Christopher Schott

Christopher Schott asked about the attractiveness of Teva's IL-15 asset (TEV-48574) and whether this investment, being earlier stage than historical deals, indicates a new trend for Royalty Pharma. He also requested more details on VORANIGO's launch trajectory, growth outlook, and its potential as a large asset for Royalty Pharma over time.

Answer

Marshall Urist, EVP and Head of Research and Investments, explained that Teva's IL-15 asset was attractive due to the unmet need in vitiligo, the strong science behind the IL-15 target, and its blockbuster potential. He clarified that the structure, tranches of capital over time, is consistent with their approach to access innovation without changing the portfolio's risk profile. For VORANIGO, he expressed thrill with its strong launch and Servier's performance, reiterating its significant commercial potential and trajectory towards being a blockbuster product.

Christopher Schott asked about the attractiveness of Teva's IL-15 asset (TEV-48574) and whether this indicates a trend towards earlier-stage asset investments, and for an update on Voranigo's launch trajectory, growth outlook, and long-term potential.

Answer

Marshall Urist, EVP, Head of Research and Investments, explained that Teva's IL-15 asset was attractive due to the unmet need in vitiligo, strong science, and blockbuster potential, noting that the deal structure allows for tranches of capital over time, consistent with their flexible approach rather than a shift to earlier-stage risk. He also expressed thrill with Voranigo's strong launch and continued excitement for its potential as a blockbuster product serving a profound unmet need.

Chris Schott of JPMorgan Chase & Co. inquired about Royalty Pharma's capacity to execute more large-scale, flexible funding deals similar to the Revolution Medicines transaction and its strategy for capitalizing on biopharma innovation emerging from China.

Answer

CEO Pablo Legorreta confirmed the company has the capacity and is in active discussions for more groundbreaking deals like the RevMed one, viewing it as a new paradigm, not a one-off. Head of Research & Investments Marshall Urist stated that the company is actively focused on China, developing relationships and seeing it as a significant new source for royalty creation and direct investment.

Christopher Schott asked about the returns on synthetic royalties compared to traditional structures and whether their growth is expanding the total addressable market or also yielding higher returns. He also requested an update on the timing of the Vertex arbitration process for the Alyftrek royalty.

Answer

EVP and Vice Chairman Christopher Hite stated that synthetic royalties represent a significant growth opportunity and that the company is pleased with the return profile achieved on these transactions, which offer partners operational control. EVP and CFO Terrance Coyne reiterated the company's confidence in its position regarding the Vertex royalty but could not provide a specific timeline for the arbitration, noting only that such processes are typically not prolonged.

Chris Schott sought more details on the enterprise-wide strategic review, specifically regarding the quantum of expected expense reduction and whether reinvestment would constitute a majority or minority of those savings. He also asked if Viatris's 2026 capital deployment strategy would resemble 2025, leaning more towards capital return, or align with the targeted 50/50 balance over time.

Answer

CEO Scott Smith stated that the exact quantum of savings from the enterprise-wide review would be disclosed in Q1 2026, emphasizing that the project is significant and expected to deliver meaningful cost savings over a multi-year period. He clarified that reinvestment would likely be a minority of the savings. Regarding 2026 capital allocation, Scott Smith reiterated a balanced approach over a longer 3-5 year period, noting that yearly allocation depends on market opportunities and stock performance, aiming to both return capital and build growth assets.

Chris Schott sought more color on the enterprise-wide strategic review, specifically the quantum of expense reduction and whether reinvestment would be a majority or minority of savings. He also asked if 2026 capital deployment would resemble 2025 (more capital return) or align with the long-term 50/50 balance.

Answer

CEO Scott Smith declined to provide a specific quantum of savings, stating details, including phasing and reinvestment magnitude, would be shared in Q1 2026 after thorough analysis. He clarified that reinvestment is not expected to be the majority of savings. For 2026 capital allocation, Scott Smith reiterated a long-term balanced approach, with the yearly mix depending on market conditions and opportunities.

Christopher Schott from JPMorgan Chase & Co. inquired about the peak sales potential for meloxicam, the infrastructure required for its launch, and the company's ability to mitigate the impact of potential U.S. tariffs on products manufactured abroad.

Answer

CEO Scott Smith detailed tariff mitigation strategies, including increasing U.S. production, adjusting inventory, and leveraging third parties, while acknowledging a potential financial impact. Chief Commercial Officer Corinne Le Goff and Chief R&D Officer Philippe Martin highlighted meloxicam's strong clinical data and large addressable market in acute pain, positioning it as a key non-opioid alternative.

Christopher Schott from JPMorgan Chase & Co. asked for elaboration on the scope, size, and timing of the newly announced enterprise-wide review and requested a breakdown of the year-over-year gross margin decline, specifically how much is attributable to the Indore facility issues versus other factors.

Answer

CEO Scott Smith described the enterprise review as a timely initiative to make the company 'fit for purpose' after its merger and recent divestitures, with benefits expected to be more fully realized in 2026. CFO Theodora Mistras clarified that the Indore impact is the largest component of the gross margin decline, having a margin impact of nearly 80%, with the remainder due to normal price erosion and supply costs, partially offset by segment mix.

Speaking on behalf of Chris Schott from JPMorgan Chase & Co., an analyst asked if the recent Idorsia and SGLT2 transactions are representative of the size and scale for future deals. They also requested initial commentary on the outlook for 2025 EBITDA.

Answer

CEO Scott Smith explained that the Idorsia deal was a unique opportunity and that future business development will focus on disciplined acquisitions of end-market or near-market assets of a similar size. CFO Theodora Mistras noted that while 2025 guidance is not yet available, Viatris expects top-line momentum to continue and is prioritizing adjusted EBITDA stability while balancing investments for future growth.

Chris Schott asked for Amgen's latest perspective on the obesity market and the company's role within it, considering MariTide and the broader pipeline, in light of recent industry updates like Metsera headlines and discussions on lower Medicare pricing for obesity drugs.

Answer

Robert Bradway, CEO, expressed strong enthusiasm for Amgen's differentiated approach in the obesity market. James Bradner, EVP of Research and Development, highlighted obesity as a major public health crisis with an underpenetrated market, emphasizing MariTide's differentiated profile for chronic therapy and mentioning a broader pipeline including AMG 513 and preclinical programs for novel incretin and non-incretin targets. Murdo Gordon, EVP of Global Commercial Operations, reinforced MariTide's unique differentiation, particularly its potential for monthly or less frequent dosing, aiming to deliver both weight reduction and medical benefits.

Chris Schott from JPMorgan Chase & Co. asked for Amgen's updated perspective on the evolving obesity market, including recent headlines and discussions on Medicare pricing, and the company's role with MariTide and its broader pipeline.

Answer

Robert Bradway, CEO, expressed continued enthusiasm for Amgen's differentiated approach in the obesity market. James Bradner, EVP of Research and Development, highlighted obesity as a major public health crisis requiring differentiated assets beyond weekly injectables, and detailed Amgen's pipeline including AMG 513 and preclinical programs. Murdo Gordon, EVP of Global Commercial Operations, reinforced MariTide's differentiation with its monthly or less frequent dosing and focus on medical benefits beyond weight loss.

Chris Schott asked about the Repatha primary prevention study, seeking to understand what would constitute a clinically meaningful result and how significant a growth driver a positive outcome would be for the franchise.

Answer

James Bradner, EVP of R&D, noted the field is well-calibrated on meaningful outcomes. Murdo Gordon, EVP of Global Commercial Operations, added that with 40% of new prescriptions already in primary prevention, a positive trial would further reinforce guidelines, remove payer barriers, and drive penetration.

Christopher Schott from JPMorgan Chase & Co. asked for Amgen's perspective on the incretin payer environment, citing recent market concerns about potentially more aggressive payer behavior following a CVS formulary announcement.

Answer

Murdo Gordon, EVP of Global Commercial Operations, affirmed that Amgen's goal is to ensure broad product availability. While acknowledging the recent CVS decision, he expressed an overall belief that both PBMs and manufacturers are working to expand patient access to obesity medications, a market Amgen plans to enter.

Christopher Schott asked for an outlook on TEPEZZA's growth in the U.S. and internationally, particularly regarding the opportunity in Japan and whether the rapid U.S. launch could be replicated.

Answer

Murdo Gordon, EVP of Global Commercial Operations, outlined a significant opportunity in Japan with roughly 25,000 patients and expects good uptake, though likely a steadier ramp than the U.S. 'bolus' effect. He confirmed launches are planned in seven additional countries and that U.S. efforts are focused on broadening the prescriber base. He also guided to typical Q1 sales seasonality.

Christopher Schott asked about the commercial positioning of TEZSPIRE in COPD, considering potential competitors like DUPIXENT and IL-33 inhibitors might enter the market sooner.

Answer

EVP of R&D James Bradner highlighted the compelling Phase II data in a broad patient population. EVP of Global Commercial Operations Murdo Gordon added that TEZSPIRE's differentiated profile and unique mechanism have driven success in asthma, and he is hopeful this will translate to COPD. He noted the Amgen-AstraZeneca partnership provides a strong competitive share of voice.

Chris Schott asked two questions regarding the MFN agreement: its broader impact on new international launches (higher prices, tougher reimbursement, or neutral) and more quantitative details on the MFN's dilutive impact for 2026.

Answer

Albert Bourla, Chairman and CEO, Pfizer, stated that detailed 2026 guidance, including the MFN impact, would be provided at year-end. He commented that the current price differential in international markets is unsustainable, expressing hope for changes in pricing approaches. He also noted that if decent pricing cannot be agreed upon, Pfizer might not seek reimbursement in those countries or would price products to avoid affecting U.S. prices.

Chris Schott asked about the broader implications of the MFN agreement for international revenues and new launches, questioning if it would lead to higher prices, tougher reimbursement hurdles, or a neutral outcome. He also requested more quantitative color on the MFN impact for 2026.

Answer

Albert Bourla, Chairman and CEO, stated that the price differential is not sustainable and expressed hope that affected international countries would change their pricing approach, potentially aided by U.S. government trade negotiations. He indicated that if decent pricing is not agreed upon, Pfizer would not seek reimbursement there and would price products to avoid affecting U.S. prices. He noted that Dave Denton would provide full 2026 guidance, including MFN impact, at year-end.

Chris Schott from JPMorgan Chase & Co. asked about the rationale for lowering the company's target leverage, the business development approach for its remaining capacity, and the development timeline for the new PD-1/VEGF bispecific antibody.

Answer

CFO Dave Denton explained the leverage target was lowered to 2.7x from 3.25x due to faster-than-expected cash generation, and that BD would likely focus on smaller deals given the ~$13B capacity. Chief Scientific Officer Chris Boshoff added that development of the new bispecific antibody (SSGG-707) with existing ADCs will begin this year, without waiting for Phase 3 readouts.

Chris Schott of JPMorgan Chase & Co. asked about the rationale for lowering the company's target leverage, the business development approach regarding deal size, and the development timeline for combining the new PD-1/VEGF asset with existing ADCs.

Answer

EVP & CFO Dave Denton explained the leverage target was lowered to 2.7x from 3.25x due to faster-than-anticipated cash generation, and noted smaller deals are more likely given the current ~$13 billion capacity. Chief Scientific Officer Chris Boshoff stated that Pfizer will not wait for Phase 3 ADC readouts and will begin Phase 1/2 combination trials with the new asset, SSGG-707, this year.

Christopher Schott asked for an update on the full-year gross margin outlook and questioned the level of conservatism in the 2025 guidance given the strong Q1 performance.

Answer

CFO Dave Denton expressed confidence in the 2025 outlook, stating that while the guidance range is maintained, the company is 'trending toward the upper end' of its adjusted diluted EPS guidance. He noted that Q1 performance exceeded internal expectations, effectively de-risking the remainder of the year, and reiterated a focus on improving operating margins over time.

Christopher Schott inquired about the potential size of future business development transactions and how Pfizer balances BD with share repurchases. He also asked about the growth potential of the RSV market in the U.S. and globally.

Answer

CFO Dave Denton stated that Pfizer has the capacity for business development in the '$10 billion to $15 billion' range in 2025. Executives Aamir Malik and Alexandre de Germay discussed the RSV vaccine ABRYSVO, noting that while the U.S. market decreased, Pfizer gained share, and significant growth opportunities exist internationally and through potential future label expansions.

Christopher Schott asked if a mid-to-high 30% adjusted operating margin is still a valid target and about the growth outlook for the VYNDAQEL franchise, given upcoming competition and the Part D redesign.

Answer

CFO David Denton confirmed the mid-to-high 30% operating margin remains the goal, though without a specific timeline. Regarding VYNDAQEL, executives acknowledged that while a significant undiagnosed patient population remains, U.S. volume growth will be at 'meaningfully lower levels' going forward due to new competitive entrants and other market headwinds, though international growth continues.

Chris Schott sought more details on the U.S. dermatology performance in Q3, specifically regarding the impact of Zenrelia or positioning ahead of a potential Merck launch. He also asked for an outlook on therapeutic visit recovery and what factors would drive it.

Answer

Wetteny Joseph, Chief Financial Officer, stated that competitive positioning in dermatology isn't significantly different from expectations, with limited patient share gains. He noted that Q4 guidance factors in a full launch of Numelvi in Europe, but Merck's U.S. approval timing is uncertain. He reiterated that the key difference is declining therapeutic visits for dermatology, impacting patient starts. Joseph assumed the macro environment continues into Q4 and will update guidance in February. Kristin Peck, Chief Executive Officer, added that Librela, with over 30 million doses distributed globally, is showing signs of sequential stabilization, giving confidence in its return to growth in 2026 due to multi-pronged strategy execution.

Chris Schott inquired about the long-term market potential for triple combination parasiticides, asking how large the category could become from its current 45% share in vet practices. He also asked for observations on the competitive impact from the newly launched Quattro product.

Answer

EVP & CFO Wetteny Joseph reiterated the company's expectation that the triple combination market will double by 2028, driven by new puppy starts and conversion from older therapies. He stated that the competitive impact from Quattro has been minimal, as new entrants help expand the overall category by raising awareness, which drives traffic to clinics where Zoetis has a strong, established position with Simparica Trio.

Christopher Schott asked about the company's expectations for Merck's entry into the dermatology market and the role of Apoquel Chewable in defending the franchise. He also inquired about any notable factors affecting the quarterly cadence of results for the rest of the year.

Answer

CFO Wetteny Joseph confirmed that guidance includes scenarios for new competitive entrants and their promotional activities, while reiterating long-term confidence. He noted Apoquel Chewable conversion is at 31% in the U.S. and 57% in Europe, with the original tablet's stickiness being stronger than anticipated, which is a positive signal.

Christopher Schott requested an update on Librela patient selection between severe and moderate cases and asked about the key growth drivers and headwinds for Simparica Trio in 2025.

Answer

CEO Kristin Peck explained that Librela use in the U.S. is expanding from severe to more moderate OA patients, mirroring the trend seen in Europe. For Simparica Trio, she highlighted the significant growth runway, noting that the triple combination market is still underpenetrated. She emphasized the product's 'stickiness' and the company's first-mover advantage as key factors for continued growth.

Christopher Schott of JPMorgan Chase & Co. asked about the anticipated impact of the competitor launch of Zynrelia on Apoquel's growth and for any early observations on U.S. Librela patient compliance.

Answer

CEO Kristin Peck expressed high confidence in Apoquel's ability to compete, citing its 11-year safety record, high satisfaction rates, and the large untreated market, suggesting limited impact from new entrants. CFO Wetteny Joseph noted that while it's early for U.S. Librela compliance data, the European experience shows high compliance and over 7 months on therapy as the product moves into moderate cases, indicating a positive trajectory for the U.S.

Chris Schott asked if the aging pet commentary suggests a sustained tailwind for positive clinical visit growth in 2026 and beyond, or if visit trends might remain bumpy in the near term. He also inquired about international business visit trends, specifically if they mirror the U.S. dynamic of clinical visits picking up while wellness remains under pressure, or if they are more balanced.

Answer

Jay Mazelsky, President and CEO, noted that non-wellness visits were essentially flat, with adult dogs (likely pandemic dogs, designer breeds, larger breeds) coming in for more non-wellness visits. He stated that while quarter-to-quarter sustainability remains to be seen, these aging pets will come in more for sick care, which is positive for clinical visit trends. Regarding international visits, Mazelsky stated less visibility due to fragmented PIMS systems but market research suggests stabilization from recent choppiness, indicating a stable environment for execution.

Chris Schott asked if the aging pet commentary suggests a sustained tailwind for the business, potentially leading to positive clinical visit growth in 2026 and beyond, or if near-term volatility is expected. He also inquired about international visit trends, specifically if they mirror the U.S. dynamics of picking up non-wellness visits while wellness remains pressured, or if they are more balanced.

Answer

Jay Mazelsky, President and CEO, stated that IDEXX has less visibility into international clinical visits but market research suggests a largely stabilized environment. Regarding aging pets, he noted that non-wellness visits were essentially flat, likely driven by pandemic dogs and larger breeds. He expressed confidence that as these pets age, they will increasingly require sick care, leading to positive long-term clinical visit trends, though quarter-to-quarter sustainability remains to be seen.

Chris Schott of JPMorgan Chase & Co. inquired about the initial uptake of the InVue Dx system, asking which types of veterinary practices show the most traction and why the full-year placement guidance implies a slower pace in the second half of 2025.

Answer

President and CEO Jay Mazelsky explained that customer feedback on InVue Dx is excellent, citing workflow benefits and result consistency. He noted that placements are a mix of new suites and additions for existing IDEXX customers. Mazelsky affirmed the updated 5,500 placement forecast is a reasonable assumption and that the upcoming FNA (fine needle aspirate) feature will continue to drive interest.

Chris Schott inquired about the adoption of the InVueDx system, asking which types of veterinary practices are showing the most traction and why the full-year placement guidance of 5,500 units implies a slower pace in the second half of the year compared to Q2.

Answer

President and CEO Jay Mazelsky explained that customer feedback on InVueDx has been excellent, driven by workflow improvements and consistent, accurate results for ear cytology and blood morphology. He stated the 5,500 placement forecast is a reasonable assumption, with demand coming from both new suite placements and existing IDEXX customers. Mazelsky noted that the upcoming FNA (fine needle aspirate) test will continue to drive interest and consumable usage.

Christopher Schott inquired about the expected trajectory for U.S. vet visits in 2025, asking about management's confidence in a recovery after a projected weak Q1. He also asked for expectations regarding growth differences between U.S. and ex-U.S. markets.

Answer

Incoming CFO Andrew Emerson stated that the 2025 guidance assumes a U.S. clinical visit decline of approximately 2%, similar to 2024, with no significant recovery built into the forecast. CEO Jay Mazelsky highlighted strong international performance, noting that Europe has seen seven consecutive quarters of double-digit growth, driven by sustained commercial investments and strong adoption of new innovations.

Chris Schott inquired about competitive dynamics in the IL-23 market, particularly with TREMFYA's sub-Q induction, and asked for an initial look at the 2026 outlook, highlighting any underappreciated aspects.

Answer

Jeff Stewart, Executive Vice President, Chief Commercial Officer, highlighted SKYRIZI's strong growth (46% operational) and leadership in IBD, noting the expanding IL-23 class. Roopal Thakkar, Executive Vice President, Research and Development, Chief Scientific Officer, mentioned SKYRIZI's upcoming sub-Q induction data next year. Rob Michael, Chairman and CEO, discussed strong 2025 performance across neuroscience and oncology, expecting continued growth in 2026 despite HUMIRA and IMBRUVICA headwinds, and noted underappreciated aspects like the immunology pipeline beyond SKYRIZI/RINVOQ and the neuroscience franchise.

Chris Schott inquired about the competitive dynamics in the IL-23 market, specifically between SKYRIZI and Tremfya, and asked for an initial perspective on the 2026 outlook, highlighting any potential miscalculations by the street.

Answer

EVP and CCO Jeff Stewart and EVP, Research and Development, and CSO Roopal Thakkar discussed SKYRIZI's strong growth and leadership in IBD, noting the rapid expansion of the IL-23 class. Chairman and CEO Rob Michael highlighted strong momentum across the portfolio, including neuroscience and oncology, which supports robust growth in 2026 despite Humira and IMBRUVICA headwinds.

Chris Schott of JPMorgan Chase & Co. asked for specifics on what is driving SKYRIZI's outperformance, particularly the split between IBD and dermatology, and questioned AbbVie's appetite for later-stage business development.

Answer

EVP & CCO Jeffrey Stewart confirmed SKYRIZI's momentum is broad-based, while CFO Scott Reents specified the $600M guidance increase was roughly $400M from IBD and $200M from psoriatic disease. CEO Robert Michael reiterated that the BD strategy remains focused on early-to-mid-stage assets to drive growth in the 2030s, as the current portfolio provides a clear growth path for the next eight years.

Christopher Schott of J.P. Morgan Chase & Co. asked about the specific indications driving the increased guidance for Skyrizi and Rinvoq, the competitive landscape with new IBD entrants, and the long-term revenue outlook for Humira.

Answer

CFO Scott Reents detailed the guidance increases, attributing Skyrizi's upside to psoriatic and IBD indications and Rinvoq's to broad performance. CCO Jeffrey Stewart addressed competition, expressing confidence in their portfolio's profile against new entrants by drawing parallels to the IL-23 class evolution in psoriasis. Stewart also commented on Humira, acknowledging faster erosion and expecting a further step-down in 2026, noting the tail's impact diminishes when it no longer creates a headwind to corporate growth.

Christopher Schott asked for the primary drivers behind the increased 2027 guidance for Skyrizi and Rinvoq and questioned the expected growth trajectory for these brands beyond 2027.

Answer

EVP & CCO Jeffrey Stewart identified stronger-than-expected market share capture as the primary driver for the guidance increase, particularly in IBD. EVP & CFO Scott Reents provided a breakdown of the new $31B target. CEO Robert Michael added that growth beyond 2027 will be supported by continued market growth, further share gains, and five new indications for Rinvoq, suggesting consensus estimates are below AbbVie's expectations.

Christopher Schott of JPMorgan Chase & Co. inquired about the 2025 outlook, questioning if the consensus for HUMIRA sales is reasonable given volume shifts to newer drugs and whether mid-single-digit top-line growth remains a valid target.

Answer

CEO Robert Michael confirmed confidence in achieving robust mid-single-digit growth in 2025, stating the shift from HUMIRA to SKYRIZI and RINVOQ is a net positive for the portfolio. CCO Jeffrey Stewart added that this dynamic accelerated in recent quarters, contributing to the overperformance of their next-generation immunology assets.

Chris Schott inquired about the Mounjaro International ramp, asking for more details on how new country launches are trending, growth expectations off the higher base, and if there was any meaningful stocking contributing to the recent sales increase.

Answer

Patrik Jonsson, President of Lilly International, highlighted strong international performance, with 75% of revenue from out-of-pocket payments. He confirmed initial stocking in Q2 launches (China, Brazil, Mexico, India) and continued strong Q3 performance. He noted future opportunities in type 2 diabetes reimbursement (currently 8 markets) and patient activation for obesity in 2026, acknowledging varied international market dynamics.

Chris Schott asked for more details on Mounjaro's international sales ramp, including how new country launches are performing against expectations, the sustainability of growth from the current higher base, and any significant stocking effects.

Answer

Patrik Jonsson, President of Lilly International, reported strong international performance, with 75% of revenue from out-of-pocket payments. He acknowledged initial stocking in Q2 launches (China, Brazil, Mexico, India) but noted continued strong Q3 performance and future opportunities in type 2 diabetes reimbursement and patient activation.

Chris Schott of JPMorgan Chase & Co. asked for context on the orforglipron weight loss data, which appears efficacious but potentially below some injectable competitors, and its expected position in the treatment landscape.

Answer

Kenneth Custer, EVP & President of Lilly Cardiometabolic Health, highlighted the convenience of a once-daily oral pill achieving 27 pounds of weight loss with positive effects on key biomarkers like blood pressure and lipids. He emphasized its potential across various indications, including as a maintenance therapy, and its manufacturability at scale, suggesting a broad opportunity for the drug.

Christopher Schott asked for more elaboration on the role orforglipron is expected to play in the core obesity and diabetes markets relative to injectables, and what market share orals might capture over time.

Answer

Patrik Jonsson, President of Cardiometabolic Health and Lilly USA, highlighted the significant opportunity, noting that about 50% of type 2 diabetes patients prefer an oral option. He positioned orforglipron as a potential first-line incretin for both diabetes and weight management, with the added benefit of scalable manufacturing for global reach. CEO David Ricks added that orals could serve new segments, such as maintenance therapy and individuals with overweight but not obesity.

Christopher Schott from JPMorgan Chase & Co. questioned what gives Lilly confidence to run a wide range of Phase III programs for Orforglipron before seeing initial readouts, especially regarding tolerability.

Answer

Executive Daniel Skovronsky explained that confidence in the drug's overall safety profile grows as the large-scale trials proceed uninterrupted. While they lack unblinded data on tolerability, the continuation of the studies is a positive signal.

Christopher Schott of JPMorgan Chase & Co. asked for a bridge from Q3 sales to the substantial implied Q4 revenue growth, seeking details on new demand generation efforts and their expected impact timeline.

Answer

Patrik Jonsson, President of Lilly Cardiometabolic Health and Lilly USA, explained that after a prudent Q3, the company is now accelerating DTC and HCP promotional efforts for Mounjaro and Zepbound as supply has improved. CFO Lucas Montarce added that normalizing for channel inventory dynamics reveals consistent underlying growth, with new international Mounjaro launches also set to contribute to the Q4 ramp.

Chris Schott asked for updates on the ADEPT program, specifically regarding any actions taken following Q2 clinical site reviews, and inquired about the relative confidence in ADEPT 1 and 4 studies compared to ADEPT 2, considering differences in study designs and the broader indication outlook.

Answer

Chris Boerner, Board Chair and CEO, reiterated that ADEPT 2 results are expected by year-end and emphasized strong confidence in the Cabenfi development program, citing compelling external data, positive real-world feedback from schizophrenia patients, and internal data. Cristian Massacesi, Chief Medical Officer and Head of Global Drug Development, confirmed the rapid pace of the Cabenfi development program, including 14 ongoing or activating studies (10 pivotal), and clarified that ADEPT 4 is similar to ADEPT 2, while ADEPT 1 uses a relapse prevention design.

Chris Schott asked for updates on the ADEPT program, including any actions taken following Q2 clinical site reviews. He also inquired about the relative confidence in ADEPT 1 and 4 studies compared to ADEPT 2, considering differences in study designs, and the broader outlook for the indication.

Answer

CEO Chris Boerner reiterated that ADEPT 2 results are expected by year-end and expressed strong confidence in the Cabenfi development program, citing compelling external data and positive real-world feedback from schizophrenia patients. CMO Christian Massacesi added that the COBENFY development program is progressing rapidly with 14 ongoing or activating studies, 10 of which are pivotal, and clarified that ADEPT 4 is similar to ADEPT 2, while ADEPT 1 uses a relapse prevention design.

Chris Schott of JPMorgan Chase & Co. asked a two-part question on COBENFI: what are the main hurdles to physician adoption, and what magnitude of benefit is needed in the upcoming Alzheimer's psychosis trial to drive adoption and support a filing?

Answer

EVP & Chief Commercialization Officer Adam Lenkowsky stated that while the launch is performing to expectations, the main hurdle is changing decades of entrenched prescribing behavior. EVP & Chief Medical Officer Samit Hirawat clarified that for a regulatory filing in Alzheimer's psychosis, two of their three ongoing pivotal trials would need to be positive.

Christopher Schott inquired about Bristol Myers Squibb's ability to navigate potential U.S. tariffs given its manufacturing footprint, and how the recent negative trial results for Cobenfy in an adjunctive setting affect its overall outlook.

Answer

An executive, likely CEO Christopher Boerner, stated that while tariff specifics are unknown, BMS is a significantly U.S.-based company and has already factored existing China-related tariffs into its guidance. Chief Commercialization Officer Adam Lenkowsky added that the Cobenfy results have no meaningful impact on sales, as the primary opportunity is in monotherapy, where uptake remains strong.

Christopher Schott of JPMorgan Chase & Co. inquired about the expected sales ramp for Cobenfy in 2025 and whether the current cost-saving initiatives represent the final step in rightsizing the company ahead of the 2028 loss of exclusivity cycle.

Answer

Chief Commercialization Officer Adam Lenkowsky described a strong launch for Cobenfy, with significant progress on market access, but noted that changing entrenched physician habits will take time, leading to continued strong uptake through 2025. CEO Christopher Boerner explained that the cost program is designed to create financial flexibility for growth investments now, and that the company will always align its organizational size and spending with the needs of the business.

Christopher Schott posed a two-part question on Cobenfi, asking about the potential for a faster-than-typical sales ramp given its unique mechanism and the company's confidence in the bipolar 1 indication.

Answer

Chief Commercialization Officer Adam Lenkowsky noted there is no perfect analog for the launch but expects a second-half 2025 ramp as access builds over 12 months. Head of Global Drug Development Samit Hirawat expressed high confidence in the bipolar mania opportunity, citing preclinical data and the planned start of a trial in mid-2025.

Chris Schott inquired about the launch progression of linvoseltamab versus expectations, and the timelines for getting the product into earlier lines of therapy, including possibilities for accelerating the process with the FDA.

Answer

EVP of Commercial Marion McCourt reported positive early launch indicators for Lynozyfic in the fifth-line multiple myeloma setting. President and CSO George Yancopoulos highlighted Lynozyfic's potential for impressive benefits in late-line patients, suggesting even greater benefit in earlier stages, detailing aggressive programs in early-stage, second-line, and premalignant settings with stunning and unprecedented data. President and CEO Leonard Schleifer emphasized Regeneron's commitment to 10 registration trials for Lynozyfic across various myeloma stages and the potential to outperform Darzalex in a $30 billion market, mentioning discussions with the FDA to accelerate the program.

Chris Schott from JPMorgan Chase & Co. asked about the progress of the Linezyctamab launch, timelines for its use in earlier lines of therapy, and the potential to accelerate its development with the FDA.

Answer

Executive Vice President of Commercial, Marion McCourt, reported positive early launch indicators for Linezyct in the fifth-line multiple myeloma setting, including favorable physician feedback and payer coverage. President and CSO, George Yancopoulos, highlighted Linezyct's potential for impressive benefit in late-line patients, suggesting superior outcomes in earlier stages. He detailed aggressive programs in first-line, second-line, and premalignant settings, showing stunning and unprecedented data, including molecular complete responses. President and CEO, Leonard Schleifer, emphasized that not all bispecifics are equal, attributing Linezyct's differentiated profile to Regeneron's technology. He outlined a huge commitment with up to 10 registration trials planned, targeting a $30 billion market, and expressed intent to discuss acceleration with the FDA.

Chris Schott of JPMorgan Chase & Co. questioned if any other issues were pending for the EYLEA HD PDUFAs beyond manufacturing and asked about the market share erosion to Avastin due to affordability, and the potential to recapture it.

Answer

President & CEO Dr. Leonard Schleifer stated that based on FDA discussions, no other significant issues are pending for the EYLEA HD filings once the manufacturing issue is resolved. EVP of Commercial Marion McCourt noted that while Regeneron's retina franchise share is over 60%, the branded anti-VEGF category volume declined 1.2% due to Avastin uptake and she could not predict future share recapture.

Chris Schott of JPMorgan Chase & Co. questioned if there were any other pending issues with the EYLEA HD PDUFA filings besides manufacturing and asked if the branded market share erosion to Avastin was stabilizing.

Answer

President & CEO Dr. Leonard Schleifer stated that based on FDA discussions, no other significant issues are pending for the EYLEA HD filings. EVP of Commercial Marion McCourt noted that while Regeneron's retina franchise share is over 60%, the overall branded anti-VEGF category volume declined due to Avastin uptake driven by affordability issues.

Christopher Schott of JPMorgan Chase & Co. questioned the EYLEA foundation funding gap, asking for an updated timeline on when the foundation might reopen and how quickly patient volumes could shift back from off-label Avastin to branded agents.

Answer

President and CEO Dr. Leonard Schleifer detailed the co-pay assistance structure for Medicare patients via independent foundations. He noted Regeneron's past significant support and stated they are now exploring a matching program to encourage broader industry participation. He hoped for a launch in the 'not-too-distant future' but was uncertain if other companies would contribute.

Chris Schott inquired about Johnson & Johnson's perspective on emerging MFN agreements with the administration, particularly those focused on new Medicaid launches, and the company's overall approach to policy dynamics like MFN tariffs.

Answer

Chairman and CEO Joaquin Duato stated that Johnson & Johnson maintains an open dialogue with the administration, seeking common ground on priorities such as patient access to affordable innovation, preventing foreign entities from free-riding on U.S. innovation, maintaining U.S. life sciences leadership, and investing in domestic manufacturing. He expressed optimism for a positive outcome from these ongoing discussions.

Chris Schott asked about Johnson & Johnson's perspective on emerging MFN agreements and tariffs, and the company's overall approach to these evolving policy dynamics with the administration.

Answer

Chairman and CEO Joaquin Duato stated that J&J maintains an open dialogue with the administration, seeking common ground on priorities like patient access to affordable innovation, preventing foreign entities from free-riding on American innovation, and maintaining U.S. leadership in life sciences. He expressed optimism about reaching a mutually beneficial outcome and highlighted J&J's commitment to investing $55 billion in U.S. manufacturing over the next four years.

Chris Schott of JPMorgan Chase & Co. inquired about the primary drivers behind the full-year guidance increase, asking for a breakdown of contributions from the Innovative Medicine versus MedTech segments.

Answer

EVP & CFO Joseph Wolk confirmed both segments contributed to the strong performance. EVP Jennifer Taubert highlighted that the Innovative Medicine business, excluding Stelara, grew 15.5%, driven by 13 brands with double-digit growth, including DARZALEX and Tremfya. EVP Tim Schmid noted MedTech's 6.1% operational growth was led by a 22% surge in Cardiovascular, with acceleration expected from new product launches.

Christopher Schott of JPMorgan Chase & Co. asked for an explanation of the drivers behind the lower-than-expected gross margin and the outlook for the remainder of the year.

Answer

CFO Joseph Wolk attributed the Q1 gross margin decline to the loss of exclusivity for the high-margin product STELARA, the impact of Part D redesign, and unfavorable transactional currency. He projected that the guided 300 basis points of operating margin improvement could improve by one-third to 50%, inclusive of tariffs, and noted that analyst consensus had been overly optimistic.

Christopher Schott asked a two-part question on operating margins: first, what is enabling margin improvement despite top-line pressures from STELARA, and second, what is the expected cadence of margin expansion beyond 2025.

Answer

CFO Joseph Wolk attributed the margin improvement to disciplined operating spend management, driven by efficiencies gained after the consumer health separation, portfolio prioritization, and technology investments. He noted the company had prepared for STELARA's biosimilar entry for years. For 2026 and beyond, he indicated that margin and EPS growth should become more aligned with sales growth, which is expected to reaccelerate.

Christopher Schott of JPMorgan Chase & Co. inquired about the progress of the talc litigation, asking for the next key steps and Johnson & Johnson's confidence level in achieving a near-term resolution.

Answer

CEO Joaquin Duato reiterated the company's goal for a final and comprehensive resolution, highlighting the prepackaged reorganization plan supported by 83% of claimants. Erik Haas, Head of Worldwide Litigation, added that the Texas court has ordered parties to agree on an expeditious schedule, aiming for a confirmation hearing early next year.

Chris Schott from JPMorgan Chase & Co. asked about Gilead's confidence in its weekly HIV treatment combo (WONDERS program) following a recent clinical hold and how it compares to other pipeline assets.

Answer

Chief Medical Officer Dietmar Berger affirmed high confidence in the overall HIV pipeline, which includes multiple modalities from daily to long-acting injectables. He explained that for the WONDERS program, the company is analyzing data to isolate the issue and is prepared to substitute another molecule from its portfolio. He also highlighted the separate weekly lenacapavir/islatravir program, which is in Phase 3 with a potential 2027 launch.

Chris Schott from JPMorgan Chase & Co. asked about Gilead's confidence in its weekly HIV treatment, the WONDERS program (GS-4182/GS-1720), following a recent clinical hold, and inquired about upcoming updates.

Answer

Chief Medical Officer Dietmar Berger affirmed high confidence in the overall HIV treatment pipeline, which includes daily, weekly, monthly, and longer-acting options. He stated the team is analyzing data to isolate the cause of the clinical hold and will proceed with other molecules in the portfolio. Berger also highlighted that the separate weekly program with lenacapavir plus islatravir remains in Phase 3, with an update expected in 2026 for a potential 2027 launch.

Christopher Schott requested more color on the Livdelzi launch, including competitive dynamics and how its performance is tracking against internal expectations.

Answer

Chief Commercial Officer Johanna Mercier reported that the company is very pleased with the launch, which generated $40 million in its second full quarter. She highlighted rapid market share uptake, reaching one-third of the second-line PBC market, and strong positive feedback from physicians on its efficacy. Commercial coverage is on track, exceeding 80% and expected to surpass 90%.

Christopher Schott of JPMorgan Chase & Co. asked about the strategic positioning of subcutaneous injectable lenacapavir combinations in the HIV treatment market relative to the company's weekly oral options.

Answer

Merdad Parsey, Chief Medical Officer, explained that Gilead is pursuing a broad, patient-centric approach with demand for both modalities. He positioned oral options as weekly or monthly, while subcutaneous injectables offer greater durability, aiming for every 3-to-6-month dosing. CFO Andrew Dickinson added that the 2030 pipeline slide is not exhaustive and that long-acting injectables could launch shortly after that timeframe.

Chris Schott from JPMorgan Chase & Co. asked if the slower 2025 generic growth has long-term implications and requested an update on gross margin expectations for the second half of the year.

Answer

President and CEO Richard Francis stated he remains confident in the 2027 generics target, attributing the current slowdown to a difficult comparison with 11% growth in 2024. EVP & CFO Eli Kalif explained the strong Q2 gross margin was boosted by one-time items and portfolio mix, and he expects the full-year margin to be at the high end of the 53-54% guidance range.

Chris Schott of JPMorgan Chase & Co. asked for more detail on the announced $3 billion restructuring program, specifically how to model operating margins and absolute OpEx growth over the next few years, given the plan to fully reinvest the savings into the pipeline.

Answer

Chairman & CEO Robert Davis explained the program is about reallocating resources from slower-growth areas to fully fund new launches and the Phase 3 pipeline, leading to more productive overall spending growth. EVP & CFO Caroline Litchfield added that the savings will come from R&D, SG&A, and cost of goods, and will be fully reinvested along with further investments to drive long-term growth.

Chris Schott of JPMorgan Chase & Co. asked about the announced $3 billion restructuring initiative and its implications for operating margins and absolute OpEx growth over the next few years, considering the expanding pipeline.

Answer

Chairman & CEO Robert Davis clarified that the $3 billion represents a reallocation of resources from slower to faster-growing areas to fully fund new launches and the pipeline, with overall spending still expected to grow. EVP & CFO Caroline Litchfield added that the savings will be fully reinvested along with additional investments, particularly in R&D and SG&A.

Christopher Schott from JPMorgan Chase & Co. asked about the potential for a single-dose GARDASIL recommendation in the U.S. and whether tariff mitigation efforts also apply to legacy products like KEYTRUDA.

Answer

Dr. Dean Li emphasized the FDA's high evidentiary standard for a single-dose GARDASIL label. CFO Caroline Litchfield added that pricing would reflect the vaccine's value. CEO Robert Davis confirmed that mitigation efforts cover both new and legacy products, stating Merck is well-positioned for KEYTRUDA with inventory and secured manufacturing.

Christopher Schott sought clarity on the withdrawal of the $11 billion long-term target for GARDASIL, asking if this reflects conservatism due to near-term dynamics or a more permanent reset of the view on the Chinese market, and if the ex-China outlook has changed.

Answer

CEO Robert Davis explained that while a path to $11 billion is still believed to exist, withdrawing the target is prudent given the uncertain timing of China's economic recovery. He confirmed the underlying opportunity in China remains, but the ex-China outlook is unchanged, with strong growth expected. He stressed a desire to shift focus to the company's broad and growing pipeline.

Christopher Schott from JPMorgan Chase & Co. sought clarification on GARDASIL, asking how the projected $2-$3 billion annual opportunity in China compares to 2024's total and if this figure was already factored into the long-term $11 billion target.

Answer

CEO Robert Davis explained that China's GARDASIL sales were approximately $500 million in Q3 and are expected to be similar in Q4. He confirmed that the projected $2-$3 billion annual run-rate for China over the next few years is consistent with and was contemplated in the company's long-term goal of achieving over $11 billion in sales by 2030.

Christopher Schott questioned Amneal's ability to leverage its U.S. manufacturing footprint and available capacity if pharmaceutical tariffs are imposed, and the potential to raise prices to offset such costs. He also asked if Amneal might accelerate the conversion of Rytary patients to CREXONT ahead of Rytary's patent expiration.

Answer

Co-CEO Chirag Patel explained that Amneal has an idle U.S. plant that could be restarted if economically viable, providing significant additional capacity. He noted that the company would partner with large customers to share potential tariff-related cost increases. Regarding CREXONT, he stated the focus remains on the broad market, not on aggressively converting Rytary patients, although natural conversion is occurring due to CREXONT's superior profile.

Christopher Schott inquired about the initial launch performance of CREXONT, asking about any surprises in patient sourcing or physician adoption and the current status of formulary access. He also asked how Amneal's strong top-line growth is influencing its strategy regarding organic investment versus external business development, and the balance between long-term growth and near-term margin performance.

Answer

Co-CEO Chirag Patel described the CREXONT launch as exceeding expectations, with remarkable patient testimonials and prescription growth far outpacing the historical launch of RYTARY. Joe Renda, Head of Specialty, added that formulary access is at 30%, with a target of 50% for the year and an ultimate goal of surpassing RYTARY's 70% coverage. Regarding capital allocation, Chirag Patel highlighted the company's strong organic pipeline in affordable medicines and injectables, and stated a key focus is expanding the biosimilars business through in-licensing and strategic M&A for vertical integration, while also seeking additions to the specialty portfolio.

Christopher Schott asked about the business development landscape, focusing on the size and stage of assets Amneal is targeting. He also inquired about the competitive landscape for biosimilars, particularly for the Xolair biosimilar, and requested initial commentary on the key drivers and detractors for the 2025 financial outlook.

Answer

Co-CEO Chirag Patel outlined a business development strategy focused on specialty assets, particularly in oncology, and vertically integrating the biosimilars business to compete with major players. Co-CEO Chintu Patel added that their Xolair biosimilar partner is uniquely positioned with a full range of strengths. CFO Tasos Konidaris provided a 2025 outlook, stating that growth from biosimilars, injectables, and CREXONT, along with reduced interest expense, will more than offset the Rytary LOE, leading to another year of growth.

Ethan Brown, on behalf of Chris Schott, asked for clarification on Organon's capital allocation framework, specifically the role of share repurchases. He also inquired about the company's ability to navigate potential tariff impacts beyond 2025.

Answer

CEO Kevin Ali and CFO Matt Walsh prioritized deleveraging and growth-focused business development over share repurchases, stating that reducing leverage below 4x is the best way to create value. Regarding tariffs, Walsh noted minimal 2025 exposure and explained that since most U.S. supply comes from Europe, it is too soon to quantify future impacts given the fluid policy situation.

Christopher Schott requested more details on Biogen's business development strategy, including the size and scope of deals, and how market volatility is affecting opportunities.

Answer

CEO Christopher Viehbacher noted a recent shift where financing struggles and LP pressure may make more companies open to discussions. He stated Biogen will remain patient and disciplined, focusing on collaborations, particularly in early-stage research, to leverage its expertise and provide funding. He highlighted the HI-Bio team at Biogen's West Coast hub as a key asset for identifying and executing these partnerships.

Christopher Schott inquired about the operating expense outlook, asking if the 2025 guidance of approximately $3.9 billion is a sustainable baseline for future years.

Answer

CFO Michael McDonnell confirmed that the $3.9 billion OpEx level is a good baseline to use for models going forward, as the 'Fit for Growth' program was designed to right-size spending. CEO Christopher Viehbacher added that while future BD could add costs, the company is actively prioritizing its portfolio to create financial capacity for new assets.

Christopher Schott inquired about the long-term margin dynamics beyond 2025 and asked for more detail on the Bovaer launch curve, particularly in comparison to the Experior launch.

Answer

CFO Todd Young explained that margins are expected to improve beyond 2025 as the company leverages launch investments and benefits from the accretive margin profile of its innovation portfolio. President and CEO Jeff Simmons detailed that the Bovaer ramp-up is driven by in-field implementation with co-ops and feed mills, connecting farmer supply with CPG demand. He compared its trajectory to Experior, suggesting that once integrated into feeding programs, its use will become sticky and resilient, with a more significant ramp expected in the second half of 2025.

Christopher Schott of JPMorgan Chase & Co. asked for the company's bigger-picture outlook on pricing heading into 2025, considering the recent healthier pricing environment. He also inquired about the expected ramp-up of Credelio Quattro next year, specifically whether initial adoption would come from existing Credelio users or a broader base of veterinarians.

Answer

CEO Jeff Simmons stated that while industry pricing may normalize back towards historical levels of around 2%, Elanco's innovation-heavy portfolio provides leverage to achieve something between recent highs and historical norms. Regarding Credelio Quattro, he reiterated plans for a Q1 launch ahead of the parasiticide season with significant investment. He expects the ramp to occur over the full year, targeting the broad, fast-growing combination parasiticide market.

Christopher Schott from JPMorgan Chase & Co. inquired about the specifics of a lost customer contract, including the margin profile of the offsetting new business wins. He also sought assurance on the infant formula business recovery, asking about the confidence level that the remediation is complete and whether there has been any customer resistance to re-stocking.

Answer

CEO Patrick Lockwood-Taylor explained that the lost business was margin-dilutive and a strategic decision. He confirmed that net contract wins this year are margin-accretive and will offset the revenue impact in 2025. Regarding infant formula, Lockwood-Taylor expressed high confidence in the completed remediation, citing strong KPIs and no backsliding. He also noted the industry remains capacity-constrained, so they are having no issues repipelining the business. CFO Eduardo Bezerra added that the team is now 100% focused on regaining market share.