The paragraph discusses the beginning of Pfizer's Analyst and Investor Call to review their financial guidance for the year 2025. Francesca DeMartino, the Chief Investor Relations Officer, introduces the call, noting that it is available on the Pfizer website. She is joined by Albert Bourla, Pfizer's CEO, and Dave Denton, the CFO. The call will include forward-looking statements and non-GAAP financial measures, with disclaimers available in related documents. Albert Bourla expresses pride in Pfizer's performance in 2024, highlighting the company's execution and positive impact on patients, and mentions that 2025 financial guidance will be provided by Dave Denton.

The paragraph discusses the company's confidence in its future and its success in executing a 5-point plan for sustained long-term value. Key actions such as the acquisition of Seagen, the formation of Pfizer Oncology, and the restructuring of commercial divisions have strengthened the company. Highlights of the year include successful integration with Seagen, retention of talent, robust growth in oncology, and progress in the R&D pipeline, with five Phase 3 study starts. Notably, the pipeline includes potentially significant medicines like a CDK4 inhibitor, ADC sigvotatug vedotin, and EZH2 inhibitor mevrometostat. The oncology team presented promising data at ASCO for Lorbrena, enhancing its global adoption as a first-line treatment.

The paragraph discusses the company's advancements in cancer treatment, including launching eight oncology studies and developing next-generation treatments, vaccines, and medicines. Dr. Chris Boshoff will become the Chief Scientific Officer and President of R&D, partnering with Andrew Baum to strategically focus R&D investments. The commercial teams in the US and internationally have achieved strong results by effectively targeting opportunities and expanding patient access. Additionally, the company is working on financial discipline to realign costs and support expanded margins in 2024.

The paragraph highlights the company's achievements and future plans. They reached their goal of $4 billion in net cost savings and anticipate an additional $500 million savings by 2025. They aim to reduce manufacturing costs by $1.5 billion by 2027 and are focused on enhancing shareholder value through strategic capital allocation. Key deals have been transformational, and their 2024 performance indicates business strength, positioning them well for 2025. They have achieved financial commitments and have outlined five strategic priorities, including launching new products and advancing their pipeline. The company's 2024 revenue guidance is projected to be between $61 billion and $64 billion.

The paragraph discusses the company's financial outlook for 2024 and 2025, excluding contributions from Comirnaty and Paxlovid. For 2024, they expect operational revenue growth of 9-11% and adjusted diluted earnings per share (EPS) between $2.75 and $2.95, with $1.2 billion from Paxlovid and $0.30 from non-recurring items factored in. Excluding these, the 2024 baseline is $61.3 billion in revenues and $2.55 EPS. For 2025, they project revenues of $61-64 billion and EPS of $2.80 to $3.00, reflecting operational revenue growth of flat to 5% and EPS growth of 10-18%, indicating improved operating margins. They emphasize transitioning to more stable, typical revenue guidance as COVID-19 impacts lessen.

The company anticipates a net revenue decrease of about $1 billion due to the IRA Medicare Part D redesign, affecting growth by 1.6% in 2024, particularly impacting high-priced medicines. There's an expectation of no major US policy changes for their vaccine portfolio in 2025. COVID-19 products, Comirnaty and Paxlovid, are predicted to maintain stable revenue in line with 2024, with steady market shares and pricing across US and international markets. Comirnaty's US vaccine rates are expected to remain stable, with revenue concentrated in the latter half of the year, influenced by regulatory approvals. Paxlovid's revenue will fluctuate based on COVID-19 infection patterns, and a substantial part of non-US revenue is secured through advanced purchase agreements, primarily in the EU.

The paragraph discusses the company's expectations for revenue and market dynamics concerning its various products. It anticipates a transition of some Medicaid and Medicare patients out of the patient assistance program in early 2025, potentially increasing cash-based revenues. Non-COVID vaccines will remain crucial, with Abrysvo expected to grow internationally despite competition and a reduced U.S. market. In the PCV market, Prevnar's pediatric segment is stable, but the adult segment faces competition and limited growth in the over-65 U.S. demographic, though potential exists in the 50 to 64 age group and internationally with PCV20. Overall, a moderate revenue decline for Prevnar is expected in 2025. Oncology will drive growth later in the decade, with Padcev and Lorbrena poised for uptake, though Ibrance may face challenges from competition and generics.

In 2025, the oncology growth rate will be reduced due to the Seagen acquisition overlap, and Vyndaqel's growth will be impacted by IRA effects and new US competition. Global expansion is expected for Vyndaqel due to increased diagnosis and treatment rates. Eliquis is projected to keep growing thanks to strong data support. Nurtec's growth will benefit from effective commercial strategies and outreach, with minor growth outside the US. Xeljanz is facing competitive and pricing challenges due to upcoming patent expirations and IRA impact. The company plans to keep total adjusted SI&A and R&D expenses between $24-26 billion, driven by $4 billion in savings from a cost realignment program, with an additional $500 million in savings projected for 2025. SI&A expenses are forecasted to decrease to $13.3-14.3 billion, while R&D expenses will focus on key therapeutic areas, expected at $10.7-11.7 billion, with any savings reinvested in research for future innovation and product development.

The paragraph outlines the company's financial outlook and strategy. They expect an effective tax rate of around 15%, influenced by Pillar 2 and income distribution. Although not officially guided, the adjusted gross margin is projected to be in the mid-70s, considering product mix and savings from manufacturing optimizations. Revenue growth in 2025 is anticipated to be flat to up 5%, while operational efficiency is expected to boost adjusted diluted earnings per share by 10% to 18%. The company aims to maintain and grow dividends, meet de-levering targets by 2025, and monetize its stake in Haleon. They see revenue stabilizing as COVID uncertainties subside and focus on cost improvements and maximizing product portfolio value. New R&D leadership is committed to enhancing innovation and pipeline strength. Additionally, there's a focus on reloading the balance sheet to deploy capital and explore opportunities for business growth and shareholder value. The paragraph concludes with a transition to a Q&A session.

The paragraph features a Q&A session where Chris Schott from JPMorgan asks about future gross margin targets and capital allocation plans. David Denton responds by confirming that upper 70s for gross margins are attainable, driven by their manufacturing optimization program, although the full financial benefits will be seen gradually through 2025 and more substantially in 2026 and 2027. Regarding capital allocation, Denton states their priorities are supporting dividends, investing in the business, and reducing debt, with larger business development initiatives expected in 2026 and beyond, rather than in 2025.

In the paragraph, Geoff Meacham from Citibank asks about the company's capital priorities, particularly regarding dividend commitments and de-leveraging by 2025, and inquiries about the potential spin-off of their hospital business. David Denton responds by stating that both supporting and growing the dividend, as well as de-leveraging, are high priorities for the company, and they have sufficient cash flow to achieve both by 2025. He also mentions that the company regularly evaluates its business assets for optimal value creation but does not comment on specific market rumors. Albert Bourla then thanks Geoff for his question and Dave for his answer before moving on to the next question from Steve Scala with TD Securities.

In this article paragraph, David Denton from Pfizer addresses questions about the company's revenue outlook and potential partnerships. He clarifies that Pfizer's projected revenue stability does not imply flat revenues through the end of the decade, but rather suggests that the volatility associated with COVID-19 revenues is mostly past, allowing for more predictable projections for 2025 and beyond. Denton also mentions that there is no current plan for co-developing danuglipron with an obesity company in the 2025 guidance, and any such partnership would be a new development requiring market communication. Additionally, Albert Bourla from Pfizer is asked about meetings with Donald Trump and possibly RFK Jr., but there's no elaboration on those discussions.

In the paragraph, Albert Bourla discusses the uncertainty regarding COVID vaccine revenues in the U.S. for 2025 and emphasizes the importance of maintaining strong relationships with political figures to advance healthcare policies. He mentions a dinner with President Trump and Mr. Kennedy, highlighting a long-standing relationship with Trump, particularly during Operation Warp Speed, which successfully delivered two vaccines. Bourla stresses that his company's focus is on policies, not politics, and it will collaborate with whoever is in a leading health position. He acknowledges Trump's pride in the vaccine program's achievements but refrains from discussing private conversations or Mr. Kennedy's beliefs.

In the paragraph, Albert Bourla addresses the topic of drug pricing, particularly in the context of the US and international markets. He refrains from discussing specifics due to the privacy of discussions but comments on the President's strong views on transparency and reducing medication costs for patients by addressing the role of middlemen like PBMs. Bourla emphasizes the President's commitment to ensuring savings reach patients and mentions the need for other countries to pay fair prices for innovation. Following this, the operator introduces the next question from Trung Huynh, who asks about the impact of Part D on drug volume and pricing, seeking quantification for key products.

David Denton discusses the potential financial impacts and considerations of advancing the drug danuglipron into Phase 3 trials, which is accounted for in their 2025 R&D budget. In terms of Medicare Part D, he explains the company's responsibility during the catastrophic phase, where they provide a 20% price discount, affecting growth despite increased utilization. He estimates a net negative impact of $1 billion on their growth rate in 2025 due to this, partially offset by increased drug utilization. Additionally, Denton mentions integrating an additional $500 million in savings into their financial plans.

In the paragraph, Albert Bourla discusses the company's plans and expectations regarding their programs and products, specifically focusing on the cost management and development strategies. He mentions the integration of technology optimization to achieve a financial goal of $500 million and clarifies that there are no plans for co-developing a product, which reduces development costs. The cost of a Phase 3 trial is included in their planning. Vamil Divan from Guggenheim asks about the potential impact of anti-vaccine sentiment on the use of Comirnaty, despite no expected major policy changes, and inquires about key data events for 2025, aside from the focus on a particular product, danu, in the first quarter. Bourla reiterates the assumption of no significant US policy changes affecting their forecasts for 2025.

The paragraph discusses the consistent patterns in COVID-19 and Paxlovid usage and sales, highlighting productive discussions with the Trump administration to ensure health and safety. It notes that COVID-19 waves have been predictable, with similar patterns observed yearly. As we approach 2025, a new wave of COVID-19 is expected, suggesting stable utilization of Paxlovid and stable pricing, except for some price increases in Medicare patients. Vaccination rates are also closely following last year's trends, likely to rise with the new wave. There are important upcoming developments to focus on as well.

The paragraph outlines the anticipated advancements and activities in the pharmaceutical pipeline for the upcoming year. Key expectations include the release of a protein inhibitor for second-line metastatic ER-positive breast cancer, developments in Braftovi for colorectal cancer, and Sasanlimab for bladder cancer. There are planned advancements in treatments for multiple myeloma and hemophilia A and B. The next-generation COVID-19 study has recently commenced, ahead of schedule. Multiple Phase 3 trials are set to begin, including those for Nurtec in menstrual migraine, ponsegromab for cancer cachexia, and a C. difficile vaccine. In oncology, a rich pipeline includes studies on CDK4 in breast cancer, several trials with a new ADC from Seagen, and a promising PDL1V ADC. Overall, there's a high level of activity and significant expectations for the coming year.

Evan Seigerman from BMO Capital Markets asks about the growth potential following the Seagen acquisition. Albert Bourla responds by affirming a projection of $10 billion in revenue from the acquisition by 2030, noting that progress is exceeding expectations. He highlights multiple Phase 3 studies underway which are not included in the initial $10 billion projection, suggesting additional revenue potential if these studies succeed. Bourla emphasizes the strong growth potential of the Seagen platform, pointing out its resistance to generic competition due to regulatory challenges in biosimilar development for ADCs (Antibody-Drug Conjugates) and its continuous development of new clinical trials.

The paragraph discusses the impact of the Seagen acquisition, suggesting it has transformed the company's approach, especially in moving from traditional chemotherapy to targeted treatments like Antibody-Drug Conjugates (ADCs) over the next decade. The author expresses excitement for the upcoming year due to a new focus in R&D, particularly in oncology and vaccines, and aims to boost other therapeutic areas like internal medicine. They anticipate stable COVID revenue patterns to provide financial stability and highlight strategic capital allocation under Dave's leadership, including previous large acquisitions and plans for future investments. The author is optimistic about continued commercial success and R&D progress by 2025.

Albert Bourla extends holiday greetings, including Merry Christmas, Happy Hanukkah, and Happy Ramadan, and mentions that the next call will be at the end of January to discuss the last quarter's results. The operator then closes the presentation.

This summary was generated with AI and may contain some inaccuracies.