Umer Raffat

Umer Raffat asked for a breakdown of the $650 million cost cuts from the strategic review across COGS, SG&A, and R&D, including any associated CapEx. He also questioned the assumption for India bounce-back in the 2026 EBITDA guidance, considering the $325 million headwind in 2025.

Answer

CEO Scott Smith stated that 50% of the savings would come from headcount reductions, with the remaining 50% from COGS efficiencies, inventory management, and support structures, noting minimal R&D cuts. CFO Doretta Mistras clarified that COGS efficiencies are more back-end weighted and confirmed less than 1% India recovery is baked into the 2026 top-line guidance, attributing this to 2025 lenalidomide impact and remediation efforts.

Umer Raffat sought clarification on the breakdown of Viatris's $650 million gross cost savings across COGS, SG&A, and R&D, and the assumed impact of India's operational recovery on 2026 guidance.

Answer

CEO Scott Smith stated that approximately 50% of savings come from headcount reductions, with the remainder from COGS efficiencies, inventory management, and support structures. CFO Doretta Mistras noted that COGS efficiencies are back-end weighted and less than 1% India recovery is factored into 2026 guidance, following 2025 remediation efforts.

Umer Raffat inquired about Viatris's payer guidelines engagement strategy for fast-acting meloxicam, specifically whether it would focus on multimodal pain pathways or traditional retail channels. He also asked about the commercialization approach for the presbyopia medicine, questioning if it would initially be a cash-pay optometry play or if there's a path to broader reimbursement and physician adoption.

Answer

Chief R&D Officer Philippe Martin explained that the acute pain market has shifted to a multimodal approach, and Viatris believes meloxicam's data supports this positioning. CFO Doretta Mistras stated that the commercialization strategy for presbyopia and dim light disturbance is still being developed, viewing it as a portfolio approach with existing eye care assets. She noted that a large cash-pay component is naturally assumed for presbyopia, with more details to follow closer to commercialization. CEO Scott Smith expressed satisfaction with the progress in the eye care group.

Umer Raffat from Evercore asked about the potential impact of proposed U.S. tariffs, specifically questioning how Viatris assesses the proportional risk between its manufacturing in India versus the EU.

Answer

CEO Scott Smith explained that while the situation is being monitored, it's currently unclear if tariffs will be applied to pharmaceuticals. He noted that about half of U.S. revenue is sourced domestically and that India represents about 10% of revenue. Smith emphasized that Viatris has mitigation plans in place and does not anticipate a material financial impact in 2025 from any potential tariffs.

Umer Raffat from Evercore ISI requested details on Viatris's U.S. manufacturing footprint and asked several questions about meloxicam, including potential bleeding risks, its use in acute versus chronic settings, and its positioning as a hospital or outpatient drug.

Answer

CEO Scott Smith reiterated that over 50% of U.S. revenue is sourced from its 8 U.S. facilities, with the rest from Ireland, the U.K., and India. On meloxicam, Chief R&D Officer Philippe Martin stated that clinical trials showed no increased bleeding risk despite a higher Cmax. Chief Commercial Officer Corinne Le Goff added that the drug is positioned for both hospital and outpatient use in various acute pain settings.

Umer Raffat from Evercore ISI challenged the company's previous communication on the Indore warning letter, contrasting the minimal tone at a January conference with the significant financial impact announced today. He also asked for the rationale behind the amended Idorsia deal and what new information prompted the additional $100 million investment.

Answer

CEO Scott Smith defended the communication, citing the situation was highly dynamic and the final impact, particularly on lenalidomide, was not clear until just days before the call. Regarding Idorsia, Chief R&D Officer Philippe Martin and CEO Scott Smith pointed to positive feedback from KOLs and safety committees, the growing importance of the assets, and the strategic benefit of taking more control to ensure data integrity and secure better long-term economics.

Umer Raffat asked Richard Pops about the timing of his decision to transition from CEO to Chairman, given the pipeline's strong position, and whether the phase III design strategy for alixorexton includes split dosing for both NT1 and NT2.

Answer

Richard Pops, CEO of Alkermes, explained his CEO transition timing is due to the company's strong position and transformation into a proprietary products company. He confirmed that split doses will be included in the NT1 phase III studies, a decision influenced by clinician feedback and NT2 data, integrated into the registrational program for competitive advantage.

Umer Raffat asked about the timing of Richard Pops' decision to step down as CEO while remaining chairman, and whether the Phase 3 design strategy for alixorexton includes split dosing in both NT1 and NT2.

Answer

Richard Pops, CEO, explained that the timing for his transition is optimal as the company is in a demonstrably strong position, having transformed into a proprietary products company with a potential blockbuster drug. He confirmed that split doses will be included in the NT1 Phase 3 studies, a decision made after observing NT2 data and clinician feedback, to extend wakefulness and enhance the product's competitive profile.

Umer Raffat from Evercore ISI asked for confirmation of a linear dose response on the MWT endpoint and questioned the statistical analysis for cataplexy, specifically if using a negative binomial distribution explained the lack of statistical significance at the 8mg dose.

Answer

Richard Pops, Chairman & CEO, deferred on dose-response linearity until the World Sleep meeting. Marcus Yountz, VP of Clinical Development, confirmed the pre-specified use of the negative binomial analysis was appropriate and discussed with the FDA. Pops added that other data perspectives will clearly show the drug's effect on cataplexy and that this represents a methodological learning for Phase 3.

Umer Raffat questioned how Alkermes defines efficacy success for the upcoming ALKS 2680 readouts, such as a specific MWT threshold, and asked for thoughts on whether visual disturbances are caused by REM sleep intrusions or are a Cmax-related effect.

Answer

Dr. Craig Hopkinson, CMO, explained that efficacy is viewed both by comparing to currently approved therapies and by the potential to normalize wakefulness patterns. CEO Richard Pops clarified that prior visual events (blurred vision, light sensitivity) were not interpreted as REM sleep intrusions or a failure of efficacy, and that more data is needed to draw conclusions.

Umer Raffat sought clarification on the relative timing of the narcolepsy Type 1 and Type 2 study readouts and asked for help reconciling LYBALVI's 2025 guidance with recent prescription trends and gross-to-net dynamics.

Answer

CEO Richard Pops described the orexin study enrollment as a "horse race," with more clarity on timing expected in a few months. CCO C. Nichols explained the LYBALVI guidance, noting strong underlying HCP breadth growth, the impact of the sales force expansion, and a planned widening of gross-to-net to the mid-30s range driven by improved market access.

Umer Raffat sought clarification on the 'distinct pharmaceutical properties' of next-gen orexins, specifically asking if a lower Cmax was a goal, and questioned the 2025 EBITDA guidance of ~$200 million, a significant drop from the current year's run rate.

Answer

CEO Richard Pops clarified that lowering Cmax is not an explicit design objective for next-gen orexins, as the PK profile for ALKS 2680 is considered quite good. COO Blair Jackson explained the 2025 EBITDA forecast is primarily due to a ~$200 million revenue impact from the conclusion of INVEGA SUSTENNA royalties and the transition of VUMERITY manufacturing, plus increased investment in the ALKS 2680 program and the psychiatry sales force.

Umer Raffat questioned the flat adjusted gross margin in 2025 despite over $400 million in innovation growth, suggesting a potential deterioration in the underlying base business's gross margin, and sought clarification on the flattish gross margin assumption for 2026. He also asked if it's reasonable to assume that approximately half of the $250 million+ innovation growth guided for 2026 will come from the Credelio franchise alone.

Answer

Bob Van Hembergen, CFO, explained that Q4 saw a 30 basis point margin improvement driven by price, volume, and mix, partially offset by inflation and higher inventory costs flowing through. For 2026, he expects 40 basis points of gross margin expansion, driven by accelerating price, higher-margin innovation, and Elanco Ascend savings, with stronger margins in the second half. Jeff Simmons, President and CEO, acknowledged Credelio Quattro's significant contribution to innovation growth, noting its strong momentum and differentiated position in a growing market. He emphasized Elanco's basket of 'best medicine' products in major, double-digit growth markets.

Umer Raffat questioned why gross margin was flat in 2025 despite over $400 million in innovation growth, suggesting a deterioration in the underlying base business's gross margin, and sought clarification on the flattish gross margin assumption for 2026. He also asked if it was reasonable to assume that approximately half of the $250 million+ innovation growth guidance for 2026 would come from the Credelio franchise alone.

Answer

Bob Van Hembergen, CFO, Elanco Animal Health, explained that Q4 2025 gross margin improvement was offset by inflationary pressures and higher inventory costs, which will flow through in H1 2026. He projected a 40 basis point gross margin expansion for 2026, driven by price acceleration, higher-margin innovation, and Elanco Ascend, with stronger margins in H2. Jeff Simmons, President and CEO, Elanco Animal Health, acknowledged Credelio Quattro's significant contribution to innovation growth, noting its strong momentum and the changing competitive landscape in the broad-spectrum endecto market.

Umer Raffat asked for clarification on Credelio Quattro's $100 million sales milestone, inquiring if it was achieved in Q3 2025 or year-to-date. He also asked about the performance of the innovation basket excluding Quattro and the realistic peak sales potential for Credelio Quattro, specifically if it could reach $1 billion.

Answer

Jeff Simmons, President and CEO, clarified that Credelio Quattro reached $100 million in sales year-to-date through September, not just in Q3. He highlighted its rapid achievement of blockbuster status in less than eight months in a single country, emphasizing its differentiation, the 40% growth of the $1.4 billion broad-spectrum endectocide market, and Elanco's increasing market share. Simmons noted that Quattro is currently in only a third of clinics, has an 80% reorder rate, and leads in the Kynetec puppy index, indicating strong veterinarian confidence. He expressed belief in Quattro's potential as a best-in-class product with significant growth runway, including international launches starting in 2026.

Umer Raffat from Evercore ISI asked for clarification on Credelio Quattro's sales, specifically if it reached $100 million in Q3, and inquired about its realistic peak sales potential, questioning if it could reach $1 billion.

Answer

President and CEO Jeff Simmons clarified that Credelio Quattro achieved $100 million in net sales year-to-date until September, not solely in Q3. He highlighted its status as Elanco's fastest blockbuster, its strong differentiation, and its contribution to the $1.4 billion broad-spectrum endectocide market, which is growing at 40%. Simmons noted the product's high puppy index share and significant future growth potential, especially with upcoming international approvals.

Umer Raffat asked about Bausch Health's updated decision framework for the separation of Bausch + Lomb following the RED-C readout, inquiring about the company's approach to debt repayments and business development plans.

Answer

CEO Thomas Appio stated there is no change in strategy, with a continued focus on debt repayment, reinvestment in the business, and accelerating business development activities due to the significantly improved capital structure. He highlighted the DURECT acquisition as a platform for alcohol-associated hepatitis and other acute cell injury indications, and the ongoing screening of assets to leverage the company's commercial excellence. CMO and Head of R&D Jonathan Sadeh further explained that larsucosterol (from DURECT) is viewed as a platform for various acute cell injury settings, with preclinical and clinical data suggesting broader efficacy.

Umer Raffat inquired about Bausch Health's updated decision framework for the Bausch + Lomb separation following the RED-C readout, including considerations for debt repayments and business development. He also asked for more details on the company's business development plans.

Answer

Thomas Appio, CEO, affirmed no change in the separation framework, emphasizing continued focus on debt repayment, reinvestment, and accelerating business development. Jonathan Sadeh, CMO and Head of R&D, elaborated on the DURECT acquisition as a platform for larsucosterol, highlighting its potential beyond alcohol-associated hepatitis.

Umer Raffat of Evercore ISI asked for specifics on the Rifaximin SSD Phase 3 trial design, questioning if lactulose background therapy is allowed and if the patient population consists of inadequate responders. He also asked if the company had considered a XIFAXAN OTC switch.

Answer

CEO Thomas Appio highlighted the significant market opportunity for the Rifaximin SSD formulation, targeting a 1.9 million patient population in the U.S. He stated that a XIFAXAN OTC switch has not been considered at this time and that the team would follow up with specific details regarding lactulose use in the trial design.

Umer Raffat questioned if the new RED-C trial indication could be served off-label by generic XIFAXAN. He also expressed confusion about the company's strategic path, noting XIFAXAN's cash flow importance against its upcoming generic cliff, and asked what aggressive actions, like a Bausch & Lomb equity raise, are being considered to address the high leverage.

Answer

CEO Thomas Appio argued the RED-C program's new formulation (rifaximin SSD) and global scope would differentiate it from generics. Interim CFO John Barresi clarified that cash flow guidance is post-interest, underscoring the need for debt reduction, and pointed to growth in non-XIFAXAN businesses like Solta and the pipeline as key to the long-term strategy.

Umer Raffat questioned the scope and comprehensiveness of Organon's internal investigations into channel behavior issues, specifically asking how the company can assure that such issues are limited to Nexplanon, given a new issue emerged regarding biosimilars purchasing.

Answer

Carrie Cox, Organon's Board Chair, stated that the company could not provide any additional color on the matter at this point.

Umer Raffat asked about the scope of Organon's internal investigations into channel behavior, questioning if the audit committee's review was too limited to Nexplanon given a newly identified issue in biosimilars purchasing.

Answer

Carrie Cox, Organon's Board Chair, stated that the company could not provide additional color on the matter at this time.

Umer Raffat from Evercore ISI questioned the VITAMMA launch trajectory, noting that weekly prescription volumes (TRx) appeared to be hovering around 6,000 for several months. He asked how management views this data and if any strategic changes are planned to alter the trajectory, later probing if the issue was related to treatment duration rather than access.

Answer

Kevin Ali, CEO & Board Member of Organon, responded that the company has just recently initiated its full investment push with DTC and telehealth campaigns and an expanded sales force. He emphasized that significant progress in improving market access and lowering the gross-to-net ratio is a key precursor to volume growth, expressing confidence in the second-half performance based on a strong exit from Q2.

Umer Raffat challenged the consistency of Organon's strategy, highlighting the recent shift from calling the dividend a top priority to now cutting it. He asked for the primary driver of this decision: deleveraging or anticipation of future tariffs.

Answer

CEO Kevin Ali attributed the change to the volatile macroeconomic environment and clear investor feedback prioritizing lower leverage. He stated the decision was made from a position of strength to accelerate deleveraging, which will ultimately enable more growth-focused business development. He clarified the primary focus is deleveraging, as 2025 tariff exposure is manageable.

Umer Raffat requested clarification on VTAMA's Q4 2024 revenue of $10 million, which seemed low. He also asked if the guidance for two-thirds of 2025 sales occurring in the second half implies a Q4 run rate of $200-$250 million.

Answer

CEO Kevin Ali explained that Organon did not follow Dermavant's previous practice of pulling sales forward into the end of a quarter, opting for a clean start in 2025. He confirmed the back-half weighting of VTAMA's sales is accurate, with growth expected to accelerate throughout the year driven by improved managed care access and strong prescription trends.

Umer Raffat asked if the projected $180 million in 2025 operating expenses for VTAMA is inclusive of ex-U.S. spending and questioned how much of that budget could be reduced if the product were to underperform expectations.

Answer

Chief Financial Officer Matthew Walsh confirmed the $180 million OpEx figure is U.S.-focused with no significant international spend included. He stated that while promotional spending is flexible, the company's full energy in 2025 will be dedicated to a successful launch, and any potential budget retrenchment would only be considered beyond 2025.

Umer Raffat inquired about the confidence in the upcoming Trodelvy Phase 3 readout in endometrial cancer and whether the market size is comparable to triple-negative breast cancer.

Answer

Dietmar Berger, Chief Medical Officer, expressed confidence based on the earlier Phase 2 TROPICS-03 study, which showed a median OS of 15 months in this population. He stated that while specific details on the interim analysis are not being provided, they anticipate data later this year. Johanna Mercier, Chief Commercial and Corporate Affairs Officer, confirmed that the second-line endometrial cancer market is roughly in line with second-line metastatic TNBC, representing an addressable population of about 5,000 in the U.S., an incremental but important opportunity.

Umer Raffat expressed intrigue about the Trodelvy Phase III endometrial cancer trial update expected in H2 2026, asking about Gilead's confidence in the interim analysis and the market size compared to triple-negative breast cancer.

Answer

Dietmar Berger, Chief Medical Officer, and Johanna Mercier, Chief Commercial and Corporate Affairs Officer, responded. Dietmar stated that excitement for the endometrial program stems from the Phase II TROPICS-03 study, which showed a median overall survival of 15 months in that population. He anticipates important data later this year. Johanna confirmed that the second-line endometrial cancer market is an incremental opportunity, similar in size to second-line metastatic triple-negative breast cancer, with approximately 5,000 addressable patients in the U.S.

Umer Raffat from Evercore ISI questioned the potential revenue impact on Gilead's business if a Most Favored Nation (MFN) proposal focused on Medicaid were to be implemented.

Answer

CEO Daniel O’day noted that Gilead is engaged in policy discussions and emphasized the company's strong position with limited patent exposure until 2033. Chief Commercial Officer Johanna Mercier added that the HIV Medicaid business is in the mid-to-lower 20% range and that patient out-of-pocket costs are already minimal. She highlighted the robust safety net of state programs, ADAP, and foundations that ensure patient access.

Umer Raffat of Evercore ISI posed a question about a potential risk factor, asking about the revenue impact on Gilead if the industry were to adopt a Most Favored Nation (MFN) proposal focused on Medicaid.

Answer

Chairman and CEO Daniel O’day acknowledged ongoing discussions with the administration, emphasizing Gilead's strong position with new launches and limited patent exposure. Chief Commercial Officer Johanna Mercier added that Medicaid represents the mid-to-lower 20% range of the HIV business and patient out-of-pocket costs are already minimal. She noted that any legislative impact would likely not be immediate, and stressed that HIV treatment has robust safety nets like ADAP and patient assistance programs to ensure continuous access.

Umer Raffat focused on the anito-cel iMMagine-1 trial data, asking for specifics on the nine reported cases of ICANS, including the incidence of tremors, bradykinesia, or other motor dysfunctions, and the timing of their onset.

Answer

Cindy Perettie, EVP of Kite, responded that she could not provide the specific level of detail for each case on the call. However, she confirmed that they did not observe cases of tremors among those patients and offered to follow up with additional information.

Umer Raffat of Evercore ISI asked about anito-cel's safety profile, specifically whether the lack of delayed neurotoxicity is due to the drug's construct or trial design, and if current data is sufficient to rule out this risk as the patient population expands.

Answer

An executive, likely EVP of Kite Cindy Perettie, stated the company believes the favorable safety profile is due to anito-cel's construct, particularly its compact DD domain. With data from over 140 patients across Phase I and II studies showing no cases of delayed neurotoxicity, the company has increasing confidence that it has a best-in-class construct and looks forward to presenting a larger dataset at the upcoming ASH conference.

Umer Raffat asked about the importance of the eGFR endpoint for felzartamab beyond the primary endpoint, given past imbalances, and questioned why development scope is limited to kidney transplant Antibody-Mediated Rejection (AMR) rather than other organ transplants.

Answer

Priya Singhal, Head of Development, Biogen, stated that while the primary endpoint is the focus, eGFR is a very important secondary endpoint, and the totality of data will matter. She expressed excitement based on the compelling magnitude of effect (greater than 80%) seen in the small Phase II trial. She also confirmed that Biogen is evaluating the impact of addressing CD38 autoantibodies in other transplants and is initiating a sister indication trial for microvascular inflammation. Christopher A. Viehbacher, President and CEO, Biogen, added that they are monitoring physician experimentation with CD38 in other transplants, such as heart transplants.

Umer Raffat asked about the importance of the eGFR endpoint for Felzartamab beyond the primary endpoint, especially given challenges in evaluating it in Phase 2, and the rationale for limiting development to kidney transplant AMR rather than other organ transplants.

Answer

Priya Singhal, Head of Development at Biogen, stated that while the primary endpoint is the focus, the eGFR endpoint is very important, and the totality of data will be considered. She reiterated excitement based on the Phase 2 proof of concept, which showed a compelling >80% magnitude of effect despite being a small trial. She confirmed that Biogen is evaluating the potential for addressing CD38 autoantibodies in other transplants and will provide updates as relevant. She also mentioned initiating a sister indication trial for microvascular inflammation. Christopher A. Viehbacher, President and CEO, added that they are monitoring physicians who are independently experimenting with CD38 in other transplants, such as heart, to gain insights.

Umer Raffat of Evercore ISI asked about Biogen's long-term commitment to Alzheimer's and the status of its relationship with Eisai, specifically referencing a reported arbitration over commercialization allocations in Europe.

Answer

CEO Christopher Viehbacher affirmed Biogen's deep commitment to Alzheimer's and described the relationship with Eisai as "better than it has ever been." He acknowledged a specific disagreement over the European launch is being handled via the contractual arbitration process but stressed it has not impacted the strong overall working relationship across all functions.

Umer Raffat of Evercore ISI asked about Biogen's long-term commitment to Alzheimer's and the status of its relationship with Eisai, referencing a reported arbitration over commercialization allocations in Europe.

Answer

CEO Christopher Viehbacher affirmed Biogen's deep commitment to Alzheimer's and described the relationship with Eisai as "better than it has ever been." He acknowledged the arbitration regarding the European launch but characterized it as a normal part of the contractual process that has not negatively impacted the strong overall working relationship between the two companies.

Umer Raffat asked how a positive readout from Lilly's preclinical Alzheimer's trial would affect AHEAD 345 timelines, and for reflections on M&A choices given the current market valuation.

Answer

Dr. Priya Singhal, Head of Development, expressed confidence in the AHEAD 345 trial design and its 2028 readout, while noting they always evaluate options for earlier data cuts. President and CEO Christopher Viehbacher stated that increased confidence in the internal pipeline lessens the pressure for large M&A, and defended the Reata acquisition as a long-term value driver.

Umer Raffat questioned Biogen's significant R&D investment in lupus, asking how its assets will compete against emerging data from CD19 CAR-Ts and bispecifics.

Answer

Dr. Priya Singhal, Head of Development, argued that while innovative, CAR-T data is from small populations and may not be broadly applicable to the heterogeneous SLE patient base. CEO Christopher Viehbacher added that logistical hurdles with CAR-T and the high failure rate in lupus drug development suggest a need for multiple treatment approaches, positioning Biogen's assets favorably.

Umer Raffat asked about the long-term implications of cash pay as a significant growth driver for obesity products, considering future competition, brand loyalty, and the potential irrelevance of traditional PBM contracts and rebate walls for share retention.

Answer

Patrik Jonsson, President of Lilly International, emphasized building consumer-centric platforms like LillyDirect to help patients seek, start, and stay on treatment. Dave Ricks, Chair and CEO, added that LillyDirect addresses system frictions, allows for evolving consumer experience, and enables scaling and improving access across segments. He noted the strategic interest in leveraging first-party data, exploring pricing opportunities, and subscription models, given the unique nature of this market compared to traditional pharma or even cosmetics.

Umer Raffat from Evercore inquired about the long-term implications of cash pay as a growth driver for Eli Lilly's obesity products, particularly regarding share retention in a competitive landscape where traditional PBM contracts and rebates may not apply.

Answer

Patrik Jonsson, President of Lilly International, emphasized building consumer-centric platforms like LillyDirect internationally to help patients seek, start, and stay on treatment. Ilya Yuffa, President of Lilly USA and Global Customer Capabilities, added that LillyDirect addresses system frictions, and they aim to evolve the consumer experience while growing access across segments, expecting both to play important roles in scaling and improving the experience over time. Mike Czapar, SVP of Investor Relations, directed the question.

Umer Raffat from Evercore ISI questioned the orforglipron data, pointing out a potential discrepancy between different efficacy estimators compared to oral semaglutide and asking if a higher dose might be needed.

Answer

Dr. Daniel Skovronsky, Chief Scientific Officer, responded that the overall profile landed where a GLP-1 monotherapy would be expected. He cautioned against making difficult cross-trial comparisons, stating that he does not see the numerical debate as an issue for real-world adoption by patients and physicians.

Umer Raffat asked a two-part question on orforglipron's safety profile, seeking confirmation of no numerical imbalance on liver enzyme (ALT) elevations above 5x the upper limit of normal and clarification on how to interpret the diarrhea rates heading into the longer-duration obesity trial.

Answer

Dr. Dan Skovronsky, Chief Scientific Officer, stated that the overall liver safety profile, including mean changes and excursions, showed nothing of concern and looked similar to placebo. Regarding diarrhea, he acknowledged the rates were higher but noted the placebo rate was also higher, suggesting variability by trial region. He emphasized that the most telling indicator of tolerability is the low rate of discontinuations due to adverse events.

Umer Raffat of Evercore ISI noted the many new Phase III trials for Orforglipron and asked about the rationale for not initiating a cardiovascular outcomes trial.

Answer

Executive Daniel Skovronsky responded that the current focus is on broad primary care applications where an oral drug has advantages. He acknowledged an outcomes trial is an interesting idea being explored globally but highlighted the increasing difficulty of running placebo-controlled studies.

Umer Raffat of Evercore ISI asked if the launch of a cash-pay single vial option via LillyDirect or any changes in distributor incentives could have influenced the channel inventory drawdown in the quarter.

Answer

Patrik Jonsson, President of Lilly Cardiometabolic Health and Lilly USA, noted the LillyDirect self-pay option had a limited, low single-digit impact on Q3 prescriptions. An executive then gave a direct "no" to both questions, confirming there were no changes to distributor terms and no perceived impact on retail stocking from the LillyDirect launch.

Umer Raffat from Evercore ISI asked for clarification on the FDA's request for voluntary withdrawal of Tavneos, specifically inquiring about the underlying reasons, any prior litigation or correspondence, and the implications of readjudicating primary endpoint results for nine patients.

Answer

Robert Bradway, CEO, and James Bradner, EVP of Research and Development, explained that Tavneos (avacopan), an oral complement C5a receptor blocker for ANCA-associated vasculitis, was acquired from ChemoCentryx in 2022. Bradner stated that Amgen was surprised by the FDA's January 16th request for voluntary withdrawal, which stemmed from concerns about ChemoCentryx's process for readjudicating primary endpoint results for 9 of 331 patients in the ADVOCATE Phase III study. Discussions with the FDA are ongoing.

Umer Raffat sought clarification on the FDA's request to pull the ChemoCentryx drug (Tavneos), inquiring about the underlying reasons, potential litigation, and specifics regarding the readjudication of 9 patients and its impact on primary endpoints.

Answer

Robert Bradway, CEO, and James Bradner, EVP of Research and Development, provided background on Tavneos for ANCA-associated vasculitis and confirmed the FDA's voluntary withdrawal request on January 16th. They stated concerns were raised about a process followed by ChemoCentryx to readjudicate primary endpoint results for nine of the 331 patients from the ADVOCATE Phase 3 study, and discussions with the FDA are ongoing.

Umer Raffat sought clarification on the Repatha Vesalius CVOT, asking if the anticipated year-end readout is driven by a fixed time follow-up or by reaching a predefined number of cardiovascular events.

Answer

James Bradner, EVP of R&D, provided a direct answer, stating that the study's readout is "purely based on accumulated events or event rate."

Umer Raffat from Evercore ISI asked about the market dynamics for UPLIZNA in myasthenia gravis, suggesting that the real-world cost of competing FcRn inhibitors may be higher than perceived. He questioned if payers are aware of this and what market share UPLIZNA could realistically achieve.

Answer

James Bradner, EVP of R&D, highlighted UPLIZNA's strong, durable efficacy, steroid-sparing potential, and convenient 6-month dosing. Murdo Gordon, EVP of Global Commercial Operations, added that while payer policies follow the label, real-world evidence could eventually demonstrate a cost advantage for UPLIZNA. Management did not provide a specific market share target.

Umer Raffat asked a two-part question on MariTide: first, whether dose titration could mitigate the vomiting profile seen in Phase I, and second, if there's any reason to expect the weight loss plateau to occur later than the typical 6-7 months observed in other GLP-1 trials.

Answer

EVP of R&D James Bradner clarified that the Phase I study did not include dose titration, limiting its predictive value on that front. He stated that the company is focused on the upcoming Phase II data. Regarding the weight loss plateau, he noted it will be an interesting observation to learn from the full 52-week data.

Umar Raffat asked if the decision to pursue a 9.6 mg monthly dose for the GLP-1 monotherapy was a reaction to the current data or had been previously contemplated, and inquired about the emerging tolerability data for the GLP-1 plus amylin combination, specifically if it could be delivered in a single pill.

Answer

Chief Scientific Officer Chris Boshoff clarified that the 9.6 mg monthly dose is equivalent to the 2.4 mg weekly regimen already being tested in VESPER-4, a decision based on modeling-based meta-analysis. He stated that the GLP-1 plus amylin combination is a monthly subcutaneous injection, not a pill, but mentioned Pfizer's oral portfolio includes GLP-1 and GIP, not amylin. He added that updated data for the amylin plus GLP-1 combination would be presented at ADA.

Umer Raffat asked if Pfizer would evaluate imminent new data for MedSera, such as monthly transition, GI tolerability, and Amlin plus GLP early combo data. He also inquired about a phase two B trial for an oral drug in atopic dermatitis, asking if it was a STAT6 inhibitor.

Answer

Albert Bourla, Chairman and CEO, confirmed Pfizer's eagerness to see any publicized MedSera data, expecting it to be positive. Chris Boshoff, Chief Scientific Officer and President of Research and Development, confirmed the atopic dermatitis drug (PF9820) is a STAT inhibitor. He highlighted Pfizer's differentiated INI portfolio and noted the STAT6 inhibitor is an early phase 2, potentially first-in-class oral, with updates expected in 2026 after dose and formulation optimization.

Umer Raffat asked if Pfizer would evaluate imminent new data from Metsera, such as monthly transition, GI tolerability, and amylin plus GLP combo data. Separately, he inquired if an oral drug in atopic dermatitis (PF-9820) is a STAT6 inhibitor and its magnitude of inhibition.

Answer

Albert Bourla, Chairman and CEO, Pfizer, confirmed that Pfizer is eager to review any new Metsera data that becomes public. Chris Boshoff, Chief Scientific Officer and President of Research and Development, Pfizer, confirmed that PF-9820 is indeed a STAT6 inhibitor, part of Pfizer's differentiated I&I portfolio, and they are currently optimizing its dose and formulation, with updates expected in 2026. Albert Bourla, Chairman and CEO, Pfizer, also contributed.

Umer Raffat from Evercore ISI asked if the administration is pushing back on the industry's licensing of innovation from China and whether an interim analysis prompted the sample size reduction for the SV (B6A) lung cancer trial.

Answer

CEO Albert Bourla noted less sensitivity from Congress on in-licensing technology from China for U.S. development and manufacturing, as seen with the 3S Bio deal. Chief Scientific Officer Chris Boshoff clarified that the study size for the SV trial was recalculated based on emerging data from other ongoing trials, not from an unblinding of the Phase 3 study.

Umer Raffat of Evercore ISI asked if the U.S. administration is pushing back on the industry's licensing of innovation from China, and whether an interim look prompted the sample size reduction in the SV lung cancer trial.

Answer

Chairman & CEO Albert Bourla clarified that government sensitivity is higher for technology transferred to China, not for licensing science from China for U.S. development, citing the 3S Bio deal. Chief Scientific Officer Chris Boshoff confirmed the Phase 3 SV trial was not unblinded and that sample size recalculations are based on emerging data from other ongoing studies.

Umer Raffat asked if OpEx cuts could offset upcoming LOE pressure to protect the dividend, whether the dividend commitment would hold under a significant tariff scenario, and about the rationale for a friendly vs. unfriendly country distinction for pharma tariffs.

Answer

CFO Dave Denton confirmed that productivity improvements are designed to bolster operating margins through the LOE period and that the dividend commitment is 'steadfast.' CEO Albert Bourla highlighted the $7.7 billion cost savings target by 2027 and asserted that his discussions with the government indicate a clear focus on national security concerns related to non-friendly countries.

Umer Raffat asked for specifics on two pipeline assets: whether the oral GIP antagonist achieved 4-5% weight loss in its Phase I study, and if the next-generation >30-valent pneumococcal vaccine uses more than one carrier protein.

Answer

Chief Scientific Officer Mikael Dolsten did not disclose specific Phase I weight loss data but highlighted the GIP antagonist's potential to enhance efficacy when combined with a GLP-1. Regarding the vaccine, he declined to detail the carrier protein strategy but emphasized that the platform includes significant technical improvements, such as enhanced immunogenicity for serotype 3 in the 25-valent version.

Umer Raffat asked Rob Davis to balance the $70 billion non-risk-adjusted revenue opportunity from the current pipeline and Merck's historical track record of acquiring $5 billion revenue opportunities for around $10 billion or less, against recent press speculation about a much larger acquisition.

Answer

Rob Davis, Chairman and CEO, declined to comment on market rumors but reiterated pride in the $70 billion commercial potential, which is $20 billion higher than a year ago. He emphasized Merck's consistent BD strategy: focusing on scientific advancement, unmet needs, strategic alignment, and value creation, always with discipline. He noted that while the sweet spot is up to $15 billion, Merck would consider larger deals for the right scientific opportunity, applying the same disciplined approach.

Umer Raffat asked Rob Davis to balance the stated $70 billion non-risk adjusted revenue opportunity for the current pipeline and Merck's track record of acquiring $5 billion revenue opportunities for under $10 billion, against recent press rumors of a large deal.

Answer

Rob Davis, Chairman and CEO, Merck & Co. Inc, declined to comment on market rumors but reiterated confidence in the $70 billion commercial potential, which is $20 billion higher than a year ago. He emphasized Merck's disciplined business development strategy, focusing on scientific advancement, unmet need, strategic alignment, and value creation. He stated that while opportunities up to $15 billion are a sweet spot, Merck would consider larger deals for the right scientific fit, maintaining the same disciplined approach.

Umer Raffat of Evercore ISI inquired about the PD-1/VEGF bispecific antibody developed with Kelun-Biotech (referred to as Lenovo), asking for confirmation that the ongoing open-label Phase 1 study is on track to support the start of a registration-enabling trial soon.

Answer

Dr. Dean Li, President of Merck Research Laboratories, confirmed that Merck has been interested in this dual-signaling space since 2018. He stated that the program with Kelun-Biotech is proceeding exactly as planned according to the original partnership agreement.

Umer Raffat from Evercore ISI inquired about the PD-1/VEGF bispecific collaboration with Kelun-Biotech (Lenovo), asking if the program is on track to start a potentially registrational Phase 2 study soon.

Answer

Dr. Dean Li, President of Merck Research Labs, confirmed that the program is proceeding exactly as planned. He noted Merck's long-standing interest in this dual signaling space, dating back to 2018.

Umer Raffat from Evercore ISI asked a direct question about whether Merck intends to keep the intellectual property for the subcutaneous formulation of KEYTRUDA in the U.S.

Answer

CEO Robert Davis declined to answer the question, stating that the company has not disclosed the location of the IP for subcutaneous KEYTRUDA and preferred not to discuss it for proprietary reasons.

Umer Raffat questioned the growth cadence for WINREVAIR in 2025, noting it tracked slightly weaker than consensus and asking if a 100% year-over-year growth rate from Q4 trends was achievable.

Answer

CEO Robert Davis affirmed the company's confidence in WINREVAIR's growth potential, stating that its importance to the company remains unchanged. He noted that January's performance was returning to expected levels and that the company foresees WINREVAIR as a strong growth contributor in 2025, supported by strong underlying fundamentals.

Umer Raffat of Evercore ISI followed up on GARDASIL in China, asking if the current shipping rate is meeting demand and how the $2-$3 billion forecast for 2025 accounts for both inventory work-down and potential local competition.

Answer

CEO Robert Davis stated that while inventory at their partner Zhifei remains high, overall channel inventory in China has decreased. He clarified that Merck is intentionally shipping below end-market demand to facilitate this inventory reduction. The $2-$3 billion forecast for the coming years incorporates these inventory dynamics as well as the potential for local competition.

Umer Raffat questioned the sales and marketing spend in Q4 2025, noting it as potentially the highest in three years amidst transformation. He asked if the Royalty Pharma $75 million payment for phase II-B is embedded in the 2026 EBITDA guidance and about expectations for Teva's vitiligo scores compared to OPZELURA's 30% facial VASI 75.

Answer

CFO Eli Kalif stated that one-third of the $75 million Royalty Pharma payment is embedded in 2026 EBITDA, backloaded, with no other TL1A milestones assumed. He explained that sales and marketing spend, while appearing higher, is part of strategic investment in growth engines (AUSTEDO, Olanzapine launch), with G&A reductions offsetting overall OpEx. CEO Richard Francis emphasized the value of programs driving EBITDA. Head of R&D and CMO Eric Hughes expressed hope for competitive vitiligo data, stressing the need for systemic therapy over topical treatments like OPZELURA.

Umer Raffat of Evercore ISI questioned the significant increase in sales and marketing spend in Q4 2025, noting it as the highest in three years amidst ongoing transformation, and asked if the Royalty Pharma $75 million payment for Phase 2b is fully embedded in the 2026 EBITDA guidance, along with any other milestones. He also sought expectations for vitiligo data, specifically if Teva aims to track meaningfully above Opzelura's 30% facial VASI 75 score, given Royalty Pharma's focus on vitiligo over celiac.

Answer

CFO Eli Kalif clarified that the Royalty Pharma payment is spread over 2026 and 2027, with one-third backloaded in 2026, and no other milestones are embedded in the EBITDA guidance. He explained the sales and marketing increase (to 16% of revenue) is due to strategic investments in growth drivers like AUSTEDO and the upcoming olanzapine launch, offset by G&A reductions. Head of R&D Eric Hughes expressed a desire for competitive vitiligo data, emphasizing the need for systemic therapy over topical treatments like Opzelura.

Umer Raffat of Evercore ISI inquired about the potential discount range for AUSTEDO under IRA negotiations and the expected impact from recently announced European tariffs.

Answer

President and CEO Richard Francis stated that Teva will not comment on ongoing IRA negotiations with CMS. Regarding tariffs, both Francis and EVP & CFO Eli Kalif explained that Teva has a flexible supply chain with limited China exposure, has already absorbed confirmed tariffs into its 2025 guidance, and is awaiting further details on the ambiguous European announcements.

Umer Raffat of Evercore ISI asked for guidance on modeling the Vertex royalty stream during arbitration, questioned why the Revolution Medicines deal tranches were not tied to the lung cancer readout, and sought clarity on whether the next-generation SPINRAZA is covered by the existing royalty agreement.

Answer

CFO Terrance Coyne advised that for now, investors should assume the 4% royalty rate Vertex is currently paying, while reiterating the company's belief it is owed 8%. Head of Research & Investments Marshall Urist explained the RevMed deal structure was a collaborative effort to meet the partner's capital needs and later confirmed that the next-generation SPINRAZA is included in their royalty agreement.

Umer Raffat questioned the choice of the 100mg dose for casdatifan in Phase III, the patient makeup of the post-IO cohort for the ASCO presentation, and whether the focus of the data would be on safety or demonstrating superior efficacy.

Answer

CEO Terry Rosen explained the 100mg dose was chosen after FDA discussions, as it appears to be on the asymptote for efficacy with a very safe profile. President Juan Jaen clarified the post-IO cohort is a mix of patient types and that the goal is to demonstrate an improvement in both safety and efficacy, as the two are linked to keeping patients on therapy.

Representing Umer Raffat from Evercore ISI, an analyst asked for confirmation on VOQUEZNA's manufacturing location regarding potential tariffs and for perspective on the competitive landscape with Sebela's P-CAB data.

Answer

President and CEO Steven Basta clarified that the finished product is manufactured in the U.S., avoiding tariffs, and while the API is international, existing inventory and low relative cost would make any tariff impact non-material. Regarding competition, he suggested a second P-CAB entrant could grow the overall category, benefiting Phathom, which holds a first-to-market advantage.

Umer Raffat of Evercore ISI questioned the non-inferiority margin for the upcoming infant data, the potential outcomes for historically low-performing serotypes like 3 and 12F, and whether any preliminary post-dose 4 booster data would be available.

Answer

CEO Grant Pickering confirmed they will use the 15-point delta for the Phase II analysis, consistent with precedent, to predict success against the 10-point registration hurdle in Phase III. EVP & COO Jim Wassil expressed confidence in serotypes 3 and 12F based on strong adult data, but noted that even a few misses would still result in a strong product profile. Pickering firmly stated that no post-dose 4 data would be unblinded early to maintain data integrity, with the full dataset expected later in the year.

Asked about long-term mortality data from previous trials (PRONTO, VITAL), the cause of deaths in the VITAL standard-of-care arm, and expectations for baseline dFLC levels in the current Phase III trial.

Answer

The PRONTO and VITAL trials are no longer ongoing, so there is no long-term follow-up data. In PRONTO, there were 6 deaths on placebo vs. 3 on birtamimab. In VITAL, the focus was on the hazard ratio of 0.413 over 9 months. Regarding treatment-emergent deaths, the endpoint was all-cause mortality, so all deaths were counted in the analysis. The question on dFLC was not directly answered.

Umer Raffat of Evercore ISI questioned long-term mortality trends from the completed PRONTO and VITAL trials, the drivers of treatment-emergent deaths in the VITAL standard-of-care arm, and the expected baseline dFLC in the current Phase III trial.

Answer

President and CEO Gene G. Kinney explained that since the PRONTO and VITAL trials are no longer ongoing, no long-term mortality follow-up is available, but he provided final death counts for PRONTO. Chief Development Officer Chad Swanson clarified that since the VITAL endpoint was all-cause mortality, all deaths were counted in the analysis.

Umer Raffat of Evercore ISI asked about visibility on long-term mortality trends from the completed Phase II PRONTO and Phase III VITAL trials, the cause of treatment-emergent deaths in the VITAL standard-of-care arm, and the expected median dFLC at baseline in the current Phase III trial.

Answer

President and CEO Gene G. Kinney stated that since the PRONTO and VITAL trials are no longer ongoing, there is no long-term mortality follow-up data available. He did reiterate the hazard ratio of 0.413 in VITAL's Mayo Stage IV cohort. Chief Development Officer Chad Swanson clarified that since the endpoint was all-cause mortality, all deaths were counted in the analysis.

Umer Raffat asked about visibility on long-term mortality trends from the completed Phase II PRONTO and Phase III VITAL trials, the drivers of treatment-emergent deaths in the VITAL control arm, and the expected median dFLC at baseline in Phase III.

Answer

CEO Gene G. Kinney explained that since the PRONTO and VITAL trials are no longer ongoing, there is no long-term follow-up data. He recounted the final death counts for PRONTO and the hazard ratio for VITAL. Chief Development Officer Chad Swanson clarified that for the VITAL trial, the endpoint was all-cause mortality, so all deaths were counted in the analysis.

Speaking for Umer Raffat, Jonathan Miller asked about the evolution of CARVYKTI's neurotoxicity profile and the potential for further safety improvements. He also requested an update on the autoimmune program's enrollment and data timeline.

Answer

CMO Mythili Koneru highlighted a significant decrease in delayed neurotoxicity in the CARTITUDE-4 trial due to better patient management, noting that monitoring ALC and using steroids can further mitigate risk. CEO Ying Huang confirmed the autoimmune program has begun enrollment, with initial data expected in 2025.

Umer Raffat of Evercore ISI asked how the wind-down of the German Pandemic Preparedness Agreement (PPA) affects COVID vaccine timelines, questioned the development status of different COVID vaccine strains, and sought clarification on why the Acuitas litigation prompted a stay on all 10 patents, not just the four in question.

Answer

CEO Alexander Zehnder clarified the PPA wind-down does not impact timelines. CDO Myriam Mendila explained the vaccine strain selection was based on the prevalent variant at the time of study design. Head of IP Marcus Dalton noted that while Acuitas only targeted four patents, the magistrate judge recommended a stay on all ten, a recommendation CureVac is currently objecting to.

Umer Raffat from Evercore ISI asked how the wind-down of the German Pandemic Preparedness Agreement (PPA) impacts COVID vaccine timelines, questioned the strain selection in the current COVID trial (BA.4/5 vs. XBB.1.5), and sought clarification on why all 10 patents in the Pfizer/BioNTech litigation were stayed due to the Acuitas claim on only four.

Answer

CEO Alexander Zehnder clarified the PPA wind-down has no impact on timelines. CDO Myriam Mendila explained the trial used the BA.4/5 strain as it was prevalent at study design, with future trials to use updated strains. Head of IP Marcus Dalton stated that the stay on all 10 patents was a magistrate judge's recommendation, not a final decision, and that CureVac is currently objecting to it.