PFEPfizer

We note your statement on page 7 that "the Company reserves the right to exclude from participation in the Modification Offer, any colleague residing, working and/or subject to the laws of any jurisdiction in which participation in the Modification Offer is not permitted or practicable under the laws of such jurisdiction." While you need not disseminate offer materials in jurisdictions where you may not legally do

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so, you must accept elections to participate from all eligible holders who elect to participate in the Modification Offer. See Rule 13e-4(f)(8)(i) and guidance in Section II.G.1 of Exchange Act Release No. 34-58597 (September 19, 2008). Please revise accordingly. Eligible Participants; Eligible PSAs or Eligible TSRUs; the Proposed Modification; Expiration and Extension of the Offer., page 17 We note that Eligible Participants include only individuals who "have been actively employed since no later than July 24, 2024," which appears to be inconsistent with the 2. requirement of Exchange Act Rule 13e-4(f)(8)(i). Note that if the Modification Offer is made in reliance on the Commission’s March 21, 2001 Global Exemptive Order, the relief from the all-holders requirement provided in the Global Exemptive Order is intended to permit exclusion only for a compensatory purpose. In your response, please describe the compensatory purpose of excluding employees who were not actively employed on or before July 24, 2024, from the Modification Offer or provide your legal analysis explaining why the Modification Offer is consistent with the requirement of Exchange Act Rule 13e-4(f)(8)(i). Alternatively, revise the Modification Offer to comply with Exchange Act Rule 13e-4(f)(8)(i).

Pfizer respectfully acknowledges the Staff’s comment and has revised the disclosure on page 7 of the Summary Term Sheet accordingly. Read in the reply ↗

We note your tabular reconciliations included here appear to essentially represent full non- GAAP statements of operations. Please explain why you believe your disclosures comply with Question 102.10 of the Compliance and Disclosure Interpretations on Non- GAAP Financial Measures, or revise your disclosures in future filings.

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The same comment also applies to your quarterly reporting under Form 10-Q and your earnings release under Form 8-K.

In response to the Staff’s comment, we respectfully provide the following information:

We have been presenting our reconciliation of GAAP Reported to Non-GAAP Adjusted Information consistent with Exhibit A to our letter dated July 11, 2012 to the Staff in response to written comments from the Staff, dated June 22, 2012, with respect to Pfizer’s Annual Report on Form 10-K filed with the Commission on February 28, 2012 for the fiscal year ended December 31, 2011 and Pfizer's Current Report on Form 8-K dated May 1, 2012.

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As a result of the Comment Letter, we are proposing to replace our current form of reconciliation as reflected on pages 40 and 41 of the Form 10-K with the reconciliation set forth in the attached Exhibit A in our future earnings releases, Form 10-Ks and Form 10-Qs. In addition, we will remove the Details of Income Statement Items Included in GAAP Reported but Excluded from Non-GAAP Adjusted Income table as reflected on pages 42 and 43 of the Form 10-K (as well as any references to the table on the preceding page) from all future Form 10-Ks and Form 10-Qs.

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Here you include in note I adjustments to exclude the upfront and milestone payments made for collaboration agreements from Research and developments expense and net income attributable to Pfizer Inc. common shareholders.

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Please explain how you believe this presentation is consistent with the guidance in Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations, or revise your disclosures in future filings. Please also expand, in future filings, to provide sufficient detail of each significant adjustment, to allow a reader to understand the nature of the reconciling items and your reasons for their adjustment, in accordance with the guidance in Item 10(e) of Regulation S-K and the Non- GAAP Financial Measures Compliance and Disclosure Interpretations. The same comments also apply to your quarterly reporting under Form 10-Q and your earnings release under Form 8-K.

Pfizer acknowledges the Staff's comment and respectfully advises the Staff that it has reviewed the guidance in Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. Pfizer does not believe the adjustments reflect normal revenues and expenses, as applicable, of its business or that such adjustments cause the presentation of its non-GAAP amounts to be misleading.

Pfizer's policy is to present certain non-GAAP amounts in the presentation of our external financial results, including Adjusted Income, as an alternative measure of performance.

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We disclose these non-GAAP amounts because they serve as one type of performance measure that is utilized by management to evaluate our overall performance. Because Adjusted Income is an important internal metric for Pfizer, we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. We report Adjusted Income, certain components of Adjusted Income, and Adjusted diluted earnings per share in order to portray the results of our operations prior to considering certain income statement elements.

As a part of our presentation of Adjusted Income, Pfizer excludes, among other items, certain research and development expenses generated from upfront payments and milestones paid under collaborations and licensing arrangements. Under our policy, we only exclude research and development expense from upfront payments and milestones that exceed a quantitative threshold, as these amounts represent the most infrequent and unpredictable collaborations and licensing arrangements. While these expenses might be viewed as recurring, we do not believe they meet the definition of ‘normal’ operating expense, as we do not consider them to be typical, usual or ordinary. We believe that reflecting these adjustments enables us to present the most useful information to the users of our financial statements about our core and normal, recurring operating research and development expenses, and allows for a more meaningful assessment and direct comparison of normal, recurring research and development expenditures by Pfizer each year. We also believe that these GAAP to non-GAAP adjustments consider CD&I Question 100.01 and are specifically appropriate in consideration of our particular facts and circumstances. We offer the following for your consideration:

•Normal, recurring research and development activities are inherently different than research and development expense recorded for upfront payments and milestones paid in connection with a collaboration or licensing arrangement. We record research and development expenses for the normal, recurring operating expenses we incur in the ordinary course of business. These expenses include the costs of proprietary research and development efforts performed by Pfizer, as well as recurring operational research and development costs incurred in connection with third-party collaboration arrangements, when required. These expenses primarily include personnel costs, the cost of materials, equipment and facilities, and third party service provider costs, such as contract research organizations that provide clinical trial services and support. These normal, recurring types of research and development expenses are within our control and predictable. As a result, we include these types of research and development expenses within our operating budgets/forecasts and published financial guidance, and utilize them to evaluate the performance of our research and development organization.

We also record research and development expenses for upfront payments and pre-approval milestone payments made to our collaboration partners in development stage collaborations. Upfront payments and milestones associated with collaborations and licenses are fundamentally different than the normal, recurring operational research and development expenses described above. We believe these upfront payments and promises of future milestones represent a transfer of value to acquire certain rights and share future risks with our partner. The terms of each collaboration and licensing arrangement are separately negotiated and often represent an estimate of the fair value to acquire the scientific knowledge and legal rights associated with the product in development at the time of the agreement. We do not believe an upfront payment or milestone represents an amount paid to a collaboration partner for an estimate of research and development costs already incurred, or an estimate of an amount that would have been incurred by Pfizer. For accounting purposes, these payments are expensed as research and development expense because the underlying product in development has not yet received regulatory approval, and thus, these payments cannot meet the definition of an asset in that future economic benefit is not considered ‘probable’. However, we do not believe the accounting classification as research and development expense makes them a substitute for normal, recurring research and development. Given the competitive bidding environment for collaboration and licensing arrangements, we do not believe that it would be a viable strategy for a pharmaceutical company to ‘outsource’ research and development to collaboration and licensing partners while ceasing proprietary, recurring research and development efforts.

•Business development activities are an enabler of our strategies, however, collaboration and licensing arrangements that involve significant upfront and milestone payments are infrequent and not considered a “normal” operating expense or a part of our core strategy. At Pfizer, our strategic purpose is to discover breakthroughs that change patients’ lives and our research and development operations are essential to delivering on that purpose. We strategically capitalize on growth opportunities by advancing our own product pipeline and maximizing the value of our existing products. In addition, business development activities, like collaborative and licensing arrangements, are also strategic, so when opportunities present themselves, we enter into these agreements to enhance our development and commercialization capabilities. The relevant terms of specific business development activities, including the significance, timing, frequency and predictability of upfront payments and milestones, can significantly vary from agreement to agreement. We consider all of these factors when determining the metrics by which to evaluate our operating performance.

For collaboration and licensing arrangements, we have established a policy, considering both quantitative and qualitative factors, to exclude from Adjusted income research and development expense from upfront and milestone payments that exceeds a quantitative threshold, as these represent the most infrequent and unpredictable collaborations and licensing arrangements. In establishing this policy, we considered that most of our collaboration and licensing arrangements involve smaller upfront and milestone payments. Given the size and frequency of these types of payments, our research and development operations include an estimate of any upfront or milestone payments of this nature within their operating budget, and thus, they can be considered in the evaluation of their performance. Accordingly, we do not exclude research and development expense for these payments from Adjusted Income.

We enter collaboration and licensing arrangements with upfront and milestone payments that exceed our threshold much more infrequently. We have only entered into four such agreements during fiscal 2020, and one to-date in fiscal 2021. We do not consider upfront and milestone payments of this size to be a core strategy. We also do not believe upfront and milestone payments above our threshold meet the definition of a ‘normal’ operating expense, as they are not typical, usual or ordinary for Pfizer. Due to their unpredictable nature, we do not include an estimate of upfront payments and milestones within our internal operating budgets nor our financial guidance provided to investors, and we believe that the exclusion of these amounts from Adjusted Income allows us to more clearly present and evaluate the performance of our research and development organization based upon its normal, recurring operating activities.

•Many of the users of our financial statements, including investors, need to be able to differentiate between normal, recurring research and development and any significant, infrequent upfront payments and milestones in order to properly understand and evaluate our performance. Each year, Pfizer provides forward-looking financial guidance based on normal operating activities and known events. This guidance receives a significant amount of investor scrutiny and focus and sets the baseline for investor expectations for the reporting period. In the pharmaceutical industry, particular interest is given to the level of normal, recurring research and development expense forecasted during each period, which allows investors to understand operating trends and evaluate a company’s research and development productivity. If we enter a collaboration or license agreement during a reporting period that involves an upfront payment or milestone above our quantitative threshold, we believe it is helpful and important for investors to understand what our recurring results would have been without the new agreement so that they can assess our operating performance relative to the original financial guidance. Additionally, we believe that our presentation allows investors to better assess trends and evaluate the productivity of our research and development organization. The presentation of this information also provides investors with good analytical information to allow them to better understand our total reported results of operations as well as our performance relative to the financial guidance we provide at the beginning of the year, in which we state these types of potential upfront and milestone charges are excluded from our guidance. In the event we are required to include these significant upfront and milestone payments in our Non-GAAP measure, since we do not have the ability to forecast significant payments from existing and future collaboration and license arrangements, providing guidance would be difficult, leading to confusion and queries from investors.

•Our policy to exclude research and development expense generated from significant upfront payments and milestones paid under collaboration and licensing arrangements allows for the clearest comparison between our financial results and those of our peer companies reporting under IFRS. For pharmaceutical companies reporting under IFRS, it is our understanding that the applicable accounting guidance requires capitalization of upfront payments and milestones paid to third parties in collaboration and licensing arrangements, even when the product in development has not received regulatory approval. When the underlying product receives regulatory approval, the capitalized upfront payments and milestones are amortized and excluded from the calculation of many of their non-GAAP equivalent metrics. By excluding research and development expense recorded for upfront payments and milestones above our threshold paid in connection with a collaboration or licensing arrangements, we are presenting similar financial information so that users of our financial statements can compare our financial results with those of our peer companies reporting under IFRS.

Additionally, please refer to the attached Exhibit A for our proposed revised reconciliation, which we believe provides sufficient detail of each significant adjustment and the reasons for their adjustment.

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