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Earnings call: AbbVie projects robust growth and diversified pipeline

EditorLina Guerrero
Published 05/15/2024, 07:22 PM
© Reuters.

In a recent earnings call, AbbVie Inc . (NYSE:ABBV) executives outlined a positive outlook for the company's growth, emphasizing the strong performance of its inflammatory and immunology drugs SKYRIZI and RINVOQ.

With a growth platform that accounts for 80% of AbbVie's business, the company saw mid-teens growth in the first quarter and anticipates robust growth in the next year, along with a high single-digit compound annual growth rate for the decade. Executives also discussed expansion in the oncology sector with their ADC platform and growth expectations in the neurology and aesthetics markets.

Key Takeaways

  • AbbVie's growth platform, chiefly driven by SKYRIZI and RINVOQ, saw mid-teens growth in the first quarter.
  • The company expects robust growth next year and high single-digit compound annual growth over the decade.
  • Upcoming indications for SKYRIZI and RINVOQ are projected to significantly increase revenue.
  • AbbVie is expanding its oncology portfolio with an ADC platform and anticipates entering Phase III trials in colon cancer with ABBV-400.
  • The company is optimistic about the growth of its neurology drug, emra, and expects continued market share capture with VRAYLAR in bipolar disorder and adjunctive MDD.
  • High single-digit growth is anticipated in the aesthetics business, driven by innovations like short-acting BoNT/E and regenerative fillers.

Company Outlook

  • Executives expect robust growth for AbbVie, despite anticipated impacts from Part D benefit changes in 2025.
  • The company's strategic focus remains on deepening its core in therapeutic areas such as immunology and oncology.

Bearish Highlights

  • The Part D benefit changes in 2025 are expected to impact the immunology, oncology, and VRAYLAR segments of the business.

Bullish Highlights

  • Positive results from a head-to-head trial of SKYRIZI against STELARA show significant market differentiation.
  • The ADC platform is set to expand into additional indications, potentially boosting the oncology portfolio.


  • There were no specific financial misses discussed in the call.

Q&A Highlights

  • The company is focused on investing in early-stage opportunities to strengthen their core therapeutic areas.
  • AbbVie is committed to deleveraging to achieve a net leverage of 2x in the next 2 to 3 years but has the capacity for smaller-sized acquisitions.
  • New therapeutic areas are not a high priority, but the company remains open to opportunities that align with their strategic focus and offer potential for differentiation and a strong return on investment.

AbbVie's executives provided a comprehensive overview of the company's strategic direction and growth prospects. With a diversified pipeline and a focus on core therapeutic areas, AbbVie appears poised for continued success in the pharmaceutical industry.

InvestingPro Insights

AbbVie Inc. (ABBV) has demonstrated a commitment to enhancing shareholder value, as reflected by its track record of raising dividends for 11 consecutive years, a testament to its financial health and management's confidence in the company's future. The company's net income is also expected to grow this year, indicating a strong financial outlook.

Investors looking for stability might find comfort in AbbVie's low price volatility, which suggests that the stock can offer a more predictable investment experience. This could be particularly appealing in the current market environment where many investors are seeking stability amidst uncertainty.

From a valuation standpoint, AbbVie's high Price / Book multiple of 35.64 as of the last twelve months ending Q1 2024, coupled with a P/E Ratio of 21.71, reflects a market sentiment that values the company's assets and future earnings potential highly. These metrics underscore the company's status as a prominent player in the Biotechnology industry.

For more detailed analysis and additional "InvestingPro Tips" on AbbVie, including the 17 analysts who have revised their earnings upwards for the upcoming period, visit https://www.investing.com/pro/ABBV. Discover the full spectrum of insights with a special offer: use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 12 more "InvestingPro Tips" available on InvestingPro that can provide further depth to your investment research on AbbVie.

Full transcript - AbbVie Inc (ABBV) Q1 2023:


Geoffrey Meacham: With me on stage is CEO, Rob Michael, currently President and COO, I guess, but soon to be.

Robert Michael: Soon to be, yes.

Geoffrey Meacham: Jeff Stewart, Chief Commercial Officer; and Roopal Thakkar, who is Senior VP, Chief Medical Officer, Global Therapeutics. So guys, welcome.

Robert Michael: Thanks for having us, Geoff.

Jeffrey Stewart: Thank you.

Q - Geoffrey Meacham: So I guess let's kick it off with the most topical, so in the I&I space, with the HUMIRA erosion, you guys have given guidance. You've laid the stage. And I'm sure in the next 12 months, you'll be thrilled to not have a question on this.

Robert Michael: The growth platform is 80% of our business and growing mid-teens. So we do look forward to talking about the growth platform.

Geoffrey Meacham: Right.

Robert Michael: We understand why we're getting questions on HUMIRA.

Geoffrey Meacham: Exactly. But I want to ask you, though, about the outlook for SKYRIZI and RINVOQ in the context of sort of I&I kind of disruption this year, and then obviously, that sort of ends in the next several years. And you're back to sort of stable growth organic and even beyond I&I?

Robert Michael: Yes. I think if you look at the business overall, I mean, we're very pleased with the performance of the growth platform. This year alone, you're talking about $5.6 billion of growth. You saw in the first quarter mid-teens growth delivery from the ex HUMIRA platform. And that's the fundamental strategy to really drive that long-term growth outlook. We do expect to return a robust growth next year. We've said think of that in terms of above industry average, so above single digits, which is industry average, but then accelerating the years beyond, ultimately delivering a high single-digit compound growth in this decade. And so -- and you look at the performance of SKYRIZI and RINVOQ, they've been exceptional. We've had, obviously, the broad indication footprint, really, really nice share capture. If you look at dynamic share, you look at TRx share, there's still a lot of headroom for growth. The IBD indications for SKYRIZI and RINVOQ are performing exceptionally well. We're seeing continued momentum. It helps to have 10 head-to-heads between SKYRIZI and RINVOQ that demonstrate the differentiation that we truly believe in. You're seeing that market adoption. You saw for SKYRIZI the head-to-head against STELARA and the impact on -- just immediate, we saw the in-place share capture, the inflection there, really strong performance. And then as we think about as we navigate this period with the HUMIRA U.S. biosimilar entry last year, we've now had 5 quarters with that entry. And we've essentially called it in either right on or we've beaten it most quarters. And so we have a pretty good handle. I'd say the event that many investors are focused on with CVS, we anticipated. We knew that was changing. We knew that exclusion was happening on April 1. That was baked into our guidance. You saw us on the first quarter call. We took up our overall revenue guidance by $800 million, didn't change HUMIRA because we anticipated that. So we can certainly get into more detail on that, but that was fully expected. HUMIRA last year declined about $6.5 billion. This year, based on our guidance, to be about $4.5 billion. We're managing through that. And despite that erosion, we still now return to growth. We're actually going to deliver growth 1 year after the U.S. HUMIRA LOE event, and no one in our industry has been able to deliver that. And that's on the back of a very strong performance from the growth platform. And so we're very excited about that. We're very excited about the future of the pipeline. We have exciting programs in oncology with 383, our BCMA CD3 bispecific in myeloma; 400, our ADC using the Topo-1 warhead. And then obviously, with ImmunoGen (NASDAQ:IMGN), ELAHERE is off to a very strong start. There's a very exciting ADC pipeline there. Clearly, with Cerevel, the addition of emraclidine, tavapadon, their core antagonist gives us depth in the neuroscience pipeline. So as we look at the business today, we're very confident in our ability to drive that growth. And our focus really is how do we drive growth in the next decade, and that's largely how we're thinking about BD. But SKYRIZI and RINVOQ are performing exceptionally well. And we went through this event with HUMIRA last year. You did not see significant price concessions on SKYRIZI and RINVOQ in this year. And so it gives you a sense of just how robust those therapies are performing. Yes.

Geoffrey Meacham: And let's stay on that. So when you think about '25 and beyond, as you invest in new indications and you grow the current indications, what would you say are sort of the next wave of indications to come?

Robert Michael: Sure. So we'll have, with SKYRIZI, we anticipate the UC approval in the middle of this year, and we expect that to drive another inflection in terms of the shape of the growth trajectory for SKYRIZI. And that will certainly round out then if you think about the SKYRIZI indications. But then for RINVOQ, we have another wave of indications coming, think in terms of the '26, '27, '28 time frame, covering vitiligo, HS, alopecia, lupus and GCA. Those collectively will add a few billion dollars in peak revenue for RINVOQ. And so you'll see another inflection in growth for RINVOQ with those additional indications. And we would expect SKYRIZI and RINVOQ to grow very robustly through the early part of the next decade. I think until '33, we expect very robust growth. We upped our guidance for '27 to greater than $27 billion for these 2 assets. And we would expect that growth to continue to be robust beyond those years. And so we will have, again, the indication expansion for SKYRIZI, but also the next wave of indication of RINVOQ will certainly help that long-term outlook.

Geoffrey Meacham: Right. I know you guys haven't given specifics on it, but I just wanted, at a high level, get your perspective, Rob, on maybe the Part D benefit changes.

Robert Michael: Sure. Yes. So we've talked about that actually now twice on the fourth quarter call and the first quarter call. And the reason we wanted to highlight it is because it was very clear as we were having conversations with investors that it didn't seem like it was fully understood, the implication of the Part D benefit redesign for '25. Now that said, while it will have an impact, I'll talk you through what that impact looks like [indiscernible] with a high out-of-pocket burden, you will see lower prescription abandonment rates, but that represents probably 1/3 of the population. The other 2/3 either are LIS eligible and, therefore, they don't have the out-of-pocket burden or they're in the standard benefit design, but they have low out-of-pocket burden. So for 1/3 of the patients, there will be a volume offset, but that's why it's not -- it doesn't offset the higher cost share. That cost share will impact immunology, oncology and VRAYLAR next year. I've said think of it in terms of being worth several points of growth next year. But even with that growth, that impacted growth included, we're still going to deliver robust growth, above industry average, above high single digits. So we've already baked that in. And then when you get in the years beyond, a lot of investments focused on negotiation impact. Obviously, IMBRUVICA has been selected. But one thing to keep in mind is when a product is selected for negotiation, it no longer has that cost share liability and the Part D benefit redesign. So there's a natural offset. The other thing to highlight is HUMIRA is part of that impact next year on the Part D benefit redesign, and HUMIRA will be declining. So we don't have another step function in terms of IRA beyond '25. So when you think about the company, we will not have any major LOEs for the rest of this decade. We'll essentially have that Part D benefit redesign but no additional significant impact beyond. And so we're in a position now with that growth platform, deliver very, very strong growth, which ultimately allows us to deliver a high single-digit compound growth in this decade, inclusive of the impact of IRA.

Geoffrey Meacham: Great. You mentioned it, but the head-to-head against STELARA, with the STELARA LOE, though, I imagine that, that over time has become less of a worry if you had to have an indirect impact on your growth portfolio.

Robert Michael: I'll let Jeff cover that.

Jeffrey Stewart: Yes. I think that's very accurate. I mean this head-to-head trial, which was our ninth, I would say was probably the most substantial investment that we made. And when you looked at the results, it's very significant, I mean, particularly so you have double the impact versus STELARA, really high-dose STELARA on healing of the bowel. And that data has really made all of the global gastroenterologists really stand up pretty hard and say this is practice-changing data. And not only do we hear that from the podium, I mean, we see it in our data. To Rob's point, SKYRIZI around the world has -- was performing extremely well before that data was released. And since that data was released, the acceleration of our share capture largely at the expense of STELARA is very, very clear. So the way we see over time, when you see that level of differentiation, it's certainly going to mitigate, to a large degree, the impact of the STELARA biosimilar. And so that, again, that clinical investment, among the others, is really going to help us continue to have just significant momentum, not just in IBD, but across SKYRIZI and RINVOQ as the years go by.

Geoffrey Meacham: Right. Makes sense. Let's switch gears to oncology. So bringing in ADC platform in-house. Maybe talk about how this -- how post the closing of the deal, kind of does that shift your thinking? Do you do -- as you sort of look under the hood, do you want to add more to the ELAHERE program? Do you want to expand more broadly into ADCs? And many of your peers, obviously, are heavily investing in ADC, and that should continue.

Roopal Thakkar: Yes. I think that's organically happening along with having ELAHERE now. In addition to the treatment where we have ELAHERE today, we have an ability to double that penetration into the sensitive population, from resistant and potentially medium and going into earlier lines of maintenance. That being said, to get into potentially lower levels of expression or endometrial cancer or others, there's another backup asset next gen that binds 2 epitopes, may have greater internalization as we think of ADCs, what's next gen. That could be one that follows. That's in the clinic now. So that's already running. And that's ovarian cancer, which is the segment we're talking about is dominated by chemotherapy. And we can see a lot of opportunities there as we go on earlier and able to combine. What we've noticed with this particular ADC and warhead that it's able to combine at full dose with bevacizumab, which is very commonly used in ovarian cancer and actually with carboplatin, which is used as induction. So that profile is starting to shape up nicely as we think about ADCs. And then if you look at our -- where we were at in colon cancer, we'll be entering Phase III today to this year with ABBV-400, which is our follow-on to Teliso-V. So we're taking the c-Met antibody, but putting on a topoisomerase warhead. Now that warhead is AbbVie's, and that's available even to go to ELAHERE or to the next-gen ELAHERE as well. And what we're seeing in colon cancer that we didn't see with Teliso-V is greater depth of response. So we're seeing high levels of response in a very refractory patient population, and we're going to enter into the Phase III of that segment this year. So you take ovarian, which has high unmet need. Colon cancer is very similar. It's dominated by chemo, but a much larger patient population with very low 5-year survival rates. And then if I think about what's even bigger than that, it's lung cancer. We have Teliso-V now in later lines of therapy in c-Met intermediate to high expression in Phase III. But we see 400 to have that opportunity to expand into lung cancer further into earlier lines of therapy and EGFR wild type and in fact, potentially mutant in combination with osimertinib. So that ability could really expand our participation in that ADC market, because the other thing you want with these ADCs especially for next gen, is that ability to combine with other therapies in a tolerable way. So you're not getting the same chemo-like adverse events that you do with chemo. So you want to really replace chemo. So we're starting to see that play out in ovarian, lung and colon. And then for 400, later this year, we'll see that data from lung to see exactly where we can take them. But we anticipate better efficacy than what we've seen with Teliso-V.

Geoffrey Meacham: For sure. It sounds like ADCs are much more foundational and going to get a lot of capital in terms of R&D dollars going forward.

Robert Michael: Yes.

Geoffrey Meacham: What is the -- so the maintenance ovarian is probably the bigger of the opportunities when you guys look at your kind of long-term guidance, the platinum sensitive.

Robert Michael: I think we've talked about in platinum-resistant and then you have a doubling in platinum-sensitive, and then you have another doubling in sort of in the medium population. There is obviously an opportunity there as well in maintenance, but that's the way we've characterized it. As you think about the expansion as being a multibillion-dollar peak sales opportunity, that's the way we're thinking about the expansion potential for ELAHERE.

Geoffrey Meacham: And then from a promotion perspective, did you guys redeploy? Have you redeployed some folks from, say, the IMBRUVICA or the hem/onc into ELAHERE? Or was that sort of a natural kind of transition?

Jeffrey Stewart: No. So the way that we're looking at that since we've closed the deal, I mean, the ELAHERE team has done a really, really beautiful job. I mean if you look at time line of sales, it's the most rapidly growing ADC that's been launched to date. And it goes back to Roopal's standpoint, which is you kind of got a chemo-only competitively open space. So they've done a super job with calling on the core physicians, educating around the FRa alpha. So as we look going forward and similar to what we did when we closed the Allergan (NYSE:AGN) deal, which is we can bring a lot of resource. Now we're not planning on shifting from IMBRUVICA or VENCLEXTA, which mostly call on the hematologist, but basically to supplement where we can go deeper into the call plan. So sort of deeper into the -- of the clinical oncologists, which we think are going to get us more momentum, probably more education around the FRa alpha in terms of -- particularly to women that are diagnosed through digital channels, et cetera. So we have plans in place to continue to invest on the commercial side into that footprint, which has been a great early launch footprint. But we're going to be able to do more to continue to fuel that as those indications start to gate in.

Robert Michael: I mean ImmunoGen really gave us an opportunity to have an early entry in the solid tumor. So we obviously have, as Roopal mentioned, our own programs, think about 400. So we are investing in ADCs. But with them having a commercial footprint, an on-market asset that was ramping very nicely, it just gave us that early entry. And so we've brought that now, that solid tumor commercial infrastructure in to complement our hematology footprint. And so that -- we saw it as an acceleration of that investment.

Geoffrey Meacham: Got you. Makes sense. Let's switch gears to neuro. And so any updated thoughts? I know with the Cerevel data coming, and there's a lot going on in the competitive landscape. Any updated thoughts on how you think that could play out?

Roopal Thakkar: The data that's been read out was in Parkinson's with tavapadon, and we saw a nice strong data there as an adjunct to levo-carbidopa. These are patients where they're still trying to optimize oral therapy. And you can add this on as a 24-hour half-life, so we can smooth some of these adverse effects that are suffering from Parkinson's and we saw an extra hour of on time. So that -- the next Phase II study is -- Phase III study, sorry, will read out the rest of this -- over the course of this year. And those are actually, even in earlier lines of therapy, against placebo. So once we have that, then obviously, we'll go through a submission process. And it fits nicely in nonoverlapping way with VYALEV or 951, which has already launched ex U.S., and we anticipate approvals this year, this summer. And then you can have the 2 of the patients who are trying to optimize oral therapy and then the ones that can't anymore that are truly advanced that aren't ready for a surgery, but now you come in with a subcutaneous option, which the uptake globally has been quite strong.

Robert Michael: Yes. Just to like to add to Roopal's commentary, just to make sure it's clear, we don't see any overlap with tavapadon. I think addressing the early part of Parkinson's disease, whereas VYALEV or 951 into a dopa address the later. So there's really no overlap. They're very complementary, but it really gives us a nice round out of the Parkinson's franchise.

Geoffrey Meacham: Well, investors also vis-à-vis KarXT kind of look at this as a zero-sum game. And I think it doesn't play out that way typically commercially, right? I mean both parties can typically...

Robert Michael: Well, I think the muscarinics absolutely can take quite a bit of share of the overall market. But I would say, and I think Roopal, you should highlight this. I mean, I think we feel very good about the profile of emra relative to KarXT, although I don't see it as a zero-sum game, but I like our competitive profile.

Roopal Thakkar: Yes. From an adverse event perspective, we only have the one agent. We don't have a cholinergic and anticholinergic mismatch. So it's once a day. That's also a nice benefit for patients with schizophrenia. They don't want to take it twice a day. And we don't have a food effect where it appears that agent has a significant food effect. So twice a day, you have to plan your meals around. That could be quite challenging, and then you have gastrointestinal adverse events due to the anticholinergic, cholinergic competition, which we don't see that happening. And then a potential for -- maybe a smoother potential if you have better tolerability to convert a patient that's on an oral to a long-acting injectable. And from a CMC standpoint, we only have to worry about one agent, a molecular entity to convert that to LAI. So we see that as a very nice profile that's emerging.

Jeffrey Stewart: But Geoff, to your point, I mean, it isn't a zero-sum game. I mean having multiple new mechanisms in the muscarinic class will help with the overall adoption with these agents. There's no question about that. And depending on what research you look at, it's on the low end that it's 30% or 40% of the total antipsychotic market and probably even higher. So having multiple players, multiple investment, education over these things is net-net going to be a very, I think, very positive for patients. And we feel, as Roopal said, pretty confident in our profile as we come in second.

Geoffrey Meacham: And you would totally expect naturally step edits to happen in the class initially. But I think over time though, better clinical profile for muscarinics, I think, is going to ultimately lead to a much better -- longer duration of use, I would say.

Jeffrey Stewart: It's a great question. I mean typically, I mean, you do get step edits with the older generics, although the promise of these agents is so different that I think what will happen naturally is if there are step edits early, patients will cycle through super fast because they're so poorly tolerated. And to your point, I think in many territories around the world, it's -- given the profile, it would be difficult for payers given the pressure from advocacy and the clinicians to really stand in front of agents that look like what we see with emra, for example. But it will take a little bit of time to mature, but that's how we see the payer landscape play out, which is similar to what you highlighted.

Geoffrey Meacham: VRAYLAR is also growing very nicely. Maybe just in the next several years, what would you say is the bigger driver there? Is it just market expansion, we have geographic expansion? Just give us some perspective on that.

Jeffrey Stewart: Yes. It's largely share. So if we take a look at the 2 big indications are growing about the same pace. So we have the bipolar disorder, and we had the adjunctive MDD. What we highlighted before, schizophrenia, we don't promote it, and it's not a real player based on the profile. So it's the 2 -- these 2 big indications. And as we watch basically the ramp in our in-play capture, the large driver of value is going to be ongoing share capture. And the market is so big that even small changes in share deliver a lot of value. We do have some geographic expansion, but it's pretty nominal. So it's a U.S. story around the ability for us to move those 2 big indications. What is encouraging when we go talk to the psychiatrists and the big prescribers, we can see in the most recent market research that we have the highest perceived value in the bipolar segment and very, very close to the top, tied for #1 in the adjunctive MDD segment. So we've got a very nice product there that we can gain a lot of share.

Geoffrey Meacham: Right. Let's switch gears to Botox. So where would you say that we are in kind of the economic cycle? I know it's been flattish. It's been up and down in the past couple of quarters, but it feels like we're maybe coming at the end of kind of this perhaps an economic uncertainty, and maybe there you'll expect to see a little bit more growth there.

Robert Michael: So if you -- on the U.S. toxin market, we saw it really return -- the market return to growth in the third quarter last year. We saw that continue in the fourth quarter, and we saw again the first quarter, thinking like in terms of mid-single-digit market growth. So we are seeing a recovery there. We've actually given -- if you look at the guidance we've given for the aesthetics business this year, it's high single-digit growth. So we'd say we've returned to growth. The U.S. is -- we're seeing this sequential improvement. Even fillers were somewhat -- I think the market was essentially flat. It tends to lag somewhere around 2 quarters of toxins, but we're seeing nice recovery there in the overall market. But what's really encouraging is the share performance. There was a lot of questions around the impact of DAXXIFY, what that meant for Botox Cosmetic. We've held our share throughout that entire launch. And so it's been pretty resilient. And then we've actually seen with Juvederm, the Juvederm family, we've seen actually share increase as we've had the launches of VOLUX and SkinVive, we've seen a nice improvement in share. And so when I look at the fundamentals of the aesthetics business, they're very strong. We had a dynamic in the first quarter with shifting promotions. And that I think what you're referring to is probably as you look at the revenue, looking at something that's flattish. But if you adjust for the share performance, the market performance and back out that, it was essentially an inventory change in the quarter. It's performing in line with our expectations, and we're still very confident to be able to deliver on the outlook this year and ultimately delivering on the longer-term outlook of greater than $9 billion by '29.

Geoffrey Meacham: What would you say from a long-term kind of growth perspective? Would you -- I mean is this mid- to high single digit?

Robert Michael: Yes. Well, you have to believe to get to this is the business, the aesthetics business have to grow high single digits. Now if you look historically, these markets have grown mid-teens, right? So you don't necessarily need that type of growth. The other area I'd point to is, I mean, innovation is going to play a role. I mean we have, in some cases, additional indications for Botox like platysma and masseter, which each add a couple of hundred million dollars. But we're very excited about the short-acting BoNT/E that fast to onset, fast to offset, short-acting toxin that we think can really drive an inflection in the market growth. I mean this is a market that has very low penetration rates. And one of the biggest barriers is fear of an unnatural look. And so if you have an offering in which you now can present an opportunity for a consumer to try Botox with less risk and then they like the result, they're coming back and they're going to want Botox. And so you could see a very nice inflection in market growth as well as more share capture. And so we're very excited about the opportunity there. We also would say our programs around regenerative fillers, biostimulatory fillers could also drive that innovation, can drive growth on the filler side of the business. So those are things that we're looking at that will ultimately help us drive that high single-digit average growth expectation to get to that $9 billion.

Geoffrey Meacham: Makes sense. Yes. And then next couple -- final few minutes, let's talk a little bit about BD. So you guys did some -- a few deals. I know the focus is mostly on sort of delevering. But what's the -- in the near term, but where do you see -- of all the therapeutic areas that you guys are in, where do you see the biggest opportunities? And maybe give us some context on kind of size or scale from here.

Robert Michael: Sure. Sure. I mean given our current portfolio that can deliver that high single-digit compound growth in this decade, our BD priorities are really around definitely assets that can drive growth in the next decade. And that's largely, if you think about Cerevel and ImmunoGen, both fit that profile. And they gave us further depth in our ADC pipeline with ImmunoGen and further depth in neuroscience with Cerevel. At the same time, over the last 1.5 years, we've been actively investing in, I'd say, early-stage, smaller-sized opportunities to really deepen our core. And that's really what I'm looking for is how do we continue to deepen our core as we think about driving growth in the next decade, given that we have good line of sight for this decade. And so we've done a number of deals. You look at a number of mechanisms in immunology that are very interesting, that can certainly contribute to that long-term growth outlook. The Umoja in-situ CAR-T opportunity, we're very excited about that. We do think -- we think about oncology, multispecifics, ADCs, in-situ CAR-T, those are areas where we're really doubling down in. And so that was a very attractive transaction. We released and announced the Gilgamesh collaboration, which is another approach to addressing mood and anxiety disorders, as a great example. Tentarix, the multispecifics platform for immunology and oncology. So these are all, I'd say, smaller-sized opportunities, but very important as we really bolster our pipeline for that long-term growth. It isn't really because we're focusing on deleveraging. We've committed to getting back to net leverage at 2x the 2- to 3-year time frame. We generate enough cash to be able to do both. And so it's not so much a balance sheet limitation why we're looking at smaller-sized deals. It's more about the portfolio status and the fact that we really want to invest for the long term now, given that we have such a strong portfolio for the short term. So that's strategically a choice we're making, not really constrained by the balance sheet. We can pursue -- we have a financial wherewithal to pursue opportunities, but it's really more of our strategic focus on looking for more early-stage long-term growth drivers.

Geoffrey Meacham: And what are the hurdles to adding a new therapeutic area, for example?

Robert Michael: I would -- I'd never say never, but I mean, when you think about it, we have good diversity now. We have a number of areas where we can go deeper on our core. And that's where we've really been focused is on those areas. If there's an adjacency or another pillar, as I think about the growth in the next decade that can -- that fits our profile, I would never say never. But it's not, I'd say, a high priority for our BD strategy. But we never rule it out if it makes sense, if it's something that we see differentiation, you can elevate standard of care, we can leverage our capabilities, we can get a good return on that investment, we wouldn't shy away from that.

Geoffrey Meacham: There's plenty of opportunities in your core therapeutic areas.

Robert Michael: There's plenty, and certainly focusing on building depth there is our focus.

Geoffrey Meacham: Awesome. Thanks, guys.

Robert Michael: Great. Thanks, Geoff.

Jeffrey Stewart: Thank you, Geoff.

Roopal Thakkar: Thank you.

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