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The pharmaceutical giant rode its groundbreaking mRNA COVID-19 vaccine and antiviral pill Paxlovid to record revenue in 2022; the $100.3 billion it raked in (up from $81.3 billion in 2021) catapulted the company 40 spots on this year’s Fortune 500 list. 
<ul> 
 	<li>Pfizer is planning to sell its COVID-19 vaccine commercially in 2023, rather than contracting with the U.S. government, with a target price between $110 and $130 per dose.</li> 
 	<li>Still, it expects revenue to drop as the demand for COVID vaccines eases in 2023. Pfizer has a slate of other new drugs in its pipeline, such as the Respiratory Syncytial Virus (RSV) vaccine and medication for migraines.</li> 
 	<li>The company is expected to lose patent protections for some key drugs, including Ibrance, used for breast cancer treatment, between 2025 and 2030.</li> 
 	<li>It has acquired other biotech or smaller pharma companies to bolster its pipeline in the future. Key 2022 deals include the $5.4 billion purchase of Global Blood Therapeutics and the $11.6 billion acquisition of Biohaven.</li> 
</ul>

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<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;How do you balance being one of the world’s saviors during a pandemic without being perceived as gloating or, more important, gouging a global population in need? That’s the tricky needle Pfizer has had to thread, given the company’s status as one of the most effective coronavirus vaccine manufacturers in the world. Pfizer recorded 2020 revenues of about $42 billion—but that largely excludes the post-winter period, when Pfizer’s COVID vaccine was granted emergency use authorization by the FDA. The company expects to bring in $26 billion in COVID vaccine sales alone this year, about 60% of its total 2020 revenues, thanks to its sprawling relationships with governments and pandemic-focused organizations across the globe. An added benefit? Via its partnership with Germany’s BioNTech, the maker of the “little blue pill” is now synonymous with mRNA vaccine technology that could feed its pipeline in infectious disease treatments and other therapeutics for years to come.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">How do you balance being one of the world’s saviors during a pandemic without being perceived as gloating or, more important, gouging a global population in need? That’s the tricky needle Pfizer has had to thread, given the company’s status as one of the most effective coronavirus vaccine manufacturers in the world. Pfizer recorded 2020 revenues of about $42 billion—but that largely excludes the post-winter period, when Pfizer’s COVID vaccine was granted emergency use authorization by the FDA. The company expects to bring in $26 billion in COVID vaccine sales alone this year, about 60% of its total 2020 revenues, thanks to its sprawling relationships with governments and pandemic-focused organizations across the globe. An added benefit? Via its partnership with Germany’s BioNTech, the maker of the “little blue pill” is now synonymous with mRNA vaccine technology that could feed its pipeline in infectious disease treatments and other therapeutics for years to come.

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F500-2021-77-Pfizer

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G500-2020-215-Pfizer

Pfizer slips 17 spots this year, in large part because of the expiration last year of one of its more lucrative patents, for the fibromyalgia drug Lyrica. That eroded the drugmaker's revenue, which fell 4% overall in 2019. But Pfizer also made some big moves: After years of rumors that it would split up, Pfizer finally slimmed down, announcing over the summer that it would merge Upjohn, its off-patent drug division, with general drug company Mylan. Meanwhile, the pharmaceutical giant found some significant efficiencies in its operations: profits surged some 46%. The company, which is developing a promising COVID-19 vaccine in partnership with German drug company BioNTech, in July announced the U.S. government had ordered $1.95 billion worth of doses of the new treatment—to provide it to Americans for free, if the FDA approves the vaccine.

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F500-2020-064-Pfizer

Pfizer slipped a few spots, in large part because of the expiration last year of one of its more lucrative patents, for the fibromyalgia drug Lyrica. That eroded the drugmaker's revenue, which fell 4% overall in 2019. But Pfizer also made some big moves: After years of rumors that it would split up, Pfizer finally slimmed down, announcing over the summer that it would merge Upjohn, its off-patent drug division, with general drug company Mylan. Meanwhile, the pharmaceutical giant found some significant efficiencies in its operations: profits surged some 46%.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fastest-growing Companies

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Pfizer is known for developing medications and vaccines, and for manufacturing them at dozens of factories around the world. Its treatments span a broad range of areas including oncology, rare diseases, inflammation and immunology, and vaccines. Oncology has become the company's primary strategic focus, with CEO Albert Bourla committing more than 40% of annual R&amp;D spending to cancer research. Pfizer significantly expanded its cancer portfolio through its 2023 acquisition of Seagen, gaining a suite of antibody-drug conjugate therapies including Padcev for bladder cancer and Adcetris for lymphoma. The company is also making a major push into the obesity market: its late 2025 acquisition of Metsera brought Pfizer back into the obesity space after an earlier internal program was scrapped, positioning it to compete against dominant players Novo Nordisk and Eli Lilly. During the COVID-19 pandemic, Pfizer developed a landmark and highly profitable vaccine in collaboration with the startup BioNTech; it also developed a treatment for COVID infections sold as Paxlovid. Pfizer was founded in 1849 by immigrants in New York City, which remains the site of its global headquarters.

Q2 2026

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Pfizer (PFE): Company Profile, Stock Price, News, Rankings

legacy

Pfizer

pfizer

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

Good morning, and welcome to Pfizer's earnings call. I'm Francesca DiMartino, 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 first quarter of twenty twenty five via a press release that is available on our website at Pfizer.com.

I'm joined today by Doctor. Albert Bourla, our Chairman and CEO, and Dave Denton, our CFO. Albert and Dave have some prepared remarks and we will then open the call for questions. Members of our leadership team will also be available for the Q and A session. Before we get started, I want to remind you that we will be making forward looking statements and discussing certain non GAAP financial measures.

I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR website on Pfizer.com. 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 the statements. With that, I will turn the call over to Albert.

Thank you, Francesca. Good morning, everyone. Thank you for joining our call. We are very pleased with our performance in the first quarter as we continued to execute with focus and discipline on our strategic priorities. We are strengthening our R and D organization in our efforts to advance our pipeline and productivity.

We are maximizing the value of key products in our commercial portfolio. And we are improving operating margins with our continued progress in making our company more efficient. In the current volatile external environment, the underlying strength of our business and strong relationships with government leaders across the world help us navigate with agility. While we continue to engage and plan for contingencies, we are focusing day to day on what we can do to move our business forward. I want to emphasize our continued confidence that we are well positioned to enhance shareholder value.

Now I will turn to our top strategic priority in 2025, improving R and D productivity as we advance our pipeline with sharpened focus. We are intensifying our rigorous commercial assessment and portfolio prioritization from early clinical development. This means we will be disciplined in managing our portfolio, directing investment and attention to potential blockbuster or mega blockbuster, and scrutinizing the total number of assets under development. Our Danube Prix announcement earlier this month demonstrates our commitment to this approach. This continued the development of Danube Prix, one of our candidates in our Obsta portfolio, although difficult was the right decision for the company.

Going forward, we are committed to building our cardiometabolic pipeline, including obesity, by advancing internal programs, such as our Gipper antagonist, and pursuing external opportunities that could include partnerships or acquisitions. We will continue to be disciplined as we move through key decision points for our pipeline or our business development targets. We believe we have the potential to address significant patient needs with differentiated approaches that focus on supporting optimal weight management and related conditions. We will work on potential medicines and combination regimens that could be more accessible, better tolerated, easier to dose, and more effective in supporting the right effects on body composition and muscle mass. In addition to sharpening our focus in internal medicine, since expanding his role in January as our Chief Scientific Officer, Chris Bossov has moved both thoughtfully and quickly in reshaping our R and D organization to also center on oncology, vaccines and inflammation immunology, in addition to internal medicines.

Chris has enhanced his leadership team with some terrific additions who are recognized as leaders in their field. Patrizia Cavazoni is our new Chief Medical Officer, Jeff Legos is our new Chief Oncology Officer, and Jim List is our new Chief Internal Medicine Officer. These leaders each bring many years of experience, deep expertise and proven track record in guiding the discovery, development and approval of practice changing therapies, and they are an excellent addition to our already strong cast of leaders in R and D. We are on track for a strong year of anticipated pipeline catalysts in 2025. We are making progress towards anticipated multiple key milestones, including at least four regulatory decisions, up to nine phase three readouts and significant series of pivotal program starts.

With one of our key oncology programs, we are aimed to bring forward what could represent the first potential treatment advancement in more than thirty years for patients with BCG naive, high risk non muscle invasive bladder cancer. We are encouraged by a positive readout of the pivotal Phase three CREST trial of Sasanlimab in combination with BCG, a current standard of care. We presented the full data from this study this past weekend at the annual meeting of the American Urological Association. Non muscle invasive bladder cancer is a condition predominantly treated by urologists. In multiple market research and focus group studies, urologists stated a significant preference for a subcutaneous PD L1 because it can be used in their practices and eliminates the need to refer their patients to infusion centers.

We also anticipate meaningful readouts this year for PADCEP and Elorexvio. PADCEV already is a core therapy in our oncology portfolio. PADCEV plus pembrolizumab is the most prescribed first line treatment for locally advanced metastatic urothelial cancer in The US. We are working toward more than doubling the total addressable patient population in The US for PADCE, with potentially registrational interim data we expect this year from ongoing pivotal studies in muscle invasive bladder cancer. We are also working to reach a significantly expanded population of patients with multiple myeloma.

We are anticipating a Phase III readout this year for LREXFU in a study for double class exposed relapsedrefractory multiple myeloma. If successful and approved, this would more than double the addressable population versus the currently approved indication. In addition to the increased addressable population, moving to earlier lines of therapy is expected to increase the duration of treatment and potentially create an inflection point in elrexious growth. We expect to begin pivotal studies for our investigation of PD L1 Vedotin AADC later this year. This will be for first line metastatic head and neck squamous cell carcinoma and second line non small cell lung cancer.

We also anticipate a first line pivotal study start for SV, Sigvatatab Vedotin. This is a novel integrin beta-six targeting Vedotin ADC that, if successful and approved, has the opportunity to change the standard of care globally for IBC expressing tumors. Both these ADCs, PDL-1V and SV, are potential first in class A disease using a vedodin payload that elicits immunogenic cell death. And in combination with an immune checkpoint inhibitor demonstrates significant results. Early data for PDL-1V and SV in combination with pembrolizumab are highly encouraged.

With both ADCs, we are targeting non small cell lung cancer, the most frequently diagnosed cancer globally, and the leading cause of cancer related deaths. Lung cancer represents a substantial area of patient need and a growing market with the highest projected CAGR in oncology through 02/1930. In vaccines, another of our priority therapeutic areas, we see opportunities to enhance and augment our strong positions in the market. We are also planning a potential registrational study in adults later this year with our fourth generation PCV candidate. With our fourth and fifth generation PCV candidates, we believe we can build on our leadership in the industry.

Our fourth generation candidate covers 25 serotypes, including potentially improved immunogenicity for serotype three, which is one of the largest remaining contributors of disease. We are also working to accelerate progress with our fifth generation candidate, which is in preclinical development and covers over 30 serotypes. As we continue to scrutinize the number of programs we are actively advancing, we will have opportunities to accelerate or add others to help address significant patient needs. One example is the recent accelerated start of a pivotal study for Nurtec for menstrually related migraine, which is estimated to impact more than half of women who experience migraine. We look forward to providing future updates about our pipeline progress as we continue to sharpen our focus on our most meaningful programs in prioritized therapeutic areas.

Commercial excellence is our key categories in another in our key categories is another 2025 strategic priority. More than a year ago, we decided to separate The U. S. And international operations. Under the leadership of Amir Malik, our Chief U.

S. Commercial Officer, and Alexandre Desarhmet, our Chief International Commercial Officer, we refined our commercial model to bring heightened focus, helping us strategically prioritize our most impactful products and regions. It is working well. In The U. S, our team demonstrated focus, the strength of our key products and continuous improvement in execution.

In International, we are back to operational growth in the first quarter across all parts of the division. This was the result of prioritization and disciplined focus on key growth drivers to maximize return and accelerate new product penetration there. Our performance was strong both in The U. S. And international markets across several key products, including the Vyndaqel family, Nurtech, Patzsef and Lorbran.

Our Vyndaqel family of products had robust growth in the quarter, though we are seeing the impact of competition with a new market entrant, and we anticipate this will continue through the year. We will work towards maintaining our market leading position that has come from six years of establishing credibility expertise with the cardiology community. Our team remains committed to addressing high unmet patient need by helping to improve diagnosis and ensuring appropriate patients with ATTR cardiomyopathy receive treatment. Demand continued to strengthen for Nurtech, with revenue growing 40% operationally in the quarter. Our commercial teams effectively engaged with health care professionals, and we were pleased with strong outperformance of our newly launched consumer campaigns.

We are pleased with the continued strength also of our oncology portfolio. TACCEV, for example, grew 25% operationally, driven by increased market share in first line metastatic urothelial cancer. LOBRENA grew 39% operationally, as we continue to see strong adoption with its emerging as a potential first line standard of care for patients with ALP positive metastatic non small cell lung cancer. INI is another key commercial category for Pfizer, and we are drawing on our extensive experience in launching medicines in this therapeutic area. Familiarity among healthcare professionals continued to improve for Xibingo, which grew 42 operationally in the quarter.

Our commercial team is continuing to work towards increased patient access for this JAK inhibitor for patients aged 12 and up with moderate to severe atopic dermatitis. With Litfulo, we are encouraged by the growth we have seen today. We will seek to further unlock access to this advanced systemic treatment for patients with severe alopecia areata. These highlights show how we are positioned to further expand and sustain our performance trajectory among our key brands. And with that, now I will turn it to Dave to speak about the other two strategic priorities.

Thank you, Albert, and good morning. I will begin this morning by reinforcing the fact that our solid financial results demonstrate our strong executional focus. We continue to concentrate on driving positive patient outcomes and delivering on our financial commitments while navigating an ever complex external environment. Our productivity improvement programs continue to drive a more efficient organization, enhanced by our strong operating margins in the quarter. Going forward, we expect to improve our cash flows, reduce our debt leverage and have more flexibility for our three capital allocation pillars.

Our focus remains on creating long term shareholder value. We will continue to invest in our business for the long term while prudently returning capital to our shareholders. Now first, let me start with our first quarter results. Second, I'll touch on our capital allocation priorities. And then I'll touch upon our cost improvement initiatives.

I'll finish up with a few comments on the macro environment and our twenty twenty five guidance, which we are reaffirming today. For the first quarter of twenty twenty five, we recorded revenues of $13,700,000,000 a decline of 6% operational. The decline was largely due to lower tax loaded revenues, in part due to last year's one time Paxlovid revenue credit recorded in Q1 of twenty four. In addition, U. S.

Revenues were tempered by changes in the IRA Medicare Part D redesign, which took effect in the first quarter. Partially offsetting the decline was growth in several in line products in The US and overall growth internationally. On the bottom line, we reported first quarter twenty twenty five diluted EPS of $0.52 a share and adjusted diluted earnings per share of $0.92 ahead of our expectations due to overall strong gross margin and cost management performance. Our performance continues to show that our refined commercial approach is working. We continue to focus on key products and geographies, the deployment of our commercial field resources globally, and the continued optimization of our marketing resources into key priority areas.

We saw strong contributions across our product portfolio portfolio, primarily driven by the Vyndaqel family, Commerity, Patseb, NerdTech and Labrenna, which were more than offset by declines in Paxlovid, Eliquis, Xeljanz and Ibrance. Adjusted gross margin for the quarter expanded to approximately 81%, primarily a result of favorability in crude royalties, partially offset by unfavorable product mix. Focus on cost management across our manufacturing network will remain a priority. Total adjusted operating expenses were $5,200,000,000 for the first quarter of twenty five, a 12% decline operationally versus last year. Now looking at the components, adjusted SI and A expenses decreased 12% operationally, primarily reflecting our ongoing productivity improvements, driving a decrease in marketing and promotional spend for various products, as well as lower spending in corporate enabling functions.

Adjusted R and D expenses also decreased 12% operationally, driven primarily by a decline in spending due to our pipeline optimization efforts expected to be reinvested later this year and into next year. We continue to be disciplined with our operational expense management. Q1 reported diluted earnings per share were $0.52 and our adjusted diluted earnings per share were $0.09 2¢, which benefited from our efficient operating structure in addition to favorable global income tax resolutions in multiple tax jurisdictions spanning multiple tax years, as well as a favorable change in the jurisdictional mix of earnings. With that, now let me quickly touch upon our capital allocation strategy, which is designed to enhance long term shareholder value. Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at the appropriate level of financial return, and making value enhancing share repurchases.

In Q1, we returned $2,400,000,000 to shareholders via our quarterly dividend, invested $2,200,000,000 in our internal R and D, and completed business development activity as expected was minimal. We achieved our 3.25 gross leverage target at the end of twenty twenty four, a key priority towards improving our capacity for business development. In addition, the monetization of our Halion investment has contributed to our improved cash position. As a reminder, in January, we monetized approximately $3,000,000,000 of our Halion shares. And in March, we monetized the last tranche of our Halion shares, receiving approximately $3,300,000,000 in net cash proceeds.

With this sale, we have now fully exited our ownership in Halion. Overall, our objective remains to delever our balance sheet over time, which will further support our return to a more balanced allocation of capital between reinvestment and direct return to our shareholders. We continue to be disciplined on our operational expense management, progressing multiple improvement programs as we remain focused on driving long term margin improvement over the coming years. We expect we continue to expect initial savings from phase one of our manufacturing optimization program in the latter part of this year with approximately 1 and a half billion dollars in savings from phase one that's expected by the end of twenty twenty seven. In addition, we are progressing the evaluation of other strategies to improve our network structure and product portfolio, respectively.

As part of our goal to return to a pre pandemic operating margins, we remain on track to deliver on our goal of at least $4,500,000,000 in cumulative net cost savings from our ongoing cost realignment program by the end of this year. And today, we've announced our expectation that this program will deliver an additional $1,200,000,000 in net savings, primarily in SI and A, and in part by leveraging digital tools, including automation and AI, as well as simplification of our business processes. The savings are expected to be fully realized by the end of twenty twenty seven. Furthermore, we have identified additional opportunities to drive improvements in productivity and operational efficiency in our r and d organization, again, through enhanced digital enablement as well as automation. We expect approximately $500,000,000 in savings associated with these efforts to be realized by the end by the end of twenty twenty six with the savings reinvested within our r and d program.

Now in total, we expect approximately $7,700,000,000 in savings by the end of twenty twenty seven to drive operational efficiency, strengthening our business with the potential of contributing significantly to our bottom line over this period. Now let me turn to our full year 2025 guidance. As you are aware, the pharmaceutical industry is currently navigating a complex global landscape shaped by rapidly evolving trade and tariff policies. To help navigate this fluid environment, we've established a cross functional team to analyze a range of potential outcomes while developing strategies to help us mitigate the potential impact to our business in both the short as well as the long term. These actions include the management of current inventory levels in certain jurisdictions, leveraging our domestic manufacturing footprint, and the potential production of certain API and products in The US.

Should we be impacted by further tariffs in the future, we will assess the impact of these policies enacted and provide information at the appropriate time. Let me now spend just a few minutes on our 2025 guidance, which remains unchanged and, to be clear, does not include the potential impact of future changes in trade and tariff policies. We expect total company full year 2025 revenues to be in the range of $61,000,000,000 to $64,000,000,000 and full year 2025 adjusted diluted earnings per share to be in the range of $2.8 to $3 a share, which reflects our expectation of strong contributions across our product portfolio and our focus disciplined on cost management. As we finish Q1 with earnings strength and excluding the potential impact related to future trade changes, we are currently trending toward the upper end of our adjusted diluted earnings per share guidance range. In closing, let me emphasize several key aspects of our business.

We will continue our focus on executing to maximize the commercial value of our product portfolio, and we remain committed to driving value creating innovation while strengthening our pipeline. Additionally, our cost improvement programs are set to deliver operating margin expansion. Expected productivity gains will be driven by leveraging our digital capabilities and simplifying our business processes. Our improved balance sheet set the stage for more balanced and enhanced capital deployment focused on creating value for our shareholders. And with that, I will now turn it back over to Albert for Q and A.

Thank you, Dave. Operator, please assemble the queue and let's start the Q and A.

We'll go first to Vamil Divan with Guggenheim. Please go ahead.

Great. Thanks so much for taking the questions. Maybe two, if I could. One, just appreciate your prepared remarks. We mentioned the dividend, your commitment to maintaining and growing the dividend over time.

But I think we've just gotten sort of increasing questions about this from investors over the last few months, especially with some of the tariff uncertainty and how that might impact cash flows and obviously not talking about maybe getting more active on the business development side. Maybe just to reinforce that if not even one more time and nothing else, just the the level of commitment you have there. And even if there is an impact from the tariff side, you still feel comfortable in being able to maintain and grow that. And then my

second question is around your go ahead, Vamind. Sorry.

Okay. Yes. I just had one other, if I could. Just on the COVID business and just your views, obviously, understand the nuances around the Paxlovid sales this quarter and the vaccine sales will come later in the year. But do you still see that business being relatively stable this year relative to last year?

Or has that changed from what your expectation for at beginning of the year? Thank you.

Thank you, Vamy. Dave will tell you about dividend and then Amir and Alexander about the copper business.

Yes, Vamil, clearly consistent with my prepared remarks, the dividend remains a critical component and a key component of our capital allocation strategy. As you can tell, we have been very focused on improving the operating margin performance of our business, thus improving our cash flow yield over time. This is all in support of all of our capital allocation priorities with dividend being a key component of that.

Thank you, Dave. And let's start with Amir.

Thanks, Vamil. So, you asked about Paxlovid. Paxlovid utilization trends very closely to infection rates, and we see a fifty percent treatment rate and close to an eighty percent fulfillment rate when there's infection. And we've set up a very good commercial model to do that. I think what you saw in Q1 was largely the function of the fact that we have a lower winter wave, but we still treated over seven hundred and fifty thousand patients starting the year with about one hundred thousand a week and tapering off at around thirty five thousand to forty thousand.

And while these numbers are lower than the consensus numbers, they're very much in line with our expectations and what we track for the business. And what we've seen in multiple years now is that over the course of the year, you have two COVID waves: one in the summer and one in the winter. The peaks and valleys and the timing of those vary, but we have had consistently multiple waves. And our baseline assumption is that we will have those waves this year as well, and that we will be able to execute our business, including PACS utilization in the way that I described, consistent with those waves. We've also set up a model where we can successfully transition the Medicare patients out of USG and into our traditional Medicare model beginning March first of this year.

And so, we can't predict exactly what the timing and shape of those waves will be, but we're ready to execute against it.

I will start with community. As you know, community is bigger than PAX COVID. On Community, we beat consensus quite nicely by CHF130 million, essentially driven by execution. As you know, in International, December is in the Q1 of twenty twenty five. So in December, we continue to execute our contract in The UK and in Europe and in competitive setup like in Japan, maintain very strong leadership there until the end of the vaccination.

Now as we move into Q2 and Q3, we will start actually shipping our vaccine into thousand hemisphere countries where vaccination campaign is going to start and in particular in Brazil where we won the two year contract for adults which is a very important vaccination country. Now, we talk about Paxlovid, you know Paxlovid is smaller internationally and we performed as we were expected. We have now Paxlovid commercially sold in 49 markets, so there is no more advanced purchasing phenomenon. So it's really associated with utilization. The point is, in international we have actually low utilization compared to The US, we still need to do some work in terms of utilization and treatment.

Thank you, Alexander. Operator, please the next question.

We'll go next to Evan Seigerman with BMO Capital Markets.

Hi, guys. Thank you so much for taking my question. And I didn't want to touch on the reasons for the Danube discontinuation, but I more want to look forward, as you think about a potential obesity asset, what are some key aspects of the profile that you're looking for, either from an internal perspective or potentially externally? Thank you so much.

Let's start with Chris and then go to Andrew.

Thanks very much. Thanks for the question. Yes, as Albert has stated, daniglucron was the right decision for Pfizer based on totality of data. And as we stated previously, a single asymptomatic participant in a dose optimization study with rapid dose titration experienced a potential drug induced liver injury which recovered rapidly after treatment discontinuation. Although we're not 100% sure this is due to Dariglupron, the risk was high enough for us to discontinue the program while still being committed to obesity and employing our global resources for other opportunities.

Cardiovascular metabolic is one of our core strategies within internal medicine, an area with significant remaining unmet need. And just a reminder for obesity alone, up to sixty percent of patients discontinue current approved medicines after twenty four months. We will continue to apply our global capabilities to advance our pipeline of differentiated oral medicines, including our oral GIPA antagonist currently in phase two and advancing our preclinical portfolio to the clinic. We believe the future will be more fragmented based on differentiated or unique combinations with an emphasis on tolerability, accessibility, and convenience. The future will also become more personalized based on combinations addressing specific diseases associated with obesity and with metabolic dysfunction including neurology, cardiovascular and respiratory.

Chris gave you a very full answer. I would just underline that although you referenced obesity, the role of incretins and potentially other modalities or targets more broadly needs not to be underestimated. And obviously, this extends beyond cardiovascular medicine. And we're interested in all the potential opportunities that exist with these molecules. In terms of which assets or which portfolio of assets we're seeking to build, I think there's two axes.

Number one, obviously, is clinical differentiation. And Albert referenced some of the ways you can do that in terms of scheduling, tolerability, muscle preservation, but there are others too. But then separately, there's commercial differentiation, which really references the indications that we pursue. So I hope that gives you some idea of our direction of travel. When we have something to say, you'll be the first to know.

Good to know. Thank you. Next question, please.

We'll go next to Tim Anderson with Bank of America.

Thank you. I have a question on tariffs. I figured if anyone's close to this, it's probably Pfizer, Singh as your Chairman of Pharma. If sector specific tariffs come through, do you think that's likely to be through the February investigation route?

could still happen somehow through the IEPA route? To me, it seems like it would be two thirty two, but not everyone agrees. And your best sense of timing for when everyone might have more information from the administration? And then last question, is it an absolute pipe dream to think that sector specific tariffs might really only be applied to countries that could, in fact, pose threats of national security like China? It's hard to see Ireland being an enemy of the country.

Thank you, Tim, and I would agree with the last comment that you made also. But let me tell you where we stand with that. First of all, we had on April 2 an executive order about basically placed tariffs across the board to everything we can see or feel or dream, except two things: pharmaceuticals and semiconductor. Clearly there is risk going forward, but it's a very, very different ballgame if you are part of a tariff and you hope to be excluded than if you are not part and you try not to be included. Then on April 14, the administration made even more clear what is their concern with the pharmaceutical sectoral investigation.

And they made it clear by launching it through a two thirty two, which as you pointed out, it is an investigation that is connected with national security threats. This is not something new. The first Trump administration had expressed serious concerns about the several essential medicines that they are made outside The US. The Biden continued with his concerns. Actually, the Trump administration had also a list, but had created with those medicines in the first one.

And now with the second Trump administration, not only through the February, but through my discussions with the highest level of the government, they are confirming that this is their primary concern. And I think it's legitimate. I think no country wants to have critical medicines produced outside of the country, particularly they don't want to have critical medicines produced in countries that tensions are high or can be escalated. So there is, I think, a very clear distinction in the way that they look at it in terms of what products they are talking about. And there is a very clear distinction as to what comes from friendly countries or what comes from adversary countries.

So with all of that in mind, and knowing that we are engaging and we have very productive discussions with all the secretaries that are involved and the White House staff that are involved into that, I'm cautiously optimistic, as I said, given the data that we have not been there, And I hope that we will weather it successfully. We will work with the administration to make sure that their concern on national security will be addressed with the best possible way. I think that was the only question, right? Yes. Let's go to the next question, please.

We'll go next to Steve Scala with P. D. Cowen.

Thank you. And two questions. The first one is very similar to the one that Tim just asked, and that is, Albert, given your unique insights into the thinking in Washington, do you think MFN legislation is only the most remote of possibilities or even simply not going to happen? And then secondly, what is the percent utilization of The U. S.

Plants? It is great to have this vast network in The US, but if there's little or no excess capacity or flexibility, then it's a more limited advantage. Thank you.

Thank you very much for both questions. Look, on the MFN, first of all, I can't speak about what would be the intentions of the government, but I can comment on what I have seen so far. And the President issued an executive order that was focusing on pharmaceutical, that was very, very extensive, so covered a lot of topics over there. MFN was not mentioned over there. On the contrary, what was mentioned over there was the pill panel that he instructed so that we will find ways to resolve.

What was mentioned over there was PBM reform and transferring of rebates to the PACE. What was mentioned over there was 340B reform. So I would say that clearly one can say that when the president issues an executive order, then you can read into what are the priorities of the administration. And I think that so far, the way I have seen it, it is the bill penalty. It is the 340B.

It is the PBM reform, and it is to lower the cost for the patients, because right now in The US, the patients, are paying disproportionately out of pocket for their medicines compared to other medical interventions. So that's my 2¢ on that. And again, I'm cautiously optimistic, but nothing is certain. And we are working continuously to influence the thinking and the decision making, and particularly understanding what is it that they want to achieve so that we can provide productive solutions. On the percentage of utilization of our manufacturing sites, first of all, it is quite good.

I don't want to go to the details, but there is ample room if there is a need to transfer production to accommodate. We have huge manufacturing capacity right now in The US, particularly for everything that is injectable. And our ability, if there is a need, is clearly there. And without the need to build new facilities, just utilize the current ones and transfer production there. With that, let's go to the next question.

We'll go next to Umer Raffat with Evercore ISI.

Hi, guys. Thanks for taking my question. I have two here, if I may. First is on dividend and second is a follow-up to something Albert mentioned. Perhaps first on dividend, I know there's obviously LOEs coming up over the next three to four years with net income and free cash flow pressures.

How much of that pressure could be offset by potential OpEx cuts that you're taking underway? I guess said differently, can you hold net income at or near the current levels? That's part one of the question. And then also, if a tariff impact approaching, I don't know, 15 to 20% of bottom line kicks in, can you still confirm your your commitment to dividend? And finally, Albert, you mentioned the distinction between friendly versus unfriendly countries.

But in the initial tariff announcement, that didn't necessarily seem to hold true. So why should that apply in the case of pharma? Thank you very much.

You. Dave, why don't you take the dividend question?

Yes. So Umer, clearly, in my prepared remarks and what we said very consistently is our objective is to improve our operating margin performance over time. And we've said that knowing quite well that we have LOEs approaching. Some of the improvements in productivity that we are making are designed to improve operating margin in the face of those LOEs. At the same time, our business is actually evolving such that, particularly in the oncology space, where we're leaning into that business and those products actually yield a very high gross margin and operating margin performance.

So the short answer is yes, we can withstand that. And secondly, we're very focused on improving our operating margin over time in the face of those LOEs. Clearly, you've also heard us reiterate very specifically our focus on maintaining and growing our dividend over time, and we would continue to do that. And we work hard to understand the environment looking forward, and I don't want to hypothesize on what could happen, but clearly we're watching the situation closely and our commitment to dividend is steadfast.

And I think, David, you made also very clear quantitative calculations of what we expect. And when we put a number out there, we know that we can hit it. And David spoke about $7,000,000,000 by year 2027, while maintaining the R and D at the current levels of investment, which which I think it is a key strategy to offset, first of all, to navigate in a certain environment. That's the best way to do it, is to be productive. Another comment I want to make on that is that the cuts are not across the board, or they are not by just reducing resources that are valuable.

They are very strategic. And they are happening, first of all, with the deployment of technology. AI right now has dramatic impact in the ways that we have able to secure cost reductions and digital technology in general, but also through significant business simplification that we are implementing. And we looked at every single thing of how we do things. And, you know, when you find simpler things of doing it, there is a significant cost element associated.

So all in all, I think, as Dave said, we have our targets and we are very confident. You can calculate that we made them public, and we are very confident that we will achieve them by the year 2027. Now, as regard to the tariffs, if that will be on friendly or non friendly countries, look, it's up to the government to decide what they want to do, but it's very, very clear in my discussions that the national security concerns is very clear to my discussions. Least national security concerns are pretty much associated not with friendly countries. Okay, thank you.

We'll go next to Chris Schott with JPMorgan.

Hi, great. Thanks so much. Just my first question on guidance. Pfizer's gross margins for this year, are we should we still think about full year gross margins in the mid -70s range? Or has that changed at all following some of the upside with 1Q?

Pfizer (PFE) Q1 2025 Earnings Call Transcript

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