From time to time across the first two years of Screaming into the Void, I’ve briefly written about some of the ‘odd jobs’ that come along with Writing For Other People. It may or may not surprise you that one of these jobs involved transcription. (Another job lost to AI these days.) Believe it or not, I loved transcribing government committee meetings and hearings — because I got to “see how the sausage is made”, so to speak. (This perhaps explains my ability to ‘translate’ politician-speak into English.)
Another event I enjoyed transcribing were investor calls for large businesses. Topics covered in these calls range from current and projected earnings to large-scale plans to shift focus. Often, the CEO or similar bigwig delivers prepared remarks and then opens the line up for questions from investors — and these investors are EXTREMELY interested in “translating” those prepared remarks into “common-sense” questions. (Something like what I do with Biden’s speeches.) After all, at this level of the game, even a simple misunderstanding can cost billions of dollars — and that means getting fired, at the very least.
This creates the type of environment sorely lacking in society today. These investors want the truth and have skin in the game (incentives!) — unlike when Fauci or another health official sits down with MSNBC or another legacy media outlet. (In that relationship, narrative overrides all, so both parties are happy to lie.) I’m not much of a “finance” guy, but while working on these transcriptions, I learned a lot about translating “financial BS” into English.
With this brief background established — and after a hat tip to Friend of the ‘Stack Arne for bringing this to my attention — I want to dive into Pfizer’s recent investor call.
Believe it or not, it’s been a rough couple years for Pfizer. After almost reaching $60 at the end of 2021 (during peak demand for jabs), the pharmaceutical company’s stock price has plummeted and currently sits at just over $30/share — far less than it was 5 years ago. (This is doubly bad considering inflation between then and now.)
And uptake of the new covid ‘vaccine’ is dismal:
This provides a little background for the call. From a financial aspect, things aren’t going great for Pfizer. (I have a suspicion the public slowly remembered by Big Pharma was last in public opinion in late 2019. Net -31!) This situation calls for a steady hand to reassure the big money movers that Pfizer is still a viable investment, and that’s what Pfizer CEO Albert Bourla attempts to do.
Before we get into the content of the call, let’s take a look at some of the people involved, who aren’t as important as the companies they represent. Barclays, Goldman Sachs, JPMorgan Chase, etc. We’re obviously not dealing with amateurs, here.
Enough yammering, let’s get to the call:
Albert Bourla - Pfizer Inc. - Chairman of the Board & CEO
Thank you, Francesca. Hello, everyone, and thank you for joining us today. Last Friday, we announced an important agreement with the U.S. government that provides us with a clear pathway to U.S. commercialization of PAXLOVID next year. We believe this agreement will make it easier for eligible patients to access PAXLOVID, will ensure that the United States will have a robust stockpile for future use and helps provide more clarity on the commercial market for our COVID-related products.
Unsurprisingly, off the bat, Pfizer CEO Albert Bourla leads with the “good news” — Pfizer has reached an agreement with the US government to facilitate the further use of PAXLOVID (which has more rebounds than Dennis Rodman) even after the Emergency Use Authorization for the drug has expired. This is important because an agreement with the government ensures tens of millions of “customers” who are able to get PAXLOVID “free of charge” — meaning taxpayers pick up the tab. That provides “clarity” for the years to come — meaning guaranteed revenue in those years.
Let’s see how it works:
The agreement has an important component, which is a noncash transaction, whereby the U.S. government will return an estimated 7.9 million unused EUA-labeled PAXLOVID Treatment Courses at the end of this year at the original contract price, and will receive a volume-based credit from Pfizer for NDA-labeled treatment courses to be supplied on behalf of the government in the future.
This credit will be used by the U.S. government: First, to distribute PAXLOVID to federal entities and operate a patient assistance program on behalf of the U.S. government for the uninsured and underinsured from 2024 through 2028; second, in 2024, to allow patients insured through federal programs, such as Medicare and Medicaid, to continue to receive treatment free of charge through this same program.
So government gets a credit for unused Emergency Use Authorization doses of PAXLOVID, and then Pfizer will use that ‘credit’ to distribute “commercial” doses of the drug to patients — almost all of which are on government programs — over the course of the next FOUR YEARS.
Through 2023, we have taken actions to continue to mitigate the uncertainty in our COVID-19 portfolio. As previously announced, the European Union contract for Comirnaty supply was renegotiated with amended purchasing obligations through 2026. The U.S. market for Comirnaty transitioned to commercially available product in September 2023. And now this amended agreement with the U.S. government provides us with a time frame for commercializing PAXLOVID as well.
This is a great statement that reveals the company’s problem — people don’t want our stuff anymore, as well as the solution — sell it to governments. By now it’s no secret that from Big Pharma’s point of view, governments are the perfect customers. After all, government doesn’t care about price, has no ability to calculate demand, can MANDATE use of your products — and best of all, if turns out your drugs are dangerous, government will help with the coverup because it bought and mandated them! (I would say this gives a new meaning to the term “partner in crime”, but I’m pretty sure that’s actually a very old meaning.)
Finally, by the end of this year, we expect additional clarification on the expected trends for global vaccination and treatment rates. We believe the rates we see this fall will provide a solid foundation for future expectations. We have come through the period of fear that defined the early days of COVID, where everybody wanted to be vaccinated very quickly. In fact, we are right now in the middle of COVID fatigue where everyone wants to forget about the disease, and we are experiencing a peak of anti-vaccination rhetoric. Therefore, we believe those who are getting vaccines and medicines in the current environment are people who believe in the value of protection and treatment and will continue this behavior in the years to come.
This is the most important part of Bourla’s prepared remarks, in my opinion. He flat-out says that the company expects everybody who gets the booster shot this year will CONTINUE to get the booster shot “in the years to come.” (Remember when the idea there would even BE booster shots in the years to come was a dangerous conspiracy theory? When you asked why vaccination cards had four spaces, you got no answer.)
On one hand, it’s easy to see where Bourla is coming from. The only people who are still willingly lining up for the jab are the “true believers” — and true believers require far more evidence than most people to change their minds. (If it can even be done.)
On the other hand, uptake of every new shot has collapsed compared to the shot before it — and it’s easy to see why: Personal experience. Every round of boosters, a percentage of the population experiences serious adverse reactions, or knows somebody who did. Also, if you’re on your fifth shot and have had covid three times, you might start to wonder about the effectiveness of the jab.
Getting back to the call, now that Bourla has finished his “pitch”, the investors get to ask questions.
Robyn Kay Shelton Karnauskas - Truist Securities, Inc.
I think as we've digested all the news over the weekend, I think the big picture question that we had was how do you actually think about coming up with a formula to guide for next year? How do you [put with certainty] that's how PAXLOVID will be used, and how testing will be done and how the vaccine business will shape up? It seems like there's so many unknowns that you may not be able to give a great job of guiding for next year given there's so much uncertainty to start off with that big picture question.
Investors hate uncertainty and want Bourla to “show his work” regarding his certainty about the future.
Albert Bourla - Pfizer Inc. - Chairman of the Board & CEO
….when it comes to COVID revenues, I think you have enough elements to make your own calculations right now because a lot of the uncertainties have been -- that they were this year now have been eliminated. And some of them, by the end of the year, will become more clear.
Let me go over more. COMIRNATY, EU you have now a way to calculate it because the contract has been renegotiated, and there are purchase obligations every year so that we can calculate this. On the U.S., the uncertainty was, are we going to commercialize? That happened in September.
The only uncertainty that remains for the vaccination, it is vaccination rates. And those, we are going to see them how that evolve by the end of the year. I think it is fair to say that whatever will be the vaccination rates this year, this is our expectation, will become a solid foundation of what will be the vaccination rates for the years to come because those are the people that truly believe, as I said, in vaccination, the value of vaccines….
Just in case you weren’t sold on what Pfizer’s outlook on the future is, Bourla helpfully repeats it here: Sell the drugs to government and assume that whoever takes the shots this year will take the shots for the foreseeable future.
This bears repeating: Not only is Pfizer HOPING to offer covid boosters forever, they’re ACTUALLY BANKING on people getting them year after year.
After some discussion of future budgets and operating costs, the conversation swings back to covid products:
David Reed Risinger - Leerink Partners LLC
So with respect to vaccine demand, given that many people avoid mRNA boosters due to fears about brief tolerability issues in the first 24 hours, could you provide an update on your efforts to minimize reactogenicity risk in both future COMIRNATY booster versions and also Pfizer novel mRNA vaccines for other diseases?
Do you see why I love these things? You’d never hear this question on NBC.
Albert Bourla - Pfizer Inc. - Chairman of the Board & CEO
Thank you very much. On the reactogenicity, first of all, I think that Pfizer BioNTech vaccine has -- not all vaccines are the same or reactogenicity, we believe it is -- not we believe. We know the numbers. It's quite good compared to other vaccines that are available. So I don't think we have a reactogenicity issue with our vaccine.
This is a fairly interesting non-answer, because Bourla says “we know the numbers.” If he knows the numbers, why doesn’t the public know the numbers? Shouldn’t people be informed of the risks of those “other” vaccines? Or is everybody really on the same team in this game?
But the rest of Bourla’s answer is EVEN MORE compelling: (emphasis mine)
Clearly, we are working on -- and will continue despite the reduction of our operating expenses, we'll continue working, particularly on combination vaccines. Right now, we are the only company that has both an mRNA and an RSV, and we are working now on the flu. So clearly, as we are doing all of that, we are working on combinations that will help us enhance the -- how easy and convenient it is for patients to receive protection for respiratory diseases.
While answering a similar question later in the call, Bourla further explained this answer: (while also repeating that notion that people who get the shots today will continue to get them in the future)
The COVID product, after these new realities that we are rebasing expectations, will be 2 of the largest products, right? So both PAXLOVID and the vaccines. There's clearly mega blockbusters, will remain to be. The second thing it is that clearly, the combinations on vaccines, we are very much convinced that will unlock significant potential by improving the vaccination rates. Right now, the flu vaccination rates in this country are at 48%, approximately, of the Americans are getting a flu vaccine. And those that could be -- and those usually are people that believe in vaccines, right? They go to get vaccines. They are not people that believe that vaccines they don't protect or they are dangerous, right, at large.
So it's going to be a way more convenient if they will be offered with the same injection, not 2 or 3, the same injection and 0 co-pay to get free of charge, not 1, but 3 vaccines or 2. I think that will increase the vaccination rates of COVID and will bring them closer to flu. Of course, that remains to be seen, but this is our belief right now. That's why we continue very aggressively developing combination for our respiratory franchise vaccines.
The “solution” to the public not wanting shot A is simply to mix it into shot B! Voilà, instant demand! People don’t want to eat bugs but love pizza, so what if we just put the bugs in pizza?
As we get close to the end of the call, Timothy Anderson finally addresses the elephant in the room: (emphasis mine)
Timothy Minton Anderson - Wolfe Research, LLC
….you said we're at the peak of anti-vaccine and anti-treatment rhetoric suggesting that a trough. And I'm just wondering how you can really know that? To me, it seems like people not getting these products doing just fine, for the most part, might reaffirm that you don't need these products. So maybe those -- maybe that anti-treatment and anti-vaccine sentiment actually gets worse from here, not better.
Can you imagine Brian Williams telling Anthony Fauci that people are doing fine without Big Pharma products?
Me neither.
And Albert doesn’t sound too pleased with the question — or seem too confident in his answer: (Question starts at 37:45 and Bourla answers around 39:00)
Albert Bourla - Pfizer Inc. - Chairman of the Board & CEO
Yes. Now is it the peak of anti-vaccine rhetoric or we're going to see a little bit less or a little bit more or a lot less or a little bit -- or a lot more. I don't think that things will vary much. And I think that as you are moving towards another year distance from the COVID period, those things likely will go down. And in any case, we are taking assumptions that we are not going to maintain this. So we are assuming that things will be the same in the years to come, COVID fatigue and the vaccination rates. So the people that did it this year, will continue doing it. Next year, I think it is quite a safe assumption. But of course, assumptions is different thing and facts are different thing.
Ultimately, Bourla can only restate that vaccine uptake is currently at the ‘floor’ because people who get the shot this year will continue getting it in the future — although he says it with a little less conviction.
So there you have it! A little peek into the inner workings of Pfizer, (hopefully) helpfully translated into something readable.
This is already too long, so I’ll sign off with a reminder about the TRUE meaning of Halloween:
Afraid of commitment? Buy me a coffee on Ko-fi — no subscription required!
Edit: Ignore this! Figured it out :)
Joel Litman at Altimetry has a speech analysis program which he uses to assess CEO honesty on earnings calls.
I would love to see the output of this conference call. I am not sure how well it would work on politicians and other sociopaths and skilled liars.