Good day, everyone, and welcome to Pfizer’s Third 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 third quarter 2019 performance and updated 2019 financial guidance. I’m joined today by our CEO, Albert Bourla; Frank D’Amelio, our CFO; Mikael Dolsten, President of Worldwide Research and Development; Angela Hwang, Group President, Pfizer Biopharmaceuticals Group; John Young, our Chief Business Officer; and Doug Lankler, General Counsel.

Thank you, Chuck, and good morning, everyone. During my remarks, I will discuss our quarterly business performance, latest updates from our pipeline and our plans for Pfizer following the anticipated completion of the Upjohn-Mylan combination, which we continue to expect to care in meet 2020. During the quarter, we delivered a strong performance highlighted by 9% operational revenue growth in our Pfizer Biopharmaceuticals Group, which will be the business that remains at Pfizer following the anticipate closing of the Upjohn transaction. We also saw revenue impacted by two expected events, the July loss of exclusivity in the U.S. for Lyrica and the July 31 completion of the Consumer Healthcare joint venture transaction with GSK. For biopharmaceuticals, once again, these groups outstanding growth was driven primarily by strong performance from our key growth drivers. This include Ibrance, Xtandi, Xeljanz, Eliquis, Vyndaqel end Inlyta, as well as 15% operational growth in emerging markets including 42% operational growth in China. Our biopharmaceutical business in China generated higher revenues this quarter than the Upjohn business in the country. Our oncology business was particularly strong up 30% operationally compared with a year ago quarter. Global revenues for Ibrance were up 27% operationally in the quarter to $1.3 billion. We saw strong revenue growth in both U.S. and international markets. We believe the continued growth in the U.S. is the result of our efforts to target specific physicians who had not been prescribing CDK inhibitors or had prescribed them to only a small set of patients. For Xtandi, the alliance revenues in the U.S. grew 25% to $225 million. In August, the FDA granted Xtandi priority review designation for the treatment of men with metastatic hormone sensitive prostate cancer with a PDUFA date in December. If approved, this represents get another potential growth driver for the brand. Inlyta revenues increased 98% operationally to $139 million. This included 240% growth in the U.S. or Inlyta has benefited from recent FDA approvals for the combination of Inlyta plus BAVENCIO and Inlyta plus KEYTRUDA in first-line treatment of advanced renal cell carcinoma patients. Frank D’Amelio: Thanks, Albert. Good day everyone. The charts I’m reviewing today are available on our website. Now moving on to business performance. Our Biopharmaceuticals Group business recorded 9% operational revenue growth in the third quarter of 2019 driven primarily by Ibrance globally, which recorded revenues of nearly $1.3 billion and operational increase of 27%. This was composed of 48% operational growth in international markets and 18% growth in the U.S. Xeljanz globally up 40% operationally, primarily driven by 34% growth in the U.S. as well as 61% operational growth in international markets. Eliquis globally of 20% operationally, the hospital business up 9% operationally in emerging markets in the U.S., primarily driven by continued growth from anti-infective products in China in the November 2018 U.S. launch of Panzyga.

Thank you, Albert and Frank for the prepared comments. Operator, can we please move to the Q&A session.

Your first question comes from Chris Schott with JP Morgan.

Great, thanks very much for the questions. I guess just two here. First, I know you’re not giving 2020 guidance at this point, but relative to your initial 2020 comments made with Upjohn, maybe just give us any – just flavor in terms of business trends or any franchises that are performing ahead or behind maybe some of the initial expectations? And my second question was about kind of the next wave of pipeline opportunities. It – because it seems to me, when I hear the enthusiasm you have about that pipeline, that there is a bit of a disconnect between Street expectations and Pfizer expectations on the pipeline. So when you look at that portfolio, are there assets in particular where you see a particular – a gap relative to, I guess, what we’re thinking versus your expectations as we kind of focus in on some of these updates over the next few years? Thanks so much.

Well, thank you, Chris. Let me try to speak a little bit about your question on guidance of next year, and then I will ask also Frank to help me on that, and then we’ll ask Mikael Dolsten to speak about pipeline. Let me start with the 2020 guidance. We don’t give guidance up before our Board approves our operating plan. And this every year happens in the mid of December of 2000 – of every year. And usually, we do it in the next earnings call that happen in January. This year, in the mid of the year, in July, because of the transaction, we had to provide some financial targets for Upjohn. As a result, we felt that it’s going to be awkward if we do not give also some financial targets for the RemainCo in 2020. But of course, we did that with a lot of unknowns and with great distance from the year of 2020. So we were appropriately cautious, I would say. Since then, a lot of things happened and happened in the areas that wanted to see how things could perform. For example, we were not certain how the ACIP recommendation for Prevnar would affect the adult business. We were not certain how the label for Xeljanz – in the black box that we received, in the change in the label for Xeljanz, how that would affect the prescription habits of physicians. We were not sure how Ibrance effort that started in the beginning of this year to increase the market size rather than focus on increasing our own markets are offering, and – but have given very good results in the second quarter. We’ll continue as we go into the third quarter. We were not certain how the newly approved Inlyta compared to…

Thank you. Now from the financials, let’s go to things that are driving the financials, which is our – strength of our pipeline. So Mikael Dolsten, please go ahead.

Thank you, Albert. So let me say a few words. First, we have a large and strong pipeline with projects from Phase 1 through registration, and the uptick is contribution from all of our five therapeutic areas. And it is driven by multiple science franchises and not dependent on one or two vulnerable compounds. Number two, our R&D productivity have improved consistently over the last two years. Let me exemplify with our Phase 2 success rates have now been exceeding 40% for a number of years well above the benchmark. We estimate that earlier between 2018 and 2022, 25 to 30 approvals from 2018 to year-to-date, we’re already at 11. Within that approval wave, let me exemplify our focus on the 15 in five strategy to deliver blockbuster approvals. And within that cohort as you have seen, we have had really good progress. And both Phase 2 and Phase 3 success rates are high and robust in also this most valuable compound. Now I wanted to conclude and give you more of near-term opportunities for our pipeline. So between now and 2020, you may want to remember the metrics, 15 plus 10 plus 5 plus 5. 15 relates to 15 POC readouts, up to 15 POC readouts; 10 to – 10 Phase 3 starts; and then 5 for 5 Phase 3 readout and 5 key approvals. Let me give you a few examples on the POCs that you can keep an eye on. We have five different POC – up to five different POC readouts in our JAK franchise, including indications across topical – atopic dermatitis, psoriasis, vitiligo and also psoriatic arthritis for an oral drug. We have a strong momentum in our gene therapy platform. Albert mentioned in his introduction our factor-18 therapy where we are expecting soon a…

Thank you, Mikael.

Great, thank you. Can we move to the next question please, operator?

Your next question comes from Umer Raffat from Evercore.

Hi, thanks so much for taking my questions and congrats on a quarter. I want to touch upon three things today, if I may. First, Albert, there’s been a lot of investor questions on whether Pfizer could potentially be interested in M&A to recover the EPS dilution because of Upjohn. I just wanted to ask where you shake out on that, the first one. Secondly, on Upjohn, I noticed there was a S-4 filed yesterday where Pfizer’s internal forecast was that Upjohn stays at $7.8 billion to $8 billion post 2020, even though there would have been a Lyrica patent expiry worth $800 million in Japan, and even though China, 4 plus in would have intensified. So my question is what’s driving this potential $1.5 billion to $2 billion worth of revenue shortfall to keep Upjohn stable at close to $8 billion post 2020? And finally, on tafamidis. It’s very encouraging to see you’re already at 4,800 patients. And my question is, is it inconceivable that Pfizer could hit more than 40,000 patients diagnosed at peak? Thank you very much.

Excellent questions, Umer. So let me start with the M&A. Frank can cover the Upjohn forecast. And then of course, Angela will speak about tafamidis. On the M&A strategy, look, since the July of 2018, when I – as Chief Operating Officer of that time, I think I related this strategy going forward on several items including M&A strategy. We are very consistent. Right now we are poised for organic growth. Our organic growth, we forecast to be, on a five years CAGR, 6%. I know the average expectation is even higher. This number, even this 6% of us, compared to the analyst expectations likely will position – it’s not likely, it’s positioning us compared to the data and our peer set, let’s say, the top 10 to 15 companies in the industry, they’ll be the second largest in terms – the second fastest-growing company in the next five years with a 6% in terms of rate. And actually, there are a lot of this in terms of producing growth dollars because we are going to – of course, of our size, of course. So any efforts that we’re going to do, I’m not going to jeopardize that. So we are not – the name of the game for us, I can say this many times, it is top line growth. And M&A of scale, they have the tendency. One, very difficult to find someone that will not be accretive given that we are the second fastest in our growth. And secondly, it is very instructive operationally. And we can always do in a large M&A, but we have a very clear window of opportunity now to get it right, with our pipeline, to get it right with our launches. As you can see, we are doing very well. I…

And then, Angela, please, about tafamidis.

So thanks for the question. Certainly, we are extremely pleased with the diagnosis rates of ATTR-CM that we have seen to date, which is about 4% to 5%. But even with that, it’s important to remember that it is still a severely underdiagnosed disease, and we have a long way to go in terms of achieving what we believe and our patients deserve. There are two aspects of this diagnosis. The first is suspicion or suspecting the disease, and the second is the ability to detect the disease. As you know, because we’ve spoken about this over the last several quarters, we have been intensely focused on our educational efforts to help physicians suspect the disease. And this has been helped by the recently published red flag symptoms, which make it easier for physicians to see the possible clinical symptoms of ATTR-CM and helping them to drive suspicion of this disease. From there, we have been educating around the use of the scintigraphy as a noninvasive means to diagnose ATTR-CM. And we’re pleased to see that to date, about 90% of our diagnosis is now being driven through scintigraphy. Scintigraphy, as you know, is a well-established imaging technique, and it’s widely available across the U.S. in cardiology practices. Actually, we estimate about 15,000 of these diseases are available in cardiology practices throughout the country. And we’re seeing then this willingness and the readiness of physicians to adopt ATTR-CM diagnosis through this mechanism. I know that benchmarks that we have quoted in the past show that a diagnosis rate of about 30% to 50% is what most rare diseases have achieved up until now, and that is what drove our peak estimate. However, we are learning a tremendous amount every single day about this particular disease about what it takes to diagnose it. And certainly, we are focused on making sure that we can do better than that for our patients.

Great.

Thank you, Angela. Next question please.

Your next question comes from David Risinger from Morgan Stanley.

Yes. Thanks very much. I have two questions. First, could you just update us on the timing of the Ibrance adjuvant interim efficacy look? And second, I was hoping you could speak to the gross margin upside in the quarter in a little bit more detail and comment on the sustainability of strong gross margins. Thank you.

Thank you. Very interesting questions, David. I think, again, Mikael can provide an update on the timing of Ibrance. And of course, for margins, the master of margins improvements, Mr. Frank D’Amelio. Mikael?

Yes. As – we tell in general not to be specific about interim analysis in any programs. We expect the program to run to completion in 2020. There is an interim analysis a little bit earlier in 2020, but, most likely, it will run to completion. And we remain optimistic about the outcome of the study based on Ibrance’s very strong performance, more recently event supported by real world evidence data that was very favorable towards different aspects of progression-free survival and also robust on overall survival actually having hazard ration of less than 0.6, which probably is the strongest hazard ratio provided so far. And we will update that hazard ratio as the study matures. Thank you very much.

Thank you, Mikael. Frank D’Amelio: So Dave, I’ll answer the gross margin question. I think I’ll also just add in even though you didn’t ask a little bit about operating margins, too. So on gross margins, let’s do it based on cost of sales. If you look at our cost of sales year-over-year, Q3 2018, 20.1%; Q3 2019 19.4%. So directionally correct, right? Down on a year-over-year basis. What drove the improvement? Really a couple of things. One is some cost improvements that we were able to implement in our global supply chain organization. Obviously, our manufacturing plants and the like. And then secondly, we have some very favorable product mix, right? If you look at where our revenue growth was, alliance revenues were up 18% year-over-year. Ibrance grew. So – and then Vyndaqel. So we had some very favorable product mix. If you look at our operating margin for the quarter, high 30s, approximately 30%. So if you look at the trending and then you think about going forward, one key on that operating margin rhythm will be the revenue growth. So obviously, we’re saying now that we think 6% operational revenue growth going forward, that will clearly help our operating margins on a going-forward basis relative to what we have said back in July because we’ll leverage that to the bottom line. And so I mentioned earlier, clearly, our intent is to improve upon the numbers that we provided previously that we’re cautious, appropriately cautious back in July. So net-net, we think we can improve upon the numbers we provided, and we’ll give you all an update on that when we give our 2020 guidance.

Thanks, Frank. Next question please, operator.

Your next question comes from Tim Anderson from Wolfe Research.

Thank you. A couple of questions. On your revenue guidance of a five-year CAGR of 6%, consensus is not at that level, and I’m wondering if there’s any big areas that jump out at you specifically as being mis-modeled by the analyst community in as much as you’ve looked at that sort of thing. And then on abrocitinib, your JAK inhibitor, you’re running a trial called JADE compare head-to-head versus Dupixent, always bold to take on a product head-to-head. It looks like this trial should be reading out in December of this year, so coming up. I’m wondering, what we should realistically expect from that, both in terms of efficacy and safety? It seems that at least on safety and tolerability, it almost can’t look as good as Dupi because it’s a small molecule JAK inhibitor, but maybe you can kind of tell us what you expect that trial will show.

Yes. I think the – again, the R&D question, I think, will go to Mikael. Just a brief comment, but, look, we speak about our numbers, right? And the 6% that we’re providing for our numbers, we are very, very comfortable with this number. We want to make sure that we say what we do and we do what we say. So I don’t want to jeopardize that. So I’m giving numbers that we feel very comfortable that we will achieve. I have seen a lot of reports of analysts that they are having higher numbers than that. That’s why I referred to that. I’m going to check what is the consensus on that. But as I said, I don’t want to comment on other people’s. You are going do your job and we are doing our job. We feel very comfortable on the 6%. Mikael?

Yes. Thank you very much for shedding light on the compare study. So we are very excited about that study as it concludes our potential filing material, including then aggregate safety data. It is a head-to-head against Dupixent – dupilumab Dupixent, and we felt that it’s an important trial in the sense we expect both drugs to show tolerability and safety that are favorable. We expect abrocitinib, based on current historical comparison, to do very well on efficacy on clearance of skin. And we have specifically an endpoint on itch relief, pruritus reduction, which is one of the critical, most patient-friendly, centered endpoints. And we expect, and I believe that abrocitinib would outperform Dupixent in a very clinical, meaningful manner as it has a strong, fast onset. And data available, although not head-to-head, showed that the JAK1 class not just performed better clinically so far, and head-to-head is the reason why we wanted to document that hypothesis, but there is also science behind it. It inhibits the Interleukin-31 that is a major itch mediator, which is not covered by Dupixent. So I hope that gave you some insight into our integers. Frank D’Amelio: And Tim, it’s Frank. I just wanted to add to what Albert said. Remember, when the new company is formed between our Upjohn business and Mylan, RemainCo, our new Pfizer, is our Pfizer biopharma business. Our biopharma business this quarter grew 9%, the last couple of quarters grew 6%, 7%. So that approximately 6% that Albert gave, we’ve been printing now literally for the last few quarters. And remember, when Newco was formed, new Pfizer, RemainCo keeps all of the growth drivers that we currently talk about on this call. So that portfolio, the momentum of that portfolio carries into the new Pfizer.

Very good points, Frank. Frank D’Amelio: Thank you. We move to our next question, please.

Your next question comes from Steve Scala from Cowen.

Thank you. I have a couple. First, for Mikael, the press release says that after three doses in infants, the safety of 20-valent pneumococcal vaccine is similar to Prevnar 13, but you don’t say the efficacy is similar after three doses in terms of immune response due to 13 valents that they have in common. Can you comment on that point and the response to the additional seven valents? I know Prevnar 13 is a four-dose regimen, but you must have data after three doses. So that’s the first question. Second question for Frank. Should something draconian come out of Washington that overnight cut revenue by 10%, a 20% reduction in operating expenses would appear required to protect the bottom line. Could a 20% reduction in operating expenses be delivered? And if yes, would it take 6 months, 12 months or would it take much longer? Thank you.

Mikael?

Yes. We shared data on three immunizations. And it was a descriptive study, not powered for efficacy, but I – my take at this was, as in the press release, we had very robust rise in immune titer against all 20 serotypes. And at this stage, they look very similar to the PCV13 when you look at totality of data. And the immune titers also are supplemented by functional antibody responses that we’re now obtaining that, again, look very robust for the PCV20 across all serotypes. I wanted also to say that increasingly available epidemiology data strengthened the notion that the PCV20 has a very broad coverage, far exceeding PCV15 developed by a competitor, where do you look at the infant population, the adult population, U.S. or European major countries and whether you look at IPD and CAP. So we’re very pleased with emerging data and increased insights into epidemiology that indicates this vaccine has the potential to provide the broadest ever coverage for a pneumococcal disease. Frank D’Amelio: And then, Steve, if there was some draconian action that resulted in a 10% impact on our revenue, which is a big number, then clearly we would have to revisit our cost structure. I mean, how could we not? In terms of how much we could do it, how quickly we would do it, quite frankly, we’d have to work our way through that. But the short answer is we would clearly review our cost structure, every element of the cost structure, by the way, which we do all the time anyway, and then see what we have to do to deal with – quite frankly, what the model is – what the business model is going forward. A 10% decline in our revenues is a change in our business model. And then we’d have to obviously look at that in terms of how we run our business on a going-forward basis.

Thanks, Frank. Next question please.

Your next question comes from Navin Jacob from UBS.

Hi. Two questions if I may. Number one on Hospira, as you have stabilized that business in the manufacturing capabilities there. Wondering if you could help us understand to what extent there have been “lost revenues” over the last two years that would – that you may have been able to have if Hospira had been at full capacity and that basically, what I’m asking is, how much do you think you can recover going forward for Hospira and how quickly could that growth be achieved? And then on the C. difficile vaccine, I think the Phase 3 was supposed to read out in 2020, but I think you just went through an interim analysis in the DSMB or the monitoring board suggested to expand that study, wondering when the readout for that Phase 3 will be now? Thank you very much.

Right. I think, Angela can answer the Hospira questions to say something for us, the manufacturing issues and the supply for Hospira created, I would say a lot of trust with our customer. This is for me the most important, okay. And that’s why we took it very seriously and we were very transparent with them and we created also a hospital business unit, because this is mostly hospital products, so that can be very customer focused only on the hospitals, so that we can make sure that we had the relations, that we had before and make them very strong. And I have to say that we were very successful and what the customers appreciate the most was across products. Obviously there is business that we lost and we hope that we will recover most of it. Angela, what do you think?

Sure. I think the way I would think about the future growth of the hospital business unit and even Hospira would be in the following way. I think there is a portion of the revenue that was lost as a result of the supply issues that we would recover. There is a portion that we wouldn’t recover, but that isn’t – I guess that’s not the only source of growth, I think the way to think about growth also is what we’re doing to continue to diversify that portfolio and to bring in new launches. You hear Frank talk about Panzyga, as one of those and in our pipeline and in our portfolio today, our continuous launches, both from a presentation and a device perspective as well as from the molecule perspective. I think the other element of the hospital business unit that we also need to consider is the strong anti-infective portfolio that is part of that business unit. Those are sterile injectables and in that unit – in that portion of the business are a number of new launches that began a couple of years ago and are now launching globally. So that’s how I would think about growth in that portfolio, is that it’s not dependent purely on the replacement or the regaining of business. A portion of it is, but much more of it is dependent on new ventures and new spaces that we are venturing into.

Yes, Michael.

On the C. diff, yes, we were pleased with the aspect that safety and tolerability with regard as favorable at the interim analysis and clearly the futility analysis indicated that the study should continue. While we tried to target the high-risk patients for C. diff infection by looking at increased risk for contact with healthcare community or recent use of antibiotics, we are of course pioneers in this area of developing a vaccine for this urgent need for preventing what can be fatal C. diff infections. So we’ll use all our insights to learn today to make sure that we can continue and expand enrollment to follow the advice from the monitoring committee to make sure we can conclude this study as soon as possible. And of course, there is an urgency with 450,000 C. diff infections every year in U.S. and close to 30,000 of this and we’ll do everything possible to accelerate the readout of the study and get the events. We clearly do accumulated events, although somewhat slower than we initially hoped, but rest assure that we will do everything we can to make sure the readout is coming as soon as possible and we will later update you with more firm aspects of that.

Thanks Michael. Next question please, operator.

Your next question comes from Andrew Baum from Citi.

Thank you. Your portfolio is heavily exposed to high list price, heavy Part B expose drugs. I’m obviously thinking about Ibrance, Inlyta, Xtandi so on and so forth. You mentioned – you welcomed the proposal to cap out of pocket spends under Medicare Part B, but within the same Finance Committee proposal, there is also an obligation for you to funds catastrophic coverage to the tune of 20% and even larger contribution from the plan sponsor. So my question is what is your comfort level with that part of the proposal and to what extent do you think, particularly in crowded classes like the CDK 4/6, the obligation on the plan providers to fund catastrophic coverage is going to further increased price competition in the segment? And then the second question, if I quickly, historically in veiled against some of your competitors for basically holding Xeljanz into very treatment refractory settings, given sufficient of that rebate power, I’m thinking particularly of Humira, what’s your confidence level that you’re going to be able to secure favorable market positions with JAKs, given drugs like Dupixent are going to be generating significant rebates for the PBMs in the commercial book of business by the time you hit the market? Many thanks.

Thank you very much. Let me try to answer your question about the out of pocket and all these reforms in the Medicare that have been proposed. And then I will ask Angela to speak about Xeljanz. When it comes to price reforms there are things that we agree and are things that we do not agree. But I would tell you that we are fanatically in favor of reducing out-of-pocket cost for patients. Because right now the fundamental issue that drives this polarization in the political environment around healthcare, it is a real problem and the problem is that the Americans are paying for their medicines. Like if they are nothing short, although they are having insurance, when they go to collect them from the counter of the pharmacist. This is not happening with the hospital, this is not happening with diagnostics, this is not happening with other medical intervention, at least to the degree, what was happening with medicines and this is why that drug pricing is so high in the debate, although they represents only 10%, 12% of the total healthcare cost. So that needs to be addressed. Now the way that the Senate for example is proposing for aggressive or even worse through the house, they are going to increase the contribution of the pharmaceutical companies and of course this will help. But this is – the list of my problems overall, because at least what hurts us helps the patients. My issue with this bill, it is that a lot of other measures, but they’re suggesting that hurt us even more. They are not moving the savings to the patients, which is the fundamental issue that, right now, society is dealing with and this is our efforts here. I believe, that it is to the benefit of the industry, it is to the benefit of innovation, it is to the benefit of patients, it is to the benefit of the healthcare system to reduce the out-of-pocket expenses, either with a rebate reform or if that’s not on the picture right now by reducing the – by implementing a cap for out-of-pocket, it is of paramount importance, even if you have to pay for it. And Xeljanz, Angela.

So it is true that when we look back the Xeljanz access has been challenging through time, but certainly we over the last several years have worked hard with our payers as well as our PBMs as well as amassing, I think some really strong scientific and patient experience and evidence behind Xeljanz, that is creating momentum for this particular product. The I&I category generally is one that is the most heavily rebated and I think that we have demonstrated our ability to be a real solution in this space of great unmet need. And as evidenced just compared to last year this time, we now have 32 million more incremental lives in Medicare and commercial channels that have gained unrestricted access, and specifically in fact just this past May we gained an additional 8 million lives. So I think that this is sort of good evidence to show how we are working hand-in-hand with our payers as well as our PBMs to bring the totality of our data and our experience to bear. I’m filling an area of great unmet need.

Great. Thanks, Angela. Next question please.

Your next question comes from Terence Flynn from Goldman Sachs.

Hi, thanks for taking the questions. Albert, you mentioned a few of your upcoming biosimilar launches, just wondering if you can help frame for us, the potential size of the opportunity as you think about the long-term there and maybe walk through some of the remaining hurdles in terms of establishing a robust biosimilars market in the U.S. And then Angela, just wondering any more color you can provide on the extended dynamics in terms of either share among the different segments or maybe mix of the prescriber base? Thank you.

Let me speak a little bit about – generally about biosimilars, and then I will ask Angela to answer the second question and also specifics in the biosimilars potential of what we are going through. I think in the U.S., unlike other countries there is a problem with the system and the system is that there is – the fundamental issue that there is this rebate trough, but payers overall they do see the benefit of using biosimilar solution of what physicians would like to prescribe and that the FDA, saying that has similar efficacy and safety, and it is much cheaper. Although they want to do that, they are trapped and they cannot because they are going to lose the benefits or the rebates that the originator is offering. And I think, frankly, that unless we resolve this big issue, we will never be able to see tremendous progress on biosimilars. So this is something, I think, that the political world is understanding. This is something that we are very vocal about it. This is something that we are discussing constantly with payers, who they want to move to new solutions, but they cannot. And I think that there is positive momentum on that, but still I agree, to be able to see transformational change in the penetration of biosimilars, so the health care system can see real lives. Significant savings can only happen if we find a solution to that. We have also suggested other measures like the savings should be served by providers, et cetera, et cetera, but I think that’s the fundamental one. Now all biosimilars are not the same because – and not all markets are the same. Whether you have closed systems like the Kaiser, for example, the penetration of biosimilars is very, very high because they can see the benefit of doing something like that. But when you have intermediates being involved but then big rebates in play, it’s very difficult for them to do. And also, oncology is very different. Also, biosimilars from I&I are very similar because the I&I, they are giving for very extensive period of time, so you need to switch. New patients aren’t coming very often. Oncology is very different because it’s more limited the period that they are – that therapists use. And then the patients are coming much more often – New patients are coming much more often in higher proportion. But, Angela, maybe you want to add into that, and then also provide an answer to the second question.

Sure. I think Albert has said, much of it and maybe what I can add is the following. I think within the context of the fact that the U.S. dynamics are very different from the European dynamics, where you see a much greater adoption of biosimilars, what we have seen with our supportive care biosimilar, which is Retacrit, is that we’ve seen some nice growth there. To date, it has a 16% market share, which is the highest that we’ve seen of any biosimilar here in the U.S. and I think that that tells us – and that’s given us the opportunity to learn about what it will take to launch oncology biosimilars as well as what we can expect in this particular space. So I think with the three biosimilars coming within – one after the other December, January, February of end of this year, we look forward to driving the growth of this portfolio of biosimilars in an area of high unmet need for patients. As it pertains to Xtandi, you do see a tremendous growth here this quarter. We had a great quarter growing 25% year-over-year, and I think that this is evidence of the great confidence that our prescribers, both neurologists and medical oncologists, are having with Xtandi. We have leading market share at 37% branded in a growing class and the plus as well has been one that has grown 3 points from last quarter to this quarter. So when we look at our sources of patients for Xtandi, they come in two forms. First, it’s the non-metastatic castrate-resistant prostate cancer, where we continue to see increases, both in total patients as well as new patient starts since the PROSPER approval. And just as a measure of PROSPER, urologists are generally the prescribers in an earlier disease setting, and here urology prescribing is growing at 44%. And so we’re continuing to see the proportion of our business from PROSPER growth very positively. Also to remember that these patients are earlier in terms of their course of disease and therefore have higher days of therapy. So this will drive the prescriptions and the revenues. In metastatic CRPC, castrate-resistant prostate cancer, which is still the majority of our business. Our new patient share continues to increase there too. And here, we not only have the number one share of voice with oncologists, but our prescribing with oncology – medical oncology continues to grow significantly as well in this quarter at 21%. And so when you bring all of this together and you add into that the approval and/or the positive Phase 3 results we got from Ezimet and the submissions that we have for additional indications in both the non-metastatic, the hormone-sensitive setting as well as additional data from the inbox study. I think that what we have in Xtandi is a uniquely positioned NHT that is going to be able to treat multiple indications in both hormone-sensitive as well as castrate-resistant prostate cancer.

Excellent, thanks Angela. Next question please.

Your next question comes from Louise Chen from Cantor Fitzgerald.

Hi, thanks for taking my questions. So my first question is that in consensus there is a meaningful step up in Ibrance sales through 2023. And do you think you can grow Ibrance double digits without an adjuvant or neoadjuvant approval? And then second question I had is on abrocitinib, based on the safety data that you’ve seen thus far, is there a chance that you will not get a black box warning like other JAK15 in the industry? And then last question I had was if you could give an update on your DMD program, where you stand today, the competitiveness of your program versus some of the other ones out there, based on the data that you’ve seen thus far? Thank you.

Yes. A quick answer on the Ibrance, and then I think abrocitinib and DMD will be covered by Mikael. Again, in the spirit that I don’t want to comment what is the analysts expectations, I know what they are, and they’re our expectations. And we are projecting that we will grow Ibrance to double digit, and, therefore, also expecting that we will receive the – that we will have, let’s say, a positive PALACE study, which is the main study that is driving expansion of prescriptions and drivers. So, of course, everything is risk-adjusted in our projections. And some will be positive, some will be negative, but the 6% that we are taking because the ratio on all of that is not based on one or two, but is based on risk adjustment of multiple. So we are feeling very comfortable that, overall, we will not say bad because if another fails, another one would succeed. And that one will derisk the revenue. So we’ll be much higher. Mikael?

Yes. So starting with abrocitinib. I think it’s a good question, you raised here that each JAK inhibitor are different and we designed our JAK inhibitors for optimal use depending on the condition, and it’s hard for me to express a strong view here on the potential black box as it’s really the decision of the FDA. I can only say that we have so far seen a very good safety profile and we have not seen any cardiovascular signals at all with this drug. And as you’ve seen in our reported trials, efficacy has been very persuasive and strong. So we look forward to finalize the program, generate the compare data that could show potential advantages with faster onset versus standard of care Dupixent and then have a dialog with FDA. The DMD program, we are continuing dosing patients and we reported at the PPMD Conference that we had transduced more than 70% of the muscle fibers and expressed mean dystrophin at 30% of normal that we think is in the range that where you should see benefit. Interestingly, we also shared with you, using the North Star Ambulatory Activity Scale that we had two patients, where we saw a benefit in increased performance. And please remember, these patients were older than patient reported by other players in the field, and older patients are the harder is to show benefit as the natural history is to decline. So we are concluding, we hope to start in a relative short time frame and pending final data set, we are preparing for start of Phase 3 next year. And hope certainly that these type of therapy can transform patients’ lives for these poor boys.

Thanks, Michael. And operator, can we take our last question please.

Your final question comes from Geoff Meacham from Bank of America.

Good morning, guys, thanks for the question. Just had a few. Angela for Vyndaqel, I just want to get a little bit more detail on the rollout in the U.S. Obviously, I know it’s early, but from the field, how would you characterize reimbursement and access and other commercial lessons to be learned from the EU? And then, Albert, just to put a finer point on your comments for long-term growth and deals. I mean, when you look at the LOE starting in 2026, you mentioned the pipeline readouts as a clearly an offset, but can that or smaller tuck-in deals be enough to still get you to growth over the course of the decade? Thank you.

Angela?

Great. So from a reimbursement perspective, I think that we are seeing things pan out exactly as we thought. As you know, the large majority of our patients would be Medicare patients because the – just the age and the prevalence of the disease in this particular population. But currently, we’re seeing about 80% of our patients in the Medicare bucket, about 12% in the commercial lives bucket and then of the remainder in Medicaid and others. And so anticipating that this would be sort of how the patient – I guess the patient mix would look. We created at the launch of Vyndaqel, a number of programs to support the reimbursement of Vyndaqel. And, so for example, in the commercial patients, we have a co-pay card, a co-pay assistance program. For all patients, we have a bridge program to ensure that patients can receive access to Vyndaqel, while they’re waiting for their reimbursement decisions. And for Medicare patients, we’re exploring – we’re in the process of exploring a number of ways that we can help lower co-pay costs for Medicare patients including working with payers on innovative contracting approaches, which will then help to lower their co-pay. And then of course there is always a portion of patients that are on our free drug program. But I think all in all, what we’re learning from these early days in the market, is that the solutions that we have are definitely supporting our patients in the way that they need, and then not to forget, we still have the support from the Pfizer’s patient hub as well as a number of specialty pharmacies and hospitals that actually provide our patients with all the support they need to clear that prior authorizations. And I think that this service has been hugely helpful in helping us to clear prior auths and get our patients on drug as soon as possible.

And Geoff, to your question about if we believe that this growth going to be sustainable in the post 25, 26 period? The answer is yes. Look, it is normal for companies, who have LOEs. What is abnormal is not to have LOEs, but it is normal for companies to have LOEs and ourselves, we will come back to normality, actually not even in 26. 26 is a very small number of LOEs. From 27, we are coming back to normal LOEs as a percentage of sales. And then this we need to with everything that we know right now, normal in 27. So this is 8 years from now, right. So I feel very comfortable, but we will have enough time and we have a pipeline that is very diversified and we have a strategy that is doubled down only to develop substrate that will deliver on that. So when the Company’s on normality, we’ll be able to continue growing at the same rate that we are growing right now. So I think that’s the end, right? It’s like, unfortunately, we don’t have time. We exceeded our time. So I want to thank you all for joining us today. I liked a lot this call. There were fewer questions on financials because they were stellar, of course. And we devoted most of the time to the pipeline, which is exactly what we want to do, and to the growth drivers of the business, which is exactly what an earnings call of a successful pharmaceuticals company should look like. Now as we move toward the expected close of the Upjohn-Mylan transaction next year, I expect that both businesses will be significantly strengthened. We expect Pfizer to remain positioned to deliver top and bottom line growth, that it’s among the industry leaders. And you know us. We want to be the leader, so we will aim for that. And by bringing together Mylan’s growth products into Upjohn’s growth markets, we are creating the leading off-patent drug company with a strong financial profile and true global reach. All these reasons, it is an exciting time for our company, and we will remain highly focused on executing against these strategies. So thank you very much. Have a great rest of the day.

Ladies and gentlemen, this does conclude Pfizer’s third quarter 2019 earnings conference call. Thank you for your participation. You may now disconnect.