Pfizer Q1 2024 Earnings Call Transcript

I think Aamir, that's a question for you. Then maybe Alexandre also you can add because now we started already to register and approve the product in international markets. Aamir?

Louise, thanks for the question. So it very much appears like the RSV vaccination market is following a seasonal trend. So you expect the dynamics in Q4 versus Q1 to be different. In Q1, what we saw for the market is for older adults, it certainly attenuated over the course of the quarter. So there was a peak in the second week of January and then a steady week-by-week decline since then. Now in terms of the dynamics for our business and Abrysvo, our performance was in line with what we expected. We think this will follow a seasonal trend. And we think we're very well positioned for the fall season for several reasons. One is we're progressing our retail contracting. Second, is we have a real strength in the non-retail channel. You referred to GSK. They reported their revenues. When you look at the mix of U.S. revenues as reported, it's about a 60, 40 mix. Our retail share is lower than that, but our non-retail share is much higher and that portion of our business really doubled between Q4 and Q1 from about 9% to 17%. And I think that just speaks to our strength in doctors' offices and the relationships we have with organized customers. And I'll also note that later this year, if approved, we will have a new presentation of ACT-O-VIAL, which demonstrates ease of administration and also our clinical data, which Albert referred to in his remarks for label expansion for Abrysvo for 18 to 59-year-olds as well as that are at risk as well as durable efficacy through two seasons. I think the combination of these commercial efforts as well as potential label expansion really position us well for a fall season.

Thank you, Aamir. Now, Alexandre.

So Louise, thanks for the questions. On the international front, we actually made great progress on the Abrysvo. As you know, we got approval in the second half of 2023 in Europe and in the U.K. And since then, we've been working with the health authority and the expert to provide medical evidence and healthcare system benefit associated with the protection against low respiratory tract infection associated with RSV and through immunizations of maternal or through the immunization of all the other. So we're making good progress. And actually we have already received the recommendation in the U.K., in Australia, in Norway, and we are progressing and waiting some recommendation from the Vaccine Technical Committee in many other European markets.

We also had good progress from a regulatory standpoint because it was a milestone with the approval of older adults and MI during the maternal immunization in Japan in the first quarter as well as Kingdom of Saudi Arabia. So overall, they don't yet translate into financials because it takes time to get to the approval, to get to VTC and to get funding for those campaign, but we see significant opportunity that we can address unmet medical need in the international. Just to give you one example, in Europe, for instance, half of the hospitalization due to respiratory tract infection in the first year of life were caused by RSV. So there is definitely a great opportunity and the majority of those hospitalization occur for the first three months of age. And as you know, Abrysvo is the only vaccine that help protect infants from low tract infection caused by RSV immunization from birth to six months. So we see a great opportunity.

Thank you, Alexandre. Let's go to the next question, please. Thank you.

Yes. Thank you. Clearly done a great one indeed. Let me take that one so to clear the way. It's not new. We don't have news on the Danuglipron. Everything is as we had discussed before. So we are waiting around midyear to get the totality of the data that relates to the once-a-day formulation. And then based on the data and everything else, we will make decisions for future plans. So we'll speak about them when we have more to say. However, now let's go to Aamir about the Part-D redesign in 2025 that you are expecting?

Sure. Terence, thanks for the question. And as you can imagine, there's many moving parts to Part-D redesign. I think relevant to our business, I think it's important to first note that as part of what already went into place with the redesign, there is no cost sharing imposed on vaccines. So that given our significant vaccines portfolio is a positive. And then obviously, over the course of '24 and '25, there's other dynamics with out-of-pocket cost caps which create better access for patients and that is helpful to volumes, and we're starting to see that in '24 in some parts of our business, including on Vynda. And then there's things to come, including a change in that cap as well as patient smoothing. So we'll see how that plays out. And obviously, there's also changes in how costs are shared between plans, manufacturers, government and patients. So how all of that gets implemented, we're tracking that very closely. We're not offering any specific guidance in terms of direct dollar impact on our business in 2025 because there's still a lot to come on this. And when we are ready to do that, we certainly will.

Thank you, Aamir. Let's go to the next question, please.

That's a very good question. Why don't we go first to you, Dave, to speak a little bit about clearly Seagen is doing very well if you expect that can become accretive earlier. Also, I would like to hear some comments from Chris about the progress of the Seagen portfolio and then Doug can comment on the IP situation or legal consel. So Dave?

Yes, so just maybe on Seagen from a financial perspective, obviously, clearly a very solid quarter and a very solid start to the year. I think we're not changing our expectations both short-term and long-term for Seagen, but I think we're cautiously optimistic as we look forward. So probably nothing to update financially other than our continued commitment to the financial metrics that we've already established. And again, we're probably cautiously optimistic on the trends that we're seeing underlying that business at this point in time.

Do you want to make some comments also, Chris, about the performance of the Seagen business.

Yeah, I think just to add to what Dave has said, you've -- it's early days for Padcev as we pointed out. The -- for 302, the data was -- and we just launched early this year and we've already seen 164% year-on-year pro-forma growth. It's early, but we're very pleased that we've got NCCN guidelines category one. We've got the New England Journal publication. We've got uptake in both academic and community settings. In fact, 70% of the current accounts on the community and we're looking forward now because I think we're well set for the future in the muscle-invasive bladder cancer setting and those two studies that will read out later in 2025, '26, '27.

Thank you very much, Chris. Doug, what about the situation with the IP disputes?

Yes, Vyndaqel Vyndamax currently has U.S. patent exclusivity through the end of this year, but we have a patent pending patent term extension, which would take it out to December of 2028, and we may be filing additional requests for patent term extensions while that is pending. In major European markets, our patents expire in November of 2026. And in Japan, the patent expires in 2026, but there's regulatory exclusivity through March of 2029 for cardiomyopathy.

Thank you, Doug. And operator, let's move to the next question. Thank you, Akash.

Yeah. So this is Dave. We're always looking to improve our performance from both a gross margin and operating performance perspective. So I'll say we'll continue to focus on that. Obviously, as you know, there's three things that improved our gross margin rate in the quarter. Some of those are temporal, some of those are more permanent. I think what is encouraging within our gross margin performance is the fact that our cost-control element across our manufacturing platform was really strong. We expect that to be -- continue to be a focus. Keep in mind that our Comirnaty volume is very back-half weighted. Comirnaty, as you know, carries because of our profit share carries a very low gross margin rate. So that mix will reverse itself in the back-half of the year, compressing and putting pressure on our gross margin rate. So you should expect that dynamic to occur as that product plays itself out through 2024.

Thank you very much. Alright, let's go to the next question, please.

Thank you very much, Vamil. Aamir Nurtec, and then Chris, myeloma.

Thanks for the question, Vamil. So I'm happy to talk a little bit about Nurtec. We'd like to accelerate the momentum of Nurtec and we're taking several steps to do that. For the quarter itself, what we're encouraged by is the demand and the volumes that we saw. And then on the flip side, as you already alluded to, the performance in the quarter was impacted by gross-to-net. So on demand, a few points to just keep in mind. Nurtec continued its market leadership within the class with a 49% TRx share and that was up 28% from Q1 of last year. Secondly, NBRx share, which we keep a very close eye on, that volume as a whole hit its high point since we closed the Biohaven acquisition at the end of '22. So that was up versus last year, but also importantly up versus Q4 of '23. And there were about 11,000 new Nurtec writers in Q1 and this is 90% of all the new writers within the oral CGRP class. So there's a lot about the volume and the demand that we're encouraged by. Now on gross-to-net, there were three issues this quarter. One is you typically tend to see this dynamic in the first quarter of every year. We saw that last year too, just given the benefit design dynamics. Secondly, we did have some payer mix issues between government and commercial channels this quarter. And then finally, there was an unfavorable one-time prior-period adjustment to our GTNs in Q1. To your question about the rest of the year, for Nurtec, we expect continued growth. We've talked about the fact that the fundamentals in terms of untreated patients and undertreated patients remain strong. We also think that some of the gross-to-net that I described is going to be temporal and will slowly abate over the course of the rest of the year. And then we have made a number of changes in our commercial execution in terms of what we're doing with patient engagement and focusing our field force resources on physician awareness in a different way and also working to reduce friction for patient access. So overall, we do expect continued growth from Nurtec in the balance of '24.

Thank you. Chris, about ELREXFIO?

Thank you, Albert. So the reason Albert didn't list ELREXFIO as a major growth driver, just to remind. So you pointed out Lorbrena, Xtandi and Padcev as the immediate biggest growth drivers for oncology, but we're absolutely confident that ELREXFIO will become over the next couple of months and years, a major driver for oncology. Just a reminder, we've seen very promising efficacy data in highly refractory patient populations with deep and durable responses and we reported the longest reported median progressive-free survival in the recurrent relapsed-refractory setting of 17.2 months. So of course, recognizing there is no definitive conclusion because there's no head-to-head studies. We're currently encouraged by what we've seen with the uptake and with the bulk of new patient starts as we have planned and we remain very optimistic for the future from the current indication as well as from the future indications. And a reminder that we have four ongoing registrational studies. In the next 12 months, the first Phase-3 study will read-out multiple -- and the MM5 study. We've also recently received J-code for access and we smoothened reimbursement process and continue to gain favorable positions on various pathways and in some the most favorable pathways. We are looking forward to update you very soon on more things for ELREXFIO.

Okay, thank you, Chris. Maybe Alexandre, do you have anything to add about the product in international markets?

Yes. On ELREXFIO, we actually have -- we're progressing very nicely because as you know, we got approval in Europe in December of 2023 and in the UK in January and in Japan in March 2024. So we are now moving into reimbursements and we've got early access considering the clinical profile -- exceptional clinical profile of the product. So that's why we got in some market early access and that's why we started doing sales in the first quarter. But we are very satisfied by that we could close the time-to-market gap versus competitor. And in some cases, like in Japan, we actually indeed became first-in-class approved. So that we are moving into registration -- reimbursement discussion and introduction of the product later in the year.

Yeah. Overall, in most international markets, there is a gap between the approval and the access grant. But because of the profile of the product, we saw early access, which is basically something that happens on an exceptional pace if the product is unique, but some countries before they approve the price, they are allowing you to have access to your own price and then they get. So that is a very good signs for this product. We are really feeling very embolished [Phonetic] when we see the clinical profile and opinions of the keeping on it. Thank you. Let's move now to the next question, please.

You, Dave, you don't have any.

Thank you very much, Dave. So Dave Denton, please you take the cost structure first.

Yeah. First, as you well know, rightsizing our cost structure is incredibly important for us from -- as we think forward for margin expansion and improving our financial returns. As we look through Q1 and through the balance of the year, keep in mind the cost of changes that we've made in the U.S. are largely complete. Obviously, in ex-U.S., some of those changes lag. So you will see changes in the cost structure ex-U.S. for the balance of the year. Those are probably not quite as large as we look forward compared to what has already happened at this point. But I would just say that this will be a constant focus for us as we think about cost and margin enhancements going forward. This is now we're on a continual cycle of thinking about how we invest and what is the appropriate cost structure in support of our revenue objectives for this business going forward?

Thank you, Dave. And Doug, can you please clarify a few things about Vyndaqel to Dave's question?

Sure. Just to be clear, Dave, we shouldn't think beyond December 2028 on Vyndaqel and Vyndamax. So we've got a patent term extension that is filed and is pending. And all I was saying was that in addition to that patent term extension, which would take it out to December 2028 that we filed and its pending, we may file additional patent term extensions again though just to take it out to December 2028. I hope that's clear.

Thank you for clarifying that. Okay. Now let's go to the next question, please.

Well, maybe I'll take that first. From a guide perspective, I would not -- we obviously did not expect this final adjustment. It was an estimate that we did at the end-of-the year. We're now finalizing the adjustment based on the returns that we've seen and it is now complete. I would say that as we look-forward for the full-year, both for Paxlovid and for the full-year of all of our products, we're cautiously optimistic about where we are. I think Paxlovid started off from a very solid utilization and keep in mind, that product will trend consistent with infection rates across the globe. And we're still cautiously optimistic that we will achieve our objective and we do not expect anything less than our original expectation at this point in time though.

Thank you, David. And Michael, on the ACIP meetings and the June October recommendations.

Yeah. First, to punctuate, we're good to hear you interested in our RSV vaccine. We have a lot of positive and informative datasets coming, 18 to 59, we have already been out sharing a robust outcome for that and filing is imminent to happen in U.S. FDA. We also have data coming on second season, full second season and data so far that have been available show robust and probably best-in-class profile for us. And you heard Aamir mention, we also have new delivery formats. So there's a lot of positive things happening to further strengthen Abrysvo. For a formal decision on a recommendation, ACIP normally wait until the product is FDA approved. We don't know exactly when FDA will potentially approve. We think clearly given this unique age range that it can happen to be meaningful for the fall, but that needs to be, of course, pending FDA's views. But we will certainly be very open to share data from several of these new important datasets that could help ACIP to understand the planning of the various RSV products. And we think that would be very helpful for ACIP as Abrysvo dataset are robust and in some sense, unique in a positive way. Thank you.

In general, a couple of comments for both of these questions. On the ACIP, we always don't speak for ACIP. So it's not appropriate. So ACIP will do what they think to do. Of course, typically, as we say, they wait to see FDA approvals and we hope that they will ask us to present the data in June, but it's something that we don't know. What we know it is that whatever they decide, whenever they decide, we have prepared our marketing and commercial plans in the U.S. as we do, of course, in other countries, so that we can maximize the approvals or the recommendations or the data that we have ahead. So that's one thing. And the other thing, Dave explained that we are cautiously optimistic, of course, about that comes through the entire line of guidance that we gave. We are cautiously optimistic. Our revenues are cautiously optimistic on margins. And of course, we improved the -- again, cautiously that we think the EPS. And you need to see all of that in the context of guys who have been there last year with a big misalignment between what we were expecting to come for COVID and eventually what came. And that it is something that you know makes us to be double cautious when we speak about projections, we know credibility is extremely important for us. So everything we say, we feel rocket solid that we will achieve and we don't say anything more than that. We prefer to achieve rather than say. So that is a context to all the guidance that we have provided this time. So with that, let's go to the next question, please.

I think David can take both of them. Dave?

Yes. So on the gross margin side, as I said, there was a couple of things that impacted favorably our performance in Q1. The items that you listed both new product launches and in-sourcing, the in-sourcing is probably a longer-term implication to us because those don't happen in an immediate quarter. So as you think about Seagen, it's probably a multiyear phenomenon that we have here. But I don't think there was an outsized impact to that. And obviously, the new launches, we plan for those to be compressing our gross margin rates of which they did. And I think we're off to a very solid start. But keep in mind what I said earlier, in the back-half of the year, commodity sales will begin to ramp-up. They compress our gross margin rate fairly significantly given the partner contribution and payment that we have to our partners. So, I would expect that to dampen our gross margin performance in the back half of the year. But Umer, as you well know, is we're focused on over delivering if we can. So I think we will do everything we can to continue to improve our performance there. And then finally, as we think about the balance sheet, first and foremost, I just want to reiterate that our number 1 priority from a capital allocation perspective is both supporting and growing our dividend over time, and that is not at risk. Secondly, yes, we always look at the assets that we have across our platform and understand what's the best way to capitalize on those assets and some of that may be monetizing some of that, some of that may be operating them more effectively. So everything is on the table from that perspective.

Thank you, David. And although your answer was very complete, I would just reiterate something that you said because it seems like that some people they want to hear it again. The dividend is a separate car for us. Dividend, it is secure and we will continue our policy on dividend as we had promised repeatedly and we don't have to monetize things to be able to value. The reason why we are looking at all our assets is because we want to maximize return on the capital. And of course, we will see opportunities and when it makes sense, like the ones that we described, there is a serious now issue with sterile capacity that people are looking to apply. We will look for everything, but it's not that we are looking right now on this or that because we need to support the dividend or we need to support the de-levering opportunities or need to support the investments in the business, right? We can do that without doing any of that. Thank you very much. Let's go to the next question.

Yeah. Let's go to Chris to understand the commercial impact on Seagen and how that will take time.

Thank you very much. So as you know, we did a number of months planning prior to close to ensure we had a seamless integration and we completed cross-training of our commercial field force teams in January and especially for breast scans between TUKYSA and Ibrance, but also for hematology between ADCETRIS and RHDO [Phonetic]. And we should start seeing that further playing out now over the coming months. As we've mentioned, we're obviously very pleased that and there's been tremendous colleague retention. So we haven't had an issue with colleague retention, both from the legacy Pfizer and the legacy Seagen organization as we build the new business. And we expect that to continue to do well. There is significant enthusiasm from healthcare providers, from patients, from patient advocacy groups because of the groundbreaking data, double the overall survival. So we'll -- we are confident that we'll continue to see Padcev growth. We've also seen TUKYSA, for instance, 21% year-over-year pro-forma basis growth. And in fact, last quarter was the highest performance of TUKYSA. And so overall, great confidence and we started the first new Phase-3 study with an NME from the Seagen portfolio with [Indecipherable] and we hope to update you on other Phase 3 studies from their portfolio -- from the legacy Seagen portfolio.

And so from my perspective, of course, we have invested so much into this business and we think this is an area that we can make a huge difference to the world. I'm monitoring that very closely. I'm very impressed actually, I would say, nicely surprised on the positive side, how well both on the Pfizer impact of day 1 plus 1 equals 3 rather than 2, but already we have started seeing it both in the recept [Phonetic] organization because we are putting now a lot of Phase 3 on starts and you don't see, but I have high visibility on what's going on in earlier stages where we put a lot of starts in the clinic. And then also on the commercial that you can see now a stabilization of Ibrance on the Pfizer side and then high growth of the Seagen assets despite the fact that as I said, you should expect a decline in the first six months. When you have an integration, always you have a decline. I haven't seen a single integration that we have done that we didn't face challenges because people are changing territories, people are changing, let's say, jobs, marketers are moving around. All of that creates, let's say, a disruption here. We have the opposite. We have a very, very strong growth on both sides. So I'm really, really pleased. Now, of course, cautiously optimistic will take time to see the full benefit. But certainly, under Chris leadership and he has formed a terrific team, we are off to a very good start. Now, Dave, why don't you take us on the next question?

So as it relates to your question regarding capital allocation, clearly, our first priority, number 1 priority is supporting both the dividend as well as delevering our balance sheet. So that is job one from my perspective. As it relates to bolt-on acquisitions, in the near-term, you would not expect us to do much there. We are -- that is a lower priority in the near term until we get ourselves. Hope that helps.

Thank you. Next question, please.

Thank you very much, Chris?

Yes, thank you very much for the question. Just a reminder to point out with Ibrance that over 773,000 patients have now been treated globally with Ibrance. So it is currently still the CDK4 leader. We're very excited about two programs, vepdegestran which we believe could be best-in-class next-generation estrogen receptor degrader and also aitrmociclib, next-generation CDK4 specific inhibitor. For vepdegestran, as you point out, we'll get the data later this year for VERITAC-2, but we are planning additional studies at risk. So you can expect to see first-line studies, both a first-line study with aitrmociclib and standard-of-care endocrine therapy as well as aitrmociclib plus vepdegestran. And for aitrmociclib, you -- and as you've seen in a heavily pre-treated population, we've seen an overall response rate of 32% with median progressive survival of 8.1 months. We therefore highly encourage and I'm definitely very encouraged by the safety profile and we see more continuous dosing, very good compliance and more complete coverage of CDK4. That's why we're confident to accelerate CDK4 into a registration strategy. And the first study is already started, as you know, the second-line study.

Thank you, Chris. Next question, please.

Thank you. Aamir, do you have any comments on that?

Sure. So Carter, I think you heard us describe the dynamics and later this year, we will have more clarity on what that means. And so we can certainly share that. I think there's also a specific question that comes up often about Eliquis. So let me just address that now because we are clearly in a live negotiation on that. BMS, our alliance partner is leading that process. You've heard them describe and we also describe that there will be transparency around the outcome of that for impact in '26 in the September timeframe. And so at that point, we'll be in a position to share more.

Yes. And I guess as it relates to 2025 and the impact of the IRA from a margin expansion perspective, I would say without giving any specifics on that is, as we look forward, we obviously run multiple scenarios around how our business might perform. And in those scenarios, we would model different impacts to the IRA because it's still unclear because there's still a lot of moving parts, specifically as we just spoke about. Under those scenarios, we will work hard to offset any implication we might have through improving our cost structure.

And I want on the -- also said something that clearly in 2025, we will have two events are happening, which are -- we will have to contribute to as pharmaceutical industry, so that will put pressure on the pricing, let's say. But also because of the significant pains in the out-of-pocket dynamics and which I hope that will be implemented as the law says immediately because I'm hearing efforts to try to play with that. But if that is the case, which we are certain because that's the law, we will see significant more update, right, for everyone, not for us, of course, for everyone because there is huge number of abandonment that is happening at the pharmacy level and when people are asked to pay this very-high out of focus, particularly the first one quarter and maybe two when they need to exhaust their, let's say, the co-pays or the deductible. So that I think, dynamic, you know that the industry always asked that we contribute to the out-of-pocket payments as long as the patients are paying less because there is a significant benefit for all for the healthcare system, for the patients, for us. And so I'm not that concerned about that for the industry as a whole. I'm very concerned for the industry as a whole with the mandatory cost reductions, there is no negotiation there. They are just cutting prices that are occurring for biologics and for more molecules particularly. And one good thing for us, it is first of all that we have good exposure on vaccines that they are not part of that actually they are benefiting from the IRA because there is no co-sharing. So we can see that in the volumes again. And but on the small molecules where we do have exposure, I would say that we were lucky only one-product was selected for '26, we could have three or four and only one was selected. And so, as Aamir said, we will wait to see. We know of course, but we can't discuss in the middle of negotiations about anything that is happening. And so we'll see the impact of whatever that is in 2026. Then if next year, they bring some of the other products that they could be included and they were not in this year and that will be the IRAs of the world, that will be the [Indecipherable], those are products that anyway they are approaching their LOE. So even if they come into the IRA, the NPV risk that we have in place is not that big because really it will cut the price for something that will not be for very lengthy period of time, but will be for smaller than others period of time. This doesn't mean that this is not very bad for the industry and for innovation and clearly opposing and we will try whatever we can to defend it. Let's go to the next question because we are running out of line.

Great. So yes, I think we just gave some color around gross margin being closer to 70% versus closer to 80% when we entered 2024. We are maintaining that color at this point in time. I would say that it's unlikely for our gross margin rate to fall below 70% in any given quarter. But I want to just emphasize the gross margin rate will fluctuate a bit, primarily given the mix of sales, specifically within the vaccine portfolio, which carries a lower gross margin, number one. Number two, when you look at our performance for gross margin in Q1, the dominant -- a dominant effect of that versus last year is the mix, the lower sales volume of Comirnaty in the quarter in Q1 versus last year's Q1. Obviously, the final adjustment of the Paxlovid reserve actually did also have a one-time positive impact on the gross margin rate in Q1, but that was less of an impact compared to the mix. So I hope that helps.

And also, I want to emphasize that on Paxlovid, what really makes me pleased is the underlying demand of the product, right? So it was approached approximately in the first quarter only in the U.S. 2 million scripts, right? So that's significant. And keep in mind that this was the quarter that we moved from a previous way of go-to-market approach to a commercial model, right? But I had a lot of miles in execution, but we didn't step into any of that. So it was -- again, I'm very pleased how Aamir and the U.S. team executed on that, meticulous execution. So we had a very smooth transition with very low operation on commercial plants for the vast majority of the insured lives. And then at the same time, very good execution with thousands of pharmacists participating, almost 90,000 pharmacies, if I remember, well, 90%, excuse me, of the pharmacists participating into the Medicare part. And that went extremely well. And also I want to remind that the Medicare that goes clearly with different price level because it is through the credit of the U.S. government compared to the commercial plants that they are at 1,000. It's a different list price. And that difference exists for this year on. Next year, everybody moves to the list price and of course, the discounts that we give plant by plant. Let's over the next question, please.

Okay. Chris, thanks for the question. So on Prevnar, you alluded to the commentary we provided around dimensionalizing the market. And I think it's worthwhile just reiterating that. So the adult market continues to contract and that's for two reasons. There are increasingly fewer eligible 65-plus adults. And then the 19 to 64 underlying medical conditions population is obviously more difficult to activate. So that is a dynamic that is true for our business, but it's also true for any competitor that's going to come into the adult vaccine market. So I think that's important to note. Now for our overall franchise, we continue to expect growth. We did very nicely in Q1. We saw 6% growth. And the big driver of that is increased uptakes as well as market share growth in the pediatrics segment. So pediatrics in Q1, we saw a lot of conversion PCV 13 to 20 and our share exiting Q1 was at 80% and that was from 71% at the time of launch of PCV 15. So we see good momentum on pediatrics. Now back to your question about the adult segment and competition. We're continuing to see very good performance where we are. We have 98% market share. We acknowledge that B116 is coming. And as Albert alluded to earlier, we're not going to speculate on what the regulatory outcomes or recommendations are going to be. But there are a number of things that we can do to defend our business in the adult segment. Firstly, we have a portfolio approach to contracting that we're deploying in the retail setting, but also in the non-retail setting. And it's also important to note that in the non-retail setting, many organized customers have a preference for workflow management to stock one vaccine that satisfies all the current case of recommendations. So until we know more, I think the best way to defend our share in the adult segment is to continue to do what we're doing and that's to be laser focused on maximizing the opportunity that we have in the adult segment, albeit contracting and then continue to drive growth in pediatrics.

On your second question around consumers. Look, engaging and activating consumers is, as you pointed out, a very, very important part of our business. It's true in vaccines, it's true in categories like Paxlovid and Nurtec, just to name a few examples. And we are always looking at ways to enhance that connection. One example I'll point to is the work that we've done on VaxAssist as a mechanism to help consumers determine their vaccine eligibility, but also book appointments. And that's a really good example of value that we can bring. And to the extent that we can do more of that, create value for patients as well as for our business in other categories, we'll certainly look to explore that.

Alexandre, very quickly, anything on PCV in international markets?

Yeah. We had a great quarter. As you know, we grew by 8% operationally. But more importantly, we also have achieved some key milestones. So we got the European approval of pediatric PREVENAR 20 in Europe. We also got it approved in Japan, a very important market and Australia and many others. So this is great because then we want to build on the very successful PREVENAR 30 franchise around the world. As you know, we have exclusive NIP status in 130 market and now we're going to be able to build on that. Just one comment on the adults. We still are in the process of getting PCV recommendation in most of the European market, but where we got it in Germany and in France, we see very nice pickup. And why? Because they extended the population covered by the PREVENAR 20. For instance, in Germany, sickle [Phonetic] gave us 18 to 59 population at risk and all comers 60 and above. And since that and we got this recommendation in February, we get very nice pickup and utilization in Germany, and we are about to launch in France as we speak. So in adults, all as well, we see a great potential approach.

It's very nice cadence of approval and a very nice cadence of recommendations. Next question, please.

Yeah, thank you for the question. I would say that without giving -- since we don't guide to quarterly expectations for gross margin, I would just say that the focus that we have around improving our cost of goods sold is a multi-year journey. And these costs that we are working to improve take time to adjust and to further implement ways to be more effective and efficient in this infrastructure. So I wouldn't think of that having a significant impact on 2024, but more -- if it would, it would be late 2024, but more '25 and '26. So -- but more to come as we know more and as we develop our plans more specifically, we'll be certain to share some specifics around that.

Thank you. Next question, please.

Aamir?

Thanks, Chris. So on Abrysvo, as I said, we're -- we're progressing our contracting conversations. So we'll have more to share on that as we do later. And in terms of your question on Vynda, Vynda had a really strong quarter. We were up 96% year-over-year, but importantly also 41% over last quarter. When you look at the drivers, I think there's a few things. Some of that is temporal. So there were some purchasing patterns with wholesaler and specialty pharmacies. And then we also made a lot of efforts towards the end of last year to ensure that the re-enrollment process for patients was very smooth at the beginning of this year. So all of that leads to a little bit of a Q1 bolus. But importantly, at the heart of it, part of our strong performance on Vynda is that the fundamentals around diagnosis and demand are really strong. So we saw a 33% quarter-over-quarter increase in new patient starts. And diagnosis rates over the last several years, we had talked about getting into the 30% to 50% range. We're approaching the top end of that. And there is still significant opportunity to identify more patients. That's the biggest unmet need and that's where we're concentrating our commercial efforts going forward. So we do think that we will sustain this momentum, probably not at the same rate that we saw in Q1, but we will continue to perform well with Vynda.

Thank you. Alexandre, anything to add?

Yeah, very quickly on the international front, we also had a very strong quarter because we saw a 28% operational growth, but a 43% volume growth, which is comparable to what we see in the U.S. exactly as Aamir said, there is still opportunity because we basically have established Vyndaqel as the standard-of-care and we've worked with the healthcare professional to establish robust infrastructure so that we can screen, diagnose and treat faster. And the reality is we still have opportunity to grow because, yes, in markets like France, we are approaching 50%, but in other like Italy, we are around 30%, Japan 28%. So there is still opportunity to grow and increase diagnosis rates.

Thank you very much. Next question. We'll take two more questions because we are running out of time. So next question, please.

Yes.

Thank you, sir. Mike? Excited us all.

Yeah, yeah. I am excited about the potential approval for marstacimab for both hemophilia A and B to continue to grow our hematology franchise momentum. DMD gene therapy, we actually today got the equivalent of breakthrough designation RMAT based on the early clinical data available. So we are super excited about that. And relatively near term, the readout is coming. COVID flu combination vaccine, 18 to 59 readout, Phase 3 and then one need pipeline, ponsegromab cachexia which I think pending readout has really a breakthrough mechanism.

First one to ask. Anything from your side, Chris?

And perhaps just to mention again the potential unprecedented new 5-year data for Lorbrena, which will be presented oral at ASCO, we could define the growth of Lorbrena over the next decade. There's two other upcoming readout--

Must be good if you are talking to that.

And there's two other and readouts that's important to us. The one is BREAKWATER, which is the first-line opportunity in BRAF positive colorectal cancer. Reminder that that's up to 12% of colorectal cancer, particularly poor prognosis. So we're looking forward to that readout, BREAKWATER. And then also, as mentioned earlier VERITAC-2 in second-line ER-positive breast cancer, which can define also help to define the future path for--

Thank you very much. And the last question, please.

Yes. On the obesity Michael also can comment, of course, together with the mRNA through vaccine. But I said multiple times that first of all, metabolic is an area to have traditionally very big strength in terms of result and this is an area that we have the right to win. So we are strong and we keep investing in the whole area because we have the infrastructure. And obesity is a very big part of it, given the magnitude of the market. So we will be very active in the obesity with current mechanism of actions and new mechanism of actions. We said repeatedly that we had three agents right now in the clinic and we have multiple that they are preclinical and that we are progressing. But we don't have anything to say per se right now because we are waiting some other data and for the other ones, it's too early to speak about them. So that's why we are not commenting much of that. And we will, let's say, continue being very active in the obesity space, one way or another. Now what about the mRNA flu vaccine? And anything you want to add also to the obesity, Michael?

I think you said it so well on obesity. I'll focus on mRNA vaccine and just say that you know, we did share that we had a very robust table data for 18 to 59 in the outcome event trial on the first generation of flu mRNA platform. We actually further refined that product in order to expand activity against these serotypes, although the disease is dominated by a -- we saw an opportunity to do that. And that technology is now with the COVID flu combo vaccine running for 18 to 59 years-old and relatively soon we'll have a readout. We think that's really the near-term opportunity to bring both of the variant -- viruses under one simple administration approach. For the 65 plus, what you referred to was an early trial with the first generation. We have now moved focus to the second generation and are in preparation of a subsequent clinical studies on that.

Thank you, Michael. So thank you, operator, and thank you everyone for your interest. That was a very good call. In summary, we are very pleased with the solid start in 2024. We are cautiously optimistic about the year ahead. And with our continued progress in executing our five priorities, we are confident that we will continue to deliver for our patients, shareholders and our company. Thank you again for your interest in Pfizer and we hope you have a wonderful week. Thank you.