AbbVie Inc. (ABBV) Earnings Call Transcript & Summary

Good morning, and thank you for standing by. Welcome to the AbbVie Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's call is also being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Ms. Liz Shea, Senior Vice President, Investor Relations.

Good morning, and thanks for joining us. Also on the call with me today are Rob Michael, Chairman and Chief Executive Officer; Jeff Stewart, Executive Vice President, Chief Commercial Officer; Roopal Thakkar; Executive Vice President, Research and Development, Chief Scientific Officer; and Scott Reents, Executive Vice President and Chief Financial Officer. Before we get started, I'll note that some statements we make today may be considered forward-looking statements based on our current expectations. 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 our forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. AbbVie undertakes no obligation to update these forward-looking statements, except as required by law. On today's conference call, non-GAAP financial measures will be used to help investors understand AbbVie's 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 turn the call over to Rob.

Thank you, Liz. Good morning, everyone, and thank you for joining us. AbbVie delivered another excellent quarter with results once again exceeding our expectations. I'm especially pleased with the execution across our business, including double-digit sales growth from our diverse portfolio, the advancement of our compelling pipeline of innovative medicines and our planned acquisition of Apogee Therapeutics, which represents an exciting opportunity to bolster AbbVie's leading immunology portfolio. . Turning to our second quarter performance. We achieved adjusted earnings per share of $3.65, which is $0.06 above our guidance midpoint. Total net revenues were nearly $17 billion, beating our expectations by $300 million and reflecting robust sales growth of 10.2%. The performance of Skyrizi, Rinvoq and our neuroscience portfolio continues to be very strong, with each delivering growth above 20%. Based on this momentum, we are raising our full year revenue guidance by $300 million and have now raised total revenue by $600 million since the start of the year. Turning now to R&D. We continue to make excellent progress advancing our pipeline. Recent highlights from our late-stage programs include the U.S. approval of Decupaz, a treatment for a rare form of blood cancer. This represents AbbVie's first marketed ADC in hematology. We also received European approval for Qulipta to treat acute migraine, a Kin leap for second-line follicular lymphoma as well as Boey a first-in-class short-acting toxin in aesthetics. In addition, we received European approvals for Rinvoq in both vitiligo and alopecia areata with U.S. regulatory decisions forthcoming. Based on the compelling data generated for each of these programs, we now anticipate the combined peak sales for these 2 indications alone to approach $2 billion, which is meaningfully above our prior expectations. During the quarter, we also announced the acquisition of Apogee Therapeutics which will add multiple differentiated assets in dermatology, respiratory and other related inflammatory diseases with significant sales potential. The acquisition will add even more depth to our robust pipeline in immunology, which we expect will be a major growth driver for AbbVie over the long term. This transaction is an excellent fit with our strategy to build and advance a compelling pipeline with new sources of growth to support AbbVie's performance in the 2030s and beyond. We have ample financial capacity for more business development and remain focused on and both early and late-stage opportunities across our core disease areas. In summary, we are delivering outstanding execution across our business, and our long-term outlook remains very strong. With that, I'll turn the call over to Jeff for additional comments on our commercial highlights. Jeff?

Thank you, Rob. I'll start with the quarterly results for immunology, which delivered total revenues of nearly $8.8 billion, reflecting very strong operational sales growth of 14.6%. And Skyrizi total sales were $5.5 billion, up 24% on an operational basis, once again exceeding our expectations. . I'm very pleased with our performance in psoriasis, where we continue to capture robust in-place share of new and switching patients at a rate which is impressively 4x higher than any other biologic or oral treatment in the U.S. We have achieved market share leadership now in more than 30 countries and see substantial room for continued growth globally. We do not expect a material impact to our robust outlook in psoriasis from existing or new therapies given Skyrizi's very distinct profile. This includes high and very durable skin clearance from head to toe, widely demonstrated superior efficacy in head-to-head trials versus 5 different mechanisms, including both biologics and oral agents. Simple and convenient quarterly dosing and extremely strong long-term data in psoriatic arthritis, extending now to 5 years which is very important to prescribers as roughly 30% of psoriasis patients ultimately develop PSA as well as now our recent approval for pediatric use with the new weight-based dosing option. In IBD, Skyrizi's fastest-growing indication, we continue to capture a leading share of total new patient starts in the U.S. in the quarter, including substantial leadership in the frontline setting; the clearest signal of physician preference. Competitive dynamics remain in line with our expectations with the IL-23 category seeing very robust growth in both Crohn's disease and ulcerative colitis. Importantly, we are also preparing for the potential approval of our subcutaneous induction dosing option for Crohn's later this fall, which is supported by very strong data, particularly in the front line where we observed the highest levels of endoscopic response seen in the category. Turning now to Rinvoq which is also performing above our expectations. Global sales were more than $2.5 billion, up 23.7% on an operational basis. I'm especially pleased with the momentum we see in gastroenterology, where Rinvoq is on pace to deliver 30% global sales growth this year. Rinvoq has set a very high bar for efficacy in both ulcerative colitis and Crohn's disease, demonstrating strong rates of remission and endoscopic improvement. And we continue to see a nice inflection of implantation share following the recently expanded label supporting access to Rinvoq earlier in the treatment paradigm for IBD patients. More broadly, we continue to see strong demand across all of Rinvoq indications, and we are very excited about the growth potential in dermatology with vitiligo, alopecia areata now approved in Europe, with U.S. approval decisions anticipated over the next few quarters. Rinvoq's profile is competitively positioned for both of these chronic diseases where our recently expanded U.S. derm field force will support both launches. Lastly, in immunology, Humira global sales were $756 million, down 36.1% and on an operational basis, reflecting biosimilar competition and in line with our expectations. Moving to neuroscience, where we once again outperformed our expectations. Total revenues were more than $3.2 billion, up approximately 20% on an operational basis. All 3 of our leading neuro pillars continue to demonstrate robust sales growth. In psychiatry, Vraylar global sales were nearly $1.1 billion, up approximately 19%, reflecting share gains in both bipolar disorder and adjunctive MDD. In migraine, our leading portfolio continues to deliver outstanding results with Botox Therapeutic, Ubrelvy and Qulipta each delivering double-digit sales growth again this quarter. Qulipta is now approved in Europe for adults as both an acute treatment option for migraine attacks and as a once-daily preventative treatment option for chronic or episodic migraine. The acute indication expansion in international markets for Qulipta further supports our long-term outlook for our oral CGRPs to collectively achieve more than $5 billion of peak sales. Moving to Parkinson's disease, another substantial long-term growth driver for AbbVie. Total sales for VYALEV were $256 million, up more than 27% on a sequential basis. VYALEV is well on track to achieve blockbuster sales this year. And we expect continued robust momentum in Parkinson's with the anticipated U.S. approval and launch of tavapadon in the third quarter. Feedback from key opinion leaders has been very positive with tavapadon demonstrating strong efficacy as both a monotherapy as well as an add-on to standard of care. Overall, we believe our Parkinson's portfolio with Violet Tavapadon and Duopa will be a substantial commercial opportunity. We continue to expect collective Parkinson's peak sales of more than $5 billion. Turning now to oncology, where total revenues were more than $1.6 billion, down 2.4% on an operational basis. Total VENCLEXTA sales were $771 million, up 9.6% on an operational basis. Performance in CLL continues to be strong as VENCLEXTA use in combination with BTK inhibitors and is expanding as a preferred fixed duration treatment globally. Double-digit sales growth from Ellahere, at Kinley, Amarilis also helped to partially offset the sales decline for IMBRUVICA, which was down 29.4% as expected due to IRA pricing and competitive share pressure. We also launched decnupas, a new therapeutic option for patients living with BPDCN, an ultra-rare form of blood cancer, further expanding AbbVie's emerging ADC portfolio. Moving now to aesthetics, which delivered global sales of nearly $1.3 billion, down 0.9% on an operational basis. Botox Cosmetic total revenues were $728 million, up 3.4% operationally, reflecting modest market growth globally. Juvederm Global sales were $245 million, down 6.6% operationally, reflecting continued headwinds in key dermal filler markets. As the industry leader, we continue to invest in this highly underpenetrated market to support long-term growth. I'm especially pleased with the recent Europe and Canada approvals of Boey our fast-acting short-duration toxin. -- while we complement our toxin portfolio very nicely and represents a new way for patients to initiate an aesthetic treatment. We expect Boey will meaningfully expand the toxin market and look forward to potentially bringing this exciting innovation to the U.S. Overall, we continue to demonstrate outstanding commercial execution. And with that, I'll turn the call over to Roopal for comments on our R&D highlights. Roopal?

Thank you, Jeff. I'll begin with dermatology programs in immunology. Rinvoq was approved in Europe for the treatment of severe alopecia and nonsegmental vitiligo. Applications are also under review in the U.S. with approval decisions anticipated later this year for vitiligo and early next year for alopecia areata. In hydradenitis suppuritiva, we remain on track for 16-week data later this year from both Rinvoq and luticizumab Phase III trials. In our early-stage dermatology pipeline, 3 programs were recently advanced into the clinic, including and IL-13, IL-31 receptor bispecific antibody for atopic dermatitis, an oral IL-23 receptor inhibitor for psoriasis and a long-acting IL-1 alpha beta bispecific antibody for hidradenitis suppurativa. Turning to gastroenterology. The U.S. application for Skyrizi subcutaneous induction in Crohn's disease is under review with an approval decision expected later this fall. The subcutaneous regimen demonstrated very high levels of endoscopic response and clinical remission with rates on both measures 25 points higher than placebo in the overall population and 45 points higher in patients who had not previously experienced advanced therapy. To our knowledge, these results in patients naive to advanced therapies are the highest reported for induction therapies in Crohn's disease, comparing very favorably to Skyrizi IV and other approved agents. Full results from the study will be presented this fall, which will include additional important endpoints such as endoscopic remission. Startup activities are underway for our Phase IIb combination trial in IBD. This multi-arm study will evaluate Skyrizi plus a higher dose of our novel anti-alpha4 beta7 antibody and extended half-life TL1A antibody in both Crohn's disease and ulcerative colitis. Interim results for Skyrizi plus anti-alpha4beta7 in Crohn's disease demonstrated a doubling of endoscopic remission at week 24 and compared to either monotherapy. This study is expected to complete this fall, and final results will be submitted for presentation at a future medical meeting. And lastly, in immunology, we announced the planned acquisition of Apogee Therapeutics, which adds a portfolio of long-acting biologics targeting atopic dermatitis, respiratory conditions and other immune-mediated diseases. These novel assets are highly complementary to our immunology strategy and further strengthen an already robust pipeline. Moving to neuroscience. Qulipta was approved in Europe for the acute treatment of migraine, expanding options for patients. In Parkinson's disease, an FDA approval decision is expected in the third quarter for tavapadan. Results from 3 Phase III trials demonstrated that this novel selective D1, D5 dopamine agonist has the potential to be a highly effective treatment for motor symptoms with low rates of dyskinesia, edema, sedation and impulse control disorder. We look forward to bringing this innovation to patients later this year. In our early-stage neuroscience pipeline, multiple new trials were recently initiated, including a Phase II study for a novel toxin Jemmy Made in essential tremor and a Phase Ib study for ABBV-1758, a blood-brain barrier crossing anti-pyroglutamate, A-beta antibody in Alzheimer's disease. In schizophrenia, the multi-ascending dose study for emraclidine is nearing completion. The 100-milligram dose retained a safe and towable profile, and now 150 milligrams is being evaluated. Dose selection for both schizophrenia and psychosis programs is expected in the coming months, and we remain on track to begin Phase II studies in the fourth quarter. Moving to solid tumor programs. Progress with T mAb A continues across a broad range of tumor types. In colorectal cancer, breakthrough therapy designation was granted for Tmab-A in combination with bevacizumab in refractory metastatic CRC. This designation supports our Phase III strategy in an all-comer third line plus setting. And the trial is now actively recruiting. In second-line CRC data are expected later this year from a Phase II study evaluating Tmab A combinations versus chemotherapy. These results will help inform the development strategy for Tmab A in first and second line CRC as in irinotecan replacement. Early stage results in ovarian and head and neck cancers were presented at the recent ASCO meeting, demonstrating TmabA potential in both tumor types. In platinum-resistant ovarian cancer, TmabA showed strong antitumor activity, particularly in cMET selected patients where response rates reached as high as 80%. The Tmab A also demonstrated a 50% response rate in clear cell carcinoma, a segment with high unmet need that typically does not respond well to cytotoxic therapy. -- plans to advance Tmab A in ovarian cancer will be discussed with regulators over the coming months. In C-MET selected patients with advanced head and neck cancer, Tmab A demonstrated a 31% response rate and a median overall survival of 15.3 months, which compares favorably to standard of care. A Phase II study evaluating Tmab-A plus pembrolizumab in frontline will start soon. And in pancreatic cancer, a Phase II study evaluating Tmab A with FOLFOX as a frontline combination therapy was recently initiated. Turning to hematologic oncology. Progress continues with atentamig across lines of therapy in multiple myeloma. An interim analysis is planned in the third quarter or progression-free survival from the monotherapy third line plus trial. If this interim analysis is positive, regulatory submission would occur later this year. A Phase III study evaluating atentamig in combination with pomalidomide in second line plus patients, including those that were exposed or refractory to an anti-CD38 antibody or who lost response to an anti-BCMA CAR-T or AC, will begin by year-end. Additionally, encouraging early-stage results for atentamig in relapsed/refractory light chain amyloidosis were presented at a recent EHA Congress. At the 40-milligram dose, 100% of patients achieved hematologic complete response with a promising safety profile that included no CRS or ICANS. Based on these results, a Phase III trial in newly diagnosed patients is being planned. Also in hematology, decnupas received FDA approval for blastic plasmacytoid dendritic cell neoplasm, an ultrarare and aggressive blood cancer as a new treatment alternative providing durable responses with a manageable safety profile and outpatient administration decnupas offers a meaningful benefit to patients with this rare cancer. Moving to aesthetics. Our rapid onset and short duration toxin Boey was approved in Europe and Canada for the temporary improvement in appearance of glabellar lines. This marks an important milestone in aesthetic medicine. Boey was developed to allow patients to temporarily preview the benefits of cosmetic toxins without worrying about long-lasting results. Clinicians and patients now have another option to tailor treatment to individual needs and goals. In summary, we are making meaningful progress with our pipeline and look forward to additional important data readouts, regulatory submissions and approvals throughout the remainder of 2026. With that, I'll turn the call over to Scott.

Thank you, Roopal. Starting with our second quarter results. We reported adjusted earnings per share of $3.65, which is $0.06 above our guidance midpoint. These results include a $0.17 unfavorable impact from acquired IP R&D expense. Quarterly net revenues were nearly $17 billion, reflecting robust growth of 10.2%, including a 0.7% favorable impact from foreign exchange. Adjusted gross margin was 84.7% of sales, adjusted R&D expense was 13.6% of sales and adjusted SG&A expense was 21% of sales. The adjusted operating margin was 48.3% of sales which includes a 1.7% unfavorable impact from acquired IPR&D expense. Net interest expense was $679 million. The adjusted tax rate was 14.7%. Turning to our financial outlook. We are updating our full year adjusted earnings per share guidance to between $13.87 and $14.07. This update reflects a $0.10 improvement in the outlook of our existing business based on strong second quarter results and continued momentum. It also now includes $0.14 of anticipated dilution related to the planned Apogee acquisition that is more than offsetting our underlying overperformance. We continue to expect that the Apogee transaction will close in the third quarter. This guidance does not include an estimate for acquired IP R&D expense that may be incurred beyond the second quarter. We now expect total net revenues of approximately $67.6 billion, increase of $300 million. This assumes a roughly 0.5% favorable impact from foreign exchange on full year sales growth, reflecting less benefit than our previous expectation. Our increased revenue forecast includes the following approximate assumptions for several of our key products and therapeutic areas. We now expect Skyrizi global revenues of $21.7 billion, an increase of $100 million based on momentum across psoriatic and IBD indications. Total neuroscience revenues of $12.7 billion, an increase of $100 million, now reflecting Vraylar sales approaching $4.1 billion and Botox Therapeutic sales approaching $4.2 billion. The remaining $100 million increase reflects momentum from Rinvoq and VENCLEXTA. Moving to the P&L for 2026. We continue to forecast full year adjusted gross margin above 84% of sales. We now expect adjusted R&D expense of approximately $9.8 billion, an increase of $100 million reflecting Apogee related pipeline investments. We expect adjusted SG&A expense of approximately $14.5 billion as we continue to support our significant commercial momentum. We anticipate an adjusted operating margin ratio approaching 47% of sales. We also expect adjusted net interest expense of approximately $2.9 billion, an increase of $200 million, which reflects the partial year financing cost of the planned Apogee transaction. Finally, we now forecast our non-GAAP tax rate to be approximately 14.5% and which reflects the impact of acquired IPR&D. Turning to the third quarter. We anticipate net revenues of approximately $17.2 billion which includes an estimated 0.4% unfavorable impact from foreign exchange. We also forecast adjusted earnings per share between $3.84 and $3.88. This guidance contemplates a partial quarter of dilution related to the planned Apogee transaction, but does not include acquired IP R&D expense that may be incurred in the quarter. Finally, AbbVie is financially well positioned to complete the planned Apogee acquisition. We have secured interim financing and expect to issue long-term debt in the coming months. We remain committed to achieving a net leverage ratio of 2x within 2 to 3 years following the deal close. Importantly, based on our strong cash flows, balance sheet and business outlook, we continue to have substantial financial flexibility to pursue additional innovative business development. In closing, AbbVie continues to deliver outstanding performance, and we are carrying significant momentum into the second half of 2026. With that, I'll turn the call back over to Liz. .

Thanks, Scott. We will now open the call for questions. In the interest of hearing from as many analysts as possible over the remainder of the call, we ask that you please limit your questions to 1 or 2. Operator, we'll take the first question. .

[Operator Instructions] We will go first to Terence Flynn with Morgan Stanley.

Great. Congrats on all the progress. Maybe a 2-part for me on Skyrizi I know you have the FDA action on the subcutaneous formulation for induction coming up this fall. Maybe Roopal, you could just speak through confidence in that approval. There's everything on manufacturing lined up? Just want to make sure there's no issues there. And then on Skyrizi plus alpha 4 beta 7, some very exciting data looking forward to seeing that. Can you confirm yet if that will be at the UEGW conference in the fall?

Thanks, Terence. It's Rule. So on the CD subcutaneous Skyrizi as I highlighted, very strong data. It is with Skyrizi. So it's asset well known to health authorities and manufacturing is very well known to us. So we have a very complete submission that's in front of the agency. And so far, that review is going according to plan. So no concerns at this moment. And then on the alpha 4 beta 7 combo data I didn't specifically call out a meeting because of the timing. What we provided earlier was interim data. So as the rest of it comes in we would obviously try for later this fall. And if we're unable to get into that window, then it would go into next year congresses. So either way, we're very excited to show more of that data. And like I said, could be in the fall and if not possible, we'll see it next year.

Thanks, Terence. .

Yes, ma'am, we'll go next to Carter Gould with Cantor Fitzgerald.

A follow-up for Roopal. The Phase II that you've talked about starting with the alpha4beta7. It's a bit of a beast; 2,000 patients across a number of settings. Can you maybe just set the stage there. In the past, you've talked about speed, not the -- not waiting potentially for the full Phase III data or Phase II data before moving to Phase III. Is that still in the cards? And in that study, it also talks about ABB466 with Skyrizi and trosinilumab, is that a co-formulation or just a co-administration? .

Yes. Thanks for the question. Yes, it's a large study. It's a platform study that -- similar to what we've run before. Skyrizi is the anchor asset will be combining Trou or the alpha 4 beta 7 at even a higher dose than we studied previously. We are in parallel working on co-formulations. So the intent at launch for any of these assets in combination with Skyrizi and IBD would be a co-formulation. So that data would be collected in Crohn's and ulcerative colitis in combination with Skyrizi. And then also the reasoning for the scale of that study is also the TL1A is in that trial as well, combined with Skyrizi in Crohn's disease and ulcerative colitis. The enrollment should be starting any moment where a patient will be entered. The trial is ready to go. The other question was around when we can start seeing data. We don't have an intention to wait until the end. If we will take a couple of interim snapshots. And if we see, for example, the higher dose of Tosu or the Alpha-4-beta-7 agent is supporting higher efficacy, then we would start making plans to move into Phase III with that combination. And the same goes to the TL1A, if we start seeing really strong data, we would start moving quickly into Phase III. We would anticipate right now, hopefully, in the first half of 2028 being able to kick off Phase III programs in IBD.

Thanks, Carter. .

We'll go next to Chris Schott with JPMorgan.

Can I just come back to Skyrizi in psoriasis. I know you made some comments in terms of the launch of IoT and the impact or lack of impact that's had there. Just can you elaborate a bit more on just what you're seeing in terms of dynamics in psoriasis? And just how much more growth opportunity there is for Skyrizi in the setting given the higher penetration rates. Just then a quick second question is looking ahead to the upcoming readouts for luti and Rinvoq in HS. Can you just talk about your relative confidence in those 2 assets and the role you see each laying in the market there?

Yes, it's Jeff. I'll take the first question. And as I mentioned, the profile is very, very strong, as you know, the skin clearance, the joint protection, the safety, the convenience, it's a very unique product. And that's why I think we have such a high capture rate. We see a couple of things in the market, and I'll highlight them we've not seen a material change in our momentum since the launch of ICO. So 1 of the things that we look at, I'll give you a couple of data points. We have a fairly detailed Symphony model, which looks at sort of sequential share. And what we can see since the launch of ICO, the vast majority of ICO share that we see is being sourced from the 2 other orals in the marketplace. And that's pretty similar to what we had expected. I think the other thing, which is even more important, it's sort of a quantum measurement. So just to put a fine point on it. When we can track, we can actually see our raw NBRx data in the derm and psoriasis market. And this, of course, is our new starts as well as our switching starts, classical NBRx. And when we look at the data from the launch of ICO we've absolutely seen no degradation in any of our NBRx trends. In fact, they've actually grown from the launch of ICO in March. So that leads to another point that's probably accurate as we continue to monitor is there still significant headroom in the moderate-to-severe psoriatic space. A large percentage of patients in the United States and around the world are still not on an advanced therapy. So we do, of course, factor in competitive dynamics into our competitive set and we'll continue to monitor. But we're quite pleased with the Skyrizi momentum, and we think it will continue given the robustness of this marketplace.

And Chris, this is Rob. I'll just add. I mean, we always view this as a market expanding competitive launch, and that's exactly how we're seeing it. Obviously, we're still investing. I mean, I think you've seen some disease awareness investments that we've made. And so we are seeing very nice momentum continue. And I think Jeff's point that is highlighting here that we're actually seeing an acceleration of NBRx growth for Skyrizi since the launch of ICO just further supports our view that is more of a market-expanding opportunity. .

Chris, it's Roopal regarding the HS questions. We have observed other failures in the space in HS over the years. And we did our best to design 2 very robust studies and enrollment has gone very well. I would say training is very important for the sites. Patient selection is very important to make sure you're picking up moderate and severe disease. As we look at the distinction between luti and Rinvoq, the lutikizumab studies are enrolling patients that were naive to advanced therapies or biologics, along with those that had failed, for example, let's say, anti-TNFs. And the primary endpoint there is high score 75 sort of more stringent endpoint while including more naive patients. When we look at the Rinvoq design, that is coming post biologics. So for example, post HUMIRA. And given that, that's 100% after -- that 1 has a high score 50, and we'll have secondary endpoints that will look at High Score 75. So these are things that we are doing to manage the trial outcomes to ensure a high -- as high a probability of success as we can. And how I describe the eligibility criteria for these 2 trials will be our go-to-market strategy, which is very consistent with what we have executed, I would say, very well. Jeff's team has done a fantastic job in IBD with Skyrizi and Rinvoq and something similar is how we're thinking here where Luti, based on the robust safety profile we observed in Phase II, along with strong efficacy, could allow that to be in earlier lines of patients and Rinvoq as we've seen over the years across multiple indications, works well as a later line after advanced therapy. So based on those designs, you would see a similar profile in market with those 2 agents just like you've seen very successfully in IBD.

Thanks, Chris.

Yes, we'll go next to Michael Yu with EBS. Maybe just pivoting away from immunology for 1 second. Can you just talk a little bit about your expectations on Tavapadon launch ultimately and how you see this playing out? And what could be a slow start, fast start. Maybe just talk a little bit about how you think about that. And then similarly, in CNS, which you've talked a lot about seeking to grow. You also have a brain shuttle as well. And I just wanted to understand a little bit about how you think that's differentiated as there's obviously a lot of interest here given what's going on in Alzheimer's.

Yes. Thanks for the question. I'm glad you brought up tavapadon because it's a key piece of our overall long-term strategy for growth in Parkinson's, as I highlighted in my remarks. Tvapadon is a very, very unique product. There's nothing else like it in the marketplace. It's the first selective D1/D5 agonist. And obviously, we'll have both a monotherapy indication as well as an add-on to levodopa/carbidopa orals, the standard of care. And it's quite remarkable data that we see. Certainly, one of the most impressive dynamics that the thought leaders are very excited about is after 85 weeks of long-term utilization of tavapadon more than 90-plus percent of patients don't need to basically increase their dose of levodopa/carbidopa. So essentially, it kind of causes the motor dysfunction, which is really, really critical. And there's a belief that, that, of course, will then spare the dyskinesia. That's just the hallmark of what happens over time. So it's very impressive. The other thing that's impressive and very distinctive is low -- very low rates of sedation or so-called sleep attacks, which are very challenging in this population, low rates of edema and really impulse control disorder. So that profile of efficacy and safety and distinctiveness is quite attractive. Now to get to the nub of your question, we do see that the ramp will be modest at first, and I'll tell you why. It's not the profile of the medication. It's largely because based on the timing of the approval, we will not be immediately added into the Medicare formularies. That's going to take some more time based on the way those negotiation works, et cetera. But nonetheless, we believe that this will be a substantial addition to the marketplace and a clear contributor to that greater than $5 billion peak potential. So lots of excitement for tavapadon.

And Michael, it's Roopal regarding the 1758 or the Aliata asset. So that has now entered into Ib setting, so patients who have disease and the molecule was built to have an extended half-life, and we've observed that with the PK data in the first-in-human studies. The other thing we wanted was a better cerebrospinal fluid penetration than we saw with a naked antibody, which, let's say, is around 0.1%, 0.2%. This is over 1%, so several fold higher. So the transport is working. So if we're able to get more into the CSF and an extended half-life and you can take down plaque and specifically, this is targeting Abeta, the pyroglutamate type, which we think is the more toxic species. We think that could set up a potential for a subcutaneous agent that could be dosed monthly. So we're looking for simplicity in the patient experience. So I would say by next year, we should start seeing data in scans to see if we can clear the brain as much as possible. And if we see that, this would rapidly move. And in parallel, we're also working on our anti-tau program utilizing siRNA and the same shuttle technology. What we've observed today is mostly intrathecal approaches. We think that can be challenging. And if we can deliver an siRNA using similar technology with -- from Aata, that could be another benefit. Ultimately, down the road, I think everyone has commented on this to approach Alzheimer's will likely require a combination approach. And I would say AbbVie is well positioned to go after this and hopefully, one day help as many patients as possible.

Yes. We'll go next to Mohit Bansal with Wells Fargo.

So I want to come back to HS. And the biggest debate like when you talk to KOLs is that is this -- is IL-1 is simply another inflammatory mechanism for HS or it could become meaningfully superior to like IL-17 or everything that is out there also on fibrotic and all those components. What evidence do today gives you confidence that lutikizumab could be -- could actually break through the efficacy ceiling there? And then the second part on this one, same one is that how do you -- how are you managing the GLP-1 baseline use in your clinical trials because that could actually contribute to high placebo rates here?