AbbVie Inc. (ABBV) Q1 2020 Earnings Report, Transcript and Summary

Good morning and thank you for standing by. Welcome to the AbbVie First Quarter 2020 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer portion. [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; Michael Severino, Vice Chairman and President; and Rob Michael, Executive Vice President and Chief Financial Officer. Joining us for the Q&A portion of the call is Laura Schumacher, Vice Chairman External Affairs, Chief Legal Officer and Corporate Secretary. Before we get started, I'll remind you that some statements we make today 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 including the impact of the COVID-19 pandemic on AbbVie's operations, results and financial results that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about these risks and uncertainties is included in our 2019 Annual Report and Form 10-K and in our other SEC filings. AbbVie undertakes no obligation to update these forward-looking statements 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. I'd like to start my remarks by acknowledging the tragic nature of the COVID-19 crisis, which has touched all elements of our -- in our lives in ways we never thought possible. The human toll that this pandemic has inflicted is unprecedented and the suffering unimaginable. During this very challenging time, I want to assure you that across AbbVie we are working carefully to ensure that our business continues to operate properly, our employees remain safe, our patients continue to receive their medicines and we are providing aid including product donations and financial assistance to address some of the critical needs of health care systems and underserved communities across the globe. As a matter of priority, we continue to closely manage manufacturing and supply chain resources around the world to ensure that our patients receive an uninterrupted supply of their medicines. Our manufacturing sites remain operational. And we have implemented additional measures at these facilities to ensure the safety of our employees and to protect our supply of API and finish medicines. We have adequate supplies in inventory to meet the expected demand for all AbbVie key medicines including KALETRA and NIMBEX, two therapies that have experienced a significant increase in demand directly related to COVID patient treatment. And we currently do not anticipate any product supply issues. AbbVie is also committed to supporting clinical research efforts for COVID-19. We have provided product donations to many health authorities and institutions globally so that AbbVie products may be further evaluated externally as potential treatments for this difficult disease. In times of crisis, it is our nature as individuals and our culture as a company to give back in any way we can. We recently announced that AbbVie has donated $35 million to help meet some of the critical needs around the world. We've partnered with several non-for-profit organizations who are on the front lines of the battle against COVID-19. And our donations have helped to support several important initiatives including the creation and operation of 20 mobile field hospitals in U.S. cities most impacted by the pandemic; the procurement and delivery of oxygen concentrators ventilators and personal protective equipment to health care systems in Europe; and various other essential programs including a donation to Feeding America to provide food and household supplies for those most in need including the elderly. We have donated a significant portion of AbbVie's own personal protective equipment supplies including N95 and surgical masks to hospitals near our facilities throughout the U.S. and Europe. We have also converted some of our own facilities including a pilot plant and several research laboratories to manufacture culture media and provide COVID-19 patient testing to supplement several public health departments. We are honored and committed to do what is in our power to help with this devastating pandemic and we will continue to look for ways where we are able to help. Now turning back to our business. I want to further discuss how the crisis is impacting our performance and expectations for the full year 2020. Today, I'm pleased to report strong results. For the first quarter, AbbVie's total revenues were up more than 10.5% on an operational basis and adjusted earnings per share of $2.42 was up more than 13% versus the prior year. These metrics were significantly above consensus and our initial expectations. Fortunately, we had very robust demand across our product portfolio heading into the COVID crisis. As the U.S. and other major countries around the world started implementing stay-at-home orders and social distancing strategies in late February, AbbVie as well as most of our customers started restricting face-to-face interactions resulting in reduced physician and patient contacts. These limitations which are still in effect for most major countries created two fundamental impacts on our business in the quarter. First, patients and pharmacies built up some additional inventory of our medicines to ensure they had adequate supply. And second, we saw fewer new patients visiting physician's offices, which had a modest impact on the number of new patient starts. Adjusting for COVID inventory dynamics, AbbVie's first quarter underlying operational sales growth was roughly 8.3%, significantly above expectations with double-digit underlying performance in both hem/onc and immunology, demonstrating the strong underlying performance of our business. Within hem/onc IMBRUVICA the market-leading treatment for CLL grew strong double-digits, driven by increased demand in the frontline setting where we recently received another important label update which Mike will discuss momentarily. VENCLEXTA also performed very well in the quarter with global revenues of $300 million, roughly double the first quarter of last year, following share expansion in both CLL and AML. Turning to our immunology business. HUMIRA continues to generate significant revenue. HUMIRA benefits from a substantial installed patient base, representing more than 80% of current demand. Globally, HUMIRA revenues were up nearly 6.5% on an operational basis in the quarter including strong double-digit growth in the U.S. The international biosimilar trends and dynamics remain largely consistent with our expectations. SKYRIZI Global revenues of $300 million were also significantly above expectations. Since the launch late last April, we have quickly established and expanded our leading in-play psoriasis patient share, which includes both new and switching patients and now exceeds 30%. This launch trend is truly remarkable and a testament to SKYRIZI's strong efficacy compared to other novel agents in the psoriasis category including HUMIRA and COSENTYX. RINVOQ is also performing at a very high level in the RA segment with global revenues of $86 million in the quarter. We estimate more than 17,500 prescriptions were filled including both paid and bridge, which is more than double the activity we saw in the prior quarter and now reflects approximately 11% in-play RA patient share. As demonstrated by our first quarter results, the underlying performance of our business remains very strong. We've now also begun to return to ordinary operations in select geographies around the world, where health authorities have deemed it safe to do so. And although early, we are seeing those countries ramp towards a normal operation and expected performance. This is obviously a challenging time to forecast, given the unique nature of the COVID pandemic including its global scope and unknown duration, and it is difficult to predict precisely when major countries around the world will return to normalcy. Despite this uncertainty, we believe it's important to provide a clear set of updated assumptions that reflect the latest view of our full year performance. We based our forecast on the best estimates we have at this time. And we will make updates if necessary on our next quarterly call. As I indicated earlier, our business was performing robustly, above expectations and above our guidance prior to the COVID-related impacts. We have spent considerable time, carefully evaluating the COVID dynamics from late March and April. Based on this analysis, COVID appears to be having two fundamental impacts on our business. First, there has been a variable impact on new patient starts due to physician's offices restricting patients' visits and patients adhering to stay-at-home orders. As an example, many dermatology offices are currently closed. AbbVie has a strong frontline position in dermatology with HUMIRA and SKYRIZI. And here we see new patient starts for these two brands were lower by approximately 30% to 40% over this time frame. Once these offices reopen, patient volume should return back to normalized levels. Second, we've also seen lower new patient utilization of hospital-based treatments, such as VENCLEXTA and HCV internationally, due to many hospitals limiting access to non-emergency, non-COVID patients. We have carefully modeled these COVID-related dynamics and incorporated the expected impact on our full year results. Our current forecast now assumes the following: Stay-at-home orders will be gradually lifted starting in May across Europe and the United States. 60 days after geography lifts stay-at-home orders, we expect physician offices and hospitals will reopen for more routine patient diagnosis and care and we expect patients will start returning to physicians' offices for routine treatment in that time frame. We have also factored in a modest increase to our patient assistance programs as well as a shift in our U.S. payer mix due to increased unemployment. Based on these specific assumptions, we are confident we can maintain our current full year 2020 adjusted earnings per share guidance. We will learn more as the second quarter progresses and we will continuously evaluate our current assumptions relative to how the environment evolves and the updates will be provided on our next quarterly call. On a related note, while we have not yet completed the Allergan transaction we have also been actively working to assess the impact of the COVID crisis on the Allergan business. It's important to highlight that Allergan has both a therapeutic business which is similar to the AbbVie business and represents approximately two-thirds of their revenues and profits; and an aesthetics business which represents roughly one-third of their revenues and profits. Based on the differences in the nature of these two portfolios, we expect them to be impacted differently as a result of the COVID pandemic. We expect Allergan's therapeutic business except for BOTOX Therapeutics to be impacted and recover from the COVID crisis in a manner very similar to the AbbVie business I outlined earlier. We expect BOTOX Therapeutics, which has a substantial hospital base to experience a more significant impact given that patients are being discouraged from going into the hospital for non-emergency procedures during the pandemic as I mentioned earlier. We also expect to see a more pronounced impact on Allergan's aesthetics business as many of their customers including plastic surgeons med spas and dermatology offices are closed and therefore not performing procedures. However, after carefully analyzing the aesthetics business performance during the 2008-2009 recession, which experienced a rapid V-shape recovery, the recent trends we are observing in China as clinics have reopened locally and procedures have started to ramp significantly and taking into account the household income and employment status of the aesthetics patient base, we remain confident that the expected near-term impact while likely substantial will be transient with the aesthetics business quickly ramping back to normalized trends following the relaxation of quarantine restrictions in the U.S. and major European markets. As it relates to the closing of the Allergan transaction, we have completed all requirements with the FTC and they are in the final stages of their review process. Following the FTC process, the last step is the Irish High Court approval. Based on everything we know today, we continue to expect the transaction should close in May. We remain confident that the AbbVie-Allergan combination will generate significant cash flows which will support our strong and growing dividend and rapid debt repayment and we remain highly committed to both of those priorities. So, in summary, we reported a very strong first quarter performance. The COVID crisis is truly unprecedented and we expect it will have a transient impact on our business, primarily affecting our second quarter performance. However, based on our analysis of the situation as well as reasonable timing assumptions for the return to a more normalized environment, we are confident in maintaining our full year adjusted earnings guidance which speaks volumes about the strength of AbbVie's business momentum entering the COVID crisis. With that, I'll turn the call over to Mike for some additional comments. Mike?

Thank you, Rick. Let me begin by echoing Rick's sentiment about how proud I am of our colleagues as our teams work to ensure our business continues with minimal disruption and our patients receive their essential medicines. The entire organization including our colleagues deemed on-site essential who continue to come into work every day and the individuals who have effectively adapted to working remotely have demonstrated resiliency, dedication, and compassion throughout this time of crisis. It's a testament to the culture we've built at AbbVie. Today, I'll focus my commentary on the ongoing efforts within AbbVie's R&D organization, to address COVID-19, and provide updates regarding our key development programs. As a leading global biopharmaceutical company, AbbVie is committed to supporting relief efforts for the coronavirus pandemic. In addition to the efforts highlighted by Rick, we have deployed our scientific and medical resources to help fight COVID-19 on several fronts. There is an urgent need to increase testing capacity within the United States. Public health authorities are actively working to address the issues that have limited capacity to-date including instrument availability, availability of diagnostic kits and reagents, and CLIA-certified lab capacity. Given the unprecedented nature of this pandemic and the need to significantly increase access to testing, AbbVie is working with health authorities here in Illinois, where we are headquartered and in Ludwigshafen in Germany, where we operate a major site, to create a clinical COVID testing capability. This will allow us to use our laboratory expertise to expand the COVID-19 testing capacity in both jurisdictions. We have also used our GMP capabilities to manufacture viral transport medium, which is necessary to preserve swabs prior to lab testing for the Illinois Department of Health and a number of academic medical centers. Like many companies in our industry, we recognize the extreme burden being placed on our hospitals, public health systems and medical professionals by this crisis. And in response, we have created programs to allow our employees, who have relevant medical, scientific or public health expertise to volunteer to support the fight against this pandemic. AbbVie has tremendous resources and we are doing everything we can to make these resources available in the fight against COVID-19. In addition to the efforts, I just described, our R&D team is looking at our existing medicines and pipeline assets to assess their potential for the treatment of COVID-19. AbbVie is collaborating with health authorities and academic institutions globally to support clinical trials of KALETRA, a protease inhibitor approved for the treatment of HIV infection to determine whether it has potential use in COVID-19. Two notable ongoing trials are the solidarity study being run by the World Health Organization and the discovery study being led by a consortium in France. We expect to see data from these studies very soon and we'll continue to monitor and update as information becomes available. We have also initiated a Phase II study of IMBRUVICA in patients with COVID-19 infection. The goal of this study is to determine whether IMBRUVICA is able to improve outcomes by blunting the overly exuberant immune response often referred to as the cytokine storm that contributes to the morbidity and mortality in COVID-19. Lastly, we are also collaborating with a number of groups to screen our internal libraries for compounds with activity against COVID-19. Clearly, this is a rapidly evolving situation and we will provide updates as additional information becomes available. Turning now to an update on the status of our clinical development programs. Our top priorities in the R&D organization are ensuring the safety of patients, investigators and our employees around the world maintaining the integrity of our clinical studies and continuing to advance our pipeline. We are carefully monitoring the situation and taking appropriate precautions to protect the safety of our study participants, clinical site staff and our employees. We understand that health care systems are under extreme pressure because of the need to respond to the COVID-19 pandemic. In many instances, hospital-based research staff have been redeployed to other duties and aren't available to address clinical trial-related matters. AbbVie is doing everything possible to avoid creating an additional burden to our clinical trial sites. Given the current environment, we have delayed on-site start-up activities for new clinical studies. Start-up activities that can be performed remotely will continue and we will resume on-site activities and new study initiations on a case-by-case basis as local conditions allow. We also paused screening of new patient recruitment for a small minority of non-critical ongoing studies representing approximately 15% of our clinical trials, but are already in the process of reactivating screening in some of these studies again as local conditions allow. The remainder of our studies continue to enroll, although we have seen decreased screening rates in the short term as would be expected in the current environment. At this time, we expect limited impact to clinical trials that are already fully enrolled. Across our portfolio, we've implemented measures to ensure study continuity and minimize delays. These include actions such as shipping study drug directly to patients to avoid unnecessary study visits; conducting virtual study visits and remote data collection wherever possible; and shifting enrollment to geographies and clinical centers that are either less impacted or are already entering recovery. Based on these efforts, we currently expect minimal impact to the overall timing of our critical programs and to our key regulatory submissions. In immunology, we expect limited impact to the programs for RINVOQ and SKYRIZI in new disease areas. We are on track to submit our regulatory applications for RINVOQ in psoriatic arthritis in the second quarter and our filings for atopic dermatitis and ankylosing spondylitis are planned for the second half of this year. The data from our Phase 3 studies evaluating RINVOQ in atopic dermatitis are also expected in the middle of the year. The programs for SKYRIZI in new disease areas are also advancing very well. We continue to expect to see data from Phase 3 studies in both psoriatic arthritis and Crohn's disease in the second half of the year, with regulatory submissions for both indications expected in 2021. We continue to make good progress with our early-stage immunology pipeline as well and we expect to be able to share results from the proof-of-concept study, evaluating our novel TNF steroid conjugate in RA patients very soon. We recently completed the Phase 2 proof-of-concept study evaluating ABBV-599 in RA patients, where our JAK-BTK inhibitor combination demonstrated superior efficacy compared to placebo, but the efficacy results did not prove differentiated from monotherapy with RINVOQ. Based on these results, we are discontinuing development of ABBV-599 in rheumatoid arthritis. We plan to continue development in other autoimmune diseases where there is a greater B-cell contribution, such as lupus and systemic sclerosis in which dual JAK-BTK inhibition could provide superior benefit over current standard of care. In the area of oncology, we continue to make good progress with our hem/onc programs where we achieved several important milestones in the first part of the year. We recently received a label update for IMBRUVICA based on results from the E1912 study, which demonstrated the superiority of IMBRUVICA to FCR in frontline fit patients with CLL. For patients who could tolerate it the FCR regimen had been considered the gold standard for efficacy in frontline treatment for more than a decade. Demonstrating a strong progression-free survival benefit over FCR and incorporating these data into the label is another important addition to the breadth of data supporting IMBRUVICA use in frontline CLL. Continuing with our hem/onc programs, we recently announced positive top line results for VENCLEXTA in the Phase 3 VIALE-A study in AML. In this study, VENCLEXTA, in combination with azacitidine, demonstrated a statistically significant improvement in overall survival and in composite complete remission rate versus azacitidine alone in patients with previously untreated AML, who are ineligible for intensive chemotherapy. The VIALE-A study was stopped early due to positive efficacy results at the first interim analysis of overall survival, demonstrating VENCLEXTA's clinical benefit to these patients, for whom there are a few treatment options. We also announced the results from a second smaller Phase 3 study in frontline ineligible AML patients, the VIALE-C trial, which evaluated VENCLEXTA in combination with low-dose cytarabine. While the study did not meet its primary endpoint of overall survival, treatment with the VENCLEXTA combination showed an observed 25% reduction in the risk of death compared to low-dose cytarabine alone. We believe that the failure to hit statistical significance on the survival endpoint in this trial was due to limitations on the sample size of the study. With an additional six months of follow-up in the VIALE-C study, the VENCLEXTA combination demonstrated a median overall survival of 8.4 months, compared to 4.1 months for low-dose cytarabine alone, with a hazard ratio of 0.7 and a nominal p-value of 0.04. All secondary endpoints were in favor of the VENCLEXTA combination as well, including higher rates of response, earlier remissions increased transfusion independence and longer event-free survival. The data from both Phase 3 studies in AML will be submitted to the FDA and global health authorities in the coming months with regulatory approvals beginning later this year or early next year. We also remain on track to start several additional Phase 3 studies in Bcl-2 driven diseases later this year, including VENCLEXTA in fit patients with AML and in high-risk Myelodysplastic Syndrome, as well as navitoclax in frontline and second-line myelofibrosis. So in summary, we've continued to make good progress with our development programs, despite the challenges associated with the coronavirus pandemic. Once the situation is stabilized, we will work to restart paused clinical studies and evaluate the impact to our portfolio. But at this point, we do not expect the global pandemic to have long-term or significant impacts on our R&D programs. Our pipeline remains very robust and we expect many important milestones over the course of the next several years, which will support AbbVie's strong growth over the long term. With that, I'll turn the call over to Rob for additional comments on our first quarter performance. Rob?

Thank you, Mike. Starting with our first quarter results, we delivered strong top and bottom line performance. Total net revenues were $8.6 billion, up 10.7% on an operational basis, excluding a 0.6% unfavorable impact from foreign exchange. These results include approximately $190 million of inventory stocking related to the COVID-19 pandemic. We reported adjusted earnings per share of $2.42, reflecting growth of 13.1% compared to prior year and above our guidance midpoint by $0.13, including $0.04 from underlying business strength and $0.09 related to COVID-19 inventory stocking. Several key products contributed to growth in the first quarter. U.S. HUMIRA sales were $3.7 billion, up 13.7% compared to prior year, reflecting double-digit volume growth plus price. These results include approximately $65 million of COVID-19 inventory stocking. Internationally, HUMIRA sales were $1 billion, down 12.8% operationally, reflecting biosimilar competition across Europe and other international markets and ahead of our expectations. These results include approximately $35 million of COVID-19 inventory stocking. SKYRIZI is performing extremely well and above our expectations. Global sales were $300 million with U.S. in-market -- in-play market share now exceeding 30%. We also continue to see robust demand for RINVOQ with sales of $86 million in the quarter. Hematologic oncology global sales were more than $1.5 billion, up 32.3% on an operational basis, driven by continued strong performance of both IMBRUVICA and VENCLEXTA. IMBRUVICA global net revenues were $1.2 billion, up 20.6% driven by strong share in all lines of therapy in CLL. These results include approximately $45 million of COVID-19 inventory stocking. VENCLEXTA revenues were $317 million, driven by continued share gains across all approved indications. Global HCV sales were $564 million, down 30.2% on an operational basis, driven by lower treated patient volumes in select international markets and increased competition within the U.S. Managed Medicaid segment. We also saw continued strong operational sales growth for Creon and Duodopa. Turning now to the P&L profile for the first quarter. Adjusted gross margin was 82.7% of sales ahead of our full year guidance due to sales mix and currency hedges in place. Adjusted R&D investment was 14.3% of sales, supporting our pipeline programs in oncology immunology and other areas. Adjusted SG&A expense was 18.6% of sales, reflecting continued investment in our on-market products and newly launched assets. The adjusted operating margin ratio was 49.8% of sales, an improvement of 170 basis points versus prior year, including a 70 basis point benefit from inventory stocking. Adjusted net interest expense was $284 million and the adjusted tax rate was 9.7%. As Rick previously discussed, we are closely monitoring the impact of the COVID-19 pandemic. Given the momentum of the business heading into the pandemic and our current assumptions regarding timing of the recovery, we remain confident in our previously communicated full year adjusted earnings per share guidance of between $9.61 to $9.71 for stand-alone AbbVie. Excluded from this guidance is $2.01 of known intangible amortization and specified items. This guidance now contemplates full year revenue growth of approximately 7% on an operational basis. At current rates, we now expect foreign exchange to have a 70 basis point unfavorable impact on full year reported sales growth. Included in this guidance are the following updated full year assumptions. We now expect U.S. HUMIRA sales growth of approximately 7%. For SKYRIZI, we now expect global revenues of approximately $1.4 billion. And for global HCV, we now expect sales of approximately $2.3 billion. Moving to the P&L. We now forecast adjusted gross margin approaching 82% of sales SG&A expense to be approximately 19% of sales and adjusted operating margin approaching 49% of sales, an improvement of 140 basis points versus 2019. All other full year 2020 guidance assumptions remain unchanged. As we look ahead to the second quarter, we anticipate adjusted revenue of approximately $8.1 billion for stand-alone AbbVie. This guidance assumes reversal of inventory stocking from the first quarter as well as slower new patient starts due to COVID-19. At current rates, we expect foreign exchange to have an 80 basis point unfavorable impact on reported sales growth. We are forecasting an adjusted operating margin ratio of approximately 47.5% of sales, including a reversal of the 70 basis point benefit from inventory stocking in the first quarter. We expect adjusted earnings per share between $2.10 and $2.16 excluding approximately $0.53 of known intangible amortization and specified items. AbbVie remains well positioned to execute on our capital allocation priorities. We generated $3.8 billion of operating cash flow in the first quarter. Our cash balance at the end of March was $41 billion, including funding designated for the Allergan acquisition. The robust cash flow generation of the combined company will be used to rapidly pay down debt, support a strong and growing dividend and pursue additional innovative mid to late-stage pipeline assets. We have committed to paying down $15 billion to $18 billion of combined company debt by the end of 2021 of which nearly $7 billion will be repaid by the end of May 2020. We expect to achieve a net debt-to-EBITDA ratio of 2.5 times by the end of 2021 with further deleveraging through 2023. In closing, AbbVie's performance and financial condition remains strong. Given the nature of the important therapies in our portfolio and the ongoing efforts of the people within our organization, our business is well positioned to navigate the current COVID-19 related challenges. With that, I'll turn the call back over to Liz.

Thanks Rob. We will now open the call for questions. Operator, first question please.

[Operator Instructions] And our first question today is from Vamil Divan from Mizuho.

Great. Thanks so much for taking the questions and all the color that you've provided in your comments. And maybe just a couple if I could. One, you talked about the Allergan deal and obviously some of the assumptions there. I'm just thinking big picture -- and I guess this is for Rick just in terms of your -- kind of where you see the value of that deal. I know you -- obviously some of the assumptions in the near-term have changed and you mentioned the esthetics impact is probably more transient. But just to confirm for investors, do you see any changes over the longer term value of this transaction? We're obviously getting a lot of questions just given the nature of the esthetics business right now. And then second one on the dividend. You mentioned, obviously, your support for a strong and growing dividend. Is there also just any change as to how you think about dividend growth going forward given the current environment? Obviously you've still been growing but is there maybe growing at a lower rate, or any change at all there just – it would be great to clarify. Thanks again.

Vamil this is Rick. I mean, I'll take those two questions. Let me do the second one, because it will be shorter first. So we don't see any changes in the assumptions we're making from the standpoint of the growth of the dividend based on everything that we have analyzed and I would say the robust performance of our business going into the COVID crisis and how we view the COVID crisis being a transient situation that, although difficult to predict exactly when all the geographies will reach some level of normalcy, we know that will occur at some point. And so we don't view any significant change there. On the value of the Allergan transaction, I would tell you that we don't see any change, fundamental change in the long-term value of the transaction. The benefits that we were trying to derive by acquiring the Allergan business are the same. And the long-term valuation I believe is the same. Now I think what some of the investors are probably concerned about is, obviously, the esthetics business is an important franchise as I indicated before represents about one-third of the revenues and about one-third of the profits. And it's an attractive franchise. And so I think the question that investors have, is how is it going to recover? And how long will it take to recover? And I think look those are reasonable questions. And as you can probably imagine, we have been doing a tremendous amount of work to try to evaluate not only the impact of COVID on our business, but also the impact of COVID on the Allergan business. And specifically I'd say, we've spent a considerable amount of time looking at the esthetics business. So I'm going to take a couple of minutes here and walk you through what that data looks like, so that you have a good perspective of at least the data that we're operating against to make the assumptions that we're making. Now what I am going to say is because of the Irish takeover code, we can't talk about the specific financials of Allergan until they are public and they're not public right now. So I'm not going to talk about their financial performance in any way. But I think, I can give you a pretty good characterization as to the work that we've done here and the conclusions that we've drawn. So I think if you step back and you look at the situation, it is clearly a situation, one, it's a complex situation. And two it's not a situation that any of us have ever experienced before meaning that this has both an economic disruption factor built in and it has a supply and demand disruption factor that's built in. We've certainly seen economic impacts on this business before and we know how it behaved in those circumstances. So as we try to approach understanding what the recovery will likely look like, we've essentially looked at four fundamental issues. Number one is, are there any analogs that would tell us what that recovery curve's going to look like? Number two, what is it going to be -- what is it going to take in order for the supply side? And when I say supply side what I mean is plastic surgeons, med spas, dermatology offices, which are the primary providers of those procedures. What is it going to take for the supply side to get back to where it was? And then number two -- or number three rather, what is going to be necessary on the demand side? And demand, I mean, consumer’s users of these procedures. And then finally, will there be a change in the situation from a competitive standpoint? Those are the four fundamentals that we looked at. We've looked at this both in conjunction with Allergan and we also have done an independent analysis with the same consulting firm that we used when we were considering acquiring the Allergan business. So we did two independent work streams to come to our conclusions. So let me start with the analogs. There are two right? There is the 2008, 2009 recession. And as I've said in my comments, there we saw a very sharp D-shaped recovery. And in fact the business recovered and actually grew faster on the other side of that The second analog is China. China has reopened most of its geographies not all, but most and they've been open for approximately seven or eight weeks now. If we look at the data from China what it says is 86% of the clinics have reopened. Patient traffic is back to about 55%. Volume is just under 50%, like 45% to 48%, slightly lower because those clinics are also burning off some of their inventory. So it doesn't outdate. So, I'd say the two analogs that we came up with looked pretty encouraging. Now let's look at the supply side. So, on the supply side, what we're trying to understand here is, what is the intent? And what is the preparation for these offices to reopen? And I think there's a couple of important facts here that help support and guide us to what that might look like. First the major medical societies like the plastic surgery society, the aesthetic society and others have now issued guidelines to these practices on the procedures that they should use to restart. And they include things like temperature checks, masks, gloves, face shields, lower densities in their offices. So why is that important? Well, why that's important is, this gives those offices a guideline as to how they should reopen. And probably more importantly, it gives them confidence on how they should reopen. Allergan has worked with their customers. A number of their customers, a large percentage of their customers requested the U.S. government stimulus funds. And so what we do know is that a significant portion of those practices should be in a position where financially they can reopen fairly quickly. And finally, Allergan has done a number of surveys with a large group of customers that show that the demand to reopen upon lifting of the stay-at-home orders and implementation of these patient safety guidelines is very high. And we anticipate that they will start reopening in May, and that's what our data told us, and the survey data told us. I'd say if anything, it seems to be moving faster than what we originally anticipated, because some states in the U.S. have opened up more quickly. So, then the next question is the demand side, what's that going to look like? And here I'd say, again, Allergan did some very good work. If you look at the brilliant distinctions database, which has about two million active members, represents about 70% of Allergan's users, it shows that 70% of the growing distinction consumers have household incomes of greater than $100,000, and 50% have incomes -- household incomes of greater than $150,000 a year, and it shows that 60% of those consumers work for corporations not small businesses. Allergan also conducted a recent user survey that had just under 450 consumers that they interviewed. And it showed that 80% of the consumers said that the COVID crisis would have no or little impact on their household incomes. 94% of those consumers said, they would reschedule an appointment for procedures in the next 90 days, and two-thirds of them said upon restrictions being lifted they with schedule an appointment in 30 days. So now you turn to the competitive environment. Allergan competes mostly against smaller less financially strong companies. I'd also say that, Allergan has done an excellent job. I give a tremendous amount of credit to Carrie Strom and Bill Meury. They responded quickly and aggressively to this crisis with their customers. They extended payment terms. They converted credits to checks to help with cash flow at these offices. They protected the customers' volume discounts. They facilitated online sales of Allergan skin medical products, again to get those offices some cash flow. And they changed the product return policy so the customers are protected from any product outdating. I'd also say from a competitive standpoint, Allergan didn't have any layoffs. They maintained or accelerated their R&D programs. And you have to remember Allergan has the largest commercial footprint by a significant margin compared to anyone else in this business. So what the data tells me is this, the analog show the business bounces back and it's resilient. The supply side should ramp quickly when the environment allows. Consumers have a strong desire to restart treatments, and they have the financial capacity to do so. And I think Allergan did a nice job of creating loyalty with these practices, and should come out of this in a very strong competitive position, maybe even stronger than they were before. The independent analysis that we did also surveyed customers and providers. And I would say, it looks very similar to what the Allergan analysis looks like. So, look, we can't predict is exactly how long it will take in every state and in every country around the world, but I think we can predict with a pretty high degree of certainty that the business will bounce back. So, those are some of the keys that I think make us feel confident in the valuation.

Thanks Vamil. Operator, next question please.

Thank you. Our next question is from Geoffrey Porges from SVB Leerink.

Thank you very much for taking the question. First, there are a number of things that are obviously affecting the environment right now Rick and I just want to ask about SKYRIZI and RINVOQ. You've previously given some longer-term aspirational revenue targets. I'm just wondering how you'd feel about those targets. Now we've seen a few quarters for each product. And also I understand you're going to have a little bit of COVID disruption. And then could you just talk a little bit more -- I think that's very helpful coverage of the plastic surgeon context. Can you just talk a little bit more about the other specialties and products where you're expecting impairment in Q2 and how quickly they could bounce back? Thank you.

Yes. So fundamentally I would tell you we don't have any change in the long-term forecast for SKYRIZI and RINVOQ. I think one of the things that's impressive when we look at both SKYRIZI and RINVOQ is both the speed and acceleration of the ramp that we're seeing in the share capture of these assets. So let me give you a perspective on it. If you look at SKYRIZI as an example SKYRIZI within about three months achieved the number one position in psoriasis in-play psoriasis share. And then the rate of capture has actually accelerated from there. It achieved it at about 20%. If you look at the January data which is the most recent independent data that we have we have internal data that we also use to project. But the January data showed that it's at 31% and the slope of that line is accelerating and accelerating at a pretty good clip. And it is widening the range between it and the number 2 player in a significant way. And so this thing has tremendous momentum. Yes obviously the COVID crisis has created a disruption. As I mentioned in my comments if a dermatology office is closed obviously they're not prescribing anything including SKYRIZI. But that's a temporary phenomenon and we'll see these offices start to open back up. And I have no reason to believe that that momentum won't come back as patients feel comfortable to go back into their offices. RINVOQ obviously launched -- SKYRIZI launched in April and RINVOQ launched in August. So it launched later. But I'd say we've also seen on RINVOQ now a similar acceleration of its capture rate of share in -- in-play share in RA. And it too is accelerating going into this. It's about 11.3% on the last data point. And I'd say based on once things settle back out from COVID, it would take it probably three months to pass. There's a whole group of players at number two. HUMIRA is number one, but it would take probably three months for it to pass that group that's in number two. And I would expect it moves into the number two -- position shortly after that, after the disruption has subsided and we have a chance to continue to drive it. And so I feel very good about both of those assets and what the long-term performance of those look like, I think as I look at the R&D programs for both of them and the ability to expand the indications much like we did with HUMIRA, these assets have tremendous opportunities. So I feel good about it. Other -- by other specialties I believe what you're asking is what's going to happen to the other aspects of the business? Because what I was referencing on aesthetics really covered the range of supply side. So it was plastic surgeries derms and med spas. So again, we can't talk about the numbers, but as I indicated in my comments, I would expect the therapeutic side of Allergan to recover very similar to RSI a temporary disruption. There is likely to be a more significant impact on BOTOX therapeutic because about half of its volume comes from hospitals. And -- but we would expect that to bounce back once those hospitals start accepting non-emergency non-COVID patients. So we don't see anything in the data as we analyze it that would suggest that there's anything that's happening to any of their products that would impair the original assumptions we made about those products.

Thank you. Next question please, operator.

Our next question is from Steve Scala from Cowen.

Thank you. I have a couple of questions. But first congratulations on a very strong quarter under very difficult conditions. So the first question is even pre-pandemic AbbVie seem to have embraced digital marketing. I think the company previously said that pre-pandemic 40% of commercial activities were already virtual. What does AbbVie do differently than peers? And does this expertise explain in part the strength of SKYRIZI and RINVOQ in the first quarter? And then the second question is just a housekeeping question. Just curious do you expect that Allergan will publicly report its first quarter? Thank you.

I mean on the digital marketing, I mean obviously we have a significant expertise in that area. And I honestly can't tell you how differentiated that is versus other competitors because I think many companies like our have gone to a significant portion of their commercial messagings through digital marketing. I mean, I think we're very effective at it. I don't think that is what's driving the RINVOQ SKYRIZI performance. I think what's driving it is really, two fundamental things. One is obviously these assets have very strong clinical profiles. They fit a need in the market an unmet need that's in the market that was consistent with what we originally assumed when we were trying to develop replacements for HUMIRA. And I think we're all extremely pleased that these assets are doing a very good job of demonstrating superiority to the gold standard HUMIRA. The second thing is I think obviously, this is a market we know how to execute in at a very high level. We have a tremendous level of experience in this market, a tremendous reputation in this market. And I think our commercial organization executes at a very high level in this market. I think that's what's driving the performance and it makes me feel good about what the future looks like for these assets. As far as Allergan is concerned, I don't know if they're going to -- well think of it with this way. I don't think I should comment on when they're going to publicly report their first quarter results. I think that's something they should probably respond to not us.

Thank you.

Thanks, Steve. Operator, next question please.

Thank you. Our next question is from Navin Jacob from UBS.

Hi. Navin from UBS. Thanks for taking the question. So I heard the $1.4 billion for SKYRIZI an upgrade versus the $1.2 billion. Just wondering if you had an update on RINVOQ as well. I think you had said $500 million for the full year. Maybe I missed it, but just wondering if you could provide an update on that guidance as well. And then with regards to the slight lowering of the full year HUMIRA guidance, wondering if there's any color on what's driving that, obviously COVID-19 impacting things. But is it because of -- any color as to whether it's COVID-19 specifically or if it's increased in gross to net or if it's an increase in the switching to SKYRIZI and RINVOQ? Any of that would be helpful. Thank you so much.

Okay. Thank you. So let me talk about it at a little higher level and I'm going to hand it over to Rob to give you more specifics. I think the way to think about this is we came into this first quarter. If you look at our first quarter performance had COVID not happen, we would have been sitting here contemplating how we raised guidance. But because of the uncertainty of what's going to happen in the second quarter, we obviously had to make an assessment of what we thought that impact would be. And that's why I outlined what those assumptions are. So you can think about it this way. We're essentially assuming the business is overperforming and the data clearly supports the business is overperforming. We're going to have somewhat of a negative impact in the second quarter that we're basically saying, we can overcome. And we had to estimate where that would occur. We're raising SKYRIZI, because the momentum is such that even with some caution about second quarter, we know we're going to beat that number. RINVOQ, we feel good about RINVOQ as well, but we don't need to raise that at this point. We need to give it probably another three four months and then we'll make a decision what that looks like. HUMIRA has a very large installed base. And so, I indicated that we are making some adjustments to what we think will happen with channel mix specifically Medicaid. We've worked diligently to try to understand what that looks like. And as you probably know during the 2008, 2009 recession, which is probably the best thing that we had to be able to compare it to, Medicaid went up about two points from 2007 to 2009, two percentage points. So we have factored in some potential shift in HUMIRA and that's primarily what we're reflecting. Rob can give you a little bit more color, but I'd say that's a significant part of what we're trying to reflect there. We also took down MAVYRET. And MAVYRET is two things. One it is COVID-related. Probably about half of it's COVID related there, where HCV internationally is administered through hospitals and they've clearly been disrupted. And we need that disruption to play through before we can get back to the same momentum. In the U.S. though I would say, it's primarily driven by price. That month is still under price pressure and some share pressure. So those are the two most significant ones. Rob?

Yes. Navin, so if you look at the guidance we gave of approximately 7% growth, so that translates in about a $300 million change for U.S. HUMIRA. I'd split it really in the three buckets evenly. So as we think about unemployment, higher PAP volume, Medicaid channel mix each of those say one-third and one-third from those two. And then the remaining one-third would be just lower new patient starts during the stay-at-home period. So that will be most acute in the second quarter. As it relates to SKYRIZI -- and look the momentum from SKYRIZI is very, very strong. And we would have raised it even higher had it not been for the disruption in Q2 on new patient starts. So despite having that disruption on new patient starts, we're still taking the guidance up. We would have taken up higher without that. And I think Rick characterized the HCV change very well.

Thank you, Navin. Operator, next question please.

Thank you. Our next question is from Randall Stanicky from RBC Capital Markets.

Great. Thanks guys. Rick focus is going to shift pretty quickly here to pro forma 2021 earnings. You've had more time to prepare for the integration given COVID-19, but can you just talk about does COVID-19 impact those integration plans at all? And then, how are you thinking about the synergies and specifically, how quickly you can realize those $2 billion plus in cost synergies? I know they're third-party verified under Irish law, but at the same time it's -- 90% of that is operating expenses. So the question is why couldn't we see more of that realized early on? Thanks.

Yeah. I think as it relates to pro forma earnings, I mean, once we close the transaction at that point we will evaluate the business again and make a decision at which point we're going to provide pro forma earnings. As far as integration is, concerned I would tell you that, we're not – we have done all the integration work. We're well prepared and have been prepared now for several months to do the final integration. And I don't believe -- we're operating AbbVie at a very high level of effectiveness as we're operating today where a significant number of people are working remotely. I wouldn't say it's the ideal scenario. I'd much prefer we can all get back to operating the way, we did before. But look it's not practical right now. And I don't believe that anything will change the performance of the integration as it relates to COVID. So I'm not overly concerned about that. Synergies, obviously, we have built a synergy plan that we are very comfortable with. And we haven't – I don't believe we've given the gating of that yet right? We have not. Okay. That was Rob shaking his head no because you can't see Rob. So we've obviously gated that. I wouldn't say, we have changed the gating because of COVID one way or another, but we feel good about achieving those synergies. And obviously, everyone that does transactions like ours tries to overachieve their synergies. And we won't be any different than that, but we'll give you an update on what that gating looks like once we've gated the pro forma guidance.

Thanks, Randall. Operator, next question please.

Our next question is from Terence Flynn from Goldman Sachs.

Hi. Thanks for all the color today. I really appreciate it. Just wondering if – first question is if COVID has impacted the rate of uptake of biosimilars in Europe at all either on the positive side or the negative side. And then for ABBV-3373, I know you mentioned the data is coming out in the near term. Maybe just can you remind us what you're hoping to see here on the efficacy side to advance this into further studies? Thank you.

Yeah. So this is Rick. I'll cover the first one. I may hand it over to Rob to give you a little more specifics, and then Mike will cover the second question. So I probably saw in the quarter, we did better internationally than we had projected initially. And so that is related to a great extent that we have seen less biosimilar conversion than we originally anticipated. It's a little difficult to tell at this point whether or not that is COVID-related. In other words one hypothesis could be and it is nothing, but a hypothesis is that because people are staying at home they can't get converted to biosimilars as rapidly. I think it's not the one that, our area organizations think is happening. It just appears that we're performing better than we had expected. But I think to know that for sure, we'll have to see a little more time play out. But overall, we feel pretty good. And so I'm not giving you a very good answer, because I don't know the answer totally. So I'm giving you the best information that I have available to me. Rob anything you'd add on?

I think if you look at our beat versus guidance it's about approximately $140 million. Keep in mind that, we have about $35 million of COVID-related inventory stocking. We did have some tender timing in Brazil. It's about $30 million. So the balance of that you'd call $75 million of favorability. Could there be some COVID-related impact there? Possibly. If you look, we didn't change our full year guidance even though we have the U.S. dollar strengthening. So that's inherently about a $70 million $75 million operational upside that we've baked in that's offsetting that foreign exchange headwind. So it is going better so far than we expected, which is great but it's hard to pinpoint whether it's COVID-related or not.

This is Mike. I'll take the question on 3373, which is our TNF steroid conjugate. It's in a proof-of-concept study in rheumatoid arthritis. And what we'd like to see there is efficacy that is greater than what can be achieved with currently available agents really across the board, but also with a particular focus on higher levels of response. Obviously, we're going to want to see that with an appropriate safety profile recognizing that a proof-of-concept study is a relatively limited safety database. And importantly, we're going to want to confirm that we can deliver that without impacting the pituitary access as a measure for systemic steroid effects. We have stated in other settings that from the 1b portion of this trial in healthy volunteers, we've shown we can deliver this construct without those steroid effects without impacting the pituitary axis. So we would expect to be able to do the same thing in RA patients in treatment, but we'd want to confirm that obviously.

Thanks, Terence. Operator, next question please.

Thank you. Our next question is from Andrew Baum from Citi.

Thank you. A question on the long-term impacts of COVID-19. I'm interested in what's the prescription rate for both SKYRIZI and RINVOQ among private practice versus salaried dermatologists or rheumatologists? I guess, what I'm thoughtful about is the extent to which the economic pressures that COVID-19 may force many private practice physicians to become salaried with perhaps more constraints on their prescribing or switch frequency? Many thanks.

Andrew, I would say I don't know the answer to your question to be honest. I can tell you that we don't see a -- today we don't see a significant difference across practices from a behavior standpoint. But future behavior I think that will be a little more difficult to predict. I think most physicians prescribe a medicine that they believe -- in the United States, that they believe is fundamentally the right medicine for that patient. And I would say that the profile of the drug is what tends to drive their prescribing habits more than anything else. So I would say, I would be surprised if there's any difference in the behavior. We'll go back to our commercial group and see if they have any data on it. And if so, we'll provide something back to you.

Thanks, Andrew. Operator next question please.

Thank you. Our next question is from Tim Anderson from Wolfe Research.

Thank you. A couple of questions please. The first is on business development. And Allergan certainly helps fill the long-term hole from HUMIRA going off patent, but I still view it as M&A is going to be a likely continued part of the story. So my question here is the time frame for AbbVie being actively back in the marketplace to do additional acquisitions, and I'm defining those acquisitions as smaller bolt-ons single-digit billion-dollar types of deals, could that start to happen as soon as the current year in 2020? Second question is on RINVOQ. In atopic derm, you are running a head-to-head study versus DUPIXENT called heads up similar to what Pfizer has done with its JADE COMPARE trial. And I think your results come out in early 2021. The Pfizer results were perceived as being a bit underwhelming. I'm wondering, if you expect RINVOQ results would be any different from Pfizer's? Thank you.

On the BD front, we haven't changed from what we have talked about historically. Our capital allocation strategy is -- support a strong and growing dividend, pay down debt aggressively. And we've allocated approximately $2 billion per year that we can do more bolt-on kinds of transactions. I can tell you that Mike and the BD team have been very actively pursuing what we think fits strategically and doing the work that's necessary to determine, is it an asset that we want to add to our portfolio and where we find those opportunities? And we believe they're a good return for the company. We're aggressively pursuing those. And so I think you will see over the course of time here, you will see us do deals that are consistent with that strategy. And clearly there's a lot of focus on oncology that we have interest, but other areas as well. Mike?

So this is Mike. I'll cover the question on atopic dermatitis. Obviously, we're well aware of the Pfizer data from their program in atopic dermatitis at least at the top-line level that are currently available. And what I would say is we're going to have to look at each of these programs individually, although there are some mechanistic similarities factors such as dose selection ability to cover the relevant pathways are important when you are trying to predict the results that you're likely to see. We feel good about the pharmacodynamic coverage we've been able to drive with RINVOQ really across the board, but particularly in AD. We had very strong Phase 2b results. So we feel that our program will stand on its own merits and we look forward to those head-to-head data as we look forward to all the data from the Phase 3 program in atopic dermatitis.

Thank you.

Thanks, Tim. Operator, next question please.

Thank you. Our next question is from Carter Gould from Barclays.

Great. Good morning. Congrats on the quarter. A few questions. Rick, I appreciate the color on the Allergan aesthetic business. Maybe just a follow-up. Just trying to understand the sensitivity around your deleveraging forecast to the return of the aesthetics business in line with your assumptions? And I guess also based on your survey work, maybe you read on the rate -- not so much the rate, but like the ultimate return of the med spas and any view on I guess what percentage of those may not return given, I guess there's a view that that's somewhat of a more economically sensitive population relative to the broader BOTOX community. And then apologies if you already commented on this. On the pro forma guide that's going to come is the expectation that will come upon deal closing, or we'll have to wait to 2Q? And then maybe just given all the uncertainty around COVID, your latest thoughts about also providing longer-term guide at that point? Thank you.

Carter this is Rob. I'll take your question on deleveraging. Look, if you think about the amount of cash flow that the combined business generates, it's a tremendous amount of cash flow that we feel very confident in our ability to deliver on our deleveraging commitments. As I mentioned in my remarks, we still expect to pay down $15 billion, $18 billion of debt. We're going to have $7 billion paid down by the end of this month, and we still will be able to support a strong growing dividend. So even as we flex various scenarios, we feel very confident we've reaffirmed those commitments on deleveraging.

As it relates to the med spa question, I would say, across the board, we looked at what kind of assumptions should we make about any consolidation in the industry. And the one thing I would say is, it does appear that these businesses fairly aggressively participated in the U.S. government stimulus programs, the Payroll Protection Programs and the other programs that were available. And so, I think, the data would suggest to us now that that won't be a massive impact. And if there were any consolidation across any of the channels and I don't know that any one channel really stands out in a significant way, we believe that there -- all we'll see is a shift of that capacity to other players, meaning they get bigger. And so, we're not assuming any significant reduction in the supply side of the channel that can't be absorbed through consolidation if necessary. On the pro forma guide, obviously, we're going to wait for the business to close. We're going to do some work on the business and then we'll provide the pro forma guidance after that. So depending upon the timing of when it closes and how close we are in the second quarter it could come on the second quarter call. So we're not really in a position right now where we can give you total clarity on that.

Thanks, Cater. Operator, we have time for one final question.

Thank you. And our final question today is from Damien Conover from Morningstar.

Great. Thanks for taking the question. I just want to ask a question on the strength of SKYRIZI and RINVOQ. We're seeing great growth there. And both these drugs have shown excellent data. But I also want to ask, is there any ability to leverage the competitive positioning of HUMIRA here? And I guess I asked that, because I think about the recent launch of the IL-17s, which those competitors used to complain about the strong entrenchment of the TNF class and some of the rebating that was going on there. So I was just wondering, the two growth of, SKYRIZI and RINVOQ, is that really coming from the medicines themselves? So that's question one. And then the second question is, when thinking about the shift back towards normal and sort of the transient impact that we're likely to see from COVID, I wanted to ask about the thoughts around the potential second wave of coronavirus patients as some of the stay-at-home orders lessen up and doctor's office reopen? Is it the view of AbbVie that the second wave won't be that large, or that when the second wave comes we'll have strong treatment options and triaging that we'll be able to get to more business-as-normal operations? Thank you.

Yes. I think, as we look at the strength of SKYRIZI and RINVOQ, it's driven by a couple of factors, right? Particularly, I'd say in the U.S., it's driven by a couple of factors. As I said a few minutes ago, certainly the clinical profile of the drug is first and foremost. The second is, you have to have broad-based managed care access in the United States to be successful. It doesn't matter how you much you convince the physician to use the product based on its clinical profile. If they can't get it reimbursed, they obviously can't prescribe it to their patients. And so that takes a company that has strong expertise in being able to deliver high levels of managed care access, which obviously we can. And then the third is just the effectiveness of your commercial and medical affairs organization. And I think in this area we have one of the best, if not the best. So I think those are the things that really drive it. In our business, you can't really leverage one product against the other specifically. So I don't believe it's a leverage issue. As far as the second wave, I'm going to let Mike cover most of that. The only thing I would say is we have not assumed another major shelter in place order in the fall in our assumptions. So we have assumed that we'll be able to manage through any increase in infections in the way we've built this forecast.

That's correct, Rick. And so, I think it's very hard to make exact predictions about the longer-term nature of the coronavirus infection rates. But what we are assuming, as Rick said is that, there will not be a major second wave in lockdown. And I think the factors that would play into that would be a much greater understanding of surveillance, broader access to testing, the ability to respond much more quickly based on experience. And based on those factors that I just mentioned, if small pockets of new infection do pop up, as well as hopefully the availability of some treatment options, although, I think, treatment options will continue to evolve over some period of time and renewed capacity or relief from the overcapacity status that the healthcare systems are currently operating under. So, I think, it's all of those features together that lead us to the view that supported the assumptions that Rick outlined in our thinking on this.

Thanks, Damien. And 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. This does conclude today's conference. You may disconnect at this time.