AbbVie (NYSE:ABBV) Q1 2026 Earnings Call

0:00 Morning and thank you for standing by. Welcome to the AbbVie First Quarter twenty twenty six Earnings Conference Call. All participants will be able to listen only until the question and answer portion of this call. You may ask a question by pressing star one on your phone. Today's call is also being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Ms. Liz Shea, Senior Vice President, Investor Relations. Good morning, and thanks for joining us. Also on the call with me today are Rob Michael, Chairman and Chief Executive Officer Jeff Stewart, Executive Vice President and Chief Commercial Officer Rupul Thakkar, Executive Vice President, Research and Development and Chief Financial Officer and Scott Rents, Executive Vice President and Chief Financial Officer. Before we get started, I'll note that some statements we make today may be considered forward looking statements based on our current expectations.

0:47 AbbVie cautions that these forward looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated in our 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 turn the call over to Rob. Thank you, Liz. Good morning, everyone, and thank you for joining us. AbbVie is off to an excellent start to the year with first quarter results exceeding our expectations across our diverse portfolio.

1:39 We are delivering top tier growth and continue to strengthen our long term outlook with pipeline advancements and strategic transactions. Turning to our first quarter performance, we achieved adjusted earnings per share of $2.65 which is $07 above our guidance midpoint. Total net revenues were $15,000,000,000 expectations by $300,000,000 and reflecting robust sales growth of 12.4%. I'm especially pleased with the momentum in immunology and neuroscience, which are both delivering share gains in growing markets. Based on this strong performance, we are raising our full year adjusted earnings per share guidance by $0.12 and now expect adjusted EPS between $14.08 and $14.28 Turning now to R and D, we are making meaningful progress advancing programs across all stages of development.

2:46 Recent highlights include The US regulatory submissions of RINVOQ for alopecia areata, giving us a potential new source of growth in dermatology, and SKYRIZI subcu induction in Crohn's, with an approval decision expected later this year. We also saw promising interim data from our Crohn's platform study combining SKYRIZI and our own alpha-four beta-seven, which has potential to deliver transformational efficacy. In obesity, we announced early stage data for our amylin analog two ninety five with very encouraging weight loss results. In oncology, we are now expecting the regulatory submission for etentamig by the end of this year, which is earlier than our previous expectations.

3:37 We also expanded our emerging oncology pipeline by closing the Remagen agreement, giving us a novel PD-one VEGF bispecific antibody. We will continue to augment our portfolio with business development to access external innovation. And given our strong growth outlook, we have significant financial capacity to pursue both early and late stage opportunities. Lastly, as part of AbbVie's $100,000,000,000 commitment to U. S. R and D and capital investments over the next decade, we recently announced construction of several new manufacturing sites. This includes a 1,400,000,000 investment to build a pharmaceutical manufacturing campus in North Carolina and a $380,000,000 investment for two new plants in North Chicago.

4:32 These strategic investments will strengthen AbbVie's ability to produce medical breakthroughs in immunology, neuroscience, oncology, and obesity. In summary, the fundamentals of our business are strong and we are well positioned to deliver top tier growth for the long term. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights. Jeff? Thank you, Rob. I'll start with the quarterly results for immunology, which delivered total revenues of $7,300,000,000 reflecting impressive sales growth of $1,000,000,000 SKYRIZI total sales were $4,500,000,000 up 29.2% on an operational basis, exceeding our expectations. We continue to demonstrate exceptional performance across psoriatic disease, where we are gaining share and have clear leadership over all biologics and orals by a very wide margin.

5:29 The psoriatic market is growing robustly and we feel extremely confident SKYRIZI's best in class profile, including high and durable efficacy on both skin and joints, as well as simple quarterly dosing, which collectively gives us a distinct advantage relative to all the existing and emerging therapies in this area. And we continue to generate compelling evidence to support SKYRIZI as the preferred treatment option for psoriatic disease. At the recent AAD meeting, we presented new data highlighting SKYRIZI's strong efficacy in genital and scalp psoriasis, which are very difficult to treat areas, often leading to significant social and emotional burden to patients. The FDA has recently approved adding the new study results in these high impact area to the SKYRIZI label.

6:17 We also now have long term efficacy in radiographic data in psoriatic arthritis, demonstrating SKYRIZI's durable efficacy with nearly ninety percent of patients showing no radiographic progression through five years of treatment. This data will enhance our existing leadership in the important PSA segment, where SKYRIZI is the frontline in play patient share leader in both the derm and room segments. Performance also remains very robust in IBD, where SKYRIZI is on track to deliver more than 30% global sales growth across Crohn's disease and ulcerative colitis this year. Competitive dynamics within IBD are playing out in line with our expectations with SKYRIZI continuing to capture a leading share of total new patient starts in The U.

7:08 S. In the quarter, including very significant in play leadership in the frontline setting, which is the strongest signal of overall physician preference for SKYRIZI. I'm also pleased with the compelling results from our recent subcutaneous induction study for Crohn's, with data, particularly in the bio naive population, that we believe compares very favorably versus the competition, and we look forward to providing an additional dosing option for physicians and IBD patients later this year. Turning now to RINVOQ, which is also performing above our expectations. Global sales were $2,100,000,000 up 20.2 on an operational basis. Demand remains strong across all of RINVOQ's indications. We are now achieving high teens in play patient share in RA and are seeing a nice inflection in prescriptions across gastro, especially in UC, following the recent expanded label supporting access to RINVOQ earlier in the treatment paradigm for IBD patients.

8:08 We are also planning for the potential near term commercialization of two additional indications, vitiligo and alopecia areata, which will meaningful expand RINVOQ's dermatology label and where we have also recently expanded our field force to support these emerging opportunities. Lastly, in immunology, HUMIRA global sales were $688,000,000 down 40.3% on an operational basis, reflecting biosimilar competition and in line with our expectations. Moving to neuroscience, where we continue to outperform our expectations as well. Total revenues were nearly $2,900,000,000 up 24.3 on an operational basis. In migraine, our leading portfolio continues to gain market share with UBRELVY, QULYPTA and BOTOX Therapeutic each delivering robust double digit sales growth.

9:03 In psychiatry, VRAYLAR global sales were $9.00 $5,000,000 up 18.4%, reflecting strong prescription growth in both bipolar disorder and adjunctive MDD. Vraylar has significant leadership, with new prescription share roughly double the next Closed branded competitor, And we expect continued momentum following the introduction of new lower doses, allowing prescribing flexibility as well as pediatric usage. Moving to Parkinson's disease, we continue to see encouraging uptake for Vylev, which is on track to achieve blockbuster revenue this year. Total sales were $2.00 $1,000,000 up approximately 10% on a sequential basis.

9:49 We are also preparing for the potential approval and launch of tevapadon in The U. S. Later this year, an exciting new oral treatment for patients with Parkinson's and a very complementary addition to our growing Parkinson's portfolio with Vylev and Duodopa. Tevapadon has demonstrated strong efficacy as both a monotherapy, as well as an add on to the standard of care, and we believe it will be a sizable commercial opportunity. Moving now to oncology, where total revenues were more than $1,600,000,000 down 3% on an operational basis. VENCLEXTA continues to perform very well, especially in CLL as combination use with BTK inhibitors are emerging as a preferred fixed treatment, duration globally.

10:38 We've recently received full approvals in The U. S. And The UK, as well as positive CHMP opinion for VENCLEXTA's use with BTKs for that fixed treatment course. Total VENCLEXTA sales were $770,000,000 up 9.7% on an operational basis. Continued sales growth from Elijer, Epkinley and Umbrella also helped to partially offset the expected sales decline for IMBRUVICA, which was down 24.7% due to IRA pricing and competitive share pressure. Turning now to aesthetics, which delivered global sales of nearly $1,200,000,000 up 5.1% on an operational basis. BOTOX Cosmetic total revenues were $668,000,000 up 17%, reflecting a favorable price comparison in The U.

11:30 S. As well as modest market growth globally. Juvederm global sales were $232,000,000 down 2.9%, reflecting continued headwinds in key dermal filler markets. While economic headwinds have continued to impact market conditions globally, the long term prospects for the category remain attractive, given high consumer interest and low penetration rates. As the industry leader, we are investing in promotion and innovation to support patient activation. I'm particularly excited about the potential for Trinobot E, our fast acting short duration toxin, which once approved, we expect will be market expanding and complements our toxin portfolio very nicely. While Trenebody E is delayed in The U.

12:17 S, we continue to anticipate approval and launches this year in key international markets, including Europe, Canada and Japan. So overall, I'm extremely pleased with the execution and continued strong performance across our commercial portfolio. And with that, I'll turn the call over to Rupal for comments on our R and D highlights. Rupal? Thank you, Jeff. We continue to make good progress across our pipeline. I'll start with dermatology programs in immunology. As Jeff just mentioned, new data was presented at the recent AAD meeting highlighting SKYRIZI's strong efficacy in genital and scalp psoriasis, and long term efficacy, including radiographic data in psoriatic arthritis.

13:07 These recent presentations add to the growing body of evidence supporting SKYRIZI's best in class profile in psoriatic diseases. Its strong, durable efficacy on both skin and joint measures, favorable safety and tolerability profile, and convenient quarterly maintenance dosing give us confidence that SKYRIZI will continue to be the preferred first line treatment option for patients with psoriatic disease. Additionally, discussions are ongoing with the FDA regarding revised label language related to tuberculosis evaluation for SKYRIZI. While TB monitoring has become fairly routine prior to initiating treatment with biologics, updated language would allow healthcare providers to use their clinical judgment.

13:57 Moving to RINVOQ, the regulatory application for alopecia areata was recently submitted to the FDA. Approval decisions are anticipated later this year in Europe and Japan and in early twenty twenty seven in The U. S. In hidradenitis suppurativa, Phase III studies for both RINVOQ and lutekizumab are progressing well and remain on track for sixteen week top line results in the second half of this year. Turning to gastroenterology, all co primary and key secondary endpoints were met in the phase three AFFIRM study, with SKYRIZI subcutaneous induction in Crohn's disease demonstrating very high levels of endoscopic response and clinical remission.

14:46 While not a direct head to head comparison, when matching these data against results from the SKYRIZI IV induction program, the subcu induction achieved numerically higher results across key endpoints. We are extremely pleased with the strong performance demonstrated by subcutaneous induction, especially considering that this study enrolled a very difficult to treat patient population. Two thirds of the patients received prior advanced therapy, with half failing two or more therapies and a third failing ustekinumab or a JAK inhibitor. Data in those who had not previously experienced advanced therapy were particularly noteworthy, where sixty one percent of SKYRIZI patients achieved endoscopic response and seventy three percent achieved clinical remission at week twelve.

15:42 This is 45 points higher than placebo on both measures. These are very impressive results, which will continue to support first line use. These data reinforce SKYRIZI's best in class profile and provide an additional induction dosing option for patients with Crohn's disease. Our regulatory application was recently submitted with an approval decision anticipated later this year. Sub Q induction for ulcerative colitis is also being assessed, and we will be discussing options with health authorities. Next, on to other gastro programs. An interim analysis was recently completed on our Crohn's disease platform study.

16:29 In the cohort evaluating SKYRIZI plus our novel anti alpha-four beta-seven antibody, ABBV-three eighty two, the combination resulted in a higher rate of endoscopic remission at week twelve and at week twenty four. The rate was double that of either monotherapy arm. Endoscopic remission was achieved by approximately forty two percent of patients receiving the combination at week twenty four. These results were observed in a broad population that had severe and refractory disease, which included eighty two percent advanced treatment failures and fifty three percent of patients failing two or more advanced treatments.

17:15 Of the patients that previously received advanced therapies, sixty three percent failed an agent with an overlapping mechanism with the combination, and twenty percent failed a JAK inhibitor. At baseline, patients had a mean Crohn's disease activity index of three twenty five and a simple endoscopic score of 14, which represents a very treatment refractory patient population. Achieving this level of endoscopic remission in this setting is a particularly meaningful achievement, as this endpoint is an objective measure of mucosal healing and is associated with long term benefits, including reduced rates of hospitalization, surgery, and disease progression.

18:05 Safety of the combination was consistent with the profiles of the monotherapies. No new signals were observed. These results demonstrate the potentially transformative level of efficacy that our novel combination can achieve. The study is expected to complete in the third quarter with presentation at a medical meeting anticipated by early next year. A phase 2b study is planned to begin this summer in patients with Crohn's disease and ulcerative colitis to evaluate SKYRIZI in combination with both options for SKYRIZI plus three eighty two in Crohn's disease.

18:56 In the SKYRIZI plus luticizumab cohort, the combination did not sufficiently differentiate from monotherapy SKYRIZI and will not be moving forward. In the early stage immunology pipeline, we are nearing completion of a Phase I study for an IRAK4 inhibitor, ABBV-eight forty eight, and plan to begin a Phase II study in rheumatoid arthritis later this year. This potent inhibitor has the potential to provide biologic like efficacy, a favorable safety profile with no box warnings, and convenient once daily oral dosing. I will now discuss neuroscience. Top line analysis was recently completed on our phase two trial evaluating ABBV932 in bipolar depression.

19:45 In the study, the overall difference observed between the drug treated and placebo groups was not statistically significant. However, in a pre specified subgroup analysis of bipolar I patients, an efficacy signal was observed. The safety profile of nine thirty two was generally similar to placebo, including rates of extrapyramidal events, demonstrating the potential for a more favorable tolerability profile compared to Vraylar. We are evaluating next steps to continue nine thirty two development in bipolar I patients. Dose escalation work continues for emeraclidine in both schizophrenia and elderly patients. In schizophrenia, we have cleared the one hundred milligram dose and will begin evaluating one hundred and fifty milligrams.

20:35 Phase II studies in monotherapy and adjunctive schizophrenia, as well as psychosis related to Alzheimer's, Parkinson's, and Lewy body dementia are planned to begin in the fourth quarter. Moving to our psychedelic asset, bradicilacin, additional data from an ongoing Phase II study in major depressive disorder will be available this year. Several studies are planned to begin in 2026, including a phase three trial for single course acute treatment in MDD, a phase 2B evaluating repeat dosing for chronic use in MDD, and a proof of concept phase two in post traumatic stress disorder.

21:21 And in Parkinson's disease, we remain on track for an approval decision for tevapadon in the third quarter. Turning to our solid tumors program in oncology. TmAbA is progressing well across a broad range of tumor types. At the upcoming ASCO meeting, early stage safety and efficacy results for TmAbA in head and neck and ovarian cancers will be presented. Based on these results, we are engaging with regulators regarding ways to accelerate programs for TmAbA plus pembrolizumab in frontline head and neck cancer and TmAbA plus bevacizumab in frontline ovarian cancer. In colorectal cancer, we have made a decision to update our strategy in the third line plus setting and will now focus the pivotal program on TmAbA in combination with bevacizumab in an all comers population as opposed to pursuing monotherapy in c Met selected patients.

22:22 Targeting all comers will allow TmAbA to reach a substantially broader population. TmAbA plus bevacizumab demonstrated improved response rates and disease control versus current standard of care, regardless of c Met expression levels. Treatment with tMAb A at two point four milligrams per kilogram plus Bev achieved an objective response rate of thirty percent and a confirmed disease control rate of ninety seven percent compared to rates of zero percent and seventy percent respectively for LonServ plus Bev. Given the expanded patient population for the all comers phase three trial, we anticipate faster enrollment compared to the study in c Met selected patients.

23:12 Initial data readout is expected in the second half of next year. In lung cancer, tMAb A received its first breakthrough therapy designation as a monotherapy in second line plus EGFR wild type nonsquamous non small cell lung cancer. We are in the process of planning a phase three trial in this setting. In small cell lung cancer, a phase three trial for monotherapy ABBV-seven zero six recently began in relapsedrefractory patients. Two phase two studies evaluating seven zero six triplet combinations in frontline patients are also planned to initiate this year.

23:58 These trials will evaluate seven zero six in combination with atezolizumab plus DLL3 T cell engagers. Moving to AbbVie nine sixty nine, dose escalation data in late line metastatic castration resistant prostate cancer will be presented at ASCO. Based on these results, we are in the process of discussing acceleration options with regulators in order to advance into Phase III trials as quickly as possible. We also continue to augment our solid tumor pipeline through investments in external innovation, including one with Kestrel Therapeutics, who recently began a phase one study to evaluate a pan KRAS inhibitor in advanced solid tumors harboring KRAS mutations.

24:52 This next generation inhibitor has the potential to provide an improved efficacy and safety profile based on increased potency and specificity against the most relevant KRAS mutations while sparing H and NRAS isoforms. Our strategy is to combine this pan KRAS inhibitor with tMAbA in pancreatic, lung, and colorectal cancers. In hematologic oncology, our Phase III trial evaluating monotherapy ententamag in third line plus multiple myeloma is tracking ahead of schedule. We anticipate a response rate readout in the third quarter, with potential to also see an interim analysis on progression free survival.

25:42 If this interim analysis is positive, regulatory submissions would occur later this year. Progress continues in earlier lines of therapy as well. The increasing use of anti CD38 antibodies in earlier treatment settings is driving a need for CD38 free BCMA combinations, particularly those that can provide the convenience of monthly BCMA dosing combined with an oral agent. Plans are underway for a phase three study evaluating ententamag in combination with pomalidomide in second line plus patients, including those that were exposed or refractory to a CD38 antibody or who lost response to a BCMA CAR T or ADC.

26:32 Moving to other areas of our pipeline. In aesthetics, the FDA issued a complete response letter for our Trenebot E application related to manufacturing questions. The CRL did not identify any issues related to safety, efficacy, or labeling of Trenebot E, nor has the FDA requested any additional clinical trials be conducted. We will be working closely with the FDA to address their feedback and determine next steps for resubmission. In obesity, positive top line results were announced from a multiple ascending dose study evaluating our long acting amylin analog, ABBV-two ninety five. In the study, two ninety five demonstrated clinically meaningful weight loss of nearly 10% after only twelve weeks of treatment despite enrolling a predominantly male non obese population.

27:30 Two ninety five was well tolerated with mostly mild and transient GI related adverse events. No cases of severe nausea, vomiting, or diarrhea were reported. These early results are encouraging and reinforce our view that our long acting amylin analog has the potential to provide strong weight loss with favorable tolerability. In the next phases of development, higher doses of two ninety five will be tested in patients with obesity, including every other week and monthly regimens. Interim data from our phase one study in obese patients are anticipated later this year. Our phase two program is now expected to begin in the third quarter.

28:19 To summarize, significant progress continues with our pipeline, and we look forward to additional important data readouts, regulatory submissions, and approvals throughout 2026. With that, I'll turn the call over to Scott. Thank you, Rupl. Starting with our first quarter results, we reported adjusted earnings per share of $2.65 which is $07 above our guidance midpoint. These results include a $0.41 unfavorable impact from acquired IPR and D expense. Total net revenues were $15,000,000,000 This reflects top tier growth of 12.4%, including a 2.1% favorable impact from foreign exchange.

29:09 Adjusted gross margin was 83.6% of sales, adjusted R and D expense was 15.1% of sales, and adjusted SG and A expense was 22.7% of sales. The adjusted operating margin ratio was 40.8% of sales, which includes a 5% unfavorable impact from acquired IPR and D expense. Net interest expense was $645,000,000 The adjusted tax rate was 15.4%. Turning to our financial outlook, we are raising our full year adjusted earnings per share guidance to between 14.08 and $14.28 Please note that this guidance does not include an estimate for acquired IPR and D expense that may be incurred beyond the first quarter.

30:05 We now expect total net revenues of approximately $67,300,000,000 an increase of $300,000,000 The impact from foreign exchange on full year sales growth remains roughly in line with our prior expectations. This upgraded revenue forecast includes the following approximate assumptions for several of our key products and therapeutic areas. We now expect SKYRIZI global revenues of 21,600,000,000 an increase of $100,000,000 reflecting demand growth in psoriatic and IBD indications RINVOQ global sales of $10,200,000,000 an increase of $100,000,000 reflecting strong performance in the room and gastro indications Total neuroscience revenues of 12,600,000,000 an increase of $100,000,000 reflecting momentum across the portfolio.

31:06 Moving to the P and L for 2026, we continue to forecast full year adjusted gross margin above 84% of sales, adjusted R and D expense of approximately 9,700,000,000 and adjusted SG and A expense of approximately $14,200,000,000 We now anticipate an adjusted operating margin ratio of approximately 47.5% of sales, in line with our previous expectations after including the roughly 1% unfavorable impact of acquired IPR and D expense incurred through the first quarter. We also now expect adjusted net interest expense of approximately $2,700,000,000 a reduction of $100,000,000 primarily related to favorable rates on our debt issuance.

32:02 Turning to the second quarter, we anticipate net revenues of approximately 16,700,000,000 This includes an estimated 0.6% favorable impact from foreign exchange. We are forecasting an adjusted operating margin ratio of approximately 50%. We expect adjusted earnings per share between $3.74 and $3.78 This guidance does not include acquired IPR and D expense that may be incurred in the quarter. In closing, AbbVie continues to deliver outstanding results and our financial health remains very strong. Our capital allocation priorities remain focused on the future as we are investing in the business at record levels, have financial flexibility to pursue compelling business development and are returning capital to shareholders through our strong and growing dividend.

33:02 With that, I'll turn the call back over to Liz. Thanks, Scott. 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, first question please. Our first question comes from David Amsellem from Piper Sandler. Please go ahead. Thanks. So appreciate all the metrics you have on SKYRIZI, but I wanted to get your thoughts on the competitive landscape, particularly with the rollout of iclotide. How are you thinking about its impact on SKYRIZI going forward, if any? And give us some color on your counter detailing messages to practitioners regarding the product as you enter this period with more intensified competition?

33:55 Thank you. Yes, thank you, David. It's Jeff. I'll give you some flavor on that. As I mentioned, Discovery is just such an exceptional product. We see in our audits and our trackers that over the last couple of quarters, despite incredibly high share, really over four times basically the in play share and total share versus the next leading competitor, our MBRX has accelerated and continue to hit all time highs. And that's because of a few key items, right. The superiority data that we have on skin clearance is just exceptional. So we have head to head trials against five mechanisms in psoriasis including the two oral agents, the TYK2 and Otezla.

34:43 We can show category leading durability in the real world. It's just exceptional adherence given the dosing cycle and the ability to keep the disease controlled. We have that leading PSA indication with that new five year joint stability data that Rupl and I highlighted. And then this new data on hard to treat areas like the scalp, the genitals, the hands and feet, head to toe for SKYRIZI so to speak. So those are just really, really powerful messages to the physicians who write this medication. I would say there's other things around the maybe the new oral competitors you highlighted. Look, the launch is quite early.

35:28 The way that we look at this is certainly we're able to communicate that it's not an oral SKYRIZI. The efficacy parameters are quite a bit lower when you match all the controls, you understand the populations, which our medical teams and our commercial teams are able to highlight. Certainly PSA is a huge market value driver and there's not a lot of evidence there. There's also some complexities really just even around an oral and the adherence there and we have some data and evidence on the orals in the category as well. So we're well prepared for this dynamic. So we think that we can navigate this competitor quite well. And we may see in fact, we saw it with Otezla over a decade ago that there's going to be some market expansion as well. So again, the teams are prepared. We're very confident and hopefully that gives you a little bit flavor of the dynamics in the market. And David, this is Rob. What I would add is, I mean, we obviously contemplate competition when we provide guidance. We've obviously now once again taken up the guidance for SKYRIZI, continue to see upside to consensus forecast for SKYRIZI going out every year and growing each year. And so we have a tremendous amount of confidence.

36:40 We are well aware of the competition that's coming in. We factor that in and you can see the asset continues to perform exceptionally well. Thanks, David. Operator, next question please. Next, we'll go to Chris Schott from JPMorgan. Please go ahead. Great. Thanks so much for the questions. Just first one for me is on the SKYRIZI alpha-four beta-seven program. Can you just comment a little bit on what dosing looks like for this combo and where you see this fitting into competitive landscape? So is this kind of a second line drug post SKYRIZI or something that could eventually actually get to frontline? And the second question is just maybe building on that and looking at kind of the broader I and I competitive landscape. It does seem like there's significant development across the space, I think the Street is increasingly concerned about this means relative to your portfolio.

37:25 So can you just kind of address your ability like how you think about sustaining the competitive position you have in I and I? How important the SKYRIZI combo is? Your ability, again, freedom to operate with BD and I and I? Just help us a little bit in terms of how you're envisioning that playing out over time. Thank you. Yeah, thanks Chris. It's RuPaul. I'll start. The dosing, I would say SKYRIZI, you know the dose, it's already in label. So the other assets, three eighty two, the alpha-four beta-seven and the TL1A, the goal there is to optimize those. So in fact, while we start gearing up for a phase three study, we have a phase 2B plan. We had pre planned that ahead of time.

38:16 And in this quick interim look that we have had, we've already observed a non flat slope, so meaning an exposure correlation with 3A2, meaning patients with higher exposures did better. So what we'll do, in the phase 2B is in fact study a higher dose of three eighty two in combination with SKYRIZI. So there's a potential that the efficacy could go even higher. The goal with this one will be, likely monthly dosing. Co formulation work is ongoing. And, while we're finishing that work, we'll also be speaking with regulators and there's a potential to further accelerate. I don't think we need to wait for the phase 2B to be totally finished If we see something while we're conducting the trial, we can pivot relatively quickly.

39:19 We would anticipate starting, I would say roughly where we sit today, in about two years in the phase three or even sooner. And the team will be looking ways to accelerate. And as I stated, the TL1A will be added into, this platform as well, and we'll be studying ulcerative colitis along with Crohn's. So, as you think about IBD and competitive dynamics, what you see, coming from AbbVie is next generational therapies and really raising the bar on efficacy. As we stated on the endpoint, in my opening remarks, we doubled, the endoscopic data, and that's really what's most critical. It's the most objective, and that's what clinicians are looking for. So as we look to the future, you see that, what we're doing, we see other competitors coming, entering, but we see these as monotherapies and even the phase two data observed to date, regardless of mechanism, the data do not differentiate from where we sit today with RINVOQ and SKYRIZI.

40:34 So the goal here for the whole portfolio that we've spoken about is to raise that standard of care meaningfully higher, and again, RINVOQ and SKYRIZI do that very well today, even against emerging competition. And the data that I speak about are battle tested phase three data in very difficult to treat populations. That's gonna hold for the near term and we have not seen a competitor that can beat that other than us with our own combinations. And we have, more to come. So that's, I think, the way to think about how we think about immunology. And Chris, this is Rob. I'll just add to Rupal's comments. The way we've been thinking about business development over the last couple of years is to support that strategy. So you've seen us add through business development new mechanisms, TL1A, IRAK4, TREM1 as we think about this combination approach.

41:29 We acquired Nimble to give us the oral peptides capabilities. So that's obviously plays an important role in the future of immunology. And then I'd say the one that doesn't get enough attention is the Capstan acquisition with the B cell depletion approach with the in vivo CAR T platform. As we think about the future of immunology, now we're thinking about growth beyond SKYRIZI and RINVOQ, we certainly see a trend there. And so we've been very active with business development over the last couple of years to add depth to our immunology pipeline so that we can continue to remain ahead of the competition. And we have a tremendous amount of confidence given our long term experience here. We obviously have, we're a commercial powerhouse, but I'd say our R and D organization understands this space very well. And I think we've positioned ourselves for long term growth. Thanks, Chris. Operator, next question please.

42:15 Next we'll go to Mohit Bansal from Wells Fargo. Please go ahead. Great, thank you very much for taking my question. Just want to double click on the IRAK4 that you are developing in RA. So rheumatoid arthritis is a space where, you know, after Humira, there's not a lot of options which are safe as well. So like what gives you excitement about IRAK4 compared to what is out there in the world in terms of therapies which are being tested in rheumatoid arthritis, because everyone is trying to become a ring work without the box warning here? Thank you. Thanks, Mohit. It's Rupal. We have very early data. This is a partnership with Creaturna, and we saw some data, clinical data, in China in a small study, and what we observed there was biologic like efficacy, so something like existing therapies including the anti TNF class.

43:20 And what we saw preliminarily in that data, similar to our combo data in IBD, a relationship with PK and response rates. So, we have the opportunity here to do this phase 2b study to see if we can push efficacy even higher and what we like about that is it's another oral and potentially the safety profile as it's played out to date, we don't anticipate a boxed warning. So that would be a differentiator versus the anti TNF class and the JAK inhibitor class. So that's what gets us excited about this particular molecule, Mohit. Thank you. Thanks, Mohit. Operator, next question please.

44:07 Next we'll go to Louise Chen from Scotiabank. Please go ahead. Hi, congratulations on the quarter and thanks for taking my questions here. I wanted to ask you first if you could provide more color on your opportunities for an extended half life IL-twenty three and also your oral peptide IL-twenty three and do you still plan to enter the clinic with those this year? And then just on your combos, just curious if you plan to look at those for first line or save those for more refractory patients? Thank you. Hi, thanks, it's Rupl. So yes, we do have, it's called ABBV-five forty seven, which you'll hear more about, and that is our asset based on all of our experience with SKYRIZI and IL-twenty three inhibition.

44:57 And this is what we'd like to advance, and this would be a longer And acting to your point, the dosing has already initiated. Along those lines, we also anticipate dosing our long acting IL-twenty three TL1A bispecific antibody and the nimble anti IL-twenty three asset. Both of those will be first in human this year. The goals of those are to, at least for the long acting, is to be slightly longer acting than SKYRIZI, but not too much, longer acting. And the reason, for that is, I should state, is that when we take all these factors, given that SKYRIZI is already available as quarterly, and that is very, very convenient and the data are all very compelling when you look, to the maintenance data. I know we've seen some short term data, but when you look at SKYRIZI, and this extends well beyond week 16, we've demonstrated PASI 100 responses of approximately sixty percent, PASI 90 responses exceeding eighty percent, and that's already happening with quarterly dosing.

46:17 And what I would say, there is similar to what Jeff had stated, we also are focused on all of our assets on difficult to treat manifestations. That includes palmar plantar, genitals, scalp, psoriasis that Jeff has mentioned. Now, the other important fact here, and why I said the long term duration is important, is that thirty percent or so of patients with psoriasis will go on to develop psoriatic arthritis. And again, that's why durability and long term data are very important. Now, the reason I made the comment on the half life of where we want it to be, we want to offer choices in the future.

47:02 And that will matter, I would say, to most of our clinicians who want to individualize the therapy, For example, on this longer half life, if an infection, for example, were to occur or there's a tolerability issue and you have a very, very long half life biologic, the prolonged pharmacologic persistence could limit the ability to rapidly discontinue a therapy, and also, you could have clinical scenarios that may necessitate switching therapies prior to a full washout, and if you have overlapping mechanisms of actions, that could pose challenges. So we are targeting two or two and a half times of where SKYRIZI is today and that would create another option.

47:49 And that would be, along with the, oral that I said, would also be focused on a slightly longer half life on that one than what we see today for orals because what we know, and Jeff pointed this out, the adherence, matters with orals. We see it with RINVOQ, but we have very potent efficacy. For the oral, from NIMBLE, we would like to see higher potency and a longer half life in case someone slips up and misses a dose. So that's how these, are being developed, and as you stated, they're both in the clinic this year, so we anticipate data, hopefully by next year, if not sooner.

48:34 And then, I apologize, I think I had the combo question on how we're positioning this. Well, the data that we have today were in an all comers population and you see particularly refractory, and when we've seen that with SKYRIZI and RINVOQ and you pivot to a naive population, efficacy getting higher. So we are not gonna restrict at all, how we would study patients because it's important to clear second line and third line and even come after SKYRIZI. In fact, we had SKYRIZI patients in the study. We had Vetelizumab patients in the study. We had RINVOQ patients in the study. That's an important market because second and third line continue to evolve and grow. But in IBD, the frontline is also important.

49:25 Many of our clinicians want to tackle the inflammation right away in the best possible way they can because with gut inflammation, you can run into problems that results in hospitalizations, stricturing, and irreversible damage that can result in surgeries. So nobody wants that. So if you have the best therapy, we believe there's many clinicians that will want to use that early on in the course and not hold out. So we're very excited about the data that we've observed because we see that high level of efficacy in this interim analysis across different lines of therapy in IBD. Thanks, Louise. Operator, next question please.

50:10 Next we'll go to Terence Flynn from Morgan Stanley. Please go ahead. Great, thanks so much for the question. Rob, I was just hoping you could elaborate on your thoughts on M and A. Obviously, it's been a very active year so far across the space, seeing companies lean in really at that kind of 5,000,000,000 to $10,000,000,000 deal size. You mentioned comments on immunology and some of the work you guys have done on the early stage side. But do you see a need here to maybe be more aggressive and also push in to other areas quicker than what you're currently doing? Would just love your broad high level thoughts there. Thank you. Thanks, Terrence. It's Rob. So I'll take that question. So yes, we have been and continue to be very open to acquiring external innovation, really with a major focus for us in immunology, neuroscience, oncology, and obesity.

51:04 And to the extent we see a differentiated asset in any of these areas, whether early stage, late stage or even on market, we are very willing to pursue it. I mean, today, we have an on market portfolio and an emerging pipeline that gives us a clear line of sight to very strong growth into 2030. So we are operating from a position of strength and we have ample financial capacities. If you think about the last two years, we have added significant depth to our pipeline, including deals with Capstan, as I mentioned earlier, Gilgamesh, IGI, Remagen, 8Rx and Gubra to name a few. I see each of these opportunities as an opportunity to really drive growth in the next decade and beyond. But that said, while we don't need BD to deliver top tier growth this decade, we're not opposed to near term revenue drivers that are differentiated in our core areas of focus.

51:56 Thanks, Terrence. Operator, next question please. Next we'll go to Trung Nguyen from RBC Capital Markets. Please go ahead. Hi guys, thanks for taking my questions. Just two on SKYRIZI please. So, first one is when I look at the 1Q SKYRIZI sales, you look at it versus the IQVIA scripts, looks like net pricing is flat, so slightly better than that low single digit erosion you guided. I guess, first, can you clarify if there were any one off items in 1Q for SKYRIZI or is that discrepancy from IBD and IV induction? And then how should we think about that pricing step down through the year if you are on track for low single digit decline? And then just following on RINVOQ's successful exclusivity extension to 2037, what's your confidence in extending SKYRIZI's LOE?

52:50 Is there any timelines you have there or any timelines you have for potential biosimilar settlements? Thank you. This is Scott. I'll take your first question regarding SKYRIZI pricing. You were correct. In the first quarter SKYRIZI pricing was relatively flat. That was really just a comparison issue on a year over year basis and the quarter gating, if you will. On a full year basis, we continue Please stand by. The conference will begin again

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