Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's first quarter 2025 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DiMartino, Chief Investment 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 first quarter of 2025 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 also be available for the Q&A sessions. Before we get started, I want to remind you that we will be making forward-looking statements and discussing certain non-GAAP financial measures. I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR website on Pfizer.com. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Thank you, Francesca. Good morning, everyone. Thank you for joining our call. We are very pleased with our performance in the first quarter as we continue to execute with focus and discipline on our strategic priorities. We are strengthening our R&D organization in our efforts to advance our pipeline and productivity. We are maximizing the value of key products in our commercial portfolio. And we are improving operating margins with our continued progress in making our company more efficient. In the current volatile external environment, the underlying strength of our business and strong relationships with government leaders across the world help us navigate with agility. While we continue to engage and plan for contingencies, we are focusing day to day on what we can do to move our business forward. I want to emphasize our continued confidence that we are well positioned to enhance shareholder value. Now I will turn to our top strategic priority in 2025, improving R&D productivity as we advance our pipeline with sharpened focus. We are intensifying our rigorous commercial assessment and portfolio prioritization from early clinical development. This means we will be disciplined in managing our portfolio, directing investment and attention to potential blockbuster or mega blockbuster, and scrutinizing the total number of assets under development. Our Daniel Glipper announcement earlier this month demonstrates our commitment to this approach. This continued the development of Daniel Glipper, one of our candidates in our business portfolio, although difficult was the right decision for the company. Going forward, We are committed to building our cardiometabolic pipeline, including obesity, by advancing internal programs such as our GIPR antagonist and pursuing external opportunities that could include partnerships or acquisitions. We will continue to be disciplined as we move through key decision points for our pipeline or our business development targets. We believe we have the potential to address significant patient needs with differentiated approaches that focus on supporting optimal weight management and related conditions. We will work on potential medicines and combination regimens that could be more accessible, better tolerated, easier to dose, and more effective in supporting the right effects on body composition and muscle mass. In addition to sharpening our focus in internal medicine, Since expanding his role in January as our chief scientific officer, Chris Bossoff has moved both thoughtfully and quickly in reshaping our R&D organization to also center on oncology, vaccines, and inflammation immunology in addition to paramedics. Chris has enhanced his leadership team with some terrific additions who are recognized as leaders in their field. Patricia Cavazzoni is our new chief medical officer. Jeff Legos is our new chief oncology officer. And Jim List is our new chief internal medicine officer. These leaders each bring many years of experience, deep expertise, and proven track record in guiding the discovery, development, and approval of practice-changing therapies. And they are an excellent addition to our already strong cast of leaders in R&D. We are on track for a strong year of anticipated pipeline catalyst in 2025. We are making progress towards anticipated multiple key milestones, including at least four regulatory decisions, up to nine phase three readouts, and significant series of pivotal program starts. With one of our key oncology programs, we are aimed to bring forward what could represent the first potential treatment advancement in more than 30 years for patients with BCG-naive, high-risk, non-muscle-invasive bladder cancer. We are encouraged by a positive readout of the Pivotal Phase III CREST trial of Sasalnima in combination with BCG, a current standard of care. We presented the full data from this study this past weekend at the annual meeting of the American Urological Association. Non-muscle invasive bladder cancer is a condition predominantly treated by urologists in multiple market research and focus group studies. Urologists stated a significant preference for a subcutaneous PD-L1 because it can be used in their practices and eliminates the need to refer their patients to infusion centers. We also anticipate meaningful redoubts this year for Patsy and Elrexfil. Patsy already is a core therapy in our oncology portfolios. PATSF plus pembrolizumab is the most prescribed first-line treatment for locally advanced metastatic urothelial cancer in the U.S. We are working toward more than doubling the total addressable patient population in the U.S. for PATSF with potentially registrational interim data we expect this year from ongoing pivotal studies in muscle-invasive bladder cancer. We are also working to reach a significantly expanded population of patients with multiple myeloma. We are anticipating a phased readout this year for Rexfuel in a study for double-class exposed relapsed refractory multiple myeloma. If successful and approved, this would more than double the addressable population versus the currently approved indications. In addition to the increased addressable population, moving to earlier lines of therapy is expected to increase the duration of treatment and potentially create an inflection point in erectious growth. We expect to begin pivotal studies for our investigation of PD-L1 vedotin AEDC later this year. This will be for first-line metastatic head and neck squamous cell carcinoma and second-line non-small cell lung cancer. We also anticipate a first-line pivotal study start for SV, sigvotata vedotin. This is a novel integrin beta-6 targeting vedotin ADC that, if successful and approved, has the opportunity to change the standard of care globally for IBC-expressing tumors. Both these ADCs, PD-L1V and SV, are potential first-in-class ADCs using a vedodine payload that elicits immunogenic cell death and, in combination with an immune checkpoint inhibitor, demonstrates significant results. Early data for PD-L1V and SV in combination with pembrolizumab are highly encouraged. With both ADCs, we are targeting non-small cell lung cancer, the most frequently diagnosed cancer globally, and the leading cause of cancer-related deaths. Lung cancer represents a substantial area of patient need and a growing market with the highest projected CAGR in oncology through 2030. In vaccines, another of our priority therapeutic areas, we see opportunities to enhance and augment our strong positions in the market. We are also planning a potential registrational study in adults later this year with our fourth generation PCV candidate. With our fourth and fifth generation PCV candidates, we believe we can build on our leadership in the industry. Our fourth generation candidate covers 25 serotypes, including potentially improved immunogenicity for serotype 3, which is one of the largest remaining contributors of disease. We are also working to accelerate progress with our fifth generation candidate, which is in preclinical development and covers over 30 serotypes. As we continue to scrutinize the number of programs who are actively advancing, we will have opportunities to accelerate or add others to help address significant patient needs. One example is the recent accelerated start of a pivotal study for nurting, for menstrually related migraine, which is estimated to impact more than half of women who experience migraine. We look forward to providing future updates about our pipeline progress as we continue to sharpen our focus on our most meaningful programs in prioritized therapeutic areas. Commercial excellence in our key categories is another 2025 strategic priority. More than a year ago, we decided to separate the US and international operations. Under the leadership of Amir Malik, our chief US commercial officer, and Alexandre Desermet, our chief international commercial officer, we refined our commercial model to bring heightened focus, helping us strategically prioritize our most impactful products and regions. It is working well. In the U.S., our team demonstrated focus, the strength of our key products, and continuous improvement in execution. In international, we are back to operational growth. in the first quarter across all parts of the division. This was the result of prioritization and discipline focus on key growth drivers to maximize return and accelerate new product penetration there. Our performance was strong both in the U.S. and international markets across several key products, including the Vintakel family, Nurtek, Patzef, and Lorbren. Our Vintakel family of products had robust growth in the quarter though we are seeing the impact of competition with a new market entrant, and we anticipate this will continue through the year. We will work towards maintaining our market-leading position that has come from six years of establishing credibility expertise with the cardiology community. Our team remains committed to addressing high unmet patient need by helping to improve diagnosis and ensuring appropriate patients with ATTR cardiomyopathy receive treatment. Demand continues to strengthen for Nurfang, with revenue growing 40% operationally in the quarter. Our commercial teams effectively engage with healthcare professionals, And we were pleased with strong outperformance of our newly launched consumer campaigns. We are pleased with the continued strength also of our oncology portfolio. Paxif, for example, grew 25% operationally driven by increased market share in first-line metastatic urothelial cancer. Well, Brennan grew 39% operationally. as we continue to see strong adoption with its emerging as a potential first-line standard of care for patients with all positive metastatic non-small cell lung cancer. INI is another key commercial category for Pfizer, and we are drawing on our extensive experience in launching medicines in this therapeutic area. Familiarity among healthcare professionals continue to improve for Sibingo, which grew 42 operational in the quarter. Our commercial team is continuing to work towards increased patient access for this JAK inhibitor for patients age 12 and up with moderate to severe atopic dermatitis. With Litfulo, we are encouraged by the growth we have seen today. We will seek to further unlock access to this advanced systemic treatment for patients with severe alopecia areata. This highlights how we are positioned to further expand and sustain our performance trajectory among our key brands. And with that, now I will turn it to Dave to speak about the other two strategic priorities.

Thank you, Albert, and good morning. I'll begin this morning by reinforcing the fact that our solid financial results demonstrate our strong executional focus. We continue to concentrate on driving positive patient outcomes and delivering on our financial commitments while navigating an ever complex external environment. Our productivity improvement programs continue to drive a more efficient organization enhanced by our strong operating margins in the quarter. Going forward, we expect to improve our cash flows, reduce our debt leverage, and have more flexibility for our three capital allocation pillars. Our focus remains on creating long-term shareholder value. We will continue to invest in our business for the long term while prudently returning capital to our shareholders. Now, first, let me start with our first code of results. Second, I'll touch on our capital allocation priorities. And then I'll touch upon our cost improvement initiatives. I'll finish up with a few comments on the macro environment and our 2025 guidance, which we are reaffirming today. For the first quarter of 2025, we recorded revenues of $13.7 billion, a decline of 6% operationally. The decline was largely due to lower Paxlovid revenues, in part due to last year's one-time Paxlovid revenue credit recorded in Q1 of 24. In addition, U.S. revenues were tempered by changes in the IRA Medicare Part D redesign, which took effect in the first quarter. Partially offsetting the decline was growth in several in-line products in the U.S. and overall growth internationally. On the bottom line, we reported first quarter 2025 diluted EPS of 52 cents a share and adjusted diluted earnings per share of 92 cents ahead of our expectations due to overall strong gross margin and cost management performance. Our performance continues to show that our refined commercial approach is working. We continue to focus on key products and geographies, the deployment of our commercial field resources globally, and the continued optimization of our marketing resources into key priority areas. We saw strong contributions across our product portfolio, primarily driven by the Vindicale family, Comerity, HATSEV, NERTEC, and Labrena, which were more than offset by declines in Paxlovid, Eloquest, Zellejans, and iBrands. Adjusted gross margin for the quarter expanded to approximately 81%, primarily result of favorability in crude royalties, partially offset by unfavorable product mix. Focus on cost management across our manufacturing network will remain a priority. Total adjusted operating expenses were $5.2 billion for the first quarter of 25, a 12% decline operationally versus last year. Now, looking at the components, adjusted S&A expenses decreased 12% operationally, primarily reflecting our ongoing productivity improvements, driving a decrease in marketing and promotional spend for various products, as well as lower spending in corporate enabling functions. Adjusted R&D expenses also decreased 12% operationally, driven primarily by a decline in spending due to our pipeline optimization efforts expected to be reinvested later this year and into next year. We continue to be disciplined with our operational expense management. Q1 reported diluted earnings per share were $0.52 and our adjusted diluted earnings per share were $0.92 which benefited from our efficient operating structure, in addition to favorable global income tax resolutions in multiple tax jurisdictions spanning multiple tax years, as well as a favorable change in the jurisdictional mix of earnings. With that, now let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at the appropriate level of financial return, and making value-enhancing share repurchases. In Q1, we returned $2.4 billion to shareholders via our quarterly dividend, invested $2.2 billion in our internal R&D, and completed business development activity as expected was minimal. We achieved our 3.25 gross leverage target at the end of 2024, a key priority towards improving our capacity for business development. In addition, the monetization of our Halion investment has contributed to our improved cash position. As a reminder, in January, we monetized approximately $3 billion of our Halion shares. And in March, we monetized the last tranche of our Halion shares, receiving approximately $3.3 billion in net cash proceeds. With this sale, we have now fully exited our ownership in Halion. Overall, our objective remains to deliver our balance sheet over time, which will further support our return to a more balanced allocation of capital between reinvestment and direct return to our shareholders. We continue to be disciplined on our operational expense management, progressing multiple improvement programs as we remain focused on driving long-term margin improvement over the coming years. We continue to expect initial savings from phase one of our manufacturing optimization program in the latter part of this year with approximately $1.5 billion in savings from phase one that's expected by the end of 2027. In addition, we are progressing the evaluation of other strategies to improve our network structure and product portfolio, respectively. As part of our goal to return to a pre-pandemic operating margins, we remain on track to deliver on our goal of at least $4.5 billion in cumulative net cost savings from our ongoing cost realignment program by the end of this year. And today, we've announced our expectation that this program will deliver an additional $1.2 billion in net savings, primarily in SINA, and in part by leveraging digital tools, including automation and AI, as well as simplification of our business processes. The savings are expected to be fully realized by the end of 2027. Furthermore, we have identified additional opportunities to drive improvements in productivity and operational efficiency in our R&D organization, again, through enhanced digital enablement as well as automation. We expect approximately $500 million in savings associated with these efforts to be realized by the end of 2026 with the savings reinvested within our R&D programs. Now in total, we expect approximately $7.7 billion in savings by the end of 2027 to drive operational efficiency, strengthening our business with the potential of contributing significantly to our bottom line over this period. Now let me turn to our full year 2025 guidance. As you are aware, the pharmaceutical industry is currently navigating a complex global landscape shaped by rapidly evolving trade and tariff policies. To help navigate this fluid environment, we've established a cross-functional team to analyze a range of potential outcomes while developing strategies to help us mitigate the potential impact to our business in both the short as well as the long term. These actions include the management of current inventory levels in certain jurisdictions, leveraging our domestic manufacturing footprint, and the potential production of certain API and products in the U.S. Should we be impacted by further tariffs in the future, we will assess the impact of these policies enacted and provide information at the appropriate time. Let me now spend just a few minutes on our 2025 guidance, which remains unchanged and, to be clear, does not include the potential impact of future changes in trading tariff policies. We expect total company full-year 2025 revenues to be the range of $61 to $64 billion, and full-year 2025 adjusted diluted earnings per share to be in the range of $2.80 to $3 a share, which reflects our expectation of strong contributions across our product portfolio and our focus disciplined on cost management. As we finish Q1 with earning strength and excluding the potential impact related to future trade changes, we are currently trending toward the upper end of our adjusted diluted earnings per share guidance range. In closing, let me emphasize several key aspects of our business. We will continue our focus on executing to maximize the commercial value of our product portfolio, and we remain committed to driving value-creating innovation while strengthening our pipeline. Additionally, our cost improvement programs are set to deliver operating margin expansion. Expected productivity gains will be driven by leveraging our digital capabilities and simplifying our business processes. Our improved balance sheet set the stage for more balance and enhanced capital deployment focused on creating value for our shareholders. And with that, I will now turn it back over to Albert for Q&A.

Thank you, Dave. Operator, please assemble the queue and let's start the Q&A.

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question. We'll go first to Vamal Devan with Guggenheim. Please go ahead.

Great. Thanks so much for taking the questions. Maybe two if I could. So one, just appreciate your prepared remarks. We mentioned the dividend, your commitment to maintaining and growing the dividend over time. But I think we've just gotten sort of increasing questions about this from investors over the last few months, especially with some of the tariff uncertainty and how that might impact cash flows. And obviously, you're not talking about maybe getting more active on the business development side. So maybe just to reinforce that one more time and nothing else, just the level of commitment you have there. And even if there is an impact from the tariff side, you still feel comfortable in being able to maintain and grow that. And then my second question is stranger.

Go ahead, Vamil.

Sorry. Okay. Yes. I just had one other, if I could, just on the COVID business and just your views, obviously understand the nuances around the Paxlovid sales this quarter and And, you know, obviously vaccine sales will come later in the year. But do you still see that business being relatively stable this year relative to last year? Or has that changed from what your expectation for the beginning of the year? Thank you.

Thank you, Amir. Dave will tell you about dividend and then Amir and Alexander about the conflict.

Vamil, clearly consistent with my prepared remarks, the dividend remains a critical component and a key component of our capital allocation strategy. As you can tell, we've been very focused on improving the operating margin and performance of our business, thus improving our cash flow yield over time. This is all in support of all of our capital allocation priorities, with dividend being a key component of that.

Thank you, Dave. And let's start with Amir.

Thanks, Vamil. So you asked about Paxlovid. Paxlovid utilization trends very closely to infection rates, and we see a 50% treatment rate and close to an 80% fulfillment rate when there's infection, and we've set up a very good commercial model to do that. I think what you saw in Q1 was largely the function of the fact that we have a lower winter wave, but we still treated over 750,000 patients starting the year with about 100,000 a week and tapering off at around 35 to 40,000. And while these numbers are lower than the consensus numbers, they're very much in line with our expectations and what we track for the business. And what we've seen in multiple years now is that over the course of the year, you have two COVID waves, one in the summer and one in the winter. The Peaks and valleys and the timing of those vary, but we have had consistently multiple waves. And our baseline assumption is that we will have those waves this year as well, and that we will be able to execute our business, including PACS utilization in the way that I described, consistent with those waves. We've also set up a model where we can successfully transition the Medicare patients out of USG and into our traditional Medicare model beginning March 1st of this year. And so we can't predict exactly what the timing and shape of those waves will be, but we're ready to execute against.

I will start with Comirnaty. As you know, the international community is bigger than Paxlovid. On Comirnaty, we beat consensus quite nicely by 130 million, essentially driven by execution. As you know, in international, December is in the Q1 of 2025. So in December, we continue to execute our contract in the UK and in Europe. And in competitive setup, like in Japan, we maintain very strong leadership there until the end of the vaccination. Now, as we move into Q2 and Q3, we will start actually shipping our vaccine into other hemisphere countries where vaccination campaign is going to start. And in particular, in Brazil, where we won the two-year contract for adults, which is a very important vaccination country. Now, when we talk about Paxlovid, you know Paxlovid is smaller internationally. And we performed as we were expected. We have now Paxlovid commercially sold in 49 markets. So there is no more advanced purchasing phenomenon. So it's really associated with utilization. The point is, in international, we have actually low utilization compared to the U.S. We still need to do some work in terms of utilization and treatment. Thank you, Alexander.

Operator, please, the next question.

We'll go next to Evan Figerman with BMO Capital Markets.

Hi, guys. Thank you so much for taking my question. And I didn't want to touch on the reasons for the Daniel discontinuation, but I more want to look forward. As you think about a potential obesity asset, what are some key aspects of the profile that you're looking for, either from an internal perspective or potentially externally? Thank you so much.

Let's start with Chris and then go to Andrew. Thanks very much. Thanks for the question. Yeah, as Albert has stated, Danny Blupron was the right decision for Pfizer based on totality of data. And as we stated previously, a single asymptomatic participant in a dose optimization study with rapid dose titration experienced a potential drug-induced liver injury, which recovered rapidly after treatment discontinuation. Although we're not 100% sure This is due to Daniel Glupron. The risk was high enough for us to discontinue the program while still being committed to obesity and employing our global resources for other opportunities. Cardiovascular metabolic is one of our core strategies within internal medicine, an area with significant remaining unmet need. And just a reminder, for obesity alone, up to 60% of patients discontinue current approved medicines after 24 months. We will continue to apply our global capabilities to advance our pipeline of differentiated oral medicines, including our oral GIPA antagonist currently in phase two and advancing our preclinical portfolio to the clinic. We believe the future will be more fragmented based on differentiated or unique combinations with an emphasis on tolerability, accessibility and convenience. The future will also become more personalised based on combinations addressing specific diseases associated with obesity and with metabolic dysfunction, including neurology, cardiovascular and respiratory. And Andrew?

Yeah, I mean, I think Chris gave you a fairly full answer. I would just underline that although you referenced obesity, the role of incretins and potentially other modalities or targets more broadly needs not to be underestimated. And obviously this extends beyond cardiovascular medicine and we're interested in all the potential opportunities that exist with these molecules. In terms of which assets or which portfolio of assets we're seeking to build, I think there's two axes. Number one, obviously, is clinical differentiation. And Albert referenced some of the ways you can do that in terms of scheduling, tolerability, muscle preservation, but there are others too. But then separately, there's commercial differentiation, which really references the indications that we pursue. So I hope that gives you some idea of our direction of travel. And when we have something to say, you'll be the first to know.

Good to know. Thank you. Next question, please.

We'll go next to Tim Anderson with Bank of America.

Thank you. I have a question on tariffs. I figured if anyone's close to this, it's probably Pfizer, Albert, seeing as you're chairman of pharma. If sector specific tariffs come through, do you think that's likely to be through the 232 investigation route? Or do you think it could still happen somehow through the IEPA route? To me, it seems like it would be 232, but not everyone agrees. And your best sense of timing for when everyone might have more information from the administration. And then last question, is it an absolute pipe dream to think that sector-specific tariffs might really only be applied to countries that could in fact pose a threat to national security like China? It's hard to see Ireland being an enemy of the country.

Thank you, Tim, and I would agree with the last comment that you made also. But let me tell you where we stand with tariffs. First of all, we had on April 2nd an executive order that basically placed tariffs across the board to everything we can see or feel or dream, except two things, pharmaceuticals and semiconductors. Clearly, there is risk going forward, but it's a very, very different if you are part of the tariffs and you hope to be excluded, then if you are not part and you try not to be included. Then on April 14th, the administration made even more clear what is their concern with the pharmaceutical sectoral investigation. And they made it clear by launching it through a 232, which, as you pointed out, it is an investigation that is connected with national security threats. This is not something new. The first Trump administration had expressed serious concerns about several essential medicines that are made outside the U.S. The Biden continued with his concerns. Actually, the Trump administration had also a list that had created with those medicines in the first one. And now, with the second Trump administration, not only through the 232, but through my discussions with the highest level of the government, they are confirming that this is their primary concern. And I think it's legitimate. I think no country wants... to have critical medicines produced outside of the country, particularly they don't want to have critical medicines produced in countries that tensions are high or can be escalated. There is, I think, a very clear distinction in the way that they look at it in terms of what products they are talking about. And there is a very clear distinction as to what comes from friendly countries or what comes from adversary countries. So, with all of that in mind, and knowing that we are engaging and we have very productive discussions with all the secretaries that are involved and the White House staff that are involved into that, I'm cautiously optimistic, as I said, given the data that we have not been there, and I hope that we will weather it successfully. We will work with the administration to make sure that their concern on national security will be addressed with the best possible way. I think that was the only question, right? Yes. So let's go to the next question, please.

We'll go next to Steve Scala with P.D. Cowan.

Thank you. And two questions. The first one is very similar to the one that Tim just asked. And that is, Albert, given your unique insights into the thinking in Washington and Do you think MFN legislation is only the most remote of possibilities or even simply not going to happen? And then secondly, what is the percent utilization of the U.S. plants? It's great to have this vast network in the U.S., but if there's little or no excess capacity or flexibility, then it's a more limited advantage. Thank you.

Thank you very much for both questions. Look, on the MFN, first of all, I can't speak about what will be the intentions of the government, but I can comment on what I have seen so far. And the president issued an executive order that was focusing on pharmaceuticals. That was very, very extensive. So it covered a lot of topics over there. MFN was not mentioned over there. On the contrary, what was mentioned over there was the pill penalty that he instructed so that we will find ways to resolve. What was mentioned over there was PBM reform and transferring of rebates to the PACE. What was mentioned over there was 340B reform. So I would say that clearly one can say that when the president issues an executive order, then you can read into what are the priorities. of the administration. And I think that so far, the way I have seen it, it is the bill penalty, it is the 340B, it is the PBM reform, and it is to lower the cost for the patients. Because right now in the US, the patients, they are paying disproportionately out of pocket for their medicines compared to other medical interventions. So that's my two cents on that. And again, I'm cautiously optimistic, but nothing is certain. And we are working continuously to influence the thinking and the decision making and particularly understanding what is it that they want to achieve so that we can provide productive solutions. On the percentage of utilization of our manufacturing sites, first of all, it is quite good. I don't want to go to the details, but there is ample room if there is a need to transfer production to accommodate. We have huge manufacturing capacity right now in the U.S., particularly for everything that is injectable. And our ability, if there is a need, is clearly there. And without the need to build new facilities, just utilize the current ones and the transfer production there. With that, let's go to the next question.

We'll go next to Uma Rafat with Evercore ISI.

Hi, guys. Thanks for taking my question. I have two here, if I may. First is on dividend, and second is a follow-up to something Albert mentioned. Perhaps first, on dividend, I know there's obviously LOEs coming up over the next three to four years with net income and free cash flow pressures. How much of that pressure could be offset by potential OPEX cuts that you're taking underway? I guess said differently, can you hold net income at or near the current levels? That's part one of the question. And then also, if a tariff impact approaching, I don't know, 15% to 20% of bottom line kicks in, can you still confirm your commitment to dividends? And finally, Albert, you mentioned the distinction between friendly versus unfriendly countries. But in the initial tariff announcement, that didn't necessarily seem to hold true. So why should that apply in the case of pharma? Thank you very much. Thank you.

Dave, why don't you take the dividend question?

Yeah, so, Umar, clearly in my prepared remarks and what we said very consistently is our objective is to improve our operating margin performance over time. And we've said that knowing quite well that we have LOEs approaching the some of the improvements in productivity that we are making are designed to improve operating margin in the face of those LOEs. At the same time, our business is actually evolving such that, particularly in the oncology space, where we're leaning into that business and those products actually yield a very high gross margin and operating margin performance. So the short answer is yes, we can... we can withstand that. And secondly, we're very focused on improving our operating margin over time in the face of those LOEs. Clearly, you've also heard us reiterate very specifically our focus on maintaining and growing our dividend over time, and we would continue to do that. And we work hard to understand the environment looking forward, and I don't want to hypothesize on what could happen, but clearly we're watching the situation closely and our commitment to dividend is steadfast.

And I think, David, you made also very clear quantitative calculations of what we expect. And, you know, when we put a number out there, we know that we can hit it. And David spoke about $7 billion by year 2027 while maintaining the R&D at the current levels of investment, which I think it is a key strategy to have said, first of all, to navigate in a certain environment. That's the best way to do it, to be productive. Another comment I want to make on that is that the cuts are not across the board or they are not by just reducing resources that are valuable. They are very strategic. and they are happening first of all with the deployment of technology ai right now has dramatic impact in the ways that we have able to secure cost reductions and digital technology in general but also through significant business simplification but we are implementing and we looked at every single thing of how we do things. And, you know, when you find simpler things of doing it, there is a significant cost element associated. So all in all, I think, as Dave said, we have our targets and we are very confident. You can calculate that we made them public and we are very confident that we will achieve them by the year 2027. Now, as regards to the tariffs, if that will be on friendly or non-friendly countries, look, it's up to the government to decide what they want to do. But it's very, very clear in my discussions that the national security concerns, it's very clear in my discussions at least, national security concerns are pretty much associated not with friendly countries. Okay, thank you. Next question.

We'll go next to Chris Schott with JP Morgan.

All right, great. Thanks so much. Just my first question on guidance. Pfizer's gross margins for this year, should we still think about full-year gross margins in the mid-70s range, or has that changed at all following some of the upside with 1Q? And maybe just on a second part of that, I'm just interested in the level of conservatism that's baked into the guidance here. It seems like the year's off to a very strong start, particularly on the cost side. And just as we think about the progression the rest of the year, should we think about any offsets from the upside we saw this quarter? Thank you.

Yeah, thanks, Chris. Dave here. Clearly, we're very confident in our outlook for 2025. As you noted, we finished Q1 in a position of strength, both from a top line and a bottom line perspective. As I look at our operating plan, we've exceeded both top line and bottom line in Q1 based on our expectations internally. So we're off to a very solid start. Secondly, as I look forward, we're in Q1, we have a three quarters left to go. I look at us maintaining our guidance range, but giving you some color that are top of it. We're essentially de-risking the balance of the year from a financial delivery perspective. We're still faced with some uncertainty from a macro environment perspective. So we're watching that cautiously. At the same time, we're prepared to go into the vaccination season in a position of strength, but really with still some uncertainty around how the macro environment might play out in that space as well. So I hope that helps. I think from a gross margin perspective, Off to a nice start. We haven't changed our guidance and our color on that, but we're continuing to focus on improving our gross margin over time and improving our operating margin over time, which I think is even a more critical component for us. And if you look in Q1, we posted a little over 40% from an operating margin perspective. It was really solid performance. So again, off to a really solid start.

Thank you. So you don't have any conservatives in your guidance?

I don't.

He is the best. Let's move to the next question.

We'll go next to Jeff Meacham with Citi.

Hey, guys. Good morning. Thanks for the question. I had two quick ones. Albert or Andrew, just from a strategy perspective, what would you say ranks as a higher priority just with respect to how you tier what would be multiple BD options? Is it the TAM? Is it sales through LOE? Is it peak sales after? Wasn't sure how much that's evolved in the current macro backdrop. And then I guess the question for Albert, what incentives would you want to see in tariff negotiations that would maybe tip the balance for Pfizer to increase manufacturing investments here in the US? Thank you.

Yes. On the strategy, maybe I make some comments and then I ask also Andrew. It is very clear that that we are facing. Everybody knows Eloise. Those Eloise are starting in 26, 27, 28, 26 is a smaller number, 27 is a bigger number, 28 is the biggest number. Then it goes down. Eloise are one-time events, right? so to prepare for that we had significant number of new launches that they are growing and we did significant business development but it is growing because they were all early assets what we bought so there were let's say having in front of them the growth period so what we project it is that those growing assets will offset the eloise in 26 27 28 more or less so And then following that, because, of course, LOEs are a one-time event, they continue growing. And then we have a significant step up in the growth when the last LOE is going out. Now, what is our strategy in addition to having business development and new product launches? As we know that with the LOEs, we are not going to be a strong top-line growth story for the next three years, given the LOEs. we expect to become an EPS growth story. And this is why you see here right now, the very acute focus on our improvement of margins. Also, we expect even more importantly, that will be a pipeline story during the next three years. We are very focused on the R&D productivity. We have learned from past mistakes in the R&D productivity. we are moving with very decisive steps to bring new phase three studies. And I think once the studies start, also people will start modeling in their models or upgrading the probabilities of success as we are moving to phase three studies to reflect what I just told you, that as the pipeline matures, the growth post-28 should look among the top tier of the industry. So that's more or less the strategy. Now, within that, we have $10 to $15 billion of capital to allocate that we are very prudent in how to do it, and Andrew will speak about it, But in the bottom line, it is that we would like to see in the first three years a multiple expansion given the maturation of our pipeline. And of course, an EPS growth given our strong focus on the costs. And Andrew and the PD will be a bonus to all of that. What do you think?

So just on, I think Albert gave you a very, very clear answer. In answer, just picking up on the explicit question you asked, I think it's all of the above. TAM, LOE, as well as obviously as value. I think the other thing I would also add that perhaps you didn't mention is I'm very keen that we build sustainable franchises. And I'm thinking more of the longer term and the shorter term, but we need to have breadth and durability, just as we've done internally with expanding and building on the iBrands franchise with our novel CDK4s, CDK2s, and We have other assets as well within breast cancer and similar, etc. BD is another tool within our arsenal to build on the internal discovery and development that we have with our existing pipeline.

On the tariff negotiations that you said, what would you expect to see so that you will invest in the US? I think it's certain. If I know that there will not be tariffs and I have the certainty, then there are tremendous investments that can happen in this country, both in R&D and manufacturing. And the reason is that the tax environment that has forced a lot of manufacturing outside the U.S. has significantly changed now. We have a global minimum tax around 15% that has been established right now. So it's not as good in the U.S., although when President Trump did the first tax, we had a huge inflection of capital coming back from Pfizer and others. And now I'm sure, and I know because I talked to him, that he would like to see even a reduction in the current tax regime, particularly for locally produced goods. So that would be a huge incentive to also bring manufacturing here. And it's not that bad. But that requires a lot of capital. When in periods of uncertainty, everybody is controlling their costs as we are doing, and then it's very frugal with their investments as we are doing so that we are prepared for any day. So that's what I want to see. Thank you very much. Next question.

We'll go next to Truong Nguyen with UBS.

Hi, guys. Thanks for the question. Just another one on costs and guidance and one on BD. On your cost realignment program, you announced an additional 1.2 billion saving by 27. How much of that can come out in 25? And how should we think about the step up of costs for the rest of the year following what seems to be you guys exceeding savings targets, but also reiterating a guide? And then on BD, you've mentioned external opportunities. How much is that macro environment impacting your decision in the timing of BD given the volatility and unknowns? And then on the other side of the table, do you think sellers are hesitating given valuations are meaningfully lower than the start of the year? Thanks.

Thank you. Dave, why don't you take the guidance and then Andrew, you can speak a little bit and I will also comment.

Yeah, on the cost side, keep in mind that we're focused on taking $4.5 billion out by the end of this year. Well on track with that. The additional $1.2 billion that we've identified, probably modest delivery of that in 2025, most of that in 26 and 27, but maybe a little bit. I think from a R&D perspective, the $500 million that we're saving in improving productivity in R&D, largely that will happen this year to be reinvested in R&D late this year or maybe even bleed into next year to some degree.

Thank you. And on BD, Andrew, valuations are low, uncertainty though is high. So how do you see things?

Yeah, I mean, I think, as you might imagine, we're very awake to the external environment, but we're comfortable with the 10 to 15 billion budget that Dave effectively forecasted or gave at the beginning of this year. In terms of the question of have sellers adjusted to the new valuation the market's applying, I think it depends. I think generally it takes some time in some categories where there is increasing therapeutic density because there's an ever expanding array of assets mainly coming from China. I think there's an additional force which is causing companies to become more amenable to lower valuations. But I think it really depends.

And Frank, what I tell my team constantly is never let a good crisis go to waste. And with crisis, there are risks, but also there are tremendous opportunities because things are changing. The status quo is changing. So you need to be strategic. You need to be smart. You need to be disciplined. But you need a strategy. Warren Buffett said, sell when prices are high and buy when prices are low. And, you know, price alone. Next question, please.

We'll go next to Kerry Holford with Berenberg.

Thank you. A couple of questions for me, please. Firstly, in the context of U.S. tariffs and the debate there, I wonder if you might tell us what proportion... of your US drug sales are currently made end-to-end in the US? Can you give some examples of brands that delivered end-to-end in the US today? And then a question for Dave here on COGS. Can you just quantify the US dollar impact of that revision of estimated accrued royalties in Q1? Can you tell us what that specifically relates to? And just to confirm that's intended to be a one-off adjustment. Thank you.

Thank you, Kate. Look, around which percentage of production we have here, etc., we are not disclosing this information, so we won't go into those details. When it comes to the impact of the US dollar, I will ask Dave to comment. Dave, also, you speak about the impact of IRA, so that... people can get a good picture of the puts and takes of the first quarter sales.

Yeah, sure. So maybe let's take this in points here. First, I know there's been a lot of volatility in FX. In currency fluctuations, we're probably an outlier in the sense that we gave guidance in December. So if you look point to point from December to now, FX is largely immaterial to us, given the fact there's been a roller coaster ride to get from point A to point B. But right now, FX is largely not an impact to Q1 and for the balance of the year. Secondly, if you look at Medicare Part D redesign, in Q1, it dampened our U.S. revenues by approximately $650 million, as we expected. That dampening will lessen in the back half of the year as we continue to offset that a bit with incremental prescriptions. Third, including in our guidance that we didn't really speak about, is there are some tariffs in place today that We anticipate those tariffs to be approximately $150 million for 2025. We are contemplating that within our guidance range, and we continue to, again, trend to the top end of our guidance range, even with those costs to be incurred this year. Thank you, Dave. Next question, please.

We'll go next to Akash Tiwari with Jefferies.

Hey, thanks so much. I realize there's a lot of uncertainty on tariffs, but hearing Merck give color on Q1, it seems like some of your peers are hinting the bottom line impact of tariffs could be manageable. So let's say the tariffs are broadly 25% on your transfer price, which I'm sure is a scenario your team's planned for. Would it be fair to say that the bottom line earnings impact would be a single digit percent basis with reasonable mitigation steps? Thank you.

Thank you, Akash. I will never go to that statement. And we have made statements in the past that we have been burned. So I'm very cautious and careful about that. If there are tariffs, we have detailed contingency plans that are minimizing the impact. But I'm right now focusing more on the fact that we should not have tariffs. And only if we have, we should try to implement measures. I'm sure all companies are doing the same. Sorry, I can be more specific. I know you're interested in that. Let's go to the next question.

We'll go next to Terrence Flynn with Morgan Stanley.

Great. Thanks for taking the question. Maybe two for me. Another one on tariffs. I know Scott Gottlieb, who's on your board, referenced a grand bargain on the news a couple of weeks ago. And, you know, you've given a lot of color here, Albert, in terms of your discussions with the administration. So can you confirm if something along those lines is in the works? And the second question is on the pipeline that you guys and your partner, Arvinas, recently reported some phase three data for VEPDAG from the Veritac 2 study. Just wondering how that data change or impact your strategy for this drug in the frontline setting. Thank you.

Thank you very much. Unfortunately, I'm not aware of Scott's comments on the grand bargain. Of course, I follow him on TV, but also, more importantly, I speak to him very regularly, very often, and he advised me on several topics. But I don't know his comments on the grand bargain. And clearly, right now, there are two things on the horizon. One, it is a 232 process on tariffs or pharmaceuticals that have been excluded from overall tariffs, geographical reciprocal tariffs. And that's on national security. There is also an executive order of the president that is focusing on 340B, reducing the cost of patients, PBM reform, removing the pill penalty. Those are the things that we are engaged in right now, not in any other type of bargain. And then on Arvinas, I will ask Chris to comment on that.

And thank you for the question. As you know, in the phase three top line results, Veritech 2 was reported in March last two months, we met the primary endpoint in the estrogen receptor 1 mutant population, which was statistically significant and clinically meaningful for progression-free survival. Overall survival still too early, very immature, but we did not reach statistical significance and improvement in PFS in the intent to treat overall population. We plan to present detailed results at ASCO. It's a late-breaking oral presentation, and we'll also start sharing the data with global regulatory authorities to potentially support regulatory filings. We are continuing the combinations with CDK4 at ThermoCyclib, which we're excited about, as well as with CAT6. On this project? On this project with WebDegastrant, the combinations with WebDegastrant, and shall then work with... Arvinas to not just only file, but work with Arvinas to discuss future plans for the Phase 3 program.

Okay. Thank you, Chris. Next question, please.

We'll go next to Dave Reisinger with Lear Inc.

Thanks very much, and thank you for all the updates. So I have two questions, Albert. First, current Washington leadership is very supportive of the traditional technology sector, but it's taking the opposite approach towards biotechnology. So notwithstanding, you know, a few of the things that you mentioned that might be marginally positive, such as the pill penalty, You know, Washington is actively degrading proven medical science, collapsing the NIH, and driving reduced investments in the biotechnology sector in the United States. Could you please comment on that and how you and other biopharma companies are responding when you engage with Washington? And then separately, with respect to the 232 investigation, since we can't see what's going on outside, could you just explain exactly how that investigation is progressing, how Pfizer is engaging on the 232 investigation front, and what we should watch and when? When should we see news on 232? Thank you.

Yes, thank you, Umair. Look, we are clearly concerned about several of the statements that we have seen and approaches regarding FDA and some statements that they are not in correlation with what science has proven over the decades and what the vast majority of the scientific community, when I say vast, I'm talking 99.9% are behind it. And sometimes they are used this 0.1%. as a point to challenge the remaining. So I think there is scientific truth, and that scientific truth, it is well presented, and this is not only a US thing, it's not only the CDC and the FDA and the NIH, but it is the UK health authorities, And it is the French health authorities and the Spanish health authorities and the Korean health authorities and the Japanese and Israeli, and I can go on and on. So this thing of the conspiracy theory, but you know, someone is not that the whole world and the whole authorities of the world want to implement wrong science. So I am very convinced that we are in the right side of history and those people are in their own. But I want to tell you that the... Those views are not expressed by the entire administration. And there are many people that they don't share those views. And I would say that... We had also a president that he spearheaded the War Speed operation and he created this miracle that was saved. I mean, there was no other country that had done something like that in the world. And the entire world was able to save their economies and survive based on what Operation War Speed did. But the president and members of his cabinet at that time on CERF and... and uh jarrett and all of them they work with us to do actually i told him that he should have received the nobel prize for that and that was unfair but he didn't it was severe serious contribution but The thing that I discuss with everyone in the administration, and I think that resonates a lot with Democrats and with Republicans, with everybody in the administration, including HHS and everywhere, it is that Chinese right now are progressing with the speed of light in their science. Biotech, it is dominant. the U.S. has the dominant scientific position in biotech because we have created this ecosystem of biotech and pharma and academia and all of that. This is exactly what the Chinese have replicated in the last four years. And in the last four years, IRA was a significant setback for us that took down a lot of funding for of the private sector towards biotech. So the biotechs now currently, also because of tariffs, but also because of the four previous years, they are at historical low. And as a result, there is very little money going to the biotech. The Chinese are doing the opposite. And right now they are having very, very good science. And I think that's something that they should, everybody be concerned. And they should be concerned not only from commercial, but also from national security point of view. Imagine if in the next pandemic, the medicines that will help will not be invented in this country, but in another country. That will be a problem. Now, the 232 investigation, it is an investigation that basically is launching, and then the Secretary of Commerce is running it and is gathering information to see if there is any national security risk with the way that medicines are available in the U.S., the supply chain of the medicine. The process has been launched. They have requested information publicly, and... Companies will submit information. The Farm Association will submit information. Everybody who has an interest in that will submit information and probably proposals. And those things will be assembled. Although the time, this process is time limited, which I think it is 270 days. I don't recall well, but it is, I think they need to complete it with 270 days. Knowing how fast this administration works, I think they will do the work faster. So let's go to the next question.

We'll go next to Mohit Bansal with Wells Fargo.

Great. Thank you very much for taking my question. And Albert, one more for you. So pharmaceutical manufacturing is a little bit more complex. There are layers of API, manufacturing of drug substance, as well as fill finish. And to my understanding, a fill finish majority of part is already in the U.S., but would love to understand from your conversations, is there a specific focus of the administration to bring the API part of it or the drug substance manufacturing part of it to the US and how feasible it is to bring API or move it to some friendly countries, if not America. We'd love to get your perspective on that. Thank you.

I think for things that they are considered national security, they are looking at the entire value chain. So they want to see the precursors, the APIs, and where the products are made. and they are making very clear distinction i think on where those products are made so that they can assess their risk you know transferring manufacturing even under the most lucrative investments available and even under the most favorable regulatory framework to provide approvals, etc. It's a multi-year process, so it's not something that can be resolved within a year. So I believe they will focus on a manageable number of products, which are the most important, so that they can have that built and secure the national security. But I think their questions right now is on everything. On APIs, on precursors, on where products are made, etc. Next question, please.

We'll go next to Courtney Breen with Bernstein.

Hi, everyone. Thanks for taking the time for a question today.

A couple that we had, one clarification on tariffs, and apologies if we missed it, but this was just kind of if you can provide any comments on inventory and kind of work that you're doing already to bring inventory into the U.S. And then the second question is, is just on the pipeline. I know, Connie, you're going to have some details about the things that you're looking to prioritize. But can we expect an R&D day at some point this year that will help us better understand the overall pipeline strategy and help us understand that reallocation and perhaps even better assess and evaluate that pipeline in our sell-side models? Thank you.

Thank you, Courtney. I will ask Chris to comment on the pipeline. But on the tariffs, as David also said, I think, in the beginning, you can imagine we have done everything that we have to do to make sure that we mitigate. So that includes inventories, of course, and many other things that we have built into the country so that we can weather any scenario that is needed. And, you know, every month also we're increasing those positions. So to make sure that, as I said, in rainy days, we are well positioned. Chris, on pipelines.

So thank you for the question. Just a reminder, we've got a number of products that we're currently excited about that we'll read out later this year. For instance, Patsyph, muscle invasive, if that's positive, it will triple the population. Alrexfeo, Albert mentioned double class exposed, will double the population. So Sunlumab, obviously read out just now, potentially up to 38,000 patients eligible in the U.S., And in a number of phase three programs, we are accelerating all that already started or will start later this year. For the next six to nine months, including for oncology, the two ADCs Albert mentioned, sigmoid attack with dotin PDR1V, a thermocyclic continuing phase one, sorry, phase three in first line, positive breast cancer and vaccines, PCV fourth generation, but also potentially starting first and only to market opportunity with the C. difficile vaccine. And for internal medicine, Ponsagrumab, which again, discovered in-house potential brand new opportunity. This is opening a new field in cancer cachexia. In terms of an R&D day, we're not planning it. But as you know, we currently have the flashes, which is organized by our team. The next one coming up will be on breast cancer. And we will continue throughout these flashes.

And in general, our intention is to provide as much visibility on our data as possible without undermining publications, of course. So I think the flashes are making very good job right now, and we can intensify also how we do that so that we have smaller bites of information. that are referring to a specific product, and then after a month, another product, and then after a month, another product, rather than sour everyone with a lot of data and information in one day. But we will find the best way, and we are listening right now. We are listening to all the analysts that are giving us ideas on that. We are listening to all our investors. but they are giving us ideas on how best to communicate our pipeline. Let's go now to the next question.

We'll go next to Asad Hadir with Goldman Sachs.

Thanks for taking the questions, and thanks for all the color on the macro and tariff side. I'll ask a couple of product-specific questions. First on Vindiquil, can you just double-click on how competitive dynamics are playing out in that market relative to your own expectations Second, on the internal oral GIPR agonists, can you remind us of the timelines on when we'll start to see more data? And then third, on these nine phase three readouts that you're highlighting, other than Elbrexio, which you've highlighted in the past, where do you see the biggest disconnect in analyst models relative to your own internal expectations? Thank you.

Amir, you talk about the ventricle. Chris, maybe you explain on GIPR. And Andrew, you can speak about where the biggest differences are.

Okay. Thanks for the question. On Vinda in the U.S., I think we are off to a very good start in the new year. We've grown revenue at 31%, and that is a combination of multiple things, including the fact that diagnosis rates are improving. We've improved access and therefore have had strong new patient starts, certainly versus last year, more than 70%. and versus Q4, almost 20% new patients start growth and continued compliance with our existing base of patients. All of that has driven very, very strong volume growth year over year and sequentially. And we are managing that revenue growth despite the offset of the impact of IRA Part D redesign that Dave spoke to. Now, we're obviously seeing impact of competition, principally a Truby and principally on newly diagnosed patients. We'll continue to stay close and monitor that and how that evolves and how Ambutra settles into the market as well. But the year is off to a good start. Our team is executing well and we have confidence and we will grow for the balance of the year. Thank you.

Alexander, can you comment also on Vindacal in the international markets that is growing very healthy?

Yeah, absolutely. So we had also a good growth of 36% this quarter above expectation from the analysts. What's driving that is essentially a significant increase in our treated population. We have actually reached a 52% growth in patient treated on Vindacal. in q1 versus q1 last year so very healthy trends and we see that this trend will continue for essentially three reasons one because our diagnosis rate has potential to expand in pretty much all our key markets outside of the us two Because our clinical profile is differentiated and will support our standard of care status, we believe, in our key market. And three, which is often underestimated, we, after three years of hard work, have finally reached access reimbursement in 46 markets. And we just received, actually, reimbursement in Korea in March of 2025. So that will kind of flow into our business and will continue to sustain a significant growth, we believe. Thank you, Alexander.

Chris, GIPR? Oral small molecule GIPR antagonist was discovered in-house. It's potentially first-in-class oral small molecule GIPR antagonist. And the phase two study is now ongoing. This is a study in obesity in combination with loraglutide with the GLP-1. The PCD is listed on clinicaltrials.gov at the end of 2025, so expect beginning 2026 potential data. If the data are positive in the phase two study, then it could be a potential to be used in combinations to drive weight loss, both with internal or external opportunities.

Thank you very much, Chris. And then, Andrew, disconnect between our projections that you came to interrogate very carefully and your colleagues in your previous life.

All right. Well, thank you for the opportunity, Albert. So I'd start with the two ADCs, which are now in phase three first-line trials for non-small cell and head and neck, so SV and PD-L1V. Now, part of the reason I think that the street may have, these may have flown under the radar, is they move very, very quickly on the back of very strong phase one data straight into phase three. And so I think some focus on that will be useful. We obviously have the benefit of having seen access to more data than you have, but we look forward to sharing that with you in the near future. And hopefully that would align your expectations closer to ours internally. Chris already mentioned CDIF. which will begin a phase three end of this year, beginning of next year, a very significant unmet medical need. And then, and this is not by any means a comprehensive list, but the two other ones I would mention is the CDK4, which I name check previously, which builds on a legacy with Ibrance. It's the first in class. It promises much better tolerability and efficacy. Again, it's in a frontline head-to-head trial versus the current standard of care. And that is a $15 billion plus market. So very sizable an area that we have a lot of expertise in. And then the final one is Ponsegramab, which I've addressed before. Look, we need to see how the data pans out. If it translates into a meaningful progression-free survival benefit or even a survival benefit, then obviously it's a home run in terms of the value to both patients, but in addition, the revenue potential. Alternatively, if it's supportive care therapy, then it's still a significant product, albeit of a different price point and a different order of magnitude. But nonetheless, there is a very substantial delta when we look further out between what I can see or we can see and how the street is modeling some of those forecasts. So we look forward to hopefully narrowing the gap in the months ahead.

Thank you, Andrew. That was the last question and just a couple of comments. We had a very solid performance in the first quarter. Keep in mind that already 650 million negative in the US have been already absorbed in the results of the first quarter because of IRA. And that's from a total of one billion net, one and a half gross for the year. So it's a very strong start. I think in the strategic priorities, we continue to guide us in acting on our greatest opportunity. The discipline will continue. I think the team that we have running right now, the company, probably the best I have ever seen in Pfizer. And Pfizer had traditionally very, very strong teams. So I'm cautiously optimistic that we will turn this around and we will translate the very good operational performance of the last five quarters at least into also meaningful shareholder value. Thank you very much and until the next earnings call.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.