AbbVie Inc. (ABBV) Earnings Call Transcript & Summary

Hey, guys. I'm Timothy Anderson. I'm the large-cap pharma and biotech analyst at Wolfe Research. And we're at the start of our health care conference that runs today and tomorrow. We'll be talking with AbbVie next here for about the next 40 minutes or so, 3 members of the management team, Mike Severino, who's Vice Chairman and President, heads up R&D, among other things. He has been with the company since 2014. We have Rob Michael, who's EVP and CFO, he's been with the company since 2013; and Jeff Stewart, EVP of Commercial Operations, he's been with the company I think, since 1992, if I got that right, and Liz Shea is somewhere around there as well.

So I thought we'd start with some general questions here, and we'll have a wide-ranging discussion, but we'll see what we can get through. But first question, so 2021 coming to an end, 6 weeks left. How is the setup for 2022 looking for AbbVie? I realize you haven't given guidance yet. But if you could just talk about pushes and pulls on the financials and then talk about what you think the key catalysts are as we look forward?

Sure. I'd be happy to take that question, Tim, and then others may want to join in. What I would say is we're ending 2021 with strong momentum across the business. We have a number of franchises that are performing very, very well. The benefits of the Allergan acquisition and integration are becoming very clear with the breadth of our business, with the increased number of growth pillars, with the depth that we have in those pillars. And that will carry forward into 2022, we're quite confident. We're poised to continue that momentum. Obviously, we're not in a position today to give guidance, but we are confident that we can continue that momentum. And we have a number of important catalysts coming. What I would say is the updates to the JAK label and the new indications that we have under review, getting resolution on those issues, getting to a label on RA, getting to approvals on those JAKs, I think, will remove a large amount of the uncertainty that has been present since the FDA's initial announcement. We remain very confident in the benefit risk profile of the molecule. We remain very confident in those new indications. So I think as that plays out and as the Street sees that, that will be an important catalyst. We've had a number of favorable data readouts recently. VRAYLAR has a positive study in MDD, 1 positive one and 1 negative, although the negative had very favorable trends. Along with the prior completed positive study, that puts us in a strong position to file for that adjunctive indication in MDD, which should add to the breadth of VRAYLAR's clinical portfolio, if you will. And that's a molecule that is already performing very well and a molecule that we remain confident in. Our broader neuroscience portfolio is performing very well. We had the approval of QULIPTA with very strong data and a strong label. So we'll see that launch trajectory through 2022, and we're very confident in that. So we think that will be an important catalyst. And our oncology portfolio continues to mature. The hem/onc area has been a strength for us. The overall hem/onc assets are growing robustly. When you think about the progress we're making with Venclexta, for example, across a wide range of indications and the combination of Venclexta and IMBRUVICA, our pipeline behind that is maturing and our solid tumor efforts are also now starting to come to light. And of course, Aesthetics is performing very, very well, and that's an important component of the overall story and an important benefit of the Allergan acquisition.

And so all that's going to set up for obviously a top line that we would expect to continue to grow. We said that through -- leading up to '23, we'll see top line growth. You should expect operating margin to expand as we leverage the P&L. We'll also see synergies ramp. We've mentioned this year at $1.8 billion. We expect greater than $2 billion next year. So you'll see operating margin expand. We'll continue to pay down debt. We'll get to a net leverage of 2x by the end of next year. So I think we're firing on all cylinders. You're seeing a very nice, I'd say, top line growth for the company, operating margin leverage as well as the balance sheet improving as well.

I'm going to ask a couple COVID-related questions. Just latest update on how COVID might impact how AbbVie operates over the long term? So any lasting efficiencies that have been gained as you've learned how to manage through COVID or conversely, maybe there's inefficiencies that have been built in the system, where it kind of ties not only to the 2022 outlook, but possibly beyond as well?

Well, we've learned a lot about how to operate in the COVID environment as we all have. I would say, across the enterprise, different groups have adapted in different ways based on the needs of their business. For example, in R&D, I don't see lasting change specific to COVID in terms of how we operate, but we're continuing to drive efficiencies across R&D both on the operational side and the decision-making side. And so that work will continue, but it's not specifically driven by COVID. On the commercial side, there have been a number of steps that have been taken to improve efficiency during the period of COVID. And Jeff, you may want to comment on how that might roll forward in the post-covid environment?

Yes. Thanks, Mike and Tim. So in terms of overall dynamics from COVID, what we see when we look at our field teams, our field teams are essentially back up to pre-COVID levels of engagement. Now the majority of that is -- has returned to live engagement with our target doctors. It's not completely back to pre-COVID levels, but the rest is being soaked up by virtual visits, new technology approaches, et cetera. And as the commercial lead, I would say, one thing that COVID has accelerated, and I actually think it's a net positive for, certainly, AbbVie over time -- we thought we were fairly confident with digital technologies, ways of engaging different stakeholders, but that's accelerated in a very significant way. So whether it's digital approaches to engage patients, whether it's digital approaches and different ways to engage our target physicians, that's advanced significantly. So overall, I see it as things hopefully continue to normalize into '22 because we're not fully back yet, obviously, with the pandemic. We're close. That will actually have net impact improvements in productivity with our infield teams, and I think that's very encouraging. We also monitor our share of voice in terms of our ability to basically deliver the right types of engagements across our teams and our share of voice has been at or even higher than it was pre-COVID. So we feel we're executing at a very high level and we can see that in our ramps and our overall share performance across the vast majority of our business units.

And I would agree, I think the lasting impact for us is about productivity. We did have to, in a remote working environment, leverage technology to close the Allergan transaction, integrate the company. We did have some transient savings in travel and meeting expense, but I wouldn't view that as lasting is really more around the productivity measures. I think the commercial example is a very good one. But across the enterprise, I think we've just gotten smarter about how to work, utilize the technology -- digital technology to drive productivity throughout the company.

Another COVID question. There's been lots of coverage of supply chain disruptions across the world and across the industries, all kinds of industries. We haven't really seen this at all, I think, in pharma with any company. And I'm wondering why that is and if you feel like you're completely insulated from any of these supply chain disruptions.

I think if you view us, we're in an industry that provides an essential service. So we put the necessary safety measures in place to keep our plants running throughout the pandemic. We built raw material inventory to protect against supply disruption. And we also utilize third parties to extent we need to flex capacity. So I'd say those are the main reasons. We've kept our plants running in a very safe environment. We've always had, I think, a good eye on making sure that there's always product availability, and we've been able to manage the pandemic without any disruption as a result. I don't want to speak to my peers, I'm guessing they've taken similar measures as well.

Okay. I want to ask a high-level R&D question. Pretty much all the major drug companies, they work with a company called KMR. They participate in what's called the pharmaceutical benchmarking forum. AbbVie is one of these member companies, and it's super in-depth data. And investors would love to see it and it's pretty much always kept under strict lock and key. Occasionally, companies bring it out when it shows something favorable, Pfizer did this recently with Q3 results. So AbbVie belongs to this consortium, I'm wondering what R&D trends have been at AbbVie when you benchmark not only against your peers, but when you benchmark against your past performance. So things like phase success rates and cycle times, what have the trends been?

Well, you're correct, Tim. We use KMR, and we do extensive benchmarking across a range of measures both overall cycle time, cycle time for individual components that are critical to advancing the pipeline and of course, also for success rates. And what I would say is our performance has been strong. If you look at our performance from beginning to end on the slate of programs that we have brought through the pipeline over the last several years, we're top tier based on KMR benchmarking. And our aim is to continue that and to improve overall against our own past performance. For more recent trends, we break it down into components of what it takes to advance a molecule through the pipeline because for very recent trends, you don't have the ability to look beginning to end. And I would say we remain top tier in a number of measures particularly on study closeout, data reporting and time from data readout to submission. We have a program that we call Submission Excellence that has dramatically reduced the period from database lock to submission on our Phase III programs and brought it down to the range of a handful of weeks where it used to be historically in the industry, going back several years, 6 months, and so those are real-time savings. On the front end, we're also making improvements with the goal to be top tier, which we would define as top quartile and always trying to improve on that benchmark, and are making excellent progress against that as well. So we look at every aspect of what it takes to advance the pipeline. And we feel very good about the benchmarking that we've seen with the results, as I mentioned. With respect to success rates, we've historically been at or above industry benchmark success rates, both overall and by stage of development as well, and that's something else that we track.

Okay. Pivoting to a different topic. So after the Allergan deal, your base -- no, your revenue base is quite large, about $56 billion a year. And I'm wondering if there is an opportunity for AbbVie to shrink that base. We've seen certain companies carve off parts of their business. We saw Merck do this with Organon as a recent example, and we've seen others. So you have some franchises like women's health, eye care and certain other product lines that aren't exactly growing. Is there any consideration over on divesting those somehow and shrinking the base?

Well, what I would say is we feel very good about the business that we have as a combined AbbVie and Allergan as the new AbbVie. And each part of the business really makes an important contribution. So if you look at the number of growth pillars, for example, we've expanded the number of growth pillars from really only 1, when we started as an independent company to 2 before the AbbVie-Allergan integration to a period where we now have 4, 5, 6, depending on how you want to count them, growth pillars and each contributes to the business substantially. So we're not particularly interested in deviating from that path. We think it has been very successful. We think it's driving the business, and we think it is an important part of our business.

I think it's important to note, too, that we have been talking about immunology, oncology, aesthetics and neuroscience as being the key growth pillars. I would say -- I would throw eye care in there as well. Eye care certainly has emerged as a fifth growth pillar. And I'd say the rest of the portfolio, I mean, these are profitable businesses that generate a tremendous amount of cash. Allows us to do a lot of things if you think about the amount of free cash flow we generate. Those businesses contribute to that and allow us to invest in external innovation, allows us to rapidly pay down the debt, keep growing our dividend. So they do play an important role. So I'll never say never, but certainly, as we look at the portfolio today, we're very happy with the assets we have. And I think that diversity certainly helps us as we think about the long-term outlook for the company.

Another question. I just wanted to just ask this [ fellow ] CEO on our prior fireside chat, China -- so when Abbott split and you guys became AbbVie, you lost a kind of a good chunk of your footprint in China. And I'm wondering if the company is essentially underinvested in China now that you have the portfolio that you do? And is this something that needs to be addressed where you can maximize the commercial opportunity in China, not only with your drugs, but with Allergan products as well?

Yes. Tim, I think that's a good point to bring up to Allergan products because with the combination with Allergan, China has now become our sixth largest market. The current year revenue is around $800 million. About $500 million of that is Aesthetics and therapeutics business is around $300 million. I'd say we have absolutely put more investment in China. We look at expanding into mid-tier cities for the Aesthetics business. the growth potential is that -- for Aesthetics, China is the second largest market. So it plays a very important role for the long-term growth in Aesthetics. We've talked about high single-digit growth through the end of the decade and China is an important part of that growth story. So we're absolutely making sure we invest in China. I'll let Jeff speak to the therapeutics business. But you're right, when you look at legacy AbbVie, China was a smaller part of the business. But now with the combination with Allergan, it's a much more important market for us and one that we're fully investing in.

Yes. I think your insight's the right one because China has gone through this transformation and is accelerating quite quickly. So years ago, it was if you had sort of heavy established brand, branded generics, all of the issues that Abbott basically had. And it was -- when we were formed, almost like pre-specialty was not really fully developed, but that's changing very, very quickly. So we see completely different funding mechanisms to some degree with the national drug formulary, of course. But even beyond that, a very significant movement towards private insurance across China. And what that's doing, it's creating a big opportunity for the combined therapeutic portfolio. So we see a large opportunity in the near term for RINVOQ, for example, in China. We've had one of the most significant launches with Venclexta for AML, very significant launch in China just recently, just within the last year. And we're also excited to bring products like Ozurdex in the traditional eye care business and also some of the migraine products like Qulipta to China as well. So we do have a bigger ambition now that we see the ability to drive that specialty business is clearly there in China. So we will continue to push to make that a much larger portion of our business over the long-range plan.

Okay. Let's pivot what is arguably the most important therapeutic category for the company, which is the INI space where products like Humira rest. So starting with Humira, still the world's biggest drug, not for much longer potentially. It's growing outside than the U.S. And that's the reason the multiple in AbbVie was as low as it did in this year, that erosion in 2023 and what the impact to earnings could be. AbbVie has given more guidance on what you expect for erosion that I think almost any other big pharma company would. And that's typical that you guys gave a very good long-term detailed guidance. I asked you a question during Q3, and I still want to kind of come back to it. If you guys potentially sandbagging on the rate of erosion, meaning you're kind of overly cautious how much you think it could erode. And the guidance that you've given is 45% erosion in 2023, plus or minus 10%. And you said -- you've already started -- in that answer to my question, already started contract for 2023, you expect that you will retain good formulary positioning. So you'll hang on to volume, it'll come at the expense of price. I'd still go back to that. And to hit that level of erosion in 2023, you would have to give up so much on price in the form of additional rebates for what is already a heavily rebated product. And just given the dynamics of how the payer world works in the U.S., I just wonder if the erosion is really going to be that bad. Now maybe you can get to that level of erosion in a few years, but to get to that level of erosion in the first year, it just seems like it's [ excessive ].

I mean we've based that the direction we've given that the market is based on the experience we had in Europe with 4 biosimilars coming in at the same time. And we saw them rapidly go to their floor prices in year 1. So we saw steeper erosion in year 1 than, if you recall, we previously had anticipated. So as we've given that direction to the Street -- we haven't necessarily given formal guidance, we've given that direction, it's been based on that competitive intensity. We expect 7 to 9 biosimilars in 2023 with 1 coming in at the end of January, but the rest coming in the middle of the year. So it's really based on -- keep in mind, there's no market that has the same payer landscape as the U.S. And so it's difficult to draw direct analogs, but what we do know is there'll be the same level of -- more competitive intensity. We have assumed they'll be interchangeable. And so it's really based on that. And so we saw -- what we saw in Europe was steep erosion in year 1. That 45% is based on the Europe experience. And because there'll be more competitive intensity in the U.S., we're anticipating a similar steep erosion in year 1, less erosion in the years following. There'll be some annualization impact, of course in '24. But that's the basis. And we'll give obviously more specific color and guidance as we get closer to '23. But that's the reason we've given the 45%. And the plus or minus 10% is because there is no -- it's a different payer landscape in the U.S. than it is outside the U.S. So it's difficult. You can't really draw a direct analog, so we're giving you a range to work with.

I mean I think anyone who knows the space would look at Europe and say it's just such a different payer system than what the U.S. really has and it just may not be that relevant to look at it. And not only that, in the U.S., we basically have no precedent with Part D biosimilar version, right? The precedent comes from Part D [indiscernible] drugs, and that's been fast. But that's a different pair of dynamics than something like Humira. So don't get me wrong, it's good to under promise and over deliver. Okay. So another question on Humira. Still some ongoing litigation with this company Alvotech that could theoretically disrupt the apple cart. You got questions on this in Q3. You acknowledged that in the event that Alvotech were to win, it could allow earlier generic entry. You really have exited high confidence that your patent estate was solid, that there's no risk of this. My question on this is just the timing of getting the decisions from this first wave of litigation, you talked about there being 2 waves of litigation. So when are we going to get news from the first wave?

Well, what I would reiterate is that we are very confident in the IP. This IP has been tested. Much of it has been challenged before through various processes like the IPR process and held up. So we remain very confident overall. In terms of your specific question, about the first wave. Obviously, the litigation is on the court's time line, not our time line, but I think we're anticipating the third quarter is when we would expect to have that first wave resolved.

Third quarter 2022?

Yes.

Okay. Another question on Humira. And again, thinking about erosion and its impact on the numbers. So Humira vastly exceeded your internal expectations when you guys first bought the novel pharmaceutical business. I think it exceeded by 10x. And from what I understand, just from knowing people in the industry, it gave you tons of flexibility. And the company really built itself up over the course of those years and doubled lots of functions, back office, front office, all sorts of things. So my question for you is when Humira goes in 2023, how many cost levers do you have to pull to help offset the impact to the bottom line? You guys have talked lots about top line erosion and haven't really at all talked about what the bottom line impact is. And I just wonder if there's lots of cost levers that can be pulled, recognizing that you're still heavily promoting RINVOQ and SKYRIZI. Maybe you'll still be promoting Humira through that period as well.

And I think the thing to keep in mind is that we expect to return to growth in '24 and then drive high single-digit growth from '25 through '29. So when you look -- when you consider that it wouldn't make a lot of sense to be taking out infrastructure when we expect the company to continue to grow and have essentially a 1-year step down in '23. We have been reallocating the Humira investment over to SKYRIZI and RINVOQ since we launched those assets. We obviously have them with their lead indications, but we have significant indication expansion planned, obviously, in the next 12 to 24 months. And so we have been, over time, reallocating that investment from Humira. I have spoken about operating margin. We haven't necessarily given earnings direction, but we talked about what will happen with operating margin. And you will see we'll continue to expand that operating margin. We said approximately 50% this year, I'd expect it to expand in '22. But then it will step down in '23 to the 46%, 47% range. Still top tier in the industry, but it will pull back, and it's going to be a combination of gross margin given the sales mix with the Humira declining. Obviously, that will have an impact on gross margin. So I think of it as like half of the erosion would come from gross margin. The other half will be from the R&D and SG&A as a percent of sales. And that's because we're not going to be taking out infrastructure because we need to continue to invest in this business, continue to invest in the pipeline to drive long-term growth. It wouldn't make sense. I mean we're going to essentially absorb the industry's largest LOE in its history and then return to growth in '24. I don't think it's ever been done before, nowhere near. And so for us, it's really about continuing to drive investment in the business to deliver that long-term growth. And we're being prudent with how we reallocate the promotional investment from Humira to SKYRIZI and RINVOQ. But keep in mind, SKYRIZI and RINVOQ will essentially participate in all the major indications of Humira plus atopic dermatitis, which Humira doesn't participate in today. So those 2 assets will have potential to be larger than Humira. So for us to be taking out significant infrastructure -- just immunology alone can replace itself and then we've got the other 4 growth pillars to drive that long-term outlook for the company. And so we will have a hit to operating margin, again, still top tier in the industry. We've been, I think, prudent with how we've allocated that investment, but we're really thinking about this from what do we need to do to drive long-term growth of the company and continue investing.

Okay. I want to stay within the INI category and talk about JAKs next. But let me tell listeners, we will get to the cystic fibrosis question. I'm getting a lot of e-mails on -- asking that we ask you a certain question. Okay. So staying on INI and talking about JAK inhibitors. So obviously, uncertainty around safety, updated data from Pfizer that came out in January put the FDA on hold in terms of indication expansion for other JAKs and new JAK approvals, and it's kind of weighed on the stock, although I think the stock has recovered somewhat of that. So the big question lots of folks have had is the guidance, the 2025 guidance that you guys have given for SKYRIZI and RINVOQ, you gave individual product guidance that rolls up to $15 billion in sales, at least in 2025. At the quarter, when you were asked about this, I think it was Rick that said, we don't want to reconfirm the guidance yet. So yet was the operative for me that caused me to really [indiscernible] my year. And then elsewhere on the call, you guys said that you're pretty confident that both these "assets will do exactly what we expect of them to do." And so to me, it sounds like it's quite possible that if this plays out the way that you think it does, you won't, in fact, have to change that $15 billion comparative guidance. Is my interpretation wrong?

Well, what I would say is it's important to take a look at the performance of those 2 molecules overall, and they continue to perform very, very well, and each of them has achieved its goal of demonstrating superiority to the standard of care on efficacy with a benefit/risk that we continue to stand behind. And both of those molecules, RINVOQ and SKYRIZI, are going to be important parts of the immunology portfolio going forward, and we think the immunology portfolio will absolutely be a continued source of growth and a continued strength of this company. With respect to the specific guidance, we think it's important to have a label in hand for that guidance to have credibility. But what I would say is we've modeled against a range of scenarios, including what we think is the most conservative. And everything I've said about the performance of the immunology franchise and everything that we've said about the performance of the company overall is entirely consistent with even the most conservative of those scenarios. So once the RA label is updated and we hope that, that will be soon, we will have that uncertainty resolved and that is also a key gating function, if you will, for the indications that we have under review, and we would hope to be able to make rapid progress with those once that issue is resolved as well. I think once those events happen, then we'll be in a position to give you more specific guidance. But I would just reiterate that we're very confident in the performance of the franchise overall and the course of the company overall.

Yes. The Morgan Stanley conference is right after the drug safety communication was issued. Rick did talk about, we've looked at a range of scenarios. And what we did confirm at the time, while we're going to wait to provide specific guidance for 2025 for RINVOQ and SKYRIZI, and I think it makes sense based on what Mike said, I think from a credibility perspective, having labels in hand is important. But that said, we did come back and confirm even under a conservative scenario, we still expect to return to growth in '24 and deliver that high single-digit growth in '25 through the end of the decade. So we did provide that color to the market. We will, though, provide an update on the RINVOQ and SKYRIZI guidance once we have clarity on the label.

And when you say clarity on the label, we actually have several balls in the air here, right? We have the RA label being updated. And then we have various SNDAs and all the SNDAs are not on the same clock. So do we have to wait for the last SNDA to have a regulatory action before we get that updated guidance? Or could we get that FDA guidance earlier and specifically before the end of the year?

Well, there are obviously a number of indications that we have under review. We've talked about the RA safety update. We have psoriatic arthritis and atopic dermatitis under review. Those are in advanced stages of review. I think the principal gating function there, as I said, is getting resolution on the RA label because in the U.S., you have on label for a product. So you have to have that locked down before you can make progress on those -- final progress on those supplemental NDAs. And we would hope that, that RA label update would come soon. And we certainly hope and expect, based on everything that we have discussed with the agency that we would be able to get resolution on those matters by the end of the year. Ankylosing spondylitis, as we said on the call, we've included a new study, which has read out since the submission in the bio-IR population. That will put that on a different time frame, probably into next year, although we're out of specific clocks because of the nature of the regulatory process that has unfolded in light of the RA update. But to answer to your specific question, we don't need to wait for the last of all of these supplemental NDAs to be in a position to give you guidance. I think once we have clarity on the basic label and are able to talk about some of the most important indications, we would be in a position to give more color to the Street.

Okay. I'd like to ask about a pipeline product within INI, which is the TNF steroid antibody for conjugate, the compound ABBV-154. So to me, one of the most exciting products potentially that you have is right in your wheelhouse of INI. Conceptually, it's very novel. It would be the first non-oncology antibody drug conjugate. Biologically, it's intuitive, use the TNF receptor for targeted delivery of a steroid payload. But it still kind of feels like a total long shot. We've had very limited human data. You start off with 1 molecule and you pivoted to a backup molecule, which is this 154. And it's not a program that you call out all the time, but possible that's just because it's still a pre-proof of concept. So my guess is that you have more data internally than what you've released externally. And how is that informing your odds of success here with this program? And what's your latest thinking on this program?

Well, it's a program that we're very excited about. It's a program that has strong biology behind it. As you say, it's intuitive when we understand the role of the TNF receptor, the fact that it is internalized rapidly when it is bound by an antibody and the fact that steroids are highly effective in the diseases that we would be pursuing. The overlap between TNF-driven diseases and steroid responsive diseases is quite strong, and steroids are highly effective, but they just can't be given in high doses and systemically for long periods of time. So it's very intuitive. We have early data from 3373. We have biomarker data. We have strong data to understand performance of the linker drug combination and the payload. So when we put all that together, that's what gives us confidence. The switch from 3373 to 154 was really based principally on linker technology. And it didn't have to do with the biological performance of the linker. It had to do with the ability to formulate at high concentration, which would be necessary for a commercial formulation and to enhance manufacturability. So those are changes that we can understand very well preclinically, and we believe the biological performance is highly similar between those and therefore, should translate. We're in a substantial Phase IIb study in rheumatoid arthritis, which is a definitive dose-ranging study that would enable Phase III in that indication. And we will also start Phase II studies in other indications. We already have a study underway in PMR, and we are gearing up to start studies or at least 1 study in inflammatory bowel diseases as well. So we're moving forward with the program. And I think part of the reason why there hasn't been as much news flow now is that large Phase IIb study is gearing up. It's actually ahead of schedule. It's well along the way to enrollment, and that's going to give us the critical data. So when we have those data, we'll be in a position to give you a full view of the potential.

And so you will be starting other trials before you have that readout of that randomized Phase II data in RA?

Yes. That's correct. We already started one, and we'll be starting at least one more.

And the timing of that readout in RA, that looks like it's late 2022, is that correct?

That's the current timing. That's correct. We're making very, very good progress with the program overall.

Okay. I want to pivot to this question that I've gotten lots of e-mails on related to your cystic fibrosis assets. So it's been closely watched arguably probably more important for Vertex at this point than AbbVie, but no one's been able to break into that monopoly. And it looks like there was a push out in the time line on clinicaltrials.gov about when that data might readout, it looks like a push out that could be around 8 or 9 months. So the prior guidance on the company from you guys has been that you would have this data in hand around late '21 or early 2022 and that somehow will get disseminated, maybe if it's put in a press release or mentioned in an earnings call. Like, has the time line, in fact, been pushed out as the clinicaltrials.gov suggesting -- listing suggests? And if so why?

And So the study that will give us the proof-of-concept study is a multi-arm study that has many components and additional objectives beyond the proof-of-concept data. So the -- and there's a regulatory requirement to keep clinicaltrials.gov current with respect to the end of the overall study. And so the end of the overall study was moved to the time line that you described, but that was because of objectives from other cohorts, other than the proof-of-concept cohort. So we haven't changed our point of view of the timing of the proof-of-concept cohort. We'll have data in-house right around the end of the year. External communication is still to be determined, but we'll probably be in a position to do that in some time perhaps in the first quarter of 2022. So no change in the proof of concept. It's just some of those additional objectives that have led to that update on clinicaltrials.gov.

And then just the efficacy hurdle that you would need to see out of this proof-of-concept readout to feel like you would advance the program further. I think you've referenced not only what current standard of care studies do, but what it might show in the future. And we do have a Vertex data recently showing about a 20% improvement in FEV1. So what are you thinking of the benchmark that you need to hit? And what's your confidence level in being able to hit that benchmark? Or is this still very much up in the air and to be determined?

Well, what I would say is we want to have something that offers real advantages to patients against what would be out on the market in the time frame that our combination would come to the market. And the performance of the Vertex combo has been strong. We still think there's room to be as good or a bit better than that on efficacy, and there are other areas where one could have an advantage as well. It's hard to give a hard and fast exact number in terms of FEV1 because it differs by context. There are different results based on adjusting for running periods or not. And so it's hard to put a single line in the sand in terms of the percentage increase we want to see. But we are going to benchmark ourselves against the performance of that asset that would be out there at the time that we would come to market. In terms of our level of confidence, we think we have good molecules. We think the principal deficit in previous programs has been the C2. We also had improved correctors I mean, potentiators rather, compared to what went into the clinic in the past or at least what went into those combo efficacy studies in the past. And so we think based on all the preclinical work and the preclinical work here is more predictive than in other areas that we stand a very good chance. Of course, we recognize that this is an early clinical program. These will be the first efficacy data for the triple combo. So we think about it that way. But it is one that, if successful, would have a large upside to us. But it's not something that we bake into our financial guidance or our planning in any meaningful way because we risk adjust it as we would risk adjust a pre proof-of-concept program.

Great. I want to sneak in one last line of questioning here before we're out of time. It's on IMBRUVICA, your second biggest franchise. And the question is really about the durability of the drug. So if I look at Astra's Calquence in the same BTK category, clearly taking share. Every quarter, they provide updates on things like new patient share, first-line BTK patients, and it continues to run. It was 45% for them at Q2, now it's 52%. And when I match that up with what you guys have been posting as growth for IMBRUVICA in the U.S., it's been dropping down in the low single digits. So IMBRUVICA U.S. grew 20% in 2019. This year, it looks like it might be flattish. You also have the COVID dynamic in there that's probably skewing performance. But as we think about IMBRUVICA over the next 5 years or so or even longer now that you have longer exclusivity with the product, should we be thinking about this as a brand that likely goes to ex growth in the intermediate term in the U.S. because of the competitive trends?

Yes. This is Jeff. I'll take that one. So you're right on your analysis. I think first that the dominant effect that we've seen, and first, we have lost some share. And I've highlighted that that's been within the range of what we've expected with Calquence because we saw how their share performance worked in MCL, for example, another indication that they launched prior to CLL. The biggest impact here, we continue to see an ongoing COVID impact on the market, and that's certainly what we've seen in 2021. We see that basically across all lines of therapy, particularly with CLL, but we also see it in the NHL indications. There's more and more watchful waiting that's taking place. So whether it's front line, second line or even in some cases, third line, the time to intervention is stretching out. So the new patient starts have been sequentially down quarter-over-quarter during the whole COVID time. And we -- it's been a little confusing. Obviously, these patients are clearly more at risk for COVID, the vaccines don't work as well, given their age. And so this is one of the markets that uniquely is being impacted by COVID. So we do see 2 dynamics. I mentioned the share dynamic as well largely within the range of what we've expected. So we're going to have to see. I mean clearly, we're not going to give guidance now. But the market impact is quite significant in terms of what we've seen so far. Ultimately, that should start to come back and recover as things normalize, but we haven't seen it yet. So there's no question, to your point, in slowing. I would also highlight that there are also natural offsets. Venclexta continues to grow, it operates in the same category. The international growth of Venclexta is very significant. And as Mike said, we're very, very confident over the mid and long range on our pipeline behind IMBRUVICA and Venclexta, which is very robust.

Great. Okay. Well, I think we're going to close the conversation here. I want to thank you, Mike, Rob, Jeff, and Investor Relations Liz and others, for putting this together today. It's been a great discussion. Have a great day, everybody. Thank you.

Thanks, Tim.

Thank you, Tim.

Thanks, Tim.