Q3 2019 Earnings Call

At this time I would like to turn the call over to Mr. Trump Triano Senior Vice President of Investor Relations. Please go ahead Sir.

Unknown Executive: I will pass a call over to Mr. Chuck Triano, Senior Vice President of Investor Relations. Please go ahead, sir.

Good morning, Thank you for joining us today to review Pfizer's third quarter 2019 performance and updated 2019 financial guidance I'm joined today by our CEO Albert Bourla break the Emilio our CFO , Michael Dosed in President of worldwide Research and development Angela Wong Group President Pfizer Biopharm.

Unknown Executive: Good morning, and thank you for joining us today to review Pfizer's third quarter 2019 performance and updated 2019 financial guide. I'm joined today by our CEO, Albert Bourla, Frank DiEmilio, our CFO, Michael Dolsten, President of Worldwide Research and Development, Angela Wong, Group President, Pfizer Biopharmaceuticals Group, John Young, our Chief Business Officer, and Doug Lankler, General Counsel. The slides that will be presented on this call were posted to our website earlier this morning and are available at pfizer.com forward slash investment. You'll see here that slide three covers our legal disclosure. Albert and Frank will now make prepared remarks, and then we'll move to a question and answer session. With that, I'll now turn the call over to Albert Borla. Albert.

Mr Euticals group.

John Young our Chief business Officer, Doglegs <unk> General counsel.

The slides it will be presented on this call were posted to our website earlier. This morning and are available at Pfizer Dot com forward slash investors.

You will see here that slide three covers our legal disclosures.

Alberta, and Frank will now make prepared remarks, and then we'll move to a question and answer session.

With that I'll now turn the call over to Albert Bourla Albert.

Thank you talked a good morning, everyone.

Albert Bourla: Thank you, Chuck, and good morning, everyone. In my remarks, I will discuss our quarterly business performance, the latest updates from our pipeline, and our plans for Pfizer following the anticipated completion of the Abjon-Myelin combination, which we continue to expect to occur in mid-2020. During the quarter, we delivered a strong performance, highlighted by 9% operational revenue growth in our Pfizer biopharmaceuticals business, which will be the business that remains at Pfizer following the anticipated closing of the Abjon transaction. However, we also saw revenue impacted by two expected events. July loss of exclusivity in the U.S. for Lyrica and the July 31st completion of the consumer healthcare joint venture transaction with GSK for biopharmaceuticals. Once again, this group's outstanding growth was driven primarily by strong performance from our key growth drivers.

During my remarks, I will discuss our product every business performance the latest updates from our pipeline.

Endo plans for Pfizer falling a bit I anticipate this competition.

The object Marlin combination.

Which we continue to expect occur in meat 2020 .

During the quarter, we delever strength.

Highlighted by 9% operational revenue growth.

Pfizer biopharmaceutical.

Which would be the business with remains at Pfizer following the dissipates closing of the absorption.

Yes, it's already embarked it by two expected.

That's why luscious exclusivity in the U.S., but really cool.

And the July 31st Im pretty sure. It was a consumer focused joint venture transaction.

That's correct.

It does her what she wants.

Once again.

Such spending growth was driven primarily by strong performance in all key growth drivers.

This includes Ibrance xtandi.

Albert Bourla: These include Ibrance, Xtandi, Xeljanz, Eliquis, Vintakel, and Enlight as well as 15% operational growth in emerging markets, including 42% operational growth in China. Our biopharmaceutical business in China generated higher revenues this quarter than our observation business in the country. Our oncology business was particularly strong, up 30% operationally compared with a year ago quarter. Global revenues for Ibrance were up 27% operationally in the quarter to $1.3 billion.

It was.

Eliquis seem to kill and seemed like.

As well is 15% of personal girls in emerging markets, including 42% of personal growth in China.

Oh biopharmaceutical business and Simon generated higher revenues this quarter doesn't jump business becomes.

Okay and books of business was particularly strong up 50% of professionally.

Well the here to go after.

Global revenues for our brands were up 27% operationally in the quarter to $1.3 billion <unk>.

Albert Bourla: We saw strong revenue growth in both U.S. and international markets. We believe the continued growth in the U.S. is the result of our efforts to target specific physicians who had not been prescribing CDK inhibitors or had prescribed them to only a small set of patients. For Xtandi, Alliance revenues in the U.S. grew 25%. $225,000,000. In August, the FDA granted Xtandi a priority review designation for the treatment of men with metastatic hormone-sensitive prostate cancer, with a PDUFA date in December. This represents yet another potential growth driver for the brand.

So strong revenue growth in both <unk> and international Mike.

We believe the continued growth in the U.S. He was the result of all this.

Got to get the specifics resistance from could not be prescribing CDK inhibitors or had prescribes im only a small shop space.

We're extending the alliance revenues in the U.S. <unk>, 25% <unk>.

$225 million.

Oh.

The FDA granted Xtandi priority review designation for the treatment of men with metastatic Hamlin sensibly first they've gone through with it but do for date in December .

We.

Represents yet another potential growth driver for zebra.

Yeah.

Albert Bourla: In light revenues, increased 98% operationally to $139 million, including 240% growth in the U.S., where Enlita has benefited from recent FDA approvals for the combination of Enlita plus Bavencio and Enlita plus Keytruda in first-line treatment of advanced renal cell carcinoma patients. Beyond oncology, we had several other strong product performances. Global revenues for Xeljanz were up 40% operationally to $599 million. We saw continued volume growth in the rheumatoid arthritis indication, and their recent launches for psoriatic arthritis in the U.S. and for ulcerative colitis in both the U.S. and certain other developed markets also significantly contributed to the growth. Eliquis also continued to perform well.

<unk>, 98%, but directionally $259 million.

Included 250% gross in the U.S. work in light, though 'cause benefited from recent FDA approvals for the combination of larger plus provincial and in light of plus Keytruda in first line treatment effect the volumes to renal cell carcinoma patients.

The human college several others.

The performance.

Yeah their willingness for zones.

50%, Tennessee.

$599 million.

So continued volume growth in the rheumatoid arthritis indication.

And there instead of launches for sure you ought to go slightly in the U.S. and for sure I'd just like this in both the U.S. and served at Harvard developed markets also significantly contributed to the girls.

I look we also continued to perform way.

Albert Bourla: Global revenues were up 20% operationally to $1 billion. This growth was driven primarily by continued increased adoption in non-vascular atrial fibrillation, as well as oral anticoagulant market share gains in our rare diseases. Vintagel continues to ramp up nicely in the US following the May 2019 approval and launch. Our early disease awareness efforts have helped drive the diagnosis rate to greater than 4% in the quarter, compared with 1% prior to launch. As of the end of August, Approximately 4,100 patients had been diagnosed.

Global revenues were up 20% of progression to $1 billion.

Growth was driven primarily by continued increased adoption.

No involved we look at real fibrillation, as well as oral anticoagulant market share gains.

Looking at the rare diseases business, Vince Circle continues to ramp up nicely in the U.S. Holdings, a may 2019 approval and launch.

Oh early disease awareness before.

Helps drive the diagnosis rates to greater than four person in the corporate <unk>.

Compared with one person prior three items.

As a standalone.

Approximately 4001 fund with patients could've been diagnosed.

Albert Bourla: Approximately 2,600 patients received the prescription for Vintagel, and approximately 1,300 patients received the drug. This number does not include the Early Access Program. If you include this, the number of patients receiving the drug increases to approximately 1,500. Regarding Prevnar... Revenues were down slightly across the global frontiers.

<unk> 2600 pay some kids received a prescription for being bucket and approximately 1300 patients that received the drugs.

This number do not include the early access program. If you include these the number of patients receiving the drug increases to approximately 1005 from.

Regarding Brazil, selecting revenues were down slightly that girls to the global franchise.

I see a piece of data to recommendation in the U.S. for the vaccine for adults 65, and older which isn't what the effective until the publication of the <unk> targeting weekly reports.

Albert Bourla: ACIP's updated recommendation in the U.S. for the vaccine for adults 65 and older, which is not effective until the publication of the Morbidity and Mortality Weekly Report, reinforces that Prevnar-13 is considered safe and effective by both the FDA and ACIP. We look forward to successfully completing the Phase III studies for our investigational 20-valent pneumococcal conjugate vaccine candidate. This candidate represents a potential significant advance compared with a potential 15 valent by introducing all serotypes contained in PC15 plus five additional serotypes in sterile injectables. We are seeing our focus on manufacturing recovery taking shape. Global revenues increased 3% operationally, and U.S. revenues increased 1% operationally. We continue to expect this business to be a solid growth contributor in the future. Now, let me move it to up...

Reinforces <unk> from thing is considered safe and effective by both the FDA and you see a b.

We look for work to successfully completing the phase three studies for our investigational 20 fallen pneumococcal conjugate vaccine candidate.

The skandi as it represents a potential significant advancements compared with the potential shifting fallen by introducing all super types can thing in pursuit of 15, plus five additional supervisors.

You mean sterile injectables.

We are seeing our focus on manufacturing recovery taking shape.

Global revenues increased 3% of punishment and U.S. revenues increased 1% operationally.

Do you expect this business to be sold lead growth contributor in the future.

Now, let me move Lumpsum.

Revenues for our <unk> business were down 26% operationally in the quarter.

Albert Bourla: Revenues for our Abzone business were down 26% operationally in the quarter. The decline was driven primarily by expected significant volume declines in Lyrica in the U.S. due to multi-source generic competition that began in July 2019. Excluding the Lyrica impact, the decline would have been only 6% of operations. Upzone's China revenues increased 2% over a decade, despite the volume-based procurement program in the 11 states. Given this, we now expect Amazon's full year 2019 revenues in China to grow by mid to high single digits compared with full year 2018, instead of the low to mid single digits that we had predicted in our previous earnings call.

The decline was driven primarily by the expected significant volume decline seen lyrical in the U.S. used to multi sourced and as competition that began in July 2019.

Excluding the Larry Greenberg the decline books have been only 6% will perish.

<unk> Sino revenues increased 2% of Paris.

Despite the volume based procurement program in the 11 see this.

Given these we now expect observes full year 2009, you're ever going to sign up to grown by mid to high single digits compared with 40 year 2018, instead of low to mid single digits that we've had predicted you know previous gardening school.

Albert Bourla: Consumer Healthcare. For the third quarter of 2019, revenues totaled $377 million, down 54% operationally, reflecting the July 31, 2019, completion of the Consumer Healthcare Joint Venture transaction with GSK. Turning now to R&D, we continue to be excited with the progress we are making with our pipeline, both in terms of the breadth of opportunities and the depth of the site. Since our last earnings call on July 29, we have seen some exciting milestones. In vaccines, we announced positive preliminary results from a proof of concept phase two study of our investigational 20-valent pneumococcal conjugate vaccine under investigation for the prevention of invasive disease and otitis media in healthy infants.

Consumer healthcare the third quarter 2019 revenue stoping 377 million down 54% of personally reflecting that's why you felt the first 2019 completion of the consumer health care joint venture transaction with GSK.

Having no warranty continued to be excited with the progress we are making with our pipeline.

Both in terms of the breadth of opportunities ended up well the science.

Since our last earnings call on July 29.

It seems some exciting milestones.

In vaccines, we announced positive preliminary results from the belief of Texas Phase two study will fall investigational trend developing pneumococcal conjugate vaccine under investigation for the prevention invasive disease and tied this media you see infants.

Once data.

Albert Bourla: Once data with the fourth dose are available, we intend to discuss phase three plans with regulators. We also have completed enrollment in our three phase three pivotal clinical trials, evaluating our investigational 20-valent vaccine for the prevention of invasive disease and pneumonia in adults 18 years and older with rube diseases. We completed the transfer from Sangamo to Pfizer of the manufacturing processes for the investigational SB525 gene therapy for severe hemophilia A.

The fourth those are available.

Intent to discuss phase three plans with regulators.

We also have completed and Raymond you know three phase three pivotal clinical trials.

Raising our investigational 20 fallen vaccine for the prevention of invasive disease and pneumonia.

Adults 18 gears and old.

In the rare diseases.

We completed the transfer from Sun going with Pfizer over the manufacturing processes for the investigational as be 525 gene therapy for CV, and we'll figure out hey.

Albert Bourla: This month, we enrolled the first patient in the lead-in trial of the Phase III clinical program. We expect to begin dosing patients for that trial in the first half of 2020, on October 21st. Pfizer announced jointly with our partner, but the global phase 3 trial evaluating somatrogon once weekly in pre-pubertal children with growth hormone deficiency met its primary endpoint of non-inferiority to daily injectable genotropics.

This month, we have enrolled the first patient that lead even try a little bit phase three clinical program.

Expected to begin dosing patients for about three trial in the first half of trended threat.

On October 21st.

Pfizer announced jointly with our partner.

But the global phase three trial evaluating so microgram dose once weekly you pretty cubism children with growth hormone deficiency.

Met its primary endpoint of known you for the already do daily injectable thrilled.

We are very pleased with results because this potential once weekly the submission may offer significant benefits to patients.

Albert Bourla: We are very pleased with the results because this potential once weekly solution may offer significant benefits to patients. We are looking forward to presenting detailed data at a scientific conference and discussing them with the FDA and other regulators. Inflammation and Immunology, We recently announced positive top-line results from Jade Monod II.

We are looking for.

Presenting the data data.

Different conference and discussing them with the FDA and other regulate.

He inflammation in immunology.

We recently announced positive topline results from Dade Moeller too.

Albert Bourla: This was the second phase three pivotal study evaluating the efficacy and safety of our oral JAK1 inhibitor, Abrocitinib, in patients with moderate to severe atopic dermatitis. These findings are in addition to the positive results from our first phase 3 study with Abrocity in this indication, where the full data were presented earlier this month at a medical conference in internal medicine. We recently entered into a worldwide exclusive licensing agreement with Axia Therapeutics for Axia, ANG, PTL3, LRX, and Investigation. Antisense therapy being developed to treat patients with certain cardiovascular and metabolic diseases, the products currently being evaluated in a phase 2 study in patients with type 2 diabetes, hypertriglyceridemia, and non-alcoholic fatty liver disease.

These was the second phase three pivotal study.

Are you waiting the efficacy and safety people for oral JAK, one he'd be door, but sitting here in patients with moderate to severe atopic dermatitis.

These findings are in addition to the positive results for our first phase three study with a broader anything you'd be syndication what the full data were presented earlier this month and medical conference.

In internal medicine.

We recently entered into a worldwide exclusive licensing agreement with Akcea therapeutics.

Akcea, Hey, NZ B T O three electrics and investigate soon though.

Empty since therapy being developed to treat patients with certain cardiovascular and metabolic diseases.

The syrup is currently being evaluated in a phase two study in patients with type two diabetes.

Hi, Bill Thrillingly city, the media and no not wholly fought the liver disease.

We believe this novel therapy will complement our clinical midstates internal medicine pipeline and that or deep expertise in cardiovascular and metabolic diseases.

Albert Bourla: We believe this novel therapy will complement our clinical mid-stage internal medicine pipeline and that our deep expertise in cardiovascular and metabolic diseases will help allow this program to reach its maximum potential for patients. Lastly, in Oncology, from our recent acquisition of RA, we presented interim analysis results from the phase three beacon trial of Braptovi, Mectovi, and Cetuximab for the treatment of BRAF V600E mutant metastatic colorectal cancer.

Hope allow this program to reach its maximum potential for patients.

Lastly in oncology.

From a recent acquisition if I read we present the interim analysis results from the phase three become trial of but up Dolby mixed Dolby and system.

For the treatment Brussels, Vsix Hundrede E mutant metastatic colorectal cancer.

But I still be combinations, so statistically significant improvements in overall survival and objective response rates versus control.

Albert Bourla: Rest all the combinations, so statistically significant improvements in overall survival and objective response rates versus control. We recently submitted to the FDA a supplementary new drug application with this data, and as per our usual practice, we will announce their decision regarding acceptance for review, and I'm pleased to share that we now have U.S. launch dates for three of our biosimilars recently approved by the FDA. Zerabev is expected to launch on December 31st of this year, 2019, Rooksians in January of 2020, and Trasimera on February 15th of 2020.

We recently submitted to the FDA, it's implemented new drug application with these data and as split our usual practice, we will announce their decision regarding acceptance for review.

And I'm pleased to serve as we know her U.S. launch dates for three or four bio seamless recently approved by the FDA.

Zero, but is expected to loans on December 31st well this year 2019.

Look sense in generally tend to trend.

And for US he Mira on February 15th of 22, and so all the message.

Albert Bourla: So all. Of course, none of our breakthroughs will do patients any good if patients can't afford them. Pfizer remains committed to working with policy makers at both. Federal and State levels and on both sides of the aisle on common sense solutions to improve patient affordability. We are making progress in certain areas; for example, our proposals regarding biosimilars have been well received, and bipartisan legislation on this issue is advanced. We also continue to work with policymakers and others in the healthcare system to find ways to reduce out-of-pocket costs at the pharmacy counter. ESPECIALLY FOR SINGES, We are particularly encouraged that lawmakers recognize the need for an annual out-of-pocket cap in Medicare Part D, and we are aggressively pursuing value-based arrangements that tie reimbursement to the ability of our medicines to produce positive outcomes for patients. While there has been a lot of discussion around less constructive proposals, it's difficult to imagine Congress supporting policies that will explicitly stand in the way of life-saving medicines being developed and made available to American patients.

Of course known for breakthroughs patients any good these patients can affords them.

Pfizer remains committed towards it was all decision makers bolt.

The federal and state levels and on both sides will be.

Commonsense solutions to improve pace and I've heard limit.

We are making progress in certain areas. For example, all proposals are garden bar stimulus have been well received and bipartisan legislation on this issue is advancing.

We also continued to work with policymakers and others in the healthcare system to find ways to reduce the focus of course, the pharmacy cone.

Especially for seniors.

We are particularly in Congress, but lawmakers to recognize the need for an honor roll out of pocket comp in Medicare part D.

And we are aggressively pursuing value based arrangements, but hi reimbursement to the ability of our medicines to produce positive outcomes for patients.

Albert Bourla: Therefore, we remain confident that common-sense solutions... can be found that will drive continued innovation and benefit pace. In summary..., we turn in another solid core, and our pipeline continues to be a source of great hope and excitement for our company. Our shareholders and the patients who rely on our innovative medicines and vaccines. We also raised the midpoints for our 2019 revenue and adjusted diluted EPS guidance ranges to reflect our strong performance today, as well as our confidence in the business going forward. Frank will provide more details on this in a moment, following the expected close.

Why is there has been lots of discussion around less constructive proposals.

It's difficult to margin Congress supporting policies that we explicitly stent in that way of lifesaving medicines being developed and made available to a Medicaid patients.

Before we remain confident that Coleman said sort of <unk>.

Can be phone, but will drive continued innovation and benefit pace.

In summary.

We turned in another solid quarter and our pipeline continues to be a source of grateful.

Albert Bourla: After the Abzon Myelin Transaction, Pfizer will be a smaller, science-based company with a singular focus on innovative biopharmaceuticals. All our current growth drivers and pipelines will remain with Pfizer for this reason, and we expect Pfizer's five-year revenue CAGR to be approximately 6%, and for that growth to begin immediately upon the close of the transaction. Our biopharmaceuticals group is already growing at a similar pace, starting in 2026. We will have a new set of LOEs, but we expect the new wave of compounds currently in the pipeline, along with the acquisitions of Theracon and RA Therapeutics, our equity interest in IVVET Therapeutics, and the unlicensed investigational therapy from Axia to help mitigate the impact of this alloying. These agreements represent the types of targeted BD initiatives we will continue to pursue to help strengthen our base for the second half of the next decade.

And excitement for our company, our shareholders and the patients who rely on our innovative medicines and vaccines.

We also raised the Midpoints for all 2019 revenue and adjusted diluted EPS guidance ranges.

It would affect our strong performance today as well as confidence into business going forward.

Ron will provide more details on these in a moment.

Following the expected close.

UBS and Mylan transactional next year.

Pfizer will be smaller.

Science based company with a singular focus on innovative biopharm.

All our current growth drivers pipeline will remain with Pfizer for obvious reasons.

And we expect Pfizer's five year revenue CAGR to be approximately 6%.

Albert Bourla: These are deliberate moves we are making because of the confidence we have in our science and our ability to commercialize important new medicines and vaccines and in our ability to continue to invest in growth while returning capital to investors. Now, let me turn it over to Frank to provide details on the quarter and our outlook for the remainder of 2019.

And for but growth to begin immediately upon the close of the transaction.

Our Biopharmaceuticals group is already growing at this pace.

Starting in 2026, we were having you settle salaries.

Expectancy, new wave of compounds caught in the into pipeline along with the acquisition, it's a fair Ocwen and I race at opportunities our equity interest in the vet therapeutics and fit in licensed give us additional therapy for marks here to help mitigate the impact of these hillary's.

Frank D'Amelio: Thanks Albert. Good day, everyone.

Frank D'Amelio: The charts I'm reviewing today are available on our website. Now moving on to business performance, our biopharmaceutical group business recorded nine percent operational revenue growth in the third quarter 2019, driven primarily by Ibrance globally, which recorded revenues of nearly 1.3 billion, an operational increase of 27 percent. This was composed of 48% operational growth in international markets and 18% growth in the U.S. Xeljanz globally was up 40% operationally, primarily driven by 34% growth in the U.S., as well as 61% operational growth in international markets. Eliquis globally was up 20% operationally, the hospital business up 9% operationally in emerging markets and the U.S., primarily driven by continued growth from anti-infective products Vindiquil with sales of $156 million in the quarter, $79 million in the U.S. following the launch for cardiomyopathy, and then LIDAR in the U.S., where revenues increased to $139 million, primarily driven by increased utilization in combination with certain checkpoint inhibitors for the first-line treatment of patients with advanced renal cell carcinoma.

These agreements for present the types of targeted BD initiatives, we will continue to pursue.

Cope strengthen or substrate for the second half over the next decade.

These are the Liberty is we are making because of the confidence we Serbian or science.

Our ability to commercialize important new medicines and vaccines.

And in our ability to continue to invest in growth, while returning capital to investors.

Now, let me turn it over to front.

To provide details on the quarter and our outlook for the remainder <unk> 2019 fun.

Thanks, Albert Good day, everyone. The charts on reviewing today are available on our website.

Now moving onto business performance.

Biopharmaceutical group business recorded 9% operational revenue growth in the third quarter 2019, driven primarily by I brands globally, which recorded revenues of nearly 1.3 billion and operational increase of 27%. This was composed of 40% operational growth international markets and 18%.

Growth in the U.S.

Celgenes globally, a 40% operationally, primarily driven by 34% growth in the U.S. as well as 61% operational growth in international markets.

Liquids globally of 20% operationally the hospital business up 9% operationally in emerging markets and the U.S., primarily driven by continued growth from anti infective products in China and the November 2018, U.S. launch of Pansy.

Frank D'Amelio: Partially offset primarily by lower revenues for Embrel Internationally, down 19% operationally, primarily reflecting continued biosimilar competition in most developed European markets, and Prevnar 13 in the U.S., down 7% due to lower government pediatric purchases in the third quarter of 2019, and continued decline in revenues for the adult indication. Revenues for our Upjohn business in the third quarter decreased 26% operationally, primarily driven by the expected significant volume declines for Lyrica in the U.S. associated with multi-source generic competition that began in July of 2019. Excluding the unfavorable impact of Lyrica in the U.S., third quarter 2019 revenues for Upjohn declined 6% operationally due to continued generic competition for certain off-patent products. These results were partially offset by revenues in China, up 2% operationally, primarily driven by volume growth for Lipitor and Norvask in provinces where the volume-based procurement program has not yet been implemented, as well as operational growth from Viagra, and partially offset primarily by volume declines and unfavorable pricing impact in cities where the VPP program was implemented in March of 2019.

Then the cool with sales of 156 million in the quarter with 79 million in the U.S. following the launch for cardio My apathy.

And then lighter in the U.S., where revenues increased 239 million, primarily driven by increased utilization in combination with certain checkpoint inhibitors. So the first line treatment to patients with advanced renal cell carcinoma.

Partially offset primarily by lower revenues for umbrella internationally.

90% operationally, primarily reflecting continued biosimilar competition, most developed European markets.

I'm not 13 in the U.S. down 7% due to lower government pediatric purchases in the third quarter 2019, and continued decline in revenues for the adult indication.

Revenues for our up John business in the third quarter decreased 26% operationally, primarily driven by the expected significant volume declines for lyric it in the U.S. associated with multi source generic competition that began in July of 2019.

Excluding the on favorable impact of wyrick in the U.S. third quarter 2019 revenues were up John declined 6% operationally due to continued generic competition for certain for cotton products.

These results were partially offset by revenues in China up 2% operationally, primarily driven by volume growth Hulliber tour, and or basket and provinces, where the volume base procurement program has not yet been implemented as well as operational growth from my Agra, and partially offset primarily by volume declines in unfavorable pricing impact.

In cities, where the VBP program was implemented in March 2019.

Frank D'Amelio: Pfizer now expects Upjohn revenues in China to grow operationally by mid-to-high single digits for the full year of 2019 compared with 2018. Revenues for the consumer health care business in the third quarter are not comparable with the third quarter of last year due to the completion of a consumer health care joint venture transaction with GlaxoSmithKline. This quarter's reporting reflects approximately one month of consumer health care domestic operations and approximately two months of consumer health care international operations versus third quarter of 2018 revenues, which reflect the full three months of consumer health care global operations. In addition, Pfizer recognized an $8.1 billion pre-tax gain upon the completion of the consumer health care joint venture transaction, which reflects the difference in the fair value of Pfizer's 32% equity stake in the joint venture compared to the carrying value of its consumer health care business.

Hi, guys are now expects of join revenues in China to grow operationally by mid to high single digits through the full year 2019, compared with 2018.

Revenues for the consumer healthcare business in the third quarter or not comparable with the third quarter of last year due to the completion of the consumer healthcare joint venture transaction with Glaxosmithkline.

This quarter's reporting reflects approximately one month of consumer health care domestic operations and approximately two months of consumer healthcare international operations versus third quarter, 2018 revenues, which reflect the full three months of consumer health care Global operations.

They should cause a recognized an 8.1 billion dollar pre tax gain upon the completion of the consumer healthcare joint venture transaction, which reflects the difference in the fair value of Pfizer's, 32% equity stake in the joint venture compared to the carrying value of this consumer health care business.

Frank D'Amelio: Finally, diluted weighted average shares outstanding declined by approximately 337 million shares to 5.65 billion versus the year-ago quarter, primarily due to Pfizer's ongoing share repurchase program. Reflecting the impact of share repurchases during 2018 and 2019, partially offset by dilution related to the share-based employee compensation program, foreign exchange negatively impacted third quarter 2019 revenues by approximately $215 million and adjusted cost of sales and positively impacted In aggregate, foreign exchange had a 2 cents per share negative impact on adjusted diluted EPS compared to the year-ago quarter. Moving on to 2019, we raised the midpoint of our 2019 guidance range for revenues by $200 million to $51.2 to $52.2 billion, composed of $400 million of operational revenue growth, partially offset by a $200 million unfavorable impact from changes in foreign exchange. Good morning.

Finally diluted weighted average shares outstanding declined by approximately 337 million shares to 5.65 billion versus the year ago quarter, primarily due to pfizer's ongoing share repurchase program, reflecting the impact of share repurchases. During 2018, 2019, partially offset by dilution related to share.

Our based employee compensation programs.

Foreign exchange negatively impacted third quarter 2019 revenues by approximately 215 million, an adjusted cost of sales and positively impacted adjusted assign a an adjusted R&D expenses.

In aggregate foreign exchange had a two cents per share negative impact on adjusted diluted EPS compared to the year ago quarter.

Moving onto 2019 financial guidance, we raised the midpoint of our 2900 guidance range revenues by 200 million to 51.2 to 52.2 billion composed of 400 million of operational revenue growth, partially offset by a 200 million dollar unfavorable impact from changes in foreign exchange.

Frank D'Amelio: Sorry for the technical problems, everyone, so let me continue. This is Frank.

Good morning.

Right.

Frank D'Amelio: In addition, we now expect adjusted cost of sales to be in the range of 19.3 to 19.8 percent, adjusted SINA expenses to be in the range of 13.5 to 14 billion, adjusted R&D expenses to be in the range of 7.7 to 8.1 billion, and adjusted EPS to be in the range of 294 to $3, from 276 to 286, an increase of 16 cents since the previous quarter, reflecting an 18 cents operational improvement, partially offset by This guidance assumes diluted weighted average shares outstanding of approximately 5.7 billion shares, which reflects the weighted average impact of share repurchases totaling 8.9 billion executed in 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.

Sorry for the technical problems everyone. So let me continue its Frank in addition, we now expect adjusted cost of sales to be in the range of 19.3% to 19.8% adjusted has signed a expenses to be in the range of 13.5 to 14 billion adjusted R&D expenses to be in the range of 7.7 to 8.1 billion and adjusted EPS.

Yes to be in the range of to 94 to $3 from 270 60 to 86, an increase of 16 senses to previous quarter, reflecting 18 cents operational improvement, partially offset by a two cents unfavorable impact from recent changes in foreign exchange rates.

This guidance assumes diluted weighted average shares outstanding of approximately 5.7 billion shares which reflects the weighted average impact of share repurchases totaling 8.9 billion executed in 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.

Frank D'Amelio: Our 2019 Guidance for Adjusted Other Income Deducts and the Effective Tax Rate on Adjusted Income did not change. We continue to expect Adjusted Other Income Deducts to be $200 million of income and the effective tax rate to be approximately 16%. Now moving on to key takeaways.

Our 2019 guidance for adjusted other income the ducks and the effective tax rate on adjusted income did not change. We continue to expect adjusted other income deducts to be 200 million of income and the effective tax rate to be approximately 16%.

Now moving on to key takeaways, we delivered a strong quarter revenues with the Pfizer Biopharmaceuticals group through grew 9% operationally versus a year ago quarter, driven by Ibrance, Celgenes, Eliquis, Vin nyquil and lighter and extending we updated our 2019 financial guidance, increasing the midpoint of our just.

Unknown Executive: We delivered a strong quarter. Revenues for the Pfizer Biopharmaceuticals Group grew 9% operationally versus the year-ago quarter, driven by Ibrance, Xeljanz, Eliquis, Vindiquil, LIDAR, and Xtandi. We updated our 2019 financial guidance, increasing the midpoint of our adjusted EPS guidance range by $0.18 operationally. We accomplished multiple product and pipeline milestones since our previous quarterly update, and we returned $14.9 billion to shareholders through the third quarter through a combination of dividends and share refunds. Finally, we remain committed to delivering attractive shareholder returns in 2019 and beyond. Now, I'll turn it back to Chuck.

EPS guidance range by 18 cents operationally, we accomplished multiple product and pipeline milestone since our previous quarterly update and we returned 14.9 billion to shareholders through the third quarter through a combination of dividends and share repurchases. Finally, we remain committed to delivering attractive shareholder returns and 2019 and beyond.

Now I'll turn it back to Chuck.

Operator: Thank you, Albert and Frank, for the prepared comments. Operator, can we please move to the Q&A session? If you would like to ask a question, please press star then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Chris Schott with J.P. Morgan.

Thank you Albert and Frank for the prepared comments operator can we please move to the culinary session.

If you will like to ask a question. Please press Star then the number one on your telephone keypad well pause for just a moment to compile the Q1 day roster.

Your first question comes from Chris Schott with JP Morgan.

Great. Thanks, very much for the questions I guess two here first I know, you're not giving 2020 guidance at this point, but relative to initial 2020 comments made up John maybe just give us any you just flavor of terms of business trends or any franchises that are performing ahead or behind maybe sounds initial expect.

Chris Schott: Great, thanks very much for the questions. I guess I'll just ask two here.

Albert Bourla: First, I know you're not giving 2020 guidance at this point, but relative to the initial 2020 comments you made up, John, maybe just give us some, just the flavor of terms of business trends or any franchises that are performing ahead or behind maybe some of those initial expectations. And my second question was about kind of the next wave of pipeline opportunities. Because it seems to me when I hear the enthusiasm you have about that pipeline, that there is a bit of a disconnect between street expectations and Pfizer expectations for the pipeline. So when you look at that portfolio, are there assets in particular where you see a gap relative to, I guess, what we're thinking versus your expectations as we kind of focus in on some of these updates over the next few years? Thanks so much.

Patients and my second question was was about kind of the next wave of pipeline opportunities because it seems to me when I hear the enthusiasm you have bought that pipeline that there is a bit of a disconnect between street expectations and find your expectations on the pipeline. So when you when you look at that portfolio, our their assets in particular, where you see it.

Yes, a gap relative to take us what we're thinking versus versus your expectations as we kind of focusing on some of these updates over the next few years. Thanks, so much.

Albert Bourla: Thank you, Chris. Let me try to speak a little bit about your question on guidance for next year, and then I will ask Frank to help me with that, and then I will ask Michael Dolsten to speak about the pipeline. Let me start with the 2020 guidance. We don't give guidance before our board approves our operating plan.

No. Thank you. Thank you Chris let me try to speak about your question one Guy that's sort of next year than I was just seven Bucks and then I will ask Michel Dolsten to speak about pipeline, let me start with it's Randy trend because.

We don't give guidance Oh before our board approves our president and these every year happens in the middle of December composite every year and usually we do we think the next earnings call will cover in generally.

Albert Bourla: And this, every year, happens in the middle of December of every year. And usually, we do it on the next earnings call, but it happens in January. This year, in the middle of the year, in July, because...

Here in the mid the off over the years why because of a transaction.

Albert Bourla: [inaudible]

Somebody myself targets for ups as very solidly fell but he's going to be okay. If we do not give also some financial targets for although the main call 2020 , but of course, we developed with L. OCO funding Olson with great distance from the here when the plant. So we were approached.

Albert Bourla: Remain Co in 2020, but of course, we did that with a lot of unknowns and with great distance, the year of 2020 so we were appropriately costed. Since then, a lot of things happened, and happened in the areas that we wanted to see how things could perform. For example, we were not certain how the ACIP recommendation for Prevnar would affect adults. We were not certain how... The label for Xeljanz on the black box that we received, the change in the label for Xeljanz, how that would affect the prescribing habits of physicians. We were not sure how Ibrance's effort that started at the beginning of this year would increase...

We caution I would say.

Since then.

The things Hopper and pop in the areas that we wanted to see how things will perform for example, we were not certain how the AC I'd be recommendation for Prevnar would affect the adult.

We were not served them well.

The label for a self service in the Black box of received good things in the label for ourselves on how that's going to affect the prescription hobbies.

Oh for physicians, we were not sure how ibrance effort that started in the beginning of this year to increase the market size rather than focus on increasing our own markets overall and.

Albert Bourla: The market size, rather than focus on increasing our own markets, is wrong, and that had given very good results in the second quarter will continue as we go into the third quarter. We were not certain how the new...

But given very good results in the second quarter will continue as we go into this airport.

Well, we were not certain how the newly approved a white compared to eventually together with bump into them together with K through the indication.

Albert Bourla: in live compared to Bavencio, together with Bavencio and together with Keytruda indication will transform into performance in the market. And we were not certain how Xtandi's new indications would perform and also how the new product, which is our Vintaker.

[noise] transform.

Into performance into the Mark.

And we were not the sector, how excited to new indications were before and also how the new product, which is oh finfet carrying that WMAL. Buffy eventually we will do.

Albert Bourla: Lyntec

Albert Bourla: and Cardiomyopathy. As a matter of fact, all six of them did much better than what we were expecting, and this is extremely, extremely positive, of course. We are not going to provide now guidance for next year, but definitely things have improved compared to what we thought in the second quarter. We have provided $7.5 to $8 billion for next year, and we had said that which by the way is significantly lower than what Amazon is doing now because we wanted to make sure that we incorporate the impact predominantly in China of the volume-based procurement, and for the same reasons we said that the second half of this year will be lower and that will drive our growth in China in general to be low, So this is growth for time, this is for time.

As opposed to mother, all six of them did much better than what we were expecting and he sees a extend mixer positive of course, we ever going to provide guidance for next year, but.

Yes.

Things have improved compared to what we fold into second quarter moving clubs, while also reducing the sentiment. We had provided 7.5 to eight being goes for next year.

And with that said.

We spend the waste significantly lower than weapons anything no because we wanted to make sure but we incorporate theme park pardon me I mean sign up.

They bought a base the procurements.

On the same reasons, we said that the second half of this year would be lower and a thoughtful thrive.

Oh golfing signings I don't know can be low single meetings, all its growth port site visits for time.

Albert Bourla: In fact, we upgraded. We are saying that for this year, our growth will be... Meet to hide the disgrowth in the China portion of the AppZone business, and again We are not going to provide guidance for 2020 for AppZone, but we will do that together with the total company after our board approves it in mid-December. But we have updated the guidance for this year, obviously because of the very good results of the third quarter. Frank, anything to add to that?

You talked to the upgrades and buttoned up and we are saying about for this year our goals.

Meets the heart beat this growth in China portion will be up some business and again you haven't began to provide guidance for 2024 ups on a bus.

Together with the total company.

After our board approves.

December but we have updated the guidance for this year, obviously be closer to the very good results oversight corpus flunk anything threats with about I would just add two things one our current expectation as we would provide guidance for 2020 like we typically do on our fourth quarter earnings call, but the only other thing I would add is but please understand that we intend to improve upon.

Albert Bourla: I would just add two things. One, our current expectation is that we will provide guidance for 2020 like we typically do on our fourth-quarter earnings call. But the only other thing I would add is, but please understand that we intend to improve upon the 2020 numbers that we previously issued that we talked about that were appropriately cautious for the reasons that Albert discussed.

On the 2020 numbers that we previously issued we talked about that were appropriately cautious for the reasons that Albert discussed.

Right now from the financials, let's go to things that are driving the financials, which is our second before pipeline. So.

Frank D'Amelio: Thank you. Now, from the finances, let's go to things that are driving our strength of our pipeline. So Michael Dolsten, please.

Mike Adults thing. Please go ahead. Thank you Albert So let me say a few words first we have a volume strong pipeline with 98 projects from phase one through registration and if.

Michael Dolsten: Thank you, Albert.

Michael Dolsten: So, let me say a few words. First, we have a large and strong pipeline with 98 projects from phase one to registration, and its contribution comes from all of our five therapeutic areas, and it is driven by multiple science franchises and not dependent on one or two vulnerable compounds. Number two, our R&D productivity has improved consistently over the last few years. Let me exemplify this with our phase two success rates have now been exceeding 40 percent for a number of years, well above the bench. We estimate that it will happen early between 2018 and 2020.

Its contribution from all of our five therapeutic areas and it is driven by multiples science franchises and not dependent on one or two vulnerable compounds.

Number two.

R&D productivity have improved consistently over the last few years, let me exemplified with our phase two success rates have not been exceeding 40%.

For a number of years well above benchmark.

We estimate that only between 18 and 20 to 20 to 25 to 30 approvals.

Michael Dolsten: Estimate.

Michael Dolsten: From 2018 to here today, we're already at 11. Within that approval pipeline, let me exemplify our focus on the 15 in 5 strategy to deliver blockbuster approval. And within that cohort, as you have seen, we have had really good progress. And both phase two and phase three success rates are high and robust in all of these most valuable components.

From a twin teams into year to date, we already had 11.

We didn't we didn't that approval wave.

Let me exemplify our focus on to 15 in five strategy to deliver a blockbuster approvals and we didn't that cohort as you have seen we've had really good progress and both phase two and pay seats C suite sexist right or high and robust and once that is most valuable pump.

No I wanted to conclude and give you more near term opportunities.

Michael Dolsten: Now, I wanted to conclude and give you more of the near-term opportunities for our pipeline. So between now and the end of 2020, you may want to remember the metrics 15 plus 10 plus 5 plus 5. 15 relates to 15 POC readouts, up to 15 POC readouts, 10 to 10 phase 3 starts, and then 5 for 5 phase 3 readouts and 5 key approval. Let me give you a few examples of the PUCs that you can keep an eye on.

Our pipeline so.

Between now and and twins, it's been the you may want to remember them at Three Q1 5, plus 10, plus five plus five.

If the in relates to 15 to see Readouts up to 50 people see right we though.

10 to.

10 phase threes thoughts and then 545 phase three results and five key approvals.

Let me give a few at something on that Pcs that you can keep an island.

We have the five different do you see up to five different PC read out in our Jack franchise, including any indications calls.

Michael Dolsten: Topical atopic dermatitis, psoriasis, vitiligo, and also psoriatic arthritis for an oral drug.

Topical atopic dermatitis psoriasis beat the logical and also.

So I think it's right for an oral drugs.

We had a strong momentum even though you therapy platform a bit mentioned in his introduction, however, fixate gene therapy.

Michael Dolsten: A strong momentum in our gene therapy platform, Albert mentioned in his introduction our Factor VIII gene therapy where we are expecting a POC readout soon, and I have started to enroll patients for baseline characteristics in Phase 3. We are progressing well with our DMD gene therapy, and we have reached proof of concept for our T-seffective pathway inhibitor monoclonal antibody. We're also going to strengthen our hemophilia, and phase 3 plans are underway. In internal medicine, I want to punctuate the Angioprotein L3 deal pending close, which we expect to have a POC readout early next year. Our vaccine franchise also has a number of intriguing data sets to be shared. Obviously, the PNG Pediatric post-deforced dose, RSV maternal phase 2 data next year, followed by phase 3 start pending data. And also in our meningococcal pentavalent vaccine, we have actually reached a very promising phase.

Well, we are expecting as soon.

Few see read out and started to enroll the floor baseline characteristics in phase three.

We are progressing well with our DMD gene therapy, and we have that reach proof of concept flow Ts effective pest when he but the monoclonal antibody. We're also going to strengthen our hemophilia and phase three plans are underway.

An internal medicine I want to penetrate.

Thank you put <unk> and three deals pending close that we expect to have a few see read out early next year.

Oh vaccine franchise also has a number of intriguing.

Datasets to be shed, obviously that PNG pedretti close to force those RSV met turned on phase two data next year full about phase three start pending data and also you know what may need to Cook pentavalent vaccine, we have actually reach very promising phase two readout and our review.

Michael Dolsten: and are reviewing them to be shared for a potential phase three start. Finally, in our oncology franchise, we have the readout next year expected for our ENCOR B-RAF MEC first line. We have data coming from our next generation.

You intend to it you said for a potential phase three star finally in our own pull Lydia.

Franchise, we have that the read out next year expected for EMCOR B RAF Mek first line, we update the coming from Oh, a next generation CD case and from a a her to breast cancer <unk>. So as you can see a simplified some local demand if you will see readouts coming from now to next year.

Michael Dolsten: or two breast cancer. So, as you can see, I exemplified some of the many POC readouts coming from now to next year and just punctuated that, of course, the late-stage pipeline to which you're more familiar with.

And just hung chase that supports the late stage pipeline to which you are more familiar with a major Ah interesting thing 2020 hi on everyone's agenda is the ibrance breast cancer, which we use <unk> for two and I feel that encouraged and optimistic about that Silgans ankylosing spondylitis.

Michael Dolsten: major interesting things in 2020. High on everyone's agenda is the Ibrance Early Breast Cancer, which we strongly look forward to, and I feel encouraged and optimistic about that. Xeljanz and Closing Spondylitis, JAK1 in the Comparator Atopic Dermatitis Study, that is the final data set for then moving to potential submission. And, of course, then P&G Adult. I'm sorry for the somewhat lengthy introduction, but it actually reflected the many exciting things to happen from now to the end of 2020.

Yes, one in the comparator atopic dermatitis studies that is the final data set for then moving to potential submission and of course MPG adult.

I'm, sorry for somewhat lengthy but it's actually reflected the many exciting things to happen from out the end of expenses Oh. Thank you Michael.

Operator: Great, thank you. Can we move to the next question, please, operator? Your next question comes from Umer Raffat from Evercore. Hi, thanks so much for taking my questions and congratulations on the quarter. I want to touch up on three things today, if I may.

Great. Thank you we moved to the next question. Please operator.

Your next question comes from O'meara Hawk from Evercore.

Hi, Thanks, so much for taking my questions on congrats on the quarter I I wanted to touch up on three things today, if I may 1st Albert there's been a lot investor questions on whether Pfizer could potentially be incident M&A to recover the EPS dilution because of up John I, just I just wanted to ask.

Umer Raffat: First, Albert, there's been a lot of investor questions on whether Pfizer could potentially be interested in M&A to recover the EPS dilution because of Upjohn. I just wanted to ask where you stand on that, the first one. Secondly, on Upjohn, I noticed there was an S4 filed yesterday where Pfizer's internal forecast was that Upjohn stays at $7.8 to $8 billion post-2020, even though there would have been a Lyrica patent expiry worth $800 million in Japan, and even though China, 4 plus N, would have intensified. So my question is, what's driving this potential $1.5 to $2 billion worth of revenue shortfall to keep Upjohn And finally, on Tefamidis, it's very encouraging to see you're already at 4,800 patients. And my question is, is it inconceivable that Pfizer could hit more than 40,000 patients diagnosed at peak? Thank you very much.

Where were you shake out on that the first one secondly on up John I noticed there was an S. Four filed yesterday, where pfizer's internal forecast was that up John stays at $7.8 billion to $8 billion post 2020, even though they would've been a lyric a patent expiry worth 800 million in Japan, and even though China for plus and would have intensified. So my question is what.

Driving this potential one and a half to 2 billion worth of revenue shortfall to keep up John stable at close to 8 billion plus 2020, and finally on to feminist it's very encouraging to see you're already at 4800 patients and my question is is it conceivable is it inconceivable that Pfizer, but it had more than 40000 patients diagnosed at peak. Thank you very much.

Excellent Christmas on muscles, let me start within M&A or Frank can cover a the ups on a full cost and then of course, a Angela will speak about the family. This on the M&A strike as it looks it seems that July of 2018, when I see footprint mall sort of apart.

Albert Bourla: No, an excellent question, Somer. So, let me start with an M&A. Frank can cover the Abzon forecast, and then, of course, Angela will speak about the families. On the M&A strategy, look, since July of 2018, when I, as Chief Operating Officer at the time, articulated the strategy going forward on several items, including the M&A strategy, we have been very consistent. Right now, we are poised for organic growth, which we forecast to be on a five-year schedule at six percent. I know the analyst' expectations are even higher. This number, even the six of us, compared to the analysts' expectations, will likely position... It's not likely, but it positions us, compared to the data and our peer set, let's say the top 10 to 15 companies in the industry.

Articulated the strategy going forward on several items, including M&A strategy, we already consistent.

Right now we are poised for organic growth organic growth, we forecast would be one in five years Cagar, 6% I know the honest expectations even higher.

This number even the six a loss compared to be honest expectations like what position. It looked like these positioning us compared to the paper and all peer set let's say the fault and 16 companies English there will be the second largest <unk> second fastest growing company in the next five years with a 6%.

Albert Bourla: and the second largest company in the next 5 years with a 6% growth rate. And actually, the largest in terms of producing growth dollars because of our size.

Pencil for it and actually losses in terms of producing to gross dollars. Because we are going to of course, if our size of course, so any exports looks are going to do I'm not going so far valuable. So we are not the name of the game for US like I said this many times like this topline growth and.

Albert Bourla: So, any efforts that we are going to do are not going to jeopardize that. So, we are not, the name of the game for us, I have said it many times, is top-line growth. And M&A of scale, they have the tendency, one, to be very difficult to find someone that will not be accretive, given that we are the second fastest in our group.

Emanating Oh scale they have the tendency one very difficult to find someone got will not be accretive given that you have a second process you know if at all and secondly is very sharp people personnel.

Albert Bourla: and secondly, it is a very destructive operation. And we can always do a large M&A, but we have a very clear window of opportunity now to get it right with our pipeline, to get it right with our launches. And as you can see, we are doing very well. I don't want to put that at risk.

And we can always do lots M&A <unk>. They can get window of opportunity you know to get to thrive flooring to get to try to go launches as you can see you are doing very well I think one bucket freeze all business development strategy will continue be all all but we've had a focus.

Albert Bourla: [inaudible]

Albert Bourla: Business Development Strategy will continue to be

Albert Bourla: Bolt-on

Albert Bourla: That will have a focus on R&D. And when I speak about R&D, again, as I said before, I want to be very clear. We are looking for Phase 2 assets, ready Phase 2, ready Phase 3, assets that, like the ones that we did in the last four business development activities, that will provide revenues in the post-26-27 period when we start filling again some of the alloys, and we're going to make sure that the 6% growth is sustainable for the decade. The whole decade, rather than only for the first six, seven years of this. So this is our strategy; we are not looking for a large M&A right now, and with that, I will move to Fran to speak a little bit about the up-zone projections and what we had in our board presentation, which I think is pretty much in line with what we gave as guidance for next year.

R&D and when I speak about a new again as I said before I want to be very clear. We are looking for phase two offices already phase three registration study Austin's up like the ones that we need the loss for business development activities, but we'll worldwide revenues.

Almost 20 697 periods when we started feeling again some of the away and the wouldn't make sure, but the 6% growth sustainable over the decade hold became rather than only for the first six seven years would be the game. So this is always throbbing or we're not looking for logs M&A right now and that we thought that we'll move to front the speaker.

The bulk of the optimal projections on what they said they know our board presentation, which I think is pretty much in line with what we gave as a as a guidance for next year, yes. So for up John The 2020 revenue number that we put out there was 7.5 to 8 billion badly that number.

Frank D'Amelio: Yeah, so for Upjohn, the 2020 revenue number that we put out there was $7.5 to $8 billion. By the way, that number...

Reflected the lyric are elderly and it reflected the China VPP in fact, we anticipated the expansion of the China BBB in that number in terms of good expansion go for 11 cities toll provinces, 50% chair to 70% share that that range anticipated the impact of VBP in China. So couple of comments on.

Frank D'Amelio: [inaudible] How did it grow 2%? It basically was able to mitigate the impact of the procurement program through geographic expansion within the country. We believe that that's an opportunity that continues on a going forward basis. We also believe that there are opportunities for that business in emerging markets outside of China and continuing opportunities for that business in the rest of the world. Given the breadth of the portfolio that it's going to have and, quite frankly, the pipeline that the new company has on a going forward basis, so that's why you get to the numbers that were put into the S&P.

How do we get to the rhythm of the numbers that you alluded to so first think about this quarter appeal in China. This quarter to quarter grew 2% how does it grew 2% basically it was able to mitigate the impact of the procurement program, which geographic expansion within the country. We believe that that's an opportunity to that continues on a going forward basis. We also believe.

There's opportunities for that business in emerging markets outside of China, and continuing opportunities for that business and the rest of the world given the breadth of the portfolio, it's going to have and quite frankly, the pipeline that the new company has on a going forward basis. So that's that's why you get to the numbers that were put into the S.

And that ends up at least at both the comedies.

Frank D'Amelio: And then Angela, please, about the families.

Angela Hwang: So thanks for the question. Certainly, we are extremely pleased with the diagnosis rates of ATTRCM that we have seen to date, which are about 4 to 5. But even with that, it's important to remember that it is still a severely underdiagnosed disease, and we have a long way to go in terms of achieving what we believe our patients deserve. As you know, because we've spoken about this over the last several quarters, we have been intensely focused on our educational efforts to help physicians suspect a disease. And this has been helped by the recently published Red Flag Symptoms, which make it easier for physicians to see the possible clinical symptoms of ATTRCM and help them to raise suspicion of this disease.

Said, they sort of question I'm, certainly, we Oh I'm extremely pleased with the diagnosis wave of entity RCM that we have seen to date, which is about 4% to 5%, but even with that and it's important to remember that it is via the diagnose disease and we have a long way to though intensive achieve.

Being what we believe patients to the.

There are two aspects of this diagnosis suppose if suspicion.

Shifting the disease in the second is the ability to detected.

And as you know because we've spoken about this over the last several quarters. We have been intensely focused on a educational efforts to help physicians suspect the disease and again. This has been helped by the recently published Red flags symptoms, which makes it easier for physicians see the possible clinical symptoms of 18.

Yes, and helping them to let dr. suspicion that the disease from there a we had been educating around the use of can take a fee as a non invasive mean to diagnose 82 I see.

Angela Hwang: From there, we have been educating around the use of Tentagraphy as a non-invasive means to diagnose ATTRCM, and we're pleased to see that, to date, about 90% of our diagnosis is now being driven through Syngtygma. Centigraphy, as you know, is a well-established imaging technique, and it's widely available across the U.S. in cardiology practices. Actually, we estimate about 15,000 of these diseases are available in cardiology practices throughout the country. And we're seeing, then, this willingness and the readiness of physicians to adopt ATTR-CM diagnosis through this mechanism. I know that benchmarks that we have quoted in the past show that a diagnosis rate of about 30 to 50% is what most rare diseases have achieved up till now, and that is what drove our peak estimate. However, we are learning a tremendous amount every single day about this particular disease, about what it takes to diagnose it, and certainly, we are focused on making sure that we can do better than that for our patients.

And we're pleased to see that today about 90% of my diagnosis is now being fit into this and typically.

Secrecy as you know is a well established imaging techniques and it's widely available across the U.S. in cardiology practices actually the estimate about 15000, not these diseases are available in a cardiology practices.

Throughout the country and were seeing then vis a vis a willingness and.

Readiness opposition to adopt into Trc and diagnosis through this mechanism.

I know that benchmarks that we have quoted in the Pos show that at diagnosis rate of about 30% to 50% is what most rare diseases have achieved uptil now and that is what drove our peak.

However, we are learning a tremendous amount every single day about this particular disease about what it takes to diagnose it and certainly we are focused on making sure that we can do better than that travels.

Angela Hwang: Thank you, Angela. Next question, please? Your next question comes from David Reisinger from Morgan Stanley.

Great. Thank you Angela next question please.

Your next question comes from David Risinger from Morgan Stanley .

Yes, thanks, very much I have two questions first could you just update us on the timing of the Ibrance advent interim efficacy look and second.

David Risinger: Yes, thanks very much. I have two questions. First, could you just update us on the timing of the iBrands adjuvant interim efficacy study? And second, I was hoping you could speak to the gross margin upside in the quarter in a little bit more detail and comment on the sustainability of strong gross margins. Thank you.

I was hoping you could speak to the gross margin upside in the quarter and a little bit more detail and comment on the sustainability of a strong gross margins. Thank you.

Albert Bourla: Thank you, very interesting questions, David. I think again Michael can provide an update on the timing of Ibrance and, of course, on margins, the master of margin improvements, Mr. Frank D'Emilio. Michael?

Thank you very interesting questions, David I think again, a mico and provides an update on the timing of hybris and of course for margins the must have margins improvements and Mr. front the museum.

Michael Yes.

Michael Dolsten: Yes, you know, we tend, in general, not to be specific about interim analysis in any programs. We expect the program to run to completion in 2020. There will be an interim analysis a little bit earlier in 2020, but most likely it will run to completion, and we remain optimistic about the outcome of the study based on IBRAN's very strong performance. More recently, even supported by real-world evidence data, that was very favorable across different aspects of progression-free survival and also robust on overall survival, actually having hazard rates of less than 0.6, which, you know, probably the strongest hazard rates you've provided so far. And we will update that hazard rate as the study matures. Thank you very much. Thank you, Michael.

You know we tend in general not to be specific about interim analyses in any programs. We expect the program to run to completion in 2020 . A there is an interim analyses that leads to be done earlier in 2020 , but most likely it would run through completion.

And we remain optimistic about the outcome of this study based on Ibrance very strong performance more recently, even supported by real World evidence. They thought it does was very favorable.

<unk> different aspects of progression free survival and what's the robust on overall survival.

Actually having has said rates youre. That's the know when seeks which you know probably the strongest has said right rights you provided so far and we will update that tested rights as to study matures. Thank you very much thinking Michael.

Michael Dolsten: So Dave, I'll answer the gross margin question, and I think I'll also just add in, even though you didn't ask, a little bit about operating margins too. So on gross margins, let's do it based on cost of sales. If you look at our cost of sales year over year, Q3 of 2018, 20.1%, Q3 of 2019, 19.4%. So directionally correct, right?

So Dave I'll answer the gross margin question I think also just add and even though you didnt ask little bit about operating margins too. So one on gross margins, let's do it based on cost to sales. If you look at or around cost of sales year over year, Q3, 2018, 20.1% Q3, 2019, 19.4%, So directionally correct price down on a year over year.

Frank D'Amelio: Down on a year over year basis. What drove the improvement? Really a couple of things. One was some cost improvements that we were able to implement in our global supply chain organization, obviously our manufacturing plants and the like. And then second, we had some very favorable product moves. If you look at where our revenue growth was.

Your basis, what drove the improvement really couple of things. One is some cost improvements that we were able to implement in our global supply chain organization, obviously, our manufacturing plants and the like and then second we had some very favorable product mix right. If you look at where our revenue growth was alliance revenues were up 18% year over year I Ranch group.

So and then when that well so we had some very favorable product mix. If you look at our operating margins for the quarter high Thirtys approximately 30%. So we look at the trending and they think about going forward. One key on that operating margin rhythm will be the revenue growth. So obviously, we're saying now we think 6% operational revenue.

Frank D'Amelio: on a relative basis relative to what we had said back in July because we'll leverage that to the bottom line. As I mentioned earlier, clearly, our intent is to improve upon the numbers that we provided previously that were cautious, appropriately cautious back in July. So net-net, we think we can improve upon the numbers we provided and we'll give you all an update on that when we give our 2020 guidance.

Going forward that will clearly help our operating margins on a going forward basis relative to what we had said back in July because we'll leverage that to the bottom line. So I mentioned earlier clearly our intent is to improve upon the numbers that we provided previously that we're cautious appropriately cautious back in July so net net.

We think we can improve upon the numbers, we provided and we'll give you all an update on that when we give our 2020.

Tim Anderson: Thanks, Frank. Next question, please, operator. Your next question comes from Tam Anderson from Wolf Research. Thank you. A couple of questions. On your revenue guidance of a five-year CAGR of 6%, consensus is not at that level, and I'm wondering if there are any big areas that jump out at you, specifically as being mismodel by the analyst community, in as much as you've looked at that sort of thing.

Yes. Thanks for next question. Please operator next question comes from Tim Anderson from Wolfe Research.

Thank you a couple of questions.

On your revenue guidance of a five year CAGR of 6% consensus is not at that level and I'm wondering.

If theres any big areas the jump out at you specifically as being a mismodeled by the analyst community in as much as you've looked at that sort of thing.

Tim Anderson: And then on abracitin of your JAK inhibitor, you're running a trial called Jade Compare. It's head-to-head versus Dupuixent, always bold to take on a new product head-to-head.

And then on adversity of your JAK inhibitor, you're running a trial called Jade compare to head to head versus Dupixent.

Always bold to take on a product head to head it looks like this trial should be reading out in December this year, so coming up.

Tim Anderson: It looks like this trial should be reading out in December of this year, so it's coming up. I'm wondering what we should realistically expect from that, both in terms of efficacy and safety. It seems that, at least in terms of safety and tolerability, it almost can't look as good as DUPI because it's a small molecule JAK inhibitor, but maybe you can kind of tell us what you expect that trial will show

I'm wondering what we should realistic we expect from that both in terms of efficacy and safety.

Seems that at least on safety and Tolerability almost can't look as good as dupi, because it's a small molecule JAK inhibitor, but maybe you can kind of tell us where do you expect that trial will show.

Yes, I think again.

Albert Bourla: Yes, I think that again, the R&D question, I think we'll go to Michael, just a brief comment that, look, we speak about our numbers, right? And the 6% that we are providing for our numbers, we are very, very comfortable with this number. We always want to make sure that we say what we do, and we do what we say. So I don't want to jeopardize that. So I'm giving you numbers that we feel very comfortable achieving. I I have seen a lot of reports from analysts that they are having higher numbers than that.

R&D question when I think we'll go through Microsoft embraced Coleman, but look we speak about all of them right and to the 6% got sort of providing for numbers. We are very very comfortable with the snow walrus, we want to make sure but we say what are we doing three into what we say so I don't want to do.

So I'm, giving numbers something somebody complement a C.I. I.

I have seen that local freeport's, one I was having higher numbers and that's why or something but I'm going to say what is the consensus number but.

Albert Bourla: That's why I refer to that. I'm going to check what the consensus is on that, but as I said, I don't want to comment on other people's jobs. You are doing your job, and we are doing our job. We feel very comfortable with the 60 percent. Michael. Yeah.

He is a sense I don't want to comment on other people. So you agree goods all and threat doing on so we feel very comfortable from a 6% Michael Yeah. You know thank you very much for shedding light so and that compares study. So we're very excited about that study that concludes our potential filing material.

Michael Dolsten: You know, thank you very much for shedding light on the COMPARE study. We're very excited about that study as it concludes our potential filing material, including aggregated safety data.

Including then aggregate to safety data it is a head to head against the peak season to Peel them up to peaks and and then we felt that it's an important file in the sense. We expect both drugs to show scalability and safety that the favorable we expect the upper Symphony based.

Michael Dolsten: It is a head-to-head trial against Dupilumab and Dupixen, and we feel that it's an important trial in the sense we expect both drugs to show solubility and safety that are favorable. We expect abracitinib, based on current, you know, historical comparisons, to do very well in efficacy and clearance of skin. And we have specifically an endpoint for Itch Relief, Pruritus Reduction, which is one of the critical, most patient-friendly centered endpoints, and we expect, and I believe, that abracitinib would outperform Dupixent in a very

On current you know historical comparison to.

Do very well on efficacy on clearance of skiing and web specific then end point on.

It's really fruits as production, which is one of the cryptic on most patient friendly since it endpoints EM and we expect and I believe that's up receipts neighborhood out before the peaks and you know very clinically meaningful men are actually it has a strong for a fast onset and data available.

Michael Dolsten: [inaudible] Interleukin-31 that is a major itch mediator that is not covered by duplicant. So I hope that gave you some ideas.

No no head to head showed that the yuk, one and one class Nokia has performed better clinically so far and hit the head is the reason why we wanted so document that I put disease, but there's also the science behind it it inhibits.

unknown: 2013 University of Georgia College of Agricultural and Environmental Sciences UGA Extension, and by virtue of the authority vested in me by the Board of Trustees of the University of Georgia College of Agricultural and Environmental Sciences,

The internal can 31 that is a major huge mediates the which is not covered by dupixent. So I hope that gave you it's something site into our into Joe's.

Frank D'Amelio: And Tim, it's Frank. I just wanted to add to what Albert said. Remember, when the new company is formed between our Upjohn business and MyLab, Remainco, our new Pfizer, is our new Pfizer biopharma business. Our biopharma business this quarter grew 9%. The last couple of quarters grew 7%. So that approximately 6% that Albert gave, we've been printing now literally for the last few quarters. And remember, when a new company is formed, the new Pfizer or remaining company keeps all of the growth drivers that we currently talked about on this call. So that portfolio, the momentum in that portfolio carries into the new Pfizer.

And Tim It's Frank I, just wanted to add to what Albert said.

Remember when the new company is formed between our up John business in Milan.

Remainco or new Pfizer is our Pfizer biopharma business, our Biopharma business this quarter quarter grew 9% last couple of quarters.

So that approximately 6% that obligate we've been printing now literally for the last few quarters and remember when newco was for new Pfizer or Remainco keeps all of the growth drivers that we currently talked about on this call so that portfolio the momentum that portfolio carries into the new Pfizer.

Albert Bourla: Very good points, Franck.

Very good points from like you can move toward next question. Please.

Operator: Thank you. Can we move to our next question, please? Your next question comes from Steve Scala from Cowan.

Our next question comes from Steve Scala from Cowen.

Steve Scala: Thank you. I have a couple.

Thank you I have a couple first for Michael the press release says that after three doses in infant the safety of 20 valid pneumococcal vaccine is similar to Prevnar 13, but you don't say the efficacy is similar after three doses in terms of immune response to the 13 valence that they have in common can you comment.

Steve Scala: First, Michael, the press release says that after three doses in infants, the safety of the 20-valent pneumococcal vaccine is similar to Prevnar 13, but you don't say the efficacy is similar after three doses in terms of immune responses to the 13 valents that they have in common. Can you comment on that point and the response to the additional seven valents? I know Prevnar 13 is a four-dose regimen, but you must have data after three doses.

On that point and the response to the additional seven valence I know Prevnar 13 is a four dose regimen, but you must have data after three doses. So that's the first question second question for Frank should something draconian come out of Washington that over night cut revenue by 10% a 20%.

Steve Scala: So that's the first question. Second question for Frank: should something draconian come out of Washington that overnight cuts revenue by 10%, a 20% reduction in operating expenses would appear required to protect the bottom line. Could a 20% reduction in operating expenses be delivered? And if so, would it take six months, 12 months, or would it take much longer?

Reduction in operating expenses would appear required to protect the bottom line could a 20% reduction in operating expenses be delivered and if yes, what it takes six months 12 months or would it take much longer. Thank you.

Steve Scala: Thank you.

Michael Dolsten: Michael

Michael.

Michael Dolsten: Yeah, you know, we share data on three immunizations, and it was a descriptive study, not powered for efficacy, but I, my take of this was, as in the press release, we had very robust rise in immune titer against all 20 serotypes, and at this stage they look very similar to the PCV13 when you look at the totality of data and you know the immune titers also are supplemented by functional antibody responses that we're now obtaining that again look very robust for the PCV20 across all serotypes. I wanted also to say that, you know, increasingly available epidemiology data strengthen the notion that the PCV20 has a very broad coverage, far exceeding PCV15 developed by a competitor, whether you look at the infant population, the adult population, US or European major countries, and whether you look at IPD and CAHPS, who are very pleased with emerging data and increased insights into epidemiology that indicates this vaccine has the potential to provide the broadest ever coverage for a pneumococcal disease.

Yeah, you know we set a date, though on the three immunizations and it wasn't descriptive studied not powered for EM efficacy, but I might take it is was as seem to Presley's we had very robust right seen immune tighter against all 20 serotype.

And at this stage to look very similar to the PCB 30, and when you look at the totality of data and the you know that immune tight as also are supplemented by functional antibody responses that we know obtaining that again look very robust food to PC between the across all serotype.

I want and also to say that you know increasing the available epidemiology. They strengthen the notion that the PCB. It's when it has a very broad coverage for exceeding a.

A piece of your 50 and developed by compared to where do you look at the infant population to other population you as or European major countries and whether you look at I.P.D. and kept see we're very pleased with emerging data and increase the insights into epidemiology that indicates this vaccine has the potential to pay.

By the broadest ever <unk> coverage for up pneumococcal disease.

Michael Dolsten: And then Steve, if there was some draconian action that resulted in a 10% impact on our revenue, which is a big number, then clearly, we would have to revisit our cost structure. I mean, you know, how could we not? In terms of how much we could do and how quickly we would do it, quite frankly, we'd have to work our way through that. But the short answer is, we would clearly review our cost structure, every element of the cost structure, by the way, which we do all the time anyway, and then see what we would have to do to deal with, you know, quite frankly, what the model is, what the business model is going forward. A 10% decline in our revenues is a change in our business model, and we'd have to obviously look at that in terms of how we run our business on a going forward basis.

And then Steve.

If there was some draconian action that resulted in a 10% impact in our revenue, which is a big number then clearly we would have to revisit our cost structure.

How could we not in terms of how much we can do with how quickly we were doing I frankly, we'd have to work our way through that but the short answer is we would clearly.

We view our cost structure Elie every element of the cost structure bundling, which we do all the time anyway, and then see what we'd have to do to deal with quite frankly with the model is what the business model is going for going forward, a 10% decline in our revenues as a change in our business model when we'd have to obviously looked at that terms that we went up business on a going forward pace.

Frank D'Amelio: Thanks Frank. Next question, please. Your next question comes from Naveen Jacob from UBA. Hi.

Yes.

Right next question please.

Your next question comes from Levine Jacob from UBI, Yes.

Naveen Jacob: Two questions, if I may. Number one, on Hospira, as you have stabilized that business and the manufacturing capabilities there. I was wondering if you could help us understand to what extent there have been lost revenues, quote-unquote, over the last two years that you may have been able to have if Hospira had been at full capacity. Basically, what I'm asking is how much you think you can recover going forward for Hospira and how quickly that growth could be achieved. And then on the C. difficile vaccine, I think phase three was supposed to read out in 2020, but I think you just went through an interim analysis and the DSMB or the monitoring board suggested to expand that study, wondering when the readout for that phase three will be now. Thank you very much.

Hi, two questions. If I may number one on Hospira as you have stabilized or that business in the manufacturing capabilities. There wondering if you could help us understand to what extent there have been lost revenues quote unquote over the last two years that would it yet.

You may have been able to have this hospira had been at full capacity and.

Basically what I'm asking is how much do you think you can recover going forward.

For Hospira and how quickly could that growth be achieved and then on on the C. difficile vaccine I think the phase three was supposed to readout in 2020, but I think you just went through an interim.

Oh analysis of the de SMB or the or the monitoring board suggested to expand that study wondering when the read out for that be three will be now. Thank you very much.

Albert Bourla: Right, I think Angela can ask the Hospira question, just to say something that, for us, the manufacturing issues and the supply issues of Hospira created, I would say, a loss of trust with our customers. This is, for me, the most important thing, okay?

Right I think answer like it must be for spirit. Our questions asked him to say something up for us the manufacturing issues on the supply issues or hospira created or.

I would say a loss of trust with our customer. This is for me. The most important okay and that's why we took a very seriously and we were very tough pardon with them and we created also caution because as you would it be Bose. This is most of the hospital partners. So that can be very customer focused only on both on the hospitals. So.

Albert Bourla: And that's why we took it very seriously, and we were very transparent with them, and we created a hospital business unit because this is mostly hospital products, so that can be very customer-focused, only on hospitals, so that we can make sure that we have the relationships that we had before built and make them very strong. And I have to say that we were very successful in that, and what the customers appreciated the most was the transparency. Obviously, there is business that we lost, and we hope that we will recover most of it. Angela, what do you think?

About three can make soon but we had the relationship but you said before fields and bull and make them the baseball and in order to say the for a very successful them up and what the customers appreciated the multiples across products August because there is because we lost and we hope it will recover most of it onto about what do you think.

Albert Bourla: Sure. I think the way I would think about the future growth of the hospital business unit and even Hospiro would be in the following way. I think there's a portion of the revenue that was lost as a result of the supply issues that we would recover. There is a portion that we wouldn't recover, but that isn't, I guess that's not the only source of growth.

Sure I.

I think the way I would think about the future growth the hospital business unit and a and even the hospira would be in the following way I think there was a portion of the revenue that was lost as a result of the us to supply issues that we would because there there is a portion that we wouldn't have a but.

That isn't I guess, if that's not the only six approach I think the way to think about growth also is what we're doing to continue to diversify that portfolio and she's bring in new launches you heard Frank talk about Pan Ziggo as one of those and down in our pipeline and in all a in that portfolio today I'll continue with launches both.

Angela Hwang: I think the way to think about growth also is what we're doing to continue to diversify that portfolio and to bring in new launches. You heard Frank talk about Panzega as one of those, and in our pipeline and in our portfolio today are continuous launches both from a presentation and a device perspective as well as from a molecule perspective. I think the other element of the hospital business unit that we also need to consider is the strong anti-infective portfolio that is part of that business unit. Those are sterile injectables, and in that unit, or in that portion of the business, there are a number of new launches that began a couple of years ago and are now being launched globally. So that's how I would think about growth in that portfolio: it's not dependent purely on the replacement or the regaining of business. A portion of it is, but much more of it is dependent on new ventures and new spaces that we're venturing into. Yes, Michael.

From a a presentation in a device perspective as well as on the molecule perspective, I think on the other the other element of the hospital business unit that we also need to consider it's a strong anti infective portfolio that is part of that business. You know those are sterile injectables and in that unit Oh in that portion of the business or a number of me.

Benches that began a couple of years ago and are now I'm going to in globally.

So that's how I would think about growth in in in that portfolio is that it's not dependent generally on the replacement other regaining up business a portion of it that much more of it is dependent on a new benches and new spaces that were venturing into.

Yes, Michael when to see if yes, we were pleased with it.

Michael Dolsten: On the CTF, yes, we were pleased with the aspect that safety and tolerability were regarded as favorable in the interim analysis, and clearly,

Pick that safety and Tolerability with regard as favorable at the interim analyses and clearly clearly the futility.

Michael Dolsten: The ability analysis indicated that the study should continue. While we try to target the high-risk patients for C. difficile infection by looking at the increased risk for contact with the healthcare community or recent use of antibiotics, we are, of course, pioneers in this area of developing a vaccine for this urgent need to prevent what can be fatal C. diff infection. So we'll use all our insights learned today to make sure that we can.

Analysis indicates that the study should continue.

Why we tried to target the high risk patients for CE CE deeply.

Picture and by looking at the increased risk Mcclintock with health care community or recent use of antibiotics. We are of course pioneers in this area of developing a vaccine for these oh surgeons need for preventing what can be paid the c. diff infections.

So we'll use on our insights and learn today to make sure that weekend.

Michael Dolsten: Continue and expand enrollment to follow the advice from the monitoring committee to make sure we can conclude the study as soon as possible. And, of course, there is an urgency with 450,000 C. diff infections every year in the U.S. and close to 30,000 deaths. And we'll do everything possible to accelerate the readout of this study and get the events. We clearly do accumulate events, although somewhat slower than we initially hoped. But rest assured that we will do everything we can to make sure the readout is coming as soon as possible, and we will later update you with more firm aspects of that.

Continue and expand enrollment to a full advice from the.

One of them commute to.

Make sure. We can conclude this study as soon as possible and of course, there is an urgency we had 450000 c. diff infections every year in U.S. and close to 30000 deaths and we'll do everything possible to accelerate the read out of this study and get the events, we cleared to do accumulate.

Since they have all been somewhat slower than we initially hoped but the rest assured that we will do everything we can to make sure to read outs is coming as soon as possible and we relate drop that you with more aspects of the.

Michael Dolsten: Thanks, Michael. Next question, please, operator. Your next question comes from Andrew Baum from Citi.

Thanks, Michael next question. Please operator.

Your next question comes from Andrew Baum from Citi.

Andrew Baum: Thank you. Your portfolio is heavily exposed to high list price, heavy Part D exposed drugs. I'm obviously thinking about Ibrance, Enlighter, Xtandi, and so on and so forth.

Thank you you'll portfolio is heavily exposed to hi list price heavy poppy exposed drugs I'm, obviously thinking about I, Brian and line X time here, so and so forth. You mentioned you welcome the proposed held a cap out of pocket and under Medicare part D.

Albert Bourla: You mentioned you welcomed the proposal to cap out-of-pocket spending under Medicare Part D. But within the same Finance Committee proposal, there is also an obligation for you to fund catastrophic coverage to the tune of 20% and an even larger contribution from the plan sponsor. So my question is, what is your comfort level with that part of the proposal? And to what extent do you think, particularly in crowded classes like the CDK4-6s, the obligation on the plan providers to fund catastrophic coverage is going to further increase price competition in the segment? And then the second question, very quickly, is historically Ian railed against some of your competitors for basically holding Xeljanz in very treatment-refractory settings, given the exclusion of their rebate power? I'm thinking particularly of Humira. What's your confidence level that you're going to be able to secure favorable market positions with Jaxx, given drugs like Depixen are going to be generating significant rebates for the PBMs in the commercial book of business by the time you hit the market? Many thanks.

But within the same finance committee proposal Sandhills. So an obligation for you to Commons catastrophic coverage that unit 20 cents, an even larger contribution from the plan sponsor. So my question is what is your comfort level with that passes that proposal and talk.

What extent, you think particularly incremented classes like the Cpk for six is the obligation on the time providers to fund catastrophic probably get caught catastrophic coverage, it's going to further increased price competition in the segment.

And then the second question if I quickly, it's historically in railed against some of your competitors [laughter] basically hold things that'll chathams into I'm, sorry treatment refractory settings, given access issue and if that bad rebate, how I'm thinking, particularly on humira, what's your confidence level that youre going to be able to secure.

Favorable market conditions with jacks, given drugs like depicts sense, you're going to be generating significant rebates for the PBM and the commercial book of business by the time you hit the market many thanks.

Albert Bourla: Thank you very much. Let me try to answer your question about out-of-pocket costs and all these reforms in Medicare that have been proposed. And then I will ask Angela to speak about Xeljanz.

Thank you very much let me try to answer your question the bulk of the all the focus and all these reforms in the Medicare that can be propose and then I will Oscar Angela.

Because of all the Zelda when it comes through price reforms are things that we agree and are things that weve nothing but I would tell you that we are an article in favor of reducing all out of pocket costs for base because right now the fundamental issue, but thrives these polymerization the political environment.

Albert Bourla: When it comes to price reforms, there are things that we agree on, and there are things that we do not agree on. But I will tell you that we are fanatically in favor of reducing out-of-pocket costs for patients. Because right now, the fundamental issue that drives this polarization in the political environment around healthcare is a real problem. And the problem is that Americans are paying for their Medicare as if they are not insured although they are having insurance when they go to collect their Social Security checks from the counter of the farmer. This is not happening with hospitals, this is not happening with diagnostics, this is not happening with other medical interventions, at least to the degree that it is happening with medicines, and this is why

Around health care, if these real program and the problem East of the Americans are paying orphan medicines.

Like is there nothing sure although they are having sure that's when they go to collect them from be comparable farms is not happening with caution about with this is happening with ER diagnostics. This is not confident with other medical intervention at least.

<unk> medicines and this is why their truck pricing so high in the debate, although the theater present 20 cents per person.

Albert Bourla: Drug pricing is so high in the debate, although it represents only 10-12% of the total healthcare cost. So that needs to be addressed. Now, the way that the Senate, for example, is proposing to address it, or even worse, the House, is going to increase the contribution of the pharmaceutical companies. And, of course, this will hurt.

<unk> costs, so that needs to be a price not that way, but Senate. For example of is proposing progress. It's already been war how are they are going to increase the contribution of the pharmaceutical companies and of course this worker.

But this is the at least with my problem over the course at least what hurts US comes the patients my usual with his feels he views and lots of other measures, but they're suggesting a purpose even more.

Albert Bourla: But this is the least of my problems overall because at least what hurts us helps the patients. My issue with these pills is that there are a lot of other measures that they are suggesting that hurt us even more. They are not moving the savings to the patients, which is the fundamental issue that right now society is dealing with, and this is our effort. I believe that it is to the benefit of the industry, it is to the benefit of innovation, it is to the benefit of patience, it is to the benefit of the healthcare system to reduce the cap, to reduce the out-of-pocket expenses either with repaid reform or, if that's not in the picture right now It's of paramount importance, even if you have to pay for it. And Xeljanz, Angela.

They are not moving the savings to the patients which is the fundamental used to whats right and also cibcs he's dealing with and this is all efforts here I believe talk to the piece of the benefit of the industry. Most of the benefit you know face the benefit based on.

The benefit.

Because system.

To reduce big cop.

What do you use the out of pocket expenses, either with rebate or for all products not on the big So right now by reducing the by implementing a cop four call before it's a bottom up people.

You have any progressive paper and tells us and though.

Albert Bourla: So it is true that when we look back, access to Xeljanz has been challenging over time. But certainly, we, over the last several years, have worked hard with our payers as well as our PBMs, as well as amassed, I think, some really strong scientific and patient experience and evidence behind Xeljanz that is creating momentum for this particular product. The I&I category generally is one that is the most heavily rebated.

So it is true that we may look back on the Xeljanz access has been a challenging through time, but certainly we over the last several years have worked hard with payers as well as I P. D N as why does amassing I think.

Really strong scientific and patient experience an evidence behind Xeljanz at is creating momentum for this particular product.

Hi, My category generally is one that is the most heavily rebated.

Angela Hwang: And as evidence, just compared to last year, this time, we now have 32 million more incremental lives in Medicare and commercial channels that have gained unrestricted access. And specifically, in fact, just this past May, we gained an additional 8 million lives. So I think that this is sort of good evidence to show how we are working hand-in-hand with our payers as well as our PBMs to bring the totality of our data and our experience to bear, filling an area of great unmet need.

And and I think that we have demonstrated our ability.

Two lab, a real I'm solution in this space upgrade unmet need and and into as evidenced I'd just as compared to last year. This time, we now have 32 million more incremental lives in Medicare and commercial channels that have grade unrestricted access and specifically in fact.

Just this past May we gained an additional 8 million lives. So I think that this is sort of good evidence to show how we are working hand in hand without pads as well as our PDN ive to bring the totality of our data and I experience to bear I'm filling an area of great.

Angela Hwang: Great. Thanks, Angela.

Great. Thanks, Angela next question please.

Operator: Next question, please. Your next question comes from Terrence Flynn from Goldman Sachs. Hi, thanks for taking the questions. Albert, you mentioned a few of your upcoming biosimilar launches. Just wondering if you can help frame for us the potential size of the opportunity as you think about the long-term there and maybe walk through some of the remaining hurdles in terms of establishing a robust biosimilar market in the U.S. And then, Angela, any more color you can provide on the Xtandi dynamics in terms of either share among the different segments or maybe mix of the prescriber base. Thank you.

Your next question comes from Terence Flynn from Goldman Sachs.

Hi, Thanks for taking the questions I'm Albert you mentioned a few of your upcoming Biosimilar launches. Just wondering if you can help frame for us the potential size of the opportunity as you think about the long term there and maybe walk through some of the remaining hurdles in terms of establishing a robust biosimilar market on the U.S. and then Angela just wondering anymore color you can provide.

On the extended dynamics in terms of either share among the different segments or maybe mix of the prescriber base. Thank you.

Albert Bourla: Let me speak a little bit about, generally, biosimilars, and then I will ask Angela, who answered the second question and about the biosimilar potential that we are going to launch. I think in the US, unlike other countries, there is a

Let me speak a little to beat that Bob generally about the Biosimilar something I will ask Angela.

Also the second fashionable specifics on them I assume Europe's potential unless we are going through loans I think he was the U.S. all like other Congress a there is a problem with the system and the system it.

Albert Bourla: The system is that there is the fundamental issue that there is this rebate trap, but payers, although they do see the benefit of using a biosimilar solution that physicians would like to prescribe and that the FDA is saying that it has similar efficacy and safety and it is much cheaper, do not want to do that.

There is a fundamental leasing companies this base, Rob, but payer so hoping to see the benefit of all using a biosimilar solution <unk> ER physicians would like to purchase price and but are you, saying that I've seen about education, and ER and the safety entities.

Albert Bourla: and so on and so forth, but they are trapped, and they cannot because they are going to lose the benefits or the rewards that the originator is offering them. And I think, frankly, that unless we resolve this big issue, we will never be able to see tremendous progress on biosignals. So this is something I think that the political world is understanding, this is something that we are very vocal about, this is something that we are constantly discussing with payers who want to move to new solutions, but they cannot. And I think that there is positive momentum on that, but still, I repeat, to be able to see transformational change in the penetration of biosignals so the healthcare system can see, and realize significant savings can only happen if we find a solution We have also suggested other measures like savings.

Super although they want to move up they are top than they can help because they're going to lose.

Benefits all the rebates. So they were genetically suffering and I think frankly, but unless you food resolve these big issue, we will never be able to see tremendous progress on Ah Onez signals. So this is something I think that go walk understanding. This is something that they are very vocal about it. This is something that we are discussing or something.

Failure, who they want to move from your solution, but they can though and I think that's a very positive momentum on buck, but still I would it be able to successful national chains independent threshold by our Seymour's sold the healthcare system can see realized significant say savings can only.

Company, if we find the solution.

The other measures like the savings should be served by provides us et cetera, et cetera, but I think that's the fundamental.

Albert Bourla: and We have also suggested others.

Albert Bourla: etc. But I think that's the fundamental one.

Albert Bourla: Now, all biosimilars are not the same, and not all markets are the same. When you have closed systems, like Kaiser, for example, the penetration of biosimilars is very, very high because they can see the benefit of doing something like that. But when you have intermediates being involved, but then big rebates in play, it's very difficult for them, and also oncology is very different.

Not all but something like one of the same because ER and well make those all markets I'm, just saying what do you have close.

Systems like the causes for example, the penetration of course, you got some very very hard because they can see the benefit of doing something like a buck. The when you have a intermediates being in all but then big rebates and play it's very difficult for them to do.

<unk> quality is very different bolstered by a seamless from a from a I am I personally want because a they are and I are giving before very expensive periods of time, so going into suites <unk> new patients off coming.

Albert Bourla: Oncology

Albert Bourla: from INI biosimilars because INIs are given for very extensive periods of time, so you need new patients coming in. Very often, in oncology, it's very different because the period that they are used for is more limited, and then the patients are coming

Very often oncology is very different because there's more limited the period of the our paraphrased arguments things and the patients are coming.

Albert Bourla: and much more often new patients are coming in much more often in higher proportions. But Angela, maybe you want to add to that and then also provide an answer to the second question.

Much more often you patients are coming much Moreover, higher proportion, but I'm going to maybe you're going to add <unk> and then also provide the and I think the second question.

Angela Hwang: Sure. You know, I think Albert has said a lot about that, and maybe what I can add is the following.

Sure I'm you know I think Elbit has said a much of it and maybe what I can add is the following I think would you add within the context of the fact that the U.S. dynamics are very different on the European dynamics, where are you see a much greater adoption biosimilars and what we have seen with our supportive.

Angela Hwang: I think within the context of the fact that the U.S. dynamics are very different from the European dynamics, where you see a much greater adoption of bisimilars, what we have seen with our supportive care bisimilar, which is ridiculous, is that we've seen some nice growth there. To date, it has a 16% market share, which is the highest that we've seen of any biosimilar here in the U.S. And I think that that tells us, and that's given us the opportunity to learn about what it will take to launch oncology bisimilars, as well as what we can expect in this particular space. So I think with the three biosimilars coming, you know, one after the other, December, January, February of the end of this year, we look forward to driving the growth of this portfolio of biosimilars in an area of high unmet need for care.

By some leverage is better credit and is that we've seen some nice growth it's up to date.

It has a 16% lots of chair, a which is the highest that we've seen off any biosimilar I'm here in the U.S. and I think that that tells us and that's given us the opportunity to learn.

About what it will take to launch oncology by some of this as well as what we can expect in this particular space. So I think with the three Biosimilars coming you know within you know went off to the other December January February Oh by the end of this year are we look forward to lab driving the growth of this portfolio.

Biosimilars in an area of high unmet need for questions.

As it pertains to Sandy and you do see tremendous growth yet. This a this quarter, we had a great quarter going 25%, Yeah, Oh, yeah, and I think that this is evidence of the great confidence that office by the Raul just a medical oncologist, having with its Andy we have heating market share.

Angela Hwang: As it pertains to Xtandi, you do see tremendous growth here this quarter. We had a great quarter, growing 25% year over year, and I think that this is evidence of the great confidence that our prescribers, both urologists and medical oncologists, are having with Xtandi. We have leading market share, at 37% branded in a growing class, and the class, as well, has been one that has grown three points from last quarter to this quarter.

At 37% branded in a growing Clos and the Clos as well has been one that has grown three points from last quarter to this quarter. So when we look at.

Angela Hwang: So when we look at our sources of patients for Xtandi, they come in two forms. First, it's non-metastatic castrate resistant prostate cancer, where we continue to see increases both in total patients as well as new patients starting since PROSPER approval. And just as a measure of PROSPER, urologists are generally the prescribers in an earlier disease setting, and here, our urology prescribing is growing at 44%. And so we're continuing to see the proportion of our business from Prosper grow very positively. Also, it is important to remember that these patients are earlier in terms of their course of disease and therefore have higher days of therapy. This will drive the prescriptions and the revenue. In metastatic CRPC, castrate-resistant prostate cancer, which is still the majority of our business, our new patient share continues to increase there too.

So says that patients for sandy they come in to falls, but it's the non metastatic castrate resistant prostate cancer way, we continue to see increases in both in total patients as well as new patient starts in the press that Kupol and just as a measure of process urology.

Just a generally that describe is in an earlier disease setting and here I wanted you prescribing, it's probably at 44%.

And so what we think we're continuing to see the proportion of our business from cross the ROE very positively I'm also to remember that these patients earlier on in terms of their cost of disease, and therefore have higher days of therapy. So this will drive and you know this will drive the prescriptions in the revenue.

In metastatic a CR P.C. basket castrate resistant prostate cancer, which is still the majority of our business and our new patient share continues to increase there too and he had we not only have the number one share of voice oncologists, but all that is fighting with oncology medical oncology continues to grow six.

Angela Hwang: And here we not only have the number one share of voice with oncologists, but our prescribing with oncology, medical oncology, continues to grow significantly as well, and this quarter at 21 percent. And so when you bring all of this together and you add into that the approval or the positive replacement results we got from EZMET and the submissions that we have for additional indications in both the non-metastatic, the hormone-sensitive setting, as well as, you know, additional data from the INBOX study, I think that what we have in Xtandi is a uniquely positioned NHT that is going to be able to treat multiple indications in both hormone-sensitive as well as castrate-resistant prostate cancer.

Yes, it can be as well and this quarter at 21%.

And so when you bring all of this together and you add into that the the the approval as well that deposit the phase with results, we talk on isn't that and on the these submissions that we have for additional indications.

In both the non metastatic the home and sensitive setting as well as you know additional data from Inbox study I think that what we have enough Andy is a uniquely position and H.T. that is going to be able to treat multiple indications in both well most sensitive as well as.

Castrate resistant prostate cancer.

Angela Hwang: Excellent. Thanks, Angela.

Excellent. Thanks, Angela next question please.

Operator: Next question, please. Your next question comes from Louise Chin from Cantor Fitzgerald. Hi, thanks for taking my questions. So my first question is that, in consensus, there is a meaningful step up in Ibrance sales through 2023. And do you think you can grow Ibrance?

Next question comes from Louise Chen from Cantor Fitzgerald.

Hi, Thanks for taking my questions. So my first question is that in consensus there's a meaningful step up in Iran. Sales through 2023, and you can grow I brands double digits without an adverse event or Neoadjuvant approval and then second question I had is an adverse scenario based on the safety data that you've seen.

Louise Chen: or NIA adjuvant approval. And then the second question I had was about Aversitnib. Based on the safety data that you've seen thus far, is there a chance that you will not get a black box warning like other JACs we've seen in the industry? And the last question I had was if you could give an update on your DMD program, where you stand today, and the competitiveness of your program versus some of the other ones out there based on the data that you've seen thus far. Thank you.

Thus far is there a chance that you will not get a black box warning like other Jack's we've seen in the industry and the last question I had was if you could give an update on your DMD program, where you stand today the competitiveness of your program versus some of the other ones out there based on the data that you've seen as far thank you.

Albert Bourla: Yes, a quick answer on Ibrance, and then I think Ambrositinib and DMD will be covered by Michael.

Yes, I think we can sort of a and b I buy something.

Oh, I think obviously the need for a and B M. They wouldn't be covered by by Michael again in the space I don't want to comment what is the on analyst expectations I know what are on the wall expectations and we are.

Albert Bourla: Again, in the,

Albert Bourla: The analysts' expectations. I know what our expectations are, and we are projecting.

I can go up we will grow ibrance doubled to use it as our <unk> elsewhere expect to go through addressing the.

Albert Bourla: We will grow Ibrance, Double DZ, and they're also expecting that we will receive... We will have, let's say, a positive PALAS study, which is the main study that is driving the expansion of prescriptions and drivers. So, of course, everything is risk-adjusted in our projections, and some will be positive, some will be negative, but the 6% that we are taking, the question is on all of that, is not based on one or two but is based on risk adjustment of a multiple. So, we are feeling very comfortable, but overall, we will achieve that because if one fails, another one will succeed, and that one will de-risk their revenue, so it will be much higher.

The <unk>, let's say positively, but palace side, which is the main stop you buy but he's driving.

Expansion will fill prescriptions and drivers so a positive everything he's got his office in our projection.

And some others, how would be magazine, but the 6%, but we are thinking we're going to form a robot is not based on one or two but these based on risk adjustment of multiple so we're feeling very comfortable like overall, let's see part because my favorite I'd run will succeed and that's why we're viewing their revenues for would be much heart and.

Yeah, so starting with <unk> you know.

Michael Dolsten: Michael?

Michael Dolsten: So starting with abracitinib, you know, I think it's a good question you raise here that each JAK inhibitor is different, and we designed our JAK inhibitors for optimal use depending on the condition, and it's hard for me to express a strong view here on the potential black box as it's really the decision of FDA. I can only say that we have so far seen a very good safety profile, and we have not seen any cardiovascular signals at all with this drug. And as you've seen in our reported trials, efficacy has been very persuasive and strong. So we look forward to, you know, finalizing the program, generating the data comparing fast onset versus standard of care, PIXENT, and then having dialogue with FDA.

I think if the good question you raise here that use yuk inhibitor or different and we designed our JAK inhibitors for optimal use depending on the condition.

And it's hard for me to expressed a strong view here.

On the potential Black book says, it's really the decision of if I.

I can only to say that we have so for seeing of every good safety profile and we have not seen any cardiovascular seeing those at all when these drugs and as you've seen in our fourth did trials efficacy as being very puts units have been strong and so we look forward to.

Finally likes to prove generate the compared to the that could show potential advantages, we'd faster onset versus standard of care depicts and and then have dilo would have today.

Michael Dolsten: The DMD program, we are, you know, continuing to dose patients, and we reported at the PPMD conference that we had transduced more than 70% of the muscle fibers and expressed immunodystrophin at 30% of normal, which we think is in the range where you should see benefit. Interestingly, we also shared with you using the North Star ambulatory activity scale that we had two patients where we saw benefit in increased performance. And please remember, these patients were older than patients reported by other players in the field, and the older the patients are, the harder it is to show benefit as their natural history is to decline. So we are, you know, concluding, we hope to start in a relatively short timeframe and pending the final data set.

The de program we are.

Continuing dosing patients.

And we reported at the P.P.M.D. conference that we had a transduced more than 70% of the muscle fibers and express meaning just roofing.

At 30% <unk> that we think is in the range.

Well you should see benefit entrants interestingly. We also said, we do you see and a new store ambulatory activity escape that we had two patients where we saw a benefit increased performance and please remember these patients were older patients report the bye.

Other players into field and older to patients or the harder it is to show benefit as the natural history is to decline.

So we all are you know concluding we hope this study in a relative short timeframe and pending a final date that said we are preparing for start up phase three next year and hope certainly that these type of therapy can transform patient lives for these poor boys.

Michael Dolsten: We are preparing for the start of phase three next year and certainly hope that this type of therapy can transform patient lives for these poor boys. Thanks.

Thanks, Michael as operator can we take our last question no. Please.

Michael Dolsten: Thanks, Michael. And Operator, can we take our last question now, please? Your final question comes from Jeff Meacham from Bank of America. Morning guys, Thanks for the question. I just had a few. Angela, for Vindiquel, I just want to get a little bit more detail on the rollout in the U.S. Obviously, I know it's early, but from the field, how would you characterize reimbursement and access, and are there commercial lessons to be learned from the E.U.? And then Albert, just to put a finer point on your comments for long-term growth and deals, I mean, when you look at the LOE starting in 2026, you mentioned the pipeline readouts as clearly an offset, but can that or smaller tuck-in deals be enough to still get you to growth over the course of the decade? Thank you.

Your final question comes from Geoff Meacham from Bank of America.

Morning, guys and thanks for the question just set a few.

Angela for Vinik, well I, just want to get a little bit more detail on the rollout in the U.S., obviously I know, it's early but from the field, how would you characterize reimbursement and access and other commercial lessons to be learned from that you.

And then Albert just to put a finer point on your comments for long term growth and deals I mean, when you look at the end Luis starting in 2026, you mentioned the pipeline read outs as a clearly an offset but can that or smaller tuck in deals be enough to still get you to took growth over the course of the decade. Thank you.

Okay, great. So from a reimbursement perspective, I think that we are seeing things pan out exactly as we thought and you know the large majority of our patients would be Medicare patients because yeah, just the age and deanne dependence on the disease and this.

Albert Bourla: Great. So from a reimbursement perspective, I think that we are seeing things pan out exactly as we thought. As you know, the large majority of our patients would be Medicare patients because of just the age and the prevalence of the disease in this particular population. But currently, we're seeing about 80% of our patients be in the Medicare bucket, about 12% in the commercialized bucket, and then the remainder in Medicaid and others. And so anticipating that this would be sort of how the patient mix would look, we created at the launch of Vindicale a number of programs to support the reimbursement of Nacalb. And for example, in commercial patients, we have a co-pay card, a co-pay assistance program. For all patients, we have a bridge program to ensure that patients can receive access to Vindical while they're waiting for their reimbursement decisions.

Taking a population.

The currently we're seeing about 80% about patients he and the Medicare bucket a about 12% in the commercial lives bucket and then at the remainder in Medicaid and others.

And so anticipating that this would be sort of how the patient I guess the patient mix would look a we created at the launch of I've been to tell a number of programs to support the reimbursement up and to help.

And I'm sorry for example in the commercial patients we have a co pay card and co pay assistance program for all patients. We had a bridge program to ensure that patients can receive access to bend to kill while they're waiting for their reimbursement decision and for Medicare patients were exploring when the price of exploring a number of.

Albert Bourla: And for Medicare patients, we're exploring, and we're in the process of exploring a number of ways that we can help lower co-pay costs for Medicare patients, including working with payers on innovative contracting approaches, which will then help to lower their co-pay. And then, of course, there's always a portion of patients that are on our free drug program. But I think all in all, what we're learning from these early days in the market is that the solutions that we have are definitely supporting our patients in the way that they need. And then not to forget, we still have support from the Pfizer patient hub, as well as a number of specialty pharmacies and hospitals that actually provide our patients with all the support they need to clear their prior authorizations. And I think that this service has been, you know, hugely helpful in helping us to clear prior authorizations and get our patients on drugs as soon as possible.

So that we can help lower co pay Pos for Medicare patients, including working with payers on innovative contracting approaches, which will that help to know where that okay. And then of course, there's always a portion of patients that are on our free drug program, but I think all in all what we're learning a Z.

From these early days and you know in the market is that the solutions that we have definitely supporting our patients and the way that they need and they're not to forget we still have the support from the buys this patient hub as well as a number of specialty pharmacies hospitals that actually provide our patients with all the supply.

What they need to clear that prior authorizations and I think that this the service has been you know hugely helpful in helping us to clear probable and then get up and get all patients on drug in Uh Huh.

Albert Bourla: And to your question about whether we believe that this growth can be sustainable in the post-25-26 period, the answer is yes. Look, it is normal for companies to have alloys. What is abnormal is not to have alloys, but it is normal for companies to have alloys, and ourselves, we will come back to normality. Actually, not even in 26, because in 26, we have a very small number of alloys. From 27, we are coming back to normal alloys as a percentage of sales, and then this is what we need to, with the revenue that we know right now, normal in 27. This is 8 years. Right, so I feel very confident, but we will have enough time, and we have a pipeline that is very diversified, and we have a strategy that is double down on that.

And that to your question about if we believe that for the this growth can be sustainable in the post when department. The six a theater. The answer is yes look it is normal or companies.

Louise what is up none of my there's not too heavily but if there is a normal for companies to capabilities and ourselves we will come back to normality.

Actually not even in 26 before they went to six for better small number of choice and 27, we're coming back to normal alloys as percentage of sales within these we need to with better I mean, all right now.

So so.

He sees yes.

Right, so I feel very comfortable.

We will have enough time and.

Pipeline becomes very diversified and we'd have a slippage is doubling down on these develop substrate but.

Albert Bourla: [inaudible]

Albert Bourla: What?

Albert Bourla: So when the company returns to normality, we'll be able to continue growing at the same rate that we are growing right now. So, I think that's the end, right? Unfortunately, we don't have time; we've exceeded our time. So, I want to thank you all for joining us today. I really liked this call a lot.

So when the companies on a more magazine wouldn't be able to continue growing at the same rate that we are growing right.

So I.

I think.

Sandpiper, Unfortunately broker time exceeding four or five so I want to thank you all for joining us today I'd like to unlock the so called there were fewer questions you'll find ourselves because there were still of course and then we'd be both if most of the time the pipeline, which is exactly what you wanted went to the growth drivers from Oh.

Albert Bourla: There were fewer questions on the financials because they were stellar, of course. And we devoted most of the time to the pipeline, which is exactly what you want to do, and to the growth drivers of the business, which is exactly what an earnings call of a successful pharmaceutical company should look like. Now, as we move toward the expected close of the Abzan-Milan transaction next year, I expect both... We expect Pfizer-Mainco to be positioned to deliver top and bottom line growth, but it's among the industry leaders. And you know us; we want to be the leader, so we'll aim for that. And by bringing together Mylan's growth products into Abgen's growth markets, we are creating the leading off-patent drug company with a strong financial profile and true global revenue. For all these reasons, it is an exciting time for our company, and we will remain highly focused.

On the business, what's exactly what.

And our earnings call.

Almost like a company so reply.

No actually move toward the expected to close will be up some mylans rucksack next year.

I expect the both businesses would be significantly site.

We expect Pfizer remain quickly position to deliver top and bottom line growth bookings among the leaders and you know us we want to be they'll either so really robot.

By bringing together my last growth <unk> products into options growth markets, we are creating the leading off Watson for a company with a strong financial profile.

Through laborious all these reasons, if it's an exciting time for our company and we will remain highly focused on executing against these products. So thank you very much of a great for us over there.

Albert Bourla: Thank you very much; have a great rest of the day.

Operator: Ladies and gentlemen, this does conclude Pfizer's third quarter 2019 earnings conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, this does conclude Pfizer's third quarter 2019 earnings conference call. Thank you for your participation you may now disconnect.