Earnings Call Transcript - PFE Q4 2021

Operator, Operator

Good day, everyone, and welcome to Pfizer's Fourth Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chris Stevo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Chris Stevo, Senior Vice President and Chief Investor Relations Officer

Thank you, Sylvia. Good morning, everyone. Welcome to Pfizer's fourth quarter earnings call. I am joined today by Dr. Albert Bourla, our Chairman and CEO; Frank D’Amelio, our CFO; Mikael Dolsten, President of Worldwide Research and Development; Angela Hwang, Group President Pfizer Biopharmaceuticals Group; Aamir Malik, our Chief Business and Innovation Officer; and Doug Lankler, our General Counsel. We expect this call to last 90 minutes. The materials for this call and other earnings-related materials are on the Investor Relations section of pfizer.com. Please see our forward-looking statements disclaimer on Slide 3 and additional information regarding these statements and our non-GAAP financial measures is available in our earnings release and in our SEC Forms 10-K and 10-Q under risk factors. Forward-looking statements on the call are subject to substantial risks and uncertainties. Speak only as of the call’s original date, and we undertake no obligation to update or revise any of these statements. With that, I'll turn the call over to Albert.

Albert Bourla, Chairman and CEO

Thank you, Chris. Hello, everyone. 2021 was a watershed year for Pfizer, a year in which we set all-time highs in all major areas of focus for Pfizer. We reached an estimated 1.4 billion patients with our medicines and vaccines. That’s more than one out of every six people on Earth. Never before has Pfizer’s patient impact been so wide-reaching. We improved our ranking from fourth to second among large biopharma companies in the PatientView Global Survey. According to Morning Consult, 61% of Americans have a favorable view of Pfizer, which is up 33 points since January of 2020. Just last week, Fortune ranked us fourth on its annual World’s Most Admired Companies list, the highest ranking we have ever achieved. 95% of our colleagues said in an internal survey that they are proud to work for Pfizer, which ranks among the best in corporate America. We increased our investments in research and development from $8.9 billion in 2020 to $10.5 billion in 2021, and we initiated 13 pivotal clinical studies, the highest number ever for Pfizer. Last but not least, we grew revenues by 92% operationally to $81.3 billion and adjusted diluted EPS by 92% operationally to $4.42. Our success in leading the fight against COVID-19 has not only made a positive difference in the world, I believe it has fundamentally changed our company and our culture forever. Colleagues across Pfizer are inspired by what we have achieved and are more determined than ever to be part of the next potentially game-changing breakthrough. To that end, we are applying the lightspeed principles developed for our COVID-19 work to our other therapeutic areas to make sure we continue to move at the speed of science for the benefit of all patients. As a result, we believe we can do even better with each of these metrics in 2022, each one of them. Our full-year 2022 financial guidance, for example, includes for the first time ever a forecasted revenue midpoint that is triple-digit, $100 billion, and an adjusted diluted EPS midpoint of $6.45. While Comirnaty is having a significant positive impact on Pfizer’s financial performance, it’s the tremendous impact that COVID-19 vaccines have had on society that is most important. In the U.S. alone, the COVID-19 vaccination program is estimated to have saved more than 1 million lives and prevented more than 10 million hospitalizations, according to a December 2021 Commonwealth Fund Report. The economic impact is equally astonishing, astounding. According to a December 2021 Heartland Forward Report, the rapid deployment and wide availability of COVID-19 vaccines in the U.S. created an estimated economic savings of $438 billion in 2021 alone, which amounted to U.S. GDP being 2.3% higher than it otherwise would have been. I’m proud to say that Pfizer contributed significantly to these benefits given that approximately 6 out of 10 doses administered in the U.S. as of February 6, 2022, were Comirnaty. This is the value of our science, what our culture has enabled and what drives our people. Now I would like to speak to three factors that will help drive our growth going forward. The first is the long-term outlook for COVID-19 and why we believe we are well positioned to continue to lead the battle against this disease. Second, our thoughtful capital allocation strategy and why we believe it can help drive our growth in the second part of the decade. And third, how our commitment to ESG principles is designed to create sustainable growth for Pfizer to deliver meaningful value to patients and society. Let me start with the COVID-19 pandemic. Our scientists continue to monitor the SARS-CoV-2 virus and believe it is unlikely that it will be fully eradicated in the foreseeable future. They believe this for several reasons. The global distribution of the virus makes it difficult to contain. The virus has shown an ability to mutate often, making it difficult to stay ahead of it. And the data appear to show that natural infections do not lead to the type of durable protection needed to prevent all transmissions and viral mutation. As a result, people can become reinfected by the same or different strains over time. That said, we now have the tools in the form of vaccines and treatments that we believe will help enable us to not only better manage the pandemic, but also help countries move into an endemic phase. In other words, we believe these tools will help allow us to go back to normality and spend time with family and friends, travel, attend indoor dining and concerts, and enjoy many other activities while lowering the risk of overburdening hospitals and healthcare systems around the world. All of us at Pfizer are extremely proud of the role we have continued to play in bringing these tools to the world. Throughout 2021, we continued our efforts to bring our COVID-19 vaccine to more populations and to further ramp up our manufacturing and distribution capabilities. As a result, the market share of our Comirnaty vaccine has continued to grow, representing 70% of all doses distributed across the U.S. and EU as of February 5. When it comes to Paxlovid, we expect to produce 6 million treatment courses during the first quarter of 2022. Overall, we expect to produce 30 million courses in the first half of 2022 and 120 million courses for the full year, of course depending on the global need. Having recently received a conditional marketing authorization from the European Medicines Agency, Paxlovid has now received emergency or conditional authorization for use with certain populations in approximately 40 countries so far. We are in discussions with governments around the world and expect that as the number of authorizations increase, so will the number of contracts for this treatment, which could truly be a game changer. At Pfizer, we are keenly aware of our responsibility to continue to invest in R&D to maintain our leadership in providing these tools and other meaningful solutions to the world. That’s why we continue to develop and test different versions of our vaccine to potentially address variants of concern as they emerge, and why we are currently working on a new Omicron-based vaccine candidate and on a bivalent COVID-19 vaccine candidate. It’s also why just two months after receiving Emergency Use Authorization from the U.S. Food and Drug Administration for Paxlovid, we are already working on a potential next-generation oral COVID-19 treatment. Going forward, we are confident in our ability to maintain this leadership position because of our significant investments in R&D combined with our ability to move at the speed of science without compromising quality or safety, the strong credibility we have earned with governments, healthcare providers and consumers combined with our extensive global field presence, and our unparalleled capabilities for high-quality manufacturing at scale. Now the second thing I wanted to touch on is how we think about our capital allocation and to repeat once more our strategy. We feel that the entirety of our business continues to demonstrate a robust topline growth trajectory through 2025. Consensus estimates are beginning to slowly recognize this momentum. However, consensus estimates currently show our topline shrinking from 2025 to 2030. I want to repeat that this is inconsistent with our own plans. Our goal is to continue to be a growth company from 2025 to 2030, despite the impact of LOEs expected during that period. Our confidence in our ability to achieve that is underpinned by the momentum of our business, the durability of our COVID-19 offerings as I just described, the underestimated strength of our internal pipeline, and, of course, by our ability to deploy capital into growth-focused business development to access external science. Few words about them. We leverage business development opportunities to advance our business strategies and objectives. The strength of our balance sheet and cash flows allow us to pursue new business development opportunities going forward that could add at least $25 billion of risk-adjusted revenues to our 2030 top-line expectations. We expect to do this while still maintaining our growing dividend, as well as flexibility for other uses of our cash. The focus of our business development efforts will continue to be on compelling external science in the form of both later-stage assets, as well as earlier medical innovations, that have the potential to be breakthroughs for patients. Our focus will largely be in the therapeutic areas and platforms where we have the scientific skills and acumen to add substantial value and select the most successful targets. In addition, we feel that we have distinctive attributes such as world-class excellence in clinical development and unsurpassed manufacturing and commercial capabilities at scale that makes us a very attractive partner across a variety of deal arrangements. We believe the opportunities to deliver on this approach exist, and I will be personally focusing on this execution. I want to emphasize that despite our significant capital flexibility, we will never lower the scientific and financial standards we apply in our business development. As we pursue these opportunities, we will continue to be highly disciplined in our evaluation and prioritization processes. Since 2019, we have already invested almost $25 billion in business development transactions adding more than $13 billion, I repeat, in consensus 2030 revenue. I would point out that the $13 billion of consensus currently includes nothing for the Trillium assets, the Biohaven collaboration, or the recently announced mRNA deals, all of which have substantial potential. I see this pace of business development accelerating going forward, and I am confident it will be an important driver in ensuring Pfizer is a growth company in the back half of this decade. One highly visible example of our approach to business development is the recent investments we are making in mRNA technology and collaborations. mRNA has emerged as a versatile technology, with potential applications across many infectious diseases, cancer, rare genetic disorders and even autoimmune diseases. Although mRNA is not the holy grail, we believe the technology has the potential to have a game-changing impact on global health, which is why we have developed a robust mRNA strategy and are aggressively building our platform. While the pandemic has demonstrated that it’s not that easy to deliver mRNA vaccines at scale, Pfizer has emerged as a leader in this space. With decades of experience on our side, we’ve developed what is arguably the most efficient clinical development and vaccine manufacturing capabilities the world has ever seen. We also have rapidly scaled and built out new capabilities in record time by hiring nearly 2,400 new colleagues in these functions in a nine-month timeframe. Going forward, we plan to continue to invest to capitalize on the leadership we have built in terms of both mRNA R&D and manufacturing. In addition to these internal investments and improvements, we’re also making external investments to build out our capabilities in this space. For example, Pfizer recently has entered into four important business development deals to help advance our mRNA strategy. We are expanding our collaboration with BioNTech to use the existing platform to co-develop an mRNA vaccine candidate for herpes zoster virus to protect against shingles. Our agreement with Beam Therapeutics expands our mRNA efforts to another core therapeutic area for Pfizer, rare disease, with a four-year research collaboration for three targets for rare genetic diseases of the liver, muscle and central nervous system. We believe this will give us the potential to use mRNA to treat diseases, not just preventive treatment. Our agreement with Acuitas gives us the ability to collaborate with and license their proprietary lipid nanoparticle technology for up to 10 targets for mRNA vaccines and therapies. We believe this will give us greater independence in this space. And we have signed a strategic collaboration and licensing agreement with Codex DNA, a leader in the development of automated solutions for on-demand synthesis of genes and mRNA, potentially allowing enzymatic assembly of DNA at the front-end of the mRNA production process. This could possibly reduce the time to produce a new vaccine from three months down to two months. If successful, this would be an important differentiator when developing a vaccine for the flu, for example, as it would allow us to select a strain much closer to the start of any flu season. These deals represent only four pieces of a much bigger strategic puzzle. As we continue executing on our mRNA strategy, you should expect to see more targeted activity in this area. Of course, our business development activity in the last quarter went beyond executing on our mRNA strategy. The acquisition of Trillium builds on our strong track record of leadership in oncology, enhancing our hematology portfolio as we strive to improve outcomes for people living with blood cancers around the globe. Our strategic collaboration with Biohaven leverages our leading commercial capabilities in pain and women’s health with Biohaven's groundbreaking oral CGRP receptor antagonist, the only one approved in the U.S. for both acute and preventative treatment of migraine, so that we can potentially bring a valuable new treatment option to patients living with this debilitating neurological disease outside the U.S. And through the proposed acquisition of Arena we plan to leverage Pfizer’s leading research and global development capabilities to accelerate the clinical development of etrasimod for patients with immunoinflammatory diseases. Now, I'd like to share some details about Pfizer’s enhanced ESG strategy. The strategy is focused on six areas where we see opportunities to create a meaningful and measurable impact over the next decade: product innovation; equitable access and pricing; product quality and safety; diversity, equity and inclusion; climate change; and business ethics. Each quarter going forward, I will provide examples of how we are embedding ESG into all core areas of our business. This quarter, I will highlight our efforts to improve clinical trial diversity, to improve diversity within our colleague base, and help ensure equitable access to our COVID-19 vaccine and treatment. Last year, Pfizer published an industry-first retrospective analysis of demographic data of U.S. participants in 213 of our interventional clinical trials that initiated enrollment from 2011 through 2020. The analysis demonstrated that overall trial participation of Black or African American individuals was at the U.S. census level, 14.3% versus 13.4%, participation of Hispanic or Latino individuals was below U.S. census, 15.9% versus 18.5%, and female participation was at U.S. census 51.1% versus 50.8%. We published this analysis to be transparent and for it to serve as a baseline as we measure progress in this area. We believe that diversity in trials is a matter of equity and good science and are taking decisive steps designed to improve diversity in our trials. Our goal is to achieve racially and ethnically diverse participation at or above U.S. census or disease prevalence levels as appropriate in all our trials. The second item I want to highlight is the significant progress we are making in diversifying our colleague base, particularly at more senior-level positions. In the last three years, for example, we have increased the percentage of women at the Vice President level and above globally from 32% to 42%. Over the same timeframe, we have increased the percentage of minorities at the Vice President level and above in the U.S. from 19% to 25%. The third item I wanted to highlight is the progress we are making to help ensure our COVID-19 vaccine and oral treatment are accessible by everyone everywhere. I am thrilled to say that we remain on track to meet or exceed our goal of delivering at least 2 billion doses of our vaccine to low- and middle-income countries by the end of 2022, having just met our goal of delivering the first 1 billion by the end of 2021. I also want to highlight two data points about our 2 billion-dose commitment. One billion of these doses are being provided to the poorest countries completely free of charge, thanks to our agreement with the U.S. government. Pfizer is providing these doses to the U.S. government at a not-for-profit price, and the government is then providing them to the poorest countries for free. Also, the 1 billion doses we delivered in 2021 represented 37% of all doses we delivered last year. In terms of our oral COVID-19 treatment, we have signed a voluntary license agreement with the Medicines Patent Pool, which we hope will lead to expanded access pending country regulatory authorization or approval in 95 low- and middle-income countries that account for approximately 53% of the world’s population. Lastly, I'm pleased to announce that the Compensation Committee of our Board of Directors has been reviewing methods for linking executive compensation with ESG performance, which we expect to begin this year. For details regarding the impact of our ESG strategy on our business in 2021, please keep an eye out for Pfizer’s 2021 ESG Report, which will be published online in mid-March. In summary, 2021 was an outstanding year for Pfizer, and we look forward to continuing to apply the lessons learned from COVID to deliver breakthroughs for patients across all our therapeutic areas. We remain focused on being nimble, investing in our R&D organization and exploring dynamic partnerships that will enable us to fully realize the power of our science. None of this is possible without the contributions of our amazingly purpose-driven colleagues, who continue to rise to the challenge of addressing the world’s most devastating diseases. In 2021, our colleagues exceeded expectations. Therefore, we will once again use a part of the bonus pool that the Board approved for bonus-eligible colleagues and executives to provide a one-time special COVID-19 Circumstances Bonus to our non-bonus eligible colleagues across the board to reward them for their hard work and to help them cover personal, family and living expenses incurred because of the COVID-19 pandemic. With that, I will turn it over to Mikael to update you on our R&D efforts. After Mikael, Frank will provide financial details on the fourth quarter and our outlook for 2022. So Mikael?

Mikael Dolsten, President, Worldwide Research and Development

Thank you, Albert. I’m delighted to share updates from this quarter as we continue to deliver first-in-class science. Today, I will share updates from our COVID-19 programs and select other assets in our pipeline. Let’s start with Paxlovid. As the COVID-19 pandemic continues to burden public health, we have advanced the science on our novel oral antiviral therapeutic. Importantly, we see consistent, potent antiviral activity in vitro against all current variants of concern, including both Delta and Omicron. This would be expected from how the compound was designed. On the left, you can see a crystal structure showing how tightly nirmatrelvir binds into the active site of the Omicron variant. History has told us from the HIV protease field that the closer the therapeutic is designed to mimic the substrate, the harder it is for resistance to emerge. That combined with the essential nature of the protease, the short duration of treatment and the co-dosing with ritonavir to drug exposures that are over 5x to 6x the amount of compound needed to kill the virus in an in vitro assay, suggests there is a reduced risk for resistance. External data support our findings. In this slide, the lower values, the stronger potency, illustrated by nirmatrelvir being on the low end of the Y axis on the left having the most potent activity. Nirmatrelvir maintains in vitro potency in the low nanomolar range, as you can see in these graphs that include other authorized or approved therapeutics. On the left is in vitro data from a study done with the Icahn School of Medicine at Mount Sinai and Pfizer. Nirmatrelvir demonstrated potent antiviral activity as measured by IC50, a measure of drug efficacy indicating the concentration needed to inhibit infection by half. This is consistent with findings from the Rega Institute at KU Leuven in Belgium, shown on the right. We anticipate a New Drug Application decision by the FDA in the high-risk population in the second half of '22, pivotal readouts of our household contact and standard risk studies in the second quarter and second half of '22, respectively, and a study start in children 6 to 18 years old in the first quarter of '22. In the standard risk study, we are expanding enrollment by 750 non-hospitalized patients with symptomatic COVID-19, and vaccinated, standard-risk patients may also be eligible, provided their last SARS-CoV-2 vaccine dose was received at least 12 months prior to screening. This expansion will allow us to further evaluate the secondary endpoint seen in the interim analysis, which showed a 70% reduction in hospitalization and no deaths in the treated compared to placebo. We also are advancing work on a potential next generation SARS-CoV antiviral with the aim of achieving similar high clinical efficacy and pan-Coronavirus design properties that maintain activity, with a favorable safety profile, and counter potential viral resistance but without the need for ritonavir boosting. A first in human study start is expected in the second half of '22. Now, we also continue to advance vaccine development and have achieved Emergency Use Authorization for use in children as young as age 5. Effectiveness data for three doses of the vaccine for people 12 years and older, and early laboratory data observed with Delta and other variants of concern, including Omicron, suggest that people vaccinated with three doses of Comirnaty may have a higher degree of protection against both symptomatic and severe outcomes compared to two primary doses. Informed by these data, in addition to the immunobridging data, we are evaluating a third 3-microgram dose in our study of children six months through four years of age, with the belief that a third dose may be optimal for this age group. However, as pediatric cases and hospitalizations are at an all-time high, FDA urged us to start a rolling Emergency Use Authorization submission with the two-dose efficacy, immunogenicity and safety data we have accumulated thus far while we continue to collect data, including from third-dose administration. We plan to submit third-dose data once available. In the meantime, FDA has scheduled an Advisory Committee meeting for February 15 to consider the two-dose suggested data collected to-date. If Emergency Use Authorization of two doses is granted and the CDC recommends usage, parents will have the opportunity to begin a COVID-19 vaccination series for their children between 6 months and 4 years of age while awaiting potential authorization of a third dose. Turning to the adult population. In the wake of surging Omicron cases, in January we completed a laboratory analysis of the effect of a third dose boost of Comirnaty on live virus neutralization. Encouragingly, there was a more than 25-fold increase in Omicron live virus neutralizing titers observed between day of dose three and one month post-dose three. We observed a moderate 4-month post-dose three antibody decay for wild-type and Omicron variant. Between one month and four months post-dose three, neutralizing titers were 1.6- and 2-fold lower for wild-type and the Omicron variant, respectively. We’re now starting to see effects of a third dose boost in maintaining a high level of protection against Omicron in the real world. These data from Kaiser Permanente Southern California show Omicron-related emergency department visits without hospitalization on top, and hospitalizations on the bottom. Three doses of COMIRNATY provided better vaccine effectiveness against Omicron than two doses, and there was high vaccine effectiveness of three doses against Omicron-related hospitalization, similar to Delta-related hospitalization. We did see some waning of effectiveness against emergency department admissions due to Omicron three months or more after a third dose, which suggests the potential need for another boost of the current vaccine or an Omicron-based vaccine. We have started an Omicron-based vaccine candidate trial in adults 18 to 55 years of age. This study will evaluate more than 1,400 participants across three cohorts: Those who have already received two doses of the current vaccine 90 to 180 days prior to enrollment will receive one or two doses of the Omicron-based vaccine. Those who have already received three doses of the current vaccine 90 to 180 days prior to enrollment will receive one dose of the current vaccine or the Omicron-based vaccine. And those who are vaccine-naïve will receive three doses of the Omicron-based vaccine. This study is part of our science-based approach to develop a variant-based vaccine that we hope achieves a similar level of protection against Omicron as the current vaccine has with both wild-type and earlier variants, but with potentially longer duration of protection. Now, let’s turn to our next generation CDK inhibitors for cancer. Most patients with advanced or metastatic breast cancer eventually develop resistance to both endocrine and CDK4/6 inhibitors despite their transformative efficacy. Inhibition of CDK2, delivered with a CDK selective active drug or a triple activity CDK 2/4/6 agent, may prevent, delay, or reverse resistance and prolong survival. These are data from a subset in the CDK2/4/6 inhibitor Phase 1 dose escalation and antitumor activity study of heavily pre-treated patients with hormone receptor positive metastatic breast cancer. The most improvement in terms of tumor size reduction was seen in patients treated with monotherapy or in combination with fulvestrant. We observed three confirmed partial responses and three patients with stable disease for more than 12 months. One patient has been receiving ongoing treatment for more than 28 months. There has been an acceptable safety profile at the recommended Phase 2 dose, which is 25-milligram twice daily. We plan to conduct a Phase 1 dose expansion and expect to complete it in the fourth quarter of this year. Selective CDK2 inhibition with a CDK2-only inhibitor may allow dose titration and has the potential to be used in combination with approved CDK inhibitors, such as palbociclib, or other next-generation CDK4 selective inhibitors. There were two confirmed partial responses in the Phase 1 study of our selective CDK2 inhibitor in patients with advanced or metastatic hormone receptor/HER2 negative breast cancer who had received/progressed on prior CDK4/6 inhibition and endocrine therapy. One patient had a maximum tumor shrinkage of 54% following CDK2 inhibitor treatment for approximately 8 months, and the second had 100% shrinkage of all target lesions following treatment for approximately 9 months. We are showing scans of the first patient at baseline and 8 weeks. There was an acceptable safety profile as a monotherapy, and we are currently exploring combinations. We expect the Phase 1/2 study to be completed in the second quarter of '23. Now, let’s turn to our six-valent Lyme disease vaccine candidate which we are developing in partnership with Valneva. We have received further positive data from our Phase 2 proof of concept study and expect to start Phase 3 in the third quarter of 2022 with a dosing regimen of zero, 2, and 6 months to prime, followed by routine boosters before the start of a Lyme season. Our Phase 2 study is continuing and includes a pediatric population ages 5 to 17 years. Since Lyme disease is seasonal, our goal is to establish a regimen that results in high antibodies at the beginning of each season. We, therefore, looked at a boost one year after the primary series. We saw substantial boost antibody response in Phase 2 to all six serotypes present in North America and Europe following the three-dose primary series vaccination schedule, with a 14- to 31-fold rise in season one and a 51- to 69-fold rise in season two. The vaccine candidate was generally well tolerated at all dose levels tested, and we are excited about further development and the potential to help prevent this debilitating disease. Last quarter, we told you that we saw robust dystrophin expression out to one year in our Muscular Dystrophy gene therapy Phase 1b study. I will show you encouraging functional motor data in a moment. We recently shared some very sad news that a DMD patient with advanced disease in the non-ambulatory cohort of the Phase 1b trial passed away after presenting with hypovolemia and cardiogenic shock. This patient was 16 years old and the first in the non-ambulatory cohort treated with RAPAMUNE, along with steroids, as part of the immunosuppressive regimen. RAPAMUNE is not used in the Phase 3 ambulatory study. Like most non-ambulatory DMD patients, he had more advanced disease with underlying cardiac dysfunction. There is evidence of an active viral infection and we are investigating how this may have contributed to the outcome. Additional assessment will be required to define next steps needed to restart the Phase 1b study in non-ambulatory patients who are more progressed in the disease. I will now share data from this study. The ambulatory cohort, sorry, I had one more sentence to say here. 19 patients were enrolled in this study, 16 of whom received the dose selected for our Phase 3 program and three of whom received a previously studied lower dose. At one year post-treatment, there was a 5.6 point improvement in ambulatory function as measured by North Star Ambulatory Assessment compared to an external control, matched for age and baseline function. This is particularly encouraging given that patients at this age and stage of disease typically experience a considerable decline in ambulatory function as illustrated by the external control. On the right, we show time in study, with six participants nearing or more than three years since treatment. The ambulatory cohort in Phase 1b is similar, but slightly older on average, to the population in the Phase 3 CIFFREO trial. Considering the favorable benefit to risk profile in this study and observed in ambulatory patient population and in consultation with the Data Monitoring Committee, we believe the safety profile of our DMD gene therapy is manageable in this patient group. Additional mitigations are being added to our study protocol in consultation with the DMC and other medical experts. Pending regulatory feedback, we anticipate Phase 3 study sites to begin to re-open in the next few months, with the potential to report topline results and, subject to clinical trial success, submit a BLA by the end of 2023. Turning now to Internal Medicine, and ponsegromab, our candidate for cachexia due to cancer. It targets GDF-15, which as seen is frequently elevated in cancer patients, drives reduction of appetite and body weight loss, and is associated with poor outcomes. There may also be potential to treat cachexia associated with other chronic diseases such as heart failure and COPD. We have encouraging Phase 1b data which I will show next. Ponsegromab was evaluated in 10 cancer patients who were undergoing anti-tumor treatment and had more than 5% body weight loss in the last 6 months, or more than 2% body weight loss with a body mass index of less than 20 kilogram per meters squared or diagnosed sarcopenia. Ponsegromab administration was found to suppress circulating GDF-15 levels in cancer cachexia patients below the level observed in healthy subjects. Preliminary data from the Phase 1b trial show ponsegromab treatment resulted in significant body weight gain compared to historical placebo. You can see the nice trend in body weight increase remained even after the dosing was stopped at week 12. The gray dotted line indicates the historical cut-off associated with improved survival. We are co-developing a companion diagnostic with Roche Diagnostics designed to enable precision medicine, and we expect to start a Phase 2 study in cancer cachexia in the fourth quarter of this year. Injectable GLP-1 receptor agonists offer potent lowering of glucose and weight in diabetic and obese patients, with proven cardiovascular benefit, but this drug class is underutilized due to its injectable administration route. Our small molecule GLP-1 receptor agonist danuglipron could potentially offer a convenient oral alternative to injectables and is being evaluated for the treatment of Type 2 diabetes, obesity and NASH. It has been developed in our Internal Medicine Research Group with a vision to expand the use of this potent, easily administrated GLP-1 drug class to a primary care setting. Here are data from the Phase 2 study in Type 2 Diabetes. We recorded strong dose-dependent reductions in both HbA1c, a measure of long-term blood sugar levels and body weight, compared to the marginal effects noted with placebo. After 12 weeks of treatment with the 200 milligram twice daily dose, HbA1c decreased by almost 1.6% and body weight decreased by 5.4 kilograms. The safety and tolerability profile is consistent with the GLP-1 class and the most frequent adverse event rates were GI-related. We expect to start a Phase 2b titration optimization study mid-'22 with doses up to 200 milligram twice a day, and complete a Phase 2b study in non-diabetic subjects with obesity in the first quarter of next year. Finally, here are select recent and upcoming milestones from across the pipeline. The solid blue dots represent milestones achieved and the open blue dots represent anticipated milestones. Programs in bold are major anticipated events. Some of the programs on the right have already been designated as lightspeed, meaning they have accelerated development timelines, or are being considered for lightspeed designation. Finally, I would like to take a moment to thank Morrie Birnbaum, our outgoing Chief Scientific Officer of the Internal Medicine Research Unit, for his immense contributions over the last seven years, and welcome Bill Sessa, who joins us from Yale School of Medicine following a decades-long career in academia, including serving as Vice Chair of Pharmacology, Professor of Medicine, and Director of the Vascular Biology & Therapeutics Program at Yale. Bill is an eminent leader in this field, a groundbreaking scientist and a celebrated innovator, and I know he will bring his tremendous vision and insights to our investigation of cardiovascular and metabolic diseases. Thank you for your attention. I look forward to your questions. Now, let me turn it over to Frank.

Frank D’Amelio, Chief Financial Officer

Thanks, Mikael. I know you’ve seen our release, so let me provide a few highlights regarding the financials. The COVID-19 vaccine once again had a positive impact on our quarterly results and Albert and Mikael have already addressed the key points on the COVID-19 landscape. Turning to the income statement. Revenue increased 106% operationally in the fourth quarter of '21 driven by COVID-19 vaccine sales and strong performance from a number of our other key growth drivers. And looking at the revenue excluding the COVID-19 vaccine direct sales and alliance revenues and Paxlovid contribution, the fourth quarter was slower than the first nine months of the year, declining by 2% operationally. As we discussed during our third quarter call, there was a 4% negative impact, or approximately $500 million, from fewer selling days in the U.S. and International. Excluding that impact, operational growth would have been 2%, which is still lower than the mid-to-high single-digit growth we had experienced during the rest of the year. This was factored into our forecasts for the year but let me briefly walk you through this. In our Biopharma business, you will remember that the fourth quarter of '21 faced a tough comp from the fourth quarter of 2020 for Prevnar, as pneumococcal vaccinations were strong ahead of COVID-19 vaccine availability. Excluding vaccines from the current and comparable period would add 5 percentage points to the growth. Adjusting for the unusual comparative period differences related to vaccines and selling days, our revenue growth would have been approximately 7%, which is similar to what we've been delivering lately. For the year, operational revenue growth was 92%. Excluding Comirnaty direct sales and alliance revenues and Paxlovid, 2021 operational revenue growth was 6%. This is consistent with our projected revenue CAGR of at least 6% from 2020 through the end of 2025. Of course, there will be some variability in quarterly and annual growth rates due to a variety of factors, but we continue to expect at least a 6% CAGR through 2025. The adjusted cost of sales increase shown here reduced this quarter’s gross margin by approximately 16 percentage points compared to the fourth quarter of 2020, which is almost entirely driven by the impact of the COVID-19 vaccine. Adjusted SI&A expenses in the fourth quarter increased primarily due to increased product-level spending, including Comirnaty and higher healthcare reform sales-based fees. The increase in adjusted R&D expense this quarter was primarily driven by increased investments in late-stage pipeline projects, including additional spending related to our oral COVID-19 treatment. technical difficulty

Albert Bourla, Chairman and CEO

Frank, I think you were disconnected.

Frank D’Amelio, Chief Financial Officer

Chris?

Chris Stevo, Senior Vice President and Chief Investor Relations Officer

Yes. We can hear you, Frank. Go ahead.

Frank D’Amelio, Chief Financial Officer

Okay. I'm not sure where I left off, but I think what I'll do is start with the 2022 financial guidance. We’ve again provided total-company guidance, which includes the business with the COVID-19 vaccine. We will continue to provide insight into our expected revenues for Comirnaty, and now for the first time, we will also provide some color on our expected revenues for Paxlovid. However, note that we will no longer be providing EPS guidance for the business excluding Comirnaty. Similarly, we won't provide EPS guidance for Paxlovid. Our revenue guidance represents a record for Pfizer, and we expect total company revenue to be in a range of $98 billion to $102 billion, representing an operational growth rate of 24% at the midpoint. Please consider that this revenue range reflects approximately $1.1 billion of anticipated negative impact from changes in foreign currencies and also the impact of the loss of Meridian's sales of approximately $300 million, both of which your models may not take into account. Regarding our COVID-related revenues, we now expect the COVID-19 vaccine revenue for the year to be approximately $32 billion, an increase of approximately $1 billion compared to our prior guidance provided on December 17. For Paxlovid, we expect sales of approximately $22 billion. This means that excluding the COVID-related revenues, we expect sales to be $46 billion at the midpoint, representing operational growth of 5%. While this is slightly below the 6% CAGR that we continue to expect between 2020 and 2025, I would remind you that there will be volatility along the way. Let me give you some detail on our cost and expense guidance. For adjusted cost of sales, we are expecting a range of 32.2% to 34.2%. Given that we are now more than 12 months past the launch of Comirnaty, we expect its negative impact on our cost of sales margins to be less than it was in 2021, assuming a similar level of revenues. Further, Paxlovid is expected to have a very positive impact on cost of sales as a percent of revenues in 2022. On adjusted SI&A, we expect $12.5 to $13.5 billion, an increase of $900 million at the midpoint. We expect our adjusted R&D guidance range to be $10.5 billion to $11.5 billion at the midpoint; that is about $500 million higher than last year. We expect an adjusted effective tax rate for the year somewhat higher than 2021 at approximately 16%. These assumptions yield an adjusted diluted EPS range of $6.35 to $6.55 or 47% operational growth at the midpoint compared to 2021, excluding an expected $0.06 negative impact from foreign exchange. I would like to point out some additional information which may be helpful for your models. You will note that our guidance assumes a weighted average share count of approximately 5.8 billion which represents an increase of approximately 100 million shares over 2021. This accounts for the number of shares that we normally issue for employee compensation annually. The increase of 100 million shares over 2021 decreases our EPS by about $0.10 at the midpoint. I notice that most of your models instead assume a flat share count for 2022 as compared to 2021. From the first quarter of 2022 and going forward, we've made a decision to modify our adjusted financials' treatment of amortization of intangibles. Previously, we only excluded amortization related to large mergers and acquisitions. Now we exclude all intangible asset amortization expense; this is anticipated to contribute $0.6 to our 2022 adjusted diluted earnings per share, and helps improve comparability with our peers. 2022 guidance once again assumes no share repurchases. You will note that Pfizer did not repurchase shares in either 2020 or 2021. While we continue to have outstanding unused authorization to repurchase another $5.3 billion of stock and can be opportunistic, given the potentially value-enhancing business development opportunities which are available to us, we do not expect to repurchase shares in 2022. Now a word on our 32% stake in the Consumer JV with GSK. As you know, GSK has announced its intention to engage in a demerger transaction for at least 80% of its 68% stake in the JV in summer 2022. We talked about our stake as a non-core asset whose value we will seek to realize over time. While we have determined neither the manner nor timing of how we will do so, there are a number of possible alternatives and we will attempt to monetize this asset in the manner which will create the most value for our shareholders. We receive approximately $600 million in pre-tax income from the JV annually, and this will not change as a result of the demerger transaction, and our guidance assumes that this will continue throughout 2022 with no change to our 32% stake. Let me quickly remind you of some assumptions and context on the projected COVID-19 vaccine contribution and our collaboration agreement. The Pfizer-BioNTech COVID-19 vaccine collaboration construct is a 50/50 gross profit split. Pfizer books the vast majority of the global collaboration revenue, except for Germany and Turkey where we receive a profit share from BioNTech, and we do not participate in the China region. We continue to expect that we can manufacture 4 billion doses in total by the end of 2022. The $1 billion increase in expected COVID vaccine revenues to approximately $32 billion in 2022 primarily represents the impact of contracts signed since mid-December, which was the cutoff for our prior guidance. While we can’t predict what may be needed due to omicron or other variants, I would also caution you that there is less potential upside to this guidance through the year, compared to the situation we faced in 2021 when the vaccine was newly available and few people had received any doses of the vaccine. As you will remember, our cost of sales for the COVID-19 vaccine revenue includes manufacturing and distribution costs, applicable royalty expenses and payment to BioNTech, representing 50% gross profit split. We expect that the adjusted income before tax margin for the COVID-19 vaccine contribution to be slightly higher than the high twenties as a percentage of revenue that we had in 2021. Unlike the situation for Comirnaty, demand for Paxlovid should have upside from these levels, depending on the outcomes of discussions with certain governments and potential purchases for stockpiling against future coronavirus pandemics. If we remove the projected COVID-19 vaccine and Paxlovid contribution from both periods, you'll see that we expect the 2020 to 2022 revenue range to be $45 billion to $47 billion, representing approximately 5% operational revenue growth at the midpoint. Please remember our guidance excludes the former revenue contribution of approximately $300 million to Meridian, and all 2021 quarters have been recast to exclude Meridian as discontinued operations, accounting for its divestiture. Going forward, we will not give earnings guidance excluding the estimated income from our Comirnaty direct sales and alliance revenues and Paxlovid. However, to help you with your forecasting, a couple of minutes ago, I gave you my view on 2022 Comirnaty pre-tax margins. For Paxlovid, I would think about its margins as being typical for a small molecule drug, and unlike Comirnaty, it is expected to not be dilutive to pre-tax margins. To help you further, several years ago before COVID-19 existed, I spoke about our business being on a path back to a 40% plus pre-tax margin and we expect to achieve this level in 2022 for the business excluding Comirnaty and Paxlovid. Going forward we will continue to be prudent in our capital allocation activities with the opportunities for deployment shown here on this slide. In summary, an exceptionally strong quarter and year based on continued strong performance for our growth drivers. During the year, we raised guidance, and for the year, we met or exceeded our guidance in all key metrics. Our pipeline continues to advance, and we have invested record amounts to support that advance. Last week, Arena's shareholders voted to approve Pfizer's acquisition of the Company. We look forward to a targeted closing of the Arena acquisition as soon as the first half of 2022, subject to the satisfaction of the closing conditions, including antitrust approvals. We continue to expect to be active in regards to business development throughout 2022, as we continue to get access to the best external science and bring breakthroughs to patients in 2025 and beyond. With that, let me turn it over to Chris to start the Q&A session.

Chris Stevo, Senior Vice President and Chief Investor Relations Officer

Thank you, Frank. Apologies everyone for those technical difficulties. Just want to remind you, we do have the prepared remarks posted to the website. So, if there's anything you missed because of the difficulties, please refer to the prepared remarks, and given the technical difficulties, we're going to try to let the Q and a session run a little longer to answer people's questions. First question, please.

Operator, Operator

Thank you. Your first question comes from the line of Geoff Meacham from Bank of America Securities.

Geoff Meacham, Analyst (Bank of America Securities)

Hey, guys. Thanks for taking the questions. Just had two. The first one, Paxlovid guidance, I know you guys are factoring in only signed agreements, but can you give us a general sense as to agreements or doses perhaps that are under discussion, and is that dependent on supply ramping? The second question, on external BD Albert, I understand the strategy. I think the uncertainty is really the ability to scale some of the products that you brought in. So, if COVID-19 is less of a long-term contributor than you assume, what’s the appetite to do higher impact larger deals? You clearly have the capacity. Thank you.

Albert Bourla, Chairman and CEO

Thank you. Angela, do you want to take a little bit of Paxlovid?

Angela Hwang, Group President, Pfizer Biopharmaceuticals Group

Sure. Currently we are in active discussions with over 100 countries and governments around the world, and I’d say those discussions are going really well. Regarding contracting, as you noted, we’ve included some of the contracts that we already have, but this number changes every day. Contracts and distribution agreements are being secured literally on a day-to-day basis, so this is a number to watch. We continue to expect movement. There is tremendous interest in our product, and as the clinical program continues to develop and emerge, we only have the high-risk study right now while the standard-risk study and prophylaxis are coming up. I think the full clinical program will provide additional impetus for contracting and ordering. It’s going really well and there is more to come on this front.

Albert Bourla, Chairman and CEO

Thank you. Aamir, maybe some comments on the BD.

Aamir Malik, Chief Business and Innovation Officer

Sure. Thanks for the question, Geoff. I think in terms of the top line, we’re going to be incredibly flexible. We have said repeatedly that we are most interested in compounds that have potential to be real breakthroughs, and this can take the form of later-stage clinical development as well as earlier stage medical innovation. We’re going to bias to the Tas, oncology, I&I, rare, vaccines, internal medicine and hospital, where we’ve got the scientific chops to make good choices and add real value. And we’re going to be flexible on the deal types. Acquisitions are obviously very much in the cards, but strategic partnerships and alliances are well. And, in fact, some of our best successes have come from some capital-light collaborations. If we see a larger opportunity that’s strategic and creates value and meets the criteria that I just described, we’ve obviously got the balance sheet to utilize to do that. So, we certainly will look at those, but we’re going to talk about and focus on the priorities that I described more so than synergy driven deals per se.

Albert Bourla, Chairman and CEO

Thank you, Aamir, and just to add to both points because I’m sure they will be asked a lot. On Paxlovid, clearly the numbers could become way bigger than what we have right now, but this is not something we have done in the past and we don’t plan to do right now — we will not give guidance based on what could be potential. We are giving guidance based on what is more or less secure. There are signed deals already, and there are deals that are not signed yet but for which prices and volumes have been agreed. If you remember when we started with the vaccine, we initially had guidance of around $15 billion in the first quarter and eventually made $36 billion. Here we start even stronger in our first projections with Paxlovid. That’s why we are manufacturing and moving ahead with our plans; we are already at 120 million treatments and have the ability to go higher if the discussions we’re having materialize. On business development, I want to emphasize this because I’m getting a lot of questions about size. We are agnostic to size. Where we are biased is toward deals that make sense. But to justify a premium, we would have to deliver significant cost synergies. These could be very profitable deals in other periods of the company’s history, but not now. Right now the company has a manufacturing machine performing at its best, an R&D machine performing at its best, and a commercial machine that continues to lead the industry in execution and delivery. The last thing I want to do is do a deal that requires shutting down manufacturing sites, consolidating shared sites and field forces, just to justify a premium to the shareholders of another company. This is not the time to disrupt the company’s momentum. This is the time to bring more substrate into our manufacturing, research and commercial machines in addition to what we produce organically ourselves. That is why business development is aiming in these areas. So let’s go to the next one.

Operator, Operator

Your next question comes from Mohit Bansal from Wells Fargo.

Mohit Bansal, Analyst (Wells Fargo)

Great, thanks. Thanks for taking my question. Maybe one on Paxlovid. So, there have been some news reports talking about logisticals and access issues for Paxlovid. And I understand the supply is tight for now, but would love to get your thoughts on how you’re working on improving the logistics when the supply is no longer an issue, especially in a world where home testing would become a norm and one needs to take this drug within five days of diagnostics. Thank you.

Albert Bourla, Chairman and CEO

I wouldn’t say that we have logistical issues of supply. But, Angela, would you like to take that, please?

Angela Hwang, Group President, Pfizer Biopharmaceuticals Group

Sure. First of all, our deliveries and allocations for the doses have gone extremely well in the U.S. To give you some context, 265,000 doses have been allocated by the U.S. government since the EUA was approved, and of those 265,000, 85% have been ordered. We see a range of ordering patterns from the states. Some states are ordering 100% of their allocation, others are ordering 80% or 70%, and so on. It is really only a handful that haven’t ordered up to their allocation. For the most part, weekly orders are increasing week by week, and there is very strong placement of orders. The drawdown of doses and utilization is going really well, although it differs by state what the allocations are and how they are being used. I wouldn’t say we have logistical issues with supply. Initially, what was difficult was that it was not clear where the doses were being located because every state had a different system for distributing Paxlovid. However, a number of tools are now online at both the state level and on Pfizer’s website. We have taken the state government tool and added it to our website so that both healthcare providers and patients can see where Paxlovid is available and where orders and prescriptions can be placed. That has largely been ironed out. Looking ahead, our goal is a seamless end-to-end process from diagnosis and positive results to being able to prescribe quickly and for the patient to acquire the drug quickly. We are working with partners in testing and diagnostics, telemedicine, and pharmacy to ensure as fast and efficient a patient journey as possible, from diagnosis through to treatment. All of that is in place, and you will continue to hear more about it as the launch and utilization increase.

Albert Bourla, Chairman and CEO

So, again, to punctuate and give a little bit of context to what Angela said, the 85% has already been ordered from the quantity that we are making available to the U.S. government. It’s a very, very high number. For example, the same number in the first month for vaccines was dramatically lower because it takes time for states to get organized and it varies state by state. There are states that, once quantities are made available, order immediately, and there are states that take their time to organize distribution. In general, this is much more efficient than the early months of the vaccine rollout. Also, very importantly, there are weekly replenishments. We don't yet have prescription data because it's too early, but the quantities that states accumulate are being used up and they are immediately placing new orders. So, I would say we are pretty happy with how the first month of collaboration with the U.S. government went in allocating doses. There has also been dramatic improvement in the tools, as Angela described. But the bigger improvement will come because we will make far more quantities available in the second month and even more in the third month. Right now, availability is limited to a few places in each state because you can't expand the network when quantities are small. That will change this month, and by the third month significant quantities will be delivered nationwide. Okay. I think let’s go to the next question.

Operator, Operator

Your next question is from Evan Seigerman from BMO Capital Markets.

Evan Seigerman, Analyst (BMO Capital Markets)

Hi, guys. Thank you so much for taking my question. I was wondering if you could provide an update on the FTC review process for the Arena deal. If I’m not mistaken, there was a recent procedural move where you and Arena withdrew and re-filed the HSR Act filing essentially to allow the FTC an additional 30 days for review. And then, I’d also love for you to walk me through your assumptions on how you forecast $13 billion in revenue from BD transactions that would imply to your specific targets and combination of targets in mind. Any color here that you could provide would be very helpful. Thank you.

Albert Bourla, Chairman and CEO

Yes. Thank you very much. On the last one, just to make sure, but this is not our assumption. Our assumption is way higher of the $13 billion. What I just gave you, it is what is the consensus of the deals that we have signed so far. But on the FTC review, I would like to ask Doug to provide maybe a review on that, Doug Lankler, our General Counsel.

Doug Lankler, General Counsel

Yes. As you pointed out, we did request to refile, which is not unusual. Under the HSR process, the deal is, of course, subject to customary closing conditions and typical anti-trust clearance and shareholder approval, which, as you know, we’ve received. We don’t expect a significant break in time from our proposed sense that the deal will close in the first half of this year. We still expect it to close in the first half of this year.

Albert Bourla, Chairman and CEO

Thank you. And Aamir, although I did explain that this is consensus numbers, not our numbers, do you want to make any other comment on the $13 billion of 2030 revenues that consensus forecasts for the deals that we have signed?

Aamir Malik, Chief Business and Innovation Officer

Yes. The only thing I would add is, we feel very good about the progression of all of the substrate and the deals since 2019 that Albert outlined. We’ve seen a significant number of approvals in the EUAs in that group, submissions as well as quite a few Phase 3 starts. So we think that that substrate is progressing well and the $13 billion is the consensus number. Our expectations of what’s there are materially higher and there are a number of transactions. We spoke to Trillium, Biohaven and even some of the recent things that we’ve done in mRNA that are not yet factored in the consensus forecast on those transactions.

Albert Bourla, Chairman and CEO

Thank you. Next question please.

Operator, Operator

Your next question comes from Umer Raffat from Evercore ISI.

Umer Raffat, Analyst (Evercore ISI)

Hi, guys. Thanks so much for taking my question. Perhaps two on vaccines today, if I may. First, on the flu vaccine. I know you’ve had a trial ongoing on your mod RNA since September. And I noticed you just initiated a new trial of a self-amplifying mRNA for flu. And I wonder if the decision to progress a second mRNA program in flu was triggered by any emerging data from your first-gen flu Phase 1 that’s been ongoing. And then, secondly, on the Omicron-specific booster, perhaps in light of some of the emerging data on immunogenicity differences or lack thereof versus regular COVID-19 vaccines. I guess my question is, what’s your confidence on ability to show superiority of an Omicron-specific booster versus regular and what would be the regulatory criteria? Thank you.

Albert Bourla, Chairman and CEO

Thank you. Thank you very much. I think Mikael can take the question. On the flu vaccines, to be clear, the plan was always to initiate a second mRNA flu program; it wasn’t driven by data that forced us to change course. We are advancing new forms of mRNA technology, including self-amplifying RNA, which is one of the most promising next-generation RNA technologies. Mikael, any comments on that and our confidence in showing superiority for an Omicron-specific booster?

Mikael Dolsten, President, Worldwide Research and Development

Thank you. Yes, we are accumulating, first of all, from our mod mRNA data trial, data on various regimens and on multivalent constructs. We remain of the view that we aspire to develop a flu vaccine. Currently, the most aggressive timelines are focused on the mod mRNA. Our plans is to develop something that has a differentiation versus the current tetravalent standard of care. I know other companies have spoken about being similar, while at this moment we still see opportunities to possibly differentiate with an mRNA-based or mod mRNA. As Albert alluded to, we are actually filing the IND for the self-amplified. I think, the protocol may have gone up already on ClinicalTrials.gov, but dosing is going to be within the next couple of months or so. And it’s entirely based on us aiming to develop that platform, which has particular relevance for combinations vaccine, given that possibly we expect to have much lower mRNA burden and can over time build vaccine combination of several different pathogens. We’ll keep you updated on progress with the mod mRNA flu and we certainly see data that suggests that this is a feasible path and we are working to refine our approach to aim for a differentiated vaccine.

Albert Bourla, Chairman and CEO

What about Omicron and how confident we are about the superiority?

Mikael Dolsten, President, Worldwide Research and Development

Yes. The regulatory path is that we expect to have a trial; if successful, an Omicron boost would show higher neutralizing antibodies for Omicron versus a similar boost by the wild-type vaccine, and acceptable titers to the previously available strains to preserve broad protection, but possibly with higher Omicron. I really think we showed it; let the science play out here. We are talking about a number of weeks before we get data. As alluded to, it has three different arms: Omicron versus wild type on top of three doses, Omicron versus wild type on top of two previous doses with one or two Omicron doses, and Omicron in naive participants. That will be a very interesting data set, and we’ll extract a lot of data and report whether we can demonstrate superiority. In any case, I want to emphasize that our current vaccine, after three doses, raises relevant neutralizing antibodies. The T-cell responses we see are likely the ones that contribute, in real-world evidence, to the effective protection of the current vaccine against hospitalization and death. An Omicron vaccine is an interesting opportunity that we’ll learn more about. Our science is progressing on several dimensions to further improve mRNA vaccines over time, although they’re already quite good. So you should expect Pfizer to continue to be a leader in this field through multiple approaches, together with BioNTech.

Albert Bourla, Chairman and CEO

Thank you, Mikael. Next question please.

Operator, Operator

Your next question comes from Louise Chen from Cantor.

Louise Chen, Analyst (Cantor Fitzgerald)

Hi. Thanks for taking my questions. So, my first question for you is, what are the key pushes and pulls to your underlying business excluding COVID? And what gives you confidence that you can still meet that top-line sales guidance that you gave through 2025 despite some of the volatility that we’re seeing right now? And then, just wanted to ask you on your TL1A antibody and where you are with development of that product and the reporting of data? Have you changed any of the timelines for when you report data? Thank you.

Albert Bourla, Chairman and CEO

Thank you very much. On the 6%, what gives us confidence is that we keep meeting the goal. As I said, we set the goal in 2019 for a 6% CAGR. Year-to-date, we are at 6% right now. This year, particularly, it is at 5% for the underlying business. There is a little bit of volatility, but we always knew that this would be a year in which we are losing some of the revenues from CHANTIX compared to the previous year, which affects this deal quite significantly. As we are launching new products, they are coming up. Maybe I will ask Angela to give a little bit more detail on the inputs and how this is progressing and also Mikael on the antibody question. Angela?

Angela Hwang, Group President, Pfizer Biopharmaceuticals Group

Thank you, Louise. I think the 6% confidence is really driven by two things. First of all, the launches, right, that will take place between now and 2025, which will continue to drive growth for us. But also importantly, in our in-line portfolio, Louise, every single one of our products still have opportunities to grow. They can grow from a number of different ways, right? There is still under-diagnosed patients. So, from new diagnosis, you can continue to drive a tremendous amount of growth in Eliquis and in Vyndaqel. In many of our products, we still have class growth. Think about the CDK4/6s, think about Xtandi, think about Braf/Mektovi. These are all therapies that are still, I think, underutilized from a class perspective. So, there’s growth there. And then finally, for all of them, there is the opportunity to grow in terms of market share, just given just the strong clinical profile and strong lifecycle support that we have for all of our product. So, I think we see tremendous amount of growth still. We just have not tapped out of growth in our core in-line brands. And then, you add on top of that, the launch brands. This is where we’re going to get our growth from.

Mikael Dolsten, President, Worldwide Research and Development

Thank you, Angela. On the TL1A, as you remember, the previous earnings call, we showed some really strong data in the range of 34% endoscopic improvement and, with a biomarker, 48% in patients way above expected standard of care. That trial has enrolled very fast. It’s fully enrolled. Full trial readout will be Q4. We are obviously considering based on the encouraging data in the previous trial opportunity for interim analysis that pending data could allow us to accelerate development of the program to its potential pivotal study. So, all in, it’s moving very well and very fast.

Albert Bourla, Chairman and CEO

Thank you. Next question please.

Operator, Operator

Your next question comes from Steve Scala from Cowen.

Steve Scala, Analyst (Cowen)

Thank you very much. Just to be absolutely clear, I understand that Pfizer wants to be conservative on Paxlovid, but it seems that Pfizer has merely scratched the surface on its 2022 potential and that scratching of the surface is what’s in 2022 Paxlovid guidance. So, please just tell me if you disagree with that statement. Secondly, and just to be clear once again, do you not see growth for Pfizer overall in ’25 through ’30 without business development? And then, lastly, on danuglipron, Slide 39 shows some very good data. I’m curious what was the discontinuation rate in the study? Can the dose be increased further? And does Pfizer expect additional weight loss beyond 12 weeks? Thank you very much.

Albert Bourla, Chairman and CEO

Yes. Let me take the first two questions and then Mikael can take the research one. Look, it's not that we are giving conservative guidance. We have principles that we follow because otherwise you can be lost. The principles we follow are that we only give guidance for contracts that have been signed or are very close to being signed because we have agreed critical terms. This is what you have heard about Paxlovid. Clearly, this is only a very small fraction of the 120 million treatments that we are preparing to manufacture right now, and it is a small fraction of the things we are discussing with different governments. But we are not taking all the discussions we’re having with different governments, risk-adjusting them to see how many might progress and then giving guidance. That is not what we do. We only give guidance, and this is the same with the vaccines, for things that have been signed or are really agreed by a specific deadline. I think Frank said that deadline was last week. So clearly, there is a lot of potential, but it is not that we are adding our own conservatism to the numbers. We are following a principle so that we can always be clear about what we say and why we say it. So then, what about the study dose and the 12-week delay, Mikael?

Mikael Dolsten, President, Worldwide Research and Development

On the danuglipron, I’m pleased that you were happy and impressed with our data. And indeed, I would say the glucose lowering through HbA1c and the body weight deductions are probably among the best in such a short treatment period. Tolerability and discontinuation rates improved versus previous study because we extended the dose titration from two weeks. And overall, safety, adverse events, I think, are very much in line with what you see comparable titration approaches with injectables. Given that we see that we can improve tolerability and discontinuations with this medium titration rate, we have the next studies coming up with a further slow dose titration, maybe up to a month or so, and we think that may even bring readouts of efficacy further above this. So, we are very pleased with the profile. And I think the next study will nail down for us dose regimen and will help us to move with a strong profile into a potential pivotal study.

Albert Bourla, Chairman and CEO

All right. Next question please.

Operator, Operator

Your next question comes from Tim Anderson from Wolfe Research.

Tim Anderson, Analyst (Wolfe Research)

Thank you. A few questions. The RSV vaccine data previously said early ’22, now you’re saying first half ’22, does that imply there has been some slippage because early to me, I always felt that meant January, February, something like that. mRNA flu, second question, what’s a realistic timeframe for potential regulatory filing of a product like that, assuming you find success in your trials? And then, last question, Ibrance, sales soft. You say it’s due to patient assistant programs. We haven’t seen that impact, other CDK4/6s. And I haven’t generally heard about those programs impacting other brands, either at Pfizer or other companies. So, I’m wondering what else may be putting pressure on Ibrance. Are you having to cut price to maintain access?

Albert Bourla, Chairman and CEO

Yes. What was your question on flu vaccine?

Tim Anderson, Analyst (Wolfe Research)

A realistic timeframe for filing for approval of the mRNA flu vaccine.

Albert Bourla, Chairman and CEO

Yes. Thank you. Thank you. So, why don’t we go to Mikael. Mikael, what about both? We have both now, adult and maternal. And then the mRNA. Angela, could you speak about Ibrance?

Mikael Dolsten, President, Worldwide Research and Development

Yes. On the RSV, we have enrolled very well maternal and adult, and are basically, I would say, fully enrolled. So, it’s entirely to ensure we have the number of events that we were looking for. And we expect both trials to readout, whether it’s somewhere between Q1, Q2 or at a later part of Q2, we’ll just see and as events accumulate, but it’s going very well. So, I feel very optimistic with RSV study to conclude and we’re looking forward to that data. MRNA flu, we are right now accumulating ingenuity from several different type of dose regimens. And if we are able to conclude with an optimal dose regimen using the mod mRNA, a potential Phase 2/Phase 3 study could certainly be initiated this year, but of course it’s a little bit early to speculate before you have identified the right Phase 2/3 dose regimen. If we would embark on such a study this year, we expect it can conclude very fast, given our experience to run very large trials in this sector and this population of adults. And so, we’re talking about possible conclusion then within next year. But it’s, I would say, one step at a time. We’ll keep you informed. We are encouraged so far. And we’ll go from there.

Albert Bourla, Chairman and CEO

Thank you, Mikael. And then, what about, Angela, on the Ibrance?

Angela Hwang, Group President, Pfizer Biopharmaceuticals Group

Sure. I can confirm that the patient assistance program is the primary reason for the decline in Ibrance volume. For perspective, in Q4 2021 our PAP prescriptions were up 32% versus Q4 2020, and 53% higher than pre-COVID levels. This has significantly reduced paid prescriptions and is the main reason for the decline. We have also seen, and monitored quarter-to-quarter, a slight slowdown in new patient starts, which has a modest impact. However, the largest factor by far is the increase in PAPs.

Albert Bourla, Chairman and CEO

Thanks, Angela. Before we move to the next question, I realize that I didn’t answer one of the questions that Steve made, Steve Scala, about if we believe that we need business development to grow in the period ’25 to ’30. And clearly this is not the belief right now. We think that we have a clear LOE number that we estimate around $17 billion. And we have a pipeline that delivers more than the LOEs. So, only organically, with what we have right now, in our calculations, we are at positive growth trajectory. The $25 billion I just mentioned needs to be on top of everything, the balance between LOEs and different funds like that, everything new but will be invented in the meantime, and of course, the COVID trajectory through 2030. But we don’t need right now business development at all to grow. What we need business development is to maintain high level of 6% growth top-line, all the way through 2030, for example. Let’s go now to the next question, please.

Operator, Operator

Your next question comes from Andrew Baum from Citi.

Andrew Baum, Analyst (Citi)

Thank you. Couple of questions. First, what are your expectations that you’ll need two shots of Omicron as opposed to one? The reason I ask is recently published animal models suggest that one Omicron mRNA vaccine actually generates lower levels of neutralizing antibody against Omicron than the ancestral spike variants, presumably due to antigenic sin. It obviously has implications for both revenues in terms of two shots but also compliance. And then, second, perhaps you could comment on the outlook for CD47 and talk to the differences between your molecule and Gilead’s, which obviously has run into some safety issues with trial suspensions. Many thanks.

Albert Bourla, Chairman and CEO

Yes. I will take the first one very quickly so that I can give time to Mikael to speak about the second one. Look, we have to wait to see the result, but I don’t think it is all mRNA vaccines are the same, so I don’t think we should extrapolate preclinical data for one effort to what will be the clinical, let’s say, results of the other effort. We are testing both; one shot, we are testing two shots, and we are testing pretty soon hybrid vaccines, but everything what we have seen so far give us confidence that we will have a very strong reaction and immunogenicity of the an Omicron against Omicron. But, of course, that’s based on preclinical. We need to wait see the first clinical data so that this assumption can be validated. With that, Mikael, what about Gilead? And by the way also, Andrew, you said what about your expectations. Our expectations are not based on one shot or two shots or five shots. Our expectation, as I said, it is contracts signed as for last week with Comirnaty. So what we’ll sign further on will be in addition to whatever we have given so far. Mikael, on the Gilead?

Mikael Dolsten, President, Worldwide Research and Development

Yes. The interest in our product from Trillium was triggered by its unique design. It is what we call a receptor fusion blocker protein, in contrast to magrolimab, the Gilead antibody you referred to that’s on hold, which binds with a lower affinity to the target. That lower affinity was intentional to allow it to accumulate preferentially on high-expressing cancer cells and less on red blood cells to avoid causing anemia or hemolytic anemia. In our studies that have generated proof of concept, we have seen single-agent activity in blood cancers with basically negligible effect on red blood cells, so this is playing out well. We do not know why magrolimab is on clinical hold, but this differentiation in our molecule may be one reason our molecule has been doing so well so far. While we initially focused on B-cell lymphoid malignancies, we may become increasingly interested in the myeloid space where magrolimab has been studied, such as AML and MDS, particularly if our profile proves superior; we are also awaiting readouts from those studies. For us, the Trillium deal is delivering everything we expected and may actually have upside due to its more unique profile.

Albert Bourla, Chairman and CEO

Thank you, Mikael. Next question please.

Operator, Operator

Your next question comes from Chris Schott from JPMorgan.

Chris Schott, Analyst (JPMorgan)

Hi, great. Thanks much for the questions. Maybe just two to start with on just some clarifications around guidance, I know you’re not giving a lot of details around core versus COVID-related earnings this year, but there’s a lot of questions on that front. But if I just take the low end of your sales range at $45 billion, apply a 40% margin, tax-adjust that, I think I’m getting a number somewhere around $2.60 per share at the low end. Is there any issues with that math I’m doing? Or am I in the right ballpark there if I just want to think about a low end of core guidance for this year? My second question was on Paxlovid, and you’re referencing here typical small molecule, I guess, gross margins for this one. Just help us frame that a bit more. I guess, is something in the mid-80s a reasonable level to think about for gross margins for this product or is it substantially higher or lower? I’m just trying to better understand profitability to maybe think about some of these contracts coming forward in this year and maybe that Paxlovid number moving. And then, just the final one just to wrap up. I’m still trying to get my hands around the BD side of the business and kind of the approach. I guess, should we be thinking about a significantly different approach to business development for Pfizer today versus what the Company was doing two or three years ago prior to the COVID upside? Or is this more just a continuation of, I guess, the focus and what you’re looking at if we’re thinking back to like 2019 as an example? Thanks so much.

Albert Bourla, Chairman and CEO

Yes. I’ll take very quickly the third one and then Frank can take the first two questions. I wouldn’t say we are changing what we’ve been saying since 2019. It is a continuation but at a much more accelerated pace. As Aamir said, we are going deeper into the science and into areas where we think we’ll make fewer mistakes in selecting the right targets. We expect to be more successful and to at least meet the industry success rates, with the aim of exceeding them as we select assets. We prefer to focus on areas where we can add value, and there are significant opportunities to add value by becoming the preferred partner of several biotechs. We have also seen, as Aamir noted, that some of the best deals we’ve done were not the most capital-intensive. We are learning from all of that. We are not going to relax the discipline we apply to selection, but we will intensify our activity in this area because we think science is at a stage where we can find enough targets to add and create value. So that’s on the BD side. Now, Frank, there are a lot of financial questions about margins, guidance, etc.

Frank D’Amelio, Chief Financial Officer

Sure. So, Chris, on the walk through you did on, I’ll call it, the business excluding Comirnaty and Paxlovid, I would use the midpoint on the revenue. You used, I think, a 40% income before tax margin. Then you got to tax-effect that. I didn’t hear you say tax-effect it. So, if you do the math, you do the walk through and then you tax effect it, that will give you, I think, a number that’s in the ballpark. On Paxlovid gross margin, let me answer the question this way. One, we don’t give margin information by individual product, right? It’s something that, for many reasons, we don’t do. But the way to think about it is, one, that the income before tax margin on that, the margin profile is similar to our other solid oral dose products. And remember, when you look at the gross margin, there’s going to be SI&A investment in Paxlovid this year because we’re launching that product. There’s additional R&D investment in product that year because we’re continuing obviously to evolve that product. All of that obviously is captured in the income before tax margin on that business, which is similar to our other solid oral dose products. It’s all factored in our guidance. The one place where you can really see the impact, and hopefully this is helpful, you look at our cost of sales as a percentage of revenue last year, for the full year, 37.7%. If you look at our guidance this year, 32.2% to 34.2%, the midpoint is 33.2%. That’s down, at the midpoint, 4.5%, most of which is being driven by the Paxlovid revenue this year. So maybe that’s the way to help you in terms of just how to work the numbers.

Albert Bourla, Chairman and CEO

Thank you, Frank. Next question please.

Operator, Operator

Your next question comes from Chris Shibutani from Goldman Sachs.

Chris Shibutani, Analyst (Goldman Sachs)

Thank you very much. Two questions. One, again, just to make sure I understand clearly the thinking about what underpins the intermediate growth expectation through ’25. I believe, when that was originally issued back in 2019, that did not assume contribution from business development to achieve that CAGR of 6% to ’25. Is that still the case? That would be the first question. And then, the second question relates to Paxlovid. We have the standard risk study that you’ve modified expanding. Can you talk about what kind of result we would need to see in order to influence the kinds of decisions and discussions that Angela is having with governments, in particular, the primary endpoint which just missed statistical significance on the alleviation of symptoms. Do you need to hit that? Or are the discussions being guided around the ability to meet the secondary endpoint, which was the decreased risk of hospitalizations and severe disease from that standard risk study? Thank you.

Albert Bourla, Chairman and CEO

Maybe I can take both in the interest of time. I can confirm that our guidance of 6% was excluding BD. So that was from ’19 all the way to ’25, 6% CAGR, from the things that we had at the time. As regards the standard-risk primary endpoint, I think most governments, if not all, are currently focusing their purchases and discussions on the ability to reduce hospitalization. By the way, the FDA, for example, has already approved vaccinated and unvaccinated, which means that includes people who were in the standard-risk population because the high-risk population were all unvaccinated. So, the standard-risk population will contribute, but I think everyone is moving with the assumption that we give it to all people to prevent hospitalization. That’s the main thing everyone is looking at. Now, the in-house contact is very different and could change the landscape a lot. There are no discussions around that right now. But if it comes back positive, clearly that could also be used to prevent infections in high-risk populations when someone in the household, in a senior home, or in other communal settings gets infected. This would be something that comes on top of any discussions we are having right now if it is positive. Let’s go to the next question please.

Operator, Operator

Your next question comes from Vamil Divan from Mizuho Securities.

Vamil Divan, Analyst (Mizuho Securities)

Hi, great. Thanks for taking the questions. I’ll stick with the same theme around Paxlovid and business development. First, on Paxlovid, to make sure we’re all on the same page, can you comment on exactly how many doses are included in the guidance you’re giving right now? You mentioned in the release 20 million to the US and I think 2.75 million to the UK, but there have obviously been other contracts signed. Can you give us a number or a range so we have a sense of what’s included right now? And then, on business development, one thing I found interesting when you were talking about Slide 13: Albert, you mentioned the strength of allocating cash flows while you pursue new business development opportunities that could add at least $25 billion of risk-adjusted revenues in 2030. I’m curious about that $25 billion — it’s a specific number and it was in your prepared remarks, so I’m sure it’s well thought out. What drove that figure? Obviously it could be much smaller or much larger depending on what you do over the next few years, so any clarity on why you phrased it that way would be helpful. Thank you.

Albert Bourla, Chairman and CEO

Why we selected $25 billion to speak about $25 billion, you mean?

Vamil Divan, Analyst (Mizuho Securities)

Yes, saying at least $25 billion in adjusted revenues.

Frank D’Amelio, Chief Financial Officer

Of course. So, Vamil, on the Paxlovid guidance, you heard Angela mention earlier. We’re very active right now, in more than 100 negotiations with different governments. We don’t want to put any information out there that could, I’ll call it, lead to misleading assumptions and have those assumptions be detrimental to those contract negotiations. You mentioned a couple of contracts that have been announced publicly and where the dose information was included, the US $20 million and the UK $2.75 million. If you look at everything we’ve announced publicly, give or take, it’s about 30 million treatments. And so that 30 million treatments is clearly included in the guidance that we provided of $22 billion of revenue.

Aamir Malik, Chief Business and Innovation Officer

Sure. Vamil, a couple of thoughts. First, given the strength of our balance sheet and our cash flows, we have the ability to deploy significant capital. Beyond increasing our dividend, we believe deploying cash into business development will deliver an attractive return. Second, this is a great time for scientific advancement in our industry; across academia, venture, and biotech of all sizes there is no shortage of external opportunities that can complement our internal work. We will be thoughtful and disciplined about the science we pursue. Together with our capabilities, these factors should enable significant growth through business development going forward.

Albert Bourla, Chairman and CEO

Yes. And also it is very important also to understand, Vamil, that we believe that once you put a target, you better execute way better when you have a target in front of you. And actually believe that the target is to be public because we’re a public company and we don’t have a problem to do it. So, also we went into to analyze the substrate and the opportunity, and as always, we are providing at least $25 billion, because as always we like to have targets that we’re putting out there and we’re beating them. But we believe that with the current, all our analytics that we have done, this is a very reasonable target to achieve, without, let’s say, utilizing all of our firepower right now. So that will allow to do dividend and other uses of capital and still do volume. And we are confident to put it out there so that people can start measuring against it. Thank you very much. And next question?

Operator, Operator

Your next question comes from Kerry Holford from Berenberg.

Kerry Holford, Analyst (Berenberg)

Thank you. Firstly, just on the oral GLP-1, I wonder if you can confirm the number of pills a day that you’ll be using in Phase 2b study up to that maximum dose 200 mgs twice a day. Was that pill burden for the highest dose? And also, on obesity, you’ve not discussed that today, but do you have the Phase 2a data inhouse? I note too that you said that you’ve made another oral GLP-1 molecule into the clinic. And I’m just interested to know how that asset will differ from the initial danuglipron. And then, lastly, just on the guidance. So if I’m thinking about the $4 billion range on your sales guidance, given you’ve given us a point estimate there or thereabouts for the vaccine and the antiviral, should I assume the majority of the flex remaining relates to the base business? And if so, can you help me understand the key moving parts within that element of the business, which drugs may be a driver of that flex? Thank you.

Albert Bourla, Chairman and CEO

Thank you. Let me take, very quickly in the interest of time, the last one. No, the flex is spread around everything. So you should assume, for example, in the vaccine numbers we gave, $500 million up, $500 million down, that’s $1 billion. On Paxlovid, $500 million up, $500 million down, that’s another $1 billion. And then, on the base business, as always, we gave $1 billion up and down. So whatever you think is the midpoint, it’s $1 billion up or $1 billion down, which is consistent with what we have been doing all these years for that level of business. And Mikael, on the oral?

Mikael Dolsten, President, Worldwide Research and Development

Yes. Danuglipron is a BID drug and pill burden will be relatively low. You also asked for the additional GLP-1 drug we have in clinical development, that’s once a day drug. As we have now, I think, really defined what will be soon optimal titration for an oral GLP-1 and we were of course pioneering that there isn’t really a date on it. We may actually consider to take the once daily in the same study as danuglipron, given that we have now this unique opportunity to look through what seems to be two great directs. But currently, I believe danuglipron has all what it takes to go forward to a potential pivotal study based on this study that we shared with you. But it’s, of course, a unique situation to have more than one molecule, and it gives us the very best option for going into Phase 3 quite rapidly after concluding that Phase 2b, pending, of course, expected outcome.

Albert Bourla, Chairman and CEO

Thank you, Mikael. And the last question, please.

Operator, Operator

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

Carter Gould, Analyst (Barclays)

Great. Good morning. Thanks for taking the question. I’ll keep it to one since we’re at the end. And at the risk of not getting an answer, on OUS pricing for Paxlovid, I understand the underlying aspect is driving sort of your pricing strategy between GDP and volume-based discounts. But in practice, how consistent has the pricing been across geographies? Any color at a high level would be helpful. And as we think about potentially the standard risk data, the prophy data kind of playing out over the course of the year, should we anticipate that pricing will be relatively consistent per course in the second half relative to the first half? Any color there would be helpful. Thank you.

Albert Bourla, Chairman and CEO

Our pricing for Paxlovid is a tier pricing. So there is a tier for high-income countries, and that is more or less in line with what you have seen published for Merck’s, for example, product, and we have seen published ourselves. Only exception was the U.S., that they got a very special price because of higher orders, but the rest are more or less consistent. And then there is, of course, there is a second tier for middle-income countries. And for the lower-income countries, we are going to provide it at cost. But also for the low-income countries, in addition to our own providing at cost, of course, we have also initiated a process that a very big number of generic companies will start manufacturing for the low-income countries, which will be 53% of the global population. Now if the price will remain consistent, clearly, this is nothing to comment here. We will not, let’s say, commenting on how prices may or may not evolve in the future. Thank you very much. Now some closing comments very quickly. We have generated strong results, of course, for both pace and impact and financial performance, and we look forward to continue that in 2022. I want to speak a little bit about a few changes in people that we are doing. Speaking about that, we continue to attract visionary, purpose-driven leaders, with a track record of delivering breakthrough results for patients. Case in point, last week, we announced that Dr. William Pao will join Pfizer as Executive Vice President and Chief Development Officer, effective March 21 of this year. Dr. Pao brings more than 25 years of experience as an oncologist and scientist. He joins us from Roche, where he most recently served as the Head of Pharma Research and Early Development. He oversaw the discovery and early development of a portfolio of new molecular entities to treat diseases related to cancer, neuroscience, ophthalmology, rare diseases and can go on and on and on. Of course, cancer is a very big part of his portfolio. Clearly, I want to mention that Dr. Pao succeeds Rod MacKenzie, a legendary leader in Pfizer, who recently announced his intent to retire after 35 years of Pfizer. I want to thank Rod for his incredible contribution to Pfizer, including the outstanding leadership in helping bring Comirnaty and Paxlovid to the world so quick. Of course, also, I need to touch based on something that everybody has in mind. I want to take a moment to recognize my trusted colleague and friend, Frank D’Amelio, who also has announced his intention to retire from Pfizer after an incredibly impactful decade and at the half with the Company as CFO. Frank is one of the smartest, more respected and most effective leaders I have ever had the good fortune to work with, and the positive impact he has had on Pfizer and on all our stakeholders is immeasurable. Frank isn’t going anywhere yet, just to clarify as he has agreed to stay on board and as we search for his successor and also to serve in a consulting role through the transition. That said, I wanted to take the opportunity to thank him publicly for all he has meant to Pfizer and to me personally. And Frank, on behalf of our 80,000 colleagues around the world, I wish you good health, every happiness as you begin a new chapter when this time comes, because it’s not yet. Wherever life’s journey takes you, I’m sure it will be directionally correct. And that will bring an end to our call. Thank you for joining us. Have a great rest of your day.

Operator, Operator

Ladies and gentlemen, this does conclude Pfizer's fourth quarter 2021 earnings conference Call. You may now all disconnect.