Terence Flynn • Morgan Stanley

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Interim Chief Financial Officer Jessie Yeung explained that the trial readouts are event-driven and that discussions with the FDA are ongoing regarding MRD as a dual primary endpoint. Alan Bash, President of CARVYKTI, confirmed the Virginia Oncology partnership serves as a template for community adoption, highlighting the practice's experience and enthusiasm for CARVYKTI.

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Chief Commercial Officer Johanna Mercier explained that the overall PrEP market is growing at a strong 15% year-over-year rate due to increased awareness. Descovy's outperformance (35% growth) was driven by improved, unrestricted access, now at 88% of total lives. However, she anticipates a future shift in the product mix as Yes2Go gains traction. Regarding IQVIA data for Yes2Go, Mercier stated it is directionally aligned but still too early to be fully representative, as it doesn't capture all channels, and will require a few more quarters to stabilize.

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Chief Commercial Officer Johanna Mercier attributed Descovy's 35% YoY growth to increased PrEP awareness, strong execution, and favorable unrestricted access for 88% of lives. She noted the overall PrEP market is growing at ~15% and expects a future product mix shift as Yes2Go gains traction. Regarding IQVIA data, she stated it is directionally aligned but cautioned it's too early for full accuracy as it doesn't capture all channels.

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Cindy Perettie, Executive Vice President of Kite, explained that MRD negativity is a dual primary endpoint alongside progression-free survival (PFS). She noted that MRD correlates well with PFS and allows for a much earlier assessment of patient response. While not specifying the exact delta required by regulators, she emphasized that the strong correlation between the two endpoints is the basis for their regulatory discussions.

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CFO Andrew Dickinson confirmed the 2025 guidance assumes a mid-year launch for lenacapavir for PrEP, with access ramping over time, but did not provide a specific revenue figure. He affirmed the goal is to hold operating expenses relatively flat for the foreseeable future, allowing top-line growth to drive margin expansion.

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Kenneth Custer, President of Lilly Cardiometabolic Health, addressed the first question, stating that after positive results from ATTAIN-1 and ACHIEVE-1, the company expects 'similarly encouraging results' from ATTAIN-2. He noted this third study keeps them on track for a regulatory submission for obesity by the end of the year. The CMMI question was not addressed.

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Patrik Jonsson, President of Cardiometabolic Health, deferred specific pricing comments but affirmed that having a portfolio targeting different patient segments (e.g., by BMI) would create a position of strength. CEO David Ricks added that Lilly's strategy is to move toward more transparent pricing by reducing the gap between list and net prices, a trend they intend to continue.

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Executive Patrik Jonsson stated that commercial access is strong, with the OSA label creating a Medicare opportunity for H2 2025. CEO David Ricks added that Lilly opposes compounding, has full supply, and is involved in litigation to stop the practice.

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CEO David Ricks indicated that while detailed 2025 guidance will be provided in February, capital investments made from 2021-2023 are now coming online, and they expect "good growth" in supply next year. CFO Lucas Montarce suggested the current 25% sequential quarterly prescription growth is a reasonable proxy for demand trends entering 2025.

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Head of Research & Investments Marshall Urist expressed excitement for adstiladrin, noting Faring's strong launch and market-building efforts, and sees a growing market, not a zero-sum game with competitors. CFO Terrance Coyne indicated that the H2 2025 operating expense trend of 5-6% of portfolio receipts is strong and heading toward the long-term goal of 4-5%. He added that share repurchases will remain dynamic, balancing the attractive deal pipeline against the share price.

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EVP, CFO Terrance Coyne responded that while it's early, the Vertex CF franchise is expected to be a major long-term contributor regardless of the launch scenario. EVP Marshall Urist added that the potential for an evolving REMS landscape was always a contemplated scenario and that their core thesis remains that the hypertrophic cardiomyopathy (HCM) market is large enough for two products.

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Terrance Coyne, EVP and CFO, noted it was premature to discuss 2025 in detail but expressed confidence in the current portfolio, deferring formal guidance to the Q4 call. Christopher Hite, EVP and Vice Chairman, described the deal environment as very strong, driven by immense capital needs across the biopharma sector, and stated that the company's ability to invest is not dependent on the political administration. Pablo Legorreta, Founder and CEO, added that exciting pipeline readouts are expected next year.

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CMO Noah Berkowitz responded that 'probably not a lot' is needed beyond confirming the drug's clean safety profile. The main goal is to ensure there are no unexpected toxicities that would interfere with the known profile of Glofitamab, such as hematopoietic toxicity or CRS. Given ARV-393's expected clean profile, the bar for moving to a combination study is not particularly high.

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James Bradner, EVP of R&D, acknowledged awareness of the data and confirmed four Meritide Phase 3 studies are enrolling well. He stated that Amgen would share more about its pivotal study plans for diabetes and related CV outcomes in due time.

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James Bradner, EVP of R&D, stated that the ADA presentation will reinforce MariTide's strong efficacy, sustained weight loss without a plateau at 52 weeks, and good tolerability with an optimized dose escalation. He noted it will also feature new mechanistic data. Bradner declined to provide specifics on the CVOT design but confirmed a broad Phase III program for obesity-related conditions is being initiated.

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James Bradner, EVP of R&D, confirmed that the Phase II Part 1 data for MariTide will be presented at the ADA meeting in June. He also noted that the data readout for the 52-week Part 2 of the study is expected late in the year, but did not comment on a potential interim analysis.

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CEO Robert Bradway stated that once the data is in hand, Amgen will share it in a manner that is in the best interest of shareholders. EVP of R&D James Bradner added that Phase III planning is on track and the dosing strategy will be well-informed by the ongoing Phase II study, but declined to provide specific details on the design.

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Chief Scientific Officer Chris Boshoff stated that the focus for atiraciclib is now on the first-line setting, with the Phase 3 trial recruiting well, but did not commit to a date for the second-line data release. He also confirmed there are no current plans for an adjuvant study for Lorlatinib.

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Chief Scientific Officer Chris Boshoff stated that the focus for atemaciclib is now on the first-line Phase 3 trial, which is recruiting well, and a date for the Phase 2 data update has not been disclosed. He also confirmed there are no current plans for an adjuvant study for Lorlatinib.

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CEO Albert Bourla stated he was not aware of any 'Grand Bargain' and that discussions are focused on the 232 investigation and the President's executive order on drug costs. Chief Scientific Officer Chris Boshoff reported that Vepdegestrant met its primary endpoint in a key patient sub-population and that full data will be presented at ASCO while engaging with regulators.

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Executives Aamir Malik and Alexandre de Germay confirmed strong momentum for ELREXFIO, with increasing adoption in community settings both in the U.S. and internationally. CEO Albert Bourla called it a future 'mega blockbuster.' For danuglipron, Executive Chris Boshoff clarified that Q1 data will be primarily PK data for dose selection, and weight loss data from the small study may not be reliable.

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An executive stated it was not productive to predict ACIP's revaccination schedule but expressed confidence in ABRYSVO's profile and commercial momentum. EVP and Chief Oncology Officer Chris Boshoff clarified that the atirmociclib first-line study will be against the physician's choice of a CDK4/6 inhibitor, not a direct head-to-head comparison against IBRANCE.

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Matthew Walsh, CFO of Organon, stated it was too soon to speculate on 2026 tariff impacts but noted the EU represents about two-thirds of U.S. import value. He projected that free cash flow should grow with the business in 2026, with a significant increase in discretionary cash flow expected as one-time costs continue to decline.

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CFO Matt Walsh projected 2025 free cash flow before onetime items to be around $900 million, a decrease from 2024 due to lower adjusted EBIT. CEO Kevin Ali added that the denosumab biosimilar launch is expected late in Q4 2025, resulting in a de minimis revenue impact for the year, but expressed long-term confidence in market penetration based on the company's experience with RENFLEXIS.

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President and CEO Dr. Reshma Kewalramani stated there was no significant inventory to note, only normal hospital buying variability. She explained the VX-993 study was vital for validating and refining their preclinical models, confirming they are at the high end of the dose-response curve for NAV1.8 monotherapy.

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Chief Medical Officer Özlem Türeci stated that details on the doses for both the Lung-1 and Lung-2 trials will be disclosed later in the year. She specified that more information on the small cell lung cancer study (Lung-1) would be available in September at the World Conference on Lung Cancer (WCLC).

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Chief Medical Officer Özlem Türeci declined to disclose specific doses but indicated trial design details would be presented at upcoming conferences. She stated that Phase II data would be available late 2025 or early 2026 to inform the Phase III portion, which is powered for co-primary endpoints of Progression-Free Survival (PFS) and Overall Survival (OS).

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CSO Ryan Richardson stated the upcoming data will build on previously reported response rates of around 70% and will further validate the move to pivotal trials. CMO Özlem Türeci confirmed the presentation will include follow-up data from an ongoing trial as well as new data from dose justification studies.

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CEO Dr. Ugur Sahin and Chief Strategy Officer Ryan Richardson addressed the question. Dr. Sahin noted the comparator is chemotherapy, with a typical PFS of 4-5 months. Mr. Richardson added that pembrolizumab achieved a 15 to 23-month median OS in a similar indication, providing a relevant benchmark. Dr. Sahin also mentioned recently reported PFS data of about 13 months for BNT327.

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President & CSO Dr. George Yancopoulos declined to speculate on the slowing event rate but confirmed the trial is powered to show an effect at least comparable to competitors, with potential for superiority. President & CEO Dr. Leonard Schleifer added that this is precisely why studies are blinded and one must wait for the data.

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President & Chief Scientific Officer Dr. George Yancopoulos stated that while one can speculate, the study is powered to show an effect at least comparable to competitors. President & CEO Dr. Leonard Schleifer added that this is precisely why studies are blinded and that they must wait for the unblinded results.

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President and CEO Dr. Leonard Schleifer confirmed it is the 'exact same device, same design and the same components' that were approved and have been used safely in Europe for months. He added this provides confidence that the issues are resolvable, though the FDA conducts its own independent review.

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President and CSO Dr. George Yancopoulos explained the two distinct approaches: an A2 domain antibody with an expected milder safety profile and a catalytic domain antibody designed as a best-in-class blocker with higher efficacy. He stated the company hopes to show both are effective and that the decision to advance one or both will depend on their respective efficacy and safety profiles, potentially for different thrombosis indications. CEO Dr. Leonard Schleifer added that Regeneron's antibodies are not created equal to competitors' due to superior in-house technology.

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CEO Robert Michael stated that AbbVie is tracking very well against its long-term guidance and will provide updates at an appropriate time. Regarding tariffs, he noted the company is insulated for 2025 due to inventory management and does not expect outsized exposure relative to peers, highlighting significant U.S. manufacturing investments.

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CEO Robert Michael and CFO Scott Reents discussed tariff mitigation, highlighting AbbVie's significant U.S. manufacturing footprint and plans for over $10 billion in future U.S. capital investment. Near-term strategies include inventory management and cost efficiencies. Reents noted AbbVie's tax rate and IP profile are in line with peers, suggesting no outsized impact. CSO Roopal Thakkar explained the Amylin program can test doses several-fold higher than 2mg for up to 12 weeks, with data expected next year to inform a formal Phase IIb study.

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EVP & CFO Scott Reents clarified that while a volume offset is included in the 4% net impact from the Part D redesign, it's modest and not quantified, primarily affecting one-third of the patient segment. CEO Robert Michael added that the other two-thirds (LIS and employer plans) are less affected. EVP & CSO Roopal Thakkar stated the upcoming Phase II study for the NLRX1 agonist will be robust, and if positive, it would become a Phase III asset and a potential combination agent with Rinvoq.

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CCO Jeffrey Stewart reported that contracting is nearly complete and they do not expect any material changes to the broad formulary access for SKYRIZI and RINVOQ in 2025. He reiterated expectations for a modest negative pricing environment, with low single-digit changes in rebates.

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Dr. Leigh Peterson, VP of Product Development, confirmed that background therapy use is higher in the TETON studies (around 75-77%) than in INCREASE. She explained that while this can mute an investigational drug's effect, significant room for improvement remains as patients on current therapies still experience FVC decline. This was an expected factor in the trial design and is not a concern.

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Chairman & CEO Robert Davis stated that it is not yet clear how the tariffs will be implemented. However, he noted that if implemented immediately, the impact on 2025 would be minimal due to proactive inventory management and shifting manufacturing to the U.S. He added that the company has made very good progress on its positioning for 2026 as well.

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Chairman & CEO Robert Davis stated that while the implementation details are unclear, the impact on 2025 would be minimal due to proactive inventory management and shifting manufacturing to the U.S. He declined to give 2026 guidance but noted significant progress has been made to mitigate future impacts.

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CEO Robert Davis stated that the M&A strategy remains unchanged, as long-term plans for the post-LOE period never relied on GARDASIL as a primary growth driver. He reiterated that Merck will continue to pursue science-led business development across a full range of opportunities, with a 'sweet spot' of $0-$15 billion, but remains open to larger or commercial-stage assets if they align with strategy and create value.

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CEO Robert Davis confirmed the $2-$3 billion forecast for China does include the male opportunity. Dr. Dean Li addressed the bispecifics question by highlighting Merck's own significant investments in the VEGF pathway through collaborations and its HIF-2 alpha program. He advised caution when interpreting data from China due to differences in health systems and trial designs.

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EVP Jennifer Taubert expressed high confidence in the $50B target, citing strength in multiple myeloma and prostate cancer, and particularly highlighted TAR-200, for which she stated internal forecasts are at least three times higher than 2028 consensus. She confirmed J&J has responded to the FDA's manufacturing-related questions for subcutaneous Ribrevant and anticipates a second-half approval. EVP John Reed added color on broad pipeline momentum in oncology.

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CEO Joaquin Duato emphasized the importance of partnering with the administration to ensure supply chain security. CFO Joseph Wolk clarified that their view was speculative, based on an assessment of national security interests, and that the company remains deferential to the administration's official process.

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Jennifer Taubert, an executive, highlighted the franchise's strength, noting DARZALEX's $3.1 billion quarter, CARVYKTI's robust demand and capacity expansion, and the strong performance of TECVAYLI. John Reed, an executive, added that J&J is combining these assets for next-generation frontline therapies, citing promising early data and the potential for CARVYKTI to replace stem cell transplants in earlier lines of therapy.

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Jennifer Taubert, Executive VP of Innovative Medicine, attributed CARVYKTI's 88% growth to strong demand from its CARTITUDE-4 approval, significant overall survival data, and ongoing manufacturing capacity expansion. Regarding TECVAYLI, she noted that while new patient uptake is strong, sequential growth was flat due to longer dosing intervals, but expects future growth from combination studies. John Reed added that TECVAYLI shows best-in-class deep responses.

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Head of Development Dr. Priya Singhal confirmed they have seen no changes or delays in FDA interactions and have agreement on the Phase III design for their Dravet program. CEO Christopher Viehbacher added that he is encouraged by the new commissioner's focus on innovation for ultrarare diseases and surrogate markers, which could be helpful, though no direct impact has been observed yet.

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CFO Michael McDonnell pointed to significant year-to-date margin improvement. He reiterated the 'Fit for Growth' initiative's goal of $800 million in net savings by the end of 2025. He stated that half of these savings are expected by the end of 2024, with the remaining half to be realized in 2025, which will continue to improve the company's margin profile.

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CCO Adam Lenkowsky described the Cobenfy launch as strong, tracking ahead of benchmarks with broad access, and explained the Q1 gross-to-net benefit was a true-up from a Q4 projection. CFO David Elkins declined to give 2026 guidance but highlighted that ongoing productivity initiatives, automation, and portfolio prioritization provide flexibility to manage the business while investing for growth.

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CFO David Elkins confirmed the operating expense target, stating the $2 billion program would result in OpEx of ~$15 billion by 2027. CMO Samit Hirawat explained that the use of MRD as a co-primary endpoint for iberdomide was discussed with the FDA and that any approval would depend on the overall risk-benefit profile, noting that PFS also remains a co-primary endpoint.

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CEO John Leonard and CFO Edward Dulac explained that a key upcoming milestone is Regeneron's decision on whether to opt into its right for a co-commercialization/co-promotion partnership for nex-Z in the U.S. The timing of this decision is linked to the program's timeline to commercialization, which could be accelerated.

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President Stephen Hoge confirmed that GBS has not been identified as a risk for their RSV or COVID vaccines. He clarified that efficacy for the COVID component of the combo vaccine has been established, but efficacy for the flu component is still needed. This data is expected from the ongoing standalone flu vaccine (mRNA-1010) trial at the end of the current season.

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CEO Stéphane Bancel confirmed the manufacturing plant is progressing on schedule and is no longer on the critical path for approval. President Stephen Hoge added that clinical work will transition to the new plant once operational, and data from that work will serve to bridge the programs for regulatory purposes.

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COO Jennifer Jarrett stated the venue for the fall presentation would not be disclosed but confirmed it is not ESMO. The update will cover approximately 30 patients with about 10 months of median follow-up. She explained that while the ARC-20 population is more advanced, its positive results are encouraging for the PEAK-1 trial, which will enroll a broader, less advanced patient population.

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