Visa Inc.

Good morning and thank you for standing by. Welcome to the AbbVie Fourth Quarter 2018 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. And I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations. Good morning and thanks for joining us. Also on the call with me today are Rick Gonzalez, Chairman of the Board and Chief Executive Officer, Michael Severino, Vice Chairman and President, Bill Chase, Executive Vice President of Finance and Administration, and Rob Michael, Senior Vice President and Chief Financial Officer. Before we get started, I would like to remind you that some statements we make today are or 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 the factors that may affect AbbVie's operations is included in our 2017 annual report on Form 10-K and in our other SEC filings. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent interventions, except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand AbbVie's ongoing business performance. These non-GAAP financial measures are reconciled. with comparable gap financial measures in our earnings release and regulatory filings from today, which can be found on our website. Following our prepared marks, 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. This morning, I'll discuss our fourth quarter and full year 2018 performance, as well as our expectations for 2019. Mike will then provide an update on recent advancements across the R&D pipeline and and Bill will discuss the quarter and our 2019 guidance in more detail. Following our remarks, we'll take your questions. We delivered another impressive year, with results well above initial expectations. Adjusted earnings per share in the fourth quarter were $1.90, representing growth of more than 28% versus last year, and once again achieving our guidance for the quarter. Total adjusted operational sales growth of 8.3% exceeded our guidance for the quarter. This growth was driven by a number of products, including our hematological oncology portfolio with global operational sales growth of more than 50% and US Humira, which grew more than 9% versus last year. Our international Humira sales were down nearly 15%, reflecting the impact of direct biosimilar competition in Europe, and other international markets. We also saw a continued strong performance from several other products including Maverick, Creon, and Duodopa. AbbVie has demonstrated an exceptional track record of consistently delivering top-tier financial performance despite any market or competitive challenges, and 2018 was another clear example of that performance. We continue to drive strong commercial and operational execution, resulting in full-year 2018 global operational sales growth of more than 15% and adjusted earnings per share growth of more than 41%. As we look at the evolution of our business and of our strategy, we're pleased with the progress that we're making. AbbVie Strategy has contemplated biosimilar competition since day one of the launch of this company. Our focus has been on building a pipeline that would allow us to absorb the impact of biosimilar competition and maintain a strong and growing business. Although our work is never done, we have made tremendous progress building what we believe is one of the industry's most attractive pipelines. In hematological oncology, we have built a powerhouse franchise with Imbruvica and Benclexta. Today, this franchise is roughly $4 billion, with more than a billion dollars of growth expected in 2019 and significant growth anticipated over our long-range plan. In immunology, Humira in the U.S. will continue to generate strong revenue, driving roughly a billion dollars of growth in 2019. Since we became an independent company, our research and development efforts in immunology have focused on identifying and advancing new assets that could deliver efficacy superior to Humira and other new agents. Given the importance of this growth platform, we understood that in order to maintain and expand our leadership position, the development of highly differentiated assets was absolutely critical. We are now confident that with Rizokizumab and Upatacitinib, we have accomplished our objective. Both of our next-generation immunology therapies have demonstrated across multiple clinical trials superiority versus Humira and other competitive offerings. This efficacy was shown across a broad spectrum of patients, including bio-naive patients at one end of the treatment paradigm, and very difficult to treat patients who would fail one or more therapies at the other end of the spectrum. In our hands, these assets have the ability to become the new standards of care in immunology. We expect to launch both rizokizumab and ipatacitinib in 2019, and based on their profiles, anticipate broad formulary access. Beyond our new therapies in hemon and immunology, we've also developed other assets that represent attractive multi-billion dollar revenue opportunities, such as Maverick and Oralisa. And we have a base business that includes therapies like Creon, Duodopa, Synthroid, and Lupron. All products we expect will remain durable for many years to come. The event that has, for many years, concerned investors most has been the loss of exclusivity for Humira. Certainly the most frequently asked question that we get is what impact will biosimilars have on AbbVie's business? We have long been planning and preparing for the event that is now upon us. We are now facing direct biosimilar competition in Europe and other countries which represent approximately 75% of our international Humira business or approximately 25% of total global Humira revenues. As we described on our third quarter call, biosimilar competitors have been more aggressive with Humira than previous anti-TNF biosimilar analogs. But despite the more aggressive discounting, our strategy is working as we had intended. 2019 is a year that should clearly demonstrate to all investors that AbbVie is once again delivering on its commitments. In 2019, we will absorb roughly $2 billion of erosion related to biosimilar competition and roughly $400 million of additional impact following the entry of generic competition for Androgel 1.62. We're also facing an extremely difficult comparison period due to the outstanding growth we drove in 2018. And in 2019, we'll also be funding five major product or indication launches. Yet despite all of these challenges, AbbVie expects to deliver positive revenue growth and double-digit EPS growth this year. This level of performance demonstrates that the strategy we have in place is working as we planned. and it should re-insure all investors of our ability to absorb the impact of direct biosimilar competition while maintaining a strong, growing, and vibrant business. Further to that point, our ability to deliver industry-leading EPS growth in 2019, despite the challenges I just outlined, is particularly notable given that this year many of our key pipeline assets will be at the very early stages of their launch trajectory and therefore providing minimal offset to the biosimilar impact. Given their product profiles, we expect these pipeline assets will grow substantially over the next several years and provide significant offset to the 2023 U.S. biosimilar event. So as I said, we're pleased with the progress with our strategy, and investors should view 2019 as a real test of that strategy. In summary, this is an important time for AbbVie. The continued momentum of our U.S. business and our hematological oncology franchise, combined with the launch and ramp of several new products, will allow us to grow through biosimilar impact in 2019, just as we had predicted. We've demonstrated a strong track record of managing and overcoming challenges, and our expected performance in 2019 is another clear example of that. And while we're certainly proud of what we've accomplished in the first six years as an independent company, I can tell you we remain focused and committed to delivering on our long-term vision for the company, sustained top-tier performance. With that, I'll turn the call over to Mike for additional comments on our R&D programs. Mike? Thank you.

2018 was a very productive year with significant pipeline advancement, including numerous development and regulatory achievements and successful data readouts across our pipeline. We secured regulatory approvals for several programs, including Benclexta in the broad relapsed refractory CLL population and conditional approval for Benclexta in newly diagnosed AML patients ineligible for intensive chemotherapy. approval for Imbruvica in combination with Rituxan as the first chemotherapy-free combination treatment for Waldenstrom's, the ninth FDA approval for Imbruvica overall, and for Oralisa for the management of moderate to severe pain associated with endometriosis. We completed registrational studies and submitted regulatory applications for our two next-generation immunology therapies, risin-kizumab in its initial indication, psoriasis, and upatacitinib in its first indication, rheumatoid arthritis. Across each of the four phase three studies in the pivotal program for psoriasis, risin-kizumab showed consistent, high, durable rates of skin clearance. Based on these results, we believe Risin-Kizimab has the potential to significantly improve upon current treatment options for both bio-naive and TNF-inadequate responder patients with moderate to severe psoriasis, while offering the convenience of quarterly dosing. Our regulatory reviews are well underway, with approval decisions expected in the second quarter. With Upatacitinib, our goal is to deliver a differentiated treatment to RA patients, We designed a broad and comprehensive set of six pivotal studies in RA, enrolling nearly 5,000 patients across multiple populations, including two studies with biologic comparators. We evaluated epatocitinib head-to-head against the standards of care in RA, including methotrexate and Humira, and in a broad range of patient types within the moderate to severe RA segment. This includes monotherapy treatment in patients who are naive to methotrexate, as well as studies in very difficult-to-treat patients who have failed one or more biologic therapies. Across the select clinical program, both doses of upatacitinib performed extremely well and demonstrated a strong benefit-risk profile. Based on our analysis of the data generated across the registrational program, We believe the 15 milligram dose represents the best dose for the RA indication as it delivered maximal efficacy across a wide range of studies, drove strong results on important structural endpoints, and demonstrated superiority to Chimera in our head-to-head study. Thus, this dose provides the differentiation we were seeking when we designed our program. Our regulatory submissions are currently under review and we expect approval decisions in the second half of this year. In addition to the successful trial readouts for upatacitinib and risankizumab, we also reported positive data from several phase three studies in other areas of our pipeline, including Elagolix in uterine fibroids, then Klexta in frontline CLL, and data from several important phase three studies in our frontline CLL program for Imbruvica, including results from the ECOG, Alliance, and Illuminate trials. Data from these three studies show treatment with Imbruvica alone or in combination significantly prolonged progression-free survival compared to therapies such as FCR, BR, and Giziva plus Clorambucil in previously untreated CLL patients. We also initiated several Phase III programs, including studies for epatocitinib in atopic dermatitis and ulcerative colitis. In addition to the progress we made across our late-stage programs, we also advanced a number of early-stage assets into mid-stage development, including our JAK-BTK program in RA and our CD40 program in ulcerative colitis. And we transitioned several preclinical programs into human trials, including our novel TNF steroid conjugate and our ROR gamma T programs. Clearly, we made tremendous progress advancing our pipeline in 2018. and we look forward to many important pipeline milestones in 2019 as well. In hematologic oncology, we'll see data from several Phase III studies for Venclexa this year, including results from the Bellini trial in relapsed refractory multiple myeloma and from our two frontline AML studies, as well as the detailed data from CLL14, our Phase III study for Venclexa in frontline CLL. These data and subsequent label augmentations will build upon the body of evidence demonstrating vanclexus potential as a foundational treatment option across a number of hematologic malignancies. Earlier this month, the vanclexus CLL14 data were selected for FDA's real-time oncology review program. This program is aimed at expediting the review and approval process for supplemental drug applications. Results from CLL14 have already been shared with the FDA, which was part of the agency's evaluation process leading to the decision to offer the real-time review. Very soon, we will begin submitting data as part of the review process and expect an approval decision later this year. We look forward to bringing this new treatment to market in the frontline CLL population. In the area of solid tumors, we'll see data this year from our Phase III study for DeptoxM in newly diagnosed glioblastoma multiforme. This is an extremely difficult-to-treat form of brain cancer with a very high unmet need and limited treatment options. We've seen encouraging trends in overall survival in our Phase II study in second-line GBM and look forward to the results of our frontline Phase III study to define the future regulatory path for the program. We also expect several assets from our early stage solid tumor programs to transition to proof of concept studies this year. And we'll share data from these programs as they mature. In the area of immunology, as I previously mentioned, we expect regulatory decisions later this year for upatacitinib and RA and ricin-kizumab and psoriasis. In addition to their lead indications, we continue to make great progress with upatacitinib and risankizumab in a number of other immune-mediated conditions. This year, we'll report mid-stage data for upatacitinib and axial SPA, and we plan to begin phase three development in giant cell arteritis. Overall, this year we'll have 10 active, ongoing registration-enabling programs for upatacitinib and risankizumab. We're also making good progress with our early stage immunology pipeline, which includes programs aimed at redefining the standard of care in autoimmune diseases. We have several promising assets, including ABBV323, our CD40 antagonist, ABBV3373, our TNF steroid conjugate, and ABBV599, our combination JAK-BTK inhibitor. And in the area of women's health, following completion of the pivotal trials for elegolics and uterine fibroids, we plan to submit our regulatory application around the middle of the year. So, in summary, in 2018, we made tremendous progress advancing our pipeline, achieving a number of key clinical and regulatory milestones across all of our therapeutic areas. And we expect 2019 to be another very productive year for our R&D organization. We look forward to updating you on our pipeline progress throughout the year. With that, I'll turn the call over to Bill for additional comments on our 2018 performance and our 2019 guidance. Bill?