Excess property insurance policies purchasers really should assume higher deductibles and related tightening in conditions and situations this year, American Intercontinental Group Inc.’s leading govt stated Thursday.
Speaking on a conference get in touch with with analysts to discuss the insurer’s fourth-quarter 2022 final results, Chairman and CEO Peter Zaffino said: “In surplus and surplus lines residence I expect to see higher deductibles, far more wind deductibles, tighter terms and circumstances.”
Wanting back again on the fourth quarter, Mr. Zaffino claimed AIG observed an common 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} raise in its North America commercial traces organization, but normal charges rose 9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} excluding economic lines and employees payment.
Retail property charges rose 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, its E&S device Lexington noticed rates improve 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, and surplus casualty was up 9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, he reported.
International industrial costs elevated 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, pushed by Asia Pacific, exactly where charges climbed 9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, and Europe, the Center East and Africa, wherever fees rose 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
“While we expert downward tension on amount in particular strains early in the fourth quarter, we saw a reacceleration of cost raises towards the end of the quarter,” Mr. Zaffino reported. For instance, retail residence renewal premiums rose 24{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in December when the outcome of current catastrophe losses were being felt by the marketplace, he stated.
AIG has re-underwritten substantially of its guide around the previous five yrs, which put it into a posture to acquire extra reinsurance protection at reasonable price increases in the course of calendar year-conclusion renewals, in spite of considerable level hikes in the general reinsurance market, Mr. Zaffino stated.
AIG purchased much more house disaster reinsurance, securing $6 billion in boundaries, and improved the phrases, he explained. AIG’s overall reinsurance fees elevated considerably less than 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, he stated.
For the fourth quarter, AIG reported internet money of $264 million compared with $3.74 billion in the prior-year quarter, which bundled a $3 billion attain from the sale of a actual estate portfolio. Profit was also strike by a minimize in web understood gains of by-product pursuits, AIG’s earnings statement mentioned.
On an adjusted foundation, AIG’s pre-tax money fell 19.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $1.2 billion. The insurance company attributed the decline to a $489 million lessen in alternate expense profits, mainly from private fairness investments, which was partly offset by superior underwriting final results.
Its standard insurance plan enterprise saw web premium composed of $5.61 billion, down 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, mainly driven by a reduce in private traces high quality and the impact of foreign trade adjustments on intercontinental business enterprise.
Its North The us professional lines small business reported $2.27 billion in internet published quality, up 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} as opposed with the prior-year quarter.
AIG’s general coverage put together ratio was 89.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the quarter, enhancing from 92.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the prior-calendar year period of time. North The united states industrial lines described an 84.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} put together ratio, improving from 94.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the 2021 period.
For the entire calendar year, AIG reported web revenue of $10.25 billion, up 9.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} compared with 2021.
For the duration of the fourth quarter, AIG concluded the preliminary community featuring of its everyday living and retirement small business Corebridge Financial Inc. AIG expects to entire a secondary giving of Corebridge stock by the end of the initially quarter, Mr. Zaffino said.
The 2022 combined ratio for the home/casualty insurance coverage marketplace is forecast to worsen to 105.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from 99.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2021, according to a report Thursday from the Insurance Details Institute.
The decrease in underwriting benefits was driven by Hurricane Ian and “significant deterioration in the private vehicle line, making it the worst 12 months for the P&C industry since 2011,” the report mentioned.
Underwriting losses are predicted for the business multiperil line, for which the 2022 net mixed ratio is forecast to worsen to 107.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, 1.4 percentage points greater than 2021, according to Jason B. Kurtz, principal and consulting actuary at consulting and actuarial firm Milliman Inc. Quality development of 14.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} is forecast in 2022, pursuing 17.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} growth in 2021, he stated.
The 2022 combined ratio for commercial auto lines is forecast to be 104.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, just about 6 share points even worse than 2021, in accordance to Dave Moore, president of Moore Actuarial Consulting LLC. “We are forecasting underwriting losses for 2023 by way of 2024 because of to inflation, equally social inflation and economic inflation, decline strain and prior-12 months adverse decline growth,” he explained. “Premium development is envisioned to keep on being elevated because of to tough market place problems.”
In general home/casualty market underwriting high quality expansion is forecast to improve 8.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2022 and 8.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2023, largely thanks to challenging-industry disorders, in accordance to Dale Porfilio, main insurance policies officer of the institute.
Reduction pressures and a tricky market are expected to carry on due to inflation, source chain disruptions, and geopolitical danger, the institute explained in a statement.
“Rising desire charges will have a chilling impression on fundamental development across P&C traces, from residential to commercial home and automobile,” Michel Léonard, main economist and knowledge scientist for the institute, mentioned in the assertion. “2023 is gearing up to be still yet another 12 months of historical volatility. Stubbornly substantial inflation, the threat of a recession, and increases in unemployment top our list of financial pitfalls.”
Wanting at the workers compensation line, Mr. Kurtz pointed out that underwriting gains carry on, though margins are expected to shrink by means of 2024. “The workers payment line carries on to stand on your own, with its multiyear operate of strong underwriting profitability forecast to continue for 2022 and into 2023-2024.”
Skyward finance, an first DEX providing (IDO) system enabling good token distribution for jobs on the Around Protocol, has reportedly been exploited for 1.1 million Around Protocol (Close to) tokens, well worth an approximated $3 at time of publication.
The news was shared on Twitter by Aurora Lab’s neighborhood moderator Sanket Naikwadi, who stated that the exploit was first observed by a member of the Around Protocol neighborhood, who goes by the take care of Nearscout.
Thnx to @NearScout for noticing the treasury drain, he pinged me inquiring if anything is incorrect with skyward… then we appeared into contract txns and discovered out about the exploit and sus txns.
smol
— SankΞt Ⓝ⚡️| sanketn81.close to ,sanketn81.lens (@sanket_naikwadi) November 2, 2022
According to the series of tweets on the exploit, Ref finance — a group-led multi-goal decentralized finance (DeFi) platform created on the In close proximity to Protocol — and the Skyward group have been notified of the drain.
The exploiter reportedly initiated the drain by obtaining plenty of skyward tokens on Ref Finance, and “then redeemed it as a result of Treasury on Skyward Finance,” where they show up to have “got plenty of Around than what 1 SKYWARD was worth.”
Naikwadi cautioned SKYWARD Token holders to redeem or swap their tokens anywhere they can, and no longer interact with Skyward Finance, adding that the “hacker has already withdrawn Near to plenty of unique wallets.”
If you happen to be a SKYWARD Token holder redeem/swap anywhere you can and no longer interact with Skyward Finance. Hacker has already withdrawn In the vicinity of to plenty of unique wallets.
Enormous shoutout yet again to @NearScout. also, Shoutout to @pikespeak_ai , it assisted a good deal in identifying the txns
— SankΞt Ⓝ⚡️| sanketn81.in close proximity to ,sanketn81.lens (@sanket_naikwadi) November 2, 2022
Connected: Barely halfway and October previously the major month in crypto hacks: Finance Refined
Exploits within just the DeFi ecosystem surface to be on the rise. Blockchain analytics business Chainalysis not long ago labeled Oct 2022 as “the biggest thirty day period in the greatest 12 months at any time for hacking exercise.”
On Oct 12, Cointelegraph noted that $100 million worthy of of cryptocurrency was drained from Solana-based DeFi exchange Mango Marketplaces, resulting in its token plunging by 52{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. On the identical day of the Mango Markets’ exploit, TempleDAO was also exploited for $2 million.
Reports Third-Quarter Diluted EPS of $2.21 on a GAAP Basis, an Increase of 24.2 Percent; Adjusted Diluted EPS of $3.66, an Increase of 29.3 Percent; These Results Include an Unfavorable Impact of $0.02 Per Share related to Acquired IPR&D and Milestones Expense 1
Delivers Third-Quarter Net Revenues of $14.812 Billion, an Increase of 3.3 Percent on a Reported Basis and 5.4 Percent Operationally
Third-Quarter Global Net Revenues from the Immunology Portfolio Were $7.651 Billion, an Increase of 14.6 Percent on a Reported Basis, or 16.4 Percent on an Operational Basis; U.S. Humira Net Revenues Were $4.956 Billion, an Increase of 7.4 Percent; Internationally, Humira Net Revenues Were $603 Million, a Decrease of 25.9 Percent on a Reported Basis, or 16.8 Percent on an Operational Basis, Due to Biosimilar Competition; Global Skyrizi Net Revenues Were $1.397 Billion; Global Rinvoq Net Revenues Were $695 Million
Third-Quarter Global Net Revenues from the Hematologic Oncology Portfolio Were $1.650 Billion, a Decrease of 11.7 Percent on a Reported Basis, or 9.9 Percent on an Operational Basis; Global Imbruvica Net Revenues Were $1.135 Billion, a Decrease of 17.4 Percent, with U.S. Net Revenues of $849 Million and International Profit Sharing of $286 Million; Global Venclexta Net Revenues Were $515 Million
Third-Quarter Global Net Revenues from the Neuroscience Portfolio Were $1.672 Billion, an Increase of 6.7 Percent on a Reported Basis, or 8.3 Percent on an Operational Basis; Global Botox Therapeutic Net Revenues Were $699 Million; Vraylar Net Revenues Were $554 Million
Third-Quarter Global Net Revenues from the Aesthetics Portfolio Were $1.301 Billion, an Increase of 4.0 Percent on a Reported Basis, or 8.1 Percent on an Operational Basis; Global Botox Cosmetic Net Revenues Were $637 Million; Global Juvederm Net Revenues Were $352 Million
Confirms Midpoint of 2022 Adjusted Diluted EPS Guidance Range and Narrows Range from $13.76 – $13.96 to $13.84 – $13.88, which Includes an Unfavorable Impact of $0.25 Per Share Related to Acquired IPR&D and Milestones Expense Incurred Year-To-Date Through the Third Quarter 2022
Announces 2023 Dividend Increase of 5.0 Percent, Beginning with Dividend Payable in February 2023
NORTH CHICAGO, Ill., Oct. 28, 2022 /PRNewswire/ — AbbVie (NYSE:ABBV) announced financial results for the third quarter ended September 30, 2022.
“We continue to see strong momentum from our key immunology assets, Skyrizi and Rinvoq, and this performance – combined with strength from other growth drivers within our diverse portfolio – has mitigated the impact of temporary economic headwinds on our aesthetics products to deliver another quarter of strong results,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. “Based upon our performance and confidence in AbbVie’s long-term outlook, we are once again meaningfully raising our dividend.”
Note: “Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
1 Beginning in the first quarter 2022, AbbVie includes the impact of upfront and milestone payments related to collaborations, licensing agreements and other asset acquisitions in its reported non-GAAP financial measures.
Third-Quarter Results
Worldwide net revenues were $14.812 billion, an increase of 3.3 percent on a GAAP basis, or 5.4 percent on an operational basis.
Global net revenues from the immunology portfolio were $7.651 billion, an increase of 14.6 percent on a reported basis, or 16.4 percent on an operational basis.
Global Humira net revenues of $5.559 billion increased 2.5 percent on a reported basis, or 3.9 percent on an operational basis. U.S. Humira net revenues were $4.956 billion, an increase of 7.4 percent. Internationally, Humira net revenues were $603 million, a decrease of 25.9 percent on a reported basis, or 16.8 percent on an operational basis, due to biosimilar competition.
Global Skyrizi net revenues were $1.397 billion, an increase of 75.4 percent on a reported basis, or 78.3 percent on an operational basis.
Global Rinvoq net revenues were $695 million, an increase of 53.5 percent on a reported basis, or 59.3 percent on an operational basis.
Global net revenues from the hematologic oncology portfolio were $1.650 billion, a decrease of 11.7 percent on a reported basis, or 9.9 percent on an operational basis.
Global Imbruvica net revenues were $1.135 billion, a decrease of 17.4 percent, with U.S. net revenues of $849 million and international profit sharing of $286 million.
Global Venclexta net revenues were $515 million, an increase of 4.5 percent on a reported basis, or 11.3 percent on an operational basis.
Global net revenues from the neuroscience portfolio were $1.672 billion, an increase of 6.7 percent on a reported basis, or 8.3 percent on an operational basis.
Global Botox Therapeutic net revenues were $699 million, an increase of 8.2 percent on a reported basis, or 10.0 percent on an operational basis.
Vraylar net revenues were $554 million, an increase of 20.2 percent.
Global Ubrelvy net revenues were $160 million.
Global net revenues from the aesthetics portfolio were $1.301 billion, an increase of 4.0 percent on a reported basis, or 8.1 percent on an operational basis.
Global Botox Cosmetic net revenues were $637 million, an increase of 16.9 percent on a reported basis, or 21.6 percent on an operational basis.
Global Juvederm net revenues were $352 million, a decrease of 0.6 percent on a reported basis, or an increase of 5.3 percent on an operational basis.
On a GAAP basis, the gross margin ratio in the third quarter was 66.1 percent. The adjusted gross margin ratio was 85.4 percent.
On a GAAP basis, selling, general and administrative (SG&A) expense was 22.3 percent of net revenues. The adjusted SG&A expense was 20.9 percent of net revenues.
On a GAAP basis, research and development (R&D) expense was 10.9 percent of net revenues. The adjusted R&D expense was 10.8 percent of net revenues.
Acquired IPR&D and milestones expense was 0.3 percent of net revenues.
On a GAAP basis, the operating margin in the third quarter was 31.1 percent. The adjusted operating margin was 53.4 percent.
Net interest expense was $497 million.
On a GAAP basis, the tax rate in the quarter was 10.2 percent. The adjusted tax rate was 12.9 percent.
Diluted EPS in the third quarter was $2.21 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $3.66. These results include an unfavorable impact of $0.02 per share related to acquired IPR&D and milestones expense.
Note: “Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
Recent Events
AbbVie announced the U.S. Food and Drug Administration (FDA) approved Rinvoq (upadacitinib, 15 mg, once daily) for the treatment of adults with active non-radiographic axial spondyloarthritis (nr-axSpA) with objective signs of inflammation who have had an inadequate response or intolerance to tumor necrosis factor (TNF) blocker therapy. The approval is supported by data from the SELECT-AXIS 2 clinical trial, in which Rinvoq delivered rapid and meaningful disease control as well as significant improvement in signs and symptoms of nr-axSpA. This approval marks the sixth FDA approved indication for Rinvoq in chronic immune-mediated diseases.
AbbVie announced the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended the approval of Skyrizi (risankizumab) for the treatment of adults with moderately to severely active Crohn’s disease (CD) who have had inadequate response, lost response or were intolerant to conventional or biologic therapy. The positive opinion is based on results from three Phase 3 studies in which Skyrizi demonstrated significant improvements in clinical remission and endoscopic response, compared to placebo, as both induction and maintenance therapy. If the CHMP recommendation is accepted by the European Commission (EC), this would mark the third indication for Skyrizi in the European Union. Skyrizi is part of a collaboration between Boehringer Ingelheim and AbbVie, with AbbVie leading development and commercialization globally.
At the United European Gastroenterology (UEG) Week 2022, AbbVie shared 17 abstracts, including seven oral presentations, from a broad range of studies in inflammatory bowel disease (IBD). Highlights included final analyses from the U-ACHIEVE Phase 3 maintenance study of Rinvoq in moderately to severely active ulcerative colitis (UC), data from the U-EXCEL Phase 3 study evaluating the efficacy and safety of Rinvoq as induction therapy for use in adults with moderately to severely active CD as well as data evaluating Skyrizi for use in patients with moderate to severe CD.
At the American College of Gastroenterology (ACG) Annual Scientific Meeting, AbbVie presented 26 abstracts that illustrate AbbVie’s commitment to providing research and innovative solutions that support patients with high disease burden and unmet need. Key presentations focused on the treatment of moderate to severe CD, including late-breaking Phase 3 data from the Rinvoq 52 week maintenance trial, as well as efficacy and safety outcomes from the Skyrizi pivotal clinical program.
At the European Academy of Dermatology and Venereology (EADV) Congress, AbbVie presented 23 abstracts from across its dermatology portfolio that underscore AbbVie’s commitment to advancing research in dermatology for people living with immune-mediated skin diseases such as psoriasis (PsO), psoriatic arthritis (PsA), atopic dermatitis (AD) and vitiligo. Presentations included long-term efficacy and safety results, including real-world data, from studies of Skyrizi in moderate to severe PsO and active PsA as well as data from the largest-of-its-kind study that demonstrate the real-world burden of AD.
AbbVie announced that the FDA approved the use of Imbruvica (ibrutinib) for the treatment of pediatric patients one year and older with chronic graft versus host disease (cGVHD) after failure of one or more lines of systemic therapy. The approval marks the first approved treatment option for children with cGVHD under 12 years of age and the only Bruton’s tyrosine kinase inhibitor (BTKi) treatment for a pediatric patient population. Imbruvica is jointly developed and commercialized with Janssen Biotech, Inc.
At the International Parkinson and Movement Disorder Society’s (MDS) International Congress, AbbVie presented 13 abstracts across multiple disease states that highlighted AbbVie’s continued commitment to advancing the management of movement disorders. Highlights included results from the Phase 3 M15-736 trial evaluating the continuous subcutaneous infusion of ABBV-951 (foslevodopa/foscarbidopa) in people with advanced Parkinson’s disease (PD) as well as data on the real-world efficacy of Botox (onabotulinumtoxinA) for the treatment of spasticity and treatment of cervical dystonia.
At the Migraine Trust International Symposium (MTIS), AbbVie shared 13 abstracts, including 4 oral presentations, from a wide range of studies across its migraine portfolio that underscore AbbVie’s leadership and commitment to people living with migraine. Highlights included Phase 3 PROGRESS study results evaluating Qulipta (atogepant) for the preventive treatment of chronic migraine as well as data from studies evaluating Botox and Ubrelvy (ubrogepant) in the treatment of migraine.
Allergan Aesthetics announced that the FDA approved Juvederm Volux XC for the improvement of jawline definition in adults over the age of 21 with moderate to severe loss of jawline definition. Juvederm Volux XC is the first and only hyaluronic acid (HA) filler to receive FDA approval for jawline definition.
At the American Society for Dermatologic Surgery (ASDS), Allergan Aesthetics shared data from across its facial injectables, body contouring and skincare portfolio that highlighted Allergan Aesthetics’ continued commitment to advancing aesthetic medicine. Highlights included analyses of 15 years of post-marketing surveillance data that demonstrated the global reported rate of delayed-onset nodules associated with dermal fillers on the Vycross technology platform is low, as well as results from three clinical studies showcasing a customizable platform with patent-pending LTN Complex, to address the appearance of facial hyperpigmentation.
AbbVie announced the acquisition of DJS Antibodies (DJS), a biotechnology company dedicated to discovering and developing antibody medicines that target difficult-to-drug disease-causing proteins. The acquisition includes DJS’ lead program DJS-002, a potential first-in-class LPAR1 antagonist antibody in preclinical studies for the treatment of Idiopathic Pulmonary Fibrosis (IPF) and other fibrotic diseases as well as the company’s proprietary HEPTAD platform.
Full-Year 2022 Outlook
AbbVie is confirming the midpoint of its full-year 2022 adjusted diluted EPS guidance range and narrowing the range from $13.76 – $13.96 to $13.84 – $13.88, which includes an unfavorable impact of $0.25 per share related to acquired IPR&D and milestones expense incurred year-to-date through the third quarter 2022. The company’s 2022 adjusted diluted EPS guidance excludes any impact from acquired IPR&D and milestones that may be incurred beyond the third quarter of 2022, as both cannot be reliably forecasted.
Company Declares Dividend Increase of 5.0 Percent
AbbVie is announcing today that its board of directors declared an increase in the company’s quarterly cash dividend from $1.41 per share to $1.48 per share beginning with the dividend payable on February 15, 2023 to shareholders of record as of January 13, 2023. This reflects an increase of approximately 5.0 percent, continuing AbbVie’s strong commitment to returning cash to shareholders through a growing dividend. Since the company’s inception in 2013, AbbVie has increased its quarterly dividend by 270 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About AbbVie
AbbVie’s mission is to discover and deliver innovative medicines that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on people’s lives across several key therapeutic areas: immunology, oncology, neuroscience, eye care, virology and gastroenterology, in addition to products and services across our Allergan Aesthetics portfolio. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on Twitter, Facebook or LinkedIn.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our third-quarter performance. The call will be webcast through AbbVie’s Investor Relations website at investors.abbvie.com. An archived edition of the call will be available after 11:00 a.m. Central time.
Non-GAAP Financial Results
Financial results for 2022 and 2021 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. Beginning in the first quarter of 2022, the company includes the impact of upfront and milestone payments related to collaborations, licensing agreements, and other asset acquisitions in its reported non-GAAP financial measures. Prior periods have been revised to conform to the current period presentation. AbbVie’s management believes non-GAAP financial measures provide useful information to investors regarding AbbVie’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.
Forward-Looking Statements
Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project” and similar expressions, among others, generally identify forward-looking statements. 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 the forward-looking statements. Such risks and uncertainties include, but are not limited to, the failure to realize the expected benefits of AbbVie’s acquisition of Allergan or to promptly and effectively integrate Allergan’s business, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie’s operations is set forth in Item 1A, “Risk Factors,” of AbbVie’s 2021 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission, as updated by its Quarterly Reports on Form 10-Q and in other documents that AbbVie subsequently files with the Securities and Exchange Commission that update, supplement or supersede such information. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
AbbVie Inc. Key Product Revenues Quarter Ended September 30, 2022 (Unaudited)
{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} Change vs. 3Q21
“Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
b
Reflects profit sharing for Imbruvica international revenues.
n/a = not applicable
n/m = not meaningful
AbbVie Inc.
Key Product Revenues
Nine Months Ended September 30, 2022
(Unaudited)
{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} Change vs. 9M21
“Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
b
Reflects profit sharing for Imbruvica international revenues.
n/a = not applicable
n/m = not meaningful
AbbVie Inc.
Consolidated Statements of Earnings
(Unaudited)
(in millions, except per share data)
Third Quarter
Ended September 30
Nine Months
Ended September 30
2022
2021
2022
2021
Net revenues
$ 14,812
$ 14,342
$ 42,933
$ 41,311
Cost of products sold
5,022
4,390
13,244
13,126
Selling, general and administrative
3,304
3,083
11,843
9,089
Research and developmenta
1,614
1,661
4,720
5,095
Acquired IPR&D and milestonesa
40
402
454
719
Other operating expense, net
229
500
57
432
Total operating costs and expenses
10,209
10,036
30,318
28,461
Operating earnings
4,603
4,306
12,615
12,850
Interest expense, net
497
585
1,568
1,813
Net foreign exchange loss
36
12
108
35
Other expense (income), net
(330)
21
427
2,284
Earnings before income tax expense
4,400
3,688
10,512
8,718
Income tax expense
448
508
1,139
1,214
Net earnings
3,952
3,180
9,373
7,504
Net earnings attributable to noncontrolling interest
3
1
10
6
Net earnings attributable to AbbVie Inc.
$ 3,949
$ 3,179
$ 9,363
$ 7,498
Diluted earnings per share attributable to AbbVie Inc.
$ 2.21
$ 1.78
$ 5.24
$ 4.19
Adjusted diluted earnings per shareb
$ 3.66
$ 2.83
$ 10.18
$ 8.75
Weighted-average diluted shares outstanding
1,776
1,777
1,777
1,776
a
During the three months ended March 31, 2022, AbbVie changed its classification of development milestone expense associated with licensing and collaboration arrangements in the consolidated statement of earnings. Milestone payments incurred prior to regulatory approval, which were previously included in research and development expense, are now presented as acquired IPR&D and milestones expense. The reclassification decreased research and development expense and increased acquired IPR&D and milestones expense by $12 million for the three months and $162 million for the nine months ended September 30, 2021. The company believes this presentation assists users of the financial statements to better understand the total upfront and subsequent development milestone payments incurred to acquire in-process research and development projects. Prior periods have been revised to conform to the current period presentation. The reclassification had no impact on total operating costs and expenses, operating earnings, net earnings, net earnings attributable to AbbVie, Inc., earnings per share, or total equity.
b
Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details.
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Quarter Ended September 30, 2022
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 4,400
$ 3,949
$ 2.21
Adjusted for specified items:
Intangible asset amortization
2,024
1,673
0.94
Intangible asset impairment
770
604
0.34
Acquisition and integration costs
348
348
0.20
Change in fair value of contingent consideration
(214)
(218)
(0.12)
Litigation matters
110
94
0.05
Other
58
78
0.04
As adjusted (non-GAAP)
$ 7,496
$ 6,528
$ 3.66
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs include costs related to the Allergan acquisition. Other primarily includes restructuring charges associated with streamlining global operations.
Beginning in the first quarter of 2022, the company includes acquired IPR&D and milestones expense in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the three months ended September 30, 2022 included acquired IPR&D and milestones expense of $40 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.02 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Quarter Ended September 30, 2022
(in millions)
Cost of products sold
SG&A
R&D
Other operating expense, net
Other expense (income), net
As reported (GAAP)
$ 5,022
$ 3,304
$ 1,614
$ 229
$ (330)
Adjusted for specified items:
Intangible asset amortization
(2,024)
—
—
—
—
Intangible asset impairment
(770)
—
—
—
—
Acquisition and integration costs
(22)
(91)
(6)
(229)
—
Change in fair value of contingent consideration
—
—
—
—
214
Litigation matters
—
(110)
—
—
—
Other
(39)
(14)
(1)
—
(4)
As adjusted(non-GAAP)
$ 2,167
$ 3,089
$ 1,607
$ —
$ (120)
3. The adjusted tax rate for the third quarter of 2022 was 12.9 percent, as detailed below:
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Quarter Ended September 30, 2021
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 3,688
$ 3,179
$ 1.78
Adjusted for specified items:
Intangible asset amortization
1,904
1,585
0.88
Acquisition and integration costs
176
166
0.09
Change in fair value of contingent consideration
98
98
0.06
Other
48
29
0.02
As adjusted (non-GAAP)
$ 5,914
$ 5,057
$ 2.83
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect Allergan-related integration costs. Other primarily includes restructuring charges associated with streamlining global operations and COVID-19 related expenses.
Beginning in the first quarter of 2022, the company includes acquired IPR&D and milestones expense in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the three months ended September 30, 2021 included acquired IPR&D and milestones expense of $402 million on a pre-tax and $396 million on an after-tax basis, as well as other operating expense related to the Calico collaboration of $500 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.50 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Quarter Ended September 30, 2021
(in millions)
Cost of products sold
SG&A
R&D
Other expense (income), net
As reported (GAAP)
$ 4,390
$ 3,083
$ 1,661
$ 21
Adjusted for specified items:
Intangible asset amortization
(1,904)
—
—
—
Acquisition and integration costs
(49)
(105)
(22)
—
Change in fair value of contingent consideration
—
—
—
(98)
Other
(24)
(17)
(7)
—
As adjusted(non-GAAP)
$ 2,413
$ 2,961
$ 1,632
$ (77)
3. The adjusted tax rate for the third quarter of 2021 was 14.5 percent, as detailed below:
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Nine Months Ended September 30, 2022
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 10,512
$ 9,363
$ 5.24
Adjusted for specified items:
Intangible asset amortization
5,728
4,794
2.69
Intangible asset impairment
770
604
0.34
Acquisition and integration costs
595
567
0.32
Change in fair value of contingent consideration
647
657
0.37
Pylera divestiture
(172)
(126)
(0.07)
Litigation matters
2,497
2,021
1.13
Other
281
295
0.16
As adjusted (non-GAAP)
$ 20,858
$ 18,175
$ 10.18
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs include costs related to the Allergan acquisition. Litigation matters primarily include a charge related to a potential settlement of litigation involving Allergan’s past sales of opioid products. Other primarily includes restructuring charges associated with streamlining global operations.
Beginning in the first quarter of 2022, the company includes acquired IPR&D and milestones expense in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the nine months ended September 30, 2022 included acquired IPR&D and milestones expense of $454 million on a pre-tax and $439 million on an after-tax basis, representing an unfavorable impact of $0.25 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Nine Months Ended September 30, 2022
(in millions)
Cost of products sold
SG&A
R&D
Other operating expense, net
Other expense (income), net
As reported (GAAP)
$ 13,244
$ 11,843
$ 4,720
$ 57
$ 427
Adjusted for specified items:
Intangible asset amortization
(5,728)
—
—
—
—
Intangible asset impairment
(770)
—
—
—
—
Acquisition and integration costs
(84)
(263)
(19)
(229)
—
Change in fair value of contingent consideration
—
—
—
—
(647)
Pylera divestiture
—
—
—
172
—
Litigation matters
—
(2,497)
—
—
—
Other
(160)
(107)
(7)
—
(7)
As adjusted(non-GAAP)
$ 6,502
$ 8,976
$ 4,694
$ —
$ (227)
3. The adjusted tax rate for the first nine months of 2022 was 12.8 percent, as detailed below:
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
(Unaudited)
1. Specified items impacted results as follows:
Nine Months Ended September 30, 2021
(in millions, except per share data)
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 8,718
$ 7,498
$ 4.19
Adjusted for specified items:
Intangible asset amortization
5,912
4,929
2.77
Acquisition and integration costs
535
427
0.23
Change in fair value of contingent consideration
2,447
2,445
1.38
Litigation matters
107
86
0.05
Other
319
255
0.13
As adjusted (non-GAAP)
$ 18,038
$ 15,640
$ 8.75
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect integration costs as well as amortization of the acquisition date fair value step-up for inventory related to the Allergan acquisition. Other primarily includes the purchase of FDA priority review vouchers from third parties, restructuring charges associated with streamlining global operations and COVID-19 related expenses.
Beginning in the first quarter of 2022, the company includes acquired IPR&D and milestones expense in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the nine months ended September 30, 2021 included acquired IPR&D and milestones expense of $719 million on a pre-tax and $696 million on an after-tax basis, as well as other operating expense related to the Calico collaboration of $500 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.67 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
Nine Months Ended September 30, 2021
(in millions)
Cost of products sold
SG&A
R&D
Other operating expense, net
Other expense (income), net
As reported (GAAP)
$ 13,126
$ 9,089
$ 5,095
$ 432
$ 2,284
Adjusted for specified items:
Intangible asset amortization
(5,912)
—
—
—
—
Acquisition and integration costs
(172)
(275)
(88)
—
—
Change in fair value of contingent consideration
—
—
—
—
(2,447)
Litigation matters
—
(107)
—
—
—
Other
(65)
(50)
(287)
68
15
As adjusted(non-GAAP)
$ 6,977
$ 8,657
$ 4,720
$ 500
$ (148)
3. The adjusted tax rate for the first nine months of 2021 was 13.3 percent, as detailed below:
U.S. stocks sank on Wednesday after a series of disappointing quarterly results from some major retailers weighed on the broader markets. Investors also further digested remarks from Federal Reserve officials reaffirming their aims of reining in inflation.
[Click here to read what’s moving markets on Thursday, May 19]
The S&P 500 slid by 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in its worst day since June 2020, closing at 3,923.68. The Nasdaq Composite dropped 4.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to settle at 11,418.15, while the Dow fell by more than 1,100 points, or 3.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
The moves lower came as some weaker-than-expected earnings results from major retailers underscored the toll that inflation has been having on corporate profits. Target (TGT) on Wednesday cut its full-year operating income margin outlook as input and transportation costs remain elevated, and estimated it could see an additional $1 billion in transportation costs this year due to rising fuel prices. And this came after Walmart (WMT), the largest U.S. retailer, on Tuesday reported weaker-than-expected quarterly earnings and slashed its profit outlook for the year, citing higher wages, fuel and food costs. Shares of both companies sank, dragging peers including Costco (COST) and Dollar General (DG) lower in sympathy. The S&P Retail ETF (XRT) dropped more than 8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, and the S&P 500’s consumer staples and consumer discretionary sectors lagged.
“I think what investors realized was these seemingly safe haven stocks, the staples like Target, like Walmart, are not immune — that their costs are rising, they cannot pass their higher costs onto their consumers. And as Walmart said yesterday, their customers are coming in and buying groceries, but they’re not buying hard goods, they’re not buying other products where they have a slightly higher margin,” Jack Ablin, Cresset Capital chief investment officer, told Yahoo Finance Live Wednesday afternoon. “So if you look at the consumer and recognize yes wages are up, but they’re not going up at the same rate as inflation, and the highest cost increases are food and energy, that’s funneling away spending that ordinarily would be spent at a more profitable side of Walmart and a Target.”
The disappointing results outweighed optimism from earlier this week, when investors took in a number of upbeat reports on the U.S. economy. Tuesday’s at least short-lived rally came following a couple of solid reports that showed both consumer spending and manufacturing production were holding up strongly. U.S. retail sales grew at a 0.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rate in April after a sharply upwardly revised 1.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} monthly rise in March, suggesting consumers were continuing to spend even as consumer prices have climbed at the fastest rate since the 1980s. The latest print on U.S. industrial production also exceeded estimates with a jump of 1.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last month, or more than double the expected rise.
The still-strong economic backdrop has given the Federal Reserve more room to raise interest rates and otherwise tighten monetary policy to bring down inflation without fear of deeply disrupting growth in other areas like the labor market.
Fed Chair Powell acknowledged to the Wall Street Journal on Tuesday that while “there could be some pain involved in restoring price stability,” he believed the Fed will be able to “sustain a strong labor market.” Powell also said that there remained “broad support” for two more 50 basis point interest rate hikes at the Fed’s next policy-setting meetings, reiterating his view from the Fed’s last meeting earlier this month.
“I don’t think he said anything that caught us off guard … but let’s not forget where we are,” Ryan Detrick, LPL Financial Chief Market Strategist, told Yahoo Finance Live on Tuesday, noting that the S&P 500 has fallen for six consecutive weeks heading into this week. “It hasn’t been down seven weeks in a row for 20 years, so we’re awfully oversold here. Then you come in today and you’ve got industrial production pretty solid, you’ve got retail sales pretty solid. Things aren’t perfect, but we just think so much of the negativity that is priced in … it’s just a little overboard for us, and we think this could very well be an opportunity for some of the longer-term investors here.”
—
4:11 p.m. ET: Stocks plunge by most since June 2020: S&P 500 drops 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Dow sheds 1,165 points, or 3.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
Here were the main moves in markets as of 4:11 p.m. ET:
S&P 500 (^GSPC): -165.17 (-4.04{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 3,923.68
Dow (^DJI): -1,164.52 (-3.57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 31,490.07
Nasdaq (^IXIC): -566.37 (-4.73{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 11,418.15
Crude (CL=F): -$3.06 (-2.72{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $109.34 a barrel
Gold (GC=F): -$4.50 (-0.25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,814.40 per ounce
10-year Treasury (^TNX): -8.2 bps to yield 2.8860{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
12:31 p.m. ET: Walmart, Target results show inflation ‘is not going to abate anytime soon’: Analyst
Disappointing earnings results and outlooks from big box retailers Walmart and Target weighed on the broader retail sector on Wednesday, with both companies citing increased costs due to ongoing supply-side constraints. According to one analyst, the results show investors may have been too quick to call the peak in inflation.
“It has been a wild 48 hours in retail. I think one of the things that really stood out to us was just the common patterns. We’re seeing both companies signaling that their stores are seeing stronger traffic versus e-commerce. Both companies are seeing higher costs to execute their business,” Jefferies analyst Stephanie Wissink told Yahoo Finance on Wednesday. “Consumers are reshaping their behavior, so moving more toward essentials versus discretion.”
“I think the last thing is that this is not going to abate anytime soon,” she added. “I think there were a lot of conversations among investors that maybe inflation for the consumer has peaked, but these two companies are giving us very different signals that we’re still seeing costs rising faster than prices and more pricing is to come.”
Here were the main moves in markets as of 12:02 p.m. ET:
S&P 500 (^GSPC): -118.77 (-2.90{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 3,970.08
Dow (^DJI): -799.82 (-2.45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 31,854.77
Nasdaq (^IXIC): -404.77 (-3.38{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 11,579.75
Crude (CL=F): -$1.84 (-1.64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $110.56 a barrel
Gold (GC=F): +$3.20 (+0.18{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,822.10 per ounce
10-year Treasury (^TNX): -4.2 bps to yield 2.9260{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
10:39 a.m. ET: Housing starts come in at slower-than-expected clip in April amid rising rates
U.S. housing starts and building permits each pulled back in April, with rising interest rates and raw material shortages continuing to weigh on housing market activity.
Housing starts fell 0.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} month-on-month in April to come in at a seasonally adjusted annualized rate of 1.724 million, the Commerce Department said Wednesday. This came following a downwardly revised 2.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} drop in March. Single-family housing starts, a closely watched measure of underlying homebuilding, fell by 7.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to come in at a rate of 1.1 million.
Building permits, which point to future homebuilding activity, dropped by a larger-than-expected 3.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in April to come in at a seasonally adjusted annualized rate of 1.819 million. In March, permits had grown by 0.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, or at an annualized rate of 1.870 million.
“Starts and permits are likely to fall sharply over the next few months, tracking the downshift in new home sales, which in turn follows the ongoing rollover in mortgage applications,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note Wednesday morning. “Demand likely has not yet hit bottomed, allowing for the usual lag between increases in rates and the response from potential homebuyers, so we think sales and starts could easily fall through the end of the summer. Construction has run above the pace implied by the mortgage numbers for the past year-and-a-half, as homebuilders have exploited the extreme shortage of inventory in the existing home market, but this cannot last much longer.”
—
9:34 a.m. ET: Stocks open lower, giving back some of Tuesday’s gains
Here were the main moves in markets as of 9:34 a.m. ET:
S&P 500 (^GSPC): -47.92 (-1.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,040.93
Dow (^DJI): -313.94 (-0.96{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 32,340.65
Nasdaq (^IXIC): -167.82 (-1.40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 11,816.70
Crude (CL=F): +$1.42 (+1.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $113.82 a barrel
Gold (GC=F): -$8.10 (-0.45{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,810.80 per ounce
10-year Treasury (^TNX): +1.4 bps to yield 2.9820{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
7:42 a.m. ET: Stock futures drop
Here’s where markets were trading Wednesday morning:
S&P 500 futures (ES=F): -30.25 points (-0.74{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,054.50
Dow futures (YM=F): -187 points (-0.57{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 32,394.00
Nasdaq futures (NQ=F): -130.74 points (-1.04{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 12,429.50
Crude (CL=F): +$1.32 (+1.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $113.72 a barrel
Gold (GC=F): -$5.70 (-0.31{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,813.90 per ounce
10-year Treasury (^TNX): +2.7 bps to yield 2.997{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
—
7:38 a.m. ET: Lowe’s first-quarter revenue disappoints as cooler temperatures weighed on home improvement sales
Lowe’s (LOW), the country’s second-largest home improvement giant, posted top-line results that came in short of Wall Street’s expectations as cooler-than-average temperatures early this spring weighed on some demand. Shares fell 2.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in pre-market trading.
Comparable sales fell 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the first quarter, Lowe’s said, with the drop coming in steeper than the 3.25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} decrease expected, according to Bloomberg data. Closely watched U.S. comparable sales alone decreased by 3.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. However, on the bottom-line, earnings per share of $3.51 exceeded expectations.
“Our sales this quarter were in line with our expectations, excluding our outdoor seasonal categories that were impacted by unseasonably cold temperatures in April,” Lowe’s CEO Marvin Ellison said in a press statement. “Because 75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of our customer base is DIY, our Q1 sales were disproportionately impacted by the cooler spring temperatures. Now that spring has finally arrived, we are pleased with the improved sales trends we are seeing in May.”
Lowe’s reiterated its full-year forecast for earnings per share to come in between $13.10 and $13.60. Comparable sales will be in a range of down 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to up 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Lowe’s added.
—
7:32 a.m. ET: Mortgage applications fell by the most since February last week
U.S. mortgage applications slid by the most since mid-February last week as mortgage rates jumped to their highest level since 2009, deterring some refinancers and buyers from the market.
The Mortgage Bankers Association’s weekly index tracking mortgage loan application volume slid 11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} week-on-week during the period ended May 13, according to the firm’s latest report. Refinances dropped by 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from the previous week and cratered by 76{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} compared to the same week last year. Purchases, on a seasonally unadjusted basis, were down by 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from the prior week and by 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from the comparable week in 2021.
“For borrowers looking to refinance, the current level of rates continues to be a significant disincentive,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement. “Purchase applications fell 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last week, as prospective homebuyers have been put off by higher rates and worsening affordability conditions. Furthermore, general uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search.”
—
7:22 a.m. ET Wednesday: Target shares slide after company cuts full-year profit guidance on higher costs
Target posted first-quarter earnings and full-year profit guidance that disappointed Wall Street, with higher costs expecting to keep cut into the margins for the big-box retailer. Shares fell more than 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in pre-market trading.
Target’s adjusted earnings came out to $2.19 per share for the first quarter, coming in below estimates for $3.06 apiece, according to Bloomberg data. However, like peer retail giant Walmart, sales for the quarter still exceeded estimates, with comparable same-store sales up 3.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} versus the 1.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} rise expected.
For the full year, Target now expects its full-year operating income margin rate to be “in a range centered around 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a},” the company said in its earnings statement. That compares to a prior view of an at least 8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} operating income margin rate this year.
“Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time,” Target CEO Brian Cornell said in a press statement. “Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} or higher over time.”
—
6:10 p.m. ET Tuesday: Stock futures resume declines
Here’s where markets were trading Tuesday evening:
S&P 500 futures (ES=F): +9.5 points (+0.23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,094.25
Dow futures (YM=F): +67 points (+0.21{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 32,648.00
Nasdaq futures (NQ=F): +27 points (+0.21{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 12,587.25
NEW YORK, NEW YORK – MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)
Reports First-Quarter Diluted EPS of $2.51 on a GAAP Basis, an Increase of 26.1 Percent; Adjusted Diluted EPS of $3.16, an Increase of 9.3 Percent; These Results Include an Unfavorable Impact of $0.08 Per Share related to Acquired IPR&D and Milestones Expense 1
Delivers First-Quarter Net Revenues of $13.538 Billion, an Increase of 4.1 Percent on a Reported Basis and 5.4 Percent Operationally
First-Quarter Global Net Revenues from the Immunology Portfolio Were $6.141 Billion, an Increase of 6.9 Percent on a Reported Basis, or 8.1 Percent on an Operational Basis; U.S. Humira Net Revenues Were $3.993 Billion, an Increase of 2.2 Percent; Internationally, Humira Net Revenues Were $743 Million, a Decrease of 22.6 Percent on a Reported Basis, or 17.9 Percent on an Operational Basis, Due to Biosimilar Competition; Global Skyrizi Net Revenues Were $940 Million; Global Rinvoq Net Revenues Were $465 Million
First-Quarter Global Net Revenues from the Hematologic Oncology Portfolio Were $1.646 Billion, a Decrease of 1.6 Percent on a Reported Basis, or 0.6 Percent on an Operational Basis; Global Imbruvica Net Revenues Were $1.173 Billion, a Decrease of 7.4 Percent, with U.S. Net Revenues of $874 Million and International Profit Sharing of $299 Million; Global Venclexta Net Revenues Were $473 Million
First-Quarter Global Net Revenues from the Neuroscience Portfolio Were $1.488 Billion, an Increase of 19.2 Percent on a Reported Basis, or 20.4 Percent on an Operational Basis; Global Botox Therapeutic Net Revenues Were $614 Million; Vraylar Net Revenues Were $427 Million
First-Quarter Global Net Revenues from the Aesthetics Portfolio Were $1.374 Billion, an Increase of 20.5 Percent on a Reported Basis, or 22.5 Percent on an Operational Basis; Global Botox Cosmetic Net Revenues Were $641 Million; Global Juvederm Net Revenues Were $410 Million
Updates 2022 Adjusted Diluted EPS Guidance Range from $14.00 – $14.20 to $13.92 – $14.12, which Includes an Unfavorable Impact of $0.08 Per Share Related to Acquired IPR&D and Milestones Expense Incurred During the First Quarter 2022
NORTH CHICAGO, Ill., April 29, 2022 /PRNewswire/ — AbbVie (NYSE:ABBV) announced financial results for the first quarter ended March 31, 2022.
“This year is off to a strong start. Our first quarter results highlight the diversity of our portfolio and include compelling performance from key growth drivers Skyrizi, Rinvoq, Aesthetics and Neuroscience,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. “Our momentum combined with ramping contributions from new products and new indications will drive accelerating revenue and EPS growth through the rest of the year.”
Note: “Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
1 Beginning in the first quarter 2022, AbbVie includes the impact of upfront and milestone payments related to collaborations, licensing agreements and other asset acquisitions in its reported non-GAAP financial measures.
First-Quarter Results
Worldwide net revenues were $13.538 billion, an increase of 4.1 percent on a GAAP basis, or 5.4 percent on an operational basis.
Global net revenues from the immunology portfolio were $6.141 billion, an increase of 6.9 percent on a reported basis, or 8.1 percent on an operational basis.
Global Humira net revenues of $4.736 billion decreased 2.7 percent on a reported basis, or 1.8 percent on an operational basis. U.S. Humira net revenues were $3.993 billion, an increase of 2.2 percent. Internationally, Humira net revenues were $743 million, a decrease of 22.6 percent on a reported basis, or 17.9 percent on an operational basis, due to biosimilar competition.
Global Skyrizi net revenues were $940 million, an increase of 63.7 percent on a reported basis, or 65.6 percent on an operational basis.
Global Rinvoq net revenues were $465 million, an increase of 53.6 percent on a reported basis, or 57.3 percent on an operational basis.
Global net revenues from the hematologic oncology portfolio were $1.646 billion, a decrease of 1.6 percent on a reported basis, or 0.6 percent on an operational basis.
Global Imbruvica net revenues were $1.173 billion, a decrease of 7.4 percent, with U.S. net revenues of $874 million and international profit sharing of $299 million.
Global Venclexta net revenues were $473 million, an increase of 16.9 percent on a reported basis, or 21.1 percent on an operational basis.
Global net revenues from the neuroscience portfolio were $1.488 billion, an increase of 19.2 percent on a reported basis, or 20.4 percent on an operational basis.
Global Botox Therapeutic net revenues were $614 million, an increase of 15.4 percent on a reported basis, or 16.6 percent on an operational basis.
Vraylar net revenues were $427 million, an increase of 23.4 percent.
Global Ubrelvy net revenues were $138 million.
Global net revenues from the aesthetics portfolio were $1.374 billion, an increase of 20.5 percent on a reported basis, or 22.5 percent on an operational basis.
Global Botox Cosmetic net revenues were $641 million, an increase of 34.4 percent on a reported basis, or 36.6 percent on an operational basis.
Global Juvederm net revenues were $410 million, an increase of 27.5 percent on a reported basis, or 30.9 percent on an operational basis.
On a GAAP basis, the gross margin ratio in the first quarter was 70.1 percent. The adjusted gross margin ratio was 84.5 percent.
On a GAAP basis, selling, general and administrative expense was 23.1 percent of net revenues. The adjusted SG&A expense was 21.1 percent of net revenues.
On a GAAP basis, research and development expense was 11.1 percent of net revenues. The adjusted R&D expense was 10.9 percent of net revenues.
Acquired IPR&D and milestones expense was 1.1 percent of net revenues.
On a GAAP basis, the operating margin in the first quarter was 34.8 percent. The adjusted operating margin was 51.4 percent, which includes an unfavorable 110 basis point impact from acquired IPR&D and milestones expense.
Net interest expense was $539 million.
On a GAAP basis, the tax rate in the quarter was 8.8 percent. The adjusted tax rate was 12.1 percent.
Diluted EPS in the first quarter was $2.51 on a GAAP basis. Adjusted diluted EPS, excluding specified items, was $3.16. These results include an unfavorable impact of $0.08 per share related to acquired IPR&D and milestones expense.
Note: “Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
Recent Events
AbbVie announced that the U.S. Food and Drug Administration (FDA) approved Rinvoq (upadacitinib, 45 mg (induction dose) and 15 mg and 30 mg (maintenance dose)) for the treatment of adults with moderately to severely active ulcerative colitis (UC) who have had an inadequate response or intolerance to one or more tumor necrosis factor (TNF) blockers. The approval is supported by data from two Phase 3 induction studies and one maintenance study. In these studies, significantly more patients treated with Rinvoq achieved the primary and all secondary endpoints compared to placebo. The safety of Rinvoq, including the 45 mg dose as induction therapy, in these studies was generally consistent with the known safety profile of Rinvoq, with no new important safety risks observed. This approval marks the first indication for Rinvoq in gastroenterology and represents Rinvoq’s fourth FDA approved indication.
AbbVie announced positive top-line results from the Phase 3 induction study U-EXCEL, which showed Rinvoq (45 mg, once daily) achieved both primary endpoints of clinical remission and endoscopic response, compared to placebo at week 12, as well as most key secondary endpoints in patients with moderate to severe Crohn’s disease (CD). The safety results in this study were consistent with the known profile of Rinvoq, with no new safety risks observed. U-EXCEL is the second of two Phase 3 induction studies to evaluate the safety and efficacy of Rinvoq in adults with moderate to severe CD and full results will be presented at upcoming medical conferences and published in a peer-reviewed journal. Positive top-line results from the Phase 3 portion of the first induction study, U-EXCEED, were announced in December 2021 and the maintenance study for both clinical trials is ongoing.
AbbVie announced that the FDA extended the review period for Skyrizi (risankizumab) for the treatment of moderate to severe CD by three months to review additional data submitted by AbbVie, including information about the on-body injector. Currently approved indications for Skyrizi were not affected by this extension. Skyrizi is a collaboration between Boehringer Ingelheim and AbbVie, with AbbVie leading development and commercialization globally.
AbbVie announced that it resolved all U.S. Humira (adalimumab) litigation with Alvotech. Under the terms of the resolution, AbbVie will grant Alvotech a non-exclusive license to its Humira-related patents in the U.S., which will begin on July 1, 2023. AbbVie will make no payments of any form to Alvotech, and Alvotech will pay royalties to AbbVie for licensing its Humira patents and acknowledges the validity and enforceability of the licensed patents. The resolution included dismissal of the patent and trade secret litigation between AbbVie and Alvotech.
At the Congress of European Crohn’s and Colitis Organization (ECCO), AbbVie shared 26 abstracts, including 16 oral and digital oral presentations, that reinforced AbbVie’s commitment to research that helps advance standards of care for inflammatory bowel disease (IBD) patients. Highlights included new post-hoc analyses from the pivotal Phase 3 Skyrizi program in CD as well as results from a post-hoc analysis of Phase 3 Rinvoq pivotal trials evaluating UC symptoms.
At the American Academy of Dermatology (AAD) Annual Meeting, AbbVie and Allergan Aesthetics presented new research that demonstrated their shared commitment to advancing science across a spectrum of dermatologic conditions and aesthetic indications. The research included new data on the efficacy, durability and safety of Rinvoq and Skyrizi as well as data from across the Allergan Aesthetics portfolio.
AbbVie and Genmab announced topline results from the first cohort of the EPCORE NHL-1 phase 1/2 clinical trial evaluating epcoritamab (DuoBody-CD3xCD20) in patients with relapsed/refractory large B-cell lymphoma (LBCL) who received at least two prior lines of systemic therapy. Results from this cohort demonstrated a confirmed overall response rate (ORR) of 63.1 percent with a 12-month median duration of response. Based on the topline results, the companies will engage global regulatory authorities and data from the clinical trial will be presented at a future medical meeting. Epcoritamab is being co-developed by AbbVie and Genmab.
At the American Association of Cancer Research (AACR) Annual Meeting, AbbVie presented positive results from a Phase 2 trial evaluating navitoclax in combination with ruxolitinib in patients with myelofibrosis that previously had a suboptimal response or disease progression with ruxolitinib monotherapy. The study evaluated 34 patients and median overall survival was not reached for patients who had a ≥ 1 grade improvement in bone marrow fibrosis (BMF) or ≥ 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} variant allele frequency (VAF) reduction. Additionally, at the time of analysis with > 2 year follow up, the survival estimate was 100{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in patients who had improvements in BMF or VAF.
AbbVie announced that it submitted a supplemental New Drug Application (sNDA) to the FDA for Vraylar (cariprazine) for the adjunctive treatment of major depressive disorder (MDD). The submission is based on clinical trial results that showed clinically and statistically significant improvement in the Montgomery-Asberg Depression Rating Scale (MADRS) total score in patients with MDD treated with Vraylar and an antidepressant. If approved, this milestone will be the fourth indication for Vraylar joining approvals for the treatment of adults with schizophrenia, the acute treatment of manic or mixed episodes associated with bipolar I disorder and the treatment of depressive episodes associated with bipolar I disorder. Vraylar is being co-developed by AbbVie and Gedeon Richter Plc.
AbbVie announced that the Phase 3 PROGRESS trial evaluating Qulipta (atogepant), an oral calcitonin gene-related peptide (CGRP) receptor antagonist (gepant) for the preventive treatment of chronic migraine in adults, met its primary endpoint of statistically significant reduction from baseline in mean monthly migraine days compared to placebo, for both the 60 mg once daily (QD) and 30 mg twice daily (BID) doses, across the 12-week treatment period. The study also demonstrated statistically significant improvement in all secondary endpoints and the overall safety profile of Qulipta was consistent with safety findings observed in previous studies with an episodic migraine population. Data from this study will support a submission to expand the use of Qulipta to include preventive treatment of chronic migraine in the U.S. and additional submissions globally.
At the American Academy of Neurology (AAN) Annual Meeting, AbbVie shared 30 abstracts demonstrating the breadth of its neuroscience portfolio. The abstracts highlighted AbbVie’s continued migraine treatment research across the spectrum of the disease, AbbVie’s commitment to patients with advanced Parkinson’s disease and new studies in spasticity and cervical dystonia.
AbbVie and Gedeon Richter Plc. (Richter) announced a new co-development and license agreement to research, develop and commercialize novel dopamine receptor modulators for the potential treatment of neuropsychiatric diseases. The collaboration is based on the results of preclinical research carried out by Richter and includes several new chemical entities selected for development. AbbVie and Richter have collaborated for 15 years on Central Nervous System (CNS) projects, including globally launched products such as Vraylar.
AbbVie announced the successful completion of its acquisition of Syndesi Therapeutics SA. The acquisition gives AbbVie access to Syndesi’s portfolio of novel modulators of the synaptic vesicle protein 2A (SV2A), including its lead molecule SDI-118, which is currently being evaluated for the potential treatment of cognitive impairment and other symptoms associated with a range of neuropsychiatric and neurodegenerative disorders, such as Alzheimer’s disease and MDD.
Allergan Aesthetics announced that the FDA approved Juvederm Volbella XC for improvement of infraorbital (undereye) hollows in adults over the age of 21. With this approval, Juvederm Volbella XC became the first and only dermal filler to receive FDA approval for the improvement of infraorbital hollows.
At the Aesthetic and Anti-aging Medicine World Congress (AMWC), Allergan Aesthetics presented research that demonstrated its commitment to the future of aesthetics with a forward-facing trends report. The meeting also marked Allergan Aesthetics’ entry into the emerging category of Hybrid Injectables with the launch of HArmonyCa with lidocaine across Europe. The dual-effect Hybrid Injectable contains two active ingredients, hyaluronic acid, a well-known ingredient found in facial fillers, and calcium hydroxyapatite (CaHA), which is known to help stimulate collagen production.
AbbVie announced positive results from the Phase 3 VIRGO trial evaluating the safety and efficacy of investigational twice-daily administration of Vuity (pilocarpine HCl ophthalmic solution) 1.25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in adults with age-related blurry near vision (presbyopia). Additional details of this trial will be presented at future medical congresses and will serve as the basis for a sNDA submission for an optional twice-daily administration to the FDA in the second quarter of 2022. Approved by the FDA in October 2021 for once-daily use, Vuity is the first and only eye drop to treat age-related blurry near vision in adults.
At the American Glaucoma Society (AGS) Annual Meeting and the American Society of Cataract and Refractive Surgery (ASCRS) Annual Meeting, AbbVie presented data from its leading portfolio of eye care treatments. Highlights included updated analyses that help further scientific understanding of Durysta (bimatoprost intracameral implant), a first-of-its-kind biodegradable implant to lower eye pressure for glaucoma patients; new data on the Xen Gel Stent, a surgical implant designed to lower high eye pressure approved for refractory glaucoma patients; and new data on Vuity 1.25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
AbbVie and Scripps Research, an independent, non-profit biomedical research and drug discovery institute, announced a global collaboration to develop potential novel, direct-acting antiviral treatments for COVID-19.
Full-Year 2022 Outlook
AbbVie is updating its adjusted diluted EPS guidance range for the full-year 2022 from $14.00 – $14.20 to $13.92 – $14.12 which includes an unfavorable impact of $0.08 per share related to acquired IPR&D and milestones expense incurred during the first quarter 2022. The company’s 2022 adjusted diluted EPS guidance excludes any impact from acquired IPR&D and milestones that may be incurred beyond the first quarter of 2022, as both cannot be reliably forecasted.
About AbbVie
AbbVie’s mission is to discover and deliver innovative medicines that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on people’s lives across several key therapeutic areas: immunology, oncology, neuroscience, eye care, virology and gastroenterology, in addition to products and services across our Allergan Aesthetics portfolio. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on Twitter, Facebook, LinkedIn or Instagram.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our first-quarter performance. The call will be webcast through AbbVie’s Investor Relations website at investors.abbvie.com. An archived edition of the call will be available after 11:00 a.m. Central time.
Non-GAAP Financial Results
Financial results for 2022 and 2021 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain non-cash items and for factors that are unusual or unpredictable, and exclude those costs, expenses, and other specified items presented in the reconciliation tables later in this release. Beginning in the first quarter of 2022, the company includes the impact of upfront and milestone payments related to collaborations, licensing agreements, and other asset acquisitions in its reported non-GAAP financial measures. Prior periods have been revised to conform to the current period presentation. AbbVie’s management believes non-GAAP financial measures provide useful information to investors regarding AbbVie’s results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.
Forward-Looking Statements
Some statements in this news release are, or may be considered, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project” and similar expressions, among others, generally identify forward-looking statements. 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 the forward-looking statements. Such risks and uncertainties include, but are not limited to, the failure to realize the expected benefits of AbbVie’s acquisition of Allergan or to promptly and effectively integrate Allergan’s business, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie’s operations is set forth in Item 1A, “Risk Factors,” of AbbVie’s 2021 Annual Report on Form 10-K, which has been filed with the Securities and Exchange Commission, as updated by its Quarterly Reports on Form 10-Q and in other documents that AbbVie subsequently files with the Securities and Exchange Commission that update, supplement or supersede such information. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
AbbVie Inc.
Key Product Revenues
Quarter Ended March 31, 2022
(Unaudited)
{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} Change vs. 1Q21
“Operational” comparisons are presented at constant currency rates that reflect comparative local currency net revenues at the prior year’s foreign exchange rates.
b
Reflects profit sharing for Imbruvica international revenues.
n/a = not applicable
n/m = not meaningful
AbbVie Inc.
Consolidated Statements of Earnings
Quarter Ended March 31, 2022 and 2021
(Unaudited) (In millions, except per share data)
First Quarter
Ended March 31
2022
2021
Net revenues
$ 13,538
$ 13,010
Cost of products sold
4,052
4,213
Selling, general and administrative
3,127
2,842
Research and developmenta
1,497
1,667
Acquired IPR&D and milestonesa
145
185
Total operating costs and expenses
8,821
8,907
Operating earnings
4,717
4,103
Interest expense, net
539
622
Net foreign exchange loss
25
9
Other income, net
(776)
(395)
Earnings before income tax expense
4,929
3,867
Income tax expense
436
312
Net earnings
4,493
3,555
Net earnings attributable to noncontrolling interest
3
2
Net earnings attributable to AbbVie Inc.
$ 4,490
$ 3,553
Diluted earnings per share attributable to AbbVie Inc.
$ 2.51
$ 1.99
Adjusted diluted earnings per shareb
$ 3.16
$ 2.89
Weighted-average diluted shares outstanding
1,778
1,775
a
During the three months ended March 31, 2022, AbbVie changed its classification of development milestone expense associated with licensing and collaboration arrangements in the consolidated statement of earnings. Milestone payments incurred prior to regulatory approval, which were previously included in research and development expense, are now presented as acquired IPR&D and milestones expense. The reclassification decreased research and development expense and increased acquired IPR&D and milestones expense by $115 million for the three months ended March 31, 2021. The company believes this presentation assists users of the financial statements to better understand the total upfront and subsequent development milestone payments incurred to acquire in-process research and development projects. Prior periods have been revised to conform to the current period presentation. The reclassification had no impact on total operating costs and expenses, operating earnings, net earnings, net earnings attributable to AbbVie, Inc., earnings per share, or total equity.
b
Refer to the Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for further details.
AbbVie Inc.
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended March 31, 2022
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
1Q22
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 4,929
$ 4,490
$ 2.51
Adjusted for specified items:
Intangible asset amortization
1,855
1,565
0.88
Acquisition and integration costs
138
121
0.07
Change in fair value of contingent consideration
(748)
(746)
(0.42)
Litigation matters
184
148
0.08
Other
64
63
0.04
As adjusted (non-GAAP)
$ 6,422
$ 5,641
$ 3.16
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect integration costs related to the Allergan acquisition. Other primarily includes restructuring charges associated with streamlining global operations.
Beginning in the first quarter of 2022, the company includes the impact of upfront and milestone payments related to collaborations, licensing agreements, and other asset acquisitions in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the first quarter of 2022 included acquired IPR&D and milestones expense of $145 million on a pre-tax and after-tax basis, representing an unfavorable impact of $0.08 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
1Q22
Cost of products sold
SG&A
R&D
Other income, net
As reported (GAAP)
$ 4,052
$ 3,127
$ 1,497
$ (776)
Adjusted for specified items:
Intangible asset amortization
(1,855)
—
—
—
Acquisition and integration costs
(34)
(93)
(11)
—
Change in fair value of contingent consideration
—
—
—
748
Litigation matters
—
(184)
—
—
Other
(60)
2
(6)
—
As adjusted(non-GAAP)
$ 2,103
$ 2,852
$ 1,480
$ (28)
3. The adjusted tax rate for the first quarter of 2022 was 12.1 percent, as detailed below:
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information
Quarter Ended March 31, 2021
(Unaudited) (In millions, except per share data)
1. Specified items impacted results as follows:
1Q21
Earnings
Diluted
Pre-tax
After-taxa
EPS
As reported (GAAP)
$ 3,867
$ 3,553
$ 1.99
Adjusted for specified items:
Intangible asset amortization
2,009
1,682
0.94
Acquisition and integration costs
224
155
0.09
Change in fair value of contingent consideration
(343)
(343)
(0.19)
Other
141
112
0.06
As adjusted (non-GAAP)
$ 5,898
$ 5,159
$ 2.89
a Represents net earnings attributable to AbbVie Inc.
Acquisition and integration costs reflect integration costs as well as amortization of the acquisition date fair value step-up for inventory related to the Allergan acquisition. Other primarily includes the purchase of an FDA priority review voucher from a third party, restructuring charges associated with streamlining global operations and COVID-19 related expenses.
Beginning in the first quarter of 2022, the company includes upfront and milestone payments related to collaborations, licensing agreements, and other asset acquisitions in its reported non-GAAP financial measures. Reported GAAP earnings and adjusted non-GAAP earnings for the first quarter of 2021 included acquired IPR&D and milestones expense of $185 million on a pre-tax and $168 million on an after-tax basis, representing an unfavorable impact of $0.09 to both diluted EPS and adjusted diluted EPS.
2. The impact of the specified items by line item was as follows:
1Q21
Cost of products sold
SG&A
R&D
Other income, net
As reported (GAAP)
$ 4,213
$ 2,842
$ 1,667
$ (395)
Adjusted for specified items:
Intangible asset amortization
(2,009)
—
—
—
Acquisition and integration costs
(99)
(76)
(49)
—
Change in fair value of contingent consideration
—
—
—
343
Other
(20)
(23)
(113)
15
As adjusted(non-GAAP)
$ 2,085
$ 2,743
$ 1,505
$ (37)
3. The adjusted tax rate for the first quarter of 2021 was 12.5 percent, as detailed below:
