Abbvie Inc

NYSE:ABBV

Earnings Call Transcript 2022-Q1

[Operator]

Good morning and thank you for standing by. Welcome to the AbbVie First Quarter 2022 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion of this call. [Operator Instructions] Today’ conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to introduce Ms. Liz Shea, Vice President, Head of Investor Relations.

[Liz Shea, Vice President, Head of Investor Relations]

Good morning, and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer; Rob Michael, Vice Chairman, Finance and Commercial Operations and Chief Financial Officer; Jeff Stewart, Executive Vice President, Chief Commercial Officer; and Tom Hudson, Senior Vice President, R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call are Carrie Strom, Senior Vice President and President, Global Allergan Aesthetics; Neil Gallagher, Vice President and Chief Medical Officer; and Roopal Thakkar, Vice President, Global Regulatory Affairs.

Before we get started, some statements we make today may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. AbbVie undertakes no obligation to update these forward-looking statements, except as required by law.

On today’s conference call, non-GAAP financial measures will be used to help investors understand AbbVie’s business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website. Following our prepared remarks, we'll take your questions.

So with that, I'll now turn the call over to Rick.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

Thank you, Liz. Good morning, everyone, and thank you for joining us today. I'll briefly comment on our overall performance, then Jeff, Tom and Rob will review our first quarter business highlights, pipeline progress and financial results in more detail.

I'm pleased with the excellent start to 2022. It further reinforces our confidence in the long-term fundamentals of the business. We reported adjusted earnings per share of $3.16, exceeding our expectations. Total net revenue of more than $13.5 billion was up 5.4% on an operational basis, also above our expectations. These results demonstrate strong momentum across several key products and portfolios, including robust double-digit operational revenue growth from Skyrizi, Rinvoq, Neuroscience and Aesthetics.

Skyrizi is performing exceptionally well. We are achieving impressive market share gains in psoriasis, which remains a significant market opportunity. Skyrizi's recent launch in psoriatic arthritis as well as the anticipated regulatory approval in Crohn's disease should also serve as important growth drivers over the long-term.

Rinvoq is also contributing compelling sales growth. Subscription trends in RA have recently stabilized as we expected and we are making excellent progress repositioning the brand as the leading second-line agent based on the robust data generated across our broad development programs. The early launch trends for Rinvoq in both atopic dermatitis and psoriatic arthritis are highly encouraging, with commercial access and paid prescriptions expected to ramp significantly over the coming months. We anticipate that these two new indications, along with the recent US approval in ulcerative colitis, should add substantial revenue growth for Rinvoq over the long term. Neuroscience remains an exciting opportunity for our company. Vraylar continues to have strong momentum across our currently approved indications and the pending regulatory approval in major depressive disorder represents a significant upside to current projections.

In migraine, our portfolio of distinct therapies with Ubrelvy, Qulipta and Botox Therapeutic is demonstrating robust double-digit sales growth. With the migraine market anticipated to roughly double in size over the next several years, there is significant headroom for continued revenue growth with these compelling therapies.

Aesthetics is once again exceeding expectations. The category continues to grow robust double-digits, especially in toxins and fillers, where there is substantial opportunity for further market penetration. Our commercial team is executing at a high level with targeted promotion and enhanced digital services, including our Alle loyalty program driving strong market share performance across our major brands.

In summary, this is an exciting time for AbbVie, and I'm extremely pleased with the evolution and momentum of our diverse portfolio. We're making excellent progress with the launches of several new products and indications, which will collectively add meaningful revenue for AbbVie as commercial access ramps for each of these opportunities over the remainder of this year. We're off to another exceptional start, and our long-term growth prospects remain strong.

I'd now like to take a brief moment to thank Mike Severino for his contributions to the success of AbbVie over the last eight years. As you know, Mike has decided to leave AbbVie at the end of May to pursue another career opportunity, and we wish him all the best.

I'd also like to take this opportunity to formally introduce to you Tom Hudson. Tom joined AbbVie back in 2016 as the Head of Discovery and Early Development. In 2018, Tom undertook responsibilities for AbbVie's entire discovery organization. Then in 2019, was promoted to the Head of AbbVie R&D and Chief Scientific Officer, where he assumed responsibility for all of AbbVie's R&D.

Tom has an impressive background as a clinical scientist. His medical specialty is in clinical immunology and allergy. Tom played a critical role in the human genome project while working at both the Whitehead Institute and MIT, where Tom led the team that mapped the human genome. Tom was also instrumental in the international half map project to refine the genetic architecture of the human genome.

Tom went on to further lead the Ontario Institute for Cancer Research, which included discovery and translational cancer research with a clinical network of more than 1,000 investigators. Tom will be providing an update on our continued pipeline progress to you later in the call. But first, I'll turn the call over to Jeff for additional comments on our commercial highlights. Jeff?

[Jeff Stewart]

Thank you, Rick. We continue to demonstrate strong commercial execution across our therapeutic portfolio. I'll start with Immunology, which delivered global revenues of more than $6.1 billion, reflecting growth of 8.1% on an operational basis. Humira global sales were approximately $4.7 billion, down 1.8% on an operational basis with low single-digit revenue growth in the US, offset by biosimilar competition across international markets, where revenues were down 17.9% operationally.

Skyrizi global revenues were $940 million, reflecting positive momentum in both approved indications. In psoriasis, Skyrizi is demonstrating impressive market share gains globally. Skyrizi now accounts for approximately 23% of the total prescription share in the US biologic market. Skyrizi's in-play psoriasis share, which includes both new and switching patients, also remains very, very strong and now reflects roughly 40% patient share in the US and a clear number one leadership position.

Skyrizi is performing exceptionally well internationally, where we have now achieved approximately 10% psoriasis share across our top 12 markets, as well as in-play share leadership in more than 20 key countries. While we were early in our launch in psoriatic arthritis, we are encouraged by the uptake in this indication. In the dermatology segment, Skyrizi has already achieved in-play patient share of more than 10% in the US.

Internationally, Skyrizi PSA is now approved in 45 countries, with reimbursement expected to increase throughout the year. Importantly, we are also preparing for the launch of Skyrizi in Crohn's disease, which represents another important long-term growth driver with approval decisions anticipated this year.

Turning now to Rinvoq, which delivered global sales of $465 million, demonstrating continued strong growth. As anticipated, we have seen an impact on new patient starts following the label update and Rinvoq prescriptions have now stabilized in the U.S., with in-play market share currently 12% in RA. We expect growth in the second line plus RA setting going forward where our field force is now focused on leveraging compelling data from two important Phase III trials.

First, SELECT-CHOICE, which demonstrated Rinvoq's superiority versus ORENCIA across key efficacy parameters, including clinical remission in previously treated RA patients. And second, the open-label extension of SELECT-COMPARE which demonstrated that many RA patients with an inadequate response to Humira are able to achieve remission after switching to Rinvoq.

Early feedback suggests this updated Rinvoq RA messaging is resonating very well with healthcare practitioners. Internationally, Rinvoq share continues to ramp in RA with a total market share of approximately 5.5% across key geographies. We are also making excellent progress with Rinvoq's newly launched indications, including atopic dermatitis, psoriatic arthritis and ulcerative colitis.

Managed care access is expected to ramp strongly for each of these indications over the coming months. As we build access, initial prescriptions are covered by our BRIDGE program. which provides free patients or free goods to patients until formulary coverage is established. As a reminder, the volume from our BRIDGE program is not captured in third-party prescription data.

I'll start with atopic dermatitis. We are seeing new patient starts accelerating as we build access. When you include prescriptions from our Bridge program, Rinvoq total in-play AD share is already in the mid-teens. So, we are pleased with the early adoption and repeating prescribers. As an oral option that provides significant skin clearance and itch relief, we believe Rinvoq has a strong differentiated position in this highly underpenetrated AD market.

In PSA, we are seeing a nice uptake in Rinvoq's in-play share, especially in the rheum segment, where the severity of joint or skin manifestations of the disease can vary significantly by patients. And importantly, we have also launched Skyrizi in the rheum-PSA segment this quarter, giving us two very compelling therapies to address the wide range of PSA patient types, regardless of how their symptoms present.

We have also launched our first indication in the IBD segment, Rinvoq for ulcerative colitis, where we are seeing a significant long-term opportunity in the second-line plus setting. Nearly 50% of UC patients are currently on or have used TNF therapy, so the addressable patient population is substantial. Given the strong benefit risk in this indication, we believe Rinvoq will be a welcome therapeutic option for UC patients and physicians.

Turning now to hematologic oncology. Global revenues were more than $1.6 billion, down 0.6% on an operational basis. Imbruvica global revenues were approximately $1.2 billion, down 7.4%. There are two factors impacting our Imbruvica results.

First, we are seeing greater market share erosion in new patient starts than originally anticipated from newer therapy, including other BTK inhibitors, as well as our own Venclexta.

Second, we continue to see higher-than-expected COVID suppression on new patient starts in CLL, which as a treat-to-progression therapy, has impacted the total BTK treated patient market.

Our guidance assumes a market recovery over the course of this year, but it's too early to determine exactly how this may play out, given the continued impact from recent COVID variant.

Despite these dynamics, Imbruvica remains the market-leading therapy for total patients across CLL and several other major blood cancers. Based on the magnitude of clinical data and real-world evidence generated for Imbruvica, showing sustained disease control as well as overall patient survival, we are confident it will continue to be a meaningful product for AbbVie over the long term.

Venclexta, however, is helping to offset some of the headwinds facing Imbruvica. Global sales were $473 million, up 21.1% on an operational basis. In the US, Venclexta's the clear market share leader in frontline AML, among patients who are ineligible for intensive induction chemotherapy and recently achieved leading new patient share in second line plus PLL. We are also seeing robust momentum internationally, with strong performance across all approved indications.

Additionally, we continue to make excellent progress building out our hem/onc portfolio, with several compelling late-stage assets, such as epcoritamab for B-cell malignancies, Navitoclax for myelofibrosis and ABBV-383 for multiple myeloma, expected support -- expected to support sustainable long-term growth.

Turning now to neuroscience, where revenues were approximately $1.5 billion, up more than 20% on an operational basis, including robust double-digit growth from Vraylar, Botox Therapeutic and Ubrelvy.

Ubrelvy is performing very well and continues to be the market-leading oral CGRP treatment for acute migraine, with sequential demand growth observed. Qulipta is also demonstrating exceptional uptake in migraine prevention, with recent total prescriptions performing ahead of comparable branded launches.

Qulipta is now capturing nearly 25% on of the new-to-brand share in the US preventative CGRP class when we consider both paid and bridge volume. We expect commercial access to continue to ramp strongly over the remainder of the year.

Qulipta has also recently demonstrated positive results from a registration-enabling study for the preventative treatment of chronic migraine, which we plan to submit to the agency for potential expanded use in the US as well as to support regulatory applications across the international market. This indication, if approved, will provided added differentiation for Qulipta as the only oral CGRP therapy for the preventative treatment of both episodic and chronic migraine.

In our other notable therapeutic, eye care revenues of $771 million were down 2.8% on an operational basis with recent generic competition for Restasis unfavorably impacting our results. Mavyret sales were $380 million, down 4.6% on an operational basis as treated patient volumes remain depressed compared to pre-COVID levels.

So, overall, I'm extremely pleased with our execution across the therapeutic portfolio, including the progress we are making with recent new product launches. We remain on-track to deliver strong revenue growth once again in 2022.

And with that, I'll turn the call over to Tom for additional comments on our R&D program. Tom?

[Tom Hudson]

Thank you, Jeff. I'll start with immunology. We recently received FDA approval for Rinvoq in ulcerative colitis, a disease where there continues to be a significant unmet need for therapies that can provide high response rates and durable remission.

In our UC development program, Rinvoq demonstrated some of the highest rates of remission and endoscopic improvements seen in Phase 3 studies. Importantly, Rinvoq also provided durable responses sustained through one year of treatment.

Given the strong benefit risk profile, we believe Rinvoq will be an important new medicine for patients. Our regulatory applications for Rinvoq in UC remain under review in Europe and Japan, with approval decisions expected in the second half of this year.

Also in the area of inflammatory bowel disease, we recently reported positive topline results from the second Phase 3 induction study for Rinvoq in Crohn's disease. Similar to results from the first induction trial, in this induction study, Rinvoq demonstrated a very strong impact on the disease as measured by clinical remission and endoscopic response.

We expect to see results from the Phase 3 maintenance study later in the quarter with our regulatory submissions for Rinvoq and Crohn's disease expected in the third quarter and approval decisions anticipated in 2023.

Rounding out Rinvoq's development programs in rheumatology, we also have regulatory applications under review in ankylosing spondylitis and non-radiographic axial SpA. We expect an FDA approval decision in the second quarter for AS and decisions in the fourth quarter for non-radiographic axial SpA.

Moving to Skyrizi, where in the quarter, we announced an update regarding our regulatory application for Crohn's disease in the US. Following an FDA request for additional information, primarily related to the on-body injection device used for maintenance dosing, we provided additional data for the device from an ongoing real-life use study, which showed that patients can safely and effectively use the on-body device to self-administer Skyrizi. After responding to the agency's request, we received a 3-month extension of our Skyrizi submission in Crohn's disease. We remain confident in a strong benefit risk profile for Skyrizi in Crohn's disease and we now expect a decision in June.

Moving now to our Oncology Portfolio, where we continue to make excellent progress across all stages of our heme and solid tumor pipeline. We recently announced positive top line results from the first expansion cohort of the Phase II study, evaluating epcoritamab in patients with aggressive B-cell lymphoma who have received at least two prior lines of therapy.

Epcoritamab performed extremely well as a monotherapy in these heavily pretreated and high-risk patients, demonstrating an overall response rate of 63% with a median duration of response of 12 months. These results are particularly encouraging, given that nearly 40% of patients had failed CAR-T therapy. We plan to discuss these results with regulatory agencies about the potential to support submission for accelerated approval in the second half of this year.

We continue to make good progress with the indication expansion programs for Venclexta and remain on-track to see results from the Phase III CANOVA trial in relapsed/refractory multiple myeloma patients with a t(11;14) mutation in the second half of this year. In our Venclexta MDS program, based on feedback from the FDA, we have recently modified our regulatory strategy and now intend to submit data from our ongoing Phase III program. Venclexta remains under Breakthrough Therapy Designation for MDS and we continue to have a high degree of enthusiasm for Venclexta in this indication. We expect data readout from the Phase III study and our regulatory submission for MDS in 2024.

In Neuroscience, the FDA recently accepted our application for Vraylar as an adjunctive treatment for major depressive disorder. Based on the strong benefit-risk profile demonstrated in our clinical program, we believe Vraylar will be an important new therapy in this patient population, and we look forward to bringing this new treatment option to patients suffering from major depressive disorders.

In the area of migraine, we recently reported positive topline results from a Phase III study evaluating Qulipta for the prevention of chronic migraine. Qulipta performed very well in this study with both doses meeting the primary and all secondary endpoints, demonstrating Qulipta's ability to significantly reduce migraine days for patients suffering from chronic migraine.

This summer, we plan to submit our regulatory application to the FDA for Qulipta in chronic migraine and also plan to submit data from our Phase III studies in both chronic migraine and episodic migraine to support regulatory applications in markets outside the US. In our cystic fibrosis program, we recently completed an interim analysis of a Phase II proof-of-concept study evaluating our triple combination therapy. The results – the efficacy results from this interim analysis did not meet our prespecified criteria for advancing this triple therapy in development. This study was designed with a 28-day run-in treatment period, with a dual combination therapy containing our C1 corrector and potentiator, followed by a 28-day treatment period, with a triple combination, which included the addition of our C2 corrector, ABBV-119.

This allowed us to independently assess the therapeutic potential of our C2 corrector. The results showed that the addition of 119 did not provide a meaningful improvement in FEV1 or reduction in sweat chloride concentration over our dual combination therapy.

During the run-in treatment period, we were able to again assess the efficacy of our dual therapy, which performed well, providing efficacy consistent with results for the existing dual accommodation therapy. So based on the performance of our dual therapy, we plan to continue our CF program.

We have an additional C2 corrector, ABBV-576 in Phase 1 studies that we plan to advance into a new triple therapy with our existing C1 corrector and potentiator. 576 is structurally distinct from our previous C2 corrector 119 and has a better PK profile and provides higher drug exposure, which has the potential to deliver better efficacy. Our plan is to begin a Phase 2 study for this new triple combo by early next year.

And in Aesthetics, we recently began the Phase 3 program for our short-acting toxin in Glabellar Lines. This novel toxin is designed to provide rapid onset of action and a short duration of effect, which would lower the barrier for adoption for certain segment of consumers. We expect to see data from this program next year with regulatory applications also anticipated in 2023.

So in summary, we've continued to make significant progress with our pipeline to start the year, and we look forward to many more data readouts, regulatory submissions and approvals throughout the remainder of 2022.

With that, I'll turn the call over to Rob for additional comments on our first quarter performance and financial outlook. Rob?

[Rob Michael]

Thank you, Tom. AbbVie's first quarter results demonstrate the strength of our broad portfolio, including double-digit growth from Skyrizi, Rinvoq, Venclexta, Neuroscience and Aesthetics. We also continue to deliver strong P&L performance, with another quarter of robust operating margin expansion, while fully funding the business for long-term growth.

We reported adjusted earnings per share of $3.16, reflecting growth of 9.3% compared to prior year and $0.04 above our guidance midpoint. This includes an $0.08 unfavorable impact of acquired IPR&D expense that was not factored into our original guidance.

Total net revenues were more than $13.5 billion, up 5.4% on an operational basis, excluding a 1.3% unfavorable impact from foreign exchange. Net revenues came in above our guidance despite the entry of generic competition for Restasis.

The adjusted operating margin ratio was 51.4% of sales, an improvement of 150 basis points versus the prior year. This includes adjusted gross margin of 84.5% of sales, adjusted R&D investment of 10.9% of sales, acquired IPR&D expense of 1.1% of sales, and adjusted SG&A expense of 21.1% of sales. Net interest expense was $539 million, and the adjusted tax rate was 12.1%.

Turning to our financial outlook, we are updating our full year adjusted earnings per share guidance to include the $0.08 for acquired IPR&D expense that was incurred during the first quarter.

As a result, we now expect full year adjusted earnings per share between $13.92 and $14.12. This earnings per share guidance does not include an estimate for acquired IPR&D expense that may be incurred beyond the first quarter.

We now expect net revenues of approximately $59.4 billion. At current rates, we expect foreign exchange to have a 1.4% unfavorable impact on full year sales growth. This revenue guidance includes updated Restasis sales of approximately $400 million.

Moving to the P&L, we now expect adjusted gross margin of 84.5% of sales, adjusted SG&A expense of $12.5 billion, and an adjusted operating margin ratio of 51.8% of sales.

Turning to the second quarter, we anticipate net revenues of approximately $14.6 billion. At current rates, we expect foreign exchange to have a 1.5% unfavorable impact on sales growth. We expect adjusted earnings per share between $3.38 and $3.42. This guidance does not include acquired IPR&D expense that may be incurred in the quarter.

In closing, we are off to an excellent start to the year with strong performance across multiple areas. We are making significant progress with new product launches and the pipeline, underscoring our confidence in AbbVie's long-term growth outlook.

With that, I'll turn the call back over to Liz.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks, Rob. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to one or two. Operator, we'll take the first question, please.

[Operator]

Thank you. Our first question comes from Mohit Bansal from Wells Fargo. Your line is open

[Mohit Bansal, Wells Fargo]

Great. Thanks for taking my question. And maybe to begin with on Imbruvica. So, I mean, the script trends are down, and you mentioned that we are -- for new starts, you are losing some share to the competition. When you think -- can you please characterize how much share you are losing? And do you think it will stabilize over time? And when you look at Imbruvica and Venclexta combined, do you think the franchise can grow going forward from here? Thank you.

[Jeff Stewart]

Yes. Thank you for the question. So, as I mentioned in my comments, we are seeing greater share erosion. Imbruvica continues to be the leading share in the later lines, although we have lost our frontline share position to Calquence. And obviously, Venclexta is also moving there.

So we see a couple of things that are taking place. So, we have that share erosion that's putting some pressure on the brand. And then clearly, we see the continued suppression of the market. So, it's kind of like a double hit.

If we think of this over the short, mid and longer term, what I would say would be this. So, in the short-term, meaning this year, we projected the share decline and that includes some stabilization, but we still think the brand is under some pressure from other BTKs and Venclexta. And basically, we have flat guidance this year. And some of that includes a recovery of the market back to sort of more normal levels and we'll have to see how that progresses over the year. If I think more about the midterm, I think what's important context there is, new patient starts essentially make up roughly 13% to 15% of Imbruvica. So it's got a very, very large installed base, about 85%, maybe a little bit more in terms of what that's going to happen. We're not seeing any changes in persistency or items like that. So we think that we have a very good sense of stability for the brand over time in terms of what this may mean. And so that's basically how we think about it.

To answer your other question, if you look at the combined share, AbbVie has quite a strong position. We have roughly 33% of total share in the front line and we have between 42% and 46% of second-line plus. So clearly, Venclexta is able to offset as I commented in my remarks some of those pressures. So it's very important for AbbVie. It's going to be a very big brand over the long term. In the short term here in midterm, the growth is going to be more challenged moving forward.

[Mohit Bansal, Wells Fargo]

Thank you.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks, Mohit. Operator, next question please.

[Operator]

Thank you. Our next question comes from Terence Flynn from Morgan Stanley. Your line is open.

[Terence Flynn, Morgan Stanley]

Hi, thanks for taking the question. I was just wondering, obviously, you guys have been speaking with payers about the Humira positioning for 2023. Are you willing to give us any update in terms of how you're thinking about that guidance figure that you put out a couple of years ago? Any change in thinking there? And then are you able to disclose the CR rate for the recent epcoritamab Phase II trial? Just wondering how that, factors into the decision about whether to seek accelerated approval here? Thank you.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

So Terence, this is Rick. I'll take the first for you. And I'm probably going to answer a little broader because I think it is important. I understand the interest in trying to understand how to model 2023, it's obviously important to us to model 2023 as accurately as possible. And I think if you step back, obviously, contracting is one portion of a variable that will impact the speed at which biosimilars are able to adopt – be adopted in the market.

If you step back and look, there's probably four key variables that will impact, what that adoption rate looks like. One of them is obviously, what will Humira's access be post biosimilars entering the marketplace? And this is the period where you would normally be doing the contracting around that. I think we'll do well in being able to be co-positioned versus biosimilars in the vast majority of covered lives here in the United States. But that process isn't done, and we're not in a position to be able to ultimately, give you any further update until we're a little further along in that process.

The second variable that will impact what 2023 looks like is, how will the biosimilars price? We don't know that. Obviously, we have seen how they price in markets outside the US, but there's no market exactly like the US internationally. And so that's a variable. We're making some projections of what we believe that pricing will look like. But that's ultimately something we're going to have to see how it plays out.

I'd say the third variable is, how competitive will these biosimilars be? It's going to be by the summer of 2023, there's going to be a lot of biosimilars in the US market, but they're not all the same. And how competitive will they be against what is Humira today? And what are the bulk of patients use as it relates to Humira. And what I mean by that is interchangeability and a number of going to play into the competitiveness of those biosimilars.

And I'd say the fourth variable, and it's not something that people think about that much, and that is the ability of a biosimilar to be able to supply the US market. There's no market like the United States for Humira anywhere around the world. In the United States, it's significantly larger than any other market around the world.

There are certainly biosimilar players that are like an AbbVie, and I would expect them to have manufacturing capacity. There are generic players that could have sufficient manufacturing capacity, and then there are very small companies.

But I think anybody -- any payer that's going to want to convert in any significant way to a biosimilar, they're going to want confidence that they can have a reliability of supply of that biosimilar and we've spent years building the network that we have. We have full redundancy of every aspect of the manufacturing process on Humira. And we've never had a problem supplying the US market. So, I think we can be viewed as kind of the gold standard. So, those are the variables that are going to impact what this transition looks like.

The guidance we've given so far is this 45%, plus or minus 10%. I think at this point, that's still the best information that we can provide. Later this year, I think some of these variables will be clearer to it. And we may be in a position to be able to provide some more information to investors, and we would do that. Some will not. Pricing will not be clear at that point. We're not going to know how they're going to price until we actually get into -- they actually get into the marketplace. So, I think that's the way to think about these variables. Rob, anything you'd add?

[Rob Michael]

Yes. So, this is Rob. I would just add that we've been trying to give investors some directional guidance on how to think about 2023 beyond just the Humira, 45% plus or minus 10%. We've talked about Aesthetics growing high single-digits annually over the next decade. You can get a sense based on Jeff's response today and the way to think about Imbruvica, in terms of operating margin, I've talked about that pulling back to the 46% to 47% range with no cuts to investment because we're going to return to growth very quickly. So, we're going to continue to invest in this business.

And as I look at Street consensus, I see modeling of cuts in SG&A not necessarily reflecting the appropriate operating margin levels. So, it's something just to keep in mind. And then even -- we've talked about the tax rate growing one point per year on average. Obviously, you saw this year, it only grew 0.2 points. Other years, it may go higher. So, we've tried to give the Street some ideas of the way to think about 2023 model in advance of our formal guidance.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

Okay. Number two, Neil?

[Neil Gallagher, Vice President and Chief Medical Officer]

Hi, this is Neil Gallagher. I'll take the question regarding epcoritamab. So, we recently reported data from the expansion cohort of relapsed/refractory DLBCL patients. We reported an overall response rate of 63% with a median duration of response of 12 months. One thing that's really important to bear in mind is that this is a pretty refractory patient population with a median number of prior therapies of 3.5 in a range up to 11 in at the upper end.

And importantly, just under 40% of these patients have failed prior therapy with the CAR-T. Overall, the safety profile remains manageable with the vast majority of the cases of CRS at class effect with these agents being Grade 1 and 2.

To directly address your question, we are not yet ready to reveal additional detail about the data. They will be revealed at a forthcoming medical meeting. And in fact, I was just in contact with the team yesterday and I know that they're working very diligently to get those data on a podium in a meeting in the very near future.

[Liz Shea, Vice President, Head of Investor Relations]

Thank you. Terrence. Operator we’ll take the next please.

[Operator]

Thank you. Our next question is from Tim Anderson from Wolfe Research. Your line is open.

[Unidentified Analyst]

Hello, thanks for taking our question. This is Alice Nicholson [ph] on for Tim Anderson. A question on Rinvoq. Where could in-play market share in atopic eventually get in your view? And are you seeing any switching away from Dupixent at all? Thank you.

[Jeff Stewart]

Yes. Thank you for the question. I'll give you some context. I mentioned that we see roughly in the mid-teens now after about three months, which we're very pleased in and some more flavor on that. If you think about the HCPs and the doctors that prescribe in the US now, you've got about 9, 000. Those are the dermatologists and some allergists. There's about 3,000 of those physicians that are the big prescribers. They're very productive. Those 3,000 are the ones that are driving Skyrizi, for example, or other big brands in psoriasis.

So we see, after just about three months, we see almost 1,000 doctors that have prescribed Rinvoq. And so that's driving that 15%. Some of it depends in terms of where the in-play share ends up, how many of the competitors come in. We're not really sure that baricitinib will come into the market. We'll have to see. We haven't seen much Pfizer activity yet. To give you some sort of international perspective in the Canadian market, we're seeing where there's really just Dupi and Rinvoq at this point after a couple of quarters, we're seeing a 30% in-play share in Canada.

So we are, as I mentioned, very, very encouraged with the early adoption. In particular, my comment around, how fast once you see the first prescription take place with some of those productive doctors, how fast they go to the second or third. To give you some flavor of what we see in the US, and again, the data is early, we see, as expected, the majority of our use so far in that dynamic market are not switches necessarily.

We see about, let's say, 1/3, believe it or not, that are not even exposed to Dupi. And the doctors are saying, look, I've already given another oral systemic, for example, but the itch and the skin is so severe that they're going to go -- I'm going to go right and get the relief with Rinvoq.

And then maybe the other two-third, you see Dupi partial responders, particularly related to the itch, just isn't suppressed as much, and they still have some skin involvement. Or there is, as we've highlighted before, a warehouse of Dupi non-responders that has been built up over the last four years. So that's the behavior that we see. Again, I'm very encouraged on the early results, not just in the US but around the world. Rinvoq is going to be a real player in this underserved market.

[Liz Shea, Vice President, Head of Investor Relations]

Thank you, Alice. Operator, next question please.

[Operator]

Thank you. Our next question is from Steve Scala from Cowen. Your line is open.

[Steve Scala, Cowen]

Thank you. Two questions. First on epcoritamab, the data looks great. Could this molecule immediately start taking share from CAR-T, or do you think physicians will want to see durability data before selecting a bispecific ahead of a cell therapy? So that's the first question. The second question is, I'm trying to sift through the answer to the Humira question just a moment ago. On the one hand, it seems we need to consider that Humira could be more resilient in 2023 than expected. On the other hand, the Street needs to raise spending assumptions. So, would you object to either of those conclusions based on what was stated? Thank you.

[Neil Gallagher, Vice President and Chief Medical Officer]

Thanks Steve. This is Neil. I'll take the first question on epcoritamab. The fact that we saw such remarkable activity in a patient population that had failed CAR-T does not imply that the medicine should be positioned after failure of CAR-T. I think they are two very different classes of medicines, as you know. CAR-T has significant challenges with respect to the need for -- to be prior to administration.

Whereas the safety profile with epcoritamab is extremely manageable. And again, I don't want to repeat what I said earlier on around CRS. So, overall, we see a very strong benefit risk profile emerging for the medicine. And therefore, our intention is to move the medicine into earlier lines of therapy initially gain an approval with respect to -- gain approval in refractory DLBCL and after that move the medicine into earlier lines of therapy.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

Steve, this is Rick. I think Rob and I will handle the second question for you. Yes, look, I think it's a great question, and we've gotten that question a lot. What's the erosion going to be in 2023? And is it going to be lighter in 2023 and therefore, spill more into 2024. And I think that's a reasonable question to start to think through.

I'd say as I step back and look at it, I would tell you this. Look, at the end of the day, it could be lighter in 2023. That would force more of it out into 2024. If I look at the business, that's a good thing. We give us higher cash flows in 2023 than what we would be projecting now. Ultimately, I think there will be a settling out between 2023 and 2024. We'll still get to the levels that we have described or at least that we are modeling.

And I think the important thing is, look, Humira is going to play out over these two-year period of time. What's important to AbbVie, though, is what's that underlying growth that's driving the business and is going to sustain the growth on the other side of the LOE. That's the critical aspect of it. The Skyrizi, the Rinvoqs, our Neuroscience pipeline, Aesthetics, it's all of those major growth drivers that we have because that growth is going to be suppressed in 2023 and somewhat maybe in 2024.

But as soon as that pressure is off, that's when it reemerge and be able to deliver growth on the other side of it. And so what we're focused on is, obviously, we're going to try to manage the 2023-2024 dynamic to the extent that we're able to. But that's not the most critical part for the business. The most critical part is driving these growth brands and delivering on the pipeline.

[Rob Michael]

This is Rob. What I would add, Steve, just to clarify, I mean, we have a business that's going to deliver high single-digit growth during 2025. It doesn't make sense to be cutting investment in 2023. And that's what the Street consensus is modeling currently. So, we expect to invest in this business, invest in R&D, invest in SG&A to drive that long-term growth. And given how quickly we'll return to that growth, I wouldn't expect us to be cutting investment in 2023.

[Steve Scala, Cowen]

Thank you.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Steve. Operator, next question please.

[Operator]

Thank you. Our next question comes from Andrew Baum from Citi. Your line is open.

[Andrew Baum, Citi]

Thank you. Question for Jeff. Perhaps you could comment on the impact of IL-31 inhibitor in atopic dermatitis where we're expecting additional Phase 2 data, which obviously don't have the JAK labeling associated with how you think it's going to impact the market in terms of delaying the onset of JAK therapy? And then second for Neil, could you talk to how large the commercial potential for Venclexta in t(11;14) myeloma, which is due to reported Phase III this year anytime?

[Jeff Stewart]

Yes. Thank you, Andrew. So important question. So the way that we see the market for the other ILs, I do think that there will be a segment of conservative dermatologists that will attempt to sequence. And I think that largely that they'll be disappointed because it seems the newer agents are very, very difficult to distinguish from Dupixent. I think certainly, there could be market access dynamics that start to appear with subsequent ILs, I think that's something that we will watch and you would want to watch.

I think what's, again, maybe not appreciated as we watch the early quarters of performance in Europe and the first quarter of performance here in the US, is that there's significant amount of early adopters and dermatologists that will go right to a JAK inhibitor, as I mentioned. They're not always sequencing through Dupi. And it's because the severity of some of these patients and the level of the clinical involvement is very, very significant.

And so, we do see what you would call a significant amount of naive use based on the profile of the JAK inhibitor. Now these are early adopters. These are people that have already contemplated the risk benefit and I think that's important. And so, the way that we see the market developing is that, when physicians would start with Dupi, which will be in a significant proportion of patients, it's not clear at all that their next step will be another IL that has been approved or will be approved.

In fact, we think it's more likely that they will move towards the best JAK that can get to these high levels of skin clearance, the EZ 90 plus almost no perceived itch. And I think that's the endpoint that this market is going to move towards and Rinvoq is the drug that clearly can deliver on that promise. And so that's how we see the market developing, and that's why we remain encouraged on the early results around the world from what we're seeing with the agent.

[Neil Gallagher, Vice President and Chief Medical Officer]

This is Neil. With respect to the question on Venclexta, venetoclax CANOVA. So the CANOVA study is a study of venetoclax in multiple myeloma patients with a particular translocation, t(11;14). We're making extremely good progress with the study, and we fully anticipate having a Phase III data from the study during the course of 2022. We know from this particular patient population that were included in earlier studies with Venclexta that they are explicitly sensitive to treatment with the medicines in various combinations.

The prevalence of this population is around 20% of multiple myeloma and multiple myeloma, as you know, is the common of [indiscernible] malignancy. So, this is a very significant proportion of the multiple myeloma population that could gain benefit from Venclexta. And as mentioned, we're looking forward to being able to communicate the Phase III data during the course of 2022. Thanks for the question.

[Liz Shea, Vice President, Head of Investor Relations]

Thank you, Andrew. Operator, next question please.

[Operator]

Thank you. Our next question comes from Chris Schott from JPMorgan. Your line is open.

[Chris Schott, JPMorgan]

Great. Thanks very much for the question. First one for me is just can you elaborate a bit more on Rinvoq coverage, both in AD and UC. I guess just trying to get a sense of where we are today and what's the outlook for the next few quarters? And maybe as part of that, it seems like you're seeing some nice uptake in your BRIDGE programs. Can you just comment when you expect we should start to think about those translating over to third-party Rxs and that would be maybe more visible to the outside world in terms of how that uptick you're seeing?

And then my second question was just on Q1 itself. Were there any notable either payer adjustments or gross to net issues? I guess Humira, for example, it seems like the low single-digit growth was a departure from recent trends. I'm just trying understand a little bit better what happened in the quarter. Is there anything we should just be kind of keeping in mind as we consider the Q1 results? Thanks.

[Jeff Stewart]

Yes. Thank you, Chris. It's Jeff. So, with your first question is -- we're very confident that we are going to get to high levels of paid access for Rinvoq and Skyrizi's new indications. So, typically, what we'll see based on the approval timeline, we'll be ramping up into the -- by the middle of the year up in the high 90s in terms of our access -- for commercial access.

So, I think that everyone should be confident that, that's where you're going to start to see this bridge program start to fully convert as the months go by into the paid prescription. So, typically, that's the timing we're looking at. You're going to see very strong momentum on paid access by -- towards the end of next quarter is what we've guided towards. So, that's the answer to your first question.

I think if you think about -- and maybe just to frame the Humira question. The Humira fundamentals are -- and the market fundamentals are quite strong. You see the markets are performing nicely. Our market share growth trends, we haven't seen any trend shift. They've been largely stable. There's some sequential decline based on the size of the market and actually our own brand, Skyrizi and Rinvoq that are playing very strongly into these markets.

What I would say is that, in some cases, Q1 can be quite unique over the years. You've got the issue with the plans resetting their deductibles, you've got issues with doctors that have to put in another prior authorization for the year. And so you do see some co-pay and sort of deductible dynamic. But we think that's really a first quarter type of event, and it's largely been very consistent with what we expected. So, maybe I don't know, Rob, if you want to build on that a little bit.

[Rob Michael]

Yes, I would just add that if you look back to our guidance for the quarter and we gave guidance to the therapeutic area level, we pretty much came in line with that guidance. And so we expected this dynamic, and we're also we're not changing our full year outlook for US Humira, 8% growth. And that, again, will be driven by market driving volume growth. And so -- it's in line with our expectations. I understand Street consensus had a different point of view, but we weren't surprised by that.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Chris. Operator, next question please.

[Operator]

Thank you. Our next question comes from Chris Shibutani from Goldman Sachs. Your line is open.

[Chris Shibutani, Goldman Sachs]

Thank you. Good morning. If I could ask on Vraylar, the product, I think you comment expectations for an MDD approval and yet they'll frame it as potential for upside. Can you help us understand perhaps some of the potential there? Just thinking back to some of the scale of the peak sales opportunity that, that drug was characterized previously, MDD certainly seems as if it's a potential significant opportunity. Thanks.

[Jeff Stewart]

Yes, Thank you for the question. And it is a significant opportunity. So, as we highlighted and Tom highlighted, the NDA has been accepted, and we're confident in the approval. I think what we said in the past is that just with the base indication. So, before we get that approval, I mean, the FDA has to still approve it towards the end of the year. We believe that we can ramp towards a $4 billion opportunity. So, that would mean our share just in the base indications of a unique profile with the mania, the mix manian depression, the bipolar depression, we moved somewhere up sort of doubling our share penetration. So right now, we're at about 2.7% TRx share. So we we'd really get close to doubling that based on the momentum.

And then MDD would build on top of that. And so it's significant. I mean, the physicians that we've talked to when we show them the profile are very pleased. First, they know Vraylar, they like Vraylar, they like the strong efficacy, they highlight nonsedating, they highlight at least verbally a brightening effect of the agent, minimal weight gain, metabolic effects. And so as they think about that, how that would translate to adjunctive MDD, they like that profile.

The other piece that we hear is they like the starting dose. They like that starting dose of the 1.5 milligram dose, which is what we believe that ultimately will be approved. We'll have to see. So easy to start, easy to take, well tolerated. And so to your point, we believe that MDD will offer some upside and acceleration to the brand's momentum when we achieve it.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Chris. Operator, next question please.

[Operator]

Thank you. Our next question comes from Vamil Divan from Mizuho Securities. Your line is open.

[Vamil Divan, Mizuho Securities]

Hi, great. Thanks for taking my question. So just maybe get back to some of what we were just talking about around the pricing in 1Q. But I had a couple of questions regarding the migraine franchise. So, the Ubrelvy scripts from a legacy publicly out third-party data, it looks like the gross to net – some net pricing is back to where we were in 1Q '21. And just trying to understand if this is just a seasonality of things or 4Q to 1Q dynamic or maybe there might be something broader where net pricing for these products is going down.

And then tied to that, with Qulipta, as you mentioned, look, the prescription numbers are pretty good as it builds up here. I'm curious now that you have sort of two products in that market, does that impact how you're thinking about the opportunity, especially from a pricing side or sort of payer negotiation side? Is there any thoughts on sort of bundling the two other in any way to present to get even better active than what you have right now? So, any thoughts you could share there would be helpful as well? Thank you.

[Rob Michael]

So Vamil, this is Rob. I'll take your first question. So when you look at that there is seasonality in this market in the US, and so you do see a shift from Q4 to Q1. If you look at year-over-year, you'd see that in Q4, as you mentioned, Q1 year-over-year is relatively flat. I would think about it that way for the full year as well. So, you do tend to see a suppression in Q1 because of plans resetting that dynamic we see in the US market. But then over the course of the rest of the year, you do see higher pricing. So, on average, the way to think about it is price is relatively stable.

[Jeff Stewart]

And Vamil, it's Jeff now. So I think -- look, we are pleased with the Ubrelvy momentum. I mean, actually, since we launched Qulipta, Ubrelvy has accelerated. So, we have to -- because we can't see the competitor because you can see the whole thing. But when we factor Nurtec by 8 versus 16, and we try to understand the acute dynamic, we can see that we're clearly the market-leading acute CGRP and that's nice to see.

The physicians really like Ubrelvy, the markets are robust. I think what you're seeing is what Rob highlighted in terms of the overall performance. I didn't really fully appreciate your second question in terms of the access. I can give you a broad overview. Obviously, we're seeing great momentum with the brand. Much of the brand is still because the access is ramping is still bridged, just like we discussed there with the immunology agent.

So we think, again, by the middle of the year, we're going to see commercial access really start to ramp, and you'll see the conversion start to take place. What's nice is that we're confident in that. We think that our price points and net price or negotiations are going well. And because of its unique profile, as an agent, basically, the strength of the drug is really significant in terms of its performance against episodic migraine. We feel like we're in good shape. And we're going to build on top of that basically 25% in-play share, which is right now at the top of the league table. So, that's how we see it. We're confident in the access ramp.

[Vamil Divan, Mizuho Securities]

Maybe just to clarify the second question then just -- thank you for all that. Is there any advantage of another strategy you might have now because you have two approved migraine oral therapies, or is it pretty much similar it would be if you had one or the other?

[Jeff Stewart]

Yes. It's pretty similar based on the way that the pricing and the different dynamics work on the other CGRP. It's not -- it's just sort of a straight -- it's a straight play on the access there.

[Vamil Divan, Mizuho Securities]

Okay. Thank you so much.

[Liz Shea, Vice President, Head of Investor Relations]

Thank you, Vamil. Operator, next question please.

[Operator]

Thank you. Our next question comes from Geoff Meacham from Bank of America. Your line is open.

[Geoff Meacham, Bank of America]

Hey guys. Morning. Thanks for the question. I just had another one on the INI landscape. Rick, when you look at the market disruption that you'll see in 2023 and 2024, presumably, that's going to have an indirect effect on Skyrizi and Rinvoq when you think pricing and share.

What would you guys view as a win over this period from a new start or switch perspective or a growth perspective is the first question. And the second part of it is, what gives you guys confidence in the market really normalizing after a 2024 period? Thank you.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

I think as we look at our long-range plan, we don't see or anticipate a dramatic impact. We've provided that 2025 guidance and I think it's reflective of significant growth of Skyrizi and Rinvoq.

If you look at those assets and you look at their clinical performance, they really stand out. And that's what's driving the kind of volume and growth that we're seeing. And I think you will see obvious price disruption in the Humira market from biosimilars. But I don't anticipate that you're going to see that bleed over in a significant way to those other assets. Jeff, do you see any differently?

[Jeff Stewart]

Yes, I don't see, Geoff, much difference. I mean if you think of it in some ways, even on -- let's take Rinvoq, for example. I mean, you could say, wow, in prior viewpoints, maybe everyone will step behind a biosimilar at some point in the future.

Well, one, we didn't think that, that would happen wide scale as the market develops anyway. But even if it did, our label is already behind a TNF. And so when you look at the level of efficacy that Rinvoq's bringing in those later lines, I mean it's -- we're really quite insulated from that, I would put forth.

And second Skyrizi is just -- is a phenomenal asset. I mean the level of performance and what it's doing to transform certainly psoriasis today, PSA right now and what we think will happen with Crohn's and ultimately, IBD, when you look at the level of healing and sort of restating that standard of care, we think the assets themselves are quite well positioned for the middle part of the decade, and that sort of goes to the elements of the planning that Rick talked about.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Geoff. Operator, next question please.

[Operator]

Thank you. Our next question comes from Gary Nachman from BMO Capital Markets. Your line is open.

[Gary Nachman, BMO Capital Markets]

Hi thanks. First, just following on that last response. Can you talk more broadly about how you see the expansion of Rinvoq and Skyrizi into the IBD indication? So how is the initial launch for Rinvoq for ulcerative colitis going? I know it's early days, but what's the outlook there given physician receptivity around the product? Are physicians saying they're excited to have Rinvoq for Crohn's as well? And also, how do you see Skyrizi fitting in with Crohn's versus Rinvoq? And then secondly, on Aesthetics, it was strong in the first quarter, but did you see any impact in the early part of 1Q from Omicron? And what have the trends been more recently in March and April in the Aesthetics business?

[Jeff Stewart]

Yes. Thank you for the question. It's Jeff again. So we are very, very encouraged by the IBD momentum that we can build. And we're right on the cusp of it. And to give some sense is basically this market -- the market of Crohn's and you see that – it actually has fairly high biologic penetration.

When we do our research and our engagement with the physicians, what they typically have done for more than a decade since the availability of Remicade and then Humira, they really hang on as much as possible to their first-line use. They try to intensify, they do all sorts of things because it's quite scary for the physicians and the patients because no one set a different standard of care.

So when you start to look at the healing rates that we start to see with Rinvoq in UC, the healing of the bowel, the remission rate, the combination of what we can see, this market looks very, very good to have both of those assets come in with higher standards of care. So we're very, very encouraged and we think that the IBD market is probably underappreciated in terms of what that looks like. And the patients are so challenged with their disease because it's quite severe with the bowel preparations, the hospitalizations, all of these things, having two assets is a great thing to bring to the market. Certainly, in the US, it's likely we see that with UC today that you're going to have later line use based on the labeling.

Skyrizi is not going to have that limitation. So, you can imagine that you have an ability to co-position to sequence appropriately to think about how you bring that whole portfolio around the world and that's how we see it. We're quite encouraged that we would have both Rinvoq for Crohn's and Rinvoq for Skyrizi in the market. And it's kind of very similar to my comments I made on what's happening with PSA today in rheumatology, where both of those assets Rinvoq for PSA and Skyrizi PSA are in the market together working as a portfolio.

To get to your first point, it's been only a month or so with our UC launch, but the physicians, gastros are very encouraged with the profile. They've not seen the level of remission or the level of healing before in any asset. So, there's quite a wow reaction to the efficacy profile. They realize that they have to think about, I've got to think through my patients that are not doing well on TNF or have cycled through a TNF and are struggling. And I mentioned that's a pretty large addressable population. It's at least 50% of the market today. So early qualitative results are quite strong. And the BRIDGE results are also quite strong. So, we're pleased with the gastro launches thus far.

[Rick Gonzalez, Chairman of the Board & Chief Executive Officer]

Carrie?

[Carrie Strom]

Gary, this is Carrie Strom, President of Global Allergan Aesthetics, and I'll take your question about the aesthetics market. And in Q1, we did see US toxin and filler markets, both growing in the mid-20s percent. And we expect that sort of growth to continue for the rest of 2022.

And the way to think about it is similar amount of absolute volume growth as 2021, but of course, off of a larger base.

And in terms of what's driving that market growth, we're seeing very strong demand trends supported by our increased commercial investments, for example, increased consumer activation for acquisition and retention, field force expansions in key markets. And we see these trends also supported just by fundamentals and aesthetics that will continue in the long-term.

People think about aesthetics more like health and wellness. It's been much more destigmatized, and we see factors like social media and word of mouth continuing to drive aesthetics in the future.

Your question around the pandemic, I would say that we are seeing an impact right now in China, and we anticipate that this recent surge of COVID cases in China which has resulted in lockdowns across several major cities, has reduced patient traffic into aesthetic offices in China. And China is a top market for aesthetics. So, we expect this to impact our near-term international performance for both toxins and fillers.

I should also mention that Russia is a key market for fillers globally. And as the tragic events in the Ukraine have unfolded, we have suspended operations for our Aesthetics business in Russia. So, although absolute aesthetic sales in Russia are modest, like I said, Russia is among one of the largest filler markets in the world. So, we expect to see an impact on our filler performance in coming quarters.

But despite these dynamics, we do not need to change our total guidance for Aesthetics. So, we see our continued robust toxin performance in the US to offset this anticipated transitory impact in both China and Russia.

[Gary Nachman, BMO Capital Markets]

Great. Thank you.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Gary. Operator, next question please.

[Operator]

Thank you. Our next question comes from Robyn Karnauskas from Truist Securities. Your line is open.

[Robyn Karnauskas, Truist Securities]

Great. Thanks for taking my questions. So, for epcoritamab, I just have a question on approval. Given the recent FDA discussion around the PI3 kinase class and sort of hinting that they want controlled data for accelerated approval, how do you view that in light of that panel, the likelihood of accelerated approval?

And then second. Just a little bit more questions around the Bridge program. I think you said that you're going to expect more payment reimbursement coming online in the middle of the year. Just talk to me how long people stay in the Bridge program and how you expect that Bridge program to continue? And what -- how many people might continue to use it after payers and online? Thanks.

[Neil Gallagher, Vice President and Chief Medical Officer]

Hey Robyn, it's Neil, I'll start off with the question around epcoritamab, but maybe just a comment -- a general comment on accelerated approval overall. I think as we're all aware, it prompted your question that the agencies in the course of -- in the process of updating its guidance with respect to accelerated approval. We haven't seen the totality of that guidance, but we anticipate hearing more from them during the course of 2022.

As I alluded to, and I'm not going to repeat what I said earlier on about the epco data, but we are extremely pleased with how the molecule is performing, and it is our intent to engage with the agency based on the data that we've toplined recently. It is our intent to engage with the agency in a conversation to explore a path to accelerated approval.

And likewise, with some of our other programs, we recently got a BTD designation for Teliso-V, for example, earlier this year with a 54% response rate in c-Met high non-small-cell lung cancer. Again, it is our intent when we have data that are these strong to continue to engage with the agency on those programs to explore potential costs to accelerated approval. So thanks for the question.

[Jeff Stewart]

Okay. It's Jeff. Just to comment on your BRIDGE question. Thank you for that. So the BRIDGE transition will be very efficient. So, what I mean by that is because of the connections that we have with the payers and our specialty pharmacy network, we're able to – once access is achieved rapidly and appropriately transition patients from the BRIDGE to basically their paid pharmacy in their prescription.

So, there's not going to be lingering bridge effects, particularly in the immunology space. So, once it starts to move and that access ramps, the BRIDGE transition is quite fast. And that can be within weeks or a month. And we know that that's the case because we have the model from our earlier launches from Skyrizi and Rinvoq. So ultimately, once you start to achieve those high levels of access, BRIDGE programs drop very, very fast, and the vast majority, the very vast majority is paid prescriptions. So it's very efficient, and I hope that helps.

[Liz Shea, Vice President, Head of Investor Relations]

Thanks Robyn. Operator, we have time for one final question.

[Operator]

Thank you. Our final question comes from Josh Schimmer from Evercore ISI. Your line is open.

[Josh Schimmer, Evercore ISI]

Thanks for putting me in and congrats to both Mike and Tom. For Skyrizi, did your long-term outlook improve again, or am I misunderstanding the contingent consideration line item? Thanks so much.

[Rob Michael]

So Josh, it's Rob. If you look at the continued consideration, actually, it's a fair value liability, it went down this quarter because of discount rate. So we always have to pay attention to discount rate movement. So we saw the average discount rate increase by about 130 basis points. You're seeing, obviously, as rising interest rates are taking hold of the market. That's something we have to take into account because we had to mark this to market every quarter.

If you look at our release, we had a similar – we had a decrease last year as well. Again, we had discount rates increase in Q1 of last year, albeit to a lesser extent. So that's what you're seeing is just really the discount rate movement. No other real fundamental changes to the valuation of that liability.

[Josh Schimmer, Evercore ISI]

Got it. Thanks for clarifying.

[Liz Shea, Vice President, Head of Investor Relations]

Well, thank you, Josh. That concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors.abbvie.com. Thanks again for joining us.

[Operator]

Thank you. That concludes today's conference call. Thank you for your participation. You may disconnect at this time.