PFIZER INC - Quarter Report: 2024 September (Form 10-Q)

Net income/(loss) before allocation to noncontrolling interests () Less: Net income attributable to noncontrolling interests Net income/(loss) attributable to Pfizer Inc. common shareholders$ $()$ $

Earnings/(loss) per common share––basic:

Income/(loss) from continuing operations attributable to Pfizer Inc. common shareholders$ $()$ $ Discontinued operations––net of tax Net income/(loss) attributable to Pfizer Inc. common shareholders$ $()$ $

Earnings/(loss) per common share––diluted:

(a)

(b)

(c)

See Accompanying Notes.

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(UNAUDITED)

) ) ) )) ) )

Three Months Ended

Nine Months Ended

(MILLIONS)

September 29,
2024

October 1,
2023

September 29,
2024

October 1,
2023

Net income/(loss) before allocation to noncontrolling interests

()

Foreign currency translation adjustments, net

()

Unrealized holding gains/(losses) on derivative financial instruments, net

()

Reclassification adjustments for (gains)/losses included in net income/(loss)(a)

()

Unrealized holding gains/(losses) on available-for-sale securities, net

()

Reclassification adjustments for (gains)/losses included in net income/(loss)(b)

()

Net cash provided by/(used in) operating activities

Investing Activities

Purchases of property, plant and equipment

()

Purchases of short-term investments

()

Proceeds from redemptions/sales of short-term investments

Net (purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less

()

Purchases of long-term investments

()

Proceeds from redemptions/sales of long-term investments

Proceeds from partial sale of investment in Haleon(b)

Acquisition of business, net of cash acquired

()

Other investing activities, net

()

Net cash provided by/(used in) investing activities

()

Financing Activities

Proceeds from short-term borrowings

Payments on short-term borrowings

()

Net (payments on)/proceeds from short-term borrowings with original maturities of three months or less

()

Proceeds from issuance of long-term debt

Payments on long-term debt

()

Cash dividends paid

()

Other financing activities, net

()

Net cash provided by/(used in) financing activities

()

Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents

()

Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents

()

Cash and cash equivalents and restricted cash and cash equivalents, at beginning of period

Cash and cash equivalents and restricted cash and cash equivalents, at end of period

Supplemental Cash Flow Information

Cash paid during the period for:

Income taxes

Interest paid

Interest rate hedges

Summarized financial information for Haleon for the three and nine months ending June 30, 2024, the most recent period available, and for the three and nine months ending June 30, 2023, is as follows:

Three Months EndedNine Months Ended(MILLIONS)June 30,
2024June 30,
2023June 30,
2024June 30,
2023Net sales$ $ $ $ Cost of sales()()()()Gross profit$ $ $ $ Income from continuing operations Net income Income attributable to shareholders

Note 3.

billion, primarily representing cash expenditures for severance and implementation costs, of which $ billion is associated with our Biopharma segment. From the start of this program through September 29, 2024, we incurred costs under this program of $ billion, of which $ billion is associated with our Biopharma segment (including $ billion of restructuring charges).

B. Manufacturing Optimization Program

In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold, which is expected to include operational efficiencies, network structure changes, and product portfolio enhancements. The first phase of this program is focused on operational efficiencies and we expect costs for this first phase to total approximately $ billion, primarily representing cash expenditures for severance and implementation costs, all of which is associated with our Biopharma segment. These costs will be recorded primarily in 2024, with cash outlays expected primarily in 2025 and 2026. From the start of this program through September 29, 2024, we incurred costs under this program of $ billion, substantially all of which is restructuring costs for our Biopharma segment.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

$ $ $ Asset impairments

Exit costs

Restructuring charges/(credits)(a)

Transaction costs(b)

Integration/pre-integration costs and other(c)

Restructuring charges and certain acquisition-related costs

Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net

()

Additional depreciation––asset restructuring recorded in our condensed consolidated statements of operations as follows(d):

Cost of sales Selling, informational and administrative expenses

Total additional depreciation––asset restructuring

Implementation costs recorded in our condensed consolidated statements of operations as follows(e):

Cost of sales Selling, informational and administrative expenses Research and development expenses Total implementation costs Total costs associated with acquisitions and cost-reduction/productivity initiatives$ $ $ $

(a) million for the three months ended September 29, 2024 (primarily including charges for our Realigning our Cost Base Program) and charges of $ billion for the nine months ended September 29, 2024 (including charges of $ billion for our Manufacturing Optimization Program and credits of $ million for our Realigning our Cost Base Program). Amounts associated with our Biopharma segment for the three and nine months ended October 1, 2023 were not material.

(b)

(c)

(d)

(e)

$ $ $ Provision/(credit)

Utilization and other(b)

()()()()

Balance, September 29, 2024(c)

$ $ $ $

(a) billion) and Other noncurrent liabilities ($ million).

(b)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4.

)$()$()$()Interest expense

Net interest expense(a)

Net (gains)/losses recognized during the period on equity securities

() () Income from collaborations, out-licensing arrangements and sales of compound/product rights()()()()Net periodic benefit costs/(credits) other than service costs()()()()

Certain legal matters, net(b)

Certain asset impairments(c)

Haleon equity method (income)/loss(d)

()()()()

Other, net(e)

()()()Other (income)/deductions––net$ $ $ $

(a) billion Seagen acquisition in December 2023 and (ii) higher interest expense driven by the remaining balance of our $ billion of commercial paper issued in the fourth quarter of 2023 as part of the financing for our acquisition of Seagen. The increase in net interest expense in the first nine months of 2024 reflects (i) higher interest expense driven by our $ billion aggregate principal amount of senior unsecured notes issued in May 2023, as well as the remaining balance of the $ billion of commercial paper issued in the fourth quarter of 2023, both part of the financing for our acquisition of Seagen and (ii) a decrease in interest income due to lower investment balances after completion of our $ billion Seagen acquisition in December 2023.

(b)

(c) million intangible asset impairment charge, associated with our Biopharma segment that represents IPR&D related to a Phase 3 study for the treatment of DMD, which reflects unfavorable clinical trial results. The first nine months of 2023 primarily represented intangible asset impairment charges, including (i) $ million associated with Other business activities, related to IPR&D and developed technology rights for acquired software assets and reflected unfavorable pivotal trial results and updated commercial forecasts, and (ii) $ million associated with our Biopharma segment resulting from the discontinuation of a study related to an out-licensed IPR&D asset for the treatment of prostate cancer.

(d)

(e) million related to the expected sale of of our facilities resulting from the discontinuation of our DMD program. The first nine months of 2024 also includes, among other things, a $ million gain on the partial sale of our investment in Haleon in the first quarter of 2024 and dividend income of $ million from our investment in ViiV. The third quarter and first nine months of 2023 included, among other things, a $ million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion. The first nine months of 2023 included, among other things, dividend income of $ million from our investment in ViiV and $ million from our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary.

$ $ $

Intangible assets––Developed technology rights(b)

Total

$ $ $ $ $

(a)

(b)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 5.

% for the third quarter of 2024, compared to % for the third quarter of 2023, and was % for the first nine months of 2024, compared to ()% for the first nine months of 2023. The effective tax rate for the third quarter of 2024 is primarily a result of the jurisdictional mix of earnings and, to a lesser extent, tax benefits related to the closing of IRS audits covering multiple tax years. The positive effective tax rate for the third quarter of 2023 reflects a tax benefit on a pre-tax loss. The increase in the effective tax rate for the first nine months ended September 29, 2024, compared to the first nine months ended October 1, 2023, was primarily due to the non-recurrence of tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years in the second quarter of 2023 partially offset by tax benefits related to the closing of the IRS audits covering multiple tax years.

We elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $ billion repatriation tax liability on accumulated post-1986 foreign earnings over eight years through 2026. The sixth annual installment was paid by its April 15, 2024 due date. The seventh annual installment is due April 15, 2025 and is reported in current Income taxes payable as of September 29, 2024. The remaining liability is reported in noncurrent Other taxes payable. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks.

For the year ended December 31, 2023, our cash paid for income taxes, net of refunds, was $ billion, of which $ billion was paid in the U.S.

B. Tax Contingencies

We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation.

The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS. During the third quarter of 2024, we effectively settled the audit of Pfizer’s federal income tax returns for years 2016-2018. Tax years 2019-2024 are open but not under audit. All other tax years are closed. In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions dating back to 2012.

See Note 5D in our 2023 Form 10-K.

C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)

)$()$()$()Unrealized holding gains/(losses) on derivative financial instruments, net()

Reclassification adjustments for (gains)/losses included in net income/(loss)

()()()()() () Unrealized holding gains/(losses) on available-for-sale securities, net ()()

Reclassification adjustments for (gains)/losses included in net income/(loss)

() () () ()Reclassification adjustments related to amortization of prior service costs and other, net()()()()Reclassification adjustments related to curtailments of prior service costs and other, net () ()) $ $

(a) million as of September 29, 2024 and $ million as of December 31, 2023 were held in restricted trusts for U.S. non-qualified employee benefit plans.

(b)

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis––The carrying value of Long-term debt, excluding the current portion, was $ billion as of September 29, 2024 and $ billion as of December 31, 2023. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $ billion as of September 29, 2024 and $ billion as of December 31, 2023.

The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

$ Available-for-sale debt securities Held-to-maturity debt securities Total Short-term investments$ $ Long-term investments

Equity securities with readily determinable fair values(b)

$ $ Available-for-sale debt securities Held-to-maturity debt securities

Private equity securities at cost(b)

Total Long-term investments$ $ Equity-method investments Total long-term investments and equity-method investments$ $ Held-to-maturity cash equivalents$ $

(a)

(b).

Debt Securities

$ $()$ $ $ $ $ $ $()$

Government and agency––U.S.

Corporate and other () ()

Held-to-maturity debt securities

Time deposits and other

Government and agency––non-U.S.

Total debt securities$ $ $()$ $ $ $ $ $ $()$

Any expected credit losses to these portfolios would be immaterial to our financial statements.

Equity Securities

)$ $()$ Less: Net (gains)/losses recognized during the period on equity securities sold during the period()()()()

Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)

$ $ $ $

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(b) million and upward adjustments of $ million. Impairments, downward and upward adjustments were not material to our operations in the third quarters and first nine months of 2024 and 2023.

$ Current portion of long-term debt, principal amount

Other short-term borrowings, principal amount(a)

Total short-term borrowings, principal amount

Net fair value adjustments related to hedging and purchase accounting

Net unamortized discounts, premiums and debt issuance costs()()

Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted

$ $

(a)

$ Net fair value adjustments related to hedging and purchase accounting Net unamortized discounts, premiums and debt issuance costs()()Total long-term debt, carried at historical proceeds, as adjusted$ $

. We may seek to protect against possible declines in the reported net investments of our foreign business entities.

Interest Rate Risk––Our interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

$ $ $ $ $ Interest rate contracts

Derivatives not designated as hedging instruments:

Foreign exchange contracts$ $ Total$ $ $ $

(a) billion as of September 29, 2024 and $ billion as of December 31, 2023.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

)$ $ $

Amount excluded from effectiveness testing and amortized into earnings(c)

— —

Derivative Financial Instruments in Fair Value Hedge Relationships:

Interest rate contracts

()— — — —

Hedged item

() — — — — Derivative Financial Instruments in Net Investment Hedge Relationships:

Foreign exchange contracts

— — ()

Amount excluded from effectiveness testing and amortized into earnings(c)

— —

Non-Derivative Financial Instruments in Net Investment Hedge Relationships(d):

Foreign currency long-term debt— — ()

Derivative Financial Instruments Not Designated as Hedges:

Foreign exchange contracts

— — — —

Gains/(Losses)
Recognized in OID(a)

Gains/(Losses)
Recognized in OCI(a)

Gains/(Losses)

Reclassified from

OCI into OID and COS(a)

Nine Months Ended(MILLIONS)Sept. 29, 2024Oct. 1, 2023Sept. 29, 2024Oct. 1, 2023Sept. 29, 2024Oct. 1, 2023Derivative Financial Instruments in Cash Flow Hedge Relationships: Interest rate contracts$— $— $ $ $ $

Foreign exchange contracts(b)

— — ()

Amount excluded from effectiveness testing and amortized into earnings(c)

— — Derivative Financial Instruments in Fair Value Hedge Relationships:

Interest rate contracts

()— — — —

Hedged item

() — — — —

Derivative Financial Instruments in Net Investment Hedge Relationships:

Foreign exchange contracts

— — ()

Amount excluded from effectiveness testing and amortized into earnings(c)

— —

Non-Derivative Financial Instruments in Net Investment Hedge Relationships(d):

Foreign currency long-term debt— — () Derivative Financial Instruments Not Designated as Hedges:

Foreign exchange contracts

— — — — $ $ $()$ $ $

(a)

(b)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

million in the third quarter of 2024;

•a net gain of $ million in the first nine months of 2024;

•a net gain of $ million in the third quarter of 2023; and

•a net gain of $ million in the first nine months of 2023.

The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $ million within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately years and relates to foreign currency debt.

(c)

(d) million and $ million, respectively.

$()$ $ $()$

(a)

million, for which we have posted collateral of $ million with a corresponding amount reported in Short-term investments. As of September 29, 2024, the aggregate fair value of our derivative financial instruments that are in a net receivable position was $ million, for which we have received collateral of $ million with a corresponding amount reported in Short-term borrowings, including current portion of long-term debt.

Note 8.

$ Work-in-process Raw materials and supplies

Inventories(a)

$ $

Noncurrent inventories not included above(b)

$ $

(a)

(b)

B. Other Current Liabilities

Other current liabilities include, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $ million as of September 29, 2024 and $ billion as of December 31, 2023.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

million and $ million of our trade payables to suppliers who participate in these financing arrangements were outstanding.

Note 9.

$()$ $ $()$

Brands(b)

() () Licensing agreements and other () ()

(a)

(b)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 10.

$ $ $ $ $ Interest cost Expected return on plan assets()()()()()()Amortization of prior service cost/(credit) ()()

Actuarial (gains)/losses

() Special termination benefits Net periodic benefit cost/(credit) reported in income$()$()$ $ $()$() Pension Plans U.S.InternationalPostretirement
PlansNine Months Ended(MILLIONS)Sept. 29, 2024Oct. 1, 2023Sept. 29, 2024Oct. 1, 2023Sept. 29, 2024Oct. 1, 2023Service cost$ $ $ $ $ $ Interest cost Expected return on plan assets()()()()()()Amortization of prior service cost/(credit) ()()

Actuarial (gains)/losses

Curtailments ()() ()Special termination benefits Net periodic benefit cost/(credit) reported in income$()$()$ $ $()$()

The components of net periodic benefit cost/(credit) other than the service cost component are primarily included in Other (income)/deductions––net (see Note 4).

million to our U.S. Pension Plans and $ million to our International Pension Plans from our general assets, which include direct employer benefit payments.

Note 11.

$()$ $ Discontinued operations––net of tax() Net income/(loss) attributable to Pfizer Inc. common shareholders$ $()$ $

(a) billion and $ billion of net costs in the third quarter and first nine months of 2023, respectively, from Other business activities to Biopharma to conform to the current period presentation.

(b) million recorded in the first quarter of 2024 (see Note 13C). Biopharma’s earnings also include dividend income from our investment in ViiV of $ million in the third quarter of 2024 and $ million in the third quarter of 2023, and $ million in the first nine months of 2024 and $ million in the first nine months of 2023. Biopharma’s earnings in the third quarter and first nine months of 2023 include approximately $ billion and $ billion, respectively, of inventory write-offs and related charges to Cost of sales mainly due to lower-than-expected demand for our COVID-19 products.

(c)

(d) million related to the expected sale of of our facilities resulting from the discontinuation of our DMD program. Earnings in the first nine months of 2024 also includes restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ billion (primarily recorded in Restructuring charges and certain acquisition-related costs). Earnings in the first nine months of 2023 included, among other items, net losses on equity securities of $ million recorded in Other (income)/deductions––net. See Notes 3 and 4.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

$ $ $

International:

Developed Markets

()Emerging Markets ()

Total revenues

$ $ $ $

C. Other Revenue Information

Significant Customers

In October 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. starting in November 2023. In connection with this agreement, we recorded a non-cash revenue reversal of $ billion in the fourth quarter of 2023 related to the expected return of an estimated million treatment courses of EUA-labeled U.S. government inventory. In the first quarter of 2024, we recorded a non-cash favorable final adjustment of $ million to reflect million EUA-labeled treatment courses returned through February 29, 2024, which were converted to a volume-based credit that supports continued access to Paxlovid through a U.S. government patient assistance program operated by Pfizer. In the third quarter of 2024, in connection with this amended agreement, we also supplied at no cost to the U.S. government or taxpayers a U.S. SNS of million treatment courses to enable future pandemic preparedness through 2028, and recorded revenue of $ million. While we are recognizing revenue as the million treatment courses are delivered, there is no cash consideration for these treatment courses.

Revenues from the U.S. government comprised % of total revenues for the three months ended September 29, 2024 and % for both the nine months ended September 29, 2024 and October 1, 2023. Revenues from the U.S. government as a percentage of total revenues for the three months ended October 1, 2023 were not material. For information on our significant wholesale customers, see Note 17C in our 2023 Form 10-K.

Significant Revenues by Product

$ $ $

GLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA)

$ $ $ $ Primary Care$ $ $ $

Eliquis(a)

Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism

Paxlovid(b)

COVID-19 in certain high-risk patients Prevnar familyActive immunization to prevent pneumonia, invasive disease and otitis media caused by Streptococcus pneumoniae

Comirnaty

Active immunization to prevent COVID-19

Nurtec ODT/VyduraAcute treatment of migraine and prevention of episodic migraine

Abrysvo

Active immunization to prevent RSV infection

Premarin family

Symptoms of menopause

FSME-IMMUN/TicoVac

Active immunization to prevent tick-borne encephalitis disease

All other Primary CareVarious Specialty Care$ $ $ $ Vyndaqel familyATTR-CM and polyneuropathy Xeljanz

RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis, ankylosing spondylitis

Enbrel (Outside the U.S. and Canada)

RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis

SulperazonBacterial infections ZaviceftaBacterial infections

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Inflectra

Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis

GenotropinReplacement of human growth hormone ZithromaxBacterial infections BeneFIXHemophilia B

Oxbryta(d)

Sickle cell disease CibinqoAtopic dermatitis

All other Hospital(e)

Various

All other Specialty CareVarious Oncology$ $ $ $ IbranceHR-positive/HER2-negative metastatic breast cancer

Xtandi(f)

mCRPC, nmCRPC, mCSPC, nmCSPC

Padcev

Locally advanced or metastatic urothelial cancer

Oncology biosimilars(g)

Various

AdcetrisHodgkin lymphoma and certain T-cell lymphomas InlytaAdvanced RCC Lorbrena

ALK-positive metastatic NSCLC

BosulifPhiladelphia chromosome–positive chronic myelogenous leukemia

Braftovi/Mektovi

Metastatic melanoma in patients with a BRAFV600E/K mutation and for metastatic NSCLC in patients with a BRAFV600E mutation; and, for Braftovi, in combination with Erbitux (cetuximab)(h) for the treatment of BRAFV600E-mutant mCRC after prior therapy

Tukysa

Unresectable or metastatic HER2-positive breast cancer; RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer

Tivdak

Recurrent or metastatic cervical cancer

Talzenna

In combination with Xtandi (enzalutamide) for adult patients with HRR gene-mutated mCRPC; treatment of BRCA gene-mutated, HER2-negative, inoperable or recurrent breast cancer

All other Oncology

Various

PFIZER CENTREONE(i)

$ $ $ $

PFIZER IGNITE

$ $ $ $

BIOPHARMA

$ $ $ $

PFIZER U.S. COMMERCIAL DIVISION (U.S. Primary Care and U.S. Specialty Care)

PFIZER ONCOLOGY DIVISION

PFIZER INTERNATIONAL COMMERCIAL DIVISION

Total Alliance revenues included above$ $ $ $

Total Royalty revenues included above

$ $ $ $

(a)

(b) million of revenue recorded in connection with the creation of the U.S. SNS. The first nine months of 2024 also includes a $ million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash revenue reversal of $ billion recorded in the fourth quarter of 2023, reflecting million EUA-labeled treatment courses returned by the U.S. government through February 29, 2024 versus the estimated million treatment courses that were expected to be returned as of December 31, 2023.

(d)

(e)

(f)

(g)

(h)

(i)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

billion and $ billion, respectively, as of September 29, 2024, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods. Of these amounts, current contract terms provide for expected delivery of product with contracted revenue from 2024 through 2028, the timing of which may be renegotiated. Remaining performance obligations are based on foreign exchange rates as of the end of our fiscal third quarter of 2024 and exclude arrangements with an original expected contract duration of less than one year. Remaining performance obligations associated with contracts for other products and services were not significant as of September 29, 2024 or December 31, 2023.

Deferred Revenues––Our deferred revenues primarily relate to advance payments received or receivable from various government or government sponsored customers for supply of Paxlovid and Comirnaty. The deferred revenues related to Paxlovid and Comirnaty totaled $ billion as of September 29, 2024, with $ billion and $ billion recorded in current liabilities and noncurrent liabilities, respectively. The deferred revenues related to Paxlovid and Comirnaty totaled $ billion as of December 31, 2023, with $ billion and $ billion recorded in current liabilities and noncurrent liabilities, respectively. The decrease in Paxlovid and Comirnaty deferred revenues during the first nine months of 2024 was primarily driven by amounts recognized in Product revenues as we delivered the products to our customers (including $ million associated with the U.S. SNS for Paxlovid) as well as the aforementioned $ million favorable final adjustment recorded in the first quarter of 2024 for Paxlovid, partially offset by additional advance payments received in the first nine months of 2024 as we entered into amended contracts. During the third quarter and first nine months of 2024, we recognized revenue of approximately $ billion and $ billion, respectively, that was included in the balance of Paxlovid and Comirnaty deferred revenues as of December 31, 2023. The Paxlovid and Comirnaty deferred revenues as of September 29, 2024 will be recognized in Product revenues proportionately as we transfer control of the products to our customers and satisfy our performance obligations under the contracts, with the amounts included in current liabilities expected to be recognized in Product revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Product revenues from 2025 through 2028. Deferred revenues associated with contracts for other products were not significant as of September 29, 2024 or December 31, 2023.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

GENERAL

The following MD&A is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the condensed consolidated financial statements and related notes in Item 1. Financial Statements in this Form 10-Q.

References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although foreign exchange rate changes are part of our business, they are not within our control and because they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.

In the first quarter of 2024, we reclassified royalty income (substantially all of which is related to our Biopharma segment) from Other (income)/deductions––net and began presenting Royalty revenues as a separate line item within Total revenues in our consolidated statements of operations. Prior-period amounts have been recast to conform to the current presentation.

OVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK

Our Business and Strategy––Pfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives. Our 2024 key priorities are:

•Achieve world-class oncology leadership

•Deliver next wave of pipeline innovation

•Maximize performance of our new products

•Expand margins by realigning our cost base

•Allocate capital to enhance shareholder value

One way we believe we will be more efficient, effective and able to execute on these five strategic priorities is through technology, including artificial intelligence.

We manage our commercial operations through a global structure consisting of three operating segments: Biopharma, PC1 and Pfizer Ignite. Biopharma is the only reportable segment. See Note 13A.

In the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program (Realigning Our Cost Base Program) that aims to realign our costs with our longer-term revenue expectations. In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold (Manufacturing Optimization Program), which is expected to include operational efficiencies, network structure changes, and product portfolio enhancements. See Note 3. For a description of anticipated savings related to these programs, see the Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives section within MD&A.

For additional information about our business, strategy and operating environment, see the Item 1. Business section and Overview of Our Performance, Operating Environment, Strategy and Outlook section within MD&A of our 2023 Form 10-K.

Our Business Development Initiatives––We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities. For a description of the more significant recent transactions through February 22, 2024, the filing date of our 2023 Form 10-K, see Note 2 in our 2023 Form 10-K. See Note 2 for significant recent activities.

Our Third Quarter 2024 and First Nine Months of 2024 Performance

Total Revenues––Total revenues increased $4.2 billion, or 31%, in the third quarter of 2024 to $17.7 billion from $13.5 billion in the third quarter of 2023, reflecting an operational increase of $4.3 billion, or 32%, partially offset by an unfavorable impact of foreign exchange of $133 million, or 1%. The operational increase was primarily driven by growth from Paxlovid, revenues from legacy Seagen products acquired in December 2023 and growth from the Vyndaqel family, partially offset by declines in Xeljanz and Ibrance. Excluding contributions from Paxlovid and Comirnaty, Total revenues increased $1.7 billion, or 14%, operationally.

Total revenues increased $880 million, or 2%, in the first nine months of 2024 to $45.9 billion from $45.0 billion in the first nine months of 2023, reflecting an operational increase of $1.3 billion, or 3%, partially offset by an unfavorable impact of foreign exchange of $411 million, or 1%. The operational increase was primarily driven by revenues from legacy Seagen

products acquired in December 2023 as well as growth from the Vyndaqel family, Paxlovid and Eliquis, partially offset by declines from Comirnaty. Excluding contributions from Paxlovid and Comirnaty, Total revenues increased $4.6 billion, or 13%, operationally.

See the Total Revenues by Geography and Total Revenues––Selected Product Discussion sections for more information, including a discussion of key drivers of our revenue performance. Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues anticipated in the fall and winter seasons, and Paxlovid revenues trend with infection rates. See also The Global Economic Environment––COVID-19 section below for information about our COVID-19 products. For information regarding the primary indications or class of certain products, see Note 13C.

Income/(Loss) from Continuing Operations Before Provision/(Benefit) for Taxes on Income (Loss)–– Income from continuing operations before provision/(benefit) for taxes on income/(loss) in the third quarter of 2024 was $4.7 billion, compared to a loss of $3.4 billion in the third quarter of 2023, primarily due to (i) higher revenues, (ii) a decrease in Cost of sales and (iii) net gains on equity securities in the third quarter of 2024 versus net losses on equity securities in the third quarter of 2023, partially offset by (iv) higher net interest expense and (v) a charge in the third quarter of 2024 to Other (income)/deductions––net related to the discontinuation of our DMD program.

The increase in Income from continuing operations before provision/(benefit) for taxes on income of $2.8 billion, to $8.0 billion in the first nine months of 2024 from $5.2 billion in the first nine months of 2023, was primarily due to (i) a decrease in Cost of sales, (ii) higher revenues and (iii) net gains on equity securities in the first nine months of 2024 versus net losses on equity securities in the first nine months of 2023, partially offset by (iv) higher net interest expense, (v) increases in Restructuring charges and certain acquisition-related costs and Amortization of intangible assets and (vi) charges in 2024 to Other (income)/deductions––net related to the discontinuation of our DMD program.

See the Analysis of the Condensed Consolidated Statements of Operations section within MD&A and Note 4. For information on our tax provision and effective tax rate, see the Provision/(Benefit) for Taxes on Income/(Loss) section within MD&A and Note 5.

Our Operating Environment––We, like other businesses in our industry, are subject to certain industry-specific challenges. These include, among others, the topics listed below, as well as in the Item 1. Business––Government Regulation and Price Constraints and Item 1A. Risk Factors sections, and the Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment section of the MD&A of our 2023 Form 10-K.

Intellectual Property Rights and Collaboration/Licensing Rights––The loss, expiration or invalidation of intellectual property rights, patent litigation settlements and judgments, and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face increased generic competition over the next few years. While additional patent expiries will continue, we expect a moderate impact of reduced revenues due to patent expiries from 2024 through 2025. We anticipate a more significant impact of reduced revenues from patent expiries in 2026 through 2030 as several of our in-line products experience patent-based expirations. We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.

For additional information on patent rights we consider most significant to our business as a whole, see the Item 1. Business––Patents and Other Intellectual Property Rights section of our 2023 Form 10-K. For a discussion of recent developments with respect to patent litigation involving certain of our products, see Note 12A1.

Regulatory Environment/Pricing and Access––Government and Other Payor Group Pressures––Governments globally, as well as private third-party payors in the U.S., may use a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, drug formularies (including tiering and utilization management tools), cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), quality consistency evaluation processes and volume-based procurement. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In the U.S., we expect to see continued focus by Congress and the Presidential Administration on regulating drug pricing regardless of which party comes to power following the upcoming November 2024 elections. Implementation of the drug pricing provisions of the IRA, which was signed into law in August 2022, will continue over the next several years. In August 2023, the Biden Administration unveiled the first ten medicines subject to the Medicare Drug Price Negotiation Program (the Program), which requires manufacturers of select drugs to engage in a process with the federal government to set new Medicare prices which would go into effect in 2026. Eliquis was among the first ten medicines subject to the Program. On August 15, 2024, the U.S. government released the new Medicare price for Eliquis, which, effective January 1, 2026, will be $231.00 for a 30-day equivalent supply. The Eliquis Medicare price will be factored into our long-term financial planning, in accordance with our standard financial reporting and forecasting protocols. It is possible that more of our products could be selected in future years, which could, among other things, lead to

lower revenues prior to expiry of intellectual property protections. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. In addition, changes to the Medicaid Drug Rebate Program or the 340B Drug Pricing Program (the 340B Program), including legal or legislative developments at the federal or state level with respect to the 340B Program, could have a material impact on our business. See the Item 1. Business––Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and the Item 1A. Risk Factors––Pricing and Reimbursement sections, and the Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment section of the MD&A of our 2023 Form 10-K.

Impact of the July 2023 Tornado in Rocky Mount, North Carolina (NC)––Our manufacturing facility in Rocky Mount, NC was damaged by a tornado in July 2023. The facility is a key producer of sterile injectables and is responsible for manufacturing nearly 25 percent of all our sterile injectables, including anesthesia, analgesia, and micronutrients. Supply of medicines has recovered from the impact of the tornado.

We incurred losses in 2023 and 2024 that were partially offset by insurance recoveries received in 2023. We expect to record additional insurance recoveries in the fourth quarter of 2024.

Product Supply––We periodically encounter supply delays, disruptions and shortages, including due to voluntary product recalls and natural or man-made disasters. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines. In 2021, Pfizer recalled all lots of Chantix in the U.S. due to the presence of a nitrosamine, N-nitroso-varenicline, at or above the FDA interim acceptable intake limit. Regulatory authorities have issued updated guidance on nitrosamine acceptable intake levels. With this guidance, which included an updated intake level for N-nitroso-varenicline, we have started making regulatory submissions to potentially enable Chantix to return to market in the U.S. and in certain international markets.

Except for the impact of the tornado in Rocky Mount, NC discussed above, we have not seen a significant disruption of our supply chain in the first nine months of 2024 and through the date of filing of this Form 10-Q, and all of our manufacturing sites globally have continued to operate at or near normal levels. We continue to monitor industry demand for certain components and raw materials and implement mitigation strategies in an effort to reduce any potential risk or impact to product supply, including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible. For information on risks related to product manufacturing, see the Item 1A. Risk Factors––Product Manufacturing, Sales and Marketing Risks section of our 2023 Form 10-K.

Voluntary Withdrawal of Oxbryta––See the Product Developments section within MD&A.

The Global Economic Environment––In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles. See the Overview of Our Performance, Operating Environment, Strategy and Outlook––The Global Economic Environment section of the MD&A of our 2023 Form 10-K.

COVID-19––In response to COVID-19, we developed Paxlovid and collaborated with BioNTech to jointly develop Comirnaty. As part of our strategy for COVID-19, we are continuing to make significant investments in breakthrough science. This includes continuing to evaluate Comirnaty and Paxlovid, including against new variants of concern, developing variant adapted vaccine candidates and developing potential combination respiratory vaccines and potential next generation vaccines and therapies. We are also evaluating Paxlovid for additional populations. See the Product Developments section within MD&A.

In 2023, we principally sold Comirnaty globally under government contracts. In September 2023, Comirnaty transitioned to traditional commercial market sales in the U.S., triggered by the expiration of contracts and the COVID-19 vaccines from Pfizer and BioNTech purchased through them becoming either depleted or not used following the introduction of a new variant vaccine. Internationally, sales of Comirnaty in international developed markets were generally under government contracts in 2023, and in emerging markets, under a combination of private channels and government contracts; in both cases, we started transitioning to commercial markets in 2024. Due to the commercial market transition as well as the anticipated seasonality of demand for COVID-19 vaccinations, we expect approximately 60% of our 2024 global revenues for Comirnaty to be recorded in the fourth quarter.

In 2023, we principally sold Paxlovid globally to government agencies. On October 13, 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. in November 2023, with minimal uptake of NDA-labeled commercial product before January 1, 2024 (see Note 13C). Internationally, for Paxlovid, most markets have now transitioned to commercial markets, and we are expecting most revenue for Paxlovid to be generated through commercial channels in 2024.

For information on risks associated with our COVID-19 products, including certain assumptions made for purposes of our operational planning and financial projections and the uncertainty of future developments, as well as COVID-19 intellectual property disputes, see the Item 1A. Risk Factors—COVID-19, —Intellectual Property Protection and —Third-Party Intellectual

Property Claims sections of our 2023 Form 10-K, as well as Notes 12A1 and 13 and the Forward-Looking Information and Factors that May Affect Future Results section of this Form 10-Q.

Israel/Hamas Conflict––Our local operations have been impacted by the armed conflict between Israel and Hamas that began on October 7, 2023. For both the nine months ended September 29, 2024 and the fiscal year ended December 31, 2023, the business of our Israeli subsidiary represented less than 1% of our consolidated revenues and assets. We are closely monitoring developments in this conflict, including evaluating potential impacts to our business, customers, suppliers, employees, and operations in Israel and elsewhere in the Middle East that may impact global operations. At this time, longer term impacts to the Company are uncertain and subject to change.

Russia/Ukraine Conflict––Our local operations have been impacted by the armed conflict between Russia and Ukraine. For both the nine months ended September 29, 2024 and the fiscal year ended December 31, 2023, the business of our Russia and Ukraine subsidiaries represented less than 1% of our consolidated revenues and assets. While we are monitoring the effects of the conflict between Russia and Ukraine, the situation continues to evolve and the long-term implications, including the broader economic consequences of the conflict, potential additional sanctions, and actions by our customers or suppliers (including financial institutions) are difficult to predict at this time.

For information on risks associated with these conflicts, see the Item 1A. Risk Factors—Global Operations section of our 2023 Form 10-K.

SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

For a description of our significant accounting policies, see Note 1 in our 2023 Form 10-K. Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Acquisitions (Note 1D); Fair Value (Note 1E); Revenues (Note 1G); Asset Impairments (Note 1M); Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Note 1N); Tax Assets and Liabilities and Income Tax Contingencies (Note 1Q); Pension and Postretirement Benefit Plans (Note 1R); and Legal and Environmental Contingencies (Note 1S).

For a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements, see the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions section within MD&A of our 2023 Form 10-K. See also Note 1C in our 2023 Form 10-K for a discussion about the risks associated with estimates and assumptions.

For a discussion of a recently adopted accounting standard, see Note 1B.

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Total Revenues by Geography


The following presents worldwide Total revenues by geography:
	Three Months Ended
	Worldwide				U.S.				International				World-wide	U.S.	Inter-national
(MILLIONS)	Sept. 29, 2024		Oct. 1, 2023		Sept. 29, 2024		Oct. 1, 2023		Sept. 29, 2024		Oct. 1, 2023		% Change
Operating segments:
Biopharma	$	17,392	$	13,188	$	11,964	$	7,975	$	5,428	$	5,214	32	50	4
Pfizer CentreOne	285		293		76		79		210		214		(3)	(5)	(2)
Pfizer Ignite	25		10		25		10		—		—		*	*	—
Total revenues	$	17,702	$	13,491	$	12,064	$	8,064	$	5,638	$	5,427	31	50	4


	Nine Months Ended
	Worldwide				U.S.				International				World-wide	U.S.	Inter-national
(MILLIONS)	Sept. 29, 2024		Oct. 1, 2023		Sept. 29, 2024		Oct. 1, 2023		Sept. 29, 2024		Oct. 1, 2023		% Change
Operating segments:
Biopharma	$	44,987	$	44,051	$	29,218	$	22,939	$	15,769	$	21,112	2	27	(25)
Pfizer CentreOne	820		908		195		269		625		639		(10)	(27)	(2)
Pfizer Ignite	56		25		56		25		—		—		*	*	—
Total revenues	$	45,864	$	44,984	$	29,470	$	23,233	$	16,394	$	21,750	2	27	(25)


The following provides an analysis of the worldwide change in Total revenues by geographic areas in the third quarter of 2024 compared to the third quarter of 2023:
(MILLIONS)	Worldwide		U.S.		International
Operational growth/(decline):
Worldwide growth from Paxlovid	$	2,510	$	2,313	$	197
Revenues from legacy Seagen, which was acquired in December 2023	854		815		39
Worldwide growth from the Vyndaqel family, Eliquis, Xtandi and Nurtec ODT/Vydura, partially offset by worldwide declines from Xeljanz, Ibrance, the Prevnar family, Abrysvo and Inlyta	546		435		111
Worldwide growth from Comirnaty	119		169		(51)
Other operational factors, net	315		268		47
Operational growth/(decline), net	4,344		4,000		344

Unfavorable impact of foreign exchange	(133)		—		(133)
Total revenues increase/(decrease)	$	4,211	$	4,000	$	210


The following provides an analysis of the worldwide change in Total revenues by geographic areas in the first nine months of 2024 compared to the first nine months of 2023:
(MILLIONS)	Worldwide		U.S.		International
Operational growth/(decline):
Revenues from legacy Seagen, which was acquired in December 2023	$	2,440	$	2,333	$	107
Worldwide growth from the Vyndaqel family, Eliquis, Xtandi, Nurtec ODT/Vydura and Abrysvo, partially offset by declines from Xeljanz, Ibrance and Inlyta, while the Prevnar family was flat	1,967		1,563		404
Worldwide growth from Paxlovid	592		2,221		(1,629)
Worldwide decline from Comirnaty	(3,879)		—		(3,879)
Decline in oncology biosimilars, largely due to lower net price in the U.S.	(250)		(246)		(4)
Other operational factors, net	422		366		56
Operational growth/(decline), net	1,292		6,237		(4,945)

Unfavorable impact of foreign exchange	(411)		—		(411)
Total revenues increase/(decrease)	$	880	$	6,237	$	(5,356)

See the Total Revenues––Selected Product Discussion section within MD&A for additional analysis and Note 13C.

Product Revenue Deductions––Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.


The following presents information about product revenue deductions:
	Three Months Ended				Nine Months Ended
(MILLIONS)	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
Medicare rebates	$	1,801	$	286	$	3,278	$	718
Medicaid and related state program rebates	720		406		1,846		1,228
Performance-based contract rebates	1,836		1,363		4,884		3,784
Chargebacks	3,805		2,627		9,467		7,216
Sales allowances	1,569		1,732		4,654		4,841
Sales returns and cash discounts	1,123		379		1,474		1,130
Total(a)	$	10,855	$	6,793	$	25,603	$	18,918

(a)The increase in revenue deductions in the third quarter and first nine months of 2024 is primarily driven by the transition of Paxlovid and Comirnaty to commercial markets, our acquisition of Seagen in December 2023, and higher sales of other recently acquired products, partially offset in the first nine months of 2024 by a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash Paxlovid revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 (see Note 13C).

Product revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.

For information on our accruals for product revenue deductions, including the balance sheet classification of these accruals, see Note 1C.

Total Revenues––Selected Product Discussion

Biopharma


(MILLIONS)				Revenue				% Change
Product	Period	Global Revenues	Region	Sept. 29, 2024		Oct. 1, 2023		Total	Oper.	Operational Results Commentary
Eliquis	QTD	$1,617 Up 9% (operationally)	U.S.	$	1,002	$	883	13		Growth 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 patent-based exclusivity and generic competition in certain international markets.
			Int’l.	616		615		—	2
			Worldwide	$	1,617	$	1,498	8	9
	YTD	$5,534 Up 9% (operationally)	U.S.	$	3,677	$	3,296	12
			Int’l.	1,857		1,838		1	4
			Worldwide	$	5,534	$	5,135	8	9
Paxlovid	QTD	$2,703 Up * (operationally)	U.S.	$	2,313	$	—	*		QTD growth primarily driven by: • strong demand, particularly in the U.S., driven by higher utilization during a recent global COVID-19 wave; • the one-time contractual delivery of treatment courses to the U.S. SNS in the third quarter of 2024; and • no third quarter 2023 U.S. sales in anticipation of transition to commercial markets in November 2023. See Note 13C. YTD growth primarily driven by: • strong demand, particularly in the U.S., driven by higher utilization; • a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023; and • the one-time contractual delivery of treatment courses to the U.S. SNS in the third quarter of 2024, partially offset by: • lower contractual deliveries in most international markets as a result of the transition to traditional commercial market sales; and • lower demand in China, largely due to the non-recurrent surge in COVID-19 infection during the first quarter of 2023.
			Int’l.	389		202		93	97
			Worldwide	$	2,703	$	202	*	*
	YTD	$4,989 Up 13% (operationally)	U.S.	$	4,181	$	1,960	*
			Int’l.	807		2,454		(67)	(66)
			Worldwide	$	4,989	$	4,414	13	13
Prevnar family	QTD	$1,803 Down 2% (operationally)	U.S.	$	1,308	$	1,299	1		QTD decline primarily driven by fewer adult vaccinations in the U.S. and lower pediatric indication sales in most international developed markets and certain emerging markets, partially offset by growth in the pediatric indication in the U.S. reflecting recovered market share as a result of the Prevnar 20 launch in 2023, as well as strong uptake of the adult indication in certain international markets. YTD performance primarily driven by growth in the pediatric indication in the U.S. reflecting recovered market share as a result of the Prevnar 20 launch in 2023, as well as strong uptake of the adult indication in certain international markets, offset by fewer adult vaccinations in the U.S. and lower pediatric indication sales in most international developed markets and certain emerging markets.
			Int’l.	495		544		(9)	(7)
			Worldwide	$	1,803	$	1,843	(2)	(2)
	YTD	$4,853 Flat (operationally)	U.S.	$	3,289	$	3,252	1
			Int’l.	1,564		1,624		(4)	(1)
			Worldwide	$	4,853	$	4,877	—	—
Vyndaqel family	QTD	$1,447 Up 63% (operationally)	U.S.	$	960	$	511	88		Growth largely driven by continued strong demand, primarily in the U.S. and international developed markets.
			Int’l.	486		381		28	31
			Worldwide	$	1,447	$	892	62	63
	YTD	$3,907 Up 67% (operationally)	U.S.	$	2,572	$	1,329	94
			Int’l.	1,334		1,031		29	32
			Worldwide	$	3,907	$	2,360	66	67
Ibrance	QTD	$1,087 Down 12% (operationally)	U.S.	$	717	$	838	(14)		Declines primarily driven by lower demand due to competitive pressure globally and price decreases in certain international developed markets, partially offset by increased clinical trial supply orders in certain international developed markets versus prior year.
			Int’l.	371		406		(9)	(6)
			Worldwide	$	1,087	$	1,244	(13)	(12)
	YTD	$3,272 Down 9% (operationally)	U.S.	$	2,136	$	2,438	(12)
			Int’l.	1,135		1,197		(5)	(3)
			Worldwide	$	3,272	$	3,635	(10)	(9)
Comirnaty	QTD	$1,422 Up 9% (operationally)	U.S.	$	1,164	$	994	17		QTD growth largely driven by timing of stocking as a result of earlier approval of the new variant vaccine in the U.S. in 2024 compared to 2023, partially offset by lower contractual deliveries and demand in international markets. YTD decline largely driven by lower contractual deliveries and demand in international markets, reflecting the anticipated seasonality of demand for vaccinations and as certain markets, including the U.S., transition to traditional commercial market sales.
			Int’l.	258		312		(17)	(16)
			Worldwide	$	1,422	$	1,306	9	9
	YTD	$1,970 Down 66% (operationally)	U.S.	$	1,339	$	1,339	—
			Int’l.	631		4,519		(86)	(86)
			Worldwide	$	1,970	$	5,858	(66)	(66)


(MILLIONS)				Revenue				% Change
Product	Period	Global Revenues	Region	Sept. 29, 2024		Oct. 1, 2023		Total	Oper.	Operational Results Commentary
Xtandi	QTD	$561 Up 28% (operationally)	U.S.	$	561	$	440	28		Growth largely driven by strong demand due to uptake of the nmCSPC indication following approval in the fourth quarter of 2023.
			Int’l.	—		—		—	—
			Worldwide	$	561	$	440	28	28
	YTD	$1,474 Up 23% (operationally)	U.S.	$	1,474	$	1,202	23
			Int’l.	—		—		—	—
			Worldwide	$	1,474	$	1,202	23	23
Padcev	QTD	$409 *	U.S.	$	407	$	—	*		Growth driven by the acquisition of Seagen in the fourth quarter of 2023 as well as strong demand.
			Int’l.	2		—		*	*
			Worldwide	$	409	$	—	*	*
	YTD	$1,144 *	U.S.	$	1,128	$	—	*
			Int’l.	16		—		*	*
			Worldwide	$	1,144	$	—	*	*
Nurtec ODT/Vydura	QTD	$337 Up 45% (operationally)	U.S.	$	314	$	227	38		Growth primarily driven by strong demand in the U.S. and, to a much lesser extent, recent launches in international markets. YTD growth was partially offset by lower net price in the U.S. due to unfavorable changes in channel mix.
			Int’l.	23		6		*	*
			Worldwide	$	337	$	233	45	45
	YTD	$870 Up 35% (operationally)	U.S.	$	820	$	633	30
			Int’l.	50		13		*	*
			Worldwide	$	870	$	646	35	35
Xeljanz	QTD	$321 Down 35% (operationally)	U.S.	$	203	$	371	(45)		Declines driven primarily by decreased prescription volumes globally resulting from ongoing shifts in prescribing patterns related to label changes, as well as lower net price in the U.S. and the impact of regulatory exclusivity expiry in Canada.
			Int’l.	118		132		(11)	(7)
			Worldwide	$	321	$	503	(36)	(35)
	YTD	$818 Down 31% (operationally)	U.S.	$	459	$	794	(42)
			Int’l.	360		416		(13)	(11)
			Worldwide	$	818	$	1,210	(32)	(31)
Adcetris	QTD	$268 *	U.S.	$	260	$	—	*		Growth driven by the acquisition of Seagen in the fourth quarter of 2023.
			Int’l.	8		—		*	*
			Worldwide	$	268	$	—	*	*
	YTD	$804 *	U.S.	$	784	$	—	*
			Int’l.	20		—		*	*
			Worldwide	$	804	$	—	*	*
Inlyta	QTD	$247 Down 1% (operationally)	U.S.	$	150	$	153	(2)		Declines primarily driven by lower demand in the U.S. as well as lower volumes and lower net price in international markets, partially offset by higher demand in China.
			Int’l.	97		98		(2)	—
			Worldwide	$	247	$	252	(2)	(1)
	YTD	$736 Down 4% (operationally)	U.S.	$	442	$	476	(7)
			Int’l.	294		297		(1)	1
			Worldwide	$	736	$	773	(5)	(4)
Abrysvo	QTD	$356 Down 5% (operationally)	U.S.	$	318	$	375	(15)		QTD decline primarily due to a slower start to the RSV season in 2024 in the U.S. as well as higher U.S. sales in the third quarter of 2023 due to launch stocking for the older adult indication, partially offset by launch uptake in certain international markets as well as launch of the maternal indication in the U.S. in December 2023. YTD growth primarily driven by U.S. launches of the older adult indication in July 2023 and the maternal indication in December 2023, as well as launch uptake in certain international markets.
			Int’l.	38		—		*	*
			Worldwide	$	356	$	375	(5)	(5)
	YTD	$557 Up 48% (operationally)	U.S.	$	490	$	375	31
			Int’l.	66		—		*	*
			Worldwide	$	557	$	375	48	48

Pfizer CentreOne


(MILLIONS)				Revenue				% Change
Operating Segment	Period	Global Revenues	Region	Sept. 29, 2024		Oct. 1, 2023		Total	Oper.	Operational Results Commentary
PC1	QTD	$285 Down 2% (operationally)	U.S.	$	76	$	79	(5)		Declines primarily driven by lower manufacturing of divested and other third-party products under manufacturing and supply agreements, partially offset by growth in manufacturing-related services.
			Int’l.	210		214		(2)	(1)
			Worldwide	$	285	$	293	(3)	(2)
	YTD	$820 Down 9% (operationally)	U.S.	$	195	$	269	(27)
			Int’l.	625		639		(2)	(1)
			Worldwide	$	820	$	908	(10)	(9)

See the Item 1. Business—Patents and Other Intellectual Property Rights section of our 2023 Form 10-K for information regarding the expiration of various patent rights, Note 12 for a discussion of recent developments concerning patent and product

litigation relating to certain of the products discussed above and Note 13C for additional information regarding the primary indications or class of the selected products discussed above.

Costs and Expenses


Costs and expenses follow:
	Three Months Ended							Nine Months Ended
(MILLIONS)	September 29, 2024			October 1, 2023			% Change	September 29, 2024			October 1, 2023			% Change
Cost of sales	$	5,263		$	9,269		(43)	$	11,942		$	17,391		(31)
Percentage of Total revenues	29.7		%	68.7		%		26.0		%	38.7		%
Selling, informational and administrative expenses	3,244			3,281			(1)	10,456			10,196			3
Research and development expenses	2,598			2,711			(4)	7,787			7,864			(1)
Acquired in-process research and development expenses	13			67			(80)	20			122			(84)
Amortization of intangible assets	1,312			1,179			11	3,927			3,466			13
Restructuring charges and certain acquisition-related costs	313			155			*	1,669			377			*
Other (income)/deductions—net	243			181			34	2,030			381			*

Third Quarter of 2024 vs. Third Quarter of 2023 and First Nine Months of 2024 vs. First Nine Months of 2023

Cost of Sales

Cost of sales decreased $4.0 billion in the third quarter of 2024, primarily due to:

•the non-recurrence of a non-cash charge of $5.6 billion recorded in the third quarter of 2023 for inventory write-offs and related charges ($4.7 billion for Paxlovid and $0.9 billion for Comirnaty),

partially offset by:

•an unfavorable change in sales mix of $1.5 billion, primarily driven by higher sales of Paxlovid and Comirnaty, including a charge for the 50% gross profit split with BioNTech and applicable royalty expenses; and

•an impact of $490 million from our Seagen acquisition, inclusive of the amortization of the fair value step-up of inventory.

Cost of sales decreased $5.4 billion in the first nine months of 2024, primarily due to:

•the non-recurrence of the aforementioned non-cash charge of $5.6 billion recorded in the third quarter of 2023; and

•a favorable change in sales mix of $845 million, primarily driven by lower sales of Comirnaty,

partially offset by:

•an impact of $1.4 billion from our Seagen acquisition, inclusive of the amortization of the fair value step-up of inventory.

The decrease in Cost of sales as a percentage of revenues in the third quarter and the first nine months of 2024 reflects the non-recurrence of the aforementioned non-cash charge of $5.6 billion recorded in the third quarter of 2023.

Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues and related cost of sales anticipated in the fall and winter seasons. See also Overview of Our Performance, Operating Environment, Strategy and Outlook —The Global Economic Environment ––COVID-19 section for information about our COVID-19 products.

Selling, Informational and Administrative Expenses

Selling, informational and administrative expenses were relatively flat in the third quarter of 2024, primarily due to:

•a decrease of $210 million due to lower U.S. healthcare reform fees primarily related to Paxlovid and Comirnaty,

largely offset by:

•an increase of $165 million in marketing and promotional expenses for recently launched and acquired products.

Selling, informational and administrative expenses increased $260 million in the first nine months of 2024, primarily due to:

•an increase of $600 million in marketing and promotional expenses for recently launched and acquired products,

partially offset by:

•a decrease of $310 million for marketing and promotional expenses for Paxlovid.

Research and Development Expenses

Research and development expenses decreased $113 million in the third quarter and $77 million in the first nine months of 2024, primarily due to:

•lower spending of $430 million in the third quarter and $930 million in the first nine months related to certain ongoing vaccine programs and as a result of our cost realignment program,

partially offset by:

•a net increase in spending of $310 million in the third quarter and $850 million in the first nine months mainly to develop certain product candidates acquired from Seagen.

Amortization of Intangible Assets

Amortization of intangible assets increased $133 million in the third quarter of 2024 and $461 million in the first nine months of 2024, primarily driven by:

•increases of $140 million in the third quarter and $400 million in the first nine months from our December 2023 acquisition of Seagen; and

•increases of $120 million in the third quarter and $360 million in the first nine months related to assets reclassified in 2023 from IPR&D to developed technology rights,

partially offset by:

•decreases of $130 million in the third quarter and $350 million in the first nine months related to changes in asset lives and fully amortized assets.

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

Realigning our Cost Base Program––This program is expected to deliver net cost savings of at least $4 billion, to be achieved primarily from 2023 through 2024.

Manufacturing Optimization Program––The first phase of this multi-phased program is expected to deliver savings of approximately $1.5 billion by the end of 2027, some of which is expected to begin being realized in 2025.

Certain qualifying costs for these programs in all periods since inception were recorded and reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income/(Loss). See the Non-GAAP Financial Measure: Adjusted Income /(Loss) section within MD&A.

For a description of our programs, as well as the anticipated and actual costs, see Note 3A. The program savings discussed above may be rounded and represent approximations. In addition to these programs, we continuously monitor our operations for cost reduction and/or productivity opportunities, especially in light of patent-based and regulatory exclusivity expiries as well as the expiration of collaborative arrangements for various products. Improvement of operating margin will continue to be an important focus for the Company.

Seagen acquisition––In connection with our acquisition of Seagen, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $1 billion of annual cost synergies, to be achieved by 2026. The one-time costs to generate these synergies are expected to be approximately $1.5 billion, incurred primarily from 2023 through 2025.

Other (Income)/Deductions—Net

The unfavorable period-over-period changes of $62 million in the third quarter of 2024 and $1.6 billion for the first nine months of 2024 were primarily driven by higher net interest expense and a charge in the third quarter of 2024 related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program, partially offset by net gains on equity securities in 2024 versus net losses on equity securities in 2023. See Note 4.

Provision/(Benefit) for Taxes on Income/(Loss)


	Three Months Ended							Nine Months Ended
(MILLIONS)	September 29, 2024			October 1, 2023			% Change	September 29, 2024			October 1, 2023			% Change
Provision/(benefit) for taxes on income/(loss)	$	234		$	(964)		*	$	393		$	(320)		*
Effective tax rate on continuing operations	5.0		%	28.8		%		4.9		%	(6.2)		%

For information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, see Note 5.


Cash paid for income taxes, net of refunds, consisted of:
	Year Ended December 31,
(MILLIONS)	2023		2022		2021
United States	$	1,923	$	3,867	$	4,455
International	1,224		4,000		2,972
Total	$	3,147	$	7,867	$	7,427

Changes in Tax Laws––Many countries outside the U.S. have enacted legislation for global minimum taxation resulting from the Organization for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting “Pillar 2” project. The EU has approved a directive requiring member states to incorporate the OECD provisions into their respective domestic laws, and countries outside the EU are also enacting the provisions into their domestic law. The provisions are generally effective for Pfizer in 2024, though significant details and guidance around the provisions are still pending. Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business, and such impact could be material to our results of operations. We continue to monitor pending OECD guidance and legislation enactment and implementation by individual countries.

PRODUCT DEVELOPMENTS

A comprehensive update of Pfizer’s development pipeline was published as of October 29, 2024 and is available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

This section provides information as of the date of this filing about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.

The table below includes filing and approval milestones for products that have occurred in the last twelve months and generally does not include approvals that may have occurred prior to that time. The table includes filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).

Products

PRODUCT

INDICATION OR PROPOSED INDICATION

APPROVED/FILED^

U.S.

JAPAN

Prevnar 20/Prevenar 20

(Vaccine)

Active immunization to prevent invasive disease and pneumonia caused by the 20 Streptococcus pneumoniae (pneumococcus) serotypes in the vaccine in adults ages 18 years and older.

Approved

June

2021

Approved

February

2022

Approved

August

2024

Active immunization to prevent invasive pneumococcal disease caused by the 20 Streptococcus pneumoniae (pneumococcal) serotypes contained in the vaccine in infants and children six weeks through 17 years of age, and for the prevention of otitis media in infants six weeks through five years of age caused by the original seven serotypes contained in Prevnar(a).

Approved

April

2023

Approved

March

2024

Approved

March

2024

TicoVac
(Vaccine)

Active immunization to prevent tick-borne encephalitis in individuals 1 year of age and older

Approved

August

2021

Approved

March

2024

Nurtec ODT/Vydura

(rimegepant)

Acute treatment of migraine with or without aura in adults

Approved

February

2020

Approved

April

2022

Prevention of episodic migraine in adults

Approved

May

2021

Approved

April

2022

Penbraya

(Vaccine)

Active immunization to prevent serogroups ABCWY meningococcal infections in adolescents and young adults 10 through 25 years of age

Approved

October

2023

Filed

June

2023

Abrysvo
(Vaccine)

Active immunization of pregnant individuals for the prevention of lower respiratory tract disease caused by RSV in infants from birth through 6 months of age

Approved

August

2023

Approved

August

2023

Approved

January

2024

Active immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 60 years and older

Approved

May

2023

Approved

August

2023

Approved

March

2024

Active immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 18-59 years of age

Approved

October

2024

Filed

June

2024

Velsipity (etrasimod)

Moderately to severely active ulcerative colitis in adults

Approved

October

2023

Approved

February

2024

Filed

June

2024

Braftovi (encorafenib) and Mektovi (binimetinib)(b)

BRAFV600E-mutant metastatic non-small cell lung cancer in adult patients

Approved

October

2023

Approved

August

2024

Elrexfio (elranatamab)

Triple-class relapsed/refractory multiple myeloma in adult patients

Approved

August

2023

Approved

December

2023

Approved

March

2024

Talzenna (talazoparib)

Combination with Xtandi (enzalutamide) for adult patients with HRR gene-mutated mCRPC(c)

Approved

June

2023

Approved

January

2024

Approved

January

2024

Treatment of adult patients with germline breast cancer susceptibility gene (gBRCA)1/2-mutations, who have human epidermal growth factor receptor 2-negative (HER2-) locally advanced (LA) or metastatic breast cancer (MBC)

Approved

October

2018

Approved

June

2019

Approved

January

2024

Beqvez (fidanacogene elaparvovec)(d)

Moderate to severe hemophilia B in adults

Approved

April

2024

Approved

July

2024

Filed

June

2024

Xtandi (enzalutamide)(e)

nmCSPC with biochemical recurrence at high risk for metastasis (high-risk BCR)

Approved

November

2023

Approved

April

2024

Hympavzi

(marstacimab-hncq)

Hemophilia A and B

Approved

October

2024

Filed

October

2023

Filed

February

2024

Emblaveo

(aztreonam-avibactam)(f)

Treatment of infections in adult patients caused by Gram-negative bacteria with limited or no treatment options

Approved

April

2024

Padcev

(enfortumab vedotin-ejfv)(g)

In combination with Keytruda®(h) (pembrolizumab) for locally advanced or metastatic urothelial cancer in adults

Approved

December

2023

Approved

August

2024

Approved

September

2024

Tivdak

(tisotumab vedotin-tftv)(i)

Recurrent or metastatic cervical cancer with disease progression on or after first-line therapy

Approved

April

2024

Filed

February

2024

Filed April 2024

Comirnaty (COVID-19 Vaccine, mRNA) 2024-2025 Formula, Omicron KP.2-adapted(j)

Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 12 years of age and older

Approved August 2024

Approved September 2024

Comirnaty (COVID-19 Vaccine, mRNA) 2024-2025 Formula, Omicron JN.1-adapted

Active immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 6 months of age and older

Approved

July

2024

Approved

August

2024

Ngenla (somatrogon)(k)

Adult growth hormone deficiency

Filed

June

2024

Adcetris

(brentuximab vedotin)(l)

Relapsed/refractory diffuse large B-cell lymphoma

Filed

July

2024

^ For the U.S., the filing date is the date on which the FDA accepted our submission. For the EU, the filing date is the date on which the EMA validated our submission.

(a)Listed indication applies to U.S. only. For the EU, approved indications are pneumococcal invasive disease pneumonia and otitis media. For Japan, approved indication is invasive pneumococcal disease.

(b)Pierre Fabre is the Marketing Authorization Holder for Braftovi (encorafenib) and Mektovi (binimetinib) in the EU. We have exclusive rights to Braftovi and Mektovi in the U.S., Canada and certain emerging markets, and Ono Pharmaceutical Co., Ltd., Medison Pharma and Pierre Fabre Laboratories have exclusive rights in all other markets.

(c)Listed indication applies to U.S. only. EU indication (all comers): mCRPC in whom chemotherapy is not clinically indicated; Japan indication: BRCA gene-mutated mCRPC.

(d)Being developed in collaboration with Spark Therapeutics, Inc. In July 2024, Beqvez (previously Durveqtix) received Conditional Marketing Authorization in the EU.

(e)Being jointly developed and commercialized with Astellas Pharma Inc.

(f)Being developed in collaboration with AbbVie. AbbVie has the exclusive commercialization rights to this investigative therapy in the U.S. and Canada; Pfizer leads the joint development program and has commercialization rights in all other countries.

(g)Being jointly developed and commercialized with Astellas Pharma Inc.

(h)Keytruda® is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc.

(i)Being developed in collaboration with Genmab A/S. The April 2024 approval date in the U.S. refers to the conversion of a prior accelerated approval to full approval.

(j)In September 2024, the European Commission (EC) approved the Pfizer/BioNTech Omicron KP.2-adapted monovalent COVID-19 vaccine for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals 6 months of age and older. U.S. approval (August 2024) is for individuals 12 years of age and older, with EUA granted for individuals 6 months through 11 years of age.

(k)Being developed in collaboration with OPKO Health, Inc.

(l)Being developed in collaboration with Takeda. Takeda has ex-U.S./Canada rights.

The following provides information about additional indications and new drug candidates in late-stage development:


	PRODUCT/CANDIDATE	PROPOSED DISEASE AREA
LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS FOR IN-LINE AND IN-REGISTRATION PRODUCTS	Ibrance (palbociclib)(a)	ER+/HER2+ metastatic breast cancer
	Talzenna (talazoparib)	Combination with Xtandi (enzalutamide) for DNA Damage Repair-deficient mCSPC
	Braftovi (encorafenib) and Erbitux® (cetuximab)(b)	First-line BRAFV600E-mutant mCRC
	Paxlovid (nirmatrelvir; ritonavir)	COVID-19 in high-risk children (6-11 years of age; >88lbs)
	Litfulo (ritlecitinib)	Vitiligo
	Elrexfio (elranatamab)	Multiple myeloma double-class exposed
		Newly diagnosed multiple myeloma post-transplant maintenance
		Newly diagnosed multiple myeloma transplant-ineligible
		2nd line + relapsed refractory multiple myeloma
	Eliquis (apixaban)(c)	Venous thromboembolism (pediatric)
	Padcev (enfortumab vedotin)(d)	Cisplatin-ineligible/decline muscle-invasive bladder cancer
		Cisplatin-eligible muscle-invasive bladder cancer
	Tukysa (tucatinib)	HER2+ adjuvant breast cancer
		2nd line/3rd line HER2+ metastatic breast cancer
		1st line HER2+ maintenance metastatic breast cancer
		1st line HER2+ metastatic colorectal cancer
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT	giroctocogene fitelparvovec (PF-07055480)(e)	Hemophilia A
	PF-06425090 (vaccine)	Immunization to prevent primary clostridioides difficile infection
	sasanlimab (PF-06801591)	Combination with Bacillus Calmette-Guerin for non-muscle-invasive bladder cancer
	VLA15 (PF-07307405) vaccine(f)	Immunization to prevent Lyme disease
	vepdegestrant (PF-07850327)(g)	Breast cancer metastatic - 2nd line ER+/HER2-
	inclacumab (PF-07940370)	Sickle cell disease
	Ibrance + vepdegestrant(g)	ER+/HER2- metastatic breast cancer
	dazukibart (PF-06823859)	Dermatomyositis, polymyositis
	disitamab vedotin(h)	1st line HER2 (≥IHC1+) metastatic urothelial cancer
	sisunatovir (PF-07923568)	Respiratory syncytial virus infection (adults)
	PF-07926307 (COVID-19/flu combo vaccine)(i)	Immunization to prevent COVID-19 infection and influenza
	sigvotatug vedotin (PF-08046047)	2nd line non-small cell lung cancer
	osivelotor (PF-07940367)	Sickle cell disease
	atirmociclib (PF-07220060)	2nd line metastatic breast cancer

(a)Being developed in collaboration with The Alliance Foundation Trials, LLC.

(b)Erbitux is a registered trademark of ImClone LLC. In the EU, we are developing in collaboration with the Pierre Fabre Group. In Japan, we are developing in collaboration with Ono Pharmaceutical Co., Ltd. We have exclusive rights to Braftovi and Mektovi in the U.S., Canada and certain emerging markets, and Ono Pharmaceutical Co., Ltd., Medison Pharma and Pierre Fabre Laboratories have exclusive rights in all other markets.

(c)Being developed in collaboration with BMS.

(d)Being jointly developed and commercialized with Astellas Pharma Inc.

(e)Being developed in collaboration with Sangamo Therapeutics, Inc.

(f)Being developed in collaboration with Valneva SE.

(g)Vepdegestrant is being developed in collaboration with Arvinas, Inc.

(h)Being developed in collaboration with RemeGen Co., Ltd.

(i)Being developed in collaboration with BioNTech.

The late stage development flu program has been removed from the table above as it represented the first-generation quadrivalent candidate. Pfizer is developing second-generation candidates with the goal of improving immunogenicity and potentially breadth of protection, including new trivalent formulations that match updated recommendations by the World Health Organization and the FDA’s Vaccines and Related Biological Products Advisory Committee. These candidates are currently in Phase 2. Pfizer will continue to evaluate its influenza vaccine program and discuss next steps with health authorities.

In August 2024, Pfizer announced Phase 3 top-line results for Pfizer and BioNTech’s combination mRNA vaccine candidate against influenza and COVID-19 in healthy individuals 18-64 years of age. The trial did not meet one of its primary immunogenicity objectives of non-inferiority against the influenza B strain despite obtaining higher influenza A responses and comparable COVID-19 responses versus the comparator vaccines. The companies are evaluating adjustments to the candidate and are discussing next steps with health authorities.

In September 2024, Pfizer announced that it is voluntarily withdrawing all lots of Oxbryta (voxelotor) for the treatment of sickle cell disease in all markets where it is approved. Pfizer is also discontinuing all active voxelotor clinical trials and expanded access programs worldwide. Pfizer’s decision is based on the totality of clinical data that now indicates the overall benefit of Oxbryta no longer outweighs the risk in the approved sickle cell patient population. The data suggest an imbalance in vaso-occlusive crises and fatal events, which requires further assessment. Pfizer has notified regulatory authorities about these findings and its decision to voluntarily withdraw Oxbryta from the market and discontinue distribution and clinical studies while further reviewing the available data and investigating the findings.

In July 2024, the EMA initiated a referral procedure under Article 20 of Regulation (EC) No 726/2004 for Oxbryta (voxelotor) to review the product’s benefits and risks. In October, the EC suspended the Oxbryta marketing authorization while the EMA’s review of data is ongoing. In addition, the FDA has initiated an evaluation of newly identified safety signals. The FDA also has placed the Oxbryta (voxelotor) investigational new drug application on clinical hold following Pfizer’s market withdrawal. Pfizer is working with the EMA, FDA, and other regulators globally in relation to this matter.

For additional information about our R&D organization, see Note 13 and the Item 1. Business—Research and Development section of our 2023 Form 10-K. For additional information regarding certain collaboration arrangements see the Item 1. Business—Collaboration and Co-Promotion Agreements section of our 2023 Form 10-K.

NON-GAAP FINANCIAL MEASURE: ADJUSTED INCOME/(LOSS)

Adjusted income/(loss) is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures. As such, we believe that investors’ understanding of our performance is enhanced by disclosing this measure. We use Adjusted income/(loss), certain components of Adjusted income/(loss) and Adjusted diluted EPS/(LPS) to present the results of our major operations––the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide––prior to considering certain income statement elements as follows:

Measure

Definition

Relevance of Metrics to Our Business Performance

Adjusted income/(loss)

Net income/(loss) attributable to Pfizer Inc. common shareholders(a) before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

•Provides investors useful information to:

◦evaluate the normal recurring operational activities, and their components, on a comparable year-over-year basis

◦assist in modeling expected future performance on a normalized basis

•Provides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management(b)

Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses and Adjusted other (income)/deductions––net

Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Other (income)/deductions––net(a), each before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income/(loss) measure

Adjusted diluted EPS/(LPS)

EPS/(LPS) attributable to Pfizer Inc. common shareholders––diluted(a) before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

(a)Most directly comparable GAAP measure.

(b)The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part versus three budgeted metrics, one of which is Adjusted diluted EPS (as defined for annual incentive compensation purposes), which is derived from Adjusted income/(loss) and accounts for 40% of the bonus pool funding tied to financial performance. Additionally, the payout for performance share awards is determined in part by Adjusted net income/(loss), which is derived from Adjusted income/(loss). Since 2022, we no longer exclude any expenses for acquired IPR&D from our non-GAAP Adjusted results but we continue to exclude certain of these expenses for our financial results for annual incentive compensation purposes. The bonus pool funding, which is largely based on financial performance, is adjusted by our R&D pipeline performance, as measured by three metrics, and performance against certain of our ESG metrics, and may be further modified by our Compensation Committee’s assessment of other factors.

Adjusted income/(loss) and its components and Adjusted diluted EPS/(LPS) are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors. Because of their non-standardized definitions, they may not be comparable to the calculation of similar measures of other companies and are presented to permit investors to more fully understand how management assesses performance. A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers. These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of Net income/(loss) attributable to Pfizer Inc. common shareholders, components of Net income/(loss) attributable to Pfizer Inc. common shareholders and EPS/(LPS) attributable to Pfizer Inc. common shareholders—diluted, respectively.

We also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures. We also use other tools designed to achieve the highest levels of performance. For example, our R&D organization has productivity targets, upon which its effectiveness is measured. In addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.

Adjusted Income/(Loss) and Adjusted Diluted EPS/(LPS)

Amortization of Intangible Assets—Adjusted income/(loss) excludes all amortization of intangible assets.

Acquisition-Related Items—Adjusted income/(loss) excludes certain acquisition-related items, which are composed of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition. We have made no adjustments for resulting synergies. Acquisition-related items may include purchase accounting impacts such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.

Discontinued Operations—Adjusted income/(loss) excludes the results of discontinued operations, as well as any related gains or losses on the disposal of such operations. We believe that this presentation is meaningful to investors because, while we review our product portfolio for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business. Restatements due to discontinued operations do not impact compensation or change the Adjusted income/(loss) measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.

Certain Significant Items—Adjusted income/(loss) excludes certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis. Certain significant items may be highly variable and difficult to predict. Furthermore, in some cases it is reasonably possible that they could reoccur in future periods. For example, although major non-acquisition-related cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, cost productivity or in response to generic or biosimilar entry or economic conditions. Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition, or legal matters related to divested products or businesses. Gains and losses on equity securities and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty, and we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business. Unusual items represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be non-recurring; or items that relate to products we no longer sell. See the Reconciliations of GAAP Reported to Non-GAAP Adjusted information—Certain Line Items below for a non-inclusive list of certain significant items and the Non-GAAP Financial Measure: Adjusted Income section within MD&A of our 2023 Form 10-K.

Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items


	Three Months Ended September 29, 2024
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income/(loss) attributable to Pfizer Inc. common shareholders(a), (b)		Earnings/(loss) per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported	$	5,263	$	3,244	$	243	$	4,465	$	0.78
Amortization of intangible assets	—		—		—		1,312
Acquisition-related items	(355)		(9)		(11)		465
Discontinued operations	—		—		—		6
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(c)	(36)		(13)		—		304


	Three Months Ended October 1, 2023
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income/(loss) attributable to Pfizer Inc. common shareholders(a), (b)		Earnings/(loss) per common share attributable to Pfizer Inc. common shareholders––diluted(f)
GAAP Reported	$	9,269	$	3,281	$	181	$	(2,382)	$	(0.42)
Amortization of intangible assets	—		—		—		1,179
Acquisition-related items	(127)		(2)		(8)		227
Discontinued operations	—		—		—		(13)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(c)	(20)		(71)		—		185

(Gains)/losses on equity securities	—		—		(393)		393
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		6		(6)
Other(d)	(216)		(4)		85		137
Income tax provision—non-GAAP items							(687)
Non-GAAP Adjusted	$	8,906	$	3,205	$	(128)	$	(968)	$	(0.17)


	Nine Months Ended October 1, 2023
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income/(loss) attributable to Pfizer Inc. common shareholders(a), (b)		Earnings/(loss) per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP Reported	$	17,391	$	10,196	$	381	$	5,488	$	0.96
Amortization of intangible assets	—		—		—		3,466
Acquisition-related items	(360)		(7)		(158)		778
Discontinued operations	—		—		—		(11)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(c)	(70)		(196)		—		450
Certain asset impairments(e)	—		—		(264)		264
(Gains)/losses on equity securities	—		—		(711)		711
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		—		—
Other(d)	(238)		(18)		21		242
Income tax provision—non-GAAP items							(1,478)
Non-GAAP Adjusted	$	16,723	$	9,974	$	(730)	$	9,908	$	1.73

(a)Items that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax. Our effective tax rates for GAAP Reported income/(loss) from continuing operations were: 5.0% and 4.9% in the three and nine months ended September 29, 2024, respectively, and 28.8% and (6.2)% in the three and nine months ended October 1, 2023, respectively. See Note 5. Our effective tax rates for non-GAAP Adjusted income/(loss) were 10.8% and 13.3% in the three and nine months ended September 29, 2024, respectively, and 22.3% and 10.4% in the three and nine months ended October 1, 2023, respectively.

(b)The amounts for the three and nine months ended September 29, 2024 and October 1, 2023 include reconciling amounts for Research and development expenses that are not material to our non-GAAP consolidated results of operations.

(c)Includes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions. See Note 3.

(d)For the third quarter and first nine months of 2024, the total Other (income)/deductions––net adjustments of $430 million and $971 million, respectively, include charges of (i) $420 million related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program and (ii) $45 million for the third quarter and $422 million for the first nine months for certain legal matters, primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer. For the first nine months of 2024, the total Other (income)/deductions––net adjustment of $971 million also includes charges of $312 million mostly related to (a) our equity-method accounting pro-rata share of intangible asset amortization, impairments and restructuring costs recorded by Haleon, as well as (b) adjustments to our equity-method basis differences and (c) Pfizer's share of investee capital transactions recognized by Haleon (see Note 2B), partially offset by a $150 million gain on the partial sale of our investment in Haleon. For the third quarter and first nine months of 2023, the total Cost of sales adjustments of $216 million and $238 million, respectively, primarily included $209 million in inventory losses, overhead costs related to the period in which the facility could not operate, and incremental costs resulting from tornado damage to our manufacturing facility in Rocky Mount, NC. For the third quarter of 2023, the total Other (income)/deductions––net adjustment of $85 million primarily included a $222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion, partially offset by charges of $71 million for certain legal matters, representing legal obligations related to pre-acquisition matters and certain product liability expenses related to products discontinued and/or divested by Pfizer. For the first nine months of 2023, the total Other (income)/deductions––net adjustment of $21 million primarily included (i) the $222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion, and (ii) dividend income of $211 million related to our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary, partially offset by charges of (i) $246 million for certain legal matters, primarily representing certain product liability and other legal expenses related to

products discontinued and/or divested by Pfizer and legal obligations related to pre-acquisition matters, and (ii) $92 million mostly related to our equity-method accounting pro-rata share of intangible asset amortization and impairments, costs of separating from GSK and restructuring costs recorded by Haleon.

(e)See Note 4.

(f)For the third quarter of 2023, basic weighted-average shares outstanding of 5,646 million (excluding common share equivalents) were used to calculate GAAP Reported and non-GAAP Adjusted Loss per common share attributable to Pfizer Inc. common shareholders––diluted.

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended
(MILLIONS)	September 29, 2024		October 1, 2023		Drivers of change
Cash provided by/(used in):
Operating activities	$	6,023	$	3,460	The change was primarily driven by the timing of receipts and payments in the ordinary course of business (which includes a decrease in deferred revenue driven by utilization of the U.S. government volume-based credit for Paxlovid), partially offset by a decrease from net income adjusted for non-cash items.
Investing activities	$	4,275	$	(21,282)	The change was driven mainly by $19.5 billion greater net redemptions of short-term investments in 2024, $3.5 billion of proceeds from the partial sale of the Haleon investment in 2024, as well as $1.4 billion greater proceeds from the sale of long-term investments including $1.2 billion in proceeds from our investment in Cerevel.
Financing activities	$	(12,026)	$	20,624	The change was driven mainly by $30.8 billion of proceeds from the issuance of long-term debt in 2023 as well as $2.1 billion greater repayments of commercial paper in 2024.

ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK

Our historically robust operating cash flows, which we expect to continue over time, is a key strength of our liquidity and capital resources and our primary funding source. We expect operating cash flows to be below typical levels this year largely due to the timing of certain payments and one-time expenses. Additionally, with an anticipated heavy weighting of revenue to the fourth quarter of 2024 due to the expected seasonality of certain products in our portfolio, a potentially higher level of cash collections may carry over into the first quarter of 2025. We continue to believe that with our ongoing operating cash flows, together with our financial assets, access to capital markets, revolving credit agreements, and available lines of credit, we have and will maintain the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future. For information about the sources and uses of our funds and capital resources, as well as our operating cash flows, see our Condensed Consolidated Statements of Cash Flows, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Equity, and the Analysis of the Condensed Consolidated Statements of Cash Flows section within MD&A. For information on our money market funds, available-for sale-debt securities and long-term debt, see Note 7.

For information about our diverse sources of funds, off-balance sheet arrangements, contractual and other obligations, global economic conditions and market risk, see the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A of our 2023 Form 10-K. For more information on guarantees and indemnifications, see Note 12B.

Credit Ratings––The cost and availability of financing are influenced by credit ratings, and an increase or decrease in our credit rating could have a beneficial or adverse effect on financing. Our long-term debt is rated high-quality by both S&P and Moody’s.

As of the date of the filing of this Form 10-Q, the following ratings have been assigned to our commercial paper and senior unsecured long-term debt:

NAME OF RATING AGENCY

Pfizer Short-Term Rating

Pfizer Long-Term Rating

Outlook/Watch

Moody’s

P-1

Stable Outlook

S&P

A-1

Stable Outlook

These ratings are not recommendations to buy, sell or hold securities and the ratings are subject to revision or withdrawal at any time by the rating organizations. Each rating should be evaluated independently of any other rating.

Debt Capacity––Lines of Credit––As of the date of the filing of this Form 10-Q, we had access to a total of $15 billion in committed U.S. revolving credit facilities, consisting of an $8.0 billion facility maturing in October 2025 and a $7.0 billion facility maturing in October 2029, which may be used for general corporate purposes including to support our global commercial paper borrowings. In addition to the U.S. revolving credit facilities, our lenders have provided us an additional

$281 million in lines of credit, of which $246 million expire within one year. Essentially all lines of credit were unused as of the date of the filing of this Form 10-Q.

Capital Allocation Framework––Our capital allocation framework is primarily devised to enhance shareholder value and is based on three core pillars: maintaining and growing our dividend over time, reinvesting in the business and making share repurchases after de-levering our balance sheet. In October 2024, our BOD declared a dividend of $0.42 per share, payable on December 2, 2024, to shareholders of record at the close of business on November 8, 2024. As of September 29, 2024, our remaining share-purchase authorization was $3.3 billion, with no repurchases in the first nine months of 2024. See Note 12 in our 2023 Form 10-K for more information on our publicly announced share-purchase plans.

In March 2024, we sold a portion of our investment in Haleon for $3.5 billion reducing our ownership interest from 32% to approximately 23% (see Note 2B). In the fourth quarter of 2024, we sold an additional portion of our investment in Haleon for $3.5 billion further reducing our ownership interest to approximately 15%. Pfizer intends to use the proceeds to support its capital allocation priorities. With the reduction of our Haleon ownership percentage, we will no longer apply the equity method to our investment in Haleon. We expect to begin accounting for our remaining investment in Haleon as an equity security with a readily determinable fair value, which is carried at fair value, with changes in fair value reported in Other (income)/deductions––net. We intend to continue to monetize our remaining 15% stake in Haleon in a disciplined fashion, with an objective of maximizing value for Pfizer shareholders.

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standard

See Note 1B.

Recently Issued Accounting Standards, Not Adopted as of September 29, 2024

Standard/Description

Effective Date

Effect on the
Financial Statements

In November 2023, the FASB issued final guidance to improve transparency of segment disclosures. The final guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, other segment items by reportable segment and a description of its composition, and requires all current annual disclosures be provided in interim periods.

2024 for annual reports and 2025 for interim reports. Early adoption is permitted.

This new guidance will result in increased disclosures in the notes to our financial statements.

In December 2023, the FASB issued final guidance to improve income tax disclosures. The final guidance requires enhanced disclosures primarily related to existing rate reconciliation and income taxes paid information.

2025 for annual reports. Early adoption is permitted.

This new guidance will result in increased disclosures in the notes to our financial statements.

FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This Form 10-Q contains forward-looking statements. We also provide forward-looking statements in other materials we release to the public, as well as public oral statements. Given their forward-looking nature, these statements involve substantial risks, uncertainties and potentially inaccurate assumptions.

We have tried, wherever possible, to identify such statements by using words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” “aim,” “seek,” “potential,” “hope” and other words and terms of similar meaning or by using future dates.

We include forward-looking information in our discussion of the following, among other topics:

•our anticipated operating and financial performance, including financial guidance and projections;

•reorganizations, business plans, strategy, goals and prospects;

•expectations for our product pipeline, in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, launches, clinical trial results and other developing data; revenue contribution and projections; potential pricing and reimbursement; potential market dynamics, including demand, market size and utilization rates; and growth, performance, timing of exclusivity and potential benefits;

•strategic reviews, capital allocation objectives, dividends and share repurchases;

•plans for and prospects of our acquisitions, dispositions and other business development activities, and our ability to successfully capitalize on growth opportunities and prospects;

•sales, expenses, interest rates, foreign exchange rates and the outcome of contingencies, such as legal proceedings;

•expectations regarding the impact of or changes to existing or new government regulations or laws;

•our ability to anticipate and respond to and our expectations regarding the impact of macroeconomic, geopolitical, health and industry trends, pandemics, acts of war and other large-scale crises; and

•manufacturing and product supply.

In particular, forward-looking information in this Form 10-Q includes statements relating to specific future actions, performance and effects, including, among others, the expected benefits of the organizational changes to our operations; our anticipated operating and financial performance; our ongoing efforts to respond to COVID-19, including our plans and expectations regarding Comirnaty and Paxlovid, and any potential future vaccines or treatments, including anticipated revenue and expectations for the commercial market for Comirnaty and Paxlovid; our expectations regarding the impact of COVID-19 on our business; the expected seasonality of demand for certain of our vaccines, including Comirnaty and the anticipated percentage of Comirnaty revenue to be recorded in the fourth quarter of 2024; expected patent terms; the expected impact of patent expiries and generic and biosimilar competition; the expected pricing pressures on our products and the anticipated impact to our business; the benefits expected from our business development transactions, including our December 2023 acquisition of Seagen; our anticipated cash flows and liquidity position; the anticipated costs, savings and potential benefits from certain of our initiatives, including our enterprise-wide Realigning our Cost Base Program, which we launched in October 2023 and our Manufacturing Optimization Program to reduce our cost of goods sold, which we announced in May 2024; our expectations regarding the impact from the 2023 tornado on our manufacturing facility in Rocky Mount, NC; our planned capital spending; and our capital allocation framework.

Given their nature, we cannot assure that any outcome expressed in these forward-looking statements will be realized in whole or in part. Actual outcomes may vary materially from past results and those anticipated, estimated, implied or projected. These forward-looking statements may be affected by underlying assumptions that may prove inaccurate or incomplete, or by known or unknown risks and uncertainties, including those described in this section and in the Item 1A. Risk Factors section in our 2023 Form 10-K.

Therefore, you are cautioned not to unduly rely on forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. You are advised, however, to consult any further disclosures we make on related subjects.

Some of the factors that could cause actual results to differ are identified below, as well as those discussed in the Item 1A. Risk Factors section in our 2023 Form 10-K and within MD&A. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. The occurrence of any of the risks identified below, in the Item 1A. Risk Factors section in our 2023 Form 10-K or within MD&A, or other risks currently unknown, could have a material adverse effect on our business, financial condition or results of operations, or we may be required to increase our accruals for contingencies. It is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties:

Risks Related to Our Business, Industry and Operations, and Business Development

•the outcome of R&D activities, including the ability to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, and/or regulatory approval and/or launch dates; the possibility of unfavorable pre-clinical and clinical trial results, including the possibility of unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data; risks associated with preliminary, early stage or interim data; the risk that pre-clinical and clinical trial data are subject to differing interpretations and assessments, including during the peer review/publication process, in the scientific community generally, and by regulatory authorities; and whether and when additional data from our pipeline programs will be published in scientific journal publications, and if so, when and with what modifications and interpretations; and uncertainties regarding the future development of our product candidates, including whether or when our product candidates will advance to future studies or phases of development or whether or when regulatory applications may be filed for any of our product candidates;

•our ability to successfully address comments received from regulatory authorities such as the FDA or the EMA, or obtain approval for new products and indications from regulators on a timely basis or at all;

•regulatory decisions impacting labeling, including the scope of indicated patient populations, product dosage, manufacturing processes, safety and/or other matters, including decisions relating to emerging developments regarding potential product impurities; uncertainties regarding the ability to obtain, and the scope of, recommendations by technical or advisory committees, and the timing of, and ability to obtain, pricing approvals and product launches, all of which could impact the availability or commercial potential of our products and product candidates;

•claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates, including claims and concerns that may arise from the conduct or outcome of post-approval clinical trials, pharmacovigilance or Risk Evaluation and Mitigation Strategies, which could impact marketing approval, product labeling, and/or availability or commercial potential;

•the success and impact of external business development activities, such as the December 2023 acquisition of Seagen, including the ability to identify and execute on potential business development opportunities; the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all; the ability to realize the anticipated benefits of any such transactions in the anticipated time frame or at all; the potential need for and impact of additional equity or debt financing to pursue these opportunities, which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing; challenges integrating the businesses and operations; disruption to business and operations relationships; risks related to growing revenues for certain acquired or partnered products; significant transaction costs; and unknown liabilities;

•competition, including from new product entrants, in-line branded products, generic products, private label products, biosimilars and product candidates that treat or prevent diseases and conditions similar to those treated or intended to be prevented by our in-line products and product candidates;

•the ability to successfully market both new and existing products, including biosimilars;

•difficulties or delays in manufacturing, sales or marketing; supply disruptions, shortages or stock-outs at our facilities or third-party facilities that we rely on; and legal or regulatory actions;

•the impact of public health outbreaks, epidemics or pandemics (such as COVID-19) on our business, operations and financial condition and results, including impacts on our employees, manufacturing, supply chain, sales and marketing, R&D and clinical trials;

•risks and uncertainties related to our efforts to continue to develop and commercialize Comirnaty and Paxlovid or any potential future COVID-19 vaccines, treatments or combinations, as well as challenges related to their manufacturing, supply and distribution, including, among others, the risk that as the market for COVID-19 products continues to become more endemic and seasonal, demand for our COVID-19 products has and may continue to be reduced or not meet expectations, or may no longer exist, which has and may continue to lead to reduced revenues, excess inventory on-hand and/or in the channel which, for Paxlovid and Comirnaty, resulted in significant inventory write-offs in 2023 and could continue to result in inventory write-offs, or other unanticipated charges; risks related to our ability to develop and commercialize variant adapted vaccines; challenges related to the transition to the commercial market for our COVID-19 products; uncertainties related to the public’s adherence to vaccines, boosters, treatments or combinations; risks related to our ability to accurately predict or achieve our revenue forecasts for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments; and potential third-party royalties or other claims related to Comirnaty or Paxlovid;

•trends toward managed care and healthcare cost containment, and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;

•interest rate and foreign currency exchange rate fluctuations, including the impact of currency devaluations and monetary policy actions in countries experiencing high inflation or deflation rates;

•any significant issues involving our largest wholesale distributors or government customers, which account for a substantial portion of our revenues;

•the impact of the increased presence of counterfeit medicines, vaccines or other products in the pharmaceutical supply chain;

•any significant issues related to the outsourcing of certain operational and staff functions to third parties;

•any significant issues related to our JVs and other third-party business arrangements, including modifications or disputes related to supply agreements or other contracts with customers including governments or other payors;

•uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions, such as inflation or interest rate fluctuations, and recent and possible future changes in global financial markets;

•the exposure of our operations globally to possible capital and exchange controls, economic conditions, expropriation, sanctions and/or other restrictive government actions, changes in intellectual property legal protections and remedies, unstable governments and legal systems and inter-governmental disputes;

•the impact of disruptions related to climate change and natural disasters, including uncertainties related to the impact of the tornado at our manufacturing facility in Rocky Mount, NC in 2023;

•any changes in business, political and economic conditions due to actual or threatened terrorist activity, geopolitical instability, political or civil unrest or military action, including the ongoing conflicts between Russia and Ukraine and in the Middle East and the resulting economic or other consequences;

•the impact of product recalls, withdrawals and other unusual items, including uncertainties related to regulator-directed risk evaluations and assessments, such as our ongoing evaluation of our product portfolio for the potential presence or formation of nitrosamines, and our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved and any potential regulatory or other impact on other sickle cell disease assets;

•trade buying patterns;

•the risk of an impairment charge related to our intangible assets, goodwill or equity-method investments;

•the impact of, and risks and uncertainties related to, restructurings and internal reorganizations, as well as any other corporate strategic initiatives and growth strategies, and cost-reduction and productivity initiatives, including any potential future phases, each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs, organizational disruption, adverse effects on employee morale, retention issues or other unintended consequences;

•the ability to successfully achieve our climate goals and progress our environmental sustainability and other ESG priorities;

Risks Related to Government Regulation and Legal Proceedings

•the impact of any U.S. healthcare reform or legislation or any significant spending reduction or cost control efforts affecting Medicare, Medicaid or other publicly funded or subsidized health programs, including the IRA, or changes in the tax treatment of employer-sponsored health insurance that may be implemented;

•U.S. federal or state legislation or regulatory action and/or policy efforts affecting, among other things, pharmaceutical product pricing, intellectual property, reimbursement or access or restrictions on U.S. direct-to-consumer advertising; limitations on interactions with healthcare professionals and other industry stakeholders; as well as pricing pressures for our products as a result of highly competitive biopharmaceutical markets;

•legislation or regulatory action in markets outside of the U.S., such as China or Europe, including, without limitation, laws related to pharmaceutical product pricing, intellectual property, medical regulation, environmental protections, reimbursement or access, including, in particular, continued government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs in those markets;

•legal defense costs, insurance expenses, settlement costs and contingencies, including without limitation, those related to legal proceedings and actual or alleged environmental contamination;

•the risk and impact of an adverse decision or settlement and risk related to the adequacy of reserves related to legal proceedings;

•the risk and impact of tax related litigation and investigations;

•governmental laws and regulations affecting our operations, including, without limitation, the IRA, changes in laws and regulations or their interpretation, including, among others, changes in tax laws and regulations internationally and in the U.S., the adoption of global minimum taxation requirements outside the U.S. generally effective in most jurisdictions since January 1, 2024 and potential changes to existing tax laws following the November 2024 U.S. elections;

Risks Related to Intellectual Property, Technology and Security

•any significant breakdown or interruption of our information technology systems and infrastructure (including cloud services);

•any business disruption, theft of confidential or proprietary information, security threats on facilities or infrastructure, extortion or integrity compromise resulting from a cyber-attack, which may include those using adversarial artificial intelligence techniques, or other malfeasance by, but not limited to, nation states, employees, business partners or others;

•risks and challenges related to the use of software and services that include artificial intelligence-based functionality and other emerging technologies;

•the risk that our currently pending or future patent applications may not be granted on a timely basis or at all, or any patent-term extensions that we seek may not be granted on a timely basis, if at all; and

•risks to our products, patents and other intellectual property, such as: (i) claims of invalidity that could result in patent revocation; (ii) claims of patent infringement, including asserted and/or unasserted intellectual property claims; (iii) claims we may assert against intellectual property rights held by third parties; (iv) challenges faced by our collaboration or licensing partners to the validity of their patent rights; or (v) any pressure, or legal or regulatory action by, various stakeholders or governments that could potentially result in us not seeking intellectual property protection or agreeing not to enforce or being restricted from enforcing intellectual property rights related to our products, including Comirnaty and Paxlovid.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this item is incorporated by reference from the discussion in the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk section within MD&A of our 2023 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.

During our most recent fiscal quarter, there has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Certain legal proceedings in which we are involved are discussed in Note 12A.

ITEM 1A. RISK FACTORS

We refer to the Overview of Our Performance, Operating Environment, Strategy and Outlook —Our Operating Environment and —The Global Economic Environment sections and the Forward-Looking Information and Factors That May Affect Future Results section within MD&A of this Form 10-Q and of our 2023 Form 10-K and to the Item 1A. Risk Factors section of our 2023 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following summarizes purchases of our common stock during the third quarter of 2024:


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share(a)		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Value of Shares That May Yet Be Purchased Under the Plan(b)
July 1 through July 28, 2024	14,581	$	27.73	—	$	3,292,882,444
July 29 through August 25, 2024	22,257	$	30.44	—	$	3,292,882,444
August 26 through September 29, 2024	57,730	$	29.02	—	$	3,292,882,444
Total	94,568	$	29.16	—

(a)Represents (i) 91,700 shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive programs and (ii) the open market purchase by the trustee of 2,868 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who deferred receipt of performance share awards.

(b)See the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk—Capital Allocation Framework section within MD&A of this Form 10-Q and Note 12 in our 2023 Form 10-K.

ITEM 5. OTHER INFORMATION

During the three months ended September 29, 2024, none of our directors or officers or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS


			Exhibit 31.1						Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			Exhibit 31.2						Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			Exhibit 32.1						Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			Exhibit 32.2						Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			Exhibit 101:
			EX-101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
			EX-101.SCH EX-101.CAL EX-101.LAB EX-101.PRE EX-101.DEF						Inline XBRL Taxonomy Extension Schema Inline XBRL Taxonomy Extension Calculation Linkbase Inline XBRL Taxonomy Extension Label Linkbase Inline XBRL Taxonomy Extension Presentation Linkbase Inline XBRL Taxonomy Extension Definition Document
			Exhibit 104						Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Pfizer Inc.
		(Registrant)


Dated:	November 4, 2024	/s/ Jennifer B. Damico
		Jennifer B. Damico Senior Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)

PFIZER INC - Quarter Report: 2024 September (Form 10-Q)

Similar companies