Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's second quarter 2024 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 second quarter of 2024 via a press release that is available on our website at Pfizer.com. I'm joined today by Dr. Albert Bourla, 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 the statements. With that, I will turn the call over to Albert.

Thank you, Francesca. Good morning, everyone. We are pleased to report that we've had a strong first half of the year and our business is performing well. We drove progress in the second quarter with solid execution as we continue making a difference in the lives of patients around the world. Through the first six months of 2024, we reached more than 192 million patients with our medicines and vaccines. Today, I will provide updates about how we continue advancing our key strategic priorities in the second quarter. I will also mention examples from just the past few weeks when we have achieved a series of regulatory approvals, pipeline advances, and other positive developments that we expect to fuel our progress through the rest of the year. We are pleased with the strong financial results coming from our disciplined execution. In the second quarter, for example, we achieved year-over-year revenue growth for the first time since the fourth quarter of 2022, when our COVID revenues had reached I let him speak. Dave will talk about this and additional aspect of our financial performance as well, of course, our outlook. And then we will take questions. Before we go further, I will touch on some recent announcements about our leadership team and board of directors. I'll start with Michael Dorfstein's coming departure. It's hard to find words that do justice to the substantial impact Michael has had during his 15-year tenure at Pfizer. Michael transformed our R&D engine, ultimately delivering 35 approvals that have been meaningful for millions of patients globally. I thank my colleague and my friend for these tremendous contributions to human health. I look forward to working closely with him over the coming months as we search for his success. Until then, Michael will continue to lead as our Chief Scientific Officer and President of Pfizer Research and Development. I want to welcome Andrew Boe, our new Chief Strategy and Innovation Officer. Andrew brings deep clinical, scientific, and biopharmaceutical sector expertise, and we are fortunate to have him to help shape and guide our strategy. While Andrew is not able to join us today, because he is relocating with his family to the United States, he will be with us for future quarterly calls. I also want to mention the recent addition of Cyrus Taraporevala to our board. We are committed to strong governance supported by directors with a breadth of unique experiences, skills, exactly like Cyrus. Cyrus was president and CEO at State Street Global Advisors until he retired two years ago. And he brings vast experience in investment management and financial markets. We are thrilled to have him joining our board. Now I will turn to our performance. The five strategic priorities we served at the beginning of the year remain unchanged. With our focus on the most important opportunities for advancing and strengthening our company, we are confident we remain on track in 2024. In the second quarter, our colleagues moved our business forward in each key strategic area. As a reminder, they are achieving world-class and quality leadership, delivering the next wave of pipeline innovation, maximizing performance of our new products, expanding margins by realigning our cost base, and allocating capital in ways that will enhance shareholder value. We believe we are well positioned to continue creating value for our shareholders. I want to reinforce our commitment to maintaining and growing our dividend over time. And as Dave will discuss in more detail, we are raising our full year 24 guidance ranges for revenue and adjusted diluted earnings per se. Now, I'll turn to our progress towards achieving the first one, world-class oncology leadership. Last year, we acted on our bold vision of combining Seedens transformative ADC medicines with Pfizer's expertise, innovation, and scale. We believe we could help people with cancer live better and longer lives and capture a differentiated opportunity to drive long-term sustainable growth for our company. At the halfway mark in 2024, we are on track to make this vision a reality. And we are pleased with the continued success of our integrations. We've had high rates of colic retention and acquired season products are contributing meaningfully to our evidence. In particular, PADSEF is rapidly progressing toward becoming the standard of care for patients with frontline locally advanced or metastatic urothelia cancer. We are pleased with the strength of other key products across our oncology portfolio. Extended, Lord Brennan, Bractovi-Mectovi combination, for example, continue as significant growth drivers during this quarter. Our robust oncology commercial performance in the first half of 2024 included full FDA approval for Tiftag and European Medicines Agency approval for the Talzena plus Xtandi combination. We also received positive CHMP opinion for the Bractovi-Mectovi combination and for Patsy. The last one is a notable development because Pfizer receives royalty revenues for these products marketed in Europe by our partners. These highlights illustrate how we are already delivering breakthroughs that dramatically improve the lives of people with cancer. Of course, we are also working to develop future breakthroughs where we have the opportunities to bring the most important new therapies to patients in need. I will review several recent pipeline highlights, starting with obesity. Earlier this month, we announced our plans to move forward with development of danugliperin, our oral GLP-1 receptor agonist that is the most advanced candidate in our robust clinical and preclinical obesity pipeline. In previously reported results from the phase 2b study in obesity, danugliperin demonstrated what we believe is good efficacy in its twice-daily formulation. For tolerability, we previously reported the maximum rate of GI adverse events across all doses investigated. Looking at individual dose levels in our phase II BGPAD, however, we observed tolerability profiles that are competitive for the class. Our efforts are now focused on developing the once-daily formulation essential to delivering a competitive oral product. We were encouraged by a pharmacokinetic study evaluating multiple modified release technologies and formulations. This strengthened our confidence in potentially delivering a competitive once-daily pill at those levels expected to be efficacious. We plan to conduct dose optimization studies in the second half of this year that are intended to inform our registration and labeling studies. Obesity represents a growing area of patients' need, and it is a key area of focus for Pfizer's R&D program. We believe this study results, along with learnings from our previous Phase 2 studies and data that we have accumulated from more than 1,400 participant patients, leave us well positioned to execute on a registration enabling study as we work to deliver a competitive product in a rapidly growing market. When we hosted our Oncology Innovation Day in February, we shared the pipeline milestones that would mark our success over the next year, and we are already demonstrating progress. A highlight was our strong presence at the American Society of Clinical Oncology annual meeting last month. which was anchored by three positive phase 3 readouts. Follow-up data from the phase 3 CROM study of Lorbrenna in patients without positive metastatic non-cell lung cancer showed 60% of patients on Lorbrenna were living beyond five years without disease progression. This strengthens Lorbrenna's position as an emerging standard of care in the frontline setting. Data from the Phase III Echelon III study of aceterase in combination with lenalidomide and rituximab demonstrated a clinically meaningful improvement in overall survival for patients with relapsed or refractory diffuse large B-cell lymphoma. And data from Phase III study evaluating an additional aceterase combination regimen So progression-free data in patients with newly diagnosed classical hot skin lymphoma, while significantly reducing side effects compared to a standard of care regimen used in Europe in this setting. We have advanced our oncology clinical pipeline in 2024. We faced three studies for signotatum vedotin, our integrin beta-6 directed ADC, At Irnocycli, our selective CDK4 inhibitor, Elrexfio in the second line setting in relapsed refractory multiple myeloma, and Mevromestosta, our EZH2 inhibitor, which we are now moving to phase three and anticipate enrollment beginning in August. We will continue working towards our 2030 oncology strategy goals on delivering eight or more blockbuster medicines and doubling the number of patients treated with our innovative cancer medicine. We also have momentum with our vaccine programs. In our next gen PCV candidate, for example, we have advanced to a phase two program in both adults and pediatrics based on encouraging clinical data that we receive that highlight our industry-leading capabilities in expanding valency beyond 20 serotypes. We expect to be highly competitive by offering the largest serotype coverage in a single vaccine, while strategically addressing the persistent medical need across invasive disease, antibiotic resistance, and challenging serum. In RSV with Abrisvo, I'm pleased to report that yesterday we received an approval for Abrisvo's ActoVial presentation in the United States, a presentation that offers significant advantage, such as never frozen, unique system enabling one-step reconstitution, highly valued by pharmacists. Additionally, we have submitted for label expansion in both the United States and Europe for adults 18 to 59. In our malignant hematology programs, we are also driving progress. Last week, we reported positive results from a phase 3 study demonstrating the safety and efficacy of our one-time gene therapy candidate for people with hemophilia A. As we continue to advance our pipeline, additional milestones include expected updates later this year about our COVID flu combination vaccine, about Mastarsima for hemophilia A and B, and Possegroma for cachexia, a wasting disorder associated with chronic diseases. Now I'll turn to our strength with the commercial execution of our business. Another strategic area of focus is protecting and growing our core product portfolio while we also maximize the performance of our new products. We continue to see encouraging progress with our team's execution. NERTA is an example where we are rising to meet substantial demand. This product delivered strong results in the quarter with 44% year-over-year global operational revenue growth. We see additional opportunities for expanding share in both acute and pre-vascular usage, as well as growth opportunities in international markets, where we are making progress with our launches. I hope Alexander will be able to touch based on that during the Q&A session. Now I will touch on a few additional product portfolio highlights. In the paediatric segment, Prevener 20, continues to demonstrate strong performance that reinforces a leadership position among pneumococcal vaccines in the United States, where our market share grew to greater than 80%. During this quarter, the performance of Brisbane was in line with seasonal vaccine trends. We remain confident in our full year performance as we believe we are well positioned to help address the expected rising need later in the year among older adults at increased risk for RSV. Litfulo is a product we launched last year and we are encouraged by strong demand. Approximately one out of every two new patients on advanced systemic therapies is receiving a Litfulo prescription. a position we expect to grow as we continue focusing on execution. We view Velsipiti as a promising and much-needed option for adults with moderate to severe active ulcerative colitis. We are encouraged by recently securing preferred coverage for Velsipiti at our first large national payer. We expect to see the impact of this in 2025, and now we are working to build on this with additional payers. When we consider core products in our portfolio, we are also seeing positive impact from strong execution. The Ventacle family of products offers a good example of how we are making a difference for patients and our business. We are accelerating growth by working with physicians to drive improvement in identifying the appropriate patients with ATTR cardiomyopathy and helping patients to access and stay on the therapy once it is prescribed. With strong growth through the second quarter, we believe there is additional opportunity to identify more patients who could benefit from our vintage products because of high unmet need. It is estimated that nearly half of those with this progressive and deadly disease have yet to be diagnosed. Eliquis was another significant contributor to our results as we continued to claim greater share in a growing oral anticoagulant market. Now, let me briefly wrap up. First, I would like to thank my more than 80,000 colleagues for the dedication they are showing each day to our purpose of delivering breakthroughs that change patients' lives. We are confident in our business with our focus and execution, along with our deep expertise in driving innovation and advancing our pipeline. We believe we are on track to deliver on our full year financial commitments in 2024. I walked through our progress with three of our strategic priorities. And now Dave will cover our work to expand margins by realigning our cost base and allocate capital to enhance stakeholder value as he discusses our financial performance and outlook. With that, I turn it to you, Dave.