AbbVie lowers Q2 and FY 2022 guidance on acquired R&D assets, milestones expense

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• AbbVie (NYSE:ABBV) said Wednesday that its Q2 and fiscal year 2022 results will be negatively impacted by in-process research and development (IPR&D) costs due to acquired assets as well as milestones expense.
• For Q2 2022, AbbVie (ABBV) expects acquired IPR&D and milestones expense of $269 million on a pre-tax basis.
• In an SEC filing, the company said that for Q2, it projects EPS of $3.24-3.28, excluding non-recurring items, down from $3.38-$3.42. Consensus is $3.43. For FY 2022, it now expects EPS of $13.78-13.98, excluding non-recurring items, down from $13.92-$14.12. Consensus is $14.01.
• After its Q1 financial results in late April, AbbVie (ABBV) first lowered its full-year guidance.
• In March, AbbVie (ABBV) said it would acquire Syndesi Therapeutics for $130M upfront and up to $870M in milestone payments.

Comments

[Jimghad]

Every article we see on Abbvie, they quote guidance from the CEO. as if it is written in stone.
It is worth noting that guidance can be changed at the drop of the hat. (This one is just 2 weeks before the results are released.) Every thing said and promised should be taken with a grain of salt.

[BAHAMAS1]

Long ABBV and continuing to Reinvest the Excellent Sustainable Dividend.

[Dividending]

Will the ABBV business strive and thrive with increasing dividends over the next few decades - that’s my focus?
Short term volatility (in many metrics) is the price of admission and should not be unexpected for any investors.
Traders, well, they are supposed to live for volatility as apparently one can make money that way.
Very long ABBV…

[dynx]

@Dividending I’d expect a falloff in dividend growth over the next 2-3 years followed by resumption of good growth there after.

[Liquidity Swords]

Not very transparent to sneak this into an SEC filing instead of a full press release. WTF ABBV?

[Bradley Guichard]

@Liquid Swords I wouldn’t expect a press release for a 0.14 guidance change due to increased milestone expense. SEC filing seems like like standard operating procedure

[Bradley Guichard]

@Bradley Guichard also ABBV, like most companies, has a feature on their investor relations site which will email you every time there is a new filing if you sign up. In this way it is a news release and is picked up by SA and other outlets.

[U6439892]

They revised EPS but did not change revenue guidance - this means the profit reduction is due to acquired R&D costs - so while EPS is going down, it is not that bad news as it is due to accounting changes

All pharma companies will give such reduced guidance as they keep on acquiring new companies which has R&D costs - these are not known in advance.
So as long as EPS reduction is just due to R&D reason we are OK

[Onganiad]

@U6439892 interesting insight. Thanks for sharing.

[Up and Away]

Smart thing to do. The analysts always late to bring down earnings so they took the innovative. Prefer a company be upfront knowing tough times are ahead for all.

[farmed out]

After-hours trading seems to be reading this very nonchalantly. We'll see if this brings any downdraft to ABBV in tomorrow's action.

[499991]

Long long on ABBV.

[kevn1111]

Not good. Are we getting full story. Let’s see what growth rates for Rinvoq and Skyrizi are compared to prior qtrs. If those 2 are still crushing it then all is good.

[kevn1111]

@kevn1111 they lowered in April for same reason. So twice have lowered within 3 months go in-process R&D and milestone.

That can be a good thing as they move forward an acquired R&D and hitting milestones earlier and thus paying out. But the question is why were these not planned? Some very poor internal analysis there.

[KamilAgrawala]

@kevn1111 Wrong - Milestone payments are a good thing, they 're a predetermined marker of payments if acquired pipeline drugs meet some metrics. This eventually means a greater chance of success for new drugs adding to revenues.

[kevn1111]

@KamilAgrawala guess you missed part 2 of my response.

If it is just that ok, but they have lowered twice in 3 months. So someone is not planning very welll or they are using this reasoning to maybe cover up some other areas. Is the reason I mentioned the 2 drugs which are the 2 big growth drivers through 2025.