AbbVie Outlines Long-Term Strategic and Financial Objectives; Company Positioned for Strong Performance
- Company Expects to Deliver Double-Digit Adjusted Earnings-Per-Share (EPS) Growth on Average Through 2020
- Guides to Total Company Sales of Approximately $37 Billion in 2020
- Targeting 2020 Global HUMIRA Sales of More Than $18 Billion and IMBRUVICA Revenue of Approximately $5 Billion
- Expects Significant Margin Expansion; Targeting 2020 Operating Margin of Greater Than 50 Percent, with an Average of 100-200 Basis Points of Improvement Per Year
- On Track to Launch More Than 20 New Products or Indications Through 2020; Pipeline Has Potential to Deliver Nearly $30 Billion in Nominal Peak-Year Sales
- Committed to Returning Cash to Shareholders Through a Strong and Growing Dividend; Increases 2016 Dividend by 12 Percent, Beginning with Dividend Payable in February 2016
- Provides 2016 Adjusted EPS Guidance of $4.90 to $5.10 Reflecting Strong Double-Digit Growth Versus 2015
- Company to Host Comprehensive R&D Pipeline Review in Chicago During 2016 ASCO Meeting
NORTH CHICAGO, Illinois, Oct. 30, 2015 /PRNewswire/ -- AbbVie (NYSE:ABBV) today outlined the company's long-term strategic and financial objectives, including expectations for growth and other financial metrics over its long-range plan, through 2020.
"AbbVie is well-positioned to deliver strong top- and bottom-line performance through 2020 and beyond," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We have built a strong foundation, establishing growth platforms in some of the largest and most attractive market segments. And, we have a robust and compelling pipeline which will contribute significantly to our performance over our long-range-plan."
Based on continued strong performance from its existing portfolio of on-market products, including its flagship brands HUMIRA and IMBRUVICA, as well as growth from pipeline products, the company is providing guidance for total company sales of approximately $37 billion in 2020. This reflects roughly 10 percent sales growth, on average, over the five year period. This guidance includes estimated global HUMIRA sales of more than $18 billion in 2020, which the company believes appropriately captures the expected biosimilar dynamics globally. Additionally, the company is projecting its IMBRUVICA revenue will reach approximately $5 billion in 2020, driven by continued growth within the hematologic oncology market.
Since becoming independent, the company's significant focus on operating efficiencies has resulted in strong improvement of its gross and operating margin profiles. AbbVie is committed to driving continued expansion of operating margin, and is targeting an adjusted operating margin of greater than 50 percent by 2020, with an average of 100-200 basis points of improvement per year. In 2014, AbbVie's adjusted operating margin was 36.2 percent. Expansion will be driven primarily by ongoing cost savings initiatives, product mix and a reduction in royalty expense associated with HUMIRA in 2017 and 2018. Additionally, the company will drive continued sales leverage from a rapidly growing top-line.
"Our commitment to top-line growth and continued operating margin expansion will drive double-digit earnings-per-share growth on average through 2020," said Richard A. Gonzalez. "AbbVie's fundamental strategy is strong and we are well-positioned to deliver top-tier financial performance in the years to come."
Company Issues Strong Full-Year 2016 Outlook
AbbVie is issuing diluted earnings-per-share guidance for the full-year 2016 of $4.90 to $5.10 on an adjusted basis. This outlook represents strong double-digit growth versus 2015 and positions AbbVie to be among the industry leaders for growth again next year.
The company will quantify 2016 intangible asset amortization expense and other specified items at a future date.
Company Announces Plans to Host R&D Day
Through internal research and development efforts and strategic licensing and acquisition activities, the company has built a robust pipeline of medicines, with the potential to deliver nearly $30 billion in nominal sales by 2024 (excluding new HUMIRA indications, new IMBRUVICA indications and next-generation HCV, which are considered on-market products for this calculation).
The company is on track to launch more than 20 new products or indications through 2020, including seven approvals that will contribute in 2016 and beyond, including:
- IMBRUVICA indication expansion, including first-line chronic lymphocytic leukemia (CLL)
- HUMIRA indication expansion, including hidradenitis suppurativa (HS) and uveitis
- VIEKIRA approval for genotype 1B patients in Japan
- Venetoclax for relapsed/refractory CLL patients with the 17p genetic mutation
- Zinbryta for relapsing remitting multiple sclerosis
- Elotuzumab for relapsed/refractory multiple myeloma
AbbVie plans to host an R&D Pipeline Review in Chicago during the 2016 ASCO meeting. At the event, the company will provide comprehensive detail regarding its research and development programs, including its core programs in immunology, oncology, virology and neurology, in addition to its late stage efforts in women's health and renal disease, as well as the company's outlook on the commercial potential of these assets.
Company Declares 12 Percent Dividend Increase
AbbVie also announced today that its board declared an increase in the company's quarterly cash dividend from $0.51 per share to $0.57 per share beginning with the dividend payable on February 16, 2016 to shareholders of record as of January 15, 2016. This reflects an increase of approximately 12 percent, continuing AbbVie's strong commitment to returning cash to shareholders through a growing dividend. Since becoming an independent company in 2013, AbbVie has increased its dividend by more than 42 percent.
About AbbVie
AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. 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. Together with its wholly-owned subsidiary, Pharmacyclics, AbbVie employs more than 28,000 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.
Conference Call
AbbVie will host an investor conference call today at 8:00 a.m. Central time to discuss the third-quarter performance and long-term financial objectives. 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, business development, external affairs and general counsel; Mike Severino, executive vice president, research and development 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 www.abbvieinvestor.com. The company has posted slides regarding today's announcement which can also be found on the Web site. An archived edition of the call will be available after 11:00 a.m. Central time.
Non-GAAP Financial Results
Financial results 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. 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 financial guidance is also being provided on both a reported and a non-GAAP basis. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on the company's website at www.abbvieinvestor.com
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, and 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 2014 Annual Report on Form 10-K and in item 1A, "Risk Factors" of Part II of AbbVie's second quarter 2015 Quarterly Report on Form 10-Q, which have 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.
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