Q2 2023 Pfizer Inc Earnings Call

Okay.

Good day, everyone and welcome to Pfizer's second quarter 2023 earnings Conference call.

Today's call is being recorded.

At this time I would like to turn the call over to Mr. Chris Steve Owen Senior Vice President and Chief Investor Relations Officer. Please go ahead Sir.

Thank you Chelsea.

Good morning.

Welcome to Pfizer's second quarter earnings call I'm joined today by Dr. Albert boiler, our chairman and CEO , Dave Denton CFO .

Michael Dalton, Chief Scientific Officer, and President of research and development.

Joining for the Q&A session. We also have Angela Kang Chief commercial officer, and President Global Biopharmaceutical business I mean, your Malik our chief business Innovation Officer, Dr. Chris Ball shop, or cheap oncology research and development officer, and Doug Winkler, Our general counsel.

Before we begin the call I want to remind you of some logistical items.

Also this call another earnings related materials on the Investor Relations section of Pfizer Dot com.

And of course my favorite are forward looking statements. Please see our forward looking statements disclaimer on slide three and additional information regarding these statements and our non-GAAP financial measures is available on the earnings release and in our SEC forms 10-K, and 10-Q under risk factors and forward looking information and factors that may affect.

Future results forward looking statements on the call are subject to substantial risks and uncertainties and speak only as of the calls original date and we undertake no obligation to update or revise any of these statements with that I will turn the call over to Albert. Thank you, Chris Hello, everyone and thank you for joining.

Our second quarter financial results were solid and in line with our expectations.

Non COVID-19 revenues grew 5% progression compared with the year ago quarter.

Revenues declined 3% operationally America as it used to be.

Anticipated revenue declines in both buckets global commitment.

Even with these declines are COVID-19 portfolio.

Contributory.

Business with more than $1 6 billion in combined revenues during this quarter.

Of course, our patient days are equally important.

Because patients aren't the recent weakness.

Through the first six months of the year more than 356 million patients around the world were treated with our medicines and vaccines.

We continued to make progress towards our goal of executing an unprecedented number of launches of new products or indications in.

Pfizer is more than halfway with launching 19, new products or indications.

18 months.

In addition to the six approvals and spark lungs, but.

Okay, Brian Gladden deep.

We had six approvals and four launches in the first six months.

For the second hospitals 'twenty to 'twenty three we expect six additional approvals in six additional launches, including the two launches that occur.

July .

Okay in 'twenty 'twenty, four we expect one approval and sort of launches, which if approved and their combined it with the raised a total of 19 new launches in approximately 18 months.

As you can see in this chart.

This year's losses, we expect the revenue contributions will come largely in the sitcom fossils Twenty-twenty pretty close the first call for lunch. So late in the second quarter.

And then in 'twenty 'twenty four with the additional impact of next year's expected launches, we anticipate anybody greater total contribution for all 19 blocks.

It is important to note.

Over the 19 potential launches could be largely derisked.

Perspective at this point with only one remaining bingo.

Right.

Equally encouraging.

He asked about our pipeline.

Brexit contributed to generate continued generating breakthrough treatments and vaccines, along long hospital 19, which have been discussed.

We recently reported by starting from several exciting pipeline candidates with the potential to be significant excuse everybody's right.

These include.

Phase III data from my basketball and nobody antibody being studied for the treatment of hemophilia a and b.

Regulatory filing acceptance of automobile got beat gene therapy candidate.

The publication in the New England Journal Medicine Phase II results for.

Our vaccine candidate that whole markdown immunization against group B Streptococcus.

And first in human data from our pipeline of potential next generation breast cancer treatment.

All of them.

Kate Hall Syndicate, two and six inhibitors.

Now I would like to provide some commentary on our COVID-19 portfolio.

As you know Pfizer demonstrated impressive.

It's all research and manufacturing capabilities by bringing to the world. The first and most widely used vaccine or treatment for COVID-19.

These scientific breakthroughs could play a significant role in bridging the global health crisis under control and we are very proud of apartments.

The brushy, but these products have generated to date.

Our screen Basket inquiry arena.

Body, seven global blood Therapeutics, which together, we expect to contribute approximately 10 billion of revenues you have 20, sorry.

And finally, the acquisition of suppliers, having been global blood therapeutics are already contributing to our operational growth why would the acquisition pardon me a nice expected to start generating revenues towards the end of the year.

We also remain very excited about our planned acquisition off season.

If approved is expected to contribute more than studies in 'twenty starting revenue.

As a result.

All of this momentum.

Non COVID-19 revenues and more importantly, the success of our COVID-19.

Pfizer has their own revenues have increased export necessarily compare with our 2019 revenue pro forma for the divestitures of Optum and all questions.

Yes.

This allows us to increase investments in R&D and <unk>.

This new revenue base and our expected new product.

Yes.

The increased investments, we are making in R&D and I saw you made this year were size based on sharpen rubbing your Samsung, making genuine for bolt on COVID-19, and non COVID-19 problems.

These assumptions.

So we're incorporating our 'twenty to 'twenty three find out some guidance.

Clear.

This higher level of uncertainty regarding the demand projections for our COVID-19 program then hold better obviously.

For example in.

We estimate at Pfizer to capture 60% market share.

In the first six months of 2023 to one four.

4 million doses, what Ive minister in the U S.

Why is it.

For me to indulge yourself behind though every year projections are market several COVID-19, either.

Our previous expectations at 65%.

However, the vast majority of respiratory vaccinations Hopkins you were in the fall and winter respiratory disease season, which starts in September .

And do you expect COVID-19 Bucks the Mason.

Follow this pattern going forward.

The uncertainty.

Timing of Commandments put myself, Jason what's allowed to be removed with the decision by the FDA and CDC requested change in the composition of the vaccine. So what's the rest of the army ground X would be 1.5 strengths.

We believe this will allow us to commercialize the vaccine in Japan.

Assuming the updated vaccines are approved and available by the end of August .

Yeah.

Thank you.

The uncertainty regarding the vaccine so revenue contributions for 'twenty three and beyond.

Well, it's pretty more when we renegotiated successfully our long term agreement.

This agreement spreads the agreed volumes over four years and why is it puts pressure on this year's volumes. We believe it also provides longer term revenue certainty in this important market.

Similar to what we had experienced with the vaccine.

The second half of the year will play a big euro in informing our expectations for the long term demands will spark slowly.

Utilization of which follows very closely with the COVID-19 infection rates.

We expect a new COVID-19 wave to stop any big rates. This fall.

And this expectation is supported by the increase in frictional rates, we are already see.

Obviously, the severity of disease.

And People's desire for treatment would be fine.

The ongoing dialogue with the U S government regarding when we will transition to a commercial model.

These are the uncertainties.

We are acutely aware, but all of these uncertainties are making it difficult to project the scripts or whatever yourself Pfizer in this area. It's lots of devices and also affecting our stock prices.

The good news piece, we won't have.

Amongst more clarity and second regarding how Oh with 90 projects weren't before even the commercial market.

I will report our third quarter financial results.

We expect the uncertainties to be largely eliminate.

Over here.

This is because we expect the vaccine based on the treatment rates from the upcoming respiratory disease season to be a reliable predictor of strengths in subsequent years.

With some potential upside of course, if it can be nice on flu and COVID-19 vaccine has brought to market conditions.

Additionally.

By that point, the timing transitioning full commercialization of a fourth commandment slug, it shouldn't become clear.

Despite this uncertainty we will continue to invest in I'll call. It 19 portfolio. This year, even if the bonds from the upcoming respiratory disease.

This is very important.

But given that you are also preparing.

Yes.

Oh, it will be 24 total cost base.

With batteries COVID-19 disease.

With it.

Revenue should not.

In fact.

We have already identified specific areas.

Where do we can make adjustments primarily within our corporate banking cost base.

Modest comps and lower than expected.

Dave will provide more details during his remarks.

Next I wanted to set a few quick updates of our planned acquisition of <unk>, which we believe will be major driver of our future success.

She does sir holders recently overwhelmingly approved the plump acquisition, we have already raised most of the external financing needed to fund the transaction.

We also continued to work closely with regulators, including the Federal Trade Commission Big it'll be a commission.

In the meantime, our integration planning continues which will allow us to keep the graph Ronnie.

Only an anticipated close later in 'twenty three.

Emily in 'twenty 'twenty four subject to this the construction of a customary closing conditions.

Last week, we announced the Crystal ball, So Chris joined Pfizer's Executive leadership I see from College, the research and development Officer, and Executive Vice President reporting directly to me.

In this role Chris will lead a new and oncology R&D organization.

And B the single point of accountability.

Our oncology pipeline from discovery to early and late stage student doesn't at all.

This is similar to the stock's currently sending baseball all vaccines R&D organization, which has proven to be quite it put it back.

Pfizer and ceded share a common vision and deliver lifesaving treatments for people living with cancer, which is why I'm. So pleased but after closing.

Chris Oncology leadership team will include talent purpose, driven and highly productive.

From both complex and we've made already anomalous about the people.

Joining chris's leadership team.

We believe this new structure will.

Further accelerate the delivery of cancer therapies, which is crazy because in the battle against cancer Timeslot.

Yeah.

As far as US one of core business principles is to believe that Ross Edwards.

I'm proud to start about in recent months, we have received some wonderful accolades that speak to the roster of building with external stakeholders.

Stakeholders.

We were named one of the 'twenty three 'twenty four best companies to work for by U S News and World report.

We were at least at the Newsweek's list of America's greatest workplaces by 'twenty three.

Okay. So did you have any narrow.

Sperry top hundred score in the 'twenty to 'twenty three.

We argued index.

And our own ratings also received the disability in 'twenty three executive sponsor of the year Award at the National Conference in July .

Oh, yes, sorry can I ask what he thought he is being recognized by the United Nations.

My work working for for MTGE integrates.

These recognitions are very important.

Cause they strengthen.

Well actually that the brand equity that Pfizer.

During the COVID-19 pandemic.

Yeah.

Before I hand, it over to Dave I want to quickly comment on the situation at our facility in Rocky Mount North Carolina.

First all of us at Pfizer, where really but no colleagues were seriously injured when the tornado.

I've said all facilities sustained substantial donuts.

Neighborhoods, where many of our Guardian Leigh Fox.

The local leadership in cars.

Credible job responding to this devastating you bet <unk>.

We are proceeding with bolt urgency and Carlson.

To determine the best way to get decided back online as quickly as possible so as to minimize any impact on patients.

Of course, we are also taking steps to ensure the continued safety of our colleagues and contractors, which remains our top priority.

And with that I will now turn it over like the day after day, Michael will provide an update on our R&D pipeline.

Thank you Albert and good morning to everyone over the past 24 months Pfizer has made important investments to position gets squarely on chat on track to achieve profitable and sustainable growth, particularly in the back half of this decade, we have strategically invested to expand our commercial portfolio and our late stage pipeline.

Strengthen our March market launch capabilities and enhanced innovation through internal R&D and business development actions. These deliberate efforts continued to solidify pfizer's ability to overcome upcoming Eloise and drive sustainable revenue growth, all while enhancing long term shareholder value.

To further support our long term growth objectives, we are executing our capital allocation strategy designed to effectively deploy our cash our strategy is focused on three main pillars first is reinvesting in our business second is growing our dividends over time, and finally, making value enhancing share repurchases.

Yes.

In the first half of 2023 alone we've invested $5.2 billion in internal R&D, we turned $4 $6 billion to shareholders via our quarterly dividend.

<unk> allocated approximately 43 billion towards the proposed acquisition of C. J.

During the second quarter, Pfizer successfully completed a $31 billion unsecured debt offering across eight tranches.

The net proceeds of this debt for debt offering will be used to substantially fund the seek CE Gen acquisition.

The new debt carries a weighted average yield of 493% and a weighted average maturity of 16.3 years.

With our expectations.

On a full year run rate basis, the annual financing costs associated with the acquisition is expected to be nearly $2 billion.

With the completion now of this debt offering the company is positioned to close the <unk> acquisition immediately upon post regulatory approvals.

While we plan to continue investing in our business, we expect to Delever our capital structure. Following the closing of the <unk> transaction.

As we Delever. It is our expectation to return to a more balanced capital allocation strategy inclusive of share repurchases.

Now with that let me briefly cover a few highlights of our quarterly financial performance as Albert said, our Q2 results were solid and in line with our expectations from both the top and bottom line perspective, albeit slightly better than EPS consensus.

As expected in our guidance, our overall Q2 revenues declined 53% operationally.

The contraction in revenue was driven by the anticipated decline in both tax little bit and commodity sales weeks.

We expect these products to transition to a commercial took to a commercial market in the second half of this year.

Our operational revenue growth, excluding our Covid products was in line with expectations at 5% versus Q2 of L Y with strong contributions from the inclusion of both nerd tacky MX Friday as well as the continued growth, but they tend to Cal family.

During Q2, adjusted <unk> expenses were $3 $4 billion and grew 20% operationally versus Earl y.

We continue to invest in support of our upcoming launches and grow our recently acquired products.

Well, it's clear that these near term investments are dampening our current profitability levels. We are laser focused on maximizing the longer term performance of these products.

Now moving to the bottom line, we reported diluted earnings per share this quarter declined by 77% to 41 cents, while adjusted diluted earnings per share of 67 cents declined.

Declined 65% on an operational basis.

Earnings compressed at a greater rate than revenues, primarily due to the steep and anticipated contraction impacts slow with sales during the quarter.

Once again foreign exchange movements continued to Unfavourably impact our results, we do keep reducing second quarter revenues by approximately $280 million or 1% and adjusted diluted earnings per share by five cents or 2% compared to last year.

Now that we are at the halfway point of our 2023 financial plan I'd like to take a moment to reflect on how we are executing across our business, while navigating with incredibly unique and dynamic environment.

As a management team, we remain committed to transparency, ensuring our assessment of the evolving marketplace given the magnitude of launches.

Ongoing shifting nature of the Covid landscape and the continued integration of acquired assets.

Let me begin by elaborating on our full year 'twenty three financial guidance.

We are narrowing our expectations for revenues to between 67 and $70 billion and maintaining guidance for adjusted diluted earnings per share of $3.25 to $3.45 for the full year.

For a more durable and predictable non COVID-19 revenues, we are updating our guidance range to 6% to 8% operational revenue growth.

From a launch timing standpoint, I'll point out that the majority of our 2023 launches are anticipated to occur in the second half of 'twenty 23, and our commercialization schedule remains materially unchanged.

As a company, we always strive to achieve the highest revenue level possible, while maintaining a realist realistic view of the key inputs that inform our outlook.

Regarding RSV for older adults the shared decision, making recommendation by a ship is likely to slow its near term uptake in the U S.

In addition, the recent approval of <unk> in the U S results in a more narrow patient population mineral rich than originally planned these.

These factors coupled with the impact of the damage Rocky Mountain manufacturing facility presents near term revenue challenges.

However, we expect positive revenue momentum as we exit 'twenty 23, and head into 2024.

It importantly, the long term outlook for our non Covid business remains intact relative to our 2030 ambitions.

Turning to turning now to a less predictable and more variable COVID-19 portfolio.

Year to date, we have booked slightly over 40% of the 'twenty, one and a half billion dollar full year revenue forecast for both commodity impacts low bid with the important fall vaccination in respiratory infections season ahead of US we are acutely aware that COVID-19 demand depends on many evolving market build variable variables.

Making the range of potential revenue outcomes increasingly large and difficult to predict with certainty. These.

These variables include the overall level of vaccination in infection rates the speed of draw down of government inventory levels and the mutating by nature of the virus itself just to name a few.

In the interest of public health and with the important fall season ahead of US we are maintaining our COVID-19 revenue outlook for the Yale year, while continuing to invest largely in our variable expense basis to support our cobot products in 2023.

These variable investments are important to support our efforts to reach as many patients as possible helping to ensure that the most at risk individuals are both vaccinated and treated while maintaining our leading market share.

We are proud of what we've achieved through the Covid portfolio and this has allowed the company to invest in support of its growth agenda for the back half of this decade.

Our visibility into future Covid revenues and demands should improve throughout the remainder of 'twenty two 'twenty three as we gain clarity on our more typical annual run rate.

We are well aware that our 2023 profit outlook is currently being dampened by incremental cost in support of our launches as well as higher R&D investments align with the company's current revenue base.

We remain committed to both defending and growing our overall level of profitability.

As Albert mentioned earlier, we expect this false performance of our COVID-19 products to help us more effectively forecast future sales performance.

To that end, if our COVID-19 revenues are less than what we had assumed we are prepared to launch an enterprise wide cost improvement program with the aligned with the longer term revenue projections for our business. This program will be designed to support our objective of growing our operating profit margin and where do you expect to begin to.

Yield results in 2024, and we look forward to sharing the specific details of this program and our upcoming earnings call.

In closing this is an extraordinary time for Pfizer, our confidence and our commitment to our strategy and to achieve our 2030 goals is unwavering and we will continue to focus our efforts to drive growth, while enhancing long term shareholder value and with that let me now turn it over to Michael Thank you Dave.

Today, I will provide updates from a few different therapeutic focus areas starting with breast cancer.

We are working to deliver the next wave of innovative therapies for estrogen receptor positive breast cancer.

The pillars of this strategy are threefold.

Establishing our investigational CDK <unk> inhibitor as the next generation cell cycle the backbone.

Establishing that it gets done.

Next generation endocrine backbone and establishing novel mechanisms.

Like all of our investigational CDK <unk> inhibitor and kept 60 new.

Candidate.

Next Gen combination partners to enhance efficacy.

Our clinical strategy entails ferrous developing assets for the metastatic setting in which other brands is currently the leader in unmet need itself.

Followed by an opportunity to expand to early stage breast cancer, including.

Including the seat carefully naive population and Ed you Ben for Neo adjuvant settings.

Data presented at ESMO from three key investigational medicines from our next Gen portfolio demonstrated and that too much.

In heavily pretreated population of patients with breast cancer.

As a reminder.

The majority of Goldman receptor positive breast cancer the expense load CDK.

Why does seem to get for it is likely to be a major sales cycle right.

You have seen that CDK four six inhibition can lead to neutropenia, which requires more frequent blood tests.

Mostly driven by CDK <unk> inhibition.

At Cros does seem to care for six inhibitor led approximately 30% to 60% of patients experienced severe neutropenia.

The lift in that phase one dose escalation study in patients with whom receptor positive her two negative breast cancer, all of whom had previously received the CDK four and six inhibitor treatment with our CDK inhibitor in combination with endocrine therapy resulted in a core plumbed, we'll get there.

A response rate of 29% clinical benefit response rate of 52% and median progression free survival of nearly 25 weeks.

Combination was well tolerated, which may enable maximum CDK for any of these ships.

Actively planning the phase III randomized study.

In addition, I'd like to highlight encouraging data from the phase one dose escalation study of our novel CDK, <unk> inhibitor, which showed monotherapy activity, including Qualcomm partial responses in breast cancer patients who had previously received <unk>.

Also durable clinical responses were observed in our phase one trial.

Our novel kept fixing it.

As a monotherapy and in combination with endocrine therapy in heavily pretreated patients with breast cancer.

Turning now to blood counts.

Rex you also known as it'll be not subject to regulatory approval is expected to be the anchor when.

Don't anticipate that multibillion dollar franchise.

The FDA decision or the potential first indication in the triple test relapsed or refractory multiple myeloma population is expected this year and we continue to advance the magnitude.

Clinical programs to expand.

Your line three.

In addition development of market participant Watson illness T 62 is underway, including in combination with <unk> to support potential indications in myeloma and acute myeloid leukemia.

Here, we show our Rex you data presented at AAN Jay from the Amendment is EM suite trial in patients with Triple class refractory multiple myeloma, who had no prior exposure to visa direct.

On the left we observed highly meaningful survival.

Let's do a monotherapy with a 50 months overall survival of 57 patients in.

In patients who achieved a complete response.

15 months survival was remarkably 93 per cent.

Underscoring the potential with deep and durable responses.

We can see evidence of broad activity in multi myeloma right with a graph showing our senior agents compete response, eight 5%, which rises to 46% in the substance of patients with two to three prior lines of therapy.

Our ongoing randomized trials are in less pre two did two newly diagnosed population.

Victor approval and Rick you May have key differentiator as such it <unk>.

24.

Turning now it looks like the E N E that give us a little more stuff and mob.

Its primary endpoint with statistical significant and clinically meaningful effects on annualized bleeding rate, where he built it once it starts at 5% of production ABR compacted prophylactic factor replacement and 92% reduction in a door.

On demand texture at least.

My stuffs them up or if its a differentiated mechanism of action and dosing regimen compared to standard of care.

If approved has the potential to be the first once weekly subcutaneous treatment for patients without inhibitors, and the first hemophilia a or b treatment administered.

Patient friendly pen.

As to flip those.

That's one of the submission is expected in the second half of 'twenty three next with Hulu also known as <unk>.

Is the first medicine to receive FDA approval to treat severe alopecia react in both adults and adolescents 12 years and older. It also recently received a positive opinion from the European Medicines agency.

<unk> P recommending body.

It's mostly it's true it has the potential to redefine the standard of care for the pizza.

Let's food is the first of its kind kinase inhibitor.

With a unique mechanism that inhibits both that kind of stuff.

And since the C pulse rates that have been implicated in the end of each area.

In addition, we're exploring its unique mechanism of action could potentially be applied across immune disorders, including with the label.

Phase III studies ongoing and other potential indications.

Finally, we're making excellent progress on the milestones we had set out through the first half of 'twenty four as Albert noted.

We recently received FDA approval for Krabbe, not twin independent USD population.

We have robust strategy in place.

Place to potentially pool different section provided by current pneumococcal vaccines I look forward to share more about this in the coming quarters.

In addition, we recently published phase two data in New England Journal of Medicine, showing I would group B Streptococcus Murtala vaccine candidate was generally well tolerated and generated robust antibody level.

I'll also published natural history study, which was used to determine particularly antibody levels at bell.

These two studies indicate.

The vaccine candidate May offer meaningful protection of infants born to immunized mothers we.

We were highly encouraged that look the capital base and infectious disease experts from the University of Texas Hill.

<unk> independent inland editorial highlighting important future prospects of our <unk> inkjet.

Agenda there.

The progress of the GBS vaccine candidate dove tailed nicely with a positive result, and anticipate the upcoming regulatory decision for our RSV vaccine at Bristol Plug administration to pregnant women.

Reasonable recently received a positive opinion for European Medicines agency cgmp for both older adults and maternal immunization to help protect the anthem.

A brief suites of proof hold items in the U S and under regulatory review for the Nutella indication.

In addition, we remain excited to see the phase two data from <unk>.

By end of 'twenty, three which we expect will enable us to finalize our phase III plan.

Finally, I'll pull out that phase III. So I can start of our interferon beta candidate for the treatment of inflammatory bowel disease.

Which has received fast track designation from FDA. Thank you, let me turn it over to Greece to start the Q&A session.

Thank you Michael you'll see if you could please queue up the callers we have at least 30 minutes for Q&A session now.

Yes, Sir.

This time, if you would like to ask a question. Please press star and one Keith on your Touchtone phone.

You may from milk yourself from the queue at any time that question Stark here.

As a reminder, we do ask that you. Please pick up your handset for optimal sound quality.

Our first question will come from Robyn <unk> with <unk> Securities. Your line is open.

Hi, Good morning, this is nicole on for Robyn.

Just a quick question for us.

Christine.

Can you.

Sure what do you expect the share decision.

So the exit and the last would be and.

Well, we wanted to know if they can elaborate if you guys can elaborate on why you think that.

And I'll spell.

So I'll read them previously that's good.

How do you think <unk> might be impacted.

With that I'll give it.

Okay.

Yes.

Thank you very much maybe under like in answering the question of where do you expect it to services.

Have a big impact on RSV and also do you expect in the U S numbers would we expect any.

Sure.

So first of all we're really excited about the approval for our RSV older adult vaccine and the way I would see the clinical decision making.

It's just that it is a step.

Step towards the full routine recommendation that we anticipate so I think that there is this the way to look at it is that it's a short term effect.

We do expect that with more data that will emerge emerging out of our clinical program that will have an additional opportunity to go back to the CIP and actually get the routine recommendation that we hope for them. So you know over the next year or so as we collect and finalize all data that is really the answer.

So it doesn't change the full opportunity for this particular vaccine it doesn't change the peak it just means that it takes us a little bit longer to get to the peak because of the sheer clinical decision, making that was that extra step that we have to take right now.

And what about the ex U S ex U S actually we had a different filing.

We're able to get both maternal and.

Older adult at the same time, so I think you see slightly different dynamics there in that I'm here in the U S. Omnichannel vaccine will be launching later, but in ex U S O N E.

In Europe there'll be launching at the same time and does vaccine technical committees have not opined yet on those recommendations in particular and in terms of the utilization.

And so well wait that but I think what you have that's different and that's really a great upside is the fact that we have both indications that one.

Thank you very much Andrew I Hope, we gave you what you asked Robin Oh, Great well go next question. Please.

Next we have a more of a <unk> with Evercore. Your line is open.

Hi, guys. Thanks for taking my question I know I heard two different things on the cost cut just now one was that it would be enterprise wide Wow Albert I think you used the word within the Covid cost base I was just trying to reconcile the two and also on Daniel Glib front is it reasonable to expect that if it's below mid teens weight loss you wouldn't move forward. Thank you.

Very much.

Yes.

Of course will be enterprise wide, but what I said it is about the Covey park is going to be the biggest right now units and all the R&D and SG&A across the provinces.

Small small amount so it's there's a lot of other banks and Michael can you speak a little bit about the prospects to move ahead.

Well, we really look forward to get the data.

No we are in parallel to develop them.

<unk> or modified release.

I think we really need to look at the totality of data.

You know its performance on important metabolic pardon me David is its ability to deliver weight loss as you alluded to.

And also of course its tolerability in general.

Simply you.

You know, how well did rock tenn before.

And I remain optimistic that all of our drugs in this class can have a profound effect on weight loss.

Of course, one needs to be maybe at least its course, Yemen right way too far as you have seen also some credit concerns in public media about side effects.

Rights on that so we would really integrate all of that data and make it a.

A decision and that we really look forward to that moment.

Thank you Michael next question please.

Our next question will come from Evan <unk> with BMO. Your line is open.

Thank you for taking my question and kind of a follow up from <unk> I want to focus on the G. L. P. One franchise can you talk about the competitive profile of Daniel clip Ron in its current form considering safety twice daily dosing and efficacy maybe.

Maybe remind us on the timeline to potentially get more on a once daily formulation of this asset. Thank you.

Michael Yeah, you know as I said in my prepared remark, we expect data at the later part of this year.

We are absolutely.

Encouraged and confident that it has a different profile when it comes to adverse event.

It drives a lot of people that we stopped so we don't see that S and E U.

And I ask both do that we will put together the old data too.

You know pending readout prepare a potential phase III program.

And it's a very big sector diabetes and obesity, we have.

Considerable expertise and treat in cardio metabolic patients.

So I really look forward to share more.

Yeah.

Thanks, Diana more plans with you as you move through the quarter. Thank you for your great interest in this important space.

Thank you very much Michael Mayo, where most of the next question. Please.

Next we have Karen Glenda with Morgan Stanley Your line is open.

Great. Thanks, so much for taking the questions maybe two for me David I was just wondering how we should think about steady state operating margin here.

Now looking back pre Covid the company was around mid to high 30% range. So is that how we should think about this.

One you gave us some of the parameters, but just maybe how to think about steady state and then on the messenger RNA a phase III seasonal flu vaccine program. It looks like that trial was upsized based on clinical trials Dot Gov. So just wondering Michael if you can talk through timing of data and help frame expectations. There. Thank you.

Thank you for that and so they started with David Yeah. So a great question as we think about our operating margin long term clearly our objective is to expand that over time.

Clearly it is our expectation to get back to at a minimum a pre COVID-19 levels with one caveat is that we as we go forward, we do have a different mix of products within our portfolio, particularly the vaccine related to Covid as you know that the vaccine given the cost share that we have a profit share that we have.

With our partner does dilute our that product from a operating margin perspective, so misfit.

Mick suggested you should see us back to those levels overtime, but obviously as we cycle into 24 will give you a lot more clarity on all the puts and takes as we integrate C. J as we roll forward from our Covid franchise perspective, how that how that looks as well as all the developments that we have coming out of the <unk>.

Pipeline at this point in time.

Hey, Michael.

Yeah first I.

Salaries of experience, we have with mrna flu makes me very encouraged that this will be a new modality as it was before COVID-19, but no flu that engages to mechanize, the b cells and the T cell that we should aspire for having better efficacy.

Look we have seen with the old.

We are continuing we decided because we just wanted to have more event.

And particularly if have additional of the flu.

<unk> type of events, which were scattered in the newest part of the trial.

And we look forward to update you are hopefully be able to conclude this the idea.

But each year, but we also are putting mitigation adding units.

That can be supplementary.

Getting a total group data package of activity against flu a flu b, but as I said I remain very optimistic that the M&A, it's going to be the next important vaccine to deal with flu. Thank you. Thank.

Thank you very much next question please.

Next we have Chris <unk> with Goldman Sachs. Your line is open.

Thank you two questions if I may on the <unk>.

Essential enterprise wide cost program.

<unk>.

Would have some opportunity outside of the Covid programs.

To consider or can you help us with developed his waiting potentially of R&D versus SG&A or some other component of that and I ask that in part because you've announced some changes for instance in kind of the structure at the top tier of amendment of the R&D with the anticipation of the oncology Seattle Genetics, and then secondly, if I could on the market.

<unk> facility, it's reassuring to hear.

In terms of your own staff, but I think folks are looking to get a sense for the scale of the damage.

And perhaps.

What potential gating factors for getting more information on timing I know that you guys have communicated with kind of your hospital base.

Customers, but any additional insights in terms of magnitude of impact and timing of the recovery and what that could look like from a progress standpoint.

Would be helpful. Thank you.

Alright, let me say a few words about the Rocky Mountain and then I'll ask David to answer the question about the cost Oh I'm sorry.

Program and Jason.

Significant reduction on the order of English courses like always the Rocky Mountains.

Severe the dominance of the hydrogen both the Dod much was mainly concentrated on the warehouse, which means that Oh we.

Bob.

Mark.

Facilities per se the production facilities were not impacted by the hurricanes. So the buildings are spending.

However of course, the utilities were discontinued.

Because I've seen it has got to stop operating in doing this.

Hi, Lee.

Sensitive.

The sterile environment, whether you are losing power.

It's not an easy receipts on them. So we talk specs diamond processes. So like you can stock and additional in salaries will be some of the inventories of materials, but were also destroyed glass and the other stuff that we need to make sure that we're replacing time so.

What I want to say it is that we're feeling very confident about the whole thing will go back.

Our lives, but Stephen we are assessing how long that were paid and we are doing everything we can make sure that we give minimize the short position in the market place because of that.

Let's move to some more color on the course of the divestment program. Yes. So thank you for the question clearly as we develop this program in the back half of 'twenty. Three we look forward to sharing a lot more details as we cycle into 'twenty four and give you a lot of I'll say milestones as you think about both our cost and investment structure going forward.

Importantly, as you know we're extremely excited about the <unk> acquisition that's upcoming here.

Upon approval this will allow the company to refocus its efforts and investments to make sure that we're squarely focused on battling cancer going forward and we think theres, a big opportunity as we align our resources against that franchise in that battle.

To fight cancer, and an opportunity for patients and importantly, an opportunity long term for Pfizer, having said that we will be informed in the back half of the year of our revenue performance specific specifically as it relates to COVID-19 that will inform us the level of opportunity we have to expand our margins into 'twenty four and 'twenty five.

And beyond that will allow us to step back and make sure that all of our cost all our investments are aligned with those <unk> objectives as well as align to maximizing the performance of our in line portfolio as well as the launches that are occurring as we speak in the back half of this year. So again, we look forward to sharing a lot.

More to this from this this will be balanced as you well know between <unk> and R&D and we'll give you that specific breakdown in that specific information later this year and into next year.

Thank you very much nice move to the next question. Please.

Next we have Louise Chen with Cantor Your line is open.

Hi, Thanks for taking my questions here I wanted to ask you first on these COVID-19 scenarios that you think could unfold in the second half 'twenty three any way you could share some of the pain points that you anticipate could potentially happen and then secondly, seeing a lot of headlines.

And the ATR CNS space and just curious if you anticipate any potential competition or meaningful competition. Because then they come into Max. Thank you.

Alright, so on the coffee that wouldn't safety works and then I will ask Angela to comment on boats.

The composition of matter. So it depends on what are the uncertainty. So I think I articulated it stopped with the vaccine the biggest suddenly things like it's a nice all rights.

I think our market share is pretty much I think.

<unk> fractionation rates is what we're going to have to see if at all with his comments.

So that will be a big uncertainty.

And I'm going to start because it was the time of commercialization, but yes because of course, you go with your inventories and your sales to the market and with high prices box has been resolved we can all but it's very likely because we were launched in September because.

F D. A and you can see they asked us to change the inventory basically by creating a new vaccine. So that's the workshop and also.

That uncertainty that existed about the COVID-19 vaccine work.

The European continent.

That was a very long but.

But a big contract and I always have to start thinking about because we negotiated a little bit less for the year because the spread of about four years, but let's say a renegotiated all of us.

Of course, there is hallmark step out in Latin America, and other countries, where perhaps this is not the only ones, but let's say if those are the kind of government as I said, we will know pretty much as it trends in the second quarter, and we will know pretty much [laughter].

But I quite back to where it what is the situation.

End of the year that vaccine would be a very good predictor of what we should expect going forward to work with the only upside if we can have a combined were exceeded with flu.

Or was that it was really but Bob will increase the production of national rate all of our schools.

A little bit more of ourselves because of course, we are cutting their uncertainty off.

Uh huh.

Prepayment rates and exceptional rates and we don't know how that will behave you don't have any benchmark as to see how that goes we know that the treatment rates are holding very close.

Excellent rates and they fixed horizon right now what remains to be seen how that will go off.

Of course, social Samsung Horizon received the market the scripts what your basis is always to win the infection rates are going up but we have some more uncertainty which is the timing of the loans.

Well it depends on Paolo we will agree for dangerous will probably show some transition on this launch with the with very vigorous Gaba. So all of that remains to be seen in at least out of it so not as what we see for.

The key message is this uncertainty will go away.

We will know what to call. It contributes on a stable basis in Pfizer's revenue and we will go from that but maybe if you want anything to add to that unfortunately, both of them. The next question.

And Louise I think when you when you talk about the masco went into account.

The biggest in our biggest differentiator that we're extremely confident about is just the totality of data.

Well, along four dimensions, whether that's clinical data or real world data, we have all cause mortality and CV related hospitalization data our data also relevant in both hereditary and wild type a T. T. R. P. M. So that's unique.

We've also demonstrated significant survival benefit in five years, probably will take us whichever way you look at it.

You compare that with any competitor program I think that we have a highly differentiated and they are an extremely valuable molecule that stacks up well against any competition.

Thank you Angela and they will have the next question. Please.

Next we Havent Mohit Bansal with Wells Fargo. Your line is open.

Great. Thank you very much and maybe a follow up to this fund a little bit.

So thank you for all the time say antibody.

So is it fair to say that I mean, clearly trends that <unk> seen so far at least sales trend that has been below expectations and you want to see one more quarter before you adjust expectations I'm asking just because if I look at that.

It seems like you still expect <unk> 8 million or so vaccinations in the second half of the in the U S and the number was actually.

Conversion from $44 million or so in terms of administration when hanging around 11 million in terms of shipment. So so.

So just trying to understand is it like is it something that you had there we could be could it get backdrop David Walker.

The Kobe numbers. Thank you.

Yeah.

Yes, I think thanks for the question and I think they actually I guess, we shouldn't get way better feeling it's not like we just want to see another quarter. Once we see the Big Corp.

The respiratory season Colby.

Colby, we always say everybody's seeing thing because that's not a common sense, but the waterfall of going forward the seasonality over the other restaurant excellence.

That's becoming more and more and more clear right and but obviously financials are happening in Bethesda for corporate for the year. So it's not that we are exhausted other corporate wasting <unk> Corp is called me about submissions go anywhere close.

To the flu vaccination rates.

We have a very big beat what we expected.

They are a small fraction of what will happen for true but of course.

So that's why we are growing 2% comp.

I will level. So it's a very very important corridor. There is oh vote for the fresh the households, there hopefully over the year, which is quite significant contribution to the work. That's all going to go up. So we don't really talk much of inventories we kept the utilization of all of that to make sure. We know how big the corporate front.

Sigal will become.

And as I said in the EU, we have I was asked it's very well.

We were not that high.

Okay.

Hi.

We don't know how the in the next wave will be.

We have the rest of the war, but the inventories. They were also most of the year. So we are now expecting about products will start being going either expiring or.

Product will.

The stock more of reordering for many more countries. So that's why the infection rates on where.

Because they are an extremely important so and all of us are happening now.

So once we know them well, we can predict the way mark Thank you very much.

Go to the next question.

Next we have Trung Nguyen with credit Suisse. Your line is open.

Yeah.

Hi, guys. Thanks for taking my question your comments at the long term outlook for non Covid business remains intact relative to the 20 <unk> ambitions.

How are you thinking about the midterm 2025 guide.

Because if you assume the midpoint of your ex Covid twenty-three guide at 7% in order to achieve the 6% 2020 to 2025 guidance ex Covid on our calculations you need to do high single digit growth for that base business 24, and 25 that looks tough, especially as you'll have more.

Eloise So do you remain confident in that midterm guidance.

Yes. Thank you.

And what you saw coming basically from gifts RMB six right. So all the way to 25, I think the impact will not be that high.

Also the guidance that we gave was about 6%, yes, we feel quite confident about where it would be there. So we will continue and we are at 6%.

All of these years I forget the day, Oh, yeah, but non corporate business I think career success over the long distance.

All of the things coming ahead of us, but it is a way better predictable.

I think we are we are we have that.

So I don't think there would be any better.

Thank you for the question.

Let's go to the next question.

Next we have Colin Bristow with UBS. Your line is open.

Hey, good morning, and thanks for taking the question.

Another follow up from Daniel Kang.

The answer in terms of.

When we'll hear about the the once daily formulation and I'd just like to understand your level of confidence that you can make this a once daily formulation without negatively impacting the AE credit call, presumably given that an increase in C. Max.

And then more broadly can you just talk more about how you're going to compete here given.

I think as previously referenced.

Well behind the competition.

The clinical differentiation, but potentially less convenient dosing and.

Yeah, essentially a therapeutic category in which you don't have a major presence.

And then just maybe one other quick one on the pipeline I smoked DMD gene therapy, it's a nice.

Hey, Josh it doesn't seem to get much ad time.

D. C has been weighing on this program or is it just the others, that's what I'm going to take a priority.

Yeah I think.

So market again.

Basically the market and the size of it is creating a lot of interest.

Great.

So the question was about the one day formulation and then also that wasn't really back where we are with D&B.

Yeah, you know.

I hear ya into it once the product and I would say.

I don't see any technical barrier for us in creating that.

We have tremendous experience in modified release formulation and our early days.

As we know what he initiated a while ago.

Tells us we should be encouraged that when it relates to once a day modified release organic lethal and I believe.

We will have such a formulation in a reasonable future.

When could it come to the market if the drug.

Continuous and makes it great phase III.

I think we can have it at launch or shortly after launch so I wouldn't worry about that but I agree with you there.

Once daily modified with ease and sometimes actually improve the tolerability profile.

Smooth and the variability and exposure, which typically reduce gi side effects that have been seen as limiting with these drugs in that so that's why I can see a potential two fold advantage of a M or goes from twice a day to once a day and May also.

Hill uniquely to create a tolerability profile within this drug tests all ruggedness.

In therapy.

I am encouraged that they have to.

So again very positive.

Angle on that.

When it comes to its urgency to get into the market.

Chris you and I have worked very closely on that.

And we expect to be.

But look relatively soon to conclude its rod.

Also ask increased pitch Emily and thank you Michael So the DMD program itself, because it's very important for us not just for them.

<unk> is a gene therapy for patients and families with is absolutely devastating disease.

And we do have an interim analysis later this year for the Sophia trial, the Sophia trial, all patients have not been.

Enrollment in this study the interim analysis will be based not a surrogate biomarker endpoint, but judy functional endpoints will be and we believe that's the best way to measure the benefit of gene therapy in this disease with a puzzle endpoint.

That should come later this year and we'll update you with the final analysis for the study then in 'twenty 'twenty four there was terrific.

We have like.

Like you hook a M.

Biomarker data set up look very robust in our hand, but as Chris said, we want to you know provide patients with even more experience about the potential benefit.

Both are maybe over the next question.

Next we have Kerry holford with Darren back your line is open.

And can some of your questions.

Okay.

It's clear that came on.

Okay.

King.

Okay great.

Kevin It's Jim.

Highlights from previous name for it.

Operational excellence, and then catching up and just kind of like that.

Pacing data.

No.

Actual travelers actually shrunk.

Furthermore, quite stable.

Right.

And then secondly are you seeing a similar strategy.

T I send you a high level second half.

You can picture a patient she.

<unk> even seen.

Great.

Great.

The next yeah, Orange and white sack.

Okay.

Okay.

That's in contrast as contract how big enough.

Chuck policy.

Let me start with the coffee segment microbial can comment, but oh, okay. That's very helpful.

We are very excited about the combination.

And the combination with with flu and cover them in corporate social flu.

RSV.

And we are working and buttoned up we believe our survey about the fact that if.

If we have a combination with a known mrna included although that'll work have likely we expect because of the benefits of a better safety profile. Because you don't have to load a city products RMA into a single injection, but we would be using only to cope with them.

And then what are you as a protein based it looks it was a very benign required amount has reached all of us are working very well no. The question is.

What will happen if the COVID-19 market you seem to be very as monovalent has very very little.

That's why we're break your all in our decision about controlling their costs because if it is very very low.

Although we expect that upside in the combination we will assume the states, but the medical need for a coffee is not about high and as a result, we were alerted you sort of investments in the area and also the fact that our expectations for sales and then the combination will come and we are way more successful about computers.

And also what's the second question I guess about the most aggressive about Michael.

No.

I'm very excited but most definitely all of these projects for a long time and as you know we report the Dol are very encouraging data.

We had 92% reduction in annual beating rate versus on demand.

Really no safety events, that's been associated with other brought products, including in Libra. It's X do you bet against those in a and B, it's administrative without frequent pad.

I think it can be from a medical point of view, a very large product a single option.

A M. B of course, you know when I think about how.

Libre has been such a problem is or he may page, Jim and I see this profile.

That looks so good I'm optimistic that it can do well in both segments.

Thank you very much reservoir to the next question. Please and we are a little bit.

<unk> is supplying so local printers. So they started to be more one question. Please.

Our next question will come from Geoff Meacham with Bank of America. Your line is open.

Good morning, guys. Thanks, so much for the question just had two real quick ones that Angela on traveling are what is long term growth look like clearly you may have a tougher competitive environment.

Just if you lose share you know what what do you think the Tam grew it could.

Could could look like to offset that.

And then Michael you talked a little bit about Nextgen CDK I know, it's super early in development, but is there a risk.

Fit hurdle you have in mind I'm, just thinking about cost benefit post the eye brands L. O V. And also you know considering the competitive landscape. Thank you very much.

So onto the Hollywood setting you are with.

The competitive environment with respect our competitors, but we have some reality stuff, maybe you want to discuss and they'll start were not structural because it's possible philosophy with the question of CDK four seems to have him here in Houston Yo Kai watch.

Well I mean, I want to begin by saying how incredibly probably are off the performance of the entire <unk> franchise.

If you look at the adult the adult indication.

We have.

Ron and I only have like around 23%.

Last year at this time, we are doing all of this growth prior to the fall of excavation season, which is what you'd typically you said the fact that we've been able to bring these vaccinations for what tell US a lot about the work that we've done in pneumococcal disease, how well appreciated it is but also how well our machinery is working not to mention the fact that we have 96% share of the adult.

Indication.

And Pete also and of course being that we went from being 100% of the market today, we share some of that market share without PCB 15, but I just want to remind everyone that that is to be expected and we are exactly where we thought we would be and so from that perspective. We're also.

Really proud of them have perhaps not 13 has competed with patent off PV 15.

I think the important thing to realize is that given the ACI Pea recommendations that we just got a patent not P. What you're beginning to see now is a if they set a reversal of that of that decline and the reclaiming of market.

Market share and so on.

Have the fact that we've seen some accounts purchasing PCB 20 piece now we've seen some accounts switching from <unk> to own patent off 20. The fact that our federal contracts has added <unk> to their register which means that public vaccination and begin and then maybe the one thing I will mention about perhaps not pizza.

It is unique.

Compared to any other pneumococcal vaccine. It shows that we were given the recommendation to vaccinate.

Uh huh.

Two to 18 immuno compromised so that is a whole new population that we'd never had before and so when you kind of bring all of this together and you factor that this quarter alone <unk> franchise generated $1 $3 billion in revenue just this one quarter I think that order of magnitude.

The scale and the competitiveness of our portfolio and we're really excited about what Pat. Thank you you know over the next coming quarters.

It's under the competition with 16.

Steve with respect to English from electricity meters, if I'm not mistaken.

Chris.

Can you. Please just speak about the CDK four and different size in general over there.

Thank you for the question. So as you know E positive spread status as the most common catheter globally for women.

Very proud that we can build on our leadership in cell cycle inhibition with eyebrows.

With three best in class potential asset CDK, both specific inhibitors CDK to specific inhibitor in a cat six specific inhibitor all three with significant potential to transform treatment in the future with ER positive breast cancer with CDK, Paul we have seen more complete I'll continue at C. D card gold target.

Rich and potentially improved tolerability due to reduced CDK six inhibition and as Michael pointed out CDK six lifted the hematological better ability, we know that epithelioid, south specifically highly expressed CD pay full and Thats why I said important to specifically target CDK four and what we've seen as Mike pointed out.

That is why we need to pay me, a 15%, but that CDK <unk> inhibitor, that's because 60 per se as expected with other CDK <unk> inhibitors. We don't we've also not noted any grade three diarrhea, and again, that's very different from what you know from some of the other CDK four and six inhibitor with accelerating legislation.

It's about 50 with a third study in second line post CDK six with recently chose <unk> and 30% overall response rate in a heavy pretreated population and we also starting populations with TDK pulp that city, you got two as well as CDK full without potential next generation backbone of equals seven.

One of the tickets brand, which we are co developing with albeit.

Thank you very much.

It looks like the next question please.

All right next we have Tim Anderson with Wolfe Research Your line is open.

Hello. Thank you if I could go back to the Covid guidance investors have been cautious not only on the level of your prior guidance for 'twenty three but also the shape of the future revenue curve beyond 'twenty. Three so my question is on the ladder.

For the future curve are you confident still and think that 2023 should be the trough and then you'll rebound to some higher level of sales in 2024 and beyond and see kind of continued growth from that point forward or is that now a more uncertain two thank you.

Yes, I think but this year's utilization.

The market place.

Form the basis that we can predict reliably for the next year. So I don't think we're being much different because there will be no different cartridges in the market right vaccination regimen central and then the treatment and fixed rates also would be after new year indicative of what we should expect.

Clearly.

We will have to deal with some inventories movements and this year was a transition year, because they're going to do your prices and theyre going to absorb some of them but of course, they said, they're so far should before we got to that number for them said before it would become but should be the base in life it should be higher.

And What'd you should see this year, but Bob provided but we have a reasonable origination and the treatment rates for park slope. So that's why I say about the graduate to see what would be the auction this year.

But what won't be they keep utilization as I said of course next year. All these inventories and price of document things wouldn't be very clear what the what would be.

So thank you very much for the question has moved to the next question.

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

Good morning, and thank you for taking the question and for all the transparency on your on your thought process on the covered side plenty plenty. Good great questions asked this morning, I guess, one I want it Didnt get addressed is Ah you out license or T. O N E late last year.

Your.

Your partner, then turns around and sells it for quite substantially more.

I guess, so to be a bit provocative Albert where Pfizer shareholders well served by this course of events would love to give you the opportunity to address that publicly thank you.

Oh, Thank you kind of and forgive me if there's opportunity.

I also thank you for recognizing the profile. So I think that's a very important figure out when there is uncertainty which is all in all the scenarios and the parameters are and what the actions that could be potentially put a good word because it matters. It's not it's supposed to be able to one day and let's see.

What is the situation.

Have we service or hold it.

The vessel behind it for me thanks.

Divesting fighter and obviously I'm not going to comment on the rumors and speculation or the potential prices attached to any different transactions.

I'll say, we're very pleased with our tier one TV partnership with right and we do thank shareholders roster. So as a reminder, why we entered this we entered this as an R&D portfolio prioritization decisions. So from time to time.

We make decisions as part of our disciplined process to our partner R&D programs or we think it is better to share the risk or the cost with a partner and in this case TV covers all of the R&D costs going forward and that frees up significant R&D capacity for Pfizer to invest in high priority programs.

But we still retained value in this program in three different ways, we added 25% equity stake in Taliban, Yes, Paul ex U S and ex Japan rights and we earn royalties on the U S and Japan sales. So taken together. This collaboration allows us to keep more than 50% of the total value of <unk> with <unk>.

Zero incremental R&D spend and for a phase III program. We feel this is a very sound move for Pfizer shareholders.

This micro anything's rescue.

You said, it well and I also wanted to punctuate a moment of very many options, we have a strong platform and bispecific in many therapeutic areas, including immuno.

And we do have the tier one eight you bought your antibody that would be very interesting, where we own even greater share. We have shippers specific that's all going into atopic dermatitis.

Unchanged, even in that very same type Qt, Gary we have so many things going on in near term we expect.

Soon approval for express some art and another read out the full accrual and so lots of stuff. There. Thank you thinking about ground mounted competition two months' apocalyptic.

So let's go to the next question.

Next we have Steve Scala with Cowen Your line is open.

Thank you very much I just have an observation than a question, but the observation is that it's still not clear what has changed in your long term COVID-19 expectations versus when you first gave that $30 billion got in six months ago. Since then the prior six months nothing really has changed other than F. D. A action, which doesn't impact the long term. So that's just an observation.

But my question is on van to quell has panned out well it's become a very important franchise yet its exclusivity is not long in either the U S or the EU are there any strategies to get around the B L O.

Or is it simply similar to <unk>, where post Eloise pfizer's well move onto other products. Thank you.

Yes, So why don't you take the question Matt.

Well it is as you say I'm, an incredibly important product and we're just so proud of the fact that its still growing 40 something percent.

This quarter I think when it comes to low <unk> just from the perspective of how we see it a composition of matter patent expires in 2024, but we have patented patent term extension that get us till December of 2028.

In the EU in 2026 in Japan. It was right up to 2029, it's actually I feel like we still have a good runway as it pertains to this product and more diagnoses that we need to do it more patients that we can capture answer then until then to count, especially with the incredibly competitive and differentiated profile that we have.

As you say, we're always and you know working with EMEA.

Looking at opportunities as to you know what might be good fits in into what might fit well into this franchise in this portfolio, but I guess from my perspective with or without it we see an incredibly.

Long opportunity for us to continue to capture that.

Thank you very much Angela maybe go to the next question.

Yes.

Next question comes from David Risinger with Leerink Partners. Your line is open.

Yes, thanks very much.

My question is on Pfizer's mrna flu vaccine candidate please.

And Santa Fe had stayed at its recent vaccines analyst day that first generation M. Rnas.

Against flu will not deliver sufficient strain b efficacy given mrna technical issues.

[noise] targeting strain B. So could you just comment on that and your expectations for your vaccines Southern hemisphere strain B efficacy results. Later this year I know that you know.

There wasn't the emergence of strain b.

In the northern Hemisphere, but I'm curious about your expectations for demonstrating that <unk> efficacy in the southern Hemisphere and then in addition, if you could just comment on your expected Reactogenic city profile for mrna flu versus co Morbidities Reactogenic city.

<unk> profile. Thank you very much.

Great. Thank you very much David very good questions. Michael So all the technical issues that some of your scrubbing already experienced them as well.

I think though are you know.

Friends between maybe the pioneering mrna company is.

Pfizer and of course, there is more there are not that have worked in these technologies and he is.

We have oh itself in five years into it to make an improvement.

The entire mrna chain and I think it just gives us a big leg up leg up and all the experience we had with the Covid vaccines. So I can't really comment on the issues that you're facing I shattered a much more positive I have a much more positive outlook there.

We have in our capability to design mrna vaccines that will be powerful against blue.

And also again to be less waste as we accumulate data and see you know the outcome.

Optimistic about that and realize it.

That requires a lot of capability center.

The florist UCT has actually be in the moderate.

Really good.

That's not that needs to be at all at the end of the doses that we have been testing and young what would the patients Vancouver credit Fine Michael Let's go to the next question. Please.

Next we have Andrew Baum with Citi. Your line is open.

Thank you could you talk about the impact of price negotiation under the outright expressly could you talk to whether you'll be able to collapse. The rebates to P. P M. As in order to offset the impact of let's say adequate price reduction coloring the price negotiations and therefore protect your writing.

Or do you think you'll have to still pay the pbms that Panther flash, even though that being able to buy the drug at a much reduced price.

We're up at a much reduced price and then separately from Michael.

Given the.

Recent acquisition of <unk> and to what extent or planned acquisition of <unk> to what extent do you believe that there's potential to review your existing pipeline and the logistics make room to further optimize your R&D spend to put behind feature in additional assets.

Yes. So why don't you go first who runs at about Wot Io rate would mean in terms of changing the rebates et cetera.

Quite the new situations, where we have to see how it plays but if you want to speak a little bit about the underlying yes sure. So that's exactly right Albert I think of it is just you know it's a it's a you know a.

A new policy and love to understand in terms of how it will play out.

As you say there will be a price negotiation.

But at the same time I think that what we also have to remember Andrew is that Theres, a mitigating factor to.

The fact that more patients likely won't be able to get on.

Off the co pay threshold and that sort of cap, we're going to have is a function of I R. A and so I think it's a dynamic situation, there's lots for us to consider as it pertains to pricing rebates and also a patient utilization of the drug and you know all of this will play out I guess.

As it pertains specifically also to eloquently just to remind everyone that though it's obviously one of our largest drug it's L. A we will be around that 26 timeframe. So whatever the impact is you know will not be I would not be long lasting on our portfolio, because it's losing patent any way around it.

At times.

Thank you very much.

Holding the environment. So we need to go you can see also on the vertical.

On the on the pipeline issue would have made it very clear but.

It seems like we just don't really nothing to the pipeline Austin, So no pipeline assets would be eliminated or reduce or increase as a result of actually wouldn't be crazy because it was a combination but will not be any production from pipeline offers as a result of this acquisition.

The next question please.

Next we have Chris Schott with J P. Morgan Your line is open.

Great. Thanks, very much just a two parter on coming already can you just help me a little bit in terms of I guess, what the updated.

Vaccine being commercialized in September how much of your remaining Covid revenue should we think about in <unk> versus <unk> I'm, just trying get my sense of when we get the <unk> update would that be based on the sales we're seeing in the quarter or more your interpretation of the trend we're seeing for vaccinations, just setting expectations and the second part was on.

The EU contract renegotiation.

Color you can provide on how different I guess the terms ended up being for 2023 relative to what was reflected in the 2023 guidance. Thank you.

Yes. Thank you very much I can take it very quickly. If you can see we will have basically July August September in the third quarter. So the vaccination with a new one which starts in September hopefully we of course are what we expect is that we will have approval by the end of the also the auction we are ready with pros.

Alright enough. So we have so production will not be any so normally English upside also in Q3, most of the really too far, but what's really will clarify us.

The end of the three plus social demand for face off with Citi until we've got it.

Present, our Q3.

The results is really the MX national rate Barclays, what's working for them and the met price right because everything I said, Oh, no way better wasn't it.

Very big pocket with some southern Oklahoma.

On the Eagle contract renegotiation.

If you noticed I did.

So a guy that was by then we had some contracts that we didn't expect guidance in Latin America.

But as I've said, but a big part of it. So that's why there's no buy.

By itself is not the reason to do so.

So the guy that's what I'm worried about it really as I said vaccination rates is what will define what is the potential of this vaccine.

Thank you very much Chris and then it was supposed to the next question. Please.

Next we have for Jess Kumar with HSBC. Your line is open.

Hi, good morning. Thanks.

Thanks for taking the question just one for me.

You're doing a lot of acquisitions.

You've done a large one featured recently competed but.

We look forward.

How do you think the you know.

What are the sort of integration challenges you see.

Both on the execution commercial side, but also on the scientific side well, what what are the things that are.

I get you excited versus Florida.

Yeah.

For the season acquisition Alright, yes.

I mean, when you have multiple acquisition, but full of doctors. So just you know you've got multi integrations going on sort of definitely recession, yes. So let me start with what excites us with Susan and I think he is the science behind.

This company the agencies are playing a key role right now more involved in the or a recession in our fight against cancer and to it.

Susan says.

One of the two leading platforms and wouldn't believe is absolutely the best they want so I think that the science along also what excites me lumpy piece, but the season.

She was able to achieve all of this greatness with limited resources right now to be compared to what we are bringing on the table and what we are bringing them on the table on the reasons of course, it's not the only coffee cold, but also has significant expertise in designing the molecules and.

Particularly on the small molecules, we are very very very good. So when it speaks about payloads I think we can contribute significantly improve up.

Secondly, we are thinking about the subject nice way of being able to commercialize those products also a season, but already in the market, where we come because first of all with a global presence.

Susan.

And also in the U S. We will.

Most notable our resources once the whole thing is integrated but instead of local things to be excited now as you rightly pointed out are things happening integrations that we need to be.

And that's one of the week.

Nice set of things that we see as long as the Boston, We've got about five circles things like we did right in the past so.

I didn't know what work is extremely extremely important is to make sure that first of all that would be no called store class as we're putting together of its organization because that tends to be a competitor.

Lucky because oncology companies tend to have very very similar.

You're out of it as more of a big their oncology conference and that was everything they can do instead of our scientists.

The placebo songs Akil, what does this really everything with this call.

Mainly over the great scientists book She's been raised their hand, enjoying chris's leadership in as we're going forward and sign this with our properties.

Information will be coming from season actually many of them were at least the global oncology business in Oklahoma. We are of course, if we do so.

I'm not going to be the Pfizer, one, but they will leave.

The global I'm not the only the season, one, but the girl, Mark, which as Susan plus plus.

Plus the.

The second thing that we need to be very careful because we don't slow down things Andrew.

Okay. So this is something that we have seen when big companies are acquiring small both but many foreigners cros bush doubling their timelines. There was also a couple of them. So far this often but we must by Boyd and in order to avoid or green tremendous pre.

Allow me to make sure but innovation.

It would be in her remarks again after we are all within the two together and I heard four draws on the on.

On of course crews, but he's listening disintegration when describing for months.

And lots of them in place.

Many times when you crack and integration could go wrong and it's good deep C O, which is the one who can resolve conflicts in a corporate.

And make decisions fast because it's very high visibility from them about the topic. So I'm comparing plus this is our biggest and best of them.

Mainly the case, so that's clearly the biggest investment on their minds and we've taken very seriously as one of the most potential exciting opportunities to grow but also we are very cognizant that we should make sure but nothing goes wrong. So I'm personally a.

And Susan this is going to be one of our biggest banks as you can see going forward. So we are using all our experienced the best people.

Very good at risk because canvas little bits of teams is beatable retinol and they are working like one.

And they are all comedy where see the new seasons, plus Pfizer oncology portfolio of growing faster than when we weren't alone.

And with that we'll move to our last question.

Yes.

Our last question will come from Michelle Rivera with top research your line is open.

Good morning, and thank you for taking my question.

The status of the DMD gene therapy program have you finalized dosing patients I better statement at a recent conference that you finalized screening patients. So I wasn't sure whether that meant that the trial had been paused. So some clarity around that.

As expected that would be helpful. Thank you.

Chris you want to Rami D&B Ungula recently argued for a supervisor to micros, they're supposed to do with it. So can you just give us a little bit very quickly what is the stops and yes. Thank you.

The as I mentioned earlier, the clinical trial has now completed enrollment.

As you pointed out and <unk> dosing for the last couple of stations to a protocol amendment that would be very confident that we will go ahead and have the interim analysis. Later this year based on our social endpoint, which will be substituted also or.

<unk>.

Which will be with.

With the biomarker data, but also data as well as biomarker data later this year and then the final analysis for the full study and in 2024. We've also had fully enrolled now.

And earlier age groups patients between two and three adults and placing itself in that as well.

We are looking forward to say the data later this year.

Thank you very much in summary, I think we had a solid quarter continuing to invest to support our unprecedented 19 potential launches in a nice my theory is doing very well the plan is executed.

Time lines.

Pipeline and value, creating revenue generating business development opportunities like season, which as I articulated exhausting. The question before but it is clearly a big bedroom are very very big opportunity moving forward.

Over the next three months, we look forward to moving beyond the current uncertainty.

Due to our COVID-19 related revenue. So we have better clarity by the end of the year, we said it.

So that would be removed almost the philosophy.

But the extent of any adjustments to our cost base with 24 in New York, We are ready to make an artist.

I want to emphasize that the biggest uncertainty the long term is a special day, some software and sometimes it's like with commercialization.

That's the question was part of the vaccination of and it's really been raised so if youre going to see I think we performed what is what we should expect for the years to come with only upside that we've got the combination of budgets moving.

All these factors together, we remain confident in our ability to deliver robust operational growth and deliver meaningful shareholder value through the angles educate and Europe and that we will bring our call to a close thank you for joining us and have a great rest of your day.

Yeah.

Thank you ladies and gentlemen, this does conclude Pfizer's second quarter 2023 earnings conference call.

We appreciate your participation and you may disconnect at any time.

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