AbbVie Inc. (ABBV) Earnings Call Transcript & Summary

Hello, and welcome to day 3 of the UBS Healthcare Conference. My name is Navin Jacob, senior analyst covering large-cap pharmaceuticals and smid-cap biotech. Our next presentation and fireside chat is with AbbVie. I'm very happy to have with me Mike Severino, Vice Chairman and President of AbbVie; as well as Rob Michael, CFO of AbbVie; as well as Liz Shea, Head of Investor Relations. Thank you all for joining us today.

Thanks for having us.

Pleasure.

We are just going to jump into questions here. Rob and Mike, we can't escape the COVID impact, obviously. So we'll just start with a few questions there and then talk about Allergan, which you just closed, so exciting times for AbbVie. But maybe if we could start with COVID, Rob, your guidance assumes stay-at-home orders begin lifting in May and physician offices start to take patients for routine and nonurgent visits 60 days following this. What are you seeing on the ground? Is that actually happening? I mean we know of states opening back up, but want to here sort of what you're hearing from your reps and what you're seeing on the ground. Is that actually happening right now?

Yes. So I'd say, Navin, things are pretty much tracking within our expectations. We do have the ability to look at leading indicators. So we have nurse ambassadors who help patients with things like injection training. We can look at submitted claims to our specialty pharmacy network. And then of course, we could look at NBRx data. And I'd say things are tracking in line with what we expected. We saw a more severe impact during the shelter-in-place period. And now as we've seen the market start to open up, we are starting to see a recovery across all of those metrics. I think the thing to keep in mind is that our key therapeutic products treat severe diseases. So deferring treatment for these patients is typically not recommended. But as we look at the recovery, we'd expect to see differences between specialties. And certainly, dermatology offices saw, I'd say, a higher rate of closure than, say, gastros and rooms. But we've seen a nice recovery as offices starting to open up. We factor into our guidance the impact. If you think about SKYRIZI, the run rate coming out of Q1 is at $1.2 billion, really strong inflation share capture. Great momentum. We took up our guidance, but we did factor in a COVID impact. So we would have taken up our guidance even more, had it not been for COVID. And we've made an assumption around the impact on new patient starts. And now we're starting to see the recovery. So we feel very comfortable with the assumptions we've made. We've looked at that really across our portfolio, across the various markets. And as we sit here today, things are tracking in line with our expectations.

That's helpful. And as we think about sort of sensitivities, fully understanding that this is a very challenging period to try and forecast through. But if there is a "second wave," what is -- how should we think about the confidence interval or the margin of safety built into the guidance if that second wave comes to fruition and if there's more stay-at-home orders in the fall?

Yes. Navin, it's Rob again. So one of the reasons we went into a fair amount of detail on the Q1 earnings call in terms of our assumptions was to make it clear to investors how we were thinking about our guidance, why we still felt confident in confirming our full year guidance. Again, the momentum of the business heading into COVID had a lot to do with our ability to maintain earnings guidance despite the impact on new patient starts as a result of markets shutting down. We made it very clear, we did not assume a second wave later in the year. We'll obviously provide an update in our next earnings call as to what our current assumptions are. That said, we do think a second wave will look different if one does take place. I think the thing to keep in mind is while I would expect areas like travel and leisure restaurants will see a prolonged impact in health care, we think that the health care system will be in a better position to be able to deal with it. If there's a second wave, I think there'll be enough ability to deal with that. And so I would expect if there is a second wave, it wouldn't be as severe as the first wave. But we haven't factored that into our current guidance that we gave on the Q1 call.

How are you guys thinking about some of the more medium-term and long-term effects of COVID to the industry as a whole as well as to some of your newer products with regards to health care systems as well as just some of the, I don't want to say rhetoric, but just some of the discussion points that you've been able to have with regulatory folks, government folks? The industry is in sort of a unique position, I think, to reframe some of the arguments or rhetoric that has been pushed in front of it over the past few years. Are you seeing a better dialogue with Washington, with state and local governments, given what the industry is doing to try and combat COVID?

Well, this is Mike. I'll take that. I think there are a couple of components to your question. They're very important, so I'll address them individually. With respect to medium- and longer-term impact, what I would emphasize is what Rob said, which is our business focuses on the treatment of serious illness, so cancer, autoimmunity, chronic viral infections, things where treatment is not likely to be deferred for long periods of time. And so what a return to relative normalcy for us means is that patients were able to see their physicians, and they're able to have appropriate treatment decisions made, and they're able to have diseases like the ones I mentioned treated. And that's very different than broader-scale economic normalcy. And so we see a good trajectory for our business going forward in that medium and longer term, basically because of the nature of the products we make and because they address very serious unmet medical needs. Now you also bring up a good point that the industry's response to COVID, I think, is a very real opportunity to change the nature of some of these conversations and to demonstrate the value to a number of stakeholders of having a robust biopharmaceutical industry and the value that a company like AbbVie can bring. And so for example, we have been very active in our response to COVID with respect to supporting local and regional health authorities with testing. We've begun manufacturing viral transport medium for health authorities that were unable to get it and for hospital systems that were unable to obtain it. Otherwise, we have donated our entry virals for study against COVID. Specifically, KALETRA is being studied in a number of settings. The most important studies would be 2 being run out of Europe and by the WHO: the Discovery study, which is led out of France; and SOLIDARITY, which is a multinational trial run by the WHO as part of the effort to find therapies for COVID. We are also studying IMBRUVICA as a potential therapy for COVID in a smaller-scale study, in a Phase II study. And we've initiated discovery work trying to come up with COVID-specific therapies. Because the therapies that I mentioned would be essentially repurposed for COVID. And that's important because those can move forward very, very quickly, if appropriate data can be generated. But the real potential here is to identify therapies that are specific to COVID. That might be 100 or 1,000x more potent than the sorts of repurposed agents that are immediately available. And we've started work on that. And so I think broadly speaking to a number of stakeholders, that really demonstrates the value of our industry and can start to change the conversation.

And Mike, do you have any expectation for when Discovery may read out? The thought had been in May, and we're getting close to the end here. Is that timeline in line with how you guys are aware of when Discovery reads out?

Well, these are adaptive trials and the sample size is not set in stone. There are target sample size estimations that the groups that are leading these trials are aiming for. But there are data monitoring committees that are monitoring the data in real time. And so the timing is subject to change. The initial thinking had been around the end of May or into June. What I would say is that, that is still a reasonable estimate. But the situation is subject to change. So we'll continue to monitor it and update as appropriate. But any time from getting towards the end of this month, which is obviously quite close into June, I think, is possible. But it's also possible that it could extend beyond that.

Got it. That's clear. And with regards to some of your novel antivirals that you may be working on, presumably you're drawing upon your expertise in antivirals from HCV as well as your legacy expertise in HIV. When could we hear about some of those if you are indeed able to find an asset that has 100- to 1,000-fold potency that we've seen with some of the other antivirals that seem to maybe having activity against SARS-CoV-2?

I mean you're right, we do have a long track record here. And we specifically have a long track record drugging not only viral targets but proteases from the legacy, going back to developing some of the first and most potent protease inhibitors against HIV that led to the establishment of the HAART regimens, the highly active antiretroviral therapy regimens. And we're taking essentially the same team. We have many of those folks who did that work who are still with the company, and we're putting them on this problem. We would be targeting the coronavirus protease specifically to try to get an agent that is much more potent against that protein in COVID-19. And we may try other approaches. What I would say is we would move rapidly. But this is not something that will take weeks. It will take many months to 18 months or longer, I think, before we really know whether that is an achievable goal. Having said that, what we're seeing in response to COVID is there's great flexibility on regulatory paradigms, ability to get into the clinic quickly and ability to study these agents and even gets them improved very, very rapidly when the data is available. So I think it will take us some time before we can give you clarity on what is likely to emerge from those efforts, but we will be moving as rapidly as we possibly can.

Fully understand that this question maybe challenging to answer, given how early stage you are with this and how, on a relative basis, the understanding of the virus is extremely early in its existence. But is there -- is the antiviral approach that we'll be taking against SARS-CoV-2 will -- do you think it will be a combination approach? I mean, so far, everything seems to be done on a monotherapy basis, perhaps combination, if you think about hydroxychloroquine plus ZITHROMAX. But typically, we see cocktails being created. And in HCV, we even had cocktails being created with multiple novel therapies that have not necessarily been approved. Is there a path for a novel cocktail of antiviral being pushed forward in development for SARS-CoV-2?

Ultimately, I think combination therapy will be the answer to treatment of COVID infection. Obviously, vaccine development will also be important, but that's a separate matter. If we talk about treatment of COVID infection -- and I think there will be a need for both, a vaccine, certainly, but also the ability to treat patients who acquire disease either before a vaccine is developed or in the period between when a vaccine is first available and when we have wide-scale immunity across the population. There's going to be a period there where antiviral therapy is going to be very, very important. And I do think combinations will ultimately be the way to go. I think in the initial studies, what you saw is monotherapy for the reason that I mentioned earlier, which is that we are primarily dealing at this stage with repurposed therapies that have unclear activity, and there was a desire to establish individually whether activity was or was not present. Once that's known, I think building up rational combinations would be very important. And as we have therapies that are specifically targeted for COVID, where one can have greater confidence that you would see the kind of inhibition of our replication that would take to translate into a clinical effect, I think building up combinations will be very important. And so one can consider protease combinations potentially with other viral targets as very promising ways to go. If you think about it, that's exactly what happened with HIV. The first studies were AZT monotherapy. The first study was AZT monotherapy. That was the first study to demonstrate an impact on HIV replication. And from that point to HAART was a pretty rapid journey, where multiple antivirals came forward and rational combinations were constructed. And I think we'll see something similar here.

Rob, the -- for both Rob and Mike, the other big piece of news that you're dealing with is obviously the Allergan deal is now closed. What a lot of investors are obviously asking, when we should be expecting pro forma guidance? I mean you've obviously given some kind of color around pro forma numbers already. But folks are obviously looking for a little bit more clarity and granularity. When should we be expecting a little bit more detailed pro forma guidance, whether it's with regards to 2020? Would you be able to give 2021 guidance? And are you looking to give long-term pro forma guidance as well?

Navin, it's Rob. I'll take that. So it's something we study pretty carefully heading into the close. We looked at a number of precedent transactions to understand when peer companies were providing that pro forma guidance. And what I found is that essentially everyone has waited until their earnings -- their next earnings call, just no matter how much time passed between close and the next earnings call. So our base assumption right now would be the Q2 call. That said, I do appreciate that investors are anxious to hear about pro forma guidance from the company. And so we're evaluating some scenarios where we potentially could go out in mid- to late June. But as it stands right now, it's going to be anywhere between then and no later than our Q2 earnings call. It's fair to ask a question about 2021. It is a bit early. But given that we're midway through 2020, we'll give some consideration to how we approach 2021 on our first pro forma guidance, whether that's -- we give pretty fulsome guidance as it relates to product sales, P&L profiles. So it might be a little bit more high level, things like synergy, gating, accretion. I think with COVID, I think all of us are trying to understand what does the recovery look like, how do we think about potential austerity measures across the globe, given the impact on the economy. I mean all those things, I think, over the course of 2020 will become clear. And so as I think about -- we take pride in giving guidance that we feel we have a high degree of confidence we can deliver, where you can see as a track record of the company, we've always achieved and most often beaten our guidance. And so we want to have a high degree of confidence. And it's going to depend on what the recovery looks like in terms of whether -- when do we provide 2021. But at a minimum, we will provide 2020 no later than the Q2 earnings call.

Sorry, I was on mute. Sorry about that. Rob, can you remind us when we will get to less than 3x debt-to-EBITDA when taking into account the COVID environment?

Yes. So on the Q1 call, I reaffirmed our commitment to paying down $15 billion to $18 billion of debt. We've already paid down $7 billion. Allergan paid down $3 billion of debt in Q1 in March of this year. And then we just paid down $3.75 billion. Those were the Pharmacyclics 5-year notes that came due last week. So we've achieved $7 billion that's paid down already. We're on track to deliver against that $15 billion to $18 billion of debt paydown, which will put our net debt-to-EBITDA ratio at 2.5x by end of next year. We expect to pay down debt further beyond that. So the way to think about it is continuing to deleverage through 2023 with the objective of paying down the incremental financing from the transaction, which includes the $30 billion of notes that we issued in November as well as a $3 billion term loan that we took out at the close of the transaction.

That's great. And then you touched upon synergies. Has your expectation around the pace and mix of synergies that you're going to be realizing changed, given the COVID pandemic? Just at least qualitatively, if you could describe for us how you're thinking about the integration and the synergies associated with it.

Yes. So we're still on track to deliver the greater than $2 billion of synergies by year 3. Obviously, given the timing of the close, the calendar year impact in 2020 would be pro-rated. Obviously, we don't have the full year of expenses to synergize. So you have to take that into account. But in terms of the pacing, we still expect to get to that greater than $2 billion of expense synergies by year 3.

One of the areas -- and we'll get into the business of Allergan itself. But I do want to touch upon an area that you had started touching upon with your sell-side analysts' R&D Day that you held right before COVID. Mike, some of the early-stage pipeline assets that you've started highlighting, such as ABBV-3373 as well as the DUOPA subcu. Well, DUOPA subcu is actually not early stage. But could you touch upon maybe 1 or 2 of those assets that you're most excited upon? With the ABBV-3373 reading out in the second half of this year, what should we be expecting? And how should we be thinking about that asset and its opportunity?

So 3373 is part of our TNF steroid conjugate platform. And it's a broad platform that includes a number of agents. 3373 is in a proof-of-concept study in rheumatoid arthritis. So it is a single-dose level, a dose that would be at the predicted efficacious dose in RA patients with a primary endpoint of improvement in DAS. So what we would want to see is an agent that has the potential to drive better outcomes than one has seen historically with adalimumab and other agents. And that would enable us to advance the platform to later-stage development. We have not only 3373, but we have another asset, 154, which is also a TNF steroid conjugate, which has some minor chemistry modifications to the linker. That may offer advantages with respect to manufacturability and formulation. We have a range of other warheads. We have other targeting antibodies as well that could allow us to move into areas beyond TNF-mediated diseases once we have validation of the platform itself. And so it really is a very promising and a very broad area for us that could allow us to move forward with new agents that would be a step function in improvement in the standard of care in RA certainly but potentially across a range of immune-mediated conditions. So that's one area that I would highlight. The second area that I would highlight would be the work that we're doing in oncology and the early oncology portfolio that's advancing. We have navitoclax, which is an XL inhibitor in myelofibrosis. But that's part of an apoptosis platform that we're advancing. We have targeted delivery of BCL-XL with our B7-H3, BCXL -- BCL-XL ADC, which is a molecularly targeted ADC that allows us to get to even higher levels of XL inhibition that can be achieved with systemic dosing. And that, we believe, holds great promise in solid tumors. We're setting that agent in non-small cell lung cancer and other solid tumors. We have a range of apoptosis programs beyond that aimed at other molecules that we understand very well and have the ability to drug. So that's a big part of what we're doing that I would highlight. And then you also mentioned 951, which is a subcu delivery mechanism that's novel that can deliver DUOPA-like efficacy without the patient burden that's required with the placement of a gastric tube that's been threaded down into the small bowel. And so it should be a much more accessible and patient-friendly way to get that efficacy that is transformational. So there's a lot in our early pipeline that I think is not fully appreciated.

And Mike, can you just remind us of the time frame for when 3373 will read out, that's still a second half 2020 event? Is that summer? Is that in the fall? Any kind of clarity would be helpful.

Well, we haven't been that specific with the timing. But we've said it's something in the near future. And so we should have something to say about that before too long. We haven't given exact timing though.

Okay. Fair enough. One question we have from folks who are dialed in, who are participating and sending us questions over the interwebs, that's a technical term, is when could we see -- beyond the AbbVie early-stage pipeline, which you had started to showcase on the Q4 call, when can we see the combined pipeline of AbbVie plus Allergan? Is there anything -- I guess the bottom line of what they're asking is, is there something in the Allergan pipeline that might be of interest that may be not being fully appreciated by The Street?

I think there is some very good potential in the neuroscience pipeline for Allergan, the Allergan component of now the combined company that we're seeing unfold and really accelerates our presence in neuroscience and broadens our presence in neuroscience in many ways. And so legacy AbbVie, obviously, we have advanced programs in Parkinson's disease. We have early disease-modifying programs that are very promising and scientifically very strong in Alzheimer's disease and Parkinson's disease. But when we combine that with the Allergan portfolio, we have now a migraine franchise. And if you look at UBRELVY, the data it delivered, the label that, that translated into and the early-stage launch are going very well. There is a second oral CGRP, atogepant, for prophylactic use, so to prevent migraines. That is in Phase III development. And if you look at the combination of having BOTOX in chronic migraine, having 2 oral CGRPs, one for treatment of migraines, the other for prevention of migraines, it's a very powerful portfolio that I think folks haven't fully appreciated. There are therapeutic applications to BOTOX that are very important and additional ones that can be developed as well. And so that's another area. And then I think the toxin space therapeutically, more broadly speaking, is one that we would be in a good position to leverage. So I think when you put the 2 together, there are certainly some opportunities that have not been fully appreciated.

And this is a question for both Mike and Rob. But Rob, you'd highlighted that you intend to budget around roughly $2 billion annually for business development following the close of the Allergan transaction. Is that still -- are you still -- is that part of the -- is that still part of the capital allocation strategy here? And associated with that, whether it's Rob or Mike, what are some of the therapeutic areas that you're interested in? And this part is coming from a client, should we expect more partnership-type deals, like Voyager, in the area of gene therapy or in the area of infectious diseases?

Navin, it's Rob. So our capital allocation priorities have not changed. We've indicated that we've set aside $2 billion per year for licensing acquisition, so we can access external innovation. And we remain committed to that.

In terms of the areas that we would be focused in, I would say that we're going to be active in the areas that you'd expect us to be active in, in immunology and oncology in particular, also in neuroscience. I think if you think about the kind of firepower we're talking about, we can get substantial deals done in that -- think of the SKYRIZI deal. That had a $595 million upfront, obviously brought in a tremendous product that at the time we registered it was Phase III-ready and moved rapidly through Phase III development and into registration and is now obviously doing extremely well. So within the structure that Rob talked about, we certainly have the ability to get that sort of deal done. So I would think of us as doing deals like that, coupled also with earlier-phase deals that bring in promising technologies, it could be in gene delivery or in any one of a number of areas, so you can look across that spectrum, and we certainly have the firepower to operate across that spectrum. I think we also now as a combined company have a broader footprint that we can use to explore BD opportunity. So in addition to the ones that I described for our new combined company, there may be programs in neuropsychiatry that would not have made sense for legacy AbbVie that might be a very strong fit for us now when coupled with a phenomenal product like VRAYLAR. We can look at the eye care business. And so that, that could be something where we could make some adds in the future, obviously depending on availability. That wouldn't have made sense for legacy AbbVie but make good sense for the combined company and perhaps even in women's health.

And I would also add aesthetics. I mean that's an important area as we looked at the power of the portfolio that the Allergan team has built. As we think about capital allocation and building out the business, we expect -- intend to deploy some of that capital towards continuing to build out aesthetics as well.

We also have another question from someone online, an investor online, around the Alzheimer's pipeline that you have that doesn't get as much press as some of your other assets. Obviously, very early stage, but you do have a couple of partnerships, wondering when we could hear something from some of those Alzheimer's programs, Mike.

So I'm happy to take that question. We do have a very novel and very promising, albeit early pipeline in Alzheimer's disease. And we focus on areas that go beyond Abeta and amyloid plaque. The most advanced are our tau programs. We obviously have a tau antibody that's in the clinic. But we have multiple approaches to modulate tau beyond that initial antibody that are in late preclinical development that we could also choose to advance. And we have promising programs in neuroinflammation that are also in the clinic against targets like TREM2 and CD33. And so there are a number of very interesting and genetically validated targets that we're pursuing in our Alzheimer's pipeline. When might we see data? I think the most advanced programs have the potential to provide data in the '21 time frame and '22 time frame. And then the earlier programs could start to provide data in '23. Now each of these studies is designed with multiple opportunities to read out. And so we will see more and more data from that early pipeline as we move from '21 to '23.

Perfect. And then moving to the existing businesses, SKYRIZI, as you noted, continues to do very well. But that's just in one indication. Can you remind us about the life-cycle management program here? What is the cadence of next indications? And should we -- how should we think about the ramp of some of those other indications? Clearly, psoriasis, the ramp was much greater than we -- most of us had anticipated. Could you see a similar sort of ramp in terms of speed for the other indications that you're pursuing for SKYRIZI?

Well, as you point out, the expansion to important new indications in entirely new disease areas is an important part of the growth, not only for SKYRIZI but also for RINVOQ. For SKYRIZI, the most advanced of those new indications is Crohn's disease and the inflammatory bowel disease program. So the Crohn's disease program for SKYRIZI, we would have induction data later this year. And then we would have maintenance data next year and then we would file those together next year. So that's the most important component of it. There's also psoriatic arthritis component of that program that, that is moving forward would be more like the '22 time frame. And then in ulcerative colitis portion of the IBD program, which we're reading out in subsequent years, like more in the '24 time frame. And with respect to the launch, what I would say is there are a couple of things that dictate the launch trajectory. One is the data. And the data for SKYRIZI have been very, very strong. Certainly, the plaque psoriasis data have been strong from the core program, from the head-to-head studies against agents like COSENTYX that we run. And that's been an important part of it. And the second part of it is our experience in the area, the portfolio of products we bring and the expertise we have, navigating the managed care environment here in the U.S. and the expertise we have around the world. And I would say that as those factors allow us to get the sort of results that you've seen and as we see the data in Crohn's disease and other indications, that will help us understand the likely trajectory. But we also -- when we look at our expertise, these are areas we know well and areas that we think we can drive very effectively. So while it's early to make specific comments about the ramp in these indications certainly ahead of the Phase III data, I think our experience in this area will position us very well to drive value.

With regards to RINVOQ, you've mentioned that you have 11% in-play patient share in RA. And in-play share is just -- is not something that we in The Street are typically used to looking at. How do we think about that? Does that eventually translate into TRx share or NRx share? As in-play clearly being a form of leading indicator, just wondering how we think about those shares, Rob.

Yes. I think in-play share is informative in the early stage of a new product. So it's defined as new and switching patients. And so it's a good indicator of how the product is performing. And it's early days. Obviously, you eventually transition to looking at total share. But we have seen a very, very nice ramp. If you look at just sales came in at $86 million in the first quarter, representing over $50 million sequential growth. We've seen very nice physician feedback, very positive regarding the high level of efficacy, the strong benefit-risk profile. We have had commercial access at HUMIRA-like levels since January. We activated DTC in February. So all those factors are driving our in-play share to double digits. We've seen share capture really come from both JAK inhibitors and other agents, not as much from HUMIRA thus far. But it's nice to see RINVOQ capture share across the various competitors. But eventually, we will transition as the product becomes more mature to talking in terms of total share. But right now, I'd say, in year 1 of the launch, in-play share is most informative.

And what's the experience have been -- obviously, a good launch with RINVOQ. But what's your discussion been with physicians around the black box? There's still a little bit of an overhang when we think about JAKs, given what we're seeing with not just XELJANZ and OLUMIANT -- or rather not just with OLUMIANT, but just the thought of [ DPPs ] with XELJANZ. Obviously, you have a class warning as opposed to a product-specific warning. But is that distinction being understood by docs in your conversations with them?

Yes. I'd say early on, Navin, this is Rob, early on, I said the doctors were asking that question. And I think so that was part of the dialogue. If you look at just the response, right, I mean, the -- you wouldn't be seeing RINVOQ capture share from outside the JAK inhibitor class if that was as much of a concern. So in early days, that was part of the dialogue. We've seen a very fast ramp, strong share capture. We should be, very soon, if not already, in the #2 position in terms of in-play share behind HUMIRA. So we've seen a very nice ramp. I'd say, as it relates to RINVOQ, and Mike can speak about the specifics on how RINVOQ compares to the other JAKs, but it wasn't really a concern of ours in the beginning. And we think as part of those conversations and the way with doctors and the way the product has ramped, we're proving that it's really not been a barrier.

As Rob said...

All right. Yes. Go ahead, sorry.

I'm sorry. As Rob said, the feedback from the field and from prescribing physicians has been very strong. And I think an important part of that is the very careful job we did in Phase III defining the benefit-risk. So we ran a very broad program. We had very good surveillance mechanisms in place to identify these events. We adjudicated them. We had very clear delineation of what rates were not only with our agent but with the comparators across our program. And we -- I think that has clearly helped prescribing physicians understand benefit/risk with our agent and has been an important part of the reception that we just described, the very positive feedback we're receiving from the field.

Three last questions are focused on aesthetics, if I may. You mentioned interest in potentially acquiring an aesthetics. Allergan did conduct a deal in aesthetics in the form of the CoolSculpting program. That wasn't obviously up to expectations, has been a weak launch. How should we think about CoolSculpting going forward? And also just what is that -- what is the lesson learned from that, that you can take away when you think about potential aesthetic deals going forward?

Yes. So I think it's important to note that CoolSculpting, while it's an important part of the portfolio, if you look at facial aesthetics, make up the majority of the overall aesthetics business. And so I know there's a lot of focus on CoolSculpting. I think it's important to keep in mind, BOTOX and the JUVDERM collection really do drive that business. I think with CoolSculpting, what we saw was there was a bit of an innovation gap for a period of time that the Allergan teams have done a nice job of working to close. And so that's an important part of -- in that particular area to continue to drive innovation and ensure that you're offering customers with those options. And we think that with some key changes that the team has made, that we'll start to see CoolSculpting get on the trajectory that we expect. And so as we think about overall BD activity as it relates to aesthetics, I mean, it's important to continue to offer a strong portfolio. And we think that's a key part of why Allergan has built a competitive advantage in the aesthetic space is because they can offer that broad portfolio to the providers. And so we will continue to focus on expanding that. It doesn't have to be a specific area, let's say, like CoolSculpting, could be other parts of the aesthetics market. But we feel that the Allergan team has a very strong understanding of what happened with CoolSculpting and has a good plan to address that going forward.

With regards to BOTOX, Rick has previously discussed the challenges of manufacturing botulin toxin. We're still yet to see whether Mylan and Revance move forward with their biosimilar program for BOTOX. That was certainly an overhang on Allergan's stock when it was a stand-alone company. And for instance, I still have my BOTOX estimates declining in the out-years due to biosimilar competition. How are you guys thinking about the biosimilar competition potential and if you could remind us some of the challenges associated with manufacturing BOTOX?

This is Mike. I'll take that. BOTOX is a very difficult molecule. It's actually more than one molecule. It is a combination of multiple proteins. But it's a very difficult program to fit into the biosimilar pathway. And the reason for that is that there is not a consistent relationship between mass and activity and between the composition of these various subunits and activity. That needs to be experimentally determined and can vary substantially from process-to-process and certainly from manufacturer-to-manufacturer. And if you think about it, that consistent relationship between protein characterization and activity is what underpins the biosimilar pathway in the areas where it's been used. And so for that reason, we think it is very, very difficult to meet the requirements of biosimilarity for a program like BOTOX. And we did extensive work on this before the close of the deal, as you would expect us to. And all of that work supported that point of view. And nothing has really changed that point of view. I think the second challenge with trying to make a biosimilar to BOTOX is the second major component of the biosimilar pathway is PK equivalents. And obviously, one can't look for PK equivalents for BOTOX because it's not systemically administered and can't be systemically administered. So for those 2 reasons, we think it's very, very challenging for someone to meet the requirements and certainly won't happen in the near term, if ever. I understand that there has still been some talk about whether Mylan maybe or others may be pursuing that, but we don't see that as something that is likely at all, certainly not in the near term, and would -- or even in the longer term. So we feel good about the position there, and we feel good about both the aesthetic uses and the therapeutic uses of BOTOX, which we are going to continue to study.

And we still expect that as we think about BOTOX on the therapeutic side, think of it as we expect low single-digit growth there, on the aesthetic side, mid-single-digit growth, so -- and we have factored in some impact on share. It's important to keep in mind that it's a very strong, growing market over the long term. So we still feel very good about the prospects for BOTOX and would expect growth going forward.

And with that, we've gone a little bit past our time, but well worth it. And I really want to thank Mike Severino and Rob Michaels for joining us from AbbVie as well as Liz Shea as well. Thank you both for joining us today. And folks on the line, thank you as well.

Thank you, Navin.

Take care, guys. Bye.