Jack Shen Moby Xu 4/26/2016

Current Holdings Ticker: ABBV (NYSE) Received 400 shares upon spin-off on 1/2/2013 200 shares @ $27.08 100 shares @ $27.53 100 shares @ $34.22 Adjusted cost @$26.71 Current Price: $60.97 Gain (loss):128.27% 16% of portfolio (equity only)

Company Overview Corporate Headquarters North Chicago, Illinois, USA Business Snapshot Specialty-focused, research-based biopharmaceutical company Employees More than 28,000 worldwide Geographic Coverage Products are sold in more than 170 countries

Timeline 2011 October 19th Abbott announced the plan to separate into two publicly traded companies 2013 January 2nd Officially listed on the NYSE 2015 May 26th Completed the acquisition of Pharmacyclics 2016 April Revealed positive data on HCV therapy and leukemia treatment

Management RICHARD A. GONZALEZ MICHAEL E. SEVERINO, M.D. Chairman of the Board and CEO Mr. Gonzalez was a 30-year Abbott veteran. He served as Executive Vice President, Pharmaceutical Products Group. MICHAEL E. SEVERINO, M.D.  Executive Vice President, Research & Development and CSO  He previously served as Senior Vice President, Global Development and Corporate Chief Medical Officer at Amgen Inc. He joined AbbVie in 2014. WILLIAM J. CHASE Executive Vice President, CFO Prior to AbbVie's separation from Abbott, Mr. Chase served as Vice President, Licensing and Acquisitions. Mr. Chase joined Abbott in 1989 Source: abbvie.com

Business Overview Focus on product development: “AbbVie develops and markets advanced therapies that address some of the world's most complex and serious diseases.” chronic autoimmune diseases human immunodeficiency virus (HIV) Parkinson's disease complications associated with chronic diseases other health conditions Focus on product development: Global R&D collaboration and licensing agreement Independent R&D Acquired in-process R&D Source: abbvie.com, Abbvie Inc. FY 2015 10-K

Financial Results FY 2015: Total Net revenue: $22859 million Total Net Income: $5,144 million Source: Abbvie Inc. FY 2015 10-K

Industry Overview Name Brand Pharmaceutical “Big Pharma” Mature industry Heavily regulated R&D intense Risky Intense competition Source: IBIS World

Macro Driver Source: CMS, Census Bureau, IBIS World

Patent-protected drugs; Threat of R&D breakthrough Porter’s Five Forces Supplier Bargaining Power Moderate Self-sufficient; Lots of suppliers Threat of Substitutes Low-Moderate Patent-protected drugs; Threat of R&D breakthrough New Entrants Low Regulation; Finance; Tech Threat of Rivalry High Intense competition; Risky business Buyer Lack alternatives; Necessity Pharmaceutical Industry

SWOT Analysis Strengths Weaknesses Opportunities Threats Large cash reserve; R&D capability; Established brand; Expertise & experience Weaknesses HUMIRA; Risky R&D process Opportunities Economic recovery; International mkt; Aging & growing population Threats Mkt fluctuation; Competition; Regulation; IP theft

Financial Analysis Source: Abbvie Inc. FY 2015&2014 10-K

Financial Analysis Source: Abbvie Inc. FY 2015&2014 10-K

Technical Analysis Source: Yahoo Finance

Market Capitalization Latest Comparable Analysis Company Name Market Capitalization Latest LTM Total Revenue LTM Gross Margin % LTM EBITDA Margin % LTM EBIT Margin % LTM Net Income Margin % Baxalta Incorporated (NYSE:BXLT) 28,266.0 6,148 81% 49% 39.8% 32.03% Biogen Inc. (NasdaqGS:BIIB) 61,925.9 10,936 88% 71% 68.0% 55.48% Eli Lilly and Company (NYSE:LLY) 82,131.4 19,959 89% 54% 48.3% 33.79% Amgen Inc. (NasdaqGS:AMGN) 122,397.8 21,662 38% 28.1% 14.25% Gilead Sciences Inc. (NasdaqGS:GILD) 138,078.6 32,639 76% 26% 18.8% 12.07% Merck & Co. Inc. (NYSE:MRK) 157,153.4 39,498 63% 37% 20.8% 11.25% Pfizer Inc. (NYSE:PFE) 206,003.8 48,851 62% 34% 30.1% 15.55%   AbbVie Inc. (NYSE:ABBV) 99,361.3 22,859 43% 38.9% 22.50% High Low Mean 113,708.1 25,670 77% 44% 36.3% 24.92% Median Source: CapitalIQ

Comparable Analysis

Financial Projections

Discount Rate

DCF Analysis

Pros & Cons Pros Cons Overpriced according to DCF valuation Favorable results Optimistic analysis & reports Potential share repurchase shows confidence Growing # of collaboration and licensing agreement Cons Overpriced according to DCF valuation “New company” HUMIRA “ticking time bomb” Risky pipeline Complicated business

Hold Recommendation DCF Current Comparable Valuation Valuation Price $43.31 Current Price $60.97 Comparable Valuation $70-$80 Hold

Q&A