Corrected Transcript 1-877-FACTSET Total Pages:20 Copyright 2001-2025 FactSet CallStreet,LLC 06-Aug.
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Roy Jakobs,Chief Executive OfficerCharlotte Hanneman,Chief Financial OfficerJuly 29,2025Second quart.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-Q_ QUARTERLY REPORT PURS.
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Second-Quarter 2025 Sales and EarningsMerck&Co.,Inc.,Rahway,N.J.,USAJuly 29,2025Agenda2AgendaStrateg.
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This presentation contains certain forward-looking statements.These forward-looking statements may b.
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GILEADSCIENCESANNOUNCESSECONDQUARTER2025FINANCIALRESULTSProductSalesExcludingVekluryIncreased4%Year-Over-Yearto$6.9billionBiktarvySalesIncreased9%Year-Over-Yearto$3.5billionFosterCity,CA,August7,2025-GileadSciences,Inc.(Nasdaq:GILD)announcedtodayitssecondquarter2025resultsofoperations.“ThiswasaverysuccessfulsecondquarterforGilead,includingtheFDAapprovalforYeztugoastheworldsfirsttwice-yearlyHIVpreventionoption,”saidDanielODay,GileadsChairmanandChiefExecutiveOfficer.“OurstronggrowththisquarterwasdrivenbyBiktarvy,Descovy,TrodelvyandLivdelzi,reflectingthediversityofourportfolio.Asweenterthethirdquarter,weareincreasingrevenueandearningsguidancefortheyear,andlookforwardtodeliveringcontinuedinnovationandgrowthacrossourcoretherapeuticareas.”SecondQuarter2025FinancialResultsTotalsecondquarter2025revenueincreased2%to$7.1billioncomparedtothesameperiodin2024,drivenbyhigherHIV,Livdelzi(seladelpar)andTrodelvy(sacituzumabgovitecan-hziy)sales,partiallyoffsetbylowerchronichepatitisCvirus(“HCV”)andVeklury(remdesivir)sales.Dilutedearningspershare(“EPS”)was$1.56inthesecondquarter2025comparedto$1.29inthesameperiodin2024.Theincreasewasprimarilydrivenbynetunrealizedgainsonsecuritiescomparedtonetunrealizedlossesin2024andhigherproductsales,partiallyoffsetbyapre-taxin-processresearchanddevelopment(“IPR&D”)impairmentchargeof$190millionrelatedtoassetsacquiredaspartoftheMYRGmbH(“MYR”)acquisitionandhigherresearchanddevelopment(“R&D”)expenses.Non-GAAPdilutedEPSof$2.01inthesecondquarter2025remainedflatcomparedtothesameperiodin2024,withhigherproductsalesoffsetbyhigherR&Dexpenses.AsofJune30,2025,Gileadhad$7.1billionofcash,cashequivalentsandmarketabledebtsecuritiescomparedto$10.0billionasofDecember31,2024.Duringthesecondquarter2025,Gileadgenerated$827millioninoperatingcashflow,netofafinal$1.3billiontransitiontaxpaymentassociatedwiththeTaxCutsandJobsActof2017.Duringthesecondquarter2025,Gileadpaiddividendsof$994millionandrepurchased$527millionofcommonstock.SecondQuarter2025ProductSalesTotalsecondquarter2025productsalesincreased2%to$7.1billioncomparedtothesameperiodin2024.Totalsecondquarter2025productsalesexcludingVekluryincreased4%to$6.9billioncomparedtothesameperiodin2024,primarilyduetohigherHIV,LivdelziandTrodelvysales,partiallyoffsetbylowerHCVsales.HIVproductsalesincreased7%to$5.1billioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbyincreaseddemandandhigheraveragerealizedprice.Biktarvy(bictegravir50mg/emtricitabine(“FTC”)200mg/tenofoviralafenamide(“TAF”)25mg)salesincreased9%to$3.5billioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbyhigherdemand.Descovy(FTC200mg/TAF25mg)salesincreased35%to$653millioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbyhigheraveragerealizedpriceanddemand.TheLiverDiseaseportfoliosalesdecreased4%to$795millioninthesecondquarter2025comparedtothesameperiodin2024.ThiswasprimarilydrivenbylowerHCVsales,partiallyoffsetbyincreaseddemandforLivdelzi,Hepcludex(bulevirtide)andchronichepatitisBvirus(“HBV”)products.Veklurysalesdecreased44%to$121millioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbylowerratesofCOVID-19-relatedhospitalizations.CellTherapyproductsalesdecreased7%to$485millioninthesecondquarter2025comparedtothesameperiodin2024,reflectingongoingcompetitiveheadwinds.Yescarta(axicabtageneciloleucel)salesdecreased5%to$393millioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbylowerdemand,partiallyoffsetbyhigheraveragerealizedprice.Tecartus(brexucabtageneautoleucel)salesdecreased14%to$92millioninthesecondquarter2025comparedtothesameperiodin2024,primarilyreflectinglowerdemand,partiallyoffsetbyhigheraveragerealizedprice.Trodelvysalesincreased14%to$364millioninthesecondquarter2025comparedtothesameperiodin2024,primarilydrivenbyhigherdemandandinventorydynamics.SecondQuarter2025ProductGrossMargin,OperatingExpensesandEffectiveTaxRateProductgrossmarginwas78.7%inthesecondquarter2025comparedto77.7%inthesameperiodin2024.Non-GAAPproductgrossmarginwas86.9%inthesecondquarter2025comparedto86.0%inthesameperiodin2024.Theincreaseswereprimarilydrivenbyproductmix.R&Dexpenseswere$1.5billioninthesecondquarter2025comparedto$1.4billion inthesameperiodin2024,primarilyduetoincreasedclinicalmanufacturingandstudyexpenses,aswellasvaluationadjustmentstotheMYR-relatedcontingentconsideration.Non-GAAPR&Dexpenseswere$1.5billioninthesecondquarter2025comparedto$1.3billion inthesameperiodin2024,primarilyduetoincreasedclinicalmanufacturingandstudyactivities.AcquiredIPR&Dexpenseswere$61millioninthesecondquarter2025,primarilyreflectingexpensesrelatedtothestrategicpartnershipwithKymeraTherapeutics,Inc.(“Kymera”)announcedinJune2025.Selling,generalandadministrative(“SG&A”)expensesandnon-GAAPSG&Aexpensesof$1.4billioninthesecondquarter2025remainedflatcomparedtothesameperiodin2024,withhigherpromotionalexpensesoffsetbylowercorporateexpenses.Theeffectivetaxrate(“ETR”)was19.3%inthesecondquarter2025comparedto21.4%inthesameperiodin2024,primarilydrivenbylowernon-taxableunrealizedlossesonsecurities,partiallyoffsetbyabeneficialprioryearsettlementwithataxauthoritythatdidnotrepeat.Thenon-GAAPETRwas18.8%inthesecondquarter2025comparedto17.8%inthesameperiodin2024,primarilyreflectingthesamenon-recurringtaxsettlementintheprioryear.GuidanceandOutlookForthefull-year,Gileadexpects:(inmillions,exceptpershareamounts)August7,2025GuidanceLowEndHighEndComparisontoPriorGuidanceProductsales$28,300$28,700 Previously$28,200to$28,600ProductsalesexcludingVeklury$27,300$27,700 Previously$26,800to$27,200Veklury$1,000$1,000 Previously$1,400DilutedEPS$5.85$6.15 Previously$5.65to$6.05Non-GAAPdilutedEPS$7.95$8.25 Previously$7.70to$8.10August7,20252AdditionalinformationandareconciliationbetweenGAAPandnon-GAAPfinancialinformationforthe2025guidanceisprovidedintheaccompanyingtables.Thefinancialguidanceissubjecttoanumberofrisksanduncertainties.SeetheForward-LookingStatementssectionbelow.KeyUpdatesSinceOurLastQuarterlyReleaseVirologyReceivedU.S.FoodandDrugAdministration(“FDA”)approvalforYeztugo(lenacapavir)forpre-exposureprophylaxis(“PrEP”)toreducetheriskofsexuallyacquiredHIV-1inadultsandadolescentsweighingatleast35kg.Yeztugoisthefirstandonlytwice-yearlyHIVPrEPoptionavailableintheUnitedStates.ReceivedapositiveopinionunderacceleratedreviewfromtheEuropeanMedicinesAgencysCommitteeforMedicinalProductsforHumanUserecommendinglenacapavirforuseasPrEPtoreducetheriskofsexuallyacquiredHIV-1inadultsandadolescentswithincreasedHIV-1acquisitionrisk.TherecommendationwillnowbereviewedbytheEuropeanCommission.LenacapavirforHIVPrEPisnotapprovedforuseoutsideoftheUnitedStates.AnnouncedastrategicpartnershipagreementwiththeGlobalFundtoFightAIDS,TuberculosisandMalaria(“GlobalFund”)toaccelerateaccess,subjecttoregulatoryapprovals,totwice-yearlylenacapavirforHIVPrEPforuptotwomillionpeopleinprimarilylow-andlower-middle-incomecountriesoverthreeyears,atnoprofittoGilead.PresentednewdataattheInternationalAIDSSocietyconference,includingfromthePURPOSE1and2trialsevaluatingtwice-yearlylenacapavirforHIVPrEPinabroadrangeofpopulations,includingpregnantandlactatingwomen,adolescents,andyoungpeople.AnnouncedthattheWorldHealthOrganizationreleasednewguidelinesrecommendingtheuseoftwice-yearlylenacapavirforHIVPrEP,aswellasnewguidelinesonHIVtestingprotocolsforlong-actingpreventionmedications.AnnouncedthatFDAhadplacedaclinicalholdontheHIVtreatmenttrialsofGS-1720and/orGS-4182,includingtheWONDERS-1andWONDERS-2trials.Thesedrugcandidatesareinvestigationalandnotapprovedanywhereglobally.PresentedfinaldatafromthePhase3MYR301studyevaluatingbulevirtideasatreatmentforadultswithchronichepatitisdeltavirus(“HDV”)attheEuropeanAssociationfortheStudyoftheLiver(“EASL”)Congress.BulevirtideremainstheonlyapprovedtreatmentforHDVintheEUandisnotapprovedintheU.S.Additionally,presentedclinicalandreal-worlddataonHBVandHCVprograms.OncologyAnnouncedpositivetoplineresultsfromthePhase3ASCENT-03trialevaluatingTrodelvyinpatientswith1Lmetastatictriple-negativebreastcancer(“mTNBC”)whoarenotcandidatesforPD-1/PD-L1checkpointinhibitors.Additionally,presentedresultsfromthePhase3ASCENT-04trialevaluatingTrodelvyplusKeytruda(pembrolizumab)in1LPD-L1 mTNBCattheAmericanSocietyofClinicalOncology(“ASCO”)meeting.Trodelvyisnotapprovedineitherofthesesettings.Presentednewreal-worlddataatASCOsupportingtheuseofYescartainoutpatientcaresettingsforpatientswithrelapsedorrefractory(“R/R”)largeB-celllymphoma(“LBCL”),aswellasotherearly-stageinvestigationalCARTdatainglioblastomaandLBCL.PresenteddatainpartnershipwithArcellx,Inc.(“Arcellx”)attheEuropeanHematologyAssociationcongressfromtheiMMagine-1trialevaluatinginvestigationalanitocabtagene-autoleucel(“anito-cel”)inR/Rmultiplemyeloma.EnteredintoanexclusiveoptionandlicenseagreementwithKymeratodevelopnoveloralmolecularglueCDK2degraderswithbroadoncologytreatmentpotential.August7,20253InflammationPresentednewdatafrommultipleanalysesatEASLevaluatingLivdelziforthetreatmentofprimarybiliarycholangitis,includinginterimanalysisfromtheopen-label,long-termASSUREstudy.CorporateTheBoarddeclaredaquarterlydividendof$0.79pershareofcommonstockforthethirdquarterof2025.ThedividendispayableonSeptember29,2025,tostockholdersofrecordatthecloseofbusinessonSeptember15,2025.FuturedividendswillbesubjecttoBoardapproval.TheBoardauthorizedanew$6.0billionstockrepurchaseprogram,withnofixedexpiration,whichwillcommenceuponthecompletionofthepreviouslyapprovedprogram.ReachedafinalsettlementagreementwiththeU.S.DepartmentofJusticeresolvingalegacycompliancematter.Thissettlementwasaccruedin2024andreportedunderSG&Aexpenses.NamedbyTIMEasa2025MostInfluentialCompany.Certainamountsandpercentagesinthispressreleasemaynotsumorrecalculateduetorounding.ConferenceCallAt1:30p.m.PacificTimetoday,GileadwillhostaconferencecalltodiscussGileadsresults.Alivewebcastwillbeavailableonhttp:/foroneyear.Non-GAAPFinancialInformationTheinformationpresentedinthisdocumenthasbeenpreparedinaccordancewithU.S.generallyacceptedaccountingprinciples(“GAAP”),unlessotherwisenotedasnon-GAAP.Managementbelievesnon-GAAPinformationisusefulforinvestors,whenconsideredinconjunctionwithGileadsGAAPfinancialinformation,becausemanagementusessuchinformationinternallyforitsoperating,budgetingandfinancialplanningpurposes.Non-GAAPinformationisnotpreparedunderacomprehensivesetofaccountingrulesandshouldonlybeusedtosupplementanunderstandingofGileadsoperatingresultsasreportedunderGAAP.Non-GAAPfinancialinformationgenerallyexcludesacquisition-relatedexpensesincludingamortizationofacquiredintangibleassetsandotheritemsthatareconsideredunusualornotrepresentativeofunderlyingtrendsofGileadsbusiness,fairvalueadjustmentsofequitysecuritiesanddiscreteandrelatedtaxchargesorbenefitsassociatedwithsuchexclusionsaswellaschangesintax-relatedlawsandguidelines,transfersofintangibleassetsbetweencertainlegalentities,andlegalentityrestructurings.AlthoughGileadconsistentlyexcludestheamortizationofacquiredintangibleassetsfromthenon-GAAPfinancialinformation,managementbelievesthatitisimportantforinvestorstounderstandthatsuchintangibleassetswererecordedaspartofacquisitionsandcontributetoongoingrevenuegeneration.Non-GAAPmeasuresmaybedefinedandcalculateddifferentlybyothercompaniesinthesameindustry.Reconciliationsofthenon-GAAPfinancialmeasurestothemostdirectlycomparableGAAPfinancialmeasuresareprovidedintheaccompanyingtables.AboutGileadSciencesGileadSciences,Inc.isabiopharmaceuticalcompanythathaspursuedandachievedbreakthroughsinmedicineformorethanthreedecades,withthegoalofcreatingahealthierworldforallpeople.Thecompanyiscommittedtoadvancinginnovativemedicinestopreventandtreatlife-threateningdiseases,includingHIV,viralhepatitis,COVID-19,cancerandinflammation.Gileadoperatesinmorethan35countriesworldwide,withheadquartersinFosterCity,California.Forward-LookingStatementsStatementsincludedinthispressreleasethatarenothistoricalinnatureareforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Gileadcautionsreadersthatforward-lookingstatementsaresubjecttocertainrisksanduncertaintiesthatcouldcauseactualresultstodiffermaterially.Theserisksanduncertaintiesincludethoserelatingto:Gileadsabilitytoachieveitsfullyear2025financialguidance,includingasaresultoftheuncertaintyoftheamountandtimingofVekluryrevenues,August7,20254theimpactoftheInflationReductionAct,changesinU.S.regulatoryorlegislativepolicies,andchangesinU.S.tradepolicies,includingtariffs;Gileadsabilitytomakeprogressonanyofitslong-termambitionsorprioritieslaidoutinitscorporatestrategy;Gileadsabilitytoaccelerateorsustainrevenuesforitsvirology,oncologyandotherprograms;Gileadsabilitytorealizethepotentialbenefitsofacquisitions,collaborationsorlicensingarrangements,includingtheacquisitionsofMYR,andthearrangementswithArcellx,KymeraandtheGlobalFund;patentprotectionandestimatedlossofexclusivityforourproductsandproductcandidates;Gileadsabilitytoinitiate,progressorcompleteclinicaltrialswithincurrentlyanticipatedtimeframesoratall,thepossibilityofunfavorableresultsfromongoingandadditionalclinicaltrials,includingthoseinvolvingLivdelzi,Trodelvy,Yescarta,Yeztugo(lenacapavir),anito-cel,bulevirtide,GS-1720,andGS-4182(suchastheASCENT-03,ASCENT-04,ASSURE,iMMagine-1,MYR301,PURPOSE1PURPOSE2,WONDERS-1,andWONDERS-2studies),andtheriskthatsafetyandefficacydatafromclinicaltrialsmaynotwarrantfurtherdevelopmentofGileadsproductcandidatesortheproductcandidatesofGileadsstrategicpartners;GileadsabilitytoresolvetheissuescitedbytheFDAintheclinicalholdontheGS-1720andGS-4182trialstothesatisfactionoftheFDAandtheriskthatFDAmaynotremovetheclinicalhold,inwholeorinpart,inatimelymanneroratall;Gileadsabilitytosubmitnewdrugapplicationsfornewproductcandidatesorexpandedindicationsinthecurrentlyanticipatedtimelines;Gileadsabilitytoreceiveormaintainregulatoryapprovalsinatimelymanneroratall,includingforadditionalapprovalsforlenacapavirforHIVPrEP,andtheriskthatanysuchapprovals,ifgranted,maybesubjecttosignificantlimitationsonuseandmaybesubjecttowithdrawalorotheradverseactionsbytheapplicableregulatoryauthority;Gileadsabilitytosuccessfullycommercializeitsproducts;theriskofpotentialdisruptionstothemanufacturingandsupplychainofGileadsproducts;pricingandreimbursementpressuresfromgovernmentagenciesandotherthirdparties,includingrequiredrebatesandotherdiscounts;alargerthananticipatedshiftinpayermixtomorehighlydiscountedpayersegments;marketshareandpriceerosioncausedbytheintroductionofgenericversionsofGileadproducts;theriskthatphysiciansandpatientsmaynotseeadvantagesofGileadsproductsoverothertherapiesandmaythereforebereluctanttoprescribetheproducts,includingYeztugo;GileadsabilitytoeffectivelymanagetheaccessstrategyrelatingtolenacapavirforHIVPrEP,subjecttonecessaryregulatoryapprovals;andotherrisksidentifiedfromtimetotimeinGileadsreportsfiledwiththeSEC,includingannualreportsonForm10-K,quarterlyreportsonForm10-QandcurrentreportsonForm8-K.Inaddition,Gileadmakesestimatesandjudgmentsthataffectthereportedamountsofassets,liabilities,revenuesandexpensesandrelateddisclosures.Gileadbasesitsestimatesonhistoricalexperienceandonvariousothermarketspecificandotherrelevantassumptionsthatitbelievestobereasonableunderthecircumstances,theresultsofwhichformthebasisformakingjudgmentsaboutthecarryingvaluesofassetsandliabilitiesthatarenotreadilyapparentfromothersources.TheremaybeotherfactorsofwhichGileadisnotcurrentlyawarethatmayaffectmattersdiscussedintheforward-lookingstatementsandmayalsocauseactualresultstodiffersignificantlyfromtheseestimates.Further,resultsforthequarterendedJune30,2025arenotnecessarilyindicativeofoperatingresultsforanyfutureperiods.Gileaddirectsreaderstoitspressreleases,annualreportsonForm10-K,quarterlyreportsonForm10-QandothersubsequentdisclosuredocumentsfiledwiththeSEC.GileadclaimstheprotectionoftheSafeHarborcontainedinthePrivateSecuritiesLitigationReformActof1995forforward-lookingstatements.Thereaderiscautionedthatforward-lookingstatementsarenotguaranteesoffutureperformanceandiscautionednottoplaceunduerelianceontheseforward-lookingstatements.Allforward-lookingstatementsarebasedoninformationcurrentlyavailabletoGileadandGileadassumesnoobligationtoupdateorsupplementanysuchforward-lookingstatementsotherthanasrequiredbylaw.Anyforward-lookingstatementsspeakonlyasofthedatehereoforasofthedatesindicatedinthestatements.AdditionalinformationisavailableonourInvestorRelationswebsite,https:/.Amongotherthings,anestimateofAcquiredIPR&DexpensesisexpectedtobemadeavailableontheQuarterlyResultspagewithinthefirstten(10)daysaftertheendofeachquarter.#August7,20255Gileadownsorhasrightstovarioustrademarks,copyrightsandtradenamesusedinitsbusiness,includingthefollowing:GILEAD,GILEADSCIENCES,KITETM,AMBISOME,ATRIPLA,BIKTARVY,CAYSTON,COMPLERA,DESCOVY,DESCOVYFORPREP,EMTRIVA,EPCLUSA,EVIPLERA,GENVOYA,HARVONI,HEPCLUDEX,HEPSERA,JYSELECA,LIVDELZI/LYVDELZI,LETAIRIS,ODEFSEY,SOVALDI,STRIBILD,SUNLENCA,TECARTUS,TRODELVY,TRUVADA,TRUVADAFORPREP,TYBOST,VEKLURY,VEMLIDY,VIREAD,VOSEVI,YESCARTA,YEZTUGOandZYDELIG.KEYTRUDAisaregisteredtrademarkofMerckSharp&DohmeLLC.,asubsidiaryofMerck&Co.,Inc.,Rahway,NJ,USA.Othertrademarksandtradenamesarethepropertyoftheirrespectiveowners.FormoreinformationonGileadSciences,Inc.,orcalltheGileadPublicAffairsDepartmentat1-800-GILEAD-5(1-800-445-3235).CONTACTS:Investors:JacquieRoss,CFAinvestor_Media:AshleighKosspublic_August7,20256GILEADSCIENCES,INC.CONDENSEDCONSOLIDATEDSTATEMENTSOFOPERATIONS(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions,exceptpershareamounts)2025202420252024Revenues:Productsales$7,054$6,912$13,668$13,559Royalty,contractandotherrevenues27418181Totalrevenues7,0826,954 13,749 13,640Costsandexpenses:Costofgoodssold1,5011,5443,0413,096Researchanddevelopmentexpenses1,4911,3512,8702,871Acquiredin-processresearchanddevelopmentexpenses61383154,169In-processresearchanddevelopmentimpairments1901902,430Selling,generalandadministrativeexpenses1,3651,3772,6232,752Totalcostsandexpenses4,6084,3099,038 15,317Operatingincome(loss)2,4742,6444,711(1,678)Interestexpense254237513491Other(income)expense,net(208)355120265Income(loss)beforeincometaxes2,4292,0534,077(2,433)Incometaxexpense468438802123Netincome(loss)1,9601,6143,275(2,556)NetincomeattributabletononcontrollinginterestNetincome(loss)attributabletoGilead$1,960$1,614$3,275$(2,556)Basicearnings(loss)pershareattributabletoGilead$1.57$1.29$2.63$(2.05)Dilutedearnings(loss)pershareattributabletoGilead$1.56$1.29$2.61$(2.05)Sharesusedinbasicearnings(loss)pershareattributabletoGileadcalculation1,2451,2471,2461,247Sharesusedindilutedearnings(loss)pershareattributabletoGileadcalculation1,2551,2511,2571,247SupplementalInformation:Cashdividendsdeclaredpershare$0.79$0.77$1.58$1.54Productgrossmargin 78.7w.7w.7w.2%Researchanddevelopmentexpensesasa%ofrevenues 21.1.4 .9!.0%Selling,generalandadministrativeexpensesasa%ofrevenues 19.3.8.1 .2%Operatingmargin 34.98.04.3%(12.3)fectivetaxrate 19.3!.4.7%(5.1)%August7,20257GILEADSCIENCES,INC.TOTALREVENUESUMMARY(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions,exceptpercentages)20252024Change20252024ChangeProductsales:HIV$5,088$4,7457%$9,675$9,0886%LiverDisease795 832(4)%1,553 1,569(1)%Oncology849 8411%1,606 1,629(1)%Other202 280(28)A0 504(19)%TotalproductsalesexcludingVeklury6,934 6,6984,245 12,7904%Veklury121 214(44)B3 769(45)%Totalproductsales7,054 6,9122,668 13,5591%Royalty,contractandotherrevenues27 41(34) 811%Totalrevenues$7,082$6,9542%$13,749$13,6401%August7,20258GILEADSCIENCES,INC.NON-GAAPFINANCIALINFORMATION(1)(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions,exceptpercentages)20252024Change20252024ChangeNon-GAAP:Costofgoodssold$922$965(4)%$1,883$1,939(3)%Researchanddevelopmentexpenses$1,450$1,3359%$2,789$2,7382quiredIPR&Dexpenses(2)$61$3861%$315$4,169(92)%Selling,generalandadministrativeexpenses$1,358$1,351%$2,580$2,646(3)%Other(income)expense,net$(66)$(37)82%$(164)$(141)17%DilutedearningspershareattributabletoGilead$2.01$2.01%$3.82$0.70NMSharesusedinnon-GAAPdilutedearningspershareattributabletoGileadcalculation1,2551,251%1,2571,254%Productgrossmargin 86.9.0bps 86.2.7RbpsResearchanddevelopmentexpensesasa%ofrevenues 20.5.28bps 20.3 .1!bpsSelling,generalandadministrativeexpensesasa%ofrevenues 19.2.4%-26bps 18.8.4%-64bpsOperatingmargin 46.5G.0%-49bps 45.0.7%NMEffectivetaxrate 18.8.8bps 17.6Q.4%NM_NM-NotMeaningful(1)RefertoNon-GAAPFinancialInformationsectionaboveforfurtherdisclosuresonnon-GAAPfinancialmeasures.AreconciliationbetweenGAAPandnon-GAAPfinancialinformationisprovidedinthetablesbelow.(2)EqualtoGAAPfinancialinformation.August7,20259GILEADSCIENCES,INC.RECONCILIATIONOFGAAPTONON-GAAPFINANCIALINFORMATION(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions,exceptpercentagesandpershareamounts)2025202420252024Costofgoodssoldreconciliation:GAAPcostofgoodssold$1,501$1,544$3,041$3,096Acquisition-relatedamortization(1)(579)(579)(1,158)(1,158)Restructuring1Non-GAAPcostofgoodssold$922$965$1,883$1,939Productgrossmarginreconciliation:GAAPproductgrossmargin 78.7w.7w.7w.2quisition-relatedamortization(1)8.2%8.4%8.5%8.5%Restructuring%Non-GAAPproductgrossmargin 86.9.0.2.7%Researchanddevelopmentexpensesreconciliation:GAAPresearchanddevelopmentexpenses$1,491$1,351$2,870$2,871Acquisition-relatedothercosts(2)(35)(3)(37)(70)Restructuring(6)(13)(44)(63)Non-GAAPresearchanddevelopmentexpenses$1,450$1,335$2,789$2,738IPR&Dimpairmentreconciliation:GAAPIPR&Dimpairment$190$190$2,430IPR&Dimpairment(190)(190)(2,430)Non-GAAPIPR&Dimpairment$Selling,generalandadministrativeexpensesreconciliation:GAAPselling,generalandadministrativeexpenses$1,365$1,377$2,623$2,752Acquisition-relatedothercosts(2)(17)(84)Restructuring(7)(8)(43)(22)Non-GAAPselling,generalandadministrativeexpenses$1,358$1,351$2,580$2,646Operatingincome(loss)reconciliation:GAAPoperatingincome(loss)$2,474$2,644$4,711$(1,678)Acquisition-relatedamortization(1)5795791,1581,158Acquisition-relatedothercosts(2)352137153Restructuring13218884IPR&Dimpairment1901902,430Non-GAAPoperatingincome$3,290$3,265$6,183$2,148Operatingmarginreconciliation:GAAPoperatingmargin 34.98.04.3%(12.3)quisition-relatedamortization(1)8.2%8.3%8.4%8.5quisition-relatedothercosts(2)0.5%0.3%0.3%1.1%Restructuring 0.2%0.3%0.6%0.6%IPR&Dimpairment 2.7%1.4.8%Non-GAAPoperatingmargin 46.5G.0E.0.7%Other(income)expense,netreconciliation:GAAPother(income)expense,net$(208)$355$120$265Gain(loss)fromequitysecurities,net142(392)(284)(405)Non-GAAPother(income)expense,net$(66)$(37)$(164)$(141)Income(loss)beforeincometaxesreconciliation:GAAPincome(loss)beforeincometaxes$2,429$2,053$4,077$(2,433)Acquisition-relatedamortization(1)5795791,1581,158Acquisition-relatedothercosts(2)352137153Restructuring13218884IPR&Dimpairment1901902,430(Gain)lossfromequitysecurities,net(142)392284405Non-GAAPincomebeforeincometaxes$3,103$3,065$5,834$1,798August7,202510GILEADSCIENCES,INC.RECONCILIATIONOFGAAPTONON-GAAPFINANCIALINFORMATION-(Continued)(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions,exceptpercentagesandpershareamounts)2025202420252024Incometaxexpensereconciliation:GAAPincometaxexpense$468$438$802$123Incometaxeffectofnon-GAAPadjustments:Acquisition-relatedamortization(1)120121241242Acquisition-relatedothercosts(2)737Restructuring271516IPR&Dimpairment5151611(Gain)lossfromequitysecurities,net(11)3310(6)Discreteandrelatedtaxcharges(3)(48)(60)(90)(100)Non-GAAPincometaxexpense$583$546$1,029$923Effectivetaxratereconciliation:GAAPeffectivetaxrate 19.3!.4.7%(5.1)%Incometaxeffectofabovenon-GAAPadjustmentsanddiscreteandrelatedtaxadjustments(3)(0.5)%(3.5)%(2.0)V.4%Non-GAAPeffectivetaxrate 18.8.8.6Q.4%Netincome(loss)attributabletoGileadreconciliation:GAAPnetincome(loss)attributabletoGilead$1,960$1,614$3,275$(2,556)Acquisition-relatedamortization(1)459458917916Acquisition-relatedothercosts(2)351437117Restructuring11147268IPR&Dimpairment1391391,819(Gain)lossfromequitysecurities,net(131)359275412Discreteandrelatedtaxcharges(3)486090100Non-GAAPnetincomeattributabletoGilead$2,521$2,519$4,806$874Dilutedearnings(loss)persharereconciliation:GAAPdilutedearnings(loss)pershare$1.56$1.29$2.61$(2.05)Acquisition-relatedamortization(1)0.370.370.730.73Acquisition-relatedothercosts(2)0.030.010.030.09Restructuring0.010.010.060.05IPR&Dimpairment0.110.111.46(Gain)lossfromequitysecurities,net(0.10)0.290.220.33Discreteandrelatedtaxcharges(3)0.040.050.070.08Non-GAAPdilutedearningspershare$2.01$2.01$3.82$0.70Non-GAAPadjustmentsummary:Costofgoodssoldadjustments$579$579$1,158$1,157Researchanddevelopmentexpensesadjustments411681133IPR&Dimpairmentadjustments1901902,430Selling,generalandadministrativeexpensesadjustments72643106Totalnon-GAAPadjustmentstocostsandexpenses8176201,4723,826Other(income)expense,net,adjustments(142)392284405Totalnon-GAAPadjustmentsbeforeincometaxes6751,0121,7574,231Incometaxeffectofnon-GAAPadjustmentsabove(162)(168)(316)(900)Discreteandrelatedtaxcharges(3)486090100Totalnon-GAAPadjustmentstonetincomeattributabletoGilead$560$905$1,530$3,431_(1)Relatestoamortizationofacquiredintangibles.(2)AdjustmentsincludeintegrationexpensesandcontingentconsiderationfairvalueadjustmentsassociatedwithGileadsrecentacquisitions.(3)RepresentsdiscreteandrelateddeferredtaxchargesorbenefitsprimarilyassociatedwithacquiredintangibleassetsandtransfersofintangibleassetsfromaforeignsubsidiarytoIrelandandtheUnitedStates.August7,202511GILEADSCIENCES,INC.RECONCILIATIONOFGAAPTONON-GAAP2025FULL-YEARGUIDANCE(1)(unaudited)(inmillions,exceptpercentagesandpershareamounts)ProvidedFebruary11,2025UpdatedApril24,2025UpdatedAugust7,2025ProjectedproductgrossmarginGAAPtonon-GAAPreconciliation:GAAPprojectedproductgrossmargin77.0%-78.0w.0%-78.0 x.0quisition-relatedexpenses8.0%8.0%8.0%Non-GAAPprojectedproductgrossmargin85.0%-86.0.0%-86.0.0%ProjectedoperatingincomeGAAPtonon-GAAPreconciliation:GAAPprojectedoperatingincome$10,200-$10,700$10,200-$10,700$10,300-$10,700Acquisition-related,IPR&Dimpairmentandrestructuringexpenses2,5002,5002,700Non-GAAPprojectedoperatingincome$12,700-$13,200$12,700-$13,200$13,000-$13,400ProjectedeffectivetaxrateGAAPtonon-GAAPreconciliation:GAAPprojectedeffectivetaxrate20!%Incometaxeffectofabovenon-GAAPadjustmentsandfairvalueadjustmentsofequitysecurities,anddiscreteandrelatedtaxadjustments(1%)(2%)(2%)Non-GAAPprojectedeffectivetaxrate19%ProjecteddilutedEPSGAAPtonon-GAAPreconciliation:GAAPprojecteddilutedEPS$5.95-$6.35$5.65-$6.05$5.85-$6.15Acquisition-related,IPR&Dimpairmentandrestructuringexpenses,fairvalueadjustmentsofequitysecuritiesanddiscreteandrelatedtaxadjustments1.752.052.10Non-GAAPprojecteddilutedEPS$7.70-$8.10$7.70-$8.10$7.95-$8.25_(1)Ourfull-yearguidanceexcludesthepotentialimpactofany(i)acquisitionsorbusinessdevelopmenttransactionsthathavenotbeenexecuted,(ii)futurefairvalueadjustmentsofequitysecuritiesand(iii)discretetaxchargesorbenefitsassociatedwithchangesintaxrelatedlawsandguidelinesthathavenotbeenenacted,asGileadisunabletoprojectsuchamounts.Thenon-GAAPfull-yearguidanceincludesnon-GAAPadjustmentstoactualcurrentperiodresultsaswellasadjustmentsfortheknownfutureimpactassociatedwitheventsthathavealreadyoccurred,suchasfutureamortizationofourintangibleassetsandthefutureimpactofdiscreteandrelateddeferredtaxchargesorbenefitsprimarilyassociatedwithacquiredintangibleassetsandin-processresearchanddevelopment,transfersofintangibleassetsfromaforeignsubsidiarytoIrelandandtheUnitedStates,andlegalentityrestructurings.August7,202512GILEADSCIENCES,INC.CONDENSEDCONSOLIDATEDBALANCESHEETS(unaudited)June30,December31,(inmillions)20252024AssetsCash,cashequivalentsandmarketabledebtsecurities$7,126$9,991Accountsreceivable,net4,781 4,420Inventories(1)3,913 3,589Property,plantandequipment,net5,459 5,414Intangibleassets,net18,566 19,948Goodwill8,314 8,314Otherassets7,563 7,319Totalassets$55,721$58,995LiabilitiesandStockholdersEquityCurrentliabilities$11,189$12,004Long-termliabilities24,942 27,744Stockholdersequity(2)19,590 19,246Totalliabilitiesandstockholdersequity$55,721$58,995_(1)Includescurrentandlong-terminventories,whicharedisclosedseparatelyinthenotestoourfinancialstatementsinForm10-KandForm10-Q.(2)AsofJune30,2025andDecember31,2024,therewere1,242and1,246sharesofcommonstockissuedandoutstanding,respectively.August7,202513GILEADSCIENCES,INC.SELECTEDCASHFLOWINFORMATION(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions)2025202420252024Netcashprovidedbyoperatingactivities$827$1,325$2,584$3,544Netcashusedininvestingactivities(2,116)(307)(2,531)(2,514)Netcashusedinfinancingactivities(1,566)(2,953)(4,993)(4,314)Effectofexchangeratechangesoncashandcashequivalents73(11)92(29)Netchangeincashandcashequivalents(2,782)(1,947)(4,848)(3,313)Cashandcashequivalentsatbeginningofperiod7,926 4,718 9,991 6,085Cashandcashequivalentsatendofperiod$5,144$2,772$5,144$2,772ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions)2025202420252024Netcashprovidedbyoperatingactivities$827$1,325$2,584$3,544Purchasesofproperty,plantandequipment(107)(130)(211)(235)Freecashflow(1)$720$1,195$2,373$3,309_(1)Freecashflowisanon-GAAPliquiditymeasure.PleaserefertoourdisclosuresintheNon-GAAPFinancialInformationsectionabove.August7,202514GILEADSCIENCES,INC.PRODUCTSALESSUMMARY(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions)2025202420252024HIVBiktarvyU.S.$2,799$2,585$5,272$4,900BiktarvyEurope429 370 804 735BiktarvyRestofWorld302 277 603 5423,530 3,232 6,679 6,177DescovyU.S.601 434 1,139 805DescovyEurope24 25 45 51DescovyRestofWorld28 26 55 55653 485 1,239 911GenvoyaU.S.322 372 627 704GenvoyaEurope40 45 79 95GenvoyaRestofWorld16 23 35 44377 440 741 843OdefseyU.S.221 233 436 457OdefseyEurope66 72 123 148OdefseyRestofWorld11 10 20 21298 315 579 626Symtuza-Revenueshare(1)U.S.88 131 170 236Symtuza-Revenueshare(1)Europe33 34 62 67Symtuza-Revenueshare(1)RestofWorld3 3 6 6124 168 238 309OtherHIV(2)U.S.65 65 115 125OtherHIV(2)Europe33 25 63 70OtherHIV(2)RestofWorld9 15 19 27107 105 198 222TotalHIVU.S.4,096 3,821 7,760 7,226TotalHIVEurope624 571 1,177 1,167TotalHIVRestofWorld368 353 738 6955,088 4,745 9,675 9,088LiverDiseaseSofosbuvir/Velpatasvir(3)U.S.184 267 351 515Sofosbuvir/Velpatasvir(3)Europe81 84 161 163Sofosbuvir/Velpatasvir(3)RestofWorld76 126 175 203342 476 687 881VemlidyU.S.122 117 222 212VemlidyEurope13 11 24 22VemlidyRestofWorld117 115 257 233252 243 504 467OtherLiverDisease(4)U.S.106 47 175 89OtherLiverDisease(4)Europe76 47 152 94OtherLiverDisease(4)RestofWorld19 19 35 38201 113 362 221TotalLiverDiseaseU.S.413 431 748 816TotalLiverDiseaseEurope170 142 338 279TotalLiverDiseaseRestofWorld211 259 467 474795 832 1,553 1,569VekluryVekluryU.S.51 76 250 391VekluryEurope19 53 41 123VekluryRestofWorld50 85 132 255121 214 423 769August7,202515GILEADSCIENCES,INC.PRODUCTSALESSUMMARY-(Continued)(unaudited)ThreeMonthsEndedSixMonthsEndedJune30,June30,(inmillions)2025202420252024OncologyCellTherapyTecartusU.S.41 63 82 118TecartusEurope41 37 72 73TecartusRestofWorld9 7 17 1692 107 171 207YescartaU.S.162 186 321 357YescartaEurope154 169 304 327YescartaRestofWorld77 58 154 110393 414 779 794TotalCellTherapyU.S.203 250 403 475TotalCellTherapyEurope196 206 376 400TotalCellTherapyRestofWorld86 66 171 126485 521 949 1,001TrodelvyTrodelvyU.S.224 224 405 429TrodelvyEurope96 69 171 137TrodelvyRestofWorld44 26 81 62364 320 657 628TotalOncologyU.S.427 474 808 904TotalOncologyEurope291 275 547 537TotalOncologyRestofWorld131 92 252 188849 841 1,606 1,629OtherAmBisomeU.S.7 17 13 31AmBisomeEurope65 69 132 139AmBisomeRestofWorld56 65 123 124129 151 268 294Other(5)U.S.44 98 91 156Other(5)Europe8 8 16 18Other(5)RestofWorld21 24 35 3673 130 143 209TotalOtherU.S.52 115 104 188TotalOtherEurope73 77 149 156TotalOtherRestofWorld77 88 158 160202 280 410 504TotalproductsalesU.S.5,038 4,916 9,669 9,525TotalproductsalesEurope1,178 1,118 2,251 2,262TotalproductsalesRestofWorld838 878 1,747 1,772$7,054$6,912$13,668$13,559_(1)RepresentsGileadsrevenuefromcobicistat(“C”),FTCandTAFinSymtuza(darunavir/C/FTC/TAF),afixeddosecombinationproductcommercializedbyJanssenSciencesIrelandUnlimitedCompany.(2)IncludesAtripla,Complera/Eviplera,Emtriva,Sunlenca,Stribild,Truvada,TybostandYeztugo.(3)IncludesEpclusaandtheauthorizedgenericversionofEpclusasoldbyGileadsseparatesubsidiary,AseguaTherapeuticsLLC(“Asegua”).(4)Includesledipasvir/sofosbuvir(HarvoniandtheauthorizedgenericversionofHarvonisoldbyAsegua),Hepcludex,Hepsera,Livdelzi/Lyvdelzi,Sovaldi,VireadandVosevi.(5)IncludesCayston,Jyseleca,LetairisandZydelig.August7,202516
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REFINITIV STREETEVENTSEDITED TRANSCRIPTPFE.N-Q2 2025 Pfizer Inc Earnings CallEVENT DATE/TIME:AUGUST 05,2025/2:00PM GMTOVERVIEW:Company SummaryREFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.CORPORATE PARTICIPANTSFrancesca DeMartino Pfizer Inc-Chief Investor Relations Officer,Senior Vice PresidentAlbert Bourla Pfizer Inc-Chairman of the Board,Chief Executive OfficerDavid Denton Pfizer Inc-Executive Vice President,Chief Financial OfficerAamir Malik Pfizer Inc-Executive Vice President,Chief US Commercial OfficerChris Boshoff Pfizer Inc-Chief Scientific Officer,President-Research&DevelopmentAlexandre De Germay Pfizer Inc-Executive Vice President,Chief International Commercial OfficerAndrew Baum Pfizer Inc-Executive Vice President,Chief Strategy and Innovation OfficerCONFERENCE CALL PARTICIPANTSTrung Huynh UBS Equities-AnalystChristopher Schott JPMorgan-AnalystAlexandria Hammond Wolfe Research LLC-AnalystMohit Bansal Wells Fargo Securities LLC-AnalystCourtney Breen Bernstein Research-AnalystDavid Risinger Leerink Partners-AnalystKerry Holford Berenberg-AnalystEvan Seigerman BMO Capital Markets-AnalystCarter Gould Cantor Fitzgerald-AnalystAsad Haider Goldman Sachs-AnalystUmer Raffat Evercore ISI-AnalystRajesh Kumar HSBC-AnalystTimothy Anderson BofA Global Research-AnalystSteve Scala TD Cowen-AnalystTerence Flynn Morgan Stanley-AnalystPRESENTATIONOperatorGood day,everyone,and welcome to Pfizers second-quarter 2025 earnings conference call.Todays call is being recorded.At this time,I wouldlike to turn the call over to Francesca DeMartino,Chief Investor Relations Officer and Senior Vice President.Please go ahead,maam.Francesca DeMartino-Pfizer Inc-Chief Investor Relations Officer,Senior Vice PresidentGood morning and welcome to Pfizers earnings call.Im Francesca DeMartino,Chief Investor Relations Officer.On behalf of the Pfizer team,thankyou for joining us.This call is being made available via audio webcast at P.Earlier this morning,we released our results for the secondquarter of 2025 via a press release that is available on our website at P.2REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallIm joined today by Dr.Albert Bourla,our Chairman and CEO;and Dave Denton,our CFO.Albert and Dave have some prepared remarks,and wewill then 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 P.Forward-looking statements on the call are subject to substantial risks and uncertaintiesthat speak only as of the calls 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-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you Francesca.Good morning,everyone.Thank you for joining our call.Our business is performing well,and Im pleased with the progresswe achieved in the second quarter.We advanced and strengthened our R&D pipeline,we worked to maximize the value of our commercial portfolio,and made further strides to expand our markets.We continue to be actively engaged with policymakers as we navigate the complicated and rapidlyevolving geopolitical environment,while also remaining focused on advancing our business.With our strong year-to-date performance,we are raising our Adjusted diluted EPS guidance for full-year 2025 and remain committed to ourdividend.Our programs to expand margins through focused technology and simplification are working very well.We are driving productivity gainsby leveraging technologies such as AI and automation.And we are also realizing the benefit of continued streamlining across our company.Webelieve Pfizer is well-positioned to continue creating meaningful value for patients and our shareholders.Our top strategic priority this year is,of course,improving R&D productivity.Im proud of the outcomes we are driving and the meaningful milestonesachieved during the quarter.Looking ahead,we believe key programs in our R&D portfolio offer significant opportunities to help address substantialpatient need and drive Pfizers growth in the coming years.I will mention some highlights.ELREXFIO is a medicine that is performing very well with rapid growth and encouraging progress in claiming leadingclass share in new markets such as Japan,United Kingdom,and Spain.The clinical data in ELREXFIOs initial heavily treated triple class exposedmultiple myeloma indication,continue to be encouraging with medium overall survival of greater than two years,which is more than double thehistorical median overall survival in this population.Moreover,the majority of responding patients are maintaining their response at 30 months,and ELREXFIO has the potential to be a leading standardof care with a differentiated clinical profile.It is a convenient,subcutaneous,fixed dosing regimen,the only one,that now includes aonce-every-four-week option for select days.New data presented at the American Society of Clinical Oncology Annual Meeting in newly diagnosed patients demonstrate ELREXFIOs potentialto move to earlier multiple myeloma treatment settings.This data from part one of the MagnetisMM-6 study saw a confirmed response rate greaterthan 97%.And the manageable safety profile in combination with daratumumab and lenalidomide.The randomized portion of this Phase 3 studyis now enrolling very well.By executing on MagnetisMM-6 and ELREXFIOs other ongoing Phase 3 trials,we aim to achieve label expansion,that,if approved,would collectivelyincrease the addressable population,approximately fivefold,in the growing multiple myeloma market,expected to reach approximately$44 billionby year 27.Sigvotatug vedotin or SV is our first-in-class integrin-beta 6 ADC that could be a driver of growth later this decade.We are executing a robustdevelopment program with this investigational compound in non-small cell lung cancer.This includes our fully enrolled Phase 3 of SV monotherapyversus docetaxel in previously treated non-squamous patients that we expect data from next year.3REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallIn the second line-plus population,we have observed a durable 31%confirmed response rate which is favorable versus historical data with thedocetaxel monotherapy.We are also enrolling a Phase 3 study of SV in combination with a PD-1 checkpoint inhibitor in first line non-small cell lungcancer with high PD-L1 expression based on encouraging Phase 1 data for this combination recently presented at ASCO.These results saw a 57%response rate and greater than 90%disease control,including responses in outpatients in the tumor proportion score greater than 50%subgroupwhich compares favorably to historical anti-PD-1 monotherapy.These results support an ambition to change standards of care to conventionalchemotherapy-sparing regimens by leveraging the potential synergy between vedotin ADCs and PD-1 checkpoint inhibitors.With our ongoing and planned trials in non-small cell lung cancer,SV has the potential to impact large patient population with the non-small celllung cancer market expected to reach over$60 billion for year 2030.Our strategy is intended to deliver a first approval in previously-treated patientsbefore moving into the first line setting,which is non-small cell lung cancer and includes more than half a million global patients.In a hematology,we continue to promote the differentiated profile of HYMPAVZI.In the quarter,we start positive topline data from the Phase 3bstudy evaluating HYMPAVZI for adults and adolescents with hemophilia A or B.The studies cohort of patients with inhibitors met its primary point,demonstrating a statistically significant and clinically meaningful 93%reduction in annualized bleeding rate,compared to on-demand treatmentin patients 12 years or older which compares favorably to recent approved products for hemophilia A and hemophilia B.These results further strengthen HYMPAVZIs differentiated profile as the first once-weekly fixed dose subcutaneous treatment for hemophilia Aor B,administered in a convenient prefilled auto-injector pen.They also support the potential to expand its label to patients with hemophilia whodevelop inhibitors to factor replacement as we continue to execute on its launch in the previously-approved non-inhibitor population.We have seen considerable quarter-over-quarter growth particularly in the hemophilia B market where subcutaneous treatments are only recentlyavailable.And following EU and Japan approvals at the end of last year,we are seeking reimbursement on pursuing early access pathways in otherinternational markets as we grow our presence in the hemophilia market projected to reach nearly$10 billion for year 2030.Moving to our vaccine portfolio.We are enthusiastic about our potential to deliver the first approved vaccine for C.difficile infection.Our secondgeneration investigational vaccine candidate builds upon encouraging results from the prior Phase 3 global trial of our first generation candidate.This trial has demonstrated 100ficacy against medically attended C.diff infection despite not achieving the studys primary endpoint.With our second generation C.diff vaccine formulation,we have the potential to simplify the dosing schedule from three to two doses(correctedby company after the call).This candidate,now in Phase 2,increased the strength of the immune response fourfold,compared to the first-generationvaccine.Based on this newly announced Phase 2 data,we are preparing for a Phase 3 start before the end of this year.We will incorporate learnings fromthe previous CLOVER study to develop new primary endpoints focused on the prevention of severe disease outcomes rather than primary infection.If approved,the vaccine could significantly reduce the healthcare burden of the nearly 500,000 annual C.diff infections and approximately 30,000annual deaths in the US alone.In another one of our Phase 3 products,we finished dosing the last phase in our study of a vaccine candidate for Lyme disease.If successful,weexpect to submit for approval next year.We also continue to strengthen our portfolio by harnessing external innovation through strategic business development.The recent closing ofour Global ex-China in-licensing agreement with 3SBio grants us exclusive rights to develop,manufacture,and commercialize SSGJ-707,a bispecificantibody.Targeting PD-1 and VEGF,it has the potential to deliver breakthroughs for patients in the next way in PD-1 immunotherapy which is anestablished$55 billion market.With comparing monotherapy data in advanced non-small cell lung cancer presented recently at ASCO,we review this promising cancerimmunotherapy candidate as a seamless fit within Pfizers oncology strategy.Given our deep experience in the development of antibody therapeuticsand our differentiated industry-leading portfolio of ADCs,we intend to serve the data later this year for our plans for a Phase 3 program.With4REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallPfizers established presence and global reach,we believe SSGJ-707 has the potential to become a backbone therapy for multiple solid tumor typeswhere the PD-1/VEGF mechanism could have significant impact.Across our pipeline,we continue to sharpen our focus on programs where the strength of our capabilities give us the greatest opportunities toaddress substantial patient need.We look forward to sharing future updates about our programs.Now lets move to commercial.Our commercial strategy is unlocking higher productivity and performance across both,our US and internationaldivisions.With several of our established brands,we are pleased with our continued market leadership and growth.We delivered another solid quarter for our Vyndaqel family with 21%year-over-year operational growth.These products are the foundation of carefor patients with a serious heart condition,ATTR cardiomyopathy,and we continue to see strong progress in diagnosing patients and providingbroad access.While we continue to closely monitor the competitive impact of new entrants,we believe the Vyndaqel family is differentiated witha strong clinical profile contributed to continued volume growth.With Eliquis,we are the clear leader with robust demand in a growing anticoagulant market.Our international commercial teams are driving highergrowth versus the market in our key countries with effective engagement with health care professionals to reinforce the favorable profile of thesemedicines.In the US,the BMS-Pfizer alliance recently announced a new direct to patient option for purchasing Eliquis via the alliances patientresource Eliquis 360 some more.This option offers an insured,under-insured or self-pay patients an opportunity to significantly lower out-of-pocketcosts for Eliquis.Among some of our recently launched acquired brands,we are seeing strong underlying demand in competitive classes as wework to build expanded access and greater awareness and loyalty,of course,among health care professionals.With NURTEC,we continue driving strong commercial execution.We are pleased with the performance of new consumer campaigns and greaterprecision and effectiveness in serving compelling clinical data with health care processor.In the US,we achieved strong growth in total prescriptionsand with 47%market share maintain leadership in the oral CGRP class,offset by pressures on net revenues from the impact of the IRA medical PartD redesign and the 340B programInternationally,we are achieving strong performance in several key markets where we already have access and are encouraged by the potentialto unlock additional opportunities by continuing to expand thePadcev,a new-a key product in our oncology portfolio is demonstrating strong performance and to see multiple avenues for future growth.OurADC for the treatment of adult patients with locally advanced metastatic urothelial cancer achieved high year-over-year operational growth of38%in the quarter with growing demand and the onetime favorable impact from to a wholesale distribution model for products.Padcev incombination with pembrolizumab has secured market share greater than 50%in first-line LA metastatic UC and is the standard of care first-linetreatment.Additionally,we continue to anticipate Phase 3 readouts for PCV in muscle invasive bladder cancer in two ongoing studies.If successful andapproved,we expect a significant expanded opportunity to treat patients with bladder cancer focused on the approximately 28,000 in the US withMIBC,approximately 80%of whom undergo cystectomy.Cibinqo had strong 46%year-over-year operational growth with the quarter,driven by higher demand in the US and growth in key internationalmarkets where we have decided to focus.We believe there is additional market opportunities for Cibinqo responding to the need among patientswith atopic dermatitis.We are seeing the clear impact of recent positive data released for several of our oncology products.It is contributing tostrong growth in helping to establish these products as standard of care.LORBRENA achieved 48%year-over-year operational growth in the quarter,and we expect continued strength through 2025.It has a compellingefficacy profile supported by the CROWN study where the median progression free survival was not reached after five years of follow-up.LORBRENAis emerging as a standard of care for patients with first-line ALK-positive metastatic non-small cell lung cancer.5REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallWe saw continued momentum with Braftovi and Mektovi with 23%year-over-year operational growth in the second quarter.Results from thePhase 3 BREAKWATER trial saw the Braftovi combination regimen doubled median overall survival versus standard of care for treatment-naivepatients with metastatic colorectal cancer with BRAF V600E-mutation.This represents a significant advancement of the approximately 4,000 patientsdiagnosed annually in the US with metastatic colorectal cancer with this mutation.They face a more than twofold greater mortality risk comparedto patients with no BRAF mutation.XTANDI contributed strong 14%operational growth during this quarter.Demand is growing for patients with castration-sensitive prostate cancerand it is the top prescribed branded antigen receptor pathway inhibitor.With the presentation long-term overall survival data from the ARCHEStrial,XTANDI is now the first and only androgen receptor pathway inhibitor to demonstrate an overall survival benefit at five years in men withmetastatic hormone-sensitive prostate cancer.We also recently served positive top line results from the Phase 3 EMBARK study,making XTANDIthe first and only androgen receptor inhibitor-based regimen to demonstrate overall survival benefit in non-metastatic hormone-sensitive prostatecancer with high-risk biochemical recurrence.This contributed to demand growth for XTANDI and we achieved 27%share in new-to-brandprescription.This positive indicate how we are continuing to invest and focus in areas where we have leadership and expertise,contributed to ongoing progresswith our oncology portfolio.The strong performance in the US and the international divisions show why we remain confident in the commercial strategy we refined more thana year ago.In the quarter,for example,the key market and brand combination,we prioritized in our international divisions are outperforming withstrong mid-to high single-digit growth across all regions.We will continue to advance this commercial strategy and expect to drive further progressthrough precision targeting engagement with patients and health care profession.With that,Ill turn it over to Dave,who will walk through our additional strategic priorities and progress with expanding margins and optimizingcapital allocation.Dave?David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerThank you,Albert,and good morning.To begin this morning,let me emphasize that our solid financial results are a clear reflection of our disciplinedexecution and strategic priorities.We remain focused on improving patient outcomes and meeting our financial goals while managing thecomplexities of the external environment.Our cost improvement initiatives have contributed to greater organizational efficiencies as demonstrated by our robust operating margins achievedthis quarter.Going forward,we expect to improve our cash flow,reduce our debt leverage over time and increased flexibility across our threecapital allocation pillars.Our focus remains on creating long-term shareholder value.We will continue to invest in our business for the long term while prudently returningcapital to our shareholders.Now let me start with our second quarter results,then Ill touch on our capital allocation priorities and then move to our cost improvement initiatives.Ill finish with a few comments on the macro environment as well as our 2025 guidance.For the second quarter 2025,we recorded revenues of$14.7 billion,an increase of 10%operationally.This increase was largely due to overall growth,both in the US and internationally.Partially offsetting the increase was an$825 million year-over-year unfavorable impact of higher manufacturer discounts resulting from the IRAMedicare Part D redesign,which took effect in the first quarter of 25,and overall is largely in line with our expectations.On the bottom line,second quarter 2025 reported diluted earnings per share was$0.51,and Adjusted diluted earnings per share was$0.78,aheadof our expectations,primarily due to strong top line performance and our cost management execution.Our results demonstrate the effectivenessof our refined commercial strategy.We remain committed to prioritizing key products and markets,optimizing the global allocation of ourcommercial field resources and concentrating our marketing efforts on high priority areas.6REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallWe saw strong contributions across our product portfolio,primarily driven by the Vyndaqel family,PAXLOVID,and Eliquis,partially offset by declinesin IBRANCE.Also,Id like to highlight a significant trend within our portfolio that we expect to fuel the companys top line for the next several years.Year-to-date,Pfizers recently launched and acquired products delivered$4.7 billion in revenue while growing approximately 15%operationallyversus last year.We plan to continue to invest behind these two product groups to drive their future performance and help enable the companyto largely offset our LOEs over the next several years.Adjusted gross margin for the second quarter was approximately 76%,primarily reflecting the product mix within the quarter.Looking at ourAdjusted gross margin performance over the last two years,we have largely achieved percentages in the mid to upper 70s when adjusting forCOMIRNATY,which,as you know,has a 50-50 gross profit split with our partner,BioNTech.In addition,we believe the expected$1.5 billion savings from our Phase I of our manufacturing optimization program by the end of 27 will helpbolster gross margins as we transition through the LOE period.Maintaining a strong emphasis on cost management throughout our manufacturingnetwork will continue to be a key priority.Total Adjusted operating expenses were$5.8 billion for the second quarter,an 8cline operationally versus last year.Now looking at thecomponents,Adjusted SI&A expenses decreased 8%operationally,primarily reflecting a decrease in marketing and promotional spend for variousproducts as a result of our focused investments and ongoing productivity improvements.Adjusted R&D expenses decreased 9%operationally,driven primarily by a decline in spending due to pipeline optimization expected to be reinvestedlater this year and into next year.We continue to be disciplined with our operational expense management.Q2 reported diluted earnings per share was$0.51 and our Adjusted diluted earnings per share was$0.78,which benefited from our efficientoperating structure in addition to our effective tax rate primarily driven by a favorable change in jurisdictional mix of earnings.Now let me quickly touch on our capital allocation strategy,which is designed to enhance long-term shareholder value.Our strategy consists ofmaintaining and growing our dividend over time,reinvesting in our business at an appropriate level of financial return and making value-enhancingshare repurchases.In the first half of 2025,we returned$4.9 billion to shareholders via our quarterly dividend and we invested$4.7 billion in internalR&D.As previously mentioned,maintaining our gross leverage at an appropriate level is a key priority towards improving our capacity for businessdevelopment.Our gross leverage at the end of the second quarter was approximately 2.7 times,which we are now setting as our new target,downfrom 3.25 times.During Q2,we announced the licensing agreement with 3SBio,which closed in July of 2025.Our business development capacity is now approximately$13 billion following the 3SBio deal.Lastly,first half 2025 operating cash flows at$1.8 billion was tempered primarily by large expected payments in the second quarter,including anapproximately$2.1 billion TCJA repatriate in tax payment and our payment to BioNTech for our gross profit split.We expect to see improved cashflows in the back half of this year.Overall,we are focused on maintaining leverage at or below our new target to support a balanced allocation ofcapital between reinvestment and direct return to our shareholders.We continue to be disciplined with our operational expense management,progressing multiple improvement programs as we remain focused ondriving operating margin expansion over the coming years.We expect to begin realizing initial savings from the Phase 1 manufacturing optimizationprogram in the latter part of this year.As part of our goal to return to pre-pandemic operating margin,we remain on track to deliver on our goalof at least$4.5 billion in cumulative net cost savings from our ongoing cost realignment program by the end of this year.As a reminder,in total,we expect approximately$7.7 billion in savings by the end of 27 to drive operating efficiencies,strengthening our businesswith the potential of contributing significantly to our bottom line over the period.Of these savings,approximately$500 million identified in R&Dwill be reinvested in the pipeline,which we expect by the end of 26.7REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallNow with that,let me turn to our full year 25 guidance.The pharmaceutical industry continues to navigate a complex global landscape influencedby rapidly changing proposed trade and tariff policies.Strategies to help mitigate the potential impact on our business in the short term have beenimplemented.And we continue to evaluate opportunities and develop plans,which will help mitigate the potential long-term impact of tariffs onour business and our operations.That said,the companys guidance absorbs the impact of the currently imposed tariffs from China,Canada and Mexico as well as potential pricechanges this year based on the letter received on July 31 from President Trump.Our non-COVID revenues continued to perform very well operationally and ahead of our plan.In addition,our guidance assumes favorable-favorability to revenues due to foreign exchange rates.As a reminder,our plan assumes that a large majority of our COVID revenues are forecastedin both Q3 and Q4.Given this fact,we believe it is prudent to maintain our full year revenue outlook as we enter the second half of the year.Wecontinue to expect full-year 25 revenues to be in the range of$61 billion to$64 billion.In addition,we now expect Adjusted SI&A to be in the range of$13.1 billion to$14.1 billion,Adjusted R&D to be in the range of$10.4 billion to$11.4 billion and our Adjusted effective tax rate of approximately 13%.Now given our strong performance to date as well as our outlook,including a favorable impact on foreign exchange,our more efficient coststructure as well as improvements in our Adjusted effective tax rate,we are raising our full year 25 Adjusted diluted earnings per share guidanceby$0.10.This includes absorbing a$0.20 charge for acquired in-process R&D associated with the upfront payment for the 3SBio transaction.So just to clarify,without the 3SBio deal,we would have raised our Adjusted diluted earnings per share guidance by$0.30.Of this amount,approximately two-thirds is due to our strong operational performance and our outlook.I will also point out that while we are raising our Adjusteddiluted earnings per share guidance,we are partially derisking the expected COVID performance in the second half of this year.As a result,our revised full year 25 Adjusted diluted earnings per share range is now$2.90 to$3.10 a share.In closing,we will continue to focus on maximizing our product portfolios value and driving innovation to strengthen our pipeline.With a strongerbalance sheet,we plan to deploy capital more effectively.We will focus on increasing our R&D productivity by deploying AI and digital capabilities,reinvest appropriately to accelerate high-value R&D programs and pursue new growth opportunities through business development.Additionally,our cost improvement initiatives are beginning to expand operating margins through productivity gains and streamline processes.And so with that,I thank you for your attention.I will now open up for Q&A.QUESTIONS AND ANSWERSOperator(Operator Instructions)Trung Huynh,UBS.Trung Huynh-UBS Equities-AnalystJust there in your prepared remarks,you noted your guidance absorbs the potential price changes this year based on the letter you received fromPresident Trump on July 31.That talks about impacting Medicaid with MFN.Does that imply you think something is going to happen this year?And if so,whats your broad assumption so we can kind of quantify that hit on your revenues and EPS.And then can you perhaps just give us yourstate of the union on the recent developments with MFN and tariffs?8REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallAnd then just on the CDC recommendations for the vaccines.There was a reduced recommendation in May.The payer pullback or broader adultcovered vaccinations.So just how are you sizing the 25 to 26 fall season versus last year?And can you comment on any progress with statemandates or payer negotiations to stabilize that coverage?Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Trung.Let me say I know many people would like to get clarity on the MFN situations of the tariff situations.And Im not in a positionto provide much light not because we arent discussing.Right now,we are in very active discussions.I discussed at the highest levels of thisgovernment.I discussed myself with the President after he sent the letter to me and all the others.We discussed a lot with the Secretary Kennedy.We discusseda lot with Dr.Oz who is responsible for implementing a lot of these things.And I would say only that these discussions are extremely productive.I think we understand where the President comes from,and we are engaging in a productive way to find solutions.But because we are in active discussions,its inappropriate for me to start providing more details because I dont want to say things while werediscussing with them.So I understand that many others may have questions about that.And Im not sure I can give more information than what Ijust told you that we had a letter that says a base of what the President wants.The letter asks a lot from us,but we are engaged in productivediscussions with them.And in general Im happy in the way that they listen to us and the way that we are trying collectively to find solutions,butfrom one hand,will make medicines affordable in the US.On the other hand,well make our industry even more competitive compared to China,which is progressing very rapidly to us.On the tariffs also,I dont have much news to add.We are waiting for the 232 report.And once we have that,we will see how this discussion.Again,on the tariffs,I had good discussions with Secretary Lutnick,with the US Trade representative,with Secretary Bessent,and,of course,with thePresident,with whom we have a special relation through the times of COVID.So thats all I can say.I dont know if-Dave,you want to add something on what is included and how we think about it.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerYes.I just-I would just say that the underlying strength of our business is allowing us to raise our guidance in the back half of the year.And with-to Alberts point,with the work thats going on across the industry,were able to come up with a range of scenarios,and we believe that thoserange of scenarios associated with potential timing of all this would allow us to absorb any impact this year based again on the underlying strengthof our business today and performance today.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerAnd maybe,Aamir,you can comment on the CDC.Aamir Malik-Pfizer Inc-Executive Vice President,Chief US Commercial OfficerYes.So I think your question was largely around COMIRNATY.So Ill mention the quarter and then our expectations for the season.COMIRNATYhad a very strong quarter in Q2,and I think thats driven partially by gross to net capability.Weve just become much more efficient and managinginventory in the marketplace,and we also saw a continued increase in our market share in the quarter.So thats the quarter.Now as it relates to the season,we dont have a crystal ball,but what we are planning for is we anticipate an indication forthe 65-plus population as well as those under 64 with underlying medical conditions.And that largely reflects the dynamic of how people vaccinatein the US today.We also dont anticipate any major changes in coverage by payers for this season.9REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallSo this could have a modest effect on our vaccination rates,but we anticipate having a very strong season.In addition,I think were very ready toexecute against that.We have our supply and distribution capabilities,which are genuinely unmatched.We have a very robust plan for bothphysician as well as patient activation,and we monitor sentiment very closely.Weve not seen dramatic changes in And we also have very strongcontract positions,both in retail and non-retail.So we look forward to the season for the fall.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you.Next question,please.OperatorChris Schott,J.P.Morgan.Christopher Schott-JPMorgan-AnalystAll right,great.Thanks for the questions and congrats on the quarter.Just two for me.First on BD and capital allocation.Just whats driving theslightly lower target leverage for the company going forward?I think you lowered it by about a half turn or so.I just was looking for any color there.And just on the BD approach,is the approach here still to target a couple of smaller deals with that$10 billion to$15 billion of capacity youvepreviously talked about?Or is the thought maybe looking at one larger one.Last really quick one just to slip in with just the recent PD-1 VEGF deal,I know youre going to think about doing combos with some of your ADCs.Will we see the Phase 3 data from those ADCs before you move forward?Or should we start to think about Pfizer starting development of thoseprograms prior to those readouts?Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerChris,as usual excellent questions,but David can take the first two and then I think the Chris can talk about PD-L1.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerSo Chris,yes,weve actually improved our target from a leverage perspective down to 2.7 from 3.25 times.Thats largely because weve improvedour cash generation capability over the last-a little faster than we anticipated post closing of the Seagen acquisition.So were now sitting at 2.7times.We will continue to delever over time.If we were to do a BD transaction,we might tick back up over that 2.7 times,but our objective is tostill get down and continue to delever the balance sheet in the long term.Secondly,yes,most likely,we would attend to do a,Ill say,a smaller deal given the fact that our capacity is in the$13 billion ZIP code at this moment.And so I would expect us more from a smaller perspective from a transaction-Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerIt is 13-David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerIt is 13 only because we have essentially allocated some of the 3SBio transaction funds against our BD target.10REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallAlbert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Dave.And Chris,how do you think about developing the PD-L1 that I know we closed and we very rapidly executed on the plan evenbefore we could close?Chris Boshoff-Pfizer Inc-Chief Scientific Officer,President-Research&DevelopmentThank you very much.As you know,we do have ongoing programs with the ADCs SV PD-L1,and thats all in Phase 3.Were not going to wait forreadout from these studies,and well start earlier with Phase 1/2 combinations this year.In fact,with those ADCs in combination with SSGJ-707.How we look at SSGJ-707,its really to be a potential backbone to replace single-agent PD-1,PD-L1.Its got a unique structure and the preclinical data suggests potential best in class regarding high affinity for PD-1 inhibition and potentially increaseanti-angiogenic activity.Youve seen the overall response rate in the first-line setting of 65%.Were confident in this molecule across the cancerareas or tumor areas that-where we have significant capability,including thoracic GU and GI and well later this year announce a Phase 3 programSSGJ-707.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Chris.I really-my team got me very excited about this molecule and they have presented to me a very aggressive development plan,but they plan to execute starting this year.We will share more news about the plan when we are in the year when we kick off the execution.Nextquestion,please.OperatorAlex Hammond,Wolfe Research.Alexandria Hammond-Wolfe Research LLC-AnalystThanks for taking our question.I guess one on MFN,just given your recently announced DTC patient option for purchasing Eliquis,how should weconsider the applicability of this program to the remainder of your portfolio?Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Alexandria.I think it very much will help.I can tell you that the direct-to-consumer was one of the four things that the letter of PresidentTrump requested from me.From me and everybody else.We think it is a fantastic way to go ahead.So we will work collaboratively to do it.Clearly,Pfizer has a good experience from the Pfizer For All,where we have a direct-to-consumer websitethat has a very,very high traffic.And also now we launched together with our partner,BMS,the Eliquis 360,which exactly does what basically thatPresident Trump is asking us to do.Actually,Im sure youve noticed that he tweeted himself.Here,he retweeted actually my tweet about theEliquis.And also,we have serious discussions in the industry.So I have connected-of course,we had the Board,the CEO that we discussed it and alsomyself and connecting very often individually with all the major companies.And they are all ready to roll up the sleeves and execute somethinglike that.So it remains to be seen.I dont want to speak more,as I said,because we are in active discussions.Next question.11REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallOperatorMohit Bansal,Wells Fargo.Mohit Bansal-Wells Fargo Securities LLC-AnalystGreat,thank you very much for taking my question.Dave,I have a question regarding guidance.It does seem like you had quite a good quarterthis quarter.And-there is FX tailwind as well as operational reasons here.So wondering what is driving the intact guidance or even like not evenlike upping it to the higher end of the range,just would love to know your thought process in setting this guidance at this point.Thank you.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerYes.Thank you.I think as we looked at guidance,as I said,we are essentially raising bottom in by$0.30 and then absorbing the$0.20 charge for3SBio transaction.At the same time,we are looking at our future Q3 and Q4,and were essentially derisking some of that.So this underlying strengthof our business would have us increasing guidance even further from a profit perspective.But we,at this point in time,given the volatility thats potentially ahead of us in COVID,we think its prudent to wait,hold,see how Q3 and Q4 comeabout and then update as appropriate from that perspective.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Dave.OperatorCourtney Breen,Bernstein.Courtney Breen-Bernstein Research-AnalystThank you so much for taking the question.A couple for me.The first is on the efficiency that were seeing kind of in your operating model andparticularly around SG&A.It would be great if youre able to kind of give us some extra context around kind of where you kind of reallocating andinvesting versus where youre able to pull back and kind of some more context and detail and color around that,both within the US and ex US?And then secondarily,youve given us somewhat detail in terms of M&A and the$13 billion range,but can you give us a little bit more insight onthe priorities?I know youve talked about kind of the obesity opportunity or cardiometabolic opportunity and immunology being areas of interest.Can you talkabout kind of whether they still rank near the top or how youre seeing kind of opportunities out there that you might be interested in?Thanks somuch.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Courtney.Lets start with Alexandre to speak about the efficiency in international,and then Aamir can chime in on the USAlexandre De Germay-Pfizer Inc-Executive Vice President,Chief International Commercial OfficerThanks for the questions.You remember about 18 months ago,when we started this journey at the International division,we said we will pick ourgrowth driver,both from an in-line standpoint and the new product.And that combination will be different country by country based on the12REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings Callenvironment,the potential and the population to treat.Thats what we did.So weve identified in our top 16 markets,those combinations,andthen we invest to win in the sense that we looked at the share of voice that we need and then we reduce our investment everywhere else so thatwe can win in this area.And clearly,the growth that we are seeing coming out of that portfolio of assets where we focus is really remarkable because its not just that wegrew 6%at the international level overall,but its also the quality of the growth.You see that we grow 9%in emerging markets,9%in China,7%in Europe.So its kind of across the geography and its also across the different category area,right?So specialty grew 9%driven by Primary caregrew 4%,6%excluding COVID,driven by Eliquis and our vaccines,and oncology grew 6%driven by and others.So clearly,its really how we reducethe cost around the noncore assets and the non-key country that help us double down on the area where we wanted to grow.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,Alexandre.Aamir?Aamir Malik-Pfizer Inc-Executive Vice President,Chief US Commercial OfficerCourtney,Ill give you a couple of different examples.When we implemented our new commercial model at the beginning of last year,we put inplace a few fundamentals.One was having everything in one place and the benefit of scale.So for instance,we consolidated to a single agencypartner,and that drove major efficiencies across the business.Second thing is we undertook a major resource reallocation exercise,both in termsof the products where were investing as well as the channels that were investing into.And thirdly,weve just embraced technology and the way that technology can drive efficiency across every aspect of our consumer campaigns,our physician targeting and also Albert referred to our use of Pfizer Pflash and investment in the Pfizer brand,which,for instance,in the categorieswhere weve deployed that,that model has resulted in about a 20crease in the cost per new NBRx.So these are just examples of how weredriving efficiency across the commercial business.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerAnd it is-I think for me,what really pleased me on is that we are able to reduce our cost,and at the same time,continue growing the top line,which is the key here.And that Pfizer was always good in commercial.I do think that we lost a little bit our way during the COVID because thepriorities you can understand,where 100votion of the whole company to do something like that.But Im very proud and pleased that we gotup to our feet,and we now have developed a commercial machine,but it is really honoring the Pfizer tradition and taking it to the next level.AndI will finish with some questions from the M&A.You asked what would be the range in terms of priorities.And in terms of dollars,Dave talked to you.Clearly,with those dollars probably will bein fewer smaller transactions rather than one transaction all the remaining capital allocation.Clearly will be in the four areas that we are now active,which is the oncology,the vaccines,the internal medicine with cardiometabolic and obesity and with the I&I.On obesity,which is your specificquestion,clearly,we have interest in this area because this is an area that it is very big.Science is breaking.A lot of new things are coming up.And we have tremendous development capabilities in primary care type of business,andwe have also tremendous commercial opportunities.And by the way,there is plenty of offering right now.I mean in China,China is booming interms of how many opportunities we have-our Chief Strategy Officer Andrew Baum that is responsible for BD.He just came back from week long trip to China,and the opportunities are really,really very big.So also,there are here opportunities in the US.Sothere is a good substrate that we can source.We will be very disciplined with our company.We will not overpay.We will pay the real value thatthe asset presents.With that,please go to the next question.13REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallOperatorDave Risinger,Leerink.David Risinger-Leerink Partners-AnalystThanks very much.Yes.So Albert,thank you for helping lead discussions with the Administration to ensure the future success of US biopharmaceuticalinnovation.Since you briefly mentioned competition from China,has Pfizer been helping the Administration understand the very strong supportthat the Chinese government provides to local biotech companies based in China?I asked the question given significant pressures on biotechcompanies in the United States.Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you,David.Also thank you for your kind words.I do.And Im very vocal and I speak at all levels and not only in the Administration,but alsoin the Senate in the house.This is something that unites,I would say,one of the very few things that unites both Democrats and Republicans istheir concern about Chinas emerging superiority in several technology areas,but where it is very impressive it is in the biotech.And I very clearly indicate that this is happening,it is real.Ill give you just some examples.In May,for the first time,Axios reported on the clinicalstudies in the world right now,China has the leading share-surpassed the US.I did research myself on publications that are happening fromChinese scientists right now.And in CRISPR,for example,just to give one area,42%of the global publications coming from China.Actually,in structural biology,which is always was their forte,62me from China.And to end up,they are not doing-they are not stealingpatents,theyre actually they are-they have filed more patents than US this year.And so they are protecting well intellectual property and theyare enhancing access to their local markets,and they are giving tremendous support,monetize support to their biotechnical ecosystem,whichencourages a lot of private money going there.I explained all of that to the Administration.And I think they listen,and thats why I said before,weall look to find ways that from one hand,affordability and access of the American patients.On the other hand,to the crown jewel,which is the biotech industry,needs to be supported by the government,by the Congress so that we can-there is only so much you can do to slow down China.You wont slow them down.They are very good.What we can do is to focus to be betterthan them,and that should be our goal.With that,next question.OperatorKerry Holford,Berenberg.Kerry Holford-Berenberg-AnalystThank you,a couple of questions for me,please.Firstly,looking at ADCETRIS to Q2 performance was a little weaker than anticipated.I understandthese drugs are perhaps facing increased competitive pressures,well be interested to your strategy for reinvigorating that growth of those assetsex US.And then secondly,a question on the guidance,specifically tax and if I missed this earlier.But Dave,what has changed with regard to thetax outlook for this year?And how sustainable is this underlying 13%tax rate going forward?Thank you.14REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallAlbert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerDave,do you want to start with that?And then Aamir can-David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerYes.Just on the tax side,there were some onetime discrete items that allowed us to improve our tax position this year.I would expect going forwardwith the new tax regs globally that we would be largely closer to the 15%level from a global tax perspective in the long term.Aamir Malik-Pfizer Inc-Executive Vice President,Chief US Commercial OfficerKerry,thanks for the question.I think your question is largely around the Seagen portfolio on the products.So we feel very good about how weintegrated those products.As an example,we were able to cross-train all of our field forces,and now were seeing the benefit of that come throughin commercial performance.So if I look at Q2 and the entirety of our Seagen commercial portfolio,we grew 15%year-over-year.And that was while managing some of the competitive headwinds that you alluded to on ADCETRIS,which we are starting to see now settle.Inparticular,we feel very good about the growth in Padcev.We have greater than 50%market share in the first line,and we see headroom to continueto expand that share especially in the cisplatinum eligible population where we are very focused.And its also important to note that as part of theSeagen transaction,it was not only the in-line products,but the portfolio that came with it,which continues to perform very well.Thank you.Next question,please.OperatorEvan Seigerman,BMO Capital Markets.Evan Seigerman-BMO Capital Markets-AnalystThank you so much for taking my question.Kind of a follow-up to the prior question.1.5 years into the integration of Seagen,and really aside fromPadcev,what do you believe are the two or three assets that have the potential to really drive a positive IRR for the$42 billion or so that you spent?And kind of a follow-up there is part of the market could SV capture in non-small cell lung cancer,if and when eventually approved?Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerYes.Ill ask Chris to comment.Lets start that there is four main assets.But when we acquired the company,they were around$2 billion,even lessof revenues.They will grow by year 2030 to$10 billion.Now of course,the value was not only on that.The value was mainly in the platform of the ADC that we go together with the intellectual property,the capability,the people and the assets.And I will ask Chris to comment on the most important things that are coming out in the short term,medium-term and long-term process.Chris Boshoff-Pfizer Inc-Chief Scientific Officer,President-Research&DevelopmentThank you very much.So in the short term,said,and the readouts for the muscle invasive bladder cancer studies.As you recall,the current indicationis 18,000 patients,the new indications will be up to 28,000.So this both platinum-eligible and platinum ineligible,and we expect those readoutsin the next six months.And potentially,they could change the standard of care for this population.15REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallThis next wave of studies we started Phase 3 trials in SV,sigvotatug vedotin.The second-line study is now fully recruited.In fact,it recruited muchquicker than we expected.In the second-line space,what weve seen so far in the Phase I study in a late-line population with a 31%overall responserate and medium overall survival,albeit a single-line experience of 16.3 months.So that gives us confidence in SV.Its a payloads and what weve seen with the other studies with vedotin payloads,including with versus this potentially synergistic activity whenwe combine it with an anti-PD-1.So SV plus pembrolizumab has now been combined.As you know,overall,weve seen a response rate ofapproximately 60%.But in those-in the population specifically,thats TPS-high or PD-L1 high expression,all patients so far in the Phase I trial haveresponded.And that obviously is very favorable to what you would expect from pembrolizumab alone.The next molecule PD-L1.Thats it,again,another first-in-class molecule.Were accelerating that into a Phase 3 program for head-and-neck cancer,where weve seen response rate just shy of 60%in the combination with pembrolizumab.And then theres a whole new group of ADCs comingwith one payload,including a follow-up to ADCETRIS,they currently two or three of these molecules showing highly encouraging data in Phase1,and well update you in the future about those.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you.So as I said,we are confident that not only will we recuperate the investment with a good return in the season,but I think its transformingour oncology portfolio and business.Next question please.OperatorCarter Gould,Cantor.Carter Gould-Cantor Fitzgerald-AnalystGood morning.Thanks for taking the question.Im going to go back to the policy side.I guess,Albert,should investors have any expectation arounda comprehensive deal that addresses the present objectives across MFN and tariffs,but also addresses the industrys concerns around enforcingIP protection,compounding,parity,IRA implementation.And then separately,put up a solid quarter year-on-year,but this is sort of the fourthquarter in a row where sequential growth was more muted or meager,is Vyndaqel US growth behind us,and I guess an answer in that can helpframe the push-pulls between price and competition?Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerYes.Let me give a brief answer to the policy.Look,I dont know.We are in very active discussions.You know that the President is impatient,so hewants the results quickly.We also want to come to a resolution quickly because I want to offer a certain to all of us and all of you as much as you can have in this period oftime.Are we going to-are we discussing in addition to all the things that are related MFN and tariffs,also things that are related with PBM reform,with 340B,with the pill penalty,absolutely.And you know that the PBM reforms is universally accepted that this to happen.There was a bipartisanbill and there is a clear indication that the President has spoken so many times about the middleman.Also with the pill penalty.He has spokenabout it and also the Secretary Kennedy spoke about it.And also,we are working on it.And of course,the 340B has become a major,major problem,right?Now the 340B is expected to exceed$62 billionthis year.Its a program that has become bigger than Medicare Medicaid combined.So thats all fraud prices,but all of that is value goes from usout there to,lets say,hospitals and-this value is not passed to the patients because they mark up those products in tremendous amounts,waymore than you see in Part D.And we cant afford that.So we are discussing,were explaining.Its more complicated.Thats going to be because itinvolves hospital.16REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallBut the program is very good for the small hospitals that was intended.This is not about not having 340B.Its about having an abuse in the system.So Aamir,you want to state next question?Aamir Malik-Pfizer Inc-Executive Vice President,Chief US Commercial OfficerIll speak quickly about Vyndaqel in the US,and then well touch on international,too.In the US,yes,we had a very strong quarter.We had 15%year-over-year growth.We maintained momentum in performance versus Q1,and theres a lot thats going on in this market right now.So thatperformance is a function of improving diagnosis as well as improving favorability dynamics.So we continue to lead in the face of two competitors coming into that market,both in terms of total market share,but also importantly,lead interms of first-line treatment-naive patient share.So weve got with TRx momentum and thats influenced the growth.KEYTRUDA is taking somefirst-line share,and its a little too early to tell about the dynamics of well keep a close eye on that for the second half of the year.Now we do expectcontinued TRx volume growth,but there will be GTM pressure on US performance.And thats a function of both the Medicare Part D design but also a result of contracting to maintain access for vedotin,both in Medicare andcommercial,where weve maintained 90cess for the brand.So we do expect those dynamics to impact our sequential growth in the back halfof this year.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerYes.For international,so we have a very strong dynamic.So we have grown 32%for the quarter.But actually,since the beginning of the year,wehave grown our patient treated by 50%.So its clearly the-what I was describing at the beginning in terms of focus on the key assets where wethink we can have an impact.This one is clearly the demonstration of our focus on execution.Moving forward,we think were going to continue to grow on this product for three reasons.First,the WCS rate in international in most of our keymarkets is still significantly below what we have in the US and we normally see in this type of disease.Two,the Access takes a lot of time ininternational.You need to negotiate price and access in every single country,and it took us five years just to get to where we are,and competitionwill have to follow the same time line to get to the type of access that we get.Just to illustrate my point is we just unlock U.K.and Australia at the end of last year.And we just unlocked South Korea at the beginning of thisquarter.So just to give you a sense of it takes time and now we have access,we are unlocking the potential of those patients being in treated.Andthen finally,we think that the profile of our product and the experience of our key centers will help us establish to standard of care that we havedeveloped with these assets.So we are very confident with the potential future growth also.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerYes.And Im very impressed with the performance in the coming international the way that we were not counting on that product before and nowsuddenly we see very big thrive.Were not counting in international and mainly US.Lets go to the next question,please.OperatorAsad Haider,Goldman Sachs.Asad Haider-Goldman Sachs-AnalystGreat.Thanks for taking the question.Albert,just one more,if I may,on the policy front.Just given the comments you just made and then triangulatingthose back to your comments on MFN that its now quantified and reflected into guidance to some extent,maybe just talk about what could cause17REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings Calllarge swings to those expectations from here?Or is your high-level view that we are now getting more granular around the central and potentiallynarrow range of outcomes directionally speaking?Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerI mean our team is all over modeling several scenarios.There is no scenario that we have not assessed.There is no scenario,but we have not filedmitigation plans.And there is no scenario to havent the probability of success.But the truth is that we dont know what will be because all of thatare right now under active discussion.So-and even if I have some ideas where we should increase of happening and where decrease happening,its not appropriate now in the middleof the discussions and negotiations.We dont open the counts,right?So I cant really do that.Thank you.Next question.OperatorUmer Raffat,Evercore.Umer Raffat-Evercore ISI-AnalystHi guys.Thanks for taking my question.So Ill spare the MFN question,but I did want to ask Albert,I feel like some of the points youre making onthis call regarding the China biotech ecosystem could possibly resonate with the Administration.But I guess,how is-and Im not even talkingPfizer specifically,but the industry broadly has been very active with a lot of out-licensing transactions to find the next layer innovation.So I guessis Administration pushing back with sort of balancing those two?And then separately,on your oncology side,I feel like this B6A trial in lung willobviously be very,very important.And I was very intrigued to see that you shrunk the sample size from 670 down to 470,which presumably signals increased confidence.And myquestion is,did you take any interim look to see how the is tracking?Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerLet me take the China one.And then I ask Chris,of course,to comment on the oncology.Look,I mean there is a lot of sensitivity in the and Senatein the house about everything that is happening in time,right?But I have to say the sensitivity is way more on things that we transfer there,technology that we transfer,then vice versa,things that we take from them to develop them and manufacture in the US,for example,our and Idiscussed the Chinese deal that we did with the members of the Congress,many members of the Congress.And I explained that we didnt giveanything.We took their science and the license to develop,we would do it globally,not in China,to manufacturing.We will do it in the US,not in China.And to commercialize it and well do it in the whole world and actually not in China yet because we dont havethe license yet.So I think less sensitivity on this two ways.But dont take me wrong.China is something that is very high in the radar of the politicallife of the US and we need to be careful with that.Now lets go,Chris.Chris Boshoff-Pfizer Inc-Chief Scientific Officer,President-Research&DevelopmentThanks for the question,So usually for studies,we recalculate effect size or study size based on emerging data from ongoing Phase 1/2 trials.Andwe did not unblind and theres no unblinding of ongoing Phase 3 programs.18REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallAlbert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerOkay.Thank you.I knew that you will not say much.So lets go to the next question,please.OperatorRajesh Kumar,HSBC.Rajesh Kumar-HSBC-AnalystHi.Thank you for taking my questions.The first one is on-you said youll absorb the potential impact from the letter this year.Can you confirmthat if there were tariffs,et cetera,you can say the same about the next year as well.I know you dont have a guidance,but in terms of how preparedyou are with inventory,et cetera and the pricing dynamics.Do you think current consensus sort of captures the effect for the next year?The second one is on the balance sheet.Clearly,you are going with a lower financial gearing target and in effect,that gives you a bit more leewayon a lot of things.When you think of capital allocation,do you think you need to add more types of assets in oncology?Or would most of thebalance sheet capacity be deployed in obesity,immunology,other areas that is if you have to deploy capital in oncology or different indicationsor different mechanisms you still need to add,then would you be comfortable going over the 2.7 times leverage?Thank you.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerLets start with Dave.And then we will move to Alexandre.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerYes.So as it relates to future years,26 and 27,no,we cant-were not confirming or discussing the implication of tariffs or MFN on those out years.Once we have definitive information and knowledge will come back and share that with everyone.Secondly,on-just from a BD perspective,eventhough others can comment on this as well,we have lowered our target or improved our target to 2.7 times because we are already at 2.7 times.So its hard to have a target that weve exceeded so dramatically because our business has done so well.And if an opportunity were to come along that made sense for us from a deep BD perspective,obviously,the-we would out-we would outstripthe target to be higher just like we did with Seagen,and we worked to get us back down to 2.7 over time.And maybe to Alberts point earlier,froma BD perspective,were interested across the four areas in which we focus today and well continue to evaluate assets on the market in all of thosefour areas.Andrew Baum-Pfizer Inc-Executive Vice President,Chief Strategy and Innovation OfficerYes,just add to Daves comments.Look,I think every potential licensing deal acquisition is value driven,although there is obviously some valueand diversification.Weve historically been very active through Seagen and more recently,3SBio on oncology.However,as you know,Pfizer has astrong commercial heritage with significant strength in areas such as internal medicine,I&I.And obviously,weve got landmark drugs in thoseareas.So we believe we have a right to will.And if the right opportunity comes up at the right price,you can be sure that were going to pursue it.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you.Next question,please.19REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallOperatorTim Anderson,Bank of America.Timothy Anderson-BofA Global Research-AnalystThank you.I have a question on IRA.So you guys have two drugs where prices are being negotiated in the current year for implementation in 27,thats Ibrance,XTANDI-one fear that at least weve had is that the new administration may press harder per bigger discount versus last year,potentially just to make a point.in general,not just for Pfizer product.So youre in the midst of those negotiations.Any color you can provide suchas how those discussions are lining up with what you expected before those negotiations begin.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerLook,as we said,were in the middle of this negotiation again for the same reason,I can-actually,its not a lot by law to disclose aspects of thethe negotiation.But I would say something.We have two products,as you said,for 27.Both of them are losing patent in 27.So for us,of course,we try to achieve the best,we can in the negotiations of the prices.But the heat on us is very small.The NPV is very small because its really a few months of it-it depends on the product,right?Next question,please.OperatorSteve Scala,TD Cowen.Steve Scala-TD Cowen-AnalystThank you very much,two questions.Two questions.The first one,I apologize,is on MFN.But you have quantified the assumed impact of MFN in2025,but you wont share your estimate.But I assume its a big number,well above$500 million for Q4 alone and maybe several times that,whichimplies a strikingly high number for 2026.And Im just wondering whether you would walk that number down.Second for Dave,you noted the positive underlying operational performance year-to-date.You also noted the positive inflection in FX year-to-date.Curious how the COVID expectations have changed.It seems they must have come down since revenue guidance is flat or unchanged or somethingelse in the business turned in a little bit light?Thank you.David Denton-Pfizer Inc-Executive Vice President,Chief Financial OfficerMaybe on the COVID side,I dont know that our expectations at this moment have changed,but we still have a lot yet to go in Q3 and Q4.So as Ithink about our future projections,were still internally working to achieve our number.But as my guidance reflects,weve now derisked some ofthat delivery in Q3,Q4.So I dont think anything has changed.We just know that COVID by itself because of the nature of that business will alwaysbe a little bit more sensitive and a little bit more fluid and harder to predict quarter-over-quarter.So this is just allowing us to derisk that a bit.And then on the MFN perspective,were not going to comment on those numbers at this point.Thankyou,though.20REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings CallAlbert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerAnd the final question.OperatorTerence Flynn,Morgan Stanley.Terence Flynn-Morgan Stanley-AnalystGreat.Thanks for taking the questions.Great.Maybe just two on the pipeline.Just for atirmociclib,I was wondering if well get an update from thePhase 2 study on PFS potentially at San Antonio later this year?I know youve already committed moving into Phase 3,but I dont think weve seenanything on durability there.And then on LORBRENA,any thoughts about exploring that in the adjuvant setting?Thank you.Chris Boshoff-Pfizer Inc-Chief Scientific Officer,President-Research&DevelopmentThank you for the question.So atirmociclib,youre correct,as we stated,were focusing now on the first-line space and focusing with six for secondline,we remain very confident on all the data weve seen and the study,the first-line trial in ER-positive,HER2 negative breast cancer.The study isrecruiting extremely well.In fact,both times faster than we actually planned or predicted.Weve not disclosed the date when we will show on thesecond line,but well keep you posted on that.For there is no current plan for an adjuvant study.Albert Bourla-Pfizer Inc-Chairman of the Board,Chief Executive OfficerThank you very much.And thank you for your attention.Just I want to say that Im very pleased with the execution of this team in terms of thetargets that we have set.I will describe Pfizer right now as a company with a very strong floor and no ceiling.And we plan to maintain the prudentway of allocating capital,the focus on execution,the relentless focus on our pipeline,productivity and big assets and improving our margins bythe use of technology,focus and simplification of our business process.Thank you very much and enjoy your summer to those that didnt take their vacation,like me.OperatorThis does conclude todays program.Thank you for your participation.You may disconnect at any time.DISCLAIMERRefinitiv reserves the right to make changes to documents,content,or other information on this web site without obligation to notify any person of such changes.In the conference calls upon which Event Transcripts are based,companies may make projections or other forward-looking statements regarding a variety of items.Such forward-looking statements are based uponcurrent expectations and involve risks and uncertainties.Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks,which are morespecifically identified in the companies most recent SEC 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Reserved.16418960-2025-08-05T21:35:48.08721REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.AUGUST 05,2025/2:00PM,PFE.N-Q2 2025 Pfizer Inc Earnings Call
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 29,2025OR TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _COMMISSION FILE NUMBER 1-3619-PFIZER INC.(Exact name of registrant as specified in its charter)Delaware13-5315170(State of Incorporation)(I.R.S.Employer Identification No.)66 Hudson Boulevard East,New York,New York 10001-2192(Address of principal executive offices)(zip code)(212)733-2323(Registrants telephone number including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.05 par valuePFENew York Stock Exchange1.000%Notes due 2027PFE/27New York Stock Exchange2.875%Notes due 2029PFE/29New York Stock Exchange3.250%Notes due 2032PFE/32New York Stock Exchange3.875%Notes due 2037PFE/37ANew York Stock Exchange4.250%Notes due 2045PFE/45New York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90days.YesxNoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).YesxNoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerginggrowth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 ofthe Exchange Act:Large Accelerated filer x Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).YesNoxAt July 30,2025,5,685,550,500 shares of the issuers voting common stock were outstanding.TABLE OF CONTENTSPART I.FINANCIAL INFORMATIONPageItem 1.Financial Statements Condensed Consolidated Statements of Operations5Condensed Consolidated Statements of Comprehensive Income6Condensed Consolidated Balance Sheets7Condensed Consolidated Statements of Equity8Condensed Consolidated Statements of Cash Flows9Notes to Condensed Consolidated Financial Statements10Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations34Item 3.Quantitative and Qualitative Disclosures About Market Risk54Item 4.Controls and Procedures54PART II.OTHER INFORMATION Item 1.Legal Proceedings54Item 1A.Risk Factors54Item 2.Unregistered Sales of Equity Securities and Use of Proceeds54Item 3.Defaults Upon Senior SecuritiesN/AItem 4.Mine Safety DisclosuresN/AItem 5.Other Information54Item 6.Exhibits55Signature55N/A=Not Applicable2DEFINED TERMSUnless the context requires otherwise,references to“Pfizer,”“the Company,”“we,”“us”or“our”in this Form 10-Q(defined below)refer to Pfizer Inc.and itssubsidiaries.Pfizers fiscal quarter-end for subsidiaries operating outside the U.S.is as of and for the three and six months ended May 25,2025 and May 26,2024,andfor U.S.subsidiaries is as of and for the three and six months ended June 29,2025 and June 30,2024.References to“Notes”in this Form 10-Q are to the Notes to theCondensed or Consolidated Financial Statements in this Form 10-Q or in our 2024 Form 10-K.We also have used several other terms in this Form 10-Q,most of whichare explained or defined below:*Indicates calculation not meaningful or results are greater than 100 24 Form 10-KAnnual Report on Form 10-K for the fiscal year ended December 31,2024340B Program340B Drug Pricing Program3SBio3SBio,Inc.and its subsidiaries Shenyang Sunshine Pharmaceutical Co.,Ltd.and 3S Guojian Pharmaceutical(Shanghai)Co.,Ltd.AbbVieAbbVie Inc.AIartificial intelligenceALKanaplastic lymphoma kinaseAlliance revenuesRevenues from alliance agreements under which we co-promote products discovered or developed by other companies or usAstellasAstellas Pharma Inc.,Astellas US LLC and Astellas Pharma US,Inc.ATTR-CMtransthyretin amyloid cardiomyopathyBioNTechBioNTech SEBiopharmaGlobal Biopharmaceuticals BusinessBlackstoneBlackstone Life SciencesBMSBristol-Myers Squibb CompanyBODBoard of DirectorsCDCU.S.Centers for Disease Control and PreventionCMSCenters for Medicare&Medicaid ServicesCODMChief Operating Decision MakerComirnatyUnless otherwise noted,refers to,as applicable,and as authorized or approved,the Pfizer-BioNTech COVID-19 Vaccine;Comirnaty(COVID-19 Vaccine,mRNA)original monovalent formula;the Pfizer-BioNTech COVID-19 Vaccine,Bivalent(Original and OmicronBA.4/BA.5);the Pfizer-BioNTech COVID-19 Vaccine(2023-2024 Formula);Comirnaty(COVID-19 Vaccine,mRNA)2023-2024 Formula;Pfizer-BioNTech COVID-19 Vaccine(2024-2025 Formula);Comirnaty(COVID-19 Vaccine,mRNA)2024-2025 Formula;Comirnaty(COVID-19 Vaccine,mRNA)2025-2026 Formula;Comirnaty Original/Omicron BA.1;Comirnaty Original/Omicron BA.4/BA.5;ComirnatyOmicron XBB.1.5;Comirnaty JN.1 and Comirnaty KP.2.COVID-19novel coronavirus disease of 2019Developed MarketsIncludes,but is not limited to,the following markets:Western Europe,Japan,Central Europe,Canada,Australia,Eastern Europe,Scandinavian countries,South Korea,New Zealand and FinlandEMAEuropean Medicines AgencyEmerging MarketsIncludes,but is not limited to,the following markets:Asia(excluding Japan and South Korea),Latin America,Eastern Europe(excluding theBalkans),Africa,the Middle East and TurkeyEPSearnings per shareEUEuropean UnionEUAemergency use authorizationExchange ActSecurities Exchange Act of 1934,as amendedFASBFinancial Accounting Standards BoardFDAU.S.Food and Drug AdministrationForm 10-QThis Quarterly Report on Form 10-Q for the quarterly period ended June 29,2025GAAPU.S.Generally Accepted Accounting PrinciplesGSKGSK plcHaleonHaleon plcHIPAAHealth Insurance Portability and Accountability Act of 1996HospiraHospira,Inc.HRRhomologous recombination repairIPR&Din-process research and developmentIRAInflation Reduction Act of 2022IRSU.S.Internal Revenue ServiceJVjoint ventureKingKing Pharmaceuticals LLC(formerly King Pharmaceuticals,Inc.)mCRCmetastatic colorectal cancermCRPCmetastatic castration-resistant prostate cancermCSPCmetastatic castration-sensitive prostate cancerMD&AManagements Discussion and Analysis of Financial Condition and Results of Operations(a)MDLMulti-District Litigation3Medicare Part Ba medical insurance plan that helps cover medically necessary services,outpatient care,and preventative services for people with MedicareMedicare Part Da prescription drug coverage program for people with MedicareMeridianMeridian Medical Technologies,Inc.MoodysMoodys Ratings(formerly Moodys Investors Service)mRNAmessenger ribonucleic acidNDANew Drug ApplicationnmCRPCnon-metastatic castration-resistant prostate cancernmCSPCnon-metastatic castration-sensitive prostate cancerNSCLCnon-small cell lung cancerOBBBAOne Big Beautiful Bill ActODToral disintegrating tabletOnoOno Pharmaceutical Co.,Ltd.OTCover-the-counterPaxlovidan oral COVID-19 treatment(nirmatrelvir tablets and ritonavir tablets)PC1Pfizer CentreOnePharmaciaPharmacia LLC(formerly Pharmacia Corporation)Pierre FabrePierre Fabre Medicament SASPNIFPfizer Netherlands International Finance B.V.(a wholly-owned finance subsidiary of Pfizer)Prevnar familyIncludes Prevnar 20/Apexxnar(pediatric and adult)and Prevnar 13/Prevenar 13(pediatric and adult)PsApsoriatic arthritisQTDQuarter-to-date or three months endedRArheumatoid arthritisR&Dresearch and developmentRSVrespiratory syncytial virusS&PS&P Global(formerly Standard&Poors)SeagenSeagen Inc.and its subsidiariesSECU.S.Securities and Exchange CommissionSI&ASelling,informational and administrative expensesTakedaTakeda Pharmaceutical Company LimitedUCulcerative colitisU.K.United KingdomU.S.United StatesViiVViiV Healthcare LimitedVyndaqel familyIncludes Vyndaqel,Vyndamax and VynmacYTDYear-to-date or six months endedCertain uses of Paxlovid and COVID-19 vaccines from BioNTech and Pfizer have not been approved or licensed by the FDA.Paxlovid has been authorized for emergency use by the FDA under anEUA for the treatment of mild-to-moderate COVID-19 in pediatric patients(12 years of age and older weighing at least 40 kg)who are at high risk for progression to severe COVID-19,includinghospitalization or death.Emergency uses of COVID-19 vaccines from Pfizer and BioNTech,including Pfizer-BioNTech COVID-19 Vaccine(2024-2025 Formula),have been authorized foremergency use by the FDA under an EUA to prevent COVID-19 in individuals aged 6 months of age and older.The emergency uses are only authorized for the duration of the declaration thatcircumstances exist justifying the authorization of emergency use of the medical product during the COVID-19 pandemic under Section 564(b)(1)of the U.S.Federal Food,Drug and CosmeticsAct,unless the declaration is terminated or authorization revoked sooner.Please see the EUA Fact Sheets at and www.cvdvaccine-.This Form 10-Q includes discussion of certain clinical studies relating to various in-line products and/or product candidates.These studies typically are part ofa larger body of clinical data relating to such products or product candidates,and the discussion herein should be considered in the context of the larger body ofdata.In addition,clinical trial data are subject to differing interpretations,and,even when we view data as sufficient to support the safety and/or efficacy of aproduct candidate or a new indication for an in-line product,regulatory authorities may not share our views and may require additional data or may denyapproval altogether.Some amounts in this Form 10-Q may not add due to rounding.All percentages have been calculated using unrounded amounts.All trademarks mentioned arethe property of their owners.The information contained on our website,our Facebook,Instagram,YouTube and LinkedIn pages or our X(formerly known as Twitter)accounts,or any third-party website,is not incorporated by reference into this Form 10-Q.Certain of the products and product candidates discussed in this Form 10-Q are being co-researched,co-developed and/or co-promoted in collaboration withother companies for which Pfizers rights vary by market or are the subject of agreements pursuant to which Pfizer has commercialization rights in certainmarkets.(a)(a)4PART I.FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTSPFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)Three Months EndedSix Months Ended(MILLIONS,EXCEPT PER SHARE DATA)June 29,2025June 30,2024June 29,2025June 30,2024Revenues:Product revenues$11,954$10,871$23,248$23,314 Alliance revenues2,273 2,067 4,386 4,240 Royalty revenues426 345 734 608 Total revenues14,653 13,283 28,367 28,162 Costs and expenses:Cost of sales3,778 3,300 6,624 6,679 Selling,informational and administrative expenses3,415 3,717 6,446 7,212 Research and development expenses2,482 2,696 4,685 5,189 Acquired in-process research and development expenses2 6 11 6 Amortization of intangible assets1,211 1,307 2,421 2,615 Restructuring charges and certain acquisition-related costs(18)1,254 660 1,356 Other(income)/deductionsnet739 1,107 1,692 1,787 Income/(loss)from continuing operations before provision/(benefit)fortaxes on income/(loss)3,044(103)5,828 3,318 Provision/(benefit)for taxes on income/(loss)141(134)(48)159 Income from continuing operations2,903 31 5,876 3,159 Discontinued operationsnet of tax25 17 25 12 Net income before allocation to noncontrolling interests2,928 48 5,901 3,171 Less:Net income attributable to noncontrolling interests18 7 24 15 Net income attributable to Pfizer Imon shareholders$2,910$41$5,877$3,156 Earnings per common sharebasic:Income from continuing operations attributable to Pfizer Imonshareholders$0.51$0.01$1.03$0.56 Discontinued operationsnet of tax Net income attributable to Pfizer Imon shareholders$0.51$0.01$1.03$0.56 Earnings per common sharediluted:Income from continuing operations attributable to Pfizer Imonshareholders$0.51$0.01$1.03$0.55 Discontinued operationsnet of tax Net income attributable to Pfizer Imon shareholders$0.51$0.01$1.03$0.55 Weighted-average sharesbasic5,685 5,666 5,680 5,662 Weighted-average sharesdiluted5,706 5,696 5,708 5,696 Exclusive of amortization of intangible assets.See Accompanying Notes.(a)(a)(a)(a)5PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(UNAUDITED)Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024Net income before allocation to noncontrolling interests$2,928$48$5,901$3,171 Foreign currency translation adjustments,net127(70)(430)70 Unrealized holding gains/(losses)on derivative financial instruments,net(273)127(395)343 Reclassification adjustments for(gains)/losses included in net income(106)(147)(419)(159)(379)(21)(814)184 Unrealized holding gains/(losses)on available-for-sale securities,net166(25)135(77)Reclassification adjustments for(gains)/losses included in net income(83)100 72 86 82 74 207 9 Reclassification adjustments related to amortization of prior servicecosts and other,net(24)(28)(55)(56)Reclassification adjustments related to curtailments of prior servicecosts and other,net(11)(44)(35)(28)(99)(56)Other comprehensive income/(loss),before tax(204)(44)(1,136)207 Tax provision/(benefit)on other comprehensive income/(loss)(347)22(538)76 Other comprehensive income/(loss)before allocation to noncontrollinginterests$143$(67)$(598)$131 Comprehensive income/(loss)before allocation to noncontrollinginterests$3,071$(19)$5,303$3,302 Less:Comprehensive income/(loss)attributable to noncontrollinginterests18(2)22 1 Comprehensive income/(loss)attributable to Pfizer Inc.$3,053$(17)$5,282$3,302 Reclassified into Other(income)/deductionsnet and Cost of sales.See Note 7E.Reclassified into Other(income)/deductionsnet.See Accompanying Notes.(a)(b)(a)(b)6PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED BALANCE SHEETS(MILLIONS)June 29,2025December 31,2024(Unaudited)AssetsCash and cash equivalents$1,638$1,043 Short-term investments11,611 19,434 Trade accounts receivable,net of allowance for doubtful accounts:2025$439;2024$43812,078 11,463 Inventories11,669 10,851 Current tax assets4,016 3,314 Other current assets2,690 4,253 Total current assets43,703 50,358 Equity-method investments224 217 Long-term investments1,896 2,010 Property,plant and equipment,net of accumulated depreciation:2025$17,268;2024$16,48318,776 18,393 Identifiable intangible assets,net52,702 55,411 Goodwill68,997 68,527 Noncurrent deferred tax assets and other noncurrent tax assets10,343 8,662 Other noncurrent assets9,455 9,817 Total assets$206,095$213,396 Liabilities and Equity Short-term borrowings,including current portion of long-term debt:2025$4,246;2024$3,747$4,295$6,946 Trade accounts payable5,166 5,633 Dividends payable2,445 2,437 Income taxes payable3,675 2,910 Accrued compensation and related items2,447 3,838 Deferred revenues1,123 1,511 Other current liabilities18,575 19,720 Total current liabilities37,726 42,995 Long-term debt57,502 57,405 Pension and postretirement benefit obligations2,130 2,115 Noncurrent deferred tax liabilities2,481 2,122 Other taxes payable3,313 6,112 Other noncurrent liabilities13,931 14,150 Total liabilities117,083 124,899 Commitments and ContingenciesCommon stock481 480 Additional paid-in capital94,053 93,603 Treasury stock(115,010)(114,763)Retained earnings117,609 116,725 Accumulated other comprehensive loss(8,438)(7,842)Total Pfizer Inc.shareholders equity88,695 88,203 Equity attributable to noncontrolling interests317 294 Total equity89,012 88,497 Total liabilities and equity$206,095$213,396 See Accompanying Notes.7PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF EQUITY(UNAUDITED)PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlPaid-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,March 31,20259,620$481$93,856(3,935)$(115,008)$119,590$(8,581)$90,338$299$90,637 Net income/(loss)2,910 2,910 18 2,928 Other comprehensive income/(loss),net of tax143 143 143 Cash dividends declared,per share:$0.86Common stock(4,890)(4,890)(4,890)Share-based payment transactions 197 (2)(1)195 195 Other (1)(1)(1)Balance,June 29,20259,620$481$94,053(3,935)$(115,010)$117,609$(8,438)$88,695$317$89,012 PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlPaid-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,March 31,20249,592$480$92,997(3,925)$(114,755)$121,318$(7,758)$92,282$276$92,558 Net income/(loss)41 41 7 48 Other comprehensive income/(loss),net of tax(58)(58)(9)(67)Cash dividends declared,per share:$0.84Common stock(4,760)(4,760)(4,760)Share-based payment transactions 200 (2)(2)196 196 Other Balance,June 30,20249,592$480$93,197(3,925)$(114,757)$116,596$(7,816)$87,700$275$87,975 PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlPaid-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,January 1,20259,593$480$93,603(3,926)$(114,763)$116,725$(7,842)$88,203$294$88,497 Net income5,877 5,877 24 5,901 Other comprehensive income/(loss),net of tax(596)(596)(3)(598)Cash dividends declared,per share:$0.86Common stock(4,890)(4,890)(4,890)Share-based payment transactions28 1 450(9)(246)(104)101 101 Other 2 2 Balance,June 29,20259,620$481$94,053(3,935)$(115,010)$117,609$(8,438)$88,695$317$89,012 PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlPaid-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,January 1,20249,562$478$92,631(3,916)$(114,487)$118,353$(7,961)$89,014$274$89,288 Net income3,156 3,156 15 3,171 Other comprehensive income/(loss),net of tax145 145(14)131 Cash dividends declared,per share:$0.84Common stock(4,760)(4,760)(4,760)Share-based payment transactions30 1 566(10)(270)(153)144 144 Other Balance,June 30,20249,592$480$93,197(3,925)$(114,757)$116,596$(7,816)$87,700$275$87,975 See Accompanying Notes.8PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)Six Months Ended(MILLIONS)June 29,2025June 30,2024Operating Activities Net income before allocation to noncontrolling interests$5,901$3,171 Discontinued operationsnet of tax25 12 Net income from continuing operations before allocation to noncontrolling interests5,876 3,159 Adjustments to reconcile net income from continuing operations before allocation to noncontrolling interests to net cash provided by/(usedin)operating activities:Depreciation and amortization3,243 3,467 Asset write-offs and impairments498 431 Deferred taxes(935)(1,224)Share-based compensation expense373 426 Benefit plan contributions in excess of expense/income(334)(338)Other adjustments,net(61)260 Other changes in assets and liabilities,net of acquisitions and divestitures(6,908)(6,871)Net cash provided by/(used in)operating activities1,753(691)Investing Activities Purchases of property,plant and equipment(1,182)(1,341)Purchases of short-term investments(6,085)(1,254)Proceeds from redemptions/sales of short-term investments10,500 1,712 Net(purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less(2,668)3,538 Purchases of long-term investments(86)(108)Proceeds from redemptions/sales of long-term investments145 312 Proceeds from sales of investment in Haleon6,311 3,491 Other investing activities,net288(18)Net cash provided by/(used in)investing activities7,225 6,332 Financing Activities Proceeds from short-term borrowings 6,014 Payments on short-term borrowings(2,199)(4,852)Net(payments on)/proceeds from short-term borrowings with original maturities of three months or less(903)(1,101)Proceeds from issuance of long-term debt3,687 Payments on long-term debt(3,750)(2,250)Cash dividends paid(4,882)(4,752)Other financing activities,net(377)(449)Net cash provided by/(used in)financing activities(8,423)(7,390)Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents34(46)Net increase/(decrease)in cash and cash equivalents and restricted cash and cash equivalents588(1,794)Cash and cash equivalents and restricted cash and cash equivalents,at beginning of period1,107 2,917 Cash and cash equivalents and restricted cash and cash equivalents,at end of period$1,694$1,123 Supplemental Cash Flow InformationCash paid/(received)during the period for:Income taxes$3,493$2,686 Interest paid1,483 1,553 Interest rate hedges29(2)See Note 7A.See Accompanying Notes.(a)(a)9PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 1.Basis of Presentation and Significant Accounting PoliciesA.Basis of PresentationWe prepared these condensed consolidated financial statements in conformity with U.S.GAAP,consistent in all material respects with those applied in our2024 Form 10-K.As permitted under the SEC requirements for interim reporting,certain footnotes or other financial information have been condensed oromitted.These financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periodspresented.The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notesincluded in our 2024 Form 10-K.Revenues,expenses,assets and liabilities can vary during each quarter of the year.Therefore,the results and trends in theseinterim financial statements may not be representative of those for the full year.Pfizers fiscal quarter-end for subsidiaries operating outside the U.S.is as of and for the three and six months ended May 25,2025 and May 26,2024,and forU.S.subsidiaries is as of and for the three and six months ended June 29,2025 and June 30,2024.We manage our commercial operations through three operating segments,each led by a single manager:Biopharma,PC1 and Pfizer Ignite.Biopharma is theonly reportable segment.See Note 13A.B.Revenues and Trade Accounts ReceivableDeductions from RevenuesOur accruals for Medicare,Medicaid and related state program and performance-based contract rebates,chargebacks,salesallowances and sales returns and cash discounts are as follows:(MILLIONS)June 29,2025December 31,2024Reserve against Trade accounts receivable,net of allowance for doubtful accounts$1,589$1,627 Other current liabilities:Accrued rebates8,692 7,195 Other accruals644 972 Other noncurrent liabilities742 1,029 Total accrued rebates and other sales-related accruals$11,667$10,822 Trade Accounts ReceivableTrade accounts receivable are stated at their net realizable value.The allowance for credit losses reflects our best estimate ofexpected credit losses of the receivables portfolio determined on the basis of historical experience,current information,and forecasts of future economicconditions.In developing the estimate for expected credit losses,trade accounts receivables are segmented into pools of assets depending on market(U.S.versus international),delinquency status,and customer type(high risk versus low risk and government versus non-government),and fixed reserve percentagesare established for each pool of trade accounts receivables.In determining the reserve percentages for each pool of trade accounts receivables,we considered our historical experience with certain customers andcustomer types,regulatory and legal environments,country and political risk,and other relevant current and future forecasted macroeconomic factors.Whenmanagement becomes aware of certain customer-specific factors that impact credit risk,specific allowances for these known troubled accounts are recorded.During the three and six months ended June 29,2025 and June 30,2024,additions to the allowance for credit losses,write-offs and recoveries of customerreceivables were not material to our condensed consolidated financial statements.For additional information on our trade accounts receivable,see Note 1G inour 2024 Form 10-K.Note 2.Research and Development ArrangementResearch and Development Funding Arrangement with BlackstoneIn March 2025,we entered into an arrangement with Blackstone under which we willreceive up to a total of$326 million in 2025 through 2028 to co-fund our quarterly development costs for specified treatments.As there is substantive transferof risk to the financial partner,the development funding is recognized by us as an obligation to perform contractual services.We are recognizing the funding asa reduction of Research and development expenses using an attribution model over the period of the related expenses.If successful,upon regulatory approval inthe U.S.or certain major markets in the EU for the indications based on the applicable clinical trials,Blackstone will be eligible to receive approval-based fixedmilestone payments of up to$277 million contingent upon the successful results of the clinical trials and payable to Blackstone over a period of one to threeyears.Following potential regulatory approval,Blackstone will be eligible to receive a combination of fixed milestone payments of up to$897 million in10PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)total based on achievement of certain levels of cumulative applicable net sales and payable to Blackstone over a period of five to seven years.The net presentvalue of the approval-based milestone payments and sales-based milestone payments will be recorded as intangible assets and amortized to Amortization ofintangible assets over the shorter of the term of the agreement or estimated commercial life of the product.Accretion of interest on the liabilities to payBlackstone will be recognized as interest expense in Other(income)/deductionsnet.Note 3.Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity InitiativesA.Realigning Our Cost Base Program In the fourth quarter of 2023,we announced that we launched a multi-year,enterprise-wide cost realignment program that aims to realign our costs with ourlonger-term revenue expectations.We expect costs associated with this initial part of the program to continue primarily through 2025 and to totalapproximately$3.1 billion,primarily representing cash expenditures for severance,exit and implementation costs as well as non-cash asset write downs ofwhich$2.4 billion is associated with our Biopharma segment.In the second quarter of 2025,we identified additional productivity opportunities to further reduce costs primarily in SI&A,driven in large part by enhanceddigital enablement,including automation and AI,and simplification of business processes.We expect costs associated with the additional productivityopportunities to be incurred through 2027 and to total approximately$1.6 billion,primarily representing cash expenditures for severance,digital enablementand implementation,of which$700 million is associated with our Biopharma segment.In connection with our efforts to simplify the structure and sharpen the focus of our R&D organization,in the first quarter of 2025,we expanded thisprogram after having identified additional opportunities to drive improvements in productivity and operational efficiencies through enhanced digitalenablement,including automation and AI,and simplification of business processes.We expect costs to implement these initiatives to be incurred through2026 and to total approximately$600 million,primarily representing cash expenditures for severance,digital enablement and implementation,all of which isassociated with our Biopharma segment.The majority of these costs were recorded in the first quarter of 2025,with cash outlays expected primarily in 2025and 2026.We expect costs associated with all three components of this program to total approximately$5.3 billion of which$3.7 billion is associated with the Biopharmasegment.From the start of this program through June 29,2025,we incurred total costs under this program of$3.5 billion,of which$2.7 billion is associated with ourBiopharma segment(including$2.5 billion of restructuring charges).B.Manufacturing Optimization ProgramIn the second quarter of 2024,we announced that we launched a multi-year,multi-phased program to reduce our costs of goods sold,which is expected toinclude operational efficiencies,network structure changes,and product portfolio enhancements.The first phase of this program is focused on operationalefficiencies,and we expect costs for this first phase to total approximately$1.4 billion,primarily representing cash expenditures for severance andimplementation costs,all of which is associated with our Biopharma segment.From the start of this program through June 29,2025,we incurred costs underthis program of$850 million,substantially all of which is restructuring costs for our Biopharma segment.These costs were recorded primarily in 2024,withcash outlays expected primarily in 2025 and 2026.11PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)C.Key ActivitiesThe following summarizes costs and credits for acquisitions and cost-reduction/productivity initiatives:Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024Restructuring charges/(credits):Employee terminations$(148)$1,014$236$984 Asset impairments44 41 217 66 Exit costs30 49 94 63 Restructuring charges/(credits)(74)1,104 547 1,114 Transaction costs 5 Integration costs and other56 150 113 237 Restructuring charges and certain acquisition-related costs(18)1,254 660 1,356 Net periodic benefit costs/(credits)recorded in Other(income)/deductionsnet(9)2(68)5 Additional depreciationasset restructuringrecorded in our condensedconsolidated statements of operations as follows:Cost of sales3 1 7 5 Selling,informational and administrative expenses 3 3 Total additional depreciationasset restructuring4 4 7 8 Implementation costs recorded in our condensed consolidated statements ofoperations as follows:Cost of sales26 49 46 65 Selling,informational and administrative expenses14 36 20 65 Research and development expenses39 20 62 33 Total implementation costs78 105 128 163 Total costs associated with acquisitions and cost-reduction/productivityinitiatives$54$1,364$727$1,532 Primarily represents cost-reduction initiatives.Amounts associated with our Biopharma segment:(i)credits of$406 million for the three months ended June 29,2025(including credits of$408million for our Manufacturing Optimization Program and$25 million for our Realigning our Cost Base Program),(ii)charges of$211 million for the six months ended June 29,2025(includingcharges of$562 million for our Realigning our Cost Base Program and credits of$412 million for our Manufacturing Optimization Program)and(iii)charges of$1.1 billion for both the three andsix months ended June 30,2024(including charges of$1.3 billion for our Manufacturing Optimization Program for both periods presented and credits of$113 million for the three months and$199million for the six months ended June 30,2024 for our Realigning our Cost Base Program).For all periods presented,Employee terminations include revisions of estimates of previously recordedaccruals for severance benefits,driven in large part by higher-than-expected voluntary attrition.Represents external costs for banking,legal,accounting and other similar services.Represents external,incremental costs directly related to integrating acquired businesses,such as expenditures for consulting and the integration of systems and processes,and certain otherqualifying costs.Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.Represents incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.The following summarizes the components and changes in restructuring accruals:(MILLIONS)EmployeeTerminationCostsAssetImpairmentChargesExit CostsAccrualBalance,December 31,2024$2,046$74$2,120 Provision236 217 94 547 Utilization and other(494)(217)30(681)Balance,June 29,2025$1,788$198$1,986 Included in Other current liabilities($1.7 billion)and Other noncurrent liabilities($437 million).Other activity includes adjustments for foreign currency translation that are not material to our condensed consolidated financial statements.Included in Other current liabilities($1.3 billion)and Other noncurrent liabilities($685 million).(a)(b)(c)(d)(e)(a)(b)(c)(d)(e)(a)(b)(c)(a)(b)(c)12PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 4.Other(Income)/DeductionsNetComponents of Other(income)/deductionsnet include:Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024Interest income$(156)$(130)$(299)$(259)Interest expense654 778 1,308 1,568 Net interest expense498 648 1,009 1,310 Net(gains)/losses recognized during the period on equity securities(75)342 295 317 Net periodic benefit costs/(credits)other than service costs(101)(106)(260)(209)Certain legal matters,net422 169 564 377 Certain asset impairments93 240 317 349 Haleon equity method(income)/loss(40)48 Other,net(97)(146)(233)(404)Other(income)/deductionsnet$739$1,107$1,692$1,787 The decrease in net interest expense in the second quarter and first six months of 2025 reflects(i)a decrease in interest expense primarily driven by a reduction in commercial paper outstanding and(ii)an increase in interest income due to higher total average investment asset balance compared to 2024.The net losses in the first six months of 2025 include,among other things,a net loss of$144 million related to our investment in Haleon,composed of unrealized losses of$1.0 billion,partiallyoffset by$900 million in realized gains on the sales of our remaining investment.The amounts for the second quarter and first six months of 2025 primarily include certain product liability and other legal expenses.The amounts for the second quarter and first six months of 2024primarily included certain product liability expenses related to products discontinued and/or divested by Pfizer.The first six months of 2025 primarily includes an intangible asset impairment charge associated with our Biopharma segment of$210 million for KRAS G12D,a Phase 2 indefinite-lived out-licensed asset that was discontinued by our out-licensing partner.The amounts for the second quarter and first six months of 2024 included a$240 million intangible asset impairment charge,associated with our Biopharma segment that represented IPR&D related to a Phase 3 study for the treatment of DMD,which reflected unfavorable clinical trial results.The first six months of 2025 primarily include dividend income of$111 million from our investment in ViiV.The first six months of 2024 included,among other things,a$150 million realized gainon the partial sale of our investment in Haleon and dividend income of$135 million from our investment in ViiV.Additional information about the intangible assets that were impaired during 2025 follows:Six Months EndedFair ValueJune 29,2025(MILLIONS)AmountLevel 1Level 2Level 3ImpairmentIndefinite-lived licensing agreement$210 IPR&D590 590 93 Developed technology rights 14 Total$590$590$317 The fair value amount is presented as of the date of impairment,as this asset is not measured at fair value on a recurring basis.See Note 1E in our 2024 Form 10-K.Reflects intangible assets written down to fair value in 2025.Fair value was determined using the income approach,specifically the multi-period excess earnings method,also known as thediscounted cash flow method.We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount.Someof the more significant estimates and assumptions inherent in this approach include:the amount and timing of the projected net cash flows,which includes the expected impact of competitive,legaland/or regulatory forces on the product;and assumptions about the probability of technical and regulatory success(PTRS)of ongoing clinical trials,the discount rate,which seeks to reflect thevarious risks inherent in the projected cash flows;and the tax rate,which seeks to incorporate the geographic diversity of the projected cash flows.See Note 9.Note 5.Tax MattersA.Taxes on Income/(Loss)from Continuing OperationsOur effective tax rate for continuing operations was 4.6%for the second quarter of 2025,compared to 130.2%for the second quarter of 2024,and was(0.8)%for the first six months of 2025,compared to 4.8%for the first six months of 2024.The lower effective tax rate for the second quarter of 2025,compared to thesecond quarter of 2024,was primarily due to a favorable change in the jurisdictional mix of earnings.The negative and lower effective tax rate for the first sixmonths of 2025,compared to the first six months of 2024,was primarily due to tax benefits related to global income tax resolutions in multiple tax jurisdictionsspanning multiple tax years.(a)(b)(c)(d)(e)(a)(b)(c)(d)(e)(a)(b)(b),(c)(b)(a)(b)(c)13PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)We elected,with the filing of our 2018 U.S.Federal Consolidated Income Tax Return,to pay our initial estimated$15 billion repatriation tax liability onaccumulated post-1986 foreign earnings(Transition Tax liability)over eight years through 2026.The seventh annual installment was paid by its April 15,2025due date.The eighth and final annual installment is due April 15,2026 and is reported in current Income taxes payable as of June 29,2025.Our obligationsmay vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks.See Note 5A in our 2024 Form 10-K for information on our cash paid for income taxes,net of refunds.B.Tax ContingenciesWe are subject to income tax in many jurisdictions,and a certain degree of estimation is required in recording the assets and liabilities related to income taxes.All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction.These tax audits can involve complex issues,interpretationsand judgments and the resolution of matters may span multiple years,particularly if subject to negotiation or litigation.The U.S.is one of our major tax jurisdictions,and we are regularly audited by the IRS.Tax years 2019-2022 are under audit.Tax years 2023-2025 are open butnot under audit.All other tax years are closed.In addition to the open audit years in the U.S.,we have open audit years and certain related audits,appeals andinvestigations in certain major international tax jurisdictions dating back to 2014.See Note 5D in our 2024 Form 10-K.C.Tax Provision/(Benefit)on Other Comprehensive Income/(Loss)Components of Tax provision/(benefit)on other comprehensive income/(loss)include:Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024Foreign currency translation adjustments,net$(269)$18$(372)$42 Unrealized holding gains/(losses)on derivative financial instruments,net(48)26(82)70 Reclassification adjustments for(gains)/losses included in net income(32)(23)(87)(26)(80)3(169)44 Unrealized holding gains/(losses)on available-for-sale securities,net21(3)17(9)Reclassification adjustments for(gains)/losses included in net income(10)12 9 11 10 9 26 1 Reclassification adjustments related to amortization of prior service costs and other,net(6)(9)(13)(13)Reclassification adjustments related to curtailments of prior service costs and other,net(1)1(10)1(7)(7)(23)(12)Tax provision/(benefit)on other comprehensive income/(loss)$(347)$22$(538)$76 Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that are expected to be held indefinitely.Note 6.Accumulated Other Comprehensive Loss,Excluding Noncontrolling InterestsThe following summarizes the changes,net of tax,in Accumulated other comprehensive loss:Net Unrealized Gains/(Losses)Benefit Plans(MILLIONS)Foreign CurrencyTranslationAdjustmentsDerivativeFinancialInstrumentsAvailable-For-Sale SecuritiesPrior Service(Costs)/Credits andOtherAccumulated OtherComprehensiveIncome/(Loss)Balance,January 1,2025$(7,984)$57$(106)$191$(7,842)Other comprehensive income/(loss)(56)(645)181(76)(596)Balance,June 29,2025$(8,040)$(589)$75$115$(8,438)Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests.Foreign currency translation adjustments include net gains/(losses)related to the impact of our net investment hedging program.(a)(a)(a)(b)(a)(b)14PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 7.Financial InstrumentsA.Fair Value MeasurementsFinancial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy,using a Market Approach:June 29,2025December 31,2024(MILLIONS)TotalLevel 1Level 2TotalLevel 1Level 2Financial assets:Short-term investmentsEquity securities with readily determinable fair value$1,687$1,687$7,848$6,456$1,392 Available-for-sale debt securities:Government and agencynon-U.S.5,640 5,640 6,855 6,855 Government and agencyU.S.2,290 2,290 2,853 2,853 Corporate and other1,595 1,595 1,173 1,173 9,525 9,525 10,881 10,881 Total short-term investments11,212 11,212 18,729 6,456 12,273 Other current assetsDerivative assets:Foreign exchange contracts281 281 1,056 1,056 Total other current assets281 281 1,056 1,056 Long-term investmentsEquity securities with readily determinable fair values1,118 1,118 1,246 1,246 Available-for-sale debt securities:Government and agencynon-U.S.1 1 1 1 Total long-term investments1,119 1,118 1 1,246 1,246 Other noncurrent assetsDerivative assets:Interest rate contracts59 59 13 13 Foreign exchange contracts27 27 447 447 Total derivative assets86 86 460 460 Insurance contracts923 923 875 875 Total other noncurrent assets1,009 1,009 1,335 1,335 Total assets$13,621$1,118$12,503$22,366$7,701$14,665 Financial liabilities:Other current liabilitiesDerivative liabilities:Interest rate contracts$18$18$28$28 Foreign exchange contracts681 681 217 217 Total other current liabilities698 698 245 245 Other noncurrent liabilitiesDerivative liabilities:Interest rate contracts229 229 397 397 Foreign exchange contracts984 984 723 723 Total other noncurrent liabilities1,213 1,213 1,121 1,121 Total liabilities$1,911$1,911$1,366$1,366 Includes money market funds primarily invested in U.S.Treasury and government debt.As of December 31,2024,short-term equity securities included our investment in Haleon of$6.5 billion.Inthe first quarter of 2025,we sold the remaining portion of our investment in Haleon for$6.3 billion.Long-term equity securities of$131 million as of June 29,2025 and$133 million as of December 31,2024 were held in restricted trusts for U.S.non-qualified employee benefit plans.Includes life insurance policies held in restricted trusts for U.S.non-qualified employee benefit plans.The underlying invested assets in these contracts are marketable securities,which are carriedat fair value,with changes in fair value recognized in Other(income)/deductionsnet(see Note 4).Financial Assets and Liabilities Not Measured at Fair Value on a Recurring BasisThe carrying value of Long-term debt,excluding the current portion,was$58 billion as of June 29,2025 and$57 billion as of December 31,2024.The estimated fair value of such debt,using a market approach and Level 2 inputs,was$55 billion as of June 29,2025 and$54 billion as of December 31,2024.The differences between the estimated fair values and carrying values of held-to-maturity debt securities,private equity securities,long-term receivables andshort-term borrowings not measured at fair value on a recurring basis were not significant as of June 29,2025 and December 31,2024.The fair valuemeasurements of our held-to-maturity debt securities and short-term(a)(b)(c)(a)(b)(c)15PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)borrowings are based on Level 2 inputs.The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.B.InvestmentsTotal Short-Term,Long-Term and Equity-Method InvestmentsThe following summarizes our investments by classification type:(MILLIONS)June 29,2025December 31,2024Short-term investmentsEquity securities with readily determinable fair values$1,687$7,848 Available-for-sale debt securities9,525 10,881 Held-to-maturity debt securities399 705 Total Short-term investments$11,611$19,434 Long-term investmentsEquity securities with readily determinable fair values$1,118$1,246 Available-for-sale debt securities1 Held-to-maturity debt securities48 45 Private equity securities at cost729 719 Total Long-term investments$1,896$2,010 Equity-method investments224 217 Total long-term investments and equity-method investments$2,120$2,228 Held-to-maturity cash equivalents$390$184 Represent investments in the life sciences sector.Debt SecuritiesOur investment portfolio consists of investment-grade debt securities issued across diverse governments,corporate and financial institutions:June 29,2025December 31,2024Gross Unrealized Maturities(in Years)Gross Unrealized(MILLIONS)AmortizedCostGainsLossesFair ValueWithin 1Over 1to 5Over 5AmortizedCostGainsLossesFair ValueAvailable-for-sale debt securitiesGovernment and agencynon-U.S.$5,556$85$(1)$5,640$5,640$1$6,970$8$(123)$6,855 Government and agencyU.S.2,290 2,290 2,290 2,853 2,853 Corporate and other1,593 2 1,595 1,595 1,179 (6)1,173 Held-to-maturity debt securitiesTime deposits and other832 832 789 9 34 697 697 Government and agencynon-U.S.5 5 5 237 237 Total debt securities$10,276$87$(1)$10,362$10,314$14$34$11,935$8$(129)$11,814 Any expected credit losses to these portfolios would be immaterial to our financial statements.Equity SecuritiesThe following presents the calculation of the portion of unrealized(gains)/losses that relates to equity securities,excluding equity-method investments,held atthe reporting date:Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024Net(gains)/losses recognized during the period on equity securities$(75)$342$295$317 Less:Net(gains)/losses recognized during the period on equity securities soldduring the period(10)(2)(934)(216)Net unrealized(gains)/losses during the reporting period on equity securitiesstill held at the reporting date$(65)$344$1,230$533 Reported in Other(income)/deductionsnet.See Note 4.(a)(a)(a)(a)(b)(a)16PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Included in net unrealized(gains)/losses are observable price changes on equity securities without readily determinable fair values.As of June 29,2025,there were cumulative impairments anddownward adjustments of$435 million and upward adjustments of$239 million.Impairments,downward and upward adjustments were not material to our operations in the second quarters andfirst six months of 2025 and 2024.C.Short-Term BorrowingsShort-term borrowings include:(MILLIONS)June 29,2025December 31,2024Commercial paper,principal amount$2,453 Current portion of long-term debt,principal amount4,250 3,750 Other short-term borrowings,principal amount50 755 Total short-term borrowings,principal amount4,300 6,957 Net unamortized discounts,premiums and debt issuance costs(4)(12)Total Short-term borrowings,including current portion of long-term debt,carried at historical proceeds,asadjusted$4,295$6,946 Primarily includes cash collateral.See Note 7F.D.Long-Term DebtIssuanceIn May 2025,we issued in Euro,through our wholly-owned finance subsidiary,PNIF,the following senior unsecured notes for general corporate purposes:(MILLIONS)PrincipalCoupon RateMaturity DateJune 29,20252.875%May 19,2029750 3.250%May 19,20321,000 3.875%May 19,2037750 4.250%May 19,2045800 Total long-term debt issued in the second quarter of 20253,300 The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc.PNIF has no assets or operations and will have no assets or operations,other than as related to theissuance,administration and repayment of the notes and any other debt securities that it may issue in the future.The notes may be redeemed by us at any time,in whole,or in part,at a make-whole redemption price plus accrued and unpaid interest.The weighted average effective interest rate for the notes at issuance was 3.605%.The following summarizes the aggregate principal amount of our senior unsecured long-term debt,and adjustments to report our aggregate long-term debt:(MILLIONS)June 29,2025December 31,2024Total long-term debt,principal amount$57,098$57,147 Net fair value adjustments related to hedging and purchase accounting872 701 Net unamortized discounts,premiums and debt issuance costs(468)(444)Total long-term debt,carried at historical proceeds,as adjusted$57,502$57,405 E.Derivative Financial Instruments and Hedging ActivitiesForeign Exchange RiskA significant portion of our revenues,earnings and net investments in foreign affiliates is exposed to changes in foreign exchangerates.Where foreign exchange risk is not offset by other exposures,we manage our foreign exchange risk principally through the use of derivative financialinstruments and foreign currency debt.These financial instruments serve to mitigate the impact on net income as a result of remeasurement into anothercurrency,or against the impact of translation into U.S.dollars of certain foreign exchange-denominated transactions.The derivative financial instruments primarily hedge or offset exposures in the euro,U.K.pound,Chinese renminbi,Japanese yen,Canadian dollar andSwedish krona,and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years.We may also seekto protect against possible declines in the net investments of our foreign business entities.Interest Rate RiskOur interest-bearing investments and borrowings are subject to interest rate risk.Depending on market conditions,we may change theprofile of our outstanding debt or investments by entering into derivative financial instruments(b)(a)(a)(a),(b)(c)(a)(b)(c)17PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)like interest rate swaps,either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates,or to convert variable ratedebt or investments to fixed rates.The derivative financial instruments primarily hedge U.S.dollar fixed-rate debt.The following summarizes the fair value of the derivative financial instruments and notional amounts:June 29,2025December 31,2024Fair ValueFair Value(MILLIONS)NotionalAssetLiabilityNotionalAssetLiabilityDerivatives designated as hedging instruments:Foreign exchange contracts$24,681$184$1,438$23,991$1,250$719 Interest rate contracts6,750 59 246 6,750 13 425 243 1,684 1,263 1,144 Derivatives not designated as hedging instruments:Foreign exchange contracts$21,634 124 227$26,335 253 221 Total$367$1,911$1,516$1,366 The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was$5.0 billion as of June 29,2025 and$5.0 billion as of December 31,2024.The following summarizes information about the gains/(losses)incurred to hedge or offset operational foreign exchange or interest rate risk exposures:Gains/(Losses)Recognized in OIDGains/(Losses)Recognized in OCIGains/(Losses)Reclassified fromOCI into OID and COSThree Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024June 29,2025June 30,2024Derivative Financial Instruments in Cash Flow HedgeRelationships:Interest rate contracts$(1)$Foreign exchange contracts (289)117 92 137 Amount excluded from effectiveness testing andamortized into earnings 17 10 16 10 Derivative Financial Instruments in Fair Value HedgeRelationships:Interest rate contracts72(36)Hedged item(73)36 Derivative Financial Instruments in Net Investment HedgeRelationships:Foreign exchange contracts (924)81 Amount excluded from effectiveness testing andamortized into earnings 74 31 52 40 Non-Derivative Financial Instruments in Net InvestmentHedge Relationships:Foreign currency long-term debt (70)8 Derivative Financial Instruments Not Designated as Hedges:Foreign exchange contracts118(13)$118$(13)$(1,193)$247$158$187(a)(a)(a)(a)(a)(b)(c)(c)(d)18PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Gains/(Losses)Recognized in OIDGains/(Losses)Recognized in OCIGains/(Losses)Reclassified fromOCI into OID and COSSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024June 29,2025June 30,2024Derivative Financial Instruments in Cash Flow HedgeRelationships:Interest rate contracts$Foreign exchange contracts (427)327 387 142 Amount excluded from effectiveness testing andamortized into earnings 32 17 32 17 Derivative Financial Instruments in Fair Value HedgeRelationships:Interest rate contracts215(224)Hedged item(215)224 Derivative Financial Instruments in Net Investment HedgeRelationships:Foreign exchange contracts (1,361)315 Amount excluded from effectiveness testing andamortized into earnings 148 52 93 76 Non-Derivative Financial Instruments in Net InvestmentHedge Relationships:Foreign currency long-term debt (101)26 Derivative Financial Instruments Not Designated as Hedges:Foreign exchange contracts88 42$88$42$(1,709)$737$512$235 OID=Other(income)/deductionsnet,included in Other(income)/deductionsnet in the condensed consolidated statements of operations.COS=Cost of Sales,included in Cost of sales in thecondensed consolidated statements of operations.OCI=Other comprehensive income/(loss),included in the condensed consolidated statements of comprehensive income/(loss).The amounts reclassified from OCI into COS were:a net gain of$30 million in the second quarter of 2025;a net gain of$93 million in the first six months of 2025;a net gain of$38 million in the second quarter of 2024;and a net gain of$70 million in the first six months of 2024.The remaining amounts were reclassified from OCI into OID.Based on quarter-end foreign exchange rates that are subject to change,we expect to reclassify a pre-tax loss of$230 million withinthe next 12 months into income.The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 18 years and relatesto foreign currency debt.The amounts reclassified from OCI were reclassified into OID.Long-term debt includes foreign currency borrowings,which are used in net investment hedges;the related carrying values as of June 29,2025 and December 31,2024 were$878 million and$777million,respectively.The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:June 29,2025December 31,2024Cumulative Amount of Fair ValueHedging AdjustmentIncrease/(Decrease)toCarrying AmountCumulative Amount of Fair ValueHedging AdjustmentIncrease/(Decrease)toCarrying Amount(MILLIONS)Carrying Amount ofHedgedAssets/LiabilitiesActive HedgingRelationshipsDiscontinuedHedgingRelationshipsCarrying Amount ofHedgedAssets/LiabilitiesActive HedgingRelationshipsDiscontinuedHedgingRelationshipsLong-term debt$7,133$(169)$856$7,154$(384)$891 Carrying amounts exclude the cumulative amount of fair value hedging adjustments.F.Credit RiskA significant portion of our trade accounts receivable balances are due from wholesalers and governments.For additional information on our trade accountsreceivables with significant customers,see Note 17C in our 2024 Form 10-K.As of June 29,2025,the largest investment exposures in our portfolio consisted primarily of U.S.government money market funds,as well as sovereign debtinstruments issued by the U.S.,Germany,Canada,Japan and the U.K.(a)(a)(a)(b)(c)(c)(d)(a)(b)(c)(d)(a)(a)(a)19PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)With respect to our derivative financial instrument agreements with financial institutions,we do not expect to incur a significant loss from failure of anycounterparty.Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-supportannexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure.As a result,there are no significantconcentrations of credit risk with any individual financial institution.As of June 29,2025,the aggregate fair value of these derivative financial instruments thatare in a net payable position was$1.1 billion,for which we have posted collateral of$1.1 billion with a corresponding amount reported in Short-terminvestments.As of June 29,2025,the aggregate fair value of our derivative financial instruments that are in a net receivable position was$42 million,for whichwe have received collateral of$43 million with a corresponding amount reported in Short-term borrowings,including current portion of long-term debt.Note 8.Other Financial InformationA.InventoriesThe following summarizes the components of Inventories:(MILLIONS)June 29,2025December 31,2024Finished goods$4,126$3,775 Work-in-process6,514 6,101 Raw materials and supplies1,029 976 Inventories$11,669$10,851 Noncurrent inventories not included above$2,360$2,663 Included in Other noncurrent assets.Based on our current estimates and assumptions,there are no recoverability issues for these amounts.B.Other Current LiabilitiesOther current liabilities include,among other things,amounts payable to BioNTech for the gross profit split for Comirnaty,which totaled$94 million as ofJune 29,2025 and$1.3 billion as of December 31,2024.C.Supplier Finance Program ObligationWe maintain voluntary supply chain finance agreements with several participating financial institutions.Under these agreements,participating suppliers mayvoluntarily elect to sell their accounts receivable with Pfizer to these financial institutions.As of June 29,2025 and December 31,2024,respectively,$501 million and$688 million of our trade payables to suppliers who participate in these financing arrangements were outstanding.Note 9.Identifiable Intangible Assets,Net and GoodwillA.Identifiable Intangible AssetsThe following summarizes the components of Identifiable intangible assets:June 29,2025December 31,2024(MILLIONS)GrossCarryingAmountAccumulatedAmortizationIdentifiableIntangibleAssets,NetGrossCarryingAmountAccumulatedAmortizationIdentifiableIntangibleAssets,NetFinite-lived intangible assetsDeveloped technology rights$100,537$(67,907)$32,629$99,397$(65,044)$34,353 Brands1,274(1,012)262 1,277(992)285 Licensing agreements and other2,740(1,603)1,137 2,724(1,513)1,210 104,551(70,522)34,028 103,397(67,549)35,848 Indefinite-lived intangible assetsIPR&D18,213 18,213 18,893 18,893 Licensing agreements and other461 461 670 670 18,674 18,674 19,563 19,563 Identifiable intangible assets$123,224$(70,522)$52,702$122,961$(67,549)$55,411 The changes in the gross carrying amounts primarily reflect the transfer of$590 million from IPR&D to developed technology rights for talazoparib(Talzenna),as well as the impact of foreignexchange.The decrease in the gross carrying amount reflects an impairment of$210 million(see Note 4).The decrease is primarily due to amortization expense of$2.4 billion.(a)(a)(a)(a)(b)(c)(a)(b)(c)20PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)B.GoodwillAs a result of the organizational changes to the commercial structure within the Biopharma operating segment effective in the first quarter of 2025(see Note13A),our goodwill was reallocated among impacted reporting units.We completed the re-allocation during the first quarter of 2025 and concluded that none ofour goodwill was impaired.All goodwill continues to be assigned within the Biopharma reportable segment.Note 10.Pension and Postretirement Benefit PlansThe following summarizes the components of net periodic benefit cost/(credit):Pension Plans U.S.InternationalPostretirementPlansThree Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024June 29,2025June 30,2024Service cost$26$23$4$4 Interest cost133 139 72 77 6 6 Expected return on plan assets(184)(208)(81)(80)(14)(13)Amortization of prior service cost/(credit)1 1(25)(29)Curtailments (9)Special termination benefits 2 Net periodic benefit cost/(credit)reported in income$(51)$(69)$18$23$(38)$(33)Pension Plans U.S.InternationalPostretirementPlansSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024June 29,2025June 30,2024Service cost$50$44$8$7 Interest cost265 277 143 155 13 12 Expected return on plan assets(368)(416)(161)(160)(28)(25)Amortization of prior service cost/(credit)1 2 2(57)(59)Curtailments (9)(2)(59)Special termination benefits 6 Net periodic benefit cost/(credit)reported in income$(102)$(139)$26$46$(123)$(65)The components of net periodic benefit cost/(credit)other than the service cost component are primarily included in Other(income)/deductionsnet(see Note4).For the six months ended June 29,2025,we contributed$79 million to our U.S.Pension Plans and$64 million to our International Pension Plans from ourgeneral assets,which include direct employer benefit payments.21PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 11.Earnings Per Common Share Attributable to Pfizer Inc.Common ShareholdersThe following presents the detailed calculation of EPS:Three Months EndedSix Months Ended(MILLIONS)June 29,2025June 30,2024June 29,2025June 30,2024EPS NumeratorIncome from continuing operations attributable to Pfizer Imon shareholders$2,885$24$5,852$3,144 Discontinued operationsnet of tax25 17 25 12 Net income attributable to Pfizer Imon shareholders$2,910$41$5,877$3,156 EPS Denominator Weighted-average number of common shares outstandingBasic5,685 5,666 5,680 5,662 Common-share equivalents21 29 28 35 Weighted-average number of common shares outstandingDiluted5,706 5,696 5,708 5,696 Anti-dilutive common stock equivalents8 23 12 24 These common stock equivalents were outstanding for the periods presented,but were not included in the computation of diluted EPS for those periods because their inclusion would have had ananti-dilutive effect.Note 12.Contingencies and Certain CommitmentsWe and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business,including tax and legal contingencies,guarantees and indemnifications.The following outlines our legal contingencies,guarantees and indemnifications.For a discussion of our tax contingencies,see Note 5B.A.Legal ProceedingsOur legal contingencies include,but are not limited to,the following:Patent litigation,which typically involves challenges to the coverage and/or validity of patents on various products,processes or dosage forms.An adverseoutcome could result in loss of patent protection for a product,a significant loss of revenues from a product or impairment of the value of associated assets.We are the plaintiff in the majority of these actions.Product liability and other product-related litigation related to current or former products,which can include personal injury,consumer fraud,off-labelpromotion,securities,antitrust and breach of contract claims,among others,and often involves highly complex issues relating to medical causation,labelwarnings and reliance on those warnings,scientific evidence and findings,actual,provable injury and other matters.Commercial and other asserted or unasserted matters,which can include acquisition-,licensing-,intellectual property-,collaboration-or co-promotion-related and product-pricing claims and environmental claims and proceedings,and can involve complexities that will vary from matter to matter.Government investigations,which often are related to the extensive regulation of pharmaceutical companies by national,state and local government agenciesin the U.S.and in other jurisdictions.Certain of these contingencies could result in increased expenses and/or losses,including damages,royalty payments,fines and/or civil penalties,which couldbe substantial,and/or criminal charges.We believe that our claims and defenses in matters in which we are a defendant are substantial,but litigation is inherently unpredictable and excessive verdictsdo occur.We do not believe that any of these matters will have a material adverse effect on our financial position.However,we could incur judgments,enterinto settlements or revise our expectations regarding the outcome of matters,which could have a material adverse effect on our results of operations and/or ourcash flows in the period in which the amounts are accrued or paid.We have accrued for losses that are both probable and reasonably estimable.Substantially all of our contingencies are subject to significant uncertainties and,therefore,determining the likelihood of a loss and/or the measurement of any loss can be complex.Consequently,we are unable to estimate the range ofreasonably possible loss in excess of amounts accrued.Our assessments,which result from a complex series of judgments about future events anduncertainties,are based on estimates and assumptions that have been deemed reasonable by management,but that may prove to be incomplete or inaccurate,and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.(a)(a)22PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can relyheavily on estimates and assumptions.For proceedings under environmental laws to which a governmental authority is a party,we have adopted a disclosurethreshold of$1 million in potential or actual governmental monetary sanctions.The principal pending matters to which we are a party are discussed below.In determining whether a pending matter is a principal matter,we consider bothquantitative and qualitative factors to assess materiality,such as,among others,the amount of damages and the nature of other relief sought,if specified;ourview of the merits of the claims and of the strength of our defenses;whether the action purports to be,or is,a class action and,if not certified,our view of thelikelihood that a class will be certified by the court;the jurisdiction in which the proceeding is pending;whether related actions have been transferred tomultidistrict litigation;any experience that we or,to our knowledge,other companies have had in similar proceedings;whether disclosure of the action wouldbe important to a reader of our financial statements,including whether disclosure might change a readers judgment about our financial statements in light ofall of the information that is available to the reader;the potential impact of the proceeding on our reputation;and the extent of public interest in the matter.Inaddition,with respect to patent matters in which we are the plaintiff,we consider,among other things,the financial significance of the product protected by thepatent(s)at issue.Some of the matters discussed below include those which management believes that the likelihood of possible loss in excess of amountsaccrued is remote.A1.Legal ProceedingsPatent LitigationWe are involved in suits relating to our patents(or those of our collaboration/licensing partners to which we have licenses or co-promotion rights),includingbut not limited to,those discussed below.We face claims by generic drug manufacturers that patents covering our products(or those of ourcollaboration/licensing partners to which we have licenses or co-promotion rights and to which we may or may not be a party),processes or dosage forms areinvalid and/or do not cover the product of the generic drug manufacturer.Also,counterclaims,as well as various independent actions,have been filed allegingthat our assertions of,or attempts to enforce,patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws.Inaddition to the challenges to the U.S.patents that are discussed below,patent rights to certain of our products or those of our collaboration/licensing partnersare being challenged in various other jurisdictions.Some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.S.jurisdictions.For example,in April 2022,the U.K.High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026.InMay 2023,the Court of Appeal dismissed BMSs appeal and in October 2023,the Supreme Court refused BMS permission to appeal.Additional challenges arepending in other jurisdictions.Also,in July 2022,CureVac AG(CureVac)brought a patent infringement action against BioNTech and certain of its subsidiariesin the German Regional Court alleging that Comirnaty infringes certain German utility model patents and certain expired and unexpired European patents.Additional challenges involving Comirnaty patents may be filed against us and/or BioNTech in other jurisdictions in the future.Adverse decisions in thesematters could have a material adverse effect on our results of operations.We are also party to patent damages suits in various jurisdictions pursuant to whichgeneric drug manufacturers,payors,governments or other parties are seeking damages from us for allegedly causing delay of generic entry.We also are often involved in other proceedings,such as inter partes review,post-grant review,re-examination or opposition proceedings,before the U.S.Patent and Trademark Office,the European Patent Office,or other foreign counterparts,as well as court proceedings relating to our intellectual property or theintellectual property rights of others,including challenges to such rights initiated by us.Also,if one of our patents(or one of our collaboration/licensingpartners patents)is found to be invalid by such proceedings,generic or competitive products could be introduced into the market resulting in the erosion ofsales of our existing products.For example,several of the patents in our pneumococcal vaccine portfolio have been challenged in inter partes review and post-grant review proceedings in the U.S.Patent and Trademark Office,as well as outside the U.S.The invalidation of any of the patents in our pneumococcalportfolio could potentially allow additional competitor vaccines,if approved,to enter the marketplace earlier than anticipated.In the event that any of thepatents are found valid and infringed,a competitors vaccine,if approved,might be prohibited from entering the market or a competitor might be required topay us a royalty.We are also subject to patent litigation pursuant to which one or more third parties seek damages and/or injunctive relief to compensate for allegedinfringement of its patents by our commercial or other activities.If one of our marketed products(or a product of our collaboration/licensing partners to whichwe have licenses or co-promotion rights)is found to infringe valid patent rights of a third party,such third party may be awarded significant damages or royaltypayments,or we may be prevented from further sales of that product.Such damages may be enhanced as much as three-fold if we or one of our subsidiaries isfound to have willfully infringed valid patent rights of a third party.23PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Actions In Which We Are The PlaintiffXeljanz(tofacitinib)Beginning in 2017,we brought patent-infringement actions against several generic manufacturers that filed separate abbreviated new drug applications(ANDAs)with the FDA seeking approval to market their generic versions of tofacitinib tablets in one or both of 5 mg and 10 mg dosage strengths,and in bothimmediate and extended release forms.To date,we have settled actions with several manufacturers on terms not material to us.The remaining actions continuein the U.S.District Court for the District of Delaware as described below.In April 2025,we brought a patent infringement action against Annora Pharma Private Limited(Annora)asserting the infringement and validity of ourcomposition of matter patent,covering immediate release formulations of tofacitinib that was challenged by Annora in its ANDA seeking approval to market ageneric version of tofacitinib 5 mg and 10 mg immediate release tablets.In May 2025,we settled the action against Annora on terms not material to us.In May 2025,we brought a patent infringement action against Somerset Therapeutics LLC(Somerset)asserting the infringement and validity of ourcomposition of matter patent,covering Xeljanz that was challenged by Somerset in its ANDA seeking approval to market a generic version of tofacitinibimmediate release(5 mg,10 mg)tablets.In June 2025,we brought a patent infringement action against Orient Pharma Co.,Ltd.(Orient)asserting the infringement and validity of our extended-releaseformulation patents,covering Xeljanz XR that were challenged by Orient in its ANDA seeking approval to market a generic version of tofacitinib extended-release(11 mg,22 mg)tablets.In June 2025,we brought a patent infringement action against Apotex Inc.asserting the infringement and validity of our composition of matter patent,coveringXeljanz XR that was challenged by Apotex Inc.in its ANDA seeking approval to market a generic version of tofacitinib extended-release(11 mg,22 mg)tablets.Mektovi(binimetinib)Beginning in August 2022,two generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions ofMektovi.The companies assert the invalidity and non-infringement of two method of use patents expiring in 2030,a method of use patent expiring in 2031,two method of use patents expiring in 2033,and a product by process patent expiring in 2033.Beginning in September 2022,we brought patent infringementactions against both of the generic filers in the U.S.District Court for the District of Delaware,asserting the validity and infringement of all six patents.InJanuary 2025,we settled with one of the generic companies on terms not material to us.In June 2025,we settled with the second generic company on terms notmaterial to us,and the case was dismissed.In August 2022,we received notice from Teva Pharmaceuticals,Inc.(Teva)that it had filed an ANDA seeking approval to market a generic version of Mektovi.Teva asserts the invalidity and non-infringement of two method of use patents expiring in 2033 and a product by process patent expiring in 2033.In June 2023,we brought a patent infringement action against Teva in the U.S.District Court for the District of Delaware,asserting the validity and infringement of the threepatents.In August 2025,the case against Teva was dismissed.Vyndaqel-Vyndamax(tafamidis/tafamidis meglumine)Beginning in June 2023,several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions oftafamidis capsules(61 mg)or tafamidis meglumine capsules(20 mg),challenging some or all of the patents listed in the FDAs Orange Book for Vyndamax(tafamidis)and Vyndaqel(tafamidis meglumine).Scripps Research Institute(Scripps)owns the composition of matter patent and the method of treatmentpatents covering the products,and Pfizer is the exclusive licensee.Pfizer separately owns the crystalline form patent.Beginning in August 2023,we andScripps brought patent infringement actions against the generic filers in the U.S.District Court for the District of Delaware,asserting the validity andinfringement of the patents in suit.Pfizer is the sole plaintiff in actions that assert only the infringement and validity of the crystalline form patent.Oxbryta(voxelotor)In January 2024,Zydus Pharmaceuticals(USA)Inc.,Zydus Lifesciences Limited,and Zydus Worldwide DMCC(collectively,Zydus)and MSNPharmaceuticals Inc.and MSN Laboratories Private Ltd.(collectively,MSN)separately notified us that they had filed ANDAs with the FDA seeking approvalto market generic versions of voxelotor tablets,challenging some of the patents listed in the FDAs Orange Book for Oxbryta(voxelotor tablets in 300 mg and500 mg strengths and/or for oral suspension)on non-infringement grounds.In March 2024,we filed patent infringement actions against both generic filers inthe U.S.District Court for the District of Delaware,asserting the validity and infringement of the challenged patents.Zydus and MSN have not challenged ourcomposition of matter patents or method of treatment patents for Oxbryta.24PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Nurtec(rimegepant)In April 2024,Rubicon Research Private Limited,Teva Pharmaceuticals,Inc.,Changzhou Pharmaceutical Factory,Natco Pharma Limited and Natco Pharma,Inc.,MSN,Aurobindo Pharma Limited,Apitoria Pharma Private Limited and Aurobindo Pharma U.S.A.Inc.(collectively,Aurobindo)and Apotex Inc.andApotex Corp.(collectively,Apotex)notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of rimegepant orallydisintegrating tablets,claiming noninfringement and/or challenging the validity of some or all of the patents listed in the FDAs Orange Book for Nurtec(rimegepant orally disintegrating tablets Eq 75 mg base).In May 2024,we filed patent infringement actions against all the generic filers in the U.S.DistrictCourt for the District of Delaware.Xtandi(enzalutamide)Beginning in August 2024,several generic companies notified us and Astellas that they had filed ANDAs with the FDA seeking approval to market genericversions of Xtandi,challenging some or all of the patents listed in the FDAs Orange Book for Xtandi.Beginning in August 2024,we brought patentinfringement actions against the generic filers in the U.S.District Court for the District of New Jersey,asserting the validity and infringement of the patents insuit.Inlyta(axitinib)In October 2024,Sandoz Inc.(Sandoz)notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Inlyta.Sandozasserts the invalidity and non-infringement of the crystalline form patent for Inlyta that expires in 2030.In November 2024,we filed suit against Sandoz in theU.S.District Court for the District of Delaware,asserting the validity and infringement of the crystalline form patent for Inlyta.In June 2025,we settled withSandoz on terms not material to us.Actions in Which We are the DefendantComirnaty(tozinameran)In March 2022,Alnylam Pharmaceuticals,Inc.(Alnylam)filed a complaint in the U.S.District Court for the District of Delaware against Pfizer and Pharmacia&Upjohn Company LLC,our wholly owned subsidiary,alleging that Comirnaty infringes a U.S.patent issued in February 2022,and seeking unspecifiedmonetary damages.In July 2022,Alnylam filed a second complaint in the U.S.District Court for the District of Delaware against Pfizer,Pharmacia&UpjohnCompany LLC,BioNTech and BioNTech Manufacturing GmbH,alleging that Comirnaty infringes a U.S.patent issued in July 2022,and seeking unspecifiedmonetary damages.In May 2023,Alnylam filed a separate complaint in the U.S.District Court for the District of Delaware against Pfizer and Pharmacia&Upjohn Company LLC alleging that Comirnaty infringes four additional U.S.patents issued on various dates in 2023 and seeking unspecified monetarydamages.In February 2025,one of the patents asserted in the May 2023 complaint was dismissed from the litigation by stipulation of the parties.In July 2025,the District Court issued a judgment that Comirnaty does not infringe any of the patents asserted by Alnylam.In August 2022,ModernaTX,Inc.(ModernaTX)and Moderna US,Inc.(Moderna)sued Pfizer,BioNTech,BioNTech Manufacturing GmbH and BioNTech USInc.in the U.S.District Court for the District of Massachusetts,alleging that Comirnaty infringes three U.S.patents.In its complaint,Moderna stated that it isseeking damages for alleged infringement occurring after March 7,2022.In March 2024,the U.S.Patent Office Patent Trial&Appeal Board instituted areview of two of the three patents in suit.In March 2025,the U.S.Patent Office issued a decision holding that the two Moderna patents were invalid.In August 2022,ModernaTX filed a patent infringement action in Germany against Pfizer and certain subsidiary companies,as well as BioNTech and certainsubsidiary companies,alleging that Comirnaty infringes two European patents.In March 2025,a German court found the asserted patents infringed;nodecision on invalidity was rendered.In September 2022,ModernaTX filed patent infringement actions in the U.K.and in the Netherlands against Pfizer andcertain subsidiary companies,as well as BioNTech and certain subsidiary companies,on the same two European patents.In its complaints,ModernaTX statedthat it is seeking damages for alleged infringement occurring after March 7,2022.In November 2023,one of the European patents was revoked by theEuropean Patent Office.In December 2023,the other European patent was declared invalid by a court in the Netherlands(the invalidity decision is limited tothe Netherlands).In July 2024,the U.K.court revoked one patent,ruling that it was invalid,and held that the other patent was valid and infringed.In July2025,the U.K.Court of Appeal affirmed the lower court ruling that the other patent is valid and infringed.ModernaTX has also filed additional patentinfringement actions against Pfizer and BioNTech in certain other ex-U.S.jurisdictions.In April 2023,Arbutus Biopharma Corporation(Arbutus)and Genevant Sciences GmbH(Genevant)filed a complaint in the U.S.District Court for the Districtof New Jersey against Pfizer and BioNTech alleging that Comirnaty and its manufacture infringe five U.S.patents,and seeking unspecified monetary damages.In April 2024,GlaxoSmithKline Biologicals SA and GlaxoSmithKline LLC(collectively,GSK Group)sued Pfizer and Pharmacia&Upjohn Company LLC,BioNTech,BioNTech Manufacturing GmbH and BioNTech US Inc.in the U.S.District Court for the District of Delaware,alleging that Comirnaty infringesfive U.S.patents and seeking unspecified money damages.25PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)In August 2024,GSK Group filed an amended complaint alleging that Comirnaty infringes three additional U.S.patents.In July 2025,GSK Group sued severalPfizer and BioNTech entities in Ireland,alleging that Comirnaty infringes three European patents.Also in July 2025,GSK Group sued several Pfizer andBioNTech entities in the Unified Patent Court,alleging that Comirnaty infringes two European patents,both of which are at issue in the Irish lawsuit.In January 2025,Promosome LLC filed a complaint in the Unified Patent Court,Local Division Munich,against Pfizer and BioNTech and certain of theirsubsidiaries alleging that Comirnaty infringes a European patent that is in force only in France,Germany and Sweden,and seeking unspecified monetarydamages in connection with the manufacture and sale of Comirnaty in France,Germany and Sweden.PaxlovidIn June 2022,Enanta Pharmaceuticals,Inc.(Enanta)filed a complaint in the U.S.District Court for the District of Massachusetts against Pfizer alleging that theactive ingredient in Paxlovid,nirmatrelvir,infringes a U.S.patent issued in June 2022,and seeking unspecified monetary damages.In December 2024,theDistrict Court issued an order granting Pfizers motion for summary judgment,finding Enantas patent invalid.Matters Involving Pfizer and its Collaboration/Licensing PartnersComirnaty(tozinameran)In July 2022,Pfizer,BioNTech and BioNTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S.District Court for theDistrict of Massachusetts seeking a judgment of non-infringement for three U.S.patents relating to Comirnaty.In May 2023,the case was transferred to theU.S.District Court for the Eastern District of Virginia.Also in May 2023,CureVac asserted that Comirnaty infringes the three patents that were the subject ofour declaratory judgment complaint,and in May and July 2023,CureVac asserted that Comirnaty infringes a number of additional U.S.patents.Orgovyx(relugolix)Beginning in January 2025,several generic companies notified us that they had filed ANDAs with the FDA seeking approval to sell a generic form of relugolix(Orgovyx),and challenging one or more patents listed in the FDAs Orange Book for Orgovyx which are licensed to Pfizer.In March 2025,we,along withSumitomo Pharma Switzerland GBBH,Sumitomo Pharma America,Inc.,Takeda and Takeda Pharmaceuticals International AG jointly filed separate patentinfringement actions in the U.S.District Court for the District of Delaware against the generic companies,asserting the infringement and validity of the patentsin suit.A2.Legal ProceedingsProduct LitigationWe are defendants in numerous cases,including but not limited to those discussed below,related to our pharmaceutical and other products.Plaintiffs in thesecases seek damages and other relief on various grounds for alleged personal injury and economic loss.AsbestosBetween 1967 and 1982,Warner-Lambert owned American Optical Corporation(American Optical),which manufactured and sold respiratory protectivedevices and asbestos safety clothing.In connection with the sale of American Optical in 1982,Warner-Lambert agreed to indemnify the purchaser for certainliabilities,including certain asbestos-related and other claims.Warner-Lambert was acquired by Pfizer in 2000 and is a wholly owned subsidiary of Pfizer.Warner-Lambert is actively engaged in the defense of,and will continue to explore various means of resolving,these claims.Numerous lawsuits against American Optical,Pfizer and certain of its previously owned subsidiaries are pending in various federal and state courts seekingdamages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certainof its previously owned subsidiaries.There also are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned orformerly owned by Pfizer or its subsidiaries.DocetaxelA number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxeldeveloped permanent hair loss.Hospira is a wholly-owned subsidiary that we acquired in September 2015.The significant majority of the cases also nameother defendants,including the manufacturer of the branded product,Taxotere.Plaintiffs seek compensatory and punitive damages.Additional lawsuits havebeen filed in which plaintiffs allege they developed blocked tear ducts following their treatment with Docetaxel.In 2016,the federal cases were transferred for coordinated pre-trial proceedings to an MDL in the U.S.District Court for the Eastern District of Louisiana.In2022,the eye injury cases were transferred for coordinated pre-trial proceedings to an MDL in the U.S.District Court for the Eastern District of Louisiana.26PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)ZantacA number of lawsuits have been filed against Pfizer in various federal and state courts alleging that plaintiffs developed various types of cancer,or face anincreased risk of developing cancer,purportedly as a result of the ingestion of Zantac.The significant majority of these cases also name other defendants thathave historically manufactured and/or sold Zantac.Pfizer has not sold Zantac since 2006,and only sold an OTC version of the product.In 2006,Pfizer sold theconsumer business that included its Zantac OTC rights to Johnson&Johnson and transferred the assets and liabilities related to Zantac OTC to Johnson&Johnson in connection with the sale.Plaintiffs in these cases seek compensatory and punitive damages.In February 2020,the federal actions were transferred for coordinated pre-trial proceedings to an MDL in the U.S.District Court for the Southern District ofFlorida(the Federal MDL Court).Plaintiffs in the MDL filed against Pfizer and many other defendants a master personal injury complaint,a consolidatedconsumer class action complaint alleging,among other things,claims under consumer protection statutes of all 50 states,and a medical monitoring complaintseeking to certify medical monitoring classes under the laws of 13 states.In December 2022,the Federal MDL Court granted defendants Daubert motions toexclude plaintiffs expert testimony and motion for summary judgment on general causation,which has resulted in the dismissal of all complaints in thelitigation.Plaintiffs have appealed the Federal MDL Courts rulings.In addition,(i)Pfizer has received service of Canadian class action complaints naming Pfizer and other defendants,and seeking compensatory and punitivedamages for personal injury and economic loss,allegedly arising from the defendants sale of Zantac in Canada;and(ii)the State of New Mexico and theMayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state courts,alleging various state statutory andcommon law claims in connection with the defendants alleged sale of Zantac in those jurisdictions.In April 2021,a Judicial Council Coordinated Proceedingwas created in the Superior Court of California in Alameda County to coordinate personal injury actions against Pfizer and other defendants filed in Californiastate court.Coordinated proceedings have also been created in other state courts.The large majority of the state court cases have been filed in the SuperiorCourt of Delaware in New Castle County.Many of these Zantac-related cases have been outstanding for a number of years.From time to time,Pfizer has explored and will continue to exploreopportunistic settlements of these matters.As of August 2025,Pfizer had settled,or entered into definitive agreements or agreements-in-principle to settle,subject to certain conditions,a substantial majority of the cases filed in state courts in which the plaintiff alleges use of a Pfizer product.The remainingunresolved state court cases continue in various state courts.ChantixBeginning in August 2021,a number of putative class actions have been filed against Pfizer in various U.S.federal courts following Pfizers voluntary recall ofChantix due to the presence of a nitrosamine,N-nitroso-varenicline.Plaintiffs assert that they suffered economic harm purportedly as a result of purchasingChantix or generic varenicline medicines sold by Pfizer.Plaintiffs seek to represent nationwide and state-specific classes and seek various remedies,includingdamages and medical monitoring.In December 2022,the federal actions were transferred for coordinated pre-trial proceedings to an MDL in the U.S.DistrictCourt for the Southern District of New York.Depo-ProveraA number of lawsuits have been filed against Pfizer and certain subsidiaries in various federal and state courts alleging that plaintiffs who used the injectableversion of Depo-Provera(active ingredient medroxyprogesterone acetate,or MPA)for contraception developed meningioma.The cases also name otherdefendants,including the manufacturers of generic versions of injectable MPA for contraception.Plaintiffs assert claims against Pfizer relating to both Depo-Provera and generic MPA products,and seek compensatory and punitive damages.In February 2025,the federal cases were transferred for coordinated pre-trialproceedings to an MDL in the U.S.District Court for the Northern District of Florida.A3.Legal ProceedingsCommercial and Other MattersMonsanto-Related MattersIn 1997,Monsanto Company(Former Monsanto)contributed certain chemical manufacturing operations and facilities to a newly formed corporation,SolutiaInc.(Solutia),and spun off the shares of Solutia.In 2000,Former Monsanto merged with Pharmacia&Upjohn Company to form Pharmacia.Pharmacia thentransferred its agricultural operations to a newly created subsidiary,named Monsanto Company(New Monsanto),which it spun off in a two-stage process thatwas completed in 2002.Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.In connection with its spin-off that was completed in 2002,New Monsanto assumed,and agreed to indemnify Pharmacia for,any liabilities related toPharmacias former agricultural business.New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arisingout of,or related to,the agricultural business,and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regardingsuch claims and litigation.27PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)In connection with its spin-off in 1997,Solutia assumed,and agreed to indemnify Pharmacia for,liabilities related to Former Monsantos chemical businesses.As the result of its reorganization under Chapter 11 of the U.S.Bankruptcy Code,Solutias indemnification obligations relating to Former Monsantos chemicalbusinesses are primarily limited to sites that Solutia has owned or operated.In addition,in connection with its spin-off that was completed in 2002,NewMonsanto assumed,and agreed to indemnify Pharmacia for,any liabilities primarily related to Former Monsantos chemical businesses,including,but notlimited to,any such liabilities that Solutia assumed.Solutias and New Monsantos assumption of,and agreement to indemnify Pharmacia for,these liabilitiesapply to pending actions and any future actions related to Former Monsantos chemical businesses in which Pharmacia is named as a defendant,including,without limitation,actions asserting environmental claims,including alleged exposure to polychlorinated biphenyls.Solutia and/or New Monsanto aredefending Pharmacia in connection with various claims and litigation arising out of,or related to,Former Monsantos chemical businesses,and have beenindemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.In 2018,Bayer AG acquiredMonsanto Company(New Monsanto),which is now a subsidiary of Bayer AG.Since the acquisition,New Monsanto has continued to defend and indemnifyPharmacia for these liabilities.Environmental MattersIn 2009,as part of our acquisition of Wyeth,we assumed responsibility for environmental remediation at the Wyeth Holdings LLC(formerly known as WyethHoldings Corporation and American Cyanamid Company)discontinued industrial chemical facility in Bound Brook,New Jersey.Since that time,we haveexecuted or have become a party to a number of administrative settlement agreements,orders on consent,and/or judicial consent decrees,with the U.S.Environmental Protection Agency,the New Jersey Department of Environmental Protection and/or federal and state natural resource trustees to performremedial design,removal and remedial actions,and related environmental remediation activities,and to resolve alleged damages to natural resources,at theBound Brook facility.We have accrued for the currently estimated costs of these activities.We are also party to a number of other proceedings brought under the Comprehensive Environmental Response,Compensation,and Liability Act of 1980,asamended,and other state,local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.Contracts with Iraqi Ministry of HealthIn 2017,a number of U.S.service members,civilians,and their families brought a complaint in the U.S.District Court for the District of Columbia against anumber of pharmaceutical and medical devices companies,including Pfizer and certain of its subsidiaries,alleging that the defendants violated the U.S.Anti-Terrorism Act.The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceuticaland medical device contracts with the Iraqi Ministry of Health and seeks monetary relief.In July 2020,the District Court granted defendants motions todismiss and dismissed all of plaintiffs claims.In January 2022,the Court of Appeals reversed the District Courts decision.In June 2024,the U.S.SupremeCourt issued an order granting certiorari,vacating the Court of Appeals decision,and remanding the case to the Court of Appeals.Allergan Complaint for IndemnityIn 2019,Pfizer was named as a defendant in a complaint,along with King,filed by Allergan Finance LLC(Allergan)in the Supreme Court of the State of NewYork,asserting claims for indemnity related to Kadian,which was owned for a short period by King in 2008,prior to Pfizers acquisition of King in 2010.Thissuit was voluntarily discontinued without prejudice in January 2021.Breach of Contract ComirnatyIn 2023,Pfizer and BioNTech Manufacturing GmbH initiated separate formal proceedings against the Republic of Poland,the Republic of Romania andHungary in Belgiums Court of First Instance of Brussels.Pfizer and BioNTech are seeking an order from the Court holding those countries to theircommitments for COVID-19 vaccine orders,which were placed as part of their contracts signed in 2021.A4.Legal ProceedingsGovernment InvestigationsLike other multi-national pharmaceutical companies,we are subject to extensive regulation by government agencies in the U.S.,other developed markets andmultiple emerging markets in which we operate.Criminal charges,substantial fines and/or civil penalties,limitations on our ability to conduct business inapplicable jurisdictions,corporate integrity or deferred prosecution agreements,as well as reputational harm and increased public interest in the matter couldresult from government investigations in the U.S.and other jurisdictions in which we do business.These matters often involve government requests forinformation on a voluntary basis or through subpoenas after which the government may seek additional information through follow-up requests or additionalsubpoenas.In addition,in a qui tam lawsuit in which the government declines to intervene,the relator may still pursue a suit for the recovery of civil damagesand penalties on behalf of the government.Among the investigations by government agencies are the matters discussed below.28PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Greenstone Antitrust LitigationIn 2019 and 2020,Attorneys General of more than 50 states and territories filed two complaints in the U.S.District Court for the District of
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1Second Quarter 2025Earnings TeleconferenceAugust5,2025Second Quarter 2025 Earnings2IntroductionFrancesca DeMartinoChief Investor Relations Officer,Senior Vice PresidentSecond Quarter 2025 Earnings3 Our discussions during this conference call will include forward-looking statements that are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.We include forward-looking statements about,among other topics,our anticipated operating and financial performance,including financial guidance and projections;changes to Pfizers R&D and commercial organizations;reorganizations;business plans,strategy,goals and prospects;expectations for our product pipeline,in-line products and product candidates,including anticipated regulatory submissions,data read-outs,study starts,approvals,launches,discontinuations,clinical trial results and other developing data,revenue contribution and projections,potential pricing and reimbursement,potential market dynamics,including demand,market size and utilization rates and growth,performance,timing of exclusivity and potential benefits;strategic reviews;leverage and capital allocation objectives;an enterprise-wide cost realignment program(including anticipated costs,savings and potential benefits);a manufacturing optimization program to reduce our cost of goods sold(including anticipated costs,savings and potential benefits);dividends and share repurchases;plans for and prospects of our acquisitions,dispositions and other business development activities,including our acquisition of Seagen and our licensing agreement with 3SBio,and our ability to successfully capitalize on growth opportunities and prospects;manufacturing and product supply;our ongoing efforts to respond to COVID-19;our expectations regarding the impact of COVID-19 on our business,operations and financial results;and other statements about our business,operations and financial results.Among other things,statements regarding revenue and earnings per share growth;anticipated operating and financial performance;the development or commercial potential of our product pipeline,in-line products,product candidates and additional indications or combinations,including expected clinical trial protocols,the timing and potential for the initiation and progress of clinical trials and data read-outs from trials;the timing and potential for the submission of applications for and receipt of regulatory approvals;the timing and potential for product launches and commercialization;expected profile and labeling;potential revenue;expected breakthrough,best or first-in-class or blockbuster status or expected market entry of our medicines or vaccines;the regulatory landscape;and the competitive landscape are forward-looking and are estimates that are subject to change and subject to,among other risks,assumptions and uncertainties,clinical trial,regulatory and commercial success,demand,availability of supply,excess inventory write-offs,product recalls,withdrawals,competitive and market dynamics and recent changes,and potential changes to economic and trade policy in the U.S.and globally,including tariffs,trade restrictions,retaliatory trade measures or other changes in laws,regulations or policy regarding trade,potential changes to U.S.federal or state legislation or regulatory action and/or policy efforts affecting,among other things,pharmaceutical product pricing,including the potential for international reference pricing,including Most-Favored-Nation drug pricing,and changes to vaccine or other healthcare policy in the U.S.These statements may be affected by underlying assumptions that may prove inaccurate or incomplete,and are subject to risks,uncertainties and other factors that may cause actual results to differ materially from past results,future plans and projected future results.Additional information regarding these and other factors can be found in Pfizers Annual Report on Form 10-K for the fiscal year ended December 31,2024 and its subsequent reports on Form 10-Q,including in the sections thereof captioned“Risk Factors”and“Forward-Looking Information and Factors That May Affect Future Results”,as well as in Pfizers subsequent reports on Form 8-K,all of which are filed with the U.S.Securities and Exchange Commission and available at www.sec.gov and .Potential risks and uncertainties also include global economic and/or geopolitical instability,foreign exchange rate fluctuations and inflationary pressures and the uncertainties regarding the impact of COVID-19.The forward-looking statements in this presentation speak only as of the original date of this presentation and we undertake no obligation to update or revise any of these statements.The discussions during this conference call will include certain financial measures that were not prepared in accordance with U.S.generally accepted accounting principles(GAAP).Additional information regarding non-U.S.GAAP financial measures can be found on slides 27-28 and in Pfizers earnings release furnished with Pfizers Current Report on Form 8-K dated August5,2025.Any non-U.S.GAAP financial measures presented are not,and should not be viewed as,substitutes for financial measures required by U.S.GAAP,have no standardized meaning prescribed by U.S.GAAP and may not be comparable to the calculation of similar measures of other companies.Todays discussions and presentation are intended for the investor community only;they are not intended to promote the products referenced herein or otherwise influence healthcare prescribing decisions.Definitive conclusions cannot be drawn from cross-trial comparisons or anticipated data as they may be confounded by various factors and should be interpreted with caution.All trademarks in this presentation are the property of their respective owners.Certain of the products and product candidates discussed during this conference call are being co-researched,co-developed and/or co-promoted in collaboration with other companies for which Pfizers rights vary by market or are the subject of agreements pursuant to which Pfizer has commercialization rights in certain markets.Forward-Looking Statements and Non-GAAP Financial InformationSecond Quarter 2025 Earnings4Opening RemarksAlbert BourlaChairman and Chief Executive OfficerSecond Quarter 2025 Earnings5 Improve R&D productivity with sharpened focus Expand margins and maximize operational efficiency Achieve commercial excellence in our key categories Optimize capital allocationExecution with Focus and Discipline on our Strategic PrioritiesSecond Quarter 2025 Earnings6Elrexfio:Potential to Become a SOC BCMA Bispecific AntibodyEncouraging Data Across Multiple Myeloma Treatment SettingsDifferentiated and Convenient Dosing Regimen for Multiple MyelomaPivotal Program with Potential to Deliver 5X Increase in Eligible PatientsRepresents MagnetisMM clinical trial.1.$85M in 2Q 2025 worldwide revenue vs.$22M in 2Q 2024(unaudited).2.Prince et al.American Society of Hematology 2024 Annual Meeting&Exposition(Abstract 4738),results from BCMA nave cohort(pivotal cohort).3.Quach et al.American Society of Clinical Oncology 2025 Annual Meeting(Abstract 7504)results from Part 1 Dose Level G of trial.4.See product Prescribing Information for more details.5.Source:Kantar Health/Oracle Lifesciences(projections for 2027),Internal assumptions.6.Elrexfio is FDA approved under accelerated approval for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy including a proteasome inhibitor,an immunomodulatory agent,and an anti-CD38 monoclonal antibody.7.EvaluatePharma Database.BCMA=B-cell maturation antigen;Dara=daratumumab;DCE MM=double class exposed multiple myeloma;Len=lenalidomide;mDOR=median duration of response;MM=multiple myeloma;Mo=month;NDMM=newly diagnosed multiple myeloma;ORR=objective response rate;OS=overall survival;Ph=phase;SOC=standard-of-care;TCE MM=triple class exposed(1 immunomodulatory agent,1 proteasome inhibitor,and 1 anti-CD38 antibody)multiple myeloma;VGPR=very good partial response;WW=worldwide;YoY=year-over-yearTriple Class Exposed Multiple Myeloma(MagnetisMM-3 Pivotal Single-arm Ph 2 Study,n=123)2mDOR Not Reached61%of responses ongoing at 30 mo24.6 mo Newly Diagnosed Multiple Myeloma(MagnetisMM-6 Ph 3 Study Part 1,n=37)3Elrexfio Monotherapy97.3%Confirmed ORR94.6%With VGPR or betterElrexfio Dara Len:Combinable with manageable safetySubcutaneous Administration withFixed(Non-weight Based)DosingFDA Approved Indication Now Includes Less Frequent(Once Every Four Weeks)Dosing Option for Select Patients Over Time415K32KCurrent Label6Epidemiology(U.S. EU5)5Ongoing Pivotal ProgramPotential Approvals from 2026-2030Earlier lines of therapyMM-3MM-5MM-32MM-6MM-7TCE MMDCE MMNDMMRapid,YoY quarterly revenue growth(280%1),and leading class share in new markets(e.g.,Japan)69KMedian OS(secondary endpoint)Projected$44B MM Market in 20307(WW)Second Quarter 2025 Earnings7Sigvotatug Vedotin*(SV):Potential First-in-Class ADC for NSCLCEncouraging Data with Both SV Monotherapy&Pembro ComboOngoing and Potential UpcomingPhase 3 TrialsPotential to Address ImportantUnmet Needs51L NSCLC500KGlobal Patients85KU.S.Patients50K 200KGlobal PatientsU.S.PatientsComparable ORRs for TPS 1&TPS 1*Sigvotatug vedotin is an investigational agent and its safety and effectiveness have not been established.1.Peters et al.American Society of Clinical Oncology 2024 Annual Meeting(Abstract 8521).2.Efficacy evaluable set.3.Sehgal et al.American Society of Clinical Oncology 2025 Annual Meeting(Abstract 3010).4.The three patients with unconfirmed responses at data cutoff had confirmatory scans after data cutoff.5.Represents directional 2025 treated patients adapted from US CancerMPact Patient Metrics,Oracle(2025).1L values exclude patients with actionable genomic alterations.6.EvaluatePharma Database.1L=first-line;2L =second-line plus;ADC=antibody-drug conjugate;cORR=confirmed objective response rate;DCR=disease control rate;IB6=integrin-beta 6;NSCLC=non-small cell lung cancer;Nsq=non-squamous;ORR=objective response rate;Pembro=pembrolizumab;SOC=standard-of-care;TPS=tumor proportion score;WW=worldwideGlobal Phase 3 Trial in 2L NSCLCFully Enrolled with Data Anticipatedin 2026Phase 3 Now Enrolling in 1L TPS-high NSCLC;Additional 1L NSCLCTrials PlannedPotential to Change IB6-Expressing Tumor SOC by Combining VedotinADC with Anti-PD-1 MediatedTumor Cell DeathPh 1 Monotherapy:Heavily Pretreated Nsq Taxane Nave NSCLC(n=42)1,231%cORR11.6 mo Median DOR Ph 1 SV Pembro Expansion Cohort:1L NSCLC(n=21)2,357.1%ORR490.5RNon-squamous 2L NSCLC Sigvotatug vedotin ADC targets integrin-beta 6(IB6),which is expressed in over 90%of NSCLC tumorsProjected$60B NSCLC Market in 20306(WW)Second Quarter 2025 Earnings819.781.39On-demandBypassing AgentHympavziProphylaxisHympavzi:Latest Ph 3 Data Further Strengthen Differentiated ProfilePotential to expand indication to address the increased disease burden of patients with hemophilia with inhibitors1Recent Positive Data inHemophilia A/B with Inhibitors#93%p 800Kwith hemophilia globally2 Differentiated ProfileFirst Anti-TFPI Approved inU.S./EU for the Treatment of Hemophilia A or B1First Hemophilia Medicine Approvedin U.S./EU to be Administered via aPrefilled Autoinjector Pen1Administered as a Fixed Dose with a Once Weekly Subcutaneous Injection that Requires Minimal Preparation20%with Hem A and3%with Hem B will develop inhibitors to clotting factors3ABR of Treated BleedsProjected$10B Hemophilia Market in 20306(WW)Second Quarter 2025 Earnings9C.difficile:Potential to Deliver First Approved Vaccine Clinical Data Show Promising PotentialCLOVER Ph 3 Study ofFirst-Generation Candidate*Next-Generation Candidate*100%Vaccine efficacy for medically attended C.diff infection175%Reduction in median C.diff infection duration in vaccine group14-foldIncrease in functional toxin neutralizing antibody titers compared to first generation in Ph 22 doseRegimen compared to three doses with first generation New vaccine in Ph 2 builds on first-gen candidate that showed potential to significantly reduce C.diff healthcare burden*C.diff vaccine candidate is an investigational agent and its safety and effectiveness have not been established.Post-hoc analysis.1.Donskey et al.Clin Infect Dis.2024 Aug 24:ciae410.2.U.S.Centers for Disease Control and Prevention:“About C.diff”(visited August 4,2025).3.Feuerstadt et al.BMC Infect Dis23,132(2023).C.diff=C.difficile;Gen=generation;Ph=phaseNext-Generation Program of Updated FormulationAddition of Adjuvant to Increase the Strength and Magnitude of the Immune ResponseProjected Phase 3 Startin 2H 2025New Primary Endpoints to Reflect Prevention of Severe Disease OutcomesAddressing an Important Unmet Need500KAnnual U.S.C.diff infections2 Nearly30KAnnual U.S.C.diff deaths3 ApproximatelyNo Vaccinecurrently available to prevent primary or recurrent C.difficile infectionSecond Quarter 2025 Earnings103SBios 707:Seamless Strategic Fit*SSGJ-707 is an investigational agent and its safety and effectiveness have not been established.1.EvaluatePharma Database.ADC=antibody-drug conjugate;MOA=mechanism of action;Ph=phase;WW=worldwideSeamless fit with Pfizer strategyMOA and target indications aligned with core modalities and franchise presenceContinued execution on business development to drive growthFollowing 3SBio deal,business development capacity is$13B to help enable growth at the end of this decade and into the nextEncouraging Ph 1/2 safety,efficacyPotential to become a backbone therapy for multiple indications*Creating plans across Ph 3 development opportunitiesStudy details,including potential combinations with Pfizers ADCs,to be communicated later this year.Pfizer plans to manufacture drug substance and drug product in the U.S.PD-1 x VEGF bispecific(PF-08634404):a potentially transformative MOA with broad development opportunitiesPotential Next Wave PD-1 Immunotherapy in Established$55B Market1(WW)Second Quarter 2025 Earnings11Achieve Commercial Excellence in our Key CategoriesQ2 25Continued market leadership and growth with established brands unlocking higher productivity,performance across U.S.and International divisionsfamily1 21%YoY operational growth Foundation of care for patients with ATTR-CM Strong volume growth with differentiated clinical profile 6%YoY operational growth Clear leader in growing oral anticoagulant market Growth outpacing market in key International countries New direct-to-patient option in U.S.provides simple,transparent access 1.Vyndaqel family includes global revenues from Vyndaqel,as well as revenues for Vyndamax in the U.S.and Vynmac in Japan.2.Eliquis is being commercialized in collaboration with Bristol Myers Squibb.ATTR-CM=Transthyretin Amyloid Cardiomyopathy;YoY=year-over-year2Second Quarter 2025 Earnings12Achieve Commercial Excellence in our Key CategoriesQ2 25Strong underlying demand in competitive classes among recently launched and acquired products which grew 15%op YoYStrong commercial execution driving growth in TRx,47%market share leadership in U.S.Unlocking additional International growth with expanded accessImpact on net revenues in U.S.from IRA Medicare Part D redesign,340B46%YoY operational growthHigher demand in U.S.Growth and share gains in prioritized International markets such as Japan,UKand Spain138%YoY operational growth2Market share 50%for Padcev,in combination with pembrolizumab,in 1L la/mUCFuture growth opportunities include those for patients with MIBC,if successful and approved1.Pfizer and Astellas have a collaboration agreement to co-develop PADCEV.2.Reflects growing demand and the one-time favorable impact from a transition to a wholesaler distribution model.la/mUC=locally advanced/metastatic urothelial cancer;MIBC=muscle-invasive bladder cancer;TRx=total prescriptions;YoY=year-over-yearSecond Quarter 2025 Earnings13Achieve Commercial Excellence in our Key Categories48%YoY operational growthCROWN:Phase 3 study showed majority of patients with ALK advanced lung cancer lived beyond 5 years without disease progression14%YoY operational growthGrowth outpacing market in key International countriesEMBARK:Positive topline results from OS analysis from the Phase 3 studyARCHES:5-year follow-up data from the Phase 3 trial show Xtandi plus ADT reduces risk of death by 30#%YoY operational growthBREAKWATER:Braftovi combination regimen cuts risk of death in half for patients with mCRC with BRAF V600E-mutationQ2 25Positive data contributing to growth and helping establish key Oncology products as standards of care121.We have exclusive rights to Braftovi and Mektovi in the U.S.,Canada and certain emerging markets,and Ono Pharmaceutical Co.,Ltd.,Medison Pharma and Pierre Fabre Laboratories have exclusive rights in all other markets.2.Xtandi is being jointly developed and commercialized in the United States in collaboration with Astellas.Astellas has development and commercialization rights outside the U.S.ALK =anaplastic lymphoma kinase-positive;ADT=androgen deprivation therapy;mCRC=metastatic colorectal cancer;OS=overall survival;YoY=year-over-yearSecond Quarter 2025 Earnings14Financial ReviewDavid DentonChief Financial Officer,Executive Vice PresidentSecond Quarter 2025 Earnings15Q2 2025 Revenues and Adjusted1 Diluted EPS1.See slides 27-28 for definitions,including with respect to non-GAAP financial measures.RevenuesAdjusted1 Diluted EPS$14.7BSolid Second Quarter Results Demonstrate Disciplined Execution$0.78Second Quarter 2025 Earnings161.See slides 27-28 definitions,including with respect to non-GAAP financial measures.2.Favorable FX impact on Revenue of$22M(or%);unfavorable FX impact on Adj.Diluted EPS of$0.01(or-1%).3.Q2 2025 GAAP Diluted EPS of$0.51(or*GAAP%change).*Indicates calculation not meaningful or results are greater than 100%.Quarterly Revenue and Non-GAAP Financial Highlights1$in billions,except EPSQ2 2025Q2 2024Op.ChangeKey HighlightsRevenue2$14.7B$13.3B 10%Increase primarily driven by an increase in revenues for the Vyndaqel family,Comirnaty,Paxlovid,Padcev,Eliquis and several other products across categories despite the unfavorable impact of higher manufacturer discounts resulting from the IRA Medicare Part D RedesignAdj.1 Cost of Salesas a%of revenues23.9 .8% 3.1 pptsIncrease primarily driven by the non-recurrence of a favorable revision to accrued royalties recorded in the second quarter of 2024Adj.1 SI&A Expenses$3.4B$3.7B-8crease primarily reflecting focused investments and ongoing productivity improvements that drove a decrease in marketing and promotional spend for various products and lower spending in corporate enabling functionsAdj.1 R&D Expenses$2.4B$2.7B-9crease primarily driven by a net decrease in spending due to pipeline focus and optimization,as well as lower compensation-related expensesAdj.1,2,3 Diluted EPS$0.78$0.60 31%Increase primarily driven by an increase in revenues,improved operating efficiency,and a lower effective tax rate,which benefited from a favorable change in the jurisdictional mix of earningsSecond Quarter 2025 Earnings171H 20241H 2025$in BillionsUpcoming LOEs expected to be largely offset by strong revenue growth from recent launches and acquired productsStrong Revenue Growth from Recent Launches1 and Acquired Products2$4.1$4.71.Recently Launched products primarily includes:Prevnar 20(Pediatrics),Abrysvo(Older Adult/Maternal),Elrexfio,Cibinqo,Talzenna,Litfulo,Ngenla,Hympavzi,Penbraya Adolescent2.Acquired Products primarily includes:Padcev,Adcetris,Tukysa,Tivdak,Nurtec/Vydura,VelsipityLOE=loss of exclusivity;YoY=year-over-year 15%op YoYSecond Quarter 2025 Earnings18Expect a more balanced capital allocationbetween reinvestment and returning value to shareholders1.See slides 27-28 for definitions.2.Current financial guidance does not anticipate any share repurchases in 2025.Reinvest in Our BusinessMaintain and Grow Our DividendShare Repurchases2De-lever Our Balance Sheet$4.9BReturned to shareholders2.7xContinue to maintain gross leverage1 target$4.7BIn internalR&DNone completedto date in 2025Driving a balanced capital allocation strategy to reinvest in our business and return value to shareholdersYTD Q2 2025:Allocating Capital to Enhance Shareholder ValueSecond Quarter 2025 Earnings192024202520262027Phase 1 Manufacturing Optimization ProgramCost Realignment Program1Cost Realignment Program-R&DDelivering Operating Margin Expansion through Productivity GainsSignificant progress driving operational efficiency throughout our businessExpecting$7.2B in total net cost savings by end of 2027 while also reinvesting$500M to strengthen R&D productivityNet Cost Savings*Reinvested*$1.5B$5.7B$0.5B*Anticipated1.See slides 27-28 for definitions.$4.5B$1.2BSecond Quarter 2025 Earnings20Revenues$61.0 to$64.0 BillionAdjusted1 SI&A Expenses$13.1 to$14.1 Billion(previously$13.3 to$14.3 billion)Adjusted1 R&D Expenses$10.4 to$11.4 Billion(previously$10.7 to$11.7 billion)Effective Tax Rate on Adjusted1 Income13.0%(previously approximately 15.0%)Adjusted1,2 Diluted EPS$2.90 to$3.10(previously$2.80 to$3.00)1.See slides 27-28 for definitions,including with respect to non-GAAP financial measures,and additional information regarding Pfizers 2025 financial guidance.Current financial guidance does not anticipate any share repurchases in 2025.2 Includes a one-time$1.35 billion Acquired In-Process R&D charge related to the licensing agreement with 3SBio,Inc.that will be recorded in the third quarter of 2025 with an expected unfavorable impact of approximately$0.20.2025 Financial Guidance1:Reaffirms 2025 Revenue Range and Raises Adjusted1 Diluted EPS RangeSecond Quarter 2025 Earnings21Key Takeaways and ExpectationsContinued focus on execution,productivity gains and operating margin expansion to drive long-term shareholder value Focused on maximizing commercial value of product portfolio Committed to driving value-creating innovation and strengthening pipeline Productivity gains and operating margin expansion driven by ongoing cost improvement initiatives Continued focus on mitigation opportunities in response to potential further impacts from changing trade and tariff policiesSecond Quarter 2025 Earnings22Q&A SessionQuestionsAnswersSecond Quarter 2025 Earnings23ADC=Antibody-drug conjugate;BC=breast cancer;BRAFm=BRAF-mutant;C.difficile=Clostridioides difficile;CDK4/6i=cyclin-dependent kinase 4/6 inhibitor;CSPC=castration-sensitive prostate cancer;DCE=double-class exposed;DLBCL=diffuse large B-cell lymphoma;ER =estrogen-receptor positive;ESR1m=estrogen receptor 1-mutant;HER2 =human epidermal growth factor receptor 2 positive;ITT=intent-to-treat;mBC=metastatic breast cancer;mCRC=metastatic colorectal cancer;mCRPC=metastatic castration-resistant prostate cancer;mCSPC=metastatic castration-sensitive prostate cancer;mHNSCC=metastatic head and neck squamous cell carcinoma;MIBC=muscle-invasive bladder cancer;NMIBC=non-muscle invasive bladder cancer;NSCLC=non-small-cell lung cancer;PCV=pneumococcal conjugate vaccine;PD-1=programmed cell death protein-1;PD-L1=programmed death ligand-1;PD-L1-high=50%of tumor cells expressing PD-L1;RSV=respiratory syncytial virus;subq=subcutaneousAnticipated Regulatory DecisionsCompoundIndicationABRYSVO(EU)RSV Infection(18-59 Years)ADCETRIS(U.S.)DLBCLBRAFTOVI1L BRAFm mCRC(PFS)TALZENNA XTANDImCRPC all-comersAnticipated Phase 3 ReadoutsCompoundIndicationBRAFTOVI(BREAKWATER PFS)1L BRAFm mCRCELREXFIODCE Multiple MyelomaHYMPAVZIHemophilia A or B with InhibitorsInclacumabSickle Cell DiseasePADCEV*MIBCSasanlimab(subq PD-1)NMIBCTALZENNA XTANDI1L CSPCTUKYSAHER2 BCVepdegestrant*2L ER mBCPotential Pivotal Program StartsCompoundIndication1H 2025Atirmociclib(CDK4i)1L mBCMevrometostat XTANDI(MEVPRO-3)1L mCSPCSigvotatug vedotin(SV)*1L PD-L1-High NSCLC2H 2025C.difficile Vaccine-Updated FormulationC.difficile InfectionDanuglipronChronic Weight ManagementKAT6i2L mBCNURTECMenstrual MigrainePCV 25-valentPneumococcal Infection(Adult)PDL1V ADC1L mHNSCC PDL1V ADC2L NSCLCPonsegromabCancer CachexiaVepdegestrant Atirmociclib1L mBCVepdegestrant CDK4/6i2L mBCSelect 2025 Pipeline CatalystsReferences to indication are intended to be high-level and may present disease area rather than indication.Please see Pfizers SEC filings,press releases and other disclosures for additional information.Some pivotal program starts may be subject to generation of positive data in earlier-stage studies and/or alignment with regulatory agencies.Many Phase 3 studies are event-driven and readouts are therefore subject to change.Pfizer assumes no obligation to update this information as a result of new information or future events or developments.Co-development partners:Adcetris(Takeda),Padcev(Astellas),vepdegestrant(Arvinas),Xtandi(Astellas)*Study sponsored by Merck;potential based on interim analysis|*Emerging data from ongoing studies will inform additional Phase 3 starts in 1L NSCLC*Vepdegestrant in 2L ER mBC(VERITAC-2)achieved primary endpoint in ESR1m population,demonstrating statistically significant and clinically meaningful improvement in PFS;did not reach statistical significance in improvement in PFS in ITT populationThe anticipated regulatory decision for BRAFTOVI is the conversion of an accelerated approval to a full approvalSecond Quarter 2025 Earnings24Late-Stage Development Pipeline Progress April 29,2025 to August 4,2025Summary Updates to Pipeline ProgressAdvanced to Phase 2Advanced to Phase 3Advanced to RegistrationApprovedFocus AreaCompoundIndicationCompoundIndicationCompoundIndicationCompoundIndicationInflammation and Immunology PF-07275315(anti-IL-4/IL-13/TSLP)PF-07868489(anti-BMP9)Asthma Pulmonary Arterial HypertensionInternal MedicineOncology SSGJ-707(PF-08634404)*1L NSCLC(squamous)1L NSCLC(non-squamous)1L Metastatic Colorectal Cancer Sasanlimab BCG High-Risk NMIBCVaccines Comirnaty LP.8.1(EU)COVID-19 vaccine*Added to Pfizers pipeline via the completion of global,ex-China,licensing agreement with 3SBio,Inc.BCG=Bacillus Calmette-Guerin;BMP9=bone morphogenetic protein 9;IL-4=interleukin-4;IL-13=interleukin-13;NMIBC=non-muscle-invasive bladder cancer;NSCLC=non-small cell lung cancer;TSLP=thymic stromal lymphopoietinSecond Quarter 2025 Earnings25Glossary:Select Pipeline Assets(1 of 2)*Anticipated regulatory decision is the conversion of an accelerated approval to a full approval|*Pfizer and Astellas have a collaboration agreement to co-develop PADCEVBCMA=B-cell maturation antigen;CD3=cluster of differentiation 3;CDK4=cyclin-dependent kinase 4;EZH2=enhancer of zeste homolog 2;HER2=human epidermal growth factor receptor 2;HR =hormone receptor-positive;PARP=poly(ADP-ribose)polymerase;PD-1=programmed cell death protein-1;RPD=Rare Pediatric Disease designationCompound NameMechanism of ActionTarget IndicationPhase of DevelopmentSubmission TypeBRAFTOVI(encorafenib) ERBITUX(cetuximab) chemotherapyBRAF kinase inhibitor1L BRAF-Mutant Metastatic Colorectal Cancer(BREAKWATER)*RegistrationProduct Enhancementsasanlimab(PF-06801591) Bacillus Calmette-Guerin(BCG)Anti-PD-1High-Risk Non-Muscle-Invasive Bladder Cancer(CREST)(Biologic)RegistrationNew Molecular Entityatirmociclib(PF-07220060)CDK4 inhibitor1L HR /HER2-Metastatic Breast Cancer(FourLight-3)Phase 3New Molecular EntityELREXFIO(elranatamab-bcmm)BCMA-CD3 bispecific antibodyRelapsed/Refractory Multiple Myeloma Double-Class Exposed(MM-5)(Biologic)Phase 3Product EnhancementHYMPAVZI(marstacimab-hncq)Anti-tissue factor pathway inhibitorHemophilia(inhibitor cohort)(Biologic)(FAST TRACK,ORPHAN U.S.)Phase 3Product Enhancementinclacumab(PF-07940370)Anti-P-selectinVaso-occlusive(VOC)reduction in patients with Sickle Cell Disease(Biologic)(RPD,ORPHAN U.S.)Phase 3New Molecular Entitymevrometostat(PF-06821497) XTANDI(enzalutamide)EZH2 inhibitor androgen receptor inhibitorMetastatic Castration-Resistant Prostate CancerPhase 3New Molecular EntityNURTEC(rimegepant)Calcitonin gene-related peptide(CGRP)receptor antagonistMenstrually-Related MigrainePhase 3Product EnhancementPADCEV(enfortumab vedotin)Nectin-4 directed antibody-drug conjugate Muscle-Invasive Bladder Cancer(Biologic)*Phase 3Product Enhancementsigvotatug vedotin(PF-08046047)Integrin beta-6-directed antibody-drug conjugate2L Metastatic Non-Small Cell Lung Cancer(mNSCLC)(Be6A LUNG-01)(Biologic)Phase 3New Molecular EntityTALZENNA(talazoparib) XTANDI(enzalutamide)PARP inhibitorDNA Damage Repair(DDR)-Deficient Metastatic Castration Sensitive Prostate Cancer(TALAPRO-3)Phase 3Product EnhancementTUKYSA(tucatinib)HER2 tyrosine kinase inhibitor1L HER2 Maintenance Metastatic Breast Cancer(HER2CLIMB-05)Phase 3Product EnhancementSecond Quarter 2025 Earnings26Glossary:Select Pipeline Assets(2 of 2)Compound NameMechanism of ActionTarget IndicationPhase of DevelopmentSubmission Typevepdegestrant(ARV-471)ER-targeting PROTAC protein degraderER /HER2-Metastatic Breast Cancer*(VERITAC 2)(FAST TRACK U.S.)Phase 3New Molecular EntityPF-07275315Anti-IL-4/IL-13/TSLPAsthma(Biologic)Phase 2Product EnhancementPF-07831694Prophylactic vaccine protein subunitClostridioides difficile(C.difficile)updated formulationPhase 2New Molecular EntityPF-07868489Anti-BMP9Pulmonary Arterial Hypertension(Biologic)Phase 2New Molecular EntityPF-07872412Prophylactic vaccine polysaccharide conjugatePneumococcal Infection(FAST TRACK U.S.)Phase 2New Molecular EntityPF-07976016GIPR antagonistChronic Weight ManagementPhase 2New Molecular Entityponsegromab(PF-06946860)Growth Differentiation Factor 15(GDF15)monoclonal antibodyCachexia in Cancer(Biologic)Phase 2New Molecular EntitySSGJ-707(PF-08634404)PD-1xVEGF Bispecific Antibody1L Non-Small Cell Lung Cancer(squamous)(Biologic)*Phase 2New Molecular EntitySSGJ-707(PF-08634404)PD-1xVEGF Bispecific Antibody1L Non-Small Cell Lung Cancer(non-squamous)(Biologic)*Phase 2Product EnhancementSSGJ-707(PF-08634404)PD-1xVEGF Bispecific Antibody1L Metastatic Colorectal Cancer(Biologic)*Phase 2Product EnhancementPF-07248144KAT6 epigenetic modifierBreast Cancer MetastaticPhase 1New Molecular EntityPF-08046054(PDL1V)PD-L1-directed antibody-drugconjugateAdvanced Solid Tumors(Biologic)Phase 1New Molecular Entity*Pfizer and Arvinas have a collaboration agreement to co-develop vepdegestrant|PROTAC is a registered trademark of Arvinas*3SBio,Inc.is conducting on-going Phase 2 trials in China for China and Pfizer will conduct global trials,excluding in ChinaBMP9=bone morphogenetic protein 9;ER =estrogen receptor-positive;GIPR=glucose-dependent insulinotropic polypeptide receptor;HER2=human epidermal growth factor receptor 2;IL-4=interleukin-4;IL-13=interleukin-13;PD-1=programmed cell death protein-1;PD-L1=programmed death ligand-1;TSLP=thymic stromal lymphopoietin;VEGF=vascular endothelial growth factorSecond Quarter 2025 Earnings27(1)Pfizer does not provide guidance for U.S.generally accepted accounting principles(GAAP)Reported financial measures(other than revenues)or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of unusual gains and losses,certain acquisition-related expenses,gains and losses from equity securities,actuarial gains and losses from pension and postretirement plan remeasurements,potential future asset impairments and pending litigation without unreasonable effort.These items are uncertain,depend on various factors,and could have a material impact on GAAP Reported results for the guidance period.Financial guidance for full-year 2025 reflects the following:Does not assume the completion of any business development transactions not completed as of August5,2025.An anticipated unfavorable revenue impact of approximately$0.5 billion due to recent and expected generic and biosimilar competition for certain products that have recently lost patent or regulatory protection or that are anticipated to lose patent or regulatory protection.Exchange rates assumed are a blend of actual rates in effect through second-quarter 2025 and mid-July 2025 rates for the remainder of the year.Guidance for Adjusted(2)diluted EPS assumes diluted weighted-average shares outstanding of approximately 5.72 billion shares,and assumes no share repurchases in 2025.The companys guidance absorbs the impact of the currently imposed tariffs from China,Canada,and Mexico,as well as potential price changes this year based on the letter received on July 31,2025 from President Trump.(2)Adjusted income and Adjusted diluted earnings per share(EPS)are defined as U.S.GAAP net income attributable to Pfizer Imon shareholders and U.S.GAAP diluted EPS attributable to Pfizer Imon shareholders before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items.See the reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for the second quarter and the first six months of 2025 and 2024.Adjusted income and its components and Adjusted diluted EPS measures are not,and should not be viewed as,substitutes for U.S.GAAP net income and its components and diluted EPS(3).See the Non-GAAP Financial Measure:Adjusted Income section of Managements Discussion and Analysis of Financial Condition and Results of Operations in Pfizers 2024 Annual Report on Form 10-K and the Non-GAAP Financial Measure:Adjusted Income section in Pfizers earnings release furnished with Pfizers Current Report on Form 8-K dated August5,2025 for a definition of each component of Adjusted income as well as other relevant information.(3)Revenues is defined as revenues in accordance with U.S.GAAP.Reported net income and its components are defined as net income attributable to Pfizer Imon shareholders and its components in accordance with U.S.GAAP.Reported diluted EPS is defined as diluted EPS attributable to Pfizer Imon shareholders in accordance with U.S.GAAP.Footnotes(Page 1 of 2)Second Quarter 2025 Earnings28(4)On track to deliver approximately$7.7 billion in anticipated overall savings(approximately$7.2 billion of net cost savings)from previously announced cost improvement initiatives:Approximately$4.5 billion of overall net cost savings from Pfizers ongoing cost realignment program are expected to be achieved by the end of 2025.An additional approximately$1.2 billion of anticipated net cost savings,primarily in SI&A,is expected to be fully achieved by the end of 2027.The net cost savings are calculated versus the midpoint of Pfizers 2023 SI&A and R&D expense guidance provided on August 1,2023.On track to deliver anticipated R&D re-organization cost savings of approximately$500 million to be fully realized by the end of 2026,with savings to be reinvested in the pipeline.The first phase of the Manufacturing Optimization Program is on track to deliver approximately$1.5 billion in net cost savings by the end of 2027,with initial savings anticipated in the latter part of 2025.(5)References to operational variances in this presentation pertain to period-over-period changes that exclude the impact of foreign exchange rates.Although foreign exchange rate changes are part of Pfizers business,they are not within Pfizers control and because they can mask positive or negative trends in the business,Pfizer believes presenting operational variances excluding these foreign exchange changes provides useful information to evaluate Pfizers results.(6)Pfizers fiscal year-end for international subsidiaries is November 30 while Pfizers fiscal year-end for U.S.subsidiaries is December 31.Therefore,Pfizers second quarter and first six months for U.S.subsidiaries reflects the three and six months ended on June29,2025 and June30,2024,while Pfizers second quarter and first six months for subsidiaries operating outside the U.S.reflects the three and six months ended on May25,2025 and May26,2024.(7)Gross leverage(Adjusted Debt to Non-GAAP Adjusted EBITDA ratio)is determined by comparing our total debt(including short-term borrowings,long-term debt,repatriation tax,and lease liabilities(short-and long-term)as of June29,2025 to Non-GAAP Adjusted EBITDA.Non-GAAP Adjusted EBITDA is determined by making the following adjustments to GAAP Income/(loss)from continuing operations before provision/(benefit)for taxes on income/(loss):(i)adding net interest expense,depreciation&amortization,acquisition-related charges,restructuring charges and asset impairment charges;and(ii)adjusting by actuarial valuation and other pension and postretirement plan gains/(losses),gains/(losses)on equity securities,and certain other certain significant items.The information contained on our website or any third-party website is not incorporated by reference into this presentation.Footnotes(Page 2 of 2)
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gPfizer Reports Strong Second-Quarter 2025 Results And Raises 2025 EPS GuidanceStrengthened Commercial Execution Driving Topline GrowthContinued Progress Across R&D PipelineExpanded Programs On Track to Deliver Net Cost Savings TargetsNEW YORK,Tuesday,August 5,2025 Pfizer Inc.(NYSE:PFE)reported financial results for the second quarter of 2025 and reaffirmed its 2025 Revenue guidance while raising guidance(1)for Adjusted(2)diluted EPS.EXECUTIVE COMMENTARYDr.Albert Bourla,Chairman and CEO of Pfizer:“Pfizer had another strong quarter of focused execution and were pleased with our progress in advancing our R&D pipeline,driving our commercial performance and expanding our margins.We continue to strengthen our company for the future and were confident in our ability to create further value for patients and our shareholders.”David Denton,CFO and EVP of Pfizer:“Our robust second-quarter Revenue and EPS performance demonstrates our continued focus on commercial execution and operational efficiency.We raised our full-year 2025 Adjusted diluted EPS guidance,demonstrating confidence in our ability to execute against our strategic priorities and deliver strong results for shareholders.”OVERALL RESULTSSecond-Quarter 2025 Revenues of$14.7 Billion,Representing 10%Year-over-Year Operational GrowthSecond-Quarter 2025 Reported(3)Diluted EPS of$0.51,and Adjusted(2)Diluted EPS of$0.78Reaffirms Full-Year 2025 Revenue Guidance(1)in a Range of$61.0 to$64.0 BillionRaises Full-Year 2025 Adjusted(2)Diluted EPS Guidance(1)by$0.10 to a Range of$2.90 to$3.10,which Absorbs a One-Time Impact of Approximately$0.20 Related to 3SBio TransactionOn Track to Deliver Approximately$7.2 Billion in Overall Anticipated Net Cost Savings from Previously Announced Cost Improvement Initiatives(4)by End of 2027,Driving Productivity Gains and Operating Margin Expansion-1-Some amounts in this press release may not add due to rounding.All percentages have been calculated using unrounded amounts.References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates(5).Results for the second quarter and first six months of 2025 and 2024(6)are summarized below.($in millions,except per share amounts)Second-QuarterSix Months 20252024%Change20252024%ChangeRevenues$14,653$13,283 10%$28,367$28,162 1%Reported(3)Net Income 2,910 41*5,877 3,156 86%Reported(3)Diluted EPS 0.51 0.01*1.03 0.55 86justed(2)Income 4,434 3,400 30%9,671 8,074 20justed(2)Diluted EPS 0.78 0.60 30%1.69 1.42 20%*Indicates calculation not meaningful or results are greater than 100%.REVENUES($in millions)Second-QuarterSix Months 20252024%Change20252024%Change TotalOper.TotalOper.Global Biopharmaceuticals Business(Biopharma)$14,305$12,991 10%$27,746$27,595 1%1%Pfizer CentreOne(PC1)328 278 18X5 535 9%Pfizer Ignite 20 15 3887 32 16%TOTAL REVENUES$14,653$13,283 10%$28,367$28,162 1%2%-2-2025 FINANCIAL GUIDANCE(1)Reaffirms full-year 2025 Revenue guidance and raises Adjusted(2)diluted EPS guidance(1)by$0.10 at the midpoint to a range of$2.90 to$3.10.The updated 2025 Adjusted(2)diluted EPS guidance takes into consideration our strong year-to-date performance,continued confidence in our business,a favorable impact from foreign exchange,progress with ongoing cost improvement initiatives,and improvement in our effective tax rate.Includes a one-time$1.35 billion Acquired In-Process R&D charge related to the licensing agreement with 3SBio,Inc.that will be recorded in the third quarter of 2025 with an expected unfavorable impact of approximately$0.20.The companys guidance absorbs the impact of the currently imposed tariffs from China,Canada,and Mexico,as well as potential price changes this year based on the letter received on July 31,2025 from President Trump.Revenues$61.0 to$64.0 billionAdjusted(2)SI&A Expenses$13.1 to$14.1 billion(previously$13.3 to$14.3 billion)Adjusted(2)R&D Expenses$10.4 to$11.4 billion(previously$10.7 to$11.7 billion)Effective Tax Rate on Adjusted(2)IncomeApproximately 13.0%(previously approximately 15.0%)Adjusted(2)Diluted EPS$2.90 to$3.10(previously$2.80 to$3.00)CAPITAL ALLOCATIONDuring the first six months of 2025,Pfizer deployed its capital in a variety of ways,which primarily included:Reinvesting capital into initiatives intended to enhance the future growth prospects of the company,including:$4.7 billion invested in internal research and development projects,and Approximately$150 million invested in business development transactions.Separately,the completed 3SBio transaction will be recorded in third-quarter 2025.Returning capital directly to shareholders through$4.9 billion of cash dividends,or$0.86 per share of common stock.-3-No share repurchases have been completed to date in 2025.As of August 5,2025,Pfizers remaining share repurchase authorization is$3.3 billion.Current financial guidance does not anticipate any share repurchases in 2025.The company expects to continue to de-lever in a prudent manner in order to maintain a balanced capital allocation strategy.This includes maintaining the flexibility to deploy capital towards potential value-creating business development transactions and the potential to return capital to shareholders through share repurchases.Diluted weighted-average shares outstanding of 5,706 million and 5,696 million were used to calculate Reported(3)and Adjusted(2)diluted EPS for second-quarter 2025 and 2024,respectively.QUARTERLY FINANCIAL HIGHLIGHTS(Second-Quarter 2025 vs.Second-Quarter 2024)Second-quarter 2025 revenues totaled$14.7 billion,an increase of$1.4 billion,or 10%,compared to the prior-year quarter,reflecting an operational increase of$1.3 billion,or 10%,as well as a favorable impact of foreign exchange of$22 million.The operational increase was primarily driven by an increase in revenues for the Vyndaqel family,Comirnaty,Paxlovid,Padcev,Eliquis and several other products across categories despite the unfavorable impact of higher manufacturer discounts resulting from the Inflation Reduction Act(IRA)Medicare Part D Redesign.Second-quarter 2025 operational revenue growth was driven primarily by:Vyndaqel family(Vyndaqel,Vyndamax,Vynmac)globally,up 21%operationally,driven largely by strong demand with continuing uptake in patient diagnosis primarily in the U.S.and certain international developed markets,partially offset by lower net price in the U.S.mostly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign;Comirnaty globally,up 95%operationally,driven primarily by higher net revenues in the U.S.partially due to higher market share,as well as higher contractual deliveries in certain international markets;Paxlovid globally,up 71%operationally,driven primarily by higher net price in the U.S.following the transition from the U.S.government agreement as well as a favorable adjustment of rebate accruals related to prior periods,partially offset by lower COVID-19 infections across the U.S.and certain international markets as well as lower international government purchases;Padcev globally,up 38%operationally,driven primarily by increased market share in first-line locally advanced or metastatic urothelial cancer(la/mUC),as well as a one-time favorable impact associated with the transition to a wholesaler distribution model in the U.S.;Eliquis globally,up 6%operationally,driven primarily by higher demand globally;partially offset by lower net price in the U.S.,including the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign,and price erosion in certain international markets;Abrysvo globally,up 155%(or up$86 million)operationally,driven primarily by higher U.S.revenues from both a favorable net sales adjustment and higher demand for the maternal indication that more than offset -4-lower vaccination rates for the older adult indication following an updated Advisory Committee on Immunization Practices(ACIP)recommendation;as well as launch uptake for both the adult and maternal indications in certain international markets;andLorbrena globally,up 48%operationally,driven primarily by increased patient share in the first-line ALK-positive metastatic non-small cell lung cancer(ALK mNSCLC)treatment setting in the U.S.,China,and certain other international markets,partially offset by lower net price in the U.S.mainly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign;partially offset primarily by lower revenues for:Ibrance globally,down 8%operationally,driven primarily by lower net price in the U.S.largely due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign,as well as generic entry and timing of shipments in certain international markets.GAAP Reported(3)Statement of Operations HighlightsSELECTED REPORTED(3)COSTS AND EXPENSES($in millions)Second-QuarterSix Months 20252024%Change20252024%Change TotalOper.TotalOper.Cost of Sales(3)$3,778$3,300 15%$6,624$6,679(1%)1%Percent of Revenues 25.8$.8%N/AN/A 23.4#.7%N/AN/ASI&A Expenses(3)3,415 3,717(8%)(8%)6,446 7,212(11%)(10%)R&D Expenses(3)2,482 2,696(8%)(8%)4,685 5,189(10%)(10%)Acquired IPR&D Expenses(3)2 6(68%)(68%)11 6 72r%Other(Income)/Deductionsnet(3)739 1,107(33%)(33%)1,692 1,787(5%)Effective Tax Rate on Reported(3)Income 4.60.2%(0.8%)4.8%Second-quarter 2025 Cost of Sales(3)as a percentage of revenues increased by 0.9 percentage points compared to the prior-year quarter,driven primarily by the non-recurrence of a favorable revision to accrued royalties recorded in the second quarter of 2024,partially offset by lower amortization from the step-up of acquired inventory.Second-quarter 2025 SI&A Expenses(3)decreased 8%operationally compared with the prior-year quarter,primarily reflecting focused investments and ongoing productivity improvements that drove a decrease in marketing and promotional spend for various products and lower spending in corporate enabling functions.Second-quarter 2025 R&D Expenses(3)decreased 8%operationally compared with the prior-year quarter,driven primarily by a net decrease in spending due to pipeline focus and optimization,as well as lower compensation-related expenses.-5-The favorable period-over-period change in Other(income)/deductionsnet(3)of$367 million for the second quarter of 2025,compared with the prior-year quarter,was driven primarily by(i)net gains on equity securities in the second quarter of 2025 versus net losses on equity securities in the second quarter of 2024,(ii)lower net interest expense and(iii)lower intangible asset impairment charges;partially offset by(iv)higher charges for certain legal matters.Pfizers effective tax rate on Reported(3)income for the second quarter of 2025 decreased compared to the prior-year quarter primarily due to a favorable change in the jurisdictional mix of earnings.Adjusted(2)Statement of Operations HighlightsSELECTED ADJUSTED(2)COSTS AND EXPENSES($in millions)Second-QuarterSix Months 20252024%Change20252024%Change TotalOper.TotalOper.Adjusted(2)Cost of Sales$3,503$2,768 27$%$6,096$5,804 5%8%Percent of Revenues 23.9 .8%N/AN/A 21.5 .6%N/AN/AAdjusted(2)SI&A Expenses 3,395 3,669(7%)(8%)6,404 7,123(10%)(10%)Adjusted(2)R&D Expenses 2,438 2,671(9%)(9%)4,611 5,147(10%)(10%)Adjusted(2)Other(Income)/Deductionsnet 186 258(28%)(27%)431 555(22%)(5%)Effective Tax Rate on Adjusted(2)Income13.2.9.3.1%See the reconciliations of certain Reported(3)to non-GAAP Adjusted(2)financial measures and associated footnotes in the financial tables section of this press release.-6-RECENT NOTABLE DEVELOPMENTS(Since April 29,2025)Product DevelopmentsBraftovi(encorafenib)Phase 3 ResultsMay 2025.Announced statistically significant and clinically meaningful survival results from the Phase 3 BREAKWATER trial evaluating Braftovi in combination with cetuximab and mFOLFOX6(fluorouracil,leucovorin,and oxaliplatin)in patients with metastatic colorectal cancer(mCRC)with a BRAF V600E mutation.The results showed the Braftovi combination regimen reduced the risk of death by 51%(a key secondary endpoint)and reduced the risk of disease progression or death by 47%(a co-primary endpoint)compared to standard-of-care chemotherapy with or without bevacizumab.At the time of analysis,the safety profile of Braftovi in combination with cetuximab and mFOLFOX6 continued to be consistent with the known safety profile of each respective agent.No new safety signals were identified.Based on these results,the U.S.Food and Drug Administration(FDA)accepted for review a supplemental New Drug Application(sNDA)to support potential conversion to full approval with a decision expected in the first quarter of 2026.Full ReleaseComirnaty(COVID-19 Vaccine,mRNA)RegulatoryJuly 2025.Pfizer and BioNTech announced the European Medicines Agencys(EMA)Committee for Medicinal Products for Human Use(CHMP)has recommended marketing authorization for the companies LP.8.1-adapted monovalent COVID-19 vaccine for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals 6 months of age and older.The adaptation is based on the recommendation from the EMAs Emergency Task Force to update COVID-19 vaccines to target the LP.8.1 variant for the 2025-2026 season.Subsequently,the European Commission authorized the vaccine on July 25,2025.Full ReleaseRegulatoryJune 2025.Pfizer and BioNTech submitted a regulatory application to the FDA requesting approval of Comirnaty 2025-2026 Formula targeting the Omicron sub-variant LP.8.1.N/AHympavzi(marstacimab)Phase 3 ResultsJune 2025.Announced positive topline results from the Phase 3 BASIS study(NCT03938792)evaluating Hympavzi for adults and adolescents living with hemophilia A or B with inhibitors.The study met the primary endpoint and key secondary bleeding endpoints demonstrating the superiority of once-weekly subcutaneous Hympavzi in improving key bleeding outcomes compared to on-demand treatment in a patient population where less burdensome treatment approaches are needed.Hympavzi was generally well-tolerated in the study.Full ReleaseProduct/ProjectMilestoneRecent DevelopmentLink-7-Talzenna(talazoparib)RegulatoryJune 2025.Announced the FDAs decision on the sNDA for Talzenna in combination with Xtandi for men with metastatic castration-resistant prostate cancer(mCRPC).The FDA approved updated labelling with the inclusion of final overall survival(OS)data for the combinations existing indication for the treatment of adults with homologous recombination repair(HRR)gene-mutated mCRPC but did not expand the indication to include patients with non-HRR gene mutated mCRPC.As a result of the FDAs decision,Pfizer will no longer pursue an expanded indication for this combination in mCRPC in the U.S.Full ReleaseXtandi(enzalutamide)Phase 3 ResultsJuly 2025.Astellas Pharma Inc.and Pfizer announced positive topline results from the OS analysis from the Phase 3 EMBARK study evaluating Xtandi,in combination with leuprolide and as a monotherapy,in men with non-metastatic hormone-sensitive prostate cancer(nmHSPC;also known as non-metastatic castration-sensitive prostate cancer or nmCSPC)with biochemical recurrence(BCR)at high risk for metastasis.For patients treated with Xtandi plus leuprolide,a statistically significant and clinically meaningful improvement in OS was observed versus placebo plus leuprolide.A favorable trend towards improved OS was shown for Xtandi as monotherapy,however the difference did not reach statistical significance.Safety results were consistent with the demonstrated safety profile of Xtandi,with no new safety signals observed in the analysis.Full ReleasePhase 3 ResultsMay 2025.Astellas Pharma Inc.and Pfizer announced longer-term follow-up results from an open-label extension of the Phase 3 ARCHES(NCT02677896)study,reporting a five-year follow up of OS benefits and a 30%reduction in the risk of death in men with metastatic hormone-sensitive prostate cancer(mHSPC)treated with Xtandi plus androgen deprivation therapy(ADT)compared to placebo plus ADT.The incidence of treatment-emergent adverse events in the five-year follow-up is consistent with prior ARCHES analyses and no new safety signals were identified.Full ReleaseProduct/ProjectMilestoneRecent DevelopmentLink-8-Pipeline DevelopmentsA comprehensive update of Pfizers development pipeline was published today and is now available at includes an overview of Pfizers research and a list of compounds in development with targeted indication and phase of development,as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.Product/ProjectMilestoneRecent DevelopmentLinkvepdegestrantPhase 3 ResultsMay 2025.Arvinas,Inc.and Pfizer announced detailed results from the Phase 3 VERITAC-2 clinical trial(NCT05654623)evaluating vepdegestrant monotherapy versus fulvestrant in adults with estrogen receptor-positive,human epidermal growth factor receptor 2-negative(ER /HER2-)advanced or metastatic breast cancer whose disease progressed following prior treatment with cyclin-dependent kinase(CDK)4/6 inhibitors and endocrine therapy.The VERITAC-2 results demonstrated a statistically significant and clinically meaningful improvement in progression-free survival(PFS)among patients with an estrogen receptor 1 mutation,reducing the risk of disease progression or death by 43%compared to fulvestrant.The trial did not reach statistical significance in improvement in PFS in the intent-to-treat population.Vepdegestrant was generally well tolerated,with few discontinuations and low rates of gastrointestinal-related adverse events.Full ReleaseCorporate DevelopmentsEliquis360 SupportJuly 2025.The Bristol Myers Squibb-Pfizer Alliance announced a new direct-to-patient option for purchasing Eliquis(apixaban)via the Alliances patient resource Eliquis 360 Support,offering an opportunity for eligible cash-paying patients with a prescription to pay a discounted rate of more than 40%less than the current list price beginning September 8,2025.Full ReleaseBusiness DevelopmentJuly 2025.Announced the completion of an exclusive global,ex-China,in-licensing agreement with 3SBio,Inc.,a leading Chinese biopharmaceutical company,for the development,manufacturing and commercialization of SSGJ-707,a bispecific antibody targeting PD-1 and VEGF,currently undergoing several clinical trials in China for non-small cell lung cancer,metastatic colorectal cancer,and gynecological tumors.Under the terms of the agreement,3SBio and its subsidiaries Shenyang Sunshine Pharmaceutical Co.,Ltd.and 3S Guojian Pharmaceutical(Shanghai)Co.,Ltd.granted Pfizer an exclusive global license to develop,manufacture and commercialize SSGJ-707 worldwide,with an option to develop and commercialize in China.3SBio will receive an upfront payment of$1.25 billion and is eligible to receive milestone payments associated with certain development,regulatory and commercial milestones up to$4.8 billion as well as tiered double-digit royalties on sales of SSGJ-707,if approved.In exchange for an option to the exclusive rights in China,Pfizer will make an upfront payment to 3SBio of$100 million and,in the event the option is exercised,would pay an option exercise fee of up to$50 million depending on future events.Pfizer has also made a$100 million equity investment in 3SBio.Full ReleaseTopicRecent DevelopmentLink-9-PFIZER TO HOST CONFERENCE CALLPfizer will host a live conference call and webcast today at 10:00 AM EDT.To access the live conference call and view the second-quarter 2025 earnings presentation,accompanying prepared remarks from management,and infographic,visit our website at can also listen to the conference call by dialing either 800-456-4352 in the U.S.and Canada or 785-424-1086 outside of the U.S.and Canada.The passcode is“49385”.The transcript and webcast replay of the call will be made available on our website at within 24 hours after the end of the live conference call and will be accessible for at least 90 days.-10-For additional details,see the attached financial schedules,product revenue tables and disclosure notice.(1)Pfizer does not provide guidance for U.S.generally accepted accounting principles(GAAP)Reported financial measures(other than revenues)or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of unusual gains and losses,certain acquisition-related expenses,gains and losses from equity securities,actuarial gains and losses from pension and postretirement plan remeasurements,potential future asset impairments and pending litigation without unreasonable effort.These items are uncertain,depend on various factors,and could have a material impact on GAAP Reported results for the guidance period.Financial guidance for full-year 2025 reflects the following:Does not assume the completion of any business development transactions not completed as of August 5,2025.An anticipated unfavorable revenue impact of approximately$0.5 billion due to recent and expected generic and biosimilar competition for certain products that have recently lost patent or regulatory protection or that are anticipated to lose patent or regulatory protection.Exchange rates assumed are a blend of actual rates in effect through second-quarter 2025 and mid-July 2025 rates for the remainder of the year.Guidance for Adjusted(2)diluted EPS assumes diluted weighted-average shares outstanding of approximately 5.72 billion shares,and assumes no share repurchases in 2025.The companys guidance absorbs the impact of the currently imposed tariffs from China,Canada,and Mexico,as well as potential price changes this year based on the letter received on July 31,2025 from President Trump.(2)Adjusted income and Adjusted diluted earnings per share(EPS)are defined as U.S.GAAP net income attributable to Pfizer Imon shareholders and U.S.GAAP diluted EPS attributable to Pfizer Imon shareholders before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items.See the accompanying reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for the second quarter and the first six months of 2025 and 2024.Adjusted income and its components and Adjusted diluted EPS measures are not,and should not be viewed as,substitutes for U.S.GAAP net income and its components and diluted EPS(3).See the Non-GAAP Financial Measure:Adjusted Income section of Managements Discussion and Analysis of Financial Condition and Results of Operations in Pfizers 2024 Annual Report on Form 10-K and the accompanying Non-GAAP Financial Measure:Adjusted Income section of this press release for a definition of each component of Adjusted income as well as other relevant information.(3)Revenues is defined as revenues in accordance with U.S.GAAP.Reported net income and its components are defined as net income attributable to Pfizer Imon shareholders and its-11-components in accordance with U.S.GAAP.Reported diluted EPS is defined as diluted EPS attributable to Pfizer Imon shareholders in accordance with U.S.GAAP.(4)On track to deliver approximately$7.7 billion in anticipated overall savings(approximately$7.2 billion of net cost savings)from previously announced cost improvement initiatives:Approximately$4.5 billion of overall net cost savings from Pfizers ongoing cost realignment program are expected to be achieved by the end of 2025.An additional approximately$1.2 billion of anticipated net cost savings,primarily in SI&A,is expected to be fully achieved by the end of 2027.The net cost savings are calculated versus the midpoint of Pfizers 2023 SI&A and R&D expense guidance provided on August 1,2023.On track to deliver anticipated R&D re-organization cost savings of approximately$500 million to be fully realized by the end of 2026,with savings to be reinvested in the pipeline.The first phase of the Manufacturing Optimization Program is on track to deliver approximately$1.5 billion in net cost savings by the end of 2027,with initial savings anticipated in the latter part of 2025.(5)References to operational variances in this press release pertain to period-over-period changes that exclude the impact of foreign exchange rates.Although foreign exchange rate changes are part of Pfizers business,they are not within Pfizers control and because they can mask positive or negative trends in the business,Pfizer believes presenting operational variances excluding these foreign exchange changes provides useful information to evaluate Pfizers results.(6)Pfizers fiscal year-end for international subsidiaries is November 30 while Pfizers fiscal year-end for U.S.subsidiaries is December 31.Therefore,Pfizers second quarter and first six months for U.S.subsidiaries reflects the three and six months ended on June 29,2025 and June 30,2024,while Pfizers second quarter and first six months for subsidiaries operating outside the U.S.reflects the three and six months ended on May 25,2025 and May 26,2024.-12-Second-Quarter%Incr./Six Months%Incr./20252024(Decr.)20252024(Decr.)Revenues:Product revenues(2)$11,954$10,871 10$23,248$23,314 Alliance revenues 2,273 2,067 10 4,386 4,240 3Royalty revenues 426 345 23 734 608 21Total revenues 14,653 13,283 10 28,367 28,162 1Costs and expenses:Cost of sales(2),(3)3,778 3,300 15 6,624 6,679(1)Selling,informational and administrative expenses(3)3,415 3,717(8)6,446 7,212(11)Research and development expenses(3)2,482 2,696(8)4,685 5,189(10)Acquired in-process research and development expenses 2 6(68)11 6 72Amortization of intangible assets 1,211 1,307(7)2,421 2,615(7)Restructuring charges and certain acquisition-related costs(4)(18)1,254*660 1,356(51)Other(income)/deductionsnet(5)739 1,107(33)1,692 1,787(5)Income/(loss)from continuing operations before provision/(benefit)for taxes on income/(loss)3,044 (103)*5,828 3,318 76Provision/(benefit)for taxes on income(6)141 (134)*(48)159*Income from continuing operations 2,903 31*5,876 3,159 86Discontinued operationsnet of tax 25 17 48 25 12*Net income before allocation to noncontrolling interests 2,928 48*5,901 3,171 86Less:Net income attributable to noncontrolling interests 18 7*24 15 62Net income attributable to Pfizer Imon shareholders$2,910$41*$5,877$3,156 86Earnings per common sharebasic:Income from continuing operations attributable to Pfizer Imon shareholders$0.51$0.01*$1.03$0.56 85Discontinued operationsnet of tax Net income attributable to Pfizer Imon shareholders$0.51$0.01*$1.03$0.56 86Earnings per common sharediluted:Income from continuing operations attributable to Pfizer Imon shareholders$0.51$0.01*$1.03$0.55 86Discontinued operationsnet of tax Net income attributable to Pfizer Imon shareholders$0.51$0.01*$1.03$0.55 86Weighted-average shares used to calculate earnings per common share:Basic 5,685 5,666 5,680 5,662 Diluted 5,706 5,696 5,708 5,696*Indicates calculation not meaningful or results are greater than 100%.PFIZER INC.AND SUBSIDIARY COMPANIESCONSOLIDATED STATEMENTS OF OPERATIONS(1)(UNAUDITED)(millions,except per share data)-13-(1)The financial statements present the three and six months ended June 29,2025 and June 30,2024.Subsidiaries operating outside the U.S.are included for the three and six months ended May 25,2025 and May 26,2024.The financial results for the three and six months ended June 29,2025 are not necessarily indicative of the results that ultimately could be achieved for the full year.Certain amounts in the consolidated statements of operations and associated notes may not add due to rounding.All percentages have been calculated using unrounded amounts.(2)The Product revenues amount for the first six months of 2024 included a$771 million favorable final adjustment to the estimated non-cash Paxlovid revenue reversal of$3.5 billion recorded in the fourth quarter of 2023,reflecting 5.1 million Emergency Use Authorization(EUA)-labeled treatment courses returned by the U.S.government through February 29,2024 versus the estimated 6.5 million treatment courses that were expected to be returned as of December 31,2023.The Cost of sales amount for the first six months of 2025 includes a favorable revision of our estimate of accrued royalties.(3)Exclusive of amortization of intangible assets.(4)Restructuring charges and certain acquisition-related costs include the following:Second-QuarterSix Months(MILLIONS)2025202420252024Restructuring charges/(credits)acquisition-related costs(a)$3$(5)$12$84 Restructuring charges/(credits)cost reduction initiatives(b)(77)1,109 535 1,030 Restructuring charges/(credits)(74)1,104 547 1,114 Transaction costs(c)5 Integration costs and other(d)56 150 113 237 Restructuring charges and certain acquisition-related costs$(18)$1,254$660$1,356(a)Includes charges/(credits)for employee terminations,asset impairments and other exit costs associated with business combinations.(b)Includes charges/(credits)for employee terminations,asset impairments and other exit costs not associated with acquisitions.The credits for the second quarter of 2025 mainly reflect revisions of estimates of previously recorded accruals for employee termination costs associated with our Manufacturing Optimization Program,driven in large part by higher-than-expected voluntary attrition.The charges for the first six months of 2025 primarily represent employee termination costs,asset impairments and exit costs associated with our enterprise-wide cost realignment program,partially offset by the aforementioned revisions of estimates of previously recorded accruals for employee termination costs associated with our Manufacturing Optimization Program.The charges for the second quarter and first six months of 2024 primarily represent employee termination costs associated with our Manufacturing Optimization Program.(c)Transaction costs represent external costs for banking,legal,accounting and other similar services.(d)Integration costs and other represent external,incremental costs directly related to integrating acquired businesses,such as expenditures for consulting and the integration of systems and processes,and certain other qualifying costs.(5)Components of Other(income)/deductionsnet include:Second-QuarterSix Months(MILLIONS)2025202420252024Interest income$(156)$(130)$(299)$(259)Interest expense 654 778 1,308 1,568 Net interest expense(a)498 648 1,009 1,310 Net(gains)/losses recognized during the period on equity securities(b)(75)342 295 317 Net periodic benefit costs/(credits)other than service costs(101)(106)(260)(209)Certain legal matters,net(c)422 169 564 377 Certain asset impairments(d)93 240 317 349 Haleon equity method(income)/loss (40)48 Other,net(e)(97)(146)(233)(404)Other(income)/deductionsnet$739$1,107$1,692$1,787(a)The decrease in net interest expense in the second quarter and first six months of 2025 reflects(i)a decrease in interest expense primarily driven by a reduction in commercial paper outstanding and(ii)an increase in interest income due to a higher total average investment asset balance compared to 2024.PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS-(UNAUDITED)-14-(b)The net losses in the first six months of 2025 include,among other things,a net loss of$144 million related to our investment in Haleon plc(Haleon),composed of unrealized losses of$1.0 billion,partially offset by$900 million in realized gains on the sales of our remaining investment.(c)The amounts for the second quarter and first six months of 2025 primarily include certain product liability and other legal expenses.The amounts for the second quarter and first six months of 2024 primarily included certain product liability expenses related to products discontinued and/or divested by Pfizer.(d)The amount for the first six months of 2025 primarily includes an intangible asset impairment charge of$210 million for KRAS G12D,a Phase 2 indefinite-lived out-licensed asset that was discontinued by our out-licensing partner.The amounts for the second quarter and first six months of 2024 included a$240 million intangible asset impairment charge,related to in-process research and development associated with a Phase 3 study for the treatment of Duchenne muscular dystrophy(DMD),which reflected unfavorable clinical trial results.(e)The first six months of 2025 primarily include dividend income of$111 million from our investment in ViiV Healthcare Limited(ViiV).The first six months of 2024 included,among other things,a$150 million realized gain on the partial sale of our investment in Haleon and dividend income of$135 million from our investment in ViiV.(6)Our effective tax rates for income/(loss)from continuing operations were 4.6%and(0.8)%for the three and six months ended June 29,2025,respectively,and 130.2%and 4.8%for the three and six months ended June 30,2024,respectively.The lower effective tax rate for the second quarter of 2025,compared to the second quarter of 2024,was primarily due to a favorable change in the jurisdictional mix of earnings.The negative and lower effective tax rate for the first six months of 2025,compared to the first six months of 2024,was primarily due to tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years.PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS-(UNAUDITED)-15-Adjusted income is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures.As such,we believe that investors understanding of our performance is enhanced by disclosing this measure.We use Adjusted income,certain components of Adjusted income and Adjusted diluted EPS to present the results of our major operationsthe discovery,development,manufacture,marketing,sale and distribution of biopharmaceutical products worldwideprior to considering certain income statement elements as follows:MeasureDefinitionRelevance of Metrics to Our Business PerformanceAdjusted incomeNet income attributable to Pfizer Imon shareholders(a)before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items Provides investors useful information to:evaluate the normal recurring operational activities,and their components,on a comparable year-over-year basis assist in modeling expected future performance on a normalized basis Provides investors insight into the way we manage our budgeting and forecasting,how we evaluate and manage our recurring operations and how we reward and compensate our senior management(b)Adjusted cost of sales,Adjusted selling,informational and administrative expenses,Adjusted research and development expenses and Adjusted other(income)/deductionsnetCost of sales,Selling,informational and administrative expenses,Research and development expenses and Other(income)/deductionsnet(a),each before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items,which are components of the Adjusted income measureAdjusted diluted EPSEPS attributable to Pfizer Imon shareholdersdiluted(a)before the impact of amortization of intangible assets,certain acquisition-related items,discontinued operations and certain significant items(a)Most directly comparable GAAP measure.(b)Any expenses for acquired IPR&D are included in our non-GAAP Adjusted results but we exclude certain of these expenses for our financial results for annual incentive compensation purposes.Adjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and,therefore,are limited in their usefulness to investors.Because of their non-standardized definitions,they may not be comparable to the calculation of similar measures of other companies and are presented to permit investors to more fully understand how management assesses performance.A limitation of these measures is that they provide a view of our operations without including all events during a period,and do not provide a comparable view of our performance to peers.These measures are not,and should not be viewed as,substitutes for their most directly comparable GAAP measures of Net income attributable to Pfizer Imon shareholders,components of Net income attributable to Pfizer Imon shareholders and EPS attributable to Pfizer Imon shareholdersdiluted,respectively.We also recognize that,as internal measures of performance,these measures have limitations,and we do not restrict our performance-management process solely to these measures.We also use other tools designed to achieve the highest levels of performance.For example,our R&D organization has productivity targets,upon which its effectiveness is measured.In addition,total shareholder return,both on an absolute basis and relative to a publicly traded pharmaceutical index,plays a significant role in determining payouts under certain of our incentive compensation plans.See the reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for the second quarter and first six months of 2025 and 2024 below and the Non-GAAP Financial Measure:Adjusted Income section of Managements Discussion and Analysis of Financial Condition and Results of Operations in Pfizers 2024 Annual Report on Form 10-K for additional information.PFIZER INC.AND SUBSIDIARY COMPANIES NON-GAAP FINANCIAL MEASURE:ADJUSTED INCOME-16-Second-Quarter 2025Data presented will not(in all cases)aggregate to totals.Cost of sales(1)Selling,informational and administrative expenses(1)Other(income)/deductionsnet(1)Net income attributable to Pfizer Imon shareholders(1),(2)Earnings per common share attributable to Pfizer Imon shareholdersdilutedGAAP Reported$3,778$3,415$739$2,910$0.51 Amortization of intangible assets 1,211 Acquisition-related items(243)(1)(32)338 Discontinued operations (25)Certain significant items:Restructuring charges/(credits)and implementation costs and additional depreciationasset restructuring(3)(29)(14)4 Certain asset impairments(4)(93)93(Gains)/losses on equity securities 75 (75)Actuarial valuation and other pension and postretirement plan(gains)/losses 9 (9)Other(5)(4)(5)(512)523 Income tax provisionnon-GAAP items(537)Non-GAAP Adjusted$3,503$3,395$186(6)$4,434$0.78 Six Months Ended June 29,2025Data presented will not(in all cases)aggregate to totals.Cost of sales(1)Selling,informational and administrative expenses(1)Other(income)/deductionsnet(1)Net income attributable to Pfizer Imon shareholders(1),(2)Earnings per common share attributable to Pfizer Imon shareholdersdilutedGAAP Reported$6,624$6,446$1,692$5,877$1.03 Amortization of intangible assets 2,421 Acquisition-related items(449)(1)(39)620 Discontinued operations (25)Certain significant items:Restructuring charges/(credits)and implementation costs and additional depreciationasset restructuring(3)(53)(20)670 Certain asset impairments(4)(317)317(Gains)/losses on equity securities(4)(295)295 Actuarial valuation and other pension and postretirement plan(gains)/losses 68 (68)Other(5)(26)(20)(678)730 Income tax provisionNon-GAAP items(1,167)Non-GAAP Adjusted$6,096$6,404$431(6)$9,671$1.69 See end of tables for notes.PFIZER INC.AND SUBSIDIARY COMPANIESRECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATIONCERTAIN LINE ITEMS-(UNAUDITED)(millions,except per share data)-17-Second-Quarter 2024Data presented will not(in all cases)aggregate to totals.Cost of sales(1)Selling,informational and administrative expenses(1)Other(income)/deductionsnet(1)Net income attributable to Pfizer Imon shareholders(1),(2)Earnings per common share attributable to Pfizer Imon shareholdersdilutedGAAP Reported$3,300$3,717$1,107$41$0.01 Amortization of intangible assets 1,307 Acquisition-related items(445)(10)(18)617 Discontinued operations (20)Certain significant items:Restructuring charges/(credits)and implementation costs and additional depreciationasset restructuring(3)(50)(36)1,215 Certain asset impairments(4)(240)240(Gains)/losses on equity securities (342)342 Actuarial valuation and other pension and postretirement plan(gains)/losses (2)2 Other(5)(37)(3)(247)292 Income tax provisionnon-GAAP items(635)Non-GAAP Adjusted$2,768$3,669$258(6)$3,400$0.60 Six Months Ended June 30,2024Data presented will not(in all cases)aggregate to totals.Cost of sales(1)Selling,informational and administrative expenses(1)Other(income)/deductionsnet(1)Net income attributable to Pfizer Imon shareholders(1),(2)Earnings per common share attributable to Pfizer Imon shareholdersdilutedGAAP Reported$6,679$7,212$1,787$3,156$0.55 Amortization of intangible assets 2,615 Acquisition-related items(762)(16)(21)1,125 Discontinued operations (20)Certain significant items:Restructuring charges/(credits)and implementation costs and additional depreciationasset restructuring(3)(71)(65)1,198 Certain asset impairments(4)(349)349(Gains)/losses on equity securities (317)317 Actuarial valuation and other pension and postretirement plan(gains)/losses (5)5 Other(5)(42)(8)(541)599 Income tax provisionNon-GAAP items(1,271)Non-GAAP Adjusted$5,804$7,123$555(6)$8,074$1.42 PFIZER INC.AND SUBSIDIARY COMPANIESRECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATIONCERTAIN LINE ITEMS-(UNAUDITED)(millions,except per share data)-18-(1)Items that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax.Our effective tax rates for GAAP Reported income/(loss)from continuing operations were 4.6%and(0.8)%for the three and six months ended June 29,2025,respectively,and 130.2%and 4.8%for the three and six months ended June 30,2024,respectively.See Note(6)to the Consolidated Statements of Operations above.Our effective tax rates for non-GAAP Adjusted income were 13.2%and 10.3%for the three and six months ended June 29,2025,respectively,and 12.9%and 15.1%for the three and six months ended June 30,2024,respectively.(2)The amounts for the second quarter and first six months of 2025 and 2024 include reconciling amounts for Research and development expenses that are not material to our non-GAAP consolidated results of operations.(3)Includes employee termination costs,asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions.(4)See Note(5)to the Consolidated Statements of Operations above.(5)For the second quarter and first six months of 2025,the total Other(income)/deductionsnet adjustments of$512 million and$678 million,respectively,primarily include charges of$422 million for the second quarter and$564 million for the first six months for certain legal matters,primarily representing certain product liability and other legal expenses.For the second quarter of 2024,the total Other(income)/deductionsnet adjustment of$247 million primarily included charges of(i)$169 million for certain legal matters,primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer and(ii)$104 million mostly related to Pfizers share of an investee capital transaction recognized by Haleon plc(Haleon)for treasury stock Haleon purchased in the first quarter of 2024.For the first six months of 2024,the total Other(income)/deductionsnet adjustment of$541 million primarily included charges of(i)$377 million for certain legal matters,primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer and(ii)$351 million mostly related to(a)our equity-method accounting pro-rata share of intangible asset amortization,impairments and restructuring costs recorded by Haleon,as well as(b)adjustments to our equity-method basis differences and(c)Pfizers share of the aforementioned investee capital transaction,partially offset by(iii)a$150 million realized gain on the partial sale of our investment in Haleon.(6)The components of non-GAAP Adjusted Other(income)/deductionsnet include the following:Second-QuarterSix Months(MILLIONS)2025202420252024Interest income$(156)$(130)$(299)$(259)Interest expense 656 781 1,313 1,573 Net interest expense 500 651 1,014 1,314 Net periodic benefit costs/(credits)other than service costs(92)(107)(192)(214)Haleon equity method(income)/loss (145)(303)Other,net(222)(140)(391)(242)Non-GAAP Adjusted Other(income)/deductionsnet$186$258$431$555 See Note(5)to the Consolidated Statements of Operations above for additional information on the components comprising GAAP Reported Other(income)/deductionsnet.PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATIONCERTAIN LINE ITEMS-(UNAUDITED)-19-WORLDWIDEUNITED STATESTOTAL INTERNATIONAL 20252024%Change20252024%Change20252024%Change(MILLIONS)TotalOper.TotalTotalOper.TOTAL REVENUES$14,653$13,283 10%$8,894$7,892 13%$5,759$5,391 7%6%GLOBAL BIOPHARMACEUTICALS BUSINESS(BIOPHARMA)(a)$14,305$12,991 10%$8,793$7,828 12%$5,512$5,163 7%6%Primary Care$5,540$4,952 12%$3,431$2,938 17%$2,109$2,014 5%4%Eliquis(b)2,003 1,877 7%6%1,322 1,262 5h1 615 11%8%Prevnar family(c)1,383 1,359 2%20 832 3R3 527(1%)Paxlovid 427 251 70q28 68*99 184(46%)(45%)Comirnaty 381 195 966 58*205 137 49I%Nurtec ODT/Vydura 359 356 1%133 339(2%)25 17 48Grysvo 143 56*101 41*42 15*FSME-IMMUN/TicoVac 109 100 9%6%1 1 168 99 9%6%All other Primary Care 736 759(3%)(3%)309 338(9%)427 421 1%2%Specialty Care$4,378$4,083 7%7%$2,085$1,973 6%$2,293$2,110 9%9%Vyndaqel family(d)1,615 1,323 22!0 861 15b6 462 352%Xeljanz 322 303 6%6 6 181 145 122(5%)(6%)Sulperazon(Outside the U.S.and Canada)166 144 156 144 15%Zavicefta(Outside the U.S.and Canada)163 150 93 150 9%Enbrel(Outside the U.S.and Canada)154 179(14%)(14%)154 179(14%)(14%)Inflectra 139 97 43C0 43*39 54(28%)(26%)Zithromax 56 74(25%)(25%)*56 74(25%)(25%)Genotropin 106 119(10%)(10%)18 28(37%)89 91(2%)(1%)Cresemba 111 71 56U1 71 56U%Cibinqo 69 47 47F$ 15 59D 32 41%All other Hospital 1,087 1,146(5%)(5%)586 609(4%)501 537(7%)(6%)All other Specialty Care 390 429(9%)(8%)161 235(31%)229 194 18 %Oncology$4,387$3,956 11%$3,277$2,918 12%$1,110$1,038 7%6%Ibrance 1,049 1,130(7%)(8%)696 741(6%)353 390(9%)(11%)Xtandi(e)566 495 14V6 495 14%Padcev 542 394 388S4 387 38%7 7 9%Oncology biosimilars(f)353 279 26%7 177 45 103(6%)(5%)Lorbrena 251 169 49H0 70 431 99 53Rcetris(g)255 279(9%)(9%)248 271(9%)6 7(11%)(9%)Inlyta 243 252(4%)(4%)132 151(13%)111 101 9%Braftovi/Mektovi 182 148 23#1 142 21 6 60g%Bosulif 149 167(11%)(12%)116 118(1%)32 49(34%)(36%)Tukysa 132 121 9%87 97 11$ 24(2%)Aromasin 111 87 27(%1 1(10%)111 87 27(%Elrexfio 85 22*35 18 96P 5*Talzenna 46 32 44C4 25 37 7 67b%Tivdak 46 33 398C 32 34%2 1*All other Oncology 380 347 10#7 194 223 153(7%)(6%)PFIZER CENTREONE(h)$328$278 18%$81$49 65%$247$229 8%8%PFIZER IGNITE$20$15 388%$20$15 38%$Total Alliance revenues included above$2,273$2,067 10%9%$1,837$1,680 9%$437$387 13%Total Royalty revenues included above$426$345 23#%$423$344 23%$3$2 5853See end of tables for notes.PFIZER INC.-REVENUES SECOND-QUARTER 2025 and 2024-(UNAUDITED)-20-WORLDWIDEUNITED STATESTOTAL INTERNATIONAL 20252024%Change20252024%Change20252024%Change(MILLIONS)TotalOper.TotalTotalOper.TOTAL REVENUES$28,367$28,162 1%2%$17,268$17,406(1%)$11,100$10,756 3%5%GLOBAL BIOPHARMACEUTICALS BUSINESS(BIOPHARMA)(a)$27,746$27,595 1%1%$17,078$17,254(1%)$10,668$10,341 3%5%Primary Care$11,236$12,163(8%)(7%)$7,009$8,033(13%)$4,228$4,131 2%4%Eliquis(b)3,926 3,917 1%2,621 2,675(2%)1,305 1,242 5%7%Prevnar family(c)3,043 3,050 2,030 1,981 2%1,013 1,069(5%)(3%)Comirnaty 945 548 72t6 176*540 373 45G%Paxlovid(i)918 2,286(60%)(59%)675 1,868(64%)244 418(42%)(39%)Nurtec ODT/Vydura 607 533 14V1 506 11F 27 68irysvo 274 201 3694 172(5%)110 29*FSME-IMMUN/TicoVac 172 165 4%4%2 2 10 163 4%4%All other Primary Care 1,350 1,463(8%)(6%)550 652(16%)800 811(1%)1%Specialty Care$8,364$7,926 6%7%$3,986$3,732 7%$4,378$4,194 4%7%Vyndaqel family(d)3,101 2,460 26%1,976 1,612 23%1,125 848 334%Xeljanz 450 497(10%)(9%)226 255(11%)223 242(8%)(6%)Sulperazon(Outside the U.S.and Canada)330 311 6%730 311 6%7%Zavicefta(Outside the U.S.and Canada)299 275 8)9 275 8%Enbrel(Outside the U.S.and Canada)294 338(13%)(10%)294 338(13%)(10%)Inflectra 291 255 14 2 140 45 116(23%)(20%)Zithromax 213 274(22%)(20%)(75%)213 274(22%)(20%)Genotropin 201 239(16%)(13%)29 58(51%)172 181(5%)(1%)Cresemba 184 146 264 146 26%Cibinqo 127 89 43DH 38 25y 50 57Y%All other Hospital 2,170 2,221(2%)(1%)1,202 1,175 28 1,046(7%)(5%)All other Specialty Care 705 821(14%)(12%)302 453(33%)402 368 9%Oncology$8,145$7,505 9%9%$6,083$5,490 11%$2,062$2,015 2%4%Ibrance 2,026 2,184(7%)(7%)1,354 1,420(5%)671 765(12%)(11%)Xtandi(e)1,023 913 12%1,023 913 12%Padcev 967 735 3223 721 32 14 5%6%Oncology biosimilars(f)617 543 14C4 336 293 207(12%)(8%)Lorbrena 473 332 42D2 129 49(1 203 38cetris 472 536(12%)(12%)461 524(12%)11 12(10%)(7%)Inlyta 462 489(6%)(5%)261 292(11%)201 197 2%4%Braftovi/Mektovi 317 264 20!)9 252 19 12 57f%Bosulif 300 313(4%)(4%)236 219 8d 93(32%)(31%)Tukysa 234 227 3%30 186 2D 41 6%7%Aromasin 219 170 291%1 1(16%)218 169 291%Elrexfio 145 35*66 29*79 6*Talzenna 86 55 56Wc 42 50# 13 77x%Tivdak 79 60 311t 60 24%5 1*All other Oncology 725 648 12G5 365 30%0 283(12%)(9%)PFIZER CENTREONE(h)$585$535 9%$153$120 28%$432$416 4%5%PFIZER IGNITE$37$32 16%$37$32 16%$Total Alliance revenues included above$4,386$4,240 3%4%$3,563$3,461 3%$823$779 6%7%Total Royalty revenues included above$734$608 21!%$728$606 20%$6$2*PFIZER INC.-REVENUES SIX MONTHS 2025 and 2024-(UNAUDITED)-21-PFIZER INC.NOTES TO REVENUES TABLE INFORMATION(UNAUDITED)(a)In 2025,the commercial structure within our Biopharma reportable segment is composed of the Pfizer U.S.Commercial Division and the Pfizer International Commercial Division.For additional information regarding our commercial organizational structure,see the Item 1.BusinessCommercial Operations section of our 2024 Annual Report on Form 10-K(available at ).(b)Reflects alliance revenues and product revenues.(c)Prevnar family includes revenues from Prevnar 20/Apexxnar(pediatric and adult)and Prevnar 13/Prevenar 13(pediatric and adult).(d)Vyndaqel family includes global revenues from Vyndaqel,as well as revenues for Vyndamax in the U.S.and Vynmac in Japan.(e)Primarily reflects alliance revenues and royalty revenues.(f)Biosimilars are highly similar versions of approved and authorized biological medicines.Oncology biosimilars primarily include Ruxience,Retacrit,Zirabev,Trazimera and Nivestym.(g)Reflects product revenues and royalty revenues.(h)Pfizer CentreOne(PC1)includes revenues from our contract manufacturing and our active pharmaceutical ingredient sales operation,as well as revenues related to our manufacturing and supply agreements with legacy Pfizer businesses/partnerships.(i)The amount for the first six months of 2024 included a$771 million favorable final adjustment to the estimated non-cash revenue reversal of$3.5 billion recorded in the fourth quarter of 2023,reflecting 5.1 million EUA-labeled treatment courses returned by the U.S.government through February 29,2024 versus the estimated 6.5 million treatment courses that were expected to be returned as of December 31,2023.*Indicates calculation not meaningful or results are greater than 100%.Amounts may not add due to rounding.All percentages have been calculated using unrounded amounts.-22-DISCLOSURE NOTICE:Except where otherwise noted,the information contained in this earnings release and the related attachments is as of August 5,2025.We assume no obligation to update any forward-looking statements contained in this earnings release and the related attachments as a result of new information or future events or developments.This earnings release and the related attachments contain forward-looking statements about,among other topics,our anticipated operating and financial performance,including financial guidance and projections;reorganizations;business plans,strategy,goals and prospects;expectations for our product pipeline,in-line products and product candidates,including anticipated regulatory submissions,data read-outs,study starts,approvals,launches,discontinuations,clinical trial results and other developing data,revenue contribution and projections,potential pricing and reimbursement,potential market dynamics,including demand,market size and utilization rates and growth,performance,timing of exclusivity and potential benefits;potential impact of tariffs and pricing dynamics;strategic reviews;leverage and capital allocation objectives;an enterprise-wide cost realignment program(including anticipated costs,savings and potential benefits);a Manufacturing Optimization Program to reduce our cost of goods sold(including anticipated costs,savings and potential benefits);dividends and share repurchases;plans for and prospects of our acquisitions,dispositions and other business development activities,including our acquisition of Seagen and our licensing agreement with 3SBio,and our ability to successfully capitalize on growth opportunities and prospects;manufacturing and product supply;our ongoing efforts to respond to COVID-19;our expectations regarding the impact of COVID-19 on our business,operations and financial results;and the expected seasonality of demand for certain of our products.Given their forward-looking nature,these statements involve substantial risks,uncertainties and potentially inaccurate assumptions and we cannot assure you that any outcome expressed in these forward-looking statements will be realized in whole or in part.You can identify these statements by the fact that they use future dates or use words such as“will,”“may,”“could,”“likely,”“ongoing,”“anticipate,”“estimate,”“expect,”“project,”“intend,”“plan,”“believe,”“assume,”“target,”“forecast,”“guidance,”“goal,”“objective,”“aim,”“seek,”“potential,”“hope”and other words and terms of similar meaning.Pfizers financial guidance is based on estimates and assumptions that are subject to significant uncertainties.Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:Risks Related to Our Business,Industry and Operations,and Business Development:the outcome of research and development(R&D)activities,including the ability to meet anticipated pre-clinical or clinical endpoints,commencement and/or completion dates for our pre-clinical or clinical trials,regulatory submission dates,and/or regulatory approval and/or launch dates;the possibility of unfavorable pre-clinical and clinical trial results,including the possibility of unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data;risks associated with preliminary,early stage or interim data;the risk that pre-clinical and clinical trial data are subject to differing interpretations and assessments,including during the peer review/publication process,in the scientific community generally,and by regulatory authorities;whether and when additional data from our pipeline programs will be published in scientific journal publications,and if so,when and with what modifications and interpretations;and uncertainties regarding the future development of our product candidates,including whether or when our product candidates will advance to future studies or phases of development or whether or when regulatory applications may be filed for any of our product candidates;our ability to successfully address comments received from regulatory authorities such as the FDA or the EMA,or obtain approval for new products and indications from regulators on a timely basis or at all;regulatory decisions impacting labeling,approval or authorization,including the scope of indicated patient populations,product dosage,manufacturing processes,safety and/or other matters,including decisions relating to emerging developments regarding potential product impurities;uncertainties regarding the ability to obtain or maintain,and the scope of,recommendations by technical or advisory committees,and the timing of,and ability to obtain,pricing approvals and product launches,all of which could impact the availability or commercial potential of our products and product candidates;claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates,including claims and concerns that may arise from the conduct or outcome of post-approval clinical trials,pharmacovigilance or Risk Evaluation and Mitigation Strategies,which could impact marketing approval,product labeling,and/or availability or commercial potential;the success and impact of external business development activities,including the ability to identify and execute on potential business development opportunities;the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all;the ability to realize the anticipated benefits of-23-any such transactions in the anticipated time frame or at all;the potential need for and impact of additional equity or debt financing to pursue these opportunities,which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing;challenges integrating the businesses and operations;disruption to business or operations relationships;risks related to growing revenues for certain acquired or partnered products;significant transaction costs;and unknown liabilities;competition,including from new product entrants,in-line branded products,generic products,private label products,biosimilars and product candidates that treat or prevent diseases and conditions similar to those treated or intended to be prevented by our in-line products and product candidates;the ability to successfully market both new and existing products,including biosimilars;difficulties or delays in manufacturing,sales or marketing;supply disruptions,shortages or stock-outs at our facilities or third-party facilities that we rely on;and legal or regulatory actions;the impact of public health outbreaks,epidemics or pandemics(such as COVID-19)on our business,operations and financial condition and results,including impacts on our employees,manufacturing,supply chain,sales and marketing,R&D and clinical trials;risks and uncertainties related to Comirnaty and Paxlovid or any potential future COVID-19 vaccines,treatments or combinations,including,among others,the risk that as the market for COVID-19 products remains endemic and seasonal and/or COVID-19 infection rates do not follow prior patterns,demand for our COVID-19 products has and may continue to be reduced or not meet expectations,which has in the past and may continue to lead to reduced revenues,excess inventory or other unanticipated charges;risks related to our ability to develop and commercialize variant adapted vaccines,combinations and/or treatments;uncertainties related to recommendations and coverage for,and the publics adherence to,vaccines,boosters,treatments or combinations,including uncertainties related to the potential impact of narrowing recommended patient populations;whether or when our EUAs or biologics licenses will expire,terminate or be revoked;and potential third-party royalties or other claims related to Comirnaty and Paxlovid;trends toward managed care and healthcare cost containment,and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;interest rate and foreign currency exchange rate fluctuations,including the impact of global trade tensions,as well as currency devaluations and monetary policy actions in countries experiencing high inflation or deflation rates;any significant issues involving our largest wholesale distributors or government customers,which account for a substantial portion of our revenues;the impact of the increased presence of counterfeit medicines,vaccines or other products in the pharmaceutical supply chain;any significant issues related to the outsourcing of certain operational and staff functions to third parties;any significant issues related to our JVs and other third-party business arrangements,including modifications or disputes related to supply agreements or other contracts with customers including governments or other payors;uncertainties related to general economic,political,business,industry,regulatory and market conditions including,without limitation,uncertainties related to the impact on us,our customers,suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions,such as inflation or interest rate fluctuations,and recent and possible future changes in global financial markets;the exposure of our operations globally to possible capital and exchange controls,economic conditions,expropriation,sanctions,tariffs and/or other restrictive government actions,changes in intellectual property legal protections and remedies,unstable governments and legal systems and inter-governmental disputes;risks and uncertainties related to issued or future executive orders or other new,or changes in,laws,regulations or policy regarding tariffs or other trade policy;the risk and impact of tariffs on our business,which is subject to a number of factors including,but not limited to,restrictions on trade,the effective date and duration of such tariffs,countries included in the scope of tariffs,changes to amounts of tariffs,and potential retaliatory tariffs or other retaliatory actions imposed by other countries;the impact of disruptions related to climate change and natural disasters;-24-any changes in business,political and economic conditions due to actual or threatened terrorist activity,geopolitical instability,political or civil unrest or military action,including the ongoing conflicts between Russia and Ukraine and in the Middle East and the resulting economic or other consequences;the impact of product recalls,withdrawals and other unusual items,including uncertainties related to regulator-directed risk evaluations and assessments,such as our ongoing evaluation of our product portfolio for the potential presence or formation of nitrosamines,and our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved and any regulatory or other impact on Oxbryta and other sickle cell disease assets;trade buying patterns;the risk of an impairment charge related to our intangible assets,goodwill or equity-method investments;the impact of,and risks and uncertainties related to,restructurings and internal reorganizations,as well as any other corporate strategic initiatives and growth strategies,and cost-reduction and productivity initiatives,including any potential future phases,each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs,organizational disruption,adverse effects on employee morale,retention issues or other unintended consequences;the ability to successfully achieve our climate-related goals and progress our environmental sustainability and other priorities;Risks Related to Government Regulation and Legal Proceedings:the impact of any U.S.healthcare reform or legislation,including executive orders or other change in laws,regulations or policy,or any significant spending reduction or cost control efforts affecting Medicare,Medicaid,the 340B Drug Pricing Program or other publicly funded or subsidized health programs,including the Inflation Reduction Act of 2022(IRA)and the IRA Medicare Part D Redesign,or changes in the tax treatment of employer-sponsored health insurance that may be implemented;U.S.federal or state legislation or regulatory action and/or policy efforts affecting,among other things,pharmaceutical product pricing,including the potential for international reference pricing,including Most-Favored-Nation drug pricing,intellectual property,reimbursement or access to or recommendations for our medicines and vaccines,taxes or other restrictions on U.S.direct-to-consumer advertising;limitations on interactions with healthcare professionals and other industry stakeholders;as well as pricing pressures for our products as a result of highly competitive biopharmaceutical markets;risks and uncertainties related to changes to vaccine or other healthcare policy in the U.S.;legislation or regulatory action in markets outside of the U.S.,such as China or Europe,including,without limitation,laws related to pharmaceutical product pricing,intellectual property,medical regulation,environmental protections,data protection and cybersecurity,reimbursement or access,including,in particular,continued government-mandated reductions in prices and access restrictions for certain products to control costs in those markets;legal defense costs,insurance expenses,settlement costs and contingencies,including without limitation,those related to legal proceedings and actual or alleged environmental contamination;the risk and impact of an adverse decision or settlement and risk related to the adequacy of reserves related to legal proceedings;the risk and impact of tax related litigation and investigations;governmental laws,regulations and policies affecting our operations,including,without limitation,the IRA,as well as changes in such laws,regulations or policies or their interpretation,including,among others,new or changes in tariffs,tax laws and regulations internationally and in the U.S.,including the One Big Beautiful Bill Act,which was enacted on July 4,2025,and is still subject to further guidance;the adoption of global minimum taxation requirements outside the U.S.generally effective in most jurisdictions since January 1,2024,government cost-cutting measures and related impacts on,among other matters,government staffing,resources and ability to timely review and process regulatory or other submissions;restrictions related to certain data transfers and transactions involving certain countries;and potential changes to existing tax laws,tariffs,or changes to other laws,regulations or policies in the U.S.,including by the U.S.Presidential administration and Congress,as well as in other countries;Risks Related to Intellectual Property,Technology and Cybersecurity:the risk that our currently pending or future patent applications may not be granted on a timely basis or at all,or any patent-term extensions that we seek may not be granted on a timely basis,if at all;-25-risks to our products,patents and other intellectual property,such as:(i)claims of invalidity that could result in loss of patent coverage;(ii)claims of patent infringement,including asserted and/or unasserted intellectual property claims;(iii)claims we may assert against intellectual property rights held by third parties;(iv)challenges faced by our collaboration or licensing partners to the validity of their patent rights;or(v)any pressure from,or legal or regulatory action by,various stakeholders or governments that could potentially result in us not seeking intellectual property protection or agreeing not to enforce or being restricted from enforcing intellectual property rights related to our products;any significant breakdown or interruption of our information technology systems and infrastructure(including cloud services);any business disruption,theft of confidential or proprietary information,security threats on facilities or infrastructure,extortion or integrity compromise resulting from a cyber-attack,which may include those using adversarial artificial intelligence techniques,or other malfeasance by,but not limited to,nation states,employees,business partners or others;and risks and challenges related to the use of software and services that include artificial intelligence-based functionality and other emerging technologies.Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate,actual results could vary materially from past results and those anticipated,estimated or projected.Investors are cautioned not to put undue reliance on forward-looking statements.A further list and description of risks,uncertainties and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31,2024 and in our subsequent reports on Form 10-Q,in each case including in the sections thereof captioned“Forward-Looking Information and Factors That May Affect Future Results”and“Item 1A.Risk Factors,”and in our subsequent reports on Form 8-K.This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates.These studies typically are part of a larger body of clinical data relating to such products or product candidates,and the discussion herein should be considered in the context of the larger body of data.In addition,clinical trial data are subject to differing interpretations,and,even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product,regulatory authorities may not share our views and may require additional data or may deny approval altogether.The information contained on our website or any third-party website is not incorporated by reference into this earnings release.All trademarks mentioned are the property of their owners.Certain of the products and product candidates discussed in this earnings release are being co-researched,co-developed and/or co-promoted in collaboration with other companies for which Pfizers rights vary by market or are the subject of agreements pursuant to which Pfizer has commercialization rights in certain markets.-26-
2025-09-23
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30,2025orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _Commission File No.0-19731 GILEAD SCIENCES,INC.(Exact Name of Registrant as Specified in Its Charter)Delaware94-3047598(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification No.)333 Lakeside Drive,Foster City,California 94404(Address of principal executive offices)(Zip Code)650-574-3000(Registrants Telephone Number,Including Area Code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,par value,$0.001 per shareGILDThe Nasdaq Global Select MarketIndicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filingrequirements for the past 90 days.Yes x No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit suchfiles).Yes x No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer”“smaller reporting company”and“emerging growth company”inRule 12b-2 of the Exchange Act.Large accelerated filer x Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any newor revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No xNumber of shares outstanding of the issuers common stock,par value$0.001 per share,as of July 31,2025:1,240,806,916GILEAD SCIENCES,INC.INDEXPART I.FINANCIAL INFORMATION3Item 1.Condensed Consolidated Financial Statements3Condensed Consolidated Balance Sheets3Condensed Consolidated Statements of Operations4Condensed Consolidated Statements of Comprehensive Income(Loss)5Condensed Consolidated Statements of Stockholders Equity6Condensed Consolidated Statements of Cash Flows8Notes to Condensed Consolidated Financial Statements9Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations28Item 3.Quantitative and Qualitative Disclosures About Market Risk38Item 4.Controls and Procedures38PART II.OTHER INFORMATION40Item 1.Legal Proceedings40Item 1A.Risk Factors40Item 2.Unregistered Sales of Equity Securities and Use of Proceeds54Item 3.Defaults Upon Senior Securities54Item 4.Mine Safety Disclosures54Item 5.Other Information54Item 6.Exhibits54SIGNATURES59We own or have rights to various trademarks,copyrights and trade names used in our business,including the following:GILEAD,GILEADSCIENCES,KITE,AMBISOME,ATRIPLA,BIKTARVY,CAYSTON,COMPLERA,DESCOVY,DESCOVY FOR PREP,EMTRIVA,EPCLUSA,EVIPLERA,GENVOYA,HARVONI,HEPCLUDEX,HEPSERA,JYSELECA,LETAIRIS,LIVDELZI/LYVDELZI,ODEFSEY,SOVALDI,STRIBILD,SUNLENCA,TECARTUS,TRODELVY,TRUVADA,TRUVADA FOR PREP,TYBOST,VEKLURY,VEMLIDY,VIREAD,VOSEVI,YESCARTA,YEZTUGO and ZYDELIG.Other trademarks and trade names are the property of their respective owners.Certain amounts and percentages in this Quarterly Report on Form 10-Q may not sum or recalculate due to rounding./This Quarterly Report on Form 10-Q,including Part I,Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operationsand Part II,Item 1A.Risk Factors,contains forward-looking statements regarding future events and our future results that are subject to the safe harborscreated under the Securities Act of 1933,as amended,and the Securities Exchange Act of 1934,as amended.Words such as“ambition,”“anticipate,”“believe,”“continue,”“could,”“estimate,”“expect,”“forecast,”“goal,”“hope,”“intend,”“may,”“might,”“outlook,”“plan,”“priority,”“project,”“seek,”“should,”“target”and variations of such words and similar expressions are intended to identify such forward-looking statements.In addition,anystatements other than statements of historical fact are forward-looking statements,including statements regarding overall trends;operating cost,product salesand revenue trends;liquidity and capital needs;plans and expectations with respect to products,product candidates,corporate strategy,business andoperations,financial projections,strategic investments and the use of capital;expectations regarding the impact of the Inflation Reduction Act and the One BigBeautiful Bill Act,changes in U.S.regulatory policies,and changes in U.S.trade policies,including tariffs;collaboration and licensing arrangements;patentprotection and estimated loss of exclusivity for our products and product candidates;ongoing litigation and investigation matters;and other statements ofexpectations,beliefs,future plans and strategies,anticipated events or trends and similar expressions.We have based these forward-looking statements on our current expectations about future events.These statements are not guarantees of futureperformance and involve risks,uncertainties and assumptions that are difficult to predict.Our actual results or outcomes may differ materially from thosesuggested by these forward-looking statements for various reasons,including those identified in Part II,Item 1A.Risk Factors of this Quarterly Report onForm 10-Q.Given these risks and uncertainties,you are cautioned not to place undue reliance on forward-looking statements.The forward-looking statementsincluded in this report are made only as of the date hereof unless otherwise specified.Except as required under federal securities laws and the rules andregulations of U.S.Securities and Exchange Commission,we do not undertake,and specifically decline,any obligation to update any of these statements or topublicly announce the results of any revisions to any forward-looking statements after the distribution of this report,whether as a result of new information,future events,changes in assumptions or otherwise.In evaluating our business,you should carefully consider the risks described under Part II,Item 1A.RiskFactors of this Quarterly Report on Form 10-Q.Any of the risks contained herein could materially and adversely affect our business,results of operations andfinancial condition.2PART I.FINANCIAL INFORMATIONItem 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTSGILEAD SCIENCES,INC.CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited)(in millions,except per share amounts)June 30,2025December 31,2024Assets Current assets:Cash and cash equivalents$5,144$9,991 Short-term marketable debt securities69 Accounts receivable,net4,781 4,420 Inventories1,825 1,710 Prepaid and other current assets2,899 3,052 Total current assets14,718 19,173 Property,plant and equipment,net5,459 5,414 Long-term marketable debt securities1,913 Intangible assets,net18,566 19,948 Goodwill8,314 8,314 Deferred tax assets2,721 2,378 Other long-term assets4,031 3,769 Total assets$55,721$58,995 Liabilities and Stockholders Equity Current liabilities:Accounts payable$582$833 Accrued rebates4,215 3,892 Current portion of long-term debt,net2,806 1,815 Other current liabilities3,586 5,464 Total current liabilities11,189 12,004 Long-term debt,net22,140 24,896 Long-term income taxes payable859 830 Deferred tax liabilities652 724 Other long-term liabilities1,290 1,295 Commitments and contingencies(Note 10)Stockholders equity:Preferred stock,par value$0.001 per share;5 shares authorized;none outstanding Common stock,par value$0.001 per share;5,600 shares authorized;1,242 and 1,246 shares issued andoutstanding,respectively1 1 Additional paid-in capital8,367 7,700 Accumulated other comprehensive(loss)income(18)132 Retained earnings11,325 11,497 Total Gilead stockholders equity19,674 19,330 Noncontrolling interest(84)(84)Total stockholders equity19,590 19,246 Total liabilities and stockholders equity$55,721$58,995 See accompanying notes.3GILEAD SCIENCES,INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)Three Months EndedSix Months EndedJune 30,June 30,(in millions,except per share amounts)2025202420252024Revenues:Product sales$7,054$6,912$13,668$13,559 Royalty,contract and other revenues27 41 81 81 Total revenues7,082 6,954 13,749 13,640 Costs and expenses:Cost of goods sold1,501 1,544 3,041 3,096 Research and development expenses1,491 1,351 2,870 2,871 Acquired in-process research and development expenses61 38 315 4,169 In-process research and development impairments190 190 2,430 Selling,general and administrative expenses1,365 1,377 2,623 2,752 Total costs and expenses4,608 4,309 9,038 15,317 Operating income(loss)2,474 2,644 4,711(1,678)Interest expense254 237 513 491 Other(income)expense,net(208)355 120 265 Income(loss)before income taxes2,429 2,053 4,077(2,433)Income tax expense468 438 802 123 Net income(loss)1,960 1,614 3,275(2,556)Net income attributable to noncontrolling interest Net income(loss)attributable to Gilead$1,960$1,614$3,275$(2,556)Basic earnings(loss)per share attributable to Gilead$1.57$1.29$2.63$(2.05)Diluted earnings(loss)per share attributable to Gilead$1.56$1.29$2.61$(2.05)Shares used in basic earnings(loss)per share attributable to Gilead calculation1,245 1,247 1,246 1,247 Shares used in diluted earnings(loss)per share attributable to Gilead calculation1,255 1,251 1,257 1,247 See accompanying notes.4GILEAD SCIENCES,INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(unaudited)Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Net income(loss):$1,960$1,614$3,275$(2,556)Other comprehensive(loss)income,net of reclassifications and taxes:Net gain(loss)on foreign currency translation51 1 69(16)Net gain on available-for-sale debt securities4 4 5 Net(loss)gain on cash flow hedges(166)23(224)77 Other comprehensive(loss)income,net(111)24(150)65 Comprehensive income(loss),net1,850 1,639 3,125(2,491)Comprehensive income attributable to noncontrolling interest,net Comprehensive income(loss)attributable to Gilead,net$1,850$1,639$3,125$(2,491)See accompanying notes.5GILEAD SCIENCES,INC.CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(unaudited)Three Months Ended June 30,2025(in millions,except per share amounts)Gilead Stockholders Equity NoncontrollingInterestTotalStockholdersEquityCommon Stock AdditionalPaid-InCapitalAccumulated OtherComprehensiveIncome(Loss)RetainedEarningsSharesAmountBalance as of March 31,20251,245$1$8,138$92$10,931$(84)$19,078 Net income 1,960 1,960 Other comprehensive loss,net (111)(111)Issuances under equity incentive plans2 24 24 Stock-based compensation 226 226 Repurchases of common stock under repurchaseprograms($105.88 average price per share)(5)(21)(506)(527)Repurchases of common stock for employee taxwithholding under equity incentive plans andother(1)(64)(64)Dividends declared($0.79 per share)(997)(997)Balance as of June 30,20251,242$1$8,367$(18)$11,325$(84)$19,590 Six Months Ended June 30,2025(in millions,except per share amounts)Gilead Stockholders Equity NoncontrollingInterestTotalStockholdersEquityCommon Stock AdditionalPaid-InCapitalAccumulated OtherComprehensiveIncome(Loss)RetainedEarningsSharesAmountBalance as of December 31,20241,246$1$7,700$132$11,497$(84)$19,246 Net income 3,275 3,275 Other comprehensive loss,net (150)(150)Issuances under employee stock purchase plan1 82 82 Issuances under equity incentive plans9 199 199 Stock-based compensation 436 436 Repurchases of common stock under repurchaseprograms($103.87 average price per share)(12)(50)(1,207)(1,257)Repurchases of common stock for employee taxwithholding under equity incentive plans andother(2)(240)(240)Dividends declared($1.58 per share)(2,001)(2,001)Balance as of June 30,20251,242$1$8,367$(18)$11,325$(84)$19,590 See accompanying notes.6Three Months Ended June 30,2024(in millions,except per share amounts)Gilead Stockholders Equity NoncontrollingInterestTotalStockholdersEquityCommon Stock AdditionalPaid-InCapitalAccumulated OtherComprehensiveIncomeRetainedEarningsSharesAmountBalance as of March 31,20241,246$1$6,813$69$10,656$(84)$17,455 Net income 1,614 1,614 Other comprehensive income,net 24 24 Issuances under equity incentive plans2 5 5 Stock-based compensation 209 209 Repurchases of common stock under repurchaseprograms($66.67 average price per share)(2)(6)(94)(100)Repurchases of common stock for employee taxwithholding under equity incentive plans andother(1)(33)(33)Dividends declared($0.77 per share)(978)(978)Balance as of June 30,20241,246$1$7,022$93$11,165$(84)$18,197 Six Months Ended June 30,2024(in millions,except per share amounts)Gilead Stockholders EquityNoncontrollingInterestTotalStockholdersEquityCommon StockAdditionalPaid-InCapitalAccumulated OtherComprehensiveIncomeRetainedEarningsSharesAmountBalance as of December 31,20231,246$1$6,500$28$16,304$(84)$22,749 Net loss (2,556)(2,556)Other comprehensive income,net 65 65 Issuances under employee stock purchase plan1 80 80 Issuances under equity incentive plans7 70 70 Stock-based compensation 397 397 Repurchases of common stock under repurchaseprograms($74.59 average price per share)(7)(25)(475)(500)Repurchases of common stock for employee taxwithholding under equity incentive plans andother(2)(150)(150)Dividends declared($1.54 per share)(1,958)(1,958)Balance as of June 30,20241,246$1$7,022$93$11,165$(84)$18,197 See accompanying notes.7GILEAD SCIENCES,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)Six Months EndedJune 30,(in millions)20252024Operating Activities:Net income(loss)$3,275$(2,556)Adjustments to reconcile Net income(loss)to Net cash provided by operating activities:Depreciation expense190 192 Amortization expense1,197 1,192 Stock-based compensation expense434 397 Deferred income taxes(377)(889)Net loss from equity securities284 405 Acquired in-process research and development expenses315 4,169 In-process research and development impairments190 2,430 Other,net124 208 Changes in operating assets and liabilities:Accounts receivable,net(213)(95)Inventories(398)(115)Prepaid expenses and other93(56)Accounts payable(267)(11)Income tax assets and liabilities,net(1,852)(1,379)Accrued and other liabilities(410)(349)Net cash provided by operating activities2,584 3,544 Investing Activities:Purchases of marketable debt securities(2,287)(244)Proceeds from sales of marketable debt securities295 2,265 Proceeds from maturities of marketable debt securities15 327 Acquisitions,including in-process research and development,net of cash acquired(294)(4,195)Purchases of equity securities(37)(444)Purchases of property,plant and equipment(211)(235)Other investing activities,net(13)12 Net cash used in investing activities(2,531)(2,514)Financing Activities:Proceeds from issuances of common stock279 151 Repurchases of common stock under repurchase programs(1,257)(500)Repayments of debt and other obligations(1,771)(1,851)Payments of dividends(2,004)(1,962)Other financing activities,net(240)(152)Net cash used in financing activities(4,993)(4,314)Effect of exchange rate changes on cash and cash equivalents92(29)Net change in cash and cash equivalents(4,848)(3,313)Cash and cash equivalents at beginning of period9,991 6,085 Cash and cash equivalents at end of period$5,144$2,772 See accompanying notes.8GILEAD SCIENCES,INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited)1.SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIESThe accompanying Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements of Gilead Sciences,Inc.(“Gilead,”“we,”“our”or“us”)should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the yearended December 31,2024,included in our Annual Report on Form 10-K filed with U.S.Securities and Exchange Commission.There have been no materialchanges to the summary of our business or significant accounting policies as disclosed in that filing.These interim financial statements have been prepared in accordance with U.S.generally accepted accounting principles for interim financial informationand include all adjustments consisting of normal recurring adjustments that the management of Gilead believes are necessary for a fair presentation of theperiods presented and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.We have evaluatedsubsequent events through the report issuance date and determined that there are no further events or transactions to be disclosed other than those alreadydisclosed elsewhere in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.Certain amounts and percentages in these Condensed Consolidated Financial Statements and accompanying notes may not sum or recalculate due torounding.92.REVENUESDisaggregation of RevenuesThe following table summarizes our Total revenues:Three Months Ended June 30,2025Three Months Ended June 30,2024(in millions)U.S.EuropeRest ofWorldTotalU.S.EuropeRest ofWorldTotalProduct sales:HIVBiktarvy$2,799$429$302$3,530$2,585$370$277$3,232 Descovy601 24 28 653 434 25 26 485 Genvoya322 40 16 377 372 45 23 440 Odefsey221 66 11 298 233 72 10 315 Symtuza-Revenue share88 33 3 124 131 34 3 168 Other HIV65 33 9 107 65 25 15 105 Total HIV4,096 624 368 5,088 3,821 571 353 4,745 Liver DiseaseSofosbuvir/Velpatasvir184 81 76 342 267 84 126 476 Vemlidy122 13 117 252 117 11 115 243 Other Liver Disease106 76 19 201 47 47 19 113 Total Liver Disease413 170 211 795 431 142 259 832 Veklury51 19 50 121 76 53 85 214 OncologyCell TherapyTecartus41 41 9 92 63 37 7 107 Yescarta162 154 77 393 186 169 58 414 Total Cell Therapy203 196 86 485 250 206 66 521 Trodelvy224 96 44 364 224 69 26 320 Total Oncology427 291 131 849 474 275 92 841 OtherAmBisome7 65 56 129 17 69 65 151 Other44 8 21 73 98 8 24 130 Total Other52 73 77 202 115 77 88 280 Total product sales5,038 1,178 838 7,054 4,916 1,118 878 6,912 Royalty,contract and other revenues13 10 4 27 25 15 1 41 Total revenues$5,051$1,189$842$7,082$4,941$1,133$879$6,954(1)(2)(3)(4)(5)10Six Months Ended June 30,2025Six Months Ended June 30,2024(in millions)U.S.EuropeRest ofWorldTotalU.S.EuropeRest ofWorldTotalProduct sales:HIVBiktarvy$5,272$804$603$6,679$4,900$735$542$6,177 Descovy1,139 45 55 1,239 805 51 55 911 Genvoya627 79 35 741 704 95 44 843 Odefsey436 123 20 579 457 148 21 626 Symtuza-Revenue share170 62 6 238 236 67 6 309 Other HIV115 63 19 198 125 70 27 222 Total HIV7,760 1,177 738 9,675 7,226 1,167 695 9,088 Liver DiseaseSofosbuvir/Velpatasvir351 161 175 687 515 163 203 881 Vemlidy222 24 257 504 212 22 233 467 Other Liver Disease175 152 35 362 89 94 38 221 Total Liver Disease748 338 467 1,553 816 279 474 1,569 Veklury250 41 132 423 391 123 255 769 OncologyCell TherapyTecartus82 72 17 171 118 73 16 207 Yescarta321 304 154 779 357 327 110 794 Total Cell Therapy403 376 171 949 475 400 126 1,001 Trodelvy405 171 81 657 429 137 62 628 Total Oncology808 547 252 1,606 904 537 188 1,629 OtherAmBisome13 132 123 268 31 139 124 294 Other91 16 35 143 156 18 36 209 Total Other104 149 158 410 188 156 160 504 Total product sales9,669 2,251 1,747 13,668 9,525 2,262 1,772 13,559 Royalty,contract and other revenues49 21 10 81 49 30 2 81 Total revenues$9,719$2,273$1,757$13,749$9,574$2,292$1,774$13,640 _ Represents our revenue from cobicistat(“C”),emtricitabine(“FTC”)and tenofovir alafenamide(“TAF”)in Symtuza(darunavir/C/FTC/TAF),a fixed dose combination product commercializedby Janssen Sciences Ireland Unlimited Company(“Janssen Ireland”).Includes Atripla,Complera/Eviplera,Emtriva,Stribild,Sunlenca,Truvada,Tybost and Yeztugo.Includes Epclusa and the authorized generic version of Epclusa sold by Gileads separate subsidiary,Asegua Therapeutics LLC(“Asegua”).Includes ledipasvir/sofosbuvir(Harvoni and the authorized generic version of Harvoni sold by Asegua),Hepcludex,Hepsera,Livdelzi/Lyvdelzi,Sovaldi,Viread and Vosevi.Includes Cayston,Jyseleca,Letairis and Zydelig.Revenues Recognized from Performance Obligations Satisfied in Prior YearsThe following table summarizes revenues recognized from performance obligations satisfied in prior years:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Revenue share with Janssen Ireland and royalties for licenses of intellectual property$153$202$310$372 Changes in estimates$126$82$340$242(1)(2)(3)(4)(5)(1)(2)(3)(4)(5)11Contract BalancesThe following table summarizes our contract balances:(in millions)June 30,2025December 31,2024Contract assets$305$277 Contract liabilities$58$58 _Future revenues recognized from contract liabilities are not expected to be material in any one year.3.FAIR VALUE MEASUREMENTSRecurring Fair Value MeasurementsThe following table summarizes the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:June 30,2025December 31,2024(in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets:Available-for-sale debt securities:U.S.treasury securities$692$692$U.S.government agencies securities 10 10 Corporate debt securities 991 991 Residential mortgage and asset-backedsecurities 300 300 Equity securities:Money market funds3,528 3,528 8,502 8,502 Publicly traded equity securities1,294 1,294 1,561 1,561 Deferred compensation plan374 374 343 343 Foreign currency derivative contracts 7 7 128 128 Total$5,887$1,307$7,195$10,405$128$10,533 Liabilities:Contingent consideration liability$271$271$206$206 Deferred compensation plan374 374 343 343 Foreign currency derivative contracts 160 160 3 3 Total$374$160$271$805$343$3$206$552 _Publicly traded equity securities include our investment in Galapagos NV(“Galapagos”)of$465 million as of June 30,2025,which is subject to contractual sale restrictions as described in Note 6.Acquisitions,Collaborations and Other Arrangements.Level 2 InputsAvailable-for-Sale Debt SecuritiesFor our available-for-sale debt securities,we estimate the fair values by reviewing trading activity and pricing as of the measurement date and by takinginto consideration valuations obtained from third-party pricing services.The pricing services utilize industry standard valuation models,including both income-based and market-based approaches,for which all significant inputs are observable,either directly or indirectly,to estimate the fair value.These inputs includereported trades of and broker/dealer quotes on the same or similar securities,issuer credit spreads,benchmark securities,prepayment/default projections basedon historical data and other observable inputs.(1)(1)(1)(1)12Foreign Currency Derivative ContractsOur foreign currency derivative contracts have maturities of 18 months or less and all are with counterparties that have a minimum credit rating of A-orequivalent by S&P Global Ratings,Moodys Investors Service,Inc.or Fitch Ratings,Inc.We estimate the fair values of these contracts by utilizing an income-based industry standard valuation model for which all significant inputs are observable,either directly or indirectly.These inputs include foreign currencyexchange rates,Secured Overnight Financing Rate(“SOFR”)and swap rates.These inputs,where applicable,are observable at commonly quoted intervals.Level 3 InputsContingent Consideration LiabilityIn connection with our first quarter 2021 acquisition of MYR GmbH,we are subject to a potential contingent consideration payment of up to 300million,subject to customary adjustments,which is revalued each reporting period using probability-weighted scenarios for U.S.Food and DrugAdministration(“FDA”)approval of Hepcludex until the related contingency is resolved.The following table summarizes the change in fair value of our contingent consideration liability:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Beginning balance$216$222$206$228 Changes in valuation assumptions35(10)37(11)Effect of foreign exchange remeasurement20(3)27(8)Ending balance$271$208$271$208 _Included in Research and development expenses on our Condensed Consolidated Statements of Operations.The changes primarily related to changes in assumptions around probability.Included in Other(income)expense,net on our Condensed Consolidated Statements of Operations.Included in Other current liabilities and Other long-term liabilities on our Condensed Consolidated Balance Sheets as of June 30,2025 and December 31,2024,respectively.Fair Value Level TransfersThere were no transfers between Level 1,Level 2 and Level 3 in the periods presented.Nonrecurring Fair Value MeasurementsDuring the six months ended June 30,2025 and 2024,we recorded partial impairment charges of$190 million and$2.4 billion,respectively,related tocertain acquired in-process research and development(“IPR&D”)assets.See Note 7.Intangible Assets for additional information.Other Fair Value DisclosuresSenior Unsecured NotesThe following table summarizes the total estimated fair value and carrying value of our senior unsecured notes,determined using Level 2 inputs based ontheir quoted market values:(in millions)June 30,2025December 31,2024Fair value$21,981$23,335 Carrying value$23,819$25,562 Liability Related to Future RoyaltiesWe recorded a liability related to future royalties as part of our 2020 acquisition of Immunomedics,Inc.,which is subsequently amortized using theeffective interest method over the remaining estimated life.The fair value of the liability related to future royalties,determined using Level 3 inputs,wasapproximately$1.0 billion and$0.9 billion as of June 30,2025 and December 31,2024,respectively,and the carrying value was$1.1 billion as of June 30,2025 and December 31,2024.(1)(2)(3)(1)(2)(3)134.AVAILABLE-FOR-SALE DEBT SECURITIES AND EQUITY SECURITIESAvailable-for-Sale Debt SecuritiesDuring the three months ended June 30,2025,we purchased approximately$2.0 billion of marketable debt securities.There were no such balances as ofDecember 31,2024.The following table summarizes our available-for-sale debt securities:June 30,2025(in millions)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueU.S.treasury securities$691$1$(1)$692 U.S.government agencies securities10 10 Corporate debt securities987 4 991 Residential mortgage and asset-backed securities299 1 300 Total$1,987$6$(1)$1,992 The following table summarizes information related to available-for-sale debt securities that have been in a continuous unrealized loss position,classifiedby length of time:June 30,2025Less Than 12 Months12 Months or LongerTotal(in millions)GrossUnrealizedLossesEstimated FairValueGrossUnrealizedLossesEstimated FairValueGrossUnrealizedLossesEstimated FairValueU.S.treasury securities$(1)$338$(1)$338 U.S.government agencies securities 10 10 Corporate debt securities 121 121 Residential mortgage and asset-backed securities 51 51 Total$(1)$519$(1)$519 No allowance for credit losses was recognized for investments with unrealized losses as of June 30,2025 as the unrealized losses were primarily drivenby broader change in interest rates with no adverse conditions identified that would prevent the issuer from making scheduled principal and interest payments.We do not currently intend to sell,and it is not more likely than not that we will be required to sell,such investments before recovery of their amortized costbases.The following table summarizes the classification of our available-for-sale debt securities on our Condensed Consolidated Balance Sheets:(in millions)June 30,2025Cash and cash equivalents$10 Short-term marketable debt securities69 Long-term marketable debt securities1,913 Total$1,992 The following table summarizes our available-for-sale debt securities by contractual maturity:June 30,2025(in millions)Amortized CostFair ValueWithin one year$79$79 After one year through five years1,901 1,906 After five years through ten years7 7 After ten years Total$1,987$1,992 14Equity SecuritiesThe following table summarizes the classification of our equity securities on our Condensed Consolidated Balance Sheets:(in millions)June 30,2025December 31,2024Equity securities measured at fair value:Cash and cash equivalents$3,528$8,502 Prepaid and other current assets1,310 1,577 Other long-term assets358 327 Equity method investments and other equity investments without readily determinable fair values:Other long-term assets369 386 Total$5,565$10,791 _Mostly comprised of equity interests in certain collaboration partners and investment funds that are considered to be variable interest entities(“VIEs”)for which we are not the primary beneficiary.Our maximum exposure to loss as a result of our involvement in these VIEs is limited to the value of our investment.For our equity method investments in Galapagos and Arcus Biosciences,Inc.(“Arcus”),we elected and applied the fair value option as we believe it bestreflects the underlying economics of these investments.Our investment in Galapagos is subject to certain lock-up provisions as discussed in Note 6.Acquisitions,Collaborations and Other Arrangements and was classified in Prepaid and other current assets as of June 30,2025 and December 31,2024 at$465 million and$462 million,respectively.Our investment in Arcus was classified in Prepaid and other current assets as of June 30,2025 and December 31,2024 at$256 million and$448 million,respectively.The following table summarizes net unrealized gains and losses related to equity securities still held as of the respective ending balance sheet dates for theperiods below,included in Other(income)expense,net on our Condensed Consolidated Statements of Operations:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Unrealized(gain)loss,net$(143)$392$293$412 5.DERIVATIVE FINANCIAL INSTRUMENTSOur operations in foreign countries expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S.dollar andvarious foreign currencies,primarily the Euro.To manage this risk,we hedge a portion of our foreign currency exposures related to outstanding monetaryassets and liabilities as well as forecasted product sales using foreign currency exchange forward contracts.In general,the market risk related to these contractsis offset by corresponding gains and losses on the hedged transactions.The credit risk associated with these contracts is driven by changes in interest andcurrency exchange rates and,as a result,varies over time.By working only with major banks and closely monitoring current market conditions,we seek tolimit the risk that counterparties to these contracts may be unable to perform.We also seek to limit our risk of loss by entering into contracts that permit netsettlement at maturity.Therefore,our overall risk of loss in the event of a counterparty default is limited to the amount of any unrealized gains on outstandingcontracts(i.e.,those contracts that have a positive fair value)at the date of default.We do not enter into derivative contracts for trading purposes.The derivative instruments we use to hedge our exposures for certain monetary assets and liabilities that are denominated in a non-functional currency arenot designated as hedges.The derivative instruments we use to hedge our exposures for forecasted product sales are designated as cash flow hedges and havematurities of 18 months or less.We held foreign currency exchange contracts with outstanding notional amounts of$3.7 billion and$2.9 billion as of June 30,2025 and December 31,2024,respectively.(1)(1)15While all our derivative contracts allow us the right to offset assets and liabilities,we have presented amounts on our Condensed Consolidated BalanceSheets on a gross basis.The following table summarizes the classification and fair values of derivative instruments,including the potential effect of offsetting:June 30,2025(in millions)Prepaid and othercurrent assetsOther long-termassetsTotal DerivativeAssetsOther currentliabilitiesOther long-termliabilitiesTotal DerivativeLiabilitiesForeign currency exchange contracts designated ashedges$3$4$129$17$146 Foreign currency exchange contracts not designatedas hedges3 3 14 14 Total derivatives presented gross on theCondensed Consolidated Balance Sheets$7$160 Gross amounts not offset on the CondensedConsolidated Balance Sheets:Derivative financial instruments$(7)$(7)Cash collateral received/pledged Net amount(legal offset)$153 December 31,2024(in millions)Prepaid and othercurrent assetsOther long-termassetsTotal DerivativeAssetsOther currentliabilitiesOther long-termliabilitiesTotal DerivativeLiabilitiesForeign currency exchange contracts designated ashedges$90$10$100$Foreign currency exchange contracts not designatedas hedges28 28 3 3 Total derivatives presented gross on theCondensed Consolidated Balance Sheets$128$3 Gross amounts not offset on the CondensedConsolidated Balance Sheets:Derivative financial instruments$(3)$(3)Cash collateral received/pledged Net amount(legal offset)$125$The following table summarizes the effect of our derivative contracts on our Condensed Consolidated Financial Statements:Three Months EndedSix Months Ended June 30,June 30,(in millions)2025202420252024Derivatives designated as hedges:Net(loss)gain recognized in Accumulated other comprehensive income$(170)$32$(216)$93 Net gain reclassified from Accumulated other comprehensive income into Productsales$19$5$40$5 Derivatives not designated as hedges:Net(loss)gain recognized in Other(income)expense,net$(22)$30$(28)$53 The majority of gains and losses related to the hedged forecasted transactions reported in Accumulated other comprehensive(loss)income as of June 30,2025 are expected to be reclassified to Product sales within 12 months.There were no discontinuances of cash flow hedges for the three and six months endedJune 30,2025 and 2024.The cash flow effects of our derivative contracts for the three and six months ended June 30,2025 and 2024 were included within Net cash provided byoperating activities on our Condensed Consolidated Statements of Cash Flows.166.ACQUISITIONS,COLLABORATIONS AND OTHER ARRANGEMENTSWe enter into acquisitions,licensing and strategic collaborations and other similar arrangements with third parties for the research,development andcommercialization of certain products and product candidates.The collaborations involve two or more parties who are active participants in the operatingactivities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities.The financial terms ofthese arrangements may include non-refundable upfront payments,expense reimbursements,payments by us for options to acquire certain rights,contingentobligations by us for potential development and regulatory milestone payments and/or sales-based milestone payments,royalty payments,revenue or profit-sharing arrangements,cost-sharing arrangements and equity investments.AcquisitionsCymaBayIn March 2024,we completed the acquisition of CymaBay Therapeutics,Inc.(“CymaBay”)for total consideration of$3.9 billion,net of cash acquired.Upon closing,CymaBay became our wholly-owned subsidiary.We accounted for this transaction as an asset acquisition since the lead asset,seladelpar,an investigational,oral,peroxisome proliferator-activatedreceptor delta agonist shown to regulate critical metabolic and liver disease pathways,represented substantially all of the fair value of the gross assets acquired.During the three months ended March 31,2024,we recorded a$3.9 billion charge,representing an acquired IPR&D asset with no alternative future use,toAcquired in-process research and development expenses,as well as share-based compensation expense of$133 million related to the cash settlement ofunvested CymaBay employee stock awards attributable to post-acquisition services,with$67 million being recorded in Research and development expensesand$67 million in Selling,general and administrative expenses on our Condensed Consolidated Statements of Operations.Collaborations and Other ArrangementsGalapagosIn January 2025,we agreed to amend our option,license and collaboration agreement with Galapagos(the“OLCA”)commensurate with Galapagosannouncement for a possible separation of Galapagos into two entities:a newly to be formed company(to be named at a later date,herein“SpinCo”)with aninitial capital allocation of up to approximately 2.45 billion(approximately$2.54 billion as of the time of announcement)and Galapagos.At the time ofseparation,should it occur,Galapagos and our rights and responsibilities under the OLCA would transfer to SpinCo,and Galapagos would gain full globaldevelopment and commercialization rights to its pipeline,subject to payment of single digit royalties to Gilead on net sales of certain products.As a result ofthe amendment,Gileads ownership stake in Galapagos would be subject to lock-up until December 2025,and upon separation,should it occur,Gilead wouldhold approximately 25%of the outstanding shares in both Galapagos and SpinCo and would be subject to a lock-up of Galapagos shares through March 2027and of SpinCo shares until six months after the separation,subject to certain customary exceptions and early termination provisions.The two Gilead designeesappointed to Galapagos board of directors would step down upon the separation,should it occur,and Gilead would be entitled to nominate two directors toSpinCos board.In May 2025,however,Galapagos announced that it has decided to re-evaluate the previously proposed separation.LEO PharmaIn January 2025,we entered into a strategic partnership with LEO Pharma A/S(“LEO Pharma”)to accelerate the development and commercialization ofLEO Pharmas small molecule oral signal transducer and activator of transcription 6(“STAT6”)programs for the potential treatment of patients withinflammatory diseases.Gilead will have global rights to develop,manufacture,and commercialize the small molecule oral STAT6 program.LEO Pharma willhave the option to potentially co-commercialize oral programs for dermatology outside the U.S.LEO Pharma will hold exclusive global rights to STAT6topical formulations in dermatology.Upon closing of the agreement,we made a$250 million upfront payment to LEO Pharma which was charged to Acquiredin-process research and development expenses on our Condensed Consolidated Statements of Operations.In addition,LEO Pharma is eligible to receive up toapproximately$1.5 billion in additional milestone payments and may also receive tiered royalties on sales of oral STAT6 products.17ArcusIn January 2024,we amended our collaboration agreement with Arcus whereby we acquired approximately 15.2 million additional shares of Arcuscommon stock at a premium for$320 million.We recorded$233 million for the fair value of the equity investment in Prepaid and other current assets on ourCondensed Consolidated Balance Sheets and$87 million for the premium in Other(income)expense,net on our Condensed Consolidated Statements ofOperations.As part of the January 2024 amendment,we committed to a$100 million continuation fee,which was charged to Acquired in-process research anddevelopment expenses on our Condensed Consolidated Statements of Operations and paid later in 2024.Our number of designees on Arcus board of directorswas also increased to three.As of June 30,2025,we held 31.4 million shares,or approximately 30%of the issued and outstanding voting stock of Arcus at thetime of our latest purchase of shares.7.INTANGIBLE ASSETSThe following table summarizes our Intangible assets,net:June 30,2025December 31,2024(in millions)Gross CarryingAmountAccumulatedAmortizationForeignCurrencyTranslationAdjustmentNetCarryingAmountGross CarryingAmountAccumulatedAmortizationForeignCurrencyTranslationAdjustmentNetCarryingAmountFinite-lived assets:Intangible asset sofosbuvir$10,720$(8,098)$2,622$10,720$(7,749)$2,971 Intangible asset axicabtagene ciloleucel7,110(2,924)4,186 7,110(2,721)4,389 Intangible asset Trodelvy11,730(3,623)8,107 11,730(3,083)8,647 Intangible asset Hepcludex845(372)473 845(329)516 Other1,479(1,001)1 479 1,474(940)1 535 Total finite-lived assets31,884(16,019)1 15,866 31,879(14,822)1 17,058 Indefinite-lived assets IPR&D2,700 2,700 2,890 2,890 Total intangible assets$34,584$(16,019)$1$18,566$34,769$(14,822)$1$19,948 _ The Indefinite-lived assets IPR&D balance as of June 30,2025 was comprised of$1.75 billion related to sacituzumab govitecan-hziy(“SG”)for non-small cell lung cancer(“NSCLC”)and$950 million related to bulevirtide.See“2025 Impairment”below for 2025 activity.Impairment AssessmentsNo indicators of impairment were noted for the three and six months ended June 30,2025 and 2024,except as described in“2025 Impairment”and“2024Impairment”below.2025 ImpairmentDuring the three months ended June 30,2025,additional competitive clinical data became available indicating a potentially more competitive market forbulevirtide where it is not yet approved.Based on our evaluation of the data,and in connection with the preparation of the financial statements for the secondquarter,we performed an interim impairment test and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below itscarrying value.As a result,we recognized a partial impairment charge of$190 million in In-process research and development impairments on our CondensedConsolidated Statements of Operations for the three months ended June 30,2025.To arrive at the revised estimated fair value as of June 30,2025,we used a probability-weighted income approach that discounts expected future cashflows to present value,which requires the use of Level 3 fair value measurements and inputs,including critical estimated inputs,such as:revenues andoperating profits related to the planned utilization of bulevirtide outside of the European Union(“EU”),which includes inputs such as addressable patientpopulation,projected market share,treatment duration,and the life of the potential commercialized product;the probability of technical and regulatory success;the time and resources needed to complete the development and approval of bulevirtide outside of the EU;an appropriate discount rate based on the estimatedweighted-average cost of capital for companies with profiles similar to our profile;and risks related to the viability of and potential alternative treatments inany future target markets.We used a discount rate of 8.25%which is based on the estimated weighted-average cost of capital for companies with profilessimilar to ours.(1)(1)182024 ImpairmentIn January 2024,we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating SG indicating that the study did not meet its primaryendpoint of overall survival in previously treated metastatic NSCLC,thus triggering a review for potential impairment of the NSCLC IPR&D intangible asset.Based on our evaluation of the study results and all other data currently available,and in connection with the preparation of the financial statements for the firstquarter,we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below itscarrying value.As a result,we recognized a partial impairment charge of$2.4 billion in In-process research and development impairments on our CondensedConsolidated Statements of Operations for the three months ended March 31,2024.To arrive at the revised estimated fair value as of March 31,2024,we used a probability-weighted income approach that discounts expected future cashflows to present value,which requires the use of Level 3 fair value measurements and inputs,including critical estimated inputs,such as:revenues andoperating profits related to the planned utilization of SG in NSCLC,which includes inputs such as addressable patient population,projected market share,treatment duration,and the life of the potential commercialized product;the probability of technical and regulatory success;the time and resources needed tocomplete the development and approval of SG in NSCLC;an appropriate discount rate based on the estimated weighted-average cost of capital for companieswith profiles similar to our profile;and risks related to the viability of and potential alternative treatments in any future target markets.We used a discount rateof 7.00%which is based on the estimated weighted-average cost of capital for companies with profiles similar to ours.8.OTHER FINANCIAL INFORMATIONAccounts Receivable,NetThe following table summarizes our Accounts receivable,net:(in millions)June 30,2025December 31,2024Accounts receivable$5,623$5,319 Less:allowances for chargebacks696 759 Less:allowances for cash discounts and other95 89 Less:allowances for credit losses50 52 Accounts receivable,net$4,781$4,420 The majority of our trade accounts receivable arises from product sales in the U.S.and Europe.InventoriesThe following table summarizes our Inventories:(in millions)June 30,2025December 31,2024Raw materials$1,271$1,295 Work in process1,039 847 Finished goods1,603 1,447 Total$3,913$3,589 Reported as:Inventories$1,825$1,710 Other long-term assets2,087 1,879 Total$3,913$3,589 _ Amounts primarily consist of raw materials.(1)(1)19Property,Plant and Equipment,NetThe following table summarizes our Property,plant and equipment,net:(in millions)June 30,2025December 31,2024Property,plant and equipment$8,080$7,884 Less:accumulated depreciation2,621 2,470 Property,plant and equipment,net$5,459$5,414 The following table summarizes Depreciation expense:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Depreciation expense$93$98$190$192 Accumulated Other Comprehensive(Loss)IncomeThe following tables summarize the changes in Accumulated other comprehensive(loss)income by component,net of tax:(in millions)Foreign CurrencyTranslationAvailable-for-Sale DebtSecuritiesCash Flow HedgesTotalBalance as of March 31,2025$54$38$92 Net unrealized gain(loss),net of income tax expense(benefit)of$0,$1,and$(21),respectively51 4(149)(94)Gain reclassified to net income,net of income tax expense of$0,$0,and$2,respectively (16)(16)Other comprehensive income(loss),net51 4(166)(111)Balance as of June 30,2025$105$4$(127)$(18)(in millions)Foreign CurrencyTranslationAvailable-for-Sale DebtSecuritiesCash Flow HedgesTotalBalance as of December 31,2024$36$96$132 Net unrealized gain(loss),net of income tax expense(benefit)of$0,$1,and$(27),respectively69 4(189)(116)Gain reclassified to net income,net of income tax expense of$0,$0,and$5,respectively (35)(35)Other comprehensive income(loss),net69 4(224)(150)Balance as of June 30,2025$105$4$(127)$(18)(in millions)Foreign CurrencyTranslationAvailable-for-Sale DebtSecuritiesCash Flow HedgesTotalBalance as of March 31,2024$45$24$69 Net unrealized gain,net of income tax expense of$0,$0,and$4,respectively1 28 29 Gain reclassified to net income,net of income tax expense of$0,$0,and$1,respectively (5)(5)Other comprehensive income,net1 23 24 Balance as of June 30,2024$46$47$93 20(in millions)Foreign CurrencyTranslationAvailable-for-Sale DebtSecuritiesCash Flow HedgesTotalBalance as of December 31,2023$62$(5)$(29)$28 Net unrealized(loss)gain,net of income tax expense of$0,$0,and$11,respectively(16)81 65 Loss(gain)reclassified to net income,net of income tax expense of$0,$0,and$1,respectively 5(5)Other comprehensive(loss)income,net(16)5 77 65 Balance as of June 30,2024$46$47$93 The following table summarizes the reclassifications out of Accumulated other comprehensive(loss)income and into Net income(loss),including theaffected line items from our Condensed Consolidated Statements of Operations:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Line Item AffectedNet gain related to cash flow hedges$19$5$40$5 Product salesNet loss related to available-for-sale debtsecurities$5 Other(income)expense,netIncome tax expense$2$1$5$1 Income tax expenseRestructuringDuring the three and six months ended June 30,2025 and 2024,we incurred restructuring charges primarily related to reductions in our workforce.The following table summarizes the affected line items from our Condensed Consolidated Statements of Operations:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Research and development expenses$6$13$44$63 Selling,general and administrative expenses7 8 43 22 Restructuring charges$13$21$88$84 As of June 30,2025,we had a remaining liability of$92 million on our Condensed Consolidated Balance Sheets associated with restructuring charges,amajority of which we anticipate will be paid in the next 12 months.Other(Income)Expense,NetThe following table summarizes the components of Other(income)expense,net:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024(Gain)loss from equity securities,net$(142)$392$284$405 Interest income(73)(35)(166)(144)Other,net6(1)2 3 Other(income)expense,net$(208)$355$120$265 219.DEBT AND CREDIT FACILITIESThe following table summarizes the carrying amount of our borrowings under various financing arrangements:(in millions)Carrying AmountType of BorrowingIssue DateMaturity DateInterest RateJune 30,2025December 31,2024Senior UnsecuredNovember 2014February 20253.50%$1,750 Senior UnsecuredSeptember 2015March 20263.65%2,748 2,747 Senior UnsecuredSeptember 2016March 20272.95%1,249 1,249 Senior UnsecuredSeptember 2020October 20271.20t8 748 Senior UnsecuredNovember 2024November 20294.80t7 746 Senior UnsecuredSeptember 2020October 20301.656 995 Senior UnsecuredSeptember 2023October 20335.253 993 Senior UnsecuredNovember 2024June 20355.101 991 Senior UnsecuredSeptember 2015September 20354.604 994 Senior UnsecuredSeptember 2016September 20364.00t4 744 Senior UnsecuredSeptember 2020October 20402.609 989 Senior UnsecuredDecember 2011December 20415.657 997 Senior UnsecuredMarch 2014April 20444.80%1,738 1,738 Senior UnsecuredNovember 2014February 20454.50%1,735 1,735 Senior UnsecuredSeptember 2015March 20464.75%2,224 2,224 Senior UnsecuredSeptember 2016March 20474.15%1,730 1,730 Senior UnsecuredSeptember 2020October 20502.80%1,479 1,479 Senior UnsecuredSeptember 2023October 20535.558 988 Senior UnsecuredNovember 2024November 20545.509 989 Senior UnsecuredNovember 2024November 20645.60s9 738 Total senior unsecured notes23,819 25,562 Liability related to future royalties1,127 1,148 Total debt,net24,946 26,710 Less:Current portion of long-term debt,net2,806 1,815 Total Long-term debt,net$22,140$24,896 Senior Unsecured NotesWe are required to comply with certain covenants under our note indentures governing our senior unsecured notes.As of June 30,2025,we were not inviolation of any covenants.In February 2025,we repaid$1.75 billion of principal balance related to our senior unsecured notes due at maturity.Revolving Credit FacilityAs of June 30,2025 and December 31,2024,there were no amounts outstanding under our$2.5 billion revolving credit facility maturing in June 2029,and we were in compliance with all covenants.2210.COMMITMENTS AND CONTINGENCIESLegal ProceedingsWe are a party to various legal actions.Certain significant matters are described below.We recognize accruals for such actions to the extent that weconclude that a loss is both probable and reasonably estimable.We accrue for the best estimate of a loss within a range;however,if no estimate in the range isbetter than any other,then we accrue the minimum amount in the range.If we determine that a material loss is reasonably possible and the loss or range of losscan be estimated,we disclose the possible loss.Unless otherwise noted,the outcome of these matters either is not expected to be material or is not possible todetermine such that we cannot reasonably estimate the maximum potential exposure or the range of possible loss.As of June 30,2025,we did not have anymaterial accruals for the matters described herein.As of December 31,2024,we had approximately$242 million of accruals on our Condensed ConsolidatedBalance Sheets for the matters described herein,with approximately$200 million accrued for a settlement with the U.S.Attorneys Office for the SouthernDistrict of New York that we entered into in April 2025 and paid during the three months ended June 30,2025.Litigation with Generic ManufacturersAs part of the approval process for some of our products,FDA granted us a New Chemical Entity(“NCE”)exclusivity period during which othermanufacturers applications for approval of generic versions of our products will not be approved.Generic manufacturers may challenge the patents protectingproducts that have been granted NCE exclusivity one year prior to the end of the NCE exclusivity period.Generic manufacturers have sought and may continueto seek FDA approval for a similar or identical drug through an abbreviated new drug application(“ANDA”),the application form typically used bymanufacturers seeking approval of a generic drug.The sale of generic versions of our products prior to their patent expiration would have a significant negativeeffect on our revenues and results of operations.To seek approval for a generic version of a product having NCE status,a generic company may submit itsANDA to FDA four years after the branded products approval.Starting in March 2022,we received letters from Lupin Ltd.(“Lupin”),Laurus Labs(“Laurus”)and Cipla Ltd.(“Cipla”),indicating that they havesubmitted ANDAs to FDA requesting permission to market and manufacture generic versions of the adult dosage strength of Biktarvy.Lupin,Laurus,andCipla have challenged the validity of four of the six patents listed in the Orange Book as associated with Biktarvy.We filed a lawsuit against Lupin,Laurus andCipla in May 2022 in the U.S.District Court of Delaware and intend to enforce and defend our intellectual property.Additionally,in November 2023,wereceived a letter from Cipla indicating that it has submitted an ANDA to FDA requesting permission to market and manufacture a generic version of thepediatric dosage strength of Biktarvy.Cipla challenged the validity of two of the patents listed in the Orange Book as associated with Biktarvy.We filed aseparate lawsuit against Cipla in December 2023 in the U.S.District Court of Delaware.This lawsuit has been consolidated with the first lawsuit,with a singletrial scheduled for October 2025.In October 2024,Cipla separately filed a petition at the U.S.Patent&Trademark Office(“USPTO”)for inter partes review ofone of the patents at issue in District Court litigation.In May 2025,the USPTO denied Ciplas petition.In June 2025,we received a letter from Aspiro Pharma Ltd.(“Aspiro”),indicating that it had submitted an ANDA to FDA to request permission to marketand manufacture a generic version of Veklury.Aspiro challenges six of the sixteen patents listed in the Orange Book for Veklury as not valid or not infringed byAspiros proposed ANDA product.In July 2025,we filed a lawsuit against Aspiro in the U.S.District Court of New Jersey.We intend to enforce and defend ourintellectual property.23Antitrust and Consumer ProtectionWe,along with Bristol-Myers Squibb Company(“BMS”),Johnson&Johnson,Inc.(“Johnson&Johnson”),and Teva Pharmaceutical Industries Ltd.(“Teva”)have been named as defendants in class action lawsuits filed in 2019 and 2020 related to various drugs used to treat HIV,including drugs used incombination antiretroviral therapy.Plaintiffs allege that we(and the other defendants)engaged in various conduct to restrain competition in violation of federaland state antitrust laws and state consumer protection laws.The lawsuits,which have been consolidated,are pending in the U.S.District Court for the NorthernDistrict of California.The lawsuits seek to bring claims on behalf of direct purchasers consisting largely of wholesalers and indirect or end-payor purchasers,including health insurers and individual patients.Plaintiffs seek damages,permanent injunctive relief and other relief.In the second half of 2021 and first halfof 2022,several plaintiffs consisting of retail pharmacies,individual health plans and United Healthcare,filed separate lawsuits effectively opting out of theclass action cases,asserting claims that are substantively the same as the classes.These cases have been coordinated with the class actions.In March 2023,theDistrict Court granted our motion to hold separate trials as to(i)the allegations against us and Teva seeking monetary damages relating to Truvada and Atripla(“Phase I”)and(ii)the allegations against us and,in part,Johnson&Johnson,seeking monetary damages and injunctive relief relating to Complera(“PhaseII”).In May 2023,we settled claims with the direct purchaser class and the retailer opt-out plaintiffs for$525 million,which we paid in the second half of2023.The settlement agreements are not an admission of liability or fault by us.In June 2023,the jury returned a complete verdict in Gileads favor on theremaining plaintiffs Phase I allegations.In November 2023,the court denied plaintiffs motion to set aside the verdict,and in February 2024,the court enteredfinal judgment on the Phase I verdict and certain summary judgment rulings.In September 2024,plaintiffs filed their opening appellate briefs challenging thePhase I verdict and those summary judgment rulings.We filed our responsive briefs in January 2025.Plaintiffs filed their reply briefs in March 2025.Oralargument is scheduled for October 2025.The court has stayed Phase II pending the appeal of Phase I.While we intend to vigorously oppose the appeal anddefend against the Phase II claims,we cannot predict the ultimate outcome.If plaintiffs are successful in their appeal or Phase II claims,we could be requiredto pay monetary damages or could be subject to permanent injunctive relief in favor of plaintiffs.In January 2022,we,along with BMS and Janssen Products,L.P.,were named as defendants in a lawsuit filed in the Superior Court of the State ofCalifornia,County of San Mateo,by Aetna,Inc.on behalf of itself and its affiliates and subsidiaries that effectively opts the Aetna plaintiffs out of the aboveclass actions.The allegations are substantively the same as those in the class actions.The Aetna plaintiffs seek damages,permanent injunctive relief and otherrelief.In March 2024,the court denied our motion for judgment on the pleadings to preclude Aetna from re-litigating claims that were dismissed at summaryjudgment in the above class action cases.We filed a writ petition appealing the denial of our motion for judgment on the pleadings,which the appellate courtdenied in May 2024.In April 2024,the court granted our motion to bifurcate the case to adjudicate the issue of preclusion before litigating the merits of thecase.In July 2024,Aetna filed a request to voluntarily dismiss two of its claims with prejudice,which the court subsequently granted,leaving only the claimsrelated to Truvada and Atripla.In September 2024,Aetna filed an amended complaint with respect to these claims.In October 2024,we filed a demurrer andmotion to strike plaintiffs claims.In April 2025,the court overruled the demurrer and stated in its order that an immediate appeal is warranted.In June 2025,we filed a writ petition to the Court of Appeal,which has been fully briefed and is pending before the court.Trial has been scheduled for October 2026.In February 2021,we,along with BMS and Teva,were named as defendants in a lawsuit filed in the First Judicial District Court for the State of NewMexico,County of Santa Fe by the New Mexico Attorney General.The New Mexico Attorney General alleges that we(and the other defendants)restrainedcompetition in violation of New Mexico antitrust and consumer protection laws.The New Mexico Attorney General seeks damages,permanent injunctiverelief and other relief.We moved to dismiss the case based on lack of personal jurisdiction and,in July 2023,the New Mexico Supreme Court remanded thecase back to the trial court for limited jurisdictional discovery.We intend to vigorously defend ourselves in these actions,however,we cannot predict the ultimate outcome.If plaintiffs are successful in their claims,wecould be required to pay significant monetary damages or could be subject to permanent injunctive relief awarded in favor of plaintiffs,which may result in amaterial,adverse effect on our results of operations and financial condition,including in a particular reporting period in which any such outcome becomesprobable and estimable.24Product LiabilityWe have been named as a defendant in one putative class action lawsuit and various product liability lawsuits related to Viread,Truvada,Atripla,Complera and Stribild.Plaintiffs allege that Viread,Truvada,Atripla,Complera and/or Stribild caused them to experience kidney,bone and/or tooth injuries.The lawsuits,which are pending in state or federal court in California and Missouri,involve approximately 23,000 active plaintiffs.Plaintiffs in these casesseek damages and other relief on various grounds for alleged personal injury and economic loss.The first bellwether trial in California state court wasscheduled to begin in October 2022 but is currently stayed pending the conclusion of appellate proceedings in the California Supreme Court.In the Californiafederal case,Gilead agreed to make a one-time payment of approximately$39 million to a group of plaintiffs(approximately 2,470 plaintiffs).The federalcourt set a trial date of March 2027 for the first bellwether trial of the remaining cases.In the putative class action pending in Missouri,the court has scheduleda hearing for August 2025 on,among other things,whether to grant the plaintiffs motion to certify a class action.We intend to vigorously defend ourselves inthese actions,however,we cannot predict the ultimate outcome.If plaintiffs are successful in their claims,we could be required to pay significant monetarydamages,which may result in a material,adverse effect on our results of operations and financial condition,including in a particular reporting period in whichany such outcome becomes probable and estimable.Government InvestigationIn 2017,we received a subpoena from the U.S.Attorneys Office for the Southern District of New York requesting documents related to our promotionalspeaker programs for HIV.In April 2025,we entered into a settlement agreement to resolve the governments investigation.Qui Tam LitigationA former sales employee filed a qui tam lawsuit against Gilead in March 2017 in U.S.District Court for the Eastern District of Pennsylvania.Followingthe governments decision not to intervene in the suit,the case was unsealed in December 2020.The lawsuit alleges that certain of Gileads hepatitis C virus(“HCV”)sales and marketing activities and donations to an independent charitable foundation violated the federal False Claims Act and various state falseclaims acts.The lawsuit seeks all available relief under these statutes.Health Choice Advocates,LLC(“Health Choice”)filed a qui tam lawsuit against Gilead in May 2020 in Texas state court.The lawsuit alleged that Gileadviolated the Texas Medicare Fraud Prevention Act(“TMFPA”)through our clinical educator programs for Sovaldi and Harvoni and our HCV and HIV patientsupport programs.The lawsuit sought all available relief under the TMFPA.Health Choice voluntarily dismissed the case without prejudice in August 2023,and commenced a new action in October 2023,asserting largely identical allegations and claims.In the newly filed action,the Texas Attorney General hasintervened as a plaintiff.We intend to vigorously defend ourselves in these actions,however,we cannot predict the ultimate outcomes.If any of these plaintiffs are successful intheir claims,we could be required to pay significant monetary damages,which may result in a material,adverse effect on our results of operations and financialcondition,including in a particular reporting period in which any such outcome becomes probable and estimable.Other MattersWe are a party to various legal actions that arose in the ordinary course of our business.We do not believe that it is probable or reasonably possible thatthese other legal actions will have a material adverse impact on our consolidated financial position,results of operations or cash flows.2511.EARNINGS(LOSS)PER SHAREThe following table shows the calculation of Basic and Diluted earnings(loss)per share attributable to Gilead:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except per share amounts)2025202420252024Net income(loss)attributable to Gilead$1,960$1,614$3,275$(2,556)Shares used in basic earnings(loss)per share attributable to Gilead calculation1,245 1,247 1,246 1,247 Dilutive effect of equity-based awards10 4 12 Shares used in diluted earnings(loss)per share attributable to Gilead calculation1,255 1,251 1,257 1,247 Basic earnings(loss)per share attributable to Gilead$1.57$1.29$2.63$(2.05)Diluted earnings(loss)per share attributable to Gilead$1.56$1.29$2.61$(2.05)Potential shares of common stock excluded from the computation of Diluted earnings(loss)per share attributable to Gilead because their effect wouldhave been antidilutive were 7 million and 5 million for the three and six months ended June 30,2025,respectively,and 22 million and 19 million for the threeand six months ended June 30,2024,respectively.12.INCOME TAXESThe following table summarizes our Income tax expense:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)2025202420252024Income(loss)before income taxes$2,429$2,053$4,077$(2,433)Income tax expense$468$438$802$123 Effective tax rate19.3!.4.7%(5.1)%Our effective income tax rate of 19.3%for the three months ended June 30,2025 differed from the U.S.federal statutory rate of 21%primarily due tofavorable changes in the fair value of our equity securities that are non-taxable for income tax purposes,tax benefits from stock-based compensation and adecrease in foreign deferred tax liabilities associated with the$190 million bulevirtide IPR&D intangible asset impairment charge.Our effective income tax rate of 19.7%for the six months ended June 30,2025 differed from the U.S.federal statutory rate of 21%primarily due to taxbenefits from stock-based compensation.Our effective income tax rate of 21.4%for the three months ended June 30,2024 differed from the U.S.federal statutory rate of 21%primarily due tounfavorable changes in the fair value of our equity securities that are non-deductible for income tax purposes,partially offset by a settlement with a taxauthority.Our effective income tax rate of(5.1)%for the six months ended June 30,2024 differed from the U.S.federal statutory rate of 21%primarily due to$3.9billion of non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay,partially offset by a decrease in state deferred taxliabilities associated with the$2.4 billion NSCLC IPR&D intangible asset impairment charge and settlements with tax authorities.Our income tax returns are subject to audit by federal,state and foreign tax authorities.We are currently under examination by the Internal RevenueService for our 2019 to 2021 tax years.There are differing interpretations of tax laws and regulations,and as a result,significant disputes may arise with thesetax authorities involving issues on the timing and amount of deductions and allocations of income among various tax jurisdictions.We periodically evaluate ourexposures associated with our tax filing positions.2613.SEGMENT INFORMATIONWe have one operating segment which primarily focuses on the discovery,development and commercialization of innovative medicines in areas of unmetmedical need.Our Chief Executive Officer,as the chief operating decision-maker(“CODM”),manages and allocates resources to the operations of ourcompany on an entity-wide basis,using Net income(loss)attributable to Gilead as the primary performance measure.Managing and allocating resources onthis basis enables our CODM to assess the overall level of resources available and how to best deploy these resources across functions and research anddevelopment(“R&D”)projects based on unmet medical need,scientific data,probability of technical and regulatory successful development,market potentialand other considerations,and,as necessary,reallocate resources among our internal R&D portfolio and external opportunities to best support the long-termgrowth of our business.Our CODM is regularly provided with entity-wide expense categories similar to those found on our Condensed ConsolidatedStatements of Operations,as well as the following:Three Months EndedSix Months EndedJune 30,June 30,(in millions)2025202420252024Selling and marketing expenses$864$805$1,617$1,548 General and administrative expenses501 572 1,006 1,204 Selling,general and administrative expenses$1,365$1,377$2,623$2,752 Asset information is not regularly provided to the CODM for assessing performance and allocating resources other than consolidated cash,cashequivalents and marketable debt securities,which can be found on our Condensed Consolidated Balance Sheets.27Item 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis is intended to provide material information around events and uncertainties known to management that are relevantto an assessment of the financial condition and results of operations of Gilead and should therefore be read in conjunction with our audited ConsolidatedFinancial Statements and the related notes thereto and other disclosures included as part of our Annual Report on Form 10-K for the year ended December 31,2024 and our unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30,2025 and the related notes thereto and otherdisclosures(including the disclosures under Part II,Item 1A.Risk Factors)included in this Quarterly Report on Form 10-Q.Management OverviewGilead Sciences,Inc.(including its consolidated subsidiaries,referred to as“Gilead,”the“company,”“we,”“our”or“us”)is a biopharmaceuticalcompany that has pursued and achieved breakthroughs in medicine for more than three decades,with the goal of creating a healthier world for all people.Weare committed to advancing innovative medicines to prevent and treat life-threatening diseases,including HIV,viral hepatitis,coronavirus disease 2019(“COVID-19”),cancer and inflammation.We operate in more than 35 countries worldwide,with headquarters in Foster City,California.Key Business UpdatesThe following represents a summary of notable business updates and events since the filing of our Annual Report on Form 10-K for the year endedDecember 31,2024,including certain items from our press releases,which readers are encouraged to review in full as available on our website .The content on the referenced website does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form10-Q.VirologyReceived U.S.Food and Drug Administration(“FDA”)approval for Yeztugo(lenacapavir)for pre-exposure prophylaxis(“PrEP”)to reduce the risk ofsexually acquired HIV in adults and adolescents weighing at least 35kg.Yeztugo is the first and only twice-yearly HIV PrEP option available in theU.S.Received a positive opinion under accelerated review from the European Medicines Agencys Committee for Medicinal Products for Human Use(“CHMP”)recommending lenacapavir for use as PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1acquisition risk.We also received a positive EU-Medicines for All opinion from the CHMP,which will facilitate national regulatory evaluations inlow-and lower-middle-income countries.Announced that FDA had placed a clinical hold on the HIV treatment trials of GS-1720 and/or GS-4182,including the WONDERS-1 andWONDERS-2 trials.These drug candidates are investigational and not approved anywhere globally.OncologyAnnounced positive topline results from the Phase 3 ASCENT-03 trial evaluating Trodelvy in patients with 1L metastatic triple-negative breast cancer(“mTNBC”)who are not candidates for PD-1/PD-L1 checkpoint inhibitors.Additionally,presented results from the Phase 3 ASCENT-04 trialevaluating Trodelvy plus Keytruda in 1L PD-L1 mTNBC at the American Society of Clinical Oncology(“ASCO”)meeting.Trodelvy is notapproved in either of these settings.Entered into an exclusive option and license agreement with Kymera Therapeutics,Inc.to develop novel oral molecular glue CDK2 degraders withbroad oncology treatment potential.InflammationReceived conditional marketing authorization from the European Commission for seladelpar for the treatment of primary biliary cholangitis(“PBC”)in combination with ursodeoxycholic acid(“UDCA”)in adults who have an inadequate response to UDCA alone,or as monotherapy in those unableto tolerate UDCA.28Key Financial ResultsThe following table summarizes our key financial results for the period and period-over-period changes:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages and per share amounts)20252024Change20252024ChangeTotal revenues$7,082$6,954 2%$13,749$13,640 1%Net income(loss)attributable to Gilead$1,960$1,614 21%$3,275$(2,556)NMDiluted earnings(loss)per share attributable to Gilead$1.56$1.29 21%$2.61$(2.05)NM_NM-Not MeaningfulTotal revenues increased 2%to$7.1 billion for the three months ended June 30,2025,compared to the same period in 2024,primarily due to higher HIV,Livdelzi and Trodelvy sales,partially offset by lower chronic hepatitis C virus(“HCV”)and Veklury sales.Total revenues increased 1%to$13.7 billion for the six months ended June 30,2025,compared to the same period in 2024,primarily due to higher HIVand Livdelzi sales,partially offset by lower Veklury and HCV sales.Net income attributable to Gilead was$2.0 billion and diluted earnings per share attributable to Gilead was$1.56 for the three months ended June 30,2025,compared to net income attributable to Gilead of$1.6 billion and diluted earnings per share attributable to Gilead of$1.29 for the same period in 2024.The increase was primarily due to:Net unrealized gains on equity securities compared to net unrealized losses in 2024;andHigher product sales;partially offset byA pre-tax in-process research and development(“IPR&D”)partial impairment charge of$190 million related to IPR&D assets acquired from MYRGmbH(“MYR”);andHigher research and development(“R&D”)expenses.Net income attributable to Gilead was$3.3 billion and diluted earnings per share attributable to Gilead was$2.61 for the six months ended June 30,2025,compared to net loss attributable to Gilead of$2.6 billion and diluted loss per share attributable to Gilead of$2.05 for the same period in 2024.The increasewas primarily due to:A$3.9 billion acquired IPR&D expense related to the acquisition of CymaBay Therapeutics,Inc.(“CymaBay”)during the three months ended March31,2024,which did not repeat;andA pre-tax IPR&D partial impairment charge of$2.4 billion during the three months ended March 31,2024 related to Trodelvy IPR&D assets acquiredfrom Immunomedics,Inc.,which did not repeat;partially offset byHigher income tax expense.Please refer to“Results of Operations”below for further information on results for the three and six months ended June 30,2025.29Results of OperationsRevenuesThe following table summarizes our Total revenues and period-over-period changes:Three Months Ended June 30,2025Three Months Ended June 30,2024(in millions,except percentages)U.S.EuropeRest ofWorldTotalU.S.EuropeRest ofWorldTotalChangeProduct sales:HIVBiktarvy$2,799$429$302$3,530$2,585$370$277$3,232 9scovy601 24 28 653 434 25 26 485 35%Genvoya322 40 16 377 372 45 23 440(14)%Odefsey221 66 11 298 233 72 10 315(5)%Symtuza-Revenue share88 33 3 124 131 34 3 168(26)%Other HIV65 33 9 107 65 25 15 105 2%Total HIV4,096 624 368 5,088 3,821 571 353 4,745 7%Liver DiseaseSofosbuvir/Velpatasvir184 81 76 342 267 84 126 476(28)%Vemlidy122 13 117 252 117 11 115 243 4%Other Liver Disease106 76 19 201 47 47 19 113 77%Total Liver Disease413 170 211 795 431 142 259 832(4)%Veklury51 19 50 121 76 53 85 214(44)%OncologyCell TherapyTecartus41 41 9 92 63 37 7 107(14)%Yescarta162 154 77 393 186 169 58 414(5)%Total Cell Therapy203 196 86 485 250 206 66 521(7)%Trodelvy224 96 44 364 224 69 26 320 14%Total Oncology427 291 131 849 474 275 92 841 1%OtherAmBisome7 65 56 129 17 69 65 151(14)%Other44 8 21 73 98 8 24 130(44)%Total Other52 73 77 202 115 77 88 280(28)%Total product sales5,038 1,178 838 7,054 4,916 1,118 878 6,912 2%Royalty,contract and other revenues13 10 4 27 25 15 1 41(34)%Total revenues$5,051$1,189$842$7,082$4,941$1,133$879$6,954 2%(1)(2)(3)(4)(5)30Six Months Ended June 30,2025Six Months Ended June 30,2024(in millions)U.S.EuropeRest ofWorldTotalU.S.EuropeRest ofWorldTotalChangeProduct sales:HIVBiktarvy$5,272$804$603$6,679$4,900$735$542$6,177 8scovy1,139 45 55 1,239 805 51 55 911 36%Genvoya627 79 35 741 704 95 44 843(12)%Odefsey436 123 20 579 457 148 21 626(7)%Symtuza-Revenue share170 62 6 238 236 67 6 309(23)%Other HIV115 63 19 198 125 70 27 222(11)%Total HIV7,760 1,177 738 9,675 7,226 1,167 695 9,088 6%Liver DiseaseSofosbuvir/Velpatasvir351 161 175 687 515 163 203 881(22)%Vemlidy222 24 257 504 212 22 233 467 8%Other Liver Disease175 152 35 362 89 94 38 221 64%Total Liver Disease748 338 467 1,553 816 279 474 1,569(1)%Veklury250 41 132 423 391 123 255 769(45)%OncologyCell TherapyTecartus82 72 17 171 118 73 16 207(18)%Yescarta321 304 154 779 357 327 110 794(2)%Total Cell Therapy403 376 171 949 475 400 126 1,001(5)%Trodelvy405 171 81 657 429 137 62 628 5%Total Oncology808 547 252 1,606 904 537 188 1,629(1)%OtherAmBisome13 132 123 268 31 139 124 294(9)%Other91 16 35 143 156 18 36 209(32)%Total Other104 149 158 410 188 156 160 504(19)%Total product sales9,669 2,251 1,747 13,668 9,525 2,262 1,772 13,559 1%Royalty,contract and other revenues49 21 10 81 49 30 2 81 1%Total revenues$9,719$2,273$1,757$13,749$9,574$2,292$1,774$13,640 1%_ Represents our revenue from cobicistat(“C”),emtricitabine(“FTC”)and tenofovir alafenamide(“TAF”)in Symtuza(darunavir/C/FTC/TAF),a fixed dose combination product commercializedby Janssen Sciences Ireland Unlimited Company.Includes Atripla,Complera/Eviplera,Emtriva,Stribild,Sunlenca,Truvada,Tybost and Yeztugo.Includes Epclusa and the authorized generic version of Epclusa sold by Gileads separate subsidiary,Asegua Therapeutics LLC(“Asegua”).Includes ledipasvir/sofosbuvir(Harvoni and the authorized generic version of Harvoni sold by Asegua),Hepcludex,Hepsera,Livdelzi/Lyvdelzi,Sovaldi,Viread and Vosevi.Includes Cayston,Jyseleca,Letairis and Zydelig.HIVHIV product sales increased 7%to$5.1 billion for the three months ended June 30,2025,compared to the same period in 2024,primarily due to higherdemand and higher average realized price,inclusive of the U.S.Medicare Part D program redesign impact.In particular:Biktarvy sales increased 9%primarily due to higher demand,including patients switching from Genvoya and other Gilead HIV products;andDescovy sales increased 35%primarily due to higher average realized price and higher demand.HIV product sales increased 6%to$9.7 billion for the six months ended June 30,2025,compared to the same period in 2024,primarily due to higherdemand and higher average realized price,inclusive of the U.S.Medicare Part D program redesign impact.In particular:Biktarvy sales increased 8%primarily due to higher demand,including patients switching from Genvoya and other Gilead HIV products;andDescovy sales increased 36%primarily due to higher average realized price and higher demand.(1)(2)(3)(4)(5)(1)(2)(3)(4)(5)31Liver DiseaseLiver Disease product sales decreased 4%to$795 million for the three months ended June 30,2025,compared to the same period in 2024,primarily dueto lower average realized price,inclusive of the U.S.Medicare Part D program redesign impact,and demand for HCV products.This decrease was partiallyoffset by higher demand for Livdelzi,Hepcludex and chronic hepatitis B virus(“HBV”)products.Liver Disease product sales decreased 1%to$1.6 billion for the six months ended June 30,2025,compared to the same period in 2024,primarily due tolower average realized price,inclusive of the U.S.Medicare Part D program redesign impact,and demand for HCV products.This decrease was partially offsetby higher demand for Livdelzi,HBV products and Hepcludex.VekluryVeklury product sales decreased 44%to$121 million for the three months ended June 30,2025,compared to the same period in 2024,primarily due tolower rates of COVID-19-related hospitalizations.Veklury product sales decreased 45%to$423 million for the six months ended June 30,2025,compared to the same period in 2024,primarily due tolower rates of COVID-19-related hospitalizations.OncologyCell TherapyCell Therapy product sales decreased 7%to$485 million for the three months ended June 30,2025,compared to the same period in 2024,primarily dueto lower demand reflecting ongoing competitive headwinds,partially offset by higher average realized price.Cell Therapy product sales decreased 5%to$949 million for the six months ended June 30,2025,compared to the same period in 2024,primarily due tolower demand reflecting ongoing competitive headwinds,partially offset by higher average realized price.TrodelvyTrodelvy product sales increased 14%to$364 million for the three months ended June 30,2025,compared to the same period in 2024,primarily due tohigher demand and inventory dynamics.Trodelvy product sales increased 5%to$657 million for the six months ended June 30,2025,compared to the same period in 2024,primarily due tohigher demand.Foreign Currency Exchange ImpactWe generally face exposure to movements in foreign currency exchange rates,primarily in the Euro.We use foreign currency exchange contracts to hedgea portion of our foreign currency exposures.Approximately 27%and 26%of our product sales were denominated in foreign currencies during the three months ended June 30,2025 and 2024,respectively.Foreign currency exchange,net of hedges,had a favorable impact on our total product sales of$41 million for the three months ended June 30,2025,based on a comparison using foreign currency exchange rates from the three months ended June 30,2024.Approximately 27%and 28%of our product sales were denominated in foreign currencies during the six months ended June 30,2025 and 2024,respectively.Foreign currency exchange,net of hedges,had an unfavorable impact on our total product sales of$39 million for the six months ended June 30,2025,based on a comparison using foreign currency exchange rates from the six months ended June 30,2024.32Costs and ExpensesThe following table summarizes our costs and expenses and period-over-period changes:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)20252024Change20252024ChangeCost of goods sold$1,501$1,544(3)%$3,041$3,096(2)%Product gross margin78.7w.76 bps77.7w.2X bpsResearch and development expenses$1,491$1,351 10%$2,870$2,871quired in-process research and development expenses$61$38 61%$315$4,169(92)%In-process research and development impairments$190$NM$190$2,430(92)%Selling,general and administrative expenses$1,365$1,377(1)%$2,623$2,752(5)%_NM-Not MeaningfulProduct Gross MarginProduct gross margin increased to 78.7%for the three months ended June 30,2025,compared to the same period in 2024,primarily driven by productmix.Product gross margin remained relatively flat for the six months ended June 30,2025,compared to the same period in 2024.Research and Development ExpensesResearch and development expenses consist primarily of personnel costs including salaries,benefits and stock-based compensation expense,infrastructure,materials and supplies and other support costs,research and clinical studies performed by contract research organizations and our collaborationpartners and other outside services.We manage these expenses by identifying the research and development(“R&D”)activities we expect to be performed during a given period and thenprioritizing efforts based on scientific data,probability of successful technical development and regulatory approval,market potential,available human andcapital resources and other considerations.We regularly review our R&D activities based on unmet medical need and,as necessary,reallocate resources amongour internal R&D portfolio and external opportunities that we believe will best support the long-term growth of our business.We do not track total R&Dexpenses by product candidate,therapeutic area or development phase.33The following table provides a breakout of expenses by major cost type:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)20252024Change20252024ChangePersonnel,infrastructure and other support costs$855$830 3%$1,709$1,793(5)%Clinical studies and other costs636 520 22%1,160 1,077 8%Research and development expenses$1,491$1,351 10%$2,870$2,871%Research and development expenses increased 10%to$1.5 billion for the three months ended June 30,2025,compared to the same period in 2024.Personnel,infrastructure and other support costs remained relatively flat.Clinical studies and other costs increased primarily due to higher spend on clinicalmanufacturing and studies as well as fair value adjustments to the MYR-related contingent consideration.Research and development expenses remained relatively flat for the six months ended June 30,2025,compared to the same period in 2024.Personnel,infrastructure and other support costs decreased primarily due to the impact of stock-based compensation expenses and other integration costs related to theacquisition of CymaBay during the six months ended June 30,2024,which did not repeat,as well as lower restructuring costs.Clinical studies and other costsincreased primarily due to fair value adjustments to the MYR-related contingent consideration and higher spend related to new and progressing clinical studies.Acquired In-Process Research and Development ExpensesAcquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed IPR&D projects,acquireddirectly in a transaction other than a business combination,that do not have an alternative future use,including upfront and pre-commercialization milestonepayments related to various collaborations and the costs of rights to IPR&D projects.Acquired in-process research and development expenses were$61 million for the three months ended June 30,2025.Acquired in-process research anddevelopment expenses were$315 million for the six months ended June 30,2025,primarily related to$250 million associated with the LEO Pharma A/Scollaboration in January 2025.Acquired in-process research and development expenses were$38 million for the three months ended June 30,2024.Acquired in-process research anddevelopment expenses were$4.2 billion for the six months ended June 30,2024,primarily related to$3.9 billion associated with the CymaBay acquisition inMarch 2024 and$100 million associated with the Arcus Biosciences,Inc.collaboration amendment in January 2024.See Note 6.Acquisitions,Collaborations and Other Arrangements of the Notes to Condensed Consolidated Financial Statements included in Part I,Item 1of this Quarterly Report on Form 10-Q for additional information.34In-Process Research and Development Impairment2025 ImpairmentDuring the three months ended June 30,2025,additional competitive clinical data became available indicating a potentially more competitive market forbulevirtide where it is not yet approved.Based on our evaluation of the data,and in connection with the preparation of the financial statements for the secondquarter,we performed an interim impairment test and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below itscarrying value.As a result,we recognized a partial impairment charge of$190 million in In-process research and development impairments on our CondensedConsolidated Statements of Operations for the three months ended June 30,2025.To arrive at the revised estimated fair value as of June 30,2025,we used a probability-weighted income approach that discounts expected future cashflows to present value,which requires the use of Level 3 fair value measurements and inputs,including critical estimated inputs,such as:revenues andoperating profits related to the planned utilization of bulevirtide outside of the European Union(“EU”),which includes inputs such as addressable patientpopulation,projected market share,treatment duration,and the life of the potential commercialized product;the probability of technical and regulatory success;the time and resources needed to complete the development and approval of bulevirtide outside of the EU;an appropriate discount rate based on the estimatedweighted-average cost of capital for companies with profiles similar to our profile;and risks related to the viability of and potential alternative treatments inany future target markets.Our revised discounted cash flows for the June 30,2025 fair value estimation primarily reflected the updated expectations forbulevirtides potential market share outside of the EU.2024 ImpairmentIn January 2024,we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating sacituzumab govitecan-hziy(“SG”)indicating that thestudy did not meet its primary endpoint of overall survival in previously treated metastatic non-small cell lung cancer(“NSCLC”),thus triggering a review forpotential impairment of the NSCLC IPR&D intangible asset.Based on our evaluation of the study results and all other data currently available,and inconnection with the preparation of the financial statements for the first quarter,we performed an interim impairment test and determined that the revisedestimated fair value of the NSCLC IPR&D intangible asset was below its carrying value.As a result,we recognized a partial impairment charge of$2.4 billionin In-process research and development impairments on our Condensed Consolidated Statements of Operations for the three months ended March 31,2024.To arrive at the revised estimated fair value as of March 31,2024,we used a probability-weighted income approach that discounts expected future cashflows to present value,which requires the use of Level 3 fair value measurements and inputs,including critical estimated inputs,such as:revenues andoperating profits related to the planned utilization of SG in NSCLC,which includes inputs such as addressable patient population,projected market share,treatment duration,and the life of the potential commercialized product;the probability of technical and regulatory success;the time and resources needed tocomplete the development and approval of SG in NSCLC;an appropriate discount rate based on the estimated weighted-average cost of capital for companieswith profiles similar to our profile;and risks related to the viability of and potential alternative treatments in any future target markets.Our revised discountedcash flows for the March 31,2024 fair value estimation primarily reflected the smaller addressable market that Trodelvy could serve among metastatic NSCLCpatients and a delay in expected launch timing for second-line plus patients.If future events result in adverse changes in the key assumptions used in determining fair value,including the timing of product launches,information onthe competitive landscape of treatments in this indication,changes to the probability of technical or regulatory success,failure to obtain anticipated regulatoryapproval or discount rate,among others,additional impairments may be recorded and could be material to our financial statements.Selling,General and Administrative ExpensesSelling,general and administrative expenses are recorded when incurred and consist primarily of personnel costs,facilities and overhead costs,andselling,marketing and advertising expenses,as well as other general and administrative costs related to finance,human resources,legal and otheradministrative activities.The following table summarizes our Selling,general and administrative expenses and period-over-period changes:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)20252024Change20252024ChangeSelling and marketing expenses$864$805 7%$1,617$1,548 4%General and administrative expenses501 572(12)%1,006 1,204(16)%Selling,general and administrative expenses$1,365$1,377(1)%$2,623$2,752(5)5Selling,general and administrative expenses remained relatively flat for the three months ended June 30,2025,compared to the same period in 2024.Selling and marketing expenses increased mainly due to higher promotional and outside service expenses as well as higher compensation costs.General andadministrative expenses decreased mainly due to lower spend on corporate initiatives.Selling,general and administrative expenses decreased 5%to$2.6 billion for the six months ended June 30,2025,compared to the same period in 2024.Selling and marketing expenses increased mainly due to higher promotional expenses.General and administrative expenses decreased mainly due to lowerspend on corporate initiatives as well as stock-based compensation expenses related to the acquisition of CymaBay during the six months ended June 30,2024,which did not repeat.Interest Expense and Other(Income)Expense,NetThe following table summarizes our Interest expense and Other(income)expense,net and period-over-period changes:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)20252024Change20252024ChangeInterest expense$254$237 7%$513$491 5%Other(income)expense,net$(208)$355 NM$120$265(55)%(Gain)loss from equity securities,net$(142)$392 NM$284$405(30)%Interest income$(73)$(35)NM$(166)$(144)16%Other,net$6$(1)NM$2$3(44)%_NM-Not MeaningfulInterest expense increased slightly for the three and six months ended June 30,2025,compared to the same periods in 2024,primarily due to higher debtbalances and higher weighted-average interest rates on the debt.Favorable movements in Other(income)expense,net for the three months ended June 30,2025,compared to the same period in 2024,primarily relatedto net unrealized gains from equity securities compared to net unrealized losses in 2024 as well as higher interest income.Favorable movements in Other(income)expense,net for the six months ended June 30,2025,compared to the same period in 2024,primarily related tolower net unrealized losses from equity securities and higher interest income.Income TaxesThe following table summarizes our Income tax expense and period-over-period changes:Three Months EndedSix Months EndedJune 30,June 30,(in millions,except percentages)20252024Change20252024ChangeIncome(loss)before income taxes$2,429$2,053 18%$4,077$(2,433)NMIncome tax expense$468$438 7%$802$123 NMEffective tax rate19.3!.4%-207 bps19.7%(5.1)%NM_NM-Not MeaningfulOur effective tax rate decreased for the three months ended June 30,2025,compared to the same period in 2024,primarily due to favorable changes inthe fair value of our equity securities that are non-taxable for income tax purposes,partially offset by a settlement with a tax authority during the second quarterof 2024.Our effective tax rate increased for the six months ended June 30,2025,compared to the same period in 2024,primarily due to the non-deductibleacquired IPR&D expense recorded in connection with our first quarter 2024 acquisition of CymaBay,partially offset by tax benefits from stock-basedcompensation.In July 2025,the U.S.enacted tax reform legislation through the One Big Beautiful Bill(“OBBB”)Act.Included in this legislation are provisions thatrestored immediate expensing of domestic R&D expenditures and certain capital expenditures and modified the U.S.taxation of profits derived from foreignoperations.The legislations provisions have varying effective dates,some of which begin in 2025.While we are still assessing the full impact of the newlegislation,we do not expect it to have a material impact on our result of operations.36Liquidity and Capital ResourcesWe regularly analyze our ability to generate and obtain adequate amounts of cash to meet our short-term and long-term requirements and plans.Ourcapital priorities include:(i)investing in our business and R&D pipeline,(ii)continuing select partnerships and business development transactions,(iii)growing our dividend over time,and(iv)repurchasing shares to offset dilution and opportunistically reduce share count.Based on our evaluation of our currentposition of liquidity,available capital resources and our material cash requirements,we believe that we can satisfy our capital needs for the next 12 months andthe foreseeable future.LiquidityCash and cash equivalents were$5.1 billion and marketable debt securities were$2.0 billion as of June 30,2025.The table below summarizes our cashflow activities,followed by our analysis of changes and trends:Six Months EndedJune 30,(in millions,except percentages)20252024ChangeNet cash provided by(used in):Operating activities$2,584$3,544(27)%Investing activities(2,531)(2,514)1%Financing activities(4,993)(4,314)16fect of exchange rate changes on cash and cash equivalents92(29)NMNet change in cash and cash equivalents$(4,848)$(3,313)46%_NM-Not MeaningfulOperating ActivitiesNet cash provided by operating activities is our primary source of funds,driven mainly by collections on product sales,partially offset by operatingspend.Changes in working capital balances,generally associated with the timing of collections and payments,as well as unanticipated payments related tolitigation,taxes or other matters,may create some variation in any given year.Net cash provided by operating activities decreased for the six months endedJune 30,2025,compared to the same period in 2024,primarily due to higher income tax payments as well as higher operating payments,partially due totiming,and higher inventory purchases.During the six months ended June 30,2025,we paid the final$1.3 billion federal income tax payment for transition taxon the mandatory deemed repatriation of foreign earnings related to the Tax Cuts and Jobs Act.As a result of the OBBB Act,we anticipate a reduction in income tax payments for the remainder of the year ending December 31,2025.Investing ActivitiesNet cash used in investing activities remained relatively flat for the six months ended June 30,2025,compared to the same period in 2024.During the sixmonths ended June 30,2025,we utilized cash primarily for purchases of marketable debt securities.Net cash used in investing activities for the six monthsended June 30,2024 primarily related to the$3.9 billion net cash payment for the CymaBay acquisition and purchases of equity securities,partially offset byproceeds from the liquidation of marketable debt securities.Net cash used in investing activities may vary in any given year depending on the favorability ofstrategic opportunities for the business.Financing ActivitiesThe change in Net cash used in financing activities for the six months ended June 30,2025,compared to the same period in 2024,was due mostly tohigher common stock repurchases.During the six months ended June 30,2025,we utilized cash of$2.0 billion for dividend pa
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