• First-Quarter 2023 Revenues of $18.3 Billion
  • Expected Decline in Comirnaty(1) Revenue Drove 26% Operational Decrease in First-Quarter 2023 Revenues
  • First-Quarter 2023 Revenues from Comirnaty(1) and Paxlovid of $7.1 Billion
  • Excluding Contributions from Comirnaty(1) and Paxlovid, Revenues Grew 5% Operationally
• First-Quarter 2023 Reported Diluted EPS(2) of $0.97, a Year-Over-Year Decline of 29%, and Adjusted Diluted EPS(3) of $1.23, a Year-Over-Year Decline of 24%
• Pfizer Reaffirms Full-Year 2023 Financial Guidance(4)
• Pfizer Continued to Make Significant Progress Toward an Unprecedented Number of Anticipated New Product and Indication Launches; Milestones Include FDA Approvals for Zavzpret, Cibinqo for Adolescentsand Prevnar 20 in Pediatric Patients

NEW YORK--(BUSINESS WIRE)-- Pfizer Inc. (NYSE: PFE) reported financial results for the first quarter of 2023 and reaffirmed full-year 2023 financial guidance.

The first-quarter 2023 earnings presentation and accompanying prepared remarks from management as well as the quarterly update to Pfizer’s R&D pipeline can be found at www.pfizer.com.

EXECUTIVE COMMENTARY

Dr. Albert Bourla, Chairman and Chief Executive Officer, stated: “This is an exciting time for Pfizer as we are already executing on and rigorously planning for an unprecedented number of anticipated new product and indication launches, most of which are expected to occur in the second half of 2023. We have made excellent progress toward this goal already this year with the U.S. approvals for Zavzpret, Cibinqo for adolescents and Prevnar 20 in pediatric patients, and regulatory filing acceptances for a Braftovi + Mektovi sNDA, sNDA for the Talzenna and Xtandi combination, elranatamab BLA and our RSV maternal vaccine candidate — which, if approved, would be the first vaccine for administration to pregnant individuals to help protect against the complications of RSV disease in infants from birth up to six months of age.

During the first quarter, we announced plans to advance the battle against cancer with a definitive agreement to acquire Seagen, a global biotechnology company that discovers, develops and commercializes transformative oncology medicines. By combining Seagen’s category-leading antibody-drug conjugate (ADC) technology with Pfizer’s scale, expertise and capabilities, we believe we can accelerate breakthroughs in cancer medicines and introduce new solutions to patients around the world. Oncology remains a core therapeutic area for Pfizer, and we believe the proposed acquisition will enhance our position in this important space.

We believe the strength of our in-line products and expected near-term launches and revenue contribution from business development activities, including the proposed acquisition of Seagen, will position Pfizer to deliver robust operational growth through 2025 and beyond.”

David Denton, Chief Financial Officer and Executive Vice President, stated: “Our first-quarter results were in line with our expectations, underlining our continued confidence in achieving 7% to 9% operational revenue growth for fiscal-year 2023, excluding our COVID-19 products and anticipated foreign exchange impacts. We expect the majority of this growth to occur in the second half of 2023, given the timing of our expected near-term launches. Integration planning for our proposed acquisition of Seagen is underway, and we continue to expect the transaction to close in late 2023 or early 2024, subject to the satisfaction of customary closing conditions. As we de-lever our capital structure after the close, we expect our strong balance sheet will continue to provide the flexibility for future dividend increases and share repurchase activity, as well as additional business development activity.”

Results for the first quarter of 2023 and 2022(5) are summarized below.

OVERALL RESULTS

REVENUES

Beginning in the third quarter of 2022, Pfizer made several organizational changes to further transform its operations to better leverage its expertise in certain areas and in anticipation of potential future new product and indication launches. These changes included establishing a new commercial structure within Biopharma focused on three broad customer groups (primary care, specialty care and oncology)(6), optimizing Pfizer’s end-to-end R&D operations and further prioritizing its internal R&D portfolio, as well as realigning certain enabling and platform functions across the organization to ensure alignment with this new operating structure.

In addition, in the first quarter of 2023, Pfizer established an operating segment named Business Innovation that includes Pfizer CentreOne (PC1), the company’s global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients; and Pfizer Ignite, a recently launched offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with Pfizer’s R&D focus areas.

Prior period amounts have been revised to conform to the current period presentation for all changes discussed above.

Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts. References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates(7).

CAPITAL ALLOCATION

During the first three months of 2023, Pfizer deployed its capital in a variety of ways, which primarily include the following two categories:

• Reinvesting capital into initiatives intended to enhance the future growth prospects of the company, including $2.5 billion invested in internal research and development projects, and
• Returning capital directly to shareholders through $2.3 billion of cash dividends, or $0.41 per share of common stock.

No share repurchases have been completed to date in 2023. As of May 2, 2023, Pfizer’s remaining share repurchase authorization is $3.3 billion. Current financial guidance does not anticipate any share repurchases in 2023.

First-quarter 2023 diluted weighted-average shares outstanding used to calculate Reported(2) and Adjusted(3) diluted EPS were 5,727 million shares, a decrease of 31 million shares compared to the prior-year quarter, primarily due to shares repurchased in the first quarter of 2022, partially offset by shares issued for employee compensation programs.

2023 FINANCIAL GUIDANCE(4)

Pfizer reaffirms all components of its full-year 2023 financial guidance, which is presented below. This guidance includes management’s expectations for contributions from the entire company, including Comirnaty(1) and Paxlovid.

*Changes in foreign exchange rates have had a minimal incremental impact since full-year 2023 guidance was issued. Please refer to Press Release Footnote (4) for additional information.

The midpoint of the guidance range for revenues reflects a 31% operational decrease compared to 2022 revenues. Company revenues are anticipated to be lower in 2023 than in 2022 due entirely to expected revenue declines for Pfizer’s COVID-19 products.

Excluding COVID-19 products, the Company continues to expect 7% to 9% operational revenue growth in 2023.

Revenue guidance for Pfizer’s COVID-19 products is as follows:

• Comirnaty(1) revenues of approximately $13.5 billion, down 64% from 2022 results.
• Paxlovid revenues of approximately $8 billion, down 58% from 2022 results.
• In contrast to previous years, guidance for both products is no longer based primarily on expected deliveries under existing signed or committed supply contracts, but now also includes, among other things, anticipated sales through traditional commercial markets in the U.S. in the second half of 2023.

The midpoint of the guidance range for Adjusted(3) diluted EPS reflects a 49% operational decrease compared to 2022, primarily driven by anticipated lower revenues from COVID-19 products, higher spending to support anticipated near-term launches and greater investment in certain late-stage pipeline projects.

Financial guidance for Adjusted(3) diluted EPS is calculated using approximately 5.75 billion weighted average shares outstanding, and assumes no share repurchases in 2023.

Other components of Pfizer’s 2023 financial guidance are presented below.

Pfizer’s 2023 financial guidance is based on estimates and assumptions that are subject to significant uncertainties, particularly with regard to the anticipated performance of Comirnaty(1) and Paxlovid. See the Overview of Our Performance, Operating Environment, Strategy and Outlook — The Global Economic Environment section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Pfizer’s 2022 Annual Report on Form 10-K and Pfizer’s fourth-quarter 2022 earnings press release (available at www.pfizer.com) for additional information.

QUARTERLY FINANCIAL HIGHLIGHTS (First-Quarter 2023 vs. First-Quarter 2022)

First-quarter 2023 revenues totaled $18.3 billion, a decrease of $7.4 billion, or 29%, compared to the prior-year quarter, reflecting an operational decline of $6.6 billion, or 26%, primarily due to a decrease in Comirnaty(1) revenues globally, as well as an unfavorable impact of foreign exchange of $730 million, or 3%. First-quarter 2023 revenues from Comirnaty(1) and Paxlovid were $7.1 billion. Excluding contributions from Comirnaty(1) and Paxlovid, company revenues grew $563 million, or 5%, operationally.

Compared to the prior-year quarter, first-quarter 2023 revenue growth was unfavorably impacted by approximately 1% as a result of having one fewer selling day in international markets. This unfavorable impact is expected to reverse in the fourth quarter of 2023.

First-quarter 2023 Comirnaty(1) revenues declined $10 billion, or 75%, operationally compared with the prior-year quarter, largely driven by lower contracted deliveries and demand in international markets, as well as lower U.S. government contracted deliveries with anticipated transition to traditional commercial market sales in the second half of 2023.

First-quarter Paxlovid revenues increased $2.8 billion compared with the prior-year quarter, primarily driven by favorable timing of final delivery associated with the U.S. government contract before anticipated transition to traditional commercial markets in the second half of 2023; strong demand in China due to increased COVID-19 infections; and launch in certain international markets.

Excluding contributions from Comirnaty(1) and Paxlovid, first-quarter 2023 operational growth was primarily driven by:

• Recently acquired products, Nurtec ODT/Vydura and Oxbryta, which contributed $167 million and $71 million in global revenues, respectively;
• Sulperazon internationally, up 64% operationally, largely driven by demand in China, which is not expected to be sustained;
• Eliquis globally, up 7% operationally, driven primarily by continued oral anti-coagulant adoption and market share gains in the non-valvular atrial fibrillation indication in the U.S. and certain markets in Europe, partially offset by declines due to loss of exclusivity and generic competition in certain international markets; and
• Vyndaqel family (Vyndaqel, Vyndamax, Vynmac) globally, up 16% operationally, largely driven by continued strong uptake of the transthyretin amyloid cardiomyopathy (ATTR-CM) indication, primarily in the U.S. and developed Europe, partially offset by a planned price decrease that went into effect in Japan in the second quarter of 2022,

partially offset primarily by lower revenues for:

• Xeljanz globally, down 33% operationally, driven primarily by lower net price in the U.S. due to unfavorable changes in channel mix, as well as decreased prescription volumes worldwide resulting from ongoing shifts in prescribing patterns related to label changes.

GAAP Reported(2) Income Statement Highlights

SELECTED REPORTED COSTS AND EXPENSES(2)

First-quarter 2023 Cost of Sales(2) as a percentage of revenues decreased by 12.2 percentage points compared with the prior-year quarter, primarily driven by changes in sales mix, including lower sales of Comirnaty(1) and higher sales of Paxlovid.

First-quarter 2023 SI&A Expenses(2) increased 35% operationally compared with the prior-year quarter, primarily reflecting increased investments to support Paxlovid, recently acquired and launched products, and products across multiple customer groups.

First-quarter 2023 R&D Expenses(2) increased 10% operationally compared with the prior-year quarter, primarily driven by increased investments to develop recently acquired assets and certain vaccine programs, as well as activities to support upcoming product launches, partially offset by lower spending on programs to prevent and treat COVID-19 and certain other late-stage clinical programs.

First-quarter 2023 acquired IPR&D Expenses(2) decreased 94% operationally compared to the prior-year quarter, primarily driven by the non-recurrence of an upfront payment to Biohaven Pharmaceutical Holding Company Ltd. (Biohaven) and a premium paid on Pfizer’s equity investment in Biohaven, as well as a premium paid on Pfizer’s equity investment in BioNTech SE (BioNTech) to develop a potential mRNA vaccine against shingles — both recorded in the first quarter of 2022.

Other deductions––net(2) decreased 71% operationally in the first quarter of 2023 compared with the first quarter of 2022, primarily driven by lower net losses on equity securities, higher dividend income and lower net interest expense, partially offset by asset impairment charges in the first quarter of 2023, and lower net periodic benefit credits associated with pension and postretirement plans.

Pfizer’s effective tax rate on Reported income(2) for the first quarter of 2023 decreased compared to the prior-year quarter primarily due to a favorable change in the jurisdictional mix of earnings.

Adjusted(3) Income Statement Highlights

SELECTED ADJUSTED(3) COSTS AND EXPENSES

Reconciliations of certain Reported(2) to non-GAAP Adjusted(3) financial measures and associated footnotes can be found in the financial tables section of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS (Since January 31, 2023)

Product Developments

• Braftovi (encorafenib) and Mektovi (binimetinib) – In April 2023, Pfizer announced the U.S. Food and Drug Administration (FDA) accepted for review the supplemental New Drug Applications (sNDAs) for Braftovi + Mektovi for patients with metastatic non-small cell lung cancer (NSCLC) with a BRAF V600E mutation, as detected by an FDA-approved test. The Prescription Drug User Fee Act (PDUFA) goal date for a decision by the FDA is in the fourth quarter of 2023 for the sNDAs.
• Cibinqo (abrocitinib) – In February 2023, Pfizer announced the FDA approved an sNDA for Cibinqo, expanding its indication to include adolescents (12 to