AbbVie 2012 Annual Report Download - page 22

A portion of AbbVie’s near-term pharmaceutical pipeline relies on collaborations with third parties, which
may adversely affect the development and sale of its products.
AbbVie depends on alliances with pharmaceuticals and biotechnology companies for a portion of
the products in its near-term pharmaceutical pipeline. For example, AbbVie is collaborating with
Biogen Idec to develop a treatment for the relapsing remitting form of MS. It is also collaborating with
Bristol-Myers Squibb on a treatment for multiple myeloma, and with Biotest AG on a compound for
rheumatoid arthritis and psoriasis.
Failures by these parties to meet their contractual, regulatory, or other obligations to AbbVie, or
any disruption in the relationships between AbbVie and these third parties, could have an adverse
effect on AbbVie’s pharmaceutical pipeline and business. In addition, AbbVie’s collaborative
relationships for research and development extend for many years and may give rise to disputes
regarding the relative rights, obligations and revenues of AbbVie and its collaboration partners,
including the ownership of intellectual property and associated rights and obligations. This could result
in the loss of intellectual property rights or protection, delay the development and sale of potential
pharmaceutical products, and lead to lengthy and expensive litigation or arbitration.
Biologics carry unique risks and uncertainties, which could have a negative impact on future results of
operations.
The successful discovery, development, manufacturing and sale of biologics is a long, expensive and
uncertain process. There are unique risks and uncertainties with biologics. For example, access to and
supply of necessary biological materials, such as cell lines, may be limited, and governmental
regulations restrict access to and regulate the transport and use of such materials. In addition, the
development, manufacturing, and sale of biologics is subject to regulations that are often more complex
and extensive than the regulations applicable to other pharmaceutical products. Manufacturing
biologics, especially in large quantities, is often complex and may require the use of innovative
technologies. Such manufacturing also requires facilities specifically designed and validated for this
purpose and sophisticated quality assurance and quality control procedures. Biologics are also
frequently costly to manufacture because production inputs are derived from living animal or plant
material, and some biologics cannot be made synthetically. Failure to successfully discover, develop,
manufacture and sell biologics—including HUMIRA—could adversely impact AbbVie’s business and
results of operations.
New products and technological advances by AbbVie’s competitors may negatively affect AbbVie’s results of
operations.
AbbVie competes with other research-based pharmaceuticals and biotechnology companies that
discover, manufacture, market, and sell proprietary pharmaceutical products and biologics. For
example, HUMIRA competes with a number of anti-TNF products that are approved for a number of
disease states, AbbVie’s virology products compete with protease inhibitors and other anti-HIV
treatments, and AbbVie’s dyslipidemia products face competition from other fibrates and from statins.
These competitors may introduce new products or develop technological advances that compete with
AbbVie’s products in therapeutic areas such as immunology, virology, renal disease, dyslipidemia, and
neuroscience. AbbVie cannot predict with certainty the timing or impact of the introduction by
competitors of new products or technological advances. Such competing products may be safer, more
effective, more effectively marketed or sold, or have lower prices or superior performance features than
AbbVie’s products, and this could negatively impact AbbVie’s business and results of operations.
16