The Zhitong Finance App learned that the core content conveyed by the US pharmaceutical giant Pfizer (PFE.US)'s third quarter 2026 results conference call is undoubtedly that non-COVID-19 business growth, new product release, and cost improvements are supporting current profits. Management is also focusing on explaining how the company can overcome the revenue pressure caused by the loss of monopoly on pharmaceuticals and turn recent acquisitions and R&D investment into the next round of growth.
According to financial data disclosed by Pfizer, revenue for the third quarter was US$16.6 billion. Revenue from non-COVID-19 products increased 7% according to operating caliber; new listings and acquisitions obtained product revenue of US$3.8 billion, an increase of 32%. Adjusted diluted earnings per share were $0.87, which already included the $0.10 per share fee from the Innovent transaction. The company raised its annual revenue guidance to US$62 billion to US$64 billion, significantly increasing the midpoint of the range by US$1.5 billion; the adjusted diluted earnings per share guideline was raised and narrowed to US$2.95 to US$3.05. While absorbing transaction fees, the midpoint of the range still increased by about $0.10.
As to why the cost savings that market investors have recently focused on have yet to bring about a more significant reduction in costs, and how to balance dividends, R&D, and mergers and acquisitions. Management explained that part of the savings is being re-invested in research and development to support oncology and obesity programs entering late-stage clinical trials. Existing cost improvement plans are expected to achieve almost all of the $7.2 billion net savings by the end of 2026, adding another $2.5 billion in net savings from 2027 to 2029. Operating cash flow for the first three quarters was US$8.8 billion, dividends were US$7.3 billion, and the leverage ratio at the end of the quarter was 2.6 times. Capital allocation is still centered around supporting growth, maintaining and gradually increasing dividends, and maintaining a sound balance sheet. Subsequent transactions focus more on supplementary acquisitions; stock buybacks are expected to become an option again after a transition period where monopoly is lost. The official 2027 guidelines are expected to be announced in mid-December and will include effects such as loss of monopoly on pharmaceuticals, most-favoured-nation pricing, and the Inflation Reduction Act.
In terms of the R&D process, Pfizer management said that the obesity business is accelerating around berobenatide, which is administered at a monthly level. The 2026 plan covers 10 ongoing or proposed Phase III studies, and the first potential approval target is 2028. The SOLIS-1 study on insulin combination has been completed, and the efficacy results are expected to be announced in the second half of 2027; the Phase I/IIa update at the end of this year mainly involves safety and pharmacokinetics. In the field of oncology, ELREXFIO is advancing towards earlier treatment, and the highly selective CDK4 inhibitor atirmociclib and the PD-1/VEGF bispecific antibody tiVunatamig continue to accumulate clinical evidence; the prostate cancer project MEVPRO-1 is expected to be read out in the first quarter of 2027, and the MEVPRO-2 schedule was clearly corrected to the fourth quarter of 2027 in the Q&A. Tilrekimig, next-generation pneumococcal vaccine, and Lyme disease vaccine in the field of inflammation and immunity also constitute important catalysts in the future.
Management's core disagreement with Wall Street lies in long-term growth forecasts. Pfizer reiterated that from the end of 2028 to the end of 2033, the goal is to achieve a risk-adjusted high-single-digit revenue compound annual growth rate, and believes that the market not only underestimates some ongoing research projects, but also underestimates the growth space for existing products. The CEO of Pfizer said that NURTEC's current annual revenue in terms of operating performance is close to 2 billion US dollars, but Wall Street expects only 2.5 billion US dollars by 2030, and there is little room for implied growth, so management believes that the market has underestimated the product's growth potential; the CEO believes that Wall Street's long-term growth forecast for NURTEC is conservative: the product's current annualized revenue is close to 2 billion US dollars, but the market's revenue forecast for the full year of 2030 is only about 2.5 billion US dollars, which means that the revenue growth forecast for the next few years is only about 500 million US dollars Too conservative.
Pfizer management said that the revenue forecast gap between ELREXFIO and competing products is also worth re-evaluating, but the associated efficacy and tolerability advantages still need to be further verified. At the same time, artificial intelligence has been used for target verification, molecular and biomarker screening, doctor-patient interaction, and GENESIS, a pharmacovigilance platform covering more than 120 countries and more than 600 products. Management emphasized that the operational significance of artificial intelligence applications is mainly to improve R&D and operational efficiency, allow more resources to be invested in clinical promotion and commercial transformation, and allow drug safety scientists to spend more time on causal relationship assessment, safety signal identification, and patient protection.
The following is the full text of Pfizer's performance conference call (artificial intelligence tool assisted translation):
Full transcript — Pfizer's Q3 2026 Earnings Conference Call:
Operator: Hello, welcome to the Pfizer 2026 third quarter earnings conference call. This conference call will be recorded. I will now hand over the conference to Francesca DeMartino, Chief Investor Relations Officer and Senior Vice President. Ma'am, please begin.
Francesca DeMartino, Pfizer's Chief Investor Relations Officer and Senior Vice President: Good morning everyone and welcome to the Pfizer earnings call. I'm Francesca DeMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, I would like to thank everyone who participated. The conference was audio-webcast on pfizer.com. Earlier today, we published our results for the third quarter of 2026 through a press release, which can be found on the company website pfizer.com. I am in attendance today with Chairman and CEO Dr. Albert Bourla, Chief Financial Officer Cécile Guegan, and Chief Scientific Officer Chris Boshoff. After their preliminary remarks, we will move on to the question and answer session. Members of the leadership team will also participate in the Q&A. Before we begin, I would like to remind you that we will be making forward-looking statements and discussing certain non-GAAP financial measures.
Please read the disclaimer in the presentation, the press release we issued this morning, and the disclosures in our filings with the U.S. Securities and Exchange Commission. These materials are all available on pfizer.com's investor relations website. The forward-looking statements in this conference call are subject to material risks and uncertainties and reflect only the circumstances on the date this call was first held; we are under no obligation to update or revise any such statements. Next, I'll leave the meeting to Albert.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Francesca. Good morning everyone, and thank you for joining our conference call. I'm so happy that Pfizer had another strong quarter. Our outstanding commercial execution performance, including a 32% increase in revenue from new listings and acquisitions this quarter in line with operating caliber, demonstrated the intrinsic strength of the business. Rigorous financial management and ongoing productivity improvements are increasing efficiency and having a positive impact on our profit margins. As high-value R&D projects continue to advance, we believe the company is moving towards the next phase of significant growth. Before going any further, I would like to welcome Cécile Guegan as Chief Financial Officer. Cécile has over 25 years of financial leadership experience and has proven her ability to create new sources of growth.
In the global selection, she stood out for her expertise, in-depth knowledge of Pfizer and our industry, and strategic vision. I believe these qualities will help Pfizer unlock sustainable long-term value for patients and shareholders. I'm looking forward to working with Cécile, and I'm sure she will help us advance execution with the rigorous attitude and enterprising spirit required by the company's next chapter. Next, let me share a few highlights of this quarter's progress. As you know, over the past few years, we have invested nearly $80 billion in transactions, providing us with key products, contributing to the current commercial growth momentum, and gaining a platform with transformative potential. Approximately 80% of these investments are in Seagen, Metsera and Biohaven, and we are making good progress in maximizing the value of our investments. We are satisfied with the overall performance of the products obtained through the acquisition, which grew 37% in terms of operating caliber during the quarter.
Driven by PADCEV's strong performance, the original Seagen product portfolio grew 39% year over year in the US this quarter. Combining Seagen's medicines with the strength and reach of our commercial organization has enhanced our impact in the field of oncology. We are now able to provide physicians and care teams with a wider range of choices and more professional support to both help patients and drive Pfizer's growth. Seagen not only strengthened our commercial position, but also expanded our ability to discover breakthrough results in the field of oncology; upon completion of the acquisition, we doubled the size of our early-stage R&D pipeline. In late-stage development projects, we are advancing some antibody drug conjugate drug candidates that are expected to bring significant improvements to cancer patients. I am pleased with the pace of progress in the broad clinical development plan for the obesity product portfolio over the past year.
We plan to advance 10 ongoing or planned phase III trials in 2026, one of which will switch the evaluation from an approved weekly dosing regimen to the monthly administration of GLP-1 polypeptide berobenatide we are developing. Our key berobenatide development program has made significant progress in enrolment, as has the amylin combination drug program. The latter phase IIb study has now completed full enrollment. We are working to obtain the first approval in a series of potential approvals from Berobenatide in 2028, and planning for its listing promotion strategy is in full swing. Biohaven is also a strategically important addition for Pfizer. This quarter, NURTEC grew 33% in terms of operating caliber, driven by basic demand and excellent commercial execution. While we need to address market dynamics in a competitive field, we see a real opportunity to help migraine patients and the potential for oral CGRP medications to be a key growth driver.
We are leading the US oral CGRP market and are working to expand this position to the international market. As more patients in key countries such as the UK, Italy, and Japan now have access to this treatment, we are seeing growth in the international market. As we are able to expand access to treatment, we are also encouraged by the strong momentum of patients using this treatment. R&D execution performance was strong in 2026, and we continue to prioritize opportunities that best create value for patients and drive future growth in the four key treatment areas. The outstanding progress we have made reflects the momentum to advance the strategy. In recent months, we have obtained two key regulatory decisions, important data results from a key study, and launched eight key studies, while presenting strong data at several recent medical conferences. We look forward to pipeline opportunities in strategic focus areas and areas of commercial advantage.
These include late-stage projects covering multiple tumors in the field of oncology, such as multiple myeloma, breast cancer, and lung cancer, as well as projects in the field of inflammation and immunity, and of course pneumococcal vaccine projects. Chris will be sharing in more detail the progress made in recent months. Our pipeline strategy is based on strict prioritization and accelerated execution, and we believe what is being advanced is an important opportunity to best benefit patients and drive growth in the future. Today, we raised our 2026 full-year earnings and adjusted earnings per share guidance. This reflects our strong performance through the third quarter and our confidence in our ability to execute our strategy. Combined with strict financial management and continued progress in the R&D pipeline, we believe Pfizer is fully prepared to drive growth towards the end of this decade and create sustainable value for patients and shareholders over the long term.
We have deployed artificial intelligence in our business to increase productivity and improve how we interact with doctors and patients. On the R&D side, we're accelerating innovation through faster target verification and better molecular and biomarker screening. The recent launch of the new pharmacovigilance platform GENESIS reflects our commitment to using advanced artificial intelligence and intelligent automation to carry out global safety monitoring. This work covers more than 600 products in more than 120 countries, and often involves lengthy manual processing processes. GENESIS has taken on the transactional workload, enabling our safety scientists to focus their time on what matters most: evaluating causal relationships, identifying safety signals, and protecting patients. Next, I'll leave the meeting to Cécile.
Cécile Guegan, CFO at Pfizer: Thanks, Albert, good morning everyone. I am honored to speak with you today as Pfizer's Chief Financial Officer. I look forward to continuing to work side by side with the executive leadership team and leading our world-class finance team. I am truly excited about what all of you can achieve together. I will perform this responsibility with strict financial management and focus on translating Pfizer's scientific and commercial advances into enduring shareholder value. I am confident in our strategy and that the entire team can create lasting long-term value for shareholders through strict capital allocation and disciplined execution. Now, I'm excited to share with you our third quarter results, which reflect continued commercial execution and rigorous financial management. Revenue from our non-COVID-19 products has grown steadily, while our product portfolio, productivity, and cost management have supported margin expansion and enabled us to continue investing in our rich R&D pipeline.
This year's performance gives us confidence to raise our 2026 full-year revenue guidance while raising and narrowing the adjusted diluted earnings per share guidance. Next, I will introduce the specific results. Revenue for the third quarter of 2026 was $16.6 billion, exceeding our expectations. Among them, revenue from non-COVID-19 products increased strongly by 7% according to operating caliber, mainly driven by key brands in the US and some international markets, but the decline in revenue from COVID-19 products offset part of the increase. On the profit side, the third quarter of 2026 reported diluted earnings per share of $0.56. Additionally, adjusted diluted earnings of $0.87 per share exceeded our expectations, including $0.10 per share fees associated with the Innovent transaction. Although we have increased our investment in future growth drivers and promoted the launch of several Phase III studies, strict cost management and improved overall organizational productivity have exceeded expectations.
ELIQUIS, PAXLOVID, VYNDAQEL product lines, NURTEC, and LORBRENA made steady contributions to revenue this quarter, while revenue from COVID-19 products and PREVNAR product lines declined. New listings and acquisitions of products contributed $3.8 billion in revenue this quarter, up 32% according to operating caliber, mainly driven by PADCEV, NURTEC, and LORBRENA, which increased revenue of US$255 million, US$175 million and US$114 million respectively. We are continuing to invest more in this set of products to mitigate the negative effects of losing our monopoly rights over the next few years. Furthermore, this quarter's performance also shows that we have made clear progress towards our goal of returning to growth towards the end of this decade. Strict cost management and continuous optimization of all aspects of the company, including production layout optimization, remain our priorities.
Our productivity improvement initiatives are making substantial progress, and the current cost improvement plan is still expected to achieve almost the full amount of the estimated net savings of $7.2 billion by the end of 2026. As we announced last quarter, we're launching the next phase of these plans, which are expected to deliver an additional $2.5 billion in net cost savings between 2027 and 2029. These savings support increased operational efficiency and have a positive impact on profit margins. At the same time, we continue to prioritize investment in pipeline projects that we believe have the greatest potential to bring significant breakthroughs to patients and create long-term value for shareholders. The adjusted gross margin for the third quarter was 77%, mainly reflecting a favorable product portfolio and ongoing cost management.
Judging from the composition of adjusted operating expenses of US$6.8 billion, adjusted sales, information and administrative expenses (SI&A) increased by 2% according to operating caliber. This partly reflects the increase in costs due to the favorable adjustment of US health-care reform costs compared to the same period last year, while investment in marketing and promotion has been reduced, and more targeted growth drivers have been invested in a more targeted manner. Coupled with continued cost efficiency improvements and improvements, some of the increase was offset. Adjusted R&D expenses increased by 18% in line with operating caliber, including planned investments in key oncology and obesity projects, and the launch of several Phase III studies. Expenses related to ongoing R&D projects obtained from the acquisition decreased by 52% according to operating caliber, mainly reflecting the $650 million expenses associated with the Innovent transaction in the current quarter, compared to the $1.35 billion cost associated with the 3SBio transaction in the same period last year.
The adjusted operating margin for the third quarter of 2026 was 36%, reflecting effective cost management, strong revenue performance for non-COVID-19 products, and higher investment in the business; at the same time, I would like to point out that expenses related to R&D projects (AIPR&D) obtained through acquisitions related to the Innovent transaction also dragged down profit margins. As I said before, adjusted diluted earnings per share for the third quarter were $0.87. Based on year-to-date performance, including continued growth in non-COVID-19 products and strict implementation, we raised the 2026 full-year revenue guidance range to US$62 billion to US$64 billion, increasing the midpoint of the range by US$1.5 billion. We repeat that the annual revenue of COVID-19 products is expected to be around US$4 billion, of which most of COMIRNATY's revenue is expected to be realized in the fourth quarter, in line with the vaccination season. PAXLOVID usage will continue to be affected by infection rates and treatment needs.
Furthermore, we currently expect R&D expenses for the full year 2026 to be between US$10.8 billion and US$11.8 billion. We raised and narrowed our adjusted diluted earnings per share guidance for the full year 2026 to $2.95 to $3.05. This means that while absorbing the impact of Innovent's transaction of $0.10 per share, the midpoint of the guidance range still increased by $0.10. We reaffirm all other components of the financial guidelines. The updated outlook reflects our confidence in the progress of non-COVID-19 products and cost improvement measures. The adjusted gross margin is expected to be in the middle of 70% for the whole year, while continuing to invest in key pipeline projects. Next, let's talk about capital allocation. Our capital allocation priorities remain the same. We invest in our business based on appropriate returns, maintain dividends, and increase dividends over time.
At the same time, we generate returns for shareholders and retain the flexibility to take future value-adding initiatives, including share buybacks. Following the completion of the Innovent transaction in the third quarter, our current business expansion transaction capacity is approximately $6 billion. In the first nine months of 2026, we invested $9.2 billion in internal and external R&D, and returned $7.3 billion to shareholders through quarterly dividends. Operating cash flow for the first three quarters of 2026 was US$8.8 billion, and the leverage ratio at the end of the quarter was 2.6 times, slightly lower than the target of 2.7 times 2026. Given the impact of the impending loss of exclusivity, we expect the leverage ratio to remain near current levels or increase slightly during this transition period. We will continue to focus on maintaining a strong financial position while continuing to invest in innovation and support shareholder returns. In conclusion, I would like you to keep in mind two key points. First, operational excellence.
Non-COVID-19 products continued to perform well, with an increase of 7% in terms of operating caliber, while new listings and acquisitions increased 32% in line with operating caliber, further proving our strong capabilities and consistent execution. Second, strict financial management. We are improving operational efficiency while increasing investment in pipeline projects; we believe these projects have the greatest potential to create value for patients and shareholders. Together, these performances show that we are implementing strategies, coping with the upcoming transition period of loss of monopoly, and consolidating the foundation to resume growth towards the end of this decade. Next, I'll leave the meeting to Chris.
Chris Boshoff, Pfizer Chief Scientific Officer: Thank you, Cécile. Last quarter, we made strong progress in all four major treatment areas. I will introduce more details of recent developments in some of these projects. The first is ELREXFIO, a BCMA bispecific antibody we discovered independently. Currently, we have obtained two positive phase III study results in multiple myeloma that have previously been treated with two types of drugs. Recently, in the MagnetiSMM-32 study, ELREXFIO monotherapy achieved statistically significant and clinically significant improvements in progression-free survival compared with the regimen selected by the researchers from three mature standard treatment plans. This is important because the three standard treatment options that can be selected can fully represent current anti-CD38 treatment practices for refractory multiple myeloma. As anti-CD38 therapy enters the frontline of treatment, this patient population is expanding. The findings themselves are also strong.
At the time of midterm analysis, more than 75% of patients treated with ELREXFIO had not progressed or died of any cause; the estimated 18-month progression-free survival rate was approximately 68%. The safety in MagnetiSMM-32 is consistent with ElrexFIO's known safety characteristics, and also shows potential differentiating advantages. MagnetiSMM-32 has taken infection prevention measures since the beginning of the study, and the incidence of grade 3 or above infections is lower than that of MagnetiSMM-5. The latter is ELREXFIO's first critical trial with positive results in multiple myeloma that has previously been treated with two types of drugs. As a background note, MagnetiSMM-5 began without such infection prevention measures. Subsequently, early deaths due to infection occurred during the COVID-19 pandemic, which were concentrated in China and two other countries, affecting the overall risk ratio of MagnetiSMM-5, before these measures were implemented. MagnetiSMM-5 data is expected to be presented at a medical conference before the end of the year, at which time more information on efficacy and safety will be provided.
Taken together, the positive phase III results achieved by MagnetiSMM-32 and magnetiSMM-5 have strengthened our confidence in advancing ELREXFIO to earlier treatment. We are accumulating compelling evidence to support patients receiving fixed-dose ELREXFIO monotherapy from the first relapse, regardless of whether they have previously received anti-CD38 treatment. As more critical research into newly diagnosed multiple myeloma is being carried out, if both clinical studies and regulatory approvals are successful, the number of patients eligible for ELREXFIO use is expected to expand to about five times the current level. Next, let's talk about atirmociclib, our highly selective CDK4 inhibitor with first-of-its-kind potential. Based on the leading position established through IBRANCE, we are promoting atirmociclib, which is expected to become the next generation basic drug for first-line treatment and early treatment of HR-positive breast cancer. Our CDK6 inhibitor prifetrastat is being developed in a late-line treatment scenario. Atirmociclib was designed in-house to improve the CDK4/6 inhibitor; the latter is the basis for current standard treatment for HR-positive breast cancer. One of the key limitations of these drugs is safety and tolerability, and CDK6 inhibition is an important cause of adverse events.
Our idea of designing atirmociclib is to maximize efficacy through stronger CDK4 inhibition while minimizing the effect on CDK6 to improve tolerability. Atirmociclib is 33 times more selective for CDK4 than CDK6, which is superior to standard treatment. Here are two sets of data that make us look forward to atirmociclib. On the left is the Phase II FOURLIGHT-1 study data presented at the European Society of Medical Oncology (ESMO) conference. The study evaluated atirmociclib in combination with fluvirizil in the treatment of HR-positive and HER2-negative breast cancer patients. All participants had previously been treated with CDK4/6 inhibitors; it is worth noting that 92% of participants in the atirmociclib group completed randomization within three months of discontinuing the CDK4/6 inhibitor. The atirmociclib regimen reduced the risk of disease progression or death by 40% compared to fluvirizil or everolimus combined with exemestane selected by the investigators. The results obtained in a group of patients with this highly difficult to treat or drug resistant disease have strengthened our confidence in the ongoing Phase III trial. The trial compared atirmociclib with the CDK4/6 inhibitors selected by the researchers in first-line treatment.
On the right is AtirmocicLib's phase II study data for early-stage breast cancer. When treated with atirmociclib plus letrozole, 88% of the subjects achieved complete cell cycle block, compared with only 18% in the letrozole monotherapy group. These results support our plan to combine atirmociclib with the selective estrogen receptor degrading agent giredestrant for an early stage breast cancer phase III trial which is expected to begin in the next few months. The design of this study has been agreed with regulators on the premise that giredestrant is expected to be approved in this treatment scenario. This slide shows safety and tolerability data for FOURLIGHT-1, as well as key findings from three approved CDK4/6 inhibitors combined with fluvirizil. These are cross-trial comparisons, so no definitive conclusion can be drawn. These data further suggest that high CDK4 selectivity can improve safety and tolerability, thereby supporting continuous administration, excellent treatment adherence, and possibly higher efficacy.
Numerically, the incidence of grade 3 or above neutropenia with atirmociclib is lower than that of any approved drug, and grade 4 or 5 neutropenia has not been reported. The incidence of any level of diarrhea is lower than abesilil, comparable to pibesilil and reboxilide. The proportion of Atirmociclib dose reduction due to adverse events was 14%, while the approved drug was 32% — 43%. Next, let's talk about tivunatamig. We are advancing an extensive development program for this potentially best-in-class PD-1/VEGF bispecific antibody. More than 1,200 patients have been treated worldwide, and the safety characteristics are consistent. The plan includes two ongoing Phase III trials, and two additional Phase III trials are expected to commence this year. The updated results announced at the ESMO conference strengthened our confidence in expanding TiVunatamig development.
Since the 2025 Annual Meeting of the Society for Cancer Immunotherapy (SITC), tivunatamig combined with chemotherapy was given in doses used in key tests in phase II studies, and the confirmed remission rate in first-line treatment of non-squamous and squamous non-small cell lung cancer increased by about 20 percentage points. Currently, both are about 80%, which is higher than the tirelizumab combination chemotherapy in this study. The median progression-free survival of both histological types was close to 14 months, an improvement of about 4 to 5 months compared to the control regimen. Notably, the efficacy of tirelizumab is consistent with the results of previous phase III studies of the leading PD-1 antibody pabolizumab, which supports the reference value in the control group. We are also encouraged by comparing the efficacy and safety results of TiVunatamig with phase III data of the PD-1/VEGF bispecific antibody IvonesCimab, and we are aware of the limitations of cross-trial comparisons. Next, I will introduce tilrekimig in the field of inflammation and immunity, which is a triple-specific antibody with first-of-its-kind potential.
Tilrekimig was designed in-house to simultaneously target multiple complementary drivers of type 2 inflammation: IL-4, IL-13, and TSLP. Its Phase II results in atopic dermatitis provided a convincing proof of concept. At the highest monthly dosage level, the Easi75 response rate for TilrekimIG treatment was approximately 50% after placebo correction. EASI75 indicates an improvement in the area and severity index of eczema by at least 75%. Despite the limitations of cross-trial comparisons, these phase II data suggest that tilrekimig may be superior to the current standard biologic therapy dupriumab. These secondary endpoints in our ongoing Phase III plan are statistically effective enough to test this hypothesis in head-to-head comparisons. In terms of safety, tilrekimig shows good characteristics. When injected subcutaneously every four weeks, with a maximum dose of 400 mg, the observed incidence of conjunctivitis and injection site reactions was lower than those reported with dupliumab, and was comparable to placebo.
In addition to atopic dermatitis, tilrekimig brings opportunities at both the pipeline level and product level, and its targeted pathways have been validated by approved treatments covering nine different diseases. Advanced studies are ongoing in severe asthma and moderate-severe chronic obstructive pulmonary disease. Next, we will introduce our potentially best-in-class pneumococcal conjugate vaccine program. Based on PREVNAR's 25 years of efficacy and safety accumulation, we are advancing the next generation of vaccine candidates and striving to lead the way in serotype coverage and invasive disease coverage. In the field of pediatrics, PCV25 achieved strong Phase II results. All 20 serotypes shared with PREVNAR 20 met the double IgG threshold standard after the 4th dose; this standard has historically been used to establish non-inferior efficacy. Since PREVNAR 20 was approved for pediatric indication in 2023, the US Food and Drug Administration (FDA) has established an updated and more stringent 1.5 times non-inferior efficacy threshold standard, which we have included in the Phase III study design.
Based on the Phase II results and the confidence interval which is expected to narrow after a sharp increase in the sample size of the Phase III study, the model predicts that at least 22 of the 25 serotypes in our key study can meet this standard. Combined with serum response data, functional conditioning phagocytosis activity (OPA) titers, and the evaluation method that synthesizes all the evidence in the review, these results strengthened our confidence. Our goal is to provide the best-in-class pneumococcal vaccine for children, and the serotypes covered together are estimated to cause 84% of cases of aggressive disease in children under 5 in the US. Compared to PREVNAR 20, this is equivalent to an additional increase of about 25 percentage points. Our Phase III development plan is progressing smoothly, and the Phase III interbatch consistency study has been fully enrolled. In the adult field, PCV35 extends the type 3 serotype enhancement technology we validated in PCV25 to other key serotypes, and it is expected that the Phase I study will begin this year.
Looking ahead, we expect regulatory decisions, data releases, and the launch of key research to be intensively advanced over the next 12 months. This includes the release of MEVPRO-1 data; based on the current rate of events, it is now expected to be released in the first quarter of 2027. If the study is successful, MEVpro-1 is expected to support MEVrometostat approval. This drug is an EZH2 inhibitor that we discovered independently and has the potential to be pioneered in the same category. It is used for prostate cancer, and will further expand our product business in this field. Next, I'll return the meeting to Albert.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Chris. Finally, operational excellence is driving our key growth brands to generate commercial growth momentum; I would like to point out that new listings and acquisitions have performed particularly well. At the same time, our capital allocation strategy aims to create long-term shareholder value. Continued progress in the late-stage R&D pipeline, and a number of key research findings are expected to be published in the near future, which is enhancing our opportunities to expand our leadership in key areas and improve the lives of patients. I believe Pfizer is fully prepared to grow and create long-term value for shareholders as the decade nears its end. We have seen a clear path to our goal of achieving a high risk-adjusted single-digit revenue compound annual growth rate from the end of 2028 to the end of 2033. Now on to the Q&A session, ask the operator to arrange a queue for questions.
The following is the performance conference Q&A session (AI-assisted summary and translation):
Operator: Thank you. If you want to ask a question, press the star key and 1 on the phone keys. To leave the question queue at any time, press the star key and 2. As a reminder, please press the asterisk key and 1 to ask a question. Today's first question comes from Chris Schott at J.P. Morgan Chase. Your line is connected.
Chris Schott, Analyst at J.P. Morgan Chase: OK, thank you so much for giving me the opportunity to ask questions. I have two questions about pipelines. The first is about the tri-specific antibody tilrekimig. Considering that the data you have published is very strong, and the status of the current standard treatment is also very stable, how do you consider the positioning of this drug in atopic dermatitis, especially first-line or second-line use? Another addition to this question: Can you talk about the timeline for indications other than atopic dermatitis that you are promoting? The second question turned to the upcoming release of phase I/IIa data on the combined use of insulin and berobenatide. Can you help us establish some expectations, explain what you think of these data, and what dose escalation protocols the study used so we can understand the upcoming results?
Thank you very much.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Yes, I want to thank you. Chris, can you explain the timing of the three specific antibodies, and of course, questions about insulin and berobenatide? Then, Alexandre, maybe you can talk about their commercial positioning.
Chris Boshoff, Chief Scientific Officer at Pfizer: Thank you so much for your question. As we all know, we have now launched the TilrekimIG Phase III program for atopic dermatitis, which includes two studies. One study included a head-to-head comparison with dupriumab. We have also initiated a phase II/III study to treat chronic obstructive pulmonary disease (COPD), using a seamless design and a phase III study to treat severe asthma. The results are expected to be announced in 2028 and 2029. Regarding insulin and GLP-1, as you know, the SOLIS-1 study has now completed the recruitment of all subjects. This is a carefully designed phase IIb study to evaluate insulin monotherapy with different doses and different dose escalation regimens, and insulin combined with berobenatide. We expect to publish the study's efficacy results in the second half of 2027. We will provide an update on the ongoing Phase I/IIa study at the end of this year, but it is important to note that this study is aimed at evaluating safety and pharmacokinetics (PK), or clinical pharmacology, not efficacy.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you. So how are the three specific antibodies positioned? What do you think?
Alexandre, Pfizer Commercial Business Leadership Team: OK, Chris, thank you for the question. I think everyone knows that this is a very large category. Through CIBINQO and the overall dermatology product portfolio, we learned that patients with different characteristics require different types of treatment, particularly between JAK inhibitors and monoclonal antibodies. We have also seen that some patients will actually switch from one treatment to another, while others will withdraw from their original treatment. There are many cases where these patients move between treatments. We are building relevant capabilities in the US and international markets, and we are seeing that we have made good progress. For example, as you can see this quarter, the combined quarterly sales of our two dermatology products reached $100 million in the international market. As a result, we are starting to enter a nice phase of development.
As I said, as the results of the study become available, we will be able to cover a portion of patients who have stopped treatment, as well as patients with certain characteristics who have not received treatment; we are defining these characteristics. As a result, it will be a first-of-its-kind product with strong curative effects, and it is clear that there are unmet medical needs in this category.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you very much. Please ask the next one.
Operator: The next question comes from Dave Risinger of Leerink Partners. Please speak.
Dave Risinger, Analyst at Leerink Partners: OK, thank you so much. I would like to congratulate Cécile Guegan on becoming Pfizer's CFO and look forward to working with you. My question is about net prices in the US market for the third quarter and beyond. Can you talk about whether the adjustment of total sales to net sales in the third quarter had any favorable impact on net sales, including the impact of the 340B inspection and clean-up, and introduce the recent net price outlook for the US market? Thank you.
Cécile Guegan, CFO at Pfizer: First, thank you so much for your blessings. Regarding pricing for the third quarter, I don't think there was a very significant change in the adjustment of total sales to net in the third quarter, other than the impact of the ELIQUIS price reduction that we expected in January to begin to show in the third quarter. The results we are seeing are largely driven by strong market performance and sales volume, rather than by adjustments from total sales to net sales.
Looking ahead, it's clear that I won't be commenting on 2027 today, but of course we'll reflect the changes we've seen in our 2027 performance guidance, including the Inflation Reduction Act (IRA) — where the highest fair price (MFP) will be applied to our two products starting in 2027 — and the various effects and changes of 340B, including the credit and rebate model that began in January, and of course some of the most-favoured-nation pricing (MFN) effects after we reached an agreement with the government. In summary, however, the results for the third quarter did reflect strong execution rather than changes in gross sales to net adjustments; we did not see any change in the latter.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Great. Thank you very much. Please ask the next one.
Operator: The next question comes from Evercore ISI's umer Raffat. Your line is connected.
Umer Raffat, Evercore ISI Analyst: Hello everyone. Thanks for taking my questions. Albert, you've clearly made a lot of progress in improving sales, general and administrative expenses (SG&A) over the past few years, and I agree. It's not a step change, but it's an improvement. I remember Dave mentioned before leaving office that most of the total net cost savings of $7.2 billion will be realized before the end of 2026. Looking back at Pfizer's profit and loss statement now, I see that the total SG&A and R&D expenses for 2022 were about US$24.5 billion, which is roughly the same in 2026. I acknowledge that R&D expenses have risen and SG&A has declined somewhat, but overall operating expenses are still roughly in the range of 24 billion to 25 billion US dollars. I'd like to ask how you view this when considering maintaining dividends and the cost measures you can take when future patents expire? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Cécile, please answer this question.
Cécile Guegan, CFO at Pfizer: OK. As I mentioned before, we are proceeding with the first phase of the cost improvement plan as planned, striving to achieve $7.2 billion in cost savings. These savings come from a variety of sources. The first is our production layout or production cost. The second is research and development, but the saved funds will be re-invested. We are indeed increasing R&D investment to support existing pipeline products and projects, and of course, acquisitions we have completed. Then, in terms of sales, information and administrative expenses (SI&A), savings mainly come from commercial and marketing expenses, as well as general and administrative expenses. As far as the operating expenses we have seen so far, I'm only talking about the third quarter. Some one-off factors during the quarter drove up SI&A. According to our guidelines, we still expect SI&A to decline compared to last year.
This is the first point I want to make. Looking ahead, we have announced the second phase of the plan, which will save a total of 2.5 billion US dollars in both SG&A and production costs. These measures will translate into cost savings. We expect these savings to be realized and mitigate the decline in profit margins during the 2027-2029 transition to loss of exclusivity (LOE).
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you very, very much, Cécile. Next question.
Operator: Next up is Jefferies' Akash Tewari. Your line is connected.
Akash Tewari, Jefferies Analyst: OK, thank you so much. I have two questions. I know that this spring, you did a biomarker analysis of about 45 to 50 patients on the STAT6 program and are planning to decide whether to move from phase 1 to phase 2. Are there any recent developments on this project? Also, for TARC decline and biomarker decline, how do you compare this to the results we've seen with some of the degradants? Then, regarding your GLP-1 and pancreatin, I think you've just updated the number of patients in the Phase I/II study to 201 on ClinicalTrials.gov. I remember the original plan was close to 400 people. Can you explain why this decision was made for the amylin and GLP-1 combination treatment program from Metsera? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Chris, it's up to you to answer both questions.
Chris Boshoff, Chief Scientific Officer at Pfizer: OK, thank you so much. First up is STAT6, and our STAT6 program has the potential to be the first of its kind. Thank you for your question. This area is critical to our Immune & Inflammation (I&I) product portfolio. As we said before, we've adjusted this program to include some additional drug interaction (DDI) studies, so we should publish STAT6 results later this year. Regarding insulin and berobenatide, as I said earlier, the SOLIS-1 study has completed the recruitment of all subjects. The study will announce the efficacy results at the end of next year. The phase I/IIa study was adjusted to accommodate additional pharmacokinetic studies we are currently conducting, but the trial did not show any substantial changes.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you. Please ask the next one.
Operator: Next up is Vamil Divan from Guggenheim. Your line is connected.
Vamil Divan, Analyst at Guggenheim: Okay. Thanks for taking my questions. It's still about the pipeline. First question, we noticed that you announced a new phase I trial of the PI3K inhibitor on ClinicalTrials.gov last week. I heard your introduction to atirmociclib and cdk6. Can you talk about how you view this product's positioning in the overall breast cancer strategy? Another question relates to the European Society of Medical Oncology (ESMO) Congress. We have seen VOLGA data published by AstraZeneca, which may suggest that patients with bladder cancer will need fewer courses of PADCEV. I would like to know what you think about this set of data, or how will this data influence your judgment on the future use of PADCEV? Thank you.
Chris Boshoff, Pfizer Chief Scientific Officer: OK. The first is PI3K, and we have initiated a phase I study of an internally discovered PI3Kα inhibitor. As a reminder, mevrometostat in combination with enzalutamide is also a drug discovered independently by Pfizer. We and Relay are conducting a clinical trial to study a PI3Kα inhibitor called zovegalisib, a pan-alpha inhibitor that is selective for alpha subtypes, and is also studying its combined use with atirmociclib. The advantage of atirmociclib is that we have not observed drug interactions, and drug interactions have occurred when all other CDK4/6 inhibitors were used in combination with PI3Kα inhibitors. As such, this could be a significant advantage. In terms of the question you mentioned, up to 40% of breast cancers — estrogen receptor (ER) -positive breast cancer — and up to 20% to 25% of HER2-positive breast cancers carry PI3Kα mutations. So this is an important area for us. The second question is about VOLGA data. Let me just say a few brief remarks. First, these data further support the use of PADCEV for muscle-invasive bladder cancer, and also further support the use of PADCEV in combination with PD-1 inhibitors for muscle-invasive bladder cancer.
They also bolster our confidence in the newly launched EV-309 study using PADCEV and pabolizumab in a bladder-preserving treatment scenario. In addition, there is a phase III trial of PADCEV combined with cabotinib currently being planned. This trial should also begin later this year. I would like to remind everyone that the VOLGA study included patients who were not suitable for cisplatin treatment. Its pathologic complete remission rate was lower than the level we observed with pabolizumab combined with PADCEV, which is significant; its event-free survival rate was also slightly lower. Most importantly, this is a treatment scenario that aims to cure, so we don't know which patients can reduce the intensity of treatment. This is important for doctors: Which patients can be treated less? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you very much. Please ask the next one.
Operator: Next up is BMO Capital Markets' Evan Seigerman. Your line is connected.
Evan Seigerman, BMO Capital Markets Analyst: Okay. Hello everyone. Thank you so much for taking my questions. Cécile, after taking over the capital allocation framework established by your predecessor, how will you allocate the incremental capital you can invest in the future between internal R&D and other complementary acquisitions? You talked about business development (BD) capabilities, deleveraging, and ultimately restarting share buybacks. Currently, which one do you think is most likely to bring the most return to shareholders?
Dr. Albert Bourla, Chairman and CEO of Pfizer: Okay, Cécile.
Cécile Guegan, CFO at Pfizer: Thanks, Evan. Our priorities are clear and have not changed from before. I think we have a solid plan to help us get through the phase of losing our exclusivity and beyond. Our priorities are: investing for growth, maintaining dividends and growing over time, and maintaining a strong balance sheet. In the phase where we lose our monopoly, our operating cash flow, financial assets, and ability to access capital markets to finance will enable us to continue investing and maintaining our dividends. After the phase of loss of monopoly has passed, as various drivers come into play, our operating cash flow will increase, and at that time, we will also have other options to continue to enhance shareholder value. Under these circumstances, share buybacks will once again become one of our tools to continuously enhance shareholders' rights and interests.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you very much. Please ask the next one.
Operator: TD Cowen's Steve Scala next. Please speak.
Steve Scala, TD Cowen Analyst: OK, thanks. I have two questions. Are there any changes to the schedule for MEVPRO-2 and MEVPRO-3 due to the delay in MEVPRO-1? That's the first question. The second question was for Cécile. When you joined Pfizer, the company was integrating Warner-Lambert, and since then you have experienced acquisitions of Pharmacia, Wyeth, and Seagen, as well as many business development deals, including ELIQUIS. I think it's fair to say that Pfizer's most successful product comes from trading. In those years, as now, Pfizer thought its pipeline was excellent. Given this history, why isn't Pfizer making another big deal a major focus? Or do you think today's pipelines are significantly better than at any time in the last 25 years? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Great question. Cécile, what do you think?
Cécile Guegan, CFO at Pfizer: Thank you. Just to be clear, I joined Pfizer when I bought Wyeth. I haven't gone through all of these deals, but I think buying Wyeth is one of the best acquisitions we've ever made. Since then, I've seen Pfizer's transformation, and our pipeline has definitely been strengthened over the past 25 years. What I want to say about our priorities is that Albert has previously reiterated that over the past few years we have invested very heavily in important deals and major acquisitions that are driving our success today. We're talking about PADCEV, which is NURTEC, and we also see that Seagen and Metsera pipelines still have plenty of opportunities. As a result, we have a lot of work to do, whether on the commercial side, the R&D side, and the commercial side.
In fact, looking ahead to future business expansion and considering our capital allocation priorities, our focus is indeed on more complementary acquisitions to complement our large and rich product portfolio in the four major treatment areas we are expanding. When considering a business development acquisition, of course, we need to be consistent with the strategy, based on our expertise, and clearly bring the proper financial returns we expect.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Cécile. Chris, can you talk about MEVPRO's schedule? Considering that everyone is very interested in this product, please also ask Aamir to talk about its potential.
Chris Boshoff, Pfizer Chief Scientific Officer: Thank you so much. I'll give a short answer. The schedule for MEVPRO-1 and MEVPRO-2 has been updated since we last talked about this project. As a reminder, these are all event-driven studies, so the timing depends on when we expect the relevant events to occur. Currently, MEVPRO-1 will announce results in the first quarter of 2027, and MEVPRO-2 in the third quarter of 2027. As you saw at the ESMO conference, we got more data, including a convincing 8.9 month progression-free survival (PFS). Correction, MEVPRO-2 is actually in the fourth quarter of 2027, and this information has been updated on ClinicalTrials.gov. Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Yes. I think you expect the MEVPRO-1 results to be announced in February.
Chris Boshoff, Pfizer's Chief Scientific Officer: Around February, that's right.
Dr. Albert Bourla, Chairman and CEO of Pfizer: I mean the publication of research results. This is a forecast based on the current accumulation of events. Amir, in terms of business opportunities, why are we so excited about MEVPRO?
Aamir, Pfizer Commercial Business Leadership Team: I think there are probably three reasons why we're excited. First, I would like to remind everyone that our current commercial business layout is mainly focused on the US and we work with Astellas, but for us, MEVPRO is a global opportunity to cover markets in the US and beyond. So this is significant and exciting. Second, as Chris mentioned MEVPRO-2 and MEVPRO-3, combined with MEVPRO-1, MEVPRO-2, and MEVPRO-3, I think we have the potential to make MEVPRO a product line covering multiple indications. This gives us a huge room to compete. Finally, if we look at the total number of patients, the US is over 50,000, the four European countries and the UK are close to 50,000, and Japan still has 14,000, and MEVPRO-1 alone is likely to cover 30% of these patients. As a result, it has a sizable patient population, global opportunities, and clearly an area where we have deep commercial experience.
That's what makes us excited.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Aamir. Sometimes people forget that XTANDI is one of our largest and most powerful products, but we basically only own half of XTANDI's rights in the US, that's all. And here, we will have interests in the entire US market and all international markets. Please ask the next one.
Operator: Next up is Citi's Geoff Meacham. Please ask questions.
Geoff Meacham, Citi Analyst: Okay. Good morning everyone. Thank you so much for giving me the opportunity to ask questions. I have two questions. The first one is a broader question. I'd like to ask Albert for advice. From a policy perspective, I know it's obviously difficult to make a definitive judgment, especially considering today's point in time, but looking ahead to 2027, how do you view potential risks such as changes in MFN (MFN) policies or previous agreements outside the US being more strictly scrutinized? The second question I'd like to ask Chris is about berobenatide. You've initiated a number of studies covering a variety of metabolism-related indications, and beyond obesity and diabetes. I'd like to know how are you considering expanding berobenatide's combined treatment strategies to fields such as inflammation, neuroscience, or even oncology? Clearly, scientific research on GLP-1's synergy is constantly evolving. Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Geoff. From a policy perspective, the policy clearly has a big impact on our industry, and we are watching it very closely. We are waiting for today's election results. In any case, I think at the moment it looks like we are about to usher in a pattern of separate governments. I don't think there are many things that can be advanced in terms of legislation. I don't expect any changes to the MFN. I believe that the relevant agreement has been signed and will continue to be valid until the end of the current administration's term. I anticipate that Congress will once again show interest in investigating certain matters. Frankly, I don't expect policy changes. This is in stark contrast to what I said to you a year ago. In 2025, I was really worried about the possible impact of tariffs or MFN.
I believe that by successfully addressing these issues, we have brought stability, and this stability is now expected to continue. I think this has also given investors back their confidence and are willing to invest in our industry and sector. Next, I'll leave the conversation to Chris and ask him to talk about GLP-1 and other issues.
Chris Boshoff, Chief Scientific Officer at Pfizer: OK, let me be brief. Our initial goal is to globally establish berobenatide as a GLP-1 drug with the best potential in its class for obesity, to be injected subcutaneously once a month. As you can see, we are now initiating more research involving knee osteoarthritis and obstructive sleep apnea with or without positive airway pressure (PAP). We will also be announcing more Phase III studies in the coming months. As for 2027, you're absolutely right, and we'd like to announce some new research on core drugs in our product portfolio, including the fields of inflammation and immunity (I&I), and potential applications in oncology. You're right, this is an area worth watching. Everyone will also see us speeding up the Phase I project, as well as the projects currently in the pre-clinical stage with highly differentiated characteristics in this field. Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Great. Please ask the next one.
Operator: Next up is Alex Hammond of Wolfe Research. Your line is connected.
Alex Hammond, Analyst at Wolfe Research: Thank you. I have two questions. With the launch of Sciwind Biosciences' GLP-1 products in China, how are the obesity and diabetes markets performing so far? What impact does this have on your judgment of berobenatide's business opportunities outside of the US? Regarding the Lyme disease vaccine, after the recent application was submitted in Europe, can you give me an update on the follow-up regulatory path? How are your discussions with the FDA going? Are there any significant differences between FDA and EMA? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: I'm not sure I understood the second question.
Chris Boshoff, Pfizer Chief Scientific Officer: Lyme Disease. Lyme disease vaccine.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Lyme Disease Vaccine. OK, yeah. Alexander, thank you so much, Alex. Alexandre, maybe you can talk about our GLP-1 product in China and what we expect from it.
Alexandre, Pfizer Commercial Business Leadership Team: OK. Thanks for the question. As you said, Alex, we launched ecnoglutide in China at the end of April this year, and we are happy with the progress so far. We've learned a lot by launching ecnoglutide in China. We've clearly recognized that there are very different segments within the overall chronic weight management category. These patients all fit the definition of chronic weight management, but some of them are looking for product characteristics that are very different from others because of cosmetic considerations. The way they get these products is actually quite different from the other extreme; the latter are very high in weight and value efficacy more, with tolerability being a secondary consideration.
Obviously, what we've learned is confirming our strategy: if we want to be successful in the field of chronic weight management, we need a product portfolio. A product portfolio is also needed because all of these different channels need to be mobilized, and the cost of launching these channels can be shared across the entire product portfolio. These all confirm our strategy very critically. Specifically with ecnoglutide, as we all know, we understood from the beginning that to be successful in the field of chronic weight management, particularly in China, two conditions are required. Of course, we need to have good product characteristics, and our product features are very competitive; but we also need to have type 2 diabetes indications, because this can not only open up hospital channels, comply with local regulations, but also open up e-commerce channels.
I am very happy to tell you that at the end of October, we actually received approval for type 2 diabetes, which opened up relevant channels. Second, our competitors are also eligible for medical insurance reimbursement, so it is very important to compete effectively. I am also very happy to report that we passed the review by the relevant committee of the National Health Insurance Drug Catalogue (NRDL) in June, and are now awaiting the final review at the end of this month. I hope this will allow our products to be incorporated into the entire hospital medical insurance reimbursement system. Combining these two things will really open up our penetration into this market.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you. In my opinion, it's interesting that the business model for obesity is so different from any other field. For us, it really reminds us of the time VIAGRA went public, because the two have so many similarities. Regardless of whether they get reimbursed or not, people are willing to pay out of their own pockets for products they think are valuable. This makes the size of the international market very different. Second, since the launch of such products is consumer-oriented, e-commerce and the Internet play a key role. Just like VIAGRA back then, it is basically the first product that can be obtained through the Internet. Of course, whether we have introduced obesity products or not, we are already deeply involved in this field because of our vaccines, PAXLOVID, and our --
Alexandre, Pfizer Commercial Business Leadership Team: Neurotech.
Dr. Albert Bourla, Chairman and CEO of Pfizer: What are you saying?
Alexandre, Pfizer Commercial Business Leadership Team: Neurotech.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Our migraine products do generate significant business through the PfizerForAll channel. PfizerForAll can be described as our consumer-oriented web portal. I think we've learned a lot from the VIAGRA experience, and now we're learning a lot in China. To add one more aspect, artificial intelligence is changing current promotion methods, not only at the doctor level; in fact, it is more important at the patient level. So we're learning a lot, and we're very happy to enter this market because I think it fits our abilities very well. Next, ask Chris to talk about Lyme disease.
Chris Boshoff, Chief Scientific Officer at Pfizer: Thank you for the question. We all know the incidence of Lyme disease today — the disease's global burden of disease is increasing. The EMA has accepted marketing authorization applications (MAA) for Pfizer and Valneva's Lyme disease vaccine candidates. As the application is accepted, the Human Medicines Committee (CHMP) will now begin evaluating the marketing license application. The CHMP is expected to give an opinion on the listing license in 2027. We have now also submitted an application in Canada. We are continuing discussions with the FDA and are expected to provide relevant developments in the fourth quarter of this year. Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Alexandre, do you have anything to add?
Alexandre, Pfizer Commercial Business Leadership Team: OK, I think this is a very exciting opportunity. I would like to remind you that we already have an FSME business in Europe. We know how to reach people at risk of tick-borne diseases in these endemic regions because we have sales teams and established a business model that works with pharmacies. We're very excited about this opportunity. The population's awareness of Lyme disease is significantly higher than the level of awareness of FSME. We've built up these commercial capabilities, so once approved, we're really looking forward to the opportunity to commercialize this vaccine.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Yes. Of course, in the US, due to the increasing severity and incidence of the disease, public awareness of this disease is currently rapidly increasing. We look forward to completing discussions with the FDA and submitting our application materials. Please ask the next one.
Operator: The next person to ask is Michael Yee from UBS. Please ask questions.
Michael Yee, UBS Analyst: OK, thank you. I'd like to ask Chris two brief R&D pipeline questions. As for mevrometostat, you've always been pretty optimistic about it. I know you've adjusted the formulation to lower peak concentrations (Cmax) and improve tolerability. Maybe talk about how you feel about withdrawing from the trial and achieving efficacy through formulation adjustments. Regarding your tri-specific antibody tivunatamig, this is also a project you are quite optimistic about. Can you talk about neutralizing antibodies or drug-resistant antibodies (ADA)? These factors can be tricky for bispecific and tri-specific antibodies. What do you guys think about this? Thank you.
Chris Boshoff, Pfizer Chief Scientific Officer: Thank you so much. Regarding the first question, which is mevrometostat, as you indicated, for the Phase III study, we did adjust the dosage plan to take with meals and use a more tolerable dosage plan. In this way, Cmax was reduced, while an area under the drug time curve (AUC) similar to that in phase I was still observed. Therefore, we are very confident in the pharmacokinetic (PK) data and the dosage chosen for the phase III study. Regarding tivunatamig, as of now, we have not observed neutralizing antibodies or anti-drug antibodies with functional effects. You're absolutely right, this is a long-term risk for any bispecific or tri-specific antibody, but so far we haven't seen any impact on efficacy. In fact, the longer-term follow-up results of the study we presented previously showed that efficacy was not affected. So, so far so good --
Dr. Albert Bourla, Chairman and CEO of Pfizer: Great. Please keep it up if you can. Please ask the next one.
Operator: Today's last question comes from Goldman Sachs's Asad Haider. Your line is now connected.
Asad Haider, Goldman Sachs Analyst: Okay. Thank you for giving me the chance to ask questions, and congratulations on this quarter's performance. Congratulations too, Cécile, and I wish you all the best. I have a few questions. First, with regard to 2027, thank you for previously explaining price developments related to the Inflation Reduction Act (IRA), 340B, etc. However, before the official guidelines are released, can you give an overall qualitative introduction. What other positive and negative factors are worth paying attention to next year? Also, overall, how should we understand the philosophy behind your guidelines compared to Dave? Looking further into the longer term, you reiterated that with 2028 as the base period, it is expected that a high single-digit compound annual revenue growth rate will be achieved by the end of this decade. At the same time, you also mentioned that cost adjustment measures will lead to increased operating leverage and expansion of profit margins. However, the market's unanimous expectations did not actually incorporate these factors into the model.
Whether it's revenue or profit, there seems to be a disconnect between market predictions and your own expectations. So when looking at Wall Street's predictions, which key assumptions in the profit and loss statement do you think have the biggest modelling bias compared to your internal expectations? Thank you.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Cécile, please answer these two questions.
Cécile Guegan, CFO at Pfizer: Asad, thank you for your questions and your blessings. We will be providing guidance for 2027 around mid-December, just like last year. Now I'll just go over the main drivers we've seen in 2027 in general. One of them is clearly the impact of loss of monopoly rights, including not only IBRANCE, XTANDI and some other products in the US market, but also the international market. We see that ELIQUIS will lose its monopoly rights by the end of 2026. Another factor that will clearly offset this effect is the continued expansion of our portfolio of newly launched products and acquired products. As you've already seen, these products are performing very well, and there are still opportunities for growth. Of course, there are pricing factors, including the impact of MFN and IRA, which we'll reflect in our guidelines.
Our cost initiatives will enable us to continue to do two things: first, invest in our growth drivers in marketing and commercial business areas covered by sales, information, and administrative expenses; second, increase productivity and achieve cost savings in commercial expenses and general and administrative expenses. This is roughly the main trend for 2027. However, we'll provide more information when we publish the guidelines later this year. Regarding the differences between our high-single-digit growth goals and Wall Street expectations, if you look at the source of these differences, you'll find that they don't actually focus on one aspect or product; the same is true of our growth path.
We see that one of the factors supporting the growth path is clearly the continued growth of our new and acquired products. This is not only because the market is still growing and our market penetration rate is increasing, but also because we are developing new indications for these products to continue serving more patients and expand our market coverage. The second element is the R&D pipeline. While some products are clearly part of the major differences in our views with Wall Street, such as obesity products and some oncology products, what I want to say is that our growth path is not dependent on one product or one treatment area.
We have a broad product portfolio, several Phase III studies are ongoing, and the next 18 to 24 months will also usher in some key developments. These should also give the outside world greater confidence and see our opportunities to bring breakthroughs to patients in areas where critical unmet medical needs are being met.
Dr. Albert Bourla, Chairman and CEO of Pfizer: Thank you, Cécile. I'd like to add that, as CEO, when I see a difference between our internal predictions and Wall Street predictions, it certainly makes me feel a sense of urgency to check our own assumptions and make sure we're making the right decisions when analysts disagree. Therefore, we have carried out such checks over and over again. Our conclusion is what we told you earlier: we expect high single-digit growth from 2028 to 2033, and we are very aware of the differences in forecasts for each product. As Cécile said, differences don't just exist in the R&D pipeline; many analysts don't cover the R&D pipeline. As a result, this phenomenon will occur: out of the 12 or 13 analysts that formed the overall performance forecast for the full year of 2031, only 5 analysts for some products included the forecast, while others were not included.
For the R&D pipeline, this is to be expected. However, we have also seen that there is also a big difference between predictions for new products that have already been launched. I'll give you two examples; I think everyone needs to reevaluate their judgments. One is NURTEC. Based on current performance, we're close to $2 billion in adult revenue, while Wall Street's forecast for 2030 is almost $2.5 billion. So I think there's a difference here. Let me give you another example, ELREXFIO. Wall Street's forecast for a competitive product was $5 billion, while ours was only $600 million. We'll be presenting a set of data showing that our products are very close in efficacy, but are better in terms of tolerability and side effects.
Of course, this remains to be confirmed, but I don't think the gap between $600 million and $5 billion is reasonable, even based on current information. I think as our R&D pipeline and research results reveal more information, as well as more information on the actual performance of new products — including newly launched products and acquired products — Wall Street may begin to adjust their figures, and the predictions of the two sides may also converge. At this point, I think our conference call is nearing its end. I would like to say that I am very proud of our performance and execution through the third quarter. I would like to thank my colleagues at Pfizer.
When I visited our employees, whether in our laboratories, production sites, or in markets around the world, I saw a talented and dedicated team striving for breakthroughs that can change the lives of patients. We look forward to sharing more updates on our progress. Thank you all for attending today's conference call and for your interest in Pfizer.
Operator: Thank you. This concludes our meeting for today. Thank you all for taking the time to participate. You can now disconnect.