Pfizer Inc at Jefferies London Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. So Dave, we'll start with the question that I think we've all gotten over the last few weeks or at least particularly last week with the RFK announcement and then, of course, Dr. Oz more recently heading up HHS and potentially CMS, it sounds like. I think there's been a lot of anxiety, especially when that initial announcement got through. But I feel like from our work and I think talking to investors, there's the rhetoric and then there's the anxiety and then there's the reality. And I know you have a huge government affairs team, and I know you guys have looked at this. Can you talk about the impact, the administration change and the new appointments will have fundamentally actually on the business of Pfizer, which I think is what we really should be focusing on? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 9:00AM, PFE.N - Pfizer Inc at Jefferies London Healthcare Conference

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. And actually, just a quick follow-up on -- outside of vaccines, we've gotten a couple of questions on PAXLOVID. Our work suggests there really shouldn't be any impact there. Any early comments?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. So we'll hop around here because there's a lot to cover. I think the biggest catalyst that's coming up, I think, for Pfizer near term is on obesity. You're going to have an update in Q1 '25. You guys owe us a publication on that Phase 2b danuglipron data, and I'm sure we'll have that shortly. But maybe, Andrew, if -- we don't have that data right now, but if we were to see that data, what makes your team confident that there's going to be a competitive profile that a QD formulation can really deliver that can really hold up versus your peers like Lilly, which should be first on the market?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Maybe two quick follow-ups on that. One, I was with your IR team a couple of weeks ago, and I feel like a lot of people, when they think about oral GLP-1s, there's a focus on the US market. But as you've mentioned, there's 1 billion people in the world with obesity. When I think about the structural advantages Pfizer may have, and you've seen this with COVID, the ability to do country-by-country negotiations to really deliver a product at scale, would you be surprised, let's say, five, ten years down the road when danu is launched, that this would also have a very significant ex-US presence? And how are you thinking about distributing a product like that?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. And just maybe lastly on danu, like the legal term is usually burden of proof. It feels like the burden of proof is why we wouldn't move this forward. You have competitive weight loss data. You have bridging data that you're soon about to generate. It certainly sounds like there is momentum on moving this forward. I mean, are there any early comments you can make about the confidence Pfizer has about moving this into Phase 3 trials early next year?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now I think the -- it's a funny saying that we hear is Albert's e-mail signature is under-promise, over-deliver, which I think is generally a great thing in pharma. In -- for 2023 guidance, though, I think there was a pretty wide delta between what the Street was expecting, what Pfizer guided and then, to your credit, probably where you're actually tracking to this year. I know you're -- obviously, we're not going to make guidance on today's call. But when you think about how we should think about guidance next year, A. should investors expect directional growth given that there are those $0.30 of onetime effects? And then number two, would you -- for us, warn us because it will probably come out at the end of the year, we're going to be in our updates. Do you think there is going to be that wide delta between what the Street expected and then what Pfizer ultimately guides to?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now as we think about -- your team has announced $5.5 billion of cost cuts. On Wall Street, the question is always, can there be more? Your team has actually not talked away from that. It does seem like there could be potential upside, specifically on COGS. But as you think about rightsizing the business going forward and you think about SG&A, R&D and then your COGS line, where do you feel like there might be still room for further optimization at Pfizer?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now Andrew, you've obviously been on this side of the podium for your career. And you've been critical sometimes of Pfizer and, you know what, that's fair. What do you feel like since you've entered the organization has been the biggest surprise to the upside about Pfizer, whether it's the science, the way that the business has been rerun? But then number two, where do you feel like you really could add value in terms of helping the business operate in a manner that leads to actual shareholder value?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Maybe to follow up to that, and this is something that I think we hear from investors, I'm sure you did as well was, where are the areas where Pfizer has a right to win? And for me, personally, when we look at our research, I look at the CDK4, I mean, CDK4/6s are a $25 billion class. The data that, that molecule has shown, I think, is remarkable. I mean you have 15% Grade 3-4 neutropenia when KISQALI and IBRANCE at 45%, 60%, you have a higher response rate. And you've really built a moat in terms of several Phase 3 studies there where if those start to hit, I think you're really going to change standard of care in HR-positive breast cancer. Can you talk a bit about your strategy there? Why do you feel like investors are maybe not paying enough attention to that molecule?

Question: Akash Tewari - Jefferies LLC - Analyst : Interesting. Okay. A couple of follow-ups there. One, when I look at the, I guess, not SERD or ER degrader, as we would like to call it, but when I look at that molecule, I know you guys are going to make an efficacy-based decision on moving that forward middle of next year. And I find that comment quite interesting. I wouldn't be surprised if that actually ends up showing a 50% response rate. But why not take that compound -- like the way I think about it, I would want that compound run, not just first with the CDK4, not only in first line, but also in second line. I don't really see the point of running it with IBRANCE given that compound is going generic. And really, the CDK4 is going to be the Pfizer bet over the next decade. Is that the right way to think about it is even though right now, there's an announcement about taking that to first line, that combination where you're replacing the two standards of care and HR positive is probably where this is going to play out?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now it's interesting, Chris has made comments and even today, you're talking about the EZH2. And it's funny because your team talked about it on the Oncology Day. And I got 30 e-mails from SMID-cap investors who had an early-stage company that wanted to understand it. No one seemed to have focused on it for the Pfizer side. But look, I think EZH2 has also had a mixed track record. You've seen data from Ipsen recently, which didn't work in combination with ZYTIGA. Why does Pfizer have confidence that, that molecule can actually show a meaningful benefit in prostate cancer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 9:00AM, PFE.N - Pfizer Inc at Jefferies London Healthcare Conference

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now Dave, one of the questions we get into next year is, obviously, the Inflation Reduction Act. I think Bristol did a great job with Eliquis laying out, hey, here's the impact. And for some of these highly discounted products, what people don't seem to understand is actually there's not that much of a net price reduction. Is there an appetite when you give '25 guidance to explicitly call out the impact of Medicare Part D reform? And then number two, can you -- just like Bristol said, okay, REVLIMID, POMALYST will hurt us, Eliquis will help us. Can you talk about the products that will benefit and then the ones that will maybe have an incremental negative impact from Medicare Part D reform?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. Now, I think one of the comments Starboard had made was talking about Hospira and like ways that you can right size the business, pay down debt, and then also return Pfizer to a growth story. And I think people talk about the Hospira business. I think there was press announcements. Obviously, nothing has been confirmed by Pfizer. A couple of things on that. A. I was a bit surprised in that article, there was a $500 million EBITDA. But number two, what is the appetite for Pfizer to think about divestments of the Hospira business? And what would have to be the financial return for that to actually make sense from you from a capital allocation perspective?

Question: Akash Tewari - Jefferies LLC - Analyst : Got it. And maybe lastly for you, Andrew, and you mentioned it's not just the CDK4, it's not HR positive, it's also just oncology in general and the Seagen franchise. I think our team internally has a view, the MMAE toxins might have a return to prominence going into next year and beyond. I think part of that is also the synergy that seems to be shown with PD-1. So like when I look at your HER2 ADC, it's not a particularly impressive monotherapy response rate. But when it was combined with pembro, suddenly, the response rate jumps to 50%, 60%. Your B6A obviously, Trop-2s and all the ADCs and NSCLC, it's an incredibly competitive space. But talk to me about what synergy you might be seeing in combination with pembro with that asset and why your team is so excited about that, not only in second-line NSCLC, but your team is also making a bet in first line with that drug?

Question: Akash Tewari - Jefferies LLC - Analyst : Understood. We are out of time, but thank you so much. I really do appreciate it.