Good day, everyone, and welcome to Pfizer’s First Quarter 2020 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.

Thank you, operator. Good morning, everyone, and thanks for joining us today to review Pfizer's first quarter 2020 financial results, our reaffirmed full year 2020 financial guidance, Pfizer's role in helping find solutions for the COVID-19 pandemic as well as other relevant business topics.

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. However, I want to start with a few thoughts about the COVID-19 pandemic and Pfizer's role in helping find solution. It goes without saying that this is an extraordinarily, difficult and unprecedented time for everyone. The public health challenges posed by COVID-19 have impacted almost every aspect of our lives. As one of the world's largest biopharmaceuticals companies, our role in this crisis is dual. On the one hand, we are focused on maintaining the continuous supply of our medicines and vaccines to patients around the globe, while protecting the safety and wellbeing of all our colleagues of course. On the other hand, we are working with experts, both within and outside Pfizer to bring our expertise, capital and resources to help contribute potential medical solutions to this pandemic. Let me share a few examples of what we are doing on this front. With the burden on hospitals happening around the globe and expected to increase, the continued supply of our medicines and vaccines is now more critical than ever. I'm pleased to say that the Pfizer global supply team has done an outstanding job, keeping our manufacturing sites and related distribution channels operational, without significant supply disruptions. In terms of finding medical solutions for the pandemic, we are collaborating with industry partners and academic institutions to develop potential novel approaches to prevent and treat COVID-19. We aim to leave no stone unturned and we have made advances on multiple fronts. Regarding prevention, we recently announced that Pfizer and the German biotech company, BioNTech have entered into a global collaboration agreement to co-develop the potential first-in-class mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection. Last week, we received the regulatory approval from German authority Paul-Ehrlich-Institut to commence the first clinical trial for our COVID-19 vaccine candidates in Germany and the first patient has already been dosed. Frank D’Amelio: Thanks, Albert. Good day, everyone. Before I walk you through our results for the quarter, I want to comment on the current global pandemic, which is impacting nearly every industry around the world. Despite the challenges inherent in operating in this environment, the fundamentals of our business continue to be strong and our outlook for the future of the Company remains bright. We continue to have a strong balance sheet and favorable credit rating, which we expect to allow us to access the capital markets as needed, which was demonstrated in late March with the issuance of a $1.25 billion sustainability bond, the first of its kind in our industry. On the supply side, all 49 of our manufacturing facilities remain operational, and we have not seen a significant disruption in our supply chain as a result of the pandemic. To ensure the safety of our manufacturing colleagues while they perform this critical work, we have put in place enhanced safety measures at all of our plants, including investing in protective equipment, staggering shifts so that fewer colleagues are present at once, restricting site access to only essential workers and requiring colleagues to log their contacts while on site. I want to acknowledge how proud I am of the way our colleagues, many of whom are on the frontlines in this fight, have responded to this crisis with courage and passion from those who are working around the clock on potential treatments or vaccines for COVID-19 to those who continue to operate on manufacturing and supply chain to ensure patients can have the medicines they need. This is in times like these that the strength of our culture and of our people really shines. Now, onto the financials. First quarter 2020 revenues were $12 billion, down 7% operationally versus the year ago quarter. Of course, most of this decline is due to the fact that we no longer report revenues for our consumer healthcare business. Excluding this impact, revenues were down 1% operationally. As Albert already explained in detail, our biopharma revenues grew 12% operationally this quarter, driven by strength across multiple products with approximately 1 percentage point of that growth attributable to the net impact of COVID-19 on product sales. 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 implementation and nationwide expansion of the volume-based procurement program. Importantly, both of these negative drivers were anticipated in our previous Upjohn guidance. For total Company, adjusted SI&A expenses in the quarter were down 16% operationally, approximately half of that decline was due to the fact that we no longer report expenses for the consumer healthcare business. The remainder of the decrease was driven by reductions in field force, advertising and promotional expenses, due to the LOE of Lyrica in the U.S. and lowest selling expenses for Lipitor and Norvasc in China, due to volume based procurement, as well as lower indirect SI&A spending associated with corporate-enabling functions. Both reported and adjusted diluted EPS for the first quarter were down compared to the year-ago quarter. The decrease was primarily due to lower revenues, mainly driven by the loss of exclusivity for Lyrica in the U.S., partially offset by lower SI&A expenses. Finally, foreign exchange had a negative impact of $134 million or 1% on first quarter 2020 revenues and $0.02 negative impact on adjusted diluted EPS compared to the year-ago quarter. Before walking you through our guidance updates in detail, I want to acknowledge that no one currently knows exactly how and in what timeframe 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 today's guidance update. In summary, our financial guidance reflects our expectation that most healthcare 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, let's take a look at our guidance. Consistent with last quarter, we are providing three sets of financial guidance. As a reminder, those three steps 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 up Upjohn to New Pfizer and other transaction-related factors, such as transitional service agreement revenue; and three, Upjohn as a standalone 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. Beginning with total Company, as Albert mentioned, we are reaffirming our guidance ranges for both revenue and adjusted diluted EPS, despite absorbing incremental negative impacts due to foreign exchange fluctuations, since mid-January of approximately $600 million on revenue and $0.04 on adjusted diluted EPS. Moving down the income statement, we lowered our cost of sales as a percentage of revenue guidance range by 0.4 percentage points to reflect favorability, resulting from changes in product mix and other efficiencies. For selling information and administrative expenses, we are lowering our guidance range by $500 million. This reflects incremental cost savings opportunities, primarily related to indirect SI&A spending, as well as actual and anticipated spending reductions as a result of the COVID-19 pandemics, and as Albert already spoke about the $500 million upward revision to our R&D expense range. Finally, our guidance continues to anticipate no share repurchases in 2020. Moving on to financial guidance for New Pfizer and Upjohn. Despite absorbing negative incremental impacts on revenues to the changes in foreign exchange rate 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 in New Pfizer is a $1 billion reduction in the range for operating cash flow, driven entirely by $1.25 billion voluntary U.S. pension contribution, which we plan to make in the second half of 2020. Moving on to key takeaways. In the first quarter of 2020, our Company performed well in a challenging environment, driven by strong revenue growth from our biopharma business. We reaffirmed our 2020 guidance for revenues and adjusted diluted EPS and we achieved multiple products and pipeline milestones since our last quarterly update, some of which are listed here, demonstrating the continued advancement of our late-stage pipeline. Finally, we paid $2.1 billion in dividends to our shareholders this quarter. As always, we remain committed to delivering attractive shareholder returns in 2020 and beyond. Now, I'll turn it back to Chuck.

Thanks, Frank, and thanks, Albert, for those comments. Operator, can we please now poll for questions?

Your first question comes from the line of David Risinger from Morgan Stanley.

Yes. Thanks very much for the detailed review, and congratulations on the performance. So, I have two questions, please. First is with respect to the guidance and the second is on the vaccine candidate. So, with respect to the guidance and the assumptions on slide 13, could you just discuss what you're assuming with respect to a potential resurgence in COVID, during the start of the flu season and the fourth quarter, and the impact of that on healthcare systems and physician visits? And then second, with respect to your vaccine candidate with BioNTech, could you just discuss your level of conviction that you have the right candidate that will be safe and effective? And when do you expect to generate animal data, and when do you expect to generate initial human data? Thank you very much.

Dave, thank you very much. Very good questions, as usual. The first one is guidance. Let me ask Frank to make comments about the assumptions. Frank D’Amelio: Yes. So, David, on our guidance, we are assuming a recovery in the second half of the year. We expect the second quarter to be as reported as primarily impacted in a negative way from the COVID-19 virus, but we do expect the recovery in the second half of the year. And that includes the items that we talked about in our comments. In-person doctor visits sought up again, new-to-brand prescription trends, sales force activities, clinical trial enrollment, and obviously all of our sites continuing to operate and provide medicines to patients the way that they're currently doing today. So punch line, second half recovery and the healthcare system returns to normal operations.

Thank you, Frank. And now, Mikael, I think, you would like to comment on the vaccine, before let me say just one thing on the vaccine. This is new technology. But we are very familiar with both the technology and the company, because we are working with them the last two years in a joint project to develop with the same technology, a flu vaccine. So, we jumped into the COVID-19 when the need emerged jointly together. And we are applying, of course all the learnings of the -- the learnings that we had with the technology during the last two years. Now, Mikael, can you speak -- please speak more specifics about the specific project?

Thank you, Albert, and Dave for asking these important questions. I will start by saying, I think we have the most comprehensive SARS-CoV-2 vaccine program currently ongoing and it's specifically related to mRNA. As Albert alluded to, we had built a lot of experience on the various type of mRNA and formulation of lipid nanoparticles through two years work on flu and a lot of different animal data coming from our work and work from BioNTech on both oncology and other programs. When it comes to the specific Lightspeed program as it's called, that has basically in two to three months moved from the drawing table to dosing patients right now. It contains, as we have announced four different vaccine candidates that will be studied in humans. The first one already dosed. And that allows us more than anyone to cherry pick from a new disease like COVID-19, what type, what antigen is the most effective and allows us to pick one or two to move into pivotal studies. So, that covers unmodified mRNA, modified and self-amplifying. To the best of my knowledge, we are the only one currently having self-amplified mRNA in the clinic, which would allow you to dose, at lower dose than any other construct. We already have animal data from rodents on the various constructs that are encouraging. And we also have data from patients here that shows that the two antigens that we pick seem to be the most relevant for intervening and utilizing viruses. And by having picked two, spike or the smaller components receptor binding domain again, I think we will be able to cherry pick what turns out to translate most effectively in man. So, more animal data will come over the next few weeks on primates. And I expect human data to come late May-June from the first experiments performed on plasma from vaccinated patience. And this is a unique trial design with continuous data flow that should allow us to progress fast, share data with regulators. So, we expect the flow of data coming May, June, and then move into expanded trials that could allow emergency use or accelerated approval coming in the fall, possibly October and onwards. So, thank you very much for your questions.

Thank you, Mikael. And also let me add here, but the reason also why we jumped into this is not only because we've had the familiarity with the company, with the technology, and we had discussed this project that was very exciting, but also we have -- we are uniquely positioned to help during this crisis, because we have the end to end capabilities. We are having very strong capabilities from early preclinical research, all the way to manufacturing. And frankly, as I -- we have, I think said, but I make it very clear now also, we are planning to manufacture at risk, this vaccine. So, if the technical success and regulatory approvals are there, we will have doses available in -- during the last quarter of this year. And also, it would be an omission if I wouldn't mention right now that how grateful we are with the advice and collaboration that FDA is giving us that they are trying to work their timelines day and night as well, so that they can help bring to the world, a solution. Thank you very much.

Your next question comes from the line of Chris Schott from JP Morgan.

Just two. First on Vyndaqel and the impact from COVID. It sounds like you're expecting a slowdown in diagnosis rates in the quarter. Should we also expect that RXs and patients receiving drug should also slow or could those actually keep ramping, once you've identified a product that can keep working through the process? My second question on Vyndaqel was also on payer mix. You've had a little bit more experience with the product. And we're still trying to get a sense of where gross to net could shake out for the product. So, any additional statistics here in terms of how many patients are getting free drug, how many are reimbursed? Any data there would be very helpful. My final question was on Prevnar in infants. Are your expectations for that product for the year unchanged, so that we're going to obviously see get 2Q impact, but you get kind of a catch up in the second half of the year, or should we actually be thinking about Prevnar infant expectations for the year coming down as that catch-up won't offset the lost sales in the quarter?

I think, all three questions are very well suited for Angela to answer. So, Angela, why you don’t start with Vyndaqel?

Great. Thank you. Thanks for those questions, Chris. So, firstly, on Vyndaqel. As you can see, we continue to have just great momentum behind this product. And we do believe that this will sustain its moment throughout the year. As Albert mentioned, we do think that there will be some slowdown in NRXs in the second quarter. And actually just to align with those comments, we did see that in our patient hub enrollments since the middle of March, we saw a decline of about 20% in the last four weeks, compared to the previous four weeks. So, I think that this comment about new patient starts is one that we are seeing in the patient hub. However, let's also think about the great attributes of Vyndaqel. It's an oral medication; it's one that is being delivered through specialty pharmacies directly to patients’ homes; it's one that because of its mortality benefits, decreases hospitalizations. All of these really play well to the time that we're in right now in this pandemic. And so, we anticipate our continuing patients to be able to continue on their drugs and be able to stay on therapy, so no impact on TRxs. Your second question was around the payer mix. And on that front, we have not seen change in terms of the numbers of patients on commercial versus Medicare versus other books of business. That has been pretty consistent through the time from launch, and our Medicare patients are the predominant part of our patient population, and that hasn't changed at all. And then, I think the third question was on Prevnar P. And on Prevnar P, similarly consistent with comments made earlier, we do anticipate second quarter to have some slowdown. And this is just because, well visits aren't taking place, there is a lot more caution regarding visits to pediatrician's offices. So, we do anticipate some slowdown there. But, we also know both from our research and from our representatives that pediatricians are anxious and are motivated to get the well visits back and to have our infants, as well as our children vaccinated. And therefore based on that and based on the fact that we expect a recovery in second half per Frank's comments about our assumptions, we do anticipate a catch-up towards the second half of the year that will allow us to attain our expectations that we had for P for all of 2020.

Your next question comes from the line of Umer Raffat from Evercore ISI.

Mikael, on your antiviral for COVID, you’re going down the protease inhibitor track, instead of the nuc. Maybe, if you could explain the thought process? And if you could also lay out for us the exact EC50 that you're seeing with your 3CL inhibitor? And I asked because some of the initial 3CL inhibitor constructs you had chosen against SARS, the EC50s were above 10. So, I wonder if you are seeing something closer to a one on the protease inhibitor you've chosen. And secondly, on COVID vaccine, Mikael, I'm curious, what's the exact threshold on utilizing antibody titers that you want to see for you to say, you know what, we have something?

Thank you, Umer. Mikael, the stage is yours.

Thank you very much, Umer. Great questions here. So, let's start with protease inhibitors. We had a privilege. This isn’t just repurpose protease inhibitor from a distant relative. We had a collection of compounds that showed very potent activity to the SARS-CoV-1. And we were able to model and show that it's a very strong similarity in the binding and have confirmed that these compounds on the SARS-CoV-2 to COVID-19 disease are very potent. We are talking about very potent nanomolar type of binding. And it is supported by X-ray data available that shows again unique, highly selective binding patterns. We are now doing cellular antiviral studies, which initial data is encouraging again, showing potent activity, which needs to be studied on different cell types where the virus may be harbored. All together, we think these are very promising drug candidates. And we're moving swiftly ahead with scaling up, adding other IND type of data to potentially pending regulatory dialogues that have initiated to be able dose patients around August this year. We’re also working on oral follow-on drug and have identified several candidates that show suitability for this type of delivery system. So, altogether, I feel very encouraged that this could be the first-in-class protease drug for SARS-CoV-2 and we'll keep you posted as we advance. On the vaccine, clearly, we are looking at what could be animal data guiding us on what should be the relevant threshold in order to have neutralization of virus. And we have in discussion with regulators gotten good feedback on data from multiple animal models that we are pursuing that could help to possibly even create a surrogate endpoint. We're also looking at convalescent serum from patients to understand, which of those that are used for treatment intervention guides us and will actually use those also in intervention models. So, while we expect in our Phase 2 study later summer, Q3 early to generate human data on our vaccine when it comes to impacts on events. These will be supplemented by multiple animal models and plasma levels of neutralizing antibodies used in transfusion therapies. So, all-in-all, a multi-pronged approach to nail down the type of levels we should aim for, and to keep with the most aspirational goal of getting a vaccine that can be considered for emergency use, accelerated approval around Q3 this year. Thank you very much.

Thank you, Mikael. And also to add with the antiviral as we did with the vaccines, we are producing at risk clinical material. So, in case we decide to go into summer and do clinical studies, as Michael said, we will be able to do it immediately.

Your next question comes from the line of Terence Flynn from Goldman Sachs.

Hi. Thanks for taking the questions. Maybe two for me. The first is, given the current environment, I was just wondering if there are any changes to how you're approaching capital allocation here. Do you expect M&A and business development opportunities to increase? I think, you had talked on your fourth quarter call about potentially finalizing some deals in the first half of the year. So, just wondering if there's been any change on that front? And then, my second question is on your 20-valent pneumococcal disease program. We've now seen the top line data for the adult Phase 3 setting come out. Just wondering what outstanding questions are left here on that program, as you look ahead on the forward and securing the filing in the fourth quarter?

Thank you very much. So, Frank, would you like to make some comments on the capital allocation? Frank D'Amelio: Sure. So, Terence, on capital allocation, our priorities remain the same, which are obviously dividends and we paid a $2.1 billion dividend to our shareholders this quarter, investing in the business, and then obviously M&A, so mergers and acquisitions. And clearly, there has been some value reset in the industry, and you can see some of that with some of the biotechs. And obviously, as we always do, we'll look for opportunities where we think it's a good deal for our company and for our shareholders. The one thing I want to balance this with though is, even though valuations reset, Board of Directors and management teams expectations don't necessarily reset at the same pace. So, that's always something we have to work our way through. But from a high level priority perspective, our capital allocation priorities remain the same.

Thank you, Frank. And then, Mikael, is there anything that you're waiting more on, pneumococcal adult or you think you can file?

We are very confident in the pneumococcal adult after completion of the main efficacy studies that we have done a press release, and it has the immunogenicity, safety and scalability that we were looking for. We also recently had a lot consistency study to readout, which again, showed similar grade profile for the 20-valence to be used in the adult setting. We are still having one study that is for patients previously immunized with pneumococcal vaccines that will be coming shortly. But for naïve patients, we do have all data available, looking like a very strong profile and we are yet to supplement with the data sets coming on previously immunized, which, this would be to expand the coverage. And that's why we feel very confident about filing and you heard from Albert's introduction that we moved it to early Q4.

Your next question comes from the line of Randall Stanicky from RBC Capital Markets.

Just two questions, probably both for Angela. Can you just talk about the Ibrance trends, particularly EU5 price headwinds? When do those abate, and how should we think about Ibrance growth for this year? And then, just a follow-up on Vyndaqel, the 13% diagnosis rate, it's a nice jump from 4Q of 9%. Any change to where you guys think that can ultimately get to, putting aside near-term headwinds from COVID?

Angela, go ahead.

So, on Ibrance in the EU, I want to affirm that our fundamentals and our growth of Ibrance in the EU continues to be really strong. And we continue to see great growth opportunities into the future. Right now, the first line metastatic breast cancer share of the CDK class is only at 38. So, there's room for growth here. And we do have a strong leading market share of 68% of all CDKs. So, I think just right there, you can see that there are continued opportunities for growth. And that is how we see it. We saw very strong double-digit growth for Ibrance in volume. And what you didn't see and why that didn't translate into net sales is because we negotiated a number of very large contracts with certain large European countries. Many of these happened in Q4 of 2019. And because these contracts are multiyear, what you get here now is some stability in that. And so, this has allowed us to rebase our businesses. So, those impacts are already included in our guidance. And because of the timing of when these contracts are signed, we expect to return to net sales growth in the second half of 2020. So, all-in-all, I think it's just the timing and the year-on-year comparison that is driving the effect of what you're seeing from a net sales perspective. And I want to reaffirm that our fundamentals are strong, our value proposition of Ibrance is strong. And we continue to see tremendous growth opportunity both for the class, as well as our own share. Your next question was about Vyndaqel. And I think your question was around just sort of diagnosis and whether we're seeing anything particular there. And no, I mean, the strategy that we have deployed from the beginning, which is to find and heightened awareness around, which patients we should suspect for ATTR-CM and then have those patients be then diagnosed through scintigraphy, continues to be mainstay of how we are generating diagnosis. With time, we are deploying and we're experimenting with the artificial intelligence and different sort of predictive models that might allow us to again support the suspicion of these patients. But, I would say that our strategies have been rather consistent since launch. And I think that the diagnosis rates that we're seeing tell us that what we've been doing is working well. There's great receptivity for this product, both from physicians as well as from patients. We are very active on the education front, both from a diagnosis and from a treatment perspective. So, I think that what we've been doing is really working well and will continue to do so.

Your next question comes from Tim Anderson from Wolfe Research.

On your 20-valent pneumococcal conjugate vaccine. Just an update on timing for when we are likely to see the Phase 3 trial start in to keep that gap with Merck as small as possible? And then, second question on adjuvant Ibrance, just an update on timing of when we will see the data? And when you do top-line that are you likely to disclose any results or is it just going to be a qualitative top-line? Thank you.

Let me take quickly the adjuvant and then Mikael, please answer the 20-valent and add if you have anything on the adjuvant. We have not run any interim analysis yet on PALLAS study. And we expect, as we said before, the study will come to conclusion -- excuse me, will come to completion, which means that we will not stop expect during the interim because as I said very high criteria for study. So, typically, we do not announce when we have interim analysis data and visibility unless if we stop. So, as I said, we don't have data, we haven't performed an analysis yet. An analysis has not been performed. Typically we don't announce it and the study will come to completion as expected, early in 2021. So, Mikael, on the 20-valent, on the pace, when we can start the Phase 3 and then you have to add something on the PALLAS.

Thank you very much Albert and Tim for the questions. We offered a press release of the three injections immunization we later shared that the fourth dose further substantiates data. We have had extensive regulatory dialogues in the U.S. and elsewhere and shared all those data sets. So, we are planning to start the ped PCV-20 very soon. We're talking likely about just a few weeks to be clear. So, that's our projected plans right now. And I think you said very well on the adjuvant Ibrance studies that we feel very optimistic and good about them and just waiting for them to report on the date that we have communicated.

Thank you. Angela, do you want to add anything on the pediatric marketplace as we see it potentially playing out?

As you said, we will launch tentatively after the Merck 15. However, we don't anticipate that the ACIP will make a preferential recommendation between the two. And therefore, we believe that PCV-13 will compete with 15 until the PCV-20 comes to market. And we are confident about PCV-13. It has tremendous experience with healthcare professionals. We have very strong account management developed with our customers through the years that we've been on the market and we also have a very reliable supply track record. And so, despite there may be gap in launches, we anticipate to be competing in the market and to continue to support the benefits of PCV-13 to infants.

Your next question is from Louise Chen from Cantor.

Hi. Thanks for taking my questions here. So my first question for you is, do you have any update or more details on the go forward strategy for Pfizer, post the Upjohn separation as it pertains to M&A, pipeline assets, what you're thinking about there? And then, what in your DMD Phase 1b data gave you confidence to move into Phase 3 studies? Where are you with manufacturing? And what type of data do you think you'll report out at ASGCT? And then, my last question here is just back on PCV-20. Just curious if you think from the adult side that the ACIP recommendation would change at all if you were to get approved for PCV-20? Thank you.

Thank you. Let me maybe speak a little bit on this rather than M&A. And then, John also can add to that. And then, I will ask Mikael on the DMD, and then maybe Angela on the PCV-20 again, how ACIP will do the adults. On the go for strategy, our strategy is very clear and will remain the same. Of course, there is expected separation with Upjohn. Pfizer will become a top-line best-in-class growth story. And we are feeling more and more confident about it. We are strengthening our language around the 6%. Today, I said at least 6% will grow and that we expect that will continue. Now, the M&A is not a strategy. It is a tool to support the strategy. And that's why the M&A in the past were much more geared towards buying revenues or buying earnings growth by big mergers that could cut costs, because this is what we needed at that time. Right now moving forward, we are not in a need to buy EPS. Our EPS will grow organically as our revenues will grow organically. So, our M&A, although we never say never or anything in M&A. But right now, it is -- we will continue that. Our strategy is not to go to a big M&A for the following three reasons. One, it is that very few targets will provide -- will not dilute our growth, very few. Most of them will grow less than us. So, we'll have dilution. Secondly that targets, usually they want a significant premium. And those make me feel that most of the value is captured by the shareholders of the acquirer, like the one that is making the acquisition. And of course, those big acquisitions are creating some destruction which R&D could be an issue. So, these are the considerations. In terms of saying where are we going to invest our capital, if this is not our first priority for the reasons that I said. We are going to invest in early Phase 2, Phase 3 ready to start potential medicines that could be part of our pipeline, so that we will strengthen the pipeline that is coming post -- as products post ‘25, ‘26, ‘27, ‘28, so that we can sustain the growth that already we feel very confident we have organically or in the next five, six years. So, that's on our strategy and M&A. Now, DMD, Mikael, what makes you optimistic?

Thank you very much. I mean, it's such a transformative area, treating these boys with Duchenne. So, we have now treated, as you will learn more at the conference, 11 patients, 8 of them at the high dose of 3 to the 14. And we continue to show -- see very consistent, based on efficacy, looking at the dystrophin expression, the distribution of the dystrophin. And as we have treated more patients and the early boys that were treated, we have now longer observation period, we can also see that durability seems to exceed 12 months when it comes to the , which makes us feeling very good that it could be a long durability for these boys. And we also have data coming out on muscle health, creatine kinase and more recently MRI that allow us again to add another level of confidence that we're changing the health of the muscles. And finally, for the motor function, where you use clinical scales, we have seen now across a number of treated boys a favorable data on their Northstar Index. And I want to point out that we're seeing it cross different ages because if you mainly monitor early boys for this, they do have some spontaneous improvements that could be difficult to differ from treatment induced. But we have also seen it on older boys, where you expect decline, but we have noted improvement instead. So, all-in-all, we feel that we have now accumulated a very robust data set on efficacy, and we have learned important experiences how to mitigate risk and manage any possible safety event. Of course, we have one of the largest efforts on new therapy manufacturing that has been expanding in North Carolina, and that will all come together now in our plan to start Phase 3 trials in just a few months. So, thank you for your interest.

Thank you, Mikael. Really, very exciting news for these boys particularly, they have virtually no solutions right now. Angela, what about our views on what would be the recommendations of ACIP on the adult pneumococcal vaccine, the 20 and competition?

Yes. So, we're really excited about our PCV-20 programs, and specifically about the breadth that serotypes coverage that PCV20 provides. And we really see the benefits in two ways. One, first of all, these incremental serotypes are associated with high case fatality rates, antibiotic resistance and/or meningitis. So, these are sort of serious diseases that these serotypes will be able to cover. But also relative to PCV-15, PCV-20 is expected to provide 33% more coverage against IPD strains in adults. So, with these data, our plan is to bring this forward to the CDC and to regulatory authorities. We will certainly be discussing recommendations and what all this means. But, I think in the end, we will know that this is a decision that the CDC needs to make. And we will be having these conversations with them as our program develops. But, certainly, we feel very strongly about the potential benefits and the additional coverage that PCV-20 can provide. And we'll keep you posted with what happens with the CDC.

And John, you have to add any comments on our going forward strategy, given that you're managing this area very successfully right now and particularly on M&A targets or licensing targets that we have?

Obviously, we don't talk about specific targets, as you all know. But, I think Albert sort of really hit on the sort of main points in our -- in his answer, which is we feel really good about the prospects for the continued growth of our core business. In terms of business development to strengthen that, our focus is absolutely on clinical stage assets. I think, Frank touched on this in his answer to capital allocation earlier on. But, we're really very focused on clinical stage assets that could complement our existing internal pipeline that we feel good about. So, we're going to be focused on areas including oncology where there could be interesting tuck-ins. We're going to be looking at rare disease. There's a lot of innovation taking place there. And I think we're uniquely placed, because of the capabilities and manufacturing and development that Mikael has touched on to add to our pipeline. And we continue to look across our other areas as well, select opportunities. So, we think there are opportunities out there. We continue to be very active in this space. But of course, we're always doing to make sure that we're disciplined how we deploy capital in a way that really optimizes value for our shareholders, but most importantly for our patients. So, I think between Albert's and Frank’s answers, hopefully that gives you a flavor how we feel about a capital deployment and business development for our business strategy post separation of Upjohn.

Thank you very much. I'm not sure if we answered also the question on DMD about manufacturing. And yes, we feel very good about manufacturing. Our investments are progressing very nicely. And we will be able to manufacture at scale from the DMD, provided that it is successful and runs.

The next question comes from Steve Scala from Cowen.

Thank you. I had a few questions. First on abrocitinib. I believe only the higher dose was better than Dupixent. But, there were safety issues at that dose. And it was not superior on itch. It seems the outlook is not all that positive. You obviously think differently. So, could you explain? Secondly, you spoke about the PALLAS trial. But to clarify, the PENELOPE-B neoadjuvant trial, did you say the readout is now Q1 of '21? We had thought it was likely to be top-line this year. And then, lastly, can you just quantify the Eliquis stocking in the quarter? Thank you.

Thank you very much. I will very quickly answer the PENELOPE -- no, the Penelope is expected to come in the second half of the year. The PALLAS is expected to come early next year. This is exactly as you had said it before. Mikael, why do you -- are you excited about abrocitinib?

Yes. We are very excited about abrocitinib. And let me just punctuate a few things. In the JADE COMPARE study, we show that both, high and medium doses met coprimary endpoint and very effectively reducing eczema. We had a key a secondary endpoint of comparing itch to Dupixent standard of care. And this is one of the most patient-centric endpoints impacting quality of life, both day and nighttime. And the high dose statistically significantly showed better effect clinically meaningful than Dupixent, while the lower dose, the 100 milligram numerically was better, but didn't reach statistical significance. Overall, what we see is more rapid onset with our power abrocitinib than the biological Dupixent. And we see a more rapid onset numerically, whether you look at skin clearance or whether you see -- look at itch. And while there is some more infections, always with higher doses of JAK inhibitor, we think and I believe that the benefit versus the risk is still very favorable. These are mild to moderate cases, most attenuate and basically all attenuate if you discontinue treatment. And I wanted to finally emphasize that we have a very exciting additional trial that is not necessary for filing, but it's coming later this year that trial regimen that will study, if you start on the 200 milligram, which we know will clear skin, reduce itch much faster than standard of care. And then, you can switch maintenance to the 100-milligram, which likely had a lower level of any adverse events, including infection. So, that gives you potentially max flexibility to treat and clean up, itch in skin and go on a lower dose. But again, the benefit risk to me looks very favorable also for the higher dose. These infections are relatively rare or mild to moderate and can easily be managed and are quite common for patients treated by dermatologists. So, I feel very good about high dose being superior and the lower dose being somewhat similar to Dupixent, still having faster onset of action numerically and it's oral and very convenient to take. I hope that gave you a good sense why I feel encouraged to see these new treatment options for patients, moving to regulatory discussions, and hopefully soon available.

Thank you, Mikael. And Angela, what about the inventory levels? Can you explain, of Eliquis?

Yes. In terms of this Eliquis impact, what we saw was an uptick in terms of inventory levels to prepare for the pandemic, and the impact was about in the mid single digits, in terms of worldwide revenue.

Your next question comes from the line of Andrew Baum from Citi.

Thank you. I know that you've added a couple of very distinguished scientists to Board, also added a former FDA Commissioner, under your tenure Albert, as well as the Mylan transaction. Should we thing about this as an accelerated evolution of Pfizer in terms of trying to improve the ROI that has had historically on R&D? And if so, aside from the measures I outlined, perhaps you could highlight any other internal, either organizational or current enrichment that's going on that also points in that direction? And then second to Mike, Pfizer seems to have pivoted away from immuno-oncology, as many others have done, given the disappointments post-PD-1. If we do see the emergence of novel IO targets, such as assets for the randomized Phase 2 trials, should I assume that Pfizer’s willing to reengage back in that field? And I know I'm exaggerating in terms of binary, but it does seem that you have pivoted back towards to more molecules? Then finally, if you could comment on the anticipated treatment duration in the real-world setting for PALLAS, given the issues with adverse events as well as reimbursement friction for Medicare patients?

Andrew, can you repeat the first part of your question, the ROI?

Yes. So, I was basically saying that under your tenure, Albert, there's a notable addition of three individuals with high scientific calibers. So, obviously, the former FDA Commissioner, but also two very distinguished scientists as well as decomplexifying the organization by the Upjohn transaction. So, when I think about the evolution of the business on the Pfizer, it does seem there's a concerted attempt to try and shine more light or improve the ROI through some of these measures. So, I was asking, are there any other internal measures, talents enrichment inside the organization, or new R&D structures designed to improve R&D, either through accelerating programs, killing early the normal stuff, but if something changed in the profile of improving the ROI on R&D…

Thank you very much. And the answer is absolutely yes. It’s not by chance that right now in our Board we have five top scientists, four of them physicians, top scientists that they have unique expertise either in regulatory science, they have unique expertise in development, they have unique expertise in basic science, both in primary care in metabolic diseases and immunology. We have also through Susan Hockfield -- she was the pioneer of bringing together the genomic data with computation power. She was the first biologist and first woman to be any head of -- President of the MIT. And there's a very clear statement that Pfizer is different. Pfizer is a science-based company, and this is where the growth is coming. And we are adding those Board members to provide also more visibility, but also because they help us with their very high knowledge. Now, there is not one or two, there are multiple measures -- metrics that we are using to assess if indeed our R&D machine is a new machine and if we can count on it in this new strategy. And they are all pointing in this direction. I think, we've made very clear that the Pfizer of the past, because you ask a question how, if you can kill quickly and if you can let’s say progress things that they really matter rather than move everything. Pfizer of the past had a success rate of Phase 2 studies of 15%. When I say, over the past, few years back, 15%, when the industry was a third. Today, Pfizer's success rate, it is close to 50%, and that's on a rolling four years assessment right now. And I'm sure, next year will be 50% or rolling 50%. And this is not the only one. In 2018, we were the Company that introduced most new molecular entities of anybody else, who would expect that from Pfizer. And we can go on and on. John Young has a very detailed list of criteria. And he's managing the governing process. But, he is making sure that as we allocate capital, we allocate with R&D ROI in mind. And also I will add that the speed with which the Company is reacting, has nothing to do with the Company in the past. And by the way, this is very well indicated in the way that we were able to move better than any biotech in speed in developing machine or in the speed in developing an antiviral. And the reason why we have been able to accomplish this speed in addition to be cultural, it is also that we have break the company into 5 distinct business units plus 1 -- 6, excuse me 6 together with hospitals, business units, and that each one of these business units, for example, oncology vaccines or diseases, they operate like a biotech. They make decisions end to end from commercial to early R&D within this structure, like as I said, if they were a biotech company. And they are presenting their requests for finance and into -- the community that John Young is managing, so that we can allocate the capital. And last but not least, although Pfizer is laser focused on this an ROI of R&D as we are progressing, it was absolutely to avoid misunderstanding. It was absolutely none of -- it was absolutely not one of our criteria, when we jumped into the COVID-19 programs. The only criteria that we used as we jumped into the COVID-19 projects was, if we are -- we can have a solution, if we can make the difference, if we think that our technology is good one, so that you can bring a vaccine or an antiviral, because this is not times that ROI should prevail for COVID-19, it is times that the solutions will be found. So, with that, I hope I gave you some color on how Pfizer is changing and what is the meaning which is more than symbolic of appointing the new Board members. And I go to Mikael, to answer your second question.

Thank you for that question. We think we need to be careful and not throw everything under the kitchen into immune-oncology. We try really to cherry pick the areas where we have learned after the initial positioning of PDXs, one example is bifunctional antibodies. We have a dose escalation of a BCMA bifunctional that looks very encouraging which subcutaneous unique profile. We have follow-on PD-1 bifunctional with cytokines that can boost immune resistance. And we have oncolytic viruses. We were successful combining Inlyta with PDX, and we're building on that experience to now move from actually our Boulder units form Array, a small molecule this year that we think is an immune enhancer for cancer an XMR inhibitor. So I hope you got that answer that we are cherry picking areas where we think we can break resistance to IO rather than serving everything on to these area.

Your next question is from Vamil Divan from Mizuho Securities.

Great. Thanks for taking my question. So, one, maybe following up on the abrocitinib question from before, Steve's question for Mikael. I think, I get the enthusiasm you have on the efficacy side and the convenience side. Because my question is just more on safety, now that you've seen the COMPARE data, maybe as you think about the filing. Just your level of confidence on the label being clean from some of the black box warnings we see for the current JAK and infection malignancies and obviously also BTEs. I think, in talking to dermatologists, it seems like it’ll be critical for it to be -- to not have a black box in order to compete the product like Dupixent. So, maybe, just you can share your views there? And then, second also on the immunology pipeline. Your JAK-3 -- the 1600, just curious on timing on that. I think clinical trial says that the trial’s expected to read on the Phase 2, Phase 3 expected in September of this year but it also says it’s still recruiting patients. So, just trying to get a better sense of when we might see data for that product? I know it has breakthrough status. Thank you.

Thank you, Vamil. Mikael?

Yes. Abrocitinib, we have a large database. I feel very good about its profile. We have not seen any cardiovascular issues. And that's really what is worrying about safety. While we see as expected some viral skin infections, I consider a more of safety, tolerability and very mild and moderate, and can be well managed with standard experience in medical practice. I cannot speculate about black box. That's really for regulators. Our JAK-3 in alopecia has a very unique profile. The most selective of all JAKs that I've seen this far, we think readout will be probably, as we have predicted, mid-‘21 and this is a pivotal study that could go quickly to filing. We do have end of this year a number of JAK inhibitor readouts in the Phase 2, like JAK-3 in vitiligo, we have oral too in psoriasis and topical in atopic dermatitis. So, we'll keep you busy with a flow of news.

Your next question is from Navin Jacob from UBS.

Thanks so much. Navin from UBS. Thanks for fitting me in. Mikael, I just wanted to just touch upon the commentary with regards to the regulators and allowing surrogate markers as SARS-CoV-2 vaccines. Just want to dig into that a little bit more. What specifically will they be looking for that allows speedy approval? And then, I want to understand the manufacturing targets that you have by year-end, if approved? If approved, I just want to understand, is it -- I'm assuming it's going to be under a sort of extended access use basis for healthcare workers? And then, what do you need from regulators for a broad approval for the general public? Any kind of clarity around that would be helpful.

Yes. I do not know how the regulators would like to regulate that. And I leave it to them. But, I can answer the question on the manufacturing. So, we expect that we will have in the last quarter of this year, millions of doses basically ready. And then, for ‘21, we could ramp up to hundreds of millions of doses available. Now, Mikael, maybe a little bit you can answer the question about the endpoints or the surrogate endpoints.

There are, of course interest of both regulators and pharmas to see how we can learn maximally to allow potentially very important vaccine, quickly to deal with both medical and business crisis. We have had ample discussions with the highest level of regulatory leaders in both U.S. and Europe. So, in the surrogate side, there are two animal guiding principles, if you can show for life threatening diseases data. And we are pursuing mice/hamsters, as well as primate studies that are ongoing and will hopefully show to us what level of immune activity interferes with the virus. And we're also doing some, I think, really creative studies taking patient sera and testing them, how they can intervene in these models and trying to correlate convalescence, patient transfusions, and what levels protect the disease or, can halt the progression of disease in patients. So, I think this is a unique area where we will have human and animal data coming together in Q3 to possibly provide a surrogate. But, we are planning from our Phase 2 study of the vaccines to also have human event rates. So it's more of having a really comprehensive approach to bring confidence and accelerate the potential approval or emergency use of these. It's not relying on just one approach. It’s multiple approaches that we bring it together in close dialogues with the highest level of regulators.

Your final question comes from the line of Carter Gould from Barclays.

Thanks for fitting me in. I guess, just one on sort of your view on the OUS pricing dynamics coming out of COVID. Just your expectations on the potential likelihood of incremental pricing pressure from government funded health care systems, given like the pressure on EU budgets and expectation we see, similar austerity measures like we saw last decade? Thank you.

So, I think, it's very difficult to predict. And in any case, I think our assumptions, it is -- the pricing is not the growth driver. Pricing is -- volume is going to be our growth driver, even without COVID. But I think, if I had to speak on a high level on COVID right now, I think and not on the short-term, but on the long-term, as you are asking. I see two dynamics here. One is the one that you mentioned, which is likely governments will have, let's say, budgetary pressures and we know that that's typically an area that they try to go. So, that I think will be towards the negatives. But also we see that the value proposition of the pharmaceutical industry has been drastically reset in the minds of the people right now. Because of the pharmaceutical industry right now in the middle of this crisis represent the whole of the billions of people and the hundreds of millions of enterprises that will find a solution towards that. And I think that will work on the very positive side. So, it remains to be seen what will be the net-net of those two areas. But, I believe that in any case, it’s not going to drive growth by pricing, it’s going to be by volume. So, I guess this is the end of -- and thank you very much for all these questions, I really appreciate it. So, I think this is the end, Chuck. So, let me just thank you all for joining us today, for your continued interest and engagement within Pfizer. We are very happy to provide information and also are very happy to learn from you. As I said at the start, this is an extremely difficult time for everyone as such, it is both, a great privilege and a great responsibility for our colleagues to serve patients at this moment. We've had an opportunity to demonstrate the power of our science, and we'll do everything we can to do -- to be a part of the solution to this problem. And I want to close by acknowledging the healthcare workers on the frontlines whose heroic efforts have been an inspiration to all of us. Their courage, their dedication and expertise have saved countless lives right now and probably in the future even more. And on behalf of all Pfizer colleagues and their families, I say, thank you. So, have a great rest of your day.

Ladies and gentlemen, this does conclude Pfizer's first quarter 2020 earnings conference call. You may now disconnect.