Pfizer, Inc.

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

Good morning, and thank you for joining us today to review Pfizer's first quarter 2019 performance and 2019 financial guidance. I'm joined today by our CEO, Albert Borla, Frank D'Amelio, our CFO, Michael Dolston, President of Worldwide Research and Development, Angela Long, Group President, Pfizer Biopharmaceuticals Group, John Young, our Chief Commercial Officer, and Doug Lankler, General Counsel. The slides that will be presented on this call were posted to our website earlier this morning and are available at Pfizer.com forward slash investors. We'll see here that slide three covers our legal disclosures. Albert and Frank will now make prepared remarks, and then we'll move to a question and answer session. With that, I'll now turn the call over to Albert Borla.

Albert? Thank you, Chuck, and good morning, everyone. It's been a busy and productive first few months as CEO. I've had the pleasure of meeting with many of you to discuss Pfizer's long-term growth prospects. I have also met with thousands of colleagues from around the world, all of whom are committed to driving sustainable growth through scientific and commercial innovation. Value-creating capital allocation and a renewed focus on our purpose. Breakthroughs that change patients' lives. I'm pleased to report that we began the year with a strong first quarter. Revenues were up 5% operationally, company-wide. This was driven by 8% volume growth, offset by a net pricing decline of 3%. If we look at our biopharmaceuticals group, which represented 70% of our revenue base this quarter, we generated a strong 11% volume growth and realized a net pricing decline of 3%. We saw volume growth in several key brands, emerging markets, and biosimilars, and we got our AppZone business up and running. Let's begin with the results from the biopharmaceuticals group. This business grew its top line 7% operationally, due primarily to the continued strength of several key brands, including Eliquis, Ibrans, Provenor 13, and Zeltzins. Eliquis had a strong start to the year, growing its revenues by 36% operationally in the quarter. Eliquis continues to extend its leadership in many major geographies around the world, and in the U.S., we achieved an all-time high prescription share for the brand this quarter. We remain pleased with the performance of iBrands. Global revenues in the first quarter increased 25% operationally to $1.1 billion. As you know, the eye branch growth story is now predominantly in international markets, where we saw 107% operational growth in the quarter. This was driven by continued strong uptake in developed Europe, Japan, and certain emerging markets. In the U.S., we saw 2% growth, which reflected continued moderating volumes in approved metastatic breast cancer indications. Prevenor 13 revenues increased 10% operationally. We saw 31% operational growth in emerging markets, due primarily to favorable overall impact and increased volume associated with government purchases. These gains were partially offset by the non-recurrence of volumes associated with an adult national immunization program in the first quarter of 2018. We saw 6% growth in the U.S., driven by increased government purchases for the pediatric indication, partially offset by lower sales of the adult indication. Regarding the upcoming ACIP meeting in the U.S., we continue to believe that maintaining the current AIDS-based recommendation for adults would prevent numerous cases of pneumococcal pneumonia, as well as the related hospitalizations and outpatient treatments. Zeldens continues to perform well. Revenues in the quarter increased 34 percent operationally to $423 million. Volume growth in the U.S. was strong, aided by the recent addition of new indications. we are in the early days for both launches, 6% of the 38% volume growth in the U.S. came from psoriatic arthritis, and 7% came from ulcerative colitis. So 30% of the total volume growth came from new indications. We look forward to these new indications potentially becoming even more meaningful contributors in the future. For extending Alliance revenues in the U.S. grew 6% operationally to $168 million. We believe our broad labeled indication, as well as the potential for new indications, represent a major opportunity to make a significant impact on patients' lives and change the standard of care in prostate cancer. Revenues from our biosimilars portfolio grew 7% operationally in the quarter. We received regulatory approvals during the quarter for two oncology biosimilars, and we see the potential for additional approvals in key markets later this year. In sterile injectables, manufacturing supply constraints continue to impact our top line in the U.S., We have made some progress towards fixing these issues, particularly since Frank D'Amelio assumed responsibility for our global supply organization on November 1, 2018. We expect these issues to be significantly improved by the end of 2019 and continue to expect this business to be a solid growth contributor in the future. our up-to-business revenues grew 1% operational in the quarter. Emerging markets were the primary driver, including strong, volume-driven operational growth in China for such branches as Lipitor, Norvasc, and Celebrex. These gains were partially offset by lower revenues for Viagra and Pfizer's authorized generic for Viagra in the U.S., and for Greenstone, Abzone's authorized generic subsidiary, primarily due to continued industry-wide pricing challenges in the U.S. generic space. With its streamlined operating structure, relative autonomy, and its leadership located in China, we believe Abzone will help us seize the tremendous opportunity we see in emerging markets. As the global middle class continues to rapidly expand, and as awareness and diagnosis and treatment options continue to improve, we believe the pharmaceutical segment will continue to enjoy significant expansion in greater China and other emerging markets. Pfizer's consumer healthcare revenues were down 2% operationally in the quarter, This reflected an 8% decline in the U.S., due in part to a milder-than-expected cold and cough season. This decline was partially offset by 4% operational growth in international markets. Turning now to R&D, today we released our latest pipeline update, which you can see on this slide. We are very encouraged by our pipelines. both in terms of the breadth of opportunities and the science. And while we have said that we expect our 2019 adjusted EPS to be essentially flat operationally compared with last year due to the Lyrica LOE, we believe a look at our pipeline will help bring our expected post-Lyrica growth drivers into clearer focus. Since the beginning of 2019, we have already received five approvals. EU approvals for Zirabev, a biosimilar to Avastin, for treatment of multiple forms of advanced or metastatic cancer. And for Vizimpro, for locally advanced or metastatic non-small cell lung cancer in adults. In the US, we received FDA approval for Trasimera, a biosimilar to Herceptin, for the treatment of certain forms of breast and gastric cancer. And for Ibrans, for the previously underserved male breast cancer population. The Ibrans line extension marks the first time a Pfizer medicine has received an expanded indication based on real-world evidence. And in Japan, we received approval for Tafamidis for the treatment of ATTR cardiomyopathy. As you can see in this next slide, we have a diverse range of assets spanning from Phase II through registration, and they cut across each of our areas of focus. Overall, We are thrilled with the depth and breadth of our pipeline, as we are not overly reliant on a single pipeline opportunity. As you know, we announced our up to 15 in 5 cohort almost two years ago. I'm pleased to share that we are making good progress, despite experiencing some attrition, which is to be expected. Let me touch on just a few of the recent and upcoming milestones. I'll start with oncology. Data from our Javelin renal 101 trial showed that the combination of Baventio and Enlyta significantly extended median PFS by more than five months compared with SUTENT as a first-line treatment for patients with advanced renal cell carcinoma. We have filed this data with the FDA with a PDUFA date in June. With K-truda plus Enlita having been approved earlier this month, Bavencio will become the second Enlita combination available to patients with advanced RCC. We are preparing to submit our extended ARCHES data in hormone-sensitive prostate cancer in the coming months. And in 2020, we expect to have data from a Phase III EMBARQ trial studying Xtandi for high-risk hormone-sensitive prostate cancer, as well as from two Phase III trials evaluating IBRANS in early-stage breast cancer. We recently presented data from Phase 2 study of our 20-valent pneumococcal conjugate vaccine candidate for adults aged 18 years and older. We are now in Phase 3, and if the data is supportive, we expect to file by the end of 2020. We also expect Phase 2 data from the infant studies later this year. Our Phase III C. difficile vaccine study is now fully enrolled, with pivotal data expected next year. In inflammation and immunology, we expect our first Phase III data redoubts in May for our JAK1 inhibitor in atopic dermatitis, as well as additional redoubts in the second half of the year. Our JAK3 inhibitor for moderate to severe alopecia areata, which started a phase 2b3 trial in December, have also received breakthrough therapy designation, and the pivotal redoubt is expected in the second half of 2021. In internal medicine, on April 18, we announced the results of the long-term osteoarthritis study for tenizumab. As we stated in the press release, we are analyzing these findings in the context of the recent phase three results as we assess potential next steps for this medicine. We plan to review the totality of data from our clinical development program for Tanizumab with regulatory authorities. While we are very focused on continuing to advance our Up to 15 in 5 cohort, I also want to provide an update on some of the exciting areas in earlier stages of development that we are pursuing. These areas combine novel science and significant unmet medical needs. You can see several areas on the chart, but today I will highlight three from the rare diseases space. Earlier this month, along with our partner Sangamo Therapeutics, Pfizer announced interim data from a Phase I-II study indicating that SB525 was generally well-related and demonstrated a dose-dependent increase in factor VIII levels across the four dosage cohorts, in hemophilia A patients. Based on these results, the safety monitoring committee recommended cohort expansion at the high dose. In March, Pfizer acquired a 15% equity interest in Vivet Therapeutics, a privately held company dedicated to developing gene therapy treatments for inherited liver disorders. Pfizer and Vivet will collaborate on the development of VTX801, Vivet's proprietary candidate for the treatment of Wilson disease. At the upcoming PPMD annual conference in June, we expect to report data on our investigational mini-dystrophin gene therapy candidate for Ducene muscular dystrophy. We will continue to explore both internal and external opportunities for the next generation of breakthroughs. At Pfizer, we are keenly aware that the breakthroughs coming out of our pipeline won't mean anything if people can't afford them. That's why we continue to work with policymakers, payers, providers, and other participants in the healthcare system to find solutions to patients' unfortability. If you haven't already seen it, I would encourage you to read my testimony from the February 26th Senate Finance Committee hearing on affordable access to medicines. It outlines four proposals that we believe will drive meaningful reductions in costs for patients. In summary, Pfizer is off to a very good start in 2019. We deliver strong financial performance while reaching millions of people around the world with our medicines and vaccines. 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 a higher and more sustained revenue growth profile. 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. And now, I will turn it over to Frank to provide details on the quarter and our outlook for 2019.

Thanks, Albert. Good day, everyone. As always, the charts I'm reviewing today are included in our webcast. Now, moving on to the financials. First quarter 2019 revenues were approximately $13.1 billion, which reflects operational growth of $664 million, or 5%, and the unfavorable impact of foreign exchange of $453 million, or 4%. Our biopharmaceuticals group business recorded 7% operational revenue growth in the first quarter, driven primarily by Eliquis and Celjans globally, Ibrance primarily in international markets, and Prevnar 13 in emerging markets in the U.S., all of which were partially offset by declines in our hospital and rare disease businesses. Revenues for our Upjohn business in the first quarter increased 1% operationally, primarily due to 25% operational growth in emerging markets, driven by strong volume-driven operational growth in China, primarily from Lipitor, Norvask, and Celebrex, partially offset by a 9% operational decline in developed markets, primarily driven by lower revenues for Viagra and Upjohn's authorized generic for Viagra in the U.S. due to increased generic competition, Lyrica, primarily due to lower volumes in the U.S., from wholesale or destocking in advance of anticipated generic competition beginning June 30th and in developed Europe from continued generic competition. And Greenstone, Upjohn's authorized generic subsidiary, primarily due to industry-wide pricing challenges in the U.S. Revenues of our consumer health care business declined 2% operationally, reflecting an 8% decline in the U.S., partially offset by 4% operational growth in international markets. In the first quarter, we recorded gap earnings per share of 68 cents, a 9-cent increase compared to the year-ago quarter, which was primarily due to the favorable impact of higher revenues in the first quarter of 2019 compared to last year, lower purchase accounting adjustments, fewer shares outstanding, which were partially offset by foreign exchange, higher asset impairment charges, and higher net losses on the early retirement of certain outstanding debt securities. Adjusted diluted EPS for the first quarter was $0.85 versus $0.75 in the year-ago quarter. The increase was primarily due to higher revenues, fewer shares outstanding, which are partially offset by the impact of foreign exchange compared to the year-ago quarter. Finally, diluted weighted average shares outstanding declined by 307 million shares versus the year-ago quarter, primarily due to our share repurchase activity in 2018, as well as our first quarter 2019 share repurchases, which totaled $8.9 billion and included our $6.8 billion accelerated share repurchase agreement executed in February. This was partially offset by dilution related to share-based employee compensation programs. As I mentioned earlier, foreign exchange negatively impacted first quarter 2019 revenues by approximately 453 million and positively impacted adjusted cost of sales, adjusted SMA expenses, and adjusted R&D expenses in the aggregate by 315 million. As a result, foreign exchange had a two cents per share negative impact on adjusted diluted EPS compared to the year-ago quarter. Moving on to 2019 financial guidance. We reaffirmed our 2019 Financial Guidance for Revenues. Two items to note. Our financial guidance continues to assume that the age-based recommendation for Prevna 13 and adults is maintained by the ACIP when they vote in late June of 2019, and our guidance continues to reflect expected headwinds in China due to pricing reform, which is now being implemented. We increased guidance for adjusted other income by 100 million, primarily due to milestone income recorded in the first quarter of 2019. As a result, we increased the midpoint of our adjusted diluted EPS guidance range by one cent to an updated range of 283 to 293. This is the net impact of a three cents per share operational increase, primarily due to the aforementioned adjusted other income and some smaller favorable adjustments within our other guidance ranges. partially offset by a $0.02 per share impact due to unfavorable changes in foreign exchange rates since mid-January 2019. Moving on to key takeaways, we delivered strong first quarter financial results with 5% operational revenue growth and 13% adjusted diluted EPS growth compared to the year-ago quarter. We raised our 2019 financial guidance range for adjusted diluted EPS by $0.01 reflecting a $0.03 operational increase, partially offset by a $0.02 unfavorable change in foreign exchange rates since mid-January of 2019. We accomplished multiple product and pipeline milestones since our previous quarterly update, and we returned $10.9 billion to shareholders in the first quarter through a combination of share repurchases and dividends. Finally, we remain committed to delivering attractive shareholder returns in 2019 and beyond. Now I'll turn it back to Chuck.

Thank you, Frank and Albert, for your prepared remarks. At this point, we'd like to move to our Q&A session, please, operator.

If you would like to ask a question, please press star, then the number one on your telephone keypads. Your first question comes from Tim Anderson from Wolf Research.

Thank you. A couple of questions, please. On your 20-valent Prevnar test, follow-on. I'm hoping you can talk about when you expect that to move into pediatrics. It's your largest product, Prevnar 13. It's a race between you and Merck to come up with a new and improved version of Prevnar 13. You guys are the incumbent, yet you're not yet in Phase 3 NPs, and Merck is. And I'm wondering if that potentially foretells that there's some sort of formulation for problems with your product in PEDS. So asking for assurances that there aren't. Second question is on I-Brants and just the longer-term international opportunity. If you look at major cancer drug precedents in the past by other companies, lots of times those products sell more outside the U.S. eventually than they do in the U.S. Wondering if that could happen here with I-Brants and the CDK416 class because that's not how it's being modeled? Or have there been, you know, too many price concessions made such that that's not really achievable? Thank you.

Tim, thank you very much. Both excellent questions. I will ask Michael to address the question on R20 vellum compared to 15 vellum from Merck. And then Angela will answer the question about eyebrows. Mike?

Yes, thank you. We are very pleased with our 20-valent pneumonexcineration vaccine that covers the 13 serotypes of Prevna 13 plus seven new ones. These seven new ones were carefully selected to make sure we have a broad coverage of emerging invasive pneumococcal disease strains associated with high case fatality rates and antibiotic resistance in some cases combined with meningitis. We communicated our adult data at the ECMID conference recently, which showed a compelling profile, which also, of course, was linked to the breakthrough designation by FDA. We are moving with good and robust pace forward in the pediatric settings. As you know, in the pediatric settings, we have multiple immunization as well as a boost, as is the current regimen for use of conjugate vaccines, which is different from the adult trials that are fast as it's only one immunization. We look forward to read out from the infant trial mid of this year in a phase two proof of concept study and pending review of those data sets. We look forward to interaction with regulatory agency and SWIFT moving forward into a potential pivot to start. We're very pleased with the formulation. It was very well tolerated thus far, and think that we have included all experiences from decades of pneumococcal work into our plan.

And I would like also to remind that we have a very strong patent portfolio on Prevna. Angela, would you like to address the question with Ibram, please?

Thank you. Our iBrands revenue growth continues to be very strong as XUS. And you heard Albert mention in his opening remarks that currently we're growing at 107% in Q1 of 2019. We believe this growth to be sustainable as we see that there is still significant room to grow in the CDK class as well as our own market share. Just as an example, in the EU5, the CDK class is currently 35%. of all first-line new patient starts, while we have 86% iBrands class share. In Japan, as an example, the CDK class is only 21% first-line new patient starts and 100% of the iBrands class share. So while we're continuing to build our Japan and EU business, we are also intensely focused on our launches in the emerging markets. So far, we have seen 122% operational growth year-on-year in the emerging markets, and led by double-digit growth that we're seeing in Argentina, India, Saudi Arabia, as an example. We have launches coming up, both in Brazil and China, which we're very excited about, and we expect these to be very strong contributors to our 2019 growth trajectories. So in view of the three V phases of growth for iBrands, the first being the U.S., which is where we began with our first indication, now in our international launches, which are moving beyond the developed markets to the emerging markets, and then the anticipation of our adjuvant indications to come with iBrands, we continue to be extremely optimistic and feel very positive about the growth trajectory of iBrands.

Great. Thanks, Angela. Next question, please, Operator.

Your next question comes from Vamil Devon from Credit Suisse.

Great. Thanks for taking my question. So first on Xtendi, the sales there were a little lighter than we thought. And I'm just wondering if there's any one-time items. The prescription trends also seemed a little lower last quarter than what we were seeing in the past. So comments there. And then just maybe your outlook for that product longer term. I know you have the expanded label and new indications coming. So just so you could frame how you see that longer term. And then second, on the DMD data you mentioned coming in June, I think it's interesting, a lot of focus on that, even though it's pretty early data. Maybe if you could just sort of help sort of frame expectations around that in terms of what we'll actually see, you know, what should we be expecting going into it, just so people are sort of have appropriate expectations given it is such early data.

Thanks. Thank you very much, Vamil. Anzal, I think you can cover the extended question, and then John, if you can please – discuss the DMD data on Zoom.

Thank you. Well, we've seen very strong prescriber adoption of Xtandi across all of our indications. I think that this demonstrates the confidence that prescribers have with Xtandi. Year on year, urologists have prescribed, prescribing has grown 45%, and oncology prescribing has grown 20%. We're also pleased with the uptake of Xtandi in non-metastatic CRPC. This is our PROSPER trial. Even though this was launched just eight months ago, its market share is already equivalent to our metastatic indication, which was launched seven years ago. And this market share is more than double that of Erleada in non-metastatic CRPC. We have yet to realize the full potential of PROSPER because the impact of patient accumulation and the longer days of therapy are still to come. And just as a reminder, the days of therapy for the PROSPER trial is 18 months. This quarter, as you say, the U.S. net revenue did lag behind total patient demand, but this was due to some gross-to-net adjustments, some inventory differences, and our free drug program. but we continue to believe in the strong growth potential of all of our indications, and we look forward to our indications from both the ARCHES and the EMBARQ trials, which will continue to drive growth through expansion into new patient segments and offer longer days of therapy. So we need to stay the course with our strategies, and we believe the impact from PROSPER, as well as our new indications, will drive future growth, change the standard of care, and meet high patient unmet needs.

Thanks. Hi, Vamil. So thanks for the question about our DMD program. So Albert obviously touched on this in his prepared remarks. And, you know, just to emphasize again, we are going to be presenting data from our mini-dystrophin DMD gene therapy candidate at the PPMD meeting in Orlando, which is at the end of June. For our DMD program, the first patient was dosed with an infusion of the minidistrophin gene therapy in March of 2018. In total, six patients have been treated in two dose groups, 1E14 and 3E14 dose regimens. Per the trial protocol, muscle biopsies were to be taken at baseline, two months post-treatment, and 12 months post-treatment. And to the extent that that biopsy data is available and mature, it will be presented at PPMD. We also intend to present an update on the safety profile of this therapy at PPMD. And we're excited to present the data and obviously particularly to continue to work with the DMD community for a disease that is so devastating for so many boys with this condition.

Thank you, John. It's a devastating disease, and we all hope that the solution that we are working, and others, but the solution that we are working will be really transformational. Next question.

Your next question comes from Chris Schott from J.P. Morgan.

Great. Thanks very much. Just two bigger picture questions. I guess the first one with the progress you've been seeing on the pipeline, can you just update us in terms of where you see business development fitting into the longer-term view and strategy for the company? I guess specifically, I think you've been clear that larger deals are off the table for now, but when we think about bolt-ons, what type of size of deal could that encompass, and what are the latest priorities in terms of commercial-stage assets versus clinical assets, etc.? ? And my second question with the Upjohn division, do you believe it would be possible to eventually separate and spin this division from the rest of Pfizer? And if so, what are the factors and kind of data points we need to be watching that would make that type of separation something that would be possible over time? Thank you.

With the business development, I will ask John to comment. You have heard our comments that we plan to invest significantly in business development. It's a little bit different from the way that we plan to do it right now. Before, we were targeting revenues now or soon. Right now, the focus is how to, and because this is what we needed at the time. Now, our growth trajectory, I think, organically, is going to be robust post-2020. So, what we are looking for it is to enhance even further our pipeline. So as regards the direction and how we are selecting clinical or preclinical, John, can you please make a comment? John has the responsibility of managing this strategic area for us.

All right. Thanks, Albert, and thanks, Chris, for that question. So I won't repeat what Albert has already said about the reorientation of our focus of BBD from revenue now soon opportunities to really strengthening our pipeline with clinical stage assets. I think, you know, if you were to look into the future, I think you'll see us continue to be very active in business development. But I think with our focus generally on earlier to mid-stage opportunities where, you know, clinical risk may be higher as data is less mature. But we believe that the opportunity for value creation is greater. And the risk, importantly, of operational disruption to the pipeline, the internal pipeline, which is obviously maturing, we believe very nicely, is going to be lower. You know, certainly in terms of, you know, what size we consider to be a bolt-on, generally we don't comment specifically on size. You know, I think you would say that assets, you know, that are in the range of, you know, a few billion dollars we would consider to be bolt-on acquisitions and to really complement our pipeline. So we are very excited about the opportunities that we have, and that's something that particularly we're going to be focused on over the months ahead.

Thank you, John. And maybe I can provide some color to your question about AppZone. It's a good question, and I received a lot this question, and I understand the reasons. Right now, as I said, nothing has changed other than AppZone performed very well in the first quarter. Always, I said that our focus, it is to make sure that we stand up this business in a way that will operate effectively. And effectively means that in a very new, lean construct, with management relocated in China, where most of the opportunities are, as evident from the first quarter, but also where most of the challenges will come, as we know that there are some reforms that the Chinese government are taking into this business. So right now, I'm very, very pleased with the way that the whole thing is evolving. If we think that we could separate down the road, yes, it is a possibility, but this is not what it is in my mind right now. First, we need to make sure that we have a strong standalone business, so we are working to make sure that operates up zone fully as a subsidiary within a company.

Great. Thank you, Albert and John. Next question, please, Office Operator.

Your next question comes from Jeff Meacham from Barclays.

Morning, everyone. Thanks for the question. Mike or Albert, just wanted to see if you had any additional color on the recent tenazumab long-term data, just in particular the RPOA rates. And I know you're awaiting FDA feedback, but would you view the totality of the data so far, or the unmet need is still warranting a filing at this point? And then another one on BD somewhat, so on the gene therapy front, You guys are obviously progressing a number of programs, hemophilia, DMD. There's been a lot of BD activity in this area recently. So the question is, has the decision to buy versus build or partner changed for Pfizer over time? It did seem like post the bamboo deal, you guys have a working platform that really could add multiple indications quickly. I just wasn't sure what the strategy is there. Thank you. Right.

I will ask Michael and John to comment on Tanezumab. So, John, why don't you start, and then maybe Michael can give a little bit of the scientific information.

Yeah, so, look, thanks for the question, Jeff. Obviously, we've, you know, released, you know, fairly significant commentary on the study in our press release. I wouldn't, you know, comment on that. But I think, you know, let me just say for Tanezumab, we're continuing to analyze the clinical profile based on the ongoing Phase III development program in both OA and chronic lower back pain. That includes, in totality, five phase three studies in nearly 7,000 patients. And we plan to review the totality of the data with regulatory authorities, and we'll assess potential next steps for Tenezumab. And as we engage with regulators, we'll be in a position to provide an update in the coming months.

That was very well summarized, John. And, of course, it's a very large data set from these recent phase three and previous phase three So it's a real opportunity to put together the totality of data together with our partner, Lilly, and have a discussion with regulatory agencies about that data set and the pain landscape.

Thank you. Thank you, Michael. And then maybe I can give you an answer to your question about gene therapy. Yes, as you said, gene therapy is an area of significant focus for us. And this is an area that we started much earlier. And our strategy was to combine our clinical expertise in certain therapeutic areas together with biotech expertise as they were developing specific projects. And very early we realized that in this category, the bottleneck is going to be manufacturing. This is why Pfizer embarked into significant investments to build a platform in manufacturing, which is progressing very, very well. As we look at the future, we plan to do both. to grow our platform organically through projects that we are developing and inorganically through the licensing and partnerships that we are going to make. And actually, the last partnership that we announced was in the gene therapy field for the Wilson disease, which is a liver disorder. We believe, actually, that exactly because of our track record of having successful partnerships, but also because we have built a significant manufacturing capability, we will become a partner of choice for biotechs that they will see that the combination will unlock value for them.

Great. Thank you for those responses. Can we move on to the next question, please? Thank you.

Your next question comes from Andrew Baum from Citi.

Thank you. A couple of questions, please. Firstly, you referenced the pending ACIP review for Prevna 13. Given the replacement serotype drift risk that we've seen because of pediatric vaccination, I know that your numbers and guidance include no change to that recommendation. What's your level of confidence, and if high, which seems to be exactly why it is high, given the meeting has been scheduled to discuss this? And then second, in reference to Eloquist, Could you talk to what you see as the likely impact on realized pricing and volumes for eloquent sales within your Medicare book of business, assuming rebate reform takes place as the administration seems to be pushing for at the beginning of 2020? Many thanks.

All right. Why don't you, Angela, answer the ACIP question?

So our adult PCV13 vaccination program has been extremely effective. And it's difficult for me to speculate on the ACIP vote because that's still coming up in June. But I do want to emphasize that Pfizer strongly supports the continuation of the current adult vaccination program. This is because there are actually important serotypes, such as serotype 3 and serotype 19A, that still have not reached acceptable protection levels. So keeping the current recommendation will prevent numerous individual cases of pneumonia, hospitalizations, and other outpatient treatments. Direct vaccination is important because there are also underserved populations still in our country where the disease risk is high. And just to give you a couple of examples, those that are living in rural communities have 50% less coverage than those that live in suburban areas. Or there is a 24-point gap among the low socioeconomic adults. I think you've also seen through the recent news reports the importance of direct vaccination for adults as well as for public health. And we also are looking forward to the filing of our next generation pneumococcal vaccine where we received FDA breakthrough designation. We expect to file this by the end of 2020, and so it underscores the importance of an uninterrupted adult vaccination program.

Thank you. Andrew, you asked also about Eliquis and how we think this will perform in the Medicare population, particularly given price and volumes. And first of all, I would say that Eliquis had a phenomenal performance, I think. I'm thinking highly about the profile of this product, but 36% growth is really something that make us feel very proud. And actually in the U.S., the growth was even stronger, 38%. But the U.S., it's part of the business, right? So it is a very, very well diversified geographical brand. And I think that the pricing pressures the growth is coming predominantly, those 38%, from volume. And all our strategies, it is how to make sure that the diagnosis rates are more accurate and people and physicians understand the profile of the product so that they can make the right choices when they choose to prescribe a medicine like that. So given that everything is the predominant growth, it is volume, I think very good about the growth prospects of this product going forward.

Thanks, Albert and Angela. Can we move to our next question, please?

Your next question comes from Umar Rafat from Evercore.

Hi. Thanks so much for taking my questions. I wanted to focus on two broad topics. First, on Ibrandt's adjuvant, can you quantify for us how large an opportunity you think that is? And given the significance of it, I have to ask, is there an interim this summer? And secondly, on DMD gene therapy, my question is, do you think you have a best-in-class asset? And I ask partially because I don't see this asset listed in your 15 blockbusters by 2022, which should theoretically be a very realistic possibility, even if the pivotal were to start in early 2020. So I just wanted to reconcile both of those. Thank you.

Thank you. Anzala, I think you can deal with the eye prints question. the market, the potential. And also, let me say that on the studies, yes, there is an interim analysis, as with all studies. But the studies are designed to come to full completion. So we expect that the studies will be completed. And we expect that this completion will happen next year. although it is event-driven, so we need to see how the events will evolve. But Angela, let's speak about the commercial opportunity, and then, John, maybe you can give the clarification about DMD, because what we have in 15 and 5, it was not the gene therapy molecule. Please.

Sure. So we have the two Phase III studies ongoing in the high-risk early breast cancer population. The first is the Penelope, which enrolled patients with high-risk early breast cancer previously treated with the neoadjuvant therapy. And then we have PALACE, which enrolled patients with high-risk early breast cancer stage 2 and 3. We're optimistic about both of these studies because of the ability to meet an unmet need, but also to your question more directly, if successful, we will have the ability from both of these programs to double the number of patients that are eligible for IBRAMS.

Yeah, and thanks for the question about DMD again. You know, obviously the 15 and 5 or up to 15 and 5 portfolio reflected the portfolio that we had at that time. You know, and plainly one of the sort of good things in our industry is that the portfolio is never static. And so, you know, I think, you know, as we begin to see data read out from our DMD gene therapy program, the profile of all of that medicine will become, you know, clear to us and to clinicians and to, importantly, to patients. So we would really see this having the potential to be an additional complement to that portfolio that we described last year. So I think it's obviously premature for anybody to describe the relative profile of respective or other comparative gene therapy assets. The data is still emerging. It's still in relatively small patient numbers. And obviously for us and other players in this field, you know, we will see the totality of data as it emerges over the months and years ahead. But we feel cautiously optimistic about, you know, that program. As I mentioned in my comments earlier on, we look forward to presenting some clinical data from that later on this year.

All right. Thank you, John and Angela, for the background. Next question, please.

Your next question comes from Louise Chen from Canthanter, Fitzgerald.

I don't think we can hear you if you're asking a question. Maybe you're on mute.

Hold on. Unmute your phone. Can you hear me okay now?

Yes. Very well.

Okay. Sorry about that. Okay. So thanks for taking my questions. I had a few here. So the first question I had was on today's map. Just curious how the recent data – impacts your thinking with respect to the CLBP and cancer pain indications? And then secondly, on tefamidus, how do you expect the initial launch to go if you do get approval this year? What's your anticipation for adoption, payer coverage, physician and patient awareness? And then last question is on your business development comments. Just curious if you have any interest in primary care or are you more focused on specialized medicines? Thank you.

Thank you. John, what about Tanizumab?

Yeah, thanks for the question, Luis. I mean, I think we've probably covered this, you know, mostly in our comments earlier on. So we obviously have, you know, issued, you know, fairly detailed press releases as each of our Phase 3 studies, you know, have read out. And I think, you know, what we would just say overall is we're going to look at the totality of the data from all of our Phase 3 studies. We have, you know, around about 7,000 patients' worth of data We're still in the process of analyzing the clinical profile and understanding its potential value across different indications. Our next step is obviously most importantly going to be to discuss that data with regulators, and we'll be in a better position to be able to provide you with an update once we've done so.

Thank you. Angela, very exciting news for tefamidis potential long. So tell us.

Yes. Well, we are very excited about tefamidis, and that's because it's a transformative therapy. for ATTR-CM. Today, it treats a fatal and a rare disease where there are no therapies and no alternatives, but it also addresses a large burden on the healthcare system because of the complications and the hospitalizations that arise from this disease. We do see this, though, as a rare disease, so approximately 100,000 patients in the U.S., but as you know, today it is severely underdiagnosed. We estimate approximately a less than 1% diagnosis rate because of their lack of treatment and the use of invasive heart biopsies to drive the diagnosis. So as you can see, diagnosis is going to be key to growing this market. At launch, therefore, we're going to be focused on creating suspicion of this disease by cardiologists and patients through educating them around the signs and symptoms of cardiomyopathy, We also need to increase the utilization of non-invasive methods, such as scintigraphy versus a heart biopsy for diagnosis. So as you can see, this will all take time because we need to educate both physicians and patients on these red flag symptoms. We need to drive the utilization of scintigraphy, and we also need to advocate for the changes in treatment guidelines, which will help to drive both diagnosis and treatment. But as Pfizer, we are confident about our capability to build this market because we have a track record of success in creating new markets. And just to bring up an example from Zalkori, you may recall that at the time of launch of Zalkori, the diagnosis rate of the elk mutation was only 1%, but today it is 80% to 90%. So tefamidus has excellent data. It has a compelling patient benefit. Pfizer has deep expertise and a commercial footprint in cardiology. So we look forward to bringing all of these capabilities to bear in launching this important medication to the patients who need it.

Thank you, Angela. Maybe I can make some comments about your question, Louise, about if we would be interested to also in-license primary care potential candidates and medicines. And the answer is, of course, yes. Let me be clear and specific what we mean. We have specific criteria what we are interested in licensing in, so it's not just a blind check that we have given to people, go and license things. But those criteria involve that the potential medicines need to be breakthroughs, it's to be significant science that can create significant improvement in current standards of care, and they need to be within the areas of expertise of Pfizer so that we can add value to it. It's just to go only that we're in licensing, but we can add value. And we have six areas of expertise right now, but they are all, from that aspect, from my perspective, are treated equally. Those are areas that we know we have the best science in the world, that they can make fewer mistakes as we are selecting products. And this is where we have the scientific expertise to develop potential in licensing assets in the best possible way, because the development path plays a key role in unlocking the value of a molecule. And primary care is definitely one of the areas of significant expertise of us from the long way that goes way back, but also in the current days as we are having some of the best scientific programs running in metabolic diseases and other primary care conditions in our research centers. So the answer is yes, and the criteria that we are going to implement, I hope I made them clear. Great. Thank you, Albert. Next question, please.

Your next question comes from Jason Gerberry from Bank of America, Merrill Lynch.

Hey, good morning. Thanks for taking my questions. I guess just firstly, coming back to the tefamidus launch, can you give us a sense of what you view as maybe the best analogs for driving this diagnosis and treatment rate above this 1% level? I guess on the one hand, it looks like there's a largely an educational element to this with a lot of these patients basically sitting in the cardiologist's office just not diagnosed. But you also have a drug that's pretty easy to dose with no monitoring. So I'm just kind of curious if there are any analogs that you guys have thought about. I wouldn't think that Zalcori would be the greatest analog, but correct me if I'm wrong. And then secondly, on DMD gene therapy, it sounds like you haven't dosed any patients at the intermediate dose. I was curious if sort of the rationale for having an intermediate dose? Was that more of a safety consideration or just seeing the above normal expression levels achieved with a Sarepta program at a lower dose than your high dose was the decision ultimately to just have the optionality around a lower dose? Thanks.

Thank you. Angela, why don't you deal again with the Tafamidis question? There is a lot of interest on this product, and I understand why.

Yeah, sure.

Okay.

So actually, we do think that Zalcori is a great analog for what we see coming up for diagnosis in photophamidase and cardiomyopathy. You know, today, this is a disease where the symptoms and the signs and symptoms are, you know, easily, I guess, it could be confused with heart failure. So I think the ability for us to be able to find diagnostic approaches that will help us to really identify and to isolate who specifically the cardiomyopathy patients are going to be really important. I think that there are some symptomatic attributes that we plan to be educating around at the time of launch, but really what we need is the ability to leverage technology such as scintigraphy as an alternative to what exists today, which is a heart biopsy, which is extremely invasive. And I think that the ability to use scintigraphy will allow us to more readily diagnose these patients. I think the qualitative attributes, the symptoms will allow us to create suspicion around what the right pool of patients might be, but the definitive diagnosis really needs to come with scintigraphy. There are 15,000 synctography machines within cardiology offices today and 32 centers of excellence. So I think that this effort around education and awareness building is going to be key to both bring patients to the doctor's offices, but also to highlight the importance of these symptoms to prescribers and then to eventually diagnose and to treat. So as we said, I think we have deep expertise and capabilities in doing this, but that you can imagine with a disease that is so undiagnosed and up to now has had no therapeutic options, this is going to take time for us to really educate and to bring the full benefit of tefamidus to bear.

Thank you, Angela. And Michael, please, if you can comment on dosing strategy with the DMD development program, and maybe you can provide any color you would like about this breakthrough medicine.

Thank you very much. Yeah, you know, we worked with our Bamboo colleagues in carefully designing this AV9 vector that contains muscle-relevant specific promoter for expression of the transgene. And the protocol was designed intentionally based on our experience of many gene therapy programs to allow some flexibility, which was the basis for dosing at 1E to the to 14, and 3 to the 14 to gain experience across a reasonable dose range in what will be the expression of the transgene, the trollability, and clinical performance for young boys that, as Albert alluded to earlier, we're aiming to have a transformative outcome. Now, we look forward to share data at the PPPMD meeting in Orlando this late June. We think it is a good meeting for that purpose. It's one of the largest Duchenne Myceliodystrophy Gardening, where both key scientists attend and patient representative. As you know, these type of devastating rare disease, you work very closely with the leading scientists and patient groups. So we look forward to be there and share data set, as Jon alluded to earlier.

Thank you very much, Mike. Great. Thank you for that background also. Next question, please.

Your next question comes from Alex Arfei. from BMO Capital Markets.

Good morning and thank you. A couple of follow-up questions on tefamidus. Congratulations on the approval in Japan. It was faster than we expected. We focus a lot on the U.S. market, but could you also comment on the ex-U.S. opportunity for tefamidus? And following up on the diagnosis rate commentary, my understanding was that you were also working on blood tests to make diagnosis even easier. Could you give us an update on those efforts as well as your potential launch readiness in case of earlier approval in the U.S.? Thank you.

Thank you, Alex. Ansel, again, you have the ex-U.S. opportunities. Right. And on the testing.

Right. So, yes, with the Japan launch was very recent. And I think that it, you know, I think that the opportunity there sets us up well for for the kind of launches that we expect to see around the world. As you say, it's not just the U.S., it's Japan, it's also rest of world. In terms of rest of world, I think the filings have have been submitted, and I'm unable to comment on those for now because we're still awaiting for commentary from the regulatory agencies. But I think that my general comment about tefamidus is really one that I mentioned earlier, which is the critical aspect of this is diagnosis. It really is a rare disease. It is severely underdiagnosed today because of the lack of options. And so critical to our ability to drive tefamidase growth anywhere in the world is the ability for us to be able to find the patients and then be able to screen them and to be able to diagnose them and then send them on to treatment. So I see that these trends are pretty consistent wherever we are around the world.

Michael, as a great physician that you are as well. Can you please comment a little bit on the diagnosis opportunities for this?

Yeah, I want just to punctuate that the growing availability of skin t-graphy, technetium-based, makes it increasingly easy to get that diagnosed after suspicion often raised by clinical symptoms and echocardiograms. We're also in parallel looking at potential future blood markers. But right now, I think there should be no really hindrance to fast and easy diagnosis based on clinical sign, scintigraphy. And in addition, we have made work on diagnostic algorithms, including artificial intelligence, to be able to advise on typical algorithms that makes a heart cardiomyopathy more likely to be TTR-related than unrelated.

It's amazing how much work is happening right now in this field, and particularly how AI also can help identify potential people that potentially could suffer from this disease. And we had multiple discussions with payers as well, and a lot of them, they're having high interest to exploit this opportunity because... When we say one person is diagnosed, we don't mean that the 99% they are just untreated. Usually all of these patients are presented with heart failure symptoms, and they are treated for the wrong reason. And they are going, of course, it doesn't work because the doctor haven't identified that this is the real cause of their cardiac issues, and then they treat it and fail and treat it and fail, and then eventually there is a fatal outcome. event. So payers are highly interested to diagnose this disease, I think. But as Angela said, this is the key, and we know how to do it very well, but it will take time to pick up these diagnosis rates, but we will do it.

Great. Thanks for that context as well. Next question, please.

Your next question comes from Noven Jacob from UBS.

Hi, Naveen Jacob, UBS. Thanks for taking the questions, a few if I may. Interesting slide on your treatments beyond up to 15 and 5. Two in particular stood out, the oral GLP-1 and the HER2 ADCs. Could you provide any context for how far along those assets are, particularly the oral GLP-1? Are those Phase II assets, Phase I assets? Any color would be helpful. And then I'll add to the questions on Tefamidis. With regards to the pair discussions, are most of those related to traditional contracts, or are you exploring outcomes-based contracting? And if so, to what extent is that – do you think outcomes-based contracting will be a broad mandate, or is it more of a – more of an experimental type of situation. And then, finally, if you have any color on resolution of the sterile injectable manufacturing issues, is the resolution still expected for end of 2019? Thank you very much.

Thank you very much. Michael, let's start with you and with the beyond 15 and 5.

Yes. I really appreciate your interest in the beyond 15 and 5, which, of course, cover the next period beyond the 22 of the up to 15 and 5. So for the oral GLIP, you know, that's been an area where we have deployed some unique chemistry, and I'm very pleased to say that we are right now concluding a phase 1B trial in diabetic patients and have seen some very encouraging performance of that drug related to control of diabetes and body weight. And we look forward to share those, and we'll swiftly move into a larger phase 2 trial for diabetes. To the best of our knowledge, this is the only true small molecule that have come this far and shown this promise in PK and pharmacodynamic favorable effects. The next generation HER2-ADC is based on site-directed conjugation of a tubulin inhibitor and has been going through dose escalation and showed promising signs of activity We continue to optimize those and expect to go into phase two expansion cohort relatively soon, including potential combination with P2-1 agents.

Thank you, Michael. Let me give you a very brief comment on Tafamidis, and then I will ask Frank to take the manufacturing question. On Tafamidis, as you know, breakthroughs requires, breakthrough approach is also commercial. And we believe that the FAMID is also a suitable product, given that we have strong clinical outcomes data for value-based agreements. So we are discussing with multiple payers. It's too early to comment. because also we are in the middle of the year and usually contact starts from the beginning of the year. Nevertheless, there is a significant interest in discussions between ourselves and payers on agreements that will really value the value that product brings to patients. So, Frank, manufacturing.

On the manufacturing, yes, we do plan on having significant improvements implemented by the end of 2019, but please also know Along the way, we've already implemented numerous preventive and corrective actions, and we've seen a nice improvement in our overall supply to date.

And I want to say Frank is always a man of a few words and a lot of actions. I'm very, very pleased with the way that under Frank's leadership and the new leadership of BGS, we are progressing on addressing the issues with manufacturing.

Thank you. Thank you. Can we take our next question, please, operator?

Your next question comes from Seamus Fernandez from Guggenheim.

Thanks very much for the question. So just a couple of quick ones. Can you just help us understand the number that you guys printed on Eucresa this quarter as well as the sales for Zeldrand? What were the main impacts on both of those products? And then just a second question. If you guys wouldn't mind, again, this is a bit related to Zell Jans. Can you help us understand how differentiated the products in the dermatology phase three clinical trials, whether it be in alopecia or in atopic dermatitis, how differentiated those are from Zell Jans and perhaps from some of the other programs in development? Thanks so much.

Right. Angela, why don't you hit quickly the Eucharist and Zaljan's question, and then we can leave time to Michael, who is very passionate about the ZAC portfolio, to speak about it.

Okay, great. So let me start with some comments on Zaljan. So as you can see, Zaljan's had a 34% operational growth globally. In the U.S., Zaljan's grew 18%, but actually the Scripps grew 37%. So if you look at some of the Q1 effects, some of that is due to higher rebating, unfavorable channel mix, and reauthorizations for patients that change insurance. And this is pretty typical of what we see every quarter. So I think we're really encouraged by the strong volume growth that we continue to see in the U.S., and around the world for Zaljans, and it's all three of our indications. Strong growth from RA, exciting new launches for both PSA and UC, and we're beginning to see some very, very strong market shares for UC as well coming out of the gate. For Eucrisa specifically, the number of Eucrisa patients in the U.S. for the first quarter was actually up more than 80,000 patients. So that's a 55% increase compared to where we were last year at this time. However, you do see revenues down slightly in Q1, and this is because despite the increased demand, we were negatively impacted by higher rebates in the U.S. So we need to continue to work on improving our formulary position and and continuing to drive growth of Eucrisa in segments both in the U.S. as well as ex-U.S.

Michael. Yeah, so thank you for the interest in how we plan to grow the dermatology sector here. So for the topic dermatitis, where we are in phase three and with a JAK1 inhibitor, and the first readout of the JADE trial program is coming now in May, and the second is coming this fall. We selected the JAK1 because we think a JAK1 selective has the advantage that it covers certain cytokines that are part of the disease pathophysiology, IL-4, IL-13, similar as dupilumab. But on top of that, we cover IL-31 that's related to itch, a phenomenon that bothers atopic dermatitis patients. And we saw a very profound and early relief of that in Phase II. that we're obviously looking to confirm in a phase three trial. For alopecia, it's a different type of underlying mechanism where we deal with cytotoxic cells destroying the hair follicles and the JAK3 selective inhibitor in what we thought would be the best. And that was what we nicely recorded as a very effective agent in our phase two trial. And it also has a very clean profile. most well-tolerated agent we have seen so far. So we look forward certainly to the phase 2b pivotal study. And we also started a vitiligo study with this GX3 inhibitor.

Great.

Thank you very much, Michael.

Next question, please.

Your next question comes from David Reisinger from Morgan Stanley.

Yes, thanks very much. So first, I'm hoping that you can talk about your expectations for organic revenue growth prospects for your Upjohn division relative to the 1% that you printed in the first quarter. I just don't have a sense for how we should think about that, whether that will grow, or since you put Lyrica in there, that it's about to decline. So if you could help us understand the growth prospects for Upjohn, that would be helpful. Second, with respect to your patents that could potentially be blocking Merck's 15-valent launch in coming years, could you please talk about those patents and your level of conviction that Merck cannot launch? And then just a final tidbit, what are your planned biosimilar launches in the U.S. in the second half of this year? Thank you.

So let me start with Abjon, and obviously Doug can cover the patent situation, and then Angela, you can speak a little bit about the biosimilars. Our expectations for Abjon this year, of course, is going to be a decline because they will be seriously affected by the loss of patent of Lyrica that will happen in the middle of the year. And that will affect their growth also next year because they will have to face – full-year LOE, which will be next year, with only half-year LOE, which is this year. Following that, I see Amazon as very stable to low single-digit growth on the top line and much higher on the bottom line and leverage bottom line growth. But, of course, that will be post-2020 period where the impact of Lyrica will be absorbed. Doug?

So we were pleased that the Patent Trial and Appeal Board denied Merck's IPR petitions on two of our U.S. patents covering compositions of pneumococcal vaccines. These patents stand as valid and will not expire until 2026. We believe that these patents and others in our portfolio present freedom to operate issues for Merck in its development of a 15-valent pneumococcal vaccine.

Very clear.

And then biosimilars. So we will have three biosimilar launches in 2019. Trastuzumab was already launched in the EU in the first quarter, and we look forward to the launch of Tras in Japan in the third quarter. Rituximab will also be launched in Japan, and that will be in the fourth quarter. And then finally, Bevacuzumab will be launched in both the U.S. and Japan in the fourth quarter. We've seen some nice uptake in the supportive oncology portfolio that we launched late last year, and we look forward to the oncology biosimilar portfolio contributing to our growth.

Thank you, Angela. Thank you. And, Operator, if we could take our last question, please.

The final question comes from Steve Scala from Cowan. Thank you. This is actually Kathy Minor on for Steve. Just a question on Bivencio, please. We had been expecting Bivencio Phase III data in second-line bladder this year. Is this still possible? And secondly, is there any chance for an interim on the Javelin Lung 100 this year? And what is the PD-L1 cutoff for that trial? Thank you.

Two questions, Michael, for you.

Yeah, so thank you for showing interest in our Bivensio portfolio. So we expect late this year or possibly early next year, as you know, these are event-driven trials that we will conclude the bladder. It's actually a first-line trial, so it's quite an interesting trial where we have Bivensio as maintenance therapy of the chemo. We'll also have PD-L1 high expression trial in line, which, you know, if positive, could be the second PDX available for monotherapy in PD-L1 high in line. And then we have a gastric first line, also post-chemo patients in maintenance for Bavencio. So quite nice remaining cohort, and we look forward to review the data coming out of this. Thank you.

Thank you, Michael. And I think this concludes the Q&A session. Just I wanted to say that I found this session very productive. I'm very pleased that the vast majority of the questions, with minus one or two maybe, were focused on our pipeline and were focused on Tafamidis' new launch products. And I don't remember any other session, but Frank didn't receive any final questions. which is what happened today. I think this is exactly how a science-based company, when the results of the quarter are good, should be discussed in an earnings call. I'm very pleased about that. We continue to believe that Pfizer's position in the market is strong. We have great products. We have a strong R&D and marketing skills, prudent capital allocation, and perhaps most important, a clear path to sustainable growth. Thank you very much. And have a great day.

Ladies and gentlemen, this concludes Pfizer's first quarter 2019 earnings conference call. You may now disconnect.