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EDITED TRANSCRIPT

PFE.N - Q1 2022 Pfizer Inc Earnings Call

EVENT DATE/TIME: MAY 03, 2022 / 2:00PM GMT

OVERVIEW:

PFE reported 1Q22 YoverY revenue growth of 82%. Expects 2022 total Co. revenue to be $98-102b and adjusted diluted EPS to be $6.25-6.45.

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MAY 03, 2022 / 2:00PM, PFE.N - Q1 2022 Pfizer Inc Earnings Call

C O R P O R A T E P A R T I C I P A N T S

Aamir Malik Pfizer Inc. - Executive VP & Chief Business Innovation Officer

Albert Bourla Pfizer Inc. - Chairman of the Board & CEO

Angela Hwang Pfizer Inc. - Group President of Biopharmaceuticals Group

Christopher J. Stevo Pfizer Inc. - Senior VP & Chief IR Officer

Frank D'Amelio Pfizer Inc. - Chief Financial Officer, Executive VP

Mikael Dolsten Pfizer Inc. - Chief Scientific Officer and President of Worldwide Research, Development & Medical William Pao Pfizer Inc. - Executive VP & Chief Development Officer

C O N F E R E N C E C A L L P A R T I C I P A N T S

Alexandria Hammond BofA Securities, Research Division - Associate

Andrew Simon Baum Citigroup Inc., Research Division - Global Head of Healthcare Research and MD

Carter Lewis Gould Barclays Bank PLC, Research Division - Senior Analyst

Christopher Thomas Schott JPMorgan Chase & Co, Research Division - Senior Analyst

Colin Nigel Bristow UBS Investment Bank, Research Division - Analyst

Evan David Seigerman BMO Capital Markets Equity Research - MD & Senior BioPharma Research Analyst

Kerry Ann Holford Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

Louise Alesandra Chen Cantor Fitzgerald & Co., Research Division - Senior Research Analyst & MD

Mohit Bansal Wells Fargo Securities, LLC, Research Division - Senior Equity Analyst

Robyn Kay Shelton Karnauskas Truist Securities, Inc., Research Division - Research Analyst

Stephen Michael Scala Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

Terence C. Flynn Morgan Stanley, Research Division - Equity Analyst

Timothy Minton Anderson Wolfe Research, LLC - MD of Equity Research

Vamil Kishore Divan Mizuho Securities USA LLC, Research Division - MD

P R E S E N T A T I O N

Operator

Good day, everyone, and welcome to Pfizer's First Quarter 2022 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Chris Stevo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Christopher J. Stevo - Pfizer Inc. - Senior VP & Chief IR Officer

Thank you, operator. Good morning. Welcome to Pfizer's first quarter earnings call. I'm joined today by Dr. Albert Bourla, our Chairman and CEO; Frank D'Amelio, our CFO; and Mikael Dolsten, President of Worldwide Research and Development and Medical. Joining us for the Q&A session, we will also have Angela Hwang, Group President, Pfizer Biopharmaceuticals Group; Aamir Malik, our Chief Business and Innovation Officer; Doug Lankler, our General Counsel; and William Pao, our new Chief Development Officer.

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MAY 03, 2022 / 2:00PM, PFE.N - Q1 2022 Pfizer Inc Earnings Call

The materials for this call and other earnings-related materials are on the Investor Relations section of pfizer.com. Please see our forward-looking statements disclaimer on Slide 3 and additional information regarding these statements and our non-GAAP financial measures is available in our earnings release and in our SEC Forms 10-K and 10-Q under Risk Factors and Forward-Looking Statements. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Albert Bourla - Pfizer Inc. - Chairman of the Board & CEO

Thank you, Chris, and good morning, everyone. Pfizer had a solid start to the year. Revenues were up 82% operationally compared with the first quarter of 2021. Key growth drivers for the quarter included COMIRNATY, PAXLOVID, Eliquis, VYNDAQEL/VYNDAMAX globally, our Prevnar family of vaccines and our oncology biosimilars portfolio in the U.S. Overall, we reached an estimated 468 million patients around the world only in 1 quarter with our innovative medicines and vaccines, which represent a 140% increase from the prior year quarter, and it is a testament to our purpose, breakthroughs that change patients' lives.

We continue to supply the world with COMIRNATY, which remains a critical tool in helping prevent severe illness, hospitalization and deaths from COVID-19. Today, we have shipped nearly 3.4 billion doses of our vaccine to 179 countries. COMIRNATY is the most utilized mRNA vaccine in the markets in which we operate and that report market share. Pfizer's cumulative share of doses administered in these markets has increased in fact from 52% that used to be on January 1, beginning of the year 2022, to 62% on May 1, 2022. Just a few months, 10 points. In developed markets, our share has increased from 59% to 67% over that same period of time.

We also have had a strong start to the year with regard to regulatory milestones, including the Emergency Use Authorization from the U.S. FDA and Conditional Market Authorization from EMA for our 12- to 15-year old booster dose. We had an EUA from the FDA for a second booster fourth dose in patients 50 years of age and older and 12 years of age and older who are immunocompromised. And we had an extension to a 12-month frozen shelf-life label 12 months from both the FDA and the EMA. Our ambition is to eventually achieve a 24-month shelf life, which would help alleviate concerns that some governments may have about having expiring doses in stock.

In addition to the U.S. and the EU, we now have authorizations for the 5 to 11 age group in 44 other markets around the world. In addition, we have recently released new results from a Phase 2/3 clinical trial, demonstrating that the 10-microgram booster dose of our vaccine in healthy children 5 to 11 years of age increases geometric mean neutralizing antibody titer -- geometric mean neutralizing antibody titers, wild-type and Omicron variants. Based on this data, last week, we submitted an application to the FDA for an EUA of a 10-microgram booster dose for children in this age group, and we look forward to filing in other jurisdictions in the near future.

We also expect to share data on our ongoing study in children who are 6 months to under 5 years of age in the next few weeks. This study is looking at the safety and efficacy of 3 doses of the vaccine in this age group, and we hope to submit an application for an EUA soon, pending the results of the data readout, of course. Last, we stand ready to support boosting authorized populations today as well as in the fall ahead of the traditional flu season. Independent real-world evidence from several countries have demonstrated that our booster doses improve protection that may have waned from the primary vaccination or since the first booster.

Our market research shows that greater than 96% of health care provider respondents in key markets like the U.S. and the EU5 largest markets, continue to recommend a third dose booster to their patients. We also have seen an upward trend in uptake of a third dose booster in various developed markets. In these same markets that I referred previously, 74% of people who have received the initial 2-dose regimen reported that they have all already received third dose booster. And the remaining 13% of the respondents said that they are very likely to receive a booster. We believe this is an encouraging leading indicator for the potential uptake of a fourth dose. We also continue to evaluate potential next-generation vaccines, including variant vaccines to provide broad coverage for the fall, and we look forward to evaluating and sharing these data in the coming months.

We are also delivering on our commitments for PAXLOVID, which is already having a profoundly positive impact on the lives of patients around the world. Through the end of March, we produced more than 6 million treatment courses, all of which have been shipped shortly after they were produced. Because the financial calendar quarter for international markets ends in February and the majority of these 6 million treatments were

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MAY 03, 2022 / 2:00PM, PFE.N - Q1 2022 Pfizer Inc Earnings Call

produced in March, only a small portion of these shipments were recorded in our first quarter revenues. In fact, as of today, we have shipped approximately 8 million treatment courses.

Our manufacturing ramp-up is progressing as planned, and we are on track to produce 24 million courses in the second quarter for a total of 30 million in the first half of the year. All of these quantities have already been allocated to existing orders. In addition, we remain on track to produce 120 million courses for the full year, as previously stated. To date, PAXLOVID has received regulatory approvals for temporary authorization for use with certain populations in more than 60 countries. We continue to have discussions with governments and regulatory agencies around the world about bringing this potential breakthrough treatment to additional markets.

Some countries that they have experienced recent outbreaks have come back to us to request additional treatment courses, which we are responding to with urgency. Others are taking steps to expand access. For example, the Italian government recently announced an expansion of prescribing into primary care. We believe this shift from having only specialists prescribe PAXLOVID will help ensure more patients get access at the right time.

In the U.K. PAXLOVID will now be included in the National Panoramic Study, which we expect will increase access and collect further data regarding how the therapy works in a market where the majority of the adult population is vaccinated. This is important because, to date, the U.K. has restricted PAXLOVID use to a very limited populace. And this study could lead the government to open up access to a much broader population closer to the authorized populations.

In Canada, we expect increasing supply and the lifting of COVID-19 restrictions will enable greater access for patients across the country. Quebec and Ontario, which represent the 2 largest provinces and are home to more than 60% of Canada's population, have expanded distribution to eligible pharmacies, allowed pharmacists to prescribe and started a comprehensive direct-to-consumer and social media campaign to ensure all eligible patients are aware of the availability of PAXLOVID.

Here in the U.S., we have seen PAXLOVID utilization grow nearly 10-fold in recent weeks. PAXLOVID was administered to more than 79,000 patients in the U.S. the week ending April 22, 2022, up from approximately 8,000 patients for the week ending February 25, 2022. We will continue to work with the U.S. government and health care providers to appropriately drive even higher utilization. And based on data from IQVIA Xponent, PAXLOVID market share relative to molnupiravir in the retail long-term care and mail order channels grew from 44% in the week ending January 28, 2022, to almost 90% in the week ending April 22, 2022. Together, these channels represent an estimated 50% of PAXLOVID utilization in the U.S.

The number of locations in the U.S. with PAXLOVID supply continues to increase with more than 33,000 sites live as of today. This is more than a fourfold increase since late February, leading to easier patient access. The U.S. government declared its intention to double the size again in the coming weeks and making PAXLOVID available to any pharmacy who wishes to stock.

In addition, 77% of recent U.S. COVID-19 cases occurred within 5 miles of the closest retail point of care, which is up from only 23% since February. We expect this trend to continue to increase, driven by the U.S. government's Test to Treat initiative. For example, nearly 1,100 more Test to Treat locations have been added since the beginning of April on. Today, there are more than 2,200 locations of Test to Treat open. Overall, we expect the recent trends to expand access as well as inquiries received from governments as the virus mutates and cause spikes in infections around the world to result in increased orders in the coming months as governments continue to help protect their citizens who are at high risk of severe disease, hospitalization and death in response to emerging variants and continuing outbreaks.

Now I will turn to our business development strategy. We leverage business development opportunities to advance our business strategies and objectives. We recently announced positive top line results from a year-long Phase 3 trial of etrasimod in moderately to severely active ulcerative colitis. These results underscore Pfizer's ability to identify strong business development targets as this potentially best-in-class drug candidate came to us via our recent acquisition of Arena. We look forward to presenting this data and filing for approval later this year.

First quarter, we discussed how the strength of our balance sheet and cash flows gives us the ability to pursue new business development opportunities that, if successful, could add at least $25 billion of risk-adjusted revenues to our 2030 top line expectations. Our planned acquisition of ReViral is the first deal to be counted towards this ambition. ReViral is a privately-held clinical stage biopharmaceutical company focused on

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MAY 03, 2022 / 2:00PM, PFE.N - Q1 2022 Pfizer Inc Earnings Call

discovering, developing and commercializing novel antiviral therapeutics that target respiratory syncytial virus. Basically, they target RSV. We believe annual revenue from these programs, if successful, has the potential to reach or exceed $1.5 billion. This is peak revenues.

We also are excited about the prospect of adding several experienced virologists to our team. Building relationship within the growing biotech ecosystem remains a priority for Pfizer. We continue to pursue new creative ways of partnering with biotechs to increase our access to cutting-edge innovation and to bring our resources to help drive for patients. We believe our scientific expertise, our end-to-end development and manufacturing capabilities makes us an extremely attractive partner. I see, for example, through our relationship with BioNTech, and we are confident that we have the financial resources to support business development opportunities that will complement and enhance our internal R&D efforts and add capacity and flexibility to support our growing clinical portfolio.

Next, I would like to discuss some of our recent ESG highlights. First, we announced in February the results of Pfizer's third annual pay equity study in which a recognized compensation expert confirmed equitable pay practices for employees at Pfizer. The results indicated that Pfizer compensates female colleagues at a level that it is greater than 99% of what male colleagues are paid across the globe. Additionally, in the U.S., minorities are paid at dollar-for-dollar parity of what non-minorities are paid.

When you look at Pfizer's median pay for women globally, it is in high 102.3% for the median pay of males. However, when you look at the median pay for minorities in the U.S. workforce, it is 85.5% of the median pay for our non-minorities. This median rate pay gap is an area we are actively addressing and that we expect to narrow.

Second, I want to reiterate that Pfizer stands with a unified global community in opposition to Russia's invasion to Ukraine. While Pfizer is maintaining our supply of medicine to Russians, as we should, we will be donating all profits of our Russian subsidiary to causes that provide direct humanitarian support to the people of Ukraine. Additionally, we will no longer initiate new clinical trials in Russia and will stop recruiting new patients in our ongoing clinical trials in the country.

Pfizer will work with the FDA and other regulators to transition all ongoing clinical trials to alternative sites outside Russia. And consistent with our commitment to putting patients first, we will continue providing needed medicines to the patients already enrolled in clinical trials in Russia. Lastly, we are ceasing all future investments with local suppliers intended to build manufacturing capacity in Russia.

Third, further demonstrating our commitment to equitable access, we have made the decision that for as long as the pandemic lasts, Pfizer will not profit from sales of our COVID-19 treatment to the world's poorest countries. In March, Pfizer announced an agreement with UNICEF to supply up to 4 million treatment courses of PAXLOVID to 95 low- and middle-income countries. Under the agreement, all low and lower middle-income countries will be offered the treatment courses at a not-for-profit price, while upper middle-income countries will pay a price defined in Pfizer's tiered pricing approach.

Lastly, I'm pleased to share that Pfizer continues to be recognized as an ethical patient-focused company that calls itself in its employees and its business partners to high standards. In March, Pfizer was recognized as one of the world's most ethical companies by Ethisphere, a global leader in defining and advancing the standards of ethical business practices. And just last week, and we are so proud about it, for the first time ever, Pfizer ranked first among big pharma companies in the PatientView Global Survey in 2021. This ranking is based on feedback from more than 2,000 patient organizations and associations worldwide. As recently as 2018, we were ranked fifth, and we have steadily climbed in the rankings ever since but we are so proud that we are #1 right now.

Now I would like to welcome 2 new members of Pfizer's Executive Leadership Team. Dr. William Pao joined us on March 21 as Executive Vice President and Chief Development Officer. Throughout his 25-year career as an oncologist and scientist, William has amassed extensive clinical and deep scientific expertise that make him the ideal partner to continue our pursuit in breakthrough medicines and vaccines for the benefit of patients and society.

Just yesterday, David Denton joined us as Chief Financial Officer and Executive Vice President. Dave brings with him more than 25 years of finance and operational expertise, including more than 20 years in the health care sector. As a result, he brings to Pfizer a unique perspective on the role

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