AbbVie Inc. (ABBV) Earnings Call Transcript & Summary

Hi, everybody. So let's go ahead and start. Today with us we have Rob, Jeff and Neil from left to right. Rob is the CFO. Jeff's run the commercial operation, and Neil runs the development of AbbVie. The CEO, Richard Gonzalez, was unable to join us today. He's a little bit under the weather and we all wish him a speedy recovery. So in a way, we're kind of fortunate the management team of AbbVie is giving us an opportunity to engage with the rest of the C officer suite that we typically don't engage with or typically not here on quarterly calls and here we are. So we have a chance to do this and ask them some interesting questions. I'm going to try to reserve the last 5 minutes to questions. Just if you want to ask questions, raise your heads -- your hands, and we'll ask you then. So with that, let's go ahead and start. I thought we'll lead some specifics around development, commercial and the overall picture of the company and then see where it takes us.

So while we start a little bit with the development world and ask a little bit about the 2 recent sets of data. The first, your CD3xCD20 and then Rinvoq. So CD3xCD20, you recently have exposed some new data, obviously, a competitive field. How does AbbVie differentiates?

So thanks for the question. So we recently top lined it and in fact, I think there are more detailed data now out because it's been -- so we're talking about epcoritamab because the abstract was accepted for the presidential symposium at EHA. So we can expand a little bit on the initial PR. So this is from a very heavily pretreated patient population with relapsed/refractory DLBCL, median of 3.5, prior therapies in a range, I think, of 2 to 11. And 40% of those patients had failed prior CAR-T. So the data we top line at 63% ORR, the CR rates are very robust, just around 40%. And if you look at the CR rates in the CAR-T failed population is around 35%. Now with all the caveats, you've asked about the competitors. I'll get on to safety in a second, but you asked about the competitive situation. Yes, it's highly competitive. We spent a long time looking for this asset. We recognized quite a long time ago, a number of years ago that this was going to be probably a very important asset class for patients with DLBCL and potentially FL. We spent a long time looking at the asset. We spent a long time convincing ourselves that it has the potential to be best in class. And as we've seen those data evolve over time, that promise has held up. Caveats with cross-study comparison, if you look numerically across the class, our response rates are extremely robust, right? So numerically better than many of the other assets. In fact, all of the other assets in terms of the ORR, CR rates. And I think importantly, because safety is obviously important from a benefit/risk perspective. If you look at probably the biggest issue with this asset class is CRS. We have overall CRS rate of around 49%, but highly manageable, 2.5%, grade 3, 4, the rest being grade 1 and 2 and that is numerically lower than other members in the class. So from a benefit/risk perspective, we have, at a minimum, a highly competitive asset and probably best in class also.

Two follow-ons. So people talk about the safety assets of -- the safety aspect. A lot of times, it's influenced by the rates of pretreatment. So can you talk a little bit about the rate of pretreatment with anti-IL-6 or steroids with this molecule?

So I can't give you the exact numbers right now.

In comparison to your peers basically.

But I would say, look, so it depends on what peer assets you're looking at. I don't think there's any material difference, for instance, in the pretreatment rates against [ tocilizumab ], right? So I think effectively, that's the closest side by side of maybe the Regeneron market. When you look at those 2 -- if you look across those 3 assets, I think it's -- they're probably pretty similar. Other assets have been less heavily pretreated, right? So for instance, tofacitinib, they didn't have CAR-T exposed patients, right? So I think you're -- and again, I want to be careful here with the cross-study comparisons. But I think they're pretty close. And therefore, the numbers hold up very, very well.

CAR-T exposed population, good results. And does that give you a quick path to approval as a first indication.

It's a great question. That is not our position. So with respect to the regulatory part since we're sort of on that topic. The fact that the molecule is so active in such a heavily pretreated population is indicative of its potential for benefit and also in earlier lines of therapy. We've also talked about the other studies that we will initiate with the asset, and we will initiate multiple Phase IIIs with the asset over the next 12 to 18 months. Importantly, the -- what will be the confirmatory Phase III in relapsed/refractory DLBCL is ongoing. And we know that that's from one of the book bears with the agency, right, that companies have gone in looking for accelerated approvals not followed up on the confirmatory. We've never, as a company, been in that situation. Any time that we've gone in to have a conversation around an accelerated approval in oncology, we've always had -- I think, always had the confirmatory study ongoing. So we're going to go and have a conversation with the agency. We're going to -- they're smart people, right? They're going to see what we're seeing. They're going to see that it's a fantastic asset. They're going to see that this high unmet medical need and we'll have an informed discussion with them, and we'll be able to say, and as you know, our confirmatory study, potentially -- the potential confirmatory study is ongoing.

Just to make sure. I think what you -- what I heard you say.

Sorry, I beg your pardon. So your original question was, would we ask for a post-CAR T approval? And the answer is that is not our opening position. Our opening position is, if you look at it, it was -- the patient population that we studied is patients who failed, as I mentioned, the median are at 3.5 prior therapies. And 40% of those have failed the prior CAR-T. So it's a much broader population that we believe we could be having a -- that we will have a conversation with the agency there.

It's not our position. If it comes up that we can do that way, it's not like we're going to say no.

If it happens, we will have that conversation.

Okay. How do you see this paradigm in large DLBCL developing? Because we took -- are you basically looking at for the CD3xCD20 to replace the first-line use of existing anti-CD20? Or is this going to be a second line treatment? I'm asking this mostly because of the movement forward of the CAR-Ts and the treatment paradigm? How do you see those -- the treatments being sequenced now?

So first of all, epcoritamab binds to a different epitope than that of rituximab. So we have an option of adding 2, okay? We're currently -- we haven't talked about the study designs as yet because we haven't fully locked them down with the agency as yet. So I think there are -- we have different options. Where we see epcoritamab fitting is in all lines of therapy, right? Obviously, we're starting with relapsed/refractory DLBCL, and our intention is to move to the front line and everything in between.

So essentially, maybe first line, but whatever medicine decides this line is appropriate, we've got -- we're going to have very strong base.

Correct.

Okay. Should you have a CAR-T. So you are deeply in DLBCL. It's clear the CAR-T will be heavily used. They're curative in a good number of patients in second line. You have a good portfolio of products in the B-cell lymphoma space. Should you be there?

So one of the reasons that we made a decision to focus on CD3s. We have other CD3 binders in our -- bispecifics in our portfolio, specifically 383, the BCMA, CD3 is that we believe that our preference at the time was to move with bispecifics into earlier lines of therapy. CAR-Ts are -- they're fantastic for patients, but they're not easy. First-generation CAR-Ts are not easy to administer. I mean it's -- you're taking blood from the patient, the patient has to have their marrow reconditioned, reengineered and reinfused back in. So it's not a straightforward paradigm. And the kind of -- like when you look now at the kind of efficacy that we're seeing with epcoritamab, then we believe that it can be positioned earlier and CAR-Ts could be held off until later lines of therapy. Now with respect to what happens in the CAR-T space longer term, we have made some calculated investments from a deal perspective in next-gen CAR-Ts. We'll see how that space evolves, and we're always watching to see what's happening and to try and think about innovation further down the line, whether it could be, for instance, in vivo transduction later, right, which would simplify everything. But that's -- if that happens, it's going to happen in the outer years of this decade.

Okay. Let's talk a bit broader in hematology. I mean it's a very competitive space, and you do have a BCMA, CD3. I think there are 6 of them in development that I recall, there are probably more. You have a strong position in some of the sub-fill, you have a strong position in the myeloid tumors and so forth. In terms of what comes next, so we all know the molecules which kind of knocked on the edge of approval. But the things are not moving from kind of getting through a proof of concept or getting to proof of concept in the next 12 months. What would you highlight for us to keep an eye to?

And so I mean, you've highlighted the CD20xCD3. I think one thing to bear in mind is that we have a portfolio in multiple myeloma, okay? So in fact, we will have a readout later this year from a study called the CANOVA study, which is venetoclax in multiple myeloma in a specific population of multiple myeloma with a genetic abnormality called t(1114) translocation. And that's about 20% of multiple myeloma patients. Now we know, and I know you're asking about earlier assets, and I'll get back to it. But we know from earlier studies in which t(1114) patients were included that they are exquisitely sensitive to venetoclax therapy. So the venetoclax is a BCL-2 inhibitor. I mean I don't want to quote hazard ratios because there were small patient numbers in larger studies, but they are exclusively sensitive to treatment with the BCL-2 inhibitor. And we'll have those data later this year, and we have a lot of confidence because of those earlier data that, that would be positive. And that will be the first approval that would then form potentially the first approval of an venetoclax in multiple myeloma. Then we have the CD20 -- i beg your pardon, the BCMA, CD3 coming behind, and we're making good progress with that. We're having very positive interactions with the agency about the development path for that asset. Now we have the makings of a portfolio in multiple myeloma, and they're still -- I know it's a crowded space, but there's still a lot of unmet medical need in multiple myeloma. And as we think about adding things to the portfolio, then that then becomes a space. Once we're established in it, it becomes a space into which we can add more and more and more assets.

So the question is CD38, I have not seen a CD38 in your portfolio. This will remain a very dominant class. You have GPRC5D showing really, really strong data from Johnson & Johnson also at CD38. And our friends from Bristol, I've got no bars hold approach to creating a next-generation cell mod. I'm kind of wondering simply on the issue of what is your hook here? I mean they will have an asset that dominates those classes and they'll have a portfolio. Where is it going to be your portfolio, your product that will essentially force people to work with you as opposed to focus on competitor who might have your class molecule and also a competitor?

So I think that like the initial foray, if you like, into multiple myeloma is going to be into the t(1114) space, positioning the BCMA CD3 more broadly. I think I don't want to talk too much. Look, we've looked at CD38s, and we have decided that that's not something that we need right now. We believe that in similar to the strategy that we pursued in AML with venetoclax, right, where effectively, it's the backbone, right? It's -- it adds on so well to existing therapies, and we're currently exploring frontline therapy in [indiscernible] AML. But a similar strategy, if you sort of transfer that to multiple myeloma, particularly in the t(1114) population, again, 1 in 5 myeloma patients. If you look at the rates of MRD negativity that are achieved, when you add the BCL-2 inhibitor venetoclax to other therapies, it's quite remarkable. It's unlike anything else out there, right? And that's a very similar pattern. So it's mechanism related. It's a very similar pattern that we've seen in other diseases with a BCL-2 inhibitor. So we believe that we have the potential to have a broad usage of venetoclax in that subpopulation. We're also considering how to bolster our positioning within multiple myeloma, but I'm not ready to talk about it now. It does not currently have a CD38 in the plan.

Got it. As long as we are going through the pipeline, let's spend a couple of more minutes there. So you mentioned venetoclax and BCL-2. It's a great molecule. It's actually one of my favorite, scientifically one of my favorite molecules. The question is it's never been become as big commercial as it should have been based on its scientific features and largely because of the side effect profile. I guess the question is, is there a way to improve scientifically, I'm not talking commercial. Scientifically, is there a way to improve on BCL-2 targeting, or just this mitochondrial mechanism simply does not lend itself to a better way of -- a more side effect-light product that still have the same efficacy?

Yes. So I agree with you from the scientific perspective. We knew this is a validated target in 1988, right? And the chemistry that went into actually developing or discovering and subsequently developing venetoclax, is pretty remarkable feat of medicinal chemistry. To answer your question, other ways to improve. There are. And I think that without saying too much, I think that we are best positioned -- the best-positioned company to do that, and we are actively pursuing just that.

So proof of concept. By the time we see it, proof of concepts are kind of like this year, next year? Or are we still 3 years...

But it's -- just given our just given how hard this target was to crack it to 25 years, right, from a medicinal chemistry perspective because it's just a challenging target. If you can imagine the amount of [indiscernible], right? So another BCL-2 BCL-XL inhibitor in our portfolio, we have huge experience from a chemistry perspective in this space. So we know better than anybody else. And yes, I guess it's worth its place.

Okay. Two last ones. First of all, I love developments in aesthetics. So this is a bit of a new field for you, but you inherited half a dozen programs targeting follicular hair growth, even skim down and half a dozen other indications that I kept on looking on in the Allergan pipeline. Now in your hands, okay? What are you guys seeing that you actually think will actually make its way through -- at least to a decent stage point in the clinic.

So well, the next readout that we have will be the short-acting toxin coming next year.

We know that one works.

Okay. Yes. So I think -- so -- just talk about that a little bit, why that might make sense. I think it will make a lot of sense for folks who basically don't want to commit to having a aesthetics procedure with a long-acting toxin and want to see what it looks like, right, use the short-acting toxin, maybe there will be a bunch of people who continue just to use a short-acting toxin on an intermittent basis and people who will then transition to one of the longer-acting Botox. What we've been saying is this is a very competitive space. We have a lot of active research with respect to advancing toxin technology. I think it's a really nice -- another nice example of why the deal was so good is that we're able to really put weight behind the research and development, particularly the research with respect to longer-acting toxins and other facets of toxin activity of the SAR of the toxins in general. So it's -- and actually, it's moving pretty rapidly, but because of the competitiveness of the space, I don't...

And I'd say external innovation is an important part of that strategy as well. You've seen us bring in the cellulite treatment Soliton, dermal fillers with Luminera. So as we think about the aesthetic space. I mean we're looking for ways to help our customers bring new patients into their practices. So that market expansion, I mean we're not only looking internally, but obviously, there's a lot of external innovation and we brought in 2 very interesting opportunities. We'll continue to look. But I think you have to consider in addition to the long-acting, short-acting toxin programs, things we're doing with fillers, looking at what we're doing on a BD front as well.

So let's talk a little bit about this since you kind of brought it up, and this is kind of like a nice fill. So we're seeing near 20% growth in underlying yields. So you guys are stuck reporting your ASP, so we can figure out how much volume is sold and the ASP covers both the aesthetic and therapeutic areas. We know how much you sold in aesthetic. It looks like you've sold something close to 20% growth rate this year and historical growth rate in the toxin market have been closer to 10%, okay? And the question then becomes what's going on here? Are we talking about a -- are we talking about simply a rebound as people begin to treat themselves better post COVID? Or is there something more fundamental about a generational change and more resources being put in, approaching populations that you've not done before, the gay population is has always been a tantalizing area, men has been always a tantalizing area, but they never broke -- neither population ever broke 10% of commercial toxin cells on the Allergan. So if you can talk about this a little bit.

Sure. I mean if you think about last year, we saw some rebound element. But this year, as you mentioned, we're seeing, both toxins and fillers market is growing 20%, in the mid-20s. What we have learned after closing the transaction was there was opportunity to put more investment behind this business. These are businesses with very low penetration rates. And so there's tons of headroom for market growth. And so we've learned by just doing things like more consistent DTC for both Juvederm and Botox in the U.S., expanding the sales force, looking at China, it's our second largest market. We've expanded our sales force in the mid-tier cities. There's tremendous market growth potential. We're putting more investment behind that business. That's, I'd say, largely what's driving that accelerated rate of growth that you're seeing for aesthetics. And then as we look at with the BD efforts, at the R&D efforts, Neil mentioned, it's not I'd say, highly intensive investment but we've increased the amount of internal R&D investment that we have for aesthetics versus what Allergan has. So we have more investment going in, not just in SG&A, but also in R&D to drive that long-term growth.

So which is the reason why you committed to essentially a near to intermediate 10%, 20% CAGR on the last quarterly call. That was a new statement that you've made.

We've had a high single-digit annual growth for aesthetics. It's been our guidance, high single-digit annual growth, exceeding $9 billion.

So essentially, this will become 1 of your 3 largest franchises if we think about Rinvoq and Skyrizi being the other 2.

I view it as it's 1 of our 5 key therapeutic areas that will drive growth. Obviously, immunology, oncology, neuroscience, we can talk about obviously....

We'll get there.

And antipsychotics. And obviously, even 951 we should talk about as well, eye care and aesthetics would be the 5 key growth drivers for the company.

Okay. I'm going to throw 1 more on Botox -- toxin R&D actually. I'll make 2. I may well make them quick. When are we expecting the results from the pericardial trial? I mean that's a really interesting potential for this. And then the second one I'll ask you is, there's been a lot of early effort on the idea of using the [SNP, SNRI ] mechanism and the ability of the toxin molecules to integrate, to deliver cell type specific or neuron type specific molecules. Is this going somewhere? Or is this still early research?

So on the first question, I think we should see AFib data this year. Okay. On the second question, I can't comment that we're making a lot of progress with respect to what you just described.

Okay. Great. So let's talk -- let's move a little bit and talk about immunology and now comes the fun part. So I've been looking at this entire issue of the biosimilar Humira things for a while. And I'll make 3 statements, and you tell me how wrong I am. The first one is, it doesn't feel like the large PBMs are willing in 2023 to exclude Humira. It feels like they might add things to the formulary. That might depend on which account might choose to prefer the biosimilar, depends on who you're talking to. But it does not feel like the PBM organizations are quite willing to make the lead in 2023. Am I way wrong with this?

Well, I think these are aggressive firms, right? And it is a big strategic call for both '23 and '24 in terms of how the formularies will play out. But I wouldn't say that it's foregone conclusion that there won't be a switching behavior. And I think there's a spectrum of outcomes, right, that we're dealing with right now because this is the time where we start the negotiations for '23 in terms of what that formulator looks like. I mean, the first context is it will be hypercompetitive in '23. I mean you certainly have Amgen come at the end of January, and then you have 7 to 9 that are all clustered around July, right? And we've never seen that before. We've seen 3 or 4 in Europe, but not 9 or 10 coming very, very quickly. So the range of outcomes are anything from coexisting with a biosimilar, maybe a preferred biosimilar Humira stage preferred all the way to an aggressive move against Humira, where the volume will decline, price will go up, right, because the rebates won't be there anymore or to something that we see a middling ground, which would be Humira base is negotiated and protected, but there's a move towards basically all new patients completely biosimilar. So that's the range of possible outcomes that we're in the process of basically starting the, let's say, the dance with the large PBMs.

What I was asking really is to exclude the sharpest that is the possibility of somebody January -- Feb 1 or July 1, somebody turning the switch and says, within our entire corporation, nobody gets Humira my anymore.

Yes. I mean that's -- look, there is a possibility that, that's still a possible outcome.

[indiscernible].

Our strategy, and Rob and I have highlighted this before, say, our primary strategy is one we followed around the world, which would be we would prefer based on our business continuity and also patient continuity to seed price to retain the Humira volume as much as we can. That may not structurally align with the choice of one of those large or any of those large PBMs. They have to consider, to your point, very carefully who do I partner with? Is it Amgen? Is it interchangeable? Does interchangeable matter? How do I think about the timing? How confident am I if I made the move on what my curve would look like? They might have to be studying what happened with COSENTYX or Taltz or other exclusionary issues, right? So it is a big decision for them as well. I think also it's the continuity of supply. Who do you choose to dance with, right? So those are all things that are in our calculus right now, but I certainly wouldn't say we've been dismissing any possibility over a very sharp clause in this marketplace.

I hear you. Just daredevils typically don't take a career in health care insurance. So that's the thing there. Second, look, today is June 1, okay? The Medicare formulas have to be at FDA -- at the CMS today. So the question to you is, on this accounts, on the managed care accounts you've been excluded -- sorry, sorry, on the Medicare account, you've been excluded.

Look, there's also a new rule that's been put in place that basically suggests that it's not clear. There's a new rule that's been put in place that suggests that unlike normal years, if a biosimilar is available, an interchangeable biosimilar is available, okay, to be defined what that actually means that you can do midyear exclusions and switching. So this is important because that still from a security standpoint, we're certainly not ready to say here on June 1. And how that Medicare D program will actually play out because of some of the new regulations that are in place.

Completely agree. But for the first 6 months of the year, we exclude it.

Yes.

We know the answer. It's no longer ...

We don't fully know that answer.

Okay. Fine. So the third question around this is this issue of interchangeability. So the basic question is kind of the A2, B2, C2A question, which is to translate it to the audience is you move from Humira into changeable 1, and now you move to interchangeable 2, are you allowed to do that as the interchangeability is with the original Humira molecule and was never tested against another interchangeable? Or is there as in the generic world, the group interchangeability move from A to B, you can move from to B to C.

Yes. I think it's a great question. And I mean, officially, if you're interchangeable to the original, it doesn't mean you're interchangeable to another one that's interchangeable, right?

Do we know that for a fact.

We believe that. Now whether or not that the market will behave that way, that's a different question. I think this is important because, I mean, if you look at all sorts of different healthcare structures, in many cases, there's not any interchangeable guidance, but they'll just latently switch like the U.K. will switch. The only place that we've seen around the world that will do multiple switches at least 3 years are the Nordic countries, Scandinavia. So this is also a significant issue that there is a little bit of potential mayhem that comes in over time here, where you say these are not like, as you're noting, these are not like pills where you can go to the pharmacy and pick them up. You can't tell they come in the bottle. This pen would look different. Maybe it's a syringe, did you get the right training, so I think this idea of multiple switches irrespective of the interchangeable guidance is something that is -- definitely there will be initial caution on. How that looks 3, 4 years from now, it's difficult to say.

Okay. So I'm a payer. I don't know for a fact how long will take to switch patients, okay? I'm assuming you wrote your contracts that if they switch in the middle of the year, there will be some financial penalty associated with it. I don't know if the person that might -- the drug I moved to is going to be one that I can switch to other drugs from, okay? Why should I commit myself to one vendor when I can keep at least some of my patients on Humira and it will be reasonable enough to understand where I stand and not force me to make a decision between 100% of their product or another product. Explaining with the logic, what is the strongest argument you heard from a payer that says, "No, I must move." I mean it doesn't seem like a reasonable business choice to kind of force it off into a corner like this.

Your discussion here with me has been some of the discussions that we would have with the payer, which is to say, hey, do you exactly know which drug or 2 do you dance with? Is it high concentration, is it citrate free? Does the pen work? How do you think about this? Are you sure how much risk are you willing to take, right? So this is the discussion that we have, which is why our primary assumption is that we will be seeding price, and we will retain a significant amount of volume. Now on the other side of the table, I know how my exclusionary formularies work. I've seen this with cross brands. This is what I'm going to do. I have the capability to do this. I need more pricing. Those are some things that are in motion. And at some point, it's the dance over what risk are both parties going to take.

I kind of -- I know you're talking to about -- I know exactly this conversation. -- let's move over and talk a little bit about Rinvoq, because that's been the other big question that investor have been struggling with. It feels like, to some extent, the bad news should be out and you should be able to begin to start from here and convince people, yes, there are warnings, but the safety of this molecule and the profile of this molecule justify use. Can you talk a little bit about what you're seeing early market in IBD, obviously, a big opportunity there. And then the tougher market, dermatology.

Yes. So what you highlighted is exactly what we're seeing. So if we take a step back, obviously, we had the Drug Safety Communication last September. We had the label changes starting to change in December and then the approvals that have come over the first quarter. So if we take the big market in terms of the stability or the bad news out, that's what we're seeing in the data. So if I take the in-place share prior to the Drug Safety Communication, we were touching with Humira as #1 and #2 with Rinvoq in RA, so about 15.5%, 16% in-play share. And what has happened since then basically, we've lost frontline business so the doctors are following the label. And we've seen that in place share come down to about 12.2% and it's very, very stable over the last several months. Now that 12.2% will continue to drag the TRxs up, which sit right now just under 6.

Now using RA as an example.

Using RA as an example. So when you say the trough or the bad news out, so when you look at that dynamic, we have a very good, stable base. We believe that with our shift in promotion, we'll start to see second line grow. So we'll come up from that point. And then all the new indications are building on top of that. And I can tell you we see it in the data. Largely, this is bridge data as we build our access but we can see PSA ramping very, very nicely. And that's for rheumatology. We've launched UC, and we're right on our internal projections. People really like the -- basically the depth of the response, the very strong endoscopic healing. Now they realize they're a little upset, frankly, that I have to use this after a TNF, but that's the label that we have. And then we also see the build where we've ramped up to about 14% in-play share on AD. So what you're highlighting is exactly what we're seeing in our data. We've seen the stability in RA. We've lost some of that frontline business. We're not seeing degradation. Now XELJANZ continues to be great. We can see that. That's clear. And then our indications start to build on top and then that's the momentum that we're starting to see with Rinvoq. So very consistent with your question.

So the question I would have about -- what worries me about the IBD indication is this language around anti-TNF because you're going to see S1P coming in, you're going to see IL-23s coming in. Both are decent molecules. Surprisingly, Rinvoq actually still has the strongest efficacy data across. But anti-TNF. What will happen with anti-TNF are no longer the frontline treatment, you'll find yourself stuck behind second or third line. And the question is there the ability to diversify that label away from something to say after anti-TNF that something say, do not use this first line. Category A, B or C. How do we address the ability to change the language in the label?

Yes. I would say one of the things is I think we have some time and space. I think it's a longer-term issue, but it is a strategic issue. So as you highlighted right now, if you look globally, still, if you look at the base of patients, and this is important, that the way the gastroenterology market behaves is they hold on to the front line as long as they can. So what the gastros do and why is that? Because they're afraid to go to the next line of therapy despite how severe the disease is. So they do a few things. They combine, they use steroids and they dose intensify. So they increase the STELARA dose. They increased the REMICADE dose. They double up the Humira dose, right? And what we see in our research is that still 70% to 80% of all the base in the world on a pretty large indication, at one point, 35% of all the sales of Humira. So there's a huge base of patients that have already been exposed to TNF that can move right now to Rinvoq. Now over time, you're right, as you start to see Entyvio, other agents, you can say, does that TNF label, is it -- is it a hard practical step where I have to go backwards? Or does a physician have some discretion over time after bio-IR, we'll see. The other thing is we do have some discussions that were -- they're confidential as we think about our Crohn's approach to continue to highlight this to the agency over what might we need to do to think about a second-line indication versus a pure step-through TNF. So that's underway. Look, we don't know if that's going to be possible. But nonetheless, we're pretty excited about IBD.

Got it. So the answer is the, we don't know yet what we might need to do to improve our label. That discussion is underway.

That's underway.

Okay. Broader question. So you talk about the conversation with those aggressive payers and so forth. I guess my question is the one that AbbVie is being primarily thought for as a stock you want to own because it's going to trough in '23, '24 in terms of earnings and then accelerate from that period to 2030 as the immunology franchise comes up, as the study keeps on ramping, [ migrating ] ramps. And there is no real big loss of IP until 2028 on the BTK or even longer or beyond that.

We communicated 2020 is no longer the...

[indiscernible]

Yes. So we have really -- you look at our LOE exposure at...

So fantastic. No major LOE 2032. We can't argue for anything better, right, across pharma, right? So it's wonderful. The question really becomes is what prevents the immunology category for beginning to behave like diabetes, where there are going to be 2, 3, 4 molecules per class and the payers are beginning to squeeze them down -- will continue to squeeze them down on pricing. So yes, over here might be a little bit tougher to switch. But the dynamics of prices go down 5% per year. Is this our destiny from 2025 to 2030 or there are some good reasons why that will not be the case?

I don't -- we don't believe that, that's going to be the case in terms of starting to look fully commoditized like more like the diabetes space. I think one of the things is that certainly, our assets and you highlighted Rinvoq. I mean Rinvoq is going to be behind the TNF. So in some cases, look, you're going to have a moat around that drug with the size of the indication, still how large it is, as it accelerates in second line plus. The second-line-plus markets become very significant, we don't see something like we're going to step through generic XELJANZ or based on the label there.

So in the way the cautionary points around the class have helped you isolate.

That's a -- that is some way to think about how you think about the stability in later lines there. I think the other piece is around Skyrizi. I mean Skyrizi I'd tell you that the growth is absolutely explosive. And certainly, there's been strong commercial execution. But equally, this is a tremendous asset. And we're gaining on Skyrizi just in the psoriasis space, the psoriasis plus PSA, one out of 2 every newer switch patients. This is far beyond any competitor. And so we think the performance of the asset, we have multiple head-to-head trials. We have more head-to-head trials coming against Otezla potentially every 6-month dosing. So we're building, again, very strong position around this in terms of overall physician preference. We do plan for price degradation in our planning. It's not like we're saying these are going to be stable or we're not thinking about there's going to be that there's going to be pricing declines as we as we move through the decade, but we think we've got the balance overall right. And the assets themselves are very, very unique.

I mean you really pointed two things. One, we have differentiation with Skyrizi and Rinvoq. So it isn't a me-too approach. And then also, if you look at the trends in this space, we've seen formularies expand. There's more choice now. And so as you look at those trends, and as Jeff mentioned, we did build that, we gave that 2025 guidance. We've made an assumption around price that I think would be prudent. But we're not concerned about that. It's really the volume growth that's going to take Skyrizi and Rinvoq in a position where we'll exceed the peak revenue of Humira.

So let's talk about some that could degrade your pricing, which is 340B penetration. So we've seen a massive penetration of 340B into the specialty pharmacies, or growing very, very quickly, I should better say, in the last 2 years, which essentially drove the industry to draw the line around this. Now the question then becomes if we end up in a compromise where, yes, you'll have patient data, so you don't have to pay double rebates, but 340B goes back to being a viable option. Is this a real setback to the growth rate of immunology in your drugs, in particular, or is this more of like a, look, it will take a couple of percentage of, but it's not a real big deal.

If you look at over the long-range plan, it's not a big deal because it depends on which asset you're talking about.

Immunology asset.

And so within immunology, it was primarily, I'd say, Humira and we did a very good job of eliminating those duplicate discounts. And so to the extent, as long as we're efficient with the scrubbing, you didn't see it come through necessarily in our results but that's really where I'd say it's not an issue for Skyrizi and Rinvoq. Over the long term, it's not an area of concern.

Okay. Let's talk about neurology. And let's start with the R&D. So I remember several years ago, you were pretty skeptical about amyloid beta. And you've now moved very quickly to advance some of the molecules you obviously had in research into the clinical pipeline. Can you tell us a little bit about how you think -- you see yourself participating in both the amyloid beta and the tau fields where your programs are, where should we see the next set of data? In your mind, what could drive that differentiation?

Sure. So starting with the Abeta, the molecule that we have in the clinic, again, it adheres to our overall philosophy of first-in-class or best-in-class. Clearly, we're not first-in-class. So we have to be best-in-class. So -- if you look at the evolving science in this space, right. 2 things stand out. One is that the rapidity of amyloid clearance may be important. And the other thing that stands out is that the safety liability around ARIA is also important. So these radiological changes. The asset that we have is, we believe, differentiated in class now. We'll learn a lot more this year about where this class of drug is going. But we believe that the asset that we have is potentially best-in-class for a couple of reasons. So it was selected to bind to an epitope that is less prevalent in the vasculature, right? So one of the -- I mean the [indiscernible] vasculature. So one of the probable causes of ARIA is as the amyloid is cleared, it disrupts this disrupted endovascular structure, right? And that leads to leaking of fluid into the cerebellar tissue. The molecule that we have binds more selectively right into the cerebellar tissue rather than the vascular tissue. So it should have an advantage with respect to causing less -- lower rates of ARIA, which can occur if you look at some of the published data in up to 1/3 of -- almost 1/3 of patients, so it's a real problem. Whilst maintaining from an efficacy perspective, the rapidity of amyloid clearance and we're currently in studies, and we're measuring both of those things. So as the data evolves -- as the external data evolve, our own internal data, our own internal program is set up to test whether or not those hypotheses are correct. In other words, from amyloid clearance, but also from a safety perspective, we've got a differentiated asset. And that's going to evolve pretty rapidly, right, in the next 2 years.

Yes, exactly. and tau?

Tau, it's is earlier. So I think that we're I'm not really ready to talk too much about it, but we have assets in the pipeline, and it's obviously just given the nature of a space that we're interested in.

Let's talk about migraine for a little bit. Your migraine molecules, maybe I should put it that way, your competitor from -- one of your competitors made a recent acquisition in this space. And on the call, they said that they're modeling $5 billion fixed sales for their molecule, which I thought was pretty big number. But I guess the question for you is, do you buy those. So you're going to have at least half of this market, assuming with your 2 orals, $5 billion good target for peak sales.

Look, we said for QULIPTA and Ubrelvy, we expect to exceed $1 billion. Now that could be right -- and so as we look at the potential I mean there are some unique differences with Nurtec and as we think about where QULIPTA can play role internationally versus where they can play, I have a hard time seeing them get. In fact, they said $6 billion, not $5 billion, the $6 billion. But these are markets with tremendous growth potential. We like the assets we have. As we get further along on the journey with Ubrelvy and QULIPTA, we may update that guidance. But it's not out of the question. I have a hard time seeing how with their molecule they'll get to the $6 billion, but it's not crazy.

So [indiscernible] is not tied to that number by any chance. No. I'm kind of -- maybe the right way to follow up on this. What is your expectation for the share of oral as a percentage of the overall market for migraine prevention? Is it more like -- I'm not asking for a dot point, but is it kind of like 80%, 60%, 40%?

I mean, theoretically, when we look at the markets, I mean, you've got these very established triptans. And what's been pretty interesting about this marketplace. I'm referring to the U.S. now. It's not like the triptan use is declining, it's actually when you look at the penetration rate of the CGRPs, the oral CGRP, it's building on top of it. So -- and that's typically how some markets work. So theoretically, when you look at the ability for people to handle triptans.,, I think it's less than 50%. I don't see anywhere near 80% simply because almost all the payer contracts make you step through triptans. So if you look at whether it's Nurtec or Ubrelvy, you have to step through at least 1 or 2 triptans for that. So then you look and say, how many people are going to struggle with triptans. I mean there's no question these are wonderful molecules. I mean -- they work great. They're very, very safe. I mean, Ubrelvy you review, you can take 2 of them. You don't get rebound headache. You can almost clear the migraine. If the first one doesn't work, you can take a second one. So if you look at the technical analysis, you'd say roughly 40% of people either can't tolerate or have contraindications to a triptan. So I think that's kind of how we see where that may cap out, but again, we've been pleasantly surprised based on the profile of the drugs on how much patients really appreciate these molecules.

And given the price, what you expect the U.S. to OUS ratio to be?

Well, I think this is a big piece of the perhaps risk on this guidance, the $6 billion guidance is where the pricing ends up on the international. In our planning, I don't know the exact one, Ronny, what the ratio is, but it's still largely a U.S.-orientated business. Now having said that, since we've done the acquisition, we've accelerated, particularly QULIPTA because we think that we know that we can see the mAb pricing. We know that we can differentiate there with the oral and having both of the indications. We started programs in China, Japan and Europe.

So that next 12 months, we'll see how that is.

Yes.

All right. Well, we've got about 2, 3 minutes left and I wonder if anybody wants to raise their hands and ask a question from the audience. In that case, I will throw one more, which is why don't we just do 951. So 951, I have big hopes for this. But the side effect profile, at least the one that you reported top line, looked a little bit not quite where it should be in order for this to essentially be able to compete with newer stimulation. How do you think -- I could be completely wrong. How are you thinking about this?

Look, if you think about the opportunity for these patients who are severely -- moderately to severely affected with Parkinson's disease, not to have to worry about [indiscernible] care, right? So the critical difference between 951 and DUOPA is that it's administered subcutaneously. And we've talked about this a lot. We've thought about, we've looked at the characteristics of how patients are managing on study. We've thought about a lot about what kind of support patients are going to need. But what's very, very clear to us is that we believe that 951 is going to open up therapy to a broader group of patients. just given the nature of their disease at that point. And just think about it, right? The patient and his or her caregiver don't have to worry about taking care of a stoma, right? It's a simple subcutaneous route of administration. So we believe that we're still very excited about 951 and I personally think that it's going to be really good for patients. I think it's a really great option for Parkinson's patients.

And peak sales range for this one?

We say greater than [ $1 billion ].

And with that, we're just around the end of time. So a lot of exciting things happening in AbbVie. Thank you very much all for being here and our 3 speakers today. Thank you. Thank you.

Thank you, Ronny.