Pfizer Inc. 2026 Q2 Earnings Call

Welcome to Pfizer's earnings call. I'm Francesca 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 second quarter of 2026 via a press release that is available on our website at pfizer.com. I'm joined today by Dr. Albert Bourla, our Chairman and CEO, Dave Denton, our CFO, Cecile Guegan, our incoming interim CFO, and Chris Boshoff, our Chief Scientific Officer. After their prepared remarks, we will open the call for questions. Members of our leadership team will be available for the Q&A session. Before we get started, I want to remind you that we will be making forward-looking statements and discussing certain non-GAAP financial measures.

I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR website on pfizer.com. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Thank you, Francesca. Good morning, everyone. Thank you for joining our call. We had another strong quarter of execution, driving continued strategic progress. Our revenues and adjusted diluted EPS in the second quarter once more exceeded expectations. This shows that our commercial teams are performing with excellence and precision, and that we continue to operate with financial discipline. We also are building towards the future, advancing our R&D pipeline that provides multiple opportunities for success across our four therapeutic areas. Previously, we announced that Dave Denton would be leaving Pfizer soon for another opportunity. Since then, Dave has partnered closely with Cecile Guegan to prepare for this transition. Cecile is fully ready to serve as our interim CFO, including answering your financial questions during today's Q&A session. I want to thank Dave for his leadership, his dedication to Pfizer, and all he has contributed to our company's success.

With Cecile's leadership, I'm confident we are in very good hands. She has had a central role for years in shaping and driving Pfizer's financial and strategic direction. She's an expert in our industry and her field and knows our company well. She has worked closely with Dave and our leadership team in completing key transactions, developing our approach to capital allocation, and driving efficiency and productivity improvements across our company. I'm confident in the years ahead because we have been purposeful in establishing a foundation marked by strong execution across our business, alignment among our leadership team, and a clear strategy to guide our colleagues in working toward meaningful future growth and impact. Let me go through our progress with our 2026 strategic priorities, starting with maximizing the value of key transactions.

In the quarter, revenue for our acquired products grew 25% operationally when excluding the impact of certain one-time items in the same quarter a year ago. We view our Seagen, Metsera, and Biohaven transactions as transformative opportunities for Pfizer. We are focused on execution and pleased with the progress we continue to make with each of them. With the addition of Seagen, we gained an innovative platform, deep scientific expertise, and a promising ADC pipeline central to our goal of growing our oncology groups. We also acquired a commercial portfolio that is delivering ahead of expectations. In the quarter, we drove strong revenue growth with a 21% year-over-year increase across the legacy Seagen portfolio in the U.S. after excluding the one-time stocking benefit that we had in the second quarter of last year.

With Metsera, we believe we are on a path towards unlocking a differentiated profile for patients with obesity and related conditions in a market expected to reach $150 billion. Data we shared recently at the American Diabetes Association scientific session reinforce why we are excited about nirubenatide, which is an investigational ultra-long-acting GLP-1 receptor agonist with the potential to be the first monthly GLP-1 peptide approved for the treatment of obesity and related comorbidities. We are targeting a first approval in 2028, and this year alone, we expect to advance an extensive phase III program that includes 10 studies for chronic weight management and obesity-related conditions. Finally, the acquisition of Biohaven positioned our company as a leader in providing treatment options for migraine, a disease affecting an estimated 1.2 billion people worldwide.

NURTEC delivered strong year-over-year growth again this quarter and continued to lead the oral CGRP class in total prescriptions. Looking ahead, we are working towards expansion opportunities that would further strengthen our impact for this patient. We have the phase III trial underway for menstrual migraine, an area of high unmet patient need, and another trial evaluating redosing for acute treatment of migraine. We also expect a pivotal trial start this year investigating NURTEC's use as a treatment for chronic migraine. Our pipeline progress through the first half of the year reflects our discipline in prioritizing programs where strong science, clinical execution, and strategic investments can make the greatest impact for patients. Our R&D team already has been productive with our ambitious agenda, achieving critical milestones that included three regulatory approvals, six key data readouts, and eight pivotal study starts so far. Oncology is a clear area of strength.

In the past two years, we have initiated a dozen late-stage studies across our core tumor areas. We have unveiled data from 21 late-stage readouts and achieved six regulatory approvals. We also have clear line of sight to our aim of delivering a risk-adjusted, high single-digit revenue CAGR from year-end 2028 through year-end 2033. This is supported by our bottoms-up analysis that included assessing our base of growing in-line products and 20 key potential new medicines and vaccines within our pipeline. We continue to prioritize investment in R&D, both on internal programs and selective business development, with the potential to strengthen our position in key areas. Financial discipline and cost management is allowing us to continue investing in growth. We now expect an additional $1 billion in savings from our ongoing cost realignment program, powered in part by rapid advancements of technology.

Net cost savings from these programs are now expected to total $6.7 billion through 2029. We are also moving forward with the next phase of our manufacturing optimization program, and with additional savings, we now expect total net savings of approximately $3 billion from this program through 2029. With our strong performance through the first half of the year and our ongoing productivity enhancement discipline, we remain confident in our business. Today, we are raising the midpoint of our revenue guidance for full-year 2026 and reaffirming guidance for adjusted diluted earnings per share. We remain committed to maintaining and over time, growing our dividend. We view AI as the structural transformation opportunity for driving substantial acceleration of our R&D pipeline, greater speed and productivity across our business, and an improved competitive position for Pfizer.

We are already seeing benefits from AI in reducing cost and expanding yields in manufacturing. It's helping to make our commercial field force more effective and sharpening our commercial marketing approach. Even greater opportunities are ahead as we apply AI to accelerate innovation in drug discovery and development. Our ambition is to build an AI-native R&D organization where every insight from target discovery through medical evidence continuously informs the next decision. In summary, I'm confident in how our business is positioned. We executed well and operated with continued financial discipline through the first half of 2026. With our performance in the second quarter, this is the ninth time we exceeded consensus expectations for revenues in the last 10 quarters, and we have beaten expectations for adjusted diluted EPS in all 10 of the 10 past quarters.

With that, what a better slide to turn it over to Dave and Cecile.

Great. Thank you, Albert, and good morning, everyone. Leaving Pfizer was a difficult decision, but it's the right one for me personally. I'm deeply proud of what we've accomplished together, the team that we have built, and the vision for the future of Pfizer. The results of this quarter show how well our company is executing and why we are confident in the strategy for returning to growth post-2028. We anticipated that a substantial portion of today's call will focus on our outlook for the remainder of this year, as well as our strategy for creating long-term value for both patients and shareholders. With that in mind, we determined it would be best for you to hear directly from Cecile. I've worked closely with Cecile, seeing firsthand how she leads effectively with her deep financial knowledge, her expertise, and the respect that she's earned from the entire organization.

I leave knowing that Cecile will guide Pfizer's financial and growth strategy with both rigor, discipline, and continuity. With that, I'm pleased to turn it over to Cecile.