Pfizer, Inc.

across many markets, reflecting the recent wave of BA.4.5 and resulting increases in hospitalizations, ICU admissions, and deaths. For example, over the month from June 24th to July 24th, average daily deaths in Europe almost doubled from a low of 0.6 per 1 million people to 1.15 per 1 million. In Japan, they almost tripled. from 0.12 per 1 million people to 0.34 per 1 million people. And in Australia, they increased from 178 per 1 million people to 259 per 1 million. While we have less precise numbers on market sales outside the U.S., our internal estimates indicate that we saw an estimated 116 percent increase in usage between June 24 and July 15 across international developed markets, where we have supply agreements. So we believe there is a significant opportunity to continue the growth outside the U.S. as physicians become more knowledgeable about PaxClovid and treat appropriate patients. While COVID-19 remains top of mind for many people, we are seeing encouraging performance with some of our other innovative products as well, and I wanted to take a moment to highlight two of them. We are very pleased with the success of our U.S. launch of Prevnar20 for adults. Second quarter U.S. revenues for our Prevnar family of vaccines for adults were up 337 percent operationally, compared with the prior year quarter to 431 million, with Prevnar20 representing more than three-quarters of the total adult revenue. The great majority of U.S. healthcare networks IDNs and retailers who have made formula decisions have chosen Prevnar 20 alone as the higher-valency new worker vaccine of choice to help protect adults. This has resulted in Prevnar 20 having a 97 percent market share. This is also the first time that has been a routine recommendation for Prevnar for people in the 19 to 64 age group with underlying medical conditions. This group has an increased risk for contracting pneumococcal pneumonia and, unfortunately, has historically been the hardest to activate. Lastly, we believe the simplicity of Predar2N being the only vaccine that can help protect patients with one dose in one visit is preferable to competitors' offerings. Quarterly revenues for eye brands grew 1% in the U.S. compared with the same quarter last year. despite a continued increase in the proportion of patients accessing IBRAS through a system program. This marked the first quarterly revenue uptick in the U.S. since the fourth quarter of 2020, which is an encouraging sign. Total volume in the U.S. increased 3% compared with the year-ago quarter. Before I turn it over to Michael, I want to touch on some actions we have taken recently to further demonstrate our commitment to environmental, social, and governance ESG principles. We recently announced an accord for a healthier world. Under this accord, we are offering all of our patented high-quality products that are available in the U.S. or the U. on a not-for-profit basis for 1.2 billion people living in 45 lower-income countries. This includes all future Pfizer products as well. I'm thrilled to say that the first product under this accord has arrived in Rwanda with more on the way. Pfizer experts also held a session with 100 Rwandan medical professionals to discuss efficacy, safety, and dosing of this milestone. This is just the first step of accord implementation, but an important one that will impact many lives. We also recently announced our commitment to achieve the net zero standard across our value chain by year 2040. This is 10 years ahead of a new voluntary external standard. This includes aiming to reduce our company emissions by 95% and value chain emissions by 90% with the next roughly 18 years. In response to the war in Ukraine, we are donating the equivalent of all profits from sales in Russia to causes that provide direct humanitarian support to the people of Ukraine. Our first down payment of 5 million is going to aid global and local NGOs to support humanitarian relief and response efforts. And we will continue to channel these profits to the Ukrainian people until peace is achieved. I'm also very proud to share with you that in a recently published report from MSCI, Pfizer's annual ESG rating increased three notches compared with June 2021, going from B to A. This is just the latest external recognition we have received for our commitment to sustainable and ethical business practices. I couldn't be prouder for our colleagues' commitment to good governance practices, quality, and integrity. With that, I will turn it over to Michael to update you on our R&D efforts. After Michael, Dave will provide financial details on the second quarter and our outlook for the remaining of 2022.

Thank you, Albert. I'd like to start by highlighting two recent leadership appointments. I've appointed Annalise Anderson to lead vaccine research and development, succeeding Katherine Jensen, who previously announced her retirement. With more than two decades of BioPharm R&D experience, Lisa most recently served as CSO for bacterial research and hospital. Over the last two years, she has led a team of infectious disease biologists that designed and delivered Paxlovid to an emergency use authorization. Under her leadership, we also advanced several bacterial vaccine programs into clinical development and approval. I've also named Charlotte Allerton CSO for anti-infective. A new research unit. Creating this new research unit allows us to expand our focus beyond medicines that typically are used in hospitals. Charlotte is an esteemed scientist who will broaden our antivirus strategies with additional efforts in antibacterial and antifungal science and medicines. Charlotte has been our head of medicine design, most notably co-leading the discovery and development of Paxlovid, and will continue in that role as well. I have had the privilege to work closely with Lisa and Charlotte for more than 10 years and have been continuously impressed by them as world-class scientists in their respective fields of expertise. Both have demonstrated good product-hunting skills and a sound business mindset. I'm looking forward to working with them in their new roles. Let's begin with COVID-19. The pandemic continues to evolve into a disease which is causing significant disease burden, including high rates of acute disease, medical care utilization, hospitalization, and death during the entire year. A growing number of patients affected by acute COVID infections are developing chronic disease and suffering from long COVID symptoms affecting multiple organs, such as the lung, heart, kidney, brain, and the vascular system. we have seen major waves of variants of concern emerge quickly, become dominant, then be superseded by the next variant. Omicron and its sub-lineages are the most antigenically distinct compared to prior variants of concern, more transmissible, and show evidence of partial immune escape from existing vaccines. As the composition of SARS-CoV-2 changes, it is essential we advance new approaches to extend the level of protection that Cominati originally conveyed. In a clinical trial, we evaluated the safety, controllability, and immunicity of mono- and bivalent Omicron BA.1 modified vaccines administered as a forced dose in more than 1,900 participants over age 55. We're also evaluating different doses of mono- and bivalent BA.1 in participants 18 to 55 years of age. While we saw promising responses to both mono and bivalent versions in the over 55 population, we moved forward with bivalent following guidance from regulators. The BA.1 vaccine candidate elicited a superior immune response for BA.1 compared to the current version of the vaccine. A zero response rate which exceeded non-inferiority and utilization activity, which increased substantially. The VA1 vaccine utilized wild type and Delta, similarly to the current version of the vaccine, suggesting that Omicron-modified version maintained response for the ancestrals and other viral variants. Based on these data and following guidance from regulators, we have completed regulatory submissions Europe, UK, and Canada for the 30-microgram bivalent vaccine in individuals 12 and older and plan submissions in other markets soon. The data also showed this vaccine candidate utilized Omicron BF4 and 5, though to a lesser extent than B1. This suggested a need to develop both a B1-modified vaccine and a BF4-5-modified vaccine. We studied BR45 monovalent and bivalent booster candidates in mice and found a substantial increase in utilization responses to all Omicron variants of concern. Neutralizing titers against BR45 increased 11-fold for the monovalent and 4.8-fold for the bivalent compared to monovalent BR1 vaccine. This data was shared at the recent FDA Advisory Committee meeting as a potential surrogate to help expedite development of a BF45 vaccine. We plan to submit the BF45 bivalent vaccine candidate for emergency use authorization in the U.S. in preparation for the fall booster campaign. To that, more rapidly, we've agreed with FDA that this submission will be based on safety and immunicity data generated in adults with an Omicron-modified BA.1 vaccine and supported by BA.4 or 5 bivalent-specific preclinical data and BA.4 or 5 bivalent chemistry manufacturing and controls data. This strategy is bolstered by previous experience, showing that overall responses have been similar between human clinical and mouse data our clinical experience with beta and omicron modified vaccine candidates, and by leveraging our mRNA platform and manufacturing experience for the current vaccine. To support future potential US licensure and global registrations, we plan to initiate a clinical study to evaluate the BF45 bivalent vaccine. The clinical study design is under discussion with FDA. We aspire to continue leading with the science and are working to identify vaccines that will help provide strong and durable protection as new SARS-CoV-2 variants emerge. We aim to deliver a next-generation COVID-19 vaccine that can provide durable antibody and T-cell immune protection against severe disease and hospitalization for at least one year. We plan to take a stepwise approach by designing and testing different candidates that engage multiple arms of the immune system. including antibodies and T-cells. First, yesterday we announced the start of a phase two study evaluating a bivalent mRNA vaccine candidate, which consists of RNA encoding novel enhanced pre-fusion spike proteins for the SARS-CoV-2 ancestral strain and an Omicron variant. The enhanced spike protein encoded from mRNA has been modified with the aim of increasing the magnitude and breadth of antibody neutralization response that could better protect against COVID-19. We project delivering key clinical data this fall. Second, we plan to initiate the proof of concept study with a potential pan-SARS-CoV-2 vaccine candidate by the end of the year. This combines the super-stabilized spike sequences with a T-cell-enhancing construct aiming to extend durability of protection against severe disease and new emerging SARS-CoV-2 viral variants. Now, turning to Paxlovid. Last month, we submitted a new drug application to US FDA seeking approval for the treatment of COVID-19 in both vaccinated and unvaccinated adults and pediatric patients 12 years weighing at least 40 kilograms and at high risk for progression to severe illness. We anticipate a PDUFA date in the first quarter of 2023. We plan to generate further data in those who are immunocompromised, hospitalized with severe COVID-19, and at increased risk for poor outcome due to the disease or who are pregnant. We also are considering multiple collaborative studies to evaluate potential treatment for long COVID. Finally, we're working with FDA to finalize a protocol to study patients who may be in need of re-treatment. According to CDC, a brief return of symptoms may be part of the natural history of SARS-CoV-2 infection in some people. We believe the occurrence of COVID-19 rebound is uncommon and not uniquely associated with any specific treatment. At this time, cases are being reported at a rate consistent with the epic HR trial. Turning now to flu. We know that currently available vaccines are not optimal in addressing the unmet need, as each year many people are infected, hospitalized, and die, resulting in tremendous public health and economic impact. In part, this is because the flu vaccine development cycle is inefficient, and even when the current seasonal vaccine strains match circulating strains well, they typically confer only 40 to 60 percent protection. Potential advantages of the mRNA platform include shortened timeline to enable a quicker response each season, improved strain matching, faster and more reliable manufacturing, and broader immune response from both antibody and T-cells, the latter needed particularly in older adults. Based on our experience with COVID-19, T-cell responses appear to be critical for the protection against severe disease and hospitalization in infectious viral disease. Here we show phase two T-cell data for our quadrivalent MOD mRNA flu vaccine candidates in subject 65 and older. We believe this is the first evidence of a flu vaccine candidate in using substantial responses for both CD4 and CD8 T cells. On the left, at day seven, the CD4 T cell response was more than two-fold for all four flu strains for our vaccine compared to a current high-dose vaccine now recommended in the U.S. for adults 65 and older. Over half the cohort receiving our vaccine candidate had a more than two-fold response. On the right, at day seven, the CD8 T cell response and responder rates were greater for all four strains for our vaccine candidate versus the comparator. Our belief is that these encouraging T cell responses, combined with higher seroconversion rates for flu A strains, which are the most predominant circulating strains and have pandemic potential, may translate into improved efficacy over current seasonal flu vaccines, particularly those 65 and older. Based on these data, we plan to initiate the phase three efficacy study this year. We are excited to share that new data on our oral glip1 receptor agonist, two abstract on twice daily danoglipron, and one on our once daily candidate known as 1532, have been accepted for the European Association for Study of Diabetes Conference in September. These investigational medicines were designed in-house by Pfizer's innovative chemistry and discovery teams. In a phase one study in adults with type 2 diabetes, after only six weeks of treatment, 1532 drug robustly reduced mean daily glucose to almost near normal levels. Participants also experienced weight loss of up to five kilograms compared with two kilograms for placebo. We believe this to be a potentially best-in-class profile across both injectables and orals. Similar changes in body weight were observed in participants with non-diabetic obesity. 1532 is characterized by favorable one-stay pharmacokinetics, low risk for drug-drug interaction, robust efficacy across multiple metabolic endpoints, and GLP-1 receptor agonist class-like tolerability, which overall encourage us to plan for a Phase II study to pick the winning candidate prior to a potential Phase III study start. These development programs may lead to potential indications in type 2 diabetes, obesity, NASH, and cardiovascular risk reduction in type 2 diabetes and obesity patients. Over the 12 past months, we have built a strong inflammation and immunology portfolio with diverse products to help address multiple drivers of disease and unmet need. Sibinco was approved for atopic dermatitis in adults and last week received priority review designation in U.S. for adolescents 12 to 18 years. We are nearing a regulatory submission for retracemod in ulcerative colitis. We have submitted regulatory application in U.S., Europe, and U.K. for ritlacitinib for alopecia areata and are awaiting acceptances. We also plan to start a phase three study of ritlacitinib in vitiligo this year. We are pleased to now share promising new updated data from our anti-interferon beta monoclonal antibody in specialized rheumatology. Patients with dermatomyositis show elevated type 1 interferon gene signature in blood, skin, and muscle, correlating with disease activity in skin. As we continue our development of this candidate, a potential breakthrough therapy for hard-to-treat dermatomyositis, which attacks skin and muscles, we believe it may have the ability to address a broader set of inflammatory autoimmune diseases, possibly including polymyositis and lupus. On our third quarter 2021 call, I shared data from our ongoing phase two dermatomyocytes study focused on skin inflammation and showing significant reduction in disease activity when compared with placebo in just three months of treatment. Now, both doses met the primary efficacy endpoint in skin predominant disease. The disease also manifests with progressively debilitating muscle weakness and fatigue. Early data suggests that in a small cohort of patients with muscle-predominant disease, our candidate resulted in numerically better efficacy score across all key muscle endpoints, including patient-reported outcomes after three weeks. We plan to submit the data for presentation once the study completes. Now, a promising update on L-vranatamab, our investigation of B-cell maturation antigen CD3 targeted by specific antibody. At ASCO, we present the data from a phase one trial in people with relapsed refractory multiple myeloma whose disease is refracted to at least one agent in each of the three major classes of medications approved for the disease. We saw a confirmed overall response rate of 64% and 35% of patients achieved stringent complete response or complete response. More than half who received prior BCMA-directed therapies such as antibody drug conjugate or chimeric antireceptor T cell therapy achieved a response. Responders' probability of being event-free at nine months was 77%. L-venatamab elicited a durable minimal residual disease or MRD negativity, meaning no disease was detected after treatment in all evaluable patients who experienced a complete response or stringent complete response. Molecular responses were durable as well, with 62% of those complete responded documented to have MRD negativity at more than six months, including two patients who were MRD negative beyond 18 months. Magnetism M1 results and emerging data from magnetism M3, which is studying triple-class refractory multiple myeloma, supports further development across a broader program with potential registration-enabling studies, Magnetism M5, in patients with double-class exposed multiple myeloma, and Magnetism M7 in newly diagnosed post-transplant patients with multiple myeloma. There is potential for deep and durable results that can be broadly accessible to patients due to off-the-shelf, subcutaneous, and convenient dosing. The efficacy and safety profile we've seen today in a challenging patient population support advancement into earlier lines of treatment. Finally, here is a snapshot of select milestones for this year, showing healthy progress in the pipeline. It was an important quarter for COVID execution, and we look forward to sharing complete readouts from anti-interference beta and the mod flu candidate for the end of the year. Thank you for your attention. Let me turn it over to Dave.

Thank you, Michael, and good morning, everyone. As this is my first call as CFO, I thought I would set the stage for the next chapter of Pfizer and our relentless focus on creating long-term shareholder value. Over the past few years, Pfizer's cash generation capabilities have expanded significantly, and the efficient deployment of this capital is more critical than ever. It's clear to me the company is uniquely positioned for both growth and at the same time enhancing financial returns. And as we look to the future of the company, we are focused on three primary areas to drive significant shareholder value. First and foremost is our continued emphasis and investment in science and innovation. We are investing internally and externally to create breakthrough medicines, deploying more than $50 billion in this area in the past three years alone. Our second priority is maintaining and growing Pfizer's dividend, paying out more than $25 billion to shareholders over this period. We recognize that our dividend represents an important component of returns for our investors. And finally, from time to time, we return capital to shareholders through value-enhancing share repurchases. Over the past three years, the company has allocated nearly $9 billion in this area. Clearly, maximizing shareholder value will be a major focus, and I believe that all three areas will contribute to our success. More recently and year-to-date, we deployed more than $12 billion in innovation, paid dividends of $4.5 billion, and we purchased $2 billion worth of our shares. This demonstrates an ongoing commitment to our robust capital deployment framework. WITH THAT, NOW LET ME BRIEFLY REVIEW OUR FINANCIAL RESULTS FOR THE QUARTER. I WILL CONFINE MY REMARKS LARGELY TO ADJUSTED AND OPERATIONAL GROWTH FIGURES. TURNING TO THE INCOME STATEMENTS, REVENUES INCREASED 53% OPERATIONALLY IN THE SECOND QUARTER OF 2022. THESE RESULTS WERE DRIVEN BY MOMENTUM IN PAXLOVID SALES, STRONG SALES OF THE COVID-19 VACCINE, AND UNDERLYING STRENGTH FROM A NUMBER OF OUR KEY PRODUCTS. Excluding Paxlovid and Comirnaty, BioPharma product revenues grew operationally by 2% compared to the prior year. Inline products, Zangens and Chantex, were impacted by labeling changes and a global pause in shipments, respectively. While iBrants continued to transition into a new COVID normal market environment. PC1, our contract manufacturing business, grew 89% operationally in the second quarter of 2021 and therefore faced a tough comparison versus last year, with PC1 declining by 25% operationally. And now bringing that all together, Pfizer's non-COVID-related revenues grew by 1% operationally in the second quarter. Adjusted cost of sales dollars grew more slowly than revenue, resulting in gross margin rate expansion of 570 basis points versus the second quarter of LY. This improvement in gross margin is largely due to the impact of higher margin Paxlovid sales, partially offset by higher COVID-19 vaccine sales, and the impact of a $450 million write-off of COVID-related inventory that had expired or is expected to expire. Given the unpredictable nature of the virus, we chose to manufacture and hold excess stock to ensure we can meet any global health demand for products if an extreme need were to arise. Adjusted SINA expenses in the second quarter grew by 7% operationally. The increase was primarily driven by spending for Paxlovid and Comirnaty, and higher healthcare reform fees. The 27% operational increase in adjusted R&D expense in Q2 was primarily driven by investments in multiple late-stage clinical programs, including programs to both prevent and treat COVID-19, and costs to develop recently acquired programs. The effective tax rate on adjusted income in the quarter of 15.4% declined by 170 basis points versus last year, driven by a favorable jurisdictional mix of earnings. And as a result, reported diluted earnings per share of $1.73 grew by 77%, while adjusted diluted earnings per share of $2.04 grew 92%, And on an operational basis, adjusted diluted earnings per share grew 100% in the quarter. Foreign exchange movements continued to dampen our results, negatively impacting revenues and adjusted earnings per share by 7% and $0.08 per share. So with that, let's move on to our 2022 guidance. Given our strong second quarter performance and our improving outlook for the year, we are increasing our operational expectations for both revenues and adjusted earnings per share. For the full year, we are increasing our operational revenue expectations by $2 billion and operational adjusted diluted earnings per share expectations by 24 cents. UNFORTUNATELY, GIVEN ADDITIONAL U.S. DOLLAR STRENGTHENING SINCE WE LAST UPDATED GUIDANCE IN EARLY MAY, FOREIGN EXCHANGE NEGATIVELY IMPACTS REVENUES BY APPROXIMATELY $2 BILLION, LEAVING OUR REPORTED REVENUE GUIDANCE RANGE UNCHANGED AT 98 TO $102 BILLION. THIS REPRESENTS AN OPERATIONAL GROWTH RATE OF 29% AT THE MIDPOINT COMPARED TO 2021, A 200 BASIS POINT IMPROVEMENT OVER PRIOR EXPECTATIONS. The improvement in our operational adjusted diluted earnings per share outlook of 24 cents is also negatively impacted by foreign exchange movements, compressing EPS by 19 cents. The net impact of these cross-currents allows the company to raise the low end of its adjusted earnings per share outlook by 5 cents to to $6.30 to $6.45 a share. This represents 65% operational growth at the midpoint compared to 2021. Regarding our COVID-19 related revenues, we continue to expect the vaccine revenue for the year to be approximately $32 billion, unchanged compared to the prior guidance provided on May 3rd. despite the impact of approximately $1 billion of incremental negative foreign exchange. For Paxlovid, we expect sales of approximately $22 billion, keeping the guidance unchanged, again, despite an incremental $300 million headwind due to FX. Our non-COVID related revenues are absorbing approximately $700 million of impact from negative foreign exchange. Now, given the seasonality that we expect, I'd also like to give you some color on the expected cadence of these COVID-related revenues across the second half. Based on current guidance for Comirnaty, we expect approximately 25% of second-half sales in Q3 and 75% of sales in Q4, driven by expected deliveries of Omicron vaccines ADAPTED VACCINES IN Q4, AGAIN, SUBJECT TO REGULATORY APPROVAL. CONVERSELY, FOR AXLOVID, WE EXPECT APPROXIMATELY 60% OF SALES IN Q3 AND 40% IN Q4. SO WITH THAT, LET ME GIVE YOU SOME DETAIL ON CHANGES IN OUR COST AND EXPENSE GUIDANCE. WE ARE DECREASING OUR EXPECTED ADJUSTED SINA SPEND BY $300 MILLION ACROSS THE RANGE TO 12.2 TO $13.2 BILLION. Additionally, we are also increasing our guidance for adjusted R&D expense by $500 million at the low end only, with the new range of $11.5 to $12 billion, reflecting incremental investments in multiple programs, including mRNA vaccine programs outside of COVID-19 and other programs. We are also slightly reducing our expected effective tax rate on adjusted income by 50 basis points to approximately 15.5%. 2022 guidance once again assumes no incremental share repurchases beyond the 2 billion of share repurchases that we completed in March of 2022. So in closing, it's an exciting time in the history of Pfizer. We believe that our strong financial performance in the quarter and our improving operational outlook for the year sets the stage for long-term shareholder value creation. And so with that, and now I'll turn it over to Chris and start the Q&A session. Thanks, Dave.