PFIZER REPORTS SECOND-QUARTER 2019 RESULTS

Pfizer Inc. (NYSE: PFE) reported financial results for second-quarter 2019 and updated certain components of its 2019 financial guidance.

Results for the second quarter of 2019 and 2018⁽⁴⁾ are summarized below.

Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts. References to operational variances pertain to period-over-period growth rates that exclude the impact of foreign exchange⁽⁵⁾.

2019 FINANCIAL GUIDANCE⁽⁶⁾

Pfizer’s updated 2019 financial guidance is presented below, reflecting the following:

• Anticipated August 1, 2019 formation of the Consumer Healthcare joint venture (JV) with GlaxoSmithKline plc (GSK)⁽³⁾:

– Includes revenue and expense contributions associated with Pfizer’s Consumer Healthcare business through July 31, 2019.

– Includes Pfizer’s pro rata share of the JV’s anticipated earnings, which will be recorded on a quarterly basis in Adjusted other (income)/deductions⁽²⁾, from August 1, 2019 through the end of 2019. Pfizer will record its share of the JV’s anticipated earnings on a one-quarter lag; therefore, updated 2019 financial guidance for Adjusted other (income)/deductions⁽²⁾ and Adjusted diluted EPS⁽²⁾ now reflects Pfizer’s share of two months of the JV’s earnings that are expected to be generated in third-quarter 2019, which will be recorded by Pfizer in fourth-quarter 2019.

• Anticipated near-term completion of the Array BioPharma Inc. (Array) acquisition and completion of the Therachon Holding AG (Therachon) acquisition (see Corporate Developments section of this press release for additional details on these transactions).

A reconciliation of certain components of Pfizer’s updated 2019 financial guidance to its financial guidance provided in April 2019 is presented below. Amounts for revenues do not sum due to rounding.

Financial guidance for Adjusted diluted EPS⁽²⁾ reflects $8.9 billion of share repurchases in first-quarter 2019. Dilution related to share-based employee compensation programs is currently expected to offset the reduction in shares associated with these share repurchases by approximately half.

CAPITAL ALLOCATION

• During the first six months of 2019, Pfizer returned $12.9 billion directly to shareholders, through a combination of:

– $4.0 billion of dividends, composed of dividends of $0.36 per share of common stock in each of the first and second quarters of 2019; and

– $8.9 billion of share repurchases, composed of $2.1 billion of open-market share repurchases in first-quarter 2019 and a $6.8 billion accelerated share repurchase agreement executed in February 2019.

• As of July 30, 2019, Pfizer’s remaining share repurchase authorization was $5.3 billion. 

EXECUTIVE COMMENTARY

Dr. Albert Bourla, Pfizer’s Chief Executive Officer, stated, “We reported solid second-quarter 2019 financial results, with total company revenues up 2% operationally. Performance was primarily driven by 6% volume-driven operational growth in our Biopharma business, including continued growth of key brands such as Ibrance, Eliquis and Xeljanz as well as in emerging markets. This growth was partially offset primarily by the impact of generic and biosimilar competition for products that have lost marketing exclusivity, as well as the expected decline of Upjohn revenues in China.

“Today’s announcement that proposes a combination between Upjohn and Mylan N.V. (Mylan) in a Reverse Morris Trust transaction marks an important milestone in Pfizer’s evolution to be a more focused, global leader in science-based, innovative medicines that delivers breakthroughs that change patients’ lives and creates sustainable value for shareholders. The proposed transaction would unlock value by giving Pfizer shareholders majority ownership of a new company that brings together highly complementary businesses under a management team focused on leveraging scale, capabilities and geographic reach while maximizing revenue growth opportunities and free cash flow potential. Following the close of the proposed transaction, I expect Pfizer will be positioned to deliver revenue and Adjusted diluted EPS⁽²⁾ growth through the mid-2020s that is among the industry leaders while continuing to allocate significant capital directly to shareholders, primarily through dividends,” Dr. Bourla concluded.

Frank D’Amelio, Chief Financial Officer and Executive Vice President, Business Operations and Global Supply, stated, “I was pleased with our second-quarter 2019 financial results, which keep us on track to deliver solid financial performance this year. We updated our 2019 financial guidance primarily for the anticipated August 1, 2019 formation of the Consumer Healthcare JV with GSK⁽³⁾ and the anticipated near-term completion of the Array acquisition. Excluding the changes to guidance related to pending business development activities, our 2019 financial guidance is unchanged. Additionally, in the first half of 2019, we returned $12.9 billion directly to shareholders through dividends and share repurchases, demonstrating our commitment to returning capital to our shareholders.”

QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2019 vs. Second-Quarter 2018)

Second-quarter 2019 revenues totaled $13.3 billion, a decrease of $203 million, or 2%, compared to the prior-year quarter, reflecting operational growth of $324 million, or 2%, more than offset by the unfavorable impact of foreign exchange of $527 million, or 4%.

Pfizer Biopharmaceuticals Group (Biopharma) Revenue Highlights

Second-quarter 2019 Biopharma revenues totaled $9.6 billion, up 6% operationally, primarily driven by:

• Ibrance globally, up 27% operationally, primarily driven by:

– 67% operational growth in international markets, primarily reflecting continued strong uptake in developed Europe and Japan as well as in certain emerging markets following launches; and

– 12% growth in the U.S., primarily driven by cyclin-dependent kinase (CDK) class market share growth and Ibrance’s continued CDK market share leadership in its approved metastatic breast cancer indications;

• Eliquis globally, up 26% operationally, primarily driven by continued increased adoption in non-valvular atrial fibrillation as well as oral anti-coagulant market share gains;
• Xeljanz globally, up 36% operationally, driven by:

– 103% operational growth in international markets, primarily reflecting continued uptake in the rheumatoid arthritis (RA) indication as well as from the recent launch of the ulcerative colitis (UC) indication in certain developed markets; and

– 21% growth in the U.S., reflecting volume growth from the launches of the UC and psoriatic arthritis (PsA) indications as well as continued growth in the RA indication, partially offset by higher rebating and unfavorable channel mix,

partially offset primarily by lower revenues for:

• Enbrel internationally, down 16% operationally, primarily reflecting continued biosimilar competition in most developed Europe markets as well as the unfavorable impact of timing of government purchases in certain emerging markets;
• Prevnar 13 in the U.S., down 10%, primarily reflecting lower government purchases in second-quarter 2019 for the pediatric indication as well as the continued decline in revenues for the adult indication due to a declining “catch up” opportunity compared to the prior-year quarter; and
• the Hospital business in developed markets, down 9% operationally, primarily due to the continued expected negative impact from generic competition for products that have previously lost marketing exclusivity as well as product supply shortages.

Upjohn Revenue Highlights

Second-quarter 2019 Upjohn revenues totaled $2.8 billion, down 7% operationally, primarily reflecting:

• 20% operational decline in China, primarily driven by the March 2019 implementation of a volume-based procurement program in certain cities, which had an anticipated unfavorable impact on Lipitor and Norvasc revenues. Given first-half 2019 operational growth of 13% and the outlook for the remainder of the year, revenues for Upjohn in China for the full year are expected to grow by low-to-mid-single-digits operationally; and
• 9% decline in the U.S., primarily driven by lower revenues for:

– Viagra, due to increased generic competition following Viagra’s December 2017 patent expiration; and

– Lyrica, primarily reflecting volume declines due to wholesaler destocking in advance of anticipated multi-source generic competition that was expected to begin on July 1, 2019 but instead began on July 19, 2019.

Consumer Healthcare⁽³⁾ Revenue Highlights

Second-quarter 2019 Consumer Healthcare⁽³⁾ revenues totaled $862 million, up 1% operationally, reflecting 4% operational growth in international markets, partially offset by a 2% decline in the U.S.

GAAP Reported⁽¹⁾ Income Statement Highlights

* Indicates calculation not meaningful.

Pfizer recorded other deductions––net⁽¹⁾ in second-quarter 2019 compared with other income––net⁽¹⁾ in the prior-year quarter, primarily driven by:

• lower net gains on equity securities;
• lower income from collaborations, out-licensing and sale of compound/product rights;
• higher business and legal entity alignment costs;
• higher charges for certain legal matters; and
• higher net interest expense,

partially offset primarily by:

• higher royalty-related income.

Pfizer’s effective tax rate on Reported income⁽¹⁾ for second-quarter 2019 compared to the prior-year period was favorably impacted primarily by a tax benefit related to the settlement of a U.S. Internal Revenue Service audit for multiple tax years.

Adjusted⁽²⁾ Income Statement Highlights

Second-quarter 2019 diluted weighted-average shares outstanding used to calculate Reported⁽¹⁾ and Adjusted⁽²⁾ diluted EPS declined by 280 million shares compared to the prior-year quarter primarily due to Pfizer’s ongoing share repurchase program, reflecting the impact of share repurchases during 2018 and in first-quarter 2019, partially offset by dilution related to share-based employee compensation programs.

A full reconciliation of Reported⁽¹⁾ to Adjusted⁽²⁾ financial measures and associated footnotes can be found starting on page 21 of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS (Since April 30, 2019)

Product Developments

• Bavencio (avelumab) -- In May 2019, Merck KGaA, Darmstadt, Germany, which operates its biopharmaceutical business as EMD Serono in the U.S. and Canada, and Pfizer announced that the U.S. Food and Drug Administration (FDA) approved Bavencio in combination with Inlyta (axitinib) for the first-line treatment of patients with advanced renal cell carcinoma (RCC).
• Eucrisa (crisaborole) -- In July 2019, Pfizer announced top-line results from a Phase 4 study (CrisADe CARE 1) which showed that crisaborole ointment, 2%, was well-tolerated in children aged 3 months to less than 24 months with mild to moderate atopic dermatitis (AD), also known as eczema. The data from the trial are supportive of the primary study objective to examine the safety of crisaborole ointment, 2%, in this patient population, and are consistent with previous clinical trial experience. Crisaborole ointment, 2%, is currently approved in select countries for mild to moderate AD in patients two years of age and older.
• Lorbrena/Lorviqua (lorlatinib) -- In May 2019, Pfizer announced that the European Commission (EC) granted conditional marketing authorization for Lorviqua (available in the U.S., Canada and Japan under the brand name Lorbrena), as a monotherapy for the treatment of adult patients with anaplastic lymphoma kinase (ALK)-positive advanced non-small cell lung cancer (NSCLC) whose disease has progressed after alectinib or ceritinib as the first ALK tyrosine kinase inhibitor (TKI) therapy, or crizotinib and at least one other ALK TKI.
• Prevnar 13 (Pneumococcal 13-valent Conjugate Vaccine [Diphtheria CRM197 Protein]) -- In June 2019, the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) voted to revise the pneumococcal vaccination guidelines and recommend Prevnar 13 based on shared clinical decision making for adults 65 years or older who do not have an immunocompromising condition and who have not previously received Prevnar 13. This represents a change from the current CDC recommendation for routine use among all immunocompetent adults aged 65 years and older. This new recommendation means the decision to vaccinate should be made at the individual level between health care providers and their patients. Once the ACIP recommendation has been reviewed and approved by the CDC Director and the U.S. Department of Health and Human Services, it would be published in CDC’s Morbidity and Mortality Weekly Report. Prevnar 13 continues to be routinely recommended for adults with immunocompromising conditions.
• Ruxience (rituximab-pvvr) -- In July 2019, Pfizer announced that the FDA approved Ruxience, a biosimilar to Rituxan^®(7) (rituximab), for the treatment of adult patients with non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, and granulomatosis with polyangiitis and microscopic polyangiitis.
• Talzenna (talazoparib) -- In June 2019, Pfizer announced that the EC approved Talzenna as monotherapy for the treatment of adult patients with germline breast cancer susceptibility gene 1/2-mutations, who have human epidermal growth factor receptor 2-negative locally advanced or metastatic breast cancer. Patients should have been previously treated with an anthracycline and/or a taxane in the (neo)adjuvant, locally advanced or metastatic setting unless patients were not suitable for these treatments. Patients with hormone receptor-positive breast cancer should have been treated with a prior endocrine-based therapy, or be considered unsuitable for endocrine-based therapy. This approval follows the medicine’s approval by the FDA in October 2018.
• Vyndaqel/Vyndamax (tafamidis) -- In May 2019, Pfizer announced that the FDA approved both Vyndaqel (tafamidis meglumine) and Vyndamax (tafamidis) for the treatment of cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) in adults to reduce cardiovascular mortality and cardiovascular-related hospitalization. Vyndaqel and Vyndamax are two oral formulations of the first-in-class transthyretin stabilizer tafamidis, and the first and only medicines approved by the FDA to treat ATTR-CM. The recommended dosage is either Vyndaqel 80 mg orally once-daily, taken as four 20 mg capsules, or Vyndamax 61 mg orally once-daily, taken as a single capsule. Vyndamax was developed for patient convenience; Vyndaqel and Vyndamax are not substitutable on a per milligram basis.
• Xeljanz (tofacitinib)

– In July 2019, the FDA updated the U.S. prescribing information for Xeljanz to include two additional boxed warnings as well as changes to the indication and dosing for UC. These updates were based on the FDA’s review of data from the post-marketing requirement RA study A3921133.

– In June 2019, Pfizer announced positive results from ORAL Shift, a Phase 3b/4 study in adult patients with moderately to severely active RA. Patients who achieved low disease activity with Xeljanz extended release 11 mg once daily (Xeljanz XR) plus methotrexate (MTX) after a 24-week open-label run-in period, were randomized to evaluate the efficacy and safety of Xeljanz XR as monotherapy after MTX withdrawal compared with Xeljanz XR with continued MTX. The study demonstrated non-inferiority of MTX withdrawal with Xeljanz XR compared to Xeljanz XR plus MTX at week 48 as measured by the primary endpoint, the change in the Disease Activity Score from randomization at week 24 to the end of the double-blind MTX withdrawal phase at week 48. The study results were presented during a late-breaking oral session at the Annual European Congress of Rheumatology.

– In May 2019, Pfizer announced that the Pharmacovigilance Risk Assessment Committee (PRAC) of the European Medicines Agency (EMA) issued recommendations limiting the use of Xeljanz 10 mg twice daily (BID) in patients at increased risk of pulmonary embolism (PE) in the European Union (EU). These recommendations have been incorporated in updated EU product labeling for Xeljanz, which is provisional, while PRAC undertakes a review of all available evidence on the safety and efficacy of Xeljanz. The review is a result of the observation of increased risk of PE with tofacitinib 10 mg BID in an ongoing FDA post-marketing requirement study in individuals with RA who had one or more underlying cardiovascular risk factors. Specifically, it is recommended that tofacitinib 10 mg BID should not be prescribed to patients who are at high risk of PE. Additionally, patients who are already taking 10 mg BID and are at high risk of PE should be switched to alternative treatments. In the EU, tofacitinib 10 mg BID is an approved dose for patients with UC but it is not an approved dose for patients with moderate to severe RA nor for those with active PsA. The review is being carried out by PRAC, the Committee responsible for the evaluation of safety issues for human medicines, which will make a set of recommendations at the request of the EC. The PRAC recommendations will then be forwarded to the Committee for Medicinal Products for Human Use. The final stage of the review procedure is the adoption by the EC of a legally binding decision applicable in all EU Member States.

• Zirabev (bevacizumab-bvzr) -- In June 2019, Pfizer announced that the FDA approved Zirabev, a biosimilar to Avastin^®(8), for the treatment of five types of cancer: metastatic colorectal cancer (CRC); unresectable, locally advanced, recurrent or metastatic NSCLC; recurrent glioblastoma; metastatic RCC; and persistent, recurrent or metastatic cervical cancer. 

Pipeline Developments

A comprehensive update of Pfizer’s development pipeline was published today and is now available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of Pfizer’s research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

• Abrocitinib (PF-04965842) -- In May 2019, Pfizer announced positive top-line results from a Phase 3 pivotal study (JADE MONO-1) evaluating the efficacy and safety of its investigational oral Janus kinase 1 (JAK1) inhibitor, abrocitinib, in patients aged 12 and older with moderate to severe AD. JADE MONO-1 was a randomized, double-blind, placebo-controlled, parallel-group study designed to evaluate the efficacy and safety of two doses (100 mg and 200 mg once daily) of abrocitinib monotherapy over 12 weeks. Top-line results showed that by week 12 the percentage of patients achieving each co-primary efficacy endpoint and each key secondary endpoint with either dose of abrocitinib was statistically significantly higher than placebo. In addition, the results demonstrate response to treatment for a statistically significant number of patients during the first two to four weeks following first dose. Safety results show that both doses of abrocitinib were well-tolerated, and there were no unexpected safety events. No cases of major adverse cardiovascular events, malignancies, or venous thromboembolism, including deep vein thrombosis and PE, were observed in the JADE MONO-1 study. The discontinuation rates due to an adverse event were low in each treatment arm (5.8% and 5.8% in 100 mg and 200 mg, respectively) compared to placebo (9.1%).
• Glasdegib (PF-04449913) -- In May 2019, the EMA validated for review the Marketing Authorization Application for glasdegib, proposed for the treatment of acute myeloid leukemia in adult patients who are not candidates for standard induction chemotherapy.
• PF-06939926 -- In June 2019, Pfizer presented initial Phase 1b clinical data for PF-06939926, an investigational gene therapy to potentially treat Duchenne muscular dystrophy (DMD) at the 25^th Annual Parent Project Muscular Dystrophy Connect Conference. The primary endpoint of the ongoing Phase 1b study is to assess the safety and tolerability of this investigational gene therapy. Secondary endpoints of the clinical study include measurement of expression of mini-dystrophin distribution within muscle fibers by immunofluorescence and concentration by liquid chromatography mass spectrometry. Pfizer aims to enroll approximately 12 boys with DMD who are ambulatory and aged 5 to 12. To date, 6 study participants ranging in age from 6 to 12 years have received the one-time intravenous dose of PF-06939926 at either 1e14 vector genomes/kilogram (vg/kg) or 3e14 vg/kg, as quantified using an inverted terminal repeat-based quantitative polymerase chain reaction (qPCR) drug product titer assay. As Pfizer continues to collect data from this ongoing open-label study in boys with DMD, it is also in the planning stages for a global, randomized, placebo-controlled Phase 3 study. This study is expected to begin in the first half of 2020 with commercial-scale manufacturing processes using multiple 2000-liter bioreactors. The anticipated Phase 3 study intends to leverage the learnings from the ongoing Phase 1b study in order to inform Pfizer’s decisions regarding the optimal dose, assay, method of administration, concomitant medications, participant selection and safety monitoring.
• PF-07055480 (SB-525) -- In July 2019, Sangamo Therapeutics, Inc. (Sangamo) and Pfizer announced updated results from the Phase 1/2 Alta study evaluating investigational SB-525 gene therapy for severe hemophilia A. The data showed that SB-525 was generally well-tolerated and demonstrated a dose-dependent increase in Factor VIII (FVIII) activity levels. The first two patients treated at the 3e13 vg/kg dose rapidly achieved normal levels of FVIII activity as measured using a chromogenic assay, with no reported bleeding events, and the response continues to be durable for as long as 24 weeks, the extent of follow-up. The two patients more recently treated at the 3e13 vg/kg dose level are demonstrating FVIII activity kinetics that appear consistent with the first two patients treated in this dose cohort at similar early time points. Data from 10 patients treated with SB-525 were presented during an oral presentation on July 6 at the XXVII Congress of the International Society on Thrombosis and Haemostasis. SB-525 is being developed as part of a global collaboration between Sangamo and Pfizer.
• Tanezumab (PF-4383119)

– Based on an assessment of the totality of subcutaneous (SC) tanezumab data and an initial discussion with the FDA during second-quarter 2019, Pfizer and Eli Lilly and Company (Lilly) have decided to pursue a U.S. regulatory submission for tanezumab 2.5 mg SC in patients with moderate-to-severe osteoarthritis (OA) that is expected to be filed with the FDA in fourth-quarter 2019 or early 2020, to be followed by potential regulatory filings in the EU and Japan. At this time, regulatory submissions are not planned for the tanezumab 5 mg SC dose in OA or in patients with moderate-to-severe chronic low back pain (CLBP). Pfizer and Lilly intend to maintain an open dialogue with regulatory authorities on potential future regulatory pathways for tanezumab.

– In July 2019, Pfizer and Lilly announced top-line results from a Phase 3 study evaluating the long-term safety and efficacy of tanezumab relative to the nonsteroidal anti-inflammatory drug celecoxib in Japanese patients with moderate-to-severe CLBP. In the study (A4091063), 277 patients were randomized 1:1:1 to receive tanezumab 5 mg SC or 10 mg SC every eight weeks, or celecoxib twice daily, for a treatment period of 56 weeks. The study also included a 24-week safety follow-up period, for a total of 80 weeks of observation. Patients enrolled were required to be on a stable regimen of celecoxib and experiencing some benefit from treatment. The primary objective of the study was to evaluate the long-term safety of tanezumab, as measured by outcomes related to general, sympathetic and peripheral nervous systems and joint safety.

Preliminary data showed that the overall adverse event profile with tanezumab was generally consistent with a previously reported study of tanezumab in CLBP. The rate of composite joint safety events, which consisted of adjudicated outcomes of rapidly progressive osteoarthritis (RPOA) type 1 or type 2, subchondral insufficiency fracture, osteonecrosis or pathological fracture over the 80-week observation period was 1.6% in the tanezumab treatment arms, and 0% in the celecoxib arm. The incidence of RPOA observed in the tanezumab arms was 1.1%, with one case each of type 1 and type 2, and subchondral insufficiency fracture was observed in 0.5% of tanezumab-treated patients. There were no events of osteonecrosis or pathological fracture in the study. One patient in the study (taking tanezumab 10 mg) underwent total joint replacement. Detailed results from this study will be submitted to regulatory authorities as part of routine safety updates and will be shared in a future scientific forum.

Corporate Developments

• Pfizer and Mylan, a global generic and specialty pharmaceuticals company, today announced a definitive agreement to combine Upjohn and Mylan to create a new global pharmaceutical company. Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, Pfizer shareholders would own 57% and Mylan shareholders would own 43% of the combined new company upon closing. The Boards of Directors of both Pfizer and Mylan have unanimously approved the transaction. The companies anticipate the transaction to close in mid-2020, subject to customary closing conditions, including receipt of regulatory approvals, and approval by Mylan shareholders.

• In July 2019, Pfizer announced the successful completion of its acquisition of the privately held clinical-stage biotechnology company, Therachon. Under the terms of the transaction, Pfizer acquired Therachon for $340 million with an additional $470 million in additional payments contingent on the achievement of key milestones in the development and commercialization of TA-46. TA-46 is an investigational medicine for the treatment of achondroplasia, a genetic condition and the most common form of short-limb dwarfism. There are currently no approved treatment options for achondroplasia.
• In June 2019, Pfizer announced that it entered into a definitive merger agreement to acquire Array, a commercial stage biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule medicines to treat cancer and other diseases of high unmet need. Pfizer agreed to acquire Array for $48 per share in cash, for a total enterprise value of approximately $11.4 billion. Array’s portfolio includes the approved combined use of Braftovi (encorafenib) and Mektovi (binimetinib) for the treatment of BRAF^V600E or BRAF^V600K mutant unresectable or metastatic melanoma. The combination therapy has significant potential for long-term growth via expansion into additional areas of unmet need and is currently being investigated in over 30 clinical trials across several solid tumor indications, including the Phase 3 BEACON trial in BRAF-mutant metastatic CRC. Upon the close of the transaction, which is expected to occur in third-quarter 2019, Array's employees will join Pfizer and continue to be located in Cambridge, Massachusetts and Morrisville, North Carolina, as well as Boulder, Colorado, which becomes part of Pfizer's Oncology R&D network in addition to La Jolla, California and Pearl River, New York. Pfizer expects to finance the majority of the transaction with debt and the balance with existing cash. The transaction is expected to be dilutive to Pfizer’s Adjusted diluted EPS⁽²⁾ by approximately $0.04 in 2019, dilutive by $0.04 -$0.05 in 2020, neutral in 2021, and accretive beginning in 2022, with additional accretion and growth anticipated thereafter.

Rescheduled Second-Quarter 2019 Earnings Conference Call

Due to today’s announcement of a proposed transaction between Pfizer and Mylan, Pfizer’s second-quarter 2019 earnings conference call with investment analysts has been rescheduled for today, July 29, 2019 at 10:30 a.m. EDT. This call was previously scheduled for Tuesday, July 30, 2019 at 10 a.m. EDT.

To view and listen to the webcast, visit our web site at www.pfizer.com/investors. You can also listen to the conference call by dialing either (855) 895-8759 in the U.S. and Canada or (503) 343-6044 outside of the U.S. and Canada. The password is “Second Quarter Earnings”.

Visitors to www.pfizer.com/investors will be able to view and listen to an archived copy of the webcast of the conference call.

Please find Pfizer’s press release and associated financial tables, including reconciliations of certain GAAP reported to non-GAAP adjusted information, at the following hyperlink:

https://investors.pfizer.com/files/doc_financials/Quarterly/2019/q2/Q2-2019-PFE-Earnings-Release.pdf

(Note: If clicking on the above link does not open up a new web page, you may need to cut and paste the above URL into your browser's address bar.)

For additional details, see the associated financial schedules and product revenue tables attached to the press release located at the hyperlink referred to above and the attached disclosure notice.

DISCLOSURE NOTICE: Except where otherwise noted, the information contained in this earnings release and the related attachments is as of July 29, 2019. We assume no obligation to update any forward-looking statements contained in this earnings release and the related attachments as a result of new information or future events or developments.

This earnings release and the related attachments contain forward-looking statements about our anticipated future operating and financial performance, business plans and prospects, expectations for in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, revenue contribution, growth, performance, timing of exclusivity and potential benefits, strategic reviews, capital allocation objectives, business-development plans, benefits anticipated from the reorganization of our commercial operations into three businesses which became effective at the beginning of our 2019 fiscal year, our acquisitions and other business development activities, including our recently-announced proposed transaction with Mylan N.V. (Mylan) to combine Upjohn and Mylan to create a new global pharmaceutical company, our recently-announced proposed acquisition of Array BioPharma Inc. and our proposed transaction with GSK to combine our respective consumer healthcare businesses into a new consumer healthcare joint venture, our ability to successfully capitalize on growth opportunities or prospects, manufacturing and product supply and plans relating to share repurchases and dividends, among other things, that involve substantial risks and uncertainties. You can identify these statements by the fact that they use future dates or use words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” “aim,” “seek” and other words and terms of similar meaning. Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:

• the outcome of research and development activities, including, without limitation, the ability to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates, as well as the possibility of unfavorable pre-clinical and clinical trial results, including the possibility of unfavorable new clinical data and further analyses of existing clinical data;
• the risk we may not be able to successfully address all of the comments received from regulatory authorities such as the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA), or obtain approval from regulators, which will depend on myriad factors, including such regulator making a determination as to whether a product’s benefits outweigh its known risks and a determination of the product’s efficacy; regulatory decisions impacting labeling, manufacturing processes, safety and/or other matters; and recommendations by technical or advisory committees, such as the Advisory Committee on Immunization Practices, that may impact the use of our vaccines;
• the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
• the outcome of post-approval clinical trials, which could result in the loss of marketing approval, changes in product labeling, and/or new or increased concerns about the side effects or efficacy of, a product that could affect its availability or commercial potential, such as the update to the U.S. prescribing information for Xeljanz and Xeljanz extended release;
• the success of external business-development activities, including the ability to identify and execute on potential business development opportunities, the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all, the ability to realize the anticipated benefits of any such transactions, and the potential need to obtain additional equity or debt financing to pursue these opportunities which could result in increased leverage and impact our credit ratings;
• competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products, biosimilars and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;
• the implementation by the FDA and regulatory authorities in certain countries of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products, with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;
• risks related to our ability to develop and launch biosimilars, including risks associated with “at risk” launches, defined as the marketing of a product by Pfizer before the final resolution of litigation (including any appeals) brought by a third party alleging that such marketing would infringe one or more patents owned or controlled by the third party, and access challenges for our biosimilar products where our product may not receive appropriate formulary access or remains in a disadvantaged position relative to the innovator product;
• the ability to meet competition from generic, branded and biosimilar products after the loss or expiration of patent protection for our products or competitor products;
• the ability to successfully market both new and existing products domestically and internationally;
• difficulties or delays in manufacturing, including delays caused by natural events, such as hurricanes; supply shortages at our facilities; and legal or regulatory actions, such as warning letters, suspension of manufacturing, seizure of product, injunctions, debarment, voluntary recall of a product or failure to secure product approvals;
• trade buying patterns;
• the impact of existing and future legislation and regulatory provisions on product exclusivity;
• trends toward managed care and healthcare cost containment, and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;
• the impact of any significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs or changes in the tax treatment of employer-sponsored health insurance that may be implemented;
• the impact of any U.S. healthcare reform or legislation, including any replacement, repeal, modification or invalidation of some or all of the provisions of the U.S. Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act;
• U.S. federal or state legislation or regulatory action and/or policy efforts affecting, among other things, pharmaceutical product pricing, intellectual property, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; patient out-of-pocket costs for medicines, manufacturer prices and/or price increases that could result in new mandatory rebates and discounts or other pricing restrictions; general budget control actions; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; revisions to reimbursement of biopharmaceuticals under government programs; restrictions on U.S. direct-to-consumer advertising; limitations on interactions with healthcare professionals; or the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines; as well as pricing pressures for our products as a result of highly competitive insurance markets;
• legislation or regulatory action in markets outside the U.S., including China, affecting pharmaceutical product pricing, intellectual property, reimbursement or access, including, in particular, continued government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs in those markets;
• the exposure of our operations outside the U.S. to possible capital and exchange controls, economic conditions, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest, unstable governments and legal systems and inter-governmental disputes;
• contingencies related to actual or alleged environmental contamination;
• claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;
• any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;
• legal defense costs, insurance expenses and settlement costs;
• the risk of an adverse decision or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, such as claims that our patents are invalid and/or do not cover the product of the generic drug manufacturer or where one or more third parties seeks damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities, product liability and other product-related litigation, including personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, commercial, environmental, government investigations, employment and other legal proceedings, including various means for resolving asbestos litigation, as well as tax issues;
• the risk that our currently pending or future patent applications may not result in issued patents, or be granted on a timely basis, or any patent-term extensions that we seek may not be granted on a timely basis, if at all;
• our ability to protect our patents and other intellectual property, both domestically and internationally;
• interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;
• governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside the U.S. that may result from pending and possible future proposals, including further clarifications and/or interpretations of the Tax Cuts and Jobs Act enacted in 2017;
• any significant issues involving our largest wholesale distributors, which account for a substantial portion of our revenues;
• the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;
• the end result of any negotiations between the U.K. government and the EU regarding the terms of the U.K.’s exit from the EU, which could have implications on our research, commercial and general business operations in the U.K. and the EU, including the approval and supply of our products;
• any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal or regulatory requirements and industry standards;
• any significant issues that may arise related to our joint ventures and other third-party business arrangements;
• changes in U.S. generally accepted accounting principles;
• further clarifications and/or changes in interpretations of existing laws and regulations, or changes in laws and regulations, in the U.S. and other countries;
• uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on Pfizer, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; the related risk that our allowance for doubtful accounts may not be adequate; and the risks related to volatility of our income due to changes in the market value of equity investments;
• any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;
• growth in costs and expenses;
• changes in our product, segment and geographic mix;
• the impact of purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items;
• the impact of acquisitions, divestitures, restructurings, internal reorganizations, including the reorganization of our commercial operations into three businesses, which became effective at the beginning of the company’s 2019 fiscal year, any other corporate strategic initiatives, and cost-reduction and productivity initiatives, each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs or organizational disruption;
• the impact of product recalls, withdrawals and other unusual items;
• the risk of an impairment charge related to our intangible assets, goodwill or equity-method investments;
• risks related to internal control over financial reporting;
• risks and uncertainties related to acquisitions, such as the recently-announced proposed acquisition of Array BioPharma Inc., including, among other things, the ability to realize the anticipated benefits of those acquisitions, including the possibility that the expected cost savings and/or accretion from certain of those acquisitions will not be realized or will not be realized within the expected time frame; the risk that the businesses will not be integrated successfully; disruption from the transactions making it more difficult to maintain business and operational relationships; risks related to our ability to grow revenues for certain acquired products; significant transaction costs; and unknown liabilities;
• risks and uncertainties related to our proposed transaction with GSK to combine our respective consumer healthcare businesses into a new consumer healthcare joint venture, including, among other things, risks related to the satisfaction of the conditions to closing the transaction in the anticipated timeframe or at all and the possibility that the transaction does not close, risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits and cost synergies from the proposed transaction will not be realized or will not be realized within the expected time period, the risk that the businesses will not be integrated successfully, the possibility that a future separation of the joint venture may not occur, disruption from the transaction making it more difficult to maintain business and operational relationships, negative effects of the announcement or the consummation of the proposed transaction on the market price of Pfizer’s common stock and on Pfizer’s operating results, significant transaction costs, unknown liabilities, the risk of litigation and/or regulatory actions related to the proposed transaction, other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange and interest rates, changes in tax and other laws, regulations, rates and policies, future business combinations or disposals and competitive developments; and
• risks and uncertainties related to our proposed transaction with Mylan to combine Upjohn and Mylan to create a new global pharmaceutical company, including, among other things, risks related to the satisfaction of the conditions to closing the transaction (including the failure to obtain necessary shareholder and regulatory approvals) in the anticipated timeframe or at all and the possibility that the transaction does not close, risks related to the ability to realize the anticipated benefits of the transaction, including the possibility that the expected benefits and cost synergies of the combined company from the proposed transaction will not be realized or will not be realized within the expected time period, the risk that the businesses will not be integrated successfully, disruption from the transaction making it more difficult to maintain business and operational relationships, negative effects of the announcement or the consummation of the proposed transaction on the market price of Pfizer’s common stock, Pfizer’s credit ratings and/or on Pfizer’s or the combined company’s operating results, significant transaction costs, unknown liabilities, the risk of litigation and/or regulatory actions related to the proposed transaction, other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange and interest rates, changes in tax and other laws, regulations, rates and policies, future business combinations or disposals and competitive developments.

We cannot guarantee that any forward-looking statement will be realized. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements, and are cautioned not to put undue reliance on forward-looking statements. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in our subsequent reports on Form 10-Q, in each case including in the sections thereof captioned “Forward-Looking Information and Factors That May Affect Future Results” and “Item 1A. Risk Factors”, and in our subsequent reports on Form 8-K.

The operating segment information provided in this earnings release and the related attachments does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

Additional Information and Where to Find It

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the proposed combination of Upjohn Inc. (“Upjohn”), a wholly owned subsidiary of Pfizer Inc. (“Pfizer”) and Mylan N.V. (“Mylan”), which will immediately follow the proposed separation of Upjohn from Pfizer (the “proposed transaction”), Upjohn and Mylan I B.V., a wholly owned subsidiary of Mylan, (“Mylan Newco”) intend to file relevant materials with the Securities and Exchange Commission (“SEC”), including a registration statement on Form S-4 that will include a proxy statement/prospectus relating to the proposed transaction.  In addition, Upjohn expects to file a registration statement in connection with its separation from Pfizer. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENTS, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MYLAN, UPJOHN, MYLAN NEWCO AND THE PROPOSED TRANSACTION. A definitive proxy statement will be sent to shareholders of Mylan seeking approval of the proposed transaction. The documents relating to the proposed transaction (when they are available) can be obtained free of charge from the SEC's website at www.sec.gov. These documents (when they are available) can also be obtained free of charge from Mylan, upon written request to Mylan, at (724) 514-1813 or investor.relations@mylan.com or from Pfizer on Pfizer’s internet website at https://investors.Pfizer.com/financials/sec-filings/default.aspx or by contacting Pfizer’s Investor Relations Department at (212) 733-2323.

PARTICIPANTS IN THE SOLICITATION

This communication is not a solicitation of a proxy from any investor or security holder. However, Pfizer, Mylan, Upjohn and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction under the rules of the SEC. Information about the directors and executive officers of Pfizer may be found in its Annual Report on Form 10-K filed with the SEC on February 28, 2019, its definitive proxy statement and additional proxy statement relating to its 2019 Annual Meeting filed with the SEC on March 14, 2019 and on April 2, 2019, respectively, and Current Report on Form 8-K filed with the SEC on June 27, 2019. Information about the directors and executive officers of Mylan may be found in its amended Annual Report on Form 10-K filed with the SEC on April 30, 2019, and its definitive proxy statement relating to its 2019 Annual Meeting filed with the SEC on May 24, 2019. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the proxy statement/prospectus when it becomes available.

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