Good morning and thank you for standing by. Welcome to the AbbVie Third Quarter 2013 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion of this call. (Operator Instructions) Should you become disconnected throughout this conference call, please dial 1 (877) 918-6633 and reference the AbbVei call. 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 are Rick Gonzalez, Chairman of the Board and Chief Executive Officer; 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. Rick will begin by discussing AbbVie’s results from the third quarter, as well as highlights from our commercial portfolio and upcoming pipeline milestones. Following Rick’s comments, Bill will give a more detailed review of our third quarter performance and then give an update to our outlook for the remainder of 2013. Following our comments we’ll take your questions. Before we get started, I remind you that some statements we make today maybe 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.

Yes. We are offline. Thank you, Larry Peepo. Good morning everyone and thank you for joining us. Today, we reported strong third quarter results with adjusted earnings per share of $0.82 exceeding our guidance range for the quarter. Our performance demonstrates the strength and durability of our portfolio, as we deliver these results despite the continued impact of generic competition on our lipid franchise. Today, we also raised our full year EPS guidance for 2013 reflecting the high level of execution we’ve demonstrated this year. As we embarked on this year, we set forth several key priorities for our business, including, a seamless transition to operating as an independent entity, maximizing the performance of our current product portfolio, advancing our pipeline including our late-stage HCV program and other key assets and delivering operations efficiencies. As we assess our progress, I believe we have met or exceeded expectations on our strategic objectives. I’m pleased with the performance of our product portfolio including HUMIRA, which delivered more than 19% global operational growth in the quarter. This strong growth was driven by several factors including continued robust market growth resulting from increasing penetration across therapeutic categories and geographies. Market share gains particularly in the GI segment where our UC launch is progressing ahead of our expectations. And we delivered this performance despite the entry of new competitors into the category. As we’ve indicated in the past, HUMIRA's broad label and new indications are a competitive advantage and UC is the latest example of that. We’ve launched UC indication in a number of key countries and it quickly gained meaningful market share and we’re working to secure market access and reimbursement in a number of additional markets in the coming months. Today, in Western Europe, we’re currently capturing roughly 25% of the UC market.…

Thank you, Rick. This morning I’ll start with an overview of our third quarter performance and then I’ll provide an update to our 2013 outlook. In addition to delivering strong topline growth in the third quarter, we again exceeded our earnings per share guidance. Third quarter adjusted EPS was $0.82, excluding non-cash intangible amortization expense and specified items. On a GAAP basis, earnings per share were $0.60. Total sales in the third quarter increased 3.6% on an operational basis which excludes an unfavorable 0.3% impact from foreign exchange. Excluding TriCor and Trilipix, which are experiencing a loss of exclusivity, total sales increased 10.9% on an operational basis. Third quarter growth was led by HUMIRA, which had global sales of nearly $2.8 billion up 19.1%. As Rick mentioned, we continue to see a positive impact from a launch of UC indication, which has helped us gain significant share in the global gastro market. In the U.S. HUMIRA sales increased 22.3% reflecting continued robust market expansion as well as share gains in dermatology and gastroenterology. Internationally, HUMIRA sales grew 16% on an operational basis with many markets continuing to grow strong double-digits. Share gains and continued uptake of new indications are contributing to the growth. International sales in the quarter also benefited to some extent from the timing of tenders. As a result, we’re forecasting slower international HUMIRA growth in the fourth quarter. AndroGel sales were $248 million in the third quarter, down 11.1% versus the prior year, reflecting continued moderating of market growth, rebating actions from the second half of last year and certain account loses in early 2013. AndroGel remains the testosterone replacement market leader with more than 60% share and achieved share gains in the last quarter. As expected, all the products in our lipid franchise are now experiencing…

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

(Operator Instructions) The first question today is from David Risinger with Morgan Stanley.

Yes, hi. Can you hear me?

Can hear you David. How are you?

Great. Good morning. So I have a couple of questions. First of all, on Hepatitis B, could you just update us on the topline press release strategy and potential timing, so what studies we’re likely to see topline releases on the frontend of the schedule versus for example, in early 2014? That’s my first question. Second, could you talk about the FC pill burden from payer and physician perspectives? It’s not clear to me that payers and physicians will care about the number of pills for twelve week treatments and I’m guessing that’s your view point as well, but just wanted to hear your perspective on what's your hearing about pill burden for short duration treatments and whether payers and physicians will care or not. And then third, with respect to ABT-126 as an add-on for both Alzheimer's and schizophrenia, could you just remind us when we should expect topline press releases in both Alzheimer's and schizophrenia. Thanks very much.

David, good morning, it’s Scott Brun. So why don’t I go ahead and take those. Again, with regard to the Phase III Hepatitis C program, all 6 studies as you know are fully enrolled and we’re very pleased with the progress that we’re making there. We will be releasing data as topline press releases later this year and moving into early 2014. I don’t want to get into the specifics with regard to which studies are going to be released, but certainly when you look at all 6, each of them is quite large involving several hundred patients. Again, looking at a variety of different contacts from treatment, naïve treatment experience, cirrhotic patients, so I think certainly each study or set of studies that we release will certainly help to provide some very solid evidence with regard to the performance of the regimen. But again look for us to start those releases later this year. With regard to the pill burden, I think as you noted David -- with regard to the payers as well as clinicians that we’ve spoken to, cure or sustain virologic response is really keen here. And when you consider a short term regimen whether or not you’re talking 1pill, 4 pills, really what’s going to trump everything is, how well is it going to perform with regard to eliminating the virus. And certainly with regard to the performance that we’ve seen so far of our regimen in Aviator, involve treatment naïve and treatment experience patients , SVR 12 rates ranging from the mid-to-high 90% range as well as tolerability reflected by discontinuation rates for adverse events less than 2%. We really don’t feel that the pill burden is going to be material to clinicians, the payers or for that matter to patients who’re really looking to eliminate this virus. Finally, with regard to ABT-126, the Alpha-7 NNR, we are looking in Alzheimer's disease both as a mono therapy treatment as well as an add-on to donepezil and then in cognitive impairment associated with schizophrenia, we are looking -- we are evaluating the drug as a mono therapy. We will begin to see data in Alzheimer’s very late this year and certainly releases would probably be expected sometime within the first part of 2014, the schizophrenia's data likely coming a bit later within 2014.

Thank you.

Thanks, David.

Thank you. The next is from Jeff Holford with Jefferies.

Hi, thanks for taking my question. Just firstly, I wonder if you can just give us a bit more color on the HUMIRA sales potentially splitting them by the main indications if you can for the quarter. Secondly on ABT-199, I was interested just the way you put it in the press release today, it’s a large single agent study you described it as a -- with ABT-199 in the 17p deletion patients. Now that’s likely to read out by the end of next year, could that potentially be an early filing for that specific population, that’s my question. And then just lastly, I noticed that share count was down more than expected during the quarter, can you just talk a little bit about capital allocation and just how you are thinking about share repurchases going forward. Thank you.

Okay. Thanks Jeff. Let me start with the HUMIRA sales breakdown. Scott will cover the 199 question and Bill can talk about capital allocation at the end with Rick, if necessary. In terms of our mix right now, it’s interesting that in U.S., RA is now in the high 30% range. It’s a little below 40% of our total U.S. sales. Gastro is about a quarter of our sales. Psoriasis right now is about 15% or so of sales and the remainder is kind of in the spondo area of psoriatic arthritis and ankylosing spondylitis, those types of indications. It’s similar ex-US. I’d say RA is probably in the mid 30% of the ex-US franchise. Psoriasis again is down in that 14%, 15% range. SPA ex-U.S. is protein 30% and again gastro is probably about a quarter of our sales. So hopefully that gives you a pretty good feel of how the sales mix up today. So I would characterize it as a pretty diverse basket of sales across those four different categories.

Jeff, I want to go ahead and take your question on ABT-199, our first-in-class BCL-2 inhibitor. So you’re right, we’re currently enrolling a large study in relapsed refractory CLL patients with the 17P deletion mutation, certainly a very hard to treat population. And if the results from this study looks similar to results in this population that we presented before with a overall response rate above 80%, complete response rate of 18%, we certainly think that there is the potential to be able to move forward with a filing on the basis of addressing an unmet medical need. Certainly, as Rick noted though, we’re also beginning a -- in collaboration with our partner a large Phase 3 traditional study that will compare 199 with Rituxan and a chemotherapy free regimen to a more standard chemo containing regimen.

Jeff, it’s Bill Chase. We’ve been pretty consistent on our capital allocations story this year. First and foremost, this is a business that generates very, very healthy cash flow. The first thing we’re going to do with that cash flow is make sure that we reinvest in the business. You’ve seen some good progress on the deal front this year with a number of compounds announced. And certainly we continue to build out our infrastructure with capital expense that sort of thing. So that’s first and foremost. Second, the dividend is a very, very important piece of our investor identity. We have set the dividend in a very competitive payout ratio relative to our peers. And we've been pretty clear that we intend to grow that dividend over time probably more modestly in 2014, given some of the challenges with the lipid business but growing it nonetheless. And I think you can expect to see that payout ratio creep up as a result. After that, we like -- try to pay down a little bit of debt. We think that would be the right thing to do, given our balance sheet. And then above and beyond that, capital cash will build and that will be a valuable source of liquidity and flexibility for the company.

Thank you.

We do have a buyback program, Jeff, but that is primarily geared to offset dilution of competition programs.

Thanks very much.

Thank you.

The next question is from Steve Scala with Cowen.

Well, thank you. I have two questions. I appreciate that you’re not giving guidance for 2014 but when we think about this spending levels in 2014, given the need to develop and rollout the pipeline, how would you compare spending in 2014 to 2013 on a percent of sales basis? And secondly, you’ve done a good job of downplaying the 250,000 pending patents around HUMIRA. Is that how you want us to view the patent stated as of limited ability to blunt potential biosimilars as patents expire in 2017 or ’18? I must admit I’m surprised that your state has no patents which could provide obstacles for biosimilars when they come around? Thank you very much.

Okay. So this is Rick, Steve. So let me start with your investment question. We’re obviously going through our planning process right now. So we haven’t finalized any investment decisions yet as to how we’re going to proceed forward in 2014. But what I would say is you should think about it from this perspective. One, as I indicated in my remarks, we’re going to prepare to have a very effective launch of HCV and we need to build that infrastructure in 2014 to be prepared to launch in the early part of 2015 and that’s going to require incremental investment. The second thing is, we could have as many as seven or eight assets in Phase 3 development during 2014 and we’re obviously going to fund those Phase 3 assets to be able to get them to the market as quickly as possible. So I think there will be some increased investment, but we’re just not in a position yet to be able to tell you what that looks like. And so I think that’s how you’ve got to be thinking about it and we’ll give more guidance in the fourth quarter as to what that looks like. The second thing is -- maybe I’d answer your question a little bit differently. As you look at how we think about bio-similars, maybe let me walk you through our thought process around, because I think it helps answer your question. We certainly feel good about the patent portfolio that we have and I would not interpret it as we don’t believe that it provides a level of protection. Quite the contrary, I believe it does and will provide a significant level of protection. And we certainly intend to enforce our patents and make sure no one violates those patents. But…

That’s great. Thank you.

Thanks Steve.

The next question is from Vamil Divan with Credit Suisse.

Yeah. Thanks for taking the questions.

Sure.

One on the HUMIRA, again I appreciate the color you gave on the quarter. Can you talk a little bit about the payor dynamics there, if there is anything specific in the quarter? We saw some stuff from the (inaudible) around formula decisions, anything that impact in the quarter and also maybe more looking out near to medium term, how do you see that changing? And then second one just on 199 if I could. Appreciate the comments around the studies that are ongoing. Just wondering, when we might start thinking about you looking at other non-CLL indications and from only potentially moving this product in general. And in an all over the 199 question for you so you are ongoing in non-CLL indications, which seems to make segment from, while this is about potentially moving this about potentially moving this product into those areas. Thanks.

I will start with the 199 question. Scott Brun, again. So we already have some studies ongoing in non-CLL indications such as non-Hodgkin's lymphoma diffuse large B cell lymphoma and certainly you will be seeing some more of those data next year. And we continued to look at other opportunities within hematologic malignancies for things like potentially AML as well as looking at multiple myeloma, plus we are assessing the potential for the Bcl-2 mechanism, do have applicability in solid tumors. So all of that work, some of that is already ongoing and much to be initiated in the not-too-distant future.

Okay. And this is Rick. I will take the HUMIRA payer dynamics. I think if you look at one of the strengths of HUMIRA, it has been the payors and governments around the world recognized the value of this product. And so I would say, we've been in the fortunate position that we have a very strong position in the standpoint of payors. In fact, in the U.S. managed care environment, the number is around 70% preferred status, meaning they have to go through HUMIRA first as your first anti-TNF. That dynamic hasn’t been changing it all. In fact, if anything I would say is probably improving a little bit over time but we don’t see any negative dynamics occurring in that area if that’s what you were looking at. Thanks.

Thanks, Vamil.

Thank you. The next question is from Arial Herman with Goldman Sachs.

Hi. This is [Ayan] in for Jami Rubin. I just have two pipeline questions. The first on ABT-199, how should we think about the potential to do some additional combo studies with GA101 or something like ibrutinib and then also with Elagolix, can you just help us understand the market dynamics and the potential size for this product? Thank you.

Right. I’ll go ahead and I will start with 199. So with regard to additional combos, we are working with Roche. As you said first of all, looking at combinations with Rituxan as well as with GA101. With regard to ibrutinib and other new agents on the horizon, we are certainly interested in those types of combinations and we are talking about how best to pursue that with regard to the timing of availability of ibrutinib. Certainly with combinations like 199 in other agents or even a single agents, those are the potential that really changed the way CLL is treated, moving it from something that requires chronic therapy to a situation where you could have a well-tolerated combination that perhaps result in drug free remissions or even functional tumors.

With regard to Elagolix, the opportunities, so certainly we are in Phase 3 in assessing patients with endometriosis, a very common condition affecting millions of women in the developed world. Certainly, the current treatment options available have limitations with regard to tolerability because of the very dense estrogens suppression, they result in you get menopausal-type symptoms like hot flash and bone loss and with Elagolix’s mechanism you get a more guided or partial suppression sof estrogen, which through Phase 2 studies we've seen reduced impact on symptoms such as hot flash or certainly bone loss. So we think that combination of the efficacy and tolerability profile will provide a very nice option for women when you consider you have the types of surgical alternatives such as hysterectomy which are quite extreme. We’re also in Phase II for uterine fibroids, a condition that can lead to very heavy marked bleeding as well as other symptomatology and again with regard to the type of estrogen suppression we’re seeing, we feel very confident in the ability to markedly impact that rate of bleeding and provide women an alternative to hysterectomy, which again represents the majority of surgical solutions for this condition.

Certainly from a commercial perspective, we’ve talked about the endometriosis indication being a potential greater than a $1 billion opportunity and certainly fibroids could be a significant opportunity as well as for us if you’re looking from a modeling perspective.

This is Rick. I think the key here and what we’re working towards is, if you get sufficient pain suppression in endometriosis and a strong safety profile where this can be used as a long term and more chronic kind of therapy, it's a very big opportunity and that is why we designed the trial the way we designed it where we have two doses that were running to Phase II to determine which one of those doses best fits that profile long-term.

Thanks all of you.

Thank you the next question is from Chris Shad with JP Morgan.

Great, thanks very much, just had a few here. First, coming back on the question about longer term spend. As I think about growth initiative over a next few years and this is pretty more qualitative question, but can you just tell me understand how significant this spend associated with the roll out of HCV is going to be, I guess, my question is how much of this can you leverage existing infrastructure as compared to incremental spend? The second question was on HUMIRA, you mentioned higher spending due to some of -- accelerating some promotion programs there, could you elaborate a little more of specifically what those efforts are going to focus on? Is there any particular indication that's more promotion sensitive or you’re seeing opportunities to accelerate share gains. And then the final question is in HCV-1, I know it's early, but can you just elaborate a little bit on the confidence you have and you’d be able to maintain the initial share you’re going to take in this market. I think example -- as an example, we look what is like some interesting [Merck]] early stage data in the AASLD abstracts and if we end up with several players with all oral highly efficacious combos. Is that translate to a relatively fragmented market in your opinion or it's the first more advantage here just to significant that it's hard to displace that the initial share you take, thanks very much.

Okay, this is Rick. I’ll cover the questions so. If you look at the building out the infrastructures associated with HCV I’d say for the most part it's incremental. There is -- there are certainly areas around the world where we’ll have an opportunity to be able to add some synergies with our existing structures, but I’d say for the bulk of it, you’re going to -- you should be thinking about it as incremental build. And as I said we’re going through our planning process right now, we literally have not finalized again, probably won't finalize it for another month or so, but we’re going to make sure that we’re in a position to be highly effective in that area. As you talk about HUMIRA spend, one of the things I’d say to you is, as we approach the beginning of this year one other things that we knew is that we were going to face some new competitive challenges and in anticipation of that, we did some things from an investment standpoint that we thought would put us in a position to be able to defend and still grow our share and I’d say if I look at the results nine or ten months into it, we’re pretty happy with the investment that we made there because it's given us back a pretty healthy return and it's really -- it has allowed us from a competitive standpoint to really deal with new competition in a very effective way. As far as HCV is concerned, I think as Scott pointed out, a significant part of this is really built around the performance of the product, We’ve done a lot of market research. And when you look at prescribing preference of physicians, the first five, six attributes are all related to performance of the product, cure rates in different populations. And so as the competitive environment rose out and as we get to our second generation product, I think we will then take another incremental step in this particular disease treatment paradigm there will be difficult to beat. I think it's incredibly difficult to get performance that’s better than this or at least what we anticipate and then it will be all about how you built through infrastructure, how well establish it is, that will make it difficult. You look again at the (inaudible), think out difficult it is for a new competitor break into that market. And it’s because of both the performance of the product and the value that it provide and the established infrastructure that in place that has a lot of experience have been able to drive those products. And so, I think HCV will play out the same way and I don’t think there’s enough head room left that anybody can truly have a very differentiated product after second generation. So, that’s how we view it.

Thanks, Chris.

Thank you. The next question is from Marc Goodman with UBS.

Yeah. Good morning. First, can you talk about the cystic fibrosis product and what exited about that, what’s the hope there, obviously that’s interesting market. Second, HUMIRA in the emerging markets, just give us a little color there, you had mentioned something about tenders, if you can quote that a little more. And then third, I know you are working on some early stage HUMIRA combos, for like next gen technology, life cycle strategies. Can you update us on where you are there? Thanks.

Sure. I want to go ahead and start around with the cystic fibrosis Galapagos collaboration. So, I mean, certainly, with regard to the genetic understanding of cystic fibrosis in the mutation that lead dysfunction in the ion channel, the cystic fibrosis transmembrane receptor lead to the symptomatology. We have seen introduction of a therapy like (inaudible) that can have marked impact on patients. But really is only applicable to small minority of patients. What we are exited about is, can we go ahead and take this even further by addressing patients with the much more common F-fiber weight nutrition. Really looking at combinations of two drugs, a so called the potentiator that helps the malfunctioning channel, ion channel to both proper way, as well as the corrector that helps to affect the defolding in the transport of the receptor to the cell surface. And so, we feel that Galapagos, it’s got some very, very interesting science and even though there is a timing element here, we won’t be entering clinical trials until late next year. We are using analogy of Hepatitis C, where certainly we did not begin in the lead but by leveraging certain scientific insights and taking full advantage of the ability to combine different mechanisms to get where we are now. So again I think, that’s really what excites us, the ability to make a remarkable impact on a very devastating disease and to follow on the science that -- that is already out for the minority of patients. With regard to, we’ll say, HUMIRA next generation, certainly we built a very, very strong foundation with HUMIRA and rheumatology, dermatology and gastroenterology. And the question is what can you do as a leader in these areas to improve upon what the anti-TNF HUMIRA specifically have been able…

Mark, its Bill Chase. As you acknowledge, we did have some tender activity in the third quarter and that did lift our international HUMIRA results a bit. The way you got to look at that, it does occur from time to time in certain markets. When it occurs, it’s generally about a 2% to 3% lift. That’s certainly what we saw in Q3 and what we’ll try to do and we have been doing is to be transparent, so let you know when that’s occurring to a way, to better understand both the quarter that’s occurring as well as the next.

Thanks Mark. Operator, we have time for one more question please.

Thank you. Our final question today is from Tony Butler with Barclays Capital.

Thanks, very much. Rick, you outlined very nicely on HUMIRA and the various indications, you guys have done a phenomenal job in growing the [x-RA] indications in particular, but I wanted to just focus on RA only. Is that a market that continues to grow in volume or has it ever really reached a negative. Two very small questions for you Scott, one is what’s the strategy around other genotypes, genotype 2, 3 in particular and then lastly is ABT-493, is that boosted or non-boosted. Thanks very much.

Okay, maybe quickly on the RA market. RA market has penetration rates that is still under 30%, so there’s still clearly an opportunity to grow and we continue to see in most markets around the world that the RA market is continuing to grow. So it’s not growing as fast as some of the other markets like the GI market as an example, but it is continuing to grow.

Tony, its Scott. With regard to our strategy on other genotypes, we are currently doing work with ABT-450 and ABT-267, which we do have activity beyond genotype 1, in genotypes 2, 3 as well as 4. So we’re currently in Phase II with those genotypes and we’ll continue to move forward, but it’s really our pan-genotypic ABT-493, ABT-530 combination that we think has the most balanced pan-genotypic activity. To your question, neither ABT-493 nor ABT-530 in the next generation requires return of your boosting. From what we’ve seen in ongoing clinical development there, pharmacologic profiles are both conducive to QD, once daily dosing without boosting.

Thanks, very much.

You’re welcome.

Thanks, Tony. And that concludes today’s conference call. If you’d like to listen to a replay of the call after 11:00 a.m. Central Time today, go to AbbVie Investor Relations website at www.abbvieinvestor.com, or call 866-415-2341, passcode 102513. The audio replay will be available until midnight, Friday, November 8th. Thanks again for joining us today.

Thank you. That concludes today’s conference. Thank you very much for joining. You may disconnect at this time.