Pharmaceuticals company AbbVie (NYSE: ) reported its Q4 and full year financial results for 2023 this afternoon.The American medical R&D powerhouse had some setbacks in the year, including disappointing profits from their drug Humira, which lost significant market share to generic knockoffs in both the US and abroad in 2023.
Full year resultsThe company reported net revenues of $54.318 billion, 6.4 percent less YoY than 2022, and diluted EPS of $2.72 for the full year on a GAAP basis, a staggering decrease of 59 Percent, and an adjusted diluted EPS of $11.11 for the year.Probably the most devastating blow for the company was that global net revenues from the immunology portfolio were down 9.6 percent to $26.13 billion, due to Humira biosimilar competition.Its oncology and aesthetics businesses were down too, ten percent and 0.8 percent respectively, after performing well in the previous year and quarters.
Q4 resultsUnfortunately, Q4 didn’t fare much better. Fourth quarter revenues were at $14.3 billion, down 5.4 percent, while its diluted EPS was a mere $0.46, representing a decrease of 66 percent.AbbVie’s revenues from the immunology portfolio for Q4 were $6.95 billion, a decrease of 12.3 percent and its previously well-performing oncology arm had its revenues drop by 7.4 percent also.
In comparison: Q3 resultsThis was an improvement on the company’s previous results. In October 2023, for Q3, the company reported net revenues were $13.927 billion, a decrease of 6 percent. Net revenues from the immunology portfolio (including Humira) totalled $6.783 billion, a decrease of 11.3 percent.Its Q3 diluted EPS was $1.00 on a GAAP Basis, representing a disappointing 55 percent decrease YoY. However, both its oncology and neuroscience portfolios increased by more than 20 percent each.For Q3, the company’s selling, general, and administrative (SG&A) expenses were 24.2 percent of net revenues. The adjusted SG&A expense was 23.9 percent of net revenues. On a GAAP basis, AbbVie’s operating margin in the third quarter was 16.4 percent and the adjusted operating margin was 46.7 percent.
In line with expectationsThis was in line with expectations from the markets, which expected a drop in both earnings and EPS for the company, both in Q4 and year-on-year (YoY) in 2023.Broadly speaking, most analysts seemed to be expecting the company to report revenues around $13 to $14 billion for Q4 and an EPS significantly lower than Q3. However, it is worth mentioning that AbbVie frequently gives better-than-expected EPS, with Q3’s EPS of $2.95 roughly 10c higher than markets were expecting.
Notable developmentsAbbVie ended off the 2023 year with a bang, announcing on December 6th that it was acquiring biotechnology and pharmaceutical company Cerevel for $8.7 billion in order to strengthen its neuroscience offering.Almost immediately afterward, it then announced it would also be acquiring ImmunoGen for more than $10 billion as its latest acquisition in the spending spree that was 2023 for AbbVie.
It’s not over yetInvestors in AbbVie may need to play the long game if they want to see a turnaround from the company. The company’s CEO and chairman Richard Gonzalez had this to say at the release of the results:
2023 was another outstanding year, marked by strong operational execution and significant overperformance from our non-Humira growth platform. During the year we meaningfully increased R&D investment and bolstered our pipeline with the proposed ImmunoGen and Cerevel Therapeutics acquisitions,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. “2024 is an exciting year for AbbVie, as we are well positioned to fully absorb Humira erosion and achieve modest operational revenue growth, followed by a return to robust growth in 2025 and a high single-digit CAGR through the end of the decade.”
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