Pfizer Inc. Q3 FY2025 earnings call

• Agreement with the U.S. government removed uncertainty on policy fronts, including prescription drug costs and U.S. tariffs.
• Proposed acquisition of Metsera is seen as valuable, with Pfizer confident in creating value and advancing innovation in obesity treatment. However, there are antitrust concerns with Novo Nordisk's attempt to acquire Metsera.
• Licensing agreement with 3SBio enhanced the pipeline, with positive Phase II data for SSGJ-707 in metastatic colorectal cancer.
• R&D pipeline highlights: Padcev in combination with pembrolizumab showed survival benefits in cisplatin-ineligible muscle invasive cancer; Braftovi and Mektovi showed median overall survival benefit in metastatic non-small cell lung cancer; XTANDI showed overall survival benefit in non-metastatic hormone-sensitive prostate cancer; progress in sickle cell disease program with FDA allowing resumption of enrollment outside Sub-Saharan Africa.
• Commercial portfolio performance: Vyndaqel family, Nurtec, and Padcev contributed to growth; Prevnar family had mixed performance in U.S. and international markets.
• Cost improvement measures drove operational efficiency, with adjusted gross margin at ~76% and plans for $7.7 billion in savings by end of 2027.

In the third quarter of 2025, Pfizer's revenues were $16.7 billion, a 7% operational decrease year-over-year, largely due to COVID product declines. Non-COVID products showed solid performance, growing 4% operationally. The Vyndaqel family achieved 7% year-over-year global operational growth. Nurtec led the oral CGRP class in primary care penetration in the U.S. The Prevnar family had 17% year-over-year international additional growth, but the U.S. experienced a year-over-year decline in Prevnar 20. Padcev achieved 13% year-over-year global operational growth. Abrysvo had 75% year-over-year operational growth in international markets.

• Raised the range of adjusted diluted EPS guidance for full year 2025 to $3 to $3.15 per share.
• Full year 2025 revenues expected to be in the range of $61 billion to $64 billion.
• Adjusted R&D expected to be in the range of $10 billion to $11 billion, effective tax rate ~11%.
• Committed to maintaining and growing dividend, with plans to provide 2026 guidance by end of 2025.

• Antitrust concerns related to Novo Nordisk's proposed acquisition of Metsera, with Pfizer arguing it violates antitrust law.
• Competition impact on products like Vyndamax, with sequential decline due to new competitors.
• Uncertainty in COVID product demand, which affected revenue.
• Legal processes related to the Metsera acquisition and potential challenges in integrating new assets.

Q: Curious about Vyndamax's performance facing competition and Padcev's commercial uptake despite strong data.

A: On Vyndamax, it's still the leading ATTR-CM product with strong demand growth offset by IRA manufacturer rebates and payer contracting. On Padcev, moving from drop ship to wholesaler model in Q2 affected Q2 sales, but expected to return to growth in Q4 with potential from MIBC indication.

Q: Comment on the legal process ahead for Metsera and Pfizer's argument against Novo's acquisition.

A: Pfizer argues Novo's deal is anticompetitive and an illegal end run around antitrust laws, continuing to pursue legal resources.

Q: Plan if Metsera doesn't work out and on 2026 guidance framing.

A: Pfizer remains active in business development across geographies, with 2026 guidance to be provided by end of 2025 wrapping up '26 puts and takes.

Q: Ranking of manufacturing investments vs operational cost efficiencies.

A: Both are priorities, with plans to invest in U.S. manufacturing and improve operating infrastructure while achieving cost efficiencies.

Q: Factors supporting FTC's early termination of HSR waiting period for Metsera deal.

A: FTC's decision was based on antitrust concerns regarding Novo's dominant position and potential anticompetitive effects.

Q: Thoughts on Metsera's R&D data and Phase IIb trial in atopic derm.

A: Pfizer is eager to see Metsera's data, and the Phase IIb trial in atopic derm is for a STAT6 inhibitor, with ongoing optimization of dose and formulation.

Q: Metsera closing impact on dividend and delevering.

A: Dividend growth and delevering depend on productivity improvements and balance sheet management, with share repurchases less of a priority for now due to business development activities.

Q: Modeling of balance sheet capacity for dealmaking and 3SBio data flow.

A: Pfizer has ~$13 billion of business development capacity, and 3SBio data flow includes Phase II and III trial results in lung cancer and colorectal cancer, with additional data to be provided at SITC and other events.