Pfizer Inc — Earnings Call Q3 2026

Operator: Thank you for your continued patience. Meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Okay. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Good day, everyone, and welcome to Pfizer's Third Quarter 26 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DeMartino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am. Francesca DeMartino: Good morning. And welcome to Pfizer's earnings call. I am Francesca DeMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast at pfizer.com. Earlier this morning, we released our results for the third quarter 26 via a press release that is available on our website at pfizer.com. I am joined today by Dr. Albert Bourla, our chairman and CEO, Cecile Guegan, our CFO and Chris Boshoff, our Scientific our chief scientific officer. After their prepared remarks, we will open the call for questions. Members of our leadership team will be available for the Q&A session. Before we get started, I want to remind you that we will be making forward looking statements and discussing certain non GAAP financial measures. I encourage you to read the disclaimers in our slide presentation the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR website on pfizer.com. Forward looking statements on the call are subject to substantial risks and uncertainties speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert. Albert Bourla: Thank you, Francesca. Good morning, everyone, and thank you for joining our call. I am pleased with another strong quarter for Pfizer. Our excellent commercial execution, including 32% operational revenue growth in the quarter for our launched and acquired products, shows the underlying strength of our business. Financial discipline and ongoing productivity improvement are driving efficiency. And contributing favorably toward our margins. And with continued progress of our high value R&D programs, we believe that we are on a pathway to the next stage of meaningful growth. Before going further, I want to welcome Cecile Guegan, as our chief financial officer. Cecile brings more than 25 years of finance leadership and the proven ability to deliver new sources of growth. She stood out in a global search for her expertise her deep knowledge of Pfizer, and our industry, and the strategic vision that I believe will help Pfizer unlock sustained long term value for patients and shareholders. I am looking forward to Cecile's partnership, and I am confident she could help us execute with a discipline and ambition this next chapter requires. Now let me cover several highlights of our progress in this quarter. Over the last few years, we have invested close to $80 billion in transactions that have equipped us with key products contributing to current commercial momentum, and platforms with transformative potential. About 80% of this investment was for Seagen, Metsera, Biohaven. And we are making good progress in maximizing the value of each 1. We are pleased with the overall performance of our acquired products, which grew 37% operationally in this quarter. Our legacy Seagen portfolio grew 39% year over year in The U. S. In the quarter, driven by the strong performance of Padcev Bringing medicines together with the strength and reach of our commercial organization, has deepened our presence in the oncology community. We now offer physicians and care teams a broader set of options and more expertise helping patients and driving growth for Pfizer. Seagen did more than strengthen our commercial position. It also expanded our ability to discover oncology breakthroughs, doubling the size of our early stage pipeline at the time we close the acquisition. In our late stage development programs, we are advancing potential antibody drug conjugates that could bring meaningful improvements for patients with cancer. I am pleased with the pace of progress over the past year with our expansive clinical development program across our obesity portfolio. We plan to advance 10 active and planned Phase 3 trials in 2026. Including 1 evaluating a switch from approved weekly therapies to our investigational monthly GLP-1 peptide berobenatide. We have made significant progress with enrollment across our pivotal berobenatide program, as well as our amylin combination program where our Phase 2b study is now fully enrolled. We are working toward the first in a series of potential approvals for berobenatide in 2028. With planning of our go-to-market strategy, well underway. Biohaven also has been a strategically important addition for Pfizer. In the quarter, grew by 33% operationally, driven by underlying demand and excellent commercial execution. We see real opportunity to help patients with migraine, and for the oral CGRP class to be a key growth driver. Even as we manage market dynamics in a competitive field. We are leading the oral CGRP class in The US, and are working to extend that position internationally. We are seeing international growth as more patients can now get this treatment in key countries, including The UK, Italy, and Japan. We are also encouraged by strong adoption when we are able to expand access. 2026 execution in R&D has been strong. And we continue to prioritize the highest value opportunities for patients and future growth across our 4 therapeutic focus areas. Our excellent progress showcases our momentum in advanced our strategy, recent months, we achieved 2 key regulatory decisions, 1 key pivotal readout and 8 key pivotal study starts. Alongside strong data we presented at several recent medical congresses. We are excited by the pipeline of opportunities in areas of strategic focus and commercial strength. This includes late stage programs across tumor types in oncology, including multiple myeloma breast cancer, and lung cancer. Within inflammation and immunology, and, of course, in pneumococcal vaccines. Chris will share more detail about our recent advancement in the recent months. Pipeline strategy is grounded in disciplined prioritization and accelerated execution. And we are confident that we are advancing our most significant opportunities for future patient impact and growth. Today, we are raising our guidance for full-year 2026 revenue and adjusted earnings per share. This reflects our strong performance through the third quarter and confidence in our ability to execute our strategy. Along with our financial discipline and the progress we continue to make with our R&D pipeline, we believe Pfizer is well positioned to drive growth towards the end of the decade and create sustained value for patients and shareholders over the long term. We have deployed AI in our business with the goal of improving efficiency in manufacturing and sharpening how we engage physicians and patients. In R&D, we are working to accelerate innovation with faster target validation and better molecule and biomarker selection. The recent launch of our new product in over 120 countries. Genesis takes on the administrative burden so our safety scientists can spend their time where it matters most. Assessing causality, detecting safety signals, and protecting patients. With that, I will turn it over to Cecile. Cecile Guegan: Thank you, Albert, and good morning. I am proud to speak to you today as Pfizer's CFO. I am looking forward to continuing to work alongside the executive leadership team and lead a world class finance organization. I am genuinely excited about what we can achieve together and I will approach this role with financial discipline and a focus on translating Pfizer's scientific and commercial progress into durable shareholder value. I am confident in our strategy and that as a team, we can deliver durable long term value for our shareholders with rigorous capital allocation and disciplined execution. Now I am pleased to share our third quarter results. Which demonstrate continuous commercial execution and financial discipline. Revenues from our non COVID product delivered solid growth while product mix productivity and cost management supported margin expansion and enabled continuous investment across our robust pipeline. This year's performance gives us the confidence to raise our full year 26 revenue guidance as well as raise and narrow our adjusted diluted EPS guidance. Now on to the results. Third quarter 26 revenue of $617 billion came in ahead of our expectation. With strong 7% operational revenue growth of our non COVID products. Driven by key brands in The U. S, and select international markets. Offset by lower revenues from our COVID-19 products. On the bottom line, third quarter 26 reported diluted EPS was $0.56 In addition, adjusted diluted EPS of $0.87 exceeded our expectation. And includes the $0.10 charge related to the Innovent transaction. This outperformance reflects cost discipline and improved productivity across the organization. Even as we increase investment towards future growth drivers and advance several Phase 3 study starts. We saw solid revenue contributions in the quarter, from Eliquis, Padcev, the Vyndaqel family NURTEC, and Lorbrena. While our COVID-19 products the Paxlovid family declined in the quarter. Our launched and acquired product contributed $3.8 billion in revenues. And grew 32% operationally in the quarter, primarily driven by Padcev of $255 million NURTEC $135 million and Lorbrena, $114 million. We continue to invest behind this group of products to mitigate LOE headwinds over the next several years. In addition, this quarter's performance demonstrates clear progress against our objective of returning to growth towards the end of the decade. Cost discipline and continued optimization across the company including our manufacturing footprint, remain priorities. We are making meaningful progress with our productivity initiatives and remain on track to deliver nearly all of the anticipated $7.2 billion of net savings by the end of 26 for ongoing cost improvement programs. As we announced last quarter, we are initiating the next phase of these programs to deliver an anticipated additional $2.5 billion of net cost savings from 2027 through 2029. These savings support increased operating efficiency and contribute favorably to our margins. At the same time, we continue to prioritize investment in pipeline programs that we believe have the greatest potential to deliver meaningful breakthroughs for patients and create long term value for our shareholders. Adjusted gross margin for the third quarter was 77%. Primarily reflecting favorable product mix and continued cost management. When we look at the components of our adjusted operating expenses of $6.8 billion, Adjusted SI&A expenses increased 2% operationally reflecting in part an increase due to a lower favorable adjustment of US healthcare reform fees year over year offset partially by lower targeted marketing and promotional investments toward growth drivers and ongoing cost productivity. Improvements. Adjusted R&D expenses increased 18% operationally which includes planned investment in priority oncology and obesity programs including several Phase 3 study starts. An acquired in progress R and D decreased 52% operationally primarily reflecting a $650 million charge related to the Innovent transaction this quarter compared to a $1.35 billion charge in the prior year quarter. Related to the 3S Bio transaction. Third quarter 26 adjusted operating margin was 36%. Reflecting effective cost management strong non COVID revenue performance, higher investment in the business and I will note was tempered by the AIPR&D charge related to the Innovent transaction. As I mentioned earlier, third quarter adjusted diluted EPS was $0.87. Based on our year to date performance, including continued growth across our non COVID product, and disciplined execution we are raising our full-year 2026 revenue guidance by $1.5 billion at the midpoint to a range of $62 billion to $64 billion We are reaffirming our expectation of approximately $4 billion for the COVID products with the majority of the Comirnatio revenues expected in the fourth quarter consistent with the vaccination season. Vaxillary utilization will continue to be influenced by infection rates and treatment demand. In addition, we now expect full-year 2026 R&D expense to be in the range of $10.8 billion to $11.8 billion We are raising and narrowing our full-year 2026 adjusted diluted EPS guidance to a range of $2.95 to $3.05. This represents an increase of $0.10 at the midpoint while absorbing the $0.10 per share impact of the Innovent transaction. We are reaffirming all other components of our financial guide. Our updated outlook reflects our confidence in a non COVID product progress across our cost improvement initiative. Expectation of full year adjusted gross margin in the mid-70% percent range and continued investment in our priority pipeline programs. Turning to capital allocation. Our capital allocation priorities remain unchanged. Reinvest in the business at appropriate returns maintain and, over time, grow our dividend. And deliver shareholder returns while preserving flexibility for future value enhancing actions. Including share repurchases. Following the Innovent transaction, which closed in the third quarter, our current BD capacity is approximately $6 billion In the first 9 months of 2026, we invested $9.2 billion in internal and external R&D, and returned $7.3 billion to shareholders through our quarterly dividend. Our third quarter year to date 2026 operating cash flow was $8.8 billion and leverage ended the quarter at 2.6x slightly below our 2026 target of 2.7x. Given the impact of upcoming LOEs, we expect leverage to remain around current levels, or modestly higher during the LOE transition period. We remain focused on maintaining a strong financial position while continuing to invest in innovation and support shareholder returns. In conclusion, I want to leave you with 2 key takeaways. First, operational excellence. The non COVID product continued to perform well, growing 7% operationally. And our launched and acquired product grew 32% operationally. Providing further evidence of our strong capabilities and consistent execution. Second, financial discipline. We are improving operating efficiency while enabling increased pipeline investment in programs which we believe offer the greatest potential for patients and shareholders. Together, this performance demonstrates that we are executing our strategy managing the upcoming LOE transition, and strengthening the foundation for a return to growth towards the end of the decade. With that, I will turn it over to Chris. Chris Boshoff FMedSci: Thanks, Cecile. Across our 4 therapeutic areas, we made strong progress last quarter. I will provide color on recent developments in these programs, starting with Elrexfio, our internally discovered BCMA bispecific, which has now delivered 2 positive Phase 3 readouts in double class exposed multiple myeloma. Most recently, in MM32, Elrexfio monotherapy demonstrated a statistically significant and clinically meaningful improvement in progression free survival versus in investigator's choice of 3 established standard of care regimens. This is important because the choice of 3 standard of care regimens provides a robust representation of how c d 38 refractory multiple myeloma is treated today in a patient population that is growing as anti c d 38 therapy moves in the first line setting. And the results themselves were strong. At the time of the interim analysis, more than 75% of patients receiving Elrexfio had not experienced disease progression or death from any cause, and the estimated 18-month progression free survival rate was approximately 68%. Safety in 32 was consistent with Elrexfio's known profile and also potentially differentiated. With infection prophylaxis measures incorporated from the start of 32, rates of grade 3 or higher infections lower than those observed in MagnetisMM-5, Elrexfio's 1st positive pivotal trial in double class exposed multiple myeloma. For context, such infection prophylaxis measures were not in place at the start of 5. These were instituted following early deaths due to infections that were concentrated in China and 2 other countries during a COVID wave impacting the overall hazard ratio of MagnetisMM-5. 5 data expected at a medical meeting before year end and will provide further information on efficacy and safety. Taken together, these positive phase 3 results from MM32 and 5 strengthen our confidence in moving Elrexfio into earlier lines of treatment. We are building a compelling case of fixed dose Elrexfio monotherapy from first relapse regardless of prior CD38 exposure. And with additional pivotal studies in newly diagnosed multiple myeloma underway, Elrexfio's eligible patient population could grow approximately 5-fold pending clinical and regulatory success. Moving next to atermaciclib. Our potential first in class highly selective CDK4 inhibitor. Building on the leadership we established with Ibrance, we are advancing atermaciclib as a potential next generation backbone for first line and early HR positive breast cancer. Our KAT6 inhibitor, mevrometostat, is being developed in later line settings. Atermaciclib was designed in house to improve upon CDK4/6 inhibitors. The current standard of care backbone for HR positive breast cancer. A key limitation of this class is safety and tolerability with CDK 6 in inhibition being a key contributor to adverse events. We designed atermaciclib to maximize efficacy through greater CDK 4 inhibition while improving tolerability by minimizing CDK 6 engagement. Atermaciclib is 33x more selective for CDK4 versus CDK6 comparing favorably versus the standard of care. Here are 2 datasets fueling enthusiasm for atermaciclib. On the left are data presented at ESMO from the Phase 2 FOURLIGHT-1 study of atermaciclib plus fulvestrant in patients with HR positive HER 2 negative breast cancer. All participants had previously received a CDK4/6 inhibitor and notably 92% of the atermaciclib participants were randomized within 3 months of discontinuing a CDK4/6 inhibitor. The atermaciclib regimen reduced the risk of disease progression or death by 40% compared to investigator choice of fulvestrant or everolimus plus exemestane. These results in a population with highly refractory or resistant disease increase our confidence in our ongoing Phase 3 trial of atermaciclib versus investigator's choice of CDK4/6 inhibitor in the first line setting. On the right are data from atermaciclib's Phase 2 study in early breast cancer. With a combination of atermaciclib plus letrozole, 88% of participants' tumors demonstrated complete cell cycle arrest compared to only 18% versus letrozole alone. These results support our plan to combine atermaciclib with a selective estrogen receptor degrader, giredestrant, in a Phase 3 early breast cancer trial expected to initiate within the next few months. This study design has been aligned with regulators building on the expected approval of giredestrant in this setting. This slide shows FOURLIGHT-1 safety and tolerability data alongside results from pivotal studies of the 3 approved CDK4/6 inhibitors plus fulvestrant. These are cross trial comparisons Therefore, definitive conclusions cannot be drawn. These data further suggest that high CDK4 selectivity drives improved safety and tolerability, enabling continuous dosing excellent adherence, and potentially great efficacy. Grade 3 or higher neutropenia was numerically lower with atermaciclib than with any of the approved agents, with no grade 4 or 5 neutropenia reported. Any grade diarrhea was lower than with a abemaciclib, and comparable to palbociclib and ribociclib. Dose with reductions due to adverse events were 14% with atermaciclib compared to 32 to 43 percent with the approved agents. Turning to tivonatinib. We are advancing an extensive program for this potentially best in class PD-1/VEGF bicyclist. Antibody with over 1.2 thousand patients treated globally and a consistent safety profile. This includes 2 ongoing Phase 3 trials with 2 additional Phase 3 trials expected to begin this year. Updated results at ESMO strengthen our confidence as we expand tivonatinib's development since SITC 25 confirmed response rate for the pivotal dose of tivonatinib plus doublet chemotherapy from the ongoing Phase 2 study have risen by roughly 20 percentage points in nonsquamous and squamous first line non small cell lung cancer. They now stand at approximately 80% exceeding those of tislelizumab plus chemotherapy in this study. Median progressive free survival was nearly 14 months for both histologies. An improvement of roughly 4 to 5 months versus the comparators. Notably, tislelizumab's efficacy was consistent with historical Phase 3 results for the leading PD 1 antibody pembrolizumab. Which supports the relevance of the control arms. We are also encouraged by how tivonatinib efficacy and safety results compared with Phase 3 data for the PD-1/VEGF bispecific antibody, ivonesimab. While recognizing the limitations of cross trial comparisons. Now for I&I. Tilrekimig, a potential first in class trispecific antibody, tilrekimig, was designed in house to simultaneously target multiple complementary drivers of type 2 inflammation IL 4 IL 13, and TSLP. Phase 2 results in atopic dermatitis provide compelling proof of concept. At the top monthly doses, tilrekimig treatment led to placebo adjusted response rate of about 50% for EASI-75, defined as a 75% or greater improvement in the eczema area and severity index. While cross trial comparisons have limitations, these Phase 2 data suggest the potential for superiority over dupilumab the current standard-of-care biologic. These secondary endpoints in our ongoing Phase 3 program are powered to test this hypothesis in a head to head setting. For safety, Tilrekimig demonstrated a favorable profile. At subcutaneous doses up to 400 milligrams once every 4 weeks the observed frequency of conjunctivitis and injection site reactions were lower than rates reported with dupilumab and comparable to placebo. Beyond atopic dermatitis, tilrekimig offers a pipeline and a product opportunity. Targeting pathways that are validated by approved therapies across 9 different diseases, Late stage studies are underway in severe asthma and moderate to severe COPD. Moving to our potential best in class pneumococcal conjugate vaccine program, building on Prefna's 25 plus year legacy of effectiveness and safety we are advancing next-generation candidates designed for leading serotype and invasive disease coverage. In pediatrics, PCV 25 delivered strong phase 2 results All 20 serotypes shared with Prefna 20 met the 2 fold post dose I post dose 4 IgG criterion historically used to establish non inferiority. Since the pediatric licensure of Prevnar 20 in 2020, the FDA established an updated, more stringent 1.5-fold non inferiority criterion that is incorporated into our Phase 3 design. Given the Phase 2 results and tighter confidence intervals expected with a much larger sample size in Phase 3, modeling predicts this criterion will be met for at least 22 of 25 serotypes in our pivotal study. Taken together with seroresponse data, functional opsonophagocytic activity (OPA) titers, and the totality of evidence approach to licensure. These results provide confidence as we aim to deliver a best in class pediatric pneumococcal vaccine protecting against serotypes that collectively cause an estimated 84% of invasive disease cases in US children under 5. This would represent an incremental increase of approximately 25 percentage points versus 20. Our Phase 3 program is well underway. With the Phase 3 lot to lot consistency study already fully enrolled. In adults, PCV35 extends the enhanced serotype 3 technology we validated with PCV25 to other key serotypes. With a Phase 1 start expected this year. Looking ahead, we expect a strong cadence of regulatory decisions data readouts, and pivotal study starts over the next 12 months. These include a readout from MEVPRO-1, which based on the current event rate is now expected in the first quarter of 27. If successful, MEVPRO-1 could support approval for mevrometostat, our in house discovered potential first in class EZH 2 inhibitor for prostate cancer. Expanding our franchise. With that, I will hand it back to Albert. Albert Bourla: Thank you, Chris. And in closing, operational excellence is driving a commercial momentum across our key growth brands. And I would say, importantly, with our launched and acquired products. Our capital allocation strategy, on the other hand, is designed to create long term shareholder value. And our late stage pipeline progress with a significant number of pivotal readouts expected near term is strengthening our opportunity to extend our leadership in key areas. And make a difference for patients. I am confident Pfizer is well positioned for growth towards the end of this decade and for long-term shareholder value creation. We have line of sight to our aim of delivering a risk adjusted high single digit revenue CAGR from year-end 2028 through year-end 2033. Now we will move to Q and A. And operator, please assemble the queue. Operator: Thank you. If you would like to ask a question, press 1 on your keypad. To leave the queue at any time, press 2. Once again, that is 1 to ask a question. Our first question today will come from Christopher Schott with JPMorgan. Your line is now open. Chris Schott: Great. Thanks so much for the questions. I just had 2 pipeline ones. Maybe first on the trispecific, tilrekimig, How are you thinking about the positioning of this 1 in atopic derm as we consider, I guess, first line versus second line usage as maybe we just think about the very strong data you presented versus a very well entrenched standard of care And maybe just a second part of that, just talk about the timelines for the indications beyond AD that you are pursuing? The second question was then just pivoting over to the upcoming Phase 1/2a amylin and combo data that we are going to see. Here, can you just help some set some expectations about how you are thinking about that data and then the type of titration schedule that is being used in that study just to help us kind of frame out what we are going to see with that with that readout? Thanks so much. Albert Bourla: No. Thank you. Chris, would you like to cover the timelines of tilrekimig and, of course, the amylin and the berobenatide questions? Then maybe, Alexandre, you can speak a little bit about the commercial positioning. Chris Boshoff FMedSci: Thank you very much for the question. So as you know, we have now started the Phase 3 program for tilrekimig. In atopic dermatitis, 2 studies. 1 of those studies include a head to head against dupilumab, and we also started the Phase 2/3 study, a continuous design for COPD and Phase 3 studies for severe asthma with expected readouts in 2028 and 2029. Regarding the amylin GLP-1, as you are aware, the SOLIS 1 study is now completely recruited. That is the robustly designed Phase 2b study, SOLIS-1, of lotiglipron, single agent, and danuglipron plus in different doses and different titrations. We expect the readout for that study for efficacy the second half of 27. The ongoing Phase 1/2a study we will give an update at end of this year recognizing that study was designed for safety And PK clinical pharmacology, not for efficacy. Thank you. Albert Bourla: And then what about the positioning of the--how do you think about that? Alexandre de Germay: Chris, thanks for the questions. I think we all know that this is a very large category. What we have learned with our and overall dermatology franchises, there is a lot of patients profile that requires different type of therapy. And we see that very much with the JAK versus the biologics, and we see that there are some patients that actually move from 1 to the other to drop off. There is a lot of circulation of those patients. We are building capabilities across US and we see that we are making good progress. So for instance, as you saw in this quarter, in international, we reached, like, 100 million combined between our 2 assets in dermatologists for the quarter. So we start having a nice phase And as I said, as we move into the result of the study, we will be able to actually cap some of those lapsed patients and naive patients with a very specific profile that we are defining. So first in class, strong efficacy, and clearly unmet medical need in this category. Albert Bourla: Thank you very much. Next question, please. Operator: Our next question comes from David Risinger with Leerink Partners. Please go ahead. Dave Risinger: And I wanted to say congratulations to Cecile on your new role as CFO of Pfizer and look forward to working with you. My question is on U. S. Net price. In the third quarter and going forward. Could you comment on any gross to net benefits to net sales in the third quarter, including from any 340B-related upside. And discuss US net price prospects looking forward in the near term? Thank you. Cecile Guegan: Thanks very much. First, for your good wishes. So as it relates to the pricing in Q3, with the exception of, as we were expecting, the impact on Eliquis which started in, Q3, of the January wholesale acquisition cost (WAC) price decrease I would say there is not really any very material change into our gross-to-net Dynamics during the third quarter. So the performance that we are seeing is, for most part, driven by strong market performance and volume rather than dynamics around the gross-to-net. As we are looking into, the future, obviously, not commenting today on 2027. But we will obviously reflect into our guidance for 2027, the various dynamics that we are seeing being IRA with 2 of our product entering the negotiation program in 2027 and any of the dynamics around, the 340B impact and changes, including as a credit rebate model implemented starting in January and also, obviously, some of the MFN impacts that we have following the agreements we have with the government. But that is a summary. it is a performance into Q3 is really a reflection of the strong execution rather than, dynamics around gross-to-net that would have been contributing. Albert Bourla: Very well. Thank you very much. Next question, please. Operator: Our next question comes from Umer Raffat with Evercore ISI. Your line is now open. Umer Raffat: Hi, guys. Thanks for taking my question. Albert, there is clearly been a lot of progress on SG and A improvements over the last couple of years and I acknowledge that. it is not step function, but there is been improvement. But then I recall David before he moved on, had mentioned, that majority of the total net cost savings of $7.2 billion will be delivered by the end of 26. So when I look now back at the Pfizer p and l, I am seeing SG&A and R&D was about $24.5 billion back in 2022. it is about the same in 2026 as well. And I acknowledge R and D has gone up a bit as SG&A has come back a bit. But the broader dynamics on OpEx are still broadly in that $24 billion to $25 billion camp. And I guess, how do you think about that heading into the dividend integrity, the cost lever heading into patent expiries? Thank you. Cecile Guegan: Cecile, why do not you take this question? Yes. So as I mentioned earlier, we are on track to delivering the $7.2 billion of savings that we had implemented as part of our first phase of the cost improvement programs. Those savings were in different places. it is 1 in our manufacturing footprint for cost, 2 in R&D, but reinvested And we are indeed increasing our R&D investment in order to support the pipeline product and programs that we have in addition to, obviously, the acquisition that we made And then on the SI&A side coming from the commercial and marketing expenses, as well as G&A. So what we are seeing today in our operating expenses I would then relate to just the third quarter, which had some onetime dynamics that drove SI&A up. We are still expecting based on guidance, we will see a decline in SI&A versus last year. So that is the first piece that I would say. Going forward, we have announced our second phase of the program with a $2.5 billion of savings. Both in SG and A and in our cost of manufacturing. Those will translate into savings. So we are expecting to see those translating and mitigating the margin erosion as part of the LOE transition in 2027 to 2029. Albert Bourla: Thank you very, very much, Yusuf. Next question. Operator: We will go next to Akash Tewari with Jefferies. Your line is now open. Akash Tewari: Hey, thanks so much. Just a couple. I know in the spring, you had a kind of 45- to 50-patient biomarker analysis on your oral STAT6 and you were going to make a decision on whether to go from Stage 1 to Stage 2. Is there an update on that program and really how do you think about target engagement and biomarker reduction to what we have seen with some of the degraders? And then on your GLP-1/amylin, I think your Phase 1/2, you just updated on clinical trials to 201 patients. I think it was originally planned to be closer to 400 Any color on what drove that decision with the amylin GLP-1 combo with Metsera? Thank you. Chris Boshoff FMedSci: Chris, both question goes to you. Okay. So thank you very much. So the question on STAT6, potentially first in class, oral STAT6 program. Thanks for the question. This is an area very important for us for the I&I portfolio. As we previously stated, we have adapted the program to incorporate some additional DDI studies. So we should give you a readout for the STAT6 later this year. Regarding the Amylin and berubenatide, as I stated earlier, the SOLIS-1 study is fully recruited. That study is for efficacy reading out end of next year and the Phase 1/2a study was adapted for the additional PK studies we are doing. But there is nothing really nothing material changes to the trial. Albert Bourla: Thank you. Next question, please. Operator: We will go next to Vamil Divan with Guggenheim. Your line is now open. Vamil Divan: Great. Thanks for taking my questions. Again, maybe on the pipeline. 1, we noticed that you posted a new Phase 1 trial for your PI 3 k inhibitor on ct.gov last week. Heard what you said around atermaciclib in your KAT6. Curious if you can maybe just talk about how you see that asset sort of fitting into your broader breast cancer strategy. Then the other question may be coming from ESMO. We saw the VOLGA data that AstraZeneca released that could suggest maybe less need for the use of fewer cycles of Padcev in patients with bladder cancer. Curious if you have any user reactions to that data set or how it might impact how you think the use of PADCEV may play out in the future. Chris Boshoff FMedSci: Yes. So firstly, on the PI3K, we started to Phase 1 study on an internally discovered PI3KCA inhibitor, reminder that gedatolisib with sotorasib is also Pfizer discovered medicine. We have an ongoing clinical trial with Relay with the PI3K-alpha, pan-isoform selective inhibitor, RLY-2.61 thousand. And the Also in combination with atermaciclib. The advantage of atermaciclib is we do not see DDIs, which has been experienced with all the other CDK4/6 inhibitors. Combining with the PIK3CA. So it is a potentially significant advantage to your point, up to 40% of breast cancer, ER positive breast cancer, up to 20, 25% of HER2-positive breast cancer will harbor a PIK3CA mutation. So it is important area for us. The second question was on the VOLGA data. Just. I will start briefly. Firstly, this reinforces the use of Padcev for muscle invasive bladder cancer. It reinforces the use of Padcev combination with the PD-1 for muscle invasive bladder cancer. It also reinforces the confidence we have in the study. We have just started 309, which is the bladder-sparing Padcev pembrolizumab in a bladder sparing setting as well as the ongoing planned Phase 3 trial with Padcev plus gedatolisib, which should also start later this year. I just wanna remind on the VOLGA study, this was a no cisplatin eligible population. Pathological complete remission was lower than what we have seen with pembrolizumab plus Padcev, which is important, including slightly lower event free survival, And most importantly, this is a curative intent setting so we are not clear yet which patients can be deescalated. So that is important for physicians. Who can you actually give less therapy to? Thank you. Albert Bourla: Thank you very much. Next question, please. Operator: We will go next to Evan Seigerman with BMO Capital Markets. Your line is now open. Evan Seigerman: Hi, Thank you so much for taking my question. Cecile, so did you inherit, the capital allocation framework kind of established by your predecessor, how do you think about the marginal dollar that you can kind of invest from here between internal R and D and other bolt on you talked about BD capacity deleveraging, and eventually restarting buybacks. Where do you currently see the highest prospective return for shareholders? Cecile Guegan: Yes. So, Thanks, Evan. So our priorities are clear, and I. And they are not changing versus what was in place. I think they are. We have a solid plan to get us through LOE and post LOE. So our priorities: invest for growth, maintain or grow our dividend over time, and then keep a strong balance sheet. So through the LOE period, our operating cash flow, financial asset and access to capital market will give us the ability to continue to invest and maintain the dividend. As we go post the LOE period, our operating cash flow grows with the levers and we have other option to continue to increase shareholder value. And in that situation, share repurchases become, again, 1 of the levers that we have in order to be able to continue enhance that value for shareholders. Albert Bourla: Thank you very much. Next question, please. Operator: We will go next to Steve Scala with TD Cowen. Please go ahead. Steve Scala: Oh, thank you. 2 questions. Given the pushout of MEVPRO-1, were there any changes to MEVPRO-2 and -3 timelines? So that is the 1st question. Second question is for Cecile. So you started at Pfizer when Warner Lambert was being consolidated, have been through the acquisitions of Pharmacia, Wyeth and Seagen. And many BD deals, including that for Eliquis. I think it could be argued that Pfizer's most successful products have come through deals. And in each of those years, as it is now, Pfizer viewed its pipeline as very good. So given this history, why does not Pfizer make another big deal its primary focus, or would you say that the pipeline is significantly better now than any time in the last 25 years? Thank you. Cecile Guegan: Good question. Cecile, what do you think? Thank you. And just for the record, I came with Wyeth and, not. So do not have the history on all the on all the deals, but I think Wyeth was 1 of the best acquisition that we did, and I have seen since then a transformation of Pfizer and a strengthening definitely of our pipeline over the last 25 years. So what I would say is in terms of our priorities, Right? So we have, as Albert reiterated earlier, we have invested very significantly over the past few years in key transaction and key acquisition that are today already kind of, like, driving success. We are talking about Padcev, We are talking about NURTEC, and we see a lot of opportunities that still remains. In the pipeline in Seagen, in Metsera, So where we have a lot to execute, both commercially and on the R&D side and on the commercial side. So, really, as we look about. As we look at BD going forward, and considering our capital allocation priorities, our focus is really on more bolt-on acquisitions that are going to complement the large and rich portfolio that we have in the 4 therapeutic areas that we are having. So looking at a BD acquisition is obviously strategically aligned building upon our expertise and then obviously, providing the financial returns. Appropriate returns that we would be expecting. Thank you, Cecile. Chris Boshoff FMedSci: Chris, you want to comment a little bit on the timelines of MEVPRO given the interest on the product, maybe Aamir also you say a few things about the potential. Thank you very much. I will be brief. Since we last spoke about it, the comments have been updated for MEVPRO-1 and MEVPRO-2. A reminder, these are bent driven studies, so it is based on when we expect events to happen. So MEVPRO-1 is, will now read out Q1 27. and MEVPRO-2 Q3 2027. And as you have seen with. At ESMO, we have got additional data including compelling 8.9-month PFS. Just to correct, MEVPRO-2 is actually Q4 27. The updated in clinicaltrials.gov. Albert Bourla: Thank you. And I think MEVPRO-1, you expect around February. Around February. Correct. The readouts. This is the projections right now based on the way that events are accruing. Aamir Malik: And Aamir, why are we so excited about mevrometostat in terms of the commercial opportunity? I think 3 things we are probably excited. 1, I would just remind everybody that our current commercial footprint is anchored in the U.S. alongside Astellas. Mevrometostat for us is a fully global opportunity. In The US and outside The US. So that is very significant, and exciting. Second, as Chris mentioned, MEVPRO-2 and -3, across MEVPRO-1, -2 and -3, I think we have the potential to position mevrometostat as a multi indication franchise. So that gives us lots of surface area to compete in. And finally, if you just think of the total patient populations, we are talking about over 50 thousand in The US, close to 50 thousand in the EU4, in U.K., another 14 thousand in Japan, and 30% of that population could be addressed even with MEVPRO-1. So there is significant patient population a global opportunity, and clearly an area that we have deep commercial expertise. Are the things that get us excited about it. Thank you, Aamir. Albert Bourla: And, you know, some. Sometimes people forget that Xtandi, which is 1 of our very big and strong product, we basically had half of the Xtandi in the U.S., and that is it. Here, we are going to have the whole US and the whole global international market. Next question, please. Operator: We will go next to Jeff Meacham with Citibank. Please go ahead. Geoffrey Meacham: Great. Good morning, everyone. Thanks so much for the question. Just had 2. The first bigger picture, Albert, from a policy perspective, I know, obviously, hard to have certainty on, especially given it is Election Day. But as you look to 2027, what are your thoughts on the potential risks of changes to MFN or perhaps greater scrutiny on the prior OUS, agreements. And the second question for Chris on berobenatide. You guys have studied. Dave started a lot of studies across metabolic indications and beyond obesity, diabetes. Get your thoughts on expanding berobenatide as a combo strategy into inflammation or neuropsych or even oncology, for example, that obviously, the science is really evolving here on GLP-1 synergies. Thank you. Albert Bourla: And, really, thank you, Geoff. On the policy perspective, clearly, policy affects a lot. Our industry, and we are monitoring it very carefully. We are waiting to see what will happen today in the elections. But I think that in any case, looks like we will have a split government So I do not think that many things can move legislation wise. I do not expect any changes in MFN. I think the agreements are signed and are going until the end. Of the term of this government. And I expect that there will be a renewed interest in the congress to investigate several things. But it is. I do not expect policy changes, frankly. it is a very big contrast vis a vis what I was telling you a year ago in 2025, I was really scared. About the implications that either tariffs or MFN could have. I think through the successful navigation, of those issues, we brought the stability that it is now projected to last. And has brought, I think, this confidence back to the investor. To invest in the in the industry in our sector. Now with that, I will turn it to Chris to comment on the GLP-1 and other things. Chris Boshoff FMedSci: Yeah. I will just quickly start. So our goal is initially to establish berobenatide as a potentially best in class monthly subcutaneous GLP-1 for obesity, and this is globally. We are starting, as you have seen, additional studies now for knee osteoarthritis as well as for obstructive sleep apnea with or without CPAP. And we also will announce additional Phase 3 studies in the coming months. In 2027, you are absolutely correct. We hope to announce a additional studies looking at the backbone of our portfolio, including our I&I potential in oncology. You are right. there is area. And you will also see the acceleration of phase 1 programs and current programs that are preclinically, that is highly differentiated in this space. Albert Bourla: Thank you. Very good. Next question, please. Operator: We will go next to Alexandria Hammond with Wolfe Research. Your line is open. Alexandria Hammond: Thank you. 2 for me. So as you look at Sciwind Biosciences' GLP-1 launch in China, how are both the obesity and the diabetes markets playing out so far? How is that shaping your thoughts on the commercial opportunity for berobenatide ex-U.S.? And then on the Lyme disease vaccine, can you update us on the regulatory path forward following the recent submission in Europe? How are your discussions with FDA progressing? And are there any meaningful differences between the FDA and EMA? Thank you. Albert Bourla: I am not sure I understood the second question. Lyme disease. Lyme vaccine. Oh, the Lyme vaccine. Okay. Yes. So, Alexandre, thank you, Alexandre, very much. Aamir, maybe you can speak a little bit about our GLP-1 in China and what to expect from it. Alexandre de Germay: that is right. So thanks for the question. As you said, Alexandria, we have introduced ecnoglutide in China at the end of April of this year. We are satisfied with the way we are we are progressing. We are learning a lot through the through the launch of ecnoglutide in China. And the things that we are clearly understanding is there are very different segment within this overall chronic weight management categories with patients that are all qualifying for, for the definition of chronic weight management, but some of them had more an aesthetic-driven purpose with a very different profile of product that they will be looking. And their way of acquiring this product is actually very different. That the way on the other end of the spectrum, which are very heavy people looking for much more efficacy, tolerability, it becomes a second point. And so, clearly, what we are learning is it is confirming our strategy that if we want to be successful in chronic weight management, we need to have a portfolio. And you need to have a portfolio also because you will need to activate all those different channels, and the cost of activations of those channels will be amortized across the portfolio. So those are very, very key confirmation of our strategy. Now specifically to ecnoglutide, as you know, we also understood from the get go that to be successful in chronic weight management in particular, you need 2 things. Of course, you need a good profile, and we have a very competitive profile, but you also need to have type 2 diabetes because it is opened up the hospital channel, but it is also opened up for local regulations, the ecommerce channels. I am very happy to say that since, the end of October, we got the approval of our type 2 diabetes, which opened up that channel. Second thing, our competitors have also access to reimbursements, and this is very important to compete effectively. And so I am also very happy to report that since June, we passed the NRDL committees, and now we are expecting the final review by, the end of this month. So that hopefully we can introduce our products into the hospital reimbursement system. The combination of those 2 things will really be the start of our penetration of the market. Albert Bourla: Thank you. And then from my perspective, it is fascinating to see how the commercial model around the obesity is so different. Than anything else. And for us, reminds us really the times of the Viagra launch, because there are a lot of similarities. People are willing to pay out of pocket for products that they value irrelevant if they are reimbursed or not. That creates dramatically different size in the international markets. The second was that because of the consumer nature of these launch, the ecommerce and the Internet as it happened with Viagra. That was the first product that was available, basically, on Internet, plays a key role And, of course, we are pretty much into that space already rather than if we have it already launched the obesity product because our vaccines and our Paxlovid, and our NURTEC. And our migraine products, I think they are really having significant channel through the Pfizer for all, which is our consumer, let's say, web portal to the website, So I think it is. We are learning a lot right now in China. After we have learned a lot in our prior work. And to add another dimension, AI is changing the way that promotions are happening right now. And not only at the physician's level, actually, even more importantly at the patient's level. So we are learning a lot and we are very happy that we are entering this market because I think we. it is was.it is cut for our capabilities. With that, I will ask Chris to comment on the Lyme disease. Chris Boshoff FMedSci: Thank you for the question. We all know Lyme disease incidence is now the burden of the disease is increasing globally. The EMA has validated the MAA for Pfizer and Valneva's Lyme disease vaccine candidate with the validation The CHMP will now begin its assessment of the MAA and the CHMP is expected to issue an opinion on marketing authorization in 2027. We have also now filed in Canada and we continue our discussions with the FDA and should provide an update regarding this in Q4 in Q4 of this year. Thank you. Alexandre de Germay: Alexandre, any comments here? Yeah. No. I think it is a it is a very exciting opportunity just to remind you that we already have TicoVac franchise in Europe and we know how to activate tick borne populations in those endemic area because we have a sales force, we have a commercial play with pharmacies, And so we are very excited with the opportunity, the level of awareness of the population significantly higher than what we have in TBE. So as we have built these muscles commercially, once we have the approval, we are very much looking forward for the opportunity to commercialize this vaccine. Albert Bourla: Yep. And, the awareness of the disease, of course, in the U.S., it is skyrocketing right now because we do have of severity and incidence. So we are looking forward to concluding the discussion with FDA and submitting our file. Let's let's go to the next question, please. Operator: Our next question comes from Michael Yee with UBS. Please go ahead. Michael Yee: Great. Thanks. Maybe 2 quick pipeline questions for Chris. On MEVPRO, you guys continue to be pretty bullish. I know there was a formulation change to lower the Cmax and improve the tolerability. Maybe you could comment on how you feel about dropouts and the change in formulation to drive your effect. And then on tilacimig, your trispecific, something you are pretty bullish on, can you just comment on neutralizing antibodies or ADAs, things that can be tricky for bispecifics and trispecifics and how you feel about that. Thank you. Chris Boshoff FMedSci: Chris? Thank you very much. On the first question on mevrometostat, as you pointed out, we did for the Phase 3 study adapt to have a more tolerable dose with food where we decreased the Cmax but see. Similar AUC to what we have seen in phase 1. So we are very confident in the PK data and the dose that was selected for the phase 3 study. Regarding tilrekimig, we have not seen functional neutralizing antibodies or functional ADAs Thus far, you are absolutely correct for any bispecific or tri specific, that is a long term risk. But so far, we have not seen anything impacting efficacy. And in fact, longer term follow-up on the studies we previously demonstrated or showed show us that we do not have an impact on efficacy. So far, so good with it. Very good. Albert Bourla: Let's keep it that way if you can, please. Operator: Next question, please. Our final question today comes from Asad Haider with Goldman Sachs. Your line is now open. Asad Haider: Congrats on the quarter. Cecile, and also many congrats and best of luck to you. A couple for you. First, just on 2027, appreciate the context provided earlier on price dynamics with respect to IRA and 340B, etcetera. But just any additional high level qualitative framing on other pushes and pulls next year to be aware of ahead of formal guidance? And how should we be thinking about your guidance philosophy relative to Dave's broadly speaking? And then looking at longer term, you are reiterating line of sight to high single digit revenue CAGR towards the end of the decade off of a 2028 base. As well as citing operating leverage and margin expansion given the cost realignment initiatives. But consensus numbers are not really modeling that. There does seem to be a disconnect on both revenue and the earnings lines versus your own expectations. So as you examine Street forecasts, what are the key assumptions that you think are getting most mismodeled in the P and L relative to your own internal expectations that you look out towards that period? Thank you. Cecile Guegan: Cecile, please make the comments on both. So thanks, Asad for your question and also for your good wishes. So we will provide 2027 guidance around middle of December like we did last year. So I will only point out, provide high-level key drivers that we are seeing in 2027. it is 1 obviously the LOE impact not only in The US with Ibrance and Xtandi, some other product, but also in international where we are seeing Eliquis being at the end of 26. The other thing that I would say is, obviously, offsetting that is new ramp up and the launch of our. Of the ramp up of our launched and acquired portfolio which, again, as you have seen, is having a very strong performance and still opportunity for growth. And then, obviously, pricing and including MFN and IRA, which we will reflect in our guidance. And then our cost initiative program that will allow us to continue to, 1, invest towards the growth opportunities that we. for the growth drivers that we have on the SI&A marketing and commercial space and that increase the productivity and the first savings. Both on the commercial spend and as well on the general and administrative spend. So that is kind of, like, the key trends for 2027, but, again, more to come as we release guidance later in the year. As it relates to, our high single digit growth, aspiration, versus the street. Is if you look at, where that difference is coming from, it is not really coming from 1 place, 1 product, and so is our growth trajectory either. So what we are seeing as a building block for our growth trajectory are obviously, 1, is a continued growth of our new and acquired product, not only because the market is still growing, our penetration is still increasing, but also on top of it, we are bringing new indications onto those products in order to be able to continue to address more patient and grow our presence on the market. The 2nd thing is on the pipeline. So while there are some obvious products that are making a key difference in our view versus the Street view, obesity being 1, some of the oncology product being 1, What I will say is our growth trajectory does not rely on 1 single product or 1 single therapeutic area. We have a broad portfolio of products several phase 3 ongoing as well as upcoming catalysts over the 18 to 24 months which should give confidence to the outside world also to see the opportunities that we are having in bringing breakthrough to patients in significant area of unmet need. Thank you, Cecile. Albert Bourla: And I would add that me as a CEO, I see the difference between our internal projections, and the street projections, that, of course, creates to me the urgency to check our assumptions. To make sure that in light of different opinions from the analyst, are correct or not. So we have done that repeatedly. And we came to the conclusion that we tell you that we expect to have a high single digit from 2028 to 2033. And we know very well where are the discrepancies. Between the products. And as Cecile said, there are not only on the pipeline, which many analysts, they do not cover, So you have the phenomenon that from 12, 13 analysts that are forming the overall performance of the And it is 31 for some products only 5 analysts. They have this 1 and the others, they do not. So that is this is something that it is expected in pipeline. But we see also very big discrepancies in already launched new products. That there is big difference. I will mention 2 as just examples that I think people need to reevaluate their assessment. 1, it is regarding Nurtec. That we are already close to $2 billion this.the way if you annualize it. And the street has us almost $2.5 billion by year 2020. So I think there is a discrepancy there. I will also mention another example of Elrexfio. Where for a competing product, the street is forecasting $5 billion, and for us $600 million. We aspire to present the profile that is very similar in efficacy and better in tolerability and in side effects. Now remains to be proven but I do not think the $600 million versus every $5 billion is justifiable. Even with the current information. So I think that as more information is coming for our pipeline and the results, I think as more information is coming for the performance, actually, of the new products. And that includes new launches and acquired products, I think the street probably will start adjusting their numbers, and there will be a conversion. Post delay. But with that, I think that we come to the end of our call. I want to say that I am very proud of our performance through the third quarter and the And my thanks goes to my Pfizer colleagues. As I visit with our people, and I do that in our labs and in manufacturing sites and in markets across the world. I see a team with tremendous talent, dedication, striving for breakthroughs that change patients' lives. We look forward to sharing additional updates about our progress And thank you for joining our call today, and thank you for your interest in Pfizer. Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.