Financial Release
"
Fourth-Quarter Results
- Worldwide adjusted sales were
$5.371 billion in the fourth quarter, up 5.1 percent. On an operational basis, adjusted sales increased 8.9 percent, excluding a 3.8 percent unfavorable impact from foreign exchange rate fluctuations. Worldwide sales under U.S. generally accepted accounting principles (GAAP) were$5.452 billion , up 6.7 percent on a reported basis and up 10.4 percent operationally. - Fourth-quarter sales growth was driven primarily by the continued strength of HUMIRA. Global HUMIRA sales increased 10.6 percent, or 14.4 percent on an operational basis, excluding the impact of foreign exchange rate fluctuations. Total company sales growth was also driven by operational growth from Synagis, Creon and Duodopa.
- The adjusted gross margin ratio in the fourth quarter was 81.2 percent, excluding intangible asset amortization and other specified items, up 410 basis points versus fourth-quarter 2013. The gross margin ratio under GAAP was 79.5 percent.
- Adjusted selling, general and administrative (SG&A) expense was 29.1 percent of sales in the fourth quarter, reflecting the recent HCV launch and continued investment in our growth brands. On a GAAP basis, SG&A was 61.3 percent of sales, including specified items primarily related to the terminated
Shire Plc (Shire) transaction. - Adjusted research and development (R&D) was 16.3 percent of sales in the quarter, reflecting funding actions in support of our mid- and late-stage pipeline and the continued pursuit of additional HUMIRA indications. On a GAAP basis, R&D was 16.1 percent of sales.
- Net interest expense was
$63 million on an adjusted basis and$129 million on a GAAP basis. The adjusted tax rate was 22.5 percent in the quarter and 21.9 percent on a GAAP basis. - Fourth-quarter diluted earnings (loss) per share were
($0.51) on a GAAP basis. Adjusted diluted earnings per share of$0.89 excludes intangible asset amortization expense and other specified items primarily related to the terminated Shire transaction. The impact of the Shire termination was comprised of the break fee($0.66) , mark-to-market and exit of certain foreign currency positions($0.24) and other costs($0.10) . An additional($0.08) of Shire specified charges will be booked in the first quarter of 2015 to reflect the completed liquidation of remaining foreign currency positions. 2015 GAAP guidance has been adjusted accordingly.
Key Events from the Fourth Quarter
- On
Dec. 19 , theU.S. Food and Drug Administration (FDA ) approvedAbbVie's VIEKIRA PAK, an all-oral, interferon-free treatment, with or without ribavirin (RBV), for the treatment of patients with chronic genotype 1 (GT1) hepatitis C virus (HCV) infection, including those with compensated cirrhosis. The approval of VIEKIRA PAK is supported by a robust clinical development program designed to study the safety and efficacy of the regimen in more than 2,300 enrolled patients across 25 countries. The program consisted of six pivotal Phase 3 studies, which demonstrated that VIEKIRA PAK cured 95-100 percent of GT1a and GT1b hepatitis C patients, including patients new and experienced to treatment, and patients with compensated cirrhosis, with less than 2 percent of patients experiencing virological failure. Additionally, more than 98 percent of patients in clinical trials completed a full course of therapy. - On
Jan. 16 ,AbbVie announced that theEuropean Commission has granted marketing authorizations for its all-oral, short-course, interferon-free treatment of VIEKIRAX (ombitasvir/paritaprevir/ritonavir tablets) + EXVIERA (dasabuvir tablets). The treatment has been approved with or without RBV for patients with GT1 chronic HCV infection, including those with compensated liver cirrhosis, HIV-1 co-infection, patients on opioid substitution therapy and liver transplant recipients. Additionally, VIEKIRAX has been approved for use with RBV in genotype 4 chronic HCV patients. - On
Jan. 12 ,AbbVie announced that theFDA approved DUOPA (carbidopa and levodopa) enteral suspension for the treatment of motor fluctuations for people with advanced Parkinson's disease. DUOPA is administered using a small, portable infusion pump that delivers carbidopa and levodopa directly into the small intestine for 16 continuous hours via a procedurally-placed tube. In a clinical trial, patients treated with DUOPA experienced significantly greater improvement in "off" time (periods of poor mobility, slowness and stiffness) than patients treated with oral carbidopa-levodopa immediate release tablets. AbbVie andNeurocrine Biosciences announced positive top-line results from the first of two ongoing Phase 3 clinical trials, designed to evaluate the efficacy and safety of elagolix in premenopausal women with endometriosis. Results from the trial show that after six months of treatment, both doses of elagolix (150 mg once daily and 200 mg twice daily) met the study's co-primary endpoints (p<0.001) of reducing scores of non-menstrual pelvic pain (NMPP) and menstrual pain (or dysmenorrhea), associated with endometriosis, at month three, as well as month six, as measured by the Daily Assessment of Endometriosis Pain scale. Elagolix, currently being investigated in patients with pain from endometriosis, inhibits gonadatropin releasing hormone (GnRH) receptors in the pituitary gland and ultimately reduces circulating sex hormone levels. To date, elagolix has been studied in over 40 clinical trials totaling more than 3,000 patients. A Phase 2b trial of elagolix for the treatment of uterine fibroids is also ongoing.- At the
American Society of Hematology's 56th Annual Meeting,AbbVie presented new results from a Phase 2 study of investigational compound venetoclax (ABT-199/GDC-0199) in patients with acute myelogenous leukemia (AML). AML is an aggressive and deadly type of blood cancer, in which the body produces too many of a specific type of white blood cell (myeloblast), which can crowd out healthy blood cells. In the study, the venetoclax group showed an overall response rate of 15.5 percent, with one patient achieving a complete response and four patients achieving a complete response with incomplete blood count recovery. These data indicate that further study of venetoclax in AML patients is warranted. Venetoclax will be studied in combination with other medicines sometimes used in treating patients with AML. Venetoclax is an investigational inhibitor of the B-cell lymphoma-2 (BCL-2) protein and is currently being evaluated in a Phase 3 clinical trial for the treatment of CLL and several other cancers.
Confirming Full-Year 2015 Outlook
About
Conference Call
Non-GAAP Financial Results
Financial results for 2013 and 2014 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. AbbVie's management believes non-GAAP financial measures provide useful information to investors regarding
Forward-Looking Statements
Some statements in this news release may be 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 Inc. |
||||||||
Key Product Sales |
||||||||
Quarter Ended Dec. 31, 2014 |
||||||||
(Unaudited) |
||||||||
% Change vs. 4Q13 |
||||||||
Sales (in millions) |
International |
Total |
||||||
Total Adjusted Sales |
U.S. |
Int'l. |
Total |
U.S. |
Operational |
Reported |
Operational |
Reported |
$3,083 |
$2,288 |
$5,371 |
9.4% |
8.2% |
(0.2%) |
8.9% |
5.1% |
|
Humira |
1,932 |
1,431 |
3,363 |
15.8 |
12.7 |
4.3 |
14.4 |
10.6 |
Synagis |
-- |
298 |
298 |
n/a |
4.9 |
(5.0) |
4.9 |
(5.0) |
AndroGel |
230 |
-- |
230 |
(20.2) |
n/a |
n/a |
(20.2) |
(20.2) |
Lupron |
160 |
47 |
207 |
2.5 |
(4.6) |
(11.4) |
0.6 |
(1.1) |
Kaletra |
50 |
153 |
203 |
(20.5) |
2.3 |
(7.5) |
(4.0) |
(11.1) |
Synthroid |
186 |
-- |
186 |
(1.6) |
n/a |
n/a |
(1.6) |
(1.6) |
Creon |
151 |
-- |
151 |
30.6 |
n/a |
n/a |
30.6 |
30.6 |
Sevoflurane |
22 |
98 |
120 |
(4.6) |
(18.7) |
(25.8) |
(16.7) |
(22.7) |
Dyslipidemia |
104 |
-- |
104 |
13.6 |
n/a |
n/a |
13.6 |
13.6 |
Duodopa |
-- |
56 |
56 |
n/a |
25.4 |
14.7 |
25.4 |
14.7 |
Viekira |
48 |
-- |
48 |
n/m |
n/a |
n/a |
n/m |
n/m |
Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. Dyslipidemia includes sales of TriCor/Trilipix, Niaspan, Simcor and Advicor. |
|
n/a = not applicable |
|
n/m = not meaningful |
AbbVie Inc. |
||||||||
Key Product Sales |
||||||||
Twelve Months Ended Dec. 31, 2014 |
||||||||
(Unaudited) |
||||||||
% Change vs. 12M13 |
||||||||
Sales (in millions) |
International |
Total |
||||||
Total Adjusted Sales |
U.S. |
Int'l. |
Total |
U.S. |
Operational |
Reported |
Operational |
Reported |
$10,764 |
$9,115 |
$19,879 |
5.7% |
8.9% |
5.9% |
7.1% |
5.8% |
|
Humira |
6,524 |
6,019 |
12,543 |
24.6 |
13.3 |
11.0 |
18.9 |
17.7 |
AndroGel |
934 |
-- |
934 |
(9.7) |
n/a |
n/a |
(9.7) |
(9.7) |
Kaletra |
213 |
657 |
870 |
(12.7) |
(4.5) |
(8.5) |
(6.6) |
(9.6) |
Synagis |
-- |
835 |
835 |
n/a |
9.3 |
1.0 |
9.3 |
1.0 |
Lupron |
580 |
198 |
778 |
2.5 |
(5.4) |
(9.5) |
0.2 |
(0.9) |
Synthroid |
709 |
-- |
709 |
13.9 |
n/a |
n/a |
13.9 |
13.9 |
Sevoflurane |
83 |
467 |
550 |
7.1 |
(1.0) |
(4.7) |
0.1 |
(3.1) |
Creon |
516 |
-- |
516 |
25.3 |
n/a |
n/a |
25.3 |
25.3 |
Dyslipidemia |
328 |
-- |
328 |
(69.5) |
n/a |
n/a |
(69.5) |
(69.5) |
Duodopa |
-- |
220 |
220 |
n/a |
24.7 |
23.5 |
24.7 |
23.5 |
Viekira |
48 |
-- |
48 |
n/m |
n/a |
n/a |
n/m |
n/m |
Note: "Operational" growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations. Dyslipidemia includes sales of TriCor/Trilipix, Niaspan, Simcor and Advicor. |
|
n/a = not applicable |
|
n/m = not meaningful |
AbbVie Inc. |
||||||||
Consolidated Statements of Earnings (Loss) |
||||||||
Quarter and Twelve Months Ended Dec. 31, 2014 and 2013 |
||||||||
(Unaudited) (In millions, except per share data) |
||||||||
Fourth Quarter |
Twelve Months |
|||||||
2014 |
2013 |
2014 |
2013 |
|||||
Net sales |
$5,452 |
$5,111 |
$19,960 |
$18,790 |
||||
Cost of products sold |
1,119 |
1,282 |
4,426 |
4,581 |
||||
Selling, general and administrative |
3,341 |
1,448 |
7,724 |
5,352 |
||||
Research and development |
879 |
798 |
3,297 |
2,855 |
||||
Acquired in-process research and development |
28 |
48 |
352 |
338 |
||||
Other operating expense |
500 |
-- |
750 |
-- |
||||
Total operating cost and expenses |
5,867 |
3,576 |
16,549 |
13,126 |
||||
Operating earnings (loss) |
(415) |
1,535 |
3,411 |
5,664 |
||||
Interest expense, net |
129 |
68 |
391 |
278 |
||||
Net foreign exchange loss |
496 |
15 |
678 |
55 |
||||
Other (income) expense, net |
(3) |
13 |
(27) |
(1) |
||||
Earnings (loss) before income tax expense |
(1,037) |
1,439 |
2,369 |
5,332 |
||||
Income tax (benefit) expense |
(227) |
311 |
595 |
1,204 |
||||
Net earnings (loss) |
($810) |
$1,128 |
$1,774 |
$4,128 |
||||
Diluted earnings (loss) per share |
($0.51) |
$0.70 |
$1.10 |
$2.56 |
||||
Diluted earnings per share, excluding specified items |
$0.89 |
$0.82 |
$3.32 |
$3.14 |
a) |
|||
Average diluted shares outstanding |
1,597 |
1,608 |
1,610 |
1,604 |
a) |
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 Dec. 31, 2014 |
||||
(Unaudited) (In millions, except per share data) |
||||
1. |
Specified items impacted results as follows: |
|||
4Q14 |
||||
Earnings (loss) |
Diluted |
|||
Pre-tax |
After-tax |
EPS |
||
As reported (GAAP) |
($1,037) |
($810) |
($0.51) |
|
Adjusted for specified items: |
||||
Other revenue |
(81) |
(81) |
(0.05) |
|
Intangible asset amortization |
96 |
69 |
0.04 |
|
Acquired IPR&D |
28 |
29 |
0.02 |
|
Calico collaboration |
500 |
500 |
0.31 |
|
Shire transaction costs |
2,227 |
1,623 |
1.00 |
|
Separation costs and other |
134 |
116 |
0.08 |
|
As adjusted (non-GAAP) |
$1,867 |
$1,446 |
$0.89 |
|
Other revenue principally includes royalty income from prior periods recognized in the fourth quarter of 2014 as a result of the settlement of a licensing arrangement. Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. Acquired IPR&D primarily reflects an upfront payment related to a licensing arrangement with a third party. Calico collaboration reflects a payment related to the previously announced Calico collaboration. Shire transaction costs are expenses related to the terminated Shire transaction. Separation costs and other is primarily related to the separation of AbbVie from Abbott. |
2. |
The impact of the specified items by line item was as follows: |
||||||||
4Q14 |
|||||||||
Net Sales |
Cost of products sold |
SG&A |
R&D |
Acquired IPR&D |
Other operating expense |
Interest expense (income) |
Net exchange (gain) loss |
||
As reported (GAAP) |
$5,452 |
$1,119 |
$3,341 |
$879 |
$28 |
$500 |
$129 |
$496 |
|
Adjusted for specified items: |
|||||||||
Other revenue |
(81) |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
Intangible asset amortization |
-- |
(96) |
-- |
-- |
-- |
-- |
-- |
-- |
|
Acquired IPR&D |
-- |
-- |
-- |
-- |
(28) |
-- |
-- |
-- |
|
Calico collaboration |
-- |
-- |
-- |
-- |
-- |
(500) |
-- |
-- |
|
Shire transaction costs |
-- |
-- |
(1,660) |
-- |
-- |
-- |
(66) |
(501) |
|
Separation costs and other |
-- |
(15) |
(117) |
(2) |
-- |
-- |
-- |
-- |
|
As adjusted (non-GAAP) |
$5,371 |
$1,008 |
$1,564 |
$877 |
-- |
-- |
$63 |
($5) |
3. |
The adjusted tax rate for the fourth quarter of 2014 was 22.5 percent, as detailed below: |
|||
4Q14 |
||||
Pre-tax |
Income |
|||
income (loss) |
taxes |
Tax rate |
||
As reported (GAAP) |
($1,037) |
($227) |
21.9% |
|
Specified items |
2,904 |
648 |
22.3% |
|
As adjusted (non-GAAP) |
$1,867 |
$421 |
22.5% |
AbbVie Inc. |
||||
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
||||
Quarter Ended Dec. 31, 2013 |
||||
(Unaudited) (In millions, except per share data) |
||||
1. |
Specified items impacted results as follows: |
|||
4Q13 |
||||
Earnings |
Diluted |
|||
Pre-tax |
After-tax |
EPS |
||
As reported (GAAP) |
$1,439 |
$1,128 |
$0.70 |
|
Adjusted for specified items: |
||||
Intangible asset amortization |
101 |
76 |
0.05 |
|
Separation costs |
103 |
66 |
0.04 |
|
Acquired IPR&D |
48 |
48 |
0.03 |
|
Restructuring/Other |
11 |
7 |
0.00 |
|
As adjusted (non-GAAP) |
$1,702 |
$1,325 |
$0.82 |
Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. Separation costs are expenses related to the separation of AbbVie from Abbott. Acquired IPR&D reflects upfront payments related to previously announced collaborations. Restructuring/Other is primarily associated with previously announced restructuring activities. |
2. |
The impact of the specified items by line item was as follows: |
|||||
4Q13 |
||||||
Cost of products sold |
SG&A |
R&D |
Acquired IPR&D |
Other (income) expense |
||
As reported (GAAP) |
$1,282 |
$1,448 |
$798 |
$48 |
$13 |
|
Adjusted for specified items: |
||||||
Intangible asset amortization |
(101) |
-- |
-- |
-- |
-- |
|
Separation costs |
(5) |
(95) |
(3) |
-- |
-- |
|
Acquired IPR&D |
-- |
-- |
-- |
(48) |
-- |
|
Restructuring/Other |
(8) |
-- |
-- |
-- |
(3) |
|
As adjusted (non-GAAP) |
$1,168 |
$1,353 |
$795 |
-- |
$10 |
3. |
The adjusted tax rate for fourth-quarter 2013 was 22.2 percent, as detailed below: |
|||
4Q13 |
||||
Pre-tax |
Income |
|||
income |
taxes |
Tax rate |
||
As reported (GAAP) |
$1,439 |
$311 |
21.6% |
|
Specified items |
263 |
66 |
25.1% |
|
As adjusted (non-GAAP) |
$1,702 |
$377 |
22.2% |
AbbVie Inc. |
||||
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
||||
Twelve Months Ended Dec. 31, 2014 |
||||
(Unaudited) (In millions, except per share data) |
||||
1. |
Specified items impacted results as follows: |
|||
12M14 |
||||
Earnings |
Diluted |
|||
Pre-tax |
After-tax |
EPS |
||
As reported (GAAP) |
$2,369 |
$1,774 |
$1.10 |
|
Adjusted for specified items: |
||||
Other revenue |
(81) |
(81) |
(0.05) |
|
Intangible asset amortization |
403 |
287 |
0.18 |
|
R&D |
40 |
40 |
0.02 |
|
Acquired IPR&D |
352 |
251 |
0.15 |
|
Calico collaboration |
750 |
750 |
0.46 |
|
Shire transaction costs |
2,510 |
1,802 |
1.12 |
|
Separation costs |
445 |
385 |
0.24 |
|
Other |
136 |
167 |
0.10 |
|
As adjusted (non-GAAP) |
$6,924 |
$5,375 |
$3.32 |
Other revenue principally includes royalty income from prior periods recognized in the fourth quarter of 2014 as a result of the settlement of a licensing arrangement. Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. R&D is associated with payments for previously announced collaborations. Acquired IPR&D reflects upfront payments related to previously announced collaborations. Calico collaboration reflects payments related to the previously announced Calico collaboration. Shire transaction costs are expenses related to the terminated Shire transaction. Separation costs are related to the separation of AbbVie from Abbott. Other is primarily associated with the recognition of an additional year of the Branded Prescription Drug Fee as required by new IRS regulations. |
2. |
The impact of the specified items by line item was as follows: |
|||||||||
12M14 |
||||||||||
Net Sales |
Cost of products sold |
SG&A |
R&D |
Acquired IPR&D |
Other operating expense |
Interest expense (income) |
Net exchange (gain) loss |
Other (income) expense |
||
As reported (GAAP) |
$19,960 |
$4,426 |
$7,724 |
$3,297 |
$352 |
$750 |
$391 |
$678 |
($27) |
|
Adjusted for specified items: |
||||||||||
Other revenue |
(81) |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
Intangible asset amortization |
-- |
(403) |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
R&D |
-- |
-- |
-- |
(40) |
-- |
-- |
-- |
-- |
-- |
|
Acquired IPR&D |
-- |
-- |
-- |
-- |
(352) |
-- |
-- |
-- |
-- |
|
Calico collaboration |
-- |
-- |
-- |
-- |
-- |
(750) |
-- |
-- |
-- |
|
Shire transaction costs |
-- |
-- |
(1,703) |
-- |
-- |
-- |
(141) |
(666) |
-- |
|
Separation costs |
-- |
(18) |
(422) |
(5) |
-- |
-- |
-- |
-- |
-- |
|
Other |
-- |
(58) |
(112) |
-- |
-- |
-- |
-- |
-- |
34 |
|
As adjusted (non-GAAP) |
$19,879 |
$3,947 |
$5,487 |
$3,252 |
-- |
-- |
$250 |
$12 |
$7 |
3. |
The adjusted tax rate for the full-year 2014 was 22.4 percent, as detailed below: |
|||
12M14 |
||||
Pre-tax |
Income |
|||
income |
taxes |
Tax rate |
||
As reported (GAAP) |
$2,369 |
$595 |
25.1% |
|
Specified items |
4,555 |
954 |
20.9% |
|
As adjusted (non-GAAP) |
$6,924 |
$1,549 |
22.4% |
AbbVie Inc. |
||||
Reconciliation of GAAP Reported to Non-GAAP Adjusted Information |
||||
Twelve Months Ended Dec. 31, 2013 |
||||
(Unaudited) (In millions, except per share data) |
||||
1. |
Specified items impacted results as follows: |
|||
12M13 |
||||
Earnings |
Diluted |
|||
Pre-tax |
After-tax |
EPS |
||
As reported (GAAP) |
$5,332 |
$4,128 |
$2.56 |
|
Adjusted for specified items: |
||||
Intangible asset amortization |
509 |
370 |
0.23 |
|
Separation costs |
255 |
163 |
0.10 |
|
Acquired IPR&D |
338 |
338 |
0.21 |
|
Restructuring/Other |
81 |
67 |
0.04 |
|
As adjusted (non-GAAP) |
$6,515 |
$5,066 |
$3.14 |
Intangible asset amortization reflects costs recognized as a result of licensing and acquisition activities. Separation costs are expenses related to the separation of AbbVie from Abbott. Acquired IPR&D reflects upfront payments related to previously announced collaborations. Restructuring/Other is primarily associated with previously announced restructuring activities. |
2. |
The impact of the specified items by line item was as follows: |
||||||
12M13 |
|||||||
Cost of products sold |
SG&A |
R&D |
Acquired IPR&D |
Net foreign exchange (gain) loss |
Other (income) expense |
||
As reported (GAAP) |
$4,581 |
$5,352 |
$2,855 |
$338 |
$55 |
($1) |
|
Adjusted for specified items: |
|||||||
Intangible asset amortization |
(509) |
-- |
-- |
-- |
-- |
-- |
|
Separation costs |
(16) |
(230) |
(9) |
-- |
-- |
-- |
|
Acquired IPR&D |
-- |
-- |
-- |
(338) |
-- |
-- |
|
Restructuring/Other |
(5) |
(38) |
(15) |
-- |
(11) |
(12) |
|
As adjusted (non-GAAP) |
$4,051 |
$5,084 |
$2,831 |
-- |
44 |
($13) |
3. |
The adjusted tax rate for the full-year 2013 was 22.2 percent, as detailed below: |
|||
12M13 |
||||
Pre-tax |
Income |
|||
income |
taxes |
Tax rate |
||
As reported (GAAP) |
$5,332 |
$1,204 |
22.6% |
|
Specified items |
1,183 |
245 |
20.7% |
|
As adjusted (non-GAAP) |
$6,515 |
$1,449 |
22.2% |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/abbvie-reports-fourth-quarter-and-full-year-2014-financial-results-300028402.html
SOURCE
Media: Jennifer Smoter, (847) 935-8865; Adelle Infante, (847) 938-8745; Investors: Larry Peepo, (847) 935-6722; Liz Shea, (847) 935-2211