Earnings Call Insights: AbbVie (ABBV) Q4 2025
Management View
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Robert Michael, CEO & Chairman of the Board, reported “record net sales and exceeded our financial commitments, advanced our pipeline across all stages of development and acquired new sources of growth through strategic transactions.” He highlighted full year adjusted earnings per share of $10 and total net revenues of $61.2 billion, which surpassed initial guidance by more than $2 billion. Michael stated that 2025 sales growth reached 8.6%, marking a new all-time high for AbbVie despite $16 billion of U.S. Humira erosion since LOE. He emphasized increased R&D spending by nearly $1 billion, funding 90 clinical programs, and over $5 billion in new business development, including acquisitions in immunology, neuroscience, and oncology. Michael announced a voluntary three-year agreement with the U.S. government, featuring low prices in Medicaid, expanded direct-to-patient cash pay options, and a $100 billion commitment in U.S. R&D and capital investments over the next decade.
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Jeffrey Stewart, Executive VP & Chief Commercial Officer, reported immunology quarterly revenues of approximately $8.6 billion, with Skyrizi sales at $5 billion and Rinvoq at nearly $2.4 billion. Stewart stated, “Skyrizi total prescription share in the U.S. biologic psoriasis market is now more than 45% and accelerating in the fourth quarter,” while Rinvoq achieved “a leading mid-teen in-play patient share for RA across all lines of therapy in the U.S.” He highlighted global Skyrizi IBD sales of $6.4 billion in 2025, more than doubling prior year performance, and noted that combined Skyrizi and Rinvoq sales already exceeded peak Humira sales by more than $4.5 billion. Stewart added that Vyalev sales were $183 million in the quarter and are expected to achieve blockbuster status in 2026.
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Scott Reents, Executive VP & CFO, stated, “We reported adjusted earnings per share of $2.71, which is $0.08 above our guidance midpoint.” Reents reported total net revenues of $16.6 billion for the quarter and outlined expectations for 2026, including total net revenues of approximately $67 billion, global immunology sales of $34.5 billion, and neuroscience sales of $12.5 billion.
Outlook
- Management expects total sales growth of 9.5% for 2026, forecasting net revenues of approximately $67 billion. Key products are projected as follows: Skyrizi revenue of $21.5 billion, Rinvoq revenue of $10.1 billion, and Humira revenue of $2.9 billion. Neuroscience is expected to achieve global sales of $12.5 billion, including Vraylar revenue of $4 billion, Botox Therapeutic sales of $4.1 billion, and Vyalev sales of $1 billion. Oncology sales are forecast at $6.5 billion, and aesthetics at $5 billion. The company anticipates an adjusted gross margin above 84% of sales, adjusted R&D expense of approximately $9.7 billion, and an adjusted operating margin ratio of approximately 48.5%. Reents stated, “We expect adjusted earnings per share between $14.37 and $14.57.” For Q1 2026, net revenues are anticipated to be approximately $14.7 billion.
Financial Results
- AbbVie reported adjusted earnings per share of $2.71 for Q4 2025. Total net revenues for the quarter were $16.6 billion, with ex-Humira growth platform delivering reported growth of 14.5%. Adjusted gross margin was 83.6% of sales, adjusted R&D expense was 15.4% of sales, and adjusted SG&A expense was 22.3% of sales. Adjusted operating margin was 38.3% of sales. The cash balance at the end of December was approximately $5.2 billion, with expected free cash flow of approximately $18.5 billion in 2026.
Q&A
- David Risinger, Leerink Partners: Asked about the psychedelic in development and differentiation from competitors. Roopal Thakkar, EVP of R&D & Chief Scientific Officer, responded that it works “through 5-HT2A serotonergic pathway and has a short-acting…hallucination time period” with “very high levels of efficacy that were observed…almost led to a remission like state in the majority of patients.” He mentioned upcoming readouts before Phase III.
- Christopher Schott, JPMorgan: Asked about Skyrizi new patient share in IBD and growth expectations for Skyrizi/Rinvoq. Stewart explained capture rates are “very high in both UC and Crohn’s,” with 80% in Crohn’s. Michael indicated “numerous sources of upside across the enterprise” and noted combined guidance for Skyrizi and Rinvoq is already $0.5 billion higher than 2027 estimates.
- Terence Flynn, Morgan Stanley: Inquired about BD strategy and Phase III HS data. Michael described over $8 billion invested in external innovation over the last two years, emphasizing early-stage deals but open to late-stage if differentiated. Thakkar said Rinvoq is expected to be meaningful in treatment failure HS, and lutikizumab is being studied in naive and experienced populations.
- Additional questions addressed oncology pipeline, TrenibotE approval impact, pricing headwinds in immunology, competitive pressures in IBD, and expansion strategies in migraine and obesity.
Sentiment Analysis
- Analysts posed detailed and generally positive questions but expressed skepticism around competitive threats in IBD, pricing, and new launches, with some pressing for quantitative details and competitive positioning.
- Management maintained a confident and optimistic tone throughout, especially in prepared remarks, frequently reinforcing the strength of the portfolio, guidance, and pipeline. Michael stated, “We are well positioned to deliver high single-digit revenue growth through 2029.” Compared to the previous quarter, management’s tone remained upbeat, though the Q&A included more granular questions regarding market competition and product differentiation.
Quarter-over-Quarter Comparison
- Guidance was raised from initial 2025 forecasts, with 2026 total net revenues projected at $67 billion (vs. $60.9 billion prior full year 2025 guidance) and adjusted EPS guidance increased compared to $10.61-$10.65 for 2025. Sales growth projections accelerated from 8.4% in Q3 to 9.5% for 2026.
- Management focus shifted from emphasizing recovery after Humira LOE to highlighting new blockbuster launches (Vyalev) and substantial R&D investment. Pipeline progress and business development remained priorities, but this call included a new government agreement and larger-scale U.S. investment commitments.
- Analyst focus shifted from basic pipeline milestones and competitive dynamics to more probing questions about commercial execution, pricing resilience, and market share sustainability, especially in immunology and neuroscience.
- Management tone remained confident, but with increased discussion of pricing headwinds, competitive market share pressures, and mitigation strategies in response to analyst scrutiny.
Risks and Concerns
- Management acknowledged continued Humira erosion and Imbruvica IRA pricing as ongoing headwinds, with expectations for further Humira access declines in 2026.
- In aesthetics, economic headwinds are expected to persist globally, impacting category growth. Stewart indicated, “economic headwinds have continued to impact market conditions globally, and we anticipate category growth will remain challenged in 2026.”
- Competitive pressures in IBD and the potential impact of biosimilars and new entrants were noted, but management cited robust capture rates and new data to support leadership positions.
- Pricing headwinds for Skyrizi and Rinvoq are anticipated to be low single digits in 2026 and beyond.
- Management outlined strategies to mitigate competitive and pricing risks, including product innovation, expanded indications, and market development initiatives.
Final Takeaway
AbbVie closed 2025 with record results, robust product performance, and a strengthened pipeline, forecasting 9.5% sales growth in 2026 and projecting continued momentum driven by Skyrizi and Rinvoq, blockbuster launches like Vyalev, and a series of anticipated regulatory and clinical milestones. Management remains confident in navigating competitive and pricing headwinds, citing a diverse portfolio, strategic investments, and a clear path to sustained high single-digit revenue growth through 2029.