艾伯維 (ABBV) 2016 Q2 法說會逐字稿

Good morning and thank you for standing by. Welcome to the AbbVie second-quarter 2016 earnings conference call. (Operator Instructions)

I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations. Ma'am, you may now begin.

Good morning and thank you for joining us. Also on the call with me today are: Rick Gonzalez, Chairman of the Board and Chief Executive Officer; Michael Severino, Executive Vice President of Research and Development and Chief Scientific Officer; and Bill Chase, Executive Vice President of Finance and Chief Financial Officer.

EVENT ID: 138053571030

Before we get started I want to remind you that some statements made today are, or may be considered, forward-looking statements for the 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 2015 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 events or developments, 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 GAAP financial measures in our earnings release and regulatory filings from today, which can be found on our website. Following our prepared remarks, we will take your questions.

With that I will turn the call over to Rick.

Thank you, Liz. Good morning, everyone, and thank you for joining us today. We delivered another strong quarter with results well ahead of our expectations, including adjusted earnings per share of $1.26, representing growth of 16.7% versus the second quarter of 2015.

Our results in the quarter included strong top-line performance with global operational sales growth of 18%, reflecting robust growth from several products in our portfolio including Humira and Imbruvica, among others. We are pleased with our outperformance in the quarter and progress year to date. We've driven outstanding commercial, operational, and R&D execution, resulting in strong top- and bottom-line results.

Based on our performance in the first half of the year, we are raising our full-year 2016 EPS guidance to $4.73 to $4.83 on an adjusted basis, reflecting growth of 11.4% at the midpoint.

As I mentioned, several products within our portfolio are driving robust growth. Humira continues to drive strong performance, delivering global operational growth of more than 17% in the quarter. Despite increasing competition from new classes of drugs and indirect biosimilar competition in international markets, Humira continues to demonstrate exceptional performance and durability across all three market segments.

In rheumatology, Humira is the number one prescribed biologic and we continue to grow our share position in the face of new competition. And in dermatology and gastro, Humira continues to hold a strong market leadership position, demonstrating double-digit growth year over year.

We also continue to be pleased with the strong Imbruvica performance, which is tracking in line to slightly ahead of our expectations following our approval for first-line use in CLL. Imbruvica has achieved the number one market share position in all approved disease indications in second-line and second-line-plus treatment.

And since we received the FDA approval of Imbruvica as a first-line treatment for CLL late in the first quarter, Imbruvica has already gained a market share position in first-line in the midteens and the third position in the market. This share continues to steadily increase, with approximately one of every six patients now receiving Imbruvica as a front-line therapy, surpassing FCR, which is generally considered the gold standard for young and fit CLL patients.

This market share and the strong momentum underlying its performance further reinforces our confidence in our long-term expectations for Imbruvica that supported our decision to acquire Pharmacyclics last year.

We also saw a strong performance from several other products in our portfolio including Duodopa, Creon, and Lupron. Each of these therapies within our marketed product portfolio continued to deliver durable performance.

Global Viekira sales in the second quarter were $419 million, up 8.2% on an operational basis. Growth in the quarter was driven by our international business. In the US, as we described on our first-quarter call, we have seen market share loss and some price erosion due to the entry of a new competitor into the HCV market.

We are nearing the completion of our registrational studies for the next-generation pan-genotypic HCV combinations. Based on the mid-stage data we have disclosed to date, we believe that our new HCV combination will be highly competitive. The data illustrates that this therapy can deliver cure rates approaching 100% across genotypes and we believe the majority of patients will be well served with an eight-week treatment option.

We expect to see results from the pivotal studies in the second half and we remain on track for commercialization next year.

In addition to our strong financial results, we have continued to advance our strategic priorities and have made excellent progress with our R&D pipeline. Mike will cover the pipeline in more detail in just a few moments, so I will only mention a few highlights.

Importantly, we successfully completed the acquisition of Stemcentrx. We have been impressed by the caliber of talent we've welcomed from Stemcentrx and the transition has been seamless. The addition of Stemcentrx is a strategically and financially compelling opportunity for our company, giving AbbVie a highly-attractive platform for solid tumors and an extremely exciting late-stage asset in Rova-T.

The transaction enables AbbVie to further expand and accelerate our presence in oncology, building upon our growing position in hematological oncology. We are moving rapidly to advance Rova-T in its lead dedication, third-line small cell lung cancer, and we continue to feel confident about our 2017 BLA filing strategy and launch in 2018. We're also rapidly advancing studies to evaluate Rova-T in earlier lines of therapy for small cell lung cancer, including accommodation studies with both chemotherapies and immuno-oncology agents.

Earlier this week, we jointly announced a clinical collaboration with Bristol-Myers Squibb to evaluate the combination of Rova-T with BMS's immuno-oncology agents in small cell lung cancer, with trials beginning this year. We are pleased to be partnering with BMS to bring innovative new therapies forward that have the potential

We are pleased to be partnering with BMS to bring innovative new therapies forward that have the potential to significantly improve the survival of patients with small cell lung cancer, a disease with devastating outcomes.

We have also continued to make significant progress with our hematological oncology portfolio. We are building upon our strong position with Imbruvica in treating blood cancers with Venclexta. During the quarter, we received the first FDA approval for Venclexta for patients with relapsed/refractory CLL who harbor the 17p deletion, a difficult to treat form of the disease typically associated with poor prognosis. The approval for this transformative therapy was granted under breakthrough therapy and priority review designations and the launch is still in its early stages.

Although this first indication is a relatively small patient population, it is important to provide patients with this difficult-to-treat disease a new therapy with strong clinical results and it's also important to give physicians an opportunity to gain experience with the particular initial dosing regimen of Venclexta to ensure patients receive the benefit of this therapy. We expect data from the Phase 3 study evaluating Venclexta in a broader set of relapsed/refractory CLL patients to read out next year, supporting our regulatory submission for an expanded label covering all relapsed/refractory CLL patients, a much larger population.

Like Imbruvica, we believe that Venclexta will be effective across a range of hematological malignancies with high unmet need and we are actively evaluating additional indications, including acute myeloid leukemia, non-Hodgkin's lymphoma, and multiple myeloma, among others.

We also continue to make progress across other important areas of our pipeline. During the quarter, we presented positive results from a mid-stage study of our anti-IL 23 monoclonal antibody, risankizumab, in patients with moderate to severe Crohn's disease. The pivotal program for risankizumab is in psoriasis and it's underway and enrolling very well.

And in partnership with Biogen, we recently received FDA and EC approval for Zinbryta for relapsing forms of multiple sclerosis. We plan to launch Zinbryta in the US in August.

In summary, we continue to be pleased with our strong execution and the significant advancements in our pipeline. As we outlined at our recent R&D day, we have eight late-stage assets which have been significantly derisked and have the potential to drive meaningful revenue growth in the years to come.

We have continued to demonstrate an exceptional track record of success, with positive clinical data and regulatory outcomes and strong commercial performance. We intend to build on this momentum to drive a high level of performance across our operations in the second half of the year.

With that, I will turn the call over to Mike for some additional comments on our R&D programs. Mike?

Thank you, Rick. We had another very productive quarter from an R&D perspective, with significant progress on several programs, including the FDA approval of Venclexta for its first indication in patients with relapsed/refractory CLL with the 17p deletion mutation, as well as the FDA and EMA approvals of Zinbryta for relapsing forms of multiple sclerosis. Today I will highlight additional updates and discuss some of the milestones we anticipate in the second half of 2016.

I will start with our oncology portfolio, an area where we are growing our already strong position in hematologic malignancies, as well as establishing a strong foundation in solid tumors, which was significantly accelerated by our recent acquisition of Stemcentrx and its lead asset, Rova-T. At the ASCO meeting in early June, we presented data from a Phase 2 trial in small cell lung cancer that demonstrated that Rova-T monotherapy drove a one-year survival rate of 32% in DLL3 positive patients, almost triple that of historical third-line standard of care at 12%.

In addition to the impressive one-year survival, Rova-T showed the most compelling single-agent activity in terms of overall response rate, clinical benefit rate, and progression-free survival in third-line small cell lung cancer. The patient population for our first pivotal trial for registration is rapidly enrolling.

The confirmatory third-line registrational trial, which is called Trinity, began in January and is expected to complete enrollment by the end of 2016 with commercialization expected in 2018. We are also quickly advancing Rova-T into studies to support front-line treatment in small cell lung cancer in combination with chemotherapy. The first-line development program includes a Phase 1/2 regimen selection study that will be used to inform future Phase 3 pivotal trials evaluating various combinations of Rova-T and chemotherapy. The regimen selection study is expected to begin next quarter.

The first-line program also includes the [MARU] study, a Phase 3 registration a trial evaluating standard chemotherapy followed by Rova-T in the front-line setting. We expect to have this study up and running by the end of the year.

We are also advancing an eight-arm basket study evaluating Rova-T in a range of neuroendocrine tumors where DLL3 plays an important role. This study is on track to begin this quarter with data expected next year.

Given that many of these tumor types have low survival rates and limited treatment options available, there may be an opportunity to explore single-arm studies to support accelerated approval. As Rick mentioned earlier this week, we announced a clinical collaboration with BMS to evaluate the investigational combination of Rova-T with Opdivo and Opdivo and Yervoy in small cell lung cancer. We believe that combining Rova-T with these checkpoint inhibitors could drive enhanced and sustained efficacy above that which either approach could offer individually.

Preclinical evidence and biological rationale supports our prioritization of efforts to combine Rova-T with IO agents and we believe these combinations have the potential to establish a new standard of care. We expect to begin the Rova-T IO combination study by the end of the year.

In addition to Rova-T, we've also continued to make progress with our pipeline assets targeting solid tumors. In particular, our PARP inhibitor, veliparib, and ABT-414, an antibody drug conjugate for glioblastoma multiforme. We presented Phase 1 data for both of these assets at the recent ASCO meeting and anticipate data readouts from registration-enabling studies for both programs over the next 12 months.

We also continue to make good progress with our hematologic oncology portfolio. In the second quarter, the FDA updated the Imbruvica label to include new data from two Phase 3 trials supporting expanded use in patients with CLL and SLL, including overall survival data from both the RESONATE-2 and HELIOS trials. Imbruvica is also being evaluated in mid- to late-stage trials for several additional indications, with timing of data readouts and potential regulatory submissions dependent on event-driven analyses of ongoing studies.

In June, Imbruvica received breakthrough therapy designation as a potential treatment of chronic graft-versus-host disease after failure of one or more lines of systemic therapy, marking the drug's fourth breakthrough therapy designation. The FDA also granted Imbruvica orphan drug designation for the same condition.

The breakthrough designation was based on clinical data from a Phase 2 study evaluating the safety and efficacy of Imbruvica for the treatment of patients with steroid-dependent or refractory chronic GvHD. Our registrational study in graft-versus-host disease is underway with data expected late this year or early 2017.

We've made significant progress with the development of another important strategic asset, our novel BCL-2 inhibitor, Venclexta, which is being developed in collaboration with Roche. Venclexta was recently approved under priority review for first indication in patients with relapsed/refractory CLL with 17p deletion. Earlier this year, Venclexta also received the FDA's breakthrough therapy designation for use in combination with rituximab for the treatment of patients with relapsed/refractory CLL.

The Phase 3 MURANO trial, which will support a broader label in relapsed/refractory CLL, is fully enrolled, with data readout and regulatory submission anticipated in 2017. Additionally, we have an active Phase 3 program evaluating Venclexta in treatment-naive CLL patients with studies underway and progressing well.

Like Imbruvica, we believe Venclexta will be effective across a range of blood cancers, including AML and multiple myeloma. We recently started a Phase 3 program evaluating Venclexta in combination with standard of care in multiple myeloma and we anticipate moving forward with Phase 3 development in AML by the end of the year.

In addition to the elements of the program I've described, we continue to be excited about the ongoing clinical evaluation of combinations of Imbruvica and Venclexta, which we believe have the potential to drive profound responses and minimal residual disease negativity in a number of clinical settings.

Now I would like to turn our attention to the immunology portfolio where we have two late-stage assets: our anti-IL-23 monoclonal antibody, risankizumab, and our selective JAK1 inhibitor, ABT-494. Each of these assets has the potential to significantly advance standard of care in immune-mediated conditions such as RA, psoriasis, and Crohn's disease, covering the major market segments where we currently have a leadership position.

ABT-494 is currently in Phase 3 development for rheumatoid arthritis, where we are studying the asset in six pivotal trials. Our JAK inhibitor has the potential to be best in class with what we believe will be an optimized benefit/risk profile.

Our development strategy is aimed at delivering a comprehensive label to cover multiple lines of therapy, from first-line use in methotrexate-naive patients to use in patients with inadequate response to biologics, where the highest unmet need remains in this market. Data from the ABT-494 Phase 3 RA program is expected in the first half of 2018, with commercialization targeted in 2019.

We have also accelerated the development of this important asset in gastrointestinal disorders. Our Phase 2 study in Crohn's disease is well underway and data should be available internally later this year. This will enable a decision to advance to Phase 3 development by the first quarter of next year. You can expect to see the data from this Phase 2 Crohn's study at DDW next year.

In addition, we recently initiated a Phase 2 study in ulcerative colitis with data expected in 2018.

Risankizumab is another strategically important late-stage immunology asset. This anti-IL-23 monoclonal antibody, which we license from Boehringer Ingelheim earlier this year, has the potential to be a transformative therapy by providing best-in-class efficacy with increased dosing convenience.

Risankizumab is currently in Phase 3 psoriasis trials and in mid-stage development for both Crohn's disease and psoriatic arthritis. Interest in the Phase 3 psoriasis program has been strong and enrollment is progressing very well. We continue to expect data from the registrational programs in 2018.

At the Digestive Disease Week meeting in May, we reported encouraging results from a Phase 2 study of risankizumab in patients with moderate to severe Crohn's disease, a particularly difficult-to-treat population given that the majority of these patients had previously failed treatment with one or more TNF antagonists. Based on these strong results, we intend to move rapidly into Phase 3 studies in Crohn's disease with registration trials commencing later this year or early next year.

Another technology that we believe holds great promise is our proprietary bispecific antibody platform. We have introduced a number of these assets into the clinic in both our immunology and oncology therapeutic areas. Based on our early-stage studies, we have established proof of concept across several programs, demonstrating that these antibodies possess good drug-like properties and deliver the desired pharmacodynamic effects. And we've learned how to successfully and consistently manufacture them.

We recently evaluated data from one of our bispecific programs in development, ABT-122, our combination anti-TNF and anti-IL-17, in Phase 2 trials for RA and psoriatic arthritis. The data demonstrated that ABT-122 was well-tolerated with a safety profile that was comparable to Humira. In the mid-stage psoriatic arthritis and RA studies, ABT-122 showed ACR 20 response rates as high as 75% and 82%, respectively, demonstrating that the platform worked well, with clear evidence of biologic activity.

However, the simultaneous inhibition of IL-17 and TNF alpha did not produce the strong synergistic effect necessary to differentiate ABT-122 from other candidates in our pipeline, such as ABT-494 and risankizumab. As a result, we have made the decision not to pursue further development of this asset.

While in this particular setting we didn't see the high level of differentiation we were seeking, the validation of the bispecific platform gives us confidence to continue to advance other programs with different mechanisms of action.

Also in our immunology portfolio, we continue to make progress with vobarilizumab, an anti-IL-6 receptor nanobody being developed in collaboration with Ablynx for patients with moderate to severe rheumatoid arthritis. Earlier this month, Ablynx announced positive top-line results from a Phase 2 monotherapy study demonstrating that this asset improves symptoms of RA. We expect results from a second Phase 2 study evaluating use with methotrexate in the third quarter, which will allow us to determine next steps for development of this asset.

In the quarter, we also made significant progress in other key therapeutic areas and are on track to advance several programs in the second half of the year. In virology, our next-generation HCV program is progressing well. Early in the quarter at the International Liver Congress, we presented new data on our pan-genotypic once-daily ribavirin-free combination of ABT-493 and ABT-530 in patients with genotypes 1 through 6, including data on treatment durations as short as eight weeks.

The data illustrate that with eight weeks of treatment 97% to 98% of genotype 1 through 3 patients without cirrhosis treated with AbbVie's next-generation regimen achieved sustained virologic response at 12 weeks. Additionally, 100% of genotype 4 through 6 patients without cirrhosis achieved SVR12 with 12 weeks of treatment.

Overall, we believe that AbbVie's next-generation HCV therapy will be able to address the remaining unmet medical need within this market. We continue to expect to see results from the Phase 3 trials in the coming months and we remain on track for commercialization next year.

And in the area of women's health, we are nearing completion of our Phase 3 endometriosis program with regulatory submission planned for 2017. Earlier this year we announced positive top-line results from the second of two replicate pivotal Phase 3 clinical trials evaluating elagolix in premenopausal women who suffer pain from endometriosis. The results show that after six months of continuous treatment both doses of elagolix met the study's co-primary endpoints, with elagolix reducing scores of menstrual pain and non-menstrual pelvic pain at month three and month six.

We plan to present detailed results from both Phase 3 studies, including extension study data out to 12 months, at the American Society for Reproductive Medicine in October. And our Phase 3 studies in uterine fibroids are under way and progressing well. This program is investigating the effect of elagolix on heavy bleeding related to this highly-prevalent condition.

So in summary, we continue to make significant progress with our pipeline and are on track for further advancements in the remainder of 2016. We have a broad pipeline that includes more than 50 active clinical development programs, including more than 20 new products or indications in late-stage development or under regulatory review.

With that I will turn the call over to Bill for additional comments on our second-quarter performance.

Thanks, Mike. This morning I will review our second-quarter performance and provide an update on our outlook for 2016, inclusive of the recently-completed Stemcentrx transaction and BI collaboration.

We are very pleased with our strong second-quarter results. In addition to delivering strong operational sales growth of 18%, we exceeded the midpoint of our adjusted earnings per share guidance range by $0.06 and delivered growth of nearly 17% over the second quarter of 2015.

As Rick mentioned, we continue to see strong momentum from Humira with global sales of more than $4.1 billion, up 17.7% operationally. In the US, Humira sales increased nearly 27%. We continue to see midteens prescription volume growth across the brand, fueled by robust demand in the rheum, derm, and gastro market segments.

In the quarter, we also saw a low single-digit benefit on the growth rate as a result of customer buying patterns versus the prior-year quarter. Channel inventory levels in both the second quarter of 2015 and 2016 were below half a month.

International Humira sales were more than $1.4 billion in the quarter, up 4% on an operational basis and exceeding our prior guidance of 3% operational growth for the quarter. Internationally, Humira continues to maintain its strong market leadership position. We continue to see only modest overall market share gains for biosimilar Remicade in major markets, in line with our planning assumptions. And while still early in the launch, the Enbrel biosimilar continues to perform in line with our assumptions.

Global Imbruvica net revenues were $439 million in the quarter. US sales were $384 million and our international profit-sharing was $55 million. Global Viekira sales in the second quarter were $419 million. This reflects weaker quarter-over-quarter sales in the US due to competitive dynamics, offset by our performance in international markets.

Global sales of Duodopa, our therapy for advanced Parkinson's disease, grew nearly 29% on an operational basis in the quarter, continuing to grow by double digits internationally with a modest level of US sales as expected. We also saw strong operational sales growth in the quarter from both Creon and Lupron, which were up 13% and 11%, respectively.

As Rick noted, in the quarter we received approval for two new products, Venclexta and Zinbryta. We launched Venclexta early in the quarter in its initial indication for relapsed/refractory CLL patients with the 17p deletion, which represents a smaller addressable patient population in the US. We have begun a measured commercial rollout to ensure adequate physician training and we expect a modest level of Venclexta sales for 2016. For Zinbryta, we plan to launch in the US in August.

Adjusted gross margin for the quarter was 81.9% of sales. On a comparative year-over-year basis, this ratio reflects an adverse impact from foreign exchange of roughly 320 basis points. In addition, the adjusted gross margin reflects 160 basis points of unfavorable impact related to the Pharmacyclics acquisition, including the profit transfer for Imbruvica. Adjusting for these impacts, gross margin profile performance improved by approximately 140 basis points versus the prior year.

Adjusted R&D was 15.5% of sales, reflecting funding actions supporting the pipeline, as well as the impact of both Stemcentrx transaction and the BI collaboration. Adjusted SG&A was 22.2% of the sales in the second quarter, down 290 basis points from the prior year.

Adjusted operating margin was 43.9% of sales, down 30 basis points relative to the second quarter of 2015. Excluding the negative impact of foreign exchange and the Pharmacyclics acquisition, operating margin profile performance improved 370 basis points versus the prior year.

Net interest expense was $225 million and the adjusted tax rate was 20.1% in the quarter. Second-quarter adjusted earnings per share, excluding non-cash intangible amortization expense and specified items, were $1.26, up 16.7% year over year.

Moving on to our outlook for the remainder of the year, based on our strong business performance year to date we are raising our 2016 adjusted EPS guidance range to $4.73 to $4.83, reflecting adjusted EPS growth of 11.4% at the midpoint. This includes the previously communicated $0.28 of dilution related to the Stemcentrx acquisition and the BI collaboration.

We are also updating our 2016 GAAP diluted EPS guidance range to $3.82 to $3.92, which includes $0.91 per share of non-cash intangible asset amortization expense and other specified items, including acquisition costs and accounting impacts associated with Stemcentrx and the BI collaboration. On the top line we expect full-year sales approaching $26 billion. Foreign exchange dynamics have run favorable relative to our initial projections and we are now forecasting approximately 1% of negative top-line impact from currency for the full year.

Based on our strong performance year to date we now expect US Humira operational sales growth of more than 20% and we remain on track with our previously communicated full-year guidance for international Humira with operational growth in the mid single digits. We now forecast an adjusted gross margin profile approaching 81%, impacted by stronger performance of hedged currencies in 2016.

The gross margin profile also reflects 130 basis points of impact related to the Pharmacyclics acquisition. Excluding this and the year-over-year exchange impacts, the gross margin profile is expected to improve relative to 2015 by roughly 190 basis points.

We are now forecasting R&D expense of more than 16% sign of sales, reflecting our increased R&D investments related to the Stemcentrx acquisition and the BI collaboration. And we expect SG&A to run at approximately 23% of sales.

We now forecast an adjusted operating margin profile approaching 42% on a full-year basis. We remain committed to delivering on our 2020 targeted operating margin forecast of above 50% of sales. We are now forecasting net interest expense of approximately $925 million for the full year, above our original guidance of approximately $800 million as a result of the debt we issued for the Stemcentrx acquisition. And we expect an adjusted tax rate in the 20% to 21% range in 2016.

Regarding the third quarter, we expect adjusted earnings per share of $1.18 to $1.20. This excludes roughly $0.16 of specified items and non-cash amortization and includes the dilutive impacts of Stemcentrx and the BI collaboration. We are expecting high single-digit operational sales growth, excluding a modest negative foreign exchange impact in the quarter.

So in conclusion, we are very pleased with our performance in the quarter, as we have driven strong top- and bottom-line growth while also advancing our strategic priorities and our pipeline. This puts us in a strong position to continue delivering industry-leading growth this year.

And with that, I will turn the call back over to Liz.

Thanks, Bill. We will now open the call for questions. Operator, we will take the first question.

Jeff Holford, Jefferies.

Thanks very much. I will start with a question for Rick, please. So Rick, there's clearly substantial trapped value in the Company because of the uncertainty for investors around Humira. And you have made positive steps to deal with this through building new growth drivers through R&D, aggressive business development, as well as making clear your long-term expectations regarding Humira.

Even so, despite great quarters like today, we are still seeing the shares trade at a substantial discount to peers. So is there anything else that is up for discussion in terms of how you can unlock the trapped value in the Company, whether it's through different capital allocation, separation of the oncology platform given the valuations they can carry these days, or anything else?

Second then for Mike, I wonder what does your collaboration with Bristol on Rova-T tell you about what they are thinking regarding the positioning of their Opdivo Yervoy combination in small cell lung cancer.

Then last, maybe for Rick again, we're expecting that you will be in place by Q4 to initiate patent litigation against Amgen and it will be beyond just the dosing and formulation patents that have been more widely discussed to date. Are those still reasonable expectations and do you think investors will be reassured when we see what other patents Amgen has agreed that they are potentially infringing out of the patent dance? Thank you.

Jeff, this is Rick. I will cover the first and third one and then I will have Mike cover the other one.

So on the untrapped value, what I would tell you is that if you look at our P/E, I think what you have seen -- and if you look at the range of companies in our peer group, there are obviously companies that have a much lower P/E for a variety set of reasons and there are companies where they have higher P/Es. And the median P/E is certainly above where we are, so there is certainly a level of overhang that is associated with the biosimilar uncertainty around Humira.

I think what we have laid out for investors is a clear strategy that we put in place starting back in 2013 of how we were going to deal with that. Ultimately, we have a large portfolio of IP around Humira and we certainly expect that to be able to protect the asset, as we described back in October.

We have now added to the portfolio two fundamentally differentiated new assets in 494 and risankizumab, and you are seeing some of that data play out. And so we fundamentally believe that those will allow us to ultimately be able to grow through what will obviously be at some point a biosimilar impact, both internationally as well as in the US. And then we have spent a considerable amount of time building a robust pipeline that we have shown at our R&D day and at other events that has the ability to be able to ultimately generate a very significant revenue opportunity that would allow us to grow through even the most bearish impact that's out there from an analyst standpoint around biosimilars.

So I think we have done the things that we think are important to be able to communicate and then, ultimately, build a strategy to be able to drive the business from a growth perspective, because that was the charter that we set for the Company when we launched. And I think we have demonstrated that we are capable of doing that. I think it will take some time for the litigation strategies to play out and for investors to continue to gain confidence.

Having said that, we constantly look at different kinds of alternatives that we think truly are value enhancing to shareholders, but also value enhancing to the business itself. We will explore all of those, in time, to determine whether or not they make sense. I think, if anything, we have probably been on the proactive side of going out and building new growth platforms and other kinds of things to be able to sustain the business going forward.

And we have seen the P/E improve and we would certainly expect that it will continue to improve. If you look at our performance, both currently as well as going forward as we projected it in our LRP, we will perform in the top tier of our peer groups. And we would expect that we will start to see the P/E reflect that to a greater extent going forward as the litigation strategy plays out more.

On the third question -- and I'm sure there will be other questions around the litigation. I will apologize in advance that this won't be a very satisfying answer for you, but certainly I think you'll understand why. We are now in the very active phase of litigation around Humira biosimilars and, therefore, we are not in a position where we are going to be able to provide a lot of color. And we are certainly not in a position where we can do this play-by-play strategy of how we are going to deal with every aspect of it. That just wouldn't be a smart thing for us to do.

What I can reiterate is this: back in October we outlined in detail the extensive portfolio of IP that we have for Humira and our confidence in that IP. It goes beyond any one single patent. And I can tell you we remain confident in that IP portfolio. We've made it very clear that we intend to vigorously defend all of our IP against anyone the potentially infringes it, and so that process will play out.

As I said, it's just not prudent for us now in this phase to ultimately layout in detail the play-by-play and so we are just not in a position to be able to do that.

Okay, so this is Mike; I will take the question about the BMS collaboration. I think that, first of all, we are very fortunate that after many years without much progress in the treatment of small cell lung cancer, there are very promising mechanisms coming forward: our own Rova-T, as well as the data that have been presented recently in immuno-oncology. And I think that offers real benefit for patients downstream.

What I would say about the way the two companies are thinking about these assets, I think that the speed with which the deal came together really speaks for itself. And that collaboration would not have been possible in this short period of time if we were thinking about the assets very differently.

As we have said in other settings, when one is thinking about the treatment of patients with small cell lung cancer, there are a couple of treatment goals. The first is that one needs to get disease control, because these patients present very ill with very rapidly progressing disease. And Rova-T has shown in its Phase 2 studies that it can do that and it can do that with a defined course of therapy.

We also believe that the data strongly supports that the responses with Rova-T will be durable. Now, when one thinks about other treatment goals, it would be desirable to have long-term surveillance on board after one achieves that initial strong and durable disease control and we believe that IO agents can play a real role there. And so the collaboration with Bristol will test this and we believe will provide very exciting data for patients with small cell lung cancer in the future.

Jami Rubin, Goldman Sachs.

I have a couple of questions. First, on the outlook for hep C, Rick, I think you had said earlier obviously Viekira underperformed in the US, outperformed internationally. But how are you thinking about the opportunity for next-generation hep C, given what clearly has been a more challenging pricing environment? I'm just wondering if you still stand by your $3 billion forecast.

Secondly, on Stemcentrx, when do the next two assets for Stemcentrx enter the clinic? Is that this year and for which indications? And wondering what we will see potentially at ESMO.

And Michael, just maybe if you can explain -- I'm still getting a lot of pushback from investors who are unclear about the value of Rova-T, just given that the response rate that we saw at ASCO was a bit lower than what we saw at World Lung, I think creating question marks around the durability of response. Thanks very much.

Jami, this is Rick; I will take the hep C question that you had.

Certainly, as we said in the first-quarter call, we have seen an impact of the new entrant into the marketplace. I'd say we have seen it primarily in the public channels, particularly I would say the VA, and it really boils down to a pricing strategy. And, ultimately, we decided that we were not going to match the lowest price, the eight-week price that was out into the marketplace and, therefore, we lost a significant amount of share. I mean at our peak we probably had close to 40% share and now we have share that's more down in the single-digit range.

So I'd say that the vast majority of the impact that we have seen. There's been some price impact also that played through, but the greater impact is clearly share loss in that public channel primarily. And so as we look forward to next generation, I think, as we look at the profile of that asset, obviously from a clinical performance standpoint it is everything we would've hoped it would be.

Based on the data that we've seen so far, I think it will be a highly competitive asset. It will also provide, because it is pan-genotypic, an opportunity to be able to bridge across all of the genotypes, and in particular in the United States genotype 2 and 3 where Sovaldi essentially had a strong position in the marketplace. And so this will even that playing field.

We fundamentally believe that next generation will allow us an opportunity to be able to grow our share. If you look outside the United States, as an example, and you look in countries where there is predominantly a 1b population, but even in some countries where there's a significant 1a population, our market shares in most of those countries are in I'd say on the low end 30%, on the high end sometimes as high as 70%. So we compete very well. And the profile of 1b is certainly much more of a competitive profile to the alternatives that are available outside the United States. And so I think it gives you an idea of our ability to be able to perform in those markets.

So we would hope and, I think, expect that next generation will allow us to be able to gain a share in those marketplaces. Your $3 billion, you are probably going back to the first prediction. I think we anticipate that we would get back into that range, but I'm going out of the business of predicting HCV at this point.

I think what I would say is, despite the impact that we've seen in the US from a share standpoint, I think it shows you how fundamentally strong the overall business is because we've taken a fairly substantial hit in the US on HCV, but yet we continue to perform at a very high level and offset all of that impact and are now raising guidance on top of that. So the balance of our entire business and, in particular, I'd say Humira and Imbruvica right now gives us the ability to be able to do that. And so we are not dependent upon that single asset performing at a certain level.

Mike?

So with respect to the Stemcentrx questions, Rova-T -- the objective response data for Rova-T have been very consistent, in our view, across the various reports over the last several months. They have ranged from about 39% into the mid-40% range and that really just relates to the cut of the data, whether one is using initial investigator reports or subsequent adjudicated assessments of objective response and doesn't bear on durability of those responses in any way.

The objective response rate and, importantly, the clinical benefit rate have both remained very high. The one-year survival has also been very consistent in the 30%-plus range across the data cuts, which gives us a very good feel for the durability of those responses.

In this heavily pretreated patient population, the best estimate, the most rigorous but also the highest estimate of one-year survival is about 12% and in many cases it may have to be lower than that. And so that 30% number we view as very important. So we don't see anything concerning with respect to the durability of the responses with Rova-T.

So with respect to the remainder of the Stemcentrx pipeline, there are actually five programs in the clinic now. One of those is Rova-T; two are the Pfizer partnered programs, PTK7 and EFNA4; and then there are two other programs in the clinic for solid tumor indications, but we haven't disclosed those targets or the particular tumors of interest at this point in time.

In addition to those five, there are five additional assets that will enter the clinic over the next 12 to 18 months, so by the end of 2017. And the areas of initial interest, when one looks at the tumors that we are treating today, will obviously be small cell. There is also a focus on ovarian cancer and triple-negative breast cancer, among others.

Chris Schott, JPMorgan.

Great, thanks very much for the questions. First one is just can you elaborate a little bit more on biosimilar dynamics in Europe now that we've had some additional experience with both Remicade and early with Enbrel? Just how are volume and price dynamics shaping up there and then the impact to Humira?

Second was on Humira and maybe the derm business. It sounds like a very strong performance in the quarter, but the environment overall seems to be getting more competitive here with the IL-17 seeing some nice uptake. Are you seeing any impact to the business from these competitors? And just how do you think about the outlook for that part of the franchise over time? Thanks very much.

Chris, this is Rick; I will cover those. So let me start with the biosimilar impact, because as you said we've seen biosimilars -- certainly with the Remicade biosimilar -- in the market for quite some time and now we're in the early phases of the launch of Enbrel biosimilars, particularly in the European areas. So if you look at Remicade, there are Remicade biosimilars now in, roughly, 60-plus countries, like 62 countries. About 50 of those, a little more than 50 of those, have pricing and reimbursements so they are actively involved in marketing the product in those countries.

We've studied it very carefully. If you look at the overall share of biosimilars, it's less than 5%. It's about 4.5%. If you look at their share of Remicade, it's about 20%, 22%, something like that.

It varies a lot so I would say it's very high in tender-based countries like a Norway, Denmark, Poland is an example. Very high market share in those.

If you go more into the traditional Western European markets, more like an the 20% to 25% share of the Remicade market, and the discounting has played out to basically range in the tender countries fairly high. I'd say that 50% to 70% kind of range from a discounting standpoint. Then the rest of the market probably in that 30% to 40% kind of range.

It hasn't had any impact on us at all. Remicade, because it is an infusion product, in most of those countries doesn't compete in the same space that we compete in.

So then you move over to Enbrel. Enbrel is approved now -- the Enbrel biosimilars are approved in about 32 countries. There's pricing and reimbursement in about a third of those countries right now.

We've seen much lower discounting than what we expected, I'd say. It ranges from as little as low single-digit discounting to maybe up in the 30% to 35% range in non-tender countries and kind of the high 30%s to high 50%s in the tender countries.

Again, it's playing out similar to the way we saw the Remicade biosimilar. So in the tender countries they are having higher share, like the Norways and the Denmarks. Germany, Sweden single-digit kind of share, so really no substantial market share impact. But it's too early in the process for us to see that.

I'd say the strategy that we anticipated and the one we've put in place seems to be working well, but it's the early rounds. And you can see it in the performance of the business. You can see Humira is continuing to grow in the international markets and as you back out the Venezuela impact, you can see that it's actually growing in the 6% or so range, 6.2% range. And so we are continuing to see good, strong growth in those markets.

And so I'd say the early rounds are working like we had anticipated they would, but we need to give it some more time and see how it plays out. It is a good opportunity for us to see how our strategy is working and be able to modify that strategy. So that's essentially the biosimilar impact that we see. Nothing different than what we had expected.

Now let me move over to derm and the impact on 2017. I would say, overall, we are very happy with our performance in the derm space. If you look in the US -- I will talk specifically about the US -- we've seen TRXs grow, in fact accelerate over the course of time. If you go back to the early part of 2015 or even look at the average across 2015, we had low double-digit TRX growth. In first and second quarter that's accelerated to like 17% to 18% TRX growth in derm and so we are seeing nice, strong growth in that segment of the market.

If you look at our revenue, a very similar kind of profile. We had strong double-digit growth and now it's accelerated fairly dramatically, probably about 10 to 15 points above what it had been running at.

If you look at market share, our overall market share is pretty stable to maybe slightly down 1.5% or so. As we analyze it, it is really driven extensively by the Otezla experience where we are seeing a lot more patients, particularly moderate and sometimes mild patients, coming into the category. And so, therefore, the category is growing faster and so that dilutes our market share position.

When we pull Otezla out and we look at our market share, our market share looks relatively stable. In particular, if you look at PSA, our overall share has been stable in the US at about 32%. If you look at rheum PSA, it has actually increased about 3 points, which is the larger part of the PSA market. It's about 75% of the overall PSA market. And even the AS PSA has increased about 2 points.

Psoriasis, as I said, it's down about 1.5 to 2 points in total, but it's more driven by Otezla. So, overall, we feel very good about how the business is performing across all the indications, but certainly in derm as well.

Marc Goodman, UBS.

I was hoping you could give us a flavor for managed care coverage for the key products for 2017. Obviously, specifically Humira. And then can you just give us an update on how you're thinking about AndroGel these days?

Well, managed care, we are in really the thick of the negotiations for the 2017 and 2018 timeframe, so I'm not necessarily going to talk about a lot of specifics because we are in active negotiations on a number of those contracts. But what I would say is Humira has typically had a very, very strong position on managed care and we are not anticipating anything different going forward, but it would be premature to basically talk about a lot of specifics around the contracting. I'd say we feel good about how it is sorting out.

On AndroGel, I guess I'm trying to better understand your question. Are you thinking more about follow-on products or are you thinking about the durability of it?

Yes, both.

Well, we don't necessarily have a follow-on product. We had some programs that we had been working on that we ultimately decided to stop and so it will be running this franchise out. We are treating it as a typical LOE kind of an asset and its performing better than what we had expected, but ultimately, there will come a time where it will suffer more impact from generic competition.

And so we are basically dealing with it as we would deal with most assets, smaller molecule kind of asset LOEs, where we take a large part of the cost out of the product and manage it for maximum profitability.

Marc, we do continue to see market shrinkage. You know, we've been very pleased with way that the share has gone in there and obviously it's been a nice story this year, but we got to watch how this thing plays out as the LOE dynamics proceed.

Andrew Baum, Citi.

Thank you. You have obviously done two very substantial deals within the oncology segment with Pharmacyclics and Stemcentrx. Could you just outline what your appetite is and how you see your oncology franchise broadening out over the next few years?

Is it now pausing to integrate the two transactions and set up the trial programs you need? Or is the appetite still there and you see additional opportunities to address other facets of oncology?

Andrew, this is Rick; I will cover that and maybe Mike can jump in on some specifics.

When we went into -- when we made the decision that the core future growth franchise on top of immunology was going to be oncology, we made a decision that we would invest in a way to try to build leadership positions in certain areas where we thought we had core competencies that were complementary to being able to perform those areas. Specifically, we started with hematological oncology, based on the assets that we had internally as well as the opportunity that existed with Pharmacyclics. Our goal was to basically build a position where we thought we could drive to a leadership position within that category.

If you look at the assets we have today, including Imbruvica and where we think Venclexta will be able to expand to, it would tell us that we should have an opportunity to be able to bring forward innovative therapies in roughly 65% of the overall market in hematological malignancies. And I would say that is an area where we feel comfortable with what we have.

Now having said that, if we found unique opportunities, I would say particularly in the acute leukemia side, assets or technologies or a drug that we thought was particularly attractive in an area where we didn't think we had a strong asset already, certainly we would pursue that kind of an asset. But I'd say from a platform standpoint, we feel very good about what we have in hematological malignancies, both internally as well as the addition of Pharmacyclics that we did a year or so ago.

On the solid tumor side, as we've said before about Stemcentrx, one of the things that was attractive to us is we have a number of efforts internally to be able to identify new targets and so we have an effort internally to be able to do that. We obviously have a collaboration with Calico and part of the work that they are doing is to identify new oncology targets.

But we wanted a more fundamental base form for solid tumors and one of the things that attracted us to Stemcentrx is we believe they have that. We're excited about that opportunity. Mike talked earlier about the number of candidates that will be moving out of that platform and I think it's impressive what they've accomplished.

So that has built what we fundamentally believe will be the core platform for us in solid tumors, in addition to what we already have. We certainly continue to look for, again, now more individual kinds of technology plays or assets that might be complementary to that, but we are not looking for another big platform.

I don't know, Mike, did you want to add anything?

I agree with that, certainly. When we look at what we've built in terms of the hematological malignancies platform, I think we have the assets we need to drive standard of care; not only in the short term, but also in the longer term. And then when one considers what we've built on the solid tumor side, both internally through Stemcentrx and through our partnership with Calico, we feel good about the pipeline opportunities that we will be able to bring forward over the course of the next several years.

We will always keep our eyes open, particularly for earlier technologies, earlier programs, things that can add to those efforts, but we feel good about the engine we have built.

Mark Schoenebaum, Evercore.

I had a couple questions. The first is related to elagolix. There are competitors on the horizon; you are well ahead.

There is a drug out there I think from Takeda that has been licensed to be developed in the US and the owners of that drug say it's better than elagolix because it is QD, once a day, and it's more potent. And most importantly, you can co-formulate it with add back. So I would love for you to give us your view on add back. Is it attractive to have a co-formulation? Are you guys at a disadvantage or not?

Then the other question I had was kind of an off-the-rails question, but I know Henry joined you guys a while back and a lot of people on the Street say great things about him. I'm just wondering will he ever be investor-facing. Thank you.

Okay. Mark, this is Rick; and I'd say we feel very good about Henry. I will talk myself, specifically I feel very good about having Henry as part of the leadership team and certainly, over time I think we will bring Henry in. It will be most relevant when we are talking about those kinds of areas where he has direct responsibility for.

But Henry has already become an integral part of the leadership team and has contributed significantly.

Mike, do you want to cover elagolix?

Certainly. With respect to elagolix, as you pointed out, Mark, we have substantial lead having completed our two pivotal Phase 3 studies and already being in the process of collecting longer-term data that are necessary to define benefit risk. And we think that is a real advantage for our program and one that we're going to continue to drive as we drive forward, for example, with the add back program, to further enhance the understanding of how we can use elagolix to treat endometriosis and uterine fibroids.

With respect to some of the issues you brought up on competitive programs, we don't really view potency as a primary driver here. In fact, the most potent agent in this axis is Lupron and the problem is, in fact, the degree to which that shuts down the axis. We are trying to achieve a fine titration of dose and we believe elagolix has the properties to allow us to do that.

With respect to co-formulation with add-back, there's nothing that would prevent us from co-formulating with add-back as well. And we believe over time there may be a number of strategies that could be used to protect bone and so we will have flexibility to employ many different strategies.

So we feel very good about the position of elagolix. We think it is an important treatment option and we think that it's going to make a real impact on endometriosis.

With respect to relative advantages of a q-day formulation, I think that again depends on the dose one ultimately selects. And I think when we look at the overall profile of elagolix, we remain convinced that it's very strong.

Can I say one more thing? Sorry, I wasn't sure if I was muted. One shout out to Liz, congrats on getting the IR seat. Thanks for all the help. She's doing great.

Thanks, Mark. Operator, we will take the next question.

Vamil Divan, Credit Suisse.

Great. Thanks so much for taking the question; so maybe two. You touched on this a little bit at your R&D day, but just around multiple myeloma and some of the work you guys are doing there, and you touched a little bit on Venclexta moving that one in there. A little bit more just thoughts around that given such a competitive space and what you see as the advantages moving into there.

Then the other one which you didn't touch much on at the R&D day, and I think it's overlooked a little bit, is veliparib. There's been a lot of discussions around the PARPs recently. Just curious if you can kind of maybe refresh us on what you see as the competitive advantages that you may hold or where that's going to fit in relative to the other PARPs that are in the market or in development. Thanks.

Okay, so the first part of the question related to multiple myeloma and we have the potential to pursue myeloma with a number of assets in our portfolio. Venclexta has clear potential there and we are advancing that program rapidly, as we mentioned during our opening remarks. Imbruvica also has potential, as do a number of the molecules in our pipeline.

It is a competitive space. One can prolong survival to a much bigger extent today than was possible a decade ago, but we still don't have curative therapies. Patients ultimately fail therapy and progress, which means that we need new mechanisms that aren't cross-reactive that provide durable disease control. And we think we have a number of those in our pipeline.

So we are aware of the competition, certainly, but we think we have therapies that will further the standard of care in that disease and we'll be driving clinical programs forward to demonstrate that.

With respect to veliparib, veliparib is a molecule that is an important part of our overall oncology efforts. It is in Phase 3 studies across a range of tumor indications.

We have a bit of a different hypothesis around the way veliparib should be used than perhaps some of the others who are developing PARPs. We are not focused solely on the use in patients with germline BRCA mutation or other HRD-deficient tumors. We are exploring the hypothesis in our Phase 3 program that PARP can augment DNA-damaging chemotherapy.

Essentially that the first hit doesn't have to come from a genetic hit. It can come from a therapeutic hit that is DNA damaging, which would increase the importance of DNA repair mechanisms.

That hypothesis is being tested in a range of Phase 3 programs in non-small cell lung cancer, in breast cancer, and in ovarian cancer and those studies will start to readout in 2017. We will have a number of important data readouts which will tell us the role that PARP can play there.

So we haven't focused on it as much in recent investor days and that is largely because it is in a quiet period. Where the studies are up and running we are generating the results. But you will hear a lot more about PARP in 2017.

David Risinger, Morgan Stanley.

Thanks very much. I have two questions. First, with respect to payors, they are starting to talk about trying to contract for individual indications. And obviously, one area they might be thinking about is alternatives to Humira for certain indications from new drugs that have essentially better profiles than Humira in certain indications. Could you just comment on your perspective on contracting for individual indications in autoimmune disease?

And then second, Rick, I was hoping that you could provide a little bit more detail on the sort of timing and specifics surrounding the patent litigation steps. Obviously, you are not going to comment on individual patents or individual patent strategies, but as I understand it, there will be -- immediately after Amgen gets approval of its biosimilar, immediately after that occurs there will be a wave of patent litigation that kicks in. And I was just hoping that you could provide a little bit more perspective on how investors should think about that and what they should be expecting. Thank you.

This is Rick; so let me start with the payor question that you had. Indication-based pricing, I think, first evolved primarily in the oncology space. And it was driven, I think, by certain efforts to say -- you will have an oncology agent that has very strong efficacy in a certain disease and might have significantly lower efficacy in another disease. Why would I pay the same for this strong efficacy as I would for relatively modest efficacy? I think that was how the concept originally evolved.

As we look at Humira and we look across all of the major indications at least -- with every single indication there's obviously some variation between the competitive profiles. But I'd say, in general, Humira tends to perform across those broad set of indications in the top tier and so that is how we view it. So indication-based pricing would be something that we think is very applicable for this specific asset and this particular class.

We haven't seen it to take off much prior to this and we will have to see how it plays out over time.

Again, there are a lot -- it may sound to you like it's a fairly innocent issue around timing and the steps and what should play out, but I would tell you it's not that from a litigation standpoint. And so I'm just going to need to take the same position I did before.

We are not in a position to be able to give you a lot more color. Certainly we have made it clear what our position is going to be and I think that will become clear as the steps play out, but I can't give you a whole lot of color on the timing or what the alternatives would be.

Gregg Gilbert, Deutsche Bank.

Thanks, I want to go back to Bill's comments on Humira growth from the beginning. Clearly prescription growth has been very robust, but you are also enjoying a really nice pricing tailwind. And I think the net price benefit you saw in the US was about 10%, which required I think a 20%-plus lift -- price increase over the year-ago period.

So I'm curious how you would expect that dynamic to play out, both list price increase magnitude and frequency going forward, the ability to realize net price, and how you are thinking about that. It seems like a very robust, high set of numbers for such a big product.

Lastly, Bill, since we don't have a 10-Q, perhaps you could provide cash flow from ops and receivables if you have those handy. Would appreciate that. Thank you.

Sure. Gregg, I think probably the best thing to do is dissect the US number on a quarter for you and I think that will give you some -- a good sense of the overall dynamics of the brand. Then I will back up and talk a little bit about the business in general.

Obviously, the brand is performing very, very well in the US. We grew at 26.7% in the Q. Script trends, the way we see them, were in the midteens for the quarter. Our price was up -- it was actually up in the single digits. And then, as I said in my comments, we did see a modest impact from differences in customer order pattern.

Again, we run this business at less than half a month inventory, but it gets a little tough to call at various times, and we did see a little bit of demand differences between the Q. We had a little bit lower inventories in the second quarter of 2015 relative to 2016.

So I think the way you've got to think about this is midteens growth from script and single-digit price. When you add those up, you can pretty much get to the 20% number that we have guided to.

From an overall price standpoint, look, I would say if you back up and look at our growth on the quarter of 18%, the majority was volume. Across the total book of business we had a price impact of less than 4%.

So the strategy that we have actually employed for the business, and certainly with our new product launching, is this is going to be a product -- a company that is fueled by volume and not price. Obviously price, we do have an opportunity in certain markets to take it, but I would not say this is a company that is heavily dependent on price.

Then, as we look out over the LRP, we tend to scale down our price expectations in the US because we think that's the prudent way to model.

The only thing I would add is, on the inventory discussion that Bill had, it's important to keep in perspective both periods were under a half a month. But even relatively small variations in a day here or a day there can have some impact on the growth rate. So what Bill was describing is that the prior period had an inventory level that was below 0.5, but it was lower than what the inventory level was this period, which was also below 0.5.

From a cash flow and receivables standpoint, again we are still working on the Q so I'm not going to go into specifics there, other than to say that cash flow remains very robust. And, frankly, from a receivables standpoint, we are collecting fine. But I can't give you specifics at this point in time.

Thank you.

Thanks, Gregg, and that concludes today's conference call. If you would like to listen to a replay of the call, please visit our website at AbbVieInvestor.com. Thanks again for joining us.

Thank you, speakers. That concludes today's conference call. Thank you all for joining. You may now disconnect.