AbbVie Inc. (ABBV) September 2026 Conference Transcript

Awesome. Thank you very much for joining us today. My name is Mohit Bansal. I'm one of the biotech and pharma allies here at Wells Fargo. And I'm joined by AbbVie management team with us today. So from my left to right, we have Rupal Tucker. He's the EVP and head of research and chief scientific officer at AbbVie. We have Jeff Stewart. He's the EVP and chief commercial officer at AbbVie. And Scott Renz, he's the CFO of the company. Thank you very much team AbbVie for joining us today. Thanks for having us. So exciting times at AbbVie. I don't know, I mean, I have leaders from three different sections of AbbVie, so I'll probably have 10,000 questions in 35 minutes. So maybe I'll start with you, Jeff, right? I mean, I'm sure there are a lot of questions around immunology. You have done a tremendous job with Skyrisi and Reinvoke. We don't even talk about Himara anymore. so you have consistently outperformed the consensus expectations for Skyrazy and Rinvog where you sit today how much under appreciation for the franchise still is some of that pipeline as well so and then what cards will turn over in next two to five years that will make you like yeah thank you very much no We're very, very pleased with the historical performance and the visibility we have going forward.

And I think there's multiple factors in there, and I'll run through them. I think the first is, obviously, the markets that we play in are very substantial, and they're marked with very, very nice growth. I mean, we have markets like, you know, IBD or atopic dermatitis or PSA. These markets grow anywhere from mid-single digits to high single digits, and atopic dermatitis, which is basically the most underdeveloped market, is growing well into the double digits. So the markets themselves are very, very nice areas to play in. And what we see that helps drive that market growth, and we've talked about this over time, is as basically innovation comes into these markets, time expands, people live with their conditions, you see line of therapy expansion. So what that does is it sets up basically these categories for multiple assets that can start to play across sub-segments, et cetera. So the markets are very, very nice. The other thing that we look at, and Skyriszy and Renvoke now are in their eighth year of growth, we see that we still have significant market share gains that will accrue to the franchise because we watch the distinction between our in-play share and our total market share. And as long as that in-play share, and for most of our categories, it's still well above our TRX share, we see forward market share growth in these categories. And then we have several categories of our catalysts before we get to the pipeline. And some of them are we're really, really close on an innovative approach for the sub-Q induction for Crohn's for SkyRizzy. And we're exceptionally excited about the quality of that data, that affirmed data. we'll see that later in the in the quarter um and we also have the next generation of indications for renvoke which are very very positive so we obviously have already launched uh giant cell arteritis that's helping us drive our business in rheumatology but in durham we're going to have vitiligo alopecia we'll have readouts that rupel can talk about for hs on two assets renvoke and ludicizumab and so when you look at all of those we're we're very very encouraged i would would take note that you may remember on the last earning calls we've gotten more incrementally excited about the vitiligo and alopecia data and we upped our long-term guidance to over three billion for just those assets themselves so we see very very nice visibility to the momentum we're in the right markets and certainly we know that investors are starting to see a lot more visibility to what comes next this could be the combination platform i'm sure we'll talk about, you know, Skyrizi plus the super potent alpha 4 beta 7, the TL1A combinations, and so there's many, many catalysts that will come here for immunology as we move forward.

Got it. No, so this is very helpful. Before we get there, I think the most talked about aspect of IBD market right now is the competition a little bit here. uh uh what are you seeing in the marketplace right now and like are investors overestimating the competition versus like the growth challenges there number one and number two uh bring in the sub-q uh uh well sub-q uh crones uh induction regimen in there and how does it help sure and we see that the you know the competition uh across immunology and we've seen ibd has played out largely as we predicted we had predicted that you know competitive il 23s would would take some share

but the category itself would grow and that's actually what we've seen play out we continue have an exceptional position right now with ivy only in the front line whereas the competitor is mostly accruing sales in the second line where we also play with renvoke so we have a very stable and strong position. To your point, we are very, very excited that we will be able to basically bring the sub-Q for Crohn's in the fourth quarter. That's when we anticipate the approval. The one thing that surprised us, which I think is very positive for investors, is certainly positive for our commercial and our R&D teams, is the quality of our sub-Q data. It's very exceptional. In fact, I would say we haven't seen anything like this just in terms of induction, whether it was a sub-Q or an IV, it's exceptional data. This is the affirmed data. And there'll be more data releases pending about that data. But we're very, very excited about it. We've released the top line. So we see tremendous endoscopic healing. We haven't seen anything match it. It's better than our own IV.

And so this catalyst that you've talked about, certainly we believe that we have a very strong position in IBD, but this new data will help us accelerate our position over time got it very helpful I want to touch upon the like in immunology I want to touch upon your platform study here as well so as the first data set from these studies emerge like what signals are you looking for we should be looking for from these combinations that will make us comfortable that you know Skyrizy has a long tail or SkyG plus has a long tail going forward.

Yeah, thanks. I'll build on some of the comments that Jeff has already So a few things. One is that endoscopic remission and healing. That is an objective marker, and that's one that we like to look at in phase two to predict outcomes in the future. And what we saw there in the early data in combination with our proprietary alpha 4 beta 7 is a doubling of what SkyRISI delivered in the same study. So this is not cross-trial comparisons. This is within trial comparisons where we had mono-mono combo side by side. And what we've provided publicly is about two-thirds of the data of the patient flow. Later this year, we're hoping to get it to the conferences, the GI conferences, and that'll be around 80% of the data, and next year will be 100%. But that doubling is very important while we maintain safety and taking the two together down the road as we get into phase three and potential for labeling, you could have a very nice asset that doesn't have a boxed warning. Got it. And what we're doing now in parallel as that data flows is generating an even a larger platform which will now enroll SkyRISI plus our proprietary alpha 4 beta 7 and in combination with our extended duration TL1A. And that will be in Crohn's and ulcerative colitis. so we'll monitor that data over time having interim looks to see if we can ungate moving into phase 3 even faster than waiting for the full data set but we are very encouraged with what we see today and one thing that we want to look for with the alpha 4 beta 7 is does a little bit higher dose drive even higher efficacy particularly on the endoscopic side so that's going to be the most critical things that we'll be looking at got it so I mean every is one company where sales team and R&D team actually work well together like they all say it

but again you both have input there so for you Jeff what would be the most important aspect for this combinations because you want to move these combinations in first line like get go just in IBD you want to treat these patients with the best drug available what do you want to see as a commercial leader yeah and I think it I'll base basically build on what Rupal has said if you think of the transformation that add these lead in IBD mm-hmm with both Skyrisi and Rinvok the first was we anticipated with modern clinical design that the that the market value driver would move from sort of clinical remission or signs and symptoms like how are you feeling with your gut to objective endpoints this endoscopic remission this is the deep remission and that's exactly what we help drive with the gastroenterology community of course and so if you think back on the history which wasn't that long ago we did a definitive trial and it was skyrizzy versus stolara with the primary endpoint of endoscopic remission this was the sequence study right and was a doubling of effect and the community understood that look if i can get that bowel that healing under control i'm going to get differential outcomes so that market value driver shifted very very fast so as we work to your point with rupal's team to design these pivotal trials for the combination platform you know we need to see transformational efficacy and the great news is we've seen it so you think skyrizzy doubled the standard of care And in this combination platform with the super potent Alpha 4 Beta 7, we've doubled it again. That's a very different dynamic than we've seen in other approaches. We think it's going to be a market-leading approach. So that's critical. So how we design those endpoints, how we can drive that change of standard of care. The second key part is it's got to be convenient, right? We need to be able to not have two different shots or something that's awkward for the community, but something that's simple a combination asset in a simple delivery whether that's the on body device or an injection we need to make sure it's simple clean and we can really drive that change i think the second part which we've been very successful historically is that you don't ride just one asset like we've we've done remarkable things with in many different categories like in PSA with Skyrisi and Renvoke. We think with HS, it might be Ludi and Renvoke, where we can take two assets and co-position them effectively within our sales teams. And so we would like, and we work with Rupal on this, to say, it's not the Alpha 4, Beta 7 combo versus the TL1A. Of course, we always let the science drive it, but we actually think we may be able to co-position them in different segments. One may be better in UC than Crohn's. So how do we bring that to the market? So those are things that Rupal and I and Scott we talk about every day in terms of how we want that pipeline to develop.

That's a nice segue into a question for Scott basically so I mean obviously we all have known AVV since 2013 that's when it became AVV right yes so I think for many years you had your back against your wall against the wall trying to replace Himara and that's why there was a lot more pressure to do external deals at this point when you think about about strategically internal versus external. How do you think about the internal pipeline plus external and how do you allocate capital on the basis of that?

Sure, I think you're exactly right. I think we spent a lot of time leading into the Humira loss of exclusivity event, thinking about what the future looked like immediately after, but also beyond that. So when we look at what we've done over the last couple of years, we've done roughly 30 transactions, spent about $20 billion. Half of that was with respect to the Apogee transaction. That means we've done almost 30 transactions with another $10 billion on smaller, earlier-stage things. And so it's that combination of making sure we're bringing in external innovation that is well-matched. So, for instance, the combination studies we're doing with SkyRizzy, that's in combination with the TL1A that we brought in. And we looked at that, and we were very specific what we were looking for, making sure we had something that was well-matched for that combination. So I would say we're looking at the assets, we're making sure we have everything that we need to build us and drive that growth going forward, and at the same time, making sure we're funding it appropriately. From an R&D perspective, you know, since 2022, we've increased our R&D spend by roughly $3.5 billion, and so we're almost at $10 billion this year from an R&D spend. And so making sure we're funding everything that we have internally, and we brought a lot of great things internally you know things like ludicizumab um vinclexta renvok of course but also when we're bringing things in we're also spending a lot of time with them skyrizzy is a great example of something that obviously was you know came in it was it was a well-formed asset we knew a lot about it but the team did a great job of maximizing that not only from the final development and bringing it to market but also looking at the head-to-head studies and things of those natures so it's going to continue to be that combination we have a strong backbone I think we will something that we're very proud of where we are today with a pipeline and certainly you know that one member will continue but we'll continue to augment that with with the right areas and just looking at things in our core areas and adjacencies and you know we just you know obviously with Apigee it's a little bit later we go late stage early stage it's focusing on the right assets that that we can make a meaningful difference with so it's very clear that you're not buying revenues you are basically like it's not the elegant like deal you are doing like phase two-ish deals so is that the strategy here like phase one phase two looking at 2035 and beyond like how are you thinking about that well i would say that you know we are we're we are fortunate to be in the position we're in we have a strong balance sheet uh we've got the financial capacity to to do a number of things we also have a very strong revenue growth profile we've talked about our high single digit cager through the decade we've got growth well into the next decade really the first LOE that we face isn't until 2030 with Raylar. So we have a very strong runway. And so we don't need revenue, but certainly if it's something that we see and something that we're interested in, we have the ability to go after that revenue if it makes sense with our overall strategy. So that's why I would say it's a little bit, as I said, good fortune. We can look late stage. We can look early stage. Revenue is fine, but it's not something that we are desperate to get.

Got it. completely make sense. So Rupal, I want to touch upon HS, two readouts coming this year. Talk a little bit about, you know, how comfortable do you feel into those readouts, especially ludicizumab data. I mean, there have been some, you know, placebo responses which are really high lately, so talk a little bit about that and your comfort level around those phase three.

Yeah, a couple things to mention. So one, as we've talked about a theme here today, it's good to have multiple assets in a disease area that's under penetrating and growing and HS is is such an example so we have ludicizumab as a alpha 1 beta going forward saw strong data in phase 2 positioning there would likely be in earlier lines and that's the population that's being enrolled those are naive to biologics but we're also enrolling patients that have already seen and failed biologics like anti-TNFs and 17 and for Renvoke it is a patient population that is already failed the biologic so similar positioning that we see with Skyrisi and Renvoke and IBD and in PSA and that is a very good I would say position if both are successful and in R&D their goal is to do our best to make sure these trials are successful and placebo is is a is a consideration particularly in HS in immunology because the disease can relapse and remit and placebo can go up and down so because we have naive patients coming in the lutey trial we set the endpoint as a more stringent high score 75 traditionally high score 50 has been used we set that precedent years ago with Humira right so that's one aspect with a tougher to treat patient population that's in the Rinvok study we could anticipate maybe less bouncing up of placebo so we see a high score 50 there but that one is because we have a hundred percent treatment failure so those are two approaches that we're using to do our best to de-risk and make sure placebo is tamed but we agree with you and that's something that we had to consider early in the days of design another important factor is training of the sites and how they identify the lesions and count the lesions over time so that's been implemented as well and we'll see data later this year.

Got it, very helpful. I have so many immunology questions but I want to go to oncology first before we have, if you have time we'll go there. I do want to talk about Apogee though. So with the data for BCMA last week, I mean can you talk a little bit about that? I mean you are not the first to market there but at the same time you have a unique approach and the data look pretty interesting for immunotherapy so talk a little bit about where do you see it.

Yeah, and that's another one where we had an early look at the molecular design. The strategy there was high affinity for BCMA and low affinity for CD3. And the thinking was, over time, safety, tolerability, convenience are going to be critical drivers if you're coming later to a market, which we still feel from the TCE standpoint is underpenetrated and also the observation that the market is largely in the community outside of academic centers which would have more capabilities to deliver assets that are maybe a little more challenging or labor-intensive including CAR-T. So our focus was how do we think about these community practitioners and how do we deliver an asset for them to democratize this further so patients can have better access so what we observed was high response rates and in fact high response rates strong PFS and even OS trend that the data monitoring community asked us to stop the study right and we stopped it early after only 11 months of median follow-up which is quite early and despite that strong hazard ratio for PFS and even OS both are under 0.5 mm-hmm and that's important but really what's most critical is that this is delivered with a single step-up dose and in total only 13 injections in a year because you're giving it every month if you look at competitors it's double of that in the base base best case and up to 50 or 54 injections in a year so it's very labor-intensive for the center that's why the communities don't use it community practitioners don't use these very much and it's very challenging for the patient to keep coming to the hospital mm-hmm so that's a very important factor and this was the regimen that we used was every other month full dose out of the gate after a single step up CRS rates were under 30 were 30 percent or less in grade two single digits competitors are up to 60 percent CRS and double digit teens for grade two which can be challenging for the community serious infections are also problematic and challenge community use and we see that as grade three and above under 30% or so competitors are in the 40% range or even higher so taken all together even if you're coming in a little bit late I think this is a very meaningful option for a patient given the profile that we're showing and and more to come at the IMS meeting later

this year and and jeff you may want to comment on the on the market because i think there is a strong commercial opportunity here yeah i would say to to reiterate what rupal's point is this this is an exceptional product i mean if one way you look askance and say abby's laid maybe it's the fourth or fifth entrant that's not the way we look at it at all of course it is our internal view right when we look at the market we're like listen based on this design that's that gentle cd3 this is the first second generation bispecific BCMA it clearly is and the data has shown this so you get what you expect which is tremendous efficacy but then you get this triple play that's very different than the first generations okay so lower CRS lower ICANS you have lower infection rates okay this is this is impressive and it's very convenient one step up dose when you look at that we think there's likely we don't know for sure there may be no hospitalization required so when you look at the market structure even though it looks like a category that's been there for a while it's very under penetrated and in the community 75 to 80 percent where the where the myeloma is they don't really have access to these car t's or these bispecifics so we think it's an exceptional product uh and we think it's the tip of the spear for what we have behind it which are two tri-specifics so Mohit to your point uh you know we we are gonna play in myeloma and we're gonna play very very big and intent to make with this you know unblinding uh you know we're looking at a very rapid filing and entry and we know hematology we may not be in myeloma but we've played very effectively as the leader uh with the hematologists around the world so uh it's a very underappreciated asset I think even in your own note recently said this may be a sleeper I would say that's that's that's what we believe so yeah it's an exciting and underappreciated a catalyst for the company we hope it'll wake up quickly right to build on Jeff's point we will be engaging with regulators about

labeling and one discussion big discussion topic for us is you know around REMS and hospitalization and to date within the program including this phase three readout we've safely dosed I think a hundred patients or so as an outpatient not not in hospital so that will build on the profile that Jeff is describing now hematology has so many examples where not the best drug wins it is like your drug is very good but at the same time convenience and ease of use is also very important I mean we have limit versus yeah okay for sure very helpful thank you for that and then let's just talk a little bit about

neuroscience as well right I mean psychedelics so you were among the among the big companies you were the first mover in there and now Lilly has bought a company and there is a lot of excitement around that psychedelic space regulatory changes as well talk a little bit about where you stand with Gilgamesh and what could we learn here in the next six to 12 months that will give you a lot?

Yeah, this is Bretta Silicin and similar to other assets it started with the profile that we we saw we saw deep durable basically remission in major depression in the early study and there'll be a couple more or another readout this year but what we saw already we liked and that was a potential go-forward dose for acute treatment along with another active arm both arms did well but the the go-forward dose did substantially better also the treatment experience time of around two hours we saw that very favorably as where as well compared to other competitors that may be six hours or plus also the psychedelic experience was well tolerated by the patients we didn't see any distress some cause a loss of consciousness can cause that causes distress for the for the site so we wanted something friendly for the patient and for the site for so for two hours deep responses and potential for a longer duration beyond let's say weekly dosing right can you push out to every month or beyond we see that potential as well and that's linked to the mechanism where it's a 5-ht2a not 5-ht2b where many of the natural or other assets bind to that receptor which is a potential safety issue from a cardiac valve and fibrosis standpoint. You recall years ago, those of you that have been monitoring FENFEN, part of the issue was a 5-HT2B agonism that resulted in those cardiovascular problems. So this asset differentiates in a multifaceted way that has us very excited and hopefully we can serve lots and lots of patients, but also a very excited market that we can enter. We know the Vralar space. We know depression. So we'll see some more data this year. We're currently planning an acute phase three, phase two to look at dose and durability and looking to treat patients over time, and also phase two in PTSD as well.

Got it. Very helpful. So I want to come back to oncology, solid tumor oncology. So this is where I don't think you get a lot of credit for, but when you look past the first asset, then you look at the second asset, the second generation ADCs are looking pretty interesting. So can you say six, so that is pretty interesting.

So talk a little bit about where you are most excited about in your oncology franchise and get which one is the sleeper there sure maybe they all are we're talking about it so TMAB a of course is our lead asset of follow-on to Amaryllis which is currently on market for lung these bind to see met and we think of these ADC's first from the construct how how do we like the warhead we have a topo isomerase inhibitor as a warhead we We have a very stable linker. We are very good at making antibodies. In the CMET area, it's a very strongly antagonistic antibody, so it blocks signaling, it blocks growth. So it's important when you pick the marker you go after that blocking it is helpful and that it's not expressed at high levels on normal tissue. So that is your CMET story. That's also a CES-6 story, FR-alpha, which we have a novel asset that's entered the clinic to follow Eliheer, which uses the same linker and warhead strategy as TMAB-A, where we're seeing strong data in lung and colon cancer and ovarian cancer. We're repeating that with FR-alpha with the topo warhead. That's 901. And then we take our abilities to make bispecifics like we do with ludicizimib, and we've created 969, which is PSMA steep, same linker, same topo warhead, that's showing very strong data on prostate cancer, which is now moving into phase three. And if you have these ADCs that are behaving well, which is what we've observed based on how we've built them, and going after tumor targets that are specifically expressed on tumor, then that allows you to have a strong benefit-risk balance, and then you layer on top of that a biomarker approach so you can have individualized care, that opens up a tremendous amount of opportunities in future growth. And then layer on a KRAS molecule that we have, other T-cell engagers, DLL3 is one that could work in small cell lung cancer, and this recent partnership with Remagen with the PD-1 VEGF, which we're very excited about that, and that data will be shared I think this weekend at World Lung creates an additional combination approach for all these so that allows us to have a very differentiated portfolio of assets across a variety of tumor types with high unmet need and really limited innovation to date.

Got it, very helpful. So Scott, taking all of this, when you think about 2035 and beyond, the big, like now between SkyZ and Renework, arguably it will be a 50 billion franchise or whatever. When you think about replacing that, so you have Apogee in there, you have some of the assets that Drupal talked about here, next generation with SkyZ plus something. Where you are in terms of, you know, thinking through 2040 and beyond and like where do you think the incremental BD dollar would go in terms of either therapeutic area or how you are thinking about all that?

Well, I think it starts with what's the assets that are out there. So I think, you know, for anything we do from our financial analysis, a strategic fit, it's looking at our core areas, the adjacencies, areas that we that we see the opportunity and making sure that we understand the assets. So sometimes it's just a matter of the assets emerging in the right place and getting that conviction. It's also making sure we have everything we need to complement, to replace, and to really even improve what we're working on. So I think you have to think about it from an asset perspective, but certainly areas that we are strong in and have a level of expertise, that's where we think about it. And I think, you know, looking at where the asset sits in its life cycle, as I said, if it's early stage, later stage, even on market, you know, we will look at that as long as we can find the right profile. And, you know, the last aspect is, you know, we have the capacity to do what we need to do and do it appropriately. We'll do it in a measured, methodical way. We're not going to chase things that we shouldn't be chasing. But we have a very, I would say, a very diligent, you know, robust process where we have a lot of internal debate, even with, you know, something like our recent acquisition. that's that was an asset that we've been looking at for the last couple of years right you know and so it's something you know we follow a lot of things we're looking for for the right fit and that you know hit the market so you know we'll continue to to seek where we can find that opportunity but you're exactly right looking at the window you know to the the back half of the next decade 2040 we've spent a lot of time and we're getting ahead of that by thinking about it now and a number of the things that ruple spoke about are going to be you know things that are going to be helping us fill that growth need in the long, long term.

Got it. Helpful. So one last question, whichever order you want to take it. Fast forward one year. I hope you are sitting here. I hope I am sitting here. September 8th to 10th, Wells Fargo Conference. What would make you look back at the year and say, boy, it was a great year for us?

Well, I think it's the continued execution that Jeff talked about in immunology on market and the strength there, and then with more maturity of the pipeline, and it would be terrific to be able to move the PD-1 VEGF into phase three, many of the other ADCs that I mentioned moving into phase three, favorable outcomes in HS for ludicizumab and RINVOC. I think that would be very exciting. And then favorable movement into, I would say, psychiatry with bretosilicin and even imraclidine. We didn't talk about that today, but we cleared the 100 milligram dose and now we're at 150 milligrams. And recall that was studied originally at 30 milligrams. So there's other spaces. And then I would say rapid execution of the atopic derm trials with Zumi from Apogee. And then looking at combos with the extended duration TSLP, looking to create a new pillar for us in respiratory with asthma and COPD. I think much of this can happen in several months, and we can look back and say, yes, it was a very strong year for us. Got it. Anything to add?

I agree with Rupal.

That's perfect. So with that high note, on that high note, thank you very much for joining us, and all the best. Thank you, Mohit.