Pfizer Morgan Stanley 24th Annual Global Healthcare Conference

Thank you for the invitation. Good morning, everyone. Very few comments in the beginning. I think that Pfizer is in a good place right now. We had three serious headwinds in 2025 that I think we resolved all of them in a quite satisfactory way. The first one was affecting the entire industry with tariffs and MFN. We led the industry in creating agreements that I think put that behind us, and it was a very good compromise and settlement. I told my peers, the other CEOs, that they don't have to send me part of their check, a bonus. It's fine if they send me thank you notes. The other two were specific to Pfizer, the challenges. One was the COVID uncertainty and the fact that COVID was going down, and what does this mean if COVID disease subsides for the EPS?

We, I think, put also that to rest. This is the year of the smallest COVID season we could even imagine. There is nothing happening in our EPS because actually what is happening is that we are beating expectations because everything else is performing very well. So I think already I can see that COVID is not a concern of investors anymore. Nobody's asking me about it, and they all see it more like an upside versus the guidance that we are giving. The third was, of course, the LOE period that starts, and it is ahead of us. That's something that, together with COVID, that was taking the attention of our pipeline completely off. So everybody was focusing what is your growth and what happens in the LOEs. For that, I think we were preparing for a long time.

We did a significant amount of business development acquisitions, and we launched a significant amount of new products. During that period, all of them are doing extremely well. In addition to that, we were very successful in reducing our cost base. I think testament to the ability of Pfizer to execute it is that we did that without affecting the top line. We were able to take $7.2 billion within three years out of our cost base. In the last 10 earnings, so 2024, 2025, and the two earnings of 2026, we beat expectations for revenue, nine out of 10, and for EPS, 10 out of 10. All of that while we were reducing our cost base. We announced now another cost initiative that also will help us in the next couple of years to offset the LOEs.

The fundamental for offsetting the LOEs, it is that the new products and the business development products, they are running at around $13 billion annualized rate, if you make the math, and they are growing at the 20s percent. I think that's something that it is very important. I will finish my comments with, now because all of that is very clear, I think, to investors, if you see our earnings calls or also my meetings with investors, most of the attention now it is not in COVID, not in MFN, not in LOEs, pipeline. The pipeline is doing extremely well. During all these years, we refocused our R&D, and we had significant readouts.

We are having significant catalysts ahead of us in 2027 that I think could help investors realize the depth and breadth of this pipeline, because clearly there is a disconnect between what The Street is projecting for our longer-term growth and what we are certain that we will achieve vis-à-vis our long-term growth.

I think in summary, I don't expect much to happen until the midterms. Of course, they are in a couple of weeks, but also post the midterms, because probably we will see how that goes if there's a split government or not. You should expect in cases like that, only things that they have bipartisan support to move in the legislation way. One, of course, it is the PBM reform. There is bipartisan reform. There are already three significant steps that have been taken. One, with a regulatory act, and two, actually with a regulatory act and one with legislation. I think that will continue. In 340B, it remains a major issue.

I think there is bipartisan appreciation of the issue, but I am less optimistic that we will find a way to resolve it because it involves hospitals that create a lot of political sensitivities around that. On the vaccines front, I think it is pretty much now a little bit behind us in vaccines policy. I think we went through a period of FDA and CDC having leadership that did not align with the medical community, the medical guidelines out there. But now I think that is fixed. I think now both in CDC and in FDA, we have normal people, they are scientists, and they are focusing now on doing their job, and I am very pleased about that. So pretty much that is it in the policy front. There are some things here and there, but also in the U.S. are affecting international pricing, for example.

That has moved the goalpost to the U.S. trade representative, Ambassador Greer, who is an excellent ambassador, and he is very knowledgeable about the issues of our industry, and he is highly sensitized in trying to fix them. He does the negotiations with all this, German, France, U.K., et cetera. I think that also I can expect something positive there.

I wouldn't count much on that. I think our experience was that we had some positive headwinds, but also had some tail. Excuse me, positive tailwinds, but also had some headwinds. Probably it was a net marginally positive, and I think we will continue like that. I don't think that it is too premature to say that, okay, now we should assume that the industry will have a major 340B benefit going forward. Actually, connected to 340B in the previous question that you asked me, one of the important things to watch out, it is the pilot that the HHS is launching for 340B.

Yeah. That has a starting day in January of 2027, so in 2027 will be applied. It affects two significant products of Pfizer, ELIQUIS and IBRANCE, but they are part of this program.

That will be what we can see for the impact, but also the long-term consequences of that.