AbbVie Inc. (ABBV) Earnings Call Transcript & Summary

Good morning, and thank you for standing by. My name is Nicole, and I will be your conference operator today. I would like to welcome everyone to the AbbVie Immunology Update Conference call. [Operator Instructions] I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations.

Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer; Michael Severino, Vice Chairman and President; Rob Michael, Executive Vice President and Chief Financial Officer; Jeff Stewart, Executive Vice President and Chief Commercial Officer; and Elaine Sorg, Senior Vice President and President, U.S. Commercial operations. Before we get started, I remind you to please review the forward-looking statements and disclosures on Slide 3 of our presentation. Please note that the slides being referenced during this morning's webcast will be posted on our website later this morning. With that, I'll turn the call over to Rick for introductory comments. Rick?

Thank you, Liz. Good morning, everyone, and thank you for joining us. Today, we'll discuss AbbVie's immunology strategy and outlook, including the excellent progress we're making with RINVOQ and SKYRIZI to expand our leadership position in the immunology market. The collective opportunity for these 2 game-changing and best-in-category therapies is significant, and it is expected to be a major growth driver for the company going forward, one we believe investors may not yet fully appreciate. Since our inception in 2013, we have taken many actions to diversify our portfolio and our sources of growth to position AbbVie for long-term sustainable performance. We've built a leading hem/onc portfolio that is expected to contribute more than $6.5 billion in revenue this year and growing at a robust rate. We've established a significant neuroscience portfolio, including compelling therapies for migraine, Parkinson's disease and psychiatric conditions with annual sales of nearly $5 billion today and strong growth momentum. We further diversified our business by adding the world's leading aesthetics portfolio, which represents an extremely attractive growth opportunity, and we've developed a robust pipeline, including numerous attractive late-stage programs, novel early-stage therapies and a growing range of potential platform technologies, which we expect will collectively contribute significantly to our growth through the next decade. While we've made significant progress and taken decisive actions, a key question for many investors is, to what extent can the company manage the forthcoming impact of the Humira loss of exclusivity in the U.S. and drive growth through this period. And given the size of Humira, we understand the investor interest in this topic. We have long been planning for this event, and we remain extremely confident that we can effectively manage through the expected LoE and quickly return to growth, especially in light of our updated expectations for RINVOQ and SKYRIZI, which we'll discuss in detail today. AbbVie holds a strong leadership position in the immunology market, stemming from nearly 2 decades of experience developing 16 new indications for Humira. And while Humira has played an integral role in defining the standard of care for multiple diseases, we've been focused on continuing to advance innovation within our immunology pipeline, developing new medicines that substantially raised the standards of care and further improve patients' lives. In pursuit of next-generation therapies, we set a very high bar. We look internally and externally for assets that have the potential for meaningful differentiation versus Humira and other therapies on the market or those in development. Our 2 new immunology products, RINVOQ and SKYRIZI are meeting this objective and have established strong launch trajectories. Both are performing well above all comparable launches as well as our initial expectations. We often refer to Humira as a pipeline in a drug, and the same can be said for RINVOQ and SKYRIZI. These 2 assets are now in late-stage development across all of Humira's major indications, plus new significant disease areas like atopic dermatitis, which we expect will further strengthen our leadership position and support long-term revenue growth. Our progress across all fronts gives us a high degree of confidence in the long-term commercial potential for both RINVOQ and SKYRIZI. We now expect the 2 assets will contribute more than $15 billion in combined risk-adjusted sales by 2025. To put this in its proper context, it's important to note that U.S. Humira is expected to achieve roughly $16 million in revenue this year. We expect U.S. Humira revenues to continue to grow, leading into the loss of exclusivity. And we believe RINVOQ and SKYRIZI have the ability to offset any level of biosimilar erosion by 2025. It should also be noted that despite our anticipated success with RINVOQ and SKYRIZI, we will continue to invest in next-generation immunology assets. We currently have several early-stage programs in our immunology pipeline that have the potential to provide transformational efficacy and again, redefine standard of care across immune-mediated diseases. Today, you'll hear from Jeff Stewart, Elaine Sorg and Mike Severino, who will collectively provide further details on our immunology strategy with insights into our commercial execution, recent data readouts and our advancing pipeline. I hope that you'll leave today's meeting with a deeper appreciation of our immunology strategy as well as the long-term growth prospects for this franchise, driven by the continued strength of RINVOQ and SKYRIZI. I'll now turn it over to Jeff Stewart for the start of the presentation. Jeff was recently named Executive Vice President and Chief Commercial Officer. Jeff and Elaine have been the architects of our U.S. strategy since AbbVie's inception. Jeff?

Thank you, Rick, and good morning, everyone. It's a pleasure to be here today. AbbVie's leadership position in immunology is a result of our deep scientific expertise and our commitment to innovation, which has been built and strengthened over the past 2 decades. We have demonstrated a track record of developing therapies that significantly improve patient care across a broad set of autoimmune diseases. Our performance is anchored by best-in-class agents with highly differentiated profiles, supported by robust clinical data across disease areas with high unmet need. And while our success would not have been possible without compelling assets, strong commercial execution has also been an essential element. We have benefited from a highly experienced immunology team, including the leading marketing and sales force to effectively support prescribers and patients as well as robust access across our therapeutic areas. Based on our current portfolio of products, including the excellent progress we are making with RINVOQ and SKYRIZI, we remain very well positioned to sustain and ultimately grow our leadership in immunology. As Rick noted earlier, we now expect RINVOQ and SKYRIZI to contribute more than $15 billion in combined risk-adjusted global sales by 2025. Before I discuss RINVOQ and SKYRIZI in detail, I think it's important to briefly discuss Humira. Clearly, Humira is our legacy, and it has been an outstanding therapy with 16 approved indications, actively treating more than 1 million patients worldwide. This year, global Humira sales will approach $20 billion as it remains the most widely prescribed frontline autoimmune agent with strong leadership positions across rheumatology, gastroenterology and the dermatology segments. With 23 years of clinical data, we have a deep understanding of the science across the diseases in the therapeutic areas, and this knowledge has served as a strong foundation in the development of our next-generation therapies. We believe Humira will remain an important contributor to AbbVie's growth right up to the U.S. loss of exclusivity, which is expected in early 2023. And while there is not a perfect proxy for Humira's anticipated erosion curve in the U.S., it would not be unreasonable to expect a steep impact in the first year, given the number of expected competitors, roughly double what we initially faced internationally, with the level of erosion then moderating in subsequent years. For context, international markets facing biosimilar competition declined approximately 45% in 2019. There are multiple critical success factors driving our strategy for sustained leadership in immunology. Clearly, the immunology market is dynamic and highly competitive. As such, we've known from the outset that maintaining leadership would require an evolution from a single product franchise to a portfolio of highly differentiated therapies. Critical within this effort has been the thoughtful design and execution of our clinical programs. It was imperative to establish a robust body of data to support each of our assets' differentiation across a broad set of indications and patient populations. Another important element has been speed to market. Our ability to quickly advance RINVOQ and SKYRIZI to ensure a timely cadence of launches has been essential. Within the context of these launches, it's also critical that we ensure appropriate investment for each asset as we carefully shift resources to RINVOQ and SKYRIZI, while maximizing Humira in core disease areas yet to overlap with our 2 new agents. And finally, while both RINVOQ and SKYRIZI are substantially raising the standards of care, we must continue to pursue and invest in novel therapies that have the potential to provide even a greater opportunity for improved outcomes, not only in our core disease areas, but also within new areas where no effective targeted therapies exist today. Our clinical experience successfully developing Humira across the broadest set of indications has provided us with the insights, expertise and capabilities to effectively accelerate development of both RINVOQ and SKYRIZI across an extensive set of indications as well. We expect the rapid development of these 2 assets to result in the commercialization across 7 major indications by 2022, including the majority of Humira's core indications, RA, psoriasis, PsA, ankylosing spondylitis, Crohn's disease and ulcerative colitis, plus a distinct new indication, atopic dermatitis. This indication expansion should take place in less than half of Humira's development time line. Based on the significant body of data generated to date, we believe that RINVOQ and SKYRIZI have demonstrated differentiated clinical profiles versus Humira as well as other biologics. These profiles, coupled with our exceptional execution, including unprecedented product access across our immunology portfolio, our leading sales force and medical affairs organization, industry-leading direct-to-consumer activation and exceptional patient support programs, gives us the confidence that RINVOQ and SKYRIZI will be the new standards of care and drive our sustained leadership in immunology for many years to come. The immunology market is extremely attractive. The diagnosed population for the conditions our portfolio of medicines treat is currently more than 50 million people in the major developed markets alone, with more than 25 million patients on therapy. These are serious conditions that, if left untreated or sub-optimally treated, can result in significant and sometimes life-threatening consequences. Today, the global immunology market is estimated at roughly $80 billion. And while the introduction of biosimilars will have an impact on the total immunology market value, we see a number of factors offsetting and potentially supporting absolute market growth by 2025, including new and emerging therapies, providing improved outcomes in core disease areas especially in biologic experienced patients; continued biologic penetration across all geographies and in all indications; an expansion into new disease areas, which have limited approved advanced therapies today and high unmet need, such as atopic dermatitis. While Humira and other anti-TNF therapies transform the treatment paradigm for several immune-mediated diseases over the past 20 years, providing step function improvements over conventional systemic and topical therapies, there remains considerable room for further improvement in patient outcomes. Our 2 new assets are driving higher levels of efficacy and restating standards of care. And while we certainly raised the bar, despite our successes, there is still enormous remaining unmet need in the majority of the immune-mediated conditions we treat, which is why we continue to pursue and invest in novel immunology therapies with the goal to drive the majority of patients to a state of sustained, complete remission. We remain extremely excited about the potential for RINVOQ and SKYRIZI, which are expected to collectively contribute approximately $2.2 billion in 2020 sales, their first full year on the market. This very strong launch trajectory, along with the accelerated progress we are making to commercialize these assets across 7 major indications by 2022, essentially covering all of Humira's major disease areas, it gives us confidence that RINVOQ and SKYRIZI will be significant opportunities over the long term. The more than $15 billion in combined risk-adjusted sales by 2025 is expected to be driven by roughly $5 billion in sales from rheumatology indications, including RINVOQ's continued momentum in RA, along with its anticipated launches in both PsA and AS next year. Approximately $7.5 billion in revenue from dermatology, driven by SKYRIZI's prevailing position and increasing utilization in psoriasis and RINVOQ's expansion into the fast-growing atopic dermatitis segment next year and roughly $2.5 billion from gastroenterology indications, with RINVOQ and SKYRIZI's competitive profiles in ulcerative colitis and Crohn's disease. So with that introduction, I'll hand it over now to Elaine Sorg to discuss rheumatology, dermatology and gastroenterology segments in more detail. Elaine was recently named Senior Vice President and President of U.S. Commercial Operations, having previously served as President of U.S. Immunology. Elaine's leadership on the immunology business has been a critical element of our success.

Thank you, Jeff, and good morning, everyone. It's a pleasure to be here today to discuss our immunology strategy and our prospects for continued leadership. Starting with the rheumatology market, which is comprised of several indications, including rheumatoid arthritis, psoriatic arthritis, and axial spondyloarthropathy, each very serious diseases we're helping disease progression to stop irreversible joint damage has been the treatment goal since the introduction of anti-TNF more than 20 years ago. Rheumatology is a key area of focus for AbbVie today, representing nearly 60% of our total immunology sales, and it will continue to be an important segment for the company over the long term. The global market is estimated at approximately $34 billion today with prescription volume growing in high single digits in the U.S. AbbVie is the clear market leader in rheumatology, with Humira and RINVOQ currently holding 26% total market share in the U.S. RA market. The combined in-play market share is also steadily increasing now at approximately 32% in the U.S. AbbVie was instrumental in generating a large body of evidence to help rheumatologists understand the importance and benefit of treating early to halt the progression of disease. Because of these efforts, rheumatologists were amongst the earliest treating physicians to broadly adopt biologics to treat their moderate to severe patients. Despite significant growth in the use of biologic agents, we believe there remains considerable room for penetration of targeted immunomodulators to increase beyond the 40% in the U.S. and 20% in Europe that we see today. In a few minutes, I'll discuss the driving forces behind this market growth and increasing TIM penetration for the specific rheum indication. Rheumatoid arthritis represents the largest disease within the rheum segment, a $24 billion global market today. RA is an autoimmune disease that results in chronic systemic inflammatory disorder that can affect many tissues and organs, but principally attack flexible synovial joints. It can be a disabling and painful condition, which can lead to a substantial loss of function and mobility, if left untreated. Conventional DMARDs such as methotrexate, have sub-optimal efficacy as a monotherapy and carry significant safety and tolerability concerns. The introduction of anti-TNF over 20 years ago altered the treatment paradigm for RA management. Globally, there are approximately 1.3 million RA patients treated with a biologic or oral targeted immunomodulator. However, current therapies are not sufficiently effective in approximately 30% to 40% of patients and do not completely address RA symptoms in the majority of patients who do respond to these drugs. Therefore, there remains a large unmet need and substantial opportunity to provide higher levels of remission for moderate to severe RA patients. In the U.S., we estimate that approximately 35% of drug treated RA patients are currently receiving a targeted immunomodulator and only 20% of treated patients in Europe. The introduction of higher efficacy agents will drive increased TIM penetration in the RA market, and the TIM experience segment is expected to grow most quickly. By the end of this decade, we estimate that there will be more second line plus patients than there are total patients treated by TIMs today. These dynamics create a market with significant opportunity for innovative products that can provide substantial efficacy improvement and high levels of disease remissions. RINVOQ, our selective and reversible JAK inhibitor was evaluated in a broad and comprehensive set of 6 pivotal studies in RA, enrolling more than 4,000 patients across multiple populations, including 2 studies with biologic comparators. We have evaluated RINVOQ, head-to-head against the standards of care in RA, including methotrexate and Humira, and in a broad range of patient types within the moderate to severe RA segment. This includes monotherapy treatment in patients who are naive to methotrexate at one end of the spectrum and very difficult-to-treat patients who have failed one or more biologic therapies at the other end of the spectrum. Across the clinical program, RINVOQ drove very high levels of response on all clinical endpoints. And importantly, on the more stringent endpoint such as ACR 50, ACR 70, low disease activity and DAS remission. RINVOQ is the only RA therapy to show higher rates of remission in both methotrexate and biologic refractory patients, Demonstrating significantly higher rates of remission compared to both Abatacept and Humira. Across the clinical program, RINVOQ has demonstrated consistent remission rate and significant inhibition of structural joint damage. These are key differentiators in the increasingly competitive RA market. Based on the data generated in our development program, RINVOQ represents an important advancement in the treatment of RA, providing physicians with a new, highly differentiated therapeutic option for their patients. RINVOQ has been approved in RA in the U.S. for a little over a year, and the launch continues to outperform our expectations and performed well ahead of comparable analogs in the RA market. In the 15 months that RINVOQ has been on the market, we estimate that nearly 28,000 patients have started treatment. RINVOQ's share capture of in-play RA patients is approximately 16%, putting it at parity with our market-leading Humira. Total market share is now approximately 4% of the RA market. This has truly been an outstanding launch and is a testament to RINVOQ's differentiated product profile compared to other agents in the RA category. Based upon the unprecedented level of share capture at this early stage of launch, we expect sales in RA to grow from approximately $700 million in 2020 to approximately $4 billion in 2025. Psoriatic arthritis, or PsA, is a chronic inflammatory arthritis that is closely associated with psoriasis and, in many cases, the arthritic manifestations develop after the onset of skin manifestations. The course of PsA is usually characterized by remission and flares, can be highly variable, ranging from a mild disease to a severe erosive arthropathy with a combination of bone lysis and joint ankylosis. During periods of flare, PsA can significantly affect patients' ability to work and to perform daily activities with tasks involving fine motor skills often becoming difficult or impossible to perform. Psoriatic arthritis patients are predominantly managed by rheumatologists, although approximately 20% of PsA patients are managed by dermatologists. And the number of dermatologists diagnosing PsA and prescribing biologics has been increasing. The penetration rates for biologics and oral TIM agents is relatively higher in PsA compared to other immune-mediated conditions, which is a function of biologics being indicated for all patients with active disease instead just the moderate to severe patients, as is the case with RA, psoriasis, Crohn's and ulcerative colitis. Despite the higher penetration rates, significant unmet need remains in the PsA market, and there is considerable commercial opportunity for newer therapies that can provide sustained improvement in joints, higher efficacy across key manifestations and higher rates of skin clearance. Similar to the dynamics I outlined for the RA market, the introduction of higher efficacy agents in PsA will drive increased TIM penetration, and the TIM experience segment is expected to grow more quickly than the TIM naive segment. By the end of the decade, there will be more second line plus PsA patients than there are total patients treated by targeted immunomodulators this year. Our registration-enabling program for RINVOQ with psoriatic arthritis consists of the Phase III select PsA 2 study in patients who had an inadequate response to biologics -- non biologic DMARDs and the Phase III Select PsA 2 study in patients who had an inadequate response to biologic DMARDs. In these studies, RINVOQ demonstrated strong levels of response in both joint and skin endpoints, even in heavily pretreated biologic refractory patients. With the biologic experience patient pool representing such a large and important segment of the future PsA market, the ability to drive high and durable responses in bio experienced patients will be a key differentiator for RINVOQ in this increasingly competitive market. Rheumatologists are gaining experience with RINVOQ in their RA patients. And clearly, the strength of RINVOQ's effectiveness on joint is helping to drive adoption in that indication. We think we can leverage this dynamic to drive strong adoption in PsA as well based on the rapid and durable improvements on joints that RINVOQ has demonstrated in the PsA clinical program. Given that PsA is a condition where the severity of joint or skin manifestations of the disease can vary significantly by patients, we are fortunate to have 2 late-stage programs in this area, which will allow us to address the wide range of patient types, regardless of how their symptoms present. Earlier this year, we submitted our regulatory applications for RINVOQ in PsA with the approval decisions expected in the first half of next year. We're also nearing completion of the PsA program for SKYRIZI, with results from our 2 Phase III trials expected by the end of this year or early next year. Moving now to Axial SpA, which is an umbrella term for a spectrum of diseases, including ankylosing spondylitis, or AS, and non-radiographic axial SpA. Both are chronic, progressive inflammatory diseases that cause pain and stiffness, primarily in the spine. AS diagnosis is confirmed by x-ray while patients with similar signs and symptoms but without radiographic evidence are diagnosed with non-radiographic axial SpA. Most but not all non-radiographic patients develop AS over time. A key challenge with the diagnosis of Axial SpA is that it's often confused with mechanical back pain, resulting in years of delays in referring these patients to rheumatologists. A lack of awareness and delayed referral both contribute to low diagnosis rates in Axial Spa. The non-radiographic axial SpA diagnosis has historically been more accepted in Europe than in the U.S., resulting in a significantly higher drug treated population in Europe. In the U.S., the Axial SpA market is currently comprised almost entirely of ankylosing spondylitis patients. However, if the non-radiographic spa indication gains more acceptance, the total axial spa market in the U.S. could be more than double the size of just ankylosing spondylitis today. While anti-TNF can provide significant symptomatic relief, prevention of radiographic progression represents a key unmet need in Axial SpA. The introduction of novel agents that can improve symptoms, prevent radiographic progression and provide alternatives to anti-TNF therapy, along with earlier and more accurate diagnoses will lead to increased diagnosis and treatment rates. The global Axial SpA market is approximately $3 billion today, representing an important market in the rheum segment and a key area of focus for AbbVie. We expect RINVOQ sales in the SpA segment, which includes both PsA and axial SpAto contribute approximately $1 billion on a risk-adjusted basis in 2025. The registration-enabling program for RINVOQ in axial SpA includes 2 pivotal trials to select Phase II/III AXIS 1 study in ankylosing spondylitis and the Phase III Select AXIS 2 study in Axial SpA, which includes 2 sub studies, one for patients with AF and another for patients with non-radiographic axial SpA. Results from the Axis 1 trial are shown on this slide and serve as the basis for our regulatory submission for ankylosing spondylitis in the U.S. and Europe. We recently received CHMP positive opinion, and we expect the final regulatory decisions in both geographies in the first half of next year. In the Select Axis 1 study, RINVOQ demonstrated significantly greater improvements in signs and symptoms as well as physical function and imaging endpoints compared to placebo. Based on the data generated to date, we believe RINVOQ has the potential to improve care for patients suffering from ankylosing spondylitis by providing sustained disease control and rapid and durable pain reduction as well as improving function. Our Select Axis 2 trial in the broader axial spa population is ongoing, with data readout and regulatory submission expected in 2022 and approval anticipated in 2023. We look forward to providing updates on this study as the data mature. Turning now to the dermatology segment, which is an area of significant growth potential, driven by our momentum with SKYRIZI in psoriasis and the anticipated expansion of RINVOQ into atopic dermatitis. The dermatology market is comprised of psoriasis, atopic dermatitis and hidradenitis suppurativa as well as a portion of psoriatic arthritis, roughly 20% of patients treated by dermatologists. These are all immune-mediated skin disorders, which can have a significant impact on quality of life, if left untreated. The global dermatology market is estimated at approximately $24 billion today, with prescription volume growing strong double digits in the U.S., with new and emerging agents expected to meaningfully improve patient outcomes. We believe this market is poised for significant expansion, with current TIM penetration rates only in the high single digits in the U.S. and low single digits in Europe. AbbVie is also a clear market leader in the dermatology segment, with Humira and SKYRIZI holding a combined 37% total share in the U.S. psoriasis market and 45% in-play patient share. Stated differently, nearly 1 out of every 2 new and switching patients received SKYRIZI or Humira, a clear testament to their best-in-class product profile. Dermatology represents approximately 16% of our total immunology sales today. Psoriasis represents the largest disease within the dermatology segment, a $19 billion global market today. Psoriasis is a chronic disease of the immune system, which triggers skin inflammation and causes skin cell to be produced faster than normal, forming the thick, red, itchy, flaky patches, known as plaques. Psoriasis is a high-growth market with roughly 13% growth in the U.S. and low TIM penetration globally, roughly 13% in the U.S. and 6% in Europe. Emerging psoriasis therapies like AbbVie's SKYRIZI are driving accelerated growth in the second line plus segment, which now represents nearly half of all market volume in the U.S. SKYRIZI, our anti IL-23 monoclonal antibody, was evaluated in 5 Phase III studies for psoriasis, including 4 pivotal trials. In psoriasis, both speed and durability of response are important considerations for an optimal therapy as loss of efficacy is a key concern for patients and physicians. Our clinical trials demonstrated a remarkable level of clearance after just a single dose of SKYRIZI as measured by the change in mean, psoriasis area and sensitivity index, also known as PASI. The average skin clearance following the first dose was 58%, increasing to 91% after 2 doses and to 95% after 5 doses. In our Phase III studies, SKYRIZI demonstrated very high rates of durable skin clearance, with more than 80% of patients achieving PASI 90 and 60% of patients achieving PASI 100 or complete skin clearance at 1 year. Importantly, the proportion of SKYRIZI-treated patients who achieved these high levels of response increased over time. In fact, the level of complete skin clearance at the 1-year mark is the highest reported in a Phase III program to our knowledge. Across our clinical programs, SKYRIZI also demonstrated superiority to agents across 3 biologic treatment classes in psoriasis, including anti-TNF Humira, anti IL-17 Cosentyx and IL-12/23 Stelara. These collective results represent overwhelming support for SKYRIZI's unmatched level of skin clearance, durability of response and safety, all with the convenience of quarterly dosing and flexibility for in-office or at-home self-administration. SKYRIZI is truly a best-in-category therapy for psoriasis. In its first full year on the market, SKYRIZI has achieved the leading in-play psoriasis patient share in the U.S. at 33%, which is double the share capture of the next nearest competitor. We are also seeing a rapid increase in SKYRIZI's total psoriasis market share, which is now approximately 13% and already at parity to both Taltz and Stelara. This rapid launch trajectory is unprecedented and a testament to SKYRIZI's strong efficacy compared to other novel agents in the psoriasis category. Based on this continued strong momentum, we expect SKYRIZI sales in psoriasis to grow from approximately $1.5 billion in 2020 to approximately $5.5 billion in 2025. Atopic dermatitis is another important market within the dermatology segment and a new disease area for AbbVie. This chronic skin condition is characterized by dry, itchy skin, often referred to as eczema, with periods of severe flare ups. Unfortunately, the moderate to severe segment remains an area of high unmet need given the significant disease prevalence, limited treatment options and number of inadequate responders to current therapies on the market. The global atopic dermatitis market is roughly $3.5 billion today, growing strong double digits. Based on the growing disease awareness, the extremely low TIM penetration globally and several new and emerging treatment options, including potentially novel JAK therapy, we believe the global moderate to severe atopic dermatitis market has the potential to more than triple by 2025. Importantly, this is an area where we expect multiple new competitors to drive increasing disease awareness and penetration. I'll now turn it over briefly to Mike, who will discuss our clinical program in this indication.

Thanks, Elaine. Earlier this year, we reported top line results from our 3 registrational trials for RINVOQ in atopic dermatitis. 2 of these Phase III studies measure up 1 and measure up 2 evaluated RINVOQ as monotherapy for the treatment of adolescent and adult subjects with moderate to severe atopic dermatitis who are candidates for systemic therapy. In each of these studies, both doses of RINVOQ met all primary and ranked secondary endpoints, demonstrating significant improvement in skin clearance and itch compared to placebo. As illustrated on this slide, RINVOQ efficacy compares favorably to other emerging therapies, with RINVOQ demonstrating significant levels of skin clearance as monotherapy, with both the 15-milligram and 30-milligram doses. This is important given the challenges with long-term topical steroid use as well as limitations with their use over the extensive body surface area impacted in moderate to severe patients. In all 3 of our registrational trials for atopic dermatitis, including the Add Up study, which evaluated RINVOQ in combination with topical corticosteroids, we also saw very rapid responses on both skin and itch measures. RINVOQ demonstrated a statistically significant improvement on skin clearance as measured by EV75 by week 2 and on the pruritus score by week 1. Impressively, we saw clinically meaningful reductions in itch, as early as 1 day after the first dose in patients receiving 30 milligrams and 2 days after the first dose in patients receiving 15 milligrams. These data are very encouraging as relief of itch as well as the speed of response are important attributes for moderate to severe patients based on our market insights. Our Phase III trials supported our recent regulatory applications for RINVOQ in atopic dermatitis in the U.S. and Europe, with the decision in the U.S. expected in the first half of 2021. Last week, we reported positive top line results from our Phase III Heads Up study, which evaluated RINVOQ against dupilumab. In this study, RINVOQ demonstrated superiority to dupilumab on the primary endpoint of EV75 at week 16 as well as on all ranked secondary endpoints, including on the more rigorous measurement of EV 90 and EV 100. We also saw a very rapid itch reduction with RINVOQ demonstrating superiority over dupilumab as early as 1 week after initiating treatment. RINVOQ's safety profile in the Heads Up trial was consistent with what was observed in the previous 3 Phase III studies. The rate of serious infections was 1.1% for patients treated with RINVOQ and 0.6% for patients who received dupilumab. The rate of serious AEs was 2.9% for RINVOQ and 1.2% in the dupilumab group. No malignancies, MACE events or VTEs were reported in RINVOQ-treated patients. These efficacy trends were sustained out through week 24, where we continue to see significant efficacy advantages over dupilumab on the most stringent skin endpoints, EASI-90 and EASI-100 as well as on itch relief. Looking at the EASI-100 score at 24 weeks, RINVOQ has more than double that of dupilumab. These results underscore 2 critical components of RINVOQ's potential profile in atopic dermatitis, the ability to drive high levels of skin clearance as well as the rapid and pronounced impact on itch. We plan to share the complete details of the trial in a journal publication in 2021. Based on the data generated in our registrational program as well as the head-to-head data against dupilumab, we remain very confident in the benefit risk profile for RINVOQ in atopic dermatitis and believe it will offer meaningful advantages of our products on the market today or in development. We expect approximately $2 billion in risk-adjusted sales by 2025. Now I'll turn the call back over to Elaine for a detailed review of the gastroenterology market.

Thanks, Mike. The gastro market is comprised of inflammatory bowel diseases, which collectively represent an area of great unmet need within AbbVie's core immunology indications. The combined global market value for Crohn's disease and ulcerative colitis is estimated at nearly $22 billion today. Across the IBD indications, remission rates following induction therapy remain low despite the availability of targeted immunomodulators for more than a decade. In Crohn's disease, current therapies provide induction remission rates in the range of 10% to 15% on a placebo-adjusted basis. The induction remission rates for ulcerative colitis are even lower, ranging from high single-digit to low teens on a placebo-adjusted basis. Even with continued treatment, remission rates during maintenance therapy remained low, and a significant number of patients continue to visit emergency rooms as these crippling diseases flare. The low rates of remission and need for emergency treatment lead to high discontinuation rates and underscore the severity of the unmet need as well as the opportunity for therapies with new mechanisms of action. Humira is a global market leader in the moderate to severe IBD segment, with U.S. market share of approximately 34% in Crohn and 29% in UC. Internationally, across IBD indications, Humira maintains a leading 24% market share despite biosimilar competition. AbbVie intends to build on its leadership position within IBD with anticipated approvals in 2022 for RINVOQ in UC and SKYRIZI in Crohn's disease, covering both of Humira's current gastro indications. Mike will discuss the data generated to date in more detail momentarily, but we believe approval our next-generation assets will meaningfully improve induction and maintenance remission rates. Additionally, we will push to further restate the standard of care in gastroenterology by targeting subpopulations, pursuing additional indications and advancing innovative pipeline assets. I'd like to pivot slightly to discuss how we see the gastro market evolving in the future. As more innovative treatment options like RINVOQ and SKYRIZI come to market, we expect to see an increase in TIM-treated patients, which is anticipated to drive double-digit prescription growth rates for the foreseeable future. We believe TIM penetration will continually increase as well growth in second-line plus treatment as patients fail to achieve remission on existing frontline therapy. Based on the continued unmet need in this market and expected product profiles for RINVOQ and SKYRIZI in the IBD indication, we believe these products will contribute approximately $2.5 billion of gastroenterology sales in 2025. I'll now turn the call back over to Mike, who will cover data generated by our gastro clinical programs, including our recent Phase III RINVOQ induction data in ulcerative colitis as well as our broader immunology R&D strategy.

Thanks, Elaine. As mentioned earlier on the call, we believe both RINVOQ and SKYRIZI have the potential to become important new treatment options in the gastro segment based on the impressive remission rates and endoscopic responses we're seeing in their IBD development programs. We recently announced positive top line results for RINVOQ in ulcerative colitis, where RINVOQ conduction data demonstrated clinical response rates to over 70% at week 8 as well as a very strong impact on the more stringent measures of clinical remission and endoscopic improvement. In this study, approximately 26% of RINVOQ treated patients achieved clinical remission by the adapted Mayo score and approximately 36% of RINVOQ patients achieved endoscopic improvement at week 8. The overall study population in U-ACHIEVE was fairly evenly split between patients who had an inadequate response to biologics and those that had an inadequate response to conventional therapies that have not failed biologics, who are referred to as non-bio IR patients. RINVOQ performed very well in both of these populations. In the non-bio IR patients, we saw a 26% placebo-adjusted clinical remission rate with RINVOQ. And in the Bio IR patients, we saw an 18% placebo-adjusted clinical remission rate. We're very pleased with these results, particularly with the strong response in the difficult-to-treat bio IR patients, where historically, the placebo-adjusted clinical remission rates have ranged from mid-single digits to low double digits. With cross-trial caveats in mind, these induction data, particularly the remission rates and endoscopic improvement scores, compare very favorably to other UC treatments on the market or in development today. Clearly, RINVOQ has the potential to become one of the most highly effective therapies for patients with a moderate to severe ulcerative colitis. It's once daily, oral dosing represents another potential aspect of differentiation in this market. In Crohn's disease, we're nearing completion of SKYRIZI's Phase III program with induction data expected near the end of this year, followed by maintenance data and our regulatory submissions in 2021. We're very encouraged by the results from the Phase II program, where SKYRIZI demonstrated strong activity with impressive remission and endoscopic improvement rates following induction therapy. And these responses have proven to be durable with SKYRIZI demonstrating high rates of remission out to 3 years in an open-label extension study. We also have an ongoing program for RINVOQ in Crohn's disease with Phase III induction data expected next year. We are also making good progress with RINVOQ and SKYRIZI internationally, and expect to introduce all of the major rheum, derm and gastro indications in major geographies by 2025. And launch progress with the initial indications is going very well. Both assets have received broad country approvals with ramping access, and we expect their combined sales to grow from approximately $275 million in 2020 to approximately $4 billion in 2025. Before I move on to discuss our immunology R&D strategy, this slide depicts the steady cadence of anticipated launches. By 2024, we believe SKYRIZI and RINVOQ will span a greater portion of the global immunology market than Humira, covering all major Humira indications, plus atopic dermatitis and giant cell arteritis. These assets are expected to continue to ramp between 2025 and 2030, reaching peak share in the early 2030s. We expect worldwide risk-adjusted sales for SKYRIZI to reach more than $7 billion in 2025 as it continues its strong launch in psoriasis and received meaningful contribution from IBD and the smaller psoriatic arthritis indication. Similarly, we expect RINVOQ to achieve more than $8 billion of risk-adjusted sales in 2025, led by the continuation of its strong launch in rheumatology and significant additions from the rapidly emerging atopic dermatitis segment as well as the Spa and IBD indications. Moving now to our R&D strategy in immunology, which is focused on 2 core elements. The first is addressing the unmet need in our core indications by once again improving the standard of care with transformational product profiles. As we've discussed today, in our core areas, RINVOQ and SKYRIZI each have the potential to significantly advance standard of care across several immune-mediated conditions. But despite our success with these agents, there is still room for continued innovation. In rheumatology, our programs are aimed at achieving durable remission and halting disease progression. In dermatology, our early-stage efforts are focused on developing oral agents that can provide clear skin with durable responses. And our goal in IBD is to further improve clinical remission rates and induce mucosal healing. The second element of our immunology R&D strategy is expanding into new diseases with high unmet medical need based on pioneering science and novel technologies. We have efforts in late-stage development, such as RINVOQ in atopic dermatitis as well as discovery and early clinical programs aimed at diseases where there are few or no effective therapies such as lupus, systemic sclerosis, polymyalgia rheumatica and Sjogren syndrome. We have also incorporated innovation across all stages of our development programs to help drive better decision-making and accelerate filings for both core and new indications. We believe this is key to moving faster through clinical development to bring better therapies to patients more rapidly. In our early development programs, we're making decisions faster by incorporating Bayesian statistical approaches and employing clinical trial simulation and modeling. In late development programs, we've incorporated innovative trial designs, such as seamless Phase II/III studies and novel filing strategies to target expedited regulatory pathways. And we are leveraging translational science to incorporate better patient selection via molecular profiling and biomarkers. In our core diseases across rheum, derm and gastro, we're investing in novel approaches aimed at addressing unmet need in the market. Our programs include approaches that modulate both the adaptive and innate arms of the immune system. We believe that inhibition of these 2 distinct but interrelated inflammatory pathways has the potential to deliver efficacy in autoimmune conditions that have been intractable to more traditional approaches. We also have novel approaches to address barrier function and tissue repair, which have applicability across a broad set of immune-mediated diseases. These programs have the potential to provide transformational efficacy in areas like IBD and RA. In IBD, our hypothesis is that both immune cell modulation and restoration of epithelial barrier function are required to achieve higher levels of efficacy. We believe that mechanisms that actively promote mucosal healing will play an important role in future IBD therapeutics. We also have targeting technology platforms to enable more precise immunomodulation, to drive deeper responses that have the potential to advance the standard of care in diseases across all segments in immunology. These technologies could provide novel approaches to delivering therapeutics with cellular or tissue specificity. One example of our targeting technologies is the immunology ADC platform, which is a novel approach to achieve precise immunomodulation without systemic side effects. ADCs have been around for quite some time in oncology, but AbbVie is a pioneer in developing ADC technology for immune diseases. The concept of the ADC is to couple a potent payload to an antibody, which then targets the payload to a specific subset of immune cells, in this example, to activated immune cells bearing membrane-bound TNF. Once attached to the cell surface, the ADC will then internalize, migrate to the lysosome and through a catabolic process, release the payload inside of the cell. Our most advanced immunology ADC is a conjugate of an anti-TNF antibody and a potent steroid, designed to provide deep and durable remission in diseases where TNF plays an important role, such as RA, and Crohn's disease. Earlier this year, we reported top line results from a proof-of-concept study, evaluating our TNF steroid conjugate, ABBV 3373 in RA. In this study, 3373 demonstrated the ability to drive high levels of disease control as measured by DAS 28 response without systemic steroid effects. In October, we announced that we have selected ABBV 154, a highly related TNF steroid conjugate with improved linker technology to advance to a larger scale Phase IIb definitive dose-ranging study in RA. We will begin Phase II studies with 154 in additional immune-mediated conditions as well. As noted earlier, our goal with the development of next-generation therapies is to raise the bar for efficacy. While it's still early, we're very encouraged by these data, which we think demonstrates the potential to provide significant improvement in disease activity beyond what has been achieved by agents today. Our immunology ADC platform has potential well beyond our TNF steroid conjugate. We are focused on identifying the most selective targets on immune cells that drive a wide range of diseases, many of which have no or very limited therapeutic options. For example, as shown in the figure on this slide, we can target fibroblasts that play a key role in diseases such as scleroderma and idiopathic pulmonary fibrosis or cell types such as B cells and dendritic cells that may play a key role in lupus. For the warhead component of the ADC, we're focused on identifying additional payload classes that will allow us to regulate a wide range of immune cell functions. These include immunosuppressive and immunoregulatory payload classes beyond the glucocorticoid payload, such as targeted kinase inhibitors. We currently have 4 next-generation immunology ADCs in preclinical development, and we're very excited about this platform technology and the potential that it holds in immunology. As I noted earlier, a key component of our immunology R&D strategy is to pioneer treatments in new diseases with high unmet need that fall within our existing call points. We have identified 8 diseases that fit our strategy for scientifically attractive areas with high unmet need. Novel therapies in these diseases have an opportunity to make a significant impact on patients' lives if highly efficacious agents can be successfully developed. For science and clinical understanding of many of these diseases is still emerging. Therefore, we consider them to be high risk, but also high-reward opportunities. As outlined on this slide, you can see our full pipeline as well as the specific immunology programs currently in clinical development. Beyond the programs outlined here, we have more than 25 additional immunology assets in preclinical development. Before I turn the call back over to Liz for Q&A, I'll wrap up by underscoring a few key points. AbbVie is favorably positioned as the clear leader in immunology, with best-in-class agents spanning multiple mechanisms of action. The immunology market remains very attractive, with growth expected to be driven by next-generation mechanisms of action, like SKYRIZI and RINVOQ, that transform the standard of care to address high unmet need. AbbVie's world class commercial, sales, medical affairs, market access, and patient support capabilities uniquely position us to maximize the value of our immunology portfolio. And we have a robust immunology R&D strategy, aimed to further redefine the standard of care in core indications and expand into new disease areas. SKYRIZI and RINVOQ are already demonstrating their transformational nature, as evidenced by the unparalleled success of their initial launches in psoriasis and RA. The trajectories of these launches, coupled with the robust Phase III data for follow-on indications, give us confidence in our ability to collectively deliver more than $15 billion of SKYRIZI and RINVOQ risk-adjusted revenue in 2025. With that, I'll turn the call back over to Liz for Q&A.

Thanks, Mike. We will now open the call for questions. Operator, first question, please.

[Operator Instructions] And our first question will come from the line of Chris Schott with JPMorgan.

Great. So much for the questions and appreciate all the color and the meeting today. Very helpful. I just had 2, just diving a little bit more into the indications and some of the peak sales targets. I guess the first one is when I think about the GI indications for RINVOQ and SKYRIZI, it seems like your sales targets here are largely unchanged versus the 2017 update. And it does appear that these indications are maybe a bit under-indexed as a percent of your longer-term immunology sales versus what we see for Humira's mix currently. So is that just a matter that these indications haven't been derisked enough, or we haven't seen some of the Phase III data yet? Or are there differences in the market dynamics in GI versus some of your other indications that maybe are leading to upside and others, but less upside in GI? And then my second one was RINVOQ in atopic derm. Just a little bit more color in terms of the $2 billion target, what that implies for first-line versus second line usage? And maybe just address the flu death that we saw in the clinical study. I know that was a topic of conversation last week. I just want to see how much impact do you see having -- that having in terms of where RINVOQ ultimately sits in the treatment paradigm?

Chris, this is Rick. So I'll cover part of that question, and then I'll have Mike cover another part of it as well. I think if you look at GI, GI is a very important area. It's an area where even today, patients don't get adequate response. And they can't maintain that response over a long period of time. I would say, from a derisking standpoint, we've seen enough data on SKYRIZI and RINVOQ that I think it gives us a high level of confidence that these assets will allow us to raise standard of care once again. If you look at the forecast, I think what you're really seeing as it relates to the forecast, is those IBD approvals come in pretty late, and we've tied a benchmark here to give the investors a perspective of 2025. So the window just isn't long enough to see the upside. But I'd say based on what we've seen in the data so far, our confidence in being able to bring these to the marketplace, I think you can expect, together with RINVOQ, will be very significant therapies. And likely, will generate significant upside from what we're projecting here. But it will be beyond 2025. It will be in that 2027 kind of time period where you'll see those ramps. So maybe Mike and Jeff, why don't you cover number two?

Sure. This is Mike. I'll start. And then Jeff may want to add some color on first-line versus second line dynamics. What I would say overall for atopic dermatitis is we see this as a very attractive market, one that we expect to grow considerably in the coming years. And if you look at how new entrants in immunology perform, new mechanisms coming into this space, one typically sees the initial uptake to be most rapid in the inadequate responder population. So in this case, that would be the second-line population. It doesn't mean that there wouldn't be some first-line use upfront, particularly, for example, in more severely affected patients, where the very high levels of response on measures like EASI 90 and EASI 100 and the rapid response may be very important, but you just expect that initial uptake to be most rapid in second line. And you'd expect that first-line uptake to increase over time as longer-term data roll out and as physicians get experience with real-world evidence and real-world use of these agents. That is generally the case in immunology. We've seen similar dynamics, for example, with the RINVOQ RA launch, and we would expect those dynamics to play out here as well. Jeff, I don't know if you'd want to add anything else on first-line versus second line.

I think, Mike, you covered it. But just to reiterate, when we look to our research and study with the dermatologists, they generally report that early on. It's going to be primarily a second line agent. Although they're very, very intrigued and understanding they haven't had their hands on something that is this effective so far, that they anticipate that frontline will grow over time. And just to give more color to Mike's remark, even for RINVOQ in RA, which is, as Elaine highlighted, it had us hit the in-play market share lead or tied with Humira, we still see about 65% of RINVOQ is used second-line plus. And then we see first-line growing over time. So we see very much the same dynamics -- or we anticipate the same dynamics first, starting in second-line and then moving towards frontline competition as time goes by and comfort is an increase -- has increased.

And then I'll address your question on benefit risk. It's important to look at benefit risk in the context of the overall program that we've designed. We've studied more than 2,000 -- well above 2,000 patients in the atopic dermatitis program as well as an additional several thousand across the other indications that RINVOQ has been studied in and in RA, where it is already approved. And we see a very consistent and very favorable benefit risk across that setting. It's very difficult to interpret individual events because we know that when you study thousands of patients, rare events can occur in all groups, including in the control groups. And so we have looked at this case very carefully. It was a case of influenza A that was complicated by pneumonia, that was fatal. That was the only death across the atopic dermatitis program. And when we look across the program, we don't see a signal for other events that would be similar. We don't see a signal for fatal infections or increased risk of overall death, either within the atopic dermatitis program or across the program more broadly, pulling in several thousand additional patients from the other indications. So we remain very confident in the overall benefit risk profile, both in atopic derm and overall.

The next question will come from the line of Randall Stanicky with RBC Capital Markets.

Great. I just had 2 quick ones. When you did the Allergan deal, one of the messages was the opportunity, staying with the GI theme, to leverage that footprint with VIBERZI, Linzess and others. Can you just talk about your appetite for that area, would you add to that opportunity and how you're thinking about that going forward? Then I have a quick follow-up for Rob. Just -- can you just comment on the margin profile? Should we think about, as we approach the 2023 biosimilar entry on Humira, think about SKYRIZI and RINVOQ, largely offsetting Humira from a gross margin perspective because they're similar, but how should we think about the OpEx spend to support the immunology franchise into 2023 and then on the other end of that as well?

Yes, it's Jeff. I'll take the first question around our -- you highlighted our GI care franchise. Now this is different than the IBD immunology franchise. And we have 2 leading products in that franchise there. We have Creon, which obviously has about an 80% share in that category of EPI. And we have Linzess, which has about a 70% share. So we have 2 very, very strong anchor assets in GI care that have long runways in terms of exclusivity. So we're always looking to see how we can build in GI because, not only do we have IBD, we have these particular products, we actually have MAVYRET that has a good GI presence with HCV. So it's something that we're on the lookout for, but we're very happy right now with our anchor assets and the progress that we're making in terms of our GI franchise.

All right. Randall, this is Rob. So on your OpEx question. I think the best way to think about it is, if you look at operating margin today, it's about 48%. You'll see that operating margin expand over the next several years as we ramp the synergies to greater than $2 billion by 2022 as well as we've demonstrated the ability to leverage the P&L with sales growth. So we do expect the top line to grow over the next several years. So you'll see that operating margin profile expand heading into 2023. And then with the U.S. Humira LoE, we do expect to see that -- the operating margin profile pull back. And that's largely because it's -- think about it from a mix perspective. So even on the gross margin side, while within immunology, you won't see big mix trade-off. From the overall portfolio of the company, you will see some trade-off, and that will put our operating margin in the 45% range, which is still top tier in the industry. And then as we return rapidly to sales growth, you'll see us once again leverage the P&L, expand our operating margins. So even in the trough year of 2023, we're still top tier. And then beyond that, you'll see that grow very nicely as we return revenue growth rapidly.

Randall, this is Rick. I agree with everything Jeff said earlier on point number one. But the one thing -- the basis of your question, I think, is what are we looking at to continue to grow our GI franchise or, in general, our immunology franchise. And I think one of the reasons why we wanted to do this Immunology Day is I think people think about our immunology business as, okay, you're going to replace Humira with RINVOQ and SKYRIZI and they're better agents, and therefore, you can offset the impact of the biosimilars. Well, that's true, if you look at it at a certain point in time, and we're certainly trying to illustrate that point, and I think it's very clear to us and hopefully, it's very clear to investors now that those 2 assets clearly have the ability to do that. But our immunology strategy is much bigger than that. If you think about what we have been able to do is we're now bringing agents that are raising standard of care, which gives us the ability to compete in all the markets that we're in today, ultimately, probably achieve greater market share positions because of the performance of those assets. But we have been assembling now for years, platform technologies. Immunology is an area that we know scientifically and biologically very well, and like I say, we're the clear leader in market. And it is those platforms that are going to allow us to expand into many more immunology diseases that will give tremendous growth to the business over the long term. If we can bring effective therapies in areas like lupus and other areas that are very poorly treated today, it allows us to continue to be able to expand. And platform technologies like the steroid ADC, give us tremendous promise to be able to ultimately do that. So this is an area that we're absolutely committed to, and we're committed to expanding the footprint of the diseases that we treat in immunology. And I think we have the tools in our toolbox to be able to do that very effectively over time. So it's not just how do we replace Humira in the marketplace. It's how do we do that very effectively, how do we raise standard of care, and how do we expand the breadth of diseases that we can treat in this area.

The next question will come from the line of Steve Scala with Cowen.

Can you hear me?

We can.

Well, first, and congratulations on a very impressive presentation. I would like to start out with 2 clarifications on things that were said, and these 2 clarifications are linked. The first is on Humira. Is the company guiding to a 90% reduction in U.S. sales in 2023, which will be 2x the foreign hit of 45%? I just want to make sure I understood that. And secondly, Rick, you said that the company will quickly return to growth post Humira's patent expiration. But I thought the company had been saying that you would grow. So there's no return. You would grow through the patent expiration. So is growth still the plan through this point -- through that point? And then lastly, RINVOQ and SKYRIZI are said to be more than $15 billion in risk-adjusted sales in 2025. I'm curious what is the unrisk adjusted number for 2025?

Okay. Steve, this is Rick. I'll cover some of these, and I don't know, others can chime in along the way. So we certainly were not trying to guide that Humira is going to go down 90% in 2023. I think fundamentally, if you step back and you look at this, it's impossible at this stage to really give you a -- an accounting-grade accurate number on what the erosion will look like in 2025. We're making a number of assumptions. We have communicated, I think, very clearly that if we look at our international experience and someone wants to try to model what that erosion rate will look like, I think that international experience gives you at least some guidepost to work against. We've seen roughly 45% erosion in those countries that have lapped biosimilar activity. We've said that's a reasonable starting point for the U.S. to be able to model what the impact might be. And I think what we've publicly said on a number of occasions is, let's say you use the number around 50%, and you flex it up and down 10%, we feel like that should get you into the range of what we think is possible in 2023 as it relates to Humira erosion. Now the way to think about it is you have this engine of growth underneath Humira at AbbVie that is growing very rapidly. In other words, everything else, except Humira. That will continue to grow. SKYRIZI and RINVOQ are in that. Our hem/onc business is in that, our neuroscience business is in that, our aesthetics business is in that. We're going to see a onetime hit in 2023, a substantial onetime reduction in Humira revenues as we face biosimilar activity. That engine underneath is going to continue to grow and it will obviously mute that impact going forward. We're trying to illustrate, by pointing out what 2025 looks like, is that under any possible realm of possibilities, SKYRIZI and RINVOQ can more than offset any impact that we would see from biosimilar competition. So more than offset are the operative words here, right? So we weren't trying to signal that we thought they would be required to offset that level of erosion against Humira. I think you will see a onetime hit, a negative hit in 2023 and then rebounding rapidly to growth in 2024 and beyond. And then in your nominal forecast -- we normally don't publish nominal forecast. You can assume the nominal will be higher than the risk adjusted. Anything you want to add?

Yes. I know, Steve, you may be referring to a few years back, we gave a nominal -- I think, back in 2017, and then we updated it with risk-adjusted, which is the greater than $10 billion in 2025, and now we've updated that to greater than $15 billion. I think the best way to think about it is the indications that are not yet approved -- or think about it from a late-stage development. We would use what I would consider industry standard for risk adjustment. So when I think about the $15 billion we've given you today, it's really the IBD indications would have the largest amount of risk adjustment. But the other one, obviously, for the ones that are on market do not have a risk adjustment. AD doesn't have a risk adjustment, and so it's really those that will become later, in the next few years, that do have a risk adjustment, but we're not providing an update to nominal numbers. I think there was some confusion last time between nominal and risk adjusted. And so we really just want to stick right now with risk adjusted for clarity.

And remember, risk adjustment in the context of how we're using them here tend to, let's say, IBD, as an example, tend to be a more -- more of a function of the timing of that approval, right? In other words, we have a high level of confidence that these assets, based on the data we already have, are going to be successful in IBD. We are obviously trying to do everything we can to advance them as rapidly as possible into the marketplace. And so if the IBD indications were to move up in time, that would obviously give us a benefit. So it's a function of both timing as well as technical risk. I wouldn't want you to walk away thinking there was a tremendous amount of technical risk on IBD because there's not.

The next question will come from the line of Geoffrey Porges with Leerink.

And I share your appreciation for really a comprehensive teaching on these immunology indications. First, Rick, wondering if you could share what your net pricing assumptions are that are implicit in the forecast, given that -- some political uncertainty. Secondly, you've talked about the U.S. and EU, but can you talk about the opportunity in China and whether that's incorporated in your forecast? And then lastly, you shared the 30-milligram data in atopic derm compared to the incumbent, but didn't share the 15 milligram. How certain are you that you will get the 30 milligram in the label? And what would that do to the forecast if you did not?

Okay. So maybe I'll take number one. Jeff, maybe you want to talk a little bit about China? And then Mike can cover the third one. So we obviously don't necessarily talk about specific pricing assumptions. The data that we are providing you in the risk-adjusted forecast is essentially the data that's in our LRP. Now when we go through our long-range planning strategy, we build into that strategy. The impact that we believe will occur, as it relates to pricing across that period of time, and in particular, I would say, in this time window, it's critically important because you have to evaluate the impact the biosimilars coming into the market will have on the overall pricing in the market. That has been reflected in the numbers that we are providing to you. So it has our best estimate as to what that impact will be, including what we believe will be the market impact associated with biosimilars. What it doesn't have built into it is if the U.S. were to do something. It's unforeseen at this point from a pricing standpoint. So it doesn't have any kind of overall impacts like that built into it, nor would that be prudent at this stage of the game to ultimately do because we really don't have any visibility into anything that looks like that. But I think we're comfortable with what the pricing assumptions we have made on RINVOQ and SKYRIZI in the backdrop of this long-range plan.

Yes. And I'll take the China question. So as you saw from the presentation for RINVOQ and SKYRIZI, we moved from roughly $275 million today to around $4 billion in the forecast. And most of that are in the developed markets. Now China is something that we continue to study and look as a potential attractive upside, in fact. We recently, this year, received centralized formulary approval for Humira, and just prior to COVID, we've seen some nice momentum there. So we'll continue to study China. But again, largely, the forecast is based on the established markets.

This is Mike. I'll take the question on atopic dermatitis. Just to make sure we're clear, the head-to-head study against dupilumab only looked at the 30-milligram dose. So there is not an additional dose group that we have not yet shared. We've shared top line for the entire study. Having said that, if you look across the program, we did study 15 milligrams across all of our core registration studies, and the 15-milligram dose performed very well. And if you look at cross-trial comparisons, with appropriate caveats in mind, you see that the 15-milligram dose performed very well compared to the benchmarks. So we consider both 15 and 30 to be very competitive. We do believe that there are some patients that may gain additional benefit from the 30-milligram dose, and that's why we're pursuing it. With respect to our certainty of getting it approved, what I would say is, we're very confident in the benefit risk. We've run a broad program. We have 3 core studies that examine both doses. We have the 3b head-to-head study that has data on 30 milligrams, and across that, we see a favorable benefit risk. So we feel it's appropriate to pursue both doses, and we have confidence in the benefit risk. Having said that, we think both the 15- and 30-milligram doses are very competitive doses.

The next question will come from the line of Vamil Divan with Mizuho.

So just a couple, if I could. One -- I appreciate all the detail as well at 2025. I think Pfizer's XELJANZ is going to lose its patent protection in 2026. It's obviously not going to be in atopic dermatitis, but in things like RA and others. Just want to kind of get a sense of maybe how you're thinking about that impacting RINVOQ as we look beyond 2025. And then the second question, and I think this kind of goes to some of the discussion earlier on AD and the safety side of things. And maybe if you could just sort of share your view. I think a lot of us view the dermatology community as potentially more conservative in terms of adopting new therapies, new mechanisms. And so for something like atopic dermatitis, there may be a sort of higher bar that they place on incorporating something like oral JAK in that space. So can you just talk about sort of the -- how much efficacy is going to drive the decision making? Or is it how much safety might be the deciding factor, at least in those first couple of years on the market?

So on XELJANZ 2026 LoE. As I mentioned a moment ago, obviously, this forecast is derived from our long-range planning activity, which is a very rigorous part of how we operate the business. So we would have anticipated, across this long-range plan, the impact that we felt the LoE of not only our own products, but other products in the category as well, and that should be reflected in this. Anything, Rob or Jeff would like to add?

No. I think it's very clear.

Okay. So number two, do you want to cover that one?

Yes, this is Mike. I'll go ahead and cover number two. As we said earlier on in this session, we see a very common dynamic as new mechanisms enter the immunology market, that they get their initial experience predominantly in inadequate responder populations and then move to frontline over time. One, we'll see frontline use at the outset, typically in more severely affected populations, those for whom higher efficacy is even more important. But again, you see this dynamic where the initial experience is typically in inadequate responders, and then you move to the frontline. And I think that dynamic will also play out with derms and particularly in the atopic dermatitis market. So if you look at that market, there is substantial room for growth. There are a large number of patients who would benefit from an immunomodulator like RINVOQ that drives very high levels of response and drives very rapid response and prominent response on itch. If you look at the effect of dupi in that population, only about half of patients, if you look at their core registration studies, gain an adequate response from dupi, if you consider an adequate response to be an EASI-75 response. So that population, the inadequate responder population, is actually quite substantial, and in some ways, is being warehoused for the entry of an agent like RINVOQ. And so we think the initial experience will be there. There, we think the very pronounced efficacy, the high levels of response of EASI 90 and EASI 100, the rapid response, the features we've already talked about, will be very important to driving uptake. And we think that the benefit risk is very appropriate for those patients. Many of these patients have extensive disease, they have significant morbidity associated with it. There are flare-ups that are extremely disruptive to patients' lives. And we absolutely see a benefit risk profile with our agent that we think is appropriate there. And so I think in that inadequate responder population, efficacy will be very important, and safety is very appropriate. And I think you can expect derms to start there, gain experience and then increase their frontline use. I do think that there is some room for frontline use from the start, particularly in those more severely affected patients where efficacy parameters will be more important. But I think it's also very important to consider the benefit-risk profile across the very broad program that we've run in atopic dermatitis. We've run 4 studies if you now include the head-to-head study, which is a IIIb study. We've treated more than 2,000 patients, have data on those patients not only to support the efficacy but to support safety and to support benefit-risk. So we think that is the dynamic that will play out.

And this is Rick. I'll just add a couple of items to what Mike said because I agree absolutely with what Mike covered. I realize the market is probably trying to figure out exactly how we will impact this market going forward, and I think there's a couple of things that we put this in perspective for the market. One of the things that Jeff mentioned in his comments is that we -- this market is roughly about $3 billion, $3.5 billion today, and it will triple over time, right, by 2025. So that means it's going to be a $10 billion-plus market. It looks a lot like the psoriasis market did about 10 years ago, where biologic penetration rates were low single digits. And what do we see happen? We saw those penetration rates grow over time. So one of the things that's important about this market is growing this market. I think some people think it's a zero-sum game between us and dupi. It won't be a zero-sum game. This is a market that has tremendous growth opportunity. There are many, many patients who are not getting effective therapies today who need those effective therapies. That's the single most important issue as we enter this market. The second thing is, as you get higher efficacy agents, again, reflect back on the psoriasis market. I remember a lot of people saying TNFs will never be successful in dermatology, in psoriasis because they have a black box. And what do you see? TNFs are pretty d*** successful in this market. Physicians look at the data of an individual drug, they understand that data and they make the right decisions for their patients based on that data. And I'd say we feel very, very confident in the data that we produced on RINVOQ. And so I think those are some of the things that you can look to that would give you some guidance as to how this market is likely to play out.

Our next question will come from the line of David Risinger with Morgan Stanley.

Great. Thank you for hosting this very helpful and informative session. So I have 2 questions. The first is with respect to the potential for U.S. Humira to decline. So ex-U.S. HUMIRA sales declined 45% during the first year following biosimilar competition. But the U.S. will have doubled the number of competitors and including a few with likely interchangeability, so it will be quite different in the U.S... And the U.S. is also a single market. It doesn't span across various countries, which may have added some complexity for the biosimilars in Europe. So I guess my question is why wouldn't the U.S. decline, be at least 1/3 worse or maybe 60% or more in 2023? And then second, Mike, you had mentioned increasingly using Bayesian statistical analyses in R&D. And I'm interested in you providing some more color on that because the FDA has been critical of drug trials involving Bayesian designs for many years. I just looked up online that most recently, in October of 2019, the FDA said, "Bayesian methods can increase the chance of erroneous conclusions." So if you could provide some more color on your plans, that would be helpful.

David, this is Rick. Maybe Rob and I will cover number one. If you look at what the assumptions are that we built into this, just to maybe ground everyone, we've assumed that there will be roughly 7 competitors that enter the marketplace in 2023, 2 of which will be interchangeable. So we tried to reflect that in what we have forecasted. You have to remember in 2023, mathematically, you're going to have the first full month at non-biosimilar pricing, right? So that has an impact on what the erosion rate will look like in 2023. Obviously, that will have a carryover effect into 2024 when you have a full year impact in 2024. As I said earlier, as we model, we modeled various scenarios. I think we have reflected what we think is an appropriate level of erosion in how we're building out that model. The other thing that's different in the United States is that you have large managed care organizations that basically drive most of the volume through their formularies, and that's not something that you see in international markets. So there are differences. I believe we have reflected what we believe will be the competitive intensity in 2023. We're continuing to evaluate that, and we'll continue to evaluate right up until 2023. But I think we -- the point of it is, based on all the other aspects of our business, including SKYRIZI and RINVOQ, we have a high level of confidence that we can deal with any scenario that plays out in 2023. Rob, anything you'd add?

So with respect to the question on the use of Bayesian analyses, the comments that I made in our prepared remarks around the use of Bayesian analysis referred to early development studies and proof-of-concept studies where one is trying to establish pharmacodynamic effect and early effect on clinical endpoints and make similar sorts of inferences. It's true that the FDA has not been supportive of Bayesian analyses in core registration trial, so in pivotal studies to support registration. But we're not talking about using Bayesian statistics in that setting. In that setting, we use the sort of statistics that you would expect us to use in a Phase III trial, which is, for the statistically savvy on the call, a frequentist approach. The comment that Bayesian analysis can increase the risk of erroneous conclusions refers to the fact that Bayesian methods typically include the use of what's called a prior or a prior probability, which incorporates your belief about the mechanism before the study and then uses the study data to modify that prior. And if one uses a strongly positive prior, that can influence the analysis. Even when we use Bayesian methods in early development, we do not use strongly positive priors. We would use neutral priors, which, in statistical jargon, we would call non-informative priors, which means we let the data drive the decision rather than our prior belief. So we don't see any risk to our methods in approval because we use standard frequentist approach in Phase III. And in early development, we use a number of methods to control the risk of false positives.

The next question will come from the line of Navin Jacob with UBS.

This is Sriker Nadipuram on for Navin. Just a couple. So in 2025, can you talk about what patient market share you're assuming for RINVOQ and SKYRIZI in the key indications? And then you talked about possibly targeting subpopulations in UC and Crohn's. Have you defined these? Are you talking about inadequate responders to current biologics? Or are there other ways you're segmenting the patient population where you're seeing increased efficacy for RINVOQ and SKYRIZI? And then just briefly on a-derm, you just alluded to that there may be warehouse patients from dupi, inadequate responders. Are you expecting a bolus of patients upon approval? And how much growth do you think you can get from new patients versus dupi existing patients versus untreated patients versus Dupixent failures?

It's Jeff. And to give you some sense of how we're thinking about share, it's informative to think about the prior guidance, which had that high single-digit share. Now we've seen that a huge amount of the growth is going to come from just our base momentum on RINVOQ and SKYRIZI, as you've heard. So when you think about what we can see clearly now, we see that we have in-place share for SKYRIZI of about 33%. So that's 1/3. And we have a patient share -- or TRx share of about 13%. So -- and the relative RINVOQ numbers, as you saw, were 16% in-place share with about 4% for total market share. So as we basically project forward, we see that with the profiles that we've talked about, our ability to maintain that high level of in-place share, what happens over time as the compliance and adherence kicks in, you start to see that your market share start to approach that level of share. So we have some very, very significant changes from high single digits to the share that we're projecting going forward. That's how we see it playing out. Suffice it to say that across all of our indications, as we see the data come through, that we have higher share ambition across these major indications. So that's roughly how we see things start to play out. I'm going to let Elaine talk a little bit. Your second question was beyond, let's say, bio-IR, other sort of subsets of patient populations in terms of the IBD space that we can potentially look at.

Sure. Thank you, Jeff. As mentioned, we currently look at both bio-IR and bio-naive patients in IBD. One of the things that we are exploring in our clinical studies is the ability to stratify patients by different groups. We also are starting to look in some of our early development programs at targeted therapies based upon biomarkers. This is something that we anticipate will continue to evolve over the upcoming time period. But of course, at the time of launch for both RINVOQ in ulcerative colitis and SKYRIZI in Crohn's disease upon FDA approval, we would expect to see the more standard approach in what has been demonstrated in the clinical studies to date. Data will be forthcoming as mentioned by Mike on SKYRIZI.

And this is Mike. I agree with everything Elaine said about that point. What I would say is the use of molecular profiling and biomarkers to identify responsive population is more of a longer-term goal in this space. We've seen progress made in oncology, but we have not yet seen significant progress made in other areas. That doesn't mean that as leaders in the field, we won't continue to do research in this area. But I think in the near term, certainly with molecules that are either on the market today or nearing the market like SKYRIZI and RINVOQ, you see -- you can think of us using primarily clinical factors like bio-IR or bio-naive characteristics. And we're very fortunate that based on the data we have, we would expect strong response in both of these patient segments. The UC Phase III data in ulcerative -- I mean the RINVOQ Phase III data in ulcerative colitis that we recently top lined illustrate this point, I think, very clearly.

And then it's Jeff again. Your third question in terms of the atopic derm market, I think it goes back to some of the points that Rick made, is we're anticipating, given the very, very low penetration and the fact you only have one advanced therapy out there, that you'll see a fairly rapid expansion into lines of therapy. And there's really 2 segments of patients that are out there. You have the patients that over the last few years, have just not responded to dupi and are now sidelined. Now I wouldn't say that, that would be a population that's sort of like it was in the old days with the HCV in terms of a warehouse. But there's still a lot of patients that are sidelined and are back on their topicals, they're back on basically PUVA, light treatments and other sort of substandard therapies. And then you have another segment of patients that are basically suboptimally treated with dupilumab. Either way, we see both of those populations contributing to the first set of RINVOQ AD use as dermatologists gain comfort and start to move towards the frontline over time. So I don't know if I would call it a warehouse, but for sure, there are significant populations of unmet need out there in the marketplace.

The next question will come from the line of Gary Nachman with BMO Capital Markets.

Okay. First, what have you been doing now with payers to prepare for the HUMIRA LoE in 2023? Have you had any roadblocks at all with SKYRIZI and RINVOQ thus far that could improve further as you get more indications for those products? So when you sign a payer contract, how long do they typically extend? So any changes you expect with SKYRIZI and RINVOQ potentially starting in '23? And then on the commercial side, describe what areas you would need to invest in the most with respect to where your current infrastructure is as you expand new indications for RINVOQ and SKYRIZI like AD and IBD to get to your revenue targets?

Okay. I mean on the payer decisions, obviously, -- this is Rick. Obviously, access is an important component of our U.S. strategy. I think we've made that point very, very clear. We have a very strong organization in the U.S. It has good relationships with all the managed care organizations. Typical contracts are 2 years roughly. And I'm obviously not going to talk about a lot of specifics associated with the payer contracts, but what I would say is we don't anticipate -- we haven't seen and we don't anticipate any significant roadblocks to continuing to maintain very high levels of access for SKYRIZI and RINVOQ. And that has to be an important part of our strategy going forward as we expand those indications, and so I can tell you we have contemplated that. And we don't plan on any issues related to access as those indications roll out.

Yes. It's Jeff. I'll add to that. Rick's thoughts are right on the money. And we actually haven't had in the early phase of our launch for RINVOQ and SKYRIZI any major roadblocks on the access. In fact, that's been one of the catalysts for the accelerated and very significant ramps that we've had. So we had highlighted, based on the clinical profiles of those 2 agents to our customers, in this case, the dermatologists for SKYRIZI, the rheumatologists for RINVOQ, that we would have HUMIRA-like commercial access for those brands. And that's what we've been able to deliver. And so given the profiles of these medications and our ongoing connections with the payers, we are anticipating that we have that type of continued strong access over time. So no major roadblocks from what we can see so far. Obviously, that's only one aspect of the commercial execution. To give you a little bit of flavor on the rheumatology, why we're confident as we see these indications gate in. So right now, we have a large sales force that's talking about RINVOQ for RA. We have another large sales force that is talking about HUMIRA for PsA and AS. By the middle of next year, we'll have 2 sales forces primarily really educating those rheumatologists on these best-in-class assets. So there's multiple aspects to how we come and go at this market to maximize the uptake of these innovative medicines. And then just a follow-up on your other investment question. I talked a little bit of flavor on how we think about the sales force. We think about high levels of share of voice. The other aspects we think will be quite important that is an existing mix of our investment is our consumer activation. We highlighted that before as well. There's certainly no question that as we enter into the atopic dermatitis market and the ulcerative colitis market and IBD market, that we'll continue the significant level of consumer investment that you've seen over time with HUMIRA. We believe that we've come up with best-in-class assets for consumer activation, and we'll continue that as we gate in the new indications over time.

And this is Rob. Just as you think about investment, because we're participating in many of these indications today, we have been -- or as we have these new approvals, we have been redeploying that investment. Why when you look at our SG&A year-over-year, even going back to last year, you didn't see us grow the top -- the absolute amount of SG&A is because we were redeploying from HUMIRA. That said, we do have a new indication in atopic dermatitis, so there will be some level of incremental investment. But we are doing a fair amount of redeployment here as well.

Our next question will come from the line of Terence Flynn with Goldman Sachs.

Appreciate all the detail today. Maybe just, first, a big picture one. Is there any opportunity to think about combinations down the road in immunology? Obviously, that's something we've seen in a number of different therapeutic areas. I know there are some limited amount of studies here. But as you guys think about developing your early to mid-stage portfolio, is that a big part of the longer-term strategy to really maximize efficacy? And then for RINVOQ, you talked through this a little bit, but in terms of the choice of dose, there's obviously a range of doses you've explored. How should we think about pricing across some of these higher doses? Is this going to be fixed pricing at one formulation? Or is there a potential to have kind of step dosing as you go up? And then the last one. Rick, obviously, you gave some initial commentary on your third quarter call about a month ago regarding the 2021 outlook. But given the resurgence of the virus across the states and then the rollout of the vaccine, I was just wondering if you could give us any updated perspective on how you're thinking about '21.

Okay. So this is Mike. I'll start and then hand it over to Jeff for the question on pricing, and then I think Rick will probably close. With respect to pursuing combinations in immunology, historically, that's been quite challenging, although there's a limited number of approaches that have been tried and they have typically been overlapping mechanisms, either dual interleukin inhibition or the combination of, for example, an IL-1 inhibitor and TNF. And that has proved to be challenging. But we do believe that there is potential particularly if we study combinations of nonoverlapping mechanisms. So that might be the T-cell and B-cell compartment or mechanisms that might impact the innate acquired immune switch, for example, which could be particularly relevant to lupus. And so we will study combinations. It's not the primary part of our strategy because it has been so challenging historically, but we do believe there are some opportunities to pursue that. And we will pursue those opportunities. Our JAK-BTK combination in lupus is one example, and we would have other examples that are still in late preclinical development that I think could be quite promising. And so we will pursue both novel mechanisms that drive higher levels of response, novel mechanisms that attack the problem from a different angle such as promoting mucosal healing directly in inflammatory bowel disease, just as an example of that sort of approach, and we will also pursue rational combinations where we believe the mechanisms are particularly complementary.

And I'll take the pricing discussion. It's just premature right now to think about how we may price these different doses because of the dynamics where we are. Certainly, we're taking in a net price understanding as we look at our long-range forecast. But it's something that we'll have to look at and continue to study. Whether it's a flat pricing, linear, nonlinear, those are all things that we will have to take the decision in the future, and it's just premature right now for any sort of guidance there.

Okay. And then this is Rick on 2021. Yes. I think if you look at fundamentally, our business has been extremely resilient during the COVID crisis and has performed exceptionally well, I'd say, across the board. And so I think we're fortunate from that standpoint. I think it's a function, to a great extent, of the critical nature of many of the medicines that we produce. I think as we are seeing resurgence in the virus, certainly, I think when we're talking about our business, are we just talking about society more broadly. I think all of us are certainly pleased to see the launch of Pfizer's vaccine, and more will follow hopefully here. And ultimately, I think that will be the path to final recovery from this pandemic. But between now and then, we're obviously seeing increasing infection rates. We're seeing various jurisdictions around the United States and even around the world take further actions to try to control that. I'd say we have not seen nor do we expect to see any significant impact on the business. Many of the health care providers, including the aesthetic providers for our business, have now learned how to operate in this environment. We don't see shutdowns that will be negatively impacting them. So I feel very good about what 2021 looks like. I feel very good about what the rest of '20 looks like. And I feel very good about what '21 looks like. We'll provide guidance on our fourth quarter call. And I think we have a lot of enthusiasm for how our immunology business is going, but more broadly, how all of the growth drivers of the business are going from this year as well as carrying into 2021.

The next question will come from the line of Greg Gilbert with Truist.

I was curious -- I have a strategic question about areas of focus in psoriasis and a-derm. Are you interested in topicals since patients will always be managed at least in part by topicals? And I'm asking about non-JAK topicals in this case. It seems like you don't view the market in a zero-sum game kind of way and you have great efficacy, but there's a huge volume opportunity for a better topical. Secondly, do you think topical JAKs can be competitive with injectable versions in psoriasis and AD? So more specific on JAK there. And then lastly, Mike, do you have a view on TL1A as a mechanism of action in IBD.

Maybe I'll just give you a high-level perspective for number one, and then Mike can fill in more details on some of the technical challenges as it relates to topicals. I'd say, for the most part, we don't have topicals that are in our pipeline. I would just say it has not been an area of focus for us. We've evaluated it a number of times in certain areas. Some of it relates to just being able to deal with it from an efficacy standpoint. You can imagine if you have plaque over large portions of your body, it's difficult to deal with applying a topical to those large areas of your body. And so obviously, if you can have a highly effective therapy, an oral therapy or injectable therapy, that tends to give you just better performance. I'd also say that there are some reimbursement issues with topicals that are somewhat problematic. And so I'd say it's not a key area of focus. That's not to suggest that we would never look at one, but we have to have a specific fit. Mike, anything you'd add?

No. I would agree that topicals, while they have a role, are really addressing a different sort of patient population than where we are primarily focused. And as we said in our prepared remarks, there are some challenges with these topicals, particularly in the more moderate to severely affected patients where just the body surface area that's affected becomes a limitation. So under the right circumstances with the right mechanism, it could be something that could be pursued, but it's not been a primary focus for us. And for JAKs, I think one would run -- administered topically, I think one would run into some of the same limitations. You're generally treating severely affected patients in that moderate to severe category. They generally have extensive body surface area involved. And in those circumstances, systemic administration has significant advantages. With respect to TL1A, and there are a number of promising targets, in IBD, TL1A seems to be particularly involved in mucosal immunity, costimulatory pathway that many have postulated may be involved in IBD. What I would say is there's a wide range of approaches that we're studying. We certainly are interested in mucosal immunity. We're also particularly interested in mechanisms that directly promote epithelial barrier function, so different than the traditional immune-mediated mechanism, mechanisms that actually promote the wound healing response, if you will. And we think that the combination of immunomodulation with those restorative approaches, if you will, approaches that promote mucosal healing hold the greatest promise going forward.

The next question will come from the line of Tim Anderson with Wolfe Research.

When you say that RINVOQ and SKYRIZI will offset any HUMIRA erosion by 2025, that appears to be a comment specific to the top line. I'm wondering whether that applies to earnings, too. If it applies to earnings, I just want to clarify that, that would imply that 2025 earnings would be at or higher than 2022, which is the last year prior to a biosimilar entry. Consensus earnings for '25 is quite a bit lower than 2022. Is that likely too low or not? And then second question, when you give your 2025 sales targets, what does that assume about the whole rebate framework in the U.S., which for immunology drug is influential? Are your sales targets achievable even if that framework changes?

Yes. So Tim, this is Rick. Maybe Rob and I will cover the first one. I wouldn't say that -- you have to think through the speed at which the erosion will occur in 2023 and how we will invest in the business going forward. So what I mean by that is, obviously, we've described that we will have a fairly steep erosion curve that occurs in 2023. We don't plan on making cuts in things like R&D. That would be counterproductive in 2023. So you will see a period of time where you would see earnings or profits drop more rapidly over that period of time than you can offset them with RINVOQ and SKYRIZI. If I look at the overall profitability at scale of RINVOQ and SKYRIZI, I'd say it's a comfortable profit level versus HUMIRA at scale. And so over time, it will re-equilibrate itself. But I don't think it's a good assumption to assume that you won't see a bigger impact on profit in 2023 than you can offset with the sales revenue even with ramping of RINVOQ and SKYRIZI. I don't know, Rob, would you add anything?

Yes. I think the important thing to highlight here as well is what we're communicating is that we will return to growth very rapidly. So we are saying, in '23, we expect a step down, but we're going to see a return to growth by '25 or starting to see strong growth and then beyond that period. And as we look at consensus models today, what's not reflected is that growth in the second half of the decade, and we feel very good about that growth profile. So I think that's an important point to stress, is that we'll return to strong growth in '25, and the growth beyond that is very strong as well.

And then your second question, obviously, as I mentioned before, this forecast comes out of our long-range planning process. And that process looks at all aspects, both environmental aspects as well as business aspects. So it reflected pricing assumptions, shift in reimbursements, all of those kinds of things that we have visibility to and we can make assumptions and build models against. As we've said many times before, a rebate or a discount are one and the same to us, and so it doesn't change our framework very much. We didn't make any assumptions that discounting goes away. So we basically made an assumption, whether it's through the form of a rebate or through the form of a discount, that the current discounting environment would operate in some form or fashion. And that is how we built the forecast.

Thanks, Tim. That concludes today's conference call. If you'd like to listen to a replay of the call or obtain the slides referenced in this event, please visit our website at investors.abbvie.com. Thanks again for joining us.

That ends today's call. Thank you for joining us.