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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pfizer Inc | NYSE:PFE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.16 | 0.58% | 27.86 | 27.905 | 27.52 | 27.86 | 60,567,753 | 00:59:06 |
Filed by Pfizer Inc.
Pursuant to Rule 425 under the Securities Act of 1933, as amended
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934, as amended
Subject Company: Pfizer Inc.
(Commission File No. 001-03619)
The following communication is being filed in connection with the proposed business combination between Mylan N.V. and Upjohn, Pfizer Inc.s off-patent branded and generic established medicines business.
The following are excerpts from the transcript of Pfizer Inc.s first quarter earnings call, held on April 28, 2020.
Corporate Participants
Albert Bourla Pfizer Inc. Chairman of the Board & CEO
Angela Hwang Pfizer Inc. Group President of Biopharmaceuticals Group
Charles E. Triano Pfizer Inc. SVP of IR
Frank A. DAmelio Pfizer Inc. CFO & EVP of Global Supply & Business Operations
John D. Young Pfizer Inc. Group President & Chief Business Officer
Mikael Dolsten Pfizer Inc. Chief Scientific Officer and President of Worldwide Research, Development & Medical
Conference Call Participants
Andrew Simon Baum Citigroup Inc, Research Division Global Head of Healthcare Research and MD
Carter Lewis Gould Barclays Bank PLC, Research Division Senior Analyst
David Reed Risinger Morgan Stanley, Research Division MD in Equity Research and United States Pharmaceuticals Analyst
Louise Alesandra Chen Cantor Fitzgerald & Co., Research Division Senior Research Analyst & MD
Navin Cyriac Jacob UBS Investment Bank, Research Division Equity Research Analyst of Specialty Pharmaceuticals and Large Cap Pharmaceutic
Randall S. Stanicky RBC Capital Markets, Research Division MD of Global Equity Research & Lead Analyst
Stephen Michael Scala Cowen and Company, LLC, Research Division MD & Senior Research Analyst
Terence C. Flynn Goldman Sachs Group Inc., Research Division MD
Timothy Minton Anderson Wolfe Research, LLC MD of Equity Research
Umer Raffat Evercore ISI Institutional Equities, Research Division Senior MD & Senior Analyst of Equity Research
Vamil Kishore Divan Mizuho Securities USA LLC, Research Division MD
PRESENTATION
Operator
Good day, everyone, and welcome to Pfizers First Quarter 2020 Earnings Conference Call. Todays 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.
Charles E. Triano Pfizer Inc. SVP of IR
Thank you, operator. Good morning, everyone, and thanks for joining us today to review Pfizers first quarter 2020 financial results, our reaffirmed full year 2020 financial guidance, Pfizers role in helping find solutions for the COVID-19 pandemic as well as other relevant business topics.
As usual, Im joined today by our Chairman and CEO, Albert Bourla; Frank DAmelio, 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, our 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/investors. Youll see here on this slide that 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, Ill now turn the call over to Albert Bourla. Albert?
Albert Bourla Pfizer Inc. Chairman of the Board & CEO
Thank you, Chuck, and good morning, everyone. During my remarks, I will discuss the first quarter business performance as well as recent milestones from our pipeline.
As expected for revenues for our Upjohn business were down 37% operationally in the quarter to $2 billion. The decline was primarily driven by the expected significant volume declines for Lyrica in the U.S. due to multi-share generic competition that began in July 2019. Upjohn revenues in China declined 41% operationally, primarily driven by anticipated declines for Lipitor and Norvasc, primarily resulting from the volume-based procurement program, which was initially implemented in March 2019 and expanded nationwide beginning in December of 2019. These declines were consistent with our previous guidance for the Upjohn business.
Regarding Upjohns combination with Mylan, the industrial logic continues to be very attractive. While we pushed out the expected timing of the deal close to the second half of 2020, mostly due to administrative delays related to COVID-19, there is no change in our commitment to the transaction, and we continued to move forward with all pre-closing activities and initiatives. Last week, the European Commission approved the proposed transaction, subject to divestment of certain of Mylans generic medicines.
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Frank A. DAmelio Pfizer Inc. CFO & EVP of Global Supply & Business Operations
Upjohn revenues declined 37% operationally driven by generic competition for Lyrica in the U.S. and declining sales of Lipitor and Norvasc in China due to the implementation and nationwide expansion of the volume-based procurement program. Importantly, both of these negative drivers were anticipated in our previous Upjohn guidance.
Before walking you through our guidance updates in detail, I want to acknowledge that no one currently knows exactly how and in what time frame the COVID-19 pandemic will progress and eventually come to its resolution. Given those uncertainties, along with our desire to be as transparent as possible, we are providing on this chart the key COVID-19-related assumptions that are reflected in todays guidance update.
In summary, our financial guidance reflects our expectation that most health care systems around the world will begin to resume their normal functions in the second half of 2020, including in-person doctor visits, new-to-brand prescription trends, sales force activities and clinical trial enrollment. The guidance also assumes we will be able to continue to operate our manufacturing and supply chain without material disruption and that we will continue to invest in potential treatments and vaccines against COVID-19 throughout 2020.
With that, lets take a look at our guidance. Consistent with last quarter, we are providing 3 sets of financial guidance. As a reminder, those 3 sets of guidance are as follows: total company, which reflects our current construct of the Biopharma and Upjohn businesses and excludes any impact from the pending Upjohn combination with Mylan; two, new Pfizer, which is a full year pro forma view that reflects the impact of the pending Viatris transaction by removing Upjohn and including $12 billion in cash proceeds from Upjohn to new Pfizer; and other transaction-related factors, such as transitional service [agreement revenue; and three,] (added by company after the call) Upjohn as a stand-alone business.
Let me remind you that the Upjohn guidance includes the Meridian business and our collaboration with Mylan in Japan as we discussed last quarter. All of these scenarios continue to be based on a full year of revenues and expenses in 2020.
Moving on to financial guidance for new Pfizer and Upjohn. Despite absorbing negative incremental impacts on revenues due to changes in foreign exchange rates since mid-January of approximately $500 million for new Pfizer and $100 million for Upjohn, we are reaffirming the fiscal year 2020 revenue guidance ranges for both pro forma companies. Additionally, we are reaffirming the guidance ranges for adjusted IBT margin and adjusted diluted EPS for new Pfizer as well as adjusted EBITDA for Upjohn. The only change to the guidance we gave for new Pfizer is a $1 billion reduction in the range for operating cash flow driven entirely by a $1.25 billion voluntary U.S. pension contribution, which we plan to make in the second half of 2020.
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Forward-Looking Statements
This communication contains forward-looking statements. Such forward-looking statements may include, without limitation, statements about the proposed combination of Upjohn Inc. (Newco) and Mylan N.V. (Mylan), which will immediately follow the proposed separation of the Upjohn business (the Upjohn Business) from Pfizer Inc. (Pfizer)(the proposed transaction), the expected timetable for completing the proposed transaction, the benefits and synergies of the proposed transaction, future opportunities for the combined company and products and any other statements regarding Pfizers, Mylans, the Upjohn Businesss or the combined companys future operations, financial or operating results, capital allocation, dividend policy, debt ratio, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competitions, and other expectations and targets for future periods. Forward-looking statements may often be identified by the use of words such as will, may, could, should, would, project, believe, anticipate, expect, plan, estimate, forecast, potential, pipeline, intend, continue, target, seek and variations of these words or comparable words. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the impact of outbreaks, epidemics or pandemics, such as the COVID-19 pandemic; ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world; the parties ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; changes in relevant tax and other laws; the parties ability to consummate the proposed transaction; the conditions to the completion of the proposed transaction, including receipt of approval of Mylans shareholders, not being satisfied or waived on the anticipated timeframe or at all; the regulatory approvals required for the proposed transaction not being obtained on the terms expected or on the anticipated schedule or at all; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with accounting principles generally accepted in the United States of America and related standards or on an adjusted basis; the integration of Mylan and Newco being more difficult, time consuming or costly than expected; Mylans, the Upjohn Businesss and the combined companys failure to achieve expected or targeted future financial and operating performance and results; the possibility that the combined company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the proposed transaction within the expected time frames or at all or to successfully integrate Mylan and Newco; customer loss and business disruption being greater than expected following the proposed transaction; the retention of key employees being more difficult following the proposed transaction; Mylans, the Upjohn Businesss or the combined companys liquidity, capital resources and ability to obtain financing; any regulatory, legal or other impediments to Mylans, the Upjohn Businesss or the combined companys ability to bring new products to market, including but not limited to where Mylan, the Upjohn Business or the combined company uses its business judgment and decides to manufacture, market and/or sell products, directly or through third parties, notwithstanding the fact that allegations of patent infringement(s) have not been finally resolved by the courts (i.e., an at-risk launch); success of clinical trials and Mylans, the Upjohn Businesss or the combined companys ability to execute on new product opportunities; any changes in or difficulties with Mylans, the Upjohn Businesss or the combined companys manufacturing facilities, including with respect to remediation and restructuring activities, supply chain or inventory or the ability to meet anticipated demand; the scope, timing and outcome of any ongoing legal proceedings,
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including government investigations, and the impact of any such proceedings on Mylans, the Upjohn Businesss or the combined companys consolidated financial condition, results of operations and/or cash flows; Mylans, the Upjohn Businesss and the combined companys ability to protect their respective intellectual property and preserve their respective intellectual property rights; the effect of any changes in customer and supplier relationships and customer purchasing patterns; the ability to attract and retain key personnel; changes in third-party relationships; actions and decisions of healthcare and pharmaceutical regulators; the impacts of competition; changes in the economic and financial conditions of the Upjohn Business or the business of Mylan or the combined company; uncertainties regarding future demand, pricing and reimbursement for Mylans, the Upjohn Businesss or the combined companys products; and uncertainties and matters beyond the control of management and other factors described under Risk Factors in each of Pfizers and Mylans Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (SEC). These risks, as well as other risks associated with Mylan, the Upjohn Business, the combined company and the proposed transaction are also more fully discussed in the Registration Statement on Form S-4, as amended, which includes a proxy statement/prospectus (as amended, the Form S-4), which was filed by Newco with the SEC on October 25, 2019 and declared effective by the SEC on February 13, 2020, the Registration Statement on Form 10, as amended, which includes an information statement (as amended, the Form 10), which has been filed by Newco with the SEC on January 21, 2020 and amended on February 6, 2020 and subsequently withdrawn on March 11, 2020, and is expected to be refiled prior to its effectiveness, a definitive proxy statement, which was filed by Mylan with the SEC on February 13, 2020 (the Proxy Statement), and the prospectus, which was filed by Newco with the SEC on February 13, 2020 (the Prospectus). You can access Pfizers, Mylans and Newcos filings with the SEC through the SEC website at www.sec.gov or through Pfizers or Mylans website, as applicable, and Pfizer and Mylan strongly encourage you to do so. Except as required by applicable law, Pfizer, Mylan and Newco undertake no obligation to update any statements herein for revisions or changes after this communication is made.
Additional Information and Where to Find It
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed combination of Upjohn Inc. (Newco), a wholly owned subsidiary of Pfizer Inc. (Pfizer) and Mylan N.V. (Mylan), which will immediately follow the proposed separation of the Upjohn business from Pfizer (the proposed transaction), Newco and Mylan have filed certain materials with the SEC, including, among other materials, the Form S-4, Form 10 and Prospectus filed by Newco and the Proxy Statement filed by Mylan. The Form S-4 was declared effective on February 13, 2020 and the Proxy Statement and the Prospectus were first mailed to shareholders of Mylan on or about February 14, 2020 to seek approval of the proposed transaction. The Form 10 has not yet become effective. After the Form 10 is effective, a definitive information statement will be made available to the Pfizer stockholders relating to the proposed transaction. Newco and Mylan intend to file additional relevant materials with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MYLAN, NEWCO AND THE PROPOSED TRANSACTION. The documents relating to the proposed transaction (when they are available) can be obtained free of charge from the SECs website at www.sec.gov. These documents (when they are available) can also be obtained free of charge from Mylan, upon written request to Mylan or by contacting Mylan at (724) 514-1813 or investor.relations@mylan.com or from Pfizer on Pfizers internet website at https://investors.Pfizer.com/financials/sec-filings/default.aspx or by contacting Pfizers Investor Relations Department at (212) 733-2323, as applicable.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any investor or security holder. However, Pfizer, Mylan, Newco and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction under the rules of the SEC. Information about the directors and executive officers of Pfizer may be found in its Annual Report on Form 10-K filed with the SEC on February 27, 2020 and its definitive proxy statement relating to its 2020 Annual Meeting filed with the SEC on
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March 13, 2020, as supplemented by its supplement to proxy statement filed with the SEC on April 7, 2020. Information about the directors and executive officers of Mylan may be found in its Annual Report on Form 10-K filed with the SEC on February 28, 2020, and its definitive proxy statement relating to its 2019 Annual Meeting filed with the SEC on May 24, 2019. Additional information regarding the interests of these participants can also be found in the Form S-4, the Proxy Statement and the Prospectus. These documents can be obtained free of charge from the sources indicated above.
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