Good morning and thank you for standing by. Welcome to the AbbVie Third Quarter 2015 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion of this call. [Operator Instructions] I would now like to introduce Mr. Larry Peepo, Vice President of Investor Relations.

Good morning and thanks for joining us today. Also on the call with me is Rick Gonzalez, Chairman of the Board and Chief Executive Officer; Laura Schumacher, Executive Vice President Business Development, External Affairs and General Counsel; Michael Severino, Executive Vice President of Research & Development and Chief Scientific Officer; and Bill Chase, Executive Vice President of Finance and Chief Financial Officer. Before we get started, I'll 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 2014 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. We want to remind you that we issued two separate news releases this morning in advance of today's call and have also posted slides on abbvieinvestor.com that supplements some of the content we'll be covering this morning. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to Rick.

Thank you, Larry. Good morning, everyone and thank you for joining us. As Larry mentioned, we'll be covering two topics on the call this morning. I'll briefly discuss our third-quarter 2015 performance highlights and Bill will walk you through the quarter in a bit more detail. I'll then discuss the Company's long-term strategic and financial objectives that we outlined this morning, including our expectations for growth and other financial metrics over our long-range plan. As always, we'll provide ample time to answer your questions. We delivered another quarter of strong performance with third quarter results well ahead of our expectations. Adjusted earnings per share were $1.13, representing growth of nearly 27% versus the third quarter of 2014. This is the third consecutive quarter of delivering roughly 30% EPS growth. Our results in the quarter included operational sales growth of more than 26%. Before I provided an overview of our highlights in the quarter, I'll briefly provide our perspective on the recent update to our U.S. VIEKIRA label. As you're likely aware, last week, we updated the prescribing information to reflect a change in the use of VIEKIRA in certain patients with advanced cirrhosis. Specifically, Child-Pugh C patients. VIEKIRA went from not recommended to contraindicated. VIEKIRA was and remains contraindicated in Child-Pugh C patients. In addition, the updated label recommends a clinical and laboratory assessment for patients with cirrhosis to ensure that those with decompensated disease are identified. Turning now to the other quarterly events. In the quarter, we advanced several important strategic priorities, continued to enhance operational efficiency and achieved a number of clinical and regulatory objectives. Our third-quarter performance was driven by growth from several product in our portfolio, including strong growth from HUMIRA and IMBRUVICA, continued uptake of VIEKIRA and continued growth from Creon and Duodopa. We also…

Thank you, Rick. This morning, I'll review our third quarter performance and provide an update on our outlook for 2015. As Rick mentioned, in addition to delivering strong top line growth in the third quarter, we again exceeded our earnings-per-share guidance range with growth of nearly 27% versus the third quarter of 2014. Operational growth on the top line was very strong at 26.2%, excluding a 7.8% negative impact from foreign exchange. Reported sales were up 18.4%. HUMIRA delivered global sales of more than $3.6 billion, up 19.6% on an operational basis. We continue to see strong momentum for HUMIRA as the market leader around the world. On a reported basis, currency had a negative 7.5% impact on global HUMIRA sales, and reduced international HUMIRA sales by 16%. U.S. HUMIRA sales increased 30.4%. We've seen acceleration in market growth this year in the U.S. with HUMIRA driving strong growth across the gastro, rhum and derm segments. Wholesale inventory levels remained constant at roughly half a month. Internationally, HUMIRA sales increased 7.1% on an operational basis in the third quarter, roughly double the rate of growth we reported in the second quarter. HUMIRA's momentum has not been adversely impacted by the Remicade biosimilar. We continue to see only modest overall share gains for the biosimilar in the major markets, in line with our planning assumptions. HUMIRA's list of indications continues to grow with recent EMA and FDA, approvals for HS. HUMIRA is also currently under regulatory review for uveitis with approval expected by the end of 2016. Global peak year sales for HS are expected to be approximately $1 billion per year, while uveitis sales are expected to reach several hundred million dollars per year. For the full year 2015, we now expect global HUMIRA sales growth in the high teens…

Thanks Bill. As a reminder, we have posted slides to our website which you can use to follow along. My remarks regarding our long-term strategy generally coincide with the presentation. Today, we'll share with you some of the key assumptions from our long-range plan which we review annually with our Board of Directors. Over the past couple of quarters. There has been an increasing level of interest from investors for more detail on our views regarding a variety of topics, including AbbVie's long-term growth prospects over the next several years, our ability to expand margins, our expectations around biosimilars and our pipeline prospects. Additionally, as we evaluated our long-range plans, expected performance versus Wall Street's consensus, there is a clear gap in revenue and EPS growth. Based on these dynamics, we decided it was appropriate to provide investors with a clear view of our expected performance and the significant drivers of that performance. Turning to Slide 3, our mission when we launched as an independent company was to create an innovation driven patient focused specialty biopharmaceutical company, capable of achieving sustainable top-tier performance through outstanding execution and a consistent stream of innovative medicines. Our actions, since our inception have clearly supported that mission. We've built an innovation driven culture, attracting top talent, focused on developing new products to address some of the most serious health conditions. We delivered outstanding performance from our promoted portfolio. This includes, HUMIRA, where we have accelerated growth and developed a comprehensive strategy for the future. Our heightened level of R&D investment has generated above industry success rate with positive clinical data and regulatory outcome from a number of development programs. Our pipeline now has a number of late stage de-risked assets with multibillion-dollar potential. We acquired Pharmacyclics, providing a major new growth platform in a…

Thanks, Rick, and we'll now open the call for questions. Operator, we will take our first question please.

[Operator Instructions] Our first question comes from Jami Rubin from Goldman Sachs. Your line is open.

Thank you, and wow that was a lot of detail, Rick. It's going to take time I think to digest it all, but I know that we certainly really appreciate it. First question is this, was wondering if management's comp is tied to the long term targets. Secondly, it seems that the biggest delta between the Street and your guidance on HUMIRA is timing of a biosimilar launch. Wondering if you could comment on that and also if you could comment on Amgen CEO's comment on his earnings call, where he said that HUMIRA has IP and Amgen has to respect that. So, is it the case that the Street's coming around to your view on the strength of your IP and the timeline of 351(k) pathway regulations or has something really changed in terms of your confidence with IP? Thirdly, and I'm sorry for this but, with your operating margin guidance growing to over 50% by the end of the decade, it looks like that's really coming or driven by strong revenue growth not by operating cost cuts. Can you confirm that and obviously in a sort of a bear case scenario, how much flexibility do you have to reduce your SG&A? We all know you're spending a lot on HUMIRA and having a really good return on investment, but if that changes, how much flexibility do you have? Thanks very much.

Thank you, Jami.

Thank you Jami for all those questions. So, we'll cover each and every one of them. Let me start with the management comp. I mean, I think similar to probably the other companies in our industry, the vast majority of the executive team's comp is in long-term incentive that's associated with the appreciation of the stock. So, I'd say we're directly linked to that. In addition to that, for the top people within our company, we have two levels of incentive plans. One, is basically focused on the short-term plan year and then we have one, which is a longer term plan that basically is designed to hit a three-year out target, where you would set things like this operating margin target and so the bottom line is yes, I mean, there's perfect alignment between all of these metrics and how people will be rewarded against those. To your second question, which was, is the GAAP primarily the timing of biosimilars? I'd say, that's accurate for the most part. There's probably more penetration and more growth in the indications in general that are built-in versus the Street but the more significant part is the assumption that we're making around the timing of U.S. biosimilar entry. As far as the Amgen CEO, I read the comment. I find the comment encouraging, but I'm not going to comment specifically on what they said. I think, to your point about, is the Street just now coming around to our point of view, I mean, in fairness much of this IP has only really come out in the last two years and I think both competitively that is now something that people who were interested in coming up with a biosimilar are having to evaluate. So, it's not like they had a lot of…

Okay. Super helpful. Thank you, very much.

All right, thanks Jami. Next question for us please.

Our next question comes from Jeffrey Holford from Jefferies. Sir, your line is open.

Thanks very much and thanks to the team. It was a very comprehensive midterms outlook today, which I mean really sets out your positioning on HUMIRA and the rest of the business very clearly. So, now obviously the debate on HUMIRA will continue and it seems that the linchpin near term is the achievement of an injunction against any would be at risk launches. We've recently heard from Amgen, regarding at risk launch and we certainly heard that also from other large biosimilar players, but could you be more specific on the trigger starting perhaps on the infringement process and the injunction process so we can think better at the timing of those. Are they more likely to be tied to filings or FDA approvals? So, that's the first piece. Second on 2016 guidance, it would just seem to us that you're potentially implying you do not expect to increase the $3 billion exit rate for the hep C franchise in 2016, if you could speak to that too. Then just last, you talked about being ready for larger deals again by 2017. To be clear, the current guidance does not include anything for additional M&A, just to be clear on that and then, can you tell us a bit more about substantial share repurchases that might be part of your midterm plan too, at least as a backstop if you can't find substantial M&A targets? Thank you.

I'm actually going to have Laura address your first question Jeff and then I'll cover the rest.

With respect to the trigger for the filing of litigation, there's a process that's laid out specifically in the statute, which there has been litigation over whether or not that process is mandatory or not. From our standpoint, we are anticipating that in the event that there is a biosimilar applicant, they will or won't choose to follow that process, at some time to be not mandatory, should they choose not to follow that process upon notice of the filing of the application, of course, we would initiate the litigation. With respect specifically to an injunction against an at risk launch, that injunction against an at risk launch would be triggered upon the approval of a biosimilar and of course we would then request that the court enforce our IP. As Rick laid out earlier, we intend to vigorously enforce the IP and we believe we have a very strong case for an injunction. First of all that we believe any biosimilar applicant will infringe at least certain of our patents, because in order to follow the -- to be classified as a biosimilar they will need to have the same dosing regimen as the innovator product. As to validity, we think we have a very strong case on validity given the uniqueness of HUMIRA and the fact that HUMIRA was the first fully human antibody approved by the FDA, and there was nothing known about its effectiveness or its optimal dosing regimen at the time that we did extensive clinical work, trial, investment et cetera. So, we believe in the event that there was an at risk launch, we would have a very strong case for our preliminary injunction. Also, as you know, in the event a biosimilar would choose to launch at risk, the damages for such a launch, should it be found to be violative of our patents would be very significant.

Thank you.

Okay, thanks Laura. So, let me take the M&A question. Yes, the guidance that was laid out today doesn't cover any significant acquisition activity or licensing acquisition activity. So obviously, as that played out, we would look at -- based on the significance of it, we would make a decision how we would with that. Something we could manage or something that we could not and then we would obviously pass that into our guidance and communicate it appropriately. As we talked about before, I'd say that our focus for the next couple of years is more trying to fill out our portfolio of assets within the therapeutic areas that we're in. We don't anticipate a large transaction in that timeframe and nothing has changed around that front, and that kind of gets to the whole share repurchase. Although, I'll have Bill talk about that just for a moment as well, but ultimately, how we look at share repurchase versus M&A is we're trying to manage between those two to make sure that we have the appropriate capacity to be able to do the things that we need to do for the business longer-term and share repurchase is more of an opportunistic kind of approach. So, Bill, is there anything you want to add to it?

No, I mean, obviously, if you look at this long-range plan, there's going to be pretty robust cash generation. As we get out a couple of years, that can clearly fund larger M&A if we deem that's necessary. To the extent that, that an opportunity isn't readily apparent, well then, we'd certainly have to look at other things to do with that cash and share repurchases could very well be part of that.

So on the 2016 guidance, I mean, obviously, we've just gone through our planning process for 2016, and the way we do planning is we build everything up from the bottom up, product by product, and we make determinations as to what we're going to assume for each product based on a set of assumptions that we think are absolutely realistic and so we have an HCV number that's in our 2016. We tend to be a little bit on the conservative side when we build these up so that we have the flexibility to make sure that for any unforeseen events, we have the ability to be able to manage our way through those and I'd say, this plan is no different than previous ones that we built, but specifically, for HCV, I'd say HCV will have some growth built into it year-over-year because just the gadding [ph] of how the countries have rolled out over time internationally you're going to get year-over-year and we're just launching in Japan now, well, we're not launching. We will be launching shortly in Japan now and Japan's a significant opportunity for us. So it will create a year-over-year growth driver for us as well. So, I'd say there is growth built into the HCV franchise, but let me specifically talk maybe about this $3 billion running rate, because I know I made that prediction in the early part of the year. If you look at where we are right now, what I would tell you is, we're going to be close, but we're slightly below that right now in the fourth quarter. At least as what we had built into our current guidance for the year and is the function primarily of the fact that -- in the beginning of the year, the number of patients being treated was significantly higher. We've seen that trend down. We've seen some changes in VA, in the United States. So, I'd say, we're going to be close. We could make it, but we might miss it and as I said, we tend to build conservatively what we have in the fourth quarter right now is slightly below that.

That's great. Thanks very much.

All right. Thanks Jeff. Next question for us please, operator?

The next question comes from Mr. Mark Goodman from UBS. Sir, your line is open.

Yes, morning. 494, $4 billion in 2024 is a pretty big number. Can you help frame how you're thinking about that and then secondly, just AndroGel continues to be a little stronger than we think, why is that? What's going on behind the scenes? Thanks.

494, based on the profile that we've set up. I would say $4 billion of risk-adjusted revenue for an asset that has that profile in that timeframe isn't a stretched number from our perspective at all. When you look at the level of response you have in the TNF inadequate responder patient population, which as I said in my remarks represent about 35% of the U.S. patients, we assume it's something similar to that in Europe. It's a little more difficult to get to the data in Europe. It's a sizable population and it's in the population that has relatively limited number of options available to it. In addition to that, when you think about how biosimilars will ultimately roll out, I think it's a good assumption to assume that biosimilars are going to capture some portion, maybe a significant portion but at least some portion of the new patients. So they're going to be generating more TNF inadequate responders. Now, they might rotate to another TNF after that but, a proprietary product will have an opportunity in a biosimilar world to go after those nonresponders, and so that's a very significant opportunity. In addition to that, obviously to my comments about our organization representing this product will be a goal to be able to take the appropriate patients and try to move them to the appropriate kinds of therapies. So, patients that aren't responding as well on HUMIRA, obviously we would want to move them to 494 as an alternative. So when you look at all of that, I'd actually say that the $4 billion number is not a number that we're uncomfortable with.

And Mark on AndroGel, clearly it has performed better than the Street was thinking and frankly it's performed a little bit better than we were thinking. The market still is in decline. However, what you're really seeing is less uptake or less impact on the brand from the generic 1% formulation. It's something we're just going to have to keep our eye on, but so far so good.

Thanks Mark. Our next question please operator?

The next question comes from Chris Schott of JPMorgan. Your line is open.

Great. Thanks very much and thanks for all the details today. Just had three quick ones here. First, following up on Jami's question. If for whatever reason the HUMIRA IP falls and sales end up closer to say consensus than your $18 billion target, is a 50% margin realistic in that scenario? I'm just trying to get a sense of like where margins could go in that downside case, that's not the scenario you laid out, but just trying to understand that. Second, just thoughts on what happened earlier this year with Amgen and Sandoz with NEUPOGEN. Are there any learnings, similarities or differences that we should apply when you think about the HUMIRA situation? Then finally, on the longer term, international HUMIRA targets, could you just give us a little bit more color on the type of erosion you're assuming given biosimilars for Enbrel and potentially HUMIRA over that window, just how much price and volume impact are you kind of reflecting here? Thanks very much.

Okay. So, I don't know that the 50% margin target would be realistic in a more catastrophic kind of situation. What I would tell you is, we've obviously laid out contingency plans by country, because this will be rolled out by country obviously, right as biosimilars enter those countries and we have an erosion curve that we built by country and if the country starts to fall below that erosion curve, then we'll do what we always do and that is, we will manage the expense base accordingly. So, we have the ability to be able to manage and offset the profitability like we would do with any type of LOE. So at the end of the day, I think know whether or not it had a 50% margin target or not, we would put a contingency plan in place that would allow us to try to maximize profitability or preserve profitability under that scenario. Having said that, what I will tell you is, we have a high level of confidence in what we've built here and we don't build LRPs that we don't believe we can achieve. Again, we're not showing you anything different than what our internal LRP says that we present to our Board every year. So, at the end of the day, I can tell you, we have a high level of confidence that we can deliver against what we've put here. The learnings from Amgen. I'm assuming you're talking about sort of the whole IP and litigation process for Amgen. I'm going to have Laura address that for you.

With respect to the Amgen Neupogen litigation, a lot of the debate in that litigation surrounded whether or not the pre-litigation exchange process, whereby patents and information were exchanged between the innovator and biosimilar, whether that was a mandatory process or a voluntary process, and ultimately, as I said previously, we're not anticipating from a timing standpoint that there will be a litigation exchange, it will be something that the biosimilar applicant will choose to participate in or not. With respect to the underlying patent infringement litigation with Amgen and Neupogen, our litigation, our patent estate is very different than that. In that case, there's very few claims and patents and ours is as we've said before, we have over 70 patents, many of which, certain of which will be infringed and some of which may be infringed. So, we'll have to see when we know more specifically about what formulation and/or process that particular biosimilar applicant uses.

Okay. Thanks Laura. Then on the European erosion curve, obviously as part of this planning process we have built a very specific erosion curve for both Europe as well as the United States when we get beyond 2022. So, what I would say to you is, I'll walk through the European one or I'll walk through the international one, I guess more generally. What I'd say is, it's fairly complex, because there are lots of different variables if you think about it right, you're going to have countries rolling out at different times as they enter those countries and they get pricing approval within those countries. Not every country is exactly the same, how you get pricing approval. So, there's sort of this gated period where you go across country by country as biosimilars would enter it. The second thing is, you have to layer in what our strategy will be, and we've built a strategy by country. There will be countries where we choose to take price erosion to maintain all of the patients, new patients and well-maintained patients. There may be countries where we choose to only keep well-maintained patients, and do something different from a pricing standpoint. So, there's some complexities around that. Then the third point that I'd say to you, that's very important as you think about this, because I'm going to walk you through what the erosion looks like here in just a moment, is when a biosimilar enters the international market, these markets are still growing. As I said, they're growing like mid-single-digits and so as I described to you what the erosion looks like, the number I'm going to give you is lower than what they could actually capture or the price erosion might ultimately translate to, because they will take a…

Very helpful. Thank you.

Thanks Chris. Next question, operator.

The next question operator question comes from Mark Schoenebaum of Evercore ISI. Your line is open.

Hey guys, thanks for all the detail. I am in agreement with the other analysts on that. A couple of questions. Number one, what was operational HUMIRA growth rates -- operational HUMIRA growth rates quarter on quarter as well as year on year in international markets? The second question is you didn't comment on your tax rate over the long-term. I don't think I saw that in your slides, and I would assume that as the Company diversifies away from HUMIRA, you're going to diversify into more tax optimized drugs -- tax optimized assets. So, I would personally be comfortable modelling a decline in your tax rate. I wanted to hear your thoughts on that and when I do that, and when I use an operating margin of only 51, even though your guidance says, greater than 50, it could be 55 or 60 who knows, I'm getting to an EPS number in 2020 of around $10 a share. I'm just -- I know you're not giving an EPS number, but am I thinking about this all wrong, because most people say I'm not very good with math.

Why don't you cover the tax rate Bill, I'll cove the --

Yeah, so, if you look at this business since we separated from Abbott, the tax rate has been pretty consistently in the 21% to 22% range. That's largely driven by our need for U.S. cash for certain items. So, as we do our LRP again, what we do is, we build it on a fairly conservative basis and what I would tell you is our assumptions are that that tax rate in the 21% to 22% is the right assumption for this business over the next 10 years.

That's because of your repatriation needs. So, imagine the tax rate on single assets that are large, like your new JAK and IMBRUVICA, on a P&L basis, a single product P&L basis would be much lower.

Yeah, but you've got IMBRUVICA which is largely a U.S. product for us from a tax rate. So, that actually lifts the tax rate the other way. So, I mean, you've got a lot of different things in the mix, Mark.

Okay thanks.

So, on the EPS target, I would just tell you that at the end of the day, we built it up from the bottom up and we don't come up with your number. At the end of the day, you're going to assume 50%, 60%, 70% operating margin profile and get pretty big numbers, but if you're going to drive this level of growth, you have to invest in the business in a way that allows you to be able to do that. So I think the numbers we have forecasted certainly represent the top tier in this industry and they're the numbers that we're willing to stand behind. On operational growth internationally for HUMIRA quarter versus quarter, what I'd tell you is this, we sell HUMIRA in almost 100 countries around the world, right and many of those countries have tenders and tenders don't always fall consistently in the same quarter. So, quarter over quarter, doesn't necessarily give you a very accurate picture of how the brand is growing, although I'll address it here in a moment to answer specifically your question. I think the best way to think about HUMIRA internationally, I'd like to choose this year as the example is the [indiscernible] growth rate is for the first three quarters worth of growth and compare it to what the prior year was, I think that's the most reflective way to look at it, and I would say that revenues are up about 8.3% year to date, year-over-year. Volume is up about 10%, so slightly down in price, which is consistent with what we've seen in previous years, nothing unusual there, and market share is stable at just under 34%, versus the prior year, and I would tell you that's well within the range of what we expected…

Rick, I've got a bunch of e-mails in from clients to the answer to my previous question about the $10 number where you said, you didn't come up it. Were you trying to suggest that you came up with numbers higher than that or numbers lower than that? Thanks.

No. I was trying to suggest the number that we communicated is the number that we came up with.

Okay. Thanks a lot.

All right. Thanks Mark. Next question operator.

The next question comes from Vamil Divan of Credit Suisse. Your line is open.

Great. Thanks or taking the questions and again, thanks for all the details you provided. So, one more if I could HUMIRA and then one on a different topic. Just to HUMIRA, I think, obviously a lot of focus on the biosimilars and you addressed that pretty well, I thought, just what about the other sort of innovative products that are coming in to target some of the indications -- I'm thinking about the IL-17, competing, oral JAKs, oral products for Crohn's. I know you guys highlighted what you have in your pipeline but, can you just comment on how you think the market share erosion might be for HUMIRA as some of these new innovative products come into these other indications? Then second just on neurology, this is an area of always struggled a little bit for you guys, so, if you can just touch on that a little bit more, you mentioned Duopa could be a big product, maybe a little bit more around sort of the number of patients you think would be willing to use a product like that, Zinbryta and where does that fit in? Most neurologists we've spoken to, [indiscernible] crowded MS space and even Alzheimer's, you kind of highlight that in the total market opportunity for your products. So, just maybe a little more color on how you see your neurology franchise growing would be very helpful. Thanks.

Thanks Vamil. So, let me start with HUMIRA competition. I think, as you know, this is in particularly take RA as an example, it's a pretty crowded field already, and there's the pretty good mechanisms in there, and yet still the TNF still control the vast majority of this market. It's a tough market to break into even with fairly good profiles of drugs. Now, having said that, I'd say there are some good profiles that are starting to emerge. The IL-17s are a good example. I think IL-17s have a pretty strong profile, but what typically happens in this area is those mechanisms for quite a period of time are relegated to the failure patient population, because physicians are comfortable. There are many other factors that are built into it and they tend to take up that failure population for at least a number of years and that tends to be the areas that they grow in. Now, over a longer period of time, they might have a more material impact, but as I mentioned, our assumption is and I think this is a valid assumption based on our experience in the past is that HUMIRA will have some erosion in the United States, but relatively modest erosion over this five-year period of time, and that because we're assuming biosimilars don't come into the marketplace that is driven by these other innovative products that enter the market. So that is our assumption around that. As it relates to neuro, maybe I'll have Mike talk a little bit about some of the earlier stuff, but I'd say our work in Alzheimer's an example there really isn't anything that's built into this planning period, but --

Certainly, so perhaps to address your question on Zinbryta first. What we see with MS unfortunately is that it afflicts patients, often relatively early in their lifespan. They deal with many, many years of ongoing relapses and ultimately in many patients a downward clinical trajectory and so what that does is it creates a need for different mechanisms. Mechanisms that attack the problem from different directions mechanistically, and mechanisms with considerable efficacy. So, we feel that there is a real place for Zinbryta in the treatment armamentarium particularly when folks are looking for agents that have substantial efficacy as has been demonstrated in that program. When you look at the rest of our neuroscience efforts, apart from Duopa obviously and Zinbryta, they're very early and they're not contributing as Rick said to the financial numbers yet in a large way, but we do feel that we have a number of very promising approaches to go after in the longer-term the neurodegenerative aspects of MS, for example, which is still a large unmet medical need and diseases such as Alzheimer's. So that's a focus on our labs in the early end.

I'll just add a couple of points on Zinbryta, I mean, we're obviously doing a lot of the work to prepare as we anticipate approval of this product, so we've been doing market research and a fair amount of work in preparation and I'd say the profile of Zinbryta is a pretty compelling profile and as Mike mentioned, the unfortunate thing about this disease is that patients relapse and they relapse on average, probably about every 2 to 3 years on the current agents and this is certainly a high efficacy agent, from an annualized relapse rate, reduction and when you look at it versus the active comparator it has good performance. I think the other thing that is appealing to physicians is the compliance aspect of it that from a dosing standpoint, they know they'll have drug on board for an extended period of time. So, I think Zinbryta will have a very important role in the treatment of MS patients and it's going to be one of the things that physicians are able to go to, a more -- I'd say a higher efficacy kind of agent. We don't view it coming in as the first line but certainly as patients rotate through that, we think it will compete quite effectively in that second line.

Thanks Vamil. Operator, next question please.

The next question comes from Alex Arfaei of BMO Capital Markets. Your line is open.

Good morning. Thank you for taking the questions and also thanks for all the details. It certainly helps. I have a few questions on HUMIRA if I may. In 3Q, how much of your 30% growth in the U.S. was volume and price? Our audit suggests it was 11% to 14% volume. So, could you comment on the price component and what are your long-term pricing assumptions in the U.S. for HUMIRA? And a follow up for Rick. I just wanted to make sure I understood your comments earlier, are you assuming no biosimilars of products that compete with HUMIRA in the U.S.? I just want to make sure that -- what your timeline for biosimilar competition for other products is in the U.S. And finally, if you could provide your thoughts about the [indiscernible] versus HUMIRA? Thank you very much.

Why don't you go with the price?

So, our numbers for Q3 -- our volume was higher than what you're seeing in the script, so the way you've got to think about price in the U.S. on the quarter was around a third of the overall growth, was related to price. In terms of over the LRP, look, again we've said multiple times, as we build out our LRP, we try to put in conservative and realistic assumptions. So along those lines we don't take what is currently happening in price and extrapolate that out across the LRP. In the U.S. it is -- where we do think we'll be able to maintain some degree of positive price, but what I would tell you is we're modelling a little lower than mid-single digits on that as you go out over the long range plan period. Ex-U.S., it's actually a negative pricing environment. So, when you actually look at the additive of the two across the LRP, we've got very, very, very low levels of price built in to our forecast.

Then as it relates to biosimilars, I just wanted to clarify, you're talking about a HUMIRA biosimilar or are you talking about a biosimilar to something else?

No, biosimilar of competing products such as Remicade and [indiscernible] in the U.S.

Okay. I'm sorry. So, obviously we're not assuming any -- because of the IP and the litigation strategy we talked about, we're not assuming any HUMIRA biosimilar. I think as you click through the rest of them, as we look at the Enbrel IP, we think they have pretty good IPs, so we're not assuming we'll see Enbrel biosimilars in the United States. Then as it relates to any kind of Remicade, I think it would be a similar scenario to what we see outside the U.S. because it's an infusion product, it doesn't necessarily compete directly against us. Then on Bari, Mike, why don't you cover the head to head on Bari?

Sure. When we look at the Baricitinib head to head data clearly both agents are very active. When we focus on higher levels of response which we think are the most clinically significant. For example, DAS low disease activity or DAS remission, we really see very similar response rate at week 24, and of course also, consider the very long track record with HUMIRA well understood safety and efficacy profile. So, we feel good about the overall performance of HUMIRA over the course of its lifespan and think it will continue to play a very important role in the treatment armamentarium as Rick has already outlined.

Thank you, folks.

All right, thanks Alex and operator, we have time for one more question please.

Thank you. Our last question comes from Colin Bristow of Bank of America Merrill Lynch. Your line is open.

Good morning, thanks for squeezing me in and as others have said, great presentation today. The methods being covered, but on hep C what proportion of your contracts are exposed to competition in 2016 versus in a multiyear and the cargo expectations changed per your performance in 2016 if at all based on the recent label update. Then two, just from a high level, given the sort of focus on drug pricing at utility [indiscernible] recently, could you give us your thoughts on these ongoing debates and whether you anticipate any impact to your business. Thanks.

I'm not sure I could give you the exact percentage of the contracts. I'd say the vast majority of them are protected through -- vast majority of the volume is protected I'd say through 2016, but, let us get back to you with something that's maybe a little bit more specific. As it relates to the label, as outlined in my comments, this was obviously moving from not recommended to contraindicated, and if you look at the patient population in Bs and Cs, it's a relatively small patient population. It's probably something in the 3% or 4% kind of range of U.S. patients. So if you look at it purely from the perspective of that, it wouldn't be a big impact and frankly the fact that we weren't recommended and contraindicated in Cs you wouldn't assume that there was a lot of volume treating those patients anyway. Having said that, I will tell you we've gone out and contacted probably now around 80% of the physicians that prescribed the drug to make sure that they understand the changes in the label. I think that's gone well, and the feedback I'm getting directly back from the commercial organization. So, that is going well. We've gone back to all of our contracted -- our contract managed care contracts and other contracts and that has gone well, they understand it and I think, agree that in the previous label it was outlined in a way that probably there wasn't a tremendous amount of use there anyway. Having said that, I think we have to wait for -- see how this plays out for the next maybe 30 days or so to be absolutely sure, but right now, we are assuming based on everything that we know, that we'll have a material impact on…

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