Price Graph
Price
Yield
These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
Your subscription will be on a month to month basis and automatically renew every month. You may terminate your subscription at any time through your account.
We will provide you with advance notice of any change in fees.
You represent that you are of legal age to form a binding contract. You are responsible for any
activity associated with your account. The account can be logged in at only one computer at a
time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
If any provision of these Terms is found to be invalid under any applicable law, such provision shall not affect the validity or enforceability of the remaining provisions herein.
This privacy policy describes how we (“Alphaminr”) collect, use, share and protect your personal information when we provide our service (“Service”). This Privacy Policy explains how information is collected about you either directly or indirectly. By using our service, you acknowledge the terms of this Privacy Notice. If you do not agree to the terms of this Privacy Policy, please do not use our Service. You should contact us if you have questions about it. We may modify this Privacy Policy periodically.
When you register for our Service, we collect information from you such as your name, email address and credit card information.
Like many other websites we use “cookies”, which are small text files that are stored on your computer or other device that record your preferences and actions, including how you use the website. You can set your browser or device to refuse all cookies or to alert you when a cookie is being sent. If you delete your cookies, if you opt-out from cookies, some Services may not function properly. We collect information when you use our Service. This includes which pages you visit.
We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELAWARE
(State of Incorporation)
|
13-5315170
(I.R.S. Employer Identification No.)
|
|
YES
X
|
NO ___
|
|
YES
X
|
NO ___
|
|
YES ____
|
NO
X
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and April 1, 2012
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and April 1, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS, EXCEPT PER COMMON SHARE DATA)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Revenues
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
||
|
Cost of sales
(a)
|
|
2,652
|
|
|
2,745
|
|
||
|
Selling, informational and administrative expenses
(a)
|
|
3,585
|
|
|
3,968
|
|
||
|
Research and development expenses
(a)
|
|
1,800
|
|
|
2,062
|
|
||
|
Amortization of intangible assets
|
|
1,234
|
|
|
1,420
|
|
||
|
Restructuring charges and certain acquisition-related costs
|
|
138
|
|
|
597
|
|
||
|
Other deductions––net
|
|
170
|
|
|
1,658
|
|
||
|
Income from continuing operations before provision for taxes on income
|
|
3,921
|
|
|
2,435
|
|
||
|
Provision for taxes on income
|
|
1,160
|
|
|
711
|
|
||
|
Income from continuing operations
|
|
2,761
|
|
|
1,724
|
|
||
|
Discontinued operations––net of tax
|
|
4
|
|
|
79
|
|
||
|
Net income before allocation to noncontrolling interests
|
|
2,765
|
|
|
1,803
|
|
||
|
Less: Net income attributable to noncontrolling interests
|
|
15
|
|
|
9
|
|
||
|
Net income attributable to Pfizer Inc.
|
|
$
|
2,750
|
|
|
$
|
1,794
|
|
|
|
|
|
|
|
||||
|
Earnings per common share––basic:
|
|
|
|
|
|
|
||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.23
|
|
|
Discontinued operations––net of tax
|
|
—
|
|
|
0.01
|
|
||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
||||
|
Earnings per common share––diluted:
|
|
|
|
|
|
|
||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.23
|
|
|
Discontinued operations––net of tax
|
|
—
|
|
|
0.01
|
|
||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
||||
|
Weighted-average shares––basic
|
|
7,187
|
|
|
7,537
|
|
||
|
Weighted-average shares––diluted
|
|
7,269
|
|
|
7,598
|
|
||
|
Cash dividends paid per common share
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
(a)
|
Excludes amortization of intangible assets, except as disclosed in
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Net income before allocation to noncontrolling interests
|
|
$
|
2,765
|
|
|
$
|
1,803
|
|
|
|
|
|
|
|
|
|
||
|
Foreign currency translation adjustments
|
|
$
|
(292
|
)
|
|
$
|
263
|
|
|
Unrealized holding gains/(losses) on derivative financial instruments
|
|
(417
|
)
|
|
427
|
|
||
|
Reclassification adjustments for realized (gains)/losses
(a)
|
|
381
|
|
|
(300
|
)
|
||
|
|
|
(36
|
)
|
|
127
|
|
||
|
Unrealized holding gains/(losses) on available-for-sale securities
|
|
11
|
|
|
80
|
|
||
|
Reclassification adjustments for realized (gains)/losses
(a)
|
|
(13
|
)
|
|
17
|
|
||
|
|
|
(2
|
)
|
|
97
|
|
||
|
Benefit plans: Actuarial gains
|
|
18
|
|
|
61
|
|
||
|
Reclassification adjustments related to amortization
(b)
|
|
151
|
|
|
117
|
|
||
|
Reclassification adjustments related to curtailments and settlements, net
(b)
|
|
59
|
|
|
60
|
|
||
|
Other
|
|
97
|
|
|
15
|
|
||
|
|
|
325
|
|
|
253
|
|
||
|
Benefit plans: Prior service (costs)/credits and other
|
|
3
|
|
|
—
|
|
||
|
Reclassification adjustments related to amortization
(b)
|
|
(16
|
)
|
|
(18
|
)
|
||
|
Reclassification adjustments related to curtailments and settlements, net
(b)
|
|
(9
|
)
|
|
(9
|
)
|
||
|
Other
|
|
(2
|
)
|
|
(3
|
)
|
||
|
|
|
(24
|
)
|
|
(30
|
)
|
||
|
Other comprehensive income/(loss), before tax
|
|
(29
|
)
|
|
710
|
|
||
|
Tax provision on other comprehensive income/(loss)
(c)
|
|
176
|
|
|
204
|
|
||
|
Other comprehensive income/(loss) before allocation to noncontrolling interests
|
|
$
|
(205
|
)
|
|
$
|
506
|
|
|
|
|
|
|
|
||||
|
Comprehensive income before allocation to noncontrolling interests
|
|
$
|
2,560
|
|
|
$
|
2,309
|
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
12
|
|
|
8
|
|
||
|
Comprehensive income attributable to Pfizer Inc.
|
|
$
|
2,548
|
|
|
$
|
2,301
|
|
|
(a)
|
Reclassified into
Other deductions—net
in the condensed consolidated statements of income.
|
|
(b)
|
Generally reclassified, as part of net periodic pension cost, into
Cost of sales, Selling, informational and administrative expenses,
and/or
Research and development expenses
, as appropriate, in the condensed consolidated statements of income. For additional information, see
|
|
(c)
|
See
|
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
December 31,
2012 |
|
||
|
|
|
(Unaudited)
|
|
|
||||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
2,134
|
|
|
$
|
10,389
|
|
|
Short-term investments
|
|
33,212
|
|
|
22,319
|
|
||
|
Accounts receivable, less allowance for doubtful accounts
|
|
12,735
|
|
|
12,378
|
|
||
|
Inventories
|
|
7,035
|
|
|
7,063
|
|
||
|
Taxes and other current assets
|
|
9,647
|
|
|
9,266
|
|
||
|
Total current assets
|
|
64,763
|
|
|
61,415
|
|
||
|
Long-term investments
|
|
15,392
|
|
|
14,149
|
|
||
|
Property, plant and equipment, less accumulated depreciation
|
|
13,950
|
|
|
14,461
|
|
||
|
Goodwill
|
|
43,752
|
|
|
44,672
|
|
||
|
Identifiable intangible assets, less accumulated amortization
|
|
44,109
|
|
|
46,013
|
|
||
|
Taxes and other noncurrent assets
|
|
5,432
|
|
|
5,088
|
|
||
|
Total assets
|
|
$
|
187,398
|
|
|
$
|
185,798
|
|
|
|
|
|
|
|
||||
|
Liabilities and Equity
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
8,896
|
|
|
$
|
6,424
|
|
|
Accounts payable
|
|
3,279
|
|
|
4,264
|
|
||
|
Dividends payable
|
|
5
|
|
|
1,734
|
|
||
|
Income taxes payable
|
|
1,158
|
|
|
1,010
|
|
||
|
Accrued compensation and related items
|
|
1,684
|
|
|
2,046
|
|
||
|
Other current liabilities
|
|
12,521
|
|
|
13,141
|
|
||
|
Total current liabilities
|
|
27,543
|
|
|
28,619
|
|
||
|
|
|
|
|
|
||||
|
Long-term debt
|
|
31,481
|
|
|
31,036
|
|
||
|
Pension benefit obligations
|
|
7,733
|
|
|
7,830
|
|
||
|
Postretirement benefit obligations
|
|
3,470
|
|
|
3,493
|
|
||
|
Noncurrent deferred tax liabilities
|
|
22,445
|
|
|
21,593
|
|
||
|
Other taxes payable
|
|
6,761
|
|
|
6,610
|
|
||
|
Other noncurrent liabilities
|
|
5,138
|
|
|
4,939
|
|
||
|
Total liabilities
|
|
104,571
|
|
|
104,120
|
|
||
|
|
|
|
|
|
||||
|
Commitments and Contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||||
|
Preferred stock
|
|
38
|
|
|
39
|
|
||
|
Common stock
|
|
450
|
|
|
448
|
|
||
|
Additional paid-in capital
|
|
75,778
|
|
|
72,608
|
|
||
|
Employee benefit trusts
|
|
(1
|
)
|
|
(1
|
)
|
||
|
Treasury stock
|
|
(44,832
|
)
|
|
(40,121
|
)
|
||
|
Retained earnings
|
|
56,972
|
|
|
54,240
|
|
||
|
Accumulated other comprehensive loss
|
|
(6,155
|
)
|
|
(5,953
|
)
|
||
|
Total Pfizer Inc. shareholders’ equity
|
|
82,250
|
|
|
81,260
|
|
||
|
Equity attributable to noncontrolling interests
|
|
577
|
|
|
418
|
|
||
|
Total equity
|
|
82,827
|
|
|
81,678
|
|
||
|
Total liabilities and equity
|
|
$
|
187,398
|
|
|
$
|
185,798
|
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Operating Activities
|
|
|
|
|
||||
|
Net income before allocation to noncontrolling interests
|
|
$
|
2,765
|
|
|
$
|
1,803
|
|
|
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash provided by operating activities:
|
|
|
|
|
|
|
||
|
Depreciation and amortization
|
|
1,774
|
|
|
2,221
|
|
||
|
Share-based compensation expense
|
|
189
|
|
|
130
|
|
||
|
Gain associated with the transfer of certain product rights to an equity-method investment
|
|
(490
|
)
|
|
—
|
|
||
|
Asset write-offs and impairment charges
|
|
513
|
|
|
650
|
|
||
|
Deferred taxes from continuing operations
|
|
927
|
|
|
(396
|
)
|
||
|
Deferred taxes from discontinued operations
|
|
—
|
|
|
(8
|
)
|
||
|
Benefit plan contributions (in excess of)/less than expense
|
|
71
|
|
|
(65
|
)
|
||
|
Other non-cash adjustments, net
|
|
(115
|
)
|
|
(28
|
)
|
||
|
Other changes in assets and liabilities, net of acquisitions and divestitures
|
|
(3,393
|
)
|
|
(1,533
|
)
|
||
|
Net cash provided by operating activities
|
|
2,241
|
|
|
2,774
|
|
||
|
|
|
|
|
|
||||
|
Investing Activities
|
|
|
|
|
|
|
||
|
Purchases of property, plant and equipment
|
|
(202
|
)
|
|
(254
|
)
|
||
|
Purchases of short-term investments
|
|
(10,742
|
)
|
|
(6,344
|
)
|
||
|
Proceeds from redemptions and sales of short-term investments
|
|
6,386
|
|
|
8,119
|
|
||
|
Net (purchases of)/proceeds from redemptions and sales of short-term investments with
original maturities of 90 days or less
|
|
(5,596
|
)
|
|
623
|
|
||
|
Purchases of long-term investments
|
|
(2,246
|
)
|
|
(1,184
|
)
|
||
|
Proceeds from redemptions and sales of long-term investments
|
|
1,444
|
|
|
302
|
|
||
|
Acquisitions, net of cash acquired
|
|
—
|
|
|
(782
|
)
|
||
|
Other investing activities
|
|
26
|
|
|
(29
|
)
|
||
|
Net cash provided by/(used in) investing activities
|
|
(10,930
|
)
|
|
451
|
|
||
|
|
|
|
|
|
||||
|
Financing Activities
|
|
|
|
|
|
|
||
|
Proceeds from short-term borrowings
|
|
—
|
|
|
1,561
|
|
||
|
Net proceeds from/(payments on) short-term borrowings with original maturities of 90 days or less
|
|
3,485
|
|
|
(1,791
|
)
|
||
|
Proceeds from issuance of long-term debt
(a)
|
|
2,624
|
|
|
—
|
|
||
|
Principal payments on long-term debt
|
|
(2
|
)
|
|
(3
|
)
|
||
|
Purchases of common stock
|
|
(4,626
|
)
|
|
(1,659
|
)
|
||
|
Cash dividends paid
|
|
(1,735
|
)
|
|
(1,650
|
)
|
||
|
Proceeds from exercise of stock options and other financing activities
|
|
688
|
|
|
35
|
|
||
|
Net cash provided by/(used in) financing activities
|
|
434
|
|
|
(3,507
|
)
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
—
|
|
|
34
|
|
||
|
Net decrease in cash and cash equivalents
|
|
(8,255
|
)
|
|
(248
|
)
|
||
|
Cash and cash equivalents, beginning
|
|
10,389
|
|
|
3,182
|
|
||
|
Cash and cash equivalents, end
|
|
$
|
2,134
|
|
|
$
|
2,934
|
|
|
|
|
|
|
|
||||
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
||
|
Non-cash transactions:
|
|
|
|
|
||||
|
Exchange of Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012
(b)
|
|
$
|
992
|
|
|
$
|
—
|
|
|
Exchange of Zoetis common stock for the retirement of Pfizer commercial paper issued in 2013
(b)
|
|
2,479
|
|
|
—
|
|
||
|
Transfer of certain product rights to an equity-method investment
(c)
|
|
1,233
|
|
|
—
|
|
||
|
Cash paid during the period for:
|
|
|
|
|
|
|
||
|
Income taxes
|
|
$
|
554
|
|
|
$
|
451
|
|
|
Interest
|
|
433
|
|
|
508
|
|
||
|
(a)
|
Represents the issuance of senior notes by Zoetis, our Animal Health subsidiary, net of the non-cash exchange of Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012. See
Note 7D. Financial Instruments: Long-Term Debt
.
|
|
(b)
|
See
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
.
|
|
(c)
|
See
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment
.
|
|
•
|
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 are directly or indirectly observable (Level 2 inputs).
|
|
•
|
Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
|
|
•
|
our former Nutrition operating segment and certain prenatal vitamins previously commercialized by the Pfizer Consumer Healthcare operating segment; and
|
|
•
|
other associated amounts, such as direct manufacturing costs, enabling support functions and other costs not charged to the business, purchase-accounting impacts, acquisition-related costs, impairment charges, restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives, all of which are reported outside our operating segment results.
|
|
|
|
Three Months Ended
|
||
|
(MILLIONS OF DOLLARS)
|
|
April 1,
2012 |
|
|
|
Revenues
|
|
$
|
520
|
|
|
Pre-tax income from discontinued operations
|
|
117
|
|
|
|
Provision for taxes on income
(a)
|
|
38
|
|
|
|
Discontinued operations––net of tax
|
|
$
|
79
|
|
|
(a)
|
Includes a deferred tax benefit of
$8 million
.
|
|
•
|
In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and
|
|
•
|
In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Integration costs
(a)
|
|
$
|
39
|
|
|
$
|
100
|
|
|
Restructuring charges:
(b)
|
|
|
|
|
|
|
||
|
Employee terminations
|
|
(20
|
)
|
|
267
|
|
||
|
Asset impairments
|
|
105
|
|
|
218
|
|
||
|
Exit costs
|
|
14
|
|
|
12
|
|
||
|
Restructuring charges and certain acquisition-related costs
|
|
138
|
|
|
597
|
|
||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows:
(c)
|
|
|
|
|
|
|
||
|
Cost of sales
|
|
33
|
|
|
79
|
|
||
|
Selling, informational and administrative expenses
|
|
12
|
|
|
2
|
|
||
|
Research and development expenses
|
|
90
|
|
|
259
|
|
||
|
Total additional depreciation––asset restructuring
|
|
135
|
|
|
340
|
|
||
|
Implementation costs recorded in our condensed consolidated
statements of income as follows:
(d)
|
|
|
|
|
|
|
||
|
Cost of sales
|
|
6
|
|
|
—
|
|
||
|
Selling, informational and administrative expenses
|
|
30
|
|
|
15
|
|
||
|
Research and development expenses
|
|
3
|
|
|
48
|
|
||
|
Total implementation costs
|
|
39
|
|
|
63
|
|
||
|
Total costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
312
|
|
|
$
|
1,000
|
|
|
(a)
|
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.
|
|
(b)
|
From the beginning of our cost-reduction/productivity initiatives in
2005
through
March 31, 2013
,
Employee termination costs
represent the expected reduction of the workforce by approximately
62,000
employees, mainly in manufacturing and sales and research, of which approximately
54,000
employees have been terminated as of
March 31, 2013
. For the
three
months ended
March 31, 2013
, the credit to employee terminations reflects a change in estimate related to the number of employees to be terminated and the expected total cost of planned terminations.
|
|
•
|
Primary Care operating segment (
$5 million
income), Specialty Care and Oncology operating segment (
$6 million
), Established Products and Emerging Markets operating segment (
$11 million
), other operating segments (
$2 million
), research and development operations (
$2 million
), manufacturing operations (
$4 million
) and Corporate (
$79 million
).
|
|
•
|
Primary Care operating segment (
$3 million
), Specialty Care and Oncology operating segment (
$3 million
), Established Products and Emerging Markets operating segment (
$3 million
), other operating segments (
$6 million
), research and development operations (
$12 million
), manufacturing operations (
$152 million
) and Corporate (
$318 million
).
|
|
(c)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(d)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
|
|
(MILLIONS OF DOLLARS)
|
|
Employee
Termination
Costs/(Credits)
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2012
(a)
|
|
$
|
1,793
|
|
|
$
|
—
|
|
|
$
|
157
|
|
|
$
|
1,950
|
|
|
Provision
|
|
(20
|
)
|
|
105
|
|
|
14
|
|
|
99
|
|
||||
|
Utilization and other
(b)
|
|
(340
|
)
|
|
(105
|
)
|
|
(33
|
)
|
|
(478
|
)
|
||||
|
Balance, March 31, 2013
(c)
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
1,571
|
|
|
(a)
|
Included in
Other current liabilities
(
$1.2 billion
) and
Other noncurrent liabilities
($
731 million
).
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
(
$919 million
) and
Other noncurrent liabilities
(
$652 million
).
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
|
Fair Value
(a)
|
|
2013
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Assets held for sale
(b)
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
Assets abandoned/demolished
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||
|
Long-lived assets
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
(a)
|
The fair value amount is presented as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
.
|
|
(b)
|
Reflects property, plant and equipment and other long-lived held-for-sale assets written down to their fair value of
$84 million
, less costs to sell of
$2 million
(a net of
$82 million
), in the first
three
months of
2013
. Fair value was determined primarily using a market approach, with various inputs, such as recent sales transactions.
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Interest income
(a)
|
|
$
|
(95
|
)
|
|
$
|
(81
|
)
|
|
Interest expense
(a)
|
|
391
|
|
|
390
|
|
||
|
Net interest expense
|
|
296
|
|
|
309
|
|
||
|
Royalty-related income
|
|
(71
|
)
|
|
(97
|
)
|
||
|
Gain associated with the transfer of certain product rights to an equity-method investment
(b)
|
|
(490
|
)
|
|
—
|
|
||
|
Net gain on asset disposals
|
|
(26
|
)
|
|
(7
|
)
|
||
|
Certain legal matters, net
(c)
|
|
(83
|
)
|
|
814
|
|
||
|
Certain asset impairment charges
(d)
|
|
399
|
|
|
432
|
|
||
|
Costs associated with the separation of Zoetis
(e)
|
|
17
|
|
|
32
|
|
||
|
Other, net
|
|
128
|
|
|
175
|
|
||
|
Other deductions––net
|
|
$
|
170
|
|
|
$
|
1,658
|
|
|
(a)
|
Interest income increased in the
first
quarter of
2013
due to higher cash equivalents and investment balances. Interest expense was virtually unchanged in the
first
quarter of
2013
compared to the first quarter of 2012 as the impact of the Zoetis debt issuance on January 28, 2013 was offset by otherwise lower debt balances.
|
|
(b)
|
Represents the gain associated with the transfer of certain product rights to our equity-method investment in China. For additional information, see
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment.
|
|
(c)
|
In the
first
quarter of
2013
, primarily includes an
$80 million
insurance recovery related to a certain litigation matter. In the first quarter of
2012
, primarily relates to a
$450 million
charge in connection with an agreement-in-principle to settle a lawsuit by Brigham Young University related to Celebrex (which was ultimately settled for that amount), and charges for hormone-replacement therapy litigation. For additional information, see
|
|
(d)
|
In the first quarter of
2013
, includes intangible asset impairment charges of
$395 million
, of which
$394 million
relates to developed technology, for use in the development of bone and cartilage, acquired in connection with our acquisition of Wyeth. The intangible asset impairment charges for
2013
reflect, among other things, updated commercial forecasts. The impairment charges for the first quarter of
2013
are associated with the following: Specialty Care (
$394 million
) and Animal Health (Zoetis) (
$1 million
).
|
|
(e)
|
Costs incurred in connection with the IPO of an approximate
19.8%
ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services. For additional information, see
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
|
Fair Value
(a)
|
|
2013
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Intangible asset––Developed Technology
(b)
|
|
$
|
564
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
564
|
|
|
$
|
394
|
|
|
(a)
|
The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
.
|
|
(b)
|
Reflects an intangible asset written down to its fair value of
$564 million
in the first quarter of
2013
. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows associated with the asset and then we applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
|
|
•
|
With respect to Pfizer Inc., tax years 2009 and 2010 are currently under audit. Tax years 2011-2013 are not under audit. All other tax years are closed.
|
|
•
|
With respect to Wyeth, tax years 2006 through the Wyeth acquisition date (October 15, 2009) are currently under audit. All other tax years are closed.
|
|
•
|
With respect to King, tax years 2009 and 2010 are currently under audit. Tax year January 1, 2011 through the date of acquisition (January 31, 2011) is open, but not under audit. All other tax years are closed. The open tax years and audits for King and its subsidiaries are not material to Pfizer Inc.
|
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
|
|
|
|
|
||||
|
Foreign currency translation adjustments
(a)
|
|
$
|
71
|
|
|
$
|
67
|
|
|
Unrealized holding gains/(losses) on derivative financial instruments
|
|
(157
|
)
|
|
159
|
|
||
|
Reclassification adjustments for realized (gains)/losses
|
|
144
|
|
|
(115
|
)
|
||
|
|
|
(13
|
)
|
|
44
|
|
||
|
Unrealized holding gains/(losses) on available-for-sale securities
|
|
13
|
|
|
14
|
|
||
|
Reclassification adjustments for realized (gains)/losses
|
|
(2
|
)
|
|
7
|
|
||
|
|
|
11
|
|
|
21
|
|
||
|
Benefit plans: Actuarial gains
|
|
6
|
|
|
20
|
|
||
|
Reclassification adjustments related to amortization
|
|
54
|
|
|
44
|
|
||
|
Reclassification adjustments related to curtailments and settlements, net
|
|
20
|
|
|
23
|
|
||
|
Other
|
|
37
|
|
|
(1
|
)
|
||
|
|
|
117
|
|
|
86
|
|
||
|
Benefit plans: Prior service (costs)/credits and other
|
|
(1
|
)
|
|
—
|
|
||
|
Reclassification adjustments related to amortization
|
|
(6
|
)
|
|
(8
|
)
|
||
|
Reclassification adjustments related to curtailments and settlements, net
|
|
(3
|
)
|
|
(4
|
)
|
||
|
Other
|
|
—
|
|
|
(2
|
)
|
||
|
|
|
(10
|
)
|
|
(14
|
)
|
||
|
Tax provision on other comprehensive income/(loss)
|
|
$
|
176
|
|
|
$
|
204
|
|
|
(a)
|
Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
|
|
|
|
Net Unrealized Gains/(Losses)
|
|
Benefit Plans
|
|
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Currency Translation Adjustments and Other
|
|
|
Derivative Financial Instruments
|
|
|
Available-For-Sale Securities
|
|
|
Actuarial Gains/(Losses)
|
|
|
Prior Service (Costs)/ Credits and Other
|
|
|
Accumulated Other Comprehensive Loss
|
|
||||||
|
Balance, December 31, 2012
|
|
$
|
(177
|
)
|
|
$
|
(88
|
)
|
|
$
|
163
|
|
|
$
|
(6,110
|
)
|
|
$
|
259
|
|
|
$
|
(5,953
|
)
|
|
Other comprehensive income/(loss)
(a)
|
|
(360
|
)
|
|
(23
|
)
|
|
(13
|
)
|
|
208
|
|
|
(14
|
)
|
|
(202
|
)
|
||||||
|
Balance, March 31, 2013
|
|
$
|
(537
|
)
|
|
$
|
(111
|
)
|
|
$
|
150
|
|
|
$
|
(5,902
|
)
|
|
$
|
245
|
|
|
$
|
(6,155
|
)
|
|
(a)
|
Amounts do not include foreign currency translation loss of
$3 million
attributable to noncontrolling interests for the first quarter of
2013
.
|
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
December 31,
2012 |
|
||
|
Selected financial assets measured at fair value on a recurring basis
(a)
|
|
|
|
|
||||
|
Trading securities
(b)
|
|
$
|
119
|
|
|
$
|
142
|
|
|
Available-for-sale debt securities
(c)
|
|
43,811
|
|
|
32,584
|
|
||
|
Available-for-sale money market funds
(d)
|
|
1,117
|
|
|
1,727
|
|
||
|
Available-for-sale equity securities, excluding money market funds
(c)
|
|
312
|
|
|
263
|
|
||
|
Derivative financial instruments in receivable positions:
(e)
|
|
|
|
|
|
|
||
|
Interest rate swaps
|
|
791
|
|
|
1,036
|
|
||
|
Foreign currency swaps
|
|
288
|
|
|
194
|
|
||
|
Foreign currency forward-exchange contracts
|
|
249
|
|
|
152
|
|
||
|
|
|
46,687
|
|
|
36,098
|
|
||
|
Other selected financial assets
|
|
|
|
|
|
|
||
|
Held-to-maturity debt securities, carried at amortized cost
(c), (f)
|
|
1,470
|
|
|
1,513
|
|
||
|
Private equity securities, carried at equity method or at cost
(f),
(g)
|
|
2,434
|
|
|
1,239
|
|
||
|
|
|
3,904
|
|
|
2,752
|
|
||
|
Total selected financial assets
|
|
$
|
50,591
|
|
|
$
|
38,850
|
|
|
Financial liabilities measured at fair value on a recurring basis
(a)
|
|
|
|
|
||||
|
Derivative financial instruments in a liability position:
(h)
|
|
|
|
|
||||
|
Foreign currency swaps
|
|
$
|
823
|
|
|
$
|
428
|
|
|
Foreign currency forward-exchange contracts
|
|
99
|
|
|
243
|
|
||
|
Interest rate swaps
|
|
26
|
|
|
33
|
|
||
|
|
|
948
|
|
|
704
|
|
||
|
Other financial liabilities
(i)
|
|
|
|
|
|
|
||
|
Short-term borrowings, carried at historical proceeds, as adjusted
(f)
|
|
8,896
|
|
|
6,424
|
|
||
|
Long-term debt, carried at historical proceeds, as adjusted
(j), (k)
|
|
31,481
|
|
|
31,036
|
|
||
|
|
|
40,377
|
|
|
37,460
|
|
||
|
Total selected financial liabilities
|
|
$
|
41,325
|
|
|
$
|
38,164
|
|
|
(a)
|
We use a market approach in valuing financial instruments on a recurring basis. For additional information, see
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
. All of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except less than
1%
that use Level 1 or Level 3 inputs.
|
|
(b)
|
Trading securities are held in trust for legacy business acquisition severance benefits.
|
|
(c)
|
Gross unrealized gains and losses are not significant.
|
|
(d)
|
Includes
$422 million
as of
March 31, 2013
and
$408 million
as of
December 31, 2012
of money market funds held in trust in connection with the asbestos litigation involving Quigley Company, Inc., a wholly owned subsidiary.
|
|
(e)
|
Designated as hedging instruments, except for certain contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of
$155 million
as of
March 31, 2013
; and foreign currency forward-exchange contracts with fair values of
$102 million
as of
December 31, 2012
.
|
|
(f)
|
The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities at cost and short-term borrowings not measured at fair value on a recurring basis were not significant as of
March 31, 2013
or
December 31, 2012
. The fair value measurements of our held-to-maturity debt securities and our short-term borrowings are based on Level 2 inputs, using a market approach. The fair value measurements of our
priv
ate equity securities at cost are based on Level 3 inputs, using a market approach.
|
|
(g)
|
Our private equity securities represent investments in the life sciences sector. The increase in 2013 primarily reflects an increased investment in our equity-method investment in China. For additional information, see
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment.
|
|
(h)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency swaps with fair values of
$202 million
and foreign currency forward-exchange contracts with fair values of
$56 million
as
of
March 31, 2013
;
and foreign currency forward-exchange contracts with fair values of
$141 million
and foreign currency swaps with fair values of
$129 million
as of
December 31, 2012
.
|
|
(i)
|
Some carrying amounts may include adjustments for discount or premium amortization or for the effect of interest rate swaps designated as hedges.
|
|
(j)
|
Includes foreign currency debt with fair values of
$735 million
as of
March 31, 2013
and
$809 million
as of
December 31, 2012
, which are used as hedging instruments.
|
|
(k)
|
The fair value of our long-term debt (not including the current portion of long-term debt) is
$37.8 billion
as of
March 31, 2013
and
$37.5 billion
as of
December 31, 2012
. The fair value measurements for our long-term debt are based on Level 2 inputs, using a market approach.
|
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
December 31,
2012 |
|
||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
659
|
|
|
$
|
1,000
|
|
|
Short-term investments
|
|
33,212
|
|
|
22,319
|
|
||
|
Long-term investments
|
|
15,392
|
|
|
14,149
|
|
||
|
Taxes and other current assets
(a)
|
|
367
|
|
|
296
|
|
||
|
Taxes and other noncurrent assets
(b)
|
|
961
|
|
|
1,086
|
|
||
|
|
|
$
|
50,591
|
|
|
$
|
38,850
|
|
|
Liabilities
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
8,896
|
|
|
$
|
6,424
|
|
|
Other current liabilities
(c)
|
|
247
|
|
|
330
|
|
||
|
Long-term debt
|
|
31,481
|
|
|
31,036
|
|
||
|
Other noncurrent liabilities
(d)
|
|
701
|
|
|
374
|
|
||
|
|
|
$
|
41,325
|
|
|
$
|
38,164
|
|
|
(a)
|
As of
March 31, 2013
, derivative instruments at fair value include foreign currency forward-exchange contracts (
$249 million
), interest rate swaps (
$64 million
), and foreign currency swaps (
$54 million
) and, as of
December 31, 2012
, include foreign currency forward-exchange contracts (
$152 million
) and foreign currency swaps (
$144 million
).
|
|
(b)
|
As of
March 31, 2013
, derivative instruments at fair value include interest rate swaps (
$727 million
) and foreign currency swaps (
$234 million
) and, as of
December 31, 2012
, include interest rate swaps (
$1 billion
) and foreign currency swaps (
$50 million
).
|
|
(c)
|
At
March 31, 2013
, derivative instruments at fair value include foreign currency swaps (
$148 million
) and foreign currency forward-exchange contracts (
$99 million
) and, as of
December 31, 2012
, include foreign currency forward-exchange contracts (
$243 million
) and foreign currency swaps (
$87 million
).
|
|
(d)
|
At
March 31, 2013
, derivative instruments at fair value include foreign currency swaps (
$675 million
) and interest rate swaps (
$26 million
) and, as of
December 31, 2012
, include foreign currency swaps (
$341 million
) and interest rate swaps (
$33 million
).
|
|
|
|
Years
|
|
|
||||||||||||
|
|
|
|
|
|
Over 1
|
|
|
Over 5
|
|
|
March 31,
2013 |
|
||||
|
(MILLIONS OF DOLLARS)
|
|
Within 1
|
|
|
to 5
|
|
|
to 10
|
|
|
Total
|
|
||||
|
Available-for-sale debt securities
|
|
|
|
|
|
|
|
|
||||||||
|
Western European, Canadian and other government debt
(a)
|
|
$
|
19,028
|
|
|
$
|
2,076
|
|
|
$
|
—
|
|
|
$
|
21,104
|
|
|
Corporate debt
(b)
|
|
2,165
|
|
|
4,205
|
|
|
1,612
|
|
|
7,982
|
|
||||
|
U.S. government debt
|
|
4,023
|
|
|
99
|
|
|
37
|
|
|
4,159
|
|
||||
|
Western European, Scandinavian and other government agency debt
(a)
|
|
3,176
|
|
|
433
|
|
|
—
|
|
|
3,609
|
|
||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage Association asset-backed securities
|
|
—
|
|
|
2,489
|
|
|
178
|
|
|
2,667
|
|
||||
|
Supranational debt
(a)
|
|
1,979
|
|
|
688
|
|
|
—
|
|
|
2,667
|
|
||||
|
Reverse repurchase agreements
(c)
|
|
1,623
|
|
|
—
|
|
|
—
|
|
|
1,623
|
|
||||
|
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Certificates of deposit and other
|
|
1,173
|
|
|
296
|
|
|
1
|
|
|
1,470
|
|
||||
|
Total debt securities
|
|
$
|
33,167
|
|
|
$
|
10,286
|
|
|
$
|
1,828
|
|
|
$
|
45,281
|
|
|
(a)
|
All issued by above-investment-grade governments, government agencies or supranational entities, as applicable.
|
|
(b)
|
Largely issued by above-investment-grade institutions in the financial services sector.
|
|
(c)
|
Involving U.S. and U.K. government securities.
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
(MILLIONS OF DOLLARS)
|
|
Maturity Date
|
|
2013
|
|
|
|
3.250%
|
|
February 2023
|
|
$
|
1,349
|
|
|
4.700%
|
|
February 2043
|
|
1,142
|
|
|
|
1.875%
|
|
February 2018
|
|
749
|
|
|
|
1.150%
|
|
February 2016
|
|
400
|
|
|
|
Total long-term debt issued in the first quarter of 2013
(a), (b)
|
|
|
|
$
|
3,640
|
|
|
(a)
|
For additional information, see
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
.
|
|
(b)
|
The indenture that governs the Zoetis senior notes contains covenants, including limitations on the ability of Zoetis and certain Zoetis subsidiaries to incur liens or engage in sale-leaseback transactions. The indenture also contains restrictions on Zoetis' ability to consolidate, merge or sell substantially all of its assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which, the Zoetis senior notes may be declared immediately due and payable. Zoetis is able to redeem the Zoetis senior notes, in whole or in part, at any time by paying a “make whole” premium, plus accrued and unpaid interest. Except under limited circumstances, Zoetis will not be permitted to redeem the 2023 notes pursuant to this optional redemption provision. Upon the occurrence of a change of control of Zoetis and a downgrade of the senior notes below an investment grade rating by each of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, Zoetis is, in certain circumstances, required to make an offer to purchase each of the Zoetis senior notes at a price equal to
101%
of the aggregate principal amount of the Zoetis senior notes together with accrued and unpaid interest.
|
|
(MILLIONS OF DOLLARS)
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
After 2017
|
|
|
Total
|
|
||||||
|
Maturities
|
|
$
|
1,251
|
|
|
$
|
3,057
|
|
|
$
|
4,706
|
|
|
$
|
1,850
|
|
|
$
|
20,617
|
|
|
$
|
31,481
|
|
|
|
|
Amount of
Gains/(Losses)
Recognized in OID
(a), (b), (c)
|
|
Amount of
Gains/(Losses)
Recognized in OCI
(Effective Portion)
(a), (d)
|
|
Amount of
Gains/(Losses)
Reclassified from
OCI into OID
(Effective Portion)
(a), (d)
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Mar 31,
2013 |
|
|
Apr 1,
2012 |
|
|
Mar 31,
2013 |
|
|
Apr 1,
2012 |
|
|
Mar 31,
2013 |
|
|
Apr 1,
2012 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(417
|
)
|
|
$
|
428
|
|
|
$
|
(381
|
)
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
(3
|
)
|
|
(1
|
)
|
|
123
|
|
|
125
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments Not Designated as Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency forward-exchange contracts
|
|
149
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency swaps
|
|
(4
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency long-term debt
|
|
—
|
|
|
—
|
|
|
63
|
|
|
50
|
|
|
—
|
|
|
—
|
|
||||||
|
All other net
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
$
|
142
|
|
|
$
|
(152
|
)
|
|
$
|
(231
|
)
|
|
$
|
612
|
|
|
$
|
(381
|
)
|
|
$
|
300
|
|
|
(a)
|
OID = Other (income)/deductions—net, included in
Other deductions—net
in the condensed consolidated statements of income
.
OCI = Other comprehensive income/(loss), included in the
condensed consolidated statements of comprehensive income
.
|
|
(b)
|
Also includes gains and losses attributable to the hedged risk in fair value hedge relationships.
|
|
(c)
|
There was no significant ineffectiveness for any period presented.
|
|
(d)
|
Amounts presented represent the effective portion of the gain or loss. For derivative financial instruments in cash flow hedge relationships, the effective portion is included in
Other comprehensive income/(loss)––Unrealized holding gains/(losses) on derivative financial instruments
. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in
Other comprehensive income/(loss)––foreign currency translation adjustments.
|
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
December 31,
2012 |
|
||
|
Finished goods
|
|
$
|
2,663
|
|
|
$
|
2,529
|
|
|
Work-in-process
|
|
3,456
|
|
|
3,794
|
|
||
|
Raw materials and supplies
|
|
916
|
|
|
740
|
|
||
|
Inventories
|
|
$
|
7,035
|
|
|
$
|
7,063
|
|
|
Noncurrent inventories not included above
(a)
|
|
$
|
734
|
|
|
$
|
761
|
|
|
(a)
|
Included in
Taxes and other noncurrent assets
. There are no recoverability issues associated with these amounts.
|
|
(MILLIONS OF DOLLARS)
|
|
Primary
Care
|
|
|
Specialty
Care and
Oncology
|
|
|
Established
Products and
Emerging
Markets
|
|
|
Other Operating Segments
(a)
|
|
|
Total
|
|
|||||
|
Balance, December 31, 2012
|
|
$
|
6,152
|
|
|
$
|
16,885
|
|
|
$
|
18,603
|
|
|
$
|
3,032
|
|
|
$
|
44,672
|
|
|
Derecognition
(b)
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
(272
|
)
|
|||||
|
Other
(c)
|
|
(97
|
)
|
|
(266
|
)
|
|
(288
|
)
|
|
3
|
|
|
(648
|
)
|
|||||
|
Balance, March 31, 2013
|
|
$
|
6,055
|
|
|
$
|
16,619
|
|
|
$
|
18,043
|
|
|
$
|
3,035
|
|
|
$
|
43,752
|
|
|
(a)
|
Reflects amounts associated with Animal Health (Zoetis) and Consumer Healthcare.
|
|
(b)
|
Reflects the goodwill derecognized as part of the transfer of certain product rights, which constituted a business, to our equity-method investment in China. For additional information, see
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment
.
|
|
(c)
|
Primarily reflects the impact of foreign exchange.
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Identifiable
Intangible
Assets, less
Accumulated
Amortization
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Identifiable
Intangible
Assets, less
Accumulated
Amortization
|
|
||||||
|
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Developed technology rights
|
|
$
|
73,310
|
|
|
$
|
(38,857
|
)
|
|
$
|
34,453
|
|
|
$
|
73,112
|
|
|
$
|
(37,069
|
)
|
|
$
|
36,043
|
|
|
Brands
|
|
1,880
|
|
|
(809
|
)
|
|
1,071
|
|
|
1,873
|
|
|
(781
|
)
|
|
1,092
|
|
||||||
|
License agreements and other
|
|
1,078
|
|
|
(817
|
)
|
|
261
|
|
|
1,085
|
|
|
(793
|
)
|
|
292
|
|
||||||
|
|
|
76,268
|
|
|
(40,483
|
)
|
|
35,785
|
|
|
76,070
|
|
|
(38,643
|
)
|
|
37,427
|
|
||||||
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Brands
|
|
7,571
|
|
|
—
|
|
|
7,571
|
|
|
7,828
|
|
|
—
|
|
|
7,828
|
|
||||||
|
In-process research and development
|
|
681
|
|
|
—
|
|
|
681
|
|
|
688
|
|
|
—
|
|
|
688
|
|
||||||
|
Trademarks/tradenames
|
|
72
|
|
|
—
|
|
|
72
|
|
|
70
|
|
|
—
|
|
|
70
|
|
||||||
|
|
|
8,324
|
|
|
—
|
|
|
8,324
|
|
|
8,586
|
|
|
—
|
|
|
8,586
|
|
||||||
|
Identifiable intangible assets
(a)
|
|
$
|
84,592
|
|
|
$
|
(40,483
|
)
|
|
$
|
44,109
|
|
|
$
|
84,656
|
|
|
$
|
(38,643
|
)
|
|
$
|
46,013
|
|
|
(a)
|
The decrease is primarily related to amortization, an asset impairment charge and the transfer of certain product rights to our equity-method investment in China. For additional information about the asset impairment charge, see
Note 4. Other Deductions
—
Net.
For additional information about the transfer of certain product rights, see
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment.
|
|
•
|
Developed Technology Rights: Specialty Care (
66%
); Established Products (
19%
); Primary Care (
13%
); Animal Health (Zoetis) (
1%
); and Oncology (
1%
);
|
|
•
|
Brands, finite-lived: Consumer Healthcare (
64%
); Established Products (
24%
); and Animal Health (Zoetis) (
12%
);
|
|
•
|
Brands, indefinite-lived: Consumer Healthcare (
68%
); and Established Products (
31%
); and Animal Health (Zoetis) (
1%
); and
|
|
•
|
IPR&D: Worldwide Research and Development (
55%
); Established Products (
20%
); Primary Care (
12%
); Specialty Care (
11%
); and Animal Health (Zoetis) (
2%
).
|
|
|
|
Pension Plans
|
|
|
||||||||||||||||||||||||||||
|
|
|
U.S.
Qualified
(a)
|
|
U.S.
Supplemental
(Non-Qualified)
(b)
|
|
International
(c)
|
|
Postretirement
Plans
|
||||||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Service cost
|
|
$
|
77
|
|
|
$
|
96
|
|
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
56
|
|
|
$
|
53
|
|
|
$
|
16
|
|
|
$
|
18
|
|
|
Interest cost
|
|
168
|
|
|
183
|
|
|
14
|
|
|
17
|
|
|
97
|
|
|
101
|
|
|
42
|
|
|
46
|
|
||||||||
|
Expected return on plan assets
|
|
(253
|
)
|
|
(245
|
)
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(105
|
)
|
|
(14
|
)
|
|
(9
|
)
|
||||||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Actuarial losses
|
|
90
|
|
|
80
|
|
|
13
|
|
|
11
|
|
|
37
|
|
|
18
|
|
|
11
|
|
|
8
|
|
||||||||
|
Prior service credits
|
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(12
|
)
|
||||||||
|
Curtailments and settlements––net
|
|
29
|
|
|
44
|
|
|
22
|
|
|
13
|
|
|
3
|
|
|
(10
|
)
|
|
(7
|
)
|
|
(11
|
)
|
||||||||
|
Special termination benefits
|
|
—
|
|
|
5
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
|
|
|
$
|
109
|
|
|
$
|
160
|
|
|
$
|
55
|
|
|
$
|
60
|
|
|
$
|
87
|
|
|
$
|
57
|
|
|
$
|
37
|
|
|
$
|
42
|
|
|
(a)
|
The decrease in net periodic benefit costs for the
three
months ended
March 31, 2013
, compared to the
three
months ended
April 1, 2012
, for our U.S. qualified plans was primarily driven by lower service cost resulting from the decision in 2012 to freeze the defined benefit plans in the U.S. and Puerto Rico, lower settlement activity and greater expected return on plan assets resulting from a higher plan asset base. Also, the decrease in the discount rate resulted in lower interest costs, as well as an increase in the amounts amortized for actuarial losses.
|
|
(b)
|
The decrease in net periodic benefit costs for the
three
months ended
March 31, 2013
, compared to the
three
months ended
April 1, 2012
, for our U.S. supplemental (non-qualified) pension plans was primarily driven by special termination benefits in 2012 and lower service cost resulting from the decision in 2012 to freeze the defined benefit plans in the U.S. and Puerto Rico, partially offset by higher settlement activity.
|
|
(c)
|
The increase in net periodic benefit costs for the
three
months ended
March 31, 2013
, compared to the
three
months ended
April 1, 2012
, for our international pension plans was primarily driven by an increase in the amounts amortized for actuarial losses resulting from decreases in discount rates and the curtailment gain in our German plans in 2012.
|
|
|
|
Three Months Ended
|
||||||
|
(IN MILLIONS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
EPS Numerator––Basic
|
|
|
|
|
||||
|
Income from continuing operations
|
|
$
|
2,761
|
|
|
$
|
1,724
|
|
|
Less: Net income attributable to noncontrolling interests
(a)
|
|
23
|
|
|
9
|
|
||
|
Income from continuing operations attributable to Pfizer Inc.
|
|
2,738
|
|
|
1,715
|
|
||
|
Less: Preferred stock dividends––net of tax
|
|
—
|
|
|
—
|
|
||
|
Income from continuing operations attributable to Pfizer Inc common shareholders
|
|
2,738
|
|
|
1,715
|
|
||
|
Discontinued operations––net of tax
|
|
4
|
|
|
79
|
|
||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
2,742
|
|
|
$
|
1,794
|
|
|
EPS Numerator––Diluted
|
|
|
|
|
|
|
||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
2,738
|
|
|
$
|
1,715
|
|
|
Discontinued operations––net of tax
|
|
4
|
|
|
79
|
|
||
|
Net income attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
2,742
|
|
|
$
|
1,794
|
|
|
EPS Denominator
|
|
|
|
|
|
|
||
|
Weighted-average number of common shares outstanding––Basic
|
|
7,187
|
|
|
7,537
|
|
||
|
Common-share equivalents: stock options, stock issuable under employee compensation plans and convertible preferred stock
|
|
82
|
|
|
61
|
|
||
|
Weighted-average number of common shares outstanding––Diluted
|
|
7,269
|
|
|
7,598
|
|
||
|
Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans
(b)
|
|
97
|
|
|
223
|
|
||
|
(a)
|
Our
80.2%
-owned Animal Health subsidiary, Zoetis, has issued securities, under its share-based compensations programs, that enable the holders to obtain Zoetis common stock under certain circumstances and, as such, those shares are included in computing Zoetis' earnings per share information on a standalone basis. The per-share earnings of Zoetis are included in our consolidated earnings per share calculations based on our proportionate share in Zoetis' common stock and common stock equivalents.
|
|
(b)
|
These common stock equivalents were outstanding for the
three
months ended
March 31, 2013
and
April 1, 2012
, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
|
|
•
|
Patent litigation, which typically involves challenges to the coverage and/or validity of our patents on various products, processes or dosage forms. We are the plaintiff in the vast majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in a loss of patent protection for the drug at issue, a significant loss of revenues from that drug and impairments of any associated assets.
|
|
•
|
Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities-law, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.
|
|
•
|
Commercial and other matters, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.
|
|
•
|
Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other countries.
|
|
•
|
Quigley
|
|
•
|
the payment to the Ad Hoc Committee, for the benefit of the Ad Hoc Committee claimants, of a first installment of
$500 million
upon receipt by Pfizer of releases of asbestos-related claims against Pfizer Inc. from Ad Hoc Committee claimants holding
$500 million
in the aggregate of claims (Pfizer began paying this first installment in June 2011);
|
|
•
|
the payment to the Ad Hoc Committee, for the benefit of the Ad Hoc Committee claimants, of a second installment of
$300 million
upon Pfizer’s receipt of releases of asbestos-related claims against Pfizer Inc. from Ad Hoc Committee claimants holding an additional
$300 million
in the aggregate of claims (Pfizer began paying this second installment in April 2013);
|
|
•
|
the payment of the Ad Hoc Committee’s legal fees and expenses incurred in this matter up to a maximum of
$19 million
(Pfizer began paying these legal fees and expenses in May 2011); and
|
|
•
|
the procurement by Pfizer of insurance for the benefit of certain Ad Hoc Committee claimants to the extent such claimants with non-malignant diseases have a future disease progression to a malignant disease (Pfizer procured this insurance in August 2011).
|
|
•
|
Other Matters
|
|
•
|
Personal Injury and Economic Loss Actions
|
|
•
|
Government Inquiries; Action by the State of Nevada
|
|
•
|
Personal Injury Actions
|
|
•
|
Antitrust Actions
|
|
•
|
Off-Label Promotion Actions in the U.S.
|
|
•
|
Personal Injury Actions in the U.S. and Certain Other Countries
|
|
•
|
Antitrust Action in the U.S.
|
|
•
|
Whistleblower Action
|
|
•
|
Antitrust Actions
|
|
•
|
Actions in the U.S.
|
|
•
|
Actions in Canada
|
|
•
|
In February 2009, special masters of the U.S. Court of Federal Claims rejected the three cases brought on the theory that a combination of MMR and thimerosal-containing vaccines caused petitioners’ conditions. After these rulings were affirmed by the U.S. Court of Federal Claims, two of them were appealed by petitioners to the U.S. Court of Appeals for the Federal Circuit. In 2010, the Federal Circuit affirmed the decisions of the special masters in both of these cases.
|
|
•
|
In March 2010, special masters of the U.S. Court of Federal Claims rejected the
three
additional test cases brought on the theory that thimerosal-containing vaccines alone caused petitioners’ conditions. Petitioners did not seek review by the U.S. Court of Federal Claims of the decisions of the special masters in these latter three test cases, and judgments were entered dismissing the cases in April 2010.
|
|
•
|
Petitioners in each of the
six
test cases have filed an election to bring a civil action.
|
|
•
|
Primary Care operating segment––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products primarily prescribed by primary-care physicians, and may include products in the following therapeutic and disease areas: Alzheimer’s disease, cardiovascular (excluding pulmonary arterial hypertension), erectile
|
|
•
|
Specialty Care and Oncology operating segment––comprises the Specialty Care business unit and the Oncology business unit.
|
|
◦
|
Specialty Care––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products primarily prescribed by physicians who are specialists, and may include products in the following therapeutic and disease areas: anti-infectives, endocrine disorders, hemophilia, inflammation, ophthalmology, pulmonary arterial hypertension, specialty neuroscience and vaccines. Examples of products in this unit in the first quarter of 2013 include BeneFIX, Enbrel, Genotropin, Geodon (outside the U.S.), the Prevnar/Prevenar family, ReFacto AF, Revatio (outside the U.S.), Tygacil, Vfend (outside the U.S. and South Korea), Vyndaqel (outside the U.S.), Xalatan (outside the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Xeljanz, Xyntha and Zyvox. All revenues and earnings for such products are allocated to the Specialty Care unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.
|
|
◦
|
Oncology––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products addressing oncology and oncology-related illnesses. The products in this unit in the first quarter of 2013 include Inlyta, Sutent, Torisel, Xalkori, Mylotarg (in Japan), Bosulif (in the U.S. and European Union (EU)) and Aromasin (in Japan and South Korea). All revenues and earnings for such products are allocated to the Oncology unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.
|
|
•
|
Established Products and Emerging Markets operating segment––comprises the Established Products business unit and the Emerging Markets business unit.
|
|
◦
|
Established Products––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions. Typically, products are transferred to this unit in the beginning of the fiscal year following loss of patent protection or marketing exclusivity. However, in certain situations, products may be transferred to this unit at a different point than the beginning of the fiscal year following loss of patent protection or marketing exclusivity in order to maximize their value. This unit also excludes revenues and earnings generated in Emerging Markets. Examples of products in this unit in the first quarter of 2013 include Arthrotec, Effexor, Geodon (in the U.S.), Lipitor, Medrol, Norvasc, Protonix, Relpax, Vfend (in the U.S. and South Korea), Xalatan (in the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Zosyn/Tazocin and Viagra (in Canada and South Korea).
|
|
◦
|
Emerging Markets––includes revenues and earnings, as defined by management, from all human prescription pharmaceutical products sold in Emerging Markets, including Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.
|
|
•
|
Animal Health operating segment (Zoetis)––includes worldwide revenues and earnings, as defined by management and within the framework of a standalone public company, from products and services to prevent and treat disease in livestock and companion animals, including anti-infectives, vaccines, parasiticides, medicinal feed additives, other pharmaceutical products and other non-pharmaceutical products.
|
|
•
|
Consumer Healthcare operating segment––includes worldwide revenues and earnings, as defined by management, from non-prescription products in the following therapeutic categories: dietary supplements, pain management, respiratory and personal care. Products marketed by Consumer Healthcare include Advil, Caltrate, Centrum, ChapStick, Emergen-C, Preparation H and Robitussin.
|
|
•
|
Worldwide Research and Development, which is generally responsible for human health research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This
|
|
•
|
Pfizer Medical is responsible for external affairs relating to all therapeutic areas, providing Pfizer-related medical information to healthcare providers, patients and other parties, and quality assurance and regulatory compliance activities, which include conducting clinical trial audits and readiness reviews.
|
|
•
|
Corporate, which is responsible for platform functions such as finance, global real estate operations, human resources, legal, compliance, science and technology, worldwide procurement, worldwide public affairs and policy and worldwide technology. These costs also include compensation costs and other miscellaneous operating expenses not charged to our operating segments, as well as interest income and expense.
|
|
•
|
Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related activities, where we incur costs for restructuring, integration, implementation and executing the transaction; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses.
|
|
|
|
Revenues
|
|
R&D Expenses
|
|
Earnings
(a)
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reportable Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Primary Care
(b)
|
|
$
|
3,238
|
|
|
$
|
4,097
|
|
|
$
|
223
|
|
|
$
|
241
|
|
|
$
|
2,014
|
|
|
$
|
2,670
|
|
|
Specialty Care and Oncology
|
|
3,536
|
|
|
3,868
|
|
|
404
|
|
|
373
|
|
|
2,314
|
|
|
2,596
|
|
||||||
|
Established Products and Emerging Markets
(c)
|
|
4,772
|
|
|
5,100
|
|
|
64
|
|
|
73
|
|
|
2,810
|
|
|
3,177
|
|
||||||
|
Total reportable segments
|
|
11,546
|
|
|
13,065
|
|
|
691
|
|
|
687
|
|
|
7,138
|
|
|
8,443
|
|
||||||
|
Other operating segments
(d)
|
|
1,901
|
|
|
1,767
|
|
|
111
|
|
|
112
|
|
|
448
|
|
|
353
|
|
||||||
|
Other business activities
(e)
|
|
53
|
|
|
53
|
|
|
654
|
|
|
674
|
|
|
(658
|
)
|
|
(681
|
)
|
||||||
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate
(f)
|
|
—
|
|
|
—
|
|
|
240
|
|
|
276
|
|
|
(1,361
|
)
|
|
(1,705
|
)
|
||||||
|
Purchase accounting adjustments
(g)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1,232
|
)
|
|
(1,446
|
)
|
||||||
|
Acquisition-related costs
(h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(95
|
)
|
|
(183
|
)
|
||||||
|
Certain significant items
(i)
|
|
—
|
|
|
—
|
|
|
93
|
|
|
302
|
|
|
(128
|
)
|
|
(2,067
|
)
|
||||||
|
Other unallocated
(j)
|
|
—
|
|
|
—
|
|
|
12
|
|
|
7
|
|
|
(191
|
)
|
|
(279
|
)
|
||||||
|
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
$
|
1,800
|
|
|
$
|
2,062
|
|
|
$
|
3,921
|
|
|
$
|
2,435
|
|
|
(a)
|
Income from continuing operations before provision for taxes on income.
|
|
(b)
|
Revenues and Earnings from the Primary Care segment decreased in the
three
months ended
March 31, 2013
as compared to the three months ended April 1, 2012, and earnings as a percentage of revenues also declined, primarily due to the loss of exclusivity for Lipitor in
|
|
(c)
|
Revenues and Earnings from the Established Products and Emerging Markets segment decreased in the
three
months ended
March 31, 2013
as compared to the three months ended April 1, 2012, driven by, among other things, the expiration of the 180-day exclusivity period in the U.S. for atorvastatin and the loss of exclusivity in the U.S. for branded Lipitor, partially offset by the addition of products in certain markets that shifted to the Established Products unit from other business units beginning January 1, 2013. Earnings as a percentage of revenue decreased due to the change in the mix of products.
|
|
(d)
|
Includes our Animal Health (Zoetis) operating segment and the Consumer Healthcare operating segment. The Animal Health earnings reflect the income before taxes of Zoetis on a management-reporting basis and generally include higher operating costs associated with being a standalone public company.
|
|
(e)
|
Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, and the R&D costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.
|
|
(f)
|
Corporate for R&D expenses includes, among other things, administration expenses and compensation expenses associated with our research and development activities, and for Earnings includes, among other things, administration expenses, interest income/(expense), certain compensation and other costs not charged to our operating segments.
|
|
(g)
|
Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment.
|
|
(h)
|
Acquisition-related costs can include costs associated with acquiring, integrating and restructuring newly acquired businesses, such as transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring (see
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
for additional information).
|
|
(i)
|
Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.
|
|
(j)
|
Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change
|
|
||
|
Revenues
|
|
|
|
|
|
|
|||||
|
United States
|
|
$
|
5,368
|
|
|
$
|
5,952
|
|
|
(10
|
)
|
|
Developed Europe
(a)
|
|
3,029
|
|
|
3,537
|
|
|
(14
|
)
|
||
|
Developed Rest of World
(b)
|
|
2,172
|
|
|
2,612
|
|
|
(17
|
)
|
||
|
Emerging Markets
(c)
|
|
2,931
|
|
|
2,784
|
|
|
5
|
|
||
|
Revenues
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
(9
|
)
|
|
(a)
|
Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were
$2.3 billion
in the
first
quarter of
2013
and
$2.6 billion
in the
first
quarter of
2012
.
|
|
(b)
|
Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea.
|
|
(c)
|
Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.
|
|
The following table provides revenues by product:
|
||||||||
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31, 2013
|
|
|
April 1, 2012
|
|
||
|
Revenues from biopharmaceutical products:
|
|
|
|
|
||||
|
Lyrica
|
|
$
|
1,066
|
|
|
$
|
955
|
|
|
Enbrel (Outside the U.S. and Canada)
|
|
877
|
|
|
899
|
|
||
|
Prevnar 13/Prevenar 13
|
|
846
|
|
|
945
|
|
||
|
Celebrex
|
|
653
|
|
|
634
|
|
||
|
Lipitor
(a)
|
|
626
|
|
|
1,395
|
|
||
|
Viagra
|
|
461
|
|
|
496
|
|
||
|
Zyvox
|
|
342
|
|
|
325
|
|
||
|
Sutent
|
|
302
|
|
|
300
|
|
||
|
Norvasc
|
|
301
|
|
|
334
|
|
||
|
Premarin family
|
|
244
|
|
|
261
|
|
||
|
Genotropin
|
|
189
|
|
|
195
|
|
||
|
BeneFIX
|
|
189
|
|
|
183
|
|
||
|
Vfend
|
|
187
|
|
|
178
|
|
||
|
Chantix/Champix
|
|
166
|
|
|
178
|
|
||
|
Pristiq
|
|
166
|
|
|
151
|
|
||
|
Detrol/Detrol LA
|
|
151
|
|
|
195
|
|
||
|
Xalatan/Xalacom
|
|
147
|
|
|
227
|
|
||
|
Refacto AF/Xyntha
|
|
139
|
|
|
132
|
|
||
|
Zithromax/Zmax
|
|
116
|
|
|
123
|
|
||
|
Zoloft
|
|
116
|
|
|
130
|
|
||
|
Medrol
|
|
113
|
|
|
134
|
|
||
|
Effexor
|
|
105
|
|
|
129
|
|
||
|
Zosyn/Tazocin
|
|
87
|
|
|
128
|
|
||
|
Tygacil
|
|
87
|
|
|
81
|
|
||
|
Relpax
|
|
86
|
|
|
85
|
|
||
|
Fragmin
|
|
86
|
|
|
91
|
|
||
|
Rapamune
|
|
84
|
|
|
82
|
|
||
|
Prevnar/Prevenar (7-valent)
|
|
81
|
|
|
138
|
|
||
|
Cardura
|
|
76
|
|
|
84
|
|
||
|
EpiPen
|
|
72
|
|
|
58
|
|
||
|
Revatio
|
|
72
|
|
|
136
|
|
||
|
Sulperazon
|
|
71
|
|
|
58
|
|
||
|
Xanax XR
|
|
70
|
|
|
68
|
|
||
|
Inlyta
|
|
63
|
|
|
7
|
|
||
|
Aricept
(b)
|
|
62
|
|
|
94
|
|
||
|
Unasyn
|
|
56
|
|
|
54
|
|
||
|
Caduet
|
|
56
|
|
|
65
|
|
||
|
Xalkori
|
|
53
|
|
|
17
|
|
||
|
Neurontin
|
|
52
|
|
|
58
|
|
||
|
Inspra
|
|
52
|
|
|
49
|
|
||
|
Toviaz
|
|
52
|
|
|
46
|
|
||
|
Aromasin
|
|
51
|
|
|
56
|
|
||
|
Dalacin/Cleocin
|
|
50
|
|
|
49
|
|
||
|
Alliance revenues
(c)
|
|
747
|
|
|
836
|
|
||
|
All other biopharmaceutical products
(d)
|
|
1,878
|
|
|
2,226
|
|
||
|
|
|
11,546
|
|
|
13,065
|
|
||
|
Other revenues:
|
|
|
|
|
|
|
||
|
Animal Health (Zoetis)
|
|
1,090
|
|
|
1,040
|
|
||
|
Consumer Healthcare
|
|
811
|
|
|
727
|
|
||
|
Other
(e)
|
|
53
|
|
|
53
|
|
||
|
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
(a)
|
Lipitor lost exclusivity in the U.S. in November 2011 and various other major markets in 2011 and
2012
. This loss of exclusivity reduced branded worldwide revenues by
$792 million
in the
first
quarter of
2013
, in comparison with the
first
quarter of
2012
.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Includes Enbrel (in the U.S. and Canada), Spiriva, Rebif, Aricept and Eliquis.
|
|
(d)
|
Includes sales of generic atorvastatin.
|
|
(e)
|
Represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
•
|
Overview of Our Performance, Operating Environment, Strategy and Outlook
. This section, beginning on page 48 provides information about the following: our business; our performance during the first quarter of 2013 and 2012; our operating environment; our strategy; our business development initiatives, such as acquisitions, dispositions, licensing and collaborations; and our financial guidance for 2013.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Income
. This section begins on page 56 and consists of the following sub-sections:
|
|
◦
|
Revenues
. This sub-section, beginning on page 60, provides an analysis of our revenues and products for the first quarter of 2013 and 2012, as well as an overview of research and development (R&D) expenses and important biopharmaceutical product developments.
|
|
◦
|
Costs and Expenses
. This sub-section, beginning on page 68, provides a discussion about our costs and expenses.
|
|
◦
|
Provision for Taxes on Income
. This sub-section, on page 72, provides a discussion of items impacting our tax provisions.
|
|
◦
|
Discontinued Operations
. This sub-section, beginning on page 73, provides an analysis of the financial statement impact of our discontinued operations.
|
|
◦
|
Adjusted Income
. This sub-section, beginning on page 73, provides a discussion of an alternative view of performance used by management.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Comprehensive Income
. This section, on page 78, provides a discussion of changes in certain components of other comprehensive income.
|
|
•
|
Analysis of the Condensed Consolidated Balance Sheets
. This section, on page 78, provides a discussion of changes in certain balance sheet accounts.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Cash Flows
. This section, beginning on page 79, provides an analysis of our cash flows for the first quarter of 2013 and 2012.
|
|
•
|
Analysis of Financial Condition
,
Liquidity and Capital Resources
. This section, beginning on page 80, provides an analysis of selected measures of our liquidity and of our capital resources as of March 31, 2013 and December 31, 2012, as well as a discussion of our outstanding debt and other commitments that existed as of March 31, 2013 and December 31, 2012. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to help fund Pfizer's future activities.
|
|
•
|
New Accounting Standards
. This section, beginning on page 83, discusses accounting standards that we have recently adopted, as well as those that recently have been issued, but not yet adopted.
|
|
•
|
Forward-Looking Information and Factors That May Affect Future Results
. This section, beginning on page 84, provides a description of the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements presented in this MD&A relating to, among other things, our anticipated financial and operating performance, business plans and prospects, in-line products and product candidates, strategic reviews, capital allocation, business-development plans, and plans relating to share repurchases and dividends. Such forward-looking statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances.
|
|
The following table provides the components of the condensed consolidated statements of income:
|
|||||||||||
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change
|
|
||
|
Revenues
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|||||
|
Cost of sales
|
|
2,652
|
|
|
2,745
|
|
|
(3
|
)
|
||
|
% of revenues
|
|
19.6
|
%
|
|
18.4
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Selling, informational and administrative expenses
|
|
3,585
|
|
|
3,968
|
|
|
(10
|
)
|
||
|
% of revenues
|
|
26.6
|
%
|
|
26.7
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Research and development expenses
|
|
1,800
|
|
|
2,062
|
|
|
(13
|
)
|
||
|
% of revenues
|
|
13.3
|
%
|
|
13.9
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Amortization of intangible assets
|
|
1,234
|
|
|
1,420
|
|
|
(13
|
)
|
||
|
% of revenues
|
|
9.1
|
%
|
|
9.5
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Restructuring charges and certain acquisition-related costs
|
|
138
|
|
|
597
|
|
|
(77
|
)
|
||
|
% of revenues
|
|
1.0
|
%
|
|
4.0
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Other deductions––net
|
|
170
|
|
|
1,658
|
|
|
(90
|
)
|
||
|
Income from continuing operations before provision for taxes on income
|
|
3,921
|
|
|
2,435
|
|
|
61
|
|
||
|
% of revenues
|
|
29.0
|
%
|
|
16.4
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Provision for taxes on income
|
|
1,160
|
|
|
711
|
|
|
63
|
|
||
|
Effective tax rate
|
|
29.6
|
%
|
|
29.2
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Income from continuing operations
|
|
2,761
|
|
|
1,724
|
|
|
60
|
|
||
|
% of revenues
|
|
20.5
|
%
|
|
11.6
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Discontinued operations––net of tax
|
|
4
|
|
|
79
|
|
|
(95
|
)
|
||
|
|
|
|
|
|
|
|
|||||
|
Net income before allocation to noncontrolling interests
|
|
2,765
|
|
|
1,803
|
|
|
53
|
|
||
|
% of revenues
|
|
20.5
|
%
|
|
12.1
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Less: Net income attributable to noncontrolling interests
|
|
15
|
|
|
9
|
|
|
67
|
|
||
|
Net income attributable to Pfizer Inc.
|
|
$
|
2,750
|
|
|
$
|
1,794
|
|
|
53
|
|
|
% of revenues
|
|
20.4
|
%
|
|
12.1
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
|
Earnings per common share––basic:
|
|
|
|
|
|
|
|
|
|
||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.23
|
|
|
65
|
|
|
Discontinued operations––net of tax
|
|
—
|
|
|
0.01
|
|
|
(100
|
)
|
||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Earnings per common share––diluted:
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.23
|
|
|
65
|
|
|
Discontinued operations––net of tax
|
|
—
|
|
|
0.01
|
|
|
(100
|
)
|
||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash dividends paid per common share
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
9
|
|
|
The following table provides the significant impacts on revenues for the first quarter of 2013, compared to the same period in 2012:
|
||||||||||
|
|
|
Three Months Ended
|
||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31, 2013
v.
April 1, 2012
Worldwide
Change
|
|
% Change
Worldwide
|
|
% Change
U.S.
|
|
% Change
International
|
|
|
|
|
|
|
|
|
|
|||||
|
Lipitor
(a)
|
|
$
|
(769
|
)
|
(55
|
)
|
(55
|
)
|
(55
|
)
|
|
Prevnar 13/Prevenar 13
|
|
(99
|
)
|
(10
|
)
|
(19
|
)
|
2
|
|
|
|
Xalatan/Xalacom
(a)
|
|
(80
|
)
|
(35
|
)
|
(27
|
)
|
(36
|
)
|
|
|
Revatio
(a)
|
|
(64
|
)
|
(47
|
)
|
(84
|
)
|
14
|
|
|
|
Prevnar/Prevenar (7-valent)
|
|
(57
|
)
|
(41
|
)
|
—
|
|
(41
|
)
|
|
|
Detrol/Detrol LA
(a)
|
|
(44
|
)
|
(23
|
)
|
(16
|
)
|
(33
|
)
|
|
|
Zosyn/Tazocin
|
|
(41
|
)
|
(32
|
)
|
(44
|
)
|
(20
|
)
|
|
|
Viagra
|
|
(35
|
)
|
(7
|
)
|
(9
|
)
|
(5
|
)
|
|
|
Norvasc
|
|
(33
|
)
|
(10
|
)
|
(29
|
)
|
(9
|
)
|
|
|
Aricept
(b)
|
|
(32
|
)
|
(34
|
)
|
—
|
|
(34
|
)
|
|
|
Xalkori
|
|
36
|
|
212
|
|
100
|
|
*
|
|
|
|
Inlyta
|
|
56
|
|
*
|
|
*
|
|
*
|
|
|
|
Lyrica
|
|
111
|
|
12
|
|
11
|
|
12
|
|
|
|
Alliance revenues
(a)
|
|
(89
|
)
|
(11
|
)
|
9
|
|
(56
|
)
|
|
|
All other biopharmaceutical products
(a), (c)
|
|
(348
|
)
|
(16
|
)
|
(35
|
)
|
1
|
|
|
|
Animal Health (Zoetis) products
|
|
50
|
|
5
|
|
8
|
|
3
|
|
|
|
Consumer Healthcare products
|
|
84
|
|
12
|
|
16
|
|
8
|
|
|
|
(a)
|
Lipitor lost exclusivity in the U.S. in November 2011, in the majority of developed European markets in March and May 2012 and in Australia in April 2012. Xalatan/Xalacom lost exclusivity in the majority of European markets in January 2012 and in Australia in July 2012. Revatio tablet lost exclusivity in the U.S. in September 2012. Detrol immediate release (Detrol IR) lost exclusivity in the U.S. in June 2012. Detrol IR and Detrol LA lost exclusivity in most European markets in September 2012. Adversely impacting Alliance revenues were the loss of exclusivity for Aricept 5mg and 10mg tablets in the majority of European markets in February 2012 and April 2012 and the return of our rights to Aricept in Japan to Eisai Co., Ltd. in December 2012; in addition, lower revenues for Spiriva in certain European countries, Canada and Australia reflect final-year terms in 2012 of our collaboration agreements in those markets. Geodon, which is included in All other biopharmaceutical products, lost exclusivity in the U.S. in March 2012.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Includes the “All other” category included in the
Revenues—Major Biopharmaceutical Products
table presented in this MD&A, which includes sales of generic atorvastatin, which declined due to multi-source generic competition in the U.S. beginning in late May 2012.
|
|
•
|
charges for legal matters that changed favorably by approximately $897 billion (pre-tax) in the first quarter of 2013 compared to the same period in 2012 (see also the “Costs and Expenses––Other Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
Note 4. Other Deductions––Net
);
|
|
•
|
additional benefits generated from our global cost-reduction/productivity initiatives;
|
|
•
|
charges related to our non-acquisition related cost-reduction and productivity initiatives that were approximately $600 million (pre-tax) lower in the first quarter of 2013 than in the same period in 2012;
|
|
•
|
a $490 million (pre-tax) gain associated with the transfer of certain product rights to our equity-method investment in China, Hisun Pfizer Pharmaceuticals Company Limited (Hisun Pfizer) (see also the “Our Business Development Initiatives” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
);
|
|
•
|
purchase accounting charges that were approximately $214 million (pre-tax) lower in the first quarter of 2013 than in the same period in 2012; and
|
|
•
|
acquisition-related costs that were approximately $88 million (pre-tax) lower in the first quarter of 2013 than in the same period in 2012,
|
|
•
|
lower revenues, primarily due to the loss of exclusivity of Lipitor, as well as certain other products (see also "Industry-Specific Challenges" section of this MD&A).
|
|
•
|
$128 million in the
first
quarter of
2013
and $123 million in the
first
quarter of
2012
recorded as a reduction to
Revenues
, related to the higher, extended and expanded rebate provisions and the Medicare “coverage gap” discount provision; and
|
|
•
|
$55 million in the
first
quarter of
2013
and $103 million in the
first
quarter of
2012
recorded in
Selling, informational and administrative expenses
, related to the fee payable to the federal government (which is not deductible for U.S. income tax purposes) based on our prior-calendar-year share relative to other companies of branded prescription drug sales to specified government programs.
|
|
•
|
Lipitor in the U.S.––We lost exclusivity for Lipitor in the U.S. in November 2011. The entry of multi-source generic competition in the U.S. began in May 2012, with attendant increased competitive pressures.
|
|
•
|
Other recent loss of exclusivity impacts––In the U.S., we lost exclusivity for Geodon in March 2012 and Revatio tablet in September 2012. We lost exclusivity for Xalatan and Xalacom in the majority of European markets in January 2012 and Australia in July 2012. We lost exclusivity for Aricept in the majority of European markets in February 2012 and April 2012. Caduet lost exclusivity in the majority of European markets in March and May 2012. We lost exclusivity in the U.S. for Detrol IR in June 2012. Detrol IR and Detrol LA lost exclusivity in most European markets in September 2012.
|
|
•
|
Aricept—Our rights to Aricept in Japan returned to Eisai Co., Ltd. in December 2012. We expect to lose exclusivity for the Aricept 23mg tablet in the U.S. in July 2013.
|
|
•
|
Spiriva—Our collaboration with Boehringer Ingelheim (BI) for Spiriva expires on a country-by-country basis between 2012 and 2016, including the expiration in certain EU markets and Canada and Australia in 2012, which is adversely impacting our 2013 results. We expect to experience a graduated decline in revenues from Spiriva through 2016.
|
|
•
|
Enbrel—Our U.S. and Canada collaboration agreement with Amgen Inc. for Enbrel will expire in October 2013. While we are entitled to royalties for 36 months thereafter, we expect that those royalties will be significantly less than our current share of Enbrel profits from U.S. and Canada sales. Outside the U.S. and Canada, our exclusive rights to Enbrel continue in perpetuity.
|
|
•
|
Rebif—Our collaboration agreement with EMD Serono Inc. (Serono) to co-promote Rebif in the U.S. will expire either at the end of 2013 or the end of 2015, depending on the outcome of pending litigation between Pfizer and Serono concerning the interpretation of the agreement. We believe that we are entitled to a 24-month extension of the agreement to the end of 2015. Serono believes that we are not entitled to the extension and that the agreement will expire at the end of 2013. In October 2011, the Philadelphia Court of Common Pleas sustained our preliminary objections and dismissed Serono's complaint. In March 2013, the Superior Court of Pennsylvania affirmed that decision. In April 2013, Serono filed a petition with the Superior Court of Pennsylvania seeking reconsideration of the decision. For additional information, see Notes to Condensed Consolidated Financial Statements––
Note 12. Commitments and Contingencies
.
|
|
•
|
On April 29, 2013, Pfizer announced that it entered into a worldwide, except Japan, collaboration agreement with Merck & Co., Inc. (“Merck”) for the development and commercialization of Pfizer's ertugliflozin (PF-04971729), an investigational oral sodium glucose cotransporter (SGLT2) inhibitor being evaluated for the treatment of type 2 diabetes. For additional information, see Notes to Condensed Consolidated Financial Statements––
|
|
•
|
On February 6, 2013, an IPO of the Class A common stock of Zoetis was completed, pursuant to which we sold 99.015 million shares of the Class A common stock of Zoetis in exchange for the retirement of approximately $2.5 billion of Pfizer commercial paper issued in 2013. The shares of Class A common stock sold in the IPO represented approximately 19.8% of the total outstanding Zoetis shares. For additional information, see Notes to Condensed Consolidated Financial Statements––
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
and
|
|
•
|
On September 6, 2012, we and Zhejang Hisun Pharmaceuticals Co., Ltd. formed a new company, Hisun Pfizer to develop, manufacture, market and sell pharmaceutical products, primarily branded generic products, predominately in China. On January 1, 2013, we contributed assets constituting a business to this 49%-owned equity-method investment and recognized a pre-tax gain of approximately $490 million in
Other deductions––net.
For additional information, see Notes to Condensed Consolidated Financial Statements––
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment.
|
|
•
|
On November 30, 2012, we completed the sale of our Nutrition business to Nestlé for $11.85 billion in cash. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
.
|
|
•
|
On November 27, 2012, we completed our acquisition of NextWave Pharmaceuticals Incorporated (NextWave), a privately held, specialty pharmaceutical company. As a result of the acquisition, Pfizer now holds exclusive North American rights to Quillivant XR™ (methylphenidate hydrochloride), the first once-daily liquid medication approved in the U.S. for the treatment of attention deficit hyperactivity disorder. The total consideration for the acquisition was approximately $442 million. For additional information, see Notes to Condensed Consolidated Financial Statements—
|
|
•
|
On October 31, 2012, our equity-method investee, ViiV Healthcare Limited (ViiV), acquired the remaining 50% of Shionogi-ViiV Healthcare LLC, its equity-method investee, from Shionogi & Co., Ltd. (Shionogi) in consideration for a 10% interest in ViiV (newly issued shares) and contingent consideration in the form of future royalties.
|
|
•
|
On August 13, 2012, we announced that we entered into an agreement with AstraZeneca for the global over-the-counter (OTC) rights for Nexium, a leading prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. We made an upfront payment of $250 million to AstraZeneca, and AstraZeneca is eligible to receive milestone payments of up to $550 million based on product launches and level of sales as well as royalty payments based on sales. A marketing authorization application for OTC Nexium in a 20mg tablet form was filed with the European Medicines Agency in June 2012. A new drug application filing for OTC Nexium in the U.S. in a 20mg delayed-release capsule is targeted for the first half of 2013.
|
|
•
|
On March 12, 2012, Biocon and Pfizer announced the conclusion of their October 18, 2010 alliance to commercialize Biocon’s biosimilar versions of insulin and insulin analog products. The companies agreed that, due to the individual priorities for their respective biosimilars businesses, each company would move forward independently.
|
|
•
|
On February 26, 2012, we completed our acquisition of Alacer Corp. (Alacer), a company that manufactures, markets and distributes Emergen-C, a line of effervescent, powdered drink mix vitamin supplements that is the largest-selling branded vitamin C line in the U.S.
|
|
•
|
On December 1, 2011, we completed our acquisition of the consumer healthcare business of Ferrosan Holding A/S (Ferrosan), a Danish company engaged in the sale of science-based consumer healthcare products, including dietary supplements and lifestyle products, primarily in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. Our acquisition of Ferrosan’s consumer healthcare business strengthens our presence in dietary supplements with a new set of brands and pipeline products.
|
|
▪
|
Reported Revenues: The changes in foreign exchange rates in relation to the U.S. dollar from mid-January 2013 to mid-April 2013, notably the weakening of the Japanese yen.
|
|
▪
|
Adjusted Diluted EPS: The aforementioned changes in foreign exchange rates ($0.04 per share), as well as the impact of the Zoetis IPO ($0.02 per share) noted above.
|
|
▪
|
Reported Diluted EPS: The aforementioned changes in foreign exchange rates and the impact of the Zoetis IPO, as well as the gain associated with the transfer of certain product rights to Hisun Pfizer, our equity-method investment in China, partially offset by an asset impairment charge.
|
|
The following table provides a reconciliation of 2013 Adjusted income and Adjusted diluted EPS guidance to the 2013 Reported net income attributable to Pfizer Inc. and Reported diluted EPS attributable to Pfizer Inc. common shareholders guidance:
|
||||
|
|
|
Full-Year 2013 Guidance
|
||
|
(BILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
|
|
Net Income
(a)
|
|
Diluted EPS
(a)
|
|
Adjusted income/diluted EPS
(b)
guidance
|
|
$15.0 - $15.7
|
|
$2.14 - $2.24
|
|
Purchase accounting impacts of transactions completed as of March 31, 2013
|
|
(3.4)
|
|
(0.49)
|
|
Acquisition-related costs
|
|
(0.4 - 0.5)
|
|
(0.06 - 0.07)
|
|
Certain other items, including non-acquisition-related restructuring costs
|
|
(0.5 - 0.8)
|
|
(0.08 - 0.12)
|
|
Costs associated with the separation of Zoetis
|
|
(0.2)
|
|
(0.02)
|
|
Reported net income attributable to Pfizer Inc./diluted EPS guidance
|
|
$10.1 - $11.2
|
|
$1.44 - $1.59
|
|
(a)
|
Does not assume the completion of any business-development transactions not completed as of
March 31, 2013
, including any one-time upfront payments associated with such transactions. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of
March 31, 2013
.
|
|
(b)
|
For an understanding of Adjusted income and Adjusted diluted EPS, see the “Adjusted Income” section of this MD&A.
|
|
The following table provides worldwide revenues by operating segment, business unit and geographic area:
|
|||||||||||||||||||||||||||||||||
|
|
|
Worldwide
|
|
U.S.
|
|
International
|
|
World-
wide
|
|
U.S.
|
|
Inter-
national
|
|||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
% Change in Revenues
|
|||||||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Biopharmaceutical revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Primary Care Operating Segment
|
|
$
|
3,238
|
|
|
$
|
4,097
|
|
|
$
|
2,005
|
|
|
$
|
2,001
|
|
|
$
|
1,233
|
|
|
$
|
2,096
|
|
|
(21
|
)
|
|
—
|
|
|
(41
|
)
|
|
Specialty Care
|
|
3,164
|
|
|
3,580
|
|
|
1,363
|
|
|
1,618
|
|
|
1,801
|
|
|
1,962
|
|
|
(12
|
)
|
|
(16
|
)
|
|
(8
|
)
|
||||||
|
Oncology
|
|
372
|
|
|
288
|
|
|
166
|
|
|
123
|
|
|
206
|
|
|
165
|
|
|
29
|
|
|
35
|
|
|
25
|
|
||||||
|
SC&O Operating Segment
|
|
3,536
|
|
|
3,868
|
|
|
1,529
|
|
|
1,741
|
|
|
2,007
|
|
|
2,127
|
|
|
(9
|
)
|
|
(12
|
)
|
|
(6
|
)
|
||||||
|
Emerging Markets
|
|
2,420
|
|
|
2,299
|
|
|
—
|
|
|
—
|
|
|
2,420
|
|
|
2,299
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
|
Established Products
|
|
2,352
|
|
|
2,801
|
|
|
983
|
|
|
1,443
|
|
|
1,369
|
|
|
1,358
|
|
|
(16
|
)
|
|
(32
|
)
|
|
1
|
|
||||||
|
EP&EM Operating Segment
|
|
4,772
|
|
|
5,100
|
|
|
983
|
|
|
1,443
|
|
|
3,789
|
|
|
3,657
|
|
|
(6
|
)
|
|
(32
|
)
|
|
4
|
|
||||||
|
|
|
11,546
|
|
|
13,065
|
|
|
4,517
|
|
|
5,185
|
|
|
7,029
|
|
|
7,880
|
|
|
(12
|
)
|
|
(13
|
)
|
|
(11
|
)
|
||||||
|
Other product revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Animal Health (Zoetis)
|
|
1,090
|
|
|
1,040
|
|
|
454
|
|
|
422
|
|
|
636
|
|
|
618
|
|
|
5
|
|
|
8
|
|
|
3
|
|
||||||
|
Consumer Healthcare
|
|
811
|
|
|
727
|
|
|
378
|
|
|
326
|
|
|
433
|
|
|
401
|
|
|
12
|
|
|
16
|
|
|
8
|
|
||||||
|
Other Operating Segments
|
|
1,901
|
|
|
1,767
|
|
|
832
|
|
|
748
|
|
|
1,069
|
|
|
1,019
|
|
|
8
|
|
|
11
|
|
|
5
|
|
||||||
|
Other
(a)
|
|
53
|
|
|
53
|
|
|
19
|
|
|
19
|
|
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Total Revenues
|
|
$
|
13,500
|
|
|
$
|
14,885
|
|
|
$
|
5,368
|
|
|
$
|
5,952
|
|
|
$
|
8,132
|
|
|
$
|
8,933
|
|
|
(9
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|
(a)
|
Represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
•
|
the decrease in operational revenues of approximately $1.1 billion due to the loss of exclusivity of various products in certain markets, including a decrease of $792 million in operational revenues from branded Lipitor;
|
|
•
|
multi-source generic competition in the U.S. for atorvastatin beginning in late May 2012;
|
|
•
|
lower operational Alliance revenues of approximately $160 million, from Aricept due to the loss of exclusivity in the majority of European markets and the return of our rights to Aricept in Japan to Eisai Co., Ltd., and from Spiriva due to the 2012 final-year terms of our collaboration agreements in certain European countries, Canada and Australia, partially offset by an increase of approximately $60 million in operational revenues from Enbrel and Rebif;
|
|
•
|
the timing of government purchases of Prevnar 13/Prevenar 13 in various markets; and
|
|
•
|
the unfavorable impact of foreign exchange of $113 million, or 1%,
|
|
•
|
an increase in operational revenues in developed markets for certain biopharmaceutical products, particularly Lyrica, Inlyta and Xalkori; and
|
|
•
|
an increase in operational revenues in the Emerging Markets unit related to various products.
|
|
•
|
in the U.S., revenues from biopharmaceutical products decreased
13%
in the
first
quarter of
2013
, compared to the same period in
2012
, primarily reflecting lower revenues from Lipitor, Revatio, Detrol/Detrol LA and Geodon, all due to loss of exclusivity; and lower revenues from Prevnar 13/Prevenar 13, Zosyn, atorvastatin and Viagra. The impact of these adverse factors was partially offset by the strong performance of certain other biopharmaceutical products and lower reductions related to rebates.
|
|
•
|
in our international markets, revenues from biopharmaceutical products decreased
11%
in the
first
quarter of
2013
, compared to the same period in
2012
, primarily due to the loss of exclusivity of Lipitor in most of developed Europe and Australia, Xalatan/Xalacom in the majority of European markets and in Australia, and the unfavorable impact of foreign exchange of 2%. Operationally, revenues decreased 9% in the
first
quarter of
2013
, compared to the same period in
2012
. In addition to Lipitor and Xalatan/Xalacom, the decrease in operational revenues was driven by Detrol/Detrol LA and Aricept, both due to loss of exclusivity in certain markets, as well as lower Alliance revenues, primarily due to the loss of exclusivity of Aricept in many major European markets and the return of our rights to Aricept in Japan to Eisai Co., Ltd., and lower revenues for Spiriva in certain European countries, Canada and Australia (reflecting the final-year terms in 2012 of our Spiriva collaboration agreements relating to those countries), as well as lower revenues for Prevnar/Prevenar (7-valent). The impact of these adverse factors was partially offset by the operational growth of Lyrica, Inlyta and Xalkori.
|
|
•
|
Primary Care unit revenues decreased
21%
in the
first
quarter of
2013
, compared to the same period in
2012
, reflecting lower operational revenues of 20%, primarily due to the loss of exclusivity of Lipitor and the resulting shift in the reporting of Lipitor revenues in developed Europe and Australia to the Established Products unit beginning January 1, 2013, as well as the loss of exclusivity of Aricept and the near-term expiration of certain co-promotion agreements for Spiriva, partially offset by the strong performance of Lyrica in the U.S. and developed Europe, and the growth of Celebrex and Pristiq in the U.S.
|
|
•
|
Specialty Care unit revenues decreased
12%
in the
first
quarter of
2013
, compared to the same period in
2012
, due to lower operational revenues of 11%, as well as the unfavorable impact of foreign exchange. The decline in operational revenues was primarily due to lower Prevnar revenue in the U.S., mainly due to the timing of U.S. government purchases, and the losses of exclusivity and the resulting shift in the reporting of Geodon and Revatio revenues in the U.S. and Xalatan/Xalacom revenues in the developed Europe and Australia to the Established Product unit beginning January 1, 2013. Collectively, these developments reduced Specialty Care unit revenues by $442 million, or 12%, in comparison with the
first
quarter of
2012
. The decline in operational revenues was partially offset by the growth of Enbrel in the U.S.
|
|
•
|
Oncology unit revenues increased
29%
in the
first
quarter of
2013
, compared to the same period in
2012
, reflecting higher operational revenues of 31%, partially offset by the unfavorable impact of foreign exchange of 2%. Operational revenues were favorably impacted by the recent launches of new products, most notably Inlyta and Xalkori in several major markets, partially offset by the decline in Sutent revenues in the U.S., EU and Japan, due to increased competition in those markets, as well as cost containment measures in the EU and Japan and some conversion from Sutent to Inlyta in Japan due to broader label in Japan.
|
|
•
|
Established Products unit revenues decreased
16%
in the
first
quarter of
2013
compared to the same period in
2012
due to lower operational revenues of 15%, as well as the unfavorable impact of foreign exchange. The decrease in Established Products unit operational revenues in the
first
quarter of
2013
was primarily due to multi-source generic competition in the U.S. for Lipitor beginning in late May 2012, as well as continuing competitive and pricing pressures. The decrease was partially offset by revenues from products in certain markets that were shifted to the Established Products unit from other business units beginning January 1, 2013.
|
|
•
|
Emerging Markets unit revenues increased
5%
in the
first
quarter of
2013
compared to the same period in
2012
, due to higher operational revenues of 6%, partially offset by a 1% unfavorable impact of foreign exchange. The increase in Emerging Markets unit operational revenues in the
first
quarter of
2013
was primarily due to strong volume growth in China,
|
|
•
|
Animal Health (Zoetis) revenues increased
5%
in the
first
quarter of
2013
, compared to the same period in
2012
, reflecting higher operational revenues of 6%, partially offset by a 1% unfavorable impact of foreign exchange. Operational revenues from Animal Health (Zoetis) products were favorably impacted by the solid performance in both the livestock and companion animal portfolios.
|
|
•
|
Consumer Healthcare unit revenues increased
12%
in the
first
quarter of
2013
, compared to the same period in
2012
, reflecting higher operational revenues of 12%. The operational revenue increase was primarily due to the addition of Emergen-C from the acquisition of Alacer, as well as solid growth of key products, including Advil and Robitussin, partially due to a severe cold and flu season in the U.S.
|
|
The following table provides information about certain deductions from revenues:
|
||||||||
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Medicaid and related state program rebates
(a)
|
|
$
|
153
|
|
|
$
|
224
|
|
|
Medicare rebates
(a)
|
|
156
|
|
|
234
|
|
||
|
Performance-based contract rebates
(a), (b)
|
|
567
|
|
|
477
|
|
||
|
Chargebacks
(c)
|
|
993
|
|
|
932
|
|
||
|
Sales allowances
(d)
|
|
1,085
|
|
|
1,224
|
|
||
|
Total
|
|
$
|
2,954
|
|
|
$
|
3,091
|
|
|
(a)
|
Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold.
|
|
(b)
|
Performance-based contract rebates include contract rebates with managed care customers within the U.S., including health maintenance organizations and pharmacy benefit managers, who receive rebates based on the achievement of contracted performance terms and claims under these contracts. Outside of the U.S., performance-based contract rebates include rebates to wholesalers/distributors based on achievement of contracted performance for specific products or sales milestones.
|
|
(c)
|
Chargebacks primarily represent reimbursements to wholesalers for honoring contracted prices to third parties.
|
|
(d)
|
Sales allowances primarily represent pharmaceutical rebates, discounts and price reductions that are contractual or legislatively mandated outside of the U.S.
|
|
•
|
the impact of decreased Medicare and Medicaid rebates for certain products that have lost exclusivity;
|
|
•
|
changes in product mix; and
|
|
•
|
the impact on chargebacks of decreased sales for certain products that have lost exclusivity,
|
|
•
|
an increase in chargebacks for our branded products as a result of increasing competitive pressures, and increasing sales for certain generic products sold by our Greenstone unit that are subject to chargebacks; and
|
|
•
|
an increase in performance rebates in a number of European markets and China as a result of competitive factors and contract arrangements.
|
|
The following table provides revenue information for several of our major biopharmaceutical products:
|
|||||||||
|
|
|
Three Months Ended
|
|||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
|
|
|||
|
PRODUCT
|
|
PRIMARY INDICATIONS
|
|
|
% Change
(a)
|
|
|||
|
Lyrica
|
|
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
|
|
$
|
1,066
|
|
|
12
|
|
|
Enbrel (Outside the U.S. and Canada)
|
|
Rheumatoid, juvenile rheumatoid and psoriatic arthritis, plaque psoriasis and ankylosing spondylitis
|
|
877
|
|
|
(2
|
)
|
|
|
Prevnar13/Prevenar 13
|
|
Vaccine for prevention of pneumococcal disease
|
|
846
|
|
|
(10
|
)
|
|
|
Celebrex
|
|
Arthritis pain and inflammation, acute pain
|
|
653
|
|
|
3
|
|
|
|
Lipitor
|
|
Reduction of LDL cholesterol
|
|
626
|
|
|
(55
|
)
|
|
|
Viagra
|
|
Erectile dysfunction
|
|
461
|
|
|
(7
|
)
|
|
|
Zyvox
|
|
Bacterial infections
|
|
342
|
|
|
5
|
|
|
|
Sutent
|
|
Advanced and/or metastatic renal cell carcinoma (mRCC) and refractory gastrointestinal stromal tumors (GIST) and advanced pancreatic neuroendocrine tumor
|
|
302
|
|
|
1
|
|
|
|
Norvasc
|
|
Hypertension
|
|
301
|
|
|
(10
|
)
|
|
|
Premarin family
|
|
Menopause
|
|
244
|
|
|
(7
|
)
|
|
|
Genotropin
|
|
Replacement of human growth hormone
|
|
189
|
|
|
(3
|
)
|
|
|
BeneFIX
|
|
Hemophilia
|
|
189
|
|
|
3
|
|
|
|
Vfend
|
|
Fungal infections
|
|
187
|
|
|
5
|
|
|
|
Chantix/Champix
|
|
An aid to smoking cessation treatment
|
|
166
|
|
|
(7
|
)
|
|
|
Pristiq
|
|
Depression
|
|
166
|
|
|
10
|
|
|
|
Detrol/Detrol LA
|
|
Overactive bladder
|
|
151
|
|
|
(23
|
)
|
|
|
Xalatan/Xalacom
|
|
Glaucoma and ocular hypertension
|
|
147
|
|
|
(35
|
)
|
|
|
Refacto AF/Xyntha
|
|
Hemophilia
|
|
139
|
|
|
5
|
|
|
|
Zithromax/Zmax
|
|
Bacterial infections
|
|
116
|
|
|
(6
|
)
|
|
|
Zoloft
|
|
Depression and certain anxiety disorders
|
|
116
|
|
|
(11
|
)
|
|
|
Medrol
|
|
Inflammation
|
|
113
|
|
|
(16
|
)
|
|
|
Effexor
|
|
Depression and certain anxiety disorders
|
|
105
|
|
|
(19
|
)
|
|
|
Zosyn/Tazocin
|
|
Antibiotic
|
|
87
|
|
|
(32
|
)
|
|
|
Tygacil
|
|
Antibiotic
|
|
87
|
|
|
7
|
|
|
|
Relpax
|
|
Treats the symptoms of migraine headaches
|
|
86
|
|
|
1
|
|
|
|
Fragmin
|
|
Anticoagulant
|
|
86
|
|
|
(5
|
)
|
|
|
Rapamune
|
|
Immunosuppressant
|
|
84
|
|
|
2
|
|
|
|
Prevnar/Prevenar (7-valent)
|
|
Vaccine for prevention of pneumococcal disease
|
|
81
|
|
|
(41
|
)
|
|
|
Cardura
|
|
Hypertension/Benign prostatic hyperplasia
|
|
76
|
|
|
(10
|
)
|
|
|
EpiPen
|
|
Epinephrine injection used in treatment of life-threatening allergic reactions
|
|
72
|
|
|
24
|
|
|
|
Revatio
|
|
Pulmonary arterial hypertension (PAH)
|
|
72
|
|
|
(47
|
)
|
|
|
Sulperazon
|
|
Antibiotic
|
|
71
|
|
|
22
|
|
|
|
Xanax XR
|
|
Anxiety disorders
|
|
70
|
|
|
3
|
|
|
|
Inlyta
|
|
Advanced renal cell carcinoma (RCC)
|
|
63
|
|
|
*
|
|
|
|
Aricept
(b)
|
|
Alzheimer’s disease
|
|
62
|
|
|
(34
|
)
|
|
|
Unasyn
|
|
Injectable antibacterial
|
|
56
|
|
|
4
|
|
|
|
Caduet
|
|
Reduction of LDL cholesterol and hypertension
|
|
56
|
|
|
(14
|
)
|
|
|
Xalkori
|
|
Advanced non-small cell lung cancer (NSCLC)
|
|
53
|
|
|
212
|
|
|
|
Neurontin
|
|
Seizures
|
|
52
|
|
|
(10
|
)
|
|
|
Inspra
|
|
Hypertension
|
|
52
|
|
|
6
|
|
|
|
Toviaz
|
|
Overactive bladder
|
|
52
|
|
|
13
|
|
|
|
Aromasin
|
|
Breast cancer
|
|
51
|
|
|
(9
|
)
|
|
|
Dalacin/Cleocin
|
|
Antibiotic for bacterial infections
|
|
50
|
|
|
2
|
|
|
|
Alliance revenues
(c)
|
|
Various
|
|
747
|
|
|
(11
|
)
|
|
|
All other
(d)
|
|
Various
|
|
1,878
|
|
|
(16
|
)
|
|
|
(a)
|
As compared to the
three
months ended
April 1, 2012
.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Enbrel (in the U.S. and Canada), Spiriva, Rebif, Aricept and Eliquis.
|
|
(d)
|
Includes sales of generic atorvastatin.
|
|
•
|
Lyrica
is indicated for the management of post-herpetic neuralgia, neuropathic pain associated with diabetic peripheral neuropathy, the management of fibromyalgia, neuropathic pain due to spinal cord injury, and as adjunctive therapy for adult patients with partial onset seizures in the U.S. For certain countries outside the U.S., Lyrica is indicated for neuropathic pain (peripheral and central), the management of fibromyalgia, adjunctive treatment of epilepsy and general anxiety disorder. Lyrica recorded an increase in worldwide revenues of 12% in the first quarter of 2013, compared to the same period in 2012. Internationally, Lyrica revenues increased 12% in the first quarter of 2013, compared to the same period in 2012, with the growth due to a focus on enhancing the neuropathic pain diagnosis and treatment rates, the successful re-launch of the general anxiety disorder indication in the EU and physician education regarding neuropathic pain in Japan. Foreign exchange had an unfavorable impact on international revenues of 2% in the first quarter of 2013, compared to the same period in 2012. In the U.S., revenues increased 11% in the first quarter of 2013, compared to the same period in 2012. Notwithstanding these increases, U.S. revenues continue to be affected by increased competition from generic versions of competitive medicines, as well as managed care pricing and formulary pressures.
|
|
•
|
Enbrel
, for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, a type of arthritis affecting the spine, recorded a decrease in worldwide revenues, excluding the U.S. and Canada, of 2% in the first quarter of 2013, compared to the same period in 2012, primarily due to the unfavorable impact of foreign exchange and the timing of government purchases of Enbrel in certain emerging markets, partially offset by the overall growth in the anti-tumor necrosis factor (TNF) biologic market.
|
|
•
|
Prevnar 13/Prevenar 13
is our 13-valent pneumococcal conjugate vaccine for the prevention of various syndromes of pneumococcal disease in infants and young children and in adults 50 years of age and older. Prevnar 13/Prevenar 13 for use in infants and young children is marketed in the U.S. for the prevention of invasive pneumococcal disease caused by the 13 serotypes in Prevnar 13 and otitis media caused by the seven serotypes in Prevnar, and in the EU and many other international markets for the prevention of invasive pneumococcal disease, otitis media and pneumococcal pneumonia caused by the vaccine serotypes. In 2011, we received approval of Prevnar 13/Prevenar 13 for use in adults 50 years of age and older in the U.S. for the prevention of pneumococcal pneumonia and invasive pneumococcal disease caused by the 13 serotypes in Prevnar 13, and in the EU for the prevention of invasive pneumococcal disease caused by the vaccine serotypes. To date, Prevenar 13 for use in adults 50 years of age and older has been approved in over 85 countries and launched in over 55 countries. On January 25, 2013, the U.S. FDA granted approval for the expansion of Prevnar 13 for use in children ages 6 to 17 years for active immunization for the prevention of invasive disease caused by the 13 vaccine serotypes. EU approval for use in children 6 to 17 years of age was received on January 7, 2013. Worldwide revenues for Prevnar 13/Prevenar 13 decreased 10% in the first quarter of 2013, compared to the same period in 2012. In the U.S., revenues for Prevnar 13 decreased 19% in the first quarter of 2013, compared to the same period in 2012, primarily as a result of the timing of government purchases.
|
|
•
|
Celebrex
, indicated for the treatment of the signs and symptoms of osteoarthritis and rheumatoid arthritis worldwide and for the management of acute pain in adults in the U.S., Japan and certain markets in the EU, recorded an increase in worldwide revenues of 3% in the first quarter of 2013, compared to the same period in 2012. Strong operational performance in the U.S. was primarily driven by price increases, as well as strong market growth, partially offset by continued volume erosion due to ongoing generic pressures and higher rebates. However, Celebrex continued to slow the rate of volume erosion due to strong direct-to-consumer and field force promotion. Strong operational performance in international markets was driven by growth in Japan in the low back pain indication and in emerging markets in the rheumatology and orthopedic sectors, partially offset by lower developed Europe revenues in the first quarter of 2013, compared to the same period in 2012. Celebrex is supported by continued educational and promotional efforts highlighting its efficacy and safety profile for appropriate patients.
|
|
▪
|
Lipitor
is for the treatment of elevated LDL-cholesterol levels in the blood. Branded Lipitor recorded worldwide revenues of $626 million, a decrease of 55%, in the first quarter of 2013, compared to the same period in 2012 due to:
|
|
▪
|
the impact of loss of exclusivity in Japan in June 2011 (with generic competition occurring in November 2011), the U.S. (with generic competition occurring in November 2011 and multi-source generic competition occurring in May 2012), Australia in April 2012 and most of developed Europe in March 2012 and May 2012;
|
|
▪
|
the continuing impact of an intensely competitive lipid-lowering market with competition from generics and branded products worldwide; and
|
|
▪
|
increased payer pressure worldwide, including the need for flexible rebate policies.
|
|
▪
|
in the U.S., branded Lipitor revenues were $171 million, a decrease of 55% in the first quarter of 2013, compared to the same period in 2012; and
|
|
▪
|
in our international markets, branded Lipitor revenues were $455 million, a decrease of 55% in the first quarter of 2013, compared to the same period in 2012. Foreign exchange had an unfavorable impact on international revenues of $6 million in the first quarter of 2013, compared to the same period in 2012.
|
|
•
|
Viagra
is
indicated for the treatment for erectile dysfunction. Viagra worldwide revenues decreased 7% in the first quarter of 2013, compared to the same period in 2012. U.S. revenues decreased 9% in the first quarter 2013, compared to the same period in 2012, primarily due to lower prescription volume and increased chargebacks. International revenues decreased 5% compared to the same period in 2012, primarily due to branded and generic competitive pressure in developed Europe, developed markets and emerging markets, due to the impact of herbal and generic competition.
|
|
•
|
Zyvox
is the world’s best-selling branded agent among those used to treat serious Gram-positive pathogens, including methicillin-resistant staphylococcus-aureus. Zyvox worldwide revenues increased 5% in the first quarter of 2013, compared to the same period in 2012, primarily due to growth in developed markets overall and emerging markets.
|
|
•
|
Sutent
is indicated for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC); gastrointestinal stromal tumors after disease progression on, or intolerance to, imatinib mesylate; and advanced pancreatic neuroendocrine tumor. Sutent worldwide revenues increased 1% in the first quarter of 2013, compared to the same period in 2012, due to increases in uptake in key emerging markets, most notably China, Brazil and Poland, which more than offset decreases in developed markets due to increased competition, cost containment measures in the EU and Japan, as well as some conversion from Sutent to Inlyta in Japan due to broader label in Japan.
|
|
•
|
Norvasc
, for treating hypertension, lost exclusivity in the U.S. and other major markets in 2007 and in Canada in 2009. Norvasc worldwide revenues decreased 10% in the first quarter of 2013, compared to the same period in 2012.
|
|
•
|
Our
Premarin
family of products helps women address moderate-to-severe menopausal symptoms. It recorded a decrease in worldwide revenues of 7% in the first quarter of 2013, compared to the same period in 2012. U.S. revenues decreased 7% in the first quarter of 2013, compared to the same period in 2012, primarily driven by volume declines of Premarin/Prempro due to generic competition, as well as increased rebates, partially offset by volume growth of Premarin Vaginal Cream and a price increase in January 2013. Internationally, revenues were relatively flat compared to the same period in 2012.
|
|
•
|
Genotropin
, one of the world’s leading human growth hormones, is used in children for the treatment of short stature with growth hormone deficiency, Prader-Willi Syndrome, Turner Syndrome, Small for Gestational Age Syndrome, Idiopathic Short Stature (in the U.S. only) and Chronic Renal Insufficiency (outside the U.S. only), as well as in adults with growth hormone deficiency. Genotropin is supported by a broad platform of innovative injection-delivery devices and patient-support programs. Genotropin worldwide revenues decreased 3% in the first quarter of 2013, compared to the same period in 2012.
|
|
•
|
BeneFIX and ReFacto AF/Xyntha
are hemophilia products using state-of-the-art manufacturing that assist patients with their lifelong bleeding disorders. BeneFIX is the only available recombinant factor IX product for the treatment of hemophilia B, while ReFacto AF/Xyntha is a recombinant factor VIII product for the treatment of hemophilia A. Both products are indicated for the control and prevention of bleeding in patients with these disorders and in some countries are also indicated for prophylaxis in certain situations, such as surgery. BeneFIX recorded an increase in worldwide revenues of 3% in the first quarter of 2013, compared to the same period in 2012, primarily as a result of increases in the U.S. due to a launch of the new 3000 International Unit vial and price increases. ReFacto AF/Xyntha recorded an increase in worldwide revenues of 5% in the first quarter of 2013, compared to the same period in 2012, driven by the successful transition of patients to Xyntha as a result of securing a government contract in Australia, continued patient conversion to Xyntha in the U.S., as well as the successful launch of the ReFacto AF dual chamber syringe in several European countries.
|
|
•
|
Vfend
is a broad-spectrum agent for treating yeast and molds. Vfend worldwide revenues increased 5% in the first quarter of 2013, compared to the same period in 2012. International revenues increased 11% in the first quarter of 2013, compared to the same period in 2012, primarily due to increased market share in Japan. Revenues in the U.S. decreased 32% in the first quarter of 2013, compared to the same period in 2012, primarily due to the loss of exclusivity of Vfend tablets and the launch of generic voriconazole (generic Vfend) in February 2011.
|
|
•
|
Chantix/Champix
is an aid to smoking-cessation treatment in adults 18 years of age and older. Chantix/Champix worldwide revenues decreased 7% in the first quarter of 2013, compared to the same period in 2012, primarily due to negative media exposure across several key markets and macro-economic decline, which decreased patient willingness to pay out of pocket. We are continuing our educational and promotional efforts, which are focused on addressing the significant health consequences of smoking, highlighting the Chantix/Champix benefit-risk proposition, emphasizing the importance of the physician-patient dialogue in helping patients quit smoking and identifying alternative treatment-funding models.
|
|
•
|
Pristiq
is approved for the treatment of major depressive disorder in the U.S. and in various other countries. Pristiq has also been approved for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico, the Philippines and Ecuador. Pristiq recorded an increase in worldwide revenues of 10% in the first quarter of 2013, compared to the same period in 2012, primarily due to prescription growth in Canada and Australia and, in the U.S., lower contract rebates and a price increase.
|
|
•
|
Detrol/Detrol LA,
a muscarinic receptor antagonist, is one of the leading branded medicines worldwide for overactive bladder. Detrol LA is an extended-release formulation taken once a day. Detrol/Detrol LA worldwide revenues decreased 23% in the first quarter of 2013, compared to the same period in 2012, primarily due to loss of exclusivity for Detrol IR and Detrol LA in the EU in 2012 and the launch of Detrol IR generics in the U.S. in 2012. Generic competition for Detrol LA in the U.S. is expected in the first quarter of 2014.
|
|
•
|
Xalabrands
consists of
Xalatan
, a prostaglandin, which is a branded agent used to reduce elevated eye pressure in patients with open-angle glaucoma or ocular hypertension, and
Xalacom,
a fixed combination prostaglandin (Xalatan) and beta blocker (timolol) available outside the U.S. Xalatan/Xalacom worldwide revenues decreased 35% in the first quarter of 2013, compared to the same period in 2012. Lower revenues were due primarily to the loss of exclusivity in the U.S. in March 2011 and in the majority of European markets in January 2012.
|
|
•
|
Revatio
is for the treatment of pulmonary arterial hypertension (PAH). Worldwide revenues decreased 47% in the first quarter of 2013, compared to the same period in 2012. Revenues in the first quarter of 2013 were impacted by the loss of exclusivity for Revatio tablet in the U.S. in September 2012. Revatio intravenous injection will lose exclusivity in the U.S. in May 2013.
|
|
•
|
Inlyta,
for the treatment of patients with advanced renal cell carcinoma after failure of a prior systemic treatment, is approved in the U.S. (January 2012), Switzerland, Japan (June 2012), Canada, Australia, South Korea, the EU (September
|
|
•
|
Xalkori,
for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive as detected by an FDA-approved test, was approved by the FDA in August 2011. In developed markets, Xalkori has also been approved in Japan, South Korea, Canada and Switzerland, and it received conditional marketing authorization in the EU in October 2012. In addition, it has been approved in China, Russia, Mexico, India and Turkey, as well as other emerging markets, and has been filed in a number of other countries, including Brazil. Xalkori recorded worldwide revenues of $53 million in the first quarter of 2013, with 53% of those revenues generated in the U.S.
|
|
•
|
Xeljanz
was approved in the U.S. in November 2012 and in Japan in March 2013 for the treatment of adult patients with moderately to severely active rheumatoid arthritis who have had an inadequate response or intolerance to methotrexate, to be used as monotherapy or in combination with methotrexate or other nonbiologic disease-modifying antirheumatic drugs. Xeljanz recorded worldwide revenues of $11 million in the first quarter of 2013. See the “Research and Development—Product Developments—Biopharmaceutical” section of this MD&A for a discussion of the status of the regulatory submission for Xeljanz (tofacitinib) in the EU.
|
|
•
|
Alliance revenues
worldwide decreased 11% in the first quarter of 2013, compared to the same period in 2012, mainly due to the loss of exclusivity for Aricept 5mg and 10mg tablets in the U.S. in November 2010 and the entry of multi-source generic competition in the U.S. in May 2011, as well as the loss of exclusivity in many major European markets in February 2012, and lower revenues for Spiriva in certain European countries, Canada and Australia due to the expiration of our collaboration with BI in those countries, partially offset by the strong performance of Enbrel and Rebif in the U.S. We expect that the Aricept 23mg tablet will have exclusivity in the U.S. until July 2013. See the “The Industry-Specific Challenges” section of this MD&A for a discussion regarding the expiration of various contract rights relating to Aricept, Spiriva, Enbrel and Rebif. Eliquis (apixaban) is being jointly developed and commercialized by Pfizer and Bristol-Myers Squibb (BMS). In 2012, Eliquis (apixaban) was approved to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation in the 27 countries of the EU, plus Iceland and Norway, Canada, Japan and the U.S. To date, we have launched Eliquis in the U.S., UK, Germany, Denmark and Japan. The two companies share commercialization expenses and profit/losses equally on a global basis.
|
|
•
|
Embeda
—The required stability programs are underway, and we are working toward a submission with the FDA in 2013.
|
|
The following table provides information by operating segment about our R&D expenses
(see also Notes to Condensed Consolidated Financial Statements
—Note 13. Segment, Geographic and Other Revenue Information
):
|
|||||||||||
|
|
|
R&D Expenses
|
|||||||||
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change
|
|
||
|
Primary Care
(a)
|
|
$
|
223
|
|
|
$
|
241
|
|
|
(7
|
)
|
|
Specialty Care and Oncology
(a)
|
|
404
|
|
|
373
|
|
|
8
|
|
||
|
Established Products and Emerging Markets
(a)
|
|
64
|
|
|
73
|
|
|
(12
|
)
|
||
|
Other
(a), (b)
|
|
111
|
|
|
112
|
|
|
(1
|
)
|
||
|
Worldwide Research and Development/Pfizer Medical
(c)
|
|
653
|
|
|
673
|
|
|
(3
|
)
|
||
|
Corporate and other
(d)
|
|
345
|
|
|
590
|
|
|
(42
|
)
|
||
|
Total Research and Development Expenses
|
|
$
|
1,800
|
|
|
$
|
2,062
|
|
|
(13
|
)
|
|
(a)
|
Our operating segments, in addition to their sales and marketing responsibilities, are responsible for certain development activities. Generally, these responsibilities relate to additional indications for in-line products and in-process research and development (IPR&D) projects that have achieved proof-of-concept. R&D spending may include upfront and milestone payments for intellectual property rights.
|
|
(b)
|
Includes the Animal Health operating segment (Zoetis) and the Consumer Healthcare operating segment.
|
|
(c)
|
Worldwide Research and Development is generally responsible for human health research projects until proof-of-concept is achieved, and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. Worldwide Research and Development is also responsible for all human-health-related regulatory submissions and interactions with regulatory agencies, including all safety event activities. Pfizer Medical is responsible for quality assurance and regulatory compliance activities, which include conducting clinical trial audits and readiness reviews. The decrease in the
first
quarter of
2013
compared to the same period in
2012
results from cost savings associated with the R&D productivity initiative announced on February 1, 2011 (see the “Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A).
|
|
(d)
|
Corporate and other includes unallocated costs, primarily facility costs, information technology, share-based compensation, and restructuring-related costs. The decrease in the
first
quarter of
2013
primarily results from lower charges relating to implementing our cost-reduction and productivity initiatives
(see the “Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A).
|
|
RECENT FDA APPROVALS
|
||
|
PRODUCT
|
INDICATION
|
DATE APPROVED
|
|
Eliquis (Apixaban)
(a)
|
Prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
December 2012
|
|
Xeljanz (Tofacitinib)
|
Treatment of moderate-to-severe active rheumatoid arthritis
|
November 2012
|
|
Bosulif (Bosutinib)
|
Treatment of previously treated chronic myelogenous leukemia
|
September 2012
|
|
Lyrica (Pregabalin) Capsules CV
|
Treatment of neuropathic pain due to spinal cord injury
|
June 2012
|
|
Elelyso (Taliglucerase Alfa)
(b)
|
Treatment of adults with a confirmed diagnosis of type 1 Gaucher disease
|
May 2012
|
|
(a)
|
This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with BMS.
|
|
(b)
|
In November 2009, we entered into a license and supply agreement with Protalix BioTherapeutics, which, as amended, provides us exclusive worldwide rights, except in Israel and Brazil, to develop and commercialize Elelyso (taliglucerase alpha) for the treatment of Gaucher disease.
|
|
PENDING U.S. NEW DRUG APPLICATIONS (NDA) AND SUPPLEMENTAL FILINGS
|
||
|
PRODUCT
|
INDICATION
|
DATE FILED*
|
|
Bazedoxifene-conjugated estrogens
|
Treatment of symptoms associated with menopause and osteoporosis
|
December 2012
|
|
Tafamidis meglumine
(a)
|
Treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP)
|
February 2012
|
|
Genotropin (Somatropin rDNA Origin)
(b)
|
Replacement of human growth hormone deficiency (Mark VII multidose disposable device)
|
December 2009
|
|
Celebrex (Celecoxib)
(c)
|
Chronic pain
|
October 2009
|
|
Remoxy (Oxycodone Hydrochloride)
(d)
|
Management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
August 2008
|
|
Spiriva (Tiotropium Bromide)
(e)
|
Respimat device for chronic obstructive pulmonary disease
|
January 2008
|
|
Viviant (Bazedoxifene)
(f)
|
Osteoporosis treatment and prevention
|
August 2006
|
|
(a)
|
In May 2012, the FDA's Peripheral and Central Nervous System Drugs Advisory Committee voted that the tafamidis meglumine data provide substantial evidence of efficacy for a surrogate endpoint that is reasonably likely to predict a clinical benefit. In June 2012, the FDA issued a “complete response” letter with respect to the tafamidis NDA. The FDA has requested the completion of a second efficacy study and also has asked for additional information on the data within the current tafamidis NDA. We are continuing to work with the FDA to define a path forward.
|
|
(b)
|
In April 2010, we received a “complete response” letter from the FDA for the Genotropin Mark VII multidose disposable device submission. In August 2010, we submitted our response to address the requests and recommendations included in the FDA letter. In April 2011, we received a second “complete response” letter from the FDA, requesting additional information. We are working to address the FDA's requests for additional information.
|
|
(c)
|
In June 2010, we received a “complete response” letter from the FDA for the Celebrex chronic pain supplemental NDA. The supplemental NDA remains pending while we await the completion of ongoing studies to determine next steps.
|
|
(d)
|
In 2005, King Pharmaceuticals, Inc. (King) entered into an agreement with Pain Therapeutics, Inc. (PT) to develop and commercialize Remoxy. In August 2008, the FDA accepted the NDA for Remoxy that had been submitted by King and PT. In December 2008, the FDA issued a “complete response” letter. In March 2009, King exercised its right under the agreement with PT to assume sole control and responsibility for the development of Remoxy. In December 2010, King resubmitted the NDA for Remoxy with the FDA. In June 2011, we and PT announced that a “complete response” letter was received from the FDA with regard to the resubmission of the NDA. We have been working to address the issues raised in the letter, which primarily relate to manufacturing. We met with the FDA in March 2013 to discuss our plan to address the June 2011 "complete response" letter. We received written guidance from the FDA in May regarding required next steps, including additional clinical studies, to address the letter. Based on that guidance, we are considering our options with respect to Remoxy. If we elect to continue development of Remoxy, we would not expect to submit a response to the “complete response” letter before mid-2015.
|
|
(e)
|
Boehringer Ingelheim (BI), our alliance partner, holds the NDAs for Spiriva Handihaler and Spiriva Respimat. In September 2008, BI received a “complete response” letter from the FDA for the Spiriva Respimat submission. The FDA is seeking additional data, and we are coordinating with BI, which is working with the FDA to provide the additional information. A full response will be submitted to the FDA upon the completion of planned and ongoing studies.
|
|
(f)
|
Two “approvable” letters were received by Wyeth in April and December 2007 from the FDA for Viviant (bazedoxifene), for the prevention of post-menopausal osteoporosis, that set forth the additional requirements for approval. In May 2008, Wyeth received an “approvable” letter from the FDA for the treatment of post-menopausal osteoporosis. The FDA is seeking additional data, and we have been systematically working through these requirements and seeking to address the FDA's concerns. In February 2008, the FDA advised Wyeth that it expects to convene an advisory committee to review the pending NDAs for both the treatment and prevention indications after we submit our response to the “approvable” letters. If and when our NDA for bazedoxifene-conjugated estrogens is approved by the FDA, we will reassess the next steps regarding our NDAs for Viviant. In April 2009, Wyeth received approval in the EU for CONBRIZA (the EU trade name for Viviant) for the treatment of post-menopausal osteoporosis in women at increased risk of fracture. Viviant was also approved in Japan in July 2010 for the treatment of post-menopausal osteoporosis and in South Korea in November 2011 for the treatment and prevention of post-menopausal osteoporosis.
|
|
REGULATORY APPROVALS AND FILINGS IN THE EU AND JAPAN
|
|||
|
PRODUCT
|
DESCRIPTION OF EVENT
|
DATE APPROVED
|
DATE FILED*
|
|
Bosulif (Bosutinib)
|
Conditional marketing authorization in the EU for treatment of previously treated chronic myelogenous leukemia
|
March 2013
|
—
|
|
Xeljanz (Tofacitinib)
|
Approval in Japan for treatment of rheumatoid arthritis
|
March 2013
|
—
|
|
Tafamidis meglumine
|
Application filed in Japan for treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP)
|
—
|
February 2013
|
|
Lyrica (Pregabalin)
|
Approval in Japan for treatment of neuropathic pain
|
February 2013
|
—
|
|
Eliquis (Apixaban)
(a)
|
Approval in Japan for prevention of ischemic stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
December 2012
|
—
|
|
Toviaz (Fesoterodine)
|
Approval in Japan for treatment of overactive bladder
|
December 2012
|
—
|
|
Eliquis (Apixaban)
(a)
|
Approval in the EU for prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
November 2012
|
—
|
|
Xalkori (Crizotinib)
|
Conditional marketing authorization in the EU for treatment of previously treated ALK-positive advanced non-small cell lung cancer
|
October 2012
|
—
|
|
Inlyta (Axitinib)
|
Approval in the EU for treatment of advanced renal cell carcinoma after failure of prior systemic treatment
|
September 2012
|
—
|
|
Sutent (Sunitinib)
|
Approval in Japan for treatment of pancreatic neuroendocrine tumor
|
August 2012
|
—
|
|
Bazedoxifene-conjugated estrogens
|
Application filed in the EU for treatment of symptoms associated with menopause and osteoporosis
|
—
|
July 2012
|
|
Prevenar 13 Infant
|
Application filed in Japan for prevention of invasive pneumococcal disease in infants and young children
|
—
|
July 2012
|
|
Lyrica (Pregabalin)
|
Approval in Japan for treatment of fibromyalgia
|
June 2012
|
—
|
|
Inlyta (Axitinib)
|
Approval in Japan for treatment of renal cell carcinoma not indicated for curative resection, metastatic renal cell carcinoma
|
June 2012
|
—
|
|
Tofacitinib
(b)
|
Application filed in the EU for treatment of moderate-to-severe active rheumatoid arthritis
|
—
|
November 2011
|
|
*
|
For applications in the EU, the dates set forth in this column are the dates on which the European Medicines Agency (EMA) validated our submissions.
|
|
(a)
|
This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with BMS.
|
|
(b)
|
In April 2013, the EMA's Committee for Medicinal Products for Human Use (CHMP) issued an opinion recommending against approval of tofacitinib for the treatment of adult patients with moderate-to-severe active rheumatoid arthritis. We are seeking a re-examination of the opinion by the CHMP.
|
|
LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS
FOR IN-LINE AND IN-REGISTRATION PRODUCTS
|
|
|
PRODUCT
|
INDICATION
|
|
Eliquis (Apixaban)
|
For the prevention and treatment of venous thromboembolism, which is being developed in collaboration with BMS
|
|
Inlyta (Axitinib)
|
Oral and selective inhibitor of vascular endothelial growth factor (VEGF) receptor 1, 2 & 3 for the treatment of adjuvant renal cell carcinoma (Asia only)
|
|
Lyrica (Pregabalin)
|
Peripheral neuropathic pain; CR (once-a-day) dosing
|
|
Sutent (Sunitinib)
|
Adjuvant renal cell carcinoma
|
|
Tofacitinib
|
A JAK kinase inhibitor for the treatment of psoriasis and ulcerative colitis
|
|
Xalkori (Crizotinib)
|
An oral ALK and c-Met inhibitor for the treatment of ALK-positive 1st and 2nd line (supports potential full approval in the U.S.) non-small cell lung cancer
|
|
Zithromax/chloroquine
|
Malaria
|
|
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
|
|
|
CANDIDATE
|
INDICATION
|
|
ALO-02
|
A Mu-type opioid receptor agonist for the management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
|
Dacomitinib
|
A pan-HER tyrosine kinase inhibitor for the treatment of patients with advanced non-small cell lung cancer after at least one chemotherapy regimen or resistant or refractory to prior therapy regimen, including EGFR TKI; also, first-line treatment of patients with advanced non-small cell lung cancer with EGFR activating mutations
|
|
Inotuzumab ozogamicin
|
An antibody drug conjugate, consisting of an anti-CD22 monotherapy antibody linked to a cytotoxic agent, calicheamycin, for the treatment of aggressive Non-Hodgkin's Lymphoma and acute lymphoblastic leukemia
|
|
MnB rLP2086
(PF-05212366)
|
A prophylactic vaccine for prevention of
Neisseria meningitidis
serogroup B invasive disease in adolescents and young adults (ages 11-25)
|
|
Palbociclib (PD-0332991)
|
An oral and selective reversible inhibitor of the CDK 4 and 6 kinases for the treatment of patients with estrogen receptor-positive, human epidermal growth factor receptor 2- negative advanced breast cancer
|
|
Tanezumab
(a)
|
An anti-nerve growth factor monoclonal antibody for the treatment of pain (on clinical hold)
|
|
(a)
|
The FDA's partial clinical hold placed on nerve growth factor (NGF) inhibitors in 2010 due to adverse events involving joint destruction was lifted completely from the tanezumab program for all indications in August 2012 as a result of a submission by Pfizer to the FDA in July 2012. In December 2012, the FDA placed a new partial clinical hold on the development of NGF inhibitors, including tanezumab. The partial clinical hold was based on peripheral nervous system effects observed in animal studies conducted with NGF inhibitors by other companies. Current and future studies of tanezumab in cancer pain are not affected by this partial clinical hold. We are working with the FDA to determine the appropriate path forward.
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change
|
|
||
|
Cost of sales
|
|
$
|
2,652
|
|
|
$
|
2,745
|
|
|
(3
|
)
|
|
•
|
lower costs related to our global cost-reduction/productivity initiatives and acquisition-related costs, as well as increased benefits generated from the ongoing productivity initiatives to streamline the manufacturing network,
|
|
•
|
an unfavorable shift in geographic, product and business mix due to products that lost exclusivity in various markets.
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change
|
|
||
|
Selling, informational and administrative expenses
|
|
$
|
3,585
|
|
|
$
|
3,968
|
|
|
(10
|
)
|
|
•
|
savings generated from a reduction in the field force, partly in response to product losses of exclusivity;
|
|
•
|
more streamlined corporate support functions; and
|
|
•
|
the favorable impact of foreign exchange of 1%.
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
Research and development expenses
|
|
$
|
1,800
|
|
|
$
|
2,062
|
|
|
(13
|
)
|
|
•
|
savings generated by the discontinuation of certain therapeutic areas and R&D programs in connection with our previously announced global cost-reduction/productivity initiatives.
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
Costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
312
|
|
|
$
|
1,000
|
|
|
(69
|
)
|
|
•
|
In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and
|
|
•
|
In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.
|
|
•
|
The closing of duplicative facilities and other site rationalization actions Company-wide, including research and development facilities, manufacturing plants, sales offices and other corporate facilities. Among the more significant actions are the following:
|
|
◦
|
Manufacturing: After the acquisition of Wyeth, our manufacturing sites totaled 75. Other acquisitions have added 21 manufacturing sites, and we have subsequently exited 15 sites, resulting in 81 sites supporting continuing operations as of March 31, 2013. Our plant network strategy will result in the exit of a further six sites over the next several years. These site counts exclude five Nutrition business-related manufacturing sites as the Nutrition business was sold in 2012. See Notes to Condensed Consolidated Financial Statements—
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
for more information.
|
|
◦
|
Research and Development: After the acquisition of Wyeth, we operated in 20 R&D sites and announced that we would close a number of sites. We have completed a number of site closures, including our Sandwich, U.K. research and development facility, except for a small presence. In addition, in 2011, we rationalized several other sites to reduce and optimize the overall R&D footprint. We disposed of our toxicology site in Catania, Italy; exited our R&D sites in Aberdeen and Gosport, U.K.; and disposed of a vacant site in St. Louis, MO. We still maintain laboratories in St. Louis, MO, that focus on the areas of biologics and indications discovery. We are presently marketing for sale, lease or sale/lease-back, either a portion of or all of certain of our R&D campuses. Locations with R&D operations are in the U.S., Europe, Canada and China, with five major research sites in addition to a number of specialized units. We also re-prioritized our commitments to disease areas and have discontinued certain therapeutic areas and R&D programs as part of our R&D productivity initiative. Our research primarily focuses on five high-priority areas that have a mix of small and large molecules—immunology and inflammation; oncology; cardiovascular and metabolic diseases; neuroscience and pain; and vaccines.
|
|
•
|
Workforce reductions across all areas of our business and other organizational changes, primarily in the U.S. field force, manufacturing, R&D and corporate functions. We identified areas for a reduction in workforce across all of our businesses. In January 2009, when Pfizer and Wyeth entered into the merger agreement, the workforce of the two companies totaled approximately 130,000. We exceeded our original target to reduce the combined Pfizer/Wyeth workforce by 15%, or 19,500, within three years. By the end of 2012, we achieved a reduction of 38,500, and by the end of the first quarter of 2013, we achieved a reduction of 40,600. In the first quarter of 2013, the workforce declined by 2,100, from 91,500 to 89,400, primarily in Primary Care and Emerging Markets. The aforementioned workforce reductions include the impact of acquisitions and divestitures subsequent to the Wyeth acquisition.
|
|
•
|
The increased use of shared services and centers of excellence.
|
|
•
|
Procurement savings.
|
|
The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives:
|
||||||||
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Integration costs
(a)
|
|
$
|
39
|
|
|
$
|
100
|
|
|
Restructuring charges:
(b)
|
|
|
|
|
|
|
||
|
Employee terminations
|
|
(20
|
)
|
|
267
|
|
||
|
Asset impairments
|
|
105
|
|
|
218
|
|
||
|
Exit costs
|
|
14
|
|
|
12
|
|
||
|
Restructuring charges and certain acquisition-related costs
|
|
138
|
|
|
597
|
|
||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows:
(c)
|
|
|
|
|
|
|
||
|
Cost of sales
|
|
33
|
|
|
79
|
|
||
|
Selling, informational and administrative expenses
|
|
12
|
|
|
2
|
|
||
|
Research and development expenses
|
|
90
|
|
|
259
|
|
||
|
Total additional depreciation––asset restructuring
|
|
135
|
|
|
340
|
|
||
|
Implementation costs recorded in our condensed consolidated statements of income as follows:
(d)
|
|
|
|
|
|
|
||
|
Cost of sales
|
|
6
|
|
|
—
|
|
||
|
Selling, informational and administrative expenses
|
|
30
|
|
|
15
|
|
||
|
Research and development expenses
|
|
3
|
|
|
48
|
|
||
|
Total implementation costs
|
|
39
|
|
|
63
|
|
||
|
Total costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
312
|
|
|
$
|
1,000
|
|
|
(a)
|
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.
|
|
(b)
|
From the beginning of our cost-reduction/productivity initiatives in
2005
through
March 31, 2013
,
Employee termination costs
represent the expected reduction of the workforce by approximately
62,000
employees, mainly in manufacturing and sales and research, of which approximately
54,000
employees have been terminated as of
March 31, 2013
. For the
three
months ended
March 31, 2013
, the credit to employee terminations reflects a change in estimate related to the number of employees to be terminated and the expected total cost of planned terminations.
|
|
•
|
Primary Care operating segment (
$5 million
income), Specialty Care and Oncology operating segment (
$6 million
), Established Products and Emerging Markets operating segment (
$11 million
), other operating segments (
$2 million
), research and development operations (
$2 million
), manufacturing operations (
$4 million
) and Corporate (
$79 million
).
|
|
•
|
Primary Care operating segment (
$3 million
), Specialty Care and Oncology operating segment (
$3 million
), Established Products and Emerging Markets operating segment (
$3 million
), other operating segments (
$6 million
), research and development operations (
$12 million
), manufacturing operations (
$152 million
) and Corporate (
$318 million
).
|
|
(c)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(d)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
|
|
The following table provides the components of and changes in our restructuring accruals:
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Employee
Termination
Costs/(Credits)
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2012
(a)
|
|
$
|
1,793
|
|
|
$
|
—
|
|
|
$
|
157
|
|
|
$
|
1,950
|
|
|
Provision
|
|
(20
|
)
|
|
105
|
|
|
14
|
|
|
99
|
|
||||
|
Utilization and other
(b)
|
|
(340
|
)
|
|
(105
|
)
|
|
(33
|
)
|
|
(478
|
)
|
||||
|
Balance, March 31, 2013
(c)
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
1,571
|
|
|
(a)
|
Included in
Other current liabilities
($1.2 billion) and
Other noncurrent liabilities
($731 million).
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
($
919 million
) and
Other noncurrent liabilities
($
652 million
).
|
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
Other deductions—net
|
|
$
|
170
|
|
|
$
|
1,658
|
|
|
(90
|
)
|
|
•
|
charges for litigation-related matters that changed favorably by approximately $897 million in the first quarter of 2013 compared to the same period in 2012 (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 4. Other Deductions—Net
); and
|
|
•
|
a $490 million gain associated with the transfer of certain product rights to our equity-method investment in China (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment
).
|
|
|
|
Three Months Ended
|
||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
||
|
Provision for taxes on income
|
|
$
|
1,160
|
|
|
$
|
711
|
|
|
63
|
|
Effective tax rate on continuing operations
|
|
29.6
|
%
|
|
29.2
|
%
|
|
|
||
|
The following table provides the components of
Discontinued operations—net of tax
, virtually all of which relate to our former Nutrition business:
|
||||
|
|
|
Three Months Ended
|
||
|
(MILLIONS OF DOLLARS)
|
|
April 1,
2012 |
|
|
|
Revenues
|
|
$
|
520
|
|
|
Pre-tax income from discontinued operations
|
|
$
|
117
|
|
|
Provision for taxes on income
(a)
|
|
38
|
|
|
|
Discontinued operations––net of tax
|
|
$
|
79
|
|
|
(a)
|
Includes a deferred tax benefit of $8 million.
|
|
•
|
senior management receives a monthly analysis of our operating results that is prepared on an Adjusted income basis;
|
|
•
|
our annual budgets are prepared on an Adjusted income basis; and
|
|
•
|
senior management’s annual compensation is derived, in part, using this Adjusted income measure. Adjusted income is one of the performance metrics utilized in the determination of bonuses under the Pfizer Inc. Executive Annual Incentive Plan that is designed to limit the bonuses payable to the Executive Leadership Team (ELT) for purposes of Internal Revenue Code Section 162(m). Subject to the Section 162(m) limitation, the bonuses are funded from a pool based on the achievement of three financial metrics, including adjusted diluted earnings per share, which is derived from Adjusted income. This metric accounts for 40% of the bonus pool made available to ELT members and other members of senior management and will constitute a factor in determining each of these individual’s bonus.
|
|
The following table provides a reconciliation of
Net income attributable to Pfizer Inc.,
as reported under U.S. GAAP, and Non-GAAP Adjusted income:
|
|||||||||||
|
|
|
Three Months Ended
|
|||||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
GAAP Reported net income attributable to Pfizer Inc.
|
|
$
|
2,750
|
|
|
$
|
1,794
|
|
|
53
|
|
|
Purchase accounting adjustments––net of tax
|
|
892
|
|
|
1,062
|
|
|
(16
|
)
|
||
|
Acquisition-related costs––net of tax
|
|
68
|
|
|
116
|
|
|
(41
|
)
|
||
|
Discontinued operations––net of tax
|
|
(4
|
)
|
|
(79
|
)
|
|
95
|
|
||
|
Certain significant items––net of tax
|
|
205
|
|
|
1,451
|
|
|
(86
|
)
|
||
|
Non-GAAP Adjusted income
(a)
|
|
$
|
3,911
|
|
|
$
|
4,344
|
|
|
(10
|
)
|
|
(a)
|
The effective tax rate on Non-GAAP Adjusted income was 26.9% in the
first
quarter of
2013
, compared with 29.0% in the
first
quarter of
2012
. The tax rate in
2013
compared to the same period in
2012
was favorably impacted by the change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business, as well as the extension of the U.S. R&D tax credit, which was signed into law in January 2013, resulting in the full-year benefit of the 2012 R&D tax credit and a portion of the 2013 R&D tax credit being recorded in the first quarter of 2013.
|
|
The following table provides a reconciliation of Reported diluted EPS, as reported under U.S. GAAP, and Non-GAAP Adjusted diluted EPS:
|
|||||||||||
|
|
|
Three Months Ended
|
|||||||||
|
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
Earnings per common share––diluted
(a)
|
|
|
|
|
|
|
|||||
|
GAAP Reported income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.38
|
|
|
$
|
0.23
|
|
|
65
|
|
|
Income from discontinued operations––net of tax
|
|
—
|
|
|
0.01
|
|
|
(100
|
)
|
||
|
GAAP Reported net income attributable to Pfizer Inc. common shareholders
|
|
0.38
|
|
|
0.24
|
|
|
58
|
|
||
|
Purchase accounting adjustments––net of tax
|
|
0.12
|
|
|
0.14
|
|
|
(14
|
)
|
||
|
Acquisition-related costs––net of tax
|
|
0.01
|
|
|
0.02
|
|
|
(50
|
)
|
||
|
Discontinued operations––net of tax
|
|
—
|
|
|
(0.01
|
)
|
|
100
|
|
||
|
Certain significant items––net of tax
|
|
0.03
|
|
|
0.19
|
|
|
(84
|
)
|
||
|
Non-GAAP Adjusted income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.54
|
|
|
$
|
0.57
|
|
|
(5
|
)
|
|
(a)
|
EPS amounts may not add due to rounding.
|
|
Adjusted income, as shown above, excludes the following items:
|
||||||||
|
|
|
Three Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
||
|
Purchase accounting adjustments
|
|
|
|
|
||||
|
Amortization, depreciation and other
(a)
|
|
$
|
1,237
|
|
|
$
|
1,438
|
|
|
Cost of sales, primarily related to fair value adjustments of acquired inventory
|
|
(5
|
)
|
|
8
|
|
||
|
Total purchase accounting adjustments––pre-tax
|
|
1,232
|
|
|
1,446
|
|
||
|
Income taxes
(b)
|
|
(339
|
)
|
|
(384
|
)
|
||
|
Total purchase accounting adjustments––net of tax
|
|
893
|
|
|
1,062
|
|
||
|
Purchase accounting adjustments––net of tax, attributable to noncontrolling interests
|
|
(1
|
)
|
|
—
|
|
||
|
Total purchase accounting adjustments––net of tax, attributable to Pfizer Inc.
|
|
892
|
|
|
1,062
|
|
||
|
Acquisition-related costs
|
|
|
|
|
|
|
||
|
Integration costs
(c)
|
|
39
|
|
|
100
|
|
||
|
Restructuring charges
(c)
|
|
21
|
|
|
(2
|
)
|
||
|
Additional depreciation––asset restructuring
(d)
|
|
35
|
|
|
85
|
|
||
|
Total acquisition-related costs––pre-tax
|
|
95
|
|
|
183
|
|
||
|
Income taxes
(b)
|
|
(27
|
)
|
|
(67
|
)
|
||
|
Total acquisition-related costs––net of tax
|
|
68
|
|
|
116
|
|
||
|
Discontinued operations
|
|
|
|
|
|
|
||
|
Total discontinued operations––net of tax
|
|
(4
|
)
|
|
(79
|
)
|
||
|
Certain significant items
|
|
|
|
|
|
|
||
|
Restructuring charges
(e)
|
|
78
|
|
|
499
|
|
||
|
Implementation costs and additional depreciation––asset restructuring
(f)
|
|
139
|
|
|
318
|
|
||
|
Gain associated with the transfer of certain product rights to an equity-method investment
(g)
|
|
(490
|
)
|
|
—
|
|
||
|
Certain legal matters
(h)
|
|
(87
|
)
|
|
775
|
|
||
|
Certain asset impairment charges
(h)
|
|
396
|
|
|
412
|
|
||
|
Costs associated with the separation of Zoetis
(i)
|
|
76
|
|
|
38
|
|
||
|
Other
|
|
16
|
|
|
25
|
|
||
|
Total certain significant items––pre-tax
|
|
128
|
|
|
2,067
|
|
||
|
Income taxes
(b)
|
|
80
|
|
|
(616
|
)
|
||
|
Total certain significant items––net of tax
|
|
208
|
|
|
1,451
|
|
||
|
Certain significant items––net of tax, attributable to noncontrolling interests
|
|
(3
|
)
|
|
—
|
|
||
|
Total certain significant items––net of tax, attributable to Pfizer Inc.
|
|
205
|
|
|
1,451
|
|
||
|
Total purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items––net of tax, attributable to Pfizer Inc.
|
|
$
|
1,161
|
|
|
$
|
2,550
|
|
|
(a)
|
Included primarily in
Amortization of intangible assets.
|
|
(b)
|
Included in
Provision for taxes on income.
Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate (see Notes to Condensed Consolidated Financial Statements—
|
|
(c)
|
Included in
Restructuring charges and certain acquisition-related costs
(see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(d)
|
Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions. For the first quarter of 2013, included in
Cost of sales
($33 million) and
Selling, informational and administrative expenses
($2 million). For the first quarter of 2012, included in
Cost of sales
($79 million),
Research and development expenses
($5 million) and
Selling, informational and administrative expenses
($1 million).
|
|
(e)
|
Represents restructuring charges incurred for our cost-reduction/productivity initiatives. Included in
Restructuring charges and certain acquisition-related costs
(see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(f)
|
Amounts primarily relate to our cost-reduction/productivity initiatives (see Notes to Condensed Consolidated Financial Statements—
|
|
(g)
|
Represents the gain associated with the transfer of certain product rights to our equity-method investment in China (see Notes to Condensed Consolidated Financial Statements—
Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment
).
|
|
(h)
|
Included in
Other deductions
—
net
(see the "Other Deductions—Net" section of this MD&A and Notes to Condensed Consolidated Financial Statements—
Note 4. Other Deductions
—
Net
)
.
|
|
(i)
|
Costs incurred in connection with the initial public offering of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services, as well as consulting and systems costs. In the first quarter of 2013, included in
Selling, informational and administrative expenses
($56 million),
Other deductions
—
net
($17 million) and
Cost of sales
($3 million). In the first quarter of 2012, included in
Other deductions
—
net
($32 million) and
Selling, informational and administrative expenses
($6 million).
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
(MILLIONS OF DOLLARS)
|
|
March 31,
2013 |
|
|
April 1,
2012 |
|
|
%
Change |
|
||
|
Cash provided by/(used in):
|
|
|
|
|
|
|
|||||
|
Operating activities
|
|
$
|
2,241
|
|
|
$
|
2,774
|
|
|
(19
|
)
|
|
Investing activities
|
|
(10,930
|
)
|
|
451
|
|
|
*
|
|
||
|
Financing activities
|
|
434
|
|
|
(3,507
|
)
|
|
*
|
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
—
|
|
|
34
|
|
|
(100
|
)
|
||
|
Net decrease in
Cash and cash equivalents
|
|
$
|
(8,255
|
)
|
|
$
|
(248
|
)
|
|
*
|
|
|
*
|
Calculation not meaningful.
|
|
•
|
the loss of exclusivity of Lipitor and other products, resulting in lower revenues and associated expenses (see also the “Industry-Specific Challenges” section of this MD&A), partially offset by spending reductions resulting from our company-wide cost-reduction/productivity initiatives; and
|
|
•
|
the timing of receipts and payments in the ordinary course of business.
|
|
•
|
net purchases of investments of $10.8 billion in the first quarter of 2013, compared to net proceeds from redemptions and sales of investments of $1.5 billion in the first quarter of 2012,
|
|
•
|
cash paid of $782 million, net of cash acquired, for our acquisitions of Alacer and Ferrosan in the first quarter of 2012.
|
|
•
|
net proceeds from borrowings of $6.1 billion in the first quarter of 2013, compared to net repayments of borrowings of $233 million in the first quarter of 2012; and
|
|
•
|
increased proceeds from the exercise of stock options,
|
|
•
|
purchases of common stock of $4.6 billion in the first quarter of 2013, compared to $1.7 billion in the first quarter of 2012; and
|
|
•
|
higher cash dividends paid.
|
|
•
|
the working capital requirements of our operations, including our research and development activities;
|
|
•
|
investments in our business;
|
|
•
|
dividend payments and potential increases in the dividend rate;
|
|
•
|
share repurchases;
|
|
•
|
the cash requirements associated with our cost-reduction/productivity initiatives;
|
|
•
|
paying down outstanding debt;
|
|
•
|
contributions to our pension and postretirement plans; and
|
|
•
|
business-development activities.
|
|
The following table provides certain relevant measures of our liquidity and capital resources:
|
||||||||
|
(MILLIONS OF DOLLARS, EXCEPT RATIOS AND PER COMMON SHARE DATA)
|
|
March 31,
2013 |
|
|
December 31,
2012 |
|
||
|
Selected financial assets:
|
|
|
|
|
||||
|
Cash and cash equivalents
(a)
|
|
$
|
2,134
|
|
|
$
|
10,389
|
|
|
Short-term investments
(a)
|
|
33,212
|
|
|
22,319
|
|
||
|
Long-term investments
(a)
|
|
15,392
|
|
|
14,149
|
|
||
|
|
|
50,738
|
|
|
46,857
|
|
||
|
Debt:
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
8,896
|
|
|
6,424
|
|
||
|
Zoetis long-term debt
(b)
|
|
3,640
|
|
|
—
|
|
||
|
Other long-term debt
|
|
27,841
|
|
|
31,036
|
|
||
|
|
|
40,377
|
|
|
37,460
|
|
||
|
Net financial assets
(c)
|
|
$
|
10,361
|
|
|
$
|
9,397
|
|
|
|
|
|
|
|
||||
|
Working capital
|
|
$
|
37,220
|
|
|
$
|
32,796
|
|
|
Ratio of current assets to current liabilities
|
|
2.35
|
:1
|
|
2.15
|
:1
|
||
|
Total Pfizer Inc. shareholders' equity per common share
(d)
|
|
$
|
11.51
|
|
|
$
|
11.17
|
|
|
(a)
|
See Notes to Condensed Consolidated Financial Statements––
|
|
(b)
|
Issued by Zoetis, our Animal Health subsidiary. For additional information, see Notes to Condensed Consolidated Financial Statements––
|
|
(c)
|
Net financial assets increased as operating cash flow and the net impact of the Zoetis debt offering and IPO were partially offset by share repurchases and dividend payments. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows
”
section of this MD&A.
|
|
(d)
|
Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares and shares held by our employee benefit trust).
|
|
The following table provides the current ratings assigned by these rating agencies to Pfizer Inc. commercial paper and senior unsecured non-credit-enhanced long-term debt:
|
|||||
|
Name of Rating Agency
|
Pfizer
Commercial Paper
|
|
Pfizer
Long-Term Debt
|
Date of Last Action
|
|
|
Rating
|
|
Rating
|
Outlook
|
||
|
Moody’s
|
P-1
|
|
A1
|
Stable
|
October 2009
|
|
S&P
|
A1+
|
|
AA
|
Stable
|
October 2009
|
|
The following table provides the current ratings assigned by these rating agencies to commercial paper and senior unsecured non-credit-enhanced long-term debt issued by our subsidiary, Zoetis:
|
|||||
|
Name of Rating Agency
|
Zoetis
Commercial Paper
|
|
Zoetis
Long-Term Debt
|
Date of Action
|
|
|
Rating
|
|
Rating
|
Outlook
|
||
|
Moody’s
|
P-2
|
|
Baa2
|
Stable
|
January 2013
|
|
S&P
|
A-3
|
|
BBB-
|
Stable
|
January 2013
|
|
•
|
the outcome of research and development activities including, without limitation, the ability to meet anticipated clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates, as well as the possibility of unfavorable clinical trial results, including unfavorable new clinical data and additional analyses of existing clinical data;
|
|
•
|
decisions by regulatory authorities regarding whether and when to approve our drug applications, as well as their decisions regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products;
|
|
•
|
the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
|
|
•
|
the outcome of post-approval clinical trials, which could result in the loss of marketing approval for a product or changes in the labeling for, and/or increased or new concerns about the safety or efficacy of, a product that could affect its availability or commercial potential;
|
|
•
|
the success of external business-development activities;
|
|
•
|
competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;
|
|
•
|
the implementation by the FDA of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products in the U.S., with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;
|
|
•
|
the ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;
|
|
•
|
the ability to successfully market both new and existing products domestically and internationally;
|
|
•
|
difficulties or delays in manufacturing;
|
|
•
|
trade buying patterns;
|
|
•
|
the impact of existing and future legislation and regulatory provisions on product exclusivity;
|
|
•
|
trends toward managed care and healthcare cost containment;
|
|
•
|
the impact of the U.S. Budget Control Act of 2011 (the Budget Control Act) and the deficit-reduction actions to be taken pursuant to the Budget Control Act in order to achieve the deficit-reduction targets provided for therein, and the impact of any broader deficit-reduction efforts;
|
|
•
|
the possible failure of the U.S. federal government to suspend enforcement of the federal debt ceiling beyond May 18, 2013 or to increase the federal debt ceiling and any resulting inability of the U.S. federal government to satisfy its financial obligations, including under Medicare, Medicaid and other publicly funded or subsidized health programs;
|
|
•
|
the impact of U.S. healthcare legislation enacted in 2010—the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act––and of any modification or repeal of any of the provisions thereof;
|
|
•
|
U.S. legislation or regulatory action affecting, among other things, pharmaceutical product pricing, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; direct-to-consumer advertising and interactions with healthcare professionals; and the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines;
|
|
•
|
legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access, including, in particular, continued government-mandated price reductions for certain biopharmaceutical products in certain European and emerging market countries;
|
|
•
|
the exposure of our operations outside the U.S. to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest and unstable governments and legal systems;
|
|
•
|
contingencies related to actual or alleged environmental contamination;
|
|
•
|
claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;
|
|
•
|
any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;
|
|
•
|
legal defense costs, insurance expenses, settlement costs, the risk of an adverse decision or settlement and the adequacy of reserves related to product liability, patent protection, government investigations, consumer, commercial, securities, antitrust, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings;
|
|
•
|
our ability to protect our patents and other intellectual property, both domestically and internationally;
|
|
•
|
interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;
|
|
•
|
governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside the U.S. that may result from pending and possible future proposals;
|
|
•
|
any significant issues involving our largest wholesaler customers, which account for a substantial portion of our revenues;
|
|
•
|
the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;
|
|
•
|
any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal requirements and industry standards;
|
|
•
|
changes in U.S. generally accepted accounting principles;
|
|
•
|
uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; and the related risk that our allowance for doubtful accounts may not be adequate;
|
|
•
|
any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;
|
|
•
|
growth in costs and expenses;
|
|
•
|
changes in our product, segment and geographic mix;
|
|
•
|
our ability to successfully implement any strategic alternative that we decide to pursue with regard to our remaining approximately 80% ownership interest in Zoetis Inc. and the impact thereof; and
|
|
•
|
the impact of acquisitions, divestitures, restructurings, product recalls and withdrawals and other unusual items, including our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to our research and development organization.
|
|
Period
|
Total Number of
Shares Purchased
(b)
|
|
Average Price
Paid per Share
(b)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
(a)
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan
(a)
|
|
||
|
January 1, 2013, through January 27, 2013
|
45,302,728
|
|
$
|
26.19
|
|
45,066,964
|
|
$
|
10,625,189,395
|
|
|
January 28, 2013, through February 24, 2013
|
55,099,679
|
|
$
|
27.23
|
|
54,836,978
|
|
$
|
9,131,951,425
|
|
|
February 25, 2013, through March 31, 2013
|
74,797,684
|
|
$
|
27.80
|
|
70,089,582
|
|
$
|
7,180,320,875
|
|
|
Total
|
175,200,091
|
|
$
|
27.21
|
|
169,993,524
|
|
|
|
|
|
(a)
|
On December 12, 2011, we announced that the Board of Directors had authorized a $10 billion share-repurchase plan (the December 2011 Stock Purchase Plan). On November 1, 2012, we announced that the Board of Directors had authorized an additional $10 billion share-purchase plan, which became effective on November 30, 2012 (the November 2012 Stock Purchase Plan).
|
|
(b)
|
In addition to amounts purchased under the December 2011 and November 2012 Stock Purchase Plans, these columns reflect the following transactions during the
first
fiscal quarter of
2013
: (i) the surrender to Pfizer of 4,049,833 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock and restricted stock units issued to employees; (ii) the open market purchase by the trustee of 2,464 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance share awards and who deferred receipt of such awards; and (iii) the surrender to Pfizer of 1,154,270 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance share awards and total shareholder return units issued to employees.
|
|
|
1) Exhibit 12
|
-
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
2) Exhibit 15
|
-
|
Accountants’ Acknowledgement
|
|
|
3) Exhibit 31.1
|
-
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
4) Exhibit 31.2
|
-
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
5) Exhibit 32.1
|
-
|
Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
6) 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
|
|
|
7) Exhibit 101:
|
|
|
|
|
EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.LAB
EX-101.PRE
EX-101.DEF
|
|
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase
XBRL Taxonomy Extension Definition Document
|
|
|
|
Pfizer Inc.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
Dated:
|
May 9, 2013
|
/s/ Loretta V. Cangialosi
|
|
|
|
Loretta V. Cangialosi, Senior Vice President and
Controller
(Principal Accounting Officer and
Duly Authorized Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|