Company: ABBV
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001551152-25-000029
Chunk: 8

Company: AbbVie Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 8
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 for the three months ended March 31, 2025 compared to the prior year primarily due to acquisition and integration costs incurred during the three months ended March 31, 2024 in connection with the ImmunoGen acquisition partially offset by increased funding to support all stages of the company’s pipeline assets.

Acquired IPR&D and Milestones

Three months endedMarch 31,(dollars in millions)20252024Upfront charges$246 $79 Development milestones2 85 Acquired IPR&D and milestones$248 $164 

2025 Form 10-Q | 30

Other Non-Operating Expenses (Income)

Three months endedMarch 31,(in millions)20252024Interest expense$700 $660 Interest income(73)(207)Interest expense, net$627 $453 Net foreign exchange loss$4 $4 Other expense, net1,441 586 

Interest expense increased for the three months ended March 31, 2025 compared to the prior year primarily due to a higher average debt balance. 

Interest income decreased for the three months ended March 31, 2025 compared to the prior year primarily due to a lower average cash and cash equivalents balance.

Other expense, net included charges related to changes in fair value of contingent consideration liabilities of $1.5 billion for the three months ended March 31, 2025 and $660 million for the three months ended March 31, 2024. The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs, including the probability of success of achieving regulatory milestones, discount rates, the estimated amount of future sales of the acquired products and other market-based factors. For the three months ended March 31, 2025, the change in fair value reflected higher estimated Skyrizi sales, the passage of time and lower discount rates. For the three months ended March 31, 2024, the change in fair value reflected higher estimated Skyrizi sales and the passage of time, partially offset by higher discount rates.

Income Tax Expense

The effective tax rate was 22% for the three months ended March 31, 2025 and 2024. The effective tax rate in each period differed from the U.S. 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, changes in fair value of contingent consideration and business development