Abbvie Inc

NYSE:ABBV

Earnings Call Transcript 2017-Q4

[Operator]

Good morning and thank you for standing by. Welcome to the AbbVie Fourth Quarter 2017 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion of this call. [Operator Instructions]

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

[Elizabeth Shea, Vice President, 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; Michael Severino, Executive Vice President of Research & Development and Chief Scientific Officer; and Bill Chase, Executive Vice President of Finance and Chief Financial Officer.

Before we get started, I would like to remind you that some statements we make today are or may be considered forward-looking statements for the 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 the factors that may affect AbbVie's operations is included in our 2016 Annual Report on Form 10-K and in our other SEC filings. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand AbbVie's ongoing 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 now with that, I'll now turn the call over to Rick.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Thank you, Liz. Good morning, everyone, and thank you for joining us. This morning, I'll briefly discuss our fourth quarter performance and 2017 highlights. Mike will then provide an update on recent advancements across our R&D pipeline, and Bill will discuss the quarter and our 2018 guidance in more detail. As always, following our remarks, we will take your questions.

We delivered another impressive quarter and year with results ahead of our expectations. Our adjusted earnings per share in the fourth quarter were $1.48 representing growth of more than 23% versus the fourth quarter of 2016. Our quarterly results also included strong topline performance with global operational sales growth of more than 12%. We continue to see strong momentum from our business with three major drivers contributing to our growth; HUMIRA, IMBRUVICA, and MAVYRET.

Since our inception as a public company five years ago, AbbVie has demonstrated an exceptional track record of consistently delivering top-tier financial performance. In 2017 was another clear example of that performance. We continue to drive strong commercial and operational execution resulting in full-year 2017 global operational sales growth of 10% and adjusted earnings per share growth of 16%.

We have also made tremendous progress advancing our pipeline with impressive data from several assets that are poised to fuel our growth in the years to come. HUMIRA continues to deliver outstanding performance with global operational growth of more than 14% for the full-year 2017. This performance was driven by continued robust market demand despite the introduction of new mechanisms of action and competition from indirect biosimilars.

We continued to see strong momentum with HUMIRA in the fourth quarter. U.S. growth was more than 15% versus the prior year. IMBRUVICA also delivered strong momentum and growth with full-year 2017 sales approaching $2.6 billion, an increase of 41% over the prior year. In the quarter, IMBRUVICA delivered strong growth of approximately 39% versus the prior year. We are continuing to see strong uptake in CLL where IMBRUVICA is now the clear market share leader across all lines of therapy.

Global HCV sales were nearly $1.3 billion in 2017 including global sales of MAVYRET which approached $500 million. In the fourth quarter, total HCV sales grew more than 62% versus the prior year. While are still at the early stages of our commercialization. We have been very pleased with average strong uptake in both the U.S. and international markets.

We have achieved market leadership in most of the markets where we have launched. In the U.S., MAVYRET exited 2017 with a market share of 32%, conforming our expectations that the product will be our highly competitively positioned product within the HCV market.

Based on our current managed care contracting status, we have parity access across 65% of the covered lives in the U.S., with much of that access coming in the last 60 days. We continue to work with payers towards parity contracts and are pleased with the progress that we are making on that front.

We also saw a strong performance from several other products in our base business. Product such as LUPRON, Creon, and Duodopa continue to perform well in their categories, and we expect and continue to be very stable profitable products for many years to come.

Turning now to 2018. Based on the strong fundamentals of our business, we are projecting both strong top and bottom line growth again this year. As you know, on our third quarter call, we provided 2018 EPS guidance reflecting 17% growth at the midpoint. There are been several positive developments since we outlined our initial outlook.

We have seen very strong uptake from MAVYRET both in the U.S. and internationally, and continued robust underlying performance from other products and our portfolio, driving our expectations for 2018 higher than we previously projected. This outperformance is reflected in our updated 2018 guidance.

Additionally, we saw a passage of U.S. tax reform which will lower our tax rate going forward. Factoring in both items, we now expect full-year 2018 adjusted earnings per share of $7.33 to $7.43. The midpoint of this revised guidance reflects year-over-year growth of 32%, with the majority of the projected growth being driven by strong underlying operating performance. This guidance positions AbbVie to be in the top-tier for earnings per share growth once again in 2018. Bill will provide more details regarding our 2018 guidance later on in this call.

For AbbVie, the recent passage of U.S. tax reform enables more efficient access to our foreign cash and the ability to deploy it in the United States. Over the next five years, we plan to invest roughly $2.5 billion in capital within the U.S. and are currently evaluating additional expansion of our U.S. facilities.

In 2018, we also plan to accelerate our pension funding by $750 million as well as enhancing our non-executive employee compensation. We are also planning a one-time shareable contribution of approximately $350 million to select not-for-profit organizations, supporting initiatives such as the Puerto Rico rebuilding efforts, children's healthcare access programs, and charities that support our local communities needs. Based on our strong cash flow generation, we also anticipate an increase in our return of capital to our shareholders and we will be announcing those specific details in the near future.

Moving on to R&D, where we have built a compelling pipeline of innovative late-stage products with differentiated clinical profiles into sustained and compelling patient benefits. In 2017, we saw a significant evolution of our pipeline with a number of important clinical development and regulatory milestones, which I'll briefly highlight.

We saw strong results from several pivotal trials, including data from three Phase III studies for upadacitinib in RA, four Phase III studies for risankizumab in psoriasis, and the MURANO study for VENCLEXTA in relapsed/refractory CLL among others.

We also began registrational trials for several pipeline assets including Phase III studies in Crohn's disease for both upadacitinib and risankizumab, upadacitinib and psoriatic arthritis, VENCLEXTA in front-line AML, and Rova-T in front and second-line small-cell lung cancer.

We submitted regulatory applications for VENCLEXTA in relapsed/refractory CLL, and for elagolix in endometriosis, which is currently under priority review. And we received several regulatory approvals including MAVYRET in HCV, and two approvals for IMBRUVICA, marginal zone lymphoma and chronic graft-versus-host disease. And while we made significant advancements across our pipeline in 2017, 2018 will mark another milestone-filled year for AbbVie, which Mike will discuss in detail during his remarks in just a few moments.

As we reflect on AbbVie’s performance as a Company and we evaluate our future prospects, we see a very strong company, well positioned for the future. Looking at our P&L in 2017 and across the first five years, we see a company with impressive topline growth, strong and improving operating margins, robust investment in R&D and SG&A to drive long-term performance.

Strategically, we see an industry leading pipeline of late-stage de-risked assets and a productive R&D engine that has generated a pipeline of early-stage assets with transformational potential. In short, we see a high performing innovative company that is well positioned for the future.

This is an exciting time for AbbVie. The productivity of our pipeline is becoming increasingly evident and we have a significant number of upcoming product launches that are poised to drive significant growth. Our growth story has only just begun. In 2017, we launched MAVYRET, which has become a major growth driver for us. This year, we will launch a major label expansion for VENCLEXTA in relapsed/refractory CLL as well as elagolix in endometriosis.

In late 2018 to 2019, Rova-T will begin to contribute. And in 2019, we will launch our next-generation immunology assets, risankizumab and upadacitinib. Each of these assets will add significantly to AbbVie's already strong growth.

So in summary, we are extremely pleased with our strong performance in 2017 and we are certainly proud of the strong foundation that we have built. We have a high level of confidence in the momentum of our business, which is reflected in our 2018 guidance. We are committed to delivering on our long-term strategic vision for the Company and we are poised to deliver sustainable industry-leading performance and outstanding shareholder value.

With that, I'll turn the call over to Mike for additional comments on our R&D programs. Mike.

[Michael Severino]

Thank you, Rick. Today, I'll highlight recent pipeline updates and discuss some of the milestones we anticipate for the year ahead. 2017 was a very productive year with a dozen pivotal trial readouts, several regulatory submissions and approvals, and several important phase transitions across our key programs. And we expect 2018 to be another catalyst rich year.

In immunology, we continue to make great progress with our late-stage assets, risankizumab and upadacitinib, as well as with our early immunology pipeline. We are nearing completion of the registrational program for risankizumab and for upadacitinib and their lead indications psoriasis and RA respectively.

Last month, we reported the topline results from the fourth and final Phase III study in the pivotal program evaluating risankizumab in psoriasis. In this study, the enhanced trial 73% of risankizumab patients achieved PASI 90 and nearly half achieved PASI 100 compared to just 2% and 1% of patients on placebo at the PASI 90 and PASI 100 levels respectively. And consistent with the previous Phase III results, we saw very durable rates of skin clearance.

We are pleased with the strong Phase III results we have reported across all four pivotal trials and we look forward to submitting our regulatory application in the first half of this year. Based on the data we've generated to date, we believe risankizumab has the potential to significantly improve upon current treatment options for both bio-naive and TNF and adequate responder patients with moderate to severe psoriasis by offering unmatched levels of efficacy and durable effect with the convenience of quarterly dosing.

Beyond psoriasis, risankizumab is also in mid to late stage development for several other indications, including Crohn's disease, ulcerative colitis, and psoriatic arthritis. We recently initiated, Phase III studies in Crohn's disease and expect to begin registrational studies later this year in ulcerative colitis. We remain extremely excited about this assets potential and believe risankizumab could be an important new treatment option across a broad range of indications.

Moving now to our other late stage immunology asset, upadacitinib and oral selective JAK1 inhibitor currently in clinical development for six indications across the rheum, derm, and GI segments. Last month, we reported topline results from the third Phase III study from a registrational program and RA.

In the SELECT-MONOTHERAPY study, which evaluated upadacitinib as a monotherapy treatment for patients who did not adequately respond to methotrexate. Both doses of upadacitinib met all primary and key secondary endpoints versus continued methotrexate therapy.

Consistent with the results from the SELECT-NEXT and SELECT-BEYOND Phase III studies, upadacitinib drove very strong levels of response on all clinical end points. And importantly, on the more stringent end points, such as ACR50, ACR70, low disease activity, and DAS remission. Additionally, the safety profile in the SELECT-MONOTHERAPY study was consistent with previously reported Phase III SELECT trials and the Phase II studies with no new safety signals detected.

Given its strong profile, upadacitinib has the potential to be a best-in-class therapy in RA and could offer meaningful advantages of our products on the market today or in development. We expect to see data from two additional pivotal trials in the RA program in the first half of this year with our regulatory submission following in the second half of the year.

In addition to RA, Phase III studies with upadacitinib are ongoing in psoriatic arthritis and Crohn's disease and upadacitinib is also being evaluated as a potential treatment for ankylosing spondylitis. We plan to begin registration enabling studies this year in atopic dermatitis, ulcerative colitis, and giant cell arteritis. Earlier this month, upadacitinib received a Breakthrough Therapy Designation in atopic dermatitis, based on the strong Phase II data we have previously reported. We plan to present detailed results from the Phase II study at the AAD Meeting next month.

There is also continued movement with our early-stage immunology programs, where we are developing assets with the potential to significantly raise the efficacy bar in areas such as disease remission and durability of response, compared to products currently on the market and in late-stage development.

We expect to begin proof-of-concept studies this year for several key early-stage assets, including our CD40 antagonist ABBV-323, which will begin Phase II studies in ulcerative colitis, and our JAK-BTK inhibitor combination, ABBV-599, which will start Phase II in RA patients.

We also have clinical programs recently initiated or expected to begin very soon for other key early-stage assets, including our RORgamma t inverse agonist, and our anti-TNF steroid ADC.

Moving now to oncology, where we continue to advance our programs for IMBRUVICA and VENCLEXTA. These two therapies alone and in combination with other medicines are demonstrating extremely strong activity in a broad range of cancers such as CLL, AML, multiple myeloma, and non-Hodgkin's lymphoma, which should enable us to expand our already strong position in hematologic malignancies.

Through novel combinations of IMBRUVICA, VENCLEXTA and other therapies, our goal is to drive better long-term goal and outcomes for patients. With IMBRUVICA, we continue to build the body of evidence in CLL, as well as in other blood cancers. IMBRUVICA has already changed the treatment paradigm in second-line or greater CLL and following the strong RESONATE-2 data is gaining momentum in the front-line setting.

At the recent ASH Meeting, we reported new three-year follow-up from the RESONATE-2 study demonstrating that in treatment-naïve CLL patients, long-term treatment with IMBRUVICA is leading to sustained improvements in patient reported outcomes and quality of life, as well as significant decreases in disease related symptoms.

We also had several studies ongoing to evaluate IMBRUVICA alone or in combination in different patient segments, including young and fit patients and the watch-and-wait population. These studies will add to the breadth of data supporting IMBRUVICA, providing physicians more evidence of the compelling clinical benefits in the front-line setting. We expect to begin seeing data from these Phase III trials towards the end of 2019.

More near-term, we expect to see data from several IMBRUVICA combination studies this year, including Phase III data in front-line CLL in combination with GAZYVA and front-line diffuse large B-cell lymphoma in combination with our CHOP.

Moving now to VENCLEXTA, at the recent ASH Meeting, we reported detailed results from the Phase III MURANO study in relapsed/refractory CLL, which showed a profound improvement in progression free survival and strong rates of MRD negativity with combination treatment of VENCLEXTA and RITUXAN compared to BR.

Based on these results, we believe that VENCLEXTA in combination with RITUXAN has the potential to be a new standard chemotherapy free treatment option for patients with relapsed/refractory CLL.

We recently submitted our regulatory applications for VENCLEXTA plus RITUXAN in relapsed/refractory CLL based on the MURANO data. We expect an approval for this indication later this year and look forward to bringing this new treatment to market in the broader relapsed/refractory CLL population.

Beyond our core strategy in CLL, we are making great progress with our development programs to expand VENCLEXTA across multiple hematological malignancies. We have Phase III studies ongoing in multiple myeloma as well as AML, where we have received two Breakthrough Therapy Designations.

These studies are progressing well with key data becoming available in the 2019 time frame. Given the significant and durable activity we've already seen in AML and following recent regulatory feedback, we now plan to submit our U.S. regulatory application for VENCLEXTA in AML later this year.

This represents a significant acceleration of our program as approval in AML later this year or in early 2019 would be approximately two years ahead of our initial expectations. We look forward to bringing this new treatment option to the substantial group of AML patients who can't receive high-dose induction chemotherapy.

I will now turn to our solid tumor programs where we continue to make good progress with our late-stage program for Rova-T as well as with our early-stage oncology pipeline. Starting with Rova-T, our registrational trial in third-line or greater small-cell lung cancer, the TRINITY study continues to progress and we expect data in the second quarter with our regulatory submission following soon thereafter.

Our ongoing Phase III studies in small-cell lung cancer also continue to advance, with the TAHOE study in the second-line setting and the MERU trial in front-line patients both now well underway. We are also evaluating Rova-T with Opdivo and with Opdivo and Yervoy in mid-stage combination study with potential to start seeing data from this trial later in the year.

Beyond small-cell lung cancer, the neuroendocrine tumor BASKET study continues to progress. And we will be sharing more results from this study as the data mature possibly later this year. In our early-stage oncology pipeline, we continue to build capabilities and explore new technologies that will extend our reach in the solid tumor market.

We've prioritized areas of biology that we believe play an integral role in the tumor immune environment or in tumor growth, areas where we believe we can target with new therapies to have broader applicability than existing immuno-oncology agents or chemotherapy.

These include the tumor microenvironment, innate immune cell activation, tumor cell intrinsic resistance, cancer stem cells, epigenetic regulation, and therapies based on engineered T-cell receptors. We have more than 20 solid tumor assets currently in the clinic and expect to move several more into Phase I studies over the course of the year. We look forward to sharing the data from these programs as they mature.

And finally, in the area of women's health, our regulatory application for elagolix in endometriosis is currently under priority review and we anticipate an approval decision in the second quarter. In addition to the endometriosis program, we have Phase III studies ongoing in uterine fibroids and we will see data from this program later this quarter.

So in summary, we've continued to make significant progress advancing and accelerating our pipeline and we look forward to many more important data readouts based transitions, regulatory submissions, and approvals in 2018.

With that, I'll turn the call over to Bill for additional comments on our fourth quarter and full-year performance. Bill?

[William Chase]

Thanks, Mike. Today, I'll review the highlights of our performance for the fourth quarter and full-year 2017 and provide an overview of our 2018 outlook. I will also walk through the impact of U.S. tax reform on our results as well as our expectations for the tax rate going forward.

As Rick mentioned, we had another year of outstanding performance in 2017, generating top and bottom line growth that ranks AbbVie among the very top of our industry peers. We reported adjusted earnings per share of $5.60, up more than 16% compared to 2016 and ahead of our expectations for the year.

For the full-year, net revenues were $28.2 billion, up 10.1% on an operational basis, excluding a modest favorable impact from foreign exchange. For the fourth quarter, total adjusted net revenues were $7.7 billion, an increase of 12.6% on an operational basis, excluding a 1.5% favorable impact from foreign exchange.

Fourth quarter global sales of HUMIRA were $4.9 billion, up 12.3% operationally driven by strong demand. HUMIRA sales in the U.S. were up 15.1% year-over-year reflecting volume of approximately 10% plus price. International HUMIRA sales were $1.6 billion in the quarter, an increase of 6.5% operationally or 11.7% on a reported basis.

Sales growth in the quarter benefited from the timing of tenders in select markets which contributed approximately 2.5% to the growth rate. Global HUMIRA sales for the full-year 2017 were $18.4 billion reflecting operational sales growth of 14.4%. HUMIRA remains the undisputed market leader across the broadest range of therapeutic indications, reflecting its strong position with physicians, unique product profile, and strong commercial execution.

Global IMBRUVICA net revenues were $708 million in the quarter, up 39% compared with the same period a year ago. Full-year IMBRUVICA sales were $2.6 billion, driven by continued uptake in the front-line CLL market and steady gains across other indications.

Global HCV sales for the fourth quarter were $510 million, increasing more than 62% operationally over the prior year. As Rick mentioned, we've been very pleased with the launch of MAVYRET in the U.S. and international markets and I'll outline our expectations for 2018 in just a few moments.

Global fourth quarter sales of Duodopa, our therapy for advanced Parkinson's disease increased 20.3% on an operational basis. Finally, we saw strong sales growth in the quarter on an operational basis for Creon, up almost 11%, and Synagis, up more that 4%.

Now turning to the P&L profile for the fourth quarter, adjusted gross margin was 79% of sales, down versus the prior year primarily due to the dilutive impacts of partnership accounting and exchange on hedged currencies.

In the quarter, adjusted R&D was 17.1% of sales, reflecting our ongoing support of pipeline programs. Adjusted SG&A was 21.2% of sales lower than the prior year as a result of sales leverage and our continuing focus on operational efficiencies.

The adjusted operating margin profile improved by more than 90 basis points compared with the prior year, inclusive of almost 100 basis points of incremental spending related to the risankizumab and Stemcentrx transactions.

Adjusted net interest expense was $252 million and the adjusted tax rate was 18.9% in the fourth quarter. Fourth quarter adjusted earnings per share excluding specified items were $1.48, up 23.3% year-over-year.

In the quarter, we recorded a charge of $0.77 per share in specified items related to the 2017 enactment of the Tax Cuts and Jobs Act. Included in this charge is an estimated $4.5 billion tax payable, related to previously unrepatriated earnings partially offset by related valuation adjustments to tax related balance sheet items. This one-time net charge has been excluded from our adjusted EPS results.

As I mentioned earlier, today we have raised our guidance range to $7.33 to $7.43, an increase at the midpoint of $0.91 over the 2018 adjusted EPS guidance we provided during our third quarter call.

At the midpoint, this new guidance range is $1.78 higher than our 2017 results, comprised of $0.95 of operating performance growth and $0.83 of contribution from tax rate reductions as a result of the recently passed Tax Cuts and Jobs Act. Relative to our prior guidance for 2018, stronger operating performance accounted for an increase of $0.08.

In addition to the previously mentioned one-time tax on historical unrepatriated earnings, the legislation will allow for a more efficient future repatriation of foreign earnings and as a result a lower adjusted tax rate.

We now modeled a non-GAAP tax rate of approximately 9% in 2018, increasing gradually to 13% within the next five years as a result of increased domestic income and investment. We anticipate a lower GAAP tax rate in 2018 due to the one-time benefit of the timing of the phase-in of provisions of the new law on certain foreign subsidiaries. This benefit will be excluded from our non-GAAP EPS in 2018.

On the topline in 2018, we expect revenue approaching $32 billion, which reflects a favorable impact from foreign currency of roughly 1.5%. Included in this guidance are the following assumptions for our key products. HUMIRA will maintain its strong position as the leading front-line therapy across therapeutic segments and continue to be an important growth driver.

In the U.S. in 2018, we expect sales growth of approximately 13% to 14%. Internationally, we expect sales to peak at approximately $6.2 billion this year. This guidance assumes current exchange rates and includes the impact of direct biosimilar entrants in the fourth quarter of 2018 as well as proactive actions taken in earlier quarters.

For IMBRUVICA, we expect global revenues to AbbVie of greater than $3.3 billion with U.S. sales just above $2.7 billion. Based on MAVYRET successful launch, we expect the global HCV sales in 2018 will exceed $2.5 billion with a roughly equal split between U.S. and OUS markets.

For VENCLEXTA, we expect sales above $300 million in 2018. As Mike mentioned, based on the MURANO data, we recently submitted our regulatory applications for VENCLEXTA plus RITUXAN in relapsed/refractory CLL and we look forward to expanding VENCLEXTA into this broader setting in the second half of the year. For Creon, we expect sales growth of 10% in 2018.

We are forecasting 2018 AndroGel sales of approximately $475 million. For Duodopa, we expect sales in 2018 of approximately [$458 million]. We are forecasting ZINBRYTA sales of less than $100 million reflecting recent labeling changes and the introduction of competitive alternatives. Based on this level of projected performance, in the fourth quarter we recorded a non-cash charge of $354 million reflecting an impairment of ZINBRYTA related assets. And for Synagis, Lupron and Synthroid, we expect sales to be roughly flat year-over-year.

Finally, we are expecting a regulatory decision for elagolix in the second quarter. We will provide specific guidance for this asset following approval when the duration of therapy and pricing have been established.

Turning now to the P&L for 2018, we are forecasting an adjusted gross margin ratio of approximately 80%. This is inclusive of partnership accounting impacts and current exchange dynamics on hedged currencies. We are forecasting R&D expense of roughly 16% of sales, which reflects an increase in funding to support our late-stage pipeline and continued progress across numerous mid-stage programs.

We expect SG&A to be just over 20% of sales. In 2018, we will be investing in order to maximize the sales potential of assets launching in 2018 and 2019. This includes incremental spend related to the launch activities for elagolix and endometriosis, and VENCLEXTA in the broader relapsed/refractory CLL market as well as AML. In addition, we will be making investments and anticipation of immunology and oncology launches in 2019. Despite these investments, we expect SG&A as a percentage of sales to decline due to our rapidly growing topline.

For 2018, we are forecasting an operating margin of approximately 44%, roughly 150 basis points above 2017 inclusive of the incremental investments for our upcoming product launches. We expect 2018 net interest of approximately $1 billion.

Now our first quarter outlook. We expect adjusted earnings per share between $1.77 and $1.79 excluding approximately $0.31 as specified items. We anticipate first quarter operational revenue growth approaching the mid-teens. Holding exchange rates constant at current levels, we would expect foreign exchange to have a favorable impact on reported sales growth of 3% in the first quarter.

For U.S. HUMIRA, we expect first quarter sales growth over the prior year in the low-teens. Internationally, we expect operational sales growth in the mid single-digits. Holding exchange rates constant at current levels, we would expect a favorable impact from foreign currency resulting in reported global sales growth in the mid-teens. For IMBRUVICA, we expect U.S. sales in the first quarter to grow in the mid single-digits sequentially over the fourth quarter.

Our guidance for the quarter reflects an adjusted effective tax rate approaching 8% lower than our full-year expectation reflecting the fact that the tax benefit on equity compensation is most pronounced in the first quarter of each year.

In closing, we delivered outstanding performance in the fourth quarter and for the full-year and our guidance for 2018 puts us among the top of our industry peers once again with the midpoint of our EPS guidance range representing growth of 32%. We continue to build on our strong momentum and we are well positioned to advance our strategic priorities.

And with that, I will turn the call back over to Liz.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks Bill. We will now open the call for question. Operator, well take the first question please.

[Operator]

Thank you. [Operator Instructions] Our first question today is from Jami Rubin from Goldman Sachs.

[Jami Rubin, Goldman Sachs & Co. LLC]

Thank you. And I do normally say, congratulations Rick and team on spectacular performance. I want to talk about – ask about you're sitting on a pile of cash that's just going to continue to grow and even more or so with your lower tax rate, you talked about wanting to return that cash to shareholders, and one of those forms is through an increased dividend.

Going back it seems that your current dividend payout is about 42% has come down as your earnings has grown, it has been as high as 50%. Would you be comfortable returning to a 50% dividend payout range over time? I know you said that the announcement will be forthcoming, but if you could give us some color as to how you're thinking about that?

And then secondly at the same time, given that your stock has completely related that gives you additional strategic options that maybe you didn't have before when you were trading at a significant discount. Can you talk about your desire to use cash to acquire assets that might give you best-in-class growth post 2022? How are you thinking about M&A? I think that you have said thus far that you don't need it by anything big now, you've got a lot of growth obviously, but beyond 2022, 2023 when biosimilar has entered the U.S. market that that sort of changes? So anyway those are my questions. Thanks.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Jami, this is Rick. So first thank you for the complement, we're certainly pleased with how the business has been performing as well. But I think if you look at our business, we're on fortunate position on two perspectives, and I’ll talk specifically about cash and how we think about capital deployment as well. But we have a business to generate a tremendous amount of cash flow as you have highlighted and we have a business that is performing at a very high level and is capable of driving strong organic growth for the foreseeable future.

So as we look at capital deployment, I can tell you our philosophy is always that the first priority for us is continuing to invest back in the business in order to make sure that we can drive long-term sustainable top-tier growth. That's the commitment that we’ve made to investors, the commitment that we've made to the organization. And so we are always looking at what we can do to be able to do that.

Now if you look at our late-stage pipeline, we clearly have confidence that we can do that, but we are constantly looking at what is out there that fits our strategy both within the franchises that we operate in as well as we have a program internally, we call new horizons, where we look at other verticals that might fit what we’re good at. I would say our primary focus is looking for opportunities that can drive strong growth in that 2023, 2024, 2025 time frame that's we feel confident that we can drive growth with our late-stage pipeline ahead of that.

So we're constantly looking for assets in that time frame that could help further accelerate our growth in that window. And we're looking at both early-stage assets and in fact this year, we've done a number of early-stage assets in oncology and in neuroscience. I would say those are the areas that we have focused a tremendous amount of attention on. It’s not the only places that we're looking, but it certainly is an area that's a high priority and we'll obviously look at other kinds of transactions as well, and certainly your points are valid one as our P/E has risen, it does give more flexibility to do other things.

Now having said that, I would also tell you that we always look at the return that we can get out of a transaction and it has to meet our internal financial criteria or we're not willing to go down a path to acquire something that doesn't give us the kind of accretion that we're looking for and the kind of return that we're looking for. And so those are always important factors that we look at.

For cash flow though, if we look at our cash generation across the next 10 years, this is a business that generates a tremendous amount of cash. And now with tax reform, we have access to that cash in a much more efficient way than we did previously. So it gives us more flexibility to be able to deal with that cash appropriately. So if we look at that cash flow and we look at what we believe our needs to be able to sustain the level of performance that we want to be able to sustain in the business, I can tell you that cash flow grows faster than what we believe those needs are.

So as we've said now several times, pretax reform, if there was tax reform then we would look for a way to be able to return additional capital to shareholders. And we've been evaluating that for – actually last 45 days or so, when it became clear to us that tax reform is likely to occur. We have a proposal that we have worked up in order for us to make changes in this area. It does require board approval. I’ll come back to that here in a second.

But I think you can assume we've always demonstrated a strong commitment to our dividend and growing that dividend. I think we've grown our dividend to 77% so far since we launched this new company. And so I think you can assume that what I'm describing to you would be a combination of acceleration of the dividend growth and more share buybacks. Now it obviously has been through our board. We have a board meeting scheduled in February. It is our intent, my intent to review the proposal with the board at that point. And we will make an announcement post that board meeting.

So I don't want to preempt what the payout ratio would be. I would say to you that you're certainly not. What you describe here is not an illogical way of thinking about it, but beyond that I wouldn’t want to comment much, but I would say investors are going to have clarity on it in the month of February. So it's not too far off before you'll have a good idea of what we're describing.

[Jami Rubin, Goldman Sachs & Co. LLC]

Thanks very much.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks Jami. Operator, we will take the next question please.

[Operator]

Thank you. Our next question is from Jeff Holford from Jefferies.

[Jeffrey Holford, Jefferies LLC]

Thanks very much. And just first recounting it, while congratulations as well deserved and really nice move on the [indiscernible], particularly into Puerto Rico. So just thanks for that. First question for you, on 2018 outlook, I mean obviously this does not as I understand include any impact from share repurchases, you got tremendous momentum on your earnings I think that needs to be pushed through here. So your thoughts around accelerated share repurchase. This is something more of a progressive program, I wonder if you can comment around that because it would just seem that timing would be in your favor to do something on accelerated basis?

Second, really any thoughts here on the long-term guide, it's clear it's not just tax, the underlying fundamentals keep improving as well. Is it fair to say that there's potential headroom particularly on margins and revenue for your longer term guidance when you recently put out. And then just that – just because I still get a lot of pushback on it, I wonder if you might let – care to express a level of confidence around ability to file and launch Rova-T this year, any reason why it shouldn't be 100%? Thank you.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Okay. So I'll take most of those and may have Mike chime in on that, on the third one, the Rova-T one, but I will give you some color on that as well. So if I look at 2018, what we have built in is a typical level of share repurchase that we normally have, so we have not built in the incremental share repurchase that we would do.

And I would say, we're not at a point right now were we will make a decision as to whether or not it would be an accelerated kind of an approach or would be more typical of how we buyback shares on more of a ratable consistent basis. And that's something I'd prefer to wait until after our board meeting is done to describe to you, but we will have some commentary after that.

On the long-term guidance fundamentals, I mean clearly when you look at our business, our business added space fundamentals excluding the positive impact that we've seen from tax reform is very strong. And what we have projected on our long-term guidance, I think is certainly in the top tier of our peer group. I would say our fundamentals continue to improve.

The point I made in my comments, I mean we are on the front end of what would be tremendous growth for AbbVie. I think MAVYRET is a good example of the kinds of products that we're bringing to the marketplace and the impact that they can have on patients most importantly, but the impact that they can have financially on the business. And those two in our business, the nice thing about it is they tend to go hand in hand when you bring products that truly make an impact on patients lives, the financial rewards tend to follow.

So we feel good about the fundamentals and I'm not going to give you a new numbers, but I would tell you, I sleep well at night knowing how we're performing and where we're going in the future. So I think that probably gives us some feel for it.

Our confidence on Rova-T has not changed. I mean we went into the Stemcentrx acquisition with a level of enthusiasm around the Stemcentrx platform. But we have to see what the data looks like and we have to have interactions with the regulatory authorities, and so I would say nothing has changed. But I don't know that we can predict more than that. Mike, is there anything you want to add?

[Michael Severino]

No, I think you covered it, Rick. Certainly there's a huge unmet medical need and the data that we've shown publicly with Rova-T from the early-stage studies show clear activity. So our plans remain unchanged for making good progress with the TRINITY study in third-line or greater. We'll see those data in the second quarter and we will progression there, and our plan remains to file following those data, and the remainder of the program continues to progress as well. Phase III randomized studies in earlier lines of therapy, the I-O combo studies we're doing in partnership with BMS and the BASKET study in particular.

[Jeffrey Holford, Jefferies LLC]

Thanks very much guys.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks, Jeff. Operator, we’ll take the next question please.

[Operator]

Thank you. Our next question is from Steve Scala from Cowen.

[Steve Scala, Cowen and Co. LLC]

Thank you so much. I have two questions. First Bill, you said the tax rate post 2018 would increase gradually to 13%. Can you provide some perspective as to the pace of the increase from the 9% that you're guiding to in 2018? And then on ABT-494, the SELECT-COMPARE trial had a primary completion in October of 2017. It's an important trial given that it's the largest of the SELECT trials. Can you say anything on the safety profile that you've seen in SELECT-COMPARE? Thank you very much.

[William Chase]

Steve, this is Bill. I think you should just model that pretty much a straight line linear. It really does not impact any one-year more than others. So for modeling purposes, I just pretty much straight line it linearly.

[Steve Scala, Cowen and Co. LLC]

Thank you.

[Michael Severino]

And so with respect to SELECT-COMPARE, that study remains blinded. I think what might be causing some confusion about an October 2017 data is that study has two components, traditional response based on ACR and DAS measures, and then a longer term structural component of that program, looking for innovation of structural progression, and the study remains blinded until that structural component is complete. And so those data will be coming in the first half of this year and that's when we would unblind the study and that's when we would talk about the safety profile of that study in individual.

Overall across the program, we continue to feel good about the safety profile we've observed. We see a profile that's very consistent with our expectations both for this molecule and for a molecule that we treat, the sorts of diseases where upadacitinib is being developed.

[Steve Scala, Cowen and Co. LLC]

Thank you.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks Steve. Operator, next question please.

[Operator]

Thank you. Our next question is from Chris Schott from JPMorgan.

[Christopher Schott, JPMorgan Securities LLC]

Great, thanks very much. Just two questions on HUMIRA, maybe the first, a U.S. specific question, help us understand a little bit of the volume versus price components as we think about your 2018 outlook. I guess specifically we're hearing from some your competitors it seems like the dermatology market might be an area that's a bit more competitive on the pricing front in 2018. Actually, just any comments on dynamics there?

My second question was HUMIRA on the international side. I think you mentioned in the comments you are making some proactive actions ahead of biosimilars competition. I wish you could say a little bit what you're doing there and more broadly just updated thoughts about how you see managing the HUMIRA franchise as we think about biosimilars entering the market later this year? Thanks so much.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Okay, thanks Chris. This is Rick. I think I'll answer the HUMIRA question maybe a bit more broadly because I think every single quarter, as some competitor has a hiccup or claims some level of victory, we have nervousness investors as it relates to HUMIRA. And look I can understand why it's obviously a flagship product of our Company.

But I think it would be helpful to maybe more broadly layout for you how we see HUMIRA in the U.S., and then Bill can answer the specifics around volume and price. Certainly it’s a volume driven business primarily, but Bill can give you more specifics around that. So if you step back and if you look at what are the key parameters that you want to understand of the performance of HUMIRA and the longer-term performance of the brand and its ability to be able to continue to grow.

This is a brand, if you look at the last three or four years, it has grown dramatically. The percent growth rate has come down somewhat as the brand has grown, but if you look at the absolute dollar growth, it's been fairly consistent and extremely healthy. So it starts with what is your position in managed care. And I would say we're now done with all of our negotiations in 2018. Our position is the same. We maintain a very, very strong managed care position in the United States.

The pricing hasn't fundamentally changed for the brand, so there's not any dramatic moves one way or another from that perspective. You look at the overall growth we're projecting. What Bill had described and you can see 2017, 15% growth, and then what we're describing for 2018. The markets themselves – these are big markets, but they're very attractive markets from a growth standpoint.

So if you look at the overall market growth rate, you should be thinking of it as high single-digits to low double-digits just in the United States. Let’s say 9%, 10%. Fundamental growth, RA more in the mid single-digit market. Rheum, more in the mid single-digit market. Derm, growing about 15%, so the big market growing rapidly. GI growing about 16% overall, so again a big market growing very rapidly.

The next thing you want to look at is what is your first-line share, and what I'm going to quote you is IMS date, which we consider to be the most reliable source of data. And this is data from January through October which is the latest data points that we have. And the reason why first-line is important is that’s the brand that gets the opportunity to put the patient into the highest level of control if that brand does not do that then obviously the patient rotates to something else.

So it's a leading indicator of where your share will go in the future for patients that are well maintained, they stay on the brand. For patients that aren’t well maintained, whatever that brand is they move to an alternative. So if you look at RA, our first-line share is 40%. If you look at PsA, it's 47%.

If you look at AS, it’s 62%, if you look at psoriasis, if you include Otezla, it's 40%. If you exclude Otezla because Otezla really competes in a slightly different segment, it's 54%. If you look at Crohn's and UC, it's 52%. So we have very strong positions as the first-line agent across every single category.

Then the next thing that you want to look at carefully is you want to look at what we describe as first brand, which is essential the naive patient population and switchers. And so if you look at each of the segments and I'm going to do the sub-segments here in a minute. So if you look at RA, SpA, PsA, AS, psoriasis, Crohn's, and UC, we are number one in every single one of those categories.

Our position varies from 25% to well over 50%. You've heard commentary from some of our competitors about where they are, so I’ll give you a little bit color around that, but based on the same data if you take SpA, COSENTYX is number four. If you take PsA, COSENTYX is number four. If you take AS, COSENTYX is number three. If you take psoriasis, COSENTYX is number five. If you take Crohn's, STELARA is number three. If you take UC, STELARA is number five. So as I look at that position, I feel very confident about where HUMIRA sits in our execution.

And then the final thing is when you look at volume, what's happening with our volume? And in every single category, derm, rheum and GI, we're growing our volume significantly. And so I look at the health of HUMIRA and the health of the U.S. business, and I can just have a tremendous amount of confidence in where we're going. On OUS, we have said all along that we expect the brand to peak this year and then start to gradually decline over time.

We've also said that we will compete for volume within certain parameters to try to maintain the volume and ultimately maximize profitability of the brand. So we will be taking proactive actions in countries where that is feasible to do. That's primarily in Southern Europe, so places like Spain, Italy, Portugal. Those markets are controlled primarily by hospitals and so it is our intent to negotiate with those hospitals to be able to put us in a position to be able to maintain our position effectively.

Going forward, we've done some of that when indirect biosimilars entered the marketplace and we were successful in doing that and we have already started that action now in those European markets. So you will see some impact on price, it should be offset in most cases by volume, and that's what we have described as a proactive actions that we will take.

[William Chase]

Chris, on price volume, as I said in my comments for the quarter, the 15% growth, I think you just think of 10% volume, the remainder being priced. As you look at 2018, where we got a projection of 13% to 14% growth in the U.S. year-over-year that we still expect that mid single-digit price range to stick, which would then imply a volume of high single-digits.

[Christopher Schott, JPMorgan Securities LLC]

Thank you so much for all the color.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks, Chris. Operator, we’ll take the next question please.

[Operator]

Thank you. Our next question is from Geoff Meacham from Barclays.

[Geoffrey Meacham, Barclays Capital, Inc]

Good morning, guys, and thanks for the question. Just had a few products specific ones. On the hep C front, outside the U.S., I may have missed it, but was there stocking for MAVYRET? And are there any getting factors for getting full reimbursement across Europe and Japan, and then how do you guys think about price U.S. versus OUS? Is it different today versus how you think initially with VIEKIRA?

And then for Mike, on upadacitinib and atopic dermatitis, I want to just get a sense from you about the scope of the Phase III. I'm curious whether the breakthrough designation really alters at all your thinking in terms of design like for example our shorter duration study things like that? Thanks guys.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Yes, so I'll take the HCV question. There was no stocking for MAVYRET inside the U.S. or outside the U.S. As far as price OUS, price outside the United States is basically negotiated country-by-country. It's done usually against some benchmark. And how you compare against that benchmark and so each country is different.

We have gotten reimbursement in many of the larger European countries and we've done quite well. So Germany is an example. We have the number one position in Germany. We have the number one position in Spain. We won the tender in the UK. We have the number one position now in Italy. We have launched in Japan. So Japan has approval and we are ramping rapidly in Japan.

The one large country that we have not gotten reimbursement yet is France. That is forthcoming. But I'd say the bulk of the countries were in the process or either have reimbursement and have launched or in the process of getting reimbursement and we'll launch once we have that reimbursement.

[Michael Severino]

Okay, this is Mike. With respect to upadacitinib and atopic dermatitis, we feel very good about those data. And we think that the Breakthrough Therapy Designation reflects clearly the degree of activity that we've shown today and so we are currently actively designing that Phase III program.

The Breakthrough Therapy Designation program has in our mind has been very successful and is very helpful because what it gives you is a lot of direct interaction with the FDA, including very senior members of the FDA that you wouldn't typically have access to at the current stage of development program.

So we're having those conversations now. I think it is very reasonable to assume that those conversations are going to inform, the Phase III program for upadacitinib in atopic dermatitis. That is very helpful to us in designing the program that will lead to registration in the U.S. Of course, we are also going to design a program that leads to registration in other jurisdictions around the world and all that work is currently underway.

So we'll start those studies as we said in the first half of this year and as we get a little bit closer to study start, we'll be able to talk to you a bit more about what that program is going to look like.

[Geoffrey Meacham, Barclays Capital, Inc]

Okay, thanks.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks Geoff. Operator, we’ll take the next question please.

[Operator]

Thank you. Our next question is from Geoff Porges from Leerink.

[Geoffrey Porges, Leerink Partners LLC]

Thank you very much, and again, congratulations on the results. So a few quick questions, first on HCV, your competitors suggested that they expect the U.S. market to stabilize sometime in the middle of the year both in terms of volume and also in terms of the price or the treatment cost for patient, wondering if that’s your expectation and what you're seeing.

Secondly on VENCLEXTA, could you give us any indication of what the path might be to first-line, is obviously is very encouraging data for VENCLEXTA in combination with IMBRUVICA in CLL and wondering if it's feasible that you might do a first-line study.

And then lastly, Bill if you just talk a little bit about leverage and that’s naturally de-levering the company, and of course, you’ve got all of this cash flow. So how are you thinking about how you might alter the leverage of the company in the future and does that affect your appetite for M&A? Thanks.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Okay. So I’ll take HCV, and then Mike can take the second, and Bill can take the third. So HCV, if we look at the market in the U.S., looking at the two parameters we are describing, one is treatment volumes. We continue to see treatment volumes ebb and flow a bit, but I'd say generally we are assuming treatment volumes tail off a bit. We saw some of that over the holidays. It's a little difficult to predict whether or not it was more holiday driven, but I’d say it's down 5% to 8% from where it was prior.

And this has been something that has moved around a little bit over time. I would agree that it is our expectation that the volume should stabilize going forward. But I'd also say that there could be some single-digit kind of pressure, downward pressure. We obviously priced the product where we described it in the public channel market at the level that the current pricing was and we have maintained that pricing going forward. We have been seeking parity contracts – non-exclusive contracts with the payers. And therefore, pricing has not been a big issue for us. So I would expect and hope price stability going forward.

[Geoffrey Porges, Leerink Partners LLC]

Great.

[Michael Severino]

Regarding the question with respect to VENCLEXTA and past to front-line. So we have actually two studies already underway in the front-line setting. One in the younger, more fit patient population, one in an older patient population with more comorbid illnesses on average. Those studies all look at combinations, combinations with CD20s like GAZYVA or RITUXAN. And there are, in some of those studies, VENCLEXTA and IMBRUVICA combination arms as well. So we're exploring multiple combinations in the front-line already.

[William Chase]

And Geoff on the balance sheet, look we are pretty comfortable with our balance sheet, right now we've got as Rick said robust cash flow. We're blessed with a LRP that has very, very robust growth on the topline and obviously the bottom line. So we will have a natural deleveraging just by virtue of the fact that the business is growing very rapidly. Therefore, our number one priority would not be to take down the absolute amount of leverage we have.

You may see us as we have a maturity, take that maturity out obviously to the extent that it's wise to do, but our number one priority would not be to take the overall leverage down. We think we have adequate capacity to pursue any M&A of the magnitude that we'd be looking at in the near-term. And as Rick said, our cash balances are going to grow pretty fast on top of that, so I think we're in pretty good shape from a balance sheet standpoint.

[Elizabeth Shea, Vice President, Investor Relations]

All right. Operator, we will take the next question please.

[Operator]

Thank you. Our next question is from Jason Gerberry from Bank of America.

[Jason Gerberry, Bank of America Merrill Lynch]

Hey, good morning, and thanks for taking my question. First question just on the tax guidance out the five years, just curious is it sort of – the only reason you gave out the five years, it’s hard to know what will happen in five years time or should we read into anything with regards to your portfolio composition changing in HUMIRA in five years time, potentially changing as a proportion of your profit mix?

And then my second question on VENCLEXTA, can you just give us a little color on how you'd envision in the relapsed/refractory setting the pace of reaching peak market share. I know I think in the last quarterly update, I think IMBRUVICA had about 70% of the second-line setting, so just sort of can you walk through the mechanics and the timeframe you anticipate getting the peak penetration in the relapsed/refractory setting? Thanks.

[William Chase]

Sure. So the purpose of giving some long range guidance on that tax rate. Look, I think it was important for us to put out the right rate for you guys to model from a non-GAAP perspective on tax. That for 2018 is that approximately the 9% number we gave. That said, our business mix will change over the coming years most notably with products driving increased U.S. revenue and income. I think you should look at products like IMBRUVICA, VENCLEXTA et cetera. And that will have the impact of taking the rate up. And that's why I say gradually as those businesses grow, it will have an impact of lifting the tax rate?

[Richard Gonzalez, Chairman and Chief Executive Officer]

Okay. On VENCLEXTA, I think what you’re describing is an important phenomenon. So IMBRUVICA does have roughly about 70% of the treated population in relapsed/refractory today. We would not expect the patients will be – well maintained patients will be taken off of IMBRUVICA.

So as those patients were to fail or progress then they would be given other treatment options and we would expect based on the data that VENCLEXTA will get a significant piece of that business and of that patient population. So by definition it means that it will be a bit more gradual as it grows because there'll be this trade-off between IMBRUVICA's current position.

Obviously, roughly 30% of those patients that are on some other kind of treatment today. There are some of those patients that are on treatment at all, which aren’t represented in that number. Some of those will progress. So it's a mix of all those things. But I would expect VENCLEXTA will ramp based on the available population within that population will ramp within that fairly quickly, but then over time it will be the progression of those patients going forward that become available.

[Jason Gerberry, Bank of America Merrill Lynch]

Got it. Thank you.

[Elizabeth Shea, Vice President, Investor Relations]

Thanks, Jason. Operator, we have time for one more question. Thank you.

[Operator]

Thank you. Our final question today is from Gregg Gilbert from Deutsche Bank.

[Gregg Gilbert, Deutsche Bank]

Thanks. Bill, back on tax this year, the non-GAAP rate for this year and up through the 13% rate, will the cash rate approximate those levels as well? And secondly, Rick I know you're not changing long-term guidance, but conceptually would it be fair to assume that the tax benefits that you now know about sort of flow through fully or would you reassess sort of reinvestment rates, and Mike lastly anything new on what's next for 414? Thanks.

[William Chase]

Yes. So I think from a business perspective over that five-year period you should think of the cash rate looking very similar to that rate. Obviously, the one discrepancy or exception to that would be the fact that we will be paying off our $4.5 billion payable over eight years and some of that’s backend loaded and given that we've taken that charge at 2017. The cash flow will be hitting in the next five years, so that’s one area that would be a little different. But other than that over the five-year period [indiscernible] pretty close.

[Richard Gonzalez, Chairman and Chief Executive Officer]

Yes. On the long-term guidance and the tax benefit, obviously we would expect the tax benefit to be able to flow through over time. Now there's an interrelationship between what you would do from an M&A standpoint. So if you were to acquire something, that had a significant R&D burn going forward just like we did as an example with Stemcentrx and risankizumab, obviously you would dial in those R&D expenses. But I would say generally speaking, you should view the tax benefit as an incremental benefit that we flow through.

[Michael Severino]

And with respect to 414, that's our antibody drug conjugate in glioblastoma multiforme, so primary brain cancer. That's in our front-line study right now. That study has overall survival as a primary endpoint. So we would be sufficient to support approval, obviously based on the results. That study is an event driven trial. So we can't predict the exact time when that would read out, but we'd expect to have more information from that front-line study sometime next year.

End of Q&A

[Elizabeth Shea, Vice President, Investor Relations]

Thanks, Gregg. 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. And this does conclude today’s conference. You may disconnect at this time.