AbbVie Inc. (ABBV) Q2 2018 Earnings Report, Transcript and Summary

Good morning and thank you for standing by. Welcome to the AbbVie Second Quarter 2018 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 Ms. Liz Shea, 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; Mike Severino, Executive Vice President, Research and Development and Chief Scientific Officer; and Bill Chase, Executive Vice President of Finance and Chief Financial Officer. Before we get started, I’d like to remind you that some statements we make today are or may be considered forward-looking statements for the 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 2017 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. Following our prepared remarks, we’ll take your questions. So with that, I’ll now turn the call over to Rick.

Thank you, Liz. Good morning, everyone, and thank you for joining us today. I’ll briefly discuss our second quarter performance and highlights as well as our full year guidance which we’re increasing again this quarter. Mike will then provide an update on recent advancements across our R&D pipeline, and Bill will discuss the quarter in more detail. As always, following our remarks, we’ll take your questions. AbbVie once again delivered an outstanding quarter with adjusted earnings per share of $2. Representing growth of more than 40% versus last year and exceeding expectations. We also delivered strong top line results in the quarter with global adjusted operational sales growth of 17.1%. This outstanding performance was driven by growth from several assets across our portfolio including significant contributions from HUMIRA, IMBRUVICA, and MAVYRET. We’re extremely pleased with our performance in the quarter and the progress year-to-date. We’ve driven outstanding commercial, operational and R&D execution resulting in strong top and bottom line results. Based on our performance in the first half of the year and the tremendous confidence we have in our business we’re raising our full year 2018 EPS guidance by $0.10 we’re now expecting adjusted earnings per share of $7.76 to $7.86 reflecting growth of 39.5% to midpoint. It’s important to recognize this is the third increase to our earning’s guidance for 2018. A testament to the momentum and confidence we have in our ongoing business fundamentals and underlying performance and we’re raising our guidance despite the anticipated introduction of direct biosimilar competition in certain markets outside the United States in the fourth quarter. So clearly, we expect our performance in the second half of the year to continue to be robust. As I mentioned a moment ago several products within our portfolio are driving strong growth. Starting with HUMIRA which delivered global operational sales growth of 8.2% in the quarter. In the US HUMIRA sales grew 10% driven by strong prescription volume growth across all three categories. Internationally, HUMIRA sales grew 4.4% operationally. We continue to be pleased with the underlying market trends across geographies and therapeutic segments. Global sales of IMBRUVICA were $850 million in the quarter, an increase of more than 35% over the prior year. Globally we’re seeing very strong patient uptake including higher market share and growth across multiple indications. This includes CLL where IMBRUVICA continues to be the clear market leader. We expect this momentum to continue based on the growing evidence illustrating IMBRUVICA’s strong efficacy across the wide range of indications. Global HCV sales were $973 million in the second quarter, again exceeding expectations with continued momentum from the MAVYRET launch. Based on its compelling clinical profile and our commercial execution. MAVYRET has achieved the market leading position in the US as well as strong leadership positions in a number of other major markets including Japan, Germany, Spain, Italy among others. As evident in our results, the overall business continues to deliver robust revenue and EPS growth. Driven by our highly differentiated assets and our outstanding execution. Our business performance is underpinned by strong volume driven growth. Of the more than 17% global operational revenue growth in the quarter roughly 16% was volume driven growth with the remainder approximately 1% driven by price. In addition to the strong financial results, we continue to make excellent progress with our late stage R&D programs. Mike will cover the pipeline in more detail here in just a few moments. So I’ll mention just a few of the highlights. Earlier this week, we received FDA approval for elagolix now known as ORILISSA. For the management of moderate-to-severe pain associated with Endometriosis. A chronic disease which effects approximately three million women in the US. With very few treatments approved over the last 20 years ORILISSA will be an important new therapeutic option for the many women who suffer with this painful condition. We’re extremely pleased with the approved label, which provides physicians flexibility of dosing and duration of therapy. Given the compelling product profile, the disease prevalence and the patient need ORILISSA represents a significant long-term opportunity for AbbVie with multi-billion dollar peak sales potential. We’ve also made two major advancements with VENCLEXTA further strengthening our leadership position in Hematological Oncology. We received US Regulatory Approval for VENCLEXTA in the broader Relapsed/Refractory CLL patient population representing a significant expansion beyond the narrow indication where VENCLEXTA was previously approved. We also submitted our US Regulatory application for VENCLEXTA in AML representing a significant acceleration of the timeline for the sizable follow-on indication. We’ve also made significant progress with our two next generation immunology assets. Upadacitinib and Risankizumab. We recently reported results from the fifth and final pivotal trial evaluating Upadacitinib as a treatment for RA. We’ve been very encouraged by the level of efficacy and the benefit risk profile observed across the entire clinical program. Upadacitinib has the potential to be best in class therapy in RA offering meaningful advantages over products on the market today or those we see in development. We remain on track to submit our regulatory application later this year. Following the completion of our four pivotal studies in psoriasis, we’ve submitted our regulatory applications for Risankizumab both in the US and Europe. Based on the data generated from our registrational [ph] programs, we believe Risankizumab represents a potential best in category therapeutic option. We also believe that with Upadacitinib and Risankizumab along with HUMIRA we have the most competitive and best portfolio in immunology, which should enable us to maintain our therapeutic leadership and drive continued growth. When we launched AbbVie in 2013, we had an important objective to create a robust pipeline for differentiated assets enabling us to drive industry leading growth to the long-term. I can tell you that I’m extremely pleased with the progress that we’ve made towards that objective. As demonstrated this quarter as well as last quarter, IMBRUVICA and MAVYRET are both playing important roles in diversifying our sources of growth. Each driving strong performance along with HUMIRA. With our recent and near-term approvals, we expect even further diversification of growth going forward. This year, we’re seeing VENCLEXTA’s expansion into the broader Relapsed/Refractory CLL population and the launch of ORILISAA for Endometriosis. These are both significant opportunities. In 2019 we anticipate the approval of VENCLEXTA in AML and the launch of Risankizumab in psoriasis and Upadacitinib in RA. Each of these assets has demonstrated best in class clinical results allowing us to significantly enhance our leadership position in these very sizable markets. By 2020 AbbVie will be extremely well positioned with multiple new assets in our portfolio, driving growth. Enabling us to continue to achieve our mission of delivering top tier industry performance. All told now in between now and the expected entry of direct biosimilars in the US. We were poised to launch more than 20 new products or major inductions from our late stage pipeline. Each of these opportunities will contribute significantly to our overall growth. Diversifying our sources of revenue and offsetting the impact of biosimilar competition. So in summary, we’re pleased with our progress and we’re confident in our ability to continue to drive strong growth. We remain committed to achieving our long-term strategic vision for the company, delivering industry leading performance and outstanding shareholder value. With that I’ll turn the call over to Mike for additional comments in our R&D program. Mike?

Thank you Rick. When we launched AbbVie our strategy was to build an industry leading pipeline and a robust R&D engine capable of driving significant and sustainable growth. We’ve made tremendous progress over the past few years and we’re now entering a period where a large number of assets have either already transitioned to commercialization or are preparing to do so. Our R&D engine has been very productive over the past two years. Specifically we’ve received a number of major regulatory approvals including VENCLEXTA and Relapsed/Refractory CLL. IMBRUVICA in Marginal Zone Lymphoma and graft versus host disease. MAVYRET and HVC and ORILISSA and Endometriosis. We’ve reported positive data from nearly a dozen key registration enabling clinical programs including Upadacitinib in RA. Risankizumab in psoriasis. VENCLEXTA in Relapsed/Refractory CLL and AML. IMBRUVICA in frontline CLL and elagolix in Endometriosis and uterine fibroids to name a few. We’ve been very pleased with the data generated across these programs. As each asset has proven to be differentiated relative to the current standard of care. We’ve also seen promising proof of concept data from numerous mid stage programs which we’ve advanced into registrational studies. These includes Upadacitinib in Crohn’s Disease, psoriatic arthritis and atopic dermatitis. Risankizumab in Crohn’s Disease and VENCLEXTA in multiple myeloma and mantle cell lymphoma. The data we’ve produced and the regulatory success we’ve to-date, reinforce our view that the assets we’re developing will achieve strong competitive positions within their respective markets. And we’ve also continued the significant progress in the recent quarter, which I’ll now spend a few moments highlighting. In immunology, we’ve made significant progress with Upadacitinib and Risankizumab, our two late stage assets with best in class potential across a broad range of indications. In the quarter, we reported top line results from the select early study which evaluated Upadacitinib, our JAK1 selective inhibitor as a monotherapy treatment compared to methotrexate in methotrexate-naive patients. Similar to the efficacy observed in the previous four SELECT studies in its fifth and final registration trial. Upadacitinib drove very high levels of response on all clinical endpoints and importantly, on the more stringent endpoint such as ACR50, ACR70 low disease activity and DAS remission. In the study both the lower and higher doses of Upadacitinib met the primary and all ranked secondary endpoints at weeks 12 and 24. Both doses also significantly inhibited radiographic progression at week 24 compared to methotrexate. These results support the potential of Upadacitinib as first line monotherapy in methotrexate-naïve RA patients. We’ve evaluated Upadacitinib in a comprehensive set of studies in patients with moderate-to-severe RA. This includes head-to-head study against HUMIRA, the currents standard of care and additional studies conducted in a broad range of clinical settings including patients who are naïve to methotrexate therapy at one end of the spectrum and very difficult to treat patients who have failed one or more biologic therapies at the other end. Based on the data generated in our program, we remain very confident in the benefit risk profile of Upadacitinib and believe that it will offer meaningful advantages over products on the market today or in development. Following the successful completion of our fifth and final study, we remain on track to submit our regulatory application in the fourth quarter of this year. Moving now to our other late stage immunology asset; Risankizumab. We recently submitted our US and European regulatory applications in psoriasis. Based on the very high and durable rates of skin clearance we saw in the registrational studies. We believe Risankizumab has the potential to significantly improve upon current treatment options for both bio-naïve and TNF inadequate responder patients with moderate-to-severe psoriasis, while offering the convenience of quarterly dosing. Moving now to oncology, where we continue to advance our programs for VENCLEXTA and IMBRUVICA. We’ve seen very strong activity across a broad range of hematologic malignancies with these two therapies. Demonstrating their potential to transform treatment by driving better long-term disease control and better outcomes for patients. In June, we received FDA approval for VENCLEXTA in combination with rituximab in patients with Relapsed/Refractory CLL. Substantially expanding the patient population for which VENCLEXTA is approved. This approval is based on the Phase 3 MURANO study, where combination treatment with VENCLEXTA and rituximab showed a profound improvement in progression free survival. This combination also showed high and durable rates of MRD negative response compared to BR. A measure that is predictive of improved clinical outcomes in patients with CLL. VENCLEXTA plus rituximab combination therapy has the potential to be a new standard chemotherapy free treatment option and we’re excited to bring this new therapy to the broader Relapsed/Refractory CLL population. In the quarter, we also submitted our US regulatory application for VENCLEXTA as a treatment for first line AML patients who can’t receive high dose induction chemotherapy. AML is one of the most aggressive hematologic malignancies with a very low survival rate and few options available for patients who can’t receive intensive chemotherapy. VENCLEXTA has demonstrated rapid, deep and durable responses in these patients. Based on the Phase 2 data recently presented at EHA, we’re seeing response rates in excess of 70% with VENCLEXTA in combination with hypomethylating agents which represents a meaningful improvement relative to the current standard of care, where response rates range from 10% to 30%. We believe this could be an important new treatment option for the substantial group of patients which represents roughly 50% of the frontline AML market. We expect to see data from several other important VENCLEXTA studies over the next 12 months, this includes data from the Phase 3 CLL 14 study and frontline CLL later this year and the Phase 3 BELLINI study and multiple myeloma in the first half of 2019. Turning now to IMBRUVICA, during the quarter we reported data from two important trials that expand and strengthen our data set in CLL. The iLLUMINATE and CAPTIVATE studies. Results from the Phase 3 iLLUMINATE study which evaluated IMBRUVICA in combination with Gazyva in frontline CLL showed a significant improvement in progression free survival in patients treated with IMBRUVICA plus Gazyva compared to patients treated with the combination of Gazyva and Chlorambucil. A regimen which is currently recommended as a Category 1 treatment within the NCCN guidelines. We also recently presented data from the Phase 2 CAPTIVATE study evaluating IMBRUVICA in combination with VENCLEXTA in frontline CLL. We are very encouraged by the early results of this study where approximately 90% of patients achieved responses with no detectable minimal residual disease following 12 cycles of therapy. Illustrating the potential benefit of combining these two agents to deliver deep responses in CLL. iLLUMINATE and CAPTIVATE are just two of several ongoing studies evaluating IMBRUVICA alone and as a combination therapy versus regimen such as GC, BR and FCR often considered the standards of care in the treatment of CLL. Over the course of the next few years, there will be additional data readouts for IMBRUVICA in the frontline CLL setting that we believe will help drive further penetration. Finally, in the area of women’s health as previously noted we recently announced the FDA approval of ORILISSA for the management of moderate-to-severe pain associated with Endometriosis. ORILISSA is the first and only oral GnRH antagonists approved for women with this condition and the first oral treatment for these patients in over a decade. We also continue to make good progress with our pivotal program evaluating elagolix in combination with low dose hormone add-back therapy in women with uterine fibroids. Detailed data from our pivotal trials in this indication will be presented at a medical meeting later this year and will support our regulatory submission in 2019. So in summary, we’ve had several important data readouts, regulatory submissions and approvals in the first half of the year and we look forward to updating you on our pipeline as it continues to progress. With that, I’ll turn the call over to Bill for additional comments on our second quarter performance.

Thanks Mike. As Rick mentioned we’re very pleased with our outstanding second quarter performance. Our year-to-date underlying business fundamentals remain strong and we’ve entered the second half of significant momentum. Total adjusted net revenues for the second quarter were $8.3 billion up 17.1% operationally excluding the impact of foreign exchange. We reported adjusted earnings per share of $2 up 40.8% compared to the second quarter of 2017 and exceeding our guidance range for the quarter. HUMIRA global sales were $5.2 billion up 8.2% operationally. In the US, HUMIRA sales increased 10% compared to the prior year with high single-digit prescription volume growth and roughly 3% favorable price. Wholesaler inventory levels remains below half month in the quarter. International HUMIRA sales were more than $1.6 billion up 4.4% on an operational basis. We continue to see very good growth through the first half of 2018 despite increasing competition. With its unique product profile years of physician experience and broad set of indications HUMIRA remains the leading global frontline therapy across all approved indications. Global IMBRUVICA net revenues were $850 million up 35.6% year-over-year with continued strong uptake in CLL as well as other approved indications. Global HCV sales were $973 million with MAVYRET sales of $932 million. The pace of MAVYRET’s uptake continues to exceed expectations driven by strong market share performance globally as well as higher treatment volumes from warehoused DAA failure patients in certain markets. Global sales of Duodopa, a therapy for advanced Parkinson’s disease, grew 25.1% on an operational basis in the quarter, and we also saw strong operational sales growth from Creon which was up 11.4%. Turning now to the P&L profile for the second quarter, adjusted gross margin was 80.5% of sales compared to 82.3% in the prior year. The decrease versus prior year reflects the year-over-year dilutive impact of partnership accounting as well as exchanged impacts of hedged currencies. Adjusted R&D was 15.3% of sales in the quarter, supporting pipeline programs in oncology, immunology as well as other areas. Adjusted SG&A was 19.9% of sales in the quarter, a decrease of 40 basis points versus the prior year, reflecting sales leverage and operational efficiencies. The adjusted operating margin was 45.3% in the second quarter an improvement of 90 basis points versus the prior year. Net interest expense was $272 million in the quarter and the adjusted tax rate was 9%. As Rick mentioned based on our performance year-to-date and our outlook for the remaining two quarters. We’re raising our full year adjusted earnings per share guidance range to $7.76 to $7.86 representing growth of 39.5% at the midpoint. This guidance assumes revenue approaching $32.5 billion inclusive of recent negative currency dynamics. This forecast comprehends full year operational performance approaching 14.5% up 1% from prior guidance. At current rates we now expect a foreign currency benefit of less than 1% for the full year sales. This forecast includes the following updated assumptions for our key products. Despite less favorable exchange at current rates we continue to expect international HUMIRA sales to approach $6.4 billion this year. For IMBRUVICA, we now expect global revenues to AbbVie approaching $3.4 billion with US sales approaching $2.8 billion. Given the momentum and performance in HCV, we’re raising our forecast and now expect global sales above $3.5 billion. For ORILISSA, due to the timing of the launch we expect full year sales of less than $50 million in 2018 as we continue to create awareness and build the market for this important new treatment option. Turning to the P&L for 2018, we now expecting adjusted gross margin ratio of above 80.5% which includes exchange impacts from weaker hedged currencies. We are now forecasting SG&A of approximately 20.5% of sales reflecting investments to maximize the potential of assets launching in both 2018 and 2019. We expect full year R&D expense approaching 16%. And we’re now expecting adjusted operating margin above 44% roughly 150 basis points above prior year. All other full year guidance assumptions remains unchanged. As we look ahead into the third quarter, we expect adjusted earnings per share between $2 and $2.02. Our third quarter adjusted EPS guidance excludes roughly $0.23 of non-cash amortization and other specified items. We’re forecasting operational revenue growth in the third quarter of approximately 17%. Holding exchange rates constant at current levels, we would expect foreign exchange to have an unfavorable impact on sales growth of approximately 1% in the third quarter. For US HUMIRA, we expect sales growth in the third quarter of approximately 11%. We expect international HUMIRA sales approaching $1.6 billion assuming current exchange rates. For IMBRUVICA we expect US sales approaching $725 million and for HCV, we expect global sales of approximately $850 million. Lastly, we expect the adjusted tax rate to be approximately 9%. In summary, we are very pleased with our performance this quarter as we’ve driven strong revenue and EPS growth again while continuing to advance our strategic priorities. We expect this momentum to continue in the second half of 2018 putting us in a strong position to deliver top tier industry growth once again this year and with that, I’ll turn the call back over to Liz.

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

[Operator Instructions] our first question today is from Jami Rubin from Goldman Sachs.

I know there are whole bunch of questions on this call regarding rebates. Let me just ask you Rick, sort of bigger picture question. The gap between AbbVie’s industry leading performance would you continue to execute on time and time again and the stocks below evaluation and lower valuation this year and investor lack of confidence has never been wider. What do you do to close that gap? Is it deal activity? Do you feel that’s what needs to happen, is it share buyback, is it committing to 50% dividend yield or dividend payout ratio, are there other structures that you’re considering such as spin outs? In addition Rick, can you clarify your comments that you made during our conference last month about doing $20 billion to $30 billion deal. I think investors took that as a signal that something is going to happen sooner, rather than later. Maybe if you could just address those please, thanks very much. A – Rick Gonzalez: Thanks Jami. This is Rick. Appreciate the question. Maybe let me answer is first by framing, how I view AbbVie. There’s a lot of scepticisms, concern about rebates about biosimilars. Frankly some of that is reasonable, some of it is driven by people who want to illicit for their own personal gain, I don’t think that’s quite as reasonable but its reality. And so I think If you step back and look at AbbVie and what I would say [indiscernible] objective way. The way I would evaluate AbbVie is the following. Look I’d start with how we perform. We’ve been in existence now 5.25 years, 22 or 23 quarters we’ve had. We’re clearly a company and management team that lives up to the commitments that we make to investors. We take that extremely seriously, we never once disappointed investors and back in most of those quarters, much like this year we have exceeded the expectations that we have set from investors. Every year since I can remember there is been [indiscernible] about HUMIRA. Biosimilars coming in 2018, new mechanisms of action, etc. you’re never going to make $18 billion etc. we have beat every single one of those expectations along the way. We have built two assets in additions to HUMIRA now that are both approaching $4 billion, IMBRUVICA and MAVYRET. Two major mega assets that are part of our portfolio and our business going forward. If you look at VENCLEXTA, it’s on the verge of becoming a major asset for us with the MURANO approval and the approval of AML next year. We’ve a tremendous amount of confidence in what we think VENCLEXTA can do. If you look at ORILISSA. It was approved just recently. It has an excellent label and that is clearly a multi-billion asset for us. If you look at the clinical trial from Risa and Upa, it clearly supports these two are best in class assets and are going play a very important role when biosimilars enter the marketplace in the US and we have a lot of confidence in what that portfolio is going to be to do and how it’s going to be able to perform. If you look at 2019 and 2020, so out in sort of the near future here. And you look at AbbVie we’re going to have seven assets. HUMIRA, IMBRUVICA, MAVYRET, VENCLEXTA, Upa and Risa, which will all either be multi-billion assets or on their way to being multi-billion assets. For a company that started five an half years ago, with one asset HUMIRA, the HUMIRA company. It will tell you we have made impressive progress and I think the future is even brighter than what the past is been going forward. So I’ve tremendous confidence in the growth trajectory of the company going forward and frankly the strategy we put in place back in 2013 is playing out pretty much exactly as we had planned. It doesn’t mean there aren’t changes and things that you have to do along the way to adjust to different environmental factors. Over the long haul, investors will reward long-term performance and there is not a company that I’m aware of that’s performing better than us and there’s not a company that has performed better over the past five years. If you talk about it, we’re delivering 40% EPS growth this year and people will say, but you’ve gotten benefit of tax. Okay, so back the benefit of the tax out. We’re delivering 25% EPS growth this year on an operating basis. There aren’t many companies that’s delivering 25% EPS growth. In fact I can’t think of another one our size, that’s delivering that level of growth. I’d also say that we have delivered a tremendous amount of cash back to shareholders to our dividend increase kind of our buyback programs. And certainly we have shown that we are not shy about doing M&A, when we think we need it and we find the appropriate kinds of assets. As it relates to the $20 billion to $30 billion comment that certainly took on a life of its own. Far greater than why we would have anticipated. I mean my objective there was to frame how we viewed large bolt-ons like a pharmacyclics like asset. As we look at, at how we’re going to build this business going forward. We obviously have a commitment that we’ve said over and over again and that is, a commitment that we’re going to deliver top tier performance and we’re going to do it over the long-term and we’re going to grow through the biosimilar impact that we knew we were to phase from day one and I think, how we’ve executed around the biosimilar issue has been excellent, outstanding in fact I would say. And so we’ve built a pipeline that for the most part with one exception [indiscernible] which was a relatively small asset in small indication, we have delivered on every single one of the assets in our late stage pipeline that we’ve talked about. And now you’re starting to see the benefit of that, you’re going to see the benefit of it in 2019 and again in 2020 as these products start to build. And so we look at going out and building the business around the premise of we want to continue to be able to drive top tier growth. When we find the right kind of opportunity, that we think fits strategically that we believe we can get a good return for our investors, fits into what we’re good at, then we’ve shown, we’re not shy, we’ll act on those. Having said that, I would say the majority of what we’re looking at and we will do will be smaller kinds of products assets that fit into our portfolio. I’d tell you today there aren’t a lot of assets in our opinion that either from a valuation standpoint we can get the right return or they fit strategically on what we’re doing. Now if the right thing comes along I’m certainly not saying to you, we wouldn’t act. We certainly have the cash flow to be able to react and if it [indiscernible] enhance our long-term ability to be able to deliver on our mission, we would certainly do that. But as far as $20 billion to $30 billion I can tell you there’s nothing in the horizon right now. What I was trying to do was frame for you, how we viewed it. But we found the right thing, we would but we haven’t found anything that looks like that right now. And fundamentally if I look at our pipeline, I look at everything that’s going on in the marketplace. I still have a high level of confidence this pipeline will drive us through where we need to go.

Thanks Jami. Operator we’ll take the next question please.

Thank you. Our next question is from Steve Scala from Cowen. Q – Steve Scala: As we approach the launch of HUMIRA biosimilars in the EU, is anything shaping up differently then you would have expected either positively or negatively? In the past you’ve spoken to that the fact that you’re implementing defense strategies and I’m not aware that you’ve amplified on them, perhaps you could now. Secondly has the Risankizumab filing been accepted and is there a PDUFA date and then thirdly can you give us VENCLEXTA sales in the second quarter? Thank you. A – Rick Gonzalez: Steve, this is Rick. Let me take the first one, Mike take the second and Bill can take the third and maybe I can add some color onto the third. So as far as biosimilar assumptions in the EU. I’d say there is nothing different from what we had anticipated. I recently had a review I’m going to have another review in a month or so with the team. I’d say everything is tracking as we had assumed it would track, so and we certainly wouldn’t, if we had concerns we certainly wouldn’t be raising guidance at this point because we’re already delivering tremendous levels of performance if we had any level of uncertainty and based on what I said a few moments ago, we take extremely seriously that we’re never going to miss. We wouldn’t be raising guidance at this point, unless we had a lot of confidence in what that fourth quarter was going to look like. Now am I going to go through the defense strategies, I apologize on that because unfortunately it’s not my objective to telegraph to all of our competitors, what our defense strategies are? But what I can tell you is, thus far it is playing out exactly as we had planned it to play out and certainly as we go through the fourth quarter all of our are going to get a lot of clarity, on with that quarter looks like. I think buyer actions you can probably tell, we feel about it. But we’re all going to know here soon. And I have confidence in how we’re going to execute against that.

Okay, so this is Mike. With respect to the Risa file, the file was submitted in April. It was accepted on scheduled, so it would be June. We don’t typically give exact PDUFA dates, but you can do the math from there. It’s a standard 10 plus 2 review, so I call it – and although it’s very early what I would say is the file is going very smoothly and matching our very high expectations.

VENCLEXTA sales in the quarter were $65 million. A – Rick Gonzalez: Thanks for that, that’s accurate. I will say that since the MURANO approval, we have seen an inflection point in patient starts. We track patient starts on VENCLEXTA like we do on other drugs. And so we have seen a fairly significant uptick in patient starts and so we are I think we’re encouraged based on what we’re seeing here now. It’s obviously very early since but I think if you look at that data, you look at the position, you look at the feedback that we’re getting from KOLs [ph] about their excitement about this asset and most importantly if you look at the benefit they can provide patients in this Relapsed/Refractory setting particularly patients who have failed BTK inhibitor. I think it’s a tremendous opportunity going forward for us. And I think another big opportunity for VENCLEXTA is AML. This is a very serious disease has bad outcomes for patients, particularly patients that can’t tolerate intensive chemotherapy and this is an excellent new therapy for those patients and it provides significant benefit for those patients and so I think our ability to have a big impact in AML is a high probability.

Thanks Steve. Operator next question please.

Thank you. Our next question is from Jason Gerberry from Bank of America. Q – Jason Gerberry: I appreciate the guidance on elagolix launch for this. Could you talk a little bit more about how that launch progresses what I mean by that is, is the slow early launch is it more to do it educating the docs around the monitoring requirements are in the label or is it just difficult revenue recognition early on just because of presumably early access barriers? My second question, I’m not sure if you’re going to be able to answer this, but can you just talk a little bit about the differential gross margin profile for HUMIRA US versus ex-US? Just wondering because the price point is so different on those and just kind of curios, do you guys still kind of standby the 50% operating margin target by 2020? Thanks. A – Rick Gonzalez: First on ORILISSA there isn’t any monitoring requirements in the label, but maybe let me back up a little bit and talk about what are the key attributes of this product in order for it to be successful and then I’ll talk about the ramp. So if you think about this area, what you would want to get the maximum value out of an asset in this area is, one you want a drug that gives high levels of efficacy, has a relatively clean safety profile, fast on, fast off because many of these women are reproductive age and they want to, if they choose to become pregnant or try to become pregnant, you want a drug they can stop taking and therefore they can move forward from a pregnancy standpoint. You want a label that allows for clinical diagnosis not diagnosis by lab, which is what we have. We wanted two doses because you have different levels of pain among these women and so you want to be able to titrate the dose depending upon their level of pain and your ability to be able to control that pain overtime. We’ve obviously gotten that in the label. You want the ability to be able to maintain therapy for a relatively long period of time and we were extremely pleased with the duration of the low dose being two years and you don’t want monitoring or any kind of black box for a drug of this size or of this nature rather. So we’ve gotten everything that we hope for in the label. We priced it in a way that it’s design to get relatively rapid uptake, it’s price at roughly 30% lower than Lupron which is one of the competitive alternatives, that’s available and so I think we have priced it in a way that should enhance the length. Now having said that, there hasn’t been a therapy new therapy in this area now, 15 or 20 years and because of that physicians aren’t used to prescribing medical therapy for it. So and patients aren’t necessarily used to seeking therapies other than paying management kinds of therapies for it. And so there is an education element that has to occur. Now we start at disease awareness campaign already, we started it a couple of months ago and we’re going to continue to run that disease awareness campaign. I think the early returns would suggest it’s working well. six months post the approval we’ve launched then a branded DTC campaign for the drug and so it’s more a function of just getting the patients engaged in a way that they go to their physicians and seek therapy for this condition and number two, then educating physicians what are the attributes of this product and how should it be used? And so that drives a different ramp then and HCV is an example or you get a very rapid update. So it has a softer ramp on the front end because of that. but I’d say, if I look at every attribute of the product from a label standpoint all the attributes of the product and we’ll repriced it or designed to ultimately give you maximum value and we believe this is a multi-billion opportunity for us.

So Jason its Bill Chase on your two questions regarding gross margin and operating margin. We’ve never been specific around gross margin of HUMIRA in certain geographies but you’ve obviously noted the fact that the price point outside of the US is lower and therefore there is less profit. That said, if you look at on a percentage basis whether it’s in the US or outside of the US HUMIRA is still a profile and profit generator and I don’t think you want to be necessarily of the opinion that it would be massively lower based on pricing. So but I can’t give you a whole more guidance from that. And then with operating margin, yes I mean our intent is still to aim for that 50%. If you look at the progress year-to-date, we’re going to be up about 1.5 points versus last year, but what people don’t actually realize is that is inclusive of a lot of dilution related to both partnership accounting and the stem and the idle. If you squared those away and did apples-to-apples, we’d probably about 350 basis points higher still yet. Now of course those investments are exactly the type of the investments you want to make, we’ve been happy taking that near term dilution on operating margin in order to have product like Risa or the ability to have the optionality of Stem. So we’re pleased with our progress. I think what you need to watch from here is two things. First of all the roll off of the rest of the HUMIRA royalties that really kicks in the back half of this year and then again in 2019. As well as the contribution of a more rapidly growing top line and as products like Risa launch for example and Upa and ORILISSA. You should definitely see some real positive [indiscernible] in P&L.

Thanks Jason. Operator next question please.

Thank you. Our next question is from Josh Schimmer from Evercore. Q – Josh Schimmer: For ORILISSA do you expect hormone add-back will ultimately lift the limited duration of use recommendation on the late month, if so when do you expect that would happen? And then is the week stage pipeline program maturing to commercial assets. What do you see is the key early and mid stage programs you’d emphasize is best positioned to take replaces? Thanks.

This is Mike, I’ll take that. We’re pursuing Phase 3B program for ORILISSA looking at the ability of low dose hormonal add-back to mitigate some of the anti-estrogenic effects are intrinsic to this mechanism of action. We would expect that would allow for longer duration of therapy and we already feel pretty good about the tiers we have, but then maybe some women who knew even more than that and add-back maybe a route, to allow that to happen. We’ve not given specific timing on that study or on subsequent label changes because we’re still in the execution phase, but it’s something that we are progressing very nicely. With respect to the pipeline, as you point out we have a number of assets that are transitioning into commercialization. These are the assets for which we’ve been delivering positive Phase 3 data pretty consistently over the course of the last couple of years and we’ve paid a lot of attention to making sure that the pipeline is full behind that. What I would point to is a number of assets in our early oncology pipeline. We’ve invested a lot to make sure that pipeline is robust. We have on the order of about 18 programs in the clinic in early oncology and that number changes day-to-day as we advance programs, but that’s very robust across a number of areas. We have our stem [ph] [indiscernible] pipeline we have our early immune-oncology programs and some of those are producing very interesting early data, late preclinical and early clinical data and we have other programs aimed at our areas of expertise like apoptosis as one example. So we have a very robust pipeline there that will drive future growth we’re quite confident and outside of oncology we’ve also invested a lot in our pipeline. We’ve invested in our early immunology pipeline with a number of assets now either in Phase 2 or post enter Phase 2. These include things like our TNF steroid, immunology ABC platform which uses a steroid [indiscernible] non-acidic toxic [indiscernible] with the goal of driving very differentiated response in patients with RA and other TNF mediated diseases and if successful that could be a platform that we could apply to other disease states as well, with other targeting antibodies. We have a number of small molecule programs like our BTK and BTK JAK inhibitor combo programs and we have a number of very interesting programs in inflammatory bowel diseases like our CD40 program that is moving forward therein and many earlier than that. so it’s a overall, we put a lot of focus, a lot of attention into making sure that early pipeline is robust and will drive the next generation of product launches and next generation of growth. A – Rick Gonzalez: I mean only thing I’d add Josh, this is Rick. Is if you think about the strategy we had with HUMIRA, it was a strategy where we tried to maximize the value of the asset by identifying other disease states where that mechanism could be successful and provide a good clinical benefit. As you look at things like Risa and especially Upadacitinib. The breadth of that mechanism I think we’re equally as excited as we were with HUMIRA that it will allow us to be able to expand the indications fairly significantly overtime and remember those are going to come out more in a 2021, 2022, 2023 timeframe. So going in areas like Crohn’s Disease like atopic dermatitis which we’ve seen impressive data. Those are big opportunities, they’re big markets that too is going to add to our ability to be able to continue to grow and add on significant opportunities in the pipeline overtime, in addition to our earlier stage or mid stage pipeline as Mike mentioned in oncology and immunology as an example.

Thanks Josh. Operator, next question please.

Thank you. Our next question is from Chris Schott from JPMorgan. Q – Chris Schott: First, can you just talk about the President’s blueprint for reducing drug cost and potential changes to rebate structures? I know there’s a lot of uncertainty here, but we want your perspective on A; how likely you think that we’ll see changes to the current industry pricing structure and B; how you think about that and prepare for any potential changes from an AbbVie perspective? My second question was on the outlook firm for HCV from here, you’ve always have a ton of success in this business this year. You’re talking about north of $3.5 billion of revenue, but we’re seeing step down 3Q versus 2Q. how [indiscernible] how do you think about the trajectory for HCV as we think about the second half of the year, then we start looking out in the future, is this the business that you can maintain at this level or do we start to think about this stepping down in the next few years? Thanks so much. A – Rick Gonzalez: Okay, Chris. This is Rick. I’ll take those two. So I think as we think about the blueprint that has come out from the administration. I’m saying in our view we believe it’s an important step to address probably one of the biggest challenges that we face both as a nation as well as an industry and that is the significant burden out of pocket cost for seniors in Medicare around co-pay and the donut hole. I mean that’s a significant challenge and I think it’s something that we have to be able to wrestle to the ground. I would say we’re very supportive of the idea, of changing a structure where the net price how the co-pay where paid against. I think that’s a fair and very reasonable thing to ultimately implement. And I’d also say, that if you look at the blueprint it’s probably the most comprehensive look that we’ve seen in a very, very long time at the system and looking at ways to ultimately improve the system overall. So we’re encouraged to continue to work with industry to provide feedback and to provide feedback directly around the blueprint, we’d be interested in making sure that we come forward with solutions that will work. Now it’s little early in the process, so there’s not a lot of specificity yet on what some of those changes are, so it’s a little difficult to look at it yet and determine in tax on the business or any of those kind of things, but I’d say generally speaking when we look to the framework. At least for AbbVie’s business it was, there were probably more positives than there were negatives based on the kinds of products that we have. As it relates to rebates, I know there is a lot of debate on rebates and I think it is important for people to understand. I think some of the facts around rebates. When we do rebates the same as you view a discount. Okay, so from our perspective they are one and the same. Essentially we provide a rebate to a managed care group or a PBM as part of a position to be able to get a formula in position. And in fact, if you look at Medicare. Medicare typically has a higher rebate in fact I’d say it does have a higher rebate on average across the Part D plans for something like HUMIRA then the commercial plans get. Even though it only represents about 15% of our overall business for HUMIRA. So we take it very seriously how we negotiate for Medicare business, but I think there is also a lot of misconception, as it comes to rebating and the importance of rebating and what really drives HUMIRA’s success on these managed care contracts. Certainly getting access in the US is an important issue for any product in any category and we – role in that, but if you look at HUMIRA I think there is four, five important points that investors need to keep in mind. One is, if you look at our percent rebate as it relates to the competitors rebates I would tell you that, we’re certainly nowhere near the highest and in fact, we’re probably in the middle or slightly below the middle from a percent rebate standpoint. The second thing I would say is, if you look at the cost of therapy for HUMIRA for those assets that are on contract again we’re not the highest price product on contract and we’re not the lowest price product on contract. We’re pretty much in the middle of the pack. The third thing, I think this is a very important issue, over the course in the last couple of years most covered lives in the United States have moved to this open formula race [ph]. And those [indiscernible] typically have between five and seven products on contract, with HUMIRA. And HUMIRA does extremely well in an environment where there is full choice. Physicians have total choice to prescribe any one of those drugs and HUMIRA has maintained it’s positioned as the number one product for capturing naïve patients. And so it’s not like we had this position where we have exclusive contracts where physicians have to prescribe HUMIRA. They prescribe HUMIRA because of the attribute to the product, the experience they’ve had, the comfort they’ve had with the safety profile of it and the rest of the attribute to the product. And I think what further illustrates that is, look we compete in every socialized health care system in the world, none of those systems have US Dollar rebates. Physicians have the choice to prescribe any drug is reimbursed in that country and if you look at our market share, if you look at our volume growth, if you look at the percent of naïve patients that we capture it’s very similar in let’s say Europe, to what it is in United States and so that tells you, it’s not rebates that are driving this. It is the attributes of the product and our ability to be able to execute. And so if, I think it would be disruptive to do dramatic things to the rebate but I’d also tell you, I don’t know that there is a way to make those changes any less disruptive way, but what I can tell you it was [indiscernible] is whether we had a rebate based system or we had a discount base system. It doesn’t change our business model. One way or another. I think we could operate under either one of those and I don’t think anybody is contemplating getting rid of discounting altogether. So we’ll have to see how it plays out overtime, but I can tell you we’re confident in what are fundamentals that drives HUMIRA and what’s our ability to be able to continue to drive that level of performance. HCV. So right now we’re forecasting a step down in the third quarter. It’s primarily driven by two sets of assumptions, one is Japan. And in Japan, I think we indicated in the call last quarter, we had a number of patients that were DA failure patients that were in the system getting retreated. I can’t tell you that there is perfect data in Japan on how many of those patients there are, but we had forecasted that would go down somewhat and the second quarter and we continue to go down in third and fourth quarter. It didn’t go down as much as we had assumed in the second quarter, it did go down some, but it didn’t go down as much as we had assume. We’re assuming another step function down of those patients in third and fourth quarter. It’s hard to tell whether that’s going to happen or not, we’re going to have to see, how it plays out, but we normally will operate in a conservative mode and area where we don’t have good data to be able to predict it. The second area is the US and again it’s a similar phenomenon, as we were seeing patient volumes higher than we would have expected. Again we had projected that they would come down somewhat. In second quarter we didn’t see that come down, we’re projecting some reduction in patient volumes in the third and the fourth quarter. We’d love to see how that plays out, but that’s the basic difference. Bill, anything you would add?

No, I mean market share is phenomenal, it’s really just the market call.

Thanks Chris. Operator next question please.

Thank you. Our next question is from John Boris from SunTrust. Q – John Boris: Rick, if we look at the word interchange ability FDA withdrew some guidelines there but there continues to be a lot of saber rattling around that such as having proprietary manufactures tightness specification on there, manufacturing biologics to make it easier for companies to get into the market. There’s also some saber rattling around settlements most notably having the FDA [ph] look at settlements on a prospective versus a retrospective basis. Just your thoughts on those two potential risks on HUMIRA. And then last question just has to do with, the phases that you laid out at a competitors conference. Obviously Phase 1 since the spin in early 2013 operational execution has been superb. Phase 2 pipeline delivery and really where investor has been focused is Phase 3 your build out in solid tumors and potentially other areas such as neurosciences. Just your thoughts over the long-term on Phase 3 and the build out in that phase. Thanks. A – Rick Gonzalez: All right, thank you John. So I’ll cover maybe the first two questions and will have Mike cover question number three. If you look at interchange ability. I would say FDA certainly the discussion around this has ramped over the last several months I would say, but if you actually go back year and half or so ago, the FDA had come out with some guidance around interchange ability, what we needed to do to be able to have an interchangeable biosimilar. And we’re switching studies, I’m sure most investors are familiar what the requirements were. And so at that point, when we were doing our LRP, we made the decision the conscious decision that we would dial in interchangeable biosimilar, [indiscernible] mean interchangeable biosimilar, but I think the prudent approach would be to dial again. So in all of our long range plans we had assumed that there would be one at the point of entry in the US, there would be US at least one interchangeable biosimilar in year one and multiple interchangeable biosimilars in year two and beyond. So I would say we’d dial that into our assumptions because we believe that was the intent of the FDA was to move in that direction. And I’d say that I think that became a prudent assumption because that clearly is, I think the direction that they’re ultimately going in. and so I mean it certainly changes some of the dynamics around how we think about it, but I don’t think it fundamentally the most significant dynamic and that is, we have always said when biosimilars enter the market, when they’re available to be able to enter the market, that we will compete on price in that competitive environment to maintain the vast majority of the line. And that’s certainly good for the healthcare system and I think if you look at the free market system that exist today and you look at examples where that competition has played out like HCV and example, the system gets a huge benefit from it. And so I’d say based on our long range plan, there is nothing in the feedback we’ve seen so far around the biosimilar plan that is significantly different than what we already assume. As it relates to settlements, I think that is unfortunately an area where over the last few weeks or few months, there has been a lot of discussion about the HUMIRA patent state [ph] and our licensing agreements whether that was direct or indirect, that’s not accurate and certainly isn’t complete and so I think it is important sort of set the record straight as it relates to that because we have been very thoughtful about how we did this. So I’m going to cover a couple of points that I think are important, but what I would say on the front end of the system or the front end of my comments rather, is there’s nothing about our intellectual property around HUMIRA or the licensing agreements that we done that we’ve entered into so far, that’s anything close to gaining the system or operating around some set of loopholes. Let’s start with the patents first, we obviously have a robust patent portfolio that protects our investment HUMIRA’s innovation, manufacturing, formulations and methods of use, those are the major areas that we have [indiscernible]. We’ve invested heavily in HUMIRA over the course of the life of HUMIRA. It’s important to recognize it was the first FDA approved human monoclone antibody and we invested a tremendous amount and research and development to expand the approved indications to the 10 different distinct disease states that HUMIRA operates in now. And we’ve improved in the applying to manufacturing and the formulation of HUMIRA overtime and there’s nothing inappropriate about protecting that investment and innovation. In fact I’d say it’s a hallmark, that our society here in the US being able to protect through the IP system your innovation. Secondly I’d say is, if you look at – there’s a mechanism by which people can challenge patents in the US. And if you look at our US patents they’ve been challenged now 20 times in IPR’s at the USPTO. And despite the fact that, in IPR process there is a lower burden approved for invalidity and generally, you get a fairly high invalidation rate in IPR proceedings. The HUMIRA patents have done extremely well. Off the 12 HUMIRA patents that have reached banality in the IPR process, nine have been found to be valid. Further, the PTO has rejected eight challenges the formulation patents and those patents expire between August of 2022 and November of 2028. And this year the PTO rejected challenges to patents covering psoriasis, UC and Crohn’s indications all of which expire April, 2025. So that brings me to our settlements, if you look at that robust patent portfolio our settlement agreement actually facilitate biosimilar entry in the United States, Europe and the rest of the world. In the US we have patents with exploration dates well beyond 2030 and our earliest to expire IP is June, 2022. The first license that we grant to biosimilar was the Amgen license. If you look at the entry date of that in US. It’s approximately six months later than our first two expired patent. Given the breadth of the IP that we have and the overwhelming strength of the patents that we have, the license entry date represents what I would describe as a fairly negotiated license agreements that expedites biosimilar entry into the United States. The other thing I would say is, that’s very important to recognize under none of our settlements are there any payments or any other kind of inducement from AbbVie to the biosimilar player. Instead what there are, there are royalties paid to AbbVie for specified amounts for a defined period of time, by the biosimilar player to be able to enter the market and use those patents and that’s exactly the kind of arrangements that promote competition in markets around the world. So I can tell you we feel confident with our position.

Okay, this is Mike. I’ll take the third part of your question around the phases of our strategy. And Phase 1 as you point out is operational execution, Phase 2 is the phase that we’re in right now, delivering on our late stage pipeline to create the next generation of marketed products that can drive our growth and then the third phase looks beyond that. It is sustainable growth out into the 2020’s and beyond and what I would say about that is a couple of things. One when you look at pipeline execution there is long-term growth out of our existing pipeline assets as Rick pointed out and with assets like Upadacitinib and Risankizumab we’re really just at the starting gates and there’s a lot of work to be done and there’s like Crohn’s Disease and atopic dermatitis, [indiscernible] inflammatory bowel diseases for Risankizumab that will drive growth. So there is more to that longer term growth story than just aren’t really pipeline. What we have as I mentioned a little while earlier, invested considerably in our early pipeline. We’ve invested in immunology because we’re fully determined to remain a long-term leader in immunology and we have a robust set of pipeline assets behind both Upadacitinib and Risankizumab and those are in the areas that I mentioned already and we’re investing in our pipeline and other areas as well. In oncology, we’ve built a very robust early pipeline. As I mentioned we have a large number of early clinical assets in oncology as well as we late preclinical assets, they’re poised to move into the clinical. These are across wide range of areas. There’s our Stemcentrx pipeline, our next generation immune-oncology efforts which are going very well and other efforts aimed at our core capabilities as a company, expanding on the work that we’ve done in apoptosis with VENCLEXTA for example, with mechanisms that can take us into solid tumors there. So what I would say is, there is large number programs very importantly they’re high quality programs all supported by very strong, preclinical data and for the most advanced promising early clinical data as well. We’re not dependent on any one mechanism or any technology, so we’re very diversified in early set, we’re not dependent on ADC’s per se or in any one technology. Although we have very good ADC programs, we have very good immune-oncology programs and we have very strong pipeline across the board there and that’s going to start reveal itself over the course of the next say 12 to 24 months. We’ve invested considerably in our neuro pipeline both in terms of capabilities in Cambridge Massachusetts Research Center and in our pipeline. Our lead asset AE12 is an Tau Antibody that’s in Phase 2 and two indications, in Alzheimer’s disease, but we’ve built a robust pipeline behind that in neuroinflammation in [indiscernible], in disease modifying agent scenarios like Parkinson’s disease and others. So we really have invested in that early pipeline and we’re starting to see the fruits of those labours. Those programs are now moving to the clinic. They’re entering Phase 2 and over the course of the coming years, we’re poised and delivered, a lot of exciting there.

Thanks John. Operator, we have time for one final question please.

And our final question today is from Gregg Gilbert from Deutsche Bank. Q – Gregg Gilbert: Two quick ones. First, Rick going back to Jami’s question. I’m not sure you addressed sort of whether you’re considering anything that’s different from all that you described to position AbbVie operationally and from a pipeline standpoint. So are you considering anything, doing anything differently than you have already done going forward? And then for Bill, I believe your model for HUMIRA erosion outside the US, due to biosimilar competition it’s based on some other examples that have come before. Do you think that’s sufficiently conservative in light of the growing sort of experience with biosimilars in Europe and the fact that HUMIRA is larger as the starting point then some of those other examples, thanks. Bye. A – Rick Gonzalez: Gregg, it’s Rick. When you say do anything different I mean clearly we’re still committed to be able to return significant capital to shareholders. So it’s clearly our intent and we have the ability to continue to grow the dividend and we’ve obviously just finished a fairly significant share repurchase. We have $2.5 billion left on the existing buyback program that we have and at the point, where that gets lower. We’ll obviously go back to our board and gain authorization for another share repurchase and so we continue to be committed in those areas from BDC endpoint as I said, we continue to look for various opportunities and if we were to find the right kind of opportunity, we obviously add to that. I think the other question that Jami mentioned was some kind of a spin and I wouldn’t say that we’re evaluating anything in that area.

And from O-US HUMIRA perspective, it’s the best forecast we have right now, we’re going to be dealing with live ammo obviously pretty quick, but when we look at the way we’re forecasting it relative to the analogs, there are a couple of differences, first and foremost you need to recognize that unlike the analog the people typically compare us to, HUMIRA is growing at a nice pace and so that will make the decrease relative to peak. Look a little less severe than one would think, that have been just a status quo market place where there was no growth. The other thing is, keep in mind that not all of the markets are going biosimilar at the same time that gives us a little bit maybe a little bit of different circumstance given certain geographies that will be going to biosimilars later. So when we back up, when we look at it and we forecast this every year and we forecast it from the bottom up, this is the best number we have at this point in time, but it’s all going to largely be around with them because we’re going to see the real data fairly soon in the fourth quarter and then, we will adjust as we see fit. Q – Gregg Gilbert: Thank you.

Thanks Gregg. That concludes today’s conference call. If you’d like to listen to a replay of the call, please visit our website at investors.abbvie.com. Thanks again for joining us

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