Good day, everyone, and welcome to Pfizer's 4th Quarter 2019 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Chuck Triano, Senior Vice President of Investor Relations. Please go ahead, sir.
Good morning and thank you for joining us today to review Pfizer's Q4 and full year 2019 performance and 2020 financial guidance. I'm joined today by our CEO and Chairman, Albert Bourla Frank D'Amelio, our CFO Michael Dolsten, President of Worldwide Research and Development Angela Wong, Group President, Pfizer Biopharmaceuticals Group John Young, our Chief Business Officer and Doug Lankler, General Counsel. The slides that will be presented on this call were posted to our website earlier this morning and are available at pfizer.com/investors. You'll see here that Slide 3 covers our legal disclosures. Albert and Frank will now make prepared remarks and then we will move to a question and answer session.
With that, I'll now turn the call over to Albert Bourla.
Albert? Thank you, Chuck, and good morning, everyone. This morning I will speak about our performance for the year, the continued advancement of our pipeline and the steps we are taking to position Pfizer for accelerated growth following the expected separation of Abzugene from Pfizer later this year. Frank will then provide details regarding our Q4 performance and our 2020 financial guidance. 2019 was a productive and transformational year for Pfizer, which we generated solid full year financial results.
These results were highlighted by exceptional 8% operational revenue growth for the year and 9% in the Q4 for our biopharma business, which will become the new Pfizer following the expected separation of ABGAR. Once again, our biopharmaceutical group outstanding growth was driven primarily by the continued strong performance from all our key growth drivers. This include Ibrance, Xtandi, Eliquis, Xeljanz, Vintacro among others. Biopharm also generated 14% operational growth in emerging markets in 2019. I would point out that Biopharma's 2019 growth came from volume increases, not pricing.
In fact, pricing had a negative 2% impact in biopharma's results. For full year 2019, global Ibrance revenues increased 23% operationally to become a nearly $5,000,000,000 a year product. In the U. S, Ibrance realized robust growth and retained its strong leadership position in the CDK class with a nearly 90% share. Ibrance performance outside of the U.
S. Was also very strong and we still see significant opportunities in countries where the use of CDK inhibitors has not yet reached the level seen in the U. S. Overall, Ibrance is approved in more than 90 countries, is the number one prescribed CDK4six inhibitor globally and has reached more than 250,000 patients. For Xtandi, Alliance revenues in the U.
S. Were up 20% for the full year and when combined with our royalty income on ex U. S. Sales totaled nearly $1,200,000,000 in 2019. Xtandi is the leading branded novel hormone therapy in an increasingly competitive but growing class with 37% market share in total prescriptions.
The robust year over year growth was due to continued uptake of the non metastatic castration resistant prostate cancer indication as well as prescriber confidence and recognition of extended strong data across CRPC. With the recent launch of our Xtandi indication in metastatic castration sensitive prostate cancer in the U. S, Xtandi is now the 1st and only oral treatment approved by the FDA in 3 distinct types of prostate cancer. Eliquis continued to perform well. Pfizer's share in the global revenues was up 26% operationally to $4,200,000,000 This growth was driven primarily by continued increased adoption in nonvalvular atrial fibrillation as well as oral anticoagulant market share gains.
Eliquis is now the oral anticoagulant leader in 12 markets across the globe. Xeljanz had a strong performance with global revenues increasing 29% operationally to $2,200,000,000 We are very pleased with the continued positive uptake across all indications, rheumatoid arthritis, psoriatic arthritis and ulcerative colitis, and we continue to launch psoriatic arthritis and ulcerative colitis in new market. Looking at our rare disease business. Vintacol continues to ramp up nicely in the U. S.
Following the May 2019 approval and launch for the treatment of ATTR cardiomyopathy. Overall, this first of its kind medicine contributed $473,000,000 in revenue in 2019. Our disease awareness efforts helped drive the diagnosis rate to 9% by the end of the 4th quarter compared with 1% prior to launch. As of the end of 2019, more than 9,000 patients have been diagnosed, more than 5,500 patients had received the prescription for Vintacel and more than 3,000 patients had received the drug. These numbers do not include approximately 100 patients who are still in the early access program.
Global Prevnar 13 revenues were up 3% operationally to $5,800,000,000 The U. S. CDC also published its updated recommendation for immunocompetent adults aged 65 and older to serve clinical decision making in the November morbidity and mortality weekly report, highlighting that a patient can serve a decision to vaccinate with PCV13 with a physician, physician's assistant, nurse practitioner or pharmacist. Looking at our sterile injectables portfolio, our focus on manufacturing recovery is taking shape and beginning to have a positive impact on the top line in the U. S.
We have made solid progress with remediation and modernization and expect continued improvement throughout 2020. Of note, while global revenue from our sterile injectables portfolio declined 1% operationally for the full year, it increased 5% operationally during the Q4. Additionally, more than 80% of our injectables portfolio is in stock today and we anticipate this percentage will continue to increase in 2020. Our global biosimilars portfolio grew 22% operationally to $911,000,000 for the full year. This was driven largely by 70% growth in the U.
S. Thanks to the launch of Retacrid and a gradual uptake of Inflectrum. The growth in the U. S. Was partially offset by decline in international markets driven mainly by Inflectra.
We expect an additional contribution from biosimilars in 2020 with the launch of free oncology monoclonal antibody biosimilars. Last week, we announced the launches of XERABEV and RUXINZ in the U. S. Market and next month we expect to launch TRASIMERA. All three products will be available at a substantially discounted price compared with their originator products.
Full year revenues for our Upjohn business were down 16% operationally to $10,200,000,000 The key headwind during the year was the advent of generic competition on Lyrica in the U. S, which has partially offset by 7% operational growth in China. The growth in China was driven primarily by Viagra and Celebrex as well as Lipitor in non reimbursed channels, which constitute significant market share in China. We are making good progress with a pre integration planning for AbbViehm's proposed combination with Mylan, which remains on track for mid-twenty 20. In December, we announced that former Pfizer Chairman, Ian Reid and current Pfizer Director, James Kilds, will join the Viatrix Board of Directors upon completion of the transaction.
We are also working closely with our counterparts of Mylan on the CFO selection process. We expect to announce the appointments of both the CFO and the 3rd Director by the end of this quarter. We have great confidence in Beatrice, which will combine AbbViehm's strong commercial capabilities and iconic brands with Mylan's terrific pipeline. Turning now to R and D. We remain very pleased with the progress we are making with our pipeline.
We are expecting key clinical readouts in 2020, several of which the potential to make this an exciting year for patients hoping for new treatment options. We anticipate sharing data from up to 15 proof of concept readouts with contributions from all our therapeutic areas as well as up to 10 pivotal study starts and 5 key pivotal study readouts. I will now highlight some of those expected events. We continue to expect our 2 event driven Ibrance early breast cancer programs, Penelope B and PALLAS to read out in late 2020 early 2021, respectively. If successful and following regulatory approval, these programs could double the number of patients eligible to benefit from eyebrows.
The Phase 2 open label single arm ANCHOR CRC study evaluating the efficacy and safety of the combination of BRAFTOVI and MEKTOVI and cetuximab in patients with previously untreated BRAF V600E mutant metastatic colorectal cancer is currently ongoing. Results from the study will be submitted from presentation at the Medical Congress in the second half of twenty twenty. For abrocitinib, our investigational JAK1 inhibitor for the treatment of moderate to severe atopic dermatitis. We look forward to sharing top line findings from the Phase 3 JADECOMPARE trial in the coming months. Pending successful conclusion of the core Phase 3 studies, regulatory submission in the U.
S. Is projected for the Q3 of 2020 with subsequent markets following later in the year. This study is designed to assess the efficacy and safety of abrocitinib or dupilumab placebo in adults on background medicated topical therapy with moderate to severe atopic dermatitis. The study also has a key secondary endpoint that it is designed to assess the effect of on each severity of abercitanib compared with dupilumab in adults with moderate to severe atopic dermatitis on background topical therapy. There are up to 5 proof of concept readouts expected in 2020 from our industry leading immuno kinase pipeline.
Our hope is to advance several of these into Phase III trials. This include TIK2, JAK1, with potential POC results for psoriatic arthritis and for a topical formulation for psoriasis and atopic dermatitis as well as an oral JAK3TECH for vitiligo and oral tick 2 for psoriasis. This is a great example of our unique strategy to purposefully match a molecule to a disease where we think it has the potential to make the most difference as well as the formulation that we believe has the potential to treat milder forms of disease. Our gene therapy platform is advancing with promising Phase III hemophilia A data that is expected to support a Phase III start this year. This would be our 2nd gene therapy pivotal study following the ongoing hemophilia B Phase III study.
In addition, our DMD gene therapy program is gathering additional robust patient data building on the progress we shared at the current project Muscular Dystrophy Conference last June. We are preparing for an expected POC in the first half of twenty twenty and the Phase III pivotal study start in second half of this year. We look forward to successfully completing the Phase III studies for our investigational 20 Velen pneumococcal conjugate vaccine candidate in adults and remain on track to submit the Biologics license application to the FDA by the end of this year. Pfizer's candidate represents a potential significant advancement compared with a potential 15 Valen. If successful in Phase 3 and approved, the 5 additional serotypes may provide coverage against approximately 33% more strains that cause invasive pneumococcal disease in adults and 42% more strains causing the disease in infants in the United States.
For our maternal vaccine for respiratory syndicate virus, RSV, we are preparing for an expected POC in the Q2 of 2020 followed by potentially swift progression to Phase 3. We look forward to sharing more updates on our pipeline during our upcoming Investor Day on March 31. In summary, we finished 2019 with strong momentum and we look forward to continuing that momentum in 2020. During the year, we generated a solid financial performance, further advanced our strong R and D pipeline and took bold actions to reshape Pfizer into an innovation powerhouse that will build on our legacy of delivering breakthroughs that change patients' lives. Now I will turn it over to Frank to provide details on the quarter and our outlook for the remainder of 2020.
Frank? Thanks, Albert. Good day, everyone. Now moving on to the financials. Q4 2019 revenues were 12,700,000,000 dollars down 8% operationally versus the year ago quarter.
Excluding the impact of the Consumer Healthcare business, revenue was down 1% operationally. Our Biopharmaceuticals Group business revenues were $10,500,000,000 up 9% operationally versus the year ago quarter with strong operational growth in Ibrance, Eliquis, Xeljanz and VINDICOIL and a second straight quarter of operational growth for our hospital business including our sterile injectables. Revenues for our Upjohn business in the 4th quarter decreased 32% operationally to $2,200,000,000 with the primary year over year impact again being generic competition for Lyrica in the U. S. That began in July of 2019.
Excluding the unfavorable impact of Lyrica in the U. S. And other recent product losses of exclusivity, Q4 2019 revenues for Upjohn declined 6% operationally. I know Upjohn's business in China has been an area of focus and 4th quarter revenues for Upjohn declined 1% operationally. We saw the expected revenue declines for Lipitor and Norvasc provinces where the volume based procurement program has been implemented and these declines were mostly offset by operational growth from products not impacted by the VBP program including Celebrex and Viagra.
Adjusted cost of sales as a percentage of revenue was favorably impacted by the July completion of the Consumer Healthcare joint venture transaction with GSK, partially offset by the negative impact of foreign exchange and the Lyrica loss of exclusivity. In the Q4, we recorded a $0.06 loss per share on a GAAP basis was primarily due to a $2,600,000,000 asset impairment charge for EUCRISA and restructuring purchase accounting and legal charges. Adjusted diluted EPS for the Q4 was $0.55 versus $0.63 in the year ago quarter. The decrease was primarily due to lower revenues again mainly due to the Lyrica LOE in the U. S.
And higher operating expenses. I want to point out that diluted weighted average shares outstanding declined by 281,000,000 shares compared to the year ago quarter reflecting the impact of shares repurchased during 2018 2019 and partially offset by dilution related to share based employee compensation programs. Finally, foreign exchange had a negative impact of $158,000,000 or 1% on Q4 2019 revenues and a $0.03 negative impact on adjusted diluted EPS compared to the year ago quarter. As you can see on the chart, our 9% operational growth in the Biopharma business was driven by strong performance by Ibrance, Eliquis, Xtandi, VINDAQUIL and INLYTA. Moving on to 2019 financial guidance, as you can see on the chart, we met or exceeded all components of our 2019 financial guidance.
Now I want to highlight how our 2020 guidance compares to 2019 revenue and adjusted diluted EPS. Starting on the left side of the slide, our 2019 results reflect partial year contributions from the Consumer Healthcare Business segment which we deconsolidated in the Q3 of 2019. Excluding $2,100,000,000 in revenues generated from the Consumer Healthcare Business segment, total company 2019 revenues were 49,700,000,000 dollars and 2019 adjusted diluted EPS is $2.95 For 2020, the adjusted diluted EPS guidance range reflects Pfizer's share of the Consumer Healthcare's joint venture's earnings that were generated in Q4 2019 and will be reported in Q1 2020 along with Pfizer's share of the JV's anticipated earnings for the 1st 3 quarters of 2020. As you can see, the midpoint of our 2020 guidance range for revenues implies comparable performance to 2019 revenues after excluding the partial year contribution from consumer healthcare as well as an anticipated $200,000,000 favorable impact from foreign exchange based on mid January 2020 rates compared to last year. Despite an anticipated $2,400,000,000 in LOE headwinds in 2020, we expect the midpoint of the revenue range to remain flat operationally excluding Consumer Healthcare.
Now let's go through the full details of our 2020 financial guidance for total company. As we've said, we are expecting the close of the transaction between our Upjohn business and Mylan to be completed in mid-twenty 20. So we are providing 3 sets of guidance. First, total company which reflects our current construct of the Biopharma and Upjohn businesses and excludes any impact from the pending Upjohn combination with Mylan. 2nd, new Pfizer which is a full year pro form a view that reflects the impact of the pending Viatrix transaction by removing Upjohn and including $12,000,000,000 in cash proceeds from Upjohn to new Pfizer and other transaction related factors such as transitional service agreement revenue and third, Upjohn as a standalone business.
All of these scenarios are based on a full year of revenues and expenses in 2020. Beginning with total company, 2020 revenue guidance of $48,500,000,000 to $50,500,000,000 reflects anticipated continued strong momentum in our Biopharma business primarily offset by the continued negative impact of product losses of exclusivity in our Upjohn business primarily Lyrica in the U. S. Moving on to other elements of our 2020 financial guidance for total company. Compared with 2019 actual results, the midpoints of these ranges imply higher adjusted cost of sales as a percentage of revenues due to the continued impact from the Lyrica LOE, higher adjusted R and D expenses and higher adjusted other income, which reflects earnings from the Consumer Healthcare joint venture and lower adjusted SI and A expenses and adjusted diluted EPS.
In 2020, financial guidance for adjusted EPS assumes no new share repurchases and we will focus instead on increasing the dividend and investing in the business during this period of growth. As a result, our guidance for adjusted diluted EPS assumes diluted weighted average shares outstanding of approximately 5,650,000,000 shares which is approximately the same as 2019. Moving on to financial guidance for new Pfizer for the full year 2020, we now anticipate full year 2020 revenues between $40,700,000,000 $42,300,000,000 with the midpoint of the guidance range representing 8% operational growth as compared to 2019 Biopharma revenues excluding MRIdian and Mylan Japan and an improvement from our initial July targets. This guidance range excludes $600,000,000 of contributions from Meridian, Pfizer's subsidiary and manufacturer of EpiPen and other order injector products as well as from the strategic collaboration with Mylan in Japan for the development, manufacturing and marketing of generic medicines. Due to an organization realignment, both of these assets have shifted to up We now We now anticipate full year 2020 adjusted IBT as a percentage of revenue of approximately 37%, also an improvement from July.
We anticipate the midpoint of the guidance range for adjusted diluted EPS to be $2.30 The operating cash flow guidance range remains approximately 11 $1,000,000,000 to $12,000,000,000 This EPS guidance reflects the $12,000,000,000 cash that Pfizer will receive upon the close of the combination of Upjohn and Mylan which will be used to pay down debt during 2020. As you can see, the midpoints for new Pfizer's 2020 revenue and adjusted IBT margin guidance have improved materially since our preliminary 2020 projections we're projecting in July in conjunction with the announcement of the proposed Mylan and Upjohn combination. We have provided a bridge from our initial July targets to this current guidance on the bottom of the chart for clarity. Upon the close of the Mylanop joint combination and once we become new Pfizer, you can expect the same level of detail in our 2020 guidance that we provided today for total company. Moving on to 2020 financial guidance for UPjohn for the full year 2020, we anticipate revenues of $8,000,000,000 to $8,500,000,000 reflecting the continued negative impact of losses of exclusivity for products such as Lyrica in the U.
S. Which began facing multi source generic competition in July 2019 and the expansion of the volume based procurement program in China and reflecting the inclusion of revenues and expenses associated with MRIdian and Mylan Japan. We anticipate full year 2020 adjusted EBITDA for the Upjohn business of $3,800,000,000 to $4,200,000,000 other than the inclusion of revenues and expenses associated with MRIdian and Mylan Japan, there are no operational changes to Upjohn's 2020 financial guidance compared with preliminary financial targets provided in July of 2019. Again, we have provided a bridge from our initial July targets to this current guidance at the bottom of the chart. Moving on to key takeaways, regarding 2019, we delivered a strong Q4 with our biopharma business growing 9% operationally which represents our go forward business after the pending combination of Upjohn and Mylan.
We provided 2020 guidance ranges for total company, new Pfizer and Upjohn. Importantly, we are projecting strong organic revenue growth for new Pfizer in 2020. We accomplished key product and pipeline milestones since our previous quarterly update and we returned $16,900,000,000 to shareholders in 2019 through a combination of dividends and share repurchases. Looking ahead, we remain committed to delivering attractive shareholder returns in 2020 beyond. Now I'll turn it back to Chuck.
Thanks, Frank and Albert for those remarks. At this time, operator, can we please poll for questions?
Your first question comes from Randall Stanicky from RBC Capital Markets.
Great. Thanks guys for the questions. I have 2, one for Albert and one for Angela. Albert, a couple of weeks ago, you called out $4,500,000,000 in enabling costs in SI and A with an opportunity to simplify. So how do we think about the cost savings opportunity after you close up, John, in terms of number 1, how much incremental cost savings do you see beyond what is built into the 37% margin?
And then number 2, how much of that could hit back half twenty twenty versus 2021? And then I have
a follow-up after that for Angela.
Okay. I think you should how can he ask the question to Angela now?
He can
get back.
He can get back. Okay. So indeed, we have this year approximately EUR 14,300,000,000 of S and A and I was frank to run the numbers in more details. And as I said, dollars 4,500,000 approximately of that is what we call enabling functions. These are functions like finance, legal, HR, facilities that we are facilitating and enabling the core functions of our business to perform.
Core functions, I mean, R and D that is discovering the products, manufacturing that is making them happen and commercial, but it is making them available to the patients. We do believe that this €4,500,000,000 and actually approximately 10,000 people can be improved. And we have plans to do so. In the current guidance and I will ask Frank to comment, there is a part, a small part of that cost opportunity saving already incorporated. And in 2021, will be a much bigger part.
So Frank?
So Randall, just let me run the numbers, is if you look at 2019 actual SI and A, for example, we spent about $14,000,000,000 as a company. Obviously, that $4,500,000,000 that Albert alluded to in that $14,000,000,000 If you look at our 2020 guidance for SI and A, the range is $12,000,000,000 to $13,000,000,000 midpoint, dollars 12.5 $12,500,000,000 from $14,000,000,000 is a decline of $1,500,000,000 Now roughly half of that is consumer, because we went from consolidating consumer to equity accounting on consumer once the deal closed in July 31, 2019. The remaining half is really operational savings across the company, including part of the including some of the $4,500,000,000 that Albert alluded to. And that obviously helped contribute to the IBT as a percentage of revenue improving from 35% from the mid-30s to 37%. And then to Albert's point, obviously, what we're doing now is working on further improvements that would obviously positively impact the SI and A and that would flow to the bottom line.
Wall. Great. Thanks, Albert and Frank. Next question, please.
Your next question comes from Chris Schott from JPMorgan.
Great. Thanks very much for the questions. Just had 3 quick product ones. The first was on VINDAKAL. It seems like a nice step up in all your patient metrics.
It seems like all those basically doubled or tripled from 3Q. Can you help bridge those figures with the sequential sales ramp we saw, which wasn't quite as dramatic? The second question I had was on Ibrance. Just elaboration there in terms of what drove the revised timelines for PALLAS? And have you taken another interim look at the data at this point?
And then finally on tanezumab, just an update in terms of what the status and outlook is for that product at this point? Thanks so much.
Very good. Thank you very much. I will ask Angela to address the Vintacel and tanezumab questions. And then I will say a few words about Ibrance and maybe I will ask Michael to turn it, please.
So thanks for the question. And certainly, we are pleased with
the
increased diagnosis, prescription, as well as the numbers of patients that are receiving Vindical. As you said, our diagnosis now is up to about 9%. The ability for patients to receive prescriptions up to about 64% of those that are diagnosed and those that are receiving medications are at around 35% of those that are diagnosed. So and every quarter since we've been reporting this, we've been seeing some nice increases. So we're certainly pleased with that.
I think in terms actual net sales numbers. I think that there are obviously there every single day this is a dynamic situation and the number and the proportion of patients whether they are Medicare and commercial lives, those are changing. And so the gross to net of those are going to affect, I think, what you see on a net sales basis. So I think that we are watching and really focused on driving diagnosis and ensuring that as many patients can get on these drugs as possible. And we're starting to see some really nice pickup.
But I think that is still a very dynamic situation because we're really relatively new in this process. So we'll continue to monitor and should expect to see some quarter to quarter changes in terms of net sales.
And obviously, the new patients that are contributing disproportionate because they are in fewer months of treatment in terms of sales.
Right. And then your second question was on tanezumab. So we're really pleased that in December of 2019, we completed our U. S. Submission of tanezumab.
And we are also pursuing regulatory submissions in the EU and in Japan. This submission was done in close collaboration with the FDA, and it includes the 2.5 milligram in moderate to severe osteoarthritis patients. So at this moment in time, we're waiting acceptance of this filing. But we see significant potential of tanezumab in osteoarthritis. So we're really excited about this filing.
And particularly because we're in time where non opioid solutions are very, very much needed for these patients. If you look at the market potential today, there are about 27,000,000 Americans that suffer from osteoarthritis, and 11,000,000 of those have moderate to severe OA. 80% of those 11,000,000 people have tried and failed 3 or more analgesics. So that tells us that there is just a huge amount of unmet need in this patient population. Patients are cycling through a number of pain medications.
And there just is an incredible need for new options. And this is where we think tanezumab can really fill an unmet need. It has the potential to become the 1st in class non opioid treatment for these patients. And we eagerly await the acceptance of this file from the FDA.
Thank you. Now let me address the question on Ibrance. The expected completion of the study slept a little bit a few weeks actually. It was at the end of 'nineteen, excuse me, at the end of 'twenty and now it's moved in the very beginning of 'twenty one. The only reason of this is that the events are not coming at the pace that we had forecasted and expected.
So in other means people are not progressing into their disease. I don't think we can draw any conclusions if that means good news or bad news. I think it's just facts of the data. We don't know if the people are not progressing equally in the two arms or if they're not progressing in the treatment arm. That remains to be seen when we unblind the data.
As regards to your question, if there was an interim analysis, there was not an interim analysis. So we haven't seen any interim analysis. There will be an interim analysis. But we do not expect that the most likely scenario is that the study will continue when this interim analysis comes. The study was designed to come to full completion.
And the criteria that we have set to stop for efficacy in the interim study are very, very high. So it's not impossible that this will happen. But most likely scenario, it is that as we had planned that the study will come to completion at the end of it, this is what will happen. We are very we still remain very, very encouraged and optimistic about hybrids. Of course, it's a Phase 3, you never know what will be.
But all the science behind it is supporting that
we could
have a positive outcome. And I will ask actually Michael to make a few comments on the science and what does this mean.
I'll just punctuate a few things that Albert described so well. First aspect of why we are very excited and optimistic about the science and clinical data to predict a potential positive outcome for the DISCUSS PALA study. As you know, first of all, that the CDK4six inhibitoribrands convert with estrogen receptor drugs to stop cancer cells or breast cancer cells to divide. We have shown that in the PALOMA 2 and 3 studies. And more recently, we reported that we could reproduce data direction in real world evidence based on real world data from Flatiron and other databases.
And this, noteworthy, including also overall survival data, again showing in medical practice the importance of this drug. 3, the pellet study that looked at the ability of palbociclibibrands to stop dividing of eosin receptor positive breast cancer showed that this mechanism was very well operating in a powerful way. And finally, let me remind you that other agents that act on estrogen receptor positive breast cancers and converge with the palbociclib, such as tamoxifen and aromatase inhibitors, all were initially developed in metastatic cancer, and did very well in adjuvant treatment in early breast cancer. So these four observations and others makes us continue to be excited and very optimistic. And as Albert alluded to, a relatively small change in projected trial is based on a trial that actually started 4 and a half years ago, and it is quite common that in the final 12 months or so, minor changes in enrollment rate and process planning for study reports can affect the trial.
But with all of this, you can hear we remain encouraged, enthusiastic about what Ibrance can offer for advanced treatment of breast cancer.
Right. Thanks for the helpful context, Michael. Next question please.
Your next question comes from Terence Flynn from Goldman Sachs.
Hi. Thanks for taking the questions. Maybe just 2 product ones for me. I was wondering if you can talk about Ibrance rest of world dynamics, any specific headwinds this quarter and how to think about the trajectory into this year? And then for Xeljanz, I was wondering if you can give us the split of sales by indication and if you're seeing any impact in RA from the launch of Thank you very, very much.
So, Angela?
Thank you very, very much. So, Angela?
Sure. So first of all, on Ibrance, we continue to see good growth and strong growth ex U. S, but probably 2 factors that are tempering the net sales as you saw in Q4. The first is pricing, and that continues to be something that we work hard at, especially in the EU, to gain access for our products in Europe. And the second is class growth.
So if you look at the class growth of the CDK class through the quarters, that has increased, but over the last quarter it has tempered. And it's sort of sitting at around a 35% CDK class growth right now class share. But within that, the Ibrance still has a very, very high product share in the 80s. So I think it's pointing out to us the fact that there's still opportunity for us to grow and that growing the CDK class is going to be an area of tremendous focus for us ex U. S.
In 2020 beyond. Your second question was around Xeljanz. And so on Xeljanz, again, we continue to see excellent growth in Xeljanz. In fact, despite the fact that you only see the sort of 1% net sales growth in Q4, I'll point out that globally full year we had 29% growth of Xeljanz, which is one of the highest of all of our core brands here at Pfizer in our entire portfolio. Q4, we saw 23% prescription growth.
And this prescription growth was driven by extremely strong performance in rheumatoid arthritis, which really was not impacted by the label changes. And we still continue to see strong growth in ulcerative colitis, even though here was the biggest label change. And so physicians did have to adjust the way that they were prescribing Xeljanz. But we expect this growth to continue because we have excellent momentum and confidence in prescribing from our physicians. We have significant unmet need.
And we have greatly improved access. And this access is, in fact, what drove the 1% net sales in Q4. There was a in Q4 of 2018, we saw an inventory build at the end of the year, which didn't happen in Q4 2019. So that was one of the reasons that affected our Q4 performance in 2019. And then also and more importantly, throughout the course of 2019, we gained significant access.
In fact, we added 59,000,000 incremental lives through contracting. And it's because of the timing of when these contracts were signed or renewed that drove the subsequent impact of rebates. And this sort of came to a head and sort of disproportionately affected us in Q4 of 2019. So I think stepping back, we're really pleased with the access that we do have in Xeljanz. And since it was launched 8 years ago, this is the most favorable access situation that we've ever had, which is very important when it comes to our ability to compete with RINVAC.
You asked a question around RINVAC just to sort of put into perspective. I think that we are excited about having another competitor help drive the growth of the JAK class in all of our indications. That being said, Xeljanz still enjoys a leading market share, especially in RA, where we have more than 15% of the market share of the entire class.
Great. Thank you very much, Angela. Next question, please.
Your next question comes from Umer Raffat from Evercore.
Hi. Thanks so much for taking my question. First, Albert, if I may, what are you hearing on a possible upcoming rule on IPI? There's a lot of press that companies have been notified by White House. I was curious what you know about it and is it something we should be very concerned about?
Michael, 2 quick ones, one quick one for you on the DMD gene therapy for a minute. You mentioned there's a proof of concept coming. My question is, have there been additional protocol driven pauses in enrollment? And I ask because recall when the first SAE on acute kidney injury happened, the trial was paused. And I'm curious, has anything like that happened again?
And then finally, Frank, maybe just quickly on SI and A line, I know it's a little higher than consensus, but technically year over year versus 4Q 2018, it wasn't that much higher, but I also realized 4Q 2018 had some consumer. Maybe you could just talk about your holiday party? Thank you very much.
All right. So let me start with the IPI. We have not received any notification on that. So there is no news from our side other than what we read on the newspaper. So, Mikael?
Yes. Just to remind you, we shared at the PBMD conference mid of last year update on 6 patients dosed with our DMD gene therapy that showed encouraging data on expression in muscle fibers amount of microdystrophin. And on some of the patients, we had also an opportunity to report encouraging trends on functional outcomes. We have dosed additional patients since then, and we continue to guard our experience on efficacy, safety and clinical management that are incorporated in the procedures how we manage these patients going forward. We plan to conclude Phase II this spring.
And based on current data and insights, we are planning to start Phase III, of course, pending regulatory dialogues later this year as indicated in Albert's opening remarks.
All right. Fran, maybe you want to tell us about the holiday party. I was not invited.
Sure. Yes,
I wasn't invited either. So maybe Uber was at
the party. Let me run the numbers and then I'll explain what happened. So for the quarter, SI and A all in was about $4,100,000,000 It was up about 4% operationally, dollars 100,000,000 give or take from the prior year quarter. What really drove that was increased investment behind some of our brands, some of our oncology products, some of our launch products like VINDQUIL and some increased investment in emerging markets. But it was really investment in terms of being supporting our brands.
You, Michael. And just to make a comment, we are very, very diligent in the way that we allocate capital. And we are when we have opportunities to put in promotional money so we can have a very strong start, we do it. And we take those money usually by being very diligent in the way that we control the indirect expense. I have been very clear, but direct with indirect is a very clear distinction in our mind.
So when it comes to things that they are overheads and things that they are not affecting directly, the business results, we are very, very tough. And when it comes to areas that the investments can affect business results,
we
are creative and generous. So that's what you saw here.
And these are clearly direct expense then.
And these are all direct expense. And the same by the way, Almodov, or you didn't ask, comes to R and D. Right now, we are increasing R and D investments, but we are increasing R and D investments only for programs, only for projects. We are not increasing infrastructure, we are not increasing research centers. At large, we maintain a very strong presence there and we keep that very strong.
But what is driving the increased R and D, it is more Phase III or Phase II studies. It's very clear. Right.
Thank you. Next question please, operator.
Your next question comes from David Risinger from Morgan Stanley.
Yes. Thanks very much. So I have three questions, please. First, Albert, could you discuss why Pfizer decided not to repurchase shares in 2020? And then maybe, Frank, you can comment about comment on how we should think about the EPS implications when we consider your guidance relative to consensus, which had assumed some share repurchase?
2nd, regarding the opportunity to rationalize the $4,500,000,000 in costs, could you just give us a sense for what percentage reduction is reasonable to assume a few years out? I was guessing maybe 20%, but I just don't know what's reasonable. And then 3rd, regarding the transfer of $600,000,000 in revenue to Upjohn, does that change the economics that Pfizer will receive as part of the exit to Mylan?
Yes. And I think basically all questions can be answered by Frank. I would just make some introductory comments. The reason why in our capital allocation, we are allocating right now money to increase the dividend and also to invest in our business or the OpEx to modernize our facility or the CapEx to modernize our facilities. The want to make sure that we maintain very strong firepower to invest in the business.
The past was a very different Pfizer. The past of the last decade had to deal with declining of revenues, constant declining of revenues. And we had to do what we had to do, even if that was finance and engineering with purchasing PACCAR sales. We couldn't invest them and create higher value. Now it's a very different situation.
We are a very different company. The company is going to have best in class top line growth revenue story, starting from now from the separation of Upjohn in the middle of the year from the expected separation of Upjohn in the middle of the year. And we do not need we can organically grow EPS. As you can see, all our projections from EPS this year are organically, no special repurchases. But we can use the capital to invest in good Phase II, Phase III assets that will build our pipeline.
So this is the strategy behind it. Now let me ask Frank to run the numbers.
So David, all I'll do is I don't want to duplicate anything Albert said, I'll just add a couple of things on the share repurchases. 1, we also announced the dividend increase in December. So obviously, we continue to deploy capital in the area of dividends, which we think is important to our investment thesis. And that's something obviously as we go forward, we'll continue to look at. And then obviously, our 2020 guidance assumes no repurchases.
So when you look at the improvement, which is material in terms of the midpoint versus what we did back in July, none of that is coming from share repurchases. Let me ask you other couple of questions. On the $600,000,000 transfer to Upjohn and does that change any of the economics? Let me give some context on this, which is one, nothing has been decided yet. We are still in negotiations with Mylan on those two businesses and whether or not they will transfer to VITRIS upon close.
If by the way, if we don't come to an agreement, those businesses would remain with new Pfizer. And so we're still in negotiations. And so in terms of the economics, I'd say more to come still to be determined and if and when we complete that obviously I'll be in a better position to answer that. On the $4,500,000,000 of indirect spend and directionally what do we think we can do there. I don't want to give a specific percentage because we're still working our way through the process.
But I think I alluded to this earlier, which is we've already made some nice headway. I think we can make additional headway. That additional headway would show up in SI and A. And obviously, our intent would be for that to show up in the IVT as a percentage of revenue line. So that's what we're working to do.
Our intent is to improve upon those numbers. And as we work our way through the process and as we have more to report, we'll make sure we do so.
Thank you, Frank. And also a comment on the reasons why we transfer those business to Upjohn. Both of those businesses, first of all, they fit more under Upjohn in terms of the dynamics that they have. So they can be managed much better. And secondly, I think they fit very nicely with Mylan because one, it is the EpiPen predominantly business that Mylan is that right now is shared between Mylan we are providing for them.
And the second, it is a partnership that we have with Mylan that was established years back and with generics in Japan. So both of them fit much better in Beatrice, and that's the reason why we separated. And also that will allow you to have in case that this happens a much more cleaner view of the growth trajectory of the company because now you know exactly what will be the P and L of the remaining company.
Okay. Thank you. Next question please, operator.
Your next question comes from Louise Chen from Cantor.
Hi, thanks for taking my questions here. So I had a few. My first question is, is the 6% or approximately 6% 5 year sales CAGR for standalone Pfizer, the new Pfizer still hold? 2nd question I had is how much of a priority is M and A for you under the new Pfizer And what kind of size of deals or types of deals are you most interested in? And last question I have is on the PCV data set that's coming through.
You and a competitor also have a whole set of PCV data. I'm just curious how you see that landscape evolving over time? Thank you.
Yes. Thank you very, very much, Luis. Let me start with a 6% CAGR. If it still holds, absolutely, it still holds. So it's actually as you can see, if anything else, this business what we are projecting 5 years, all the way to 25 actually, CAGR, of 6% this year performed at 8%, 9 percent for the quarter, and we are projecting 8% for 2020.
So definitely, we are on good, let's say, way to achieve that. As regards to the M and A, yes, the M and A is a very important part of our strategy. And as I just alluded before, this is why also we are not diluting our firepower with stock purchase right now because we do believe that we can create significant value with the right strategic moves. Now, we never say never to anything, but strategically we have made very clear that we are not interesting for a big M and A that will have cost synergies as value driver, because first of all, that will be lightly diluted in our top line growth. I don't think there are many companies that they can have this type of growth trajectory that we have the next few years.
Secondly, it could be distracting because having a big M and A means that the thousands of people will have to work on integrations rather than supporting all these products that we just saw that are growing 20s 30s and also all this pipeline that is coming up. So this we never say never, but this is not our strategy. Our strategy for M and A, it is to be able to have Phase II, Phase III programs ready, Phase II, Phase III, which could become potential medicines in the period 25, 26, 27, 28, so that we can augment our internal pipeline and be able that we maintain the 6% growth for the long term, actually for the very, very long term because it's right now 5 years, I would say, is a long term. And the other thing that I want to emphasize it is that the 6% CAGR, it is risk adjusted. I repeat, it is risk adjusted.
That means that in our projections, we are adjusting all the non read studies right now appropriately. Now if all the Phase III goes in the right way and they are all successful, it's not going to be 6%. It's going to be double digits, it will be 12%, 13%, 14%, 15%. Now if everything fails, also would not be 6%, it would be very low. But if statistics works and the studies, let's say, at 50% more or less are successful, that means that we will achieve 6%.
That's why I want to emphasize that there is no binary event in our projections. Binary event would be if the 6% was dependent or 2 or 3 major readouts that if they could go one way or another could affect. Right now they are dependent on 2015, 2016, 2017 blockbusters and then many others that they are much smaller.
So
then Frank, maybe something to add on that before I ask Michael to comment on PCV data.
And Louise, the only thing I wanted to add just to punctuate everything Albert said is, and why are we focusing on Phase 2b, Phase 3 is because the LOEs really start to kick in, in 2027. So if you think about we're in January of 2020, we literally have 8 years to work our way through this problem. And by the way, given that kind of a timeframe, given the breadth and strength of our pipeline, given our balance sheet, our capacity, obviously, we feel confident we will be able to solve it.
Yes.
Yes. I'm pleased that you asked about our Plooma next generation. So as you know, we have adult and pediatric studies ongoing. The adult study has been given breakthrough designation 28 September based on our encouraging Phase II data, And we expect very soon to report Phase III outcome of the adult PCV20 trial. And obviously, we are optimistic about that outcome based on the Phase II and the breakthrough designation.
On the pediatric, we have now accumulated further post 4th dose data of the PCV20 Phase II study. These data from the 4th dose further substantiate the positive data reported in the press release after the SAR dose, and we expect initiation of Phase III soon for the infant vaccine, pending discussions with regulators. The full data set will be presented at the major vaccine related conference likely mid of this year. Now Albert commented also in his introduction very nicely on the improved relative coverage of the PCV-twenty from us versus a potential competitor 15 valent. And he mentioned 33% better coverage for adults and 42% better coverage in the U.
S. For infants. Obviously, very important, significant better coverage. I just wanted to punctuate, when you look in the top European market, similar, the improved coverage in adults is actually 60% to 100%, in infants, 80% to 200%. This is all for invasive pneumococcal disease.
Also in U. S, we have analyzed for community acquired pneumonia where we see substantial better coverage for the 20 versus a potential 15 valent. So all in all, you can see we look forward to data sets advancing the program and think it would be the premier 20 valent and premier pneumococcal vaccine for
patients.
Your next question comes from Steve Scala from Cowen.
Thank you. I have a few questions. An increase in the dividend was mentioned twice, but it sounds as though Upjohn will be spun, not split, in which case the dividend will be reduced. So I'm wondering if you could clarify the dividend comment. And I assume the 2020 EPS guidance implies a spin, not a split.
Secondly, on the abrocitinib versus DUPIXENT study, given the fact that it is completed, Michael, I'm wondering if the data met the very positive portrayal you provided on the Q3 call, which included superior itch relief to Dupixent? And then lastly, will the proof of concept DMD data be presented at the March 30 one meeting? Thank you very much.
No, thank you very much Steve. Very good question. So Frank, why don't you clarify once more the dividend?
Sure. So Steve, in terms of the guidance, you're right, it assumes a spin, not a split. And then in terms of the dividend, you said I think you said in your question it would be a reduction. I don't see it that way. What we've said is the sum of Vietra's dividend and our dividend would equal the current dividend that a Pfizer shareholder receives today.
So I don't see a reduction in the dividend. The dividend income will be kept whole. And I think we've been very clear about that all along.
And we'll continue growing, maybe not at the same pace of what we do right now, it's $0.02 per quarter, but we'll continue growing.
Right. And Steve, I can quickly run the numbers for you, if you'd like. Just so you think, what Beatrice has said is their 1st full year of about $4,000,000,000 of free cash flow, they pay about 25% of that in the dividend. So that's 1,000,000,000 dollars Total Beatrice will have about 1,200,000,000 shares. You put the 1,000,000,000 over 1,200,000,000 shares, it's about $0.83 The exchange ratio is 0.12.
You put 100 shares of Pfizer, you get 12 shares of Viatris assuming a spend, that's roughly $10 a share. We would reduce our dividend on an annual basis by that $10 but the sum of our dividend plus that $10 Thank you. Would equal the what Pfizer's shareholder gets today. In my thing, it's $10 not $0.10.
Okay. Yes. Abrocitinib?
Yes. So thank you for your interest in abrocitinib. And we believe that it's going to be a new drug class for such a prevalent disease that affects tens of millions of Americans atopic dermatitis and where an oral alternative seems to be a real patient and physician preference. We will soon report out the data from the important COMPARE study. So I haven't actually seen the data, so I can only punctuate a little bit what we discussed at earlier investor meetings that the historical comparison between abrocitanib and Dupixent suggests that we should expect to see a similar or better impact on clearing skin.
And particularly, as Albert alluded to in his introduction, there is an important key secondary endpoint looking at itch relief, starting with a readout already of 2 weeks and then following the study through the 12 to 16 weeks. And historical data suggests that we should be very optimistic about abrocitinib outperforming biological such as DUPIXENT on the itch relief at earlier time points and provide a potential benefit of early onset of relief for disease. Now we have to wait for the data to be able to obviously be absolutely confident in that outcome, but this is what I believe and look forward very much to see the data come shortly.
On the DMD question?
Yes. We are finalizing, I think, the program for the R and D Day. So I can't be absolutely promise you, but I think it's likely that such an interesting program as the D and D gene therapy will be one of the potential agenda items. And obviously, we would like to then share updates from increased number of patients over a longer time period. So please welcome and take a front row seat.
Thank you very much to both. And by the way, Frank always as always was right. It's $10 for $0.20 for my life. All right. We'll move
on to our next question, please.
Your next question comes from Geoff Meacham from Bank of America.
Good morning, guys. Thanks so much for the question. Just have a couple. Michael, on the gene therapy platform with the advancement of hemophilia A and B as well as DMD into Phase III, what's the capacity to add additional indications to the portfolio? I mean, you guys have been successful partnering, but at this point, it does seem like you could expand the platform organically in a material way.
Then for Angelo on Xtandi, I just wanted to get your perspective on the inroads you've made in M0 prostate patients and you think it could represent a tipping point commercially, especially given generic ZYTIGA available in the U. S? Thank you.
Michael?
Yes. So, Jeff, we are a shaojo enthusiast for the gene therapy platform. And what is particularly, I think, a strategic advantage for us is the end to end capability from discovery, clinical, manufacturing. And of course, that capability is also linked to important external partners that gives us capacity to advance increasing number of internal as well as partner programs. And we have an option for the VIVET Wilson disease program that could in a relatively near term future be available for clinical studies.
And we expect from internal and external initiative to aspire to about bringing one new gene therapy into the clinic every year or so for the next period to come. And we think that should build up a very comprehensive gene therapy portfolio. The 3 programs you alluded to are, of course, the frontier for us with Factor IX that we hope to be the 1st company bringing that over the finish line in Phase III now and to start additional 2 Phase IIIs for EMEA where we think we have a best in class profile so far, and then we already spoke about D and D.
Thank you very much. Angela?
So in terms of the M0, the non metastatic CRPC, I mean, what we're seeing here is just tremendous growth and tremendous performance. Just broadly speaking, in terms of Xtandi, we had a great quarter, right? We grew 29%. And this was driven by 2 things. 1 was actually a demand across both metastatic as well as non metastatic, but also what we saw was the continued expansion of the actual class, the novel hormone therapies.
And in this class, Xtandi has the lion's share. We have about 35% share right now. So first of all, to answer your question visavis generic ZYTIGA, we really don't see a competition from a generic versus brand in this instance. I think the competition with ZYTIGA is really amongst generic ZYTIGA versus branded ZYTIGA, whereas what we're seeing here is a clear uptick in Xtandi and specifically from the PROSPER trial in this M0 population as you say. We are continuing to see as I've talked about in all the previous quarters really, really significant and very confident uptake in urology prescribing.
And we do believe that this is underpinning the growth. From a market share perspective, though the non metastatic, the M0 population has Xtandi, Erluda as well as Nubeqa. Xtandi by far and away has the leading market share in this segment and has been from the time that it was launched.
Great. Thank you, Angela. Next question please, operator.
Your next question comes from Tim Anderson from Wolfe Research.
Thank you. A couple of questions. One is on Prevnar in China. So sales have been ramping up there, but the regulatory authorities recently approved a domestically produced 13 valent product. And the CEO of that company suggests they have capacity that's in the tens of millions of doses and who knows if that's true or not.
But I'm wondering if you can give some perspective on how you see competitive dynamics in a situation like this going forward, not only in China, where a domestic producer could potentially benefit from favoritism, but also if that company were to take their product into other markets outside of China at a different price point. I think a lot of investors assume vaccines are durable forever, but I'm wondering if this sort of thing could be disruptive and how you take this sort of potential competition into your forecast? 2nd question is on M and A. So any M and A that you may engage with in 2020, should we assume at least during this 1st 6 month window while you still have up John that is probably put on hold? And then last question on VINYKEL, might there be a low hanging fruit phenomenon where we see initial nice uptake, but then it kind of flattens out suddenly?
Or do you expect this will be continued strong linear growth?
Thank you very much. I will give a quick answer to your M and A question, Tim, and then Angela can deal with Prevnar, China and David Aguel. On M and A, no, the answer is no, absolutely not. We are very actively looking on to invest capital on value creation opportunities. And then I assume that we will have several of them in the first half of twenty twenty before the close of the deal.
Again, across the lines that I have described, you know exactly what we are doing. We want to make sure that we sustain the growth beyond 2027 when the LOEs will have some impact. Angela, what about Prevents Heine?
Sure. So we acknowledge that there is a new competitor in the form of wallvax in PCV13. However, I want to recognize that there are some differences here. Though it is a 13 valent vaccine, the Wolvax vaccine is made with a different conjugate and this conjugate technology being an older technology, so quite different from what we see in PCB-thirteen. That being said, it is a competitor.
However, if you sort of step back and look at the opportunity that we have in pneumococcal vaccinations, there are approximately 14,000,000 new births every year in China. And today only over maybe 1% of those infants are being vaccinated. So regardless of the volumes that WALLVAX might have available, I think the opportunity between us is just much larger than that. And we have a tremendous amount of untapped potential in the marketplace. And we are confident that with the quality, the reliability as well as the tremendous experience that Pfizer has had globally with PCV13, but also the tremendous success that we've had in China specifically for PCV13 that our growth will continue and this is what we expect.
We have a very robust footprint. As you know, the vaccines and it will be the same for Vorvax's PCV13. This is an out of pocket market and it will be the same for the both of us. So this is where we'll be competing, which is why having a robust promotional engine and having a footprint of representatives that can really be available to support patients and caregivers at the point of vaccinations is really important. And I think in this regard, we have demonstrated great expertise and ability to grow this market.
So that's how we see it. We acknowledge the competition, but we continue to see tremendous potential.
What about Vindocal?
All right. So in terms of VINDAKAL, so yes, of course, in the year of launch, one might expect to see a little bit of a bolus, a number of patients who have been identified and are awaiting diagnosis and treatment. That being said, we are confident of what we what we're confident about what we've learned in the marketplace in our 1st year of launch. We are have mobilized We have mobilized education around using non invasive methods like scintigraphy to diagnose patients. And we've also mobilized a patient support hub to help patients receive their medications.
So I think doing more of that as well as continuing to think about new methods to help diagnose and treat patients such as using artificial intelligence and increased number of tools,
all of
that will continue to support our ability to drive the important and rapid diagnosis of patients as well as their treatment.
Great. Thank you. Next question, please.
Your next question comes from Andrew Baum from Citi.
Thank you. A couple of questions, please. Firstly, on your pending oncology biosimilars rollout in the U. S, given the challenges historically with biosimilar penetration, could you talk to your expectations, particularly with these 3 drugs? There should be an economic incentive for payers given the pass through, But yet there's issues in patients already on an established innovative biosimilar to switch an innovative brand to switch to biosimilar.
So if you could give some kind of sense as how much penetration and how quickly you may expect, that would be super helpful. And then second, in terms of the fan of this, Angela, you kind of gave some penetration figures at the beginning, which I was struggling to keep up with and write down. But just more broadly, could you outline how large you think the untapped patient population really is here? And how far Pfizer is along in establishing that market? Many thanks.
Angela, a lot of questions for you today. Please go ahead.
Okay. Sure. All right. So I think firstly, we see the dynamics in oncology biosimilars being very different from that of the what we saw in for inflammation in the form of Inflectra. So to your point about how will the dynamics change here and how quickly can payers as well as providers capture their savings, it's going to be much quicker.
This is the use of our oncology biosimilars are much more rapid, right? You see more patients cycling through. Treatment times are much shorter. So that's going to enable payers and providers to capture savings much more quickly, which is a very different dynamic that you see in Inflectra where it's a chronic treatment and patients are on their treatment for a very long time. So I think that's one big difference.
The second is that there is already a some we already have some precedents. We saw this with Reticrit, where after a year of being in the market, though I know it's a supportive care in oncology, we already have 20% market share. This is still far cry from what we see in Europe where there's much more rapid uptake, but I think that's it's a signal and an indicator of the differences you see in the various biosimilar markets. And we also have some early signals from competitor biosimilars that have already some good market share in this in oncology biosimilars. So I think that we have some good indicators that this is going to be different.
I think the benefit that we see here is that we have a portfolio of 3 oncology biosimilars a
robust
a robust pricing strategy, a discount to the WACC of the originator as well as I think strong relationships and networks built with both providers and payers that give us confidence that this will be an area of high growth for Pfizer.
Thank you, Angela.
And then your question was around tafamidis. Sorry, can you just repeat that again?
The untapped population.
The untapped population.
Doctor. So as we have said in previous calls, we do believe that this is a rare disease and that in the U. S, there will be about 100,000 patients in total, globally 500, but in the U. S, 100. To date, we have diagnosed 9,000 patients.
So that leads us to 9% of the population that we have diagnosed. So while this may feel like very significant progress from the time that we have launched, and it is, I think you can also see that we have a long, long way to go to finding all 1 in 100,000 of these patients. And what I spoke earlier about in terms of the education, in terms of how do you suspect the disease, how you diagnose the disease, and then very quickly gaining access so our patients can benefit from treatment of the disease. These are all three levers that we are intensely focused on.
Great. Thank you. Next question please.
Your next question comes from Navin Jacob from UBS.
Hello. Thanks for taking my questions. A couple, if I may. Just on biosimilars following up with Angela, your comment about strong growth continuing on for the biosimilars. So wondering if you could give any color around how we should think about the trajectory over the next couple of years.
Is this a doubling or tripling of that now almost $1,000,000,000 business? And then also would love to understand how you're thinking about the tail of each of the individual assets. Are you seeing should we be thinking of this as a ramp that goes up for a few years and then eventually starts tailing off like other generics? Or do you see this stabilizing and having a sustainable tail? And then just on VENDICOLE, you received positive CHP opinion in the EU in December.
Given that VENDYQUAL is already approved in the polyneuropathy indication. Wondering how we should be thinking about the price with the addition of the cardiomyopathy Is there any chance for moving that around? And then how we think about the ramp in the EU relative to the U. S? Thank you so much.
Sure.
So, Eva, I'll start with the last one first. So, you're right, we just received EU approval for VINDICAL. And as you know, there's quite a time lag between approval and then reimbursement in each of the countries. So all I can say is right now we are in active negotiations with the countries in terms of determining the price of VINYLAKAL as well as its reimbursement. You referred to the fact that we already have the 20 milligram approved for polyneuropathy in Europe and we recognize that.
That being said, we have first of all, ATTR Centimeters is a completely different indication. The trials that were conducted as well as the significant mortality benefits that were demonstrated in our clinical trials at ATTR Centimeters are completely different. And we have the clinical data to demonstrate the great patient benefit that we have in ATTR Centimeters. And so that's the basis of our discussions with each of the countries in Europe for reimbursement. Your second question was around Vindocal growth and sort of the pace of it.
I think the way to think about it is the following. We have through analogs seen that only 30% to 50% of all rare diseases are ever diagnosed. But of course, we believe that based on the mortality data that we have and the patient benefit that can be derived, that it is critical that we meet that or at least beat that. And so that's what we're intensely focused on. We have 10% of our patients or 9% in the U.
S. Are diagnosed today. We have a long way to go. And that's what we need to do. Your last question
What's the rhythm on the biosimilars? We've had strong growth 22% this year for the year. What can we expect going forward?
That's right. So I think in terms of the biosimilars, again, this is an area of growth that we can anticipate. We have 3 biosimilars now in oncology plus the 2 that we have in supportive care. And so we look forward to this being a significant growth contributor to oncology portfolio, not just from a growth percentage perspective, but also from a revenue base perspective.
Right. Yes, I just wanted to add that VINACQUEL cardiomyopathy has a positive EU recommendation. So we expect approval to come soon and that links very nicely to the really helpful outline you did, Yolanda.
Thanks, Michael.
And if we could take our last question please, operator.
Your final question comes from the line of Mani Farahar from SVB Leerink.
Hey, guys. Thanks for taking my question.
A couple of little ones on the rare disease side. In terms of tafamidis, we saw pretty attractive growth OUS, including some markets that don't necessarily have the cardiomyopathy indication yet.
Is there some follow on
benefit in polyneuropathy from the increased promotional efforts in cardiomyopathy in Europe and elsewhere? As a second question, given the expansion of patient opportunity into polyneuropathy in the U. S, how do you think about the opportunity to pursue a supplemental NDA or similar strategy in the U. S. Based on the real world evidence guidelines laid out previously by the FDA or would that require a separate study?
And then finally on the gene therapy side, obviously pretty interesting data in hemophilia at ASH moving forward into a couple of Phase IIIs now. How do you think about that market in a universe where you have multiple therapies within curative intent in gene therapy, alongside a number of fairly robust chronic therapies, who are the patients who should receive an irreversible intervention in terms of gene therapy? And who do you think deserve a more appropriate for chronic therapy such as your own benefits? Thank
you. Yes. I think I will ask Michael to start with gene therapy and the NASH and all of these great portfolio assets that we have and how they fit together. Michael?
Yes. Thank you very much. What I think is unique in our hemophilia portfolio, first, of course, we have a legacy being one of the pioneers for intravenous delivery of Factor VIII and Factor IX. So we have a platform and experience on the business and R and D side. And as you so nicely alluded to, we also shared with our partner, Sangamo, some very much best in class data recently on the Factor VIII gene therapy.
Our current portfolio has Factor VIII and Factor IX gene therapy plus our TFPI antibody that has, like HEMLIBRA, an subcu alternative, but actually TFPI can be applicable for both factor VIII and factor IX deficiency. So the way we see it develop is that, I think physicians will look at gene therapies that have durability and good tolerability. And that has really been the hallmark for the strategies when we developed factor VIII and factor IX best in class profile because there are alternatives for these patients. So once they see the data for drugs, treatments that are approved that have durability and really good outcomes, which I think has been so far what we have seen with our end therapies, those will be the one that can be adopted because there are alternatives that have less convenience, but will, at least until strong data is available, be used. For patients that are early in their disease diagnosed at earlier age, I think this would be a very important treatment as it saves them from the bleedings, breakthrough bleedings that occur on lifelong treatment with infuse defense factor.
And particularly for patients that are at early age that are very physically active, it is important to have a solution for sure. So I think this will be a tremendous important patient populations, but the availability of subcutaneous agents will supplement them and also allow for patients that may have antibodies to gene therapies to use them until sufficient number of gene therapies available that there is always one for each patient. And finally, just bringing together, I think unique with us is the entire portfolio that can address these patients, and we look really much forward to there around 2021 'twenty two when we see this portfolio coming into registration phase. I think that was the main piece here.
Yes. And then, Angela, maybe on Vindrakerl, we have seen some uptick in markets that cardiomyopathy was not approved. What's going on there? And about supplement and filing on polyneuropathy?
Yes. In terms of polyneuropathy in the U. S, this is something that we're continuing to explore with the FDA.
So No decisions have been made yet, but we're in discussions.
That's right. Exactly. And then in terms of the upticks in polyneuropathy, I mean, I'm not sure that it's a cardiomyopathy effect. As you know, we are approved. It's an approved indication for us ex U.
S. So we continue to actively promote it. And it's probably as a result of those activities.
Yes. We will have, as we said, approval for VARTA indication. And this is when I will think we will see material impact on VINTRACEL in cardiomyopathy in these patients. We are not right now. We are just promoting, of course, the indications that we have registered over there.
So we don't do anything outside that. All right. I think this concludes more or less our call. Just I wanted to make some comments because really I feel that we are at an exciting point in Pfizer's history. And if you take a big picture view, over the last decade, we have changed and refocused our approach to R and D.
We have improved dramatically its productivity. And we have developed the best pipeline we ever had and one of the best, I believe, in the industry. If you've seen 2019, it was a year that we took deliberate and thoughtful steps to strengthen each one of our businesses and eventually shred the current Pfizer into a new smaller high growth profile enterprise that will remain powerhouse in marketing, but also has been converted to the powerhouse of science. Following the expected close of the ABZON and Mylan transaction latest this year, of course, we will be a very different company. And we will focus on continuing to execute our strategy.
This includes we will continue the commercial momentum and preparing our new product launches. You have all asked a lot of questions about those products that they keep surprising with their growth profile. And also you've seen that we are taking seriously and we are investing in new launches. We are continue advancing our internal pipeline and will augment it with mid stage R and D programs through targeted bolt on business development opportunities. As I referenced before, we should continue seeing this type of activities in the first and second half of this year.
Of course, we are working very intensively to set up Abzom to be in a strong position when it combines with Mylan to become Beatrice and create a formidable company. And of course, we will continue leading the conversation in Washington as we work to address the affordability challenge facing patients. These are the areas that we are focusing for next year. Once again, we look forward to sharing more pipeline updates during our Investor Day on March 31. Have a great rest of your day.
Ladies and gentlemen, this does conclude Pfizer's 4th quarter 2019 earnings conference call. Thank you for your participation. You may now disconnect.