Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's fourth quarter 2024 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DiMartino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.

Good morning, and welcome to Pfizer's earnings call. I'm Francesca DiMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast at Pfizer.com. Earlier this morning, we released our results for the fourth quarter and full year 2024 via a press release that is available on our website at Pfizer.com. I'm joined today by Dr. Albert Bourla, our chairman and CEO, and Dave Denton, our CFO. Albert and Dave have some prepared remarks, and we will then open the call for questions. Members of our leadership team will be available for the Q&A session. 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 SAC filings, which are all available on the IR website at Pfizer.com. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Thank you very much, Francesca. Good morning, everyone. Thank you for joining us today. 2024 was a strong year of execution and performance for Pfizer. We were guided by clear strategic priorities and we met or exceeded our goals for each one, while also delivering on our financial commitments. I'm pleased with the progress we made in executing transformative changes that strengthened our company. First, we successfully integrated the citizen business, one of the largest investments we have made in the past decade, creating one of the best oncology companies in the industry. At the start of 2024, we split our commercial operations into two divisions, U.S. and international, and appointed two senior commercial leaders to increase focus in both. Amir Malik and Alexandre Deseromet have done a tremendous job to upgrade our commercial capabilities. They consolidated our external agencies down to one powerhouse, global advertising company, and leveraged the power of AI to transform our marketing and selling engine. New data-driven deployment of our commercial and medical field resources, precision market targeting in social media, and elevation of the Pfizer brand in commercial communications are some of the strategies that have significantly increased our commercial and medical effectiveness and returns on investment. We are seeing the impact of these actions in our strong financial performance and in the recognition of our market leaders. We earned the top position in the 2024 IQVIA US Field Force Ranking Report, and improved our ranking to claim number one or two spot in 70% of the specialties in which we focus. I'm also proud of our strong year of pipeline progress in 2024, including more than a dozen approvals, seven pivotal study starts, and eight key phase three redoubts. I'm very excited with the changes in our R&D engine under its new leadership. Chris Bossoff moved fast to create four end-to-end R&D units focused on oncology, vaccines, internal medicine, and inflammation and immunology. This structure fully empowers research units that can operate with the focus and agility of a biotech company while tapping into our differentiated enterprise-wide capabilities such as AI power, drug discovery, and development. Our focus on financial discipline also has yielded good results. We ended the year with expanded margins after a series of actions to realign our cost base. And we strategically deployed capital to enhance shareholder value, investing nearly 11 billion in support of internal R&D programs, delivering by 7.8 billion and returning 9.5 billion directly to shareholders through our dividends. Finally, we also reinforced our commitment to strong governance. Our two new board members bring deep expertise in financial markets and shareholder value creation. All these changes have created a strong foundation and allow us to start the new year from a position of strength. So now let me speak about our 2025 priorities. Last year, we had a significant emphasis on improving our commercial effectiveness. In 2025, the emphasis will move to improving R&D productivity, while maintaining focus on margin expansion, commercial excellence, and shareholder funding capital allocation. Let me start with R&D. Across our pipeline, we believe we have a strong year of catalysts ahead of us and expect our new R&D organization to achieve multiple key milestones, including the possibility of at least four regulatory decisions, up to nine potential phase three readouts, and 13 potential PivotR program starts. For example, with Atir Mosaiqli, our next generation highly selective CDK4 inhibitor candidate, Yesterday, we dosed our first patient in a phase three study in first-line metastatic breast cancer. We also anticipate starting an additional first-line study in combination with the degastrant, the ER degrader we are co-developing with Arvinas. Our ADC Sigvogata vedotin continues its phase three study in second line non-small cell lung cancer, and this year we expect to start a phase three study in first line non-small cell lung cancer. Our PDL1VADC candidate, a potential first in class PDL1 targeting vedotin ADC, is expected to begin two phase three studies this year. One in first-line metastatic had an exquemus cell carcinoma, and one in second-line, plus non-small cell lung cancer, where the unmet need is significant. We have a robust clinical development program aimed at expanding RxV indications in macrophyllium lung. And this year, we anticipate the readout of a phase three study in double class exposed relapse refractory multiple myeloma. But if successful and approved, we'll triple the addressable population versus the currently approved indication. In vaccines, we expect to start the phase three study this year for our PCV25 candidate, covering 25 serotypes. This is important foundational work that could help us bridge to and accelerate progress with our fifth generation PCV candidate covering more than 30 serotypes. This year, we also expect to start a phase three study for our SIF-DEF vaccine candidate. In internal medicine, we remain on track to provide an upgrade of our dose optimization studies of danugliprin in the first quarter of this year. For polsegrama, we expect to start a pivotal study this year in cancer cachexia. And ibuzatrelvir, our second-generation COVID-19 oral antiviral candidate, continues its phase 3 study. Within IAI, we continue to progress a portfolio of medicines that include two potential first-in-class tri-specific antibodies, currently in phase 2. Now let's discuss our commercial strategy. 2024 was a strong year of commercial execution and we are pleased with our progress in improving performance of our newly launched products and gaining and maintaining market share for several of our core brands. I will start by highlighting the strength and impact of our oncology portfolio. Patsib plus Pembrolizumab. is an important growth driver as it has already become the number one prescribed first-line treatment for locally advanced metastatic urothelial cancer in the US. We are expecting potential registration of interim data this year from ongoing pivotal studies in muscle-invasive bladder cancer, which, if successful and approved, would nearly triple the total addressable patients in the US. Raftovi-Mektovi achieved a 27% year-over-year worldwide operational growth and expanded its leadership position in multiple graft tumors, which are some of the hardest to treat cancers. Yesterday, we announced that Raftovi, in combination with Cetuximab and M4FOX6, so statistically significant and clinically meaningful improvement in progression-free survival and overall survival in patients with metastatic colorectal cancer with a BRAF V600E mutation. We are very excited with the robust improvement in PFS and OS and are looking forward to presenting this data in a scientific conference. Lorbrenna, a treatment for adults with ALKI, ALK-positive metastatic non-small cell lung cancer, achieved 37% worldwide year-over-year operational growth and is emerging as a potential standard of care in the first-line setting. Following last June's unprecedented crown trial data showing 60% of patients were alive without disease progression after five years. Lorbrenna has seen a double-digit share increase in the first line, in both new patient starts and new prescribers. Elorexio had a strong performance in 2024, with more than 130 million in full-year revenue, and increasing overall share within the class of BCMA directed by specific antibodies. for patients with triple-class exposed relapse or refractory multiple myeloma in the United States. I also want to comment about our COVID-19 portfolio. We continue to see stabilizing patterns in the disease burden with a strong correlation between the COVID-19 burden of disease and PaxClovid utilization. We see the same stabilizing patterns in US vaccination rates at relatively low levels. Our assumptions for 2025 are on par with this 2023 and 2024 patterns. And with the multi-year contracts we have secured in international markets, we are confident that our COVID-19 portfolio will continue to be a predictable and durable contributor to our business. In another key category, Our ventricle family of products achieved continuing momentum with 90% year-over-year growth in the US and 32% operational growth in international markets. We drove progress in diagnosing more patients and improving access to this treatment for transthyretin amyloid cardiomyopathy. Eliquis is a core brand for Pfizer with 10% worldwide year-over-year operational growth. It is prescribed to millions of patients and we continue to strengthen its leadership position in a growing oral and coagulant market. We are also pleased with the ongoing positive momentum for Nurtank, with 36% worldwide year-over-year operational growth, driven by strong commercial executions. Nurtek is a leader in the oral CGRP class used for treating and preventing migraine, with about 49% market share, and we see opportunities for continued growth. Our respiratory vaccines, Abrisver and Prevna 20, also are key products in our commercial portfolio. We have achieved a market leadership position for the season in sick dose for Abrisver. with an approximately 13 percentage points increase in market share, and remain confident in our ability to retain our position through strong commercial execution, even as we see a decrease in the total adult RSV market volume, driven by a reduction in vaccination rates in the US for the older adult indication. We achieve positive momentum in key regions, such as Europe and Latin America, and are also seeing a strong demand for our maternal indication. A brief season today, cumulative maternal vaccination rate nearly tripled compared to last season. With Brevna, we are confident that we are well positioned for strong, sustained leadership with over 87% market share in the US across indications. Globally, The paediatric market accounts for approximately two thirds of our revenue, and we also continue to make progress for the adult indication in key international markets. We are encouraged by opportunities to maintain our leadership in the PCV space with our next generation PCV25 candidate mentioned earlier. In phase one, we demonstrated potentially improving immunogenicity for serotype three, one of the largest contributors of disease at approximately 20% of invasive disease in adults aged 65 and older in the United States and Europe. Across our commercial portfolio, in 2025, we are confident that we are in a strong position to build in our 2024 success and achieve commercial excellence in our key categories of oncology, cardiovascular, migraine, vaccines, and INI. With that, I will turn it over today.