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DELAWARE
(State of Incorporation)
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13-5315170
(I.R.S. Employer Identification No.)
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| Large Accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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(millions, except per common share data)
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Oct. 3,
2010
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Sept. 27,
2009
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Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
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||||||||||||||||
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Revenues
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$ | 16,171 | $ | 11,621 | $ | 50,248 | $ | 33,472 | ||||||||
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Costs and expenses:
|
||||||||||||||||
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Cost of sales(a)
|
3,896 | 1,789 | 11,997 | 4,953 | ||||||||||||
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Selling, informational and administrative expenses(a)
|
4,633 | 3,282 | 13,876 | 9,508 | ||||||||||||
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Research and development expenses(a)
|
2,194 | 1,632 | 6,607 | 5,032 | ||||||||||||
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Amortization of intangible assets
|
1,156 | 594 | 3,972 | 1,755 | ||||||||||||
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Acquisition-related in-process research and development
charges
|
–– | –– | 74 | 20 | ||||||||||||
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Restructuring charges and certain acquisition-related costs
|
499 | 193 | 2,091 | 1,206 | ||||||||||||
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Other deductions––net
|
2,353 | 160 | 3,038 | 175 | ||||||||||||
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Income from continuing operations before provision for taxes on
income
|
1,440 | 3,971 | 8,593 | 10,823 | ||||||||||||
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Provision for taxes on income
|
564 | 1,092 | 3,198 | 2,952 | ||||||||||||
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Income from continuing operations
|
876 | 2,879 | 5,395 | 7,871 | ||||||||||||
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Discontinued operations––net of tax
|
(5 | ) | 2 | (4 | ) | 6 | ||||||||||
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Net income before allocation to noncontrolling interests
|
871 | 2,881 | 5,391 | 7,877 | ||||||||||||
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Less: Net income attributable to noncontrolling interests
|
5 | 3 | 24 | 9 | ||||||||||||
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Net income attributable to Pfizer Inc.
|
$ | 866 | $ | 2,878 | $ | 5,367 | $ | 7,868 | ||||||||
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Earnings per share––basic:
|
||||||||||||||||
|
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
$ | 0.11 | $ | 0.43 | $ | 0.67 | $ | 1.17 | ||||||||
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Discontinued operations––net of tax
|
–– | –– | –– | — | ||||||||||||
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Net income attributable to Pfizer Inc. common shareholders
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$ | 0.11 | $ | 0.43 | $ | 0.67 | $ | 1.17 | ||||||||
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Earnings per share––diluted:
|
||||||||||||||||
|
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
$ | 0.11 | $ | 0.43 | $ | 0.66 | $ | 1.16 | ||||||||
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Discontinued operations––net of tax
|
–– | –– | –– | — | ||||||||||||
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Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.11 | $ | 0.43 | $ | 0.66 | $ | 1.16 | ||||||||
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Weighted-average shares used to calculate earnings per common
share:
|
||||||||||||||||
|
Basic
|
8,027 | 6,730 | 8,045 | 6,727 | ||||||||||||
|
Diluted
|
8,057 | 6,762 | 8,079 | 6,758 | ||||||||||||
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Cash dividends paid per common share
|
$ | 0.18 | $ | 0.16 | $ | 0.54 | $ | 0.64 | ||||||||
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(a)
|
Includes amortization of certain intangible assets, as disclosed in Note 10B. Goodwill and Other Intangible Assets: Other Intangible Assets.
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|
(millions of dollars)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
(Unaudited)
|
||||||||
|
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 2,176 | $ | 1,978 | ||||
|
Short-term investments
|
20,288 | 23,991 | ||||||
|
Accounts receivable, less allowance for doubtful accounts
|
14,302 | 14,645 | ||||||
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Short-term loans
|
774 | 1,195 | ||||||
|
Inventories
|
8,771 | 12,403 | ||||||
|
Current deferred tax assets and other current assets
|
7,284 | 6,962 | ||||||
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Assets held for sale
|
494 | 496 | ||||||
|
Total current assets
|
54,089 | 61,670 | ||||||
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Long-term investments and loans
|
10,344 | 13,122 | ||||||
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Property, plant and equipment, less accumulated depreciation
|
19,450 | 22,780 | ||||||
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Goodwill
|
43,787 | 42,376 | ||||||
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Identifiable intangible assets, less accumulated amortization
|
58,627 | 68,015 | ||||||
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Noncurrent deferred tax assets and other noncurrent assets
|
5,118 | 4,986 | ||||||
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Total assets
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$ | 191,415 | $ | 212,949 | ||||
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Liabilities and Shareholders’ Equity
|
||||||||
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Short-term borrowings, including current portion of long-term debt
|
$ | 5,158 | $ | 5,469 | ||||
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Accounts payable
|
3,206 | 4,370 | ||||||
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Dividends payable
|
1 | 1,454 | ||||||
|
Income taxes payable
|
1,620 | 10,107 | ||||||
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Accrued compensation and related items
|
1,853 | 2,242 | ||||||
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Current deferred tax liabilities and other current liabilities
|
12,334 | 13,583 | ||||||
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Total current liabilities
|
24,172 | 37,225 | ||||||
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Long-term debt
|
39,010 | 43,193 | ||||||
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Pension benefit obligations
|
5,196 | 6,392 | ||||||
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Postretirement benefit obligations
|
3,258 | 3,243 | ||||||
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Noncurrent deferred tax liabilities
|
16,940 | 17,839 | ||||||
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Other taxes payable
|
8,578 | 9,000 | ||||||
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Other noncurrent liabilities
|
6,193 | 5,611 | ||||||
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Total liabilities
|
103,347 | 122,503 | ||||||
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Preferred stock
|
54 | 61 | ||||||
|
Common stock
|
443 | 443 | ||||||
|
Additional paid-in capital
|
70,678 | 70,497 | ||||||
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Employee benefit trusts
|
(8 | ) | (333 | ) | ||||
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Treasury stock
|
(22,707 | ) | (21,632 | ) | ||||
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Retained earnings
|
42,873 | 40,426 | ||||||
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Accumulated other comprehensive (loss)/income
|
(3,698 | ) | 552 | |||||
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Total Pfizer Inc. shareholders’ equity
|
87,635 | 90,014 | ||||||
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Equity attributable to noncontrolling interests
|
433 | 432 | ||||||
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Total shareholders’ equity
|
88,068 | 90,446 | ||||||
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Total liabilities and shareholders’ equity
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$ | 191,415 | $ | 212,949 | ||||
| Nine Months Ended | ||||||||
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(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||
|
Operating Activities:
|
||||||||
|
Net income before allocation to noncontrolling interests
|
$ | 5,391 | $ | 7,877 | ||||
|
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash (used in)/provided by operating activities:
|
||||||||
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Depreciation and amortization
|
6,493 | 2,983 | ||||||
|
Share-based compensation expense
|
351 | 258 | ||||||
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Asset write-offs and impairment charges
|
2,956 | 293 | ||||||
|
Benefit plan contributions (in excess of)/less than expense
|
(706 | ) | 318 | |||||
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Deferred taxes from continuing operations
|
1,277 | 1,121 | ||||||
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Other non-cash adjustments
|
(61 | ) | (248 | ) | ||||
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Changes in assets and liabilities, net of acquisitions and divestitures
|
(10,505 | ) | (840 | ) | ||||
|
Net cash provided by operating activities
|
5,196 | 11,762 | ||||||
|
Investing Activities:
|
||||||||
|
Purchases of property, plant and equipment
|
(966 | ) | (783 | ) | ||||
|
Purchases of short-term investments
|
(5,018 | ) | (57,148 | ) | ||||
|
Proceeds from redemptions and sales of short-term investments
|
9,493 | 31,747 | ||||||
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Purchases of long-term investments
|
(2,674 | ) | (6,053 | ) | ||||
|
Proceeds from redemptions and sales of long-term investments
|
3,822 | 4,824 | ||||||
|
Other investing activities
|
496 | 508 | ||||||
|
Net cash provided by/(used in) investing activities
|
5,153 | (26,905 | ) | |||||
|
Financing Activities:
|
||||||||
|
Increase in short-term borrowings
|
4,686 | 28,473 | ||||||
|
Principal payments on short-term borrowings
|
(9,265 | ) | (29,976 | ) | ||||
|
Proceeds from issuances of long-term debt
|
–– | 23,997 | ||||||
|
Principal payments on long-term debt
|
(4 | ) | (910 | ) | ||||
|
Purchases of common stock
|
(1,000 | ) | –– | |||||
|
Cash dividends paid
|
(4,544 | ) | (4,268 | ) | ||||
|
Other financing activities
|
32 | (101 | ) | |||||
|
Net cash (used in)/provided by financing activities
|
(10,095 | ) | 17,215 | |||||
|
Effect of exchange-rate changes on cash and cash equivalents
|
(56 | ) | 40 | |||||
|
Net increase in cash and cash equivalents
|
198 | 2,112 | ||||||
|
Cash and cash equivalents at beginning of period
|
1,978 | 2,122 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 2,176 | $ | 4,234 | ||||
|
Supplemental Cash Flow Information:
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Income taxes
|
$ | 11,519 | $ | 1,748 | ||||
|
Interest
|
2,039 | 723 | ||||||
|
●
|
An amendment to the recognition and measurement guidance for the transfers of financial assets.
|
|
●
|
An amendment to the guidelines for determining the primary beneficiary in a variable interest entity.
|
|
(millions of dollars)
|
Amounts Recognized
as of Acquisition Date
(provisional)(a)
|
Measurement
Period
Adjustments
|
Amounts Recognized
as of Acquisition Date
(final)
|
|||||||||
|
Working capital, excluding inventories
|
$ | 16,342 | $ | 37 | $ | 16,379 | ||||||
|
Inventories(b)
|
8,388 | (417 | ) | 7,971 | ||||||||
|
Property, plant and equipment
|
10,054 | (216 | ) | 9,838 | ||||||||
|
Identifiable intangible assets, excluding
in-process research and development(b)
|
37,595 | (1,533 | ) | 36,062 | ||||||||
|
In-process research and development(b)
|
14,918 | (1,096 | ) | 13,822 | ||||||||
|
Other noncurrent assets
|
2,394 | –– | 2,394 | |||||||||
|
Long-term debt
|
(11,187 | ) | –– | (11,187 | ) | |||||||
|
Benefit obligations
|
(3,211 | ) | 36 | (3,175 | ) | |||||||
|
Net tax accounts(c)
|
(24,773 | ) | 1,058 | (23,715 | ) | |||||||
|
Other noncurrent liabilities
|
(1,908 | ) | –– | (1,908 | ) | |||||||
|
Total identifiable net assets
|
48,612 | (2,131 | ) | 46,481 | ||||||||
|
Goodwill(d)
|
19,954 | 2,127 | 22,081 | |||||||||
|
Net assets acquired
|
68,566 | (4 | ) | 68,562 | ||||||||
|
Less: Amounts attributable to
noncontrolling interests
|
(330 | ) | 4 | (326 | ) | |||||||
|
Total consideration transferred
|
$ | 68,236 | $ | –– | $ | 68,236 | ||||||
|
(a)
|
As previously reported in Pfizer’s 2009 Annual Report on Form 10-K.
|
|
(b)
|
These measurement period adjustments were recorded to reflect changes in the estimated fair value of certain intangible assets and inventories. These adjustments were made largely to better reflect market participant assumptions about facts and circumstances existing as of the acquisition date. The measurement period adjustments did not result from intervening events subsequent to the acquisition date.
|
|
(c)
|
These measurement period adjustments primarily reflect the tax impact of the pre-tax measurement period adjustments. The measurement period adjustments did not result from intervening events subsequent to the acquisition date.
|
|
(d)
|
Goodwill recognized as of the acquisition date totaled $19,172 million for our Biopharmaceutical segment and $2,909 million for our Diversified segment.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Transaction costs(a)
|
$ | –– | $ | 19 | $ | 13 | $ | 572 | ||||||||
|
Integration costs(b)
|
231 | 113 | 650 | 242 | ||||||||||||
|
Restructuring charges(c):
|
||||||||||||||||
|
Employee termination costs
|
27 | 36 | 603 | 200 | ||||||||||||
|
Asset impairments
|
174 | 17 | 677 | 108 | ||||||||||||
|
Other
|
67 | 8 | 148 | 84 | ||||||||||||
|
Restructuring charges and certain acquisition-related costs
|
499 | 193 | 2,091 | 1,206 | ||||||||||||
|
Additional depreciation––asset restructuring, recorded in our Condensed
Consolidated Statements of Income as follows(d):
|
||||||||||||||||
|
Cost of sales
|
241 | 7 | 367 | 102 | ||||||||||||
|
Selling, informational and administrative expenses
|
28 | 3 | 190 | 17 | ||||||||||||
|
Research and development expenses
|
26 | –– | 46 | 42 | ||||||||||||
|
Total additional depreciation––asset restructuring
|
295 | 10 | 603 | 161 | ||||||||||||
|
Implementation costs(e)
|
–– | 70 | –– | 249 | ||||||||||||
|
Total
|
$ | 794 | $ | 273 | $ | 2,694 | $ | 1,616 | ||||||||
|
(a)
|
Transaction costs represent external costs directly related to our acquisition of Wyeth and primarily include expenditures for banking, legal, accounting and other similar services. Substantially all of the costs incurred in 2009 were fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial institutions on March 12, 2009 to partially fund our acquisition of Wyeth. The bridge term loan credit agreement was terminated in June 2009 as a result of our issuance of approximately $24.0 billion of senior unsecured notes in the first half of 2009.
|
|
(b)
|
Integration costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems integration.
|
|
(c)
|
Restructuring charges in 2010 are related to the integration of Wyeth. From the beginning of our cost-reduction initiatives in 2005 through October 3, 2010, Employee termination costs represent the expected reduction of the workforce by approximately 46,600 employees, mainly in manufacturing, sales and research, of which approximately 33,400 employees have been terminated as of October 3, 2010. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination. Asset impairments primarily include charges to write down property, plant and equipment to fair value. Other primarily includes costs to exit certain assets and activities.
|
|
(d)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(e)
|
Implementation costs in the three months and nine months ended September 27, 2009 represent external, incremental costs directly related to implementing cost-reduction initiatives prior to our acquisition of Wyeth, and primarily include expenditures related to system and process standardization and the expansion of shared services. For the three months ended September 27, 2009, implementation costs are included in Cost of sales ($16 million), Selling, informational and administrative expenses ($48 million), Research and development expenses ($5 million) and Other deductions––net ($1 million). For the nine months ended September 27, 2009, implementation costs are included in Cost of sales ($42 million), Selling, informational and administrative expenses ($165 million), Research and development expenses ($36 million) and Other deductions––net ($6 million).
|
|
(millions of dollars)
|
Costs
Incurred
2005-2010
|
Activity through
Oct. 3, 2010(a)
|
Accrual as of
Oct. 3, 2010(b)
|
|||||||||
|
Employee termination costs
|
$ | 8,324 | $ | 6,387 | $ | 1,937 | ||||||
|
Asset impairments
|
2,129 | 2,129 | –– | |||||||||
|
Other
|
858 | 754 | 104 | |||||||||
|
Total restructuring charges
|
$ | 11,311 | $ | 9,270 | $ | 2,041 | ||||||
|
(a)
|
Includes adjustments for foreign currency translation.
|
|
(b)
|
Included in Current deferred tax liabilities and other current liabilities ($1.6 billion) and Other noncurrent liabilities ($482 million).
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3, 2010
|
Sept. 27, 2009
|
Oct. 3, 2010
|
Sept. 27, 2009
|
||||||||||||
|
Interest income(a)
|
$ | (100 | ) | $ | (171 | ) | $ | (297 | ) | $ | (620 | ) | ||||
|
Interest expense(a)
|
428 | 369 | 1,339 | 769 | ||||||||||||
|
Net interest expense
|
328 | 198 | 1,042 | 149 | ||||||||||||
|
Royalty-related income
|
(158 | ) | (35 | ) | (395 | ) | (142 | ) | ||||||||
|
Net gain on asset disposals
|
(13 | ) | (40 | ) | (243 | ) | (81 | ) | ||||||||
|
Legal matters, net(b)
|
712 | 54 | 886 | 130 | ||||||||||||
|
Certain asset impairment charges(c)
|
1,478 | 6 | 1,710 | 96 | ||||||||||||
|
Other, net
|
6 | (23 | ) | 38 | 23 | |||||||||||
|
Other deductions––net
|
$ | 2,353 | $ | 160 | $ | 3,038 | $ | 175 | ||||||||
|
(a)
|
Interest expense increased in 2010 due to our issuance of $13.5 billion of senior unsecured notes on March 24, 2009 and approximately $10.5 billion of senior unsecured notes on June 3, 2009, primarily related to the acquisition of Wyeth as well as the addition of legacy Wyeth debt. Interest income decreased in 2010 due to lower interest rates coupled with lower average investment balances.
|
|
(b)
|
Legal matters, net in the three-month and nine-month periods ended October 3, 2010 includes an additional $701 million charge for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc.
|
|
(c)
|
The asset impairment charges in the three-month and nine-month periods ended October 3, 2010 are primarily related to intangible assets acquired as part of our acquisition of Wyeth, including IPR&D assets, Brands and, to a lesser extent, Developed Technology Rights. See also Note 3. Acquisition of Wyeth and Note 10B. Goodwill and Other Intangible Assets: Other Intangible Assets. The impairment charges result from our current estimate of the fair value of these assets, based upon updated forecasts, compared with their assigned fair values as of the Wyeth acquisition date, October 15, 2009. The fair value of acquired identifiable intangible assets generally is determined using an income approach that starts with a forecast of all of the expected future net cash flows associated with the asset which are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Our updated forecasts of net cash flows for the impaired assets, reflect, among other things the following: for IPR&D assets, the impact of changes to the development programs, the projected development and regulatory timeframes and the risk associated with these assets; for Brand assets, the current competitive environment and planned investment support; and, for Developed Technology Rights, an increased competitive environment. Of these amounts, in the third quarter of 2010, about $900 million related to our Biopharmaceutical segment and $600 million related to our Diversified segment. The nine-month period of 2010 also included another $200 million in impairments related to our Biopharmaceutical segment.
|
|
●
|
higher expenses incurred as a result of our acquisition of Wyeth, and the mix of jurisdictions in which those expenses were incurred;
|
|
●
|
the expiration of the U.S. research and development tax credit; and
|
|
●
|
the non-recurrence of a tax benefit of $174 million that was recorded in the third quarter of 2009 related to the final resolution of a previously disclosed settlement which resulted in the receipt of information that raised our assessment of the likelihood of prevailing on the technical merits of our tax position;
|
|
●
|
the tax benefit associated with the charge incurred for asbestos litigation discussed in Note 5. Other (Income)Deductions––Net.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Net income before allocation to noncontrolling interests
|
$ | 871 | $ | 2,881 | $ | 5,391 | $ | 7,877 | ||||||||
|
Other comprehensive income/(loss):
|
||||||||||||||||
|
Currency translation adjustment and other
|
786 | 599 | (4,105 | ) | 2,853 | |||||||||||
|
Net unrealized losses on derivative financial instruments
|
(59 | ) | (43 | ) | (300 | ) | (210 | ) | ||||||||
|
Net unrealized gains/(losses) on available-for-sale securities
|
26 | 86 | (86 | ) | 312 | |||||||||||
|
Benefit plan adjustments
|
(45 | ) | (459 | ) | 239 | (282 | ) | |||||||||
|
Total other comprehensive income/(loss)
|
708 | 183 | (4,252 | ) | 2,673 | |||||||||||
|
Total comprehensive income before allocation to
noncontrolling interests
|
1,579 | 3,064 | 1,139 | 10,550 | ||||||||||||
|
Less: Comprehensive income/(loss) attributable to
noncontrolling interests
|
5 | (3 | ) | 23 | 11 | |||||||||||
|
Comprehensive income attributable to Pfizer Inc.
|
$ | 1,574 | $ | 3,067 | $ | 1,116 | $ | 10,539 | ||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
Selected financial assets measured at fair value on a recurring basis(a) :
|
||||||||
|
Trading securities(b)
|
$ | 169 | $ | 184 | ||||
|
Available-for-sale debt securities(c)
|
27,558 | 32,338 | ||||||
|
Available-for-sale money market funds(d)
|
862 | 2,569 | ||||||
|
Available-for-sale equity securities, excluding money market funds(c)
|
211 | 281 | ||||||
|
Derivative financial instruments in receivable positions(e):
|
||||||||
|
Interest rate swaps
|
740 | 276 | ||||||
|
Foreign currency forward-exchange contracts
|
263 | 502 | ||||||
|
Foreign currency swaps
|
226 | 798 | ||||||
|
Total
|
30,029 | 36,948 | ||||||
|
Other selected financial assets(f):
|
||||||||
|
Short-term loans, carried at cost(g)
|
774 | 1,195 | ||||||
|
Held-to-maturity debt securities, carried at amortized cost(c)
|
1,797 | 812 | ||||||
|
Private equity securities, carried at cost or equity method(h)
|
881 | 811 | ||||||
|
Long-term loans, carried at cost(g)
|
680 | 784 | ||||||
|
Total
|
4,132 | 3,602 | ||||||
|
Total selected financial assets(i)
|
$ | 34,161 | $ | 40,550 | ||||
|
Financial liabilities measured at fair value on a recurring basis(a):
|
||||||||
|
Derivative financial instruments in a liability position(j):
|
||||||||
|
Foreign currency forward-exchange contracts
|
$ | 737 | $ | 237 | ||||
|
Foreign currency swaps
|
684 | 528 | ||||||
|
Interest rate swaps
|
5 | 25 | ||||||
|
Total
|
1,426 | 790 | ||||||
|
Other financial liabilities(k):
|
||||||||
|
Short-term borrowings, carried at historical proceeds, as adjusted(f), (l)
|
5,158 | 5,469 | ||||||
|
Long-term debt, carried at historical proceeds, as adjusted(m), (n)
|
39,010 | 43,193 | ||||||
|
Total
|
44,168 | 48,662 | ||||||
|
Total selected financial liabilities
|
$ | 45,594 | $ | 49,452 | ||||
|
(a)
|
Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. 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 that included in available-for-sale equity securities, excluding money market funds, are $100 million as of October 3, 2010, and $77 million as of December 31, 2009 of investments that use Level 1 inputs in the calculation of fair value. None of our financial assets and liabilities measured at fair value on a recurring basis are valued using Level 3 inputs as of October 3, 2010 or December 31, 2009.
|
|
(b)
|
Trading securities are held in trust for legacy business acquisition severance benefits.
|
|
(c)
|
Gross unrealized gains and losses are not significant.
|
|
(d)
|
Includes approximately $625 million of money market funds held in escrow to secure certain of Wyeth’s payment obligations under its 1999 Nationwide Class Action Settlement Agreement, which relates to litigation against Wyeth concerning its former weight-loss products, Redux and Pondimin (see Note 8G. Financial Instruments: Guarantee).
|
|
(e)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $118 million and foreign currency swaps with fair values of $51 million as of October 3, 2010; and foreign currency swaps with fair values of $106 million and foreign currency forward-exchange contracts with fair values of $100 million as of December 31, 2009.
|
|
(f)
|
The differences between the estimated fair values and carrying values of our financial assets and short-term liabilities not measured at fair value on a recurring basis were not significant as of October 3, 2010 or December 31, 2009.
|
|
(g)
|
Our short-term and long-term loans are due from companies with highly rated securities (Standard & Poor’s (S&P) ratings of mostly AA or better).
|
|
(h)
|
Our private equity securities represent investments in the life sciences sector.
|
|
(i)
|
The decrease in selected financial assets is primarily due to the use of proceeds of short-term investments for repayment of short-term borrowings and for tax payments made in the first quarter of 2010, associated with certain business decisions executed to finance the Wyeth acquisition.
|
|
(j)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $88 million and foreign currency swaps with fair values of $59 million as of October 3, 2010; and foreign currency forward-exchange contracts with fair values of $122 million and foreign currency swaps with fair values of $3 million as of December 31, 2009.
|
|
(k)
|
The carrying amounts may include adjustments for discount or premium amortization or for the effect of interest rate swaps designated as hedges.
|
|
(l)
|
Includes foreign currency borrowings with fair values of $1.9 billion as of October 3, 2010, and $1.1 billion as of December 31, 2009, which are used as hedging instruments.
|
|
(m)
|
Includes foreign currency debt with fair value of $863 million as of October 3, 2010, and $2.1 billion as of December 31, 2009, which is used as a hedging instrument.
|
|
(n)
|
The fair value of our long-term debt is $44.8 billion as of October 3, 2010, and $46.2 billion as of December 31, 2009.
|
|
●
|
Trading equity securities––quoted market prices.
|
|
●
|
Trading debt securities––observable market interest rates.
|
|
●
|
Available-for-sale debt securities––third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted interest rate yield curves.
|
|
●
|
Available-for-sale money market funds––observable Net Asset Value prices.
|
|
●
|
Available-for-sale equity securities, excluding money market funds––third-party pricing services that principally use a composite of observable prices.
|
|
●
|
Derivative financial instruments (assets and liabilities)––third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data. Where applicable, these models discount future cash flow amounts using market-based observable inputs including interest rate yield curves, and forward and spot prices for currencies. The credit risk impact to our derivative financial instruments was not significant.
|
|
●
|
Held-to-maturity debt securities––third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted interest rate yield curves.
|
|
●
|
Short-term and long-term loans––third-party model that discounts future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
|
|
●
|
Private equity securities, excluding equity-method investments––application of the implied volatility associated with an observable biotech index to the carrying amount of our portfolio and, to a lesser extent, performance multiples of comparable securities adjusted for company-specific information.
|
|
●
|
Short-term borrowings and long-term debt––third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and our own credit rating.
|
|
(millions of dollars)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 1,526 | $ | 666 | ||||
|
Short-term investments
|
20,288 | 23,991 | ||||||
|
Short-term loans
|
774 | 1,195 | ||||||
|
Long-term investments and loans
|
10,344 | 13,122 | ||||||
|
Current deferred tax assets and other current assets(a)
|
278 | 526 | ||||||
|
Noncurrent deferred tax assets and other noncurrent assets(b)
|
951 | 1,050 | ||||||
|
Total
|
$ | 34,161 | $ | 40,550 | ||||
|
Liabilities
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 5,158 | $ | 5,469 | ||||
|
Current deferred tax liabilities and other current liabilities(c)
|
795 | 369 | ||||||
|
Long-term debt
|
39,010 | 43,193 | ||||||
|
Other noncurrent liabilities(d)
|
631 | 421 | ||||||
|
Total
|
$ | 45,594 | $ | 49,452 | ||||
|
(a)
|
As of October 3, 2010, derivative instruments at fair value include foreign currency forward-exchange contracts ($262 million) and foreign currency swaps ($16 million) and, as of December 31, 2009, include foreign currency forward-exchange contracts ($503 million) and foreign currency swaps ($23 million).
|
|
(b)
|
As of October 3, 2010, derivative instruments at fair value include interest rate swaps ($740 million) and foreign currency swaps ($211 million) and, as of December 31, 2009, include foreign currency swaps ($774 million) and interest rate swaps ($276 million).
|
|
(c)
|
As of October 3, 2010, derivative instruments at fair value include foreign currency forward-exchange contracts ($737 million), foreign currency swaps ($53 million) and interest rate swaps ($5 million) and, as of December 31, 2009, include foreign currency forward-exchange contracts ($237 million) and foreign currency swaps ($132 million).
|
|
(d)
|
As of October 3, 2010, derivative instruments at fair value include foreign currency swaps ($631 million) and, as of December 31, 2009, include foreign currency swaps ($396 million) and interest rate swaps ($25 million).
|
|
Years
|
||||||||||||
|
(millions of dollars)
|
Within 1
|
Over 1
to 5
|
Total as of
Oct. 3,
2010
|
|||||||||
|
Available-for-sale debt securities:
|
||||||||||||
|
Western European and other government debt
|
$ | 15,799 | $ | 2,938 | $ | 18,737 | ||||||
|
Corporate debt(a)
|
1,225 | 1,759 | 2,984 | |||||||||
|
Western European and other government agency debt
|
1,099 | 88 | 1,187 | |||||||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage
Association asset-backed securities
|
101 | 2,241 | 2,342 | |||||||||
|
Supranational debt
|
692 | 153 | 845 | |||||||||
|
Reverse repurchase agreements(b)
|
796 | –– | 796 | |||||||||
|
U.S. government Federal Deposit Insurance Corporation
guaranteed debt
|
–– | 561 | 561 | |||||||||
|
Certificates of deposit
|
58 | –– | 58 | |||||||||
|
Other asset-backed securities
|
12 | 36 | 48 | |||||||||
|
Held-to-maturity debt securities:
|
||||||||||||
|
Certificates of deposit and other
|
1,791 | 6 | 1,797 | |||||||||
|
Total debt securities
|
$ | 21,573 | $ | 7,782 | $ | 29,355 | ||||||
|
Trading securities
|
169 | |||||||||||
|
Available-for-sale money market funds(c)
|
862 | |||||||||||
|
Available-for-sale equity securities, excluding money market funds
|
211 | |||||||||||
|
Total
|
$ | 30,597 | ||||||||||
|
(a)
|
Largely issued by above-investment-grade institutions in the financial services sector.
|
|
(b)
|
Very short-term agreements involving U.S. government securities.
|
|
(c)
|
Consisting of securities issued by the U.S. government and its agencies or instrumentalities and reverse repurchase agreements involving the same investments held.
|
|
Gains/(Losses)
|
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Derivative Financial Instruments in Fair Value Hedge Relationships
|
||||||||||||||||
|
Interest rate swaps
|
||||||||||||||||
|
Recognized in OID(a)
|
$ | –– | $ | 5 | $ | –– | $ | (2 | ) | |||||||
|
Foreign currency swaps
|
||||||||||||||||
|
Recognized in OID(a)
|
(1 | ) | (2 | ) | (1 | ) | (2 | ) | ||||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships
|
||||||||||||||||
|
U.S. Treasury interest rate locks
|
||||||||||||||||
|
Recognized in OID(a)
|
$ | –– | $ | –– | $ | –– | $ | (11 | ) | |||||||
|
Recognized in OCI(a), (b)
|
–– | –– | –– | (16 | ) | |||||||||||
|
Reclassified from OCI to OID(a), (b)
|
–– | –– | –– | –– | ||||||||||||
|
Foreign currency swaps
|
||||||||||||||||
|
Recognized in OID(a)
|
–– | –– | –– | –– | ||||||||||||
|
Recognized in OCI(a), (b)
|
656 | 185 | (1,000 | ) | 100 | |||||||||||
|
Reclassified from OCI to OID(a), (b)
|
815 | 245 | (440 | ) | 400 | |||||||||||
|
Foreign currency forward exchange contracts
|
||||||||||||||||
|
Recognized in OID(a)
|
–– | –– | –– | –– | ||||||||||||
|
Recognized in OCI(a), (b)
|
(1 | ) | (2 | ) | (2 | ) | 5 | |||||||||
|
Reclassified from OCI to OID(a), (b)
|
–– | 2 | 2 | 17 | ||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships
|
||||||||||||||||
|
Foreign currency swaps
|
||||||||||||||||
|
Recognized in OID(a)
|
$ | 1 | $ | –– | $ | –– | $ | (1 | ) | |||||||
|
Recognized in OCI(a), (b)
|
(39 | ) | (40 | ) | (78 | ) | (1 | ) | ||||||||
|
Derivative Financial Instruments Not Designated as Hedges
|
||||||||||||||||
|
Foreign currency swaps
|
||||||||||||||||
|
Recognized in OID(a)
|
$ | 6 | $ | 3 | $ | 6 | $ | 17 | ||||||||
|
Foreign currency forward-exchange contracts
|
||||||||||||||||
|
Recognized in OID(a)
|
419 | (354 | ) | (943 | ) | (795 | ) | |||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships
|
||||||||||||||||
|
Foreign currency short-term borrowings
|
||||||||||||||||
|
Recognized in OID(a)
|
$ | –– | $ | –– | $ | –– | $ | –– | ||||||||
|
Recognized in OCI(a), (b)
|
(96 | ) | (62 | ) | (195 | ) | 26 | |||||||||
|
Foreign currency long-term debt
|
||||||||||||||||
|
Recognized in OID(a)
|
–– | –– | –– | –– | ||||||||||||
|
Recognized in OCI(a), (b)
|
(38 | ) | (111 | ) | (72 | ) | –– | |||||||||
|
(a)
|
OID = Other (income)/deductions––net. OCI = Other comprehensive income/(loss), included in the balance sheet account Accumulated other comprehensive (loss)/income.
|
|
(b)
|
Amounts presented represent the effective portion of the gain or loss. For derivative financial instruments in cash flow hedge relationships, the effective portion is included in Other comprehensive income/(loss)––Net unrealized gains/(losses) on derivative financial instruments. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive income/(loss)––Currency translation adjustment and other.
|
|
(millions of dollars)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
Finished goods
|
$ | 4,117 | $ | 5,249 | ||||
|
Work-in-process
|
3,799 | 5,776 | ||||||
|
Raw materials and supplies
|
855 | 1,378 | ||||||
|
Total inventories(a)
|
$ | 8,771 | $ | 12,403 | ||||
|
(a)
|
The decrease in total inventories is primarily due to the inventory sold during the first nine months of 2010 that was acquired from Wyeth and had been recorded at fair value, as well as operational reductions and the impact of foreign exchange. Also, in the third quarter of 2010, we recorded, in Cost of sales, a write-off of inventory of $212 million (which includes a purchase accounting fair value adjustment of $104 million) primarily related to Biopharmaceutical inventory acquired as part of our acquisition of Wyeth that became unusable after the acquisition date.
|
|
|
Certain amounts of inventories are in excess of one year’s supply. These excess amounts are primarily attributable to biologics inventory acquired from Wyeth and recorded at fair value and the quantities are generally consistent with the normal operating cycle of such inventory. There are no recoverability issues associated with these quantities.
|
|
(millions of dollars)
|
Biopharmaceutical
|
Diversified
|
Other(a)
|
Total
|
||||||||||||
|
Balance, December 31, 2009
|
$ | 22,165 | $ | 173 | $ | 20,038 | $ | 42,376 | ||||||||
|
Additions
|
–– | 19 | 2,127 | (b) | 2,146 | |||||||||||
|
Other(c)
|
(551 | ) | (6 | ) | (178 | ) | (735 | ) | ||||||||
|
Allocation of Other goodwill(a)
|
19,091 | 2,896 | (21,987 | ) | –– | |||||||||||
|
Balance, October 3, 2010
|
$ | 40,705 | $ | 3,082 | $ | –– | $ | 43,787 | ||||||||
|
(a)
|
The Other goodwill relates to our acquisition of Wyeth that was unallocated and subject to change until we completed the recording of the assets acquired and liabilities assumed from Wyeth (see Note 3. Acquisition of Wyeth).
|
|
(b)
|
Reflects the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth).
|
|
(c)
|
Primarily reflects the impact of foreign exchange.
|
|
October 3, 2010
|
December 31, 2009
|
|||||||||||||||||||||||
|
(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
|
$ | 68,436 | $ | (24,782 | ) | $ | 43,654 | $ | 68,870 | $ | (21,223 | ) | $ | 47,647 | ||||||||||
|
Brands
|
1,622 | (587 | ) | 1,035 | 1,637 | (535 | ) | 1,102 | ||||||||||||||||
|
License agreements
|
633 | (219 | ) | 414 | 622 | (119 | ) | 503 | ||||||||||||||||
|
Trademarks
|
107 | (72 | ) | 35 | 113 | (73 | ) | 40 | ||||||||||||||||
|
Other
|
435 | (245 | ) | 190 | 488 | (231 | ) | 257 | ||||||||||||||||
|
Total amortized finite-lived intangible assets
|
71,233 | (25,905 | ) | 45,328 | 71,730 | (22,181 | ) | 49,549 | ||||||||||||||||
|
Indefinite-lived intangible assets:
|
||||||||||||||||||||||||
|
Brands(a)
|
10,264 | –– | 10,264 | 12,562 | –– | 12,562 | ||||||||||||||||||
|
In-process research and development(a)
|
2,965 | –– | 2,965 | 5,834 | –– | 5,834 | ||||||||||||||||||
|
Trademarks
|
70 | –– | 70 | 70 | –– | 70 | ||||||||||||||||||
|
Total indefinite-lived intangible assets
|
13,299 | –– | 13,299 | 18,466 | –– | 18,466 | ||||||||||||||||||
|
Total identifiable intangible assets(b)
|
$ | 84,532 | $ | (25,905 | ) | $ | 58,627 | $ | 90,196 | $ | (22,181 | ) | $ | 68,015 | ||||||||||
|
(a)
|
The decrease in Brands and IPR&D assets is related to the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth) and asset impairment charges (see Note 5. Other (Income)/Deductions––Net).
|
|
(b)
|
The decrease in total identifiable intangible assets is primarily related to amortization of finite-lived intangible assets, the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth) and asset impairment charges (see Note 5. Other (Income)/Deductions––Net) and the impact of foreign exchange.
|
|
Pension Plans
|
||||||||||||||||||||||||||||||||
|
U.S. Qualified
|
U.S. Supplemental
(Non-Qualified)
|
International
|
Postretirement
Plans
|
|||||||||||||||||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||||||||||||||
|
For the Three Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service cost
|
$ | 83 | $ | 51 | $ | 7 | $ | 5 | $ | 55 | $ | 46 | $ | 18 | $ | 7 | ||||||||||||||||
|
Interest cost
|
183 | 116 | 19 | 12 | 103 | 85 | 52 | 30 | ||||||||||||||||||||||||
|
Expected return on plan assets
|
(193 | ) | (115 | ) | — | — | (105 | ) | (96 | ) | (7 | ) | (6 | ) | ||||||||||||||||||
|
Amortization of:
|
||||||||||||||||||||||||||||||||
|
Actuarial losses
|
38 | 51 | 7 | 7 | 17 | 6 | 7 | 4 | ||||||||||||||||||||||||
|
Prior service costs/(credits)
|
— | 1 | (1 | ) | (1 | ) | (1 | ) | — | (15 | ) | (1 | ) | |||||||||||||||||||
|
Curtailments and settlements––net
|
(3 | ) | 47 | 8 | 2 | — | 1 | (4 | ) | 2 | ||||||||||||||||||||||
|
Special termination benefits
|
7 | 5 | 3 | — | 1 | 3 | 1 | 2 | ||||||||||||||||||||||||
|
Net periodic benefit costs
|
$ | 115 | $ | 156 | $ | 43 | $ | 25 | $ | 70 | $ | 45 | $ | 52 | $ | 38 | ||||||||||||||||
|
For the Nine Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service cost
|
$ | 266 | $ | 162 | $ | 22 | $ | 15 | $ | 172 | $ | 133 | $ | 61 | $ | 22 | ||||||||||||||||
|
Interest cost
|
562 | 351 | 59 | 37 | 319 | 240 | 160 | 91 | ||||||||||||||||||||||||
|
Expected return on plan assets
|
(595 | ) | (349 | ) | — | — | (324 | ) | (268 | ) | (23 | ) | (19 | ) | ||||||||||||||||||
|
Amortization of:
|
||||||||||||||||||||||||||||||||
|
Actuarial losses
|
114 | 161 | 22 | 23 | 50 | 18 | 7 | 13 | ||||||||||||||||||||||||
|
Prior service costs/(credits)
|
1 | 2 | (2 | ) | (2 | ) | (3 | ) | (2 | ) | (24 | ) | (3 | ) | ||||||||||||||||||
|
Curtailments and settlements––net
|
(72 | ) | 101 | (1 | ) | 15 | (5 | ) | 2 | (6 | ) | 7 | ||||||||||||||||||||
|
Special termination benefits
|
57 | 24 | 155 | — | 4 | 5 | 13 | 17 | ||||||||||||||||||||||||
|
Net periodic benefit costs
|
$ | 333 | $ | 452 | $ | 255 | $ | 88 | $ | 213 | $ | 128 | $ | 188 | $ | 128 | ||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(in millions)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
EPS Numerator––Basic:
|
||||||||||||||||
|
Income from continuing operations
|
$ | 876 | $ | 2,879 | $ | 5,395 | $ | 7,871 | ||||||||
|
Less: Net income attributable to noncontrolling interests
|
5 | 3 | 24 | 9 | ||||||||||||
|
Income from continuing operations attributable to Pfizer Inc.
|
871 | 2,876 | 5,371 | 7,862 | ||||||||||||
|
Less: Preferred stock dividends––net of tax
|
1 | — | 2 | 2 | ||||||||||||
|
Income from continuing operations attributable to Pfizer Inc. common
shareholders
|
870 | 2,876 | 5,369 | 7,860 | ||||||||||||
|
Discontinued operations––net of tax
|
(5 | ) | 2 | (4 | ) | 6 | ||||||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 865 | $ | 2,878 | $ | 5,365 | $ | 7,866 | ||||||||
|
EPS Numerator––Diluted:
|
||||||||||||||||
|
Income from continuing operations attributable to Pfizer Inc. common
shareholders and assumed conversions
|
$ | 871 | $ | 2,876 | $ | 5,371 | $ | 7,862 | ||||||||
|
Discontinued operations––net of tax
|
(5 | ) | 2 | (4 | ) | 6 | ||||||||||
|
Net income attributable to Pfizer Inc. common shareholders and assumed
conversions
|
$ | 866 | $ | 2,878 | $ | 5,367 | $ | 7,868 | ||||||||
|
EPS Denominator
|
||||||||||||||||
|
Weighted-average number of common shares outstanding––Basic
|
8,027 | 6,730 | 8,045 | 6,727 | ||||||||||||
|
Common share equivalents: stock options, stock issuable under employee
compensation plans and convertible preferred stock
|
30 | 32 | 34 | 31 | ||||||||||||
|
Weighted-average number of common shares outstanding––Diluted
|
8,057 | 6,762 | 8,079 | 6,758 | ||||||||||||
|
Stock options that had exercise prices greater than the average market price
of our common stock issuable under employee compensation plans(a)
|
419 | 406 | 419 | 406 | ||||||||||||
|
(a)
|
These common stock equivalents were outstanding during the three and nine months ended October 3, 2010 and September 27, 2009, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
|
|
●
|
Biopharmaceutical consists of the Primary Care, Specialty Care, Oncology, Established Products and Emerging Markets units and includes products that prevent and treat cardiovascular and metabolic diseases, central nervous system disorders, arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye diseases and endocrine disorders, among others. Biopharmaceutical’s segment profit includes costs related to research and development, manufacturing, and sales and marketing activities that are associated with the products in our Biopharmaceutical segment.
|
|
●
|
Diversified includes Animal Health products and services that prevent and treat diseases in livestock and companion animals, including vaccines, parasiticides and anti-infectives; Consumer Healthcare products that include over-the-counter healthcare products such as pain management therapies (analgesics and heat wraps), cough/cold/allergy remedies, dietary supplements, hemorrhoidal care and personal care items; Nutrition products such as infant and toddler nutritional products; and Capsugel, which represents our capsule products and services business. Diversified’s segment profit includes costs related to research and development, manufacturing, and sales and marketing activities that are associated with the products in our Diversified segment.
|
|
Three Months Ended(a)
|
Nine Months Ended(a)
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Biopharmaceutical
|
$ | 13,945 | $ | 10,677 | $ | 43,472 | $ | 30,842 | ||||||||
|
Diversified
|
2,150 | 855 | 6,533 | 2,379 | ||||||||||||
|
Corporate/Other(b)
|
76 | 89 | 243 | 251 | ||||||||||||
|
Total revenues
|
$ | 16,171 | $ | 11,621 | $ | 50,248 | $ | 33,472 | ||||||||
|
Segment profit/(loss)(c)
|
||||||||||||||||
|
Biopharmaceutical
|
$ | 7,005 | $ | 5,501 | $ | 22,844 | $ | 15,868 | ||||||||
|
Diversified
|
530 | 230 | 1,647 | 598 | ||||||||||||
|
Corporate/Other(b), (d)
|
(6,095 | ) | (1,760 | ) | (15,898 | ) | (5,643 | ) | ||||||||
|
Total profit
|
$ | 1,440 | $ | 3,971 | $ | 8,593 | $ | 10,823 | ||||||||
|
(a)
|
Includes revenues and profit/(loss) from legacy Wyeth products and operations for the three months and nine months ended October 3, 2010. Revenues and profit/(loss) from legacy Wyeth products and operations are not included in the three months and nine months ended September 27, 2009. Prior-period amounts for Capsugel, which were previously classified in Corporate/Other, are now classified in Diversified.
|
|
(b)
|
Corporate/Other includes, among other things, Pfizer CentreSource, which includes contract manufacturing and bulk pharmaceutical chemical sales. Corporate/Other under Segment profit/(loss) also includes, among other things, interest income/(expense), corporate administration expenses, certain performance-based and all share-based compensation expenses, most purchase accounting adjustments, all acquisition-related costs, substantially all restructurings and significant asset impairments and litigation charges.
|
|
(c)
|
Segment profit/(loss) equals Income from continuing operations before provision for taxes on income. Certain costs are included in Corporate/Other only (see note (b) above). This methodology is utilized by management to evaluate our businesses.
|
|
(d)
|
For the three months ended October 3, 2010, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $1.6 billion, including intangible asset amortization related to our acquisitions of Wyeth in 2009 and Pharmacia in 2003 and charges related to fair value adjustments of inventory acquired as part of our acquisition of Wyeth and sold during the period; (ii) restructuring and acquisition-related costs of $794 million, related to our acquisition of Wyeth; (iii) intangible asset impairments of $1.5 billion (pre-tax) related to certain intangible assets acquired as part of our acquisition of Wyeth; (iv) Wyeth–related inventory write-off of $212 million (pre-tax) (which includes a purchase accounting fair value adjustment of $104 million), primarily related to Biopharmaceutical inventory; and (v) net interest expense of $328 million.
|
|
|
For the three months ended September 27, 2009, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $564 million, including intangible asset amortization and other charges, primarily related to our acquisition of Pharmacia in 2003; (ii) restructuring charges and implementation costs associated with our cost-reduction initiatives of $141 million; (iii) acquisition-related costs of $132 million, primarily related to our acquisition of Wyeth; and (iv) net interest expense of $198 million.
|
|
|
For the nine months ended October 3, 2010, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $6.6 billion, including intangible asset amortization related to our acquisitions of Wyeth in 2009 and Pharmacia in 2003 and charges related to fair value adjustments of inventory acquired as part of our acquisition of Wyeth and sold during the period; (ii) restructuring and acquisition-related costs of $2.7 billion, related to our acquisition of Wyeth; (iii) intangible asset impairments of $1.7 billion (pre-tax) related to certain intangible assets acquired as part of our acquisition of Wyeth; (iv) Wyeth-related inventory write-off of $212 million (pre-tax) (which includes a purchase accounting fair value adjustment of $104 million), primarily related to Biopharmaceutical inventory; and (v) net interest expense of $1.0 billion.
|
|
|
For the nine months ended September 27, 2009, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $1.7 billion, including intangible asset amortization and other charges, primarily related to our acquisition of Pharmacia in 2003; (ii) acquisition-related costs of $814 million, primarily related to our acquisition of Wyeth; (iii) restructuring charges and implementation costs associated with our cost-reduction initiatives of $802 million; and (iv) net interest expense of $149 million.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Biopharmaceutical products:
|
||||||||||||||||
|
Lipitor
|
$ | 2,534 | $ | 2,853 | $ | 8,104 | $ | 8,259 | ||||||||
|
Enbrel(a), (b)
|
799 | –– | 2,409 | –– | ||||||||||||
|
Lyrica
|
757 | 708 | 2,242 | 2,020 | ||||||||||||
|
Celebrex
|
578 | 602 | 1,752 | 1,714 | ||||||||||||
|
Prevnar/Prevenar 13(a)
|
735 | –– | 1,590 | –– | ||||||||||||
|
Effexor(a)
|
175 | –– | 1,512 | –– | ||||||||||||
|
Viagra
|
459 | 466 | 1,429 | 1,343 | ||||||||||||
|
Xalatan/Xalacom
|
416 | 436 | 1,287 | 1,238 | ||||||||||||
|
Norvasc
|
330 | 488 | 1,120 | 1,487 | ||||||||||||
|
Prevnar/Prevenar (7-valent)(a)
|
179 | –– | 1,030 | –– | ||||||||||||
|
Zyvox
|
285 | 271 | 876 | 811 | ||||||||||||
|
Premarin family(a)
|
263 | –– | 779 | –– | ||||||||||||
|
Sutent
|
257 | 246 | 771 | 671 | ||||||||||||
|
Geodon/Zeldox
|
262 | 252 | 763 | 713 | ||||||||||||
|
Detrol/Detrol LA
|
237 | 283 | 758 | 845 | ||||||||||||
|
Zosyn/Tazocin(a)
|
255 | –– | 749 | –– | ||||||||||||
|
Genotropin
|
211 | 232 | 650 | 636 | ||||||||||||
|
Vfend
|
200 | 196 | 595 | 555 | ||||||||||||
|
Protonix(a)
|
203 | –– | 535 | –– | ||||||||||||
|
Chantix/Champix
|
163 | 155 | 522 | 524 | ||||||||||||
|
BeneFIX(a)
|
156 | –– | 474 | –– | ||||||||||||
|
Zoloft
|
126 | 128 | 390 | 368 | ||||||||||||
|
Caduet
|
127 | 130 | 388 | 392 | ||||||||||||
|
Aromasin
|
111 | 123 | 361 | 347 | ||||||||||||
|
Revatio
|
116 | 111 | 352 | 319 | ||||||||||||
|
Pristiq(a)
|
118 | –– | 341 | –– | ||||||||||||
|
Medrol
|
119 | 106 | 341 | 334 | ||||||||||||
|
Cardura
|
95 | 109 | 312 | 330 | ||||||||||||
|
Aricept(c)
|
100 | 108 | 310 | 311 | ||||||||||||
|
Zithromax/Zmax
|
90 | 85 | 303 | 299 | ||||||||||||
|
BMP2(a)
|
101 | –– | 298 | –– | ||||||||||||
|
Rapamune(a)
|
104 | –– | 292 | –– | ||||||||||||
|
ReFacto AF/Xyntha(a)
|
102 | –– | 290 | –– | ||||||||||||
|
Fragmin
|
84 | 82 | 258 | 244 | ||||||||||||
|
Tygacil(a)
|
78 | –– | 250 | –– | ||||||||||||
|
Alliance revenues(d)
|
1,042 | 692 | 3,107 | 1,872 | ||||||||||||
|
All other(e)
|
1,978 | 1,815 | 5,932 | 5,210 | ||||||||||||
|
Total Biopharmaceutical products
|
13,945 | 10,677 | 43,472 | 30,842 | ||||||||||||
|
Diversified:
|
||||||||||||||||
|
Animal Health(e)
|
860 | 678 | 2,599 | 1,863 | ||||||||||||
|
Consumer Healthcare(a)
|
673 | –– | 2,014 | –– | ||||||||||||
|
Nutrition(a)
|
441 | –– | 1,375 | –– | ||||||||||||
|
Capsugel(f)
|
176 | 177 | 545 | 516 | ||||||||||||
|
Total Diversified
|
2,150 | 855 | 6,533 | 2,379 | ||||||||||||
|
Corporate/Other
|
76 | 89 | 243 | 251 | ||||||||||||
|
Total revenues
|
$ | 16,171 | $ | 11,621 | $ | 50,248 | $ | 33,472 | ||||||||
|
(a)
|
Represents legacy Wyeth products for the three and nine months ended October 3, 2010. Legacy Wyeth products are not included in the three and nine months ended September 27, 2009.
|
|
(b)
|
Outside the U.S. and Canada.
|
|
(c)
|
Represents direct sales under license agreement with Eisai. Co. Ltd.
|
|
(d)
|
Enbrel (in the U.S. and Canada)(a), Aricept, Exforge, Rebif and Spiriva.
|
|
(e)
|
Includes legacy Pfizer and legacy Wyeth products for the three and nine months ended October 3, 2010 and includes only legacy Pfizer products in the three and nine months ended September 27, 2009.
|
|
(f)
|
Prior-period amounts for Capsugel, which were previously classified in Corporate/Other, are now classified in Diversified.
|
|
Three Months Ended(a)
|
Nine Months Ended(a)
|
|||||||||||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
%
Change
|
Oct. 3,
2010
|
Sept. 27,
2009
|
%
Change
|
||||||||||||||||||
|
United States
|
$ | 7,112 | $ | 4,816 | 48 | % | $ | 21,807 | $ | 14,309 | 52 | % | ||||||||||||
|
Developed Europe(b)
|
3,840 | 3,137 | 22 | 12,313 | 8,726 | 41 | ||||||||||||||||||
|
Developed Rest of World(c)
|
2,377 | 1,958 | 21 | 7,401 | 5,648 | 31 | ||||||||||||||||||
|
Emerging Markets(d)
|
2,842 | 1,710 | 66 | 8,727 | 4,789 | 82 | ||||||||||||||||||
|
Total revenues
|
$ | 16,171 | $ | 11,621 | 39 | $ | 50,248 | $ | 33,472 | 50 | ||||||||||||||
|
(a)
|
Includes revenues from legacy Wyeth products for the three and nine months ended October 3, 2010. Revenues from legacy Wyeth products are not included in the three and nine months ended September 27, 2009.
|
|
(b)
|
Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
|
|
(c)
|
Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand, and South Korea.
|
|
(d)
|
Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. Within the Biopharmaceutical segment, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation.
|
|
●
|
Overview of Our Performance and Operating Environment. This section, beginning on page 25, provides information about the following: our business; our performance during the third quarter and first nine months of 2010; the anticipated impacts of the recently enacted healthcare legislation in the U.S.; our operating environment; and our strategic initiatives.
|
|
●
|
Acquisition of Wyeth. This section, on page 30, discusses our 2009 acquisition of Wyeth and adjustments made in the first nine months of 2010 to the provisional allocation of the purchase price. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 3. Acquisition of Wyeth.
|
|
●
|
Revenues. This section, beginning on page 31, provides an analysis of our products and revenues for the three and nine month periods ended October 3, 2010 and September 27, 2009, as well as an overview of important product developments.
|
|
●
|
Costs and Expenses. This section, beginning on page 43, provides a discussion about our costs and expenses.
|
|
●
|
Provision for Taxes on Income. This section, beginning on page 46, provides a discussion of items impacting our tax provision for the periods presented and of two items that will impact our tax provision in the future.
|
|
●
|
Adjusted Income. This section, beginning on page 47, provides a discussion of an alternative view of performance used by management.
|
|
●
|
Financial Condition, Liquidity and Capital Resources. This section, beginning on page 51, provides an analysis of our balance sheets as of October 3, 2010 and December 31, 2009 and cash flows for the first nine months of 2010 and 2009, as well as a discussion of our outstanding debt and commitments that existed as of October 3, 2010, and December 31, 2009. 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, on page 53, discusses recently adopted accounting standards and recently issued accounting standards not adopted as of October 3, 2010
|
|
●
|
Our Financial Guidance for 2010 and Our Financial Targets for 2012. These sections, on page 54, provide a discussion of our financial guidance for full-year 2010 and our financial targets for full-year 2012.
|
|
●
|
Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 55, provides a description of the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements set forth in this MD&A relating to our financial results, operations and business plans and prospects. Such forward-looking statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances. Also included in this section is a discussion of legal proceedings and contingencies.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
|
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
%
Change
|
Oct. 3,
2010
|
Sept. 27,
2009
|
%
Change
|
||||||||||||||||||
|
Revenues
|
$ | 16,171 | $ | 11,621 | 39 | % | $ | 50,248 | $ | 33,472 | 50 | % | ||||||||||||
|
|
||||||||||||||||||||||||
|
Cost of sales
|
3,896 | 1,789 | 118 | 11,997 | 4,953 | 142 | ||||||||||||||||||
|
% of revenues
|
24.1 | % | 15.4 | % | 23.9 | % | 14.8 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Selling, informational and administrative expenses
|
4,633 | 3,282 | 41 | 13,876 | 9,508 | 46 | ||||||||||||||||||
|
% of revenues
|
28.7 | % | 28.2 | % | 27.6 | % | 28.4 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Research and development expenses
|
2,194 | 1,632 | 34 | 6,607 | 5,032 | 31 | ||||||||||||||||||
|
% of revenues
|
13.6 | % | 14.0 | % | 13.1 | % | 15.0 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Amortization of intangible assets
|
1,156 | 594 | 95 | 3,972 | 1,755 | 126 | ||||||||||||||||||
|
% of revenues
|
7.1 | % | 5.1 | % | 7.9 | % | 5.2 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Acquisition-related in-process research and development charges
|
— | — | — | 74 | 20 | 270 | ||||||||||||||||||
|
% of revenues
|
— | % | — | % | 0.1 | % | 0.1 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Restructuring charges and certain acquisition-related costs
|
499 | 193 | 159 | 2,091 | 1,206 | 73 | ||||||||||||||||||
|
% of revenues
|
3.1 | % | 1.7 | % | 4.2 | % | 3.6 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Other deductions––net
|
2,353 | 160 | * | 3,038 | 175 | * | ||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Income from continuing operations before provision for taxes on income
|
1,440 | 3,971 | (64 | ) | 8,593 | 10,823 | (21 | ) | ||||||||||||||||
|
% of revenues
|
8.9 | % | 34.2 | % | 17.1 | % | 32.3 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Provision for taxes on income
|
564 | 1,092 | (48 | ) | 3,198 | 2,952 | 8 | |||||||||||||||||
|
Effective tax rate
|
39.2 | % | 27.5 | % | 37.2 | % | 27.3 | % | ||||||||||||||||
|
Income from continuing operations
|
876 | 2,879 | (70 | ) | 5,395 | 7,871 | (31 | ) | ||||||||||||||||
|
% of revenues
|
5.4 | % | 24.8 | % | 10.7 | % | 23.5 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Discontinued operations––net of tax
|
(5 | ) | 2 | * | (4 | ) | 6 | * | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net income before allocation to noncontrolling interests
|
871 | 2,881 | (70 | ) | 5,391 | 7,877 | (32 | ) | ||||||||||||||||
|
% of revenues
|
5.4 | % | 24.8 | % | 10.7 | % | 23.5 | % | ||||||||||||||||
|
Less: Net income attributable to noncontrolling interests
|
5 | 3 | 67 | 24 | 9 | 167 | ||||||||||||||||||
|
Net income attributable to Pfizer Inc.
|
$ | 866 | $ | 2,878 | (70 | ) | $ | 5,367 | $ | 7,868 | (32 | ) | ||||||||||||
|
% of revenues
|
5.4 | % | 24.8 | % | 10.7 | % | 23.5 | % | ||||||||||||||||
|
Earnings per common share––basic:
|
||||||||||||||||||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.11 | $ | 0.43 | (74 | ) | $ | 0.67 | $ | 1.17 | (43 | ) | ||||||||||||
|
Discontinued operations––net of tax
|
— | — | — | — | — | — | ||||||||||||||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.11 | $ | 0.43 | (74 | ) | $ | 0.67 | $ | 1.17 | (43 | ) | ||||||||||||
|
Earnings per common share––diluted:
|
||||||||||||||||||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.11 | $ | 0.43 | (74 | ) | $ | 0.66 | $ | 1.16 | (43 | ) | ||||||||||||
|
Discontinued operations––net of tax
|
— | — | — | — | — | — | ||||||||||||||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.11 | $ | 0.43 | (74 | ) | $ | 0.66 | $ | 1.16 | (43 | ) | ||||||||||||
|
|
||||||||||||||||||||||||
|
Cash dividends paid per common share
|
$ | 0.18 | $ | 0.16 | $ | 0.54 | $ | 0.64 | ||||||||||||||||
|
*
|
Calculation not meaningful.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3, 2010 vs.
Sept. 27, 2009
Increase/(decrease)
|
% Change
|
Oct. 3, 2010 vs.
Sept. 27, 2009
Increase/(decrease)
|
% Change
|
||||||||||||
|
Enbrel (outside the U.S. and Canada)(a)
|
$ | 799 | * | $ | 2,409 | * | ||||||||||
|
Prevnar/Prevenar 13(a)
|
735 | * | 1,590 | * | ||||||||||||
|
Effexor(a), (b)
|
175 | * | 1,512 | * | ||||||||||||
|
Prevnar/Prevenar (7-valent)(a)
|
179 | * | 1,030 | * | ||||||||||||
|
Premarin family(a)
|
263 | * | 779 | * | ||||||||||||
|
Zosyn/Tazocin(a)
|
255 | * | 749 | * | ||||||||||||
|
Protonix(a)
|
203 | * | 535 | * | ||||||||||||
|
BeneFIX(a)
|
156 | * | 474 | * | ||||||||||||
|
Pristiq(a)
|
118 | * | 341 | * | ||||||||||||
|
ReFacto AF/Xyntha(a)
|
102 | * | 290 | * | ||||||||||||
|
Detrol/Detrol LA
|
(46 | ) | (16 | ) | (87 | ) | (10 | ) | ||||||||
|
Lipitor(b)
|
(319 | ) | (11 | ) | (155 | ) | (2 | ) | ||||||||
|
Camptosar(b)
|
(53 | ) | (63 | ) | (181 | ) | (65 | ) | ||||||||
|
Norvasc(b)
|
(158 | ) | (32 | ) | (367 | ) | (25 | ) | ||||||||
|
Alliance revenues(a)
|
350 | 51 | 1,235 | 66 | ||||||||||||
|
All Other Biopharmaceutical(a)
|
163 | 9 | 722 | 14 | ||||||||||||
|
Animal Health(a)
|
182 | 27 | 736 | 40 | ||||||||||||
|
Consumer Healthcare(a)
|
673 | * | 2,014 | * | ||||||||||||
|
Nutrition(a)
|
441 | * | 1,375 | * | ||||||||||||
|
(a)
|
Third quarter and first nine months of 2010 reflects the inclusion of revenues from legacy Wyeth products.
|
|
(b)
|
Effexor lost exclusivity in the U.S. in July 2010. Lipitor lost exclusivity in Canada in May 2010 and in Spain in July 2010. Camptosar lost exclusivity in Europe in July 2009. Norvasc lost exclusivity in Canada in July 2009.
|
|
*
|
Calculation not meaningful.
|
|
●
|
expenses associated with the legacy Wyeth operations;
|
|
●
|
the impact of purchase accounting adjustments primarily related to the Wyeth acquisition, on Cost of sales and Amortization of intangible assets;
|
|
●
|
impairment charges of $1.5 billion (pre-tax) related to certain intangible assets acquired as part of the Wyeth acquisition (see further discussion in the “Costs and Expenses––Other (Income)/Deductions” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 3. Acquisition of Wyeth, Note 5. Other (Income)/Deductions-Net) and Note 10B. Goodwill and Other Intangible Assets: Other Intangible Assets;
|
|
●
|
higher Restructuring charges and certain acquisition-related costs related to the Wyeth acquisition;
|
|
●
|
an additional charge for asbestos litigation of $701 million (pre-tax) related to our wholly owned subsidiary Quigley Company, Inc. (for additional information, see Part II––Other Information; Item I. Legal Proceedings of this Form 10-Q);
|
|
●
|
a write-off of Wyeth-related inventory of $212 million (pre-tax) (which includes a purchase accounting fair value adjustment of $104 million) (see Notes to Condensed Consolidated Financial Statements—Note 9. Inventories); and
|
|
●
|
an increase in the 2010 effective tax rate (see further discussion in the “Provision for Taxes on Income” section of this MD&A),
|
|
●
|
increased revenues, due to the inclusion of revenues from legacy Wyeth products.
|
|
●
|
higher net interest expense, mainly due to the issuance of debt in connection with the acquisition of Wyeth and the addition of legacy Wyeth debt, as well as lower interest income; and
|
|
●
|
the favorable impact of foreign exchange.
|
|
●
|
an increase, from 15.1% to 23.1%, in the minimum rebate on branded prescription drugs sold to Medicaid beneficiaries (effective January 1, 2010);
|
|
●
|
extension of Medicaid prescription drug rebates to drugs dispensed to enrollees in certain Medicaid managed care organizations (effective March 23, 2010);
|
|
●
|
expansion of the types of institutions eligible for the “Section 340B discounts” for outpatient drugs provided to hospitals meeting the qualification criteria under Section 340B of the Public Health Service Act of 1944 (effective January 1, 2010);
|
|
●
|
discounts on branded prescription drug sales to Medicare Part D participants who are in the Medicare “coverage gap,” also known as the “doughnut hole” (effective January 1, 2011); and
|
|
●
|
an annual 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 (effective January 1, 2011, with the total fee to be paid each year by the pharmaceutical industry increasing annually through 2018).
|
|
●
|
Aricept 5mg and 10mg tablets in the U.S. in November 2010;
|
|
●
|
Vfend tablets in the U.S. and Brazil in the first quarter of 2011;
|
|
●
|
Xalatan in the U.S. in March 2011; and
|
|
●
|
Xalatan and Xalacom in the majority of major European markets in July 2011. We are pursuing a pediatric extension for Xalatan in Europe. If we are successful, the loss of exclusivity in the majority of major European markets will be postponed by six months to January 2012.
|
|
●
|
On October 12, 2010, we announced that we have entered into a definitive merger agreement to acquire King Pharmaceuticals, Inc. (King) for $3.6 billion in cash, or $14.25 per share, without interest. King’s principal businesses consist of a prescription pharmaceutical business focused on delivering new formulations of pain treatments designed to discourage common methods of misuse and abuse; the Meridian auto-injector business for emergency drug delivery, which develops and manufactures the EpiPen®; and an animal health business that offers a variety of feed-additive products for a wide range of species. The Boards of Directors of both Pfizer and King have approved the transaction. On October 22, 2010, in accordance with the terms of the merger agreement, a subsidiary of Pfizer commenced a cash tender offer to purchase all of the outstanding shares of King common stock for $14.25 net per share in cash, without interest (the “Offer”). Completion of the Offer is subject to customary conditions including, among others, (i) a majority of the shares of King common stock issued and outstanding (on a fully diluted basis, without giving effect to compensatory equity awards that may be validly canceled under the merger agreement upon completion of the Offer) being validly tendered and not validly withdrawn and (ii) the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expiring and all other authorizations, consents, and approvals of or notices or filings with any foreign antitrust or competition regulatory authority having been made or obtained. If the Offer is successfully completed, then, following receipt of approval by King’s shareholders if required, Pfizer expects to consummate a merger that would result in all King shares being canceled and converted into the right to receive $14.25 net per share in cash, without interest. Pfizer and King are targeting a late fourth-quarter 2010 or first-quarter 2011 closing, assuming execution of the tender process and receipt of the appropriate regulatory clearances.
|
|
●
|
On November 8, 2010, we consummated our previously announced partnership to develop and commercialize generic medicines with Laboratório Teuto Brasileiro S.A, (Teuto) a leading generics company in Brazil. As part of the transaction, we acquired a 40 percent equity stake in Teuto, and the companies entered into a series of commercial agreements. In accordance with the terms of our purchase agreement with Teuto, we have two representatives on Teuto’s Board of Directors. The partnership is expected to enhance our position in Brazil, a key emerging market, by providing access to Teuto’s portfolio of products. Through this partnership, we expect to also have access to significant distribution networks in rural and suburban areas in Brazil and the opportunity to register and commercialize Teuto’s products in various markets outside of Brazil. Under the terms of our purchase agreement with Teuto, we made an upfront payment at the closing of approximately $230 million (subject to certain post-closing adjustments). In addition, Teuto will be eligible to receive a performance-based milestone payment from us in 2012. We have an option to acquire the remaining 60 percent of Teuto’s shares beginning in 2014, and Teuto’s shareholders have an option to sell their 60 percent stake to us beginning in 2015. Our equity interest in Teuto will be accounted for under the equity method of accounting.
|
|
●
|
On October 18, 2010, we announced that we have entered into a strategic global agreement with Biocon, a Biotechnology company based in India, for the worldwide commercialization of Biocon’s biosimilar versions of insulin and insulin analog products: Recombinant Human Insulin, Glargine, Aspart and Lispro. We will have exclusive rights to commercialize these products globally, with certain exceptions, including co-exclusive rights for all of the products with Biocon in Germany, India and Malaysia. We will also have co-exclusive rights with existing Biocon licensees with respect to certain of these products, primarily in a number of developing markets. Biocon will remain responsible for the clinical development, manufacture and supply of these biosimilar insulin products, as well as for regulatory activities to secure approval for these products in various markets. Biocon’s Recombinant Human Insulin formulations are approved in 27 countries in developing markets, and commercialized in 23 of those countries, while Glargine has been launched in its first market, India. Under the terms of the strategic global agreement, we will make upfront payments totaling $200 million in the fourth quarter of 2010, of which $100 million will be paid to Biocon and $100 million will be paid into an escrow account. The payment into the escrow account will be released to Biocon based on achievement of certain milestones. Biocon also is eligible to receive additional development and regulatory milestone payments of up to $150 million and will receive additional payments based on our sales of Biocon’s four insulin biosimilar products across global markets.
|
|
●
|
On October 6, 2010, we completed our acquisition of FoldRx Pharmaceuticals, Inc. (FoldRx), a privately held drug discovery and clinical development company, whose portfolio includes clinical and preclinical programs for investigational compounds to treat diseases caused by protein misfolding. FoldRx’s lead product candidate, tafamidis meglumine, is in registration in the EU as an oral, disease-modifying therapy for TTR amyloid polyneuropathy, a progressively fatal genetic neurodegenerative disease, for which liver transplant is the only treatment option currently available. Upon closing of the acquisition, we made an upfront payment to FoldRx’s shareholders and we will make future contingent payments if certain milestones are achieved.
|
| % Change in Revenues | ||||||||||||||||||||||||||||||||||||
|
World-
|
Inter-
|
|||||||||||||||||||||||||||||||||||
|
Worldwide(a)
|
U.S.(a)
|
International(a)
|
wide
|
U.S.
|
national
|
|||||||||||||||||||||||||||||||
|
Oct. 3,
|
Sept. 27,
|
Oct. 3,
|
Sept. 27,
|
Oct. 3,
|
Sept. 27,
|
|||||||||||||||||||||||||||||||
|
(millions of dollars)
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
10/09 | 10/09 | 10/09 | |||||||||||||||||||||||||||
|
Three Months Ended:
|
||||||||||||||||||||||||||||||||||||
|
Biopharmaceutical
|
$ | 13,945 | $ | 10,677 | $ | 6,298 | $ | 4,448 | $ | 7,647 | $ | 6,229 | 31 | 42 | 23 | |||||||||||||||||||||
|
Diversified
|
2,150 | 855 | 792 | 347 | 1,358 | 508 | 151 | 128 | 167 | |||||||||||||||||||||||||||
|
Corporate/Other(b)
|
76 | 89 | 22 | 21 | 54 | 68 | (15 | ) | 5 | (21 | ) | |||||||||||||||||||||||||
|
Total Revenues
|
$ | 16,171 | $ | 11,621 | $ | 7,112 | $ | 4,816 | $ | 9,059 | $ | 6,805 | 39 | 48 | 33 | |||||||||||||||||||||
|
Nine Months Ended:
|
||||||||||||||||||||||||||||||||||||
|
Biopharmaceutical
|
$ | 43,472 | $ | 30,842 | $ | 19,554 | $ | 13,347 | $ | 23,918 | $ | 17,495 | 41 | 47 | 37 | |||||||||||||||||||||
|
Diversified
|
6,533 | 2,379 | 2,168 | 901 | 4,365 | 1,478 | 175 | 141 | 195 | |||||||||||||||||||||||||||
|
Corporate/Other(b)
|
243 | 251 | 85 | 61 | 158 | 190 | (3 | ) | 39 | (17 | ) | |||||||||||||||||||||||||
|
Total Revenues
|
$ | 50,248 | $ | 33,472 | $ | 21,807 | $ | 14,309 | $ | 28,441 | $ | 19,163 | 50 | 52 | 48 | |||||||||||||||||||||
|
(a)
|
Reflects the inclusion of revenues from legacy Wyeth products for the three and nine months ended October 3, 2010. Legacy Wyeth revenues are not included in the three and nine months ended September 27, 2009. Prior-period amounts for Capsugel, which previously were classified as Corporate/Other, now are included in Diversified.
|
|
(b)
|
Includes revenues primarily from Pfizer CentreSource, which includes contract manufacturing and bulk pharmaceutical chemical sales.
|
|
Three Months Ended(a)
|
Nine Months Ended(a)
|
|||||||||||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009(b)
|
% Change
|
Oct. 3,
2010
|
Sept. 27,
2009(b)
|
% Change
|
||||||||||||||||||
|
Biopharmaceutical:
|
||||||||||||||||||||||||
|
Primary care(c)
|
$ | 5,653 | $ | 5,540 | 2 | $ | 17,442 | $ | 16,040 | 9 | ||||||||||||||
|
Specialty care
|
3,717 | 1,577 | 136 | 11,009 | 4,465 | 147 | ||||||||||||||||||
|
Established products(d)
|
2,168 | 1,657 | 31 | 7,682 | 4,986 | 54 | ||||||||||||||||||
|
Emerging markets
|
2,072 | 1,529 | 36 | 6,294 | 4,270 | 47 | ||||||||||||||||||
|
Oncology(e)
|
335 | 374 | (10 | ) | 1,045 | 1,081 | (3 | ) | ||||||||||||||||
|
Total Biopharmaceutical
|
13,945 | 10,677 | 31 | 43,472 | 30,842 | 41 | ||||||||||||||||||
|
Diversified:
|
||||||||||||||||||||||||
|
Animal Health
|
860 | 678 | 27 | 2,599 | 1,863 | 40 | ||||||||||||||||||
|
Consumer Healthcare
|
673 | –– | * | 2,014 | –– | * | ||||||||||||||||||
|
Nutrition
|
441 | –– | * | 1,375 | –– | * | ||||||||||||||||||
|
Capsugel
|
176 | 177 | (1 | ) | 545 | 516 | 6 | |||||||||||||||||
|
Total Diversified
|
2,150 | 855 | 151 | 6,533 | 2,379 | 175 | ||||||||||||||||||
|
Corporate/Other(f)
|
76 | 89 | (15 | ) | 243 | 251 | (3 | ) | ||||||||||||||||
|
Total revenues
|
$ | 16,171 | $ | 11,621 | 39 | $ | 50,248 | $ | 33,472 | 50 | ||||||||||||||
|
(a)
|
Reflects the inclusion of revenues from legacy Wyeth products for the three and nine months ended October 3, 2010. Legacy Wyeth revenues are not included in the three and nine months ended September 27, 2009. Prior-period amounts for Capsugel, which previously were classified as Corporate/Other, now are included in Diversified.
|
|
(b)
|
Within the Biopharmaceutical segment, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units.
|
|
(c)
|
The legacy Pfizer Primary Care unit was negatively impacted by 4% in the third quarter of 2010 and by 1% in the first nine months of 2010 due the loss of exclusivity of Lipitor in Canada in May 2010 and in Spain in July 2010.
|
|
(d)
|
The legacy Pfizer Established Products unit was negatively impacted by 6% in the third quarter of 2010 and by 5% in the first nine months of 2010 due to the loss of exclusivity for Norvasc in Canada in July 2009, which was partially offset by the favorable impact of 1% in the third quarter and 1% in the first nine months of 2010 due to the reclassification of Camptosar’s European revenues to the Established Products unit, effective January 1, 2010.
|
|
(e)
|
Legacy Pfizer Oncology unit revenues in the third quarter and first nine months of 2010 do not include Camptosar’s European revenues due to Camptosar’s loss of exclusivity in Europe in July 2009. The reclassification of those revenues to the Established Products unit effective January 1, 2010, negatively impacted the legacy Pfizer Oncology unit’s performance by 16% in third-quarter 2010, and 20% in the first nine months of 2010, compared to the same periods last year.
|
|
(f)
|
Includes revenues primarily from Pfizer CentreSource, which includes contract manufacturing and bulk pharmaceutical chemical sales.
|
|
*
|
Calculation not meaningful.
|
|
●
|
the inclusion of operational revenues from legacy Wyeth products of approximately $3.9 billion, which favorably impacted Biopharmaceutical revenues by 37%,
|
|
●
|
the decrease in operational revenues of approximately $468 million, or 4% from legacy Pfizer products overall, including Lipitor Norvasc and Camptosar all of which were impacted by the loss of exclusivity in certain markets, as well as Detrol/Detrol LA; and
|
|
●
|
the strengthening of the U.S. dollar relative to other currencies, primarily the euro and the U.K. pound, which unfavorably impacted Biopharmaceutical revenues by approximately $173 million, or 2%.
|
|
●
|
the inclusion of operational revenues from legacy Wyeth products of approximately $12.1 billion, which favorably impacted Biopharmaceutical revenues by 39%; and
|
|
●
|
the weakening of the U.S. dollar relative to other currencies, primarily the Canadian dollar, Australian dollar, Japanese yen and Brazilian real, which favorably impacted Biopharmaceutical revenues by approximately $930 million, or 3%,
|
|
●
|
the decrease in operational revenues of approximately $420 million, or 1%, from legacy Pfizer products overall, including Norvasc, Camptosar, Lipitor and Detrol/Detrol LA.
|
|
●
|
in the U.S., Biopharmaceutical revenues increased 42% in the third quarter of 2010 and 47% in the first nine months of 2010, compared to the same periods in 2009.
|
|
o
|
The increase in U.S. Biopharmaceutical revenues in the third quarter of 2010 reflects the inclusion of revenues from legacy Wyeth products of $1.9 billion, which had a favorable impact of 43%, partially offset by a decrease in overall revenues from legacy Pfizer products, including Lipitor, Detrol/Detrol LA, Celebrex and Caduet, of $66 million, which had an unfavorable impact of 1%.
|
|
o
|
The increase in U.S. Biopharmaceutical revenues in the first nine months of 2010 reflects the inclusion of revenues from legacy Wyeth products of $6.4 billion, which had a favorable impact of 48%, partially offset by lower overall revenues from legacy Pfizer products, including Lipitor, Detrol/Detrol LA, Celebrex, Chantix and Caduet, of $204 million, which had an unfavorable impact of 1%.
|
|
●
|
in our international markets, Biopharmaceutical revenues increased 23% in the third quarter of 2010 and 37% in the first nine months of 2010, compared to the same periods in 2009.
|
|
o
|
The increase in international Biopharmaceutical revenues in the third quarter of 2010 reflects the inclusion of operational revenues from legacy Wyeth products of $2.0 billion, which had a favorable impact of 32%, partially offset by lower operational revenues from legacy Pfizer products of $402 million, or 6%, and the unfavorable impact of foreign exchange on international Biopharmaceutical revenues of $173 million, or 3%. The decrease in operational revenues of legacy Pfizer products was due to lower operational revenues from, among other products, Lipitor, Norvasc and Camptosar, all of which were impacted by the loss of exclusivity in certain international markets.
|
|
o
|
The increase in international Biopharmaceutical revenues in the first nine months of 2010 reflects the inclusion of operational revenues from legacy Wyeth products of $5.7 billion, which had a favorable impact of 32%, and the favorable impact of foreign exchange on international Biopharmaceutical revenues of $930 million, or 6%, partially offset by lower operational revenues from legacy Pfizer products of $215 million, or 1%. The decrease in operational revenues of legacy Pfizer products was due to lower operational revenues from, among other products, Norvasc and Camptosar, both of which were impacted by the loss of exclusivity in certain international markets.
|
|
●
|
the inclusion of operational revenues from legacy Wyeth products of approximately $1.3 billion in the third quarter of 2010 and $3.8 billion in the first nine months of 2010, which favorably impacted Diversified revenues by 147% in the third quarter of 2010 and 159% in the first nine months of 2010. These increases were primarily due to the addition of the legacy Wyeth Consumer Healthcare (principally Centrum, Advil and Caltrate) and Nutrition operations. In addition, worldwide Diversified revenues were favorably impacted by the operational revenue increase in legacy Pfizer Diversified businesses of 4% in the third quarter of 2010 and 7% in the first nine months of 2010, and the favorable impact of foreign exchange of 9% in the first nine months of 2010. The impact of foreign exchange on Diversified revenues in the third quarter of 2010 was immaterial.
|
|
●
|
the inclusion of operational revenues from legacy Wyeth Animal Health products of 23% in the third quarter of 2010 and 28% in the first nine months of 2010;
|
|
●
|
higher operational revenues from legacy Pfizer Animal Health products of 5% in the third quarter of 2010 and 7% in the first nine months of 2010; and
|
|
●
|
the unfavorable impact of foreign exchange of 1% in the third quarter of 2010, and the favorable impact of foreign exchange of 5% in the first nine months of 2010.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Medicaid and related state program rebates(a)
|
$ | 314 | $ | 133 | $ | 955 | $ | 441 | ||||||||
|
Medicare rebates(a)
|
343 | 209 | 912 | 653 | ||||||||||||
|
Performance-based contract rebates(a), (b)
|
598 | 556 | 1,893 | 1,710 | ||||||||||||
|
Chargebacks(c)
|
744 | 495 | 2,224 | 1,543 | ||||||||||||
|
Total
|
$ | 1,999 | $ | 1,393 | $ | 5,984 | $ | 4,347 | ||||||||
|
(a)
|
Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold.
|
|
(b)
|
Performance-based contracts are with managed care customers, including health maintenance organizations and pharmacy benefit managers, which receive rebates based on the achievement of contracted performance terms for products.
|
|
(c)
|
Chargebacks primarily represent reimbursements to wholesalers for honoring contracted prices to third parties.
|
|
●
|
the inclusion of rebates and chargebacks related to legacy Wyeth products; and
|
|
●
|
the impact of increased Medicaid rebate rates due to the U.S. Healthcare Legislation, in addition to higher rates for certain products that are subject to rebates,
|
|
●
|
changes in product mix; and
|
|
●
|
the impact on chargebacks of decreased sales within our generics business.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
|
% Change
|
% Change
|
||||||||||||||||
|
(millions of dollars)
|
From
|
|
From
|
||||||||||||||
|
Product
|
Primary Indications
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Lipitor
|
Reduction of LDL cholesterol
|
$ | 2,534 | (11 | ) | $ | 8,104 | (2 | ) | ||||||||
|
Enbrel(a), (b)
|
Rheumatoid, juvenile rheumatoid and psoriatic
arthritis, plaque psoriasis and ankylosing
spondylitis
|
799 | * | 2,409 | * | ||||||||||||
|
Lyrica
|
Epilepsy, post-herpetic neuralgia and diabetic
peripheral neuropathy, fibromyalgia
|
757 | 7 | 2,242 | 11 | ||||||||||||
|
Celebrex
|
Arthritis pain and inflammation, acute pain
|
578 | (4 | ) | 1,752 | 2 | |||||||||||
|
Prevnar/Prevenar 13(a)
|
Vaccine for prevention of invasive
pneumococcal disease
|
735 | * | 1,590 | * | ||||||||||||
|
Effexor(a)
|
Depression and certain anxiety disorders
|
175 | * | 1,512 | * | ||||||||||||
|
Viagra
|
Erectile dysfunction
|
459 | (2 | ) | 1,429 | 6 | |||||||||||
|
Xalatan/Xalacom
|
Glaucoma and ocular hypertension
|
416 | (5 | ) | 1,287 | 4 | |||||||||||
|
Norvasc
|
Hypertension
|
330 | (32 | ) | 1,120 | (25 | ) | ||||||||||
|
Prevnar/Prevenar(7-valent)(a)
|
Vaccine for prevention of invasive
pneumococcal disease
|
179 | * | 1,030 | * | ||||||||||||
|
Zyvox
|
Bacterial infections
|
285 | 5 | 876 | 8 | ||||||||||||
|
Premarin family(a)
|
Menopause
|
263 | * | 779 | * | ||||||||||||
|
Sutent
|
Advanced and/or metastatic renal cell carcinoma
(mRCC) and refractory gastrointestinal stromal
tumors (GIST)
|
257 | 4 | 771 | 15 | ||||||||||||
|
Geodon/Zeldox
|
Schizophrenia; acute manic or mixed episodes
associated with bipolar disorder; maintenance
treatment of bipolar mania
|
262 | 4 | 763 | 7 | ||||||||||||
|
Detrol/Detrol LA
|
Overactive bladder
|
237 | (16 | ) | 758 | (10 | ) | ||||||||||
|
Zosyn/Tazocin(a)
|
Antibiotic
|
255 | * | 749 | * | ||||||||||||
|
Genotropin
|
Replacement of human growth hormone
|
211 | (9 | ) | 650 | 2 | |||||||||||
|
Vfend
|
Fungal infections
|
200 | 2 | 595 | 7 | ||||||||||||
|
Protonix(a)
|
Gastroesophageal reflux disease
|
203 | * | 535 | * | ||||||||||||
|
Chantix/Champix
|
An aid to smoking cessation
|
163 | 5 | 522 | –– | ||||||||||||
|
BeneFIX(a)
|
Hemophilia
|
156 | * | 474 | * | ||||||||||||
|
Zoloft
|
Depression and certain anxiety disorders
|
126 | (2 | ) | 390 | 6 | |||||||||||
|
Caduet
|
Reduction of LDL cholesterol and hypertension
|
127 | (2 | ) | 388 | (1 | ) | ||||||||||
|
Aromasin
|
Breast cancer
|
111 | (10 | ) | 361 | 4 | |||||||||||
|
Revatio
|
Pulmonary arterial hypertension (PAH)
|
116 | 5 | 352 | 10 | ||||||||||||
|
Pristiq(a)
|
Depression
|
118 | * | 341 | * | ||||||||||||
|
Medrol
|
Inflammation
|
119 | 12 | 341 | 2 | ||||||||||||
|
Cardura
|
Hypertension/Benign prostatic hyperplasia
|
95 | (13 | ) | 312 | (5 | ) | ||||||||||
|
Aricept(c)
|
Alzheimer’s disease
|
100 | (7 | ) | 310 | –– | |||||||||||
|
Zithromax/Zmax
|
Bacterial infections
|
90 | 6 | 303 | 1 | ||||||||||||
|
BMP2(a)
|
Development of bone and cartilage
|
101 | * | 298 | * | ||||||||||||
|
Rapamune(a)
|
Immunosuppressant
|
104 | * | 292 | * | ||||||||||||
|
ReFacto AF/Xyntha(a)
|
Hemophilia
|
102 | * | 290 | * | ||||||||||||
|
Fragmin
|
Anticoagulant
|
84 | 2 | 258 | 6 | ||||||||||||
|
Tygacil(a)
|
Antibiotic
|
78 | * | 250 | * | ||||||||||||
|
Alliance revenues(d)
|
Various
|
1,042 | 51 | 3,107 | 66 | ||||||||||||
|
All other(e)
|
Various
|
1,978 | 9 | 5,932 | 14 | ||||||||||||
|
(a)
|
Reflects the inclusion of revenues from legacy Wyeth products in the three and nine months ended October 3, 2010.
|
|
|
Revenues from legacy Wyeth products are not included in the three and nine months ended September 27, 2009.
|
|
(b)
|
Outside the U.S. and Canada.
|
|
(c)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(d)
|
Inflammation (Enbrel in the U.S. and Canada)(a), Alzheimer’s disease (Aricept), hypertension (Exforge), multiple sclerosis (Rebif) and chronic obstructive pulmonary disease (Spiriva).
|
|
(e)
|
Includes legacy Pfizer and legacy Wyeth products in the three and nine months ended October 3, 2010 and includes only legacy Pfizer products in the three months and nine months ended September 27, 2009.
|
|
*
|
Calculation not meaningful.
|
|
|
Certain amounts and percentages may reflect rounding adjustments.
|
|
●
|
Lipitor, for the treatment of elevated LDL-cholesterol levels in the blood, is the most widely used branded prescription treatment for lowering cholesterol and the best-selling prescription pharmaceutical product of any kind in the world. Lipitor recorded worldwide revenues of $2.5 billion, or a decrease of 11%, in the third quarter of 2010 and $8.1 billion, or a decrease of 2%, in the first nine months of 2010, compared to the same periods in 2009. Foreign exchange had an unfavorable impact in the third quarter of 2010, which decreased revenues by $29 million, or 1%, and a favorable impact in the first nine months of 2010, which increased revenues by $234 million, or 3%, compared to the same periods in 2009. In the U.S., revenues were $1.3 billion, a decrease of 6%, in the third quarter of 2010 compared to the same period in 2009, and revenues were $3.9 billion, a decrease of 5%, in the first nine months of 2010 compared to the same period in 2009. Internationally, Lipitor revenues were $1.2 billion, a decrease of 16%, in the third quarter of 2010 and $4.2 billion, an increase of 2%, in the first nine months of 2010, compared to the same periods in 2009. The impact of foreign exchange decreased international revenues by 2% in the third quarter of 2010 and increased international revenues by 6% in the first nine months of 2010, compared to the same periods in 2009.
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|
|
The decreases in Lipitor worldwide operational revenues in the third quarter of 2010 and the first nine months of 2010, compared to the same periods in 2009, were driven by a combination of factors, including the following:
|
|
|
o
|
the continuing impact of an intensely competitive lipid-lowering market with competition from generics and branded products worldwide;
|
|
|
o
|
increased payer pressure worldwide;
|
|
|
o
|
slower growth in the lipid-lowering market in the U.S. due, in part, to a slower rate of growth in the Medicare Part D population and, reflecting weak economic conditions, heightened overall patient cost-sensitivity in the U.S. and adoption of non-prescription treatment options; and
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|
|
o
|
loss of exclusivity in Canada in May 2010 and Spain in July 2010.
|
|
|
See the “Our Operating Environment––Industry-Specific Challenges” section of this MD&A for a discussion concerning the expected loss of exclusivity for Lipitor in various markets.
|
|
|
In August and October 2010, we implemented three voluntary recalls of Lipitor 40 mg tablets due to a small number of reports of an uncharacteristic odor related to the bottles in which Lipitor is packaged. Our recalls involved a total of 19 lots in the U.S. and Canada. The odor related to bottles that were manufactured by a third-party supplier, most of which entered the supply chain before August 2010. A medical assessment by us has determined that the odor is not likely to cause adverse health consequences. We have identified the source of the odor, and we are implementing rigorous measures to prevent odor-related issues going forward. While the rate of odor complaints is very low, we cannot rule out the possibility of further recalls based on our quality control measures in the event that there are any future odor-related observations. These recalls have not had any significant impact on our results of operations, and we do not expect any disruptions in the supply of Lipitor.
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|
●
|
Enbrel, for the treatment of rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, a type of arthritis affecting the spine, recorded worldwide revenues, excluding the U.S. and Canada, of $799 million in the third quarter of 2010 and $2.4 billion in the first nine months of 2010. Enbrel revenues from the U.S. and Canada are included in alliance revenues. The approval of competing products for the treatment of psoriasis has increased competition with respect to Enbrel in 2010.
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|
|
We have exclusive rights to Enbrel outside the U.S. and Canada and co-promote Enbrel with Amgen Inc. (Amgen) in the U.S. and Canada. Our co-promotion agreement with Amgen expires in October 2013, and we are entitled to a royalty stream for 36 months thereafter, which is significantly less than our current share of Enbrel profits from U.S. and Canadian sales. Our rights to Enbrel outside the U.S. and Canada will not be affected by the expiration of the co-promotion agreement.
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|
●
|
Lyrica, indicated for the management of post-herpetic neuralgia (PHN), diabetic peripheral neuropathy (DPN), fibromyalgia, and as adjunctive therapy for adult patients with partial onset seizures in the U.S., and for neuropathic pain, adjunctive treatment of epilepsy and general anxiety disorder (GAD) in certain countries outside the U.S., recorded increases in worldwide revenues of 7% in the third quarter of 2010 and 11% in the first nine months of 2010, compared to the same periods in 2009. Lyrica had a strong operational performance in international markets in the third quarter and first nine months of 2010. In the U.S., revenues have been adversely affected by increased generic competition, as well as managed care pricing and formulary pressures.
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See Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q for a discussion of a recent development concerning patent litigation relating to Lyrica.
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|
●
|
Celebrex, a treatment for the signs and symptoms of osteoarthritis and rheumatoid arthritis and acute pain in adults, experienced a decrease in worldwide revenues of 4% in the third quarter of 2010 and an increase of 2% in the first nine months of 2010, compared to the same periods in 2009. The decrease in worldwide revenues in the third quarter of 2010 was primarily due to the impact of increased generic competition, partially offset by the favorable impact of foreign exchange. Celebrex is supported by continued educational and promotional efforts highlighting its efficacy and safety profile for appropriate patients.
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| ● |
Prevnar/Prevenar 13, launched in Germany in late 2009 and in the U.S. in early 2010 with ongoing launches in other markets during 2010, is our 13-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children. Prevnar/Prevenar 13 had worldwide revenues of $735 million in the third quarter of 2010 and $1.6 billion in the first nine months of 2010. To date, Prevnar/Prevenar 13 has been approved in 72 countries and launched in 45 of those countries.
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●
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Effexor XR (extended release capsules), an antidepressant for treating adult patients with major depressive disorder, GAD, social anxiety disorder and panic disorder, recorded worldwide revenues of $175 million in the third quarter of 2010 and $1.5 billion in the first nine months of 2010. Effexor XR faces generic competition outside the U.S. In addition, in the U.S., pursuant to a 2005 settlement agreement related to certain patent litigation with Wyeth, Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd. (collectively, Teva) were permitted to launch generic versions of Effexor XR in the U.S. beginning July 1, 2010. On June 29, 2010, the FDA approved Teva’s generic version of Effexor XR. Teva commenced shipment of its generic version of Effexor XR on July 1, 2010. This generic competition had, in the third quarter of 2010, and will continue to have a significant adverse impact on our revenues for Effexor XR.
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●
|
Viagra remains the leading treatment for erectile dysfunction and one of the world’s most recognized pharmaceutical brands after more than a decade. Viagra worldwide revenues decreased 2% in the third quarter of 2010 compared to the same period in 2009, due to the launch of generic competition in Spain and Finland in December 2009 and the unfavorable impact of foreign exchange. In the first nine months of 2010, Viagra worldwide revenues increased 6% compared to the same period in 2009. In the U.S., Viagra revenues increased 4% in the third of quarter 2010 and 5% in the first nine months of 2010, compared to the same periods in 2009. Internationally, Viagra revenues decreased 7% (of which 5% was due to operational factors) in the third quarter of 2010 and increased 8% (of which 3% was due to operational factors) in the first nine months of 2010, compared to the same periods in 2009.
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|
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See Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q for a discussion of a recent development concerning patent and product litigation relating to Viagra.
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|
●
|
Xalabrands consists of Xalatan, a prostaglandin, the world’s leading branded agent 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) that is available outside the U.S. Xalatan/Xalacom worldwide revenues decreased 5% in the third quarter of 2010 and increased 4% in the first nine months of 2010, compared to the same periods in 2009. The decrease in revenue in the third quarter of 2010 compared to the third quarter of 2009 was due to the launch of generic latanoprost in Italy in May 2010 and in Japan in July 2010, partially offset by increased demand in the U.S. The increase in revenue in the first nine months of 2010 compared to the first nine months of 2009 was due to higher demand in the U.S., partially offset by the aforementioned generics launches. Additionally, foreign exchange had an unfavorable impact in the third quarter of 2010, and a favorable impact for the first nine months of 2010, compared to the same periods in 2009. We expect to lose exclusivity for Xalatan in the U.S. in March 2011 and for Xalatan and Xalacom in the majority of major European markets in July 2011. We are pursuing a pediatric extension for Xalatan in Europe. If successful, the loss of exclusivity in the majority of major European markets will be postponed by six months to January 2012.
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●
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Norvasc, for treating hypertension, lost exclusivity in the U.S. in March 2007. Norvasc also has experienced patent expirations in other major markets, including Canada in July 2009. Norvasc worldwide revenues decreased 32% in the third quarter of 2010 and 25% in the first nine months of 2010, compared to the same periods in 2009.
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●
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Prevnar/Prevenar (7-valent), our 7-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children, had worldwide revenues of $179 million in the third quarter of 2010 and $1 billion in the first nine months of 2010. Certain markets have transitioned from the use of Prevnar/Prevenar (7-valent) to Prevnar/Prevenar 13 (see discussion above) resulting in lower revenues for Prevnar/Prevenar (7-valent). We expect this trend to continue.
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|
●
|
Zyvox is the world’s best-selling branded agent for the treatment of certain serious Gram-positive pathogens, including Methicillin-Resistant Staphylococcus-Aureus (MRSA). Zyvox worldwide revenues increased 5% in the third quarter of 2010 and 8% in the first nine months of 2010, compared to the same periods in 2009, primarily due to growth in emerging markets and developed markets in Europe. Revenues have been adversely affected by a decrease in the number of patients treated for pneumonia and by increased generic competition in the U.S., as well as competition from recently launched agents in certain high-volume international markets such as the U.K.
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|
●
|
Our Premarin family of products remains the leading therapy to help women address moderate-to-severe menopausal symptoms. It had worldwide revenues of $263 million in the third quarter of 2010 and $779 million in the first nine months of 2010.
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●
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Sutent is for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC), and gastrointestinal stromal tumors (GIST) after disease progression on, or intolerance to, imatinib mesylate. Sutent worldwide revenues increased 4% in the third quarter of 2010 and 15% in the first nine months of 2010, compared to the same periods in 2009. Foreign exchange had an unfavorable impact in the third quarter of 2010 and a favorable impact for the first nine months of 2010 compared to the same periods in 2009. We continue to drive total revenue and prescription growth, supported by cost-effectiveness data and efficacy data in first-line mRCC––including two-year survival data, which represent the first time that overall survival of two years has been seen in the treatment of advanced kidney cancer, as well as through increasing access and healthcare coverage. As of October 3, 2010, Sutent was the best-selling medicine in the world for the treatment of first-line mRCC.
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|
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On July 1, 2010 the FDA approved revised labeling for Sutent, which includes a boxed warning concerning hepatotoxicity and related changes to the warnings and precautions section. In addition, as part of a risk mitigation and communication plan, the revised label includes a Medication Guide that patients will receive when Sutent is dispensed.
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|
|
Pfizer maintains a global safety database, monitoring all sponsored clinical trials and spontaneous adverse event reports. Hepatic failure has been uncommonly observed in clinical trials (0.3%) and post-marketing experience, consistent with the very low rate of hepatic failure observed in the clinical trials of Sutent used to support original registration in 2006. Over 91,000 patients worldwide have been treated with Sutent.
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The risk-benefit profile of Sutent in both mRCC and second-line GIST has been well established through large, randomized clinical trials evaluating its safety and efficacy. Sutent remains an important treatment option for these two difficult-to-treat cancers.
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●
|
Geodon/Zeldox, an atypical antipsychotic, is indicated for the treatment of schizophrenia, as monotherapy for the acute treatment of bipolar manic or mixed episodes, and as an adjunct to lithium or valproate for the maintenance treatment of bipolar disorder. Geodon worldwide revenues increased 4% in the third quarter of 2010 and 7% in the first nine months of 2010, compared to the same periods in 2009, due in part to continued growth in the U.S. antipsychotic market and the recent U.S. approval for adjunctive bipolar maintenance therapy in adults.
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●
|
Detrol/Detrol LA, a muscarinic receptor antagonist, is the most prescribed branded medicine worldwide for overactive bladder. Detrol LA is an extended-release formulation taken once a day. Detrol/Detrol LA worldwide revenues declined 16% in the third quarter of 2010 and 10% in the first nine months of 2010, compared to the same periods in 2009, primarily due to increased competition from other branded medicines.
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●
|
Zosyn/Tazocin, our broad-spectrum intravenous antibiotic, faces generic competition in the U.S. and certain other markets. It had worldwide revenues of $255 million in the third quarter of 2010 and $749 million in the first nine months of 2010.
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●
|
Genotropin, the world’s leading human growth hormone, 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. Genotropin worldwide revenues decreased 9% in the third quarter of 2010 and increased 2% in the first nine months of 2010, compared to the same periods in 2009. The decrease in the third quarter of 2010, compared to the same period in 2009, is primarily due to mandatory price reductions in Japan, higher rebates in the U.S. and the unfavorable impact of foreign exchange. The increase in the first nine months of 2010, compared to the same period in 2009 is primarily due to the favorable impact of foreign exchange.
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●
|
Vfend, as the only branded agent available in intravenous and oral forms, continues to build on its position as the best-selling systemic, antifungal agent worldwide. The global revenues of Vfend continue to be driven by its acceptance as an excellent broad-spectrum agent for treating yeast and molds. Vfend worldwide revenues increased 2% in the third quarter of 2010 and 7% in the first nine months of 2010, compared to the same periods in 2009, primarily due to operational performance. Foreign exchange had an unfavorable impact in the third quarter of 2010 and a favorable impact for the first nine months of 2010, compared to the same periods in 2009.
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|
|
In October 2009, we settled a challenge by Mylan, Inc. (Mylan) and its subsidiary, Matrix Laboratories Limited (Matrix), to four of our patents relating to Vfend by entering into an agreement granting Matrix and another subsidiary of Mylan the right to market voriconazole (generic Vfend) tablets in the U.S. and Brazil beginning in the first quarter of 2011.
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●
|
Protonix, our proton pump inhibitor for gastroesophageal reflux disease had revenues of $203 million in the third quarter of 2010 and $535 million in the first nine months of 2010. We have an exclusive license from Nycomed GmbH to sell Protonix in the U.S., where it faces generic competition as the result of at-risk launches by certain generic manufacturers that began in December 2007.
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●
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Chantix/Champix, the first new prescription treatment to aid smoking cessation in nearly a decade, has been launched in all major markets. Chantix/Champix worldwide revenues increased 5% in the third quarter of 2010 and were relatively flat in the first nine months of 2010, compared to the same periods in 2009. The increase in revenues in the third quarter of 2010 was primarily due to the strong operational performance in international developed markets, partially offset by the impact of changes to the product’s label and other factors especially in the U.S. These factors also impacted Chantix/Champix results in the first nine months of 2010. We are continuing our educational and promotional efforts, which are focused on the Chantix benefit-risk proposition, the significant health consequences of smoking and the importance of the physician-patient dialogue in helping patients quit smoking.
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|
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See Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q for a discussion of a recent development concerning patent litigation relating to Chantix.
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|
●
|
BeneFIX and ReFacto AF/Xyntha are hemophilia products that use state-of-the-art manufacturing to assist patients with this lifelong bleeding disorder. BeneFIX is the only available recombinant factor IX product for the treatment of hemophilia B, while ReFacto AF/Xyntha are recombinant factor VIII products 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 also are indicated for prophylaxis in certain situations, such as surgery. BeneFIX recorded worldwide sales on $156 million in the third quarter of 2010 and $474 million in the first nine months of 2010. ReFacto AF/Xyntha recorded worldwide revenues of $102 million for the third quarter of 2010 and $290 million for the first nine months of 2010.
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●
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Caduet is a single-pill therapy combining Norvasc and Lipitor. Caduet worldwide revenues declined 2% in the third quarter of 2010 and 1% in the first nine months of 2010, compared to the same periods in 2009, primarily due to increased generic competition, as well as an overall decline in U.S. hypertension market volume, partially offset by the favorable impact of foreign exchange.
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●
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Revatio, for the treatment of PAH, had increases in worldwide revenues of 5% in the third quarter of 2010 and 10% in the first nine months of 2010, compared to the same periods in 2009, due in part to increased PAH awareness driving earlier diagnosis and increased therapy days in the U.S. and EU.
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●
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Pristiq was approved for the treatment of Major Depressive Disorder (MDD) in the US in February 2008 and subsequently was approved for that indication in 24 other countries. Pristiq has also been approved for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico and the Philippines. Pristiq recorded world-wide revenues of $118 million in the third quarter of 2010 and $341 million in the first nine months of 2010.
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See Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q for a discussion of a recent development concerning litigation related to Pristiq.
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●
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Alliance revenues worldwide increased 51% in the third quarter of 2010 and 66% in the first nine months of 2010, compared to the same periods in 2009, mainly due to the strong performance of Aricept, Spiriva and Rebif, as well as the inclusion of sales of Enbrel, a legacy Wyeth product, in the U.S. and Canada. We expect to lose exclusivity for Aricept 5mg and 10mg tablets in the U.S. later this year. We expect that the Aricept 23mg tablet will have data exclusivity in the U.S. until July 2013.
|
|
Recent FDA approvals:
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||
|
PRODUCT
|
INDICATION
|
DATE APPROVED
|
|
Prevnar 13 Infant
|
Prevention of invasive pneumococcal disease in infants and young children
|
February 2010
|
|
Pending U.S. new drug applications (NDA) and supplemental filings:
|
||
|
PRODUCT
|
INDICATION
|
DATE SUBMITTED
|
|
Taliglucerase alfa
|
Treatment of Gaucher disease
|
December 2009
|
|
Sutent
|
Pancreatic neuroendocrine tumor
|
December 2009
|
|
Genotropin
|
Adult growth hormone deficiency (Mark VII multidose disposable device)
|
October 2009
|
|
Celebrex
|
Chronic pain
|
August 2009
|
|
Lyrica
|
Generalized anxiety disorder––monotherapy
|
June 2009
|
|
Geodon
|
Treatment of bipolar disorder––pediatric filing
|
October 2008
|
|
Spiriva
|
Respimat device for chronic obstructive pulmonary disease
|
November 2007
|
|
Zmax
|
Treatment of bacterial infections––sustained release––acute otitis media (AOM) and sinusitis––pediatric filing
|
November 2006
|
|
Viviant
|
Osteoporosis treatment and prevention
|
June 2006
|
|
Pristiq
|
Vasomotor symptoms of menopause
|
June 2006
|
|
Vfend
|
Treatment of fungal infections––pediatric filing
|
June 2005
|
|
Thelin
|
Treatment of PAH
|
May 2005
|
|
Regulatory approvals and filings in the EU and Japan:
|
|||
|
PRODUCT
|
DESCRIPTION OF EVENT
|
DATE APPROVED
|
DATE SUBMITTED
|
|
Lyrica
|
Approval in Japan for neuropathic pain
|
October 2010
|
—
|
|
Torisel
|
Approval in Japan for renal cell carcinoma
|
July 2010
|
—
|
|
Genotropin
|
Approval in the EU for adult growth hormone deficiency (Mark VII multidose disposable device)
|
July 2010
|
—
|
|
Viviant
|
Approval in Japan for the treatment of post-menopausal osteoporosis
|
July 2010
|
—
|
|
atorvastatin calcium
|
Approval in the EU for type II variation for atorvastatin calcium (SORTIS and associated names) for pediatric hyperlipidemia/dyslipidemia
|
July 2010
|
—
|
|
tafamidis meglumine
|
Application submitted in the EU for transthyretin amyloid polyneuropathy (ATTR-PN)
|
—
|
July 2010
|
|
Macugen
|
Application submitted in the EU for type II variation for treatment of diabetic macular edema
|
—
|
June 2010
|
|
Genotropin
|
Approval in Japan for adult growth hormone deficiency (Mark VII multidose disposable device)
|
June 2010
|
—
|
|
Xalatan
|
Application submitted in the EU for pediatric glaucoma
|
—
|
April 2010
|
|
Lyrica
|
Approval in Japan for the treatment of pain associated with post-herpetic neuralgia
|
April 2010
|
—
|
|
Revatio
|
Application submitted in the EU for pediatric PAH
|
—
|
February 2010
|
|
Apixaban
|
Application submitted in the EU for prevention of venous thromboembolism
|
—
|
February 2010
|
|
Xalacom
|
Approval in Japan for the treatment of glaucoma
|
January 2010
|
—
|
|
Prevenar 13 Infant
|
Application submitted in Japan for prevention of invasive pneumococcal disease in infants and young children
|
—
|
December 2009
|
|
Sutent
|
Application submitted in the EU for treatment of pancreatic neuroendocrine tumor
|
—
|
December 2009
|
|
Xiapex
|
Application submitted in the EU for treatment of Dupuytren’s contracture
|
—
|
December 2009
|
|
Toviaz
|
Application submitted in Japan for overactive bladder
|
—
|
September 2009
|
|
Late-stage clinical trials for additional uses and dosage forms for in-line products:
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|
|
PRODUCT
|
INDICATION
|
|
Eraxis/Vfend Combination
|
Aspergillosis fungal infections
|
|
Lyrica
|
Epilepsy monotherapy; post-operative pain; central neuropathic pain due to spinal cord injury; peripheral neuropathic pain
|
|
Prevnar/Prevenar 13 Adult
|
Prevention of invasive pneumococcal disease in adults
|
|
Revatio
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Pediatric PAH
|
|
Sutent
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Adjuvant renal cell carcinoma
|
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Torisel
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Renal cell carcinoma
|
|
Zithromax/chloroquine
|
Malaria
|
|
New drug candidates in late-stage development in the U.S.:
|
|
|
CANDIDATE
|
INDICATION
|
|
Apixaban
|
For acute coronary syndrome, the prevention and treatment of venous thromboembolism and prevention of stroke in patients with atrial fibrillation, which is being developed in collaboration with Bristol-Myers Squibb Company (BMS)
|
|
Aprela (Bazedoxifene-conjugated estrogens)
|
A tissue-selective estrogen complex for the treatment of menopausal vasomotor symptoms
|
|
Axitinib
|
Oral and selective inhibitor of vascular endothelial growth factor (VEGF) receptor 1, 2, & 3 for the treatment of advanced renal cell carcinoma
|
|
Bapineuzumab
|
A beta amyloid inhibitor for the treatment of Alzheimer’s disease being developed in collaboration with Janssen Alzheimer Immunotherapy Research & Development, LLC (Janssen AI), a subsidiary of Johnson & Johnson
|
|
Bosutinib
|
An Abl and src kinase inhibitor for the treatment of chronic myelogenous leukemia
|
|
Crizotinib (PF-02341066)
|
An oral ALK and c-Met inhibitor for the treatment of advanced non-small-cell lung cancer
|
|
Dimebon (latrepirdine)
|
A novel mitochondrial protectant and enhancer being developed in collaboration with Medivation, Inc., for the treatment of Alzheimer’s disease and Huntington disease
|
|
Moxidectin
|
Treatment of onchocerciasis (river blindness)
|
|
Neratinib
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A pan-HER inhibitor for the treatment of breast cancer
|
|
PF-0299804
|
A pan-HER tyrosine kinase inhibitor for the treatment of advanced non-small-cell lung cancer
|
|
Tanezumab
|
An anti-nerve growth factor monoclonal antibody for the treatment of pain (on clinical hold)
|
|
Tasocitinib (CP-690,550)
|
A JAK kinase inhibitor for the treatment of rheumatoid arthritis and psoraisis
|
|
●
|
purchase accounting charges of approximately $487 million in the third quarter of 2010 and $2.6 billion in the first nine months of 2010, primarily reflecting the fair value adjustments to inventory acquired from Wyeth in 2009 that was sold in 2010;
|
|
●
|
a write-off of inventory of $212 million (which includes a purchase accounting fair value adjustment of $104 million), primarily related to Biopharmaceutical inventory acquired from Wyeth that became unusable after the acquisition date;
|
|
●
|
the addition of Wyeth’s manufacturing operations; and
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|
●
|
the change in the mix of products and businesses as a result of the Wyeth acquisition.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Transaction costs(a)
|
$ | –– | $ | 19 | $ | 13 | $ | 572 | ||||||||
|
Integration costs(b)
|
231 | 113 | 650 | 242 | ||||||||||||
|
Restructuring charges(c):
|
||||||||||||||||
|
Employee termination costs
|
27 | 36 | 603 | 200 | ||||||||||||
|
Asset impairments
|
174 | 17 | 677 | 108 | ||||||||||||
|
Other
|
67 | 8 | 148 | 84 | ||||||||||||
|
Restructuring charges and certain acquisition-related costs
|
499 | 193 | 2,091 | 1,206 | ||||||||||||
|
Additional depreciation––asset restructuring, recorded in our Condensed
Consolidated Statements of Income as follows(d):
|
||||||||||||||||
|
Cost of sales
|
241 | 7 | 367 | 102 | ||||||||||||
|
Selling, informational and administrative expenses
|
28 | 3 | 190 | 17 | ||||||||||||
|
Research and development expenses
|
26 | –– | 46 | 42 | ||||||||||||
|
Total additional depreciation––asset restructuring
|
295 | 10 | 603 | 161 | ||||||||||||
|
Implementation costs(e)
|
–– | 70 | –– | 249 | ||||||||||||
|
Total
|
$ | 794 | $ | 273 | $ | 2,694 | $ | 1,616 | ||||||||
|
(a)
|
Transaction costs represent external costs directly related to our acquisition of Wyeth and primarily include expenditures for banking, legal, accounting and other similar services. Substantially all of the costs incurred in 2009 were fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial institutions on March 12, 2009 to partially fund our acquisition of Wyeth. The bridge term loan credit agreement was terminated in June 2009 as a result of our issuance of approximately $24.0 billion of senior unsecured notes in the first half of 2009.
|
|
(b)
|
Integration costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems integration.
|
|
(c)
|
Restructuring charges in 2010 are related to the integration of Wyeth. From the beginning of our cost-reduction initiatives in 2005 through October 3, 2010, Employee termination costs represent the expected reduction of the workforce by approximately 46,600 employees, mainly in manufacturing, sales and research, of which approximately 33,400 employees have been terminated as of October 3, 2010. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination. Asset impairments primarily include charges to write down property, plant and equipment to fair value. Other primarily includes costs to exit certain assets and activities.
|
|
(d)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(e)
|
Implementation costs in the three months and nine months ended September 27, 2009 represent external, incremental costs directly related to implementing cost-reduction initiatives prior to our acquisition of Wyeth, and primarily include expenditures related to system and process standardization and the expansion of shared services. For the three months ended September 27, 2009, implementation costs are included in Cost of sales ($16 million), Selling, informational and administrative expenses ($48 million), Research and development expenses ($5 million) and Other deductions––net ($1 million). For the nine months ended September 27, 2009, implementation costs are included in Cost of sales ($42 million), Selling, informational and administrative expenses ($165 million), Research and development expenses ($36 million) and Other deductions––net ($6 million).
|
|
(millions of dollars)
|
Costs
Incurred
2005-2010
|
Activity through
Oct. 3, 2010(a)
|
Accrual as of
Oct. 3, 2010(b)
|
|||||||||
|
Employee termination costs
|
$ | 8,324 | $ | 6,387 | $ | 1,937 | ||||||
|
Asset impairments
|
2,129 | 2,129 | –– | |||||||||
|
Other
|
858 | 754 | 104 | |||||||||
|
Total restructuring charges
|
$ | 11,311 | $ | 9,270 | $ | 2,041 | ||||||
|
(a)
|
Includes adjustments for foreign currency translation.
|
|
(b)
|
Included in Current deferred tax liabilities and other current liabilities ($1.6 billion) and Other noncurrent liabilities ($482 million).
|
|
●
|
higher asset impairment charges of $1.5 billion in the third quarter of 2010 and $1.6 billion in the first nine months of 2010, virtually all related to certain intangible assets acquired as part of our acquisition of Wyeth (see below);
|
|
●
|
higher charges for litigation-related matters of $658 million in the third quarter of 2010 and $756 million in the first nine months of 2010, primarily associated with the additional $701 million (pre-tax) charge for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc. (for additional information, see Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q);
|
|
●
|
higher interest expense of $59 million in the third quarter of 2010 and $570 million in the first nine months of 2010, primarily associated with the $13.5 billion of senior unsecured notes that we issued in March 2009 and the approximately $10.5 billion of senior unsecured notes that we issued in June 2009 to partially finance the acquisition of Wyeth as well as the addition of legacy Wyeth debt; and
|
|
●
|
lower interest income of $71 million in the third quarter of 2010 and $323 million in the first nine months of 2010, primarily due to lower interest rates coupled with lower average investment balances,
|
|
●
|
higher royalty-related income of $123 million in the third quarter of 2010 and $253 million in the first nine months of 2010, primarily due to legacy Wyeth products.
|
|
●
|
higher expenses, incurred as a result of our acquisition of Wyeth, and the mix of jurisdictions in which those expenses were incurred;
|
|
●
|
the expiration of the U.S. research and development tax credit; and
|
|
●
|
the non-recurrence of a tax benefit of $174 million that was recorded in the third quarter of 2009 related to the final resolution of a previously disclosed settlement that resulted in the receipt of information that raised our assessment of the likelihood of prevailing on the technical merits of our tax position;
|
|
●
|
the tax benefit associated with the charge incurred for asbestos litigation (for additional information, see Part II––Other Information; Item 1. Legal Proceedings of this Form 10-Q).
|
|
●
|
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. Beginning in 2010, these metrics derived from Adjusted income account for (i) between 7% and 13% of the target bonus for ELT members and (ii) 33% of the bonus pool made available to ELT members and other members of senior management.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
% Incr./
(Decr.)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
% Incr./
(Decr.)
|
||||||||||||||||||
|
Reported net income attributable to Pfizer Inc.
|
$ | 866 | $ | 2,878 | (70 | ) % | $ | 5,367 | $ | 7,868 | (32 | ) % | ||||||||||||
|
Purchase accounting adjustments––net of tax
|
1,246 | 397 | 214 | 4,933 | 1,167 | * | ||||||||||||||||||
|
Acquisition-related costs––net of tax
|
562 | 87 | * | 1,999 | 524 | * | ||||||||||||||||||
|
Discontinued operations––net of tax
|
5 | (2 | ) | * | 4 | (6 | ) | * | ||||||||||||||||
|
Certain significant items––net of tax
|
1,693 | 101 | * | 1,910 | 824 | 132 | ||||||||||||||||||
|
Adjusted income(a)
|
$ | 4,372 | $ | 3,461 | 26 | $ | 14,213 | $ | 10,377 | 37 | ||||||||||||||
|
(a)
|
The effective tax rate on Adjusted income was 30.2% in the third quarter of 2010, compared to 31.8% in the same period last year. For the first nine months of 2010, the effective tax rate on Adjusted income was 30.7%, compared to 29.9% in the same period last year.
|
|
*
|
Calculation not meaningful.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
|
Oct. 3,
2010
|
Sept. 27,
2009
|
% Incr./
(Decr.)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
% Incr./
(Decr.)
|
|||||||||||||||||||
|
Earnings per common share––diluted:
|
||||||||||||||||||||||||
|
Reported net income attributable to Pfizer Inc. common shareholders(a)
|
$ | 0.11 | $ | 0.43 | (74 | ) % | $ | 0.66 | $ | 1.16 | (43 | ) % | ||||||||||||
|
Purchase accounting adjustments––net of tax
|
0.15 | 0.06 | 150 | 0.61 | 0.17 | 259 | ||||||||||||||||||
|
Acquisition-related costs––net of tax
|
0.07 | 0.01 | * | 0.25 | 0.08 | 213 | ||||||||||||||||||
|
Discontinued operations––net of tax
|
–– | –– | –– | –– | –– | –– | ||||||||||||||||||
|
Certain significant items––net of tax
|
0.21 | 0.01 | * | 0.24 | 0.13 | 85 | ||||||||||||||||||
|
Adjusted net income attributable to Pfizer Inc. common shareholders(a)
|
$ | 0.54 | $ | 0.51 | 6 | $ | 1.76 | $ | 1.54 | 14 | ||||||||||||||
|
(a)
|
Reported and Adjusted diluted earnings per share in the third quarter and first nine months of 2010 were impacted by the increased number of shares outstanding in comparison with the same periods in 2009 resulting primarily from shares issued to partially fund the Wyeth acquisition.
|
|
*
|
Calculation not meaningful.
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
(millions of dollars)
|
Oct. 3,
2010
|
Sept. 27,
2009
|
Oct. 3,
2010
|
Sept. 27,
2009
|
||||||||||||
|
Purchase accounting adjustments:
|
||||||||||||||||
|
Amortization, depreciation and other(a)
|
$ | 1,138 | $ | 564 | $ | 3,926 | $ | 1,671 | ||||||||
|
Cost of sales, primarily related to fair value adjustments of
acquired inventory
|
487 | –– | 2,564 | –– | ||||||||||||
|
In-process research and development charges(b)
|
–– | –– | 74 | 20 | ||||||||||||
|
Total purchase accounting adjustments, pre-tax
|
1,625 | 564 | 6,564 | 1,691 | ||||||||||||
|
Income taxes
|
(379 | ) | (167 | ) | (1,631 | ) | (524 | ) | ||||||||
|
Total purchase accounting adjustments––net of tax
|
1,246 | 397 | 4,933 | 1,167 | ||||||||||||
|
Acquisition-related costs:
|
||||||||||||||||
|
Transaction costs(c)
|
–– | 19 | 13 | 572 | ||||||||||||
|
Integration costs(c)
|
231 | 113 | 650 | 242 | ||||||||||||
|
Restructuring charges(c)
|
268 | –– | 1,428 | –– | ||||||||||||
|
Additional depreciation––asset restructuring(d)
|
295 | –– | 603 | –– | ||||||||||||
|
Total acquisition-related costs, pre-tax
|
794 | 132 | 2,694 | 814 | ||||||||||||
|
Income taxes
|
(232 | ) | (45 | ) | (695 | ) | (290 | ) | ||||||||
|
Total acquisition-related costs––net of tax
|
562 | 87 | 1,999 | 524 | ||||||||||||
|
Total discontinued operations––net of tax
|
5 | (2 | ) | 4 | (6 | ) | ||||||||||
|
Certain significant items:
|
||||||||||||||||
|
Restructuring charges––cost-reduction initiatives(e)
|
–– | 61 | –– | 392 | ||||||||||||
|
Implementation costs––cost-reduction initiatives(f)
|
–– | 80 | –– | 410 | ||||||||||||
|
Certain legal matters(g)
|
701 | 40 | 843 | 170 | ||||||||||||
|
Net interest expense––Wyeth acquisition(h)
|
–– | 299 | –– | 528 | ||||||||||||
|
Asset impairment charges(i)
|
1,468 | –– | 1,668 | 66 | ||||||||||||
|
Inventory write-off(j)
|
212 | –– | 212 | –– | ||||||||||||
|
Other
|
29 | (67 | ) | (34 | ) | (70 | ) | |||||||||
|
Total certain significant items, pre-tax
|
2,410 | 413 | 2,689 | 1,496 | ||||||||||||
|
Income taxes
|
(717 | ) | (312 | ) | (779 | ) | (672 | ) | ||||||||
|
Total certain significant items––net of tax
|
1,693 | 101 | 1,910 | 824 | ||||||||||||
|
Total purchase accounting adjustments, acquisition-related costs,
discontinued operations and certain significant items––net of tax
|
$ | 3,506 | $ | 583 | $ | 8,846 | $ | 2,509 | ||||||||
|
(a)
|
Included primarily in Amortization of intangible assets.
|
|
(b)
|
Included in Acquisition-related in-process research and development charges.
|
|
(c)
|
Included in Restructuring charges and certain acquisition-related costs.
|
|
(d)
|
Amount relates to certain actions taken as a result of our acquisition of Wyeth. Prior to the acquisition of Wyeth on October 15, 2009, additional depreciation for asset restructuring related to our cost-reduction initiatives was classified as a certain significant item and included in implementation costs. For the third quarter of 2010, included in Cost of sales ($241 million) and Selling, informational and administrative expenses ($28 million) and Research and development expenses ($26 million). For the first nine months of 2010, included in Cost of sales ($367 million), Selling, informational and administrative expenses ($190 million) and Research and development expenses ($46 million).
|
|
(e)
|
Represents restructuring charges incurred for our cost-reduction initiatives prior to the acquisition of Wyeth on October 15, 2009. Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 4. Cost-Reduction Initiatives and Acquisition-Related Costs).
|
|
(f)
|
Represents implementation costs incurred for our cost-reduction initiatives prior to the acquisition of Wyeth on October 15, 2009. For the third quarter of 2009, included in Cost of sales ($23 million), Selling, informational and administrative expenses ($51 million), Research and development expenses ($5 million) and Other deductions––net ($1 million). For the first nine months of 2009, included in Cost of sales ($144 million), Selling, informational and administrative expenses ($182 million), Research and development expenses ($78 million) and Other deductions––net ($6 million). The foregoing amounts include additional depreciation for asset restructuring of $10 million in the third quarter of 2009 and $161 million in the first nine months of 2009.
|
|
(g)
|
Included in Other deductions––net. The three-month and nine-month periods ended October 3, 2010 include an additional $701 million charge for asbestos litigation related to our wholly owned subsidiary Quigley Company, Inc. (see also Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q).
|
|
(h)
|
Included in Other deductions––net. Includes interest expense on the senior unsecured notes issued in connection with our acquisition of Wyeth less interest income earned on the proceeds of those notes.
|
|
(i)
|
Included in Other deductions––net. Virtually all asset impairment charges in the three-month and nine-month periods ended October 3, 2010 related to intangible assets acquired as part of our acquisition of Wyeth (see also the “Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 3. Acquisition of Wyeth, Note 5. Other (Income)/Deductions––Net and Note 10B: Goodwill and Other Intangible Assets: Other Intangible Assets).
|
|
(j)
|
Included in Cost of sales (see also the “Costs and Expenses––Cost of Sales” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 9. Inventories).
|
|
(millions of dollars)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
Financial assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 2,176 | $ | 1,978 | ||||
|
Short-term investments
|
20,288 | 23,991 | ||||||
|
Short-term loans
|
774 | 1,195 | ||||||
|
Long-term investments and loans
|
10,344 | 13,122 | ||||||
|
Total financial assets
|
$ | 33,582 | $ | 40,286 | ||||
|
Debt:
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 5,158 | $ | 5,469 | ||||
|
Long-term debt
|
39,010 | 43,193 | ||||||
|
Total debt
|
$ | 44,168 | $ | 48,662 | ||||
|
Net financial liabilities
|
$ | (10,586 | ) | $ | (8,376 | ) | ||
|
(millions of dollars, except ratios and per common share data)
|
Oct. 3,
2010
|
Dec. 31,
2009
|
||||||
|
Cash and cash equivalents and short-term investments and loans(a)
|
$ | 23,238 | $ | 27,164 | ||||
|
Working capital(b)
|
$ | 29,917 | $ | 24,445 | ||||
|
Ratio of current assets to current liabilities
|
2.24:1
|
1.66:1
|
||||||
|
Shareholders’ equity per common share(c)
|
$ | 10.94 | $ | 11.19 | ||||
|
(a)
|
See Notes to Condensed Consolidated Financial Statements––Note 8B. Financial Instruments––Investments in Debt and Equity Securities for a description of investment assets held and also see Note 8F. Financial Instruments––Credit Risk for a description of credit risk related to our financial instruments held.
|
|
(b)
|
Working capital includes assets held for sale of $494 million as of October 3, 2010, and $496 million as of December 31, 2009.
|
|
(c)
|
Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares and shares held by our employee benefit trusts).
|
|
●
|
income tax payments in the first nine months of 2010 of approximately $11.5 billion, primarily associated with certain business decisions executed to finance the Wyeth acquisition;
|
|
●
|
the inclusion of Wyeth operating cash flows in 2010; and
|
|
●
|
the timing of receipts and payments in the ordinary course of business.
|
|
●
|
net proceeds from redemption and sales of investments of $5.6 billion in the first nine months of 2010, which were used for repayment of short-term borrowings and for tax payments in 2010, compared to net purchases of investments of $26.6 billion in the first nine months of 2009, primarily reflecting the investment of proceeds from our issuance of $13.5 billion of senior unsecured notes in the first quarter of 2009 and the proceeds from our issuance of approximately $10.5 billion of senior unsecured notes in the second quarter of 2009.
|
|
●
|
net repayments of borrowings of $4.6 billion in the first nine months of 2010, compared to net borrowings of $21.6 billion in the first nine months of 2009, primarily reflecting the proceeds from our issuance of $13.5 billion of senior unsecured notes in the first quarter of 2009 and our issuance of approximately $10.5 billion of senior unsecured notes in the second quarter of 2009;
|
|
●
|
purchases of common stock of $1.0 billion in the first nine months of 2010, compared to no purchases in the first nine months of 2009; and
|
|
●
|
higher dividend payments in the first nine months of 2010, compared to the first nine months of 2009.
|
|
Full-Year 2010 Guidance
|
||
|
($ billions, except per share amounts)
|
Net Income(a)
|
Diluted EPS(a)
|
|
Adjusted income/diluted EPS(b) guidance
|
~$17.6-$18.0
|
~$2.17-$2.22
|
|
Purchase accounting impacts of transactions completed as of October 3, 2010
|
(6.1)
|
(0.75)
|
|
Acquisition-related costs
|
(2.4-2.8)
|
(0.29-0.34)
|
|
Certain significant items
|
(1.9)
|
(0.24)
|
|
Reported Net income attributable to Pfizer Inc./diluted EPS guidance
|
~$6.8-$7.6
|
~$0.84-$0.94
|
|
(a)
|
Amounts do not assume the completion of any business-development transactions not completed as of October 3, 2010, with the exception of the strategic global agreement with Biocon (see the “Our Strategic Initiatives––Strategy and Recent Transactions” section of this MD&A). Amounts exclude the potential effects of the resolution of litigation-related matters not substantially resolved as of October 3, 2010.
|
|
(b)
|
For an understanding of Adjusted income, see the “Adjusted Income” section of this MD&A.
|
|
Full-Year 2012 Targets
|
||
|
($ billions, except per share amounts)
|
Net Income (a)
|
Diluted EPS (a)
|
|
Adjusted income/diluted EPS(b) targets
|
~$18.3-$19.1
|
~$2.25-$2.35
|
|
Purchase accounting impacts of transactions completed as of October 3, 2010
|
(3.8)
|
(0.47)
|
|
Acquisition-related costs
|
(1.2-1.6)
|
(0.15-0.20)
|
|
Reported Net income attributable to Pfizer Inc./diluted EPS targets
|
~$12.9-$14.1
|
~$1.58-$1.73
|
|
(a)
|
Given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to foreign exchange fluctuations; macroeconomic activity, including inflation; and industry-specific challenges, including changes to government healthcare policy, among others.
|
|
(b)
|
For an understanding of Adjusted income, see the “Adjusted Income” section of this MD&A.
|
|
●
|
Success of research and development activities including, without limitation, the ability to meet anticipated clinical trial completion dates and regulatory submission dates for product candidates;
|
|
●
|
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;
|
|
●
|
Speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
|
|
●
|
Success of external business-development activities, including our ability to satisfy the conditions to closing our merger agreement with King;
|
|
●
|
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 products and product candidates;
|
|
●
|
Ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;
|
|
●
|
Ability to successfully market both new and existing products domestically and internationally;
|
|
●
|
Difficulties or delays in manufacturing;
|
|
●
|
Trade buying patterns;
|
|
●
|
Impact of existing and future legislation and regulatory provisions on product exclusivity;
|
|
●
|
Trends toward managed care and healthcare cost containment;
|
|
●
|
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;
|
|
●
|
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;
|
|
●
|
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;
|
|
●
|
Significant breakdown, infiltration or interruption of our information technology systems and infrastructure;
|
|
●
|
Legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability; patent protection; government investigations; consumer, commercial, securities, environmental and tax issues; ongoing efforts to explore various means for resolving asbestos litigation; and other legal proceedings;
|
|
●
|
Ability to protect our patents and other intellectual property both domestically and internationally;
|
|
●
|
Interest rate and foreign currency exchange rate fluctuations;
|
|
●
|
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 result from the enactment in August 2010 of the Education Jobs and Medicaid Assistance Act of 2010 and that may result from pending and possible future proposals;
|
|
●
|
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 lenders, our customers, our suppliers and counterparties to our foreign-exchange and interest-rate agreements of weak global economic conditions and recent and possible future changes in global financial markets;
|
|
●
|
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
|
|
●
|
Impact of acquisitions, divestitures, restructurings, product recalls and withdrawals and other unusual items, including our ability to realize the projected benefits of our acquisition of Wyeth and of our cost-reduction initiatives.
|
|
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)
|
||||||||||||
|
July 5, 2010, through July 31, 2010
|
35,725 | $ | 14.62 | –– | $ | 4,533,767,070 | ||||||||||
|
August 1, 2010, through August 28, 2010
|
54,336 | $ | 15.96 | –– | $ | 4,533,767,070 | ||||||||||
|
August 29, 2010, through October 3, 2010
|
30,114,874 | $ | 16.69 | 29,945,200 | $ | 4,034,050,592 | ||||||||||
|
Total
|
30,204,935 | $ | 16.68 | 29,945,200 | ||||||||||||
|
(a)
|
On January 23, 2008, we announced that the Board of Directors authorized a $5 billion share-purchase plan (the “2008 Stock Purchase Plan”) to be utilized from time to time. On May 4, 2010, the Company announced that it would resume purchasing its shares as market conditions warrant.
|
|
(b)
|
In addition to the purchases under the 2008 Stock Purchase Plan, these columns reflect the following transactions during the fiscal third quarter of 2010: (i) the surrender to Pfizer of 200,613 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 50,816 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance-contingent share awards and who deferred receipt of such awards, and (iii) the surrender to Pfizer of 8,306 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance-contingent share awards issued to employees.
|
|
1) Exhibit 12
|
-
|
Computation of Ratio of Earnings to Fixed Charges
|
|
2) Exhibit 15
|
-
|
Accountants’ Acknowledgement
|
|
3) Exhibit 31.1
|
-
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
4) Exhibit 31.2
|
-
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
5) Exhibit 32.1
|
-
|
Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
6) Exhibit 32.2
|
-
|
Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
7) Exhibit 101:
|
||
|
EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.LAB
EX-101.PRE
EX-101.DEF
|
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase
XBRL Taxonomy Extension Definition Document
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Pfizer Inc.
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(Registrant)
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Dated: November 12, 2010
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/s/ Loretta V. Cangialosi
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Loretta V. Cangialosi, Senior Vice President and
Controller
(Principal Accounting Officer and
Duly Authorized Officer)
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