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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.
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DELAWARE
(State of Incorporation)
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13-5315170
(I.R.S. Employer Identification No.)
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YES
X
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NO ___
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YES
X
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NO ___
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YES ____
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NO
X
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Page
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Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2013 and July 1, 2012
|
|
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|
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Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and July 1, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
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|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS, EXCEPT PER COMMON SHARE DATA)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Revenues
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
(a)
|
|
2,242
|
|
|
2,376
|
|
|
4,505
|
|
|
4,759
|
|
||||
|
Selling, informational and administrative expenses
(a)
|
|
3,591
|
|
|
3,665
|
|
|
6,808
|
|
|
7,343
|
|
||||
|
Research and development expenses
(a)
|
|
1,530
|
|
|
1,600
|
|
|
3,240
|
|
|
3,574
|
|
||||
|
Amortization of intangible assets
|
|
1,140
|
|
|
1,275
|
|
|
2,359
|
|
|
2,678
|
|
||||
|
Restructuring charges and certain acquisition-related costs
|
|
183
|
|
|
184
|
|
|
314
|
|
|
773
|
|
||||
|
Other (income)/deductions––net
|
|
(1,070
|
)
|
|
688
|
|
|
(925
|
)
|
|
2,327
|
|
||||
|
Income from continuing operations before provision for taxes on income
|
|
5,357
|
|
|
4,180
|
|
|
9,082
|
|
|
6,359
|
|
||||
|
Provision for taxes on income
|
|
1,782
|
|
|
1,180
|
|
|
2,891
|
|
|
1,805
|
|
||||
|
Income from continuing operations
|
|
3,575
|
|
|
3,000
|
|
|
6,191
|
|
|
4,554
|
|
||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
||||||||
|
Income from discontinued operations––net of tax
|
|
141
|
|
|
260
|
|
|
290
|
|
|
509
|
|
||||
|
Gain on disposal of discontinued operations––net of tax
|
|
10,418
|
|
|
—
|
|
|
10,418
|
|
|
—
|
|
||||
|
Discontinued operations––net of tax
|
|
10,559
|
|
|
260
|
|
|
10,708
|
|
|
509
|
|
||||
|
Net income before allocation to noncontrolling interests
|
|
14,134
|
|
|
3,260
|
|
|
16,899
|
|
|
5,063
|
|
||||
|
Less: Net income attributable to noncontrolling interests
|
|
39
|
|
|
7
|
|
|
54
|
|
|
16
|
|
||||
|
Net income attributable to Pfizer Inc.
|
|
$
|
14,095
|
|
|
$
|
3,253
|
|
|
$
|
16,845
|
|
|
$
|
5,047
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per common share––basic
(b)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.87
|
|
|
$
|
0.60
|
|
|
Discontinued operations––net of tax
|
|
1.50
|
|
|
0.03
|
|
|
1.50
|
|
|
0.07
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
2.00
|
|
|
$
|
0.44
|
|
|
$
|
2.37
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per common share––diluted
(b)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
$
|
0.86
|
|
|
$
|
0.60
|
|
|
Discontinued operations––net of tax
|
|
1.48
|
|
|
0.03
|
|
|
1.49
|
|
|
0.07
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
1.98
|
|
|
$
|
0.43
|
|
|
$
|
2.34
|
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares––basic
|
|
7,042
|
|
|
7,476
|
|
|
7,115
|
|
|
7,506
|
|
||||
|
Weighted-average shares––diluted
|
|
7,117
|
|
|
7,537
|
|
|
7,185
|
|
|
7,570
|
|
||||
|
Cash dividends paid per common share
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
(a)
|
Excludes amortization of intangible assets, except as disclosed in
Note 9B. Goodwill and Other Intangible Assets: Other Intangible Assets.
|
|
(b)
|
EPS amounts may not add due to rounding.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Net income before allocation to noncontrolling interests
|
|
$
|
14,134
|
|
|
$
|
3,260
|
|
|
$
|
16,899
|
|
|
$
|
5,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Foreign currency translation adjustments
|
|
$
|
(755
|
)
|
|
$
|
(1,981
|
)
|
|
$
|
(1,047
|
)
|
|
$
|
(1,718
|
)
|
|
Reclassification adjustments
(a)
|
|
171
|
|
|
—
|
|
|
171
|
|
|
—
|
|
||||
|
|
|
(584
|
)
|
|
(1,981
|
)
|
|
(876
|
)
|
|
(1,718
|
)
|
||||
|
Unrealized holding gains/(losses) on derivative financial instruments
|
|
263
|
|
|
(657
|
)
|
|
(154
|
)
|
|
(230
|
)
|
||||
|
Reclassification adjustments for realized (gains)/losses
(b)
|
|
(132
|
)
|
|
427
|
|
|
249
|
|
|
127
|
|
||||
|
|
|
131
|
|
|
(230
|
)
|
|
95
|
|
|
(103
|
)
|
||||
|
Unrealized holding gains on available-for-sale securities
|
|
88
|
|
|
12
|
|
|
99
|
|
|
92
|
|
||||
|
Reclassification adjustments for realized (gains)/losses
(b)
|
|
(18
|
)
|
|
16
|
|
|
(31
|
)
|
|
33
|
|
||||
|
|
|
70
|
|
|
28
|
|
|
68
|
|
|
125
|
|
||||
|
Benefit plans: actuarial gains/(losses)
|
|
29
|
|
|
(505
|
)
|
|
47
|
|
|
(504
|
)
|
||||
|
Reclassification adjustments related to amortization
(c)
|
|
150
|
|
|
113
|
|
|
301
|
|
|
229
|
|
||||
|
Reclassification adjustments related to curtailments/settlements, net
(c)
|
|
34
|
|
|
(8
|
)
|
|
93
|
|
|
112
|
|
||||
|
Foreign currency translation adjustments and other
|
|
43
|
|
|
39
|
|
|
140
|
|
|
55
|
|
||||
|
|
|
256
|
|
|
(361
|
)
|
|
581
|
|
|
(108
|
)
|
||||
|
Benefit plans: prior service (costs)/credits and other
|
|
—
|
|
|
26
|
|
|
3
|
|
|
26
|
|
||||
|
Reclassification adjustments related to amortization
(c)
|
|
(13
|
)
|
|
(17
|
)
|
|
(29
|
)
|
|
(34
|
)
|
||||
|
Reclassification adjustments related to curtailments/settlements, net
(c)
|
|
—
|
|
|
(73
|
)
|
|
(9
|
)
|
|
(82
|
)
|
||||
|
Other
|
|
(4
|
)
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
||||
|
|
|
(17
|
)
|
|
(64
|
)
|
|
(41
|
)
|
|
(94
|
)
|
||||
|
Other comprehensive loss, before tax
|
|
(144
|
)
|
|
(2,608
|
)
|
|
(173
|
)
|
|
(1,898
|
)
|
||||
|
Tax provision/(benefit) on other comprehensive loss
(d)
|
|
187
|
|
|
(205
|
)
|
|
363
|
|
|
(1
|
)
|
||||
|
Other comprehensive loss before allocation to noncontrolling interests
|
|
$
|
(331
|
)
|
|
$
|
(2,403
|
)
|
|
$
|
(536
|
)
|
|
$
|
(1,897
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Comprehensive income before allocation to noncontrolling interests
|
|
$
|
13,803
|
|
|
$
|
857
|
|
|
$
|
16,363
|
|
|
$
|
3,166
|
|
|
Less: Comprehensive income/(loss) attributable to noncontrolling interests
|
|
18
|
|
|
(10
|
)
|
|
30
|
|
|
(2
|
)
|
||||
|
Comprehensive income attributable to Pfizer Inc.
|
|
$
|
13,785
|
|
|
$
|
867
|
|
|
$
|
16,333
|
|
|
$
|
3,168
|
|
|
(a)
|
Primarily reclassified into
Gain on disposal of discontinued operations—net of tax
in the condensed consolidated statements of income
.
|
|
(b)
|
Reclassified into
Other (income)/deductions—net
in the condensed consolidated statements of income.
|
|
(c)
|
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
Note 10. Pension and Postretirement Benefit Plans.
|
|
(d)
|
See
Note 5C. Tax Matters: Taxes on Items of Other Comprehensive Loss.
|
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
|
|
(Unaudited)
|
|
|
||||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
2,436
|
|
|
$
|
10,081
|
|
|
Short-term investments
|
|
31,275
|
|
|
22,318
|
|
||
|
Accounts receivable, less allowance for doubtful accounts
|
|
11,523
|
|
|
11,456
|
|
||
|
Inventories
|
|
6,282
|
|
|
6,076
|
|
||
|
Taxes and other current assets
|
|
9,819
|
|
|
8,956
|
|
||
|
Assets of discontinued operations and other assets held for sale
|
|
100
|
|
|
5,944
|
|
||
|
Total current assets
|
|
61,435
|
|
|
64,831
|
|
||
|
Long-term investments
|
|
16,107
|
|
|
14,149
|
|
||
|
Property, plant and equipment, less accumulated depreciation
|
|
12,443
|
|
|
13,213
|
|
||
|
Goodwill
|
|
42,431
|
|
|
43,661
|
|
||
|
Identifiable intangible assets, less accumulated amortization
|
|
41,776
|
|
|
45,146
|
|
||
|
Taxes and other noncurrent assets
|
|
5,143
|
|
|
4,798
|
|
||
|
Total assets
|
|
$
|
179,335
|
|
|
$
|
185,798
|
|
|
|
|
|
|
|
||||
|
Liabilities and Equity
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
5,214
|
|
|
$
|
6,424
|
|
|
Accounts payable
|
|
1,978
|
|
|
2,921
|
|
||
|
Dividends payable
|
|
1,685
|
|
|
1,733
|
|
||
|
Income taxes payable
|
|
904
|
|
|
979
|
|
||
|
Accrued compensation and related items
|
|
1,430
|
|
|
1,875
|
|
||
|
Other current liabilities
|
|
12,218
|
|
|
13,812
|
|
||
|
Liabilities of discontinued operations
|
|
21
|
|
|
1,442
|
|
||
|
Total current liabilities
|
|
23,450
|
|
|
29,186
|
|
||
|
|
|
|
|
|
||||
|
Long-term debt
|
|
31,532
|
|
|
31,036
|
|
||
|
Pension benefit obligations
|
|
7,534
|
|
|
7,782
|
|
||
|
Postretirement benefit obligations
|
|
3,454
|
|
|
3,491
|
|
||
|
Noncurrent deferred tax liabilities
|
|
22,338
|
|
|
21,193
|
|
||
|
Other taxes payable
|
|
6,819
|
|
|
6,581
|
|
||
|
Other noncurrent liabilities
|
|
5,231
|
|
|
4,851
|
|
||
|
Total liabilities
|
|
100,358
|
|
|
104,120
|
|
||
|
|
|
|
|
|
||||
|
Commitments and Contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||||
|
Preferred stock
|
|
36
|
|
|
39
|
|
||
|
Common stock
|
|
451
|
|
|
448
|
|
||
|
Additional paid-in capital
|
|
76,412
|
|
|
72,608
|
|
||
|
Treasury stock
|
|
(59,515
|
)
|
|
(40,122
|
)
|
||
|
Retained earnings
|
|
67,628
|
|
|
54,240
|
|
||
|
Accumulated other comprehensive loss
|
|
(6,465
|
)
|
|
(5,953
|
)
|
||
|
Total Pfizer Inc. shareholders’ equity
|
|
78,547
|
|
|
81,260
|
|
||
|
Equity attributable to noncontrolling interests
|
|
430
|
|
|
418
|
|
||
|
Total equity
|
|
78,977
|
|
|
81,678
|
|
||
|
Total liabilities and equity
|
|
$
|
179,335
|
|
|
$
|
185,798
|
|
|
|
|
Six Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||
|
Operating Activities
|
|
|
|
|
||||
|
Net income before allocation to noncontrolling interests
|
|
$
|
16,899
|
|
|
$
|
5,063
|
|
|
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash provided by operating activities:
|
|
|
|
|
|
|
||
|
Depreciation and amortization
|
|
3,297
|
|
|
3,892
|
|
||
|
Share-based compensation expense
|
|
292
|
|
|
247
|
|
||
|
Gain associated with the transfer of certain product rights to an equity-method investment
|
|
(459
|
)
|
|
—
|
|
||
|
Asset write-offs and impairment charges
|
|
648
|
|
|
758
|
|
||
|
Gain on disposal of discontinued operations
|
|
(10,539
|
)
|
|
—
|
|
||
|
Deferred taxes from continuing operations
|
|
1,254
|
|
|
(126
|
)
|
||
|
Deferred taxes from discontinued operations
|
|
(19
|
)
|
|
20
|
|
||
|
Benefit plan contributions (in excess of)/less than expense
|
|
164
|
|
|
(20
|
)
|
||
|
Other non-cash adjustments, net
|
|
(192
|
)
|
|
(114
|
)
|
||
|
Other changes in assets and liabilities, net of acquisitions and divestitures
|
|
(5,274
|
)
|
|
(2,925
|
)
|
||
|
Net cash provided by operating activities
|
|
6,071
|
|
|
6,795
|
|
||
|
|
|
|
|
|
||||
|
Investing Activities
|
|
|
|
|
|
|
||
|
Purchases of property, plant and equipment
|
|
(511
|
)
|
|
(548
|
)
|
||
|
Purchases of short-term investments
|
|
(21,663
|
)
|
|
(10,395
|
)
|
||
|
Proceeds from redemptions and sales of short-term investments
|
|
14,502
|
|
|
14,357
|
|
||
|
Net purchases of short-term investments with original maturities of 90 days or less
|
|
(401
|
)
|
|
(999
|
)
|
||
|
Purchases of long-term investments
|
|
(5,233
|
)
|
|
(2,317
|
)
|
||
|
Proceeds from redemptions and sales of long-term investments
|
|
3,194
|
|
|
304
|
|
||
|
Acquisitions, net of cash acquired
|
|
(15
|
)
|
|
(782
|
)
|
||
|
Other investing activities
|
|
33
|
|
|
(56
|
)
|
||
|
Net cash used in investing activities
|
|
(10,094
|
)
|
|
(436
|
)
|
||
|
|
|
|
|
|
||||
|
Financing Activities
|
|
|
|
|
|
|
||
|
Proceeds from short-term borrowings
|
|
2,334
|
|
|
3,764
|
|
||
|
Principal payments on short-term borrowings
|
|
(2,333
|
)
|
|
(3,799
|
)
|
||
|
Net proceeds from/(payments on) short-term borrowings with original maturities of 90 days or less
|
|
2,251
|
|
|
(349
|
)
|
||
|
Proceeds from issuance of long-term debt
(a)
|
|
6,618
|
|
|
—
|
|
||
|
Principal payments on long-term debt
|
|
(2,394
|
)
|
|
(7
|
)
|
||
|
Purchases of common stock
|
|
(7,889
|
)
|
|
(2,999
|
)
|
||
|
Cash dividends paid
|
|
(3,436
|
)
|
|
(3,283
|
)
|
||
|
Proceeds from exercise of stock options and other financing activities
|
|
1,249
|
|
|
198
|
|
||
|
Net cash used in financing activities
|
|
(3,600
|
)
|
|
(6,475
|
)
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
(22
|
)
|
|
(35
|
)
|
||
|
Net decrease in cash and cash equivalents
|
|
(7,645
|
)
|
|
(151
|
)
|
||
|
Cash and cash equivalents, beginning
|
|
10,081
|
|
|
3,182
|
|
||
|
Cash and cash equivalents, end
|
|
$
|
2,436
|
|
|
$
|
3,031
|
|
|
|
|
|
|
|
||||
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
||
|
Non-cash transactions:
|
|
|
|
|
||||
|
Sale of Zoetis (our Animal Health business) for Pfizer common stock
(b)
|
|
$
|
11,408
|
|
|
$
|
—
|
|
|
Exchange of Zoetis common stock for the retirement of Pfizer commercial paper issued in 2013
(b)
|
|
2,479
|
|
|
—
|
|
||
|
Exchange of Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012
(b)
|
|
992
|
|
|
—
|
|
||
|
Transfer of certain product rights to an equity-method investment
(c)
|
|
1,233
|
|
|
—
|
|
||
|
Cash paid during the period for:
|
|
|
|
|
|
|
||
|
Income taxes
|
|
$
|
1,305
|
|
|
$
|
1,127
|
|
|
Interest
|
|
1,103
|
|
|
1,194
|
|
||
|
(a)
|
Includes
$2.6 billion
from the issuance of senior notes by Zoetis, our former 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 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures
.
|
|
(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
(a)
|
|
Six Months Ended
(a)
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Revenues
|
|
$
|
1,112
|
|
|
$
|
1,675
|
|
|
$
|
2,201
|
|
|
$
|
3,230
|
|
|
Pre-tax income from discontinued operations
|
|
$
|
189
|
|
|
$
|
422
|
|
|
$
|
389
|
|
|
$
|
796
|
|
|
Provision for taxes on income
(b)
|
|
48
|
|
|
162
|
|
|
99
|
|
|
287
|
|
||||
|
Income from discontinued operations––net of tax
|
|
141
|
|
|
260
|
|
|
290
|
|
|
509
|
|
||||
|
Pre-tax gain on disposal of discontinued operations
|
|
10,539
|
|
|
—
|
|
|
10,539
|
|
|
—
|
|
||||
|
Provision for taxes on income
(c)
|
|
121
|
|
|
—
|
|
|
121
|
|
|
—
|
|
||||
|
Gain on disposal of discontinued operations––net of tax
|
|
10,418
|
|
|
—
|
|
|
10,418
|
|
|
—
|
|
||||
|
Discontinued operations––net of tax
|
|
$
|
10,559
|
|
|
$
|
260
|
|
|
$
|
10,708
|
|
|
$
|
509
|
|
|
(a)
|
Includes the Animal Health (Zoetis) business for all periods presented and the Nutrition business for the three and six months ended July 1, 2012.
|
|
(b)
|
Includes a deferred tax benefit of
$26 million
and a deferred tax expense of
$41 million
for the three months ended June 30, 2013 and July 1, 2012, respectively, and a deferred tax benefit of
$19 million
and a deferred tax expense of
$20 million
for the six months ended June 30, 2013 and July 1, 2012, respectively. These deferred tax provisions include deferred taxes related to investments in certain foreign subsidiaries resulting from our intention not to hold these subsidiaries indefinitely.
|
|
(c)
|
Reflects income taxes resulting from certain legal entity reorganizations.
|
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
Accounts receivable, less allowance for doubtful accounts
|
|
$
|
—
|
|
|
$
|
922
|
|
|
Inventories
|
|
—
|
|
|
1,137
|
|
||
|
Other current assets
|
|
—
|
|
|
550
|
|
||
|
Property, plant and equipment, less accumulated depreciation
|
|
100
|
|
|
1,318
|
|
||
|
Goodwill
|
|
—
|
|
|
1,011
|
|
||
|
Identifiable intangible assets, less accumulated amortization
|
|
—
|
|
|
867
|
|
||
|
Other noncurrent assets
|
|
—
|
|
|
139
|
|
||
|
Assets of discontinued operations and other assets held for sale
|
|
$
|
100
|
|
|
$
|
5,944
|
|
|
Current liabilities
|
|
$
|
—
|
|
|
$
|
874
|
|
|
Other liabilities
|
|
21
|
|
|
568
|
|
||
|
Liabilities of discontinued operations
|
|
$
|
21
|
|
|
$
|
1,442
|
|
|
•
|
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
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Restructuring charges
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employee terminations
|
|
$
|
136
|
|
|
$
|
43
|
|
|
$
|
115
|
|
|
$
|
307
|
|
|
Asset impairments
|
|
12
|
|
|
28
|
|
|
115
|
|
|
246
|
|
||||
|
Exit costs
|
|
2
|
|
|
8
|
|
|
15
|
|
|
20
|
|
||||
|
Total restructuring charges
|
|
150
|
|
|
79
|
|
|
245
|
|
|
573
|
|
||||
|
Integration costs
(b)
|
|
33
|
|
|
105
|
|
|
69
|
|
|
200
|
|
||||
|
Restructuring charges and certain acquisition-related costs
|
|
183
|
|
|
184
|
|
|
314
|
|
|
773
|
|
||||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
58
|
|
|
54
|
|
|
91
|
|
|
130
|
|
||||
|
Selling, informational and administrative expenses
|
|
8
|
|
|
5
|
|
|
19
|
|
|
6
|
|
||||
|
Research and development expenses
|
|
3
|
|
|
—
|
|
|
94
|
|
|
259
|
|
||||
|
Total additional depreciation––asset restructuring
|
|
69
|
|
|
59
|
|
|
204
|
|
|
395
|
|
||||
|
Implementation costs recorded in our condensed consolidated
statements of income as follows
(d)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
5
|
|
|
4
|
|
|
11
|
|
|
4
|
|
||||
|
Selling, informational and administrative expenses
|
|
34
|
|
|
14
|
|
|
65
|
|
|
30
|
|
||||
|
Research and development expenses
|
|
7
|
|
|
37
|
|
|
9
|
|
|
85
|
|
||||
|
Total implementation costs
|
|
46
|
|
|
55
|
|
|
85
|
|
|
119
|
|
||||
|
Total costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
298
|
|
|
$
|
298
|
|
|
$
|
603
|
|
|
$
|
1,287
|
|
|
(a)
|
From the beginning of our cost-reduction/productivity initiatives in
2005
through
June 30, 2013
,
Employee termination costs
represent the expected reduction of the workforce by approximately
63,300
employees, mainly in manufacturing and sales and research, of which
|
|
•
|
For the three months ended June 30, 2013, Primary Care operating segment (
$21 million
), Specialty Care and Oncology operating segment (
$13 million
), Established Products and Emerging Markets operating segment (
$19 million
), Consumer Healthcare operating segment (
$1 million
), research and development operations (
$12 million
), manufacturing operations (
$80 million
) and Corporate (
$4 million
).
|
|
•
|
For the six months ended June 30, 2013, Primary Care operating segment (
$17 million
), Specialty Care and Oncology operating segment (
$19 million
), Established Products and Emerging Markets operating segment (
$30 million
), Consumer Healthcare operating segment (
$1 million
), research and development operations (
$15 million
), manufacturing operations (
$82 million
) and Corporate (
$81 million
).
|
|
•
|
For the three months ended July 1, 2012, Primary Care operating segment (
$35 million
income), Specialty Care and Oncology operating segment (
$16 million
), Established Products and Emerging Markets operating segment (
$1 million
), Consumer Healthcare operating segment (
$9 million
), research and development operations (
$13 million
), manufacturing operations (
$15 million
) and Corporate (
$60 million
).
|
|
•
|
For the six months ended July 1, 2012, Primary Care operating segment (
$32 million
income), Specialty Care and Oncology operating segment (
$19 million
), Established Products and Emerging Markets operating segment (
$4 million
), Consumer Healthcare operating segment (
$13 million
), research and development operations (
$25 million
), manufacturing operations (
$166 million
) and Corporate (
$378 million
).
|
|
(b)
|
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.
|
|
(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
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2012
(a)
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
152
|
|
|
$
|
1,886
|
|
|
Provision
|
|
115
|
|
|
115
|
|
|
15
|
|
|
245
|
|
||||
|
Utilization and other
(b)
|
|
(529
|
)
|
|
(115
|
)
|
|
(53
|
)
|
|
(697
|
)
|
||||
|
Balance, June 30, 2013
(c)
|
|
$
|
1,320
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
1,434
|
|
|
(a)
|
Included in
Other current liabilities
(
$1.2 billion
) and
Other noncurrent liabilities
(
$720 million
).
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
(
$823 million
) and
Other noncurrent liabilities
(
$611 million
).
|
|
|
|
Fair Value
(a)
|
|
Six Months Ended June 30,
2013
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Assets held for sale
(b)
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
Assets abandoned/demolished
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
|
Long-lived assets
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
115
|
|
|
(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, less costs to sell of
$2 million
(a net of
$82 million
), in the first
six
months of
2013
. Fair value was determined primarily using a market approach, with various inputs, such as recent sales transactions.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Interest income
(a)
|
|
$
|
(102
|
)
|
|
$
|
(85
|
)
|
|
$
|
(197
|
)
|
|
$
|
(166
|
)
|
|
Interest expense
(a)
|
|
356
|
|
|
378
|
|
|
727
|
|
|
768
|
|
||||
|
Net interest expense
|
|
254
|
|
|
293
|
|
|
530
|
|
|
602
|
|
||||
|
Royalty-related income
|
|
(120
|
)
|
|
(103
|
)
|
|
(183
|
)
|
|
(194
|
)
|
||||
|
Patent litigation settlement income
(b)
|
|
(1,351
|
)
|
|
—
|
|
|
(1,351
|
)
|
|
—
|
|
||||
|
Other legal matters, net
(c)
|
|
(12
|
)
|
|
473
|
|
|
(95
|
)
|
|
1,287
|
|
||||
|
Gain associated with the transfer of certain product rights to an equity-method investment
(d)
|
|
31
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
||||
|
Net gain on asset disposals
|
|
(28
|
)
|
|
(17
|
)
|
|
(54
|
)
|
|
(24
|
)
|
||||
|
Certain asset impairment charges
(e)
|
|
127
|
|
|
78
|
|
|
525
|
|
|
510
|
|
||||
|
Costs associated with the Zoetis IPO
(f)
|
|
—
|
|
|
29
|
|
|
18
|
|
|
61
|
|
||||
|
Other, net
|
|
29
|
|
|
(65
|
)
|
|
144
|
|
|
85
|
|
||||
|
Other (income)/deductions––net
|
|
$
|
(1,070
|
)
|
|
$
|
688
|
|
|
$
|
(925
|
)
|
|
$
|
2,327
|
|
|
(a)
|
Interest income increased in the
second
quarter and first six months of
2013
due to higher cash and investment balances. Interest expense decreased in the
second
quarter and first six months of
2013
due to lower debt balances and the effective conversion of some fixed-rate liabilities to floating-rate liabilities.
|
|
(b)
|
Reflects income from a litigation settlement with Teva Pharmaceuticals Industries Ltd. (Teva) and Sun Pharmaceutical Industries, Limited (Sun) for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the United States. As of June 30, 2013, the receivables from Teva and Sun are included in
Taxes and other current assets
(
$1.7 billion
) and
Taxes and other noncurrent assets
(
$128 million
). In addition, we have recorded an associated payable to Takeda Pharmaceutical Company Limited (Takeda) in
Other current liabilities
(
$460 million
) as certain payments due to Takeda will be sent to us on their behalf. For additional information, see
Note 12A1. Commitments and Contingencies: Legal Proceedings
––
Patent Litigation.
|
|
(c)
|
In the first six months of
2013
, primarily includes an
$80 million
insurance recovery related to a certain litigation matter. In the second quarter and first six months of
2012
, primarily includes charges for hormone-replacement therapy litigation. The first six months of
2012
also includes 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). For additional information, see
Note 12. Commitments and Contingencies.
|
|
(d)
|
In the first six months of 2013, 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.
|
|
(e)
|
In the first six months of
2013
, includes intangible asset impairment charges of
$489 million
, primarily reflecting (i)
$394 million
of developed technology rights (for use in the development of bone and cartilage) acquired in connection with our acquisition of Wyeth, and (ii)
$81 million
related to two in-process research and development (IPR&D) compounds. The intangible asset impairment charges for
|
|
(f)
|
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.
|
|
|
|
Fair Value
(a)
|
|
Six Months Ended June 30,
2013
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Intangible assets––Developed technology rights
(b)
|
|
$
|
564
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
564
|
|
|
$
|
394
|
|
|
Intangible assets––IPR&D
(b)
|
|
220
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|
81
|
|
|||||
|
Total
|
|
$
|
784
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
784
|
|
|
$
|
475
|
|
|
(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 intangible assets written down to their fair value in the first six months 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 and the impact of technological risk associated with IPR&D assets; 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 open, but 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
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustments
(a)
|
|
$
|
19
|
|
|
$
|
(30
|
)
|
|
$
|
90
|
|
|
$
|
37
|
|
|
Unrealized holding gains/(losses) on derivative financial instruments
|
|
104
|
|
|
(216
|
)
|
|
(53
|
)
|
|
(57
|
)
|
||||
|
Reclassification adjustments for realized (gains)/losses
|
|
(55
|
)
|
|
133
|
|
|
89
|
|
|
18
|
|
||||
|
|
|
49
|
|
|
(83
|
)
|
|
36
|
|
|
(39
|
)
|
||||
|
Unrealized holding gains/(losses) on available-for-sale securities
|
|
35
|
|
|
(1
|
)
|
|
48
|
|
|
13
|
|
||||
|
Reclassification adjustments for realized (gains)/losses
|
|
(3
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
5
|
|
||||
|
|
|
32
|
|
|
(3
|
)
|
|
43
|
|
|
18
|
|
||||
|
Benefit plans: actuarial gains/(losses)
|
|
5
|
|
|
(118
|
)
|
|
11
|
|
|
(118
|
)
|
||||
|
Reclassification adjustments related to amortization
|
|
52
|
|
|
41
|
|
|
106
|
|
|
85
|
|
||||
|
Reclassification adjustments related to curtailments/settlements, net
|
|
16
|
|
|
(4
|
)
|
|
36
|
|
|
39
|
|
||||
|
Foreign currency translation adjustments and other
|
|
21
|
|
|
18
|
|
|
58
|
|
|
17
|
|
||||
|
|
|
94
|
|
|
(63
|
)
|
|
211
|
|
|
23
|
|
||||
|
Benefit plans: prior service (costs)/credits and other
|
|
2
|
|
|
8
|
|
|
1
|
|
|
8
|
|
||||
|
Reclassification adjustments related to amortization
|
|
(6
|
)
|
|
(6
|
)
|
|
(12
|
)
|
|
(14
|
)
|
||||
|
Reclassification adjustments related to curtailments/settlements, net
|
|
(1
|
)
|
|
(28
|
)
|
|
(4
|
)
|
|
(32
|
)
|
||||
|
Other
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
|
|
|
(7
|
)
|
|
(26
|
)
|
|
(17
|
)
|
|
(40
|
)
|
||||
|
Tax provision/(benefit) on other comprehensive loss
|
|
$
|
187
|
|
|
$
|
(205
|
)
|
|
$
|
363
|
|
|
$
|
(1
|
)
|
|
(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)
|
|
Foreign Currency Translation Adjustments
|
|
|
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)
|
|
(942
|
)
|
|
59
|
|
|
25
|
|
|
370
|
|
|
(24
|
)
|
|
(512
|
)
|
||||||
|
Balance, June 30, 2013
|
|
$
|
(1,119
|
)
|
|
$
|
(29
|
)
|
|
$
|
188
|
|
|
$
|
(5,740
|
)
|
|
$
|
235
|
|
|
$
|
(6,465
|
)
|
|
(a)
|
Amounts do not include foreign currency translation loss of
$24 million
attributable to noncontrolling interests for the first six months of
2013
.
|
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
Selected financial assets measured at fair value on a recurring basis
(a)
|
|
|
|
|
||||
|
Trading securities
(b)
|
|
$
|
118
|
|
|
$
|
142
|
|
|
Available-for-sale debt securities
(c)
|
|
41,397
|
|
|
32,584
|
|
||
|
Available-for-sale money market funds
(d)
|
|
2,457
|
|
|
1,727
|
|
||
|
Available-for-sale equity securities, excluding money market funds
(c)
|
|
413
|
|
|
263
|
|
||
|
Derivative financial instruments in receivable positions
(e)
:
|
|
|
|
|
|
|
||
|
Interest rate swaps
|
|
653
|
|
|
1,036
|
|
||
|
Foreign currency swaps
|
|
354
|
|
|
194
|
|
||
|
Foreign currency forward-exchange contracts
|
|
294
|
|
|
152
|
|
||
|
|
|
45,686
|
|
|
36,098
|
|
||
|
Other selected financial assets
|
|
|
|
|
|
|
||
|
Held-to-maturity debt securities, carried at amortized cost
(c), (f)
|
|
1,387
|
|
|
1,459
|
|
||
|
Private equity securities, carried at equity-method or at cost
(f),
(g)
|
|
2,374
|
|
|
1,239
|
|
||
|
|
|
3,761
|
|
|
2,698
|
|
||
|
Total selected financial assets
|
|
$
|
49,447
|
|
|
$
|
38,796
|
|
|
Financial liabilities measured at fair value on a recurring basis
(a)
|
|
|
|
|
||||
|
Derivative financial instruments in a liability position
(h)
:
|
|
|
|
|
||||
|
Foreign currency swaps
|
|
$
|
704
|
|
|
$
|
428
|
|
|
Interest rate swaps
|
|
196
|
|
|
33
|
|
||
|
Foreign currency forward-exchange contracts
|
|
60
|
|
|
243
|
|
||
|
|
|
960
|
|
|
704
|
|
||
|
Other financial liabilities
(i)
|
|
|
|
|
|
|
||
|
Short-term borrowings, carried at historical proceeds, as adjusted
(f)
|
|
5,214
|
|
|
6,424
|
|
||
|
Long-term debt, carried at historical proceeds, as adjusted
(j), (k)
|
|
31,532
|
|
|
31,036
|
|
||
|
|
|
36,746
|
|
|
37,460
|
|
||
|
Total selected financial liabilities
|
|
$
|
37,706
|
|
|
$
|
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
$434 million
as of
June 30, 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
$116 million
as of
June 30, 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
June 30, 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
$162 million
and foreign currency forward-exchange contracts with fair values of
$52 million
as
of
June 30, 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
$699 million
as of
June 30, 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
$36.6 billion
as of
June 30, 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)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
764
|
|
|
$
|
947
|
|
|
Short-term investments
|
|
31,275
|
|
|
22,318
|
|
||
|
Long-term investments
|
|
16,107
|
|
|
14,149
|
|
||
|
Taxes and other current assets
(a)
|
|
383
|
|
|
296
|
|
||
|
Taxes and other noncurrent assets
(b)
|
|
918
|
|
|
1,086
|
|
||
|
|
|
$
|
49,447
|
|
|
$
|
38,796
|
|
|
Liabilities
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
5,214
|
|
|
$
|
6,424
|
|
|
Other current liabilities
(c)
|
|
72
|
|
|
330
|
|
||
|
Long-term debt
|
|
31,532
|
|
|
31,036
|
|
||
|
Other noncurrent liabilities
(d)
|
|
888
|
|
|
374
|
|
||
|
|
|
$
|
37,706
|
|
|
$
|
38,164
|
|
|
(a)
|
As of
June 30, 2013
, derivative instruments at fair value include foreign currency forward-exchange contracts (
$294 million
), interest rate swaps (
$74 million
), and foreign currency swaps (
$15 million
) and, as of
December 31, 2012
, include foreign currency forward-exchange contracts (
$152 million
) and foreign currency swaps (
$144 million
).
|
|
(b)
|
As of
June 30, 2013
, derivative instruments at fair value include interest rate swaps (
$579 million
) and foreign currency swaps (
$339 million
) and, as of
December 31, 2012
, include interest rate swaps (
$1 billion
) and foreign currency swaps (
$50 million
).
|
|
(c)
|
At
June 30, 2013
, derivative instruments at fair value include foreign currency forward-exchange contracts (
$60 million
) and foreign currency swaps (
$12 million
) and, as of
December 31, 2012
, include foreign currency forward-exchange contracts (
$243 million
) and foreign currency swaps (
$87 million
).
|
|
(d)
|
At
June 30, 2013
, derivative instruments at fair value include foreign currency swaps (
$692 million
) and interest rate swaps (
$196 million
) and, as of
December 31, 2012
, include foreign currency swaps (
$341 million
) and interest rate swaps (
$33 million
).
|
|
|
|
Years
|
|
|
||||||||||||
|
|
|
|
|
|
Over 1
|
|
|
Over 5
|
|
|
June 30,
2013 |
|
||||
|
(MILLIONS OF DOLLARS)
|
|
Within 1
|
|
|
to 5
|
|
|
to 10
|
|
|
Total
|
|
||||
|
Available-for-sale debt securities
|
|
|
|
|
|
|
|
|
||||||||
|
Western European, Scandinavian and other government debt
(a)
|
|
$
|
19,293
|
|
|
$
|
2,082
|
|
|
$
|
—
|
|
|
$
|
21,375
|
|
|
Corporate debt
(b)
|
|
1,976
|
|
|
4,019
|
|
|
1,621
|
|
|
7,616
|
|
||||
|
Western European, Scandinavian, Australian and other government agency debt
(a)
|
|
2,983
|
|
|
393
|
|
|
—
|
|
|
3,376
|
|
||||
|
Reverse repurchase agreements
(c)
|
|
2,097
|
|
|
—
|
|
|
—
|
|
|
2,097
|
|
||||
|
Supranational debt
(a)
|
|
1,071
|
|
|
762
|
|
|
—
|
|
|
1,833
|
|
||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage Association asset-backed securities
|
|
14
|
|
|
1,733
|
|
|
—
|
|
|
1,747
|
|
||||
|
Government National Mortgage Association and other U.S. government guaranteed asset-backed securities
|
|
326
|
|
|
1,045
|
|
|
330
|
|
|
1,701
|
|
||||
|
U.S. government debt
|
|
1,187
|
|
|
449
|
|
|
16
|
|
|
1,652
|
|
||||
|
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Certificates of deposit and other
|
|
1,059
|
|
|
327
|
|
|
1
|
|
|
1,387
|
|
||||
|
Total debt securities
|
|
$
|
30,006
|
|
|
$
|
10,810
|
|
|
$
|
1,968
|
|
|
$
|
42,784
|
|
|
(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. government securities.
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
(MILLIONS OF DOLLARS)
|
|
Maturity Date
|
|
2013
|
|
|
|
1.50%
(a)
|
|
June 2018
|
|
$
|
1,000
|
|
|
3.00%
(b)
|
|
June 2023
|
|
1,000
|
|
|
|
0.90%
(a)
|
|
January 2017
|
|
750
|
|
|
|
4.30%
(b)
|
|
June 2043
|
|
750
|
|
|
|
Three-month London Interbank Offering Rate (LIBOR) plus 0.30%
|
|
June 2018
|
|
500
|
|
|
|
Total long-term debt issued in the second quarter of 2013
|
|
|
|
$
|
4,000
|
|
|
(a)
|
Instrument is callable by us at any time at the greater of
100%
of the principal amount or the sum of the present values of the remaining scheduled payments of principal and interest discounted at the U.S. Treasury rate, plus
0.10%
plus, in each case, accrued and unpaid interest.
|
|
(b)
|
Instrument is callable by us at any time at the greater of
100%
of the principal amount or the sum of the present values of the remaining scheduled payments of principal and interest discounted at the U.S. Treasury rate, plus
0.15%
plus, in each case, accrued and unpaid interest.
|
|
(MILLIONS OF DOLLARS)
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
After 2017
|
|
|
Total
|
|
||||||
|
Maturities
|
|
$
|
1,247
|
|
|
$
|
2,934
|
|
|
$
|
4,395
|
|
|
$
|
2,654
|
|
|
$
|
20,302
|
|
|
$
|
31,532
|
|
|
|
|
Amount of
Gains/(Losses)
Recognized in OID
(a), (b), (c)
|
|
Amount of
Gains/(Losses)
Recognized in OCL
(Effective Portion)
(a), (d)
|
|
Amount of
Gains/(Losses)
Reclassified from
OCL into OID
(Effective Portion)
(a), (d)
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
(646
|
)
|
|
$
|
132
|
|
|
$
|
(432
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
—
|
|
|
(1
|
)
|
|
16
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments Not Designated as Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency forward-exchange contracts
|
|
(21
|
)
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency swaps
|
|
5
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency long-term debt
|
|
—
|
|
|
—
|
|
|
34
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
||||||
|
All other net
|
|
—
|
|
|
3
|
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
5
|
|
||||||
|
|
|
$
|
(16
|
)
|
|
$
|
198
|
|
|
$
|
313
|
|
|
$
|
(730
|
)
|
|
$
|
132
|
|
|
$
|
(427
|
)
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(155
|
)
|
|
$
|
(218
|
)
|
|
$
|
(249
|
)
|
|
$
|
(132
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
(3
|
)
|
|
(3
|
)
|
|
139
|
|
|
73
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments Not Designated as Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency forward-exchange contracts
|
|
128
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency swaps
|
|
1
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency long-term debt
|
|
—
|
|
|
—
|
|
|
97
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||||||
|
All other net
|
|
—
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
|
|
|
$
|
126
|
|
|
$
|
45
|
|
|
$
|
82
|
|
|
$
|
(117
|
)
|
|
$
|
(249
|
)
|
|
$
|
(127
|
)
|
|
(a)
|
OID = Other (income)/deductions—net, included in
Other (income)/deductions—net
in the condensed consolidated statements of income
.
OCL = Other comprehensive 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 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 loss––Foreign currency translation adjustments.
|
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
Finished goods
|
|
$
|
2,567
|
|
|
$
|
2,254
|
|
|
Work-in-process
|
|
3,139
|
|
|
3,374
|
|
||
|
Raw materials and supplies
|
|
576
|
|
|
448
|
|
||
|
Inventories
|
|
$
|
6,282
|
|
|
$
|
6,076
|
|
|
Noncurrent inventories not included above
(a)
|
|
$
|
540
|
|
|
$
|
612
|
|
|
(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
|
|
|
Consumer Healthcare
|
|
|
Total
|
|
|||||
|
Balance, December 31, 2012
|
|
$
|
6,152
|
|
|
$
|
16,885
|
|
|
$
|
18,603
|
|
|
$
|
2,021
|
|
|
$
|
43,661
|
|
|
Derecognition
(a)
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
(292
|
)
|
|||||
|
Other
(b)
|
|
(129
|
)
|
|
(382
|
)
|
|
(422
|
)
|
|
(5
|
)
|
|
(938
|
)
|
|||||
|
Balance, June 30, 2013
|
|
$
|
6,023
|
|
|
$
|
16,503
|
|
|
$
|
17,889
|
|
|
$
|
2,016
|
|
|
$
|
42,431
|
|
|
(a)
|
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
.
|
|
(b)
|
Primarily reflects the impact of foreign exchange.
|
|
|
|
June 30, 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
|
|
$
|
71,748
|
|
|
$
|
(39,162
|
)
|
|
$
|
32,586
|
|
|
$
|
72,349
|
|
|
$
|
(36,895
|
)
|
|
$
|
35,454
|
|
|
Brands
|
|
1,651
|
|
|
(732
|
)
|
|
919
|
|
|
1,657
|
|
|
(693
|
)
|
|
964
|
|
||||||
|
License agreements and other
|
|
897
|
|
|
(691
|
)
|
|
206
|
|
|
914
|
|
|
(642
|
)
|
|
272
|
|
||||||
|
|
|
74,296
|
|
|
(40,585
|
)
|
|
33,711
|
|
|
74,920
|
|
|
(38,230
|
)
|
|
36,690
|
|
||||||
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Brands
|
|
7,476
|
|
|
—
|
|
|
7,476
|
|
|
7,787
|
|
|
—
|
|
|
7,787
|
|
||||||
|
In-process research and development
|
|
589
|
|
|
—
|
|
|
589
|
|
|
669
|
|
|
—
|
|
|
669
|
|
||||||
|
|
|
8,065
|
|
|
—
|
|
|
8,065
|
|
|
8,456
|
|
|
—
|
|
|
8,456
|
|
||||||
|
Identifiable intangible assets
(a)
|
|
$
|
82,361
|
|
|
$
|
(40,585
|
)
|
|
$
|
41,776
|
|
|
$
|
83,376
|
|
|
$
|
(38,230
|
)
|
|
$
|
45,146
|
|
|
(a)
|
The decrease is primarily related to amortization, asset impairment charges and the transfer of certain product rights to our equity-method investment in China. For additional information about the asset impairment charges, see
Note 4. Other (Income)/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 (
67%
); Established Products (
19%
); Primary Care (
13%
); and Oncology (
1%
);
|
|
•
|
Brands, finite-lived: Consumer Healthcare (
73%
); and Established Products (
27%
);
|
|
•
|
Brands, indefinite-lived: Consumer Healthcare (
69%
); and Established Products (
31%
); and
|
|
•
|
IPR&D: Worldwide Research and Development (
57%
); Established Products (
23%
); Specialty Care (
12%
) and Primary Care (
8%
).
|
|
|
|
Pension Plans
|
|
|
||||||||||||||||||||||||||||
|
|
|
U.S.
Qualified
(a)
|
|
U.S.
Supplemental
(Non-Qualified)
(b)
|
|
International
(c)
|
|
Postretirement
Plans
|
||||||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Service cost
|
|
$
|
75
|
|
|
$
|
90
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
51
|
|
|
$
|
50
|
|
|
$
|
15
|
|
|
$
|
17
|
|
|
Interest cost
|
|
167
|
|
|
175
|
|
|
13
|
|
|
15
|
|
|
92
|
|
|
100
|
|
|
41
|
|
|
45
|
|
||||||||
|
Expected return on plan assets
|
|
(251
|
)
|
|
(246
|
)
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
(106
|
)
|
|
(13
|
)
|
|
(14
|
)
|
||||||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Actuarial losses
|
|
89
|
|
|
77
|
|
|
14
|
|
|
10
|
|
|
35
|
|
|
17
|
|
|
12
|
|
|
9
|
|
||||||||
|
Prior service credits
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(12
|
)
|
||||||||
|
Curtailments and settlements––net
|
|
33
|
|
|
(18
|
)
|
|
6
|
|
|
(3
|
)
|
|
2
|
|
|
3
|
|
|
(2
|
)
|
|
(12
|
)
|
||||||||
|
Special termination benefits
|
|
—
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||||||
|
|
|
$
|
112
|
|
|
$
|
77
|
|
|
$
|
39
|
|
|
$
|
36
|
|
|
$
|
81
|
|
|
$
|
63
|
|
|
$
|
42
|
|
|
$
|
35
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Service cost
|
|
$
|
152
|
|
|
$
|
186
|
|
|
$
|
13
|
|
|
$
|
19
|
|
|
$
|
105
|
|
|
$
|
101
|
|
|
$
|
31
|
|
|
$
|
35
|
|
|
Interest cost
|
|
335
|
|
|
358
|
|
|
27
|
|
|
32
|
|
|
187
|
|
|
200
|
|
|
83
|
|
|
91
|
|
||||||||
|
Expected return on plan assets
|
|
(504
|
)
|
|
(491
|
)
|
|
—
|
|
|
—
|
|
|
(202
|
)
|
|
(211
|
)
|
|
(27
|
)
|
|
(23
|
)
|
||||||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Actuarial losses
|
|
179
|
|
|
157
|
|
|
27
|
|
|
21
|
|
|
72
|
|
|
34
|
|
|
23
|
|
|
17
|
|
||||||||
|
Prior service credits
|
|
(3
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(22
|
)
|
|
(24
|
)
|
||||||||
|
Curtailments and settlements––net
|
|
62
|
|
|
26
|
|
|
28
|
|
|
10
|
|
|
5
|
|
|
(7
|
)
|
|
(9
|
)
|
|
(23
|
)
|
||||||||
|
Special termination benefits
|
|
—
|
|
|
7
|
|
|
—
|
|
|
15
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
4
|
|
||||||||
|
|
|
$
|
221
|
|
|
$
|
237
|
|
|
$
|
94
|
|
|
$
|
96
|
|
|
$
|
166
|
|
|
$
|
117
|
|
|
$
|
79
|
|
|
$
|
77
|
|
|
(a)
|
The decrease in net periodic benefit costs for the
six
months ended
June 30, 2013
, compared to the
six
months ended
July 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, partially offset by the curtailment gain in the second quarter of 2012 resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico. 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
six
months ended
June 30, 2013
, compared to the
six
months ended
July 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 and the curtailment gain in the second quarter of 2012 resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico.
|
|
(c)
|
The increase in net periodic benefit costs for the
six
months ended
June 30, 2013
, compared to the
six
months ended
July 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 for our German pension plans in 2012.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(IN MILLIONS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
EPS Numerator––Basic
|
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations
|
|
$
|
3,575
|
|
|
$
|
3,000
|
|
|
$
|
6,191
|
|
|
$
|
4,554
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
10
|
|
|
7
|
|
|
19
|
|
|
16
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc.
|
|
3,565
|
|
|
2,993
|
|
|
6,172
|
|
|
4,538
|
|
||||
|
Less: Preferred stock dividends––net of tax
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
3,565
|
|
|
2,993
|
|
|
6,171
|
|
|
4,537
|
|
||||
|
Discontinued operations––net of tax
|
|
10,559
|
|
|
260
|
|
|
10,708
|
|
|
509
|
|
||||
|
Less: Discontinued operations––net of tax, attributable to noncontrolling interests
|
|
25
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||
|
Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders
|
|
10,534
|
|
|
260
|
|
|
10,669
|
|
|
509
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
14,099
|
|
|
$
|
3,253
|
|
|
$
|
16,840
|
|
|
$
|
5,046
|
|
|
EPS Numerator––Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
3,565
|
|
|
$
|
2,993
|
|
|
$
|
6,172
|
|
|
$
|
4,538
|
|
|
Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders
|
|
10,534
|
|
|
260
|
|
|
10,669
|
|
|
509
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
14,099
|
|
|
$
|
3,253
|
|
|
$
|
16,841
|
|
|
$
|
5,047
|
|
|
EPS Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted-average number of common shares outstanding––Basic
|
|
7,042
|
|
|
7,476
|
|
|
7,115
|
|
|
7,506
|
|
||||
|
Common-share equivalents: stock options, stock issuable under employee compensation plans and convertible preferred stock
|
|
75
|
|
|
61
|
|
|
70
|
|
|
64
|
|
||||
|
Weighted-average number of common shares outstanding––Diluted
|
|
7,117
|
|
|
7,537
|
|
|
7,185
|
|
|
7,570
|
|
||||
|
Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans
(a)
|
|
44
|
|
|
216
|
|
|
44
|
|
|
216
|
|
||||
|
(a)
|
These common stock equivalents were outstanding for the
six
months ended
June 30, 2013
and
July 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
|
|
•
|
Personal Injury Actions
|
|
•
|
Antitrust Action
|
|
•
|
Whistleblower Action
|
|
•
|
Antitrust Actions
|
|
•
|
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 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 dysfunction, genitourinary, major depressive disorder, pain, respiratory and smoking cessation. Examples of products in this unit in 2013 include Celebrex, Chantix/Champix, Eliquis, Lyrica, Premarin, Pristiq and Viagra (outside Canada and South Korea). All revenues and earnings for such products are allocated to the Primary Care unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.
|
|
•
|
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 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 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 prescription pharmaceutical products addressing oncology and oncology-related illnesses. The products in this unit in 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 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 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 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.
|
|
•
|
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 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 facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.
|
|
•
|
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)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reportable Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Primary Care
(b)
|
|
$
|
3,333
|
|
|
$
|
4,018
|
|
|
$
|
214
|
|
|
$
|
251
|
|
|
$
|
2,071
|
|
|
$
|
2,617
|
|
|
Specialty Care and Oncology
|
|
3,777
|
|
|
3,820
|
|
|
316
|
|
|
326
|
|
|
2,696
|
|
|
2,657
|
|
||||||
|
Established Products and Emerging Markets
(c)
|
|
5,000
|
|
|
5,301
|
|
|
105
|
|
|
66
|
|
|
2,813
|
|
|
3,076
|
|
||||||
|
Total reportable segments
|
|
12,110
|
|
|
13,139
|
|
|
635
|
|
|
643
|
|
|
7,580
|
|
|
8,350
|
|
||||||
|
Consumer Healthcare and other business activities
(d)
|
|
863
|
|
|
829
|
|
|
703
|
|
|
694
|
|
|
(453
|
)
|
|
(470
|
)
|
||||||
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate
(e)
|
|
—
|
|
|
—
|
|
|
179
|
|
|
209
|
|
|
(1,466
|
)
|
|
(1,589
|
)
|
||||||
|
Purchase accounting adjustments
(f)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1,108
|
)
|
|
(1,153
|
)
|
||||||
|
Acquisition-related costs
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
(228
|
)
|
||||||
|
Certain significant items
(h)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
37
|
|
|
1,012
|
|
|
(672
|
)
|
||||||
|
Other unallocated
(i)
|
|
—
|
|
|
—
|
|
|
4
|
|
|
19
|
|
|
(95
|
)
|
|
(58
|
)
|
||||||
|
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
$
|
1,530
|
|
|
$
|
1,600
|
|
|
$
|
5,357
|
|
|
$
|
4,180
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reportable Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Primary Care
(b)
|
|
$
|
6,571
|
|
|
$
|
8,115
|
|
|
$
|
437
|
|
|
$
|
492
|
|
|
$
|
4,085
|
|
|
$
|
5,287
|
|
|
Specialty Care and Oncology
|
|
7,313
|
|
|
7,688
|
|
|
721
|
|
|
699
|
|
|
5,011
|
|
|
5,253
|
|
||||||
|
Established Products and Emerging Markets
(c)
|
|
9,772
|
|
|
10,401
|
|
|
169
|
|
|
139
|
|
|
5,623
|
|
|
6,253
|
|
||||||
|
Total reportable segments
|
|
23,656
|
|
|
26,204
|
|
|
1,327
|
|
|
1,330
|
|
|
14,719
|
|
|
16,793
|
|
||||||
|
Consumer Healthcare and other business activities
(d)
|
|
1,727
|
|
|
1,609
|
|
|
1,379
|
|
|
1,389
|
|
|
(919
|
)
|
|
(1,028
|
)
|
||||||
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate
(e)
|
|
—
|
|
|
—
|
|
|
419
|
|
|
488
|
|
|
(2,825
|
)
|
|
(3,341
|
)
|
||||||
|
Purchase accounting adjustments
(f)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(2,327
|
)
|
|
(2,586
|
)
|
||||||
|
Acquisition-related costs
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(203
|
)
|
|
(401
|
)
|
||||||
|
Certain significant items
(h)
|
|
—
|
|
|
—
|
|
|
103
|
|
|
339
|
|
|
924
|
|
|
(2,732
|
)
|
||||||
|
Other unallocated
(i)
|
|
—
|
|
|
—
|
|
|
14
|
|
|
26
|
|
|
(287
|
)
|
|
(346
|
)
|
||||||
|
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
$
|
3,240
|
|
|
$
|
3,574
|
|
|
$
|
9,082
|
|
|
$
|
6,359
|
|
|
(a)
|
Income from continuing operations before provision for taxes on income.
|
|
(b)
|
Revenues and Earnings from the Primary Care segment decreased in the three and six months ended
June 30, 2013
as compared to the prior year, and earnings as a percentage of revenues also declined, primarily due to the loss of exclusivity for Lipitor in developed Europe and Australia and the subsequent shift in the reporting of Lipitor in those markets to the Established Products business unit, as well as the losses of exclusivity of certain other products in various markets, lower Alliance revenues from Spiriva due to the final-year terms of our co-promotion agreements in the U.S., Australia, Canada and certain European countries and the termination of the co-promotion agreement with Aricept in Japan in December 2012.
|
|
(c)
|
Revenues and Earnings from the Established Products and Emerging Markets segment decreased in the three and six months ended
June 30, 2013
as compared to the prior year, primarily due to multi-source generic competition in the U.S. for Lipitor beginning in late-May 2012, partially offset by the addition of products in certain markets that shifted to the Established Products unit from other business
|
|
(d)
|
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.
|
|
(e)
|
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) and certain compensation and other costs not charged to our operating segments.
|
|
(f)
|
Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment.
|
|
(g)
|
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).
|
|
(h)
|
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.
|
|
(i)
|
Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
||||
|
United States
|
|
$
|
5,090
|
|
|
$
|
5,307
|
|
|
(4
|
)
|
|
$
|
10,004
|
|
|
$
|
10,837
|
|
|
(8
|
)
|
|
Developed Europe
(a)
|
|
2,913
|
|
|
3,291
|
|
|
(11
|
)
|
|
5,717
|
|
|
6,629
|
|
|
(14
|
)
|
||||
|
Developed Rest of World
(b)
|
|
2,108
|
|
|
2,526
|
|
|
(17
|
)
|
|
4,147
|
|
|
4,997
|
|
|
(17
|
)
|
||||
|
Emerging Markets
(c)
|
|
2,862
|
|
|
2,844
|
|
|
1
|
|
|
5,515
|
|
|
5,350
|
|
|
3
|
|
||||
|
Revenues
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
(7
|
)
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
(9
|
)
|
|
(a)
|
Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were
$2.2 billion
and
$2.5 billion
in the
second
quarter of
2013
and
2012
, respectively, and
$4.3 billion
and
$5.0 billion
in the first
six
months of
2013
and
2012
, respectively.
|
|
(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
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Revenues from biopharmaceutical products:
|
|
|
|
|
|
|
|
|
||||||||
|
Lyrica
|
|
$
|
1,134
|
|
|
$
|
1,035
|
|
|
$
|
2,200
|
|
|
$
|
1,990
|
|
|
Prevnar/Prevenar family
|
|
969
|
|
|
996
|
|
|
1,896
|
|
|
2,079
|
|
||||
|
Enbrel (Outside the U.S. and Canada)
|
|
960
|
|
|
988
|
|
|
1,837
|
|
|
1,887
|
|
||||
|
Celebrex
|
|
715
|
|
|
659
|
|
|
1,368
|
|
|
1,293
|
|
||||
|
Lipitor
(a)
|
|
545
|
|
|
1,220
|
|
|
1,171
|
|
|
2,615
|
|
||||
|
Viagra
|
|
484
|
|
|
485
|
|
|
945
|
|
|
981
|
|
||||
|
Zyvox
|
|
346
|
|
|
343
|
|
|
688
|
|
|
668
|
|
||||
|
Sutent
|
|
312
|
|
|
319
|
|
|
614
|
|
|
619
|
|
||||
|
Norvasc
|
|
313
|
|
|
348
|
|
|
614
|
|
|
682
|
|
||||
|
Premarin family
|
|
273
|
|
|
274
|
|
|
517
|
|
|
535
|
|
||||
|
BeneFIX
|
|
217
|
|
|
193
|
|
|
406
|
|
|
376
|
|
||||
|
Genotropin
|
|
198
|
|
|
212
|
|
|
387
|
|
|
407
|
|
||||
|
Vfend
|
|
177
|
|
|
178
|
|
|
364
|
|
|
356
|
|
||||
|
Pristiq
|
|
177
|
|
|
158
|
|
|
343
|
|
|
309
|
|
||||
|
Chantix/Champix
|
|
166
|
|
|
172
|
|
|
332
|
|
|
350
|
|
||||
|
Detrol/Detrol LA
|
|
155
|
|
|
205
|
|
|
306
|
|
|
400
|
|
||||
|
Xalatan/Xalacom
|
|
147
|
|
|
209
|
|
|
294
|
|
|
436
|
|
||||
|
ReFacto AF/Xyntha
|
|
146
|
|
|
138
|
|
|
285
|
|
|
270
|
|
||||
|
Medrol
|
|
123
|
|
|
141
|
|
|
236
|
|
|
275
|
|
||||
|
Effexor
|
|
125
|
|
|
106
|
|
|
230
|
|
|
235
|
|
||||
|
Zoloft
|
|
109
|
|
|
139
|
|
|
225
|
|
|
269
|
|
||||
|
Zithromax/Zmax
|
|
83
|
|
|
106
|
|
|
199
|
|
|
229
|
|
||||
|
Zosyn/Tazocin
|
|
102
|
|
|
141
|
|
|
189
|
|
|
269
|
|
||||
|
Relpax
|
|
94
|
|
|
89
|
|
|
180
|
|
|
174
|
|
||||
|
Fragmin
|
|
94
|
|
|
101
|
|
|
180
|
|
|
192
|
|
||||
|
Tygacil
|
|
92
|
|
|
86
|
|
|
179
|
|
|
167
|
|
||||
|
Rapamune
|
|
86
|
|
|
85
|
|
|
170
|
|
|
167
|
|
||||
|
Cardura
|
|
75
|
|
|
91
|
|
|
151
|
|
|
175
|
|
||||
|
Revatio
|
|
78
|
|
|
143
|
|
|
150
|
|
|
279
|
|
||||
|
EpiPen
|
|
73
|
|
|
92
|
|
|
145
|
|
|
150
|
|
||||
|
Sulperazon
|
|
73
|
|
|
71
|
|
|
144
|
|
|
129
|
|
||||
|
Xanax XR
|
|
65
|
|
|
69
|
|
|
135
|
|
|
137
|
|
||||
|
Inlyta
|
|
71
|
|
|
17
|
|
|
134
|
|
|
24
|
|
||||
|
Aricept
(b)
|
|
59
|
|
|
84
|
|
|
121
|
|
|
178
|
|
||||
|
Xalkori
|
|
67
|
|
|
23
|
|
|
120
|
|
|
40
|
|
||||
|
Toviaz
|
|
65
|
|
|
52
|
|
|
117
|
|
|
98
|
|
||||
|
Caduet
|
|
56
|
|
|
58
|
|
|
112
|
|
|
123
|
|
||||
|
BMP2
|
|
66
|
|
|
67
|
|
|
111
|
|
|
134
|
|
||||
|
Inspra
|
|
59
|
|
|
56
|
|
|
111
|
|
|
105
|
|
||||
|
Unasyn
|
|
53
|
|
|
57
|
|
|
109
|
|
|
111
|
|
||||
|
Neurontin
|
|
56
|
|
|
62
|
|
|
108
|
|
|
120
|
|
||||
|
Diflucan
|
|
60
|
|
|
67
|
|
|
105
|
|
|
124
|
|
||||
|
Somavert
|
|
55
|
|
|
49
|
|
|
103
|
|
|
94
|
|
||||
|
Metaxalone/Skelaxin
|
|
66
|
|
|
61
|
|
|
96
|
|
|
94
|
|
||||
|
Depo-Provera
|
|
54
|
|
|
44
|
|
|
90
|
|
|
77
|
|
||||
|
Xeljanz
|
|
22
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
|
Alliance revenues
(c)
|
|
756
|
|
|
862
|
|
|
1,503
|
|
|
1,698
|
|
||||
|
All other biopharmaceutical products
|
|
1,839
|
|
|
1,988
|
|
|
3,603
|
|
|
4,084
|
|
||||
|
|
|
12,110
|
|
|
13,139
|
|
|
23,656
|
|
|
26,204
|
|
||||
|
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Consumer Healthcare
|
|
800
|
|
|
769
|
|
|
1,611
|
|
|
1,496
|
|
||||
|
Other
(d)
|
|
63
|
|
|
60
|
|
|
116
|
|
|
113
|
|
||||
|
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
(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
$657 million
in the
second
quarter of
2013
, in comparison with the
second
quarter of
2012
, and by
$1.4 billion
in the first
six
months of 2013, in comparison with the first
six
months 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)
|
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 52 provides information about the following: our business; our performance during the second quarter and first six months 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 61 and consists of the following sub-sections:
|
|
◦
|
Revenues
. This sub-section, beginning on page 65, provides an analysis of our revenues and products for the second quarter and first six months 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 74, provides a discussion about our costs and expenses.
|
|
◦
|
Provision for Taxes on Income
. This sub-section, on page 79, provides a discussion of items impacting our tax provisions.
|
|
◦
|
Discontinued Operations
. This sub-section, beginning on page 79, provides an analysis of the financial statement impact of our discontinued operations.
|
|
◦
|
Adjusted Income
. This sub-section, beginning on page 80, 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 84, provides a discussion of changes in certain components of other comprehensive income.
|
|
•
|
Analysis of the Condensed Consolidated Balance Sheets
. This section, on page 84, provides a discussion of changes in certain balance sheet accounts.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Cash Flows
. This section, beginning on page 86, provides an analysis of our cash flows for the first six months of 2013 and 2012.
|
|
•
|
Analysis of Financial Condition
,
Liquidity and Capital Resources
. This section, beginning on page 87, provides an analysis of selected measures of our liquidity and of our capital resources as of June 30, 2013 and December 31, 2012, as well as a discussion of our outstanding debt and other commitments that existed as of June 30, 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 90, 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 91, 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
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
||||
|
Revenues
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
(7
|
)
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cost of sales
|
|
2,242
|
|
|
2,376
|
|
|
(6
|
)
|
|
4,505
|
|
|
4,759
|
|
|
(5
|
)
|
||||
|
% of revenues
|
|
17.3
|
%
|
|
17.0
|
%
|
|
|
|
|
17.7
|
%
|
|
17.1
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selling, informational and administrative expenses
|
|
3,591
|
|
|
3,665
|
|
|
(2
|
)
|
|
6,808
|
|
|
7,343
|
|
|
(7
|
)
|
||||
|
% of revenues
|
|
27.7
|
%
|
|
26.2
|
%
|
|
|
|
|
26.8
|
%
|
|
26.4
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Research and development expenses
|
|
1,530
|
|
|
1,600
|
|
|
(4
|
)
|
|
3,240
|
|
|
3,574
|
|
|
(9
|
)
|
||||
|
% of revenues
|
|
11.8
|
%
|
|
11.5
|
%
|
|
|
|
|
12.8
|
%
|
|
12.9
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Amortization of intangible assets
|
|
1,140
|
|
|
1,275
|
|
|
(11
|
)
|
|
2,359
|
|
|
2,678
|
|
|
(12
|
)
|
||||
|
% of revenues
|
|
8.8
|
%
|
|
9.1
|
%
|
|
|
|
|
9.3
|
%
|
|
9.6
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Restructuring charges and certain acquisition-related costs
|
|
183
|
|
|
184
|
|
|
(1
|
)
|
|
314
|
|
|
773
|
|
|
(59
|
)
|
||||
|
% of revenues
|
|
1.4
|
%
|
|
1.3
|
%
|
|
|
|
|
1.2
|
%
|
|
2.8
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Other (income)/deductions––net
|
|
(1,070
|
)
|
|
688
|
|
|
*
|
|
|
(925
|
)
|
|
2,327
|
|
|
*
|
|
||||
|
Income from continuing operations before provision for taxes on income
|
|
5,357
|
|
|
4,180
|
|
|
28
|
|
|
9,082
|
|
|
6,359
|
|
|
43
|
|
||||
|
% of revenues
|
|
41.3
|
%
|
|
29.9
|
%
|
|
|
|
|
35.8
|
%
|
|
22.9
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Provision for taxes on income
|
|
1,782
|
|
|
1,180
|
|
|
51
|
|
|
2,891
|
|
|
1,805
|
|
|
60
|
|
||||
|
Effective tax rate
|
|
33.3
|
%
|
|
28.2
|
%
|
|
|
|
|
31.8
|
%
|
|
28.4
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income from continuing operations
|
|
3,575
|
|
|
3,000
|
|
|
19
|
|
|
6,191
|
|
|
4,554
|
|
|
36
|
|
||||
|
% of revenues
|
|
27.6
|
%
|
|
21.5
|
%
|
|
|
|
|
24.4
|
%
|
|
16.4
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Discontinued operations––net of tax
|
|
10,559
|
|
|
260
|
|
|
*
|
|
|
10,708
|
|
|
509
|
|
|
*
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income before allocation to noncontrolling interests
|
|
14,134
|
|
|
3,260
|
|
|
*
|
|
|
16,899
|
|
|
5,063
|
|
|
*
|
|
||||
|
% of revenues
|
|
108.9
|
%
|
|
23.3
|
%
|
|
|
|
|
66.6
|
%
|
|
18.2
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Less: Net income attributable to noncontrolling interests
|
|
39
|
|
|
7
|
|
|
*
|
|
|
54
|
|
|
16
|
|
|
*
|
|
||||
|
Net income attributable to Pfizer Inc.
|
|
$
|
14,095
|
|
|
$
|
3,253
|
|
|
*
|
|
|
$
|
16,845
|
|
|
$
|
5,047
|
|
|
*
|
|
|
% of revenues
|
|
108.6
|
%
|
|
23.3
|
%
|
|
|
|
|
66.4
|
%
|
|
18.1
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Earnings per common share––basic
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
28
|
|
|
$
|
0.87
|
|
|
$
|
0.60
|
|
|
45
|
|
|
Discontinued operations––net of tax
|
|
1.50
|
|
|
0.03
|
|
|
*
|
|
|
1.50
|
|
|
0.07
|
|
|
*
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
2.00
|
|
|
$
|
0.44
|
|
|
*
|
|
|
$
|
2.37
|
|
|
$
|
0.67
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per common share––diluted
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
25
|
|
|
$
|
0.86
|
|
|
$
|
0.60
|
|
|
43
|
|
|
Discontinued operations––net of tax
|
|
1.48
|
|
|
0.03
|
|
|
*
|
|
|
1.49
|
|
|
0.07
|
|
|
*
|
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
1.98
|
|
|
$
|
0.43
|
|
|
*
|
|
|
$
|
2.34
|
|
|
$
|
0.67
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash dividends paid per common share
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
9
|
|
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
9
|
|
|
(a)
|
EPS amounts may not add due to rounding.
|
|
•
|
patent litigation settlement income of $1.4 billion (pre-tax) in the second quarter of 2013 (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
Note 4. Other (Income)/Deductions––Net
);
|
|
•
|
net charges for other legal matters that were approximately $485 million (pre-tax) lower in the second quarter of 2013 and $1.4 billion (pre-tax) lower in the first six months of 2013 compared to the same periods in 2012 (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
Note 4. Other (Income)/Deductions––Net
);
|
|
•
|
additional benefits generated from our global cost-reduction/productivity initiatives, partially offset by spending to support new product launches;
|
|
•
|
charges related to our non-acquisition related cost-reduction and productivity initiatives that were $486 million (pre-tax) lower in the first six months of 2013 than in the same period in 2012;
|
|
•
|
a gain of $459 million (pre-tax) in the first six months of 2013 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 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investments
);
|
|
•
|
lower amortization of intangible assets in the first six months of 2013 and in the second quarter of 2013 as compared to the same periods in 2012; and
|
|
•
|
acquisition-related costs that were approximately $115 million (pre-tax) lower in the second quarter of 2013 and $198 million (pre-tax) lower in the first six months of 2013 than in the same periods 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);
|
|
•
|
charges related to our non-acquisition related cost-reduction and productivity initiatives that were approximately $115 million (pre-tax) higher in the second quarter of 2013 compared to the same period in 2012; and
|
|
•
|
higher effective tax rates in the second quarter and first six months of 2013 compared to the same periods in 2012, primarily due to the tax rate associated with the aforementioned patent litigation settlement, and for the first six months of 2013, the gain associated with our equity-method investment in China, Hisun Pfizer, in addition to the aforementioned patent litigation settlement.
|
|
•
|
$103 million in the
second
quarter of
2013
and $110 million in the
second
quarter of
2012
, and $231 million in the first six months of
2013
and $234 million in the first six months 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
|
|
•
|
$75 million in the
second
quarter of
2013
and $78 million in the
second
quarter of
2012
, and $131 million in the first six months of
2013
and $181 million in the first six months 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. Viagra lost exclusivity in major EU markets in June 2013.
|
|
•
|
Aricept—Our rights to Aricept in Japan returned to Eisai Co., Ltd. in December 2012. The Aricept 23mg tablet lost exclusivity 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 early 2013 and in the U.S. in early 2014, 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. to co-promote Rebif in the U.S. will expire at the end of 2015. For additional information, see Notes to Condensed Consolidated Financial Statements––
Note 12. Commitments and Contingencies
.
|
|
•
|
Innovative Product Group––IPG will generally comprise medicines within several therapeutic areas that are expected to have market exclusivity beyond 2015. These therapeutic areas include immunology and inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women's/men's health.
|
|
•
|
Vaccines, Oncology and Consumer Healthcare Group––VOC will focus on the development of vaccines and products for oncology and consumer healthcare. Each of the three businesses comprising this group will operate as a separate, global business, requiring distinct specialization in terms of the science, talent and market approach necessary to deliver value to consumers and patients.
|
|
•
|
Value Products Group––VPG will include the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets. Additionally, VPG will include our biosimilars portfolio and current and future established products initiatives, such as our existing agreements with Mylan in Japan, Hisun in China and Teuto in Brazil.
|
|
•
|
On June 24, 2013, we completed the full disposition of our Animal Health business (Zoetis). The full disposition was completed through a series of steps, including the formation of Zoetis, an initial public offering (IPO) of an approximate 19.8% interest in Zoetis and an exchange offer for the remaining 80.2% interest. For additional information, see Notes to Condensed Consolidated Financial Statements––
Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures.
|
|
•
|
On April 29, 2013, we announced that we 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––
Note 2C. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Collaborative Arrangement.
|
|
•
|
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 $459 million in
Other (income)/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, we now hold 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—
Note 2A. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Acquisitions
.
|
|
•
|
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. In
|
|
•
|
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. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2A. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Acquisitions
.
|
|
•
|
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. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2A. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Acquisitions
.
|
|
The following table provides our current financial guidance for 2013:
|
|
|
Revenues
|
$50.8 to $52.8 billion
|
|
Adjusted cost of sales as a percentage of revenues
|
18.0% to 19.0%
|
|
Adjusted selling, informational and administrative expenses
|
$14.2 to $15.2 billion
|
|
Adjusted research and development expenses
|
$6.1 to $6.6 billion
|
|
Adjusted other (income)/deductions
|
Approximately $800 million
|
|
Effective tax rate on adjusted income
|
Approximately 28.0%
|
|
Reported diluted EPS
|
$3.07 to $3.22
|
|
Adjusted diluted EPS
|
$2.10 to $2.20
|
|
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
|
|
$14.4 - $15.1
|
|
$2.10 - $2.20
|
|
Purchase accounting impacts of transactions completed as of June 30, 2013
|
|
(3.4)
|
|
(0.50)
|
|
Acquisition-related costs
|
|
(0.4 - 0.5)
|
|
(0.06 - 0.07)
|
|
Non-acquisition-related restructuring costs
|
|
(0.5 - 0.8)
|
|
(0.08 - 0.12)
|
|
Certain other items incurred through June 30, 2013
(c)
|
|
0.7
|
|
0.10
|
|
Discontinued operations
(d)
|
|
10.7
|
|
1.56
|
|
Reported net income attributable to Pfizer Inc./diluted EPS guidance
|
|
$21.1 - $22.2
|
|
$3.07 - $3.22
|
|
(a)
|
Does not assume the completion of any business-development transactions not completed as of
June 30, 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
June 30, 2013
.
|
|
(b)
|
For an understanding of Adjusted income and Adjusted diluted EPS, see the “Adjusted Income” section of this MD&A.
|
|
(c)
|
Primarily reflects the income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceuticals Industries, Limited for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the United States.
|
|
(d)
|
The financial results of the Animal Health business from January 1, 2013 to June 24, 2013, as well as the gain on disposal of Zoetis, are presented as a discontinued operation. As a result, they have been excluded from all components of the financial guidance, except Reported diluted EPS and Reported net income attributable to Pfizer Inc. Reported diluted EPS and Reported net income guidance includes the gain on disposal of Zoetis, as well as the financial results of the Animal Health business as follows:
|
|
•
|
January 1, 2013 to February 6, 2013: 100% of Zoetis financial results are included;
|
|
•
|
February 7, 2013 to June 24, 2013: 80.2% of Zoetis financial results are included; 19.8% of Zoetis financial results are excluded, as this interest in Zoetis was no longer owned by Pfizer; and
|
|
•
|
June 24, 2013 through December 31, 2013: no actual or projected financial results of Zoetis are included.
|
|
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)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
% Change in Revenues
|
|||||||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Biopharmaceutical revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Primary Care Operating Segment
|
|
$
|
3,333
|
|
|
$
|
4,018
|
|
|
$
|
2,107
|
|
|
$
|
2,042
|
|
|
$
|
1,226
|
|
|
$
|
1,976
|
|
|
(17
|
)
|
|
3
|
|
|
(38
|
)
|
|
Specialty Care
|
|
3,378
|
|
|
3,497
|
|
|
1,489
|
|
|
1,493
|
|
|
1,889
|
|
|
2,004
|
|
|
(3
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
|
Oncology
|
|
399
|
|
|
323
|
|
|
183
|
|
|
141
|
|
|
216
|
|
|
182
|
|
|
24
|
|
|
30
|
|
|
19
|
|
||||||
|
SC&O Operating Segment
|
|
3,777
|
|
|
3,820
|
|
|
1,672
|
|
|
1,634
|
|
|
2,105
|
|
|
2,186
|
|
|
(1
|
)
|
|
2
|
|
|
(4
|
)
|
||||||
|
Emerging Markets
|
|
2,615
|
|
|
2,620
|
|
|
—
|
|
|
—
|
|
|
2,615
|
|
|
2,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Established Products
|
|
2,385
|
|
|
2,681
|
|
|
959
|
|
|
1,269
|
|
|
1,426
|
|
|
1,412
|
|
|
(11
|
)
|
|
(24
|
)
|
|
1
|
|
||||||
|
EP&EM Operating Segment
|
|
5,000
|
|
|
5,301
|
|
|
959
|
|
|
1,269
|
|
|
4,041
|
|
|
4,032
|
|
|
(6
|
)
|
|
(24
|
)
|
|
—
|
|
||||||
|
|
|
12,110
|
|
|
13,139
|
|
|
4,738
|
|
|
4,945
|
|
|
7,372
|
|
|
8,194
|
|
|
(8
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Consumer Healthcare
|
|
800
|
|
|
769
|
|
|
337
|
|
|
340
|
|
|
463
|
|
|
429
|
|
|
4
|
|
|
(1
|
)
|
|
8
|
|
||||||
|
Other
(a)
|
|
63
|
|
|
60
|
|
|
15
|
|
|
22
|
|
|
48
|
|
|
38
|
|
|
5
|
|
|
(32
|
)
|
|
26
|
|
||||||
|
Total revenues
|
|
$
|
12,973
|
|
|
$
|
13,968
|
|
|
$
|
5,090
|
|
|
$
|
5,307
|
|
|
$
|
7,883
|
|
|
$
|
8,661
|
|
|
(7
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Biopharmaceutical revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Primary Care Operating Segment
|
|
$
|
6,571
|
|
|
$
|
8,115
|
|
|
$
|
4,112
|
|
|
$
|
4,043
|
|
|
$
|
2,459
|
|
|
$
|
4,072
|
|
|
(19
|
)
|
|
2
|
|
|
(40
|
)
|
|
Specialty Care
|
|
6,542
|
|
|
7,077
|
|
|
2,852
|
|
|
3,111
|
|
|
3,690
|
|
|
3,966
|
|
|
(8
|
)
|
|
(8
|
)
|
|
(7
|
)
|
||||||
|
Oncology
|
|
771
|
|
|
611
|
|
|
349
|
|
|
264
|
|
|
422
|
|
|
347
|
|
|
26
|
|
|
32
|
|
|
22
|
|
||||||
|
SC&O Operating Segment
|
|
7,313
|
|
|
7,688
|
|
|
3,201
|
|
|
3,375
|
|
|
4,112
|
|
|
4,313
|
|
|
(5
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||||
|
Emerging Markets
|
|
5,035
|
|
|
4,919
|
|
|
—
|
|
|
—
|
|
|
5,035
|
|
|
4,919
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
|
Established Products
|
|
4,737
|
|
|
5,482
|
|
|
1,942
|
|
|
2,712
|
|
|
2,795
|
|
|
2,770
|
|
|
(14
|
)
|
|
(28
|
)
|
|
1
|
|
||||||
|
EP&EM Operating Segment
|
|
9,772
|
|
|
10,401
|
|
|
1,942
|
|
|
2,712
|
|
|
7,830
|
|
|
7,689
|
|
|
(6
|
)
|
|
(28
|
)
|
|
2
|
|
||||||
|
|
|
23,656
|
|
|
26,204
|
|
|
9,255
|
|
|
10,130
|
|
|
14,401
|
|
|
16,074
|
|
|
(10
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Consumer Healthcare
|
|
1,611
|
|
|
1,496
|
|
|
715
|
|
|
666
|
|
|
896
|
|
|
830
|
|
|
8
|
|
|
7
|
|
|
8
|
|
||||||
|
Other
(a)
|
|
116
|
|
|
113
|
|
|
34
|
|
|
41
|
|
|
82
|
|
|
72
|
|
|
3
|
|
|
(17
|
)
|
|
14
|
|
||||||
|
Total revenues
|
|
$
|
25,383
|
|
|
$
|
27,813
|
|
|
$
|
10,004
|
|
|
$
|
10,837
|
|
|
$
|
15,379
|
|
|
$
|
16,976
|
|
|
(9
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|
(a)
|
Represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
•
|
the decrease in operational revenues of approximately $863 million in the second quarter and $2.0 billion in the first six months of 2013, compared to the same periods in 2012, due to the loss of exclusivity of various products in certain markets, including a decrease of $657 million in the second quarter and $1.4 billion in the first six months of 2013 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 $210 million in the second quarter and $381 million in the first six months of 2013, from Spiriva due to the final-year terms of our co-promotion agreements in the U.S., Australia, Canada and certain European countries, and from Aricept due to the loss of exclusivity in the majority of European markets and the
|
|
•
|
the timing of government purchases of Prevnar/Prevenar in various markets; and
|
|
•
|
the unfavorable impact of foreign exchange of $385 million in the second quarter and $511 million in the first six months of 2013, or 3% and 2%, respectively,
|
|
•
|
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
4%
in the
second
quarter of
2013
and
9%
in the first six months of 2013, compared to the same periods in
2012
, primarily reflecting lower revenues from Lipitor, Revatio, Geodon and Detrol/Detrol LA, all due to loss of exclusivity; and lower revenues from the Prevnar/Prevenar family, Zosyn and atorvastatin and from Spiriva (reflecting the final-year terms of our Spiriva co-promotion agreement in the U.S.). 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
10%
in each of the
second
quarter and first six months of
2013
, compared to the same periods in
2012
, primarily due to the loss of exclusivity of Lipitor in most of developed Europe and Australia, and Xalatan/Xalacom in the majority of European markets and in Australia, and the unfavorable impact of foreign exchange of 5% in the second quarter of 2013 and 3% in the first six months of 2013. Operationally, revenues decreased 5% in the
second
quarter of
2013
and 7% in the first six months of 2013, compared to the same periods in
2012
. In addition to Lipitor and Xalatan/Xalacom, the decrease in operational revenues was driven by Detrol/Detrol LA and Aricept (direct sales), 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 of our Spiriva co-promotion agreements relating to those countries), as well as lower revenues for the Prevnar/Prevenar family and Norvasc. The impact of these adverse factors was partially offset by the operational growth of Lyrica, Inlyta and Xalkori.
|
|
•
|
Primary Care unit revenues decreased
17%
in the
second
quarter of
2013
and
19%
in the first six months of 2013, compared to the same periods in
2012
, reflecting lower operational revenues of 15% and 18% in the second quarter and the first six months of 2013, respectively, as well as the unfavorable impact of foreign exchange. The decline in operational revenues was 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 certain other products in various markets and the termination of the co-promotion agreement for Aricept in Japan in December 2012. Additionally, in the U.S., Australia, Canada and certain European countries, the co-promotion agreements for Spiriva are in the final year, which has resulted in the decline in Pfizer's share of Spiriva revenues per the terms of those agreements. These declines were partially offset by the strong performance of Lyrica in developed markets and Celebrex and Pristiq in the U.S.
|
|
•
|
Specialty Care unit revenues decreased
3%
in the
second
quarter of
2013
and
8%
in the first six months of 2013, compared to the same periods in
2012
reflecting operationally unchanged revenues in the second quarter of 2013, and lower operational revenues of 6% in the first six months of 2013, as well as the unfavorable impact of foreign exchange. The decline in operational revenues in the first six months of 2013 was primarily due to the losses of exclusivity and the resulting shift in
|
|
•
|
Oncology unit revenues increased
24%
in the
second
quarter of
2013
and
26%
in the first six months of 2013, compared to the same periods in
2012
, reflecting higher operational revenues of 28% and 29% in the second quarter and the first six months of 2013, respectively, partially offset by the unfavorable impact of foreign exchange of 4% and 3% in the second quarter and the first six months of 2013, respectively. 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 EU and Japan, due to increased competition and cost-containment measures in those markets as well as some conversion from Sutent to Inlyta in Japan due to a broader label for Inlyta in Japan, which overlaps with the Sutent indication.
|
|
•
|
Established Products unit revenues decreased
11%
in the
second
quarter of
2013
and
14%
in the first six months of 2013, compared to the same periods in
2012
, due to lower operational revenues of 7% and 12% in the second quarter and the first six months of 2013, respectively, as well as the unfavorable impact of foreign exchange. The decline in Established Products unit operational revenues in the
second
quarter and first six months 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. These decreases were 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 and the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan.
|
|
•
|
Emerging Markets unit revenues were relatively flat in the
second
quarter of
2013
compared to the same period in
2012
and increased
2%
in the first six months of 2013, compared to the same period in
2012
, due to higher operational revenues of 4% and 5% in the second quarter and the first six months of 2013, respectively, partially offset by the unfavorable impact of foreign exchange of 4% and 3% in the second quarter and the first six months of 2013, respectively. The increase in Emerging Markets unit operational revenues in the
second
quarter and first six months of
2013
was primarily due to strong volume growth in China, most notably for Lipitor and Prevenar, which was partially offset by the transfer of certain product rights to our equity-method investment in China in the first quarter of 2013 and the timing of government purchases of Enbrel and the Prevenar family in certain other emerging markets.
|
|
•
|
Consumer Healthcare unit revenues increased
4%
in the
second
quarter of
2013
and
8%
in the first six months of 2013, compared to the same periods in
2012
, reflecting higher operational revenues of 5% and 8% in the second quarter and the first six months of 2013, respectively. The operational revenue increase for the second quarter and first six months of 2013 was primarily due to strong growth globally for Centrum as a result of several recent product launches in key international markets, as well as increased promotion in the U.S. following the announcement of favorable results from a landmark study that evaluated the long-term health benefits of multivitamins for men age 50 and older. The increase for the six months of 2013 also reflects growth in the specialty supplements, analgesics and personal care categories.
|
|
The following table provides information about certain deductions from revenues:
|
||||||||||||||||
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Medicaid and related state program rebates
(a)
|
|
$
|
141
|
|
|
$
|
215
|
|
|
$
|
293
|
|
|
$
|
439
|
|
|
Medicare rebates
(a)
|
|
177
|
|
|
179
|
|
|
333
|
|
|
413
|
|
||||
|
Performance-based contract rebates
(a), (b)
|
|
485
|
|
|
553
|
|
|
962
|
|
|
943
|
|
||||
|
Chargebacks
(c)
|
|
830
|
|
|
831
|
|
|
1,823
|
|
|
1,763
|
|
||||
|
Sales allowances
(d)
|
|
1,002
|
|
|
1,137
|
|
|
2,029
|
|
|
2,310
|
|
||||
|
Total
|
|
$
|
2,635
|
|
|
$
|
2,915
|
|
|
$
|
5,440
|
|
|
$
|
5,868
|
|
|
(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, Medicaid and U.S. performance-based contract 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
|
|
•
|
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
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
|
|
|
June 30,
2013 |
|
|
|
|
||||
|
PRODUCT
|
|
PRIMARY INDICATIONS
|
|
|
% Change
(a)
|
|
|
|
% Change
(a)
|
|
||||||
|
Lyrica
|
|
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
|
|
$
|
1,134
|
|
|
10
|
|
|
$
|
2,200
|
|
|
11
|
|
|
Prevnar/Prevenar family
|
|
Vaccine for prevention of pneumococcal disease
|
|
969
|
|
|
(3
|
)
|
|
1,896
|
|
|
(9
|
)
|
||
|
Enbrel (Outside the U.S. and Canada)
|
|
Rheumatoid, juvenile rheumatoid and psoriatic arthritis, plaque psoriasis and ankylosing spondylitis
|
|
960
|
|
|
(3
|
)
|
|
1,837
|
|
|
(3
|
)
|
||
|
Celebrex
|
|
Arthritis pain and inflammation, acute pain
|
|
715
|
|
|
8
|
|
|
1,368
|
|
|
6
|
|
||
|
Lipitor
|
|
Reduction of LDL cholesterol
|
|
545
|
|
|
(55
|
)
|
|
1,171
|
|
|
(55
|
)
|
||
|
Viagra
|
|
Erectile dysfunction
|
|
484
|
|
|
—
|
|
|
945
|
|
|
(4
|
)
|
||
|
Zyvox
|
|
Bacterial infections
|
|
346
|
|
|
1
|
|
|
688
|
|
|
3
|
|
||
|
Sutent
|
|
Advanced and/or metastatic renal cell carcinoma (mRCC) and refractory gastrointestinal stromal tumors (GIST) and advanced pancreatic neuroendocrine tumor
|
|
312
|
|
|
(2
|
)
|
|
614
|
|
|
(1
|
)
|
||
|
Norvasc
|
|
Hypertension
|
|
313
|
|
|
(10
|
)
|
|
614
|
|
|
(10
|
)
|
||
|
Premarin family
|
|
Menopause
|
|
273
|
|
|
—
|
|
|
517
|
|
|
(3
|
)
|
||
|
BeneFIX
|
|
Hemophilia
|
|
217
|
|
|
12
|
|
|
406
|
|
|
8
|
|
||
|
Genotropin
|
|
Replacement of human growth hormone
|
|
198
|
|
|
(7
|
)
|
|
387
|
|
|
(5
|
)
|
||
|
Vfend
|
|
Fungal infections
|
|
177
|
|
|
(1
|
)
|
|
364
|
|
|
2
|
|
||
|
Pristiq
|
|
Depression
|
|
177
|
|
|
12
|
|
|
343
|
|
|
11
|
|
||
|
Chantix/Champix
|
|
An aid to smoking cessation treatment
|
|
166
|
|
|
(3
|
)
|
|
332
|
|
|
(5
|
)
|
||
|
Detrol/Detrol LA
|
|
Overactive bladder
|
|
155
|
|
|
(24
|
)
|
|
306
|
|
|
(24
|
)
|
||
|
Xalatan/Xalacom
|
|
Glaucoma and ocular hypertension
|
|
147
|
|
|
(30
|
)
|
|
294
|
|
|
(33
|
)
|
||
|
ReFacto AF/Xyntha
|
|
Hemophilia
|
|
146
|
|
|
6
|
|
|
285
|
|
|
6
|
|
||
|
Medrol
|
|
Inflammation
|
|
123
|
|
|
(13
|
)
|
|
236
|
|
|
(14
|
)
|
||
|
Effexor
|
|
Depression and certain anxiety disorders
|
|
125
|
|
|
18
|
|
|
230
|
|
|
(2
|
)
|
||
|
Zoloft
|
|
Depression and certain anxiety disorders
|
|
109
|
|
|
(22
|
)
|
|
225
|
|
|
(16
|
)
|
||
|
Zithromax/Zmax
|
|
Bacterial infections
|
|
83
|
|
|
(22
|
)
|
|
199
|
|
|
(13
|
)
|
||
|
Zosyn/Tazocin
|
|
Antibiotic
|
|
102
|
|
|
(28
|
)
|
|
189
|
|
|
(30
|
)
|
||
|
Relpax
|
|
Treats the symptoms of migraine headaches
|
|
94
|
|
|
6
|
|
|
180
|
|
|
3
|
|
||
|
Fragmin
|
|
Anticoagulant
|
|
94
|
|
|
(7
|
)
|
|
180
|
|
|
(6
|
)
|
||
|
Tygacil
|
|
Antibiotic
|
|
92
|
|
|
7
|
|
|
179
|
|
|
7
|
|
||
|
Rapamune
|
|
Immunosuppressant
|
|
86
|
|
|
1
|
|
|
170
|
|
|
2
|
|
||
|
Cardura
|
|
Hypertension/Benign prostatic hyperplasia
|
|
75
|
|
|
(18
|
)
|
|
151
|
|
|
(14
|
)
|
||
|
Revatio
|
|
Pulmonary arterial hypertension (PAH)
|
|
78
|
|
|
(45
|
)
|
|
150
|
|
|
(46
|
)
|
||
|
EpiPen
|
|
Epinephrine injection used in treatment of life-threatening allergic reactions
|
|
73
|
|
|
(21
|
)
|
|
145
|
|
|
(3
|
)
|
||
|
Sulperazon
|
|
Antibiotic
|
|
73
|
|
|
3
|
|
|
144
|
|
|
12
|
|
||
|
Xanax XR
|
|
Anxiety disorders
|
|
65
|
|
|
(6
|
)
|
|
135
|
|
|
(1
|
)
|
||
|
Inlyta
|
|
Advanced renal cell carcinoma (RCC)
|
|
71
|
|
|
*
|
|
|
134
|
|
|
*
|
|
||
|
Aricept
(b)
|
|
Alzheimer’s disease
|
|
59
|
|
|
(30
|
)
|
|
121
|
|
|
(32
|
)
|
||
|
Xalkori
|
|
Advanced non-small cell lung cancer (NSCLC)
|
|
67
|
|
|
191
|
|
|
120
|
|
|
*
|
|
||
|
Toviaz
|
|
Overactive bladder
|
|
65
|
|
|
25
|
|
|
117
|
|
|
19
|
|
||
|
Caduet
|
|
Reduction of LDL cholesterol and hypertension
|
|
56
|
|
|
(3
|
)
|
|
112
|
|
|
(9
|
)
|
||
|
BMP2
|
|
Development of bone cartilage
|
|
66
|
|
|
(1
|
)
|
|
111
|
|
|
(17
|
)
|
||
|
Inspra
|
|
Hypertension
|
|
59
|
|
|
5
|
|
|
111
|
|
|
6
|
|
||
|
Unasyn
|
|
Injectable antibacterial
|
|
53
|
|
|
(7
|
)
|
|
109
|
|
|
(2
|
)
|
||
|
Neurontin
|
|
Seizures
|
|
56
|
|
|
(10
|
)
|
|
108
|
|
|
(10
|
)
|
||
|
Diflucan
|
|
Fungal infections
|
|
60
|
|
|
(10
|
)
|
|
105
|
|
|
(15
|
)
|
||
|
Somavert
|
|
Acromegaly
|
|
55
|
|
|
12
|
|
|
103
|
|
|
10
|
|
||
|
Metaxalone/Skelaxin
|
|
Muscle relaxer
|
|
66
|
|
|
8
|
|
|
96
|
|
|
2
|
|
||
|
Depo-Provera
|
|
Contraceptive
|
|
54
|
|
|
23
|
|
|
90
|
|
|
17
|
|
||
|
Xeljanz
|
|
Rheumatoid arthritis
|
|
22
|
|
|
*
|
|
|
33
|
|
|
*
|
|
||
|
Alliance revenues
(c)
|
|
Various
|
|
756
|
|
|
(12
|
)
|
|
1,503
|
|
|
(11
|
)
|
||
|
All other
|
|
Various
|
|
1,839
|
|
|
(7
|
)
|
|
3,603
|
|
|
(12
|
)
|
||
|
(a)
|
As compared to the
three and six
months ended
July 1, 2012
, respectively.
|
|
(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.
|
|
•
|
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 generalized anxiety disorder. Lyrica recorded an increase in worldwide revenues of 10% in the second quarter of 2013 and 11% in the first six months of 2013, compared to the same periods in 2012. Internationally, Lyrica revenues increased 2% in the second quarter of 2013 and 7% in the first six months of 2013, compared to the same periods in 2012, with the growth due to a focus on enhancing diagnosis and treatment rates of neuropathic back pain and expediting the identification and appropriate treatment of generalized anxiety disorder in the EU, and physician education regarding neuropathic pain and fibromyalgia in Japan. Foreign exchange had an unfavorable impact on international revenues of 6% in the second quarter of 2013 and 4% in the first six months of 2013, compared to the same periods in 2012. In the U.S., revenues increased 22% in the second quarter of 2013 and 16% in the first six months of 2013, compared to the same periods 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.
|
|
•
|
Prevnar/Prevenar
family of products consists of
Prevnar 13/Prevenar 13
and
Prevnar/Prevenar (7-valent)
,
our pneumococcal conjugate vaccines for the prevention of various syndromes of pneumococcal disease. 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. Prevnar 13/Prevenar 13 is indicated 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 90 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. On July 9, 2013, the European Commission approved the expanded use of Prevenar 13 for adults aged 18 to 49 years for active immunization for the prevention of invasive pneumococcal disease caused by the 13 serotypes included in the vaccine. Previously approved in the EU for use in infants and children aged 6 weeks to 17 years, as well as adults 50 years of age and older, Prevenar 13 is now the only pneumococcal vaccine that is approved to help protect against invasive disease from infancy through adulthood in Europe, and Europe is the first region with approvals that cover all ages.
Worldwide revenues for Prevnar 13/Prevenar 13 decreased 5% in the second quarter of 2013 and 8% in the first six months of 2013, compared to the same periods in 2012. In the U.S., revenues for Prevnar 13 decreased 2% in the second quarter of 2013 and 12% in the first six months of 2013, compared to the same periods in 2012, primarily as a result of the timing of government purchases.
|
|
•
|
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 3% in the second quarter and the first six months of 2013, compared to the same periods 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.
|
|
•
|
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 other markets, recorded an increase in worldwide revenues of 8% in the second quarter of 2013 and 6% in the first six months of 2013, compared to the same periods in 2012. Strong operational performance in the U.S. was primarily driven by price increases and market growth, partially offset by volume erosion due to ongoing generic pressure, as well as higher rebates and sales allowances. However, Celebrex continued to slow the rate of volume erosion due to continued strong investment in 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, South Korea in the rheumatology and orthopedic sectors, and in emerging markets, partially offset by lower revenues in the developed markets in Europe in the second quarter and first six months of 2013, compared to the same periods in 2012. Celebrex is supported by continued educational and promotional efforts highlighting its efficacy and safety profile for appropriate patients and by the facilitation of appropriate access to the medicine.
|
|
▪
|
Lipitor
is for the treatment of elevated LDL-cholesterol levels in the blood. Branded Lipitor recorded worldwide revenues of $545 million, a decrease of 55%, in the second quarter of 2013, and $1.2 billion, or a decrease of 55%, in the first six months of 2013, compared to the same periods 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 $86 million, a decrease of 71% in the second quarter of 2013, and $257 million, a decrease of 62% in the first six months of 2013, compared to the same periods in 2012; and
|
|
▪
|
in our international markets, branded Lipitor revenues were $459 million, a decrease of 50% in the second quarter of 2013, and $914 million, a decrease of 53%, in the first six months of 2013, compared to the same periods in 2012. Foreign exchange had an unfavorable impact on international revenues of $15 million in the second quarter and $21 million in the first six months of 2013, compared to the same periods in 2012.
|
|
•
|
Viagra
is
indicated for the treatment for erectile dysfunction. Viagra worldwide revenues were relatively flat in the second quarter of 2013 compared to the same period in 2012 and decreased 4% in the first six months of 2013, compared to the same periods in 2012. U.S. revenues increased 5% in the second quarter of 2013 compared to the same period in 2012, primarily due to market share increase as a result of promotional activities, as well as price increases. U.S. revenues decreased 2% in the first six months of 2013, compared to the same period in 2012, primarily due to lower prescription volume as a result of increased competition and an overall market decrease, and increased chargebacks. International revenues decreased 6% in both the second quarter and in the first six months of 2013, compared to the same periods in 2012. The decreases were primarily due to branded and generic competitive pressure in developed Europe, other developed markets and emerging markets, due to the impact of herbal and generic competition. Loss of exclusivity for Viagra in EU major markets occurred in late-June 2013.
|
|
•
|
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 1% in the second quarter of 2013 and 3% in the first six months of 2013, compared to the same periods in 2012, primarily due to growth in developed 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 decreased 2% in the second quarter of 2013 and 1% in the first six months of 2013, compared to the same periods in 2012, due to decreases in the EU and Japan as a result of increased competition and cost-containment measures in those markets, as well as some conversion from Sutent to Inlyta in Japan due to broader label for Inlyta in Japan, which overlaps with the Sutent indication, partially offset by price increases in the U.S. and increases in uptake in key emerging markets, most notably China, Brazil and Poland.
|
|
•
|
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 both the second quarter and in the first six months of 2013, compared to the same periods in 2012.
|
|
•
|
Our
Premarin
family of products helps women address moderate-to-severe menopausal symptoms. Premarin worldwide revenues were relatively flat in the second quarter of 2013 compared to the same period in 2012 and decreased 3% in the first six months of 2013, compared to the same period in 2012. U.S. revenues increased 1% in the second quarter of 2013 compared to the same period in 2012 and decreased 3% in the first six months of 2013, compared to the same period in 2012. Performance in the second quarter and the first six months of 2013 was unfavorably impacted by volume declines of Premarin/Prempro due to generic competition, as well as increased rebates, and favorably impacted by volume growth of Premarin Vaginal Cream and price increases in July 2012 and January 2013. Internationally, declines in the second quarter and first six months of 2013 were primarily attributable to the loss of prescription volume in emerging markets due to generic and branded competition, primarily in Latin America compared to the same periods 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 12% in the second quarter of 2013 and 8% in the first six months of 2013, compared to the same periods 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 6% in both the second quarter and in the first six months of 2013, compared to the same periods 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 ("FuseNGo") in several European countries.
|
|
•
|
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 7% in the second quarter of 2013 and 5% in the first six months of 2013, compared to the same periods in 2012, primarily due to increased competition in the EU, as well as government mandated price reductions in Spain, Sweden and Switzerland.
|
|
•
|
Vfend
is a broad-spectrum agent for treating yeast and molds. Vfend worldwide revenues decreased 1% in the second quarter of 2013, compared to the same period in 2012, primarily due to increased generic competition in the U.S. market resulting in significant price erosion, and increased 2% in the first six months of 2013, compared to the same period in 2012. International revenues increased 2% in the second quarter of 2013 and 6% in the first six months of 2013, compared to the same periods in 2012, primarily due to strong year-over-year growth in key developed and emerging markets. Revenues in the U.S. decreased 22% in the second quarter of 2013 and 28% in the first six months of 2013, compared to the same periods in 2012, primarily due to the loss of exclusivity of Vfend tablets and the launch of generic voriconazole (generic Vfend) in February 2011.
|
|
•
|
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 12% in the second quarter of 2013 and 11% in the first six months of 2013, compared to the same periods in 2012, primarily due to prescription growth in Canada and Australia and, in the U.S., more favorable contract rebates and a price increase.
|
|
•
|
Chantix/Champix
is an aid to smoking-cessation treatment in adults 18 years of age and older. Chantix/Champix worldwide revenues decreased 3% in the second quarter of 2013 and 5% in the first six months of 2013, compared to the same periods in 2012, primarily due to lower-than-expected market growth across several key markets as a result of a challenging macro-economic environment, as well as the lingering impact from previous negative media exposure. We are continuing our educational and promotional efforts, which are focused on empowering smokers to talk to their doctor about quitting smoking, as well as emphasizing the importance of the physician-patient dialogue in helping patients quit smoking. We have also been identifying alternative treatment-funding models and highlighting the Chantix/Champix benefit-risk proposition.
|
|
•
|
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 24% in both the second quarter and in the first six months of 2013, compared to the same periods 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 30% in the second quarter of 2013 and 33% in the first six months of 2013, compared to the same periods in 2012. Lower revenues were due primarily to the loss of exclusivity in the majority of European markets in January 2012 and Australia in July 2012.
|
|
•
|
Revatio
is for the treatment of pulmonary arterial hypertension (PAH). Worldwide revenues decreased 45% in the second quarter of 2013 and 46% in the first six months of 2013, compared to the same periods in 2012, primarily due to the loss of exclusivity for Revatio tablet in the U.S. in September 2012. Revatio intravenous injection lost 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 45 countries, including the U.S., EU, Switzerland, Japan, Canada, Australia, South Korea and some emerging markets, including Mexico (exact indications vary by region). Inlyta recorded worldwide revenues of $71 million in the second quarter of 2013 and $134 million in the first six months of 2013.
|
|
•
|
Xalkori,
for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive, is approved in more than 60 countries, including the U.S., EU, Japan, South Korea, Canada and Switzerland, as well as in many emerging markets, including China, Russia, Mexico, India and Turkey. Xalkori recorded worldwide revenues of $67 million in the second quarter of 2013, with 52% of those revenues generated in the U.S., and $120 million in the first six months of 2013, with 53% of those revenues generated in the U.S.
|
|
•
|
Xeljanz
was approved in the U.S. in November 2012, in Japan in March 2013 and in Switzerland, Argentina, Kuwait, the United Arab Emirates and Russia in July 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 $22 million in the second quarter of 2013 and $33 million in the first six months of 2013. In July 2013, the European Medicine Agency's (EMA's) Committee for Medicinal Products for Human Use (CHMP) confirmed its April 25, 2013 opinion recommending against approval of tofacitinib (Xeljanz) in the EU for the treatment of adult patients with moderate-to-severe active rheumatoid arthritis. We plan to work with the EMA to determine what additional data will be
|
|
•
|
Alliance revenues
worldwide decreased 12% in the second quarter of 2013 and 11% in the first six months of 2013, compared to the same periods 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 the termination of the co-promotion agreement for Aricept in Japan in December 2012. In addition, in the U.S., Australia, Canada and certain European countries, the co-promotion agreements for Spiriva are in the final year, which has resulted in a decline in Pfizer's share of Spiriva's revenues pursuant to the terms of those agreements. These declines were partially offset by the strong performance of Enbrel and Rebif in the U.S. The Aricept 23mg tablet lost exclusivity in the U.S. in 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 that indication for Eliquis in the U.S., UK, Germany, Denmark, Japan, Netherlands and Sweden. The two companies share commercialization expenses and profit/losses equally on a global basis.
|
|
•
|
Embeda
—A prior approval supplement for a manufacturing change was submitted to the FDA in early July 2013. If that change is approved by the FDA, we anticipate returning Embeda to the market in the first half of 2014.
|
|
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
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
||||
|
Primary Care
(a)
|
|
$
|
214
|
|
|
$
|
251
|
|
|
(15
|
)
|
|
$
|
437
|
|
|
$
|
492
|
|
|
(11
|
)
|
|
Specialty Care and Oncology
(a)
|
|
316
|
|
|
326
|
|
|
(3
|
)
|
|
721
|
|
|
699
|
|
|
3
|
|
||||
|
Established Products and Emerging Markets
(a)
|
|
105
|
|
|
66
|
|
|
59
|
|
|
169
|
|
|
139
|
|
|
22
|
|
||||
|
Consumer Healthcare
(a)
|
|
26
|
|
|
23
|
|
|
13
|
|
|
48
|
|
|
43
|
|
|
12
|
|
||||
|
Worldwide Research and Development/Pfizer Medical
(b)
|
|
676
|
|
|
670
|
|
|
1
|
|
|
1,330
|
|
|
1,345
|
|
|
(1
|
)
|
||||
|
Corporate and other
(c)
|
|
193
|
|
|
264
|
|
|
(27
|
)
|
|
535
|
|
|
856
|
|
|
(38
|
)
|
||||
|
Total Research and Development Expenses
|
|
$
|
1,530
|
|
|
$
|
1,600
|
|
|
(4
|
)
|
|
$
|
3,240
|
|
|
$
|
3,574
|
|
|
(9
|
)
|
|
(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)
|
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.
|
|
(c)
|
Corporate and other includes unallocated costs, primarily facility costs, information technology, share-based compensation, and restructuring-related costs. The decreases in the
second
quarter primarily reflect lower costs resulting from the implementation of cost-reduction/productivity initiatives, and the decreases in the first six months
of
2013
primarily reflect lower charges relating to implementing our cost-reduction and productivity initiatives as well as efficiencies gained from these efforts
(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
|
|
(a)
|
This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with BMS.
|
|
PENDING U.S. NEW DRUG APPLICATIONS (NDA) AND SUPPLEMENTAL FILINGS
|
||
|
PRODUCT
|
INDICATION
|
DATE FILED*
|
|
Eliquis (Apixaban)
(a)
|
Prevention of venous thromboembolism following hip or knee replacement surgery
|
July 2013
|
|
Bazedoxifene-conjugated estrogens
|
Treatment of symptoms associated with menopause and osteoporosis
|
December 2012
|
|
Tafamidis meglumine
(b)
|
Treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP)
|
February 2012
|
|
Genotropin Mark VII Multidose Disposable Device (Somatropin rDNA Origin)
(c)
|
Replacement of human growth hormone deficiency
|
December 2009
|
|
Celebrex (Celecoxib)
(d)
|
Chronic pain
|
October 2009
|
|
Remoxy (Oxycodone Hydrochloride)
(e)
|
Management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
August 2008
|
|
Viviant (Bazedoxifene)
(f)
|
Osteoporosis treatment and prevention
|
August 2006
|
|
(a)
|
This indication for Eliquis (apixaban) was developed in collaboration with BMS.
|
|
(b)
|
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.
|
|
(c)
|
After receiving a “complete response” letter from the FDA for the Genotropin Mark VII multidose disposable device submission, we submitted our response in August 2010. In April 2011, we received a second “complete response” letter from the FDA, and we submitted our response in July 2013.
|
|
(d)
|
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.
|
|
(e)
|
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 2013 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.
|
|
(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*
|
|
Prevenar 13 Adult
|
Application filed in Japan for prevention of pneumococcal pneumonia and invasive disease in adults 65 years of age and older
|
—
|
July 2013
|
|
Prevenar 13 Infant
|
Approval in Japan for prevention of invasive pneumococcal disease in infants and young children
|
June 2013
|
__
|
|
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
|
|
*
|
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.
|
|
LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS
FOR IN-LINE AND IN-REGISTRATION PRODUCTS
|
|
|
PRODUCT
|
INDICATION
|
|
Eliquis (Apixaban)
|
For the 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, ulcerative colitis and
psoriatic arthritis
|
|
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 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
|
|
(a)
|
In December 2012, the FDA placed a new partial clinical hold on the development of nerve growth factor (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. Pfizer submitted a Clinical Hold Complete Response to the FDA in June 2013. The FDA lifted the partial clinical hold from the tanezumab program for all indications in July 2013.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
||||
|
Cost of sales
|
|
$
|
2,242
|
|
|
$
|
2,376
|
|
|
(6
|
)
|
|
$
|
4,505
|
|
|
$
|
4,759
|
|
|
(5
|
)
|
|
•
|
the favorable impact of foreign exchange of 6% and 3%, respectively; and, to a lesser extent,
|
|
•
|
lower costs related to increased benefits generated from the ongoing productivity initiatives to streamline the manufacturing network in the second quarter and first six months of 2013, compared to the same periods in 2012, as well as a decrease in our global cost-reduction/productivity initiatives and acquisition-related costs in the first six months of 2013, compared to the same period in 2012,
|
|
•
|
an unfavorable shift in geographic, product and business mix due to products that lost exclusivity in various markets.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change
|
|
||||
|
Selling, informational and administrative expenses
|
|
$
|
3,591
|
|
|
$
|
3,665
|
|
|
(2
|
)
|
|
$
|
6,808
|
|
|
$
|
7,343
|
|
|
(7
|
)
|
|
•
|
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 2% and 1%, respectively,
|
|
•
|
spending in support of newly launched products.
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
||||
|
Research and development expenses
|
|
$
|
1,530
|
|
|
$
|
1,600
|
|
|
(4
|
)
|
|
$
|
3,240
|
|
|
$
|
3,574
|
|
|
(9
|
)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
||||
|
Costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
298
|
|
|
$
|
298
|
|
|
—
|
|
$
|
603
|
|
|
$
|
1,287
|
|
|
(53
|
)
|
|
•
|
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 59. Other acquisitions added 8 manufacturing sites, and we have subsequently exited 11 sites, resulting in 56 sites supporting continuing operations as of June 30, 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, and exclude 24 Zoetis sites as the disposition of the remaining 80.2% interest in Zoetis common stock was completed on June 24, 2013. 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. Other areas of focus include rare diseases and biosimilars.
|
|
•
|
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. From 2009, when the workforce was approximately 130,000, through the end of 2012, we achieved a reduction of 38,500, and by the end of the second quarter of 2013, we achieved a reduction of 51,000. In the first six months of 2013, the workforce declined by 12,500, from 91,500 to 79,000, primarily due to the full disposition of our Animal Health business (Zoetis), which resulted in a workforce reduction of approximately 9,300. 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
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Restructuring charges
(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employee terminations
|
|
$
|
136
|
|
|
$
|
43
|
|
|
$
|
115
|
|
|
$
|
307
|
|
|
Asset impairments
|
|
12
|
|
|
28
|
|
|
115
|
|
|
246
|
|
||||
|
Exit costs
|
|
2
|
|
|
8
|
|
|
15
|
|
|
20
|
|
||||
|
Total restructuring charges
|
|
150
|
|
|
79
|
|
|
245
|
|
|
573
|
|
||||
|
Integration costs
(b)
|
|
33
|
|
|
105
|
|
|
69
|
|
|
200
|
|
||||
|
Restructuring charges and certain acquisition-related costs
|
|
183
|
|
|
184
|
|
|
314
|
|
|
773
|
|
||||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
58
|
|
|
54
|
|
|
91
|
|
|
130
|
|
||||
|
Selling, informational and administrative expenses
|
|
8
|
|
|
5
|
|
|
19
|
|
|
6
|
|
||||
|
Research and development expenses
|
|
3
|
|
|
—
|
|
|
94
|
|
|
259
|
|
||||
|
Total additional depreciation––asset restructuring
|
|
69
|
|
|
59
|
|
|
204
|
|
|
395
|
|
||||
|
Implementation costs recorded in our condensed consolidated statements of income as follows
(d)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
5
|
|
|
4
|
|
|
11
|
|
|
4
|
|
||||
|
Selling, informational and administrative expenses
|
|
34
|
|
|
14
|
|
|
65
|
|
|
30
|
|
||||
|
Research and development expenses
|
|
7
|
|
|
37
|
|
|
9
|
|
|
85
|
|
||||
|
Total implementation costs
|
|
46
|
|
|
55
|
|
|
85
|
|
|
119
|
|
||||
|
Total costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
298
|
|
|
$
|
298
|
|
|
$
|
603
|
|
|
$
|
1,287
|
|
|
(a)
|
From the beginning of our cost-reduction/productivity initiatives in
2005
through
June 30, 2013
,
Employee termination costs
represent the expected reduction of the workforce by approximately
63,300
employees, mainly in manufacturing and sales and research, of which approximately
56,000
employees have been terminated as of
June 30, 2013
. For the
six
months ended
June 30, 2013
, substantially all employee termination costs represents additional costs with respect to approximately
1,100
employees.
|
|
•
|
For the three months ended June 30, 2013, Primary Care operating segment (
$21 million
), Specialty Care and Oncology operating segment (
$13 million
), Established Products and Emerging Markets operating segment (
$19 million
), Consumer Healthcare operating segment (
$1 million
), research and development operations (
$12 million
), manufacturing operations (
$80 million
) and Corporate (
$4 million
).
|
|
•
|
For the six months ended June 30, 2013, Primary Care operating segment (
$17 million
), Specialty Care and Oncology operating segment (
$19 million
), Established Products and Emerging Markets operating segment (
$30 million
), Consumer Healthcare operating segment (
$1 million
), research and development operations (
$15 million
), manufacturing operations (
$82 million
) and Corporate (
$81 million
).
|
|
•
|
For the three months ended July 1, 2012, Primary Care operating segment (
$35 million
income), Specialty Care and Oncology operating segment (
$16 million
), Established Products and Emerging Markets operating segment (
$1 million
), Consumer Healthcare operating segment (
$9 million
), research and development operations (
$13 million
), manufacturing operations (
$15 million
) and Corporate (
$60 million
).
|
|
•
|
For the six months ended July 1, 2012, Primary Care operating segment (
$32 million
income), Specialty Care and Oncology operating segment (
$19 million
), Established Products and Emerging Markets operating segment (
$4 million
), Consumer Healthcare operating segment (
$13 million
), research and development operations (
$25 million
), manufacturing operations (
$166 million
) and Corporate (
$378 million
).
|
|
(b)
|
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.
|
|
(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
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2012
(a)
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
152
|
|
|
$
|
1,886
|
|
|
Provision
|
|
115
|
|
|
115
|
|
|
15
|
|
|
245
|
|
||||
|
Utilization and other
(b)
|
|
(529
|
)
|
|
(115
|
)
|
|
(53
|
)
|
|
(697
|
)
|
||||
|
Balance, June 30, 2013
(c)
|
|
$
|
1,320
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
1,434
|
|
|
(a)
|
Included in
Other current liabilities
($1.2 billion) and
Other noncurrent liabilities
($720 million).
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
(
$823 million
) and
Other noncurrent liabilities
(
$611 million
).
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
||||
|
Other (income)/deductions—net
|
|
$
|
(1,070
|
)
|
|
$
|
688
|
|
|
*
|
|
$
|
(925
|
)
|
|
$
|
2,327
|
|
|
*
|
|
•
|
patent litigation settlement income of $1.4 billion in the second quarter of 2013 (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions—Net
); and
|
|
•
|
lower net charges for other legal matters of approximately $485 million in the second quarter of 2013 compared to the same period in 2012 (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions—Net
).
|
|
•
|
patent litigation settlement income of $1.4 billion in the second quarter of 2013 (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions—Net
);
|
|
•
|
lower net charges for other legal matters of approximately $1.4 billion in the first six months of 2013 compared to the same period in 2012 (for additional information, see Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions—Net
); and
|
|
•
|
a gain of approximately $459 million 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
|
|
Six Months Ended
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
||||
|
Provision for taxes on income
|
|
$
|
1,782
|
|
|
$
|
1,180
|
|
|
51
|
|
$
|
2,891
|
|
|
$
|
1,805
|
|
|
60
|
|
Effective tax rate on continuing operations
|
|
33.3
|
%
|
|
28.2
|
%
|
|
|
|
31.8
|
%
|
|
28.4
|
%
|
|
|
||||
|
The following table provides the components of
Discontinued operations—net of tax,
virtually all of which relate to our former Animal Health (Zoetis) and Nutrition businesses:
|
||||||||||||||||
|
|
|
Three Months Ended
(a)
|
|
Six Months Ended
(a)
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Revenues
|
|
$
|
1,112
|
|
|
$
|
1,675
|
|
|
$
|
2,201
|
|
|
$
|
3,230
|
|
|
Pre-tax income from discontinued operations
|
|
$
|
189
|
|
|
$
|
422
|
|
|
$
|
389
|
|
|
$
|
796
|
|
|
Provision for taxes on income
(b)
|
|
48
|
|
|
162
|
|
|
99
|
|
|
287
|
|
||||
|
Income from discontinued operations––net of tax
|
|
141
|
|
|
260
|
|
|
290
|
|
|
509
|
|
||||
|
Pre-tax gain on disposal of discontinued operations
|
|
10,539
|
|
|
—
|
|
|
10,539
|
|
|
—
|
|
||||
|
Provision for taxes on income
(c)
|
|
121
|
|
|
—
|
|
|
121
|
|
|
—
|
|
||||
|
Gain on disposal of discontinued operations––net of tax
|
|
10,418
|
|
|
—
|
|
|
10,418
|
|
|
—
|
|
||||
|
Discontinued operations––net of tax
|
|
$
|
10,559
|
|
|
$
|
260
|
|
|
$
|
10,708
|
|
|
$
|
509
|
|
|
(a)
|
Includes the Animal Health (Zoetis) business for all periods presented and the Nutrition business for the three and six months ended July 1, 2012.
|
|
(b)
|
Includes a deferred tax benefit of $26 million and a deferred tax expense of $41 million for the three months ended June 30, 2013 and July 1, 2012, respectively, and a deferred tax benefit of $19 million and a deferred tax expense of $20 million for the six months ended June 30, 2013 and July 1, 2012, respectively. These deferred tax provisions include deferred taxes related to investments in certain foreign subsidiaries resulting from our intention not to hold these subsidiaries indefinitely.
|
|
(c)
|
Reflects income taxes resulting from certain legal entity reorganizations.
|
|
•
|
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
|
|
Six Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
||||
|
GAAP Reported net income attributable to Pfizer Inc.
|
|
$
|
14,095
|
|
|
$
|
3,253
|
|
|
*
|
|
|
$
|
16,845
|
|
|
$
|
5,047
|
|
|
*
|
|
|
Purchase accounting adjustments––net of tax
|
|
810
|
|
|
843
|
|
|
(4
|
)
|
|
1,695
|
|
|
1,896
|
|
|
(11
|
)
|
||||
|
Acquisition-related costs––net of tax
|
|
188
|
|
|
178
|
|
|
6
|
|
|
252
|
|
|
288
|
|
|
(13
|
)
|
||||
|
Discontinued operations––net of tax
|
|
(10,530
|
)
|
|
(260
|
)
|
|
*
|
|
|
(10,673
|
)
|
|
(509
|
)
|
|
*
|
|
||||
|
Certain significant items––net of tax
|
|
(560
|
)
|
|
435
|
|
|
*
|
|
|
(376
|
)
|
|
1,882
|
|
|
*
|
|
||||
|
Non-GAAP Adjusted income
(a)
|
|
$
|
4,003
|
|
|
$
|
4,449
|
|
|
(10
|
)
|
|
$
|
7,743
|
|
|
$
|
8,604
|
|
|
(10
|
)
|
|
(a)
|
The effective tax rate on Non-GAAP Adjusted income was 27.9% in the
second
quarter of
2013
, compared with 28.5% in the
second
quarter of
2012
. For the first six months of 2013, the effective tax rate on Non-GAAP Adjusted income was 27.4%, compared to 28.6% in the same period last year. The tax rates in the second quarter and first six months of
2013
compared to the same periods in
2012
were 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 six months 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
|
|
Six Months Ended
|
||||||||||||||||||
|
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
||||
|
Earnings per common share––diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP Reported income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
25
|
|
|
$
|
0.86
|
|
|
$
|
0.60
|
|
|
43
|
|
|
Income from discontinued operations––net of tax
|
|
1.48
|
|
|
0.03
|
|
|
*
|
|
|
1.49
|
|
|
0.07
|
|
|
*
|
|
||||
|
GAAP Reported net income attributable to Pfizer Inc. common shareholders
|
|
1.98
|
|
|
0.43
|
|
|
*
|
|
|
2.34
|
|
|
0.67
|
|
|
*
|
|
||||
|
Purchase accounting adjustments––net of tax
|
|
0.11
|
|
|
0.11
|
|
|
—
|
|
|
0.24
|
|
|
0.25
|
|
|
(4
|
)
|
||||
|
Acquisition-related costs––net of tax
|
|
0.03
|
|
|
0.02
|
|
|
50
|
|
|
0.04
|
|
|
0.04
|
|
|
—
|
|
||||
|
Discontinued operations––net of tax
|
|
(1.48
|
)
|
|
(0.03
|
)
|
|
*
|
|
|
(1.49
|
)
|
|
(0.07
|
)
|
|
*
|
|
||||
|
Certain significant items––net of tax
|
|
(0.08
|
)
|
|
0.06
|
|
|
*
|
|
|
(0.05
|
)
|
|
0.25
|
|
|
*
|
|
||||
|
Non-GAAP Adjusted income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.56
|
|
|
$
|
0.59
|
|
|
(5
|
)
|
|
$
|
1.08
|
|
|
$
|
1.14
|
|
|
(5
|
)
|
|
Adjusted income, as shown above, excludes the following items:
|
|
|
||||||||||||||
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
||||
|
Purchase accounting adjustments
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization, depreciation and other
(a)
|
|
$
|
1,123
|
|
|
$
|
1,151
|
|
|
$
|
2,347
|
|
|
$
|
2,577
|
|
|
Cost of sales, primarily related to fair value adjustments of acquired inventory
|
|
(15
|
)
|
|
2
|
|
|
(20
|
)
|
|
9
|
|
||||
|
Total purchase accounting adjustments––pre-tax
|
|
1,108
|
|
|
1,153
|
|
|
2,327
|
|
|
2,586
|
|
||||
|
Income taxes
(b)
|
|
(298
|
)
|
|
(310
|
)
|
|
(632
|
)
|
|
(690
|
)
|
||||
|
Total purchase accounting adjustments––net of tax
|
|
810
|
|
|
843
|
|
|
1,695
|
|
|
1,896
|
|
||||
|
Acquisition-related costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Integration costs
(c)
|
|
33
|
|
|
105
|
|
|
69
|
|
|
200
|
|
||||
|
Restructuring charges
(c)
|
|
24
|
|
|
65
|
|
|
43
|
|
|
61
|
|
||||
|
Additional depreciation––asset restructuring
(d)
|
|
56
|
|
|
58
|
|
|
91
|
|
|
140
|
|
||||
|
Total acquisition-related costs––pre-tax
|
|
113
|
|
|
228
|
|
|
203
|
|
|
401
|
|
||||
|
Income taxes
(e)
|
|
75
|
|
|
(50
|
)
|
|
49
|
|
|
(113
|
)
|
||||
|
Total acquisition-related costs––net of tax
|
|
188
|
|
|
178
|
|
|
252
|
|
|
288
|
|
||||
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Discontinued operations––net of tax
(f)
|
|
(10,559
|
)
|
|
(260
|
)
|
|
(10,708
|
)
|
|
(509
|
)
|
||||
|
Discontinued operations––net of tax, attributable to noncontrolling interests
|
|
29
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
|
Total discontinued operations––net of tax, attributable to Pfizer Inc.
|
|
(10,530
|
)
|
|
(260
|
)
|
|
(10,673
|
)
|
|
(509
|
)
|
||||
|
Certain significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Restructuring charges
(g)
|
|
126
|
|
|
14
|
|
|
202
|
|
|
512
|
|
||||
|
Implementation costs and additional depreciation––asset restructuring
(h)
|
|
59
|
|
|
56
|
|
|
198
|
|
|
374
|
|
||||
|
Patent litigation settlement income
(i)
|
|
(1,351
|
)
|
|
—
|
|
|
(1,351
|
)
|
|
—
|
|
||||
|
Other legal matters, net
(j)
|
|
(13
|
)
|
|
483
|
|
|
(100
|
)
|
|
1,258
|
|
||||
|
Gain associated with the transfer of certain product rights to an equity-method investment
(j)
|
|
31
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
||||
|
Certain asset impairment charges
(j)
|
|
95
|
|
|
77
|
|
|
489
|
|
|
489
|
|
||||
|
Costs associated with the Zoetis IPO
(k)
|
|
—
|
|
|
29
|
|
|
18
|
|
|
61
|
|
||||
|
Other
|
|
41
|
|
|
13
|
|
|
79
|
|
|
38
|
|
||||
|
Total certain significant items––pre-tax
|
|
(1,012
|
)
|
|
672
|
|
|
(924
|
)
|
|
2,732
|
|
||||
|
Income taxes
(l)
|
|
452
|
|
|
(237
|
)
|
|
548
|
|
|
(850
|
)
|
||||
|
Total certain significant items––net of tax
|
|
(560
|
)
|
|
435
|
|
|
(376
|
)
|
|
1,882
|
|
||||
|
Total purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items––net of tax, attributable to Pfizer Inc.
|
|
$
|
(10,092
|
)
|
|
$
|
1,196
|
|
|
$
|
(9,102
|
)
|
|
$
|
3,557
|
|
|
(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—
Note 5A. Tax Matters: Taxes on Income from Continuing Operations
).
|
|
(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 (see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(e)
|
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. In the second quarter and first six months of 2013, also includes the unfavorable impact of the remeasurement of certain deferred tax liabilities resulting from plant network activities.
|
|
(f)
|
Included in
Discontinued operations––net of tax
and relates to Zoetis, our former Animal Health business, in all periods presented, and, to a lesser extent, to our former Nutrition business, in 2012 only (see Notes to Condensed Consolidated Financial Statements—
Note2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures.
|
|
(g)
|
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
).
|
|
(h)
|
Amounts primarily relate to our cost-reduction/productivity initiatives (see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(i)
|
Reflects income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries, Limited for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the United States. Included in
Other (income)/deductions
—
net
(see the "Other (Income)/Deductions—Net" section of this MD&A and Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions
—
Net
)
.
|
|
(j)
|
Primarily included in
Other (income)/deductions
—
net
(see the "Other (Income)/Deductions—Net" section of this MD&A and Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions
—
Net
)
.
|
|
(k)
|
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. Primarily included in
Other (income)deductions
—
net
(see the "Other (Income)/Deductions—Net" section of this MD&A and Notes to Condensed Consolidated Financial Statements—
Note 4. Other (Income)/Deductions
—
Net
)
.
|
|
(l)
|
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. The second quarter and first six months of 2013 were unfavorably impacted by the tax rate associated with the patent litigation settlement income. The first six months of 2013 was unfavorably impacted by the non-deductibility of goodwill derecognized and the jurisdictional mix of the other intangible assets divested as part of the transfer of certain product rights to Pfizer's 49%-owned equity-method investment in China (see Notes to Condensed Consolidated Financial Statements—
Note 5A. Tax Matters: Taxes on Income from Continuing Operations
).
|
|
|
|
Six Months Ended
|
|
|
|||||||
|
(MILLIONS OF DOLLARS)
|
|
June 30,
2013 |
|
|
July 1,
2012 |
|
|
%
Change |
|
||
|
Cash provided by/(used in):
|
|
|
|
|
|
|
|||||
|
Operating activities
|
|
$
|
6,071
|
|
|
$
|
6,795
|
|
|
(11
|
)
|
|
Investing activities
|
|
(10,094
|
)
|
|
(436
|
)
|
|
*
|
|
||
|
Financing activities
|
|
(3,600
|
)
|
|
(6,475
|
)
|
|
(44
|
)
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
(22
|
)
|
|
(35
|
)
|
|
(37
|
)
|
||
|
Net decrease in
Cash and cash equivalents
|
|
$
|
(7,645
|
)
|
|
$
|
(151
|
)
|
|
*
|
|
|
*
|
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 $9.6 billion in the first six months of 2013, compared to net proceeds from redemptions and sales of investments of $950 million in the first six months of 2012,
|
|
•
|
cash paid of $782 million, net of cash acquired, for our acquisitions of Alacer and Ferrosan in the first six months of 2012.
|
|
•
|
net proceeds from borrowings of $6.5 billion in the first six months of 2013, compared to net repayments of borrowings of $391 million in the first six months of 2012; and
|
|
•
|
increased proceeds from the exercise of stock options,
|
|
•
|
purchases of common stock of $7.9 billion in the first six months of 2013, compared to $3.0 billion in the first six months of 2012; and
|
|
•
|
higher cash dividends paid.
|
|
•
|
sold our Animal Health business (Zoetis) for Pfizer common stock valued at $11.4 billion;
|
|
•
|
exchanged Zoetis common stock for the retirement of Pfizer commercial paper issued in 2013 for $2.5 billion;
|
|
•
|
exchanged Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012 for $1.0 billion; and
|
|
•
|
transferred certain product rights, valued at $1.2 billion, to an equity-method investment.
|
|
•
|
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)
|
|
June 30,
2013 |
|
|
December 31,
2012 |
|
||
|
Selected financial assets:
|
|
|
|
|
||||
|
Cash and cash equivalents
(a)
|
|
$
|
2,436
|
|
|
$
|
10,081
|
|
|
Short-term investments
(a)
|
|
31,275
|
|
|
22,318
|
|
||
|
Long-term investments
(a)
|
|
16,107
|
|
|
14,149
|
|
||
|
|
|
49,818
|
|
|
46,548
|
|
||
|
Debt:
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
5,214
|
|
|
6,424
|
|
||
|
Long-term debt
|
|
31,532
|
|
|
31,036
|
|
||
|
|
|
36,746
|
|
|
37,460
|
|
||
|
Net financial assets
(b)
|
|
$
|
13,072
|
|
|
$
|
9,088
|
|
|
|
|
|
|
|
||||
|
Working capital
(c)
|
|
$
|
37,985
|
|
|
$
|
35,645
|
|
|
Ratio of current assets to current liabilities
|
|
2.62
|
:1
|
|
2.22
|
:1
|
||
|
Total Pfizer Inc. shareholders' equity per common share
(d)
|
|
$
|
11.80
|
|
|
$
|
11.17
|
|
|
(a)
|
See Notes to Condensed Consolidated Financial Statements––
Note 7. Financial Instruments
for a description of certain assets held and for a description of credit risk related to our financial instruments held.
|
|
(b)
|
Net financial assets increased as net cash provided by operating activities, the net impact of the Zoetis transactions and the proceeds from the exercise of stock options, among other things, more than offset share purchases and dividend payments. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows
”
section of this MD&A.
|
|
(c)
|
Working capital includes net assets held for sale of $79 million as of June 30, 2013 and $4.5 billion (Zoetis) as of December 31, 2012.
|
|
(d)
|
Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares).
|
|
The following table provides the current ratings assigned by these rating agencies to our commercial paper and senior unsecured non-credit-enhanced long-term debt:
|
|||||
|
Name of Rating Agency
|
Commercial Paper
|
|
Long-Term Debt
|
Date of Last Action
|
|
|
Rating
|
|
Rating
|
Outlook
|
||
|
Moody’s
|
P-1
|
|
A1
|
Stable
|
May 2013
|
|
S&P
|
A1+
|
|
AA
|
Stable
|
May 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 inability of the U.S. federal government to satisfy its financial obligations, including under Medicare, Medicaid and other publicly funded or subsidized health programs, that may result from the possible failure of the U.S. federal government to suspend enforcement of or to increase the federal debt ceiling;
|
|
•
|
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; and
|
|
•
|
the impact of acquisitions, divestitures, restructurings, internal reorganizations, 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, and of our plan to internally separate our commercial operations into three, new, global business segments effective January 1, 2014.
|
|
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)
|
|
||
|
April 1, 2013, through April 28, 2013
|
54,095,175
|
|
$
|
29.79
|
|
54,066,740
|
|
$
|
5,569,491,590
|
|
|
April 29, 2013, through May 26, 2013
|
56,450,468
|
|
$
|
29.30
|
|
56,403,900
|
|
$
|
3,917,083,120
|
|
|
May 27, 2013, through June 30, 2013
|
405,531,011
|
|
$
|
28.16
|
|
—
|
|
$
|
13,917,083,120
|
|
|
Total
|
516,076,654
|
|
$
|
28.46
|
|
110,470,640
|
|
|
||
|
(a)
|
On November 1, 2012, we announced that the Board of Directors had authorized a $10 billion share-purchase plan, which became effective on November 30, 2012 (the November 2012 Stock Purchase Plan). On June 27, 2013, we announced that the Board of Directors had authorized an additional $10 billion share-purchase plan.
|
|
(b)
|
In addition to amounts purchased under the November 2012 Stock Purchase Plan, these columns reflect the following transactions during the
second
fiscal quarter of
2013
: (i) the surrender to Pfizer of 422,021 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 64,373 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; (iii) the surrender to Pfizer of 2,425 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; and (iv) the acquisition of 405,117,195 shares of common stock pursuant to the Zoetis exchange offer on June 24, 2013.
|
|
|
1) Exhibit 4.1
|
|
Third Supplemental Indenture, dated as of June 3, 2013, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as Trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our 8-K report filed on June 3, 2013 (File No. 001-03619).
|
|
|
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:
|
August 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 |
|---|