PFIZER Q2 FY26 earnings call PFE

Pfizer's strategic priorities are centered on maximizing value from key transactions like Seagen, Metsera, and Biohaven. Acquired products saw 25% operational revenue growth, excluding one-time items^📎. The legacy Seagen portfolio in the U.S. grew 21% year-over-year, exceeding initial expectations. Metsera's berobenatide, an ultra-long-acting GLP-1, is targeting a first approval in 2028 with 10 Phase III studies planned this year. Biohaven's Nurtec continues to lead the oral CGRP class in prescriptions, with ongoing Phase III trials for menstrual and chronic migraine.

The R&D pipeline achieved 3 regulatory approvals, 6 key data readouts, and 8 pivotal study starts in the first half of the year. Oncology is a key strength, with a dozen late-stage studies initiated and 6 regulatory approvals in the past two years. Key assets like Padcev received expanded FDA approval for muscle-invasive bladder cancer, and mivrometostat, an EZH2 inhibitor, is in Phase III for prostate cancer with a readout expected in Q4. The company is also advancing next-wave ADC breakthroughs and a PD-1 x VEGF bispecific antibody, 4404, with promising early data.

Pfizer is expanding its cost improvement programs, now expecting approximately $9.7 billion in total net cost savings through 2029. This includes $6.7 billion from productivity enhancement (up $1 billion) and $3 billion from manufacturing optimization (up $1.5 billion). These initiatives are designed to enhance operating efficiency, support margin expansion, and enable continued investment in innovation. Adjusted gross margin for Q2 was 76%, reflecting product mix and cost control.

AI is viewed as a structural transformation opportunity to accelerate R&D, improve productivity, and enhance competitive positioning. The company is already seeing benefits in manufacturing cost reduction and yield expansion, as well as increased effectiveness of its commercial field force and marketing. The ambition is to build an AI-native R&D organization, continuously informing decisions from target discovery through medical evidence.

The capital allocation strategy focuses on reinvesting in the business, maintaining and growing the dividend over time^⏳, and preserving optionality for future value-enhancing actions like share repurchases. In H1 2026, $5.5 billion was invested in R&D, and $4.9 billion was returned to shareholders via dividends. The company has approximately $6 billion in remaining business development capacity, with a focus on bolt-on acquisitions in oncology, immune-inflammation, primary care (obesity), and vaccines.

Q2 FY26 COVID-19 revenues were lower than expected due to low infection levels, primarily impacting Paxlovid. Full-year COVID-19 revenue guidance was revised down to $4 billion from $5 billion. Comirnaty sales are expected to occur mostly towards year-end, consistent with vaccination season. The company emphasizes that the non-COVID business's strong performance has offset the shortfall from COVID products this year.