Chris Zakhem | Mengxi (Vivian) Wang | Le Huong Hoang | Ziqi (Kay) Mai NYSE:ABBV Chris Zakhem | Mengxi (Vivian) Wang | Le Huong Hoang | Ziqi (Kay) Mai November 17, 2015

Agenda Company Overview Stock Market Overview Macroeconomic Overview Financial Analysis Comparable Companies Financial Projections Valuation Recommendation

Company Overview Introduction About the Company Spin-off from Abbott Laboratories in 2013 Global, research-based pharmaceutical company Develops and markets advanced therapies that address some of the world’s complex and serious diseases On May 26, 2015, AbbVie acquired Pharmacyclics through a tender offer for approximately $20.8 billion Pharmacyclics is a biopharmaceutical company that develops and commercializes novel therapies for people impacted by cancer Key Operating Risks: Expiration or loss of patent protection and licenses Biologic products subject to competition from biosimilars Subject to cost-containment efforts and pricing pressures Any significant effect that affects HUMIRA could have a material affect on the business AbbVie’s 2015 acquisition of Pharmacyclics diversifies current product lines and 4 key operating risks are important to be noted for evaluation of business ABBV 2014 10K pg. 1-4, 12-14

Company Overview Segments Products HUMIRA HCV Products VIEKIRA PAK Additional Virology products Kaletra Norvir Synagis Metabolics/ Hormones Products AndroGel Creon Synthroid Endocrinology Products Lupron Other Products Duopa and Duodopa Sevoflurane Dyslipidemia products Zemplar Imbruvica AbbVie has several product segments covering the brand name pharmaceutical industry ABBV 2014 10K pg. 1-4

Company Overview Key Products HUMIRA 1.Used to treat autoimmune diseases 2.Accounted for 63 percent of AbbVie's total net sales in 2014. 3.Approved in U.S. , E.U. and other over 60 markets including Japan, China, Brazil and Australia 4.Expiration of the first patent in U.S. in December 2016 and in E.U. in April 2018, no biosimiliar in market till 2022 VIEKIRA PAK 1.Treatment to Hepatitis C (HCV); HCV affects 160MM worldwide 2.Granted marketing authorization in January 2015 by European Commission 3.Key driver of Abbvie’s performance in 2015 Duodopa 1.AbbVie’s levodopa-carbidopa intestinal gel for the treatment of advanced Parkinson’s disease is marketed as Duopa in the U.S. and as Duodopa outside of the United States. 2. US Parkinson’s disease population of ~1MM, of which ~190K may be eligible for therapy 3. One of key focus for the business in the future. Imbruvica 1. A novel, orally active, selective covalent inhibitor of Bruton’s Tyrosine Kinase (BTK); targeting B-cell malignancies 2. Acquired through the acquisition of Pharmacyclics, Inc. (Pharmacyclics) in May 2015 as further discussed below, will also be a significant contributor to revenue growth in 2015. 3.Hematological oncology market $27BN in 2014, growing to ~$50BN by 2020 Traditional target product HUMIRA and the three new growth-driving products have promising demand in the future ABBV 2014 10-K pg. 1-4, 35; 2015 10-Q, ABBV 2015 Q3 Strategy Presentation pg. 11

Company Overview Other Products Description Angrogel AndroGel is a testosterone replacement therapy for males diagnosed with symptomatic low testosterone that is available in two strengths: 1 percent and 1.62 percent Synagis Synagis is a product marketed by AbbVie outside of the United States that protects at-risk infants from severe respiratory disease caused by RSV Kaletra Kaletra (also marketed as Aluvia in emerging markets) is a prescription anti-HIV-1 medicine that contains two protease inhibitors Lupron Lupron is a product for the palliative treatment of advanced prostate cancer, treatment of endometriosis and central precocious puberty, and for the preoperative treatment of patients with anemia caused by uterine fibroids Synthroid Synthroid is used in the treatment of hypothyroidism Sevoflurane Sevoflurane (sold under the trademarks Ultane and Sevorane) is an anesthesia product that AbbVie sells worldwide for human use Creon Creon is a pancreatic enzyme therapy for exocrine pancreatic insufficiency, a condition that occurs in patients with cystic fibrosis, chronic pancreatitis, and several other conditions Dyslipidemia AbbVie's dyslipidemia products (TriCor, Trilipix, Niaspan, Simcor and Advicor) address the range of metabolic conditions characterized by high cholesterol and/or high triglycerides AbbVie has many other products that influence revenue on a smaller scale ABBV 2014 10-K pg. 1-4

Company Overview Sales Breakdown HUMIRA is a large revenue driver and it has stable annual growth rate; the United States is the key market for the business ABBV 2014 10-K pg. 59-61

Company Overview Pipeline Development Phase Number of drugs Phase I 13 Phase II 19 Phase III 15 AbbVie has a robust pipeline of promising new medicines, including more than 30 compounds or indications in Phase 2 or Phase 3 development Abbvie.com

Company Overview SWOT Analysis >Strengths - HUMIRA is the 2nd largest drug in the world - Stable Net Sales - Improved operating margin - Patents protected >Weakness - Patent expirations - High reliance on HUMIRA sales >Opportunities - Increasing market demand - Expanded emerging market - 15 Phase III drugs >Threats - Cost-containment and downward pricing pressure - Currency exchange rate - Biosimiliar competition & generics SWOT Analysis ABBV 2014 10-K pg. 12-14

Technical Analysis Cumulative Total Returns(assumed $100 invested) ABBV 2014 10-K; Yahoo! Finance

Industry Analysis Porter’s 5 Forces Threat of New Entrants *Low Threat of Substitutes *High Supplier Bargaining Power Buyer Bargaining Power Rivalry *Moderate Investment Team

Macroeconomic Overview U.S. Health Spending The U.S. health spending is expected to increase with a growth rate of 5.8% http://www.iahc.com; https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/proj2014.pdf

Macroeconomic Overview Gross Domestic Product U.S. GDP growth rate is steady in the next 5 years; global GDP will decline in 2019 IBISWorld

Pharmaceutical Industry IBISWorld Brand Name Pharmaceuticals

Pharmaceutical Industry There is an increase in sales and demand in pharmaceutical sales worldwide

Arthritis and Hepatitis C Market There is an increase in doctor-diagnosed Arthritis and Hepatitis C in US and worldwide

Financial Analysis Ratios Analysis ABBV 2014 10-K; 2015 Q3 10-Q

Financial Analysis DuPont Analysis ABBV 2014 10-K; 2015 Q3 10-Q

Financial Analysis Greenblatt Ratios Bloomberg

Financial Analysis Greenblatt Ratios Bloomberg

Comparable Companies Descriptions Competitors Description Eli and Lilly Company Two segments: Human Pharmaceutical Products and Animal Health Products Merck and Co Offers therapeutic and preventive agents to treat cardiovascular, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection and fertility Pfizer Operate through Global Innovative Pharmaceutical, Global Vaccines, Oncology and Consumer Healthcare, and Global Established Pharmaceutical segments Baxalta Incorporated Develops, manufactures, and markets a portfolio of products primarily for the treatment of hematology and immunology worldwide. Bristol-Myer Squibb Discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide Celgene Corporation Focuses for the treatment of illness in the areas of oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and general medicine Gilead Sciences Develops, and commercializes medicines in areas of unmet medical need in North America, South America, Europe, and the Asia-Pacific Products include Stribild, Complera/Eviplera, Atripla, etc. These comparable companies were narrowed down by business description and industry and are competitors with AbbVie Capital IQ

Comparable Analysis Ratio Analysis AbbVie has exceptional high ROE and Leverage Ratio Bloomberg

Comparable Companies Analysis Median multiples were selected and the price ratios were weighted more heavily Capital IQ

Discount Rate Weighted Average Cost of Capital A risk premium was added to our WACC to represent the risk involved with AbbVie’s newly added products Investment Team

Financial Projections The first Humira Patent is expiring in 2016. However, Humira has several other patents on it, which will prevent biosimilars until 2022. Duodopa was approved in January 2015 for use in the U.S., boosting growth Imbruvica was acquired from the transaction involving Pharmacyclics. AbbVie states that this drug will be driving growth in the future. AbbVie Long Term Strategy Presentation; ABBV 2015 10-K; ABBV 2015 Q3 10-Q

Discounted Cash Flow Investment Team

Valuation Using a 30% weight on comparable companies and a 70% weight on the discounted cash flow analysis, our valuation came out to be $54.90

Recommendation We recommend to sell 100 shares of ABBV at the market price The acquisition of Pharmacyclics has increased AbbVie’s debt burden and the success of Imbruvica is important to future growth, which provides additional risk Humira accounts for over 60% of revenues and any material event that impacts its revenues will affect AbbVie significantly AbbVie pays a high dividend of 3.80% (average healthcare is 2.1%) Current Price # of Shares Market Value Cost Gain & %Gain $60.01 200 Shares $12,002 $5,416 $6,586 +121.60% Dividend.com