Pfizer, Inc.

Good day, everyone, and welcome to Pfizer's third 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 third 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, and thank you for joining our call. The past few months have been pivotal for Pfizer. We are really excited about our future and confident that we are in a strong position to continue delivering value for patients and our shareholders. Our third quarter performance shows how we continued to execute with discipline and focus, even while taking on major strategic efforts. I will discuss highlights, including our agreement with the U.S. government, which has provided greater clarity of our strategic investment in future innovation and growth. Additionally, with our proposed acquisition of Metcera and the progress we have made since closing our licensing agreement with 3S Bio and key upcoming catalysts, the strength of our R&D pipeline continues to grow. Our landmark agreement with the U.S. government was an important milestone because it removed uncertainty on two critical policy fronts. We successfully addressed the administration's call to lower prescription drug costs and align prices with those in other developed countries. And we will have a three-year grace period from certain U.S. tariffs with our commitment to further invest in manufacturing in the U.S. Now, I want to address our proposed acquisition of Metzera. We believe that Novo Nordisk offer is illusory. and cannot constitute a superior proposal under the terms of our merger agreement with Metzera, because it violates antitrust law and there is a high risk it will never be consummated. We are encouraged by the US Federal Trade Commission's decision to grant early termination of the HSR waiting period, which is unprecedented during a government shutdown, and clears the path to completing this transaction following the Metzeler-Sarholder vote on November 13th. With a pending legal action we have taken to enforce and preserve Pfizer's rights under the merger agreement, you understand that we will be limited in the details we can address further during today's call. What I can say is that our belief in the promise of the Pfizer and Metzera combination is strong and unwavering. We are confident it will create substantial value for shareholders and advance innovation to bring important medicines to patients in the high-growth therapeutic area of obesity. Plus, we believe Pfizer will have distinct advantages in developing and delivering new potential treatments because of our proven scientific and commercial strengths. Our R&D infrastructure has global reach and extensive experience running clinical trials in large populations. Our commercial teams have well-established capabilities in bringing primary care therapies to patients. We have proven we can drive leading clinical, commercial, and strategic momentum with key cardiovascular brands such as Eliquis, Lipitor, Norvasc, and the Vintaker family, and we plan to execute in a similar way with Metzera as we reinvigorate Pfizer's cardiometabolic presence. The licensing agreement with 3S Bio is another way we have strategically enhanced our pipelines. Encouraging phase 2 first-line metastatic colorectal cancer efficacy and safety data for SSGJ707, the PD-1 VGF by specific, was shared last month at the European Society for Medical Oncology meeting. Looking ahead, we are excited to present additional clinical data at the upcoming Society for Immunotherapy of Cancer meeting. We are also encouraged by our discussions with regulators about our plans to unlock the potential of 707 with a robust clinical development program. As we look forward to executing with 707, Pfizer has distinct advantages. We have deep experience in the development of multi-specific antibody therapeutics and the ability to leverage unique combination regimens that make this promising cancer immunotherapy candidate a strong complement to our oncology portfolio. We've also made progress in advancing other key programs in our late-stage R&D pipeline. This was reinforced by our presence at ESMO last month with over 45 abstracts, five late-breaking presentations, and recognition in presidential symposium. Starting with a presidential symposium, new phase 3 data demonstrated that PADSE, in combination with Pembrolizumab, reduced the risk of recurrence and death by at least half for patients with cis-Latin ineligible muscle invasive cancer when given before and after surgery. This is the first and only regimen to improve survival when used before and after standard of care in this patient population. With this unprecedented data in hand, we see the potential to substantially increase the US addressable population with approximately 18,000 patients under the current label in metastatic urothelial cancer. And if there are further positive data, it's approved up to approximately 22,500 additional patients across both cis-eligible and cis-ineligible muscle-invasive bladder cancers. We also presented follow-up results from the PHAROS single-arm phase 2 clinical trial supporting BRAFTOVI and MECTOVI as a standard of care for patients with metastatic non-small cell lung cancer harboring a BRAF V600E mutation. This updated analysis showed a substantial median overall survival benefit of 47.6 months in treatment naive patients with metastatic non-small cell lung cancer with a BRAF V600 e-mutation. We are pleased with the continuous strong year-over-year growth of BRAFTOVI and MECTOVI with a 30 percentage points increase in new patient starts since the October 23 launch. We believe the results from the FAROS trial could establish a new benchmark with targeted combination therapies for its population of patients. These results fortify the strength of our growing lung cancer portfolio, but includes small molecules, ADCs, and our 707 bispecific. We are confident in our potential to deliver treatments across the lung cancer spectrum, a large and growing market expected to reach approximately 70 billion by year 2030. We also presented final overall survival results from the Phase III EMBARQ trial, evaluating Xtandi in combination with Luprolide and eczemanotherapy in non-metastatic hormone-sensitive prostate cancer with high-risk biochemical recurrence. As the first and only ARI-based regimen to demonstrate overall survival benefit in this population, These results highlight the potential benefit of Xtandi in this earlier line treatment setting. This strengthens our position for the product but is experiencing strong demand growth in hormone-sensitive prostate cancer and rapid uptake in the approximate 16,000 US patient population with non-metastatic hormone-sensitive prostate cancer with high-risk biochemical recurrence. I want to mention Another update about our program in sickle cell disease. We are very pleased that last month the FDA concluded that Pfizer may resume enrollment of Ociveloto studies outside of sub-Saharan Africa and in individuals who have not relocated from sub-Saharan Africa. We are still engaging with regulatory authorities to determine possible next steps for Oxbride. We look forward to sharing more details in the months ahead about our key pipeline catalysts for 2026 in the coming years. With disciplined execution and our continued focus on key products, both in the US and key international markets, we continue to build on our leadership position within our commercial portfolio. Our vertical family of products achieved 7% year-over-year global operational growth in the quarter, Strong demand reinforced that this is the foundation of treatment for patients with a heart condition of ATTR cardiomyopathy, helping them live longer and avoid hospitalization. We are encouraged by our continuous strong market leadership In international, we achieved 40% growth in the quarter in total patients on treatment. In the U.S., our continued double-digit demand growth reflects strong diagnostic efforts, broad access, and favorable affordability dynamics. Nurtek continues to lead the oral CGRP class in primary care penetration in the U.S. In international, we achieved growth with continuous strong uptake in key markets. Globally, we achieved 22% year-over-year operational growth in the quarter. We are pleased that our new consumer campaigns continue to perform well, and our team has been effective in sharing new compelling clinical data with healthcare professionals. Patsy, another market leader in our portfolio, achieved 13% year-over-year global operational growth in the quarter. PADSEV, in combination with PEMBRO, continues to expand utilization and has been established as a standard of care first-line treatment for patients with locally advanced metastatic urothelial cancer. Our vaccine portfolio is a key area of focus in international markets. We are pleased with the strong performance of the Prevram family, driven by CERN gains and launches in several key markets. We achieved 17% year-over-year international operational growth in the quarter. Pfizer is the pediatric pneumococcal vaccination leader, with public funding secured in about 140 national immunization programs around the world. After launching in the majority of key international markets, Prevner Adult is the established leader among adult pneumococcal conjugate vaccines. In the U.S., where we did experience a year-over-year decline in the quarter, we are pleased with the overall performance of Prevenor to end. For adults, Prevenor held a market-leading position and grew with the expanded recommendation for adults over 50. In the pediatric market, accounting for about 60% of Prevenor revenues in the U.S., we experienced a delayed timing of government bulk order, which we have seen from time to time. So it's a question of time. I want to provide an update about the next generation PCV programs. While we previously guided with phase three start of our adult 25 program in 2025, we are planning to start the study next year if the FDA aligns with our approach. For our pediatric program, we expect fourth-dose data from our ongoing Phase 1-2 study early next year, and pending positive data and regulatory feedback, we have the potential to start both Phase 3 programs in 2026, streamlining our development approach and aligning with our strategy to provide a single vaccine across age groups. We are committed to maintaining leadership in the PCV space. And as a reminder, our 25-valent vaccine candidate has the potential for improved immunogenicity for serotype 3, which is one of the largest remaining contributors of pneumococcal disease. Serotype 3 alone is estimated to cause approximately 20% of invasive disease in the 65-plus population in the US and EU. Abrisvo also achieved significant international momentum with 75% year-over-year operational growth in the quarter due to expanded access in key markets. In the U.S., we are experiencing the headwind of a more difficult-to-activate population as we enter the third season of RSV. Still, we are continuing to strengthen our position with a 59% market share in the U.S. in SIP dose volume in this quarter. From the significant strategic milestones we have achieved in recent months to our solid financial performance during this quarter, we are demonstrating how we are building for long-term value with near-term execution of our 2025 strategic priorities. By committing to focus simplification and leveraging technology across our business, we are accelerating progress and improving productivity. In the quarter, we achieved another strong gross margin performance. Additionally, we were able to deliver adjusted diluted EPS that was ahead of expectations significantly, even with lower infection rates contributing to a revenue decline in our COVID-19 portfolio. Our business is performing well. and we are raising the range of our adjusted diluted EPS guidance for full year 2025, while also remaining committed to our dividend. And with that, I'll turn it over to Dave.