Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's third quarter 2024 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DeMartino, 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 DeMartino, 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 third quarter of 2024 via a press release that is available on our website at Pfizer.com. I'm joined today by Dr. Albert Borla, 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. Members of our leadership team will be available for the Q&A session, including Dr. Andrew Baum, who recently joined Pfizer as EVP and Chief Strategy and Innovation 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 FEC filings, which are all available on the IR website on Pfizer.com. Forward-looking statements on the call and the subject's 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. Thank you for joining us today. Our team continues to execute, and we are pleased to report another quarter of strong performance. We are guided by our purpose of delivering breakthroughs that change patients' lives, And I'm proud that we have reached more than 270 million patients with our medicines and vaccines through the first nine months of 2024. The focus on execution excellence is starting to deliver results, with market share gains in the U.S. and international, as well as robust growth in revenues and EBS. As a result, we are raising guidance ranges for our full year 2024 total revenues and adjusted diluted earnings per share. In January, we presented the five key priorities that would guide Pfizer during our year of execution. Today, you will hear how we advanced our business in the third quarter with each of these strategic priorities. I will focus on highlights showing our progress. With the first three, Dave will discuss our continued work to reduce our cost base, expand our margins, and strategically deploy our capital. Then, we will review our financial performance during the quarter and explain why we believe we are well positioned to deliver on our financial commitments and create long-term value for shareholders. And then we will take questions. So with that, I'll turn to our performance against our priorities during the quarter. To state it simply, Oncology is having a great year and delivered another quarter of strong performance with 71% year-over-year performance growth resulting from solid demand across our product portfolio that includes legacy SIDN and legacy Pfizer products. We set a goal to achieve world-class oncology leaders. In the US, we are already the third-largest biopharma company in oncology by revenue through the first half of 2024, and we are proud of the progress we are making toward our goal. Demand continued to increase for extended. The market leader for four types of advanced prostate cancer grew 28% year-over-year. Talxana grew by 77% in the quarter versus the same quarter from a year ago. We are encouraged by the opportunity to further advance the prostate cancer treatment landscape based on the exciting overall survival data we announced earlier this month from the Phase III TALAPROS study. In the study, Talxana, in combination with Xtendi, demonstrated statistically significant overall survival benefit in patients with metastatic castration-resistant prostate cancer, becoming the first and only such combination to do so. Driving scientific breakthroughs in genitourinary cancers is one of the key areas of focus in oncology. The TALAPR2 results show how we continue innovating to improve survival for men with prostate cancer, which is the second most common cancer in men and the fifth most common cause of cancer death among men worldwide. We saw continued momentum during the quarter with the ongoing launch of Patsy with Pembrolizumab for patients with advanced metastatic bladder cancer, regardless of their eligibility to receive cisplatin-based chemotherapy. This combination has quickly become the most prescribed first-line treatment in the U.S. for locally advanced metastatic urothelial cancer. In thoracic cancer, we achieved 31% of the rational growth this quarter with Robrenna, a treatment for adults without positive metastatic non-cell lung cancer. Following the release of our five years of ground data during the ASCO annual meeting, we are observing an acceleration of first-line new patient starts around the world, and in particular, in our key markets of the US, China, Germany, and France. Our Breftovir and Mectovir combination also achieved strong year-over-year growth in the third quarter of 32%, primarily driven by growth in the metastatic non-small cell cancer indicators. And we continue to be pleased by strong performance with the launch of Elrexu, which had about 80% sequential revenue growth over the second quarter of 2024. In the U.S., we have more than doubled our new patient start since January. In Japan, we were able to catch up with competition and launch as the first to market PCMA by specific, helping to address an unmet medical need for patients with triple-class exposed multiple myeloma. We believe El Rexio has the potential to be a transformative treatment option for people with multiple myeloma, and we are continuing to advance development with four ongoing registrational studies in earlier lines, of therapy that, if positive and approved, could support serving a way more expanded patient population. Now, I will turn to some select highlights of how we continue strategically advancing our pipeline. We are prioritizing opportunities where we have scientific leadership and deep capabilities to address significant and met patient needs. Earlier, I spoke to the strength of our market in oncology medicine. Our pipeline, however, is what excites us the most. Lung cancer is the number one cause of cancer-related death around the world. At the recent ESMA Congress, we saw long-term follow-up results from Farrer's trial evaluating BRAFTOVI and MECTOVI in patients with BRAF V600E mutant metastatic non-small cell lung cancer, which demonstrated compelling efficacy for patients. We are also rapidly advancing to next generation ADC candidates with the potential to make significant impact on the more than 300,000 patients with non-small cell lung cancer in the U.S. The first is Sigvotatu Vedoti, which is now in phase three, and we are planning additional pivotal trials in the coming months. The other one, is a PD-L1-AV ADC. We are equally encouraged by the updated phase one data. We presented the test mode for this ADC, and we are planning registration enabling trials in 2025. Our sanitary pipeline is expanding. We are starting another novel ADC, sclisitamab-bedoxin. in two ongoing registration-intent trials in urothelial cancer. And Mevrometastat, our novel EZH2 inhibitor, is another example of the progress we are making throughout our pipeline. This has been studied as a new potential treatment for men who have metastatic castration-resistant prostate cancer, and we are enrolling currently patients into phase three studies. Finally, to build on the foundation for IBRAMS, we are making progress with development of two candidates we believe can replace the current backbones of ER-positive HER2-negative breast cancer. At Ilmos Cycli, our potential first-in-class CDK4 inhibitor is enrolling a second-line Phase III trial, and we expect to start a first-line Phase III study by early 2025. And we expect The first phase 3 data in the coming months for the degesterone and estrogen receptor degrade that we are co-developing right now. Our fourth generation PCV candidate, now in phase 2 adult and pediatrics, covers 25 serotypes, including improved immunogenicity for serotype 3, very important, which is one of the largest remaining contributors of disease. We are focused on building on our leadership in the industry by continuing to expand Valency with our fifth generation candidate, which is in preclinical development that covers over 30 serotypes. In the last several months, we have advanced a potential new vaccine against C-Depth, which is considered an urgent public health threat that lacks any approved vaccines. Leveraging experience from our previous C-Depth program, we have developed a new formulation for a second generation candidate. After encouraging phase one data with this new formulation, we have advanced to our phase two study already. We are also working to support significant needs for about 90 million Americans and 200 million Europeans in areas with high incidence of Lyme disease. VLA15 is a vaccine candidate We are co-developing that is intended to protect against the six most prevalent serotypes in North America and Europe. A phase three trial is underway and pending positive data and regulatory approval, VLA15 would become the only vaccine available to help prevent the acute severe and long-term health consequences of Lyme disease globally. Vaxclavir. is the standard of care COVID-19 oral treatment for those at high risk of progressing to severe disease. We believe, however, that it is an opportunity to expand both our therapeutic impact and market position with our next-generation oral antiviral candidate, Ibuzatrelvi. In a Phase II study, we have demonstrated robust antiviral activity at all doses and without the need for returnable boosting. We have addressed the drug-drug interactions and the metallic taste associated with Vaxclot. We expect to start a Phase III study in the coming months. We are also moving forward with our Phase III program in non-segmental vitiligo with retlicitinib, a candidate with a differentiated JAK-TEC mechanism developed in House and Pfizer that has the potential to be an expansion of indications for litfulo which is currently approved in severe alopecia areata. Pitiligo, like alopecia areata, is an autoimmune disease with high unmet need. It is the leading cause for skin depigmentation and affects nearly 3 million patients in the U.S. alone. We are also enthusiastic about our two first-in-class tri-specific antibodies with early data demonstrating excellent three-in-one patterns. We believe this program has the potential to deliver improved efficacy in atopic dermatitis with an ongoing phase 2 study evaluating safety and efficacy. We had a phase 2 redoubt of pansegroma, which is another in-house discovery and development. We are encouraged by the potential for a breakthrough for patients with cancer of cachexia, who lack treatment options for this life-threatening wasting condition that currently has no FDA-approved treatments. The Phase II study met its primary endpoint of change from baseline in body weight compared to placebo across all dose tests. And the highest dose evaluated showed improvements for baseline in appetite, cachexia symptoms, physical activity, and muscle mass. Based on these positive results, we expect to advance to a registration-enabling study next year. Our phase two study in patients with heart failure-related cachexia is ongoing. We remain on track with our dose optimization studies for danuglipor, our oral GLP-1 receptor agonist candidate, and look forward to discussing more about this in early 2025. In our broader obesity portfolio, We continue to advance our early stage candidates, including our oral small molecule GIPR antagonist, which is advancing to phase two in 2024, this year, and an additional once daily oral GLP-1 receptor agonist in phase one. The highlights I've mentioned today across important therapeutic areas show how we have made meaningful advancements with our pipelines. As we announced earlier this year, Dr. Michael Dostin, Pfizer's chief scientific officer, will depart from Pfizer after 15 years of leading Pfizer's research efforts. Our progress for selecting a successor is not quite advanced, and we look forward to announcing an update soon. Now, I will turn to our commercial performance. Another one of our strategic priorities is maximizing the performance of our new products. I am pleased that the decisive actions we took to enhance our commercial organization at the beginning of the year are yielding satisfactory results. With NURTE, we saw 28% total prescription growth and continued leadership in the oral CGRP class. Importantly, 85% of primary care clinicians writing CGRP prescriptions for the first time choose NURTE, 85%. This shows the progress we are making in primary care, as well as our work with payers to remove barriers for timely patient access to treatment. Among our vaccines, we are very pleased with our performance since the launch of Prevent20, which has already achieved 83% market share in pediatric and 97% in adults. With last week's recommendation by the Advisory Committee on Immunization Practices, to expand adult pneumococcal vaccination to include all adults age 50 and older, we believe Rev. Wendy is well positioned to serve an expanded population in the United States. Outside of the U.S., we are predominantly serving the pediatric market, and following the recent first quarter approval in Japan and the EU, we are gaining vaccine technical committee recommendations and several market introductions. With Abrismo, we continued improving our U.S. market share position with strong commercial execution. Our market share of sales to retailers and clinics out of wholesalers has exceeded 50% for the quarter, and our market share of shops in arms in the retail setting has increased for nine consecutive weeks through mid-October, currently reaching 43%. Last week's FDA approval for a bridge vote for patients 18 through 59 who are at increased risk of low respiratory tract disease caused by RSV could help us serve an expanded population over time. With the rise in COVID-19 infection in the summer and early fall, we have responded to increased demand for Paxlovid as we launched in the U.S. commercial market at the beginning of the year. Our better than expected growth during the quarter for Paxlovid higher inflection rates, and the strong commercial execution of our team. Our ability to execute effectively includes improving patient access, raising awareness of this treatment option, expanding use of alternative sites of care, and also continuing to educate healthcare providers. The demand for Paxlovid seems to have stabilized. In the slide, you can see the total number of patients treated with Paxlovid in 24, which is very similar to the same period in 23. It appears to be closely correlated with each wave of COVID-19 that also appear to have very similar patterns in 23 and 24. The 63% operational growth in the third quarter of our family of products is a direct result of our progress in expanding the healthcare provider base and supporting clinicians in identifying more patients who can benefit from this therapy, as well as our work to improve patient access and adherence to therapy. Internationally, the vertical is reimbursed in 44 markets right now, and more are expected next year. While diagnostic rates vary across markets, the unmet medical need remains significant, as illustrated by the 10% increase of patients on treatment in the third quarter versus the second quarter of 2024 in the U.S. We were pleased by the 74% quarterly operational growth and continued progress with expanding access with Sibinco, a treatment for patients 12 and up with moderate to severe eczema who didn't respond to other treatments, and 27% growth in the U.S. in the second to third quarters of 2024. With Litful, the first and only FDA-approved prescription pill for both adults and adolescents, as young as 12 with severe alopecia areata. What now and I will turn it over to Dave.