Earnings Call Insights: AbbVie Inc. (ABBV) Q2 2025
Management View
- CEO Robert A. Michael highlighted that “AbbVie delivered another outstanding quarter with results exceeding our expectations.” He emphasized progress in advancing the pipeline and adding depth through strategic transactions, supporting long-term growth.
- Michael reported adjusted earnings per share of $2.97 and total net revenues of $15.4 billion, with ex-HUMIRA platform sales growing 22%, driven by Skyrizi and Rinvoq, which are now projected to deliver over $25 billion in combined sales for the year.
- Michael announced the company is raising full year revenue guidance to $60.5 billion and adjusted EPS guidance to between $11.88 and $12.08, with revenue guidance up by $1.5 billion since the start of the year.
- He cited the approvals of EMRELIS for non-squamous non-small cell lung cancer and Rinvoq for giant cell arteritis, the regulatory submission of TrenibotE, and differentiated Phase III data in alopecia areata for Rinvoq as R&D highlights.
- Michael referenced more than 30 business development transactions, including closing the Gubra agreement for a long-acting amylin analog in obesity and the planned acquisition of Capstan Therapeutics for an in vivo CAR-T platform.
- CFO Scott T. Reents stated, “We reported adjusted earnings per share of $2.97, which is $0.11 above our guidance midpoint. These results include a $0.42 unfavorable impact from acquired IPR&D expense. Total net revenues were $15.4 billion, reflecting growth of 6.5% on an operational basis.”
Outlook
- The company raised full year adjusted EPS guidance to between $11.88 and $12.08 and expects total net revenues of approximately $60.5 billion.
- Updated product assumptions include Skyrizi global revenues of $17.1 billion, U.S. HUMIRA revenues of $3 billion, neuroscience global sales of $10.5 billion, Imbruvica global revenues of $2.9 billion, and Venclexta global sales of $2.8 billion.
- For Q3, net revenues are anticipated at approximately $15.5 billion, with adjusted EPS between $3.24 and $3.28.
- Management noted, “This guidance does not include an estimate for acquired IPR&D expense that may be incurred beyond the second quarter.”
Financial Results
- Adjusted earnings per share were $2.97, and total net revenues were $15.4 billion.
- Adjusted gross margin was 84.4% of sales, adjusted R&D expense was 13.7% of sales, and adjusted SG&A expense was 21% of sales.
- Adjusted operating margin ratio reached 44.3% of sales, net interest expense was $678 million, and the adjusted tax rate was 16.2%.
- Skyrizi global sales were $4.4 billion, up 61.8%, and Rinvoq global sales were $2 billion, up 41.2%. HUMIRA global sales declined 58.2%, reflecting biosimilar competition. Neuroscience revenues reached $2.7 billion, up 24% operationally. Oncology revenues, including IMBRUVICA and Venclexta, reached nearly $1.7 billion. Aesthetics segment revenues were nearly $1.3 billion, down 8%.
Q&A
- Mohit Bansal, Wells Fargo, asked about the impact of STELARA biosimilar on Skyrizi and Rinvoq. Jeffrey Ryan Stewart explained that while some movement occurs, “the core momentum around Skyrizi and Rinvoq are simply related to just the outstanding data, the breadth of indications, our connections with physicians in terms of our value proposition.”
- Terence C. Flynn, Morgan Stanley, questioned confidence in Skyrizi and Rinvoq long-term guidance and tariffs. Robert A. Michael responded the company is “tracking very well against the last long-term guidance” and is “fairly insulated from any impact this year” regarding tariffs.
- Christopher Thomas Schott, JPMorgan, inquired about drivers behind Skyrizi’s growth; Stewart confirmed momentum “across the board,” with notable strength in psoriatic disease and IBD, and Reents detailed the $600 million guide raise split between IBD and psoriatic indications.
- Carter Lewis Gould, Cantor, asked about VYALEV guidance. Stewart attributed the raise to “very, very strong demand,” primarily in international markets.
- Timothy Minton Anderson, BofA Securities, asked about IRA price negotiation and GLP-1 impact on aesthetics. Michael did not comment on ongoing negotiations but noted the IRA orphan drug exemption expansion benefits Venclexta, and Stewart described the GLP-1 impact as “really a net neutral.”
- Vamil Kishore Divan, Guggenheim Securities, asked about the commercial opportunity for Rinvoq in alopecia areata and macro trends in aesthetics. Stewart replied, “the collection of the next wave of indications would add approximately $2 billion to peak year sales for Rinvoq,” and described the aesthetics market as “fairly stable” but requiring further work.
- Stephen Michael Scala, TD Cowen, pressed on why economic uncertainty affects aesthetics more now; Stewart cited “more chronic” impacts on consumer wallets and a trend toward a “natural look” in dermal fillers.
Sentiment Analysis
- Analysts raised recurring questions on sustainability of growth in Skyrizi and Rinvoq, pipeline investments, and macro pressures in aesthetics, reflecting a tone that was cautiously optimistic but probing for risks and sustainability.
- Management maintained a confident tone throughout, repeatedly emphasizing robust product performance, pipeline depth, and long-term strategic positioning. Michael stated, “AbbVie’s outlook is strong, and we are well positioned to deliver on our commitments in 2025 and beyond.”
- Compared to the previous quarter, analyst skepticism about macroeconomic effects and pipeline execution remained, but management’s confidence and upward guidance increased.
Quarter-over-Quarter Comparison
- Revenue and EPS guidance increased this quarter compared to Q1, with full-year revenue guidance up $800 million sequentially, and EPS guidance moving from $12.09–$12.29 to $11.88–$12.08.
- Skyrizi and Rinvoq guidance for the full year was raised, with Skyrizi’s global revenues now expected at $17.1 billion versus $16.5 billion previously. Neuroscience and oncology sales expectations were also lifted.
- Management tone remained confident, with greater emphasis this quarter on business development and R&D progress, and more detailed discussion of near-term and long-term product launches and pipeline milestones.
- Analysts continued to focus on sustainability of immunology growth, competitive threats, and commercial execution in aesthetics and neuroscience, echoing similar concerns from the previous quarter, though macroeconomic questions became more prevalent.
Risks and Concerns
- Management noted ongoing biosimilar competition for HUMIRA, with access and revenues expected to decrease as more exclusionary formularies are adopted.
- The aesthetics segment remains challenged by “economic challenges and lower overall consumer sentiment,” with revenues declining and market growth performing below historical levels.
- Potential policy shifts, such as tariffs and IRA price negotiations, were addressed, with management outlining steps to mitigate exposure and emphasizing a robust U.S. manufacturing presence.
- Analysts questioned the impact of competitive launches, pricing dynamics, and long-term growth drivers in immunology, oncology, and neuroscience.
Final Takeaway
AbbVie management underscored an outstanding quarter, highlighted by strong growth from Skyrizi, Rinvoq, and neuroscience products, and reinforced by upward revisions to full-year revenue and EPS guidance. The company showcased significant R&D progress, a robust pipeline, and strategic business development activity, while acknowledging ongoing headwinds in the aesthetics segment and competitive pressures for legacy assets. Management expressed confidence in AbbVie’s ability to execute its long-term strategy and deliver continued growth through 2025 and beyond.