Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's third quarter 2022 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chris Stevo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Thank you, Chelsea. Good morning. Welcome to Pfizer's third quarter earnings call. We anticipate that this call will last 60 minutes. I'm joined today by Dr. Albert Bourla, our Chairman and CEO, Dave Denton, our CFO, and Dr. Michael Dolston, President of Worldwide Research and Development in Medical. Joining for the Q&A session, we will also have Angela Huang, Chief Commercial Officer and President, Global Biopharmaceuticals Business, Amir Malik, our Chief Business Innovation Officer, Dr. William Pao, our Chief Development Officer, and Doug Lankler, our General Counsel. Before we begin the call, I'm also happy to announce that we will host an Alice Day in New York City on the afternoon of December 12th. Members of our executive team and other leaders at Pfizer will share information on our rich slate of potential near-term product launches and the R&D readouts which will drive the next wave of product launches after that, both of which will support our 2030 revenues and beyond. In-person attendance will be by invitation, but we will also be webcasting the event. While we're not going to talk more about the agenda today, we look forward to providing more details as we get closer to December 12th. Materials for this call and other earnings-related materials are on the investor relations section of Pfizer.com. Please see our forward-looking statements disclaimer on slide four, and additional information regarding these statements and our non-GAAP financial measures is available in our earnings release. and in our SEC forms 10K and 10Q under risk factors and forward-looking information and factors that may affect future results. Forward-looking statements on the call are subject to substantial risks and uncertainties. Speak only as of the call's original date, and we undertake no obligation to update or revise any of these statements. With that, I will turn the call over to Albert.

Thank you, Chris. Hello, everyone, and thank you for joining us today. I will briefly touch on some recent highlights. I will then spend the bulk of my time speaking to our expectations for what we feel will be a promising and prosperous future for Pfizer and the patients we serve. In addition to generating stellar financial performance, since our last earnings call, we reported positive pivotal data for several exciting pipeline programs, including our RSV vaccine candidate for older adults, Brevrat-20 for children, the potential combination treatment of Talzina and Xtandi in men with metastatic castration-resistant prostate cancer, our Pendavelan meningococcal vaccine candidate for adolescents and young adults, as well as exciting progress for our GLP-1 program in type 2 diabetes and obesity. And that's this morning. We announced positive top-line data from the Phase 3 clinical trial investigating our bivalent RSV vaccine candidate when administered to pregnant participants to help protect their infants from RSV disease after birth. We established a new commercial structure within our global biopharmaceutical business that is focused on three broad therapeutic areas, primary care, specialty care, and oncology. We believe this new structure will enable us to maximize the commercial success of the multiple exciting product launches, including several potential blockbusters that are poised to emerge from our scientific pipeline over the next few years. We have continued to advance potentially game-changing vaccines in the fight against respiratory disease by entering into a phase three strategy for our mRNA flu vaccine candidate and initiating a phase one study for a vaccine candidate that combines our mRNA flu and COVID-19 vaccine in one shot. We completed the acquisitions of BioHeaven Pharmaceuticals and Global Blood Therapeutics, giving us market-linking franchises in both migraine and sickle cell disease, respectively. Less than six months ago, after launching an accord for a healthier world, a breakthrough initiative designed to close the health equity gap for 1.2 billion people living in 45 lower-income countries, I am proud to say that the first shipments of our products have arrived to these countries, and we are working with governments on health system improvements that can help make sure these products reach those in need. And of course, we continue to lead the fight against COVID-19. Most notably, our Omicron-adapted bivalent COVID-19 vaccine has been authorized by the U.S. Food and Drug Administration, by the European Medicines Agency, and several other regulatory bodies. And as part of Pfizer's commitment to providing equitable access to COVID-19 oral treatments, we agreed to supply at a non-for-profit price up to 6 million PaxCovid treatment courses to the Global Fund for Low- and Lower-Middle-Income Countries. An exciting quarter for sure. But in our company and our industry, it's all about what's next. The next breakthrough medicine or vaccine. The next changing technology. The next solution to an unmet patient need. This continued pursuit of what's next is embedded in Pfizer's DNA and the foundational driver of our purpose. Breakthroughs that change patients' lives. It's also why we have confidence that Pfizer's story is a story of growth. We recognize that some are questioning Pfizer's long-term growth prospects, particularly in the 25 to 30 timeframe. That's understandable, given that we currently expect a negative impact of approximately 17 billion in revenues from losses of exclusivity during that period, based on our internal calculations. We believe we not only can overcome these expected declines, but also can potentially generate strong growth through the end of the decade. Let's take a closer look on how we expect to accomplish this. Our strong capital position has given us the ability to pursue business development opportunities with the potential, if successful, of course, to add at least 25 billion of risk-adjusted revenues to our 2030 top-line expectations. The deals we have already done for ARENA, Bioheaven, Global Brad Therapeutics, and Revival have the potential to get us more than one-third of the way there, and that we have more than enough capital to invest in the additional opportunities needed to meet or exceed this target. Perhaps even more exciting is the wave of potential growth drivers emerging from our R&D pipeline in the near term. Over the next 18 months, we expect to have up to 19 new products or indications in the market, including the five for which we have already begun pro-promotions, co-promotions, or commercialization earlier this year. You can find a list of these launches in the appendix of the presentation we posted today for this earnings call. If successful, These 19 launches, of which more than two-thirds have the potential to be blockbusters, would be the most ever in Pfizer's history. The 15 in-house developed projects alone could potentially represent approximately 20 billion in 2030 sales, which would more than offset the expected LOE impact. Many of these programs are already largely de-risked. from a clinical perspective. The majority of them were discovered in-house, and nearly all of them would be for indications outside of COVID-19. If approved, we expect each of these to be key contributors to our growth aspirations through 2025 and beyond. And of course, we have many more potential vaccines and medicines in our pipeline, with numerous launches expected in the 24 to 30 timeline. These include gene therapy candidates for hemophilia A, B, and Duchenne muscular dystrophy, our oral GLP-1 for diabetes and obesity, a potential combo vaccine that would cover flu and COVID in one shot, and many, many more. With regard to our COVID-19 products, while their sales may fall from our expected 2022 levels of approximately combined 55 billion, we believe our COVID-19 franchises will remain multi-billion dollar revenue generators for the foreseeable future, which should serve as a buffer for any unforeseen challenges with other products in our portfolio. Our confidence to execute this plan stems from the depth of our financial resources and the firepower it gives us to pursue business development opportunities. The power of brand equity we have built up over the past 170 years and further enhanced in the past two years. According to a recent survey, our brand awareness now stands at an impressive 82%, and our favorability stands at 61%, compared with 42% for the industry as a whole, results that were obtained just a couple of months ago. And of course, the strength of the three foundational pillars of our company are world-class scientific, our world-class commercial, and our world-class manufacturing engines. And you will see in this slide some highlights of each one of them. Let me now briefly highlight three potential blockbusters that we expect to contribute to our long-term growth. RSV is an area of significant unmet need, particularly in older adults and infants. Each year, it's estimated more than 177,000 older adults are hospitalized, and 14,000 of them die in the U.S. alone due to RSV. That is confirmed by a diagnostic test. We believe we have the potential to be a leader in this space and have a real impact on public health. On March 24 of this year, the FDA granted breakthrough designation for our RSV vaccine candidate for the prevention of lower respiratory tract disease caused by RSV in individuals 60 years of age or older. We are excited to report positive top-line data from the Phase III Renoir trial in late August, with a recent presentation of detailed results at ID Week 22. A pre-planned interim analysis. So, vaccine efficacy of 67% against RSV-associated lower respiratory tract illness defined by two or more symptoms. And vaccine efficacy of 85.7% was observed in participants with more severe disease presenting three or more RSV-associated symptoms of lower respiratory tract illness. We are also excited about the potential for our maternal RSV vaccine candidate group. Globally, it's a year. RSV sickens more than 6.5 million infants under six months old and kills approximately 45,000. As announced this morning, our maternal RSV study met the success criterion for one of the two primary endpoints. Vaccine efficacy of 81.8% was observed against severe medically attended lower respiratory tract illness due to RSV in infants from birth through the first 90 days of life. And high efficacy of 69.4% was demonstrated through the first six months of life. So there is the potential that, subject to regulatory approval, by late 2023, early 2024, we could have the only RSV maternal vaccine on the market, along with an RSV vaccine for older adults that has high efficacy and it is well tolerated with no safety concerns. The two indications represent a potential multi-billion dollar peak revenue opportunity if approved, especially with our high respected primary care sales force executing these launches. Including the RSV antiviral investigational candidates we acquired with Revival, we aim to have end-to-end solutions with both preventative vaccines and therapeutics to treat those infected with RSV. Ulcerative colitis, or UC, is a chronic and often debilitating inflammatory bowel disease that affects an estimated 1 million people in the U.S. alone. Many patients living with this disease never achieve or maintain remission, and physicians are seeking effective, proven oral therapies with a favorable benefit risk profile that can be an attractive first-line advanced therapy option. As a result, We expect the market opportunity to grow by about 50% over the next five years. The positive phase three data from the Elevate UC12 and 52 trials reinforce our belief that Etrasimab has a differentiated clinical profile and can be an important treatment option, if approved. We believe that Etrasimab can be a multi-billion dollar blockbuster product. We expect to launch the product in the U.S. as soon as the second half of 2023, pending regulatory approval through our specialty care sales force, which already has stronger relationships in the UC market, thanks to its work with Zeldens, Biosimilars, et cetera. Lastly, let's look at migraine. Following our acquisition of BioHeaven in early October, we are now aiming to build the world's leading global migraine franchise with the potential to impact one billion patients around the world. Migraine is a debilitating disease and has 11.6% prevalence worldwide. In the U.S. alone, there are 40 million patients with migraine, and one out of five women are migraine sufferers right now. the economic burden is significant at 36 billion per year. We believe our portfolio, including Nurte Oditi, Vaidura, and Zavegepant, could meet a range of needs in the market, allowing physicians and patients to decide how to appropriately manage migraine treatment and prevention. As a result, we see the potential to reach more than 6 billion in peak revenues. In the U.S., NERTEC is growing very well, including the impact of Pfizer's co-promoting, which began in August pre-close. NERTEC has further strengthened its number one market share position in the oral CGRP market, and we expect even stronger growth as we deliver on our promise to further enhance our commercial efforts behind this project. Outside the U.S., it has been approved in the EU, UK, Israel, Kuwait, United Arab Emirates, and we have filed for registration in an additional 10 markets. While this is not a new product launch, we believe this is a great example of how we can take this portfolio to new heights by leveraging the full strength of Pfizer's global commercial engine, including in primary care physicians. Moving over to Zavezepan, we recently expect to launch Zavezepan intranasal in the U.S. next year, pending FDA approval, and we plan to globally commercialize. Lastly, the oral prevention phase three trial is ongoing with a data readout expected in the third quarter. So with that, I turn it over to Dave to update you on the results and outlook for the financials. After Dave, Michael will speak about the progression of our pipeline.