Full Transcript: Pfizer Q2 2026 Earnings Call

Pfizer (NYSE: PFE ) released second-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Full Transcript OPERATOR Good day everyone and welcome to Pfizer's second quarter 2026 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Francesca DiMartino, Chief Investor Relations Officer and Senior Vice President. Please go ahead, ma'am.

Francesca DiMartino, Chief Investor Relations Officer Good morning and welcome to Pfizer's earnings call. I'm Francesca DiMartino, Chief Investor Relations Officer. On behalf of the Pfizer team, thank you for joining us. This call is being made available via audio webcast.

com. I'm joined today by Dr. Albert Bourla, our chairman and CEO; Dave Denton, our CFO; Cecile Gagant, 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. 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. Albert Bourla — Chairman of the Board Thank you, Francesca. Good morning everyone and 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 Gagan 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 Cecil'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. Now, 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% operational when excluding the impact of certain one-time items in the same quarter a year ago. We view our CDS, MTERA 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 the promising ADC pipeline, central to our goal of growing our oncology list. We also acquired a commercial portfolio that is delivering ahead of expectations. S. after excluding the one-time stocking benefit that we had in the second quarter of last year.

With Msera, 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 Sessions reinforce why we are excited about Berobanadite, 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 three program that includes 10 studies for chronic weight management and obesity-related conditions. 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 a phase three 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 pace.

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. 7 billion through 2029. We are also moving toward the next phase of our manufacturing optimization program, and with additional savings, we now expect total net cost 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, and 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 in sharpening our commercial marketing approaches.

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 past 10 quarters. And with that, what better slide to turn it over to Dave and Cecil. Dave Denton, CFO 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.

So 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 has earned from the entire organization. I leave knowing that Cecile will guide Pfizer's financial and growth strategy with both rigor, discipline, and continuity. And with that I'm pleased to turn it over to Cecile.

Thank you, Albert and Dave, and good morning. Before I discuss second quarter results, I want to underscore Albert's comment. I believe Pfizer is well positioned to return to growth from 2029 onward and create meaningful value for shareholders. We will continue to execute a disciplined approach to capital allocation, making targeted investment today to drive revenue growth later in the decade and beyond.

We intend to do this while maintaining and, over the long term, growing the dividend. Our business is performing well. Commercial execution is driving strong results, including 18% operational revenue growth in our launch and acquired products. This quarter we continued to strengthen and advance our pipeline.

With the continued growth of our launch and acquired products, we are laying the groundwork for high single-digit revenue growth towards the end of the decade. Our second quarter adjusted earnings performance reflects disciplined execution across our strategic priorities and continued progress towards building the foundation for durable, long-term value creation. I will review our results from the quarter, productivity enhancement initiatives, capital allocation priorities, and full-year guidance. We are raising the midpoint of our revenue guidance range despite lower-than-expected COVID revenues.

10 impact related to the Innovent Biology transaction that closed in the third quarter of 2026. S. and select international markets. Second quarter 2026 revenues were 50 billion ahead of our expectation and represented a year-over-year operational increase of 1%.

Excluding COVID products, the underlying investment delivered 5% operational revenue growth. Progress leveraging data and scaling AI across the company supported our field force in driving access and increasing uptake for new launches. Our commercial performance has also helped mitigate the impact of currently low COVID infection levels on the bottom line. 77, also exceeding our expectations.

This outperformance reflects continued cost discipline and productivity across the organization. While we still advanced several Phase 3 study starts across our pipeline, our results this quarter demonstrate the effectiveness of our commercial strategy. We saw solid contributions across the portfolio, primarily driven by Eliquis, Padcev, Vyndaqel family, and Lorbrena, each reflecting focused execution in key strategic areas. S.

markets. Our commercial teams are focused on identifying patients, enabling access, and supporting duration of therapy based on clinical data. This has helped us maintain leadership positions across oncology and vaccines and unlock new opportunities. We continue to drive value in key inline products ahead of approaching LOEs.

2 billion in revenue and grew 18% operationally in the quarter, of note, this growth rate was tempered by one-time items recorded in the second quarter of 2025, mostly impacting the legacy Seagen inline portfolio. Excluding this impact, the growth rate was 27%. We continue to invest behind inline brands and launch and acquired products to support their growth trajectory and help offset incoming LOE headwinds over the next several years. Financial discipline and strong cost management across our manufacturing footprint remain top priorities.

Adjusted gross margin for the second quarter was 76%, primarily reflecting product mix and ongoing cost control measures. We continue to expect $700 million in savings from phase one of our manufacturing optimization program this year, with $175 million realized in Q2. 1 billion for the second quarter of 2026, an increase of 4% operationally versus the second quarter last year. Looking at the components, adjusted SG&A expenses decreased 3% operationally, primarily reflecting lower spending in corporate enabling functions.

Adjusted R&D expenses increased 12% operationally, primarily driven by an increase in spending in certain oncology and obesity product candidates. Second quarter 2026 adjusted operating margin was strong at 35%, reflecting effective cost management, strong non-COVID revenue performance, and R&D investment in the quarter. 77, which benefited from our strong non-COVID revenues and efficient operating structure. Our second quarter GAAP results reflect the impact of the recent Phase 3 readout for SV in second-line-plus non-small cell lung cancer and, to a lesser extent, the removal of revenue projections for Xbrighter.

3 billion in non-cash intangible asset impairments recorded in the quarter for SV. We continue to forecast significant risk-adjusted revenue in other non-small cell lung cancer indications, subject to technical and regulatory success. So far Seagen revenue performance has exceeded our initial expectations, and we aim to continue delivering above initial expectations in the long term. We remain disciplined in operating expense management and focused on long-term margin improvement.

2 billion in total net cost savings by the end of 2026. 5 billion in additional net cost savings from 2027 through 2029. We now expect $1 billion of additional net cost savings from productivity enhancements from technology and simplification efforts designed to further reduce SG&A costs. 5 billion in additional net cost savings, and we expect to begin realizing a portion of this saving in 2027.

This next phase focuses on network structure changes, product portfolio enhancement, and additional operational efficiency. We now expect total net cost savings from this program of approximately $3 billion through 2029. 7 billion in total net savings from this program through 2029. These initiatives are expected to enhance operating efficiency, support continued operating margin expansion, and strengthen our ability to invest in innovation and future growth opportunities.

Let me now turn to capital allocation. Our strategy is designed to enhance long-term shareholder value while preserving flexibility. It includes reinvesting in the business at appropriate returns, maintaining and, over time, growing our dividend, and preserving optionality for future value-enhancing actions, including share repurchases. 9 billion to shareholders via a quarterly dividend.

The Innovent Biologics deal closed in July, resulting in an initial $650 million upfront payment to be recorded as acquired in-process R&D expense in the third quarter. Following this transaction, our BD capacity is approximately $6 billion.