ABBV 10-K & 10-Q changes, risk factors and insider trading

A significant portion of AbbVie's revenues and operating earnings are derived from severaltwo major products. Specifically, Skyrizi, HumiraSkyrizi and Rinvoq each represented greater than 10% of AbbVie's total net revenues and, in aggregate, these products accounted for approximately 47%42% of total net revenues in 2024. Humira has faced competition from biosimilar products in the United States following the loss of exclusivity in 2023. AbbVie anticipates such loss will continue to cause a significant decline in Humira's revenue and could adversely affect AbbVie’s revenues and operating earnings.2025.

To remain competitive, AbbVie must continue to launch new products and new indications and/or brand extensions for existing products. Such launches must generate revenue sufficient both to cover its substantial research and development costs and to replace revenues of profitable products that are lost to or displaced by competing products or therapies. Failure to do so would have a material adverse effect on AbbVie's revenue and profitability. Accordingly, AbbVie commits substantial effort, funds and other resources to research and development and must make ongoing substantial expenditures without any assurance that its efforts will be commercially successful. A high rate of failure in the biopharmaceutical industry is inherent in the research and development of new products, and failure can occur at any point in the research and development process, including after significant resources have been invested. Products that appear promising in development may fail to reach the market for numerous reasons, includingincluding, but not limited to, failure to demonstrate effectiveness, safety concerns, superior safety or efficacy of competing therapies, failure to achieve positive clinical or pre-clinical outcomes beyond the current standards of care, inability to obtain necessary regulatory approvals or delays in the approval of new products and new indications, limited scope of approved uses, excessive costs to manufacture or the failure to obtain or maintain intellectual property rights, or infringement of the intellectual property rights of others.

AbbVie is subject to increasing public and legislative pressure with respect to pharmaceutical pricing. In the United States, practices of managed care groups,organizations, and institutional and governmental purchasers, as well as federal laws and regulations related to Medicare and Medicaid, contribute to pricing pressures. In particular, the IRA will have the effect of reducing prices and reimbursements for certain of our products, which could significantly impact AbbVie’s results of operations. Under the IRA, the U.S Department of Health and Human ServicesHHS can effectively set prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D. Generally, these government prices can apply as soon as nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval and will be capped at a statutory ceiling price that is likely to represent a significant discount from average prices to wholesalers and direct purchasers. In August 2023, HHS, through the CMS, selected Imbruvica as one of the first 10 medicines subject to government-set prices beginning in 2026. In August 2024, the CMS published Medicare Part D prices that will be applicable to these medicines, including Imbruvica, beginning January 1, 2026. In January 2025, HHS, through the CMS, selected Vraylar and Linzess as two of the 15 medicines subject to government-set prices in Medicare Part D beginning in 2027. It is possible that more of our products, including products that generate substantial revenues, could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiration of intellectual property protections. In addition, beginning in January 2025, under the IRA, the 70% coverage gap discount program was replaced by a 10% manufacturer discount for all Medicare Part D beneficiaries that have met their deductible and incurred out of pocket drug costs below a $2,000 threshold and a 20% discount for beneficiaries that have incurred out of pocket drug costs above the $2,000 threshold under the new Part D benefit redesign. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties, which could be significant. The IRA has and will continue to meaningfully impact AbbVie’s business strategies and those of others in the pharmaceutical industry. The full impact of the IRA on AbbVie’s business and the pharmaceutical industry, including the implications to us of our or a competitor's product being selected for price setting, remains uncertain.

AbbVie continues to evaluate the impact that thepricing IRAand cost-containment related policy developments may have on the company. The potential for continuing changes to the health care system in the United States and the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid and private sector beneficiariesbeneficiaries, including pharmacy benefit managers (PBMs) and managed care organizations may result in additional pricing pressures.pressures and formulary restrictions that limit patient access to our products. For further discussion of PBM formulary practices and their impact on pricing and patient access, see "Pharmacy benefit managers and other supply chain intermediaries exert significant influence over pricing and patient access to our products" below.

Rebates related to government programs, such as fee-for-service Medicaid or Medicaid managed care programs, arise from laws and regulations. AbbVie cannot predict with certainty ifwhether additional government initiatives to contain health care costs or other factors could lead to new or modified regulatory or contractual requirements that include higher or incremental rebatesrebates, discounts or discounts.other price concessions. Other rebate and discount programs arise from contractual agreements with private payers.payers, including PBMs and managed care organizations. Various factors, including market factorsfactors, consolidation among PBMs and the ability of private payers to control patient access to products, including through formulary management and utilization controls, may provide payers the leverage to negotiate higher or additional rebates or discounts that could have a material adverse effect on AbbVie's operations.

The successful discovery, development, manufacturing and sale of biologics is a long, expensive and uncertain process. There are unique risks and uncertainties with biologics. For example, access to and supply of necessary biological materials, such as cell lines, may be limited and current governmental regulations restrict access to and regulate the transport and use of such materials. In addition, the development, manufacturing and sale of biologics is subject to regulations that are often more complex and extensive than the regulations applicable to other pharmaceutical products. As a result, manufacturing biologics, especially in large quantities, is often complex and may require the use of innovative technologies. Such manufacturing also requires facilities specifically designed and validated for this purpose and sophisticated quality assurance and quality control procedures. Biologics are also frequently costly to manufacture because production inputs are derived from living animal or plant material, and some biologics cannot be made synthetically. Failure to successfully discover, develop, manufacture and sell biologics—including Humira, Skyrizi, BotoxBotox, Humira and Creon —could have a negative impact on AbbVie's business and results of operations.

AbbVie competes with other research-based pharmaceutical and biotechnology companies that research, develop, manufacture, market and sell proprietary pharmaceutical products and biologics. All of these competitors may introduce new products or develop technological advances that compete with AbbVie’s products in therapeutic areas such as immunology, oncology,neuroscience, aesthetics, neuroscienceoncology and eye care.aesthetics. In addition, as AbbVie products lose exclusivity, competition surrounding such products will increase and generic and biosimilar products will increasingly penetrate the markets. Furthermore, consolidation among certain pharmaceutical and biotechnology companies can enhance such advantages. These advantages may make it difficult for us to compete with them successfully to discover, develop and market new products and for our current products to compete with new products or indications they may bring to market. AbbVie cannot predict with certainty the timing or impact of the introduction by competitors of new products or technological advances. Such competing products may be safer, more effective, more effectively marketed or sold, have lower prices or better insurance coverage or reimbursement levels, or have superior performance features than AbbVie’s products, and this may negatively impact AbbVie’s business and results of operations.

The manufacture of many of AbbVie's products is a highly exacting and complex process, due in part to strict regulatory requirements. Problems may arise during manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials, delays related to the construction of new facilities or the expansion of existing facilities, including those intended to support future demand for AbbVie's products, changes in manufacturing production sites and limits to manufacturing capacity due to regulatory requirements, changes in the types of products produced, physical limitations that could inhibit continuous supply, labor shortages, supply chain disruption, pandemics, man-made or natural disasters and environmental factors. If problems arise during the production of a batch of product, such batch of product may have to be discardeddiscarded, and AbbVie may experience product shortages or incur added expenses. This could, among other things, lead to increased costs, lost revenue, damage to customer relations, time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches or products. If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred.

Pharmaceutical products receive regulatory approval based on data obtained in controlled clinical trials of limited duration. Following regulatory approval, these products will be used over longer periods of time in many patients. Additional, and perhaps more extensive, studies may also be conducted, which may be sponsored by AbbVie but could also be sponsored by competitors, insurance companies, government institutions, scientists, investigators or other interested parties. If new safety or efficacy issues are reported or if new scientific information becomes available (including results of post-marketing Phase 4 trials), or if governments change standards regarding safety, efficacy or labeling, AbbVie may be required to amend the conditions of use for a product. For example, AbbVie may voluntarily provide or be required to provide updated information on a product's label or narrow its approved indication, either of which could reduce the product's market acceptance. If safety or efficacy issues with an AbbVie product arise, sales of the product could be halted by AbbVie or by regulatory authorities and regulatory action could be taken by such regulatory authorities. Safety or efficacy issues affecting suppliers' or competitors' products also may reduce the market acceptance of similar AbbVie products.

The health care industry is subject to federal, state and international laws and regulations pertaining to government benefit program reimbursements, rebates, price reporting and regulation and health care fraud and abuse. In the United States, these laws include anti-kickback and false claims laws, the Medicaid Rebate Statute, the Veterans Health Care Act, the U.S. Physician Payments Sunshine Act, the TRICARE program, the government pricing rules applicable to the Medicaid, Medicare Part B, 340B Drug Pricing Program and individual state laws relating to pricing and sales and marketing practices. ViolationsThe 340B Drug Pricing Program requires participating manufacturers to offer discounts to covered entities and growth in entities claiming entitlement to 340B pricing has increased the portion of our sales subject to such lawsdiscounts. Manufacturer policies designed to improve program integrity have been subject to enforcement actions and regulationslegal maychallenges be punishable by criminal and/or civil sanctions, including, in some instances, substantial fines, imprisonment and exclusion from participation inunder federal and state healthlaws. careAdverse programs,outcomes includingin Medicare,340B-related Medicaidlitigation andor Veteranssignificant Administration health programs. Such violations may also leadchanges to productour recalls340B andapproach seizures, interruption of production leading to product shortages, import bans or denials of import certifications, delays or denials in the approvals of new products or supplemental approvals of current products pending resolution of the issues, and reputational harm, any of which wouldcould adversely affect AbbVie'sour business. These lawsrevenues and regulations are broad in scope and are subject to change and evolving interpretations, which could require AbbVie to incur substantial costs associated with compliance or to alter one or moreresults of its sales or marketing practices. In addition, violations of these laws and regulations, or allegations of such violations, could impose new obligations on AbbVie, require it to change its business practices and restrict its operations.

•trade protection measures and import or export licensing requirements;

AbbVie from time to time pursues acquisitions, technology licensing arrangements, joint ventures and strategic alliances, and/or disposes of some of its assets, as part of its business strategy. AbbVie may not complete these transactions in a timely manner, on a cost-effective basis, or at all, and may not realize the expected benefits. If AbbVie is successful in making an acquisition, the products and technologies that are acquired may not be successful or may require significantly greater resources and investments than originally anticipated. AbbVie may not be able to integrate acquisitions successfully into its existing business and could incur or assume significant debt and unknown or contingent liabilities. AbbVie could also experience negative effects on its reported results of operations from acquisition or disposition-related charges, amortization of expenses related to intangibles and charges for impairment of long-term assets. These effects could cause a deterioration of AbbVie's credit rating and result in increased borrowing costs and interest expense.

AbbVie may need additional financing in the future to meet its capital needs or to make opportunistic acquisitions. For example, it may need to increase its investment in research and development activities. The capital and credit markets may experience extreme volatility and disruption, which may lead to uncertainty and liquidity issues for both borrowers and investors, and AbbVie may be unable to obtain any desired additional financing on terms favorable to it, if at all. If AbbVie loses its investment grade credit rating or adequate funds are not available on acceptable terms, AbbVie may be unable to fund its expansion, successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect AbbVie's business. If AbbVie raises additional funds by issuing debt or entering into credit facilities, it may be subject to limitations on its operations due to restrictive covenants. Failure to comply with these covenants could adversely affect AbbVie's business.

AbbVie relies on sophisticated software applications and complex information technology systems (including cloud services) to operate its business, which are inherently vulnerable to malicious intrusion, random attack, loss of data privacy, disruption, degradation or breakdown. Certain of these applications and systems are managed, hosted, provided or used by third parties. Data privacy or security breaches of our internal systems or those of our information technology vendors may in the future result in the failure of critical business operations. Such breaches may cause sensitive data, including intellectual property, trade secrets or personal information belonging to AbbVie, its patients, customers, employees or business partners, to be exposed to unauthorized persons or to the public. ToThe date,healthcare neitherand AbbVie’sbiopharmaceutical businessindustries norremain operationstargets haveof beencybersecurity materiallythreats impacteddue by such incidents, however,to the healthcarevalue industryand remains a targetsensitivity of cyber-attacks.the data they hold. Cybersecurity attacks and incidents are increasing in their frequency, sophistication and intensity and, due to the nature of some of these attacks, there is a risk that they may remain undetected for a period of time. AbbVie’s investments in the protection of its data and information technology and its efforts to monitor its systems on an ongoing basis may be insufficient to prevent compromises in AbbVie's information technology systems that could have a material adverse effect on AbbVie's business. Such adverse consequences could include loss of revenue or the loss of critical or sensitive information from AbbVie’s or third-party providers’ databases or information technology systems and could also result in legal, financial, reputational or business harm to AbbVie and potentially substantial remediation costs. In addition, AbbVie’s cyber insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of AbbVie systems or those of our third-party vendors.

Additionally, AbbVie utilizes artificial intelligence (AI) and other emerging technologies in select applications to support its operations. These technologies may present opportunities for AbbVie's business but may also entail risks, including that AI-generated analyses utilized by AbbVie could be deficient or exacerbate regulatory, cybersecurity or other significant risks. Further, our failure to effectively implement these technologies could hinder our ability to compete, as competitors' advancements in AI may lead to more efficient operations.

Third parties may illegally obtain, distribute, and sell counterfeit or illegally diverted from their intended market versions of AbbVie products. These versions of product would not meet AbbVie's rigorous manufacturing, testing, distribution and quality standards. A patient who receives a counterfeit, stolen, or diverted drug may be at risk for a number of dangerous health consequences. The prevalence of counterfeit/diverted medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce, greatly enhancing consumers' ability to obtain prescriptions and other medical treatments via the internet in lieu of traditional brick and mortar pharmacies. This can expose patients to greater risks as the internet is a preferred vehicle for dangerous counterfeit/diverted product offers and scams because of the anonymity it affords. AbbVie's reputation and business could suffer harm as a result of counterfeit or diverted drugs sold under its brand name which may also result in reduced revenues that could negatively affect our results of operation.

AbbVie is a global, diversified research-based biopharmaceutical company positioned for success with a comprehensive product portfolio that has leadership positions across immunology, oncology,neuroscience, aesthetics, neuroscienceoncology and eye care.aesthetics. AbbVie uses its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.

AbbVie's products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the marketmarket, works through largely centralized national payers systems to agree on reimbursement terms. Certain products are co-marketed or co-promoted with other companies. AbbVie operates as a single global business segment and has approximately 55,000 employees.segment.

AbbVie's mission is to discover and develop innovative medicines and products that solve serious health issues today and address the medical challenges of tomorrow while achieving top-tier financial performance through outstanding execution. AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas andareas, ensuring strong commercial execution of new product launches as well as continued investment in key on-market products; (iii) continuing to invest in and expand its pipeline in support of opportunities inacross our core areas of immunology, oncology,neuroscience, aesthetics, neuroscienceoncology and eye careaesthetics as well as continuednew investmentsources inof keygrowth on-marketsuch productsas obesity; (iv) generating substantial operating cash flows to support investmentinvestments in innovative research and development,development and returnreturning cash to shareholders via a strong and growing dividend while alsomaintaining continuinga tostrong repayinvestment debt.grade credit rating. In addition, AbbVie anticipates several regulatory submissionssubmissions, approvals and data readouts from key clinical trials in the next 12 months.

•Maximizing revenue growth of our key on-market products, including Skyrizi, Rinvoq, Venclexta,Vraylar, Elahere,Botox Vraylar,Therapeutic, Ubrelvy, Qulipta, Vyalev/Produodopa,Vyalev, Venclexta, Elahere, Botox Cosmetic and Juvederm Collection.

AbbVie's strategy has focused on delivering strong financial results, maximizing the benefits of a diversified revenue base, advancing and investing in its pipeline and returning value to shareholders while ensuring a strong, sustainable growth business over the long term. The company's financial performance in 20242025 included delivering worldwide net revenues of $56.3$61.2 billion, operating earnings of $9.1$15.1 billion, diluted earnings per share of $2.39$2.36 and cash flows from operations of $18.8$19.0 billion. Worldwide net revenues increased by 4%9% on a reported and 5% on a constant currency basis.

DilutedFinancial earningsresults perfor share2025 in 2024 was $2.39 andalso included the following after-tax costs: (i) $6.5$7.4 billion related to the amortization of intangible assets; (ii) $3.7$6.5 billion for the change in fair value of contingent consideration liabilities; (iii) $3.5$847 billionmillion related to intangible asset impairment; and (iv) $978$276 million of acquisition and integration expenses; and (v) $721 million for charges related to litigation matters. These costs were partially offset by an income tax benefit of $1.8 billion primarily related to the settlement of income tax examinations.expenses. Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.

RegulationRegulatory Environment

The Inflation Reduction Act of 2022 has and will continue to have a significant impact on how drugs are covered and paid for under the Medicare program, including through the creation of financial penalties for drugs whose price increases outpace inflation, the redesign of Medicare Part D benefits to shift a greater portion of the costs to manufacturers, and through government price-setting for certain Medicare Part B and Part D drugs. In 2023, Imbruvicathe wasU.S. Department of Health and Human Services, through Centers for Medicare and Medicaid Service, selected Imbruvica as one of the first 10 medicines subject to government-set prices beginning in 2026. In 2024, the CMS published Medicare Part D prices that will be applicable to the 10 selected drugs, including Imbruvica, beginning in 2026.2026 Inand Januaryin 2025, HHS, through the CMS, selected Vraylar and Linzess as two of the15 medicines subject to government-set prices in Medicare Part D beginning in 2027. In January 2026, Botox was selected as one of 15 medicines subject to government-set prices in Medicare Parts B and D beginning in 2027.2028. It is possible that more of our products, including products that generate substantial revenues, could be selected in future years, which could, among other things, accelerate revenue erosion prior to expiration of intellectual property protections. The effect of reducing prices and reimbursement for certain of our products would significantly impact our results of operations. See Part I, Item 1 “Business – Regulation – Commercialization, Distribution and Manufacturing,” Part I, Item 1A “Risk Factors” and Note 7 to the consolidatedConsolidated financialFinancial statementsStatements for additional information.

AbbVie'sAbbVie’s pipeline currently includes approximately 90 compounds, devices or indications in development individually or under collaboration or license agreements and is focused on important specialties including immunology, oncology, aesthetics, neuroscience and eye care.agreements. Of these programs, approximately 5060 are in mid- and late-stage development. The company’s pipeline is focused on such important therapeutic areas as immunology, neuroscience, oncology and aesthetics and other specialties, including obesity.

•In JulyApril 2024,2025, AbbVie announced that it submitted applications for a new indication to the FDA and European Medicines AgencyCommission (EMAEC) forgranted marketing authorization to Rinvoq for the treatment of giant cell arteritis (GCA) in adult patients with GCA.patients.

•In JuneApril 2024,2025, AbbVie announced that the U.S. FDA approved SkyriziRinvoq for adultsthe withtreatment moderatelyof toGCA severelyin activeadult ulcerative colitis (UC).patients.

•In July 2024,2025, AbbVie initiatedannounced apositive topline results from Study 2 of its Phase 3 clinicalUP-AA trial tofor evaluateRinvoq lutikizumabas a monotherapy in adultadults and adolescent patientsadolescents with moderate to severe HS.alopecia areata (AA).

•In MarchMay 2024,2025, AbbVieGenmab initiatedA/S a(Genmab) announced positive topline results from the Phase 3 clinical trial to evaluateevaluating Epkinly in combination withplus rituximab and lenalidomide versus rituximab and lenalidomide alone in adult patients with previouslyrelapsed untreatedor refractory (R/R) follicular lymphoma (FL).lymphoma.

•In AugustNovember 2024,2025, AbbVie announced that the ECU.S. grantedFDA conditionalapproved marketingEpkinly authorizationplus forrituximab Tepkinlyand as a monotherapylenalidomide for the treatment of adult patients with R/R FLfollicular after two or more lines of prior therapy.lymphoma.

•In JuneJanuary 2024,2026, AbbVie announced positive topline results from the Phase 2 PICCOLO3 trial evaluating ElahereEpkinly monotherapycompared to investigator's choice of chemoimmunotherapy in heavily pre-treatedadult patients with FRα-positive,R/R platinum-sensitivediffuse ovarianlarge cancer.B-cell lymphoma (DLBCL). The study metdemonstrated itsan primaryimprovement endpointin andprogression nofree newsurvival safety(PFS) concernsbut weredid identified.not demonstrate a statistically significant improvement in overall survival (OS).

The following is a discussion and analysis of the financial condition of AbbVie Inc. (AbbVie or the company) as of MarchJune 31,30, 2026 and December 31, 2025 and the results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025. This commentary should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying notes appearing in Item 1, “Financial Statements and Supplementary Data.”

AbbVie's products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. Certain products (including aesthetic products and devices) are also sold directly to physicians and other licensed healthcare providers. In the United States (U.S.), AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. Outside the United States, AbbVie sells products primarily to wholesalers or through distributors, and depending on the market works through largely centralized national payerspayer systems to agree on reimbursement terms. Certain products are co-marketed or co-promoted with other companies. AbbVie operates as a single global business segment.

The company’s financial performance for the threesix months ended MarchJune 31,30, 2026 included delivering worldwide net revenues of $15.0$32.0 billion, operating earnings of $4.0$10.4 billion, diluted earnings per share of $0.39$2.42 and cash flows from operations of $3.8$7.3 billion. Worldwide net revenues increased 12%11% on a reported basis and 10% on a constant currency basis.

Financial results for the threesix months ended MarchJune 31,30, 2026 also included the following costs: (i) $1.7$3.4 billion related to the amortization of intangible assets; and (ii) $2.4$3.9 billion for the change in fair value of contingent consideration liabilities. Additionally, financial results reflected continued funding to support all stages of AbbVie’s pipeline assets and continued investment in AbbVie’s on-market brands.

The Inflation Reduction Act of 2022 has and will continue to have a significant impact on AbbVie’s business. In January 2026, the U.S. Department of Health and Human Services, through Centers for Medicare and Medicaid Service,Services, selected Botox as one of 15 medicines subject to government-set prices in Medicare Parts B and D beginning in 2028.

In 2026, AbbVie announced an investment to build a pharmaceutical manufacturing campus in North Carolina. The campus will integrate advanced manufacturing and laboratory technologies with artificial intelligence to support the production of immunology, neuroscience and oncology medicines. Additionally, AbbVie announced investments to add two new manufacturing facilities in Illinois to support next generation neuroscience and obesity medications as well as an agreement to acquire a device manufacturing facility in Arizona.Arizona, which closed in July 2026. These projects are part of AbbVie's plan to invest in the U.S. to broadly support innovation and expand critical manufacturing capabilities and capacity.

•In February 2026, AbbVie announced the submission of applicationsan application for a new indication to the U.S. FDA and European Medicines Agency (EMA) for Rinvoq for the treatment of adult and adolescent patients with non-segmental vitiligo.

•In April 2026, AbbVie announced the submission of an application for a new indication to the U.S. FDA for Rinvoq for the treatment of adult and adolescent patients with severe alopecia areata (AA).areata.

•In February 2026, AbbVie announced that the U.S. FDA approved the combination regimen of Venclexta with acalabrutinib for the treatment of previously untreated adult patients with chronic lymphocytic leukemia (CLL).

•In January 2026, AbbVie announced topline results from the Phase 3 EPCORE DLBCL-1 trial evaluating Epkinly compared to investigator's choice of chemoimmunotherapy in adult patients with relapsed/refractory (R/R) diffuse large B-cell lymphoma (DLBCL). The study demonstrated an improvement in progression free survival but did not demonstrate a statistically significant improvement in overall survival.

•In April 2026, AbbVie announced it received a Complete Response Letter (CRL) from the U.S. FDA regarding the Biologics License Application (BLA) for trenibotulinumtoxinE (TrenibotE) for the treatment of moderate to severe glabellar lines. In its letter, the FDA requested additional information about manufacturing processes. The CRL does not identify any safety or efficacy concerns for TrenibotEtrenibotulinumtoxinE and does not request additional clinical studies.

Net revenues for Skyrizi increased 29%24% for the three months and 26% for the six months ended MarchJune 31,30, 2026 primarily driven by continued strong market share uptake as well as market growth across all indications.

Net revenues for Rinvoq increased 20%24% for the three months and 22% for the six months ended MarchJune 31,30, 2026 primarily driven by continued strong market share uptake as well as market growth across all indications.

Net revenues for Humira decreased 40%36% for the three months and 38% for the six months ended MarchJune 31,30, 2026 primarily driven by continued impact of direct biosimilar competition following the loss of exclusivity.

Net revenues for Vraylar increased 18%19% for the three and six months ended MarchJune 31,30, 2026 primarily driven by continued market share uptake and market growth as well as marketfavorable growth.pricing.

Net revenues for Botox Therapeutic increased 15%12% for the three months and 13% for the six months ended MarchJune 31,30, 2026 primarily driven by market growth as well as continued market share uptake.

Net revenues for QuliptaUbrelvy increased 51%16% for the three months and 26% for the six months ended MarchJune 31,30, 2026 primarily driven by continued strong market share uptake as well as market growth.

Net revenues for VyalevQulipta increased greater than 100%30% for the three months and 39% for the six months ended MarchJune 31,30, 2026 primarily driven by strongcontinued market share uptake.uptake as well as market growth.

Net revenues for VenclextaVyalev increased 10%greater than 100% for the three and six months ended MarchJune 31,30, 2026 primarily driven by increasedstrong demand.market share uptake.

Net revenues for ElahereVenclexta increased 8%10% for the three and six months ended MarchJune 31,30, 2026 primarily driven by increased demand.

Net revenues for Botox CosmeticElahere increased 17%32% for the three months and 19% for the six months ended MarchJune 31,30, 2026 primarily driven by favorableincreased pricing due to customer loyalty program changes in the United States in the prior year and the timing of customer inventory stocking.demand.

Net revenues for JuvedermBotox CollectionCosmetic decreasedincreased 3% for the three months and 10% for the six months ended MarchJune 31,30, 2026 primarily driven by decreasedincreased consumer demand,demand partiallyacross offsetcertain international markets. Net revenues for the six months ended June 30, 2026 were also impacted by favorable pricing due to customer loyalty program changes in the United States in the prior year and the timing of customer inventory stocking.year.

Gross margin as a percentage of net revenues increased for the three and six months ended MarchJune 31,30, 2026 compared to the prior year primarily due to higher net revenues andcompared to lower fixed costs primarily driven by decreased amortization of intangible assets.

Selling, general and administrative (SG&A) expenses as a percentage of net revenues decreasedwere flat for the three and six months ended MarchJune 31,30, 2026 compared to the prior yearyear. primarilySG&A dueexpense topercentage for both the three and six months ended June 30, 2026 was favorably impacted by the continued leverage from net revenues growth partiallygrowth, offset by higher litigation reserve charges.

Research and development (R&D) expenses as a percentage of net revenues increasedwere flat for the three and six months ended MarchJune 31,30, 2026 compared to the prior yearyear. primarilyR&D due toexpenses increased funding to support all stages of the company’s pipeline assets.

Acquired IPR&D and milestones expense for the threesix months ended MarchJune 31,30, 2026 included an upfront charge of $650 million related to a license agreement with RemeGen Co,Co., Ltd. Acquired IPR&D and milestones expense for the three and six months ended June 30, 2025 included upfront charges of $350 million related to a license agreement with Gubra A/S and $335 million related to an option-to-license agreement with ADARx Pharmaceuticals, Inc. See Note 4 to the Condensed Consolidated Financial Statements for additional information.

Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $1.5 billion for the three months and $3.9 billion for the six months ended June 30, 2026 and $2.8 billion for the three months and $4.3 billion for the six months ended June 30, 2025. The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs, including the probability of achieving regulatory approval, discount rates, the estimated amount of future sales of the acquired products and other market-based factors. For the three and six months ended MarchJune 31,30, 2026, the change in fair value reflected higher estimated Skyrizi sales andsales, the passage of time,time and favorable clinical trial results for pipeline assets in combination with Skyrizi, partially offset by higher discount rates. For the three and six months ended MarchJune 31,30, 2025, the change in fair value reflected higher estimated Skyrizi sales, the passage of time and lower discount rates.

The effective tax rate was 33%15% for the three months and 19% for the six months ended MarchJune 31,30, 2026 compared to 22%39% for the three months and 31% for the six months ended MarchJune 31,30, 2025. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to changes in fair value of contingent consideration and business development activities partially offset by the impact of foreign operations which reflect lower income tax rates in locations outside the United States.States partially offset by changes in fair value of contingent consideration and business development activities. The increasedecrease in the effective tax rate for the three and six months ended MarchJune 31,30, 2026 over the prior year was primarily due to the increaseddecreased impact of changes in fair value of contingent consideration and business development activitiesactivities. The decrease in the effective tax rate for the three months ended June 30, 2026 over the prior year was partially offset by changes in the impact of foreign operations.

Operating cash flows for the threesix months ended MarchJune 31,30, 2026 increased compared to the prior year primarily due to increased results from operations driven by higher net revenues, timing of working capitalrevenues and lower payments related to litigation matters.matters partially offset by timing of working capital and higher payments of contingent consideration liabilities.

Investing cash flows for the threesix months ended MarchJune 31,30, 2026 included payments made for other acquisitions and investments, net of cash acquired of $266$1.1 millionbillion and capital expenditures of $265$587 million. Investing cash flows for the threesix months ended MarchJune 31,30, 2025 included $210 million cash consideration paid to acquire Nimble Therapeutics, Inc. offset by cash acquired of $6 million, payments made for other acquisitions and investments, net of cash acquired of $334$1.3 millionbillion and capital expenditures of $235$504 million.

Financing cash flows for the threesix months ended MarchJune 31,30, 2026 included the issuance of unsecured senior notes totaling $8.0 billion aggregate principalprincipal. andFinancing cash flows also included the repayment of $2.0 billion aggregate principal of the 364-day term loan credit agreement.agreement and $2.0 billion aggregate principal of 3.20% senior notes. Financing cash flows for the threesix months ended MarchJune 31,30, 2025 included the issuance of unsecured senior notes totaling $4.0 billion aggregate principal and $2.0 billion under the 364-day term loan credit agreement. Financing cash flows also included the repayment of $3.0 billion aggregate principal of the 3.80% senior notes and $3.8 billion aggregate principal of 3.60% senior notes.

Financing cash flows also included cash dividend payments of $3.1$6.2 billion for the threesix months ended MarchJune 31,30, 2026 and $2.9$5.8 billion for the threesix months ended MarchJune 31,30, 2025. The increase in cash dividend payments was primarily drivendue byto the increase in the quarterly dividend rate.

On FebruaryJune 19,18, 2026, the company announced that its board of directors declared a quarterly dividend of $1.73 per share beginning with the dividend payable on May 15, 2026 tofor stockholders of record asat the close of Aprilbusiness on July 15, 2026, payable on August 14, 2026. The timing, declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie’s debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.