SEC Filing | Viatris

Upjohn Inc.

Dated: August 11, 2020

/s/ MICHAEL GOETTLER

Michael Goettler

President (Principal Executive Officer)

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10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13

OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number

000-56114

UPJOHN INC.

(Exact name of registrant as specified in its charter)


Delaware		83-4364296

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

235 East 42

Street, New York, New York 10017

(Address of principal executive offices) (Zip Code)

(212)

733-2323

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered

None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act:

Large Accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer

☒ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act).

Yes ☒ No ☐

As of August

, 2020,

there were 100 outstanding shares of the registrant’s common stock, $0.01 par value per share.

The registrant meets the conditions set forth in General Instructions (H)(1)(a) and (b) of Form

10-Q

and therefore is filing this form with the reduced disclosure format permitted by Form

10-Q.

Table of Contents

TABLE OF CONTENTS


	Page

EXPLANATORY NOTE		3

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Statements of Operations for the three-month and six-month periods ended June 28, 2020, the three-month period ended June 30, 2019 and the period from February 14, 2019 (date of incorporation) to June 30, 2019		4

Condensed Consolidated Statements of Comprehensive Loss for the three-month and six-month periods ended June 28, 2020, the three-month period ended June 30, 2019 and the period from February 14, 2019 (date of incorporation) to June 30, 2019		5

Condensed Consolidated Balance Sheets as of June 28, 2020 and December 31, 2019		6

Condensed Consolidated Statements of Equity for the three-month and six-month periods ended June 28, 2020, the three-month period ended June 30, 2019 and the period from February 14, 2019 (date of incorporation) to June 30, 2019		7

Condensed Consolidated Statements of Cash Flows for the six-month period ended June 28, 2020 and the period from February 14, 2019 (date of incorporation) to June 30, 2019		8

Notes to Condensed Consolidated Financial Statements		9

Report of Independent Registered Public Accounting Firm		14

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk		17

Item 4.

Controls and Procedures		17

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings		17

Item 1A.

Risk Factors		17

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds		18

Item 3.

Defaults Upon Senior Securities		18

Item 4.

Mine Safety Disclosures		18

Item 5.

Other Information		18

Item 6.

Exhibits		18

Signature		20

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EXPLANATORY NOTE

On February 13, 2020, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form

S-4,

as amended (the “S-4 Registration Statement”) of Upjohn Inc. (the “Company” or “Upjohn”), to register shares of its common stock, par value $0.01 per share, that will be issued and distributed in connection with the series of agreements entered into by Pfizer Inc. (“Pfizer”), Upjohn, Mylan N.V. (“Mylan”) and certain of their affiliates to combine Pfizer’s global,

primarily off-patent branded

and generic established medicines business (the “Upjohn Business”) with Mylan in an

all-stock

Reverse Morris Trust transaction (the “Transaction”), creating a new global pharmaceutical company. On June 30, 2020, the SEC declared effective the Registration Statement on Form 10, which includes an information statement (the “Form 10 Registration Statement” and, together with the S-4 Registration Statement, the “Registration Statements”), relating to the planned distribution by Pfizer, on a pro rata basis (based on the number of shares held by holders of Pfizer common stock as of the record date), all of the Company common stock held by Pfizer to Pfizer stockholders as of the record date. On August 6, 2020, the Company filed the final information statement, dated August 6, 2020 (the “Information Statement”), which is attached to the Company’s Current Report on Form 8-K filed on August 6, 2020 as Exhibit 99.1. A detailed description of the Upjohn Inc. capital stock and the Transaction is included in the Registration Statements. Upjohn was formed to effect the Transaction. Effective as of the closing of the Transaction, Upjohn will be renamed “Viatris” and will operate both Mylan and the Upjohn Business.

In this Quarterly Report on Form

10-Q

for the quarterly period ended June 28, 2020, the Company is reporting its condensed consolidated balance sheet as of June 28, 2020, the related condensed consolidated statements of operations, comprehensive loss and equity for the three-month and six-month periods ended June 28, 2020, the three-month period ended June 30, 2019, and the period from February 14, 2019 (date of incorporation) to June 30, 2019, the related condensed consolidated statements of cash flows for the six-month period ended June 28, 2020 and the period from February 14, 2019 (date of incorporation) to June 30, 2019, and the related notes.

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

UPJOHN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



(millions of dollars, except common share and per common share data)	Three Months Ended June 28, 2020		Three Months Ended June 30, 2019		Six Months Ended June 28, 2020		Period From February 14, 2019 (Date of Incorporation) to June 30, 2019
Revenues	$	—	$	—	$	—	$	—
Operating expenses		—		—		—		—
Other (income)/deductions—net		1.2		—		1.2		—

Loss before benefit for taxes on income		(1.2)		—		(1.2)		—
Benefit for taxes on income		(0.3)		—		(0.3)		—

Net loss	$	(0.9)	$	—	$	(0.9)	$	—

Loss per common share—basic and diluted (a)	$	(9,071)	$	—	$	(9,071)	$	—

Weighted-average common shares—basic and diluted (a)		100		100		100		100

(a)

All common shares issued and outstanding were held by Pfizer Inc. (see

Note 1A. Organization and Basis of Presentation: Organization and Note 7. Equity)

Amounts may not add due to rounding.

See Notes to Condensed Consolidated Financial Statements, which are an integral part of these statements.

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UPJOHN INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)



(millions of dollars)	Three Months Ended June 28, 2020		Three Months Ended June 30, 2019		Six Months Ended June 28, 2020		Period From February 14, 2019 (Date of Incorporation) to June 30, 2019
Net loss	$	(0.9)	$	—	$	(0.9)	$	—

Other comprehensive income/(loss) before tax		—		—		—		—
Tax provision/(benefit) on other comprehensive income/(loss)		—		—		—		—

Other comprehensive income/(loss)		—		—		—		—

Comprehensive loss attributable to Upjohn Inc.	$	(0.9)	$	—	$	(0.9)	$	—

Amounts may not add due to rounding.

See Notes to Condensed Consolidated Financial Statements, which are an integral part of these statements.

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UPJOHN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



(millions of dollars, except common share and per common share data)		As of June 28, 2020			As of December 31, 2019

	(Unaudited)
Assets
Restricted short-term investments (a)	$	11,411.6		$	—
Other current assets		0.2			—

Total current assets		11,411.8			—

Total assets	$	11,411.8		$	—


Liabilities and Equity
Other current liabilities	$	27.8		$	—

Total current liabilities		27.8			—
Long-term debt		11,385.2			—

Total liabilities		11,413.0			—


Commitments and Contingencies

Common stock, $0.01 par value; 1,000 shares authorized; issued: 2020—100 shares; 2019—100 shares		—			—
Additional paid-in capital		(0.3	)		—
Due from shareholder		—			—
Retained earnings/(loss)		(0.9	)		—
Accumulated other comprehensive income/(loss)		—			—

Total Upjohn Inc. shareholder’s equity/(deficit)		(1.2	)		—

Total liabilities and equity	$	11,411.8		$	—

(a)

Represents proceeds from the Upjohn and Upjohn Finance B.V. debt issuances. For additional information, see

Note 5B. Financial Instruments: Long-Term Debt

Amounts may not add due to rounding.

See Notes to Condensed Consolidated Financial Statements, which are an integral part of these statements.

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UPJOHN INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)


	Common Stock
(millions of dollars, except common shares)		Shares		Par Value		Add’l Paid-In Capital		Due from Share- holder		Retained Earnings/ (Loss)		Accum. Other Comp. Income/ (Loss)		Upjohn Inc. Shareholder’s Equity/(Deficit)

Balance, March 29, 2020		100	$	—	$	—	$	—	$	—	$	—	$	—
Net loss										(0.9)				(0.9)
Other comprehensive income/(loss), net of tax												—		—
Net transfer—Pfizer (a)						(0.3)								(0.3)

Balance, June 28, 2020		100	$	—	$	(0.3)	$	—	$	(0.9)	$	—	$	(1.2)


	Common Stock
(millions of dollars, except common shares)		Shares		Par Value		Add’l Paid-In Capital		Due from Share- holder		Retained Earnings/ (Loss)		Accum. Other Comp. Income/ (Loss)		Upjohn Inc. Shareholder’s Equity/(Deficit)

Balance, March 31, 2019		100	$	—	$	—	$	—	$	—	$	—	$	—
Net loss										—				—
Other comprehensive income/(loss), net of tax												—		—
Net transfer—Pfizer						—								—

Balance, June 30, 2019		100	$	—	$	—	$	—	$	—	$	—	$	—


	Common Stock
(millions of dollars, except common shares)		Shares		Par Value		Add’l Paid-In Capital		Due from Share- holder		Retained Earnings/ (Loss)		Accum. Other Comp. Income/ (Loss)		Upjohn Inc. Shareholder’s Equity/(Deficit)

Balance, January 1, 2020		100	$	—	$	—	$	—	$	—	$	—	$	—
Net loss										(0.9)				(0.9)
Other comprehensive income/(loss), net of tax												—		—
Net transfer—Pfizer (a)						(0.3)								(0.3)

Balance, June 28, 2020		100	$	—	$	(0.3)	$	—		(0.9)	$	—	$	(1.2)


	Common Stock
(millions of dollars, except common shares)		Shares		Par Value		Add’l Paid-In Capital		Due from Share- holder		Retained Earnings/ (Loss)		Accum. Other Comp. Income/ (Loss)		Upjohn Inc. Shareholder’s Equity/(Deficit)

Initial capitalization, February 14, 2019 (date of incorporation)		100	$	—	$	—	$	—	$	—	$	—	$	—
Net loss										—				—
Other comprehensive income/(loss), net of tax												—		—
Net transfer—Pfizer						—								—

Balance, June 30, 2019		100	$	—	$	—	$	—	$	—	$	—	$	—

(a)	See Note 4. Tax Matters .

Amounts may not add due to rounding.

See Notes to Condensed Consolidated Financial Statements, which are an integral part of these statements.

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UPJOHN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


(millions of dollars)		Six Months Ended June 28, 2020		Period From February 14, 2019 (Date of Incorporation) to June 30, 2019

Operating Activities
Net loss	$	(0.9)	$	—
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of bond discount and issuance costs		0.2
Other adjustments, net		(4.2)
Other changes in assets and liabilities		4.9		—

Net cash provided by operating activities		—		—


Investing Activities
Net (purchases of)/proceeds from redemptions/sales of short-term investment s (a)		(11,411.6)		—

Net cash used in investing activities		(11,411.6)		—


Financing Activities
Proceeds from issuance of long-term debt (a)		11,478.2		—
Long-term debt issuance costs paid (a)		(66.6 )		—

Net cash provided by financing activities		11,411.6		—

Effect of exchange-rate changes on cash and cash equivalents		—		—

Net increase/(decrease) in cash and cash equivalents		—		—
Cash and cash equivalents, beginning		—		—

Cash and cash equivalents, end	$	—	$	—


Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes	$	—	$	—
Interest		—		—

(a)

Represents $11.4 billion of proceeds from the long-term debt issuances in the second quarter of 2020, which are included in

Restricted short-term investments

in the condensed consolidated balance sheet. For additional information, see

Notes 5A. Financial Instruments: Fair Value Measurements

and

5B. Financial Instruments: Long-Term Debt

Amounts may not add due to rounding.

See Notes to Condensed Consolidated Financial Statements, which are an integral part of these statements.

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Table of Contents

UPJOHN

INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Organization and Basis of Presentation

A. Organization

Upjohn Inc. (the “Company” or “Upjohn”), a Delaware corporation, was formed on February 14, 2019, and is currently a wholly-owned subsidiary of Pfizer Inc. (“Pfizer”). The Company has three wholly-owned subsidiaries: (i) Utah Acquisition Holdco Inc., a Delaware corporation formed on July 25, 2019; (ii) Utah Acquisition Sub Inc., a Delaware corporation formed on July 25, 2019; and (iii) Upjohn Finance B.V. (“Finco”), a Netherlands private limited liability company formed on May 8, 2020. The Company and its subsidiaries have not commenced operations, have no significant operating assets or liabilities and from February 14, 2019, its date of incorporation, through June 28, 2020 have not conducted any material activities other than those incidental to its formation and those undertaken in connection with the definitive agreement to combine the Company with Mylan N.V. (“Mylan”), such as the financing activities described in

Note 5

On February 13, 2020, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form

S-4,

as amended (the “S-4 Registration Statement”) of the Company to register shares of its common stock, par value

0.01

per share, that will be issued and distributed in connection with a series of agreements entered into by Pfizer, the Company, Mylan and certain of their affiliates to combine Pfizer’s global,

primarily off-patent branded

and generic established medicines business (the “Upjohn Business”) with Mylan in an

all-stock

Reverse Morris Trust transaction (the “Transaction”), creating a new global pharmaceutical company. On June 30, 2020, the SEC declared effective the Registration Statement on Form 10, which includes an information statement (the “Form 10 Registration Statement” and, together with the S-4 Registration Statement, the “Registration Statements”), relating to the planned Distribution (as defined below) by Pfizer, on a pro rata basis (based on the number of shares held by holders of Pfizer common stock as of the record date), all of the Company common stock held by Pfizer to Pfizer stockholders as of the record date. On August 6, 2020, the Company filed the final information statement, dated August 6, 2020 (the “Information Statement”), which is attached to the Company’s Current Report on Form 8-K filed on August 6, 2020 as Exhibit 99.1.

On July 29, 2019, Pfizer announced it had entered into a definitive agreement to combine the Company with Mylan. Under the terms of the Transaction, Pfizer will contribute the Upjohn Business, a business unit of Pfizer, to the Company and distribute its ownership interest in the Company to Pfizer stockholders via either a

spin-off

or a

split-off

(the “Distribution”). Pfizer intends to effect the Distribution by way of a

spin-off.

Immediately after the Distribution, the Company and Mylan will engage in a strategic combination transaction in which Mylan shareholders will receive shares of the Company’s common stock (the “Combination”). Pfizer stockholders would own 57% of the combined company and former Mylan shareholders would own 43%

of the combined company on a fully diluted basis. The Transaction is generally expected to be tax free to Pfizer and Pfizer stockholders. The name of the new company to be formed by the planned combination of the Upjohn Business and Mylan will be “Viatris.” The voting common stock of the Company will be listed for trading on the NASDAQ under the symbol “VTRS.” The Company will make a cash payment to Pfizer equal to

billion as partial consideration for the contribution of the Upjohn Business from Pfizer to the Company. The Transaction was approved by Mylan’s shareholders in June 2020 and is anticipated to close in the fourth quarter of 2020, subject to customary closing conditions, including receipt of the remaining required regulatory approvals.

B. Basis of Presentation

The Company prepared the accompanying condensed consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) can be condensed or omitted.

The financial information included in the Company’s condensed consolidated financial statements is its condensed consolidated balance sheet as of June 28, 2020, the related condensed consolidated statements of operations, comprehensive loss and equity for the three-month and six-month periods ended June 28, 2020, the three-month period ended June 30, 2019, and the period from February 14, 2019 (date of incorporation) to June 30, 2019, and the related condensed consolidated statements of cash flows for the six-month period ended June 28, 2020 and the period from February 14, 2019 (date of incorporation) to June 30, 2019.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

The Company is responsible for the unaudited financial statements included in this Quarterly Report on Form

10-Q.

The interim financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periods presented. The information included in this Quarterly Report on Form

10-Q

should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s 2019 Special Financial Report on Form

10-K.

Certain amounts in the condensed consolidated financial statements and associated notes may not add due to rounding.

Note 2. Significant Accounting Policies

A. Estimates and Assumptions

In preparing the condensed consolidated financial statements, the Company uses certain estimates and assumptions that affect reported amounts and disclosures. These estimates and underlying assumptions can impact all elements of the Company’s financial

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UPJOHN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

statements. For example, in the condensed consolidated statements of operations, estimates are used when allocating bond issuance costs in the form of amortization and determining provisions for taxes on income. In the condensed consolidated balance sheets, estimates are used in determining the valuation of assets, such as investments, which also impact the condensed consolidated statements of operations.

The Company’s estimates are often based on complex judgments and assumptions that it believes to be reasonable, but that can be inherently uncertain and unpredictable. If the Company’s estimates and assumptions are not representative of actual outcomes, its results could be materially impacted.

As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. The Company is subject to risks and uncertainties that may cause actual results to differ from estimated amounts. The Company regularly evaluates its estimates and assumptions using historical experience and expectations about the future. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change.

B. Fair Value

The Company is often required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value when accounting for and reporting of certain financial instruments, such as short-term investments. The Company estimates fair value using an exit price approach, which requires, among other things, that it determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of

non-financial

assets and, for liabilities, assuming that the risk of

non-performance

will be the same before and after the transfer.

When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following techniques:

•

Income approach, which is based on the present value of a future stream of net cash flows.

•

Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.

•

Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence.

The Company’s fair value methodologies depend on the following types of inputs:

•

Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).

•

Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs).

•

Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).

A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see

Note 2A.

C. Foreign Currency Translation

The Company and Finco are U.S. dollar functional entities. The effects of converting

non-functional

currency monetary assets and liabilities into the functional currency are recorded in

Other (income)/deductions—net

, see

Note 3

D. Investments

The Company’s short-term investments are comprised of equity securities with readily determinable fair values, which include money market funds primarily invested in U.S. Treasury and government debt. Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in

Other (income)/deductions—net.

Realized gains or losses on sales of investments are determined by using the specific identification cost method. The Company regularly evaluates its financial assets for impairment.

A single estimate of fair value and impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see

Note 2A.

E. Tax

The Company did not generally file separate tax returns, as it was generally included in the tax grouping of other Pfizer entities within the respective entity’s tax jurisdiction. The income tax benefit included in these condensed consolidated financial statements has been calculated using the separate return basis, as if the Company filed a separate tax return.

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UPJOHN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 3. Other (Income)/Deductions—Net

The following table provides the components of

Other (income)/deductions––net



(millions of dollars)	Three Months Ended June 28, 2020		Three Months Ended June 30, 2019		Six Months Ended June 28, 2020		Period From February 14, 2019 (Date of Incorporation) to June 30, 2019
Interest income (a)	$	(0.2)	$	—	$	(0.2)	$	—
Interest expense (b)		5.3		—		5.3		—

Net interest expense		5.1		—		5.1		—
Foreign exchange (gain)/loss, net (c)		(3.9)		—		(3.9)		—

Other (income)/deductions––net	$	1.2	$	—	$	1.2	$	—

(a)	Represents interest income earned on $11.4 billion of proceeds from the debt issuances completed in June 2020 (see Note 5B ) that are invested in money market funds and included in Restricted short-term investments (see Note 5A ) in the condensed consolidated balance sheet as of June 28, 2020.

(b)	Represents interest expense associated with the $11.4 billion of senior unsecured notes issued in June 2020, which includes the stated interest expense on the notes and amortization of bond discount and issuance costs (see Note 5B ).

(c)	Represents net currency exchange gains related to the Euro denominated senior unsecured notes issued in June 2020 (see Note 5B) .

Note 4. Tax Matters

In the second quarter of 2020, the Company recorded an income tax benefit of approximately $279 thousand, which reflects the jurisdictional mix of

income

and associated tax rates related to the debt issuances completed in June 2020

(see

Note 2E

and

Note 5B

This amount is presented as

Net transfer—Pfizer

in the condensed consolidated statements of equity to reflect the benefit Pfizer will receive from the losses generated by the Company.

Note 5. Financial Instruments

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the financial assets measured at fair value using a market approach on a recurring basis by balance sheet categories and fair value hierarchy level as defined in

Note 2B



	June 28, 2020				December 31, 2019

(millions of dollars)	Total		Level 2		Total		Level 2

Financial assets measured at fair value on a recurring basis:
Short-term investments
Classified as equity securities with readily determinable fair values:
Money market funds (a)	$	11,411.6	$	11,411.6	$	—	$	—

Total short-term investments	$	11,411.6	$	11,411.6	$	—	$	—

(a)

As of June 28, 2020, $11.4 billion of proceeds from the debt issuances completed in June 2020 (see

Note 5B

) are invested in money market funds and are included in

Restricted short-term investments

in the condensed consolidated balance sheet. The money market funds are primarily invested in U.S. Treasury and government debt with readily determinable fair values.

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values using a market approach:



	June 28, 2020						December 31, 2019

(millions of dollars)	Carrying Value		Estimated Fair Value				Carrying Value		Estimated Fair Value

			Total		Level 2				Total		Level 2

Financial Liabilities:
Long-term debt	$	11,385.2	$	12,848.2	$	12,848.2	$	—	$	—	$	—

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UPJOHN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

B. Long-Term Debt

In connection with the Transaction, in June 2020, Upjohn and Finco completed privately placed debt offerings of $7.45 billion and €3.60 billion aggregate principal amount of senior unsecured notes, respectively (the “Upjohn Debt Transactions”), and entered into other financing arrangements described below. The following table provides information about the senior unsecured notes issued in June 2020:


			Principal
(millions of dollars/euros)	Maturity Date	Issue Currency	As of June 28, 2020
Upjohn Inc. (a)
1.125% U.S. dollar notes	June 22, 2022	U.S. dollar	$	1,000
1.650% U.S. dollar notes	June 22, 2025	U.S. dollar		750
2.300% U.S. dollar notes	June 22, 2027	U.S. dollar		750
2.700% U.S. dollar notes	June 22, 2030	U.S. dollar		1,450
3.850% U.S. dollar notes	June 22, 2040	U.S. dollar		1,500
4.000% U.S. dollar notes	June 22, 2050	U.S. dollar		2,000

Total U.S. dollar notes issued in the second quarter of 2020			$	7,450


Upjohn Finance B.V. (a)
0.816% Euro notes	June 23, 2022	Euro	€	750
1.023% Euro notes	June 23, 2024	Euro		750
1.362% Euro notes	June 23, 2027	Euro		850
1.908% Euro notes	June 23, 2032	Euro		1,250

Total Euro notes issued in the second quarter of 2020			€	3,600

(a)

The notes may be redeemed by the Company at any time, in whole, or in part, at varying redemption prices plus accrued and unpaid interest. The weighted-average effective interest rates at issuance were 2.95% for the $7.45 billion notes and 1.37% for the €3.60 billion notes. If the Transaction does not close on or prior to February 1, 2021, or if, prior to such date, Upjohn Inc. and Mylan notify the trustee for the U.S. dollar notes or euro notes, as applicable, that (i) the business combination agreement entered into by Pfizer, the Company, Mylan and certain of their affiliates to combine the Upjohn Business with Mylan is terminated, or (ii) the Transaction will not otherwise be pursued, the notes must be redeemed at redemption prices equal to 101% of their respective principal amounts, plus accrued and unpaid interest.

The senior unsecured notes were offered in connection with the Transaction. The U.S. dollar notes were issued at a discount of approximately

$15.3

million, which will be amortized as interest expense over the life of the U.S. dollar notes. The Company incurred issuance costs of approximately

$89.3 million associated with the U.S. dollar notes and the euro notes, which will be amortized as interest expense over the life of the notes. The unamortized discount and issuance costs are presented on the condensed consolidated balance sheet as a deduction to the carrying value of

Long-term debt

. Included in

Other current liabilities

on the condensed consolidated balance sheet as of June 28, 2020 are amounts due for bond issuance costs of approximately $22.7 million (see

Note 6

The euro notes are exposed to changes in foreign exchange rates and there are no derivatives in place to mitigate that risk. The proceeds of the euro notes were converted to U.S. dollars at the time of issuance.

In June 2020, the Company (i) entered into a $600 million delayed draw term loan agreement and (ii) entered into a revolving credit facility agreement for up to $4 billion, $1.5 billion of which will be available in a single draw at or around the closing of the Combination for the purpose of funding the $12 billion cash payment by the Company to Pfizer as partial consideration for Pfizer’s contribution of the Upjohn Business to the Company (the “Cash Distribution”). The Company intends to use the net proceeds from the Upjohn Debt Transactions, together with the proceeds from the $600 million term loan agreement and the revolving credit agreement to fund in full the Cash Distribution and related transaction fees and expenses. The Company intends to use any remaining balance of net proceeds from these financing transactions after the Cash Distribution for general corporate purposes.

The commitments under the Company’s senior unsecured $12 billion bridge facility were fully terminated upon completion of the Upjohn Debt Transactions on June 23, 2020.

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UPJOHN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table provides the components of the Company’s senior unsecured long-term debt, including the weighted-average annual stated interest rate by maturity:


(millions of dollars)	As of June 28, 2020
Notes due 2022 (0.984%)	$	1,841.6
Notes due 2024 (1.023%)		841.6
Notes due 2025 (1.650%)		750.0
Notes due 2027 (1.775%)		1,703.8
Notes due 2030 (2.700%)		1,450.0
Notes due 2032 (1.908%)		1,402.6
Notes due 2040 (3.850%)		1,500.0
Notes due 2050 (4.000%)		2,000.0

Total long-term debt, principal amount		11,489.5
Net unamortized discounts and debt issuance costs		(104.3	)

Total long-term debt, carried at historical proceeds, as adjusted	$	11,385.2

Note 6. Other Assets and Liabilities

As of June 28, 2020,

Other current assets

consist of an accrued interest receivable of $163 thousand for income earned on the $11.4 billion of proceeds from the debt issuances completed in June 2020 (see

Note 5B

) that are invested in money market funds and included in

Restricted short-term investments

(see

Note 5A

)

in the condensed consolidated balance sheet as of June 28, 2020.

As of June 28, 2020,

Other current liabilities

consist of amounts due for bond issuance costs of approximately $22.7 million and accrued interest payable of approximately $5.1

million, both of which are related to the Upjohn Debt Transactions (see

Note 5B

Note 7. Equity

As of June 28, 2020 and December 31, 2019, the Company is authorized to issue 1,000 shares of common stock, par value $0.01 per share. As of June 28, 2020 and December 31, 2019, there were 100 shares of common stock, par value of $0.01 per share, of the Company issued and outstanding. All such issued and outstanding shares of common stock were held by Pfizer.

Due from shareholder

includes a receivable from Pfizer

totaling

one U.S. dollar in connection with the issuance of the Company’s common stock.

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Report of Independent Registered Public Accounting Firm

To the Stockholder and Board of Directors

Upjohn Inc.:

Results of Review of Interim Financial Information

We have reviewed the condensed consolidated balance sheet of Upjohn Inc. and subsidiaries (the Company) as of June 28, 2020, the related condensed consolidated statements of operations, comprehensive loss and equity for the three-month and

six-month

periods ended June 28, 2020, the three-month period ended June 30, 2019, and the period from February 14, 2019 (date of incorporation) to June 30, 2019, the related condensed consolidated statements of cash flows for the

six-month

period ended June 28, 2020 and the period from February 14, 2019 (date of incorporation) to June 30, 2019, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of income, comprehensive income, equity, and cash flows for the period from February 14, 2019 (date of incorporation) to December 31, 2019 (not presented herein); and in our report dated May 7, 2020, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the 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.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

KPMG LLP

New York, New York

August 11, 2020

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview of Upjohn Inc.

Upjohn Inc. (the “Company” or “Upjohn”), a Delaware corporation, was formed on February 14, 2019, and is currently a wholly-owned subsidiary of Pfizer Inc. (“Pfizer”). On February 13, 2020, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form S-4, as amended (the “S-4 Registration Statement”) of the Company to register shares of its common stock, par value $0.01 per share, that will be issued and distributed in connection with a series of agreements entered into by Pfizer, the Company, Mylan N.V. (“Mylan”) and certain of their affiliates to combine Pfizer’s global, primarily off-patent branded and generic established medicines business (the “Upjohn Business”) with Mylan in an all-stock Reverse Morris Trust transaction (the “Transaction”), creating a new global pharmaceutical company. On June 30, 2020, the SEC declared effective the Registration Statement on Form 10, which includes an information statement (the “Form 10 Registration Statement” and, together with the S-4 Registration Statement, the “Registration Statements”), relating to the planned Distribution (as defined below). On August 6, 2020, the Company filed the final information statement, dated August 6, 2020 (the “Information Statement”), which is attached to the Company’s Current Report on Form 8-K filed on August 6, 2020 as Exhibit 99.1.

The Company has not commenced operations, has no significant operating assets or liabilities and from February 14, 2019, its date of incorporation, through June 28, 2020 has not conducted any material activities other than those incidental to its formation and those undertaken in connection with the definitive agreement to combine the Company with Mylan, such as financing activities.

On July 29, 2019, Pfizer, Upjohn, Mylan and certain of their affiliates entered into a series of agreements to combine the Upjohn Business with Mylan in an

all-stock

Reverse Morris Trust transaction, creating a new global pharmaceutical company. Under the terms of the Transaction, Pfizer will contribute the Upjohn Business to the Company and distribute its ownership interest in Upjohn to Pfizer stockholders via either a

spin-off

or a

split-off

(the “Distribution”) and, immediately thereafter, Upjohn will be combined with Mylan (the “Combination”). Pfizer intends to effect the Distribution by way of a

spin-off.

Pfizer stockholders would own 57% of the combined company and former Mylan shareholders would own 43% of the combined company on a fully diluted basis. The Transaction is generally expected to be tax free to Pfizer and Pfizer stockholders. The Company will make a cash payment to Pfizer equal to $12 billion as partial consideration for the contribution of the Upjohn Business from Pfizer to the Company (the “Cash Distribution”). The Transaction was approved by Mylan’s shareholders in June 2020 and is anticipated to close in the fourth quarter of 2020, subject to customary closing conditions, including receipt of the remaining required regulatory approvals. In connection with the Transaction, in June 2020, Upjohn and Upjohn Finance B.V. (“Finco”) completed privately placed debt offerings of $7.45 billion and €3.60 billion aggregate principal amount of senior unsecured notes, respectively (the “Upjohn Debt Transactions”), and entered into other financing arrangements. See the “Analysis of Financial Condition, Liquidity and Capital Resources” section below for more information about the completed financing activities. For more information regarding the Transaction, see the Registration Statements.

Analysis of Financial Condition, Liquidity and Capital Resources

Selected Measures of Liquidity and Capital Resources

The following table provides certain relevant measures of liquidity and capital resources of the Company:



(millions of dollars)	June 28, 2020		December 31, 2019

Selected financial assets:

Restricted short-term investments (a)	$	11,411.6	$	—

Debt:
Long-ter m debt (a)	$	11,385.2	$	—

Selected net financial assets	$	26.2	$	—

(a)

As of June 28, 2020, $11.4 billion of proceeds from the Upjohn Debt Transactions (see Notes to Condensed Consolidated Financial Statements—

Note 5B. Financial Instruments: Long-Term Debt

) are invested in money market funds and are included in

Restricted short-term investments

in the condensed consolidated balance sheet.

In June 2020, in connection with the Transaction, the Company (i) incurred $11.4 billion of debt in the Upjohn Debt Transactions, (ii) entered into a $600 million delayed draw term loan agreement and (iii) entered into a revolving credit facility agreement for up to $4 billion, $1.5 billion of which will be available in a single draw at or around the closing of the Combination for the purpose of funding the Cash Distribution. The Company intends to use the net proceeds from the Upjohn Debt Transactions, together with the proceeds from the $600 million term loan agreement and the revolving credit agreement to fund in full the Cash Distribution and related transaction fees and expenses. The Company intends to use any remaining balance of net proceeds from these financing transactions after the Cash Distribution for general corporate purposes. In the interim, the $11.4 billion of proceeds of the Upjohn Debt Transactions are classified as

Restricted short-term investments

in the condensed consolidated balance sheet as of June 28, 2020, pursuant to the terms of the transactions agreements.

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The commitments under the Company’s senior unsecured $12 billion bridge facility were fully terminated upon completion of the Upjohn Debt Transactions on June 23, 2020.

The U.S. dollar notes are senior unsecured obligations of the Company. The euro notes are senior unsecured obligations of Finco. The U.S. dollar notes and euro notes are initially guaranteed on a senior unsecured basis by Pfizer. The guarantee by Pfizer will be automatically and unconditionally terminated and released without the consent of the holders of the notes upon the consummation of the Distribution. The Company has guaranteed the notes issued by Finco, and the Company will remain a guarantor of such notes following the Distribution. Following the Distribution and the Combination, the Company and Finco, as applicable, will remain the obligor with respect to such notes. Upon the consummation of the Combination, the Mylan entities (which will be subsidiaries of the Company following the Combination) that are issuers or guarantors of the outstanding senior unsecured notes issued by Mylan or Mylan Inc. will become guarantors of the U.S. dollar notes and euro notes, substantially concurrent with the Company’s becoming a guarantor of the existing Mylan notes. If the Transaction does not close on or prior to February 1, 2021, or if, prior to such date, the Company and Mylan notify the trustee for the U.S. dollar notes or euro notes, as applicable, that (i) the business combination agreement entered into by Pfizer, the Company, Mylan and certain of their affiliates to combine the Upjohn Business with Mylan is terminated, or (ii) the Transaction will not otherwise be pursued, the notes must be redeemed at redemption prices equal to 101% of their respective principal amounts, plus accrued and unpaid interest.

For additional information regarding the Upjohn Debt Transactions and other financing arrangements of the Company, see Notes to Condensed Consolidated Financial Statements––

Note 5B. Financial Instruments: Long-Term Debt

In connection with its formation on February 14, 2019, the Company’s Board of Directors authorized the Company to issue 100 shares of the Company’s common stock to Pfizer for a total price of one U.S. dollar.

Contractual Obligations

Payments due under contractual obligations as of June 28, 2020, mature as follows:


	Years
(millions of dollars)	Total		2020		2021		2022-2023		2024-2025		Thereafter
Long-term debt (a)	$	11,385.2	$	—	$	—	$	1,835.2	$	1,581.2	$	7,968.8
Interest payments on long-term debt obligations (b)		4,597.6		108.9		296.9		514.9		464.4		3,212.5

(a)	Long-term debt consists of senior unsecured notes, carried at historical proceeds, as adjusted (see Notes to Condensed Consolidated Financial Statements— Note 5B. Financial Instruments: Long-Term Debt ).

(b)

The Company’s calculations of expected interest payments incorporate only current period assumptions for interest rates and foreign currency translation rates (see Notes to Condensed Consolidated Financial Statements—

Note 5B. Financial Instruments: Long-Term Debt

) and assume that interest is accrued through the maturity date or expiration of the related instrument.

Forward-Looking Information and Factors That May Affect Future Results

This report and other written or oral statements that the Company makes from time to time contain forward-looking statements. Such forward-looking statements involve substantial risks and uncertainties. The Company has tried, wherever possible, to identify such statements by using words such as “will,” “may,” “could,” “should,” “would,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “potential,” “intend,” “continue,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” “aim,” “seek” and other words and terms of similar meaning or by using future dates in connection with any discussion of, among other things, the Company’s anticipated operating and financial performance, business plans and prospects, expectations for its products, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, government regulation, the ability to successfully capitalize on growth opportunities or prospects, manufacturing and product supply and the Company’s expectations regarding the impact of a novel disease caused by a strain of coronavirus on its business and operations. In particular, these include statements relating to future actions, including, among others, the expected timing, benefits, charges and/or costs in connection with the pending combination of the Upjohn Business with Mylan to create a new global pharmaceutical company, Viatris, and the Company’s anticipated liquidity position, the anticipated costs and savings from certain initiatives, and the expected payments to the unfunded

(non-qualified)

pension and postretirement plans and expected funding obligations.

The Company cannot guarantee that any forward-looking statement will be realized. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements, and are cautioned not to put undue reliance on forward-looking statements.

The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. You are advised, however, to consult any further disclosures the Company makes on related subjects.

You should read and consider the risk factors associated with the Upjohn Business because these risk factors may affect the operations and financial results of the new combined company and the Company’s common stock following the closing of the Transaction. A description of the risks and uncertainties for the Upjohn Business, Mylan and the combined company may be found in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the Form S-4 Registration Statement, which was declared effective on February 13, 2020, the Form 10 Registration Statement, which was declared effective on June 30, 2020, and the Information Statement, all of which are on file with the SEC. Additional discussion regarding certain risks and uncertainties described above is included under the heading entitled “Risk Factors” in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form

10-Q.

The Company notes these factors for investors as permitted by the

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Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the period covered by this report, the Company did not conduct any material operating activities and therefore did not incur any significant interest rate risk, foreign currency exchange rate risk, commodity price risk or other relevant market risks except that the Company’s senior unsecured euro-denominated notes are exposed to changes in foreign exchange rates and there are currently no derivatives in place to mitigate that risk. Borrowings under the Upjohn Debt Transactions are on a long-term, fixed-rate basis. The Company’s restricted short-term investments consist of high-quality, highly liquid money market funds primarily invested in U.S. Treasury and government debt. For information about the financing arrangements undertaken in connection with the definitive agreement to combine the Company with Mylan, see “Analysis of Financial Condition, Liquidity and Capital Resources” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form

10-Q.

Item 4. Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules

13a-15(e)

and

15d-15(e)

under the Exchange Act). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in the Company’s periodic reports filed with the SEC.

During the Company’s most recent fiscal quarter, there has not been any change in its internal control over financial reporting (as such term is defined in Rules

13a-15(f)

and

15d-15(f)

under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

During the period covered by this report, the Company did not conduct any material activities other than those related to its formation and the matters contemplated by the Transaction. Therefore, the Company did not incur any significant risk. You should also read and consider the risk factors associated with the Upjohn Business because these risk factors may affect the operations and financial results of the new combined company and the Company’s common stock following the closing of the Transaction. The Company refers to the “Forward-Looking Information and Factors That May Affect Future Results” section of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form

10-Q

and to the description of the risks and uncertainties for the Upjohn Business, Mylan and the combined company that may be found in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the S-4 Registration Statement, which was declared effective on February 13, 2020, the Form 10 Registration Statement, which was declared effective on June 30, 2020, and the Information Statement, all of which are on file with the SEC.

COVID-19

Pandemic.

In December 2019, illnesses associated with a novel disease caused by a strain of coronavirus

(“COVID-19”)

were reported and the virus has since caused widespread and significant disruptions to daily life and economies across geographies. The World Health Organization has classified the outbreak as a pandemic.

The COVID-19 pandemic presents a number of risks and challenges for the Company and the Upjohn Business, including, among others, potential delays or disruptions related to regulatory approvals in connection with the anticipated combination of the Upjohn Business with Mylan. For the Upjohn Business that is to be contributed to the Company under the terms of the Transaction, its business, operations, financial condition and results have been and may continue to be impacted by the COVID-19 pandemic to varying degrees, primarily during the second quarter of 2020. The Company currently anticipates the Upjohn Business will experience an ongoing, gradual global recovery from the first-half 2020 macroeconomic and healthcare impacts of the COVID-19 pandemic. The pandemic continues to present a number of risks and challenges for the Upjohn Business, including, among others, impacts due to travel limitations, social distancing and government-mandated work-from-home or shelter-in-place orders; potential manufacturing disruptions and delays and supply chain interruptions, including challenges related to reliance on third-party suppliers; decreased product demand, including due to reduced numbers of in-person meetings with prescribers, increased unemployment, fewer patient visits with physicians, resulting in fewer new prescriptions or refills of existing prescriptions; costs associated with the COVID-19 pandemic, including challenges presented by reallocating human capital, manufacturing and other resources to assist in responding to the pandemic without disruption to the Upjohn Business’s operations and protocols intended to reduce the risk of transmission;

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potential interruptions or delays in the operations of certain regulatory authorities; potential increased cyber incidents such as phishing, social engineering and malware attacks; and government or regulatory actions to contain the virus or control the supply of medicines. Further, the COVID-19 pandemic, and the volatile global economic conditions stemming from the pandemic, could precipitate or amplify the other risk factors that are identified in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the Company’s S-4 Registration Statement, Form 10 Registration Statement and Information Statement.

The Company is continuing to monitor the latest developments regarding the COVID-19 pandemic on the Upjohn Business and its operations, financial condition and results, and the Upjohn Business has made certain assumptions regarding the pandemic for purposes of its operational planning and financial projections, including assumptions regarding the duration and severity of the pandemic and the global macroeconomic impact of the pandemic.

Despite careful tracking and planning, however, the Company is unable to accurately predict the extent of the impact of the pandemic on the Upjohn Business and its operations, financial condition and results due to the uncertainty of future developments. In particular, the Company believes the ultimate impact on the Upjohn Business’s business, operations and financial condition and results will be affected by the speed and extent of the continued spread of the coronavirus globally, the duration of the pandemic, new information that may emerge concerning the severity and incidence of COVID-19, the safety, efficacy and availability of a vaccine and treatments for COVID-19, the global macroeconomic impact of the pandemic and governmental or regulatory actions to contain the virus or control supply of medicines. The pandemic may also affect the Upjohn Business’s business, operations or financial condition and results in a manner that is not presently known to the Upjohn Business or that the Upjohn Business currently does not consider to present significant risks.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits


2.1		Amendment No. 1, dated as of May 29, 2020, to the Business Combination Agreement, dated as of July 29, 2019, by and among Pfizer Inc., Upjohn Inc., Utah Acquisition Sub Inc., Mylan N.V., Mylan I B.V. and Mylan II B.V. is incorporated by reference from our Current Report on Form 8-K filed on June 2, 2020 (File No. 001- 56114).*

2.2		Amendment No. 2, dated as of May 29, 2020, to the Separation and Distribution Agreement, dated as of July 29, 2019, by and between Pfizer Inc. and Upjohn Inc. is incorporated by reference from our Current Report on Form 8-K filed on June 2, 2020 (File No. 001- 56114).*

4.1		Indenture, dated as of June 22, 2020, between Upjohn Inc., as issuer, and The Bank of New York Mellon, as trustee is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.2		Form of 1.125% U.S. Dollar Note Due 2022 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.3		Form of 1.650% U.S. Dollar Note Due 2025 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.4		Form of 2.300% U.S. Dollar Note Due 2027 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.5		Form of 2.700% U.S. Dollar Note Due 2030 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

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4.6		Form of 3.850% U.S. Dollar Note Due 2040 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.7		Form of 4.000% U.S. Dollar Note Due 2050 (included in Exhibit 4.1) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.8		Registration Rights Agreement, dated as of June 22, 2020, by and between Upjohn Inc. and Goldman Sachs & Co. LLC, BofA Securities, Inc., Citigroup Global Markets Inc., Morgan Stanley and Co. LLC, and Mizuho Securities USA LLC, as representatives of the several initial purchasers of the U.S. Dollar Notes is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.9		Indenture, dated as of June 23, 2020, among Upjohn Finance B.V., as issuer, Upjohn Inc., as guarantor and Citibank, N.A., London Branch, as trustee, transfer agent, paying agent and registrar is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.10		Form of 0.816% Euro Note Due 2022 (included in Exhibit 4.9) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.11		Form of 1.023% Euro Note Due 2024 (included in Exhibit 4.9) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.12		Form of 1.362% Euro Note Due 2027 (included in Exhibit 4.9) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

4.13		Form of 1.908% Euro Note Due 2032 (included in Exhibit 4.9) is incorporated by reference from our Current Report on Form 8-K filed on June 26, 2020 (File No. 001-56114).

10.1		Revolving Credit Agreement, dated as of June 16, 2020, among Upjohn, the guarantors from time to time party thereto, the lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent is incorporated by reference from our Current Report on Form 8-K filed on June 17, 2020 (File No. 001-56114)*.

10.2		Delayed Draw Term Loan Credit Agreement, dated as of June 16, 2020, among Upjohn, the guarantors from time to time party thereto, the lenders from time to time party thereto and MUFG Bank, Ltd., as administrative agent is incorporated by reference from our Current Report on Form 8-K filed on June 17, 2020 (File No. 001-56114)*.

31.1		Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification by the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101:

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Document

Exhibit 104		Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Annexes, schedules and/or exhibits have been omitted pursuant to Item 601

of Regulation S-K.

The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.

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SIGNATURE

Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.

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EX-31.1

EXHIBIT 31.1

Certification by the Principal Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael Goettler, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Upjohn Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2020

/s/ MICHAEL GOETTLER

Michael Goettler

President

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification by the Principal Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Sanjeev Narula, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Upjohn Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2020

/s/ SANJEEV NARULA

Sanjeev Narula

Chief Financial Officer, Controller and Treasurer

(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

Certification by the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, I, Michael Goettler, hereby certify that, to the best of my knowledge, the Quarterly Report on Form 10-Q of Upjohn Inc. for the fiscal quarter ended June 28, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and that the information contained in that Report fairly presents, in all material respects, the financial condition and results of operations of Upjohn Inc.

/s/ MICHAEL GOETTLER

Michael Goettler

President

(Principal Executive Officer)

August 11, 2020

This certification accompanies this Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

EXHIBIT 32.2

Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, I, Sanjeev Narula, hereby certify that, to the best of my knowledge, the Quarterly Report on Form 10-Q of Upjohn Inc. for the fiscal quarter ended June 28, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and that the information contained in that Report fairly presents, in all material respects, the financial condition and results of operations of Upjohn Inc.

/s/ SANJEEV NARULA

Sanjeev Narula

Chief Financial Officer, Controller and Treasurer

(Principal Financial and Accounting Officer)

August 11, 2020