PFIZER REPORTS SECOND-QUARTER 2016 RESULTS

NEW YORK–(BUSINESS WIRE)– Pfizer Inc. (NYSE:PFE) reported financial results for second-quarter
2016 and reaffirmed its 2016 financial guidance for Revenues and
Adjusted Diluted EPS⁽²⁾.

On September 3, 2015, Pfizer acquired Hospira, Inc. (Hospira).
Consequently, financial results for the second quarter and first six
months of 2016 include legacy Hospira global operations while financial
results for the second quarter and first six months of 2015 do not
include any contribution from legacy Hospira operations.

The Company manages its commercial operations through two distinct
businesses: Pfizer Innovative Health (IH)⁽³⁾ (formerly the
Innovative Products business) and Pfizer Essential Health (EH)⁽³⁾⁽⁴⁾
(formerly the Established Products business). Financial results
for each of these businesses are presented in the Operating Segment
Information section of the press release located at the hyperlink
below.

Some amounts in this press release may not add due to rounding. All
percentages have been calculated using unrounded amounts. References to
operational variances pertain to period-over-period growth rates that
exclude the impact of foreign exchange as well as the negative currency
impact related to Venezuela. Results for the second quarter and first
six months of 2016 and 2015 are summarized below.

2016 FINANCIAL GUIDANCE⁽⁵⁾

EXECUTIVE COMMENTARY

Ian Read, Chairman and Chief Executive Officer, stated, “Our continued
sharp focus on executing against the distinct strategies for both our
Innovative Health and Essential Health businesses has delivered a strong
financial performance during the second quarter as well as for the first
half of 2016. This performance was driven by all areas of the company,
reflecting ongoing strength from our recent product launches and key
in-line products, the contribution of legacy Hospira products, continued
improvement in the revenue profile for our standalone Essential Health
business, the advancement of our product pipeline and sound capital
allocation choices.

“Furthermore, I see our product pipeline along with the assets obtained
from our recent business development initiatives as positioning the
Company competitively in those areas where I believe Pfizer’s strengths
can generate significant shareholder value over time while also
benefiting patients,” Mr. Read concluded.

Frank D’Amelio, Chief Financial Officer, stated, “Overall, I am pleased
with our second-quarter 2016 financial results and with our ability to
continue delivering shareholder value through prudent capital
allocation. We grew revenues by 4% operationally, excluding the impact
of foreign exchange and legacy Hospira operations. We also continued to
deliver significant value directly to shareholders by returning $8.7
billion to shareholders through dividends and share repurchases in the
first half of 2016, including the completion of a $5 billion accelerated
share repurchase agreement in June 2016. Additionally, we announced and
completed the acquisition of Anacor Pharmaceuticals, Inc. (Anacor) in
the second quarter of 2016. We also reaffirmed our 2016 financial
guidance for Revenues and Adjusted Diluted EPS⁽²⁾, reflecting
the overall strength of our businesses and our confidence in their
outlooks going forward.”

QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2016 vs.
Second-Quarter 2015)

Revenues totaled $13.1 billion, an increase of $1.3 billion, or 11%,
which reflects operational growth of $1.6 billion, or 13%, partially
offset by the unfavorable impact of foreign exchange of $302 million, or
3%. Excluding the contribution of legacy Hospira operations of $1.1
billion and foreign exchange, Pfizer-standalone revenues increased by
$458 million operationally, or 4%.

Revenues in developed markets grew $1.5 billion, or 17%, operationally,
driven primarily by the inclusion of $1.1 billion of revenues from
legacy Hospira operations and continued strong performance of several
key products, notably Ibrance in the U.S., Eliquis, as well as Xeljanz
and Lyrica, both primarily in the U.S. Operational revenue growth in
developed markets was partially offset primarily by lower revenues for
Prevnar 13 in the U.S., the loss of exclusivity and associated generic
competition for Zyvox, primarily in the U.S. and certain developed
Europe markets, and Lyrica in certain developed Europe markets, as well
as the December 31, 2015 expiration of the collaboration agreement to
co-promote Rebif in the U.S.

In emerging markets, revenues increased $116 million, or 4%,
operationally, reflecting the favorable impact of the addition of legacy
Hospira operations, which contributed $78 million and the performance of
certain Essential Health products primarily in China partially offset
primarily by lower revenues for Prevenar 13.

Innovative Health Highlights

• IH revenues increased 9% operationally, primarily due to continued
  strong momentum from Ibrance in the U.S., strong operational growth
  from Eliquis globally as well as Lyrica and Xeljanz, both primarily in
  the U.S. This growth was partially offset by the expected decline in
  revenues for Prevnar 13 for adults in the U.S. due to a high initial
  capture rate of the eligible population following its successful
  fourth-quarter 2014 launch, which resulted in a smaller remaining
  “catch up” opportunity compared to the prior-year quarter.
  International revenues for the pediatric indication for Prevenar 13
  declined, primarily in emerging markets, reflecting timing of
  purchases from Gavi, the Vaccine Alliance, and certain other markets,
  compared to the prior-year quarter. Additionally, IH revenues were
  impacted by the expiration of the collaboration agreement to
  co-promote Rebif in the U.S., which expired at the end of 2015.

Essential Health Highlights

• EH revenues increased 19% operationally, primarily due to the
  inclusion of legacy Hospira operations, which contributed $1.1
  billion, partially offset by the loss of exclusivity and associated
  generic competition for certain Peri-LOE Products⁽⁶⁾,
  primarily Zyvox in the U.S. and certain developed Europe markets as
  well as Lyrica in certain developed Europe markets. Revenues excluding
  the contribution from the legacy Hospira portfolio (EH Standalone)
  declined 3% operationally, reflecting a 19% operational decline from
  the aforementioned Peri-LOE Products portfolio, partially offset by
  11% operational growth from the EH Standalone Sterile Injectable
  Pharmaceuticals⁽⁶⁾ portfolio and 2% operational growth from
  EH Standalone Legacy Established Products⁽⁶⁾. EH revenues
  in emerging markets increased 8% operationally, primarily driven by
  the inclusion of legacy Hospira operations and operational growth from
  the EH Standalone Sterile Injectable Pharmaceuticals portfolio.

GAAP Reported⁽¹⁾ Income Statement Highlights

The diluted weighted-average shares outstanding declined by 106 million
shares compared to the prior-year quarter due to Pfizer’s share
repurchase program, primarily reflecting the impact of a $5 billion
accelerated share repurchase agreement executed in March 2016 and
completed in June 2016.

Adjusted⁽²⁾ Income Statement Highlights

A full reconciliation of Reported⁽¹⁾ to Adjusted⁽²⁾
financial measures and associated footnotes can be found starting on
page 17 of the press release located at the hyperlink below.

RECENT NOTABLE DEVELOPMENTS

Product Developments

• Chantix/Champix (varenicline) — Pfizer announced in May 2016
  that the European Summary of Product Characteristics and Package
  Leaflet for Champix have been updated to include safety and efficacy
  data from the EAGLES (Evaluating Adverse Events in a Global Smoking
  Cessation Study) trial. As part of the update, the black triangle
  symbol, which indicated that additional safety monitoring for Champix
  in the EU was required, has been removed.
• Ibrance (palbociclib) — In June 2016, Pfizer presented final
  results from the Phase 3 PALOMA-2 trial for Ibrance, an oral,
  first-in-class inhibitor of cyclin-dependent kinases 4 and 6, as an
  oral presentation at the American Society of Clinical Oncology 2016
  Annual Meeting (ASCO 2016). The study met its primary endpoint by
  demonstrating an improvement in progression-free survival (PFS) for
  the combination of Ibrance plus letrozole compared with letrozole plus
  placebo in post-menopausal women with estrogen receptor-positive,
  human epidermal growth factor receptor 2-negative (ER+, HER2-)
  advanced or metastatic breast cancer who had not received previous
  systemic treatment for their advanced disease. The PALOMA-2 trial
  provides confirmatory evidence for Ibrance in combination with
  letrozole in the first-line setting, which was first evaluated in the
  Phase 2 PALOMA-1 trial. These data will support additional planned
  global regulatory submissions and a request for conversion of the
  accelerated approval for Ibrance to regular approval in the U.S.
• Prevnar 13 (Pneumococcal 13-valent Conjugate Vaccine [Diphtheria
  CRM197 Protein]) — Pfizer announced in July 2016 that it received
  U.S. Food and Drug Administration (FDA) approval for an expanded age
  indication for Prevnar 13 to include adults 18 through 49 years of
  age, in addition to the already approved indications for adults 50
  years and older for the prevention of pneumococcal pneumonia and
  invasive disease caused by 13 Streptococcus pneumoniae strains
  in the vaccine and for children 6 weeks through 17 years of age (prior
  to the 18th birthday) for the prevention of invasive disease caused by
  the 13 Streptococcus pneumoniae strains in the vaccine.
• Sutent (sunitinib malate) — Pfizer announced in July 2016
  positive top-line results from the S-TRAC (Sunitinib Trial in Adjuvant
  Renal Cancer) trial, a Phase 3 study of Sutent versus placebo in the
  adjuvant setting. The study met its primary endpoint of improving
  disease-free survival (DFS) in patients with renal cell carcinoma
  (RCC) who are at high risk for recurrence after surgery. The S-TRAC
  trial is the first RCC trial of a tyrosine kinase inhibitor to prolong
  DFS in the adjuvant setting. Full efficacy and safety data will be
  submitted for presentation at the European Society for Medical
  Oncology (ESMO) 2016 Congress in October 2016.
• Trumenba (Meningococcal Group B vaccine) — Pfizer announced in
  May 2016 that the European Medicines Agency has accepted the Marketing
  Authorization Application for Trumenba for review. Trumenba has been
  developed for the prevention of invasive meningococcal disease caused
  by Neisseria meningitidis serogroup B in individuals aged 10
  years and older and was approved in the U.S. in October 2014.
• Xalkori (crizotinib) — In July 2016, the Committee for
  Medicinal Products for Human Use (CHMP) adopted a positive opinion
  recommending extension of the current indication of Xalkori in the EU
  to also include the treatment of adults with ROS1-positive advanced
  non-small cell lung cancer (NSCLC). The CHMP recommendation will now
  be reviewed by the European Commission, which is expected to issue a
  decision on whether to extend the EU indication in the coming months.
  This recommendation is based on efficacy and safety data from the
  Phase 1 PROFILE 1001 trial of crizotinib.
• Xeljanz (tofacitinib citrate)
  • Pfizer announced in July 2016 positive top-line results from Oral
    Clinical Trials for tofAcitinib in ulceratiVE colitis (OCTAVE)
    Sustain, the third Phase 3 study of Xeljanz being investigated in
    patients with moderately to severely active ulcerative colitis
    (UC). OCTAVE Sustain is a 52 week study that evaluated oral
    tofacitinib 5 mg and 10 mg twice daily (BID) as a maintenance
    treatment in adult patients with moderately to severely active UC
    who previously completed and achieved clinical response in either
    the OCTAVE Induction 1 or OCTAVE Induction 2 studies. Top-line
    results from the OCTAVE Sustain study showed that the proportion
    of patients in remission at week 52, the primary efficacy
    endpoint, was significantly greater in both the tofacitinib 5 mg
    and 10 mg BID groups compared to placebo. No new or unexpected
    safety findings for tofacitinib were observed in the study.
    Detailed analyses of OCTAVE Sustain, including additional efficacy
    data, will be submitted for presentation at a future scientific
    meeting.
  • Pfizer recently withdrew all pending regulatory applications
    seeking approval of tofacitinib for the treatment of adult
    patients with moderate to severe chronic plaque psoriasis,
    including its supplemental new drug application in the U.S.
    following the October 2015 Complete Response Letter from the FDA.
    The withdrawal of these filings will allow Pfizer more time to
    determine the path forward for tofacitinib in this indication.
    Pfizer remains committed to advancing the tofacitinib clinical
    development program for rheumatoid arthritis, psoriatic arthritis
    (PsA) and UC.
  • Pfizer announced in June 2016 positive top-line results from its
    second Phase 3 study investigating tofacitinib for the treatment
    of PsA in adult patients, Oral Psoriatic Arthritis triaL (OPAL)
    Beyond. The study met its primary efficacy endpoints with
    tofacitinib 5 mg BID and 10 mg BID compared to placebo treatment.

Pipeline Developments

A comprehensive update of Pfizer’s development pipeline was published
today and is now available at www.pfizer.com/pipeline.
It includes an overview of Pfizer’s research and a list of compounds in
development with targeted indication and phase of development, as well
as mechanism of action for candidates from Phase 2 through registration.

• ALO-02 (oxycodone hydrochloride and naltrexone hydrochloride)
  — In June 2016, Pfizer announced that the FDA Anesthetic and
  Analgesic Drug Products Advisory Committee and Drug Safety and Risk
  Management Advisory Committee voted (9 to 6) in favor of approval of
  ALO-02 extended-release capsules for its proposed indication,
  “management of pain severe enough to require daily, around-the-clock,
  long-term opioid treatment and for which alternative treatment options
  are inadequate.” The Committees recommended the inclusion of
  abuse-deterrent labeling for intranasal (11 to 4) and intravenous (9
  to 6) routes of abuse. They voted against inclusion of abuse-deterrent
  labeling for the oral route (6 to 9). The FDA will take the
  Committees’ recommendations into consideration before taking action on
  the New Drug Application (NDA) for ALO-02.
• Avelumab (MSB0010718C)
  • In July 2016, Merck KGaA, Darmstadt, Germany (Merck KGaA) and
    Pfizer announced the initiation of a Phase 3 study, JAVELIN
    Ovarian 100, to evaluate the efficacy and safety of avelumab in
    combination with, and/or as follow-on (maintenance) treatment to,
    platinum-based chemotherapy in patients with locally advanced or
    metastatic disease (Stage 3 or Stage 4) with previously untreated
    epithelial ovarian cancer. JAVELIN Ovarian 100 is the first Phase
    3 study evaluating the addition of an immune checkpoint inhibitor
    to standard-of-care in first-line treatment for this aggressive
    disease.
  • In June 2016, Merck KGaA and Pfizer presented data for avelumab
    across seven different cancers at ASCO 2016. The avelumab
    presentations, from the JAVELIN clinical development program,
    included results from a number of difficult-to-treat cancers,
    including data from the pivotal Phase 2 trial of avelumab as a
    potential second-line treatment for metastatic Merkel cell
    carcinoma. Additional avelumab data was presented in mesothelioma,
    adrenocortical carcinoma, NSCLC, and urothelial bladder, gastric
    and ovarian cancers, as well as updated safety data.

• Bococizumab (PF-04950615, RN316) — In June 2016, Pfizer
  announced positive top-line results for two additional Phase 3 trials,
  SPIRE-HR (High Risk) and SPIRE-FH (Familial Hypercholesterolemia).
  Both studies met their primary endpoint, demonstrating a significant
  reduction in the percent change from baseline in low-density
  lipoprotein cholesterol (LDL-C) at 12 weeks compared to placebo among
  adults at high and very high risk for cardiovascular events who were
  receiving a maximally tolerated dose of a statin. SPIRE-HR and
  SPIRE-FH are the third and fourth of six Phase 3 lipid-lowering
  studies to complete and demonstrate positive top-line results. The two
  remaining Phase 3 lipid-lowering studies are anticipated to complete
  later in 2016.
• Crisaborole Topical Ointment, 2% (AN2728) — In July 2016,
  Pfizer announced that the findings from two pivotal Phase 3 studies of
  investigational crisaborole were published in the online issue of the Journal
  of the American Academy of Dermatology. The detailed results from
  the AD-301 and AD-302 studies showed that crisaborole achieved
  statistically significant results on primary and secondary endpoints
  for the treatment of atopic dermatitis in children two years of age
  and up and in adults compared to vehicle ointment alone. Crisaborole
  was obtained by Pfizer as part of the acquisition of Anacor, which was
  completed in June 2016.
• Ertugliflozin (PF-04971729) — Pfizer and Merck, known as MSD
  outside the U.S. and Canada, announced in June 2016 that two Phase 3
  studies (VERTIS Mono and VERTIS Factorial) of ertugliflozin, an
  investigational oral SGLT-2 inhibitor for the treatment of patients
  with type 2 diabetes, both met their primary endpoints. Full results
  from the VERTIS clinical development program of ertugliflozin were
  presented for the first time in June 2016 at the Scientific Sessions
  of the American Diabetes Association. The companies also reaffirmed
  their plans to submit NDAs to the FDA for ertugliflozin and the two
  fixed-dose combination tablets (ertugliflozin plus Januvia^®(7)
  and ertugliflozin plus metformin) by the end of 2016.
• Inotuzumab Ozogamicin — Pfizer announced in June 2016 the
  final results from the Phase 3 INO-VATE ALL study evaluating the
  safety and efficacy of inotuzumab ozogamicin as compared with
  investigator choice chemotherapy in adult patients with relapsed or
  refractory CD22-positive acute lymphoblastic leukemia. Results were
  presented as a late-breaking oral presentation (#LB2233) at the 21^st
  Congress of the European Hematology Association (EHA) 2016 Annual
  Meeting. Final results were also published in the June 12, 2016 online
  issue of The New England Journal of Medicine.
• Lorlatinib (PF-06463922) — In June 2016, Pfizer presented
  encouraging new data from a Phase 1/2 study of lorlatinib (the
  proposed non-proprietary name for PF-06463922), an investigational,
  next-generation ALK/ROS1 tyrosine kinase inhibitor, in an oral
  presentation at ASCO 2016. The study showed clinical response in
  patients with ALK-positive or ROS1-positive advanced NSCLC, including
  patients with brain metastases. The ongoing Phase 2 study is expected
  to enroll a total of 240 patients across six cohorts (five for
  ALK-positive and one for ROS1-positive patients with NSCLC), with
  enrollment defined by degree and type of prior treatment.
• SPK-9001 — Spark Therapeutics and Pfizer announced in July
  2016 that the FDA has granted breakthrough therapy designation to
  SPK-9001, the lead investigational candidate in the companies’ SPK-FIX
  program, in development for the treatment of hemophilia B. SPK-9001, a
  novel bio-engineered adeno-associated virus (AAV) capsid expressing a
  codon-optimized, high-activity human factor IX variant, is being
  investigated in an ongoing Phase 1/2 trial as a potential one-time
  therapy.
• Utomilumab (PF-05082566) — In June 2016, Pfizer presented
  results from a Phase 1b trial of Pfizer’s investigational
  immunotherapy agent utomilumab (the proposed non-proprietary name for
  PF-05082566), a 4-1BB (also called CD137) agonist, in combination with
  pembrolizumab, a PD-1 inhibitor, in patients with advanced solid
  tumors. This is the first reported study of a 4-1BB agonist combined
  with a checkpoint inhibitor. Encouraging safety data from the study
  were shared in an oral presentation at ASCO 2016. Pfizer is
  investigating utomilumab as a single agent in certain solid tumors and
  in combinations across multiple solid tumors and hematological
  malignancies, including with rituximab in lymphoma and with other
  immunotherapies, including Pfizer’s OX40 agonist (PF-04518600), Kyowa
  Hakko Kirin’s anti-CCR4 (mogamulizumab) and avelumab (Merck KGaA and
  Pfizer alliance).

Corporate Developments

• In August 2016, Pfizer acquired all remaining equity in Bamboo
  Therapeutics, Inc. (Bamboo), a privately held biotechnology company
  based in Chapel Hill, N.C., that is focused on developing gene
  therapies for the treatment of patients with certain rare diseases,
  for an upfront payment of $150 million plus potential milestone
  payments to Bamboo’s selling shareholders of up to $495 million,
  contingent upon the progression of key assets through development,
  regulatory approval and commercialization. Pfizer had previously
  acquired a 22% stake in Bamboo in the first quarter of 2016 for a
  payment of approximately $43 million. This acquisition will provide
  Pfizer with several clinical and pre-clinical assets that complement
  Pfizer’s rare disease portfolio, an advanced AAV vector design and
  production technology, and a fully functional Phase 1/2 gene therapy
  manufacturing facility. Following the acquisition, Bamboo is now a
  wholly-owned subsidiary of Pfizer.
• In July 2016, Pfizer and Western Oncolytics announced that the
  companies have entered into a development collaboration, license and
  option agreement to advance Western Oncolytics’ novel oncolytic
  vaccinia virus, WO-12. Oncolytic viruses are viruses engineered to
  kill cancer cells while sparing healthy cells, which subsequently
  elicits anti-cancer immune responses. This collaboration in oncolytic
  virus development adds another novel technology platform to Pfizer’s
  cancer vaccine efforts and provides an additional tool to bolster its
  immuno-oncology portfolio. Under the terms of the agreement, Pfizer
  and Western Oncolytics will collaborate on preclinical and clinical
  development of WO-12 through Phase 1 trials. Following completion of
  Phase 1 trials, Pfizer has an exclusive option to acquire WO-12.
  Financial terms of the agreement were not disclosed.
• In June 2016, Pfizer announced that it completed its acquisition of
  Anacor for $99.25 in cash (without interest but subject to required
  withholding of taxes) per share of Anacor common stock, for a total
  transaction value, net of cash and cash equivalents, of approximately
  $5.2 billion.
• Pfizer announced in March 2016 that it entered into an accelerated
  share repurchase agreement with Goldman, Sachs & Co. (GS&Co.) to
  repurchase $5 billion of Pfizer’s common stock. Pursuant to the terms
  of the agreement, on March 10, 2016, Pfizer paid $5 billion to GS&Co.
  and received an initial delivery of approximately 136 million shares
  of Pfizer common stock from GS&Co. Upon settlement of the agreement in
  June 2016 and pursuant to the agreement’s settlement terms, GS&Co.
  delivered approximately 18 million additional shares of Pfizer common
  stock to Pfizer. After giving effect to the accelerated share
  repurchase agreement, Pfizer’s remaining share-purchase authorization
  was approximately $11.4 billion as of August 2, 2016.

Please find Pfizer’s press release and associated financial tables,
including reconciliations of certain GAAP reported to non-GAAP adjusted
information, at the following hyperlink:

http://www.pfizer.com/system/files/presentation/Q2_2016_PFE_Earnings_Press_Release_lkasdvfjlskad.pdf

(Note: If clicking on the above link does not open up a new web page,
you may need to cut and paste the above URL into your browser’s address
bar.)

For additional details, see the associated financial schedules and
product revenue tables attached to the press release located at the
hyperlink referred to above and the attached disclosure notice.

• Pfizer does not provide guidance for GAAP Reported financial measures
  (other than Revenues) or a reconciliation of forward-looking non-GAAP
  financial measures to the most directly comparable GAAP Reported
  financial measures on a forward-looking basis because it is unable to
  predict with reasonable certainty the ultimate outcome of pending
  litigation, unusual gains and losses, acquisition-related expenses and
  potential future asset impairments without unreasonable effort. These
  items are uncertain, depend on various factors, and could have a
  material impact on GAAP Reported results for the guidance period.
• Does not assume the completion of any business development
  transactions not completed as of July 3, 2016, including any one-time
  upfront payments associated with such transactions.
• Exchange rates assumed are a blend of the actual exchange rates in
  effect through second-quarter 2016 and mid-July 2016 exchange rates
  for the remainder of the year.
• Guidance for 2016 revenues reflects the anticipated negative impact of
  $2.3 billion due to recent and expected generic competition for
  certain products that have recently lost or are anticipated to soon
  lose patent protection.
• Guidance for 2016 revenues also reflects the anticipated negative
  impact of $1.4 billion as a result of unfavorable changes in foreign
  exchange rates relative to the U.S. dollar compared to foreign
  exchange rates from 2015, including $0.8 billion due to the estimated
  significant negative currency impact related to Venezuela. The
  anticipated negative impact on adjusted diluted EPS⁽²⁾
  resulting from unfavorable changes in foreign exchange rates compared
  to foreign exchange rates from 2015 is approximately $0.10, including
  $0.07 due to the estimated significant negative currency impact
  related to Venezuela.
• Guidance for adjusted diluted EPS⁽²⁾ assumes diluted
  weighted-average shares outstanding of approximately 6.2 billion
  shares.

• Sterile Injectable Pharmaceuticals include generic injectables and
  proprietary specialty injectables (excluding Peri-LOE Products).
• Peri-LOE Products include products that have recently lost or are
  anticipated to soon lose patent protection. These products primarily
  include Lyrica in certain developed Europe markets, Pristiq globally,
  Celebrex, Zyvox and Revatio in most developed markets, Vfend and
  Viagra in certain developed Europe markets and Japan, and Inspra in
  the EU.
• Legacy Established Products include products that have lost patent
  protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE
  Products).

DISCLOSURE NOTICE: Except where otherwise noted, the information
contained in this earnings release and the related attachments is as of
August 2, 2016. We assume no obligation to update any forward-looking
statements contained in this earnings release and the related
attachments as a result of new information or future events or
developments.

This earnings release and the related attachments contain
forward-looking statements about our anticipated future operating and
financial performance, business plans and prospects, in-line products
and product candidates, strategic reviews, capital allocation,
business-development plans, the benefits expected from our recent
acquisitions of Hospira, Inc. (Hospira) and Anacor Pharmaceuticals, Inc.
(Anacor) and plans relating to share repurchases and dividends, among
other things, that involve substantial risks and uncertainties. You can
identify these statements by the fact that they use future dates or use
words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,”
“estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,”
“forecast,” “goal,” “objective,” “aim” and other words and terms of
similar meaning. Among the factors that could cause actual results to
differ materially from past results and future plans and projected
future results are the following:

• the outcome of research and development activities, including, without
  limitation, the ability to meet anticipated pre-clinical and clinical
  trial commencement and completion dates, regulatory submission and
  approval dates, and launch dates for product candidates, as well as
  the possibility of unfavorable pre-clinical and clinical trial
  results, including unfavorable new clinical data and additional
  analyses of existing clinical data;
• decisions by regulatory authorities regarding whether and when to
  approve our drug applications, which will depend on the assessment by
  such regulatory authorities of the benefit-risk profile suggested by
  the totality of the efficacy and safety information submitted;
  decisions by regulatory authorities regarding labeling, ingredients
  and other matters that could affect the availability or commercial
  potential of our products; and uncertainties regarding our ability to
  address the comments in complete response letters received by us with
  respect to certain of our drug applications to the satisfaction of the
  FDA;
• the speed with which regulatory authorizations, pricing approvals and
  product launches may be achieved;
• the outcome of post-approval clinical trials, which could result in
  the loss of marketing approval for a product or changes in the
  labeling for, and/or increased or new concerns about the safety or
  efficacy of, a product that could affect its availability or
  commercial potential;
• risks associated with interim data, including the risk that final
  results of studies for which interim data have been provided and/or
  additional clinical trials may be different from (including less
  favorable than) the interim data results and may not support further
  clinical development of the applicable product candidate or indication;
• the success of external business-development activities, including the
  ability to satisfy the conditions to closing of any announced
  transactions in the anticipated time frame or at all;
• competitive developments, including the impact on our competitive
  position of new product entrants, in-line branded products, generic
  products, private label products and product candidates that treat
  diseases and conditions similar to those treated by our in-line drugs
  and drug candidates;
• the implementation by the FDA and regulatory authorities in certain
  other countries of an abbreviated legal pathway to approve biosimilar
  products, which could subject our biologic products to competition
  from biosimilar products, with attendant competitive pressures, after
  the expiration of any applicable exclusivity period and patent rights;
• risks related to our ability to develop and launch biosimilars;
• the ability to meet generic and branded competition after the loss of
  patent protection for our products or competitor products;
• the ability to successfully market both new and existing products
  domestically and internationally;
• difficulties or delays in manufacturing;
• trade buying patterns;
• the impact of existing and future legislation and regulatory
  provisions on product exclusivity;
• trends toward managed care and healthcare cost containment;
• the impact of any significant spending reductions or cost controls
  affecting Medicare, Medicaid or other publicly funded or subsidized
  health programs or changes in the tax treatment of employer-sponsored
  health insurance that may be implemented, and/or any significant
  additional taxes or fees that may be imposed on the pharmaceutical
  industry as part of any broad deficit-reduction effort;
• the impact of U.S. healthcare legislation enacted in 2010—the Patient
  Protection and Affordable Care Act, as amended by the Health Care and
  Education Reconciliation Act—and of any modification, repeal or
  invalidation of any of the provisions thereof;
• U.S. federal or state legislation or regulatory action affecting,
  among other things, pharmaceutical product pricing, reimbursement or
  access, including under Medicaid, Medicare and other publicly funded
  or subsidized health programs; the importation of prescription drugs
  from outside the U.S. at prices that are regulated by governments of
  various foreign countries; restrictions on direct-to-consumer
  advertising; limitations on interactions with healthcare
  professionals; or the use of comparative effectiveness methodologies
  that could be implemented in a manner that focuses primarily on the
  cost differences and minimizes the therapeutic differences among
  pharmaceutical products and restricts access to innovative medicines;
  as well as pricing pressures for our products as a result of highly
  competitive insurance markets;
• legislation or regulatory action in markets outside the U.S. affecting
  pharmaceutical product pricing, reimbursement or access, including, in
  particular, continued government-mandated reductions in prices and
  access restrictions for certain biopharmaceutical products to control
  costs in those markets;
• the exposure of our operations outside the U.S. to possible capital
  and exchange controls, expropriation and other restrictive government
  actions, changes in intellectual property legal protections and
  remedies, as well as political unrest, unstable governments and legal
  systems and inter-governmental disputes;
• contingencies related to actual or alleged environmental contamination;
• claims and concerns that may arise regarding the safety or efficacy of
  in-line products and product candidates;
• any significant breakdown, infiltration or interruption of our
  information technology systems and infrastructure;
• legal defense costs, insurance expenses, settlement costs, the risk of
  an adverse decision or settlement and the adequacy of reserves related
  to product liability, patent matters, government investigations,
  consumer, commercial, securities, antitrust, environmental,
  employment, tax issues, ongoing efforts to explore various means for
  resolving asbestos litigation, and other legal proceedings;
• our ability to protect our patents and other intellectual property,
  both domestically and internationally;
• interest rate and foreign currency exchange rate fluctuations,
  including the impact of possible currency devaluations in countries
  experiencing high inflation rates and the volatility following the
  United Kingdom (U.K.) referendum in which voters approved an exit from
  the EU;
• governmental laws and regulations affecting domestic and foreign
  operations, including, without limitation, tax obligations and changes
  affecting the tax treatment by the U.S. of income earned outside the
  U.S. that may result from pending and possible future proposals;
• the end result of any negotiations between the U.K. government and the
  EU regarding the terms of the U.K.’s exit from the EU, which could
  have implications on our research, commercial and general business
  operations in the U.K.;
• any significant issues involving our largest wholesaler customers,
  which account for a substantial portion of our revenues;
• the possible impact of the increased presence of counterfeit medicines
  in the pharmaceutical supply chain on our revenues and on patient
  confidence in the integrity of our medicines;
• any significant issues that may arise related to the outsourcing of
  certain operational and staff functions to third parties, including
  with regard to quality, timeliness and compliance with applicable
  legal requirements and industry standards;
• any significant issues that may arise related to our joint ventures
  and other third-party business arrangements;
• changes in U.S. generally accepted accounting principles;
• uncertainties related to general economic, political, business,
  industry, regulatory and market conditions including, without
  limitation, uncertainties related to the impact on us, our customers,
  suppliers and lenders and counterparties to our foreign-exchange and
  interest-rate agreements of challenging global economic conditions and
  recent and possible future changes in global financial markets; and
  the related risk that our allowance for doubtful accounts may not be
  adequate;
• any changes in business, political and economic conditions due to
  actual or threatened terrorist activity in the U.S. and other parts of
  the world, and related U.S. military action overseas;
• growth in costs and expenses;
• changes in our product, segment and geographic mix;
• the impact of purchase accounting adjustments, acquisition-related
  costs, discontinued operations and certain significant items;
• the impact of acquisitions, divestitures, restructurings, internal
  reorganizations, product recalls, withdrawals and other unusual items,
  including our ability to realize the projected benefits of our
  cost-reduction and productivity initiatives, including those related
  to our research and development organization, and of the internal
  separation of our commercial operations into our current operating
  structure;
• the risk of an impairment charge related to our intangible assets,
  goodwill or equity-method investments;
• risks related to internal control over financial reporting; and
• risks and uncertainties related to our recent acquisitions of Hospira
  and Anacor, including, among other things, the ability to realize the
  anticipated benefits of the acquisitions of Hospira and Anacor,
  including the possibility that expected cost savings related to the
  acquisition of Hospira and accretion related to the acquisitions of
  Hospira and Anacor will not be realized or will not be realized within
  the expected time frame; the risk that the businesses will not be
  integrated successfully; disruption from the transaction making it
  more difficult to maintain business and operational relationships;
  significant transaction costs; and unknown liabilities.

We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of anticipated results is subject to substantial risks,
uncertainties and inaccurate assumptions. Should known or unknown risks
or uncertainties materialize or should underlying assumptions prove
inaccurate, actual results could vary materially from past results and
those anticipated, estimated or projected. Investors should bear this in
mind as they consider forward-looking statements, and are cautioned not
to put undue reliance on forward-looking statements. A further list and
description of risks, uncertainties and other matters can be found in
our Annual Report on Form 10-K for the fiscal year ended December 31,
2015 and in our subsequent reports on Form 10-Q, in each case including
in the sections thereof captioned “Forward-Looking Information and
Factors That May Affect Future Results” and “Item 1A. Risk Factors”, and
in our subsequent reports on Form 8-K.

The operating segment information provided in this earnings release and
the related attachments does not purport to represent the revenues,
costs and income from continuing operations before provision for taxes
on income that each of our operating segments would have recorded had
each segment operated as a standalone company during the periods
presented.

This earnings release may include discussion of certain clinical studies
relating to various in-line products and/or product candidates. These
studies typically are part of a larger body of clinical data relating to
such products or product candidates, and the discussion herein should be
considered in the context of the larger body of data. In addition,
clinical trial data are subject to differing interpretations, and, even
when we view data as sufficient to support the safety and/or
effectiveness of a product candidate or a new indication for an in-line
product, regulatory authorities may not share our views and may require
additional data or may deny approval altogether.

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