AbbVie Inc.

Good morning and thank you for standing by. Welcome to the AbbVie first quarter 2022 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. You may ask a question by pressing star 1 on your phone. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Ms. Liz Shea, Vice President, Head of Investor Relations.

Good morning, and thanks for joining us. Also in the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer, Rob Michael, Vice Chairman, Finance and Commercial Operations and Chief Financial Officer, Jeff Stewart, Executive Vice President, Chief Commercial Officer, and Tom Hudson, Senior Vice President, R&D, and Chief Scientific Officer. Joining us for the Q&A portion of the call are Carrie Strom, Senior Vice President and President, Global Allergan Aesthetics, Neil Gallagher, Vice President and Chief Medical Officer, and Rupal Thakkar, Vice President, Global Regulatory Affairs. Before we get started, some statements we make today may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. ABBYY 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 ABBYY'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 their website. Following our prepared remarks, we'll take your questions. So with that, I'll now turn the call over to Rick.

Thank you, Liz. Good morning, everyone, and thank you for joining us today. I'll briefly comment on our overall performance, then Jeff, Tom, and Rob will review our first quarter business highlights, pipeline progress, and financial results in more detail. I'm pleased with the excellent start to 2022. It further reinforces our confidence in the long-term fundamentals of the business. We reported adjusted earnings per share of $3.16, exceeding our expectations. Total net revenue of more than $13.5 billion was up 5.4% on an operational basis, also above our expectations. These results demonstrate strong momentum across several key products and portfolios, including robust double-digit operational revenue growth from SkyRisi, RINVOC, neuroscience, and aesthetics. SkyRisi is performing exceptionally well. We are achieving impressive market share gains in psoriasis, which remains a significant market opportunity. SkyRisi's recent launch in psoriatic arthritis, as well as the anticipated regulatory approval in Crohn's disease, should also serve as important growth drivers over the long term. RINVOC is also contributing compelling sales growth. Prescription trends in RA have recently stabilized, as we expected, and we are making excellent progress repositioning the brand as the leading second-line agent based on the robust data generated across our broad development programs. The early launch trends for RINVOC in both atopic dermatitis and psoriatic arthritis are highly encouraging. with commercial access and paid prescriptions expected to ramp significantly over the coming months. We anticipate that these two new indications, along with the recent U.S. approval in ulcerative colitis, should add substantial revenue growth for RENVOC over the long term. Neuroscience remains an exciting opportunity for our company. VELAR continues to have strong momentum across our currently approved indications. and the pending regulatory approval in major depressive disorder represents a significant upside to current projections. In migraine, our portfolio of distinct therapies, which is relvi, QLIPTA, and Botox Therapeutics, is demonstrating robust double-digit sales growth. With the migraine market anticipated to roughly double in size over the next several years, there is significant headroom for continued revenue growth with these compelling therapies. Aesthetics is once again exceeding expectations. The category continues to grow robust double digits, especially in toxins and fillers, where there is substantial opportunity for further market penetration. Our commercial team is executing at a high level with targeted promotion and enhanced digital services, including our Ally loyalty program driving strong market share performance across our major brands. In summary, this is an exciting time for AbbVie, and I'm extremely pleased with the evolution and momentum of our diverse portfolio. We're making excellent progress with the launches of several new products and indications, which will collectively add meaningful revenue for AbbVie as commercial access ramps for each of these opportunities. over the remainder of this year. We're off to another exceptional start, and our long-term growth prospects remain strong. I'd now like to take a brief moment to thank Mike Severino for his contributions to the success of AbbVie over the last eight years. As you know, Mike has decided to leave AbbVie at the end of May to pursue another career opportunity, and we wish him all the best. I'd also like to take this opportunity to formally introduce to you Tom Hudson. Tom joined AbbVie back in 2016 as the head of discovery and early development. In 2018, Tom undertook responsibilities for AbbVie's entire discovery organization. Then in 2019, he was promoted to the head of AbbVie R&D and chief scientific officer, where he assumed responsibility for all of AbbVie's R&D. Tom has an impressive background as a clinical scientist. His medical specialty is in clinical immunology and allergy. Tom played a critical role in the Human Genome Project while working at both the Whitehead Institute and MIT, where Tom led the team that mapped the human genome. Tom was also instrumental in the International HapMap Project to refine the genetic architecture of the human genome. Tom went on to further lead the Ontario Institute for Cancer Research, which included discovery and translational cancer research with a clinical network of more than 1,000 investigators. Tom will be providing an update on our continued pipeline progress to you later in the call. But first, I'll turn the call over to Jeff for additional comments or commercial highlights. Jeff?

Thank you, Rick. We continue to demonstrate strong commercial execution across our therapeutic portfolio. I'll start with immunology, which delivered global revenues of more than $6.1 billion, reflecting growth of 8.1% on an operational basis. Humira global sales were approximately $4.7 billion, down 1.8% on an operational basis, with low single-digit revenue growth in the U.S., offset by biosimilar competition across international markets. where revenues were down 17.9% operationally. Skyrizzy global revenues were $940 million, reflecting positive momentum in both approved indications. In psoriasis, Skyrizzy is demonstrating impressive market share gains globally. Skyrizzy now accounts for approximately 23% of the total prescription share in the U.S. biologic market. Guy Rizzi's in-play psoriasis share, which includes both new and switching patients, also remains very, very strong and now reflects roughly 40% patient share in the U.S. and a clear number one leadership position. Guy Rizzi is performing exceptionally well internationally, where we have now achieved approximately 10% psoriasis share across our top 12 markets, as well as in-play share leadership in more than 20 key countries. While we were early in our launch in psoriatic arthritis, we are encouraged by the uptake in this indication. In the dermatology segment, Skyrizzy has already achieved in-play patient share of more than 10% in the U.S. Internationally, Skyrizzy PSA is now approved in 45 countries, with reimbursement expected to increase throughout the year. Importantly, we are also preparing for the launch of Skyrizzy in Crohn's disease, which represents another important long-term growth driver with approval decisions anticipated this year. Turning now to RINVOC, which delivered global sales of $465 million, demonstrating continued strong growth. As anticipated, we have seen an impact in new patient starts following the label update, and RINVOC prescriptions have now stabilized in the U.S., with in-play market share currently 12% in R.A. We expect growth in the second line plus RA setting going forward, where our field force is now focused on leveraging compelling data from two important phase three trials. First, SelectChoice, which demonstrated RINVOX superiority versus Orencia across key efficacy parameters, including clinical remission in previously treated RA patients. And second, the open label extension of SelectCompare, which demonstrated that many RA patients with an inadequate response to Humira are able to achieve remission after switching to Renvoke. Early feedback suggests this updated Renvoke RA messaging is resonating very well with healthcare practitioners. Internationally, Renvoke's share continues to ramp in RA, with a total market share of approximately 5.5% across key geographies. We are also making excellent progress with Renvoke's newly launched indication, including atopic dermatitis, psoriatic arthritis, and ulcerative colitis. Managed care access is expected to ramp strongly for each of these indications over the coming months. As we build access, initial prescriptions are covered by our bridge program, which provides free patients or free goods to patients until formulary coverage is established. As a reminder, the volume from our bridge program is not captured in third-party prescription data. I'll start with atopic dermatitis. We are seeing new patient starts accelerating as we build access. When you include prescriptions from our bridge program, RINVOQ's total in-play AD share is already in the mid-teen, so we are pleased with the early adoption and repeating prescribers. As an oral option that provides significant skin clearance and itch relief, we believe RENVOQ has a strong differentiated position in this highly under-penetrated AD market. In PSA, we are seeing a nice uptake in RENVOQ's in-play share, especially in the room segment, where the severity of joint or skin manifestations of the disease can vary significantly by patient. And importantly, we have also launched Skyrizzy in the room PSA segment this quarter, giving us two very compelling therapies to address the wide range of PSA patient types, regardless of how their symptoms present. We have also launched our first indication in the IBD segment, RINVOC for ulcerative colitis, where we are seeing a significant long-term opportunity in the second-line plus setting. Nearly 50% of UC patients are currently on or have used TNF therapy, so the addressable patient population is substantial. Given the strong benefit-risk in this indication, we believe RINVOQ will be a welcome therapeutic option for UC patients and physicians. Turning now to hematologic oncology, global revenues were more than $1.6 billion, down 0.6% on an operational basis. Imbruvica global revenues were approximately $1.2 billion, down 7.4%. There are two factors impacting our Imbruvica results. First, we are seeing greater market share erosion in new patient starts than originally anticipated from newer therapy, including other BTK inhibitors, as well as our own Venclexa. Second, we continue to see higher than expected COVID suppression on new patient starts in CLL, which, as a treat to progression therapy, has impacted the total BTK treated patient market. Our guidance assumes a market recovery over the course of this year, but it's too early to determine exactly how this may play out given the continued impact from recent COVID variants. Despite these dynamics, Imbruvica remains the market-leading therapy for total patients across DLL and several other major blood cancers. Based on the magnitude of clinical data and real-world evidence generated from Imbruvica showing sustained disease control as well as overall patient survival, we are confident it will continue to be a meaningful product for AbbVie over the long term. Venclexta, however, is helping to offset some of the headwinds facing Imbruvica. Global sales were $473 million, up 21.1% on an operational basis. In the US, Venclexta is the clear market share leader in frontline AML among patients who are ineligible for intensive induction chemotherapy and recently achieved leading new patient share in second-line plus ELL. We are also seeing robust momentum internationally with strong performance across all approved indications. Additionally, we continue to make excellent progress building out our heme-onc portfolio with several compelling late-stage assets, such as epicaridamab for B-cell malignancies, nevitaclax for myelofibrosis, and ADV383 for multiple myeloma, expected to support sustainable long-term growth. Turning now to neuroscience, where revenues were approximately $1.5 billion, up more than 20% on an operational basis, including robust double-digit growth from Raylar, Botox Therapeutic, and Ubrelvi. Ubrelvi is performing very well and continues to be the market-leading oral CGRP treatment for acute migraine, with sequential demand growth observed. Tulipta is also demonstrating exceptional uptake in migraine prevention, with recent total prescriptions performing ahead of comparable branded launches. QLIPTA is now capturing nearly 25% of the new-to-brand share in the US preventative DGRP class when we consider both paid and bridge volume. We expect commercial access to continue to ramp strongly over the remainder of the year. QLIPTA has also recently demonstrated positive results from a registration-enabling study for the preventative treatment of chronic migraine, which we plan to submit to the agency for potential expanded use in the U.S., as well as to support regulatory applications across the international market. This indication, if approved, will provide added differentiation for QLIPTA as the only oral CGRP therapy for the preventative treatment of both episodic and chronic migraine. In our other notable therapeutics, Eye care revenues of $771 million were down 2.8% on an operational basis, with recent generic competition for Restasis unfavorably impacting our results. Maverick sales were $380 million, down 4.6% on an operational basis, as treated patient volumes remain suppressed compared to pre-COVID levels. So overall, I'm extremely pleased with our execution across the therapeutic portfolio. including the progress we're making with recent new product launches. We remain on track to deliver strong revenue growth once again in 2022. And with that, I'll turn the call over to Tom for additional comments on our R&D program. Tom?

Thank you, Jeff. I'll start with immunology. We recently received FDA approval for INVOQ in ulcerative colitis, a disease where there continues to be a significant unmet need for therapies that can provide high response rates and durable remission. In our UC development program, RINVOC demonstrated some of the highest rates of remission and endoscopic improvement seen in Phase III studies. Importantly, RINVOC also provided durable responses sustained through one year of treatment. Given its strong benefit-risk profile, we believe RINVOC will be an important new medicine for patients. Our regulatory applications for RENVOLC in UC remain under review in Europe and Japan, with approval decisions expected in the second half of this year. Also, in the area of inflammatory bowel disease, we recently reported positive top-line results from the second Phase III induction study for RENVOLC in Crohn's disease. Similar to results from the first induction trial, in this induction study, RINVOC demonstrated a very strong impact on the disease as measured by clinical remission and endoscopic response. We expect to see results from the Phase III maintenance study later in the quarter with our regulatory submissions for RINVOC and Crohn's disease expected in the third quarter in approval decisions anticipated in 2023. Rounding out RINVOC's development programs in rheumatology, We also have regulatory applications under review in ankylosing spondylitis and non-radiographic axial spa. We expect an FDA approval decision in the second quarter for AS and decisions in the fourth quarter for non-radiographic axial spa. Moving to SkyRisi, where in the quarter we announced an update regarding our regulatory application for Crohn's disease in the US. Following an FDA request for additional information primarily related to the on-body injection device used for maintenance dosing, we provided additional data for the device from an ongoing real-life use study, which showed that patients can safely and effectively use the on-body device to self-administer Skyrizzy. After responding to the agency's request, we received a three-month extension of our Skyrizzy submission in Crohn's disease. We remain confident in a strong benefit-risk profile for Skyrizzy and Crohn's disease, and we now expect a decision in June. Moving now to our oncology portfolio, where we continue to make excellent progress across all stages of our heme and solid tumor pipeline. We recently announced positive topline results from the first expansion cohort of the Phase II study evaluating efcuritumab in patients with aggressive B-cell lymphoma who have received at least two prior lines of therapy. Efcuritumab performed extremely well as a monotherapy in these heavily pretreated and high-risk patients, demonstrating an overall response rate of 63%, with a median duration of response of 12 months. These results are particularly encouraging, given that nearly 40% of patients had failed CAR-T therapy. We plan to discuss these results with regulatory agencies about the potential to support submission for accelerated approval in the second half of this year. We continue to make good progress with the indication expansion programs for Venclexa and remain on track to see results from the Phase III Canova trial in relapsed refractory multiple myeloma patients with a T1114 mutation in the second half of this year. In our Van Clexta MDS program, based on feedback from the FDA, we have recently modified our regulatory strategy and our intent to submit data from our ongoing Phase III program. Van Clexta remains under breakthrough therapy designation for MDS, and we continue to have a high degree of enthusiasm for Van Clexta in this indication. We expect data readouts on the Phase III study and our regulatory submission for MDS in 2024. In neuroscience, the FDA recently accepted our application for RailR as an adjunctive treatment for major depressive disorder. Based on the strong benefit-risk profile demonstrated in our clinical program, we believe RailR will be an important new therapy in this patient population, and we look forward to bringing this new treatment option to patients suffering from major depressive disorder. In the area of migraine, we recently reported positive top-line results from a Phase III study evaluating QLIPTA for the prevention of chronic migraine. QLIPTA performed very well in this study, with both doses meeting the primary and all secondary endpoints, demonstrating QLIPTA's ability to significantly reduce migraine days for patients suffering from chronic migraine. This summer, we plan to submit our regulatory application to the FDA for QLIPTA in chronic migraine and also plan to submit data from our Phase III studies in both chronic migraine and episodic migraine to support regulatory applications in markets outside the U.S. In our Cystic Fibrosis Program, we recently completed an interim analysis of a Phase II proof-of-concept study evaluating our triple combination therapy. The efficacy results from this interim analysis did not meet our pre-specified criteria for advancing this triple therapy in development. The study was designed with a 28-day run-in treatment period with a dual combination therapy containing our C1 corrector and potentiator, followed by a 28-day treatment period with a triple combination which included the addition of our C2 corrector, ABBV119. This allowed us to independently assess the therapeutic potential of our C2 corrector. The results showed that the addition of 119 did not provide a meaningful improvement in FEV1 or reduction in sweat chloride concentration over our dual combination therapy. During the run-in treatment period, we were able to again assess the efficacy of our dual therapy, which performed well, providing efficacy consistent with results for the existing dual combination therapy. So based on the performance of our dual therapy, we plan to continue our CF program. We have an additional C2 corrector, ABBV576, in phase one studies that we plan to advance into a new triple therapy with our existing C1 corrector and potentiator. 576 is structurally distinct from our previous T2 corrector 119 and has a better PK profile and provides higher drug exposure, which has the potential to deliver better efficacy. Our plan is to begin a Phase II study for this new triple combo by early next year. And in aesthetics. We recently began the Phase III program for our short-acting toxin in glabellar lines. This novel toxin is designed to provide rapid onset of action and a short duration of effect, which would lower the barrier for adoption for certain segments of consumers. We expect to see data from this program next year, with regulatory applications also anticipated in 2023. So, in summary, We've continued to make significant progress with our pipeline to start the year, and we look forward to many more data readouts, regulatory submissions, and approvals throughout the remainder of 2022. With that, I'll turn the call over to Rob for additional comments on our first quarter performance and financial outlook. Rob?

Thank you, Tom. AVI's first quarter results demonstrate the strength of our broad portfolio. including double-digit growth from Sky RISI, Renvoke, Ben Klexta, neuroscience, and aesthetics. We also continue to deliver strong P&L performance with another quarter of robust operating margin expansion while fully funding the business for long-term growth. We reported adjusted earnings per share of $3.16, reflecting growth of 9.3% compared to prior year and 4 cents above our guidance midpoint. This includes an $0.08 unfavorable impact from acquired IPRD expense that was not factored into our original guidance. Total net revenues were more than $13.5 billion, up 5.4% on an operational basis, excluding a 1.3% unfavorable impact from foreign exchange. Net revenues came in above our guidance despite the entry of generic competition for risk basis. The adjusted operating margin ratio was 51.4% of sales, an improvement of 150 basis points versus the prior year. This includes adjusted gross margin of 84.5% of sales, adjusted R&D investment of 10.9% of sales, acquired IPR&D expense of 1.1% of sales, and adjusted SG&A expense of 21.1% of sales. That interest expense was $539 million, and the adjusted tax rate was 12.1%. Turning to our financial outlook, we are updating our full year adjusted earnings per share guidance to include the $0.08 for acquired IPRD expense that was incurred during the first quarter. As a result, we now expect full year adjusted earnings per share between $13.92 and $14.12. This earnings per share guidance does not include an estimate for acquired IPRD expense that may be incurred beyond the first quarter. We now expect net revenues of approximately $59.4 billion. At current rates, we expect foreign exchange to have a 1.4% unfavorable impact on full-year sales growth. This revenue guidance includes updated restates of sales of approximately $400 million. Moving to the P&L, we now expect adjusted gross margin of 84.5% of sales adjusted SG&A expense of $12.5 billion, and an adjusted operating margin ratio of 51.8% of sales. Turning to the second quarter, we anticipate net revenues of approximately $14.6 billion. At current rates, we expect foreign exchange to have a 1.5% unfavorable impact on sales growth. We expect adjusted earnings per share between $3.38 and $3.42. This guidance does not include acquired IPRD expense that may be incurred in the quarter. In closing, we are off to an excellent start to the year with strong performance across multiple areas. We are making significant progress with new product launches and the pipeline, underscoring our confidence in AVI's long-term growth outlook. With that, I'll turn the call back over to Liz.

Thanks, Rob. 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 one or two. Operator, we'll take the first question, please.

Thank you. Our first question comes from Mohit Bansal from Wells Fargo. Your line is open.

Great. Thanks for taking my question. Maybe to begin with, on Imruvica, so, I mean, the script trends are down, and you mentioned that for new starts, you are losing some share to the competition. Can you please characterize how much share you are losing, and do you think it will stabilize over time? And when you look at Imruvica and Venetoclast combined, do you think the franchise can grow going forward from here? Thank you.

Yeah, thank you for the question. So, as I mentioned in my comments, we are seeing greater share erosion. Imbruvica continues to be the leading share in the later lines, although we have lost our frontline share position to CalQuest. And obviously, Venclexta is also moving there. So, we see a couple things that are taking place. So, we have that share erosion that's putting some pressure on the brand, and then clearly we see the continued suppression of the market. So it's kind of like a double hit. If we think of this over the short, mid, and longer term, what I would say would be this. So in the short term, meaning this year, we projected the share decline, and that includes some stabilization, but we still think the brand is under some pressure from other BTKs and Ben Klexta. And basically, we have flat guidance this year. And some of that includes a recovery of the market back to sort of more normal levels. And we'll have to see how that progresses over the year. If I think more about the midterm, I think what's important context there is new patient starts essentially make up roughly 13% to 15% of Imbruvica. So it's got a very, very large installed base, about 85%, maybe a little bit more in terms of what that's going to happen. We're not seeing any changes in persistency or items like that, so we think that we have a very good sense of stability for the brand over time in terms of what this may mean. So that's basically how we think about it. To answer your other question, if you look at the combined share, AbbVie has quite a strong position. We have roughly 33% of total share in the front line. And we have between 42% and 46% of second-line plus. So clearly, Venclexta is able to offset, as I commented in my remarks, some of those pressures. So it's very important for AbbVie. It's going to be a very big brand over the long term. In the short term here and midterm, the growth is going to be more challenged moving forward.

Thank you.

Thanks, Mohit. Operator, next question, please. Thank you. Our next question comes from Terrance Flynn from Morgan Stanley. Your line is open.

Hi. Thanks for taking the questions. I was just wondering, obviously you guys have been speaking with payers about the Humira positioning for 2023. Are you willing to give us any update in terms of how you're thinking about that guidance figure that you put out a couple years ago? Any change in thinking there? Are you able to disclose the CR rate for the recent Epcaritumab Phase 2 trial? Just wondering how that factors into the decision about whether to seek accelerated approval here. Thank you.

Terrance, this is Rick. I'll take the first question for you. And I'm probably going to answer it a little broader because I think it is important. I understand the interest in trying to understand how to model 2023, it's obviously important to us to model 2023 as accurately as possible. And I think if you step back, obviously contracting is one portion of a variable that will impact the speed at which biosimilars are able to be adopted in the market. If you step back and look, there's probably four key variables that will impact what that adoption rate looks like. One of them is obviously what will Humira's access be post-biosimilars entering the marketplace? And this is the period where you would normally be doing the contracting around that. I think we'll do well in being able to be co-positioned versus biosimilars in the vast majority of covered lives here in the United States, but that process isn't done and we're not in a position to be able to ultimately give you any further update until we're a little further along in that process. The second variable that will impact what 2023 looks like is how will the biosimilars price? We don't know that. Obviously, we have seen how they price in markets outside the U.S., but there's no market exactly like the U.S. internationally. And so that's a variable. We're making some projections of what we believe that pricing will look like. But that's ultimately something we're going to have to see how it plays out. I'd say the third variable is how competitive will these biosimilars be? There's going to be, by the summer of 2023, there's going to be a lot of biosimilars in the U.S. market, but they're not all the same. And how competitive will they be against, you know, what is Humira today and what do the bulk of patients use as it relates to Humira? And what I mean by that is interchangeability and a number of other factors are going to play into the competitiveness of those biosimilars. And I'd say the fourth variable, and it's not something people think about that much, and that is the ability of a biosimilar to be able to supply the U.S. market. There's no market like the United States for Humira anywhere around the world. The United States is significantly larger than any other market around the world. There are certainly biosimilar players that are like an AbbVie, and I would expect them to have manufacturing capacity. There are generic players that could have sufficient manufacturing capacity. And then there are very small companies. But I think anybody, any payer that's going to want to convert in any significant way to a biosimilar, they're going to want confidence that they can have a reliability of supply of that biosimilar. And we've spent years building the network that we have. full redundancy of every aspect of the manufacturing process on Humira. And we've never had a problem supplying the U.S. market. So I think we can be viewed as kind of the gold standard. So those are the variables that are going to impact what this transition looks like. The guidance we've given so far is this 45% plus or minus 10%. I think at this point that's still the best information that we can provide. Later this year, I think some of these variables will be clearer to us, and we may be in a position to be able to provide some more information to investors, and we would do that. Some will not. Pricing will not be clear at that point. We're not going to know how they're going to price until they actually get into the marketplace. So I think that's the way to think about these variables. Rob, anything you'd add?

Yeah, so this is Rob. I would just add that we've been trying to give investors some directional guidance on how to think about 23 beyond just the Humira 45% plus or minus 10%. We've talked about aesthetics going high single digits annually over the next decade. You can get a sense based on Jeff's response today and a way to think about improve a cut. In terms of operating margin, I've talked about that pulling back to the 46% to 47% range with no cuts to investment because we're going to return to growth very quickly, so we're going to continue to invest in this business and As I look at street consensus, I see modeling of cuts in SG&A not necessarily reflecting the appropriate operating margin levels. It's something just to keep in mind. We've talked about the tax rate growing at one point per year on average. Obviously, you saw this year it only grew 0.2 points. Other years it may go higher. We've tried to give the street some ideas of the way to think about 23 model in advance of our formal guidance.

Okay. Number two, Neil.

Hi, this is Neil Gallagher. I'll take the question regarding escharitumab. So we recently reported data from the expansion cohort of relapsed refractory DLD-CL patients. We reported an overall response rate of 63% with a median duration of response of 12 months. One thing that's really important to bear in mind is that this is a pretty refractory patient population with a median number of prior therapies of 3.5 and a range up to 11 at the upper end. And importantly, just under 40% of these patients have failed prior therapy with the CAR-T. Overall, the safety profile remains manageable with the vast majority of cases of CRS, a class effect with these agents being grade 1 and 2. To directly address your question, we are not yet ready to reveal additional detail about the data. They will be revealed at a forthcoming medical meeting, and in fact, I was just in in contact with the team yesterday, and I know that they're working very diligently to get those data on a podium in a meeting in the very near future.

Okay. Thank you, Taryn. Operator, we'll take the next question, please.

Thank you. Our next question is from Tim Anderson from Wolf Research. Your line is open.

Hello. Thanks for taking our question. This is Alice Neffleton of the Tim Anderson. A question on RingVoke. Where could in-play market share in a topic term eventually get you in your view, and are you seeing any switching away from Dupitz and Titor? Thank you.

Yeah, thank you. Thank you for the question. I'll give you some context. I mentioned that we see roughly in the mid-teens now after about three months, which we're very pleased in, and some more flavor on that. If you think about the the HCPs and the doctors that prescribe in the U.S. now, you've got about 9,000. Those are the dermatologists and some allergists. There's about 3,000 of those physicians that are the big prescribers. They're very productive. Those 3,000 are the ones that are driving Skyrizzy, for example, or other big brands in psoriasis. So we see, you know, after just about three months, we see a almost 1,000 doctors that have prescribed RENVOC, and so that's driving that 15%. Some of it depends in terms of where the in-play share ends up, how many of the competitors come in. We're not really sure that baricitinib will come into the market. You know, we'll have to see. We haven't seen much Pfizer activity yet. To give you some sort of international perspective, in the Canadian market, we're seeing where there's really just DUPI and RENVOC at this point after couple of quarters, we're seeing a 30% in-place share in Canada. So we are, as I mentioned, very, very encouraged with the early adoption. In particular, my comment around how fast, once you see the first prescription take place with some of those productive doctors, how fast they go to the second or third. To give you some flavor of what we see in the U.S., and again, the date is early. We see, as expected, the majority of our use so far in that dynamic market are not switches necessarily. We see about, let's say, a third, believe it or not, that are not even exposed to DUPI. And the doctors are saying, look, I've already given another oral systemic, for example, but the itch and the skin is so severe that they're gonna go, I'm gonna go right and get the relief with RENVOC. And then maybe the other two-thirds you see dupy partial responders, particularly related to the itch just isn't suppressed as much and they still have some skin involvement, or there is, as we've highlighted before, a warehouse of dupy non-responders that has been built up over the last four years. So that's the behavior that we see. Again, I'm very encouraged on the early results, not just in the U.S., but around the world. RINVOC is gonna be a real player in this underserved market.

Thank you, Alice. Operator, next question, please.

Thank you. Our next question is from Steve Scala from Cowan. Your line is open.

Thank you. Two questions. First on epcaritumab, the data looks great. Could this molecule immediately start taking share from CAR-T, or do you think physicians will want to see durability data before selecting a bispecific ahead of a cell therapy? So that's the first question. The second question is I'm trying to sift through the answer to the Humira question just a moment ago. On the one hand, it seems we need to consider that Humira could be more resilient in 2023 than expected. On the other hand, the street needs to raise spending assumptions. So would you object to either of those conclusions based on what was stated? Thank you.

Thanks, Dave. This is Neil. I'll take the first question on etcaritumab. The fact that we saw such remarkable activity in a patient population that had failed CAR T does not imply that the medicine should be positioned after failure of CAR T. I think they're two very different classes of medicines, as you know. CAR T has significant challenges with respect to the need for prior to administration. Whereas the safety profile with abcurritumab is extremely manageable. And again, I don't want to repeat what I said earlier on around CRS. So overall, we see a very strong benefit-risk profile emerging for the medicine. And therefore, our intention is to move the medicine into earlier lines of therapy, initially gain an approval with respect to gain approval in relapsed refractory DL-VCL and after that move the medicine into earlier lines of therapy.

This is Rick. I think Rob and I will handle the second question for you. You know, look, I think it's a great question and we've gotten that question a lot. You know, what C rows are going to be in 23 and is it going to be lighter in 23 and therefore spill more into 24? And I think that's a reasonable question to answer. to start to think through. I'd say as I step back and look at it, I would tell you this. Look, at the end of the day, it could be lighter in 23. That would force more of it out into 24. If I look at the business, that's a good thing. It would give us higher cash flows in 23 than what we would be projecting now. Ultimately, I think there will be a settling out between 23 and 24 where it will still get to the levels that we have expected we have described, or at least that we're modeling. And I think the important thing is, look, Qmera's gonna play out over these two-year period of time. What's important to AbbVie, though, is what's that underlying growth that's driving the business and is going to sustain the growth on the other side of the LOE? That's the critical aspect of it. The SkyRizzies, the Renvokes, our neuroscience pipeline, aesthetics, It's all of those major growth drivers that we have because that growth is going to be suppressed in 23 and somewhat maybe in 24. But as soon as that pressure is off, that's when it will reemerge and be able to deliver growth on the other side of it. And so what we're focused on is obviously we're going to try to manage the 23, 24 dynamic to the extent that we're able to, but that's not the most critical part for the business. The most critical part is driving these growth brands and delivering on the pipeline.

This is Rob. What I would add, Steve, just to clarify, I mean, we have a business that's going to deliver high single-digit growth starting in 2025. It doesn't make sense to be cutting investment in 2023, and that's what the Street Consensus is modeling currently. So we expect to invest in this business, invest in R&D, invest in SG&A to drive that long-term growth. And given how quickly we'll return to that growth, I wouldn't expect us to be cutting investment in 2023. Thank you.

Thanks, Steve. Operator, next question, please.

Thank you. Our next question comes from Andrew Baum from Citi. Your line is open.

Thank you. Question for Jeff. Perhaps you could comment on the impact of IL-31 inhibitors in atopic dermatitis where we're expecting additional phase data, which obviously don't have the JAK labeling associated with it, how you think it's going to impact the market in terms of delaying the onset of JAK therapy. And then second for Neil, Could you talk to how large you see the commercial potential in T11-14 myeloma, which is due to reported phase three this year? Anything.

Yeah, thank you, Andrew. So important question. So the way that we see the market for the other ILs, I do think that there will be a segment of conservative dermatologists that will attempt to sequence. And I think that largely that they'll be disappointed. because it seems the newer agents are very, very difficult to distinguish from Dupixent. I think certainly there could be market access dynamics that start to appear with subsequent ILs. I think that's something that we will watch and you would want to watch. I think what's, again, maybe not appreciated as we watch the early quarters of performance in Europe and the first quarter of performance here in the U.S., is that there's significant amount of early adopters and dermatologists that will go right to a JAK inhibitor. As I mentioned, they're not always sequencing through DUPI. And it's because the severity of some of these patients and the level of the clinical involvement is very, very significant. And so we do see what you would call a significant amount of naive use based on the profile of the JAK inhibitor. Now, these are early adopters. These are people that have already contemplated the risk-benefit, and I think that's important. And so the way that we see the market developing is that when physicians would start with DUPI, which will be in a significant proportion to patients, it's not clear at all that their next step will be another IL that has been approved or will be approved. In fact, we think it's more likely that they will move towards the best JAK that can get to these high levels of skin clearance, you know, the easy 90 plus almost no perceived itch. And I think that's the endpoint that this market's going to move towards, and RENVOC is the drug that clearly can deliver on that promise. And so that's how we see the market developing, and that's why we remain encouraged on the early results around the world from what we're seeing with the agents.

This is Neil with respect to the question on venetoclax canova. So the canova study is a study of venetoclax in multiple myeloma patients with a particular translocation C1114. We're making extremely good progress with the study and we fully anticipate having a phase three data from the study during the course of 2022. We know from this particular patient population that were included in earlier studies with Symplexa that they are explicitly sensitive to treatment with the medicine in various combinations. The prevalence of this population is around 20% of multiple myeloma, and multiple myeloma, as you know, is the commonest tumorologic malignancy. So this is a very significant proportion of the multiple myeloma population. population that could gain benefit from Van Clexta. As mentioned, we're looking forward to being able to communicate with these three data during the course of 2022. Thanks for the question.

Thank you. Andrew, operator, next question please.

Thank you. Our next question comes from Chris Schott from JP Morgan. Your line is open.

Great. Thanks very much for the questions. First one for me is just, can you elaborate a bit more on RINVOC coverage, both in AD and UC? I guess trying to get a sense of where we are today and what's the outlook for the next few quarters. And maybe as part of that, it seems like you're seeing some nice uptake in your bridge programs. Can you just comment when you expect we should start to think about those translating over to third-party RXs and that will be maybe more visible to the outside world in terms of how, you know, that uptake you're seeing? And then my second question was just on Q1 itself. Were there any notable either payer adjustments or growth to net issues? I guess Humira, for example, it seems like the low single-digit growth was a departure from recent trends. I'm trying to understand a little bit better what happened in the quarters and anything we should just be kind of keeping in mind as we consider the Q1 results. Thanks.

Yeah, thank you, Chris. It's Jeff. So with your first question is, We're very confident that we are going to get to high levels of paid access for RINVOC and Sky RISD's new indications. So typically what we'll see based on the approval timeline, we'll be ramping up by the middle of the year up into the high 90s in terms of our access for commercial access. So I think that everyone should be confident that that's where you're going to start to see this bridge program start to fully convert as the months go by into the paid prescription. So typically that's the timing we're looking at. You're going to see very strong momentum on paid access by towards the end of next quarter is what we've guided towards. So that's the answer to your first question. I think if you think about, and maybe just to frame the Humira question, the Humira fundamentals are and the market fundamentals are quite strong. You see the markets are performing nicely. Our market share growth trends, we haven't seen any trend shift. They've been largely stable. There's some sequential decline based on the size of the market, and actually our own brands, Skyrizzy and Renvoke, that are playing very strongly into these markets. What I would say is that in some cases, Q1 can be quite unique over the years. You've got the issue with the plans resetting their deductibles. You've got issues with doctors that have to put in another prior authorization for the year. And so you do see some copay and sort of deductible dynamic. But we think that's really a first quarter type of event, and it's largely been very consistent with what we expected. So maybe, I don't know, Rob, if you want to build on that a little bit.

Yes, I would just add that if you look back to our guidance for the quarter, and we gave guidance at a therapeutic area level, we pretty much came in line with that guidance. And so we expected this dynamic, and we're also, you know, we're not changing our full year outlook for U.S. American 8% growth. And that, again, will be driven by, you know, market driving volume growth. And so it's in line with our expectations. I understand street consensus had a different point of view, but we weren't surprised by that.

Thanks, Chris. Operator, next question, please.

Thank you. Our next question comes from Chris Shibutani from Goldman Sachs. Your line is open.

Thank you. Good morning. If I could ask on Braylar, the product, I think you comment expectations for a MDD approval, and yet still frame it as potential for upside. Can you help us understand perhaps some of the potential there? Just thinking back to some of the scale of the peak sales opportunity that that drug was characterized previously, MDD certainly seems as if it's a potential significant opportunity. Thanks.

Yeah, thank you for the question. And it is a significant opportunity. So as we highlighted and Tom highlighted, you know, the NDA has been accepted and we're confident in the approval. I think what we said in the past is that just with the base indication, so before we get that approval, I mean, the FDA has to still approve it towards the end of the year. we believe that we can ramp towards, you know, a $4 billion opportunity. So that would mean our share, just in the base indications of a unique profile with the mania, the mixed mania and depression, the bipolar depression, you know, we'd move somewhere up, you know, sort of doubling our share penetration. So, you know, right now we're at about 2.7% TRX share, so we'd really get close to doubling that based on the momentum. And then MDD would build on top of that. And so it's significant. I mean, the physicians that we've talked to when we show them the profile are very pleased. First, they know Vrelar, they like Vrelar. They like the strong efficacy. They highlight non-sedating. They highlight at least verbally a brightening effect of the agent, minimal weight gain, metabolic effects. And so as they think about that, how that would translate to adjunctive MDD, they like that profile. The other piece that we hear is they like the starting dose. They like that starting dose of the 1.5 milligram dose, which is what we believe that ultimately will be approved. We'll have to see. So easy to start, easy to take, well tolerated. And so to your point, we believe that MDD will offer some upside and acceleration to the brand's momentum when we achieve it.

Thanks, Chris. Operator, next question, please.

Thank you. Our next question comes from Vamo Devon from Mizuho Securities. Your line is open.

Hi, great. Thanks for taking my question. So, this may get back to some of what we were just talking about around the pricing in 1Q, but I had a couple of questions regarding the migraine franchise. So, the UBRLV scripts from what we can see publicly on third-party data, it looks like the gross to net pricing is back to where we were in 1Q21. I'm just trying to understand if this is, you know, is this a seasonality of things or a 4Q to 1Q dynamic, or maybe there might be something broader, you know, where net pricing for these products is going down. And then tied to that, which you looked at, as you mentioned, looked at the prescription, numbers look pretty good as it builds up here. I'm curious, now that you have sort of two products in this market, does that impact how you're thinking about the opportunity, especially from a pricing side or sort of payer negotiation side? Any thoughts on sort of bundling the two together in any way to get even better access than what you have right now. So any thoughts you could share there would be helpful as well.

Thank you. This is Rob. I'll take your first question. So when you look at, you know, there is seasonality in this market in the U.S. And so you do see a shift from Q4 to Q1. If you look at year over year, you'd see that in Q4, as you mentioned, Q1 year over year is relatively flat. I would think about it that way for the full year as well. So you do tend to see suppression in Q1 because of plans resetting that dynamic we see in the U.S. market. But then over the course of the rest of the year, you do see higher pricing. So on average, the way to think about it is price is relatively stable.

And Vamil, it's Jeff now. So I think, look, we are pleased with the Ubrelvi momentum. I mean, actually, since we launched QLipta, Ubrelvi has accelerated. So if we have to, because we can't see the competitor because you can see the whole thing, but when we factor NERTEC by, you know, 8 versus 16, and we try to understand the acute dynamics, we can see that we're clearly the market-leading acute CGRP, and that's nice to see. The physicians really like you, Brelvi. The markets are robust. I think what you're seeing is what Rob highlighted in terms of the overall performance. I didn't really fully appreciate your second question in terms of the access. I can give you a broad overview. Obviously, we're seeing great momentum with the brand, much of the brand is still, because the access is ramping, is still rich, just like we discussed there with the immunology agent. So we think, again, by the middle of the year, we're going to see commercial access really start to ramp, and you'll see the conversions start to take place. What's nice is that we're confident in that. We think that our price points and net price or negotiations are going well. And because of its unique profile, as an agent. Basically, the strength of the drug is really significant in terms of its performance against episodic migraine. We feel like we're in good shape, and we're going to build on top of that basically 25% in-play share, which is right now at the top of the league table. So that's how we see it. We're confident in the access ramp.

Maybe just to clarify the second question, then just thank you for all that. Is there any advantages that other strategies might have now because you have two approved migraine oral therapies, or is it pretty much similar to what it would be if you had one or the other?

Yeah, it's pretty similar based on the way that the pricing and the different dynamics work on the other CGRP. It's just sort of a straight play on the access there. Okay, thank you so much.

Thank you, Vamo. Thanks, Vamo. Operator, next question, please.

thank you our next question comes from jeff meacham from bank of america your line is open hey guys uh morning uh thanks for the question i just had another one on the i i landscape you know rick when you look at the market disruption that you'll see in in 23 and 24 you know presumably that's going to have an indirect effect on on skyrizzy and renvoke you know when you think pricing and share what would you guys view as a as a win know over this period from a new start or switch perspective or a growth perspective is the first question and the the second part of it is you know what gives you guys confidence in the market really normalizing after a 2024 period thank you i think as we look at our long-range plan we don't see or anticipate a dramatic impact we've provided that 2025 guidance

And I think it's reflective of significant growth of Skyrizia and RINVO. You know, if you look at those assets and you look at their clinical performance, you know, they really stand out. And that's what's driving the kind of volume and growth that we're seeing. And I think you will see obvious price disruption in the Humero market from biosimilars, but I don't anticipate that you're going to see that bleed over in a significant way to those other assets. Jeff, do you see anything differently?

Yeah, I don't see, Jeff, much difference. I mean, if you think of it in some ways, even on, let's take Renbook, for example. I mean, you could say, wow, you know, in prior viewpoints, maybe everyone will step behind a... you know, a biosimilar at some point in the future. Well, one, we didn't think that that would happen wide scale as the market develops anyway, but even if it did, our label is already behind a TNF. And so when you look at the level of efficacy that Renvoke's bringing in those later lines, I mean, it's really quite insulated from that, I would put forth. And second, SkyRizzy is just a phenomenal asset. I mean, the level of performance and what it's doing to transform certainly psoriasis today, PSA right now, and what we think will happen with Crohn's and ultimately IBD when you look at the level of healing and sort of restating that standard of care, we think the assets themselves are quite well positioned for the middle part of the decade, and that sort of goes to the elements of the planning that Rick talked about.

Thanks, Jeff. Operator? Next question, please.

Thank you. Our next question comes from Gary Nachman from BMO Capital Markets. Your line is open.

Hi, thanks. First, just following on that last response, just, you know, can you talk more broadly about how you see the expansion of RINVOC and Skyrizzy into the IBD indication? So how is the initial launch for RINVOC and ulcerative colitis going? I know it's early days, but, you know, what's the outlook there given physician receptivity around the product? Are physicians saying they're excited to have RINVOQ for Crohn's as well? And also, how do you see Skyrizzy fitting in with Crohn's versus RINVOQ? And then secondly, on aesthetics, it was strong in the first quarter, but did you see any impact in the early part of 1Q from Omicron? And what have the trends been more recently in March and April in the aesthetics business?

Yeah, thank you for the question. It's Jeff again. So, you know, we are very, very encouraged by the IBD momentum that we can build, and we're right on the cusp of it. And to give some sense, it's basically this market, the market of Crohn's and UC, it actually has fairly high biologic penetration. When we do our research and our engagement with the physicians, What they typically have done for more than a decade since the availability of, you know, Remicade and then Humira, they really hang on as much as possible to their first-line use. They try to intensify. They do all sorts of things because it's quite scary for the physicians and the patients because no one set a different standard of care. So when you start to look at the healing rates that we start to see with RENVOC and UC, the healing of the bowel, the remission rate, the combination of what we can see, This market looks very, very good to have both of those assets come in with higher standards of care. So we're very, very encouraged, and we think that the IBD market is probably underappreciated in terms of what that looks like. And the patients are so challenged with their disease because it's quite severe with the bowel preparations, the hospitalizations, all of these things. Having two assets is a great thing to bring to the market. Certainly in the U.S., it's likely, we see that with UC today, that you're going to have later line use based on the labeling. SkyRizzy is not going to have that limitation. So you can imagine that you have an ability to co-position, to sequence appropriately, to think about how you bring that whole portfolio around the world, and that's how we see it. We're quite encouraged that we would have both Renvoke for Crohn's and Renvoke for SkyRizzy in the markets. And it's kind of very similar to my comments I made on what's happening with PSA today in rheumatology, where both of those assets, Renvoke for PSA and Cyrizi PSA, are in the market together working as a portfolio. To get to your first point, it's been only a month or so with our UC launch, but the physicians, gastros, are very encouraged with the profile. They've not seen the level of remission or the level of healing before in any asset. So there's quite a wow reaction to the efficacy profile. They realize that they have to think about, I've gotta think through my patients that are not doing well on TNF or have cycled through a TNF and are struggling. And I mentioned that's a pretty large addressable population. It's at least 50% of the market today. So early qualitative results are quite strong. and the bridge results are also quite strong. So we're pleased with the gastro launches thus far.

Hi, Gary. This is Carrie Strom, president of Global Allergan Aesthetics, and I'll take your question about the aesthetics market. And in Q1, we did see U.S. toxin filler markets both growing in the mid-20s percent, and we expect that sort of growth to continue for the rest of 2022. And the way to think about it, is similar amount of absolute volume growth as 21, but, of course, off of a larger base. And in terms of what's driving that market growth, we're seeing very strong demand trends supported by our increased commercial investments, for example, increased consumer activation for acquisition and retention, field force expansions in key markets, And we see these trends also supported just by fundamentals in aesthetics that will continue in the long term. People think about aesthetics more like health and wellness. It's been much more de-stigmatized and we see factors like social media and word of mouth continuing to drive aesthetics in the future. Your question around the pandemic, I would say that we are seeing an impact right now in China, and we anticipate that this recent surge of COVID cases in China, which has resulted in lockdowns across several major cities, has reduced patient traffic into aesthetic offices in China. And China is a top market for aesthetics. So we expect this to impact our near-term international performance for both toxins and fillers. I should also mention that Russia is a key market for fillers globally, and as the tragic events in the Ukraine have unfolded, we have suspended operations for our aesthetics business in Russia. So although absolute aesthetics sales in Russia are modest, like I said, Russia is among one of the largest filler markets in the world, so we expect to see an impact on our filler performance in coming quarters. But despite these dynamics, we do not need to change our total guidance for aesthetics. We see our continued robust toxin performance in the U.S. to offset this anticipated transitory impact in both China and Russia.

Thanks, Gary. Operator, next question, please.

Thank you. Our next question comes from Robin Karnoskas from Truist Securities. Your line is open. Great. Thanks for taking my question.

So for epcaritumab, I just have a question on accelerated approval. Given the recent FDA discussion around the PI3 kinase class and sort of hinting that they want controlled data for accelerated approval, how do you view that in light of that panel, the likelihood of accelerated approval? And then second, Just a little bit more questions around the bridge program. You think you said that you're going to expect more payment reimbursement coming online in the middle of the year. Talk to me how long people stay in the bridge program and how you expect that bridge program to continue and how many people might continue to use it after payers come online. Thanks.

Hey, Robin. It's Neil. I'll start off with the question around FGRIMA, but maybe just A general comment on accelerated approval overall, I think as we're all aware, it prompted your question that the agency is in the course of, in the process of updating its guidance with respect to accelerated approval. We haven't seen the totality of that guidance, but we anticipate hearing more from them during the course of 2022. As I alluded to, and I'm not going to repeat what I said earlier on about the EFCO data, but we are extremely pleased with how the molecule is performing, and it is our intent to engage with the agency based on the data that we've top-lined recently. It is our intent to engage with the agency in a conversation to explore a path to accelerated approval. And likewise with some of our other programs, we recently got a B2D designation for Talisa V, for example, earlier this year with a 54%. response rate in CMAT high non-small cell lung cancer, again, it is our intent when we have data that are this strong to continue to engage with the agency on those programs to explore potential paths to acceleration approval. So thanks for the question.

Okay, hi, it's Jeff. Just the comment on your bridge question. Thank you for that. So the bridge transition will be very efficient. So what I mean by that is because of the connections that we have with the payers and our specialty pharmacy network, we're able to, once access is achieved, rapidly and appropriately transition patients from the bridge to basically their paid pharmacy and their prescription. So there's not going to be lingering bridge effects, particularly in the immunology space. So once it starts to move and that access ramps, the bridge transition is quite fast, and that can be within weeks or a month. And we know that that's the case because we have the models from our earlier launches from Skyrizzy and RINVOQ. So ultimately, once you start to achieve those high levels of access, bridge programs drop very, very fast, and the vast majority, the very vast majority, is paid prescription. So it's very efficient, and I hope that helps.

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

Thank you. Our final question comes from Josh Shimmer from Evercore ISI. Your line is open.

Great. Thanks for fitting me in, and congrats to both Mike and Tom. For SCAR receipt, did your long-term outlook improve again, or am I misunderstanding the contingent consideration line item? Thanks so much.

So, Josh, it's Rob. So, if you look at the continued consideration, actually, it's a fair value liability. It went down this quarter because of discount rates. So, we always have to pay attention to discount rate movement. So, we saw the average discount rate increase by about 130 basis points. You're seeing, obviously, as rising interest rates are taking hold of the market. That's something we have to take into account because we have to mark this to market every quarter. If you look at our release, we had a decrease last year as well. Again, we had discount rates increase in Q1 of last year, albeit to a lesser extent. So that's what you're seeing is just really the discount rate movement, no other real fundamental changes to the valuation of that liability. Got it. Thanks for clarifying.

Well, thank you, Josh. That concludes today's conference call. If you'd like to listen to a replay of the call, please visit our website at investors.appy.com. Thanks again for joining us.

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