AbbVie Inc. Q4 2025 earnings call

Good morning, and thanks for joining us. Also on the call with me today are Rob Michael, Chairman and Chief Executive Officer; Jeff Stewart, Executive Vice President, Chief Commercial Officer; Roopal Thakkar, Executive Vice President, Research and Development, Chief Scientific Officer; and Scott Reents, Executive Vice President, Chief Financial Officer. Before we get started, I'll note that some statements we make today may be considered forward-looking statements based on our current expectations. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in our forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. AbbVie undertakes no obligation to update these forward-looking statements except as required by law. On today's conference call, non-GAAP financial measures will be used to help investors understand AbbVie's business performance.

These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website. Following our prepared marks, we will take your questions. With that, I'll turn the call over to Rob.

Thank you, Liz. Good morning, everyone, and thank you for joining us. Our fourth-quarter performance closes out another excellent year for AbbVie, and I am very pleased with the significant progress we made in 2025. We delivered record net sales and exceeded our financial commitments, advanced our pipeline across all stages of development, and acquired new sources of growth through strategic transactions. We are entering 2026 with substantial momentum and remain well-positioned to deliver another year of strong growth. Turning to our results, we delivered full-year adjusted earnings per share of $10, which is $0.54 above our initial guidance midpoint, excluding the impact of IPR&D expense. Total net revenues were $61.2 billion, beating our initial guidance by more than $2 billion.

Our sales growth of 8.6% led to a new all-time high for AbbVie, exceeding our previous peak revenue by more than $3 billion, despite nearly $16 billion of U.S. Humira erosion since the LOE. Our excellent performance puts us in a strong position to advance our innovative medicines. In 2025, we increased adjusted R&D expense by nearly $1 billion, fully funding the 90 clinical programs currently in development. We also obtained several new product and indication approvals, including Rinvoq for GCA, Emrelis for non-squamous non-small cell lung cancer, and Epkinly for second-line follicular lymphoma. We bolstered our pipeline by investing more than $5 billion in new business development, including several promising mechanisms and technologies.

These include an in vivo CAR-T platform in immunology from Capstan Therapeutics; Bretisilocin, a next-generation psychedelic with promising data in depression; ISB 2001, a novel trispecific antibody for multiple myeloma; ABBV-295, a long-acting amylin analog for obesity; and a next-generation siRNA platform from ADARx that has applicability in immunology, neuroscience, and oncology. We also recently announced a transaction with RemeGen, adding a novel PD-1/VEGF bispecific antibody to combine with our ADCs across multiple solid tumors, further strengthening AbbVie's oncology portfolio. Turning to 2026, we expect AbbVie to once again deliver top-tier performance. We anticipate total sales growth of 9.5%, reflecting another year of robust sales results despite headwinds from continued Humira erosion and Imbruvica IRA pricing. The main drivers of this growth include Skyrizi and Rinvoq, with combined sales of more than $31 billion, already surpassing our 2027 long-term guidance by $500 million.

We are also forecasting a substantial sales ramp for Vyalev, achieving blockbuster status this year as a transformational treatment for Parkinson's. And we expect continued double-digit revenue growth from our leading migraine products, which are also trending significantly above our long-term expectations. Given the strong outlook of our diverse portfolio, we are well-positioned to deliver high single-digit revenue growth through 2029. Turning now to R&D, we anticipate a number of key catalysts across our core therapeutic areas over the next 24 months. In immunology, this includes pivotal data for three additional Rinvoq indications, as well as initial data for our Crohn's combination platform with Skyrizi. In neuroscience, we anticipate key readouts for next-generation assets 932, Bretisilocin, and Emraclidine. And in oncology, we expect registrational data for Etentamig, as well as mid-to-late-stage readouts for Temab-A in several solid tumors.

These are all very exciting opportunities that have the potential to drive sustained long-term growth. Lastly, we recently announced a voluntary agreement with the U.S. government that reinforces our commitment to patient access and affordability while also protecting our ability to invest in innovation. Key elements of this three-year agreement include offering low prices in Medicaid, expanding direct-to-patient cash pay options for select products, and committing $100 billion in U.S. R&D and capital investments over the next decade. In summary, we are delivering outstanding execution, and the outlook of our business remains very strong. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights. Jeff.

Thank you, Rob. I'll start with the quarterly results for immunology, which delivered total revenues of approximately $8.6 billion. Skyrizi total sales were $5 billion, reflecting operational growth of 31.9%. Rinvoq total sales were nearly $2.4 billion, reflecting operational growth of 28.6%. On a full-year basis, Skyrizi and Rinvoq delivered approximately $25.9 billion in total combined revenue, an impressive increase of more than $8 billion year over year, well exceeding our initial guidance expectations. These results reflect exceptional performance across their respective indications, and I'll highlight a few examples. Starting with psoriatic disease, a market that is growing high single digits with modest biologic penetration, where our portfolio has clear leadership. Skyrizi total prescription share in the U.S. biologic psoriasis market is now more than 45% and accelerating in the fourth quarter.

Our in-play capture rates of new and switching patients have exceeded 55% across all lines of therapy, four times higher than the next closest competitor. And when you consider Skyrizi's very high and durable skin clearance, including new and statistically significant data across the board for hard-to-treat areas like scalp, genitals, palmar, plantar, also widely demonstrated superior efficacy to both biologic and two oral agents, along with that simple quarterly dosing, we do not expect a material impact to our robust outlook in psoriasis from any existing or new therapies this year and beyond. Moving to PsA Derm, where nearly 30% of patients visiting dermatologists have both skin and joint involvement, Skyrizi is now capturing roughly one out of every four in-play patients on biologics across all lines of therapy in the U.S., further supporting Skyrizi's strong momentum.

The PsA indication represents a critical differentiator in the psoriasis market, especially relative to emerging options where PsA efficacy is still unproven. Importantly, Skyrizi has achieved PsA frontline in-play patient share leadership for biologics in both the derm and the Rheum segments. Turning more broadly to Rheum, Rinvoq continues to achieve a leading mid-teen in-play patient share for RA across all lines of therapy in the U.S. This is roughly double our total TRx share, highlighting a nice setup for incremental share capture in RA over the next several years, driven by our active communication of the SELECT SWITCH trial, with data demonstrating Rinvoq's doubling of remission rates versus treatment with a second TNF inhibitor. And lastly, in IBD, where we continue to deliver strong performance and remain very well-positioned.

The IBD market is very robust, with high single-digit growth driven by increasing biologic penetration and rapidly expanding lines of therapy as patients cycle to newer, high-efficacy agents like Skyrizi and Rinvoq. We are very pleased with Skyrizi's strong growth in IBD. Global sales for this indication were approximately $6.4 billion in 2025, more than double our prior year performance in IBD. We remain very confident in Skyrizi's profile in IBD, including its demonstrated strong impact on clinical remission, as well as extremely strong endoscopic data with best-in-class placebo-adjusted rates, particularly in the bio-naïve patients. You can see this clinical profile playing out well when you consider our current market shares by line of therapy.

Importantly, and despite in-class competition for most of 2025, Skyrizi's capture rates remain exceptionally impressive, especially in that frontline treatment of IBD, which is the strongest signal of overall physician preference, and Skyrizi remains the clear leader. Skyrizi retains a very high IL-23 category patient share, with an in-play capture rate of approximately 75% in the frontline setting overall for IBD. This is driven by an even higher frontline capture rate for Skyrizi and Crohn's disease, which is roughly two-thirds of the total IBD market. And these capture rates have been strong and consistent even as the IL-23 category expands rapidly. Skyrizi's dosing convenience is also favored, with less frequent maintenance treatment to the most effective dose for other IL-23s, which is very important as patients tend to be on therapy for many years.

So Skyrizi continues to perform very well and will continue to do so in 2026 and beyond. Equally importantly, and unlike any other competitor, we have a second compelling treatment in IBD, Rinvoq, which is also capturing robust mid-teens in-play share across all lines of therapy in Crohn's disease and ulcerative colitis. Rinvoq has demonstrated some of the strongest response rates to date in IBD, including rapidity of action, which is important for patients who need rapid control and durable remission. And with Rinvoq's recently expanded label in IBD, patients will now have access to Rinvoq earlier in the treatment paradigm when anti-TNF treatment is clinically inadvisable. Skyrizi and Rinvoq are a great pair in IBD. Skyrizi is well-positioned in frontline, and we see more opportunity than ever before for Rinvoq in the second-line plus setting.

So together, our two brands have already exceeded peak Humira sales by more than $4.5 billion and are on pace to deliver more than 20% growth in 2026, remarkable considering this year will be their eighth year on the market. Turning now to Humira, which delivered global sales of more than $1.2 billion, down 26.1% on an operational basis, primarily due to biosimilar competition and in line with our expectations. We anticipate Humira access will decrease further throughout 2026 as more plans move to exclusive biosimilar contracts. Moving to neuroscience, where full-year revenues were more than $10.7 billion, reflecting impressive absolute sales growth of nearly $1.8 billion. In the quarter, total revenues were more than $2.9 billion, up 17.3% on an operational basis.

This robust performance is driven by continued double-digit growth of Vraylar, with global sales of $1 billion, Botox Therapeutic, with global revenues of $990 million, Ubrelvy, with global sales of $339 million, and Qulipta, with global revenues of $288 million. Beyond these leading therapies for psychiatry and migraine, we are very excited for our emerging portfolio in Parkinson's disease, which we believe remains underappreciated. Vyalev's launch continues to be outstanding. Total sales were $183 million in the quarter, up approximately 33% on a sequential basis. The uptake is exceptionally strong across international markets, and we expect sales to ramp in the U.S., where Vyalev recently received full coverage. Feedback from prescribers and patients' communities remains very encouraging, highlighting meaningful improvements in on-time and off-time as a result of Vyalev's continuous 24-hour delivery and the control of symptoms morning, day, and night.

Given these insights and the robust early-launch trends globally, we now expect Vyalev to achieve blockbuster revenue in 2026. And when you add Tavapadon for potential use as a monotherapy for early Parkinson's disease, as well as an adjunct to optimize oral therapy for more advanced patients, we believe we have the potential multi-billion-dollar emerging PD franchise over the long term. And we remain on track for commercial approval of Tavapadon in the U.S. later this year. Moving now to oncology, where total revenues were nearly $1.7 billion in the quarter, down 2.5% on an operational basis. Venclexta global sales were $710 million, up 6.4% on an operational basis, reflecting continued strong demand in CLL, with combination use of Venclexta plus BTK inhibitors emerging as a preferred all-oral fixed-duration treatment.

In 2026, we anticipate another major commercial catalyst with the global approvals of Venclexta plus Calquence in combination, two leading brands in CLL offering patients the potential for time-off treatment addressing an important need. Double-digit sales growth from Elahere, Epkinly, and Empliciti also helped to partially offset the expected sales decline for Imbruvica, which was down 20.8%, primarily due to continued competitive dynamics. We do anticipate Imbruvica IRA pricing will unfavorably impact our oncology portfolio growth in 2026. Turning now to aesthetics, which delivered global sales of nearly $1.3 billion in the quarter, down 1.2% on an operational basis. Botox Cosmetic global revenues were $717 million, up 3.8% on an operational basis. Juvéderm global sales were $249 million, down 10.8% on an operational basis.

As we've seen over the last several quarters, economic headwinds have continued to impact market conditions globally, and we anticipate category growth will remain challenged in 2026. With our leading market shares relatively stable for both toxins and fillers, we are focused on investing to stimulate the market, which remains highly underpenetrated. We expect to further catalyze growth with new promotional programs for Botox, including the Only You campaign that was launched over the last several months with encouraging early results. An unbranded program to educate practices and consumers about the benefit of HA fillers with a focus on driving natural outcomes. As well as additional injector training, which will be supported by our three new AMI training centers in the U.S., as well as training programs in key international geographies. Bringing innovation to the aesthetics market with our pipeline is also a clear priority.

We look forward to commercializing Trenibot E, a fast-acting, short-duration toxin, which is expected to be approved in the U.S. later this year. So overall, I'm extremely pleased with the execution across our commercial portfolio, which is demonstrating very, very strong momentum as we head into 2026. And with that, I will turn the call over to Roopal for comments on our R&D highlights. Roopal?

Thank you, Jeff. I'll start with immunology, where we are on track for numerous important data readouts across all stages of our pipeline this year, as well as several regulatory submissions and approvals. Regulatory applications for Rinvoq in non-segmental vitiligo were recently submitted, with an approval decision in the U.S. anticipated in the fourth quarter. Regulatory applications for Rinvoq in alopecia areata are under review in Europe and Japan, with approval decisions expected later this year. Our U.S. submission is planned for the second quarter. Over the course of 2026, results from several late-stage programs are anticipated, including phase III data from studies for both Rinvoq and lutikizumab in hidradenitis suppurativa and a study evaluating subcutaneous induction with Skyrizi in Crohn's disease.

We continue to make substantial progress with our early and mid-stage programs as well, where we have an exciting pipeline of next-generation therapies that have the potential to drive higher efficacy relative to standard of care. This year, we'll see data from our Crohn's disease platform study evaluating Skyrizi in combination with our novel anti-alpha-4 beta-7 antibody, ABBV-382, and our anti-IL-1 alpha/beta bispecific lutikizumab. Our extended half-life TL1a antibody will also be evaluated in combination with Skyrizi with a phase IIb dose-ranging study in Crohn's and ulcerative colitis beginning later this year. Separately, a phase II study is underway to evaluate our TREM1 antibody as a monotherapy in Crohn's disease. Data from this study will be available later this year and will help inform our combination strategy for this molecule. The phase Ib trial for ABBV-319, our anti-CD19 ADC with a steroid payload, is now underway.

We will soon begin dosing patients with our in vivo CD19 CAR-T, ABBV-619. These B-cell depleting approaches have the potential to become transformative modalities to reset the immune system and provide deep, durable, drug-free remission for patients with autoimmune diseases. Individual patient data from dose escalation studies will be available on a rolling basis, and we anticipate seeing efficacy results later this year. Several additional immunology assets will also be entering the clinic this year, including an extended half-life anti-IL-23 antibody and an oral peptide IL-23 inhibitor. Moving to oncology, progress continues with our next-generation c-Met ADC Temab-A. Strong data have been observed in late-line colorectal cancer as both a monotherapy and in combination with bevacizumab. Therefore, we will be initiating a phase III study this year in an all-comers population in combination with VEGF.

Dose optimization continues for Temab-A in non-small cell lung cancer, where both EGFR wild type and EGFR mutant populations are being evaluated. Data from these studies will be available next year, informing our phase III path. In pancreatic cancer, Temab-A will be studied in combination with different regimens of chemotherapy. Later this year, data is anticipated in head and neck and ovarian cancer. We're making very good progress across several tumor types with Temab-A. We recently announced a deal with RemeGen for a PD-1/VEGF antibody. This molecule will be a nice complement to our ADC portfolio and has demonstrated competitive monotherapy efficacy as well as encouraging early data in ADC and chemo combinations. Our strategy is to initially combine this PD-1/VEGF with Temab-A in lung and colorectal, with other tumor types also under consideration.

These novel combinations have the potential to drive faster disease control, longer duration, and ultimately longer survival. In small cell lung cancer, a phase II trial for ABBV-706 in combination with atezolizumab recently began in treatment-naïve patients. A phase III study in second-line+ patients is also planned to initiate this year. In hematologic malignancies, the regulatory application for PVEK and blastic plasmacytoid dendritic cell neoplasm is under review with the FDA. An approval decision is anticipated later this year. Enrollment is projected to complete this quarter in our phase III trial evaluating monotherapy Etentamig in third-line+ multiple myeloma, with an objective response rate readout anticipated in the second half of this year. A phase II study of Etentamig plus daratumumab in front-line transplant ineligible patients was recently initiated. Additionally, a phase III study in second-line evaluating Etentamig with pomalidomide is expected to begin by early 2027.

Turning to neuroscience, in our movement disorder programs, an approval decision is anticipated in the third quarter for Tavapadon in Parkinson's disease. As a highly effective treatment for motor symptoms with low rates of dyskinesia, edema, sedation, and impulse control disorder, Tavapadon has the potential to be an important new treatment option, both as a monotherapy and as an adjunct to levodopa/carbidopa in patients still experiencing motor fluctuations. This year, a phase II study assessing Gemibot A in essential tremor will begin. Essential tremor is the most common movement disorder and an area with considerable need for effective and tolerable therapies. Unlike most patients with spasticity, patients with essential tremor typically have normal strength. Therefore, it is important that neighboring muscles are not inadvertently affected. This is by toxin diffusion.

Our new toxin is highly potent and has the potential for less spread to neighboring muscles, making it well-suited for treating essential tremor. In migraine, the phase III Eclipse trial evaluating Qulipta for acute treatment of migraine met its primary and key secondary endpoints, with Qulipta demonstrating superiority over placebo. Approval decisions in Europe and Japan are expected later this year. Our phase III studies evaluating Qulipta and Ubrelvy for menstrual migraine prevention are progressing well, with data from both trials expected in the second half of this year. Regulatory submission for Qulipta in Europe is anticipated later this year and for Ubrelvy in the U.S. in 2027. Menstrual migraine is a distinct subtype affecting nearly 15% of women with migraine. Attacks are considered more difficult to treat, more disabling, last longer, and have a higher tendency to recur.

There is a clear need for more effective treatment for this form of migraine. In the area of psychiatry, several readouts and study starts are planned this year across multiple programs. Our dose escalation study continues for Emraclidine in schizophrenia, with the 75 mg dose cleared and 100 mg currently being assessed. Further dose escalation is planned until a tolerability threshold is reached. Based on the favorable profile with 75 mg and the potential to move the dose even higher, Emraclidine will be moving forward in development as both a monotherapy and adjunct of treatment for schizophrenia. Dose ranging in elderly patients is also ongoing, which will support development plans in psychosis related to Alzheimer's, Parkinson's, and dementia with Lewy bodies. Phase 2 studies across all indications will begin after the completion of multiple ascending dose evaluation.

The phase II study for ABBV-932 in bipolar depression is nearing completion, and data is expected around the middle of this year. Data from the generalized anxiety disorder phase II is anticipated in the early part of 2027. This year, data from 2 additional cohorts from a phase II study evaluating Bretisilocin in major depressive disorder will help inform our development strategy and phase III plans. This short-acting psychedelic demonstrated very strong and durable efficacy in a preliminary phase II study. Based on this emerging profile, Bretisilocin has the potential to become a groundbreaking new treatment in depression. Moving to other areas of our pipeline. In obesity, data will be available this year from 2 ongoing phase I studies evaluating our long-acting amylin analog, ABBV-295, in overweight and obese patients. Results will guide our phase II program, which is expected to begin near the end of this year.

In aesthetics, the regulatory application for our rapid onset short-acting toxin, Trenibot E, is under review, and an approval decision is expected this year. To summarize, we continue to demonstrate significant progress across all stages of our pipeline and anticipate many important regulatory and clinical milestones in 2026. With that, I'll turn the call over to Scott.

Thank you, Roopal. Starting with our fourth quarter results, we reported adjusted earnings per share of $2.71, which is $0.08 above our guidance midpoint. These results include a $0.71 unfavorable impact from acquired IPR&D expense. Total net revenues were $16.6 billion, reflecting robust growth of 10%, including a 0.5% favorable impact from foreign exchange. Our ex-Humira growth platform delivered reported growth of 14.5%, once again exceeding our expectations. Adjusted gross margin was 83.6% of sales, adjusted R&D expense was 15.4% of sales, and adjusted SG&A expense was 22.3% of sales.

The adjusted operating margin was 38.3% of sales, which included a 7.6% unfavorable impact from acquired IPR&D expense. Net interest expense was $655 million. The adjusted tax rate was 18.3%, reflecting the lower deductibility of the acquired IPR&D expense this quarter. Turning to our financial outlook for 2026, our full-year adjusted earnings per share guidance is between $14.37 and $14.57. Please note that this guidance does not include an estimate for acquired IPR&D expense that may be incurred throughout the year. We expect total net revenues of approximately $67 billion, reflecting growth of 9.5%. At current rates, we expect foreign exchange to have a roughly 0.8% favorable impact on full-year sales growth. This revenue forecast contemplates the following approximate assumptions for select key products and therapeutic areas.

We expect global immunology sales of $34.5 billion, including Skyrizi revenue of $21.5 billion, driven by market growth and share gains across the psoriatic and IBD indications, Rinvoq revenue of $10.1 billion, with growth across rheum, derm, and gastro indications, and Humira total revenue of $2.9 billion, reflecting continued biosimilar impact. For neuroscience, we expect global sales of $12.5 billion, reflecting robust double-digit growth. This includes Vraylar revenue of $4 billion, driven by continued strong prescription demand, Botox therapeutic sales of $4.1 billion, with strong performance across indications, total oral CGRP revenue of $2.9 billion, supported by market growth and share gains, and Vyalev sales of $1 billion, demonstrating the brand's impressive launch and multi-billion dollar potential.

In oncology, we expect global sales of $6.5 billion, including Imbruvica revenue of $2.2 billion, reflecting competitive headwinds and the impact of lower IRA-related pricing. Venclexta sales of $3 billion, which reflects continued strong demand. And Elahere revenue of $850 million. For aesthetics, we expect global sales of $5 billion. This includes Botox cosmetic revenue of $2.7 billion, reflecting modest market growth and relatively stable market share. And Juvéderm sales of $950 million, reflecting continued headwinds in key dermal filler markets. Moving to the P&L for 2026, we are forecasting full-year adjusted gross margin above 84% of sales, adjusted R&D expense of approximately $9.7 billion, and adjusted SG&A expense of approximately $14.2 billion. We also expect an adjusted operating margin ratio of approximately 48.5%, reflecting meaningful expansion compared to 2025. We expect adjusted net interest expense of approximately $2.8 billion, which includes anticipated refinancing.

We forecast our non-GAAP tax rate to be approximately 14%, reflecting a modest underlying improvement compared to 2025 due to recent tax law changes. Keep in mind that last year's non-GAAP tax rate of 18% included a 3% impact from acquired IPR&D expense. Finally, we expect our share count to be roughly in line with 2025. Turning to the first quarter, we anticipate net revenues of approximately $14.7 billion. At current rates, we expect foreign exchange to have a roughly 2% favorable impact on sales growth. This revenue forecast considers the following approximate assumptions for key products and selected therapeutic areas. We expect global immunology sales to approach $7.1 billion, including Skyrizi sales of $4.4 billion and Rinvoq revenue of $2 billion, reflecting typical seasonality as well as an unfavorable price comparison for Rinvoq related to timing of prior year rebates in the first half.

We also anticipate neuroscience revenue of $2.8 billion, oncology sales of $1.6 billion, and aesthetics revenue of $1.2 billion, reflecting growth of roughly 9%, including a favorable comparison as we lap one-time price headwinds associated with changes to the Allē program. We are forecasting an adjusted operating margin ratio of roughly 46% and model a non-GAAP tax rate of approximately 13.7%. We expect adjusted earnings per share between $2.97-$3.01. This guidance does not include acquired IPR&D expense that may be incurred in the quarter. Finally, AbbVie's robust business performance continues to support our capital allocation priorities. Our cash balance at the end of December was approximately $5.2 billion, and we expect to generate free cash flow of approximately $18.5 billion in 2026, which includes roughly $3.5 billion of Skyrizi royalty payments.

This free cash flow will support a strong and growing quarterly dividend, which we have increased by more than 330% since inception, as well as investments in business development to further enhance our portfolio. In closing, we are pleased with AbbVie's results in 2025, and our financial outlook remains very strong. We have significant momentum across our diverse portfolio and are well-positioned to deliver strong results in 2026 and beyond. With that, I'll turn the call back over to Liz.