UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 26, 2013

 

ABBVIE INC.

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

001-35565

 

32-0375147

(State or other Jurisdiction

 

(Commission File Number)

 

(IRS Employer

of Incorporation)

 

 

 

Identification No.)

 


 

1 North Waukegan Road

North Chicago, Illinois 60064-6400

(Address of principal executive offices)(Zip Code)

 

Registrant’s telephone number, including area code:  (847) 932-7900

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.  Results of Operations and Financial Condition

 

On July 26, 2013, AbbVie Inc. issued a press release announcing its results of operations for the second quarter 2013.  A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.

 

2



 

Item 9.01                                           Financial Statements and Exhibits

 

 

Exhibit No.

 

Exhibit

 

 

 

 

 

99.1

 

Press Release dated July 26, 2013 (furnished pursuant to Item 2.02).

 

3



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ABBVIE INC.

 

 

 

 

Date: July 26, 2013

By:

/s/ William J. Chase

 

 

William J. Chase

 

 

Executive Vice President,

 

 

Chief Financial Officer

 

4



 

EXHIBIT INDEX

 

Exhibit No.

 

Exhibit

99.1

 

Press Release dated July 26, 2013 (furnished pursuant to Item 2.02).

 

5


Exhibit 99.1

 

 

 

 

 

 

 

 

PRESS RELEASE

 

AbbVie Reports Second-Quarter 2013 Financial Results

 

·                  Raises 2013 Adjusted EPS Guidance to $3.07-$3.13, GAAP EPS Guidance of $2.66-$2.72

 

·                  Reports Second-Quarter Adjusted EPS of $0.82, GAAP EPS of $0.66

 

·                  Delivers Revenue of $4.692 Billion, an Increase of 4.4 Percent (Up 5.1 Percent Excluding Foreign Exchange)

 

·                  Revenue Growth Reflects 12.1 Percent Global Reported Sales Growth from HUMIRA (Up 12.8 Percent Excluding Foreign Exchange) and Double-Digit Growth from Several Other Key Products

 

·                  Significant Advancements in Pipeline: Phase 3 HCV Enrollment Now Complete; HCV Combination Granted Breakthrough Designation; Extended Galapagos Collaboration to Include Crohn’s Disease; Initiated Phase 3 Program for Atrasentan; Entered Collaboration to Develop Novel Compound for Celiac Disease

 

 

NORTH CHICAGO, Ill., July 26, 2013 – AbbVie today announced financial results for the second quarter ended June 30, 2013.

 

“AbbVie has delivered strong performance in both the second quarter and the first six months as an independent company,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.  “Our first-half performance, including better-than-expected sales growth, has allowed us to increase our earnings-per-share guidance for the year.  We also reached a number of key pipeline milestones this quarter, and remain very encouraged by the progress of our mid- and late-stage development programs.”

 

Second-Quarter Results

 

·                  Worldwide sales were $4.692 billion in the second quarter, up 4.4 percent.  On an operational basis, sales increased 5.1 percent, excluding a 0.7 percent unfavorable impact from foreign exchange rate fluctuations.  Sales increased in the quarter despite the decline in TriCor/Trilipix sales due to the loss of exclusivity.  Excluding TriCor/Trilipix sales and foreign exchange, sales increased 10.3 percent in the second quarter.

 

·                  Sales growth was driven primarily by the continued strength of HUMIRA.  Global HUMIRA sales increased 12.1 percent, or 12.8 percent on an operational basis, excluding the impact of foreign exchange rate fluctuations.  U.S. HUMIRA sales grew 16.0 percent due to growth in dermatology and gastroenterology, as well as the launch of the ulcerative colitis indication.  Total company sales growth was also driven by double-digit growth from key products including Synthroid, Creon, Zemplar and Duodopa.

 

1



 

 

 

Second-Quarter Results (continued)

 

·                  Second-quarter adjusted gross margin ratio was 80.7 percent, excluding intangible asset amortization and other specified items.  The gross margin ratio under U.S. generally accepted accounting principles (GAAP) was 77.5 percent.

 

·                  Adjusted selling, general and administrative (SG&A) expense was 27.9 percent of sales in the second quarter, reflecting continued investment in our growth brands.  On a GAAP basis, SG&A was 30.0 percent of sales.

 

·                  Adjusted research and development (R&D) was 14.8 percent of sales in the second quarter, reflecting funding actions in support of our emerging mid- and late-stage pipeline assets and the continued pursuit of additional HUMIRA indications.  On a GAAP basis, R&D was 15.1 percent of sales.

 

·                  Net interest expense was $75 million in the second quarter, and adjusted other income was $7 million.  On a GAAP basis, other income was $4 million.

 

·                  The adjusted tax rate was 22.3 percent in the quarter.  On a GAAP basis, the second-quarter tax rate was 21.9 percent.

 

·                  Second-quarter diluted earnings per share were $0.66 on a GAAP basis.  Adjusted diluted earnings per share, excluding intangible asset amortization expense and other specified items, were $0.82, above the company’s previous guidance range.

 

Key Events from the Second Quarter

 

·                  Recently completed enrollment in all registrational studies in AbbVie’s Phase 3 genotype 1 hepatitis C virus (HCV) program.  Received Breakthrough Therapy designation from the U.S. Food and Drug Administration (FDA) for AbbVie’s investigational direct-acting antiviral combination with and without ribavirin.  We expect our Phase 3 studies to begin to read out later this year and into early 2014.

 

·                  Announced preliminary results from a Phase 1 study of ABT-199, AbbVie’s first-in-class BcL-2 inhibitor in development in partnership with Roche/Genentech, in patients with high-risk relapsed/refractory chronic lymphocytic leukemia (CLL), and in patients with relapsed/refractory non-Hodgkin’s lymphoma (NHL).  We recently initiated a potentially registrational Phase 2 single-agent, single-arm study in relapsed/refractory CLL patients with the 17P chromosome deletion.  We also expect to begin a Phase 3 comparative, combination study in relapsed/refractory CLL in the next six to nine months.

 

·                  Initiated a Phase 3 study to assess the effects of the investigational compound atrasentan, when added to standard of care, on progression of kidney disease in patients with stage 2 to 4 chronic kidney disease and type 2 diabetes.  The initiation of the Phase 3 study follows results from Phase 2b studies, which were recently presented at the 2013 European Renal Association-European Dialysis and Transplant Association (ERA-EDTA) Congress.

 

2



 

 

 

 

Key Events from the Second Quarter (continued)

 

·                  AbbVie and Galapagos announced an extension of their GLPG0634 clinical development collaboration to include Crohn’s disease.  Galapagos will fund and complete a Phase 2 program in Crohn’s disease, which is designed to facilitate rapid progression into Phase 3.  Additionally, safety and efficacy data from a Phase 2a study of GLPG0634 in rheumatoid arthritis was recently presented at the European League Against Rheumatism (EULAR) Annual Congress.

 

·                  HUMIRA received approval in Japan for two additional gastroenterology indications, including ulcerative colitis and intestinal Behçet’s disease.  HUMIRA is the first and only biologic treatment available for Behçet’s in the country.

 

·                  AbbVie and Alvine Pharmaceuticals announced a global collaboration to develop a novel oral treatment for patients with celiac disease, currently in Phase 2 development.  This collaboration builds on AbbVie’s expertise and leadership in the field of gastroenterology.

 

·                  Along with partner Bristol-Myers Squibb, AbbVie announced updated efficacy and safety data from a randomized Phase 2, open-label study in patients with previously-treated multiple myeloma.  Results demonstrated median progression-free survival of 33 months and an objective response rate of 92 percent among patients treated with the investigational monoclonal antibody elotuzumab (10 mg/kg) in combination with lenalidomide and low-dose dexamethasone.

 

·                  On June 20, the board of directors of AbbVie declared a quarterly cash dividend of $0.40 per share, payable Aug. 15, 2013 to stockholders of record at the close of business on July 15, 2013.  AbbVie was named to the S&P 500 Dividend Aristocrats Index.

 

Raising Full-Year 2013 Outlook

 

AbbVie is raising its diluted earnings-per-share guidance for the full-year 2013 to $3.07 to $3.13 (from $3.03 to $3.13) on an adjusted basis, or $2.66 to $2.72 on a GAAP basis.  The company’s 2013 adjusted diluted earnings-per-share guidance excludes $0.41 per share of intangible asset amortization expense, acquired in-process research and development, and other specified items primarily associated with certain separation-related costs and ongoing restructuring activities.

 

About AbbVie

 

AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott.  The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.   In 2013, AbbVie employs approximately 21,000 people worldwide and markets medicines in more than 170 countries.  For further information on the company and its people, portfolio and commitments, please visit www.abbvie.com.  Follow @abbvie on Twitter or view careers on our Facebook or LinkedIn page.

 

3



 

 

 

 

Conference Call

 

AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our second-quarter performance.  Participating on the call will be Rick Gonzalez, chairman and chief executive officer;  Bill Chase, executive vice president and chief financial officer;  Laura Schumacher, executive vice president of business development, external affairs and general counsel;  Scott Brun, vice president of clinical development;  and Larry Peepo, vice president of investor relations.  The call will be webcast through AbbVie’s Investor Relations Web site at www.abbvieinvestor.com.  An archived edition of the call will be available after 11:00 a.m. Central time.

 

Non-GAAP Financial Results

 

Financial results for 2013 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 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.  The company’s 2013 financial guidance is also being provided on both a reported and a non-GAAP basis.

 

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 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, 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,” in AbbVie’s 2012 Annual Report on Form 10-K/A, which has been filed with the Securities and Exchange Commission.  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.

 

Media:

 

Jennifer Smoter

(847) 935-8865

 

Greg Miley

(847) 938-4898

 

Adelle Infante
(847) 938-8745

Investors:

 

Larry Peepo

(847) 935-6722

 

Liz Shea

(847) 935-2211

 

4


 


 

 

 

 

AbbVie Inc.

Key Product Sales

Quarter Ended June 30, 2013

(Unaudited)

 

 

 

 

 

 

 

 

 

% Change vs. 2Q12

 

 

Sales (in millions)

 

 

 

International

 

Total

 

 

U.S.

 

Int’l.

 

Total

 

 

U.S.

 

Operational

 

Reported

 

Operational

 

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL SALES

 

$2,625

 

$2,067

 

$4,692

 

 

2.3%

 

8.9%

 

7.3%

 

 

5.1%

 

4.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Humira

 

1,224

 

1,382

 

2,606

 

 

16.0

 

10.1

 

8.8

 

 

12.8

 

12.1

Kaletra

 

66

 

212

 

278

 

 

(5.7)

 

4.9

 

3.4

 

 

2.2

 

1.1

AndroGel

 

258

 

--

 

258

 

 

(6.5)

 

n/a

 

n/a

 

 

(6.5)

 

(6.5)

Niaspan

 

232

 

--

 

232

 

 

10.0

 

n/a

 

n/a

 

 

10.0

 

10.0

Lupron

 

144

 

55

 

199

 

 

2.1

 

(8.3)

 

(8.3)

 

 

(1.0)

 

(1.0)

Synthroid

 

153

 

--

 

153

 

 

24.4

 

n/a

 

n/a

 

 

24.4

 

24.4

Sevoflurane

 

19

 

118

 

137

 

 

--

 

(9.7)

 

(11.9)

 

 

(8.5)

 

(10.5)

TriCor/Trilipix

 

107

 

--

 

107

 

 

(65.6)

 

n/a

 

n/a

 

 

(65.6)

 

(65.6)

Zemplar

 

63

 

44

 

107

 

 

12.5

 

12.8

 

12.8

 

 

12.6

 

12.6

Creon

 

106

 

--

 

106

 

 

20.5

 

n/a

 

n/a

 

 

20.5

 

20.5

Synagis

 

--

 

70

 

70

 

 

n/a

 

20.3

 

9.4

 

 

20.3

 

9.4

Duodopa

 

--

 

44

 

44

 

 

n/a

 

22.9

 

25.7

 

 

22.9

 

25.7

 

Note: “Operational” growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations.

n/a = not applicable

 

5



 

 

 

AbbVie Inc.

Key Product Sales

Six Months Ended June 30, 2013

(Unaudited)

 

 

 

 

 

 

 

 

 

% Change vs. 6M12

 

 

Sales (in millions)

 

 

 

International

 

Total

 

 

U.S.

 

Int’l.

 

Total

 

 

U.S.

 

Operational

 

Reported

 

Operational

 

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL SALES

 

$4,747

 

$4,274

 

$9,021

 

 

1.1%

 

9.9%

 

7.7%

 

 

5.1%

 

4.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Humira

 

2,180

 

2,670

 

4,850

 

 

19.3

 

11.5

 

9.8

 

 

14.8

 

13.9

AndroGel

 

498

 

--

 

498

 

 

(2.0)

 

n/a

 

n/a

 

 

(2.0)

 

(2.0)

Kaletra

 

118

 

379

 

497

 

 

(5.6)

 

3.8

 

2.2

 

 

1.4

 

0.2

Niaspan

 

418

 

--

 

418

 

 

4.0

 

n/a

 

n/a

 

 

4.0

 

4.0

Synagis

 

--

 

415

 

415

 

 

n/a

 

8.5

 

1.2

 

 

8.5

 

1.2

Lupron

 

269

 

111

 

380

 

 

(4.6)

 

(5.1)

 

(5.9)

 

 

(4.8)

 

(5.0)

Sevoflurane

 

35

 

239

 

274

 

 

6.1

 

(11.6)

 

(13.4)

 

 

(9.7)

 

(11.3)

Synthroid

 

272

 

--

 

272

 

 

7.9

 

n/a

 

n/a

 

 

7.9

 

7.9

TriCor/Trilipix

 

235

 

--

 

235

 

 

(58.4)

 

n/a

 

n/a

 

 

(58.4)

 

(58.4)

Creon

 

196

 

--

 

196

 

 

25.6

 

n/a

 

n/a

 

 

25.6

 

25.6

Zemplar

 

104

 

84

 

188

 

 

(4.6)

 

10.5

 

10.5

 

 

1.6

 

1.6

Duodopa

 

--

 

83

 

83

 

 

n/a

 

15.5

 

16.9

 

 

15.5

 

16.9

 

Note: “Operational” growth reflects the percentage change over the prior year excluding the impact of exchange rate fluctuations.

n/a = not applicable

 

6



 

 

 

AbbVie Inc.

Consolidated Statements of Earnings

Quarter and Six Months Ended June 30, 2013 and 2012

(Unaudited) (In millions, except per share data)

 

 

 

 

Second Quarter Ended
June 30

 

Six Months Ended
June 30

 

 

2013

 

2012

 

2013

 

2012

Net sales

 

$4,692

 

$4,493

 

$9,021

 

$8,666

 

 

 

 

 

 

 

 

 

Cost of products sold

 

1,054

 

1,073

 

2,207

 

2,229

Selling, general and administrative

 

1,406

 

1,246

 

2,643

 

2,493

Research and development

 

709

 

642

 

1,343

 

1,284

Acquired in-process research and development

 

70

 

110

 

70

 

260

Total operating cost and expenses

 

3,239

 

3,071

 

6,263

 

6,266

 

 

 

 

 

 

 

 

 

Operating earnings

 

1,453

 

1,422

 

2,758

 

2,400

 

 

 

 

 

 

 

 

 

Interest (income) expense, net

 

75

 

(2)

 

141

 

(3)

Net foreign exchange (gain) loss

 

14

 

11

 

29

 

21

Other (income) expense, net

 

(4)

 

11

 

(19)

 

(26)

Earnings before income tax

 

1,368

 

1,402

 

2,607

 

2,408

Income tax expense

 

300

 

135

 

571

 

258

Net earnings

 

$1,068

 

$1,267

 

$2,036

 

$2,150

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$0.66

 

$0.80

 

$1.27

 

$1.36

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

 

1,609

 

1,577

 

1,605

 

1,577

 

Note:  On January 1, 2013, Abbott Laboratories distributed 1,577 million shares of AbbVie common stock to Abbott’s shareholders in connection with the separation of AbbVie from Abbott.  The computation of diluted earnings per share for the quarter and six months ended June 30, 2012 was calculated using the shares distributed on January 1, 2013.

 

7



 

 

 

AbbVie Inc.

Reconciliation of GAAP Reported to Non-GAAP Adjusted Information

Quarter Ended June 30, 2013

(Unaudited) (In millions, except per share data)

 

1.                  Specified items impacted results as follows:

 

 

 

2Q13

 

 

Earnings

 

Diluted

 

 

Pre-tax

 

After-tax

 

EPS

As reported (GAAP)

 

$1,368

 

$1,068

 

$0.66

Adjusted for specified items:

 

 

 

 

 

 

Intangible asset amortization

 

136

 

98

 

0.06

Separation costs

 

67

 

42

 

0.03

Acquired IPR&D

 

70

 

70

 

0.04

Restructuring/Other

 

57

 

41

 

0.03

As adjusted (non-GAAP)

 

$1,698

 

$1,319

 

$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 the upfront payment related to the previously announced collaboration with Alvine Pharmaceuticals.  Restructuring/Other is primarily associated with ongoing restructuring activities.

 

2.                  The impact of the specified items by line item was as follows:

 

 

 

2Q13

 

 

Cost of
products
sold

 

SG&A

 

R&D

 

Acquired
IPR&D

 

Other
(income)
expense

As reported (GAAP)

 

$1,054

 

$1,406

 

$709

 

$70

 

($4)

Adjusted for specified items:

 

 

 

 

 

 

 

 

 

 

Intangible asset amortization

 

(136)

 

--

 

--

 

--

 

--

Separation costs

 

(4)

 

(60)

 

(3)

 

--

 

--

Acquired IPR&D

 

--

 

--

 

--

 

(70)

 

--

Restructuring/Other

 

(7)

 

(36)

 

(11)

 

--

 

(3)

As adjusted (non-GAAP)

 

$907

 

$1,310

 

$695

 

--

 

($7)

 

3.                  The adjusted tax rate for the second quarter was 22.3 percent, as detailed below:

 

 

 

 

 

2Q13

 

 

 

 

 

 

 

 

Pre-tax

 

Income

 

 

 

 

 

 

 

 

income

 

taxes

 

Tax rate

 

 

 

 

As reported (GAAP)

 

$1,368

 

$300

 

21.9%

 

 

 

 

Specified items

 

330

 

79

 

23.9%

 

 

 

 

As adjusted (non-GAAP)

 

$1,698

 

$379

 

22.3%

 

 

 

 

 

8