Q1 2025 AbbVie Inc Earnings Call

Good morning, and thanks for joining US also on the call with me today are Rob Michael Chief Executive Officer, Jeff Stuart Executive Vice President and Chief Commercial Officer Group, both Docker Executive Vice President Research and development, Chief Scientific Officer, and Scott runs Executive Vice President Chief Financial Officer before.

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 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 that'd be 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.

<unk>, so with that I'll turn the call over to Rob. Thank you Liz good morning, everyone and thank you for joining US Abbvie is off to an excellent start to the year with first quarter results exceeding expectations across several of our therapeutic areas. We also continue to advance our pre.

<unk> internal pipeline and add external opportunities to further strengthen our business and long term outlook.

Turning to our first quarter performance, we delivered adjusted earnings per share up $2.46, which is 10 cents above our guidance midpoint.

Total net revenues were more than $13 $3 billion, nearly 550 million ahead of our expectations I'm, especially pleased with the performance of our ex Humira platform, which delivered robust sales growth of more than 21%.

Immunology neuroscience oncology anesthetics are all performing at or above our expectations and we are well positioned to exceed our previous peak revenue and just the second full year following the U S Humira LOE.

Based on this strong performance, we are raising our full year adjusted earnings per share guidance by 10 cents and now expect adjusted EPS between $12 and nine.

And $12.29.

As you are aware there was speculation that sectorial tariffs could be forthcoming.

Any related impact from these tariffs as well as other potential new a reciprocal tariffs have not been contemplated in our guidance to the extent there is an impact we believe it would be in line with our peers given that Abbvie has an extensive manufacturing presence in the United States.

<unk> API biologics toxins and small molecules.

And over the next decade.

We anticipate investing more than $10 billion of capital in the U S to support our volume growth and our expansion into new areas such as obesity.

Turning back to our performance I'm very pleased with the excellent progress we are making with several pipeline programs that have the potential to be meaningful sources of growth. These include <unk> map across several immunology indications three three and multiple my.

Aloha and our next generation Adcs, including T map, a for several solid tumor types and 706 for small cell lung cancer.

We also continue to add depth to our pipeline with strategic transactions that can help drive growth in the next decade. This includes the recent acquisition of nimble therapeutics to expand our immunology portfolio with oral peptides as well as the license agreement with goober to develop and amylin.

Analogue for the treatment of obesity.

Obesity represents a significant global health concern with high unmet need this market will continue to evolve with improved offerings and we believe our program with <unk> has the potential to deliver a differentiated asset.

Going forward, we plan to invest FERC and obesity, along with other opportunities across our existing five key growth areas.

In summary, the fundamentals of our business are strong and we are well positioned for the long term abbvie has a clear runway to growth for at least the next eight years, including a high single digit revenue CAGR through 2029.

With that I'll turn the call over to Jeff for additional comments on our commercial highlights Jeff. Thank you, Rob I'll start with the quarterly results for immunology, which delivered total revenues of more than $6 $2 billion exceeding our expectations. Scott Richardson revoke are performing exceptionally well contributing $5 1 billion.

And combined sales this quarter, reflecting growth of more than 65%.

Especially encouraged with our portfolio performance across IBD, where sky Ritchie and Redbook continued to capture significant share given their efficacy safety and dosing profiles.

In Crohn's disease, which is roughly two thirds of the overall IBD market. These two treatments together are capturing roughly one out of every two in play patients in the U S and total prescription share is now in the mid teens.

Internationally, our Crohns portfolio has achieved in play leadership and nearly a dozen key countries.

In ulcerative colitis Sky ROTC has already achieved the leading in play share in the U S. Following the launch in the second half of last year Scott.

Scott Reasoner invoke together are now capturing one out of every three in play UC patients a very strong leadership position for Abbvie.

We are also seeing strong momentum across indications in dermatology and rheumatology as well.

We continue to gain share in Psoriatic disease, where we have achieved the leading in play share of new and switching patients in nearly 30 countries and see substantial room for total share growth.

For <unk>, we are seeing increasing prescription demand globally across each of the room indications as well as additional momentum in atopic dermatitis.

Last just growing immunology market, where we have two compelling head to head studies versus do paying makes sense.

We are also preparing for the global launch of giant cell arteritis, another new source of growth for invoke we received European approval earlier this month and expect FDA approval. Soon. The addition of this indication further rounds out <unk> rheumatology label and gives patients with GTA access to a new competitor.

Selling oral therapeutic option.

Overall, <unk> rent volcker, demonstrating impressive results across all of their approved indications and we will be raising our full year sales guidance for both products.

Turning now to Humira, which delivered global sales of $1 $1 billion down 49, 5% on an operational basis below our expectations, primarily due to faster share erosion from biosimilar competition as well as further molecule compression in the U S. As a result, we will be lowering our full year sales guidance for you.

Humira.

Moving to oncology, where total revenues were $1 6 billion exceeding our expectations.

And <unk>, a global sales were $738 million down 11, 9%, reflecting competitive dynamics in CLO.

<unk> global revenues were $665 million up 12, 3% on an operational basis.

This strong performance reflects continued momentum in <unk> as well as share leadership in frontline AML among patients who are ineligible for intensive induction chemotherapy.

We also have an emerging commercial portfolio in solid tumors. This includes ela here are leading ADC for ovarian cancer with global sales of $179 million as well as to <unk> a potential new medicine for late line non small cell lung cancer patients with U S regulatory.

The approval and commercial utilization expected in the next couple of months.

<unk> will be supported by a dedicated sales force and medical affairs team, which will target academic and community cancer treatment centers to reinforce the importance of C met as a biomarker and build relationships that support our emerging solid tumor franchise.

Turning now to <unk>, which delivered global sales of $1 $1 billion down 10, 2% on an operational basis. This was in line with our expectations.

Botox cosmetic global revenues were $556 million down 10, 7% on an operational basis and.

<unk> sales were $231 million down 20% on an operational basis.

As we had seen over the last several quarters economic headwinds have continued to impact market conditions based on the trends, we are seeing including a decline in recent consumer sentiment. We are moderating our assumptions for category growth globally, and adjusting our full year sales guidance for aesthetics accordingly.

While near term aesthetics market conditions remained challenging the long term prospects for the category remain attractive given high consumer interest and low penetration rates for facial injectables.

I am, particularly excited about bond T. Our fast acting short duration toxin, which we recently submitted for U S. Regulatory review. This first in class toxin represents a distinctive innovation for the treatment of glabella lines and has the potential to be an important catalyst for new patient activation into the facial.

Aesthetics category, we anticipate commercialization next year.

Moving now to neuroscience, where total revenues were approximately $2 3 billion up 17% on an operational basis with all key products exceeding our expectations.

<unk> global sales were $765 million up 10, 3%, reflecting share capture in both bipolar one disorder and adjunctive major depression.

We continue to get very positive feedback on <unk> profile in terms of dosing flexibility low sedation and the ability to treat a full spectrum of symptoms.

We are very competitively positioned with our migraine portfolio, where all three of our therapies continue to deliver double digit operational growth.

Botox therapeutic global revenues were $866 million up 17% you.

<unk> global sales were $240 million up 18% in Q Liptak global revenues were $193 million up 48, 3%.

And in Parkinson's disease, Viola global sales were $63 million.

Reflecting continued strong uptake in Japan and Europe. We're also pleased with the early launch feedback in the U S where revenues are expected to ramp gradually over the next couple of quarters as we work to establish the appropriate Medicare coverage and benefit determination.

Lastly, we are making excellent progress with the development of <unk> in Parkinson's disease. This first in class <unk> selective dopamine agonist has a favorable benefit risk profile and the potential to differentiate in several areas such as sedation and impulse control.

To wrap it on could potentially be used as a monotherapy for early Parkinson's disease as well as an adjunctive therapy to levodopa for more advanced patients, which would be a complementary addition to our existing PD portfolio with viola and do open up.

We expect to submit <unk> for regulatory review later this year with commercialization expected in 2026.

Ruble: Overall, I'm extremely pleased with the execution and strong momentum across our commercial portfolio and with that I'll turn the call over to ruble for comments on our R&D highlights ruble.

Ruble: Thank you, Jeff I'll start with immunology we've.

Ruble: We received European approval for Rainbow and GTA and expect FDA approval soon.

Ruble: We remain on track for several important data readout this year as well, including.

Ruble: Phase III data for <unk> in alopecia, Areata, and vitiligo and data from Sky <unk> head to head study in psoriasis versus so take two.

Ruble: Our early and mid stage immunology pipeline continues to advance recent initiations include a phase II study evaluating <unk> in combination with <unk> in Psoriatic arthritis.

Ruble: And if phase one study for our next generation <unk> antibody, which is designed to have less frequent dosing compared to other <unk> in development and will be evaluated in combination with <unk> in both crohn's disease and ulcerative colitis.

Ruble: This summer we will start a phase II study evaluating a combination of <unk> and our anti CD 40, rather Gallo mab and rheumatoid arthritis.

Ruble: Moving to our Adcs in oncology.

Ruble: We anticipate accelerated approval in the second quarter for <unk> as a monotherapy and previously treated non squamous non small cell lung cancer with high C met expression.

Ruble: This is a segment of lung cancer with high unmet need and when approved <unk> will be the first C met directed ADC for these patients.

Ruble: We're also making good progress with T map, a our next generation <unk> ADC a phase two dose optimization study evaluating <unk> with a PD one inhibitor as a frontline combination therapy in Egfr wild type non small cell lung cancer was recently any.

Ruble: <unk>.

Ruble: In the Egfr mutant segment, we plan to initiate studies for <unk> as a monotherapy and the second line setting and in combination with <unk> in the first line setting preliminary phase one results will be presented at the upcoming <unk> meeting.

Ruble: This year phase II data from our CRC study evaluating <unk> in combination with Bevacizumab will be available.

Ruble: Which could enable a phase III study in an all comers population.

Ruble: Progress also continues with a BBB 706 in small cell lung cancer.

Ruble: Our call. This ADC utilizes the same total warhead and linker technology as <unk>, but with an antibody that targets <unk> six.

Ruble: In the Phase one study 706 was efficacious across doses with an objective response rate of approximately 60% in patients with relapsed or refractory small cell lung cancer.

Ruble: Based on maturing duration of response and progression free survival data, we plan to advance 706 into a trial in a relapsed refractory population and a dose optimization study in combination with a PD L. One in the frontline with the goal of establishing.

Ruble: A chemo sparing regimen as a new standard of care.

Ruble: In the area of hematologic oncology the data readout remains on track for the phase III than clicks to Mds trial, and if positive our regulatory submissions with followed later in the year.

Ruble: The regulatory submission for <unk> and BP DCM is also planned for this year.

Ruble: We continue to make good progress with our bcm, a CD three by specific a BBB 383 and multiple myeloma.

Ruble: Recruitment is going well and the phase three monotherapy study and later lines and we are on track to be fully enrolled by early next year. Additionally.

Ruble: Additionally, we continue to evaluate 383 and various combinations.

Ruble: Including with Homilist, Revlimid <unk> and <unk>.

Ruble: We will begin seeing data from these combinations next year, which could enable phase III studies in earlier lines of therapy.

Ruble: Now moving to neuroscience interim data from the long term tempo for phase III study as you continue to support <unk> favorable benefit risk profile.

Ruble: Efficacy in both early and advanced Parkinson's patients was maintained beyond the year and the safety profile was consistent with that observed in the previous phase III studies with no new safety concerns identified.

Ruble: Rates of adverse events of special interest remained low with impulse control disorder, and peripheral edema less than 1%.

Ruble: Dyskinesia, approximately 2% and sedation less than 5%.

Ruble: These results underscore <unk> potential to become an important new treatment option for patients with Parkinson's disease or.

Ruble: Our regulatory application is planned for later in the year.

Ruble: Moving to other areas of our pipeline.

Ruble: Fedex the regulatory application for a rapid onset short acting toxin bond T was recently submitted we also began the clinical program to evaluate co administration of <unk> and Botox.

Ruble: She has the potential to be co formulated as a novel product.

Ruble: Offering the combined benefits of rapid onset and botox like duration.

Ruble: In obesity, our partner <unk> recently announced positive interim results from the first part of a multiple ascending dose study for our long acting amylin analogue a BBB to 95. This initial phase of this study tested one and two milligrams.

Ruble: Dosed once weekly for six weeks and healthy lean and overweight patients.

Ruble: The study showed $2 95 performed well demonstrating a dose dependent mean weight loss compared to placebo and a tolerability profile consistent with the results from the single ascending dose study.

Ruble: Mean weight loss and the two milligram cohort, which had a mean BMI of 24 was seven 8% compared to a weight gain of 2% in the placebo arm on day 43.

Ruble: The second phase of this study is ongoing and is evaluating higher doses and overweight and obese patients with 12 week dosing.

Ruble: Titration and longer dosing intervals will also be assessed.

Ruble: Full data from this part of the study are expected next year.

Ruble: To summarize significant progress continues with our pipeline and we look forward to important data readouts regulatory submissions and approvals throughout 2025.

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

Scott Richardson: Thank you ruble star.

Scott Richardson: Starting with our first quarter results, we reported adjusted earnings per share of $2 46.

Scott Richardson: Which is 10 cents above our guidance midpoint.

Scott Richardson: These results include a 13th unfavorable impact from acquired IP R&D expense.

Scott Richardson: Total net revenues were more than $13 3 billion.

Scott Richardson: Reflecting robust growth of nine 8% on an operational basis, excluding a one 4% unfavorable impact from foreign exchange.

Scott Richardson: Adjusted gross margin was 84, 1% of sales.

Scott Richardson: Adjusted R&D expense was 15, 4% of sales and adjusted SG&A expense was 24, 6% of sales.

The adjusted operating margin ratio was 42, 3% of sales.

Scott Richardson: Which includes a one 9% unfavorable impact from acquired IP R&D expense.

Scott Richardson: Net interest expense was $627 million.

Scott Richardson: The adjusted tax rate was 14, 2%.

Scott Richardson: Turning to our financial outlook, we are raising our full year adjusted earnings per share guidance to between $12 and <unk>.

Scott Richardson: And $12 and 29.

Scott Richardson: Please note that this guidance does not include an estimate for acquired IP R&D expense that may be incurred beyond the first quarter.

Scott Richardson: We now expect total net revenues of approximately $59 7 billion, an increase of $700 million.

Scott Richardson: This reflects an estimated 0.6% unfavorable impact from foreign exchange on full year sales growth.

Scott Richardson: This updated revenue forecast includes the following approximate assumptions for several of our key products.

Scott Richardson: We now expect.

Scott Richardson: <unk> global revenues of $16 5 billion, an increase of $600 million, reflecting share gains in psoriasis and IBD.

Scott Richardson: <unk> global sales of $8 2 billion, an increase of $300 million, reflecting momentum across all approved indications.

Scott Richardson: U S. Humira revenues of $3 5 billion, a decrease of $500 million, reflecting higher erosion from biosimilar competition as well as further molecule compression.

Scott Richardson: Botox therapeutic global sales of $3 6 billion, an increase of $100 million, reflecting growth in chronic migraine and other indications.

Scott Richardson: Total oral <unk> revenues of $2 2 billion.

Scott Richardson: An increase of $100 million, reflecting strong prescription demand.

Scott Richardson: <unk> global revenues of $2 8 billion, an increase of $100 million, reflecting lower erosion.

Scott Richardson: Sprint flex the global sales of $2 7 billion, an increase of 100 million.

Scott Richardson: Reflecting continued uptake in both <unk> and AML across our key countries.

Scott Richardson: And first statics, we now expect global sales of $5 1 billion as we are moderating our assumptions for market growth globally.

Scott Richardson: As a result total sales guidance for Botox, and Jupiter will each be lower by roughly $100 million.

Scott Richardson: Moving to the P&L for 2025.

Scott Richardson: We continue to forecast full year adjusted gross margin of approximately 84% of sales and adjusted SG&A expense of approximately $13 $2 billion.

Scott Richardson: We now expect adjusted R&D expense of approximately $8 9 billion.

Scott Richardson: Reflecting additional investment and a robust pipeline for long term growth.

Scott Richardson: We also now anticipate and adjusted operating margin ratio of roughly 46, 5% of sales in line with our previous expectations after including the 0.4% unfavorable impact of acquired IP R&D expense incurred through the first quarter.

Scott Richardson: Turning to the second quarter, we anticipate net revenues of approximately $15 billion.

Scott Richardson: This reflects an estimated 0.3% unfavorable impact from foreign exchange on full year sales growth.

Scott Richardson: We are forecasting an adjusted operating margin ratio of roughly 49, 5%.

Scott Richardson: We expect adjusted earnings per share between $3 26.

Scott Richardson: $3 30.

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

Scott Richardson: Our guidance is based on current trade rules and does not reflect the impact of any additional trade policy shifts.

Scott Richardson: Including pharmaceutical sector tariffs.

Scott Richardson: While it's difficult to quantify in the absence of actual policy details it's worth noting.

Scott Richardson: The related unfavorable in 2025 would reflect a partial year given the timeline for $2 32 investigation.

Scott Richardson: We are actively preparing for a number of potential scenarios and would expect to put into place mitigation strategies as we have more information.

Scott Richardson: Relevant to these dynamics I would also highlight that Abbvie has a significant U S manufacturing presence that spans 11 sites with plans to add four new manufacturing plants to our network expanding our production for API.

Scott Richardson: Drug product peptides and devices in the United States.

Scott Richardson: As we continue to invest and grow our U S operational footprint.

Scott Richardson: We believe a more competitive tax policy building on what was accomplished through 2017 tax reform will encourage a sustainable shift towards U S manufacturing over the long term.

Scott Richardson: In closing I'm very pleased with the excellent start to the year, we are demonstrating strong momentum across the portfolio and continue to be well positioned to deliver robust growth in 2025 and beyond.

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

Scott Richardson: Thanks Scott.

Liz: I'll open the call for questions and the interest in hearing from as many.

Scott Richardson: The remainder of the call. We ask that you. Please limit your questions to one or two.

Speaker Change: Operator first question please.

Speaker Change: Our first question will go to the line of Chris Schott from Jpmorgan. Please go ahead.

Chris Schott: Great. Thanks for the question and congrats on the results just two for me, maybe first on Sky <unk> and <unk>, obviously, some big step up in the guidance here can you just elaborate a little bit more on which of the indications are most attributable to the upside we're seeing right now maybe just talk a little bit about the competitive landscape maybe particularly.

Speaker Change: <unk> more.

Chris Schott: More broadly launching in IBD, and how youre thinking about that dynamic.

Speaker Change: And then Mike just my second question was on second immunology on Humira can you just talk a bit more about how youre thinking about the tail for humira in light of some of the erosion that youre seeing this year. Thanks, so much.

Speaker Change: Chris This is Scott I'll start with kind of where we saw the increase attributed to for the various indications that I will turn to Jeff for your other questions. So we raise sky raising by $600 million to $16 5 billion.

Speaker Change: That split between $200 million in Psoriatic and $400 million in IBD indications.

Speaker Change: And then with respect to revoke we raise that $300 million and thats across all of the approved indication. So you can attribute that to 100 for rheumatology.

Speaker Change: Hundred for Derm and the remaining 100 for IBD.

Speaker Change: Yes, Thanks, Chris It's Jeff and maybe I'll give some sense, we're obviously very very pleased with that.

Speaker Change: The performance of <unk> in immunology as you've seen from their report.

Speaker Change: Maybe to give some perspective and it's not it's not uncommon to start to see in class competition, we've seen that in psoriasis, we've seen that across the board and maybe I'll just give a little bit of a perspective over sort of the historical dynamics that we've seen with the IL 23 category. So for example, if you go back to like 2008.

Speaker Change: 2019, when the IL 20, threes were starting to come in psoriasis. The total patient share at that time in the early days was about 7% of the IL 23 class now it's over 60, and if we look at where IBD is obviously, we launched first with Sky rosy in Crohn's and Everything's recently.

Speaker Change: Launching here and you see it's about 7% of the total patient share in IBD. So you can imagine as we start to watch what what this category is going to mean to transform IBD. We remain very confident it's not a zero sum game, we feel very confident in our in our profile and what we are.

Speaker Change: <unk> able to deliver if we look across you see if we look across our head to head data versus sequence versus the other trials and so net net we see very very strong momentum across the board regardless of competitors that may come in.

Speaker Change: And then my thoughts on the Humira tail again, as I highlighted and Scott highlighted in his remarks.

Speaker Change: We are seeing a bit of faster erosions as the biosimilar start to play out and this is of course, the third year of the Biosimilar event. So it's really not too surprising. We also do continue to see the molecule continue to erode. So as we look and we don't have full visibility and we'll be monitoring the 'twenty.

Speaker Change: Six access as we go throughout the year, we do expect it to step down again, just makes sense that will be the fourth full year.

Speaker Change: So we'll have deeper visibility of that tail sometime over the course of the year, but as we said before the real impact of the tail is when Humira does not have a meaningful headwind to our overall growth.

Speaker Change: As a corporation. So we expect that to start to develop over that 26 time period.

Speaker Change: Okay. Thank you Scott operator.

Speaker Change: Thank you operator next question please.

Speaker Change: Next we'll go to the line of Terence Flynn from Morgan Stanley. Please go ahead.

Terence Flynn: Great. Thanks, so much congrats on a quarter and maybe two questions for me as well.

Speaker Change: You alluded to.

Speaker Change: Some of the mitigation strategies, you're taking with respect to tariffs potentially could you just elaborate a little bit more there in terms of what that means for maybe inventory and then any contemplation on any changes to IP domicile ing.

Speaker Change: And the second question I had is on the.

Speaker Change: Youre Amylin program. There I know you talked a little bit about next steps, but was just wondering if you can elaborate in terms of how much higher you are going on doses. What you would expect that to translate to an efficacy and maybe the size of those those cohorts like how many more patients will we get this next update thank you.

Speaker Change: Thanks, Terence this is Rob so Scott and I will handle your first question. The ruble handle your second question. So just I think backup and maybe talk about.

Speaker Change: Abbvie is manufacturing network and then I can mentioned, how we're thinking about potential mitigation I think it is important to know that we have a broad footprint that allows us to ensure supply for our patients around the world and that's really why you've been able to see us avoid supply disruptions during events like the Covid pandemic and today, we have a robust U S manufacturing network.

Speaker Change: With more than 6000 American workers across 11 sites as I mentioned in my remarks that includes manufacturing of API biologics toxins and small molecules. For example, our largest product <unk> is made in the U S for the domestic market and given our expected volume growth in our expansion into areas like obesity as I mentioned.

Speaker Change: We will continue increasing our U S footprint with over $10 billion and planned capital invest during the next decade in terms of potential mitigation in the near term, we could take inventory management actions or secure alternate sources of API. We could also look at cost efficiencies and productivity initiatives as a source of mitigation, which we always do I think it was more.

Speaker Change: <unk> is trying to pass the tariff impacts to our customers, especially with penalties in the government channel and with existing contracts in the commercial setting. So I don't see that as a viable source for mitigation no longer term, we will add more U S manufacturing capacity, which is part of the planned capital investment of over $10 billion. So specific to 2025.

Speaker Change: We would look to mitigate the impact as much as possible with a combination of supply chain actions cost efficiencies and any additional over performance from our growth platform, but in the meantime, we have enough confidence in the momentum of our business to raise our guidance this year, which should be viewed as a positive.

David: Yes, David with respect to IP.

David: It has been looked at I think when people try to assess the impact of potential tariffs on our sector might be looked at as kind of a proxy proxy as to what that impact might be and certainly directionally I think that is something that would be somewhat telling.

David: That said when we look at our profile overall.

Speaker Change: Rob mentioned the strong U S presence that we have but we don't see our profile of suggesting any sort of outsize impact for us as a company.

Speaker Change: The tax rate is something that you can look at it which is essentially when you think of the book ends of the minimum tax for earnings outside the U S. Pretax earned in our income earned in the U S that really kind of aligns with where that IP is structured and that blending of your income is kind of producers generally directionally your tax rate.

Speaker Change: You'll see us being relatively in line with our peers and so that suggests that we have a similar IP profile from an overall perspective I would also just quickly point out that youll, sometimes with Allergan as that was a company that we are re domicile back to the U S. There was a foreign headquartered company we call that the Allergan was a series of several companies that were put together.

Speaker Change: There are over a few years and those companies all have significant U S presence as well so allergen profile that is not dissimilar from ours as a whole either.

Speaker Change: I think when you think about that IP profile as.

Speaker Change: It is important from a tariff perspective, it's also very important from a tax reform perspective, there was a lot of progress made in leveling the playing field for U S companies in 2017 tax reform that did a lot of good things and really helped invest in the U S as well as can create a competitive environment.

Environment for our companies, we see it as an important piece of building upon that tax reform to encourage further and long term as I mentioned in my remarks sustainable investment so I see a tax reform.

Speaker Change: Initiatives building on 2017, coupled with tariffs is something that will encourage U S manufacturing over the long term and we feel very good about our profile right now.

Rupal: Hi, it's Rupal and I'll answer the 295 question regarding the multiple ascending dose study currently.

Rupal: The data that you've seen where at one and two milligrams and we have the opportunity here in this study to go several fold higher than the two milligrams and we also have the opportunity to go beyond six weeks, namely around 12 weeks before we get into formal phase two b, which I would say.

Rupal: Around next year for which we would go quite a bit longer the.

Rupal: Sample size.

Rupal: What you've seen here, maybe a little bit larger because of the multiple ascending dose.

Rupal: Format here.

Rupal: We'll see larger sample sizes once we get into the formal phase II b. The other opportunities here are also to look at titration.

Rupal: The one milligram or maybe even lower we don't see any adverse events beyond suppression of appetite, so theres an opportunity to be able to start low and start titrating up to.

Rupal: Doses quite a bit higher than two milligrams, but we are open to watch this study and be flexible.

Rupal: Other.

Rupal: Important findings would be around.

Rupal: Muscle and bone so those would be other things that will be evaluated as well as looking at.

Rupal: Dosing the half life is around 270 hours, so that could give us an opportunity to go twice a month and even potentially monthly. So all of that will be captured in this dataset. We expect to see some data next year and then that will.

Rupal: Allow us to best design, a more formal phase <unk> study.

Terence Flynn: Thanks, Terence operator next question please.

Speaker Change: Next we will go to the line of Carter Gould from Cantor. Please go ahead.

Carter Gould: Hi, good morning, Thanks for taking the question, obviously theres been a lot of discussion around.

Carter Gould: Drug pricing kind of resurfacing and some rumblings around most favorite nation kind of Bubbling back to the surface.

Carter Gould: You get a sense of understanding of your expectations and flexibility if need be to take actions outside the U S. And then maybe more of a commercial question as we think about the potential co administration of <unk> and Botox can you kind of help frame. How you think that would impact the market is this something that could just grow the overall pie move share et cetera, any thoughts on that front.

Carter Gould: I appreciate it thank you.

Rob: Hey, Carter, it's Rob I'll take your first question and Jeff will take the second question I think I think as we have.

Speaker Change: Study the environment I mean, we are very supportive of a balanced approach that addresses affordability, while also encouraging innovation and you've seen many of our peers reinforcing the importance for the EU to properly value innovation, which we echo and will support any policies that encourage that outcome that said, we hope the administration contemplates the harm that.

Speaker Change: International reference pricing could have on U S healthcare the U S health care industry and future innovation, I think anything like price controls.

Speaker Change: <unk> increases were higher Capex is just leaves less investment available across the industry to advance new innovative medicines that said I'm very encouraged by the administration's willingness to address the pill penalty in the IRA and is fixing that would support long term innovation.

Speaker Change: In our industry.

Speaker Change: And so.

Speaker Change: We look at the push I think for the EU to more properly value. The innovation is an absolutely appropriate push we're encouraged by some of the policies that really support innovation.

Speaker Change: Scott also talked about tax reform and I think that's an important lever as well as we think about what are the things that will drive investment in the U S.

Speaker Change: And drive more innovation I think if you just look at Abbvie as an example.

That's over $5 billion of capital since tax reform in 2017, I mean that includes a new oncology research center in South San Francisco that includes <unk> manufacturing capabilities in the U S. I care, a capacity expansion in Waco, Texas and technology infrastructure upgrades across our footprint just to name a few in.

Scott Richardson: And importantly, as Scott mentioned tax reform allowed us to acquire Allergan, an Irish domicile company that we then re domiciled in the U S. I mean that transaction enabled abbvie to continue increasing our R&D investment through the Humira LOE, which is unprecedented.

Speaker Change: That will ultimately that will help us really lead to more innovation and.

Speaker Change: In our pipeline and ultimately impact patients in the future. So when we think about policy. We think tax reform has provided the right incentives to invest more in the U S and more innovation and Thats, what we would encourage.

Speaker Change: Yeah.

Speaker Change: Yes, and thank you for the question. So let me let me give a quick.

Speaker Change: A quick update on the bond and the combination approach in terms of how we're starting to think about it obviously, we're super pleased with the recent filing on bond T and as we've highlighted before the short acting toxin will operate on two different different levels for us first it will stimulate the funnel it will basically be a market stimulator, because we know there.

Speaker Change: There's lots of considers in the marketplace that are just worried about going to a full a full strength toxin because it lasts for three to four months. So the approach ability of a short acting toxin Thats works in about eight and a half hours and has gone in two and a half weeks makes the market much more approachable for the people in the.

Speaker Change: <unk> space. So we think it's going to work on the market and our share because obviously, we've done studies with botox after bond T. Now in the combination use Carter. It's very interesting. This is more of a pure sort of share play when we talked to the consumers. Many of the consumers are using a lot of botox and you start saying.

Speaker Change: Can you imagine a botox that works almost immediately so an immediate acting botox.

Speaker Change: That gives us the potential and we'll have to see how those trials in those studies play out to actually restate the whole market.

Speaker Change: Because what's remarkable about <unk> is that we can see a two grade change in the glabella lines in eight and a half hours. So nothing has ever worked even close to that fast. So we could even have a premium toxin that sits alongside botox, one day or a replacement product for just simply a better botox.

Speaker Change: Immediate acting botox. So it gives us a lot of flexibility and it's certainly very exciting as ruble has highlighted the program that will begin here for the combination.

Speaker Change: Thanks Carter operator next question please.

Speaker Change: Next we will go to the line of Courtney Green from Bernstein. Please go ahead.

Courtney Green: Thanks for taking my question today.

Courtney Green: I wanted to loop back to kind of part of the inventory and cash compensation.

Courtney Green: <unk> been able to get some explicit assets from some of the peer companies. So just wanted to see if you werent able to give us context as to whether you have.

Courtney Green: Inventory in the U S to support products like.

Courtney Green: Botox very long Humira for the rest of this year.

Courtney Green: And what about 26% 27, and then the second question is just on the back of the <unk>.

Courtney Green: Question, Ken can you give us a little bit.

Courtney Green: Context as to the pricing strategy for that kind of test the market because arguably kind of with that shortage are acting.

Courtney Green: Time horizon, you have kind of less value.

Courtney Green: I'd love to see and understand a little bit more about how youre thinking about placing these products together. Thank you.

Courtney Green: So this is Rob I'll take your first question and Jeff will take the second look absent policy details, we're not going to get into speculating on impact I think you've known us to be a company that.

Courtney Green: Once we have a full understanding we're very transparent and detailed if you think about how we approach the part D benefit redesign.

Courtney Green: Soon as we understood that impact we were well in advance of the implementation of that discussing the impact on the company, but with tariffs. We don't have the policy details for the sectorial tariffs.

Courtney Green: So it's premature to speculate on the impact and once we have that information.

Courtney Green: Communicate at the appropriate time.

Courtney Green: And regarding the pricing obviously, it's since we just had the filing it's premature we'd go through a very rigorous pricing analysis as we get closer to the launch and into some of the considerations that we would look for which is obviously as I mentioned the rotation of even more patients into the aesthetic brings a lot of value to.

Courtney Green: Those practices and if you think about it the lifetime value of those new patients is very meaningful so that could play into dynamics that ultimately how we price the bond T. Once we ultimately make that decision sometime next year. Obviously, it does work shorter so that might imply a different or lower.

Price point to start the trial, but those are all considerations commercially that we will go through as we go through our launch readiness process over the course of the year to really optimize the impact of that product as it as we bring it to bring it to the market.

Speaker Change: Thanks, Courtney operator next question please.

Speaker Change: Next we will go to the line of Mohit Bansal from Wells Fargo. Please go ahead.

Mohit Bansal: Okay. Thank you very much for taking my question Congrats on all the progress.

Speaker Change: I would like to understand a little bit more about your thought process at all in <unk>.

Speaker Change: There have been couple of strategy. So of course, we're always trying to combine it with <unk>.

Speaker Change: But then there's a strategy or thought process that could be could be a good agent as a standalone agent. So how are you thinking about this.

Speaker Change: Especially with the longer acting motion.

Speaker Change: Do you think there is a strategy to just.

Speaker Change: Use this as a single agent, especially among patients who cannot tolerate fund we'd love to get your thoughts right. Okay. Thank you.

Ruble: Hey, Mohan its ruble.

Speaker Change: Take that.

Speaker Change: Thanks for.

Speaker Change: Highlighting some of the potential here and I think we're thinking about it.

Speaker Change: Quite broadly.

Speaker Change: So as you stated.

Speaker Change: There is an opportunity here as a mono therapy I think the way we think about it is tolerability is key we see.

Speaker Change: A number of dropouts upwards of 30%, even after a month of starting with the current.

Speaker Change: Set of assets and then when we look over the course of the year, 60%, 70% of the patients will drop now there is a variety of factors that drive that discontinuation.

Speaker Change: But a key component is tolerability.

Speaker Change: So to have a monotherapy that's tolerable that provides meaningful weight loss and potentially has other potential benefits. We've seen pre clinically preservation of muscle we will have to see if that plays out but that could be another benefit in the long term.

Speaker Change: When this launches we do anticipate many of the patients will have already been on.

Speaker Change: Assets that are available today, so it could serve as a nice follow on for folks that couldnt tolerate or came off for other reasons and want to go somewhere else now in terms of combinations recall.

Speaker Change: When we did this deal one thing we liked about it was also the neutral ph of the formulation so that could enable.

Speaker Change: Combinations with a variety of mechanisms and as Rob stated we are interest continued to be interested in this space and will be.

Speaker Change: Thinking about other potential opportunities, which could include combinations that may drive.

Speaker Change: Further weight loss, but key for us would be tolerability and durable.

Speaker Change: Durability of use.

Mohit Bansal: Well, Thanks Mohit operator next question please.

Steve Scala: Next we'll go to the line of Steve Scala from TD Cowen. Please go ahead. Thank you. Thank you. So much two questions first of all Bristol appears to think there's a path forward with <unk> and adjuvant schizophrenia based on existing data where does have the stand in its analysis of the future of <unk> for instance has.

Steve Scala: Path forward become more clear in the last few months secondly.

Speaker Change: I believe Abbvie has more plants in Ireland than any other company curious how you think about that as well as your overall O U S footprint.

Steve Scala: Cut back <unk> to invest in the U S.

Steve Scala: Or do you maintain the presence of the U S. Given the fact that in four years, we could have a different administration with <unk>.

Steve Scala: Different views.

Speaker Change: And related to this topic yesterday Roche said that their U S plants are 50% utilized I'm wondering if abbvie would share a similar percentage. Thank you.

Rupal: Hey, it's rupal I'll start with.

Speaker Change: Schizophrenia questions.

Speaker Change: In terms of the recent data it's difficult for us to comment I think that'll be a discussion between the company and health authorities regarding the utility of a failed study.

Speaker Change: That's that would be their discussion to have.

Speaker Change: How we look at <unk> is that we do still see potential and we want to approach. This in a stepwise manner. The first step would be to.

Speaker Change: To look to see if we can further dose escalate beyond what was previously studied with <unk>.

Speaker Change: Variable PK levels and those patients from the pivotal studies somewhere low and we think theres an opportunity to raise that so a multiple ascending dose study will be initiated this year and that would apply to potentially monotherapy in schizophrenia as well as the adjunctive setting so is there.

Speaker Change: That data rolls out and if we're able to.

Speaker Change: Utilize a higher dose than we would again stepwise go forward into a.

Speaker Change: Phase two setting.

Speaker Change: To further further derisk and apply our learnings.

Speaker Change: In terms of trial design.

Speaker Change: And then if we see strong data, there, which could be as a monotherapy could be as an adjunct and also in neuro degeneration psychosis, then we would move.

Speaker Change: Move into the phase III setting, but I would say, we still believe there is opportunity here.

Speaker Change: And then Steve This is Rob I'll take your question on the manufacturing footprint as I mentioned in my remarks earlier, obviously abbvie, we have a very broad footprint.

Speaker Change: An important part of the strategy is to assure supply and as I mentioned earlier, we went through a global pandemic without any supply disruptions in that strategy certainly.

Speaker Change: <unk> paid off we also have I'd say, a very robust manufacturing network in the U S. I think what's been widely misunderstood or.

Speaker Change: Scott really as an example, our largest product.

Speaker Change: He has made in the U S and so.

Speaker Change: When we look at our global footprint, we consider assurance of supply as Scott mentioned earlier clearly obviously.

Speaker Change: <unk> has an influence on.

Longer term, how you'd want to structure your supply chain. So certainly I think with a more competitive tax policy that drove.

Speaker Change: The appropriate incentives.

Speaker Change: We tried to say it but we have obviously been ramping our volume.

Speaker Change: Considerably you look at just the performance within think about biologics capacity.

Speaker Change: And just the tremendous ramps we've seen for <unk> and so we stay ahead of the curve. We ensure that we're investing appropriately. So we can keep up with that demand I'd say the commercial team with a lot of pressure on operations because there is performing so well, but operational stays ahead of the curve and invest appropriately and so when we look at the investment and when I mentioned the greater than 10.

Speaker Change: Billion investment that takes into account in the U S that takes into account our volume growth that we expect in addition to new areas that we will invest for example peptide manufacturing as an example, as we enter that space, obviously now as we enter into obesity it makes sense to.

Speaker Change: Add that capability and so that will also be part of our supply chain strategy here. So that's the way we're thinking about it.

Steve Scala: Alright, Thanks, Steve Operator next question please.

Speaker Change: Next we will go to the line of Dave Risinger from Leerink Partners. Please go ahead.

Dave Risinger: Thanks very much.

Speaker Change: And congrats on the performance.

Dave Risinger: So I have two questions. Please.

Dave Risinger: They are both a bit high levels. So the first is the industry is facing three major U S government risks.

Dave Risinger: Actions that are harming biopharma innovation, including significant FDA disruption and questioning of proven medical science.

Dave Risinger: Tariff threats.

Speaker Change: And also the Trump administration's agenda to take prices down more than the Biden administration took down drug prices. So considering what appears to be a lack of appreciation in Washington are the benefits that the biopharmaceutical industry brings to Americans can you. Please comment on how your exec.

Speaker Change: <unk> team and board are engaging differently today, with Washington leadership to change the political agenda for the better.

Speaker Change: And then second the press release mentioned that guidance doesn't reflect any trade policy shifts, including pharmaceutical sector tariffs.

Speaker Change: Can you describe the potential trade policy shifts that you're considering or thinking of beyond tariffs. Thank you.

Speaker Change: David I'll take I'll take the first question ruble you can certainly add on as it relates to FDA and then Scott you can take that last the last question. So.

Speaker Change: We're obviously not a member of pharma today Abbvie, but we do continue to communicate with the association really to seek alignment on the most critical issues for the industry now Abbvie has a large government affairs organization that engages with lawmakers and the administration on our top policy priorities and that includes tax reform, we've talked about that quite a bit today.

Speaker Change: 340, <unk> and patient affordability in Medicare and we've actually seen some positive results from that engagement I mean, just this week Congress released a report on 340, <unk>, which included a recommendation that changed a lot to more clearly define a patient which should help address the abuse that is occurring with this program I would also view the $3 40.

Speaker Change: Policies in the latest executive order is a positive.

Speaker Change: I also previously mentioned that.

Speaker Change: Seeking to eliminate that.

Speaker Change: Pellet penalty.

Speaker Change: As a positive for innovation. So we will continue to work with lawmakers as we always have on policies that support a healthy U S. Biopharma industry continued innovation and patient affordability.

Speaker Change: Yeah, Hi, it's rupal regarding FDA interactions.

Speaker Change: Our teams have been in active discussions with the FDA on multiple programs across therapeutic areas, sometimes daily interactions and no signals of a slowdown we are monitoring the situation closely.

Speaker Change: However, thus far we haven't experienced any delays to our timelines.

Scott Richardson: And then Scott just with respect to your question on my initial comments.

Scott Richardson: It's just the trade policy shift we're talking about here is the pharmaceutical sector tariff with potential pharmaceutical sector tariffs, it's not any any additional things that we were contemplating certainly the environment has some uncertainty out there but specific to that comment we were speaking of the pharmaceutical sector tariffs.

Scott Richardson: Thanks, David Operator next question please.

Next we will go to the line of Emil Devan from Guggenheim Securities. Please go ahead.

Emil Devan: Alright, thanks for taking my questions and congrats on the quarter.

Scott Richardson: <unk>.

Scott Richardson: Hi.

Speaker Change: Sorry, if I missed some of that but one of the tariff discussion I was curious about the aesthetic side.

Speaker Change: Pharmaceutical products are excluded from the current Tasman I thought products like your breast implant that given our.

Speaker Change: Maybe included right now so I'm curious if that's the case or not and if it is and why wouldn't there be some how would you put that in your guidance or maybe you're just absorbing.

Speaker Change: In your guidance any impact there.

Speaker Change: Got it I appreciate it.

Speaker Change: Macro issues.

Noel canonic pressures, but I'm just curious if you can comment on the market share dynamics and is there any sort of share shifts you're seeing either toxins.

Speaker Change: That may be impacting things beyond the macro component.

Scott Richardson: Thanks Scott.

Speaker Change: You're right. It's a great question regarding the current tariff rules that are in place. So in general pharmaceutical products and our products are exempt from those.

Scott Richardson: Similar to our peers however.

Scott Richardson: There was a couple of exceptions to that and then specific to aesthetics. Yes. There are some application of the rules to aesthetics, but we've absorbed the esthetics impact on the guidance and I would tell you. It's modest it's something approximately $30 million so something is fairly modest.

Scott Richardson: In the current rules and that's something that we have absorbed so all of the guidance that I gave and reaffirmed today from the margin profiles than otherwise includes us absorbing that.

Scott Richardson: <unk>, it's Jeff So I'll go over year market share give you some flavor on that and I'll focus on our two big markets.

Scott Richardson: The U S and China. So as I mentioned, we were right on our guidance right on our forecast for the first quarter and remember the biggest the biggest impact there was the price because we reversed that Ali redesigned from last year and so when we looked at basically what happened from the third quarter to the first.

Scott Richardson: Fourth quarter to the first quarter, we know we took a market share hit in toxins in that fourth quarter. The good news is we've seen a complete re engagement in the basically the old Ali program with all of our accounts. So things are quite stable and we actually had a one market share point gain back from where we were now we still have to gain some more.

Scott Richardson: More share over the course of the year to come back to where we were pre.

Scott Richardson: Pre the change to alley, So we have lost year over year, some share and toxins in the U S and filler our share is very very stable, we did not see a significant share impact on the filler.

Scott Richardson: Side of the business, it's just been sort of a double digit market pressure there now.

Scott Richardson: Now in China, I'm quite pleased with the share performance. We've recently had a couple of significant approvals sequentially. We have the master approval for Botox, which is sort of a and the lower face and jaw line and also <unk>, which is in Jupiter them. So we've actually seen.

Scott Richardson: Significant positive momentum in botox share in China, as well as positive share in in filler. So it's a little variable across the board our big push will be to recover that share over the course of the year in the U S toxin space hope that helps.

Scott Richardson: Thanks <unk> operator.

Scott Richardson: Next question please.

Speaker Change: Next we'll go to the line of Alexandria Hammen from Wolfe Research. Please go ahead.

Alexandria Hammen: Thanks for taking the question and congrats on the quarter. So if everything rolled up have consistently surpassed expectations, but we've been getting some questions on what might drive long term growth and as it relates to these assets.

Alexandria Hammen: Could you comment on when we should start seeing results from your Sky R&D and remember those combination trials and as a follow up what combination are you. Most excited about from a mechanistic perspective. Thank you.

Rupal: Hi, it's Rupal I'll start.

Alexandria Hammen: On the <unk> question and the combinations so.

Alexandria Hammen: The the studies have have initiated and we would anticipate next year starting to see.

Alexandria Hammen: Early data Readouts.

Alexandria Hammen: I would say we are excited about several of these mechanisms we've.

Alexandria Hammen: Utilized quite a bit of data that we've already collected to see what could be.

Alexandria Hammen: The best combination.

And ultimately clinical data, we'll guide that path, but we use.

Alexandria Hammen: Biopsy data and head of the team has applied machine learning to these data sets spatial omics a variety of different techniques and the ones that we like are one the alpha four beta seven combination we think that could be a good good combination we like <unk>.

Alexandria Hammen: Mab, which is a bi specific to anti IL, one alpha and importantly, IL one beta we see that over expression in patients with IBD that have failed.

Alexandria Hammen: Other advanced therapies.

Alexandria Hammen: See something similar for trim, one which would be a.

Alexandria Hammen: Other potential combination and then we as I mentioned, we also have.

Alexandria Hammen: A longer acting and agent designed to be longer acting <unk> that could also be a very good fit.

Alexandria Hammen: With the IL 23, like Sky Rizzi. The other thing we'll be doing since I mentioned a variety of different combinations is also capturing a number of biomarkers to see if there's any potential for pre treatment segmentation in the future consistent with.

Alexandria Hammen: What we do in oncology, though thus far no real successes I would say, maybe theres hinson tailwind, but we're going to generate that data as well to see if there's opportunities to be able to use biomarkers in the future to segment. These patients.

Speaker Change: And maybe Alexander I might add.

Alexandria Hammen: When we look at Sky resumed revoked certainly we're very very pleased with the strong demand in the quarter.

Alexandria Hammen: Led to us taking a combined $900 million of increased guidance for the year. We've also given the long term guidance in 2027, which we feel continue to feel very confident in.

Alexandria Hammen: Also I think it's worthwhile to think about <unk>, we will have a second wave of indications towards the end of the decade that will add a couple of billion dollars of sales and we really see these two products even before the combination that Grupo spoke about that's had.

Alexandria Hammen: And a long runway of at least for at least the next eight years and we feel very good about that from that perspective.

Alexandria Hammen: And this is Rob I'll just to add onto that I think from from strategically when we look at the company and we have this clear runway to growth for at least the next eight years, we can use that time and obviously, we're looking to elevate the standard of care for immunology patients. We think these combination studies are way to accomplish that but we're going to use that time too.

Alexandria Hammen: And just as we did with <unk>.

Alexandria Hammen: With Humira, we came up with <unk> as a way to elevate the standard of care.

Alexandria Hammen: That was the second.

Alexandria Hammen: We really launched it into a second chapter of the company. This is the third chapter is going to be.

Alexandria Hammen: As we think about the growth beyond Sky Roseann Rune book, and we have the time and we're investing appropriately to identify what those drivers will be and.

Alexandria Hammen: Within immunology and outside of it I mean, we have five key growth areas that we're very confident can drive growth, but obviously, you've now seen us enter the obesity space as you think about more sources of growth and we think that's also an opportunity. So we think the company is very well positioned to grow very nicely for at least the next eight years and then use that time and the investment that's available to <unk>.

Alexandria Hammen: So beyond that.

Alexandria Hammen: Thanks, Alexandria, Operator next question please.

Speaker Change: Next we'll go to the line of James <unk> from Deutsche Bank. Please go ahead.

Alexandria Hammen: Hey, guys. Good morning, Thank you for the question.

Alexandria Hammen: Had a question on current immunology price volume dynamics, specifically is the low single digit headwind being realized.

Alexandria Hammen: So is it somehow being blended where humira is seeing outsized headwinds Wolfgang <unk> are seeing tailwind.

Alexandria Hammen: Or is there some sort of co pay.

Alexandria Hammen: Or is there a shift in co pay utilization.

Alexandria Hammen: Sequentially.

Alexandria Hammen: <unk>.

Speaker Change: James It's Scott So I think I'll start with Sky resumed revoke if you look at the first quarter. You know those were both driven by strong demand now.

Speaker Change: We've talked about pricing being slightly negative for those two products on a full year basis, we did see a little bit of favorable price in the quarter and that's just a gating issue. So in the quarter, probably two things. One just organization continues to do a very good job of focusing on co pay utilization in effectively managing that so so we saw.

Speaker Change: A little bit of benefit from co pay utilization and then in addition, we had anticipated some channel mix changes later in the year, but those actually came to fruition a little bit earlier than we thought and so those those factors I would say as long as some other gating issues combined to being price favorability, but we still anticipate.

Speaker Change: Negative pricing headwinds on a full year basis.

Speaker Change: With respect to Humira.

Speaker Change: We talked about that in the quarter on the full year that there was a decrease in volume associated with share erosion as well as the compression of the overall molecule. So that volume is going to continue I think youll see that volume a little bit more pronounced.

Speaker Change: Throughout the year, but there certainly continues to be some some price you've got some unwind.

Speaker Change: Accruals that caused price impacts, but you also have just the changing of the Rebating dynamics as we entered into a new contract here.

Speaker Change: Thanks, Tim Operator next question please.

Speaker Change: Next we will go to the line of Geoff Meacham from Citibank. Please go ahead.

Geoff Meacham: Hey, guys. Thanks for the question.

Geoff Meacham: <unk> had another one on policy wanted to get your perspective on <unk> reform, which is often mentioned as highly likely to happen. This year. What would you say are the main elements that you'd want to see.

Geoff Meacham: Reform and second one on BD is there a therapeutic area that you guys feel like you still have to add to I wasn't sure of neuro remains one of the top priority is just post <unk> and it does seem like.

Geoff Meacham: Multiple shots on goal and metabolic disease is kind of the approach a lot of other biopharma are taken but I wanted to get your perspective. Thank you.

Speaker Change: But Geoff I'll take those questions. So on <unk> reform I think we're supportive of anything that helps with patient affordability.

Geoff Meacham: And so to the extent that that improves the dynamic on patient affordability that that is truly realized.

Speaker Change: In their pockets.

Speaker Change: Favorable so we are supportive of the efforts there.

Speaker Change: But it's really all about making sure that we're addressing patient affordability.

Speaker Change: As it relates to business development, we obviously really like the five.

Speaker Change: Key growth areas that we have today as I mentioned those will certainly draw.

Speaker Change: <unk> very strong growth for at least the next eight years I think sometimes there's a misconception about neuroscience for Abbvie, it's more than just psychiatry, we have a very strong migraine franchise, that's performing exceptionally well and Parkinson's we're seeing great results and we've been in Parkinson's for a long time would do it with a duopoly.

Speaker Change: As we think about the ramp we're seeing at the buyer level. The innovation, we brought to those for those patients and then savate, but on which came from cerebral.

Speaker Change: We could really start to see our perkins's franchise emerge and so.

Speaker Change: When I think about neuroscience I would think about it really in four segments. Our psychiatry, it's an important segment.

Speaker Change: Migraine or Parkinson's and there is all of their nerve degeneration and we obviously are investing in Alzheimers and so you just look at the business development activity.

Speaker Change: At the beginning of last year and neuroscience.

Speaker Change: <unk> extended our discovery collaborations psychiatry with Gedeon Richter, who discovered railcar we added a novel mechanism for mood disorders forget with Gilgamesh, We acquired a next generation a beta antibody that's very promising for Alzheimers from IATA and we're also investing in novel approaches for migraine disease. So we are actively investing in neuroscience.

Speaker Change: Obviously added obesity, because we do think of ourselves as being a company that can be very large in the next decade. So it doesn't hurt to have another source of growth and we have evaluated various options beyond the five and we chose to move into obesity for a number of reasons. It's obviously an extremely attractive market has high prevalence and plenty of headroom.

Speaker Change: Growth, it's a market that has ample space for multiple players and new entrants and I think we're also uniquely positioned with our aesthetics business to access that channel in addition to therapeutics and.

Speaker Change: And importantly, and it's something we always focus on is where are their high areas of unmet need as we think about our portfolio. That's really what our strategy is to drive a remarkable impact for our patients by elevating standard of care. When we look at obesity. There is plenty of opportunity, whether it's reducing gi side effects improving body composition.

Speaker Change: More consistent weight loss across patient types longer lasting weight loss and so as we evaluate that opportunity. We found the amylin class to be very attractive given it's the most validated non <unk> mechanism for the city and has very encouraging early data and we believe Amazon opportunity with Cobra has the potential to deliver a differentiated asset.

Speaker Change: We will continue investing in obesity, we'll continue investing in our five key growth areas and we think that gives us.

Speaker Change: The right mix to drive growth for long term.

Speaker Change: Thanks, Geoff Operator next question please.

Speaker Change: Next we'll go to the line of Tim Anderson from Bank of America. Please go ahead.

Tim Anderson: Thank you.

Tim Anderson: I have a question on drug drug advertising. So abbvie is the number one vendor on this it's hard to turn on activity without paying something like our AD.

Tim Anderson: And.

Tim Anderson: You had a very positive ROI from that level of spending.

Tim Anderson: No there are some occasional pox IV administration about limiting such advertising for my question.

Tim Anderson: I think there was any basis in reality for that I know youll say it shouldn't happen, but that doesn't mean that it will eventually happen and then on obesity.

Tim Anderson: You noted amlin your Amazon is long acting doesn't that imply that really kind of the next part of the portfolio as a long acting glib.

Tim Anderson: Are you not interested in the clip one space at all.

Jeff: Yes, Thanks, Tim it's Jeff.

Speaker Change: Youre right its difficult its difficult to know if if DTC reform would take place or what what.

Jeff: It might look like I think youre right.

Jeff: We're very supportive of the first amendment rights to be able to advertise and obviously, we work with the FDA on every single claim that we make on television.

Jeff: If there were to be a change we would be able to pivot I mean, we could shift our investment to disease awareness.

Jeff: That could help us drive because we have such leading.

Jeff: In play share.

Jeff: To continue to basically invest in the right way to consumers, we certainly could move to other channels because it's not really clear if it would just be mass media or et cetera. So certainly the whole the whole market would take a step back if that were to happen and our brands would still be very very competitive in terms.

Jeff: Our ability to pivot and toggle were that to happen so difficult to predict but.

Jeff: But we would be of course planning for any of those contingencies worthy to take place.

Speaker Change: And Tim it's Rupal regarding <unk>.

Speaker Change: Different mechanisms. So as stated previously we think theres opportunity as a as a monotherapy and also has the potential combination I would say, we havent ruled out any particular mechanism that we would combine with.

Speaker Change: The other thing dimension I think I already stated this but we do have a neutral ph in the current formulation for 295, so that potentially makes it more amenable to combinations, but mechanisms that you mentioned and potentially others I would say.

Speaker Change: Around the table for us.

Tim Anderson: Thanks, Tim Operator next question please.

Trung Nguyen: Next we'll go to the line of Trung Nguyen from UBS. Please go ahead.

Tim Anderson: Great. Thanks.

Trung Nguyen: Two questions if I can.

Trung Nguyen: So first just very quickly you did touch on the pricing dynamics with Sky regime.

Trung Nguyen: Did the strong performance include any notable one time contributions inventory build or pull forward effects.

Trung Nguyen: Second similar to Vamose aesthetics question.

Trung Nguyen: China reciprocal tariffs have been enacted is that contemplated in your guide and is that material to your aesthetics business and then just I know it's early days, but are you seeing any shifts in demand that thank you.

Scott Richardson: It's Scott.

Scott Richardson: Answer your questions. Thanks, Thanks for the questions. So with respect to <unk> I would say the one item that I would point to again. This was strong demand overall, though the one thing that also help the growth in the quarter was with respect to the retailer destocking. So in the past we've talked about there is some retail.

Scott Richardson: Inventory buildup as a form of price speculation in the fourth quarter I talked about on our fourth quarter call that we didn't see a lot of that.

Scott Richardson: That was again confirm we did not see there was and there was no unwind like there has been in prior years. So there was a year over year benefit from the lack of destocking from retail buildup in the first quarter, but again that was fairly modest when we talk about our overall growth globally, 72% operationally.

Scott Richardson: The demand was really into <unk>.

Scott Richardson: And so what you just saw a small portion from that retail destocking.

Scott Richardson: With respect to the China tariff, yes, Youre right. There is some impact for aesthetics.

Scott Richardson: And those products in those numbers.

Scott Richardson: But again that impact is fairly modest we've contemplated that in our guidance and so I would say overall the existing tariffs youre talking about $30 million approximately globally and a b. Some component of that is with respect to the aesthetics business.

Speaker Change: And then maybe I don't know if Jeff would like to comment on I think you'd ask if there is if we've seen any demand changes in China.

Speaker Change: No we haven't over the last 30 days I mean, obviously things or things change quickly, but as I mentioned, if we look at the if we look at the quarter. We've been encouraged by the share growth we've seen in China based on the recent approvals for both the toxin.

Speaker Change: And the filler filler category.

Speaker Change: Thanks, John Operator, we have time for one final question.

Speaker Change: And for our final question will go to the line of Evan <unk> from BMO capital markets. Please go ahead.

Speaker Change: Hello. This is <unk> on for Ed and Thanks for taking my question and congrats on a great quarter.

Speaker Change: Viola vanilla here with two products that are outside of your ini.

Speaker Change: <unk> came in and sort of meaningfully ahead of analyst expectations can you maybe walk us through what's driving the strengths for each of those thank you.

Speaker Change: Yes, maybe I'll start on your question and.

Speaker Change: Thank you for that so certainly as I mentioned in the prepared remark and Rob as well vial of is emerging as a very very important product and we communicated.

Speaker Change: Certainly that it could continue to exceed expectations. So it's quite remarkable we continued to see strong uptake in Japan across Europe, and while we're only in the commercial market, which is about 30% of the market in the U S. Because we're still waiting on the full medical care reimbursement.

Speaker Change: The market feedback is exceptional I mean, this is a really amazing product too.

Speaker Change: Help patients sleep through the night controlling movement disorders, it's unlike duopoly it last for 24 hours, it's a more simple sub Q injection versus surgery that he might get so it's playing out exactly as we as we had hoped and so youre just seeing some strength of that in the quarter.

Speaker Change: It's also why we remarked that we're excited to bring to that bid on which is also.

Speaker Change: Showing some very nice data here and we're getting ready for the file to start to really build out a more meaningful Parkinson's category.

Speaker Change: And then early here, we continue to see nice uptake very unique product obviously, it's got a <unk>.

Speaker Change: 30% approval in overall survival, it's well tolerated non chemo so the U S business continues to perform very well and we are starting to see the international launches. We've pulled forward significant international launches from the time that we had.

Had done the deal with Immunogen, and we're going to start to see those international launches ramp here over the next several quarters. So that gives some sense over that brand as well.

Speaker Change: This is Rob I'm glad you asked the question about Ela here, because oncology doesn't get enough attention for the company.

Speaker Change: <unk> came to us through the Immunogen acquisition as a very successful acquisition.

Speaker Change: Basically combined their ADC capabilities with our ours and now youre starting to see the Abbvie internally discovered adc's emerge we've talked about solicit b, we're very sorry about <unk> 700, <unk> do you think about long term growth drivers for Abbvie oncology with that emerging pipeline in ruble and I both mentioned.

Speaker Change: <unk> three the bi specific <unk> for multiple myeloma.

Speaker Change: We have I think very exciting emerging oncology pipeline that could be an important growth driver for the company. So I appreciate the specific question about out here.

Speaker Change: Thanks for calling in that concludes today's conference call, if you'd like to listen to a replay of the coffee visit our website at investors about Etsy Dot com. Thanks again for joining us.

Speaker Change: Thank you all for joining the Abbvie first quarter 2025 earnings Conference call that concludes today's conference. Please disconnect at this time and we hope you have a wonderful rest of your day.