PROVIDES 2019 FINANCIAL GUIDANCE
-
Full-Year 2018 Revenues of $53.6 Billion, Reflecting 2% Operational
Growth; Fourth-Quarter 2018 Revenues of $14.0 Billion, Reflecting 5%
Operational Growth
-
Full-Year 2018 Reported Diluted EPS(1) of $1.87, Adjusted
Diluted EPS(2) of $3.00; Fourth-Quarter 2018 Reported Loss
Per Share(1) of $0.07, Adjusted Diluted EPS(2)
of $0.64
-
Returned $20.2 Billion Directly to Shareholders in 2018 Through Share
Repurchases and Dividends; Anticipates Repurchasing Approximately $9
Billion of Shares in 2019
-
Provides 2019 Financial Guidance
-
Reflects a Full Year of Revenue and Expense Contributions from
Consumer Healthcare(3)
-
Reflects Anticipated Unfavorable Impact of Foreign Exchange of
Approximately $0.9 billion on Revenues and Approximately $0.06 on
Adjusted Diluted EPS(2)
-
Guidance for Adjusted Diluted EPS(2) Excludes the
Impact of Gains and Losses on Equity Investments, Which Favorably
Impacted 2018 Adjusted Diluted EPS(2) by $0.08
-
Revenue Guidance of $52.0 to $54.0 Billion and Adjusted Diluted EPS(2)
Guidance of $2.82 to $2.92; Midpoints of These Ranges Imply
Essentially Flat Operational Performance Compared to 2018
Excluding the Unfavorable Impact of Foreign Exchange and Net Gains
on Equity Investments from 2018 Results
NEW YORK--(BUSINESS WIRE)--
Pfizer Inc. (NYSE: PFE) reported financial results for fourth-quarter
and full-year 2018 and provided 2019 financial guidance.
Results for the fourth quarter and the full year of 2018 and 2017(4)
are summarized below.
OVERALL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions, except
per share amounts)
|
|
Fourth-Quarter
|
|
|
Full-Year
|
|
|
2018
|
|
2017
|
|
Change
|
|
|
2018
|
|
2017
|
|
Change
|
Revenues
|
|
$
|
|
13,976
|
|
|
$
|
|
13,703
|
|
|
2%
|
|
|
$
|
|
53,647
|
|
|
$
|
|
52,546
|
|
|
2%
|
Reported Net Income/(Loss)(1) |
|
|
|
(394
|
)
|
|
|
|
12,274
|
|
|
*
|
|
|
|
|
11,153
|
|
|
|
|
21,308
|
|
|
(48%)
|
Reported Diluted EPS/(LPS)(1) |
|
|
|
(0.07
|
)
|
|
|
|
2.02
|
|
|
*
|
|
|
|
|
1.87
|
|
|
|
|
3.52
|
|
|
(47%)
|
Adjusted Income(2) |
|
|
|
3,802
|
|
|
|
|
3,772
|
|
|
1%
|
|
|
|
|
17,958
|
|
|
|
|
16,085
|
|
|
12%
|
Adjusted Diluted EPS(2) |
|
|
|
0.64
|
|
|
|
|
0.62
|
|
|
3%
|
|
|
|
|
3.00
|
|
|
|
|
2.65
|
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Indicates calculation not meaningful or result is equal to or
greater than 100%.
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Fourth-Quarter
|
|
|
Full-Year
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
|
|
Total
|
|
Oper.
|
|
|
|
|
Total
|
|
Oper.
|
Innovative Health
|
|
$
|
|
8,852
|
|
|
$
|
|
8,218
|
|
|
8%
|
|
10%
|
|
|
$
|
|
33,426
|
|
|
$
|
|
31,422
|
|
|
6%
|
|
6%
|
Essential Health
|
|
|
|
5,124
|
|
|
|
|
5,484
|
|
|
(7%)
|
|
(3%)
|
|
|
|
|
20,221
|
|
|
|
|
21,124
|
|
|
(4%)
|
|
(5%)
|
Total Company
|
|
$
|
|
13,976
|
|
|
$
|
|
13,703
|
|
|
2%
|
|
5%
|
|
|
$
|
|
53,647
|
|
|
$
|
|
52,546
|
|
|
2%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Some amounts in this press release may not add due to rounding. All
percentages have been calculated using unrounded amounts. References to
operational variances pertain to period-over-period growth rates that
exclude the impact of foreign exchange(5).
2019 FINANCIAL GUIDANCE
(6)
Pfizer’s 2019 financial guidance is presented below. Financial guidance
reflects a full year of revenue and expense contributions from Consumer
Healthcare(3).
|
|
|
|
Revenues
|
|
|
$52.0 to $54.0 billion
|
Adjusted Cost of Sales(2) as a Percentage of Revenues
|
|
|
20.8% to 21.8%
|
Adjusted SI&A Expenses(2) |
|
|
$13.5 to $14.5 billion
|
Adjusted R&D Expenses(2) |
|
|
$7.8 to $8.3 billion
|
Adjusted Other (Income)/Deductions(2) |
|
|
Approximately $100 million of income
|
Effective Tax Rate on Adjusted Income(2) |
|
|
Approximately 16.0%
|
Adjusted Diluted EPS(2) |
|
|
$2.82 to $2.92
|
|
|
|
|
Financial guidance for Adjusted diluted EPS(2) reflects
anticipated share repurchases totaling approximately $9 billion in 2019.
Dilution related to share-based employee compensation programs is
currently expected to offset the reduction in shares associated with
these share repurchases by approximately half.
Financial guidance for Adjusted Other (Income)/Deductions(2)
and Adjusted Diluted EPS(2) now excludes the impact of
realized and unrealized gains and losses on investments in equity
securities. In 2018, Pfizer’s 2018 financial results included net gains
on investments in equity securities, which favorably impacted Adjusted
Other (Income)/Deductions(2) by $586 million and Adjusted
Diluted EPS(2) by approximately $0.08.
A reconciliation of Pfizer’s full-year 2018 financial results to certain
components of its 2019 financial guidance, including certain significant
factors impacting 2018 financial results and 2019 financial guidance, is
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-Year 2018 Results
|
|
2018 (Gains)
on Equity Investments
|
|
2018 Results Excluding (Gains) on Equity Investments
|
|
2019 Financial Guidance at 2018 FX Rates
|
|
Impact of Mid-January 2019 FX Rates Compared to 2018
FX Rates
|
|
2019 Financial Guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues ($ in billions)
|
|
$53.6
|
|
--
|
|
$53.6
|
|
$52.9 to $54.9
|
|
($0.9)
|
|
$52.0 to $54.0
|
Adjusted Diluted EPS(2) |
|
$3.00
|
|
($0.08)
|
|
$2.92
|
|
$2.88 to $2.98
|
|
($0.06)
|
|
$2.82 to $2.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL ALLOCATION
-
During 2018, Pfizer returned $20.2 billion directly to shareholders,
through a combination of:
-
$8.0 billion of dividends, composed of quarterly dividends of
$0.34 per share of common stock; and
-
$12.2 billion of share repurchases, composed of $8.2 billion of
open-market share repurchases and a $4.0 billion accelerated share
repurchase agreement executed in March 2018 and completed in
September 2018.
-
The full-year 2018 diluted weighted-average shares used to calculate
earnings per common share was 5,977 million shares, a reduction of 81
million shares compared to full-year 2017.
-
In 2019, Pfizer anticipates quarterly dividend payments of $0.36 per
share of common stock in addition to approximately $9 billion of share
repurchases, of which $1.4 billion have been repurchased through
January 29, 2019.
-
As of January 29, 2019, Pfizer’s remaining share repurchase
authorization was $12.8 billion, which includes a new $10.0 billion
share repurchase program that was authorized by Pfizer’s board of
directors in December 2018 and reflects the aforementioned shares
already repurchased in 2019.
EXECUTIVE COMMENTARY
Dr. Albert Bourla, Pfizer’s Chief Executive Officer, stated, “2018 was
highlighted by solid financial performance, shareholder-friendly capital
allocation, the strengthening of our pipeline and the formation of our
new commercial structure designed to transition the company to a period
post-2020 where we expect a higher and more sustained revenue growth
profile.
“We enter 2019 with confidence in the competitive positioning of our
businesses, the prospects for our recently launched products and product
line extensions, as well as the strength and breadth of our research
pipeline. Our focus remains on advancing science and innovation in areas
that we believe will serve the unmet needs of patients and also create
the most attractive opportunities for value creation.
Dr. Bourla continued, “2019 is expected to be a busy year with important
clinical data readouts across our early-, mid- and late-stage pipeline.
In the near term, we expect to report pivotal top-line results for
tanezumab in chronic lower back pain as well as additional data in
osteoarthritis following today’s announcement of a second positive Phase
3 trial. Later in the year, we anticipate reporting pivotal results for
rivipansel in vaso-occlusive crisis from sickle cell disease as well as
the results of the first Phase 3 trials for abrocitinib (PF-04965842),
our Janus kinase-1 (JAK1) inhibitor in development for
moderate-to-severe atopic dermatitis. In our earlier stage pipeline, we
anticipate generating data for two nonalcoholic steatohepatitis
candidates (PF-05221304 and PF-06865571), psoriasis data for two
tyrosine kinase 2 (TYK2) inhibitor candidates (PF-06826647 and
PF-06700841, a TYK2/JAK1 dual inhibitor) and immune response data for
our respiratory syncytial virus infection (PF-06928316) and pentavalent
meningococcal (PF-06886992) vaccine candidates. We also expect to
provide early clinical data for our mini-dystrophin gene therapy
candidate (PF-06939926) in boys with Duchenne muscular dystrophy, and
for our gene therapy program for Hemophilia A (PF-07055480), in
collaboration with Sangamo Therapeutics, Inc.
“We see attractive opportunities globally to deliver value to patients,
payors and other stakeholders through a combination of innovative
biopharmaceutical medicines, vaccines, biosimilars, legacy brands and
sterile injectable pharmaceutical products. I believe we have the
business structure, leadership team and financial capability firmly in
place to drive continued success,” 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 2018 financial performance. We were able to achieve 2%
operational revenue growth for the year. We also delivered Adjusted
diluted EPS(2) growth of 13% in 2018, primarily reflecting a
lower effective tax rate on adjusted income(2) due to tax
reform, higher adjusted other income(2), strong performance
of certain key products and the net impact of our share repurchases.
Regarding capital allocation decisions in 2018, we returned $20.2
billion directly to shareholders through share repurchases and dividends
and also announced a new joint venture for Pfizer Consumer Healthcare
with GlaxoSmithKline plc (GSK)(3), delivering on our
commitment to complete the strategic review for our Consumer Healthcare
business in 2018.
“Our 2019 financial guidance anticipates continued strong growth from
key product franchises, including Ibrance, Eliquis, Xeljanz and Xtandi
as well as the expected loss of exclusivity of Lyrica in the U.S. in
June 2019. The midpoint of our 2019 revenue guidance range implies
comparable operational performance to 2018 while absorbing an
anticipated $2.6 billion revenue headwind due to products that have
recently lost or are expected to soon lose marketing exclusivity.
Additionally, the midpoint of our 2019 guidance range for Adjusted
diluted EPS(2) also implies comparable operational
performance to 2018 when excluding the anticipated $0.06 unfavorable
impact of foreign exchange on 2019 guidance as well as the $0.08
favorable impact on 2018 Adjusted diluted EPS(2) from net
gains on equity investments, which will no longer be included in Adjusted(2)
financial results. Notably, our guidance for adjusted diluted EPS(2)
anticipates share repurchases totaling approximately $9 billion in 2019,
which is currently expected to be offset by approximately half due to
dilution related to share-based employee compensation programs,” Mr.
D’Amelio concluded.
QUARTERLY FINANCIAL HIGHLIGHTS (Fourth-Quarter 2018 vs.
Fourth-Quarter 2017)
Fourth-quarter 2018 revenues totaled $14.0 billion, an increase of $274
million, or 2%, compared to the prior-year quarter, reflecting
operational growth of $657 million, or 5%, partially offset by the
unfavorable impact of foreign exchange of $383 million, or 3%.
Innovative Health (IH) Highlights
-
IH revenues increased 10% operationally, primarily driven by continued
growth from key brands including:
-
Ibrance outside the U.S. grew significantly operationally,
primarily driven by continued uptake in developed Europe and the
December 2017 launch in Japan as well as the non-recurrence of a
one-time price adjustment to full-year 2017 revenues, recorded in
fourth-quarter 2017, related to finalizing reimbursement
agreements in certain developed Europe markets;
-
Eliquis globally, up 31% operationally, primarily driven by
continued increased adoption in non-valvular atrial fibrillation
as well as oral anti-coagulant market share gains;
-
Xeljanz globally, up 37% operationally, primarily driven by
continued uptake in the rheumatoid arthritis indication and, to a
lesser extent, from the launches of the psoriatic arthritis and
ulcerative colitis indications in the U.S.; and
-
Prevenar 13 in emerging markets, up 13% operationally, primarily
due to continued momentum from the launch of the pediatric
indication in China in the second quarter of 2017,
partially offset primarily by lower revenues for:
-
Viagra in the U.S. due to its December 2017 loss of exclusivity
and the resulting shift in the reporting of Viagra revenues in the
U.S. and Canada to the Essential Health business at the beginning
of 2018(4);
-
Enbrel in most developed Europe markets, primarily due to
continued biosimilar competition; and
-
Xalkori globally, primarily due to competitive pressures.
Essential Health (EH) Highlights
-
EH revenues declined 3% operationally, negatively impacted primarily
by:
-
a 13% operational decline in the Legacy Established Products (LEP)
portfolio in developed markets, primarily driven by industry-wide
pricing challenges in the U.S. and generic competition;
-
a 14% operational decline in the Sterile Injectable Pharmaceutical
(SIP) portfolio in developed markets, primarily due to increased
competition across the portfolio and continued legacy Hospira
product shortages in the U.S.; and
-
a 10% operational decline in the Peri-LOE Products portfolio in
developed markets, primarily due to expected declines in Lyrica in
developed Europe and Pristiq, partially offset by the addition of
Viagra revenues from the U.S. and Canada that were previously
recorded in the IH business,
partially offset primarily by:
-
10% operational growth in emerging markets, primarily reflecting
growth across the LEP and SIP portfolios in China; and
-
31% operational growth from Biosimilars in developed markets,
primarily from Inflectra in certain channels in the U.S.
GAAP Reported
(1)
Income Statement Highlights
SELECTED TOTAL COMPANY REPORTED COSTS AND EXPENSES
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
(Favorable)/Unfavorable
|
|
Fourth-Quarter
|
|
|
Full-Year
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
|
|
Total
|
|
Oper.
|
|
|
|
|
Total
|
|
Oper.
|
Cost of Sales(1) |
|
$
|
|
3,075
|
|
|
$
|
|
3,256
|
|
|
(6%)
|
|
4%
|
|
|
$
|
|
11,248
|
|
|
$
|
|
11,228
|
|
|
—
|
|
2%
|
Percent of Revenues
|
|
|
|
22.0
|
%
|
|
|
|
23.8
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
21.0
|
%
|
|
|
|
21.4
|
%
|
|
N/A
|
|
N/A
|
SI&A Expenses(1) |
|
|
|
4,007
|
|
|
|
|
4,555
|
|
|
(12%)
|
|
(10%)
|
|
|
|
|
14,455
|
|
|
|
|
14,804
|
|
|
(2%)
|
|
(3%)
|
R&D Expenses(1) |
|
|
|
2,457
|
|
|
|
|
2,316
|
|
|
6%
|
|
7%
|
|
|
|
|
8,006
|
|
|
|
|
7,683
|
|
|
4%
|
|
4%
|
Total
|
|
$
|
|
9,539
|
|
|
$
|
|
10,127
|
|
|
(6%)
|
|
(2%)
|
|
|
$
|
|
33,709
|
|
|
$
|
|
33,715
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income)/Deductions––net(1) |
|
$
|
|
3,259
|
|
|
$
|
|
1,351
|
|
|
*
|
|
*
|
|
|
$
|
|
2,116
|
|
|
$
|
|
1,416
|
|
|
49%
|
|
43%
|
Effective Tax Rate on Reported Income(1) |
|
*
|
|
*
|
|
|
|
|
|
|
|
|
5.9
|
%
|
|
|
|
(73.5
|
%)
|
|
|
|
|
* Indicates calculation not meaningful or result is equal to or
greater than 100%.
|
|
The increase in fourth-quarter 2018 other deductions––net(1)
compared with the prior-year quarter was primarily driven by:
-
higher asset impairments charges, primarily associated with generic
sterile injectable products acquired in connection with Pfizer’s 2015
acquisition of Hospira, Inc.; and
-
higher charges for certain legal matters,
partially offset primarily by:
-
the non-recurrence of net losses on the retirement of certain
outstanding debt securities that were recorded in fourth-quarter 2017;
and
-
higher net gains on asset disposals.
Pfizer’s effective tax rate on Reported income(1) for
fourth-quarter and full-year 2018 compared to the prior year periods was
unfavorably impacted primarily by:
-
the non-recurrence of a $10.7 billion tax benefit recorded in
fourth-quarter 2017 to reflect the December 2017 enactment of the Tax
Cut and Jobs Act (TCJA),
partially offset primarily by:
-
a favorable change in the jurisdictional mix of earnings as a result
of operating fluctuations in the normal course of business; and
-
an increase in benefits associated with the resolution of certain tax
positions pertaining to prior years primarily with various foreign tax
authorities, and the expiration of certain statutes of limitations.
Adjusted
(2)
Income Statement Highlights
SELECTED TOTAL COMPANY ADJUSTED COSTS AND EXPENSES
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
(Favorable)/Unfavorable
|
|
Fourth-Quarter
|
|
|
Full-Year
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
2018
|
|
2017
|
|
% Change
|
|
|
|
|
Total
|
|
Oper.
|
|
|
|
|
Total
|
|
Oper.
|
Adjusted Cost of Sales(2) |
|
$
|
|
3,044
|
|
|
$
|
|
3,059
|
|
|
—
|
|
10%
|
|
|
$
|
|
11,130
|
|
|
$
|
|
10,778
|
|
|
3%
|
|
5%
|
Percent of Revenues
|
|
|
|
21.8
|
%
|
|
|
|
22.3
|
%
|
|
N/A
|
|
N/A
|
|
|
|
|
20.7
|
%
|
|
|
|
20.5
|
%
|
|
N/A
|
|
N/A
|
Adjusted SI&A Expenses(2) |
|
|
|
3,968
|
|
|
|
|
4,321
|
|
|
(8%)
|
|
(6%)
|
|
|
|
|
14,232
|
|
|
|
|
14,489
|
|
|
(2%)
|
|
(2%)
|
Adjusted R&D Expenses(2) |
|
|
|
2,436
|
|
|
|
|
2,305
|
|
|
6%
|
|
6%
|
|
|
|
|
7,962
|
|
|
|
|
7,653
|
|
|
4%
|
|
4%
|
Total
|
|
$
|
|
9,448
|
|
|
$
|
|
9,685
|
|
|
(2%)
|
|
2%
|
|
|
$
|
|
33,325
|
|
|
$
|
|
32,920
|
|
|
1%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Other (Income)/Deductions––net(2) |
|
|
|
($111
|
)
|
|
|
|
($186
|
)
|
|
(41%)
|
|
(23%)
|
|
|
|
|
($1,253
|
)
|
|
|
|
($733
|
)
|
|
71%
|
|
84%
|
Effective Tax Rate on Adjusted Income(2) |
|
|
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16.6
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%
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8.6
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%
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15.5
|
%
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20.0
|
%
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Pfizer’s effective tax rate on Adjusted income(2) for
fourth-quarter 2018 was unfavorably impacted primarily by:
-
the non-recurrence of tax benefits recorded in fourth-quarter 2017
related to the enactment of the TCJA, primarily reflecting the
remeasurement of U.S. deferred tax liabilities on deemed repatriated
earnings of foreign subsidiaries that were accrued during 2017 prior
to the enactment of the TCJA,
partially offset primarily by:
-
the jurisdictional mix of earnings as a result of operating
fluctuations in the normal course of business; and
-
an increase in benefits associated with the resolution of certain tax
positions pertaining to prior years primarily with various foreign tax
authorities, and the expiration of certain statutes of limitations.
Pfizer’s effective tax rate on Adjusted income(2) for
full-year 2018 was favorably impacted primarily by:
-
the December 2017 enactment of the TCJA;
-
the jurisdictional mix of earnings as a result of operating
fluctuations in the normal course of business; and
-
an increase in benefits associated with the resolution of certain tax
positions pertaining to prior years primarily with various foreign tax
authorities, and the expiration of certain statutes of limitations.
Fourth-quarter 2018 diluted weighted-average shares outstanding used to
calculate Reported(1) and Adjusted(2) diluted EPS
declined by 152 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, 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 23 of the press release located at the hyperlink below.
FULL-YEAR REVENUE SUMMARY (Full-Year 2018 vs. Full-Year 2017)
Full-year 2018 revenues totaled $53.6 billion, an increase of $1.1
billion, or 2%, compared to full-year 2017, reflecting operational
growth of $791 million, or 2%, and the favorable impact of foreign
exchange of $310 million, or less than 1%.
Full-year 2018 operational revenue growth of $791 million, or 2%, was
primarily driven by:
-
certain key products, including Ibrance, Eliquis and Xeljanz globally,
Prevnar 13/Prevenar 13 primarily in emerging markets, as well as
Inflectra primarily in the U.S. and developed Europe; and
-
emerging markets operational growth of $1.5 billion, or 13% (inclusive
of the performance of the aforementioned products),
partially offset primarily by lower revenues for:
-
products that recently lost marketing exclusivity, which negatively
impacted 2018 revenues by $1.7 billion operationally, primarily Viagra
in the U.S., Enbrel and Lyrica in developed Europe as well as Relpax
and Pristiq in the U.S.;
-
the LEP portfolio in developed markets, primarily driven by
industry-wide pricing challenges in the U.S. and generic competition;
and
-
the SIP portfolio, primarily due to increased competition and legacy
Hospira product shortages in the U.S.
RECENT NOTABLE DEVELOPMENTS (Since October 30, 2018)
Product Developments
-
Bavencio (avelumab)
-
In December 2018, Merck KGaA, Darmstadt, Germany (Merck KGaA), and
Pfizer announced that data from a planned interim analysis of the
Phase 3 JAVELIN Ovarian 100 study of avelumab did not support the
study’s initial hypothesis, and therefore the alliance made the
decision to terminate the trial in alignment with the independent
Data Monitoring Committee (DMC). Top-line results showed that the
study, which evaluated avelumab in combination with and/or
following platinum-based chemotherapy in previously untreated
patients with ovarian cancer, would not achieve superiority in the
pre-specified primary endpoint of progression-free survival (PFS).
-
In November 2018, Merck KGaA and Pfizer announced that the Phase 3
JAVELIN Ovarian 200 trial evaluating avelumab alone or in
combination with pegylated liposomal doxorubicin (PLD), a type of
chemotherapy, compared with PLD did not meet the pre-specified
primary endpoints of overall survival (OS) or PFS in patients with
platinum-resistant or -refractory ovarian cancer. No new safety
signals were observed for avelumab alone or in combination with
PLD, and the safety profile for avelumab in this trial was
consistent with that observed in the overall JAVELIN clinical
development program. The data are currently being analyzed, and
detailed results will be shared with the scientific community.
-
Daurismo (glasdegib) -- In November 2018, Pfizer announced that
the U.S. Food and Drug Administration (FDA) approved Daurismo, a
once-daily oral medicine, for the treatment of newly-diagnosed acute
myeloid leukemia in adult patients who are 75 years or older or who
have comorbidities that preclude use of intensive induction
chemotherapy. Daurismo is taken in combination with low-dose
cytarabine, a type of chemotherapy. Daurismo has not been studied in
patients with severe renal impairment or moderate-to-severe hepatic
impairment.
-
Lorbrena (lorlatinib) -- In November 2018, Pfizer announced
that the FDA approved Lorbrena, a third-generation anaplastic lymphoma
kinase (ALK) tyrosine kinase inhibitor for patients with ALK-positive
metastatic non-small cell lung cancer (NSCLC) whose disease has
progressed on crizotinib and at least one other ALK inhibitor for
metastatic disease; or whose disease has progressed on alectinib or
ceritinib as the first ALK inhibitor therapy for metastatic disease.
This indication is approved under accelerated approval based on tumor
response rate and duration of response. Continued approval for this
indication may be contingent upon verification and description of
clinical benefit in a confirmatory trial.
-
Lyrica (pregabalin) -- In November 2018, Pfizer announced that
the FDA granted pediatric exclusivity for Lyrica. This grant extends
the period of U.S. market exclusivity for Lyrica by an additional six
months, to June 30, 2019. The pediatric exclusivity determination was
based on data from the Lyrica Pediatric Epilepsy Program, which were
submitted in response to the FDA’s written request to Pfizer to
evaluate the use of Lyrica as adjunctive therapy for partial onset
seizures in pediatric epilepsy patients. These were also required
post-marketing studies.
-
Xtandi (enzalutamide) -- In December 2018, Astellas Pharma Inc.
(Astellas) and Pfizer announced that the Phase 3 ARCHES trial
evaluating Xtandi plus androgen deprivation therapy (ADT) in men with
metastatic hormone-sensitive prostate cancer met its primary endpoint,
significantly improving radiographic progression-free survival versus
ADT alone. The preliminary safety analysis of the ARCHES trial appears
consistent with the safety profile of Xtandi in previous clinical
trials in castration-resistant prostate cancer.
Pipeline Developments
A comprehensive update of Pfizer’s development pipeline was published
today and is now available at www.pfizer.com/science/drug-product-pipeline.
It includes an overview of Pfizer’s research and a list of compounds in
development with targeted indication and phase of development, as well
as mechanism of action for some candidates in Phase 1 and all candidates
from Phase 2 through registration.
-
PF-05280586 (proposed biosimilar rituximab) -- In December
2018, Pfizer announced at the American Society of Hematology Annual
Meeting that the REFLECTIONS B328-06 study, a comparative safety and
efficacy study of PF-05280586 versus Rituxan®/MabThera®(7)
(rituximab-EU), met its primary endpoint of overall response rate
(ORR) at week 26 of the 52-week study. 26-week data from the ongoing
52-week REFLECTIONS B328-06 study (n=394) demonstrated no clinically
meaningful differences in efficacy, in terms of ORR at week 26,
between PF-05280586 and MabThera®(7), for the first-line
treatment of patients with CD20-positive, low tumor burden, follicular
lymphoma. ORR at week 26 was 75.5% for PF-05280586 compared to 70.7%
(rituximab-EU), within the pre-specified equivalence margin.
Additionally, estimated rates of one-year PFS were similar across
groups (76.4% vs. 81.2% in the PF-05280586 and MabThera®(7)
groups, respectively). The results also showed that PF-05280586 had a
similar safety profile to MabThera®(7).
-
PF-06290510 (Staphylococcus aureus multi-antigen vaccine) --
In December 2018, Pfizer announced that the Phase 2b trial STRIVE (STaphylococcus
aureus SuRgical Inpatient Vaccine Efficacy) evaluating the
company’s investigational Staphylococcus aureus (S. aureus)
multi-antigen vaccine is being discontinued due to futility. This
decision is based on a recommendation from an independent DMC,
composed of external experts, after conducting a pre-planned interim
analysis. The DMC concluded from these data that the study reached
futility, meaning that there is low statistical probability for the
study to meet the pre-defined primary efficacy objective in adults
undergoing elective spinal fusion surgery after completing a planned
Phase 3 expansion of the study. A safety review by the DMC indicated
that the investigational vaccine has been safe and well tolerated.
STRIVE trial participants who are enrolled in the study will complete
the study’s follow-up evaluations.
-
PF-06410293 (proposed biosimilar adalimumab) -- In January
2019, the FDA accepted for review a Biologics License Application for
PF-06410293, a proposed biosimilar to Humira(8). The
Biosimilar User Fee Act goal date for a decision by the FDA is in
fourth-quarter 2019.
-
PF-06439535 (proposed biosimilar bevacizumab) -- In December
2018, Pfizer announced that the Committee for Medicinal Products for
Human Use of the European Medicines Agency adopted a positive opinion,
recommending marketing authorization for Zirabev (PF-06439535), a
proposed biosimilar to Avastin(9).
-
PF-06482077 (20-Valent Pneumococcal Conjugate Vaccine) -- In
December 2018, Pfizer announced the initiation of a Phase 3 program
for its 20-valent pneumococcal conjugate vaccine (20vPnC) candidate,
PF-06482077, for the prevention of invasive disease and pneumonia
caused by Streptococcus pneumoniae serotypes in the vaccine in
adults aged 18 years and older. This first Phase 3 trial will enroll
an estimated 3,880 adults and is designed to compare immune responses
after 20vPnC administration to responses in control subjects ≥60 years
old receiving 13-valent pneumococcal conjugate vaccine and 23-valent
pneumococcal polysaccharide vaccine; evaluate the immunogenicity of
20vPnC in adults 18-59 years of age; and describe the 20vPnC safety
profile in adults ≥18 years old.
-
PF-06651600 (JAK3) -- In January 2019, Pfizer announced the
initiation of a pivotal Phase 2b/3 clinical trial for its oral JAK3
inhibitor, PF-06651600, for the treatment of patients with moderate to
severe alopecia areata, a chronic autoimmune skin disease that causes
hair loss on the scalp, face, or body, and currently has no approved
therapies. The trial will enroll an estimated 660 patients and will be
a double-blind, placebo-controlled, dose-ranging study to evaluate the
safety and effectiveness of PF-06651600 in adults and adolescents (12
years and older) who have 50% or greater scalp hair loss.
-
Tafamidis -- In January 2019, Pfizer announced that the FDA
accepted for filing the company’s New Drug Applications (NDAs) for
tafamidis for the treatment of transthyretin amyloid cardiomyopathy.
Pfizer submitted two NDAs based on two forms of tafamidis: meglumine
salt and free acid. The NDA for tafamidis meglumine (20 mg capsule)
was granted Priority Review designation and has a Prescription Drug
User Fee Act (PDUFA) goal date for a decision by the FDA in July 2019.
The tafamidis free acid form (61 mg capsule) will undergo a standard
review and has a PDUFA goal date for a decision by the FDA in November
2019. The free acid form is bioequivalent to the 80 mg tafamidis
meglumine dose, which was administered as four 20 mg capsules in the
pivotal trial and was developed for patient convenience to enable a
single capsule for daily administration.
-
Tanezumab (PF-4383119, RN624) -- Pfizer and Eli Lilly and
Company today announced positive top-line results from a Phase 3 study
evaluating tanezumab 2.5 mg or 5 mg in patients with
moderate-to-severe osteoarthritis (OA) pain. The tanezumab 5 mg
treatment arm met all three co-primary endpoints at 24 weeks,
demonstrating a statistically significant improvement in pain,
physical function and the patients’ overall assessment of their OA
compared to those receiving placebo. The tanezumab 2.5 mg treatment
arm met two of the three protocol-defined co-primary efficacy
endpoints compared to placebo, demonstrating a statistically
significant improvement in pain and physical function, while patients’
overall assessment of their OA was not statistically different than
placebo. Patients enrolled in the study had experienced inadequate
pain relief from or intolerance to at least three different classes of
analgesics, and on average had OA for more than six years.
Preliminary
safety data showed that tanezumab was generally well tolerated during
the 24-week treatment period, with similarly low rates of treatment
discontinuations due to adverse events observed among patients taking
tanezumab and placebo. The trial also included a 24-week safety
follow-up period, for a total of 48 weeks of observation. Overall,
rapidly progressive osteoarthritis (RPOA) was observed in 2.1% of
tanezumab-treated patients and was not observed in the placebo arm.
The ratio of RPOA type 1 (accelerated joint space narrowing) to RPOA
type 2 (damage or deterioration of the joint) was 2:1, consistent with
the ratio from the previously reported subcutaneous Phase 3 study in
OA pain (A4091056). There was one event of osteonecrosis and one event
of subchondral insufficiency fracture observed in tanezumab-treated
patients, and no events were observed in the placebo arm. The rate of
total joint replacement was similar across the tanezumab treatment
groups and placebo. Detailed efficacy and safety results from this
study will be submitted to a future medical congress.
Corporate Developments
-
At the start of the 2019 fiscal year(4), Pfizer began
operating in its previously-announced new commercial structure,
reorganizing operations into three businesses:
-
Pfizer Biopharmaceuticals Group (PBG), a science-based innovative
medicines business, which includes all of the 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.
Pfizer also incorporated its biosimilar portfolio into its
Oncology and Inflammation & Immunology business units.
-
Upjohn, a global, off-patent branded and generic established
medicines business, which includes the majority of Pfizer’s
off-patent solid oral dose legacy brands, including Lyrica,
Lipitor, Norvasc, Viagra and Celebrex as well as certain generic
medicines. To allow this business to act with speed and
flexibility, it has distinct and fully-dedicated manufacturing,
marketing, regulatory and, with some exceptions, enabling
functions, which enhances its autonomy and positions it to operate
as a true stand-alone business within Pfizer.
-
Consumer Healthcare, which includes Pfizer’s over-the-counter
medicines(6).
Pfizer will provide financial reporting to reflect this reorganization
beginning in first-quarter 2019.
-
In December 2018, Pfizer entered into a definitive agreement with GSK
under which the two companies have agreed to combine their respective
consumer healthcare businesses into a new consumer healthcare joint
venture that will operate globally under the GSK Consumer Healthcare
name. In exchange for contributing its Consumer Healthcare business,
Pfizer will receive a 32% equity stake in the new company and GSK will
own the remaining 68% of the new company. Upon the closing of the
transaction, which is expected to occur in the second half of 2019,
subject to customary closing conditions including GSK shareholder
approval and required regulatory approvals, Pfizer anticipates
deconsolidating its Consumer Healthcare business and will begin to
receive its pro rata share of the joint venture’s earnings and
dividends, which will be paid on a quarterly basis. Pfizer will have
the right to appoint three out of the nine members of the joint
venture’s board. The transaction is expected to deliver $650 million
in peak cost synergies and to be slightly accretive for Pfizer in each
of the first three years after the close of the transaction.
-
In December 2018, Pfizer’s board of directors declared a 36-cent
first-quarter 2019 dividend on the company’s common stock,
representing an increase of approximately 6% compared to the company’s
first-quarter 2018 dividend. The first-quarter 2019 dividend is
payable on March 1, 2019 to shareholders of record at the close of
business on February 1, 2019. Additionally, the board of directors
also authorized a new $10 billion share repurchase program to be
utilized over time. As of January 29, 2019, Pfizer’s remaining share
repurchase authorization was $12.8 billion, including this new share
repurchase program and reflecting the $1.4 billion of shares
repurchased to date in 2019.
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/2018/q4/Q4-2018-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.
(1)
|
|
Revenues is defined as revenues in accordance with U.S. generally
accepted accounting principles (GAAP). Reported net income/(loss) is
defined as net income/(loss) attributable to Pfizer Inc. in
accordance with U.S. GAAP. Reported diluted earnings per share (EPS)
and reported loss per share (LPS) are defined as diluted EPS or LPS
attributable to Pfizer Inc. common shareholders in accordance with
U.S. GAAP.
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(2)
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Adjusted income and its components and Adjusted diluted EPS are
defined as reported U.S. GAAP net income(1) and its
components and reported diluted EPS(1) excluding
purchase accounting adjustments, acquisition-related costs,
discontinued operations and certain significant items (some of
which may recur, such as restructuring or legal charges, but which
management does not believe are reflective of ongoing core
operations). Adjusted cost of sales, Adjusted selling,
informational and administrative (SI&A) expenses, Adjusted
research and development (R&D) expenses and Adjusted other
(income)/deductions are income statement line items prepared on
the same basis as, and therefore components of, the overall
Adjusted income measure. As described in the Financial
Review––Non-GAAP Financial Measure (Adjusted Income) section
of Pfizer’s 2017 Financial Report, which was filed as Exhibit 13
to Pfizer’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2017, management uses Adjusted income, among other
factors, to set performance goals and to measure the performance
of the overall company. Because Adjusted income is an important
internal measurement for Pfizer, management believes that
investors’ understanding of our performance is enhanced by
disclosing this performance measure. Pfizer reports Adjusted
income, certain components of Adjusted income, and Adjusted
diluted EPS in order to portray the results of the company’s major
operations––the discovery, development, manufacture, marketing and
sale of prescription medicines, vaccines and consumer healthcare
(OTC) products––prior to considering certain income statement
elements. See the accompanying reconciliations of certain GAAP
Reported to Non-GAAP Adjusted information for the fourth quarter
and full year of 2018 and 2017. The Adjusted income and its
components and Adjusted diluted EPS measures are not, and should
not be viewed as, substitutes for U.S. GAAP net income and its
components and diluted EPS.
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(3)
|
|
In December 2018, Pfizer entered into a definitive agreement with
GSK under which the two companies have agreed to combine their
respective consumer healthcare businesses into a new consumer
healthcare joint venture that will operate globally under the GSK
Consumer Healthcare name. In exchange for contributing its Consumer
Healthcare business, Pfizer will receive a 32% equity stake in the
new company and GSK will own the remaining 68% of the new company.
Upon the closing of the transaction, which is expected to occur in
the second half of 2019, subject to customary closing conditions
including GSK shareholder approval and required regulatory
approvals, Pfizer anticipates deconsolidating its Consumer
Healthcare business and will begin to receive its pro rata share of
the joint venture’s earnings and dividends, which will be paid on a
quarterly basis. For additional information regarding the proposed
transaction, please see the Corporate Developments section of this
press release.
|
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(4)
|
|
Pfizer’s fiscal year-end for international subsidiaries is November
30 while Pfizer’s fiscal year-end for U.S. subsidiaries is December
31. Therefore, Pfizer’s fourth quarter and full year for U.S.
subsidiaries reflect the three and twelve months ending on December
31, 2018 and December 31, 2017 while Pfizer’s fourth quarter and
full year for subsidiaries operating outside the U.S. reflect the
three and twelve months ending on November 30, 2018 and November 30,
2017.
|
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(5)
|
|
References to operational variances in this press release pertain to
period-over-period growth rates that exclude the impact of foreign
exchange. The operational variances are determined by multiplying or
dividing, as appropriate, the current period U.S. dollar results by
the current period average foreign exchange rates and then
multiplying or dividing, as appropriate, those amounts by the
prior-year period average foreign exchange rates. Although exchange
rate changes are part of Pfizer’s business, they are not within
Pfizer’s control. Exchange rate changes, however, can mask positive
or negative trends in the business; therefore, Pfizer believes
presenting operational variances provides useful information in
evaluating the results of its business.
|
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(6)
|
|
The 2019 financial guidance reflects the following:
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|
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•
|
Pfizer does not provide guidance for GAAP Reported financial
measures (other than revenues) or a reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable GAAP Reported financial measures on a forward-looking
basis because it is unable to predict with reasonable certainty
the ultimate outcome of pending litigation, unusual gains and
losses, acquisition-related expenses, net gains or losses on
equity securities and potential future asset impairments without
unreasonable effort. These items are uncertain, depend on various
factors, and could have a material impact on GAAP Reported results
for the guidance period.
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•
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Does not assume the completion of any business development
transactions not completed as of December 31, 2018, including any
one-time upfront payments associated with such transactions.
|
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•
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Reflects a full year of revenue and expense contributions from
Consumer Healthcare(3).
|
|
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•
|
Reflects an anticipated negative revenue impact of $2.6 billion
due to recent and expected generic and biosimilar competition for
certain products that have recently lost or are anticipated to
soon lose patent protection.
|
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•
|
Exchange rates assumed are as of mid-January 2019. Reflects the
anticipated unfavorable impact of approximately $0.9 billion on
revenues and approximately $0.06 on Adjusted diluted EPS(2)
as a result of changes in foreign exchange rates relative to the
U.S. dollar compared to foreign exchange rates from 2018.
|
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•
|
Guidance for Adjusted diluted EPS(2) assumes diluted
weighted-average shares outstanding of approximately 5.7 billion
shares, which reflects share repurchases totaling $12.2 billion in
2018 and the weighted-average impact of an anticipated
approximately $9 billion of share repurchases in 2019. Dilution
related to share-based employee compensation programs is currently
expected to offset the reduction in shares associated with these
share repurchases by approximately half.
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(7)
|
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Rituximab is marketed in the U.S. under the brand name Rituxan®
and marketed in the E.U. and other regions under the brand name
MabThera®. Rituxan® is a registered trademark
of Biogen MA Inc. MabThera® is a registered trademark of
F. Hoffman-La Roche AG.
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(8)
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Humira® is a registered U.S. trademark of Abbvie
Biotechnology Ltd.
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(9)
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Avastin® is a registered U.S. trademark of Genentech, Inc.
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DISCLOSURE NOTICE: Except where otherwise noted, the information
contained in this earnings release and the related attachments is as of
January 29, 2019. We assume no obligation to update any forward-looking
statements contained in this earnings release and the related
attachments as a result of new information or future events or
developments.
This earnings release and the related attachments contain
forward-looking statements about our anticipated future operating and
financial performance, business plans and prospects, in-line products
and product candidates, including anticipated regulatory submissions,
data read-outs, study starts, approvals, performance, timing of
exclusivity and potential benefits of Pfizer’s products and product
candidates, strategic reviews, capital allocation, business-development
plans, the benefits expected from the reorganization of our commercial
operations into three businesses 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 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 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 many other
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 related to 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,
2017 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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190129005196/en/
Media
Joan Campion, 212.733.2798
Investors
Chuck
Triano, 212.733.3901
Ryan Crowe, 212.733.8160
Bryan Dunn,
212.733.8917
Source: Pfizer Inc.