Pfizer Inc. Price & Performance (PFE)

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@pfizer.com Pfizer. Earlier this morning, we released our results for the Q4 full year 20 24 via a press release that is available on our website atpfizer.com. I am joined today by Doctor. Albert Borla, our Chairman and CEO and Dave Denton, our CFO.

Albert and Dave have some prepared remarks and we will then open the call for questions. Members of our leadership team will be available for the Q and 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 atvisor.com. Forward looking statements on the call are subject to substantial risks and uncertainties speak only as of the call's original date and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Thank you very much, Francesca. Good morning, everyone. Thank you for joining us today. 2024 was a strong year of execution and performance for Pfizer. We were guided by clear strategic priorities and we met Oryx. Exceeded our goals for each one. While also delivering on our financial commitment. I'm pleased with the progress we made in executing transformative changes that strengthened our company. 1st, we successfully integrated the Seiden Business, one of the largest investments we have made in the past decade, creating one of the best oncology companies in the industry. At the start of 2024, split our commercial operations into 2 divisions. U. S. And International. And appointed 2 senior commercial leaders to increase focus in both.

Amir Malik and Alexandre Desiroume, have done a tremendous job to upgrade our commercial capabilities. They consolidated our external agencies, TAO, [indiscernible] company and leverage the power of AI to transform our marketing and selling engine. Data driven deployment of our commercial and medical field resources. With seasoned market targeting in social media. And elevation of the Pfizer brand in commercial communications are some of the strategies that have significantly increased our commercial and medical effectiveness and the returns on investment. We are seeing the impact of these actions in our strong financial performance, and in the recognition of our market leaders. We earned the top position in the 224 IQVIA U. S. Field force ranking report and improved our ranking to claim number 1 or 2 spot 70% of the specialties [indiscernible] I'm also proud of our strong year of pipeline progress in 2024. Including more than a dozen approvals 7 people that study starts and 8 key Phase 3 readouts. I'm very excited with the changes in our R and D engine under its new leaders. Prisbosov moved fast to create 4 end to end R and D units focused on oncology vaccines, internal medicine and inflammation and immunology.

This structure fully empowers research units that can operate with a focus and agility of a biotech company [indiscernible] Tapping into our differentiated enterprise wide capabilities such as AI powered drug discovery and development. Our focus on financial spring also has yielded good results. We ended the year with expanded margins after a series of actions to realign our cost base. And we strategically deployed capital to enhance shareholder value investing nearly EUR 11,000,000,000 in support of internal R and D programs, [indiscernible] by EUR 7,800,000,000 and returning $9,500,000,000 directly to shareholders through our dividends. Finally, we also reinforced our commitment to strong governance.

Our 2 new board members bring deep expertise in financial markets and shareholder value creation. All these changes have created a strong foundation and allow us to start the new year from a position of strength. So now let me speak about our 2025 priority. Last year, had a significant emphasis on improving our commercial effective In 2025, the emphasis will move to improving R and D productivity. While maintaining focus on margin expansion commercial excellence and Serhonder flagged the capital allocation. Let me start with R and D. Across our pipeline, we believe we have a strong year of catalyst ahead of us. And expect our new R and D organization to achieve multiple key milestones including the possibility of at least 4 regulatory decisions, up to 9 potential Phase 3 readouts and 13 potential pivotal For example, with Atyamocycline, our next generation highly selective CDK4 inhibitor candidate, Yesterday, we dosed our 1st patient in a Phase 3 study in first line metastatic breast cancer.

We also anticipate starting an additional first line study in combination [indiscernible] ER integrator We are co developing with Arviges. Our ADC sigmaquepatadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadadad continues its Phase III study in second line non small cell lung cancer. And this year, we to start? A Phase 3 study in first line non small cell lung cancer. Our PD L1VADC candidate a potential first in class PD L1 target in PDOPIM [indiscernible] Is expected to begin 2 Phase III studies this year. 1 in first line metastatic [indiscernible] [indiscernible] plus non small cell lung cancer, where the unmet need is significant. We have a robust clinical development program [indiscernible] And this year, anticipate the readout of a Phase 3 study in double class exposed relapse refractory multiple myeloma. [indiscernible] success will then improve addressable population versus the currently approved [indiscernible] In vaccines, we expect to start the Phase 3 study this year for our PCV-twenty 5 candidate. Covering 25 0 types. This is important foundational work that could help us bridge to and accelerate progress with our 5th generation PCB candidate covering more than [indiscernible] This year, we also expect to start a Phase 3 study for our sick death vaccine candidate. In internal medicine, we remain on track to provide and upgrade of our dose optimization studies of Daniel Gipron in the first quarter this year.

For placebo, we expect to start at pivotal study this year in cancer CACX and [indiscernible] our 2nd generation COVID-nineteen oral antiviral candidate continues its Phase 3 study. Within IRI, we continue to progress a portfolio of medicines that include 2 potential first in class [indiscernible] Currently, Now let's discuss our commercial. 2024 was a strong year of commercial execution and we are pleased with our progress in improving performance, of our newly launched products and gaining and maintaining market share for several of our core brands. I will start by highlighting the strength and impact of our oncology. [indiscernible] [indiscernible] plus Pembrolizumab, is an important growth driver as it has already become the number 1 [indiscernible] First line treatment for locally advanced metastatic urothelial cancer in the U. S. We are expecting potential registrational interim data this year from ongoing pivotal studies in muscle invasive bladder cancer. Which if successful and approved [indiscernible] the total addressable patients in the U. S. BRAFTOVI, MEKTOVI achieved 27% year over year worldwide. Operational growth. And expanded its leadership position in multiple graft tumors. Which are some of the hardest to treat cancers. Yesterday, we announced that BRAFTOVI in combination with cetuximab and M4 FOX6, sold statistical statistically significant and clinically meaningful improvement in progression free survival and overall survival In patients with metastatic colorectal cancer, with a broad V600 mutation.

We are very excited with the robust improvement in PFS and OS and are looking forward to presenting this data in a scientific conference. [indiscernible] a treatment for adults with ALTI. ALK positive metastatic non small cell lung cancer achieved 37% worldwide year over year operational growth. And is emerging as a potential standard of care in the first line setting. Following last June's unprecedented CROWN trial data showing 60% of patients were alive without disease progression after 5 years. Where Brenna has seen a double digit share increase in both new patient starts and new prescribers. [indiscernible] had a strong performance in 2024 with more than 130,000,000 in full year revenues. An increasing overall share within the class of BCMA directed biospecific RDE volumes. For patients with triple class exposed relapse, or refractory multiple myeloma in the United States. I also want to comment about our COVID-nineteen portfolio. We continue to see stabilizing patterns the disease burden with a strong correlation between the COVID-nineteen burden of disease [indiscernible] We've seen the same stabilizing patterns in U. S. Vaccination rates at relatively low levels. Our assumptions for 2025 are on par with this twenty [indiscernible] And with a multiyear contracts we have secured in international markets, we are confident that our COVID-nineteen portfolio will continue to be a predictable durable contributor to our business.

In another key category, our Wintertel family of products, let's see if continuing momentum. With 90% year over year growth in the U. S. And 32% operational growth [indiscernible] We drove progress in diagnosing more patients and improving access to this treatment [indiscernible] [indiscernible] is a core brand for Pfizer with 10% worldwide year over year operational growth It is prescribed to millions of patients and we continue to strengthen its leadership position in a growing oral and coagulant market. We are also pleased with the ongoing positive momentum for Nortek, with 36% worldwide year over year operational growth, driven by strong Dorte is a leader in the oral CGRP class used for treating and preventing migraine with about 49% market share and we see opportunities for continued growth. Our respiratory vaccines [indiscernible] also our key products in our commercial portfolio. We have achieved a market leadership position for the season in sick dose for Abristan. With an approximately 13 percentage points increase in market share. And remain confident in our ability to retain our position through strong commercial execution even as we see a decrease in the total adult RSV market volume. Driven by a reduction in vaccination rates in the U. S. For the older adult indication.

Positive momentum in key regions such as Europe and Latin America and are also seeing strong demand for our maternal [indiscernible] [indiscernible] today cumulative maternal vaccination rate nearly [indiscernible] Compared to last season.

With Prevno, we are confident that we are well positioned for strong sustained leadership with over 87% market share in the U. S. Across indicates.

Globally, the pediatric market accounts for approximately 2 thirds of our revenue, and we also continue to make progress for the adult indication in key international markets. We are [indiscernible] by opportunities to maintain our leadership in the PCB space with our next generation PCB25 candidate mentioned earlier, In Phase 1, we demonstrated potentially improving immunogenicity for serotype 3 one of the largest contributors of disease at approximately 20% of invasive disease in adults aged 65 and older in the United States and Europe.

Across our commercial portfolio, in 2025, we are confident that we are in a strong position to build in our 2024 success and achieve commercial excellence You know, key categories of oncology, cardiovascular, migraine, vaccines and INI. With that, will turn it over to Dave.

Thank you, Albert, and good morning, everyone. I'll build on Albert's comments by reinforcing that we are very pleased with the financial results for the Q4 as well as the full year of 2024. These results demonstrate that our focus and execution against our strategic priorities are driving both positive patient outcomes as well as financial and operational strength.

Addition to our strong top line performance, our cost reduction programs are creating a more efficient organization driving operating margin improvement And as we move into 2025, these efforts will continue to lay the groundwork for potential increased capital returns and reinforce our commitment to maintaining and growing our dividend, while enhancing long term shareholder value. With that said, let me start with our full year and 4th quarter results. Then I'll touch on our capital allocation priorities. I'll finish up with a few comments on our 2025 guidance, which we are reaffirming today and our near term expectations that will continue to drive our growth potential in the latter half the decade. For the full year of 2024, we recorded revenues of $63,600,000,000 versus $59,600,000,000 last year, Importantly, our operational revenue growth when excluding contributions from our COVID products, was 12% exceeding our expectations of 9% to 11%. Full year 2024 adjusted gross margins as we continue to drive cost improvements across our manufacturing network. On the bottom line, we reported full year 2024 diluted EPS of $1.41 versus $0.37 last year and adjusted diluted earnings per share of $3.11 versus $1.84 last year. Significantly ahead of expectations due to our overall strong P and L Now turning to the Q4 performance versus the same period of LOI, Total company revenues were $17,800,000,000 versus $14,600,000,000 in the Q4 of last year.

Once again, our non COVID-nineteen products exhibited robust performance. With revenues of $13,700,000,000 reflecting 11% operational year over year growth. This performance continues to show that a refined commercial approach is working. We continue to focus on key products and geographies, We've refined how we allocate our commercial field resources globally and we further optimizing our mark [indiscernible] We saw strong contributions across our product portfolio primarily driven by the Vindikel family, PADCEV, Aliquis and NeurTech partially offset by declines in a BRISVO and Xeljanz. Adjusted gross margin in the 4th quarter was approximately 68%, primarily the result of a net unfavorable mix related to our COVID-nineteen products, primarily due to the co commodity profit split with BioNTech and applicable royalty expenses. This was partially offset by our ongoing focus on cost management across our manufacturing network as I previously mentioned. [indiscernible] As we previously communicated, long term improvements in gross margin were made at key focus for the company over the next few years. We expect to begin to achieve initial savings from Phase 1 of our manufacturing optimization program in the latter part of 2025 and continue to expect approximately $1,500,000,000 in savings from this first phase by the end of 2027.

We continue to evaluate other strategies to improve our network structure and as well as our product portfolio. And we plan to share more information on those components of the program once it becomes available. Polo adjusted operating expenses are essentially flat operationally at $7,300,000,000 in the Q4 of 2024 of 2024, And I will note that this amount includes spending acquired via our CGen transaction Looking at the components specifically, adjusted SI and A expenses decreased 4% operationally driven primarily by a decrease in marketing and promotional spend for various products, including both commodity and Paxlovid, partially offset by an increase in spending for certain oncology and recently launched and acquired products.

Adjusted R and D expenses increased 8 percent operationally, driven primarily by a net increase in spending mainly to develop certain product candidates acquired from CGM Partially offset by lower spending on certain ongoing vaccine programs, and certainly as a result of our cost realignment program. We continue to be disciplined with our operational expense management and delivered on our goal of at least $4,000,000,000 in net cost savings from our cost realignment program. Q4 reported diluted earnings per share was $0.07 and our adjusted diluted earnings per share was $0.63 benefiting from our top line performance as well as our efficient operating structure. Partially offset by a higher effective tax rate driven primarily by jurisdictional mix. In support of our goal to enhance R and D productivity and to focus on high impact medicines, our 4th quarter GAAP results reflect strategic decisions in our development plans and updated long range revenue forecasts for several medicines And as a result, we recorded approximately $2,900,000,000 in non cash intangible asset impairments related to several medicines in development, as well as several in line products. These decisions reinforce our focus on future growth as well as innovation. 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 an appropriate level of financial return and finally making value enhancing share repurchases after delevering our balance sheet. In 2024, we returned $9,500,000,000 to shareholders via our quarterly dividend invested $10,800,000,000 in internal R and D As expected, completed business development activity was minimal. Our commitment to delevering our capital structure to a gross leverage target of 3.25 times by the end of 2025 remains a key priority. In support of that goal, in 2024, we delivered by paying down approximately $2,300,000,000 in maturing debt and approximately $5,500,000,000 in commercial paper. And in January of 'twenty 5, we monetized another tranche of our Halyon shares which for reporting for reporting purposes is a Q1 'twenty 5 event. We received approximately $3,000,000,000 in net cash proceeds And now our ownership in Helion was reduced from approximately 15% to approximately 7%. We intend to monetize our remaining Haley investment in a prudent fashion during 2025. Overall, in Q4, we generated robust operating cash flows which combined with the most recent Halyon net sales proceeds of approximately $3,000,000,000 resulted in significant free cash flow generation as we enter 2025, our objective remains to deliver and return to a more balanced allocation of [indiscernible] between reinvestments and direct return to shareholders over time.

Given we issued our full year 2025 financial guidance on December 17, let me just hit a few highlights. Expect total company full year 25 revenues to be in the range of $61,000,000,000 to 64,000,000,000 and full year 'twenty five 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 as well as our focus on disciplined cost management. Importantly, we believe the steps taken to right size our cost base will put us on a strong footing towards increased operational efficiency and support our goal to return to pre pandemic operating margins. In further support of this initiative, we now expect to deliver overall net savings of $4,500,000,000 from our ongoing cost realigning programs by the end of 2025 while continuing to advance programs that will improve cost of goods sold As a reminder, the impact of the IRA Medicare Part D redesign is expected to be a net headwind to the company's revenue of approximately $1,000,000,000 across our product portfolio. Dampening growth by approximately 1.6% versus 2024. The impact of catastrophic coverage is expected to exceed the potential volume benefit from the reduction of the patient out of pocket [indiscernible] Leading to a negative impact beginning in early in the year while the positive impact of lower patient out of pocket costs is expected to build throughout this year, As the IRA is felt more acutely in higher priced medicines, We expect Bendacal, Ibrance, Xandy and Xeljanz to reach catastrophic coverage much earlier in the year And due to these changes, we expect a higher gross to net impact on our revenues for all drugs in the beginning of 2025 that is expected to moderate throughout the remainder of the year when compared to 2024.

And lastly, I will mention that we continue to monitor currency fluctuation as the year progresses. So in closing, let me just emphasize several key aspects of our business. We believe our financial targets for 2025 are both reasonable and achievable. Reinforcing our commitment to operational excellence. We also believe our revenue volatility is largely in the past. As COVID related uncertainties have diminished, Additionally, our cost improvement programs have set the stage for ongoing margin expansion We will continue our focus and execution to maximize the commercial value of our product portfolio and our new R and D leadership is committed to driving value creating innovation and strengthening our pipeline And lastly, we have a clear path to reloading our balance sheet enabling enhanced capital deployment and pursuit of additional opportunities to strengthen our business and create value for our shareholders. Are dedicated to maintaining and growing our dividend and meeting our delivering delevering targets by the end of 2025. Providing for a more balanced capital allocation. And with that, I'll turn it back to Albert to start the Q and A session.

Yes. Thank you, David. But before we turn to the questions, I would like to close the year with one comment. Pfizer knows how to execute well when we set our focus on We saw what we could do in 2020 when we were rapidly developed and prepared to manufacture billions of doses for the COVID-nineteen vaccine In 2021, when we repeated the same with paxglovid, [indiscernible] when with successful commercialization, we exceeded €100,000,000,000 in full year revenue. In 2023, despite the difficulties, we've rebased COVID-nineteen expectations we invested in our future with a big bet in oncology with the acquisition of Seed And last year, we exceeded expectations repeated with 4 consecutive quarters of strong financial performance from our disciplined commercial execution. Now as we are directing similar focus, and our proven ability to execute, on our R and D pipeline we are confident that we are well positioned to drive meaningfully improved productivity. [indiscernible] operator, please assemble the queue.

We'll go first to Steve Scala with TD Cowen. Please go ahead.

Thank you so much. I have 2 questions. First on the daniaglippron dose optimization data, it's apparently still on track for the Q1 of this year. What is the range of possible outcomes? And is dropping this version of the compound a possibility [indiscernible] And what would be the next step? 2nd question is [indiscernible] Boshoff, I assume he's on the line. Under the heading of nothing's perfect, can you share with us 2 or 3 things in the Pfizer R and D portfolio or system that you think need to be fixed. New leaders usually say they want to move quicker, but sometimes they also thoroughly go through the portfolio and shed many projects. Is that also a possibility? Thank you.

Chris? Should we start with Daniel? So for Daniel, this would be clear, we as we stated previously, we now targeting Q1 to update it from the ongoing dose optimization and formulation study, the PK study and we're on track to deliver that in Q1. We haven't seen the data yet. But obviously that data will then determine decisions for the future of Danica Apron. On your second question, as we've recently announced, we already focused our portfolio further. We've now established 4 end to end therapeutic areas oncology, vaccines, internal medicine, and INI and part of that will be to focus on those opportunities that could provide the biggest value both for patients, but also for Pfizer. So you will see during the coming months that we further focus and execute and accelerate dose medicines we believe could be potential future blockbusters.

Thank you, Chris. And Steve, you're right. And usually new leaders are taking their time to assess, but good news with Chris is that he knew really the Pfizer organization and I'm very impressed with the speed and faultfulness that he's deploying his changes. Already he announced the new organization, so selected a lot of leaders and refocused our pipeline in collaboration with Andrew Box. So next question please.

We'll go next to Jeff Meacham with Citibank.

Good morning, everyone. Thanks for the question.

Just had a couple of quick ones. So for the COVID franchise, you guys talked about stabilizing revenue this year. Maybe just give us some level of conviction and your level of investments in this in this business kind of going forward? I think most investors kind of would like for kind of be viewed as just maybe upside to the story And then from a capital allocation perspective, when you guys think about the appetite for potential BD, as you reprioritize or look at the pipeline? And evaluate a lot of the assets and say early to mid development, Just want to get a sense from you guys for the appetite for growing out the number of TAs, if you had more optimization to do that can be achieved through BD? Thank you very much.

I mean, So Jeff, on COVID, maybe I'll start with Paxlovid. You saw Albert describe, we have multiple years now of reference where Pac Slope and utilization tracks directly to the level of disease outbreak. And the year 2024 was no different. So we know that to be the case and we've also put in place a very effective commercial model in Paxlovid that allows us to deliver on that and continue to improve. In fact, if you look at 2024, we had higher physician treatment rates than 20 3 and we also had gains in market share versus 23. So we know we have a model that works. And with regards to resource allocation, we have targeted our resource modeling for PAX LOVID so that we are investing the places where it's relevant, when it's relevant. So we have a very, very tailored model. And I think you see that in the results. We had a very big summer and early fall wave of COVID in 'twenty 4. And then we had a milder and shorter winter wave and you see that reflected in PAX load utilization. We've also, ensured that we have the right pricing model in place and put in place a new agreement with the U. S. Government on our pexelabid contract that defines the eligibility for the USG pack going forward.

So there's clarity on that for January, February, and going into March. And with regards to vaccinations on, on community, again, we saw a pattern in 24 that very closely mirrored 23 So vaccination rates were quite stable. Again, here we also saw an improvement in our market share position. For community, and we are confident that our commercial execution both with regards to the retail setting and the non retail setting will continue to put us in good stead as we move forward.

Thank you. And of course, in international, to save time here, we have contracts with our multi year contracts at the they are covering not only this year, but the year after.

So Why don't we go to capital allocation? And then Dave maybe also Andrew you can comment on the BT.

So just Albert, I'll be real quick. From a capital allocation perspective, I'm very pleased with the company's cash flow generation throughout 2024 as we've continued to enhance our cash flow yield, number 1. Number 2, continue to aggressively de lever. And now as we enter 2025, we'll be in a position from a cash and a delevering perspective to have a more balanced capital allocation strategy allowing us to do a slightly bigger business development programs if so desired in 2025 With that, maybe I'll pass it over to Andrew to give some context around how we're thinking about that.

Yeah. So to recap what Chris says, we've narrowed our current therapeutic areas to the 4th. So oncology, vaccines, I and I and internal medicine. That's better to say that there's a fairly broad areas. They're big buckets that you can put lots of therapeutic indications in. If we were to explore adjacencies or indeed therapeutic areas where historically Pfizer hasn't been active, I think firstly, we'll be looking for truly breakthrough science that's tractable with the drug. 2nd, an unmet medical need that we feel that can be monetized. And thirdly and most importantly, we have to have the talent with it in order to develop those assets. If we go into a therapeutic area that is one that is unfamiliar to us, or we don't have historically that background of talent.

Thank you very much, Andrew and Dave. Next question, please.

We'll go next to Chris Schott with JPMorgan. Please go ahead.

Great. Thanks so much. Just two questions for me. Just coming back to capital deployment. Dave, just to build on those comments, you talked about slightly larger BD transactions. You just help size the range of what Pfizer is able to look at from here? And how you think about balancing business development versus share repo, which I know I think talked about as you started to delever would be part of the story. The second is on the RSU the market Just like a little bit about the thinking and the size of the opportunity from here and the potential for growth given some of the 2024 results both the U. S. As well as globally.

Yeah. So as far as capital deployment goes, Chris, I think the good news is the company has a very robust cash flow generation capabilities. And over time, we'll be able to do both dividends as well as BD as well as value enhancing share repurchases. Specifically, as we come into 2025, given the strength of the company from a cash flow perspective, We have the capacity in the $10,000,000,000 to $15,000,000,000 zip code from a business development perspective within 2025 if we chose to focus in that area.

You, Amir and Alexander, IRISV.

So very quickly in the U. S. Firstly, the market did decrease in 2024 and that's something that we have been signaling for quite some time. This was because of shifts in ASAP as well as the early adopters of the vaccine in 2023. Important thing for us, the things that we can control the strength of our commercial execution led us to the leading market share of the doses shipped to end customers at 50% for 2024 and an improvement in the shots and arms market share by 8 18 percentage points versus last year. And our maternal indication also performed very well, tripling the uptake from last season. Now as we look forward, in the absence of any major policy or ASEP change in 20 5, the RSV market without that is likely not to grow but there are a lot of catalysts for midterm growth. One is any policy updates to year round vaccination, 2nd, age expansion for 18 to 59 year olds that are at risk [indiscernible] As well as potential revaccination recommendations as data becomes more available. So those are mid term growth catalysts. And in the meantime, we remain confident in our ability to execute as that evolves.

So on the international front, Chris, what we see in this quarter is the beginning of financial impact of the work we've done in approving and getting through the VTC and the payers for Abreasbo. And in the countries where we received positive BTC and got reimbursement, we start to see great execution working hand in hand with the authority and SAP. Let me give you 2 example in mutinol immunization. So in the UK after winning the exclusive tender, healthcare professionals vaccinated with a brief of over 60% of the eligible pregnant woman in just 1 quarter in Q4. In France, in a competitive setting, a BRISBOT was administered to over 40% of the eligible pregnant woman in issue 4 alone. So clearly, we see a potential as we move into 2025 in the MI, a great opportunity to expand usage and to vaccination. And of course that is not just in developed market, but also in emerging markets and for instance, as you know, at Briscoe, Wesley, listed at the Panamerica Health Organization. And so starting this year, we can have Latin American country to start contracting a Brazil. Now in the OA, we start also to to see some traction and the vaccination campaign in the UK already reached 44% of the eligible population and regional vaccination was granted late 2024 in about half of the German population.

And we're expecting to get the full German population access in Q1, 2025. So again, on both marginal immunization and older have also plenty of opportunity to grow.

And your next question, please?

We'll go next to Vamil Divan with Guggenheim Securities. Please go ahead.

Yes, great. Thanks for taking my questions. So maybe a couple if I could on the pipeline. [indiscernible] starting Phase 3 in adults this year. Just curious if you can comment on what you've seen so far, gives you comfort in moving up forward when we might see the data publicly and also any updates on the pediatric population and when you where things stand there, the second one is on ponsacromab. And just you have the obviously cancer, KEGCEA, which you're starting Phase 3. [indiscernible] [indiscernible] you increased the patient enrollment significantly there. Just curious if you can provide any perspective on what drove that change in just your broader views on the heart failure opportunity for that product?

So first for PCV-twenty Pfizer, as Albert mentioned, this is an ongoing Phase 2 study with potential best in class vaccine The phase 2 study is ongoing in both adults and in pediatrics.

As we've mentioned earlier, serotype 3 is very important and is emerging as a very important serotype with up to 20% to 30% [indiscernible] population actually developed serotype 3. So we're very pleased that we're now seeing what looks like best in class immunogenicity against serotype 3 On the pediatric front, as you mentioned, the study is ongoing. So we hope to provide additional data later this year. But everything we've seen so far suggests to us that we've got improved immunogenicity of PCV 25 versus our current vaccine. Just to remind as well, we do have a 3rd generation vaccine 30 plus That's also now preclinical development that we hope to launch in Phase 1 later this year. On ponsacrobat, very quickly, we're excited about the data for cancer dyskinesia and the cancer cahexia study should start later this year. In a Phase 3 [indiscernible] we stopped the development of the cardiovascular study.

Thank you. And I want also to emphasize that the development strategy on PCB30 plus involves the development of PCB25. So if I'm the strategy which is development and regulatory that will allow us to accelerate the 30 plus by investing now in 25, which will come earlier, of course. The market. And I think there was a question also on the penetration obviously, but right now, both pediatric and and adult, we have [indiscernible] market share. Next question, please.

We'll go next Courtney Green with Bernstein. Please go ahead.

Hi, everyone. Thanks for taking my call today. Thanks for the details on kind of how you're thinking about the R and D organization. Just a clarifier and perhaps you can help us understand the strategy a little bit more here. It sounds like you're shifting into 4 R and D organizations. I also heard reference though to end to end areas. So can you talk about whether these are similar or different to how oncology was set up earlier this year?

Earlier last year? And then additionally, you talk a little bit about how you're allocating investment across R and D, across those 4 separate engines? How are you making sure that the bar is high in all of those different therapeutic areas and ensuring you've got the right prioritization given the independence of these [indiscernible] Oh, thank you. That's a great question. So Chris, start and then Andre can sign it.

It. Yes, so thank you very much for the question. So for oncology, as you stated, since the beginning of 2023, we had an end to end organization collaborating [indiscernible] early stage development, late stage development, as well as medical And we already had that in vaccines since 2009. And now we've built the same structure for INI and internal medicine. So it's essentially all four of those will be end to end organization. [indiscernible] between discovery Phase 1 and then from early development into late phase development. Andrew, regarding the Yes. Courtney, you hit upon that critical question. So historically, when you look back, there's no shortage of 1st in class breakthrough molecules that we've successfully shepherded through development However, some of those really have not delivered in terms of financial revenues and therefore to shareholders. And the key issue is really in ensuring that we have successful portfolio prioritization, bringing that commercial lens to much earlier during the process and having estimates that are derived in an unbiased way in a dynamic and subject to continued revision. So as in my role as Chair of the PMT since I joined Pfizer, partnering with Chris, have been working through that pipeline starting with the later stage assets, but then moving earlier to make sure the decisions we make drug by drug, indication by indication are ones that are going to deliver value for shareholders.

As well as to patients.

Thank you for the question, Kartna. And I want also to sign in and say that in our the r and d organization what we have right now, I think it's very, very, very strong capability. And is proven with the number of approvals but we have 13 right, last year and even same number in 23, no one even had even close. To this number. If you see our success rates are at 17% compared to 10, 11 of the industry, very few that have these success rates. And in time to the market, we are having approximately 5.6 years. When most of the industry is in 7, 8 years.

After improvements However, looking back, I don't think that we necessarily could have done way better in choosing the right products. To focus our R and D capabilities. Which is I think what now Chris and Andrew with the commercial assessments will try to do. The good news is that if it was a question of capabilities to improve our R and D productivity that would be a multiyear undertake. When it is a question of refocusing your investments, that's way more quick. And I'm very optimistic that the results will come out very, very quickly. With that, let's go to the next question.

We'll go next to Evan Sigerman with BMO Capital Markets. Please go ahead.

Hi, guys. Thank you so much for taking my question. Congrats on all the progress. Given RFK Jr. Approval by the Senate Finance Committee this morning, Can you walk me through how you plan on working with him as the likely head of HHS, especially with his views on vaccines and general skepticism of the pharma industry.

Yes. I was also informed that the senate Committee voted favor of him. So I think his confirmation is pretty much secure right now. Course, we will see what the full Senate will do. Look. I mean, we have with the Trump administration as a pharma industry, in particular, we speak as Pfizer very good relation. Personally, myself, I have a very long lasting relationship with the President, but was cemented during the operational work period. When we developed the vaccine for COVID.

And I know that the President is very proud of what he's able to accomplish, and he has made public statements on that. We met with Mr. Ken in the actually, the President introduced me to him and to head dinner also together and to try to understand his view. I focus more not on the things that we've [indiscernible] But on the things that we can agree and we can do things together, And those are things in chronic diseases, in cardiovascular diseases, and more importantly, cancer, which is something that is very, very high in the mind of the President. And it is also very high in the mind of mister Kennedy. I met him few times also. After a month. And we expect that we will have a collaboration. It's not my do I expect that we will agree on everything on vaccines? I don't know. But I think probably As I hear all the statements that have been done, by him and by the administration, he will have a way more temperate view on how to interact in the vaccines. But I don't want to speak about him. I think there are a lot of opportunities that outweigh the risks.

That we have with the radical change that we will see from the Trump administration, actually that we are seeing now with the Trump administration. So I'm cautious about this. Now let's move to the next question.

We'll go next to Kripa Devarakonda with Truist Securities. Please go ahead. Hey, guys. Thank you so much for taking my question and congratulations on all the progress. I have a question on your breast cancer franchise. You recently announced a strategy developing your CDK4 in frontline, first line breast cancer monotherapy and also in combination with [indiscernible] As the landscape evolves with other CDK4 6 inhibitors, different combinations, how do you see Pfizer's Do you see this as the strategy is getting a piece of the broader pie? Or are there areas with your CDK4 and your with WebDAD where you think you could establish a niche? And also with the Phase 3 data from Webtech expected anytime in Q1, what needs to happen with these data for it to be considered competitive? Thank you.

Thank you very much. Thank you for the question. We are very fortunate because we've got a lot of optionality now on breast cancer. Start with CDK4. We believe this is the best in class CDK inhibitor and what we've seen for compliance and the rate of AEs, specifically treatment related AEs as well as discontinuations we are very optimistic that CDK4 could not only replace Ibrance, but all CDK4six inhibitors [indiscernible] including first line as well as potential in the future also in the adjuvant. In the adjuvant setting. As Albert has mentioned, we are pleased that the first line studies are ongoing. That's CDK4 atetabracitecib in combination with letrozole. To your point, we also expect the readout for Vectech in the second line setting with the derisked study that includes ESL-one population as well as all comer population, medicine potentially could become a replacement for backbone endocrine treatment. We are planning a study in the first line setting combining veptec plus CDK4 in first line ER positive breast cancer. I also just quickly want to mention CDK6 because CAT6 is a differentiated epigenetic molecule. This is a first in category medicine. You've seen the data, very exciting, very encouraging data in later line disease.

And we're accelerating that also into a registration study with an ongoing Phase 3 trial in second line plus ER positive Brascale. Thank you.

Thank you.

There a question also for Daniel? No. It will not. Okay. Good. Let's go now to the next question, please.

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

Great. Thanks so much for taking the question. Maybe 2 for me on the pipeline. On LREX VO first, just on the commercial side, can you talk about what you're seeing in terms of uptake at the academic versus community centers? Are you seeing any broadening out into the community setting or is that really going to be contingent on getting some of the earlier lines data that you're expecting later this year from the Phase 3 trial? And then on danaquiprant on the dose optimization study, can you just kind of clarify how much data you're going to share later this quarter? Will we get weight loss data, will we get tolerability data, how much data will be in the initial press release? Thank you.

Thank you.

Amir?

Yeah. We're very excited about the momentum on LREXVO. We continue to see increase in share in new patient starts quarter over quarter. In the class and the uptick also does include community receptivity and awareness and new account adoptions. Obviously, with the whole slew of trials, assuming there's successful to follow, I think there's a lot of momentum behind Oraxio. And over the course of this year, we expect it to grow rapidly. Driven primarily by increased demand in our top 100 accounts as well as increased adoption in the community setting. Which I think positions Alorexia very, very well for the future as we expand indications into earlier line [indiscernible] Thank you. And myself, I was quite impressed with the community oncologist uptake of this product as quickly as it happened in the U. S. But also we have very good news for Alexio in the international market, Alexander? Yes, he did.

Was commercially launched already 6 markets in 2024. Out of our pub top 15 markets, so quite fast penetration. And of course, in 2025, we're expecting to get an additional 18 markets and [indiscernible] additional of our top 15 markets will launch this year. But the combination of the expand access plus the performance of the brands where we already have introduced the product gives us great confidence for accelerated growth. And to give you a sense, Japan is the 2nd largest market outside of the U. S. And we had a significant and very rapid demand in Japan where Eurexio was introduced first. To market BCMAB specific and that's we've seen an immediate acceleration of utilization actually deep into the community in Japan. And where we've launched with other product BCMAB specific, like in the UK and Spain, in Italy, our markets where we have demonstrated direct your leadership and we expect to continue this leadership position in 2025. So the combination of increased access and where we already had introduced growth expansions, there are two reasons why we believe the product has greater In general direction, because we do think that it is a mega blockbuster but will become you need to understand that already in the 1st year, we had more than $130,000,000 of sales.

And this is in a very niche indication. This is triple refractory which means patients that they have short duration of treatment and they are really failed after everything else. That was tried. As we move to we have form, [indiscernible] [indiscernible] could reach this year. And that not only removes the population, so we go to bigger replacement, but also expands significant deterioration. Of treatment. And the fact is this true as we go to the next line and to the first line of answer. So we think that in the U. S. And international, this product will become a very big oncology product for Pfizer. And with that, let's, Tanya.

Chris.

Yes, just what we said earlier. So in Q1, we expect the PK data, we are on target for that. Remember, this is looking at different formulation [indiscernible] for once a day tablet for once a day approach for a potential taking forward into a registration strategy. Although you mentioned weight loss, weight loss is secondary endpoint on the study. This is a smaller study. It's an in unit study. It may not be that reliable for weight loss from a small number of patients. Thank you. Next question, We'll go next to Mohit Bansal with Wells Fargo. Please go ahead.

Hey, thank you very much for taking my question.

Maybe if you can talk a little bit about [indiscernible] How are you seeing webinar share? I mean, you did talk about the market share here, but in terms of feeds versus others, how are you seeing the market share evolving? Now that also Vax Nuance has an expansion in next year. There is also a lower eligibility in terms of age. So can you talk a little bit about these dynamics and how do you see market evolving here?

All right. Let's start with international and then we go to the U. S. For exchange.

Okay. All right. So on Premise, as you know, in international, 2 thirds of the business comes from the pediatric indication and this kind of macro view with our prednisopropole vaccine, we have markets around the world. So that gives you the sense of the breadth of our local COVID vaccine. And as we move over the times our intention is of course to replace our premDA 13 to our premDA 20. [indiscernible] into the details, in emerging market, we have a very large part of babies every year. So around 76,000,000 new baby. And of course, alongside our great collaboration with the Gaffi Organization, we have our commercial organizations where we have demonstrated this year a double digit growth of our prednarr franchise. So a great execution in the emerging market. Now in the developed markets, following the EMA and the Japan approval, remember in March only of 2024, we started to gain VTC approval and funding. And where we start to to see that, we see that we are recapturing very quickly some of the business that went to competition. So give you an example. In Japan, PREMIER 20, as I said, was approved in March. We got the BTC recommendation in October.

And our market share in 1st dose went from 3% in September to 86% in December. So we see that when the you get to put, we really have an opportunity to regain that business. And on the outlook side, here again, we've seen a very strong growth in 2020 4 that we'll continue to expect significant growth just because we are expanding access in more mature markets with our PREMIER 20 adults.

And Amir, in the U. S, let me start with the adult market. We have right now a very strong position in the adult market. Now we are going to face competitive pressure over the course of 2025 [indiscernible] But we are confident that we will continue to maintain meaningful market share. A lot of that has to do with our commercial execution.

As well as the fact that many accounts, particularly non retail accounts prefer to stock a single vaccine. So we'll see that evolve over the course of the year and while we don't think that there's much catch up opportunity in the 65 plus, we also think there is growth opportunity in the 50 to 64 age group that brings about 30,000,000 adults into the eligible population. So those will be the dynamics in adult. Now in peds, there again, we have very significant market share and on the theme of improved market share across all of our vaccines, we saw 12 percentage point improvement from August 23 to December 24 in our pediatric market share. And here we expect this to be a much more stable market. Market. We plan to retain that kind of leadership share and we expect volumes to be more stable here.

Okay. Thank you very much. Next question.

We'll go next to Dave Reissinger with Leerink Partners. Please go ahead.

Yes. Thanks very much and thanks for all the update. So my question is just going back to RFK Jr. So assuming he is confirmed as HHS [indiscernible] his history of suing manufacturers and his commentary on lawsuits in the hearings last week. Could you just help us understand his ability as HHS Secretary to remove U. S. Vaccine liability protections that manufacturers currently benefit from and allow manufacturers the freedom to develop and sell vaccines that save lives? Thank you.

Yes. Look, I don't want to comment because these are legal issues, but I believe that the way back to day liability is through Senate through Congress approval. So I don't think anyone can change that without, let's say, Senate approval. I know that creates a turbulent into the market today and with RK It was almost certain that he will get confirmed. And we have engaged with him early enough so that we can mitigate all the issues. If he does the things that he has said in the past, because during the hearings, of course, clearly tempered. His statements on Maxis. But if he tries to do some of the things that he said in the past, I think that he won't find in front of him the industry. He won't find in front of him the total medical community. And the total scientific community and payers I don't want to see a reduction in vaccination because that's a very cost effective way of controlling [indiscernible] and more than important, this is not what the Trump administration would like to see another help rise. So I would say that I feel cautiously optimistic that they will be very, very prudent with everything they do.

Let's go to the next question.

We'll go next to Truong Huynh with UBS. Please go ahead.

Hi, guys. Thanks for the questions. Just 2 from me.

So firstly, going back to Abrazzo, I think Amir noted potential policy changes in RSV. So do you have any insight if there's going be a discussion from ACIP on revaccination or cohort expansion this year? I guess that could be a positive for your guide. And then 2, on PAD7's potential registrational muscle invasive bladder cancer trial, In general, I think cystectomy is used to cure patients in this setting. So just wondering how you're going to position this and how quick could you penetrate this population if approved?

Thank you. Very quickly, Amir on the Briscoe and then we go what I just mentioned were the catalysts that could could result in market expansion for Abrisbo. Obviously, it's too early and not our place to comment on what exactly ACIP is going to take on and when. [indiscernible] So thank you for the question. Reminded that this is a Vince driven studies. So we hope by the end of this year, but if event doesn't happen, we'll move a little bit on. Muscle invasive, about 28,000 population in the U. S. Alone, so it could more than double we mentioned, triple the population currently eligible. Currently, there's no standard of care treatment other than surgery, cystectomy for patients considered cisplatin ineligible. So, there's 2 studies, one for cisplatin eligible and one for Cisplatin ineligible. For the SIS button eligible, the current currently is dominated by new adjuvant chemotherapy. So there's a real need adjuvant and new adjuvant treatment and to replace chemotherapy in the setting of cyst platinum eligible disease. And of course, for cisplatin ineligible disease, it will completely change change the future treatment paradigm. So we're very excited that these studies are positive and what we've seen We've got confidence in these data from earlier studies.

So, yeah, Thank you. Next question, please.

We'll go next to Akash Tewari with Jefferies. Please go ahead.

Hey, thanks so much. Just on QB Danagrofrant, it looks like you're using a bilayer immediate release in Matrix technology here, but you don't actually test your bilayer formulation till the second half of your weight loss trial. Is that what your team is waiting on before you make a formal update? Or is it perhaps the Lilly Orphagliptin data that's also going to factor into this decision?

Thank you.

I don't think we can disclose the technology. I know that there were speculation into the marketplace, but we haven't disclosed the technology. So I'm not sure we can say much, but Chris, you want to add anything?

No, I don't think we need to add right now.

Yes.

Let's go to the next question.

We'll go next to Chris Shibutani with Goldman Sachs. Please go ahead.

Great. Thank you. A quick one on the pipeline and another on business development strategy. On the pipeline, I noticed in Phase 2, you've advanced the GIP antagonist. Is that something that you'll be consuming to share data on, particularly as a monotherapy? Do you have any efforts on going to do a combination? In terms of business development strategy I think the vocabulary you used included a capacity of perhaps in the 10 to $15,000,000,000 zip code. And I'm curious to know what you're solving for And I ask this in part because historically, there had been a view of using cash to acquire $25,000,000,000 in revenue by the end of the decade. But now when we think about where we are in this decade and what you could be solving for structurally, seem to be approaches sourcing assets from China. For instance, many of your competitors are doing this. Are you solving for near current revenues or are you looking to use other methods, including perhaps partnerships over M and A, that would be helpful. Thank you.

Yes. Let me start a little bit on the BD and those one. You can We had very clear about so far we have acquired $20,000,000,000 of 30 rabbits. We are very confident that we will hit some So that so far so good of that, right? Looking forward, of course, we are looking more strategic opportunities right now which will enhance pipeline in areas that we would like to play rather than near term revenues on BT. I would ask Andrew to comment and then if you can speak Chris about the GP antagonist.

Sure. So hi, Chris. Nice to hear your voice. So on the, the BT side, Albert said the keyword, which is strategic. So everything we do will be good for a strategic lens of building around our core competence [indiscernible] all built in compasses in the areas that maybe we have not been in previously if that's what decide to do. On your point regarding China, it has not escaped our attention. A course, the innovation from China across multiple therapeutic areas and indeed that was most evident with oncology some years ago, but now it's expanding to most therapeutic areas. They're mostly fast followers, but I expect that will change as well. It's an area that we are very, very active in We continue to have very fruitful discussions and, let's just see where we go. [indiscernible] We have a very strong footprint inside and that includes not on commercial, but we have very strong R and D. Footprint that they are looking at Zynix Innovations because they are progressing very fast. And to identify what you've experienced.

On the gipa antagonist, this is potentially a first in class oral small molecule GIPR antagonist. It's currently in an ongoing Phase 2, placebo controlled study evaluating the GIPR antagonist in adults with obesity on the background of, GLP 1 receptor agonists. If the data from the Phase 2 study are positive, we may potentially be able to develop also fixed dose combinations, including with GLP-one, including potentially dalaprone in the future.

Thank you. Next question please.

We'll go next to Alex Hammond with Wolfe Research. Please go ahead. Thanks for squeezing me in. On VINDIPEL with new competitors on the market and on the way, can you walk us through how we should think about the near term commercial dynamics?

Could we see the largest share impact, newly prescribed patients or switches? Thank you.

Thank you, Alex. Amit?

Yeah. Finda obviously had very significant momentum in 'twenty four. You saw the growth rates and that was due in large part to the commercial efforts and the attention and investment we put behind it We saw improvement in diagnosis rate as well as new patient starts and we also did benefit annual enrollment patients in the Q1 of 'twenty four due to favorable affordability. So as we look into 25, there's both headwinds we're confident in the growth of Vinda, obviously, at a different rate than it grew in 'twenty four. We do see increased diagnosis education, growth in the prescriber base, and there will continue to be favorable affordability conditions. But we do expect that there will be some headwinds. Obviously, you referred to 2 new market entrants. That will have some impact that remains to be seen both on switching patients as well as new patient starts. I think it's also important to remember that there will be impact of IRA on Vinda and the effect that it has on the calendarization of our GTN, with more of the GTN impact coming earlier in the year as we reach the catastrophic phase. Now with all of that said, I think we remain really confident and excited.

With Vindo, we've robust clinical profile, that has data both from the clinical trial and the long term extension. We've got 5 world 5 year real world data on vials we've got strong access and we are confident in our position as the standard of care.

And let's move to the last question.

Our last question comes from Tim Anderson with Bank of America.

Thank you. I have a question on just obesity strategy. So to me, late entrant companies with with one lead asset might struggle [indiscernible] it could be in a better position if they have a collection of assets There's naturally turnkey solutions out there in terms of companies that any larger company could either partner with or acquire outright. How is Pfizer looking at its BD efforts in this regard either partnership or acquisition that could bring you 1 or more assets that aren't far away from being in Phase 3?

Andrew?

Yeah. Hi, Tim. So I agree with your assertion that Obesity is heterogeneous and likely require a set of tools encompassing both modalities and different delivery devices in order to manage what is a lifelong These assets do exist. Some are scattered, some have portfolios. You could imagine that of course we are looking at all the opportunities and trying to understand what delivers most value to patients and obviously to Pfizer shareholders.

Thank you very much. And I think that concludes our call. Thank you all for your interest 2024 was a strong year of performance and our 2025 strategic priorities are very clear.

We are planning to execute as well on them as we executed in 2024. Thank you very much, and have a nice day.

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