Pfizer Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2023

There are 23 speakers on the call.

Operator

Good day, everyone, and welcome to Pfizer's First Quarter 2023 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chris Stivo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Speaker 1

Thank you, Chelsea. Good morning, everyone. Welcome to Pfizer's Q1 earnings call. I'm joined today by Doctor. Albert Bourla, our Chairman and CEO Dave Denton, our CFO and Doctor.

Speaker 1

Michael Dolsten, President of Worldwide Research and Development and Medical. Joining for the Q and A session, We will also have Angela Huang, Chief Commercial Officer and President, Global Biopharmaceuticals Business Amir Malik, our Chief Business Innovation Officer Doctor. William Powell, our Chief Development Officer and Doug Lankler, our General Counsel. Before we begin the call, I wanted to remind you of some logistical items. The materials for this call and other earnings related materials are on the Investor Relations section .com.

Speaker 1

Please see our forward looking statements disclaimer on Slide 3. Additional information regarding these statements Our non GAAP financial measures is available in our earnings release, in our SEC Forms 10 ks and 10 Q under Risk Factors and forward looking information and factors that may affect future results. 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 these statements. With that, I'll turn the call over to Albert.

Speaker 2

Thank Thank you, Chris. Hello, everyone, and thank you for joining us today. Q1 was a solid foundational quarter in what we expect to be an exciting year for Pfizer and patients. Our financial results were as we anticipated. Our non COVID revenues grew 5% operationally compared with a year ago quarter, While overall revenues declined 26% operationally, primarily due to a previously communicated and expected decline in Commernity Even with Commernadry's decline, our COVID franchises remain significant contributor to the business With a combined $7,100,000,000 in revenues during the quarter.

Speaker 2

This growth was driven primarily by recently acquired products, Nortek For migraine and OxBryta for sickle cell disease, our anti infective Superazole, Eliquis in the nonvalvular atrial fibrillation indication in the U. S. And our Vindactor family of products for the treatment of transcereting amyloid cardiomyopath. We also continue to be proud of our patient impact. During the Q1, more than 250,000,000 patients We're treated with our medicines and vaccines.

Speaker 2

With this solid start to the year, we remain on track to grow our non COVID revenues by 7% to 9% operationally in 2023. That's Because the majority of our potential near term product launches, as you can see mapped out on this slide, are expected to occur in the second half of the year, Following regulatory approvals were not yet secured. As such, we expect our non COVID revenues to grow at a faster rate in the second half of Overall, we are in the midst of an 18 month period in which we expect to launch up to Excellent progress towards this goal with the approval of XARSTRET, an expanded indication for to include adolescents and last week's approval of PREVAR-twenty for pediatric use, all in the U. S. We also have secured regulatory filing acceptances for enalatinib, for BRAKTV and MEKTOVI For non small cell lung cancer and for our RSV maternal vaccine candidate, which, if approved, would be the first vaccine for administration The European Medicines Agency has accepted our MAA filing for review of TALZIMA for use in combination with Xtandi for patients with newly diagnosed metastatic castration resistant prostate cancer based on the Talapro2 Regarding our COVID-nineteen franchise, we continue to expect 2023 to be a transition year As the virus continues to mutate and to remove from advanced purchases under government contracts to more transitional supply arrangements in the commercial model for both Commernity As previously discussed in 2023 2024, we expect vaccine utilization to decline compared With 2022, then starting in 2025 and continuing in 2026 and beyond, we expect to see an increase in COVID-nineteen vaccination rates, assuming the successful development and approval of various COVID combination vaccines.

Speaker 2

Outside the U. S, we expect these General trends to be similar with some variations from country to country. Regarding paxlovid, we continue to expect the government inventory that built around the world last year to be absorbed by the end of this year. We then expect that in years 'twenty four and beyond, the courses to vaccination strategies for the estimated 40% of the global adult population at high risk for progressing to severe Now let's take a look at Pfizer's next potential move saw, the battle against cancer. Oncology remains a core therapeutic area for Pfizer, and we believe the proposed acquisition of Cision will enhance Our position in this important space.

Speaker 2

Integration planning is already underway, and we continue to expect the deal to close in late By combining SEDAR's category leading antibody drug conjugate technology with Pfizer's scale, expertise and capabilities, We believe we can accelerate potential breakthroughs in cancer medicines and introduce new solutions to patients around the world. The potential combined commercial infrastructure for Pfizer and Cision would be 3x the size Could contribute more than $10,000,000,000 in 2,030 risk adjusted revenue with potential significant growth beyond 2,030. Even with a seasoned deal, given the strength of our balance sheet and cash flows, we continue to have the flexibility take additional actions to create shareholder value. Dave will provide more details on this during this presentation. One of the key areas of focus for Pfizer in 2023 is continuing to build trust, which is a key asset for every biopharmaceutical company.

Speaker 2

Since the beginning of the year, we have received 2 accolades that demonstrate we are doing just that. In February, Pfizer was named to the top 10 of Fortune's most admired companies for the 2nd year in a row. And in March, Efisceran recognized Pfizer as one of the world's most ethical companies, also for the 2nd year in their own. At Pfizer, trust is everything. It gives us our license to operate, With that, I will turn it over to Dave.

Speaker 2

After Dave, Michael will provide an update on R and D pipeline. Dave?

Speaker 3

Thank you, Albert, and good morning, everyone. I want to begin with Pfizer's capital allocation strategy before we dive into additional commentary about our quarterly performance and importantly, our outlook for the remainder of 2023. As you know, our strategy includes 3 main pillars: Reinvesting in our business, growing and paying dividends and repurchasing our shares. In the first 3 months of 2023, we have invested $2,500,000,000 in internal R and D and returned 2 point Over the last few years, we have reinvested heavily into our business to drive long term growth and enhance long term shareholder value. We have invested in Pfizer's own science, while acquiring the best external science to supplement our pipeline.

Speaker 3

Since 2022, we've invested approximately $70,000,000,000 including CGM in business develop. In addition, we have continued to grow our dividend. For the past 14 years, we have raised our dividend annually. Since 2010, our quarterly cash dividend grew from $0.16 a share to $0.41 a share in 2023. Looking ahead as we exit this unprecedented period of anticipated launches, we would expect to achieve operating margin improvement over time.

Speaker 3

As we began to delever our capital structure after the closing of the CGM transaction, We expect to return to a more balanced capital allocation mix between our three pillars. While we will continue to invest In our business, we do expect more balance between that priority and returning value to our shareholders via increased dividends and value enhancing share repurchases. Our capital allocation strategy is squarely focused on driving shareholder value, while at the same time remaining committed to a high investment grade Tier 1 commercial paper rating. Now turning to the quarter. As Albert said, our results We're in line with our expectations, albeit slightly better than consensus.

Speaker 3

As expected, overall revenues declined 26% operationally, primarily driven by the anticipated decline in Comirity, which was partially offset by strong paxlovid sales. I want to point out that our COVID-nineteen products produced $7,100,000,000 in revenues in the Q1 alone. Our non COVID operational revenues growth was solid at 5% year over year. Primarily driving this growth was the inclusion of Nurtec ODT and OXPRYDA and an increase in So, Perlizan revenues in China, revenues for Eliquis in the U. S.

Speaker 3

And the Vindicel family globally also contributed to this growth. Now I want to remind you of the seasonality of some of our products. In the Q1, Nortek ODT and Most importantly, both products continue to experience strong growth in demand. To help ensure the success of the expected launches of a large number of new and acquired products and indications, we've increased our investments These investments are squarely focused on Pfizer's 2025 to 2,030 growth aspirations. Now moving to the bottom line, Reported Once again, this quarter, foreign exchange movements significantly impacted our results, reducing 1st quarter revenues by $730,000,000 or 3% and adjusted diluted earnings per share by $0.07 or 4% compared to LY.

Speaker 3

Now turning to the full year financial outlook for the company. Our full year 2023 guidance remains unchanged. On a total company basis, we continue to expect revenues of $67,000,000,000 to $71,000,000,000 reflecting an operational decline of 31% at the midpoint. With 5% operational growth in our non COVID revenues this quarter, We are on track to achieve our non COVID revenue guidance of 7% to 9% operational growth for the full year. Given that a large number of launches are expected to incur in the 3rd Q4 of 'twenty three, We anticipate our quarterly revenues will not be linear this year and that our non COVID revenues will grow more quickly and the back half of this year versus the first half of 'twenty three.

Speaker 3

In terms of our COVID products, Comerity and PAXLOVID, We expect sales to trend more seasonally this year. Given these dynamics, we expect significantly lower sales contributions from our COVID products in the Q2 versus the Q1. In fact, given the anticipated timing of approvals for a fall vaccine with strain change, we would expect More substantial vaccines deliveries to start in September, which is late in the U. S. Q3 and the beginning of our international Q4.

Speaker 3

With respect to paxlovin, we continue to expect 'twenty three to be a transitional year We anticipate shifting to a commercial market in the second half of this year. We are reaffirming our adjusted diluted earnings per share guidance range of $3.25 to $3.45 per share. On a full year basis, we expect that Foreign exchange will have an unfavorable impact compared with full year 2022 of approximately $0.13 on adjusted diluted earnings per share. We are also reaffirming the remaining components of our full year 2023 guidance, which you can find in the appendix of the Q1 'twenty three earnings presentation. So in closing, this is an exciting period for Pfizer as we continue to invest to drive long term growth and importantly enhance long term shareholder value.

Speaker 3

With that, now let me turn it over to Michael.

Speaker 4

Thank you, Dave. Today, I'd like to start off with 1 of the 4 pillars of our oncology portfolio, which are breast, urogenital, Blood cancers and precision medicine. Within urogenital, prostate cancer is an area in which we have strong momentum. Recent positive study results further strengthened our franchise, building upon the global standard of care set by And underscoring our long standing commitment to the pursuit of breakthroughs that define new standards of care in prostate cancer. I'll highlight data from 2 Phase III studies, AMBORG and TALAPR2, as well as early but promising signals from our EASE H2 inhibitor, each of which has the potential to reach broader patient population across the treatment continuum in prostate cancer.

Speaker 4

Final analysis from Telepro II evaluating our potential blockbuster PoP inhibitor, Telcena, in combination with Xtandi We are presented at ASCO GU. Results showed significant and clinically meaningful improvement across the all comer population in radiographic progression free survival or RPFS in men with metastatic castration resistant prostate cancer with or without homologous recombination repair or HRR Gene Motation. There was a 37% reduction in risk of disease progression. Median RPFS in patients treated with Talzena and Xtandi was not reached at the time of analysis versus 21.9 months for placebo plus A trend in overall survival favoring Talzena plus Xtandi was also observed, though these data are immature. The final OS data will be reported once the predefined number of survival events has been reached.

Speaker 4

Treatment with Talcena and Xtandi resulted in The U. S. FDA has granted priority review for our sNDA for Talzena in combo with Xtandi for metastatic castration resistant prostate with a decision expected in 'twenty three. The ongoing TELAPRO-three study, if successful, may further And the reach of this potential blockbuster into the HRR deficient metastatic castration sensitive population. We recently presented data from our Phase III M.

Speaker 4

BARK study evaluating Xtandi plus luprolid in men with non metastatic Hormone sensitive prostate cancer with high risk biochemical recurrence at the American Urological Association's 23 annual meeting. The study met its primary endpoint with statistically significant and clinically meaningful improvement in metastasis pre survival With a 58% reduction in risk for radiographic progression or death, key secondary endpoints were met, including time to PSA progression. These results suggest Xtandi, the only novel hormone therapy approved For 3 disease states of prostate cancer in the U. S, has the potential, if approved, to expand to patients in a hormone sensitive or castration sensitive setting for the first time. Next, I'd like to share early data from one of our next candidate, a potential 1st in class and best in class Ease H2 inhibitor, which we shorthand as 1497.

Speaker 4

ESH2 is an epionetic transcriptional repressor that's frequently overexpressed in prostate cancer. We believe that in addition of ESH2 may provide synergistic effects in combination with Xtandi with a potential to address unmet needs of patients Here are data from our ongoing Phase III study evaluating 1497 in 2nd line MCRPC patients with prior abiraterone and or Xtandi and up to one line of chemo. On the left are updated data from a Phase 1 dose escalation study shared at ESMO last year. These encouraging results showed durable antitumor in both Xtandi naive and experienced patients with all Xtandi naive patients having received prior abiraterone. Importantly, this suggests that the addition of our ESH2 inhibitor has the potential to sensitize extender resistant tumors, which is an increasing clinical unmet need.

Speaker 4

The early RPFS data are also highly encouraging, reaching 8.7 months in extended experience and 17.1 months in extended naive, both of which are notably longer than historical controls. For example, in the control arm of the CARD study, RPFS for Xtandi alone was only 4.8 months in Xtandi naive patients. And although cross trial comparison cannot be made, These results in combination with emerging objective response rate and PSAFE-fifty response are supportive of the contribution of our inhibitor candidate in driving these responses. From a safety perspective, the combination was generally well tolerated with mostly The randomized Phase II study in second line MCRPC is ongoing with data expected early 'twenty four. Now we turn to the potential for near term growth across our respiratory vaccine franchise.

Speaker 4

PREVNA20 or our 20 dilent pneumococcal conjugate vaccine is now approved for children aged 6 weeks through 17 years. We are confident in our ability to maintain leadership in the pneumococcal vaccine space with PREGNRA 20, which offers the broadest Serotype coverage of any pediatric pneumococcal conjugate vaccine helping to protect against 20 serotypes in the vaccine. We have strong momentum with our RSV vaccine candidates, having received a positive VIRBAC Committee vote supporting potential approval to help combat RSV in older adults and PDUFA dates for our older adults and maternal indications in quick successions in the coming months. And just last month, New England Journal of Medicine published results from the 2 positive Phase III studies. Emerging data from the middle of the second RSV season in the Northern Hemisphere in the Phase III older adult study support meaningful, durable vaccine efficacy.

Speaker 4

We will share the data Once complete, in the coming months, we plan to start a Phase 3 study of the RSV vaccine candidate in 18 to 60 year olds At high risk, parsley and in immunocompromised adults 18 and over and a Phase I study in 2 to 18 year old at high risk. With the potential to expand broadly the reach of our vaccine candidate, both to those aged 18 to 60 with high risk condition as well as to pediatrics and adolescents. Our RSV flu coadministration study met its primary endpoint, demonstrating non inferiority for all four And the RSV A and B strengths. This suggests RSV vaccine candidate, if approved, Finally, FDA recently updated the EUA for our Omicron BA.45 bivalent COVID-nineteen To enable those at high risk of severe COVID-nineteen illness, including the elderly and immunocompromised, To partner with the healthcare providers to be proactive in helping them to protect themselves against COVID-nineteen, we anticipate another update from FDA in June that will provide guidance on COVID-nineteen vaccine strains and vaccination timing for the 2023 fall and winter season. Beyond vaccines, antivirals are an important component of our strategy in respiratory viruses.

Speaker 4

Here we share data for the first time from our 2nd gen oral COVID-nineteen antiviral candidate, It's achieved clinical exposure that would have similar antiviral activity to PAXLOVID, but without the need for ritonavir boosting and with the potential for reduced drug interactions. Early results from Phase 1 dose escalation are encouraging with no dose limiting safety tolerability findings. Dosing achieved concentration manifold Over in vitro EC90 and is therefore expected to have similar antiviral activity to PAXLOVID. On the right are preliminary results from a Phase 1 These data show there is a lack of such drug drug interactions, suggesting there may be no related restriction Co dosing with drugs metabolite as Supenzyme. Based on these encouraging data, we're planning to advance to Phase II dose ranging study in the first half of this year.

Speaker 4

In addition to the assets I spoke about today, we continue to make progress on the pipeline with more than 25 mice was recently achieved or anticipated through the first half of twenty twenty four. As a consequence, in inflammation and immunology, the FDA has approved our sNDA for Sibinco, enabling a label expansion for adolescents with moderate to severe In internal medicine, self spread, the migraine nasal spray has received FDA approval, expanding our migraine portfolio. Recently, the FDA advisory committee voted in support of PachelaVic's favorable benefits risk profile with a soon PDUFA date in May. In closing, we are very excited about the potentially transformative catalyst expressed across the entire pipeline Thank you. Let me turn it over to Chris to start Q and A.

Speaker 1

Thank you, Michael. All right. Chelsea, please queue up the list for Q and A. We have at least 30 minutes for Q and

Operator

And our first question will come from Umer Raffat with Evercore ISI. Your line is open. Omar, your line is open.

Speaker 5

Hi, guys. Apologies. Thanks for taking my question. I have 2 here, if I may. First, your expectations on the cisplatin eligibles In the EV302 trial, especially because it's so significant to the acquisition you're going down the track on?

Speaker 5

And then secondly, Based on my

Speaker 2

analysis Omar, can you repeat the question? I'm not sure we understood it.

Speaker 5

Sure. On the C GEN trial on PADCEV, EV302, I know there's been a huge emphasis on Cohort K, which is a cisplatin ineligible. My question is, This ongoing trial also has cisplatin eligibles, which is 2 thirds of the target population. What's your expectation there? Because it was I felt like it was not a coincidence.

Speaker 5

CGM never showed any data disclosure from the eligibles Part A. And secondly, for the guidance for the full year, I noticed There's perhaps $1,000,000,000 or so worth of contribution from new launches. And I'm just trying to make sense of that in light of the fact that these are going to be launches Sort of in fall of this year, I realize it's important drug like RSV, eloninumab, but is it reasonable to expect $1,000,000,000 or so, so early into the launch from those? Thank you.

Speaker 2

Yes. Thank you very much. Angela, why don't you take the second question about the guidance, About $1,000,000,000 estimated sales in the last quarter.

Speaker 6

So From a launch perspective, I think the 2 big ones to look out for this year are Prevnar-20Ps And RSC Adult. And as you know, it goes through the typical ACIP process or recommendation And then launches can really only happen for commercialization after the publication of the MMWR. So if you consider all of that, that puts us into Q4, which is when Prevnar 20 peds as well as when RSV older adult We'll actually be commercialized and revenue being generated. And so yes, we are anticipating that there Big bolus of revenue because, first of all, if you think about Prevnar-twenty piece, that is going to be a conversion From Prevnar13, please. And Prevnar13 today has a significant market share, right, in pediatric pneumococcal, it's 80% So we're going to be converting those accounts, the physicians, the inventory, all of that from 13 over to 20.

Speaker 6

And so if you look at, I guess, a good analog for that would be our Prevnar 20 adult launch, which was the conversion of the Prevnar13 adult launch. And there, it went really well. Today, we have, what, over 95% market share. And then of course the second one is the RSV adult. And there it plugs into an already established commercial Infrastructure that we've built around COVID, around Prevnar, around the Prevnar franchise, the adult franchise.

Speaker 6

It comes at a great time during the fall and the winter when vaccinations for So there's a lot of reasons to believe why that Q4 is going to be a really big quarter for both Prevnar Peet as well as RSV

Speaker 2

Thank you, Angela. On the question about the Seaton asset, although we should be very careful because We can't comment on that, but maybe you can make, William, a quick comment, generally speaking.

Speaker 7

Yes, sure. I would say we're just very excited about the recent approval in the first line ineligible population, which Seagen just got, Which is about 8000 to 9000 patients in the U. S. And we're excited to see additional data coming in the first line cisplatin eligible CV-three zero two study, which as you know is PAZSIP plus pembro versus platinum gencitabine. We can't comment any further as a c gen study.

Speaker 7

And if that positive, that would increase the eligible population by another 10000 to 12

Speaker 2

It's doubling the population that excites us, but of course, we can't comment on the cedars products. Next question,

Operator

Our next question will come from Evan Seigerman with BMO Capital Markets. Your line is open. Evan, your line is open.

Speaker 2

All right. Sorry, Evan.

Operator

Go ahead, Evan.

Speaker 8

Oh, Perfect. Thanks for taking our call. This is Keith on for Evan. Maybe just shifting to M and A execution, thinking about your recent acquisitions With Nurtec and OXBryta, you've done a great job describing the plans to add value, drive commercial and clinical synergies. We're seeing the outcomes on our end.

Speaker 8

Could you comment on how this is going from your end? And then could you talk about specifics for operationalizing The same for Seagen integration and how this would differ from recent examples, that would be great. Thank you.

Speaker 2

Again, Angela, back to you.

Speaker 6

Sure. So we are incredibly proud of the work that we've done We're on Nurtec since the acquisition. As you know, in July of We had already begun a co promote with Biohaven to ensure that we were Co promoting the product early, and I think that has really paid off. If you really look at what has happened from just leading indicators as well as actuals, Today, Nurtec is the leading product in the oral CGRP class with over 47.5% market It is also the leading product when it comes to new to brand prescription share at a high of 40 It also has the highest number of prescribers at over 110,000 prescribers and 80% of new CGRP So I think we've demonstrated in the time that we've had it that we are able to drive performance And drive excellent education and awareness of the product. And we're seeing consistent great metrics as it pertains to NetEq.

Speaker 6

And of course, the opportunity is huge, right, because we have cevagipan launching later this year. And we also know that As a whole, there are over 1,000,000,000 migraine sufferers and only 18% of them are using CGRPs today. So we have a great opportunity

Operator

Our next question will come from Mohit Bansal with Wells Fargo. Your line is open.

Speaker 9

Great. Thanks for taking my question. If I may ask 2 questions here. So on European negotiation, just because there was some news this week, Just how much can you comment on that? And the real question there is that, is I know you when you provided guidance in the beginning of the year, you Anticipated some of that, but so far as the negotiation is not going to be any risk to the guidance as the negotiations get finalized in that.

Speaker 9

And the other question I have is more about the your demand chart for PAXLOVID and vaccinations both. It seems like you are assuming both PAXLOVID vaccination utilization going up in 2024 plus timeframe. Would it be both Demand going up or you think it will be either or as vaccinations come down, probably the demand for Baxlovid would go up? How should we think about that? Thank you.

Speaker 2

Thank you. Maybe I can answer those questions. So the EU negotiations, they are still ongoing. So we can't comment on that. Yes, we had included part of we had included our estimation of how these negotiations will end up In our guidance, and still we are not closing, so I can't make any comment on that.

Speaker 2

It wouldn't be appropriate as the discussions are still ongoing. As regards the demand for vaxlovidor for vaccines, as we had said, we expect that the demand for vaccines We'll go down. We gave estimations that will go down to approximately 24% of People in the U. S. And relevant numbers, different country by country, as underlying demand, But for boosters, things, I think, are progressing towards that goal.

Speaker 2

We will have to See as most of this will happen in the last after summer when it is the traditional period that flu Also vaccinations are happening. Demand for Paxlovid right now is following Very, very accurately, the infection rates. So when We monitor it on a weekly basis, and really, it is going when we have almost equal percentage of infections It's equal percentage of the decrease for Paxlovid. And so we expect that will continue going like that Because we have less compliance with the vaccination recommendations across the world As people are tired with COVID, and we expect that fewer people, as I said, this year will get the vaccine compared Last year, and so this means that the immune protection of the population will go down. As a result, we expect that we'll have more infections, and that We'll drive more use of axlovid.

Speaker 2

But of course, that's what our neurological models are

Operator

Next, we have Robin Karnauskas with Truist Securities. Your line is open.

Speaker 10

Just two big picture ones. Just first on for your vaccines franchise, we think about the competitive landscape, A couple of things. What do you think is going to be the most important differentiation for you versus the competition that will drive the most uptake as people have different options? And have you developed any new LNP technology that might reduce the biggest pushback with the vaccines as people feel sick So when they get them for some of your products. And then lastly, just to take a turn

Speaker 2

off We couldn't hear which product You spoke about.

Speaker 10

Oh, I was just talking about the frac vaccine franchise for RSV and flu and COVID, Thinking big picture, how you are differentiated? And what do you think is going to be key because you're all competing to determine who's going to be the winner? And the second question is there's the MRN big proposal out of Europe for new legislation for drugs and since you're launching all the New products in Europe. Just wanted to get your thoughts on whether or not you think that legislation may hold or what kind of impact that might have?

Speaker 2

Thank you. Maybe I can give you a very general answer and then if Angela wants to chime in, please. On the COVID, we are the Right now, right, we have the big market share, and we plan to maintain that. So I think we are there. When it comes to RSV, we are the only ones that we have both Or we have posted data on both on adults and on maternal, and we So that the strength of our data with efficacy and safety profile that we think is differentiated Will provide us with what we hope also to be the winners in that one.

Speaker 2

The flu On mRNA technology, still the jury is out. We are very optimistic With the totality of the data that we are having from our flu vaccine, and we will wait to see, of course, how that We'll continue. And then, of course, the winners, there will be also those that they will be able to build some delays of all of that. So The fact that we have all 3 of them or we have a good chance to have all 3 of them if the studies are successful and if the products are approved, Of course, also provides a good differentiation. In addition to all of that, I think the trust to the Pfizer Brand name, which has been very, very strong, I think also plays a key differentiator.

Speaker 2

Now as regards to the EU legislation, but we have just seen in the recent days, We are noticing the positive things of EU trying Be more competitive in attracting research and creating a regulatory framework for more rapid Approvals, clearly, we are also concerned at the same time with provisions that would like to reduce facility of data and other provisions. So we hope that there will be An open dialogue with the EU so that we can create a framework that really will enhance innovation. Angela, anything that you want to add to all of that?

Speaker 6

Maybe just to add to your question specifically about the adult portfolio. I really do believe that this plays into our sweet spot. Through the last several years, both from The Prevnar franchise for vaccinating adults through our work in COVID, we've learned that The clinical profile is one thing, but you really need reliable supply. You need a commercial infrastructure. You need a great ability to educate, raise awareness and drive people to vaccination.

Speaker 6

And I think on all of those counts, Pfizer is a winner. And so we look forward to having A growing and a very robust respiratory portfolio that really leverages off of this incredible commercial machinery.

Speaker 2

Thank you.

Speaker 11

Next question please.

Operator

Next, we have Louise Chen with Cantor. Your line is open. Hi, thank you for taking my question. So I

Speaker 12

wanted to ask you about margin improvement. You talked about that in your opening remarks. I'm curious when we might start to see that And does that include the CGen acquisition in your comments? And second question I had for you is, what are some of the key That you've taken already to transition Comirnaty and Paxlovid to the commercial markets? And when will you know how the season will shape up?

Speaker 12

Thank you.

Speaker 2

Thank you very much, Luis. Dave, would you want to take the margin improvements? And then Angela Comrinath,

Speaker 3

Yes. Thank you for your question. It is our expectation that as we integrate Seagen in either late 'twenty three early 'twenty four, we will begin to see margin improvement and that will happen as we continue to improve our performance from a top line perspective. At the same time, we're going to be very efficient and really work to minimize our SI and A investments going forward. So I think you should start to See that post the integration and the closing of the CGM transaction.

Speaker 2

Thank you, David. And Angela, how are we preparing

Speaker 6

So Louise, as you know, both of these products, both Commernity and PAXLOVID, our Products are very familiar to us. They sit very well in the existing portfolio of products that we have. So the ability for us to move from an EUA Into a full launch or into it's business as usual for us, right? So the typical things that we would always do, which is Awareness building with physicians and with patients, that has begun and is well underway. The The things that you would do as it regards your discussions with payers to demonstrate value and to create your value arguments for reimbursement and access, That has begun.

Speaker 6

We have done a tremendous amount of work as it pertains to retailers and making sure that we have And our supply chain, well oiled and the ability to be able to supply and to vaccinate or administer these products both at a physical site like a retailer or even in the case of PAXLOVID getting telehealth And sort of remote health capability setup. So all of these capabilities, many of them

Speaker 2

Thank you, Angela. Next question please.

Operator

Our next question will come from Akash Tewari with Jefferies. Your line is open.

Speaker 13

Hey, thanks so much. Can you talk about your next gen CDK4 program? You'll First in human data at ASCO, why does your team believe just hitting CDK4 allows you to improve on Ibrance's efficacy? And are there any plans to combine that drug with the Arbenus, SIRID given the DDI that's been shown up with Ibrance? And then on your next gen PAXLOVID program, can you confirm that it can achieve multiple fold over the EC90 when adjusted for plasma protein finding?

Speaker 13

And is that for timelines on that product, is the earliest possible commercial entry 2026 or is there a path for expedited approval? Thank you.

Speaker 2

Thank you very much. Michael, I think both questions can go to you.

Speaker 4

Thank you. We are very Excited about the next gen CDK4 inhibitor. It's looking really good in 2 aspects. You can dose and get activity Of the patients paying CDK4six because you deal with higher inhibition of this mechanism and you Have a better tolerability with no with much less neutropenia, less risk for infections. We expect midyear to report out, and we have an aspirational target to start Phase 3 Late this year, possibly early.

Speaker 4

At the same time, as you asked, we are now running combination studies CDK4 with CAT6, Another inhibitor that has nice single agent activity and seem to combine well, We have a second combination with CDK2, and we think this would allow us next year to pick 1 or 2 combinations To advance up the lines with more potent treatment than what's available today. Similarly, we're looking at combination with 471, as you alluded to, in order to benefit from Garvina's collaboration. NextGen Paxlovid, yes, As alluded to in my introductory remarks, we have manifold above EC90. And as you know, for pexelovid, what's unique with The drug that the manifold exposure above EC90 at this fall led to no detectable meaningful The emergence of mutations, which is always what you fear in antiviral single agent therapy. And this has been unique for Paxlovid versus other agents that have been used so far, whether antibodies or antivirals.

Speaker 4

And this is exactly the profile for the NextGen, but without DDIs that allow us to improve And also to move into other supplementary segments, we're planning soon to start a Phase II and pending data Possibly move quickly to Phase 3. And of course, we would like to see that agent introduced as soon as possible. I think We can hope to move swiftly pending the event rates of COVID that will happen in the fall and further on That influenced enrollment. So I think you said 26, and I would certainly hope we'll be ahead of that.

Speaker 2

Thank you, Michael. Next question please.

Operator

Next, we have Terence Flynn with Morgan Stanley. Your line is open.

Speaker 14

Hi, thanks so much for taking the questions. Maybe 2 for me because I'm not sure you'll be able to answer one of them. I guess Any, would love your latest thoughts on your seasonal flu mRNA vaccine, just in light of Some of the Moderna data on the B antigen side, just how should we think about your profile there? And then there's been some focus on this ADCETRIS versus Opdivo First line Hodgkin's lymphoma data that's going to be presented at ASCO. Just wondering if you can offer your high level perspective on how you see that frontline landscape evolving?

Speaker 4

Thank you. Michael, why don't you take the flu question and then the oncology question will go to William. We are very pleased what we see so far, the totality date of our flu mRNA. As you know, we have reported out very high Antibody tight is to A similar or possibly lower to the B antigen versus standard flu vaccines. But In contrast to standard flu vaccines, we have very nice T cell activity.

Speaker 4

And I think we are the only mRNA platform that has both CD4 and CD8 T cells of significance, we do think that could offer a unique profile for flu, And the tolerability with our dose is very encouraging. So the trial is in the last leg for a readout. Hopefully, we'll be able later this quarter to share an update. And we are very encouraged and we are in parallel at risk investing in combination Opportunities with this and COVID and RSV in various combination as Albert earlier alluded to.

Speaker 2

Thank you, Michael. And William, on the oncology front, how do you feel about it?

Speaker 7

Yes, sure. So again, this is a molecule for Cgen ADCETRIS, which is a CD30 ADC. It's already been approved in Hodgkin's lymphoma post transplant and then in previously untreated Hodgkin's lymphoma now with chemotherapy of ceruvicin, vinblastin and takarvizine. And it's already we anticipate actually later this year that the label will be updated for overall survival. Now the data you're talking about is from the SWOG 18/26 study with nivo AVD versus ADCETRIS AVD, and I believe they'll be presenting PFS data, But this is a curable disease, and we believe that the OS update with the ADCETRIS label will show that ADCETRIS is the favored

Operator

Our next question will come from Colin Bristow with UBS. Your line is open.

Speaker 15

Hey, good morning and thanks for taking the questions. Maybe first on Daniel Following the upcoming data, could you just walk us through what the key efficacy and safety thresholds you're looking to meet to move this forward? And sort of with regards to the threshold, how you think about them in light of that this is BID dosing? And how does that potentially impact the sort of commercial opportunity? And then just second, a quick one on your DMD Phase 3 Cipriod trial.

Speaker 15

You previously guided to completion of recruitment in April

Speaker 9

of this year. Just could you give us a

Speaker 15

quick update here and then how you view the opportunity and positioning in light of the fact that there's a potential competitor approval at the end of this month. Thank you.

Speaker 4

Michael? Yes. We are very excited about our 2, Oraglypta 1532 and thenoglypron, 1532 call, lotiglipron. And we are looking for a differentiated profile that will be a combination of Rapid onset, high control of HPA1C bringing it down And body weight loss at various doses to be very competitive and a more easily typeable drug that can optimize A preferred profile versus injectable when it comes to nausea and other well known effects. So we look forward very much to data, maybe later this year or possibly early next year and cherry pick the winner here.

Speaker 4

You also asked about DMD. Well, if there is approval, it is based just on the surrogate markers. And in this area, I think it's very important to report out data when it And we expect possibly already late this year, Alternatively, next year to have data from the 1st randomized study that if positive could show favorable Benefit for patients doing better according to the Northstar scale. So We feel really positive about our own DMD program and think the entry will be competitive with the real data that patients need.

Speaker 2

Thank you, Michael. Next question please.

Operator

Our next question will come from Jeff Leacham with Bank of America. Your line is open.

Speaker 8

Hey, guys. Good morning. Thanks so much for the question. Just have 2. The first, Angela, on the I and I landscape, Can you talk about your expectations for category growth just looking this year and next, just in light of The HUMIRA and STELARA biosimilar to come.

Speaker 8

I'm asking just in the context for the etrasimod launch as well as Sabine Quo. And then, Albert, I know this question has been asked, but in a different way though. I know you expect this year for COVID to be a down year, but When you think about your scorecard outside the U. S. With payers, as you've transitioned to commercial, What's been the initial feedback from a sort of from a price and volume perspective?

Speaker 8

Obviously, that's key to your

Speaker 2

Let me answer the COVID question and then Angela will answer the NII We expect to have commercialization In the U. S, I think likely the U. S. Government will stop purchasing outside the normal San We do not expect that to be the case in most of the countries internationally. We think that most of the countries will continue having governmental practices.

Speaker 2

And most of them, we have already long term contracts. So I don't think there will be much fluctuation over there in the price Given the longevity of the product, when the products the contracts expire, of course, the prices option will be adjusted. Now let's move to the question about I and I. And Angela, please.

Speaker 6

Sure. Well, I think to answer that question, you really have to look at each product and the specific disease that they're in. So let's start with etrasimod, which is UC. There we believe that we have an advantage from From a clinical profile perspective, we believe that we have the best in class S1P inhibitor. But there are also other great benefits Such as the fact that it can be used steroid free, that we have convenient dosing.

Speaker 6

We also offer an oral option In a world that is very prevalent with injectables, and even with all of that that's out there, we still 50% are people that have not achieved remission. So I think that the unmet need in UC is clear. And for us in particular, given the profile of etrasimod, what we think is the greatest opportunity for us is in earlier lines of treatment where there has not been as much advancement, right? There's a lot of anti TNFs, there's a lot Bissimiliars, there's JAKs, there's other mechanisms, but in earlier lines of treatment, there really is not enough. And so that's where we think we have an opportunity To meet an underserved need today, and that's where we're going to be positioning It has Ahmad.

Speaker 6

Rittler is a different story. When you look at that particular indication for alopecia, That is really an underdeveloped market. There's 3,000,000 people today. There are no great options for adults and there are absolutely no options For adolescents and children. And so the profile that we have with ritlusitinib is a it's the best in class JAK.

Speaker 6

It's the best JAK. And I think that we're going to compete well in addition to the fact that we're going to be the only JAK compared to baricitnib that has an indication So I think in this regard, because it's a new disease or a highly undeserved disease, I think education and awareness, Education at the level of the prescriber, the patient, but also with the payers is going to be key to our ability to access this market.

Speaker 2

Thank you. And of course, the seasonality is on the top line. Okay. Next question please.

Operator

Our next question comes from Trung Win with Credit Suisse. Your line is open.

Speaker 8

Hi, guys.

Speaker 16

Good morning. Trung Win from Credit Suisse. I have 2, if I So first one, a few days ago, you saw the FDA advisory committee vote on Lynparza's PROPEL trial. In that, Committee voted against the approval in all comers. So for Talzena and the Talibro 2, what's your expectations for your label here given the strength of your data and could that affect your $1,000,000,000 peak sales number that you gave in December.

Speaker 16

And then for the RSV flu coadministration study, what flu vaccine did you test that with? Is that the high dose or the low dose? And if it's the low dose, could you be approved for use with the high dose, which is more relevant today? Thanks very much.

Speaker 2

Thank you very much. William, would you like to take the Talazoparib question?

Speaker 7

Yes, sure. So thanks for the question. So as Michael said, The study showed with enzalutamide plus talaprotenTela versus Enza, we showed a 37% reduction In the radiograph of progression free survival, notably in the same presentation, we also showed a hazard ratio in the HR deficient population of 0.48, A significant P value and then the HRR non deficient unknown population, HR of 0.7 with a P value of 0.04. So we remain confident about our data in the all comer population. Obviously, we can't compare to PROPEL.

Speaker 7

Notably, in TALIPRO-two, we have prospective testing for There are deficiencies, including BRCA-one and two. I also want to point out that our control arm of Xtandi reaffirms Xtandi is a best in class NHT for the indication with a radiographic PFS of 22 months and in the Treatment on Metalla RPFS was not reached. So we expect that the HR population, which is 25%, We'll be compelling with the data and we'll also continue to present additional data in HR subpopulation at ASCO And notably, we did get priority review and we're currently in registration.

Speaker 2

Thank you, William. And Michael, with about RSV and Peru.

Speaker 4

Yes. We are extremely excited about the RSV vaccine, and we'll provide data on coadministration That vaccine with adjuvanted flu, we expect it to be available and generalized to All flu vaccines. And then when it comes to longer term, we also are already In combination study with our RSV and using our internal portfolio of COVID and mRNA flu. So we see this as developing a very strong portfolio this year with coadministration opportunities. Next year, possibly our own flu vaccine and then combination thereof.

Speaker 4

So stay tuned.

Speaker 2

Thank you, Michael. Next question,

Operator

Next question will come from Andrew Baum with Citi. Your line is open.

Speaker 16

Thank you. Just coming back to the your oral GLP-one portfolio. Lilly has called out an anticipated Weight loss that's 32 weeks from memory of around 14%, 15%. They hesitate to give baseline. Given the competitive nature the field, your late to market and the cost of running CVOT Trials in this setting, where does the relative weight loss need to be from your Phase 2 for you to advance given the benchmark that Lilly seems to be setting?

Speaker 2

That's a good question for Marco. Marco?

Speaker 4

Yes. No, we agree completely with you that we should have an ambitious profile, and we have certainly seen in patients Up to 15% weight loss depending on different dose regimens. So for VCD, That's a really good ambition to have up to 15%. And for the Aetis patients, Of course, it's about having a very strong HbA1c lowering, maybe 2% or even more. So we think it's feasible with ORELs, And we think that we'll open up a very large place, and we think that pending data readout that we may have a differentiated profile

Speaker 2

Thank you, Michael. So we are waiting to see the data, the data will speak. Let's go to the next question, please.

Operator

Next, we have Chris Schott with JPMorgan. Your line is open.

Speaker 17

Great. Thanks very much. Just two questions for me. Maybe First on the capital allocation comments, I guess the more balanced capital allocation post the SGen delevering. Just on that front, where do we need to see leverage go to before we can think about that balanced allocation?

Speaker 17

And in the meantime, what is the capacity and appetite for further deals? So can we think about kind of So can we think about kind of Biohaven size deals while you're delevering from CGen or is it really smaller And then my second question was just one on RSV market development. Just how quickly do you see this market I guess I'm just trying to get my hands around how much education this could require and do you worry at all about vaccine fatigue, I guess, Given all the boosters that this population has received during the pandemic, is that slow at all the uptake versus kind of a normalized environment? Thank you.

Speaker 2

Good questions, Chris, Dave, capital allocation.

Speaker 3

Yes. So thank you, Chris, for the question. Obviously, we have invested heavily back into our business peers all with the focus of growing our business from both from a top line perspective, but importantly from a bottom line perspective. And I think now as we begin to cycle into, I'll say, post the peak Of these reinvestment in the business, we should begin to harvest, if you will, some of the cash flows coming out of the investments that we made and capitalize, if you will, on the returns that we expect out of these investments. So having said that, we expect because of that, we should get ourselves back From a leverage perspective, obviously, we want to maintain our high investment grade rating You can access to Tier 1 commercial paper that would say that we would probably be in the low three times levered Zip code from that perspective.

Speaker 3

And then from a M and A perspective, we're still active in the M and A market. Obviously, 1st And foremost, on our objective now is to close and begin to integrate CGN, so that's priority number 1. Having said that, we will still look at the M and A marketplace, understand if there's assets that meet our criteria to supplement our business, And we could theoretically execute against that given our capital structure. Having said that, in the near term, those will probably Smaller, little tuck in type deals given our leverage ratio in the very near term.

Speaker 2

Thank you, Uday. Angela, what about RSV and the educational efforts that the market would need?

Speaker 6

Well, with all launches, education is And that's why we've already begun our unbranded disease education with physicians, laying the groundwork for the importance are vaccinating with or vaccinating for RSV. But of course, with all launches and with all new diseases and education However, I think that the biggest advantage here is in the synergies of RSV together with our other adult vaccines, right? We have Have not 20 adults, we've had COVID. We all of these vaccines follow a very similar pattern in terms of the Commercial needs that they have. And I think that we have the opportunity to quickly and seamlessly bring into our portfolio and use the very same approaches and mechanisms and the same conversations that were whether it's with a retailer, whether it was Hey, you're aware that it's with our points of vaccinations to bring RSV on.

Speaker 6

So actually, I think that this is a very exciting time and we feel very confident about the ability to seamlessly introduce RSV as Another vaccine in our respiratory portfolio.

Speaker 2

Thank you. Next question please.

Operator

Our next Question comes from David Risinger with SVB Securities. Your line is open.

Speaker 17

Yes, thanks very much. First, could you discuss the PAXLOVID private market sales potential in China After March 31st, that isn't included in your PAXLOVID guidance for the year? And also, could you comment on the late stage competitive threats from Sanofi's 21 valent pneumococcal conjugate vaccine in adults and infants and Merck's 21 Valens in adults. Thank you.

Speaker 2

Thank you. Angela,

Speaker 6

So off to April, we continue So if you're a private patient, you can get it. If you're a public patient, you can get it. You just need to be able to pay out of pocket for it. And we intend to continue to work with the public and with the Chinese government to ensure its

Speaker 2

We can't give now guidance for a particular product in a particular country. So but Hans, I'm going to explain the dynamics. Michael, very quickly on the competition of pneumococcal. Yes.

Speaker 4

I mean, we are extremely excited about the PCV20 recent pediatric approval with a stellar Label reflecting the strengths of our data. We monitor carefully competitor activity, as you alluded to, and are planning ourselves to enter next year further expanded PCV vaccines followed by additional expansion a few years later, including optimization of the conjugation procedures, including different carriers and possibly for the adult also adjuvants that we think could be useful. So this is a market where we have been the leaders. We have a unique platform, and we monitor and I feel very confident that we are going to have a bright future, although you mentioned competitor, which is the nature of markets that are Coming, of course, more saturated like the adult market, but there we also hope to benefit from our broader portfolio

Speaker 2

Our Next question please.

Operator

Our next question will come from Steve Scala with Cowen. Your line is open.

Speaker 8

Thank you. I have

Speaker 18

two follow ups. First on pneumococcal vaccine. So Pfizer just started a study of a vaccine including a new ingredient. Is the new ingredient in adjuvant? Is it more valence or is it something else?

Speaker 18

And then a follow-up on the Opdivo This is ADCETRIS study. Can you say whether you were aware of the data at the time of announcing the CGen acquisition? And why should we not view this as a significant risk? Thank you.

Speaker 2

Thank you. Michael, what is the secret ingredient?

Speaker 4

The secret sauce in this particular trial is a new adjuvant that we think Could play a potential nice role in the PCB adult market as you go to increasing Valency in this space. As I said before, in parallel, we are working on looking at different carriers, And we'll shortly reveal for next year start of A broader expanded PCV vaccine that will incorporate all these learnings, so stay tuned.

Speaker 2

And William, on the again, on the OPDIVO

Speaker 7

Yes, sure. So again, on the OPDIVO study, that SWOG study has been ongoing for a while. We were not aware of the data that's going to be presented at ASCO. I would reiterate again, it's early PFS data from what we see and the most important measure of activity in Hodgkin's lymphoma would be overall And again, we expect CGen to get an updated label showing overall survival benefit in first

Operator

Our next question will come from Kerry Holford with Berenberg. Your line is

Speaker 11

open. Thank you very much. Two questions on the RSV vaccine, please.

Operator

I see

Speaker 11

on the older adult vaccine. On Slide 22, you note emerging mid second season data Supporting durable vaccine efficacy. I wonder if you can elaborate a little more here. What data do you have in hand today? And you want to have to get that 2nd season of data in front of the FDA approval.

Speaker 11

And assuming you do see protection Into that second season, how might that influence your pricing in the U. S? And secondly, on the maternal vaccine, You have had launch scheduled in Q4 on Slide 6, but the footnote here implies And that may not happen until Q1 of next year. So could you just provide more clarity on when you could launch that maternal vaccine? Thanks, Steve.

Speaker 2

Yes. Michael, what about the RSV vaccine?

Speaker 4

Yes. We were very pleased to get Our first data chunk from 2nd season, mid season data for older adult, And it clearly shows that the revised data that we shared, for example, we shared High 80% reduction in low respiratory tract infections with Three symptoms we see also on this and similar on other endpoints, a very robust, Very meaningful protection also in the 2nd season. Now as you know, at the same time, we are preparing for the future combination vaccines, And we think in general that you will see an evolution in the adult market with simplified vaccination schedule, Annual revaccination of COVID flu RSV. For those that for some reason missed a vaccination, We think the 2nd season data will be very good. On the maternal, we are preparing for an advisory committee.

Speaker 4

We think we have great data. We are the only one that have been able to conclude a maternal vaccination. We're the only one that we're able to construct an RSV vaccine without using an adjuvant, and we think it's a differentiated product. And I assume we'll be soon after a potential approval, AC and opportunity for Angela To launch to a very eagerly awaiting community of increasingly attentive pregnant women And maternal clinics to protect the newborn.

Speaker 2

Thank you, Mike. As we said in our as we have it in our slide, we expect to be approved In this year, in the last quarter, so good launch. We expect the publication of the MMWR likely to happen Beginning of the next year, so that plays also a key role in the uptake of the vaccine. But keep in mind, the launch of vaccine starts before the approval, right? There are a lot of educational efforts and there are a lot of investments that we are doing in that field.

Speaker 2

So in that aspect, the launch already has started from our side Next question please.

Operator

Our next question will come from Carter Gould with Barclays. Your line is open.

Speaker 19

Great. Thank you for taking the questions. I guess first on the decision to establish a new operating segment and specifically launch this Pfizer Ignite offering, can you talk about what drove that and if there's sort of like an aspirational target and how meaningful of a driver that could be? And then secondly, sort of on the Decision to divest Bavencio, did that reflect a sort of a signal you got from FTC or proactive move In your mind, are there other factors we should think about and the fact that we haven't seen other divestments to that, should that reinforce our confidence that you

Speaker 2

On the Bavencio question, the discussions to Return of the rights for royalties, in exchange for royalties, had started well before Cision. So it has nothing to do with The acquisition of Cision was something that was ongoing between us and Exelonio for the benefit of the product and for simplicity reasons. Just was completed after we announced the deal short draft, but it had started way, way before. Amir, would you like also to explain the Ignite business?

Speaker 20

Yes. Pardha, thanks for the question. I think you've seen us collaborate with the biotech ecosystem in lots of different ways and Pfizer Ignite is another way in which we can effectively do that. Frankly, there's a lot of interest and demand on the part of particularly BioThex for working with us to access some of our And we think IGNITE gives us a platform to do that, to work with these Companies get closer to the science, which over time also then improves our ability to access that science and make Determinations about what we would like to bring in house. So we think this is an excellent way for us to continue to collaborate with the biotech ecosystem and add to our growing and

Operator

Our next question will come from Chris Shibutani with Goldman Sachs. Your line is open.

Speaker 10

Thank you. On paxlovid,

Speaker 21

The U. S. Commercial opportunity, can you update us on any framing of what you're thinking in terms of pricing and when we will know that? And in particular, with the commercial availability, are you anticipating much in the way of Sort of payer engagements in terms of thinking about how that process will unfold utilization management wise. And then on the business development front, if we go to the $30,000,000,000 that you had outlined for a while now And think about what is remaining from that unadjusted target in terms of 2,030 revenues, let's say approximately $5,000,000,000 is left.

Speaker 21

As we're thinking about how you guys are contemplating what areas to go into in terms of verticals or therapeutic areas or modalities, Would it be fair to expect that at this stage, a consideration might be to minimize the extent that you would have To rebuild or sort of refurbish on the SI and A front given your margin objectives longer term? Thank you.

Speaker 2

Thank you. Angela, on paxlovid, the commercialization.

Speaker 6

Sure. So hi, Chris. Yes, we're preparing for For launch now, but as we've said, we've shared before, the date of launch and exactly how that's going to happen is still very much Subject to our discussions with the U. S. Government.

Speaker 6

So we're going to align with guidance from them in terms of how that's going to happen. Of course, in the meantime, we are preparing for the commercialization of PAXLOVID and payer discussions around the world is critical. So those have begun. Obviously, it's too early for me to share the price of Paxlovid, but suffice to say that the price ranges that we have brought to our payers Together with the value arguments that we have been able to develop through robust real world evidence from the The number of hospitalizations, the number of deaths that we've been able to avert through the treatment with PAXLOVID is very much supportive of the pricing ranges that we're talking about. So I think very soon we'll be able to share more.

Speaker 2

And Amir, about what is the profile

Speaker 20

Yes. Chris, as you mentioned, we have a goal of $25,000,000,000 in risk adjusted revenue by 2,030, and I should remind everyone that is a 2,030 goal. We, with the deals that we've done, have a remaining balance of less than 5,000,000,000 And I think our strategy to pursue that is going to be consistent with what we have employed to date. 1st and foremost, It's going to be about compelling science that we can add value to. That's also going to contribute growth in the 'twenty five to 'thirty period and take lots of things into consideration, Including the impact on the P and L profile, so that will continue to be our focus and we'll continue to be disciplined in the opportunities that we look for.

Speaker 20

And as Dave mentioned earlier, Our priority right now is ensuring that we close out and successfully integrate the CGM transaction As well as drive value from the other deals that we've done, and we'll continue to actively look for opportunities.

Speaker 2

Thank you. And we are a bit out of time. So last question, please.

Operator

Our last question will come from Tim Anderson with Wolfe Research. Your line is open.

Speaker 22

Thank you. A couple of questions. The first is, how much of your future COVID vaccine revenue forecast Tied to the ability to have a combination product, if something like mRNA flu ends up not being viable And it knocked out a flu COVID combo. Does that impact your anticipated uptake In 2025 beyond or can you get to those longer term guidance levels regardless of whether you have any combos or not? And then last question, Albert, I'm guessing there's some frustration among management with what the stock has been doing, a tough 2023.

Speaker 22

2022 wasn't a great year. This is despite Pfizer helping lead the world out of the pandemic, which was a Remarkable accomplishment. Even today, the consensus stock is down a little bit. So as you talk to analysts and investors, What are you hearing are the biggest concerns that you think could explain this and what do you think analysts and investors are missing or misunderstanding?

Speaker 2

Thank you. Thank you, Tim. Let me start with the first one. We do expect that if There are successful combinations with flu that would drive utilization of the COVID vaccine much higher. As you know, in our estimations, we Expect, for example, in the U.

Speaker 2

S, around 24%, 25% in the next few years of COVID vaccine, the flu, Right now, utilization around 50. So there is a big gap. So that's why we believe that the combination between flu and COVID Will arise also to the COVID and eventually, potentially, we can call it the way up to the same utilization Like flu, particularly given that there are no co pays in approved and recommended vaccines. Now as regards to the frustration For the 2023, clearly, I believe that the stock price right now does not reflect the value that Pfizer has. The fact that we are so proud because of our contribution in saving the world, I don't think that we expect Stock price increases because of that.

Speaker 2

We did it because it was the right thing to do, and I think we are very, very proud of that. We To see stock price increases as we are executing our plan, which is to create sustainable top line revenue growth That will allow us to leverage the bottom line that will grow faster than the top line. I think we articulated a plan about that, and that plan was to invest in acquiring Good scientific substrate that will allow us to launch products that will give us EUR 25,000,000,000 revenues by year 2,030, And we have done tremendous progress on that by having already, according to our calculations, €20,000,000,000 of that €1,000,000,000 We are also invested in R and D in the last In the past few years, and we have now an unprecedented launch of new products. And I think the Street is expecting to see how those launches will evolve. Clearly, I think there is overhand Over the COVID revenues, there is an uncertainty if the COVID revenues will materialize.

Speaker 2

We don't have Presidents to so that we know how to predict it well. So our predictions are based on And based on trends that we are testing with market people. So I Seems that from my perspective, what I said to the Sarfolagus, we are very committed to creating value for the Sarfolagus. We know that everything we do, We do it with our money. It's not our money.

Speaker 2

And we want to be very good stewards of us. So it's not enough to save the world. I think also We need to increase the supply and we are highly committed to do that by explaining better the strategy and more importantly, executing on it. So With that, I think you gave me also, team, a good segue to close. In summary, we believe That was a solid quarter.

Speaker 2

We delivered on our commitments. We exceeded actual expectations, we know from this And we will continue doing so with Compass, but We will create serious value for patients, and that we are certain will translate into value for We are executing our plan, and we remain very committed to doing that. Thank you very much to all and have a nice day.

Operator

Thank you, ladies and gentlemen. This does conclude today's teleconference and we appreciate your participation. You may disconnect at any time and have a wonderful day.

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Pfizer Q1 2023
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