I’d say there’s a lot of interest in combination. In oncology, ImmunoGen really nicely complements our efforts with ADCs, it gives us a head start, an entry in the solid tumor space, that we’re not in today. But in addition to ADCs, we’re focused on bispecific, multi- specifics immuno onc agents. We also recently announced a collaboration with Umoja studying insight to CAR-T therapy. So a lot of focus in oncology, but these again would be earlier-stage smaller-sized deals. In Neuroscience, Cerevel adds depth to our neuropsych pipeline, but we also have a focus on migraine and neurodegeneration. In eye care, we’re extremely excited about the REGENXBIO program in wet-AMD and diabetic retinopathy. But we continue to look for innovation in glaucoma and retinal disease.
So we certainly have an interest there. And then in Aesthetics, it’s always about looking for innovation that can drive new consumers into our providers practices. So our BD group is still very active. We certainly have the financial wherewithal to pursue those opportunities to further bolster our pipeline. But those are the areas that we’re most interested in.
Liz Shea: Thanks Tim. Operator, next question, please.
Operator: Yes, the next question comes from James Shin with Deutsche Bank. Your line is open.
James Shin: Hi. Good morning. I had a question on ovarian cancer and it’s going to be more competitive with [indiscernible]. How do you feel about [indiscernible] interacting? And how do you feel that market landscape looks going forward?
Liz Shea: Unfortunately. Your line is not very clear. Can you maybe try to repeat the question one time.
James Shin: Sorry about that. [indiscernible] better now.
Liz Shea: It’s still little echoey, it’s a little bit better, but go ahead.
James Shin: Okay, I was asking about [indiscernible] and the competitive dynamics in ovarian cancer.
Liz Shea: Yes, unfortunately, it’s just not coming clear — coming through clearly. Happy to address the question following the call. Apologies for that. Operator, next question please.
Operator: Yes, the next question comes from David Risinger with Leerink Partners. Your line is open.
David Risinger: Yes, thanks very much, and congrats on the long term updates. So with respect to the Alzheimers commentary, a product was left out of the TREM2 AL002, which has an estimated primary completion in September. If you could comment on that as well. That would be helpful. And then with respect to the GILTI tax change that’s coming, so can you please provide some more color on that, including the timing and the potential impact? Thanks very much.
Tom Hudson: Hi, this is Tom Hudson. I’ll answer the question, the first question, yes, we do have a partnered program with Alector on the TREM2 target. TREM2 was identified in Alzheimers disease through genetic studies, several years ago, very strong link. We have a program which — TREM2 modulates and no inflammatory response in AD. All patients are enrolled in the Phase 2, we will have data later this year. So again it’s an early clinical development, but we will expect to see key data later.
Scott Reents: Sure, this is Scott. Regarding the GILTI tax. So this is the US tax, the foreign minimum tax on foreign earnings that the US supplies. That tax rate today is at 10.5%, it’s going to move up to 13.1% a little bit more than that. That will occur — the implementation date is a little bit mixed, because it depends on fiscal year-ends of legal entities, but let’s call it 2026 is when we can look at that. And only part of our income is subject to that rate. So, I would say that’s approximately a 1.5% impact to our tax rate that you would see. And that’s baked into my 1% on average over the next three years.
Liz Shea: Thanks, David. Operator we have time for one final question.
Operator: Okay. And our final question is Luisa Hector with Berenberg. Your line is open.
Luisa Hector: Thank you for taking my question. I wanted to touch on the Part-D restructure an IRA. So you have a number of drugs that are likely to be impacted by this. And obviously, you talk about your strong rebound in 2025. So I’d just love to hear your thoughts on how that restructure will impact. And perhaps to what extent that is already baked into your expectations of the rebound? And maybe just to check, have you now received the initial offer from CMS owned Imbruvica? Thank you.
Jeff Stewart: Yea. Thank you, Luisa. It’s Jeff. And we have we have contemplated in our planning and long-term guidance, both the Part-D redesign and of course the IRA impacts based on our projections over when some of our drugs might be negotiated. To give you some color on the Part-D redesign, we have clearly a very good visibility over the pricing dynamics that will take place as you say, many of our brands basically will be under the catastrophic redesign component. Now we’ve also understood based on one of the policy items, which is the cap and smooth, we’ve also countered some of that price with volume offsets based on patients having the ability to acquire these. Now that volume does not fully offset the pricing impact. But suffice it to say that, that’s been very much contemplated into that. I’ll let Rob comment over how that sort of feeds into the growth rates.
Rob Michael: Luisa you asked a very good question. This is Rob. Clearly, and we have contemplated that in the high single digit CAGR, the impacts of IRA. But as you think about the annual progression, it is important to note that Part-D benefit redesign starts in 2025. So that is certainly something you should consider for modeling of annual sales. I mean, that impact by itself, on a net basis could be worth a few points of growth. As Jeff mentioned, the higher cost share with an offset in volume, we have studied the improvement in abandonment rates as we look at the low-income subsidy part of Part-D which doesn’t have the out of pocket burden that the standard benefit does. And when we compare the abandonment rates and as you address this issue of out of pocket burden, we would expect the abandonment rates to improve across Medicare Part-D, but not enough to fully offset the higher-cost share.
That was something we certainly contemplated. But as you think about the progression of growth, the rate of growth will accelerate starting next year through 2029. So we’ll deliver a high-single-digit CAGR. But it’s important to note that in 2025, you do have that beginning of Part-D benefit redesign, which adds, I’d say a couple of points of growth headwind that will still allow us to deliver robust growth, but it won’t — you shouldn’t think about the same amount of growth every year, it’s going to accelerate over the long-range plan.
Rick Gonzalez: And then, this is Rick on the Imbruvica price, yes, we have received the initial offer on Imbruvica recently. As you know, there is a process that CMS is going through here to set pricing. And because none of us have any experience with this, we don’t know exactly how that process will proceed. There will be some back and forth between the manufacturer and CMS. CMS has indicated that they’ll have the final price by September 1st. It’s certainly premature for us to talk about the price now, because it’s not the final price. I don’t know that we’ll know the final price until very close to the point at which they are prepared to publish that price, having not had any experience here. So, I wouldn’t anticipate we will get any updates until that date or very close to that date.
Liz Shea: Thanks, Luisa. And that concludes today’s conference call. If you’d like to listen to a replay of the call, please visit our website at investors.abbvie.com. Thanks again for joining us.
