomarker approach, but in addition to that we'll also be looking at.

Set of combinations as was already mentioned for example, with Sky Rizzi, we have ludy Kizziah ma'am.

Roopal Thakkar: We have other agents as well, Rip K-1 was also mentioned. There is also some partnerships that we have, GLP2 is another mechanism we're interested in, and another one I'll mentioned is an IL2 mutein. All of these are under assessment and we do believe either you find a biomarker approach, where you can see the high efficacy or if you want to see real transformational efficacy, you're going to have to go with a combination approach. So, those are the assets will be looking at.

There is also some partnerships that we have <unk> two is another mechanism we're interested in and another one I'll mentioned is an IL two mu team all of these are.

[Analyst]: And we do believe either you find a biomarker approach where you can see the high efficacy, or if you want to see real transformational efficacy, you're going to have to go with a combination approach. So those are the assets we'll be looking at. Now, moving on to the question, I think it was around depression and suicidal ideation, if I heard it correctly. This was in an IL-17 class agent that was recently approved. We've also observed a similar warning and precaution previously also in the IL-17 class. In fact, that previous asset, in fact, had a REMS in place. Remember, Skyrizi is an anti-IL-23, very different class. And to date, with all the data that's been generated across numerous indications, we don't see that type of signal at all, nor do we have any of that in our label.

Roopal Thakkar: And we do believe either you find a biomarker approach where you can see the high efficacy, or if you want to see real transformational efficacy, you're going to have to go with a combination approach. So those are the assets we'll be looking at. Now, moving on to the question, I think it was around depression and suicidal ideation, if I heard it correctly. This was in an IL-17 class agent that was recently approved. We've also observed a similar warning and precaution previously also in the IL-17 class. In fact, that previous asset, in fact, had a REMS in place. Remember, Skyrizi is an anti-IL-23, very different class. And to date, with all the data that's been generated across numerous indications, we don't see that type of signal at all, nor do we have any of that in our label.

Under assessment and we do believe either you find.

A biomarker approach, where you can see the high efficacy or if you want to see real transformational efficacy youre going to have to go with a combination approach. So those are the assets will be looking at now.

Roopal Thakkar: Now, moving on to the question. I think it was around depression and suicidal ideation, if I heard it correctly. This was in an IL-17 class agent that was recently approved, we've also observed a similar warning and precautions, previously also in the IL-17 class. In fact, that previous asset had a rems in place. Remember, Skyrizi is our anti IL-23, very different class and to date with all of the data that's been generated across numerous indications, we don't see that type of signal at all. Nor do we have any of that in our label. and as we look at psoriasis.

I think it was around depression, and suicidal ideation, if I heard it correctly.

This was in an IL 17 class agent that was recently approved we've also observed a similar warning and precautions previously also in the IL 17 class and fact that previous asset in fact had a rems in place.

I remember <unk> is our anti IL 23.

Very different class and to date with all of the data that's been generated across numerous indications we don't see that type of signal at all nor do we have any of that in our label and as we look at psoriasis.

[Analyst]: As we look at psoriasis therapy, that particular agent that's been mentioned has been available in Europe. Our physicians really don't tell us that there's much of an uptake there. So Skyrizi continues to perform well. Also, our label does not have the high rate of fungal infections that have been observed with a new one in the IL-17 class. And also, we've talked a lot about IBD. Skyrizi doesn't also lead to IBD, which is another risk for the IL-17 class. And also, with our dosing regimen, you get it at zero in week four, and then it's quarterly after that. With the new one, I think there's five doses that are required, then potentially every eight weeks or in heavier patients every four weeks. So we're very confident in Skyrizi's position across indications, especially in psoriasis.

Roopal Thakkar: As we look at psoriasis therapy, that particular agent that's been mentioned has been available in Europe. Our physicians really don't tell us that there's much of an uptake there. So Skyrizi continues to perform well. Also, our label does not have the high rate of fungal infections that have been observed with a new one in the IL-17 class. And also, we've talked a lot about IBD. Skyrizi doesn't also lead to IBD, which is another risk for the IL-17 class. And also, with our dosing regimen, you get it at zero in week four, and then it's quarterly after that. With the new one, I think there's five doses that are required, then potentially every eight weeks or in heavier patients every four weeks. So we're very confident in Skyrizi's position across indications, especially in psoriasis.

Roopal Thakkar: And as we look at psoriasis, their therapy, that particular agent that's been mentioned has been available in Europe, and our physicians really don't tell us that there is much of an uptake there. So, Skyrizi continues to perform well. Also, our label does not have the high rate of fungal infections that have been observed with a new one in the 17 class.

Their therapy.

That particular agent that's been mentioned has been available in Europe, and our physicians really don't tell us that.

That there is much of an uptake there. So sky resi continues to perform well also our label does not have the high rate of fungal infections that have been observed with a new one in the 17 class.

Roopal Thakkar: Also, we've talked a lot about IBD, Skyrizi doesn't also lead to IBD, which is another risk for the IL-17 class. And also, with our dosing regimen you get it at zero in week four and then its quarterly after that. With the new one, I think there's five doses that are required then potentially every eight weeks or in heavier patients, every four weeks. So, we're very confident in Skyrizi's position across indications, especially in psoriasis.

Third then potentially every eight weeks or and heavier patients every four weeks. So we're very confident in.

<unk> position across indications, especially in psoriasis.

Liz Shea: Thanks, Luisa. Operator, next question, please.

Liz Shea: Thanks, Luisa. Operator next question, please.

Operator: Next question comes from David Risinger with Leerink Partners. Your line is open.

Operator: Our next question comes from David Risinger, with Leerink Partners. Your line is open.

Liz Shea: Yes. Thanks very much. So I'll expand upon your vision for oncology. Clearly, the company has compelling assets. But in light of an increasingly complex and competitive oncology landscape, could you just paint a picture of how you see your portfolio evolving and opportunities to acquire assets when it may be difficult to see what's around the corner from, let's say, an emerging oncology competitor in three to four years? Thanks very much.

David Risinger: Yes. Thanks very much. So I'll expand upon your vision for oncology. Clearly, the company has compelling assets. But in light of an increasingly complex and competitive oncology landscape, could you just paint a picture of how you see your portfolio evolving and opportunities to acquire assets when it may be difficult to see what's around the corner from, let's say, an emerging oncology competitor in three to four years? Thanks very much.

David Risinger: Yes, thanks very much. Could you expand upon your vision for oncology, clearly the company has compelling assets but, in light of an increasingly complex and competitive oncology landscape, could you just paint a picture of how you see your portfolio evolving? And opportunities to acquire assets when it may be difficult to see what's around the corner from, let's say, an emerging oncology in three to four years, thanks very much.

Yes.

And upon your vision for oncology clearly the company has.

Compelling assets, but in light of an increasingly complex and competitive oncology landscape could you just paint a picture of how you see.

Your portfolio evolving and.

And opportunities to acquire assets.

When it may be difficult to see what's around the corner from let's say in emerging oncology.

And three to four years, thanks very much.

Operator: Hi, this is Tom Hudson. We've been sort of, when we talk about ABV-400, we're also talking about going to a different space than lung and breast where there's a lot of competition, like colon cancer, gastric cancer, pancreas. So c-Met is a target that's expressed in many other tumors. And that's why we've developed this with Topo Warhead, so we can go to a broader set of tumors. And that's where we're seeing the very good data with the ABV-400. Even unselected patient population, third line plus, we saw 22% response versus 2% to 3%. What's also interesting about this is it's not just for colon cancer, but most chemos, most treatments in GI tumors have a lot of toxicity, a lot of diarrhea. And one of the things that excited the clinicians about this program is actually the very low rate of diarrhea.

Tom Hudson: Hi, this is Tom Hudson. We've been sort of, when we talk about ABV-400, we're also talking about going to a different space than lung and breast where there's a lot of competition, like colon cancer, gastric cancer, pancreas. So c-Met is a target that's expressed in many other tumors. And that's why we've developed this with Topo Warhead, so we can go to a broader set of tumors. And that's where we're seeing the very good data with the ABV-400. Even unselected patient population, third line plus, we saw 22% response versus 2% to 3%. What's also interesting about this is it's not just for colon cancer, but most chemos, most treatments in GI tumors have a lot of toxicity, a lot of diarrhea. And one of the things that excited the clinicians about this program is actually the very low rate of diarrhea.

Tom Hudson: Hi, This is Tom Hudson. When we talk about 400, we're also talking about going a different space than lung and breast, where there's a lot of competition, like colon cancer, gastric cancer, pancreas. So, C-met as a target is expressed in many other tumors and that's why we developed this with topel warhead, so we can go to a broader set of tumors, that's where we're seeing that very good data with 8400, even unselected patient population third line plus we saw 22% response versus 2% to 3%. What's also interesting about this is, it's not just for colon cancer, but most chemos, most treatments in GI tumors have a lot of toxicity, lot of diarrhea. and one of the things that excited the clinicians.

We've been.

When we talk about 400, we're also talking about going a different space than lung and breast where theres a lot of competition like calling a colon cancer gastric cancer pancreas. So C met as a target is expressed in many other tumors and that's why we developed this with topel warhead. So we can go to a broader set of tumors.

That's where we're seeing that very good data with 8400, even unselected patient population third line plus we saw 22% response versus 2% to 3%. What's also interesting about this is it's not just for colon cancer, but most chemosmosis treatments in Gi tumors have a lot of toxicity lot of diarrhea, and one of the things that excited the clinicians.

Tom Hudson: And one of the things that excited the clinicians about this program is actually a very low rate of diarrhea. So, it makes that not only can we see some efficacy in third line, but it sees we can move to earlier lines and combine it with other therapies that have a higher efficacy. So, there's a lot of unmet need in GI tumors and so, this data again, we're going to have more data on our next cohort at the end of this year, in CRC we'll have different doses and we'll also have potential cutoffs of biomarkers.

About this program as it is actually a very low rate of diarrhea. So it makes that not only can we see some.

Operator: So it makes that not only can we see some efficacy in third line, but it sees we can move to earlier lines, and combine with other therapies, and have a higher efficacy. So there's a lot of unmet need in GI tumors. And so this data, again, we're going to have more data in our next cohort at the end of this year in CRC. We'll have different doses. And we'll also have potential cutoffs of biomarkers. So we're moving very well. But to actually in a big space in GI tumors, as I mentioned, even our GARP program, also where we've shown the best data is in liver cancer, where c-Met's also expressed. We have opportunities to go explore places where there's a big unmet need, and the competition is not the same.

Tom Hudson: So it makes that not only can we see some efficacy in third line, but it sees we can move to earlier lines, and combine with other therapies, and have a higher efficacy. So there's a lot of unmet need in GI tumors. And so this data, again, we're going to have more data in our next cohort at the end of this year in CRC. We'll have different doses. And we'll also have potential cutoffs of biomarkers. So we're moving very well. But to actually in a big space in GI tumors, as I mentioned, even our GARP program, also where we've shown the best data is in liver cancer, where c-Met's also expressed. We have opportunities to go explore places where there's a big unmet need, and the competition is not the same.

Efficacy in third line, but it <unk>, we can move to earlier lines and combined with other therapies that have a higher efficacy. So theres a lot of unmet need in Gi tumors and so this data again, we're going to have more data on our next cohort at the end of this year in CRC will have different doses.

And we'll also have potential cutoffs of Biomarkers. So.

Tom Hudson: So, we're moving very well, but to actually in a big space in GI tumors. As I've mentioned, even our GARP program also where we've shown the best data is in liver cancer, where CMS also expressed, we have opportunities to go explore places where there's a big unmet need and the competition is not the same.

As I've mentioned, even our GARP program also where we've shown the best data is in liver cancer, where CMS also expressed we have opportunities to go explore places where there's a big unmet need and the competition is not the same.

Operator: Now, the other targets, because we talked about Topo platform, we have others, 706, which is already in the clinic with CEST-6. Next year, we'll be going to two other indications for which there's less competition in terms of ADC space. So our strategy is actually to go and bring this as an offering to a lot more cancer patients. I'll start there. I'll stop there. Oh, and then maybe in Heme? Roopal.

Tom Hudson: Now, the other targets, because we talked about Topo platform, we have others, 706, which is already in the clinic with CEST-6. Next year, we'll be going to two other indications for which there's less competition in terms of ADC space. So our strategy is actually to go and bring this as an offering to a lot more cancer patients. I'll start there. I'll stop there. Oh, and then maybe in Heme? Roopal.

Tom Hudson: Now, the other targets because we talked about [inaudible] platform, we have others 706, which is already in the clinic with [inaudible]6 next year, we will be going to two other indications, which for which there is less competition in terms of ADC space. So, our strategy is actually to go and bring this offering to a lot more cancer patients. I'll stop there.

Now turning to a lot more cancer patients.

I'll start that and I'll stop there.

Roopal Thakkar: It's Roopal. Thank you, let me add on a little bit. I think you may be also reflecting on some of the ESMO data that came out. I will mention, longer little bit, we still see an opportunity with [inaudible], we're going to get data later this year, but we'll leave already observed is 50% ORRs in a biomarker selected population in the EGFR wild type. If you look at some of the data that has come out the ORRs are probably right around 20% to 30%, we don't have all the breakdown of all the different lung subtypes, but one approach is to use a biomarker and then select the patient population, rather than going so broadly, that was observed at ESMO. The other thing I would say.

[Analyst]: It's Roopal. Thank you. Let me add on a little bit. I think you may be also reflecting on some of the ESMO data that came out. I will mention lung a little bit. We still see an opportunity with Teliso-V. We're going to get data later this year. But what we've already observed is 50% ORRs in a biomarker-selected population in the EGFR wild type. If you look at some of the data that has come out, the ORRs are probably right around 20% to 30%. We don't have all the breakdown of all the different lung subtypes. But one approach is to use a biomarker and then select the patient population rather than going so broadly. That was observed at ESMO.

Roopal Thakkar: It's Roopal. Thank you. Let me add on a little bit. I think you may be also reflecting on some of the ESMO data that came out. I will mention lung a little bit. We still see an opportunity with Teliso-V. We're going to get data later this year. But what we've already observed is 50% ORRs in a biomarker-selected population in the EGFR wild type. If you look at some of the data that has come out, the ORRs are probably right around 20% to 30%. We don't have all the breakdown of all the different lung subtypes. But one approach is to use a biomarker and then select the patient population rather than going so broadly. That was observed at ESMO.

It's rupal. Thank you, let me add on a little bit I think you may be also reflecting on some of the ESMO data that came out.

Will mentioned longer little bit, we still see an opportunity with <unk>, we're going to get data later this year, but we'll leave already observed is 50% or ours in a biomarker selected population in the Egfr Wild type. If you look at some of the data that has come out the <unk>.

Probably right around 20% to 30%, we don't have all the breakdown of all the different lung subtypes, but one approach is to use a biomarker and then select the patient population rather than going so broadly that was observed at ESMO. The other thing I would say.

[Analyst]: The other thing I would say reflecting on the data that came out, if you looked at EGFR mutants in lung, you see some higher levels of efficacy either in the front line or second line in that space. But that comes at a cost. That's a chemo-like adverse event profile. And those are things like nausea, vomiting, stomatitis, alopecia, fatigue. These are things that you may see slight increases in efficacy, but clearly, patients don't want that. And as Tom was mentioning with our platform and including Teliso-V, we have an opportunity there in the mutant side to combine with osimertinib, which has a nice profile. And those mutant patients, when they progress, half of them have highly expressed c-Met. So that's where a combo looks good. And then we're also seeing 50% ORR in that segment as well.

Roopal Thakkar: The other thing I would say reflecting on the data that came out, if you looked at EGFR mutants in lung, you see some higher levels of efficacy either in the front line or second line in that space. But that comes at a cost. That's a chemo-like adverse event profile. And those are things like nausea, vomiting, stomatitis, alopecia, fatigue. These are things that you may see slight increases in efficacy, but clearly, patients don't want that. And as Tom was mentioning with our platform and including Teliso-V, we have an opportunity there in the mutant side to combine with osimertinib, which has a nice profile. And those mutant patients, when they progress, half of them have highly expressed c-Met. So that's where a combo looks good. And then we're also seeing 50% ORR in that segment as well.

Roopal Thakkar: The other thing I would say reflecting on the data that came out, if you looked at EGFR mutants in lung, you see some higher levels of efficacy, either in the frontline or second line in that space, but that comes at a cost. And that's a chemo-like adverse event profile. And those are things like nausea, vomiting, stomatitis, alopecia, fatigue. These are things that you may see slight increases in efficacy, but clearly patients don't want that. And, as Tom was mentioning, with our platform and including [inaudible], we have an opportunity there in the mutant side to combine with [inaudible], which has a nice profile.

<unk> on the data that came out if you looked at Egfr mutants in lung.

See some higher levels of efficacy either in the frontline or second line in that space, but that comes at a cost.

And that's a chemo like.

Adverse event profile and those are things.

Like nausea, vomiting, stomatitis alopecia fatigue. These are things that you may see slight increases in efficacy, but clearly patients don't want that and like as Tom was mentioning with our platform and including police Avi we have an opportunity there in the <unk>.

<unk> side to combine with.

<unk>, which has a nice profile.

Roopal Thakkar: And those mutant patients, when they progress half of them have highly expressed C-met. So that's where our combo looks good and then we're also seeing 50% ORR in that segment as well. And we have a plan to get into phase III into that next year. And then, as we think about heme, we spoke about 383, which we feel has best in class potential, and one of the things that we're observing with that one is the high level of efficacy, CRS were driving down past grade 3 and now driving down to get past grade 2. So, that enables a potential.

[Analyst]: We have a plan to get into phase 3 in that next year. Then as we think about heme, we spoke about 383, which we feel has best-in-class potential. One of the things that we're observing with that one is the high level of efficacy. With CRS, we're driving down past grade 3 and now driving down to get past grade 2. So that enables a potential where you may not need hospitalization. What you see now with the BCMA dual engagers is not just hospitalization, but a REMS. What we would add to that is dose spacing potentially every other month. So that one is a very nice profile. We're moving into phase 3 with that one. We continue to conduct a variety of combinations there so we can move into earlier lines of therapy in multiple myeloma.

Roopal Thakkar: We have a plan to get into phase 3 in that next year. Then as we think about heme, we spoke about 383, which we feel has best-in-class potential. One of the things that we're observing with that one is the high level of efficacy. With CRS, we're driving down past grade 3 and now driving down to get past grade 2. So that enables a potential where you may not need hospitalization. What you see now with the BCMA dual engagers is not just hospitalization, but a REMS. What we would add to that is dose spacing potentially every other month. So that one is a very nice profile. We're moving into phase 3 with that one. We continue to conduct a variety of combinations there so we can move into earlier lines of therapy in multiple myeloma.

And we have a plan to get into phase III into that next year and then as we think about heme.

We spoke about 383, which we feel is best class best in class potential and one of the things that we're observing with that one is the high level of efficacy Crs were driving down past grade three and now driving driving down to get past grade too so that enables a potential.

Roopal Thakkar: So, that enables a potential where you may not need hospitalization, and what you see now with the BCMA dual engagers is not just hospitalization, but a rems. And what we would add to that, is dose spacing potentially every other month. So, that one is a very nice profile and we will be moving into phase III with that one and we continue to conduct a variety of combinations there so we can move into earlier lines of therapy, in multiple myeloma. We're still moving into earlier lines in phase III with [inaudible] in heme. Which is another dual engager, we have an asset called 453, which is our nextgen BCL2 blocker and then, we have a BTK degrater called 101 that's also in clinics, so quite a comprehensive approach across oncology.

There you may not need hospitalization and what you see now with the <unk> dual engages its not just hospitalization, but a rems and what we would add to that is dose spacing potentially every other month. So that one is a very nice profile and we will be moving into phase III with that one and we continue to conduct.

Variety of combinations. There. So we can move into earlier lines of therapy in multiple myeloma, we're still.

[Analyst]: We are still moving into earlier lines in Phase 3s with Epkinli in heme, which is another dual engager. We have an asset called 453, which is our next-gen BCL-2 blocker. And then we have a BTK degrader called 101 that's also in clinic. So quite a comprehensive approach across oncology.

Roopal Thakkar: We are still moving into earlier lines in Phase 3s with Epkinli in heme, which is another dual engager. We have an asset called 453, which is our next-gen BCL-2 blocker. And then we have a BTK degrader called 101 that's also in clinic. So quite a comprehensive approach across oncology.

Moving into earlier lines in phase III with <unk> chemo keenly in heme.

Which is another dual engage or we have an asset called for a five three which is our nextgen bcl two.

Blocker and then we have a b teekay to greater called 101. That's also in clinics, so quite a comprehensive approach across oncology.

Liz Shea: Thanks, David. Operator, next question, please.

Operator: Yes. Our next question comes from Jeff Meacham with Bank of America. Your line is open.

Operator: Yes. Our next question comes from Geoff Meacham with Bank of America. Your line is open.

Operator: Yes. Our next question comes from Geoff Meacham, with Bank of America. Your line is open.

Liz Shea: Hi, guys. Morning. Thanks for the question. Just have a couple of quick ones. One on immunology. So do you guys have evaluated the impact from Humira biosimilars beyond even 25? Is it your view that tail revenues are likely to be better than you initially modeled? And what, if anything, do Stelara, the delay in Stelara biosimilars, impact this? And the second question, just on capital deployment, you've just given your higher guidance. I know you guys just raised the dividend, but would you also say that the deal capacity is higher? I know you recently raised kind of an M&A range and wondering if that's even going higher. Thank you.

Geoff Meacham: Hi, guys. Morning. Thanks for the question. Just have a couple of quick ones. One on immunology. So do you guys have evaluated the impact from Humira biosimilars beyond even 25? Is it your view that tail revenues are likely to be better than you initially modeled? And what, if anything, do Stelara, the delay in Stelara biosimilars, impact this? And the second question, just on capital deployment, you've just given your higher guidance. I know you guys just raised the dividend, but would you also say that the deal capacity is higher? I know you recently raised kind of an M&A range and wondering if that's even going higher. Thank you.

Geoff Meacham: Hi, guys, good morning, thanks for the question. Just have a couple of quick ones, on in immunology, so, you guys have evaluated the impact from Humira Biosimilars beyond even '25 is it your view that tail revenues are likely to be better than you initially model, and what if anything do Stelara, the delay in Stelara Biosimilars impact this? And the second question, just on capital deployment, you've just given your higher guidance, I know you guys just raised the dividend, but would you also say that the deal capacity is higher? I know you recently raised kind of M&A range and wondering if that's even going higher. Thank you.

Immunology. So you guys have evaluated the impact from.

From Humira Biosimilars beyond even 25 is it your view that tail revenues are likely to be better than you. Initially model, then and what if anything do still Laura the delay in the Lora Biosimilars.

And the second question just on capital deployment.

Just given your higher guidance I know you guys just raised the dividend, but would you also say that the deal capacity is.

As higher I know you recently raised kind of M&A range and wondering if thats, if thats, even going higher thank you.

[Analyst]: Yeah. Hi, it's Jeff. It's Jeff here. We continue to study the tail. I mean, it's something that we look very closely at. We continue to think that the Humira tail will emerge sometime in 2025 or 2026. That's looking at some of the international analogs, how we think we see pricing may move. I mean, the one thing that we do believe is that you're not going to have a small molecule-like tail, which is virtually nothing. There's going to be a subsegment of patients that are going to stay on Humira. It's going to be modest, whether it's low price or low volume. But it'll be there, even in an interchangeable world. We don't necessarily believe that since we've outperformed here in volume in 2023, that that's going to fundamentally change our view on the tail at this point. Again, we're still highlighting that.

Jeff Stewart: Yeah. Hi, it's Jeff. It's Jeff here. We continue to study the tail. I mean, it's something that we look very closely at. We continue to think that the Humira tail will emerge sometime in 2025 or 2026. That's looking at some of the international analogs, how we think we see pricing may move. I mean, the one thing that we do believe is that you're not going to have a small molecule-like tail, which is virtually nothing. There's going to be a subsegment of patients that are going to stay on Humira. It's going to be modest, whether it's low price or low volume. But it'll be there, even in an interchangeable world. We don't necessarily believe that since we've outperformed here in volume in 2023, that that's going to fundamentally change our view on the tail at this point. Again, we're still highlighting that.

Jeffrey Ryan Stewart: Hi, it's Jeff here, and we continue to study the tail, it's something that we're we look very closely at. We continue to think that the humira tail will emerge sometime in '25 or '26 and that's looking at some of the international analogs, how we think we see pricing may move. And the one thing that we do believe is that you're not going to have a small molecule like tail, which is virtually nothing, there's going to be a subsegment of patients that are going to stay on Humira, it's going to be modest, whether it's low price or our low volume, but it'll be there.

Geoff it's Jeff here and we continue to study the tail I mean, it's something that we're we look very closely at we continue to think that the humira tail will.

<unk> sometime in 'twenty five 'twenty six and that's looking at some of the international analogs. How we think we see pricing may move I mean, the one thing that we do believe is that youre not going to have a small molecule like tail, which is virtually nothing theres going to be a <unk>.

Subsegment of patients that are going to stay on humira, it's going to be modest whether it's.

Low price or our low volume, but it'll it'll be there.

Jeffrey Ryan Stewart: Even in an interchangeable world, we don't necessarily believe that, since we outperformed here in volume in '23 that that's going to fundamentally change our view on the tail at this point. And again, we're still highlighting that. In terms of Stelara, obviously, we think in the U.S that will not come until, I think it was recently confirmed this week until sometime in '25, and so overall, we think that's a modest net positive for for AbbVie in terms of how that may play out. But that's not the primary driver of our strategy. Our primary driver of the strategy is how distinctive we are across our indications with Skyrizi versus Stelara, which I've already highlighted. So, I hope that helps.

[Analyst]: In terms of Stelara, obviously, we think in the US that will not come until, and I think it was recently confirmed this week, until sometime in 2025. And so overall, we think that's a modest net positive for AbbVie in terms of how that may play out. But that's not the primary driver of our strategy. Our primary driver of the strategy is how distinctive we are across our indications with Skyrizi versus Stelara, which I've already highlighted. So hope that helps. And Jeff, this is Rob. You're right. We did lift the cap. We had put that $2 billion BD cap in place while we were rapidly paying down debt. And we lifted that at the beginning of this year because we essentially, by the end of this year, we're going to have paid off all the incremental financing from the Allergan transaction.

Jeff Stewart: In terms of Stelara, obviously, we think in the US that will not come until, and I think it was recently confirmed this week, until sometime in 2025. And so overall, we think that's a modest net positive for AbbVie in terms of how that may play out. But that's not the primary driver of our strategy. Our primary driver of the strategy is how distinctive we are across our indications with Skyrizi versus Stelara, which I've already highlighted. So hope that helps. And Jeff, this is Rob. You're right. We did lift the cap. We had put that $2 billion BD cap in place while we were rapidly paying down debt. And we lifted that at the beginning of this year because we essentially, by the end of this year, we're going to have paid off all the incremental financing from the Allergan transaction.

Obviously, we think in the U S that will not come until I think it was recently confirmed this week until sometime in 'twenty five and so overall, we think thats a modest net positive for for Abbvie in terms of how that may play out.

Jeffrey Ryan Stewart: But that's not the primary driver of our strategy. Our primary driver of the strategy is how distinctive we are across our indications with Skyrizi versus Stelara, which I've already highlighted. So, I hope that helps. and Jeff. This is Rob Youre right. We did we did lift the cap we had put that $2 billion BD cap in place, while we are rapidly paying down. Debt.

Robert Michael: and Geoff. This is Rob, you're right, we did lift the cap we had put that $2 billion BD cap in place, while we are rapidly paying down debt. And we lifted out at the beginning of this year because we essentially, by the end of this year we're going to have paid off all of the incremental financing for the Allergan transaction, as Scott mentioned, our net leverage ratio is around 1.8 times and I have said previously that, as long as we have a path back to two times net leverage in two to three years, that's the way we're thinking about balance sheet capacity.

Debt.

And we lifted out at the beginning of this year because we essentially by the end of this year, we're going to have paid off all of the incremental financing for the Allergan transaction as Scott mentioned, our net leverage ratio is around one eight times and I have said previously that as long as we have a path back to two times net leverage and two to three years, that's the way we're thinking about.

[Analyst]: As Scott mentioned, our net leverage ratio is around 1.8 times. I have said previously that as long as we have a path back to two times net leverage in two to three years, that's the way we're thinking about balance sheet capacity. As we look at it, there's nothing from a balance sheet capacity standpoint that would limit us today from pursuing the opportunities we'd be interested in. That's not a limiting factor. To the extent that we continue to raise guidance and perform more strongly, that just means there's even more capacity. But at this point, that's not a rate limiter for the types of opportunities we'd be interested in.

Jeff Stewart: As Scott mentioned, our net leverage ratio is around 1.8 times. I have said previously that as long as we have a path back to two times net leverage in two to three years, that's the way we're thinking about balance sheet capacity. As we look at it, there's nothing from a balance sheet capacity standpoint that would limit us today from pursuing the opportunities we'd be interested in. That's not a limiting factor. To the extent that we continue to raise guidance and perform more strongly, that just means there's even more capacity. But at this point, that's not a rate limiter for the types of opportunities we'd be interested in.

Robert Michael: So, as we look at it, there's nothing in from a balance sheet capacity that would limit us today for pursuing the opportunities we'll be interested in, so that's not a limiting factor in the extent that we continue to raise guidance and perform more strongly, that just means there's even more capacity, but at this point, that's not a rate limiter for the types of opportunities we'd be interested in.

More strongly that just means there's even more capacity, but at this point, that's not a rate limiter for the types of opportunities we'd be interested in.

Liz Shea: Thanks, Jeff. Operator, next question, please.

Liz Shea: Thanks, Geoff. Operator, next question, please.

Operator: Our next question comes from Evan Seigerman with BMO Capital Markets. Your line is open.

Operator: Our next question comes from Evan Seigerman, with BMO Capital Markets. Your line is open.

Liz Shea: Hi, all. Thank you so much for the question and congrats on the progress. So I just wanted to touch on the dividend growth. So at first glance, it seems that your dividend growth, while impressive, is slowing a bit relative to other recent periods. Maybe you could help us understand kind of what's driving this dynamic at play. Is it concerns around near-term performance of key products, Humira erosion continuing next year, or are you preserving capital for use elsewhere? Maybe some color on that would be very helpful. Thank you.

Evan Seigerman: Hi, all. Thank you so much for the question and congrats on the progress. So I just wanted to touch on the dividend growth. So at first glance, it seems that your dividend growth, while impressive, is slowing a bit relative to other recent periods. Maybe you could help us understand kind of what's driving this dynamic at play. Is it concerns around near-term performance of key products, Humira erosion continuing next year, or are you preserving capital for use elsewhere? Maybe some color on that would be very helpful. Thank you.

Evan Seigerman: Hi all, thank you so much for the question, congrats on the progress. So, I just wanted to touch on the dividend growth. So, at first glance it seems that your dividend growth well, impressive is slowing a bit relative to other recent period, maybe you could help us understand kind of what's driving that dynamic at play. Does it concern around the performance of key products, [inaudible] version continuing next year, are you preserving capital for use elsewhere, maybe some color on that would be very helpful. Thank you.

Impressive is slowing a bit relative to other recent period, maybe you could help us understand kind of what's driving that dynamic at play as it concerns around near term performance of key products.

IRA erosion continuing next year are you preserving capital for use elsewhere and maybe some color on that would be very helpful. Thank you.

[Analyst]: So Evan, it's Rob. If you think about it, we're delivering dividend growth both in 2023 and 2024 while earnings are not growing, right? So then you look at the payout ratio we're at; we're going to be in the mid-50s. We have said that over the long term, if you look at just across the industry as well, I'd say a good target is in the, say, the mid- to high 40% payout ratio, which would mean that during this period where you see your payout ratio go up in the future, we're very committed to growing the dividend. We'll continue to grow the dividend. But we would expect then earnings would grow faster than dividend increases. So I would say we've gone through this period for a couple of years where we are still delivering a very nice dividend growth despite earnings declining.

Rob Michael: So Evan, it's Rob. If you think about it, we're delivering dividend growth both in 2023 and 2024 while earnings are not growing, right? So then you look at the payout ratio we're at; we're going to be in the mid-50s. We have said that over the long term, if you look at just across the industry as well, I'd say a good target is in the, say, the mid- to high 40% payout ratio, which would mean that during this period where you see your payout ratio go up in the future, we're very committed to growing the dividend. We'll continue to grow the dividend. But we would expect then earnings would grow faster than dividend increases. So I would say we've gone through this period for a couple of years where we are still delivering a very nice dividend growth despite earnings declining.

Robert Michael: So, Evan, it's Rob. If you think about it, we're delivering dividend growth both in '23 and '24, while earnings are not growing. So then, you look at the payout ratio we're at, we're going to be in the mid 50s and we have said that, over the long term, if you look at just across the industry as well I'd say, a good target is in the mid to high 40% payout ratio, which would mean that during this period where you see the payout ratio go up in the future.

Both in 'twenty, three and 'twenty four while earnings are not growing right. So so then you look at the payout ratio. We're at we're going to be in the mid <unk> and we have said that over the long term. If you look at just across the industry as well I'd say a good target is in the let's say the mid to high 40% payout ratio, which would mean that during this period, where you see it.

<unk> ratio go up in the future.

Robert Michael: We're very committed to growing the dividend, we will continue to grow the dividend, but we would expect then earnings will grow faster than dividend increases. I would say, we've gone through this period of a couple of years where we are still delivering a very nice dividend growth, despite earnings declining, but given our commitment to that dividend, we're going to continue growing it, we will likely see it step up from here, but not at the same rate as earnings growth because of that payout ratio right now will be sitting in the mid 50s.

Earnings will grow faster than dividend increases so I would say we've gone through this period of a couple of years, where we are still delivering a very nice dividend growth despite earnings declining, but given our commitment to that dividend, we're going to continue growing it will likely see it step up from here, but not at the same rate as earnings growth because of that payout ratio right now.

[Analyst]: But given our commitment to that dividend, we're going to continue growing it. We'll likely see it step up from here, but not at the same rate as earnings growth because that payout ratio right now will be sitting in the mid-50s. So that's the way we think about it. Over the long term, we want to deliver a healthy, sustainable, growing dividend. And so we have a long view on this. And we are committed to delivering that growth to investors. And so that's the way we're thinking about it. We're going through a period of a couple of years here where earnings aren't growing. And then when we see us return a robust growth, we'll step up that dividend again. But that's a dynamic that we're balancing here.

Rob Michael: But given our commitment to that dividend, we're going to continue growing it. We'll likely see it step up from here, but not at the same rate as earnings growth because that payout ratio right now will be sitting in the mid-50s. So that's the way we think about it. Over the long term, we want to deliver a healthy, sustainable, growing dividend. And so we have a long view on this. And we are committed to delivering that growth to investors. And so that's the way we're thinking about it. We're going through a period of a couple of years here where earnings aren't growing. And then when we see us return a robust growth, we'll step up that dividend again. But that's a dynamic that we're balancing here.

Robert Michael: So, that's the way we think about it, over the long term we wanted to deliver a healthy, sustainable growing dividend and so, we have a long view on this and we are committed to delivering that growth to investors and so, that's the way we're thinking about that. We're going through a period of a couple of years here where earnings aren't growing and then we see as return of robust growth, we will step up that dividend again, but that's the dynamic that we're balancing here.

<unk>.

Step up that dividend again, but that's the dynamic that we're balancing here.

Liz Shea: Thanks, Evan. Operator, we have time for one final question.

Operator: Yes. Our last question comes from Trung Huynh with UBS. Your line is open.

Operator: Yes, our last question comes from Trung Huynh, with UBS. Your line is open.

Carrie Strom: Hi guys. Thanks for squeezing me in. I've got two. Just one, a confirmation on the trough, and then one on aesthetics. So on the trough in 2024, you mentioned that costs, you'll have the same margin in 2024 as 2023. So is it going to be a trough year on sales rather than the trough being driven by costs? And then second, again, just lots of noise on GLP-1s impacting aesthetics. You've commented before on fillers and Ozempic face in the past, but there's potential impact on body sculpting. Is this actually anything that you're seeing coming through yet in the sales? And overall, is this trend a net positive or a net negative for you? Thanks very much.

Trung Huynh: Hi guys. Thanks for squeezing me in. I've got two. Just one, a confirmation on the trough, and then one on aesthetics. So on the trough in 2024, you mentioned that costs, you'll have the same margin in 2024 as 2023. So is it going to be a trough year on sales rather than the trough being driven by costs? And then second, again, just lots of noise on GLP-1s impacting aesthetics. You've commented before on fillers and Ozempic face in the past, but there's potential impact on body sculpting. Is this actually anything that you're seeing coming through yet in the sales? And overall, is this trend a net positive or a net negative for you? Thanks very much.

Trung Chuong Huynh: Hi, guys. Thanks for squeezing me in. I've got two, just one confirmation on the trough and then one on the aesthetics. On the trough in '24, you mentioned that costs you will have the same margin in '24 as '23. Is it going to be a trough year on sales rather than the trough being driven by costs?

I've got two just one confirmation on the trough.

One on the aesthetics.

On the trough in 'twenty four you mentioned that costs you will have the same margin in 'twenty four 'twenty three so.

Is it going to be a trough year on sales rather than the trough being driven by costs.

Trung Chuong Huynh: And then second, again, just lots of noise on the GLP1's impact in aesthetics. You've commented before on fillers and Ozempic face in the past, but there's potential impact on body sculpting. Is this actually anything that you're seeing coming through yet in the sales? And overall, is this trend a net positive or negative? Thanks very much.

You've commented before on fillers and <unk> faced in the past, but theres potential impact on body sculpting.

Is this actually anything that youre seeing coming through yet in the sales and overall is this trend a net positive or negatively thanks very much.

[Analyst]: Trung, this is Rob. Clearly, we've communicated a floor for earnings. Scott previously mentioned that expect a similar level of operating margin year over year. So you can model the sales accordingly. It should be fairly clear. Operating margin profile. Operating margin profile, yes. So we said the 46% to 47% is the way to think about operating margin profile in 2023 and 2024. We've given you the $11 EPS IPR&D as a floor for next year. So I would suggest using those parameters to model revenue. Carrie?

Rob Michael: Trung, this is Rob. Clearly, we've communicated a floor for earnings. Scott previously mentioned that expect a similar level of operating margin year over year. So you can model the sales accordingly. It should be fairly clear. Operating margin profile. Operating margin profile, yes. So we said the 46% to 47% is the way to think about operating margin profile in 2023 and 2024. We've given you the $11 EPS IPR&D as a floor for next year. So I would suggest using those parameters to model revenue. Carrie?

Robert Michael: So, Trung, this is Rob. Clearly we've communicated a floor for earnings and Scott previously mentioned that expect a similar level of operating margin year over year and so, you can model the sales accordingly, should be fairly clear. Operating margin profile, you said 46% to 47% is a way to think about operating margin profile in '23 and '24, we've given you the $11 EPS ex high purity as a floor for next year so, I was just using those parameters to model revenue.

Operating margin profile operating margin profile, yes, So you said, 46% to 47% as a way to think about operating margin profile in 'twenty, three and 'twenty four we've given you the $11 EPS ex high purity as a floor for next year or so.

I was just using those parameters to.

Model revenue.

Vamil Divan: Hi, this is Carrie. For your question around the weight loss products and the impact on the aesthetics business, I mean, as we look at the long-term view of this market, we continue to think that anything that gets a subset of patients engaged in their appearance, which these weight loss products can do, that is a positive tailwind for our business. We hear that from our customers. Many of our customers are bringing these GLP-1s into their practice. They see it as a natural opportunity to cross-sell. Now, that said, in the short term, especially in an environment where discretionary spending is pressured, and there could be trade-offs for higher-priced products such as fillers or body contouring. Now, we're not necessarily seeing that as a driver. Right now, what we're seeing is the broader macroeconomic dynamics.

Carrie Strom: Hi, this is Carrie. For your question around the weight loss products and the impact on the aesthetics business, I mean, as we look at the long-term view of this market, we continue to think that anything that gets a subset of patients engaged in their appearance, which these weight loss products can do, that is a positive tailwind for our business. We hear that from our customers. Many of our customers are bringing these GLP-1s into their practice. They see it as a natural opportunity to cross-sell. Now, that said, in the short term, especially in an environment where discretionary spending is pressured, and there could be trade-offs for higher-priced products such as fillers or body contouring. Now, we're not necessarily seeing that as a driver. Right now, what we're seeing is the broader macroeconomic dynamics.

Carrie C. Strom: Hi, this is Carrie, for your question around the weight loss products and the impact on the aesthetics business. As we look at the long term view of this market, we continue to think that anything that gets a subset of patients engaged in their appearance, which [inaudible] products can do, that is a positive tailwind for our business. And we hear that from our customers, in many of our customers are bringing the GLP's into their practices and they see it as a natural opportunity to cross sell. Now, that said, in the short term especially,

Hi, This is Carey for your question around the weight loss products and the impact on the aesthetics business.

As we look at the long term view of this market, we continue to think that anything that yet.

A subset of patients engaged in their appearance with speedway products can view that as a positive tailwind for our business and we hear that from our customers in many of our customers are bringing <unk> into their practice and they see it as a natural opportunity to cross sell now that said in the short term, especially.

Carrie C. Strom: Now, that said, in the short term, especially in an environment where discretionary spending is pressured. And there could be trade off for higher priced products, such as [inaudible], or body [inaudible] now, we're not necessarily seeing that as a driver, right now what we're seeing is the broader macroeconomic dynamics. But, in the short term that could be a trade off, in terms of share of wallet, but absolutely on a long term this is something that is going to help patients get engaged in aesthetics and be an opportunity for cross selling.

In an environment, where discretionary spending is pressured.

And there could be trade off for higher priced products, such as pillar with ore body contour and now we're not necessarily seeing that as a driver right now what we're seeing is the broader macroeconomic dynamics, but.

Vamil Divan: But in the short term, that could be a trade-off in terms of share of wallet. But absolutely, in the long term, this is something that is going to help patients get engaged in aesthetics and be an opportunity for cross-selling.

Carrie Strom: But in the short term, that could be a trade-off in terms of share of wallet. But absolutely, in the long term, this is something that is going to help patients get engaged in aesthetics and be an opportunity for cross-selling.

Carrie C. Strom: But, in the short term that could be a trade off, in terms of share of wallet, but absolutely on a long term this is something that is going to help patients get engaged in aesthetics and be an opportunity for cross selling.

Liz Shea: Thanks, Trung. That concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors.abbvie.com. Thanks again for joining us.

Liz Shea: Thanks, Trung, that concludes today's conference call, if you'd like to listen to a replay of the call, please visit our website at investors.abbvie. Thanks again for joining us.

Operator: Thank you, that concludes today's conference. You may all disconnect at this time.

Operator: Thank you. And that concludes today's conference. You may all disconnect at this time.

Thank you and that concludes today's conference you may all disconnect at this time.

Q3 2023 AbbVie Inc Earnings Call

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