Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's second 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 Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.

Good morning, and welcome to Pfizer's earnings call. I'm Francesca DiMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast at Pfizer.com. Earlier this morning, we released our results for the second quarter of 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 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 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. Our business is performing well, and I'm pleased with the progress we achieved in the second quarter. We advanced and strengthened our R&D pipeline We worked to maximize the value of our commercial portfolio and made further strides to expand our margins. We continue to be actively engaged with policymakers as we navigate a complicated and rapidly evolving geopolitical environment, while also remaining focused on advancing our business. With our strong year to date performance, we are raising our adjusted diluted EPS guidance for full year 2025 and remain committed to our dividend. Our programs to expand margins through focus, technology and simplification are working very well. We are driving productivity gains by leveraging technology such as AI and automation. and we are also realizing the benefit of continued streamlining across our company. We believe Pfizer is well positioned to continue creating meaningful value for patients and our shareholders. Our top strategic priority this year is, of course, improving R&D productivity. I'm proud of the outcomes we are driving and the meaningful milestones achieved during the quarter. Looking ahead, We believe key programs in our R&D portfolio offer significant opportunities to help address substantial patient need and drive Pfizer's growth in the coming years. I will mention some highlights. Elrexium is a medicine that is performing very well with rapid growth and encouraging progress in claiming leading class SER in new markets, such as Japan, United Kingdom, and Spain. The clinical data in an erection initially heavily treated, triple class exposed multiple myeloma indication continued to be encouraged with median overall survival of greater than two years, which is more than double the historical median overall survival in this population. Moreover, the majority of responding patients are maintaining their response at 30 months LREXFU has the potential to be a leading standard of care with a differentiated clinical profile. It is a convenient, subcutaneous, fixed-dosing regimen, the only one, that now includes a once-every-four-week option for select patients. New data presented at the American Society of Clinical Oncology annual meeting in newly diagnosed patients demonstrate a righteous potential to move to earlier multiple myeloma treatment settings. This data from part one of the Magnetis MM6 study saw a confirmed response rate greater than 97%. and the manageable safety profile in combination with TARATUMU-PAP and LELALINO-D. The randomized portion of this Phase III study is now enrolling very well. By executing on Magnetis MM6 and L-REXFUS, other ongoing Phase III trials, we aim to achieve label expansion that, if approved, would collectively increase the addressable population approximately five-fold in the growing multiple myeloma market, expected to reach approximately 44 billion by year 2030. Sigvotatov-Vedoti, or SV, is our first-in-class integrin beta-6 ADC that could be a driver of growth later this decade. we are executing a robust development program with this investigational compound in non-small cell lung cancer. This includes our fully enrolled phase three study of SV monotherapy versus Tocetaxel in previously treated non-squamous patients that we expect data from next year. In the second line plus population, we have observed a durable 31% confirmed response rate which is favorable versus historical data with docetaxel monotherapy. We are also enrolling a phase 3 study of SSV in combination with a PD-1 checkpoint inhibitor in first-line non-small cell lung cancer with high PD-1 expression based on encouraging phase 1 data for this combination, recently presented at ASCO. These results showed a 57% response rate and greater than 90% disease control, including responses in all patients in the tumor proportion score greater than 50%. Which compares favorably to historical anti-PD-1 monotherapy. These results support an ambition to change standards of care to conventional chemotherapy sparing regimens by leveraging the potential synergy between the DOTIM ADCs and PD-1 checkpoint inhibitors. With our ongoing and planned trials in non-small cell lung cancer, SV has the potential to impact large patient populations. with a non-small cell lung cancer market expected to reach over $60 billion by year 2030. Our strategy is intended to deliver a first approval in previously treated patients before moving into the first-line setting, which is a non-small cell lung cancer, includes more than half a million global patients. In hematology, we continue to promote the differentiated profile of hematosis. In the quarter, we saw positive top-line data from the Phase III-based study evaluating Hempavzi for adults and adolescents with hemophilia A or B. The study's cohort of patients with inhibitors met its primary employment, demonstrating a statistically significant and clinically meaningful 93% reduction in annualized bleeding rate compared to on-demand treatment in patients 12 years or older, which compares favorably to recent approved products for hemophilia A and hemophilia B. These results further strengthen Hempavz's differentiated profile as the first once-weekly fixed-dome subcutaneous treatment for hemophilia A or B administered in a convenient pre-filled autoinjector bed. They also support the potential to expand its label to patients with hemophilia who develop inhibitors to factor replacement as we continue to execute on its launch in the previously approved non-inhibitor population. We have seen considerable quarter-over-quarter growth, particularly in the hemophilia B market, where subcutaneous treatments are only recently available. and follows EU and Japan approvals at the end of last year, we are seeking reimbursement on pursuing early access pathways in other international markets as we grow our presence in the hemophilia market projected to reach nearly 10 billion by year 2030. Moving to our vaccine portfolio, we are enthusiastic about our potential to deliver the first approved vaccine for C. difficile infection. Our second-generation investigational vaccine candidate builds upon encouraging results from the prior Phase III global trial of our first-generation candidate. This trial demonstrated 100% efficacy against medically-attended C. diff infection despite not achieving the study's primary endpoint. With our second-generation C. diff vaccine formulation, we have the potential to simplify the dosing schedule from three to two weeks. This candidate, now in phase two, increased the strength of the immune response fourfold compared to the first generation vaccine. Based on this newly announced phase two data, we are preparing for a phase three start before the end of this year. We will incorporate learnings from the previous Clover study to develop new primary endpoints focused on the prevention of severe disease outcomes rather than primary infection. If approved, the vaccine could significantly reduce the healthcare burden of the nearly 500,000 annual sea death infections and approximately 30,000 annual deaths in the US alone. In another one of our phased-in products, we finished dosing the last patient in our study of a vaccine candidate for Lyme disease. If successful, we expect to submit for approval next year. We also continue to strengthen our portfolio by harnessing external innovation through strategic business development. The recent closing of our global ex-China in-licensing agreement with three Aspire grants has exclusive rights to develop, manufacture, and commercialize SSGD707, a bispecific antibody. Targeting PD-1 and VEGF has the potential to deliver breakthroughs for patients in the next wave in PD-1 immunotherapy, which is an established 55 billion mark. With compelling monotherapy data in advanced non-small cell lung cancer presented recently at Aspen, we view this promising cancer immunotherapy candidate as a seamless fit within Pfizer's oncology strategy. Given our deep experience in the development of antibody therapeutics and our differentiated industry-leading portfolio of ADCs, We intend to share detail later this year for our plans for a phase 3 program. With Pfizer's established presence and global reach, we believe 707 has the potential to become a backbone therapy for multiple solid tumor types where the PD-L1 VETS mechanism could have significant impact. Across our pipeline, we continue to sharpen our focus on programs where the strength of our capabilities give us the greatest opportunities to address substantial base on it. We look forward to sharing future updates about our programs. Now let's move to commercial. Our commercial strategy is unlocking higher productivity and performance across both our U.S. and international divisions. With several of our established brands, we are pleased with our continued market leadership and growth. We deliver another solid product for our Vintagel family with 21% year-over-year operational growth. These products are the foundation of care for patients with a serious heart condition of ATTR cardiomyopathy, and we continue to see strong progress in diagnosing patients and providing broad access. While we continue to closely monitor the competitive impact of new entrants, we believe the ventricle family is differentiated with a strong clinical profile contributed to continued growth. With Eliquis, we are the clear leader with robust demand in a growing anticoagulant market. Our international commercial teams are driving higher growth versus the market in our key countries with effective engagement with healthcare professionals to reinforce the favorable profile of these medics. In the U.S., the BMS-Pfizer Alliance recently announced a new direct-to-patient option for purchasing Eliquis via the Alliance's patient resource, Eliquis 360-some-more. This option offers an insured, underinsured, or self-pay patient an opportunity to significantly lower out-of-pocket costs for aliens. Among some of our recently launched acquired brands, we are seeing strong underlying demand in competitive classes as we work to build expanded access and greater awareness and loyalty, of course, among healthcare professionals. With Nortec, we continue driving strong commercial execution. We are pleased with the performance of new consumer campaigns and greater precision and effectiveness in sharing compelling clinical data with healthcare professionals. In the US, we achieved strong growth in total prescriptions and with 47% market share, maintain leadership in the oral CGRP class offset by pressures on net revenues from the impact of the IRA, medical part D redesign, and the 340B program. Unfortunately, internationally, we are achieving strong performance in several key markets where we already have access and are encouraged by the potential to unlock additional opportunities by continuing to expand access. Part C. A key product in our oncology portfolio is demonstrating strong performance and we see multiple avenues for future growth. ADC for the treatment of adult patients with locally advanced metastatic urothelial cancer. PACEV achieved high year-over-year operational growth of 38% in the quarter with growing demand and the one-time favorable impact from a transition to a wholesaler distribution model for citizen products. PatCern, in combination with Pembrolizumab, has secured market share greater than 50% in first-line LA metastatic UC and is the standard of care first-line treatment. Additionally, we continue to anticipate phase 3 readouts for PatCern in muscle-invasive bladder cancer in two ongoing studies. If successful and approved, you expect a significant expanded opportunity to treat patients with bladder cancer, focused on the approximately 28,000 in the U.S. with MIBC, approximately 80% of whom undergo cystectomy. Sibinkona. had strong 46% year-over-year operational growth with a quarter, driven by higher demand in the U.S. and growth in key international markets where we have decided to focus. We believe there is additional market opportunities for Sibinco in responding to the need among patients with atopic dermatitis. We are seeing the clear impact of recent positive data released for several of our oncology projects. It has contributed to strong growth in helping to establish these products as standards of care. From renats in 48% year-over-year operational growth in the quarter and to expect continued strength through 2025. It has a compelling efficacy profile supported by the CRAM study, where the median progress on free survival was not reached after five years of follow-up. Lobrena is emerging as a standard of care for patients with first-line R-positive metastatic non-small cell plaque cancer. We saw continued momentum with BRACTOVI and MECTOVI, with 23% year-over-year operational growth in the second part. Result for the phase 3 breakwater trial saw the BRACTOVI combination regimen double. medium overall survival versus standard of care for treatment in naive patients with metastatic colorectal cancer with a BRFV600E mutation. This represents a significant advancement of the approximately 4,000 patients diagnosed annually in the U.S. with metastatic colorectal cancer with this mutation. They face a more than two-fold greater mortality risk compared to patients with no known graft mutation. Xtandi contributed strong 14% operational growth during this quarter. Demand is growing for patients with castration-sensitive prostate cancer, and it is the top-prescribed branded androgen receptor pathway inhibitor. With the presentation of ASCO long-term overall survival data from the ARTSIS trial, Xtandi is now the first and only androgen receptor pathway inhibitor to demonstrate an overall survival benefit at five years in men with metastatic hormone-sensitive prostate cancer. We also recently served positive top-line results from the Phase III EMBARQ study, making Xtandi the first and only androgen receptor inhibitor-based regimen to demonstrate overall survival benefit in non-metastatic hormone-sensitive prostate cancer with high-risk biochemical occurrence. This contributed to demand growth for Xtandi, and we achieved 27% share in new-to-brand prescriptions. These positive readouts indicate how we are continuing to invest and focus in areas where we have leadership and expertise, contributing to ongoing progress with our ongoing portfolio. The strong performance in the US and international divisions show why we remain confident in the commercial strategy we refined more than a year ago. In the quarter, for example, The key market and brand combination that we prioritized in our international divisions are outperforming with strong meet to high single-digit growth across all regions. We will continue to advance this commercial strategy and expect to drive further progress through precision targeting engagement with patients and healthcare professionals. With that, I'll turn over to Dave, who will walk through our additional strategic priorities and progress with expanding margins and optimizing capital allocation. Dave.