To The Moon

Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue you may find some valuable information that might affect the stock price in the following weeks. Now let's look at some key points from Pfizer Q4 2021 Q&A Session Transcript$Pfizer(PFE)$ Q:Hey, guys. Thanks for taking the question. Just had two. The first one, Paxlovid guidance, I know you guys are factoring in only signed agreements, but can you give us a general sense as to agreements or doses perhaps that are under discussion, and is that dependent on supply ramping? The second question, on external DV, Albert, I understand the strategy. I think the uncertainty is really the ability to scale some of the products that you brought in. So, if COVID-19 is less of a long-term contributor than you assume, what’s the appetite to do higher impact larger deals? You clearly have the capacity. Thank you. A:Sure. So, currently, we are in active discussions with over 100 countries and governments around the world. So, I’d say that the discussions are going really well. In terms of where we are with the contracting, as you say, we’ve included some of the contracts that we already are -- that we have. But, of course, this number changes every day. And contracts are being secured and distribution agreements being secured literally on a day-to-day basis. So, I think that this is a number to watch out for. And we do continue to expect movement. I think that there is a tremendous amount of interest for our product. And certainly, as the clinical program continues to develop and emerge, as you know, we only have the high-risk study right now, we still have the standard risk and the prophylaxis that’s coming up, and I think that the full clinical program will also be another point of impetus for contracting and ordering. So, I think it’s going just really well and more to come on this front. A:Sure. Thanks for the question, Geoff. I think in terms of the topline, we’re going to be incredibly flexible. We have said repeatedly that we are most interested in compounds that have potential to be real breakthroughs, and this can take the form of later-stage clinical development as well as earlier stage medical innovation. We’re going to bias to the PAs -- oncology, I&I, rare, vaccines, internal medicine and hospital -- where we’ve got the scientific chops to make good choices and add real value. And we’re going to be flexible on the deal types. Acquisitions are obviously very much in the cards, but strategic partnerships and alliances are well. And, in fact, some of our best successes have come from some capital-light collaborations. If we see a larger opportunity that’s strategic and creates value and meets the criteria that I just described, we’ve obviously got the balance sheet to utilize to do that. So, we certainly will look at those, but we’re going to talk about and focus on the priorities that I described more so than synergy driven deals per se. A:Thank you, Aamir, and just to add to both points because I’m sure that both will be asked a lot. On the Paxlovid, clearly the numbers could become way bigger than what we have right now, but this is not something that we have done in the past and we don’t plan to do right now to give based on what could be the potential as a guidance. We are giving guidance based on what it is more or less secure. However, signed deals are already agreed, but not signed yet deals, but agreed prices and volumes. So, clearly, if you remember, when we started with the vaccine, in the beginning, we had a guidance of, I think, $15 billion in the first quarter, something like that. Eventually, made $36 billion. Here, we start even stronger in our first projections with Paxlovid. So and that’s why we manufacture and we’ll move ahead with our plans and already we are at 120 million treatments and we have the ability to go higher if the discussions that we’re having materialize. In terms of also the business development, I just want to emphasize that -- because I’m getting a lot this question on the size. We are agnostic to size. Where we are biased, it is deals. But in order to justify the premium, we will have to do significant cost synergies. This is not -- these are -- could be very profitable deals for other, let’s say, periods of the history of the Company, not now. Right now, the Company is having a manufacturing machine, but it is performing at its best, an R&D machine, but it’s performing at its best, a commercial machine, but keeps being the leader in the industry in terms of their ability to execute and deliver. So, the last thing I want to do, it is to do a deal, but in order to justify the premium to the shareholders of the other company, we will have to shut down manufacturing sites and to consolidate the shared sites and consolidate field forces, so that we can justify, so we can generate the core synergies. This is not the time to disrupt the momentum of the Company. This is a time to bring into this manufacturing machine, the research machine, the commercial machine more substrate in addition to what we produce organically ourselves. And this is why the business development is aiming in these areas. Q:Great, thanks. Thanks for taking my question. Maybe one on Paxlovid. So, there have been some news reports talking about logisticals and access issues for Paxlovid. And I understand the supply is tight for now, but would love to get your thoughts on how you’re working on improving the logistics when the supply is no longer an issue, especially in a world where home testing would become a norm and one needs to take this drug within five days of diagnostics. Thank you. A:Sure. So first of all, again, our deliveries and our allocations for the doses have gone extremely well here in the U.S. Just to give you some context, 265,000 doses have been allocated by the U.S. government since the EUA was approved. And of that 265,000, 85% of all the doses have been ordered. So and we see a range of ordering patterns from the states. Some states are ordering 100% of the allocation, others are 80%, 70%, so on and so forth. So, it is really only a handful that haven’t really ordered up to their allocation. But I would say, for the most part, the weekly orders are going up and increasing week by week. And there is a very strong placement of orders. So, I would say that the drawdown right, of the doses and the utilization is going really well. And again, it differs by state what the allocations are and how that’s going. And then, as Albert said, I don’t know that we have logistical -- like, they are not logistical issues. I think, initially, what was difficult was that it was not clear where the doses were being located because every state had a different system for where to actually distribute Paxlovid from. But there are a number of tools now that have gone up online, both at the state level as well as on Pfizer’s website. We’ve taken the state government tool and also loaded it on our website, so that both HCPs and patients can see where Paxlovid is being -- where it’s available and where the orders as well as prescription can be placed. So, I think in that regard, that’s all been ironed out. I think looking forward into the future, clearly, having a seamless sort of end-to-end, from diagnosis, positive results to then being able to prescribe quickly and having the patient be able to acquire the drug quickly is our goal. And I think, on all of those fronts, we’re working with a number of partners both from a testing and a diagnostics perspective, but also from a telemedicine perspective and from a pharmacy perspective, to ensure that we have as fast and as efficient, I can say, a patient journey, right from diagnosis right until treatment. So, all of that is in place. And you’ll continue to hear more about that as the launch and as the utilization increases. A:So, again, to punctuate and give a little bit of context to what Angela said, the 85% that -- it has already been ordered from the quantity that we are making available to U.S. government. It’s a very, very high number. For example, the same number in the first month for vaccines, if you remember well, if you remember from that time, was dramatically lower than that because it takes time for the states to get their act together and it is really variable state by state. So, there are states right now, but once the quantities are made to them available, they are ordering immediately and there are states that take their time until they get their act together for the distribution. In general, way, way, way more efficient than what used to be in the first months of the vaccine, also, what is extremely important, it is that every week, there is constant replenishments, which although we do not have right now, data for scripts, because it’s too early, what we do have it is that the quantities that the states are accumulating, they’re disappearing and then immediately they are placing orders. So, I would say we have, let’s say -- we are pretty happy with the way that the first month, the collaboration with the U.S. government went in terms of allocating doses. And there is dramatically also improvement in the tools, as Angela described. But the bigger improvement will come from the fact that the second month, we will make available way more quantities, and the third month, way more quantities because the issues right now for people trying to find it, it is in few places in the state because you can’t expand the network of places that it is variable when you have smaller quantities. That will be very, very different in this month and basically all over the place, I think, in the third month where significant quantities will be delivered. Q:Hi, guys. Thank you so much for taking my question. I was wondering if you could provide an update on the FTC review process for the Arena deal. If I’m not mistaken, there was a recent procedural move where you and Arena withdrew and re-filed the HSR Act filing essentially to allow the FTC an additional 30 days for review. And then, I’d also love for you to walk me through your assumptions on how you forecast $13 billion in revenue from BD transactions that would imply to your specific targets and combination of targets in mind. Any color here that you could provide would be very helpful. Thank you. A:Yes. Thank you very much. On the last one, just to make sure, but this is not our assumption. Our assumption is way higher of the $13 billion. What I just gave you, it is what is the consensus of the deals that we have signed so far. But on the FTC review, I would like to ask Doug to provide maybe a review on that, Doug Lankler, our General Counsel. A:Yes. As you pointed out, we did request to refile, which is not unusual. Under -- the deal is, of course, subject to customary closing conditions and typical anti-trust clearance and shareholder approval, which, as you know, we’ve received. We don’t expect a significant break in time from our proposed sense that the deal will close in the first half of this year. We still expect it to close in the first half of this year. A:Thank you. And Aamir, although I did explain that this is consensus numbers, not our numbers, do you want to make any other comment on the $13 billion of 2030 revenues that consensus forecasts for the deals that we have signed? A:Yes. The only thing I would add is, we feel very good about the progression of all of the substrate and the deals since 2019 that Albert outlined. We’ve seen a significant number of approvals in the EUAs in that group, submissions as well as quite a few Phase 3 starts. So we think that that substrate is progressing well and the $13 billion is the consensus number. Our expectations of what’s there are materially higher and there are a number of transactions. We spoke to Trillium, Biohaven and even some of the recent things that we’ve done in mRNA that are not yet factored in the consensus forecast on those transactions. The above Q&A are highlights that are edited for brevity.Click here for the full Pfizer Q4 2021 Earnings Call Transcript. If you want to know more details, you can click here to re-watch the Pfizer Q4 2021 Earnings Call