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About Abbvie Inc.

AbbVie is vying for dominance in the world of medications. The firm develops and commercializes biopharmaceutical and small molecule drugs, with a focus on immunology, oncology, virology, and neuroscience. Its primary product is Humira, best known as a rheumatoid arthritis drug; it accounts for some 60% of sales and is the world's top-selling prescription drug. Other key products include cancer treatment Imbruvica and hepatitis C drug Mavyret. Products are sold globally, but the US is AbbVie's largest market. With the pending expiration of Humira's patent protection, AbbVie is looking for the next big thing. The company tie-up with Allergan for $63 billion in 2019. The US generates about 70% of total sales.

Operations

AbbVie focuses on treating conditions such as chronic autoimmune diseases (including rheumatoid arthritis, psoriasis, and Crohn's disease), cancers, and viral conditions (including hepatitis C and HIV). It also has products that address metabolic or hormonal conditions, endocrinology ailments, and neurological disorders (including Parkinson's disease).

Top product Humira is a biologic therapy that treats several autoimmune conditions and generates nearly $20 billion in sales, or about 60% of total revenue. Leukemia and lymphoma drug Imbruvica accounts for 15% of sales, and hepatitis C medication Mavyret each account for 10% of sales. Other major offerings include Creon (enzyme insufficiency), Lupron (endometriosis), Synthroid (hyperthyroidism), and Synagis (respiratory syncytial virus).

The company has a pipeline of medications in clinical development that covers such areas as oncology, neurology, immunology, cystic fibrosis, and women's health. It has a number of partnerships with other pharma firms to develop new treatments, including Alector (Alzheimer's disease), and Calico Life Sciences (age-related diseases).

Geographic Reach

AbbVie collects about 70% of sales from the US. Key foreign markets include Japan, Germany, Canada and France.

The Chicago-based company has six primary manufacturing facilities in the US (in Illinois, Puerto Rico, Massachusetts, and Michigan) and five key international plants (in Italy, Ireland, Germany, Singapore). It operates seven US R&D facilities in Illinois, California, and Massachusetts, as well as one R&D center in Germany.

Sales and Marketing

AbbVie uses a combination of direct and third-party resources to market and sell its products worldwide. In the US, AbbVie markets directly to physicians, consumers, managed care providers, insurers, pharmacy benefit managers (PBMs), hospitals, and government agencies (including the US Department of Veterans Affairs and the Department of Defense). Products are primarily distributed through independent wholesalers; some sales are made directly to pharmacies and patients. Internationally, AbbVie principally markets to payers, physicians, and regulatory bodies and sells products directly and through distributors.

Three wholesale distributors — McKesson, Cardinal Health, and AmerisourceBergen —account for nearly all of US sales. No individual wholesaler accounted for greater than 40% of AbbVie's 2019 gross revenues in the US. Its products are

generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. AbbVie's advertising expenses were $1.1 billion in 2019, $1.1 billion in 2018 and $846 million in 2017, respectively.

Financial Performance

AbbVie has seen steady revenue growth the last five years. For this period, revenue posted a 46% increase since 2015. Except in 2017 when net income showed a 11% drop, earnings generally enjoyed upward trend.

In 2019, revenue grew 2% to $33.3 billion primarily driven by revenue growth related to IMBRUVICA and VENCLEXTA as well as the continued strength of HUMIRA in the U.S. and newly launched immunology assets SKYRIZI and RINVOQ, offset by international HUMIRA biosimilar competition.

Net income rose 39% in 2019 to $7.9 billion, primarily due to reduced operating costs and expenses.

AbbVie ended 2019 with $40 billion in cash, an increase of $32.6 billion from 2019. Operating activities contributed $13.3 billion, while investing activities provided another $596 million (primarily from sales and maturities of investment securities), and financing activities also contributed $18.7 billion mostly proceeds from issuance of long-term debt.

Strategy

AbbVie may pursue acquisitions, technology licensing arrangements, and strategic alliances, or dispose of some of its assets, as part of its business strategy.

The company intends to continue to advance its mission in a number of ways, including: (i) growing revenues by diversifying revenue streams, ensuring strong commercial execution of new product launches and driving late-stage pipeline assets to the market; (ii) continuing to invest and expand its pipeline in support of opportunities in immunology, oncology and neuroscience, with additional targeted investment in cystic fibrosis and women's health as well as continued investment in key on-market products; (iii) expanding operating margins; and (iv) returning cash to shareholders via a strong and growing dividend while also reducing incremental debt.

For 2020, AbbVie expects to achieve its strategic objectives through: Completion and successful integration of the proposed Allergan acquisition; Hematologic oncology revenue growth from both IMBRUVICA and VENCLEXTA; Immunology revenue growth driven by successful commercial launches of SKYRIZI and RINVOQ, as well as HUMIRA U.S. sales growth; Effective management of HUMIRA international biosimilar erosion; and the favorable impact of pipeline products and indications recently approved or currently under regulatory review where approval is expected in 2020.

Mergers and Acquisitions

In early 2020, AbbVie tied-up with a fellow drugmaker Allergan for $63 billion. The purchase will boost the company's revenue as it looks for a Humira replacement. Allergan will add new product lines including beauty medications (such as Botox) and eye care treatments (such as Restasis), as well as offerings that compliment AbbVie's offerings in neurology, digestive diseases, women's health, and other fields.

Company Background

Biopharmaceutical research company AbbVie was formed in 2012 by former parent Abbott Labs, which spun off AbbVie into a separate publicly-traded company in 2013. As the company faced the patent expirations of many of its top sellers in the following years (including Aluvia, TriCor, Niaspan, and Humira), it focused on expanding its R&D operations.

After a failed attempt to purchase Irish rare-disease medication manufacturer Shire for $54 billion in 2014, AbbVie instead pumped up its oncology pipeline by acquiring Pharmacyclics for $20.8 billion in 2015 and Stemcentrx for $5.8 billion in 2016.

Abbvie Inc.

1 N Waukegan Rd
North Chicago, IL 60064-1802
Phone: 1 (847) 932-7900

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: ABBV
Stock Exchange: , NYSE
EVP and CFO: William J. Chase
Chairman and CEO: Richard A. Gonzalez
SVP Operations: Azita Saleki-Gerhardt
Employees (This Location): 277
Employees (All Locations): 30,000

Major Office Locations

North Chicago, IL

Other Locations

North Chicago, IL
Vernon Hills, IL
Waukegan, IL
Worcester, MA
Wyandotte, MI
Barceloneta, PR
Roma, Italy
Rovereto, Italy
La Madeleine De Nonancourt, France
Bruxelles, Belgium