AbbVie Inc.

Our outlook is stable and reflects our expectation for low-single-digit-percent pro forma revenue growth in 2020, rising to a high-single-digit rate in 2021. We expect the combined company's margins will improve through the realization of synergies over the next two years. We believe the company will prioritize debt reduction and for adjusted debt leverage to decline to the 3x area in 2021. We could lower the rating if we believe leverage would be sustained above 3.5x. This could occur if the company pursues a more aggressive acquisition strategy than we currently envision, leading to higher average leverage over time. It could also occur if the company experiences integration challenges, higher-than-expected erosion in Humira, a decline in Botox revenues, or a

...The Allergan transaction raises leverage to the mid-3x area on a pro forma basis, but we expect leverage to decline to about 3x in 2021. Longer term, we believe AbbVie will maintain leverage in the 3x area, as the company will likely continue to make moderate-sized acquisitions to further broaden its portfolio and pipeline ahead of the loss of exclusivity on its main product, Humira, in 2023. The company still has significant product concentration even following the acquisition of Allergan. Humira makes up 39% of the company's revenue and this product faces biosimilar competition in the U.S. in 2023. Sales of Botox and other medical aesthetics products will decline this year because of a reduction in elective procedures stemming from the COVID-19 pandemic as well as tightening in consumer discretionary spending. The company's third-largest product, Botox (acquired with Allergan), is 8% of pro forma 2019 sales. We anticipate sales of the medical aesthetics business will rebound and grow...

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