ABBV

devices) are also sold directly to physicians and other licensed healthcare providers. Although AbbVie's business does not have significant seasonality, AbbVie's product revenues may be affected by end customer and retail buying patterns, fluctuations in wholesaler inventory levels and other factors. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. In 2025, thre

DATA AbbVie Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (unaudited) Three months ended March 31, (in millions, except per share data) 2026 2025 Net revenues $ 15,002 $ 13,343 Cost of products sold 4,218 4,002 Selling, general and administrative 3,578 3,293 Research and development 2,472 2,067 Acquired IPR&D and milestones 744 248 Total operating costs and expenses 11,012 9,610 Operating earnings 3,990 3,733 Interest expense, net 645 627 Other expense, net 2,306 1,445 Earnings before income

protection and licenses, including the loss of exclusivity for any of our products and increased competition from generics and biosimilars, may adversely affect AbbVie's revenues and operating earnings. AbbVie relies on patent, trademark and other intellectual property protection in the discovery, development, manufacturing and sale of its products. In particular, patent protection is, in the aggregate, important in AbbVie's marketing of pharmaceutical products in the United States and most major markets outsid

through outstanding execution. AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas, ensuring strong commercial execution of new product launches as well as continued investment in key on-market products; (iii) continuing to invest in and expand its pipeline in support of o

through outstanding execution. AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches as well as continued investment in key on-market products; (iii) continuing to invest in and expand its pipeline in support o

DATA AbbVie Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (unaudited) Three months ended March 31, (in millions, except per share data) 2026 2025 Net revenues $ 15,002 $ 13,343 Cost of products sold 4,218 4,002 Selling, general and administrative 3,578 3,293 Research and development 2,472 2,067 Acquired IPR&D and milestones 744 248 Total operating costs and expenses 11,012 9,610 Operating earnings 3,990 3,733 Interest expense, net 645 627 Other expense, net 2,306 1,445 Earnings before income

through outstanding execution. AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas and ensuring strong commercial execution of new product launches as well as continued investment in key on-market products; (iii) continuing to invest in and expand its pipeline in support o

protection and licenses, including the loss of exclusivity for any of our products and increased competition from generics and biosimilars, may adversely affect AbbVie's revenues and operating earnings. AbbVie relies on patent, trademark and other intellectual property protection in the discovery, development, manufacturing and sale of its products. In particular, patent protection is, in the aggregate, important in AbbVie's marketing of pharmaceutical products in the United States and most major markets outsid

through outstanding execution. AbbVie intends to execute its strategy and advance its mission in a number of ways, including: (i) maximizing the benefits of a diversified revenue base with multiple long-term growth drivers; (ii) leveraging AbbVie's commercial strength and international infrastructure across therapeutic areas, ensuring strong commercial execution of new product launches as well as continued investment in key on-market products; (iii) continuing to invest in and expand its pipeline in support of o

devices) are also sold directly to physicians and other licensed healthcare providers. Although AbbVie's business does not have significant seasonality, AbbVie's product revenues may be affected by end customer and retail buying patterns, fluctuations in wholesaler inventory levels and other factors. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to retailers, pharmacies, patients or other customers. In 2025, thre

Cost-containment efforts by governments and private organizations are described in greater detail in Item 1, "Business—Regulation—Commercialization, Distribution and Manufacturing

2026 Form 10-Q | 29 Credit Risk AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad

See Part I, Item 1 “Business – Regulation – Commercialization, Distribution and Manufacturing,” Part I, Item 1A “Risk Factors” and Note 7 to the Consolidated Financial Statements for additional information

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes

(AbbVie or the company) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission

See Part I, Item 1 “Business – Regulation – Commercialization, Distribution and Manufacturing,” Part I, Item 1A “Risk Factors” and Note 7 to the Consolidated Financial Statements for additional information

2026 Form 10-Q | 29 Credit Risk AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad

Cost-containment efforts by governments and private organizations are described in greater detail in Item 1, "Business—Regulation—Commercialization, Distribution and Manufacturing

(AbbVie or the company) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes

For further discussion of PBM formulary practices and their impact on pricing and patient access, see "Pharmacy benefit managers and other supply chain intermediaries exert significant influence over pricing and patient access to our products" below

acceptable terms could be adversely affected if there is a material decline in the demand for the company’s products or in the solvency of its customers or suppliers, deterioration in the company’s key financial ratios or credit ratings or other material unfavorable changes in business conditions

acceptable terms could be adversely affected if there is a material decline in the demand for the company's products or in the solvency of its customers or suppliers, deterioration in the company's key financial ratios or credit ratings, or other material unfavorable changes in business conditions

Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, development, manufacturing and supply of products

Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products

For further discussion of PBM formulary practices and their impact on pricing and patient access, see "Pharmacy benefit managers and other supply chain intermediaries exert significant influence over pricing and patient access to our products" below

Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, development, manufacturing and supply of products

acceptable terms could be adversely affected if there is a material decline in the demand for the company’s products or in the solvency of its customers or suppliers, deterioration in the company’s key financial ratios or credit ratings or other material unfavorable changes in business conditions

Consistent with this structure, a global research and development and supply chain organization is responsible for the discovery, manufacturing and supply of products

acceptable terms could be adversely affected if there is a material decline in the demand for the company's products or in the solvency of its customers or suppliers, deterioration in the company's key financial ratios or credit ratings, or other material unfavorable changes in business conditions

has agreed to provide AbbVie a three-year exemption from tariffs and future price mandates

has agreed to provide AbbVie a three-year exemption from tariffs and future price mandates

research and development and capital investments in exchange for exemptions from tariffs and future pricing mandates during the three-year agreement period

research and development and capital investments in exchange for exemptions from tariffs and future pricing mandates during the three-year agreement period

has agreed to provide AbbVie a three-year exemption from tariffs and future price mandates

has agreed to provide AbbVie a three-year exemption from tariffs and future price mandates

the seizure or recall of a product, the suspension or revocation of the authority necessary for a product's production and sale and other civil or criminal sanctions, including fines and penalties

Similar to the requirements in Japan and 9 | 2025 Form 10-K China, certain countries (notably South Korea, Taiwan, India and Russia) also generally require that clinical studies that include data from patients in those countries be conducted in order to support local regulatory approval

Botox Cosmetic is approved for use in all major markets around the world and is approved for the treatment of masseter muscle prominence in China

Violations of such laws and regulations may be punishable by criminal and/or civil sanctions, including, in some instances, substantial fines, imprisonment and exclusion from participation in federal and state health care programs, including Medicare, Medicaid and Veterans Administration health programs

Under the terms of the agreement, AbbVie received an exclusive global license excluding China to develop, manufacture and commercialize RC148 (ABBV-1480), a novel investigational Programmed Cell Death-1 (PD-1)/Vascular Endothelial Growth Factor (VEGF)-targeted bispecific antibody in development for the treatment of multiple advanced solid tumors

of 2022 has and will continue to have a significant impact on AbbVie’s business. In January 2026, the U.S. Department of Health and Human Services, through Centers for Medicare and Medicaid Service, selected Botox as one of 15 medicines subject to government-set prices in Medicare Parts B and D beginning in 2028. U.S. Capital Investment In 2026, AbbVie announced an investment to build a pharmaceutical manufacturing campus in North Carolina. The campus will integrate advanced manufacturing and laboratory techn

tax payments in the current year. The Inflation Reduction Act of 2022 has and will continue to have a significant impact on how drugs are covered and paid for under the Medicare program, including through the creation of financial penalties for drugs whose price increases outpace inflation, the redesign of Medicare Part D benefits to shift a greater portion of the costs to manufacturers, and through government price-setting for certain Medicare Part B and Part D drugs. In 2023, the U.S. Department of Health an

Veterans Health Care Act, the U.S. Physician Payments Sunshine Act, the TRICARE program, the government pricing rules applicable to the Medicaid, Medicare Part B, 340B Drug Pricing Program and individual state laws relating to pricing and sales and marketing practices. The 340B Drug Pricing Program requires participating manufacturers to offer discounts to covered entities and growth in entities claiming entitlement to 340B pricing has increased the portion of our sales subject to such discounts. Manufacturer

for the one prescribed. In addition, the federal government follows a diagnosis-related group (DRG) payment system for certain institutional services provided under Medicare or Medicaid and has implemented a prospective payment system (PPS) for services delivered in hospital outpatient, nursing home and home health settings. DRG and PPS entitle a health care facility to a fixed 2025 Form 10-K | 10 reimbursement based on the diagnosis and/or procedure rather than actual costs incurred in patient treatment

loss $ 58 $ 21 $ 146 Other expense, net 5,793 3,240 4,677 Interest expense in 2025 increased compared to 2024 primarily due to the impact of higher effective interest rates

3,578 3,293 Research and development 2,472 2,067 Acquired IPR&D and milestones 744 248 Total operating costs and expenses 11,012 9,610 Operating earnings 3,990 3,733 Interest expense, net 645 627 Other expense, net 2,306 1,445 Earnings before income tax expense 1,039 1,661 Income tax expense 342 372 Net earnings 697 1,289 Net earnings attributable to noncontrolling interest 2 3 Net earnings attributable to AbbVie Inc. $ 695 $ 1,286 Per share data Basic earnings per share attributable to AbbVie Inc. $ 0.39 $

4 to the Condensed Consolidated Financial Statements for additional information. Other Non-Operating Expenses (Income) Three months ended March 31, (in millions) 2026 2025 Interest expense $ 717 $ 700 Interest income (72) (73) Interest expense, net $ 645 $ 627 Other expense, net $ 2,306 $ 1,445 Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $2.4 billion for the three months ended March 31, 2026 and $1.5 billion for the three months ended March 31, 2

These effects could cause a deterioration of AbbVie's credit rating and result in increased borrowing costs and interest expense

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 3

loss $ 58 $ 21 $ 146 Other expense, net 5,793 3,240 4,677 Interest expense in 2025 increased compared to 2024 primarily due to the impact of higher effective interest rates

to support AbbVie’s commercial paper program and enable the company to borrow funds to meet liquidity requirements on an unsecured basis at variable interest rates and contain various covenants

• inflation, recession and fluctuations in interest rates

to support AbbVie’s commercial paper program and enable the company to borrow funds to meet liquidity requirements on an unsecured basis at variable interest rates and contain various covenants

The company is a party to interest rate swap contracts designated as fair value hedges with notional amounts totaling $ 3

The Inflation Reduction Act of 2022 (IRA) requires: (i) the government to set prices for select high expenditure Medicare Part D drugs (prices effective beginning in 2026) and Part B drugs (prices effective beginning in 2028) that are more than nine years (for sma

loss $ 58 $ 21 $ 146 Other expense, net 5,793 3,240 4,677 Interest expense in 2025 increased compared to 2024 primarily due to the impact of higher effective interest rates

• inflation, recession and fluctuations in interest rates

Condensed Consolidated Statements of Comprehensive Income (unaudited) Three months ended March 31, (in millions) 2026 2025 Net earnings $ 697 $ 1,289 Foreign currency translation adjustments, net of tax expense (benefit) of $( 5 ) for the three months ended March 31, 2026 and $ 17 for the three months ended March 31, 2025 ( 204 ) 487 Net investment hedging activities, net of tax expense (benefit) of $ 43 fo

comparative local currency net revenues at the prior year's foreign exchange rates

local currency net revenues at the prior year’s foreign exchange rates

• fluctuations in currency exchange rates

Certain additional risks are inherent in conducting business outside the United States, including price and currency exchange controls, changes in currency exchange rates, limitations on participation in local enterprises, expropriation, nationalization and other governmental action

Certain additional risks are inherent in conducting business outside the United States, including price and currency exchange controls, changes in currency exchange rates, limitations on participation in local enterprises, expropriation, nationalization and other governmental action

• fluctuations in currency exchange rates

local currency net revenues at the prior year’s foreign exchange rates

Condensed Consolidated Statements of Comprehensive Income (unaudited) Three months ended March 31, (in millions) 2026 2025 Net earnings $ 697 $ 1,289 Foreign currency translation adjustments, net of tax expense (benefit) of $( 5 ) for the three months ended March 31, 2026 and $ 17 for the three months ended March 31, 2025 ( 204 ) 487 Net investment hedging activities, net of tax expense (benefit) of $ 43 fo

comparative local currency net revenues at the prior year's foreign exchange rates

by greater demand, increased patient access to health care, or other factors, AbbVie's revenues and operating earnings will be reduced. In the United States, European Union member states and other countries, AbbVie's business has experienced downward pressure on product pricing, and this pressure could increase in the future. AbbVie is subject to increasing public and legislative pressure with respect to pharmaceutical pricing. In the United States, practices of managed care organizations, and institutional

on the location to which products are sold, referred to as "Pillar One." Numerous countries have agreed to a statement in support of the OECD model rules and European Union member states have agreed to implement Pillar Two. This implementation includes aspects of legislation that were effective starting in 2024. In recent years, the OECD has issued Administrative Guidance, including the most recent side-by-side agreement released on January 5, 2026. The side-by-side agreement is intended to complement the OE

20 of the lawsuits are pending in various state courts. The plaintiffs in these lawsuits, which include 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. Of these approximately 320 lawsuits, approximately 20 of them are brought by counties, cities and other municipal entities, approximately 5 of which are in the process of being dismissed pursuant to

19 subunit. It is a biologic therapy approved to treat the following autoimmune diseases in the United States, Canada and Mexico (collectively, North America), the European Union and Japan: Condition Principal Markets Plaque psoriasis (moderate to severe) North America, European Union, Japan Psoriatic arthritis North America, European Union, Japan Crohn's disease (moderate to severe) North America, European Union, Japan Ulcerative colitis (moderate to severe) North America, European Union, Japan In psoriatic disea

on the location to which products are sold, referred to as "Pillar One." Numerous countries have agreed to a statement in support of the OECD model rules and European Union member states have agreed to implement Pillar Two. This implementation includes aspects of legislation that were effective starting in 2024. In recent years, the OECD has issued Administrative Guidance, including the most recent side-by-side agreement released on January 5, 2026. The side-by-side agreement is intended to complement the OE

19 subunit. It is a biologic therapy approved to treat the following autoimmune diseases in the United States, Canada and Mexico (collectively, North America), the European Union and Japan: Condition Principal Markets Plaque psoriasis (moderate to severe) North America, European Union, Japan Psoriatic arthritis North America, European Union, Japan Crohn's disease (moderate to severe) North America, European Union, Japan Ulcerative colitis (moderate to severe) North America, European Union, Japan In psoriatic disea

by greater demand, increased patient access to health care, or other factors, AbbVie's revenues and operating earnings will be reduced. In the United States, European Union member states and other countries, AbbVie's business has experienced downward pressure on product pricing, and this pressure could increase in the future. AbbVie is subject to increasing public and legislative pressure with respect to pharmaceutical pricing. In the United States, practices of managed care organizations, and institutional

20 of the lawsuits are pending in various state courts. The plaintiffs in these lawsuits, which include 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. Of these approximately 320 lawsuits, approximately 20 of them are brought by counties, cities and other municipal entities, approximately 5 of which are in the process of being dismissed pursuant to

The campus will integrate advanced manufacturing and laboratory technologies with artificial intelligence to support the production of immunology, neuroscience and oncology medicines

opportunities, focusing on high-performance skills and leadership training

AbbVie depends on information technology and a failure of, or significant disruption to, those systems, or a failure to adequately adopt emerging technologies such as artificial intelligence, could have a material adverse effect on AbbVie's business

AbbVie depends on information technology and a failure of, or significant disruption to, those systems, or a failure to adequately adopt emerging technologies such as artificial intelligence, could have a material adverse effect on AbbVie's business

The campus will integrate advanced manufacturing and laboratory technologies with artificial intelligence to support the production of immunology, neuroscience and oncology medicines

opportunities, focusing on high-performance skills and leadership training

Net revenues for Juvederm Collection decreased 3% for the three months ended March 31, 2026 primarily driven by decreased consumer demand, partially offset by favorable pricing due to customer loyalty program changes in the United States in the prior year and the timing of customer inventory stocking

Botox Cosmetic net revenues decreased 11% primarily driven by unfavorable pricing due to customer loyalty program changes, lower market share and decreased consumer demand, partially offset by the timing of customer inventory destocking in the prior year

Net revenues for Juvederm Collection decreased 3% for the three months ended March 31, 2026 primarily driven by decreased consumer demand, partially offset by favorable pricing due to customer loyalty program changes in the United States in the prior year and the timing of customer inventory stocking

Botox Cosmetic net revenues decreased 11% primarily driven by unfavorable pricing due to customer loyalty program changes, lower market share and decreased consumer demand, partially offset by the timing of customer inventory destocking in the prior year

regulatory requirements, changes in the types of products produced, physical limitations that could inhibit continuous supply, labor shortages, supply chain disruption, pandemics, man-made or natural disasters and environmental factors. If problems arise during the production of a batch of product, such batch of product may have to be discarded, and AbbVie may experience product shortages or incur added expenses. This could, among other things, lead to increased costs, lost revenue, damage to customer relation

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act (FFDCA), the Public Health Service Act (PHSA) and the regulations implementing these statutes

regulatory requirements, changes in the types of products produced, physical limitations that could inhibit continuous supply, labor shortages, supply chain disruption, pandemics, man-made or natural disasters and environmental factors. If problems arise during the production of a batch of product, such batch of product may have to be discarded, and AbbVie may experience product shortages or incur added expenses. This could, among other things, lead to increased costs, lost revenue, damage to customer relation

brand, image or goodwill due to increased use of social media platforms; • 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; and • changes in business, economic and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; pandemics and epidemics, the cost

schools; and the Employee Relief Program, which is financial assistance to support short term needs of employees when faced with large-scale disasters (e.g., a hurricane), individual disasters (e.g., a home fire) or financial hardship (e.g., the death of a spouse). Finally, AbbVie empowers managers and their teams with tools, tips and guidelines on effectively managing workloads and managing teams from a distance. New AbbVie employees are given a tailored onboarding experience for faster integration a

brand, image or goodwill due to increased use of social media platforms; • 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; and • changes in business, economic and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; pandemics and epidemics, the cost

schools; and the Employee Relief Program, which is financial assistance to support short term needs of employees when faced with large-scale disasters (e.g., a hurricane), individual disasters (e.g., a home fire) or financial hardship (e.g., the death of a spouse). Finally, AbbVie empowers managers and their teams with tools, tips and guidelines on effectively managing workloads and managing teams from a distance. New AbbVie employees are given a tailored onboarding experience for faster integration a

costs and bonus depreciation, and allow for full expensing of qualified production property. In addition, the legislation contains multiple effective dates and transition elections, with certain provisions effective in 2025 and others implemented through 2027. The 2025 Act also includes certain new health care provisions related to the orphan drug exclusion of the Inflation Reduction Act of 2022, and Medicaid, which have various effective dates. The new legislation had a favorable impact on cash tax payments in

to amend certain provisions in AbbVie's amended and restated certificate of incorporation and AbbVie's amended and restated by-laws relating to the number, term and election of AbbVie's directors, the filling of board vacancies, the calling of special meetings of stockholders and director and officer indemnification provisions. In addition, Section 203 of the Delaware General Corporation Law provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, m

The healthcare and biopharmaceutical industries remain targets of cybersecurity threats due to the value and sensitivity of the data they hold

the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. AbbVie establishes an allowance for credit losses equal to the estimate of future losses over the contractual life of outstanding accounts receivable. AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables. Credit Facilities, Acc

the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. AbbVie establishes an allowance for credit losses equal to the estimate of future losses over the contractual life of outstanding accounts receivable. AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables. Credit Facilities, Acc

regulation; • inflation, recession and fluctuations in interest rates; • restrictions on transfers of funds; • potential deterioration in the economic position and credit quality of certain non-U.S. countries; and 21 | 2025 Form 10-K • 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. If AbbVie does not effectively and profi