Pfizer Conference Call Highlights

May 5, 2014

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Pfizer (NYSE: PFE) on Monday afternoon reported its first quarter earnings. Shares of the company are down 2.7 percent or $0.83 per share to $29.92. Below are some key takeaways from its conference call:

Chairman and CEO, Ian Read:

• The proposal we announced publicly last Friday represented a substantial premium of 32 percent for AstraZeneca shareholders based on AstraZeneca’s closing
price of 37.82 on the day before speculation began regarding a potential proposal, a 39 percent premium to the closing price of 35.86 on the day before our January proposal, and a 22 percent premium to the unaffected all-time high closing price since the formation of the company in 1999.

• I would point out that our business has historically demonstrated seasonality of revenues, and this quarter was no different. In terms of product developments, we reported positive results from Prevnar 13 CAPiTA study in older adults, and announced FDA approvals including supplementary new drug applications for Xeljanz to include radiographic data in the label and for Eliquis for prophylaxis of deep vein thrombosis, as well as FDA approval of Nexium 24-hour for over-the-counter use for the treatment of frequent heart burn in adults 18 and over.

• For the full year revenue outlook, we anticipate key products will continue exhibiting growth and that operational growth in emerging markets will be in
the mid-single-digit range rather than in the 3 percent range we saw in this quarter. Typically, our sequential annual product revenue pattern exhibits relative strength in the late quarters compared to our first quarter. For the balance of 2014, we anticipate incremental revenue contributions from Eliquis, Xeljanz, Prevnar 13 Adult, Duavee and the expected launch of over the counter Nexium.

• Reflecting on the state of our business, I am pleased with our pipeline progress. We are continuing to see the benefit of the decisions we took over three years ago when we decided to focus our research and development in the areas where we have the most expertise and where the greatest unmet medical
need exists.

• Overall, I believe we are performing well in a challenging operating environment. Our pipeline is advancing. We have a strong track record when it comes to using capital to generate value, and we have an engaged and motivated work force that has embraced the culture of ownership. Collectively these are the elements of strategy that are helping to drive our overall business results

• Throughout this year you will see us taking action to execute on our plans to advance new therapies to patients, strengthen our commercial businesses, manage our cost structure, and deploy our capital in ways that yield the greatest value to our shareholders.

Frank D’Amelio, CFO:

• I also want to remind everyone that as a result of the full disposition of Zoetis on June 24, 2013, the financial results of the animal health business are reported as a discontinued operation in the consolidated statement of income from the first quarter 2013.

• Now let’s move on to the financials. First quarter 2014 revenues of approximately $11.4 billion decreased 9 percent year-over-year reflecting a 3 percent negative impact from foreign exchange and an operational decline of approximately 6 percent, driven mainly by the expiration on October 31, 2013, of the co-promotion term of the collaboration agreements for Enbrel in the U.S. and Canada, the ongoing expiration of the Spiriva collaboration in certain countries, continued erosion from branded Lipitor in the U.S. and most other developed markets, the loss of exclusivity and subsequent multi-source generic competition for Detrol LA in the U.S. and other product losses of exclusivity in certain markets.

• These were partially offset by the strong operational growth of Lyrica, Xalcori and Inlyta globally, Enbrel outside of the U.S. and Canada, Eliquis and Xeljanz, primarily in the U.S., the contribution from the collaboration to market generic medicines in Japan with Mylan. In addition, reported revenues included $57 million from transitional manufacturing and supply agreements with Zoetis.

• Adjusted diluted EPS of $0.57 increased 12 percent primarily due to an aggregate operational decrease of 3 percent and adjusted cost of sales, adjusted SI&A expenses, and adjusted R&D expenses primarily resulting from cost reduction and productivity initiatives, a lower effective tax rate, and fewer diluted weighted average shares outstanding due to our ongoing share repurchase program and the impact of the Zoetis exchange offer.

• Reported diluted EPS of $0.36 compared with $0.38 in the year-ago quarter was positively impacted by the above-mentioned items and lower restructuring and
asset impairment charges compared to the year-ago quarter. Reported results were negatively impacted by the previously mentioned year-over-year decrease in revenues and the non-recurrence of income from discontinued operations associated with our animal health business and the gain associated with the transfer of certain product rights to Pfizer’s JV with Hisun in China in the year-ago quarter. And finally, higher legal charges compared with the year-ago quarter.

• Now moving on to our 2014 financial guidance, historically our business has demonstrated seasonality of revenues, and this quarter is no different. That said, we are confirming all components of our adjusted 2014 financial guidance ranges, and as such continue to expect our adjusted revenue to be in the range of $49.2 to $51.2 billion.

• Foreign exchange negatively impacted first quarter revenues by 3 percent or $364 million and had a net positive impact of $195 million on the aggregate of adjusted cost of sales, adjusted SI&A expenses and adjusted R&D expenses. As a result, foreign exchange negatively impacted first quarter adjusted diluted EPS by approximately $0.01 compared to the year ago quarter.

• Because Pfizer recorded a number of charges during the first quarter 2014 relating primarily to the resolution of litigation related matters, Pfizer’s previously issued 2014 reported diluted EPS guidance is no longer valid. Updated reported diluted EPS guidance will be provided as soon as practical. As required by the U.K. takeover code, the Pfizer responsible officers including Ian, Doug Lankler, our General Counselor and me, confirm that the adjusted financial guidance provided has been properly compiled based on the same assumptions set out in the adjusted financial guidance issued on January 28, 2014, and prepared in accordance with the accounting policies of Pfizer.