AbbVie has warned investors that it expects to take a $2.7 billion hit tied to acquired in-process research and development (IPR&D) expenses and milestones in the third quarter.
Like other drugmakers, AbbVie can incur acquired IPR&D and milestones expenses when it enters into collaborations, licensing agreements and other asset acquisitions. The company opts against forecasting the expenses because of the uncertainty around the timing of the payment. As such, the expenses can force AbbVie to make late changes to its financial guidance.
That happened after the markets closed Friday, when AbbVie revealed the anticipated $2.7 billion hit and communicated the effects of the expenses to investors. The company knocked $1.50 a share off both ends of its full-year earnings per share forecast, bringing the range down to $10.38 to $10.58.
AbbVie’s financial filing lacks details of the deals that drove the $2.7 billion in expenses. The company provides a detailed breakdown of IPR&D and milestones expenses in its quarterly results. AbbVie is due to publish its third-quarter results at the end of October.
The $2.7 billion in acquired IPR&D and milestones expenses forecast for the third quarter is a significant step up on the run rate over the first half of the year. AbbVie recorded just over $1 billion in expenses over the first six months of 2025. Upfront charges accounted for $951 million of the expenses, with milestones making up the remainder.
AbbVie’s second-quarter results included a reference to its deal with Ichnos Glenmark Innovation but, with the agreement yet to close, the report lacked information on the recognition of acquired IPR&D and milestones expenses. The Big Pharma agreed to pay $700 million upfront for an exclusive license to a trispecific antibody that targets CD38, BCMA and CD3.