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.

Thank you Albert and good morning everyone. I will build on Albert's comments by reinforcing that we are very pleased with the financial results for the third quarter of 2024. These results demonstrate that our focus and our execution against our five strategic priorities are driving positive patient outcomes and continued financial and operational strength. In addition to our strong top line performance, our cost reduction programs are creating a more efficient organization, setting the stage for increased capital returns and supporting our commitment to both maintaining and growing our dividend, all while enhancing shareholder value. This morning, I will briefly review our Q3 P&L performance. I'll highlight our capital allocation priorities, and touch upon our full year 2024 financial guidance. Additionally, as we approach the end of the year, I will also share several modeling considerations as we begin to plan for 2025. Turning first to the third quarter performance versus the same period of last year, let me walk down the P&L. Total company revenues were $17.7 billion, representing an impressive 32% operational growth. Our COVID-19 products were significant contributors with Paxlovid generating $2.7 billion in revenue. This included $442 million related to delivering 1 million treatment courses to the U.S. government strategic national stockpile. Comirnaty, our COVID-19 vaccine, contributed $1.4 billion in revenue. Our COVID-19 products were not the only drivers during the quarter. Our non-COVID products also exhibited robust performance with revenues of $13.6 billion, reflecting 14% operational year-over-year growth. This performance shows that our refined commercial approach is working. We continue to focus on key products and geographies. We've refined how we allocate our commercial field resources globally. and we're further optimizing our marketing resources into key priority areas. We saw a strong contribution from our recently acquired Cgen products, including PADSEV, which continues its momentum following the results of the EB302 study last year. Other key growth drivers included Vindicale, Eloquist, Exandi, and Nurtek, partially offset by declines in Zelljans and iBrands. Adjusted gross margin for the third quarter is approximately 72%, primarily the result of a net unfavorable mix related to our COVID-19 products, primarily due to the community profit split with BioNTech and applicable royalty expenses, as well as a slight dampening due to the associated costs incurred with the withdrawal of Oxbride up. All of this was partially offset by our ongoing focus on cost management across our manufacturing network. We continue to expect gross margins to be in the mid-70s for the full year, and as previously communicated, long-term improvements in gross margins will remain a key focus for the company over the next several years. We expect to achieve savings from phase one of our manufacturing optimization program beginning in 2025 and deliver approximately $1.5 billion in savings for the first phase by the end of 2027. In parallel, we continue to evaluate our strategy for both phase two and phase three, which will focus on network structure and product portfolio, respectively. And we expect to have more information to share on those components of the program once they become available. Total adjusted operating expenses decreased 2% operationally to $5.8 billion, and I will note that this amount includes spending acquired via our CGEN transaction. And looking at the components, adjusted SINA expenses increased 1% operationally, driven primarily by marketing and promotional expenses for recently launched and acquired products, partially offset by a reduction in the U.S. healthcare reform fees. Adjusted R&D expenses decrease 4% operationally, driven primarily by lower spending on certain vaccine programs, as well as our cost realignment program, partially offset by an increase in spending related to the CGEN acquisition. We continue to be disciplined with our operational expense management and remain on track to deliver at least $4 billion in net cost savings from our cost realignment program by year end. Q3 reported diluted earnings per share was $0.78 per quarter, and our adjusted diluted earnings per share was $1.06, benefiting from our top-line performance and efficient operating structure, as well as a favorable tax rate driven primarily by jurisdictional mix. As mentioned last quarter, unique one-time items included in our GAAP results and excluded from our adjusted results this quarter include a $420 million charge related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program earlier this year. Now, let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of both maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return, and making value-enhancing share repurchases after delivering a balance sheet. In the first nine months of 24, we returned $7.1 billion to shareholders via our quarterly dividend, invested $7.8 billion in internal R&D, And as we expected, completed business development activity was minimal. Our commitment to delivering our capital structure to a gross leverage target of three and a quarter times remains a key priority. In support of that goal, year to date, we have delivered by approximately $4.4 billion, paying down approximately $2.3 billion in maturing debt, and approximately $2.1 billion in commercial paper. And in October, we monetized another tranche of our Halion shares, which for reporting purposes is a Q4 event. We received approximately $3.5 billion in net cash proceeds, and our ownership in Halion was reduced from approximately 23% to approximately 15%. Year to date, we have received approximately $6.9 billion in net cash proceeds from the sale of our shares. We intend to monetize our remaining Halion investment in a prudent fashion, considering our cash flow requirements and future market conditions. Overall, in Q3, we generate robust operating cash flows, which combine with the Halion net sale proceeds of approximately $3.5 billion, resulting in a significant free cash flow generation as we enter the fourth quarter. Our objective remains to deliver and return to a more balanced allocation of capital between reinvestment and direct return to shareholders over time. Now, let me spend just a few minutes on our outlook for the full year. Based on our focused execution and strong year-to-date results, we are raising our full year 24 revenue guidance by $1.5 billion and our adjusted diluted earnings per share by 30 cents. We now expect revenues in the range of $61 to $64 billion, and operational revenue growth excluding COVID-19 products is unchanged at 9 to 11%, and takes into consideration reduction of sales associated with Oxprida. COVID-19 product revenues are now expected to be $10.5 billion, $5 billion for Comirnaty, and $5.5 billion for Paxlovid. Our guidance for adjusted SINA, adjusted R&D, and our effective tax rate on adjusted income remains unchanged. And lastly, we expect adjusted diluted earnings per share of $2.75 to $2.95, primarily reflecting the top line increase and absorbing the Uxbrida impact. As a reminder, our EPS guidance includes an anticipated 40 cents of earnings dilution from the CGEN acquisition, largely due to financing costs. Now, as we begin to look towards next year, I want to touch on a few modeling considerations. As we've previously discussed, there are several non-returning items included in our 2024 results. First, during 2024, PAC's low-bid revenue included a U.S. government revenue credit crew-up and the fulfillment of our obligation to the U.S. national strategic stockpile. Second, given our ownership of Halion is now below 20%, we will no longer record equity income from that investment in our adjusted earnings beginning in 2025. And finally, our 2024 tax rate on adjusted income was favorably impacted by timing with respect to the impact of Pillar 2 and, to a lesser extent, audit settlements. All in, these items are expected to have a favorable impact on full year 2024 adjusted diluted earnings per share of approximately 30 cents. In closing, I'm extremely pleased with our third quarter 2024 results and our overall performance this year. Our team remains dedicated to strong operational execution and we believe our cost-saving programs will drive enhanced operating leverage over time that will enable us to consistently deliver on our financial commitments to our shareholders. We are committed to driving long-term value creation through scientific leadership, portfolio strength, and productivity across all aspects of our business. And with that, I'll now turn it back over to Albert.

Thanks, Dave. It's time for the Q&A, but before we take our first question, I want to briefly address a topic that I know is in the minds of many. We seek to be attentive to our shareholders and are always open to hearing their perspective. We had a meeting with Starboard Value two weeks ago. I was there with our lead director and our head of investor relations. The meeting was constructive and cordial. They presented the same deck they made public last week, and given the proximity to our quarterly earnings day, we were mainly in listening mode. While we agree with some of the points they raised, we have vastly different views on many others. For example, they expressed dissatisfaction with our total shareholder return. We are not satisfied either, though we believe we are executing on the best path forward to increase shareholder value. On the other hand, they challenged our capital deployment for business development. We believe that our deals will produce significant shareholder returns, and some of them, like Seedzen or BioNTech, have been transformational for Pfizer. The important thing is what we do to improve performance. In January, we presented a five-point plan aiming to create shareholder value, but has guided our decision-making all year long. We remain focused on executing this plan. and on delivery for our committees, including driving long-term shareholder value. We will engage productively with our shareholders, including Starboard, and we'll consider all good ideas that are offered. And with that, operator, please assemble the queue to discuss our third quarter performance and pipeline.

Thank you. At this time, if you'd like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question. We'll take our first question from Chris Shibutani with Goldman Sachs. Your line is open.

Good morning, and thank you very much. I wanted to ask questions about the pipeline, in particular with regard to obesity, where we appreciate the additional insights into what you have in the clinic. Albert, you previously said that you believe that Pfizer could be the number two company on the market with an oral. That would imply that Danuglipron is the lead asset there. However, you do have two additional assets that we find intriguing, a GLP-1 oral that is in phase one that is once a day but would clearly be behind. and then now an oral GIP antagonist, which I think is a source of debate. Can you frame what your strategy is, how important it is to be second to market versus perhaps having a differentiated approach with these two assets? Thank you.

Look, I will ask Michael to comment because there is a lot of activities going on right now. But my general comment is that As I have said, if Danube moves fast, based on what we know right now, we should be the second oral into the market, provided that the first one will be successful and the other ones will not come before us. But so far, this is what the situation looks like. The market is very, very low, and there is a significant need for oral solution. We know that. So there is no doubt that if successful, we will have our decent market center over there. But the important thing is that the obesity market is developing, let's say, nicely also in terms of science, and we are exploring several other opportunities right now. The two that we have mentioned in the clinic, Michael can speak a little bit more, both about the Danube and the other two, Michael. Thank you, Albert.

Yeah, as you heard in Albert's remarks before the meeting, We continue to execute on our Danuglyphon plan, which includes a once-a-day profile with a modified release type of system. And we do believe that once a day with modified release could have some really special features. And bringing that as a second oral would help really to have a strong foot into this market. In the same way, we have seen the injectable being split between two different products. I don't expect that the various oral will, in the end, differ that much in the GLIP-1 class. So that's why we were keen also to move a GIFR, which could add better reliability and more efficacy And we're right now initiating phase two studies on the backbone of GLEAP agents. And these are our two more advanced bets. Plus, we always like to bring in this huge segment in drives and have more options as we advance. And we have heard there are so many applications for GLEAP ones. And that's why we have a second one today agent. Thank you, Michael. Next question, please.

Thank you. We'll take our next question from Krifa Devankaranda with Truist. Your line is open.

Hey, guys. Thank you so much for taking my question. I have actually a question on your recent data from punsegrimab program in cachexia. You reported positive phase two data. And just broadly speaking, you know, this program has been previously highlighted as well. For the registrational trials, Would a trial that replicates your phase two in a larger group of patients be sufficient, or would you need to show outcomes like survival? And also, as we await details of the registrational trial, can you help us understand how big of an opportunity you see for this drug? Thank you so much.

Let's start with Michael, a little bit on the science, and then maybe Andrew can speak about the potential market size of the CAC-X.

I think in general for cancer agents, and this is more in the supportive care, we're addressing segments of unmet patient needs, which relates to be able to regain performance status with better body weight, have higher physical activity, and be able to go through more treatment cycles, which should often translate to better long-term survival. As you know, that is always dependent on how patients cross over to different trials. So I do think initial registration will come from similar endpoints as in our Phase II studies, but we clearly aim to translate that better patient performance to other outcomes that are more harder endpoints, going through more treatment cycles and treatment that correlate with better cancer outcome over time. And this will be shown in multiple cancer types. So we do think, similar to other products that earlier have been heavily used in supportive cancer care, this could be a very large opportunity. And in addition to that, we are running heart failure studies, and looking at a third opportunity, also large chronic disease.

And with that, Andrew, some comments on the potential of this molecule?

Yeah. Hello, Kripa. I'm building on Michael's comments. Look, CATEXA is a massive unmet medical need. It's 50% to 80% of patients with oncology suffer from it, particularly, as you know, within pancreatic and non-small cell lung cancer. It's probably about 20% to 30% in heart failure and COPD. The size of the market really depends on whether it's viewed as a supportive care therapy. But also, obviously, as Michael mentioned, whether you have outcome benefit. And obviously, depending on the outcome of those trials, we're going to be looking at different price points. So the size of the market, or particularly the size of this drug, is going to be very much informed by the data that we deliver in the pending phase two and phase three trials. Thank you.

Next question.

Thank you. We'll take our next question from Umar Rissa with Evercore ISI. Your line is open.

Hi, guys. Thanks for taking my question. I feel like it's still very early in your engagement with some of your shareholders and the new shareholders, so perhaps it might be too premature to ask much further on that. So instead, maybe I'll focus on pipeline briefly. I know you mentioned, Michael, that the oral GIP antagonist adds better tolerability and more efficacy. It sounded like you were implying it's more incremental to what an oral glip could do as a standalone. Could you just lay that into context? For example, in the four-week phase one study you ran, did it hit 4% to 5% weight loss? And secondly, the more than 30-valent pneumococcal vaccine that you guys disclosed this morning, does it have more than one carrier protein? Thank you very much.

Michael? Yeah, I think... the ability of GIFR to act in concert with GLIF-1 has been well documented in a few different peptide settings. So we aim to be the first to document this with oral treatment objectives. That's what we want to reveal right now. Our new platform for PCB generation fourth and five will include a number of technical improvements. We don't want to disclose those today, but we're open to mention that our PCB fourth generation, which covers 25 serotypes, have as an example an improved serotype three. based on new technology that moves it far beyond what we believe any other technology has been able to accomplish. And why is that important? Well, serotype 3 covers somewhere between 15% to 30% of disease in different countries. And improving on that can have a bigger impact than adding a number of broader... It will be a combination of such improvement and many more serotypes. Thank you, Michael.

Next question, please.

Thank you. We'll take our next question from Truong Nguyen with UBS. Your line is open.

Hi, guys. Sorry, I was on mute there. Truong Nguyen from UBS. Thanks for taking my questions. I have two. So thanks very much for the comments on the activist investor. You said you disagreed with the thoughts over capital deployment, and then you cited significant shareholder returns for CGN and BioNTech. What's the difference between what you're thinking and perhaps what the street's thinking here on BD? And then how do you intend to restore that investor confidence back into the company so that bridge between your expectations and the street can be aligned? And then just on your commitment to delivering, thanks for the comments on the prepared remarks here. Is there an appetite to deliver even quicker and sell the hospital business and fully divest the halion stake earlier? And, you know, you do have products going off with LOE soon. That could give you a little bit more flexibility on the balance sheet. So, yeah, just thoughts here.

Why don't we start with this one, and then I'll take a little bit of the activist question.

Yeah, so first on the delivering point, yes, our objective is to deliver as rapidly as possible. And I think the company's been laser focused on doing that, given the fact that we've taken out about $4.4 billion in debt year to date, and we'll continue to do that. Secondly, without speaking directly around any potential BD opportunities here, is we're always looking to evaluate the infrastructure that we have and the assets that we currently maintain and understand if there's availability to, I'll say, monetize some of those assets over time to further support our delivering activities. So I would say all options are on the table and we'll continue to evaluate on what makes the most sense for us strategically long-term.

As regards to our projections compared to the street projections in the business development, First of all, let's start by saying that by far the two biggest is Seedzen and BioNTech in terms of revenues, right? And in both of that, I think the street move on Seedzen way up compared to when we made the deal. And on the Comirnaty, we are very, very stable. The other ones that also, if you add to that the BioHeaven with the Nurtek, which we are on our plans and we just exceeded for the second quarter, street expectations, it is covering 80% of the investment that we have made and probably way more in terms of revenues. And the most important thing is that those seeding, for example, or the biotech with our development of mRNA infrastructure around the world and the seeding acquisition with our taking over the ABC technologies of it, which was a unique, unique asset, is transformational profiles. It's not the revenue growth that we are seeing right now, and we'll continue seeing all the way towards the end of the decade. But it is two ADCs, one already in phase three, the other is about to start phase three, that we got from CIDR. One, the SV, and the other, the EDL1. ADC, those are mega blockbusters if there are technical successes. Mega blockbusters. And we are moving to phase three because we have seen very positive earlier data. The same issue we are starting with in the genitory cancer, another ADC. So I would say that I think we truly think that this was well-invested capital and will demonstrate significant value for shareholders. But I want also to make a final comment for any discussion with activists. But no matter if we agree or disagree on what has happened, I think the most important thing, it is what we are doing going forward. Starbucks has not presented any specific actions, but they suggested something needs to change. From that point, in the beginning of the year, already a year ago, we are already starting changing a lot of things. Over the past 10 months, we have implemented changes like we changed our commercial model to separate the U.S. and international business and appointed new leaders who have now delivered three consecutive quarters of revenue and interest rates. We integrated Caesar and created an end-to-end oncology research organization to ensure a successful integration of the company, of the Caesar pipeline. And we have retained the vast majority of the legacy Caesar colleagues And we have delivered multiple, multiple successful readouts from that. We announced the plan to reduce OPEX by $4 billion, which we are executing successfully without negatively affecting the top line. We announced an additional plan to reduce manufacturing costs by $1.5 billion, which so far is delivering satisfactory results. We brought in Andrew Baum, which is a knowledgeable research analyst to help prioritize our R&D pipeline and future projects. business development. We are advancing now the process of selecting a new scientific officer. And we have enhanced our board with two terrific new directors who have deep expertise in corporate governance and stakeholder value creation. So what we believe is that all these things are the result of an intentional five-point plan that we rolled out already in January of last year. So as I said in my personal, let's say, remarks, We plan to engage with shareholders, including Starboard, and consider any good ideas. They create long-term shareholder value. But I don't think that the statement, something needs to change, is really pragmatic because it's coming 15 months later. Next question, please.

Thank you. We'll take our next question from Louise Chen with Kantor. Your line is open. Hi.

Thanks for taking my questions. So just had two here. First one I wanted to ask you is how we should think about the big pushes and pulls for sales and EPS in 2025. And when you might give guidance, could it be as early as this year? And then second one, just on CGEN, just wondering how the integration is coming along and if you have any updates to some of the metrics that you gave like sales in 2030 and what have you for the CGEN deal. Thank you.

Okay, David.

Yeah, so thank you. Regarding 2025 is really topical because we're in the middle, as you can imagine, building our 2025 financial plan here across all of our business lines. To your point, there's going to be a lot of pushes to think about growth into next year. is we will provide guidance for 2025, most likely by the end of this year. So stay tuned, more to come. We will lay out all the pushes and pulls when we give guidance for 2025 so you can get a very clear understanding of our business and the opportunities to enhance shareholder value longer term.

Chris, can you give us an update on the season integration? Both speak a little bit about the commercial, but also focus on the research, which is a significant value.

Thank you very much for the question. Overall, we're very pleased with the integration to date. We've retained the vast majority of colleagues at Legacy Seagent, and we now have over 1,500 colleagues working in our facilities in Basel, just outside Seattle. As you saw, the global revenue in Q3, we printed $854 million from legacy season, and of that, $500 million in Q3. Season here to date delivered for us $2.3 billion, which is 38% here over here on a performer basis. We continue to execute very well on the portfolio, on the pipeline. We started phase three studies with Desitamab for dotin in urothelial cancer. That's heard too low, which is up to 40% of bladder cancer. With Cigbrotatac for dotin, the differentiated B6A, started the first phase three study in non-squamous, non-small cell lung cancer. That's where we saw the most significant data. And we're also planning to start a combination of sigvotetaxidotin plus pembrolizumab in the first-line setting of non-small cell lung cancer and recently discussed and aligned with the FDA on the trial design and on the dosing. We're also progressing and should start a phase 3 program with the PD-L1V, the dotin ADC, in combination with pembrolizumab early next year. So overall, great progress. Commercial performance so far, we haven't missed a beat, and we continue to execute on the pipeline. Thank you, Chris. Next question, please.

Thank you. We'll take our next question from Jeff Mechamp with Citi. Your line is open.

Good morning, everyone. Thanks so much for the question. Just had a couple quick ones. Michael, another one on obesity, and I know you've added assets outside of Daniel Glipron and appreciate that it's early. I want to ask you, what does success look like on efficacy, just given the bar today? And then strategically, how does Pfizer view orals versus longer-acting injectables when you think about the investments Pfizer is making in this category? And then real quick, Albert, on the IRA, obviously seems here to stay, but when you think about the potential for a new administration, you know, what would Pfizer like to see, you know, obviously beyond closing the gap between orals and biologics on exclusivity? Thank you.

Michael? You know, for to keep it very general, I think you have a number of things that could be advantageous. One is, of course, they combine so well with all other drugs that are involved in cardiometabolic disease to give long outcomes. And what you're looking for, I would say, is 10% to 20% olivase, the lower range for the first glyph. The upper range is where you can see oral-oral combination edge towards. And that's very much similar to what you can see with a peptide. I kept it very broad with a lower and an aspirational range, the lower for more single agents that will edge above that and combo agents that can aspire to go above 15 and edge above that.

Thank you, Michael. Now, on IRA, clearly IRA overall is negative for innovation and does not promote a spirit that people could provide investments. But there are also some good things about it. So clearly, I wouldn't like to see that the out-of-pocket limit that next year would be $167 per month for all your medicines for seniors. But we want to be maintained. But this forced price setting is not a negotiation. And also, the penalty pill between our things that needs to change. And it's not only an IRA. I would mention that 340B right now, it is one of the biggest issues, and it is unethical, and it is the way that it is evolving, and it is creating significant transfer of funds from where it needs to be used, the poorer people, booster the profit lines of some business. So 340B reform is something that myself and the entire pharma setting as a priority. So thank you for your question. Next question.

Thank you. We'll take our next question from Terrence Flynn with Morgan Stanley. Your line is open.

Great. Thanks so much. Appreciate the questions too for me. I guess first one is on the RSV opportunity. Just wondering what you see as the most likely outcome here for revaccination frequency and the potential impact on the longer term market opportunity. And then the second question is more of a clarification on your CDK4 inhibitor. You got it to starting first line phase three study early next year. Just wondering if you can share any more detail there on the design. if that would be a head-to-head versus iBrands, and if it would be in combo with Vepdeg, or if that's a monotherapy-type design. Thank you.

All right. I mean, would you like to speak a little bit about the RSV and the message?

Yeah. Maybe chance to directly answer your question. So, you know, how the market evolves, it's going to be a function of how ASIP recommendations for RSV evolve, and that includes revaccination timeframe, as you mentioned, but also, eligible populations, I don't think it's really productive for us to predict how ACIP is going to evolve these recommendations. But we do feel confident in the BRISVO's profile. And importantly, what I would like to highlight is we feel very confident in our ability to pull that profile through. You heard Albert describe our momentum in the U.S. market, particularly in light of dramatic improvements in our market share versus last year. And we continue to be ready to advance in vaccinations in the fourth quarter as well. And the last thing I would say is the FDA's recent approval of the 18 to 59-year-old at-risk population makes abrisvo the only RSV vaccine that's indicated to protect patients as young as 18 years of age. And it further strengthens this perspective on the viability of abrisvo. Last thing I'll say is on maternal, we have also had really good momentum on our brisbo maternal indication. We see very strong signals in uptake for the month of September. We had a 20% uptake, which is a full doubling of where we ended the last season. And we continue to see uptake amongst OBGYNs and health systems. So in the first four weeks of this season, the units that we ship into those systems are up 56% from the first four weeks of last season. So we see momentum on Abrizvo and we look forward to future ASAP updates.

And Alexandre, you want to add something on international because that's also an important market for us.

Yeah, absolutely. Even though it's still not material yet, we are actually making very good progress. So on the adult forms, we actually got BTC recommendations since the beginning of the year in large markets like UK, Germany, in France, in Canada, in Australia, in Saudi Arabia, and a lot of other mid-sized markets. Lots of positive BTC recommendations. Now we're moving into funding. And as you know, at the second quarter, we said that we won the Exclusive UK tender. That's what we did. We also won the Canadian tender. Now, in terms of reimbursement, we just got, actually, regional reimbursement in Germany, and we are launching at least in October in Germany. Now, all the others, the large markets and the mid-sized markets that I've talked about, are in phase of negotiations. On the adult side, the last thing I want to say is actually we are working toward an immunobreaching study in 2025 in China so that we can do an NDA fighting, which is also an important market for us. On the pediatric side, also we are making good progress. We also got VTC recommendation in large markets like the UK, in France, in Australia, in several other mid-sized markets. And actually, yesterday, we just got also the Pan American Health Organization that covered 40 markets in the in the Americas that actually listed agreeable in their RSV recommendations. So we're getting also reimbursements in France, and we have actually just launched in France recently. There again, on pediatrics, once we got all those positive recommendations, we are moving into reimbursements. So we see great potential. It's going to take a bit of time because we go through all those different steps, but we see good potential there, absolutely.

Thank you.

And then why don't we go to Chris for the question on the design of the phase three. Thank you very much for the question on a termocyclic highly selective CDK4 inhibitor. This is another small molecule that was conceptualized and discovered in our laboratories in La Jolla. And as you know, it's currently in a phase three program for second-line plus hormone receptor positive breast cancer. And this is potentially not only a first-in-class, but best-in-class, highly selective CDK4 inhibitor. And as you know, CDK6 leads to some of the vulnerabilities, including the bone marrow toxicity. And that's why we're focusing on CDK4, which drives breast cancer proliferation. So we believe with the current data, including the safety and tolerability, The early clinical data support the potential for more complete and continuous dosing with CDK4. And as you've seen, we've got no grade 4 neutropenia, no grade 3 or 4 diarrhea, and no grade 4 treatment-related AEs was observed. We've aligned with the FDA on the first line hormone receptor positive breast cancer study, which is starting in the coming months. And it will be against physicians' choice of CDK4 6 inhibitor. Thank you. Thank you. Next question, please.

Thank you. We'll take our next question from Evan Singerman with BMO Capital Markets. Your line is open.

Heather, thank you for taking my question. So I went for Andrew on honor of what I believe is his first call on the other side. So in your first four months or so, can you help us better understand your findings regarding the portfolio? And more broadly, how do you hope to shape and focus the wide variety of assets that Pfizer has to drive sustainable growth?

So now that you're in the dark side, what is your opinion, my friend?

Well, I think, A, Evan, thank you for the question. B, I think in response to Albert's question, I think coming from finance, I guess farmers are stepping to the light side rather than the dark side. But in terms of the question, look, I've always regarded Pfizer's R&D engine highly, just because when you look at the stream of molecules that have been internally discovered at Pfizer over the years, first ALK inhibitor, first CDK4-6 inhibitor, numerous JAKs, a Brisbane, there's clearly a very, very strong record of discovery and execution. And it's not just small molecules I hasten to add. You see that in vaccines and oligos and cell therapies and bispecifics. And for me, when I made the move, this was absolutely key in terms of a company that had this, because if you don't have this, then life is very, very difficult. Now, in answer to where I hope to add value coming forward, I think, as Albert alluded to earlier, historically, perhaps we may have pursued areas where that R&D investment hasn't translated into the type of revenues you want. The point is that this is a much easier challenge to solve It's a matter of taking this incredibly powerful machine and pointing it in the right direction so that we are targeting those areas that translate into revenue. If there's one thing that I think the COVID experience shows you is once Pfizer focuses, execution is something you should feel very comfortable about.

Thank you, Andrew, and Evan, for the question. Next question, please.

Thank you. And once again, to ask a question, please press star 1. We'll take our next question from Courtney Breen with Bernstein. Your line is open.

Hi, everyone. Thanks so much for the time today. This is Courtney Breen from Bernstein. Perhaps building on the last question, looking at slide 28 in the presentation today, it suggested that in the last three months from the end of July to today that there has been no meaningful advancement of the pipeline. albeit there are a number of pipeline actions kind of suggested to be initiating soon. We're suggesting this is likely as a response to the reset and cost cutting that's going on. My first part to this question is how will you ensure that this isn't repeated in further quarters? And how are you balancing the need to kind of take stock and cut while ensuring that high potential opportunities are getting appropriately accelerated through the pipeline?

Then maybe I will ask the two R&D heads to comment on that.

Please, let's start with Chris. Yes, thank you for the question. So just a reminder, this year we've already started eight new first inpatient studies in oncology, which I believe makes us the number one company in terms of phase one clinical trials started. In the coming months, we expect potential phase three readouts for breakwater, which is a very important indication for us in BRAF mutated colorectal cancer, which is up to 10% of colorectal cancer. That will be in the first line setting, a big unmet need because there's particularly poor prognosis patients presenting with BRAF mutated colorectal cancer. We also expect readouts for VERITAC2, ER, PROTAC. We're co-developing with AVENAS for ER-positive second-line-plus metastatic breast cancer, and potentially for CREST, which is a sanlemab, a differentiated subcut PD-1 in combination with BCP in non-muscle-invasive bladder cancer. We will also present in the coming months phase 2 randomized data for mifrometastats, This is randomized phase 2 data in patients with prostate cancer. We've seen the data, and that provided us the confidence to initiate the two phase 3 programs. In the coming months, we'll also start additional phase 3 studies. As I mentioned, CDK4 in first-line ER-positive breast cancer, CIGBOT attack, the DOTA in combination with pembrolizumab in PD-L1 high, first-line non-small cell lung cancer, and CAT6 in ER-positive breast cancer.

So quite impressive from the oncology side. Michael, what about the rest?

Yeah, you know, we thought we helped you to focus by this quarter displaying some nice movement at the most valuable part of this shot, the right hand. When you look over the next 18 months and including oncology and non-oncology, we will have up to 40 different opportunities to fill the left side as I hear you are eager to see progress on and the right side it will include the 40 will be divided between potential approvals projected pivotal readouts and potential proof and that did not even include early signals in clinical development thank you thank you partner for the question next the question

Thank you. We'll take our next question from Steve Scala with TD Cowan. Your line is open.

Thank you very much. Pfizer has previously stated it anticipated having visibility on long-term COVID product sales based on 2024 trends. Since we are now nearing the end of 2024, I'm wondering what that long-term number is. And then secondly, does Pfizer have the phase three booster data for the RS vaccine in adults in-house? And if yes, does the data show a similar step down in booster immunogenicity as did the GSK vaccine? Thank you.

All right. So on the stability, let's maybe, I mean, you want to make a comment, I could also comment, but why don't you?

Well, let me just comment on performance. I think, Steve, I think both on Paxlovid and Community, I think with our performance to date, as well as the quarter, would show us is that these are both entering into a category where we understand what the volumes are likely to be, and we believe these are going to be durable businesses going forward. So, just as an example, on Paxlovid, even if you take the one-time items that Dave alluded to aside for a moment, we've seen significant Paxlovid treatment course utilization, right? Even just in the summer wave that happened over the course of the third quarter, we saw an average of about 100,000 courses of treatment at the start of July, growing to about 225,000 treatment courses in mid-August before that wave declined. And we've built a very durable commercial engine to support that with increasing treatment rates with very viable reimbursement, both on the government side as well as on the commercial side, and a way to activate HCPs and consumers who need treatment. And similarly, on the vaccine, our goal this year with Comirnaty, and we had the benefit of being able to start three weeks before last year, was to start the season with plenty of vaccine in-purchase, both in the retail setting as well in the health system setting. And again, we've demonstrated an ability to do that quite well. When you look at where vaccination is this year versus last year, it's a little bit higher, actually, but a big part of that is just a function of the calendar and the three weeks earlier. We expect to see vaccinations continue in October through December, and the shape of that curve will continue to evolve, but all of this makes us confident that we're seeing a durable business, both on vaccines and PECs.

And for international, this is Alexander. Thanks for the question. So same principles we see enduring business. In community, just want to remind everyone that in the international division, we close our third quarter at the end of August. So basically, you don't see any sales of community simply because most markets are starting their vaccination campaign in September. Having said that, we're progressing very nicely in our key regions. So in Europe, we got the approval of the Gen 1 adapted vaccine in July, and we got the KP2 adapted vaccine in September. Since basically end of August, we started to work with our healthcare authorities partner in Europe, where we have an existing contract to implement the multi-year contract that is in place. Same thing in the UK and Canada. We've also worked with the healthcare authority to actually execute our contract. In Japan, We also got the general adapted vaccine approved in mid-September, and COVID-19 is actually the only PFS vaccine never frozen, which could be a competitive advantage considering the distribution model in Japan. So, again, we see this as an enduring business, and we see us, as I said, executing our existing contract in our key location. From a package standpoint, Q3 was a good Q3 for us, and it's actually very good because it satisfies our perception that the factory business is a sustainable business with sustainable demand, which coincides with the COVID wave. And we had quite a strong spring wave in Europe and Asia, and that translated into immediate demand. Just to close, I want to say that 47 countries outside of the US have transitioned from advanced purchasing into commercial So as we see in the US, it is an enduring. And now the sales that we see quarter after quarter reflect the absolute demand and reflect the waves as they hit the different regions of the world.

And Steve, also, I can't resist also making some comments. In the five and a half years of that CEO, I had 23 earnings releases, of which 22 we beat EPS of Bloomberg and one we missed. And I don't like the one that we missed. And that was in Q3 last year. And we missed it because of COVID. We severely miscalculated. Yes, there are excuses that, you know, the last pandemic was 100 years ago. So we didn't have a benchmark. And also we had to reduce it significantly. We had $56 billion of COVID revenue in 2022. We had a guidance of 22. So we reduced it to 40% on what used to be. However, life proved, but we got it wrong, and us, and Moderna, and everybody else. And the reality was that it was not 22, but 12. So we are very careful now when we speak about COVID, because we don't want to miss it again. But I would like to say that when I see the trends of the COVID business, tax COVID is which for us is even more important because of the higher level of profitability, it is basically identical, the utilization of last year compared to this year. So far, we had 4.9 million patients treated until Q3 with PaxClovid in the US, and compared to 5.2 million people last year, the same year. The treatment rates have improved from 50% last year to 57%. And the fulfillment rates went a little bit down because now there is co-paying from 88% went to 81%. But it's very, very stable. The same is with the COVID vaccination. When you see the trends of COVID vaccination, the utilizations are basically the same like last year, more or less, and still entirely in the season. So there could be fluctuations over there. But so I think you're... statement that shall we consider COVID as normal business now? It's absolutely true. And this is how we regard it. And we will stop separating our business to COVID and COVID because it's Pfizer business. And with that, I will ask Michael to make a comment on the RSE.

Yeah, thank you for your We have started to accumulate data on both durability and the impact of revaccination for RSV. On the majority of patients that, you know, we expected to go to pharmacy for revaccination, the titers remain robust after one and even two years, which is, you know, punctuate the quality of our vaccine. But they, of course, decline gradually, and we can have some meaningful improvement in those titer with a booster. But I believe that likely in three years, around three years, we'll see a drop in the titer that makes the boost really improve meaningful protection for a substantial fraction of the patients. And that's what we are going to monitor now, whether the three years is a good interval. But otherwise, it's performing exactly as expected for a high-quality vaccine. Now, there could be patient groups that go to physician offices that are more immunocompromised, more direct to severe patients that may benefit from a once a year, and that would be more a physician directive. So I hope that will give you a bit of an understanding how this will evolve. Thank you, Michael.

Next question, please.

Thank you. We'll take our next question from Rajesh Kumar with HSBC. Your line is open.

Hi there. My apologies. I was on mute. So two questions, if I may. What are the you know, what is the impact of Part D and IRA on your business next year? Are there any numbers you're calling out which might help us with the modeling? That would be very helpful to understand if there are any impacts. And the second one is appreciate the, you know, color on the C-gen pipeline and, you know, how you're progressing and how the market under-appreciates the size of the opportunity. The sell-side estimates clearly do not reflect your optimism. When is it that you'll feel a bit more confident or what do you need to see to increase your longer-term guidance on C-GEN?

Thank you. Dave, can you take the IRA impact next?

Yes, I'll just hit on it very briefly. Obviously, the IRA and that the redesign has pluses and pushes and pulls to us as we cycle into next year. When we provide guidance by the end of this year, we will give you a view on the net impact of that as we think about our business. So more to come. Hold tight on that.

And there are puts and takes. So positive things and negatives. Right. So we need to assess it. as we are building now these calculations as we are building our budgets for next year.

Seed and pipeline. Chris. Yes, thank you for the question. So I think last year this time we didn't expect we're going to have PatSafe approved in first line bladder and everyone forecasted that approval for the first half of this year and obviously the approval happened very early because of the unprecedented data. So I think the performance commercially is really as we expected or exceeded what we expected in 2024. If you look at the rest of the pipeline now, the new molecules like scototactyl dotan, desitamab, PD-L1B, as well as next generation CD30, ADC called 35C for campycecin, etopo1, And we will present next year's conferences more updated data on these, including in combination with Femoralizumab for Sucretatacvidotin for DV and for PD-L1B, as well as really highly encouraging data for 35C, the next generation CD30. So I think by showing and releasing more data next year will help all of you to build confidence in the pipelines.

Thank you, Bruce, and thank you for the question, Ramesh. Next question, please.

Thank you. We'll take our next question from Akash Khawari with Jefferies. Your line is open.

Hey, thanks so much. So looking at some of your IP around 25-valent Prevnar, it looks like you'll have to step up versus your previous 20-valent vaccine, but it does look like effective serotype coverage could lag meaningfully versus Merck and Vaxxai approaches by 10% or more in older adults. How confident are you that this 4-gen vaccine could stave off a preferential wreck from some of your peers down the line in adults? And then number two, can you talk about what special properties your once-daily modified-release danaglobulin could have outside of improved half-life that investors might be underappreciating? I think those earlier comments stood out to us. Thank you.

Michael? Yeah. You know, the 25-valent that you asked about, the fourth generation, We aspire to be the one that first hits the pediatric market, which is where the bulk of use of doses, but we also think because of this unique improvement of serotype 3 that is far more important than several of the other tiny serotypes will bring an overall value to the adult segment that will be very meaningful. And as you have heard, we are working on a fifth generation that will include both improved performance such as serotype 3 and go far beyond any of those serotypes that you are talking about in numbers. We use 30 plus just to keep a bit of data for the future. For the QD, I think in general, you know, you saw, of course, with injectable when you went from once a day to once a week, and you've got a smoother profile and reduced the number of peaks, that many patients perform better on them. So that's a hypothesis we are keeping our eyes on, that with a modified release, you will have a more smooth profile. You avoid certainly additional high peaks that immediate release have, and that's, you know, something we've seen in other formulation of other drugs, and that's why I think we are trying to be attentive in order to have our eyes on details that can help to make this product a really nice overall product with some differentiation. Thank you, Michael. Next question.

Thank you. We'll take our next question from Pamela Devon with Guggenheim Securities. Your line is open.

Great. Thanks for taking my question. So I have a few, but I'll keep it to two. So one, just on the guidance for the full year, you increased the total sales guidance by 1.5. You increased the COVID products by $2 billion. So I guess you're lowering the non-COVID by about $500 million. I guess some of that looks bright up. I'm wondering if there's anything else you might call out where you're trimming your expectations for the full year. And then second one, sort of tied to the Alkabrida news from a few weeks ago, we noticed the GBT-601 of Savella Tor. So that seems to be progressing still in their pipeline. I'm just curious if you're contemplating or have you made any changes to that approach? And the mechanism is obviously similar to Alkabrida. I'm just wondering if anything you've learned from the Alkabrida situation, we should think about carrying over to this one. Thank you.

Thank you, Will. Thank you, Amil. Is that it for today? Yeah. On the guidance from a revenue perspective, you're absolutely correct. We increased our overall guidance by a billion and a half. We increased PACSLOBA by two, which implies that a $500 million compression someplace else in the business. Think about that as largely Oxbrida. We're absorbing the Oxbrida headwind and maintaining our 9% to 11% growth rate in our non-COVID business, which actually implies that our baseline business is actually performing quite well.

And I want to remind that the non-COVID business was 14% growth this quarter.

Then, Michael, yeah, on the multivariate tour, which was previously called 601, yes, I am encouraged about that opportunity. And, of course, we try here to incorporate learnings, how Oxprisa was developed to our advantage. As you know, that drive was already approved 2019 when we did acquisition a bit later, and with several programs already up and running. 601 by itself is at a tenfold lower dose. It has more potency and brings more improvement for hemolytic anemia, as one example. So this forest has performed very well in our phase two and looked really nice in tolerability So I'm optimistic about that one. When I speak about trial learnings, Oxbrisa was performed in the more recent studies in a part of the world where it's really difficult to do the type of high-quality, consistent preclinical trials. And as we investigate in some of those learnings with Oxbrisa, We have, as a countermeasure, focused on Civelito entirely on high-performance sites that have a history of delivering great drug development. And this will obviously also support a profile. So I'm optimistic. And as a final end here, please remember that when we did the GBT deal, our eyes were really on Civelito, where maybe up to 80% of the value of the deal But Oats Price allowed early interest into the market and we'll continue to investigate Oats Price and keep you updated with what we learn. Thank you, Michael. Next question please.

Thank you. We'll take our next question from Dave Rissinger with Lee Ring Partners. Your line is open.

Yes, thanks very much and thanks for taking all these questions today. So my first question relates to cost cutting ahead. Obviously the company is already engaged in significant SG&A and R&D efficiency initiatives, but I'm curious about whether management sees opportunities for further SG&A and R&D reductions. And then with respect to the over 30 valent pneumococcal conjugate vaccine candidate in preclinical development, Given Mianachan's prior statements about its R&D initiatives, I'm assuming that that will be adjuvanted, and I just wanted to confirm that. Thank you.

Let me take quickly, although that's David's domain, the Centennial R&D. Look, we did significant reductions, and we were very careful to make them in a way that will not affect our pipeline and will not affect our business. So we are very happy with what has happened. Now, are we going to not continue being efficient? Of course we will. I think I see tremendous opportunities ahead of us that we can reduce some of the less ROI-driven investments that we are doing, both in R&D and S&A. And part of that will be, of course, reinvested in more productive investments with a trend to be able to control the cost and absorb our cost inflation. So you should see a constant, very cost-focused, very cost-conscious culture as we move on.

Now, Michael, on the first development? Yeah, you know, Dave, thank you for tying the question. And I think we really have been breaking new ground in our PCV technology platforms. And we were obviously very pleased to get some of our new technologies validated with the serotype suite that you heard about in the fourth generation, the 2025 element. You know, the components that allows us to go far beyond 30 includes a very sophisticated new type of chemistry that on certain types of serotypes can give several-fold improvement in titer. There are minor or more substantial formulation changes that can give some to quite significant fold increase and that may or may not include adjuvants. And there are also experience that we're gaining on the use of carriers that we haven't been working on in TCD before that can add to this toolbox. So we are right now bringing all of these data together And while we see we have learned a lot with adjuvants as seen in our C. diff program that allow us to go from three to two, and we have a toolbox of new adjuvants, whether it really will be necessary or not, it's too early to tell. But I acknowledge your good skills in the vaccine technology, and we keep you updated as we get closer to selecting candidates.

Okay, next question, please.

Thank you. We'll take our next question from Chris Schott with JP Morgan. Your line is open.

Great. Thanks very much. Just two quick ones here. Just first on margin structure and following up on the prior question, is a mid to high 30% adjusted kind of operating margin adjusted for Cominarty still fair for Pfizer? And what's a rough timeline to get there? And then my second question was just on the Venticel and the Max franchise. Obviously, very strong year this year. But let's stick out to next year. We've got the Part D redesign. We've got incremental competition. Is there still enough volume opportunity here to think about this as a franchise that's going to be generating healthy growth, or should we think about growth slowing significantly going forward? Thank you.

So first, obviously, mid to high 30s is very much within the realm of our business model. We're very focused against that. We continue to march and make progress against that over time. So We don't have a specific date for you at this point in time, but as we continue to progress both this year and we give guidance for next year, you should see us progress on that front. And I think Comirnat was also a little bit of a question. Yeah, well, I think Comirnat obviously is a down draft to that. So obviously adjusting for the size of that business will be important. But having said that, we continue to make investments in our business such that we're more productive top to bottom. therefore expanding our operating margin profile of the company.

And we don't want to speak for specific products, the markets, right? Because it's a little bit misleading. It depends on multiple things. We did it because of the extraordinary circumstances in 2022. But in general, you all know that from our two products, Max Clovis is very, very high margin and Comirnaty is on the low. Vintakil, why don't we start international this time and then we end up with Amir on Part D redesign?

Okay, so on the international, we had a very strong year and we continue to grow very strongly this quarter at 31%. Actually, our total patients on treatment have increased by 40% in the third quarter versus the second quarter. So this illustrates the fact that we are growing and we continue to add new patients on treatment. This is essentially the result of three things. One, the establishment of the standard of care, pretty much in all the countries where we operate. Two, the establishment of a robust infrastructure of care, which will enable a faster diagnosis and treatment of these complex diseases. So, you know, this is a complex disease, and finding those patients takes time, and now we have a robust infrastructure. And the third element is also, of course, the increased access. Today, we have 45 countries where we have reimbursements, And we just recently had in this quarter two countries, the UK and Australia, so two significant countries, that have started to reimburse Fintech wealth. So moving forward, we really see that those three elements will continue to deliver and thrive growth in the key international markets. And if you look at the treatment rate in our major international markets, we still see some potential to increase that deficit. So that will be the drivers of growth in the next few quarters.

So, Chris, in the U.S., I'll give you a little bit of color. Obviously, Vinda's had very strong growth this year, and I think a big part of that has been just the direct result of the commercial effort and attention that we've put on it, where we've seen real growth in the diagnosis rate and new patient starts. So, new patient starts are up about 61% versus last year, and they're up about 3% quarter over quarter as well, and we're also improving compliance rates significantly with existing patients. For the market, there's a lot of patients, nearly half, that remain undiagnosed, so there's significant opportunity there. We will have tailwinds as we go forward, so we continue to put attention on this, and that's going to be largely increased diagnosis education, the prescriber rate that we're growing, as well as affordability conditions, and we've turned the page into 2025. We do think that the volume growth will be at meaningfully lower levels than what we've seen year to date. And a big part of that is obviously headwinds we're going to see from the changing market landscape where we will have new competitive entrants that will impact new patient starts as well as potential switching of existing patients onto some of these options. So those are some of the puts and takes on VINDA. IRA will be a piece of that as well, as Dave mentioned, and we'll have more to share about 25 specifics when we get guidance. Okay, and the last question.

Thank you. We'll take our last question from Mohit Bansal with Wells Fargo. Your line is open.

Okay, thank you very much for squeezing me in, and first of all, congrats on phenomenal hire in Andrew Baum. So maybe I like taking a step back Can you comment something about Bristow, if there was any stocking in this quarter? This particular market is a lot of like, you know, stocking driven in fourth and first quarter. So how you're thinking about that? It looks like from the IQVIA trends, price, implied price jumped a lot. So if you could help us understand what is going on there and how should we think about this particular product in coming quarters. Thank you.

Which product, which product is monkey? A Brizvo. Oh, a Brizvo.

Thank you. All right. So a few comments on a Brizvo. So we wanted to, as I mentioned before, really start this vaccination season with a Brizvo in fridges. In retailers, predominantly where the volume is, as well as with health systems. So we work with our customers and our channel partners to make sure that we were appropriately stocked. And that's reflected in our Q3 numbers. Now, what we have also seen over the course of Q3 is that administration volumes, and for BRISVO that began in August, over the course of the quarter have continued to steadily rise. Now, they are at lower volumes than from a market perspective where they were last year. Lots of reasons for that, including timing of the COVID vaccines, as well as the change in the ACE recommendation. But we anticipate that there will be volumes that continue into the fourth quarter. And then finally, our results are also a function of what Albert mentioned is our significant improvement in market share. So we've doubled our market share into end customers from wholesalers. And our market share of actual shots in arms of administrations in the retail setting is if the middle of October was at 43%. So those are all the dynamics that are going into play for a Brisbane performance in Q3 and heading into Q4.

Thank you, Amir, and thank you everyone for your attention. It was another good quarter for Pfizer. I think we are continuing to execute the five-point plan that we have presented at the beginning of the year. There is an underlying operational health of our business. There's stabilization. of the COVID business tool. Now we feel comfortable to forecast it. And we have seen strong growth from the remaining part of the business. We have seen strong performance from new products. Most of them, they have beaten analyst expectations this quarter, which shows that they are doing better at least than what was perceived they would do. And we are looking forward to continuing this path of executing and creating shareholder value. Thank you for your interest in Pfizer, and we hope you have a wonderful week.

That concludes today's call. You may disconnect at any time.