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

Good morning. And welcome to Pfizer's earnings call. I'm 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 of 2023. Our earnings materials can be accessed on the IR website at investors.pfizer.com. I'm joined today by Dr. Albert Bourla, our Chairman and CEO; Dave Denton, our CFO; and Dr. Mikael Dolsten, President, Pfizer Research & Development. Joining for the Q&A session, we will also have Angela Hwang, Chief Commercial Officer and President, Global Biopharmaceuticals Business; Aamir Malik, our Chief Business Innovation Officer; Dr. Chris Boshoff, our Chief Oncology Research & Development Officer; and Doug Lankler, our General Counsel. Before we get started, I wanted to remind you that we will be making forward-looking statements. I encourage you to read the disclaimer on slide 3. Additional information regarding these statements and our non-GAAP financial measures is available on 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, speak only as of the call's original date, and we undertake no obligation to update or revise any of these statements. With that, I will turn the call over to Albert.

Thank you, Francesca. Hello, everyone. And thank you for joining us today. Pfizer continues to have a far-reaching and positive impact on human health. Through the first nine months of the year, more than 457 million patients around the world were treated with our medicines and vaccines. Compared with the first nine months of 2022, we have reached more patients in several key therapeutic areas, including oncology, cardiovascular disease and anti-infectives. Patients will always be our North Star, and these figures serve as a testament to our leadership in innovation and our commitment to understanding and serving patients' needs. During the third quarter, we were encouraged by the continued strong performance of Pfizer's non-COVID products, with revenue from these products growing 10% operationally compared with the year-ago quarter. We saw significant contributions from new launches and robust year-over-year growth for several key in-line brands. Our recently launched respiratory syncytial virus, the RSV, vaccine – it's called ABRYSVO – contributed $375 million in US revenues. With the recent approval of the maternal indication, Pfizer is the only company with an RSV vaccine approved for preventing RSV in older adults and in infants via maternal immunization. We believe ABRYSVO will be a significant and growing contributor to revenue as many customers have indicated to us that protecting both populations with one vaccine is desirable and a competitive advantage for ABRYSVO. In the US alone, there are approximately 80 million adults over age 60 who are eligible for RSV vaccination, and an estimated 1.5 million pregnant women are eligible for maternal immunization with our RSV vaccine between September 2023 and January 2024. Nurtec, Vydura and Oxbryta, which were acquired in the fourth quarter of 2022, contributed $233 million and $85 million in global revenues, respectively. For Nurtec, in the US, oral CGRPs represent about 17% of the migraine market, and the unmet need is high. We believe oral CGRPs can ultimately be the first-line therapy for migraine and could eventually account for as much as 40% of the overall migraine market. Primary care is a clear source of potential growth in the migraine marketplace. Year to date, primary care healthcare providers wrote more than 6.1 million prescriptions for Triptans compared with approximately 1 million for oral CGRPs, which highlights a significant potential opportunity for growth. Regarding Oxbryta, there is significant burden of illness and unmet need for patients suffering from sickle cell disease. An estimated 12 million people around the world have SCD, sickle cell disease, with the highest prevalence in countries with the lowest resources. While in the US, 95% of children survive to adulthood, 99% of children in other regions will die before they reach their 5th birthday, many without ever being diagnosed. Our Vyndaqel family of products, including Vyndaqel, Vyndamax and Vynmac, recorded 47% operational growth globally compared with the third quarter of 2022. This growth was driven largely by continued strong uptake of the transthyretin amyloid cardiomyopathy indication, primarily in the US and developed Europe. We estimate there are between 120,000 and 150,000 people suffering from ATTR cardiomyopathy, with the majority still not yet diagnosed. The largest unmet need continues to be the lack of general understanding and ability to diagnose this deadly disease, which is why we are focused on educational activities to expedite diagnosis and get appropriate patients on to treatment with the product as the proven standard of care. Such efforts significantly contributed to this quarter's revenue increase in the US. And our Prevnar family of products, Prevnar 13 and Prevnar 20, saw global revenue rise 15% operationally compared with the year-ago quarter. This increase was driven primarily by strong patient demand for Prevnar 20 Adult in the US, the US approval of Prevnar 20 Pediatric and associated stocking, and growth of Prevenar 13 Pediatric in certain emerging markets. These were partially offset by anticipated lower market share in the US for Prevnar Pediatric due to competitive entry. Of note, Prevnar 20 Adult remains the category-leading pneumococcal vaccine for adults in the US with a 95% market share in the third quarter. Year-to-date, revenues for our non-COVID products have grown 7% operationally, and we remain on track to deliver 6% to 8% operational revenue growth for these products for the full year. We continue to progress toward our goal of executing an unprecedented number of launches of new products or indications. Recent milestones include US and EU approvals and launch of ABRYSVO in pregnant individuals; US approval and launch of Elrexfio in relapsed refractory multiple myeloma; US approval of our Braftovi+Mektovi combination in BRAF-mutated metastatic non-small cell lung cancer; US approval of VELSIPITY for moderate to severe ulcerative colitis; EC approval of Litfulo for severe alopecia areata; and US approval of PENBRAYA, the first and only pentavalent vaccine that provides coverage against the five most common serogroups causing meningococcal disease in adolescents and young adults 10 through 25 years of age. To date, we have now executed 13 of the 19 originally identified potential launches, with four other products approved and preparations being made for their launch. In fact, five of the six remaining potential launches have been largely de-risked from a technical perspective. The only one remaining would be our mRNA flu candidate. Given our recent positive results from our next-generation mRNA flu/COVID combination candidate and pending results for our 65-and-older first-generation Phase 3 standalone mRNA flu study, timing for our standalone mRNA flu is now expected after 2024. If successful, our next-generation mRNA flu/COVID combination candidate is expected to market in 2025. Mikael will share more about these programs shortly. We remain excited about our proposed acquisition of Seagen and the dramatic impact we think this combination can have on human health. One in three people will be diagnosed with cancer in their lifetime. So, conquering cancer would have an almost unimaginable impact on humanity. We recently gained unconditional antitrust clearance from the EC, and we continue to expect the transaction to close in late 2023 or early 2024, subject to customary closing conditions, including clearance by the US FTC. We have raised $31 billion in acquisition financing so far and continue to expect incremental 2030 risk-adjusted revenues in excess of $10 billion and expected cost efficiencies of $1 billion to be realized by the end of year three post-closing without impacting any R&D programs. With that, I will turn it over to Dave. After Dave, Mikael will provide an update on our R&D pipeline. So Dave?

Thank you, Albert. And good morning. Before I review this quarter's results, I will address a couple of topics that have been top of mind with investors since our announcement on October 13th. These topics relate to our future US government Paxlovid revenue forecasts, as well as our multi-year cost realignment program. With respect to revenue recognition associated with the amended agreement, the US government is expected to return an estimated 7.9 million EUA-labeled treatment courses and, in return, will receive a volume-based credit at an approximate value of $4.2 billion at the end of 2023 for future treatment courses. Pfizer will also provide an additional 1 million treatment courses into the US strategic national stockpile. As a result of all that, Pfizer has an obligation to deliver an estimated 8.9 million treatment courses for which we will record approximately $4.2 billion of revenue beginning in 2024 as we deliver treatment courses. It is important to note that there is no cash compensation for the estimated 8.9 million treatment courses delivered. Regarding our cost realignment program, I want to reiterate that we expect to achieve at least $3.5 billion of net cost savings by the end of 2024 versus the mid-point of our August 1, 2023 SI&A and R&D guidance. We expect $1 billion of targeted savings in 2023 and expect an additional savings of at least $2.5 billion in 2024. In a moment, when I review the components of our full-year 2023 guidance, you will see that we have lowered the midpoints of both our SI&A and R&D guidance ranges by $500 million, respectively. Now, turning to the quarter, our Q3 results, both top and bottom line, were significantly and negatively impacted by our COVID products. Revenues declined 41% operationally, the result of the decrease in both Paxlovid and Comirnaty sales, while adjusted diluted loss per share was also significantly impacted by $5.6 billion of non-cash inventory write-offs of COVID related inventories. I want to emphasize, as Albert stated previously, that the operational revenue growth of our products in Q3, excluding both Paxlovid and Comirnaty were strong at 10%. Contributing to this strong performance was our newly approved RSV vaccine and the families of products associated with both Prevnar and Vyndaqel. Additionally, our recently acquired products, Nurtec and Oxbryta, also contributed to this strong growth. Our reported diluted loss per share of $0.42 and adjusted diluted loss per share of $0.17 in the quarter are primarily the result of the decline in Paxlovid and Comirnaty sales and the non-cash charge related to write-offs of COVID-related inventories. The inventory write-off of $4.7 billion for Paxlovid and $900 million for Comirnaty negatively affected adjusted loss per share by $0.84. Foreign exchange movements had a de minimis unfavorable impact on third quarter revenues and increased adjusted diluted loss per share by $0.04 or 2% compared to LY. Now, let me briefly touch on our full-year guidance. Given we updated our full-year revenue and EPS guidance on October 13th, I am just going to hit a few of the highlights. Total company full-year 2023 revenues are expected to be in the range of $58 billion to $61 billion versus previous range of $67 billion to $70 billion. Importantly, we continue to expect 6% to 8% full- year operational revenue growth for non-COVID products year-over-year. As anticipated, the majority of this growth is occurring in the second half of the year, given the timing of new product and indicated launches. I want to remind you that, beginning in Q4, we will overlap the acquisitions of Biohaven and GBT last year, which we completed on October of 2022. Adjusted cost of sales as a percentage of revenue is expected to be in the range of 41% to 43%, primarily the result of the $5.6 billion non-cash charge related to inventory write-offs for our COVID products. Adjusted SI&A expenses are expected to be in the range of $13.3 billion to $14.3 billion, and adjusted R&D expenses to be within a range of $11.9 billion to $12.9 billion. The mid-points of both ranges are now $500 million lower than our original guidance. As a result of all these, the company now expects full-year adjusted diluted earnings per share to be in the range of $1.45 to $1.65 versus the original guidance range of $3.25 to $3.45. All additional components of our guidance are included in our press release that was issued earlier today. As discussed in prior quarters, our capital strategy is based on three core pillars. First is reinvesting in our business. Second is growing our dividends over time. And third is making value-enhancing share repurchases. In the first nine months of 2023, we invested $7.9 billion in internal R&D, returned $6.9 billion to shareholders via our quarterly dividend, and allocated approximately $43 billion towards the proposed Seagen acquisition. Lastly, in addition to our completing a $31 billion unsecured debt offering in Q2 of this year, we are ready to execute the remaining short-term financing to complete the proposed Seagen acquisition upon fulfillment of the required closing conditions. We expect to de-lever our capital structure following the completion of this transaction, and as we de-lever, we anticipate returning to a more balanced capital allocation strategy, inclusive of share repurchases. In closing, I want to reiterate that our product portfolio remains very strong. We continue to be encouraged by the momentum of our non-COVID products in Q3 and are committed to the successful execution of our new product and indication launches. We expect that the cost realignment program will improve our operating margins, enhancing long-term shareholder value. And with that, let me turn it over to Mikael.

Thank you, Dave. Today, I will share important updates from our robust respiratory vaccine portfolio. Our respiratory vaccines are built upon three cutting-edge platforms that enable us to bring the right science to the right pathogen. These include our mRNA platform in partnership with BioNTech targeting highly variant viruses, our subunit platform targeting viruses that remain relatively consistent season to season, and our conjugate vaccine platform designed to help prevent bacterial infections. We have achieved FDA approvals of vaccines derived from each platform within the last year and aim to further expand our leadership with additional vaccine candidates in development. Today, I will provide information on our standalone flu vaccine candidate, flu-COVID combination vaccine candidates and next gen pneumococcal vaccine candidate. We are pleased to announce that we achieved both primary endpoints in the 18 to 64-year-old cohort of our ongoing Phase 3 flu trial. In the trial, our first-gen mRNA flu vaccine candidate demonstrated non-inferiority and superiority to a licensed flu vaccine at the time of the primary analysis. This represents the first and only demonstration of efficacy and superiority for an mRNA-based flu vaccine candidate. In this age cohort, efficacy was maintained through the trial's end of season analysis, with our candidate remaining non-inferior to the licensed comparator. Safety was similar to standard flu vaccine. The primary and end of season efficacy analyses considered both influenza A and B cases collectively. The vast majority of cases recorded in our trial, and during the 2022/2023 flu season overall, were flu A cases. Immunogenicity data showed robust antibody responses against influenza A compared to licensed flu vaccine. Humoral responses against influenza B were lower than those achieved with the comparator. Recall that our standalone flu vaccine Phase 3 study also includes a 65 and older cohort that we previously shared encouraging T cell data for all four strains from the Phase 2 study in this cohort. Our belief is that the ability of the vaccine candidate to induce T cell responses may contribute to the improved efficacy over current seasonal flu vaccines, particularly in those 65 and older. We expect a readout from this age group later this year. To address the lower B responses seen with our first-gen standalone flu candidate, Pfizer created next-generation reformulations. These were incorporated into our mRNA flu candidates in combination with the Pfizer-BioNTech COVID-19 vaccine, which I will review now. In positive Phase 1/2 topline data announced last week, we observed that reformulation of the lead flu candidates resulted in improved immunogenicity against influenza B, allowing us to meet all criteria for advancement to Phase 3. In the trial, our lead candidate formulations induced robust immune responses, with point estimates for Geometric Mean Titer ratios that were consistent with criteria applied to approved vaccines for all matched flu and SARS-CoV-2 strains. Notably, point estimates for Geometric Mean Titer ratios with selected candidate formulations were greater than one relative to the licensed comparator for all matched flu vaccine strains. The safety profiles of evaluated candidates were consistent with Pfizer and BioNTech's COVID-19 vaccine. Following these positive immunogenicity data, we plan to initiate a Phase 3 study in the coming months. Successfully developing a broad seasonal vaccine franchise anchored around a modFlu mRNA vaccine is a key priority, as it may allow us to tap into the nearly 50% annual flu vaccination rate in US adults. We are taking a differentiated approach in pursuit of this goal, leveraging both mRNA and protein subunit technologies. Our development program includes double and triple combination vaccines to potentially help protect against flu, COVID-19, and RSV. Now, turning to PREVNAR, I'll start by reminding you that this is the only PCV business with an FDA indication for pneumonia in adults. Providing protection specifically against pneumococcal pneumonia is critical. It's the most common form of pneumococcal disease in adults, leading to 150,000 US hospitalizations each year. The prevalence of nonbacteremic pneumococcal pneumonia is more than 15-fold greater than that of invasive pneumococcal disease in US adults 50 and older. PREVNAR's pneumonia indication is supported by the CAPiTA trial, which was enabled by a pneumococcal vaccine-naïve population and proprietary assay. These innovative characteristics make it challenging for others to conduct a similar study, given the high level of pneumococcal vaccine coverage that exists today. CAPiTA's innovative design and landmark results helped establish our leading and differentiated position in the PCV space. To solidify this position, we are committed to pursuing continued innovation. Our goal is to potentially maximize valency and improve immunogenicity while maintaining coverage of the serotypes clinically demonstrated to protect against pneumonia. In line with this commitment, we have been developing a fourth-generation PCV candidate that builds on the PREVNAR business' 20-year-plus of innovation. Our next-generation technology leverages cutting-edge conjugation chemistry, carriers, and reformulations. Using these new proprietary vaccine technologies, we observed a several fold improvement in select serotype immunogenicity in a monovalent Phase 1 study. Based on these data, we are confident that when we move this technology into our multivalent 4th generation candidate, we have the potential to achieve increased valency with improved serotype immunogenicity. We are now advancing our fourth-generation candidate into a first-in-human trial, which is expected to begin in the fourth quarter of 2023. Finally, I will leave you with our list of milestones and call out the recent approvals of VELSIPITY for ulcerative colitis and PENBRAYA, the first pentavalent meningococcal vaccine. Pfizer has delivered more than a dozen regulatory approvals this year alone. I'll also note the recent launches of ABRYSVO for maternal immunization and ELREXFIO in multiple myeloma. Thank you. Let me turn it over to Francesca to start the Q&A session. Francesca DeMartino Thanks, Michael. With that, let's start the Q&A session. We will answer as many questions as time permits. And I will be available after the call to answer any follow-up questions. Operator, please assemble the queue.

[Operator Instructions]. Our first question will come from Robyn Karnauskas with Truist Securities.

I think I have a big picture question on your new launches, which is extremely important for your growth. Are you seeing any impact given, I think, vaccine fatigue that we've seen with COVID impacting RSV and pneumococcal vaccines? And how do you think about that impact as you think about 2023 and 2024? Do you think that will dissipate?

First of all, I think it's good when you have a portfolio. And we have a quite strong portfolio because we have RSV, we have COVID and we have pneumococcal in the respiratory front. But I think the biggest impact will be when and if we have combination products. We think that combination products will – because of their convenience, because of vaccines are preferred by payers with zero copay will increase basically the volumes and vaccination rates of all vaccines because of the convenience of one injection. And I think this is why you saw from Mikael all our efforts right now are in developing multiple combinations, so that consumers and physicians will have choice which ones to administer, always with the same convenience.

Our next question will come from Huynh Trung with UBS.

I have one on flu and then just one on danu. So on flu, can you confirm the comparator in the 18 to 64 and also the 64 age groups was the low dose flu vaccines? Is there a risk FDA is going to need data against high dose flu vaccines? And from a commercial perspective, do you think you still need high dose flu data, the comparator against high dose flu data given that's what's recommended by CDC in the older population? And then on danu, should we just – just on the data that we expect before year-end, what do you need to show in that in order to move it into Phase 3 trials? Is something similar to the Phase 2 we saw earlier this year enough to move it to Phase 3.

On the flu comparator, I can confirm that it is the low dose on the younger population because that's the only one that's allowed. So on the older population, we are having studies now with a very low dose, but we will do also with the higher dose. So we have both. On danu, it's not much to say. We need to wait to see the data. Clearly, when you are moving ahead with a program like that, you need to see the totality of the data and we are working now intensively to be able to have those data presented before year-end.

Our next question will come from Umer Raffat with Evercore.

I wanted to continue on the oral obesity theme for a second. I noticed there's a new molecule, 522, that you moved into Phase 1. And my question is, is the chemical structure and the chemical series akin to the danu GLP-1 programs? And also, Albert, you mentioned you want to wait to see the danu GLP-1 Phase 2 data, but I realized the trial has been wrapped up for a few weeks now. Have you not seen it yet?

Michael, would you like to take the question about the new molecule and the danu?

We are building a platform around the GLP-1 area and also obesity in general with multiple different mechanisms and compounds. We remain focused on the danuglipron readout, as Albert mentioned, as our main opportunity here for getting data to review for obesity and Type 2 diabetes. But there are many indications where GLP may play a role outside the typical metabolic. So this one gives us just more options to explore and have interesting data. And you will see more new mechanism also coming from Pfizer. We have a pretty strong effort here.

Next we have Terence Flynn with Morgan Stanley.

Maybe two for me. I was just wondering, on your RSV launch, how we should think about the potential for revaccination in 2024. And then, on your DMD gene therapy program, I think you've previously talked about having interim data by year-end. Is that still the case and does the recent competitor data make you more or less optimistic in your program?

First of all, let me make a comment that the recent data that we saw about the DMD failures is a very, very bad news for patients. We are really [indiscernible]. I hope there will be a solution for them with the discussion with the FDA, although I can't comment. Now, on our DMD program, I will ask Mikael to comment on that. And then, on the RSV, Angela. Mikael, why don't you start with the DMD? Then Angela, go through RSV?

[indiscernible] we also always said and when someone fails a study. We are very encouraged about getting to the readout. You are right, there is an opportunity for an interim analysis around year-end with final analysis second half of next year. And overall, I think our interim read for DMD have shown a very consistent effect across biomarkers and functional endpoint. And what has been differentiated it so far is that when you look at the functional data we have reported, it has been giving encouraging signals in both the younger and the slightly older boys. And that has not been seen with the other company you referred to. So, in a way, I remain, as earlier, very positive about looking forward to the readout and let the data tell the story. But of course, this makes our gene therapy, in a way, the main game to us.

Then there was a question, Angela, on the RSV.

Well, as you heard, during the HCIP discussions, our recommendation for ABRYSVO today is really one around shared clinical decision making. But we also were – we were asked to bring additional data when they are ready. And so, just to confirm that we will have additional data in vaccine effectiveness in broader populations, we will have safety data also in broader populations, we will also have immunogenicity data in younger populations. All of this will be, I think, available in the next year when we plan to bring this back to the CDC. In addition to that, actually omitted to mention that we'll also have second season efficacy data. So, we'll be able to bring this totality of data together to determine whether the recommendations will change, but also what the vaccination schedule will be. So that's to come in 2024.

Next, we have Steve Scala with TD Cowen.

As was just noted a couple of minutes ago, the danu data has reached its primary completion. It was a while ago. Albert, when you were asked, you stressed the words totality of the data, implying that you could have seen some part of the data. Mikael, when you were asked, you talked about different indications. These are not confidence building statements. So, I'm curious, what have you seen? And, Mikael, you've said in the past, you were absolutely encouraged and confident in the profile of danu? Are you still absolutely encouraged and confident? So that's the first question. Secondly, a competitor spoke to potentially COVID derived decrease in diagnosis of inflammatory diseases, such as UC, and I'm wondering if you've seen any of that.

I think you likely misunderstood my comments on the totality. It has nothing to do with any data that I have seen because I haven't, right? So, the data have not been presented to – I don't think [indiscernible] has been completed yet. So, I will ask also Mikael to comment on that, but don't bridge with anything on the totality of the data. What I meant it is that we are doing this, we are doing the release formulation, which will make it once a day. There are multiple things, but we need to wait and see. We see how competitors are doing before deciding what we will do. But the most important thing is to see what is the efficacy and safety of the study that will read out. So, nothing to read in my comment on historical data. So, Mikael, you want to add…

Yeah, I can just echo what you said so well, Albert. We and I remain very enthusiastic to look forward, to see the data. We have not seen the final top line report coming out. So today, the study is still ongoing but will be available before year-end. Danuglipron has shown, as you know, some really interesting profile as a full agonist and it's our main opportunity and effort for obesity and Type 2 diabetes. We got earlier today a question about new molecules that are coming in. And that's when I mentioned that our additional indications to pursue for such new molecules and we'll also have new mechanisms that are validated that's coming in in oral version. So it just punctuates our big effort we have around both these class and obesity and other disorders.

In essence, he's still excited.

Next, we have Louise Chen with Cantor.

I wanted to ask you on this fourth generation PCV, how much additional serotype coverage will you have? And then, also on ABRYSVO, will that be available to pregnant women in the pharmacy? Or do they have to go to their OBGYN? And then lastly, just on danuglipron again, here, will you also have the modified release data before year-end.

Monadelphous, you want to take the PCV question and danu, but also, Angela, very quickly, ABRYSVO is available at the pharmacy.

Yes, it's going to be available in pharmacies and doctors' offices and OBGYN offices. I think we have a real stocking advantage here, Louise, because anyone just needs to stock one product for two indications for both populations. So I think the uptake is to come. And certainly, the next few months, being that it's the winter, is when we begin to – we believe we'll see some good uptake.

On the PCV fourth generation, I hope you looked at today's data. And what you could see is that we are really the first company that have been able to put in place a whole set of new technology that can bring immune responses to a higher level than have been seen and that allow us to go with even more comprehensive coverage than the current 20. I'm not going to give your curiosity an answer how many serotype. I can just tell you it's considerable more than the 20. On danu, we look upon danuglipron as the once-a-day QD molecule because of the reformulation technologies that were put in place and already generated some clinical data on and are now concluding. So that's really how we look upon danuglipron and we'll have final data on the best formulation option early next year. But as Albert said, we're enthusiastic to look forward to the efficacy data later this year. So very exciting time.

Next, we have David Risinger with Leerink Partners.

I have another question on danuglipron since it appears to be the company's number one pipeline candidate based upon your forecasts. So regarding the Phase 2b results that are expected soon, how should we expect Pfizer to share those results? And then, with regard to the once daily formulation that you just mentioned, Mikael, will that be ready for the Phase 3 start assuming that the company moves to start Phase 3 shortly after the Phase 2b results are generated?

The first question, given the importance [indiscernible]. But with a press release, we've made them publicly available. Now, Mikael, you want to take the second part of the question of David?

Yeah, I can first echo what Albert and I said, we look forward with enthusiasm to get the danuglipron obesity data later this year. And of course, as Albert said, pending totality of reviewing everything we have, we have made a lot of progress and been able to accelerate the QD danu. Now, we're waiting for some more clinical data early next year, but I think it's within our reach. If we decide to do, to start the pivotal study next year to do it with an once a day molecule.

Next, we have Chris Schott with J.P. Morgan.

Just two for me here. First, can you just comment a little bit more on what we're seeing with Nurtec and the ramp relative to your expectations? And maybe just as part of that, just any color on pricing we're seeing within the market today and how we should think about that going forward. And then my second question was on 2024. I know you're not giving guidance today. But as you look at where consensus has kind of shaken out post the COVID and cost restructuring updates, and if the earnings are in kind of low $3 range at this point, I guess just are there any directional kind of pushes or pulls in the numbers that you feel the Street isn't capturing properly and should be kind of thinking about before we get your kind of formal guidance as we look to early next year?

Obviously, it's a little over 2024. I would just say that, clearly, we had a clearing event as it relates to our COVID expectations for this year. So a lot of that risk is behind us as we think about the balance this year. I do expect that the balance of this year will be very informative, particularly in the US as we think about utilization trends, both for vaccination rates, importantly Paxlovid, here in the US that will allow us to have a better clarity as we cycle into 2024 of the utilization around those specific products, which will still be meaningful to us at an enterprise level. Clearly, when we get to providing guidance, we'll give you a lot of information beneath that, so you can get a good sense of our – importantly, our non-COVID products which continue to trend very favorably and very well. And we can layer on, I'll say, the optionality associated with our COVID franchise as we cycle into next year. So, obviously, a lot more to come. We're looking forward to sharing those very specific details after the first of the year.

And then, Angela, about Nurtec launch – not launch, about the Nurtec performance in the marketplace, including the price.

Thanks for the question, Chris, because it's a great opportunity for us to share that we are seeing Nurtec perform just as we expected. In fact, with some really strong performance indicators that I'd like to share with you. First of all, from a TRx perspective, we grew 28% compared to last year this time, and sequentially, we grew 6% versus last quarter. In fact, on October 20, we saw the highest week of TRx's and NRxs to date. That growth is also seen in the number of prescribers. Just this quarter alone, we had 73,000 prescribers writing Nurtec. And we are now moving at a clip of about 23,000 writer a week which is 30% more than Ubrelvy and double that of Qulipta. Another good place to look is also in new to brand starts, right, NBRxs. And when you look at that, NBRx growth for Nurtec is higher than Ubrelvy and Qulipta in all the deciles of physicians, but particularly in the decile 8 to 10, which, as you know, is where the highest prescribers are or who are the highest prescribers. And then, when you look at pill count, we see something interesting there too. We have been very intensely or intently driving our pill pack toward the larger pill pack size, which is the 16 pack because of our prevention indication. And so, when you look at the totality of all the pills or the total volume of pills, we have a leading market share there, more than 50%. And so, I think when you look at all these indicators, at least from the way that we're looking at it, it's very positive story. It's exactly how we see it. The expansion into primary care, as you heard in Albert's comments, is what it is that we're after. And today, only 17% of the entire market is oral CGRPs, which tells you that most of the market is still an opportunity for us and represents growth that we're really, really looking forward to. And I think that we put the right investments in the right places to generate this growth in the future. From a pricing perspective, obviously, it's a product that is rebated, and so I think the way to think about it is that, from a patient perspective, which is where we really put a lot of focus, we want to make sure that our patients are able to get the scripts, are able to get access for Nurtec, especially as you consider that we're trying to mobilize people away from Topiramate and away from triptans on to all CGRPs. So the gross to net effects here are significant. And you see that quarter-over-quarter because we are making sure that we're able to provide access to patients who deserve and are eligible for [indiscernible].

Next we have Mohit Bansal with Wells Fargo.

And I have a question regarding your S1P etrasimod. Would love to get your thoughts on the labels. It seems like you could avoid a lot of cardiac monitoring, but at the same time there is this new requirement of eye exam as well as skin exam. How do you think about uptake, considering these examinations before the start of the treatment, given that these doctors are not used to it?

I'm happy to start on it. I think we have a very robust label for etrasimod. It's the only S1P in this drug class [indiscernible] that have a simple flat dosing and immediate start without any prior need for, let's say, cardiac rhythm exams, like the other prog in this class. All S1P have various eye exams to monitor. And I think our label similarly has a recommendation to do that. So it's really nothing new. And our efficacy data, and you see, has been very favorable. So we are very optimistic that this can be a true best-in-class ulcerative colitis.

I was just going to add to that that, competitively, we believe that we have an excellent efficacy and safety profile. We don't have a need to titrate up, as Mikael said. And also, our assessment of standard versus our competitors at the initiation of therapy. So I think that this is a level playing field that we're in. Certainly patient support is an area of focus for us, right, to ensure that patients are getting the assessments that they need. But we feel that we're – this is pretty standard practice and we'll be able to launch this product as planned.

Next, we have Geoff Meacham with Bank of America.

Just have a couple of quick ones. First, I know Seagen obviously hasn't closed yet. But there's all the emphasis on the ADCs from ESMO. Does it affect how you guys prioritize the pipeline or maybe investments you could make today commercially? And the second question on danu, Mikael, I know a lot has been asked on the upcoming data, but from a commercial perspective, like where do you see the bigger opportunities for differentiation and metabolic? Is it really just oral administration in obesity? Or do you guys look more aggressively at related indications like cardio, renal, et cetera.

Chris, do you want to take a question about the Seagen and the pipeline?

Obviously, we remain very confident that we will close Seagen towards the end of this year, beginning next year. As you pointed out, there's a significant interest now in ADCs because of the potential that they could replace most of the chemotherapeutics in the future for most cancer types. Seagen obviously has a significant track record with both the current approved ADCs from the laboratories and, as you've seen, three potential registration phase trials just read out and passed up to Kaiser [indiscernible] but also with the small molecule to Kaiser. They recently started two Phase 3 studies, one with tisotumab vedotin in combination with pembrolizumab in advanced metastatic, HER2 positive or HER2 low bladder cancer. This is a program that we're very excited about. Already tisotumab received previously breakthrough therapeutic innovation in the US. And they're also just about to start another Phase 3 program in non-small cell lung cancer with the B6A integrin beta-6 antibodies. So we remain very confident in their portfolio and the depth of expertise they're bringing to the development and discovery of ADCs.

I think you asked about how could a new oral GLP in obesity be positioned for maximal attractiveness and using danu as one example, pending, of course, our excitement to see the data. Well, clearly, as obesity and Type 2 diabetes with overweight are moving from being treated from an endocrinologist and metabolic physicians increasingly now to primary care, particularly with the impressive effects of this drug class on obesity and bodyweight. Oral agents in general are preferred. So I think, once a day drugs such as the new reformulated potential danuglipron would have an interesting role there. I think there is also a growing discussion among opinion leaders in the field that the patients regain weight when they stop the injectable. And in general, they are only available for maybe a year. So an oral agent that could be taken for a longer period could also play a really interesting role to maintain body weight at a low level. And finally, you're absolute right, the new data for this drug class suggests that patients could benefit from both cardiac and renal protection. And oral agents allow you to build combination with drugs that already are used in this population, such as the 52, to protect the heart etc. So I think that's why there is such a big interest in drugs in this class.

Next, we have Tim Anderson with Wolfe Research.

I have a couple of questions on danuglipron. Early dataset showed a QTc signal. Do you think that was a red herring that won't show up in later data? To me, when I just think about drug classes and seeing QTc signals, seems like it often persists in later datasets. Second question on mRNA flu. You mentioned that safety is the same as licensed vaccines. Does that mean tolerability was as well? I usually think of safety and tolerability as technically being different from each other.

Mikael, both questions for you. QTc for danu and tolerability of flu vaccines?

We have, I think, more than 1,400 patients on danuglipron and it's a very safe drug. It's a very safe drug. And we look forward to the readout on efficacy, as we have said. before year-end. So that's very straightforward. mRNA flu, you had a very good comment, particularly in initial studies, tolerability is really what we focus on. And tolerability was similar to standard of care available vaccines, or the other mRNA vaccines experienced from Pfizer. And we haven't really had any concerns about safety. So on both tolerability and safety, the statement stands that it looks like previous versions of our vaccines.

Next, we have Chris Shibutani with Goldman Sachs.

Two questions, if I may. On the cost savings program, you've been outlining what the plan is for 2024. But if we look at the pattern of the spending for R&D and SI&A, in the quarter you just reported, I would observe that the magnitude of reduction in the R&D spend was greater than expected relative to SI&A, how should we be interpreting this numbers or anything to read across in terms of the relative amount of cost reductions coming from SI&A versus R&D on the forward? And then a question on ABRYSVO. First quarter sales were solid. Can you just elaborate how much may have been attributable to, for instance, inventory stocking versus actual demand? And if we look at prescription data, looks like from the retail setting, there was about a 30% market share. Is this similar to what you're observing in the broader market? And how is this conferring with your expectations?

Let me ask David to answer the question about the R&D and SI&A expenses. And then Angela will take ABRYSVO.

Chris, on the cost program, I would not read into the allocation of savings in 2023 as it relates to 2024. Obviously, we have a fairly robust program up and running today. We're working aggressively on those programs and beginning to implement those programs. As we cycle into 2024, we'll give you and the markets specific color on how to think about those cost savings as we wrap into next year.

Angela?

We're really pleased with our performance on ABRYSVO. It has exceeded our expectations. You first asked whether this is all about stocking. And I can say that it isn't. Of course, there was stocking effect in the beginning because this was a new vaccine. But we're also closely tracking vaccination rates and uptake. And what you see is that there is very fast uptake that really benefit from the fact that this was approved and in market prior to the vaccination season actually happening. So it was able to ride off the coattails of flu vaccinations, which you know are very high. Right? September, October. We have about a 70% co-administration rate. The performance we're seeing on ABRYSVO is truly driven by vaccinations. To your comment about market share, yes, we are seeing a similar market share to what you have just said. That is because, right now, the retail setting is driving a lot of the vaccinations. But don't forget that that's not where all vaccinations are taking place. We also have non-retail settings such as health systems, doctors' offices, those are also being engaged. And those particular settings, Pfizer actually has a leading preference. They are smaller in proportion, but still. So I think we have to look at all channels of the market. Finally, I think that, just from a momentum perspective, we expect things to continue. The vaccinations really are happening throughout this time now – October, November, December are big vaccination months. From where we are right now, RSV is only 5% of the entire vaccination rate of the eligible populations. So I think that the conclusion is we're very early in the innings of this launch. It's doing better than we thought. But where we are going to be, I think, is a place where there's tremendous opportunity for driving uptake in older adults, but also maternal, which, as you know, we just got the approval for.

Next, we have Carter Gould with Barclays.

Maybe if you go back to oral danu, when we do get the Phase 2 data, what should our expectation be around communicating plans for Phase 3, which I guess is just a quicker way of saying, what's a reasonable expectation for how quickly you could turn around the Phase 2 and start a Phase 3 and how much work Pfizer has already done on that front? And then, maybe just coming out of ESMO, on the back of the EV-302 data and the response with Pfizer saying that reaffirms their expectations or represents upside to their expectations when the deal was originally announced.

On the danu, let me take it, so I can spare a little bit Mikael's time. We are expecting the data to show up before the end of the year. And of course, it's an important event. So we will have to make it publicly known when we know the data. And of course, when we are ready with our Phase 3, and we hope that the data are good, so that we can move into Phase 3. And I hope that we are going to do it in an expedient manner because speed is of essence in this battle between competing molecules. But we will announce our plans for Phase 3. I know the interest is very high right now. But I want to be very prudent in not saying things without the data. The data or the click of the data, we haven't seen it again. Now, let me move to Chris, so that we can discuss about the ESMO.

Thank you for raising 301. It's a truly monumental data for the field of bladder cancer, and urothelial cancer. And as you pointed out, with overall survival and median –progression-free survival nearly double, moving median overall survival for this population now nearly towards three years, we expect the final data to be above – longer than 31.5 months. So this just reaffirms our belief that antibody drug conjugates could become a standard of care across the treatment paradigm for many, many different tumor types.

Next, we have Akash Tewari with Jefferies.

This is Ivy on for Akash. Our question is also on danuglipron. So, [indiscernible] release version, is there any possibility to do a bridging study for QD formulation? And also, for danu, I think as we've heard a lot of times on the call that the trial [indiscernible] completed in October. I know you haven't seen the top line data. So at this point, are we waiting for data from this lower four week titration cohort? So would it be fair to say that you will have to continue the program already if there were any clinically significant theories, issues with danu?

On the once a day reformulated danu, we have initially tested a standard swellable core technology, and could show that it worked very well with danu. Now to be able also to incorporate a more sophisticated technology, we worked on a matrix technology, and all data suggests it's going to a really intriguing alternative because, as you know, in diabetes oral drugs and obesity, you will over time end up with incorporating different trials to prevent different downstream effects. And that's the beautiful of having these type of novel technology that you have a potential in the future to go to fix those combination. And we are really masters in developing sophisticated formulations and we will have this available in 2024.

And there was a second part I think, or not. There was a second part on danu?

Next we have Kerry Holford with Berenberg.

Two questions on vaccines for me, please. First on RSV, in August, GSK filed a lawsuit against Pfizer alleging patent infringement. So I wonder if you could just talk to the next steps here. Perhaps a timeline that you anticipate for this? And should we think that this could ultimately result in some form of royalty payments from Pfizer to GSK? And then, on PENBRAYA, how does the recent ACIP recommendation set against your expectations for the sales ramp and peak potential for this vaccine? If the vaccine is effectively only used for dose two of three, does that significantly reduce the commercial opportunity you had anticipated for the vaccine?

It's very, very early stages with respect to the RSV litigation. We have patents, we feel strongly about our own intellectual property. And it's certainly too early to say whether one party or the other will be required to pay any royalties or otherwise. Very early stages in that regard.

We continue to feel confident about the peak sales. The reason is that, right now, we have the first set of recommendations, but the ACIP has also told us that we will have the opportunity again to come back next year when we have additional data, which is when we will have the opportunity to look at the schedule or how [indiscernible] are being – the schedule that they're being delivered today. And we'll have an opportunity again to take a look at the benefit of PENBRAYA in this population. So I feel like it's great that we have an opportunity to get out now and to begin vaccinating our teenagers. We'll have a second bite at the apple, which will allow us to achieve our peak sales.

Next, we have Andrew Baum with Citi.

A couple of questions. Would you comment on your stake in RVT-3101, the TL1A, pending the approval of the licensing of the asset to Roche? Will you hang on to it? Or is that subject to divestment? Second question for Chris. Just looking at the recent EV-302 data and with – you seem to have the Seagen portfolio, when you think about the combination of ADCs with pembro or with a PD-1, do you believe the efficacy that you're seeing is associated with that hedging or do you think it's true synergy through an immunologic mechanism of increased cell death?

I think we're very pleased with the outcome of the TL1A program. When we created Televant, we did this as an R&D prioritization decision. Just as a reminder, this was a Phase 2 program that required significant Phase 3 investment. And so we held on to a 25% stake. We also had rights to royalties on US sales, as well as the full ex-US and ex-Japan rights. And we did that all without any R&D spend. So Roche's proposed acquisition of Televant will give us access to about $1.75 billion of pretax cash, which is the translation of our stake, and we still retain all the other rights. So we're looking forward to having Roche as a partner. We're looking forward to the investments that they're going to make in advancing the clinical stage programs on TL1A and benefiting from the outcome of those.

That's a very good question. As you know, Seagen pioneered the MMAE auristatin-based payloads, and we see this potential synergy in combination with a PD-1 with [indiscernible]. Although Seagen does have the next generation of ADCs with topo 1 that will enter the clinic this year – next year, we don't know yet if the topo 1s are going to show the similar type of immunogenicity as what appears to happen with the MMAE auristatin based payloads. So I think we're very confident that Seagen has both topo 1 as well as auristatin based payloads in case with topo 1s we do not see what appears [indiscernible].

Our last question comes from Evan Seigerman with the BMO Capital Markets.

I have one on danu and then a bigger picture one. So, a point of clarification on danuglipron. Mikael, is the ultimate goal to develop the fixed dose combination with, say, an SGLT2, other anti-diabetes drugs. You kind of mentioned that in your commentary. And taking a big step back, how should we think about how you risk adjusted your long term revenue guidance? Did you plan on updating this figure as you have clinical or regulatory successes or failures, for example, with the approval of etrasimod?

The near term goal is really look at the data, as we have said, both Albert and myself, and pending review, of course, there's an option with a once a day danu to move forward in obesity and diabetes. I think we have commented that the upside with oral drugs are many in the sector. That's why it has been such a big interest. And that includes fixed dose combination, which aren't available with injectables. But we will keep it simple and clear. We'll review the data and take a decision about potential in obesity and diabetes once a day danu. That's the near term.

And also about your question, if we are going to change the $20 billions or the $25 billions that we have declared, first of all, the $25 billion is billions that we're going to acquire revenue in 2030. According to our estimates, we have acquired, pending Seagen acquisition, $20 billion so far. If you see the analyst expectations for this acquisitions, at the end of 2030, are very, very close to what we have right now. And I think this is trending very nice. When you see the internal pipe, the launches that we are having from our internal pipeline, which we declared $20 billions, there is a gap between what we believe and what the analysts believe. And this is where we are focusing our attention right now. It's very early with the launches. Some of them are doing better than what we thought. Some of them are doing worse than what we thought. And if we realize that the totality of $20 billion is not anymore what we think will be, of course, we will update.

But I think what is important is that is if you look at our business, our core business is performing nicely. We continue to make traction. We have obviously a lot of launches that we've completed and still several ahead of us. We're excited about what Seagen could potentially bring to the company as we think about our focus now in oncology. And then importantly, I think we've rebaselined, if you will, the COVID franchises. Think about utilization in the back half of this year and cycle into next year. We will then take a step back and look at what would be prudent as we think about the revenue in totality of this company as we cycle into 2024 and beyond. So I think you look forward to, as we begin going into 2024, those expectation of laying those out specifically.

Okay, thank you very much. I would like just to say that if you walk away from today's call with just one takeaway, it should be that I think Pfizer's future remains bright. We have rebased our COVID expectations, and now I think it's very easy for everyone to be able to model what I think will be stable COVID revenues going forward. And with the recent – particularly with the recent amended Paxlovid supply agreement. And of course, we are having very strong performance of our [indiscernible] and new products portfolio excluding COVID. It's 10% growth this quarter. And that position us to be able to have growing things going forward. So I will now bring this call to an end. Thank you for joining us and have a great rest of your day.

Thank you, ladies and gentlemen. This concludes today's Pfizer third quarter 2023 earnings conference call. We appreciate your participation and you may disconnect at any time.