Q4 2019 Earnings Call

Good day, everyone and welcome to Pfizer's fourth quarter 2019 earnings Conference call. Today's call is being recorded at this time I would like to turn the call over to Mr. Cook Triano Senior Vice President of Investor Relations. Please go ahead Sir.

Unknown Executive: Good day, everyone, and welcome to Pfizer's fourth quarter 2019 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chuck Triano, Senior Vice President of Investor Relations. Please go ahead, sir.

Unknown Executive: Good morning, and thank you for joining us today to review Pfizer's fourth quarter and full year 2019 performance and 2020 financial guidance. I'm joined today by our CEO and Chairman, Albert Bourla. Frank D'Amelio, 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 investors. You'll see here that slide three covers our legal disclosures.

Good morning, and thank you for joining us today to review Pfizer's fourth quarter and full year 2019 performance and 2020 financial guidance.

I'm joined today by our CEO and Chairman Albert Bourla.

Frank Demilio our CFO .

Michael Dolan President of worldwide research and development.

Andrew Wong Group, President Pfizer Biopharmaceuticals group, John Young, our Chief business Officer, and Doglike, where general counsel.

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

Unknown Executive: Albert and Frank will now make prepared remarks, and then we will move to a question and answer session. With that, I'll now turn the call over to Albert Borlaug.

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

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

Albert Bourla: Thank you, Chuck, and good morning, everyone. This morning, I will speak about our performance for the year, the continued advancement of our pipeline, and the steps we are taking to position Pfizer for accelerated growth following the expected separation of Abgen from Pfizer later this year. Frank will then provide details regarding our fourth-quarter performance and our 2020 financial guidance. 2019 was a productive and transformational year for Pfizer during which we generated solid full year financial results. These results were highlighted by exceptional 8% operational revenue growth for the year and 9% in the fourth quarter for our biopharma business, which will become the new Pfizer following the expected separation of uptake. Once again, our biopharmaceutical group's outstanding growth was driven primarily by the continued strong performance from all our key growth drivers. These include Ibrance, Xtandi, Eliquis, Xeljanz, Vintagrel, among others.

Thank you talk and good morning, everyone. This morning, I will speak about all performance for the year, but something else wants me.

Our pipeline and the steps you're taking to position Pfizer for accelerated growth. Following the expected separation of jobs come from Pfizer later this year.

Brian will then provide details regarding our fourth quarter performance and our planned it trended financial guidance.

So those are my theme was a productive and transformational year for Pfizer, which we generated solid 40 year financial results.

These results were highlighted by exceptional 8% of British member revenue growth for the year end up 9% in the fourth quarter.

Our biopharma business, which will become the new parties are falling the expected Sip operational problems.

Once again our biopharmaceutical.

Outstanding growth was driven primarily by the continued strong performance from or key growth drivers.

This includes Ibrance Xtandi Eliquis Xeljanz reintegra.

Albert Bourla: BioPharm also generated 14% operational growth in emerging markets in 2019. I would point out that Biopharma's 2019 growth came from volume increases, not pricing. In fact, pricing had a negative 2% impact on its results.

Among others biopharmaceutical generated 14% of personal girls in emerging markets in 2019.

I would point out that Biopharmaceuticals are named in Brussels game from volume increases the pricing in Florida pricing could that negative 2% E book to bill far much results.

Albert Bourla: For full year 2019, Global Ibrance revenues increased 23% operationally to become a nearly $5 billion-per-year product. In the U.S., Ibrance realized robust growth and retained its strong leadership position in the syndicate class with a nearly 90% share. Ibrance's performance outside of the U.S. was also very strong, and we still see significant opportunities in countries where the use of CDK inhibitors has not yet reached the level seen in the U.S. Overall, Ibrance is approved in more than 90 countries, is the number one prescribed CDK4-6 inhibitor globally, and has reached more than 250,000 patients for Xtandi. Alliance revenues in the U.S. were up 20% for the full year, and when combined with our royalty income on ex-U.S. sales, totaled nearly $1.2 billion in 2019.

For full year 2019, double Abrams revenues increased 23% abreast to become a nearly 5 billion dollar a year problem.

In the U.S. ibrance realized the robust girlfriend to retain its strong leadership position in the syndicate Clos wouldn't nearly 90% Sir.

Hi, brush performance, Oh, sorry to the U.S., we're also very strong.

Andrew students a significant opportunities in countries, where the usual she became cheaper because not to get the original level seen in the U.S.

Overall, our branches approved the more than 90 gone.

Is that number one prescribed to be gave for six and keep either globally and 'cause reached more than 250000 base.

Or something.

The lines wherever you're saying that you guys were up 20% for the full year and when combined with our royalty income on X U.S. sales totaled nearly $1.2 billion in 2019.

Albert Bourla: Xtandi is the leading branded novel hormone therapy in an increasingly competitive but growing class, with 37% market share in total prescriptions. The robust year-over-year growth was due to continued uptake of the non-metastatic castration-resistant prostate cancer indication, as well as prescriber confidence and recognition of Xtandi's strong data across CRPC. With the recent launch of our extended indication of metastatic gastration-sensitive prostate cancer in the U.S., Xtandi is now the first and only oral treatment approved by the FDA in three distinct types of prostate cancer. Eliquis continued to perform well.

Extending he is the leading branded noble hormone therapy in an increasingly competitive but growing block.

Circa seven person markets sure he thought though prescription.

There are bars for year over year growth was viewed to couldn't see mute uptake of the non metastatic castration resistant prostate cancer indication as well as prescriber confidence in recognition of fixed on the strong paid dark roast see RPC.

Well there isn't a launch so far extended it indicates to me the spotty penetration, especially prostate cancer either U.S. extend these know the first and only oral treatment approved by the FDA in three distinct types of prostate cancer.

Eliquis continued to perform well.

Albert Bourla: Pfizer's share in global revenues was up 26% operationally to $4.2 billion. This growth was driven primarily by continued increased adoption in non-valvular atrial fibrillation as well as oral anticoagulant market share gain. Eliquis is now the oral anticoagulant leader in 12 markets across the globe. Xeljanz had a strong performance, with global revenues increasing 29% operationally to $2.2 billion.

Wiser sharing the global revenues was up 26% operationally $4.2 billion.

This growth was driven primarily by teaming with increased adoption even on vogtle three older fibrillation.

All right and the quality of our market share gains.

Hey, look which isn't all the oral anticoagulant leader in 12 markets across the globe.

Xeljanz steroid performance with global revenues, increasing 29% operationally to $2.2 billion.

Albert Bourla: We are very pleased with the continued positive uptake across all indications, rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis, and we continue to launch psoriatic arthritis and ulcerative colitis in new markets. Looking at our rare disease business, Vintaco continues to ramp up nicely in the U.S. following the May 2019 approval and launch for the treatment of ATTR cardiomyopathy. Overall, this first-of-its-kind medicine contributed $473 million in revenue in 2019. Our disease awareness efforts helped drive the diagnosis rate to 9% by the end of the fourth quarter compared with 1% prior to launch. As of the end of 2019, more than 9,000 patients have been diagnosed, more than 5,500 patients have received a prescription for Vintercal, and more than 3,000 patients have received the drug. These numbers do not include approximately 100 patients who are still in the Early Access Program.

We're very pleased with a continued positive uptake of course all indications.

I'll start this story I think arthritis, and surgical ideas and we continue to most sure I've got fried since you brought to light.

Mark.

Looking at all rare disease business ventricle continues to ramp up nicely in the U.S. folding that may 2019 approval and launch for the treatment of ATP are currently you might help us.

Overall this first of its kind medicine contributed.

In 73 million Doris and revenue in 2019.

Our disease awareness.

So to drive the diagnosis rates to mine person might be until the fourth quarter compared with one person prior to launch.

It's it's the end of 2019 more than 9000 patients have been diagnosed more than 5500 basis.

Received a prescription for winter coat and more than 30000 patients could receive the dri.

These numbers do not include approximately 300 patients for steam in the early access program.

Albert Bourla: Global Prevnar 13 revenues were up 3% operationally to $5.8 billion. The U.S. CDC also published its updated recommendation for immunocompetent adults aged 65 and older to help clinical decision-making in the November Morbidity and Mortality Weekly Report, highlighting that a patient can share the decision to vaccinate with PCV13 with a physician, physician's assistant, nurse practitioner, or pharmacist. Looking at our sterile injectables portfolio, our focus on manufacturing recovery is taking shape and beginning to have a positive impact on the top line in the U.S. We have made solid progress with remediation and modernization and expect continued improvement throughout 2020. Of note, while global revenue from our sterile injectables portfolio declined 1% operationally for the full year, it increased 5% operationally during the fourth quarter.

Great Global pregnant 14 revenues were up 40% oberschmitten to $5.8 billion.

U.S. CBC also published its updated recommendation for even Unicum competent adults age 65, an older too sure clinical decision, making into November morbidity and mortality than we can you report.

Hi, lighting, Doug patient can certainly be Susan to actually made with PCB third theme with physician physician assistant nurse practitioner for pharmacists.

Looking at they'll start Robbins activists portfolio, our focus on manufacturing recoveries, taking shape and beginning to have the positive impact on the topline in the U.S.

We have made solid progress, we sort of mediation and modernization and expect continued improvement throughout the trend to trend of snow, while global revenue from our sterile injectables portfolio declined 1% operation before the full year.

Increased 5% operationally during the fourth quarter.

Albert Bourla: Additionally, more than 80% of our injectables portfolio is in stock today, and we anticipate this percentage will continue to increase in 2020. Our global Barsimilas portfolio grew 22% operationally to $911 million for the full year. This was driven largely by 70% growth in the U.S., thanks to the launch of Retacrit and a gradual uptake of Inflecta. However, the growth in the U.S. was partially offset by decline in international markets, driven mainly by inflection.

Additionally, more than 80% no far injectables portfolio. He's in stocks today, and we anticipate this percentage will continue to increase in 2020.

Oh global but seamless portfolio grew 22 person operationally to $911 million for the full year. This was driven largely by 70% dropping the U.S. Thanks to the launch of restart group and a gradual uptake of Inflectra.

Growth in the U.S. was partially offset by decline in international markets.

Even mainly by influx.

Albert Bourla: We expect an additional contribution from biosimilars in 2020 with the launch of free oncology monoclonal antibody biosimilars. Last week, we announced the launches of Zirabev and Ruxian in the US market, and next month, we expect to launch Trasimera. All three products will be available at a substantially discounted price compared with their originator products. Full year revenues for our Opzone business were down 16% operationally to $10.2 billion

We expect an additional contribution from Biosimilar, Washington to trending with Alonso free oncology monoclonal antibody burst emitters last week, we announced the launch as well it was zero above and workstations in the U.S. market and mix them up for you expect to launch trustee Mira also product.

We'll be available at this is it's a substantially discounted price comparisons with the originates or problems.

Full year revenues for UBS on business were down 16% of personally $10.2 billion.

Albert Bourla: The key headwind during the year was the advent of generic competition for Lyrica in the U.S., which was partially offset by 7% operational growth in China. The growth in China was driven primarily by Viagra and Celebrex as well as Lipitor in non-reimbursed channels, which constitute significant market share in China. We are making good progress with the pre-integration planning for Abjon's proposed combination with Mylan, which remains on track for mid-2020. In December, we announced that former Pfizer Chairman Ian Reid and current Pfizer Director James Kilds would join the Beatrice Board of Directors upon completion of the transaction. We are also working closely with our counterparts in Milan on the CFO selection process.

The keys headwinds during the year was the advent of generic competition on fully recur in the U.S., which was partially offset by 7% of personal girls in China.

The growth in China was driven primarily by by geography, and celebrities as well as lipitor known reimbursed Sonos, which constitute significant markets are in China.

We are making good progress with a pre integration planning for absorption proposed combination with Mylan, which remains on track for meat trended trend.

In December we announced the former Pfizer Chairman he agreed and current Pfizer director James killed with Zone Divvy up his board of directors upon completion of it sounds like.

We're also working closely with our counterparts Mylan on the CFO selection process, we expect to our knowledge the appointments of both the CFO and the third director by the end of this quarter.

Albert Bourla: We expect to announce the appointments of both the CFO and the third director by the end of this quarter. We have great confidence in Viatris, which will combine Abzon's strong commercial capabilities and iconic brands with Milan's terrific pipeline. Turning now to R&D, we remain very pleased with the progress we are making with our pipeline. We are expecting key clinical readouts in 2020, several of which have the potential to make this an exciting year for patients hoping for new treatment options. We anticipate sharing data from up to 15 proof-of-concept readouts with contributions from all our therapeutic areas, as well as up to 10 Pivotal Study Starts and 5 Key Pivotal Study Reductions. I will now highlight some of those expected events. We continue to expect our two-event rhythm.

Okay, great confidence in threes, which when combined arbs on strong commercial capabilities and iconic brands with Mylans terrific pipeline.

Turning now to R&D, we remain very pleased with the progress we are making with our pipeline.

We are expecting key clinical results in 2020 several of which have the potential to make this an exciting year for patients hoping for you treatment options.

We anticipate sharing data from up to 50 proof of concept three dogs with contributions from all our for up to the carriers as well as up to 10 people to have started to starts and pipe keep people to study results.

Well no highlight some of those expect events.

We continue to expect out to event driven.

Albert Bourla: Ibrance Early Breast Cancer Program, Penelope B., and Pallas, to read out in late 2020 and early 2021 respectively. If successful and following regulatory approval, these programs could double the number of patients eligible to benefit from IBRA. The Phase 2 Open Label Single-Arm ANCOR CRC Study evaluating the efficacy and safety of the combination of braftovir and mectovir and cetuximab in patients with previously untreated BRAF V600E newton metastatic colorectal cancer is currently ongoing.

Ibrance early breast cancer programs.

Let me be and policy to read Oh in late 20 to 20 and early to end the twin do want respect.

If successful unfolding regulatory approval. These programs good doubled the number of patients eligible to benefit from Ibrance.

The phase two open label single arm Encore CRC study evaluating the efficacy and safety well the combination of specialty and Middleby instead buxom up in patients with previous me on Threed BRAF Vsix Hundrede eat mutant metastatic colorectal cancer is currently.

Albert Bourla: Results from the study will be submitted for presentation at the Medical Congress in the second half of 2020 for abracitinib, our investigational JAK1 inhibitor for the treatment of moderate to severe atopic dermatitis. We look forward to sharing top-line findings from the Phase 3 Jade Compare trial in the coming months. Pending the successful conclusion of the core phase 3 studies, regulatory submission in the U.S. is projected for the third quarter of 2020, with subsequent markets following later in the year. This study is designed to assess the efficacy and safety of abracitinib or dupiluma placebo in adults on background medicated topical therapy with moderate to severe atopic dermatitis.

Hungary results from the study will be submitted for presentation at the medical Congress in the second half it's kind of trend.

For a brief seem to me our investigational Zika wonky she'd be through for the treatment of moderate to severe atopic dermatitis, well look forward to setting topline findings from the phase three data compare trial in the coming month.

Pending successful conclusion of the court phase three studies regulatory submission in the U.S. is projected for the third quarter of 2020 with subsequent markets. Following later that year.

This study is designed to assess the efficacy and safety received the me or Dupilumab placebo in adults background Medicaid the topic I'll start.

With moderate to severe atopic dermatitis.

Albert Bourla: The study also has a key secondary endpoint that it is designed to assess the effect of each severity of abracitinib compared with dupilumab in adults with moderate to severe atopic dermatitis on background topical therapy. There are up to five proof-of-concept readouts expected in 2020 from our industry-leading immunokinase pipeline. Our hope is to advance several of these into Phase III trials. This includes... TIK-2, JAK-1 with potential POC readouts for psoriatic arthritis and for topical formulations for psoriasis and atopic dermatitis, as well as, in oral, Zachary Peck for vitiligo, and Oral-Tick-2 for psoriasis.

The study also has the key secondary endpoint, but they do designed to assess the effect of on eats severe repeat.

<unk> compared with two people them.

Dogs with moderate to severe atopic dermatitis on but ground topic Uh huh.

There are up to five proof of concept three dogs expected in 2020 from our industry, leading immuno kinase pipeline.

Hope you use to advance several of these into phase two trials. These include.

<expletive> to zuk, one well decile bulkeley dogs for Psoriatic arthritis, and for topical formulation for so we also spent the topic the rights.

As well as Anoro zee.

For like the legal and oral <expletive> to for psoriasis.

Albert Bourla: This is a great example of our unique strategy to purposefully match a molecule to a disease where we think it has the potential to make the most difference, as well as the formulation that we believe has the potential to treat milder forms of disease. Our gene therapy platform is advancing with promising phase 1-2 hemophilia A data but is expected to support a phase 3 start this year. This would be our second gene therapy pivotal study following the ongoing Haemophilia B Phase 3 study. In addition, our DMD gene therapy program is gathering additional robust patient data, building on the progress we reported at the Parent Project Muscular Dystrophy Conference last June.

Just a great example, before you make strategy to purpose forget much imola could do a disease, where the thing because the potential to make the most difference as well as the formulation that we believe has the potential to threed milder forms of disease.

Our 2000 flux is advancing with promising phase one two haemophilia a data but is expected to support their phase three starts this year.

This would be our second do therapy people from started falling the ongoing hemophilia B phase three study.

Our DMD gene therapy program is gathering additional robust basin data building on the progress we serve the current project muscular Dystrophy Conference last June .

Albert Bourla: We are preparing for an expected POC in the first half of 2020 and the Phase 3 pivotal study, which will start in the second half of this year. We look forward to successfully completing the Phase 3 studies for our investigational 20-valent pneumococcal conjugate vaccine candidate in adults and remain on track to submit the biologics license application to the FDA by the end of this year. Pfizer's candidate represents a potential significant advancement compared with a potential 15-valent vaccine. If successful in Phase 3 and approved, the five additional serotypes may provide coverage against approximately 33% more strains that cause invasive pneumococcal disease in adults and 42% more strains causing the disease in infants in the United States. For our maternal vaccine for respiratory syngytia virus, RSV, we are preparing for an expected POC in the second quarter of 2020, followed by potentially swift progression to phase three.

We are preparing for an expected.

In the first half of 200 trend into phase three pivotal study.

In second half of this year.

We look forward to successfully completing the phase three studies for our investigational trend developing pneumococcal conjugated vaccine candidate.

Dolls and remain on track to submit the biologics license application to the FDA by the end of this year.

Pfizer's candid this represents a potential significant advancement compared with the potential 15 violent.

Successful in phase three and approved the five additional sure at times May provide cupboards against approximately 33% more strains that goes invasive pneumococcal disease in adults and 42% more strains goes into the disease in infants in the United States.

For our mcternan vaccine for respiratory syncytial virus RSV, we are preparing for an expected bulk in the second quarter of 2020 , followed by potentially streaks progression to phase three.

Albert Bourla: We look forward to sharing more updates on our pipeline during our upcoming Investor Day on March 31st. In summary, we finished 2019 with strong momentum, and we look forward to continuing that momentum in 2020. During the year, we generated a solid financial performance, further advanced our strong R&D pipeline, and took bold actions to reshape Pfizer into an innovation powerhouse that will build on our legacy of delivering breakthroughs that change patients' lives. Now, I will turn it over to Frank to provide details on the quarter and our outlook for the remainder of 2020. [inaudible]

We look forward to selling more updates on our pipeline during our upcoming Investor day on March 31st.

In summary, we finished 2019 with strong momentum and we look forward to continuing the momentum in 2020 .

During the year, we generated the solid financial performance further advance our strong R&D pipeline and too bold actions to reshape Pfizer into any innovation powerhouse, but were built on our legacy of delivering breakthroughs, but saints patients' lives.

Now I will turn it over to Frank to provide details on the quarter and our outlook for the remainder of 20 trend.

Unknown Executive: Thanks Albert, good day everyone. Now, we are moving on to the financials. Fourth quarter 2019 revenues were $12.7 billion, down 8% operationally versus the year-ago quarter. Excluding the impact of the consumer healthcare business, revenue was down 1% operationally. Our Biopharmaceuticals Group business revenues were $10.5 billion, up 9% operationally versus the year-ago quarter, with strong operational growth in Ibrance, Eliquis, Xeljanz, and Vindicoil and a second straight quarter of operational growth for our hospital business, including our sterile injectables. However, revenues for our Upjohn business in the fourth quarter decreased 32% operationally to $2.2 billion, with the Excluding the unfavorable impact of Lyrica in the U.S. and other recent product losses of exclusivity, fourth quarter 2019 revenues for Upjohn declined 6% operationally. I know Upjohn's business in China has been an area of focus, and fourth quarter 2019 revenues for Upjohn declined 1% operationally.

From.

Thanks, Albert Good day, everyone now moving onto the financials fourth quarter 2019 revenues were 12.7 billion down 8% operationally versus a year ago quarter.

Excluding the impact of the consumer healthcare business revenue was down 1% operationally.

Our Biopharmaceuticals group business revenues were 10.5 billion up 9% operationally versus a year ago quarter with strong operational growth in Ibrance, Eliquis Xeljanz, Infinera coil and a second straight quarter of operational growth for our hospital business, including cost sterile injectables.

Revenues for our up John business in the fourth quarter decreased 32% operationally to 2.2 billion with the primary year over year impact again being generic competition for lyric in the U.S. that began in July 2019.

Excluding the unfavorable impact of lyric or in the U.S. and other recent product courses of exclusivity.

Fourth quarter 2900 revenues for up John declined 6% operationally.

I know of John's business in China has been an area of focus and fourth quarter revenues were up John declined 1% operationally.

Unknown Executive: We saw the expected revenue declines for Lipitor and Norvasc in provinces where the Volume-Based Procurement Program has been implemented, and these declines were mostly offset by operational growth from products not impacted by the VBP program, including Celebrex and Viagra. Adjusted cost of sales as a percentage of revenue was favorably impacted by the July completion of the Consumer Health Care Joint Venture transaction with GSK, partially offset by the negative impact of foreign exchange and the lyrical loss of exclusivity. In the fourth quarter, we recorded a $0.06 loss per share on a GAAP basis, which was primarily due to a $2.6 billion asset impairment charge for UCRISA and restructuring, purchase accounting, and legal charges. Adjusted diluted EPS for the fourth quarter was $0.55 versus $0.63 in the year-ago quarter. The decrease was primarily due to lower revenues, again mainly due to the Lyrica LOE in the U.S., and higher operating expenses.

We saw the expected revenue declines Flipper tour and no invest in provinces, where the volume based procurement program has been implemented and these declines were mostly offset by operational growth from products not impacted by the VBP program, including Celebrex and by Agora.

Adjusted cost of sales as a percentage of revenue was favorably impacted by the July completion of the consumer healthcare joint venture transaction with GSK.

Partially offset by the negative impact of foreign exchange and the lyric loss of exclusivity.

In the fourth quarter, we recorded a six cents loss per share on a GAAP basis, which primarily due to a 2.6 billion asset impairment charge for you Chris.

And restructuring purchase accounting and legal charges.

Adjusted diluted EPS for the fourth quarter was 55 cents versus 63 cents in the year ago quarter to decrease was primarily due to lower revenues again, mainly due to the lyrics Louie in the U.S. and higher operating expenses.

Unknown Executive: I want to point out that diluted weighted average shares outstanding declined by 281 million shares compared to the year-ago quarter, reflecting the impact of shares repurchased during 2018 and 2019 and partially offset by dilution related to share-based employee compensation programs. Finally, foreign exchange had a negative impact of 158 million, or 1%, on fourth quarter 2019 revenues and a 3 cents negative impact on adjusted diluted EPS compared to As you can see on the chart, our 9% operational growth in the biopharma business was driven by strong performance by Ibrance, Eliquis, Xeljanz, Xtandi, Vindiquil, and Lido. Moving on to 2019 financial guidance. As you can see on the chart, we met or exceeded all components of our 2019 financial guidance.

I want to point out the diluted weighted average shares outstanding declined by 281 million shares compared to the year ago quarter, reflecting the impact of shares repurchased during 2018, and 2019 and partially offset by dilution related to share based employee compensation programs.

Finally, foreign exchange had a negative impact of 158 million or 1% on fourth quarter 2900 revenues and a three cents negative impact on adjusted diluted EPS compared to the year ago corner.

As you can see on the chart, our 9% operational growth in the Biopharma business was driven by strong performance by Ibrance Eliquis celgenes extending been the quill and in light of.

Moving on to 2019 financial guidance as you can see on the chart, we met or exceeded.

Components of our 29 team financial guidance.

Unknown Executive: Now I want to highlight how our 2020 guidance compares to 2019 revenue and adjusted diluted EPS. Starting on the left side of the slide, our 2019 results reflect partial year contributions from the consumer healthcare business segment, which we deconsolidated in the third quarter of 2019, excluding $2.1 billion in revenues generated from the consumer healthcare business segment. Total company 2019 revenues were $49.7 billion, and 2019 Adjusted Diluted EPS was $2.95. For 2020, the Adjusted Diluted EPS Guidance Range reflects Pfizer's share of Consumer Health Care's joint venture earnings that were generated in the fourth quarter 2019, and will be reported in first quarter 2020 along with Pfizer's share of the JV's anticipated earnings for the first three quarters of 2020. As you can see, the midpoint of our 2020 guidance range for revenues implies comparable performance to 2019 revenues after excluding the partial year contribution from consumer health care, as well as an anticipated $200 million in favorable impact from foreign exchange based on mid-January 2020 rates compared to last year.

Now I want to highlight how our 2020 guidance compares to 2900 revenue and adjusted diluted EPS.

Starting on the left side of the slide 2019 results reflect partial year contributions from the consumer health care business segment, which we deconsolidated in the third quarter of 2019.

Excluding 2.1 billion in revenues generated from the consumer health care business segment total company 2900 revenues were 49.7 billion.

And 2019 adjusted diluted EPS is $2 a 95 cents.

For 2020, the adjusted diluted EPS guidance range reflects Pfizer share of the consumer health Care's Joint ventures earnings that we generated in fourth quarter 2019.

And we'll be reported in first quarter 2020, along with Pfizer share of the Jvs anticipated earnings for the first three quarters of 2020.

As you can see the midpoint of our 2020 guidance range for revenues implies comparable performance. The 2019 revenues after excluding to partial year contribution from consumer health care as well as an anticipated 200 million favorable impact from foreign exchange based on mid January 2020 rates compared to last year.

Unknown Executive: Despite an anticipated $2.4 billion in LOE headwinds in 2020, we expect the midpoint of the revenue range to remain flat, operationally excluding consumer health care. Now, let's go through the full details of our 2020 financial guidance for total companies. As we've said, we are expecting the close of the transaction between our Upjohn business and Mylan to be completed in mid-2020. So we are providing three sets of guidance.

Despite an anticipated 2.4 billion in L., we headwinds in 2020, we expect the midpoint of the read your revenue range to remain flat operationally, excluding consumer health care.

Now, let's go through the full details of our 2020 financial guidance for total company.

As we've said we are expecting the close of the transaction between our up John business in Milan to be completed in mid 2020. So we are providing three sets of guidance.

Unknown Executive: First, Total Company, which reflects our current construct of the Biopharma and Upjohn businesses and excludes any impact from the pending Upjohn combination with Mylan. Second, New Pfizer, which is a full-year pro forma view that reflects the impact of the pending Vietras transaction by removing Upjohn and including $12 billion in cash proceeds from Upjohn to New Pfizer and other transaction-related factors such as transitional service agreement revenue. And third, Upjohn is a standalone business.

First total company, which reflects our current construct of the Biopharma and up John businesses and excludes any impact from the pending upjohn combination with Milan second new Pfizer, which is a full year pro forma view that reflects the impact of the pending the interest transaction.

Are we moving up John and including 12 billion in cash proceeds from up John to New Pfizer and other transaction related factors such as transitional service agreement revenue and third of John as a standalone business.

Unknown Executive: All of these scenarios are based on a full year of revenues and expenses in 2020. Beginning with total company, our 2020 revenue guidance of $48.5 to $50.5 billion reflects anticipated continued strong momentum in our biopharma business, primarily offset by the continued negative impact of product losses of exclusivity in our Upjohn business, primarily Lyrica in the U.S. Moving on to other elements of our 2020 Financial Guidance for Total Company. Compared with 2019 actual results, the midpoints of these ranges imply higher adjusted cost of sales as a percentage of revenues due to the continued impact from the Lyrica LOE, higher adjusted R&D expenses, and higher adjusted other income, which reflects earnings from the consumer healthcare joint venture, and lower adjusted SIA expenses and adjusted diluted EPS. In 2020, financial guidance for adjusted EPS assumes no new share repurchases, and we will As a result, our guidance for adjusted diluted EPS assumes diluted weighted average shares outstanding of approximately 5.65 billion, which is approximately the same as 2019.

All of these scenarios are based on a full year revenues and expenses in 2020.

Beginning with total company 2020 revenue guidance of 48.5 to 50.5 billion reflects anticipated continued strong momentum in our Biopharma business.

Primarily offset by the continued negative impact of product causes of exclusivity Interop John business, primarily lyrical in the U.S.

Moving onto other elements of our 2020 financial guidance for total company.

Paired with 2019 actual results the Midpoints of these ranges imply higher adjusted cost of sales as a percentage of revenues due to the continued impact from the lyrics Louie higher adjusted R&D expenses and higher adjusted other income which reflects earnings from the consumer healthcare joint venture.

And lower adjusted aside expenses and adjusted diluted EPS.

In 2020 financial guidance for adjusted EPS assumes no new share repurchases, we will focus instead on increasing the dividend and investing in the business. During this period of growth as a result, our guidance for adjusted diluted EPS assumes diluted weighted average shares outstanding of approximately 5.65.

5 billion shares which is approximately the same is 2019.

Unknown Executive: Moving on to financial guidance for the new Pfizer for the full year 2020, we now anticipate full year 2020 revenues between $40.7 and $42.3 billion, with the midpoint of the guidance range representing 8% operational growth as compared to 2019 biopharma revenues, excluding Meridian and Mylan, Japan, and an improvement from our initial July targets. This guidance range excludes 600 million in contributions from Meridian, Pfizer's subsidiary and manufacturer of EpiPen and other water injector products, as well as from the strategic collaboration with Mylan in Japan for the development, manufacturing, and marketing of generic medicines. Due to an organization realignment, both of these assets have shifted to Upjohn effective at the start of 2020. Both Meridian and Mylan Japan will be reported in Pfizer's up-john business beginning in the first quarter 2020. We now anticipate full-year 2020 adjusted IBT as a percentage of revenue of approximately 37 percent, also with improvements from July. We anticipate the midpoint of the guidance range for adjusted diluted EPS to be $230.

Moving onto financial guidance for new Pfizer for the full year 2020, we now anticipate full year 2020 revenues between 40.7 and 42.3 billion.

At the midpoint of guidance range, representing 8% operational growth compared to 2019, Biopharma revenues, excluding meridian in Milan, Milan, Japan, and an improvement from our initial July targets.

This guidance range excludes 600 million of contributions from Meridian, Pfizer subsidiary of manufacturer of EFI pen and other auto injector products as well as from the strategic collaboration with Mylan in Japan for the development manufacturing and marketing of generic medicines.

[noise] tutor due to an organization realignment both of these assets have shifted to upjohn effective at the start of 2020.

Both Meridian and Milan, Japan will be reported in Pfizer's up John business, beginning in first quarter 2020.

We now anticipate full year 2020, adjusted IBT percentage of revenue of approximately 37% also an improvement from July .

We anticipate the midpoint of the guidance range from adjusted diluted EPS to be to 30.

Unknown Executive: The operating cash flow guidance range remains approximately 11 to 12 billion dollars. This EPS guidance reflects the $12 billion cash that Pfizer will receive upon the close of the combination of Upjohn with Mylan, which will be used to pay down debt during 2020. As you can see, the midpoints for new Pfizer's 2020 revenue and adjusted IBT margin guidance have improved materially since our preliminary 2020 projections were projected in July in conjunction with the announcement of the proposed Mylan and Upjohn combination. We have provided a bridge from our initial July targets to this current guidance on the bottom of the chart for clarity.

The operating cash flow guidance range remains approximately $11 billion to $12 billion.

The Cps guidance reflects the 12 billion cash that Pfizer will receive upon the close of the combination of upcharge, Milan, which will be used to pay down debt during 2020.

As you can see the Midpoints for new Pfizer's 2020 revenue and adjusted EIBTDA margin guidance have improved materially since our preliminary 2020 projections will present in July in conjunction with the announcement of the proposed Milan and up John combination.

We have provided a bridge from our initial July targets to this current guidance on the bottom of the chart for clarity.

Unknown Executive: Upon the close of the Mylan Upjohn combination and once we become new Pfizer, you can expect the same level of detail in our 2020 guidance that we provided today for Total Company. Moving on to 2020 financial guidance for Upjohn For the full year 2020, we anticipate revenues of $8 to $8.5 billion, reflecting the continued negative impact of losses of exclusivity for products such as Lyrica in the U.S., which began facing multi-source generic competition in July 2019, and the expansion of the volume-based procurement program in China, and reflecting the inclusion of revenues and expenses associated with Meridian and MyLand Japan. We anticipate full year 2020 adjusted EBITDA for the Upjohn business of $3.8 to $4.2 billion. Other than the inclusion of revenues and expenses associated with Meridian and MyLand Japan, there are no operational changes to Upjohn's 2020 financial guidance compared with the preliminary financial targets provided in July of 2019.

Upon the close of the Milan up John combination and once we become new Pfizer you can expect the same level of detail 2020 guidance that we provided today for total company.

Moving onto 2020 financial guidance for up John for the full year 2020, we anticipate revenues of eight to 8.5 billion, reflecting the continued negative impact of losses of exclusivity for products, such as lyric and use which began facing multisource generic competition in July 2019.

And the expansion of the volume based procurement program in China.

And reflecting the inclusion of revenues and expenses associated with Meridian in Milan, Japan.

We anticipate full year 2020, adjusted EBITDA for the up John business of 3.8 to 4.2 billion.

Other than the inclusion of revenues and expenses associated with Meridian in Milan, Japan. There are no operational changes to upcharge 2020 financial guidance compared with preliminary financial targets provided in July of 2019.

Unknown Executive: Again, we have provided a bridge from our initial July targets to this current guidance at the bottom of the chart. Moving on to key takeaways regarding 2019, we delivered a strong fourth quarter with our biopharma business growing 9% operationally, which represents our go-forward business after the pending combination of Upjohn and Mylan. We provided 2020 guidance ranges for Total Company, new Pfizer, and Upjohn. Importantly, we are projecting strong organic revenue growth for new Pfizer in 2020. We accomplished key product and pipeline milestones since our previous quarterly update, and we returned $16.9 billion to shareholders in 2019 through a combination of dividends and share repurchases. Looking ahead, we remain committed to delivering attractive shareholder returns in 2020 and beyond. Now I'll turn it back to Chuck.

Again, we have provided a bridge from our initial July targets to this current guidance at the bottom of the chart.

Moving on to key takeaways regarding 2019, we delivered a strong fourth quarter with our Biopharma business growing 9% operationally.

Represents our go forward business after the pending combination of up John in Milan.

We provided 2020 guidance ranges for total company, New Pfizer and have John Importantly, we are projecting strong organic revenue growth for new Pfizer in 2020.

We accomplished key product and pipeline milestones since our previous quarterly update.

And we returned 60.9 billion to shareholders in 2019 through a combination of dividends and share repurchases.

Looking ahead, we remain committed to delivering attractive shareholder returns in 2020 and beyond now I'll turn it back to Chuck.

Unknown Executive: Thanks, Frank and Albert, for those remarks. At this time, operator, can we please poll for questions?

Thanks, Frank and Albert for those remarks at this time operator can we please poll for questions.

Unknown Executive: Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad. Your first question comes from Randall Spinecki from RBC Capital Markets. Great, thanks guys for the questions. I have two, one for Albert and one for Angela.

Ladies and gentlemen, if you will like to ask a question. Please press star one on your telephone keypad.

Your first question comes from Randall Stanicky from RBC capital markets.

Great. Thanks, guys for the questions I have two one for Albert and one for Angela Albert a couple weeks go you called out 4.5 billion in enabling cost than ESI and a.

Unknown Executive: Albert, a couple of weeks ago you called out $4.5 billion in enabling costs within SI&A with an opportunity to simplify. So how do we think about the cost savings opportunity after you close up? John, in terms of number one, how much incremental cost savings do you see beyond what is built into the 37% margin? And then, number two, how much of that could hit back in half 2020 versus 2021? And then I have a follow-up after that for Angela.

Within opportunity to simplify so how does how do we think all the cost savings opportunity. After you close up Sean in terms of number one how much incremental cost savings do you see.

Beyond what is built into the 37% margin and then number two how much of that could hit back half 2020 versus 2021 and.

And then I've a follow up after that French law.

Yes.

Unknown Executive: Okay, I think you should... How can he ask the question to Angela now? He can get back, okay. All right.

Okay.

You are so.

How can you just the questions loves alone you get back as you can get back okay. So.

Unknown Executive: and CoQ-8.

Indeed, we have.

Unknown Executive: We have approximately 14.3 billion in SNA this year, and I will ask Frank to run the numbers in more detail, and as I said, four and a half of that is what we call enabling functions. These are functions like finance, legal, HR, facilities that are facilitating and enabling the core functions, and Xeljanz. Discovering the products, manufacturing, and cost-opportunity savings already incorporated and in 2021 will be a much bigger part. So, Frank.

This year up or sort of working points would it be those of us I may and that was product run the numbers more be fails and.

As I said for the Hopper approximately <unk> is what we call enabling functions. These are functions like finance legal AIDS our facilities.

Our facilitating and enabling core functions business before core functions I mean R&D about this.

Discovering the products manufacturing workers.

Taking the proppant and commercial what countries and making them available to the patients. We do believe that these four on behalf of adoption of approximately 10000 people can be improved and we have plans to do so in the current guidance and the Alaska.

Unknown Executive: So Randall, just let me run the numbers, which is if you look at 2019 actual SINA, for example, we spent about $14 billion as a Obviously, that $4.5 billion that Albert alluded to in that $14 billion. If you look at our 2020 guidance for SINA, the range is $12 to $13 billion, midpoint $12.5. $12.5 from $14 billion is a decline of $1.5 billion. Now, roughly half of that is consumer because, you know, we went from consolidating consumer to equity accounting on consumer once the deal closed on July 31st of 2019.

Tactical meant there is a part.

Part of our.

Cost of opportunity saving already incorporated them into ended when do you want.

We would be a box bigger box so frank.

So Randall just let me run the numbers, which is if you look at 2019 actual assign a for example, we spent about 14 billion as a company.

Obviously that 4.5 billion that Albert alluded to in that 14 billion. If you look at our 2020 guidance for aside a range is 12 to 13 billion midpoint 12.5, 12.5 from 14 billion as a decline of 1.5 billion roughly half of that is consumer because you know we went from consolidating.

Similar to equity accounting on consumer once the deal closed on July 31st of all 2019, the remaining half is really operational savings across the company, including.

Unknown Executive: Inc., CDK6, Humira, Seagen, Xeljanz, CDK4, GLP-1, Elrexfio, Prevnar, Adcetris, Opdivo, improving from 35, from the mid-30s to 37%. And then to Albert's point, obviously, what we're doing now is working on further improvements that would obviously positively impact SINA, and that would flow to the bottom line.

Part of the four points, including some of the 4.5 billion that operate alluded to and that obviously helped contribute to the IBT as a percentage of revenue.

Proving from 35 from the mid Thirtys to 37% and then Talbot's point, obviously, what we're doing now is working on further improvements that would obviously positively impact the assign a that was slow to the bottom line.

Unknown Executive: Great. Thanks, Albert and Frank. Next question, please.

Great. Thanks, everyone for next question please.

Unknown Executive: Your next question comes from Chris Schatz from J.P. Morgan. Okay.

Next question comes from Chris Shaw from JP Morgan.

Unknown Executive: Thanks very much for the questions. I just had three quick product ones. The first was on Vindickel.

Great. Thanks, very much further questions just had a three quick product ones. The first was on on vendor Cal seems like a nice step up in all your patient metric seems like almost doubled or tripled from Threeq. You can you help bridge those figures with the sequential sales ramp we saw which wasn't quite as dramatic.

Unknown Executive: Seems like a nice step up in all your patient metrics. Seems like all those basically doubled or tripled from 3Q. Can you help bridge those figures with the sequential sales ramp we saw, which wasn't quite as dramatic? The second question I had was about Ibrance. Just elaboration there in terms of what drove the revised timelines for PALIS, and have you taken another interim look at the data at this point? And then, on Canuzumab, just an update in terms of what the status and outlook is for that product at this point. Thanks so much.

Second question. It was on Ibrance just elaboration there in terms of what drove the revised timelines for palace and have you taken another interim look at the data at this point.

And then finally on two new some add just an update in terms of what the status and outlook is for that for that product at this point. Thanks. So much.

Angela Hwang: Very good, thank you very much. I will ask Angela to address the Vintakel and Tenesumat questions.

Very good. Thank you very much I will ask ends I like to address that Vince our covenants and each of our questions and then I will say towards about fibrosis, and maybe a roster.

Angela Hwang: and then I will say a few words about Ibrance, and maybe I will ask...

Albert Bourla: for Michael to chime in, please.

Microphone timing please.

Unknown Executive: So, thanks for the question, and certainly we are pleased with the increased diagnosis, prescription, as well as the numbers of patients that are receiving Vindicale. As you said, our diagnosis is now up to about 9%. The ability for patients to receive prescriptions is up to about 64% of those that are diagnosed, and those that are receiving medications are at around 35% of those that are diagnosed. So, every quarter since we've been reporting this, we've been seeing some nice increases. So, you know, we're certainly pleased with that. I think in terms of just the sort of the commensurate alignment with the actual net sales numbers, I think that there are obviously there every single day. This is a dynamic situation, and the number and the proportion of patients, whether they are Medicare and commercial lives, those are changing. And so the growth tenets of those are going to affect us, I think, you know.

So nothing for the question and certainly we are pleased with the.

<unk> increased diagnosis prescription as well as the numbers of patients that are.

The keeping them to tell as you said are diagnosed is now up to about 9% the ability for patients to receive prescriptions up to about 64% of those diagnosed and those that are receiving medications are about 35% of those that are diagnosed every quarter. Since we've been reporting this we've been seeing some nice increases.

So we certainly piece of that.

I think in terms of on just the sort of the commensurate alignment with the the actual net sales numbers I think that there are obviously there you know every single day. This is a dynamic situation and the number and the proportion of patients whether they are Medicare and commercial lives those are changing and so the gross to nets.

Those are going into effect I think on what you see on a net sales basis. So I think that you know we are watching and really focused on driving diagnosis and ensuring that as many patients and get on these drugs as possible.

Angela Hwang: So I think that, you know, we are watching and really focused on driving diagnosis and ensuring that as many patients can get on these drugs as possible. And we're starting to see some really nice pick-up. But I think that it's still a very dynamic situation because we're really relatively new to this process. So we'll continue to monitor and should expect to see some, you know, quarter to quarter changes in terms of net sales.

And we're starting to see.

Some really nice pick up but I think that it's still a very dynamic situation because were really relatively new.

In this process. So we'll continue to monitor and should expect to see some quarter to quarter changes in terms of net sale.

Angela Hwang: and obviously the new patients that are contributing disproportionately because they are in fewer months of treatment in terms of sales.

And obviously that the new patients that contributing disproportionately because they are in your months or fall of treatment in terms of sales.

Angela Hwang: And then your second question was about Tenazumab. So we're really pleased that, in December of 2019, we completed our U.S. submission for Tenazumab. And we are also pursuing regulatory submissions in the EU and in Japan. This submission was done in close collaboration with the FDA, and it includes 2.5 milligrams for moderate to severe osteoarthritis patients. So at this moment in time, we're awaiting acceptance of this filing.

And then your second question was on todays.

So we're really pleased that in December of 2019, we completed a U.S. submission optimism app and will also be assuming regulatory regulatory submissions in the E and in Japan. This submission was done in close collaboration with the FDA.

It includes the 2.5 milligram in moderate to see if the yeah.

Outside of Houston. So at this moment in time waiting acceptance of this filing, but we see significant potential up at today's in that in osteoarthritis. So we're really excited about this filing.

Angela Hwang: But we see significant potential for Tenazumab in osteoarthritis, so we're really excited about this filing. And particularly because we're in a time when non-opioid solutions are very, very much needed by these patients. If you look at the market potential, Today, there are about 27 million Americans that suffer from osteoarthritis, and 11 million of those have moderate to severe OA. Additionally, 80% of those 11 million people have tried and failed three or more analgesics. So that tells us that there is just a huge amount of unmet need in this patient population. Patients are cycling through a number of, you know, pain, and pain medications. And there just is an incredible need for new options, and this is where we think tenazumab can really fill an unmet need. It has the potential to become the first-in-class non-opioid treatment for these patients, and we eagerly await the acceptance of this application from the FDA.

And particularly because we're in a time, where non opioid solutions are very very much needed for these patients.

Do you look at the market potential.

Today.

They are about 27 million Americans that suffer from osteoarthritis and 11 million those have moderate to severe away.

80% of those 11 million people.

I have tried and failed three or more analgesics. So that tells us that there is just a huge amount of unmet needs. In this patient population patients are cycling through.

A number of pain pain medications and they just is an incredible a need for new option and this is where we think today the Matt can be bill.

An unmet need it has the potential to become the first in class non opioid treatment for these patients and we eagerly await the acceptance of this file from the FDA.

Albert Bourla: Thank you. Now, let me address the question on Ibrance. The expected completion of the study slumbered a little bit, a few weeks actually. It was at the end of 19, excuse me, at the end of 20, and now it's moved to the very beginning of 21. The only reason for this is that the events are not coming at the pace that we had forecasted and expected. So, in other means, people are not progressing with their disease. I don't think we can draw any conclusions if that means good news or bad news. I think it's just the facts of the day.

Thanks, and I'll, let me address that question on Ibrance the expected.

Completion of as part of it slipped a little bit a few weeks section. It was at the end of the main thing excuse me the uplift Randy and I always moved in the very beginning go for a trend toward the only reason of these fees.

Events on upcoming Thats, a pace, but we've had.

For caustic of expected so in other means people are progressing.

Disease, I don't think who can draw any conclusions you for Buck means the good news or bad news I think he's got flux of with David We don't always that people are progressing equally in the two arms organic progressing.

Albert Bourla: We don't know if the people are not progressing equally in the two arms or if they're not progressing in the treatment arm. That remains to be seen when we unblind the data. As regards your question, if there was an interim analysis, there was not an interim analysis. So we haven't seen any interim analysis. There will be an interim analysis, but we do not expect that the most likely scenario is that the study will continue when this interim analysis comes. The study was designed to come to full completion, and the criteria that we have set to stop for efficacy in the interim study are very high. So, it's not impossible that this will happen, but the most likely scenario is that, as we had planned, the study will come to completion at the end of it. We are very, we still remain very, very encouraged and optimistic about Ibrance. Of course, it's phase three; you never know what will happen, but all the science behind it is supporting that we could have a positive outcome. And I will ask Michael to make a few comments on the science and what this means.

In the treatment are thought to be makes the between when we unblind the date.

As regards your question. If there was an interim analysis that was not I mean pretty manav. So we haven't seen anything menards that would be I mean, but im analysis, but we do not expect but.

Most likely somebody that's probably will compete when this even when I was just cars. The study was designed to come to full completion and the criteria of up we have set to stop for efficacy interim sub urban Red heart. So it's not.

Possible, but these were copper, but most likely scenario b piece, but as we had planned at the start to recover.

Sure. It's the end of this is what will happen. We are very we still remain very very.

And congrats on the previously a ballpark which of course, it's a phase three you never know what were big but.

All the science behind it.

Okay.

It's a positive often and I will ask that sort of markup to make few comments on the science and for what does this mean I just punctuate if you think that but it's got so well.

Michael Dolsten: Just pick out a few things that Albert described so well. Four aspects of why we are, you know, very excited and optimistic about the science and clinical data to predict a potential positive outcome for the DISCUS-PALA study. As you know, first of all, that the CDK4-6 inhibitor ibranes converge with estrogen receptor drugs to stop cancer cells or breast cancer cells from dividing. We have shown that in the Paloma 2 and 3 studies and more recently, we reported that we could reproduce, [inaudible] pulvocyclic Ibrance to stop the dividing of osteoreceptive positive breast cancer showed that this mechanism was very well operating in a powerful And finally, let me remind you that other agents that act on estrogen receptor positive breast cancers and converge with the pulvocyclics, such as tamoxifen and aromatase inhibitors, were all initially developed for metastatic cancer and did very well.

For aspect of why we are very excited and optimistic about the science and cleaning because they thought to predict a potential positive outcome for the discuss pellets study.

As you know first of all that.

The CDK fourth fixing EBITDA ibrance converge with estrogen receptor drugs to stop cancer cells breast cancer cells to divide.

We have shown that independent two and three studies and more recently reported that we could revpas use.

Datadirect you need real world evidence based on real World data from flipped over one another database is noteworthy including holds the overall survival.

Again, showing in medical practice the importance of these drugs three the pellet studies that looked at the ability of.

But it was I believe I brands to stop dividing.

As a student receptive posted breast cancer showed that is mechanism was very well operating in a powerful way.

And finally, let me remind you that other agents that act on.

Let's do unreceptive posted breast cancers and couldn't with the publicized such as Tamoxifen Aromatase inhibitors. All were in these initially developed in metastatic cancers and did very well in advance treatment you know the breast cancer. So it is for observations and others makes us continue.

Michael Dolsten: in adjuvant treatment in early breast cancer, so these four observations and others.

Michael Dolsten: It makes us continue to be excited and very optimistic.

Excited and optimistic and as other but the alluded to a relatively.

Michael Dolsten: And as Albert alluded to, a relatively small change in projected trial is, you know, based on a trial that actually started four and a half years ago. And it is quite common that in the final 12 months or so, minor changes in enrollment rate and process planning for study reports can affect the trial. But with all of this, you can hear we remain encouraged and enthusiastic about what Ibrance is doing.

Small change in projected that trial is you know.

In front of try that actually started for the Hawk, yes. It go and it is.

Quite common that in the final 12 months or so minor changes in enrollments right and proceeds planning for study reports Kenefick trial, but we'd all of the as you can hear we remain encouraged enthusiastic about what the ibrance can offer for argument treatment for breast cancer right. Thanks for the helpful context.

Unknown Executive: Right. Thanks for the helpful context, Michael. Next question, please.

Michael.

Next question please.

Unknown Executive: Your next question comes from Terrence Flynn from Goldman Sachs.

Next question comes from parents Flynn from Goldman Sachs.

Unknown Executive: Hi, thanks for taking the questions. Maybe just two product ones from me. I was wondering if you could talk about Ibrance, the rest of the world dynamics, any specific headwinds this quarter, and how to think about the trajectory into this year. And then for Xeljanz, I was wondering if you could give us a split of sales by indication and if you're seeing any impact in RA from the launch of AbbVie's Rynvok on either share or price. Thank you.

Hi, Thanks for taking the questions maybe just to product ones for me was wondering if you can talk about hi brands rest of world dynamics any specific headwinds this quarter and how to think about the trajectory into into this year and then for Xeljanz. I was wondering if you can give us a split of sales by indication and if you're seeing any impact in our a from the law.

Much of Abbvies run Voc on either share price. Thank you.

Angela Hwang: Thank you very, very much. So, Angela?

Thank you very robots are Angela sure.

Angela Hwang: Sure. So first of all on iBrands, you know, we continue to see good growth and strong growth ex-US, but probably two factors that are tempering net sales, as you saw in Q4. The first is pricing, and that, you know, continues to be something that we work hard at, especially in the EU, to gain access to our product in Europe. And the second is class growth. So if you look at the class growth of the CDK class through the quarters, that has increased, but over the last quarter, it has tempered. And it's sort of sitting at around 35% class growth right now, or class share. But within that, The iBrand still has a very, very high product share in the 1980s.

First of all on Iran.

We continue to see good growth and strong growth ex us, but probably too.

Factors that are tempering the net sales as you saw in Q4. The first is on pricing and that continues to be something that we work hard at especially in here to gain access for flat product.

In Europe , and the second class growth. So as you look at the Clos growth of the CDK Clos through the quarters.

That has increased but over the last quarter it has tempered.

And it's sort of sitting at around 35% CDK class growth right now plus share but within that.

Yeah, I brands still has a very very high product here in the 80.

Angela Hwang: So I think it's pointing out to us the fact that there's still opportunity for us to grow and that growing the CDK class is going to be an area of tremendous focus for us, ex-US, in 2020 and beyond. Your second question was around Xeljanz. And so on Xeljanz, again, we continue to see excellent growth in Xeljanz. In fact, despite the fact that you only see this sort of 1% net sales growth in Q4, I'll point out that globally, full year, we had 29% growth of Xeljanz, which is one of the highest of all of our core brands here at Pfizer in our entire portfolio. Q4, we saw 23% prescription growth, and this prescription growth was driven by extremely strong performance in rheumatoid arthritis which really was not impacted by the label changes and we still continue to see strong growth in ulcerative colitis even though here was the biggest label change and so physicians did have to adjust the way that they were prescribing Xeljanz but we expect this growth to continue because we have excellent momentum and confidence in prescribing from our physicians, we have significant unmet need and we have greatly improved access and this access is in fact what drove the one percent net sales in Q4.

I think its pointing out to us.

Fact that there's still opportunity for us to grow and that outgrowing. The CDK class is going to be an area of tremendous focus for US you left in that 2020 and beyond.

Your second question was around Xeljanz.

And so on Xeljanz again.

We continue to see an excellent growth in Xeljanz in fact.

Despite the fact that you only see the sort of 1% net sales growth in Q4, I'll point out that globally full year, we had 29% growth of Xeljanz, which is one of the highest all of our core brands here are five entire portfolio Q4, we sold 23% prescription growth.

And this prescription growth was driven by extremely strong performance in rheumatoid arthritis, which really was not.

In fact, it by the label changes.

And we still continue to see strong growth in ulcerative colitis, even though here was the biggest label change.

And so physicians that have to adjust the way that they were prescribing.

Xeljanz, we expected growth to continue because we have excellent momentum and confidence in describing from acquisitions significant unmet need and we have greatly improved access.

And this access is in fact, what drove the one person net sales in Q4, there was a into for 18, we thought inventory build at the end of year, which didnt happen in Q4 19. So that was one of the reasons that affected our Q4 performance in 19, and then also at more importantly throughout.

Angela Hwang: There was a in Q4 of 18 we saw an inventory build at the end of the year which didn't happen in Q4 of 19, so that was one of the reasons that affected our Q4 performance in 19 and, also, and more importantly, throughout the course of 2019, we gained significant access, in fact, we added 59 million incremental lives through contracting, and it's because of the timing of when these contracts were signed or renewed that drove the subsequent impact of rebate So I think, stepping back, we're really pleased with the access that we do have with Xeljanz and, since it was launched eight years ago, this is the most favorable access situation that we've ever had, which is very important when it comes to our ability to compete with Rynbok.

The course of 2019, we gained significant asset in fact, we added 59 million incremental lives through contracting.

It's because of the timing of when these contract was signed or renewed that drove the subsequent impact of rebates and this sort of came to ahead and sort of disproportionately affected us in Q or 19, So I think stepping back where we please with the assets that we do have in Xeljanz, Sam and since its launch.

The go this is a.

A a them a favorable excess situation that we've ever had which is very important when it comes to ability to compete with Red bar and you asked a question around been box and just due to sort of put into perspective, I think that we are excited about having another competitor helped drive.

Angela Hwang: You asked a question about Rynbok just to sort of put things into perspective. I think that we are excited about having another competitor help drive the growth of the JAK class in all of our indications. That being said, Xeljanz still enjoys a lion's share, a leading market share, especially in RA, where we have more than 15% of the market share of the entire class.

Growth of the Jack class in.

All about indication and that being said.

Still enjoy a lion leading market share, especially in our a way we had more than 15% of the market champion type.

Unknown Executive: Great. Thank you very much, Angela. Next question, please.

Right. Thank you very much Angela.

Next question please.

Unknown Executive: Your next question comes from Umer Raffat from Evercore. Hi, thanks so much for taking my question.

Next question comes from Omar Saad from Evercore.

Hi, Thanks, so much for taking my question first Albert if I may what are you hearing on a possible upcoming rule on Ipi, there's lot of press that.

Albert Bourla: First, Albert, if I may, what are you hearing on a possible upcoming rule on IPI? There's a lot of press that companies have been notified by the White House. I was curious what you know about it, and is it something we should be very concerned about? Michael, one quick one for you on DMD gene therapy for a minute. You mentioned there's a proof of concept coming. My question is, have there been any additional protocol-driven pauses in enrollment? And I ask because I recall when the first SAE on acute kidney injury happened, the trial was paused, and I'm curious, has anything like that happened again? And then, Frank, maybe just quickly on the SINA line.

Companies have been notified by White House I was curious what do you know about it and it's it's something we should be very concerned about.

Michael a two quick ones one quick one for you on the DMD gene therapy for a minute.

You mentioned there is a proof of concept coming my question is have there been additional protocol driven pauses in enrollment and I ask because recall when the first essi an acute can just kidney injury happened a the trial was paused and I'm curious has anything like that happened again and then finally, Frank maybe just quickly on assign a line I know, it's a little higher than.

Michael Dolsten: I know it's a little higher than consensus, but technically, year-over-year versus 4Q18, it wasn't that much higher, but I also realized 4Q18 had some consumer. Maybe you could just tell us about your holiday party. Thank you very much.

Consensus, but technically you every year versus Fourq you 18, it wasn't that much higher but also realize for Q1 8 had some consumer maybe you could just talked about your holiday party. Thank you very much.

Albert Bourla: All right. So let me start with the IPI. We have not received any notification about that. So there is no news from our side other than what we read in the newspaper. Michael.

All right. So let let me start with the Ipi.

We have no, Pennsylvania notification on Bucks. So there's no news from our side other than what we read on them, but just paper. So Michael Yeah, just to remind you we shared at the PBM do you come friends middle of last year update on.

Michael Dolsten: Yeah, just to remind you, we shared at the PPMD conference in the middle of last year an update on six patients dosed with our DMD gene therapy that showed encouraging data on expression in muscle fibers, and the amount of microdystrophin. In some of the patients, we also had an opportunity to report the encouraging trends on functional outcomes. We have dosed additional patients since then, and we continue to guard our experience with efficacy, safety, and clinical management that are incorporated in the procedures how we manage these patients going forward. We plan to conclude phase two this spring. And based on current data and insights, we are planning to start phase three, of course, pending regulatory dialogues later this year, as indicated in Albert's opening remarks.

Six patients dosed with our DMD gene therapy that showed encouraging data on.

Expression, you muscle fibers, among the Microdisplay roofing and on some of the patients we had once an opportunity to report the encouraging trends on functional.

Outcomes, we have dosed additional patient since then and we continue to go to experience, an efficacy safety and cleaning vehicle management or incorporate that in.

And to proceed is how we manage these patients going forward, we plan to conclude phase to the spring and based on current they've done insights, we or plan to start phase three of course pending regulatory downloads late this year as it indicates any and all of its opening remarks.

Unknown Executive: All right, Fran, maybe you want to tell us about the holiday party. I was not invited. Sure, yes.

All right Frank maybe you want to tell us about the holiday.

Unknown Executive: I wasn't invited either, so maybe Uber wasn't the party. Let me run the numbers, and then I'll explain what happened. So for the quarter, S9A all in was about $4.1 billion. It was up about 4% operationally, $100 million, give or take from the prior year quarter. What really drove that was increased investment behind some of our brands, some of our oncology products, some of our launch products like Vindiquil, and some increased investment in emerging markets. But it was really an investment, you know, in terms of

Charlie I wasn't invited either if you listen to party.

Let me run the numbers in L. explain what happened so for the quarter OSI assigned Aon and it was about 4.1 billion. It was up about 4% operationally 100 million give or take from the prior year quarter, what really drove that was increased investment behind some of our brands some of our oncology products.

Our launch products like than <expletive> will add some increased investment in emerging markets, but it was really investment.

Albert Bourla: Thank you, Michael. And just to make a comment, we are very, very diligent in the way that you allocate, and when we have opportunities to put in promotional money so we can have a very strong start, we do it, and we take that money, usually by being very diligent in the way that we control the indirect. I have been very clear, but direct with indirect is a very clear distinction in our minds. So when it comes to things that are overheads and things that they are not affecting directly, the business results, we are very, very tough. And when it comes to areas where these investments can affect business results, we are creative and generous. So that's what you see here.

In terms of being bought supporting our brands.

Thank you my comments it doesn't make a comment we are very very diligently in that way that's going to pick up.

We are when we have opportunities.

In the promotional money, so we're going to get a very strong star we do it and we take those money it usually by being very visiting the way that we control the indirect expense I have been very clear, but direct within direct is very clear distinction.

So when it comes things that they are overheads and things that they are not affecting you reckon that business results. We are very very tough and when it comes through.

Areas that.

The investments can affect business results, we are creative and centers. So that's what's your sort you clearly direct expense and these are all direct expense, but I think we're saying by the way. Although you did in Boston drops to RMB right. Now we are increasing R&D investments, but we got to get isn't going to the residents only for brokers.

Unknown Executive: QE-2, QE-3, QE-4, QE-5, QE-6, QE-7, QE-8, QE-9, QE-10, QE-11, QE-12, QE-13, QE-14, QE-15, only for projects. We are not increasing infrastructure; we are not increasing research centers. At large, we maintain a very strong presence there, and we keep that very strong. But what is driving the increase in R&D? It's more Phase 3 or Phase 2 studies. It's very clear.

Only for projects, we are not increasing infrastructure or degrees in recent senders blocks, we maintain a very strong presence there and we keep very strong, but what is driving the increase R&D. This more phase three offer you. Some success he is very clear.

Unknown Executive: Thank you. Next question, please.

Thank you next question please operator.

Unknown Executive: Your next question comes from David Reisinger from Morgan Stanley. Yes, thanks very much.

Your next question comes from David Risinger from Morgan Stanley .

Yes, thanks very much so three questions. Please first Albert could you discuss why Pfizer decided not to repurchase shares and 2020 and then maybe Frank you can comment about comment on how we should think about the Pos implications.

Unknown Executive: So I have three questions, please. First, Albert, could you discuss why Pfizer decided not to repurchase shares in 2020? And then maybe Frank, you can comment on how we should think about the EPS implications. When we consider your guidance relative to consensus, which assumed some share repurchase, Second, regarding the opportunity to rationalize the $4.5 billion in costs, could you just give us a sense for what percentage reduction is reasonable to assume a few years out? I was guessing maybe 20%, but I just don't know what's reasonable. And then third, regarding the transfer of $600 million in revenue to Upjohn, does that change the economics that Pfizer will receive as part of the exit to Mylan? Thank you.

When we consider your guidance relative to consensus which had interesting some share repurchase.

Second regarding the opportunity to rationalize the four and a half going in cost can you just give us a sense for what percentage reduction is reasonable to assume a few years out I was guessing maybe 20%, but I just don't know what's reasonable and then third regarding the transfer of 600 million in revenue to up John does that.

Change the economics that Pfizer will receive as part of the exit.

Albert Bourla: Yes, and I think basically all questions can be answered by Frank. I would just make some introductory comments. The reason why, in our capital allocation, we are allocating money right now to increase the dividend and also to invest in our business, or the OPEX to modernize our facilities, or the CAPEX to modernize our facilities, or the reason why we don't do any capital purchases right now is because we want to make sure that we maintain very strong firepower to invest in the business. The past was a very different Pfizer. The past of the last decade had to deal with declining revenues, constant declining revenues. And we had to do what we had to do, even if that was financial engineering, such as purchasing back our shares. We couldn't invest in them and create higher value. Now it's a very different situation.

Two mylan.

Thank you Jeff.

Yes, and I think basically all questions can be answered by Frank I would guess make some introductory promised the reason why no capital location. We are allocating wrote more money to increase with the weather and also to investing all business all the opex to modernize our facility or have a topics and whether or not sort of assume it is the reason why don't do right now.

Oh, sorry purchase it is because we want to make sure but the main thing quite a strong our power investment the business.

Boston was a very different buckets, unless they carry equipped to deal with declining or whatever is constant declining over average and.

We had to do what do you believe up was pretty massive as an area.

Assessing Bach ourselves good the investor and create higher volume I was a very different situation. We are a very different company. The company is going to the best in class topline growth revenue story stopping from office appraisal well for all four of upsell the middle of the gear from the expected separation of options Im going to the here.

Albert Bourla: We are a very different company. The company is going to have a best-in-class, top-line growth, revenue story, starting now from the separation of Abso in the middle of the year. And we do not need it. We can organically grow EPS. As you can see, all our projections for EPS this year are organic, no special purchases. But we can use the capital to invest in good phase two, and phase three assets that will build our pipeline. So this is the strategy behind it. Now, let me ask Frank to run the numbers.

And we do not me, we've got organically growing because as you can see all our projections I mean, yes, this year or gotten Oh, sorry, pets, but you can use the carpet, though we invest in good face to face. We also look were built our pipeline. So this is likely to be hard now let me ask from London numbers.

Unknown Executive: David, now, all I'll do is I don't want to duplicate anything Albert said; I'll just add a couple of things on the share repurchases. One, we also announced a dividend increase in December, so obviously, we continue to deploy capital in the area of dividends, which we think is important to our investment thesis, and that's something, obviously, as we go forward, we'll continue to look at. And then obviously, our 2020 guidance assumes no repurchases, so when you look at the improvement, which is material in terms of the midpoint versus Let me ask you a couple of other questions. On the $600 million transfer to Upjohn, and you know, does that change any of the economics? Let me give some context on this, which is one thing that hasn't been decided. We are still in negotiations with Mylan on those two businesses If, by the way, if we don't come... those businesses would remain with new Pfizer.

So David no.

Well I'll do is I don't want to duplicate anything Albert said I'll just add a couple of things on the share repurchases. One we also announced the dividend increase in December . So obviously, we continue to deploy capital in the area dividends, we sent which we think is important to our investment thesis and that's something obviously as we go forward. We'll continue to look at and then obviously, our 2020 guidance assumes no.

Repurchases. So when you look at the improvement which is material in terms of the midpoint versus what we did back in July none of that is coming from share repurchases.

Let me ask your other couple of questions on the on the 600 million transfer to up John and you know it does that change any economics, let me kind of let me give some context on us which is one nothing's been decided yet.

We are still in negotiations with Milan on the on those two businesses.

Whether or not they will transfer to the interests upon close.

If we don't come to an agreement does businesses would remain with new Pfizer and so we're still in negotiations and so in terms of the economics, I'd say more to come still to be determined and listen when we complete that obviously, helping in a better position to answer that on the 4.5 billion of indirect spend and Directionally what do we.

Unknown Executive: And so we're still in negotiations. And so, in terms of the economy, I'd say more to come, still to be determined. And you know, if and when we complete that, obviously, I'll be there to answer that. On the $4.5 billion of indirect spend, and you know, directionally, what do we think we can do there? I don't want to give a specific percentage because we're still working our way through the process, but I think I alluded to this earlier.

We can do the I don't want to give a specific percentage because we're still working our way through the process, but I think I alluded to this earlier, which is you know we've already made some nice headway I think we can make additional headway that additional headway with a show up in ESI and a obviously aren't test would be for that to show up.

Unknown Executive: You know, we've already made some nice headway. I think we can make additional headway. That additional headway would show up in SINA, and obviously, our intent would be for that to show up, and the IVT as a percentage of the revenue line. So that's what we're gonna do. Our intent is to improve upon those numbers, and as we work our way through the process, and as we have more to report, we'll make sure we do so.

In the and the IBT as percentage of revenue lines. So that's what we're working to do our intent is to improve upon those numbers and as we work our way through the process and as we have more to report we'll make sure. We did so thank you Frank it doesn't I comment on the reasons why we transfer those business to blobs on both of his business is first of all.

Albert Bourla: Both of these businesses, first of all, they fit more under Absinthe in terms of the dynamics that they have, so they can be managed much better. And secondly, I think they fit very nicely with Mylan because one, it is the predominant EpiPen business, but Mylan is, but right now, it is served by Mylan. We are providing for them. And the second, it is a partnership that we have with Mylan that was established years ago and with Generics in Japan. So, both of them fit much better in Beatrice, and that's the reason why we separated. And also, that will allow you to have, in case this happens, a much cleaner view of the growth trajectory of the company because now you know exactly what the P&L of the remaining ones will be. Thank you. Next question, please, operator.

They fit more under option in terms so for the dynamics that they have so they can be modest amounts, but and secondly.

I think they fit very nicely with Mylan because won it is the epic been predominantly business, but mylan are you sort of abide by sub between the Mylan, we are providing for them and the second therapies.

A partnership that compare with Mylan bucket was established years bark and with genetics is up so both of them feel much better.

Matt Industries and that's the reason why we support multiple book will allow you to having kids, but these topics and Watson will either you or for growth objective of the company because now you know exactly what would be the BNL of remain.

Thank you next question please operator.

Unknown Executive: Your next question comes from Louise Chin from Cantor. Hi, thanks for asking.

Your next question comes from Louise Chen from Kantar.

Unknown Executive: Thank you for taking my questions here. I had a few.

Hi, Thanks for taking my questions here side. If you. My first question is is the 6% approximately 6% five years fail cagar for Standalone Pfizer the new Pfizer still hold second question I had is how much of a priority is M&A for you or under the new Pfizer and what kind of size of deals.

Unknown Executive: My first question is, is the 6% or approximately 6% five-year sales CAGR for standalone Pfizer or the new Pfizer still holding? The second question I had is, how much of a priority is M&A for you under the new Pfizer? And what kind of size of deals or types of deals are you most interested in? And the last question I have is about the PCV data set that's coming through. You and a competitor also have a whole set of PCV data. I'm just curious how you see that landscape evolving over time. Thank you.

Types of deals are you most interested in and last question I have is on the PCV data set that's coming through you went a competitor also has a whole set of PCB data I'm just curious how you see that landscape evolving over time. Thank you.

Albert Bourla: Thank you very much, Luis. Let me start with the 6% CAGR. If it still holds, absolutely. It still holds.

Thank you very very much Louise let me start with a 6% CAGR if you'd still holds absolutely feel fall. So it's actually as you can see if anything else.

Albert Bourla: Actually, as you can see, if anything else, this business that we are projecting for five years, all the way to 25, actually, a CAGR of 6%, this year performed 8%, 9% for the quarter, and we are projecting 8% for 2020. So, definitely, we are on good terms with a way to achieve that. As regards the M&A, yes, the M&A is a very important part of our strategy, and as I just alluded before, this is why we are not diluting our purchasing power with stock purchases right now because we do believe that we can create significant value with the right strategies. Now, we never say never to anything, but strategically, we have made very clear that we are not interested in a big M&A that will have cost synergies as a value driver because, first of all, that will likely be diluted in our top line growth.

This business, what they're projecting five years take all that wasn't ptwenty five oxforty cagar.

Oh for 6% this secure perform but they person by person for the core currently we are projecting 8%.

And the twins, so definitely we are.

On good, let's say a way whatsoever.

Regarding the.

Yes, the M&A is a very important part.

Our Slackens and business are you just alluded to before this is why also we are not diluting our firepower with spoke purposes right now because we do believe up it can create significant volume with the right started.

But we never say never to anything but the strategic orders have made but here, but we are not be interesting for a big M&A, but there will have a cost synergies as far as a driver because first of all but that would be like diluted.

Albert Bourla: I don't think there are many companies that can have this type of growth trajectory that we have in the next few years. Secondly, it could be destructive because having a big M&A means that thousands of people will have to work on integrations rather than supporting all these products that we just saw that are growing in the 20s and 30s and also all this pipeline that is coming up. So we never say never, but this is not our strategy. Our strategy for M&A is to be able to have phase two, phase three programs ready, phase two, phase three, which could become potential medicines in the period 25, 26, 27, 28, so that we can augment our internal pipeline and be able to maintain the 6% growth for the long term, actually for the very, very long term. Because it's right now, five years, I would say it's the long term.

Planned growth I don't think there are many companies that vacant for this type of growth to executive what we've had the next few years second quick would be just because of having a big M&A means that the thousands of people will have to worker integration rather than the supporting all these products look because I saw that they're growing trend. This.

Purpose and also all of us by block this coming up so we never say never but this is not talked about almost about these for M&A. If these to be able to Chris.

Face to face three.

Problems right face to face three which could be competency medicines that Peter can be far from the six movies Seventwenty eight solve up we can oh, Ben internal pipeline and be able to three main thing to 6% growth for the long term actually for the very very long time, because she is right now five years, I would say said longer and the other thing.

Albert Bourla: 6% Kager. It is risk-adjusted. I repeat, it is risk-adjusted.

They want to emphasize it isn't the 6% CAGR.

These risk adjusted RTP this risk adjusted but mixed up you know projections, we are adjusting all that mountain read start this right no appropriately.

Albert Bourla: That means that in our projection... We are adjusting all the non-REID studies right now appropriately. Now, if all the Phase III goals are done the right way and they are all successful, it's not going to be 6%. It's going to be double digits. It will be 12, 13, 14, 15.

No if all the phase three goals.

The right way and they are all success.

To be six person is going to be doubled his would love as before.

Oh, if everything sales also grew 6% will be very low, but these statistics walks and.

Albert Bourla: Now, if everything fails, also will not be 6%; it will be very low. But if statistics work and the study, Let's say at 50% more or less are successful, that means that we will achieve 6%. That's why I want to emphasize that there is no binary event in our projections. A binary event would be if the 6% was dependent on two or three major readouts that could go one way or another could affect. Right now, they are dependent on 15, 16, 17 blockbusters and then many others that are much smaller.

Stock these let's say at 50% more or less our successful, but means but let's say, 6%. That's why I want to emphasize that there is no binary event.

Projections by not even would be if that 6% was dependent or two or three major results, but if they could go one way or another perfect right. Now there are dependent on 15, 16, 17 blockbusters that many other they're much more.

So then I thought maybe something thread of up before I ask.

Micro decremental BCP data and what we see only thing I wanted to had just a punctuate everything Albert said is and why we focusing on phase to the phase three it's because the yellow lease really start to kick in in 2027. So if you think about were in January of 2020, we literally have eight years to work our way through this problem and by the way given that.

Albert Bourla: So...

Albert Bourla: Then, Frank, maybe something to add to that before I ask Michael to comment on the PCV data?

Unknown Executive: And Luis, the only thing I wanted to add, just to punctuate everything Albert said is, and why are we focusing on Phase 2B and Phase 3? It's because the LOEs really start to kick in in 2027. So if you think about we're in January of 2020, we literally have eight years to work our way through this problem. And by the way, given that kind of a time frame, given the breadth and strength of our pipeline, given our balance sheet, and our capacity, obviously, we feel confident we will be able to solve it.

Kind of timeframe, given the breadth and strength of our pipeline given our balance sheet. Our capacity, obviously, we feel confident we will be able to solve.

Yeah, Yeah I'm on the fees that you asked about Oh, what through my next generation. So as you know we have an adult and pediatric studies ongoing.

I don't study has been given breakthrough designation. It went date in September based on our encouraging phase two data.

Michael Dolsten: Yeah, yeah, I'm pleased that you asked about our Pneumo Next Generation. So, as you know, we have adult and pediatric studies ongoing. The adult study has been given a breakthrough designation on the 28th of September, based on our encouraging phase 2 data. And we expect very soon to report the phase 3 outcome of the adult PCV20 trial. And obviously, we are optimistic about that outcome based on phase 2 and the breakthrough designation.

And we expect very soon to report phase three outcome over the other piece of your 20 trial and obviously, we are optimistic about that outcome based on the phase two and a breakthrough designation.

Underpin the rhetoric, we have now accumulated from the post fourth dose data what appears to be it's when the phase two study.

These data from the fourth those fraud or substantiate the positive data reported in the press release after the saw those and we expect initiation of phase through three three soon for the infant vaccine pending discussions with regulators to fool datasets, we'd be presented at the major.

Michael Dolsten: On the pediatric vaccine, we have now accumulated further post-fourth dose data of the PCV20 Phase 2 study. These data from the fourth dose further substantiate the positive data reported in the press release after the third dose, and we expect initiation of phase 3 soon for the infant vaccine pending discussions with regulators. The full data set will be presented at a major vaccine-related conference likely in the mid-term of this year.

Vaccine really to conference likely middle of this year no other comment at all seen these introduction very nicely on.

The improved relative coverage of the PC btwenty from us versus potential.

Michael Dolsten: Now, Albert commented also in his introduction very nicely on the improved relative coverage of the PCV20 from us versus a potential competitor 15-valent, and he mentioned 33% better coverage for adults and 42% better coverage in the U.S. for infants, obviously, very important and significant better coverage.

Compared to 15, valence and he mentioned, 33% better coverage for others and 42%, but the coverage in the U.S. for infants, obviously very important significant better coverage I just wanted to punctuate when you look into top European market similar.

Improved coverage and idols sexually 60% to 100% infants eight to 200 prison. This is all for invasive pneumococcal disease Olson U.S., we have analyzed for community acquired pneumonia, where we see substantial that to cover at food a twin do buses potential.

Michael Dolsten: I just wanted to point out that when you look at the top European market, similar to improved coverage in adults, it's actually 60% to 100% in infants, 80% to 200%. This is all for invasive pneumococcal disease. Also, in the U.S., we have analyzed for community-acquired pneumonia where we see substantially better coverage for the 20 versus a potential 15-valent. So all in all, you can see we look forward to data sets advancing the program and think it would be the premier 20-valent and premier pneumococcal vaccine for patients. Thank you.

Activate them. So all in all you can see we look forward to data sets advancing the program and think it would be the premier trend surveillance and premier pneumococcal vaccine for patients.

Thank you.

Next question please operator.

Next question comes from Steve Scala from Cowen.

Thank you Ive, a few questions and increasing the dividend was mentioned twice, but it sounds as though up John will be spun not split in which case the dividend will be reduced so I'm wondering if you could clarify the dividend comment and I assume the it would 2020 EPS guidance implies a spin not a split.

Albert Bourla: Thank you. Next question, please, operator.

Unknown Executive: Your next question comes from Steve Scala from Canada. Thank you.

Unknown Executive: I have a few questions. An increase in the dividend was mentioned twice, but it sounds as though Upjohn will be spun out, not split, in which case the dividend will be reduced. So I'm wondering if you could clarify the dividend comment. And I assume the 2020 EPS guidance implies a spin, not a split. Secondly, on the abracitinib versus dupixent study, given the fact that it is completed, Michael, I'm wondering if the data met the very positive portrayal you provided on the Q3 call, which included superior itch relief to dupixent. And then lastly, will the proof-of-concept DMD data be presented at the March 31st meeting? Thank you very much.

Secondly on the ever said tonnage versus Dupixent study given the fact that it is completed Michael I'm wondering if the data met the very positive portrayal you provided on the Q3 call which included superior its relief to Dupixent.

And then lastly, well the proof of concept de M.D. dad it'd be presented at the March 30, Onest meeting. Thank you very much.

Well. Thank you very much the very good question. So Frank why don't you clarify once more the D.V. them short so Steve in terms of the guidance you're right. It assumes a spin not a split.

And then in terms of the dividend you said I think you said in your question it'd be a reduction I don't see it that way what we've said is the sum of vitreous dividend.

Unknown Executive: No, thank you very much. Very good question. So, Frank, why don't you clarify once more the

And our suit our dividend would equal the current dividend that a pfizer shoulder receives today. So I don't see a reduction in a dividend dividend income will be kept toll and I think we've been very clear about that all.

Unknown Executive: So, Steve, in terms of the guidance, you're right, it assumes a spin, not a split. And then, in terms of the dividend, you said, I think you said in your question, it'd be a reduction. I don't see it that way. What we've said is... The sum of Vietra's dividend and our dividend would equal the current dividend that a Pfizer show that receives today. So I don't see a reduction in the dividend. The dividend income will be kept whole, and I think we've been very clear about that all along.

And we'll continue growing maybe not at the same pace.

Once we do have two cents per worker, but we'll continue growth right.

Steve I can quickly when the numbers for you if you'd like just so anything with Beatrice's said is that first full year about 4 billion a free cash flow they pay about 25% of that in the dividend. So that's a billion total the interest we'll have that 1.2 billion shares you put the 1 billion over 1.2 billion shares. It's about 83 cents exchange ratio is out.

Unknown Executive: and will continue growing, maybe not at the same pace, but Xeljanz.

One too you put a 100 shares a Pfizer you get 12 shares of the interest assuming it assuming spend that's roughly $10 a share we would reduce our dividend on an annual basis by that $10, but some of our dividend plus that 10 dollar incentive.

Unknown Executive: but we'll continue growing, right?

Unknown Executive: And, you know, Steve, I can quickly run the numbers for you, if you'd like, just so you think. What Viatris has said is their first full year, about $4 billion of free cash flow. They pay about 25% of that in dividends, so that's a billion. In total, Viatris will have about 1.2 billion shares. If you put the $1 billion over, 1.2 billion shares, it's about 83 cents. The exchange ratio is.12. If you buy 100 shares of Pfizer, you get 12 shares of Viatris, assuming a spin. That's roughly $10 a share. We would reduce our dividend on an annual basis by that $10, but the sum of our dividend plus that $10... 10 cents. 10 cents. I'm sorry. In my opinion, it's $10.

10 cents Im sorry, Thank you would equal the what that went out with a five year old against that.

And my in my thing it's $10.

Okay.

However, certain yes. So thank you for your interest in number of fit the needs and the you know we believe that it's going to be a new drug classes for such a.

Prevalent disease that affects tens of millions of Americans.

Atopic dermatitis and were an oral alternative seems to be a real patient and physician preference. We would soon report out the data from the important compare study. So I haven't actually seen to date. So I can only puncture Elizabeth look we discussed Oh.

Unknown Executive: For $10, about $0.10. Okay. Yep.

Your investor meetings that historical comparison between I've received the need to picks and suggest that we should expect.

Unknown Executive: Abracetinib? Yeah.

Michael Dolsten: Thank you for your interest in abracitinib, and you know, we believe that it's going to be a new drug class for such a prevalent disease that affects tens of millions of Americans, atopic dermatitis, and we're an

We expect to see.

Seemed a little bit the impact on clearing scheme, and particularly as other but you alluded to in using production. There is an important key secondary endpoint looking at each relieve starting with a read out little bit of two weeks and then following the study.

Michael Dolsten: Alternative seems to be a real

Michael Dolsten: Preference. We will soon report the data from the important Compare study. So I haven't actually seen the data, so I can only add a little bit to what we discussed at earlier investor meetings, that, you know, the historical comparison between abracitinib and dupixent suggests that we should expect to see similar or better impact on clearing skin. And particularly, as Albert alluded to in his introduction, there is an important key secondary endpoint looking at itch relief, starting with a readout already at two And, you know, the historical data suggests that we should be very optimistic about abracitinib outperforming biologicals such as dupixan on itch relief at earlier time points and providing a potential benefit of early onset of relief for the disease.

Through the 12 to 16 weeks and the you know historical data suggest that we should be very optimistic about I've received in the outperforming biological such as depicts them on each relieve oh your pipelines and provide the potential benefits of early onset of relief for.

No we have to wait for the data to be able to.

Overtly be absolutely confident that outcome, but this is what I believe and look forward very much to see the date, but come towards them.

And on the DMD question, Yes, we are.

Another thing I think that program for the R&D day, So I won't be absolutely province, you, but I think it's likely that the such an interesting program as the de gene therapy will be one of the potential agenda items and obviously, we would like to then share update from increased number of patients over longer time period.

Michael Dolsten: Now, we have to wait for the data to be able to obviously be absolutely confident in that outcome, but this is what I believe and look forward very much to seeing the data come shortly, and on the DMD question. Yeah, we are finalizing, I think, the program for the R&D day. So I can't absolutely promise you, but I think it's likely that such an interesting program as DMD gene therapy will be one of the potential agenda items. And obviously, we would like to then share updates from an increased number of patients over a longer time period. So please welcome me.

So please welcome and the take up front through it.

Thank you very much the both in other words, regardless I saw this was right it's $10 forked web access from Ireland. So.

Well move onto our next question. Please.

Your next question comes from Chessmen, Kim from Bank of America.

Morning, guys. Thanks, so much of the question just have a couple.

Michael Gene therapy platform with the advancement of hemophilia, a and b as well as DMD and into phase three what's the capacity to add additional indications. The portfolio you guys have been successful partnering but at this point. It does seem like you could expand the platform organically in a material way.

Michael Dolsten: Thank you very much to both of them. And by the way, Frank, as always, was right. It's $10 for 20, sirs, for my lab. So, all right, we'll move on.

Then for Angela Onyx, Dan do you just wanted to get your perspective on the inroads you've made in M. zero prostate patients.

Unknown Executive: Alright, we'll move on to our next question, please.

Unknown Executive: Your next question comes from Jeff Meacham from Bank of America.

Do you think could represent a tipping point commercially, especially given that generic fatigue available in the U.S. Thank you.

Unknown Executive: Morning guys, thanks so much for the question. I just have a couple.

Michael.

Yes, so Jeff we are to show you enthusiast for the gene therapy platform and what this particular, yeah I think a strategic advantage from is the end to end capability from discovery clinical manufacturing and of course that capability to full selling three important.

Michael Dolsten: Michael, on the gene therapy platform, with the advancement of hemophilia A and B, as well as DMD and end-to-phase 3, what's the capacity to add additional indications to the portfolio? I mean, you guys have been successful partners, but at this point, it does seem like you could expand the platform organically in a material way. And then for Angela on Xtandi, I just wanted to get your perspective on the inroads you've made in M0 prostate patients, and what do you think could represent a tipping point commercially, especially given generic Cytega available in the U.S.? Thank you.

External partners that gives us capacity that belongs increasing number of internal as well as partner programs and we.

I have an option for the view that Wilson disease program that you know put in a relatively near term future the available before.

Angela Hwang: Michael?

Clinical studies, and we expect from internal and external insensitive to aspire to about bringing one new gene therapy into the clinic every year also for the next period to come.

Michael Dolsten: Yes, so Jeff, we are sure you're enthusiastic about the gene therapy platform. And what is particularly, I think, a strategic advantage for us is the end to end capability from discovery to clinical manufacturing. And of course, that capability is also linked to important external partners, that gives us the capacity to advance an increasing number of internal as well as partner programs, and we have an option for the Vivette-Wilson disease program that, you know, could be available for clinical studies in the relatively near future. And we expect from internal and external initiatives to aspire to bring one new gene therapy into the clinic every year or so for the next period to come, and we think that The three programs you alluded to are, of course, the frontier for us, with Factor 9, which we hope to be the first company bringing that over the finish line in Phase 3 now and to start additional two Phase 3s for May where we think we have a best-in-class profile so far, and then we already spoke about D&D.

And we think that could be very comprehensive gene therapy, who you are the three programs you alluded to Oh of course.

The frontier for us.

With respect to nine that we hope to be.

First company, bringing that over the finish line in phase three now and to start. The addition of two phase threes for you may well, we think we have the best in class profile. So for and then we already spoke about the indeed.

Thank you very much of it ends up.

So in terms of the the in zero than non metastatic CR P.C. I mean, what we're seeing here is just.

Just tremendous growth and tremendous performance just broadly speaking in terms of big Sandy we had a great quarter right. We grew 29% under this was driven by two things one was actually a demand across both metastatic as well as non metastatic but also what we saw with the continued expansion of the actual.

Michael Dolsten: Thank you very much. Angela.

Angela Hwang: So in terms of the M0, the non-metastatic CRPC, I mean, what we're seeing here is, you know, just tremendous growth and tremendous performance. Just broadly speaking, in terms of Xtandi, we had a great quarter, right? We grew 29%. And this was driven by two things.

A class the novel woman therapies and in this class.

It's Andy has the lion share we have about 35 to 10 share right now so I'm. So first of all to answer your question vis-a-vis.

Angela Hwang: One was actually demand across both metastatic as well as non-metastatic. But also, what we saw was the continued expansion of the actual class, the novel hormone therapies. And in this class, Xtandi has the lion's share. We have about 35% share right now.

You know generic as I Tega, we really don't see a competition from a generic versus brand. In this instance, I think the the competition. Its idea it's really a month generics I T give us is branded IP that whereas what we're seeing here is a clear uptick in extend.

Angela Hwang: So, first of all, to answer your question vis-à-vis generic Zytiga, we really don't see competition from generics versus brands in this instance. I think the competition with Zytiga is really amongst generics versus branded Zytiga, whereas what we're seeing here is a clear uptick in Xtandi, and specifically, from the PROSPER trial in this M0 population, We are continuing to see, as I've talked about in all the previous quarters, really, really significant and very confident uptake in urology prescribing, and we do believe that this is underpinning the growth of our non-metastatic population. And the fact that these are patients also earlier in their disease is helpful in driving our growth in this population. I'll also mention that just from a market share perspective, those are non-metastatic; the M0 population has Xtandi, Erlita, as well as Nubeqa. Xtandi, by far and away, has the leading market share in this segment and has been, you know, since the time that it was launched.

And specifically.

On the process trial in this M. zero population as you say, we are continuing to see as I've talked about in all the previous quarters.

Really really significant and very confident uptake in urology prescribing and we do believe that this is underpinning the growth of.

Our non metastatic population and the fact that these are patients also earlier in their disease. Its helpful. In driving outgrowth. In this population on I'll also mention that just from a market share perspective, those are non metastatic the m. zero.

Population has extended or lead as well as new Becca expanded by far and away has the leading market share in the segment and has been.

From the time that it was lost right. Thank you Angela next question. Please operator.

Your next question comes from Tim Anderson from Wolfe Research.

Thank you a couple of questions.

One is on Prevnar in China.

So sales have been ramping up there, but the regulatory authorities recently approved a domestically produced 13 vaillant product.

Angela Hwang: Great. Thank you, Angela. Next question, please, operator.

Unknown Executive: Your next question comes from Tam Anderson from Wolf Research.

In the field that companies, who just have capacity that some of the tens of millions of doses and who knows if that's true or not but I'm wondering if you can give some perspective and how you see competitive dynamics in a situation like this going forward.

Unknown Executive: Thank you. A couple of questions. One is on Prevnar in China.

Angela Hwang: So sales have been ramping up there, but the regulatory authorities recently approved a domestically produced 13-valent product, and the CEO of that company suggests they have capacity for tens of millions of doses, and who knows if that's true or not. But I'm wondering if you can give some perspective on how you see competitive dynamics in a situation like this going forward, not only in China where a domestic producer could potentially benefit from favoritism, but also if that company were to take their product into other markets outside of China at a different price point. I think a lot of investors assume vaccines are durable forever, but I'm wondering if this sort of thing could be disruptive in how you take this sort of potential competition into your forecast.

Not only in China, where domestic producer could potentially benefit from favoritism, but also if that company were to take their product into other markets outside of China at a different price point.

I think a lot of investors assume vaccines are durable forever.

But I'm wondering if this sort of thing could be disruptive and how you take the sort of potential competition into your forecast.

Second question is on M&A, so any M&A that you mean cage within 2020 should we assume at least during this first six month window.

Are you still have up John that that is probably put on hold.

One last question and then to kill.

Angela Hwang: The second question is on M&A. So any M&A that you may engage with in 2020, should we assume, at least during this first six-month window while you are still up, John, that that is probably put on hold? And then, on Vindical, might there be a low-hanging fruit phenomenon where we see an initial nice uptake, but then it kind of flattens out suddenly? Or do you expect this will be continuous, strong, linear growth?

Might there be a low hanging fruit phenomenon, where we see an initial nice uptake, but then it kinda flattens out suddenly or do you expect this would be continues strong linear growth.

Yeah.

Thank you very much I will give a quick answer to your M&A question do you remember non silicon I deal with Revpar timeline to read that growth on M&A no. The answer is not absolutely not we are very actively looking for on to invest capital on value creation opportunities and them Oh, yes, soon but we will.

Albert Bourla: Thank you very much. I will give a quick answer to your M&A question, Tim, and then Angela can deal with Prevnar, China, and VitaGrowth. On M&A, no, the answer is no, absolutely not. We are very actively looking to invest capital in value creation opportunities, and I assume that we will have several of them in the first half of 2010 before the close of the deal. Again, along the lines that I have described, you know exactly what we are doing. We want to make sure that we sustain the growth beyond 2027 when the alloys will have some impact.

I have several of them in the first part of sort of its ended before the close of a deal again of course that lines up I've described you know exactly what we're doing you want to make sure bucked. The we sustained the growth beyond 327, when with the alloys will cover some.

I'm, just I want to both the upright refinement.

So we acknowledge that there is a new competitor.

In the form of a wall backs and in that PCB 13, However, I want to recognize that there are some differences here, though it is a 13 valence vaccine well back to vaccine is made with a different conjugate and I'll take this conjugate technology being an older technology so quite different.

Angela Hwang: So, we acknowledge that there is a new competitor in the form of Wolvax in PCV13. However, I want to recognize that there are some differences here.

From what we see in PCB 13 that being said it is a comp a competitor. However, if you sort of step back and look at the opportunity that we have and pneumococcal vaccinations. They are approximately 14 million, new but every year in China and today only over.

Angela Hwang: Though it is a 13-valence vaccine, Wolvax's vaccine is made with a different conjugate and this conjugate technology being an older technology, so quite different from what we see in PCV13. That being said, it is a competitor, however, if you sort of step back and look at the opportunity that we have in pneumococcal vaccinations, there are approximately 14 million new births every year in China and today only over maybe 1% of those infants are being vaccinated. So regardless of the volumes that Wolvax might have available, I think the opportunity between us is just much larger than that and we have a tremendous amount of untapped potential in the marketplace and we are confident that with the quality, the reliability, as well as the tremendous experience that Pfizer has had globally with PCV13, but also the tremendous success that we've had in China, specifically for PCV13, that our growth will continue and this is what we expect.

Maybe 1% of those infants are being vaccinated, so regardless of the volumes.

That will that might have available I think the opportunity between us. It's just much larger than that and we have a tremendous tremendous amount of untapped potential in the marketplace and we are confident that with the quality the reliability as well as the tremendous.

Experience that Pfizer has had globally with our PCB 13, but also the tremendous success that we've had in China, specifically for PCB 13.

That outgrowth will continue and this is what we expect we have a very robust footprint.

Angela Hwang: We have a very robust footprint, you know, as you know, the vaccines and it will be the same for Wolvax's PCV13. This is an out-of-pocket market, and it will be the same for both of us. So this is where we'll be competing, which is why having a robust promotional engine and having a footprint of representatives that can really be available to support patients and caregivers at the point of vaccination is really important, and I think in this regard, we have demonstrated, you know, great expertise and ability to grow this market. So that's how we see it; we acknowledge the competition, but we, you know, continue to see tremendous potential.

You know as you know the vaccines and it will be the same four wall boxes. PCB 13. This is an down out of pocket market and it'll be the same for both of US. So this is where we'll be competing which is why having a robust promotional engine and having a.

Hey footprint of representative that can really be available to support patients and caregivers at the point of vaccination, it's really important and I think in this regard we have demonstrated great expertise and ability to grow this market.

So that's how we see it we acknowledge the competition, but we can continue to see tremendous potential.

Angela Hwang: What about Ventacrol?

What about vehicle alright, so in terms of vendor count. So yes of course I'm in the year of launch a one might expect to see a little bit about bolus a number of patients who have been identified and are awaiting.

Angela Hwang: All right, so in terms of Vendacal, so yes, of course, in the year of launch, one might expect to see a little bit of a bolus, a number of patients who have been identified and are awaiting diagnosis and treatment. That being said, we are confident of what we've learned in the marketplace in our first year of launch. We are confident that we have the right set of tools for helping physicians to suspect patients that might have ATTRCM. We have mobilized education around using non-invasive methods like scintigraphy to diagnose patients, and we've also mobilized a patient support hub to help patients receive their medications. I think doing more of that, as well as continuing to think about new methods to help diagnose and treat patients, such as using artificial intelligence and an increased number of tools, all of that will continue to support our ability to drive the importance and rapid diagnosis of patients as well as...

No says and treatment that being said we are confident of what we what we are confident about what we've learned in the marketplace in Africa launch a we are confident that we have the right set of tools for helping to physicians to suspect the patient that might have 80 Trc EM.

We have a mobilize education around using non invasive methods I can take a fee to diagnose patients and we've also mobilized a patient support hub to help patients received their medications. So I think doing more of that as well as continuing to think about new methods.

To help diagnose and treat patients such as using artificial intelligence and increased number of tools that will continue to support our ability to drive.

At the.

Important and rapid diagnosis of patients as well as their treatment.

Angela Hwang: Right. Thank you. Next question, please.

Right. Thank you next question please.

Unknown Executive: Your next question comes from Andrew Baum from Citi. Thank you.

Your next question comes from Andrew Baum from Citi.

Thank you couple of questions Peter.

Unknown Executive: A couple of questions, please. Firstly, on your pending oncology biosimilars rollout in the U.S., given the challenges historically with biosimilar penetration, could you talk about your expectations, particularly with these two drugs? There should be an economic incentive for payers given the pass-through, but there are issues for patients who are already on an established innovative biosimilar, an innovative brand, to switch to a biosimilar. So if you could give us some kind of sense of how much penetration, how quickly, you may expect, that would be super helpful. And then second, in terms of Tifanavit, Angela, you kindly gave some penetration figures at the beginning, which I was struggling to keep up with and write down, but just more broadly, could you outline how large you think the untapped patient population really is here and how far Pfizer is along in establishing that market? Many thanks.

Firstly on your handling oncology Boston its rollout in the U.S. I'm given the challenges it starts with Boston the penetration could you talk to you expectations, particularly with these three drugs that should be an economic incentive for payers given the pass through.

Yeah those issues in patients will read the old and established if it's impossible not to switch and it's a brand to switch to Boston. So if you could get some kind of sense is how much penetration how quickly you.

You may expect that would be super helpful. And then second intensive to find it that's I'm actually quite the capes and penetration, it's because at the beginning which I'm just struggling to keep up with him and write down but just more broadly could you outline.

How large you see untapped patient population with you here and how far Pfizer is a long in establishing that market. Many thanks.

Angela Hwang: Angela, I have a lot of questions for you today. Please go ahead.

I'm, sorry, I love of Christmas for give a day. Please go ahead.

Angela Hwang: Sure. All right.

All right. So I think certainly we see the dynamics in oncology biosimilars being very different from that of the what we saw in for inflammation in the form of Inflectra. So to your point about you know how will the dynamics change here and how quickly can payers as well as.

Angela Hwang: So I think firstly that the dynamics of oncology biosimilars are very different from that of what we saw for inflammation in the form of Inflectra. So to your point about how will the dynamics change here and how quickly payers as well as providers can capture their savings, it's going to be much quicker. The use of oncology biosimilars is much more rapid. You see more patients cycling through.

Providers capture the savings it's going to be much quicker. This is a use of oncology biosimilars.

Our a much more rapid like you see more patients I think through treatment times, a much shorter so thats going to enable payors and providers to capture saving.

Angela Hwang: Treatment times are much shorter, so that's going to enable payers and providers to capture savings much more quickly, which is a very different dynamic that you see in Inflectra where it's a chronic treatment, and patients are on their treatment for a very long time. So I think that's one big difference. The second is that there is already, we already have some precedent.

It's more quickly which is a very different dynamic that you see in Inflectra, where.

It's a chronic treatment patients on their treatment for very long time, I think thats one big difference.

The second is that there is already.

Hey.

We already have some precedence we sold us with I read a credit where after a year of being in the market, though I know to supportive care in oncology, we already have 20% marketshare and this is still far cry from what we see in Europe , where there is much more rapid uptake, but I think thats. The it's a signal an indicator of the difference.

Angela Hwang: We saw this with Reticrit where, after a year of being in the market, though I know it's supportive care in oncology, we already had 20% market share. This is still a far cry from what we see in Europe, where there's much more rapid uptake, but I think it's a signal and an indicator of the differences you see in the various biosimilar markets. And we also have some early signals from competitor biosimilars that already have some good market share in oncology biosimilars. So I think that we have some good indicators that this is going to be different. I think the benefit that we see here is that we have a portfolio of three oncology biosimilars all coming out around a similar time, like around now. And I think what we have is a robust pricing strategy that discounts to the whack of the originator, as well as, I think, strong relationships and networks built with both providers and payers that give us confidence that this will be an area of high growth for Pfizer.

Did you see in the various biosimilar market and we also have some early signals from competitive biosimilars that have already some good market share in the south in oncology Biosimilars. So I think that we have some good indicators that this is gonna be different.

I think the benefit that we see a is that we have a portfolio of three oncology biosimilars all coming out around the similar time.

Like around now and I think a what we have we have a.

Robust pricing strategy discount to the whack of the originator as well as I think strong relationships and network built with both providers and payers that give us confidence that this will be an area of high growth with either.

Angela Hwang: Thank you, Anzala.

Thank you Angela.

Angela Hwang: and then your question was around testameters. Sorry, can you just repeat that again?

And then your question was around to Sameday.

Sorry can you just repeat that again.

Angela Hwang: that this is a rare disease and that in the U.S., there will be about 100,000 patients in total. Globally, 500, but in the U.S., only 100. To date, we have diagnosed 9,000 patients, so that leads us to 9% of the population that we have diagnosed. So while this may feel like very significant progress at the time that we have launched, and it is, I think you can also see that we have a long, long way to go to finding all 100,000 of these patients. And what I spoke earlier about in terms of education, in terms of how to suspect the disease, how you diagnose the disease, and then very quickly gaining access so our patients can benefit from treatment for the disease, these are all three levels that we are intensely focused on.

The on top the untapped population large gotcha.

So as we've said in previous calls we do believe that this is a rare disease and that I'm in the U.S. They will be about 800000 patients I'm in total globally 500, but in the U.S. 100 to date, we have diagnosed 9000 patients so that he just.

You know nine 9% of the population that we have diagnose so while this may feel like there were significant progress on the time that we have launched and it is I think you can also see that we'd have a long long way to go.

Finding all 100000 patients and you know what I spoke earlier about in terms of the education in terms of how does the disease. How you diagnose the disease and then very quickly gaining access our patients had benefits on treatment of the disease. These are all three levers that we are intensely focused on.

Angela Hwang: Great. Thank you. Next question, please.

Thank you next question please.

Unknown Executive: Your next question comes from Naveen Jacob from UBS. Hello, thanks for taking my questions.

Your next question comes from Levine Jacob from New B S.

Hello, Thanks for taking my questions Bode couple if I may just on Biosimilars following up with Angela.

Unknown Executive: A couple, if I may, just on biosimilars, following up with Angela, your comment about strong growth continuing on for biosimilars. So wondering if you could give any color around how we should think about the trajectory over the next couple of years. Is this a doubling or tripling of that now almost billion-dollar business? And then also, I would love to understand how you're thinking about the tail of each of the individual assets. Are you seeing, should we be thinking of this as a ramp that goes up for a few years and then eventually starts tailing off like other generics, or do you see it stabilizing and having a sustainable tail? And then just on Vendiquil, you received a positive CHIP opinion in the EU in December. Given that Vendiquil is already approved for the polyneuropathy indication, I wonder how we should be thinking about the price with the addition of the cardiomyopathy indication. Is there any chance of moving that around? And then what do we think about the ramp in the EU relative to the US? Thank you so much.

Your comment about a strong good growth.

Continuing on for the by some of their so wondering if you could give any color around how we should think about the trajectory over the next couple of years is this a doubling or tripling of that.

Now almost billion dollar business and then also would love to understand how you're thinking about the tale of each of the individual assets.

Are you seeing as it should we be thinking of this as a.

Hey ramp that goes up for a few years and then eventually starts tailing off like other generics or do you see the stabilizing and having a sustainable tail and then just one vendor cool you received a positive see chip you opinion in the you in December given that a then of course already approved.

Approved in the Polyneuropathy.

Indication.

Wondering how we should be thinking about the price.

With the addition of the Cardium off at the indication.

It is there any chance for moving that around and then how we think about the ramp in the relative to the U.S. Thank you so much.

Angela Hwang: So maybe I'll start with the last one first. So you're right, we just received EU approval for Vindicale. And as you know, there's quite a time lag between approval and then reimbursement in each of the countries. So all I can say is that right now, we are in active negotiations with the countries in terms of determining the price of Vindicale as well as its reimbursement. You referred to the fact that we already have the 20 milligram approval polyneuropathy in Europe, and we recognize that. That being said, first of all, ATTRCM is a completely different indication. The trials that were conducted as well as the significant mortality benefits that were demonstrated in our clinical trials for ATTRCM are completely different.

So I'll start with a loss on first I'm. So you're right. We just received you approval for the Cal and as you know there's a there's quite a time lag between approval and then reimbursement in each of the country. So so all I can say is right now we.

Active negotiations with with the countries in terms of determining that price of in Macau as well as its reimbursement you referred to the fact that we already have the 20 milligram Hooper Polyneuropathy in Europe , and we recognize that that being said, we we have first of all.

82, RCM is a completely different indication.

The trials that were conducted as well as the significant mortality benefits I would demonstrated in clinical trials.

All completely.

Completely different and we have the the clinical data to demonstrate the great patient benefit that that eight that we have an entity RCM and so that's the basis about discussions with you know with each other countries.

Angela Hwang: And we have the clinical data to demonstrate the great patient benefits that we have in ATTRCM. And so that's the basis of our discussions with each of the countries in Europe for reimbursement. Your second question was around Vaccinia growth and sort of the pace of it.

In Europe for reimbursement.

Your second question was around I've been dekalb growth and and sort of the at the pace of it I think.

Angela Hwang: I think the way to think about it is the following. We have, through analogs, seen that only 30% to 50% of all rare diseases are ever diagnosed. But, of course, we believe that based on the mortality data that we have and the patient benefit that can be derived, it is critical that we meet that or at least beat that. And so that's what we're intensely focused on. We have 10% of our patients, well, 9% in the U.S. are diagnosed today. We have a long way to go. And, you know, that's what we need to do.

I think the way to think about it is the following we have through analog theme that only 30% to 50% or rare diseases are ever diagnosis, but of course, you know we believe that based on the mortality data that we have and the patient benefit that can be derive that it is critical.

That we meet that what you see that and so that's what we're intensely focused on we have 10% about patients with 9% in the U.S. diagnosed today, we had a long way to go and and you know that's what we need to do.

Angela Hwang: With the rhythm on the biosimilars, you know we've had strong growth of 22% this year for the year. What can we expect going forward?

Your last question, what's the rhythm on the Biosimilars, we've had strong growth 22% to share for the year, what can we expect going forward.

Angela Hwang: That's right. So in terms of biosimilars, again, this is an area of growth that we can anticipate. We have three biosimilars now in oncology, plus the two that we have in supportive care. And so we look forward to this being a significant growth contributor to our oncology portfolio, not just from a growth percentage perspective, but also from a revenue-based perspective.

That's right. So I think in terms of the Biosimilars I did again. This is an area of growth and we can anticipate a we have three biosimilars now in oncology plus the two that we haven't supportive care and so we look forward to this being a significant growth contributor to our oncology portfolio.

Just from a growth percentage perspective, but also from a revenue based perspective.

Right.

Yeah, I just wanted to add that you nyquil coty them up with the has a positive you recommendation. So we expect approval to come soon and you know that things very nicely to.

Angela Hwang: Great. All right.

Albert Bourla: So we expect approval to come soon, and you know that links very nicely to

Unknown Executive: [inaudible]

Really helpful outline you did Angela thanks, Michael.

Unknown Executive: And if we could take our last question, please, operator?

And if we could take our last question. Please operator.

Unknown Executive: Your final question comes from the line of Mani Farahar from SBCC. (inaudible)

Final question comes from the line of money Avraham from S.

Unknown Executive: Hey guys, thanks for taking my question. A couple of little ones on the rare disease side. In terms of cathametus, we saw pretty attractive growth in OUS, including some markets that don't necessarily have the cardiomyopathy indication yet. Is there some follow-on benefit in polyneuropathy from the increased promotion of cardiomyopathy in Europe and elsewhere? As a second question, given the expansion of patient opportunity into polyneuropathy in the U.S., how do you think about the opportunity to pursue a supplemental NDA or similar strategy in the U.S. based on the real-world evidence guidelines laid out previously by the FDA, or would that require a separate study? And then finally, on the gene therapy side, obviously, pretty interesting data on hemophilia at ASH, moving forward into a couple of Phase IIIs now.

Oh, sorry [noise].

Hi, guys. Thanks, taking my question a couple of little ones on the rare disease side.

First in terms of to feminists.

We saw pretty attractive growth, Oh, U.S., including some markets the don't necessarily have the cardium up the indication yet.

Yes is there some follow on benefiting polyneuropathy from the increased promotional efforts in cardiomyopathy.

Right, but elsewhere has a second question.

Given the expansion of patient opportunity and deploy drops in the U.S.

How do you think about the opportunity to pursue a supplemental endear similar strategy in the U.S.

Based on the real World evidence guidelines laid out previously by the FDA or would that require a separate study.

And then finally on the gene therapy side, obviously pretty interesting data in hemophilia at Ash moving forward in a couple of phase threes now.

Unknown Executive: How do you think about that market in a universe where you have multiple therapies with a curative intent in gene therapy alongside a number of fairly robust chronic therapies? Who are the patients who should receive an irreversible intervention in terms of gene therapy, and who do you think are more appropriate for a chronic therapy such as your own benefits? Thank you.

Do you think about that market in a universe, where you have multiple therapies within in curative intent in gene therapy.

Long side, a number of fairly robust chronic therapies.

Who are the who are the patients who should receive an irreversible intervention in terms of gene therapy.

Who do you think too there are more appropriate for chronic therapy, such as your own benefits. Thank you.

Michael Dolsten: Yeah, I think I will ask Michael to start with gene therapy and the NAS and all of this great portfolio.

Yes, I think I will ask Michel to start with gene therapy in business and all of his.

A great before losses of recurring Holly fits together Michael Yes. Thank you very much you know.

Michael Dolsten: Michael. Thank you very much. You know, what I think is unique in our hemophilia portfolio, first of all, we have a legacy being one of the pioneers for... Intravenous delivery of Factor VIII and Factor IX, so we have a platform and experience on the business and R&D side. And as you so nicely alluded to, we also shared recently with our partner Sangamo some very much best in class data recently on Factor VIII gene therapy. Our current portfolio includes Factor VIII and Factor IX gene therapy plus our TFPI antibodies, which have, like Hemlibra, an opportunity to provide a subcutaneous alternative. But actually, TFPI can be applicable to both. Factor VIII and Factor IX deficiency

What I think its unique you know where hemophilia put food you first of course, we have a legacy being one of the pioneers for.

Intervene newbie Venus deliver all the.

In fact rate than fixed line, so whatever platform and experience when the business in R&D side.

And as you.

So nicely alluded to.

Also shared with our potent sangamo some very much best in close date recently on the fixed date you therapy.

Our current put food you have sector Eightth and pick denying you therapy, plus our teeth B. I antibody.

That has like him Libra, an opportunity to provide a sub Q2 alternative but actually to be I can be applicable for both.

Sector AIDS in fixed denying deficiency. So the way we see it develop is that.

Michael Dolsten: So the way we see it developing is that... you know, I think physicians will look at gene therapies that have durability and good tolerability. And that has really been the hallmark for the strategies when we developed Factor VIII and Factor IX best-in-class profiles. Because there are alternatives for these patients, so once they see the data for drugs and treatments that are approved that have durability and really good outcomes, which I think has been so far what we have seen with our in therapies, those will be the ones that can be adopted because there are alternatives that have less convenience but will, at least until strong data is available, be used. For patients that are early in their disease, diagnosed at an earlier age, I think this would be a very important treatment as it saves them from, You know, the bleedings, breakthrough bleedings that occur on lifelong treatment with infusion factor, and particularly for patients that are at an early age and are very physically active, it is important to have a solution for cure.

You know I think physicians will look at.

You therapies that have durability and good tolerability and that's as really being the hallmark for this strategy is when we developed sector. If in fact denying besting both profile.

Because the alternative for these patients so wants to see the data for drugs.

Treatments that though approved it's up your ability and really good outcome.

Which I think has been so for what we have seem as though you therapy is those will be the one that.

Can't be adopted because door alternatives that have less convenience, but we'll at least until strong date, that's available to be used.

You know for patients that or early in the disease.

Diagnosed at all your age I think this would be in very important treatment as it saves them from.

You know the bleeding breakthrough bleeding stuff I'm sure on lifelong treatment, we didn't houston's factor and particularly for patients that or.

Page to physically active it is important to have.

Solution for sure. So I think these would be a tremendous important patient populations, but the available ability of subcutaneous agents would supplement them and also allow for.

Michael Dolsten: So I think this will be a tremendously important patient population. But the availability of subcutaneous agents will supplement them and also allow patients that may have antibodies to the gene therapies to use them until there are a sufficient number of gene therapies available so that there is always one for each patient. And finally, let's bring it all together. I think what's unique about us is the entire portfolio that can address these patients. And we look really much forward to the era around 2021 and 22 when we see this portfolio coming into the registration phase.

Patients that may have antibodies to gene therapies to use them until.

Sufficient number of gene therapies available that are it's always one for each patient and finally us bringing together I think what's unique with us.

Tell you put food you that can address these patients and we look really much forward to.

The other around 2021 and 22, when we see this put food coming into registration phase.

I think that was the main piece here, Yeah, and then a ends that I may be on beans, or grow a Christian some uptick in markets that carbon myopically were smoked approved what's going on there and bought supplement on filing on 40 neuropathy, yes in terms of Polyneuropathy in the a in the U.S.

Michael Dolsten: I think

Angela Hwang: And then Angela, maybe on Vintagrel; we have seen some uptick in markets where cardiomyopathy was not approved; what is going on there, and about supplemental filing on polyneuropathy.

Angela Hwang: In terms of polyneuropathy in the U.S., this is something that we're continuing to explore with the FDA, so, you know. No decisions have been made yet, but they are in discussion. That's right.

This is something that we're continuing to explore with the FDA. So you know this is okay, maybe I'd be growing discussion that's right.

Angela Hwang: Yeah, that's it.

Unknown Executive: And then, you know, in terms of the upticks in polyneuropathy, I mean, you know, I'm not sure that it's a cardiomyopathy effect. As you know, we are approved, it's an approved indication for us, XUS, so we continue to actively promote it, and it's probably as a result of those activities.

And then you know in terms of the upticks in Polyneuropathy I mean, yeah, I'm not sure that if they caught my eye off with the effect as you know we we are approved it's an approved indication for us ex U.S. So we continue to actively actively promoted and it's probably as a result of those activity.

Unknown Executive: Yeah, we will have, as we said, approval for that indication, and this is when I will We will see a material impact on vintage health in cardiomyopathy in these patients who are not right now. We are just promoting, of course, the...

Yes, we will have a.

As we said the approval for fourth indication and this is one that we've seen we will see materially but some things like <unk> income do my opening these patients who are not right. Now we are just promoting to of course, you have implications, but I would have registered over there. So we don't do anything.

Unknown Executive: And, of course, the indications.

Unknown Executive: So we don't do anything outside that. All right, I think this concludes our call, more or less. I just wanted to make some comments because, really, I feel that we are at an exciting point in Pfizer's history. And if you take a big picture view, over the last decade, we have changed and refocused our approach to R&D. We have dramatically improved its productivity. And we have developed the best pipeline we ever had, and one of the best, I believe. If you've seen 2019, it was a year that we took deliberate and thoughtful steps to strengthen each one of our businesses and eventually shred the current Pfizer into a new, smaller, high-growth profile enterprise that will remain a powerhouse in marketing but also has been converted to the powerhouse of science. Following the expected close of the Abzon and Mylan transaction later this year, of course, we will be a very different company, and we will focus on continuing to

Anything outside Europe .

All right I think is this concludes more or less our goal just I wanted to make some comments because that really asking about 200, an exciting pointing to Pfizer skew story and.

If you take a big big sort of you are over the last decade, saying centrally focused our approach to R&D, we have improved dramatically its productivity and we should develop the best pipeline, we ever heard on one of the best I believe in the industry.

You're seeing the 2009 theme it was a year, but we took deliberate and pfos were steps to strengthen each one of our businesses and eventually.

ER shred the current Pfizer into a new a smaller high growth profile, a enterprise, but ER will remain a powerhouse in marketing, but also has been converted to depart hostile science.

Following the expected close will be option in Maryland transaction late this year are of course, what would be a very different company.

And we will focus on continuing to execute our strikers. This includes we will continue the commercial momentum and preparing our new product launches you have all of US asked a lot of questions about those products with our keep a surprising we got a growth profile and also you've seen what we are taking seriously and we are investing in new losses.

Albert Bourla: This includes, we will continue the commercial momentum and prepare our new product launches. You have all asked a lot of questions about those products that keep surprising us with their growth profile.

Albert Bourla: And also, you've seen what we are taking seriously, and we are investing in new launches. We are continuing to advance our internal pipeline and will augment it with mid-stage R&D programs through targeted bolt-on business development opportunities. As I referenced before, we should continue seeing this type of activity in the first and second half of this year. Of course, we are working very intensively to set up AbZon to be in a strong position when it combines with Myla to become Viatris and create a formidable company, and, of course, we will continue leading the conversation in Washington as we work to address the affordability challenge facing patients. These are the areas that we are focusing on for next year. Once again, we look forward to sharing more pipeline updates during our Investor Day on March 31st. Have a great rest of your day. Ladies and gentlemen, this does conclude Pfizer's fourth quarter 2019 earnings conference call. Thank you for your participation. You may now disconnect.

We are continue advancing our internal pipeline and will commence people with midstates R&D programs through targeted bolt on business development opportunities as I referenced before you should continue seeing these type of activities in the first and second half of this year of course, we are working very intensive mid to sit.

UBS him to be in the strong position when it combines with mylan you'd become via threes and create a formidable.

And of course, we will continue leading the conversation in Washington.

As we work to address the affordability challenges facing patients. These are the area is what we are focusing for next year.

Once again, we look forward to starting more pipeline updates during our Investor day on March 31st have a great rest of your day.

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

Unknown Executive: Ladies and gentlemen, this does conclude Pfizer's 4th Quarter 2019 Earnings Conference Call. Thank you for your participation. You may now disconnect.