“We expect $1.5 billion in savings from Phase 1 of the manufacturing optimization program by the end of '27 to support our long-term operating margin expansion goal.”

In context

“th rate in the third quarter as compared to Q2 was primarily driven by the timing of pediatric CDC shipments of Prevnar and a onetime favorable impact in Q2 for Seagen products transitioning to a wholesale distribution model in the U.S. We plan to continue to invest behind these 2 product groups to drive the future performance and help enable the company to largely offset our LOEs over the next several years. Adjusted gross margin for the third quarter was approximately 76%, primarily reflecting the product mix in the quarter and continued strong cost management within our manufacturing footprint. As a reminder, over the past 2 years, our adjusted gross margins have generally remained in the mid- to upper 70s, excluding Comirnaty, which has a 50-50 profit split with our partner, BioNTech. We expect $1.5 billion in savings from Phase 1 of the manufacturing optimization program by the end of '27 to support our long-term operating margin expansion goal. Going forward, cost management across our manufacturing network remains a top priority. Total adjusted operating expense were $7 billion for the third quarter of '25, an increase of 21% operationally versus LY, driven in large part by the acquired in-process R&D expense for 3SBio. Excluding the 3SBio deal, adjusted operating expenses contracted by approximately $150 million versus last year. And looking at the components, adjusted SI&A expenses decreased 3% operationally, primarily driven by focused investments and ongoing productivity improvements that drove a decrease in marketing and promotional spend for various products. Adjusted R&D expense decreased 3% operationally as well, driven by a net decrease in spending due to pipeline focus and optimization, including the expansion of our”