Pharmaceutical giant AbbVie (NYSE:ABBV) reported robust financial performance for Q3 2023, outperforming expectations, according to the recent earnings call. The company's growth platform, including Skyrizi, Rinvoq, Vraylar, and Botox, demonstrated strong performance, driving significant revenue growth. AbbVie also raised its financial outlook and announced an increase in its quarterly dividend.
Key takeaways from the call include:
- AbbVie reported strong sales growth for its therapeutic portfolio, particularly in its Botox Therapeutic and Aesthetics segments.
- The company raised its full-year adjusted earnings per share guidance and expects strong growth from its ex-Humira growth platform.
- AbbVie announced a 4.7% increase in their quarterly cash dividend and remains on track to achieve $34 billion of debt paydown by the end of the year.
- The company's BCMA bispecific program and REGENXBIO program for wet AMD (NASDAQ:AMD) and diabetic retinopathy are showing promising results, with more data expected in 2024 and 2025.
- The company is committed to delivering a growing dividend, despite declining earnings, and aims to deliver a healthy and sustainable dividend growth to investors in the long term.
In the earnings call, AbbVie reported a 46.7% adjusted operating margin ratio and raised its adjusted earnings per share guidance for the full year, now expecting earnings per share between $11.19 and $11.23. The company also increased its revenue forecast to approximately $54 billion. The growth was attributed to the success of their ex-Humira growth platform, particularly Skyrizi and Rinvoq, as well as international sales of Humira and Restasis.
AbbVie executives also discussed their expectations for the coming year, stating that they expect the price erosion of their drug HUMIRA to be the main driver of revenue decline in 2024. They highlighted their interest in immunology, oncology, and psychiatry as areas of focus for pipeline development.
The company discussed several opportunities and programs during the call. The BCMA bispecific program is showing promising efficacy and safety data, making it a potential entry into the large multiple myeloma market. The company's REGENXBIO program for wet AMD and diabetic retinopathy is also advancing with encouraging data.
In response to a question about AbbVie's interest in building its oncology business, the CEO stated that they believe they have what they need with their internal platform, but did not provide specific details about potential acquisitions. The company also discussed the potential of their IBD products, Skyrizi and Rinvoq, in the market and their confidence in their performance.
The company remains committed to delivering a growing dividend, despite declining earnings. They expect the payout ratio to be in the mid-50s, with a long-term target of the mid-to-high 40% payout ratio. They aim to deliver a healthy, sustainable, growing dividend. In terms of sales and aesthetics, weight loss products can positively impact the aesthetics business by engaging patients in their appearance and providing opportunities for cross-selling. However, in the short term, there may be trade-offs due to discretionary spending constraints.
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