Pfizer's Q3 2025: Contradictions Emerge in Pricing Strategy, Dividend Priorities, Metsera Acquisition, and Revenue Assumptions

Date of Call: November 4, 2025

Financials Results

• Revenue: $16.7B in Q3 2025, down 7% operationally YOY (vs Q3 2024)
• EPS: Reported diluted EPS $0.62; adjusted diluted EPS $0.87 for Q3 2025; full-year 2025 adjusted EPS guidance raised/narrowed to $3.00–$3.15 (midpoint up ~$0.08); Q3 results included ~ $0.20 headwind from acquired in-process R&D (3SBio)
• Gross Margin: Adjusted gross margin ~76% in Q3 2025 (reflecting product mix); mid- to upper-70s historically excluding Comirnaty

Guidance:

• Full-year 2025 revenue range reiterated at $61B–$64B.
• Full-year 2025 adjusted diluted EPS guidance raised and narrowed to $3.00–$3.15 (midpoint up ≈$0.08).
• Adjusted R&D expected to be $10B–$11B for 2025; adjusted S&A unchanged; effective tax rate ~11%.
• Guidance assumes favorable FX and incorporates current lower COVID trends (COVID volatility could move revenue within range).
• Company expects to provide 2026 guidance likely by year-end.

Business Commentary:

• Revenue Decline Due to COVID-19 Products:
• Pfizer reported revenues of $16.7 billion for Q3 2025, a 7% operational decrease year-over-year, primarily due to declines in COVID-19 products, including Paxlovid and Comirnaty.

• This was due to reduced demand attributed to lower disease incident levels and previous government stockpiling impacts.

• Strong Non-COVID Product Performance:

• Pfizer's non-COVID products showed 4% operational growth year-over-year, driven by strong contributions from Eliquis, the Vyndaqel family, and Nurtec.

• Growth was supported by strategic focus, effective commercial strategies, and strong market leadership in key therapeutic areas like cardiovascular and metabolic health.

• Strategic Agreements and Business Development:

• Pfizer's agreement with the U.S. government provided clarity for future investment and growth, and the proposed acquisition of Metsera was backed by an early termination of the HSR waiting period by the U.S. FTC.

• These agreements reflect Pfizer's commitment to strategic innovation and growth in key therapeutic areas, particularly in obesity and cancer treatment.

• R&D Pipeline Progress:

• Pfizer highlighted significant progress in its R&D pipeline, including encouraging data from Phase II and III trials in cancer and cardiovascular diseases, such as the PD-1 VEGF bispecific SSGJ-707 and Padcev.
• The advances are attributed to Pfizer's deep experience in multi-specific antibody therapeutics and strategic positioning of its pipeline in high-growth therapeutic areas.

Sentiment Analysis:

Overall Tone: Positive

• Management reiterated confidence and raised full-year adjusted EPS guidance to $3.00–$3.15, highlighted 'solid financial performance' and 'strong gross margin performance', and emphasized R&D/pipeline progress (multiple late‑stage readouts, licensing and BD activity) while acknowledging COVID-related revenue pressure (Paxlovid/Comirnaty declines).

Q&A:

• Question from Vamil Divan (Guggenheim Securities): Vyndamax saw a little sequential decline given new competition — can you comment on pricing and market-share dynamics? And on Padcev: commercial uptake was a bit below expectations this quarter; how do you expect the muscle-invasive indication to impact uptake?
  Response: Vyndamax: volume and demand remain strong with market-share leadership, but two gross‑to‑net headwinds (IRA manufacturer rebates and payer contracting) reduced net sales; expect continued volume growth. Padcev: underlying demand strong; Q2 had a onetime wholesaler transition bump so Q3 comps look softer, expect return to growth and potential material upside with the muscle‑invasive bladder cancer expansion (~up to ~22,500 additional patients).

• Question from David Risinger (Leerink Partners): Could you comment on the legal process ahead regarding Metsera and timing for courts to hear Pfizer's antitrust arguments against Novo's bid?
  Response: Limited comment due to pending legal actions; Pfizer believes Novo's proposal is anticompetitive/illegal and is pursuing all legal remedies to enforce its merger agreement and block a superior proposal it views as unlawful.

• Question from Asad Haider (Goldman Sachs): If Metsera doesn't work out, what's the BD plan? Early framing for 2026 guidance, OpEx with/without Metsera, and color on dilution from the MFN deal with the administration?
  Response: Pfizer retains significant BD capacity (≈$13B noted YTD), will remain active across geographies to deploy capital; 2026 framing is premature but Metsera and 3SBio carry near‑term dilution (Metsera~$0.16 dilutive to 2026 adjusted EPS; 3SBio~$0.05 in 2026); full 2026 assumptions to be provided with year‑end guidance.

• Question from Geoffrey Meacham (Citigroup): How do you rank investments to meet MFN/manufacturing commitments versus operational cost‑efficiency programs given multi‑year time frames?
  Response: Management will pursue both: invest in U.S. manufacturing capacity tied to the government agreement while continuing manufacturing optimization and efficiency programs; additional detail to be provided with 2026 guidance.

• Question from Terence Flynn (Morgan Stanley): Why was MagnetisMM‑5 pushed into 2026 (timing vs competitor), and any onetime items in Paxlovid price per script for the quarter?
  Response: MagnetisMM‑5 is event‑driven so timing can shift if events accrue slower; no substantive comment beyond that. Paxlovid: no material price change — observed channel‑mix differences but no one‑time pricing item to highlight.

• Question from Akash Tewari (Jefferies): On the EZH2 program (Phase III in CRPC), what's the confidence in target exposure after food‑effect studies and expectations around OS benefit?
  Response: Management confident in the selected Phase III dose — randomized and food‑effect data support comparable exposure with the Phase‑III dosing and reduced GI AEs; three Phase III studies are ongoing with a near‑term readout expected for one cohort.

• Question from Kerry Holford (Berenberg): You reiterated $61–$64B revenue guidance while earlier citing ~$9B COVID sales for the year but only ~$4B YTD — is $9B still achievable and what fills the gap?
  Response: COVID demand is volatile; the revenue range allows for either modest COVID uptake (closer to low end) or a rebound (higher end). Non‑COVID growth (Eliquis, Vyndaqel, Nurtec, newly launched/acquired products) plus FX assumptions underpin the reiterated range; EPS guidance was derisked for lower COVID trends.

• Question from Evan Seigerman (BMO): If Metsera closes, what must you consider to continue growing the dividend and delever, and when will share repurchases resume?
  Response: Priority remains delevering back to target after the deal; maintain and grow the dividend; share repurchases are not a near‑term lever — repurchases will resume once leverage is restored and business priorities are appropriately funded.

Contradiction Point 1

Pricing Strategy and MFN Impact on International Revenue

It involves Pfizer's approach to pricing strategy and its impact on international revenue under the MFN agreement, which could affect the company's revenue projections and investor expectations.

What are the international revenue implications of the MFN agreement, and do you have quantitative metrics for 2026? - Christopher Schott (JPMorgan)

2025Q3: International prices may adjust, but we aim to avoid affecting U.S. pricing. - Albert Bourla(CEO)

Does Pfizer expect developments this year regarding President Trump's Medicaid impact letter? What is your position on recent developments with MFN, tariffs, and CDC recommendations for COVID vaccines? - Trung Chuong Huynh (UBS)

2025Q2: We look forward to working with the administration to explore additional ways to lower drug prices in the United States and abroad, particularly through the use of internationally referenced pricing and competitive international pricing. - Albert Bourla(CEO)

Contradiction Point 2

Dividend and Share Repurchase Priorities

It involves Pfizer's priorities regarding dividend growth and share repurchases, which are crucial for investor understanding of capital allocation strategy.

Okay, let's tackle this query. The user wants me to simplify the question from a conference call while keeping the original meaning. The original question is: "How do you plan to continue growing the dividend and when will you consider share repurchases given current BD activity?"First, I need to identify the key elements. The main parts are about growing the dividend and considering share repurchases, with a mention of current BD (Broker-Dealer) activity. The user wants it concise and in American English.The first part, "How do you plan to continue growing the dividend," can be shortened to "How do you plan to continue growing the dividend?" which is already pretty concise. The second part is "when will you consider share repurchases given current BD activity?" Here, "given current BD activity" might be redundant if the context is already about the company's current situation. Maybe it's better to just ask when they'll consider share repurchases, assuming the current BD activity is part of the consideration. So, "when will you consider share repurchases?" Putting it together: "How do you plan to continue growing the dividend and when will you consider share repurchases?" I need to check if removing "given current BD activity" changes the meaning. The original question is asking about the timing of share repurchases in light of current BD activity. If the simplified version omits that, does it still make sense? In a conference call context, the current BD activity is part of the ongoing discussion, so maybe it's implied. If the user wants to keep the BD activity reference, perhaps it's better to include it. Let me see. The original question is asking two things: dividend growth plan and when share repurchases will be considered, considering BD activity. If the BD activity is a factor in the repurchase consideration, then the simplified question should include that. So, maybe the correct simplification is: "How do you plan to continue growing the dividend and when will you consider share repurchases given current BD activity?" But the user wants it as concise as possible. However, the instruction says not to change the original meaning. Since the original question includes "given current BD activity," I should retain that part. Wait, the example provided in the user's message might help. The user says, "you consider share repurchases given current BD activity." The BD activity is part of the consideration. So, the simplified question should include "given current BD activity." But the user also wants to remove unnecessary words. Is "given current BD activity" necessary? If the answer is that the company is currently engaged in BD activity, then the question is asking when they'll consider repurchases considering that activity. If we remove it, the question is more general. But the original question is specific to the current BD activity. Therefore, the correct simplified version should include it. Therefore, the final simplified question is: "How do you plan to continue growing the dividend and when will you consider share repurchases given current BD activity?" I need to check if there's any redundancy. "Given current BD activity" is a clause that provides context for the share repurchase consideration. Since the user wants to keep the original meaning, it's important to include that. The answer should be the same as the original question but more concise. The original question is two parts, so the simplified version should also have two parts. I think that's the correct approach. The user might have wanted to make it shorter, but the key is to not alter the meaning. So the final answer is the original question but with any unnecessary words removed. Let me check the original again. "How do you plan to continue growing the dividend and when will you consider share repurchases given current BD activity?" Is there any way to make it shorter without losing meaning? Maybe "How do you plan to grow the dividend and when will you consider share repurchases given current BD activity?" Changing "continue growing" to "grow" might be acceptable if the context implies ongoing growth. However, the original uses "continue," so if the company has already been growing the dividend, "continue" is important. But if the user wants it as concise as possible, maybe "grow" is better. However, the user's instruction is to not change the original meaning. Therefore, "continue growing" should be kept. So the final simplified question is the same as the original but with any unnecessary words removed. The original seems already concise. Wait, the user's example might have a longer version. Let me see the example the user provided. The original question is a bit wordy, but in this case, the question is already pretty concise. Maybe there's a way to make it shorter. For example, "How do you plan to grow the dividend and when will you consider share repurchases given current BD activity?" That's shorter. But does it change the meaning? The original uses "continue growing," which implies ongoing growth. If the company is already growing the - Evan Seigerman (BMO)

2025Q3: We prioritize R&D and key product investments. Share repurchases are a secondary leverage for now, as we focus on strategic investments and dividend growth. - David Denton(CFO)

Does Pfizer expect any impact this year from President Trump's letter on MFN and Medicaid? What is your current stance on recent developments regarding MFN, tariffs, and CDC's COVID vaccine recommendations? - Trung Chuong Huynh (UBS)

2025Q2: We are very pleased with our capital allocation discipline and the progress we've made in our leverage, working capital management, buyback and dividend policy. - David M. Denton(CFO)

Contradiction Point 3

Commitment to Maintaining Dividends

It involves the company's commitment to maintaining and growing its dividend, which is a crucial aspect of investor relations.

How do you plan to continue growing the dividend and when will you consider share repurchases given current BD activity? - Evan Seigerman (BMO)

2025Q3: The dividend authorized remains at $0.68 per share for Q3. We believe it is sustainable and we are committed to growing it consistently. But it's - it's important to stress again that we are prioritizing R&D and key product investments. - David Denton(CFO)

What is Pfizer's commitment to maintaining and increasing the dividend amid tariff uncertainties? What are the expectations for Paxlovid utilization with lower-than-expected infection rates? - Vamil Divan (Guggenheim)

2025Q1: We remain committed to returning capital to shareholders, and we continue to prioritize our growing our dividend. And we have a strong track record of having a dividend growth. And we've done that in spite of all the uncertainties around us. - Albert Bourla(CEO)

Contradiction Point 4

Metsera Acquisition Justification

It reveals differing perspectives on the strategic importance of the Metsera acquisition, which could impact Pfizer's financial planning and shareholder perception.

What are the unique benefits of the drug pricing agreement, and why continue with the Metsera acquisition? - Steve Scala (TD Cowen)

2025Q3: Our agreement provides strategic advantages, and acquiring Metsera aligns with our strategy to compete effectively in obesity. It's about competitive edge, not just being a player. - Albert Bourla(CEO)

How is Pfizer approaching business development in light of its deleveraging and capital allocation strategy? - Christopher Schott (JPMorgan)

2024Q4: We remain committed to BD for innovation, investing aggressively across therapeutic areas. - David Denton(CFO)

Contradiction Point 5

COVID-19 Sales Targets and Revenue Assumptions

It involves changes in financial forecasts for COVID-19 sales, which are crucial for revenue projections and investor expectations.

Is the $9 billion pandemic sales target still achievable, and what other assets could fill the gap? - Kerry Holford (Joh. Berenberg, Gossler & Co. KG)

2025Q3: The low-end revenue guidance assumes modest COVID uptake. Other assets like non-COVID products and strong vaccine performance contribute to overall sales targets. - David Denton(CFO)

Can you discuss Pfizer's business development strategy considering its deleveraging process and capital allocation approach? - Christopher Schott (JPMorgan)

2024Q4: For FY '25, we're establishing an adjusted effective revenue guidance range for our 2025 products and a low-end revenue guidance for 2025 COVID products. - David Denton(CFO)