(PF-04971729) Inotuzumab ozogamicin

PF-06836922

PF-06438179(a) PF-05280014(b) PF-05280586(c) Tanezumab(d)

NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT INDICATION

A monoclonal antibody that inhibits PCSK9 for the treatment of hyperlipidemia and prevention of cardiovascular events

An oral SGLT2 inhibitor for the treatment of type 2 diabetes, which is being developed in collaboration with Merck & Co., Inc.

An antibody drug conjugate, consisting of an anti-CD22 monotherapy antibody linked to a cytotoxic agent, calicheamycin, for the treatment of acute lymphoblastic leukemia

A long-acting hGH-CTP for the treatment of growth hormone deficiency (GHD) in adults, which is being developed in collaboration with OPKO Health, Inc.

A potential biosimilar to Remicade® (infliximab)

A potential biosimilar to Herceptin® (trastuzumab)

A potential biosimilar to Rituxan® (rituximab)

An anti-nerve growth factor monoclonal antibody for the treatment of pain (on partial clinical hold)

       Dacomitinib A pan-HER tyrosine kinase inhibitor for the first-line treatment of patients with advanced non-small cell lung cancer with EGFR activating mutations, which is being developed in collaboration with SFJ

Pharmaceuticals Group

        Trumenba (MnB rLP2086) A prophylactic vaccine for active immunization to prevent invasive disease caused by Neisseria (PF-05212366) meningitidis serogroup B in individuals 10 through 25 years of age (ex-U.S.)

                     (a) Remicade® is a registered trademark of Janssen Biotech, Inc. (b) Herceptin® is a registered trademark of Genentech, Inc.

(c) Rituxan® is a registered trademark of Biogen Idec, Inc.

(d) The tanezumab program is under a partial clinical hold by the FDA pending review of additional nonclinical data. Subject to the removal of the partial clinical hold, we are planning to continue development of tanezumab in 2015 for the treatment of osteoarthritis, chronic low back pain and cancer pain. In October 2013, we entered into a collaboration agreement with Eli Lilly and Company to jointly develop and globally commercialize tanezumab for those indications.

Additional product-related programs are in various stages of discovery and development. Also, see the discussion in the “Our Business Development Initiatives” section of this Financial Review.

 COSTS AND EXPENSES Cost of Sales

        Cost of sales increased as a percentage of revenues in 2014, compared to the same period in 2013. These increases are primarily due to the impact of losses of exclusivity and unfavorable changes in product mix, resulting from, among other things, the loss of Enbrel alliance revenue after October 31, 2013, when the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired, and the loss of Spiriva alliance revenue in the U.S. as of April 29, 2014. Cost of sales in 2014 were relatively flat compared to 2013 as the unfavorable impact due to the changes in product mix discussed above was largely offset by favorable foreign exchange of 3%.

2013 v. 2012

Cost of sales decreased 2% in 2013, compared to 2012, primarily due to the favorable impact of foreign exchange of 4%, which more than