TUTTI I MIGLIOR PRODOTTI PER IL BENESSERE

Amgen Inc (NASDAQ:AMGN)
Q4 2019 Earnings Call
Jan 30, 2020, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

My name is Ian and I will be you conference facilitator today for Amgen’s Fourth Quarter 2019 Financial Results Conference Call. (Operator Instructions)

I would now like introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Arvind Sood — Vice President of Investor Relations

Okay. Thank you, Ian. Good afternoon, everybody. Thanks for joining us today. So, 2019 was the year that we made significant progress on our strategy and took steps that position us well for what will surely be a special year in 2020 as we celebrate our 40th anniversary. What better gift to celebrate this important milestone than to get back to revenue growth.

So, our Chairman and CEO, Bob Bradway, will lead the discussion today. We are also joined today by our new CFO, Peter Griffith, who will provide a financial update on our results for Q4 and full-year 2019 and provide guidance for 2020. Our Head of Global Commercial Operations, Murdo Gordon, will then review our product performance, followed by our Head of R&D, Dave Reese, who will provide a pipeline update. We will use slides to guide our discussion today, and you should have received the link separately.

We’ll also use non-GAAP financial measures in today’s presentation, and some of the statements will be forward-looking statements. Our 10-K and subsequent filings identify factors that could cause our results, actual results to differ materially.

So with that, I would like to turn the call over to Bob. Bob?

Robert A. Bradway — Chairman and Chief Executive Officer

Okay. Thank you, Arvind, and good afternoon, everyone, and thank you for joining our call. Heading into 2020, we feel ready for the challenges of a new year and we’re feeling encouraged by the progress we made in 2019. Once again, this past year, we met and exceeded our financial targets. We advanced key elements of our long-term growth strategy and we served more patients around the world with our growing portfolio of medicines.

2019 was the transition year, we had long been preparing for, as many of our off-patent legacy products faced new competition. I believe we managed this transition well, as evidenced by the fact that we delivered earnings growth in 2019 and will return to top line growth in 2020.

In 2019, drug prices in the US actually fell overall for the first time since 1974. In anticipation of this challenge, we repositioned the Company’s expense base and embedded productivity initiatives over the past several years that are serving us well. In addition, we reshaped our product portfolio committing to medicines that can deliver growth for us primarily through volume increases rather than price increases. Products like Repatha, Aimovig, Prolia, EVENITY, and most recently Otezla.

In 2019, we delivered 3% volume growth globally and 19% volume growth outside the United States. We’re seeing especially strong performance in our Asia-Pacific region, albeit from a small base. Over the next decade, we expect this region to account for as much as 25% of Amgen’s growth. For the full-year in 2019, volume in the region grew 62%. Over two-thirds of that growth came from our joint venture with Astellas in Japan, the world’s third-largest pharmaceutical market. Just a reminder that this collaboration reverts fully to Amgen on April 1st, enabling us to do business in Japan through a wholly owned subsidiary for the first time.

Our strategic collaboration in China with BeiGene closed a few weeks ago and we’re excited by what our two companies can achieve together in the world’s second largest pharmaceutical market.

2019 was also a watershed year for us, for our biosimilars business. We’ve delivered our first several biosimilars to market on time and on budget and we believe we are in the early innings of what can be an important growth opportunity for us over time. Through the end of Q4, the business was already annualizing at over $1 billion and we will add to our portfolio later this year with the launch of AVSOLA, our biosimilar to Remicade. We also expect that AMGEVITA, our biosimilar to Humira in Europe and other parts of the world will benefit from our recent acquisition of Otezla.

A key pillar of our growth strategy continues to be bringing to market first-in-class or best-in-class medicines that deliver a large effect size for patients suffering from serious illnesses. The world is growing older, wealthier, and more urban, and these mega trends mean that the world will need more biopharmaceutical innovation, not less. We intend to be a leader in delivering that innovation.

We expect several important data readouts from our pipeline in 2020. We expect data for AMG 510 or KRAS G12C inhibitor, for tezepelumab in allergic and non-allergic asthma, for omecamtiv and heart failure, and look for Otezla in mild-to-moderate psoriasis. In addition, we’d expect to generate some important data across our BiTE portfolio in 2020 as well and Dave Reese will provide details on all of this shortly.

Last year, we also expanded our commitment to discovery research, strengthening our world-leading human genetics capabilities through a number of collaborations while adding large scale proteomic data as well. We remain excited about how our approach is enabling us to identify and pursue new targets and the patients who stand to benefit most from them.

Everything we see in our Company and across the industry continues to make us feel that we’re living in an incredible age of biotechnology innovation. Across diseases, we’re seeing more and more reason to be optimistic about the next breakthrough for patients. At the same time, we know that governments and individuals are struggling with how to pay for these breakthroughs. We accept responsibility to be part of the solution, both in advancing innovation that really matters and in providing innovative ways for patients to get access to it.

In an election year, there is bound to be much discussion about healthcare and we look forward to engaging with other stakeholders to promote market-based solutions that promotes innovative medicines and affordable access to them.

Just as we recognize that we need to be a constructive stakeholder to help sustain the robust ecosystem that exists for biotechnology innovation in the US, so too do we recognize and accept the need to be part of the process of addressing other environmental, social, and governance matters that are of concern in our communities today. To that end, several years ago, we set targets for reducing our carbon emissions and water consumption by the year 2020. Having hit those targets in 2019, a year earlier than planned, we are now developing a next set of goals that we will share later this year. These goals will include a further commitment to our next-generation manufacturing technologies, which have a much smaller environmental footprint than traditional biologics manufacturing and enable us to operate at a lower cost, too.

Now, let me turn over the call to our new CFO, Peter Griffith. You’ll recall that Peter joined us in October, and he’ll take you through the details of our performance in 2019 and our outlook for 2020. Peter, over to you.

Peter Griffith — Executive Vice President and Chief Financial Officer

Thanks, Bob. Let me begin by saying how happy I am to join Amgen at such an exciting time in the Company’s 40-year history. I also want to take a moment to thank David Meline, the Amgen team, as well as many of you on the call who have helped me transition into the role. Over the last several months, I’ve enjoyed meeting many of our investors, as well as members of the analyst community, and I look forward to the continued dialogue and engagement.

Now, let’s turn to the fourth quarter financial results on Page six of the slide deck. Revenues at $6.2 billion decreased 1% year-over-year in the fourth quarter. In the quarter, we saw worldwide product sales declined 2% to $5.9 billion as our portfolio transitioned with declines in our mature products, substantially offset by our growth and launch products. We are particularly encouraged by the strong 21% volume-driven growth from our ex-US markets, which gives us confidence as we continue our global expansion including into China, which will also benefit from our collaboration with BeiGene, which closed earlier this month.

Foreign exchange had a 1% negative impact to fourth quarter worldwide sales on a year-over-year basis.

Other revenues at $316 million were up $87 million versus Q4 2018.

Our Q4 non-GAAP operating income at $2.6 billion decreased 4% from prior year. Non-GAAP operating margin was 44.6% for the quarter, compared to 45.3% in Q4 of 2018. As previously indicated, our operating expenses reflected the typical underlining — underlying fourth quarter pattern, increased investment in our rapidly evolving oncology pipeline portfolio and additional operating expenses associated with the Otezla acquisition, which closed in Q4. These increases were partially offset by continued favorable expense impacts from our productivity initiatives across all operating expense categories.

Other income and expenses were a net $65 million expense in Q4, representing $132 million of year-over-year favorability. This favorability was driven by gains generated from liquidating bond investments to fund the Otezla and BeiGene transaction and favorable market value fluctuations of publicly traded securities held in our Ventures portfolio, partially offset by lower interest income due to reduced cash balances.

The non-GAAP tax rate was 14.9% for the quarter, a 1.6 point increase versus Q4 2018, primarily due to a one-time prior-year tax benefit associated with intercompany sales under US Corporate Tax Reform.

Non-GAAP net income was $2.2 billion and non-GAAP earnings per share increased 6% year-over-year for the fourth quarter, supported by a 7% reduction in share count versus Q4 2018.

Next, I will review our 2019, full-year results on Page seven of the presentation. Our 2019, full-year revenues decreased 2% to $23.4 billion, while our non-GAAP earnings per share grew 3% to $14.82 per share. For the full-year, we saw a 1% decline in worldwide product sales to $22.2 billion. Volume growth in markets outside the US was 19% year-over-year. Other revenues at $1.2 billion were down $56 million year-over-year.

For the full-year, non-GAAP operating income at $11.2 billion decreased 6% from the prior year, and our non-GAAP operating margin was 50.2% for the year, down from 52.6% in 2018. In total, non-GAAP operating expenses increased 3% year-over-year to $12.2 billion. This growth was driven by research and development investments, launch product support, and the addition of Otezla to our business, partially offset by our productivity program.

Other income and expenses were favorable by $250 million on a year-over-year basis due primarily to gains in 2019 from liquidating bonds to fund the Otezla and BeiGene transactions, partially offset by lower interest income resulting from reduced cash balances.

The non-GAAP tax rate was 15% for the full-year, up 1.5 points versus 2018. Again, primarily due to a one-time prior-year tax benefit associated with intercompany sales under US Corporate Tax Reform.

Turning next to cash flow in the balance sheet on Page eight. For the full-year 2019, Amgen continued to generate strong cash flow, reflecting a diversified portfolio of products coupled with an industry-leading cost structure. Free cash flow was $8.5 billion in 2019 versus $10.6 billion in 2018. The decline driven by lower net income, timing of working capital, and an advance tax deposit.

In 2019, we returned a total of $11.1 billion to shareholders through dividend payments totaling $3.5 billion and $7.6 billion used to repurchase 40.2 million shares at an average of $190 per share. And this follows the $21.4 billion return of capital to shareholders in 2018.

Cash and investments totaled $8.9 billion at the end of 2019, a decrease of $20.4 billion from the end of 2018. This decrease was primarily driven by the Otezla transaction, cash return to shareholders in the form of dividends and share repurchases, as well as debt repayment. All partially offset by free cash flow generated during the period. Debt outstanding at year-end totaled $29.9 billion and carries a weighted average interest rate of 3.7% with an average maturity of 12 years.

Now, turning to the outlook for the business for 2020 on Page nine. 2020 will be another important year for Amgen, as we continue to invest in the pipeline to generate innovative and differentiated molecules, build out the global business, and support the growth of our new products. As previously discussed, in anticipation of this opportunity and continued downward pressure on net prices, we developed a productivity capability to enable us to fully invest from a position of strength.

Our 2020 revenue guidance is $25.0 billion to $25.6 billion and our non-GAAP earnings per share guidance is $14.85 per share to $15.60 per share.

GAAP earnings per share guidance is $10.85 per share to $11.65 per share, which divergence from non-GAAP EPS, primarily due to the amortization of intangibles related to our Otezla acquisition.

Our non-GAAP tax rate guidance is 13.5% to 14.5% and once again, we expect capital expenditures of approximately $700 million this year, including our industry-leading environmentally friendly next-generation manufacturing facility in Rhode Island.

Let me mention several key assumptions embedded in our guidance. First, our revenue guidance range reflects continued strong worldwide growth from products including Prolia, EVENITY, Repatha, Aimovig, Otezla and our biosimilar portfolio. At the same time, we expect increasing competition against our filgrastim and ESA franchises, as well as Sensipar.

Next, with regard to net selling prices, we experienced a 5% decline globally in 2019. For 2020, we expect to again experience low- to middle-single-digit declines globally. We expect our volume growth to more than offset the net price declines. Overall, as previously stated, excluding Otezla, we expect our base business to be stable in 2020 on a year-over-year basis.

As you model revenue in 2020, note that historically the first quarter represents the lowest product sales quarter of the year. As a percent of the full-year, product sales for the first quarter should look similar to the percentage we saw in Q1 of 2019. Murdo will explain further in his remarks.

With respect to other revenue, we expect about $1.1 billion for the full-year 2020, as we anticipate increased competition against our royalty product portfolio.

From an operating expense perspective, overall we expect 2020 total non-GAAP operating expenses to grow in the low-double-digit percentage range year-over-year on an absolute basis.

As previously communicated, we reiterate the following three assumptions. Non-GAAP R&D investment to increase as we invest in our advancing innovative pipeline programs and new Otezla indications, partially offset by R&D recoveries received from our BeiGene collaboration.

Second, non-GAAP SG&A expense to increase due to the acquisition of Otezla, as well as modest incremental investment in support of our base business, as we continue to expand globally, including China and Japan, grow our biosimilars business and begin product launch preparation for our late-stage pipeline.

Non-GAAP cost of sales as a percent of product sales to be generally consistent with 2019. We expect all expense categories to continue to benefit from our productivity program.

We anticipate non-GAAP other income and expense to be a net expense in a range between $1.2 billion and $1.4 billion. This is primarily driven by lower interest income as a result of cash used to fund the Otezla and BeiGene transactions, as well as our 20.5% share of BeiGene’s results based on current publicly available consensus estimates. I note that our 20.5% share of BeiGene’s results will be booked one quarter in arrears in accordance with the equity method of accounting and therefore, begins in Q2 2020.

As you know, on April 1, 2020, Amgen will purchase the 49% of shares in Amgen Astellas BioPharma that are held by Astellas for a nominal fee, making the company a wholly owned Amgen subsidiary. First, let me say how excited we are about this transition as it marks the achievement of a long-term strategic objective. We look forward to further leveraging this platform as we seek to bring Amgen’s new medicines to patients in the third largest pharmaceutical market. From a financial perspective, we anticipate limited near-term financial impact resulting from this transition.

Now, with regard to capital deployment. Our actions will continue to reflect the following principles. First, we will invest in our business to expand our pipeline of innovative medicines and to seek to drive long-term volume growth globally. We will also invest in prudent external business development opportunities.

Second, we remain committed to returning capital to shareholders in the form of growing dividends, including the 10% increase in the first quarter of 2020 (Technical Issues) $1.60 (Phonetic) per share, as well as continued share repurchases. We will continue to take an opportunistic view toward the timing of share repurchases within ’20. We expect share repurchases within a range of $3 billion to $5 billion and have an authorization outstanding in the amount of $6.5 billion.

And third, we remain committed to maintaining an optimal capital structure in order to minimize our weighted average cost to capital and retain our investment-grade rating. Consistent with our usual practice, our guidance today does not include the impact of potential external business development activities.

So, in summary, we delivered another year of strong financial results in 2019, and we remain confident in the outlook for Amgen’s success in 2020 and beyond.

This concludes the financial update. I will now turn the call over to Murdo.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Thanks, Peter, and good afternoon, everyone. I’ll take a few minutes to reflect on 2019 and then review Q4 in greater detail. In the 40 years since incorporation, Amgen’s product portfolio and geographical footprint has changed dramatically. On our 40th anniversary, we reflect on the pioneering innovative spirit of our early Amgen employees that transformed the treatment of disease. Our mission to serve patients remains unchanged and it motivates us every single day. Our accomplishments on behalf of patients in 2019 give us further confidence about our future as we enter 2020.

To summarize 2019, for the full-year, we grew volume by 3%. The growing proportion of our portfolio posted 35% year-over-year volume increases. This portfolio is diverse and includes products such as Prolia, EVENITY, Repatha, Aimovig, Otezla, AMGEVITA, our six hematology and oncology brands, as well as MVASI and KANJINTI.

Finally, our international business contributed 19% volume growth in 2019. Notably, year-over-year revenues for our businesses in China and Japan grew nearly eight-fold. These markets are long-term growth engines for Amgen and our collaboration with BeiGene, along with our acquisition of Otezla will accelerate our expansions in the second and third largest pharmaceutical markets.

Now, moving to fourth quarter results. Volumes grew by 3% year-over-year. In Q4, net selling prices declined 4% year-over-year, resulting in reported net sales declining by 2%. As Peter mentioned, we have a stable outlook for our base business for 2020 and with the addition of Otezla, we expect revenue growth this year despite projecting continued declines in net selling price on a portfolio basis.

Now, getting into product details. Prolia delivered 15% growth year-over-year, driven by higher volume from increasing rates of new patient growth and strong repeat injection rates. Recall that given twice a year dosing, Prolia experiences consistent seasonal trends. EVENITY posted $85 million in the fourth quarter, driven by strong uptake in both Japan and the US. Every year, worldwide 8.9 million fractures occur due to osteoporosis. That’s one fracture every three seconds, and only 20% of women who experienced a fracture are treated with a bone-building medicine. Given the under-penetrated nature of this market, we continue to focus on ensuring postmenopausal women receive appropriate screening, diagnosis, and treatment. With Prolia and EVENITY, we have excellent treatment options to offer these patients.

On to Repatha, Q4 sales grew by 26% year-over-year, as we continue to be the leader in the PCSK9 class. Worldwide unit growth was 67% year-over-year. And new-to-brand US prescriptions are steadily improving growing at 61% year-over-year. We’ve taken significant steps and have made major progress in improving access and affordability for Repatha. We removed the original list price offering. We simplified and improved prescription approval rates and commercial plans and we have increased the percentage of Medicare patients up to 70% that can access Repatha at a more affordable co-pay. Although the blended net price of Repatha in the US declined in Q4 versus the previous year, net selling price was relatively stable sequentially. For 2020, we expect a step down in Repatha’s net selling price in Q1 based on our contracting to obtain broader access with stabilization thereafter.

Now, onto Aimovig on Slide 16. On a year-over-year basis, volume grew 27%, while net sales grew 3%. As a reminder, Q4 2018 benefited from $20 million of favorable changes in accounting estimates impacting the year-over-year comparison on a quarter-over-quarter basis. Unit volume grew 9%. To date, almost 300,000 patients have been prescribed Aimovig by more than 33,000 prescribers. Considering that there are 4 million migraine patients in the US who are eligible for CGRP treatment, Aimovig has significant potential remaining to penetrate this market, and we expect to drive volume growth over the course of 2020.

Aimovig leads in both new to CGRP prescriptions and total prescriptions, which exited Q4 with a 48% TRx share. Aimovig has exceptional access with over 80% of prescriptions paid and over 92% of lives covered. As a result of this broader access, we expect net price to decline slightly on a full-year basis for 2020, when compared to the full-year 2019. Additionally, Q1 has lower sales in subsequent quarters due to the impact of benefit plan changes, insurance reverifications, and greater co-pay expenses as patients work through their deductibles.

We’ll move to Parsabiv on Slide 17, which grew by 49% year-over-year in the fourth quarter. Independent and midsize dialysis providers already utilize Parsabiv for a majority of their calcimimetic patients, while FMC and DaVita continue to increase adoption.

Next, onto Otezla. With the help of the dedicated professionals that have joined our team from Celgene, we will continue to drive strong sales growth and launch potential new indications for Otezla. During the period since acquisition close, prescription momentum continued with 13% year-over-year growth. Our seamless integration efforts, combined with planned, label and geographic expansion gives us confidence in our ability to grow Otezla at low-double-digit compound annual growth rate over the next five years. For the approximately five weeks post-closing in 2019, Otezla sales were $178 million. We expect first quarter sales to be proportionally lower than in the remaining quarters of the year. The quarterly pattern for Otezla in 2020 should approximate the historical pattern over the last number of years.

Moving onto Enbrel. Sales increased 2% year-over-year, driven by a $66 million favorable change in accounting estimates and increases in net selling price, partially offset by unit volume declines. Volume trends in 2020 are expected to be similar to those in 2019. As for net selling price, we project limited benefit in 2020 versus 2019 due to less favorable contract terms.

With two highly complementary products, targeting psoriasis and psoriatic arthritis, we see an opportunity to strengthen their positions in the market. More broadly, we’re increasing our focus in inflammation through our broad portfolio, which includes our biosimilars, AMGEVITA, and AVSOLA. Our late-stage asset tezepelumab and a number of other earlier assets in the R&D pipeline.

Now, to our hematology and oncology business, which is highly integrated with our oncology biosimilars that I’ll discuss later. Our innovative portfolio of six brands XGEVA, KYPROLIS, Nplate, Vectibix, BLINCYTO, and IMLYGIC collectively totaled $1.2 billion in the quarter, growing 10% year-over-year.

As for some of the larger brands within this portfolio, XGEVA grew 7% in Q4 year-over-year, driven by 4% volume growth. KYPROLIS grew 6% year-over-year, driven by volume led by a 12% increase in the US — in US sales. Nplate grew 15% year-over-year, driven by volume. Our investments in R&D for Nplate have resulted in two innovations. First, we recently launched a smaller presentation at 125 micrograms in support of in Nplate’s pediatric indication, as the product is administered with weight-based dosing. This new presentation will also help to minimize general product wastage for ITP patients across all indications. Second, Nplate received approval in October for the treatment of early ITP, which gives us the chance to serve patients earlier in the course of their disease and provides the opportunity for treatment free remission.

Now, onto our more mature brands, in Q4, Neulasta sales declined 43% year-over-year, with a 42% decline in the US. Recall that Q4 of 2018 benefited from a $55 million BARDA order, which did not repeat in Q4 of 2019. Coinciding with the emergence of US biosimilar competition, the most recent CMS published ASP for Neulasta reflects a 10% reduction. Bear in mind that ASP is calculated two quarters in arrears.

On a volume basis in Q4, US Neulasta retained an exit share of 74% of the long-acting segment with Onpro holding an exit share of 55%. We are encouraged by Onpro’s durability demonstrating confidence that our customers have, in the reliability and quality of our supply, along with our broader customer services. We now face a third biosimilar competitor in the US and other potential competitors remain in development. As you model Neulasta sales for the first quarter, recall that Q1 2019 benefited from a $98 million BARDA order that we do not project to recur in 2020.

Finally, outside the US, sales declined 48% in Q4 and we expect those trends to continue. Switching to Nephrology, starting on Slide 25, Q4 EPOGEN sales declined 20% primarily due to lower net selling price from our contractual commitments with DaVita, which calls for a further price reduction in 2020. Meanwhile, Aranesp declined 10% year-over-year driven by lower volume due to increased competition.

Regarding Sensipar, recall that in the US, there were several at-risk generic launches in 2019 that resulted in year-over-year sales declining 76% to $107 million in the quarter. In 2020, supplemental patent protection certificates for cinacalcet expire in France, Germany, Italy, Spain, and the United Kingdom, which will likely result in a significant decline in ex-US sales in 2020.

I’ll close the product section with our biosimilar portfolio, which is highly integrated with our innovative business throughout the Company. As examples, a majority of these products were made with the same manufacturing network as our innovative brands. We also leverage the same supply chain for distribution. And on the commercial side, we continue to identify synergies in commercializing our biosimilars alongside our innovative products, making it a highly efficient selling model, and allowing us to rapidly apply learnings across our portfolio.

We also offer the same provider and patient services as with our innovative portfolio. These advantages are increasingly important as we now face additional biosimilar competition to KANJINTI and MVASI and expect other competitors to enter during 2020. Our Q4 biosimilar portfolio comprised of KANJINTI and MVASI in the US and AMGEVITA, KANJINTI and MVASI outside of the US recorded sales of $258 million.

In the US, KANJINTI and MVASI each recorded $79 million of sales, and we’ve seen very encouraging adoption rates in the clinic segment and hospital adoption is accelerating. Given the early stage of launch, there is also some inventory stocking during the quarter. Ex-US sales from our biosimilars where $100 million led by AMGEVITA. We continue to see important differences between products and markets in terms of uptake and price erosion with some markets experiencing strong uptake at more discounted pricing levels, while other larger markets, including Germany and France exhibit a more balanced and sustainable opportunity. Here again, we’re able to leverage our expertise and footprint in oncology, while AMGEVITA efforts synergized nicely with Otezla.

In summary, 2019 was a solid year given the evolution of our product portfolio. In 2020, we plan to drive volume uptake of our growth portfolio of products, now including Otezla while defending our mature brands.

Let me now turn it over to Dave Reese.

David M. Reese — Executive Vice President, Research and Development

Thanks, Murdo, and good afternoon, everyone. As we enter 2020, we are looking forward to important clinical data from programs across our three therapeutic areas: inflammation, oncology, and cardiovascular disease. I’ll say more about oncology in a moment, but I’d like to take the opportunity upfront to express our enthusiasm for the BeiGene collaboration. We’re off to a good start and look forward to working together to advance the global development of our pipeline of innovative oncology molecules.

I’ll now begin my quarterly review in inflammation. We expect Otezla data this year from a Phase 3 study in over 500 patients with mild-to-moderate psoriasis that have failed topical therapy. This patient population has no approved oral therapy available and we are confident that Otezla may provide a much needed treatment option. We’re working with the CHMP toward a Behcet’s indication in Europe and with the FDA on inclusion of the scalp psoriasis data in the US label this year. There are also ongoing studies for new indications, including pediatric psoriasis and we’re evaluating additional studies to expand the opportunity for Otezla.

I’ll also remind you that later this year, we expect Phase 3 data from our TSLP antibody, tezepelumab in development with AstraZeneca in severe uncontrolled asthma.

In bone health, along with UCB, we were pleased to receive European approval for EVENITY for the treatment of severe osteoporosis in postmenopausal women at high-risk of fracture. EVENITY is the first new osteoporosis medicine approved in Europe in the last decade, a testament to the need for a new therapy that can rapidly build bone.

Turning to oncology and hematology, we continue to rapidly advance the development program for AMG 510, our first-in-class KRAS G12C inhibitor. We enrolled the potentially pivotal Phase 2 monotherapy study in advanced non-small cell lung cancer in approximately three months and look forward to sharing data later this year when we have at least six months follow-up on all patients. I previously mentioned that we had enrolled a cohort of advanced colorectal cancer patients in our Phase 2 monotherapy study. Based on the data we have generated to date, we have opened the study to further enrollment and we’ll assess our potential development path in colorectal cancer as additional data become available.

We also expect to present additional data later this year from our first-in-human monotherapy study in solid tumors, where we will have more information on duration of therapy, as well as data in tumor types other than lung and colon cancer. We also expect initial data from our Phase 1 combination study with KEYTRUDA in advanced non-small cell lung cancer.

We are enrolling advanced colorectal and non-small cell lung cancer patients in our MEK inhibitor combination study, as well as treatment-naive non-small cell lung cancer patients in our ongoing Phase 1 monotherapy study. We continue to plan additional studies primarily combination trials and we’ll provide updates as the program progresses.

We remain enthusiastic about our BiTE platform, and 2020 will be an important year. Based on emerging evidence of anti-tumor activity in both hematologic malignancies and solid tumors, we are growing increasingly confident in the half-life extended format. As we advance our BiTE clinical programs in different tumor settings, we are gaining important insights into dose and schedule and management of adverse events, such as cytokine-release syndrome. These insights will guide customized development approaches, depending on the target and underlying disease biology. Over the course of the year, we anticipate sharing data from some of these programs and I’ll provide further guidance on expected data presentations as these molecules advance.

We are now pursuing two half-life extended BiTE programs for gastric cancer and recently initiated a first-in-human study for AMG 199, which is directed against MUC17, a target widely expressed in gastric cancer. Gastric cancer, as you know, is highly prevalent in East Asia, where we have a growing presence through our impending Japan subsidiary and collaboration with BeiGene.

As I previously discussed, we intend to present the data for AMG 701, or half-life extended BCMA BiTE when we have a meaningful dataset, most likely in the second half of this year.

We’ve also made several regulatory submissions in oncology, including the KYPROLIS CANDOR study in the US, KYPROLIS plus dexamethasone in China for relapse and refractory multiple myeloma and BLINCYTO in China for relapsed-refractory AOL. We look forward to working with BeiGene to advance these important medicines.

In cardiovascular disease, along with Cytokinetics, we look forward to the data from the omecamtiv mecarbil Phase 3 outcome study in the fourth quarter of this year. While the heart failure treatment landscape is expected to change based on recent data from other drug classes, we believe significant residual unmet medical need remains in this global epidemic. Also, in cardiovascular disease, our Lp(a) siRNA, AMG 890 continues to advance and we expect to initiate Phase 2 development in the first half of the year.

Finally, on biosimilars, we’re pleased to receive US approval for AVSOLA, our biosimilar Remicade and to make our US regulatory submission for ABP 798, our biosimilar Rituxan. I’m also pleased to announce that we are initiating a Phase 3 study with our 7th biosimilar ABP 938, our biosimilar aflibercept or EYLEA.

Bob?

Robert A. Bradway — Chairman and Chief Executive Officer

Okay. Thanks, Dave. Ian, why don’t we open the lines up for questions now and please remind our callers of the process.

Questions and Answers:

Operator

(Operator Instructions) Our first question is from the line of Jay Olson from Oppenheimer & Company. Jay?

Jay Olson — Oppenheimer & Co. — Analyst

Oh, hi. Congrats on the quarter and thanks for taking the question. You talked a little bit about net pricing dynamics for Aimovig. Could you maybe elaborate a little bit on how you expect the competitive dynamic to shape up in the CGRP space and any long-term data you could potentially leverage there? Thank you.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Thanks for the question. Jay, it’s Murdo here. We’re very pleased with Aimovig’s market access position now with over 92% of covered lives, having access to Aimovig at a very affordable co-pay. We’re also pleased with the addition this year of CVS. Last year, we did not have CVS as a benefit — with Aimovig as a benefit and we do, as of the beginning of this year, and we’ve already seen an acceleration in our new patient uptake. We are happy that the percentage of patients that are receiving paid prescriptions now of Aimovig is above 80% and that bodes well for the future growth of this category because we’ve got highly effective medicines that have an impact — a significant impact on the reduction of migraine days on migraine sufferers and we have a lot of them, there is 4 million eligible patients out there in the US and they’re able to access Aimovig at a very affordable co-pay. So that’s good for the future outlook of the category.

Obviously, because we did contract to secure that additional access, there will be a reduction in our net selling price that you’ll see in Q1, and then we expect it to be relatively stable over time. Now, because this is a retail benefit product, you do see some fluctuations as you make true-ups in the mix of your product that comes through Medicaid commercial or to some extent Medicare Part D. But overall, we would expect post Q1 stability in net selling price.

Robert A. Bradway — Chairman and Chief Executive Officer

All right. Let’s go to the next question, Ian.

Operator

And our next question is from the line of Michael Yee from Jefferies. Michael?

Michael Yee — Jefferies & Company — Analyst

Great. Thanks for the question. I had a R&D question for David. Of course, there is a lot of attention on AMG 510. You made a lot of great comments about how you quickly enrolled the study and we’re going to get data later this year. One of the things I picked up on was your comments about first-line lung, can you just maybe make a comment about how that advances or how that progresses or how you go about a first-line strategy that’s, obviously, a huge opportunity? So, maybe just comment about where that monotherapy study goes and where you can go with first-line? Thank you.

David M. Reese — Executive Vice President, Research and Development

Yeah. Thanks, Michael. That is intended to provide a potential treatment option for patients who are not eligible for other first-line lung therapies or unwilling to take such therapies. I think it will provide incredibly valuable clinical information on response to the drug in a previously untreated population. We’ve just started enrolling that in the — so — over the course of the year as we generate data, we’ll provide guidance as to when we may have some things to share.

Operator

And our next question is from the line of Chris Raymond from Piper Sandler. Chris?

Christopher Raymond — Piper Sandler — Analyst

Hey, thanks for taking the question. Just on M&A priorities. So Bob, I was kind of struck a couple of weeks ago in San Francisco. You guys talked about renal as maybe an area of interest in terms of building out the pipeline. And you’re offering, and obviously, augmenting what is a pretty formidable business now. But I think the wording that I heard you say, Bob was that, any asset you bring in, would have to be game changing. So maybe two parts, can you talk about the reasoning for this sort of focus on renal or at least articulating that to us? And then what are you really looking for in terms of the game-changing therapy? Thanks.

Robert A. Bradway — Chairman and Chief Executive Officer

Yeah. So, Chris, just to remind you, we have six commercial franchise areas, of which nephrology is one. Obviously, that was our first. We’ve been a leader in that area now for several decades. We have a number of important products for nephrologists today and we intend to continue to serve the needs of patients and physicians and providers, etc., in that community. We have not found in our own discovery research efforts that we’ve been able to find the kinds of game-changing innovation that we want to invest in from a discovery standpoint. So we’re not investing in discovery research in nephrology right now, but we are going to look for business development opportunities there. And in general, our strategy when it comes to the business development, is to look for medicines that make a big difference for patients suffering from these diseases. So we’ll look for innovation and large effect size. I don’t know that I use the word game changer. But if I did, that’s what I was intending to reflect the notion of large effect size innovative medicines.

So, to the extent, there are some in the industry or otherwise medicines, where again we think, because of the historical investment we’ve had it, with this community patients that we can add real value, we’ll look.

Operator

And our next question is from line of Brian Skorney from Robert W. Baird & Company. Brian?

Brian Skorney — Robert W. Baird & Co. — Analyst

Hey, good afternoon, guys. Thanks for taking the question. One quick one — actually two quick ones on housekeeping, just it looks like compared to last quarter, you saw a 6% decline in Neulasta market share. Could you just breakout how much of that was Onpro loss? And can you also talk about how Onpro price has been impacted by the biosimilars have been able to maintain price so far or have you taken greater discounts to maintain that share? Thanks.

Robert A. Bradway — Chairman and Chief Executive Officer

Okay. Those are good questions for Murdo. Why don’t you go ahead, Murdo?

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yeah. Thanks, Brian. The majority of the share decline is from the prefilled syringe. Onpro exited at a 55% share of long-acting filgrastim and continues to hold up well in terms of share. We have had a contract out there that provides some discount to Onpro, but it’s a more modest discount, then you would see on the prefilled syringe.

Operator

And our next question is from the line of Evan Seigerman from Credit Suisse. Evan?

Evan Seigerman — Credit Suisse — Analyst

Hi, all. Thank you for taking my questions. One on biosimilars, so what are some gating factors to achieve, I think it’s multi-billion or you had at one point said greater than $3 billion in sales across the franchise? And if there were to be implementation of an international pricing index for most favored nation clause for Medicare Part B, how would this potentially impact your biosimilars business? Thank you, guys.

Robert A. Bradway — Chairman and Chief Executive Officer

I can take a stab at the first part of your question and Murdo, I invite you to jump in. But since we made those undertakings before you were part of the team, Murdo, the notion that we articulated was that we were going to advance the portfolio of up to 10 biosimilars that we expected that these could be an attractive growth opportunity for the Company and we’re off to a good start, as you heard me say earlier. At the end of the fourth quarter, we were annualizing in excess of $1 billion. So, we’re off to a good start. We’re on time. We’re on budget with these programs and the gating item is simply product approvals and product launches. So, we remain enthusiastic about our chance to earn a return from these products and it adds to the specifics of IPI, just to say in general. We, obviously, would be concerned we think quite a few other stakeholder groups would as well about the disruption that IPI would represent to the innovative biopharmaceutical industry. And we think there are better ways to evolve our system in a way that ensures patients have access to medicines at affordable prices.

But Murdo, feel free if you want to add anything specific about IPI in biosimilar landscape.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Nothing on IPI, Bob, I think you summarized it well. And on the biosimilars, the only thing I would say is, I’m thankful to have inherited this portfolio and for the decisions that were made prior to my arrival. I think this is a strong business opportunity. It’s been one, we’ve been able to realize very good competitive share in Europe and we’re off to a very good start in our early launch in the US. And I look forward to being able to launch more products.

Operator

And our next question is from the line of Kennen MacKay from RBC Capital Markets. Kennen?

Kennen MacKay — RBC Capital Markets — Analyst

Hey. Thanks so much for taking the question and congrats on the end of the year in 2019. I totally agree it was transformative. Maybe for Murdo, I was wondering if you could talk a little bit about the synergies you’re seeing or expecting between selling of both Otezla and Enbrel. And whether there were any tailwinds there to year-end formulary rebating or contracting negotiations we should think about in pricing or access in the year ahead?

Murdo Gordon — Executive Vice President, Global Commercial Operations

Thanks for the question, Kennen. Yeah. We’re excited about potential synergies between Otezla and Enbrel, and quite frankly, by extension our biosimilars business coming into the inflammation category. Too early to comment on specifics, but we continue to work through our contracting strategy, promotional strategy, even things as simple as possibly expanding into primary care promotion because we have a fairly large primary care footprint. And then, clearly, our international geographic expansion is augmented by having Otezla joining our portfolio with potential new markets where perhaps Otezla was slated to be launched by distributors when we have a full-blown affiliate in some of those markets.

And then the last piece is, of course, synergies as we go into some of the new indication areas. So I’m excited about building those out. Our teams are working hard to realize those synergies, and I feel optimistic that we’ll be able to be more specific in upcoming quarters.

Operator

And our next question is from the line of Umer Raffat from Evercore ISI. Umer?

Umer Raffat — Evercore ISI — Analyst

Hi. Thanks so much for taking my question. I am just extraordinarily confused today on the guidance, but I’ll limit my question two specific things perhaps. First, Peter on the OI&E line, if you can bear with me for a second, you mentioned $1.2 billion to $1.4 billion. And I was trying to think it through and I thought to myself $30 billion debt at just above 3% rate, so that’s $1 billion as an interest expense, minus about $100 million of the interest income. So that’s $900 million, so when you guide to $1.2 billion to $1.4 billion, that’s effectively implying $300 million to $500 million for BeiGene. But my understanding was you’re only booking 20%, and I’m just trying to understand, is BeiGene’s implied net income $1.5 billion to $2.5 billion, or am I thinking about that wrong, because that sounds so much higher than what BeiGene does. That’s number one.

And secondly on revenues, I noticed — I know the business is being implied flat year-over-year outside Otezla, so I just want to understand better what the pushes and the pulls are there. And perhaps also, I think it mentions biosimilars doing $1 billion in 2020, annual 4Q ’19 alone was north of $1 billion run rate. So just trying to understand all this. Thank you very much.

Robert A. Bradway — Chairman and Chief Executive Officer

Okay, Umer. Let’s try and go through that, I think there were three questions there. So, Murdo, you want to take the first two on the revenue, just clarify what we said, and then Pete, you can help clarify the other interest and expense line item.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Sure. So, yes, we’ve guided that our base business will be stable year-over-year. Obviously, there are a range of outcomes on that portfolio, and we continue to work hard across a number of opportunities to do as we’ve done historically and that is to outperform. I would say that Otezla has come in and we have seen very good seamless integration of that team and that performance of that product and the growth trajectory continues without any interruption through the fourth quarter and we’re seeing strong weeks early in the New Year.

On biosimilars, it’s very early in the launch of those two products, where we are annualizing, as you pointed out, at over $1 billion based on fourth quarter and we expect to be able to continue to accelerate that business.

Peter Griffith — Executive Vice President and Chief Financial Officer

Umer, Peter here. Thanks for your question. I would take you to the fact that our total debt at the interest rate I talked about in my remarks at 3.7% average maturity 12 years, by the way, I mentioned that too. That plus the 20.5% of BeiGene’s results for 2020, the publicly available consensus estimates are what we’re guiding to. So, when you work through those two, you should get pretty close to our $1.2 billion to $1.4 billion for 2020.

Operator

And our next question is from the line of Robyn Karnauskas from SunTrust Robinson Humphrey. Robyn?

Robyn Karnauskas — SunTrust Robinson Humphrey — Analyst

Hi. I don’t want to beat a dead horse, but I guess, I’m confused, too, just by this lack of growth, given that your slides have outlined, in your last — you’ve lost like half Onpro’s holding, you’re growing like a bunch of different products. So, what is the one thing you think that is going to prevent you from growing more this year and not just having a stable business year-over-year? Like that’s sort of what I’m struggling with the most. Just help me understand that, because the way you describe, it looks like more growth of the top line. Thank you.

Robert A. Bradway — Chairman and Chief Executive Officer

Sorry, Robyn, repeat the last piece of your question? (Speech Overlap)

Robyn Karnauskas — SunTrust Robinson Humphrey — Analyst

Sure. Just like — the way you’re describing our your businesses in your slide performance basically is that, you’re growing many parts of the business and the part that is declining is Neulasta, it seems to be potentially stabilizing with Onpro. So, what is preventing you from growing beyond what you’re guiding? Is there one particular thing? I think most of us are sitting there saying, why can’t you grow more than what you’ve outlined given the picture that you painted of the business being actually quite strong?

Murdo Gordon — Executive Vice President, Global Commercial Operations

So, I would agree with your last comment, the picture of the business does look quite strong. We’re pleased with what we’ve been able to achieve, particularly in the back half of last year. As I mentioned earlier, some of the Neulasta stability with Onpro has been at the expense of contracted terms, which lowered the net price of that total portfolio inclusive of Onpro, and we would expect with additional competitors against Neulasta in the biosimilar space that there will be further net price erosion in the long-acting filgrastim category. And, of course, overall in our total portfolio worldwide, we would expect single-digit net price declines for the year.

Now, that goes up against what I talked about throughout the call is, we have a number of really strong growth drivers in a young portfolio, very diverse products, and we have guided a wide range on revenue and it’s my hope that the strong execution we saw in the back half of last year continues into this year and we can achieve a good growth profile, not just in Otezla but in the base business.

Operator

And our next question is from the line of Terence Flynn from Goldman Sachs. Terence?

Terence Flynn — Goldman Sachs — Analyst

Hi. Thanks for taking the question. Omecamtiv is a product you guys haven’t talked a lot about recently, obviously, some Phase 3 data coming later this year. Dave, you mentioned it in your remarks as well in terms of kind of the change in treatment landscape. But just curious if you could remind us of the puts and takes for the program, as we think about the probability of success here. And what would really get you guys excited that type of data? Thank you.

David M. Reese — Executive Vice President, Research and Development

Yeah. Sure, Terence. This is Dave. I’m happy to address that. I mean, as I mentioned in my remarks, heart failure is a global epidemic, what makes us continue to have excitement in omecamtiv, it’s a first-in-class mechanism of action, it’s the only drug ever introduced that actually acts directly on the heart cell to improve contractility or the heart’s pumping function. And we’re conducting what’ll will be a definitive 8,200 patient, give or take, trial in patients with advanced heart failure. It’s a fairly sick population, where we’re going to be looking for mortality benefit and a variety of other clinical outcome measures that improve. So, I think there is a large amount of residual unmet medical need and, obviously, where this fits in a train — changing treatment landscape will depend on the profile that emerges from that Phase 3 trial.

Operator

And our next question is from the line of Ronny Gal from Bernstein Research. Ronny?

Ronny Gal — Sanford C. Bernstein — Analyst

Good afternoon and congratulations on the nice 2019. And got one housekeeping and one question. The quick one is, I was wondering if you could give us your comment on the Medicaid block grant that just was announced today. Does that has any relevance to you? And then generally, where do you expect it will impact the drug industry?

And second, David, I was wondering if you could give me your view on the Memorial Sloan Kettering paper suggesting the targeting the active GDP bound form of KRAS is better than trapping the GDP KRAS in the inactive form in terms of preventing tumors — tumor resistance to those agents.

Robert A. Bradway — Chairman and Chief Executive Officer

Good. Well, let me — I’ll knock off the Medicaid piece first, Ronny. For those who are on the call who aren’t aware, CMS released some guidance earlier today, so we and others are still chewing through it. I think it’ll have very limited impact at first read of it for us. But it’s likely to be relevant for those states that didn’t opt into the ACA in the first instance and we’ll go through it, as well. I’m sure others in our industry, more closely to see whether there are any specific issues for our business. But it didn’t seem to me, Ronny, that that was going to be a concern for us in 2020.

Dave, you want to tackle the Sloan reference (Speech Overlap)?

David M. Reese — Executive Vice President, Research and Development

Yeah. I’m sure you don’t want to address that one, Bob. So, for those who aren’t familiar, Ronny is referring to a paper that came out within the last month or so that suggests that also targeting the GDP bound form of KRAS G12C would be required for signaling inhibition. We read the paper with interest, of course, I’ll make a couple of observations. First, I would say our own data with AMG 510 suggests that at the appropriate doses and doses that we can achieve clinically, we can completely suppress signaling throughout a dosing interval. It is also my understanding or belief that the G12C inhibitor used in that paper may have been a little less potent. And one thing that we’ve learned over 40 years in oncology is that, if you incompletely inhibit a target you very quickly breed resistance. So, I would say, I feel very confident based on the preclinical data that we’ve generated with AMG 510. We’re, of course, profiling tumors across our clinical program to try to generate signatures of response and resistance. This is the sort of thing that we’ll look at. But I don’t see anything in the literature as of yet that dissuades me from the approach we’re currently taking.

Operator

And our next question is from the line of Mohit Bansal from Citi. Mohit?

Mohit Bansal — Citigroup — Analyst

Great. Thanks for taking my question. And a quick question on Otezla in mild-to-moderate psoriasis, it seems like you’ll have data later this year. But given that net of tax rate is kind of a standard of care in that particular market and is a generic, what sort of challenge do you anticipate placing Otezla in that market and how do you think about navigating those challenges there? Thank you.

David M. Reese — Executive Vice President, Research and Development

Yeah. Well, let me start, Mohit, and then I’ll ask Murdo to jump in. So, in mild-to-moderate psoriasis, there are currently no approved oral therapies. The only thing really available to patients right now is topical therapy, many of them will not ultimately experience disease control with those topical therapies. And so, we think there is a real opportunity for Otezla in that area. There are up to nearly 6 million patients with mild-to-moderate psoriasis in the United States alone. So that gives you a sense of the size of this opportunity and actually the prevalence of the disease. Murdo?

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yeah. And, Mohit, the only thing I would add is, yes, there is some methotrexate used there, but it’s largely a topical business as Dave described and it’s largely a patient population that gives very little relief. And this is really a patient population that is in the sweet spot for Otezla.

The other thing I have to say is that, our new colleagues when building out their positioning strategy for Otezla and their payor strategy have done a very, very nice job of positioning the access and reimbursement for Otezla as a post-topical pre-biologic option. So, I think for the mild-to-moderate population, if we’re successful in securing that indication, that same payor strategy will be continued. So, I feel confident that we’re in good shape there for another source of growth for Otezla going forward.

Robert A. Bradway — Chairman and Chief Executive Officer

So, Ian, I know we’ve got several calls or several questions still queued up, so we’ll try to get through those. Apologies that we’re beyond the top of the hour here, but let’s go onto the next question.

Operator

Certainly. Our next question is from the line of Matthew Harrison from Morgan Stanley. Matthew?

Matthew Harrison — Morgan Stanley — Analyst

Good afternoon. Thanks for taking the question. I just wanted to follow-up on a comment that Dave made earlier in the call, suggesting I think that maybe you’re seeing some activity in HLE BiTEs in both solid tumors and liquid tumors. Maybe you could just characterize for us what data you have internally that gave you the confidence to make that statement? Thanks.

David M. Reese — Executive Vice President, Research and Development

Yeah. Thanks, Matt. And I assume that someone would pick up on that statement. So, what I would say is, I’m not ready to declare victory in any indication yet, but we’re seeing the sort of pharmacodynamic activity and early suggestions of anti-tumor activity that are reminiscent of the early days of BLINCYTO and that give us encouragement that we’re on the right track.

I’d also point out that we undoubtedly have the largest experience in the world in development of bispecific T-cell engagers. As I noted in my remarks, we’ve learned an enormous amount about dosing and scheduling appropriate management of adverse events, and I think all of that is starting to come to bear right now. And we’re starting to see some of these hints in that in the HLE or half-life extended format. So, again, I’m not ready to declare a victory, but we’re seeing signs of encouragement and we’ll be ready to share some of those data as the year goes on.

Operator

And our next question is from the line of Do Kim from BMO Capital Markets. Do?

Do Kim — BMO Capital Markets — Analyst

Great. Thanks for taking my question. Just one on Aimovig, you’ve talked previously about expanding the primary care prescribing base. How would you go about doing that and could you do it with your current sales force?

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yes. Thanks, Do. We are doing it with our current sales force. I think I talked about the 33,000 prescribing base. And I think we’re seeing some encouraging results. Right now in the CGRP class, you see about 7,000 new patients coming into the class, and into the category that are receiving a CGRP therapy and it’s our goal to broaden that. Given that there are so many patients, who are persisting on oral therapies and older therapies that are just not as effective and in fact, we see very high drop off and very low persistency on these older oral meds like topiramate. And we are trying to change that care continue on that pathway in the way physicians treat chronic migraine sufferers. And I think we’re having some success.

So the 7,000 patient per week number that we’re seeing is one that we’re looking to grow. And we are applying all the right efforts, both in our digital campaigns, as well as our personal selling teams in the primary care community right now. So yes, the answer is, we have all the resources required to do that.

Operator

And our next question is from the line of Yaron Werber from Cowen & Company. Yaron?

Yaron Werber — Cowen & Company — Analyst

Yeah. Great. Thanks so much. If you don’t mind, Dave, just have a quick housekeeping and then a question for Murdo. On the housekeeping side, omecamtiv, can you just let us know, is there one more final DSMB look before you look at the event rate? And then for Murdo, just curious about Repatha, it looks like it’s beginning to grow now. But now, what’s your expectation given that 70% of patients now have access to the new price — the new formulation? Thank you.

David M. Reese — Executive Vice President, Research and Development

Yeah, Yaron. So I’ll take the omecamtiv question. There is an — as we’ve previously discussed, there is an interim analysis for efficacy that will occur, that has a very, very high bar, a very high bar in terms of the statistical stopping rule. So, our expectation is that, the trial will continue through to the primary analysis toward the end of the year.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yes. And Yaron, on Repatha, just a reminder, a 100% of patients are accessing the low-list price because we pulled the original list price off the market in December. And we’ve been able to, throughout the course of 2019, open up the commercial access, where the majority of patients receive Repatha by their physicians prescribing it without the need for paperwork and utilization management criteria, so physician attestation only in commercial is the majority condition for how they can prescribe Repatha.

And then in the Medicare Part D space, obviously, that’s a new event for us, because we were mid-cycle when we lowered the price with the introduction of the low-list price. So, it’s really something we’re excited about as an accelerating potential for Repatha, as was mentioned, roughly 70% of Medicare Part D lives now have access to Repatha at an affordable co-pay. So, we’re looking forward to seeing sustained growth going forward. Our teams are ready, and I was just with our sales forces in Dallas and everybody is pretty excited about being able to treat more patients quite frankly the way they should have been treated all along.

Operator

And our next question is from the line of Geoffrey Porges from SVB Leerink. Geoffrey?

Geoffrey Porges — SVB Leerink — Analyst

Thank you very much for taking the question. A quick housekeeping and then one for Murdo. First, could you just give us an update, Dave, on where the C5 biosimilar program is? Is that still active? And then for Murdo, I’m impressed with the EVENITY number, you’re annualizing it sort of $350 million already, which I think is better than most of us anticipated. Could you talk a little bit about the reception you’re receiving and whether you really think this can become FORTEO’s, obviously, losing its exclusivity, can it become a FORTEO-like brand given what you’re seeing already? Thanks.

David M. Reese — Executive Vice President, Research and Development

Yeah. Geoff, so I’ll take the first part of that question relating to ABP 959 or Soliris biosimilar, the Phase 3 is actively enrolling and we’ll provide guidance as we come to the conclusion of that trial when you can expect to see data.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yeah. And Geoffrey, thanks for the question on of EVENITY. We are pleased with the launch trajectory on EVENITY, it’s reflective really of two markets, Japan and US primarily. The Japanese launch has been nothing short of a resounding success out there with our partners, Astellas and UCB, I think physician reception has been excellent. We positioned the product for post-fracture high-risk patients. And I think that that’s gone really well and it’s where the risk-benefit equation seems to be one that most physicians are accepting off. And we’ve done the same thing in the US, our launch is a little younger in the US, but nonetheless the trajectory has exceeded our own expectations as well.

We just recently got our permanent J code in the US and that’s opening up the prescriber base as well. So, I do think that we will have a very successful franchise on our hands and, of course, UCB will be commercializing with some help from us across Europe, thanks to the approval with the EMA there.

So overall, whether — will it be as big as a FORTEO, that remains to be seen. We are — I will remind you slightly less expensive 30% on the low-end, as much as 70% on the high end than our competitors in the category. It’s a 12-month duration, so it’s not a product that you take for multiple years, it’s a 12-month duration, but the new patient acquisition is clearly exciting.

Operator

And our next question is from the line of Alethia Young from Cantor Fitzgerald. Alethia?

Alethia Young — Cantor Fitzgerald — Analyst

Hey, guys. Thanks for taking my question. I guess, Parsabiv is another drug that’s been doing quite well in spite of Sensipar. So maybe can you talk about, should we expect continued kind of unit demand growth? I know you probably had some contracting, obviously, over the prior 12 months. But just maybe help us frame how to think about the next 12 months for Parsabiv? Thanks.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yeah. Thanks, Alethia. The Parsabiv performance last year was fantastic. There are a number of patients who are benefiting from it. There is a change in reimbursement for Parsabiv going into — coming into 2020 that may slow the rate of growth a little, but the range of possible outcomes is broad and it’s really too early to call.

Robert A. Bradway — Chairman and Chief Executive Officer

Okay. Ian, I think we’ve got two more calls. Why don’t we try to get them and then we’ll wrap up.

Operator

Very well. Our next question is from the line of Salim Syed from Mizuho Securities. Salim?

Salim Syed — Mizuho Securities — Analyst

Yes. Hi. Thanks, guys, for taking the question. Just one for me on omecamtiv. David, you mentioned that the landscape will be changing, you believe, based on some of the recent data. And, I guess, what I was looking for some clarity on, when I presume you’re talking about the SGLT2 space, specifically dapagliflozin. And then from the commentary you provide, are you envisioning this to be — omecamtiv to be on top of SGLT2s or competing at the head? And if there is any SGLT2 patients actually getting enrolled in the trial? Thank you.

David M. Reese — Executive Vice President, Research and Development

Yeah. Thanks, Salim. Yeah. So I was making reference to the SGLT2s, in particular. Our sense is that, the patients treated in those studies were probably a somewhat less sick population. So that may be a point of differentiation. And then as we have intended all along with omecamtiv, given the lack of drug-drug interactions that we’ve seen now in the mechanism of action, it is intended to be an add-on to other therapies. Of course, in the Phase 3 trial, we will look at number of patients who are receiving things such as SGLT2s in the study.

Robert A. Bradway — Chairman and Chief Executive Officer

Okay. Let’s get the last question.

Operator

And our final question is from the line of Cory Kasimov from J.P. Morgan. Cory?

Gavin Scott — J.P. Morgan — Analyst

Hi, this is Gavin on for Cory. Thanks for fitting us in. And I apologize if you answered this, but we are wondering what your assumptions are going into the double-digit growth for Otezla? Does this imply label expansion or is this just with the existing label and/or any comment on competitive concerns?

Robert A. Bradway — Chairman and Chief Executive Officer

And I think we’ve addressed that. But why don’t we just reiterate for you, Gavin, what we think is behind that.

Murdo Gordon — Executive Vice President, Global Commercial Operations

Yeah. So we are assuming that we would secure additional indications in our assumption for double-digit going forward. We’re also using historical growth rate and where we’re sourcing new patients right now. So I think that’s pretty clear.

Robert A. Bradway — Chairman and Chief Executive Officer

Okay, everyone, thanks for your patience. Sorry, we went a little bit past the allotted hour. But let me just conclude by saying that we feel good about where we ended in 2019, managing through what was always going to be a transition year for us, and we think we’re on the cusp now of a period of new product revenue growth. So we look forward to that. And we look forward as well to the important clinical data that is expected, particularly toward the second half of this year.

So, I’d be remiss if I didn’t just take a moment to thank, as well the Amgen staff around the world, who continue to work so hard every day to deliver on our mission to serve patients. So, thank you to them. And we look forward to having a chance to talk to all of you in April after the first quarter. Thanks.

Arvind Sood — Vice President of Investor Relations

Thanks, Bob. Thanks, everybody, for your participation. If you have any other questions you would like to cover, of course, myself, and the rest of the IR team will be around for several hours. Have a good day.

Operator

(Operator Closing Remarks)

Duration: 77 minutes

Call participants:

Arvind Sood — Vice President of Investor Relations

Robert A. Bradway — Chairman and Chief Executive Officer

Peter Griffith — Executive Vice President and Chief Financial Officer

Murdo Gordon — Executive Vice President, Global Commercial Operations

David M. Reese — Executive Vice President, Research and Development

Jay Olson — Oppenheimer & Co. — Analyst

Michael Yee — Jefferies & Company — Analyst

Christopher Raymond — Piper Sandler — Analyst

Brian Skorney — Robert W. Baird & Co. — Analyst

Evan Seigerman — Credit Suisse — Analyst

Kennen MacKay — RBC Capital Markets — Analyst

Umer Raffat — Evercore ISI — Analyst

Robyn Karnauskas — SunTrust Robinson Humphrey — Analyst

Terence Flynn — Goldman Sachs — Analyst

Ronny Gal — Sanford C. Bernstein — Analyst

Mohit Bansal — Citigroup — Analyst

Matthew Harrison — Morgan Stanley — Analyst

Do Kim — BMO Capital Markets — Analyst

Yaron Werber — Cowen & Company — Analyst

Geoffrey Porges — SVB Leerink — Analyst

Alethia Young — Cantor Fitzgerald — Analyst

Salim Syed — Mizuho Securities — Analyst

Gavin Scott — J.P. Morgan — Analyst

More AMGN analysis

All earnings call transcripts

PRINCETON, N.J .– (FILO DI AFFARI) – Bristol-Myers Squibb Company (NYSE: BMY) ha annunciato oggi che la società ha ritirato la sua domanda nell'Unione europea (UE) per la combinazione di Opdivo (nivolumab) e Yervoy (ipilimumab) per il trattamento del carcinoma polmonare avanzato non a piccole cellule (NSCLC) in base ai dati di CheckMate -227. La domanda è stata originariamente presentata nel 2018 per i pazienti con NSCLC di prima linea che presentavano un carico mutazionale tumorale ≥10 mutazioni / megabase, in base all'analisi finale della sopravvivenza libera da progressione, un endpoint co-primario nello studio. L'applicazione è stata successivamente modificata per includere il risultato statisticamente significativo della sopravvivenza globale, un endpoint co-primario, da CheckMate -227 Parte 1a valutazione Opdivo più Yervoy contro la chemioterapia in pazienti i cui tumori esprimevano PD-L1 ≥1%.

Sebbene il comitato per i medicinali per uso umano (CHMP) abbia riconosciuto l'integrità dei dati a livello di paziente, il CHMP ha stabilito che una valutazione completa dell'applicazione non era possibile a seguito di molteplici cambiamenti di protocollo apportati dalla società in risposta a dati e scienza in rapida evoluzione. La società non ha in programma di respingere questa domanda nell'UE.

“CheckMate -227 è un solido studio di Fase 3 su oltre 1.700 pazienti. Opdivo più Yervoy dimostrato a beneficio di sopravvivenza globale statisticamente e clinicamente significativo rispetto alla chemioterapia per i pazienti con NSCLC di prima linea. Il beneficio di sopravvivenza durevole riscontrato in CheckMate -227 è un risultato importante per i pazienti e siamo delusi dalla posizione del CHMP “, ha dichiarato Samit Hirawat, M.D., Chief Medical Officer, Bristol-Myers Squibb.

Nel gennaio 2020, la Food and Drug Administration degli Stati Uniti ha concesso una revisione prioritaria per la combinazione di Opdivo e Yervoy per il trattamento del NSCLC di prima linea basato sui dati della Parte 1 dello studio di Fase 3 CheckMate -227.

Inoltre, la società prevede di presentare domande negli Stati Uniti, in Europa e in altri mercati a seguito dei risultati intermedi positivi di CheckMate -9LA per la combinazione di Opdivo più Yervoy somministrato in concomitanza con un ciclo limitato di chemioterapia per il trattamento di prima linea di NSCLC. I risultati di CheckMate -227 e CheckMate -9LA si basano sui vantaggi stabiliti dalla combinazione di Opdivo più Yervoy ha precedentemente mostrato nel melanoma di prima linea e nel carcinoma a cellule renali.

“I pazienti con carcinoma polmonare dovrebbero avere accesso a nuove terapie innovative che offrono la promessa di una sopravvivenza globale a lungo termine. Stiamo continuando a far avanzare la nostra domanda negli Stati Uniti per CheckMate -227 e stiamo pianificando di archiviare i dati di CheckMate -9LA nei mercati di tutto il mondo per aiutare a rispondere al grave bisogno insoddisfatto del cancro del polmone di prima linea “, ha affermato Hirawat.

Informazioni su CheckMate -227

CheckMate -227 è una valutazione di prova di fase 3 in più parti in aperto Opdivoregimi a base vs chemioterapia con doppietta di platino in pazienti con NSCLC avanzato di prima linea attraverso istologie tumorali non squamose e squamose:

• Parte 1:

  • Parte 1a: Opdivo più Yervoy o Opdivo monoterapia contro chemioterapia in pazienti i cui tumori esprimono PD-L1

  • Parte 1b: Opdivo più Yervoy o Opdivo più la chemioterapia rispetto alla chemioterapia in pazienti i cui tumori non esprimono PD-L1

• Parte 2: Opdivo più chemioterapia contro chemioterapia, indipendentemente da PD-L1

Esistono due endpoint co-primari nella Parte 1 per Opdivo più Yervoy (contro la chemioterapia): sopravvivenza globale (OS) in pazienti i cui tumori esprimono PD-L1 (valutato in pazienti arruolati nella Parte 1a) e sopravvivenza libera da progressione (PFS) in pazienti con TMB ≥10 mut / Mb attraverso lo spettro PD-L1 (valutato in pazienti arruolati nelle parti 1a e 1b). La parte 1 ha incontrato entrambi i suoi endpoint co-primari di PFS con Opdivo più Yervoy combinazione rispetto a chemioterapia in pazienti con tumori con TMB elevata (≥10 mutazioni / megabase, mut / mb), indipendentemente dall'espressione di PD-L1 e OS che dimostra un beneficio superiore per Opdivo più Yervoy contro la chemioterapia nei pazienti con NSCLC di prima linea i cui tumori esprimono PD-L1 ≥1%. La parte 2 non ha raggiunto il suo endpoint primario per OS per Opdivo più la chemioterapia rispetto alla sola chemioterapia, in pazienti con NSCLC non squamoso.

Informazioni sul cancro al polmone

Il cancro al polmone è la principale causa di decessi per cancro a livello globale. I due principali tipi di carcinoma polmonare sono non a piccole e piccole cellule. Il carcinoma polmonare non a piccole cellule (NSCLC) è uno dei tipi più comuni di carcinoma polmonare e rappresenta fino all'85% delle diagnosi. I tassi di sopravvivenza variano a seconda dello stadio e del tipo di tumore quando diagnosticato. Per i pazienti con diagnosi di carcinoma polmonare metastatico, il tasso di sopravvivenza a cinque anni è di circa il 5%.

Bristol-Myers Squibb: Advancing Oncology Research

Alla Bristol-Myers Squibb, i pazienti sono al centro di tutto ciò che facciamo. L'obiettivo della nostra ricerca è aumentare la qualità, la sopravvivenza a lungo termine per i pazienti e rendere possibile la cura. Attraverso un approccio multidisciplinare unico basato sulla scienza traslazionale, sfruttiamo la nostra profonda esperienza scientifica nella ricerca oncologica e di immuno-oncologia (I-O) per identificare nuovi trattamenti su misura per le esigenze dei singoli pazienti. I nostri ricercatori stanno sviluppando una pipeline diversificata, appositamente progettata, progettata per colpire diverse vie del sistema immunitario e affrontare le interazioni complesse e specifiche tra il tumore, il suo microambiente e il sistema immunitario. Forniamo innovazione internamente e in collaborazione con il mondo accademico, il governo, i gruppi di patrocinio e le società di biotecnologia, per contribuire a rendere la promessa di medicinali trasformativi, come l'I-O, una realtà per i pazienti.

Di Opdivo

Opdivo è un inibitore del checkpoint immunitario programmato per la morte-1 (PD-1) progettato per sfruttare in modo univoco il sistema immunitario del corpo e contribuire a ripristinare la risposta immunitaria antitumorale. Sfruttando il sistema immunitario del corpo per combattere il cancro, Opdivo è diventata un'opzione di trattamento importante per più tumori.

OpdivoIl principale programma di sviluppo globale si basa sulle competenze scientifiche di Bristol-Myers Squibb nel campo dell'immuno-oncologia e comprende una vasta gamma di studi clinici in tutte le fasi, compresa la fase 3, in una varietà di tipi di tumore. Ad oggi, il Opdivo il programma di sviluppo clinico ha curato oltre 35.000 pazienti. Il Opdivo gli studi hanno contribuito a comprendere meglio il potenziale ruolo dei biomarcatori nella cura dei pazienti, in particolare per quanto riguarda i benefici dei pazienti Opdivo attraverso il continuum dell'espressione PD-L1.

Nel luglio 2014, Opdivo è stato il primo inibitore del checkpoint immunitario PD-1 a ricevere l'approvazione normativa in qualsiasi parte del mondo. Opdivo è attualmente approvato in oltre 65 paesi, tra cui Stati Uniti, Unione Europea, Giappone e Cina. Nell'ottobre 2015, la società Opdivo e Yervoy il regime di combinazione è stata la prima combinazione di Immuno-Oncologia a ricevere l'approvazione normativa per il trattamento del melanoma metastatico ed è attualmente approvata in oltre 50 paesi, tra cui gli Stati Uniti e l'Unione europea.

INDICAZIONI APPROVATE DALLA FDA USA PER OPDIVO^®

OPDIVO^® (nivolumab) come singolo agente è indicato per il trattamento di pazienti con melanoma non resecabile o metastatico.

OPDIVO^® (nivolumab), in combinazione con YERVOY^® (ipilimumab), è indicato per il trattamento di pazienti con melanoma non resecabile o metastatico.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma polmonare metastatico non a piccole cellule (NSCLC) con progressione su o dopo chemioterapia a base di platino. I pazienti con aberrazioni del tumore genomico EGFR o ALK devono presentare una progressione della malattia in terapia approvata dalla FDA per queste aberrazioni prima di ricevere OPDIVO.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma polmonare metastatico a piccole cellule (SCLC) con progressione dopo chemioterapia a base di platino e almeno un'altra linea di terapia. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta complessivo e alla durata della risposta. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma a cellule renali avanzato (RCC) che hanno ricevuto una precedente terapia anti-angiogenica.

OPDIVO^® (nivolumab), in combinazione con YERVOY^® (ipilimumab), è indicato per il trattamento di pazienti con carcinoma renale avanzato (RCC) avanzato o non trattato, con rischio intermedio o scarso.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti adulti con linfoma di Hodgkin classico (cHL) recidivato o progredito dopo trapianto autologo di cellule staminali ematopoietiche (HSCT) e brentuximab vedotin o dopo 3 o più linee di terapia sistemica che comprende HSCT autologo. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta globale. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma a cellule squamose ricorrente o metastatico della testa e del collo (SCCHN) con progressione della malattia durante o dopo la terapia a base di platino.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma uroteliale localmente avanzato o metastatico che hanno progressione della malattia durante o dopo chemioterapia contenente platino o hanno progressione della malattia entro 12 mesi dal trattamento neoadiuvante o adiuvante con chemioterapia contenente platino. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta del tumore e alla durata della risposta. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab), come singolo agente, è indicato per il trattamento di pazienti adulti e pediatrici (di età pari o superiore a 12 anni) con carcinoma del colon-retto metastatico metastatico (dMMR) con instabilità microsatellite-elevata (MSI-H) o con mancata riparazione (dMMR) sono progrediti dopo il trattamento con fluoropirimidina, oxaliplatino e irinotecan. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta complessivo e alla durata della risposta. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab), in combinazione con YERVOY^® (ipilimumab), è indicato per il trattamento di pazienti adulti e pediatrici di età pari o superiore a 12 anni con carcinoma del colon-retto metastatico (CRM) con deficit di riparazione del microsatellite (MSI-H) o di mancata corrispondenza (dMMR) che è progredito a seguito del trattamento con fluoropirimidina, oxaliplatino e irinotecan. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta complessivo e alla durata della risposta. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab) è indicato per il trattamento di pazienti con carcinoma epatocellulare (HCC) che sono stati precedentemente trattati con sorafenib. Questa indicazione è approvata con approvazione accelerata in base al tasso di risposta del tumore e alla durata della risposta. L'approvazione continua per questa indicazione può dipendere dalla verifica e dalla descrizione del beneficio clinico negli studi di conferma.

OPDIVO^® (nivolumab) è indicato per il trattamento adiuvante di pazienti con melanoma con coinvolgimento di linfonodi o malattie metastatiche che sono stati sottoposti a resezione completa.

Di Yervoy

Yervoy è un anticorpo monoclonale umano ricombinante che si lega all'antigene-4 associato ai linfociti T citotossici (CTLA-4). CTLA-4 è un regolatore negativo dell'attività delle cellule T. Yervoy si lega a CTLA-4 e blocca l'interazione di CTLA-4 con i suoi ligandi, CD80 / CD86. È stato dimostrato che il blocco di CTLA-4 aumenta l'attivazione e la proliferazione delle cellule T, inclusa l'attivazione e la proliferazione di cellule T-effettrici infiltranti il ​​tumore. L'inibizione della segnalazione CTLA-4 può anche ridurre la funzione delle cellule T regolatorie, il che può contribuire ad un aumento generale della risposta delle cellule T, inclusa la risposta immunitaria antitumorale. Il 25 marzo 2011, la Food and Drug Administration (FDA) degli Stati Uniti ha approvato Yervoy Monoterapia da 3 mg / kg per pazienti con melanoma non resecabile o metastatico. Yervoy è approvato per melanoma non resecabile o metastatico in oltre 50 paesi. Esiste un ampio programma di sviluppo in corso per Yervoy che abbraccia più tipi di tumore.

Indicazioni e importanti informazioni sulla sicurezza per YERVOY^® (Ipilimumab)

indicazioni

YERVOY® (ipilimumab) è indicato per il trattamento del melanoma non resecabile o metastatico negli adulti e nei pazienti pediatrici (dai 12 anni in poi).

YERVOY® (ipilimumab) è indicato per il trattamento adiuvante di pazienti con melanoma cutaneo con coinvolgimento patologico di linfonodi regionali di oltre 1 mm sottoposti a resezione completa, inclusa linfoadenectomia totale.

IMPORTANTI INFORMAZIONI SULLA SICUREZZA

ATTENZIONE: REAZIONI AVVERSE MEDIE IMMUNITE

YERVOY può provocare reazioni avverse immuno-mediate gravi e fatali. Queste reazioni immuno-mediate possono coinvolgere qualsiasi sistema di organi; tuttavia, le reazioni avverse immunomediate gravi più comuni sono enterocolite, epatite, dermatite (inclusa necrolisi epidermica tossica), neuropatia ed endocrinopatia. La maggior parte di queste reazioni immuno-mediate si è manifestata inizialmente durante il trattamento; tuttavia, una minoranza si è verificata settimane o mesi dopo l'interruzione di YERVOY.

Valutare i pazienti per segni e sintomi di enterocolite, dermatite, neuropatia ed endocrinopatia e valutare le sostanze chimiche cliniche tra cui test di funzionalità epatica (LFT), livello di ormone adrenocorticotropico (ACTH) e test di funzionalità tiroidea, al basale e prima di ogni dose.

Interrompere permanentemente YERVOY e iniziare la terapia sistemica con corticosteroidi ad alte dosi per gravi reazioni immuno-mediate.

Polmonite immuno-mediata

OPDIVO può causare polmonite immuno-mediata. Sono stati segnalati casi fatali. Monitorare i pazienti per segni con imaging radiografico e per sintomi di polmonite. Somministrare corticosteroidi per polmonite di grado 2 o più grave. Interrompere permanentemente per il Grado 3 o 4 e sospendere fino alla risoluzione per il Grado 2. Nei pazienti in trattamento con monoterapia OPDIVO si sono verificati casi fatali di polmonite immuno-mediata. La polmonite immunomediata si è verificata nel 3,1% (61/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, la polmonite immuno-mediata si è verificata nel 6% (25/407) dei pazienti. Nei pazienti con carcinoma a cellule renali trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, la polmonite immuno-mediata si è verificata nel 4,4% (24/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, la polmonite immuno-mediata si è verificata nell'1,7% (2/119) dei pazienti.

In Checkmate 205 e 039, la polmonite, inclusa la malattia polmonare interstiziale, si è verificata nel 6,0% (16/266) dei pazienti trattati con OPDIVO. La polmonite immunomediata si è verificata nel 4,9% (13/266) dei pazienti trattati con OPDIVO: Grado 3 (n = 1) e Grado 2 (n = 12).

Colite immuno-mediata

OPDIVO può causare colite immuno-mediata. Monitorare i pazienti per segni e sintomi di colite. Somministrare corticosteroidi per grado 2 (di durata superiore a 5 giorni), 3 o 4 coliti. Sospendere la monoterapia con OPDIVO per il Grado 2 o 3 e interrompere definitivamente per il Grado 4 o la colite ricorrente dopo la ripresa di OPDIVO. Quando somministrato con YERVOY, sospendere OPDIVO e YERVOY per il grado 2 e interrompere definitivamente per il grado 3 o 4 o colite ricorrente. Nei pazienti in terapia con OPDIVO in monoterapia, la colite immuno-mediata si è verificata nel 2,9% (58/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, la colite immuno-mediata si è verificata nel 26% (107/407) dei pazienti, inclusi tre casi fatali. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si è verificata una colite immuno-mediata nel 10% (52/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, la colite immuno-mediata si è verificata nel 7% (8/119) dei pazienti.

In uno studio di fase 3 separato su YERVOY 3 mg / kg, si è verificata enterocolite immuno-mediata grave, grave, pericolosa per la vita o fatale (diarrea di ≥7 feci al di sopra del basale, febbre, ileo, segni peritoneali; grado 3-5) 7%) pazienti. In tutti i pazienti trattati con YERVOY in quello studio (n = 511), 5 (1%) hanno sviluppato perforazione intestinale, 4 (0,8%) sono deceduti a causa di complicanze e 26 (5%) sono stati ricoverati in ospedale per grave enterocolite.

Epatite immuno-mediata

OPDIVO può causare epatite immuno-mediata. Monitorare i pazienti per esami del fegato anormali prima e periodicamente durante il trattamento. Somministrare corticosteroidi per aumenti delle transaminasi di grado 2 o superiori. Per i pazienti senza HCC, trattenere OPDIVO per il grado 2 e interrompere definitivamente OPDIVO per il grado 3 o 4. Per i pazienti con HCC, trattenere OPDIVO e somministrare corticosteroidi se l'AST / ALT rientra nei limiti normali al basale e aumenta fino a> 3 e fino a 5 volte il limite superiore del normale (ULN), se AST / ALT è> 1 e fino a 3 volte ULN al basale e aumenta a> 5 e fino a 10 volte ULN, e se AST / ALT è> 3 e fino a 5 volte ULN al basale e aumenta a> 8 e fino a 10 volte l'ULN. Interrompere definitivamente OPDIVO e somministrare corticosteroidi se AST o ALT aumentano a> 10 volte l'ULN o la bilirubina totale aumenta> 3 volte l'ULN. Nei pazienti in terapia con OPDIVO in monoterapia, l'epatite immuno-mediata si è verificata nell'1,8% (35/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, l'epatite immuno-mediata si è verificata nel 13% (51/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, l'epatite immuno-mediata si è verificata nel 7% (38/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, l'epatite immuno-mediata si è verificata nell'8% (10/119) dei pazienti.

In Checkmate 040, l'epatite immuno-mediata che richiede corticosteroidi sistemici si è verificata nel 5% (8/154) dei pazienti trattati con OPDIVO.

In uno studio di fase 3 separato su YERVOY 3 mg / kg, si è verificata un'epatotossicità grave, pericolosa per la vita o fatale (aumenti di AST o ALT> 5 volte l'ULN o aumenti di bilirubina totale> 3 volte l'ULN; grado 3-5) in 8 (2 %) pazienti, con insufficienza epatica fatale nello 0,2% e ricovero in ospedale nello 0,4%.

Neuropatie immuno-mediate

In uno studio di fase 3 separato su YERVOY 3 mg / kg, sono stati riportati 1 caso di sindrome di Guillain-Barré fatale e 1 caso di neuropatia motoria periferica grave (grado 3).

Endocrinopatie immuno-mediate

OPDIVO può causare ipofisite immuno-mediata, insufficienza surrenalica immuno-mediata, disturbi autoimmuni della tiroide e diabete mellito di tipo 1. Monitorare i pazienti per segni e sintomi di ipofisite, segni e sintomi di insufficienza surrenalica, funzionalità tiroidea prima e periodicamente durante il trattamento e iperglicemia. Somministrare la sostituzione ormonale come indicato clinicamente e corticosteroidi per ipofisite di grado 2 o superiore. Trattenere per Grado 2 o 3 e interrompere definitivamente per ipofisite di Grado 4. Somministrare corticosteroidi per insufficienza surrenalica di grado 3 o 4. Trattenere per il grado 2 e interrompere definitivamente per l'insufficienza surrenalica di grado 3 o 4. Somministrare la terapia ormonale sostitutiva per l'ipotiroidismo. Avviare la gestione medica per il controllo dell'ipertiroidismo. Sospendere OPDIVO per Grado 3 e interrompere definitivamente per iperglicemia di Grado 4.

Nei pazienti in terapia con OPDIVO in monoterapia, l'ipofisite si è verificata nello 0,6% (12/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, si è verificata ipofisite nel 9% (36/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si è verificata ipofisite nel 4,6% (25/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si è verificata ipofisite immuno-mediata nel 3,4% (4/119) dei pazienti. Nei pazienti in terapia con OPDIVO in monoterapia, l'insufficienza surrenalica si è verificata nell'1% (20/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, l'insufficienza surrenalica si è verificata nel 5% (21/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, l'insufficienza surrenalica si è verificata nel 7% (41/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, l'insufficienza surrenalica si è verificata nel 5,9% (7/119) dei pazienti. Nei pazienti in terapia con OPDIVO in monoterapia, l'ipotiroidismo o la tiroidite con conseguente ipotiroidismo si sono verificati nel 9% (171/1994) dei pazienti. L'ipertiroidismo si è verificato nel 2,7% (54/1994) dei pazienti in terapia con OPDIVO in monoterapia. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, l'ipotiroidismo o la tiroidite con conseguente ipotiroidismo si sono verificati nel 22% (89/407) dei pazienti. L'ipertiroidismo si è verificato nell'8% (34/407) dei pazienti che hanno ricevuto questa dose di OPDIVO con YERVOY. Nei pazienti con CCR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si sono verificati ipotiroidismo o tiroidite con conseguente ipotiroidismo nel 22% (119/547) dei pazienti. L'ipertiroidismo si è verificato nel 12% (66/547) dei pazienti che hanno ricevuto questa dose di OPDIVO con YERVOY. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, ipotiroidismo o tiroidite con conseguente ipotiroidismo si sono verificati nel 15% (18/119) dei pazienti. L'ipertiroidismo si è verificato nel 12% (14/119) dei pazienti. Nei pazienti in terapia con OPDIVO in monoterapia, il diabete si è verificato nello 0,9% (17/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, il diabete si è verificato nell'1,5% (6/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, il diabete si è verificato nel 2,7% (15/547) dei pazienti.

In uno studio di fase 3 separato su YERVOY 3 mg / kg, endocrinopatie immuno-mediate gravi o potenzialmente letali (che richiedono ospedalizzazione, intervento medico urgente o interferenze con le attività della vita quotidiana; Grado 3-4) si sono verificate in 9 (1,8%) pazienti. Tutti e 9 i pazienti presentavano ipopituitarismo e alcuni avevano endocrinopatie concomitanti aggiuntive come insufficienza surrenalica, ipogonadismo e ipotiroidismo. Sei dei 9 pazienti sono stati ricoverati in ospedale per gravi endocrinopatie.

Nefrite immuno-mediata e disfunzione renale

OPDIVO può causare nefrite immuno-mediata. Monitorare i pazienti per aumento della creatinina sierica prima e periodicamente durante il trattamento. Somministrare corticosteroidi per aumento della creatinina sierica di grado 2-4. Sospendere OPDIVO per Grado 2 o 3 e interrompere definitivamente per aumento della creatinina sierica di Grado 4. Nei pazienti in terapia con OPDIVO in monoterapia, nefrite immuno-mediata e disfunzione renale si sono verificate nell'1,2% (23/1994) dei pazienti. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, la nefrite immuno-mediata e la disfunzione renale si sono verificate nel 2,2% (9/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, nefrite immuno-mediata e disfunzione renale si sono verificate nel 4,6% (25/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, nefrite immuno-mediata e disfunzione renale si sono verificate nell'1,7% (2/119) dei pazienti.

Dermatite e reazioni avverse cutanee immuno-mediate

OPDIVO può causare eruzione cutanea immuno-mediata, inclusa la sindrome di Stevens-Johnson (SJS) e la necrolisi epidermica tossica (TEN), alcuni casi con esito fatale. Somministrare corticosteroidi per eruzioni cutanee di grado 3 o 4. Trattenere per il grado 3 e interrompere definitivamente per l'eruzione di grado 4. Per sintomi o segni di SJS o TEN, sospendere OPDIVO e rivolgersi al paziente per cure specialistiche per la valutazione e il trattamento; se confermato, interrompere definitivamente. Nei pazienti in terapia con OPDIVO in monoterapia, nel 9% (171/1994) dei pazienti si è verificata un'eruzione immunomediata. Nei pazienti trattati con OPDIVO 1 mg / kg con YERVOY 3 mg / kg, si è verificata un'eruzione immunomediata nel 22,6% (92/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si è verificata un'eruzione cutanea immuno-mediata nel 16% (90/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si è verificata un'eruzione cutanea immuno-mediata nel 14% (17/119) dei pazienti.

In uno studio di fase 3 separato su YERVOY 3 mg / kg, dermatite immunomediata grave, pericolosa per la vita o fatale (ad es. Sindrome di Stevens-Johnson, necrolisi epidermica tossica o eruzione cutanea complicata da ulcerazione cutanea a tutto spessore o necrotica, bollosa o manifestazioni emorragiche; Grado 3-5) si sono verificati in 13 (2,5%) pazienti. 1 (0,2%) paziente è deceduto a causa di necrolisi epidermica tossica. 1 paziente aggiuntivo ha richiesto il ricovero per dermatite grave.

Encefalite immuno-mediata

OPDIVO può causare encefalite immuno-mediata. La valutazione dei pazienti con sintomi neurologici può includere, ma non solo, la consultazione con un neurologo, una risonanza magnetica cerebrale e una puntura lombare. Trattenere OPDIVO in pazienti con segni o sintomi neurologici di nuova insorgenza da moderati a gravi e valutare di escludere altre cause. Se si escludono altre eziologie, somministrare corticosteroidi e interrompere definitivamente OPDIVO per l'encefalite immuno-mediata. Nei pazienti in terapia con OPDIVO in monoterapia, l'encefalite si è verificata nello 0,2% (3/1994) dei pazienti. L'encefalite limbica fatale si è verificata in un paziente dopo 7,2 mesi di esposizione nonostante l'interruzione di OPDIVO e la somministrazione di corticosteroidi. L'encefalite si è verificata in un paziente in trattamento con OPDIVO 1 mg / kg con YERVOY 3 mg / kg (0,2%) dopo 1,7 mesi di esposizione. L'encefalite si è verificata in un paziente con RCC in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg (0,2%) dopo circa 4 mesi di esposizione. L'encefalite si è verificata in un paziente mCRC MSI-H / dMMR (0,8%) in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg dopo 15 giorni di esposizione.

Altre reazioni avverse immuno-mediate

In base alla gravità della reazione avversa, interrompere definitivamente o sospendere OPDIVO, somministrare corticosteroidi ad alte dosi e, se appropriato, iniziare la terapia ormonale sostitutiva. Attraverso studi clinici con OPDIVO in monoterapia o in combinazione con YERVOY, le seguenti reazioni avverse immuno-mediate clinicamente significative, alcune con esito fatale, si sono verificate in <1,0% dei pazienti trattati con OPDIVO: miocardite, rabdomiolisi, miosite, uveite, irite, pancreatite, viso e abducens paresi nervosa, demielinizzazione, polimialgia reumatica, neuropatia autoimmune, sindrome di Guillain-Barré, ipopituitarismo, sindrome da risposta infiammatoria sistemica, gastrite, duodenite, sarcoidosi, necrotizzazione istiocitica e linfoadenite, disfunzione di carcinoma, disfunzione motoria, disfunzione, carenza sindrome miastenica.

Se l'uveite si verifica in combinazione con altre reazioni avverse immuno-mediate, prendere in considerazione una sindrome simile a Vogt-Koyanagi-Harada, che è stata osservata in pazienti in trattamento con OPDIVO e potrebbe richiedere un trattamento con steroidi sistemici per ridurre il rischio di perdita permanente della vista.

Reazioni all'infusione

OPDIVO può causare gravi reazioni all'infusione, che sono state riportate in <1,0% dei pazienti negli studi clinici. Interrompere OPDIVO in pazienti con reazioni all'infusione di grado 3 o 4. Interrompere o rallentare la velocità di infusione nei pazienti con Grado 1 o 2. Nei pazienti trattati con OPDIVO in monoterapia come infusione di 60 minuti, nel 6,4% (127/1994) dei pazienti si sono verificate reazioni correlate all'infusione. In uno studio separato in cui i pazienti hanno ricevuto OPDIVO in monoterapia come infusione di 60 minuti o infusione di 30 minuti, si sono verificate reazioni correlate all'infusione rispettivamente nel 2,2% (8/368) e nel 2,7% (10/369) dei pazienti. Inoltre, lo 0,5% (2/368) e l'1,4% (5/369) dei pazienti, rispettivamente, hanno manifestato reazioni avverse entro 48 ore dall'infusione che hanno portato a ritardo nella dose, interruzione permanente o sospensione di OPDIVO. Nei pazienti in trattamento con OPDIVO 1 mg / kg con YERVOY 3 mg / kg ogni 3 settimane, si sono verificate reazioni correlate all'infusione nel 2,5% (10/407) dei pazienti. Nei pazienti con carcinoma renale in trattamento con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, si sono verificate reazioni correlate all'infusione nel 5,1% (28/547) dei pazienti. Nei pazienti con mCRC MSI-H / dMMR trattati con OPDIVO 3 mg / kg con YERVOY 1 mg / kg, nel 4,2% (5/119) dei pazienti si sono verificate reazioni correlate all'infusione.

Complicanze del trapianto di cellule staminali ematopoietiche alogene

Complicazioni fatali e altre gravi possono verificarsi in pazienti sottoposti a trapianto allogenico di cellule staminali ematopoietiche (HSCT) prima o dopo il trattamento con un anticorpo bloccante il recettore PD-1. Le complicanze correlate al trapianto comprendono la malattia da trapianto iperacuta contro l'ospite (GVHD), la GVHD acuta, la GVHD cronica, la malattia veno-occlusiva epatica (VOD) dopo condizionamento a intensità ridotta e la sindrome febbrile che richiede steroidi (senza una causa infettiva identificata). Queste complicazioni possono verificarsi nonostante la terapia tra blocco PD-1 e HSCT allogenico.

Seguire attentamente i pazienti per l'evidenza di complicanze correlate al trapianto e intervenire prontamente. Considerare i benefici rispetto ai rischi del trattamento con un anticorpo bloccante il recettore PD-1 prima o dopo un HSCT allogenico.

Tossicità embrio-fetale

Sulla base dei loro meccanismi d'azione, OPDIVO e YERVOY possono causare danni al feto quando somministrati a donne in gravidanza. Consiglia alle donne in gravidanza il potenziale rischio per un feto. Consigliare alle donne in età fertile di usare un metodo contraccettivo efficace durante il trattamento con un regime contenente OPDIVO o YERVOY e per almeno 5 mesi dopo l'ultima dose di OPDIVO.

Aumento della mortalità nei pazienti con mieloma multiplo quando OPDIVO viene aggiunto a un analogo talidomide e desametasone

Negli studi clinici su pazienti con mieloma multiplo, l'aggiunta di OPDIVO a un analogo talidomidico più desametasone ha determinato un aumento della mortalità. Il trattamento di pazienti con mieloma multiplo con un anticorpo bloccante PD-1 o PD-L1 in combinazione con un analogo talidomidico più desametasone non è raccomandato al di fuori degli studi clinici controllati.

lattazione

Non è noto se OPDIVO o YERVOY siano presenti nel latte materno. Poiché molti farmaci, compresi gli anticorpi, vengono escreti nel latte materno e a causa della possibilità di gravi reazioni avverse nei lattanti da un regime contenente OPDIVO, si consiglia alle donne di interrompere l'allattamento durante il trattamento. Consigliare alle donne di interrompere l'allattamento durante il trattamento con YERVOY e per 3 mesi dopo la dose finale.

Reazioni avverse gravi

In Checkmate 037, si sono verificate gravi reazioni avverse nel 41% dei pazienti trattati con OPDIVO (n = 268). Le reazioni avverse di grado 3 e 4 si sono verificate nel 42% dei pazienti trattati con OPDIVO. Le reazioni avverse al farmaco di grado 3 e 4 più frequenti riportate nel 2% – <5% dei pazienti trattati con OPDIVO sono state dolore addominale, iponatremia, aumento dell'aspartato aminotransferasi e aumento della lipasi. In Checkmate 066, si sono verificate gravi reazioni avverse nel 36% dei pazienti trattati con OPDIVO (n = 206). Reazioni avverse di grado 3 e 4 si sono verificate nel 41% dei pazienti in trattamento con OPDIVO. Le reazioni avverse di grado 3 e 4 più frequenti riportate in ≥2% dei pazienti trattati con OPDIVO sono state aumento della gamma-glutamiltransferasi (3,9%) e diarrea (3,4%). In Checkmate 067, reazioni avverse gravi (74% e 44%), reazioni avverse che hanno portato alla sospensione permanente (47% e 18%) o a ritardi di dosaggio (58% e 36%) e reazioni avverse di grado 3 o 4 (72% and 51%) all occurred more frequently in the OPDIVO plus YERVOY arm (n=313) relative to the OPDIVO arm (n=313). The most frequent (≥10%) serious adverse reactions in the OPDIVO plus YERVOY arm and the OPDIVO arm, respectively, were diarrhea (13% and 2.2%), colitis (10% and 1.9%), and pyrexia (10% and 1.0%). In Checkmate 017 and 057, serious adverse reactions occurred in 46% of patients receiving OPDIVO (n=418). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were pneumonia, pulmonary embolism, dyspnea, pyrexia, pleural effusion, pneumonitis, and respiratory failure. In Checkmate 032, serious adverse reactions occurred in 45% of patients receiving OPDIVO (n=245). The most frequent serious adverse reactions reported in at least 2% of patients receiving OPDIVO were pneumonia, dyspnea, pneumonitis, pleural effusions, and dehydration. In Checkmate 025, serious adverse reactions occurred in 47% of patients receiving OPDIVO (n=406). The most frequent serious adverse reactions reported in ≥2% of patients were acute kidney injury, pleural effusion, pneumonia, diarrhea, and hypercalcemia. In Checkmate 214, serious adverse reactions occurred in 59% of patients receiving OPDIVO plus YERVOY and in 43% of patients receiving sunitinib. The most frequent serious adverse reactions reported in ≥2% of patients were diarrhea, pyrexia, pneumonia, pneumonitis, hypophysitis, acute kidney injury, dyspnea, adrenal insufficiency, and colitis; in patients treated with sunitinib, they were pneumonia, pleural effusion, and dyspnea. In Checkmate 205 and 039, adverse reactions leading to discontinuation occurred in 7% and dose delays due to adverse reactions occurred in 34% of patients (n=266). Serious adverse reactions occurred in 26% of patients. The most frequent serious adverse reactions reported in ≥1% of patients were pneumonia, infusion-related reaction, pyrexia, colitis or diarrhea, pleural effusion, pneumonitis, and rash. Eleven patients died from causes other than disease progression: 3 from adverse reactions within 30 days of the last OPDIVO dose, 2 from infection 8 to 9 months after completing OPDIVO, and 6 from complications of allogeneic HSCT. In Checkmate 141, serious adverse reactions occurred in 49% of patients receiving OPDIVO (n=236). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were pneumonia, dyspnea, respiratory failure, respiratory tract infection, and sepsis. In Checkmate 275, serious adverse reactions occurred in 54% of patients receiving OPDIVO (n=270). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were urinary tract infection, sepsis, diarrhea, small intestine obstruction, and general physical health deterioration. In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO with YERVOY, serious adverse reactions occurred in 47% of patients. The most frequent serious adverse reactions reported in ≥2% of patients were colitis/diarrhea, hepatic events, abdominal pain, acute kidney injury, pyrexia, and dehydration. In Checkmate 040, serious adverse reactions occurred in 49% of patients (n=154). The most frequent serious adverse reactions reported in ≥2% of patients were pyrexia, ascites, back pain, general physical health deterioration, abdominal pain, and pneumonia. In Checkmate 238, Grade 3 or 4 adverse reactions occurred in 25% of OPDIVO-treated patients (n=452). The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of OPDIVO-treated patients were diarrhea and increased lipase and amylase. Serious adverse reactions occurred in 18% of OPDIVO-treated patients.

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO (n=268) was rash (21%). In Checkmate 066, the most common adverse reactions (≥20%) reported with OPDIVO (n=206) vs dacarbazine (n=205) were fatigue (49% vs 39%), musculoskeletal pain (32% vs 25%), rash (28% vs 12%), and pruritus (23% vs 12%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO plus YERVOY arm (n=313) were fatigue (62%), diarrhea (54%), rash (53%), nausea (44%), pyrexia (40%), pruritus (39%), musculoskeletal pain (32%), vomiting (31%), decreased appetite (29%), cough (27%), headache (26%), dyspnea (24%), upper respiratory tract infection (23%), arthralgia (21%), and increased transaminases (25%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO arm (n=313) were fatigue (59%), rash (40%), musculoskeletal pain (42%), diarrhea (36%), nausea (30%), cough (28%), pruritus (27%), upper respiratory tract infection (22%), decreased appetite (22%), headache (22%), constipation (21%), arthralgia (21%), and vomiting (20%). In Checkmate 017 and 057, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=418) were fatigue, musculoskeletal pain, cough, dyspnea, and decreased appetite. In Checkmate 032, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=245) were fatigue (45%), decreased appetite (27%), musculoskeletal pain (25%), dyspnea (22%), nausea (22%), diarrhea (21%), constipation (20%), and cough (20%). In Checkmate 025, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=406) vs everolimus (n=397) were fatigue (56% vs 57%), cough (34% vs 38%), nausea (28% vs 29%), rash (28% vs 36%), dyspnea (27% vs 31%), diarrhea (25% vs 32%), constipation (23% vs 18%), decreased appetite (23% vs 30%), back pain (21% vs 16%), and arthralgia (20% vs 14%). In Checkmate 214, the most common adverse reactions (≥20%) reported in patients treated with OPDIVO plus YERVOY (n=547) vs sunitinib (n=535) were fatigue (58% vs 69%), rash (39% vs 25%), diarrhea (38% vs 58%), musculoskeletal pain (37% vs 40%), pruritus (33% vs 11%), nausea (30% vs 43%), cough (28% vs 25%), pyrexia (25% vs 17%), arthralgia (23% vs 16%), decreased appetite (21% vs 29%), dyspnea (20% vs 21%), and vomiting (20% vs 28%). In Checkmate 205 and 039, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=266) were upper respiratory tract infection (44%), fatigue (39%), cough (36%), diarrhea (33%), pyrexia (29%), musculoskeletal pain (26%), rash (24%), nausea (20%) and pruritus (20%). In Checkmate 141, the most common adverse reactions (≥10%) in patients receiving OPDIVO (n=236) were cough and dyspnea at a higher incidence than investigator’s choice. In Checkmate 275, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=270) were fatigue (46%), musculoskeletal pain (30%), nausea (22%), and decreased appetite (22%). In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO as a single agent, the most common adverse reactions (≥20%) were fatigue (54%), diarrhea (43%), abdominal pain (34%), nausea (34%), vomiting (28%), musculoskeletal pain (28%), cough (26%), pyrexia (24%), rash (23%), constipation (20%), and upper respiratory tract infection (20%). In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO with YERVOY, the most common adverse reactions (≥20%) were fatigue (49%), diarrhea (45%), pyrexia (36%), musculoskeletal pain (36%), abdominal pain (30%), pruritus (28%), nausea (26%), rash (25%), decreased appetite (20%), and vomiting (20%). In Checkmate 040, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=154) were fatigue (38%), musculoskeletal pain (36%), abdominal pain (34%), pruritus (27%), diarrhea (27%), rash (26%), cough (23%), and decreased appetite (22%). In Checkmate 238, the most common adverse reactions (≥20%) reported in OPDIVO-treated patients (n=452) vs ipilimumab-treated patients (n=453) were fatigue (57% vs 55%), diarrhea (37% vs 55%), rash (35% vs 47%), musculoskeletal pain (32% vs 27%), pruritus (28% vs 37%), headache (23% vs 31%), nausea (23% vs 28%), upper respiratory infection (22% vs 15%), and abdominal pain (21% vs 23%). The most common immune-mediated adverse reactions were rash (16%), diarrhea/colitis (6%), and hepatitis (3%).

In a separate Phase 3 study of YERVOY 3 mg/kg, the most common adverse reactions (≥5%) in patients who received YERVOY at 3 mg/kg were fatigue (41%), diarrhea (32%), pruritus (31%), rash (29%), and colitis (8%).

Recommended Dose Modifications

Interrupt or slow the rate of infusion in patients with mild or moderate infusion reactions. Discontinue in patients with severe or life-threatening infusion reactions.

Endocrine: Withhold YERVOY for symptomatic endocrinopathy. Resume YERVOY in patients with complete or partial resolution of adverse reactions (Grade 0-1) and who are receiving <7.5 mg prednisone or equivalent per day. Permanently discontinue YERVOY for symptomatic reactions lasting 6 weeks or longer or an inability to reduce corticosteroid dose to 7.5 mg prednisone or equivalent per day.

Ophthalmologic: Permanently discontinue YERVOY for Grade 2-4 reactions not improving to Grade 1 within 2 weeks while receiving topical therapy or requiring systemic treatment.

All Other Organ Systems: Withhold YERVOY for Grade 2 adverse reactions. Resume YERVOY in patients with complete or partial resolution of adverse reactions (Grade 0-1) and who are receiving <7.5 mg prednisone or equivalent per day. Permanently discontinue YERVOY for Grade 2 reactions lasting 6 weeks or longer, an inability to reduce corticosteroid dose to 7.5 mg prednisone or equivalent per day, and Grade 3 or 4 adverse reactions.

Immune-Mediated Enterocolitis

Immune-mediated enterocolitis, including fatal cases, can occur with YERVOY. Monitor patients for signs and symptoms of enterocolitis (such as diarrhea, abdominal pain, mucus or blood in stool, with or without fever) and of bowel perforation (such as peritoneal signs and ileus). In symptomatic patients, rule out infectious etiologies and consider endoscopic evaluation for persistent or severe symptoms. Withhold YERVOY for moderate enterocolitis; administer anti-diarrheal treatment and, if persistent for >1 week, initiate systemic corticosteroids (0.5 mg/kg/day prednisone or equivalent). Permanently discontinue YERVOY in patients with severe enterocolitis and initiate systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent). Upon improvement to ≤Grade 1, initiate corticosteroid taper and continue over at least 1 month. In clinical trials, rapid corticosteroid tapering resulted in recurrence or worsening symptoms of enterocolitis in some patients. Consider adding anti-TNF or other immunosuppressant agents for management of immune-mediated enterocolitis unresponsive to systemic corticosteroids within 3-5 days or recurring after symptom improvement, if other causes are excluded. In patients receiving YERVOY 3 mg/kg in MDX010-20, severe, life-threatening, or fatal (diarrhea of ≥7 stools above baseline, fever, ileus, peritoneal signs; Grade 3-5) immune-mediated enterocolitis occurred in 34 YERVOY-treated patients (7%) and moderate (diarrhea with up to 6 stools above baseline, abdominal pain, mucus or blood in stool; Grade 2) enterocolitis occurred in 28 YERVOY-treated patients (5%). Across all YERVOY-treated patients (n=511), 5 (1%) developed intestinal perforation, 4 (0.8%) died as a result of complications, and 26 (5%) were hospitalized for severe enterocolitis. Infliximab was administered to 5 (8%) of the 62 patients with moderate, severe, or life-threatening immune-mediated enterocolitis following inadequate response to corticosteroids. In patients receiving YERVOY 10 mg/kg in CA184-029, Grade 3-5 immune-mediated enterocolitis occurred in 76 patients (16%) and Grade 2 enterocolitis occurred in 68 patients (14%). Seven (1.5%) developed intestinal perforation and 3 patients (0.6%) died as a result of complications.

Cytomegalovirus (CMV) infection/reactivation has been reported in patients with corticosteroid-refractory immune-mediated colitis. In cases of corticosteroid-refractory colitis, consider repeating infectious workup to exclude alternative etiologies. Addition of an alternative immunosuppressive agent to the corticosteroid therapy, or replacement of the corticosteroid therapy, should be considered in corticosteroid-refractory immune-mediated colitis if other causes are excluded.

Immune-Mediated Hepatitis

Immune-mediated hepatitis, including fatal cases, can occur with YERVOY. Monitor LFTs (hepatic transaminase and bilirubin levels) and assess patients for signs and symptoms of hepatotoxicity before each dose of YERVOY. In patients with hepatotoxicity, rule out infectious or malignant causes and increase frequency of LFT monitoring until resolution. Withhold YERVOY in patients with Grade 2 hepatotoxicity. Permanently discontinue YERVOY in patients with Grade 3-4 hepatotoxicity and administer systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent). When LFTs show sustained improvement or return to baseline, initiate corticosteroid tapering and continue over 1 month. Across the clinical development program for YERVOY, mycophenolate treatment has been administered in patients with persistent severe hepatitis despite high-dose corticosteroids. In patients receiving YERVOY 3 mg/kg in MDX010-20, severe, life-threatening, or fatal hepatotoxicity (AST or ALT elevations >5× the ULN or total bilirubin elevations >3× the ULN; Grade 3-5) occurred in 8 YERVOY-treated patients (2%), with fatal hepatic failure in 0.2% and hospitalization in 0.4%. An additional 13 patients (2.5%) experienced moderate hepatotoxicity manifested by LFT abnormalities (AST or ALT elevations >2.5× but ≤5× the ULN or total bilirubin elevation >1.5× but ≤3× the ULN; Grade 2). In a dose-finding trial, Grade 3 increases in transaminases with or without concomitant increases in total bilirubin occurred in 6 of 10 patients who received concurrent YERVOY (3 mg/kg) and vemurafenib (960 mg BID or 720 mg BID). In patients receiving YERVOY 10 mg/kg in CA184-029, Grade 3-4 immune-mediated hepatitis occurred in 51 patients (11%) and moderate Grade 2 immune-mediated hepatitis occurred in 22 patients (5%). Liver biopsy performed in 6 patients with Grade 3-4 hepatitis showed evidence of toxic or autoimmune hepatitis.

Immune-Mediated Dermatitis

Immune-mediated dermatitis, including fatal cases, can occur with YERVOY. Monitor patients for signs and symptoms of dermatitis such as rash and pruritus. Unless an alternate etiology has been identified, signs or symptoms of dermatitis should be considered immune-mediated. Treat mild to moderate dermatitis (e.g., localized rash and pruritus) symptomatically; administer topical or systemic corticosteroids if there is no improvement within 1 week. Withhold YERVOY in patients with moderate to severe signs and symptoms. Permanently discontinue YERVOY in patients with severe, life-threatening, or fatal immune-mediated dermatitis (Grade 3-5). Administer systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent). When dermatitis is controlled, corticosteroid tapering should occur over a period of at least 1 month. In patients receiving YERVOY 3 mg/kg in MDX010-20, severe, life-threatening, or fatal immune-mediated dermatitis (e.g., Stevens-Johnson syndrome, toxic epidermal necrolysis, or rash complicated by full thickness dermal ulceration, or necrotic, bullous, or hemorrhagic manifestations; Grade 3-5) occurred in 13 YERVOY-treated patients (2.5%); 1 patient (0.2%) died as a result of toxic epidermal necrolysis and 1 additional patient required hospitalization for severe dermatitis. There were 63 patients (12%) with moderate (Grade 2) dermatitis. In patients receiving YERVOY 10 mg/kg in CA184-029, Grade 3-4 immune-mediated dermatitis occurred in 19 patients (4%). There were 99 patients (21%) with moderate Grade 2 dermatitis.

Immune-Mediated Neuropathies

Immune-mediated neuropathies, including fatal cases, can occur with YERVOY. Monitor for symptoms of motor or sensory neuropathy such as unilateral or bilateral weakness, sensory alterations, or paresthesia. Withhold YERVOY in patients with moderate neuropathy (not interfering with daily activities). Permanently discontinue YERVOY in patients with severe neuropathy (interfering with daily activities), such as Guillain-Barré-like syndromes. Institute medical intervention as appropriate for management for severe neuropathy. Consider initiation of systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent) for severe neuropathies. In patients receiving YERVOY 3 mg/kg in MDX010-20, 1 case of fatal Guillain-Barré syndrome and 1 case of severe (Grade 3) peripheral motor neuropathy were reported. Across the clinical development program of YERVOY, myasthenia gravis and additional cases of Guillain-Barré syndrome have been reported. In patients receiving YERVOY 10 mg/kg in CA184-029, Grade 3-5 immune-mediated neuropathy occurred in 8 patients (2%); the sole fatality was due to complications of Guillain-Barré syndrome. Moderate Grade 2 immune-mediated neuropathy occurred in 1 patient (0.2%).

Immune-Mediated Endocrinopathies

Immune-mediated endocrinopathies, including life-threatening cases, can occur with YERVOY. Monitor patients for clinical signs and symptoms of hypophysitis, adrenal insufficiency (including adrenal crisis), and hyper- or hypothyroidism. Patients may present with fatigue, headache, mental status changes, abdominal pain, unusual bowel habits, and hypotension, or nonspecific symptoms which may resemble other causes such as brain metastasis or underlying disease. Unless an alternate etiology has been identified, signs or symptoms should be considered immune-mediated. Monitor clinical chemistries, adrenocorticotropic hormone (ACTH) level, and thyroid function tests at the start of treatment, before each dose, and as clinically indicated based on symptoms. In a limited number of patients, hypophysitis was diagnosed by imaging studies through enlargement of the pituitary gland. Withhold YERVOY in symptomatic patients and consider referral to an endocrinologist. Initiate systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent) and initiate appropriate hormone replacement therapy. In patients receiving YERVOY 3 mg/kg in MDX010-20, severe to life-threatening immune-mediated endocrinopathies (requiring hospitalization, urgent medical intervention, or interfering with activities of daily living; Grade 3-4) occurred in 9 YERVOY-treated patients (1.8%). All 9 patients had hypopituitarism, and some had additional concomitant endocrinopathies such as adrenal insufficiency, hypogonadism, and hypothyroidism. Six of the 9 patients were hospitalized for severe endocrinopathies. Moderate endocrinopathy (requiring hormone replacement or medical intervention; Grade 2) occurred in 12 patients (2.3%) and consisted of hypothyroidism, adrenal insufficiency, hypopituitarism, and 1 case each of hyperthyroidism and Cushing's syndrome. The median time to onset of moderate to severe immune-mediated endocrinopathy was 2.5 months and ranged up to 4.4 months after the initiation of YERVOY. In patients receiving YERVOY 10 mg/kg in CA184-029, Grade 3-4 immune-mediated endocrinopathies occurred in 39 patients (8%) and Grade 2 immune-mediated endocrinopathies occurred in 93 patients (20%). Of the 39 patients with Grade 3-4 immune-mediated endocrinopathies, 35 patients had hypopituitarism (associated with 1 or more secondary endocrinopathies, e.g., adrenal insufficiency, hypogonadism, and hypothyroidism), 3 patients had hyperthyroidism, and 1 had primary hypothyroidism. The median time to onset of Grade 3-4 immune-mediated endocrinopathy was 2.2 months (range: 2 days-8 months). Twenty-seven (69.2%) of the 39 patients were hospitalized for immune-mediated endocrinopathies. Of the 93 patients with Grade 2 immune-mediated endocrinopathy, 74 had primary hypopituitarism (associated with 1 or more secondary endocrinopathy, e.g., adrenal insufficiency, hypogonadism, and hypothyroidism), 9 had primary hypothyroidism, 3 had hyperthyroidism, 3 had thyroiditis with hypo- or hyperthyroidism, 2 had hypogonadism, 1 had both hyperthyroidism and hypopituitarism, and 1 subject developed Graves’ ophthalmopathy. The median time to onset of Grade 2 immune-mediated endocrinopathy was 2.1 months (range: 9 days-19.3 months).

Other Immune-Mediated Adverse Reactions

Permanently discontinue YERVOY for clinically significant or severe immune-mediated adverse reactions. Initiate systemic corticosteroids (1-2 mg/kg/day of prednisone or equivalent) for severe immune-mediated adverse reactions. Monitor patients for signs or symptoms of ocular toxicity, which may include blurred vision and reduced visual acuity. Immune-mediated ocular toxicity may be associated with retinal detachment or permanent vision loss. Administer corticosteroid eye drops for uveitis, iritis, or episcleritis. Permanently discontinue YERVOY for immune-mediated ocular disease unresponsive to local immunosuppressive therapy. If uveitis occurs in combination with other immune-mediated adverse reactions, consider a Vogt-Koyanagi-Harada-like syndrome, which has been observed in patients receiving YERVOY and may require treatment with systemic steroids to reduce the risk of permanent vision loss. Fatal or serious graft-versus-host disease (GVHD) can occur in patients who receive a CTLA-4 receptor blocking antibody either before or after allogeneic hematopoietic stem cell transplantation (HSCT). Follow patients closely for evidence of GVHD and intervene promptly. Consider the benefit versus risks of treatment with a CTLA-4 receptor blocking antibody after allogeneic HSCT. In MDX010-20, the following clinically significant immune-mediated adverse reactions were seen in <1% of YERVOY-treated patients: cytopenias, nephritis, pneumonitis, meningitis, pericarditis, uveitis, and iritis. In CA184-029, the following clinically significant immune-mediated adverse reactions were seen in <1% of YERVOY-treated patients unless specified: cytopenias, eosinophilia (2.1%), pancreatitis (1.3%), meningitis, pneumonitis, sarcoidosis, pericarditis, uveitis, and fatal myocarditis. Across 21 dose-ranging trials administering YERVOY at doses of 0.1 to 20 mg/kg (n=2478), the following likely immune-mediated adverse reactions were also reported with <1% incidence unless specified: angiopathy, temporal arteritis, vasculitis, polymyalgia rheumatica, conjunctivitis, blepharitis, episcleritis, scleritis, iritis, leukocytoclastic vasculitis, erythema multiforme, psoriasis, arthritis, autoimmune thyroiditis, neurosensory hypoacusis, autoimmune central neuropathy (encephalitis), myositis, polymyositis, ocular myositis, cytopenias (2.5%), and nephritis.

Embryo-Fetal Toxicity

Based on its mechanism of action, YERVOY can cause fetal harm when administered to a pregnant woman. The effects of YERVOY are likely to be greater during the second and third trimesters of pregnancy. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with YERVOY and for 3 months after the last dose.

Lactation

It is not known whether YERVOY is secreted in human milk. Advise women not to breastfeed during treatment with YERVOY and for 3 months after the last dose.

Common Adverse Reactions

The most common adverse reactions (≥5%) in patients who received YERVOY at 3 mg/kg were fatigue (41%), diarrhea (32%), pruritus (31%), rash (29%), and colitis (8%). The most common adverse reactions (≥5%) in patients who received YERVOY at 10 mg/kg were rash (50%), diarrhea (49%), fatigue (46%), pruritus (45%), headache (33%), weight loss (32%), nausea (25%), pyrexia (18%), colitis (16%), decreased appetite (14%), vomiting (13%), and insomnia (10%).

Please see U.S. Full Prescribing Information for OPDIVO and YERVOY, including Boxed WARNING regarding immune-mediated adverse reactions for YERVOY.

Checkmate Trials and Patient Populations

Checkmate 037–previously treated metastatic melanoma; Checkmate 066–previously untreated metastatic melanoma; Checkmate 067–previously untreated metastatic melanoma, as a single agent or in combination with YERVOY; Checkmate 017–second-line treatment of metastatic squamous non-small cell lung cancer; Checkmate 057–second-line treatment of metastatic non-squamous non-small cell lung cancer; Checkmate 032–small cell lung cancer; Checkmate 025–previously treated renal cell carcinoma; Checkmate 214–previously untreated renal cell carcinoma, in combination with YERVOY; Checkmate 205/039–classical Hodgkin lymphoma; Checkmate 141–recurrent or metastatic squamous cell carcinoma of the head and neck; Checkmate 275–urothelial carcinoma; Checkmate 142–MSI-H or dMMR metastatic colorectal cancer, as a single agent or in combination with YERVOY; Checkmate 040–hepatocellular carcinoma; Checkmate 238–adjuvant treatment of melanoma.

About the Bristol-Myers Squibb and Ono Pharmaceutical Collaboration

In 2011, through a collaboration agreement with Ono Pharmaceutical Co., Bristol-Myers Squibb expanded its territorial rights to develop and commercialize Opdivo globally, except in Japan, South Korea and Taiwan, where Ono had retained all rights to the compound at the time. On July 23, 2014, Ono and Bristol-Myers Squibb further expanded the companies’ strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies – as single agents and combination regimens – for patients with cancer in Japan, South Korea and Taiwan.

About Bristol-Myers Squibb

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol-Myers Squibb, visit us at BMS.com or follow us on LinkedIn, cinguettio, YouTube, Facebook and Instagram.

Celgene and Juno Therapeutics are wholly owned subsidiaries of Bristol-Myers Squibb Company. In certain countries outside the U.S., due to local laws, Celgene and Juno Therapeutics are referred to as, Celgene, a Bristol-Myers Squibb company and Juno Therapeutics, a Bristol-Myers Squibb company.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, the research, development and commercialization of pharmaceutical products. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on historical performance and current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. No forward-looking statement can be guaranteed. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect Bristol-Myers Squibb’s business and market, particularly those identified in the cautionary statement and risk factors discussion in Bristol-Myers Squibb’s Annual Report on Form 10-K for the year ended December 31, 2018, as updated by our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law, Bristol-Myers Squibb undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

Eli Lilly & Co (NYSE: LLY)
Chiamata sugli utili del 4 ° trimestre 2019
30 gennaio 2020, 9:00 ET

Contenuti:

• Osservazioni preparate
• Domande e risposte
• Chiama i partecipanti

Osservazioni preparate:

Operatore

Onorevoli colleghi, grazie per essere stati pronti e benvenuti all'Eli Lilly Q4 2019 Earnings Call. (Istruzioni per l'operatore) Come promemoria, la chiamata di oggi viene registrata. Ora vorrei rivolgere la conferenza al tuo ospite, Kevin Hern. Per favore prosegui.

Kevin Hern – Vicepresidente delle relazioni con gli investitori

Buongiorno. Grazie per esserti unito a noi per la chiamata sugli utili del 4 ° trimestre 2019 di Eli Lilly and Company. Sono Kevin Hern, vicepresidente delle relazioni con gli investitori. Ad unirmi alla chiamata di oggi sono Dave Ricks, Presidente e CEO di Lilly; Josh Smiley, direttore finanziario; Dr. Dan Skovronsky, Direttore scientifico; Anne White, presidente di Lilly Oncology; Patrik Jonsson, presidente di Lilly Bio-Medicines; e Mike Mason, presidente di Lilly Diabetes. Siamo inoltre raggiunti da Kim Macko e Mike Czapar del team Investor Relations.

Durante questa conference call, prevediamo di fare proiezioni e dichiarazioni previsionali basate sulle nostre aspettative attuali. I nostri risultati effettivi potrebbero differire materialmente a causa di una serie di fattori, inclusi quelli elencati nella diapositiva 3 e quelli indicati nei nostri ultimi moduli 10-K, 10-Q e qualsiasi 8-K depositati presso la Securities and Exchange Commission. Le informazioni che forniamo sui nostri prodotti e sulla nostra pipeline sono a beneficio della comunità degli investimenti. Non è destinato a essere promozionale e non è sufficiente per le decisioni di prescrizione.

Mentre passiamo alle nostre osservazioni preparate, ricordiamo che il nostro commento si concentrerà su misure finanziarie non GAAP, che escludono il contributo finanziario da Elanco durante il 2018 e il 2019 e presentano utili per azione come se l'intera disposizione tramite l'offerta di scambio fosse completa il 1 gennaio 2018.

Ora passerò la chiamata a Dave per un riepilogo dei nostri risultati Q4.

David A. Ricks – Presidente e Amministratore Delegato

Grazie Kevin. Il 2019 è stato un anno solido per Lilly e i nostri solidi risultati finanziari del quarto trimestre evidenziano la forza del business sottostante. Siamo usciti dal 2019 con slancio e continueremo a concentrarci sull'attuazione della nostra strategia nel 2020, che consiste nel fornire eccellenti risultati aziendali, sviluppare e lanciare nuovi farmaci per i pazienti e aumentare la produttività.

La crescita dei ricavi ha subito un'accelerazione nel quarto trimestre, aumentando dell'8% rispetto al quarto trimestre 2018 o del 9% in valuta costante. Questa forte performance è stata trainata interamente dal volume, che ha contribuito a 10 punti percentuali di crescita nonostante i continui venti contrari per la perdita di esclusività negli Stati Uniti di Cialis e il ritiro globale di Lartruvo. Escludendo Cialis e Lartruvo, la crescita del volume mondiale è stata del 15% impressionante.

I nuovi farmaci continuano a essere il nostro motore di crescita, che rappresenta il 46% delle nostre entrate in questo trimestre. Abbiamo compiuto buoni progressi nel quarto trimestre del nostro programma di produttività poiché il reddito operativo è cresciuto del 10% rispetto allo scorso anno. Abbiamo registrato una forte crescita delle entrate e tenuto le spese di marketing, vendita e amministrative piatte rispetto allo scorso anno, aumentando al contempo i nostri investimenti in ricerca e sviluppo.

Il nostro margine operativo non GAAP è stato del 26,3%, con un miglioramento di 40 punti base rispetto al 4 ° trimestre 2018. Abbiamo chiuso il 2019 con un margine operativo dell'intero anno leggermente inferiore alla nostra guida di circa il 28% mentre abbiamo effettuato investimenti strategici mirati nel 4 ° trimestre in entrambi i nostri portafogli commerciali e pipeline, che miglioreranno le nostre opportunità di crescita futura. Questi investimenti offrono una buona spinta verso il 2020 e ci tengono sulla buona strada per raggiungere il nostro obiettivo di margine operativo del 31% quest'anno.

Abbiamo annunciato diversi traguardi della pipeline dalla nostra chiamata agli utili del terzo trimestre. Questi includono risultati positivi nei restanti due studi di Fase 3 del programma BREEZE AD di baricitinib nella dermatite atopica; la presentazione di selpercatinib negli Stati Uniti e in Europa; e la FDA concede a selpercatinib una revisione prioritaria; la presentazione di tanezumab per il dolore OA negli Stati Uniti in collaborazione con Pfizer; la presentazione di dosi più elevate di Trulicity negli Stati Uniti e in Europa; e la presentazione di baricitinib per la dermatite atopica in Europa e Giappone.

Durante il quarto trimestre abbiamo messo in atto il nostro forte flusso di cassa operativo, restituendo circa $ 900 milioni agli azionisti tramite riacquisto di azioni e dividendi. Inoltre, come precedentemente annunciato, abbiamo aumentato il dividendo del 15% per il 2020. Questo segna il secondo anno consecutivo di un aumento del dividendo del 15%, a riprova della nostra fiducia nelle prospettive per il business.

Infine, abbiamo recentemente annunciato l'imminente acquisizione di Dermira, un'azienda focalizzata sullo sviluppo di nuove terapie per le condizioni croniche della pelle. Dermira ha un'eccitante risorsa nella Fase 3 per la dermatite atopica, il lebrikizumab, oltre a un prodotto attualmente commercializzato per l'eccessiva sudorazione delle ascelle, QBREXZA. Questa transazione migliora la nostra pipeline di Fase 3 e completa i nostri sforzi esistenti nella dermatite atopica con baricitinib. Non vediamo l'ora di chiudere quella transazione qui nel primo trimestre.

Passando alla diapositiva 5, vedrai l'elenco degli eventi chiave dall'ultima chiamata alle entrate. Nei nostri continui sforzi per contribuire a rendere i farmaci più convenienti e ridurre i costi immediati per i pazienti, abbiamo recentemente annunciato piani per introdurre due insuline più economiche, Humalog 75/25 KwikPen e Humalog Junior KwikPen. Entrambi i prodotti saranno disponibili entro la metà di aprile e saranno offerti a un prezzo di listino inferiore del 50% rispetto alle versioni con marchio.

Una volta che queste opzioni aggiuntive saranno disponibili, oltre il 90% delle opzioni Humalog di Lilly sarà accessibile per aiutare i pazienti a ridurre i costi diretti e speriamo di vedere che i pagatori forniranno un maggiore accesso ai pazienti per queste soluzioni. Solo nel mese di dicembre Insulin Lispro ha aiutato quasi 79.000 pazienti negli Stati Uniti. Queste recenti aggiunte completano le offerte esistenti nel Lilly Diabetes Solution Center, che attualmente aiuta più di 20.000 pazienti al mese a permettersi meglio la loro insulina. In quanto azienda che opera da oltre 140 anni e investe oltre 5 miliardi di dollari all'anno in ricerca e sviluppo a lungo termine, ci assumiamo la nostra responsabilità di perseguire seriamente pratiche commerciali, sociali e ambientali sostenibili.

Ora rivolgerò la chiamata a Josh per rivedere i nostri risultati del quarto trimestre e per fornire un aggiornamento sulla nostra guida finanziaria per il 2020.

Faccina di Joshua L. – Vicepresidente senior e direttore finanziario

Grazie, Dave. La diapositiva 6 riassume la nostra presentazione dei risultati GAAP a misure non GAAP e la diapositiva 7 fornisce un riepilogo dei nostri risultati GAAP. Quindi, osservando le misure non GAAP sulla diapositiva 8, vedrai un aumento delle entrate dell'8% o del 9% in valuta costante. Il margine lordo in percentuale delle entrate è diminuito di 70 punti base al 79,9%. Escludendo l'impatto dei cambi sulle scorte internazionali vendute, il margine lordo in percentuale sui ricavi è stato del 79,6% e sulla stessa base, la nostra percentuale di margine lordo è diminuita di circa 50 punti base rispetto al 4 ° trimestre 2018 trainata da un mix di prodotti sfavorevole e un impatto negativo di prezzo sulle entrate.

Scendendo dal conto economico, le spese operative sono cresciute del 6% rispetto allo scorso anno. Le spese di marketing, vendita e amministrazione sono state piatte in quanto il contenimento dei costi e le misure di produttività hanno compensato gli investimenti in prodotti chiave in crescita. Le spese di ricerca e sviluppo sono aumentate del 14%, riflettendo maggiori spese di sviluppo per le attività in fase avanzata, tra cui tirzepatide, selpercatinib e mirikizumab. I ricavi operativi sono aumentati del 10% rispetto al 4 ° trimestre 2018 poiché la crescita delle vendite ha superato la crescita delle spese, con un risultato operativo in percentuale del 26,3% sui ricavi per il trimestre e del 27,2% per l'intero anno.

I risultati di questo trimestre sono indicativi del potenziale di crescita e di espansione dei margini del nostro portafoglio di nuove offerte di medicinali. Siamo ben posizionati per guidare la crescita dei ricavi di alto livello e investire nella prossima ondata di nuovi farmaci, guidando allo stesso tempo l'espansione del margine. Siamo usciti dal 2019 con uno slancio significativo nell'attuazione della nostra strategia e siamo sulla buona strada per raggiungere il nostro obiettivo di margine operativo per l'intero anno 2020 del 31%.

Gli altri proventi e oneri sono stati ricavi per $ 206 milioni in questo trimestre rispetto ai ricavi per $ 31 milioni nel quarto trimestre del 2018, trainati dagli utili degli investimenti in azioni pubbliche. Come abbiamo sottolineato in precedenza, questo elemento pubblicitario può essere volatile a causa delle fluttuazioni delle valutazioni del mercato pubblico. I guadagni nel quarto trimestre sono stati generati principalmente dai nostri investimenti in società biotecnologiche cinesi attraverso il nostro braccio di Lilly Asia Ventures e investimenti strategici in società focalizzate su tecnologie più recenti come RNAi.

Mentre apprezziamo i guadagni, siamo ancora più soddisfatti delle relazioni e del potenziale di sviluppo di nuovi farmaci per i pazienti che accompagnano alcuni di questi investimenti.

La nostra aliquota fiscale è stata del 12,6%, in calo di 300 punti base rispetto allo stesso trimestre dell'anno scorso, trainata principalmente da un aumento dei benefici fiscali netti discreti, compresi i benefici fiscali derivanti dalla risoluzione di revisioni contabili statunitensi e straniere. Alla fine, l'utile netto è aumentato del 26% mentre l'utile per azione è aumentato del 31% a causa di una riduzione delle azioni in circolazione da riacquisto di azioni.

La diapositiva 9 delinea le stesse misure non GAAP per l'intero anno. Mentre siamo entusiasti delle nostre prestazioni nel quarto trimestre e della spinta verso il 2020, siamo anche soddisfatti delle nostre prestazioni complessive per l'intero anno nel 2019. L'anno scorso abbiamo sperimentato il pieno effetto della scadenza del brevetto Cialis e l'impatto del ritiro di Lartruvo. Nonostante questi venti contrari, siamo cresciuti al vertice del 5% in valuta costante e abbiamo generato una crescita dell'EPS dell'11% investendo dietro i nostri nuovi prodotti e pipeline.

Abbiamo anche generato un buon valore per gli azionisti e stabilito una solida base strategica attraverso la nostra scissione di Elanco e l'acquisizione di Loxo Oncology. Come abbiamo sottolineato a dicembre dello scorso anno, siamo ben posizionati nel 2020 per raggiungere i nostri obiettivi finanziari quinquennali e continuare questo periodo di crescita sostenuta.

Passando alla diapositiva 10, troverai una riconciliazione tra EPS segnalato e non GAAP. Ulteriori dettagli sono forniti nelle diapositive 26 e 27. Nella diapositiva 11 quantificiamo l'effetto di prezzo, tasso e volume sulla crescita dei ricavi. Come accennato in precedenza, i ricavi mondiali sono cresciuti del 9% in valuta costante durante il quarto trimestre, trainati da una forte crescita dei volumi del 10%, parzialmente compensata dal prezzo. I cambi hanno avuto un modesto impatto negativo sulla crescita dei ricavi.

Per il quarto anno consecutivo abbiamo registrato una crescita dei ricavi in ​​tutto il mondo ogni trimestre nonostante i venti contrari dalla scadenza dei brevetti. Le entrate statunitensi sono cresciute del 7% rispetto al quarto trimestre del 2018. Una crescita del volume dell'8% è stata guidata da Trulicity, Taltz, Verzenio, Jardiance ed Emgality. Escludendo Cialis e Lartruvo, il volume è cresciuto del 15%.

Il prezzo è stato un freno dell'1% sulla crescita dei ricavi negli Stati Uniti in questo trimestre, influenzato dall'aumento dei finanziamenti durante il gap di copertura in Medicare, dalle variazioni sfavorevoli delle stime per sconti e sconti e dalla crescita sproporzionata del volume in segmenti di prezzo netto inferiori, parzialmente compensato dalla rete di modesti aumenti dei prezzi di listino e sconti più elevati, nonché una minore dipendenza dai programmi di assistenza ai pazienti, principalmente a causa di un migliore accesso commerciale per Emgality. L'impatto del prezzo per l'intero anno è stato di un vento contrario del 3%, in linea con le nostre aspettative per il 2019 e il 2020 per il prezzo degli Stati Uniti che ha avuto una moderata resistenza sulla crescita dei ricavi.

Trasferendosi in Europa, i ricavi sono cresciuti del 12% in valuta costante, trainati da un'impressionante crescita del volume del 15%, parzialmente compensata dall'effetto negativo dei cambi e dei prezzi. La crescita del volume è stata guidata da Trulicity, Olumiant, Taltz e Verzenio. Siamo lieti dell'adozione dei nostri nuovi prodotti in tutta Europa e non vediamo l'ora di continuare la forte crescita nel 2020.

In Giappone, le entrate sono cresciute del 7% in valuta costante, trainate interamente dalla crescita del volume, in qualche modo compensate da un modesto ribasso dei prezzi a causa delle riduzioni dei prezzi su mandato del governo entrate in vigore nel 2019. Verzenio, Cymbalta, Trulicity e Olumiant hanno contribuito in modo determinante crescita. Le entrate nel resto del mondo sono aumentate del 14% in valuta costante, guidate dalla crescita del 44% in Cina sulla stessa base. La crescita della Cina è stata trainata dalla forte performance di numerosi prodotti chiave, tra cui Tyvyt. Siamo entusiasti dei recenti lanci di Trulicity, Taltz e Olumiant. Le stesse informazioni per le nostre entrate per l'intero anno sono in fondo a questa diapositiva.

Come mostrato nella diapositiva 12, i nostri prodotti di crescita chiave continuano a guidare una crescita dei volumi di tutto il mondo. Questi nuovi medicinali hanno prodotto quasi 15 punti percentuali di crescita in questo trimestre, continuando la forte traiettoria che abbiamo visto nel corso del 2019. I marchi che hanno subito una perdita di esclusività hanno fornito una resistenza di oltre 400 punti base guidati principalmente da Cialis. Come promemoria, il tadalafil generico è entrato nel mercato statunitense a settembre 2018, con un impatto significativo sui ricavi di Cialis, con l'erosione ulteriormente accelerata nel secondo trimestre del 2019 quando i generici multisource sono entrati nel mercato. Mentre l'impatto di questo evento sta iniziando a tramontare, ha comunque avuto un impatto negativo significativo sulla crescita nel quarto trimestre del 2019.

La diapositiva 13 evidenzia i contributi dei nostri principali prodotti di crescita. In totale, questi marchi hanno generato oltre 2,8 miliardi di dollari di entrate in questo trimestre, pari al 46% delle entrate. I nostri farmaci più recenti hanno avuto ancora risultati impressionanti in aree terapeutiche ampie e in crescita e la nostra capacità di raggiungere più pazienti continua a dimostrare la forza della nostra esecuzione commerciale.

All'interno del diabete, la classe GLP-1 iniettabile continua ad aggiungere nuovi pazienti nonostante l'ingresso di una nuova terapia orale. Negli Stati Uniti, le prescrizioni di GLP totali iniettabili sono cresciute del 29% rispetto al 4 ° trimestre 2018 e Trulicity è cresciuta più rapidamente del mercato, registrando un aumento del 32% delle prescrizioni totali nello stesso periodo. Il prezzo netto negli Stati Uniti per Trulicity è diminuito nelle cifre a metà singola, in linea con le nostre aspettative per il 4 ° trimestre e per il 2020. Come abbiamo discusso sul bando Q3, il prezzo di Trulicity nel primo trimestre del terzo trimestre del 2019 è stato influenzato da una serie di fattori che non prevediamo di persistere nel 2020.

Gli inibitori SGLT2 hanno accelerato la loro traiettoria poiché le prescrizioni statunitensi complete per la classe sono cresciute di quasi il 20% rispetto al trimestre dello scorso anno e le nuove iniziazioni terapeutiche sono cresciute del 46%. Come leader di mercato, Jardiance continua a guidare una forte crescita di classe e rappresenta oltre il 55% delle prescrizioni totali. La nostra leadership di mercato sostenuta in queste due importanti classi in crescita nel diabete è un vantaggio competitivo per la nostra attività nel diabete e ci posiziona bene per la crescita futura.

In immunologia, Taltz continua a registrare una forte crescita poiché le prescrizioni totali statunitensi sono cresciute di quasi il 40% rispetto al 4 ° trimestre 2018. Nonostante un mercato sempre più competitivo, Taltz ha guadagnato oltre 3 punti di condivisione in dermatologia nel 2019 e le prescrizioni settimanali di reumatologia sono più che raddoppiate nello stesso periodo di tempo . Nel 2020 cerchiamo di sfruttare il forte slancio dimostrato nel 2019 e raggiungere ancora più pazienti.

Nel dolore, Emgality ha continuato la sua leadership negli Stati Uniti nella quota di mercato per le prescrizioni dei nuovi a oltre il 47%. Pur contenti della diffusione, crediamo che ci sia spazio per una crescita aggiuntiva significativa mentre espandiamo la nostra presenza commerciale nelle cure primarie. Continuiamo a vedere progressi con circa l'80% delle prescrizioni rimborsate alla fine del quarto trimestre, a riprova del forte accesso a Emgality.

Nell'ambito dell'oncologia, le prescrizioni totali statunitensi di Verzenio sono cresciute del 46% rispetto al 4 ° trimestre 2018 e il mercato CDK 4 e 6 sta mostrando una crescita incoraggiante poiché le prescrizioni totali sono aumentate di oltre il 16% nello stesso arco di tempo. Inoltre, Cyramza continua a registrare una solida crescita quando abbiamo realizzato sinergie toraciche in tutto il nostro portafoglio.

Oltre alle ottime prestazioni dei nostri driver di crescita chiave, non vediamo l'ora di lanciare potenzialmente tre nuovi farmaci nel 2020 con Reyvow, selpercatinib e ultra rapid lispro. Riteniamo che tutti e tre i nuovi farmaci abbiano il potenziale per essere i primi della classe o i migliori della classe e per migliorare la vita dei pazienti. Inoltre, il lancio di nuovi farmaci nelle aree terapeutiche in cui disponiamo di infrastrutture commerciali supporterà un'ulteriore espansione dei margini.

La diapositiva 14 mostra la variazione di anno in anno in determinate righe del nostro conto economico. Concentrandosi sui nostri risultati non GAAP, i tassi di cambio hanno avuto un modesto impatto negativo su ricavi, margine lordo, reddito operativo ed EPS e un modesto impatto netto positivo sui costi operativi. Nella diapositiva 15 forniamo un aggiornamento sull'allocazione del capitale. Nel 2019 abbiamo investito oltre $ 13 miliardi per guidare la nostra crescita futura attraverso una combinazione di sviluppo aziendale, spese in conto capitale e investimenti al netto delle imposte in R&S. Inoltre, abbiamo restituito agli azionisti circa $ 7 miliardi tramite dividendi e riacquisti di azioni.

Come menzionato in precedenza Dave, abbiamo anche annunciato un aumento del dividendo del 15% per il secondo anno consecutivo, dimostrando la nostra fiducia nelle prospettive per la Società. Siamo concentrati sull'utilizzo del forte flusso di cassa generato dalla nostra attività per sviluppare la prossima ondata di nuovi farmaci attraverso fonti sia interne che esterne, come evidenziato dall'acquisizione recentemente annunciata di Dermira. Rimarremo attivi nella valutazione delle acquisizioni o delle licenze in-bolt in cui possiamo creare valore per gli azionisti e migliorare le nostre prospettive di crescita future.

Passando alle nostre linee guida finanziarie 2020 sulla diapositiva 16, vedrai che abbiamo aggiornato le nostre linee guida non GAAP per riflettere l'impatto della prevista acquisizione di Dermira e la nostra recente forte performance aziendale. In particolare, stiamo aumentando la nostra gamma di entrate di $ 100 milioni per includere QBREXZA e per riflettere le forti tendenze di prescrizione che vediamo nell'attività sottostante, aggiornando le nostre linee guida SG&A per tenere conto dell'aggiunta della forza vendita Dermira e delle spese commerciali per supportare QBREXZA e mantenere tutti gli altri elementi pubblicitari e confermando i nostri guadagni non GAAP per azione vanno da $ 6,70 a $ 6,80 e l'obiettivo di margine operativo del 31%. Su base riportata, l'impatto dell'acquisizione di Dermira avrà un impatto di $ 0,21 e gli utili per azione per il 2020 dovrebbero ora oscillare tra $ 6,18 e $ 6,28.

Continuiamo ad attuare la nostra strategia basata sull'innovazione, sfruttando al contempo il nostro giovane portafoglio commerciale di nuovi farmaci per favorire l'espansione del margine nel medio termine. Quindi ora rivolgerò la chiamata a Dan per evidenziare i nostri progressi nella ricerca e sviluppo.

Daniel M. Skovronsky – Vicepresidente senior e Chief Scientific Officer

Grazie Josh. La diapositiva 17 mostra opportunità di pipeline selezionate a partire dal 27 gennaio. Il movimento positivo dall'ultima chiamata di guadagni include la presentazione di selpercatinib negli Stati Uniti e in Europa, nonché l'avvio di studi di fase 3 per selpercatinib in pazienti con RET positivo alla fusione non piccolo carcinoma polmonare cellulare o carcinoma tiroideo midollare mutante RET; la presentazione di tanezumab negli Stati Uniti per il dolore dell'osteoartrosi; la presentazione di dosi più elevate di Trulicity per il diabete di tipo 2 negli Stati Uniti e in Europa; la presentazione di baricitinib per la dermatite atopica in Europa e in Giappone; l'aggiunta di lebrikizumab per dermatite atopica al portafoglio di Fase 3, in attesa della chiusura dell'acquisizione di Dermira; l'avvio di uno studio di fase 3 su tirzepatide nell'obesità; e uno studio di fase 2 sulla tirzepatide nella NASH; l'inizio della Fase 2 per il nostro agonista del checkpoint CD200R in immunologia; e l'avvio della Fase 1 per quattro attività, nonché la chiusura di tre attività oncologiche in fase iniziale.

Inoltre, abbiamo avuto alcune importanti letture iniziali, tra cui LOXO-305, il nostro nuovo inibitore di BTK che abbiamo messo in evidenza nell'invito alla guida finanziaria del 2020 e continua a progredire rapidamente nello sviluppo. Abbiamo anche ottenuto letture interne dei dati da due studi di Fase 2 su Pegilodecakin in combinazione con agenti immunoterapici in pazienti con carcinoma polmonare non a piccole cellule, Cipro 1 a Cipro 2.

Sebbene i dati completi saranno presentati in una riunione medica alla fine di quest'anno, posso dire che entrambi gli studi sono stati negativi. Sebbene siamo delusi dalla mancanza di efficacia per Pegilodecakin in combinazione con l'inibizione del checkpoint nel carcinoma polmonare, restiamo impegnati a trovare nuove terapie per le persone con cancro. Sebbene stiamo ancora analizzando la totalità dei dati che abbiamo ottenuto con Pegilodecakin, al momento non prevediamo ulteriori studi con questo agente.

Passando alla diapositiva 18, mostriamo un bilancio finale di come abbiamo terminato il 2019 rispetto agli eventi chiave che ci aspettavamo che si verificassero. Il 2019 è stato un anno molto produttivo e abbiamo fatto progressi significativi nel portare nuovi farmaci ai pazienti. In totale abbiamo aggiunto alla nostra pipeline quattro nuovi programmi clinici di Fase 3, tutti con il potenziale per essere i primi della classe o i migliori della classe. Abbiamo riportato 12 letture positive per la fase 3 o prove sperimentali, tra cui un mix di NME e nuove indicazioni o nuovi dati per i prodotti lanciati.

Abbiamo presentato 12 NME o nuove indicazioni per la revisione normativa nelle aree geografiche di tutto il mondo e abbiamo ricevuto azioni normative positive su due nuovi medicinali, Reyvow e Baqsimi, nonché quattro importanti nuove indicazioni su Trulicity, Taltz, Emgality e Cyramza. Siamo orgogliosi dei significativi risultati raggiunti nel 2019 e siamo concentrati sulla scoperta e lo sviluppo di nuovi farmaci per aiutare i pazienti mentre entriamo in un altro decennio promettente.

Passando alla diapositiva 19, mentre è all'inizio dell'anno abbiamo già compiuto buoni progressi sui nostri obiettivi per il 2020, dopo aver annunciato l'avvio di ulteriori studi di fase 3 per selpercatinib; risultati positivi nelle restanti due prove del programma BREEZE di baricitinib per la dermatite atopica; la presentazione di baricitinib per la dermatite atopica nell'UE e in Giappone; la presentazione di Tanezumab per il dolore da artrosi negli Stati Uniti in collaborazione con Pfizer; Approvazione FDA di Trijardy, una combinazione a dose fissa di empagliflozin, linagliptin e metformina XR; e l'approvazione normativa di Cyramza per il carcinoma polmonare non a piccole cellule EGFR di prima linea positivo in Europa.

Prima di restituire la chiamata a Dave, vorrei dedicare qualche minuto a fornire ulteriori dettagli su importanti traguardi per due programmi clinici che ho menzionato in precedenza, l'avvio di ulteriori studi clinici per tirzepatide e il completamento del baricitinib BREEZE AD atopico programma di dermatite. A partire da tirzepatide su Slide 20, in precedenza abbiamo condiviso i nostri piani per iniziare uno studio sugli esiti cardiovascolari per tirzepatide quest'anno, valutando il tirzepatide testa a testa contro la terapia GLP-1 più utilizzata, ovvero Trulicity.

Questa è una mossa audace. Segnala sia la nostra fiducia nella forza del tirzepatide sia il nostro desiderio di fornire dati significativi per pazienti e medici su come i nuovi medicinali misurano le terapie principali. Attraverso discussioni molto collaborative con la FDA, abbiamo ottenuto l'allineamento sulle principali caratteristiche di progettazione di questo studio unico chiamato SURPASS CVOT. Questo studio includerà circa 12.500 pazienti con diabete di tipo 2 e malattia cardiovascolare aterosclerotica confermata e misurerà il tempo alla prima occorrenza dell'endpoint composito di morte CV, infarto del miocardio o ictus.

Questo studio valuterà sia la non inferiorità che la superiorità di tirzepatide rispetto alla trulicità e prevediamo che il completamento richiederà poco più di quattro anni. Oltre a SURPASS CVOT, siamo lieti di condividere che il programma di diabete di tipo 2 di Fase 2 SURPASS sta procedendo molto bene. L'interesse degli investigatori è stato molto forte e quattro degli otto studi clinici SURPASS sono già completamente iscritti. Non vediamo l'ora di condividere i risultati migliori per il primo studio da leggere dal programma SURPASS entro la fine dell'anno.

Infine, siamo entusiasti del fatto che il programma di obesità di fase 3 di SURMOUNT stia dosando attivamente i pazienti e che sia attualmente in corso anche il programma di fase 2 di SYNERGY nella NASH. Data la profonda perdita di peso osservata negli studi di fase 2 su tirzepatide, siamo entusiasti della potenziale opportunità che questi programmi clinici aggiuntivi offrono per aiutare i pazienti. Insieme agli studi SURPASS in corso, questi studi aggiuntivi estenderanno l'attuale programma di tirzepatide di Fase 3 a oltre 20.000 pazienti. Siamo entusiasti della svolta che la tirzepatide rappresenta per i pazienti e continueremo a investire completamente per massimizzare questa opportunità.

Passando alla Slide 21, abbiamo recentemente annunciato il completamento degli ultimi due studi del programma clinico BREEZE AD, BREEZE AD4 e BREEZE AD5. Il programma completo BREEZE comprendeva cinque studi, che valutavano baricitinib sia in monoterapia sia in associazione con corticosteroidi topici in pazienti con dermatite atopica da moderata a grave. Sebbene non tutti i dati siano stati pubblicati e presentati, siamo particolarmente incoraggiati dai forti risultati per la dose da 2 milligrammi nello studio americano. Riteniamo che il pacchetto completo di dati generato da BREEZE AD mostri il potenziale che baricitinib potrebbe offrire come opzione di trattamento aggiuntiva per i pazienti con dermatite atopica in cui le scelte sono limitate.

Inoltre, questi dati si aggiungono all'ampio database di sicurezza di baricitinib con oltre 10.000 anni di pazienti di dati sulla sicurezza. Di recente abbiamo presentato baricitinib per dermatite atopica nell'UE e in Giappone e prevediamo un'azione normativa alla fine del 2020. Prevediamo di presentare negli Stati Uniti entro la fine dell'anno. Prevediamo che baricitinib sarà il primo inibitore orale di JAK per il trattamento della dermatite atopica e non vediamo l'ora di offrire una nuova opzione terapeutica ai pazienti.

Infine, abbiamo recentemente annunciato la prevista acquisizione di Dermira. In attesa della conclusione dell'operazione, questa transazione aggiungerebbe un ulteriore medicinale alla pipeline di Lilly per la dermatite atopica da moderata a grave, ovvero il lebrikizumab, che è un anticorpo iniettabile destinato a IL-13 attualmente in fase 3 di sperimentazione. Consideriamo lebrikizumab altamente complementare ai nostri sforzi con baricitinib nella dermatite atopica. Il bisogno medico insoddisfatto qui è grande e prevediamo che medici e pazienti useranno una serie di terapie iniettabili orali simili all'attuale pratica comune per il trattamento della psoriasi.

Ora restituirò la chiamata a Dave per alcune osservazioni conclusive.

David A. Ricks – Presidente e Amministratore Delegato

Grazie Dan. Prima di andare a domande e risposte, vorrei riassumere brevemente i progressi compiuti nel quarto trimestre del 2019 e nell'intero anno. Abbiamo fornito prestazioni impressionanti nel quarto trimestre. Le nostre entrate sono cresciute dell'8% poiché i nostri nuovi farmaci sono stati di nuovo il catalizzatore della crescita basata sul volume. Le nostre tendenze in materia di prescrizioni in tutto il mondo sono forti e siamo ben posizionati per entrare nel 2020 per continuare la nostra traiettoria positiva e fornire la nostra guida finanziaria per il 2020.

Abbiamo avanzato il nostro programma di produttività, controllando le spese operative e investendo dietro i principali driver di crescita commerciale e la nostra pipeline in fase avanzata. Abbiamo aumentato le vendite nel quarto trimestre mantenendo il marketing. spese di vendita e amministrative piatte rispetto al quarto trimestre del 18, a dimostrazione della nostra capacità di guidare l'espansione del margine.

Abbiamo compiuto importanti progressi nella pipeline nel quarto trimestre, chiudendo un anno che includeva nuove importanti aggiunte al portafoglio di Fase 3, diverse letture positive nelle prove di Fase 2 e una moltitudine di presentazioni e approvazioni normative. Infine, abbiamo restituito agli azionisti circa $ 600 milioni tramite il dividendo e completato anche $ 300 milioni di riacquisti di azioni.

Come abbiamo condiviso durante il nostro invito di orientamento finanziario del 2020 lo scorso dicembre, siamo alle prime fasi di un periodo di crescita sostenuta a Lilly. Il saldo di nuovi farmaci che prevediamo di lanciare nei prossimi cinque anni e il continuo ridimensionamento dei nostri nuovi farmaci rispetto alla nostra limitata esposizione ai brevetti crea un periodo entusiasmante per il futuro. Stiamo perseguendo nuovi farmaci in alcune delle malattie più importanti con significative esigenze mediche insoddisfatte e opportunità commerciali considerevoli. Siamo contenti della nostra finitura per il 2019 e della nostra posizione di forza quando entriamo nel 2020 e nel prossimo decennio della storia di questa azienda. Questo conclude le nostre osservazioni preparate e ora rivolgerò la chiamata a Kevin per moderare le domande e risposte.

Domande e risposte:

Kevin Hern – Vicepresidente delle relazioni con gli investitori

Grazie, Dave. Vorremmo rispondere alle domande del maggior numero possibile di chiamanti, quindi ti chiediamo di limitare le tue domande a due per chiamante. Sean, ti preghiamo di fornire le istruzioni per la sessione di domande e risposte e quindi siamo pronti per il primo chiamante.

Operatore

Grazie. (Istruzioni per l'operatore) Geoff Meacham (fonetico) della Bank of America Merrill Lynch.

Geoff Meacham – Bank of America Merrill Lynch – Analista

Buongiorno ragazzi, grazie per la domanda. Solo uno su Taltz e uno sull'archiviazione Olumiant in AD, quindi per Taltz la crescita è stata solida, ma cosa diresti, potrebbe essere un punto di svolta della domanda che guarda al 2020 e oltre. Si tratta di nuovi contratti e accordi, è una base di indicazione più ampia, è necessario investire più commercialmente? E poi sul deposito di Olumiant in AD, non ero sicuro che l'effetto della dose da 4 mega cambi la conversazione normativa negli Stati Uniti – come quella che hai avuto nell'indicazione RA poiché l'approvazione ovviamente era focalizzata principalmente sul Indicazione da 2 megapixel o approvazione da 2 megapixel, ma non ero sicuro che ciò potesse cambiare sul retro di questi nuovi dati. Grazie.

David A. Ricks – Presidente e Amministratore Delegato

Grazie Geoff. Andremo a Patrik per entrambe queste domande.

Patrik Jonsson – Senior Vice President e President, Lilly Bio-Medicines

Grazie mille. Siamo molto soddisfatti delle prestazioni di Taltz nel quarto trimestre dell'anno scorso con la crescita di Rx totale con – abbiamo circa il 40%. Se guardiamo ai diversi spazi, prima di tutto, la dermatologia nonostante l'aumento della concorrenza, pensiamo di tenere molto bene il terreno e di mantenere la nostra quota totale di mercato Rx nel quarto trimestre nonostante l'aumento della concorrenza. Inoltre, aggiunto al corpus di prove, abbiamo avuto dati testa a testa (indecifrabili) IL-23 in cui abbiamo nuovamente dimostrato superiorità sulla clearance cutanea e questo è il terzo studio combinato con STELARA in cui abbiamo nuovamente dimostrato superiorità. Quindi abbiamo fiducia nello spazio di crescita continua della dermatologia.

La più grande opportunità per noi rimane quella di essere in reumatologia in cui nel quarto trimestre abbiamo annunciato l'unico IL-17 a dimostrare uno studio diretto di superiorità rispetto a (indecifrabile) e abbiamo riscontrato una significativa accelerazione nel quarto trimestre in termini di novità del marchio e siamo fiduciosi che continueremo a crescere nello spazio reumatologico dove ci sono molte opportunità per noi.

Durante la seconda metà dell'ultimo anno abbiamo anche presentato l'AxSpA non radiografico e questa è un'indicazione in cui vediamo anche molti pazienti che non vengono diagnosticati in modo appropriato e anche se diagnosticati non trattati in modo appropriato. Infine, sia in dermatologia che in reumatologia, un'enorme quantità di pazienti è ancora trattata con anti-TNF-alfa, in dermatologia al 40% e in reumatologia al 70%, e riteniamo che rimanga la più grande opportunità per tutte le nuove risorse per garantire che i pazienti siano essere aggiornato a trattamenti nuovi, moderni, più efficaci e più sicuri.

In termini di Olumiant, beh, non commentiamo le azioni normative per marchi specifici. Continuiamo a esplorare le opzioni per ottenere il dosaggio da 4 milligrammi approvato negli Stati Uniti. Tuttavia, alla luce delle più recenti azioni normative con altri inibitori JAK, siamo anche realistici in termini di aspettative per ottenere 4 milligrammi approvati negli Stati Uniti nel breve termine. But, as Dave mentioned, we are very much encountered by the 2 milligram data of Olumiant in atopic dermatitis and where we are demonstrating — hitting our primary objective in both in terms of at least 75% improvement on skin inflammation, but also in terms of patient reported outcomes improvements on itching. So that is encouraging for us in terms of the Olumiant submission in the US.

Kevin Hern – Vice President of Investor Relations

Thanks, Patrik. Geoff, thanks for your questions. Next caller, please.

Operator

Grazie. Chris Schott from JPMorgan.

Chris Schott – JPMorgan — Analyst

Great, thanks very much. First question was just on the quarterly progression of sales and earnings as we go through 2020. I think last year we saw a depressed first quarter sales relative to the rest of the year that surprised the Street a bit. Should we expect a similar gating of sales in 2020 and are there any particular products we should be watching where I guess 2020 kind of resets its plans could impact those first quarter results.

My second question was just on the Alzheimer's strategy more broadly. How would the approval or I guess the nod of etokimab impact how you're thinking about your pending Alzheimer's readouts and development strategies from here. Grazie mille.

David A. Ricks – Chairman and Chief Executive Officer

Thanks, Chris. We'll go to Josh for the first question and Dan for the second one.

Joshua L. Smiley – Senior Vice President and Chief Financial Officer

Thanks, Chris. If we look at 2020, we don't provide quarterly guidance, but if we look at sort of the trajectory of sales that we'd expect, if you look at our guidance for the full year, we're in somewhere in the high single-digits for sales growth. We'd expect that kind of growth to be pretty consistent through the year. Although, keep in mind, in Q1 we still will have a little bit more of the overhang from things like Cialis, so you might expect to see a little bit more Cialis growth through the year, but pretty consistent.

On an absolute basis though, Chris, we do always see sales in Q1 lower than Q4. A lot of that just has to do with shipping patterns and otherwise. So, again, growth should look good in Q1 relative to the year, absolute sales will be less. I think that's a trend that you see, I'm sure, across almost all companies. There's nothing unique going on there other than normal shipping patterns between Q4 and Q1.

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Chris, thanks for your question on Alzheimer's strategy. Of course, we, like many others, will be watching etokimab closely and of course we'll adapt our plans and thinking to meet wherever we see the regulatory bar placed. But I don't think you should expect us to pivot in our Alzheimer's strategy one way or another. We have placed some pretty important bets. We're excited to see those readouts over time both with solanezumab, but also our own plaque clearing antibody donanemab as well as our tau anti-tau antibody that's in Phase 2. We also have a tau small molecule in Phase 1 and other agents earlier in development. So we'll continue to progress those. We think we have smartly designed trials that will give us important readouts over time.

Kevin Hern – Vice President of Investor Relations

Thanks, Dan. Chris, thanks for your questions. Next caller, please.

Operator

Grazie. Louise Chen from Cantor. Please go ahead.

Louise Chen – Cantor Fitzgerald — Analyst

Hi, thanks for taking my questions here. So first question I have for you is, can you provide more color on what might be driving your stronger volume growth when compared to other companies out there in this space and if this is durable over the longer term. And then my second question for you is, with this growing competition in atopic dermatitis, where do you see Lilly fitting into the evolving treatment paradigm? Grazie.

David A. Ricks – Chairman and Chief Executive Officer

Grazie. So we'll go to Josh for the first question and Patrik for the second.

Joshua L. Smiley – Senior Vice President and Chief Financial Officer

Thanks, Louise. Good morning. I think in terms of volume growth, what we see at a corporate level is a function of our portfolio. As we mentioned, about a little bit less than half of our sales are coming from new products that we've launched since 2014, 10 of those. They're all still in — very much in their growth phases; Trulicity growing at 31% for example, Taltz at 37%.

So we've got a relatively young portfolio. We expect the volume gains that we saw in Q4 to be sustainable between 2020 and 2025 as we mentioned on our guidance call. We expect to see top tier revenue growth over that period. It'll be driven by volume gains; it'll be driven by that cohort of products, as well as the new launches that will expect over this period, including the three that we're planning for this year. You couple that going forward with last generic exposure, then probably most of the companies that we compete against or that you cover and I think that would certainly say to us that the volume gains we're seeing or something that we're planning for and think are sustainable.

Kevin Hern – Vice President of Investor Relations

Thanks, Josh. Patrik?

Patrik Jonsson – Senior Vice President and President, Lilly Bio-Medicines

Well, currently it's estimated that approximately 18 million Americans are suffering from atopic dermatitis and 10 million of those are suffering from severe to moderate atopic dermatitis and the treatment opportunities are very limited. One is saying that they feel atopic dermatitis is pretty much where psoriasis was 15 years ago.

And in the light of that we believe that we are extremely well positioned. As we shared, we are encouraged with the most recent data on Olumiant, both in the US and outside the US, and we have submitted Olumiant for approval in Japan and EU and we'll take regulatory actions in 2020 here in the US and we believe that Olumiant could definitely be an option for patients that are having fear of injection.

And we're also excited about the announcement we made a few weeks ago about our intent to acquire Dermira, and lebrikizumab is the big driver of that deal and we see lebrikizumab based upon its Phase 2b data as the medicine that will at least be competitive with Dupixent and we have an opportunity given the best-in-class differentiating on each.

So overall we believe that we can play a very important role in the field of atopic dermatitis. We built the first oral JAK inhibitor for patients of fear of injections and the potential best-in-class medicine in lebrikizumab.

Kevin Hern – Vice President of Investor Relations

Thanks, Patrik. Louise, thanks for your questions. Next caller, please.

Operator

Grazie. Tim Anderson from Wolfe Research. I apologize, Umer Raffat from Evercore ISI.

Umer Raffat – Evercore ISI — Analyst

Hi, thanks so much for taking my two questions, and both of them are Kevin's favorite topic. So the first one is on CNS penetrance of your GLP-1 and I have two parts on the first one. So there's feedback out there that Trulicity doesn't cross blood-brain barrier very much, perhaps in part because of its size. A, can you comment on that, and in that same question I also want to ask, tirzepatide does not have an IGG. So presumably, it should have good CNS penetration. I just want to make sure I hear your take on the CNS penetrant of both Trulicity and tirzepatide.

Secondly, Dave perhaps for you, so the A4 trial in asymptomatic Alzheimer's, my understanding is it was fully enrolled in December 2017 and at this point it's already past two years in every single patient and by end of 2020 you would have hit a three year landmark in every single patient. So my question is, strategically thinking if regulators are being more accommodating of late, wouldn't it make strategic sense to possibly consider taking an efficacy read at three years, because even at three years it's 2 times the duration of all prior sola and aducanumab trials. Grazie mille.

Kevin Hern – Vice President of Investor Relations

Thanks, Umer, for those questions. This is — Butler Bulldogs basketball is probably my favorite topic, but we don't cover that on the call; this is a close second though. We'll go to Dan for both of these.

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Va bene. Grazie mille. So with respect to CNS penetration of GLP-1s, you're right that these are large molecular weight molecules. Actually both FC fusion molecules like Trulicity and also isolated peptides like tirzepatide. Those modifications to the peptides are what gives them the long half-life that enables once weekly injection and molecules of that size typically don't penetrate the blood brain barrier.

Having said that, we don't see those attributes, blood brain barrier penetration as being important for the efficacy of this class of drugs as evidenced I think by the tremendous efficacy that we've seen with Trulicity and unprecedented efficacy that we've seen with tirzepatide, so I think that addresses that.

With respect to A4, you're right that this is a longer duration trial and really I think any other large Alzheimer's trial has ever been. The reason for that though is because these patients are asymptomatic at the beginning of the trial, so they are very early in the disease course and it takes a great deal of time to let these patients progress in their disease course and it's only through progression of patients on the placebo group and hopefully differential, less progression of patients on therapy that we could hope to see an effective drug. So that's why the design includes such a long follow-up period.

Kevin Hern – Vice President of Investor Relations

Thanks Dan. Umer, thanks for your questions and we'll go to the next caller please.

Operator

Grazie. Tim Anderson from Wolfe Research.

Tim Anderson – Wolfe Research — Analyst

Hi, a question on your PD-1 with an event and really plans for that product outside the US. It seems like last summer when I talked to management it was really described as the China only opportunity with limited potential, but it seems that you may have pivoted in recent months and may have bigger plans to bring them in to other geographies, so I'm hoping you can give us your latest thinking.

And then second question is just on the Dian-Tu Alzheimer's trial, confirming that we should see those results really any time, can you confirm that? And then just how do you view odds of success. It kind of seems to me that it's highly improbable that this will yield positive results for solo, but what are your views? Grazie.

Kevin Hern – Vice President of Investor Relations

Thanks, Tim. We'll go to Anne for the first question and Dan for the second.

Anne E. White – Senior Vice President and President, Lilly Oncology

Well Tim, thanks for the question on Tyvyt and our Innovent collaboration. So as you said, our current focus is on development and commercialization of Tyvyt in China. However, Innovent has been really important and terrific strategic partner to us. And so we're always open to discussing opportunities to expand that for mutual benefit. There's really not more we can say at this time. We're really pleased.

I think as Josh and Dave mentioned, the performance of Tyvyt in China, it's been a remarkable story and really now as you know the only PD-1 that's included on the NRDL list and I think that demonstrates how the NHSA has recognized its clinical value and then we were able to share the great news that we had the first line non-squamous read out at interim that's positive, so we'll be planning to submit that this year and we expect additional readout in first and second line squamous this year with Innovent. So it's been a great product and we look forward to what more we can do here. But thanks for the question.

Kevin Hern – Vice President of Investor Relations

Thanks, Anne. Dan?

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Yeah, Tim, on DIAN, just reminded for everyone that this is dominantly inherited type of Alzheimer's. It's rare and sort of severe and fast progressing form of Alzheimer's disease where we testing solanezumab. Your question on timing of results, we don't have the data yet, but we do expect that this quarter.

In terms of the odds of success, I think it's hard to speculate, but as you know this is a very small trial, small population is being studied and it is as I said a severe form of Alzheimer's. So those factors weigh against it, there is other factors that weight for it. We know that it's driven by mutations here and amyloid over production and has a relatively longer follow-up, but we'll just have to wait and see that data.

Kevin Hern – Vice President of Investor Relations

Thanks, Dan. Tim, thanks for your questions. Next caller, please.

Operator

Grazie. Andrew Baum from Citi.

Andrew Baum – Citi — Analyst

Grazie. A couple of questions. (Technical Issues)

Kevin Hern – Vice President of Investor Relations

Andrew, this is Kevin. Andrew, we are really having trouble hearing you and can't really pick up the question, other than we heard tirzepatide.

Andrew Baum – Citi — Analyst

Is that any better?

Kevin Hern – Vice President of Investor Relations

No, not much, we'll try it.

Andrew Baum – Citi — Analyst

My question is on tirzepatide, talking about your outcome trail. You are running a head-to-head trail versus Ozempic, which you described as a high bar. There is some literature on potentially GIP agonism could potentially be increased in cardiovascular rather than decreasing it, given its evidence is a marker for heightened cardiovascular disease as well as some preclinical data.

Perhaps you can talk to your thoughts on the relevant development literature and then second more broadly we'd like to think that Lilly is perhaps second in place than many of your pears in understanding the direction of this particular administration in terms of healthcare reforms.

There has been some discussions about whether the IPI proposal could be expanded to include Medicare part D drugs rather than just part B. Perhaps you could share your thoughts on what you expect in that direction. Apologies for the long question?

Kevin Hern – Vice President of Investor Relations

Thanks, Andrew. We'll got to Dan for the question on tirzepatide and then Dave on the policy question.

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Yeah, thanks. First of all, just a clarification that tirzepatide trial just head-to-head against Trulicity. Look I think that there is a little bit of literature out there as you referenced about — it's actually GIP-1 but our thinking is really based on the clinical data that we've already obtained with tirzepatide in the Phase 2 trials.

I think everything we see in those trials point to a large cardiovascular benefit for a drug like this, and so that's the driver, that's what gives us confidence is the real clinical data with this molecule. The combination of GLP-1 and GLP-1 gives certain effects which we are able to see. So for example the improved day-1 C control and notably the very dramatic improvement on weight loss, which I think will drive cardiovascular benefits even higher than we saw in Trulicity.

Kevin Hern – Vice President of Investor Relations

Thanks, Dan. Dave?

David A. Ricks – Chairman and Chief Executive Officer

So on the policy front, we continue to advocate for change in the US system because although we're in a — as an industry and certainly as Lilly a deflationary price environment those savings are not reaching consumers at the pharmacy counter. And so either through a combination of passing through a transparency of those discounts or insurance reform, we're for change. And our focus is primarily right now with the legislative pathway on both those fronts. There is one more vehicle probably left in this Congress to work on those, but progress is difficult in Congress. So we continue to advocate for change on the (Indecipherable) though.

As it relates to IPI, this proposal was part of the blueprint in spring of '18. It's been sitting out there for a while. We've yet to see any draft guidance for proposed rulemaking or any version of this in detail. There is always a lot of swirling rumors about it, including expanding it to other parts of government programs or changes to it in terms of the objectives.

We see it largely as misguided, primarily because in Part B patients hardly have any cost sharing to begin with. So if we're worried about out-of-pocket costs for patients, IPI will do very little, it's mostly just a punitive measure against the industry going back to decisions made on European pricing sometimes decades ago. It won't probably change those prices in Europe if that's the present goal, and it certainly won't change the affordability equation for patients in the US. So we oppose it for those reasons.

That said, it's administrative potential action and want to read it if it comes out and decide what to do from there, but it pretty much is a difficult thing to support for our industry and you'll probably see pharma universally oppose it. So we'll wait and see.

Kevin Hern – Vice President of Investor Relations

Thanks, Dave. Andrew, thanks for your questions. Next caller, please.

Operator

Seamus Fernandez from Guggenheim.

Seamus Fernandez – Guggenheim — Analyst

Thanks for the question. So maybe that the first question is really for Josh. Josh, can you just help us understand the progression of margins as we move through the balance of next year, or sorry this year in 2020.

When I look at the original guidance from this year, I think you guys had said 28% was the target. I think ultimately we ended up at 27.2% at the final point in the year. But on the guidance call in December, you stated and reiterated the 31% target. Can you just help us understand the past to that 31% just because the second half of this year I think kind of came in below investors' expectations to some degree, and we're just trying to understand a little bit better the very strong move in margins going higher. Obviously, the pieces of guidance makes sense. I think we're just trying to understand the path as we move through the balance of the year.

And then the second question, the pegilodecakin update, thanks for that. Appreciate the understanding and the challenges. Can maybe — Jay can just sort of update us on his thoughts and also Dan, could update us on your thoughts for the growth of the oncology development portfolio and directionally where you're headed? Grazie.

Operator

Josh, and then Dan.

Joshua L. Smiley – Senior Vice President and Chief Financial Officer

Grande. Thanks, Seamus. In terms of margin this year, again we reiterated that we are on track for 31%. And the one thing that we have said is Q1 will likely be below 31% that's mostly a function of the less absolute sales that I talked about on a prior question, on top of a relatively fixed opex absolute amount.

So I think as you look or model opex for the year, we see that it's pretty constant on an absolute base quarter-over-quarter. Of course some small variation, and then you'll see absolute sales dollars on a quarter over quarter basis grow. So we don't expect to be at 31% in Q1, but that's — again that the function of the dynamics of the growth through the quarters.

Remember though in terms of how to get there in totals for the year, we said for 2019 that we would grow our R&D at a unusual growth rate in 2019 as we scale up programs like tirzepatide and Mirikizumab. In 2020 those programs are running at more like full speed. We are able to bring and a an asset like Dermira and keep that with relatively smaller growth rate and R&D.

So I think we are confident that the sales growth that we are seeing that we talked about in Q4 should persist for the year on top of a slower growing opex that we can predict and manage, will get us to 31% and again I wouldn't be too concerned in Q1 if we are not at that level, but you should expect it as we move through the year.

Kevin Hern – Vice President of Investor Relations

Thanks, Josh. Dan?

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Thanks for the question on oncology strategy. Of course on the last call we talked about our Loxo Oncology at Lilly and how that's changed oncology strategy and we're quite pleased with the progress that we made on executing against that strategy. You can see some portfolio changes in our pipeline update and we also talked about the three key early stage programs, 305, KRAS and SERD, all of which are progressing in the clinic.

While we said we're going to focus on a lot of our resources on high probability, biology that's well understood, bets like those, we will also from time to time continue to pursue more novel biology, higher risk, high reward bets like Pegilodecakin was and that will be a smaller part of our portfolio in the future.

Kevin Hern – Vice President of Investor Relations

Thanks, Dan. Seamus, thanks for your question. Next caller, please.

Operator

David Risinger from Morgan Stanley.

David Risinger – Morgan Stanley — Analyst

Grazie mille. I have two questions, first just going back to the high level on GLP-1s and Alzheimer's. Novo has recently conveyed enthusiasm about the potential for GLP-1 treatment in Alzheimer's. Could you just comment on your view of whether GLP-1 treatment over a few years can actually change the progression of Alzheimer's? And then second with respect to high dose Trulicity, could you please frame what we should focus on when we see the Phase 3 data and your planned positioning of that product? Grazie.

Operator

Thanks, Dave. We'll go to Dan for the first question and then Mike for the second one.

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Grazie. Of course we are aware of the comments that Novo has make on GLP-1 and Alzheimer's disease and the potential there. Look forward to seeing data from that first trial. Look I think we know that GLP-1 treatment has beneficial cardiovascular outcomes, including we've seen reductions on stroke, probably that's a tip of the iceberg and there's other micro infarcts that are decreased by GLP-1 therapy. That could over time contribute to a slower rate of cognitive decline. Is there a direct effective of GLP-1s on Alzheimer's pathology? I think that's not yet known.

So we'll watch how the field evolves. If it turns out that there are great opportunities, I think we have the best-in-class incretin in the form of tirzepatide and we'd be opened to future opportunities for it.

Operator

Thanks, Dan. Mike?

Mike Mason – Senior Vice President and President, Lilly Diabetes

David, thanks for your question on our favorite subject. It proves we had another great quarter, growing by 32% on volume and 29% on revenue. We are still quite excited about the overall GLP market growth. The 52-week rate was at 29.7% while the monthly rate in December was at 31.5%. So the market continues to grow and Trulicity continues to hold up in a very strong market share leadership position outpacing TRS class growth in the face of some of GLP type product launches.

So we expect that both the new Trulicity rewind, as well as the high dose label enhancements will continue to drive class growth as well as solidify our market leadership position place. So we're excited about that. I think as you take a look at the results of that, take a look at increased our A1C results, as well as the weight loss results.

And what we think is the strength of Trulicity is the fact that you get real world benefits by having powerful efficacy simply delivered and this will just give people using Trulicity another reason to stay on it.

Kevin Hern – Vice President of Investor Relations

Thanks, Mike. David, thanks for your question. Next caller, please.

Operator

Terence Flynn from Goldman Sachs.

Terence Flynn – Goldman Sachs — Analyst

Great, good morning and thanks for taking the questions. The first one is on tirzepatide and the CVOT trial. I was wondering if you can share any more details on the stats or powering assumptions there, as well as the discontinuation rate that you're assuming in the arms of the trial.

And then for Emgality you mentioned, looking into the next phase of growth here in the primary care market, what are some of the markers beyond obviously sales that we should look to in terms of gauging successful uptake there and then any thoughts on potential impact from oral CGRP? Grazie.

Kevin Hern – Vice President of Investor Relations

Okay, thanks. We'll go to Dan for tirzepatide and then Mike and then Patrik for the oral CGRP question.

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Yeah, thanks for your question asking for more detail on the tirzepatide SURPASS-CVOT trial design. I think at this moment we don't sort of comment on any of the finer details around clinical trial design and dropout rates. But I would say that having a trial like this where it's a head-to-head with two great active drugs, one on each arm should be a very compelling opportunity for enrolling physicians and a great opportunity for treatment for patients as well. So I think those kinds of factors should help with both enrollment and retention in the trial.

Kevin Hern – Vice President of Investor Relations

Go ahead, Mike.

Mike Mason – Senior Vice President and President, Lilly Diabetes

I think as we look at the opportunity and really learn from what providers and payers want, they want active competitors. I think this provides a lot of value and lot of insights into the incremental value of one product over another product. And so obviously doing a head-to-head trial versus Trulicity is a bold bat, but I think it really reinforces the confidence we have in tirzepatide in its population. So we're very excited about the study. It is a bold bat, but one that we are very excited about the potential of this product and CVOT.

Kevin Hern – Vice President of Investor Relations

Thanks, Patrik.

Patrik Jonsson – Senior Vice President and President, Lilly Bio-Medicines

Grazie. If you look at on the prevention market with currency 6 million patients eligible for prevention treatment in the US, but only 3 million of those are being treated. So that's a big opportunity for us with increased competition in the market place as well to drive patient activation. And specifically for Emgality, if you look from the prescriber base today, it's relatively limited and only 15% of our targets are currently, regularly prescribing Emgality, so that's where we see a tremendous opportunity both in specialty care, as well as in primary care.

In terms of the oral CGRP, I think it's important to have in mind that they are only approved or will be approved for the treatment of acute migraine this year and the prevention indication is coming later on. We are very confident with the profile of Emgality, particularly taking into account that we are now the market leader and the preferred CGRP in the marketplace and particularly with a differentiation, we have been labeled with both efficacy of 50/75 and 100% level and also the convenience that the device offers from the same device platform as Trulicity.

The oral CGRPs will be competing in that huge space and we are also very excited about the announcement that was the pre-publication notice from the DEA that was publicly displayed this morning and will result in an announcement in the Federal Register tomorrow, enabling us to bring Reyvow to the marketplace, probably late next week. And that's where we have a tremendous opportunity to bring more value in the space of acute migraine and for the first time we'll be able to talk about complete pain elimination already after two hours with one single dose of Reyvow and not just compete pain elimination, but also complete elimination of bothersome symptoms such as sun phobia, light sensitivity and nausea.

So we believe that we have very well positioned us in the preventive space as well as the acute phase but patient activation will be key and that's something that would be beneficial with also new entrants in the marketplace.

Kevin Hern – Vice President of Investor Relations

Thank you, Patrik. Terence, thanks for your questions. Next caller, please.

Operator

Steve Scala from Cowen.

Steve Scala – Cowen — Analyst

Grazie. I have a couple of questions. I'll take the other side of an earlier question and suggest it would be surprising if DIAN-TU didn't hit it endpoint given the signal you saw in the expedition trials and the fact that DIAN-TU is testing a higher dose in a more homogeneous population for a longer time with the tailor made endpoint.

So Dan, I'm trying to understand your pessimism and maybe you could please tell us on which of the points that I stated you disagree? And then there are four components to the primary endpoint. Do you need to hit all four to achieve success? Grazie.

Kevin Hern – Vice President of Investor Relations

Thanks, Steve. Dan?

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Okay, Steve. So look most of the commons you said are right. The importance of those factors in the outcome of the study is what we don't know, and there are other factors as I said earlier going against us here. The one that should give anyone the most pause I think is the small sample size and Alzheimer's trials are — I think even in large trials notorious for surprising us because of the heterogeneity of the fact and variability in the outcome measures. So it's factors like that that could make it difficult to really know what is true.

Look I still think it's regardless an interesting scientific question, a partner experiment we'll look forward to seeing the data. With respect to the specifics around the composite, I think the nature of a composite is that you have to hit the overall composite score as the primary endpoint, which could be driven by the various sub-measures or not, but as you point out this was custom made for this trial.

Kevin Hern – Vice President of Investor Relations

Thanks, Dan. Steve, thank for your questions. Next caller, please.

Operator

Navin Jacob from UBS.

Navin Jacob – UBS — Analyst

Thanks for taking the questions. Just on Verzenio, Pfizer has slightly delayed its IBRANCE adjuvant trial PALLAS to early 2021. Wondering — and they highlight the event rate progressing much slower. Wondering how relative to your expectations the event rate has been progressing and MONARCH? And is the time line still for an early 2021 readout, and any color on the potential for an interim would be appreciated? That's on Verzenio.

And then just on Humalog, I think your press release suggested that pricing in the US benefit from a better segment mix. Is that because of the volume shift to the Humalog authorized generic and that's assuming that the authorized generic is being recorded within the Humalog revenue line. I just wanted any — if you can provide any clarity on that. Grazie mille.

Kevin Hern – Vice President of Investor Relations

Great, thank you. We'll go to Anne for the question on Verzenio and Mike for the question on Humalog.

Anne E. White – Senior Vice President and President, Lilly Oncology

Navin, thanks for the question on Verzenio. So as you know we have not disclosed any interim analysis. Now this is an event-driven trial similar to PALLAS, but our estimates make us quite confident that we are looking at a readout in the first half of 2021. So we continue to expect that and as you know the trial unrolled remarkably well and so we're able to roll ahead of schedule, which helps obviously drive (Indecipherable) rates for that.

And again we specifically designed this trial with a high risk population and that was both a strategy of where we believe that Verzenio would really differentiate, but as well it drove the speed of the trial. So again we feel quite confident in that.

As you know the positive MONARCH-2 overall trial results, particularly as we saw those with primary resistance and visceral disease, really an eight month survival benefit in the patients with visceral disease really reinforce our confidence and the potential, the success of MONARCH. So we designed it with that high risk population and really used what we think are thoughtful selection factors the physicians use today to make prescribing decisions in that adjuvant setting. So things like the number of nodes involved, the tumor size and the measure of proliferation. And so we feel quite confident in the design of the study and again look forward to the readout in 2021.

Kevin Hern – Vice President of Investor Relations

Thanks, Anne, Mike?

Mike Mason – Senior Vice President and President, Lilly Diabetes

Thanks for your question on Humalog. The biggest drive in Humalog segment mix is the fact that with Humalog uptake they are taking volume away from Humalog in Medicaid since our Medicaid rebate rates are essentially 100%, that TRx decline actually doesn't have — had a flat to positive impact on net revenues for Humalog.

Navin Jacob – UBS — Analyst

And just to confirm the AG products are consolidated into the Humalog.

Kevin Hern – Vice President of Investor Relations

Thanks, Mike. Navin, thanks for your questions. We'll go to Dave for the close.

David A. Ricks – Chairman and Chief Executive Officer

Okay, thank you all. I appreciate the participation in today's earnings call and your interest in Eli Lilly and Company. 2019 was a strong year for the Company and we anticipate another great year in 2020. We remain focused on executing our innovation-based strategy to bring new medicines to patients and create value for our shareholders. With our strong commercial portfolio complemented by our pipeline of exciting opportunities, Lilly continues to be a compelling investment.

Thanks again for dialing in. Please follow-up with our Investor Relations team if you have any additional questions we weren't able to address on today's call. Hope you have a great day.

Operator

Grazie. Ladies and gentlemen, this conference is available for replay after 11.15 today through January 30, 2021. You may access the AT&T teleconference replay system at any time by dialing 1-800-475-6701 and entering the access code of 2544079. Those numbers again are 1-800-475-6701 and internationally 320-365-3844 with an access code of 2544079. That does conclude our conference for today. Thank you for your participation, and for using AT&T Executive Teleconference. You may now disconnect.

Duration: 68 minutes

Call participants:

Kevin Hern – Vice President of Investor Relations

David A. Ricks – Chairman and Chief Executive Officer

Joshua L. Smiley – Senior Vice President and Chief Financial Officer

Daniel M. Skovronsky – Senior Vice President and Chief Scientific Officer

Patrik Jonsson – Senior Vice President and President, Lilly Bio-Medicines

Anne E. White – Senior Vice President and President, Lilly Oncology

Mike Mason – Senior Vice President and President, Lilly Diabetes

Geoff Meacham – Bank of America Merrill Lynch — Analyst

Chris Schott – JPMorgan — Analyst

Louise Chen – Cantor Fitzgerald — Analyst

Umer Raffat – Evercore ISI — Analyst

Tim Anderson – Wolfe Research — Analyst

Andrew Baum – Citi — Analyst

Seamus Fernandez – Guggenheim — Analyst

David Risinger – Morgan Stanley — Analyst

Terence Flynn – Goldman Sachs — Analyst

Steve Scala – Cowen — Analyst

Navin Jacob – UBS — Analyst

More LLY analysis

All earnings call transcripts

Se il 2019 è stato l'anno in cui la pelle luminosa e senza trucco è diventata la massima espressione esterna di cura di sé dall'interno verso l'esterno, il futuro appare ancora più verde e pulito.

I consumatori sono auto-istruiti più attivamente: controllano le etichette degli ingredienti, guardano i video dall'estero per una prospettiva globale e diventano curiosi della bellezza indipendente, che spesso comporta l'uso di ingredienti che potresti trovare nel tuo piatto piuttosto che inventati in un laboratorio.

RELAZIONATO: 6 modi per mangiare e bere la tua pelle più sana

La trasparenza non riguarda solo i marchi che condividono apertamente il loro processo di produzione e la loro formulazione. È anche un'estetica. I consumatori sono più interessati a rendere la loro pelle una base impeccabile per il trucco, se necessario, piuttosto che coprire le imperfezioni. Forse questo spiega perché, secondo il gruppo NPD, una società di ricerche di mercato che prevede tendenze di bellezza, le vendite di prodotti per la cura della pelle sono cresciute del 13 percento nel 2018, raggiungendo i 5,6 miliardi di dollari, mentre le vendite di prodotti per il trucco sono aumentate dell'1 percento relativamente modesto.

“Le persone vogliono sfoggiare la loro bella – che ora sanno significa pelle sana”, afferma la dermatologa di New York Rachel Nazarian, MD. Lei ipotizza che le persone siano più consapevoli della loro pelle perché celebrità e influencer sono facilmente accessibili sui social media e piattaforme come Instagram offrono l'aerografo sotto forma di filtri. Questi sono solo alcuni dei fattori che potrebbero stimolare un crescente interesse per la cura della pelle.

“In definitiva”, aggiunge, “il settore della bellezza è in continua espansione e gli influenzatori del benessere stanno aumentando la visibilità di una pelle sana, una pelle bella e rendendola un obiettivo desiderabile per le masse”.

Ecco cosa puoi aspettarti di vedere di più in futuro.

1. La bellezza pulita, nel bene o nel male, è in agguato

La bellezza pulita è un termine vago ma onnipresente. Qualunque cosa con ingredienti biologici o naturali può essere commercializzata come “pulita”, ma il problema, come osserva il Dr. Nazarian, è che “nessuno di questi termini è regolato. Significano qualunque cosa la società o il consumatore scelga di voler dire. “

“Biologico” può significare più cose, ma in genere significa che non sono stati utilizzati pesticidi o che la maggior parte – sebbene non necessariamente il 100 percento – degli ingredienti siano coltivati ​​biologicamente.

preoccupazioni

Un problema è che sebbene la Food and Drug Administration (FDA) abbia approvato la Federal Food, Drug and Cosmetic Act nel 1938, la maggior parte degli ingredienti utilizzati nei cosmetici sono esenti dalla regolamentazione federale. Mentre ci sono marchi e negozi che affermano di vendere solo prodotti puliti, l'ironia è che un prodotto naturale non è sempre necessariamente migliore o più sicuro di un prodotto con composti chimici sintetici, afferma Nazarian.

“I conservanti rendono i nostri prodotti più sicuri, non meno sicuri”, afferma Nazarian. “La maggior parte dei conservanti per la cura della pelle può prolungare la shelf life del prodotto e prevenire la crescita di funghi e batteri. Anche se non riesci a pronunciare gli ingredienti, ciò non significa che sia dannoso per te. Puoi pronunciare “arsenico”, ed è naturale, e ancora non lo vorrei nella mia cura della pelle. I grandi nomi scientifici sono spesso più sicuri perché sono standardizzati e regolati da aziende farmaceutiche e dal governo “.

Il dermatologo certificato Ava Shamban, MD, che vive a Beverly Hills, in California, è d'accordo. “È folle pensare che tutto ciò che viene prodotto in un laboratorio debba essere evitato”, afferma, “soprattutto se si hanno condizioni della pelle che devono essere trattate. È come dire: “Non prenderò questi antibiotici perché sono stati prodotti in un laboratorio”. Quelli non sono i cattivi. “

Secondo la Harvard Health Publishing, ci sono almeno alcuni degli ingredienti per la cura della pelle, tra cui alcuni derivati ​​della vitamina A, petrolato, miscele di fragranze e formaldeide. Ma non gettare immediatamente tutti i tuoi cosmetici. Sono necessarie ulteriori ricerche per stabilire definitivamente un grave rischio per la salute derivante dall'esposizione topica a basse dosi a queste sostanze chimiche.

La linea di fondo

Non esiste una definizione chiara di cosa significhi pulito. “Non esiste uno standard industriale e ogni marchio può avere una propria definizione di cosa sia un marchio pulito”, afferma Dana Kreutzer, senior analista di prodotti di consumo presso Kline a New York City, una società di ricerche di mercato globale che studia le tendenze del settore della bellezza. “Tuttavia, marchi come Drunk Elephant e Biossance sono considerati puliti e clinici, il che significa che non sono naturali al 100%, hanno determinati ingredienti sintetici, ma dichiarano di escludere dalla lista ingredienti” sospetti “.”

Cosa controllare

• Drunk Elephant Slaai Detergente per fondere il burro, $ 34, DrunkElephant.com
• Indie Lee Gentle Daily Peel, $ 65, IndieLee.com
• Acaderma Lunar Glow Illuminate Serum, $ 120, Acaderma.com
• Tula Glow & Get It It Balm, $ 28, Tula.com
• Vintner's Daughter Active Botanical Serum, $ 65, VintnersDaughter.com

RELAZIONATO: 6 fatti affascinanti che probabilmente non hai mai saputo della tua pelle

2. La bellezza del CBD sta diventando ancora più grande nel 2020

Il cannabidiolo (CBD) è un estratto della pianta di canapa, che è un cugino della pianta di marijuana, secondo la Harvard Health Publishing. Ma poiché le piante di canapa contengono non più dello 0,3 percento di THC, l'ingrediente psicoattivo tetraidrocannabinolo che aumenta le persone, il CBD non dovrebbe darti fastidio. Ma ciò non ha impedito ai prodotti di CBD di generare un enorme ronzio nel mercato della bellezza.

L'anno scorso ha visto un'esplosione di popolarità nelle lozioni al CBD e in altri balsami di bellezza al cannabidiolo. Come Harper's Bazaar rapporti, c'è stato un aumento del 368 percento nelle ricerche di Google sulla cura della pelle con CBD, il che suggerisce un assalto di nuovi marchi e prodotti in arrivo.

Jennin Middleton, MD, direttore di bellezza della società di ricerche di mercato WGSN – che segue le tendenze del CBD dal 2015 – afferma che l'ascesa della cura della pelle al CBD può essere compresa come parte del più ampio passaggio verso prodotti di bellezza e benessere più naturali. “Lo stiamo vedendo usato in tutto, dai rilassanti scoppi di sonno alle nebbie dei cuscini e per aiutare i crampi periodici o con il dolore associato ai tacchi alti. Ora è diventato un prodotto del momento, con le sue promesse di curare tutti i disturbi “, afferma il dott. Middleton.

Tranne il fatto che non sappiamo cosa possa curare il CBD, se non altro, secondo l'attuale corpus di ricerche. Tuttavia, i primi risultati offrono indizi.

Diversi studi, tra cui un articolo pubblicato a luglio 2014 in Il Journal of Clinical Investigation, suggeriscono che il CBD può aiutare a ridurre la produzione di sebo, l'olio che viene prodotto in eccesso nella pelle a tendenza acneica. Questa ricerca preliminare suggerisce che il CBD può svolgere un ruolo nel trattamento dell'acne.

Inoltre, uno studio pubblicato nel numero di marzo-aprile 2019 della rivista italiana La Clinica Terapeutica scoperto che i balsami di CBD senza l'ingrediente psicoattivo THC sono un trattamento topico sicuro ed efficace per i disturbi infiammatori della pelle, compresa l'acne.

“Se hai una condizione della pelle come l'acne, il CBD agisce a livello follicolare per migliorare gli oli cutanei (e) il rilascio di cellule scartate e sopprimere i batteri in modo da non sviluppare nuovamente la stessa situazione”, afferma Vancouver, Washington– basato Philip Blair, MD, un consulente di Elixinol, la linea ingeribile di CBD che ha recentemente lanciato Sativa, una linea per la cura della pelle della canapa. “La maggior parte dei prodotti di bellezza si trova sulla superficie della pelle, ma il CBD penetra in profondità per ripristinare la funzione naturale della pelle. Questa è la bellezza del CBD: stai trattando sia i sintomi che la causa, migliorando così la funzione generale del tessuto “.

Il Dr. Shamban afferma che il CBD ha importanti proprietà antinfiammatorie e ritiene che accadranno cose interessanti con la cura della pelle al CBD. “È come se ci avessero nascosto queste informazioni a scuola di medicina”, afferma. “Ci sono tutti questi recettori dei cannabidoidi su ogni cellula del corpo che non sembrano essere collegati al sistema delle endorfine – ovvero i centri del dolore e del piacere – quindi perché non sapevamo di questi recettori prima? C'è altro da determinare, ma penso che sia molto promettente “.

preoccupazioni

Mentre Nazarian riconosce che il CBD può aiutare a migliorare le condizioni infiammatorie se usato localmente, rimane diffidente. “Le persone associano canapa e cannabis a (essere) naturali e la scienza è piuttosto vaga su ciò che effettivamente fa il CBD”, afferma Nazarian. “Il mercato del CBD non è stato standardizzato o regolamentato e, sebbene la scienza dietro di esso sia ancora nelle fasi iniziali, il mercato della cura della pelle ha fatto progressi e pubblicizzato i prodotti oltre ciò che sappiamo per certo”. È importante sottolineare che, in uno studio pubblicato su Novembre 2017 a JAMA, i ricercatori hanno analizzato 84 prodotti di 31 categorie e hanno scoperto che il 70% di essi aveva etichettato la percentuale errata di CBD.

Noëlle S. Sherber, MD, dermatologo certificato a bordo con sede a Washington, DC, adotta anche un approccio cauto al CBD nella cura della pelle. “Attualmente non sto consigliando ai miei pazienti di utilizzare prodotti a base di CBD, poiché la FDA ha segnalato che il CBD ha il potenziale per danneggiare effetti collaterali, come lesioni al fegato e interazioni farmacologiche”, afferma.

La linea di fondo

Ci sono alcuni nuovi studi interessanti che suggeriscono che il CBD può essere utile per controllare l'acne, ma la ricerca è ancora in corso. “Il CBD ha (è stato) dimostrato di avere effetti sulle ghiandole sebacee che lo rendono promettente per il trattamento dell'acne, ma fino a quando non sapremo esattamente quale forma funziona meglio e sappiamo che stai acquistando la stessa struttura quando acquisti nei negozi, io resisterebbe all'utilizzo dell'olio di CBD per i trattamenti dell'acne “, afferma Nazarian. “La scienza ha una strada da percorrere.”

Cosa controllare

• Naturopathica Chill Full Spectrum CBD & Kava Balm, $ 76, NaturopathicaChill.com
• Extract Labs CBD Face Cream, $ 90, ExtractLabs.com
• Herbivore Emerald CBD + Adaptogens Deep Moisture Glow Oil, $ 58, HerbivoreBotanicals.com
• Farmacy Better Daze Ahead, $ 68, FarmacyBeauty.com
• Physician Grade Prime CBD Revive Drops, $ 48, PhysiciansGrade.com
• Crema mani alla canapa Sativa, $ 14,99, Elixinol.com

RELAZIONATO: Cosa sapere sui prodotti per la cura della pelle al CBD

3. La bellezza sostenibile o verde rimarrà di tendenza

La tendenza alla bellezza verde, o sostenibile, chiamata anche eco-bellezza, fa parte di una più ampia filosofia di vita, un approccio alla cura di sé che enfatizza il fatto di non essere così assorbito allo specchio da far cadere la terra sul marciapiede.

“La sostenibilità è un movimento molto positivo dalla bellezza alla moda e oltre”, afferma il dott. Sherber. “Il termine” bellezza verde “ha assunto molti significati, ma il filo più comune è una completa evasione o riduzione al minimo dei conservanti sintetici e della fragranza sintetica. EcoCert è un'organizzazione indipendente che ora sta dando una certificazione Cosmos ai prodotti di bellezza verde per vedere se aderiscono a principi come ingredienti non OGM e privi di prodotti petrolchimici. ”Ciò significa che nessuno degli ingredienti è prodotto da organismi creati in laboratorio utilizzando la modificazione genetica o tecniche di ingegneria e che i prodotti sono privi di un lungo elenco di sostanze chimiche, tra cui la cosiddetta “sporca dozzina”, che sono tutti derivati ​​dal petrolio e sono noti per essere dannosi.

Come osserva Sherber, la bellezza verde non riguarda solo gli ingredienti per la cura della pelle, ma anche la confezione. Un numero crescente di aziende di bellezza sta spostando gli imballaggi lontano dalla plastica monouso, ad esempio, e creando contenitori riciclabili. Unilever, la società madre di Dermalogica, Murad, Kate Somerville e REN Clean Skincare, ha giurato di ridurre il suo utilizzo di materie plastiche specifiche negli imballaggi di quasi la metà entro il 2025, e L'Oreal ha promesso di passare a tubi cosmetici a base di carta nel 2020.

preoccupazioni

Alyssa Behrendt, analista di Kline di New York City, afferma che una possibile ragione per cui la bellezza verde è la tendenza più discussa del momento è che ha molti significati. “È un prodotto? Confezione? Responsabilità sociale? Trasparenza? ”Chiede Behrendt. “Le aziende stanno cercando diversi modi per diventare più sostenibili, ma come si fa a realizzare un packaging di lusso sostenibile? I marchi sono pronti a rinunciare alle campane e ai fischi di imballaggi di lusso per alternative meno allettanti? ”

La linea di fondo

Se stai gestendo una condizione infiammatoria della pelle come l'acne, la rosacea o la psoriasi, è consigliabile consultare un dermatologo quando si effettuano scelte per sostenere la salute della pelle e il pianeta allo stesso tempo. “Quando si tratta di bellezza sostenibile, ascolta la scienza, non l'hype”, afferma Nazarian. “Alcuni prodotti possono etichettarsi rapidamente come” naturali “o” organici “, ma questi termini non sono monitorati o termini legali e molti hanno descrizioni vaghe di come si qualificano per utilizzare l'etichettatura. Parla sempre con il tuo dermatologo certificato in merito alle tue preoccupazioni in merito ai prodotti e alla cura della pelle, non solo per sapere come trovare quello che stai cercando, ma quando ne vale la pena anche per usare quello che stai cercando “.

Cosa controllare

• The Detox Market Best of Green Beauty Box, $ 159, TheDetoxMarket.com
• Odacité Bioactive Rose Gommage, $ 62, Odacite.com
• Osea Hyaluronic Sea Serum, $ 88, OseaMalibu.com
• Pai Rosehip BioRegenerate Oil, $ 44, PaiSkincare.us
• Rahua Hydration Shampoo, $ 34, Rahua.com

4. La cura della pelle sarà ancora più personalizzata, grazie alla tecnologia

Poiché la tecnologia rende più semplice la consegna di formule di prodotti più personalizzate, i marchi si stanno dando da fare per offrire esperienze di cura della pelle personalizzate alle masse. La cura della pelle su misura – ovvero i prodotti con formulazioni personalizzate – sarà grande. Middleton ritiene che questo mercato fonderà la bellezza e la scienza in modi nuovi ed entusiasmanti: “La cura della pelle su misura guadagnerà trazione, compresi i prodotti basati su dati biometrici personali che tengono traccia dei cambiamenti ormonali e, quindi, delle esigenze di cura della pelle”.

Per ora, tuttavia, la personalizzazione è generalmente limitata ai quiz, che Naira Aslanian, project manager del gruppo di prodotti di consumo di Kline a New York City, afferma può aiutare a identificare il profilo e le preferenze di un consumatore. “Hairstory e Madison Reed (sono) marchi che hanno avuto successo presentando un elenco definito di prodotti che incoraggiano i visitatori del sito a rispondere ai quiz prima di acquistare o sfogliare i prodotti per garantire che ricevano il prodotto giusto per le loro esigenze individuali di capelli”, afferma Aslanian.

Marchi per la cura della pelle come Vitruvi e The Buff usano anche quiz per personalizzare gli oli per il viso e il corpo. Formulano miscele specifiche di ingredienti in base alle risposte alle domande che identificano le preoccupazioni individuali, dall'acne allo sordo alle cicatrici, e distribuiscono miscele personalizzate uniche per ogni consumatore.

Marchi come Mxt e Skinsei consentono ai clienti di creare le proprie formule per i regimi di cura della pelle basati su quiz più elaborati che analizzano tutto, dall'esposizione ai raggi UV e dalla qualità dell'aria dove vivi a quanta acqua bevi e quanta attività fisica fai. Questi dati consentono loro di sviluppare profili più completi. “Dopo che i consumatori hanno creato un profilo, il team di sviluppo formulerà un prodotto per rispondere alle preoccupazioni e agli obiettivi della pelle, oppure i clienti potranno scegliere gli ingredienti per formulare il proprio prodotto”, afferma Aslanian.

Mentre questi approcci alla cura della pelle personalizzata sono ancora abbastanza basilari, i test del DNA e l'IA stanno diventando più frequentemente utilizzati. Molti dispositivi di bellezza a casa, ad esempio, utilizzano app per diagnosticare problemi di pelle ed educare gli utenti sul loro tipo di pelle, che, afferma Aslanian, “elimina l'errore dell'utente e la diagnosi errata che possono verificarsi in altri quiz sul profilo di personalizzazione”.

Shamban ritiene che questo sia solo l'inizio. Nel prossimo futuro, “rascherai il lato della pelle e l'interno della bocca”, dice. “E guarderanno il tuo microbioma, guarderanno i tuoi ormoni, la tua espressione del DNA di vari geni, perché l'età sulla patente non ha nulla a che fare con l'età della tua pelle”. Ad esempio, se tu ' preoccupato per le rughe e desidera anti-invecchiamento, il marchio creerebbe una formula ricca di vitamina C, resveratrolo, acido ialuronico e un po 'di niacinamide. “Sarà un po 'più costoso della massa, ovviamente”, afferma Shamban, “ma la moda lo è sempre”.

preoccupazioni

La principale preoccupazione per la tendenza su misura è che la tecnologia non è attualmente in grado di mantenere la promessa di una vera personalizzazione oltre il livello dei quiz. “In questo momento quello che stiamo usando è così antiquato”, afferma Shamban. “È come, okay, ho la pelle mista, o sono grassa, o ho 25 anni e ho 55 anni. E quindi è come dire che un reggiseno si adatta a tutti, e non è così. Ora puoi ottenere alcune cose su misura, ma non è quello che sarà in futuro. “

La linea di fondo

“Un regime individualizzato di cura della pelle può essere ottenuto da una consultazione con un dermatologo certificato che può esaminare la tua pelle e discutere i tuoi obiettivi e le sfide”, afferma Sherber, che crede che “su misura” sia diventato una parola d'ordine in salute e bellezza. “Per quanto riguarda l'intelligenza artificiale o altri mezzi digitalizzati per personalizzare un regime ottimale, c'è un modo per procedere prima che sia affidabile.”

Cosa controllare

RELAZIONATO: 10 cose che la tua pelle sta cercando di dirti e come rispondere

5. L'estetica non invasiva diventerà più ampiamente disponibile

Secondo Aslanian, i servizi estetici non invasivi aumenteranno nel 2020 e le destinazioni che offrono questi servizi si concentreranno sulla fascia demografica più giovane offrendo trattamenti semplificati a prezzi convenienti. Pensa “drive-thru Botox”, come Il New York Times l'ha chiamato, facendo riferimento a posizioni che rendono le neurotossine e il filler facili come ottenere uno scoppio.

Caso in questione: Botox è arrivato ai grandi magazzini. La nuova ammiraglia di Nordstrom a Manhattan offre a lei e ad altri servizi non invasivi del momento come filler per le labbra, microneedling e terapia al plasma ricca di piastrine nel suo reparto di bellezza multilivello.

Una volta un trattamento solo per i ricchi e famosi, Botox è diventato una parola familiare. Ed è sempre più ricercato evitare i segni dell'invecchiamento prima che inizino. Secondo un rapporto del 2019 dell'American Academy of Facial Plastic and Reconstructive Surgery, tre quarti dei chirurghi plastici facciali hanno riportato un aumento dei pazienti di età inferiore ai 30 anni nel 2018, e questi numeri sono in aumento. Secondo Tempi di dermatologia, l'idea è meno di trattare i segni dell'invecchiamento che si stanno già verificando piuttosto che trattenerli molto prima che inizino, una moda che Shamban e altri chiamano “prejuvenating”.

“Quello che sta accadendo è che i millennial sono molto consapevoli di tutte queste procedure, che per loro fanno parte della toelettatura”, afferma Shamban. “Dal Botox al rafforzamento dei tessuti per migliorare la cura della pelle, entrano e vogliono tutto. E se inizi prima, invecchi in modo diverso e abbiamo i dati per supportarlo. ”Ad esempio, uno studio sui gemelli ha rivelato che Botox era sicuro ed efficace per ridurre le rughe sulla fronte e intorno agli occhi per un periodo di 13 anni periodo.

preoccupazioni

“Ho molte preoccupazioni per quanto riguarda l'offerta Nordstrom di Botox”, afferma Nazarian, che ritiene che le iniezioni di Botox debbano essere fatte solo da un dermatologo certificato. “Parte del fascino di massa è che gli iniettabili hanno meno rischi rispetto alle tradizionali procedure cosmetiche , ma meno rischi non significa nessun rischio. Vedo molte procedure sbagliate. Spenderai molto più denaro per risolvere il problema di quanto non avresti potuto spendere solo scegliendo la persona adatta in primo luogo. ”Lo stesso vale per i riempitivi, che, se eseguiti in modo errato, possono portare a effetti collaterali come morte dei tessuti, cicatrici e cecità .

“Non ti fiderei mai di un non fisico casuale per eseguire il Pap test, la mammografia o la colonscopia. I iniettabili cosmetici dovrebbero essere nelle mani dei medici – quelli che hanno il livello adeguato di addestramento per farli “, dice Nazarian.” Quindi, anche se queste procedure potrebbero non ucciderti, se eseguite in modo errato, potrebbero sfigurarti. “

L'estetica non invasiva è sempre più popolare e per una buona ragione. Nelle mani giuste, sono sicuri, non invasivi ed efficaci. Non c'è nulla che possa minimizzare e migliorare le rughe dall'espressione dei muscoli facciali con la stessa efficacia possibile, ma assicurati di vedere un dermatologo qualificato e certificato per garantire i migliori risultati con la minima possibilità di complicazioni.

Cosa provare (in uno studio di dermatologi certificato dal consiglio di amministrazione)

• Neurotossine (ad esempio, Botox)
• Iniezioni di labbra
• Contorno del corpo e rafforzamento (come CoolSculpting ed Emsculpt)
• Rinoplastica non chirurgica
• Laser resurfacing
• Bucce chimiche

Se il 2019 è stato l'anno in cui la pelle luminosa e senza trucco è diventata la massima espressione esterna di cura di sé dall'interno verso l'esterno, il futuro appare ancora più verde e pulito.

I consumatori sono auto-istruiti più attivamente: controllano le etichette degli ingredienti, guardano i video dall'estero per una prospettiva globale e diventano curiosi della bellezza indipendente, che spesso comporta l'uso di ingredienti che potresti trovare nel tuo piatto piuttosto che inventati in un laboratorio.

RELAZIONATO: 6 modi per mangiare e bere la tua pelle più sana

La trasparenza non riguarda solo i marchi che condividono apertamente il loro processo di produzione e la loro formulazione. È anche un'estetica. I consumatori sono più interessati a rendere la loro pelle una base impeccabile per il trucco, se necessario, piuttosto che coprire le imperfezioni. Forse questo spiega perché, secondo il gruppo NPD, una società di ricerche di mercato che prevede tendenze di bellezza, le vendite di prodotti per la cura della pelle sono cresciute del 13 percento nel 2018, raggiungendo i 5,6 miliardi di dollari, mentre le vendite di prodotti per il trucco sono aumentate dell'1 percento relativamente modesto.

“Le persone vogliono sfoggiare la loro bella – che ora sanno significa pelle sana”, afferma la dermatologa di New York Rachel Nazarian, MD. Lei ipotizza che le persone siano più consapevoli della loro pelle perché celebrità e influencer sono facilmente accessibili sui social media e piattaforme come Instagram offrono l'aerografo sotto forma di filtri. Questi sono solo alcuni dei fattori che potrebbero stimolare un crescente interesse per la cura della pelle.

“In definitiva”, aggiunge, “il settore della bellezza è in continua espansione, e gli influenzatori del benessere stanno aumentando la visibilità di una pelle sana, una pelle bella e la rendono un obiettivo desiderabile per le masse ”.

Ecco cosa puoi aspettarti di vedere di più in futuro.

1. La bellezza pulita, nel bene o nel male, è in agguato

La bellezza pulita è un termine vago ma onnipresente. Qualunque cosa con ingredienti biologici o naturali può essere commercializzata come “pulita”, ma il problema, come osserva il Dr. Nazarian, è che “nessuno di questi termini è regolato. Significano qualunque cosa la società o il consumatore li scelga di voler dire. “

“Biologico” può significare più cose, ma in genere significa che non sono stati utilizzati pesticidi o che la maggior parte – sebbene non necessariamente il 100 percento – degli ingredienti siano coltivati ​​biologicamente.

preoccupazioni

Un problema è che sebbene la Food and Drug Administration (FDA) abbia approvato la Federal Food, Drug and Cosmetic Act nel 1938, la maggior parte degli ingredienti utilizzati nei cosmetici sono esenti dalla regolamentazione federale. Mentre ci sono marchi e negozi che affermano di vendere solo prodotti puliti, l'ironia è che un prodotto naturale non è sempre necessariamente migliore o più sicuro di un prodotto con composti chimici sintetici, afferma Nazarian.

“I conservanti rendono i nostri prodotti più sicuri, non meno sicuri”, afferma Nazarian. “La maggior parte dei conservanti per la cura della pelle può prolungare la shelf life del prodotto e prevenire la crescita di funghi e batteri. Anche se non riesci a pronunciare gli ingredienti, ciò non significa che sia dannoso per te. Puoi pronunciare “arsenico”, ed è naturale, e ancora non lo vorrei nella mia cura della pelle. I grandi nomi scientifici sono spesso più sicuri perché sono standardizzati e regolati da aziende farmaceutiche e dal governo “.

Il dermatologo certificato Ava Shamban, MD, che vive a Beverly Hills, in California, è d'accordo. “È folle pensare che tutto ciò che viene prodotto in un laboratorio debba essere evitato”, afferma, “soprattutto se si hanno condizioni della pelle che devono essere trattate. È come dire: “Non prenderò questi antibiotici perché sono stati prodotti in un laboratorio”. Quelli non sono i cattivi. “

Secondo la Harvard Health Publishing, ci sono almeno alcuni degli ingredienti per la cura della pelle, tra cui alcuni derivati ​​della vitamina A, petrolato, miscele di fragranze e formaldeide. Ma non gettare immediatamente tutti i tuoi cosmetici. Sono necessarie ulteriori ricerche per stabilire definitivamente un grave rischio per la salute derivante dall'esposizione topica a basse dosi a queste sostanze chimiche.

La linea di fondo

Non esiste una definizione chiara di cosa significhi pulito. “Non esiste uno standard industriale e ogni marchio può avere una propria definizione di cosa sia un marchio pulito”, afferma Dana Kreutzer, senior analista di prodotti di consumo presso Kline a New York City, una società di ricerche di mercato globale che studia le tendenze del settore della bellezza. “Tuttavia, marchi come Drunk Elephant e Biossance sono considerati puliti e clinici, il che significa che non sono naturali al 100%, hanno determinati ingredienti sintetici, ma dichiarano di escludere dalla lista ingredienti” sospetti “.”

Cosa controllare

• Drunk Elephant Slaai Detergente per fondere il burro, $ 34, DrunkElephant.com
• Indie Lee Gentle Daily Peel, $ 65, IndieLee.com
• Acaderma Lunar Glow Illuminate Serum, $ 120, Acaderma.com
• Tula Glow & Get It It Balm, $ 28, Tula.com
• Vintner's Daughter Active Botanical Serum, $ 65, VintnersDaughter.com

RELAZIONATO: 6 fatti affascinanti che probabilmente non hai mai saputo della tua pelle

2. La bellezza del CBD sta diventando ancora più grande nel 2020

Il cannabidiolo (CBD) è un estratto della pianta di canapa, che è un cugino della pianta di marijuana, secondo la Harvard Health Publishing. Ma poiché le piante di canapa contengono non più dello 0,3 percento di THC, l'ingrediente psicoattivo tetraidrocannabinolo che aumenta le persone, il CBD non dovrebbe darti fastidio. Ma ciò non ha impedito ai prodotti di CBD di generare un enorme ronzio nel mercato della bellezza.

L'anno scorso ha visto un'esplosione di popolarità nelle lozioni al CBD e in altri balsami di bellezza al cannabidiolo. Come Harper's Bazaar rapporti, c'è stato un aumento del 368 percento nelle ricerche di Google sulla cura della pelle con CBD, il che suggerisce un assalto di nuovi marchi e prodotti in arrivo.

Jennin Middleton, MD, direttore di bellezza della società di ricerche di mercato WGSN – che segue le tendenze del CBD dal 2015 – afferma che l'ascesa della cura della pelle al CBD può essere compresa come parte del più ampio passaggio verso prodotti di bellezza e benessere più naturali. “Lo stiamo vedendo usato in tutto, dai rilassanti scoppi di sonno alle nebbie dei cuscini e per aiutare i crampi periodici o con il dolore associato ai tacchi alti. Ora è diventato un prodotto del momento, con le sue promesse di curare tutti i disturbi “, afferma il dott. Middleton.

Tranne il fatto che non sappiamo cosa possa curare il CBD, se non altro, secondo l'attuale corpus di ricerche. Tuttavia, i primi risultati offrono indizi.

Diversi studi, tra cui un articolo pubblicato a luglio 2014 in Il Journal of Clinical Investigation, suggeriscono che il CBD può aiutare a ridurre la produzione di sebo, l'olio che viene prodotto in eccesso nella pelle a tendenza acneica. Questa ricerca preliminare suggerisce che il CBD può svolgere un ruolo nel trattamento dell'acne.

Inoltre, a studio pubblicato nel numero di marzo-aprile 2019 della rivista italiana La Clinica Terapeutica scoperto che i balsami di CBD senza l'ingrediente psicoattivo THC sono un trattamento topico sicuro ed efficace per i disturbi infiammatori della pelle, compresa l'acne.

“Se hai una condizione della pelle come l'acne, il CBD agisce a livello follicolare per migliorare gli oli cutanei (e) il rilascio di cellule scartate e sopprimere i batteri in modo da non sviluppare nuovamente la stessa situazione”, afferma Vancouver, Washington– basato Philip Blair, MD, un consulente di Elixinol, la linea ingeribile di CBD che ha recentemente lanciato Sativa, una linea per la cura della pelle della canapa. “La maggior parte dei prodotti di bellezza si trova sulla superficie della pelle, ma il CBD penetra in profondità per ripristinare la funzione naturale della pelle. Questa è la bellezza del CBD: stai trattando sia i sintomi che la causa, migliorando così la funzione generale del tessuto “.

Il Dr. Shamban afferma che il CBD ha importanti proprietà antinfiammatorie e ritiene che accadranno cose interessanti con la cura della pelle al CBD. “È come se ci avessero nascosto queste informazioni a scuola di medicina”, afferma. “Ci sono tutti questi recettori dei cannabidoidi su ogni cellula del corpo che non sembrano essere collegati al sistema delle endorfine – ovvero i centri del dolore e del piacere – quindi perché non sapevamo di questi recettori prima? C'è altro da determinare, ma penso che sia molto promettente “.

preoccupazioni

Mentre Nazarian riconosce che il CBD può aiutare a migliorare le condizioni infiammatorie se usato localmente, rimane diffidente. “Le persone associano canapa e cannabis a (essere) naturali e la scienza è piuttosto vaga su ciò che effettivamente fa il CBD”, afferma Nazarian. “Il mercato del CBD non è stato standardizzato o regolamentato e, sebbene la scienza dietro di esso sia ancora nelle fasi iniziali, il mercato della cura della pelle ha fatto progressi e pubblicizzato i prodotti oltre ciò che sappiamo per certo”. È importante sottolineare che, in uno studio pubblicato su Novembre 2017 a JAMA, i ricercatori hanno analizzato 84 prodotti di 31 categorie e hanno scoperto che il 70% di essi aveva etichettato la percentuale errata di CBD.

Noëlle S. Sherber, MD, dermatologo certificato a bordo con sede a Washington, DC, adotta anche un approccio cauto al CBD nella cura della pelle. “Attualmente non sto consigliando ai miei pazienti di utilizzare prodotti a base di CBD, poiché la FDA ha segnalato che il CBD ha il potenziale per danneggiare effetti collaterali, come lesioni al fegato e interazioni farmacologiche”, afferma.

La linea di fondo

Ci sono alcuni nuovi studi interessanti che suggeriscono che il CBD può essere utile per controllare l'acne, ma la ricerca è ancora in corso. “Il CBD ha (è stato) dimostrato di avere effetti sulle ghiandole sebacee che lo rendono promettente per il trattamento dell'acne, ma fino a quando non sapremo esattamente quale forma funziona meglio e sappiamo che stai acquistando la stessa struttura quando acquisti nei negozi, io resisterebbe all'utilizzo dell'olio di CBD per i trattamenti dell'acne “, afferma Nazarian. “La scienza ha una strada da percorrere.”

Cosa controllare

• Naturopathica Chill Full Spectrum CBD & Kava Balm, $ 76, NaturopathicaChill.com
• Extract Labs CBD Face Cream, $ 90, ExtractLabs.com
• Herbivore Emerald CBD + Adaptogens Deep Moisture Glow Oil, $ 58, HerbivoreBotanicals.com
• Farmacy Better Daze Ahead, $ 68, FarmacyBeauty.com
• Physician Grade Prime CBD Revive Drops, $ 48, PhysiciansGrade.com
• Crema mani alla canapa Sativa, $ 14,99, Elixinol.com

RELAZIONATO: Cosa sapere sui prodotti per la cura della pelle al CBD

3. La bellezza sostenibile o verde rimarrà di tendenza

La tendenza alla bellezza verde, o sostenibile, chiamata anche eco-bellezza, fa parte di una più ampia filosofia di vita, un approccio alla cura di sé che enfatizza il fatto di non essere così assorbito allo specchio da far cadere la terra sul marciapiede.

“La sostenibilità è un movimento molto positivo dalla bellezza alla moda e oltre”, afferma il dott. Sherber. “Il termine” bellezza verde “ha assunto molti significati, ma il filo più comune è una completa evasione o riduzione al minimo dei conservanti sintetici e della fragranza sintetica. EcoCert è un'organizzazione indipendente che ora sta dando una certificazione Cosmos ai prodotti di bellezza verde per vedere se aderiscono a principi come ingredienti non OGM e privi di prodotti petrolchimici. ”Ciò significa che nessuno degli ingredienti è prodotto da organismi creati in laboratorio utilizzando la modificazione genetica o tecniche di ingegneria e che i prodotti sono privi di un lungo elenco di sostanze chimiche, tra cui la cosiddetta “sporca dozzina”, che sono tutti derivati ​​dal petrolio e sono noti per essere dannosi.

Come osserva Sherber, la bellezza verde non riguarda solo gli ingredienti per la cura della pelle, ma anche la confezione. Un numero crescente di aziende di bellezza sta spostando gli imballaggi lontano dalla plastica monouso, ad esempio, e creando contenitori riciclabili. Unilever, la società madre di Dermalogica, Murad, Kate Somerville e REN Clean Skincare, ha giurato di ridurre il suo utilizzo di materie plastiche specifiche negli imballaggi di quasi la metà entro il 2025, e L'Oreal ha promesso di passare a tubi cosmetici a base di carta nel 2020.

preoccupazioni

Alyssa Behrendt, analista di Kline di New York City, afferma che una possibile ragione per cui la bellezza verde è la tendenza più discussa del momento è che ha molti significati. “È un prodotto? Confezione? Responsabilità sociale? Trasparenza? ”Chiede Behrendt. “Le aziende stanno cercando diversi modi per diventare più sostenibili, ma come si fa a realizzare un packaging di lusso sostenibile? I marchi sono pronti a rinunciare alle campane e ai fischi di imballaggi di lusso per alternative meno allettanti? ”

La linea di fondo

Se stai gestendo una condizione infiammatoria della pelle come l'acne, la rosacea o la psoriasi, è consigliabile consultare un dermatologo quando si effettuano scelte per sostenere la salute della pelle e il pianeta allo stesso tempo. “Quando si tratta di bellezza sostenibile, ascolta la scienza, non l'hype”, afferma Nazarian. “Alcuni prodotti possono etichettarsi rapidamente come” naturali “o” organici “, ma questi termini non sono monitorati o termini legali e molti hanno descrizioni vaghe di come si qualificano per utilizzare l'etichettatura. Parla sempre con il tuo dermatologo certificato in merito alle tue preoccupazioni in merito ai prodotti e alla cura della pelle, non solo per sapere come trovare quello che stai cercando, ma quando ne vale la pena anche per usare quello che stai cercando “.

Cosa controllare

• The Detox Market Best of Green Beauty Box, $ 159, TheDetoxMarket.com
• Odacité Bioactive Rose Gommage, $ 62, Odacite.com
• Osea Hyaluronic Sea Serum, $ 88, OseaMalibu.com
• Pai Rosehip BioRegenerate Oil, $ 44, PaiSkincare.us
• Rahua Hydration Shampoo, $ 34, Rahua.com

4. La cura della pelle sarà ancora più personalizzata, grazie alla tecnologia

Poiché la tecnologia rende più semplice la consegna di formule di prodotti più personalizzate, i marchi si stanno dando da fare per offrire esperienze di cura della pelle personalizzate alle masse. La cura della pelle su misura – ovvero i prodotti con formulazioni personalizzate – sarà grande. Middleton ritiene che questo mercato fonderà la bellezza e la scienza in modi nuovi ed entusiasmanti: “La cura della pelle su misura guadagnerà trazione, compresi i prodotti basati su dati biometrici personali che tengono traccia dei cambiamenti ormonali e, quindi, delle esigenze di cura della pelle”.

Per ora, tuttavia, la personalizzazione è generalmente limitata ai quiz, che Naira Aslanian, project manager del gruppo di prodotti di consumo di Kline a New York City, afferma può aiutare a identificare il profilo e le preferenze di un consumatore. “Hairstory e Madison Reed (sono) marchi che hanno avuto successo presentando un elenco definito di prodotti che incoraggiano i visitatori del sito a rispondere ai quiz prima di acquistare o sfogliare i prodotti per garantire che ricevano il prodotto giusto per le loro esigenze individuali di capelli”, afferma Aslanian.

Marchi per la cura della pelle come Vitruvi e The Buff usano anche quiz per personalizzare gli oli per il viso e il corpo. Formulano miscele specifiche di ingredienti in base alle risposte alle domande che identificano le preoccupazioni individuali, dall'acne allo sordo alle cicatrici, e distribuiscono miscele personalizzate uniche per ogni consumatore.

Marchi come Mxt e Skinsei consentono ai clienti di creare le proprie formule per i regimi di cura della pelle basati su quiz più elaborati che analizzano tutto, dall'esposizione ai raggi UV e dalla qualità dell'aria dove vivi a quanta acqua bevi e quanta attività fisica fai. Questi dati consentono loro di sviluppare profili più completi. “Dopo che i consumatori hanno creato un profilo, il team di sviluppo formulerà un prodotto per rispondere alle preoccupazioni e agli obiettivi della pelle, oppure i clienti potranno scegliere gli ingredienti per formulare il proprio prodotto”, afferma Aslanian.

Mentre questi approcci alla cura della pelle personalizzata sono ancora abbastanza basilari, i test del DNA e l'IA stanno diventando più frequentemente utilizzati. Molti dispositivi di bellezza a casa, ad esempio, utilizzano app per diagnosticare problemi di pelle ed educare gli utenti sul loro tipo di pelle, che, afferma Aslanian, “elimina l'errore dell'utente e la diagnosi errata che possono verificarsi in altri quiz sul profilo di personalizzazione”.

Shamban ritiene che questo sia solo l'inizio. Nel prossimo futuro, “rascherai il lato della pelle e l'interno della bocca”, dice. “E guarderanno il tuo microbioma, guarderanno i tuoi ormoni, la tua espressione del DNA di vari geni, perché l'età sulla patente non ha nulla a che fare con l'età della tua pelle”. Ad esempio, se tu ' preoccupato per le rughe e desidera anti-invecchiamento, il marchio creerebbe una formula ricca di vitamina C, resveratrolo, acido ialuronico e un po 'di niacinamide. “Sarà un po 'più costoso della massa, ovviamente”, afferma Shamban, “ma la moda lo è sempre”.

preoccupazioni

La principale preoccupazione per la tendenza su misura è che la tecnologia non è attualmente in grado di mantenere la promessa di una vera personalizzazione oltre il livello dei quiz. “In questo momento quello che stiamo usando è così antiquato”, afferma Shamban. “È come, okay, ho la pelle mista, o sono grassa, o ho 25 anni e ho 55 anni. E quindi è come dire che un reggiseno si adatta a tutti, e non è così. Ora puoi ottenere alcune cose su misura, ma non è quello che sarà in futuro. “

La linea di fondo

“Un regime individualizzato di cura della pelle può essere ottenuto da una consultazione con un dermatologo certificato che può esaminare la tua pelle e discutere i tuoi obiettivi e le sfide”, afferma Sherber, che crede che “su misura” sia diventato una parola d'ordine in salute e bellezza. “Per quanto riguarda l'intelligenza artificiale o altri mezzi digitalizzati per personalizzare un regime ottimale, c'è un modo per procedere prima che sia affidabile.”

Cosa controllare

RELAZIONATO: 10 cose che la tua pelle sta cercando di dirti e come rispondere

5. L'estetica non invasiva diventerà più ampiamente disponibile

Secondo Aslanian, i servizi estetici non invasivi aumenteranno nel 2020 e le destinazioni che offrono questi servizi si concentreranno sulla fascia demografica più giovane offrendo trattamenti semplificati a prezzi convenienti. Pensa “drive-thru Botox”, come Il New York Times l'ha chiamato, facendo riferimento a posizioni che rendono le neurotossine e il filler facili come ottenere uno scoppio.

Caso in questione: Botox è arrivato ai grandi magazzini. La nuova ammiraglia di Nordstrom a Manhattan offre a lei e ad altri servizi non invasivi del momento come filler per le labbra, microneedling e terapia al plasma ricca di piastrine nel suo reparto di bellezza multilivello.

Una volta un trattamento solo per i ricchi e famosi, Botox è diventato una parola familiare. Ed è sempre più ricercato evitare i segni dell'invecchiamento prima che inizino. Secondo un rapporto del 2019 dell'American Academy of Facial Plastic and Reconstructive Surgery, tre quarti dei chirurghi plastici facciali hanno riportato un aumento dei pazienti di età inferiore ai 30 anni nel 2018, e questi numeri sono in aumento. Secondo Tempi di dermatologia, l'idea è meno di trattare i segni dell'invecchiamento che si stanno già verificando piuttosto che trattenerli molto prima che inizino, una moda che Shamban e altri chiamano “prejuvenating”.

“Quello che sta accadendo è che i millennial sono molto consapevoli di tutte queste procedure, che per loro fanno parte della toelettatura”, afferma Shamban. “Dal Botox al rafforzamento dei tessuti per migliorare la cura della pelle, entrano e vogliono tutto. E se inizi prima, invecchi in modo diverso e abbiamo i dati per supportarli. ”Ad esempio, a uno studio sui gemelli ha rivelato che Botox era sicuro ed efficace per ridurre le rughe sulla fronte e intorno agli occhi per un periodo di 13 anni.

preoccupazioni

“Ho molte preoccupazioni riguardo all'offerta Nordstrom di Botox”, afferma Nazarian, che crede che le iniezioni di Botox dovrebbero essere fatte solo da un dermatologo certificato. “Parte del fascino di massa è che gli iniettabili hanno meno rischi rispetto alle tradizionali procedure cosmetiche , ma meno rischi non significa nessun rischio. Vedo molte procedure sbagliate. Spenderai molto più denaro per risolvere il problema di quanto non avresti potuto spendere solo scegliendo la persona adatta in primo luogo. ”Lo stesso vale per i riempitivi, che, se eseguiti in modo errato, possono portare a effetti collaterali come morte dei tessuti, cicatrici e cecità .

“Non ti fiderei mai di un non fisico casuale per eseguire il Pap test, la mammografia o la colonscopia. I iniettabili cosmetici dovrebbero essere nelle mani dei medici – quelli che hanno il livello adeguato di addestramento per farli “, dice Nazarian.” Quindi, anche se queste procedure potrebbero non ucciderti, se eseguite in modo errato, potrebbero sfigurarti. “

L'estetica non invasiva è sempre più popolare e per una buona ragione. Nelle mani giuste, sono sicuri, non invasivi ed efficaci. Non c'è nulla che possa minimizzare e migliorare le rughe dall'espressione dei muscoli facciali con la stessa efficacia possibile, ma assicurati di vedere un dermatologo qualificato e certificato per garantire i migliori risultati con la minima possibilità di complicazioni.

Cosa provare (in uno studio di dermatologi certificato dal consiglio di amministrazione)

• Neurotossine (ad esempio, Botox)
• Iniezioni di labbra
• Contorno del corpo e rafforzamento (come CoolSculpting ed Emsculpt)
• Rinoplastica non chirurgica
• Laser resurfacing
• Bucce chimiche

Pfizer Inc (NYSE: PFE)
Chiamata sugli utili del 4 ° trimestre 2019
28 gennaio 2020, 10:00 ET

Contenuti:

• Osservazioni preparate
• Domande e risposte
• Chiama i partecipanti

Osservazioni preparate:

Operatore

Buona giornata a tutti e benvenuti alla teleconferenza sugli utili del quarto trimestre 2019 di Pfizer. La chiamata di oggi è in fase di registrazione. In questo momento, vorrei rivolgere la chiamata a Mr. Chuck Triano, Senior Vice President Investor Relations. Per favore, signore.

Chuck Triano – Vicepresidente senior, Investor Relations

Buongiorno, e grazie per esserti unito a noi oggi per rivedere le prestazioni del quarto trimestre e dell'anno 2019 di Pfizer e gli orientamenti finanziari per il 2020.

Oggi sono affiancato dal nostro CEO e presidente, Albert Bourla; Frank D'Amelio, il nostro direttore finanziario; Mikael Dolsten, Presidente della ricerca e sviluppo mondiale; Angela Hwang, Presidente del gruppo, Pfizer Biopharmaceuticals Group; John Young, il nostro direttore generale; e Doug Lankler, consigliere generale.

Le diapositive che verranno presentate in questa chiamata sono state pubblicate sul nostro sito Web questa mattina presto e sono disponibili su pfizer.com/investors. Vedrai qui che la diapositiva 3 copre le nostre informazioni legali.

Albert e Frank ora faranno osservazioni preparate e poi passeremo a una sessione di domande e risposte.

Con ciò, ora rivolgerò la chiamata ad Albert Bourla. Albert?

Albert Bourla – Presidente e Amministratore Delegato

Grazie, Chuck, e buongiorno a tutti.

Stamattina parlerò delle nostre prestazioni per l'anno, del continuo progresso della nostra pipeline e dei passi che stiamo prendendo per posizionare Pfizer per una crescita accelerata in seguito alla prevista separazione di Upjohn da Pfizer entro la fine dell'anno. Frank fornirà quindi i dettagli relativi alla nostra performance del quarto trimestre e alla nostra guida finanziaria per il 2020.

Il 2019 è stato un anno produttivo e di trasformazione per Pfizer. Abbiamo generato solidi risultati finanziari per l'intero anno. Questi risultati sono stati evidenziati dall'eccezionale crescita del 8% dei ricavi operativi dell'anno e del 9% nel quarto trimestre per la nostra attività nel settore biopharma, che diventerà il nuovo Pfizer, in seguito alla prevista separazione di Upjohn.

Ancora una volta, l'eccezionale crescita del nostro gruppo biofarmaceutico è stata trainata principalmente dalla continua forte performance di tutti i nostri principali fattori di crescita. Questo include Ibrance, Xtandi, Eliquis, Xeljanz, Vyndaqel, tra gli altri. Biopharma ha anche generato una crescita operativa del 14% nei mercati emergenti nel 2019. Vorrei sottolineare che la crescita di Biopharma nel 2019 è derivata da aumenti di volume, non da prezzi. In effetti, i prezzi hanno avuto un impatto negativo del 2% nei risultati di Biopharma.

Per l'intero anno 2019, i ricavi globali di Ibrance sono aumentati del 23% a livello operativo per diventare un prodotto di quasi $ 5 miliardi all'anno. Negli Stati Uniti, Ibrance ha realizzato una forte crescita e ha mantenuto la sua forte posizione di leadership nella classe dei sindacati con un aumento di quasi il 90%. Anche la performance di Ibrance al di fuori degli Stati Uniti è stata molto forte e vediamo ancora opportunità significative nei paesi in cui l'uso di inibitori della CDK non ha ancora raggiunto i livelli osservati negli Stati Uniti. Complessivamente, Ibrance è approvato in oltre 90 paesi. È l'inibitore CDK4 / 6 numero uno prescritto a livello globale e ha raggiunto oltre 250.000 pazienti.

Per Xtandi, i ricavi delle alleanze negli Stati Uniti sono aumentati del 20% per l'intero anno e, quando combinato con il nostro reddito da royalty sulle vendite degli Stati Uniti, ha totalizzato quasi 1,2 miliardi di dollari nel 2019. Xtandi è la nuova terapia ormonale a marchio leader in una sempre più competitiva ma in crescita classe, con una quota di mercato del 37% nelle prescrizioni totali. La loro vasta crescita di anno in anno è dovuta alla continua adozione dell'indicazione non metastatica del carcinoma della prostata resistente alla castrazione, nonché alla fiducia dei prescrittori e al riconoscimento dei forti dati di Xtandi attraverso CRPC. Con il recente lancio della nostra indicazione Xtandi nel carcinoma prostatico metastatico sensibile alla castrazione negli Stati Uniti, Xtandi è ora il primo e unico trattamento orale approvato dalla FDA in tre distinti tipi di carcinoma prostatico.

Eliquis ha continuato a funzionare bene. La vendita di Pfizer nei ricavi globali è aumentata del 26% operativamente a $ 4,2 miliardi. Questa crescita è stata trainata principalmente dalla continua adozione crescente della fibrillazione atriale non valvolare e dai guadagni della quota di mercato degli anticoagulanti orali. Eliquis è ora il leader anticoagulante orale in 12 mercati in tutto il mondo.

Xeljanz ha registrato una forte performance, con ricavi globali in aumento del 29% operativamente a $ 2,2 miliardi. Siamo molto soddisfatti del continuo assorbimento positivo di tutte le indicazioni, l'artrite reumatoide, l'artrite psoriasica e la colite ulcerosa e continuiamo a lanciare l'artrite psoriasica e la colite ulcerosa in nuovi mercati.

Osservando il nostro business delle malattie rare, Vyndaqel continua a crescere in modo soddisfacente negli Stati Uniti, dopo l'approvazione e il lancio di maggio 2019 per il trattamento della cardiomiopatia ATTR. Nel complesso, questo farmaco unico nel suo genere ha contribuito con $ 473 milioni di entrate nel 2019. I nostri sforzi di sensibilizzazione sulla malattia hanno contribuito a portare i tassi di diagnosi al 9% entro la fine del quarto trimestre rispetto all'1% prima del lancio. Pertanto, alla fine del 2019 sono stati diagnosticati oltre 9.000 pazienti, oltre 5.500 pazienti avevano ricevuto una prescrizione per Vyndaqel e oltre 3.000 pazienti avevano ricevuto il farmaco. Questi numeri non comprendono circa 100 pazienti che sono ancora nel programma di accesso anticipato.

I ricavi globali di Prevenar 13 sono aumentati del 3% operativamente a $ 5,8 miliardi. Il CDC degli Stati Uniti ha anche pubblicato la sua raccomandazione aggiornata per gli adulti immunocompetenti di età pari o superiore a 65 anni ai processi decisionali clinici condivisi (fonetici) nel rapporto settimanale sulla morbilità e la mortalità di novembre, sottolineando che un paziente può servire una decisione di vaccinare con PCV13 con un medico, un medico assistente, infermiere o farmacista.

Esaminando il nostro portafoglio sterile di iniettabili, la nostra attenzione al recupero della produzione sta prendendo forma e sta iniziando ad avere un impatto positivo sulla linea di punta negli Stati Uniti. Abbiamo compiuto notevoli progressi con la bonifica e l'ammodernamento e prevediamo un miglioramento continuo per tutto il 2020. Da notare che, mentre i ricavi globali dal nostro portafoglio di iniettabili sterili sono diminuiti dell'1% a livello operativo per l'intero anno, sono aumentati del 5% a livello operativo durante il quarto trimestre. Inoltre, oltre l'80% del nostro portafoglio di iniettabili è disponibile oggi e prevediamo che questa percentuale continuerà ad aumentare nel 2020.

Il nostro portafoglio globale di biosimilari è cresciuto del 22% operativamente a $ 911 milioni per l'intero anno. Ciò è stato trainato in gran parte dalla crescita del 70% negli Stati Uniti, grazie al lancio di Retacrit e alla graduale diffusione di Inflectra. La crescita negli Stati Uniti è stata parzialmente compensata dal calo dei mercati internazionali, trainato principalmente da Inflectra. Prevediamo un ulteriore contributo dei biosimilari nel 2020 con il lancio di biosimilari monoclonali di anticorpi oncologici gratuiti. La scorsa settimana abbiamo annunciato il lancio di Zirabev e Ruxience nel mercato statunitense e il mese prossimo prevediamo di lanciare Trazimera. Tutti e tre i prodotti saranno disponibili a un prezzo sostanzialmente scontato rispetto ai loro prodotti originator.

I ricavi dell'intero anno per la nostra attività di Upjohn sono scesi del 16% operativamente a $ 10,2 miliardi. Il principale ostacolo durante l'anno è stato l'avvento della competizione generica su Lyrica negli Stati Uniti, parzialmente compensata dalla crescita operativa del 7% in Cina. La crescita in Cina è stata trainata principalmente da Viagra e Celebrex, nonché da Lipitor nei canali non rimborsati, che rappresentano una quota di mercato significativa in Cina. Stiamo facendo buoni progressi con una pianificazione pre-integrazione della combinazione proposta da Upjohn con Mylan, che resterà sulla buona strada per la metà del 2020.

A dicembre, abbiamo annunciato che l'ex presidente di Pfizer, Ian Read, e l'attuale direttore di Pfizer, James Kilts, entreranno a far parte del consiglio di amministrazione di Viatris al completamento della transazione. Stiamo anche lavorando a stretto contatto con le nostre controparti di Mylan nel processo di selezione dei CFO. Prevediamo di annunciare le nomine del CFO e del terzo direttore entro la fine di questo trimestre. Abbiamo una grande fiducia in Viatris, che unirà le forti capacità commerciali di Upjohn e i marchi iconici con l'eccezionale pipeline di Mylan.

Passando ora alla ricerca e sviluppo. Rimaniamo molto soddisfatti dei progressi che stiamo facendo con la nostra pipeline. Ci aspettiamo risultati clinici chiave nel 2020, molti dei quali hanno il potenziale per renderlo un anno entusiasmante per i pazienti che sperano in nuove opzioni di trattamento. Prevediamo di condividere i dati fino a 15 letture di prove concettuali con contributi da tutte le nostre aree terapeutiche, nonché fino a 10 inizi di studi cardine e cinque letture di studio cardine chiave.

Ora evidenzierò alcuni di quegli eventi previsti. Continuiamo ad aspettarci che i nostri due programmi di carcinoma mammario precoce Ibrance guidati dagli eventi, PENELOPE-B e PALLAS, leggano rispettivamente alla fine del 2020 e all'inizio del 2021. In caso di successo, e in seguito all'approvazione normativa, questi programmi potrebbero raddoppiare il numero di pazienti idonei a beneficiare di Ibrance. È attualmente in corso lo studio aperto di fase 2, studio ANCHOR-CRC a braccio singolo che valuta l'efficacia e la sicurezza della combinazione di Braftovi e Mektovi e cetuximab in pazienti con carcinoma del colon-retto metastatico mutante BRAF V600E precedentemente non trattato. I risultati dello studio saranno presentati per la presentazione in un congresso medico nella seconda metà del 2020.

Per abrocitinib, il nostro inibitore sperimentale JAK1 per il trattamento della dermatite atopica da moderata a grave, non vediamo l'ora di condividere i risultati migliori dello studio di Fase 3 JADE COMPARE nei prossimi mesi. In attesa della conclusione positiva degli studi di base della Fase 3, la presentazione della regolamentazione negli Stati Uniti è prevista per il terzo trimestre del 2020, con i mercati successivi che seguiranno nel corso dell'anno. Questo studio è progettato per valutare l'efficacia e la sicurezza di abrocitinib o dupilumab placebo negli adulti in terapia topica con farmaci di base con dermatite atopica da moderata a grave. Lo studio ha anche un endpoint secondario chiave, ma è progettato per valutare l'effetto su ciascuna gravità di abrocitinib rispetto a dupilumab negli adulti con dermatite atopica da moderata a grave sulla terapia topica di base.

Ci sono fino a cinque letture di prova del concetto attese nel 2020 dalla nostra pipeline di immunocinasi leader del settore. La nostra speranza è di far avanzare molti di questi nella fase 3 delle prove. Ciò include TYK2 / JAK1 con potenziali letture POC per l'artrite psoriasica e per una formulazione topica per la psoriasi e la dermatite atopica, nonché una JAK3 / TEC orale per la vitiligine e TYK2 orale per la psoriasi. Questo è un ottimo esempio della nostra strategia unica per abbinare intenzionalmente una molecola a una malattia in cui pensiamo che abbia il potenziale per fare la differenza e una formulazione che riteniamo abbia il potenziale per trattare forme più lievi di malattia.

La nostra piattaforma di terapia genica sta avanzando con i promettenti dati sull'emofilia A di Fase 1/2, ma dovrebbe supportare l'inizio della Fase 3 quest'anno. Questo sarebbe il nostro secondo studio cardine sulla terapia genica dopo lo studio di fase 3 sull'emofilia B in corso. Inoltre, il nostro programma di terapia genica DMD sta raccogliendo ulteriori dati robusti sui pazienti, sulla base dei progressi che abbiamo svolto durante l'attuale conferenza sulla distrofia muscolare del progetto lo scorso giugno. Ci stiamo preparando per un POC atteso nella prima metà del 2020 e lo studio fondamentale di fase 3 inizierà nella seconda metà di quest'anno.

Non vediamo l'ora di completare con successo gli studi di Fase 3 per il nostro candidato in fase di sperimentazione del vaccino pneumococcico coniugato 20-valente negli adulti e resteremo sulla buona strada per presentare la domanda di licenza biologica alla FDA entro la fine di quest'anno. Il candidato Pfizer rappresenta un potenziale avanzamento significativo rispetto al potenziale 15-valente. In caso di successo nella fase 3 e approvati, i cinque sierotipi aggiuntivi possono fornire una copertura contro circa il 33% in più di ceppi che causano la malattia da pneumococco invasiva negli adulti e il 42% in più di ceppi che causano la malattia nei neonati negli Stati Uniti.

Per il nostro vaccino materno per il virus respiratorio sinciziale, RSV, ci stiamo preparando per un POC atteso nel secondo trimestre del 2020, seguito da una progressione potenzialmente rapida alla Fase 3.

Non vediamo l'ora di condividere ulteriori aggiornamenti sulla nostra pipeline durante il nostro prossimo Investor Day il 31 marzo.

In sintesi, abbiamo terminato il 2019 con un forte slancio e non vediamo l'ora di continuare tale slancio nel 2020. Durante l'anno abbiamo generato solide prestazioni finanziarie, fatto avanzare ulteriormente la nostra solida pipeline di ricerca e sviluppo e intrapreso azioni coraggiose per rimodellare Pfizer in un motore di innovazione che costruirà sulla nostra eredità di fornire scoperte che cambiano la vita dei pazienti.

Ora lo consegnerò a Frank per fornire dettagli sul trimestre e sulle nostre prospettive per il resto del 2020. Frank?

Frank D'Amelio – Chief Financial Officer e Executive Vice President, Global Supply and Business Operations

Grazie Albert. Buon giorno a tutti.

Passiamo ora ai dati finanziari.

I ricavi del quarto trimestre 2019 sono stati di $ 12,7 miliardi, in calo dell'8% rispetto al trimestre dell'anno precedente. Escludendo l'impatto dell'attività di Consumer Healthcare, le entrate sono diminuite dell'1% a livello operativo. I ricavi delle attività del nostro Gruppo Biofarmaceutico sono stati di $ 10,5 miliardi, in aumento del 9% dal punto di vista operativo rispetto allo scorso anno, con una forte crescita operativa in Ibrance, Eliquis, Xeljanz e Vyndaqel e un secondo trimestre consecutivo di crescita operativa per la nostra attività ospedaliera, compresi i nostri iniettabili sterili.

I ricavi per la nostra attività Upjohn nel quarto trimestre sono diminuiti del 32% operativamente a $ 2,2 miliardi, con l'impatto primario di anno in anno di nuovo costituito dalla concorrenza generica per Lyrica negli Stati Uniti, iniziata nel luglio del 2019. Escludendo l'impatto sfavorevole di Lyrica nel Perdite di esclusività negli Stati Uniti e in altri prodotti recenti, i ricavi del quarto trimestre 2019 per Upjohn sono diminuiti del 6% a livello operativo. So che il business di Upjohn in Cina è stato al centro dell'attenzione, e le entrate del quarto trimestre per Upjohn sono diminuite dell'1% a livello operativo. Abbiamo visto le attese riduzioni delle entrate per Lipitor e Norvasc nelle province in cui è stato implementato il programma di approvvigionamento basato sul volume e queste diminuzioni sono state per lo più compensate dalla crescita operativa da prodotti non influenzati dal programma VBP tra cui Celebrex e Viagra.

Il costo delle vendite rettificato in percentuale dei ricavi è stato influenzato favorevolmente dal completamento di luglio della transazione di joint venture Consumer Healthcare con GSK, parzialmente compensato dall'impatto negativo dei cambi e dalla perdita di esclusività di Lyrica.

Nel quarto trimestre abbiamo registrato una perdita di $ 0,06 per azione su base GAAP, principalmente a causa di una commissione di svalutazione patrimoniale di $ 2,6 miliardi per Eucrisa e spese di ristrutturazione, contabilità acquisti e spese legali. L'EPS diluito rettificato per il quarto trimestre è stato di $ 0,55 rispetto a $ 0,63 nel trimestre dell'anno precedente. Il calo è dovuto principalmente alla riduzione dei ricavi, sempre dovuta principalmente al LOE di Lyrica negli Stati Uniti e alle maggiori spese operative.

Voglio sottolineare che le azioni medie ponderate diluite in circolazione sono diminuite di 281 milioni di azioni rispetto al trimestre dell'anno precedente, riflettendo l'impatto delle azioni riacquistate durante il 2018 e il 2019 e parzialmente compensate dalla diluizione relativa ai programmi di remunerazione dei dipendenti basati su azioni. Infine, i cambi hanno avuto un impatto negativo di $ 158 milioni o dell'1% sui ricavi del quarto trimestre 2019 e un impatto negativo di $ 0,03 sull'EPS diluito rettificato rispetto allo scorso anno.

Come puoi vedere dal grafico, la nostra crescita operativa del 9% nel business Biopharma è stata trainata dalle forti performance di Ibrance, Eliquis, Xeljanz, Xtandi, Vyndaqel e Inlyta.

Passando alla guida finanziaria per il 2019. Come puoi vedere nel grafico, abbiamo incontrato o superato tutti i componenti della nostra guida finanziaria 2019.

Ora voglio evidenziare come le nostre linee guida per il 2020 si confrontano con le entrate del 2019 e l'EPS diluito rettificato. A partire dal lato sinistro della diapositiva, i nostri risultati del 2019 riflettono i contributi annuali parziali del segmento di business Consumer Healthcare che abbiamo deconsolidato nel terzo trimestre del 2019. Escludendo $ 2,1 miliardi di ricavi generati dal segmento di business Consumer Healthcare, i ricavi totali dell'azienda 2019 sono stati 49,7 miliardi di dollari e l'EPS diluito rettificato del 2019 è di 2,95 dollari.

Per il 2020, la gamma di orientamento EPS diluito rettificata riflette la quota di Pfizer degli utili della joint venture Consumer Healthcare che sono stati generati nel quarto trimestre 2019 e saranno riportati nel primo trimestre 2020 insieme alla quota di Pfizer degli utili previsti della JV per i primi tre trimestri di 2020. Come puoi vedere, il punto centrale della nostra gamma di orientamento 2020 per i ricavi implica prestazioni comparabili ai ricavi del 2019 dopo aver escluso il contributo parziale dell'anno da Consumer Healthcare e un impatto favorevole previsto di $ 200 milioni dai cambi sulla base dei tassi di metà gennaio 2020 rispetto all'anno scorso. Nonostante gli anticipati $ 2,4 miliardi di venti contrari alla LOE nel 2020, prevediamo che il punto medio della gamma di entrate rimarrà operativo a livello operativo, escluso il Consumer Healthcare.

Ora esaminiamo tutti i dettagli delle nostre linee guida finanziarie per il 2020 per l'azienda totale. Come abbiamo detto, prevediamo che la conclusione della transazione tra la nostra attività Upjohn e Mylan sarà completata entro la metà del 2020. Quindi stiamo fornendo tre serie di indicazioni. In primo luogo, la Società totale, che riflette il nostro attuale costrutto delle attività di Biopharma e Upjohn ed esclude qualsiasi impatto dalla combinazione Upjohn in sospeso con Mylan; in secondo luogo, New Pfizer, che è una visione pro forma per l'intero anno che riflette l'impatto della transazione di interessi sulle commissioni in sospeso rimuovendo Upjohn e includendo $ 12 miliardi di proventi in contanti da Upjohn a New Pfizer e altri fattori relativi alle transazioni come le entrate del contratto di servizio transitorio; e in terzo luogo, Upjohn come azienda indipendente. Tutti questi scenari si basano su un intero anno di entrate e spese nel 2020.

A partire dalla compagnia totale. L'orientamento alle entrate del 2020, da $ 48,5 miliardi a $ 50,5 miliardi, riflette l'atteso forte slancio atteso nel nostro business Biopharma, principalmente compensato dal continuo impatto negativo delle perdite di prodotto di esclusività nel nostro business Upjohn, principalmente Lyrica negli Stati Uniti.

Passando ad altri elementi della nostra guida finanziaria per il 2020 per la Società totale, rispetto ai risultati effettivi del 2019, i punti medi di queste gamme implicano costi di vendita rettificati più elevati come percentuale dei ricavi a causa del continuo impatto del LOE di Lyrica, spese di R&S più adeguate e altre entrate rettificate più elevate che riflettono gli utili della joint venture Consumer Healthcare e le spese SI&A rettificate più basse e l'EPS diluito rettificato.

Nel 2020, gli orientamenti finanziari per l'EPS rettificato non prevedono nuovi riacquisti di azioni e ci concentreremo invece sull'aumento del dividendo e sugli investimenti nel business durante questo periodo di crescita. Di conseguenza, la nostra guida per l'EPS diluito rettificato presuppone che le azioni medie ponderate diluite in circolazione siano pari a circa 5,65 miliardi di azioni, che è approssimativamente la stessa del 2019.

Passando alle linee guida finanziarie per New Pfizer per l'intero anno 2020, prevediamo ora ricavi per l'intero anno 2020 tra $ 40,7 miliardi e $ 42,3 miliardi, con il punto medio della gamma di orientamento che rappresenta una crescita operativa dell'8% rispetto ai ricavi Biopharma del 2019, esclusi Meridian e Mylan Japan e un miglioramento rispetto ai nostri obiettivi iniziali di luglio. Questa gamma di orientamenti esclude $ 600 milioni di contributi da Meridian, una sussidiaria Pfizer e produttore di EpiPen e altri prodotti autoiniettori, nonché dalla collaborazione strategica con Mylan in Giappone per lo sviluppo, la produzione e la commercializzazione di medicinali generici. A causa di un riallineamento dell'organizzazione, entrambi questi asset sono passati a Upjohn a partire dall'inizio del 2020. Sia Meridian che Mylan Japan verranno segnalati nel business Upjohn di Pfizer a partire dal primo trimestre 2020.

Prevediamo ora l'IBT rettificato per l'intero anno 2020 come una percentuale delle entrate di circa il 37%, anch'essa in miglioramento rispetto a luglio. Prevediamo che il punto medio dell'intervallo di guida per l'EPS diluito rettificato sia di $ 2,30. Il range di orientamento del flusso di cassa operativo rimane da circa $ 11 a $ 12 miliardi. Questa guida dell'EPS riflette i $ 12 miliardi in contanti che Pfizer riceverà alla chiusura della combinazione di Upjohn e Mylan, che verranno utilizzati per pagare il debito nel corso del 2020.

Come puoi vedere, i punti medi delle entrate di New Pfizer per il 2020 e l'orientamento del margine IBT adattato sono migliorati materialmente da quando le nostre proiezioni preliminari per il 2020 sono state presentate a luglio in concomitanza con l'annuncio della proposta combinazione di Mylan e Upjohn. Per chiarezza, abbiamo fornito un ponte dai nostri obiettivi iniziali di luglio a questa guida in fondo al grafico. Alla chiusura della combinazione Mylan-Upjohn, e una volta che diventeremo New Pfizer, puoi aspettarti lo stesso livello di dettaglio nelle nostre linee guida per il 2020 che abbiamo fornito oggi per l'intera Azienda.

Passando alla guida finanziaria 2020 per Upjohn per l'intero anno 2020, prevediamo ricavi da $ 8 miliardi a $ 8,5 miliardi, riflettendo il continuo impatto negativo delle perdite di esclusività per prodotti come Lyrica negli Stati Uniti, che ha iniziato a fronteggiare una concorrenza generica multi-fonte a luglio 2019 e l'espansione del programma di approvvigionamento basato sul volume in Cina e che riflette l'inclusione delle entrate e delle spese associate a Meridian e Mylan Japan.

Prevediamo un EBITDA rettificato per l'intero anno 2020 per il business Upjohn da 3,8 a 4,2 miliardi di dollari. Oltre all'inclusione delle entrate e delle spese associate a Meridian e Mylan Japan, non ci sono cambiamenti operativi nella guida finanziaria di Upjohn 2020 rispetto agli obiettivi finanziari preliminari forniti nel luglio del 2019. Ancora una volta, abbiamo fornito un ponte dai nostri obiettivi iniziali di luglio a questo guida corrente nella parte inferiore del grafico.

Passando ai principali punti da asporto del 2019. Abbiamo realizzato un forte quarto trimestre con la nostra attività di Biopharma in crescita operativa del 9%, che rappresenta la nostra attività successiva dopo la combinazione in sospeso di Upjohn e Mylan. Abbiamo fornito le gamme di orientamento 2020 per la società totale, la nuova Pfizer e la Upjohn. È importante sottolineare che stiamo progettando una forte crescita organica delle entrate per New Pfizer nel 2020. Dal nostro precedente aggiornamento trimestrale abbiamo raggiunto traguardi chiave per i prodotti e le tubazioni. E abbiamo restituito $ 16,9 miliardi agli azionisti nel 2019 attraverso una combinazione di dividendi e riacquisti di azioni.

Guardando al futuro, restiamo impegnati a offrire rendimenti interessanti per gli azionisti nel 2020 e oltre.

Ora lo restituirò a Chuck.

Chuck Triano – Vicepresidente senior, Investor Relations

Grazie, Frank e Albert per quelle osservazioni. Al momento, operatore, possiamo per favore rispondere alle domande?

Domande e risposte:

Operatore

(Istruzioni per l'operatore) La prima domanda viene da Randall Stanicky di RBC Capital Markets.

Randall Stanicky – RBC Capital Markets – Analista

Grande. Grazie ragazzi per le domande. Ne ho due, uno per Albert e uno per Angela. Albert, un paio di settimane fa, hai chiesto $ 4,5 miliardi per consentire costi in SI&A con un'opportunità per semplificare. Quindi, come possiamo: come possiamo pensare all'opportunità di riduzione dei costi dopo aver chiuso Upjohn in termini di numero uno, quanti risparmi incrementali vedete oltre ciò che è incorporato nel margine del 37%? E poi numero due, quanto di ciò potrebbe risalire a metà 2020 rispetto al 2021? E poi ho un seguito dopo quello per Angela.

Albert Bourla – Presidente e Amministratore Delegato

Va bene. Penso che dovresti – come può fare la domanda ad Angela adesso?

Chuck Triano – Vicepresidente senior, Investor Relations

Può tornare.

Albert Bourla – Presidente e Amministratore Delegato

Può tornare? Va bene. Tutto ok. Quindi quest'anno abbiamo circa 14,3 miliardi di dollari di SI&A e chiederò a Frank di eseguire i numeri in modo più dettagliato. E come ho detto, per la metà circa è ciò che chiamiamo funzioni abilitanti. Queste sono funzioni come finanza, legale, risorse umane, strutture che stanno facilitando e consentendo alle funzioni chiave della nostra attività di svolgere funzioni chiave, intendo, ricerca e sviluppo che sta scoprendo i prodotti, la produzione, che li sta facendo accadere e commerciali, che li sta mettendo a disposizione dei pazienti.

Crediamo che questo, per mezzo miliardo e in realtà circa 10.000 persone, possa essere migliorato. E abbiamo in programma di farlo. Nella guida attuale, e chiederò a Frank di commentare, c'è una parte, una piccola parte di ciò, opportunità di costo, risparmi già incorporati. E nel 2021 sarà una parte molto più grande. Quindi, Frank.

Frank D'Amelio – Chief Financial Officer e Executive Vice President, Global Supply and Business Operations

Quindi Randall, lasciami solo eseguire i numeri, il che è se, ad esempio, guardi alla SI&A effettiva del 2019, abbiamo speso circa 14 miliardi di dollari come azienda. Ovviamente, quei 4,5 miliardi di dollari a cui Albert ha fatto allusione in quei 14 miliardi di dollari. Se osservi le nostre linee guida 2020 per SI&A, la gamma è compresa tra $ 12 miliardi e $ 13 miliardi, punto medio $ 12,5 miliardi. $ 12,5 miliardi da $ 14 miliardi è un calo di $ 1,5 miliardi. Ora, circa la metà di questi sono consumatori. Perché, una volta concluso l'affare nel 31 luglio 2019, siamo passati dal consolidamento della contabilità del consumatore alla contabilità azionaria sul consumatore.

La restante metà è costituita da risparmi realmente operativi in ​​tutta la Società, inclusa una parte del – inclusi alcuni dei 4,5 miliardi di dollari a cui Albert ha accennato. E ciò ovviamente ha contribuito a contribuire all'IBT come una percentuale delle entrate che è migliorata dal 35% – da metà degli anni '30 al 37%. E poi al punto di Albert, ovviamente quello che stiamo facendo ora sta lavorando su ulteriori miglioramenti che avrebbero ovviamente un impatto positivo sul SI&A e su cui si è basato.

Chuck Triano – Vicepresidente senior, Investor Relations

Grande. Grazie Albert e Frank. La prossima domanda, per favore.

Operatore

La tua prossima domanda arriva da Chris Schott di JPMorgan.

Chris Schott – JPMorgan – Analista

Ottimo, grazie mille per la domanda. Ne avevo appena tre, veloci e veloci. Il primo è stato su Vyndaqel. Sembra un bel passo avanti in tutte le metriche dei pazienti, sembra che tutte quelle sostanzialmente raddoppiate o triplicate dal 3 ° trimestre. Puoi aiutarci a colmare quelle figure con la rampa di vendite sequenziale che abbiamo visto che non era così drammatica?

La seconda domanda era su Ibrance. Solo un'elaborazione lì in termini di ciò che ha guidato le scadenze riviste per PALLAS, e hai dato un altro sguardo intermedio ai dati a questo punto? E poi finalmente su tanezumab, solo un aggiornamento in termini di stato e prospettive per quel prodotto a questo punto. Grazie mille.

Albert Bourla – Presidente e Amministratore Delegato

Molto buona. Grazie mille. Chiederò ad Angela di rispondere alle domande su Vyndaqel e tanezumab e poi dirò alcune parole su Ibrance e forse chiederò a Mikael di intervenire. Per favore.

Angela Hwang – Presidente del gruppo, Pfizer Biopharmaceuticals Group

Si. Quindi, grazie per la domanda. E certamente, siamo soddisfatti dell'aumento della diagnosi, della prescrizione e del numero di pazienti che stanno ricevendo Vyndaqel. Come hai detto, la nostra diagnosi ora è fino a circa il 9%, la capacità dei pazienti di ricevere prescrizioni fino al 64% circa di quelle diagnosticate e quelle che ricevono farmaci sono circa il 35% di quelle diagnosticate e ogni trimestre da allora abbiamo segnalato questo, abbiamo assistito ad alcuni miglioramenti. Quindi siamo sicuramente contenti di questo.

Penso in termini proprio del tipo di allineamento commisurato ai numeri di vendita netti effettivi, penso che ci siano ovviamente lì – ogni singolo giorno questa è una situazione dinamica e il numero e la percentuale di pazienti, siano essi Medicare e vite commerciali, quelli stanno cambiando. E quindi il lordo delle reti di quelle influenzerà, penso, ciò che vedi su una base di vendita netta. Quindi penso che stiamo osservando e concentrandoci davvero sulla guida della diagnosi e assicurando che quanti più pazienti possano assumere questi farmaci il più possibile, e stiamo iniziando a vedere un bel pickup. Ma penso che sia ancora una situazione molto dinamica perché siamo davvero relativamente nuovi in ​​questo processo. Quindi continueremo a monitorare e dovremmo aspettarci di vedere alcune variazioni trimestrali in termini di vendite nette.

Albert Bourla – Presidente e Amministratore Delegato

E ovviamente i nuovi pazienti stanno contribuendo in modo sproporzionato perché sono in meno mesi di trattamento in termini di vendite.

Angela Hwang – Presidente del gruppo, Pfizer Biopharmaceuticals Group

Giusto. E poi la tua seconda domanda era su tanezumab. Quindi siamo davvero contenti che nel dicembre del 2019 abbiamo completato la nostra presentazione negli Stati Uniti di tanezumab e stiamo anche perseguendo osservazioni normative nell'UE e in Giappone. Questa presentazione è stata fatta in stretta collaborazione con la FDA e include 2,5 milligrammi nei pazienti con osteoartrite da moderata a grave. Quindi, in questo momento stiamo aspettando l'accettazione di questo deposito. Ma vediamo un potenziale significativo di tanezumab nell'osteoartrite. Quindi siamo davvero entusiasti di questo deposito, in particolare perché siamo in un momento in cui le soluzioni non oppioidi sono molto, molto necessarie per questi pazienti.

Se guardi al potenziale di mercato, oggi ci sono circa 27 milioni di americani che soffrono di artrosi e 11 milioni di quelli hanno una OA da moderata a grave. L'80% di questi 11 milioni di persone ha provato e fallito tre o più analgesici. Quindi questo ci dice che c'è solo un'enorme quantità di bisogni insoddisfatti in questa popolazione di pazienti. I pazienti stanno pedalando attraverso una serie di farmaci antidolorifici e c'è semplicemente un'incredibile necessità di nuove opzioni ed è qui che pensiamo che tanezumab possa davvero soddisfare un bisogno insoddisfatto. Ha il potenziale per diventare il trattamento non oppioide di prima classe per questi pazienti e attendiamo con impazienza l'accettazione di questo fascicolo da parte della FDA.

Albert Bourla – Presidente e Amministratore Delegato

Grazie. Ora lasciami rispondere alla domanda su Ibrance. Il previsto completamento dello studio è leggermente diminuito – poche settimane, in realtà. Era alla fine del '19 – mi scusi, alla fine del '20, e ora si è spostato all'inizio del '21. L'unica ragione di ciò è che gli eventi non stanno arrivando al ritmo che avevamo previsto e previsto. Quindi, in altri modi, le persone non stanno progredendo nella loro malattia. Non penso che possiamo trarre alcuna conclusione se ciò significa una buona notizia o una cattiva notizia. Penso che siano solo fatti dei dati. Non sappiamo se le persone non stanno progredendo equamente nelle due braccia o se non stanno progredendo nel braccio terapeutico. Ciò resta da vedere quando ci sveliamo la data.

Per quanto riguarda la tua domanda, se è stata effettuata un'analisi intermedia, non è stata effettuata un'analisi intermedia. Quindi non abbiamo visto un'analisi intermedia. Ci sarà un'analisi intermedia, ma non ci aspettiamo che – lo scenario più probabile è che lo studio continuerà quando arriverà questa analisi intermedia. Lo studio è stato progettato per giungere al completamento completo e i criteri che abbiamo impostato per iniziare per l'efficacia nello studio interinale sono molto, molto alti. Quindi non è impossibile che ciò accada, ma molto probabilmente lo scenario è che, come avevamo pianificato, alla fine dello studio, questo è ciò che accadrà.

Siamo molto – rimaniamo ancora molto, molto incoraggiati e ottimisti su Ibrance. Certo, è una fase 3. Non sai mai cosa sarebbe. Ma tutta la scienza che sta dietro sostiene che potremmo avere un risultato positivo. And I will ask actually Mikael to make few comments on the science and what does this mean.

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

I'll just punctuate a few things that Albert described so well. Four aspect of why we are very excited and optimistic about the science and clinical data to predict a potential positive outcome for the discussed PALLAS study. As you know, first of all that the CDK4/6 inhibitor Ibrance converge with SGN receptor drives 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 is noteworthy including also overall survival data — again showing, in medical practice, the importance of these drugs.

Three, the PALLAS study that looked at the ability of palbociclib, Ibrance to stop dividing of SGN 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 SGN 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 the trial that actually started four 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 a trial. But with all of this, you can hear we remain encouraged, enthusiastic about what Ibrance can offer for adjuvant treatment of breast cancer.

Chuck Triano – Senior Vice President, Investor Relations

Giusto. Thanks for the helpful context, Michael. Next question, please.

Operator

Your next question comes from Terence Flynn from Goldman Sachs.

Terence C. Flynn – Goldman Sachs — Analyst

Hi, thanks for taking the questions. Maybe just two product ones for me. I was wondering if you can talk about Ibrance's rest of world dynamics, any specific headwinds this quarter and how to think about the trajectory into end of this year. And then for Xeljanz, I was wondering if you can give us a split of sales by indication and if you're seeing any impact in RA from the launch of AbbVie's Rinvoq on either share price. Grazie.

Albert Bourla – Chairman and Chief Executive Officer

Thank you very, very much. So, Angela?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Sicuro. So first of all on Ibrance. We continue to see good growth and strong growth ex-US. But probably two 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 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 is still opportunity for us to grow and that growing the CDK class is going to be an area of our tremendous focus for us, ex-US in 2020 and beyond.

Your second question was around Xeljanz. And so Xeljanz again, we continue to see excellent growth in Xeljanz. In fact, despite the fact that you only see this 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 that 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 '18, we saw an inventory build at the end of the year, which didn't happen in Q4 '19. So that was one of the reasons that affected our Q4 performance in '19 and then also and more importantly, throughout the course of 2019, we gained significant access.

In fact, we added 59 million incremental lives through contracting, and it's because of the timing of when these contracts were signed or renewed that drove the subsequent impacts of rebates, and this sort of came to a head and sort of disproportionately affected us in Q4 of ' 19. So I think stepping back, we're really pleased with the access that we do have in Xeljanz since it was launched eight 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 Rinvoq.

You asked a question around Rinvoq. 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.

Chuck Triano – Senior Vice President, Investor Relations

Giusto. Thank you very much, Angela. Next question please.

Operator

Your next question comes from Umer Raffat from Evercore.

Umer Raffat – Evercore ISI — Analyst

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 if there's something we should be very concerned about.

Mikael, two quick ones, one quick one for you on the DMD gene therapy for a minute. You mentioned there is a proof-of-concept coming. My question is, have there been additional protocol-driven pauses in enrollment and I asked because recall when the first SAE and 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&A line. I know it's a little higher than consensus, but technically year-over-year versus 4Q '18, it wasn't that much higher, but I also realized 4Q '18 had some Consumer. Maybe if you could just tell us about your holiday party. Grazie mille.

Albert Bourla – Chairman and Chief Executive Officer

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?

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Si. Just to remind you we shared at the PPMD conference mid of last year update on six patients dosed with our DMD gene therapy that showed encouraging data on expression new muscle fibers amount to micro dystrophin and on some of the patients we had also an opportunity to report the encouraging trends on functional outcomes. We have dosed additional patients since then.

And we continue to garner 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 2 this spring. And based on current data and insights we are planning to start Phase 3, of course pending regulatory dialogs later this year, as indicated in Albert's opening remarks.

Albert Bourla – Chairman and Chief Executive Officer

All right, Frank. Maybe you want to tell us about the holiday party I was not invited to.

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

Sicuro. Yes, I wasn't invited either. So I'm busy since the party. Well, let me run the numbers, and I'll explain what happened. So for the quarter SI&A all in was about $4.1 billion. It was up about 4% operationally, $100 million, 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 Vyndaqel and some increased investments in emerging markets, but it was really investment in terms of supporting our brands.

Albert Bourla – Chairman and Chief Executive Officer

Si. Thank you, Mikael. 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 spend 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 we associate.

Umer Raffat – Evercore ISI — Analyst

And these are clearly direct expense spend?

Albert Bourla – Chairman and Chief Executive Officer

And these are all direct expense spends. And the same, by the way, although you didn't ask, comes to R&D. Right now, we are increasing R&D investments, but we are increasing R&D investments only for programs, only for projects. We are not increasing for infrastructure, we are not increasing for research centers. At large, we maintain a very strong presence there and we keep that very strong. But what is driving the increased R&D, it is more Phase 3 or Phase 2 studies. It's very clear.

Chuck Triano – Senior Vice President, Investor Relations

Giusto. Grazie. Next question please, operator.

Operator

Your next question comes from David Risinger from Morgan Stanley.

David Reed Risinger – Morgan Stanley — Analyst

Sì. Grazie mille. 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 on how we should think about the EPS implications when we consider your guidance relative to consensus, which had assumed some share repurchase.

Second, regarding the opportunity to rationalize the $4.5 billion 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 third, regarding the transfer of $600 million in revenue to Upjohn, does that change the economics that Pfizer will receive as part of the exit to Mylan? Grazie.

Albert Bourla – Chairman and Chief Executive Officer

Yes, 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, all the opex to modernize our facilities — all the capex to modernize our facilities. The reason why we don't do right now share repurchase is because we 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 financing visionary. We couldn't invest them and create higher value. Now is 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 on EPS this year are organically (Indecipherable) but we can use the capital to invest in good Phase 2, Phase 3 assets that will build our pipeline. So this is the strategy behind it.

Now let me ask Frank to run the numbers.

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

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. One, we also announced a 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.

Now let me answer your other couple of questions. On the $600 million transfer to Upjohn and does that change any of the economics. Let me kind of — 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 the Viatris upon close. 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 $4.5 billion 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&A, and obviously our intent would be for that to show up in the IBT 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.

Albert Bourla – Chairman and Chief Executive Officer

Thank you, Frank. Just a comment on the reasons why we transfer those business to Upjohn. Both on these 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 — but right now it's shared between the Mylan, we are providing for them.

And the second, it is, say, a partnership that we have with Mylan that was established years back and with generic (Indecipherable). So both of them fit much better in Viatris and that's the reason why we separated them. And also that will allow you to have, in case that this happens, a much more cleaner view of a growth trajectory of the Company because now you know exactly what will be the P&L of the remaining company.

Chuck Triano – Senior Vice President, Investor Relations

Grazie. Next question, please, operator.

Operator

Your next question comes from Louise Chen from Cantor.

Louise Alesandra Chen – Cantor Fitzgerald — Analyst

Hi, thanks for taking my questions here. So I had a few. My first question is, is the 6% — approximately 6% five year sales CAGR for stand-alone Pfizer, the New Pfizer still hold? Second question I had is, how much of a priority is M&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 dataset 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. Grazie.

Albert Bourla – Chairman and Chief Executive Officer

Si. Thank you very, very much Louise. Let me start with the 6% CAGR, if it still holds, absolutely. It's still holds. Actually, as you can see, if anything else, this business what we are projecting five years CAGR, all the way to '25 actually CAGR, of 6%. This year performed at 8%, 9% 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 the M&A, yes, the M&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 purchases right now because we do believe that we can create significant value with the right strategic move.

Now, we never say never to anything. But strategically we have made very clear that we are not interested in for a big M&A that will have cost synergies as value driver because, first of all, that would be like diluting our top line growth. I don't think there are many companies that they can have this type of growth trajectory that we have in the next few years.

Second, it could be disruptive because having a big M&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 in 20s and 30s and also all this pipeline that is coming up. So we never say never, but this is not our strategy. Our strategy for M&A, it is to be able to have Phase 2, Phase 3 programs ready — Phase 2, Phase 3, 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 this 6% growth for the long term, actually for the very, very long term because it's right now five years, I would say, is the 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 appropriate. Now, if all the Phase 3 goals in the right way and they are all successful, it's not going to be 6%. It is going to be double digits, 12%,13%, 14%, 15%. Now, if everything fails, also will not be 6%; will be very low.

But these statistics works and the studies — and 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 on two or three major results, that if they could go one way or another could affect. Right now, they are dependent on 15, 16, 17 blockbusters and then many other that are much smaller.

So then, Frank, maybe something to add on that before I ask Mikael to comment on specific data?

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

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 2007. 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.

Albert Bourla – Chairman and Chief Executive Officer

Mikael?

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Si. I'm pleased that you asked about our (Indecipherable) next generation. So as you know, we have adult and pediatric studies ongoing. The adult study has been given breakthrough designation on 28 September based on our encouraging Phase 2 data, and we expect very soon to report Phase 3 outcome of the adult PCV20 trial. And obviously, we are optimistic about that outcome based on the Phase 2 and the breakthrough designation.

On the pediatric, we have now accumulated further (Indecipherable) dose data of the PCV20 Phase 2 study. These data from the (Indecipherable) further substantiate the positive data reported in the press release of the (Indecipherable) and we expect initiation of Phase 3 soon for the infant vaccine pending discussions with regulators. The full dataset 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 PCV20 from us versus a potential competitor 15-valent. And he mentioned 33% better coverage for adults and 42% better coverage in the US for infants, obviously very important significant better coverage. I just wanted to punctuate when you look in the top European market similar improved coverage in adults is actually 62 to 100%, in infants 80 to 200%. This is all for invasive pneumococcal disease.

Also in US, we have analyzed for community-acquired pneumonia where we see substantial data 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.

Albert Bourla – Chairman and Chief Executive Officer

Grazie.

Chuck Triano – Senior Vice President, Investor Relations

Grazie. Next question please, operator.

Operator

Your next question comes from Steve Scala from Cowen.

Stephen Michael Scala – Cowen and Company — Analyst

Grazie. Ho alcune domande. 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, Mikael, 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 31 meeting? Grazie mille.

Albert Bourla – Chairman and Chief Executive Officer

Well, thank you very much, Steve. Very good question. So, Frank why don't you clarify once more the dividend?

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

Sicuro. So, Steve, in terms of the guidance, you are 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'd be a reduction. I don't see it that way. What we've said is the sum of Viatris dividend and our dividend would equal the current dividend that a Pfizer shoulder receives today. So I don't see a reduction in the dividend. The dividend income will be kept whole. I think we've been very clear about that all along.

Albert Bourla – Chairman and Chief Executive Officer

And we'll continue growing, maybe not at the same pace, which we do right now, it's $0.02 per quarter, but we'll continue growing.

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

Giusto. And Steve I can quickly run the numbers for you if you'd like, just — so what do you think? What Viatris has said, is their first full year of about $4 billion of free cash flow, they'd pay about 25% of that in the dividends, so that's 1 (Phonetic) billion. Total Viatris will have about 1.2 billion shares, you put the 1 billion over 1.2 billion shares, it's about $0.83. The exchange ratio is about 1-2 (Phonetic). You put a 100 shares of Pfizer, you get 12 shares of Viatris assuming a spin that's roughly $10 a share. We would reduce our dividend on an annual basis by that $10 but some of our dividend plus that $10…

Albert Bourla – Chairman and Chief Executive Officer

$0.10.

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

$0.10, I'm sorry, yeah, thank you, would equal what Pfizer's only gets today. And my thing it's $10 not $0,10.

Albert Bourla – Chairman and Chief Executive Officer

Okay.

Stephen Michael Scala – Cowen and Company — Analyst

Abrocitinib?

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Sì. 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 abrocitinib and Dupixent suggest that we should expect to see 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 two weeks and then following the study through the 12 to 16 weeks.

And the historical data suggests that we should be very optimistic about abrocitinib outperforming biological such as Dupixent on itch relief at earlier time points and provide the 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.

Albert Bourla – Chairman and Chief Executive Officer

And on the DMD question.

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Si. We are finalizing I think the program for the R&D Day. So I can't be absolutely promise you, but I think it's likely that such an interesting program as the DMD 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.

Albert Bourla – Chairman and Chief Executive Officer

Thank you very much, both. And by the way, Frank, as always was right. It is $10 for 20 shares of Mylan.

Chuck Triano – Senior Vice President, Investor Relations

Tutto ok. Move on to our next question, please.

Operator

Your next question comes from Geoff Meacham from Bank of America.

Geoff Meacham – Bank of America — Analyst

Good morning, guys. Grazie mille per la domanda. Just have a couple. Mikael, the gene therapy platform with the advancement of hemophilia A and B, as well as DMD into Phase 3, 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.

And then for Angela on Xtandi. I just wanted to get your perspective on the inroads you've made in M0 prostate patients and where do you think could represent a tipping point commercially, especially given that generic Zytiga available in the US. Grazie.

Albert Bourla – Chairman and Chief Executive Officer

Mikael?

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Sì. So, Geoff, you are showing (Indecipherable) 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 three programs you alluded to are of course the frontier for us with factor IX that we hope to be the first company bringing that over the finish line in Phase 3 now and to start additional two Phase 3s for hemae (Phonetic) where we think we have a best-in-class profile so far. And then we already spoke about the NDA (Phonetic).

Albert Bourla – Chairman and Chief Executive Officer

Grazie mille. Angela?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Sicuro. 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 two things. One was actually 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 vis-a-vis generic Zytiga, we really don't see a competition from a generic versus brand in this instance. I think the competition — Zytiga is really among generic Zytiga versus branded Zytiga, whereas what we're seeing here is a clear uptick in Xtandi and specifically from the prostate 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 and uptake in urology prescribing. And we do believe that this is underpinning the growth of our non-metastatic population. And the fact that these are patients also earlier in their disease is helpful in driving our growth in this population.

I also mentioned that just from a market share perspective, though the non-metastatic, the M0 population has Xtandi, Erleada 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.

Chuck Triano – Senior Vice President, Investor Relations

Grande. Thank you, Angela. Next question, please, operator.

Operator

Your next question comes from Tim Anderson from Wolfe Research.

Tim Anderson – Wolfe Research — Analyst

Grazie. A couple of questions. One is on Prevenar 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 suggest they have capacity that's in the 10s 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 the sort of potential competition into your forecast.

Second question is on M&A. So any M&A that you may engage with in 2020? Should we assume at least during this first six month window while you still have Upjohn that that is probably put on hold? And then last question on Vyndaqel. 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?

Albert Bourla – Chairman and Chief Executive Officer

Grazie mille. I will give a quick answer to your M&A question, Tim, and then Angela can deal with Prevenar China growth. On M&A, no, the answer is no, absolutely not. We are very actively looking to invest capital on value creation opportunities. And then I assume that we will have several of them in the first half of 2020 before the close of the deal. Again, across the lines that I have described, you know exactly what we're doing. We want to make sure that we sustain the growth beyond 2027 when the alloys will have some impact.

Angela, what about Prevenar China?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Sicuro. So we have acknowledge that there is a new competitor in the form of Volvax (Phonetic) in PCV13. However, I want to recognize that there are some differences here. Though it is a 13 valent vaccine, Volvax's vaccine is made with a different conjugate. And this conjugate technology being an older technology, so quite different from what we see in PCV13. 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 million new births every year in China and today only over maybe 1% of those infants are being vaccinated. So regardless of the volumes that Volvax 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 Volvax' 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 points 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.

Albert Bourla – Chairman and Chief Executive Officer

What about Vyndaqel?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Tutto ok. So in terms of Vyndaqel, 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 — we're confident about what we've learned in the marketplace, in our first year of launch. We are confident that we have the right set of tools for helping to physicians to suspect the patients that might have ATTR-CM. We have mobilized education around using non-invasive methods like scintigraphy to diagnose patients. And we have 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.

Chuck Triano – Senior Vice President, Investor Relations

Grande. Grazie. Next question, please.

Operator

Your next question comes from Andrew Baum from Citi.

Andrew Baum – Citi — Analyst

Grazie. Couple of questions, please. Firstly on your pending oncology biosimilars rollout in the US. Given the challenges to start with biosimilar penetration, could you talk to your expectations, particularly with these three drugs, there should be an economic incentive for payers given the pass-through. But yes, those issues in patients already on an established (Indecipherable) biosimilar to switch — and it's a brand to switch to biosimilar. So if you could give us some kind of sense of how much penetration and how quickly you may expect, that would be super helpful.

And then second, in terms of tafamidis, Angela, you tried to give some penetration figures at the beginning which I was struggling to keep up with and writedown. 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? Grazie molto.

Albert Bourla – Chairman and Chief Executive Officer

Angela, a lot of questions for you today. Please go ahead.

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Okay. Sicuro. Tutto ok. So I think firstly we see the dynamics in oncology biosimilar as being very different from that of the — what we saw 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 is going to be much quicker. This is — the use of 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 them 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 some — we already have some precedents. We saw this with Retacrit, where after a year of being in the market (Indecipherable) supportive care in oncology. We already have 20% market share. This is still a far cry from what we see in Europe where there is much more rapid uptake. But I think that's, it's a signal, 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 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 three oncology biosimilars, all coming out around the similar time like around now. And I think what we have — we have a robust pricing strategy discount to the WACC (Phonetic) 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.

Albert Bourla – Chairman and Chief Executive Officer

Thank you, Angela.

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

And then your question was around tafamidis. So can you just repeat that again?

Andrew Baum – Citi — Analyst

The untapped population (Indecipherable).

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

So, as we have said in previous calls, we do believe that this is a rare disease and that in the US, there will be about 100,000 patients in total. Globally, 500,000, but in the US, 100,000. 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 on 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 100,000 of these patients. And what I spoke earlier about in terms of the education, in terms of how to 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.

Chuck Triano – Senior Vice President, Investor Relations

Grande. Grazie. Next question, please.

Operator

Your next question comes from Navin Jacob from UBS.

Navin Jacob – UBS — Analyst

Ciao. 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 biosimilar. So I'm 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 billion 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 Vyndaqel, you received a positive CHMP opinion in the EU in December. Given that Vyndaqel is already approved in the polyneuropathy indication, wondering how we should be thinking about the price with the addition of the cardiomyopathy indication. Is there any chance for moving that around? And then how we think about the ramp in the EU, relative to the US? Grazie mille.

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Sicuro. So, I'll start with the last one first. So you're right, we just received EU approval for Vyndaqel. And as you know, there is 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 Vyndaqel as well as its reimbursement. You referred to the fact that we already have the 20 milligram of peripheral polyneuropathy in Europe and we recognize that.

That being said, we have — first of all, ATTR-CM is a completely different indication. The trials that were conducted as well as the significant mortality benefits that were demonstrated in our clinical trials in ATTR-CM are completely different, and we have the clinical data to demonstrate the great patient benefits that we have in ATTR-CM. And so that's the basis of our discussions with each of the countries in Europe for reimbursement.

Your second question was around Vyndaqel 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 beat that. And so that's what we are intensely focused on. We have 10% of our patients — or with 9% in the US are diagnosed today, we have a long way to go and that's what we need to do.

Your last question?

Navin Jacob – UBS — Analyst

Was the rhythm on the biosimilars. We've had strong growth, 22% this year for the year. What can we expect going forward?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Giusto. So I think in terms of the biosimilars, again, this is an area of growth that we can anticipate. We have three biosimilars now in oncology, plus the two that we have been 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.

Chuck Triano – Senior Vice President, Investor Relations

Giusto.

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

I just would — yeah, I just wanted to add that Vyndaqel polyneuropathy has a positive EU recommendation. So we expect approval to come soon. And you know that links very nicely to really helpful outline you did, Angela.

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Thanks, Mikael.

Chuck Triano – Senior Vice President, Investor Relations

Grande. And if we can take our last question please, operator?

Operator

Your final question comes from the line of Mani Foroohar from SVB Leerink.

Mani Foroohar – SVB Leerink — Analyst

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. (Indecipherable) 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 US, how do you think about the opportunity to pursue a supplemental NDA or similar strategy in the US 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 in a couple of Phase 3s 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 that are more appropriate for chronic therapy such as (Indecipherable) Thank you.

Albert Bourla – Chairman and Chief Executive Officer

Si. I think I will ask Mikael to start with gene therapy and (Indecipherable) follow this great assets that we have and how they fit together. Mikael?

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Si. Grazie mille. What I think is unique in our hemophilia portfolio, first, of course, we have a legacy of being one of the pioneers four intravenous delivery of factor VIII and factor IX. So we have a platform and experience on the business and R&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 opportunity to provide subcute 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 gene 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 the disease diagnosed at earlier age, I think this would be a very important treatment as it saves them from the breakthrough bleedings that occur on lifelong treatment with infused factor VIII (Phonetic) and particularly for patients that are at early age that are very physically active it is important to have a solution for cure. So I think this will be a tremendous important patient populations. But availability of subcutaneous agents will supplement them and also allow for patients that may have antibodies to gene therapies to use them until a sufficient number of gene therapies available that there is always one for each patient.

And finally, us bringing together, I think what's unique with us is the entire portfolio that can address these patients, and we look really much forward to the year around 2021 and '22 when we see this portfolio coming into registration phase. I think that was the main piece here.

Albert Bourla – Chairman and Chief Executive Officer

Si. And then, Angela, maybe on Vyndaqel, we have seen some uptick in markets that cardiomyopathy was not approved, what's going on there and about supplemental filing on polyneuropathy?

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Si. In terms of polyneuropathy in the US, this is something that we're continuing to explore with the FDA. Così…

Albert Bourla – Chairman and Chief Executive Officer

No, this is (Speech Overlap) made yet, but we are in discussions.

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

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 improved. It's an approved indication for us ex-US. So, we continue to actively promote it and it's probably as a result of those activities.

Albert Bourla – Chairman and Chief Executive Officer

Si. We will have, as we said, approval for that indication, and this is one I would think we will see material impact on Vyndaqel in cardiomyopathy in these patients who 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 have 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&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 forceful steps to strengthen each one of our businesses and eventually shred (Phonetic) the current Pfizer into a new, smaller, high growth profile enterprise that will remain powerhousing marketing but also has been converted to the powerhouse of science.

Following the expected close of the Upjohn and Mylan transaction later 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 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 continually advancing our internal pipeline and we'll augment it with mid-stage R&D programs through targeted bolt-on business development opportunities. As I referenced before, we should continue seeing these type of activities in the first and second half of this year. Of course, we are working very intensively to set up Upjohn to be in a strong position when it combines with Mylan to become (Indecipherable) 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.

Operator

(Operator Closing Remarks)

Duration: 88 minutes

Call participants:

Chuck Triano – Senior Vice President, Investor Relations

Albert Bourla – Chairman and Chief Executive Officer

Frank D'Amelio – Chief Financial Officer and Executive Vice President, Global Supply and Business Operations

Angela Hwang – Group President, Pfizer Biopharmaceuticals Group

Mikael Dolsten – Chief Scientific Officer and President, Worldwide Research, Development and Medical

Randall Stanicky – RBC Capital Markets — Analyst

Chris Schott – JPMorgan — Analyst

Terence C. Flynn – Goldman Sachs — Analyst

Umer Raffat – Evercore ISI — Analyst

David Reed Risinger – Morgan Stanley — Analyst

Louise Alesandra Chen – Cantor Fitzgerald — Analyst

Stephen Michael Scala – Cowen and Company — Analyst

Geoff Meacham – Bank of America — Analyst

Tim Anderson – Wolfe Research — Analyst

Andrew Baum – Citi — Analyst

Navin Jacob – UBS — Analyst

Mani Foroohar – SVB Leerink — Analyst

More PFE analysis

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UNITO
STATI

TITOLI
E COMMISSIONE DI SCAMBIO

Washington,
D.C. 20549

MODULO
10-K

(Marchio
Uno)

(X)	ANNUALE     RELAZIONE A NORMA DELLA SEZIONE 13 O 15 (d) DELL'ATTO DI SCAMBIO DI TITOLI DEL 1934

Per
l'esercizio fiscale si è chiuso il 30 settembre 2019

()	TRANSIZIONE     RELAZIONE A NORMA DELLA SEZIONE 13 O 15 (d) DELL'ATTO DI SCAMBIO DI TITOLI DEL 1934

Per
il periodo di transizione da ___________ a ___________

BENESSERE
CENTER USA, INC.

(Nome
dell'emittente di piccole imprese nella sua carta)

NEVADA		333-173216		27-2980395
(Stato     o altra giurisdizione di incorporazione o organizzazione)		Commissione Numero file		(IRS     Dipendente Numero di identificazione.)

145
E. University Boulevard, Tucson, AZ 85705

(Indirizzo
dei principali uffici esecutivi)

(847)
925-1885

(Emittente
Numero di telefono)

2500
West Higgins Road, Ste. 780, Hoffman Estates, IL, 60169

(Ex
nome o indirizzo precedente, se modificato dall'ultimo rapporto)

valori
registrato ai sensi della Sezione 12 (b) dello Exchange Act:

Titolo     di ogni classe registrata:		Nome     di ogni scambio su cui registrato:
Nessuna		Nessuna

valori
registrato ai sensi della Sezione 12 (g) dello Exchange Act:

Comune
Stock, valore nominale $ 0,001

(Titolo
di classe)

Indicare
con un segno di spunta se il dichiarante è un emittente stagionato noto, come definito nella Regola 405 del Securities Act. Sì ( )
No (X).

Indicare
con un segno di spunta se il dichiarante non è tenuto a presentare segnalazioni ai sensi della Sezione 13 o della Sezione 15 (d) della Legge. Sì ( )
No (X)

Indicare
con un segno di spunta se il dichiarante (1) ha archiviato tutti i rapporti che devono essere archiviati dalla Sezione 13 o 15 (d) della Borsa valori
Legge del 1934 nei 12 mesi precedenti (o per un periodo così breve che il dichiarante era tenuto a presentare tali rapporti),
e (2) è stato soggetto a tali requisiti di archiviazione negli ultimi 90 giorni. Si (X). No ( )

Indicare
con un segno di spunta se il dichiarante ha inviato per posta elettronica e pubblicato sul suo sito Web aziendale, se presente, ogni
Il file di dati interattivi deve essere presentato e pubblicato ai sensi della regola 405 del regolamento S-T (§229.405 del presente
capitolo) nei 12 mesi precedenti (o per un periodo così breve che il dichiarante era tenuto a presentare e pubblicare tale
File). Sì (X) No ().

Indicare
con un segno di spunta se la divulgazione di autori illeciti ai sensi dell'articolo 405 del regolamento S-K (§ 229.405 del presente capitolo) non è
contenuto nel presente documento, e non sarà contenuto, per quanto a conoscenza del dichiarante, in dichiarazioni definitive di procura o informazioni
incorporato per riferimento parte III del presente modulo 10-K o qualsiasi modifica del presente modulo 10-K. ().

Indicare
con un segno di spunta se il dichiarante è un filer accelerato di grandi dimensioni, un filer accelerato, un filer non accelerato o un più piccolo
società segnalante. Vedere le definizioni di “filer accelerato di grandi dimensioni”, “filer accelerato” e “più piccolo
società di segnalazione “nella regola 12b-2 dello Exchange Act.

	Grande     filer accelerato	()		Accelerated     filer	()
	Non-accelerato     filer	()		Più piccolo     società segnalante	(X)
	(Fare     non verificare se una società di reporting più piccola)

Indicare
con un segno di spunta se il dichiarante è una società di comodo (come definito nella Regola 12b-2 della Legge). Sì ( ).
No (X)

Là
non esiste un mercato commerciale pubblico consolidato per le nostre azioni ordinarie.

Stato
il valore di mercato aggregato delle azioni ordinarie votanti e senza diritto di voto detenute da società non affiliate calcolato con riferimento al prezzo
al quale è stato venduto il capitale ordinario o l'offerta media e sono stati richiesti i prezzi di tale capitale ordinario, a partire dall'ultimo giorno lavorativo di
il trimestre fiscale completato più di recente dal dichiarante è terminato il 30 settembre 2019: $ 2.773.921.

Come
del 30 settembre 2019, il dichiarante aveva 107.497.077 azioni ordinarie emesse e in circolazione.

Documenti
Incorporato per riferimento: Vedi punto 15.

TAVOLO
DI CONTENUTO

PARTE
io

Sfondo.

Benessere
Center USA, Inc. (“WCUI” o la “Società”) è stata costituita nel giugno 2010 ai sensi delle leggi dello Stato di
Nevada. Inizialmente ci siamo impegnati nel marketing e nella distribuzione di integratori sportivi e nutrizionali online. Successivamente ci siamo espansi in
ulteriori attività nel settore sanitario e medico attraverso acquisizioni, tra cui Psoria-Shield Inc. (“PSI”)
e StealthCo Inc. (“SCI”), d / b / a Stealth Mark, Inc.

Il
La società attualmente opera in due settori di attività: (i) distribuzione di fototerapia mirata Ultra Violet (“UV”)
dispositivi per dermatologia; e (ii) prodotti e servizi di autenticazione e crittografia. I segmenti sono condotti attraverso il nostro
consociate interamente controllate, PSI e SCI.

PSI

PSI
è stata costituita ai sensi delle leggi dello stato della Florida il 17 giugno 2009. Abbiamo acquisito tutte le azioni emesse e in circolazione
disponibile in PSI il 24 agosto 2012.

comune
Iniziative

Noi
condotto operazioni di PSI attraverso la Psoria Development Company LLC, una società a responsabilità limitata dell'Illinois (“PDC”), da
15 gennaio 2015 fino a ottobre 2018. PDC è stata una joint venture tra WCUI / PSI e The Medical Alliance, Inc., una società della Florida
( “TMA”). Il 15 novembre 2018, PSI e TMA hanno chiuso la joint venture PDC. Alla data di cessazione, il non controllo
la quota di interesse delle perdite accumulate nella joint venture è stata di $ 405.383. Durante l'anno conclusosi il 30 settembre 2019,
la Società ha cancellato la quota di partecipazione di minoranza delle perdite accumulate e ha registrato una perdita derivante dal deconsolidamento
di partecipazione di minoranza di $ 405.383.

Nel
Dicembre 2018, la Società e PSI hanno stipulato un accordo di joint venture con PSI GEN2 Funding, Inc., una società dell'Illinois
(“GEN2”), per sviluppare ulteriormente, commercializzare, concedere in licenza e / o vendere tecnologia e prodotti PSI. L'accordo di joint venture
prevede che l'impresa sia condotta attraverso NEO Phototherapy, LLC, una società a responsabilità limitata dell'Illinois (“NEO”),
con PSI e GEN2 a detenere quote associative che rappresentano rispettivamente il 50,5% e il 36,0%. Prevede un ulteriore
Il 13,5% di tali Unità sarà riservato per l'emissione a titolo di incentivo a dipendenti e consulenti chiave. PSI e GEN2 sono congiuntamente
gestire le operazioni quotidiane di NEO.

Secondo
all'accordo di joint venture, PSI contribuirebbe la tecnologia PSI a NEO in considerazione delle sue unità e GEN2 contribuirebbe
$ 700.000 per le sue unità. Una volta che NEO ha realizzato e trattenuto l'utile netto cumulativo / liquidità distribuibile per un importo di $ 300.000,
i successivi $ 700.000 di reddito netto cumulativo realizzato e trattenuto / liquidità distribuibile sarebbero distribuiti a GEN2. distribuzioni
da quel momento in poi verrebbero fatti a PSI, GEN2 e altri membri, se presenti, in proporzione alla rispettiva proprietà dell'unità
e secondo le modalità determinate di volta in volta dai gestori, a loro esclusiva discrezione.

Come
del 30 settembre 2019, le operazioni di NEO hanno richiesto finanziamenti superiori ai $ 700.000 inizialmente previsti dalla joint venture.
A partire da quella data, GEN2 aveva contribuito con $ 925.000 a NEO, per cui GEN2 ha ricevuto unità che rappresentano un totale cumulativo del 39,0%
proprietà di NEO. Unità aggiuntive che rappresentano una partecipazione del 10% in NEO sono state assegnate a un individuo come personale chiave
incentivo dalla riserva inizialmente stabilita per tali premi, senza ulteriori premi attualmente previsti. Di conseguenza, una volta
NEO ha realizzato e trattenuto l'utile netto cumulativo / liquidità distribuibile per un importo di $ 300.000, i successivi $ 975.000 realizzati
e l'utile netto cumulativo trattenuto / il denaro distribuibile sarebbe distribuito a GEN2. Le distribuzioni successivamente sarebbero fatte a
PSI, GEN2 e l'altro membro, in proporzione alla rispettiva proprietà dell'unità, nei tempi e secondo le modalità stabilite da
di volta in volta dai gestori, a loro esclusiva discrezione.

GEN2
i contributi a NEO sono stati derivati ​​dai suoi azionisti, che consistono in investitori accreditati e che includono diversi WCUI
funzionari e direttori, tra cui Calvin R. O’Harrow, Roy M. Harsch, William E. Kingsford, Douglas Samuelson, Paul D. Jones
e Thomas E. Scott. Gli azionisti di GEN2, compresi i suddetti funzionari e direttori di WCUI, condivideranno qualsiasi accumulato realizzato e trattenuto
reddito netto / denaro distribuibile che può essere distribuito a GEN2.

Come
del 30 settembre 2019, l'interesse della Società è stato adeguato al 51% della joint venture, GEN2 controllato al 39% e un'altra persona
controllato il restante 10%. La Società ha registrato la sua quota proporzionale di $ 471.750 a capitale aggiuntivo versato e $ 453.250
alla partecipazione di minoranza a partire da tale data. Durante l'esercizio chiuso al 30 settembre 2019, NEO ha registrato una perdita di $ 122.655 relativa
alle sue operazioni.

Psoria-Light

PSI
progetta, sviluppa e commercializza un dispositivo di fototerapia ultravioletta (“UV”) chiamato Psoria-Light. La luce della psoria
è designato per l'uso in fotochimica PUVA mirata e fototerapia UVB ed è progettato per trattare alcune condizioni della pelle tra cui
psoriasi, vitiligine, dermatite atopica (eczema), dermatite seborroica e leucoderma.

Psoriasi,
l'eczema e la vitiligine sono condizioni comuni della pelle che possono essere difficili da trattare e spesso causano al cliente un significativo psicosociale
fatica. I clienti possono sottoporsi a una varietà di trattamenti per affrontare queste condizioni della pelle, incluso il consumo sistemico di sistemico
e terapie farmacologiche biologiche che sono altamente tossiche, riducono la funzione del sistema immunitario sistemico e sono accompagnate da una miriade di chemioterapia
effetti collaterali. La fototerapia a ultravioletti (UV) è una modalità di trattamento alternativa validata clinicamente per questi disturbi.

tradizionalmente,
La fototerapia UV “non mirata” è stata somministrata da lampade che emettevano luce UVA o UVB per curare altre malattie e
pelle sana. Mentre le creme solari o altre barriere UV possono essere utilizzate per proteggere la pelle sana, i raggi UV somministrati in questo modo devono
essere a basso dosaggio per evitare un'eccessiva esposizione di tessuti sani. Oggi amministrano i dispositivi “mirati” di fototerapia UV
dosaggi di luce molto più elevati solo sul tessuto interessato, con conseguente “clearance” in caso di psoriasi ed eczema,
e “ripigmentazione” nel caso della vitiligine, a velocità molto più elevate rispetto ai trattamenti UV non mirati (basso dosaggio).

Mirati
I trattamenti UV vengono generalmente somministrati su aree della superficie corporea totale più piccole e vengono quindi utilizzati per il trattamento dei più intensi
parti della malattia di un cliente. Il trattamento UV non mirato viene in genere utilizzato come follow-up e per la manutenzione, in grado di
trattamento di grandi superfici del corpo. I dispositivi laser ad eccimeri (UVB a 308nm) sono costosi e consumano sostanze chimiche pericolose (Xenon
e cloro). I dispositivi con lampada al mercurio (UVB e / o UVA) richiedono regolarmente costose sostituzioni della lampada e richiedono uno smaltimento speciale
(a causa del contenuto di mercurio). Inoltre, i dispositivi con lampada al mercurio in genere forniscono lunghezze d'onda della luce inferiori a 300 nm. Mentre dentro
lo spettro UVB, è stato dimostrato che lunghezze d'onda inferiori a 300 nm producono significativamente più effetti collaterali di tipo “scottatura solare”
di lunghezze d'onda comprese tra 300 e 320 nm senza miglioramento del beneficio terapeutico.

Il
Psoria-Light è un dispositivo di fototerapia UV mirato che produce luce UVB tra 300 e 320 nm e luce UVA tra
350 e 395nm. Non richiede il consumo di sostanze chimiche pericolose o uno smaltimento ambientale speciale ed è conveniente
per i clinici, che dovrebbe comportare un maggiore accesso dei pazienti a questo tipo di trattamento. Ha diversi unici e avanzati
caratteristiche che riteniamo lo distingueranno dai dispositivi di fototerapia UV non mirati e mirati attualmente in uso
utilizzato da dermatologi e altri operatori sanitari. Queste caratteristiche includono quanto segue: l'utilizzo della banda stretta profonda
LED UVB (“NB-UVB”) come sorgenti luminose; la capacità di produrre lunghezze d'onda terapeutiche sia UVA che NB-UVB; un integrato
capacità di integrazione dei record client e fotocamera digitale ad alta risoluzione; la possibilità di esportare su un dispositivo di memoria USB esterno
un file PDF di informazioni sul trattamento che include un grafico in attesa di brevetto che include immagini digitali tracciate rispetto al tracciamento dell'utente
metriche che possono essere presentate per migliorare i rimborsi medici; una porta accessoria e possibilità di aggiornare il software; facilità di posizionamento
e portabilità; sensore di sicurezza per rilevamento sito di trattamento avanzato; supporto linguistico internazionale; una garanzia che include il
Lampade UV; e un registro di trattamento non modificabile (che non include informazioni HIPPA).

Il
Psoria-Light è composta da tre componenti: una console di base, un display a colori con controllo touchscreen e una consegna manuale
dispositivo con un condotto (o cavo) tra il dispositivo portatile e la console di base. Il PSI richiede l'autorizzazione da parte degli Stati Uniti
Food and Drug Administration (“FDA”) per commercializzare e vendere il dispositivo negli Stati Uniti, nonché il permesso da
TUV SUD America Inc., Organismo Notificato di PSI, per apporre il marchio CE su Psoria-Light al fine di commercializzare e vendere il dispositivo
nei paesi dell'Unione Europea.

Per
ottenere l'autorizzazione FDA e il permesso di apporre il marchio CE, PSI era tenuto a condurre test di sicurezza elettrica e EMC, che
è stato completato nel secondo trimestre del 2011. PSI ha ricevuto l'autorizzazione FDA l'11 febbraio 2011 (n. K103540) e gli è stata concessa l'autorizzazione
apporre il marchio CE il 10 novembre 2011. Nella sua domanda 510 (k) con la FDA (numero di domanda K103540), PSI ha affermato che
la Psoria-Light era “sostanzialmente equivalente” nell'uso e nella tecnologia previsti a due dispositivi predicati, l'X -Trac
Excimer Laser, che ha una vasta accettazione nella letteratura sulla fatturazione medica e ha una vasta base installata negli Stati Uniti e negli Stati Uniti
Dualight, un altro dispositivo di fototerapia UV mirato in competizione.

PSI
ha istituito un sistema di qualità conforme a ISO 13485 per Psoria-Light, che è stato verificato per la prima volta nel terzo trimestre del 2011.
Questo sistema ha lo scopo di garantire che i dispositivi PSI saranno fabbricati in un ambiente controllato e affidabile e che le sue risorse
seguire pratiche simili ed è richiesto per le vendite nei paesi che richiedono un marchio CE. PSI ha anche ricevuto la tecnologia spaziale certificata
designazione della Space Foundation, basata sull'incorporazione da parte di PSI della consolidata tecnologia LED finanziata dalla NASA.

PSI
ha iniziato la distribuzione di Psoria-Light Beta nel gennaio 2012. Attualmente è in perdita e non vi è alcuna garanzia che la sua attività
i piani e le strategie di sviluppo avranno mai successo. Il successo di PSI dipende dall'accettazione da parte degli operatori sanitari
e i clienti del trattamento Psoria-Light come metodo di trattamento preferito per la psoriasi e altre condizioni della pelle curabili ai raggi UV.
Il trattamento con Psoria-Light sembra essere stato benefico per i clienti, senza effetti collaterali dannosi dimostrabili o problemi di sicurezza,
come evidenziato da oltre 10.000 trattamenti completati su oltre 1.000 clienti, in patria e in Messico, dal 2012. In ordine
affinché la Società continui le operazioni di PSI, avrà bisogno di capitale aggiuntivo e dovrà coordinare con successo l'integrazione
delle operazioni di PSI senza influenzare materialmente e negativamente la continuazione e lo sviluppo di altre operazioni della Società.

SCI

SCI
è stata costituita ai sensi delle leggi dello stato dell'Illinois il 18 marzo 2014. SCI ha acquisito alcune attività di Stealth Mark in aprile
4, 2014 e opera come controllata al 100% della Società. È un fornitore di: a) Crittografia e autenticazione Stealth Mark
soluzioni che offrono tecnologie avanzate nei settori verticali della sicurezza e della gestione della catena di approvvigionamento (Microparticelle intelligenti),
e b) servizi avanzati di intelligence dei dati che offrono tecnologia proprietaria, senza precedenti e attuabile per industrie, aziende,
e agenzie su scala globale (ActiveDuty ™).

Intelligente
Le microparticelle

SCI
fornisce ai clienti una tecnologia di autenticazione all'avanguardia per la protezione di una vasta gamma di prodotti e marchi dalla contraffazione illecita
e attività di diversione. La sua tecnologia è applicabile a una vasta gamma di settori interessati dalla contraffazione, dalla diversione e
furto incluso, ma non limitato a, prodotti farmaceutici, difesa / aerospaziale, automobilistico, elettronica, tecnologia, consumatore e personale
prodotti per la cura, prodotti di design, bevande / alcolici e molti altri.

SCI
offre al cliente un sistema chiavi in ​​mano completo, semplice da usare, facile da implementare e conveniente che è estremamente difficile
compromettere. La tecnologia di SCI include una combinazione di software proprietario e microparticelle intelligenti che lo indicano
sono non duplicabili e non rilevabili per l'occhio umano. Questi taggant sono creati con materiali proprietari che creano unici
codici numerici che sono assegnati significato dal cliente e sono leggibili a macchina senza l'uso di terre rare o traccianti chimici.
Sono stati utilizzati in operazioni segrete e aperte con tecnologia facile da implementare e attività forensi sul campo
verifica del calibro.

Nel
Aprile 2018, la consociata della Società, SCI, ha concluso la licenza di un brevetto per la tecnologia di prossima generazione
Stealth Mark. Lavorando con i ricercatori degli Oak Ridge National Labs, il brevetto indica lo sviluppo di una nuova tecnologia
genererà un sistema di marcatura invisibile con attributi attualmente non disponibili nel mercato anticontraffazione oggi. Il
formula e tecniche sono state dimostrate attraverso test approfonditi per essere resistenti ai processi di produzione e possono essere utilizzate
una vasta gamma di materiali da tessuti e non tessuti, cartone, metallo, cemento, plastica, pelle, legno e carta. Nel
Inoltre, la complessità delle informazioni che possono essere codificate con il sistema rende difficile la contraffazione.

ActiveDuty ™

SCI di
I servizi di intelligence dei dati ActiveDuty ™ offrono una tecnologia unica, senza precedenti e utilizzabile per industrie, aziende e
agenzie su scala globale. Composto da una serie di potenti strumenti analitici, tra cui l'intelligenza artificiale e la psicologia sociale,
il servizio fornisce ai clienti informazioni tempestive e attuabili. ActiveDuty ™ è adattabile a un ampio spettro di illeciti
attività all'interno di settori sia privati ​​che pubblici quali, a titolo esemplificativo, contraffazione, traffico sessuale e di esseri umani, denaro
riciclaggio e una varietà di altri mercati.

Il
l'architettura algoritmica proprietaria di ActiveDuty ™ crea il primo meccanismo di reporting sistemico per offrire strategie
e risultati tattici supportati da un'intensa analisi mondiale dei modelli di comportamento umano. Il framework globale ActiveDuty ™
è di natura euristica, in grado di comprendere i big data attraverso lo spettro digitale e parla tutte le principali lingue. Fino al
ora, non esiste un sistema unificato in grado di misurare attivamente questo ciclo di vita che è un insieme discreto e apparentemente
comportamenti casuali di criminali ovunque all'interno del dominio digitale. I criminali cambiano la loro identità ma non i loro comportamenti di base.

SCI
inizialmente è stato gestito da Ricky Howard, che ha maturato oltre trent'anni di esperienza nella gestione delle operazioni e posizioni dirigenziali
in una varietà di settori che vanno dalle start-up imprenditoriali alle aziende Fortune 500. Ha svolto un ruolo fondamentale nel portare
le capacità dell'azienda al suo stato attuale, compresa la progettazione e la creazione delle sue capacità produttive, l'implementazione
del suo inventario ERP controlla il sistema, lo sviluppo di software e hardware, i processi di marketing e materiali di vendita e tutti i giorni
procedure e processi operativi. Nel novembre 2018, il signor Howard è morto improvvisamente e il signor O’Harrow ha assunto le operazioni
delle attività di SIC su base temporanea.

proposto
Condividi Exchange

Su
Il 3 settembre 2019, il nostro Consiglio ha approvato all'unanimità, previa approvazione degli azionisti, l'esecuzione e la consegna di un'Azione proposta
Accordo di scambio relativo allo scambio di azioni e al trasferimento di determinate attività di SCI a DTI Holdings, Inc. (“DTI”)
ai sensi dei termini e delle condizioni di un memorandum di accordo che prevede, tra l'altro, quanto segue:

	●	DTI     pagherà alla Società $ 500.000 dopo l'esecuzione di un accordo di scambio di azioni definitivo (“Accordo di scambio di azioni”)     che le parti si impegneranno a negoziare ed eseguire il più rapidamente possibile e non oltre il 15 ottobre 2019.
	●	DTI     pagherà alla Società ulteriori $ 500.000 entro sette giorni dalla data di completamento del trasferimento di tutte le attività     e / o piena proprietà di SCI a DTI, con tale data entro 120 giorni dall'esecuzione del Contratto di Borsa.
	●	DTI     emetterà alla Società 3.112.000 azioni di azioni ordinarie DTI e garantirà che il valore delle 3.112.000 azioni di     Le azioni ordinarie DTI avranno un valore di almeno $ 4,50 per azione ($ 14,004,000, in totale), al 31 dicembre 2021.
	●	Per     nella misura in cui il valore delle azioni ordinarie DTI, al 31 dicembre 2021, è inferiore a $ 4,50 per azione ($ 14.004.000, in     l'aggregato), DTI emetterà ulteriori quote di azioni ordinarie DTI, al valore di mercato equo allora attuale, per un importo     sufficiente a far sì che il valore complessivo risultante di tutte le azioni ordinarie DTI emesse alla Società sia di $ 14.004.000,     nel complesso.
	●	DTI     assegnerà le attività trasferite da SCI, inclusi marchi, proprietà intellettuali e brevetti, alla sua controllata,     Femtobitz, Inc., una società del Delaware, e pagherà alla Società l'1% delle entrate lorde annuali derivanti o relative a     operazione di Femtobitz, Inc.
	●	Su     chiusura della borsa valori, il Presidente della Società sarà nominato membro del consiglio consultivo di DTI e un consiglio     membro di Femtobitz, Inc.

Il
3.112.000 azioni di azioni ordinarie DTI che ci saranno emesse in cambio di tutte le nostre azioni ordinarie SCI rappresenteranno un
minoranza delle azioni emesse e in circolazione delle azioni ordinarie DTI alla data di emissione. Le azioni DTI saranno emesse in
affidamento all'esenzione dagli obblighi di registrazione ai sensi del Securities Act del 1933, come modificato (i “Titoli
Legge “), in conformità con la Sezione 4 (2) e il Regolamento D di seguito. Pertanto, tali azioni non possono essere offerte o vendute da
a meno che non siano registrati ai sensi del Securities Act o qualificati per un'esenzione dai requisiti di registrazione ai sensi del
Legge sui titoli.

Come
del 18 settembre 2019, gli azionisti che detengono la maggioranza delle nostre azioni ordinarie in circolazione hanno approvato la borsa valori e il
La società ha avviato discussioni e trattative con DTI, che sono attualmente in corso alla data del presente deposito. Non ci può essere
la garanzia che la transazione proposta sarà conclusa con successo nei termini descritti o in eventuali termini alternativi che potrebbero
essere proposto di seguito.

brevetti,
Marchi, franchising, concessioni, accordi di royalty o contratti di lavoro

PSI
ha ricevuto l'autorizzazione FDA per Psoria-Light l'11 febbraio 2011 (n. K103540) e gli è stato concesso il permesso di apporre il marchio CE
per la Psoria-Light nel quarto trimestre del 2011.

del PSI
il fondatore e il precedente presidente hanno presentato una domanda di brevetto provvisoria relativa a determinati aspetti della tecnologia che intendiamo
utilizzare nello sviluppo e nella commercializzazione di Psoria-Light, tra cui ergonomia palmare, piattaforma emettitore e LED
disposizioni, metodi per il rilevamento del sito di trattamento, metodi di raffreddamento, visualizzazione di informazioni utili, raccolta di immagini digitali
e correlazione grafica a metriche quantitative e progetti di console di base. Sono state presentate due domande di brevetto non provvisorie
reclamare la data di deposito precedente della domanda provvisoria iniziale.

Il
la prima applicazione non provvisoria descrive un sensore di distanza unico situato sulla punta del manipolo Psoria-Light, che
rileva il sito di trattamento in base a un campo proiettato. Il sensore può rilevare superfici elettrolitiche / conduttive, come la pelle umana,
senza richiedere alcun contatto elettrico fisico o diretto. Inoltre, il sensore unico può rilevare il sito di trattamento in qualsiasi momento
sulla punta del manipolo e senza causare alcuna attenuazione dell'emissione terapeutica di luce UV.

Il
la seconda applicazione non provvisoria descrive l'integrazione e l'uso di una fotocamera digitale nella Psoria-Light, inclusa la posizione
della fotocamera digitale e come e quando viene utilizzata per corrispondere comodamente alle routine di trattamento della vita reale, come vengono visualizzate le immagini
e catturato nella memoria, e viene illustrato il modo in cui le immagini sono organizzate nelle cartelle dei pazienti. Inoltre, il secondo non provvisorio
l'applicazione descrive l'inclusione di variabili definite dal medico, come i punteggi relativi alla qualità della vita relativi alla salute e il loro posizionamento
in una disposizione grafica relativa alle immagini del sito di trattamento.

Tutti e due
la domanda di brevetto provvisorio iniziale e le due domande di brevetto non provvisorio sono di proprietà dell'ex presidente di PSI,
che ha concesso a PSI la sola ed esclusiva licenza perpetua, mondiale, pagata, esente da royalty ai sensi della clausola provvisoria iniziale
domanda di brevetto, eventuali domande di brevetto non provvisorie da lui presentate che riguardano la tecnologia descritta nel provvisorio iniziale
domanda di brevetto e relativo know-how, dati tecnici e miglioramenti per sviluppare e commercializzare Psoria-Light.

del PSI
l'ex presidente ha presentato una seconda domanda di brevetto provvisorio contenente concetti per il miglioramento dei pacchetti di microelettronica
e soluzioni di gestione termica, il miglioramento dei dispositivi portatili di fototerapia in generale (utilizzati su esseri umani, animali,
o piante, o utilizzati su oggetti inanimati) e la sostituzione dei dispositivi di terapia laser con dispositivi a LED. Il PSI ha ottenuto la suola
e licenza perpetua esclusiva, mondiale, pagata, esente da royalty nell'ambito di questa seconda domanda di brevetto provvisorio, qualsiasi
domande di brevetto relative alla tecnologia descritta nella seconda domanda di brevetto provvisoria e relativo know-how, tecnico
dati e miglioramenti per sviluppare e commercializzare Psoria-Light.

Nel
Oltre a quanto precede, Stealth Mark ha dedicato notevoli sforzi e risorse per sviluppare e far progredire la sicurezza delle microparticelle
tecnologie a supporto delle sue attività commerciali. Viene mantenuta la protezione della proprietà intellettuale del Marchio Stealth acquisito
attraverso una combinazione di brevetti, marchi e segreti commerciali costituiti da quanto segue:

Brevetto U.S.		Rilasciato		“Titolo” –     Sommario
N. 6.647.649		18 novembre 2003		“Sistemi taggant microparticelle” – Generazione di codici di microparticelle da     segni contenenti microparticelle crittografate.
N. 7.720.254		18 maggio 2010		“Lettore automatico di microparticelle” – Lettori automatici per l'interrogazione     Segni di microparticelle.
No. 7.831.042		9 novembre 2010		“Autenticazione tridimensionale del marchio di microparticelle – Convalida di     Natura 3D del marchio di microparticelle per proteggere dalla contraffazione del marchio.
N. 7.885.428		8 febbraio 2011		“Lettore automatico di microparticelle” – Lettori automatici per l'interrogazione     segni di microparticelle (protezione ampliata).
No. 8.033.450		11 ottobre 2011		“Codici di espressione per segni di microparticelle basati su stringhe di firma” –     Generazione di codici di espressione (“impronte digitali”) univoci per ciascun marchio di microparticelle per proteggere dalla contraffazione     di marchi.
No. 8.223.964		17 luglio 2012		“Autenticazione tridimensionale del marchio di microparticelle – Convalida di     Natura 3D del marchio di microparticelle per protezione dalla contraffazione di marchi (protezione ampliata).

Europa WO / EP                                          Brevetto		Rilasciato		“Titolo” –     Sommario
Appl. No. 07753043.4		in attesa di		“Codici di espressione per segni di microparticelle basati su stringhe di firma” –     Generazione di codici di espressione (“impronte digitali”) univoci per ciascun marchio di microparticelle per proteggere dalla contraffazione     di marchi.
Appl. No. 07753034.3		in attesa di		“Autenticazione tridimensionale del marchio di microparticelle – Convalida di     Natura 3D del marchio di microparticelle per proteggere dalla contraffazione del marchio.
marchi		genere		paesi
Invisibile     marchio®		Registrato		stati Uniti comunità Europea Australia
StealthFire		Non registrato		stati Uniti comunità Europea
ActiveDuty ™		Non registrato		stati Uniti

Commercio
Segreti

Invisibile
Contrassegnare le tecnologie e le capacità proprietarie mantenute come segreti commerciali includono, ma non sono limitati a:

	●	Micro-particelle                                          Produzione
	●	Micro-particelle                                          Sistemi di colore
	●	Tecnologia                                          avanzamenti che forniscono miglioramenti nelle prestazioni del lettore automatico
	●	Software                                          soluzioni a supporto delle soluzioni di sicurezza delle microparticelle
	●	algoritmi,                                          intelligenza artificiale e tecnologie legate alla Data Intelligence

Noi
valuterà la necessità di ulteriori domande di brevetto, marchio commerciale o copyright, franchising, contratti di concessione concessioni
o contratti di lavoro su base continuativa.

Un
l'investimento nei nostri titoli comporta un livello di rischio eccezionalmente elevato ed è di natura estremamente speculativa. I rischi descritti
di seguito sono quelli che riteniamo più importanti da prendere in considerazione. Questi rischi non sono gli unici che dobbiamo affrontare. Se eventi
previsto da uno dei seguenti rischi effettivamente presenti, la nostra attività, i risultati operativi o le condizioni finanziarie potrebbero risentirne
e il prezzo delle nostre azioni ordinarie potrebbe diminuire.

NOI
ABBIAMO RICEVUTO UN PARERE DI INTERESSE IN CORSO DA PARTE DEI NOSTRI REVISORI E SIAMO ATTUALMENTE ATTENTATI IN PERDITA, CHE AUMENTA UN DUBBIO SOSTANZIALE
SULLA NOSTRA CAPACITÀ DI CONTINUARE COME INTERESSANTE.

Noi
hanno ricevuto un parere “Preoccupante” dai nostri revisori. Come indicato nel documento finanziario consolidato di accompagnamento
dichiarazioni, la Società aveva un deficit accumulato al 30 settembre 2019 e una perdita netta e liquidità netta utilizzata nelle attività operative
per l'anno fiscale quindi terminato. Questi fattori sollevano sostanziali dubbi sulla capacità della Società di continuare a seguire
preoccupazione.

Il
La società sta tentando di generare entrate sufficienti; tuttavia, la posizione in contanti della Società potrebbe non essere sufficiente
per supportare le operazioni quotidiane della Società. Mentre la Società crede nella fattibilità della sua strategia per generare sufficiente
entrate e nella sua capacità di raccogliere fondi aggiuntivi, non ci possono essere garanzie in tal senso. La capacità dell'azienda di
continuare poiché una preoccupazione continua dipende dalla capacità della Società di attuare ulteriormente il proprio piano aziendale e generare
entrate sufficienti.

IT
È PIÙ PROBABILE CHE ABBIAMO BISOGNO DI RICERCA DI FINANZIAMENTI AGGIUNTIVI ATTRAVERSO UN'OFFERTA PRIVATA FUTURA SUCCESSIVA DEI NOSTRI TITOLI.

Perché
la Società non ha attualmente accordi di finanziamento e potrebbe non essere in grado di garantire condizioni favorevoli per finanziamenti futuri,
la Società potrebbe dover raccogliere capitali attraverso la vendita delle sue azioni ordinarie. Ne conseguirà la vendita di ulteriori titoli azionari
in diluizione ai nostri azionisti.

SFAVOREVOLE
PUBLICITY OR CLIENT REJECTION OF OUR PRODUCTS OR SERVICES GENERALLY COULD REDUCE OUR SALES.

Noi
will be highly dependent upon client acceptance of the safety, efficacy and quality of our products and services, as well as similar
products or services offered by other companies. Client acceptance of products or services can be significantly influenced by
scientific research or findings, national media attention and other publicity about product use or services. A product or service
may be received favorably, resulting in high sales associated with that product or service that may not be sustainable as client
preferences change. Future scientific research or publicity could be unfavorable to our industry or any of our particular products
and services and may not be consistent with earlier favorable research or publicity. A future research report or publicity that
is perceived by our consumers as less than favorable or that question earlier favorable research or publicity could have a material
adverse effect on our ability to generate revenue. Adverse publicity in the form of published scientific research, statements
by regulatory authorities or otherwise, whether or not accurate, that associates consumption or use of our products or services,
or any other similar products and services, with illness or other adverse effects, or that questions the benefits of our or similar
products or services, or claims that they are ineffective, could have a material adverse effect on our business, reputation, financial
condition or results of operations.

COMPLYING
WITH NEW AND EXISTING GOVERNMENT REGULATION, BOTH IN THE U.S. AND ABROAD, COULD SIGNIFICANTLY INCREASE OUR COSTS AND LIMIT OUR
ABILITY TO MARKET OUR PRODUCTS AND SERVICES.

Il
production, packaging, labeling, advertising, distribution, licensing and/or sale of our products and services may be subject
to regulation by several U.S. federal agencies, including the FDA, the Federal Trade Commission, the Consumer Product Safety Commission,
and the Environmental Protection Agency, as well as various state, local and international laws and agencies of the localities
in which our products and services are offered or are sold. Government regulations may prevent or delay the introduction or require
design modifications of our products. Regulatory authorities may not accept the evidence of safety we present for existing or
new products or services that we wish to market, or they may determine that a particular product or service presents an unacceptable
health risk. If that occurs, we could be required to cease distribution of and/or recall products or terminate marketing of services
that present such risks. Authorities may also determine that certain advertising and promotional claims, statements or activities
are not in compliance with applicable laws and regulations and may determine that a particular statement is unacceptable as a
“health claim.” Failure to comply with any regulatory requirements could prevent us from marketing particular existing
or new products or services, or subject us to administrative, civil or criminal penalties.

WE
OPERATE IN A HIGHLY COMPETITIVE INDUSTRY, AND OUR FAILURE TO COMPETE EFFECTIVELY COULD ADVERSELY AFFECT OUR MARKET SHARE, FINANCIAL
CONDITION AND GROWTH PROSPECTS.

Il
U.S. healthcare solutions industry is a large and highly fragmented industry. The principle elements of competition in the industry
are price, selection and distribution channel offerings. We believe the market is highly sensitive to the introduction of new
products and services, which may rapidly capture a significant share of the market. We will compete for sales with heavily advertised
national brands offered by large and well-funded companies. In addition, as certain products or services gain market acceptance,
we may experience increased competition for those products or services as more participants enter the market. To the extent that
we manufacture or engage third party manufacturers to produce any product, our manufacturing capabilities may not be adequate
or sufficient to compete with large scale, direct or third-party manufacturers. Certain of our potential competitors are much
larger than us and have longer operating histories, larger customer bases, greater brand recognition and greater resources for
marketing, advertising and promotion of their products and services. They may be able to secure inventory from vendors on more
favorable terms, operate with a lower cost structure or adopt more aggressive pricing policies. In addition, our potential competitors
may be more effective and efficient in introducing new products or services. We may not be able to compete effectively, and our
attempt to do so may require us to increase marketing and/or reduce our prices, which may result in lower margins. Failure to
effectively compete could adversely affect our market share, financial condition and growth prospects.

OUR
DECISIONS TO ACQUIRE PSI AND SCI WERE BASED UPON ASSUMPTIONS WHICH MAY PROVE TO BE ERRONEOUS.

Our
decisions to acquire PSI and SCI were based upon assumptions regarding their respective existing and prospective operations, products
and services, the potential market for their respective products and services, and our ability to integrate their respective operations
in a manner that would enable us to launch the marketing and sale of their respective products and services. Our decisions were
based upon information available to management, and assumptions made by management, at the time of each respective acquisition,
regarding the potential viability of such products and services and our ability to integrate operations.

Our
assumptions may prove to be erroneous. Each company is a small development stage company with a limited operating history. Each
is currently operating at a loss, and there is no assurance that its business development plans and strategies will ever be successful,
or that their respective products and services will be favorably perceived and accepted by our assumed potential customer populations.

PSI
PROVIDES AN ALTERNATIVE APPROACH TO SKIN TREATMENT THAT IS NOVEL.

Psoriasis,
eczema, and vitiligo, are common skin conditions that can be challenging to treat, and often cause clients significant psychosocial
stress. Clients may elect a variety of treatments to address these skin conditions, including routine consumption of systemic
and biologic drug therapies which are highly toxic, reduce systemic immune system function, and come with a host of chemotherapy-like
side effects. Ultraviolet (UV) phototherapy has been clinically validated as an alternate treatment modality for these disorders.

“Non-targeted”
UV phototherapy may be administered by lamps that emit either UVA or UVB light to both diseased and healthy skin, with sun blocks
and other UV barriers used to protect healthy skin. Non-targeted UV must be low dosage to avoid excessive exposure of healthy
tissue. “Targeted” UV phototherapy may be administered at much higher dosages of light only to affected tissue, resulting
in “clearance” in the case of psoriasis and eczema, and “repigmentation” in the case of vitiligo, at much
faster rates than non-targeted, low dosage UV treatments.

Targeted
UV treatments are typically administered to smaller total body surface areas, and are therefore used to treat the most intense
parts of a client’s disease. Non-targeted UV treatment is typically used as a follow-up and for maintenance, capable of
treating large surfaces of the body. Excimer laser devices (UVB at 308nm) are expensive and consume dangerous chemicals (Xenon
and Chlorine). Mercury lamp devices (UVB and/or UVA) require expensive lamp replacements regularly and require special disposal
(due to mercury content). Additionally, mercury lamp devices typically deliver wavelengths of light below 300nm. While within
the UVB spectrum, it has been shown that wavelengths below 300nm produce significantly more “sunburn” type side effects
than do wavelengths between 300 and 320nm without improvement in therapeutic benefit.

Psoria-Light
treatment provides a targeted UV phototherapy that produces UVB light between 300 and 320 nm and UVA light between 350 and 395nm.
It does not require consumption of dangerous chemicals or special environmental disposal, and is cost effective for clinicians.
We believe these factors will increase client access to this type of treatment. We also believe that Psoria-Light treatment offers
several unique and advanced features that will distinguish it from the non-targeted and targeted UV phototherapy devices that
are currently being used by dermatologists and other healthcare providers. These features include the following: the utilization
of deep narrow-band UVB (“NB-UVB”) LEDs as light sources; the ability to produce both UVA or NB-UVB therapeutic wavelengths;
an integrated high resolution digital camera and patient record integration capabilities; the ability to export to an external
USB memory device a PDF file of patient treatment information including a patent pending graph that includes digital images plotted
against user tracked metrics which can be submitted to improve medical reimbursements; an accessory port and ability to update
software; ease of placement and portability; advanced treatment site detection safety sensor; international language support;
a warranty which includes the UV lamp(s); and a non-changeable treatment log (that does not include HIPPA information).

PSI’s
success depends upon the acceptance by healthcare providers and clients of Psoria-Light treatment as a preferred method of treatment
for psoriasis and other UV-treatable skin conditions. While Psoria-Light treatment appears to have been beneficial to clients,
without demonstrable harmful side effects or safety issues, there can be no assurance that we will be able to achieve and maintain
such market acceptance by healthcare providers or clients.

WE
RELY UPON PSI AND SCI PERSONNEL TO OPERATE THEIR RESPECTIVE BUSINESSES AND THE LOSS OF KEY PERSONNEL COULD HAVE A MATERIALLY ADVERSE
AFFECT ON OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS.

Noi
rely upon the current executive management of PSI and SCI to operate their respective business operations. Employment agreements
with any key management personnel will not guarantee that any such personnel will remain affiliated with us.

Se
any of our key personnel were to cease their affiliation with us, our operating results could suffer. Further, we do not maintain
key person life insurance on any executive officer. If we lose or are unable to obtain the services of key personnel, our business,
financial condition or results of operations could be materially and adversely affected.

PSI
AND SCI HAVE LIMITED EXPERIENCE IN MARKETING THEIR RESPECTIVE PRODUCTS AND SERVICES.

PSI
and SCI each has undertaken initial, limited marketing efforts for their respective products and services. Their sales and marketing
personnel will compete against the experienced and well-funded sales organizations of competitors. Their revenues and ability
to achieve profitability will depend largely on the effectiveness of their respective sales and marketing personnel. Each will
face significant challenges and risks related to marketing its services, including, but not limited to, the following:

	●	il     ability to obtain access to or persuade adequate numbers of healthcare providers or clients to purchase and use their respective     products and services;
	●	il     ability to recruit, properly motivate, retain, and train adequate numbers of qualified sales and marketing personnel;
	●	il     costs associated with hiring, training, maintaining, and expanding an effective sales and marketing team; e
	●	assuring     compliance with applicable government regulatory requirements.

In
addition, PSI plans to establish a network of distributors in selected foreign markets to market, sell and distribute the Psoria-Light
device. If PSI fails to select or use appropriate foreign distributors, or if the sales and marketing strategies of such distributors
prove ineffective in generating sales of the device, our revenues would be adversely affected and we might never become profitable.

COMMERCIALIZATION
OF PRODUCTS AND SERVICES WILL REQUIRE US TO BUILD AND MAINTAIN SOPHISTICATED SALES AND MARKETING TEAMS.

Nessuna
of our subsidiaries has any prior experience with commercializing their respective products and services. To successfully commercialize
their products and services we will need to establish and maintain sophisticated sales and marketing teams. Experienced sales
representatives may be difficult to locate and retain, and all new sales representatives will need to undergo extensive training.
There is no assurance that we will be able to recruit and retain sufficiently skilled sales representatives, or that any new sales
representatives will ultimately become productive. If we are unable to recruit and retain qualified and productive sales personnel,
our ability to commercialize our products and services, and to generate revenues, will be impaired, and our business will be harmed.

WE
FACE SIGNIFICANT COMPETITION FROM COMPANIES WITH GREATER RESOURCES AND WELL-ESTABLISHED SALES CHANNELS, WHICH MAY MAKE IT DIFFICULT
FOR US TO ACHIEVE MARKET PENETRATION.

Il
markets for our subsidiaries’ respective products and services are highly competitive and are significantly affected by
new treatment and product introductions. Direct competitors may enjoy competitive advantages, including:

	●	established     service and product lines with proven results;
	●	brand     awareness;
	●	name     recognition;
	●	established     product acceptance by healthcare providers and clients;
	●	established     relationships with healthcare providers and clients;
	●	integrated     distribution networks; e
	●	greater     financial resources for product development, sales and marketing, and patent litigation.

Molti
competitors may have significantly greater funds to spend on the research, development, promotion and sale of new and existing
services and products. These resources can enable them to respond more quickly to new or emerging technologies and changes in
the market.

WE
MAY BECOME INVOLVED IN FUTURE LITIGATION OR CLAIMS THAT MAY NEGATIVELY AFFECT OUR RESULTS OF OPERATIONS.

Healthcare
providers and clients that use our subsidiaries’ products or services may bring product liability or other claims against
us. To limit such exposure, each subsidiary plans to develop a comprehensive training and education program for persons using
their respective products and services. There can be no assurance that such training and education programs will help avoid complications
resulting from any provision of products or services. In addition, although they may provide such training and education, they
may not be able to ensure proper provision of products or services in each instance and may be unsuccessful at avoiding significant
liability exposure as a result. While we may currently maintain and plan to continue to maintain liability insurance in amounts
we consider sufficient, such insurance may prove insufficient to provide coverage against any or all asserted claims. Inoltre,
experience ratings and general market conditions may change at any time so as to render us unable to obtain or maintain insurance
on acceptable terms, or at all. In addition, regardless of merit or eventual outcome, product liability and other claims may result
in:

	●	il     diversion of management’s time and attention from our business and operations;
	●	il     expenditure of large amounts of cash on legal fees, expenses and payment of settlements or damages;
	●	decreased     demand for our products and services; e
	●	negative     publicity and injury to our reputation.

Each
and every one of the foregoing consequences of claims and litigation could have a material adverse effect on us, our subsidiaries,
and our business operations and financial condition.

HEALTHCARE
PROVIDERS MAY BE UNABLE TO OBTAIN COVERAGE OR REIMBURSEMENT FROM THIRD-PARTY PAYORS FOR PSORIA-LIGHT TREATMENTS, WHICH COULD LIMIT
OUR ABILITY TO MARKET PSI PRODUCTS AND SERVICES.

Noi
expect that healthcare providers will bill various third-party payers, such as Medicare, Medicaid, other governmental programs,
and private insurers, for Psoria-Light treatments. We believe that the cost of Psoria-Light treatments is generally already reimbursable
under governmental programs and most private plans. Accordingly, we believe that healthcare providers will generally not require
new billing authorizations or codes in order to be compensated for performing medically necessary procedures using Psoria-Light
treatments. There can be no assurance, however, that coverage, coding and reimbursement policies of third-party payers will not
change in the future. PSI’s success in selected foreign markets will also depend upon the eligibility of the Psoria-Light
device for coverage and reimbursement by government-sponsored healthcare payment systems and third-party payers. In both the United
States and foreign markets, healthcare cost-containment efforts are prevalent and are expected to continue. Prospective clients’
failure to obtain sufficient reimbursement could limit our ability to market PSI products and services and decrease our ability
to generate revenue.

WE
PLAN TO RELY ON THIRD PARTY DISTRIBUTORS FOR PSI SALES, MARKETING AND DISTRIBUTION ACTIVITIES IN FOREIGN COUNTRIES.

Although
we plan to market and sell our products and services directly through sales representatives in the domestic market, we plan to
rely on third party distributors to sell, market, and distribute the Psoria-Light device in selected international markets. Because
we intend to rely on third party distributors for sales, marketing and distribution activities in international markets, we will
be subject to a number of risks associated with our dependence on these third party distributors, including:

	●	lack     of day-to-day control over the activities of third-party distributors;
	●	third-party     distributors may not fulfill their obligations to us or otherwise meet our expectations;
	●	third-party     distributors may terminate their arrangements with us on limited or no notice or may change the terms of these arrangements     in a manner unfavorable to us for reasons outside of our control; e
	●	disagreements     with our distributors could require or result in costly and time-consuming litigation or arbitration.

Se
we fail to establish and maintain satisfactory relationships with third-party distributors, we may be unable to sell, market and
distribute the Psoria-Light device in international markets, our revenues and market share may not grow as anticipated, and we
could be subject to unexpected costs which would harm our results of operations and financial condition.

TO
THE EXTENT WE ENGAGE IN MARKETING AND SALES ACTIVITIES OUTSIDE THE UNITED STATES, WE WILL BE EXPOSED TO RISKS ASSOCIATED WITH
EXCHANGE RATE FLUCTUATIONS, TRADE RESTRICTIONS AND POLITICAL, ECONOMIC AND SOCIAL INSTABILITY.

Se
we follow through with our plans to sell the Psoria-Light device in foreign markets, we will be subject to various risks associated
with conducting business abroad. A foreign government may require us to obtain export licenses or may impose trade barriers or
tariffs that could limit our ability to build our international presence. Our operations in some markets also may be adversely
affected by political, economic and social instability in foreign countries. We may also face difficulties in managing foreign
operations, longer payment cycles, problems with collecting accounts receivable, and limits on our ability to enforce our intellectual
property rights. In addition, for financial reporting purposes, our foreign sales will be translated from local currency into
U.S. dollars based on exchange rates and, if we do not hedge our foreign currency transactions, we will be subject to the risk
of changes in exchange rates. If we are unable to adequately address the risks of doing business abroad, our business may be harmed.

THE
PSORIA-LIGHT AND ANY FUTURE MEDICAL DEVICE PRODUCTS ARE SUBJECT TO A LENGTHY AND UNCERTAIN DOMESTIC REGULATORY PROCESS.

PSI’s
Psoria-Light device and future medical device products, if any, are subject to extensive regulation in the United States by the
FDA. The FDA regulates the research, testing, manufacturing, safety, labeling, storage, record keeping, promotion, distribution
and production of medical devices in the United States to ensure that medical products distributed domestically are safe and effective
for their intended uses. In order for us to market the Psoria-Light for use in the United States, we were required to first obtain
clearance from the FDA pursuant to Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the “FFDCA”).

Clearance
under Section 510(k) requires demonstration that a new device is substantially equivalent to another device with 510(k) clearance
or grandfather status. If the FDA agrees that a device is substantially equivalent to a predicate device, it will grant clearance
to commercially market the device. The FDA has a statutory 90-day period to respond to a 510(k) submission. As a practical matter,
clearance often takes longer. The FDA may require further information, including clinical data, to make a determination regarding
substantial equivalence. If the FDA determines that a device, or its intended use, is not “substantially equivalent,”
the FDA will place the device, or the particular use of the device, into Class III, and the device sponsor must then fulfill much
more rigorous pre-marketing requirements.

Se
the FDA does not act favorably or quickly in its review of a 501(k) submission, the submitting party may encounter significant
difficulties and costs in its efforts to obtain FDA clearance or approval, all of which could delay or preclude the sale of a
device. The FDA may request additional data or require the submitting party to conduct further testing or compile more data, including
clinical data and clinical studies, in support of a 510(k) submission. Instead of accepting a 510(k) submission, the FDA may require
the submitting party to submit a pre-market approval application (“PMA”), which is typically a much more complex and
burdensome application than a 510(k). To support a PMA, the FDA may require that the submitting party conduct one or more clinical
studies to demonstrate that the device is safe and effective. In addition, the FDA may place significant limitations upon the
intended use of a device as a condition to a 510(k) clearance or PMA approval. Product applications can also be denied or withdrawn
due to failure to comply with regulatory requirements or the occurrence of unforeseen problems following clearance or approval.
Any delays or failure to obtain FDA clearance or approvals of any future medical device products we develop, any limitations imposed
by the FDA on product use, or the costs of obtaining FDA clearance or approvals could have a material adverse effect on our business,
financial condition and results of operations.

PSI
submitted its 510(k) for the Psoria-Light to the FDA and on December 3, 2010 was assigned application number K103540. The 510(k)
application for Psoria-Light was a traditional application and asserted that the Psoria-Light is “substantially equivalent”
in intended use and technology to two predicate devices, the X-Trac Excimer Laser and the Dualight, which are competing targeted
UV phototherapy devices. PSI began regulatory testing of the Psoria-Light in December 2010 for EMC and electrical safety (required
for FDA and CE mark sales), and completed that testing in the second quarter of 2011. PSI received FDA clearance of the Psoria-Light
on February11, 2011 (no. K103540). If and as the Psoria-Light is significantly modified subsequent to its FDA clearance, the FDA
may require submission of a separate 510(k) or PMA for the modified product before it may be marketed in the United States.

Se
we develop any future medical device products we will be required to seek and obtain FDA approval prior to any marketing or sales
in the United States and in accordance with the 510(k) or PMA process.

THE
PSORIA-LIGHT WILL BE SUBJECT TO VARIOUS INTERNATIONAL REGULATORY PROCESSES AND APPROVAL REQUIREMENTS. IF WE DO NOT OBTAIN AND
MAINTAIN THE NECESSARY INTERNATIONAL REGULATORY APPROVALS, WE WILL NOT BE ABLE TO MARKET AND SELL OUR PRODUCTS IN FOREIGN COUNTRIES.

Per
be able to market and sell PSI’s Psoria-Light device in other countries, we must obtain regulatory approvals and comply
with the regulations of those countries. These regulations, including the requirements for approvals and the time required for
regulatory review, vary from country to country. Obtaining and maintaining foreign regulatory approvals are expensive, and we
cannot be certain that we will receive regulatory approvals in any foreign country in which we plan to market our product. Se
we fail to obtain or maintain regulatory approval in any foreign country in which we plan to market our product, our ability to
generate revenue will be harmed.

Il
European Union requires that manufacturers of medical products obtain the right to affix the CE mark to their products before
selling them in member countries of the European Union. The CE mark is an international symbol of adherence to quality assurance
standards and compliance with applicable European medical device directives. In order to obtain the right to affix the CE mark
to products, a manufacturer must obtain certification that its processes meet certain European quality standards.

PSI
began regulatory testing of the Psoria-Light in December 2010 for EMC and electrical safety (required for FDA and CE mark sales),
and completed that testing in the second quarter of 2011. PSI was granted permission to affix the CE mark to the Psoria-Light
in the fourth quarter of 2011. If and as we modify the Psoria-Light product or develop other new products in the future, we would
expect to apply for permission to affix the CE mark to such products. In addition, we would be subject to annual regulatory audits
in order to maintain any CE mark permissions we may obtain. We do not know whether PSI will be able to obtain permission to affix
the CE mark to its initial, future or modified products or that it will continue to meet the quality and safety standards required
to maintain any permission it may receive. If we are unable to obtain permission to affix the CE mark to any of our products,
we will not be permitted to sell our products in member countries of the European Union, which will have a material adverse effect
on our business, financial condition and results of operations. In addition, if after receiving permission to affix the CE mark
to any products, we are unable to maintain such permission, we will no longer be able to sell such products in member countries
of the European Union.

OUR
ABILITY TO ACHIEVE COMMERCIAL SUCCESS WILL DEPEND IN PART ON OBTAINING AND MAINTAINING PATENT PROTECTION (IF ANY) AND TRADE SECRET
PROTECTION RELATING TO OUR PRODUCTS, THE TECHNOLOGY ASSOCIATED WITH OUR PRODUCTS, AND ANY OTHER PRODUCTS AND TECHNOLOGY WE MAY
DEVELOP, AS WELL AS SUCCESSFULLY DEFENDING OUR PATENT(S) (IF ANY) AND LICENSED PATENTS (IF ISSUED) AGAINST THIRD PARTY CHALLENGES.
IF WE ARE UNABLE TO OBTAIN AND MAINTAIN PROTECTION FOR OUR INTELLECTUAL PROPERTY AND PROPRIETARY TECHNOLOGY, THE VALUE OF OUR
PRODUCTS WILL BE ADVERSELY AFFECTED, AND WE WILL NOT BE ABLE TO PROTECT SUCH TECHNOLOGY FROM UNAUTHORIZED USE BY THIRD PARTIES.

Our
commercial success will depend largely on our ability to obtain and maintain patent protection and intellectual property protection
covering certain aspects of the technology that we intend to utilize in the development and commercialization of PSI’s initial
medical device product, the Psoria-Light, and existing and future SCI products, to obtain and maintain patent and intellectual
property protection for any other products that we may develop and seek to market. In order to protect our competitive position
for the Psoria-Light, SCI products, and any other products that we may develop and seek to market, we, or our executive officers,
as the case may be, will have to:

	●	prevent     others from successfully challenging the validity or enforceability of our issued, pending, or licensed patents (if any);
	●	prevent     others from infringing upon, our issued, pending, or licensed patents (if any) and our other proprietary rights;
	●	operate     our business, including the production, sale and use of the Psoria-Light, SCI encryption products, and any other products,     without infringing upon the proprietary rights of others;
	●	successfully     enforce our rights to issued, pending, or licensed patents (if any) against third parties when necessary and appropriate;     e
	●	obtain     and protect commercially valuable patents or the rights to patents both domestically and abroad.

PSI
was issued one patent on its Psoria-Light technology on July 9th 2013, US 8,481,982, covering a unique patient safety feature.
No other patents have been issued for PSI products or methods, or any of the other technology associated with such products, and
we cannot guarantee that any other patents will be issued for such products or any of the technology associated with such products.

Stealth
Mark devoted substantial effort and resources to develop and advance micro-particle security technologies in support of its business
activities. Protection of the acquired Stealth Mark intellectual property is maintained through, among other things, six patents
issued between November 18, 2003 and July 17, 2012 as US 6,647,649; 7,720,254; 7,831,042; 7,885,428; 8,033,450 and 8,223,964,
and two pending European Applications.

Protection
of intellectual property in the markets in which we compete is highly uncertain and involves complex legal and scientific questions.
It may be difficult to obtain patents relating to our products or technology. Furthermore, any changes in, or unexpected interpretations
of, the patent laws may adversely affect our ability to enforce our patent position.

WE
EXPECT TO RELY ON TRADEMARKS, TRADE SECRET PROTECTIONS, KNOW-HOW AND CONTRACTUAL SAFEGUARDS TO PROTECT OUR NON-PATENTED INTELLECTUAL
PROPERTY AND PROPRIETARY TECHNOLOGY.

Noi
expect to rely on trademarks, trade secret protections, know-how and contractual safeguards to protect our non-patented intellectual
property and proprietary technology. Current employees, consultants and advisors have entered into, and future employees, consultants
and advisors will be required to enter into, confidentiality agreements that prohibit the disclosure or use of confidential information.
We also intend to enter into confidentiality agreements to protect our confidential information delivered to third parties for
research and other purposes. There can be no assurance that we will be able to effectively enforce these agreements or that the
subject confidential information will not be disclosed, that others will not independently develop substantially equivalent confidential
information and techniques or otherwise gain access to our confidential information or that we can meaningfully protect our confidential
information.

Costly
and time-consuming litigation could be necessary to enforce and determine the scope and protect ability of confidential information,
and failure to maintain the confidentiality of confidential information could adversely affect our business by causing us to lose
any competitive advantage maintained through such confidential information.

Il
protection of proprietary technology through claims of trade secret status has been the subject of increasing claims and litigation
by various companies, both to protect proprietary rights and for competitive reasons, even where proprietary claims are unsubstantiated.
The prosecution of proprietary claims or the defense of such claims is costly and uncertain given the uncertainty and rapid development
of the principles of law pertaining to this area.

Disputes
may arise in the future with respect to the ownership of rights to any technology developed with consultants, advisors or collaborators.
These and other possible disagreements could lead to delays in the collaborative research, development or commercialization of
our products, or could require or result in costly and time-consuming litigation that may not be decided in our favor. Any such
event could have a material adverse effect on our business, financial condition and results of operations by delaying or preventing
our commercialization of innovations or by diverting our resources away from revenue-generating projects.

OUR
ABILITY TO MARKET PRODUCTS IN FOREIGN COUNTRIES MAY BE IMPAIRED BY THE ACTIVITIES AND INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

Noi
may elect to market and sell products in select international markets. Except for certain pending Stealth Mark European Applications,
neither the Company nor any of our officers or directors has filed (nor does the Company or any of our officers or directors currently
have an intention to file) for any international patent protection for any of our products or any of the technology associated
with our products. However, to successfully enter into these international markets and achieve desired revenues internationally,
we may need to enforce our patent and trademark rights (if any) against third parties that we believe may be infringing on our
rights. The laws of some foreign countries do not protect intellectual property, including patents, to as great an extent as do
the laws of the United States. Policing unauthorized use of our intellectual property is difficult, and there is a risk that despite
the expenditure of significant financial resources and the diversion of management attention, any measures that we take to protect
our intellectual property may prove inadequate in these countries. Our competitors in these countries may independently develop
similar technology or duplicate our products, thus likely reducing our potential sales in these countries. Furthermore, our future
patent rights (if any) may be limited in enforceability to the United States or certain other select countries, which may limit
our intellectual property rights abroad.

NO
MARKET CURRENTLY EXISTS FOR OUR SECURITIES AND WE CANNOT ASSURE YOU THAT SUCH A MARKET WILL EVER DEVELOP, OR IF DEVELOPED, WILL
BE SUSTAINED.

Our
common stock is not currently eligible for trading on any stock exchange and there can be no assurance that our common stock will
be listed on any stock exchange in the future. We presently are listed on the NASD OTCQB Bulletin Board trading system pursuant
to Rule 15c2-11 of the Securities Exchange Act of 1934, but there can be no assurance we will maintain such a listing. The bulletin
board tends to be highly illiquid, in part because there is no national quotation system by which potential investors can track
the market price of shares except through information received or generated by a limited number of broker-dealers that make a
market in particular stocks. There is a greater chance of market volatility for securities that trade on the bulletin board as
opposed to a national exchange or quotation system. This volatility may be caused by a variety of factors, including: the lack
of readily available price quotations; the absence of consistent administrative supervision of “bid” and “ask”
quotations; lower trading volume; and general market conditions. If no market for our shares materializes, you may not be able
to sell your shares or may have to sell your shares at a significantly reduced price.

IF
OUR SHARES OF COMMON STOCK ARE ACTIVELY TRADED ON A PUBLIC MARKET, THEY WILL IN ALL LIKELIHOOD BE PENNY STOCKS.

Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by
the SEC. Penny stocks generally are equity securities with a price per share of less than $5.00 (other than securities registered
on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information
with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the
customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special
written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written
agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the
secondary market for a stock that becomes subject to the penny stock rules.

WE
WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE, AND WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE,
MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.

Noi
have a very limited number of market makers and are quoted on the OTC Electronic Bulletin Board. To be eligible for quotation,
issuers must remain current in their filings with the SEC. In order for us to remain in compliance we will require future revenues
to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable
to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if
at all.

FAILURE
TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND STOCK PRICE.

Section
404 of the Sarbanes-Oxley Act of 2002 (“the Sarbanes-Oxley Act”) requires that we establish and maintain an adequate
internal control structure and procedures for financial reporting and include a report of management on our internal control over
financial reporting in our annual report on Form 10-K. That report must contain an assessment by management of the effectiveness
of our internal control over financial reporting and must include disclosure of any material weaknesses in internal control over
financial reporting that we have identified. During the period covered by this Report, the Company had three or fewer directors,
with only one that was independent; accordingly, during such period, we could not establish board committees with independent
members to oversee certain functions such as compensation or audit issues for internal control and reporting purposes. Until a
majority of our board is comprised of independent members, if ever, there will be limited oversight of our management’s
decisions and activities and little ability of shareholders to challenge or reverse those activities and decisions, even if they
are not in the best interests of our shareholders.

THE
MARKET PRICE FOR OUR COMMON SHARES IS PARTICULARLY VOLATILE GIVEN OUR STATUS AS A RELATIVELY UNKNOWN COMPANY WITH A SMALL AND
THINLY TRADED PUBLIC FLOAT, LIMITED OPERATING HISTORY AND LACK OF PROFITS WHICH COULD LEAD TO WIDE FLUCTUATIONS IN OUR SHARE PRICE.
YOU MAY BE UNABLE TO SELL YOUR COMMON SHARES AT OR ABOVE YOUR PURCHASE PRICE, WHICH MAY RESULT IN SUBSTANTIAL LOSSES TO YOU.

Il
market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect
that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our
share price is attributable to a number of factors. First, as noted above, our common shares are sporadically and thinly traded.
As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately
influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in
the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned
issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky”
investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our
potential products and services. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing
all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the
market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors
are beyond our control and may decrease the market price of our common shares, regardless of our operating performance. We cannot
make any predictions or projections as to what the prevailing market price for our common shares will be at any time, including
as to whether our common shares will sustain their current market prices, or as to what effect that the sale of shares or the
availability of common shares for sale at any time will have on the prevailing market price.

WE
DO NOT PAY DIVIDENDS ON OUR COMMON STOCK.

Noi
have not paid any dividends on our common stock and do not anticipate paying dividends in the foreseeable future. We plan to retain
earnings, if any, to finance the development and expansion of our business.

The Company leased its corporate office
facility in Hoffman Estates, Illinois pursuant to a non-cancellable lease initiated in July 2016 and expiring February 28, 2024.
The lease terms require a monthly payment of approximately $11,000. The Company vacated the facility in April 2019, in favor of
its present facilities in Tucson AZ, which are provided by a shareholder on a rent-free basis. The Company expects that the property
will be subleased or a settlement with the landlord will be reached at an amount significantly less than the remaining payment
obligations. During the year ended September 30, 2019, the Company recorded an accrual for the estimated potential settlement
and wrote-off its $15,000 security deposit relating to the lease.

Through
January 2019, PSI’s offices were located at 6408 West Linebaugh Avenue, Suite 103, Tampa, Florida, 33625. PSI’s telephone
number is (866) 725-0969. In February 2019, PSI entered into a non-cancellable lease agreement to lease its office facilities
located at 409 Mandeville Street, Utica, New York, 13502. The term of the lease is for two years and expires February 8, 2021,
with monthly base rent of $1,800.

Through
December 31, 2019, SCI offices were located at 273 Midway Lane, Oak Ridge, Tennessee 37830. On January 6, 2020, the Company entered
into an agreement with the owners to terminate the agreement effective January 1, 2020. Under the agreement, the Company agreed
to pay $11,000 and abandon certain Company property to the owners as documented in the agreement.

ITEM     3.

LEGAL     PROCEEDINGS

Il
Company is periodically engaged in legal proceedings arising from and relating to its business operations. We currently are not
involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened
against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect on our financial
condition or results of operations. However, we recently decided to attempt to preserve revenue and reduce operating expenses
through actions including, but not limited to, facilities consolidation and staff reductions, which we hope to implement through
negotiated transactions with lessors, employees and other third parties. Such actions may result in disputes with and claims by
such parties which, if not resolved through negotiations, may impact negatively the Company’s ability to continue as a going
concern. To date, we have negotiated settlement of all but $89,301.87 in ex-employee wage and benefits claims, with agreement
to pay such remaining amount, together with interest at the rate of 4% per annum on the principal amount from time to time outstanding,
when and as cash flow permits. One of the employees claims additional amounts due for certain statutory damages under the Illinois
Wage Payment and Collection which currently could exceed $21,600.00 and would increase at the rate of 2% of the wages due per
month plus attorneys’ fees if the employee elects to file suit for a violation of the Act and is successful in obtaining
a judgment on his claim.

In
periodic reports the Company disclosed that on May 25, 2017, the SEC’s Chicago Regional Office informed it that it had made
a preliminary determination to recommend filing of an enforcement action against the Company and its CEO based on possible violations
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act, and Section 15(a) of
the Exchange Act. Subsequent discussions resulted in the submission of an Offer of Settlement (“Settlement”) through
an administrative cease and desist action on November 17, 2017, which was accepted by the SEC on April 12, 2018, as disclosed
on Form 8K filed April 18, 2018. Pursuant to the Settlement, the Company neither admitted nor denied any of the allegations, but
was enjoined from violating the above-referenced Sections and Rule. The Settlement imposed no financial penalties or sanctions
against the Company.

Il
Form 8K also disclosed that on April 13, 2018, the SEC filed a separate complaint against the CEO in the U.S. District Court for
the Northern District of Illinois, asserting the allegations noted above, as well as allegations that he manipulated the price
of company shares through undisclosed trading, realizing more than $130,000 from such trading. On the date of filing, the CEO
voluntarily resigned as an officer and director of the Company. Without admitting or denying the allegations, the CEO consented
to the entry of the judgment, which was entered on September 26, 2018 by the U.S. District Court for the Northern District of
Illinois. The judgment permanently enjoined him from violating the anti-fraud provisions of Section 17(a) of the Securities Act
of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the broker registration provisions
of Section 15(a) of the Exchange Act. It also bars him from serving as an officer or director of a public company and from participating
in penny stock offerings, and ordered disgorgement and interest and penalties to be determined by the court.

On
January 31, 2019, the former CEO was terminated and his service as Director of Business Development ceased as of that date.

ITEM     4.

MINE     SAFETY DISCLOSURES.

Not
applicable.

PART
II

ITEM     5.

MARKET     FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

No
Public Market for Our Common Stock

Il
market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results,
general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations,
as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless
of our actual or projected performance.

Common
Stock

During
the year ended September 30, 2016, the Company was authorized by its Articles of Incorporation to issue up to 75,000,000 shares
of common stock, par value $0.001 per share. Holders of shares of common stock have full voting rights, one vote for each share
held of record. Shareholders are entitled to receive dividends as may be declared by the Board out of funds legally available
therefore and share pro rata in any distributions to shareholders upon liquidation. Shareholders have no conversion, pre-emptive
or subscription rights. All outstanding shares of common stock are fully paid and non-assessable. During the year ended September
30, 2017, the Company amended its Articles of Incorporation to authorize it to issue up to 185,000,000 shares of common stock,
par value $0.001 per share, through a filing of a Certificate of Amendment on January 12, 2017. As of September 30, 2018, there
were 100,952,569 shares of common stock issued and outstanding.

On
September 3, 2019, the Company’s Board of Directors unanimously approved the amendment of its Articles of Incorporation
to increase the total authorized capital stock from 185,000,000 common shares to 200,000,000 common shares. As of September 18,
2019, holders of a majority of the outstanding shares of voting capital stock executed written stockholder consents approving
this action. As of September 30, 2019, there were 107,497,077 shares of common stock issued and outstanding.

Preferred
Stock

Il
Company does not have any Preferred Stock authorized.

Dividends

Noi
have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our
board of directors and depends upon our earnings, if any, our capital requirements and financial position, and other pertinent
conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings,
if any, in our business operations.

Options

2010
Non-Qualified Stock Option Plan (“2010 Option Plan”)

On
December 22, 2010, effective retroactively as of June 30, 2010, the Company’s Board of Directors approved the adoption of
the “2010 Non-Qualified Stock Option Plan” (“2010 Option Plan”) by unanimous consent. The 2010 Option
Plan was initiated to encourage and enable officers, directors, consultants, advisors and key employees of the Company to acquire
and retain a proprietary interest in the Company by ownership of its common stock. A total of 7,500,000 of the authorized shares
of the Company’s common stock may be subject to, or issued pursuant to, the terms of the plan. Effective January 1, 2018,
the Board of Directors approved to increase the number of authorized shares of the Company’s common stock that may be subject
to, or issued pursuant to, the terms of the plan from 7,500,000 to 30,000,000.

Come
of September 30, 2019 and 2018, 15,237,738 and 17,946,667 shares, respectively, were outstanding under the 2010 Option Plan.

Transfer
Agent and Registrar

Il
transfer agent and registrar for our common stock is Action Stock Transfer Corp., having an office situated at 2469 E. Fort Union
Blvd, Suite 214, Salt Lake City, UT 84121 and its telephone number is (801) 274-1088.

ITEM     7.

MANAGEMENT’S     DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.

Inoltrare
Looking Statements

Except
for historical information, the following Plan of Operation contains forward-looking statements based upon current expectations
that involve certain risks and uncertainties. Such forward-looking statements include statements regarding, among other things,
(a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing
plans, (e) our anticipated needs for working capital, (f) our lack of operational experience and (g) the benefits related to ownership
of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations,
are generally identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” or “project” or the
negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown
risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different
from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements
may be found under “Management’s Discussion and Analysis or Plan of Operations” and “Description of Business,”
as well as in this Report generally. Actual events or results may differ materially from those discussed in forward-looking statements
as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters
described in this Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking
statements contained in this Report will in fact occur as projected.

Management’s
Discussion and Analysis of Financial Condition and Results of Operations.

Il
following discussion and analysis provides information which management believes is relevant to an assessment and understanding
of our results of operations and financial condition. The discussion should be read along with our financial statements and notes
thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events
and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate,
intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty
on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from our predictions.

Background.

Wellness
Center USA, Inc. (“WCUI” or the “Company”) was incorporated in June 2010 under the laws of the State of
Nevada. We initially engaged in online sports and nutrition supplements marketing and distribution. We subsequently expanded into
additional businesses within the healthcare and medical sectors through acquisitions, including Psoria-Shield Inc. (“PSI”)
and StealthCo Inc. (“SCI”), d/b/a Stealth Mark, Inc.

Il
Company currently operates in two business segments: (i) distribution of targeted Ultra Violet (“UV”) phototherapy
devices for dermatology; and (ii) authentication and encryption products and services. The segments are conducted through our
wholly-owned subsidiaries, PSI and SCI.

risultati
of Operations for the year ended September 30, 2019 compared to the year ended September 30, 2018

Revenue
and Cost of Goods Sold

Revenue
for the years ended September 30, 2019 and 2018 was $33,375 and $213,723, respectively. The decrease of $180,348 in 2019 was primarily
due to the decrease in sales in the Authentication and Encryption segment.

Costo
of sales for the years ended September 30, 2019 and 2018 was $20,025 and $79,960, respectively. Gross profit for the years ended
September 30, 2019 and 2018, was $13,350 and $133,763, respectively. The gross profit decrease of $120,413 in 2019 was primarily
due to the decrease in sales.

Operating
Expenses

Operating
expenses for the years ended September 30, 2019 and 2018 was $1,779,934 and $2,226,362, respectively. The decrease in operating
expenses of $446,428 was due to the decrease in operating expenses at SCI and at the corporate segment, offset by the increase
in operating expenses at the Medical Device segment. The decrease in expenses at the corporate segment primarily related to the
decrease in stock compensation expenses. Stock compensation expenses totaled to $300,925 and $612,503 during the years ended September
30, 2019 and 2018, respectively.

Other
Expenses

Other
expenses during the year ended September 30, 2019 consisted of $72,078 of amortization of debt discount, $182,064 of financing
costs and $25,298 of interest expense, totaling to $279,440.

Other
expenses during the year ended September 30, 2018 consisted of $318,038 of amortization of debt discount, $158,400 relating to
a loss on the modification of the conversion price on a convertible note payable, $5,445 relating to a loss on the modification
of the exercise price on warrants in connection with the convertible note payable, $891,583 of financing costs, and $27,354 of
interest expense. Total other expenses totaled to $1,400,820.

Net
Loss

Our
net loss for the years ended September 30, 2019 and 2018 was $2,046,024 and $3,493,419, respectively. The decrease in the net
loss of $1,447,395 was primarily due to the decrease in operating expenses of $446,428 in 2019, and the decrease in total other
expenses in 2019 of $1,121,380.

Segment
Information

Reportable
segments are components of an enterprise about which separate financial information is available and that is evaluated regularly
by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s
reportable segments are based on products and services, geography, legal structure, management structure, or any other manner
in which management disaggregates a company.

Il
Company operates in the following business segments:

(i)
Medical Devices: which stems from PSI, its wholly-owned subsidiary acquired on August 24, 2012, a developer, manufacturer, marketer
and distributer of targeted Ultra Violet (“UV”) phototherapy devices for the treatment of skin diseases.

(ii)
Authentication and Encryption Products and Services: which stems from StealthCo, its wholly-owned subsidiary formed on March 18,
2014, which has engaged in the business of selling, licensing or otherwise providing certain authentication and encryption products
and services since acquisition of certain assets from SMI on April 4, 2014.

Il
detailed segment information of the Company is as follows:

Operations
by Segment

		For the Year Ended
		September 30, 2019
		Corporate				Medical Devices				Authentication and Encryption				Total
Sales:
Trade		$	–			$	–			$	19,508			$	19,508
Consulting services			–				–				13,867				13,867
Total Sales			–				–				33,375				33,375
Cost of goods sold			–				–				20,025				20,025
Gross profit			–				–				13,350				13,350
Operating expenses			782,961				641,236				355,737				1,779,934
Loss from operations		$	(782,961	)		$	(641,236	)		$	(342,387	)		$	(1,766,584	)

Operations
by Segment

		For the Year Ended
		September 30, 2018
		Corporate				Medical Devices				Authentication and Encryption				Total
Sales:
Trade		$	–			$	45,000			$	95,023			$	140,023
Consulting services			–				–				73,700				73,700
Total Sales			–				45,000				168,723				213,723
Cost of goods sold			–				–				79,960				79,960
Gross profit			–				45,000				88,763				133,763
Operating expenses			1,179,937				224,196				822,229				2,226,362
Loss from operations		$	(1,179,937	)		$	(179,196	)		$	(733,466	)		$	(2,092,599	)

Revenue
for the Medical Devices segment for the year ended September 30, 2018 was $45,000. There was no revenue for the Medical Devices
segment for the year ended September 30, 2019. The decrease of $45,000 was due to the decrease in sales of their Psoria-Light
devices. There were no cost of sales for the years ended September 30, 2019 and 2018, as their inventory had been written-off
in previous years. Gross profit for the year ended September 30, 2018 was 45,000. The decrease in gross profit of $45,000 in 2019
was due to the decreased sales in 2019. Operating expenses for the years ended September 30, 2019 and 2018 was $641,236 and $224,196,
respectively. The increase in operating expenses of $417,040 in 2019 was due primarily to the increase in R&D expenses, consulting
fees and contract labor. The loss from operations for the years ended September 30, 2019 and 2018 was $641,236 and $179,196, respectively.

Revenue
for the Authentication and Encryption segment for the years ended September 30, 2019 and 2018 was $33,375 and $168,723, respectively.
The decrease of $135,348 was due to the decrease in trade sales and consulting services. Cost of goods sold for the years ended
September 30, 2019 and 2018 was $20,025 and $79,960, respectively. Gross profit for the years ended September 30, 2019 and 2018
was $13,350 and $88,763, respectively. The decrease in gross profit of $75,413 was primarily due to the decrease in sales. Operating
expenses for the years ended September 30, 2019 and 2018 was $355,737 and $822,229, respectively. The decrease in operating expenses
of $466,492 was due primarily to the decrease in labor costs, consulting costs and professional fees in 2019. The loss from operations
for the years ended September 30, 2018 and 2017 was $342,387 and $733,466, respectively.

Il
Corporate segment primarily provides executive management services for the Company. Operating expenses for the years ended September
30, 2019 and 2018 was $782,961 and $1,179,937, respectively. The decrease in operating expenses in 2019 of $396,976 was primarily
due to the decrease in stock compensation expenses. The loss from operations for the years ended September 30, 2019 and 2018 was
$782,961 and $1,179,937, respectively.

Liquidity
and Capital Resources

Il
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying
consolidated financial statements, the Company has not yet generated significant revenues and has incurred recurring net losses.
During the year ended September 30, 2019, the Company incurred a net loss of $2,046,024 and used cash in operations of $1,219,313,
and had a shareholders’ deficit of $1,083,994 as of September 30, 2019. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent
upon the Company’s ability to raise additional funds and implement its strategies. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.

A
September 30, 2019, the Company had cash on hand in the amount of $53,147. Management estimates it has sufficient cash to operate
through February 2020. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable
operations in the future and raising additional capital soon to meet its obligations and repay its liabilities arising from normal
business operations when they come due. Since inception, we have funded our operations primarily through equity and debt financings
and we expect to continue to rely on these sources of capital in the future. During the year ended September 30, 2019, the Company
received $1,293,250 through loans payable from officers and shareholders, the sale of its common stock, and from contributions
of capital by a joint venture partner. Subsequent to September 30, 2019, the Company received additional advances from shareholders
of $310,000 (see Note 13).

No
assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory
to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations,
in the case of debt financing or cause substantial dilution for our stock holders, in case of equity financing.

Our
independent registered public accounting firm issued a going concern opinion. This means that they expressed substantial doubt
that we can continue as an on-going business for the next twelve months unless we obtain additional capital.

Comparison
of years ended September 30, 2019 and 2018

Come
of September 30, 2019, we had $53,147 in cash, negative working capital of $1,085,556 and an accumulated deficit of $25,383,138.

Come
of September 30, 2018, we had $4,210 in cash, negative working capital of $844,539 and an accumulated deficit of $22,974,740.

Cash
flows used in operating activities

During
the year ended September 30, 2019, we used cash flows in operating activities from continuing operations of $1,219,313, compared
to $1,037,073 used in the year ended September 30, 2018. During the year ended September 30, 2019, we incurred a net loss of $2,046,024
and had non-cash expenses of $700,153, compared to a net loss of $3,493,419 and non-cash expenses of $2,099,776 during the year
ended September 30, 2018.

Cash
flows used in investing activities

During
the years ended September 30, 2019 and 2018, we had no cash flows from investing activities.

Cash
flows provided by financing activities

During
the year ended September 30, 2019, we had proceeds from loans payable from officers and shareholders of $358,250, from the sale
of common stock and warrants of $10,000 and proceeds of $925,000 from contributions of capital by its joint venture partner. Il
Company used cash to repay loans payable from officers and shareholders of $25,000. During the year ended September 30, 2018,
we had proceeds from loans payable from officers and shareholders of $434,500, from convertible notes payable of $250,000, from
the sale of common stock and warrants of $177,000, and from the exercise of stock warrants of $170,914. We used cash to repay
loans payable from officers and shareholders of $20,500.

Off-Balance
Sheet Arrangements

Noi
have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources.

Employees

Noi
currently employ our executive officers and PSI has several independent contractors.

Sommario
of Significant Accounting Policies.

Il
Company’s significant accounting policies are presented in the Notes to the Consolidated Financial Statements (see Note
2 of the audited consolidated financial statements included herein).

ITEM                                          7A.

QUANTITATIVE                                          AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not
applicable to a smaller reporting company.

ITEM                                          8.

FINANCIAL                                          STATEMENTS AND SUPPLEMENTARY DATA

Our
consolidated financial statements are contained in pages F-1 through F-21 which appear at the end of this annual report.

ITEM                                          9.

CHANGES                                          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM                                          9A.

CONTROLS                                          AND PROCEDURES

Evaluation
of Disclosure Controls and Procedures

Regulations
under the Securities Exchange Act of 1934 (the “Exchange Act”) require public companies to maintain “disclosure
controls and procedures,” which are defined as controls and other procedures that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to
the issuer’s management, including its principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure. A material weakness is a control deficiency
(within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control
deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements
will not be prevented or detected.

Il
Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief
Executive Officer (“CEO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined
under Rule 13a-15(e) under the Exchange Act) as of September 30, 2019, the end of the period covered by this report. Based upon
that evaluation, the Company’s CEO concluded that the Company’s disclosure controls and procedures are not effective
at the reasonable assurance level due to the material weaknesses described below:

1.
The lack of an independent audit committee and the lack of internal personnel necessary to provide accurate and timely
regulatory filings.

2.
The Company does not have written documentation of its internal
control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section
404 of the Sarbanes-Oxley Act which is applicable to the Company. Management evaluated the impact of its failure to have written
documentation of its internal controls and procedures on its assessment of its disclosure controls and procedures and has concluded
that the control deficiency that resulted represented a material weakness.

3.
The Company does not have sufficient segregation of duties within
its accounting functions, which is a basic internal control. Due to its size and nature, segregation of all conflicting duties
may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions,
the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the
impact of its failure to have segregation of duties on its assessment of its disclosure controls and procedures and has concluded
that the control deficiency that resulted represented a material weakness.

4.
The Company does not have sufficient segregation of duties so
that one person can initiate, authorize and execute transactions.

In
light of the material weaknesses, the management of the Company performed additional analysis and other post-closing procedures
to ensure our consolidated financial statements were prepared in accordance with the accounting principles generally accepted
in the United States of America. Accordingly, we believe that our consolidated financial statements included herein fairly present,
in all material respects, our consolidated financial condition, consolidated results of operations and cash flows as of and for
the reporting periods then ended.

Management’s
Report on Internal Control over Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control
over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by,
or under the supervision of, the issuer’s principal executive and principal financial officer and effected by the issuer’s
board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted
in the United States of America and includes those policies and procedures that:

	●	Pertain                                                                                                    to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of                                                                                                    the assets of the issuer;
	●	Only in accordance with authorizations of management and directors of the issuer; and provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made;
	●	Provide                                                                                                    reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the                                                                                                    issuer’s assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control
over financial reporting. However, these inherent limitations are known features of the financial reporting process. Perciò,
it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Come
of the end of our most recent fiscal year, management assessed the effectiveness of our internal control over financial reporting
based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance
on conducting such assessments. Based on that evaluation, they concluded that, as of September 30, 2019, such internal
control over financial reporting was not effective. This was due to deficiencies that existed in the design or operation of our
internal control over financial reporting that adversely affected our internal controls and that may be considered to be material
weaknesses.

Il
matters involving internal control over financial reporting that our management considered to be material weaknesses under the
standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a
majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective
oversight in the establishment and monitoring of required internal controls and procedures; and (2) inadequate segregation of
duties consistent with control objectives of having segregation of the initiation of transactions, the recording of transactions
and the custody of assets. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection
with the review of our financial statements as of September 30, 2019.

Per
address the material weaknesses set forth in items (2) and (3) discussed above, management performed additional analyses and other
procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position,
results of operations and cash flows for the periods presented.

Questo
Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to attestation by the Company’s independent
registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only the management’s
report in this Report.

Management’s
Remediation Initiatives

In
response to the above identified weaknesses in our internal control over financial reporting, we plan to work on documenting in
writing our internal control policies and procedures and implement sufficient segregation of duties within our accounting functions,
so that one person cannot initiate, authorize and execute transactions, and so that one person cannot record transactions in the
accounting records without sufficient review by a separate person. We do not have a specific timeline within which we expect to
conclude these remediation initiatives but do expect it to be an on-going process for the foreseeable future. We continue to evaluate
testing of our internal control policies and procedures, including assessing internal and external resources that may be available
to complete these tasks, but do not know when these tasks will be completed.

Our
CEO and CFO, along with other Board members, are and will be active participants in these remediation processes. We believe the
steps taken to date have improved the effectiveness of our internal control over financial reporting.

Changes
in internal control over financial reporting.

There
have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f)
under the Exchange Act) during the fourth quarter of our fiscal year 2019 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

PART
III

ITEM                                          10.

DIRECTORS,                                          EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors,
Executive Officer and Control Persons

Il
following table sets forth the names and ages of our directors and executive officers during the period covered by this Report.
Also the principal offices and positions with us held by each person and the date such person became a director or executive officer.
Each executive officer was appointed by our Board of Directors. Our directors serve until the earlier occurrence of the election
of his or her successor at the next meeting of shareholders, death, resignation or removal by the Board of Directors. Ci sono
no family relationships among our directors, and executive officers.

Nome		Age		Position		Data
Calvin R. O’Harrow		70		Chief Executive Officer, Chief Operating Officer, Director		May 2018
Douglas W. Samuelson		60		Chief Financial Officer		Feb 2018
Paul D. Jones		75		Director, President		Dec 2017
Thomas E. Scott		62		Director, Secretary		Dec 2017
William E. Kingsford		76		Director		Dec 2017
Roy M. Harsch		73		Director, Chairman		Dec 2017
Andrew Kandalepas (2)		68		Former Chairman, CEO and CFO		June 2010
Ricky Howard (1)		66		Former President and CEO, SCI		April 2014

	(1)	Ricky                                          Howard passed away suddenly in November 2018.
	(2)	Andrew                                          Kandalepas resigned from the Board of Directors and as CEO in April 2018.

Audit
Committee

During
the period covered by this Report, the Board of Directors determined not to establish an audit committee because our limited resources
and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have
a financial expert serving on the Board of Directors who meets the criteria for a financial expert under Item 401(e) of Regulation
S-B due to our limited financial resources.

Certain
Legal Proceedings

Il
Company is periodically engaged in legal proceedings arising from and relating to its business operations. We currently are not
involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened
against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our subsidiaries’
officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect on our financial
condition or results of operations. However, we recently decided to attempt to preserve revenue and reduce operating expenses
through actions including, but not limited to, facilities consolidation and staff reductions, which we hope to implement through
negotiated transactions with lessors, employees and other third parties. Such actions may result in disputes with and claims by
such parties which, if not resolved through negotiations, may impact negatively the Company’s ability to continue as a going
concern. To date, we have negotiated settlement of all but $89,301.87 in ex-employee wage and benefits claims, with agreement
to pay such remaining amount, together with interest at the rate of 4% per annum on the principal amount from time to time outstanding,
when and as cash flow permits. One of the employees claims additional amounts due for certain statutory damages under the Illinois
Wage Payment and Collection which currently could exceed $21,600.00 and would increase at the rate of 2% of the wages due per
month plus attorneys’ fees if the employee elects to file suit for a violation of the Act and is successful in obtaining
a judgment on his claim.

In
periodic reports the Company disclosed that on May 25, 2017, the SEC’s Chicago Regional Office informed it that it had made
a preliminary determination to recommend filing of an enforcement action against the Company and its CEO based on possible violations
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act, and Section 15(a) of
the Exchange Act. Subsequent discussions resulted in the submission of an Offer of Settlement (“Settlement”) through
an administrative cease and desist action on November 17, 2017, which was accepted by the SEC on April 12, 2018, as disclosed
on Form 8K filed April 18, 2018. Pursuant to the Settlement, the Company neither admitted nor denied any of the allegations, but
was enjoined from violating the above-referenced Sections and Rule. The Settlement imposed no financial penalties or sanctions
against the Company.

Il
Form 8K also disclosed that on April 13, 2018, the SEC filed a separate complaint against the CEO in the U.S. District Court for
the Northern District of Illinois, asserting the allegations noted above, as well as allegations that he manipulated the price
of company shares through undisclosed trading, realizing more than $130,000 from such trading. On the date of filing, the CEO
voluntarily resigned as an officer and director of the Company. Without admitting or denying the allegations, the CEO consented
to the entry of the judgment, which was entered on September 26, 2018 by the U.S. District Court for the Northern District of
Illinois. The judgment permanently enjoined him from violating the anti-fraud provisions of Section 17(a) of the Securities Act
of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the broker registration provisions
of Section 15(a) of the Exchange Act. It also bars him from serving as an officer or director of a public company and from participating
in penny stock offerings, and ordered disgorgement and interest and penalties to be determined by the court.

On
January 31, 2019, the former CEO was terminated and his service as Director of Business Development ceased as of that date.

Compliance
with Section 16(A) Of the Exchange Act.

Section
16(a) of the Exchange Act requires the Company’s officers and directors, and persons who beneficially own more than 10%
of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and are required to furnish copies to the Company.

ITEM                                          11.

EXECUTIVE                                          COMPENSATION

Executive
Compensation

Sommario
Compensation Table

Nome     and Position

Year ($)

Salary ($)

Other                                          Annual Compensation Bonus                                          ($)

Restricted Stock (Shares)

Options Awards (Shares)

LTIP SARs                                          ($)

Payouts ($)

All                                          Other Compensation ($)

Calvin R. O’Harrow

2019

–

–

–

–

–

–

–

Chief Executive     Officer, Director

2018

–

–

–

1,800,000

–

–

–

Douglas W. Samuelson

2019

–

–

–

–

–

–

–

Chief Financial Officer

2018

–

–

–

1,730,000

–

–

–

Paul D. Jones

2019

–

–

–

–

–

–

–

Director, President

2018

–

–

–

1,050,000

–

–

–

Thomas E. Scott

2019

–

–

–

–

–

–

–

Director, Secretary

2018

–

–

–

750,000

–

–

–

William E. Kingsford

2019

–

–

–

–

–

–

–

Director

2018

–

–

–

600,000

–

–

–

Roy M. Harsch

2019

–

–

–

–

–

–

–

Director, Chairman

2018

–

–

–

750,000

–

–

–

Andrew J. Kandalepas,

2019

133,333

–

–

–

–

–

–

Former Chairman and     CEO (1)

2018

182,375

–

–

1,300,000

–

–

–

Rick Howard, President,

2019

35,000

–

–

–

–

–

–

former CEO of StealthCo     (2)

2018

130,000

–

–

1,150,000

–

–

–

(1)
Andrew Kandalepas resigned from the Board of Directors and as CEO in April 2018.

(2)
Ricky Howard passed away suddenly in November 2018.

There
are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or contributed to by the Company or any of its subsidiaries,
if any.

Management

On
February 5, 2018, the Board of Directors appointed Calvin R. O’Harrow as Chief Operating Officer and a member of the Board.
It accepted the resignation of Andrew J. Kandalepas, as Chief Financial Officer (CFO) and Chief Accounting Officer (CAO), and
appointed Douglas Samuelson as CFO and CAO. In April 2018, Mr. Kandalepas resigned as Chief Executive Officer (CEO) and in May
2018, the Board approved the permanent appointment of Calvin O’Harrow as CEO.

Calvin
O’Harrow started his career as a successful entrepreneur and moved on to a 34-year tenure as financial advisor at a prominent
national wirehouse and wealth management firm, where he established unique team concepts designed to reward team members for their
continued relationships with longstanding clients. Beyond this success, he has also been involved in several non-profit organizations
and held a variety of positions in finance, sales and management. Mr. O’Harrow has a B.S. from the University of Wisconsin,
Madison.

Doug
Samuelson, CPA, brings over 20 years of experience in public accounting, including serving as CFO, Director and Controller in
both private and publicly traded companies. In the past, he provided contract CFO services and assisted public companies with
their Sarbanes-Oxley (SOX) compliance. He has worked for major accounting firms, including Arthur Andersen LLP and Cohn Reznick
LLP. Mr. Samuelson received his B.S. degree in Accounting from the University of Utah and his M.S. degree in Computer Science
from California State University, Northridge.

On
January 12, 2015, the Company entered into the PDC Joint Venture Agreement with TMA to further develop, market, license and/or
sell PSI technology and products. In December 2018, the PDC Joint Venture Agreement was terminated. Further development, marketing,
licensing and/or sales of PSI Technology and products is expected to be conducted through NEO, the joint venture between the Company,
PSI and GEN2.

During
the period covered by this Report, Mr. Ricky Howard managed SCI’s business. Mr. Howard brought to SCI over thirty years
of experience in operations management and executive positions in a variety of industries ranging from entrepreneurial startups
to Fortune 500 companies. He joined Stealth Mark as V.P. of Operations at the early stage of development in 2006 and played an
integral role in bringing the company’s capabilities to its present status including design and creation of its manufacturing
capabilities, implementation of its ERP inventory controls system, software and hardware development, marketing and sales materials
processes and day-to-day operational procedures and processes. In November 2018, Mr. Howard passed away suddenly and Mr. O’Harrow
took over operations of SCI’s business on an interim basis.

Stock
Option Plan

On
December 22, 2010, effective retroactively as of June 30, 2010, the Company’s Board of Directors approved the adoption of
the “2010 Non-Qualified Stock Option Plan” (“2010 Option Plan”) by unanimous consent. The 2010 Option
Plan was initiated to encourage and enable officers, directors, consultants, advisors and key employees of the Company to acquire
and retain a proprietary interest in the Company by ownership of its common stock. A total of 7,500,000 of the authorized shares
of the Company’s common stock may be subject to, or issued pursuant to, the terms of the plan. Effective January 1, 2018,
the Board of Directors approved to increase the number of authorized shares of the Company’s common stock that may be subject
to, or issued pursuant to, the terms of the plan from 7,500,000 to 30,000,000.

Il
Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule
on a straight-line basis over the requisite service period for the entire award. Additionally, the Company’s policy is to
issue new shares of common stock to satisfy stock option exercises. The Company applied fair value accounting for all share based
payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing
model.

ITEM                                          12.

SECURITY                                          OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal
Shareholders

Il
following table presents certain information regarding the beneficial ownership of all shares of common stock at the date of this
Report, for each executive officer and director of our Company and for each person known to us who owns beneficially more than
five percent (5%) of the issued and outstanding shares of our common stock, during the period covered by this Report.

Name and Address of Beneficial Owner (1)		Number of Shares (2)				Options to Acquire Number of Shares (2)				Warrants to Acquire Number of Shares (2)				Number of Shares Inclusive of Options and Warrants				Percentage (%) of Security Ownership
Calvin R. O’Harrow, CEO, COO and Director			9,183,000				900,000				11,791,112				21,874,112				11.8	%
Douglas W. Samuelson, CFO			250,000				480,000				400,000				1,130,000				0.6	%
Paul D. Jones, President, Director			1,263,305				525,000				1,111,111				2,899,416				1.6	%
Thomas E. Scott, Secretary, Director			849,710				375,000				463,333				1,688,043				0.9	%
William E. Kingsford, Director			1,933,778				300,000				2,338,731				4,572,509				2.5	%
Roy M. Harsch, Director, Chairman			1,553,254				375,000				1,605,397				3,533,651				1.9	%
Officers and Directors as a group			15,033,047				2,955,000				17,709,684				35,697,731				19.2	%
Total issued and outstanding			107,497,077				12,012,738				66,484,049				185,993,864				100.00	%

	(1)	Except                                          as otherwise noted below, the address of each of the persons shown in the above table                                          is c/o Wellness Center USA, Inc., 145 E. University Boulevard, Tucson, AZ 85705.
	(2)	Includes,                                          where applicable, shares of common stock issuable upon the exercise of options or warrants                                          to acquire common stock held by such person that may be exercised within sixty (60) days                                          after September 30, 2019. Also includes unvested shares of restricted stock as to which                                          such person has voting power but no dispositive power. Unless otherwise indicated, we                                          believe that all persons named in the table above have sole voting power and/or investment                                          power with respect to all shares of common stock beneficially owned by them.

ITEM     13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Relazionato
Party Transactions

During
the period covered by this Report, related parties with whom the Company had transactions were:

Loans
from Officers and Shareholders

Come
of September 30, 2017, loans payable to shareholders of $59,000 were outstanding. During the year ended September 30, 2018, the
Company borrowed $434,500 under 22 short-term, unsecured loans. The loans have an interest rate of eight percent and are due one
year from the date of issuance. During the year ended September 30, 2018, the Company repaid $20,500 of the loans payable and
$407,000 were converted into 2,800,713 shares of the Company’s common stock. In connection with the conversion of the loans
payable, the Company issued warrants to purchase 6,038,336 shares of common stock to the holders as an inducement to convert.
The warrants expire five years from the date of grant and have exercise prices of $0.14 and $0.18 per share. The fair value of
the warrants of $689,934 was recorded as financing costs during the year ended September 30, 2018 and was based on a probability
affected Black-Scholes Merton option pricing model with stock prices of $0.13 and $0.14, volatility of 124.60% and 124.73% and
risk-free rates of 2.37% and 2.43%. In addition to the warrants, the Company offered certain loan holders, who were not officers
or directors, to convert at a rate below the market price of the stock on the date of conversion. An aggregate of 218,452 additional
common shares were issued to these loan holders with a value of $30,583 on the date of conversion. The Company recorded the amount
as a financing cost during the year ended September 30, 2018. As of September 30, 2018, loans payable from officers and shareholders
of $66,000 were outstanding.

During
the year ended September 30, 2019, the Company borrowed $358,250 from its officers and shareholders and repaid $25,000. All of
the loans are unsecured, have an interest rate of eight percent and are due one year from the date of issuance. As of September
30, 2019, loans payable to officers and shareholders of $399,250 were outstanding.

Common
shares issued for cash from Officer

During
the year ended September 30, 2018, the Company received $30,000 from the sale of 200,000 shares of its common stock from one of
its officers. In connection with the sale, the Company issued a warrant to the officer to purchase 400,000 shares of the Company’s
common stock. The warrants expire five years from the date of grant and has an exercise price of $0.18 per share.

Compensation
of Former Chairman and Chief Executive Officer

During
the years ended September 30, 2019 and 2018, the Company’s former Chairman and Chief Executive Officer, Andrew J. Kandalepas,
was paid compensation of $133,333 and $182,375, respectively. During the year ended September 30, 2018, he was also granted stock
options to purchase 1,300,000 shares of the Company’s common stock at an exercise price of $0.14 per share. The options
expire five years from the date of grant and the shares will vest in various periods. Mr. Kandalepas resigned as an officer and
director in April 2018. As of September 30, 2019, and 2018, $33,964 and $81,965 of accrued compensation was owed to Mr. Kandalepas.

Corporate
Office Facility

Il
Company leased its corporate office facility in Hoffman Estates, Illinois pursuant to a non-cancellable lease initiated in July
2016 and expiring February 28, 2024. The Company vacated the facility in April 2019, in favor of its present facilities in Tucson
AZ, which are provided by a shareholder on a rent-free basis.

Director
Independence

Currently,
the Company does not have a policy that its directors or a majority of its directors be independent of management. The Company
intends to implement a policy that a majority of the Board members be independent of the Company’s management as the members
of the board of director’s increases.

ITEM                                          14.

PRINCIPAL                                          ACCOUNTING FEES AND SERVICES

Audit
Fees

Il
following table sets forth the fees billed to the Company for professional services rendered by the Company’s independent
registered public accounting firm, for the years ended September 30, 2018 and 2017:

Fees		2019				2018
Audit fees		$	90,000			$	90,000
Audit Related Fees		$	–			$	–
Tax fees		$	–			$	–
All other fees		$	–			$	–
Total Fees		$	90,000			$	90,000

Audit
Fees. Consist of fees billed for professional services rendered for the audits of our financial statements and reviews of
our interim consolidated financial statements included in quarterly reports.

Tax
Fees. Our auditors did not provide us with professional services for tax compliance, tax advice and tax planning. These services
include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions
and acquisitions.

Pre-approval
of All Services from the Independent Auditors

Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us or our
subsidiaries to render any auditing or permitted non-audit related service, the engagement be:

	●	approved                                          by our audit committee; o
	●	entered                                          into pursuant to pre-approval policies and procedures established by the audit committee,                                          provided the policies and procedures are detailed as to the particular service, the audit                                          committee is informed of each service, and such policies and procedures do not include                                          delegation of the audit committee’s responsibilities to management.

Noi
do not have an audit committee, however our board of directors acts as the audit committee, established pre-approval policies
and procedures as to the particular service which do not include delegation of the audit committee’s responsibilities to
management. Our board of directors pre-approves all services provided by our independent auditors and is informed of each service.

PART
IV

ITEM                                          15.

EXHIBITS,                                          FINANCIAL STATEMENT SCHEDULES.

un)
Documents filed as part of this Annual Report

1.
Financial Statements

2.
Financial Statement Schedules

3.
Exhibits

Exhibit Number		Description of Document		Filed Herewith		Incorporated by Reference To:
2.2		Exchange Agreement dated June 21, 2012 by and between Psoria-Shield Inc. and Wellness Center USA, Inc.				Exhibit 2.2 to the Registrant’s Amended Current Report on Form 8-KA3 filed on January 22, 2013.
2.4		Exchange Agreement dated February 28, 2014 by and between National Pain Centers, Inc. and Wellness Center USA, Inc.				Exhibit 2.4 to the Registrant’s Current Report on Form 8-K filed on February 28, 2014.
2.5		Purchase Agreement dated March 31, 2014 by and between SMI Holdings, Inc. d/b/a Stealth Mark, Inc. and Stealthco, Inc., a wholly-owned subsidiary of Wellness Center USA, Inc.				Exhibit 2.5 to the Registrant’s Current Report on Form 8-K filed on April 9, 2014.
3.1		Articles of Incorporation of the Registrant as filed with the Secretary of State of Nevada.				Exhibits 3.2 to the Registrant’s Amended Registration Statement on Form S-1A1 filed on July 7, 2011.
3.2		Bylaws of the registrant.				Exhibits 3.2 to the Registrant’s Amended Registration Statement on Form S-1A1 filed on July 7, 2011.
3.3		Certificate of Amendment as filed with the Secretary of State of Nevada on January 12, 2017.				Exhibit A to Registrant’s Information Statement on Schedule 14C filed January 12, 2017.
3.4		Certificate of Amendment as filed with the Secretary of State of Nevada on October 11, 2019.				Exhibit B to Registrant’s Information Statement on Schedule 14C filed September 18, 2019.
4.1		Subscription Agreement				Exhibits 99.1 to the Registrant’s Amended Registration Statement on Form S-1A1 filed on July 7, 2011.
4.2		Form of warrant				Exhibits 99.2 to the Registrant’s Amended Registration Statement on Form S-1A1 filed on July 7, 2011.
4.3		2010 Non-Qualified Stock Compensation Plan				Exhibits 99.3 to the Registrant’s Amended Registration Statement on Form S-1A1 filed on July 7, 2011.
5.4		Employment Agreement dated as of February 28, 2014 by and between Jay Joshi, M.D. and Wellness Center USA, Inc.				Exhibit 5.4 to the Registrant’s Current Report on Form 8-K filed on February 28, 2014.

5.5		Employment Agreement dated as of July 1, 2014 by and between Rick Howard and Wellness Center USA, Inc.				Exhibit 5.5 to the Registrant’s Annual Report on Form 10-K filed on January 15, 2015.
5.6		Employment Agreement dated as of January 1, 2018 by and between Rick Howard and Wellness Center USA, Inc.				Exhibit 5.6 to the Registrant’s Annual Report on Form 10-K filed on February 20, 2018.
5.7		Employment Agreement dated as of January 1, 2018 by and between Lee Anne Patterson and Wellness Center USA, Inc.				Exhibit 5.7 to the Registrant’s Annual Report on Form 10-K filed on February 20, 2018.
5.8		Employment Agreement dated as of January 1, 2018 by and between Richard Neal and Wellness Center USA, Inc.				Exhibit 5.8 to the Registrant’s Annual Report on Form 10-K filed on February 20, 2018.
10.4		License Agreement dated as of August 25, 2009 by and between Psoria-Shield Inc. and Scot L. Johnson.				Exhibit 10.4 to the Registrant’s Amended Current Report on Form 8-KA3 filed on January 22, 2013.
10.5		License Agreement dated as of December 11, 2010 by and between Psoria-Shield Inc. and Scot L. Johnson.				Exhibit 10.5 to the Registrant’s Amended Current Report on Form 8-KA3 filed on January 22, 2013.
10.6		Management Service Agreement dated as of February 28, 2014 by and between National Pain Centers, Inc. and National Pain Centers, LLC				Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K filed on January 15, 2015
10.7		Agency Agreement dated as of October 24, 2014 by and between The Medical Alliance, Inc., Psoria-Shield, Inc. and Wellness Center USA, Inc.				Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K filed on January 15, 2015
10.8		Joint Venture Agreement dated as of January12, 2015 by and between The Medical Alliance, Inc., Psoria-Shield, Inc. and Wellness Center USA, Inc.				Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed on January 15, 2015
10.9		Joint Venture Agreement dated as of November 15, 2018 by and between PSI Gen 2 Funding, Inc., Psoria-Shield, Inc. and Wellness Center USA, Inc.				Exhibit 10.9 to the Registrant’s Form 8-K filed on November 15, 2018
21.1		List of subsidiaries of the Registrant				Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K filed on January 15, 2015
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*)		X
31.2		Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (**)		X
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*)		X
32.2		Certification of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (***)		X
101.INS		XBRL Instance Document ****		X
101. SCH		XBRL Taxonomy Extension Schema Linkbase Document ****		X
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document ****		X
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document ****		X
101.LAB		XBRL Taxonomy Extension Label Linkbase Document ****		X
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document ****		X

(*)	Filed     herewith.
(**)	Incluso     in Exhibit 32.1
(***)	Incluso     in Exhibit 32.2
(****)	Pursuant per     Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or     prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of     1934 and otherwise are not subject to liability.

SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, there unto duly authorized.

	WELLNESS     CENTER USA, INC.
Data:     28 gennaio 2020	By:	/s/     Paul D. Jones
		Paul         D. Jones President (Duly         Authorized Principal Executive Officer)

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, there unto duly authorized.

	WELLNESS     CENTER USA, INC.
Data:     28 gennaio 2020	By:	/s/     Douglas W. Samuelson
		Douglas         W. Samuelson Chief         Financial Officer and Chief Accounting Officer (Duly         Authorized Principal Accounting Officer)

POWER
OF ATTORNEY

Each
person whose signature appears below hereby constitutes and appoints severally Paul D. Jones, his true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities,
to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

SIGNATURE		TITLE		DATE
/s/     Calvin R. O’Harrow		Chief     Executive Officer, Chief Operating Officer, Director		January     28, 2020
Calvin     R. O’Harrow
/s/     Douglas W. Samuelson		Chief     Financial Officer, Chief Accounting Officer		January     28, 2020
Douglas     W. Samuelson
/s/     Paul D. Jones		Director,     President		January     28, 2020
Paul     D. Jones
/s/     Thomas E. Scott		Director,     Secretary		January     28, 2020
Thomas     E. Scott
/s/     William E. Kingsford		Director		January     28, 2020
William     E. Kingsford
/s/     Roy M. Harsch		Director		January     28, 2020
Roy     M. Harsch

ITEM                                          8.

FINANCIAL                                          STATEMENTS AND SUPPLEMENTAL DATA

Wellness
Center USA, Inc.

September
30, 2019 and 2018

Index
to the Consolidated Financial Statements

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Per
the Board of Directors

Wellness
Center USA, Inc.

Chicago,
Illinois

Opinion
on the Financial Statements

Noi
have audited the accompanying consolidated balance sheets of Wellness Center USA, Inc. (the “Company”) as of September
30, 2019 and 2018, the related consolidated statements of operations, shareholders’ deficit, and cash flows for the years
then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion,
the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company
as of September 30, 2019 and 2018, and the consolidated results of their operations and their cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States of America.

Going
Concern

Il
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 1 to the consolidated financial statements, the Company had a shareholders’ deficit at September 30,
2019, and incurred a net loss and utilized cash in operating activities during the year ended September 30, 2019. These factors
raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to
these matters are also described in Note 1 to the financial statements. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Basis
for Opinion

Questi
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

Noi
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.

Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
dichiarazioni. We believe that our audits provide a reasonable basis for our opinion.

Noi
have served as the Company’s auditor since 2016.

Weinberg
& Company, P.A.

Los
Angeles, California

January
28, 2020

Wellness
Center USA, Inc.

Consolidated
Balance Sheets

		September 30,
		2019				2018
ASSETS
Current Assets
Cash		$	53,147			$	4,210
Prepaid expenses and other current assets			55,000				1,550
Total Current Assets			108,147				5,760
Property and equipment, net			1,562				2,619
Other assets			–				16,760
Total Other Assets			1,562				19,379
TOTAL ASSETS		$	109,709			$	25,139
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	794,453			$	572,753
Deferred revenue			–				8,624
Convertible notes payable			–				202,922
Loans payable from officers and shareholders			399,250				66,000
Total Current Liabilities			1,193,703				850,299
Shareholders’ Deficit
Common stock, par value $0.001, 200,000,000 shares authorized; 107,497,077 and 100,952,569     shares issued and outstanding, respectively			107,497				100,952
Additional paid-in capital			23,777,647				22,450,252
Accumulated deficit			(25,362,287	)			(22,974,740	)
Total Wellness Center USA shareholders’ deficit			(1,477,143	)			(423,536	)
Non-controlling interest			393,149				(401,624	)
Total Shareholder’s deficit			(1,083,994	)			(825,160	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT		$	109,709			$	25,139

Il
accompanying notes are an integral part of these consolidated financial statements.

Wellness
Center USA, Inc.

Consolidated
Statements of Operations

		Year Ended September 30,
		2019				2018
Sales:
Trade		$	19,508			$	140,023
Consulting services			13,867				73,700
Total Sales			33,375				213,723
Cost of goods sold			20,025				79,960
Gross profit			13,350				133,763
Operating expenses			1,779,934				2,226,362
Loss from operations			(1,766,584	)			(2,092,599	)
Other expenses
Amortization of debt discount			(72,078	)			(318,038	)
Financing costs			(182,064	)			(891,583	)
Loss on modification of conversion price on convertible note payable			–				(158,400	)
Loss on modification of exercise price on warrants in connection with convertible note     payable			–				(5,445	)
Interest expense			(25,298	)			(27,354	)
Total other expenses			(279,440	)			(1,400,820	)
NET LOSS			(2,046,024	)			(3,493,419	)
Net loss attributable to non-controlling interest			63,860				84,236
Loss from deconsolidation of non-controlling interest			(405,383	)			–
NET LOSS ATTRIBUTABLE TO WELLNESS CENTER USA, INC.			(2,387,547	)			(3,409,183	)
Deemed dividend relating to settlement with shareholder			–				(433,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(2,387,547	)		$	(3,842,183	)
BASIC AND DILUTED LOSS PER SHARE		$	(0.02	)		$	(0.04	)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND     DILUTED			105,421,218				94,475,383

The accompanying notes are an integral part of these consolidated financial statements.

Wellness
Center USA, Inc.

Consolidated
Statements of Shareholders’ Deficit

Per
the Years Ended September 30, 2019 and 2018

		Common     Stock								Additional Paid-in				Accumulated				Total WCUI				Non-controlling
		Shares				Amount				Capital				Deficit				Deficit				Interest				Total
Balance, September 30, 2017			90,284,916			$	90,285			$	19,069,211			$	(19,132,557	)		$	26,939			$	(317,388	)		$	(290,449	)
Common shares issued for cash			1,614,286				1,614				175,386				–				177,000				–				177,000
Exercise of stock warrants			1,407,619				1,407				169,507				–				170,914				–				170,914
Fair value of common stock issued for services			770,000				770				110,530				–				111,300				–				111,300
Shares issued upon conversions of note payable			1,745,631				1,746				172,817				–				174,563				–				174,563
Shares issued upon conversion of loans payable from officers and     shareholders			2,800,713				2,801				404,199				–				407,000				–				407,000
Fair value of additional shares issued upon conversion of loans     payable from officers and shareholders			218,452				218				30,365				–				30,583				–				30,583
Fair value of warrants issued as an inducement for conversion     of loans payable from officers and shareholders			–				–				689,934				–				689,934				–				689,934
Fair value of vested stock options			–				–				612,503				–				612,503				–				612,503
Fair value of common stock issued in connection with convertible     note payable			747,751				748				113,591				–				114,339				–				114,339
Fair value of shares and warrants issued upon settlement of favored     nations clause			1,066,667				1,067				431,933				(433,000	)			–				–				–
Fair value of shares and warrants issued to a stockholder upon     settlement			296,534				296				56,431				–				56,727				–				56,727
Discount on convertible note payable due to beneficial conversion     and warrants			–				–				250,000				–				250,000				–				250,000
Loss on modification of conversion price and exercise price on warrants     in connection with convertible note payable			–				–				163,845				–				163,845				–				163,845
Net loss for the year ended September 30,     2018			–				–				–				(3,409,183	)			(3,409,183	)			(84,236	)			(3,493,419	)
Balance, September 30, 2018			100,952,569				100,952				22,450,252				(22,974,740	)			(423,536	)			(401,624	)			(825,160	)
Common shares issued for cash			142,857				143				9,857				–				10,000				–				10,000
Shares issued upon conversion of note payable and accrued interest			4,810,222				4,811				285,361				–				290,172				–				290,172
Fair value of common stock issued with convertible note payable			314,286				314				21,686				–				22,000				–				22,000
Fair value of additional shares issued to induce conversions of     note payable			–				–				160,064				–				160,064				–				160,064
Fair value of vested stock options			–				–				300,925				–				300,925				–				300,925
Fair value of common stock issued for services			1,277,143				1,277				77,752				–				79,029				–				79,029
Termination of non-controlling interest agreement			–				–				–				(405,383	)			(405,383	)			405,383				–
Contribution of capital by joint venture partner			–				–				471,750				–				471,750				453,250				925,000
Net loss for the year ended September 30,     2019			–				–				–				(1,982,164	)			(1,982,164	)			(63,860	)			(2,046,024	)
Balance, September 30, 2019			107,497,077			$	107,497			$	23,777,647			$	(25,362,287	)		$	(1,477,143	)		$	393,149			$	(1,083,994	)

Il
accompanying notes are an integral part of these consolidated financial statements.

Wellness
Center USA, Inc.

Consolidated
Statements of Cash Flows

		Year Ended
		September 30,
		2019				2018
Cash Flows from Operating Activities
Net loss		$	(2,046,024	)		$	(3,493,419	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense			1,057				2,507
Amortization of debt discount			72,078				318,038
Fair value of common shares issued for services			79,029				111,300
Fair value of stock options issued for services			300,925				612,503
Fair value of additional shares issued upon conversion of loans payable
from officers and shareholders			–				30,583
Fair value of warrants issued upon conversion of loans payable
from officers and shareholders			–				689,934
Fair value of additional shares issued to induce conversions of note payable			160,064				–
Fair value of common stock issued with convertible note payable			22,000				114,339
Loss on abandonment of lease			65,000				–
Loss on modification of conversion price on convertible note payable			–				158,400
Loss on modification of exercise price on warrants in connection
with convertible note payable			–				5,445
Fair value of additional shares and warrants issued to a stockholder			–				56,727
Changes in Assets and Liabilities
(Increase) Decrease in:
Accounts receivable			–				24,999
Inventories			–				12,335
Prepaid expenses and other assets			(36,690	)			201
(Decrease) Increase in:
Accounts payable and accrued expenses			171,872				378,948
Accrued payroll – officers			–				(13,440	)
Deferred revenue			(8,624	)			(46,473	)
Net cash used in operating activities			(1,219,313	)			(1,037,073	)
Cash Flows from Financing Activities
Proceeds from loans payable from officers and shareholders			358,250				434,500
Repayment of loans payable from officers and shareholders			(25,000	)			(20,500	)
Proceeds from convertible note payable			–				250,000
Common stock and warrants issued for cash			10,000				177,000
Exercise of stock warrants			–				170,914
Contribution of capital by joint venture partner			925,000				–
Net cash provided by financing activities			1,268,250				1,011,914
Net increase (decrease) in cash			48,937				(25,159	)
Cash beginning of year			4,210				29,369
Cash end of year		$	53,147			$	4,210
Supplemental cash flows disclosures:
Interest paid		$	–			$	–
Taxes paid		$	–			$	–
Supplemental non-cash financing disclosures:
Debt discount on issuance of convertible note payable		$	–			$	250,000
Conversion of convertible note payable and accrued interest into common shares		$	290,172			$	184,126
Conversion of loans payable from officers and shareholders into common shares		$	–			$	407,000

Il
accompanying notes are an integral part of these consolidated financial statements.

WELLNESS
CENTER USA, INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED SEPTEMBER 30, 2019 and 2018

NOTA
1 – BASIS OF PRESENTATION

Organization
and Operations

Wellness
Center USA, Inc. (“WCUI” or the “Company”) was incorporated in June 2010 under the laws of the State of
Nevada. The Company initially engaged in online sports and nutrition supplements marketing and distribution. The Company subsequently
expanded into additional businesses within the healthcare and medical sectors through acquisitions, including Psoria-Shield Inc.
(“PSI”), National Pain Centers, Inc. (“NPC”), and StealthCo Inc. (“SCI”), d/b/a Stealth Mark,
Inc.

Il
Company currently operates in the following business segments: (i) distribution of targeted Ultra Violet (“UV”) phototherapy
devices for dermatology; and (ii) authentication and encryption products and services. The segments are operated, respectively,
through PSI and SCI.

Going
Concern

Il
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying
consolidated financial statements, the Company has not yet generated significant revenues and has incurred recurring net losses.
During the year ended September 30, 2019, the Company incurred a net loss of $2,046,024 and used cash in operations of $1,219,313,
and had a shareholders’ deficit of $1,083,994 as of September 30, 2019. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent
upon the Company’s ability to raise additional funds and implement its strategies. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.

A
September 30, 2019, the Company had cash on hand in the amount of $53,147. Management estimates it has sufficient cash
to operate through February 2020. The ability to continue as a going concern is dependent on the Company attaining and maintaining
profitable operations in the future and raising additional capital soon to meet its obligations and repay its liabilities arising
from normal business operations when they come due. Since inception, we have funded our operations primarily through equity and
debt financings and we expect to continue to rely on these sources of capital in the future. During the year ended September 30,
2019, the Company received $1,293,250 through loans payable from officers and shareholders, the sale of its common stock, and
from contributions of capital by a joint venture partner. Subsequent to September 30, 2019, the Company received additional advances
from shareholders of $310,000 (see Note 13).

No
assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory
to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations,
in the case of debt financing, or cause substantial dilution for our stock holders, in case of equity financing.

NOTA
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of Consolidation

Il
Company’s consolidated subsidiaries and/or entities are as follows:

Name of consolidated subsidiary or entity		State or other jurisdiction of incorporation or organization		Data                                                                       of incorporation or formation (date of acquisition/disposition, if applicable)		Attributable interest
Psoria-Shield Inc. (“PSI”)		The State of Florida		June 17, 2009 (August 24, 2012)			100	%
StealthCo, Inc. (“StealthCo”)		The State of Illinois		March 18, 2014			100	%
Psoria Development Company LLC. (“PDC”)		The State of Illinois		January 15, 2015			50	%
NEO Phototherapy LLC (“NEO”)		The State of Illinois		December 2018			50.5	%

NOTA
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use
of Estimates

Il
preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period.
Significant estimates are used in the valuation of accounts receivable and allowance for uncollectible amounts, inventory and
obsolescence reserves, accruals for potential liabilities, valuations of stock-based compensation, realization of deferred tax
assets, among others. Actual results could differ from these estimates.

Income
(Loss) Per Share

Di base
loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of outstanding
common shares during the period. Diluted loss per share is computed by dividing the net loss applicable to common stockholders
by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding
if all dilutive potential common shares had been issued. For the years ended September 30, 2019 and 2018, the basic and diluted
shares outstanding were the same, as potentially dilutive shares were considered anti-dilutive. At September 30, 2019 and 2018,
the dilutive impact of outstanding stock options of 15,237,738 and 17,946,667 shares, respectively, and outstanding warrants for
66,484,049 and 67,907,728 shares, respectively, have been excluded because their impact on the loss per share is anti-dilutive.

Revenue
Recognition

In
May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic
606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the
transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for
those goods or services. The Company adopted this ASU on October 1, 2018 retrospectively, the cumulative effect of the initial
application on our accumulated deficit on that date was immaterial.

Per
trade sales, the Company generates its revenue from sales contracts with customers with revenues being generated upon the shipment
of merchandise, or for consulting services, revenue is recognized in the period services are rendered and earned under
service arrangements with clients.

Noi
sell our products through two main sales channels: 1) directly to customers who use our products (the “Direct Channel”)
and 2) to distribution partners who resell our products (the “Indirect Channel”).

Sotto
the Direct Channel, we sell our products to and we receive payment directly from customers who purchase our products. Under our
Indirect Channel, we have entered into distribution agreements that allow the distributors to sell our products and fulfill performance
obligations under the agreements.

Noi
determine revenue recognition through the following steps:

	●	Identification     of the contract, or contracts, with a customer
	●	Identification     of the performance obligations in the contract
	●	Determination     of the transaction price
	●	Allocation     of the transaction price to the performance obligations in the contract
	●	Recognition     of revenue when, or as, we satisfy a performance obligation.

Revenue
is generally recognized upon shipment or when a service has been completed, unless we have significant performance obligations
for services still to be completed. We recognize revenue when a material reversal is no longer probable. Payments received before
the relevant criteria for revenue recognition are satisfied are recorded as deferred revenue. Deferred revenue at September 30,
2018 was $8,624. There was no deferred revenue at September 30, 2019.

NOTA
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Proprietà
and Equipment

Proprietà
and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line
method over the estimated useful lives of the assets. The Company has determined the estimated useful lives of its property and
equipment, as follows:

Computer     equipment	5     years
Medical     equipment	5     years
Furniture     and fixtures	7     years
Vehicles	3     years
Software	3     years

Maintenance
and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of
are removed from the related accounts and the resulting gain or loss is reflected in the statements of operations.

Management
assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value
may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to
result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset,
an impairment loss is recognized to write down the asset to its estimated fair value.

Income
Taxes

Income
tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected
tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation
allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company recorded
a valuation allowance against its deferred tax assets as of September 30, 2019 and 2018.

Il
Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions.
The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that
it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50 percent likely of
being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that
the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions
are recognized in the provision for income taxes.

Fair
Value measurements

Il
Company determines the fair value of its assets and liabilities based on the exchange price in U.S. dollars that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value
maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with
three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value:

	●	Level     1 — Quoted prices in active markets for identical assets or liabilities.
	●	Level     2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar     assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated     by observable market data for substantially the full term of the assets or liabilities.
	●	Level     3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair     value of the assets or liabilities.

Il
carrying amounts of financial instruments such as cash, and accounts payable and accrued liabilities, approximate the related
fair values due to the short-term maturities of these instruments.

NOTA
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Non-controlling
Interest

Through
November 2018, non-controlling interest represented the non-controlling interest holder’s proportionate share of the equity
of the Company’s majority-owned subsidiary, PDC. Non-controlling interest is adjusted for the non-controlling interest holder’s
proportionate share of the earnings or losses and other comprehensive income (loss), if any, and the non-controlling interest
continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.

On
November 15, 2018, PSI and TMA entered into a Withdraw and Mutual Release Agreement to terminate their joint venture agreement.
On the date of termination, the non-controlling interest’s share of the accumulated losses of the joint venture totaled
to $405,383. Upon termination, during the three months ended December 31, 2018, the Company wrote-off the non-controlling interest’s
share of the accumulated losses and recorded a loss from the deconsolidation of a non-controlling interest of $405,383.

In
December 2018, PSI entered into a Joint Venture Agreement with GEN2 to further development, marketing, licensing and/or sale of
PSI technology and products. Pursuant to the Joint Venture Agreement, the venture will be conducted through NEO. PSI and GEN2
will be the members of NEO, owning 50.5% and 36.0%, respectively, of the Units issued in connection with the organization of NEO.
An additional 13.5% of such Units will be reserved for issuance as incentives for key employees and consultants. Until such shares
are distributed, the Company controls 68% of the joint venture and GEN2 the remaining 32%. PSI and GEN2 will manage NEO’s
day-to-day operations. PSI will contribute PSI technology to NEO and GEN2 will contribute $700,000. As of September 30, 2019,
NEO’s operations required additional funding above the $700,000 documented in the agreement, and as of September 30, 2019,
GEN2 had received $925,000 of investments to contribute to NEO. As of September 30, 2019, the Company controlled 51% of the joint
venture, GEN2 controlled 39% and another individual controlled the remaining 10%. The Company recorded its proportionate share
of the contributions received of $471,750 to additional paid-in-capital and $453,250 to non-controlling interest as of
that date. During the year ended September 30, 2019, NEO recorded a loss of $122,655 relating to its operations.

Repayment
of the investment by GEN2 will begin through and upon the date which NEO has realized and retained cumulative net income/distributable
cash in the amount of $300,000. Distributions thereafter will be made to PSI, GEN2 and other members in proportion to their respective
Unit ownership, at the times and in the manner determined from time to time by the managers, in their sole discretion. GEN2 consists
of accredited investors, and investment participation of $700,000 from several WCUI officers and directors, including Calvin R.
O’Harrow and Roy M. Harsch.

Stock-Based
Compensation

Il
Company periodically grants stock options and warrants to employees and non-employees in non-capital raising transactions as compensation
for services rendered. The Company accounts for stock option and stock warrant grants to employees based on the authoritative
guidance provided by the Financial Accounting Standards Board where the value of the award is measured on the date of grant and
recognized over the vesting period. The Company accounts for stock option and stock warrant grants to non-employees in accordance
with the authoritative guidance of the Financial Accounting Standards Board where the value of the stock compensation is determined
based upon the measurement date at either a) the date at which a performance commitment is reached, or b) at the date at which
the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally
are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance
requirements by the non-employee, option or warrant grants are immediately vested and the total stock-based compensation charge
is recorded in the period of the measurement date.

Il
fair value of the Company’s common stock option and warrant grants are estimated using a Black-Scholes Merton option pricing
model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock
options, estimated forfeitures and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes
option pricing model, and based on actual experience. The assumptions used in the Black-Scholes Merton option pricing model could
materially affect compensation expense recorded in future periods.

NOTA
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently
Issued Accounting Pronouncements

In
February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record
a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months.
ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted.
A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered
into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients
available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and
disclosures.

In
June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718); Improvements to Non-Employee
Share-Based Payment Accounting” (“ASU 2018-07”). ASU 2018-07 generally aligns the measurement and classification
of share-based awards to non-employees with that of share-based awards to employees. Non-employee equity awards will be measured
at the fair value of the equity instruments to be issued, as of the grant date, and the resulting amount will be recognized as
expense over the expected or contractual term of the award. The ASU applies to all share-based payments to nonemployees in exchange
for goods or services used or consumed in an entity’s own operations. It does not apply to instruments issued to a lender or investor
in a financing transaction, or to instruments granted when selling goods or services to customers. ASU 2018-07 is effective for
annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted.
The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures.

Other
recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified
Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact
on the Company’s present or future consolidated financial statements.

NOTA
3 – PROPERTY AND EQUIPMENT

Proprietà
and equipment consisted of the following at September 30, 2019 and 2018:

		September 30, 2019				September 30, 2018
Vehicles		$	15,000			$	15,000
Computer equipment			10,456				10,456
Furniture and fixtures			23,998				23,998
Medical equipment			18,889				18,889
Software			23,207				23,207
Leasehold improvements			15,170				15,170
			106,720				106,720
Less: accumulated depreciation and amortization			(105,158	)			(104,101	)
Property and equipment, net		$	1,562			$	2,619

Depreciation
expense for the years ended September 30, 2019 and 2018 was $1,057 and $2,507, respectively.

NOTA
4 – LOANS PAYABLE FROM OFFICERS AND SHAREHOLDERS

Come
of September 30, 2017, loans payable to shareholders of $59,000 were outstanding. During the year ended September 30, 2018, the
Company borrowed $434,500 under 22 short-term, unsecured loans. The loans have an interest rate of eight percent and are due one
year from the date of issuance. During the year ended September 30, 2018, the Company repaid $20,500 of the loans payable and
$407,000 were converted into 2,800,713 shares of the Company’s common stock. In connection with the conversion of the loans
payable, the Company issued warrants to purchase 6,038,336 shares of common stock to the holders as an inducement to convert.
The warrants expire five years from the date of grant and have exercise prices of $0.14 and $0.18 per share. The fair value of
the warrants of $689,934 was recorded as financing costs during the year ended September 30, 2018 and was based on a probability
affected Black-Scholes Merton option pricing model with stock prices of $0.13 and $0.14, volatility of 124.60% and 124.73% and
risk-free rates of 2.37% and 2.43%. In addition to the warrants, the Company offered certain loan holders, who were not officers
or directors, to convert at a rate below the market price of the stock on the date of conversion. An aggregate of 218,452 additional
common shares were issued to these loan holders with a value of $30,583 on the date of conversion. The Company recorded the amount
as a financing cost during the year ended September 30, 2018. As of September 30, 2018, loans payable from officers and shareholders
of $66,000 were outstanding.

During
the year ended September 30, 2019, the Company borrowed $358,250 from its officers and shareholders and repaid $25,000. All of
the loans are unsecured, have an interest rate of eight percent per annum and are due one year from the date of issuance. As of
September 30, 2019, loans payable to officers and shareholders of $399,250 were outstanding.

NOTA
5 – CONVERTIBLE NOTE AGREEMENTS

Convertible
notes payable consisted of the following at September 30, 2019 and 2018:

		September 30, 2019				September 30, 2018
Convertible note payable (a)		$	–			$	165,000
Convertible note payable (b)			–				110,000
Debt discount – unamortized balance			–				(72,078	)
Convertible notes payable, net		$	–			$	202,922

(a)
On March 5, 2018, the Company entered into a Convertible Note Payable Agreement with an individual under which the Company borrowed
$165,000. Net proceeds received by the Company under the agreement after payment of a $15,000 fee to the lender was $150,000.
In connection with the agreement, the Company issued the individual 300,000 restricted shares of its common stock with a fair
value of $48,000 and warrants to purchase 660,000 shares of its common stock, which vested upon grant. The warrants expire five
years from the date of grant and have an exercise price of $0.20 per share. The note payable accrues interest at eight percent
per annum, is unsecured and is convertible at any time after the 90th day from the issue date into the Company’s common
stock at the fixed conversion price of $0.10 per share. The note matured in October 2018.

Il
Company calculated the related fair value of the warrants issued to the noteholder to be $55,032 using a Black Scholes Merton
option pricing model and performing a relative value calculation. The Company then made a calculation to determine if a beneficial
conversion feature (BCF) existed. The beneficial conversion was based upon the effective conversion price based on the proceeds
received that were allocated to the convertible instrument. Based upon the Company’s calculation, it was determined that
a beneficial conversion feature existed amounting to $94,968 and was recorded as a debt discount. As such the Company recognized
a debt discount at the date of issuance in the aggregate amount of $165,000 relating to the $15,000 fees paid to the lender, the
relative value of the warrants and the BCF. The note discount is being amortized over the term of the note and the unamortized
portion is recognized as a reduction to the carrying amount of the Convertible note (a valuation debt discount). The balance of
the unamortized discount at September 30, 2018 was $3,837.

During
the year ended September 30, 2019, the Company amended the terms of the agreement by extending the maturity date to January 2019
and reducing the conversion price from $0.10 per share to $0.07 per share. The reduction of the conversion price caused the Company
to issue an additional 744,732 shares, which on the dates of amendment had a combined total fair value of $51,434, which was recorded
a financing cost during the year ended September 30, 2019.

NOTA
5 – CONVERTIBLE NOTE AGREEMENTS (CONTINUED)

During
the year ended September 30, 2019, the individual converted $165,000 of the convertible note payable and $8,783 of accrued interest
into 2,482,441 shares of the Company’s common stock. During the year ended September 30, 2019, the Company amortized the
remaining $3,837 of debt discount, leaving no unamortized balance at September 30, 2019. No amounts were outstanding under the
agreement as of September 30, 2019.

(b)
On July 11, 2018, the Company entered into another Convertible Note Payable Agreement with the same individual under which the
Company borrowed an additional $110,000. Net proceeds received by the Company under the agreement after payment of a $10,000 fee
to the lender was $100,000. In connection with the agreement, the Company issued the individual 200,000 restricted shares of its
common stock with a fair value of $36,000 and warrants to purchase 440,000 shares of its common stock, which vested upon grant.
The warrants expire five years from the date of grant and have an exercise price of $0.18 per share. The note payable accrues
interest at eight percent per annum, is unsecured and is convertible at any time after the 90th day from the issue date into the
Company’s common stock at the fixed conversion price of $0.15 per share. The note matures in February 2019, but may be extended
at the option of the individual. The Company may prepay the note at any time immediately following the issue date upon seven days’
prior written notice. The note was converted into shares of the Company’s common stock (see below).

Il
Company calculated the related fair value of the warrants issued to the noteholder to be $66,440 using a Black Scholes Merton
option pricing model and performing a relative value calculation. The Company then made a calculation to determine if a beneficial
conversion feature (BCF) existed. The beneficial conversion was based upon the effective conversion price based on the proceeds
received that were allocated to the convertible instrument. Based upon the Company’s calculation, it was determined that
a beneficial conversion feature existed amounting to $33,560 and was recorded as a debt discount. As such the Company recognized
a debt discount at the date of issuance in the aggregate amount of $110,000 relating to the $10,000 fees paid to the lender, the
relative value of the warrants and the BCF. The note discount is being amortized over the term of the note and the unamortized
portion is recognized as a reduction to the carrying amount of the Convertible note (a valuation debt discount). As of September
30, 2018, the Company had amortized $41,759 of debt discount, leaving an unamortized balance of $68,241 at September 30, 2018.

During
the year ended September 30, 2019, the Company amended the terms of the agreement by reducing the conversion price from $0.15
per share to $0.05 per share. The reduction of the conversion price caused the Company to issue an additional 1,551,854 shares,
which on the date of amendment had a fair value of $108,630, which was recorded a financing cost during the year ended September
30, 2019.

During
the year ended September 30, 2019, the Company amortized $68,241 of debt discount, leaving no unamortized balance at September
30, 2019. On April 2, 2019, the individual converted the note payable of $110,000 and $6,389 of accrued interest into 2,327,781
shares of the Company’s common stock. No amounts were outstanding under the agreement as of September 30, 2019.

NOTA
6 – SHAREHOLDERS’ EQUITY

Authorized
shares

Come
of September 30, 2017, the Company was authorized by its Articles of Incorporation to issue up to 185,000,000 shares of common
stock, par value $0.001 per share. Holders of shares of common stock have full voting rights, one vote for each share held of
record. Shareholders are entitled to receive dividends as may be declared by the Board out of funds legally available therefore
and share pro rata in any distributions to shareholders upon liquidation. Shareholders have no conversion, pre-emptive or subscription
rights. All outstanding shares of common stock are fully paid and non-assessable. As of September 30, 2018 and 2017, there were
100,952,569 and 90,284,916 shares of common stock issued and outstanding, respectively.

On
September 3, 2019, the Company’s Board of Directors unanimously approved the amendment of its Articles of Incorporation
to increase the total authorized capital stock from 185,000,000 common shares to 200,000,000 common shares. As of September 18,
2019, holders of a majority of the outstanding shares of voting capital stock executed written stockholder consents approving
this action and the Company amended its Articles of Incorporation through a filing of a Certificate of Amendment on October 11,
2019. As of September 30, 2019, there were 107,497,077 shares of common stock issued and outstanding.

NOTA
6 – SHAREHOLDERS’ EQUITY (CONTINUED)

Common
shares issued for cash

During
the year ended September 30, 2018, the Company received $177,000 from the sale of 1,614,286 shares of its common stock. In connection
with the sales, the Company issued warrants to the shareholders to purchase 3,228,572 shares of the Company’s common stock.
The warrants expire five years from the date of grant and have exercise prices of $0.15 and $0.18 per share.

During
the year ended September 30, 2019, the Company received $10,000 from the sale of 142,857 shares of its common stock. In connection
with the sale, the Company issued a warrant to the shareholder to purchase 284,714 shares of the Company’s common stock.
The warrant expires five years from the date of grant and has an exercise price of $0.15 per share.

Common
shares issued for services

During
the year ended September 30, 2018, the Company issued 770,000 shares of its common stock valued at $111,300 for services provided
by WCUI and PSI consultants. The shares were valued at the trading price of the common stock at the date of issuance and were
recorded as compensation expense during the year ended September 30, 2018.

During
the year ended September 30, 2019, the Company issued 1,277,143 shares of its common stock valued at $79,029 for services provided
by WCUI consultants. The shares were valued at the trading price of the common stock at the date of issuance and were recorded
as compensation expense during the year ended September 30, 2019.

Common
Shares Issued in Connection with the Settlement of an Equity Agreement

During
the year ended September 30, 2017, the Company completed a sale of common stock and warrants with a subscriber whereby the Company
sold to the subscriber 1,600,000 shares of common stock and warrants to acquire 1,600,000 shares of common at a price of $0.40
per share, for total purchase consideration of $400,000 ($0.25 per unit). The subscription agreement also included a Favored Nation
clause that in the event a subsequent private offering occurs at a price less than $.25 per share that was paid by the subscriber,
then the subscriber’s stock unit price shall be proportionately adjusted to the identical ration of 40% discount of the
market price in the date of the subscription agreement. Upon issuance of the instrument, no liability for the Favored Nation clause
was considered necessary as it was determined that ASC 480-10 did not apply as it is a conditional obligation embedded in a share.

During
the year ended September 2018, the Company sold 333,333 shares of common stock at $0.15 per share and a warrant to acquire 666,667
shares of common stock at $0.18 per share to an investor that triggered the Favored Nation clause. To avoid the issuance of any
future potential shares, the Company and the subscriber entered in an agreement on May 15, 2018, whereby the Company would issue
an additional 1,066,667 shares common stock to the subscriber, cancel the previously issued 1,600,000 warrants, and issue a new
warrant to acquire 5,334,334 shares of common stock at $.18 per share.

Per
account for the issuance, the Company determined that other than par value, no other value would be ascribed to the additional
1,066,667 shares of common stock that were issued and due under the Favored Nations clause for the reasons detailed above. Il
Company also determined that it should record the incremental difference of $433,000 between the fair value of the canceled warrant
of $185,000 and the fair value of new warrant of $618,000 at the date of the agreement. Given that no services were provided to
the Company, the difference in fair value of the warrants before and after the modification was treated as a deemed dividend.

Subsequent
to the above issuance, the Company and the shareholder entered into a settlement agreement that will eliminate the Favored Nation
clause. As such, in November 2018, the Company issued 296,534 shares and a warrant to acquire 770,987 shares of common stock at
$0.18 per share. The fair value of the shares issued was $17,792 and the fair value of the warrants was $38,935. As these values
were part of a settlement agreement, the total amount of $56,727 was recorded as a financing cost during the year ended September
30, 2018.

NOTA
6 – SHAREHOLDERS’ EQUITY (CONTINUED)

Stock
Options

On
December 22, 2010, effective retroactively as of June 30, 2010, the Company’s Board of Directors approved the adoption of
the “2010 Non-Qualified Stock Option Plan” (“2010 Option Plan”) by unanimous consent. The 2010 Option
Plan was initiated to encourage and enable officers, directors, consultants, advisors and key employees of the Company to acquire
and retain a proprietary interest in the Company by ownership of its common stock. A total of 7,500,000 of the authorized shares
of the Company’s common stock may be subject to, or issued pursuant to, the terms of the plan. Effective January 1, 2018,
the Board of Directors approved to increase the number of authorized shares of the Company’s common stock that may be subject
to, or issued pursuant to, the terms of the plan from 7,500,000 to 30,000,000.

Il
Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule
on a straight-line basis over the requisite service period for the entire award. Additionally, the Company’s policy is to
issue new shares of common stock to satisfy stock option exercises. The Company applied fair value accounting for all share based
payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing
model.

Grants
during Fiscal Year Ended September 30, 2018

Options
Granted in Accordance with Employment Agreements

During
the year ended September 30, 2018, the Company entered into employment agreements with four employees of SCI. Under the agreements,
the Company issued options to purchase a combined total of 2,800,000 shares of its common stock with a fair value of $396,308.
The options are exercisable over a term of five years, with exercise prices ranging from $0.10 to $0.19. The Company valued the
options using a Black-Scholes option pricing model. A combined total of 675,000 shares vested in equal amounts over a three-month
period, starting on January 1, 2018, with the remainder vesting in equal amounts over the following one year and two months.

Further,
beginning on January 1, 2018, they will be granted additional stock options to purchase up to an aggregate total of 275,000 shares
of the Company’s common stock each quarter. The options are exercisable over a five-year period, are issuable on the last
day of each quarter ending and vest immediately on the date of grant. All options accelerate and become fully vested upon the
sale or change of control of the Company.

During
the year ended September 30, 2019 and 2018, the Company recorded $44,275 and $271,804 of stock compensation, respectively, for
the value of the options, and as of September 30, 2019, no unvested compensation remained that will be amortized over the remaining
vesting period.

Other
Grants

During
the year ended September 30, 2018, the Company granted options to purchase 8,517,500 shares of its common stock to its officers,
directors and employees with a fair value of $1,004,450. The options have an exercise price of $0.14 per share and expire five
years from the date of grant. The shares will vest in various periods. The Company valued the options using a Black-Scholes option
pricing model.

During
the years ended September 30, 2019 and 2018, the Company recorded $256,650 and $340,699 of stock compensation, respectively, for
the value of the vested options, and as of September 30, 2019, unvested compensation of $330,333 remained that will be amortized
over the remaining vesting period.

Il
assumptions used for options granted during the year ended September 30, 2018 are as follows:

Exercise price		$	0.10 – 0.19
Expected dividends			–
Expected volatility			121.1% – 130.2	%
Risk free interest rate			2.01% – 2.85	%
Expected life of options			2.5

NOTA
6 – SHAREHOLDERS’ EQUITY (CONTINUED)

Stock
Options (Continued)

Grants
during Fiscal Year Ended September 30, 2019

During
the year ended September 30, 2019, the Company granted options to an employee to purchase an aggregate total of 250,000 shares
of its common stock with an aggregate fair value of $10,366. The options have exercise prices ranging from $0.03 to $0.06 per
share and expire five years from the date of grant. The shares vested equally each quarter beginning on December 31, 2018. The
Company valued the options using a Black-Scholes option pricing model. During the year ended September 30, 2019, the Company recorded
$10,366 of stock compensation for the value of the options, and as of September 30, 2019, no unvested compensation remained that
will be amortized over the remaining vesting period.

Il
assumptions used for options granted during the year ended September 30, 2019 are as follows:

Exercise price		$	0.03                                        – 0.06
Expected dividends			–
Expected volatility			126.8% – 144.0	%
Risk free interest rate			1.60% – 2.47	%
Expected life of options			2.5

Il
table below summarizes the Company’s stock option activities for the years ended September 30, 2019 and 2018:

		Number of Option Shares				Exercise Fascia di prezzo Per Share				Weighted Average Exercise Price				Fair Value at Date of Grant
Balance, September 30, 2017			6,822,500			$	0.10 – 2.00			$	0.51			$	1,865,628
Granted			11,317,500				0.10 – 0.19				0.14				1,379,127
Cancelled			(183,333	)			0.14				0.14				–
Exercised			–				–				–				–
Expired			(10,000	)			0.75				0.75				–
Balance, September 30, 2018			17,946,667			$	0.10 – 2.00			$	0.28			$	3,244,755
Granted			250,000				0.03 – 0.06				0.05				10,366
Cancelled			(646,429	)			0.14 – 0.19				0.17				–
Exercised			–				–				–				–
Expired			(2,312,500	)			0.13 – 0.40				0.37				–
Balance, September 30, 2019			15,237,738			$	0.03 – 2.00			$	0.27			$	3,255,121
Vested and exercisable, September 30, 2019			12,012,738			$	0.03 – 2.00			$	0.30			$	2,803,621
Unvested, September 30, 2019			3,225,000			$	0.14			$	0.14			$	451,500

There
was no aggregate intrinsic value for option shares outstanding at September 30, 2019.