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Pfizer Inc
Earnings Call Analysis
Q3-2023 Analysis
Pfizer Inc
Pfizer is set for substantial revenue recognition starting in 2024 from a deal to provide 8.9 million treatment courses to the US stockpile, estimated to be worth $4.2 billion. Despite there being no cash compensation from this, the potential future earnings reflect Pfizer’s strategic placement in public health initiatives. Concurrently, the company is undertaking a cost realignment program, projecting a minimum of $3.5 billion in net cost savings by the end of 2024, with $1 billion expected in 2023 and an additional $2.5 billion in 2024.
Pfizer's quarterly revenues saw a 41% operational decrease, largely due to reduced sales of COVID-19 treatments Paxlovid and Comirnaty. However, the silver lining is found in the robust 10% operational growth in its non-COVID product lineup, anchored by its newly approved RSV vaccine and other acquired products like Nurtec and Oxbryta. This mixed result is offset by significant non-cash inventory write-downs for COVID-related products, amounting to $5.6 billion, which heavily impacted adjusted earnings per share.
Reflecting the impact of the operational headwinds, Pfizer has adjusted its full-year 2023 revenue outlook to a range of $58 billion to $61 billion, down from a prior estimate of $67 billion to $70 billion. Despite the downward adjustment, the company maintains a positive outlook on its revenue growth for non-COVID products, expecting a 6% to 8% increase. This growth is anticipated to be more pronounced in the latter half of the year due to new product launches. Adjusted cost of sales will hover between 41% to 43%, elevated mainly due to the aforementioned inventory write-offs. The knock-on effect is that the adjusted diluted earnings per share forecast is also reduced to $1.45 to $1.65, compared to the initial range of $3.25 to $3.45.
Amidst these adjustments, Pfizer continues to invest in its core, with $7.9 billion directed towards internal R&D and $6.9 billion in dividends paid to shareholders. Notably, approximately $43 billion is allocated for the proposed acquisition of Seagen, a move indicating strategic expansion. Following a significant $31 billion unsecured debt offering in Q2, the company is poised to execute the remaining short-term financing for Seagen's acquisition, aiming to adjust its capital structure afterward to balance share repurchases with other financial strategies.
Further pressing on the innovation front, Pfizer has achieved success with its respiratory vaccines developed on three advanced platforms. This includes an mRNA technology, a subunit platform, and a conjugate vaccine platform. A notable milestone is the achievement of primary endpoints in a Phase 3 flu trial for its first-gen mRNA flu vaccine candidate. Demonstrating non-inferiority and even superiority to a licensed flu vaccine, Pfizer continues to leverage its partnerships and technology to potentially dominate vaccine markets with its pioneering portfolio.
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Good day, everyone, and welcome to Pfizer's Third Quarter 2023 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DeMartino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.
Good morning, and welcome to Pfizer's earnings call. I'm Francesco DeMartino, 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 third quarter of 2023.
Our earnings materials can be accessed on the IR website at investors.pfizer.com. I'm joined today by Dr. Albert Bourla, our Chairman and CEO; Dave Denton, our CFO; and Dr. Mikael Dolsten, President, Pfizer Research and Development. Joining for the Q&A session, we will also have Angela Hwang, Chief Commercial Officer and President, Global Pharmaceuticals business; Aamir Malik, our Chief Business Innovation Officer; Dr. Chris Boshoff, our Chief Oncology Research and Development Officer; and Doug Lankler, our General Counsel.
Before we get started, I want to remind you that we will be making forward-looking statements. I encourage you to read the disclaimer on Slide 3. Additional information regarding these statements and our non-GAAP financial measures is available in our earnings release and in our SEC Forms 10-K and 10-Q under Risk Factors and forward-looking Information and factors that may affect future results. 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 these statements. With that, I will turn the call over to Albert.
Thank you, Francesca. Hello, everyone, and thank you for joining us today. Pfizer continues to have a fare and positive impact on human health. Through the first 9 months of the year, more than 457 million patients around the world were treated with our medicines and vaccines. Patients will always be an staff, and these figures start a testament to our leadership in innovation and our commitment to understanding and serving patients teams. During the third quarter, we were encouraged by the continued strong performance of Pfizer's non-cold products with revenue from these products growing 10% operationally compared with the year ago quarter. We saw significant contribution from. -- million adults over 6 reiterated 1.5 million from maternal immunization with raxibetween September 23 January 24. Nurtec Vidur and Brita, which fourth quarter 2020 contributed $233 million, $85 million in global revenues, respectively. -- not in the U.S. or our business represented 71% of the migraine
[Audio Gap]
for as much as 42% of the older product Mike. Here is a clear source of potential growth in the migraine marketplace. Year-to-date, primarily by the road more proven in prescriptions of rates compared with approximately $1 million for all our CGRPs, which highlights a significant potential opportunity for growth. Regarding [indiscernible], there is a significant burden of illness and unmet need for patients suffering from sickle cell disease. An estimated 12 million people around the world have sickle cell disease with the highest prevalence in countries with the lowest resources.
While in the U.S., 95% of children survive, 99% of children in other regions will die before they reach the [indiscernible] mainly without even being ever diagnostics. Our Vintage products, including Betamax, Winmar recorded 47% operational growth globally compared to the third quarter of 2022.
This growth was driven largely by continued strong uptake of transferring amyloid cardiomyopathy in the case, primarily in the U.S. and developed Europe. We estimate that are between 120,000 and 150,000 people suffering from for ADR cardiomyopathy with the majority still not yet diagnosed. The largest of [indiscernible] continues to build the lack of general understanding and ability to diagnose this deadly disease, which is why we are focused on educational activities to expand the diagnosis and get appropriate patients on the treatment with the programs as the proven standard of care.
Such efforts significantly contributed to this quarter's revenue increase in the U.S. And our Prevnar family of products, Prevnar 13 and Prevnar 20. So local revenue rise 15% operationally compared with the year ago quarter. This increase was driven primarily by strong patient demand for Prevnar 20 adult in the U.S. Peers approval of prenatal and associated stocking and growth of Prevnar 15 pediatric in certain end margin markets.
These were partially offset by anticipated lower market share in the U.S. for Prevnar Pediatric due to competitive entry. Of note, Prevnar 20 adult remains the category leading new motor vaccine for adults in the U.S. with a 95% market share in the third quarter. Year-to-date, revenues for our non-COVID products grow 7% per [indiscernible]. And we remain on track to deliver 6 to 8 operational revenue growth for these products for the full year.
We continue to progress towards our goal of executing an unprecedented number of launches of new products or indications. Milestones include U.S. and EU approvals and the launch of Apriso in pregnant. U.S. approval and launch of [indiscernible] in relapsed refractory multiple Milan, U.S. approval of our Braxtobi and Metodi combination in BRAF mutated metastatic non-small cell lung cancer. This approval of vercipity for moderate to severe ulcerative colitis.
We see approval of [indiscernible] for severe alopecia reaction. And US approval of embryo, the first and only pentavalent that provides coverage against the 5 most common groups causing meningococcal disease in adolescents and young adults 10 through 25 years a day. Today, we have now executed 13 of the 19 originally identified potential launches with 4 other products approved and preparations being made for their loans.
In fact, 5 of the 6 remaining potential launches have been largely derisked from a technical perspective. The only one remaining would be our mRNA flu candidate. Given our recent positive results from our next-generation mRNA glucan combination candidate and pending results for our 65 and older first generation -- first 3 stand-alone mRNA started. Timing of our stand-alone mRNA flu is now expected after 2024.
If successful, our next-generation mRNA flue COVID combination candidate is expected to market in 2025. Michael will share more about these programs shortly. We remain excited about our proposed acquisition of SIP and the dramatic impact within this combination can have on human hub. One [indiscernible] will be diagnosed with cancer in their lifetime. So conquering cancer would have an almost unimaginable impact of Sumare.
We recently gained unconditional antitrust clearance from the EC and we continue to expect the transaction to close in late 2023 or early 2024, subject to customary closing conditions, including clearance by the U.S. FTC. We have raised $7 billion in acquisition financing so far and continue to expect incremental 2030 risk-adjusted revenues in excess of $10 billion and expected cost efficiencies of EUR 1 billion to be realized by the end of year 3 post close without impacting any R&D problems. With that, I'll turn it over to Dave. And after Dave, Mikael will provide an update on our R&D pipeline. So Dave?
Thank you, Albert, and good morning. Before I review this quarter's results, I'll address a couple of topics that have been top of mind with investors since our announcement on October 13. These topics relate to our future U.S. government tax loved revenue forecast as well as our multiyear cost realignment program.
With respect to revenue recognition associated with the amended agreement, the U.S. government is expected to return an estimated 7.9 million EUA labeled treatment courses and in return, we'll receive a volume-based credit at an approximate value of $4.2 billion at the end of 2022 for future treatment courses. Pfizer will also provide an additional 1 million treatment courses into the U.S. strategic stockpile.
As a result of all of that, Pfizer has an obligation to deliver an estimated 8.9 million trickle courses, for which we will record an approximately $4.2 billion of revenue beginning in 2024 as we deliver these treatment courses. It is important to note that there is no cash compensation for the estimated 8.9 million treatment courses delivered.
Regarding our cost realignment program, I want to reiterate that we expect to achieve at least $3.5 billion in net cost savings by the end of 2024 versus the midpoint of our August 1, 2023 [indiscernible] and R&D guidance. We expect $1 billion of targeted savings in 2023 and expect an additional savings of at least $2.5 billion in 2024.
In a moment, when I review the components of our full year 2023 guidance, you will see that we have lowered the midpoints of both our SI&A and R&D guide changes by $500 million, respectively.
Now turning to the quarter. Our Q3 results, both top and bottom line were significantly and negatively impacted by our COVID products. Revenues declined 41% operationally and the result of the decrease in both pack loaded and community sales, while adjusted diluted loss per share was also significantly impacted by $5.6 billion of noncash inventory write-offs of COVID-related inventories.
I want to emphasize as Albert stated previously that the operational revenue growth of our products in Q3, excluding both tax loaded and commodity, were strong at 10%. Contributing to the strong performance was our newly approved RSV vaccine and the families of products associated with both Prevnar and [indiscernible].
Additionally, our recently acquired products, NURTEC and OXBRYTA also contributed to this strong performance. Our reported diluted loss per share of $0.42 and and adjusted diluted loss per share of $0.17 in the quarter are primarily the result of the decline in tax flowing and commodity sales and the noncash charge related to write-offs of COVID-related inventories.
The inventory write-off of $4.7 billion for tax loaded and $900 million for commodity negatively affected adjusted loss per share by $0.84. Foreign exchange movements had a de minimis unfavorable impact on third quarter revenues and increased adjusted diluted loss per share by $0.04 or 2% compared to LY.
Now let me briefly touch on our full year guidance. Given we updated our full year revenue and EPS guidance on October 13, I'm just going to hit a few of the highlights. Total company's full year 2023 revenues are expected to be in the range of $58 million to $61 billion versus the previous range of $67 million to $70 million. Importantly, we continue to expect 6% to 8% full year operational revenue growth for non-COVID products year-over-year.
And as anticipated, the majority of this growth is incurred in the second half of the year given the timing of new products and indicated launches. I want to remind you that beginning in Q4, we will overlap the acquisitions of both Biohaven and GBT and which will we completed in October of 2022. Adjusted cost of sales and percentage of revenue is expected to be in the range of 41% to 43%, primarily the result of a $5.6 billion noncash charge related to inventory write-offs for our created products.
Adjusted SI&A expenses are expected to be in the range of $13.3 billion to $14.3 billion and adjusted R&D expenses to be within a range of $11.9 billion to $12.9 billion. The midpoint of both ranges are now $500 million lower than our original guidance. As a result of all these, the company now expects full year adjusted diluted earnings per share to be in the range of $1.45 to $1.65 per share versus the original guidance range of $3.25 to $3.45.
All additional components of our guidance are included in our press release that was issued earlier today. As discussed in prior quarters, our capital allocation strategy is based on 3 core pillars: first is reinvesting in our business; second is growing our dividends over time; and third is making value-enhancing share repurchases.
In the first 9 months of 2023, we invested $7.9 billion in internal R&D, returned $6.9 billion to shareholders via our quarterly dividend and allocated approximately $43 billion towards the proposed CG acquisition. Lastly, in addition to completing a $31 billion unsecured debt offering in Q2 of this year, we are ready to execute the remaining short-term financing to complete the proposed Seagen acquisition upon fulfillment of the required closing conditions.
We expect to delever our capital structure following the completion of this transaction. And as we delever, we anticipate returning to a more balanced capital allocation strategy, inclusive of share repurchases. In closing, I want to reiterate that our product portfolio remains very strong. We continue to be encouraged by the momentum of our non-COVID products in Q3 and are committed to the successful execution of our new product and indication launches. We expect the cost realignment program will improve our operating margin, enhancing long-term shareholder value. And with that, let me turn it over to Mikael.
Thank you, Dave. Today, I will share important updates from our robust respiratory vaccine portfolios. Our respiratory vaccines are built up on 3 cutting-edge platforms that enable us to bring the right science to the right pathogen. These include our mRNA platform in partnership with BioNTech targeting highly variant viruses. Our subunit platform targeting viruses that remain relatively consistent season to season and our Conegate-Vaccine platform designed to help prevent bacterial infections.
We have achieved FDA approvals of vaccines derived from each platform within the last year and aim to further expand our leadership with additional vaccine candidate development. Today, I will provide information on our stand-alone flu vaccine candidate, fluid combination vaccine candidate and next-gen pneumococcal vaccine candidate.
We are pleased to announce that we achieved both primary endpoints in the 18- to 64-year-old cohort of our ongoing Phase III flu trial. In the trial, our first-gen mRNA flu vaccine candidate demonstrated noninferiority and superiority to a license overtime at the time of the primary analysis. This represents the first and only demonstration of efficacy and superiority for an mRNA-based flu vaccine candidate.
In this age cohort, efficacy was maintained through the trials end-of-season analysis, with our candidates remain noninferior to the license comparator. Safety was similar to the standard flu vaccine. The primary and end-of-season efficient analysis considered both in terms of A and B cases collected.
The vast majority of cases recorded in our trial and during the '22/'23 flu season overall were flu cases. The unity data achieved robust antibody responses against Influenza A compared to licensed flu vaccine. Humoral responses against Influenza B were lower than those achieved with a comparator. Recall that our stand-alone flu vaccine Phase III study also includes a 65-year old approval that we previously shared encouraging T cell data for all 4 ranging from the Phase II study in this cohort.
Our belief is that the ability of these key candidates and use teacher responses may contribute to the improved efficacy of our current seasonal flu vaccine, particularly in the 65 and older. We expect the readout for this group later this year. To address the lower responses seen with our first gen stand-alone flu candidate, Pfizer created next-generation reformulation. These were incorporated into our mRNA flu candidate in combination with the [indiscernible] COVID-19 vaccine, which I will review now.
In positive Phase I, II top line data announced last week, we observed that reformulation of the lead flu candidate resulted in improved immunicity against Influenza B allowing us to meet all criteria for advancement to Phase III. In the trial, our lead candidate formulation induced robust immune responses with point estimates for umatricimune type ratios that were consistently criteria applied to approved vaccines for all match Blue and SARS-CoV2 strength.
Notably, a point estimate for geometric tighter ratios with selected candidate formulations were greater than 1 relative to their license comparator for all match flu vaccine. The safety profile of evaluated candidate were consistent with fight of own Taccone vaccine.
Following these positive immunities, we plan to initiate the Phase III study in the coming months. Successfully developing a broad seasonal vaccine franchise anchored around the among a vaccine is a key priority as it may allow us to tap into the annual flu vaccination rate in the U.S. adults.
We are taking a differentiated approach in pursuit of this goal, leveraging both mRNA and protein subunit technology. Our development program includes double and triple combination vaccine to potential health protecting in flu, COVID-19 and RSV.
Now turning to Prevnar. I'll start by reminding you that this is the only PCB business with an FDA indication for pneumonia in adults. Providing protection specifically against pneumococcal pneumonia is critical. It's the most common form of pneumococcal disease in adults, leading to 150,000 utilization each year. The prevalence of nonbacteemic pneumococcal pneumonia is more than 5-fold rates than that of invasive pneumococcal disease in U.S. adults 50 and older.
Prevnar's pneumonia indication supported by the CAPITA trial which was enabled by pneumococcal vaccine population and proprietary area assay. These innovative characteristics make it challenging for others to conduct a similar study given the high level of pneumococcal vaccine coverage that we use today.
Capita's innovative design and landmark results helped to establish our leading and differentiated position in the PCB space. To solidify this position, we are committed to pursuing continued innovation. Our goal is to potentially maximize vacancy and improving initiative while maintaining coverage of the tumor types clinically demonstrated to protect against anemia.
In line with this commitment, we have been developing in a fourth generation PCB candidate that builds on the Prevnar business 20-year-plus years ratio. Our next-generation technology leverages cutting-edge connotation, chemistry, carriers and reformulation. Using these new proprietary vaccine technology, we observed a severalfold improvement in select certainty in a monovalent Phase I study.
Based on these data, we are confident that when we move these technologies into our multivalent for end candidate, we have the potential to achieve increased valency with improved serotyping immunity. We are now advancing our fourth generation candidate into a protohuman trial, which is expected to begin in the fourth quarter of '23.
Finally, I will leave you with our list of milestones and call out the recent approval of the [indiscernible], the first and prevalence, pneumococcal vaccine. Pfizer delivered more than a dozen regulatory approvals this year alone. I'll also note the recent launches of Arisco maternal immunization and Rexel in multiple myeloma. Thank you. Let me turn it back to Francesca to start the Q&A session.
Thanks, Mikael. With that, let's start the Q&A session. We will answer as many questions as time permits and IR will be available after the call to answer any follow-up questions. Operator, please assemble the queue.
[Operator Instructions] And our first question will come from Robyn Karnauskas with Truist Securities.
I think I have a big picture question on your new launches, which is extremely important for your growth. Are you seeing any impact given, I think, vaccine fatigue that we've seen with COVID impacting RSV and pneumococcal vaccines. And how do you think about that impact as you think about 2023 and 2024? Do you think that will dissipate?
Thank you for your questions. First of all, I think it's good when you have a portfolio, and we have a quite strong portfolio because you have a competent have human copper in the rest we are too. But I think the biggest impact will be an we had combination products. We think that combination products will -- because of their convenience, because of vaccines are preferred by virus with 0 copay will increase basically the volumes and vaccination rates of all vaccines because of the convenience of running. And I think this is why you saw from Mikael, all our efforts right now are in development in multiple combinations, so that consumers and physicians will have stores, which wants to do a minister always with the same convenience.
Our next question will come from Huynh Trung with UBS.
I have one on flu and then just one on any -- so on flu, can you confirm the comparator in the 18 to 64 and also the 64 age groups was the low dose flu vaccines? Is there a risk FDA is going to need data against high-dose flu vaccines? And from a commercial perspective, do you think you still need a high dose flu data, the comparator against high-dose flu data, given that's what's recommended by CDC in the older population?
And then on Dan, should we just just on the data that we expect before year-end? What do you need to show in that in order to move it into Phase III trials? Is something similar to the Phase II we saw earlier this year enough to move it to Phase III?
Thank you. On the flucoparitor, I can confirm that it is the low dose on the younger population because that's the only one that's lost -- so on the older operation, we are having sites now with the low dose, but we will do also with the higher dose. So we have both. -- on value, it's not tough to say. We need to wait to see the data. There is clearly when you are moving ahead with a program like that, you need to see the totality of the data, and we are working now or eventually to be able to have this data presented before year-end. Let's move to the next question.
Our next question will come from Umer Raffat with Evercore.
I wanted to continue on the oral obesity theme for a second. I noticed there is a new molecule 522 that you moved into Phase I. And my question is, is the chemical structure and the chemical series akin to the Dana and Lodiglipron programs? And also, Albert, you mentioned you want to wait to see the danuglipron Phase II data, but I realize the trial has been wrapped up for a few weeks. Now have you not seen it yet?
Yes. Mikael, would you like to take the question about the new molecule and the dam?
Yes. We are building a platform around the Glip area and also obesity enroll with multiple different mechanisms and compounds. We remain focused on the danuglipron readout, as Albert mentioned, as our main opportunity here for getting data to review for obesity, in fact, to the obese. But the many indications where Clif might play a role outside of typical metabolic. So this 1 gives us just more option to explore and have interesting data and you will see more new mechanisms also coming from 5. We have a pretty strong effort here. Thank you.
Next, we have Terence Flynn with Morgan Stanley.
Maybe 2 for me. I was just wondering on your RSV launch, how we should think about potential for revaccination in 2024. And then on your DMD gene therapy program, I think you previously talked about having interim data by year-end. Is that still the case? And does the recent competitor data make you more or less optimistic in your program?
Thank you very much. First of all, let me make a comment on the recent data that we saw about the DNB is a very, very better for patients. We are really lease patient profession that doesn't have solutions. I hope there will be a solution for them with the discussion of the FDA or I can't comment. Now on our DMD program, I will ask Michael to comment on that. And then on the RSV, Angela. Mikael, why don't you start with it and then Angela go to RSV.
Yes, this comment that we also always said when somewhat tailored study. We are very encouraged about getting to the readout. You are right, there is an opportunity for an interim analysis around year-end with final analysis second half of next year. And overall, I think our lean therapy for DMD have shown a very consistent effect across biomarkers and functional endpoints. And what has been differentiated so far is that when you look at the functional data we have reported, it has been given encouraging signals in both the younger and the slightly older boys, and that has not been seen with the other company you referred to. So in a way, I remain earlier, very positive about looking forward to the readout and let the data tell you a story. But of course, this makes our gene therapy in a way, the main game in town.
Then there was a question, Angela, on the RSV.
Well, as you heard during the ACIP discussions, our recommendation for Brazil today is really one around clinical shared clinical decision-making. But we also were -- were asked to bring additional data when they are ready. And so just to confirm that we will have additional data and vaccine effectiveness in broader population. We will have safety data also in broader populations. We will also have immunogenicity data in younger populations. All of this will be, I think, available in the next year when we plan to bring this back to the BDC. In addition to that, actually needed to mention that we'll also have second season efficacy data. So we're able to bring this totality of data together to determine whether the recommendations will change, but also what the vaccination schedule will be. So that's to come in 2024.
Next, we have Steve Scala with TD Cowen.
As was just noted a couple of minutes ago, the Dane data has reached its primary completion. It was a while ago. Albert, when you were asked, you stress the words, totality of the data, implying that you could have seen some part of the data. Michael, when you were asked, you talked about different indications. These are not confidence building statements. So I'm curious what have you seen. And Michael, you've said in the past, you are absolutely encouraged and confident in the profile of danu. Are you still absolutely encouraged and confidence. So that's the first question.
Secondly, a competitor spoke to potentially COVID derived decrease in diagnosis of inflammatory diseases such as UC. And I'm wondering if you've seen any of that.
Steve, I think you likely misunderstood my comments on the [indiscernible]. It has nothing to any data that I have seen because I have, right? So the data have not been presented to -- I don't think that this page has been completed yet. So I will ask also Mikael to comment on that. But don't read is anything on the totality of the data. What I meant it is that we are doing this. We are doing the releases from less which we make it once a day. There are multiple things but we need to wait and see. We see how competitors are doing before deciding what we will do. But the most important thing is to say what is the efficacy of the cabin that will read out. So nothing to read in my comment on the part of the data. So Mikael, do you want to add?
Yes, I can just echo what you said well tee and I remain very enthusiastic to look forward to see the data. We have not seen the final top line report coming at. So the study is still ongoing, but will be available before year-end. Then we will flip on have shown, as you know, some really interesting profile as a full agonist. And it's our main opportunity and effort for best in Tata we got earlier today a question about new molecules that come in, and that's when I mentioned that our additional indications to pursue for such new molecules, and we also have new mechanisms that are validated that's coming in, in oral version. So we just punctate our big effort we have around both this class and obesity and other diesel orders. So in essence, he's still excited. Thank you very much, Mikael.
Next, we have Louise Chen with Cantor.
So I wanted to ask you on the fourth-generation PCV, how much additional serotype coverage will you have? And then also on Abreva, will that be available to pregnant women in the pharmacy? Or do they have to go to their OB/GYN. And then lastly, just on ganglion again here, will you also have the modified release data before year-end.
Mikael, you will take the TV question and the Dant also Angela, very quickly. [indiscernible]
Yes. It's going to be available in pharmacists in doctors' offices, we see lion offices. I think we have a real stocking advantage here, Louise, because anyone just needs to soft 1 product for 2 indications for both populations. So I think the uptake is to come. And certainly, the next few months being that it's the winter is when we begin to believe we'll see some good uptake.
And then Mikael?
On the PCB for generation I hope you looked at today's data. And what you could see is that we are really the company that has been able to put in place a whole set of new technology that can bring immune responses to a higher level than has been seen and that allow us to go with even more comprehensive coverage than the current 20. I'm not going to give your cuosity and answer how many serotypes. I can just tell you, it's considerable more than the 20.
On [indiscernible], we look upon danuglipron as a once a day QD molecule because of the reformulation technologies that we have put in place and already generated some clinical data on and are now concluded. So that's really how we look upon danuglipron. And we'll have final data on the best formulation option early next year. But as Albert said, we're enthusiastic to look forward to the efficacy data later this year. So very exciting time.
Thank you very much, Mikael.
Next, we have David Risinger with Leerink Partners.
So I have another question on danuglipron since it appears to be the company's #1 pipeline candidate based upon your forecasts. So regarding the Phase IIb results that are expected soon, how should we expect Pfizer to share those results? And then with regard to the once daily formulation that you just mentioned, Michael, will that be ready for the Phase III start assuming that the company moves to start Phase III shortly after the Phase IIb results are generated?
I mean the first question, given the importance of the market we will start with the press release maybe a color not-- but with the press release, we made them public available. Now Mikael, do you want to take the second part of the question update.
Yes. I can first echo what Albert and I said. We look forward with entices to get the danuglipron obesity data later this year. And of course, as Albert said, pending in totality of reviewing everything we have, we have made a lot of progress and been able to accelerate with the QD demo. Now we're waiting for some more clinical data early next year, but I think it's within our reach. If we decide to do to start the pivotal study next year to do it with a once-a-day molecule.
Thank you very much, Michael. Let's go to the next question.
Next, we have Chris Schott with JPMorgan.
Just 2 for me here. First, can you just comment a little bit more on what we're seeing with NURTEC and the ramp relative to your expectations? And maybe just as part of that, just any color on pricing we're seeing within the market today and how we should think about that going forward?
And then my second question was on 2024. I know you're not giving guidance today. But as you look at where consensus has kind of shaken out post the COVID and cost restructuring updates, I think the earnings are in kind of the low $3 range at this point. I guess just are there any directional kind of pushes or pulls in the numbers that you feel the Street isn't capturing properly and should be kind of thinking about before we get your kind of formal guidance as we look to early next year.
Thank you. David, he's asking about 24 guidance, but you are not going to tell us.
Right. So obviously, it's a little over to 2024. I would just say that clearly, we had a START clearing event as it relates to our COVID expectations for this year. So a lot of that risk is behind us as we think about the balance of this year. I do expect that the balance of this year will be very informative, particularly in the U.S. as we think about utilization trends, both for vaccination rates and importantly, a loaded here in the U.S. that will allow us to have a better clarity cycling 2024 of the utilization around those specific products, which will still be meaningful to us at an enterprise level. Clearly, when we get to providing guidance. We'll give you a lot of information beneath that, so you can get a good sense of our -- importantly, our non-COVID products, which continue to trend very favorably and very well. and we can layer on, I'll say, the optionality associated with our COVID franchise as we cycle into next year. So obviously, a lot more to come. We're looking forward to sharing those very specific details after the first of the year.
Thank you, David. And then Angela, about the NURTEC loans -- about the NURTEC performance of the marketplace, including the price.
So thanks for the question, Chris, because it's a great opportunity for us to share that are seeing NURTEC perform just as we expected, in fact, with some really strong performance indicators that I'd like to share with you. First of all, from a TRx perspective, we grew 28% compared to last year this time. And sequentially, we grew 6% versus last quarter. In fact, on October 20, we saw the highest week of TRxs and NRxs to date. That growth is also seen in the number of prescribers. Just this quarter alone, we had 73,000 prescribers [indiscernible]. And we are now moving at a clip of about 23,000 writers a week, which is 30% more than [indiscernible] and double that of Qualipta.
Another good place to look is also in new-to-brand starts right NBRxs. And when you look at that, NBRx growth for NURTEC is higher than brave and Klister in all the deciles of physicians, particularly in the decile 8 to 10, which, as you know, is where the highest prescribers are or who are the highest prescribers. And then when you look at pill count, we see something interesting there, too. We have been very intently or intently driving our pill pack towards the larger co-pack side, which is the 16 pack because of our prevention indication. And so when you look at the totality of all the pills or the total volume of pills, we have a leading market share there, more than 50%. And so I think when you look at all these indicators, at least on the way that we're looking at it, it's a very positive story. It's exactly how we see it. The expansion into primary care, as you heard in Albert's comments, is what it is that we're after. And today, only 17% of the entire market is all CGRPs, which tells you that most of the market is still an opportunity for us and represents growth that we're really looking forward to. And I think that we put the right investments in the right places to generate this growth in the future. From a pricing perspective, obviously, this is -- it's a product that is rebated -- and so I think the way to think about it is that from a patient perspective, which is where we really put a lot of focus, we want to make sure that our patients are able to get these groups are able to get access for NURTEC, especially as you consider that we're trying to mobilize people away from topiramate and away from triptan on to a CGRP. So the gross to net effects here are significant, and you see that quarter-over-quarter because we are making sure that we are able to provide access to patients who deserve and are eligible for NURTEC.
Next, we have Mohit Bansal with Wells Fargo.
Great. And I have a question regarding your S1P exatimod. Would love to get your thoughts on the label, it seems like -- I mean, you could have bid a lot of high morning. But at the same time, there's a new requirement of like eye exam as well as skin exam. how do you think about uptake considering these examinations before the start of the treatment, given that these doctors are much used to it.
All right. Quite medical questions, would you like to answer it, please? I'm happy to start on it. I think we have a very robust label for etrasimod. It's only S1P in this drug class for it flights that have a simple flat dosing and immediate start without any prior need for, let's say, cardiac rhythms exams like Jaggers, all less from key have various exams to monitor. And I think our label similarly has a recommendation to do that. So it's really nothing new. And our efficacy data, and you see has been very favorable. So we are very optimistic that this can be a true best-in-class colitis. Angela, do you want to add? Yes.
Sure. I was just going to add to that, that -- I mean, competitively, we believe that we have an excellent efficacy and PD profile. We don't have a need to titrate up, as Mikael said, but also as the assessments of standards versus our competitors at the initiation of therapy. So I think that this is a level playing field that we're in. Certainly, patient support is an area of focus for us, right, to ensure that patients are getting the estimates that they need but we feel that we're -- this is pretty standard practice and we'll be able to launch this product as planned.
Next, we have Geoff Meacham with Bank of America.
Just have a couple of quick ones. First, I know CGN obviously hasn't closed yet, but does all the emphasis on ADCs from ESMO, does it affect how you guys prioritize the pipeline or maybe investments you could make today commercially?
And the second question on danu. Mikael, I know a lot has been asked on the upcoming data. But from a commercial perspective, like where do you see the bigger opportunities for differentiation and metabolic -- is that really just oral administration in obesity or do you guys look more aggressively at related indications like cardio, renal, et cetera.
Chris, if you want to say to the question about the season and the pipeline.
Thank you very much. Obviously, we remain very confident that we will close season towards the end of this year, beginning next year. I should point it out there's a significant interest now in ABC because of the potential that they could to place most of the chemotherapeutics in the future for most cancer types. Season, obviously, has a significant track record with 4 approved ADC from their laboratories. And as you've seen, potential registration base will just read out and passives with asset under settabut also with the small multiple to Kaiser. They recently started 2 Phase III studies. One was the systems vedotin in with -- in combination with pembrolizumab in advanced meta-study HER2 positive or HER2. Blood cancer. This is a program that we're very excited about. -- already the sites received previously break the theraportin in the U.S. And they're also just about to start another Phase III program in non-small cell lung cancer, the B26 -- integrate B26 antibody So we remain very confident in their portfolio and the depth of expertise they're bringing to the development and discovery of ADC.
Thank you. And then Mikael?
Yes, I think you asked about how could a new oral clip in obesity be positioned for maximum attractiveness and using danu as one example, pending, of course, our excitement to see the data. Well, clearly, as obesity and type 2 diabetes with overweight or moving from being treated from angiocrinologists and metabolic physicians increasingly out of primary care, particularly with impressive effects of these drug players on obesity in body weight, all agents in general are preferred. So I think once a day brand structures new reformulated potential than the platform will have an interesting role there. I think there is also a growing discussion among opportunity leaders in the field that the patients we gain weight when they stopped injectables. And in general, they are only available for maybe a year. So an oral agent that could be taken for a longer period could also play a really interesting role to maintain body weight at the low level. And finally, you're absolutely right, the new data for this drug class suggests that patients could benefit from both cardiac and renal detection. And oral agents allow you to build in combination with drugs that already used in this population such as intu to protect the heart, et cetera. So I think that's why there is such a big interest in drugs in this class. So thank you for the question.
Next, we have Tim Anderson with Wolfe Research.
I have a couple of questions. On danuglipron, the early data set showed a QTC signal. Do you think that was a red hearing that won't show up in later data? To me, when I just think about drug classes and seeing QTC signals, it seems like it often persists in later data sets. And then second question on mRNA flu. You mentioned that safety is the same as license tax seems. Does that mean tolerability was as well? I usually think of safety and tolerability is technically being different from each other.
Very good. Thank you very much for the question. Mikael, both questions for you. Could you say for danu and then tolerability on...
Yes, I mean we have, I think, more than 1,400 patients on and it's a it's a very safe tug,and we look forward to the readout and efficacy as we have said before year-end. So that's very straightforward. MRNA, you had a very good comment particularly in initial studies, tolerability is really what we focus on. And tolerability was similar to standard of care available vaccines or the hardware mRNA vaccines experience from Pfizer, and we haven't really had any concerns of safety. So on both tolerability and safety the statement stands that it looks like previous versions of our vaccines. Thank you, Michael, and let's go to the next question,
Next, we have Chris Shibutani with Goldman Sachs.
Two questions, if I may. On the cost savings program, you've been outlining what the plan is for 2024. But if we look at the pattern of the spending for R&D and SINA in the quarter you just reported, I would observe that the magnitude of reduction in the R&D spend was greater than expected relative to SINA. How should we be interpreting those numbers or anything to read across in terms of the relative amount of cost reductions coming from SINA versus R&D on the forward? And then a question on Bill first quarter sales were solid. Can you just elaborate how much may have been attributable to, for instance, inventory stocking versus actual demand. If we look at prescription data, it looks like from the retail setting, there's about 30% market share is just similar to what you're observing in the broader market? And how is this comparing with your expectation?
Let me ask David to answer the question. About our R&D and the expenses. And then Angela will take it by it.
Yes. Chris, on the cost program, I would not read into the allocation of savings in '23 as it relates to '24. Obviously, we have a fairly robust program up and running today. We're working aggressively on those programs and beginning to implement those programs. as we cycle into 2024, we'll give you in the market some specific color on how to think about those cost savings as we wrap into next year. .
Angela?
Sure. So we are really pleased with our performance on a bridge notice has exceeded our expectations. You first asked whether this is all about stocking and I can say that it isn't -- of course, there were stocking effects in the beginning because this was a new vaccine, but we're also closely tracking vaccination rates and uptake. And what you see is that there is a very fast uptake. We were -- that really benefited from the fact that this was approved and in market prior to the vaccination season actually happening. So was able to write off of the coattails of flu vaccinations, which you know are very high, right, September, October. We have about a 70% co-administration rate. So the performance we're seeing on Bizo is truly driven by back agents. To your comment about market share, yes, we are seeing a similar market share to what you have just said. That is because right now, the retail setting is driving a lot of the vaccinations. But don't forget, that, that's not where all vaccinations are taking place. We also have non-retail settings such as health systems, doctor's offices. Those are also being engaged and those particular setting, Pfizer actually actually has a leading preference. They are smaller in proportion but still. So I think we have to look at all channels of the market. Finally, I think that just from a momentum perspective, we expect things to continue. The vaccinations really are happening throughout this time now, October, November, December are big vaccination months. from where we are right now, RSV is only 5% of the entire vaccination rate of the eligible population. So I think that the conclusion is we're very early in the innings of this launch is doing better than we thought. But that's where we are going to be, I think, is a place where there's tremendous opportunity for driving uptake in all the results, but also maternal, which, as you know, we just got the approval for.
Next, we have Carter Gould with Barclays.
Maybe if you back to oral danu. When we look at the Phase II data, what should our expectation be around communicating plans for Phase III, which I guess is just a quicker way of saying what's a reasonable expectation for how quickly you could turn around the Phase II and start a Phase III and how much work Pfizer has already done on that front? And then maybe just coming out of ESMO, on the back of the 302 data and the response, would Pfizer say that reaffirms their expectations or represents upside to their expectations when the deal was originally announced?
Thank you very much. On [indiscernible] let me take so I can spare a little bit of Mikael's time. We are expecting the data to show up before the end of the year. And of course, it's an important event. So we will have to make it publicly known when we know the date. And of course, when we are ready with our Phase III, and we hope that the data are good so that we can move in the factory. And I hope that we are going to do it in an extruded manner because speed is of essence in this battle between completed mortgages, but we will announce our plans for Phase III. I know the interest is very high right now, but I won't be very prudent in not saying things without the data or the kind the data. Now let me move to Chris so that we can discuss about the [indiscernible].
Thank you for raising 301. These are truly monumental data for the sales of bladder cancer neurotheral cancer. And as you pointed out, that over the vital and medium progressively survival nearly doubled, moving median overall survival for this population now to or nearly towards 3 years. We expect the final letter to be above longer than 1.5 a month. So this just reaffirmed our belief that antibody conjugates could become a standard of care across the treatment paradigm for many, many different tumor type.
[Audio Gap] And also for January, I think as we've heard a lot of times on the call that the trial is marked as completed in October, I know you haven't seen the top line data. So at this point, are we waiting for data from this lower for weak tetration cohort? Also, would it be fair to say that you will have discontinued the program already, if there were any clinically significant series issues withstanding?
Mikael?
Yes. On the once a day reformulated one, we have initially tested a standard swellable core technology and could show that it worked very well with Anu. And now to be able also to incorporate a more sophisticated technology. We work on a matrix technology and all data suggest it's going to be a really intriguing alternative because, as you know, in diabetes for all our drugs and obesity, you will, over time, end up with incorporating different drugs to prevent different downstream effects. And that's the beautiful of having this type of novel technology that you have a potential in the future to go to fix those combinations. And we are really masters in developing sophisticated formulations, and we will have this available in 2024. And there was a second part, I think. Or no? There was a component and -- okay.
Next, we have Kerry Holford with Berenberg.
Two questions on vaccines, please. Triton in August, GSK filed a lawsuit against Pfizer alleging patent infringement. So I wonder if you could just talk to the next steps here, perhaps a time line that you anticipate for this? And should we think that this could ultimately result in some form of royalty payments and apply. And then on pembro, how does the recent recommendation sit against your expectations for the sales ramp and peak potential for this vaccine. If the vaccine to take a tense for dose 2 or 3, does that significant reduce the commercial opportunity you had anticipated to the vaccine .
Yes. Can we please answer the question about this legal situation
Yes. So it's very, very early stages with respect to the RSV litigation. We have patents. We feel strongly about our own intellectual property -- and it's certainly too early to say whether 1 party or the other will be required to pay any royalties or otherwise, very early stages in that regard.
Thank you. And Angela, how do you feel about it?
Sure. We continue to feel confident about the peak sales. The reason is that right now, we have the first set of recommendations but ACIP has also told us that we will have the opportunity again to come back next year when we have additional data, which is when we'll have the opportunity to look at the schedule or how Quad and Bs are being back being the schedule that they're being delivered today. And we'll have an opportunity again to take a look at the benefit of Pan bra in this population. So I feel like it's great that we have an opportunity to get out now and to begin vaccinating our teenagers. We will have a second bite at the apple, which will allow us to achieve our sales.
Next, we have Andrew Baum with Citi.
Couple of questions. Would you comment on your stake in RBT 3101, Tier 1 pending the approval of the licensing of the asset to Roche would you hang on to it? Or is that subject to divestment? And then second question for Chris. Just looking at the recent UV 302 data and with you seem to have the CGM portfolio, when you think about the combination of ADCs with pembro or with a PD-1 do you believe the efficacy that you're seeing is associated with the hedging? Or do you think it's true synergy through anymologic mechanism or increased sell there?
And Aamir, you want to speak a little bit about the Ross acquisition of the other one?
Yes. So thanks for the question, Andrew. I think we're very pleased with the outcome of the TL1A program. When we created Televance, we did this as an R&D prioritization decision. Just as a reminder, this is a Phase II program that required significant Phase III investment -- and so we held on to a 25% stake. We also had rights to royalties on U.S. sales as well as the full ex U.S. and ex Japan rights. And we did that all without any R&D spend. So Roche's proposed acquisition of Televant will give us access to about $1.7 billion of pretax cash, which is the translation of our stake. And we still retain all the other rights. So we're looking forward to having Roche as a partner. We're looking forward to the investments that they're going to make in advancing the clinical stage programs on TL1A and benefiting from the outcome of those.
And Chris about the synergies.
Yes, Thanks,. That's a very good question. As you know, Sisense by tiers -- and we see the potential synergy in combination with the PD-1 with ADCETRIS, with TDC recently as you've seen with asset. Although CGM does have the next generation of ADC for TOFA that will enter the year next year, we don't know yet. If the total ones are going to show similar types of mean what appears to happen with the MD or a utensils. So I think we're very confident that, that season has both Total1 as well as our patent base pay node in taste, we do not what appears to be you correct the type of sets.
Thank you very much, Chris. And let's go to the last question, please.
Our last question comes from Evan Seigerman with BMO Capital Markets.
So I have one on Daniel and then a bigger picture one. So point of clarification on danuglipron, Mikael, is the ultimate goal to develop the fixed dose combination with, say, an SGLT2 or other anti-diabetes drugs? You kind of mentioned that in your commentary. And taking a big step back, how should we think about how you risk adjusted your long-term revenue guidance. Do you plan on updating these figures so you have clinical or regulatory successes or failures for example, with the approval of strain?
Mikael, can you please take the question?
Yes. I mean the near-term goal is really look at the data, we've said both Albert and myself. And pending review, of course, that's an option with a once a day downward to move forward in obesity in diabetes. I think we have commented that the upside with oral drugs our man in this sector, and that's why it has been such a big interest and that includes 6 dose combination, which aren't available with injectable. But we will keep it simple and clear we'll review the data and take a decision about potential in obesity in diabetes once a day downward. That's the near-term.
Thank you very much. And also about your question, if we are going to change the $20 billion or the $25 billion that we have declared. First of all, the $25 billion is billion that we are going to acquire according to our estimates, we have acquired pending season acquisition, PLN 20 billion. If you see the 1 expectation for these acquisitions at the end of 2030 are very, very close. -- what we have right now. And I think there is trending very much. When you see internal the launches that we are having from our internal pipeline, which we declared $20 billion. The rig got be what we believe and what the analysts lead and this is where we are functional right now, it's very early with the launches. Some of them are doing better than what it. Some of them are doing worse than what we thought. And if we realize that the total of $20 billion is not anymore what we think, of course, we will update
But I think what is important to that is if you look at our business, our core business is performing nicely. We continue to make traction. We have obviously a lot of launches that we completed and several ahead of us. We're excited about what Sugen could potentially bring to the company as we think about our focus now in oncology. And then importantly, I think we've baseline, if you will, the COVID franchise. As you think about utilization half this year and cycle into next year. We will then take a step back and look at what would be prudent as we think about the revenue in totality of this company as we cycle into '24 and beyond. So I think you look forward to, as we begin going into 2024, those expectations are laying those out specifically.
Okay. Thank you very much. So thank I would like us to say that you walk away from today's call with just one take away, should be thinner the future mix price. We have rebased our COVID expectations and now I think it's very easy for everyone to be able to model what I think will be stable COVID revenues going forward. And with the recent prison amended tax or up agreement. And of course, we are having a very strong performance. of our line and new products, the portfolio, excluding profit, a 10% growth this quarter. and that position us to be able to have growing teams going forward. So I will now bring this call to an end. Thank you for joining us, and have a great rest of your day.
Thank you, ladies and gentlemen. This concludes today's Pfizer Third Quarter 2023 Earnings Conference Call. We appreciate your participation, and you may disconnect at any time. Thanks.