Pfizer, Inc.

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

Good morning, and thank you for joining us today to review Pfizer's fourth quarter and full year 2019 performance and 2020 financial guidance. I'm joined today by our CEO and Chairman, Albert Borla, Frank D'Amelio, our CFO, Michael Dolston, President of Worldwide Research and Development, Angela Wong, Group President, Pfizer Biopharmaceuticals Group, John Young, our Chief Business Officer, and Doug Lankler, General Counsel. The slides that will be presented on this call were posted to our website earlier this morning and are available at Pfizer.com forward slash investors. You'll see here that slide three covers our legal disclosures. Albert and Frank will now make prepared remarks, and then we will move to a question and answer session. With that, I'll now turn the call over to Albert Borla. Albert.

Thank you, Chuck, and good morning, everyone. This morning, I will speak about our performance for the year, the continued advancement of our pipeline and the steps we are taking to position Pfizer for accelerated growth following the expected separation of Abjun from Pfizer later this year. Frank will then provide details regarding our fourth quarter performance and our 2020 financial guidance. 2019 was a productive and transformational year for Pfizer, which we generated solid full-year financial results. These results were highlighted by exceptional 8% operational revenue growth for the year and 9% in the fourth quarter for our biopharma business, which will become the new Pfizer following the expected separation of Abzu. Once again, our biopharmaceutical group's outstanding growth was driven primarily by the continued strong performance from all our key growth drivers. These include Ibrans, Extandi, Eliquis, Zelzans, Vintagel... Among others, BioPharm also generated 14% operational growth in emerging markets in 2019. I would point out that BioPharm's 2019 growth came from volume increases, not pricing. In fact, pricing had a negative 2% impact in BioPharm's results. For full year 2019, global high-branch revenues increased 23% operationally to become a nearly $5 billion a year product. In the U.S., Ibram's realized robust growth and retained its strong leadership position in the CDK class with a nearly 90% share. Ibram's performance outside of the U.S. was also very strong. And we still see significant opportunities in countries where the use of CDK inhibitors has not yet reached the level seen in the U.S. Overall, Iberans is approved in more than 90 countries, is the number one prescribed CDK4-6 inhibitor globally, and has reached more than 250,000 patients. For example, Alliance revenues in the U.S. were up 20% for the full year, and when combined with our royalty income on ex-U.S. sales, totaled nearly $1.2 billion in 2019. Xtendi is the leading branded novel hormone therapy in an increasingly competitive but growing class, with 37% market share in total prescriptions. The robust year-over-year growth was due to continued uptake of the non-metastatic castration-resistant prostate cancer indication, as well as prescriber confidence and recognition of Xtendi's strong data across CRPC. With the recent launch of our extended indication of metastatic castration-sensitive prostate cancer in the U.S., EXTEND is now the first and only oral treatment approved by the FDA in three distinct types of prostate cancer. Eliquis continued to perform well. Pfizer's share in the global revenues was up 26% operationally to $4.2 billion. This growth was driven primarily by continued increased adoption in non-valvular atrial fibrillation, as well as oral anticoagulant market share gains. Eliquis is now the oral anticoagulant leader in 12 markets across the globe. Zeldzian's had a strong performance with global revenues increasing 29% operationally to $2.2 billion. We are very pleased with the continued positive uptake across all indications, rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis, and we continue to lose psoriatic arthritis and ulcerative colitis in new markets. Looking at our rare disease business, Vintico continues to ramp up nicely in the U.S. following the May 2019 approval and launch for the treatment of ATTR cardiomyopathy. Overall, this first-of-its-kind medicine contributed $473 million in revenue in 2019. Our disease awareness Efforts helped drive the diagnosis rate to 9% by the end of the fourth quarter, compared with 1% prior to launch. As of the end of 2019, more than 9,000 patients have been diagnosed, more than 5,500 patients had received a prescription for VinterCal, and more than 3,000 patients had received the drug. These numbers do not include approximately 100 patients who are still in the early access program. Global Prevnar 13 revenues were up 3% operationally to $5.8 billion. The U.S. CDC also published its updated recommendation for immunocompetent adults age 65 and older to cert clinical decision-making in the November Morbidity and Mortality Weekly Report, highlighting that a patient can cert the decision to vaccinate with PCV13 with a physician, physician's assistant, nurse practitioner, or pharmacist. Looking at our sterile injectables portfolio, our focus on manufacturing recovery is taking shape and beginning to have a positive impact on the top line in the U.S. We have made solid progress with remediation and modernization and expect continued improvement throughout 2020. Of note, while global revenue from our sterile injectables portfolio declined 1% operationally for the full year, it increased 5% operationally during the fourth quarter. Additionally, more than 80% of our injectables portfolio is in stock today, and we anticipate this percentage will continue to increase in 2020. Our global Barsimilas portfolio grew 22% operationally to $911 million for the full year. This was driven largely by 70% growth in the U.S., thanks to the launch of Retacrit and a gradual uptake of Inflectra. The growth in the U.S. was partially offset by decline in international markets, driven mainly by Inflectra. We expect an additional contribution from biosimilars in 2020 with a launch of free oncology monoclonal antibody biosimilars. Last week, we announced the launches of Zirabev and Ruxians in the U.S. market, and next month we expect to launch Trasimera. All three products will be available at a substantially discounted price compared with their originator products. Full-year revenues for our up-zone business were down 16% operationally to $10.2 billion. The key headwind during the year was the advent of generic competition on Lyrica in the US, which has partially offset by 7% operational growth in China. The growth in China was driven primarily by Viagra and Celebrans, as well as Lipitor in non-reimbursed channels, which constitute significant market share in China. We are making good progress with the pre-integration planning for Abjan's proposed combination with Milan, which remains on track for mid-2020. In December, we announced that former Pfizer chairman Ian Reid and current Pfizer director James Kiltz will join the Viatris board of directors upon completion of the transaction. We are also working closely with our counterparts of Milan on the CFO selection process. We expect to announce the appointments of both the CFO and the third director by the end of this quarter. We have great confidence in Viatris, which will combine Abzon's strong commercial capabilities and iconic brands with Milan's terrific pipeline. Turning now to R&D, we remain very pleased with the progress we are making with our pipeline. We are expecting key clinical readouts in 2020, several of which have the potential to make this an exciting year for patients hoping for new treatment options. We anticipate sharing data from up to 15 proof-of-concept readouts with contributions from all our therapeutic areas, as well as up to 10 pivotal study starts and five key pivotal study readouts. I will now highlight some of those expected events. We continue to expect our two event-driven IBRANS early breast cancer programs, Penelope B., and Pallas to read out in late 2020 and early 2021, respectively. If successful and following regulatory approval, these programs could double the number of patients eligible to benefit from IBRAS. The Phase II open-label single-arm ANCOR CRC study, evaluating the efficacy and safety of the combination of BRAFTOVI and MECTOVI and CETAXIMAB in patients with previously untreated BRAFV600E mutant metastatic colorectal cancer, is currently ongoing. Results from the study will be submitted for presentation at a medical congress in the second half of 2020. for Abracitinib, our investigational JAK1 inhibitor for the treatment of moderate to severe atopic dermatitis. We look forward to sharing top-line findings from the Phase III jade compare trial in the coming months. Pending successful conclusion of the core Phase III studies, regulatory submission in the U.S. is projected for the third quarter of 2020, with subsequent markets following later in the year. This study is designed to assess the efficacy and safety of abrocitinib or dupiluma placebo in adults on background medicated topical therapy with moderate to severe atopic dermatitis. The study also has a key secondary endpoint that it is designed to assess the effect on each severity of abrocitinib compared with dupiluma in adults with moderate to severe atopic dermatitis on background topical therapy. There are up to five proof-of-concept readouts expected in 2020 from our industry-leading immunokinase pipeline. Our hope is to advance several of these into phase three trials. These include TIK2, JAK1, with potential POC readouts for psoriatic arthritis and for topical formulation for psoriasis and atopic dermatitis. as well as an oral JAK3 tech for vitiligo and oral TIK2 for psoriasis. This is a great example of our unique strategy to purposefully match a molecule to a disease where we think it has the potential to make the most difference, as well as the formulation that we believe has the potential to treat milder forms of disease. Our gene therapy platform is advancing with promising phase 1-2 hemophilia A data that is expected to support a phase 3 start this year. This would be our second gene therapy pivotal study following the ongoing hemophilia B phase 3 study. In addition, our DMD gene therapy program is gathering additional robust patient data, building on the progress we shared at the Parent Project Muscular Dystrophy Conference last June. We are preparing for an expected POC in the first half of 2020, and the Phase III pivotal study starts in the second half of this year. We look forward to successfully completing the phase 3 studies for our investigational 20-valent pneumococcal conjugate vaccine candidate in adults and remain on track to submit the biologics license application to the FDA by the end of this year. Pfizer's candidate represents a potential significant advancement compared with a potential 15-valent. If successful in phase three and approved, the five additional serotypes may provide coverage against approximately 33% more strains that cause invasive pneumococcal disease in adults and 42% more strains causing the disease in infants in the United States. For our maternal vaccine for respiratory syngytial virus, RSV, we are preparing for an expected POC in the second quarter of 2020, followed by potentially swift progression to phase three. We look forward to sharing more updates on our pipeline during our upcoming investor day on March 31st. In summary, we finished 2019 with strong momentum and we look forward to continuing that momentum in 2020. During the year, we generated a solid financial performance, further advanced our strong R&D pipeline, and took bold actions to reshape Pfizer into an innovation powerhouse that will build on our legacy of delivering breakthroughs that change patients' lives. Now I will turn it over to Frank to provide details on the quarter and our outlook for the remainder of 2020. Frank.