Pfizer Reports First-quarter 2019 Results

NEW YORK--(BUSINESS WIRE)-- Pfizer Inc. (NYSE: PFE) reported financial results for first-quarter 2019 and raised the midpoint of its 2019 financial guidance for adjusted diluted EPS⁽²⁾.

At the start of the 2019 fiscal year⁽³⁾, Pfizer reorganized its commercial operations into three businesses:

• Pfizer Biopharmaceuticals Group (Biopharma), a science-based innovative medicines business, which includes all of the previous Innovative Health business units (except Consumer Healthcare) as well as a new Hospital business unit that commercializes Pfizer’s global portfolio of sterile injectable and anti-infective medicines and includes Pfizer’s contract manufacturing operation, Pfizer CentreOne. Pfizer also incorporated its biosimilar portfolio into its Oncology and Inflammation & Immunology business units and certain legacy established products into the Internal Medicine business unit.
• Upjohn, a global, off-patent branded and generic established medicines business, which includes 20 off-patent solid oral dose legacy brands including Lyrica, Lipitor, Norvasc, Viagra and Celebrex, as well as certain generic medicines.
• Consumer Healthcare⁽⁴⁾, which includes Pfizer’s over-the-counter medicines.

2019 FINANCIAL GUIDANCE⁽⁶⁾

Pfizer’s updated 2019 financial guidance is presented below. Financial guidance continues to reflect a full year of revenue and expense contributions from Consumer Healthcare⁽⁴⁾.

• Guidance for Adjusted Other (Income)/Deductions⁽²⁾ was increased by $100 million, primarily due to milestone income recorded in first-quarter 2019.
• The midpoint of the guidance range for Adjusted diluted EPS⁽²⁾ was increased by $0.01 to an updated range of $2.83 to $2.93, reflecting a $0.03 operational improvement, primarily due to the aforementioned increase to Adjusted other income⁽²⁾, partially offset by unfavorable changes in foreign exchange rates since mid-January 2019, which had an incremental negative impact of $0.02.

CAPITAL ALLOCATION

• During first-quarter 2019, Pfizer returned $10.9 billion directly to shareholders, through a combination of:

• $2.0 billion of dividends, or $0.36 per share of common stock; and
• $8.9 billion of share repurchases, composed of $2.1 billion of open-market share repurchases and a $6.8 billion accelerated share repurchase agreement executed in February 2019.

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

EXECUTIVE COMMENTARY

Dr. Albert Bourla, Pfizer’s Chief Executive Officer, stated, “Our first-quarter 2019 financial results were strong, driven by continued strength from certain Biopharma brands, primarily Eliquis, Ibrance, Prevnar 13/Prevenar 13 and Xeljanz, as well as strong operational growth from certain Upjohn brands, primarily in China. Our new commercial structure is designed to maximize today’s revenue growth opportunities while transitioning the company to a period post-2020 where we expect sustained mid-single-digit operational revenue growth through 2025. We remain focused on executing on our commercial strategies, managing expenses, advancing our pipeline and prudently allocating our capital to position Pfizer for sustainable success.

“Our pipeline continues to deliver differentiated therapies that have the potential to improve the standard of care for patients across multiple therapeutic areas. In the first four months of 2019, we have received five regulatory approvals and presented Phase 3 data for Xtandi in metastatic hormone-sensitive prostate cancer as well as Phase 2 immunogenicity data in adults for our 20-valent pneumococcal vaccine candidate. Over the rest of 2019, we are looking forward to potential U.S. regulatory approvals for tafamidis in transthyretin cardiomyopathy, our Bavencio-Inlyta combination for the treatment of first-line renal cell carcinoma as well as for our biosimilar rituximab, bevacizumab and adalimumab molecules. We also expect Phase 3 read outs in 2019 for PF-04965842, our Janus kinase-1 (JAK1) inhibitor in development for moderate-to-severe atopic dermatitis, and rivipansel, in development for vaso-occlusive crisis from sickle cell disease. I believe our pipeline today represents an unprecedented opportunity to deliver a life-changing impact for millions of patients while enhancing value for all of our stakeholders,” Dr. Bourla concluded.

Frank D’Amelio, Chief Financial Officer and Executive Vice President, Business Operations and Global Supply, stated, “Overall, I was pleased with our first-quarter 2019 financial performance. We were able to achieve 5% operational revenue growth and delivered Adjusted diluted EPS⁽²⁾ growth of 13%, primarily reflecting the strong performance of certain key products and the net impact of our share repurchases. We reaffirmed our 2019 financial guidance for revenues. Additionally, we raised the midpoint of our guidance range for Adjusted diluted EPS⁽²⁾ by $0.01, reflecting a $0.03 operational improvement, primarily due to approximately $100 million of incremental Adjusted other income⁽²⁾ that was recorded in first-quarter 2019, partially offset by a $0.02 negative impact reflecting unfavorable changes in foreign exchange rates since mid-January 2019. Finally, in first-quarter 2019, we returned $10.9 billion directly to shareholders through share repurchases and dividends.”

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

First-quarter 2019 revenues totaled $13.1 billion, an increase of $211 million, or 2%, compared to the prior-year quarter, reflecting operational growth of $664 million, or 5%, partially offset by the unfavorable impact of foreign exchange of $453 million, or 4%.

Pfizer Biopharmaceuticals Group (Biopharma) Revenue Highlights

First-quarter 2019 Biopharma revenues totaled $9.2 billion, up 7% operationally, primarily driven by:

• Eliquis globally, up 36% operationally, primarily driven by continued increased adoption in non-valvular atrial fibrillation as well as oral anti-coagulant market share gains;
• Ibrance globally, up 25% operationally, primarily driven by:

• 107% operational growth in international markets, reflecting continued strong uptake following launches in developed Europe, Japan and certain emerging markets; and
• 2% growth in the U.S., reflecting continued moderating volumes in approved metastatic breast cancer indications;

• Prevnar 13/Prevenar 13 globally, up 10% operationally, primarily driven by:

• 31% operational growth in emerging markets, reflecting the favorable overall impact of timing and increased volume associated with government purchases for the pediatric indication and increased shipments associated with Gavi, the Vaccine Alliance, partially offset primarily by the non-recurrence of volumes associated with an adult national immunization program in first-quarter 2018; and
• 6% growth in the U.S., reflecting increased government purchases in first-quarter 2019 for the pediatric indication, partially offset by the continued decline in revenues for the adult indication due to a declining “catch up” opportunity compared to the prior-year quarter; and

• Xeljanz globally, up 34% operationally, driven by:

• 89% operational growth in international markets, primarily reflecting continued uptake in the rheumatoid arthritis indication as well as from the recent launch of the ulcerative colitis indication in certain developed markets; and
• 18% growth in the U.S., reflecting continued strong volume growth in the rheumatoid arthritis indication and from the launches of the psoriatic arthritis and ulcerative colitis indications, partially offset by expected higher rebating and unfavorable channel mix in first-quarter 2019,

partially offset primarily by lower revenues for:

• the Hospital business in the U.S., down 8%, primarily due to the continued expected negative impact from generic competition for products that have previously lost marketing exclusivity; and
• certain rare disease products, including the hemophilia franchises primarily due to competitive pressures, and Genotropin in the U.S., primarily due to unfavorable channel mix.

Upjohn Revenue Highlights

First-quarter 2019 Upjohn revenues totaled $3.1 billion, up 1% operationally, reflecting:

• 25% operational growth in emerging markets, driven by strong, volume-driven operational growth in China, primarily from Lipitor, Norvasc and Celebrex; and
• 10% operational growth in Japan, primarily driven by strong volume growth from Lyrica and Celebrex,

partially offset by:

• 13% operational decline in developed markets excluding Japan, primarily driven by lower revenues for:

• Viagra and Upjohn’s authorized generic for Viagra in the U.S. resulting from increased generic competition following Viagra’s December 2017 patent expiration;
• Lyrica, primarily due to lower volumes in the U.S., reflecting wholesaler destocking in advance of anticipated generic competition beginning on June 30, 2019, and in developed Europe, reflecting continued generic competition; and
• Greenstone, Upjohn’s authorized generic subsidiary, primarily due to continued industry-wide pricing challenges in the U.S.

Consumer Healthcare⁽⁴⁾ Revenue Highlights

First-quarter 2019 Consumer Healthcare⁽⁴⁾ revenues totaled $858 million, down 2% operationally, reflecting an 8% decline in the U.S., partially offset by 4% operational growth in international markets.

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

• higher net losses on the early retirement of certain outstanding debt securities;
• higher business and legal entity alignment costs;
• higher asset impairments charges;
• higher net interest expense; and
• lower income from collaborations, out-licensing and sale of compound/product rights,

partially offset primarily by:

• a favorable change in the fair value of contingent consideration.

First-quarter 2019 diluted weighted-average shares outstanding used to calculate Reported⁽¹⁾ and Adjusted⁽²⁾ diluted EPS declined by 307 million shares compared to the prior-year quarter primarily due to Pfizer’s ongoing share repurchase program, reflecting the impact of share repurchases during 2018 and in first-quarter 2019, partially offset by dilution related to share-based employee compensation programs.

A full reconciliation of Reported⁽¹⁾ to Adjusted⁽²⁾ financial measures and associated footnotes can be found starting on page 18 of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS (Since January 29, 2019)

Product Developments

• Bavencio (avelumab)

• In March 2019, Merck KGaA, Darmstadt, Germany, which operates its biopharmaceutical business as EMD Serono in the U.S. and Canada (Merck KGaA), and Pfizer announced that the European Medicines Agency (EMA) validated for review the Type II variation application for Bavencio in combination with Inlyta (axitinib) for the treatment of patients with advanced renal cell carcinoma (RCC).
• In March 2019, Merck KGaA and Pfizer announced the discontinuation of the ongoing Phase 3 JAVELIN Ovarian PARP 100 study evaluating the efficacy and safety of avelumab in combination with chemotherapy followed by maintenance therapy of avelumab in combination with talazoparib, a poly (ADP-ribose) polymerase (PARP) inhibitor, versus an active comparator in treatment-naïve patients with locally advanced or metastatic ovarian cancer.
• In February 2019, Merck KGaA and Pfizer announced that the U.S. Food and Drug Administration (FDA) has accepted for priority review the supplemental Biologics License Application (BLA) for Bavencio in combination with Inlyta (axitinib) for patients with advanced RCC. The Prescription Drug User Fee Act goal date for a decision by the FDA is in June 2019.

• Eliquis (apixaban) -- In March 2019, the Bristol-Myers Squibb-Pfizer Alliance announced results from the Phase 4 AUGUSTUS trial evaluating Eliquis versus vitamin K antagonists (VKAs) in patients with non-valvular atrial fibrillation and recent acute coronary syndrome and/or undergoing percutaneous coronary intervention. Results showed that in patients receiving a P2Y12 inhibitor with or without aspirin (antiplatelet therapies), the proportion of patients with major or clinically relevant non-major bleeding at six months was significantly lower for those treated with Eliquis compared to those treated with a VKA. These data were featured as a late-breaking oral presentation at the American College of Cardiology’s 68^th Annual Scientific Session 2019 and simultaneously published in the New England Journal of Medicine.
• Ibrance (palbociclib) -- In April 2019, Pfizer announced that the FDA approved a supplemental New Drug Application to expand the indications for Ibrance in combination with an aromatase inhibitor or fulvestrant to include men with hormone receptor-positive (HR+), human epidermal growth factor receptor 2 (HER2)-negative advanced or metastatic breast cancer. The approval is based on data from electronic health records and postmarketing reports of the real-world use of Ibrance in male patients sourced from three databases: IQVIA Insurance database, Flatiron Health Breast Cancer database and the Pfizer global safety database.
• Lorbrena/Lorviqua (lorlatinib) -- In March 2019, Pfizer announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion for Lorviqua (approved in the U.S., Canada, and Japan under the brand name Lorbrena), an anaplastic lymphoma kinase (ALK) tyrosine kinase inhibitor (TKI), recommending conditional marketing authorization in the European Union (EU) as a monotherapy treatment for adult patients with ALK-positive advanced non-small cell lung cancer (NSCLC) whose disease has progressed after alectinib or ceritinib as the first ALK TKI therapy, or crizotinib and at least one other ALK TKI. Conversion to normal approval is contingent on provisions of comprehensive data confirming that the benefit-risk balance is positive. The CHMP’s opinion will be reviewed by the European Commission (EC), with a decision expected in the coming months.
• Talzenna (talazoparib) -- In April 2019, Pfizer announced that the CHMP of the EMA adopted a positive opinion for Talzenna recommending marketing authorization in the EU as a monotherapy treatment for adult patients with germline breast cancer susceptibility gene (gBRCA)1/2-mutations, who have HER2-negative locally advanced or metastatic breast cancer. Patients should have been previously treated with an anthracycline and/or a taxane in the (neo)adjuvant, locally advanced or metastatic setting unless patients were not suitable for these treatments. Patients with HR+ breast cancer should have been treated with a prior endocrine-based therapy, or be considered unsuitable for endocrine-based therapy. The CHMP’s opinion will be reviewed by the EC, with a decision expected in the coming months.
• Trazimera (trastuzumab-qyyp) -- In March 2019, Pfizer announced that the FDA approved Trazimera, a biosimilar to Herceptin^®(7), for the treatment of HER2 overexpressing breast cancer and HER2 overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Trazimera is Pfizer’s first oncology monoclonal antibody biosimilar and its fifth biosimilar to be approved by the FDA. Trazimera was approved for use in the EU in July 2018 for the same indications.
• Vizimpro (dacomitinib) -- In April 2019, Pfizer announced that the EC approved Vizimpro in the EU as monotherapy for the first-line treatment of adult patients with locally advanced or metastatic NSCLC with epidermal growth factor receptor-activating mutations.
• Xeljanz (tofacitinib) -- In February 2019, Pfizer announced that it modified an ongoing post-marketing requirement study evaluating the safety of Xeljanz at two doses, 10 mg twice daily (BID) and 5 mg BID, versus a tumor necrosis factor inhibitor (TNFi) control group in patients with rheumatoid arthritis. Following notification from the tofacitinib rheumatology Data Safety Monitoring Board (DSMB) of a safety signal regarding the Xeljanz 10 mg BID treatment group, Pfizer transitioned all patients in the Xeljanz 10 mg BID treatment group to the Xeljanz 5 mg BID treatment group. The DSMB observed that patients in this study that were treated with Xeljanz 10 mg BID had a statistically and clinically important difference in the occurrence of pulmonary embolism, compared with patients who were treated with a TNFi. The DSMB also noted an increase in overall mortality in the Xeljanz 10 mg BID treatment group compared to the Xeljanz 5 mg BID and TNFi treatment groups. The DSMB also stated it firmly believes that the risk-benefit profile of Xeljanz 5 mg BID in comparison to the TNFi group remains appropriately balanced in this study. The Xeljanz 5 mg BID dose is the FDA approved dose for adult patients with moderate to severe rheumatoid arthritis. This study was designed to assess the risk of cardiovascular (CV) events and therefore in contrast to previous Xeljanz studies, patients were required to be at least 50 years of age and have at least one CV risk factor to be eligible for participation in this study. All patients entered the study on stable doses of background methotrexate. Pfizer will work with the FDA and other regulatory agencies to review the full results upon completion of this study.
• Xtandi (enzalutamide) -- In February 2019, Astellas Pharma Inc. and Pfizer announced results from the Phase 3 ARCHES trial in men with metastatic hormone-sensitive prostate cancer (mHSPC). The results showed that Xtandi plus androgen deprivation therapy (ADT) met the primary endpoint by significantly reducing the risk of radiographic progression or death by 61% versus ADT alone. Adverse events in the ARCHES clinical trial were generally consistent with those reported in enzalutamide clinical trials in patients with castration-resistant prostate cancer. These data were presented in an oral session at the 2019 Genitourinary Cancers Symposium.
• Zirabev (PF-06439535, biosimilar bevacizumab) -- In February 2019, Pfizer announced the EC approved Zirabev, a biosimilar to Avastin^®(8), for the treatment of metastatic carcinoma of the colon or rectum, metastatic breast cancer, unresectable advanced, metastatic or recurrent NSCLC, advanced and/or metastatic RCC and persistent, recurrent or metastatic carcinoma of the cervix.

Pipeline Developments

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

• PF-06482077 (20-Valent Pneumococcal Conjugate Vaccine) -- In April 2019, Pfizer presented data from a Phase 2 proof-of-concept study for its 20-valent pneumococcal conjugate vaccine (20vPnC) candidate, PF-06482077, which is being investigated for the prevention of invasive disease and pneumonia caused by Streptococcus pneumoniae serotypes contained in the vaccine in adults aged 18 years and older. The presentation was delivered at the 29^th European Congress of Clinical Microbiology and Infectious Diseases. Pfizer’s 20vPnC candidate includes the 13 serotypes contained in Prevnar 13 plus seven additional serotypes serotypes (8, 10A, 11A,12F, 15B, 22F, and 33F). Pfizer is enrolling three Phase 3 studies evaluating 20vPnC in adults. Combined, these three studies will enroll more than 6,000 adult subjects, including populations of vaccine-naïve adults and adults with prior pneumococcal vaccination. Pfizer expects to submit a BLA to the FDA by the end of 2020, subject to the successful completion of Phase 3 studies in adults.
• PF-07055480 (SB-525) -- In April 2019, Sangamo Therapeutics, Inc. (Sangamo) and Pfizer announced interim data from the Phase 1/2 Alta study evaluating investigational SB-525 gene therapy for severe hemophilia A. Data indicate that SB-525 was generally well-tolerated and demonstrated a dose-dependent increase in Factor VIII levels across the four dosage cohorts. Eight patients in total were dosed. Based on these results, the Safety Monitoring Committee (SMC) recommended cohort expansion at the 3e13 vg/kg dose. Longer-term follow-up data will be presented at an upcoming scientific meeting. Per the SMC recommendation and study protocol, the fourth cohort will be expanded by up to five patients. Patient enrollment is underway. SB-525 is being developed as part of a global collaboration between Sangamo and Pfizer.
• Tanezumab (PF-4383119)

• In April 2019, Pfizer and Eli Lilly and Company (Lilly) announced top-line results from a Phase 3 study evaluating tanezumab 2.5 mg and 5 mg. The objective of the study was to compare the long-term joint safety and 16-week efficacy of tanezumab relative to nonsteroidal anti-inflammatory drugs (NSAIDs) in patients with moderate-to-severe osteoarthritis (OA) of the hip or knee. The tanezumab 5 mg treatment arm met two of the three co-primary efficacy endpoints, demonstrating a statistically significant improvement in pain and physical function compared to NSAIDs at the 16-week analysis, while patients’ overall assessment of their OA was not statistically different than NSAIDs. Patients who received tanezumab 2.5 mg did not experience a statistically significant improvement in pain, physical function or patients’ overall assessment of their OA at 16 weeks compared to NSAIDs. In the safety analysis, there was a higher rate of joint safety events in the tanezumab arms compared to NSAIDs at 80 weeks; the difference was statistically significant. Pfizer and Lilly continue to analyze these results and are assessing potential next steps for tanezumab. The full results from this study will be submitted for future scientific publication or presentation.
• In February 2019, Pfizer and Lilly announced positive top-line results from a Phase 3 study evaluating tanezumab in patients with moderate-to-severe chronic low back pain. In the study, treatment with tanezumab 10 mg met the primary endpoint, demonstrating a statistically significant improvement in pain at 16 weeks compared to placebo. The tanezumab 5 mg arm demonstrated a numerical improvement in pain, but did not reach statistical significance compared to placebo at the week 16 analysis. The full results from this study will be submitted for future scientific publication or presentation.

Corporate Developments

• In March 2019, Vivet Therapeutics (Vivet), a privately held gene therapy biotech company dedicated to developing gene therapy treatments for inherited liver disorders with high unmet medical need, and Pfizer announced that Pfizer has acquired a 15% equity interest in Vivet and secured an exclusive option to acquire all outstanding shares. Pfizer and Vivet will collaborate on the development of VTX-801, Vivet’s proprietary treatment candidate for Wilson disease. Under the terms of the transaction, Pfizer paid approximately €45 million ($51 million) upon signing and will pay an additional €20 million ($23 million) upon achievement of a development milestone. If Pfizer exercises its option to acquire the remaining outstanding shares, it may pay up to €540 million ($613 million) inclusive of the option exercise payment and subject to the achievement of certain post-acquisition clinical, regulatory and commercial milestones. Pfizer can exercise its option to acquire 100% of Vivet following the company’s delivery of certain data from the Phase 1/2 clinical trial for VTX-801. As part of the transaction, Pfizer senior executive Monika Vnuk, M.D., Vice President, Worldwide Business Development, will join Vivet’s Board of Directors. Other terms of the transaction were not disclosed.

Pfizer’s first-quarter 2019 earnings conference call with investment analysts is scheduled for Tuesday, April 30, 2019 at 10:00 a.m. EDT. For instructions on how to join the conference call or the webcast, please refer to the previously-issued press release located on the company’s investor website (www.pfizer.com/investors). Slides that will accompany today’s webcast were posted to the company’s investor website at 6:45 a.m. EDT, concurrent with the issuance of this press release. Pfizer intends to continue this practice for future earnings announcements.

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

https://investors.pfizer.com/files/doc_financials/Quarterly/2019/q1/Q1-2019-PFE-Earnings-Release.pdf

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

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

DISCLOSURE NOTICE: Except where otherwise noted, the information contained in this earnings release and the related attachments is as of April 30, 2019. We assume no obligation to update any forward-looking statements contained in this earnings release and the related attachments as a result of new information or future events or developments.

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

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

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

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

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

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