Great. Well, thanks everyone for joining us today. I am Chris Schott, and Alexandre, thanks for joining us for a lot of different topics we can dig into here. I thought I might just start the conversation bigger picture on Pfizer, and then we will dig into the international business. The company obviously has gone through a period of significant change the past few years. Portfolio has evolved beyond the COVID assets, the pipeline is maturing, you have got new commercial structure. Can you just talk a little bit about your confidence in the overall Pfizer portfolio and pipeline today, and its ability to address some of the patent expirations and grow over time?
Sure. Yes. Thank you for having me. It is a great pleasure to be here. Yes, I mean, the past three years, we have been through major changes at Pfizer. It is probably just interesting to step back and remember. We went out of our saving the world moments with COVID and the incredible job that the team has done. After that very transformative moment, we needed to actually refocus on our portfolio, pipeline, and understand where we can win and redeploy the resources behind those territories and behind those products.
That is when we started to refocus on new product. If you remember, back in 2024, we already had a vast majority of the new product. We just have finalized the acquisition of Seagen, so we had the Seagen product. We had launched a bunch of new product and vaccines into the market. But we were fragmenting our resources and inability to actually deploy those product and vaccines appropriately to the market. What we did is we cut some of our investments that were unproductive because we were spending too much in some area.
They were in point of diminishing return. We reallocated those resources in our key country. In my world, the top four country make 40% of my business, and spreading the resources everywhere makes no sense. We have stopped launches, we stopped organization commercial structure so that we can reallocate those things into the right spot. Aamir did the same thing in this portfolio in the U.S., reallocating the product, the efforts behind the future growth. The outcome is actually quite remarkable.
If you think about, in my world, the new product and new reacquired product were making $0.5 billion in 2023. Now they do $4 billion. At the same time, we cut OpEx quite significantly because we were spending inappropriately. We had a real problem of efficiency in commercial execution. We were able to really look at every $1 we spend, where is it returning returns, where is it not, and reallocate. We stop, as I said, some clinical study in some small product, in some small countries, reallocated those resources in key markets and where we could grow. You see that those new launches product is now the platforms, the base for future growth.
The reason why I am confident is because once you establish a commercial model that works, you build muscles in commercial effectiveness. We will use those muscles for the pipeline, because at the same time, of course, we reduce our COVID franchise quite significantly during those periods. Just remember, 2024, we are making $11 billion on COVID between the vaccines and the antivirals. 2025, we made about $6.7 billion. 2026, we guide for $4 billion.
So at the same time where we were extracting the most potential out of a new product, we also reallocated out of our COVID franchise so that we could double down on our new product. So I feel like we have less exposure on COVID. We have platforms on new product and acquired product that is growing extremely well, and there is room there. It is not like we all depend on the pipeline. We know we are going into a phase of LOE product, but at the same time, we have built this platform.
Of course, at the same time, the pipeline is maturing. I mean, if you think about we have 31 phase III clinical study happening right now. I often get the questions of are you drying your business by actually making all those efficiency? We are not, because we were inefficient in the way we were deploying our capital. By having more rigorous and more focused approach, you have much better impact. If I just look at what we did in internationals, the productivity of our sales organization triples in three years, just by having this very focused deployment of resources in key market on key product.
Those key products are very different. When you are in Brazil, we had almost no vaccine business, which makes zero sense. Brazil is one of the most efficient in deploying vaccine and protecting their population. It is extremely impressive. We had almost no business, no PREVNAR, no ABRYSVO. Now PREVNAR 20 is in, and we have vaccination rate of 80% of those 2.5 million babies in Brazil. But of course, it is different when you are in China.
I do not have the new generation of pneumococcal vaccine yet, but I have 1 million case of non-small cell lung cancer in China. So guess what? I mean, the LORBRENA has huge potential because there is unfortunately a high prevalence. So picking the winner, deploying capitals behind those winners solidify our base, and we have significantly improved our commercial model. Aamir in the U.S. does the same thing with his DTC and also with sales force deployment. So I am very confident we have rebuilt our excellence in commercial deployment, and now we are maturing our pipeline. The pipeline is coming where we have the strengths.
Yeah.
In oncology, we are very strong in oncology. It is coming in vaccine, it is coming in primary care with our internal medicine. So we have the skills and the capabilities to actually optimize this portfolio. So I feel good.
Great. When I think about the company returning to growth as we look out to 2029 plus, I guess how much of that is going to be driven by the pipeline, as you mentioned, versus commercial execution against products we are already seeing today? And maybe as part of that, when you look at how we are all sell-sides modeling the business, are there any particularly large disconnects that you see versus how-
Yeah.
...we are all thinking about the company?
Yeah, there is quite a bit.
Dig into all those separate pieces.
Exactly.
Yeah.
The first one is where the growth is coming. The growth is coming on the new baseline that we've discussed, right? If you look at the Q2 earnings release, we show that we were producing $3.2 billion on the new acquire at the global level, $3.2 billion on the quarter, growing 18% after a 22% growth in the first quarter. If you just take that as the totality of new acquire and new launch product, that's about $13 billion right there, right? That's a very strong foundation. It's not like we are done with this portfolio. I'm going to give you a couple of examples.
In vaccination, so we go back to vaccine, for instance, in older adults, both on PREVNAR and ABRYSVO, it was very striking. I was looking at the numbers before coming to London. The vaccination rate in France is 25% of the targeted population. 25%. That means that you have significant room to increase, and that is 65% and above. It's not like it's a very big range of population, 65% and above. Clearly at-risk population, we only vaccinate 25% of that population, 28% in Germany, 3% in Japan.
Imagine the growth that you have there, right there. Same thing in pediatric, same thing in ABRYSVO, older adult against RSV. A vaccine has huge potential to grow. If you look at LORBRENA in thoracic cancer. In two years, we went from nowhere in first-line new patient start to 60%, 70%. In France, we are 77% market share in new patient start. There is still. Remember, in the CROWN-7, we keep people alive, thank God, to the great quality of this molecule, seven years, and we've lost only two patients between CROWN-5 and CROWN-7.
The duration of therapy could be significantly longer, and you add all those new patients every year. It just gives you the sense. LORBRENA this quarter, international, we did $250 million . That means that this product is already $1 billion and can continue to grow significantly. My point is, this block of product is underestimated in the ability to actually continue to deliver growth. That has nothing to do with that read, because those products just got introduced very recently. Two is on our pipeline. As I was just closing in the previous question, the fact that we are entering.
The pipeline is structured around the place where we can win, and I think that's a big shift that Chris Boshoff has done with his team the last three years. The last few years is, if you look at, yes, okay, we have our four disease area, category area, but more than that, now after that, in oncology, we pick the zone, the tumor type that has big impact, and where we have the capability to win. So thoracic cancer, $70 billion market.
This is the most lethal cancer, first cause of death in cancer. Prognostic is still very low. The huge unmet medical needs is projected to be $70 billion by 2030. We go with three candidate in phase III with the most promising platforms. We have two ADCs, and with well-defined payloads effectiveness with vedotin, and with two markers that are well-documented. Those are the two ADCs. We have our bispecific, which is a combination of VEGF and PD-L1. It's well established. We have proof pointing to the phase II, and we have the commercial and the medical capabilities in place.
We have been discussing that, Chris, together. You don't enter into oncology tumor like this. It takes decades, both internally to build the scientific knowledge, to actually have the capability to pick the winner, and then in the connection with medical society, in connection with hospital, university, and treating physicians to actually pull through the medicines. We have that. I was discussing the LORBRENA case. We have that in thoracic. We have that in breast cancer.
We created the CDK4/6 class, remember, with IBRANCE, and now we have two assets in development in phase III, CDK4 and KAT6, that are coming also there, and we have the infrastructure to host that. Same thing in prostate cancer. Why I'm excited is that there is a complete coherence, and I'm not sure the financial community is completely seeing this, is there is coherence between where we play and where we are currently winning, and how our pipeline is actually being structured to leverage our knowledge inside R&D and in commercials, and make a success out of those products.
The second one is, of course, categories is of high potential is, of course, chronic weight management and berobenatide in our GLP-1 and the following assets. As you know, Chris, we commercialized recently our first GLP-1 at Pfizer in China, ecnoglutide. It gives us, actually, we learn tons out of those introductions because it gives us a very good understanding of how the market is operating and how we see this evolving. The clear learnings is, it's not one market. It's like tens of segments.
We know it's going to be between $120 billion-$150 billion by 2030. There's a very different profile between a patient that has a high body mass with concomitant disease, diabetes, versus somebody that qualifies for chronic weight management, but is more aesthetic driven or more self-confidence driven. Because that person will need a very different type of product. The access to the product will be very different than that person's, where it's more medically driven, more hospital management and so forth, versus this one, which is more e-digital hospital, e-prescription, e-commerce.
The follow-up and supporting elements that will surround utilization of GLP-1 for that person is going to be very different to this one. That's why I feel Pfizer has a great opportunity here, is because this is going to be an expensive category. You need to build trade. You need to be good at physician management. You need to be good at the direct-to-consumer online platforms. You need to master all those different platforms that we have. With vaccines, we are very big in trades. In vaccine, we are very big in direct- to- consumer, not just in the U.S., but outside of the U.S. We have built up a digital companion to make sure that we provide the right supports for that longitudinal utilizations of those treatments.
Of course, it's a question of product profile, and of course, the product profile for this person here is going to be very different for the product profile of that person. That's why it's a portfolio play. Because this person may be fine with average efficiency, so long as the tolerability is very good, versus that person is willing to actually go for more side effects because the effectiveness of the medicines is really cool things.
Maybe this one is more looking for long-term therapy, so monthly is going to be more appropriate than this one, where maybe oral or weekly is going to be. That's why you will need to have monthly, very effective monthly, weekly, well-tolerated weekly with good efficacy, orals, and a combination of all those things, and a combination of all those commercial levers to actually optimize. Otherwise, it's going to be too expensive to have one asset. That's why I'm excited. Those two example of these portfolios maturing, we have the play to win, we have the commercial elements in place, and we have the expertise in-house to pick the winner. I feel quite good.
Excellent. Can I talk a little bit about most favored nation and drug pricing? Obviously, Pfizer kind of led the charge here last year. Can you talk a little bit about how you're thinking about your business, what you've seen from some of the other developed markets in response to MFN and-
Sure.
...generally how far I was just thinking about this?
Yeah. No, I think it's an important point. I think we had a breakthrough because one year ago we were stuck with the tariff risk that could actually have exposed the whole industry. In a way, we took the lead. Albert did a kind of a leader's behavior, and he went and actually framed the MFN agreement that everybody followed through, which allowed us to remove the whole question of tariff threats. Now, on the international side, what is the effect of that is, of course, the willingness to align the parity of purchasing power, the price of the U.S. with international.
Frankly, this is long-term due in a way, because if you look at the real willingness of government to pay for the fair price of innovation, this has been undermined the past decade. There are many ways by which governments were attacking this real fair market value of this innovation through clawback or annual price cuts and so forth. I think what we're trying to say is, there is an opportunity for us to actually go back and have those discussions with the governments to align those prices.
Some governments have already made moves, right? In this country, in particular. Remember, the government had an agreement between U.K. and the U.S. in terms of the quality of the NICE that had never taken into consideration. Inflation has been embedded immediately, reflecting 10 years of inflation. Two, the clawback mechanism that exists in the U.K., which was brutal and very high, has been reduced, and there is a commitment to go to 0.6% of GDP for allocated innovative medicine. So there is clearly already movement from some of those countries.
I was in Japan two weeks ago and had discussion with Ministry of Finance and different leaders of the governing party. Same kind of willingness. It's not the MFN that is triggering this. I believe what is triggering the change of behavior with innovative pricing is the fact that if you look, if you step back in 2000, 30% of innovation were coming from Europe, 10% were coming from Japan. You move forward 2022, and this year, 30% of innovation come from China. China kind of overpowered Europe and Japan like this.
Now we all recognize that it's not a question of brain power in Europe or in Japan, because discovery is extremely good here. The problem is those researchers are creating those biotech in the U.S. because they know they have access to fair pricing and recognizing innovation. If governments want to kind of reignite the contribution of innovation from Europe and Japan, they need to do something on pricing, because otherwise there is no path forward for that innovation. That's what I see is coming.
The threat of China has woke up those organizations, those countries, to actually build up an environment that helps. There are some good signs also above market, right? The European Package, the pharma package that passed one year ago. Yes. But eight months ago, was actually quite good in terms of patent protections and orphan drug status. The Biotech Act that is in development is also very good. The first draft is actually also very positive, with speed to approvals, a willingness to open the centralized reviews, and so forth. It's going in the right direction. It's going to take time, but I'm confident we're going in the right direction.
Do you think about portfolio development any differently in light of maybe some of these global markets supporting a bit higher price than we've seen historically?
For the time being, we are not thinking portfolio development in a very different way because, as I said, we hope that these notions of paying for innovation at the appropriate price is going to win, and so we play for that. Let's see.
Okay. You mentioned China and the rise of the biotech industry there. Can you just talk a little bit about what you see that meaning for the broader biopharma landscape and the type of opportunities as well as risks that this maybe entails for Pfizer?
Sure. What is remarkable, if you step back, is the scientific power that is emerging from China. Just to give a sense, China produce about 300,000 PhD in science and technology every year that are working in our industry. So of course, with this incredible power of young talents and university centers that have built the level of capabilities that were equivalent to what we had in Europe and the U.S., we will see emerging science, and we start to see massive science. Just to give you a sense, the two big platforms, in oncology that I was describing, ADC and bispecific, I was looking at phase I, phase II, phase III combined.
50% of every clinical study on the planet is run in China. 50%, five zero , on those two platforms, ADCs and bispecific. That's massive. Of course we will produce more science. What it comes from China is the fact that the infrastructure allow the ability to run fast clinical study, pre-poc study, and fail fast because hospitals are very large hospital. You have neuroscience hospital for 3,000 beds. A couple of months ago, I was in Shanghai, and I was visiting a hospital, had 3,000 bed in pulmonology. So you can run clinical study very fast and turn the assets very fast to fail.
That's one of the scales of China, is the ability to screen and test and fail. Because they have so many of those PhD, the combination of those two things in biology, in chemistry, to design those new molecules and test them very quickly, that combination is magic. It doesn't mean that we can't do that outside, but we need to unlock a lot of red tape that exists between those different institutions and continue to unlock science. For us, as we did, we did deals. We did the Innovent deals recently.
We did 3SBio with PF'4404 and other deals, because we see an opportunity to actually untap these innovations that come from China, because it's fast. At the same time, we also are preparing ourself because guess what? The Chinese company, at some point, will come to our markets, and we need to be prepared for that. That's why we also are building our commercial and our R&D organization to compete. One of the drivers of that, for instance, is by embedding AI capabilities into a division.
For instance, in the international division, I have the ability to build strategically, what are my top priority for AI? Is that in improving segmentations, improving district manager analytics of the most performing brick into his territory, or is it in medical to accelerate study reports or whatever? We have in our division the ability to prioritize our resources on AI, test those tools, and then roll and pull them through into our commercial. That has a big move that allow us to increase productivity of our organization.
Chris does the same thing, and so forth. We are essentially preparing, and remember, my biggest country outside of the U.S. is China, and I am competing against the Chinese organization. Innovent is one of my top competitors in many categories. It does not mean that I am losing against them. LORBRENA has five TKIs of the next generation today in the market, where I have two in most countries in the world. I still have 50% first-line new patients start in China. It is not like we will give up. Absolutely not. We have the ability to win, but we just need to be better.
You mentioned AI. How, I guess, broadly is Pfizer kind of embracing AI right now? Because how much is that affecting your business in terms of efficiencies, et c? I guess the question is like are we at the early stages of this or is on your part of the business?
Yeah.
On the R&D side, it might be a bit different.
Yeah. We are not in the early phase of that. We are already full in the sense that if you look at, I was telling you, the productivity of commercial organization tripled. How the sales force in the past three years. A lot of that is driven by advanced analytic and AI. What I used to have is when I came back three years ago, we had almost no data on impactable sales and the qualities of the connection with healthcare professional. Now I have that at the brick level, at the district level, and it's all in the same platforms.
AI can actually inform a district manager, "You didn't go to the right doctors with the right frequency. The impact is not good. Your selling skills are suboptimal," because we do selling skills training online with AI capability. You can start seeing the effect of that. Improving the current business model is already happening, and it's increasing the productivity and the impact of what we are so that physician have the right informations for their patients.
I think that is really good, and I'm very happy with that. Look, in medical and in regulatory, we are also deploying those type of tools. Study report can be produced few days after the last patient last visit now, thanks to AI. It used to take three months to have the study report, right? We can do regulatory. This industry is a very regulated industry.
Every time you move one product from one line to the other, it's a Type II variation, what we call it, and you need to file that variations into every regulators across every country in the world. We are in 120 country. Every day we do a lot of paperwork, huge bureaucratic work. You can do those things automatically now. You don't need to have those. That has huge potential to increase the effectiveness of organization. That is today.
Yeah.
Now, what the future is, and that is where it is more exciting, is countries have building electronic health records. This country, for instance, in the U.K., is one of the most advanced electronic health records country in the world. We have all the data per patients. Of course, it is atomized, but you have the data. Down the road, you can see the evolution of those disease, you can predict, you can see where the patients are. When you can run clinical study, you do not need to open 25 centers. You can run a few centers because you have identified the patients already into this hospital. You can completely transform the way we operate from development to commercialization.
Yeah.
That is not here yet.
Yeah
That is where we are going.
Excellent. I know you have recently taken over some additional responsibility within Pfizer, chairing the portfolio management team. I guess you can talk a little bit about what that new role entails and how maybe you are approaching that role differently than it has been-
Yes.
...handled in the past.
That's right. The PMT is the portfolio management team, is the team that takes all the decisions when you move into a phase III. Every major capital allocations, either being BD or phase III start, goes into the committees and get the approval for, to access the cash. Around the table, of course, we have our scientists, we have our finance, we have our manufacturing, commercial folks. Albert, as our CEO, is there. And we review all those opportunity. The way, of course, we had always, and we continue to do that, look at every opportunity in its entity.
Of course, we look at IRR, we look at peak sales, we look at probability of technical success, probability of regulatory success, and then we take our decisions. But in the past, we used to take those decisions as one, as an isolated case. As they were coming through those committees, we were looking at those entities for the merit of their entity. We continue to do that, but what we do now on top of that is we always look at portfolio maximization, what it is that exactly we want to achieve. Is the start of a new early phase is the right things to do at this particular time?
Or is that de-risking this program that is advancing fast is where we should spend our next dollar? Is the ability to do another phase III study the way we should play now, or should we de-risk this asset with that ongoing phase III and then start the next one? Because if we pull the trigger from the phase, phase III, and the PTRS, the probability of technical success goes from 61%- 75%, that's a game changer, of course, in terms of capital allocation and return to shareholder.
And that's always how we do it. The second thing that we do is we have, like I run my business, we have to have early signals on the key swing factors. Because if you wait for the clinical study to run out, and then you see the results, then you may not have done what you should have done to maximize these assets.
What we do, we have swing factors from an access, from a competitive standpoint, from regulatory environment, and we see those swing factors for each of those indications, and we say, "Okay, this is interesting because if we were to do this now that this competitor's read out, actually, the profile of our asset is better, we should accelerate this asset." As we see those evolutions, we take different type of decisions in the committee. That is how we try to activate our resource, so that we can deploy our capital the most wisely and return to our shareholder better.
The outcome of that, do you see this being Pfizer's going to have maybe a more targeted portfolio with bigger drugs? Is it you are going to have just more drugs get through the pipeline because you have a better probability of success? I mean, how do you think of that?
Yeah. No, I think, as I was saying, Chris, earlier, I think what is shaping is that a fully integrated, I don't think we had that in the past, is fully coherent strategy from discovery to development to commercial. You can see that. As I was saying, thoracic cancer is a place where there is a medical need. We are deploying our discovery, our medical. We have incredible capability. Jeff Legos that came was a key driver of Novartis Oncology in the past. He is in the company, and Chris Boshoff is also a historical leaders in oncology.
In oncology, I really feel like we have an amazing team, and it is consistent, and we are aligning on which therapeutic area, which tumor type we want to focus, and it is very consistent. I think how we are shaping this company is really to align end to end, and not having independent house or fighting for different things in different places. I feel like we have made a huge progress in the last three years in a very coherent and aligned strategy across all the different component of that continuum. Now, what I see is doubling down in the places where we know how to operate.
That is really what I see. It is like, as I said, thoracic cancer, all those assets, let us say out of the three, let us say maybe the three of them come in, we have the backs to actually host them. In breast cancer, same thing. We have the plate to host them. Vaccines, we have already organization deployed. By having this coherence, you increase the impact. I mean, immediately the impact of your commercial dollars are exponential because it's the same cost, it's the same rep, it's the same investment. But this time you have three, four assets. It's very different.
Yeah, absolutely. Maybe it's time to jump in a couple specific product ones.
Sure.
I know you mentioned obesity earlier. The international piece of the obesity market, I think for all of us, it's been kind of surprising how quick it's built out. Within Pfizer, how are you thinking about how that international market evolves? Does it stay very cash pay centric?
Yeah.
Is it fragmented? Does it kind of coalesce around a couple products? How are you seeing that evolving, and then specifically, how does Pfizer navigate that?
Yeah. No, Chris, I think first we all recognize it's underdeveloped. I mean, we were all surprised by the cash market, how fast it moved.
Yeah.
And remember, in my world, after approval in Europe or approval in some of our big market, like in the U.K., Europe, Japan, it takes me a year and a half to actually get access. When you are out-of-pocket, I mean, the day we got European approval, we will be launching those products immediately. That's a big difference. That has a huge opportunity for us. Now, is it going to be 100% out-of-pocket as it is today? Probably not.
I think as I was saying, this market is shaping to be 10, 15, 20 markets, 20 different markets, and of course, you will have probably more reimbursements in the heavy population with concomitant disease and having a product that have demonstrated strong efficacy, very strong efficacy, and acceptable tolerability profile, we probably will go in those things. But of course, if you have a product that is there in the reimbursement, you need to have a different product in the out-of-pocket because you can't be in both places with the same product as different price point.
That doesn't work. That's why also a portfolio will allow you to actually untap and address the needs of those different populations. I think today, the average out-of-pocket price on the monthly treatment is around EUR 300, EUR 350 per month. That's what we see in most market. It's been stable so far. Let's see when sema goes generic, but the profiles are very important. I mean, fat populations is not just a We've seen that in many other categories, where it's not because you have one of the early entrants that actually goes generic, that the whole market disappear.
Absolutely not. I mean, if I'm going to use some medicines and I want to have a monthly treatment, so 13 injection versus once every week, I mean, it's a very different profile in terms of tolerability and utilization. So there will be opportunity. We will have to have the portfolio, and Europe will have some in reimbursed, some in non-reimbursed, and as I said, the ability to play all those different levers will be what will make the difference between the players.
Right. And maybe just one follow-up. You mentioned portfolio. Pfizer's portfolio today, do you feel like you've got the breadth you need in obesity, or is this an area that you need to-
I mean, you remember we have berobenatide phase III, and that we'll know, and we have, as we said, several ongoing clinical study. As you know, the weekly are already fully recruited. We started the monthly, and we started the switch study, and then we're going to do some concomitant disease associated with that. So that's kind of berobenatide . But we have our combo with amylin.
That is going to be reading out at the end of this year. So the amylin GLP-1 will potentially be more kind of on the more severe population, higher impact, and it could be a monthly treatment for that population with very high impact. Could be really a very highly differentiated profile. As I said, when we acquired Metsera, we acquired a team, actually here based in London, of researchers that were focusing on chronic weight management, and they have several product in different phase.
In orals and ultra-long and all those different peptides, and they were specialized in peptide research, and those guys are developing our pipeline. And of course, we continue to look outside to see if there are something in China that is being in development that will complement our portfolio. So we know we will need to kind of continue to develop this portfolio.
Excellent. I think we're just about out of time. Alexandre, thanks for joining us today and appreciate your comments.
Thank you very much. It was a great pleasure. Thank you.