艾伯維 (ABBV) 2016 Q3 法說會逐字稿

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

I would now like to introduce Ms. Liz Shea, Vice President of Investor Relations.

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.

Before we get started I want to remind you that some statements made today are or may be considered forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements.

Additional information about the factors that may affect AbbVie's operations is included in our 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 the 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. So with that I will now turn the call over to Rick.

Thank you, Liz. Good morning, everyone, and thank you for joining us today. This morning I will discuss our third-quarter performance, recent operational highlights, and also share some high-level perspective regarding our growth profile for 2017. Mike will then provide updates on our recent advancements across our R&D programs and Bill will provide additional color on the quarter and our outlook for the remainder of this year.

2016 is shaping up to be another very strong year with operational revenue growth year-to-date of nearly 16% and EPS growth through three quarters of 14.6%. This follows a very strong 2015 where we delivered operational revenue growth of 22% and EPS growth of 29%. Based on our confidence in the performance of the business going forward, today we will provide a view of 2017 which will once again demonstrate strong underlying performance.

Our third-quarter results were ahead of our expectations including adjusted earnings per share of $1.21, representing growth of 7.1% versus the third quarter of 2015. Our results included global operational sales growth of 8%, reflecting continued strong performance from our on-market business led by Humira and Imbruvica, as well as other products in our portfolio.

Humira continues to drive robust performance, delivering global operational growth of more than 12% 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 the three major market segments.

In rheumatology, Humira continues to hold the number one market share position with year-over-year share gains. In dermatology, we are seeing mid-teens volume growth and we are maintaining a very strong number one market share position with a 15-point lead over the number two competitor. And in GI we continue to see strong double-digit volume growth.

Internationally, Humira continues to maintain its strong position, despite indirect biosimilar competition which is tracking in line with our expectations.

We also continue to deliver on our oncology strategy. Imbruvica's performance in the quarter with outstanding with third-quarter global revenues to AbbVie of just over $500 million. We are continuing to drive strong uptake in CLL.

In the second line plus CLL market we continue to hold the leadership position with more than four of 10 patients starting treatment with Imbruvica. And in the frontline setting our market share position is steadily increasing, with nearly one out of five patients now starting Imbruvica as first-line therapy.

While we are pleased with this performance, we are still in the very early stages of our trajectory in the frontline setting. We're making progress in a number of important comparative and combination studies evaluating Imbruvica monotherapy and competition therapy versus regimens such as BR and FCR, often considered the gold standards in the treatment of CLL. These studies are being run in different station segments, including young and fit patients and the watch-and-wait population, and the results will add significantly to the breadth of the data supporting Imbruvica and will provide physician with more evidence of the compelling clinical benefit in the frontline setting.

Additionally, in other approved indications including mantle cell lymphoma and Waldenstrom's, Imbruvica holds the market-leading position in the relapsed/refractory segments. In geographies outside the US, Imbruvica continues to experience strong adoption in Europe and Canada and has recently been launched in several new markets including Japan.

While CLL clearly represents the largest revenue contributor to Imbruvica's growth over our long-range plan, new indications will also augment our performance. To that end, there is potential for several Imbruvica regulatory submissions and approvals over the next few years, including relapsed/refractory marginal zone lymphoma, which is currently under regulatory review; chronic graft versus host disease, which we expect to submit for approval in the first half of 2017; frontline mantle cell lymphoma, which will add to our existing indication in relapsed/refractory MCL; as well as relapsed/refractory follicular lymphoma and frontline diffused large B-cell lymphoma.

For several of these indications, Imbruvica will be the only approved treatment, underscoring the importance of this therapy for patients. Collectively, these new Imbruvica indications represent a significant incremental revenue opportunity for AbbVie. Mike will provide an update regarding some upcoming data flow for several of these potential new indications.

Earlier this year we received approval for Venclexta monotherapy in patients with relapsed/refractory CLL who harbor the 17p deletion, a relatively small subset of the refractory patient population. In partnership with Roche Genentech, we are continuing to make good progress with our launch within this indication, with Venclexta now added to the NCCN guidelines and continued progress with formulary access. Physicians are gaining experience with the therapy and we look forward to additional data next year in the broader relapsed/refractory setting.

We also saw a strong performance from several other products in our on-market portfolio including Duodopa, Creon, and international Viekira.

In addition to our strong financial results, we have continued to advance our late-stage pipeline. Last week at the ASRM meeting we presented positive data on Elagolix in endometriosis, including additional results from our two pivotal studies. Results from these trials will support our US regulatory application, which is on track for submission in 2017.

We are nearing the completion of a registrational program for our next-generation HCV combination, which is on track for commercialization next year. Based on the data we have shared to date, we believe our next-generation HCV therapy will address the remaining unmet medical needs within this market with high SVR rates across genotypes with eight weeks of therapy.

We are making good progress with the risankizumab program, which is in development in partnership with BI. We recently completed ahead of schedule patient enrollment for the pivotal studies in psoriasis with data from three of these trials expected in 2017.

We recently launched Zinbryta for relapsing/remitting multiple sclerosis and are in the early stages of our rollout in collaboration with Biogen. We have also continued to advance assets from the Stemcentrx pipeline. We recently started a basket study evaluating Rova-T in several neuroendocrine tumors where DLL3 is expressed and we also initiated a regimen selection study for Rova-T in frontline small cell lung cancer.

Based on our performance year-to-date, we are raising our full-year 2016 guidance to $4.80 to $4.82 on an adjusted basis, reflecting growth of 12.1% at the midpoint. Over the past several months, we've received a lot of interest regarding our expectations for 2017. While we're in the midst of our annual planning process, based on the continued strength of the business and especially Humira and Imbruvica, we are now at a point where we can provide some high-level direction regarding our top- and bottom-line growth expectations for 2017.

We expect low double-digit operational growth in 2017. 2017 will be another important year of investment in R&D as we expand our leadership position in immunology and hematological oncology and also build our position in solid tumors. As a result, we expect EPS growth of roughly 13% to 15% from the midpoint of our new 2016 guidance range.

This level of performance positions AbbVie to be among the industry leaders for both revenue and EPS growth once again next year. We will outline our detailed 2017 guidance on our fourth-quarter earnings call in January.

Since our inception in 2013, we have delivered strong financial results and we are well-positioned to deliver industry-leading growth, again in 2017, for the third consecutive year. We continue to be proud of our strong execution and we remain committed to our long-term strategic and financial objectives, which we outlined for you in October 2015.

AbbVie represents a unique investment opportunity, offering both compelling growth along with a strong return of capital to investors including a rapidly growing dividend. To that end, today we announced our Board of Directors declared an increase in our quarterly cash dividend from $0.57 per share to $0.64 per share, an increase of over 12%, beginning with the dividend payable in February 2017.

We view the dividend as an important aspect of our investment identity and as a sign of our confidence in the business going forward. Since the Company's inception in 2013, AbbVie has increased its dividend by more than 60%.

In summary, the strategy we put in place puts us in a position to deliver strong top- and bottom-line performance. We've established growth platforms in some of the largest and most attractive segments and we've built a compelling pipeline in these areas, which will contribute significantly to our performance in the years to come.

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

Thank you, Rick. Once again, we had a very productive quarter in R&D with significant progress across a number of programs. Today I will highlight key pipeline events that occurred during the quarter, as well as some of our upcoming milestones. I will start with oncology, an area where we are advancing our pipeline in both hematologic malignancies and solid tumors.

Turning our attention to solid tumors, we continue to make good progress with Rova-T. We recently began enrolling patients in two new studies, a Phase 1, 8-arm basket study in a broad set of neuroendocrine tumors and a Phase 1/2 regimen selection study in frontline small cell lung cancer. We expect to start seeing data from both studies in the second half of next year.

The Rova-T program in relapsed/refractory small cell lung cancer is progressing well. We continue to see good results from the ongoing Phase 1 study, with patient still alive more than two years after receiving just two doses of Rova-T.

Enrollment in the TRINITY study, our confirmatory third-line registrational trial in small cell lung cancer, is also going very well and we expect the study to be fully enrolled within the next month. Data from TRINITY will be available next year, which will trigger the submission of our regulatory dossiers.

We are also on the cusp of starting two additional Rova-T studies: [MARU], the Phase 3 registrational trial evaluating standard chemotherapy followed by Rova-T in the frontline setting and the Phase 1/2 combination study evaluating Rova-T with Opdivo and with Opdivo and Yervoy in small cell lung cancer. We expect both trials to be up and running by the end of the year.

We are also making good progress with other assets from the Stemcentrx pipeline. In addition to Rova-T, we have four assets in the clinic and are on track to transition up to five additional programs into the clinic over the next year. This will add to our growing oncology pipeline of more than 35 late preclinical or clinical stage assets.

I will now turn to our hem-onc programs. In the quarter we announced our US regulatory submission of a supplemental new drug application for the use of Imbruvica in previously-treated patients with marginal zone lymphoma, a slow-growing form of non-Hodgkin's lymphoma which accounts for roughly 12% of NHL cases. There are currently no approved treatments specifically indicated for patients with marginal zone lymphoma and we expect a regulatory decision in the first half of 2017. The data that supported this regulatory submission will also be presented at the upcoming ASH meeting in December.

Additionally, at ASH we will present data from the registration-enabling trial in chronic graft versus host disease, as well as data from several other Imbruvica studies across multiple blood cancers, including diffuse large B-cell lymphoma and follicular lymphoma. We have also made significant progress with the development of Venclexta, which was approved earlier this year in the US under priority review for its first indication, as monotherapy in patients with relapsed/refractory CLL with the 17p deletion mutation, a small but medically important segment of the CLL market and an important first step for this exciting new therapy.

Earlier this month we received Canadian approval for Venclexta in previously-treated CLL patients with the 17p deletion mutation, as well as in patients with no other treatment options regardless of their mutational status. We also received a positive opinion from the European CHMP for the treatment of relapsed/refractory CLL patients with 17p deletion or TP53 mutations. The CHMP also recommended approval of Venclexta for patients who have failed both chemo immunotherapy and a B-cell inhibitor, regardless of mutational status.

Venclexta has demonstrated strong efficacy, driving deep levels of response and durable disease control, both as monotherapy and in combination with Rituxan in patients with relapsed/refractory CLL. Earlier this year, Venclexta received the FDA's breakthrough therapy designation for use in combination with rituximab for the treatment of patients with relapsed/refractory chronic lymphocytic leukemia.

We're expecting data from the MURANO study in the first half of next year, which will support a broader label in relapsed/refractory CLL. The breakthrough designation and the upcoming MURANO data are important milestones for Venclexta that will expand use to the broader relapsed/refractory CLL population.

We remain excited about the long-term potential for this molecule and believe that Venclexta will be effective across a range of blood cancers. We are particularly encouraged by the opportunity in AML as the data generated to date have demonstrated clear signs of efficacy. Earlier this year Venclexta received its third breakthrough therapy designation for use in combination with hypomethylating agents for the treatment of patients with AML who are ineligible to receive standard induction with high-dose chemotherapy.

We are moving quickly with Venclexta's development in AML and expect to begin our Phase 3 programs by the end of the year. At the upcoming ASH meeting we will also present Venclexta data in a range of tumor types, including Phase 1 safety and efficacy data in both AML and multiple myeloma, as well as results from the mid-stage CONTRALTO and CAVALLI studies in follicular lymphoma and B-cell non-Hodgkin's lymphoma, respectively.

As we look ahead to 2017 there will be several additional key data readouts from our hematologic oncology portfolio that could enable registration of both Imbruvica and Venclexta in new indications. For Imbruvica, there are a number of planned interim analyses that could potentially lead to regulatory filings, including data in relapsed/refractory follicular lymphoma, frontline diffused large B-cell lymphoma, and in frontline mantle cell lymphoma. And for Venclexta, as I mentioned, we will see data from the MURANO study, which will support a broader Venclexta label in CLL.

Now we will move on to our immunology programs, where we continue to make great progress with our two late-stage immunology assets, risankizumab and ABT-494. As Rick mentioned, we have fully enrolled the Phase 3 psoriasis program for risankizumab and we will begin to see data from these pivotal studies toward the end of next year.

Interest in the psoriasis program has been very strong as evidenced by the fact that we fully enrolled the four Phase 3 studies in just 7 1/2 months, well ahead of our planning assumptions. The registration trials in Crohn's disease are expected to begin next year and we also intend to move risankizumab into late-stage studies in both ulcerative colitis and psoriatic arthritis by the end of 2017.

The registration-enabling studies for ABT-494 in RA are also progressing very well and we remain on track for data readouts from these Phase 3 studies during the first half of 2018. The development program for ABT-494 in gastrointestinal disorders is also progressing well with a Phase 2 study in Crohn's disease ongoing and a Phase 2 study in ulcerative colitis getting underway in the third quarter. Data from the Crohn's study should be available in the first half of 2017 with Phase 3 Crohn's studies starting later in the year. We also recently began a Phase 2 study to evaluate our oral selective JAK1 inhibitor in atopic dermatitis.

I will now move to virology, where we are nearing the completion of our registrational program for our next-generation HCV regimen. This program was designed to investigate a faster path to cure for all genotypes of HCV and to address treatment areas of continued unmet need. Based on the data we presented today, our once-daily pangenotypic regimen is highly effective and has the potential to cure the majority of HCV patients in just eight weeks.

The FDA recently granted breakthrough therapy designation for our next-generation regimen for the treatment of patients with chronic HCV who have failed previous therapy with directly-acting antivirals in genotype 1. This designation is an important step in our efforts to bring our pangenotypic regimen to market.

At the AASLV the meeting in November, we will be presenting pivotal data from our next-generation regimen, including results from eight-week cohorts in non-cirrhotics as well as data in patients who have failed prior DAA-containing regimens. We expect to submit the NDA for our next-generation HCV regimen to the FDA by the end of this year and file a marketing authorization application with the EMA in the first quarter next year and remain on track for commercialization in the US in 2017.

We believe that AbbVie's pangenotypic, once-daily, ribavirin-free HCV therapy will be competitively positioned and we will be able to address the remaining unmet medical need within this market.

Finally, in the area of women's health we are nearing completion of our Phase 3 endometriosis program with regulatory submission planned for 2017. The Elagolix clinical development program includes the largest clinical trials conducted to date in endometriosis with nearly 1,700 patients in two pivotal trials.

At the ASRM congress earlier this month we presented detailed results from two pivotal studies demonstrating that Elagolix reduced menstrual and non-menstrual pelvic pain associated with endometriosis compared to placebo. We also presented research on the economic and healthcare costs associated with endometriosis and endometriosis-related surgery in women in the United States. These data support AbbVie's continued efforts to pursue a regulatory filing an Elagolix as a potential new treatment option for the most prevalent symptoms of the disease.

In addition to the endometriosis program, we have Phase 3 studies underway in uterine fibroids. This program is investigating the effect of Elagolix on heavy bleeding related to this highly-prevalent condition. We anticipate beginning to see data from this Phase 3 program late next year.

In summary, we are very pleased with the progress of our pipeline and are on track for further advancements in the remainder of 2016 and into 2017. With that I will turn the call over to Bill for additional comments on our third-quarter performance. Bill?

Thanks, Mike. This morning I will review our third-quarter performance and provide an update on our outlook for 2016. In the quarter we delivered strong operational sales growth of 8%, excluding a little more than 0.5% of unfavorable impact for foreign currency. We exceeded our adjusted earnings per share guidance, delivering growth of more than 7% compared to the third quarter of 2015.

Humira delivered another quarter of strong sales growth with global sales of more than $4 billion, up 12.1% operationally. Globally, we continue to see strong volume growth across all therapeutic segments.

In the US, Humira sales increased 16.7% compared to the prior year. The growth rate in the quarter was negatively impacted by 4 points due to higher customer ordering patterns in the prior year, a reversal of what we experienced with second-quarter growth rates. Normalized for this, Humira performance in the quarter exceeded 20% comprised of low teens prescription growth and single-digit price. Wholesaler inventory levels remain below half a month across all periods.

On a year-to-date basis, Humira US sales growth exceeds 24%. For the fourth quarter, we forecast sales growth in excess of 20%, which will contribute to our full-year forecast of above 20%.

International Humira sales were more than $1.4 billion in the quarter, up 4.5% on an operational basis. Biosimilar Remicade has not had a material impact on performance and the Enbrel biosimilar continues to perform in line with our previously communicated assumptions. We continue to forecast Humira international operational sales growth in the mid single digits for the full year.

Humira's unique product profile and AbbVie's strong commercial execution has made Humira the number one prescribed biologic and we continue to see strong momentum for Humira as market leader around the world.

Global Imbruvica net revenues in the third quarter were $501 million, up nearly 65% over prior year, driven by increased penetration in relapsed/refractory CLL and other indications, as well as continued uptake in first-line CLL, where we launched earlier this year.

Global Viekira sales in the third quarter were $378 million, down versus the prior year. Our international business delivered operational sales growth of nearly 31% in the quarter, driven by new launches and continued uptake. In the US, as we communicated earlier this year, we have seen market share loss and some price erosion due to the entrance of a new competitor in the market.

Global sales in Duodopa, our therapy for advanced Parkinson's disease, grew 21.4% on operational bases in the quarter, reflecting robust international growth and a modest level of US sales. We also saw strong operational sales growth in the quarter from Creon, which was up 16.6%.

We are in the early stages of our commercial launches of Venclexta and Zinbryta, which had modest sales impact in the third quarter. We have begun our commercial rollout of Venclexta with our first priority being to ensure adequate physician training and to give physicians an opportunity to gain experience with the dosing ramp.

As we have outlined, our initial indication for Venclexta, relapsed/refractory CLL patients with the 17p deletion, represents a fairly small market segment estimated to be roughly $300 million. Imbruvica currently holds a strong market leadership position in this segment with well over 50% share.

However, Venclexta is an asset that offers significant growth potential over the longer term. In the next several years we expect to augment our label to address the broader relapsed/refractory CLL patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies.

The next major milestone for Venclexta will be the submission of data from the MURANO trial to regulatory authorities, which will expand the addressable patient population for Venclexta to all relapsed/refractory CLL patients, a much larger patient population. This will add meaningfully to Venclexta's growth beginning in 2018.

Additionally, we expect further augmentation of the Venclexta label beginning in 2019, with a potential for first-line data and expansion into additional blood cancers.

In August, we launched Zinbryta in the US. The Zinbryta label requires the establishment of an appropriate REMS program and we are on track with the required physician certification and training. While we are very early in the launch, we are encouraged by the level of physician and patient interest.

For example, in the US more than 80% of our high-priority physicians have been certified through the REMS program, enabling them to begin prescribing. Based on the approved labeling, we expect Zinbryta to be used as a third-line agent offering a unique mechanism of action, compelling efficacy, and convenient dosing.

Turning to the P&L profile for the quarter, the adjusted gross margin was 80.7% 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 110 basis points of unfavorable impact related to the Pharmacyclics acquisition, including the profit transfer for Imbruvica, which is booked as cost of goods sold. Adjusting for these impacts, the gross margin profile improved by approximately 170 basis points versus the prior year.

Adjusted R&D was 16.5% of sales, supporting pipeline opportunities in oncology, immunology, HCV, and other areas. Adjusted SG&A was 21.4% of sales in the third quarter, down 160 basis points from the prior year as we drive operational deficiencies while maintaining our investments in our growth brands.

Adjusted operating margin was 42.8% of sales, down 210 basis points relative to the third quarter of 2015. Excluding the negative impact of exchange, the operating margin profile improved 120 basis points versus the prior year. We remain committed to achieving an adjusted operating margin target of greater than 50% of sales by 2020.

Net interest expense was $250 million in the quarter and the adjusted tax rate was 19.9% in the quarter. Third-quarter adjusted earnings per share, excluding non-cash intangible amortization expense and other specified items, was $1.21, up 7.1% year over year.

Moving on to our outlook for the remainder of the year. Based on our strong business performance year-to-date and our confidence in our momentum going forward, we are raising our 2016 adjusted EPS guidance range to $4.80 to $4.82, reflecting adjusted EPS growth of 12.1% at the midpoint. We are also updating our 2016 GAAP EPS guidance range to $3.74 to $3.76, which includes $1.06 per share of non-cash intangible amortization expense and other specified items.

Regarding the fourth quarter, we expect adjusted earnings per share of $1.18 to $1.20. This excludes roughly $0.22 of non-cash amortization and other specified items. We expect high single-digit operational sales growth with minimal foreign-exchange impacts in the quarter.

In closing, we delivered strong performance in the quarter. We have driven strong top- and bottom-line growth, while also advancing our strategic priorities and our pipeline. And as Rick outlined, we are well-positioned for strong growth again in 2017 as we expect to deliver low double-digit operational revenue growth and EPS growth of 13% to 15% from the midpoint of our new 2016 guidance range.

This level of performance should place us among the industry leaders for both revenue and EPS growth once again next year. And underscoring our confidence in the business going forward, today we announced a 12.3% increase in our quarterly cash dividend beginning with the dividend payable in February 2017.

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

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

(Operator Instructions) Jami Rubin, Goldman Sachs.

Thank you. Rick, couple questions. My first question is more sort of a broad industry question and maybe you can talk about what you are seeing from your perspective.

Obviously, there is tremendous concern in the marketplace about the structural change to pricing. We saw McKesson announce -- highlight significant moderation in price increases next year which caused them to lower their guidance. Novo significantly lowered their expectations. Amgen talked about TNF pricing basically going away.

From your vantage point, what are you seeing? And maybe you can share with us changes that we should anticipate in our models with respect to net pricing for Humira in the US going forward.

Secondly, we appreciate the early commentary and color on 2017 guidance, 13% to 15% earnings growth; however, that is a little bit low consensus. Maybe if you could just step back -- you gave us 2020 guidance a couple years ago, maybe you could just step back and help us think about the cadence of earnings growth.

AbbVie is a different company from the industry average, just given the looming competition to Humira. Maybe if you could just help us think about the growth of this company over the next five years, how you are thinking about it, how -- what you see relative to the plan that you put out a couple years ago. Thanks very much.

Sure, Jami; this is Rick. Thank you for the questions. I think as you look at price, certainly the rhetoric on price has been more intense than we have seen it in a number of years. Some of that is driven by the political environment and some of it is driven by more fundamentals.

I think if you look at our business specifically, our business is primarily a volume-driven business. That's not to say we don't benefit at all from price, but clearly the vast majority of our growth comes from volume. The key I think for our entire industry is to continue to drive innovation and innovative products in general. Innovative pharmaceuticals I think in general tend to save the healthcare system money over time.

And I don't know that we've done everything we should do to be able to make sure that we, one, get that message out and, two, maybe support that message a little bit better than we have in the past. So I think that's the key for the industry going forward and that's the thing that we need to focus our attention on.

If you look at the products that we have been successful with, I think they have a good economic value proposition. Humira is a good example of that as well.

And so what I would say, as we look at our planning process just as we have in previous years, we tend to plan conservatively when it comes to price and then evaluate the market environment at the time that we ultimately get close to that period of time and make a decision around what is the appropriate pricing strategy. Our guidance in 2017 and our long-range plan are both reflective of that philosophy. That philosophy hasn't changed.

I think if you look at the 2017 EPS forecast that we gave you, I'd say there's two things that -- in the consensus that are important to look at. One is, if you looked at consensus, I don't believe everyone has rolled into their model the full-year R&D expectation for the BI and the Stemcentrx acquisition. And so, obviously, that was not reflected in the overall consensus numbers.

The second thing is, if you look at gross margin, the consensus numbers gross margin profile is off and we've communicated that a couple of times. Where it is off is trying to calculate what the partner and products contribution will be. I think if you look at those two factors -- if you look at the top line, what we are communicating is very close to what the top line is.

If you look at our overall operating expenses, certainly SG&A -- R&D is a little bit higher. SG&A would probably be a little bit lower, but net-net probably be a little bit higher. But the difference that you would see would be in the gross margin profile.

The other thing I would say is if you look at that level of performance, based on everything that we see, it will rank us certainly in the top tier, if not number one. Obviously, we have to see what others report, but based on consensus that's out there today; so we are delivering another year of truly outstanding performance.

As far as what we communicated to you from the long-range plan back in October, as I said in my formal comments, this is consistent with what we communicated. I would say we are still on track to be able to deliver what we expected and in fact, if anything, I would say Humira is probably ahead. I think there was a lot of surprise when we first communicated the $18 billion for Humira. There is obviously less surprise now to that number based on our overall performance and so I think we are tracking on what we had communicated.

We are absolutely committed to delivering a 50% operating margin by 2020 and that's despite the negative impact that we will see from the partnered products. And we're committed to be able to drive that average compounded growth rate of EPS that we communicated, as well as our top line.

We continue to have a lot of confidence in the business going forward. As we look at the pipeline rolling out, the assets in our late-stage pipeline I think are continuing to advance in a way that is consistent with what we thought back then and those assets are starting to rollout now. As Venclexta, as an example, gets a broader label that's going to be a very meaningful contributor to our overall performance and a number of other programs are continuing to advance.

Risankizumab, as an example, I think is ahead of schedule by a significant amount of time; 494 continues to advance very well. And so generally what I would say is we are very confident in what our outlook looks like and it's consistent with what we communicated to you back in October of 2015.

Thank you.

Jeffrey Holford, Jefferies.

Good morning, thanks very much for taking my question. Just want to ask Rick just to comment on a couple of things said by Amgen yesterday.

They have an expectation for flat net pricing for their TNF in 2017. Do you have a similar expectation built into your guidance for 2017 for Humira? I wonder if you can give us a bit more color on that.

And then beyond 2017, do you already anticipate that that flat net pricing in the US, if that's what you consider for 2017, actually becomes negative maybe in 2018 or 2019? Just wondering what you considered in your midterm plan.

Then also, Amgen seemed to communicate yesterday evening that they won't launch at risk in 2017 and indeed whilst the legal process is going on. Is that your interpretation of what they were saying also? And how long do you think that that legal process is going to go on for? I don't know if you have any court dates yet. Thanks very much.

Thanks, Jeff. I'm not going to necessarily give you the absolute color on what our assumption is in 2017 as it relates to price, but I'd say we don't have a consistent view of the TNF market to the one that was described by Amgen. I think every product obviously has a different perspective in the marketplace.

Maybe it's worthwhile to walk through Humira in a little bit of detail, because I know there's always a lot of interest in it, and that will give you I think a perspective of where we stand overall. If you step back and you look at where Humira is -- take the international market first -- Humira continues to perform as we've described it, despite the fact that we've seen the launch of Enbrel biosimilars in that market now for about seven or eight months I would guess. Maybe nine months, something like that, that they have actually been in the marketplace.

They have had a very modest impact. We are delivering mid single-digit growth, as we have described to you. In fact, this quarter was about 4.5%.

Now the interesting thing is if you adjust for the impact of Venezuela, which will be a one-time impact in 2016, the underlying growth of our international business for Humira is 7.6%. So good, strong growth that is primarily volume growth because you typically have negative price in those international markets. So I would say Humira is performing exactly where we would've expected it to perform in the international markets.

If you look at the US, the US has had just truly outstanding growth. If you look at the past six quarters, on average Humira has averaged about 25% growth. The last two quarters, second and third quarter, if you average the two of them together, the growth was 21.7%. If you make the adjustment for the ordering patterns that Bill described, third quarter was just over 20% growth.

And as Bill indicated, we are forecasting 20% growth again in the fourth quarter. The October weeklies are consistent with that; we obviously pay a lot of attention to Humira. This brand continues to grow extremely well and the vast majority of that growth is volume.

If you look at market share, in the US we continue to perform well. Probably the best way look at market share would be if you track it at the beginning of 2016 and look at it through the latest data points that we have, which would be September data points, the overall market share for Humira is about 31.8%. It's up 0.6% over that period of time from January through September.

Rheumatology, our share is 26.8%. It has increased a full point over that period of time. Gastro and derm, our market share remains basically flat at 43% and 35% market share. This brand continues to perform extremely well in the marketplace and it's because of the attributes of this product and how well-accepted is it by physicians and by patients.

We are continuing to see good market growth. There is an anomaly in the IMS data because a large managed care organization has blinded their data, but it's still in the base. But what I would tell you is that if you look at script growth on Humira, it's above 13% when you make the appropriate adjustments and the market is growing high single digits, around 9% or so. So prescription growth continues to be extremely robust.

Then if you look at our formulary position, we just finished in 2017-2018 negotiations. We are pleased with how those negotiations sorted themselves out. We basically had the same level of strong market access for Humira that we had in 2016.

Net price, which we don't talk about a lot, but what I can tell you is there was only a very minimal, almost no change in net price between 2016 contracts and the 2017 and 2018 contracts. And all other attributes of the contract, like price protection, are basically consistent with what we have had previously and so we feel good about our access in the marketplace.

I think you can expect that Humira is going to continue to perform well. Every brand has its own set of issues that it has to deal with and I'm certainly not in a position to able to talk about their brand, but what I am in a position to talk about is how Humira has performed and how we expect it to continue to perform going forward.

Price is something that -- as I said, we look at it very carefully every single year and we make a determination as to what we think is appropriate. And we will do the exact same thing this year. We typically build in a conservative level of price into our planning assumptions because we don't want to be exposed in any way. And in the information we provided you thus far it includes that level of conservative assumptions built into it.

As it relates to the comments on the litigation, that's not something I can talk about in a lot of detail. I would have interpreted their comments to be the same as the way you interpreted them. I don't think that's a big surprise.

At the end of the day, when you look at the magnitude of our IP portfolio and you look at the risk of launching at-risk against that portfolio, that would be a high-risk proposition for anyone. We have made our intentions very clear about we plan to enforce our IP against anyone who attempts to enter the marketplace and that we would -- if someone chose to make a decision to launch at risk, we would seek a PI. I think the power of our IP I think is very clear in the marketplace.

So, hopefully, that was responsive to your question.

Thanks very much.

Chris Schott, JPMorgan.

Great, thanks very much. Just two quick ones here. First, Rick, just to clarify that comment you made on Humira net pricing for 2017. I know you don't talk a lot about price, but just to make sure I heard that right, did you say minimal to no change in net price? Is that basically implying you are not seeing net price up in 2017 or is that referring to the kind of realized price increase? I just wanted to make sure, again, I heard that one right.

Second one was just talking about formulary dynamics. I think some payors have talked about wanting to move to more indication-based pricing and have talked specifically about the PNF category. Just interested in your thoughts on that. Is that anything we should be seeing from you either in 2017 or 2018 as you are going through these formulary discussions? Thanks very much.

As I described to you before, Chris, we are through the 2017 and 2018 negotiations now. That doesn't mean you can't open something up, but at the end of the day we have completed all of our negotiations at this point for the 2017 and 2018 contract periods.

My comment on net price was essentially -- as you go in and you negotiate for your next contract, typically there is pressure to take your rebates up. So that's -- if you put any price increase and the fall-through of price increase aside, it is what would you increase your rebates by over that period of time? That's what my comment was designed to address: that there was minimal to no change from that perspective and your price will flow through based on the normal dynamics of how that would occur.

And as I said, it was consistent with what we had in place from any levels of price protection in 2016. So it's basically business as usual for us going forward in 2017 and 2018.

As far as indication-based pricing, I think that's a phenomenon that originally started in the area of oncology, where you could have an oncolytic agent that had very different activity or efficacy in one type of cancer versus another. And is the value proposition the same?

If you look at Humira typically across the area that we compete, Humira is typically the gold standard in most of the areas that we compete in. I would say, generally speaking, we have seen some interest in indication-based pricing and potentially doing that. That's not something that, as I said, I think fits well for Humira because of its broad applicability and it's level of performance across the range of indications that it has, but it's certainly something that has been of interest.

I don't see that as a fundamental issue in the contracting that we have seen go forward for 2017 and 2018, at least for Humira.

Thank you.

Andrew Baum, Citi.

A couple of questions, please. Could you help me just further characterize the slowing Humira growth, given the biosimilar impact is obviously going to be pretty limited given that the geography and limited time that the TNF biosimilars have been in the market? How much is competition from the IL-17s in the psoriasis class? How much is saturation of indications? And how much is mandatory price reductions outside the US?

Then I know you have given earnings guidance for next year. I wonder whether you would like to give revenue guidance for Humira.

Second, AbbVie has enjoyed a mutually-positive relationship with the PBMs. In general, do you anticipate any change between the relationships between the PBMs and the pharma industry, given the physical focus on the PBMs on the lack of transparency as well as the ongoing attorney general investigations?

Then finally, for Mike, could you tell us what percentage of patients on Imbruvica run into problems with atrial fibrillation or coagulopathy? I'm obviously thinking about future competition from Astra's Acalabrutinib. Many thanks.

Andrew, in terms of Humira, if you look at the overall growth rates outside the US -- I can't give you a complete slice of what IL-17s are doing specifically, because it impacts market by market. But, broadly, when you look at our assumptions that we had around biosimilars and the underlying growth of the markets, things have been progressing very, very well.

If you look at major markets across Europe, we've got market growing in the low teens. No changes there. And if you look at Humira share, very, very minimal change year over year.

Remicade has not -- biosimilar Remicade has not had a major impact on the brand in any way whatsoever. And Enbrel, as we had told you at the beginning of the year, we anticipated a 2% to 3% growth impact, but that was more or less based on the pricing that we expected the biosimilar to come in at. So the biosimilars have been performing very much in line with our expectations.

The new entrants to the market; look, it's something we are watching very closely, but the reality is those new entrants tend to get slotted as for patients that are ultimately anti-TNF failures. And so while they are ultimately gaining some traction in the market and they are picking up market share, I don't think you should read that through as a direct erosion to the market share of Humira. Again, in fact we've got a very, very strong market share position across those markets.

Andrew, this is Rick. When you say the brand is slowing, I'm not sure whether you are referencing what Bill said in his comments about the prior-year inventory levels or you are just looking at -- as in the US, as I said my comments a moment ago we have averaged over six quarters about 25% and the last two quarters are more in the 21% range.

There's obviously fluctuation from quarter to quarter, but if you look at the dollar contribution across those quarters of growth, it's fairly consistent. There is always ins and outs, but at the end of the day, as the brand gets bigger, the percent growth is going to go down and the brand has obviously grown significantly across that period of time.

If you look at the IL-17s or some of the other brands, as I mentioned in the market share, our market share in derm is roughly flat. We clearly have the leadership position in that segment. And I think, as we look at the dynamics within that market, just to reinforce what Bill said, it's typically the number two player that is getting the bulk of any erosion in their market share with the entrance of a new mechanism, like a 17 as an example, because it is usually the second-line failure that they tend to get their market share from.

And so Humira has not had as much of a negative impact based on that because we're typically the first TNF that is used in those indications. On the PBMs, obviously we try to have good relationships with of all of our customers, whether they be managed care organizations or PBMs.

They are professional relationships; I think PBMs serve a very important purpose. They obviously allow plans to be able to have formularies that they can help manage. That's the role that they play and we play an important role with them in being able to supply them with products that can go on those formularies. And so I think it's a typical business relationship.

On Imbruvica, I don't know that we have commented specifically about the rates. They are obviously relatively low rates. Mike, do you want to anything?

Well, I think we can comment on the clinical trial experience as probably the best ability to assess the rates. There the a fib rates have been in large data sets, so big Phase 3 studies on the order of about 6% to 7% across the studies that make up our label. And there is background rate, of course, for a fib in that population as well, which runs in the low single digits.

And for bleeding events we are seeing bleeding events in about that same range of patients and, again, there's a background rate in the population. With bleeding, most of the episodes of major bleeding that we have seen in our clinical trial program had generally been associated with other precipitants, so trauma or other events that might be associated with bleeding. Again, there is a background rate there as well.

Thank you.

Vamil Divan, Credit Suisse.

Great, thanks so much for taking my questions. Two questions I have.

One on Humira; you've talked obviously how you see things relative to the longer-term guidance you gave last year. I just had a question more on the longer-term guidance, because I think there's been a lot of expectation that once there is biosimilar Humira available in the US, because of some of the relationships you have with the PBMs, that the erosion of Humira may be relatively slow. I'm wondering if any of this rhetoric and discussion around drug pricing and transparency around drug pricing, does that change your view on the tail for Humira after we have biosimilar entry. Whatever year that entry actually occurs in the US.

Then my second question; a couple of your key pipeline products are also in the autoimmune, oral JAK and your IL-23. I'm wondering if you can just talk a little bit about the dynamics there because there's obviously competitors ahead of you in both of those spaces you are going to be entering, which appears to be pretty competitive and maybe price-sensitive markets as well. And you will not have the same sort of dominant position that you've enjoyed with Humira.

So how do you think about the opportunity to get into those markets coming behind competitors with price again being a potential issue?

Based on the long-term expectations, as we've communicated to the market before, we don't anticipate biosimilar competition in the US market for quite some time. And so I think -- we have a strategy that we have developed that we will put in place at the point at which we see biosimilar competition in any market around the world.

We will obviously implement that strategy outside the US potentially earlier -- in an earlier timeframe and that strategy is designed for us to be able to maintain our position going forward. I think it's far enough out in the US that we will have to see how the dynamics play out. I don't anticipate anything significantly changing that strategy based on how we would employ the strategy, based on the debates that we see going on and the market dynamics going on.

I will have Mike maybe talk a little bit about the JAKs and the IL-23s from a performance standpoint, but what I would say from a market standpoint is we have always tried to position that our follow-on products would be significantly differentiated versus others in the marketplace. We've designed our clinical trials to be able to produce that level of differentiation.

And I would expect that, if anything, we would be in a better position based on our experience and our position in this market to be able to launch these products successfully into the market as companion products behind what will be a workhorse product like Humira. We still anticipate that Humira will be the workhorse product that will handle the vast majority of the volume, particularly in the beginning, and these products will fit into different segments going forward in a complementary way. And I think that gives us an advantage, not a disadvantage in the marketplace.

Mike?

Yes, this is Mike. What I would add is, as a leader in immunology, we have a very clear understanding of the profile that we believe will be competitive; not only today, but in the future and in the timeframe that these products will launch.

When we look at, in the case of the two molecules you mentioned, the Phase 2b data to make a decision on either advancement or in-licensing, we kept that profile in mind. And I think each of those assets stands up very well to that understanding of what we will need to be competitive.

With the JAK, for example, that's why we focused on differentiated efficacy, strong efficacy in very difficult-to-treat patient populations and very, very strong data at the higher levels of response, endpoints like remission, low disease activity, durable ACR 70s and the like.

And for Risankizumab it was really the same thought process. We looked at those data and we believed, based on a very substantial set of clinical trial results, that the efficacy there was truly differentiated. We can point, for example, to the approximately 50% [policy 100] response for Risankizumab in Phase 2b with very favorable pharmaceutical properties of that agent and very pivotal dosing that we believe is attainable in Phase 3 and in registration. So we are keeping that profile in mind and we are advancing assets that we believe will be competitive in the future.

Geoff Meacham, Barclays.

Wanted to switch gears away from Humira a little bit and talk a little bit about Imbruvica. Curious if you can give us any commentary post the first-line approval just with respect to duration of therapy, dose interruptions? Clearly, extended treatment is clearly one of the big value drivers here for Imbruvica.

Then just for Elagolix just wanted to get your perspective, updated perspective just given a new competitor in the marketplace about the value of having add-back or not and what that means in terms of differentiation in the women's health market. Thanks.

This is Rick. I think on Imbruvica, if you look at our performance in first line, we are obviously pleased with the ramp that we've seen so far. We are ramping fairly rapidly to about 20% now of the overall market.

The duration of therapy I think we have communicated historically has been in the area of about 75% of the clinical trial experience. I haven't seen the data in the last couple of months, but I think in first line it's consistent with that. It has been increasing slightly in the relapsed/refractory area, but it is certainly at a very respectable level and certainly isn't anything that we are concerned about at all. It's certainly at a level that we would expect it to be going forward.

And so I think the adoption of Imbruvica in that first line, I think the speed of adoption in that first line is an indication of the power of the data that we've seen in RESONATE-2 and physicians' receptivity to that data, both from a PFS and an overall survival standpoint. That is really what's driving a lot of the usage of this product. I think as we expand and provide even more data we should continue to see the ability to be able to penetrate that first-line market to an even greater extent.

Elagolix?

With respect to Elagolix, we are obviously aware of the competition. We keep a close eye on competition across all of our franchises, but we feel very good about the position we have with Elagolix. We have a substantial lead having completed two Phase 3 studies and competition is considerably behind that in terms of timing. And we're going to continue to drive that program forward.

The efficacy and the safety results that we see we view very favorably. We think they support the value proposition that we had in mind when we entered into Phase 3 and we're going to continue in subsequent studies, in post-registration studies, phase 4 work if you will, to continue to define that profile.

Add-back, could be an important part of that profile and we are pursuing that. And there may be other strategies to continue to enhance the value proposition for Elagolix. Then we are going to be driving forward with that aggressively.

Marc Goodman, UBS.

This is Ami Fadia on for Marc. Most of our questions have been answered, but I will ask three quick follow-up questions.

Firstly on Humira for the quarter. If you look at the sequential sales in 3Q versus 2Q, there was weakness sequentially, so if you could help us understand what might have driven that, that would be helpful.

Secondly, just with respect to your long-range guidance for EPS growth, how should we think about the 15% growth over the longer term? Right now it's sort of ranging in the lower double-digit range. When do you expect to see the spike more closer to the mid double-digit range?

Thirdly, on Rova-T, could you elaborate a little bit on the basket study; what are you looking to see there? That would be helpful, thanks.

Ami, it's Bill Chase. Humira is kind of a difficult brand to look at on a sequential quarter basis. First of all, it's a very well-established brand; growing rapidly, but well-established.

If you go back and look over the years, it is not unusual in the US or abroad to see a general flattening out over the summer and then an acceleration back in the back half of the year. And that is the pattern that we are seeing this year.

Now, could there be some degree of inventory between Q2 and Q3 that is impacting that sequential growth? Yes. Look, minor moves flow -- impact that sequential, but really at the end of the day, when we look at the brand and we look at the dynamics around the brand and we look at the prior year destock that we saw in the second quarter and the subsequent restock in the third quarter, there is nothing that is alarming us about this third quarter.

You have to remember that our second-quarter results had 26.7% growth. That was largely related -- that difference from the 20% was largely related to a destocking event in the second quarter of 2015. And we're just seeing to restock -- the impact of the restock in the third quarter of 2015, so we actually feel very, very good about it.

We are guiding fourth quarter above 20%. We feel very, very good about our full-year forecast.

On the EPS, 2015 we delivered EPS growth of 29% and this year the midpoint is about 12%. Now you've got your remember that 12% has the dilution associated with the Stemcentrx transaction and the dilution associated with the BI transaction, so that's certainly weighing on this year. We are guiding next year to be 13% to 15%; that's certainly in the range of the 15% area.

And then nothing has changed that gives me any concern that we won't achieve the number that we talked to you about on average across that period of 2015 to 2020 that we can average that kind of a compounding growth rate. But I would say, thus far, if you look for 2017, you would say we are at or above that rate across the average, including the dilution of those two transactions.

And then Rova-T?

This is Mike; with respect to the basket study for Rova-T. So this is a study that has eight arms and each arm looks at a different type of the tumors that have neuroendocrine features and share the same underlying biology of small cell lung cancer. Examples of these tumor types might be the large cell component of non-small cell lung cancer, a form of pancreatic cancer that has neuroendocrine features, subsets of colorectal cancer, and metastatic melanoma, for example.

Each of these eight arms is going to look for response rate in refractory patients with those tumors. And when we see a response rate that we view as indicative of good activity, we would then have the ability to expand out both those cohorts and start additional studies that could be registration-enabling following the same conceptual strategy that we did with Rova-T and small cell. Of course, the nature of what each registrational program would look like would be tailored to the individual tumor type. But this is a study that could rapidly trigger additional registrational work in those other tumors as we see signs of activity.

John Scotti, Evercore ISI.

Thanks for taking my questions. I have a couple, please.

I apologize for touching on this I think for the third time, but I just want to make sure I'm absolutely clear. When you say minimal to no change in net price from 2017 to -- 2016, 2017, 2018, just to be clear what you mean is that the gross to net spread on Humira you don't anticipate widening, but you will still continue to capture at least some net price growth? Or is it that you do not anticipate on capturing any net price growth because gross to net spreads are widening?

Then also, I was also curious on the P&L management this quarter, particularly on the SG&A side, which came in a little bit better than expectations. Where those cost savings coming from and are they coming from Humira? Are you reducing your global footprint on Humira ahead of the biosimilar entry? If not, I'm just curious where they're coming from. Thank you.

John, just to clarify on the price, the net price comment refers to what happened to net price before any future price actions. Now what we are not saying is that there will be no net price increase next year. We still have within our contracts the ability to raise price and see a positive impact on the P&L from those actions.

The net price actually has to do with, without any future price increases -- which by the way, that is not how we are modeling the year -- what we would expect. Price would be on a constant basis without price increases. The contracts allow us to take net price and any net price increases -- any price increase that we took would have a positive impact on our modeling. That's the way you need to think about it.

That said, in 2017 we are planning conservatively, as we always do. We're approaching the 2017 guidance with the exact same philosophy on how we plan for price increases that we have in the past. So hopefully that helps out.

Then from a P&L management standpoint, look, the SG&A ratio, we are very pleased with. It's really a couple different things. There is a leverage impact from the rapidly growing top line that obviously we have been putting -- delivering over the last few quarters.

That said, we look at our spend. We are looking at admin very, very closely. We're looking at the productivity of all of our SG&A investments, as you would expect us to. And we fund projects based on an ROI and a return. If they positive ROI, we find a way to get the money in the right places to deliver the return.

In terms of Humira, we are not backing off our spend on Humira. The spend on Humira has been the driver of the spectacular growth that the brand has put up and all of those programs are very, very high ROI, which as you can see -- as you can imagine, based on the sales growth.

Thank you.

Alex Afraei, BMO Capital Markets.

Good morning, folks. Thank you for taking the questions. Most of my Humira and price questions have been asked and answered.

Just looking at pipeline and business development opportunities, what are thoughts about either developing or pursuing CAR-T products to augment your hematology pipeline and maintain your leadership? That seems to be where we are going with a lot of hematologic malignancies. Thank you.

This is Mike. With respect to CAR-Ts, obviously there's been a lot of activity. It's still early days for the use of those agents in later-stage trials and obviously not yet being registered agents. There's also a lot of work that is going on to try to figure out what is the right functionality that one would want to build into a CAR-T to optimize its applicability across a range of both hematologic and other tumors.

So we are keeping a close eye on this space. As a leader in immunology, with our very strong presence in oncology, obviously there are a lot of skills that we bring to the table that we think we could apply to CAR-Ts. We will continue to monitor that area closely, both with our internal work and keeping an eye on the external environment.

Steve Scala, Cowen.

Thank you very much. I believe Humira's IP estate has increased by 30 or so patents from this point last year. Last year you gave us a very nice chart of the nature of the patents and the expiration dates. It was page 14 of your slide deck.

In general terms, can you detail the nature of the additional 30 in terms of the type of patent they are and the expiration dates?

Then, secondly, AstraZeneca has been saying they could file Acalabrutinib for an indication by the end of this year, but I'm not aware that they have identified that indication. Does AbbVie have any competitive intelligence on what AstraZeneca might be up to? Thank you.

Steve, this is Rick. On the IP, off the top of my head I can't give you all the dates of the incremental 30 patents. We continue to work on our patent estate, so I think maybe offline we will try to get back to you with whatever we are able to provide you.

And then, Mike, do you want to talk about AZ?

Sure, this is Mike. We've certainly heard the comments that you are referring to by AZ, but we agree that they have not been very specific. I don't think we can really speculate on what they have in mind.

What I can tell you is, with inbrutinib we are moving forward very aggressively, very rapidly across a number of fronts. Moving to frontline in CLL, advancing our programs in other areas like non-Hodgkin's lymphoma. So we are really focused on raising the bar there and making sure that we are driving Imbruvica as rapidly and aggressively as we possibly can.

Thanks, Steve. 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.

Participants, the call has concluded. You may now disconnect. Thank you.