A Letter from Pfizer’s Executive Chairman and Chief Executive Officer

Dear Shareholders:

We are pleased to report that 2018 was another strong year for Pfizer. We significantly advanced our pipeline, delivered solid financial results, enhanced shareholder value, and took important steps to position the company for what we expect to be an era of sustained top- and bottom-line growth beginning in 2021 following the impact of Lyrica’s upcoming patent expiration in the U.S.

We believe that Pfizer now has the best research and development (R&D) pipeline in its history, and we’re extremely pleased that during 2018, we received a wave of new regulatory approvals – including four targeted cancer agents over the last four months of the year. In total, we received seven key approvals in 2018, spanning new molecular entities and new indications, which will allow us to serve a broader patient population. In addition, we filed nine regulatory submissions and advanced 42 programs, including six Phase 3 clinical trial starts.

In 2018, revenues increased 2 percent as several of our biggest-selling medicines and vaccines continued to grow, including Ibrance, Eliquis, Xeljanz, and Prevnar 13/Prevenar 13. We also generated growth in emerging markets and in biosimilars. The growth that we achieved in these areas helped to absorb $1.7 billion in lost revenue because of products that recently lost marketing exclusivity.

We achieved these results while simultaneously investing $8 billion in R&D and returning $20.2 billion directly to shareholders through a combination of dividends and share repurchases in 2018. In addition, Pfizer’s share price increased by approximately 21 percent during 2018, outperforming both the NYSE Arca Pharmaceutical Index (DRG) and the S&P 500.

After prolonged periods of revenue decline due to significant loss of exclusivity (LOE) impacts – and then stability as we began to launch new products – we believe three intersecting factors will create significant opportunities for Pfizer to grow in the years ahead:

• Macro trends such as an aging population and a rising middle class in emerging markets will result in an increased number of people seeking access to both innovative and established medicines;
• We see the potential to launch up to 3-5 new products or product line extensions per year over the next five years; and
• We expect to enjoy the benefits of a dramatic abatement in LOEs until the second half of the next decade, after Lyrica loses its marketing exclusivity in 2019.

In 2018, we took several actions to prepare Pfizer to capitalize on these opportunities.

In July, we announced that we were reorganizing the company into three businesses to better capitalize on the evolving and unique dynamics of their individual markets. The three businesses, which became effective at the beginning of the company’s 2019 fiscal year, are Pfizer Biopharmaceuticals Group, a science-based Innovative Medicines business that includes our legacy Innovative Health business units (except our Consumer Healthcare business), as well as biosimilars and a new Hospital business unit that commercializes our global portfolio of anti-infective and sterile injectable medicines; Upjohn, an off-patent branded and generic established medicines business headquartered in China that is bringing 20 of our most iconic brands to more than 100 markets around the world; and a Consumer Healthcare business aligned with the growing trend of consumers taking their health into their own hands. To allow Pfizer to sharpen its focus on its pharmaceuticals business, in December 2018, we signed an agreement with GlaxoSmithKline plc (GSK) to form a new Consumer Healthcare joint venture. We expect the transaction to close in the second half of 2019, subject to customary closing conditions, including GSK shareholder approval, and required regulatory approvals.

As we reorganized our businesses, we also simplified our structure, processes and governance, including initiating a major digital effort to automate and improve operational effectiveness. These efforts also are freeing up capital that can be reinvested – primarily in scientific and commercial innovation, but also in other key growth drivers, including business development and manufacturing.

We firmly believe that the biopharmaceutical companies that create meaningful value for patients over the next decade are the ones that will thrive. That’s why we are putting a renewed emphasis on Pfizer’s purpose: Breakthroughs that change patients’ lives. Our purpose defines who we are as a company and serves as a focal point of our culture, driving everything we do and energizing our more than 90,000 colleagues.

When we talk about breakthroughs, we are not talking about just big scientific breakthroughs, but also breakthroughs in the way we work, the way we interact with payers and policymakers, and the way we provide access to patients. Taken together, we believe these breakthroughs will create value for patients, colleagues and shareholders.

On behalf of everyone at Pfizer and our Board, we thank you, our shareholders, for your continued support for the work we do every day. We encourage you to review this Proxy Statement and vote your shares.

Sincerely,

We encourage you to read our 2018 Financial Report, which includes our consolidated financial statements as of and for the year ended December 31, 2018. Please also refer to our Annual Report on Form 10-K for the year ended December 31, 2018, including the sections captioned “Risk Factors” and “Forward-Looking Information and Factors that May Affect Future Results,” for a description of the substantial risks and uncertainties related to the forward-looking statements included herein.