What changed in this filing

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Item 1. Financial Statements

2022-05-06 compared with 2021-11-02 · 147 added, 330 removed, 646 unchanged (42% of the section changed)

3 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in millions, except per share data) 2022 2021

3 unchanged sentences

Research and development 1,497 1,667

Acquired in-process research and development 390 45 557 898

Other operating expense, net 500 — 432 —

Acquired IPR&D and milestones 145 185

Total operating costs and expenses 8,821 8,907

2 unchanged sentences

Net foreign exchange loss 25 9

Other expense, net 21 115 2,284 989

Other income, net ( 776 ) ( 395 )

Earnings before income tax expense 4,929 3,867

16 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

Net earnings $ 4,493 $ 3,555

Foreign currency translation adjustments, net of tax expense (benefit) of $( 8 ) for the three months and $( 32 ) for the nine months ended September 30, 2021 and $ 15 for the three months and $ 11 for the nine months ended September 30, 2020

( 361 ) 512 ( 794 ) 726

Net investment hedging activities, net of tax expense (benefit) of $ 51 for the three months and $ 123 for the nine months ended September 30, 2021 and $( 85 ) for the three months and $( 125 ) for the nine months ended September 30, 2020

184 ( 314 ) 444 ( 455 )

Pension and post-employment benefits, net of tax expense (benefit) of $ 17 for the three months and $ 50 for the nine months ended September 30, 2021 and $ 10 for the three months and $ 37 for nine months ended September 30, 2020

67 35 196 134

Cash flow hedging activities, net of tax expense (benefit) of $ 13 for the three months and $ 16 for the nine months ended September 30, 2021 and $( 9 ) for the three months and $( 13 ) for the nine months ended September 30, 2020

Foreign currency translation adjustments, net of tax expense (benefit) of $( 7 ) for the three months ended March 31, 2022 and $( 25 ) for the three months ended March 31, 2021

( 231 ) ( 677 )

Other comprehensive income (loss) ( 53 ) 176 ( 39 ) 337

Net investment hedging activities, net of tax expense (benefit) of $ 37 for the three months ended March 31, 2022 and $ 103 for the three months ended March 31, 2021

Pension and post-employment benefits, net of tax expense (benefit) of $ 10 for the three months ended March 31, 2022 and $ 19 for the three months ended March 31, 2021

Cash flow hedging activities, net of tax expense (benefit) of $( 2 ) for the three months ended March 31, 2022 and $ 3 for the three months ended March 31, 2021

Other comprehensive loss ( 85 ) ( 178 )

Comprehensive income 4,408 3,377

6 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except share data) September 30, 2021 December 31, 2020

(in millions, except share data) March 31,

2022 December 31,

Current assets

22 unchanged sentences

Stockholders' equity

Common stock, $ 0.01 par value, 4,000,000,000 shares authorized, 1,801,781,004 shares issued as of September 30, 2021 and 1,792,140,764 as of December 31, 2020

Common stock held in treasury, at cost, 33,974,112 shares as of September 30, 2021 and 27,007,945 as of December 31, 2020

Common stock, $ 0.01 par value, 4,000,000,000 shares authorized, 1,811,430,573 shares issued as of March 31, 2022 and 1,803,195,293 as of December 31, 2021

Common stock held in treasury, at cost, 44,557,588 shares as of March 31, 2022 and 34,857,597 as of December 31, 2021

( 4,585 ) ( 3,143 )

11 unchanged sentences

(in millions) Common shares outstanding Common stock Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Noncontrolling interest Total

Balance at June 30, 2020 1,764 $ 18 $ ( 1,958 ) $ 16,953 $ 3,130 $ ( 3,435 ) $ 24 $ 14,732

Net earnings attributable to AbbVie Inc.

— — — — 2,308 — — 2,308

Other comprehensive income, net of tax — — — — — 176 — 176

Dividends declared — — — — ( 2,103 ) — — ( 2,103 )

Purchases of treasury stock — — ( 20 ) — — — — ( 20 )

Stock-based compensation plans and other 1 — 6 195 — — — 201

Change in noncontrolling interest — — — — — — ( 5 ) ( 5 )

Balance at September 30, 2020 1,765 $ 18 $ ( 1,972 ) $ 17,148 $ 3,335 $ ( 3,259 ) $ 19 $ 15,289

Balance at June 30, 2021 1,767 $ 18 $ ( 3,022 ) $ 17,936 $ 740 $ ( 3,103 ) $ 25 $ 12,594

Net earnings attributable to AbbVie Inc.

— — — — 3,179 — — 3,179

Other comprehensive loss, net of tax — — — — — ( 53 ) — ( 53 )

Dividends declared — — — — ( 2,319 ) — — ( 2,319 )

Purchases of treasury stock — — ( 6 ) — — — — ( 6 )

Stock-based compensation plans and other 1 — 8 172 — — — 180

Change in noncontrolling interest — — — — — — 2 2

Balance at September 30, 2021 1,768 $ 18 $ ( 3,020 ) $ 18,108 $ 1,600 $ ( 3,156 ) $ 27 $ 13,577

Balance at December 31, 2020 1,765 $ 18 $ ( 2,264 ) $ 17,384 $ 1,055 $ ( 3,117 ) $ 21 $ 13,097

1 unchanged sentence

— — — — 3,553 — — 3,553

Other comprehensive income, net of tax — — — — — 337 — 337

Other comprehensive loss, net of tax — — — — — ( 178 ) — ( 178 )

Dividends declared — — — — ( 2,316 ) — — ( 2,316 )

Common shares and equity awards issued for acquisition of Allergan plc

286 — 23,166 1,243 — — — 24,409

Purchases of treasury stock ( 7 ) — ( 787 ) — — — — ( 787 )

1 unchanged sentence

Change in noncontrolling interest — — — — — — 2 2

Balance at September 30, 2020 1,765 $ 18 $ ( 1,972 ) $ 17,148 $ 3,335 $ ( 3,259 ) $ 19 $ 15,289

Balance at March 31, 2021 1,766 $ 18 $ ( 3,017 ) $ 17,712 $ 2,292 $ ( 3,295 ) $ 23 $ 13,733

Balance at December 31, 2021 1,768 $ 18 $ ( 3,143 ) $ 18,305 $ 3,127 $ ( 2,899 ) $ 28 $ 15,436

6 unchanged sentences

Change in noncontrolling interest — — — — — — 3 3

Balance at September 30, 2021 1,768 $ 18 $ ( 3,020 ) $ 18,108 $ 1,600 $ ( 3,156 ) $ 27 $ 13,577

Balance at March 31, 2022 1,767 $ 18 $ ( 4,585 ) $ 18,731 $ 5,103 $ ( 2,984 ) $ 31 $ 16,314

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows (unaudited)

Nine months ended

September 30,

Three months ended

(in millions) (brackets denote cash outflows) 2022 2021

7 unchanged sentences

Stock-based compensation 306 269

Upfront costs and milestones related to collaborations 1,219 1,028

Gain on divestitures ( 68 ) —

Acquired IPR&D and milestones 145 185

Other, net 128 ( 20 )

7 unchanged sentences

Cash flows from investing activities

Acquisition of businesses, net of cash acquired — ( 38,138 )

Other acquisitions and investments ( 837 ) ( 1,072 )

Acquisitions and investments ( 185 ) ( 198 )

Acquisitions of property and equipment ( 162 ) ( 188 )

6 unchanged sentences

Repayments of long-term debt and finance lease obligations ( 4,879 ) —

Debt issuance costs — ( 20 )

Dividends paid ( 2,526 ) ( 2,322 )

8 unchanged sentences

Cash and equivalents, end of period $ 6,098 $ 9,755

Supplemental schedule of non-cash investing and financing activities

Issuance of common shares associated with acquisitions of businesses $ — $ 23,979

The accompanying notes are an integral part of these condensed consolidated financial statements.

12 unchanged sentences

Net revenues and net earnings for any interim period are not necessarily indicative of future or annual results.

Certain reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740) .

The standard includes simplifications related to accounting for income taxes including removing certain exceptions related to the approach for intraperiod tax allocation and the recognition of deferred tax liabilities for outside basis differences.

The standard also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

AbbVie adopted the standard in the first quarter of 2021.

The adoption did not have a material impact on its consolidated financial statements.

During the three months ended March 31, 2022, AbbVie revised its classification of development milestone expense associated with licensing and collaboration arrangements in the consolidated statement of earnings.

Milestone payments incurred prior to regulatory approval, which were previously included in research and development expense, are now presented as acquired IPR&D and milestones expense.

The reclassification decreased research and development expense and increased acquired IPR&D and milestones expense by $ 115 million for the three months ended March 31, 2021.

The company believes this presentation assists users of the financial statements to better understand the total upfront and subsequent development milestone payments incurred to acquire in-process research and development projects.

Prior periods have been reclassified to conform to the current period presentation.

The reclassification had no impact on total operating costs and expenses, operating earnings, net earnings, net earnings attributable to AbbVie, Inc., earnings per share, or total equity.

Certain other reclassifications were made to conform the prior period interim condensed consolidated financial statements to the current period presentation.

Note 2 Supplemental Financial Information

1 unchanged sentence

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

2 unchanged sentences

Interest expense, net $ 539 $ 622

(in millions) September 30, 2021 December 31, 2020

(in millions) March 31,

2022 December 31,

Finished goods $ 1,220 $ 932

2 unchanged sentences

Inventories $ 3,483 $ 3,128

2021 Form 10-Q |

Property and Equipment, Net

(in millions) September 30, 2021 December 31, 2020

(in millions) March 31,

2022 December 31,

Property and equipment, gross $ 10,879 $ 10,727

1 unchanged sentence

Property and equipment, net $ 5,075 $ 5,110

Depreciation expense was $ 223 million for the three months and $ 630 million for the nine months ended September 30, 2021 and $ 175 million for the three months and $ 439 million for the nine months ended September 30, 2020.

Depreciation expense was $ 198 million for the three months ended March 31, 2022 and $ 206 million for the three months ended March 31, 2021.

2022 Form 10-Q |

Note 3 Earnings Per Share

4 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in millions, except per share data) 2022 2021

18 unchanged sentences

Note 4 Licensing, Acquisitions and Other Arrangements

Acquisition of Allergan

On May 8, 2020, AbbVie completed its acquisition of Allergan plc (Allergan).

The combination created a diverse entity with leadership positions across immunology, hematologic oncology, aesthetics, neuroscience, eye care and women's health.

AbbVie's existing product portfolio and pipeline were enhanced with numerous Allergan assets and Allergan's product portfolio benefits from AbbVie's commercial strength, expertise and international infrastructure.

2021 Form 10-Q |

The acquisition of Allergan was accounted for as a business combination using the acquisition method of accounting.

The acquisition method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The valuation of assets acquired and liabilities assumed was finalized during the three months ended June 30, 2021.

Measurement period adjustments to the preliminary purchase price allocation during the six months ended June 30, 2021 included:

(i) an increase to intangible assets of $ 710 million;

(ii) an increase to deferred income tax liabilities of $ 148 million;

(iii) other individually insignificant adjustments for a net increase to identifiable net assets of $ 2 million;

and (iv) a corresponding decrease to goodwill of $ 564 million.

The measurement period adjustments primarily resulted from the completion of the valuation of certain license agreement intangible assets based on facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date.

These adjustments did not have a significant impact on AbbVie's results of operations for the nine months ended September 30, 2021 and would not have had a significant impact on prior period results if these adjustments had been made as of the acquisition date.

Other Licensing & Acquisitions Activity

Cash outflows related to other acquisitions and investments totaled $ 837 million for the nine months ended September 30, 2021 and $ 1.1 billion for the nine months ended September 30, 2020.

AbbVie recorded acquired in-process research and development (IPR&D) charges of $ 390 million for the three months and $ 557 million for the nine months ended September 30, 2021 and recorded acquired IPR&D charges of $ 45 million for the three months and $ 898 million for the nine months ended September 30, 2020.

Soliton, Inc.

In May 2021, AbbVie announced that it entered into a definitive agreement with Soliton, Inc.

(Soliton) to acquire Soliton and RESONIC, its Rapid Acoustic Pulse device which recently received U.S.

Food and Drug Administration (FDA) 510(k) clearance and is a non-invasive treatment for the short-term improvement in the appearance of cellulite.

Under the terms of the transaction agreement, AbbVie will pay $ 22.60 per share in cash for each outstanding share of Soliton for an enterprise value of approximately $ 550 million.

Closing of the transaction is subject to regulatory approval.

Calico Life Sciences LLC

In July 2021, AbbVie and Calico Life Sciences LLC (Calico) entered into an extension of their collaboration to discover, develop and bring to market new therapies for patients with age-related diseases, including neurodegeneration and cancer.

This is the second collaboration extension and builds on the partnership established in 2014 and extended in 2018.

Under the terms of the agreement, AbbVie and Calico will each contribute an additional $ 500 million and the term is extended for an additional three years.

AbbVie’s contribution is payable in two equal installments beginning in 2023.

Calico will be responsible for research and early development until 2025 and will advance collaboration projects into Phase 2a through 2030.

Following completion of the Phase 2a studies, AbbVie will have the option to exclusively license the collaboration compounds.

Upon exercise, AbbVie would be responsible for late-stage development and commercial activities.

Collaboration costs and profits will be shared equally by both parties post option exercise.

During the three months ended September 30, 2021, AbbVie recorded $ 500 million as other operating expense in the condensed consolidated statement of earnings related to its commitments under the agreement.

TeneoOne and TNB-383B

In September 2021, AbbVie acquired TeneoOne, an affiliate of Teneobio, Inc., and TNB-383B, a BCMA-targeting immunotherapeutic for the potential treatment of relapsed or refractory multiple myeloma (R/R MM).

In February 2019, AbbVie and TeneoOne entered a strategic transaction to develop and commercialize TNB-383B, a bispecific antibody that simultaneously targets BCMA and CD3 and is designed to direct the body's own immune system to target and kill BCMA-expressing tumor cells.

AbbVie exercised its exclusive right to acquire TeneoOne and TNB-383B based on an interim analysis of an ongoing Phase 1 study and accounted for the transaction as an asset acquisition.

Under the terms of the agreement, AbbVie made an exercise payment of $ 400 million which was recorded to IPR&D in the condensed consolidated statement of earnings for the three months ended September 30, 2021.

The agreement also included additional payments of up to $ 250 million upon the achievement of certain development, regulatory and commercial milestones.

REGENXBIO Inc.

In September 2021, AbbVie and REGENXBIO Inc.

(REGENXBIO) entered into a partnership to develop and commercialize RGX-314, an investigational gene therapy for wet age-related macular degeneration, diabetic retinopathy and other chronic retinal diseases.

Under the collaboration, REGENXBIO will be responsible for completion of the ongoing trials of RGX-314.

AbbVie and REGENXBIO will collaborate and share costs on additional trials of RGX-314.

AbbVie will lead the clinical development and commercialization of RGX-314 globally.

REGENXBIO and AbbVie will share equally in pre-tax profits from net revenues of RGX-314 in the U.S.

AbbVie will pay REGENXBIO tiered royalties on net revenues outside the U.S.

Upon closing, AbbVie will make an upfront payment of $ 370 million

Cash outflows related to acquisitions and investments totaled $ 185 million for the three months ended March 31, 2022 and $ 198 million for the three months ended March 31, 2021.

AbbVie recorded acquired IPR&D and milestones charges of $ 145 million for the three months ended March 31, 2022 and $ 185 million for the three months ended March 31, 2021.

Syndesi Therapeutics SA

In February 2022, AbbVie acquired Syndesi Therapeutics SA and its portfolio of novel modulators of the synaptic vesicle protein 2A (SV2A), including its lead molecule SDI-118 and accounted for the transaction as an asset acquisition.

SDI-118 is a small molecule currently in Phase 1b studies, which is being evaluated to target nerve terminals to enhance synaptic efficiency.

Under the terms of the agreement, AbbVie made an upfront payment of $ 130 million which was recorded to acquired IPR&D and milestones expense in the condensed consolidated statement of earnings in the first quarter of 2022.

The agreement also includes additional future payments of up to $ 870 million upon the achievement of certain development, regulatory and commercial milestones.

2022 Form 10-Q |

which will be recorded to IPR&D in the consolidated statement of earnings.

Closing of the transaction is subject to regulatory approval.

The agreement also included additional payments of up to $ 1.4 billion upon the achievement of certain development, regulatory and commercial milestones.

In June 2020, AbbVie and Genmab A/S (Genmab) entered into a collaboration agreement to jointly develop and commercialize three of Genmab's early-stage investigational bispecific antibody therapeutics and entered into a discovery research collaboration for future differentiated antibody therapeutics for the treatment of cancer.

Under the terms of the agreement, Genmab granted to AbbVie an exclusive license to its epcoritamab (DuoBody-CD3xCD20), DuoHexaBody-CD37 and DuoBody-CD3x5T4 programs.

For epcoritamab, the companies will share commercial responsibilities in the U.S.

and Japan, with AbbVie responsible for further global commercialization.

Genmab will record net revenues in the U.S.

and Japan, and the parties will share equally in pre-tax profits from these sales.

Genmab will receive tiered royalties on remaining global sales.

For the discovery research partnership, Genmab will conduct Phase 1 studies for these programs and AbbVie retains the right to opt-in to program development.

AbbVie made an upfront payment of $ 750 million, which was recorded to IPR&D in the condensed consolidated statement of earnings for the three months ended June 30, 2020.

The agreement also included additional payments of up to $ 3.2 billion upon the achievement of certain development, regulatory and commercial milestones for all programs.

Note 5 Collaborations

The company has ongoing transactions with other entities through collaboration agreements.

The following represent the significant collaboration agreements impacting the periods ended September 30, 2021 and 2020.

The following represent the significant collaboration agreements impacting the periods ended March 31, 2022 and 2021.

Collaboration with Janssen Biotech, Inc.

In December 2011, Pharmacyclics, a wholly-owned subsidiary of AbbVie, entered into a worldwide collaboration and license agreement with Janssen Biotech, Inc.

and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson, for the joint development and commercialization of Imbruvica, a novel, orally active, selective covalent inhibitor of Bruton’s tyrosine kinase (BTK) and certain compounds structurally related to Imbruvica, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States.

and its affiliates (Janssen), one of the Janssen Pharmaceutical companies of Johnson & Johnson, for the joint development and commercialization of Imbruvica, a novel, orally active, selective covalent inhibitor of Bruton’s tyrosine kinase and certain compounds structurally related to Imbruvica, for oncology and other indications, excluding all immune and inflammatory mediated diseases or conditions and all psychiatric or psychological diseases or conditions, in the United States and outside the United States.

The collaboration provides Janssen with an exclusive license to commercialize Imbruvica outside of the United States and co-exclusively with AbbVie in the United States.

13 unchanged sentences

Other costs incurred under the collaboration are reported in their respective expense line items, net of Janssen's share.

2021 Form 10-Q |

The following table shows the profit and cost sharing relationship between Janssen and AbbVie:

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

2 unchanged sentences

Global - AbbVie's share of other costs (included in respective line items) 64 70

AbbVie’s receivable from Janssen, included in accounts receivable, net, was $ 298 million at September 30, 2021 and $ 283 million at December 31, 2020.

AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $ 471 million at September 30, 2021 and $ 562 million at December 31, 2020.

AbbVie’s receivable from Janssen, included in accounts receivable, net, was $ 336 million at March 31, 2022 and $ 294 million at December 31, 2021.

AbbVie’s payable to Janssen, included in accounts payable and accrued liabilities, was $ 401 million at March 31, 2022 and $ 509 million at December 31, 2021.

Collaboration with Genentech, Inc.

8 unchanged sentences

Royalties paid for Venclexta revenues outside the United States are also included in AbbVie’s cost of products sold.

2022 Form 10-Q |

The following table shows the profit and cost sharing relationship between Genentech and AbbVie:

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

7 unchanged sentences

Balance as of December 31, 2021 $ 32,379

Measurement period adjustments (a)

Foreign currency translation adjustments and other ( 264 )

Balance as of September 30, 2021 $ 32,296

(a) Measurement period adjustments relate to the acquisition of Allergan (see Note 4).

Foreign currency translation adjustments ( 81 )

Balance as of March 31, 2022 $ 32,298

The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist.

As of September 30, 2021, there were no accumulated goodwill impairment losses.

2021 Form 10-Q |

As of March 31, 2022, there were no accumulated goodwill impairment losses.

Intangible Assets, Net

The following table summarizes intangible assets:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(in millions) Gross

7 unchanged sentences

Total definite-lived intangible assets 97,304 ( 23,988 ) 73,316 97,432 ( 22,151 ) 75,281

Indefinite-lived research and development 1,450 — 1,450 1,877 — 1,877

Indefinite-lived intangible assets 670 — 670 670 — 670

Total intangible assets, net $ 97,974 $ ( 23,988 ) $ 73,986 $ 98,102 $ ( 22,151 ) $ 75,951

Definite-Lived Intangible Assets

The increase in the gross carrying amount of definite-lived intangible assets during the nine months ended September 30, 2021 was primarily due to the measurement period adjustments from the completion of the valuation of certain license agreements acquired in the Allergan acquisition.

See Note 4 for additional information regarding these adjustments.

Amortization expense was $ 1.9 billion for the three months and $ 5.9 billion for the nine months ended September 30, 2021 and $ 2.1 billion for the three months and $ 4.0 billion for the nine months ended September 30, 2020.

Amortization expense was $ 1.9 billion for the three months ended March 31, 2022 and $ 2.0 billion for the three months ended March 31, 2021.

Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets represents IPR&D associated with products that have not yet received regulatory approval.

Indefinite-lived intangible assets represent in-process research and development associated with products that have not yet received regulatory approval.

The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist.

3 unchanged sentences

To achieve these integration objectives, AbbVie expects to incur total cumulative charges of approximately $ 2 billion through 2022.

These costs will consist of severance and employee benefit costs (cash severance, non-cash severance including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses.

These costs consist of severance and employee benefit costs (cash severance, non-cash severance including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses.

2022 Form 10-Q |

The following table summarizes the charges associated with the Allergan acquisition integration plan:

1 unchanged sentence

Three months ended

September 30, Nine months ended

September 30, Three months ended

September 30, Nine months ended

September 30,

March 31, Three months ended

(in millions) 2022 2021 2022 2021

3 unchanged sentences

Total charges $ 8 $ 23 $ 102 $ 116

2021 Form 10-Q |

The following table summarizes the cash activity in the recorded liability associated with the integration plan for the nine months ended September 30, 2021:

The following table summarizes the cash activity in the recorded liability associated with the integration plan for the three months ended March 31, 2022:

(in millions) Severance and employee benefits Other integration

Accrued balance as of December 31, 2021

Charges 51 326

Payments and other adjustments ( 22 ) ( 98 )

Accrued balance as of September 30, 2021 $ 226 $ 5

Accrued balance as of March 31, 2022 $ 208 $ 33

Other Restructuring

AbbVie recorded restructuring charges of $ 13 million for the three months and $ 56 million for the nine months ended September 30, 2021 and $ 11 million for the three months and $ 42 million for the nine months ended September 30, 2020.

The following table summarizes the cash activity in the restructuring reserve for the nine months ended September 30, 2021:

AbbVie recorded restructuring charges of $ 57 million for the three months ended March 31, 2022 and $ 38 million for the three months ended March 31, 2021.

The following table summarizes the cash activity in the restructuring reserve for the three months ended March 31, 2022:

(in millions)

2 unchanged sentences

Payments and other adjustments ( 9 )

Accrued balance as of September 30, 2021 $ 53

Accrued balance as of March 31, 2022 $ 72

Note 8 Financial Instruments and Fair Value Measures

3 unchanged sentences

Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity.

These contracts, with notional amounts totaling $ 1.5 billion at September 30, 2021 and December 31, 2020, are designated as cash flow hedges and are recorded at fair value.

These contracts, with notional amounts totaling $ 904 million at March 31, 2022 and $ 1.1 billion at December 31, 2021, are designated as cash flow hedges and are recorded at fair value.

The durations of these forward exchange contracts were generally less than 18 months.

Accumulated gains and losses as of September 30, 2021 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

Accumulated gains and losses as of March 31, 2022 are reclassified from accumulated other comprehensive income (loss) (AOCI) and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

In the third quarter of 2019, the company entered into treasury rate lock agreements with notional amounts totaling $ 10.0 billion to hedge exposure to variability in future cash flows resulting from changes in interest rates related to the issuance of long-term debt in connection with the acquisition of Allergan.

The treasury rate lock agreements were designated as cash flow hedges and recorded at fair value.

The agreements were net settled upon issuance of the senior notes in November 2019 and the resulting net gain was recognized in other comprehensive income (loss).

The agreements were net settled upon issuance of the senior notes in November 2019 and the resulting net gain was recognized in other comprehensive loss.

This gain is reclassified to interest expense, net over the term of the related debt.

The company is party to interest rate swap contracts designated as cash flow hedges with notional amounts totaling $ 1.5 billion at September 30, 2021 and $ 2.3 billion at December 31, 2020.

2022 Form 10-Q |

The company is a party to interest rate swap contracts designated as cash flow hedges with notional amounts totaling $ 750 million at March 31, 2022 and December 31, 2021.

The effect of the hedge contracts is to change a floating-rate interest obligation to a fixed rate for that portion of the floating-rate debt.

3 unchanged sentences

Resulting gains or losses are reflected in net foreign exchange gain or loss in the condensed consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed.

These contracts had notional amounts totaling $ 8.1 billion at September 30, 2021 and $ 8.6 billion at December 31, 2020.

2021 Form 10-Q |

These contracts had notional amounts totaling $ 7.0 billion at March 31, 2022 and $ 8.2 billion at December 31, 2021.

The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates.

The company had foreign currency forward exchange contracts with notional amounts totaling € 4.3 billion at September 30, 2021 and € 971 million at December 31, 2020.

The company also had an aggregate principal amount of senior Euro notes designated as net investment hedges of € 5.9 billion at September 30, 2021 and € 6.6 billion at December 31, 2020.

The company had foreign currency forward exchange contracts designated as net investment hedges with notional amounts totaling € 4.3 billion at March 31, 2022 and December 31, 2021.

The company also had an aggregate principal amount of senior Euro notes designated as net investment hedges of € 5.9 billion at March 31, 2022 and December 31, 2021.

The company uses the spot method of assessing hedge effectiveness for derivative instruments designated as net investment hedges.

Realized and unrealized gains and losses from these hedges are included in AOCI and the initial fair value of hedge components excluded from the assessment of effectiveness is recognized in interest expense, net over the life of the hedging instrument.

The company is party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 3.8 billion at September 30, 2021 and $ 4.8 billion December 31, 2020.

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 4.5 billion at March 31, 2022 and December 31, 2021.

The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt.

4 unchanged sentences

Derivatives in liability position

(in millions) Balance sheet caption September 30, 2021 December 31, 2020 Balance sheet caption September 30, 2021 December 31, 2020

(in millions) Balance sheet caption March 31, 2022 December 31, 2021 Balance sheet caption March 31, 2022 December 31, 2021

Foreign currency forward exchange contracts

Designated as cash flow hedges Prepaid expenses and other $ 28 $ 51 Accounts payable and accrued liabilities $ 6 $ 2

Designated as cash flow hedges Other assets — — Other long-term liabilities — 6

Designated as net investment hedges Prepaid expenses and other 48 149 Accounts payable and accrued liabilities — —

Designated as net investment hedges Other assets 47 15 Other long-term liabilities 4 —

Not designated as hedges Prepaid expenses and other 63 26 Accounts payable and accrued liabilities 29 13

1 unchanged sentence

Designated as cash flow hedges Prepaid expenses and other — — Accounts payable and accrued liabilities 1 7

Designated as cash flow hedges Other assets — — Other long-term liabilities 12 20

Designated as fair value hedges Prepaid expenses and other — 7 Accounts payable and accrued liabilities — —

Designated as fair value hedges Other assets — 26 Other long-term liabilities 173 15

2 unchanged sentences

2022 Form 10-Q |

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss):

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive loss:

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

4 unchanged sentences

Assuming market rates remain constant through contract maturities, the company expects to reclassify pre-tax gains of $ 52 million into cost of products sold for foreign currency cash flow hedges, pre-tax losses of $ 1 million into interest expense, net for interest rate swap cash flow hedges and pre-tax gains of $ 24 million into interest expense, net for treasury rate lock agreement cash flow hedges during the next 12 months.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive income (loss) pre-tax gains of $ 141 million for the three months and pre-tax gains of $ 397 million for the nine months ended September 30, 2021 and pre-tax losses of $ 340 million for the three months and pre-tax losses of $ 532 million for the nine months ended September 30, 2020.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized in other comprehensive loss pre-tax gains of $ 99 million for the three months ended March 31, 2022 and pre-tax gains of $ 382 million for the three months ended March 31, 2021.

The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings.

1 unchanged sentence

Three months ended

September 30, Nine months ended

September 30,

(in millions) Statement of earnings caption 2022 2021

14 unchanged sentences

2022 Form 10-Q |

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of September 30, 2021:

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of March 31, 2022:

Basis of fair value measurement

6 unchanged sentences

Equity securities 100 81 19 —

Interest rate swap contracts 68 — 68 —

Foreign currency contracts 186 — 186 —

20 unchanged sentences

Total liabilities $ 14,924 $ — $ 37 $ 14,887

Money market funds and time deposits are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves.

Equity securities consist of investments for which the fair values were determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs.

7 unchanged sentences

Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period.

The fair value of the company's contingent consideration liabilities as of September 30, 2021 was calculated using the following significant unobservable inputs:

The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:

March 31, 2022 December 31, 2021

(in millions) Range Weighted average (a)

Range Weighted average (a)

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(a) Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.

(b) Excluding approved indications, the estimated probability of payment ranged from 56 % to 89 % at September 30, 2021.

(b) Excluding approved indications, the estimated probability of payment ranged from 56 % to 89 % at March 31, 2022 and December 31, 2021.

There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.

The following table presents the changes in fair value of total contingent consideration liabilities which are measured using Level 3 inputs:

Nine months ended

September 30,

Three months ended

(in millions) 2022 2021

Beginning balance $ 14,887 $ 12,997

Additions (a)

Change in fair value recognized in net earnings ( 748 ) ( 343 )

1 unchanged sentence

Ending balance $ 13,818 $ 12,522

(a) Represents contingent consideration liabilities assumed in the Allergan acquisition.

The change in fair value recognized in net earnings is recorded in other expense, net in the condensed consolidated statements of earnings.

The change in fair value recognized in net earnings is recorded in other income, net in the condensed consolidated statements of earnings.

Certain financial instruments are carried at historical cost or some basis other than fair value.

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of September 30, 2021 are shown in the table below:

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of March 31, 2022 are shown in the table below:

Basis of fair value measurement

20 unchanged sentences

The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur.

The carrying amount of these investments was $ 132 million as of September 30, 2021 and $ 102 million as of December 31, 2020.

No significant cumulative upward or downward adjustments have been recorded for these investments as of September 30, 2021.

The carrying amount of these investments was $ 147 million as of March 31, 2022 and $ 149 million as of December 31, 2021.

No significant cumulative upward or downward adjustments have been recorded for these investments as of March 31, 2022.

Concentrations of Risk

Of total net accounts receivable, three U.S.

wholesalers accounted for 75 % as of September 30, 2021 and 72 % as of December 31, 2020, and substantially all of AbbVie’s net revenues in the United States were to these three wholesalers.

Humira (adalimumab) is AbbVie’s single largest product and accounted for approximately 37 % of AbbVie’s total net revenues for the nine months ended September 30, 2021 and 46 % for the nine months ended September 30, 2020.

wholesalers accounted for 74 % as of March 31, 2022 and 75 % as of December 31, 2021, and substantially all of AbbVie’s pharmaceutical product net revenues in the United States were to these three wholesalers.

Humira (adalimumab) is AbbVie’s single largest product and accounted for approximately 35 % of AbbVie’s total net revenues for the three months ended March 31, 2022 and 37 % for the three months ended March 31, 2021.

Debt and Credit Facilities

In April 2021, the company repaid $ 1.8 billion aggregate principal amount of 2.3 % senior notes that were scheduled to mature in May 2021.

In May 2021, the company repaid € 750 million aggregate principal amount of 0.5 % senior euro notes that were scheduled to mature in June 2021.

These repayments were made by exercising, under the terms of the notes, 30-day early redemptions at 100% of the principal amounts.

The company also repaid $ 750 million aggregate principal amount of floating rate senior notes at maturity in May 2021.

In September 2021, the company refinanced its $ 1.0 billion floating rate three-year term loan.

In January 2022, the company repaid $ 2.9 billion aggregate principal amount of 3.45 % senior notes that were scheduled to mature in March 2022.

This repayment was made by exercising, under the terms of the notes, 60-day early redemption at 100% of the principal amount.

In February 2022, the company refinanced its $ 2.0 billion floating rate five-year term loan.

As part of the refinancing, the company repaid the existing $ 2.0 billion term loan due May 2025 and borrowed $ 2.0 billion under a new term loan at a lower floating rate.

All other significant terms of the loan, including the maturity date, remained unchanged after the refinancing.

In September 2021, the company repaid $ 1.2 billion aggregate principal amount of 5.0 % senior notes that were scheduled to mature in December 2021.

This repayment was made by exercising, under the terms of the notes, 90-day early redemption at 100% of the principal amount.

In connection with the acquisition of Allergan, in May 2020, the company borrowed $ 3.0 billion under a $ 6.0 billion term loan credit agreement, consisting of a $ 1.0 billion floating rate three-year term loan tranche and a $ 2.0 billion floating rate five-year term loan tranche.

Subsequent to these borrowings, AbbVie terminated the unused commitments of the lenders under the term loan.

In May 2020, AbbVie completed its previously announced offers to exchange any and all outstanding notes of certain series issued by Allergan for new notes to be issued by AbbVie and cash.

Following the settlement of the exchange offers, AbbVie issued $ 14.0 billion and € 3.1 billion of new notes in exchange for the Allergan notes tendered in the exchange offers.

The aggregate principal amount of Allergan notes that remained outstanding following the settlement of the exchange offers was approximately $ 1.5 billion and € 635 million.

The exchange transaction was accounted for as a modification of the assumed debt instruments.

In September 2020, the company repaid $ 650 million aggregate principal amount of 3.375 % Allergan exchange notes at maturity.

In May 2020, the company also repaid $ 3.8 billion aggregate principal amount of 2.5 % senior notes at maturity.

2021 Form 10-Q |

Short-Term Borrowings

There were no commercial paper borrowings outstanding as of September 30, 2021 and December 31, 2020.

There were no commercial paper borrowings issued during the nine months ended September 30, 2021.

The weighted-average interest rate on commercial paper borrowings was 1.8 % for the nine months ended September 30, 2020.

Note 9 Post-Employment Benefits

3 unchanged sentences

Three months ended

September 30, Nine months ended

September 30, Three months ended

September 30, Nine months ended

September 30,

March 31, Three months ended

(in millions) 2022 2021 2022 2021

5 unchanged sentences

Net periodic benefit cost $ 68 $ 75 $ 15 $ 15

The components of net periodic benefit cost other than service cost are included in other expense, net in the condensed consolidated statements of earnings.

The components of net periodic benefit cost other than service cost are included in other income, net in the condensed consolidated statements of earnings.

2022 Form 10-Q |

Note 10 Equity

Stock-Based Compensation

In May 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (the Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program, including an increase in the number of shares available for issuance of 44 million shares and an extension of the program to May 2031.

In May 2021, stockholders of the company approved the AbbVie Amended and Restated 2013 Incentive Stock Program (the Amended Plan), which amends and restates the AbbVie 2013 Incentive Stock Program.

Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and the Amended Plan and is summarized as follows:

Three months ended

September 30, Nine months ended

September 30,

(in millions) 2022 2021

6 unchanged sentences

Stock Options

During the nine months ended September 30, 2021, primarily in connection with the company's annual grant, AbbVie granted 1.1 million stock options with a weighted-average grant-date fair value of $ 16.28 .

As of September 30, 2021, $ 12 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years .

2021 Form 10-Q |

During the three months ended March 31, 2022, primarily in connection with the company's annual grant, AbbVie granted 0.9 million stock options with a weighted-average grant-date fair value of $ 22.83 .

As of March 31, 2022, $ 15 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years .

RSUs and Performance Shares

During the nine months ended September 30, 2021, primarily in connection with the company's annual grant, AbbVie granted 7.4 million RSUs and performance shares with a weighted-average grant-date fair value of $ 105.39 .

As of September 30, 2021, $ 712 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years .

During the three months ended March 31, 2022, primarily in connection with the company's annual grant, AbbVie granted 5.6 million RSUs and performance shares with a weighted-average grant-date fair value of $ 145.54 .

As of March 31, 2022, $ 955 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next two years .

Cash Dividends

11 unchanged sentences

Shares repurchased under this program are recorded at acquisition cost, including related expenses, and are available for general corporate purposes.

AbbVie repurchased 5 million shares for $ 550 million during the nine months ended September 30, 2021 and 6 million shares for $ 500 million during the nine months ended September 30, 2020.

AbbVie's remaining stock repurchase authorization was approximately $ 2.6 billion as of September 30, 2021.

AbbVie repurchased 8 million shares for $ 1.1 billion during the three months ended March 31, 2022 and 5 million shares for $ 550 million during the three months ended March 31, 2021.

AbbVie's remaining stock repurchase authorization was approximately $ 1.4 billion as of March 31, 2022.

2022 Form 10-Q |

Accumulated Other Comprehensive Loss

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2021:

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2022:

(in millions) Foreign currency

8 unchanged sentences

Net current-period other comprehensive income (loss) ( 231 ) 130 28 ( 12 ) ( 85 )

Balance as of September 30, 2021 $ ( 211 ) $ ( 346 ) $ ( 2,871 ) $ 272 $ ( 3,156 )

Other comprehensive loss for the nine months ended September 30, 2021 included foreign currency translation adjustments totaling a loss of $ 794 million and the offsetting impact of net investment hedging activities totaling a gain of $ 444 million, which were principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets.

2021 Form 10-Q |

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2020:

Balance as of March 31, 2022 $ ( 801 ) $ 39 $ ( 2,518 ) $ 296 $ ( 2,984 )

Other comprehensive loss for the three months ended March 31, 2022 included foreign currency translation adjustments totaling a loss of $ 231 million and the offsetting impact of net investment hedging activities totaling a gain of $ 130 million, which were principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets.

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2021:

(in millions) Foreign currency

8 unchanged sentences

Net current-period other comprehensive income (loss) ( 677 ) 374 79 46 ( 178 )

Balance as of September 30, 2020 $ ( 202 ) $ ( 446 ) $ ( 2,831 ) $ 220 $ ( 3,259 )

Other comprehensive income for the nine months ended September 30, 2020 included foreign currency translation adjustments totaling a gain of $ 726 million and the offsetting impact of net investment hedging activities totaling a loss of $ 455 million, which were principally due to the impact of the strengthening of the Euro on the translation of the company’s Euro-denominated assets.

Balance as of March 31, 2021 $ ( 94 ) $ ( 416 ) $ ( 2,988 ) $ 203 $ ( 3,295 )

Other comprehensive loss for the three months ended March 31, 2021 included foreign currency translation adjustments totaling a loss of $ 677 million and the offsetting impact of net investment hedging activities totaling a gain of $ 374 million, which were principally due to the impact of the weakening of the Euro on the translation of the company’s Euro-denominated assets.

2022 Form 10-Q |

The following table presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:

Three months ended

September 30, Nine months ended

September 30,

(in millions) (brackets denote gains) 2022 2021

6 unchanged sentences

Amortization of actuarial losses and other (b)

$ 71 $ 63 $ 214 $ 188

Tax benefit ( 12 ) ( 14 )

2 unchanged sentences

Losses (gains) on foreign currency forward exchange contracts (c)

$ 28 $ ( 15 ) $ 62 $ ( 15 )

Gains on treasury rate lock agreements (a)

( 6 ) ( 6 ) ( 18 ) ( 18 )

Losses on interest rate swap contracts (a)

5 unchanged sentences

Note 11 Income Taxes

The effective tax rate was 14 % for the three and nine months ended September 30, 2021 compared to 7 % for the three and nine months ended September 30, 2020.

The effective tax rate was 9 % for the three months ended March 31, 2022 compared to 8 % for the three months ended March 31, 2021.

The effective tax rate in each period differed from the U.S.

statutory tax rate of 21 % principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions and collaborations.

The increase in the effective tax rate for the three and nine months ended September 30, 2021 over the prior year was primarily due to the jurisdictional mix of earnings resulting from collaboration activities and accretion on contingent consideration in 2021.

statutory tax rate of 21 % principally due to the impact of foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions, business development activities and accretion on contingent consideration.

The increase in the effective tax rate for the three months ended March 31, 2022 over the prior year was primarily due to differences in the company’s jurisdictional mix of earnings.

Due to the potential for resolution of federal, state and foreign examinations and the expiration of various statutes of limitations, it is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next 12 months by up to $ 244 million.

2021 Form 10-Q |

Note 12 Legal Proceedings and Contingencies

2 unchanged sentences

Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded.

For litigation matters discussed below for which a loss is probable or reasonably possible, the company is unable to estimate the possible loss or range of loss, if any, beyond the amounts accrued.

Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie.

While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows.

Subject to certain exceptions specified in the separation agreement by and between Abbott Laboratories (Abbott) and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters.

Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters.

2022 Form 10-Q |

Antitrust Litigation

7 unchanged sentences

In August 2019, the court certified a class of direct purchasers of Niaspan.

In June 2020 and August 2021, the court denied the end-payors' motions to certify a class.

In June 2020 and August 2021, the court denied the end-payors' motion to certify a class.

In October 2016, the Orange County, California District Attorney’s Office filed a lawsuit on behalf of the State of California regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees.

In September 2014, the Federal Trade Commission (FTC) filed a lawsuit, FTC v.

AbbVie Inc., et al., against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that 2011 patent litigation with two generic companies regarding AndroGel was sham litigation and the settlements of that litigation violated federal antitrust law.

In May 2015, the court dismissed the FTC’s settlement-related claim.

In June 2018, following a bench trial, the court found for the FTC on its sham litigation claim and ordered a disgorgement remedy of $ 448 million, plus prejudgment interest.

The court denied the FTC’s request for injunctive relief.

In September 2020, the United States Court of Appeals for the Third Circuit reversed the district court’s finding of sham litigation with respect to one generic company and affirmed with respect to the other but held the FTC lacked authority to obtain a disgorgement remedy and vacated the district court’s award.

The Third Circuit also affirmed the district court’s denial of the FTC’s injunction request and reinstated the FTC’s settlement-related claim for further proceedings in the district court.

In July 2021, the FTC voluntarily dismissed the remaining claims in its lawsuit with prejudice.

In August 2019, direct purchasers of AndroGel filed a lawsuit, King Drug Co.

1 unchanged sentence

AbbVie Inc., et al., against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that 2006 patent litigation settlements and related agreements by Solvay Pharmaceuticals, Inc.

(a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) with three generic companies violated federal antitrust law, and also making allegations similar to those in FTC v.

In May 2020, Perrigo Company and related entities filed a lawsuit against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, making sham litigation allegations similar to those in FTC v.

In October 2020, the Perrigo lawsuit was transferred to the United States District Court for New Jersey.

In September 2021, the New Jersey court granted AbbVie’s motion for judgment on the pleadings in the Perrigo lawsuit, dismissing it with prejudice.

(a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) with three generic companies violated federal antitrust law, and also alleging that 2011 patent litigation by Abbott with two generic companies regarding AndroGel was sham litigation and the settlements of those litigations violated federal antitrust law.

In May 2020, Perrigo Company and related entities filed a lawsuit against AbbVie and others, alleging that Abbott’s 2011 AndroGel patent lawsuit filed against Perrigo was sham litigation.

In September 2021, the United States District Court for the District of New Jersey granted AbbVie's motion for judgment on the pleadings in the Perrigo lawsuit, dismissing it with prejudice.

Perrigo has appealed the dismissal.

Between March and May 2019, 12 putative class action lawsuits were filed in the United States District Court for the Northern District of Illinois by indirect Humira purchasers, alleging that AbbVie’s settlements with biosimilar manufacturers and AbbVie’s Humira patent portfolio violated state and federal antitrust laws.

3 unchanged sentences

The plaintiffs have appealed the dismissal.

2021 Form 10-Q |

Lawsuits are pending against Forest Laboratories, LLC and others generally alleging that 2009 and 2010 patent litigation settlements involving Namenda entered into between Forest and generic companies and other conduct by Forest involving Namenda, violated state antitrust, unfair and deceptive trade practices, and unjust enrichment laws.

Lawsuits are pending against Forest Laboratories, LLC, an AbbVie subsidiary, and others generally alleging that 2009 and 2010 patent litigation settlements involving Namenda entered into between Forest and generic companies and other conduct by Forest involving Namenda, violated state antitrust, unfair and deceptive trade practices, and unjust enrichment laws.

Plaintiffs generally seek monetary damages, injunctive relief and attorneys’ fees.

1 unchanged sentence

Namenda Indirect Purchaser Antitrust Litigation in the United States District Court for the Southern District of New York.

Lawsuits are pending against Allergan Inc.

generally alleging that Allergan’s petitioning to the U.S.

Lawsuits are pending against Allergan Inc., an Allergan subsidiary, generally alleging that Allergan’s petitioning to the U.S.

Patent Office and Food and Drug Administration and other conduct by Allergan involving Restasis violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws.

2 unchanged sentences

Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litigation, MDL No.

In May 2021, the parties reached an agreement to settle this matter that is subject to court approval.

In May 2021, the parties reached an agreement to settle this matter that is subject to final court approval.

Lawsuits are pending against Forest Laboratories, LLC and others generally alleging that 2012 and 2013 patent litigation settlements involving Bystolic with six generic manufacturers violated federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws.

3 unchanged sentences

Government Proceedings

Lawsuits are pending against Allergan and other defendants generally alleging that they improperly marketed and/or distributed prescription opioid products.

Lawsuits are pending against Allergan and several other manufacturers generally alleging that they improperly promoted and sold prescription opioid products.

Approximately 3,146 matters are pending against Allergan.

1 unchanged sentence

National Prescription Opiate Litigation, MDL No.

Approximately 300 of the claims are pending in various state courts.

The plaintiffs in these cases, which include states, counties, cities, other municipal entities, Native American tribes, union trust funds and other third-party payors, private hospitals, and personal injury claimants, generally seek compensatory and punitive damages.

Approximately 257 matters are pending in various state courts.

The plaintiffs in these cases, which include states, counties, cities, other municipal entities, Native American tribes, union trust funds and other third-party

2022 Form 10-Q |

payors, private hospitals and personal injury claimants, generally seek compensatory and punitive damages.

In March 2022, Allergan reached settlements with the States of Florida and Rhode Island and their political subdivisions.

Allergan previously reached settlements with other plaintiffs.

In July 2019, the New Mexico Attorney General filed a lawsuit, State of New Mexico ex rel.

7 unchanged sentences

The court granted motions dismissing the claims of three investment-fund plaintiffs, which they appealed.

In March 2021, in the first of those appeals, the dismissal was affirmed.

One of these plaintiffs refiled its lawsuit in New York state court in June 2020 while the appeal of its dismissal in Illinois is pending.

In November 2020, the New York Supreme Court for the County of New York dismissed that lawsuit, which is being appealed.

One appeal was dismissed with prejudice in August 2021.

In the other two appeals, the Illinois Appellate Court affirmed the dismissal of one in March 2021 and affirmed the dismissal of the other in February 2022.

One of these plaintiffs refiled its lawsuit in the New York Supreme Court for the County of New York, where it was dismissed in November 2020, and that dismissal was affirmed by the Supreme Court of New York, Appellate Division, in January 2022.

In September 2021, the Illinois court granted AbbVie's motion for summary judgment against all remaining plaintiffs on all the remaining claims, dismissing them with prejudice.

The plaintiffs have appealed the dismissals.

In October 2018, a federal securities purported class action lawsuit, Holwill v.

Those plaintiffs have appealed the dismissals.

In October 2018, a federal securities lawsuit, Holwill v.

AbbVie Inc., et al ., was filed in the United States District Court for the Northern District of Illinois against AbbVie, its chief executive officer and former chief financial officer, alleging that reasons stated for Humira sales growth in financial filings between 2013 and 2018 were misleading because they omitted alleged misconduct in connection with Humira patient and reimbursement support services and other services and items of value that allegedly induced Humira prescriptions.

5 unchanged sentences

In September 2019, the court partially granted Allergan's motion to dismiss.

In September 2020, the court denied plaintiffs’ class certification motion because it found the lead plaintiff to be an inadequate representative of the proposed class but allowed another putative class member to propose itself as a new lead plaintiff.

In December 2020, the court appointed a new lead plaintiff.

In September 2021, the court granted plaintiffs' motion to certify a class.

2021 Form 10-Q |

Lawsuits are pending against Allergan and certain of its current and former officers alleging they made misrepresentations and omissions regarding Allergan’s former Actavis generics unit and its alleged anticompetitive conduct with other generic drug companies.

The lawsuits were filed by Allergan shareholders and consist of three purported class actions and one individual action seeking monetary damages and attorney’s fees that have been consolidated in the U.S.

District Court for the District of New Jersey as In re:

Allergan Generic Drug Pricing Securities Litigation .

In July 2021, the parties reached an agreement to settle the class action lawsuits, which is pending court approval.

Product Liability and General Litigation

15 unchanged sentences

Litigation on the remaining patents is stayed.

In May 2021, Alvotech hf.

In October 2021, the May 2021 declaratory judgment action filed by Alvotech hf.

subsidiary Alvotech USA, Inc.

filed a declaratory judgment action in the United States Eastern District of Virginia seeking a declaration that the same patents at issue in AbbVie’s April 2021 Illinois case are invalid or not infringed.

AbbVie has filed a motion to dismiss or transfer that case to the Northern District of Illinois.

in the United States Eastern District of Virginia was transferred to the Northern District of Illinois and subsequently dismissed.

In March 2022, the parties settled the case and it was dismissed without prejudice.

Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib tablets (a drug Pharmacyclics sells under the trademark Imbruvica).

5 unchanged sentences

which is in a global collaboration with Pharmacyclics concerning the development and marketing of Imbruvica, is the co-plaintiff in these suits.

2022 Form 10-Q |

Allergan USA, Inc., Allergan Sales, LLC, and Forest Laboratories Holdings Limited, wholly owned subsidiaries of AbbVie, are seeking to enforce patent rights relating to cariprazine (a drug sold under the trademark Vraylar).

16 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in millions)

2021 2020 2021 2020

Humira United States $ 3,993 $ 3,907

14 unchanged sentences

Total $ 473 $ 405

Botox Cosmetic (a)

United States $ 356 $ 237 $ 1,027 $ 384

Botox Cosmetic United States $ 413 $ 305

International 228 172

Total $ 641 $ 477

Juvederm Collection (a)

United States $ 159 $ 115 $ 478 $ 171

Juvederm Collection United States $ 148 $ 123

International 262 198

Total $ 410 $ 321

Other Aesthetics (a)

United States $ 305 $ 265 $ 968 $ 392

Other Aesthetics United States $ 285 $ 300

International 38 43

Total $ 323 $ 343

Botox Therapeutic (a)

United States $ 534 $ 429 $ 1,451 $ 683

Botox Therapeutic United States $ 500 $ 429

International 114 103

4 unchanged sentences

Total $ 121 $ 129

United States $ 162 $ 38 $ 369 $ 60

Other Neuroscience (a)

United States $ 166 $ 203 $ 489 $ 306

Ubrelvy United States $ 138 $ 81

Qulipta United States $ 11 $ —

Other Neuroscience United States $ 173 $ 156

International 4 4

2 unchanged sentences

Three months ended

September 30, Nine months ended

September 30,

(in millions)

2021 2020 2021 2020

Lumigan/Ganfort (a)

United States $ 63 $ 62 $ 201 $ 97

International 75 87 229 128

Total $ 138 $ 149 $ 430 $ 225

Alphagan/Combigan (a)

United States $ 89 $ 84 $ 271 $ 131

International 39 39 117 61

Total $ 128 $ 123 $ 388 $ 192

United States $ 305 $ 284 $ 884 $ 422

International 14 15 42 21

Total $ 319 $ 299 $ 926 $ 443

Other Eye Care (a)

United States $ 128 $ 119 $ 375 $ 173

Lumigan/Ganfort United States $ 67 $ 66

International 73 77

Total $ 140 $ 143

Women's Health

Lo Loestrin (a)

United States $ 105 $ 129 $ 300 $ 207

Alphagan/Combigan United States $ 70 $ 80

International 37 38

Total $ 107 $ 118

Orilissa/Oriahnn United States $ 37 $ 24 $ 102 $ 84

Restasis United States $ 235 $ 267

International 11 13

Total $ 246 $ 280

Other Women's Health (a)

United States

$ 57 $ 74 $ 153 $ 108

Other Eye Care United States $ 124 $ 117

International 154 159

5 unchanged sentences

Creon United States $ 287 $ 274

Lupron United States $ 134 $ 99 $ 456 $ 461

International 46 34 135 110

Total $ 180 $ 133 $ 591 $ 571

Linzess/Constella (a)

United States $ 253 $ 240 $ 728 $ 370

Linzess/Constella United States $ 233 $ 215

International 7 7

Total $ 240 $ 222

Synthroid United States $ 188 $ 189 $ 571 $ 577

All other (a)

$ 547 $ 829 $ 2,079 $ 1,972

All other $ 1,211 $ 1,476

Total net revenues $ 13,538 $ 13,010

(a) Net revenues include Allergan product revenues after the acquisition closing date of May 8, 2020.

2022 Form 10-Q |

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-Q

Item 1. Financial Statements