Cardinal Health (CAH) FY 2025 Conference September 04, 2025 11:00 AM ET Company ParticipantsMatt Sims - VP - IRJason Hollar - Director & CEOConference Call ParticipantsStephen Baxter - Senior Equity Research AnalystStephen BaxterOkay, great. Well, morning. Steve Baxter, the healthcare services analyst here at Wells Fargo. We're very pleased to have Cardinal help with us today. So Cardinal is one of the largest drug distributors in The U.S. And operates a handful of other businesses we're going to touch on t ...

Core Viewpoint - Eli Lilly and AbbVie are leading U.S. pharmaceutical companies with strong drug portfolios and market presence, particularly in immunology, oncology, and neuroscience [1][2] Group 1: Company Overview - Eli Lilly has a robust cardiometabolic health business, driven by its GLP-1 drugs, Mounjaro and Zepbound, which account for approximately 50% of its total revenues [3][4] - AbbVie has successfully transitioned from the loss of exclusivity of Humira by launching new immunology drugs, Skyrizi and Rinvoq, which are expected to generate significant sales [13][14] Group 2: Financial Performance - Lilly anticipates 2025 revenues between $58.0 billion and $61.0 billion, reflecting a 32% year-over-year growth [29] - AbbVie expects combined sales of Skyrizi and Rinvoq to reach around $24.7 billion in 2025, with a projected growth to over $31 billion by 2027 [14][30] Group 3: Market Dynamics - Lilly's Mounjaro and Zepbound face competition from Novo Nordisk's products, which may impact their market share [10][12] - AbbVie is experiencing strong performance from its oncology products, with new approvals contributing to its growth strategy [15] Group 4: Valuation and Estimates - Lilly's shares trade at a forward P/E ratio of 30.03, higher than AbbVie's 14.15, indicating a more expensive valuation for Lilly [22] - The Zacks Consensus Estimate for AbbVie's 2025 sales and EPS implies a year-over-year increase of 6.6% and 21.3%, respectively, while Lilly's estimates show a 33.03% increase in sales and 68.9% in EPS [18][20] Group 5: Investment Considerations - AbbVie offers a higher dividend yield of 3.5% compared to Lilly's 0.8%, making it more attractive for income-focused investors [27] - Despite Lilly's strong growth prospects, AbbVie is viewed as a safer investment option due to its lower valuation and rising estimates [31]

Core Viewpoint - Pfizer's stock has seen a 5% increase following its first-quarter earnings report, which showed earnings growth but a decline in sales, primarily due to lower revenues from key products and the impact of Medicare Part D redesign [1][2][24]. Financial Performance - Pfizer reported earnings of 92 cents per share, a 12% increase year-over-year, while revenues declined by 6% on an operational basis [1]. - The company maintains its revenue outlook for 2025, projecting total revenues between $61.0 billion and $64.0 billion, with earnings expected in the range of $2.80 to $3.00 per share [2]. - The stock has declined 7.3% year-to-date, underperforming the industry, which has increased by 2.4% [15][17]. Product Sales and Market Trends - Sales of COVID-related products, Comirnaty and Paxlovid, are projected to drop to around $11 billion in 2024 from $56.7 billion in 2022, with similar expectations for 2025 [5]. - Non-COVID operational revenues improved in 2024, driven by key products like Vyndaqel, Padcev, and newly acquired products from Seagen [6][7]. Oncology Segment - Pfizer has a strong position in oncology, with a 7% growth in oncology revenues in the first quarter of 2025, supported by drugs like Xtandi and Padcev [8][9]. - The acquisition of Seagen has further strengthened Pfizer's oncology portfolio, with several candidates entering late-stage development [8][9]. Challenges and Headwinds - Pfizer anticipates a moderate negative impact on revenues from the loss of exclusivity for several key products in 2025, with significant effects expected from 2026 to 2030 [11]. - The company expects an unfavorable impact of approximately $1 billion from the Medicare Part D redesign under the Inflation Reduction Act, particularly affecting higher-priced drugs [12]. - Pfizer has faced setbacks, including the discontinuation of the GLP-1R agonist danuglipron due to safety concerns [13]. Strategic Outlook - Pfizer is focused on cost reductions and internal restructuring, aiming for savings of $7.7 billion by the end of 2027, which should support profit growth [25]. - The company returned $2.4 billion to shareholders through dividends in the first quarter of 2025, with a dividend yield of around 7.1% [26]. - Despite challenges, Pfizer's diversified portfolio and new growth prospects position it well for long-term gains, making it attractive for value and income investors [24][28].