“We continue to be disciplined with our operational expense management, progressing multiple improvement programs as we remain focused on driving operating margin expansion over the coming years.”

In context

“d of the second quarter was approximately 2.7x, which we are now setting as our new target, down from 3.25x. During Q2, we announced the licensing agreement with 3SBio, which closed in July of 2025. Our business development capacity is now approximately $13 billion following the 3SBio deal. Lastly, first half 2025 operating cash flows at $1.8 billion was tempered primarily by large, expected payments in the second quarter, including an approximately $2.1 billion TCJA repatriating tax payment and our payment to BioNTech for our gross profit split. We expect to see improved cash flows in the back half of this year. Overall, we are focused on maintaining leverage at or below our new target to support a balanced allocation of capital between reinvestment and direct return to our shareholders. We continue to be disciplined with our operational expense management, progressing multiple improvement programs as we remain focused on driving operating margin expansion over the coming years. We expect to begin realizing initial savings from the Phase 1 manufacturing optimization program in the latter part of this year. As part of our goal to return to pre-pandemic operating margin, we remain on track to deliver on our goal of at least $4.5 billion in cumulative net cost savings from our ongoing cost realignment program by the end of this year. As a reminder, in total, we expect approximately $7.7 billion in savings by the end of '27 to drive operating efficiencies, strengthening our business with the potential of contributing significantly to our bottom line over the period. Of these savings, approximately $500 million identified in R&D will be reinvested in the pipeline, which we expect by the end of '26. Now with that, let me turn to our full year '25 guidance. The pharmace”