Pfizer Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
October 29, 2024

There are 18 speakers on the call.

Operator

Good day, everyone, and welcome to Pfizer's Third Quarter 2024 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca De Martino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.

Speaker 1

Good morning, and welcome to Pfizer's earnings call. I'm Francesca Di Martino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast at pfizer.com. Earlier this morning, we released our results for the Q3 of 2024 via a press release that is available on our website atpfizer.com.

Speaker 1

I am joined today by Doctor. Albert Bourla, our Chairman and CEO and Dave Denton, our CFO. Albert and Dave have some prepared remarks and we will then open the call for questions. Members of our leadership team will be available for the Q and A session, including Doctor. Andrew Baum, who recently joined Pfizer as EVP and Chief Strategy and Innovation Officer.

Speaker 1

Before we get started, I want to remind you that we will be making forward looking statements and discussing certain non GAAP financial measures. I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning and the disclosures in our SEC filings, which are all available on the IR website on fiserv.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.

Speaker 2

Thank you, Francesca. Good morning, everyone. Thank you for joining us today. Our team continues to execute and we are pleased to report another quarter of strong performance. We are guided by our purpose of delivering breakthroughs that change patients' lives and I'm proud that we have reached more than 270,000,000 patients with our medicines and vaccines through the 1st 9 months of 2024.

Speaker 2

The focus on execution excellence is starting to deliver results with market share gains in the U. S. And international as well as robust growth in revenues and EPS. As a result, we are raising guidance ranges and for our full year 2024 total revenues and adjusted diluted earnings per share. In January, we presented the 5 key priorities that would guide Pfizer during our year of execution.

Speaker 2

Today, you will hear how we advanced our business in the 3rd quarter with each of these strategic priorities. I will focus on highlights showing our progress with the first three. Dave will discuss our continued work to reduce our cost base, expand our margins and strategically deploy our capital. Then we will review our financial performance during the quarter and explain why we believe we are well positioned to deliver on our financial commitments and create long term value for shareholders and then we will take questions. So with that, I'll turn to our performance against our priorities during the quarter.

Speaker 2

Stated simply, oncology is having a great year and delivered another quarter of strong performance with 31% year over year performance growth resulting from solid demand across our product portfolio that includes legacy Cision and legacy Pfizer products. We set a goal to achieve world class oncology leaders. In the U. S, we are already the 3rd largest biopharma company in oncology by Revlon through the first half of twenty twenty four, and we are proud of the progress we are making toward our goal. Demand continued to increase for Xtandi, the market leader for 4 types of advanced prostate cancer grew 28% year over year.

Speaker 2

TALZENNA grew by 77% in the quarter versus the same quarter from a year ago. We are encouraged by the opportunity to further advance the prostate cancer treatment landscape based on the exciting overall survival data we announced earlier this month from the Phase III TALAPRO study. In the study, Talzena in combination with Xtendi demonstrated statistically significant overall survival benefit in patients with metastatic castration resistant prostate cancer, becoming the 1st and only such combination to do so. Driving scientific breakthroughs in genitatory cancers is one of the key areas of focus in oncology. The TALA Prog II results show how we continue innovating to improve survival for men with prostate cancer, which is the 2nd most common cancer in men and the 5th most common cause of cancer death among men worldwide.

Speaker 2

We saw continued momentum during the quarter with the ongoing launch of PadCEN with pembrolizumab for patients with advanced metastatic bladder cancer, regardless of their eligibility to receive cisplatin based chemotherapy. This combination has quickly become the most prescribed first line treatment in the U. S. For locally advanced metastatic urothelial cancer. In thoracic cancer, we achieved 31% of the regional growth this quarter with Labrena, a treatment for adults with ALK positive metastatic non cell lung cancer.

Speaker 2

Following the release of our 5 years of ground data during the ASCO annual meeting, we are observing an acceleration of first line new patient starts around the world and in particular, in our key markets of the U. S, China, Germany and France. Our BRAFTOVI and MEKTOVI combination also achieved strong year over year growth in the Q3 of 32%, primarily driven by growth in the metastatic non small cell cancer indication. And we continue to be pleased by strong performance with the launch of ELEXVI, which had about 80% sequential revenue growth over the Q2 of 2024. In the U.

Speaker 2

S, we have more than doubled our new patient starts since January. In Japan, we were able to catch up with competition and launch as the first to market PCMA bispecific, helping to address an unmet medical need for patients with triple class exposed multiple myeloma. We believe Eurexivio has the potential to be a transformative treatment option for people with multiple myeloma, and we are continuing to advance development with 4 ongoing registrational studies in earlier lines of therapy, but if positive and approved, could support serving a way more expanded patient population. Now, I will turn to some select highlights of how we continue strategically advancing our pipeline. We are prioritizing opportunities where we have scientific leadership and deep capabilities to address significant unmet patient needs.

Speaker 2

Earlier, I spoke to the strength of our market in oncology medicines. Our pipeline, however, is what excites us the most. Lung cancer is the number one cause of cancer related death around the world. At the recent ESMA Congress, we saw long term follow-up results from FARAUS trial evaluating BRAFTOVI and MEKTOVI in patients with BRAF V600E mutant metastatic non small cell lung cancer, which demonstrated compelling efficacy for patients. We are also rapidly advancing 2 next generation ADC candidates with the potential to make significant impact on the more than 300,000 patients with non small cell lung cancer in the U.

Speaker 2

S. The first is Siguatadu Vedoti, which is now in Phase III and we are planning additional pivotal trials in the coming months. The other one is a PD L1 AAV ADC. We are equally encouraged by the updated Phase 1 data we presented at Tecmo for this ADC and we are planning registration enabling trials in 2025. Our genituary pipeline is expanding.

Speaker 2

We are starting another novel, another novel ADC, fisitamabbedotin in 2 ongoing registration intent trials in urothelial cancer. And mevrometostat, our novel EZH2 inhibitor is another example of the progress we are making throughout our pipeline. This has been starting as a new potential treatment for men who have metastatic castration resistant prostate cancer and we are enrolling currently patients in 2 Phase III studies. Finally, to build on the foundation for Ibrance, we are making progress with development of 2 candidates we believe can replace the current backbones of ER positive HER2 negative breast cancer. Atilmociclib, our potential 1st in class CDK4 inhibitor is enrolling a second line Phase III trial and we expect to start a first line Phase III study by early 2025.

Speaker 2

And we expect the 1st Phase III data in the coming months for the TEGSTRAN and estrogen receptor degrader that we are co developing right now with our wins. Our 4th generation PCV candidate now in Phase II adults in pediatrics covers 25 serotypes, including improved immunogenicity for serotype 3, very important, which is one of the largest remaining contributors of disease. We are focused on building on our leadership in the industry by continuing to expand balance sheet with our 5th generation candidate, which is in preclinical development that covers over 30 serotypes. In the last several months, we have advanced a potential new vaccine against C type, which is considered an urgent public health threat that lacks any approved vaccines. Leveraging experience from our previous CTEQ program, we have developed a new formulation for a 2nd generation candidate.

Speaker 2

After encouraging Phase I data with this new formulation, we have advanced our Phase II study already. We are also working to support significant need for about 90,000,000 Americans and 200,000,000 Europeans in areas with high incidence of Lyme disease. VLA-fifteen is a vaccine candidate we are co developing that is intended to protect against the 6 most prevalent serotypes in North America and Europe. A Phase III trial is underway and pending positive data and regulatory approval, VLA-fifteen would become the only vaccine available to help prevent the acute severe and long term health consequences of Lyme disease globally. PAXLOVID is the standard of care COVID-nineteen oral treatment for those at high risk of progressing to severe disease.

Speaker 2

We believe, however, that is an opportunity to expand both our therapeutic impact and market position where our next generation oral antiviral candidate, Ibuzartrelbi. In a Phase II study, we have demonstrated robust antiviral activity at all doses and without the need for returnable boosting. We have addressed the drug drug interactions and the metallic taste associated with Paxlov. We expect to start a Phase III study in the coming months. We are also moving forward with our Phase III program in non segmental vitiligo with brittlesiclinin, a candidate with a differentiated JAKTECH mechanism developed in house at Pfizer that has the potential to be an expansion of indications for LIT fluoro, which is currently approved in severe alopecia areata.

Speaker 2

Vitiligo, like alopecia areata, is an autoimmune disease with high unmet need. It is the leading cause for skin, depigmentation and affects nearly 3,000,000 patients in the U. S. Alone. We are also enthusiastic about our 2 1st in class tri specific antibodies with early data demonstrating XLM3 in-one patterns.

Speaker 2

We believe this program has the potential to deliver improved efficacy in atopic dermatitis with an ongoing Phase II study evaluating safety and efficacy. We had the Phase II readout of ponsecloma, which is another in house discovered and developed assets. We are encouraged by the potential for a breakthrough for patients with cachexia, who lack treatment options for this life threatening wasting condition that currently has no FDA approved treatments. The Phase II study met its primary endpoint of change from baseline in body weight compared to placebo across all doses tested. And at the highest dose evaluated, saw improvements for baseline in appetite, cachexia symptoms, physical activity and muscle mass.

Speaker 2

Based on these positive results, we expect to advance to a registration enabling study next year. Our Phase II study in patients with heart failure related cachexia is ongoing. We remain on track with our dose optimization studies for Danublipper, our oral GLP-one receptor agonist candidate and look forward to discussing more about this in early 2025. In our broader obesity portfolio, we continue to advance our early stage candidates, including our oral small molecule GIPR antagonist, which is advancing to Phase II in 2024 this year, and an additional once daily oral GLP-one receptor agonist in Phase I. The highlights I've mentioned today across important therapeutic areas show how we have made meaningful advancements with our pipeline.

Speaker 2

As we announced earlier this year, Doctor. Michael Dostin, Pfizer's Chief Scientific Officer, will depart from Pfizer after 15 years of leading Pfizer's research efforts. Our progress for selecting a successor is now quite advanced and we look forward to announcing an update soon. Now I will turn to our commercial performance. Another one of our strategic priorities is maximizing the performance of our new products.

Speaker 2

I'm pleased that the decisive actions we took to enhance our commercial organization at the beginning of the year are yielding satisfactory results. With Nortek, we saw 28% total prescription growth and continued leadership in the Aurum ZcRP class. Importantly, 85% of primary care clinicians writing CGRP prescriptions for the first time, SUS Nurtec, 85%. This shows the progress we are making in primary care as well as our work with payers to remove barriers for timely patient access to treatment. Among our vaccines, we are very pleased with our performance since the launch of PREVENT twenty, which has already achieved 83% market share in pediatric and 97% in adults.

Speaker 2

With last week's recommendation by the Advisory Committee on Immunization Practices to expand adult pneumococcal vaccination to include all adults aged 50 and older, we believe PREV-twenty is well positioned to serve an expanded population in the United States. Outside of the U. S, we are predominantly serving the pediatric market and following the recent Q1 approval in Japan and the EU, we are gaining vaccine technical committee recommendations and several market introductions. With Abrasmo, we continued improving our U. S.

Speaker 2

Market share position with strong commercial execution. Our market share of sales to retailers and clinics out of wholesalers has exceeded 50% for the quarter. And our market share of shops in arms in the retail setting has increased for 9 consecutive weeks through mid October, currently reaching 43%. Last week's FDA approval for Abrasmal for patients 18 through 59 who are at increased risk of low respiratory tract disease caused by RSV could help us serve an expanded population over time. With the rise in COVID-nineteen infection in the summer and early fall, we have responded to increased demand for PAXLOVID as we launched in the U.

Speaker 2

S. Commercial market at the beginning of the year. Our better than expected growth during the quarter for PAXLOVID reflects higher inflection rates and the strong commercial execution of our team. Our ability to execute effectively includes improving patient access, raising awareness of this treatment option, expanding use of alternative sites of care and also continuing to educate healthcare providers. The demand for paxlovid seems to have stabilized.

Speaker 2

In the slide, you can see the total number of patients treated with paxlovid in 'twenty four, which is very similar to the same period in 'twenty three. It appears to be closely correlated with each weight of COVID-nineteen, but also appear to have very similar pattern in 'twenty three and 'twenty four. The 63% operational growth in the Q3 of our VintraCel family of products is a direct result of our progress in expanding the healthcare provider base and supporting clinicians in identifying more patients who can benefit from this therapy, as well as our work to improve patient access and adherence to therapy. Internationally, Vindakil is reimbursed in 44 markets right now and more are expected next year. While diagnostic rates vary across markets, the unmet medical need remains significant as illustrated by the 10% increase of patients on treatment in the Q3 versus the Q2 of 2024 in the U.

Speaker 2

S. We were pleased by the 74% quarterly operational growth and continued progress with expanding access with SYBINKO, a treatment for patients 12 and up with moderate to severe eczema who didn't respond to other treatments and 27% growth in the U. S. From the 2nd to 3rd quarters of 2024. With Litfula, the 1st and only FDA approved prescription pill for both adults and adolescents as young as 12 with severe alopecia areata.

Speaker 2

What now and I will turn it over to Dave.

Speaker 3

Thank you, Albert, and good morning, everyone. I will build on Albert's comments by reinforcing that we are very pleased with the financial results for the Q3 of 2024. These results demonstrate that our focus and our execution against our 5 strategic priorities are driving positive patient outcomes and continued financial and operational strength. In addition to our strong top line performance, our cost reduction programs are creating a more efficient organization, setting the stage for increased capital returns and supporting our commitment to both maintaining and growing our dividend, all while enhancing shareholder value. This morning, I will briefly review our Q3 P and L performance.

Speaker 3

I'll highlight our capital allocation priorities and touch upon our full year 2024 financial guidance. Additionally, as we approach the end of the year, I will also share several modeling considerations as we begin to plan for 2025. Turning first to the Q3 performance versus the same period of last year, let me walk down the P and L. Total company revenues were $17,700,000,000 representing an impressive 32% operational growth. Our COVID-nineteen products were significant contributors with PAXLOVID generating $2,700,000,000 in revenue.

Speaker 3

This included $442,000,000 related to delivering 1,000,000 treatment courses to the U. S. Government strategic national stockpile. Commerdi, our COVID-nineteen vaccine contributed $1,400,000,000 in revenue. Our COVID-nineteen products were not the only drivers during the quarter.

Speaker 3

Our non COVID products also exhibited robust performance with revenues of $13,600,000,000 reflecting 14% operational year over year growth. This performance shows that our 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're further optimizing our marketing resources into key priority areas. We saw strong contribution from our recently acquired Seagen products, including Padsev, which continues its momentum following the results of the EB302 study last year.

Speaker 3

Other key growth drivers included Vindical, Eliquis, Xandy and Nurtec, partially offset by declines in Xeljanz and Ibrance. Adjusted gross margin for the 3rd quarter is approximately 72%, primarily the result of a net unfavorable mix related to our COVID-nineteen products, primarily due to the COVID commodity profit split with BioNTech and applicable royalty expenses as well as a slight dampening due to the associated costs incurred with the withdrawal of Oxbridge Breda. All of this was partially offset by our ongoing focus on cost management across our manufacturing network. We continue to expect gross margins to be in the mid-70s for the full year and as previously communicated, long term improvements in gross margins will remain a key focus for the company over the next several years. We expect to achieve savings from Phase 1 of our manufacturing optimization program beginning in 2025 and deliver approximately $1,500,000,000 in savings for the first phase by the end of 2027.

Speaker 3

In parallel, we continue to evaluate our strategy for both Phase 2 and Phase 3, which will focus on network structure and product portfolio respectively, and we expect to have more information to share on those components of the program once they become available. Total adjusted operating expenses decreased 2% operationally to $5,800,000,000 and I will note that this amount includes spending acquired via our Cision transaction. And looking at the components, adjusted SI and A expenses increased 1% operationally, driven primarily by marketing and promotional expenses for recently launched and acquired products, partially offset by a reduction in the U. S. Healthcare reform fees.

Speaker 3

Adjusted R and D expenses decreased 4% operationally, driven primarily by lower spending on certain vaccine programs as well as our cost realignment program, partially offset by an increase in spending related to the Seagen acquisition. We continue to be disciplined with our operational expense management and remain on track to deliver at least $4,000,000,000 in net cost savings from our cost realignment program by year end. Q3 reported diluted earnings per share was $0.78

Speaker 2

for

Speaker 3

the quarter and our adjusted diluted earnings per share was $1.06 benefiting from our top line performance and efficient operating structure as well as a favorable tax rate driven primarily by jurisdictional mix. As mentioned last quarter, unique one time items included in our GAAP results and excluded from our adjusted results this quarter include a $420,000,000 charge related to the expected sale of 1 of our facilities resulting from the discontinuation of our DMD program earlier this year. Now let me quickly touch upon our capital allocation strategy, which is designed to enhance long term shareholder value. Our strategy consists of both maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return and making value enhancing share repurchases after delivering our balance sheet. In the 1st 9 months of 'twenty four, we returned $7,100,000,000 to shareholders via our quarterly dividend, invested $7,800,000,000 in internal R and D and as we expected completed business development activity was minimal.

Speaker 3

Our commitment to delevering our capital structure to a gross leverage target of 3.25x remains a key priority. In support of that goal, year to date, we have delevered by approximately $4,400,000,000 paying down approximately $2,300,000,000 in maturing debt and approximately $2,100,000,000 in commercial paper. And in October, we monetized another tranche of our Halion shares, which for reporting purposes is a Q4 event. We received approximately $3,500,000,000 in net cash proceeds and our ownership at Halion was reduced from approximately 23% to approximately 15%. Year to date, we have received approximately $6,900,000,000 of net cash proceeds from the sale of our Halion shares.

Speaker 3

We intend to monetize our remaining Halion investment in a prudent fashion considering our cash flow requirements and future market conditions. Overall, in Q3, we generated robust operating cash flows, which combined with the Halion net sales proceeds of approximately $3,500,000,000 resulting in a significant free cash flow generation as we enter the Q4. Our objective remains to delever and return to a more balanced allocation of capital between reinvestment and direct return to shareholders over time. Now let me spend just a few minutes on our outlook for the full year. Based on our focused execution and strong year to date results, we are raising our full year 'twenty four revenue guidance by $1,500,000,000 and our adjusted diluted earnings per share by $0.30 We now expect revenues in the range of $61,000,000,000 to $64,000,000,000 and operational revenue growth excluding COVID-nineteen products is unchanged at 9% to 11% and takes into consideration reduction of sales associated with OXBryta.

Speaker 3

COVID-nineteen product revenues are now expected to be $10,500,000,000 $5,000,000,000 for Comirnaty and $5,500,000,000 for PAXLOVID. Our guidance for adjusted SI and A, adjusted R and D and our effective tax rate on adjusted income remains unchanged. And lastly, we expect adjusted diluted earnings per share of $2.75 to $2.95 primarily reflecting the top line increase and absorbing the UxBrayda impact. As a reminder, our EPS guidance includes an anticipated $0.40 of earnings dilution from the Seagen acquisition largely due to financing costs. Now as we begin to look towards next year, I want to touch on a few modeling considerations.

Speaker 3

As we've previously discussed, there are several non recurring items included in our 2024 results. 1st, during 2024, Paxlovid revenue included a U. S. Government revenue credit true up and the fulfillment of our obligation to the U. S.

Speaker 3

National Strategic Stockpile. 2nd, given our ownership of Halion is now below 20%, we will no longer record equity income from that investment in our adjusted earnings beginning in 2025. And finally, our 2024 tax rate on adjusted income was favorably impacted by timing with respect to the impact of Pillar 2 and to a lesser extent, audit settlements. All in, these items are expected to have a favorable impact on full year 2024 adjusted diluted earnings per share of approximately $0.30 In closing, I'm extremely pleased with our Q3 2024 results and our overall performance this year. Our team remains dedicated to strong operational execution and we believe our cost saving programs will drive enhanced operating leverage over time that will enable us to consistently deliver on our financial commitments to our shareholders.

Speaker 3

We are committed to driving long term value creation through scientific leadership, portfolio strength and productivity across all aspects of our business. And with that, I'll now turn it back over to Albert.

Speaker 2

Thanks, Dave. It's time for the Q and A. But before we take our first question, I want to briefly address a topic that I know is in the minds of many. We seek to be attentive to our shareholders and are always open to hearing their perspective. We had a meeting with Starboard Value 2 weeks ago.

Speaker 2

I was there with our Lead Director and our Head of Investor Relations. The meeting was constructive and cordial. They presented the same deck they made public last week. And given the proximity to our quarterly earnings day, we were mainly in listening mode. While we agree with some of the points they raised, we have vastly different views on many others.

Speaker 2

For example, they express dissatisfaction with our total shareholder return. We are not satisfied either, though we believe we are executing on the best path forward to increase shareholder value. On the other hand, they challenged our capital deployment for business development. We believe that our deals will produce significant shareholder returns and some of them like Cision or BioNTech have been transformational for Pfizer. The important thing is what we do to improve performance.

Speaker 2

In January, we presented a 5 point plan aiming to create shareholder value but has guided our decision making all year long. We remain focused on executing this plan and on delivering for our commitments, including driving long term shareholder value. We will engage productively with our shareholders, including Starboard and will consider all good ideas that are offered. And with that, operator, please assemble the queue to discuss our Q3 performance and pipeline.

Operator

Thank We'll take our first question from Chris Shibutani with Goldman Sachs. Your line is open.

Speaker 4

Good morning and thank you very much. I wanted to ask questions about the pipeline in particular with regard to obesity where we appreciate the additional insights into what you have in the clinic. Albert, you previously said that you believe that Pfizer could be the number 2 company on the market with an oral that would imply that Danugliplopron is the lead asset there. However, you do have 2 additional assets that we find intriguing at a GLP-one oral that is in Phase 1 that is once a day, but would clearly be behind. And then now an oral GIP antagonist, which I think is a source of debate.

Speaker 4

Can you frame what your strategy is, how important it is to be second to market versus perhaps having a differentiated approach with these two assets? Thank you.

Speaker 2

Look, I will ask Michael to comment because there is a lot of activities going on right now on that. But my general comment is that, as I have said, if Daniel moves fast based on what we know right now, we should be the 2nd oral into the market, provided that the first one will be successful and the other ones will not come before us. But so far, this is what situation looks like. The market is very, very large and there is a significant need for oral solution. We know that.

Speaker 2

So there is no doubt that if successful, we will have our decent market share over there. But the important thing it is that obesity market is developing, let's say, nicely also in terms of science and we are exploring several other opportunities right now. The 2 that we had mentioned in the clinic, Michael can speak a little bit more, both about the TANU and the other 2. Mike?

Speaker 5

Thank you, Albert. Yes, as you heard in Albert's remarks before the meeting, we continue to execute on our Danugliplopron plan, which includes once a day profile with a modified release type of system. And we do believe that once a day with modified release could have some really special features. And bringing that as a second oral would help really to have a strong foot into this market. In the same way, we have seen injectable being split between 2 different products.

Speaker 5

I don't expect that the various oral will in the end differ that much in the GLP-one class. So that's why we were keen also to move a gipper, which could add better probability and more efficacy. And we're right now initiating Phase II studies on the backbone of GLP-eighteen. And these are our 2 more advanced bets. Plus, we always like to bring in this huge segment in drugs and have more options as we advance.

Speaker 5

And you have heard there are so many applications for GLIF-1s and that's why we have a second once a day agent.

Speaker 2

Thank you, Michael. Next question, please.

Operator

Thank you. We'll take our next question from Kripa Devankaranda with Truist. Your line is open.

Speaker 6

Hey, guys. Thank you so much for taking my question. I have actually a question on your recent data from flansegirumab program in KAKXEA. You reported positive Phase 2 data. And just broadly speaking, this program has been previously highlighted as well.

Speaker 6

For the registrational trial, would a trial that replicates your Phase 2 in a larger group of patients be sufficient? Or would you need to show outcomes like survival? And also, as we await details of the registrational trial,

Speaker 2

can

Speaker 6

you help us understand how big of an opportunity you see for this drug? Thank you so much.

Speaker 2

Let's start with Michael, a little bit on the science and then maybe Andrew can speak about the potential market size of the CACX.

Speaker 5

I think in general for cancer agents, and this is more in the supportive care, we're addressing segments of unmet patient needs, which relates to be able to regain performance status with better body weight, have higher physical activity, and be able to go through more treatment cycles, which should often translate to better long term survival. As you know, that is always dependent on how patients cross over to different trials. So, I do think initial registration will come from similar endpoint as in our Phase II studies, but we clearly aim to translate that better patient performance to other outcomes that are more harder endpoint going through more treatment cycles and treatment that correlate with better cancer outcome over time. And this is will be shown in multiple cancer types. So we do think similar to other products that earlier have been heavily used in supportive cancer care, this could be a very large opportunity.

Speaker 5

And in addition to that, we are running a heart failure studies and looking at a third opportunity, also large chronic disease. And with that, Andrew, some comments on the potential of this molecule?

Speaker 7

Yeah. Hello, Grupo. Building on Michael's comments, look, KeXty has a massive unmet medical need. It's 50% to 80% of patients with oncology suffer from it, particularly, as you know, within pancreatic and non small cell lung cancer. It's probably about 20% to 30% in heart failure and COPD.

Speaker 7

The size of the market really depends on whether it's viewed as a supportive care therapy but also obviously as Michael mentioned, whether you have outcome benefit. And obviously, depending on the outcome of those trials, we're going to be looking at different price points. So the size of the market or particularly the size of this drug is going to be very much informed by the data that we deliver in the pending Phase II and Phase III trials.

Speaker 2

Thank you. Next question please.

Operator

Thank you. We'll take our next question from Umer Raffat with Evercore ISI. Your line is open.

Speaker 8

Hi, guys. Thanks for taking my question. I feel like it's still very early in your engagement with some of your shareholders and the new shareholders. So perhaps it might be too premature to ask much further on that. So instead, maybe I'll focus on pipeline briefly.

Speaker 8

I know you mentioned, Michael, that the oral GIP antagonist adds better tolerability and more efficacy. It sounded like you were implying it's more incremental to what an oral GLP could do as a standalone. Could you just lay that into context? For example, in the 4 week Phase 1 study you ran, did it hit 4% to 5% weight loss? And secondly, the more than 30 valent pneumococcal vaccine that you guys disclosed this morning, does it have more than 1 carrier protein?

Speaker 8

Thank you very

Speaker 4

much. Mikael?

Speaker 5

Yes. I think the ability of GIPER to act in concert with LIF-one has been well documented in a few different peptide settings. So we aim to be the 1st to document this with an oral approach and that could offer a really nice differentiation for patients that need more and faster achieving of the treatment objectives. That's what we want to reveal right now. On the our new platform for PCB Generation 4th and 5, we include a number of technical improvement.

Speaker 5

We don't want to disclose those today, but we did we're open to mention that our PCB 4th generation, which covers 25 serotypes, have as an example an improved serotype 3 based on new technology that moves it far beyond what we believe any other technology have been able to accomplish. And why is that important? Well, serotype 3 covers somewhere between 15% to 30% of disease in different countries and improving on that can have a bigger impact than adding a number of broader infrequent serotypes. As we go to the more than 30,000,000, it will be a combination of such improvement on many more serotypes. Thank you, Michael.

Speaker 5

Next question, please.

Operator

Thank you. We'll take our next question from Trung Nguyen with UBS. Your line is

Speaker 9

open.

Speaker 10

Hi guys, sorry I was on mute there. Trung Nguyen from UBS. Thanks for taking my questions. I have 2. So thanks very much for the comments on the activist investor.

Speaker 10

You said you disagreed with the thoughts over capital deployment and then you cited significant shareholder returns to Cgen and BioNTech. What's the difference between what you're thinking and perhaps what The Street's thinking here on BD? And then how do you intend to restore that investor confidence back into the company so that bridge between your expectations and the Street can be aligned? And then just on your commitment to delevering, thanks for the comments on the prepared remarks here. Is there an appetite to delever even quicker and sell the hospital business and fully divest the Halion stake earlier?

Speaker 10

And you do have products going off with LOE soon that could give you a little bit more flexibility on the balance sheet. So, yeah, just thoughts here.

Speaker 2

Why don't we start with this one and then I'll take a little bit the activist question.

Speaker 3

Yes. So first on the delevering point, yes, our objective is to deliver as rapidly as possible. I think the company has been laser focused on doing that given the fact that we've taken out about $4,400,000,000 in debt year to date and we'll continue to do that. Secondly, without speaking directly around any potential BD opportunities here is we're always looking to evaluate the infrastructure that we have and the assets that we currently maintain and understand if there's availability to, I'll say, monetize some of those assets over time to further support our delevering activity. So I would say all options are on the table and we'll continue to evaluate on what makes the most sense for us strategically long term.

Speaker 2

As regards the our projections compared to the Street projections in the business development, First of all, let's start by saying that by far the 2 biggest it is CGM and Biotech in terms of revenues, right? And in both of that, I think the Street move on CGM way up compared to when we made the deal. And the on the Comernity, we are very, very stable. The other ones that also if you add to that the Biohaven with Nurtec, which we are on our plans and we just exceeded for the Q2, Street expectations, it is covering 80% of the investment that we have made and probably way more in terms of revenues. And the most important thing is that those Seiden, for example, or the BioNTech with our development of mRNA infrastructure around the world And the Seizant acquisition with our taking over the ADC technology of Ipoo, which was a unique, unique asset, is transformational profiles.

Speaker 2

It's not the revenue growth, that is we are seeing right now and we'll continue seeing all the way towards the end of the decade. But it is 2 ADCs, 1 already in Phase III, the other is about to start Phase III that we got from CGM, one the SV and the other the PDL-one AATC, those are mega blockbusters, see there are technical success, mega blockbusters. And we are moving to Phase III because we have seen very positive earlier data. The same issue, we're starting with dicitamab vedotin in the genituary cancer, another ADC. So I would say that I think we truly think that this was well invested capital and will demonstrate significant value for Sarfobi.

Speaker 2

But I want also to make a final comment for any discussion with activists. But no matter if we agree or disagree on what has happened. I think the most important thing, it is what we are doing going forward. Starboard has not presented any specific actions, but they suggested something needs to change. On that point, in the beginning of the year, already a year ago, we are already starting changing a lot of things.

Speaker 2

Over the past 10 months, we have implemented changes like we changed our commercial model to separate the U. S. And international business and deployed new leaders who have now delivered 3 consecutive quarters of revenue and interest rates. We integrated Caesar and created an end to end oncology research organization to ensure a successful integration of the company, of the Caesar pipeline. And we have retained the vast majority of the legacy Caesar and colleagues.

Speaker 2

And we have delivered multiple, multiple successful readouts from that. We announced the plan to reduce OpEx by $4,000,000,000 which we are executing successfully without negatively affecting the top line. We announced an additional plan to reduce manufacturing costs by $1,500,000,000 which so far is delivering satisfactory results. We brought in Andrew Bohm, which is a knowledgeable research analyst to help prioritize our R and D pipeline and future business development. We are advancing now the process of selecting a new scientific officer.

Speaker 2

And we have enhanced our board with 2 terrific new directors who have deep expertise in corporate governance and shareholder value creation. So what we believe is that all these things are the results of an intentional 5 point plan that we roll out already in January of last year. So, as I said in my personal, let's say remarks, we plan to engage with shareholders, including Starboard and contingent any good ideas that create long term shareholder value. But I don't think that the statement something needs to change is really pragmatic because it's coming 15 months late. Next question, please.

Operator

Thank you. We'll take our next question from Louise Chen with Cantor. Your line is open.

Speaker 4

Hi, thanks for taking my questions. So just had 2 here. First one I wanted to ask you is how we should think about the big pushes and pulls for sales and EPS in 2025? And when you might give guidance, could it be as early as this year? And then second one, just on CAGEN, just wondering how the integration is coming along and if you have any updates some of the metrics that you gave like sales in 2,030 and what have you for the Cgen deal?

Speaker 4

Thank you.

Speaker 2

Okay. Dave, let's start with the first question.

Speaker 3

Yes. So, thank you. Regarding 2025, it's really topical because we're in the middle, as you can imagine, building our 2025 financial plan here across all of our business lines at 5. To your point, there's going to be a lot of pushes and pulls as we think about growth into next year on both our core business as well as our COVID business. It is our expectation that it's we will provide guidance for 2025, most likely by the end of this year.

Speaker 3

So stay tuned, more to come. We will lay out all the pushes and pulls when we give guidance for 2025, so you can get a very clear understanding of our business and the opportunities to enhance shareholder value longer term.

Speaker 2

Chris, can you give us an update on the Seagen integration, both speak a little bit about the commercial, but also focus on the research, which is a significant value?

Speaker 11

Thank you very much for the question. Overall, we're very pleased with the integration to date. We've retained the vast majority of colleagues at Legacy Seagen and we now have over 1500 colleagues working in our facilities in bath soldiers outside Seattle. As you saw, the global revenue in Q3, we printed 854,000,000 from legacy Cgen and of that, PADCEF printed over 400,000,000 in Q3. Seagen year to date delivered for us €2,300,000,000 which is 38% year over year on a pro form a basis.

Speaker 11

We continue to execute very well on the portfolio, on the pipeline. We started Phase 3 studies with tasitamab for dotin in urothelial cancer that's HER2 low, which is up to 40% of bladder cancer. With sickle Botetax for dotin, the differentiated B6A started the 1st Phase 3 study in non squamous, non small cell lung cancer. That's where we saw the most significant data. And we also planning to start the combination of Sigvotetax vedotin plus pembrolizumab in the first line setting of non small cell lung cancer recently discussed and aligned with the FDA on the trial design and on the dosing.

Speaker 11

We also progressing and should start a Phase 3 program with PD L1V vedotin, we see in combination with pembrolizumab early next year. So overall, great commercial performance so far. We haven't missed a beat and we continue to execute on the pipeline.

Speaker 2

Thank you, Bruce. Next question, Bruce.

Operator

Thank you. We'll take our next question from Geoff Meacham with Citi. Your line is open.

Speaker 12

Good morning, everyone. Thanks so much for the question.

Speaker 13

Just had a couple

Speaker 12

of quick ones. Michael, another one on obesity, and I know you've added assets outside of danioglyphron and I appreciate that it's early. I want to ask you, what does success look like on efficacy just given the bar today? And then strategically, how does Pfizer view orals versus longer acting injectables when you think about the investments Pfizer is making in this category? And then real quick, Albert, on the IRA, obviously, it seems here to stay, but when you think about the potential for a new administration, what do you what would Pfizer like to see, obviously, beyond closing the gap between orals and biologics on exclusivity?

Speaker 12

Thank you.

Speaker 2

Michael?

Speaker 5

For orals, to keep it very general, I think you have a number of things that could be advantageous. 1 is, of course, they combine so well with all other drugs that are involved in cardiometabolic disease to give long outcomes. And what you're looking for, I would say, is 10% to 20% order weight, the lower range for the first gliP. The upper range is where you can see oral combinations edged towards. And that's very much similar what you can see with a peptide.

Speaker 5

So, I kept it very broad with a lower and an aspirational range, the lower for more single agents that would edge above that and combo agents that can aspire to go above 15 and edge above that.

Speaker 2

Thank you, Michael. Now on ZEFS on IRA, clearly, IRA overall is negative for innovation and does not promote a spirit that people could provide investments. But there are also some good things about it. So clearly, I wouldn't like to see that the out of pocket limit that next year would be $167 per month for all your medicines for seniors. That's we want to be maintained.

Speaker 2

But this forced price setting is not a negotiation. And also, the penalty pill between are

Speaker 5

things that needs to change.

Speaker 2

And this is not only on IRA. I would mention that 340B right now, it is one of the biggest issues and it is unethical and it is the way that it is evolving and it is creating significant transfer of funds from where it needs to be used, the poorer people, to bolster the profit lines of some business. So 340B reform is something that myself and the entire pharma setting as a priority for them. So thank you for your question. Next question, please.

Operator

Thank you. We'll take our next question from Terence Flynn with Morgan Stanley. Your line is open.

Speaker 12

Great. Thanks so much. Appreciate the questions. 2 for me. I guess first one is on the RSV opportunity.

Speaker 12

Just wondering what you see as the most likely outcome here for revaccination frequency and the potential impact on the longer term market opportunity. And then the second question is more of a clarification on your CDK4 inhibitor. You guided to starting first line Phase 3 study early next year. Just wondering, if you can share any more detail there on the design, if that would be a head to head versus Ibrance and if it would be in combo with VEPTEG or if that's a monotherapy type design? Thank you.

Speaker 13

All

Speaker 2

right. Amit, would you like to speak a little bit about the RSV and PROMESA?

Speaker 14

Yes. Just maybe, Terrence, to directly answer your question. So, you know, how the market evolves, it's going to be a function of how ACIP recommendations for RSV evolve, and that includes, revaccination timeframe, as you mentioned, but also populations. I don't think it's really productive for us to predict how ACIP is going to evolve these recommendations. But we do feel confident in the BRISVOS profile.

Speaker 14

And importantly, what I would like to highlight is we feel very confident in our ability to pull that profile through. You heard Albert describe our momentum in the U. S. Market, particularly in light of dramatic improvements in our market share versus last year. And we continue to be ready to advance in vaccinations in the Q4 as well.

Speaker 14

And the last thing I would say is the FDA's recent approval of the 18 to 59 year old at risk population makes Abrisbo the only RSV vaccine that's indicated to protect patients as young as 18 years of age and it further strengthens this perspective on the viability of Abrisbo. Last thing I'll say is on maternal, we have also had really good momentum on our abrisbo maternal indication. We see very strong signals in uptake for the month of September. We had a 20% uptake, which is a full doubling of where we ended the last season, and we continue to see uptake amongst OB GYNs and health systems. So in the 1st 4 weeks of this season, the units that we shipped into those systems were up 56% from the 1st 4 weeks of last season.

Speaker 14

So we see momentum on Abrisbo, and we look forward to future ACEF updates.

Speaker 2

And Alexander, you want to add something on the international because that's also an important market for us.

Speaker 9

Yes, absolutely. Even though it's still not material yet, we are actually making very good progress. So on the other front, we actually got VTC recommendations since the beginning of the year in large markets like UK, Germany, in France, in Canada, in Australia, in Saudi Arabia and a lot of other midsize market, but positive ETC recommendation. Now we're moving into funding. And as you know, at the Q2, we said that we won the exclusive UK tender, that's what we did.

Speaker 9

We also won the Canadian tender. Now in terms of reimbursement, we just got actually regional reimbursement in Germany and we are launching at least 15 October in Germany. Now all the others, the large market and the mid sized market that I talked about are in phase of negotiation. On the other side, the last thing I want to say is actually we are working toward our immuno bridging study in 2025 in China, so that we can do an NDA filing, which is also an important market for us. On the pediatric side, also we are making good progress.

Speaker 9

We also got VTC recommendation in large market like the UK, in France, in Australia, in several other midsize market. And actually, yesterday, we just got also the Pan American Health Organization that covered 40 markets in the Americas that actually listed at Griswold in their RSP recommendation. So we're gaining also reimbursements in France and we have actually just launched in France recently. There again on pediatric, once we got all those positive recommendation, we are moving into reimbursements. So we see great potential.

Speaker 9

It's going to take a bit of time because we go through all those different steps, but we see good potential there, absolutely.

Speaker 2

Thank you. And then why don't we go to Chris for the question on the design of the Phase 3?

Speaker 11

Thank you very much for the question on atermociclib, highly selective CDK4 inhibitor. This was another small molecule that was conceptualized and discovered in our laboratories in La Jolla. And as you know, it's currently in a Phase 3 program for 2nd line plus hormone receptor positive breast cancer. And this is potentially not only a 1st in class, but best in class highly selective CDK4 inhibitor. And as you know, CDK6 leads to some of the vulnerabilities, including the bone marrow toxicity.

Speaker 11

And that's why we're focusing on CDK4, which drive breast cancer proliferation. So we believe with the current data, including the safety and tolerability, the early clinical data support the potential for more complete and continuous dosing with CDK4. And as you've seen, we've got no grade 4 neutropenia, no grade 3 or 4 diarrhea and no grade 4 treatment related AEs was observed. We've aligned with the FDA on the first line hormone receptor positive breast cancer study, which is starting in the coming months and it will be against physicians choice of CDK4six

Speaker 2

inhibitor. Thank you. Thank you. Next question, please.

Operator

Thank you. We'll take our next question from Evan Singerman with BMO Capital Markets. Your line is open.

Speaker 12

Hi there. Thank you for taking my question.

Speaker 4

So I have one for Andrew on honor what I believe is his first call on the other side. In your 1st 4 months or so, can you help us better understand your findings regarding the portfolio? And more broadly, how do you hope to shape and focus the wide variety of assets that Pfizer has to drive sustainable growth?

Speaker 2

So what now that you're in the dark side, what is your opinion, my friend?

Speaker 7

Well, I think, A, I don't think question B, I think in response to Albert's question, think coming from finance, I guess farmers are stepping to the light side rather than the dark side. But in terms of the question, look, I've always regarded Pfizer's R and D engine highly just because when you look at the stream of molecules that have been internally discovered at Pfizer over the years, first ALK inhibitor, first CDK4six inhibitor, numerous JAKs at Brisvo, that's clearly a very very strong record of discovery and execution and it's not just small molecules I hasten to add, you see that in vaccines and oligos and cell therapies and bispecific and for me when I made the move this was absolutely key in terms of a company that had this because if you don't have this, then life is very, very difficult. Now in answer to where I hope to add value coming forward, I think as Albert alluded to earlier, historically perhaps we may have pursued areas where that R and D investment hasn't translated into the type of revenues you want. The point is that this is a much easier challenge to solve. It's a matter of taking this incredibly powerful machine and pointing it in the right direction so that we are targeting those areas that translate into revenues.

Speaker 7

And if there's one thing that I think the COVID experience shows you is once Pfizer focuses, execution is something you should feel very comfortable about.

Speaker 2

Thank you, Andrew, and Eva for the question. Next question please.

Operator

Thank you. We'll take our next question from Courtney Breen with Bernstein. Your line is open.

Speaker 4

Hi, everyone. Thanks so much for the time today. This is Courtney Breen from Bernstein. Perhaps building on the last question, looking at Slide 28 in the presentation today, it suggested that in the last 3 months from the end of July to today that there has been no meaningful advancement of the pipeline, albeit there are a number of pipeline actions kind of suggested to be initiating too. We are suggesting this is likely as a response to the reset and cost cutting that's going on.

Speaker 4

My first part to this question is how would you ensure that this isn't repeated in further quarters? And how are you balancing the need to kind of take stock and cut while ensuring that high potential opportunities are getting appropriately accelerated through the pipeline?

Speaker 2

Then maybe I will ask the 2 R and D heads to comment on that, Please, let's start with Chris.

Speaker 11

Yes. Thank you for the question. So just a reminder, this year we've already started 8 new first in patient studies in oncology, which I believe makes us the number one company in terms of Phase 1 clinical trials started. In the coming months, we expect potential Phase 3 readouts for breakwater, which is a very important indication for us in BRAF mutated colorectal cancer, which is up to 10% of colorectal cancer. That will be in the first line setting, a big unmet need because there's particularly poor prognosis, patients presenting with BRAF mutated colorectal cancer.

Speaker 11

We also expect readouts for VERITAC2, ER, PROTAC, we co developing with Avenis for ER positive second line plus metastatic breast cancer and potentially for CREST, which is sasanlimab, a differentiated subcut PD-one in combination with BCG in non muscle invasive bladder cancer. We will also present in the coming months Phase 2 randomized data for mitralmetastat. This is randomized Phase 2 data in patients with prostate cancer. We've seen the data and that provided us the confidence to initiate the 2 Phase 3 programs. In the coming months, we'll also start additional Phase 3 studies as I mentioned CDKAT4 in first line ER positive breast cancer, sicklot attack for dote in combination with pembrolizumab and PD L1 high first line non small cell lung cancer and CAT6, we got positive breast cancer.

Speaker 2

So quite impressive on the oncology side. And Mike, what about the rest?

Speaker 5

Yes. We thought we helped you to focus by this quarter displaying some nice movement at the most valuable part of this chart, the right hand. When you look over the next 18 months and including oncology and the non oncology, we will have up to 40 different opportunities to fill the left side that I hear you are eager to see progress on and the right side. It will include the 40 will be divided between potential approvals, projected pivotal readouts and potential proof of concept. And that did not even include early signals in clinical development.

Speaker 2

Thank you. Thank you, Kartner, for the question. Next, the question, please.

Operator

Thank you. We'll take our next question from Steve Scala with TD Cowen. Your line is open.

Speaker 4

Thank you very much. Pfizer has previously stated it anticipated having visibility on long term COVID product sales based on 2024 trends. Since we are now nearing the end of 2024, I'm wondering what that long term number is? And then secondly, does Pfizer have the Phase 3 booster data for the RS vaccine in adults in house? And if yes, does the data show a similar step down in booster immunogenicity as did the GSK vaccine?

Speaker 4

Thank you.

Speaker 2

All right. So on the stability, let's maybe, Amish, you want to make a comment? I could also comment that you would wait on this.

Speaker 14

Let me just comment on performance. I think, Steve, I think both on pexlovid and Comirnaty, I think what our performance to date as well as the quarter would show us is that these are both entering into a category where we understand what the volumes are likely to be and we believe these are going to be durable businesses going forward. So just as an example, on PAXLOVID, even if you take the one time items that Dave alluded to aside for a moment, we've seen significant PAXLOVID treatment course utilization, right? Even just in the summer wave that happened over the course of Q3, we saw an average of about 100,000 courses of treatment at the start of July, growing to about 225,000 treatment courses in mid August before that wave declined. And we've built a very durable commercial engine to support that with increasing treatment rates, with very viable reimbursement both on the government side as well as on the commercial side, and a way to activate HCPs in consumers who need treatment.

Speaker 14

And similarly on and we had the benefit of being able to start 3 weeks before last year, was to start the season with plenty of vaccine infringes, both in the retail setting as well as in the health system setting. And again, we've demonstrated an ability to do that quite well. When you look at where vaccination is this year versus last year, it's a little bit higher actually, but a big part of that is just a function of the calendar and the 3 weeks earlier. We expect to see vaccinations continue in October through December and the shape of that curve will continue to evolve but all of this makes us confident that we're seeing a durable business both on vaccines and packs.

Speaker 9

And for international, this is Alexander. Thanks for the question, Siobhan. Same principles with Sjibtuk. In community, just want to remind everyone that in the international we closed our Q3 at the end of August. So basically you don't see any sales of Comenity simply because most market are starting out their vaccination campaign in September.

Speaker 9

Having said that, we're progressing very nicely in our key regions. So in Europe, we got the approval of the GEN-one adapted vaccine in July and we got the KP2 adapted vaccine in September. Since basically end of August, we started to work with our healthcare authorities partner in Europe, where we have an existing contract to implement the multi year contract that is in place. Same thing in the UK and Canada, we've also worked with the other authority to actually execute our contract. In Japan, we also got the genome adapted vaccine approved mid September and Comirnaty is actually the only PFS vaccine never frozen, which could be a competitive advantage considering the distribution model in Japan.

Speaker 9

So again, we see this as an enduring business and we see us, as I said, executing our existing contract in our key location. From a PAXOVIT standpoint, Q3 was a good Q3 for us, and it's actually very good because it satisfies our perception that Paxlovid is a sustainable business with sustainable demand, which coincides with the COVID wave. And we had a quite a stronger spring waves in Europe and Asia, and that translated into 1,000,000 events. Just to close, I want to say that 47 countries outside of this U. S.

Speaker 9

Have transitioned from advanced purchasing into commercial. So as we see in the U. S, it is an enduring and now the sales that we see quarter after quarter reflect the absolute demand and reflect the waves as they hit the different region of

Speaker 2

the world. And Steve, also I can't resist also making some comments. In the 5.5 years of MCO, I had 23 earning releases of which 22 we beat EPS of Bloomberg and 1 we missed. And I don't like the one that we missed and that was in Q3 last year and we missed it because of COVID. We severely miscalculated.

Speaker 2

Yes, there are excuses that the last pandemic was 100 years ago. So we didn't have, let's say, benchmark. But and also we had to reduce it significantly. We had $56,000,000,000 of COVID revenues in 2022, and we gave the guidance of 22. So, we reduced it to 40% on what used to be.

Speaker 2

However, life proved, but we got it wrong and us and Moderna and everybody else. And the reality was that it was not 22, but 12. So we are very careful now when we speak about COVID because we don't want to miss it again. And I but I would like to say that when I see the trends of the COVID business, AXCOVID, which for us is even more important because of the higher level of profitability, it is basically identical the utilization of last year compared to this year. So far, we had 4,900,000 patients treated until Q3 with Paxlovid in the U.

Speaker 2

S. And compared to 5,200,000 people last year, the same period. The treatment rates have improved from 50% last year to 57% and the fulfillment rates went a little bit down because now there is co pay from 88% went to 81%, but it's very, very stable. The same is with the COVID vaccination. When you see the trends of COVID vaccination, the utilizations are basically the same like last year, more or less, and still it's early in the season.

Speaker 2

So there could be fluctuations over there. But so I think your statement that shall we consider COVID as normal business now, it's absolutely true. And this is how we regard it. And we will stop separating our business to COVID and COVID because it's Pfizer business. And with that, I will ask Michael to make a comment on

Speaker 5

the RSV. Yes. Thank you for your question. We have started to accumulate data on both durability and the impact of revaccination for RSV. On the majority of patients that we expected to go to pharmacy for re vaccination, the titers remain robust after 1 and even 2 years, which is punctuate the quality of our vaccine.

Speaker 5

But they, of course, decline gradually and we can have some meaningful improvement in those titer with a booster. But I believe that likely in 3 years, around 3 years, we will see a drop in the titer that makes the boost really improve meaningfully the protection for a certain substantial fraction of the patients. And that's what we are going to monitor now whether this 3 years is a good interval. But otherwise, it's performing exactly as expected for a high quality vaccine. Now there could be patient groups that go to physician offices that are more immunocompromised, moderate to severe patients that may benefit from once a year and that would be more a physician directive.

Speaker 5

So I hope that we give you a bit of an understanding how this will evolve.

Speaker 2

Thank you, Michael. Next question please.

Operator

Thank you. We'll take our next question from Rajesh Kumar with HSBC. Your line is open.

Speaker 15

Hi there. My apologies. I was on mute. So two questions, if I may. What are the what is the impact of Part D and IRA on your business next year?

Speaker 15

Are there any numbers you're calling out, which might help us with the modeling? That would be very helpful to understand if there are any impacts. And the second one is, appreciate the the color on the Cgen pipeline and how you're progressing and how the market under appreciates the size of the opportunity. And then the sell side estimates clearly do not reflect your optimism. When is it that you'll feel a bit more confident?

Speaker 15

Or what do you need to see to increase your longer term guidance on CGen?

Speaker 2

Thanks. Dave, can you take the IRA part of next week?

Speaker 3

Yes. I'll just hit on it very briefly. Obviously, the IRA in that the redesign has pluses and pull pushes and pulls to us as we cycle into year. When we provide guidance by the end of this year, we will give you a view on the net impact of that as we think about our business. So more to come, hold tight on that.

Speaker 5

And there are puts and takes, so positive things and negatives, right?

Speaker 2

So we need to assess it as we are building now these calculations as we are building our budgets for next year. Seeds and pipeline. Chris?

Speaker 11

Yes. Thank you for the question. So I think last year at this time, we didn't expect we're going to have PADCEF approved in first line bladder. And everyone forecasted that approval for the first half of this year. And obviously the approval happened very early because of the unprecedented data.

Speaker 11

So I think the performance commercially is really as we expected or exceeded what we expected in 2024. If you look at the rest of the pipeline now, the new molecules like Scototaglodotin, tucitumab, PD L1B, as well as next generation CD30 ADC called 35C for kamtosis and atopo-one. We will present next year at conferences more updated data on these including in combination with pembrolizumab for ciclofetacvodotin for DV and for PD L1b as well as really highly encouraging data for 35C, the next generation CD30. So I think by showing and releasing more data next year will help all of you to build confidence in the pipeline.

Speaker 2

Thank you, Chris, and thank you for the question, Ramesh. Next question, please.

Operator

Thank you. We'll take our next question from Akash Kewari with Jefferies. Your line is open.

Speaker 4

Hey, thanks so much. So looking at some of your IC around 25 valent Prevnar, it looks like you'll have a step up versus your previous 20 valent vaccine, but it does look like effective stereotype coverage could lag meaningfully versus Merck and backside approaches by 10% or more in older adults. How confident are you that this 4 gen vaccine could save off a preferential rec from some of your peers down the line in adult? And then number 2, can you talk about what special properties your once daily modified release dinaglobron could have outside of improved half life that investors might be under appreciating? I think those earlier comments stood out to us.

Speaker 4

Thank you. Michael?

Speaker 5

Yes. The 25 A LEN that you asked about, the 4th generation, we aspire to be the one that first hits the pediatric market, which is where the bulk of use of doses. But we also think because of this unique improvement of several type 3 that is far more important than several of the other tiny serotypes will bring an overall value to the adult segment that will be very meaningful. And as you have heard, we are working on a 5th generation that will include both improved performance, such as serotype 3, and go far beyond any of those serotypes that you are talking about in numbers. We use 30 plus just to keep a bit of detail for the future.

Speaker 5

For the QD, I think in general, you saw, of course, with injectable when you went from once a day to once a week and you got a smoother profile and reduced the number of peaks that many patients performed better on them. So that's a hypothesis we are keeping our eyes on, that with a modified release you will have a more smooth profile. You avoid certainly additional high peaks that immediate police have. And that's something we have seen in other formulation or other drugs. And that's why I think we are trying to be attentive in order to have our eyes on details that can help to make this product a really nice oral product with some differentiation.

Speaker 2

Thank you, Michael. Next question.

Operator

Thank you. We'll take our next question from Vamil Divan with Guggenheim Securities. Your line is open.

Speaker 13

Great. Thanks for taking my questions. I have a few, but I'll keep it to 2. So one just on the guidance for the full year, you increased the total sales guidance by 1.5. You increased the COVID products by 2,000,000,000 So I guess you're lowering the non COVID by about 500,000,000 I guess.

Speaker 13

Some of that is OXBRIJA. But wondering if there's anything else that you might call out where you're sort of trimming your expectations for the full year? And then second one, sort of tied to the OXOIBRITA news from a few weeks ago, we noticed the GBT-six zero one of sevelator. So that seems to be progressing still in your pipeline. I'm just curious if you're contemplating or have you made any changes to that approach and the mechanism is obviously similar to Acuprida and just wondering if anything you've learned from the Acuprida situation, should we should think about carrying over to this one?

Speaker 13

Thank you.

Speaker 2

Thank you, Vamil. Dave?

Speaker 3

Yes. On the guidance from a revenue perspective, you're absolutely correct. We increased our overall guidance by $1,500,000,000 We increased Paxlova by $2,000,000 which implies that a $500,000,000 compression someplace else in the business. Think about that as largely OXBRIda. We're absorbing the OXBRIda headwind and maintaining our 9% to 11% growth rate in our non COVID business, which actually implies that our baseline business is actually performing quite well.

Speaker 2

And I want to remind that the non COVID business was 14% growth this quarter. Then Michael? Yes. On

Speaker 5

the multivariate or we first previously called 601, yes, I am encouraged about that opportunity. And of course, we tried here to incorporate learnings how OXBrayta was developed to our advantage. As you know, that driver was already approved 2019 when we did acquisition a bit later and with several programs already up and running. 601 by itself is at a 10 fold lower dose. It has more potency and brings more improvement for hemolytic anemia, as one example.

Speaker 5

So this far, it has performed very well in our Phase 2 and looked really nice in tolerability. So I'm optimistic about that one. When I speak about trial learnings, POXBryta was performed in the more recent studies in a part of the world where it's really difficult to do the type of high quality, consistent preclinical trials. And as we're investigating some of those learnings with OXBRIITA, we have as a countermeasure focus for Sivelator entirely on high performance sites that have a history of delivering great drug development. And this will obviously also support a profile.

Speaker 5

So I'm optimistic. And as there's a final end here, please remember that when we did the GPT deal, our eyes were really on a Sibelius over maybe up to 80% of the value of the deal. But OXBRIZI allowed some early interest into the market and we'll continue to investigate OXBRIZI and keep you updated what we learned. Thank you, Michael. Next question, please.

Operator

Thank you. We'll take our next question from Dave Risinger with Leerink Partners. Your line is open.

Speaker 12

Yes. Thanks very much and thanks for taking all these questions today. So my first question relates to cost cutting ahead. Obviously, the company is already engaged in significant SG and A and R and D efficiency initiatives. But I'm curious about whether management sees opportunities for further SG and A and R and D reductions.

Speaker 12

And then with respect to the over 30 valent pneumococcal conjugate vaccine candidate in preclinical development. Given management's prior statements about its R and D initiatives, I'm assuming that that will be adjuvanted and I just wanted to confirm that. Thank you.

Speaker 2

Let me take quickly, although that's David's domain, the S and A and R and D. Look, we did significant reductions, and we were very careful to make them in a way that will not affect our pipeline and will not affect our business. So, we are very happy with what has happened. Now, are we going to not continue being efficient? Of course, we will.

Speaker 2

I think I see tremendous opportunities ahead of us that we can reduce some of the less ROI driven investments that we are doing, both in R and D and design A. And part of that will be, of course, reinvested in more productive with a trend to be able to control the cost and absorb our cost inflation. So you should see a constant, very cost focused, very cost conscious culture as we move on. Now, Michael, on

Speaker 5

the third development? Yes. Dave, thank you for timely question. And I think we really have been breaking new ground in our PCB technology platforms. And we're obviously very pleased to get some of our new technologies validated with the 7 Type 3 that you heard about in the 4th generation, the 3 to 25 island.

Speaker 5

The components that allows us to go far beyond 30 includes a very sophisticated new type of chemistry that on certain type of serotypes can give several fold improvement in titer. There are minor or more substantial formulation changes that can give some to quite significant fold increase and that may or may not include elements. And there are also experience that we're gaining on the use of carriers that we haven't been working on in PCB before that can add to this toolbox. So we are right now bringing all of this data together. And while we feel we have learned a lot with adjuvant as seen in our CD program that allow us to go from 3 to 2 and we have a toolbox, new adjuvant, whether it really will be necessary or not, it's too early to tell.

Speaker 5

But I acknowledge your good skills in the vaccine technology, and we keep you updated as we get closer to selecting candidates. Okay, next question, please.

Operator

Thank you. We'll take our next question from Chris Schott with JPMorgan. Your line is open.

Speaker 16

Great. Thanks very much. Just two quick ones here. Just first on margin structure and following up on the prior question. Is a mid to high 30% adjusted kind of operating margin adjusted for Cominarty still fair for Pfizer?

Speaker 16

And what's a rough time line to get there? And then my second question was just on the VENDYKELVENDY MAX franchise. Obviously, very strong year this year. But as it's sticking out to next year, we've got the part that you redesigned, we've got incremental competition. Is there still enough volume opportunity here to think about this as a franchise that's going to be generating healthy growth?

Speaker 16

Or should we think about growth slowing significantly going forward? Thank you.

Speaker 3

On Zuzar. So first, obviously, mid- to high-30s is very much within the realm of our business model. We're very focused against that. We continue to march and make progress against that over time. So we don't have a specific date for you at this point in time, but as we continue to progress both this year and we give guidance for next year, you should see us continue to progress on that front.

Speaker 2

And I think Commerty was also a little bit of a question.

Speaker 3

Yes. Well, I think Commerty obviously is a down draft to that. So obviously, adjusted for the size of that business will be important. But having said that, we continue to make investments in our business such that we're more productive top to bottom, therefore, expanding our operating margin profile of the company.

Speaker 2

And we don't want to speak for specific products, the margins, right, because it's a little bit misleading, it depends on multiple things. We did it because of the extraordinary circumstances in 'twenty two. But in general, you all know that from auto product, axolovid is very, very high margin and Commernati is on the low. Vintakil, why don't we start international this time and then we end up with Amir on the Part D redesign?

Speaker 9

Okay. So on the international, we had a very strong year and we continue to grow very strongly this quarter at 31%. Actually, our total patient on treatment have increased by 14% in the Q3 versus the Q2. So this illustrates the fact that we are growing and we continue to add new patients on treatment. This is essentially the result of 3 things.

Speaker 9

1, the establishment of Idegmael as a standard of care pretty much in all the countries where we operate. 2, the establishment of a robust infrastructure of care, which in a level, the faster diagnosis and treatment of these complex diseases. So this is a complex disease and finding those patients takes times and now we have a robust structure. And the third element is also, of course, the increased access. Today, we have 45 countries where we have reimbursements and we just recently had in this quarter 2 countries, the U.

Speaker 9

K. And Australia, so 2 significant countries that have started to reimburse FINDA growth. So moving forward, we really see that those three elements will continue to deliver and thrive growth in the key international markets. And if you look at the treatment rates in our major international market, we still see some potential to increase that diagnosis. So that will be the drivers of growth in the next flowing quarters.

Speaker 9

Amit? So Chris,

Speaker 14

in the U. S, I'll give you a little bit of color. Obviously, Vinda's had very strong growth this year. And I think a big part of that has been just a direct result of the commercial effort and attention that we've put on it where we've seen real growth in diagnosis rate and new patient starts. So new patient starts are up about 61% versus last year and they're up about 3% quarter over quarter as well.

Speaker 14

And we're also improving compliance rates significantly with existing patients. For the market, there's a lot of patients, nearly half that remain undiagnosed. So there's significant opportunity there. We will have tailwinds as we go forward. So we continue to put attention on this and that's going to be largely increased diagnosis education, the prescriber rate that we're growing, as well as affordability conditions, and we've turned the page into 2025.

Speaker 14

But we do think that the volume growth will be at meaningfully lower levels than what we've seen year to date. And a big part of that is obviously headwinds we're going to see from the changing market landscape where we will have, new competitive entrants that will impact new patient starts as well as potential switching of existing patients onto some of these options. So those are some of the puts and takes on Vinda. IRA will be a piece of that as well as Dave mentioned, and we'll have more to share about 25 specifics when we get guidance.

Speaker 2

Okay. And the last question, please.

Operator

Thank you. We'll take our last question from Mohit Bansal with Wells Fargo. Your line is open.

Speaker 17

Great. Thank you very much for squeezing me in. And first of all, congrats on phenomenal hire in Andrew Bong. So maybe I like taking a step back, can you comment something about a Bristol, if there was any stocking in this quarter? This particular market is a lot of like stocking driven in the 4th and 1st quarters.

Speaker 17

So how you are thinking about that? It looks like from the IQVIA trends, price implied price jumped a lot. So if you could help us understand what is going on there and how should we think about this particular product in coming quarters? Thank you.

Speaker 2

Which product is, Monke? Abrisbo. Abrisbo. Thank you. Oren?

Speaker 14

So, Mohit, a few comments on Abrisbo. So we wanted to, as I mentioned before, really start this vaccination season with a Brivo in fridges, in retailers, predominantly where the volume is, as well as with health systems. So we worked with our customers and our channel partners to make sure that we were appropriately stocked. And that's reflected in our Q3 numbers. Now what we have also seen over the course of Q3 is that administration volumes, and for a Briscoe that began in August, over the course of the quarter have continued to steadily rise.

Speaker 14

Now they are at lower volumes than from a market perspective where they were last year. Lots of reasons for that, including timing of the COVID vaccines as well as the change in the ACE recommendation. But we anticipate that there will be volumes that continue into the Q4. And then finally, our results are also a function of what Albert mentioned is our significant improvement in market share. So we've doubled our market share, into end customers from wholesalers and our market share of actual shots in arms of administrations in the retail setting at the middle of October was at 43%.

Speaker 14

So those are all the dynamics that are going into play for a Briscoe performance in Q3 and heading into Q4.

Speaker 2

Thank you, Amir, and thank you, everyone, for your attention. It was another good quarter for Pfizer. I think we are continuing to execute the 5 points plan that we have presented at the beginning of the year. There is an underlying operational health of our business. There is stabilization of the COVID business to now we feel comfortable to forecast it.

Speaker 2

And we have seen strong growth from the remaining part of the business. We have seen strong performance from new products. Most of them, they have beaten analyst expectations this quarter, which shows that they are doing better at risk than what was perceived they will do. And we are looking forward to continuing this path of executing and creating shareholder value. Thank you for your interest in Pfizer and we hope you have a wonderful

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Earnings Conference Call
Pfizer Q3 2024
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