AbbVie Inc. (ABBV), Financial Analysis

1 Revenue & Business Model

• Storyline: AbbVie replaces Humira with Skyrizi and Rinvoq, adds neuroscience and funds acquisitions with debt. Humira earned 36.8% of FY2021 revenue; Skyrizi and Rinvoq earned 48.7% of Q3 2026 revenue. Chapters 2 to 4 cover the three revenue drivers: immunology, neuroscience and oncology.
• One reporting segment, reported by therapeutic area. FY2025: immunology $30.41bn (49.7%), neuroscience $10.77bn (17.6%), oncology $6.66bn (10.9%), aesthetics $4.86bn (7.9%), eye care $2.11bn, other key products (Mavyret, Creon, Linzess) $3.74bn.
• Net revenues FY2021 $56.20bn to FY2025 $61.16bn, a 2.1% CAGR, with a dip to $54.32bn in FY2023 after US Humira biosimilars launched; TTM Q3 2026 $66.01bn; 9M 2026 $49.40bn, +10.9%.
• Regions: United States 76.2% of FY2025 revenue and 76.6% of Q3 2026 revenue.
• Aesthetics: $1.18bn in Q3 2026, (1.4%); Botox Cosmetic $669m, +4.9%; Juvederm $222m, (11.9%); FY2023 $5.29bn to FY2025 $4.86bn. It has no chapter of its own because its main competitors, Galderma and Merz, do not file with the SEC.
• US pricing terms: in Jan 2026 AbbVie signed a three year voluntary agreement with the US government covering low Medicaid prices and direct to patient offerings, with a $100bn US R&D and capital pledge over a decade, in exchange for exemptions from tariffs and future price mandates.

2 Immunology: Skyrizi and Rinvoq Replace Humira

• Immunology $9.17bn in Q3 2026, +16.3%, 52.7% of net revenues. Skyrizi $5.78bn, +22.7%; Rinvoq $2.71bn, +23.9%; together 48.7% of net revenues against 42.3% in FY2025 and 8.2% in FY2021.
• 9M 2026: Skyrizi $15.76bn and Rinvoq $7.35bn, together $23.11bn; Humira $2.13bn, (35.4%).
• Humira $683m in Q3 2026, (31.2%), with US Humira (39.9%); annual Humira revenue fell from $21.24bn in FY2022 to $4.54bn in FY2025 after US biosimilar entry in 2023.
• Additions: Apogee (completed 3 Sep 2026) adds zumilokibart, a half life extended IL 13 antibody in atopic dermatitis with Phase 3 to start in H2 2026, and APG273 (IL 13 plus TSLP) in asthma and COPD; FDA approved subcutaneous Skyrizi induction in Crohn's disease in Q3 2026; lutikizumab met its Phase 3 endpoint in hidradenitis suppurativa.

How the immunology market is changing

• Newer mechanisms grow while older ones decline: Sanofi Dupixent +34.8% at constant exchange rates to EUR 5.69bn in Q3 2026; Lilly Ebglyss +59.1% to $202m and Omvoh +75.4% to $114m; Novartis Cosentyx +9% to $1.86bn; Lilly Taltz (5.1%) to $856m; Amgen Otezla (21%) in Q2 2026.
• Medicare price setting reaches immunology: Amgen's Enbrel net selling price fell 22% in Q2 2026 after its Medicare set price took effect on 1 Jan 2026.
• Pharmacy benefit managers: AbbVie added a risk factor in the FY2025 10-K on formulary exclusions, step therapy and rebate leverage by consolidated PBMs.
• Market size per AbbVie's Apogee investor presentation (Ex 99.2, 22 Jun 2026): about $18bn in atopic dermatitis and about $18bn in asthma, each growing over 15% a year (company estimates).

3 Neuroscience: Growth Ahead of Medicare Price Setting

• Neuroscience $3.39bn in Q3 2026, +19.4%, 19.5% of net revenues; FY2025 $10.77bn, +19.6%, against $7.72bn in FY2023.
• Products, Q3 2026: Botox Therapeutic $1.08bn, +9.8%; Vraylar $1.07bn, +14.3%; Ubrelvy $449m, +26.9%; Qulipta $398m, +38.2%; Vyalev (Parkinson's disease) $286m, against $138m in Q3 2025; 9M 2026 Vyalev $743m.
• Price setting: Vraylar receives a Medicare government set price from 1 Jan 2027; Botox was selected in Jan 2026 for Medicare Part B and D prices from 1 Jan 2028.
• Approvals: FDA approved Juvmo (tavapadon), a selective D1 and D5 agonist for Parkinson's disease, in Q3 2026; Qulipta met its Phase 3 LUNA endpoint in menstrual migraine.

How the neuroscience market is changing

• Migraine: AbbVie Qulipta +38.2% and Ubrelvy +26.9% in Q3 2026; Teva Ajovy held 32.5% of US prescriptions in the subcutaneous anti CGRP class in Q2 2026, with revenue +56.0%.
• Alzheimer's disease antibodies: Eisai recorded Leqembi in market sales of $202m in Q3 2026 (+67%, US $107m); Lilly Kisunla $193m (+175.7%). AbbVie reports no Alzheimer's product sales.
• Multiple sclerosis: Novartis Kesimpta $1.48bn in Q3 2026, +22% in constant currency.
• Policy: the Medicare set price schedule (Vraylar 2027, Botox 2028) and the Jan 2026 voluntary agreement shape US pricing for the neuroscience portfolio.

4 Oncology: Venclexta and Elahere Offset the Imbruvica Decline

• Oncology $1.70bn in Q3 2026, +0.8%, 9.7% of net revenues; US (5.7%), international +11.1%; 9M 2026 $4.98bn.
• Products, Q3 2026: Venclexta $803m, +10.7%; Imbruvica $522m, (26.1%); Elahere $224m, +31.0%; Epkinly $108m, +57.7%.
• Imbruvica FY2021 $5.41bn to FY2025 $2.87bn; under a Medicare Part D government set price since 1 Jan 2026.
• Pipeline: etentamig filed with the FDA in multiple myeloma (Q3 2026); Epkinly missed overall survival in the DLBCL 1 Phase 3 study (Jan 2026).

How the oncology market is changing

• BTK inhibitors: BeOne Brukinsa +31% to about $1.2bn in Q2 2026 and Lilly Jaypirca +59.4% to $228m in Q3 2026, while Imbruvica fell 26.1% to $522m.
• Breast cancer and immunotherapy: Novartis Kisqali +37% to $1.82bn in Q3 2026 against Lilly Verzenio +2.8% to $1.51bn; Merck Keytruda family $8.60bn, +5.6%, with subcutaneous Keytruda Qlex $830m; J&J oncology $7.60bn, +16.4%.
• Acquired IPR&D: AbbVie's acquired IPR&D and milestones fell to $1.25bn in 9M 2026 from $3.75bn in 9M 2025; Merck charged $15.1bn of acquired IPR&D and licence costs to R&D in 9M 2026.

5 Financial Analysis & Ratios

• GAAP operating income TTM $21.23bn, 32.2% of net revenues, against 24.6% in FY2025, 16.2% in FY2024 and 31.9% in FY2021. Acquired IPR&D and milestones, which AbbVie books in operating expenses and keeps in adjusted EPS, were $2.52bn TTM against $5.02bn in FY2025.
• Net income TTM $10.34bn, diluted EPS $5.81; below operating income sit net interest expense ($2.68bn TTM) and contingent consideration charges ($6.50bn in FY2025, $4.73bn in 9M 2026) in other expense. Adjusted EPS TTM $12.83.
• Cash flow (latest available, TTM Q2 2026): operating cash flow $19.51bn, capex $1.30bn, free cash flow $18.21bn (28.3% of TTM Q2 2026 revenue); dividends $11.98bn and buybacks $1.51bn. FY2025 dividends of $11.66bn exceeded net income of $4.23bn.
• Balance sheet at 30 Jun 2026 (latest filed): debt $70.82bn, cash and investments $6.57bn, net debt $64.25bn. These figures exclude the $10.0bn of notes issued on 18 Aug 2026 to fund Apogee. Stockholders' equity ($5.94bn), against ($3.27bn) at end 2025, so ROE is not meaningful.
• Assets are mainly acquired intangibles: intangible assets $52.64bn and goodwill $35.64bn at end 2025, 65.9% of total assets; intangible impairments $847m in FY2025 against $4.48bn in FY2024. Ratings: Moody's A2 (upgraded Feb 2026), S&P A minus with a positive outlook (Jun 2026).

Cost structure and profitability

• GAAP gross margin 75.4% in Q3 2026 against 66.4%; adjusted gross margin 85.1%. Q3 2025 cost of products sold included an $847m impairment of the Resonic and Durysta intangible assets (Q3 2025 10-Q). Amortization of acquired intangibles runs through cost of products sold: $5.11bn of amortization in 9M 2026 is excluded from adjusted results.
• R&D $2.57bn, +10.7%, 14.7% of net revenues; acquired IPR&D and milestones $216m against $2.68bn in Q3 2025; 9M 2026 $1.25bn against $3.75bn.
• SG&A $4.09bn, +14.5%, 23.5% of net revenues, incl. acquisition and integration costs for Apogee ($431m in 9M 2026 across lines).
• Operating margin 33.8% in 9M 2026 against 23.6% in 9M 2025; costs and expenses (net revenues less operating income) $32.71bn, (3.8%).
• Below operating income: contingent consideration charge $829m in Q3 2026 and $4.73bn in 9M 2026; net interest expense $2.68bn TTM; Q3 2026 tax rate 12.6%.

6 MD&A & Management Commentary

Q3 2026 results release (8-K of 30 Oct 2026)

• Q3 2026: net revenues $17.40bn, +10.3% reported and +10.5% operationally; GAAP EPS $2.37 against $0.10; adjusted EPS $3.82 incl. $0.11 of acquired IPR&D, against guidance of $3.73 to $3.77 given on 5 Oct 2026.
• Margins: GAAP gross margin 75.4% (adjusted 85.1%); GAAP operating margin 36.0% (adjusted 48.7%); tax rate 12.6% GAAP, 13.6% adjusted. Q3 specified items per share: intangible amortization $0.79, contingent consideration $0.46, acquisition costs $0.22.
• By area: immunology $9.17bn, +16.3%; neuroscience $3.39bn, +19.4%; oncology $1.70bn, +0.8%; aesthetics $1.18bn, (1.4%).
• Approvals and pipeline (release): FDA approved subcutaneous Skyrizi induction in Crohn's disease and Juvmo (tavapadon) in Parkinson's disease; etentamig filed with the FDA in multiple myeloma; lutikizumab met its Phase 3 endpoint in hidradenitis suppurativa; ABBV 295, a long acting amylin analog for obesity, moves toward Phase 2.
• Capital: Apogee completed (about $10.9bn equity value, $135.11 per share); quarterly dividend raised 5.2% to $1.82 from Feb 2027; FY2026 adjusted EPS guidance raised to $13.95 to $13.99.
• Q2 2026 results (8-K Ex 99.1, 31 Jul 2026): net revenues $16.99bn, +10.2%; GAAP EPS $2.03; adjusted EPS $3.65, +22.9%; Humira $756m, (35.9%); guidance $13.87 to $14.07 incl. ($0.14) of Apogee dilution.
• Q1 2026 results (8-K Ex 99.1, 29 Apr 2026): net revenues $15.00bn, +12.4%; adjusted EPS $2.65 incl. $0.41 of acquired IPR&D; neuroscience +26.0%.

Management and CFO commentary

• CEO Robert Michael, 8-K Ex 99.1 of 30 Oct 2026: cited regulatory approvals and the Apogee completion; raised FY2026 guidance and the quarterly dividend.
• Finance commentary in the acquired IPR&D updates (7 Jan, 3 Apr, 6 Jul and 5 Oct 2026): acquired IPR&D and milestones of $1.26bn (Q4 2025), $744m (Q1 2026), $291m (Q2 2026) and $216m (Q3 2026); guidance excludes future IPR&D, and each update lowered the EPS range by the per share charge.
• Apogee release of 22 Jun 2026: debt funded; EPS dilution about $0.14 in 2026 and about $0.46 in 2027, accretive from 2032; target net leverage of 2x within two to three years of closing; A2 and A minus ratings to be kept.
• Q2 2026 release (31 Jul 2026): FY2026 adjusted EPS guidance $13.87 to $14.07, incl. ($0.14) of Apogee dilution partly offset by $0.10 of overperformance.
• Apogee completion release (3 Sep 2026): reaffirmed FY2026 guidance of $13.87 to $14.07 and Q3 guidance of $3.84 to $3.88.
• CEO, 8-K Ex 99.1 of 4 Feb 2026: record net sales in the second full year after the US Humira loss of exclusivity; growth expected in 2026.

7 Peer Valuation & Sector Summary

• Sector: large biopharmaceutical companies with immunology, neuroscience and oncology franchises. AbbVie relies on two immunology products for about half of revenue; Lilly on incretins; Merck on Keytruda.
• Growth, latest quarter: LLY 38.6%, ABBV 10.3%, BMY 6.9%, MRK 4.7%. Operating margin TTM after acquired IPR&D: LLY 40.3%, ABBV 32.2%, MRK 8.1%.
• Gross margin: LLY 83.6% and MRK 71.8% TTM, ABBV 73.7% TTM after amortization of intangibles (85.1% adjusted in Q3 2026), BMY 69.9% in 9M 2026.
• Free cash flow margin FY2025: ABBV 29.1% against AZN 20.0% and PFE 14.5%; ABBV TTM Q2 2026 28.3%.
• Leverage and valuation: net debt ABBV $64.3bn (30 Jun 2026, before the Aug 2026 notes), PFE $51.2bn, MRK $46.8bn, LLY $44.6bn, JNJ $27.4bn. EV/Sales ABBV 8.9x against LLY 15.1x and MRK 6.2x; ABBV P/E 50.8x TTM GAAP EPS and 23.0x TTM adjusted EPS.

8 Material Events & Contracts

• 17 Forms 8-K between 31 Oct 2025 and 31 Oct 2026: five results releases, four acquired IPR&D and guidance updates, two notes offerings each with an underwriting agreement and a closing filing, the Apogee agreement and completion, the annual meeting vote results and a director appointment.
• Apogee Therapeutics: agreed on 22 Jun 2026 at $135.11 per share in cash, about $10.9bn equity value and about $10.1bn net of cash acquired, a premium of about 49%; completed on 3 Sep 2026; funded with the $10.0bn notes of Aug 2026.
• Debt raised in 2026: $8.0bn of notes in seven tranches (closed 4 Mar 2026) and $10.0bn in ten tranches (closed 18 Aug 2026), coupons from 3.775% to 6.100%, maturities 2028 to 2066.

9 Ownership, Voting Power & Annual Meeting

• One class of common stock, staggered board. Class II directors serve to 2029; supermajority voting provisions remain. Vanguard Capital Management holds 132.9m shares, 7.51% (Schedule 13G, event 31 Mar 2026); no other Schedule 13G or 13D was found for 2024 to 2026.
• 2026 annual meeting (8 May 2026): four Class II directors elected with 93.1% (Jennifer Davis) to 98.3% (Melody Meyer) of votes cast; say on pay 94.7%; the management proposal to remove supermajority voting received 98.9% of votes cast but failed, as for votes equalled 73.1% of shares outstanding; an independent chair proposal received 39.6%.
• Insiders, 12 months to 31 Oct 2026 (44 Form 4 filings): no open market purchases; open market sales about $18.9m by three officers. General Counsel Perry Siatis sold 41,049 shares for $9.5m (Feb to Mar 2026), Chief Business and Strategy Officer Nicholas Donoghoe 32,710 shares at $250 for $8.2m (14 Aug 2026), Controller David Ryan Purdue 5,230 shares for $1.2m.
• Board: expanded from 12 to 13 members on 15 Oct 2026 with the appointment of John M. Carethers (UC San Diego) as a Class II director.

10 Risk Factors

• Item 1A of the FY2025 Form 10-K holds 31 risk factors against 29 in FY2024 (8,826 words against 8,138): two added, on pharmacy benefit managers and on tariffs, and two materially reworded, on pricing and on government benefit programs; the Forms 10-Q of 2026 contain no Item 1A update.

How risk factors changed

• Comparison: 10-K FY2025 filed 20 Feb 2026 acc 0001551152-26-000008 against 10-K FY2024 filed 14 Feb 2025 acc 0001551152-25-000020.
• Factor count rises from 29 to 31 and words from 8,138 to 8,826 (plus 8%), with both additions on US pricing and trade policy.
• Government set Medicare prices now cover Imbruvica from 2026, Vraylar from 2027 and Botox from 2028, with Botox named for the first time in the pricing factor.
• Tariff is named 3 times across 2 factors against none a year earlier, and MFN pricing appears for the first time.
• Humira is named once against 4 times; the patent factor drops the paragraph on Humira biosimilar erosion and states Skyrizi and Rinvoq were about 42% of 2025 net revenues.

11 Stock Price, Scenarios & Sensitivity

• ABBV closed at $295.30 on 30 Oct 2026, +35.4% on the Oct 2025 month end close of $218.04, 1.1% below the 52 week high of $298.73 and 55.6% above the low of $189.82.
• Valuation: 50.8x TTM GAAP EPS of $5.81; 23.0x TTM adjusted EPS of $12.83; 21.1x the FY2026 adjusted EPS guidance midpoint of $13.97; EV/Sales 8.9x on TTM revenue with net debt at 30 Jun 2026; free cash flow yield 3.5% on TTM Q2 2026 free cash flow; dividend yield 2.34% on $6.92 a year.
• Scenario model: net revenues grow from TTM Q3 2026 for three years to FY2029; GAAP operating margin as stated; net interest expense $2.68bn a year (TTM level); no contingent consideration charges; 15% tax rate; price equals FY2029 GAAP EPS times exit P/E.

Critical factors and core assumptions

• Base: TTM Q3 2026 net revenues $66.01bn; GAAP operating margin 32.2% (Q3 2026 36.0%; adjusted 48.7%); TTM GAAP EPS $5.81, adjusted $12.83.
• Best case: 10% revenue CAGR, 45% GAAP operating margin as charges fall toward the adjusted level, 24x P/E.
• Base case: 7% revenue CAGR as immunology growth slows and Humira trends toward zero, 38% margin, 20x P/E.
• Worst case: 3% revenue CAGR with price pressure after the three year exemption and competition in the IL 23 and JAK classes, 30% margin, 15x P/E.
• Tax rate 15% (Q3 2026 GAAP 12.6%, adjusted 13.6%); net interest $2.68bn a year; share count unchanged at 1.77bn (H1 2026 buybacks $1.1bn).

Scenarios, three years forward

Sensitivity analysis

Disclaimer

This analysis is for information only and is not financial advice. It is derived from public SEC filings retrieved via sec-api.io and is not a publication of the U.S. Securities and Exchange Commission. Scenario values are model outputs under stated assumptions and are not forecasts. Data as of 30 October 2026.

Sources

All company figures are read from SEC filings retrieved through the sec-api.io MCP server. Management statements are taken from the 8-K earnings and transaction releases; no earnings call transcript is used.