Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's third quarter 2021 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chris Stivo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Thank you, Sylvia. Good morning. Welcome to Pfizer's third quarter earnings call. I'm joined today by Dr. Albert Bourla, our Chairman and CEO, Frank Emilio, our CFO, Michael Dolston, President of Worldwide Research and Development in Medical, Angela Huang, Group President, Pfizer Biopharmaceuticals Group, Amir Malik, our Chief Business and Innovation Officer, and Doug Lankler, General Counsel. We expect this call to last 90 minutes. Materials for this call and other earnings-related materials are on the investor relations section of Pfizer.com. Please see our forward-looking statements disclosure on slide 3, which is shown right now, and additional information regarding these statements and our non-GAAP financial measures is available in our earnings release and in our SEC forms 10-K and 10-Q under risk factors. Forward-looking statements on the call speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Thank you, Chris. Hello, everyone. I'm happy to report that Pfizer generated another solid performance in the third quarter, recording 130% operational revenue growth compared with the third quarter of 2020. When excluding direct sales and alliance revenues provided by our COVID-19 vaccine, we generated 7% operational revenue growth compared with the previous year quarter. We also are raising our 2021 total company guidance for both revenues and adjusted TPS. While we are proud of our financial performance, we are even more proud of these financial results, of what these financial results represent in terms of the positive impact we are having on human lives around the world. In the first nine months of 2021, our innovative medicines and vaccines reached nearly a billion people. It's fair to say millions of lives have been saved because of this. Excluding our COVID-19 vaccine, we reached nearly 300 million people during that time. These are humbling numbers for all of us at Pfizer. At the same time, we delivered to our shareholders the 331st consecutive quarterly dividend. We also continue to advance our R&D pipeline. Some key milestones include the first COVID-19 vaccine authorized for emergency use in the U.S. for children 5 to 11 years of age, the first patient dose in our large Phase III Renoir study for our RSV bivalent vaccine candidate, and the initiation of Phase II-III studies for both IV and oral protease inhibitor candidates for COVID-19. Let me start with commentary on some of our key growth drivers in the quarter, the biggest of which was Comirnaty. which contributed 13 billion in global revenue during the third quarter. Today, we have produced 2.6 billion doses and shipped 2 billion doses to 152 countries or territories. So far, 75% of our Comirnaty revenues have been generated outside the U.S., and we continue to sign agreements with governments around the world. We also remain on track to produce 3 billion doses this year, of which at least 1 billion will go to middle and low-income countries. In addition, our weekly market share of COVID-19 vaccines administered continues to increase. In the US, our four-week average market share increased from about 56% in April to about 74% as of October 31st. And in the EU, it went from about 70% to about 80% during the same time period. These market share increases are primarily the result of our booster being the first to receive emergency use authorization and our two-dose series being preferred by some countries around the world for use in certain younger populations. We also continue to follow the science to help ensure we stay ahead of the virus. Let me speak to two examples. First, top line results from our phase three randomized control trial demonstrated that a booster dose administered to individuals 16 years of age and older who previously received the Pfizer-BioNTech primary two-dose series restored vaccine protection against COVID-19 to the high levels achieved after the second dose. Second, the U.S. Food and Drug Administration has authorized our COVID-19 vaccine for emergency use for children 5 through 11 years of age, the first and only vaccine to receive such authorization. For this age group, the vaccine is to be administered in a two-dose regimen of 10 microgram doses given 21 days apart. The 10 microgram dose level was carefully selected based on safety, tolerability, and immunogenicity data. Last week we announced that the U.S. government exercised its final purchase option under the existing U.S. supply agreement to purchase 50 million additional doses of Comirnaty. This brings the total number of pediatric doses purchased by the U.S. government to 115 million, which is enough to vaccinate every U.S. child. Overall, the U.S. has now purchased a total of 600 million doses across all age ranges under this supply agreement. Now let's take a look at some of the quarter's other key growth drivers. Eliquis has continued to deliver strong performance with global revenues up 19% operationally to 1.3 billion in the third quarter. In the U.S., sales growth for Eliquis was driven mainly by a 16% growth in prescription volume. Ventacle and Ventamax revenues were up 42% operationally to 501 million globally. Our disease education efforts in the U.S. continue to support increases in appropriate diagnosis, while the main driver of growth in Japan has been the successful establishment of several referral networks in select areas resulting in new patient starts. I branch continuous outside of the US revenues outside of the US were up 9% operationally to 500 million. This growth was driven by accelerating demand as the delays in diagnosis and treatment initiations caused by COVID-19. So signs of recovery across several international markets. Global revenues for eyebrows were up only 1% operationally as the international growth was largely offset by a 3% decline in the US. The U.S. decline was driven by an increase in the proportion of patients accessing eye brands through our patient assistance program. We continue to be pleased with the performance of our oncology biosimilars portfolio, which is now the largest in the industry with six biosimilars approved in the U.S. for patients living with cancer. Global revenues from this portfolio grew 51% operationally during the quarter to $398 million. This growth was primarily driven by continued strong results from our U.S. therapeutic monoclonal antibody launches. In international developed markets, oncology biosimilars contributed 29% operational growth, driven by new launches of Zirabev and continued growth of Trasimera. Of course, with such a broad portfolio of life-changing and life-saving products, it would be uncommon to not have a few challenges. U.S. revenues for our Prevnar family Prevnar 13 and Prevnar 20, for example, were down 2%, primarily due to a 36 decline in the adult indication of Prevnar 15 due to the ongoing prioritization of primary and booster vaccination campaigns for COVID-19 and the later start of the flu season compared with last year. Other contributing factors were the continued impact of the lower remaining unvaccinated eligible adult population, and the June 2019 change to the Advisory Committee on Immunization Practices, the change of ACIP, recommendation for the Prevnar 13 adult indication to serve clinical decision-making. Just two weeks ago, ACIP voted to recommend Prevnar 20 for routine use to help protect adults against invasive disease and pneumonia caused by the 20 streptococcus pneumonia serotypes in the vaccine. The ACIP voted to recommend Prevnar 20 for adults age 65 and older and adults age 19 to 64 with certain risk conditions without the need to be followed by PPCV23 vaccination. This recommendation recognizes for the first time the significance of helping protect more population under age 65 with comorbid and immunocompromising conditions who are at increased risk of disease against these 20 disease-causing serotypes. This new one-dose regimen option, once endorsed by the CDC director, also will help simplify long-standing adult pneumococcal recommendations. As a reminder, Prevener 20 is the only vaccine the FDA has approved not only for invasive pneumococcal disease, but also for pneumonia. In September, I assume many of you saw that the FDA issued a drug safety communication related to its completed review of the ZELSALS oral surveillance trial. We are in continuing dialogue with the FDA about its assessment and the resulting final context in the ZELSALS label. With this important step taken, we hope we are a step closer to having an update regarding the new drug application for abracitinib in atopic dermatitis, and the supplemental NDA for zelzins in angelosing spondylitis, both of which are currently under FDA review. In terms of zelzins, it's currently approved indication in the US. We believe that zelzins prescribing behavior will adjust in the coming months based on the FDA's update, resulting in an initial correction in the short term. But based on the trends we have observed and the broad application of zelzins across its approved indications, We believe Zeldon has the potential to return to growth again once a final U.S. label is issued, and physicians have adjusted their prescribing habits accordingly as we go into 2022 and beyond. Sibinco Abrasiti received marketing authorization for the treatment of moderate to severe atopic dermatitis in adults and adolescents aged 12 years and over from the UK Medicines and Healthcare Products Regulatory Agency and the Japanese Ministry of Health, Labour and Welfare in both doses. It also received a positive opinion in adults from the European Medicines Agency Committee for medicinal products for human use. We are hopeful this momentum will continue. We have applications currently filed for review with regulators around the globe, including in the US and Australia. Overall, we remain confident in the importance of the JAK inhibitor class for appropriate patients with inflammatory diseases. And we are pursuing a variety of options for advancing additional JAK inhibitor assets within our portfolio. For example, Pfizer has granted an exclusive license to brepositinib and TIK2, both in Phase II development, to a new company formed in collaboration with a partner that has a proven track record in late-stage inflammation and immunology drug development. The new company will direct all future development decisions, while Pfizer will have a 25% stake and retain certain ex-U.S. commercial rights for brepositinib and TIK2. This transaction will enable the allocation of resources to advance development of prepositinib and TIK2, while allowing Pfizer to focus on diversifying its pipeline. Another way in which we are continuing to bolster our pipeline is through strategic business development agreements. This slide highlights 10 such agreements we have entered in recent years, spanning four different therapeutic areas. To further build on our strength in cancer research, we acquired Array Biopharma. The team in Boulder, Colorado has become a center of excellence for targeted therapies in not only cancer, but other diseases as well, with an expected one to two new compounds entering the clinic every year. Leveraging our strength in gene therapy, we enter into a collaboration with Vivet Therapeutics for a potential gene therapy for Wilson disease. a rare genetic disorder that can cause severe hepatic damage, neurological symptoms, and potentially death. Our acquisition of Theracon builds on our rare disease team's 30 years commitment to develop innovative medicines that address significant unmet medical needs of people with rare diseases. Regarding our worldwide exclusive licensing agreement with Axeer, we believe our expertise and breadth of experience in cardiovascular and metabolic diseases makes us well suited to accelerate clinical development of axia and PTL3-LRX and investigational and the sense therapy being developed to treat patients with certain cardiovascular and metabolic diseases. We are excited about our collaboration with Valvina to develop and commercialize, with Valneva to develop and commercialize Valneva's Lyme disease vaccine candidate, VLA15, the only active Lyme disease vaccine program in clinical development today. Of course, our collaboration with BioNTech on the COVID-19 vaccine led to the first mRNA vaccine ever approved. And this relationship was born out of our company's initial collaboration to develop an improved flu vaccine based on mRNA tech. Building on our strengths in prostate cancer and women's health, we have entered into an agreement with Myovan to jointly develop and commercialize Orkodix Relugolix in advanced prostate cancer and Relugolix combination tablet in women's health in the US and Canada. Our global collaboration with Arvinas to develop and commercialize RV471, an investigational oral product estrogen receptor protein integrator builds on our metastatic breast cancer franchise, allowing us to potentially go into earlier non-metastatic patients and add to efficacy of eye brands in a metastatic setting. Trillium's CD47 SIRP-alpha focused technology has the potential to be as foundational in cancer immunotherapy as PD-1 PD-1s have been. We look forward to that acquisition closing later this year and in the first half of 2022. With three approvals, four EUAs, and multiple submissions and readouts, these transactions are already bearing fruit and positioning us to reach even more patients. Before I close, I want to welcome to the call Amir Malik, who joined us in August as Executive Vice President and Chief Business Innovation Officer. Amir came to us from McKinsey, where during his 25-year career, he has developed growth strategies, guided mergers and acquisitions, and implemented large-scale programs to improve patients' lives and transform performance for life science companies. This includes working closely with Pfizer on several strategic initiatives. I have known Amir for more than 50 years, and I'm certain he will be an incredible addition to Pfizer as we look to the next era of innovation. Looking ahead, we continue to focus on driving operational excellence across the organization and pursuing the kinds of first-in-class science that will define the new Pfizer. Given our third quarter performance and our current expectations for the near term, we continue to expect the revenue CAGR of at least 6% on a risk-adjusted basis through the end of 2025 and double-digit growth on the bottom line. I would remind you that these projections do not include any potential impact from Comrinati, recent or subsequent business development activities, or potential future MRNA progress. Rather, we remain very confident in our ability to achieve these growth rates because of the strength of our current product portfolio and R&D pipeline. Now, I'll turn it over to Michael to speak more about our R&D efforts, and then Fran will provide financial details on the quarter, and our outlook for the remainder of 2021, which looks solid. Michael.