Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's fourth quarter 2023 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DiMartino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.

Good morning and welcome to Pfizer's earnings call. I'm Francesca DiMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast at Pfizer.com. Earlier this morning, we released our results for the fourth quarter and full year 2023 via a press release that is available on our website at Pfizer.com. I'm joined today by Dr. Albert Dorla, our chairman and CEO, and Dave Denton, our CFO. Albert and Dave have some prepared remarks, and we will then open the call for questions. Joining for the Q&A session, we also have Dr. Chris Boshoff, EVP and Chief Oncology Officer, Alexandre Desjardins, EVP and Chief International Commercial Officer, Dr. Michael Dolston, Chief Scientific Officer and President of R&D, Doug Lankler, EVP and General Counsel, and Amir Malik, EVP and Chief U.S. Commercial Officer. Before we get started, I want to remind you that we will be making forward-looking statements and discussing certain non-GAAP financial measures. I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR website on Pfizer.com. 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, Francesca. Good morning, everyone, and thank you for joining us. I'm pleased to discuss some of the highlights from the fourth quarter and full year 2023, and of course, the compelling year we have ahead. I would like to begin with a few reflections on 2023. As you know, we missed our initial internal projections and street expectations, predominantly related to our COVID products, which affected our stock price performance. Despite, however, this challenging year, there were a few great things that happened in 2023 that may have gotten lost amidst the missed expectations. First, in 2023, Pfizer impacted the lives of more than 160 million people approximately around the world. We believe there is no other company that can reach as many people as patients as Pfizer. If you multiply this with our brand equity and awareness, it creates a connection with consumers that can be a very strong asset for us. Second, despite the declining revenue from our COVID products, as of the reported results of the first nine months of 2023, we were the number one pharmaceutical company in terms of revenues from pharma-only products, a marked improvement from our fourth position in 2019. Next, 2023 was a record year for FDA approvals with nine new molecular entity approvals from Pfizer and many more approvals for new indications in already approved products, marking a very productive year of pipeline execution for Pfizer. Finally, we close the season acquisition. In the current regulatory environment, being able to close such a large acquisition demonstrates our ability to successfully engage with regulatory bodies. Our deliberate and strategic efforts throughout 2023 created a strong foundation to support us. We are now focused on maximizing the opportunities that have positioned us for success and our team is driving confidently as we start 2024. From the advent of penicillin to the development of the COVID-19 vaccine, Pfizer has been at the forefront of medical and pharmaceutical breakthroughs for the past 175 years. This year is our 175th anniversary. That have not only changed patients' lives, but have changed history. Our strategy to continue to build on our proud history of innovation and commercial excellence is supported by the power and strength of our unmatched global scale and footprint spanning commercial, financial, medical, regulatory, manufacturing, and government relations. We have a clear view on how we will deliver operational, commercial, and financial success across our business. Our confidence stems from the opportunity we have to bring additional focus to our business by executing five strategic priorities. We will get into each in more detail, but the five key priorities for Pfizer this year are, first of all, to achieve a world-class oncology leadership, to deliver the next wave of pipeline innovation, to maximize the performance of our new products, Expand margins by realigning our cost base. Allocate capital to enhance shareholder value. I'm confident that Pfizer is well positioned to execute and that we can deliver meaningful value for our patients and our shareholders. Let's start with our first priority, which is to achieve a world-class oncology leadership, which I believe we are in a strong position to do. As a reminder, one in three people will be diagnosed with cancer in their lifetime. Oncology represents one of the largest and fastest growing therapeutic areas. Completing the acquisition of Seedzen doubled our oncology research and resources overnight. and meaningfully expanded the rich and medical impact of our U.S. commercial and medical footprint with a range of portfolio expansion opportunities boosted by citizens' broad and deep pipeline. Seasons in line medicines are expected to immediately enhance Pfizer's top-line growth, and our combined portfolio provides the opportunity to lead genitourinary cancers and be a leader in breast cancer and deliver at least a potential blood-buster product by 2030. We look forward to providing more information about our oncology platform at our Pfizer Oncology Innovation Day on February 29th. As we build our leadership position, we have multiple potential key oncology catalysts in 2024 that we are acutely focused on. On the commercial side, the patch-up launch in locally advanced metastatic bladder cancer in combination with pembrolizumab and the extended launch in non-metastatic castration-sensitive prostate cancer. We are excited by the strength of our PADSF EV302 data and recent FDA approval, as it represents an opportunity to broaden the reach of this potentially practice-changing platinum-free regimen to even more patients in the frontline metastatic urothelial cancer setting. Essentially, the recent approval doubles the addressable population, which had already doubled this PADSF stream. We are also looking forward to phase three data readouts from the test case graph. In second line, HR-positive metastatic breast cancer and BRAF-TOVI in first line BRAF colorectal cancer. We also plan to advance our late stage pipeline with phase three start of CDK4 in post-CDK4-6 metastatic breast cancer and B6A in non-small cell lung cancer. Building on Pfizer's potential medicines, the pipeline across breast cancer, genitory cancer, hematology, and CRC, our CDK4 inhibitor could be a compelling follow on to iBrands. And finally, in the early stage pipeline, we look forward to initiating first inpatient studies of four new ADC candidates this year, where we believe we have acquired the expertise to be a leader. Our second priority is to deliver the next wave of pipeline innovation with discovery and development across our therapeutic areas outside of oncology. In vaccines, anti-infectors, internal medicine, metabolic diseases, and inflammation immunologies. In 2024, we plan to continue to make meaningful investments in R&D. In fact, Pfizer's R&D budget is one of the highest in the industry and supports our robust pipeline. We are pursuing cutting-edge science across modalities and platforms to deliver the next generation of potential breakthroughs. We are also leveraging AI and other digital tools across the value chain to increase speed and success rates. Starting first with our fourth-generation PCV vaccine candidate, which recently entered the clinic and received FDA fast-track designation. Building on our deep heritage with Prevran, we aim to solidify our leadership in the pneumococcal vaccine space by increasing valency and serotype immunogenicity while maintaining our unique FDA label, which includes both IPD and pneumococcal pneumonia in adults. Respiratory vaccine combinations are another area where we are poised to lead, building upon our successful COVID vaccine. with a first-generation standalone mRNA flu vaccine data, demonstrated relatively efficacy versus a recommended flu vaccine in 18 to 64-year-olds, but did not meet success criteria for immunogenicity for the BWI strains. Our second generation flu vaccine was tested in a phase two COVID flu combination study for 18 to 64 years old and has shown encouraging results in both VA and the B strains. This new construct has now moved already into a phase three COVID flu combination trial. Moving next to GBT601. Our next generation and potentially best in class HBS polymerization inhibitor represents a potential stepwise evolution over Oxbrita for sickle cell disease. Recent data presented at AASH 2023 demonstrated multiple blood parameters approaching normal ranges with treatment, suggesting GPT-601 may have the potential to deliver strong efficacy with the convenience of one's daily pill. We have reaffirmed our commitment to our emerging cardiometabolic programs with several early clinical development compounds. On the other end of the way management spectrum, we have Concegrama, our GDF15 neutralizing antibody for cancer cachexia with phase two data expected later this year. Concegrama has the potential to be first in class and the first FDA approved treatment for cancer cachexia, which accounts for 20, 30% of all cancer deaths, a significant statistic. Our third priority is, of course, to maximize the performance of our new products and core franchises through a relentless focus on execution to continue growing our top line. To do this, we are prioritizing and focusing while leveraging data to make changes quickly and adapt. Our Pfizer US commercial and our Pfizer international commercial organizations will leverage a more focused, efficient structure to drive executional excellence in their respective markets and expand REITs to drive growth over the next several years. To discuss a few examples, we continue to be very enthusiastic about the potential of Nurtec to help the more than 1 billion people living with migraines worldwide. As access and prescriptions in the U.S. and globally continue to increase, we will continue to focus on direct-to-consumer marketing and reducing barriers to access and affordability for healthcare practitioners and patients. With Oxbrita, we will continue to educate healthcare practitioners and patients on the importance of proactively treating the underlying cause of sickle cell disease by reframing treatment goals to chronic, proactive treatment. With Abrisvo, we are focused on increasing overall RSV market growth and market share by establishing RSV vaccination as a year-round discussion and expanding our retail contracting and offerings. With Erlexvio, we are focused on educating healthcare practitioners in both academic institutions and in the community. Awareness building and new patient trialists. Coming off the initial launch of Velcipity, we are focused on helping ensure patient access to Velcipity as a first-line advanced therapy oral option. With Litfulo, we continue to accelerate the consideration of advanced systemic treatments for appropriate alopecia areata patients and further unlock access to Litfulo. In addition, of course, we continue to protect and grow our conference sizes and key blockbusters, including Prevner, Vintagel, and Helix, while exploring further opportunities to advance a number of innovative combination regimens. We believe we are well positioned to bring our global commercial manufacturing and supply capabilities to accelerate current and future marketed products. We believe all these components support our growth potential through 2024 and drive growth potential into 2025. We plan to provide updates throughout the year on how we are advancing these strategic priorities. And with that, I will turn the call over today. We will discuss our financial performance, our initiative to realign our cost base and our capital allocation strategy to enhance shareholder value.