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AbbVie Reports First-Quarter 2013 Financial Results

NORTH CHICAGO, Ill., April 26, 2013 /PRNewswire/ -- AbbVie (NYSE: ABBV) today announced financial results for the first quarter ended March 31, 2013.

"In our first quarter as an independent company, AbbVie delivered earnings per share above our original guidance," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.  "The business generated strong sales growth despite loss of exclusivity in our lipid franchise, which speaks to the foundation of AbbVie's product portfolio.  Additionally, we advanced our promising pipeline during the first quarter, with continued progress across our mid- and late-stage development programs."

First-Quarter Results

  • Worldwide sales were $4.329 billion in the first quarter, up 3.7 percent.  On an operational basis, sales increased 5.1 percent, excluding a 1.4 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 8.6 percent in the first quarter.  
  • Sales growth was driven by the continued strength of HUMIRA, both in the United States and internationally.  Global HUMIRA sales increased 16.0 percent, or 17.3 percent on an operational basis, excluding the impact of foreign exchange rate fluctuations.  U.S. HUMIRA sales grew 23.7 percent due to growth in dermatology and gastroenterology, as well as the global launch of the ulcerative colitis indication. 
  • First-quarter adjusted gross margin ratio was 76.2 percent, as expected, excluding intangible asset amortization and other specified items.  This reflects both the loss of exclusivity within our lipid franchise, as well as the effect of unfavorable foreign exchange rate fluctuations on the ratio.  The gross margin ratio under U.S. generally accepted accounting principles (GAAP) was 73.4 percent.
  • Adjusted SG&A was 27.9 percent of sales in the first quarter, reflecting continued investment in our growth brands and the incremental costs of becoming an independent company.  On a GAAP basis, SG&A was 28.6 percent of sales.
  • Adjusted R&D was 14.6 percent of sales in the first 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 14.6 percent of sales.
  • Net interest expense was $66 million in the first quarter, and adjusted other income was $18 million.  On a GAAP basis, other income was $15 million.
  • The adjusted tax rate was 22.2 percent in the quarter.  On a GAAP basis, the first-quarter tax rate was 21.9 percent.
  • First-quarter diluted earnings per share were $0.60 on a GAAP basis.  Adjusted diluted earnings per share, excluding intangible asset amortization expense and other specified items, were $0.68, above the company's previous guidance range.  
  • Key Events from the First Quarter

  • Earlier this week, AbbVie presented new data from its rapidly-advancing hepatitis C program at the annual meeting of the European Association for the Study of the Liver (EASL).  New data from the Phase 2b AVIATOR study show SVR rates of greater than 90 percent in naive and prior null responder patients treated with AbbVie's 3-DAA+RBV regimen, across HCV subtype, IL28B genotype, baseline HCV-RNA or severity of fibrosis.  We expect our ongoing Phase 3 studies to begin to read out later this year and into early 2014, supporting mid-2014 registration submissions.
  • Initiated Phase 2b studies of elagolix in uterine fibroids.  Elagolix is currently in Phase 3 development for endometriosis. Both conditions are prevalent with few treatment options.
  • Initiated additional Phase 2b studies of ABT-719, our novel investigational compound for the prevention of acute kidney injury.  We expect ABT-719 to advance into Phase 3 studies in early 2014.
  • ABT-199, our next-generation BcL-2 inhibitor in development in partnership with Roche/Genentech, was featured in a special symposium at the American Association for Cancer Research (AACR) annual meeting earlier this month.  AbbVie recently proposed an amended study protocol for ABT-199 in chronic lymphocytic leukemia.  Upon approval by the U.S. Food and Drug Administration (FDA), dose escalation and new patient recruitment will resume.
  • AbbVie announced long-term, patient-reported health outcomes data for the use of HUMIRA in patients with pediatric Crohn's disease.  Results from the Phase 3 IMAgINE-1 trial demonstrated improvements in health-related quality of life measures for patients aged 6 to 17 years with severe active Crohn's disease, taking HUMIRA, as well as the work productivity of their caregivers throughout the 52-week study.
  • Received FDA approval for new Creon 36,000 lipase-unit capsules for patients with exocrine pancreatic insufficiency.  Creon 36,000 is the highest dose of pancreatic therapy (PERT) currently available for patients.
  • On February 15, the board of directors of AbbVie declared a quarterly cash dividend of $0.40 per share, payable May 15, 2013 to stockholders of record at the close of business on April 15, 2013.  AbbVie was named to the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.  AbbVie was included as a result of the Index's change in its treatment of spin-off companies.
  • AbbVie's board authorized a share repurchase program of up to $1.5 billion of the company's outstanding common stock.  The share repurchase authorization is expected to be completed over a multi-year period and purchases may be made from time to time in management's discretion.  The share repurchase authorization permits shares to be repurchased in open market or private transactions, has no time limit and may be discontinued at any time.
  • Full-Year 2013 OutlookAbbVie is confirming its diluted earnings-per-share guidance for the full-year 2013 of $2.66 to $2.76 on a GAAP basis, or $3.03 to $3.13 on an adjusted basis.  The company's 2013 adjusted diluted earnings-per-share guidance excludes $0.37 per share of intangible asset amortization expense and other specified items, primarily associated with certain separation-related costs and previously announced ongoing restructuring activities.  The company will further refine the forecast for specified items, including separation-related costs, as the year progresses.

    About AbbVieAbbVie 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  Follow @abbvie on Twitter or view careers on our Facebook or LinkedIn page.

    Conference CallAbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss our first-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;  John Leonard, senior vice president and chief scientific officer;  and Larry Peepo, vice president of investor relations.  The call will be webcast through AbbVie's Investor Relations Web site at  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 StatementsSome 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 our 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.AbbVie Inc.Key Product SalesQuarter Ended March 31, 2013(Unaudited)% Change vs. 1Q12Sales (in millions)InternationalTotalU.S.Int'l.TotalU.S.OperationalReportedOperationalReportedTOTAL SALES$2,122$2,207$4,329(0.4%)10.7%8.0%5.1%3.7%Humira












































































    8.3Note: "Operational" growth reflects percentage change over the prior year excluding the impact of exchange rate fluctuations.n/m = not meaningfuln/a = not applicable AbbVie Inc.Consolidated Statements of Earnings Quarters Ended March 31, 2013 and 2012(Unaudited) (In millions, except per share data)20132012Net sales

    $4,329$4,173Cost of products sold

    1,1531,156Selling, general and administrative

    1,2371,247Research and development

    634642Acquired in-process research and development

    --150Total operating cost and expenses

    3,0243,195Operating earnings

    1,305978Interest expense, net

    66(1)Net foreign exchange (gain) loss

    1510Other (income) expense, net

    (15)(37)Earnings before income tax

    1,2391,006Income tax expense

    271123Net earnings

    $968$883Diluted earnings per share

    $0.60$0.56Average diluted shares outstanding1,6051,577Note:  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 ended March 31, 2012 was calculated using the shares distributed on January 1, 2013.AbbVie Inc.Reconciliation of GAAP Reported to Non-GAAP Adjusted InformationQuarter Ended March 31, 2013(Unaudited) (In millions, except per share data)1.

    Specified items impacted results as follows:1Q13Earnings



    EPSAs reported (GAAP)$1,239$968$0.60Adjusted for specified items:Intangible asset amortization



    0.06Separation costs





    0.01As adjusted (non-GAAP)$1,407$1,095$0.68Intangible 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. Restructuring/Other is primarily associated with previously announced restructuring activities and the impact of the Venezuelan currency devaluation.2.

    The impact of the specified items by line item was as follows:1Q13Cost of products sold



    Net foreign exchange

    (gain) loss

    Other (income)

    expense As reported (GAAP)$1,153$1,237$634$15($15) Adjusted for specified items: Intangible asset amortization





    -- Separation costs





    -- Restructuring/Other





    (3) As adjusted (non-GAAP)$1,032$1,206$632$4($18)3.

    The adjusted tax rate for the first quarter was 22.2 percent, as detailed below:1Q13Pre-tax



    Tax rateAs reported (GAAP)$1,239$27121.9%Specified items



    24.4%As adjusted (non-GAAP)$1,407$31222.2%

    SOURCE AbbVie
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