What changed in this filing

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Item 1A. Risk Factors

2022-02-18 compared with 2021-02-19 · 27 added, 26 removed, 283 unchanged (16% of the section changed)

15 unchanged sentences

The COVID-19 pandemic has caused AbbVie to modify its business practices (including instituting remote work for many of AbbVie’s employees), and AbbVie may take further actions as may be required by government authorities or as AbbVie determines are in the best interests of AbbVie’s employees, patients, customers and business partners.

While the impact of COVID-19 on AbbVie’s operations, including, among others, its manufacturing and supply chain, sales and marketing, commercial and clinical trial operations, to-date has not been material, AbbVie has experienced lower

| 2020 Form 10-K

new patient starts across the therapeutic portfolio.

While the impact of COVID-19 on AbbVie’s operations, including, among others, its manufacturing and supply chain, sales and marketing, commercial and clinical trial operations, to date has not been material, AbbVie has experienced lower new patient starts in certain products and markets.

The impact of COVID-19 on AbbVie over the long-term is uncertain and cannot be predicted with confidence.

The extent of the adverse impact of COVID-19 on AbbVie’s operations will depend on the extent and severity of the continued spread of COVID-19 globally, the timing and nature of actions taken to respond to COVID-19 and the resulting economic consequences.

Ultimately, the outbreak could have a material adverse impact on AbbVie’s operations and financial condition.

Ultimately, efforts to mitigate the impact of COVID-19 may not completely prevent AbbVie's business from being adversely affected and future impacts remain uncertain.

The expiration or loss of patent protection and licenses may adversely affect AbbVie's future revenues and operating earnings.

8 unchanged sentences

AbbVie's principal patents and trademarks are described in greater detail in Item 1, "Business—Intellectual Property Protection and Regulatory Exclusivity" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations," and litigation regarding these patents is described in Item 3, "Legal Proceedings." The United States composition of matter patent for Humira, which is AbbVie's largest product and had worldwide net revenues of approximately $20.7 billion in 2021, expired in December 2016, and the equivalent European Union patent expired in the majority of European Union countries in October 2018.

| 2021 Form 10-K

AbbVie's major products could lose patent protection earlier than expected, which could adversely affect AbbVie's future revenues and operating earnings.

14 unchanged sentences

AbbVie cannot guarantee that it would be able to obtain license agreements on commercially reasonable terms.

2020 Form 10-K |

claim of patent or other intellectual property infringement could subject AbbVie to significant damages or an injunction preventing the manufacture, sale, or use of the affected AbbVie product or products.

A successful claim of patent or other intellectual property infringement could subject AbbVie to significant damages or an injunction preventing the manufacture, sale, or use of the affected AbbVie product or products.

Any of these events could have a material adverse effect on AbbVie's profitability and financial condition.

8 unchanged sentences

A high rate of failure in the biopharmaceutical industry is inherent in the research and development of new products, and failure can occur at any point in the research and development process, including after significant funds have been invested.

Products that appear promising in development may fail to reach the market for numerous reasons, including failure to demonstrate effectiveness, safety concerns, superior safety or efficacy of competing therapies, failure to achieve positive clinical or pre-clinical outcomes beyond the current standards of care, inability to obtain necessary regulatory approvals or delays in the approval of new products and new indications, limited scope of approved uses, excessive costs to manufacture, the failure to obtain or maintain intellectual property rights, or infringement of the intellectual property rights of others.

2021 Form 10-K |

inability to obtain necessary regulatory approvals or delays in the approval of new products and new indications, limited scope of approved uses, excessive costs to manufacture, the failure to obtain or maintain intellectual property rights, or infringement of the intellectual property rights of others.

Decisions about research studies made early in the development process of a pharmaceutical product candidate can affect the marketing strategy once such candidate receives approval.

10 unchanged sentences

This could result in the loss of intellectual property rights or protection, delay the development and sale of potential pharmaceutical products and lead to lengthy and expensive litigation, administrative proceedings or arbitration.

| 2020 Form 10-K

Biologics carry unique risks and uncertainties, which could have a negative impact on future results of operations.

16 unchanged sentences

AbbVie competes with other research-based pharmaceutical and biotechnology companies that discover, manufacture, market and sell proprietary pharmaceutical products and biologics.

For example, Humira competes with anti-TNF products and other competitive products intended to treat a number of disease states and Mavyret/Maviret competes with other available hepatitis C treatment options.

For example, Humira competes with anti-TNF products

| 2021 Form 10-K

and other competitive products intended to treat a number of disease states and Mavyret/Maviret competes with other available hepatitis C treatment options.

In addition, in the past few years, a number of other companies have started to develop, have successfully developed and/or are currently marketing products that are being positioned as competitors to Botox.

8 unchanged sentences

If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred.

2020 Form 10-K |

AbbVie uses a number of products in its pharmaceutical and biologic manufacturing processes that are sourced from single suppliers, and an interruption in the supply of those products could adversely affect AbbVie's business and results of operations.

16 unchanged sentences

For example, AbbVie may voluntarily provide or be required to provide updated information on a product's label or narrow its approved indication, either of which could reduce the product's market acceptance.

If safety or efficacy issues with an AbbVie product arise, sales of the product could be halted by AbbVie or by regulatory authorities and regulatory action could be taken by such regulatory authorities.

If safety or efficacy issues with an AbbVie product arise, sales of the product could be halted by AbbVie or by regulatory authorities and regulatory action could be

2021 Form 10-K |

taken by such regulatory authorities.

Safety or efficacy issues affecting suppliers' or competitors' products also may reduce the market acceptance of AbbVie's products.

4 unchanged sentences

In the ordinary course of business, AbbVie is the subject of product liability claims and lawsuits alleging that AbbVie's products or the products of other companies that it promotes have resulted or could result in an unsafe condition for or injury to patients.

For example, lawsuits are pending against Allergan, AbbVie’s newly acquired subsidiary, and certain of its current and former officers alleging they made misrepresentations and omissions regarding Allergan’s textured breast implants.

For example, lawsuits are pending against Allergan, AbbVie’s recently acquired subsidiary, and certain of its current and former officers alleging they made misrepresentations and omissions regarding Allergan’s textured breast implants.

Product liability claims and lawsuits and safety alerts or product recalls, regardless of their ultimate outcome, may have a material adverse effect on AbbVie's business, results of operations and reputation and on its ability to attract and retain customers.

3 unchanged sentences

Adverse outcomes in such claims, legal proceedings and investigations may also adversely affect AbbVie’s business and results of operations.

Additionally, Allergan has been named as a defendant in approximately 3,100 matters relating to the promotion and sale of prescription opioid pain

| 2020 Form 10-K

relievers and additional suits may be filed.

Additionally, Allergan has been named as a defendant in approximately 3,130 matters relating to the promotion and sale of prescription opioid pain relievers and additional suits may be filed.

See Note 15, "Legal Proceedings and Contingencies" to the Consolidated Financial Statements included under Item 8, "Financial Statements and Supplementary Data." AbbVie cannot predict the outcome of these proceedings.

13 unchanged sentences

Various factors, including market factors and the ability of private payers to control patient access to products, may provide payers the leverage to negotiate higher or additional rebates or discounts that could have a material adverse effect on AbbVie's operations.

| 2021 Form 10-K

AbbVie is subject to numerous governmental regulations, and it can be costly to comply with these regulations and to develop compliant products and processes.

10 unchanged sentences

Any of these events could disrupt AbbVie's business and have a material adverse effect on its business and results of operations.

2020 Form 10-K |

Laws and regulations affecting government benefit programs could impose new obligations on AbbVie, require it to change its business practices, and restrict its operations in the future.

18 unchanged sentences

• potentially negative consequences from changes in or interpretations of tax laws;

2021 Form 10-K |

• political and economic instability, including as a result of the United Kingdom’s exit from the European Union and the COVID-19 pandemic;

4 unchanged sentences

• potential deterioration in the economic position and credit quality of certain non-U.S.

countries, including in Europe and Latin America;

• potential penalties or other adverse consequences for violations of anti-corruption, anti-bribery and other similar laws and regulations, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act.

Events contemplated by these risks may, individually or in the aggregate, have a material adverse effect on AbbVie's revenues and profitability.

| 2020 Form 10-K

If AbbVie does not effectively and profitably commercialize its products, AbbVie's revenues and financial condition could be adversely affected.

15 unchanged sentences

In 2021, three wholesale distributors (McKesson Corporation, Cardinal Health, Inc.

and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's sales in the United States.

and AmerisourceBergen Corporation) accounted for substantially all of AbbVie's pharmaceutical product sales in the United States.

If one of its significant wholesale distributors encounters financial or other difficulties, such distributor may decrease the amount of business that it does with AbbVie, and AbbVie may be unable to collect all the amounts that the distributor owes it on a timely basis or at all, which could negatively impact AbbVie's business and results of operations.

| 2021 Form 10-K

AbbVie has debt obligations that could adversely affect its business and its ability to meet its obligations.

10 unchanged sentences

If AbbVie loses its investment grade credit rating or adequate funds are not available on acceptable terms, AbbVie may be unable to fund its expansion, successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect AbbVie's business.

2020 Form 10-K |

raises additional funds by issuing debt or entering into credit facilities, it may be subject to limitations on its operations due to restrictive covenants.

If AbbVie raises additional funds by issuing debt or entering into credit facilities, it may be subject to limitations on its operations due to restrictive covenants.

Failure to comply with these covenants could adversely affect AbbVie's business.

2 unchanged sentences

These systems are potentially vulnerable to malicious intrusion, random attack, loss of data privacy, disruption, degradation or breakdown.

Data privacy or security breaches by employees or others have resulted, and may in the future result, in the failure of critical business operations or may cause sensitive data, including intellectual property, trade secrets or personal information belonging to AbbVie, its patients, customers or business partners, to be exposed to unauthorized persons or to the public.

Data privacy or security breaches by employees or others may in the future result in the failure of critical business operations.

Such breaches may cause sensitive data, including intellectual property, trade secrets or personal information belonging to AbbVie, its patients, customers or business partners, to be exposed to unauthorized persons or to the public.

To date, AbbVie’s business or operations have not been materially impacted by such incidents.

14 unchanged sentences

A goodwill or IPR&D impairment, if any, would be recorded in operating income and could have a material adverse effect on AbbVie’s results of operations and financial condition.

Failure to attract and retain highly qualified personnel could affect AbbVie’s ability to successfully develop and commercialize products.

AbbVie’s success is largely dependent on its continued ability to attract and retain highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical research and development (R&D), governmental regulation and commercialization.

2021 Form 10-K |

Failure to attract, develop and retain highly qualified personnel could affect AbbVie’s ability to successfully develop and commercialize products.

AbbVie’s success is largely dependent on its continued ability to attract, develop and retain diverse, highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical research and development (R&D), governmental regulation and commercialization.

Competition for qualified personnel in the biopharmaceutical field is intense.

5 unchanged sentences

and for contingent liabilities such as litigation and contingent consideration, the absence of a recorded amount, or an amount recorded at the minimum, compared to the actual amount;

| 2020 Form 10-K

• changes in the rate of inflation (including the cost of raw materials, commodities and supplies), interest rates, market value of AbbVie's equity investments and the performance of investments held by it or its employee benefit trusts;

2 unchanged sentences

• changes in the ability of third parties that provide information technology, accounting, human resources, payroll and other outsourced services to AbbVie to meet their contractual obligations to AbbVie;

• business interruptions stemming from natural disasters, such as climate change, earthquakes, hurricanes, flooding, fires, or efforts taken by third parties to prevent or mitigate such disasters;

• changes in business, economic and political conditions, including:

16 unchanged sentences

From time to time, AbbVie will issue additional options or other stock-based awards to its employees under AbbVie's employee benefits plans.

| 2021 Form 10-K

In addition, AbbVie's amended and restated certificate of incorporation authorizes AbbVie to issue, without the approval of AbbVie's stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over AbbVie's common stock respecting dividends and distributions, as AbbVie's board of directors generally may determine.

7 unchanged sentences

• the division of AbbVie's board of directors into three classes of directors, with each class serving a staggered three-year term;

2020 Form 10-K |

• a provision that stockholders may only remove directors for cause;

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors