Good morning and thank you for standing by. Welcome to the AbbVie Q2 2013 Earnings Conference Call. (Operator instructions.) This call is being recorded by AbbVie. With the exception of any participants’ questions asked during the question-and-answer session the entire call including the question-and-answer session is material copyrighted by AbbVie. It cannot be recorded or rebroadcast without AbbVie’s express written permission. I would now like to introduce Mr. Larry Peepo, Vice President of Investor Relations.

Good morning and thanks for joining us. Also on the call with me today is Rick Gonzalez, Chairman of the Board and Chief Executive Officer, and Bill Chase, Executive Vice President of Finance and Chief Financial Officer. Joining us for the question-and-answer portion of the call are Laura Schumacher, Executive Vice President of Business Development, External Affairs and General Counsel; and Scott Brun, Vice President of Clinical Development. Today Rick will discuss AbbVie’s results for Q2 as well as highlights from our commercial portfolio and pipeline. Following Rick’s comments, Bill will give a more detailed review of our Q2 performance and then provide an overview of our outlook for 2013 and Q3. Following our comments we’ll take your questions. Before we get started I remind you that some statements we make today may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about the factors that may affect AbbVie’s operations is included in our 2012 Annual Report on Form 10(k) and in our other SEC filings. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments except as required by law. On today’s conference call as in the past non-GAAP financial measures will be used to help investors understand AbbVie’s ongoing 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 at www.abbvieinvestor.com. So with that I’ll now turn the call over to Rick.

Thank you, Larry. Good morning and thank you for joining us today. We’re pleased to report strong Q2 results with adjusted earnings per share of $0.82, exceeding our guidance range for the quarter. This included strong operational sales growth of more than 5% ahead of our outlook for the quarter and adjusted gross margin ratios of more than 80%. We delivered this performance with strong and balanced growth across our product portfolio despite the impact of generic competition. And today we raised our full-year EPS guidance for 2013, reflecting continued momentum from HUMIRA and better than expected results from our other pipeline products including our lipid franchise. We’re now seven months into our first year as an independent company and we continue to make good progress executing our key business priorities including maximizing HUMIRA’s full growth potential and advancing our pipeline. Our Q2 performance was led by HUMIRA which drove nearly 13% global operational growth. We continue to see strong underlying demand globally with particularly robust growth in dermatology and GI categories. As we’ve said previously there are several factors we expect will continue to drive momentum, including increased biologic penetration rates, further geographic expansion, and new indications. HUMIRA offers the broadest label in the category. Our expanding list of uses includes nine approved indications in Europe and seven in the US, and we have several indications currently in late-stage trials. All told we expect new indications including those approved in 2012 to add roughly $1.5 billion in incremental global (inaudible) sales. HUMIRA’s utility and label supporting use across the broadest spectrum of autoimmune conditions is one of the many attributes that sets it apart from other products in this category. As we track new competitive entrants, performance continues to be in line with our expectations with HUMIRA continuing to…

Thank you, Rick. Today I’ll spend some time talking about our Q2 performance as well as our outlook for the remainder of 2013. As Rick said, we feel very good about the strong quarter and year-to-date performance we delivered. Q2 adjusted earnings per share, excluding non-cash intangible amortization expense and specified items were $0.82, exceeding our previous guidance range. On a GAAP basis earnings per share were $0.66. Total sales in the quarter increased 5.1% on an operational basis which excluded an unfavorable 0.7% impact from foreign exchange. Excluding TriCor and Trilipix which are experiencing a loss of exclusivity, total sales increased 10.3% on an operational basis. Growth in the quarter was driven by HUMIRA which had global sales of more than $2.6 billion, up nearly 13% on an operational basis. In the US HUMIRA sales increased 16% driven by continued market expansion and share gains in dermatology and gastroenterology. We’ve been particularly impressed with HUMIRA’s performance in the gastro segment following our strong UC launch where we’ve already gained significant share globally. Internationally HUMIRA sales grew 10.1% on an operational basis. As expected we saw a modest negative impact from tender timing in some markets, particularly Brazil. Looking ahead to Q3 we expect global HUMIRA sales to grow in line with our updated full-year outlook of 14% to 15%. AndroGel sales were $258 million in the quarter, down 6.5% versus the prior year. AndroGel continues to maintain a roughly 60% share of the testosterone replacement market. Sales this quarter reflect the year-over-year impact of rebating actions implemented in mid-2012 and certain account losses. We are now forecasting full-year AndroGel sales to be roughly flat versus 2012 levels. Moving on to our lipid franchise we saw stronger than expected performance in Q2, particularly with Niaspan and Trilipix. US sales of…

Thanks, Bill. We’ll now open the call up for questions. Elan, we’ll take our first question.

Thank you. (Operator instructions.) And our first question today is from Jami Rubin with Goldman Sachs. Jami Rubin – Goldman Sachs: A couple questions for you, Scott – are you there Scott Brun? Great. Okay, so a couple pipeline-related questions. Based on your now Q2 2014 filing timeframe for your all oral Hep C regiment, can you confirm that you are now neck-and-neck with Gilead in this horserace of bringing the all oral regiment 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 Pharamacyclics’ Exchange A have already filed CLL indication how do you see that marketplace shaking up? It seems that it’s getting somewhat crowded. Thanks a lot.

Sure thing, Jami. Why don’t I go ahead with the timing and such on the HCV and then I’ll get Rick to talk a little bit about the market potential. So you know, as you said we’re on track for a Q2 ’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.

Jami, this is Rick. As far as the market launch 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. You want to go back to the 199 question?

Yeah, sure. So with regard to 199, yes – we just started a large trial looking at ABT-199 as an agent in the treatment of relapsed refractory CLL in 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 that 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 are clearing the body of tumor to a greater extent than we see with traditional response endpoints; and also looking at the potential to perhaps move away from chronic therapy into more limited-duration and bringing the concept of remission into CLL. Jami Rubin – Goldman Sachs: Thank you.

Thank you. Our next question is from Greg Gilbert with Bank of America Merrill Lynch. Greg Gilbert – Bank of America Merrill Lynch: Thanks, good morning, just a couple. I’m hoping you can quantify that modest tender timing effect on HUMIRA sales. Secondly, sort of a bigger picture question on long-term growth for HUMIRA: as bio-similar versions of products that will compete with HUMIRA become available around the world I’m 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. And then I have one follow-up.

So Greg, it’s Bill Chase. The tender effect internationally was about 4%, so if you normalized for that ex-US growth would have been about 14%. Greg Gilbert – Bank of America Merrill Lynch: Thanks.

Greg, this is Rick. On the therapeutic substitution, I mean 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. And 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 oral solid deals. Greg Gilbert – Bank of America Merrill Lynch: So safe to say you don’t expect bio-similar versions of other products to create a negative growth scenario for HUMIRA, even if the HUMIRA bio-similar is years off?

Yeah, I don’t believe it will have a dramatic impact on HUMIRA as an indirect bio-similar competitor.

Especially if it’s a bio-similar to Remicade for instance which is an infused product relative to an injectable. So we think that anything in that space would not have an impact on injectables like HUMIRA and/or Enbrel. Greg Gilbert – Bank of America Merrill Lynch: And last is a question on the testosterone market – you’re obviously big there and may be for some time depending on what you do on biz dev and lifecycle management. What’s going on in that marketplace other than jockeying for contracting positions, formulator positions? What’s up with the growth rate there and when can you get that turned around? Thanks.

This is 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.

You know, the 1.62% version of the product now accounts for about two thirds of the overall AndroGel franchise as well. Greg Gilbert – Bank of America Merrill Lynch: Thanks guys.

Thank you. Our next question is from David Risinger of Morgan Stanley. David Risinger – Morgan Stanley: Yes, thanks very much. I have a couple questions. First, in terms of our model the international HUMIRA sales were slightly above, the US were slightly below. I’m just hoping that you could provide a little bit more color on the US performance of up 16% year-over-year. Was there any stocking or destocking in the year-ago quarter or in this quarter? And how should we think about second half US sales growth for HUMIRA? And then my second question is with respect to Duodopa, could you just update us on the potential approval timing and whether to expect a panel? Thanks very much.

So David, this is Bill Chase. On HUMIRA I think the clearest thing to look at is the scrip trends which in the quarter were about 10% to 11% up in HUMIRA. We obviously did have an impact of price, so when you add it up that 16% was impacted somewhat by some channel changes in the quarter. We’re very, very pleased with that growth and we’re seeing no slowdown whatsoever in the United States. For the full year we expect growth to be in the mid-single digits, roughly split between price and volume in the US and things are going very, very well.

Did you say mid-single digits?

Well, the outlook for HUMIRA globally is 14% to 15% this year, and as Bill said in his remarks in Q3 we also expect global growth to be in the 14% to 15%. But US specifically, David, there really shouldn’t be a whole lot of deviation from scrips plus price. And as Bill mentioned there’s obviously always a little bit of puts and takes with the channel as well.

And David, the US growth was mid-double digits, not mid-single. I’m sorry. David Risinger – Morgan Stanley: Got it.

Made you a little nervous for a second, huh?

Sorry about that.

And David, hi, it’s Scott Brun – I can take the Duodopa question. So as you know with Duodopa we’ve got a somewhat unique drug device combination system. Consequently we did have some data formatting questions of an administrative nature from FDA. We worked through those, addressed them. The NDA is filed. We’re on a 2014 timeline. Right now we don’t have any sense that there is going to be a panel but certainly as the review progresses we’ll be able to update you on that front. David Risinger – Morgan Stanley: And in terms of the 2014 timeline any more clarity – first half, second half?

I think we can go ahead and say first half on that. David Risinger – Morgan Stanley: Thank you.

Thank you. Our next question is from Steve Scala of Cowen. Steve Scala – Cowen and Co.: Thank you. I have two questions on HUMIRA. You mentioned that the company has identified opportunities to further penetrate existing markets. I’m wondering if you would elaborate and quantify the magnitude of those opportunities. And secondly AbbVie has previously said that HUMIRA has a patent portfolio including over 250 granted or pending patents. Are there any patents in that estate that if investors knew their full nature and content then investors would have a substantially different view of the duration and potential of the franchise beyond 2016 and ’18? So I’m not asking for you to identify the intellectual property or tell us what it is but since you know what it is I’m just wondering whether we would have a very different view if we were aware of that data. Thank you.

Okay, this is Rick, Steve. So first on the penetration, we’ve talked extensively about these markets still are penetrated at relatively modest levels. So a lot of our activity that is really driving the growth of HUMIRA across most indications is driven to a great extent by increased penetration and new indications. So I don’t know that I can quantify it for you much more than that but I’d say it’s a substantial part of what we do see in growth as well as in certain markets we’re seeing some additional market share. As far as the patents are concerned, obviously that’s a highly sensitive issue for us from a competitive standpoint. So I wouldn’t give you any more color other than to say obviously we’re looking at our patent estate in a very appropriate and aggressive way and we will ensure that no one violates those patents. And I’m probably not willing to give you much more color than that. Steve Scala – Cowen and Co.: Thank you.

Thank you. Our next question is from Jeff Holford from Jefferies. Jeff Holford – Jefferies & Company: Good morning, thanks for taking my questions. So just first of all on HUMIRA, following the [Axio SPA] panel do you have any different view coming out of that on what the potential [bold form] indication, revenue potential is for HUMIRA? Just secondly do you have in mind based on what you know about Phase III readouts of when you would actually present your Phase III registration set of data for Hep C? Would we expect EASL next year to be the most likely venue for that? Thank you.

Why don’t you cover HCV first?

Hi Jeff, Scott Brun. Why don’t I go ahead and take the HCV first. So yeah, certainly – it is our plan to have some significant data disclosures of the Phase III Program at EASL for next year. Certainly our full data disclosure plan is still in the works.

And then Jeff, on [Axio SPA] is a relatively modest opportunity from our perspective in the US. We’d still like to get a label claim going forward but it’s something less than $100 million. Really the big opportunity for [Axio SPA] is in Europe where it’s already approved, and so it doesn’t have any kind of significant magnitude of impact on the overall growth of HUMIRA. Jeff Holford – Jefferies & Company: Thanks very much.

Thanks, Jeff.

Thank you. Our next question is from Chris Shad from JPMC. Chris Shad – JPMC : Great, thanks very much, just two questions here. First on ABT-126, can you talk a little bit about the doses you’re looking at in the Phase II-b relative to the data that was presented a few weeks ago? And then secondly on that product, it seems like the use here most likely might be in combination with Aricept in Alzheimer’s. Can you just talk about your confidence that there’ll be an additive benefit on top of Aricept? I think the data so far has been in a monotherapy setting. And then the final question coming back to bio-similar Remicade and the recommendation of full label there, were you surprised at all with the full label? And what are the implications of that for HUMIRA as we think about potential bio-similar competitors, the amount of clinical work they’ll need to get a broad label as we look at the European market? Thanks very much.

Scott Brun, Chris. On the ABT-126, as you referenced we recently presented proof of concept data looking at ABT-126 as monotherapy in the mild to moderate Alzheimer’s Disease segment. And certainly what we saw there prompted us to move into our Phase II-b trials. I will say we are studying a higher dose range. I don’t want to specifically disclose the doses that we’re looking at right now because this as you know is quite a competitive area. But the Phase II-b program has both monotherapy as well as add-on to Aricept trials. Certainly with regard to the mechanism of a nicotinic neuronal agonist, we certainly think that there is a potential for add-on or synergy with regard to the cholinergic mechanism by which Aricept results in its activity.

Okay, and then Chris, this is Rick on the bio-similar. I’ll tell you we were surprised by the recommendation being broad without at least to our knowledge any clinical data to be able to support it. I’d say our position is we don’t think that’s in the best interests of patients. I mean it’s clearly unprecedented to have a biologic that you’re going to get ultimately an indication for that you’ve never studied in humans. And I’d say most of the feedback we get from physicians in Europe, particularly GI physicians I’d say is that they want to see data in here. So we’ll have to see how it plays out. There’s a lot of time between now and the time HUMIRA will potentially face bio-similar competition so it’s a little early to speculate how that might impact HUMIRA one way or the other. I think we’ll have to see how it plays out. Chris Shad – JPMC : Thank you.

Thanks, Chris.

Thank you. Our next question is from Marc Goodman of UBS. Marc Goodman – UBS : Yes, good morning. So you were talking about extra spending because you were doing better on the top line, so that spending, it looked like it was in the $100 million range in the quarter and it’s going to be several hundred million for the year. So is it all HUMIRA or are you going to spend it on other things? Are you increasing sales forces there or is it just marketing? And can you give us a sense is it US or is it overseas? The second question is on HUMIRA – can you just give us a sense of the GI part of it, the indication and how much that’s helping? If you can quantify it that would be great. And then third on [Synergist], can you just help us understand how this product does quarter to quarter, what kind of timing we need to be thinking about just in modeling it quarter to quarter. And what happened this quarter relative to last quarter? Thanks.

Okay, Marc, it’s Bill Chase. On the spending you’re correct – in our guidance we are raising profile for both R&D and SG&A, and what you’re seeing there is really two different things. First of all on the R&D front we’ve got a lot of programs that are very, very exciting. We’re moving to continue to develop those as rapidly as we possibly can and we think that’s the right thing to do for the long-term. On the promotional front, on the SG&A front I think the strong performance of our growth brands has shown that that’s been a very, very effective use of investment and we are going to continue to invest heavily in those brands to make sure that we reach their full-year potential. So that’s what you’re seeing. The expense is really on a global basis on the marketing side and certainly on the R&D side it’s across the entire pipeline. [Synergist], you had asked about the timing of the quarters. What you’ll see with this product is typically the sales are more heavily weighted to the fourth and first quarters of the year. This quarter was obviously much lower based on that gating but typically the bulk of those sales fall in Q4 and Q1. And then with GI again, the gastro segment winds up being probably the fastest growing segment of HUMIRA. We’ve been very, very pleased with both the market growth and our share growth where we’re actually capturing share, and that’s going to be a big part of the HUMIRA story as it develops over the next couple of years.

Yeah, you know the blended gastro share for us in the US is up about five points, and a lot of that has to do with not only the strength of the UC launch but just in general the marketplace around gastro. In ex-US markets, in Europe in particular we’ve probably gained about a 20% share already in the UC space. So the launch of UC is off to a great start for us.

Our next question is from Tony Butler from Barclays. Tony Butler – Barclays : Thanks very much. Scott, could I get you to outline for us the HCV program in Japan? Rick, may I ask you a question around the market in HCV in the US – do you know the net number of patients that are actually treated today under the care of a physician? And then finally, Bill, one for you: the $70 million Alvine payment was not counted in the non-GAAP earnings – I think that obviously was cash. And so I’m just curious would that be a consistent practice that you would do with respect to royalty payments and upfront payments for collaborations, not only in this quarter but in the future? Thanks very much.

Tony, it’s Scott Brun, I’ll start with the HCV Japan question. So as you know the epidemiology of HCV in Japan is very specific, very highly weighted to genotype 1b and then genotype 2. As a consequence our regiment under Phase II study there is a co-formulation of the protease inhibitor ABT-450 with the NS5A 267 and the Ritonavir boost resulting in a two pill once a day regiment. We’re far advanced in our Phase II program and in ongoing discussions with PMDA regarding the transition to Phase III.

And on the Alvine payment you’re correct. IP R&D we treat as an item which we exclude from our non-GAAP estimates and that is our practice.

And Tony, as far as the number of patients being treated, the data obviously moves around a little bit but the latest data that we’ve looked at historically, if you look at 2011 roughly 175,000 patients in the G7 were treated. We expect that to grow with these next-generation products to somewhere in the neighborhood of 2x that based on the capacity that we see in the marketplace from a clinical standpoint. Tony Butler – Barclays : Thank you very much.

Thanks, Tony.

Thank you. Our next question is from Alex Arfaei from BMO Capital Markets. Alex Arfaei – BMO Capital Markets: Good morning, thank you for taking the questions. First on ABT-199, based on what we saw at ASCO you seem to have a pretty compelling argument in the relapsed refractory CLL setting. I’m just wondering if there’s been any progress on tumor lysis syndrome that’s concerned there. And then a follow-up on the Galapagos JAK1. The Phase II-a in RA at [Euler] was a bit disappointing. I’m just wondering if you can just comment on the potential of that drug in RA from your perspective? Thank you.

Sure, Scott Brun. So let me start with the ABT-199. Yeah, we agree that actually 199 has promise not only in relapsed refractory CLL but across a number of hematologic malignancy. With regard to tumor lysis syndrome which is a direct consequence of the explicit potency of 199 we have been enrolling CLL patients with a revised dosing schedule where we start at a lower dose and ramp up at a more slow rate, and so far so good with regard to the patients that we have been treating under that new protocol. So again, we have a number of CLL studies that are actively enrolling right now and we will continue to accrue more data with this new approach. With regard to the Galapagos data, we’re certainly not disappointed in the results. I think you need to be aware that the data that was generated included relatively small cohorts of 15 to 20 patients. And while yes, you can single out specific response metrics and bring up some questions with regard to what they mean, if you look in aggregate across all of the measures included in this study – the deaths, 28; the various ACRs – we feel that there is a very clear dose response relationship. But again, we’re going to characterize much more clearly in the large Phase II-b study that includes a variety of doses. Alex Arfaei – BMO Capital Markets: Thank you.

Thanks, Alex. Operator, I think we have time for one more question.

And our final question today is from Damien Conover with Morningstar. Damien Conover – Morningstar : Great, good morning, thanks for taking the questions. I have two questions. The first one, given the recent recommendation by the US Preventative Taskforce to provide Hepatitis C diagnostic testing, I was wondering if you thought there’d be an increase in the relatively low amount of patients that are currently diagnosed; and also whether or not you think Medicare will start to pay for the sort of diagnostic testing outside of folks that are currently higher risk patients. And then just one other quick question on the Patient-Centered Outcome Research Institute, one of their first head-to-head studies is looking at comparative effectiveness from an anti-TNF-alpha versus steroids for Crohn’s and UC. And I just wanted to see how well you feel HUMIRA is positioned against steroids. And then also just generally speaking within this patient group, these patients have refractory to steroid treatment or do they generally move right on to HUMIRA? Thank you.

Scott Brun, why don’t I go ahead with the HUMIRA questions. So certainly I can’t speak to details of the comparative effectiveness trial that you’re referring to, but certainly we feel the data that we have generated to date demonstrates the very compelling activity that HUMIRA provides in these steroid refractory patients. I think you need to be somewhat careful depending on the design of these comparative effectiveness trials. Certainly we’ve seen other type trials that again, with real world experience if you’re not carefully randomizing there can be biases with regard to how patients are included in certain treatments that could limit interpretation. And again I apologize I can’t provide more specifics on this design since I’m not familiar with it.

Okay, and Damien this is Rick Gonzalez. As far as the HCV diagnosis, I mean it’s fairly well known that there are a large number of patients in the G7 that are still undiagnosed, in the US as well. And so I think screening more patients to find out those patients that are infected are a good thing, both patients as well as the market itself. I think as far as the expansion, I mean clearly we could see greater numbers of patients being treated as more and more physician capacity comes online, and we’ll have to see how that plays out over time. Even without that this is a very, very large market. So and your final point was as far as Medicare paying for it, I think that’s a little tough for us to call one way or another. With the recommendation I think there’s certainly a higher likelihood of that but it’s a little hard to judge at this point. Damien Conover – Morningstar : Great, thank you.

Thanks, Damien. And that concludes today’s conference call. If you’d like to listen to a replay of the call after 11:00 AM Central Time today go to AbbVie’s Investor Relations website at www.abbvieinvestor.com, or call 888-568-0512, passcode 72613. The audio replay will be available until midnight on Friday, August 9th. And thanks again for joining us today. If you have any follow-up questions feel free to give the IR Team a call. Thanks!

Thank you and this does conclude today’s conference. You may disconnect at this time.