AbbVie Earnings Call Insights: 2014 Filing Timeframe and Humira Sales

AbbVie Inc (NYSE:ABBV) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

2014 Filing Timeframe

Jami Rubin – Goldman Sachs: A couple questions for you, Scott – you’re on the phone, right; are you there Scott Brun?

Scott Brun – VP, Pharmaceutical Development: Yes. Hi, Jami.

Jami Rubin – Goldman Sachs: Okay, great. So, a couple of pipeline-related questions. Based on your now 2Q 2014 filing timeframe for your all-oral hep C regimen, can you confirm that you are now neck-and-neck with Gilead in this horserace of bringing the all-oral regimen to the market? And really most importantly, if you could help us to think about what the trajectory might look like, because clearly, initially, I think people think there’s a lot of low-hanging fruit and how are you and Gilead going to compete in the marketplace? I also think the market assumes that they’re going to get the lion’s share of the market. And then secondly, on ABT-199, the potential registrational trial, can you tell us if the FDA does accept that filing what is the timeframe for bringing ABT-199 to the market? And now since Pharmacyclics, J&J have already filed CLL indication, how do you see that marketplace shaking up; it seems that it’s getting somewhat crowded?

Scott Brun – VP, Pharmaceutical Development: Yeah, sure thing, Jami. Why don’t I go ahead with the timing and such on the HCV and then I’ll (allow) Rick to talk a little bit about the market potential. So, as you said, we’re on track for a second quarter ’14 filing. Acknowledging it’s a very tight race, we’re feeling very, very good about our position. We’re very pleased with the progress on the program and certainly it is a top priority for us to be able to move as quickly as possible on the filing. But things are going extremely well in that regard.

Richard A. Gonzalez – Chairman and CEO: Jami, this is Rick. As far as the market launch, I mean, obviously we’re planning that these two products will launch very close to one another and we do agree there will be a fair amount of pent-up demand, so we’re certainly building up all of the assets we need to be in a position to be able to have an aggressive launch and feel good about our ability to be able to compete effectively in this market. Want to go back to the 199 question?

Scott Brun – VP, Pharmaceutical Development: Yes, sure. So with regard to 199, yes, we’ve just started a large trial looking at ABT-199 as a single agent in the treatment of relapsed/refractory CLL patients who have the 17p deletion mutation, which is certainly traditionally a very hard population to treat. Indeed, if this trial is acceptable as a registration trial, this could allow us to commercialize ABT-199 in the 2016 timeframe. Now Jami, as you said, certainly there’s a lot of activity going on with regard to development in the CLL space. We feel that with the exquisite activity of ABT-199, its ability to rapidly reduce tumor burden, it really provides us a number of opportunities to really transform the way this disease is treated, looking at different paradigms in terms of raising the bar on response with measures such as minimal residual disease where you’re clearing the body of tumor to a greater extent than we see with traditional response endpoints; and also having the potential to perhaps move away from chronic therapy into more limited-duration, and bringing the concept of remission into CLL.


Humira Sales

Gregory Gilbert – Bank of America Merrill Lynch: Just a couple. Hoping you could quantify that modest tender timing effect on HUMIRA sales. Secondly, sort of a bigger picture question on long-term growth for HUMIRA. As biosimilar versions of products that will compete with HUMIRA become available around the world, curious on your view as to whether we will see more or less therapeutic substitution relative to what we’ve seen in the small molecule world. Then I have one follow-up.

William J. Chase – EVP and CFO: So Greg, it’s Bill Chase. The tender effect internationally was about 4%. So if you normalized for that, ex-U.S. growth would have been about 14%.

Gregory Gilbert – Bank of America Merrill Lynch: Thanks.

Richard A. Gonzalez – Chairman and CEO: Greg, this is Rick. On the therapeutic substitution, certainly as we’ve said all along, we don’t believe that in the area of biologics we’ll see therapeutic substitution that’s similar to oral solids – that’s for sure. We still believe that based on the safety track record of a product like HUMIRA, the broad indications and all the other attributes of that product that we would see certainly more modest kinds of erosions compared to anything that you’d see in (real) solid deals…

Gregory Gilbert – Bank of America Merrill Lynch: So safe to say you don’t expect biosimilar versions of other products to create a negative growth scenario for HUMIRA, even if the HUMIRA biosimilar is years off?

Richard A. Gonzalez – Chairman and CEO: Yeah, I don’t believe it will have a dramatic impact on HUMIRA as an indirect biosimilar competitor.

Scott Brun – VP, Pharmaceutical Development: Especially if it’s a biosimilar to REMICADE, for instance, which is an infused product relative to an injectable. So, we’d think that anything in that space would not have an impact on injectables like HUMIRA and/or ENBREL.

Gregory Gilbert – Bank of America Merrill Lynch: Lastly, it’s a question on the testosterone market. You’re obviously big there and maybe for some time depending on what you’d on biz dev and lifecycle management; what’s going on in that marketplace other than jockeying for contracting positions – formulary positions? What’s up with the growth rate there and what can you get that turned around?

William J. Chase – EVP and CFO: So, the growth rate is – its Bill Chase again. The growth rate has definitely slowed down versus what we saw last year. The growth in the market year-to-date through May is around 9%. We are seeing some account losses due to competitive pricing, but that said, we’re maintaining over 60% share. There’s a fair amount of churn in the market. We still think AndroGel is a very, very important brand and we’re confident that the sales will remain flat through the year.

Scott Brun – VP, Pharmaceutical Development: The 1.62% version of the product now accounts for about two-thirds of the overall AndroGel franchise as well.