AbbVie (ABBV) Q2 2026 earnings review
Sales Beat and Raise, But the Earnings Jump Is Mostly Optics
AbbVie beat its own guidance on both lines. Revenue of $16.990 billion came in roughly $300 million above the company's forecast, up 10.2% reported and 9.5% operationally, and adjusted EPS of $3.65 landed $0.06 above the guidance midpoint. Full-year revenue guidance rose $300 million to about $67.6 billion, the second raise this year. EPS guidance moved the other way, to $13.87-$14.07 from $13.91-$14.11, as $0.14 of dilution from the $10.9 billion Apogee Therapeutics acquisition more than offset $0.10 of operating upside. The headline 22.9% adjusted EPS growth overstates the improvement: a much smaller acquired-IPR&D charge ($0.17 per share versus $0.42 a year ago) accounts for 37% of the increase. GAAP EPS of $2.03 versus $0.52 is almost entirely an accounting comparison. No buybacks were discussed.
🐂 Bull Case
Skyrizi and Rinvoq together added about $1.6 billion of revenue year over year, slightly more than the company's entire $1.57 billion increase. Both grew above 23% operationally, and neither faces a loss of exclusivity this decade.
Strip out Apogee dilution and the acquired-IPR&D accounting and management raised the operating outlook by $0.10 this quarter and $0.22 year to date versus the initial 2026 guide. Revenue guidance has now been raised $600 million since January.
🐻 Bear Case
Outside immunology and neuroscience, the business is shrinking. Oncology fell 2.4% operationally, other key products fell 10.3%, and aesthetics fell 0.9%. Two of the four reported portfolios are contracting while the company grows near 10%.
The revenue guide implies 9.9% growth in the second half against 11.2% in the first. Skyrizi decelerates to roughly 20.6% and neuroscience to 13.7%. Separately, the 2x net leverage target moved from 'end of 2026' to two-to-three years after the Apogee close.
⚖️ Verdict: ⚪
Neutral. Operationally this was a good quarter: a beat, a revenue raise, and 24% operational growth from Skyrizi. But the 22.9% adjusted EPS jump is largely an IPR&D comparison rather than earnings power, growth is now concentrated in two franchises, and the guidance points to a slower second half. Nothing here changes the trajectory in either direction.
Key Themes
Headline Earnings Growth Is an IPR&D Comparison
Adjusted EPS rose 22.9%, but $0.25 of the $0.68 increase came from a smaller acquired-IPR&D charge: $291 million this quarter versus $823 million a year ago. Excluding that line from both periods, adjusted EPS went from $3.39 to $3.82, growth of 12.7%. A lower adjusted tax rate (14.7% versus 16.2%) added roughly another $0.05. The underlying result is respectable, but it is close to half the reported rate. Because guidance excludes any IPR&D beyond what has already been booked, and because AbbVie has recorded a charge in each of the last four quarters ($2,680 million, $1,265 million, $744 million, $291 million), reported year-over-year EPS growth is close to meaningless as a signal.
Skyrizi's Growth Rate Has Halved in Four Quarters
Operational growth has moved from 46% in 25Q3 to 31.9%, then 29.2%, then 24.0% - Decelerating steadily. Part of that is arithmetic, since the base is now $5.5 billion a quarter. But the raised full-year guide of $21.7 billion implies second-half growth of about 20.6% against 27.3% in the first half, so the slowdown is built into management's own numbers. On the competitive question, the response was specific rather than defensive: since the March launch of the rival oral IL-23 agent, AbbVie says the vast majority of that product's share has come from the two other oral treatments, and Skyrizi's new-and-switching prescriptions have grown rather than eroded. That is a credible answer for now. It does not change the deceleration.
Skyrizi Subcutaneous Induction in Crohn's Disease
The FDA decision is due this fall and the review is described as on plan. In the pivotal study, both endoscopic response and clinical remission ran 25 points above placebo in the overall population and 45 points above in patients never treated with an advanced therapy - the highest induction figures AbbVie is aware of in Crohn's disease. Commercially it removes real friction: today a physician has to work across a medical benefit for IV induction and a pharmacy benefit for maintenance. Management expects a meaningful step up in patient capture but was explicit that contracting takes a few months, so the sales effect starts in early 2027. Anyone modelling this into second-half 2026 is modelling it too early.
Rinvoq's Dermatology Expansion Just Got Bigger
Europe approved Rinvoq for non-segmental vitiligo, the first systemic therapy approved in the EU for that condition, and for severe alopecia areata. Management now puts combined peak sales for these two indications alone at close to $2 billion, described as meaningfully above prior expectations - notable because a year ago roughly $2 billion was the framing for a wider set of new indications including hidradenitis suppurativa and lupus. US decisions follow later this year for vitiligo and early next year for alopecia areata, and the US dermatology field force has already been expanded. Rinvoq's operational growth reaccelerated to 23.7% from 20.2% in 26Q1, when an unfavourable rebate-timing comparison depressed the reported figure.
Neuroscience Is Now Three Pillars, All Growing
Psychiatry, migraine and Parkinson's all delivered. Vraylar reached $1.071 billion (+18.9%), Botox Therapeutic $1.042 billion (+12.2% reported), Ubrelvy $392 million (+16.0%) and Qulipta $350 million (+30.9%), with Qulipta now approved in Europe for acute migraine as well as prevention. Vyalev, the Parkinson's infusion, reached $256 million, up 27% sequentially and Accelerating from $138 million three quarters ago, putting the $1 billion blockbuster target comfortably in reach. Tavapadon, an oral D1/D5 agonist with low reported rates of dyskinesia, sedation and impulse control disorder, has an FDA decision due this quarter. Management pre-warned that the launch ramp will be modest because Medicare formulary additions lag approval - a useful piece of expectation-setting rather than a product problem.
Apogee: $10.9 Billion, and the Deleveraging Clock Resets
This is a change of tone. For three consecutive quarters management said it was focused on early-stage business development and did not need deals to deliver growth this decade. It has now agreed to a $10.9 billion acquisition. The lead asset, zumilokibart, is a half-life-extended IL-13 antibody for atopic dermatitis, a market with entrenched incumbents. AbbVie already has an IL-13/IL-31 receptor bispecific in the clinic and an IL-13/IL-18 bispecific about to enter, and management confirmed nothing internal was deprioritised - which leaves open what $10.9 billion buys that the internal pipeline did not. The financing shows up immediately: adjusted net interest expense guidance rose $200 million for a partial year, so 2027 carries the full cost, and the 2x net leverage target has moved from 'by the end of 2026' to two-to-three years after a third-quarter close.
Growth Has Narrowed to Two Portfolios
Immunology and neuroscience added roughly $1.15 billion and $545 million of revenue respectively. Everything else was flat or negative. Oncology fell 2.4% operationally against 9.5% for the company, the third straight quarter of operational decline (-2.5% in 25Q4, -3.0% in 26Q1). Imbruvica is the cause: down 29.4% to $532 million on IRA pricing and share loss, a drop of roughly $220 million year over year that the growth products cannot yet cover - Elahere at $211 million (+33.1%), Epkinly at $103 million (+46.8%) and Venclexta at $771 million (+9.6% operationally) added roughly $165 million between them. Other key products fell 10.3% operationally. The concentration cuts both ways: it is a testament to Skyrizi and Rinvoq, but it means a single competitive surprise in immunology would hit the whole company.
Aesthetics Relapsed, and the US Is the Problem
After finally turning positive at +5.1% operational growth in 26Q1, aesthetics fell back to -0.9% - Reversing. The geographic split is where it matters: US aesthetics revenue fell 4.4% while international rose 8.1%. US Botox Cosmetic was down 2.4% after growing 17% in 26Q1, and Juvederm fell 6.6% operationally with US sales down 2.0%. Management characterised this as 'modest market growth globally', which does not describe a US business in decline, and did not restate the $5 billion full-year aesthetics guidance set in January - a target that now needs roughly 2% second-half growth to reach. The new short-duration toxin Boey was approved in Europe and Canada, but has no US approval and no 2026 contribution.
Commercial Pricing Holds, But 2027 Is the Test
Payer contracting for next year is running in line with prior years, with low-single-digit rebate and price concessions described as the standard in immunology - a reasonable read on the commercial pricing environment and consistent with what management has said for several quarters. The policy calendar is less comfortable. Negotiated Medicare prices for Vraylar and Linzess take effect in January 2027, and Botox Therapeutic was selected in the 2028 cycle. Vraylar is guided to approach $4.1 billion this year and Botox Therapeutic $4.2 billion, so these are not small exposures, and management has never sized the impact beyond repeating that it does not change long-term guidance. Currency also turns: a 0.7% tailwind this quarter becomes an expected 0.4% headwind in 26Q3.
The Oncology Pipeline Is the Answer to the Oncology Decline
Temab-A, the c-Met antibody-drug conjugate, received breakthrough therapy designation in refractory metastatic colorectal cancer in combination with bevacizumab, and the all-comers third-line-plus Phase 3 is now recruiting. New data presented at ASCO: in platinum-resistant ovarian cancer, response rates reached as high as 80% in c-Met-selected patients and 50% in clear-cell carcinoma; in c-Met-selected head and neck cancer, a 31% response rate with median overall survival of 15.3 months. Second-line colorectal data arrive later this year and would open a much larger irinotecan-replacement opportunity. The licensed PD-1/VEGF bispecific reads out at World Lung, with management intending to combine it with the ADC portfolio and move to Phase 3 quickly. Also new: FDA approval of Decnupaz in BPDCN, AbbVie's first ADC in blood cancer. All genuine, all years from revenue.
Other KPIs
Up roughly 400 basis points from a derived 44.3% a year ago, and the strongest quarter in the last five. Almost all of the improvement is the acquired-IPR&D line: excluding IPR&D from both periods, margin moved from 49.6% to 50.0%, about 40 basis points. Underneath, adjusted gross margin improved to 84.7% from 84.4%, adjusted R&D fell to 13.6% of sales from 13.7%, and adjusted SG&A was flat at 21.0%. Ten percent revenue growth therefore produced almost no operating leverage - the cost base grew with sales. The 25Q2 figure is derived from the non-GAAP reconciliation; 25Q3 through 26Q2 are as reported by the company.
GAAP EPS was $2.03 against adjusted EPS of $3.65. Two items account for essentially all of it: intangible asset amortization of $1.689 billion ($0.81 per share) and a $1.518 billion change in the fair value of contingent consideration ($0.83). The second deserves attention. Across the first half it totalled $3.905 billion, or $2.14 per share, and it reflects royalty obligations carried at fair value rather than a purely notional item. Separately, the company has guided 2026 free cash flow of $18.5 billion as including roughly $3.5 billion of Skyrizi royalty payments. The accounting charge and the cash payment are different numbers, but the underlying obligation is real cash leaving the business, and adjusted EPS does not show it.
Down from 16.2% a year ago, worth roughly $0.05 of the quarter's EPS. Full-year guidance moved in the opposite direction, to approximately 14.5% from about 14% previously, because acquired IPR&D expense is largely non-deductible - the $291 million pre-tax charge cost $288 million after tax. A modest tailwind this quarter that reverses as a headwind at the full-year level.
International grew 12.8% reported against 9.3% in the US, though 2.6 points of that was currency (10.2% operational). The pattern repeats at product level: Rinvoq international +31.9% versus US +21.6%; Skyrizi international +27.3% versus US +24.0%; Botox Cosmetic international +16.4% versus US -2.4%. Ex-US markets are carrying a disproportionate share of growth right now, which makes the guided currency reversal in the second half more consequential than the 0.4% headwind figure suggests.
The forgotten portfolio, and it was not mentioned once on the call. Creon fell 14.7% to $345 million, Mavyret fell 21.2% to $295 million, and only Linzess grew, up 13.9% to $295 million. Combined, this group subtracted roughly $100 million from year-over-year revenue. Small relative to $17 billion, but a 10% decline across two established franchises went entirely unexplained.
Guidance
Down $0.04 at the midpoint from $13.91-$14.11. The composition matters more than the direction: $0.14 of dilution from the Apogee acquisition against $0.10 of upgrade to the existing business. Be careful comparing this to the January guide of $14.37-$14.57 - that range excluded acquired IPR&D entirely, while the current range absorbs $0.58 per share of IPR&D already incurred and still excludes anything from the third quarter onward. On a like-for-like basis, excluding IPR&D and Apogee dilution, the implied midpoint is $14.69 against the original $14.47, so the underlying outlook has been raised $0.22 year to date. Against 2025's adjusted EPS of $10.00, the headline implies 40% growth; on a comparable ex-IPR&D basis it is roughly 14%.
Raised $300 million for the second consecutive quarter, $600 million in total this year, implying about 10.5% growth on 2025's $61.2 billion. The headline hides a Decelerating second half. With $31.99 billion booked in the first half, the guide implies roughly $35.6 billion in the second, growth of 9.9% against 11.2% in the first half. The same pattern runs through the franchise guides: Skyrizi raised $100 million to $21.7 billion implies second-half growth near 20.6% after 27.3%, and neuroscience raised $100 million to $12.7 billion implies 13.7% after 22.9%. Inside neuroscience, Vraylar approaching $4.1 billion implies roughly 8.6% second-half growth after 18.6%, and Botox Therapeutic approaching $4.2 billion implies roughly 8.8% after 14.3%. Some of this is conservatism after two consecutive raises; some is a genuinely harder comparison base.
Revenue implies 9.0% growth, Decelerating from 10.2% this quarter and 12.4% in 26Q1, and includes an estimated 0.4% currency headwind. The EPS midpoint of $3.86 looks like 107% growth against last year's reported $1.86, which is again an IPR&D artifact; measured against 25Q3 excluding IPR&D ($3.36) it is 14.9%. The range carries a partial quarter of Apogee dilution and assumes no acquired IPR&D expense at all - an assumption that has proved wrong in each of the last four quarters.
The third consecutive reduction: 48.5% guided in January, then about 47.5%, now approaching 47%. This reads worse than it is. The $1.035 billion of acquired IPR&D now recognised is about 1.5% of guided revenue, so excluding it the outlook is essentially unchanged near 48.5%. The more useful figure is the implied second half: first-half adjusted operating margin was 44.8%, so the full-year guide requires roughly 49% in the second half. That is a demanding step up that rests on revenue mix and the absence of further IPR&D charges rather than any announced cost action.
Adjusted R&D was raised $100 million for Apogee-related programmes and is up roughly 8% on 2025's approximately $9.1 billion. SG&A of about $14.5 billion is up roughly 3% on $14.0 billion. Both grow more slowly than the 10.5% revenue guide, which is where full-year margin expansion is supposed to come from - it did not show up in the second quarter. Adjusted net interest expense rose $200 million to about $2.9 billion for a partial year of Apogee financing, meaning the full-year cost lands in 2027. Interim financing is secured with long-term debt issuance expected in the coming months.
Key Questions
What Is Happening in Other Key Products?
Creon fell 14.7% and Mavyret 21.2% operationally, and the portfolio as a whole shrank about $100 million year over year. Neither product was mentioned on the call. Is this competition, supply, channel timing, or structural decline, and what is the run-rate from here?
Is the $5 Billion Aesthetics Guide Still Intact?
Aesthetics reversed from +5.1% operational growth in 26Q1 to -0.9%, with US revenue down 4.4%. The full-year target set in January was $5 billion, which now requires roughly 2% second-half growth. Management did not restate it. Is it unchanged, and what is assumed for the US toxin and filler markets in the second half?
What Does Zumilokibart Do That the Internal Pipeline Does Not?
AbbVie has an IL-13/IL-31 receptor bispecific in the clinic and an IL-13/IL-18 bispecific about to enter, and management confirmed nothing internal was deprioritised. What peak sales assumption underpins the $10.9 billion equity value, and how does a half-life-extended IL-13 monoclonal differentiate against incumbents in atopic dermatitis?
Size the 2027 Medicare Negotiation Impact
Negotiated prices for Vraylar and Linzess take effect in January 2027, on products guided to approach $4.1 billion and roughly $1 billion respectively this year. Management has repeatedly said this does not change long-term guidance, but has never quantified the gross revenue headwind. What is the number?
Bridge the Second-Half Operating Margin
First-half adjusted operating margin was 44.8%, and the full-year guide of approaching 47% implies roughly 49% in the second half. Given SG&A is guided up and Apogee adds R&D, what specifically carries margin nearly 400 basis points higher than the second quarter's 48.3% level on a comparable basis?