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DELAWARE
(State
of Incorporation)
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13-5315170
(I.R.S.
Employer Identification
No.)
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Page
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63
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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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Sept.
27,
2009
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Sept.
28,
2008
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Sept.
27,
2009
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Sept.
28,
2008
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||||||||||||
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||||||||||||||||
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Revenues
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$ | 11,621 | $ | 11,973 | $ | 33,472 | $ | 35,950 | ||||||||
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Costs
and expenses:
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||||||||||||||||
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Cost of sales(a)
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1,789 | 2,122 | 4,953 | 6,397 | ||||||||||||
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Selling, informational and
administrative expenses(a)
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3,282 | 3,523 | 9,508 | 10,878 | ||||||||||||
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Research and development
expenses(a)
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1,632 | 1,885 | 5,032 | 5,642 | ||||||||||||
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Amortization of intangible
assets
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594 | 621 | 1,755 | 2,063 | ||||||||||||
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Acquisition-related in-process
research and development charges
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–– | 13 | 20 | 567 | ||||||||||||
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Restructuring charges and
acquisition-related costs
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193 | 366 | 1,206 | 1,113 | ||||||||||||
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Other (income)/deductions –
net
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160 | 721 | 175 | 221 | ||||||||||||
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Income
from continuing operations before provision for taxes on
income
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3,971 | 2,722 | 10,823 | 9,069 | ||||||||||||
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Provision
for taxes on income
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1,092 | 463 | 2,952 | 1,251 | ||||||||||||
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Income
from continuing operations
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2,879 | 2,259 | 7,871 | 7,818 | ||||||||||||
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Discontinued
operations - net of tax
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2 | 25 | 6 | 38 | ||||||||||||
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Net
income before allocation to noncontrolling interests
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2,881 | 2,284 | 7,877 | 7,856 | ||||||||||||
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Less: Net
income attributable to noncontrolling interests
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3 | 6 | 9 | 18 | ||||||||||||
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Net
income attributable to Pfizer Inc.
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$ | 2,878 | $ | 2,278 | $ | 7,868 | $ | 7,838 | ||||||||
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Earnings
per share – basic:
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||||||||||||||||
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Income from continuing operations
attributable to Pfizer
Inc.
common shareholders
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$ | 0.43 | $ | 0.34 | $ | 1.17 | $ | 1.16 | ||||||||
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Discontinued
operations - net of tax
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–– | — | — | — | ||||||||||||
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Net
income attributable to Pfizer Inc. common shareholders
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$ | 0.43 | $ | 0.34 | $ | 1.17 | $ | 1.16 | ||||||||
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Earnings
per share – diluted:
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||||||||||||||||
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Income from continuing operations
attributable to Pfizer
Inc.
common shareholders
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$ | 0.43 | $ | 0.33 | $ | 1.16 | $ | 1.16 | ||||||||
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Discontinued operations - net of
tax
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–– | 0.01 | — | — | ||||||||||||
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Net income attributable to Pfizer
Inc. common shareholders
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$ | 0.43 | $ | 0.34 | $ | 1.16 | $ | 1.16 | ||||||||
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Weighted-average
shares used to calculate earnings per common share:
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||||||||||||||||
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Basic
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6,730 | 6,718 | 6,727 | 6,730 | ||||||||||||
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Diluted
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6,762 | 6,736 | 6,758 | 6,750 | ||||||||||||
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Cash
dividends paid per common share
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$ | 0.16 | $ | 0.32 | $ | 0.64 | $ | 0.96 | ||||||||
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(a)
Exclusive of amortization of intangible assets, except as disclosed in
Note 10B. Goodwill and
Other Intangible Assets:Other Intangible
Assets.
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(millions
of dollars)
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Sept.
27,
2009*
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Dec.
31,
2008**
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||||||
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Assets
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||||||||
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Cash
and cash equivalents
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$ | 4,234 | $ | 2,122 | ||||
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Short-term
investments
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48,239 | 21,609 | ||||||
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Accounts
receivable, less allowance for doubtful accounts.
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10,552 | 8,958 | ||||||
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Short-term
loans
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791 | 824 | ||||||
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Inventories
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5,058 | 4,381 | ||||||
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Taxes
and other current assets
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4,679 | 5,034 | ||||||
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Assets
held for sale
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231 | 148 | ||||||
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Total current
assets
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73,784 | 43,076 | ||||||
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Long-term
investments and loans
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12,166 | 11,478 | ||||||
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Property,
plant and equipment, less accumulated depreciation
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13,173 | 13,287 | ||||||
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Goodwill
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21,796 | 21,464 | ||||||
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Identifiable
intangible assets, less accumulated amortization
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16,125 | 17,721 | ||||||
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Deferred
taxes and other non-current assets
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4,250 | 4,122 | ||||||
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Total
assets
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$ | 141,294 | $ | 111,148 | ||||
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Liabilities and Shareholders’
Equity
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||||||||
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Short-term
borrowings, including current portion of long-term debt
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$ | 6,954 | $ | 9,320 | ||||
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Accounts
payable
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2,481 | 1,751 | ||||||
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Dividends
payable
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1 | 2,159 | ||||||
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Income
taxes payable
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485 | 656 | ||||||
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Accrued
compensation and related items
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1,678 | 1,667 | ||||||
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Deferred
taxes
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1,816 | 414 | ||||||
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Other
current liabilities
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10,577 | 11,042 | ||||||
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Total current
liabilities
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23,992 | 27,009 | ||||||
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Long-term
debt
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32,402 | 7,963 | ||||||
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Pension
benefit obligations
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4,647 | 4,235 | ||||||
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Postretirement
benefit obligations
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1,605 | 1,604 | ||||||
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Deferred
taxes
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2,419 | 2,959 | ||||||
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Other
taxes payable
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6,843 | 6,568 | ||||||
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Other
non-current liabilities
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3,136 | 3,070 | ||||||
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Total liabilities
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75,044 | 53,408 | ||||||
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Preferred
stock
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64 | 73 | ||||||
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Common
stock
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443 | 443 | ||||||
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Additional
paid-in capital
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70,373 | 70,283 | ||||||
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Employee
benefit trust, at fair value
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(298 | ) | (425 | ) | ||||
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Treasury
stock
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(57,364 | ) | (57,391 | ) | ||||
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Retained
earnings
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54,835 | 49,142 | ||||||
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Accumulated
other comprehensive expense
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(1,896 | ) | (4,569 | ) | ||||
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Total Pfizer Inc. shareholders’
equity
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66,157 | 57,556 | ||||||
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Equity
attributable to noncontrolling interests
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93 | 184 | ||||||
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Total shareholders’
equity
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66,250 | 57,740 | ||||||
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Total liabilities and
shareholders’ equity
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$ | 141,294 | $ | 111,148 | ||||
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Nine
Months Ended
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||||||||
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(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||
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|
||||||||
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Operating Activities
|
||||||||
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Net
income before allocation to noncontrolling interests
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$ | 7,877 | $ | 7,856 | ||||
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Adjustments
to reconcile net income before noncontrolling interests to net
cash
provided
by operating activities:
|
||||||||
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Depreciation
and amortization
|
2,983 | 3,912 | ||||||
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Share-based
compensation expense
|
258 | 263 | ||||||
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Acquisition-related
in-process research and development charges
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20 | 567 | ||||||
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Deferred
taxes from continuing operations
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1,121 | 580 | ||||||
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Other
non-cash adjustments
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25 | 631 | ||||||
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Changes
in assets and liabilities (net of businesses acquired and
divested)
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(522 | ) | (1,544 | ) | ||||
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||||||||
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Net
cash provided by operating activities
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11,762 | 12,265 | ||||||
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||||||||
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Investing Activities
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||||||||
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Purchases
of property, plant and equipment
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(783 | ) | (1,312 | ) | ||||
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Purchases
of short-term investments
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(57,148 | ) | (22,369 | ) | ||||
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Proceeds
from sales and redemptions of short-term investments
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31,747 | 20,642 | ||||||
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Purchases
of long-term investments
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(6,053 | ) | (5,292 | ) | ||||
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Proceeds
from sales and redemptions of long-term investments
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4,824 | 639 | ||||||
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Acquisitions,
net of cash acquired
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–– | (962 | ) | |||||
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Other
investing activities
|
508 | (1,401 | ) | |||||
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||||||||
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Net
cash used in investing activities
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(26,905 | ) | (10,055 | ) | ||||
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||||||||
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Financing Activities
|
||||||||
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Increase
in short-term borrowings, net
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28,473 | 31,035 | ||||||
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Principal
payments on other short-term borrowings, net
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(29,976 | ) | (28,518 | ) | ||||
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Proceeds
from issuances of long-term debt
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23,997 | 605 | ||||||
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Principal
payments on long-term debt
|
(910 | ) | (561 | ) | ||||
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Purchases
of common stock
|
–– | (500 | ) | |||||
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Cash
dividends paid
|
(4,268 | ) | (6,409 | ) | ||||
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Other
financing activities
|
(101 | ) | 41 | |||||
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||||||||
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Net
cash provided by/(used in) financing activities
|
17,215 | (4,307 | ) | |||||
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Effect
of exchange-rate changes on cash and cash equivalents
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40 | (44 | ) | |||||
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Net
increase/(decrease) in cash and cash equivalents
|
2,112 | (2,141 | ) | |||||
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Cash
and cash equivalents at beginning of period
|
2,122 | 3,406 | ||||||
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||||||||
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Cash
and cash equivalents at end of period
|
$ | 4,234 | $ | 1,265 | ||||
|
|
||||||||
|
Supplemental Cash Flow
Information
|
||||||||
|
Cash
paid during the period for:
|
||||||||
|
Income
taxes
|
$ | 1,748 | $ | 1,707 | ||||
|
Interest
|
723 | 541 | ||||||
|
●
|
retain
the purchase method of accounting for acquisitions, but require a number
of changes, including changes in the way assets and liabilities are
recognized in purchase accounting. They also change the recognition of
assets acquired and liabilities assumed arising from contingencies,
require the capitalization of in-process research and development costs at
fair value and require the expensing of acquisition-related costs as
incurred. The adoption of these provisions will impact the accounting for
acquisitions after adoption, including our acquisition of
Wyeth.
|
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●
|
amend
the factors considered in developing renewal or extension assumptions used
to determine the useful life of a recognized intangible asset. Among other
things, in the absence of historical experience, an entity will be
required to consider assumptions used by market participants. The adoption
of these provisions could impact the accounting for acquisitions after
adoption, including our acquisition of
Wyeth.
|
|
●
|
expand
the use of fair value, and related disclosure requirements and specify a
hierarchy of valuation techniques used to develop the fair value measures.
The adoption of these provisions will impact the accounting for
acquisitions after adoption, including our acquisition of Wyeth, and other
events, balances and transactions measured at fair
value.
|
|
●
|
provide
guidance for the accounting, reporting and disclosure of noncontrolling
interests, previously referred to as minority interests. A noncontrolling
interest represents the portion of equity (net assets) in a subsidiary not
attributable, directly or indirectly, to a parent. The adoption of these
provisions resulted in a number of changes to the presentation of our
consolidated financial statements, but the amounts associated with
noncontrolling interests are not significant. The adoption of these
provisions could impact our accounting for acquisitions after adoption
where we do not acquire 100% of the entity, and our accounting for the
deconsolidations of subsidiaries.
|
|
●
|
provide
guidance on determining whether an arrangement constitutes a collaborative
arrangement within the scope of the provisions; how costs incurred and
revenues generated on sales to third parties should be reported in the
income statement; how an entity should characterize payments on the income
statement; and what participants should disclose in the notes to the
financial statements about a collaborative arrangement. Accordingly,
additional disclosures are provided in Note 4. Collaborative
Arrangements.
|
|
●
|
provide
guidance that maintenance deposits paid by a lessee and subsequently
refunded only if a lessee fulfills a maintenance obligation will be
accounted for as a deposit asset.
|
|
●
|
clarify
how to account for certain transactions involving equity method
investments in areas such as: how to determine the initial carrying value
of the investment; how to allocate the difference between the investor’s
carrying value and the investor’s share of the underlying equity of the
investment; how to perform an impairment assessment of underlying
intangibles held by the investee; how to account for the investee’s
issuance of additional shares; and how to account for an investment on the
cost method when it had been previously accounted for under the equity
method. The adoption of these provisions could impact the accounting for
equity method investments after
adoption.
|
|
●
|
clarify
the accounting for certain separately identifiable assets, which an
acquirer does not intend to actively use but intends to hold to prevent
its competitors from obtaining access to them. These provisions require an
acquirer to account for a defensive intangible asset as a separate unit of
accounting, which should be amortized to expense over the period the asset
diminishes in value. The adoption of these provisions could impact the
accounting for acquisitions after adoption, including our acquisition of
Wyeth.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
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Revenues
– Revenues(a)
|
$ | 131 | $ | 143 | $ | 409 | $ | 369 | ||||||||
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Revenues
– Alliance revenues (b)
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692 | 571 | 1,872 | 1,622 | ||||||||||||
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Total
Revenues from collaborative arrangements
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823 | 714 | 2,281 | 1,991 | ||||||||||||
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Cost
of sales (c)
|
(40 | ) | (62 | ) | (131 | ) | (129 | ) | ||||||||
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Selling,
informational and administrative expenses(d)
|
27 | 38 | 24 | 57 | ||||||||||||
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Research
and development expenses(e)
|
(58 | ) | (51 | ) | (302 | ) | (147 | ) | ||||||||
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(a)
|
Represents
sales to our partners of products manufactured by
us.
|
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(b)
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Substantially
all related to amounts earned from our partners under co-promotion
agreements.
|
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(c)
|
Primarily
related to royalties earned by our partners and cost of sales associated
with inventory purchased from our
partners.
|
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(d)
|
Represents
net reimbursements from our partners and reimbursements to our partners
for Selling, informational and administrative expenses
incurred.
|
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(e)
|
Primarily
related to net reimbursements earned by our partners, except that the
first nine months of 2009 also includes a $150 million milestone payment
to one of our partners.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Implementation
costs(a)
|
$ | 80 | $ | 378 | $ | 410 | $ | 1,140 | ||||||||
|
Restructuring
charges(b)
|
61 | 338 | 392 | 1,077 | ||||||||||||
|
Total
costs related to our Pfizer cost-reduction initiatives
|
$ | 141 | $ | 716 | $ | 802 | $ | 2,217 | ||||||||
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(a)
|
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 (income)/deductions -
net ($1 million). For the third quarter of 2008, included in Cost of sales ($172
million), Selling,
informational and administrative expenses ($95 million), Research and development
expenses ($108 million) and Other (income)/deductions -
net ($3 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 (income)/deductions -
net ($6 million). For the first nine months of 2008, included in
Cost of sales
($520 million), Selling,
informational and administrative expenses ($270 million), Research and development
expenses ($348 million) and Other (income)/deductions -
net ($2
million).
|
|
(b)
|
Included
in Restructuring charges
and acquisition-related
costs.
|
|
(millions
of dollars)
|
Costs
Incurred
Through
Sept.
27, 2009
|
Activity
Through
Sept.
27, 2009(a)
|
Accrual
as of
Sept.
27, 2009(b)
|
|||||||||
|
Employee
termination costs
|
$ | 5,350 | $ | 4,245 | $ | 1,105 | ||||||
|
Asset
impairments
|
1,401 | 1,401 | — | |||||||||
|
Other
|
524 | 438 | 86 | |||||||||
|
Total
restructuring charges
|
$ | 7,275 | $ | 6,084 | $ | 1,191 | ||||||
|
(a)
|
Includes
adjustments for foreign currency
translation.
|
|
(b)
|
Included
in Other current
liabilities ($712 million) and Other non-current liabilities
($479
million).
|
|
Three
Months Ended
|
Nine Months Ended | |||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Transaction
costs (a)
|
$ | 19 | $ | –– | $ | 572 | $ | –– | ||||||||
|
Pre-integration
costs and other(b)
|
113 | 28 | 242 | 36 | ||||||||||||
|
Total
acquisition-related costs(c)
|
$ | 132 | $ | 28 | $ | 814 | $ | 36 | ||||||||
|
(a)
|
Transaction
costs include banking, legal, accounting and other costs directly related
to our acquisition of Wyeth. Substantially all of the costs incurred to
date are 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. All bridge term loan commitment fees have been expensed, and we are
no longer subject to the covenants under that agreement (see Note 8D: Financial
Instruments: Long-Term
Debt).
|
|
(b)
|
Pre-integration
costs and other in 2009 primarily represent external, incremental costs of
integration planning that are directly related to our acquisition of Wyeth
and include costs associated with preparing for systems and other
integration activities. 2008 amounts relate to other restructuring
charges.
|
|
(c)
|
Included
in Restructuring charges
and acquisition-related
costs.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Net
income before allocation to noncontrolling interests
|
$ | 2,881 | $ | 2,284 | $ | 7,877 | $ | 7,856 | ||||||||
|
Other
comprehensive income/(expense):
|
||||||||||||||||
|
Currency translation adjustment
and other
|
599 | (1,766 | ) | 2,853 | (1,232 | ) | ||||||||||
|
Net unrealized gains/(losses)
on derivative financial instruments
|
(43 | ) | 13 | (210 | ) | 41 | ||||||||||
|
Net unrealized gains/(losses)
on available-for-sale securities
|
86 | (25 | ) | 312 | (39 | ) | ||||||||||
|
Benefit plan
adjustments
|
(459 | ) | 159 | (282 | ) | 244 | ||||||||||
|
Total other comprehensive
gains/(loss)
|
183 | (1,619 | ) | 2,673 | (986 | ) | ||||||||||
|
Total
comprehensive income before allocation to
noncontrolling
interests
|
3,064 | 665 | 10,550 | 6,870 | ||||||||||||
|
Comprehensive (income)/loss
attributable to
noncontrolling
interests
|
3 | (8 | ) | (11 | ) | (31 | ) | |||||||||
|
Comprehensive
income attributable to Pfizer Inc.
|
$ | 3,067 | $ | 657 | $ | 10,539 | $ | 6,839 | ||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Dec.
31,
2008
|
||||||
|
Selected
financial assets measured at fair value on a recurring basis (a)
:
|
||||||||
|
Trading securities (b)
|
$ | 181 | $ | 190 | ||||
|
Available-for-sale debt securities
(c)
|
50,915 | 30,061 | ||||||
|
Available-for-sale money market
funds
|
7,581 | 398 | ||||||
|
Available-for-sale equity
securities, excluding money market funds (c)
|
252 | 319 | ||||||
|
Derivative financial instruments
in receivable positions (d)
:
|
||||||||
|
Interest rate
swaps
|
370 | 732 | ||||||
|
Foreign currency
swaps
|
670 | 128 | ||||||
|
Foreign currency forward-exchange
contracts
|
489 | 399 | ||||||
|
Total
|
60,458 | 32,227 | ||||||
|
Other
selected financial assets (e):
|
||||||||
|
Held-to-maturity debt
securities, carried at amortized cost (c)
|
3,779 | 2,349 | ||||||
|
Short-term loans, carried at
cost
|
791 | 824 | ||||||
|
Long-term loans, carried at
cost
|
1,194 | 1,568 | ||||||
|
Private equity securities,
carried at cost
|
150 | 182 | ||||||
|
Total
|
5,914 | 4,923 | ||||||
|
Total
selected financial assets
|
$ | 66,372 | $ | 37,150 | ||||
|
Financial
liabilities measured at fair value on a recurring basis (a):
|
||||||||
|
Derivative financial instruments
in a liability position (f):
|
||||||||
|
Interest rate
swaps
|
$ | 8 | $ | 7 | ||||
|
Foreign currency
swaps
|
647 | 153 | ||||||
|
Foreign currency forward-exchange
contracts
|
1,020 | 1,083 | ||||||
|
Total
|
1,675 | 1,243 | ||||||
|
Other
financial liabilities (e) ,
(g):
|
||||||||
|
Short-term borrowings, carried at
historical proceeds, as adjusted (h)
|
6,954 | 9,320 | ||||||
|
Long-term debt, carried at
historical proceeds, as adjusted (i)
|
32,402 | 7,963 | ||||||
|
Total
|
39,356 | 17,283 | ||||||
|
Total
selected financial liabilities
|
$ | 41,031 | $ | 18,526 | ||||
|
(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.
Virtually 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 $159 million as of September 27, 2009
and $87 million as of December 31, 2008 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 based
on Level 3 inputs at September 27, 2009 or December 31,
2008.
|
|
(b)
|
Trading
securities are held in trust for legacy Pharmacia severance
benefits.
|
|
(c)
|
Gross
unrealized gains and losses are not
significant.
|
|
(d)
|
Designated
as hedging instruments except for certain foreign currency contracts used
as offsets, namely, foreign currency swaps with fair values of $159
million and foreign currency forward-exchange contracts with fair values
of $67 million at September 27, 2009; and foreign currency
forward-exchange contracts with fair values of $175 million and foreign
currency swaps with fair values of $32 million at December 31,
2008.
|
|
(e)
|
The
differences between the estimated fair values and carrying values of our
financial assets and liabilities not measured at fair value on a recurring
basis were not significant as of September 27, 2009 or December 31,
2008.
|
|
(f)
|
Designated
as hedging instruments except for certain foreign currency contracts used
as offsets, namely, foreign currency forward-exchange contracts with fair
values of $160 million at September 27, 2009; and foreign currency
forward-exchange contracts with fair values of $836 million and foreign
currency swaps with fair values of $76 million at December 31,
2008.
|
|
(g)
|
The
carrying amounts may include adjustments for discount or premium
amortization or for the effect of interest rate swaps designated as
hedges.
|
|
(h)
|
Includes
foreign currency borrowings with fair values of $1.1 billion at September
27, 2009 and $1.6 billion at December 31, 2008, which are used as hedging
instruments.
|
|
(i)
|
Includes
foreign currency debt with fair values of $2.1 billion at September 27,
2009 and December 31, 2008, which is used as a hedging
instrument.
|
|
●
|
Trading
equity securities - quoted market
prices.
|
|
●
|
Trading
debt securities - observable market interest
rates.
|
|
●
|
Available-for-sale
debt securities - matrix-pricing model using observable market quotes and
credit ratings.
|
|
●
|
Available-for-sale
money market funds - observable
prices.
|
|
●
|
Available-for-sale
equity securities, excluding money market funds - pricing services that
principally use a composite of observable
prices.
|
|
●
|
Derivative
financial instruments (assets and liabilities) - matrix-pricing model
using observable market quotes and credit
ratings.
|
|
●
|
Held-to-maturity
debt securities - matrix-pricing model using observable market quotes and
credit ratings.
|
|
●
|
Short-term
and long-term loans - discounted future cash flows using current rates at
which similar loans would be made to borrowers with similar credit ratings
and for the same remaining
maturities.
|
|
●
|
Private
equity securities – 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 - matrix-pricing model using observable
market quotes and our own credit
rating.
|
|
(millions
of dollars)
|
Sept.
27,
2009
|
Dec.
31,
2008
|
||||||
|
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 3,647 | $ | 1,980 | ||||
|
Short-term
investments
|
48,239 | 21,609 | ||||||
|
Short-term loans
|
791 | 824 | ||||||
|
Long-term investments and
loans
|
12,166 | 11,478 | ||||||
|
Other current assets (a)
|
495 | 404 | ||||||
|
Other non-current assets (b)
|
1,034 | 855 | ||||||
|
Total
|
$ | 66,372 | $ | 37,150 | ||||
|
Liabilities
|
||||||||
|
Short-term
borrowings
|
6,954 | 9,320 | ||||||
|
Other
current liabilities (c)
|
1,102 | 1,119 | ||||||
|
Long-term
debt
|
32,402 | 7,963 | ||||||
|
Other
non-current liabilities (d)
|
573 | 124 | ||||||
|
Total
|
$ | 41,031 | $ | 18,526 | ||||
|
(a)
|
At
September 27, 2009, derivative instruments at fair value comprised of
foreign currency forward-exchange contracts ($489 million) and foreign
currency swaps ($6 million) and, at December 31, 2008, comprised of
foreign currency forward-exchange contracts ($398 million), interest rate
swaps ($4 million), and foreign currency swaps ($2
million).
|
|
(b)
|
At
September 27, 2009, derivative instruments at fair value comprised of
foreign currency swaps ($664 million) and interest rate swaps ($370
million) and, at December 31, 2008, comprised of interest rate swaps ($729
million) and foreign currency swaps ($126
million).
|
|
(c)
|
At
September 27, 2009, derivative instruments at fair value comprised of
foreign currency forward-exchange contracts ($1 billion) and foreign
currency swaps ($82 million) and, at December 31, 2008, comprised of
foreign currency forward-exchange contracts ($1.1 billion) and foreign
currency swaps ($36 million).
|
|
(d)
|
At
September 27, 2009, derivative instruments at fair value comprised of
foreign currency swaps ($565 million) and interest rate swaps ($8 million)
and, at December 31, 2008, comprised of foreign currency swaps ($117
million) and interest rate swaps ($7
million).
|
|
Contractual
Maturity (in years)
|
||||||||||||||||||||
|
(millions
of dollars)
|
Within
1
|
Over
1
to
5
|
Over
5
to
10
|
Over
10
|
Total
as of
Sept.
27,
2009
|
|||||||||||||||
|
Available-for-sale
debt securities:
|
||||||||||||||||||||
|
U.S. government Federal Deposit
Insurance
Corporation
guaranteed debt
|
$ | — | $ | 1,760 | $ | — | $ | — | $ | 1,760 | ||||||||||
|
Western European
and other government debt
|
33,924 | 2,432 | — | — | 36,356 | |||||||||||||||
|
Corporate debt
|
3,071 | 1,914 | — | — | 4,985 | |||||||||||||||
|
Western European and other
government agency debt
|
2,771 | 786 | — | — | 3,557 | |||||||||||||||
|
Federal Home Loan Mortgage
Corporation, Federal
National Mortgage
Association and Government National
Mortgage Association asset-backed
securities
|
200 | 2,995 | — | — | 3,195 | |||||||||||||||
|
Supranational debt
|
328 | 388 | — | — | 716 | |||||||||||||||
|
Other asset-backed
securities
|
220 | 125 | — | — | 345 | |||||||||||||||
|
Certificates of
deposit
|
1 | — | — | — | 1 | |||||||||||||||
|
Held-to-maturity
debt securities:
|
||||||||||||||||||||
|
Certificates of deposit and
other
|
3,775 | 4 | — | — | 3,779 | |||||||||||||||
|
Total
debt securities
|
$ | 44,290 | $ | 10,404 | $ | — | $ | — | $ | 54,694 | ||||||||||
|
Trading
securities
|
181 | |||||||||||||||||||
|
Available-for-sale
money market funds
(a)
|
7,581 | |||||||||||||||||||
|
Available-for-sale
equity securities, excluding money market funds
|
252 | |||||||||||||||||||
|
Total
|
$ | 62,708 | ||||||||||||||||||
|
(a)
|
Consisting
of securities issued by the U.S. government and its agencies or
instrumentalities and reverse repurchase agreements involving the same
investments held.
|
|
(millions
of dollars)
|
Maturity
Date
|
Outstanding
on
Sept.
27,
2009
|
|||||
|
Senior
unsecured notes:
|
|||||||
|
Issued
on March 24, 2009:
|
|||||||
|
Floating
rate notes at the three-month London Interbank Offering Rate (LIBOR),
plus
1.95%
|
March
2011
|
$
|
1,250
|
||||
|
4.45%(a)
|
March
2012
|
3,510
|
|||||
|
5.35%(a)
|
March
2015
|
2,997
|
|||||
|
6.20%(a)
|
March
2019
|
3,247
|
|||||
|
7.20%(a)
|
March
2039
|
2,552
|
|||||
|
Issued on June 3, 2009:
|
|||||||
|
3.625%
euro (b)
|
June
2013
|
2,702
|
|||||
|
4.75%
euro (b)
|
June
2016
|
2,920
|
|||||
|
5.75%
euro (b)
|
June
2021
|
2,919
|
|||||
|
6.50%
U.K. pound
(b)
|
June
2038
|
2,371
|
|||||
|
Total
long-term debt issued in 2009
|
$
|
24,468
|
|||||
|
(a)
|
Instrument
is callable by us at any time at the greater of 100% of the principal
amount or the sum of the present values of the remaining scheduled
payments of principal and interest discounted at the U.S. Treasury rate,
plus 0.50% plus, in each case, accrued and unpaid
interest.
|
|
(b)
|
Instrument
is callable by us at any time at the greater of 100% of the principal
amount or the sum of the present values of the remaining scheduled
payments of principal and interest discounted at a comparable government
bond rate, plus 0.20%, plus accrued and unpaid
interest.
|
|
(millions
of dollars)
|
Total
|
2010
|
2011
|
2012
|
2013
|
After
2013
|
||||||||||||||||||
|
Long-term
debt
|
$ | 32,402 | $ | –– | $ | 2,600 | $ | 3,529 | $ | 2,709 | $ | 23,564 | ||||||||||||
|
●
|
We
defer on the balance sheet the effective portion of the gains or losses on
foreign currency forward-exchange contracts and foreign currency swaps
that are designated as cash flow hedges and reclassify those amounts, as
appropriate, into earnings in the same
period or periods during which the hedged transaction affects
earnings.
|
|
●
|
We
recognize the gains and losses on forward-exchange contracts and foreign
currency swaps that are used to offset the same foreign currency assets or
liabilities immediately into earnings along with the earnings impact of
the items they generally offset. These contracts essentially take the
opposite currency position of that reflected in the month-end balance
sheet to counterbalance the effect of any currency
movement.
|
|
●
|
We
recognize the gain and loss impact on foreign currency swaps designated as
hedges of our net investments in earnings in three ways:
over time–for the periodic net swap payments; immediately–to the extent of
any change in the difference between the foreign exchange spot rate and
forward rate; and upon sale or substantial liquidation of our net
investments–to the extent of change in the foreign exchange spot
rates.
|
|
●
|
We
recognize the gains and losses on interest rate swaps that are designated
as fair value hedges in earnings upon the
recognition of the change in fair value of the hedged risk. We recognize
the offsetting earnings impact of fixed-rate debt attributable to the
hedged risk also in earnings.
|
|
Gains/(Losses)
|
||||||||
|
(millions
of dollars)
|
Three
Months
Ended
Sept.
27, 2009
|
Nine
Months
Ended
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)
|
(2 | ) | (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)
|
185 | 100 | ||||||
|
Reclassified from OCI to OID
(a),
(b)
|
245 | 400 | ||||||
|
Foreign currency forward exchange
contracts
|
||||||||
|
Recognized in OID (a)
|
–– | –– | ||||||
|
Recognized in OCI (a),
(b)
|
(2 | ) | 5 | |||||
|
Reclassified from OCI to OID
(a),
(b)
|
2 | 17 | ||||||
|
Derivative
Financial Instruments in Net Investment Hedge
Relationships
|
||||||||
|
Foreign currency
swaps
|
||||||||
|
Recognized in OID (a)
|
$ | –– | $ | (1 | ) | |||
|
Recognized in OCI (a),
(b)
|
(40 | ) | (1 | ) | ||||
|
Derivative
Financial Instruments Not Designated as Hedges
|
||||||||
|
Foreign currency
swaps
|
||||||||
|
Recognized in OID (a)
|
$ | 3 | $ | 17 | ||||
|
Foreign currency forward-exchange
contracts
|
||||||||
|
Recognized in OID (a)
|
(354 | ) | (795 | ) | ||||
|
Non-Derivative
Financial Instruments Designated as Hedges
|
||||||||
|
Foreign currency short-term
borrowings
|
||||||||
|
Recognized in OID (a)
|
$ | –– | $ | –– | ||||
|
Recognized in OCI (a),
(b)
|
(62 | ) | 26 | |||||
|
Foreign currency long-term
debt
|
||||||||
|
Recognized in OID (a)
|
–– | –– | ||||||
|
Recognized in OCI (a),
(b)
|
(111 | ) | –– | |||||
|
(a)
|
OCI
= Other comprehensive
income /(expense), a balance sheet account. OID = Other (income)/deductions –
net.
|
|
(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/(expense) – 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/(expense) – Currency translation
adjustment.
|
|
(millions
of dollars)
|
Sept.
27,
2009
|
Dec.
31,
2008
|
||||||
|
Finished
goods
|
$ | 2,101 | $ | 2,024 | ||||
|
Work-in-process
|
2,114 | 1,527 | ||||||
|
Raw
materials and supplies
|
843 | 830 | ||||||
|
Total
inventories(a)
|
$ | 5,058 | $ | 4,381 | ||||
|
(a)
|
Certain
amounts of inventories are in excess of one year’s supply. There are no
recoverability issues associated with these quantities, and the amounts
are not significant.
|
|
(millions
of dollars)
|
Pharmaceutical
|
Animal
Health
|
Other
|
Total
|
||||||||||||
|
Balance,
December 31, 2008
|
$ | 21,317 | $ | 129 | $ | 18 | $ | 21,464 | ||||||||
|
Additions
|
–– | –– | –– | –– | ||||||||||||
|
Other(a)
|
312 | 19 | 1 | 332 | ||||||||||||
|
Balance,
September 27, 2009
|
$ | 21,629 | $ | 148 | $ | 19 | $ | 21,796 | ||||||||
|
(a)
|
Primarily
related to the impact of foreign exchange, except that Pharmaceutical also
includes a reclassification of approximately $150 million to Assets held for
sale.
|
|
Sept.
27, 2009
|
Dec.
31, 2008
|
|||||||||||||||||||||||
|
(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
|
$ | 32,312 | $ | (20,040 | ) | $ | 12,272 | $ | 31,484 | $ | (17,673 | ) | $ | 13,811 | ||||||||||
|
Brands
|
1,016 | (513 | ) | 503 | 1,016 | (487 | ) | 529 | ||||||||||||||||
|
License
agreements
|
252 | (95 | ) | 157 | 246 | (78 | ) | 168 | ||||||||||||||||
|
Trademarks
|
125 | (87 | ) | 38 | 118 | (78 | ) | 40 | ||||||||||||||||
|
Other(a)
|
524 | (304 | ) | 220 | 531 | (291 | ) | 240 | ||||||||||||||||
|
Total
|
34,229 | (21,039 | ) | 13,190 | 33,395 | (18,607 | ) | 14,788 | ||||||||||||||||
|
Indefinite-lived
intangible
assets:
|
||||||||||||||||||||||||
|
Brands
|
2,865 | — | 2,865 | 2,860 | — | 2,860 | ||||||||||||||||||
|
Trademarks
|
68 | — | 68 | 70 | — | 70 | ||||||||||||||||||
|
Other
|
2 | — | 2 | 3 | — | 3 | ||||||||||||||||||
|
Total
|
2,935 | — | 2,935 | 2,933 | — | 2,933 | ||||||||||||||||||
|
Total
identifiable
intangible
assets
|
$ | 37,164 | $ | (21,039 | ) | $ | 16,125 | (b) | $ | 36,328 | $ | (18,607 | ) | $ | 17,721 | |||||||||
|
(a)
|
Includes
patents, non-compete agreements, customer contracts and other intangible
assets.
|
|
(b)
|
Decrease
from December 31, 2008 is primarily related to amortization, partially
offset by the impact of foreign
exchange.
|
|
Pension
Plans
|
||||||||||||||||||||||||||||||||
|
U.S.
Qualified
|
U.S. Supplemental
(Non-Qualified)
|
International
|
Postretirement
Plans
|
|||||||||||||||||||||||||||||
|
Sept.
27,
|
Sept.
28,
|
Sept.
27,
|
Sept.
28,
|
Sept.
27,
|
Sept.
28,
|
Sept.
27,
|
Sept.
28,
|
|||||||||||||||||||||||||
|
(millions
of dollars)
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||||||||||
|
For the Three Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service
cost
|
$ | 51 | $ | 59 | $ | 5 | $ | 5 | $ | 46 | $ | 63 | $ | 7 | $ | 10 | ||||||||||||||||
|
Interest
cost
|
116 | 115 | 12 | 9 | 85 | 100 | 30 | 35 | ||||||||||||||||||||||||
|
Expected
return on plan assets
|
(115 | ) | (162 | ) | — | — | (96 | ) | (111 | ) | (6 | ) | (8 | ) | ||||||||||||||||||
|
Amortization
of:
|
||||||||||||||||||||||||||||||||
|
Actuarial
losses
|
51 | 8 | 7 | 7 | 6 | 10 | 4 | 6 | ||||||||||||||||||||||||
|
Prior
service costs/(credits)
|
1 | — | (1 | ) | (1 | ) | –– | 1 | (1 | ) | –– | |||||||||||||||||||||
|
Curtailments
and settlements – net
|
47 | 9 | 2 | 8 | 1 | –– | 2 | –– | ||||||||||||||||||||||||
|
Special
termination benefits
|
5 | 5 | –– | — | 3 | 6 | 2 | 3 | ||||||||||||||||||||||||
|
Net
periodic benefit costs
|
$ | 156 | $ | 34 | $ | 25 | $ | 28 | $ | 45 | $ | 69 | $ | 38 | $ | 46 | ||||||||||||||||
|
For the Nine Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service
cost
|
$ | 162 | $ | 179 | $ | 15 | $ | 17 | $ | 133 | $ | 191 | $ | 22 | $ | 30 | ||||||||||||||||
|
Interest
cost
|
351 | 346 | 37 | 30 | 240 | 300 | 91 | 106 | ||||||||||||||||||||||||
|
Expected
return on plan assets
|
(349 | ) | (487 | ) | –– | — | (268 | ) | (333 | ) | (19 | ) | (26 | ) | ||||||||||||||||||
|
Amortization
of:
|
||||||||||||||||||||||||||||||||
|
Actuarial
losses
|
161 | 24 | 23 | 22 | 18 | 32 | 13 | 21 | ||||||||||||||||||||||||
|
Prior
service costs/(credits)
|
2 | 2 | (2 | ) | (2 | ) | (2 | ) | 1 | (3 | ) | 1 | ||||||||||||||||||||
|
Curtailments
and settlements – net
|
101 | 13 | 15 | 121 | 2 | 4 | 7 | 6 | ||||||||||||||||||||||||
|
Special
termination benefits
|
24 | 21 | –– | — | 5 | 19 | 17 | 11 | ||||||||||||||||||||||||
|
Net
periodic benefit costs
|
$ | 452 | $ | 98 | $ | 88 | $ | 188 | $ | 128 | $ | 214 | $ | 128 | $ | 149 | ||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(in
millions)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
EPS
Numerator - Basic:
|
||||||||||||||||
|
Income from continuing operations
attributable to Pfizer Inc.
|
$ | 2,876 | $ | 2,253 | $ | 7,862 | $ | 7,800 | ||||||||
|
Less: Preferred stock dividends -
net of tax
|
–– | –– | 2 | 2 | ||||||||||||
|
Income from continuing operations
attributable to Pfizer Inc. common
shareholders
|
2,876 | 2,253 | 7,860 | 7,798 | ||||||||||||
|
Discontinued operations - net of
tax
|
2 | 25 | 6 | 38 | ||||||||||||
|
Net income attributable to Pfizer
Inc. common shareholders
|
$ | 2,878 | $ | 2,278 | $ | 7,866 | $ | 7,836 | ||||||||
|
EPS
Denominator - Basic:
|
||||||||||||||||
|
Weighted-average number of common
shares outstanding
|
6,730 | 6,718 | 6,727 | 6,730 | ||||||||||||
|
EPS
Numerator - Diluted:
|
||||||||||||||||
|
Income from continuing operations
attributable to Pfizer Inc. common
shareholders
|
$ | 2,876 | $ | 2,253 | $ | 7,862 | $ | 7,800 | ||||||||
|
Discontinued operations - net of
tax
|
2 | 25 | 6 | 38 | ||||||||||||
|
Net income attributable to Pfizer
Inc. common shareholders
|
$ | 2,878 | $ | 2,278 | $ | 7,868 | $ | 7,838 | ||||||||
|
EPS
Denominator - Diluted:
|
||||||||||||||||
|
Weighted-average number of common
shares outstanding
|
6,730 | 6,718 | 6,727 | 6,730 | ||||||||||||
|
Common share equivalents: stock
options, restricted stock units, stock
issuable under
other employee compensation plans and convertible
preferred
stock
|
32 | 18 | 31 | 20 | ||||||||||||
|
Weighted-average number of common
shares outstanding and common
share
equivalents
|
6,762 | 6,736 | 6,758 | 6,750 | ||||||||||||
|
Stock options that had exercise
prices greater than the average market price
of our common
stock issuable under employee compensation plans (a)
|
406 | 499 | 406 | 499 | ||||||||||||
|
(a)
|
These
common stock equivalents were outstanding during the three months and nine
months ended September 27, 2009 and September 28, 2008, but were not
included in the computation of diluted EPS for those periods because their
inclusion would have had an anti-dilutive
effect.
|
|
●
|
The
Pharmaceutical segment 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.
|
|
●
|
The
Animal Health segment includes products that prevent and treat diseases in
livestock and companion animals.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||||||
|
Revenues
|
||||||||||||||||||||
|
Pharmaceutical
|
$ | 10,677 | $ | 10,976 | $ | 30,842 | $ | 32,933 | ||||||||||||
|
Animal Health
|
678 | 708 | 1,863 | 2,042 | ||||||||||||||||
|
Corporate/Other(a)
|
266 | 289 | 767 | 975 | ||||||||||||||||
|
Total
revenues(b)
|
$ | 11,621 | $ | 11,973 | $ | 33,472 | $ | 35,950 | ||||||||||||
|
Segment
profit/(loss)(c)
|
||||||||||||||||||||
|
Pharmaceutical
|
$ | 5,501 | $ | 5,335 | $ | 15,868 | $ | 15,997 | ||||||||||||
|
Animal Health
|
187 | 192 | 483 | 512 | ||||||||||||||||
|
Corporate/Other(a)
|
(1,717 | ) |
(d)
|
(2,805 | ) |
(f)
|
(5,528 | ) |
(e)
|
(7,440 | ) |
(g)
|
||||||||
|
Total
segment profit/(loss)
|
$ | 3,971 | $ | 2,722 | $ | 10,823 | $ | 9,069 | ||||||||||||
|
(a)
|
Corporate/Other
includes our gelatin capsules business, our contract manufacturing
business and a bulk pharmaceutical chemicals business, and transition
activity associated with our former Consumer Healthcare business (sold in
December 2006). Corporate/Other under
Segment profit/(loss) also
includes interest income/(expense), corporate expenses (e.g., corporate
administration costs), other income/(expense) (e.g., realized gains and
losses attributable to our investments in debt and equity securities),
certain performance-based and all share-based compensation expenses,
significant impacts of purchase accounting for acquisitions,
acquisition-related costs, intangible asset impairments and costs related
to our Pfizer cost-reduction
initiatives.
|
|
(b)
|
For
the three-and nine-months ended September 28, 2008, includes a $217
million reduction to adjust prior years’ liabilities for product
returns.
|
|
(c)
|
Segment profit/(loss)
equals Income
from continuing operations before provision for taxes on
income.
|
|
(d)
|
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
Pfizer cost-reduction initiatives of $141 million; (iii)
acquisition-related costs of $132 million, primarily related to our
acquisition of Wyeth; and (iv) all share-based compensation
expense.
|
|
(e)
|
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 Pfizer cost-reduction initiatives of $802 million; and
(iv) all share-based compensation
expense.
|
|
(f)
|
For
the three months ended September 28, 2008, Corporate/Other
includes: (i) charges associated with the resolution of certain
litigation involving our non-steroidal anti-inflammatory (NSAID) pain
medicines of approximately $900 million; (ii) restructuring charges and
implementation costs associated with our Pfizer cost-reduction initiatives
of $716 million; (iii) significant impacts of purchase accounting for
acquisitions of $604 million, including acquired in-process research and
development, intangible asset amortization and other charges; (iv) all
share-based compensation expense; (v) other restructuring costs of $28
million; and (vi) transition activity associated with our former Consumer
Healthcare business ($9 million).
|
|
(g)
|
For
the nine months ended September 28, 2008, Corporate/Other
includes: (i) significant impacts of purchase accounting for acquisitions
of $2.5 billion, including acquired in-process research and development,
intangible asset amortization and other charges; (ii) restructuring
charges and implementation costs associated with our Pfizer cost-reduction
initiatives of $2.2 billion; (iii) charges associated with the resolution
of certain NSAID litigation of approximately $900 million; (iv) all
share-based compensation expense; (v) other restructuring costs of $36
million; and (vi) transition activity associated with our former Consumer
Healthcare business ($3 million
income).
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
Pharmaceutical:
|
||||||||||||||||||||||||
|
Cardiovascular and metabolic
diseases
|
$ | 4,024 | $ | 4,537 | (11 | ) % | $ | 11,805 | $ | 13,498 | (13 | ) % | ||||||||||||
|
Central nervous system
disorders
|
1,504 | 1,556 | (3 | ) | 4,314 | 4,426 | (3 | ) | ||||||||||||||||
|
Arthritis and
pain
|
684 | 768 | (11 | ) | 1,946 | 2,279 | (15 | ) | ||||||||||||||||
|
Infectious and respiratory
diseases
|
877 | 989 | (11 | ) | 2,586 | 2,920 | (11 | ) | ||||||||||||||||
|
Urology
|
773 | 820 | (6 | ) | 2,254 | 2,369 | (5 | ) | ||||||||||||||||
|
Oncology
|
575 | 645 | (11 | ) | 1,657 | 1,932 | (14 | ) | ||||||||||||||||
|
Ophthalmology
|
444 | 459 | (3 | ) | 1,261 | 1,316 | (4 | ) | ||||||||||||||||
|
Endocrine
disorders
|
293 | 294 | (1 | ) | 805 | 857 | (6 | ) | ||||||||||||||||
|
All other
|
811 | 337 | 140 | 2,342 | 1,714 | 37 | ||||||||||||||||||
|
Alliance
revenues
|
692 | 571 | 21 | 1,872 | 1,622 | 15 | ||||||||||||||||||
|
Total
Pharmaceutical
|
10,677 | 10,976 | (3 | ) | 30,842 | 32,933 | (6 | ) | ||||||||||||||||
|
Animal
Health
|
678 | 708 | (4 | ) | 1,863 | 2,042 | (9 | ) | ||||||||||||||||
|
Other
|
266 | 289 | (8 | ) | 767 | 975 | (21 | ) | ||||||||||||||||
|
Total revenues
|
$ | 11,621 | $ | 11,973 | (3 | ) | $ | 33,472 | $ | 35,950 | (7 | ) | ||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
United
States(a)
|
$ | 4,816 | $ | 4,901 | (2 | ) % | $ | 14,309 | $ | 15,161 | (6 | ) % | ||||||||||||
|
Europe(b)
|
3,555 | 3,847 | (8 | ) | 9,860 | 11,205 | (12 | ) | ||||||||||||||||
|
Japan/Asia(c)
|
1,864 | 1,779 | 5 | 5,438 | 5,282 | 3 | ||||||||||||||||||
|
Canada/Latin
America/AFME(d)
|
1,386 | 1,446 | (4 | ) | 3,865 | 4,302 | (10 | ) | ||||||||||||||||
|
Total revenues
|
$ | 11,621 | 11,973 | (3 | ) | $ | 33,472 | $ | 35,950 | (7 | ) | |||||||||||||
|
(a)
|
Includes
operations in Puerto Rico.
|
|
(b)
|
Includes
France, Italy, Spain, Germany, the U.K., Ireland, Northern Europe and
Central-South Europe.
|
|
(c)
|
Includes
Japan, Australia, Korea, China, Taiwan, Thailand, Singapore and
India.
|
|
(d)
|
Includes Canada, South America, Central America, Mexico,
Africa and the Middle East.
|
|
(In
millions, except per share amounts)
|
Conversion
Calculation
|
Fair
Value
|
Form
of
Consideration
|
||||||
|
Wyeth
common stock outstanding as of the acquisition date
|
1,339.6 | ||||||||
|
Multiplied
by Pfizer’s stock price as of the acquisition date multiplied by
the
exchange
ratio of 0.985 ($17.66(a)
x 0.985)
|
$ | 17.40 | $ | 23,303 |
Pfizer
common
stock (a),
(b)
|
||||
|
Wyeth
common stock outstanding as of the acquisition date
|
1,339.6 | ||||||||
|
Multiplied
by cash consideration per common share outstanding
|
$ | 33.00 | 44,208 |
Cash
|
|||||
|
Wyeth
stock options cancelled for a cash payment(c)
|
405 |
Cash
|
|||||||
|
Wyeth
restricted stock/restricted stock units and other equity-based
awards
cancelled
for a cash payment
|
320 |
Cash
|
|||||||
|
Total
fair value of consideration transferred
|
$ | 68,236 | |||||||
|
(a)
|
The
fair value of Pfizer’s common stock used in the conversion calculation
represents the closing market price of Pfizer’s common stock on the
acquisition date.
|
|
(b)
|
Approximately
1.3 billion shares of Pfizer common stock were issued to former Wyeth
shareholders.
|
|
(c)
|
Each
Wyeth stock option, whether or not vested and exercisable on the
acquisition date, was cancelled for a cash payment equal to the excess of
the per-share value of the merger consideration (on the basis of the
volume-weighted average of the per-share price of Pfizer common stock on
the NYSE Transaction Reporting System for the five consecutive trading
days ending two days prior to the acquisition date) over the per-share
exercise price of the Wyeth stock
option.
|
|
●
|
Overview of Our Performance
and Operating Environment. This section, beginning on page 28,
provides information about the following: our business; our performance
during the third quarter and first nine months of 2009; our operating
environment; our strategic initiatives; and our cost-reduction
initiatives.
|
|
●
|
Revenues. This section,
beginning on page 34, provides an analysis of our products and revenues
for the three- and nine- month periods ended September 27, 2009 and
September 28, 2008, 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, on page 46, provides a discussion of items
impacting our tax provision for the periods
presented.
|
|
●
|
Adjusted Income. This
section, beginning on page 46, provides a discussion of an alternative
view of performance used by
management.
|
|
●
|
Financial Condition, Liquidity
and Capital Resources. This section, beginning on page 50, provides
an analysis of our balance sheets as of September 27, 2009 and December
31, 2008 and cash flows for the first nine months of 2009 and 2008, as
well as a discussion of our outstanding debt and commitments that existed
as of September 27, 2009, and December 31, 2008. Included in the
discussion of outstanding debt is a discussion of the amount of financial
capacity available to help fund our future
activities.
|
|
●
|
Outlook. This section,
beginning on page 54, provides a discussion of our expectations for
full-year 2009, among other things.
|
|
●
|
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)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
Revenues
|
$ | 11,621 | $ | 11,973 | (3 | ) % | $ | 33,472 | $ | 35,950 | (7 | ) % | ||||||||||||
|
|
||||||||||||||||||||||||
|
Cost
of sales
|
1,789 | 2,122 | (16 | ) | 4,953 | 6,397 | (23 | ) | ||||||||||||||||
|
%
of revenues
|
15.4 | % | 17.7 | % | 14.8 | % | 17.8 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Selling,
informational and administrative expenses
|
3,282 | 3,523 | (7 | ) | 9,508 | 10,878 | (13 | ) | ||||||||||||||||
|
%
of revenues
|
28.2 | % | 29.4 | % | 28.4 | % | 30.3 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Research
and development expenses
|
1,632 | 1,885 | (13 | ) | 5,032 | 5,642 | (11 | ) | ||||||||||||||||
|
%
of revenues
|
14.0 | % | 15.7 | % | 15.0 | % | 15.7 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Amortization
of intangible assets
|
594 | 621 | (4 | ) | 1,755 | 2,063 | (15 | ) | ||||||||||||||||
|
%
of revenues
|
5.1 | % | 5.2 | % | 5.2 | % | 5.7 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Acquisition-related
in-process research and development charges
|
–– | 13 | (100 | ) | 20 | 567 | (96 | ) | ||||||||||||||||
|
%
of revenues
|
–– | % | 0.1 | % | 0.1 | % | 1.6 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Restructuring
charges and acquisition-related costs
|
193 | 366 | (47 | ) | 1,206 | 1,113 | 8 | |||||||||||||||||
|
%
of revenues
|
1.7 | % | 3.1 | % | 3.6 | % | 3.1 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Other
(income)/deductions - net
|
160 | 721 | (78 | ) | 175 | 221 | (21 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Income
from continuing operations before provision for taxes on
income
|
3,971 | 2,722 | 46 | 10,823 | 9,069 | 19 | ||||||||||||||||||
|
%
of revenues
|
34.2 | % | 22.7 | % | 32.3 | % | 25.2 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Provision
for taxes on income
|
1,092 | 463 | 136 | 2,952 | 1,251 | 136 | ||||||||||||||||||
|
Effective
tax rate
|
27.5 | % | 17.0 | % | 27.3 | % | 13.8 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Income
from continuing operations
|
2,879 | 2,259 | 27 | 7,871 | 7,818 | 1 | ||||||||||||||||||
|
%
of revenues
|
24.8 | % | 18.9 | % | 23.5 | % | 21.7 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Discontinued
operations - net of tax
|
2 | 25 | (90 | ) | 6 | 38 | (84 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Net
income before allocation to noncontrolling interests
|
2,881 | 2,284 | 26 | 7,877 | 7,856 | –– | ||||||||||||||||||
|
%
of revenues
|
24.8 | % | 19.1 | % | 23.5 | % | 21.9 | % | ||||||||||||||||
|
Less:
Net income attributable to
noncontrolling interests
|
3 | 6 | (44 | ) | 9 | 18 | (49 | ) | ||||||||||||||||
|
Net
income attributable to Pfizer Inc.
|
$ | 2,878 | $ | 2,278 | 26 | $ | 7,868 | $ | 7,838 | –– | ||||||||||||||
|
%
of revenues
|
24.8 | % | 19.0 | % | 23.5 | % | 21.8 | % | ||||||||||||||||
|
Earnings
per common share - basic:
|
||||||||||||||||||||||||
|
Income
from continuing operations attributable to
Pfizer
Inc.
common shareholders
|
$ | 0.43 | $ | 0.34 | 26 | $ | 1.17 | $ | 1.16 | 1 | ||||||||||||||
|
Discontinued
operations - net of tax
|
–– | — | — | –– | — | –– | ||||||||||||||||||
|
Net
income attributable to Pfizer Inc. common
shareholders
|
$ | 0.43 | $ | 0.34 | 26 | $ | 1.17 | $ | 1.16 | 1 | ||||||||||||||
|
Earnings
per common share - diluted:
|
||||||||||||||||||||||||
|
Income
from continuing operations attributable to
Pfizer
Inc.
common shareholders
|
$ | 0.43 | $ | 0.33 | 30 | $ | 1.16 | $ | 1.16 | –– | ||||||||||||||
|
Discontinued
operations - net of tax
|
–– | 0.01 | (100 | ) | –– | — | –– | |||||||||||||||||
|
Net
income attributable to Pfizer Inc. common
shareholders
|
$ | 0.43 | $ | 0.34 | 26 | $ | 1.16 | $ | 1.16 | –– | ||||||||||||||
|
|
||||||||||||||||||||||||
|
Cash
dividends paid per common share
|
$ | 0.16 | $ | 0.32 | $ | 0.64 | $ | 0.96 | ||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27, 2009 vs.
Sept.
28, 2008
Increase/
(decrease)
|
%
Change
|
Sept.
27, 2009 vs.
Sept.
28, 2008
Increase/
(decrease)
|
%
Change
|
||||||||||||
|
Lipitor(a)
|
$ | (289 | ) | (9 | ) % | $ | (996 | ) | (11 | ) % | ||||||
|
Norvasc(b)
|
(74 | ) | (13 | ) | (215 | ) | (13 | ) | ||||||||
|
Camptosar(b)
|
(40 | ) | (33 | ) | (175 | ) | (39 | ) | ||||||||
|
Chantix/Champix(c)
|
(27 | ) | (15 | ) | (142 | ) | (21 | ) | ||||||||
|
Zyrtec/Zyrtec
D(b)
|
–– | –– | (125 | ) | (100 | ) | ||||||||||
|
Celebrex
|
(23 | ) | (4 | ) | (111 | ) | (6 | ) | ||||||||
|
Viagra
|
(43 | ) | (8 | ) | (89 | ) | (6 | ) | ||||||||
|
Detrol/Detrol
LA
|
(15 | ) | (5 | ) | (56 | ) | (6 | ) | ||||||||
|
Xalatan/Xalacom
|
(14 | ) | (3 | ) | (53 | ) | (4 | ) | ||||||||
|
Sutent
|
20 | 9 | 44 | 7 | ||||||||||||
|
Revatio
|
16 | 18 | 78 | 33 | ||||||||||||
|
Lyrica
|
33 | 5 | 149 | 8 | ||||||||||||
|
Alliance
revenues
|
121 | 21 | 250 | 15 | ||||||||||||
|
Animal
Health
|
(30 | ) | (4 | ) | (179 | ) | (9 | ) | ||||||||
|
(a)
|
Lipitor
was unfavorably impacted primarily by foreign exchange, as well as
competitive pressures and other
factors.
|
|
(b)
|
Zyrtec/Zyrtec
D lost U.S. exclusivity in late January 2008, at which time we ceased
selling this product. Camptosar lost U.S. exclusivity in February 2008 and
in Europe in July 2009. Norvasc lost exclusivity in Japan in July
2008.
|
|
(c)
|
Chantix/Champix
has been negatively impacted by changes to its label in 2008 and
additional label changes in July 2009 (see “Revenues – Pharmaceutical –
Selected Product Descriptions” section of this
MD&A).
|
|
●
|
the
after-tax charge of $640 million resulting from agreements to resolve
certain litigation involving the Company’s non-steroidal
anti-inflammatory (NSAID) pain medicines in the year-ago
quarter;
|
|
●
|
lower
costs associated with implementing our Pfizer cost reduction
initiatives;
|
|
●
|
savings
related to our Pfizer cost-reduction initiatives;
and
|
|
●
|
lower
acquisition-related in-process research and development charges of $20
million in the first nine months of 2009 compared to $567 million in the
first nine months of 2008;
|
|
●
|
the
decrease in revenues reflecting, in particular, the unfavorable impact of
foreign exchange;
|
|
●
|
the
increase in the effective tax rate, net of a $174 million favorable income
tax adjustment in the third quarter of 2009, attributable mainly to
increased tax costs associated with certain business decisions executed to
finance the acquisition of Wyeth as well as the non-recurrence of
favorable income tax adjustments that were recorded during the first nine
months of 2008;
|
|
●
|
higher
interest expense, mainly due to the issuance of approximately $24 billion
in senior unsecured notes in the first half of 2009 to partially finance
the acquisition of Wyeth, as well as lower interest income;
and
|
|
●
|
costs
incurred in connection with the Wyeth
acquisition.
|
|
●
|
In
the first quarter of 2009, we entered into a five-year agreement with
Bausch & Lomb to co-promote prescription pharmaceuticals in the U.S.
for the treatment of ophthalmic conditions. The agreement covers
prescription ophthalmic pharmaceuticals, including our Xalatan product and
Bausch & Lomb’s Alrex®, Lotemax® and Zylet® products, as well as
Bausch & Lomb’s investigational anti-infective eye drop, besifloxacin
ophthalmic suspension, 0.6%, which is currently under review by the U.S.
Food and Drug Administration (FDA).
|
|
●
|
In
the second quarter of 2008, we acquired Encysive Pharmaceuticals Inc.
(Encysive), a biopharmaceutical company whose main asset is Thelin, which
is used for the treatment of pulmonary arterial hypertension. The cost of
acquiring Encysive, through a tender offer and subsequent merger, was
approximately $200 million, including transaction costs. Upon our
acquisition of Encysive, Encysive's change of control repurchase
obligations under its outstanding $130 million 2.5% convertible notes were
triggered and, as a result, Encysive repurchased the convertible notes in
consideration for their par value plus accrued interest in June 2008. In
addition, in the second quarter of 2008, we acquired Serenex, Inc.
(Serenex), a privately held biotechnology company, whose main asset is
SNX-5422, an oral Heat Shock Protein 90 (Hsp90) for the potential
treatment of solid tumors and hematological malignancies and an extensive
Hsp90 inhibitor compound library, which has potential uses in treating
cancer, inflammatory and neurodegenerative diseases. In connection with
these acquisitions, through third-quarter 2008, we recorded approximately
$170 million in Acquisition-related in-process
research and development charges and approximately $450 million in
intangible assets.
|
|
●
|
In
the first quarter of 2008, we acquired CovX, a privately held
biotherapeutics company specializing in preclinical oncology and metabolic
research and the developer of a biotherapeutics technology platform. Also
in the first quarter of 2008, we acquired all the outstanding shares of
Coley Pharmaceutical Group, Inc. (Coley), a biopharmaceutical company
specializing in vaccines and drug candidates designed to fight cancers,
allergy and asthma disorders, and autoimmune diseases, for approximately
$230 million. In connection with these and two smaller acquisitions
related to Animal Health, we recorded approximately $398 million in Acquisition-related in-process
research and development charges in the first nine months of 2008.
In the first nine months of 2009, we resolved a contingency associated
with CovX and recorded $20 million in Acquisition-related in-process
research and development
charges.
|
|
●
|
On
October 15, 2009 (the acquisition date), we acquired all of the
outstanding equity of Wyeth in a cash-and-stock transaction, valued at
approximately $68 billion, in which each share of Wyeth common stock
outstanding, with certain limited exceptions, was cancelled and converted
into the right to receive $33.00 in cash without interest and 0.985 of a
share of Pfizer common stock. The stock component was valued at $17.40 per
share of Wyeth common stock based on the closing market price of Pfizer’s
common stock on the acquisition date, resulting in a total merger
consideration value of $50.40 per share of Wyeth common stock. While Wyeth
is now a wholly owned subsidiary of Pfizer, the merger of local Pfizer and
Wyeth entities may be pending or delayed in various jurisdictions and
integration in these jurisdictions is subject to completion of various
local legal and regulatory obligations. We have taken certain actions and
incurred certain costs associated with the transaction prior to the
acquisition date that are reflected in our financial statements. However,
the assets acquired and liabilities assumed from Wyeth, the consideration
paid to acquire Wyeth, as well as the results of Wyeth’s operations, are
not reflected in our Condensed Consolidated Financial Statements as of and
for the three and nine month periods ended September 27,
2009.
|
|
●
|
On
April 16, 2009, we announced that we entered into an agreement with
GlaxoSmithKline plc (GSK) to create a new company focused solely on
research, development and commercialization of HIV
medicines. The transaction closed on October 30, 2009 and the
new company, ViiV Healthcare Limited (ViiV) began operations on November
2, 2009. We and GSK have contributed or will contribute certain
product and pipeline assets to the new company. ViiV has a broad product
portfolio of 11 marketed products, including innovative leading therapies
such as Combivir
and Kivexa
products and
Selzentry/Celsentri
(maraviroc). ViiV has a pipeline of six innovative and
targeted medicines, including four compounds in Phase 2
development. ViiV has contracted research and development
(R&D) and manufacturing services directly from GSK and us and has also
entered into a new research alliance agreement with GSK and us. Under this
new alliance, ViiV will invest in our and GSK’s programs for discovery
research and development into HIV medicines. ViiV has exclusive
rights of first negotiation in relation to any new HIV-related medicines
developed by either GSK or us. We initially hold a 15% equity
interest and GSK holds an 85% equity interest. The equity
interests will be adjusted in the event that specified sales and
regulatory milestones are achieved. Our equity interest in ViiV could vary
from 9% to 30.5%, and GSK’s equity interest could vary from 69.5% to 91%,
depending upon the milestones achieved with respect to the original
pipeline assets contributed by us and by GSK to ViiV. Each company may
also be entitled to preferential dividend payments to the extent that
specific sales thresholds are met in respect of the marketed products and
pipeline assets originally contributed. We will account for our interest
in ViiV as an equity method
investment.
|
|
●
|
the
closing of duplicative facilities and other site rationalization actions
company-wide, including research and development facilities, manufacturing
plants, sales offices and other corporate
facilities;
|
|
●
|
workforce
reductions and other organizational
changes;
|
|
●
|
the
increased use of shared services;
and
|
|
●
|
procurement
savings.
|
|
●
|
Creating a More Agile and
Productive Organization—In January 2009, we announced that we plan
to reduce our global research staff. We expect these reductions, which are
part of the planned 10% total workforce reduction discussed above, will be
completed during 2009.
|
|
●
|
Supply Network Transformation - We are
transforming our global manufacturing network into a global strategic
supply network, consisting of our internal network of plants together with
strategic external manufacturers, and including purchasing, packaging and
distribution. As of the end of the third quarter of 2009, we have reduced
our internal network of plants from 93 in 2003 to 43, which includes the
acquisition of seven plants and the sites sold in 2006 as part of our
Consumer Healthcare business. We plan to reduce our internal network of
plants, without consideration of plants acquired in the Wyeth acquisition,
around the world to 41, resulting in a more focused, streamlined and
competitive manufacturing operation, with less than 50% of our former
internal plants and more than 53% fewer manufacturing employees, compared
to 2003. As part of the transformation to a global strategic supply
network, we currently expect to increase outsourced manufacturing from
approximately 24% of our products, on a cost basis, to approximately 30%
over the next two years, without consideration of products acquired in the
Wyeth acquisition.
|
|
●
|
Reorganization of our Field
Force - As part of Pfizer’s overall restructuring into smaller,
more focused business units, we have changed our global field force
operations to enable us to adapt to changing market dynamics and respond
to local customer needs more quickly and with more flexibility. This
process, which began in 2007, is generating savings from de-layering,
eliminating duplicative work, and utilizing our sales representatives more
efficiently through targeted deployment, offset modestly by increased
investment in certain emerging markets. Between 2004 and the end of the
third quarter of 2009, we reduced our global field force by approximately
21%, with approximately 19% of the total reductions occurring since the
beginning of 2007.
|
|
%
Change in Revenues
|
||||||||||||||||||||||||||||||||||||||
|
World-
|
Inter-
|
|||||||||||||||||||||||||||||||||||||
|
Worldwide
|
U.S.
|
International
|
wide
|
U.S.
|
national
|
|||||||||||||||||||||||||||||||||
|
Sept.
27,
|
Sept.
28,
|
Sept.
27,
|
Sept.
28,
|
Sept.
27,
|
Sept.
28,
|
|||||||||||||||||||||||||||||||||
|
(millions
of dollars)
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
09/08 | 09/08 | 09/08 | |||||||||||||||||||||||||||||
|
Three Months Ended:
|
||||||||||||||||||||||||||||||||||||||
|
Pharmaceutical
|
$ | 10,677 | $ | 10,976 | $ | 4,448 | $ | 4,518 | $ | 6,229 | $ | 6,458 | (3 | ) | (2 | ) | (4 | ) | ||||||||||||||||||||
|
Animal
Health
|
678 | 708 | 294 | 303 | 384 | 405 | (4 | ) | (3 | ) | (5 | ) | ||||||||||||||||||||||||||
|
Other
|
266 | 289 | 74 | 80 | 192 | 209 | (8 | ) | (8 | ) | (8 | ) | ||||||||||||||||||||||||||
|
Total
revenues
|
$ | 11,621 | $ | 11,973 | $ | 4,816 | $ | 4,901 | $ | 6,805 |
(a)
|
$ | 7,072 |
(a)
|
(3 | ) | (2 | ) | (4 | ) | ||||||||||||||||||
|
Nine Months Ended:
|
||||||||||||||||||||||||||||||||||||||
|
Pharmaceutical
|
$ | 30,842 | $ | 32,933 | $ | 13,347 | $ | 14,024 | $ | 17,495 | $ | 18,909 | (6 | ) | (5 | ) | (7 | ) | ||||||||||||||||||||
|
Animal
Health
|
1,863 | 2,042 | 749 | 812 | 1,114 | 1,230 | (9 | ) | (8 | ) | (9 | ) | ||||||||||||||||||||||||||
|
Other
|
767 | 975 | 213 | 325 | 554 | 650 | (21 | ) | (34 | ) | (15 | ) | ||||||||||||||||||||||||||
|
Total
revenues
|
$ | 33,472 | $ | 35,950 | $ | 14,309 | $ | 15,161 | $ | 19,163 |
(b)
|
$ | 20,789 |
(b)
|
(7 | ) | (6 | ) | (8 | ) | ||||||||||||||||||
|
(a)
|
Includes
revenues from Japan of $968 million (8.3% of total revenues) for the third
quarter of 2009, and $899 million (7.5% of total revenues) for the third
quarter of 2008.
|
|
(b)
|
Includes
revenues from Japan of $3.0 billion (8.9% of total revenues) for the first
nine months of 2009, and $2.7 billion (7.5% of total revenues) for the
first nine months of 2008.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
Pharmaceutical:
|
||||||||||||||||||||||||
|
Primary care
|
$ | 5,511 | $ | 5,769 | (4 | ) % | $ | 15,968 | $ | 17,044 | (6 | ) % | ||||||||||||
|
Specialty care
|
1,573 | 1,529 | 3 | 4,452 | 4,376 | 2 | ||||||||||||||||||
|
Oncology
|
371 | 389 | (5 | ) | 1,073 | 1,194 | (10 | ) | ||||||||||||||||
|
Established
products
|
1,618 | 1,834 | (12 | ) | 4,867 | 5,713 | (15 | ) | ||||||||||||||||
|
Emerging
markets
|
1,604 | 1,672 | (4 | ) | 4,482 | 4,823 | (7 | ) | ||||||||||||||||
|
Returns
adjustment
|
–– | (217 | ) | * | –– | (217 | ) | * | ||||||||||||||||
|
Total
Pharmaceutical
|
10,677 | 10,976 | (3 | ) | 30,842 | 32,933 | (6 | ) | ||||||||||||||||
|
Animal
Health
|
678 | 708 | (4 | ) | 1,863 | 2,042 | (9 | ) | ||||||||||||||||
|
Other
|
266 | 289 | (8 | ) | 767 | 975 | (21 | ) | ||||||||||||||||
|
Total
revenues
|
$ | 11,621 | $ | 11,973 | (3 | ) | $ | 33,472 | $ | 35,950 | (7 | ) | ||||||||||||
|
*
|
Calculation
not meaningful
|
|
●
|
the
strengthening of the U.S. dollar relative to other currencies, primarily
the euro, U.K. pound, Canadian dollar, Australian dollar and Brazilian
real, which unfavorably impacted Pharmaceutical revenues by approximately
$555 million, or 5%, in the third quarter of 2009 and by approximately
$2.1 billion, or 6%, in the first nine months of
2009;
|
|
●
|
an
operational decrease in worldwide revenues for Lipitor of $137 million in
the third quarter of 2009 and $394 million in the first nine months of
2009, primarily resulting from competitive pressures from generics, among
other factors;
|
|
●
|
an
aggregate decrease in revenues for Norvasc and Camptosar of $114 million
in the third quarter of 2009 and for Norvasc, Camptosar and Zyrtec/Zyrtec
D of $515 million in the first nine months of 2009, due to the loss of
Norvasc exclusivity in Japan in July 2008, the loss of exclusivity of
Camptosar in the U.S. in February 2008 and in Europe in July 2009, and the
loss of U.S. exclusivity and cessation of selling of Zyrtec/Zyrtec D in
January 2008; and
|
|
●
|
a
decrease in worldwide revenues for Chantix/Champix of $27 million in the
third quarter of 2009 and $142 million in the first nine months of 2009,
primarily resulting from changes to the Chantix label during 2008 and in
July 2009, among other factors;
|
|
●
|
solid
operational performance from certain products, including Lyrica and
Sutent, and higher alliance revenues;
and
|
|
●
|
a
$217 million adjustment in the third quarter and first nine months of 2008
related to the prior years’ liabilities for product
returns.
|
|
●
|
in
the U.S., Pharmaceutical revenues decreased 2% in the third quarter of
2009 primarily due to lower sales of Lipitor, Celebrex and Lyrica and 5%
in the first nine months of 2009, primarily due to lower sales of Lipitor
and Celebrex, compared to the respective year-ago periods, as a result of
continued generic pressures. Revenues also were adversely affected by the
loss of exclusivity of Camptosar and Zyrtec/Zyrtec D, lower sales of
Chantix following the changes to the product label, increased rebates as a
result of the impact of certain contract changes, and increased pricing
pressures. These factors were partially offset by the solid performance
from certain products, including Revatio, Xalatan and Sutent, and higher
alliance revenue in the third quarter and first nine months of 2009;
and
|
|
●
|
in
our international markets, Pharmaceutical revenues decreased 4% in the
third quarter of 2009 and 7% in the first nine months of 2009, compared to
the same periods of 2008, primarily due to the unfavorable impact of
foreign exchange on international revenues of $555 million, or 9%, in the
third quarter of 2009 and $2.1 billion, or 11%, in the first nine months
of 2009, and lower sales of Norvasc, Camptosar and Viagra, partially
offset by operational growth from certain products, including Lipitor,
Lyrica, Zyvox, Vfend and Sutent, and higher alliance
revenues.
|
|
(millions
of dollars)
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
Product+
|
Primary
Indications
|
Sept.
27,
2009
|
%
Change
From
2008
|
Sept.
27,
2009
|
%
Change
From
2008
|
||||||||||||
|
Cardiovascular
and
|
|||||||||||||||||
|
metabolic
diseases:
|
|||||||||||||||||
|
Lipitor
|
Reduction
of LDL cholesterol
|
$ | 2,853 | (9 | ) % | $ | 8,259 | (11 | ) % | ||||||||
|
Norvasc
|
Hypertension
|
488 | (13 | ) | 1,487 | (13 | ) | ||||||||||
|
Chantix/Champix
|
An
aid to smoking cessation
|
155 | (15 | ) | 524 | (21 | ) | ||||||||||
|
Caduet
|
Reduction
of LDL cholesterol and hypertension
|
130 | (12 | ) | 392 | (11 | ) | ||||||||||
|
Cardura
|
Hypertension/Benign
prostatic hyperplasia
|
109 | (14 | ) | 330 | (13 | ) | ||||||||||
|
Revatio
|
Pulmonary
arterial hypertension
|
111 | 18 | 319 | 33 | ||||||||||||
|
Central
nervous
|
|||||||||||||||||
|
system
disorders:
|
|||||||||||||||||
|
Lyrica
|
Epilepsy,
post-herpetic neuralgia and diabetic
peripheral neuropathy,
fibromyalgia
|
708 | 5 | 2,020 | 8 | ||||||||||||
|
Geodon/Zeldox
|
Schizophrenia
and acute manic or mixed episodes
associated with bipolar
disorder
|
252 | (2 | ) | 713 | (3 | ) | ||||||||||
|
Zoloft
|
Depression
and certain anxiety disorders
|
128 | (5 | ) | 368 | (10 | ) | ||||||||||
|
Aricept(a)
|
Alzheimer’s
disease
|
108 | (17 | ) | 311 | (12 | ) | ||||||||||
|
Neurontin
|
Epilepsy
and post-herpetic neuralgia
|
82 | (20 | ) | 242 | (18 | ) | ||||||||||
|
Relpax
|
Migraine
headaches
|
81 | (2 | ) | 234 | (2 | ) | ||||||||||
|
Xanax/Xanax XR
|
Anxiety/Panic
disorders
|
81 | (11 | ) | 230 | (14 | ) | ||||||||||
|
Arthritis
and pain:
|
|||||||||||||||||
|
Celebrex
|
Arthritis
pain and inflammation, acute pain
|
602 | (4 | ) | 1,714 | (6 | ) | ||||||||||
|
Infectious
and
|
|||||||||||||||||
|
respiratory
diseases:
|
|||||||||||||||||
|
Zyvox
|
Bacterial
infections
|
271 | (3 | ) | 811 | (2 | ) | ||||||||||
|
Vfend
|
Fungal
infections
|
196 | 3 | 555 | 1 | ||||||||||||
|
Zithromax/Zmax
|
Bacterial
infections
|
85 | (7 | ) | 299 | (7 | ) | ||||||||||
|
Diflucan
|
Fungal
infections
|
93 | (1 | ) | 244 | (13 | ) | ||||||||||
|
Urology:
|
|||||||||||||||||
|
Viagra
|
Erectile
dysfunction
|
466 | (8 | ) | 1,343 | (6 | ) | ||||||||||
|
Detrol/Detrol LA
|
Overactive
bladder
|
283 | (5 | ) | 845 | (6 | ) | ||||||||||
|
Oncology:
|
|||||||||||||||||
|
Sutent
|
Advanced
and/or metastatic renal cell carcinoma
(mRCC)
and refractory gastrointestinal
stromal
tumors (GIST)
|
246 | 9 | 671 | 7 | ||||||||||||
|
Aromasin
|
Breast
cancer
|
123 | 1 | 347 | 1 | ||||||||||||
|
Camptosar
|
Metastatic
colorectal cancer
|
82 | (33 | ) | 276 | (39 | ) | ||||||||||
|
Ophthalmology:
|
|||||||||||||||||
|
Xalatan/Xalacom
|
Glaucoma
and ocular hypertension
|
436 | (3 | ) | 1,238 | (4 | ) | ||||||||||
|
Endocrine
disorders:
|
|||||||||||||||||
|
Genotropin
|
Replacement
of human growth hormone
|
232 | 3 | 636 | (5 | ) | |||||||||||
|
All
other:
|
|||||||||||||||||
|
Zyrtec/Zyrtec D
|
Allergies
|
–– | –– | –– | (100 | ) | |||||||||||
|
Alliance
revenues:
|
|||||||||||||||||
|
Aricept,
Exforge,
Rebif
and Spiriva
|
Alzheimer’s
disease (Aricept), chronic obstructive pulmonary disease (Spiriva),
multiple sclerosis (Rebif) and hypertension (Exforge)
|
692 | 21 | 1,872 | 15 | ||||||||||||
|
+
|
Revenues
are presented by therapeutic
area.
|
|
|
Certain
amounts and percentages may reflect rounding
adjustments.
|
|
(a)
|
Represents
direct sales under license agreement with Eisai Co.,
Ltd.
|
|
●
|
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 $2.9 billion or a decrease
of 9% in the third quarter of 2009 and $8.3 billion or a decrease of 11%
in the first nine months of 2009, compared to the same periods in 2008.
These results in part reflect the negative impact of foreign exchange,
which decreased revenues by $153 million, or 5%, in the third quarter of
2009, and $603 million, or 6%, in the first nine months of 2009, compared
to the same periods in 2008. In the U.S., revenues were $1.4 billion or a
decrease of 12% in the third quarter of 2009 and $4.1 billion or a
decrease of 12% in the first nine months of 2009, compared with the same
periods in 2008. Internationally, Lipitor revenues were $1.5 billion or a
decrease of 6% in the third quarter of 2009 and $4.1 billion or a decrease
of 9% in the first nine months of 2009, compared to the same periods in
2008. The unfavorable impact of foreign exchange more than offset
operational growth of 3% in international markets in the third quarter of
2009 and 4% in the first nine months of 2009, compared to the same periods
last year.
|
|
●
|
primarily,
the unfavorable impact of foreign exchange; as well
as
|
|
●
|
the
impact of an intensely competitive lipid-lowering market with competition
from multi-source generics and branded products in the
U.S.;
|
|
●
|
increased
payer pressure in the U.S.; and
|
|
●
|
slower
growth in the lipid-lowering market, due in part to a slower rate of
growth in the Medicare Part D population and, reflecting the global
recession, heightened overall patient cost-sensitivity in the U.S. and
adoption of non-prescription treatment
options;
|
|
●
|
operational
growth internationally.
|
|
●
|
Norvasc, for treating
hypertension, lost exclusivity in the U.S. in March 2007. Norvasc has also
experienced patent expirations in most other major markets, including
Japan in July 2008. Norvasc worldwide revenues decreased by 13% in both
the third quarter and in the first nine months of 2009 compared to the
same periods in 2008.
|
|
●
|
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 decreased 15% in the third quarter of 2009 and 21% in the first
nine months of 2009, compared to the same periods in 2008. Year-to-date
revenues for Chantix have declined compared to last year following the
changes to the product’s label and other factors. 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.
|
|
●
|
Caduet, a single-pill
therapy combining Norvasc and Lipitor, recorded decreases in worldwide
revenues of 12% in the third quarter of 2009 and 11% in the first nine
months of 2009, compared to the same periods in 2008, primarily due to
increased generic competition as well as an overall decline in U.S.
hypertension market volume.
|
|
●
|
Revatio, for the
treatment of pulmonary arterial hypertension, recorded an increase in
worldwide revenues of 18% in the third quarter of 2009 and 33% in the
first nine months of 2009, compared to the same periods in 2008, primarily
due to the recent FDA approval of enhanced labeling and market trends
toward earlier diagnosis and
treatment.
|
|
●
|
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)
outside the U.S., recorded increases in worldwide revenues of 5% in the
third quarter of 2009 and 8% in the first nine months of 2009, compared to
the same periods in 2008. In the U.S., revenues have been adversely
affected by increased generic competition as well as managed care pricing
and formulary pressures.
|
|
●
|
Geodon/Zeldox, a
psychotropic agent, is a dopamine and serotonin receptor antagonist
indicated for the treatment of schizophrenia and acute manic or mixed
episodes associated with bipolar disorder. Geodon recorded decreases in
worldwide revenues of 2% in the third quarter of 2009 and 3% in the first
nine months of 2009, compared to the same periods in 2008, due to
increased generic competition, slow growth in the antipsychotic market in
the U.S., as well as the unfavorable impact of foreign
exchange.
|
|
●
|
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 2009 and 6% in the first nine months of 2009,
compared to the same periods in 2008, due to increased generic
competition. Celebrex is supported by continued educational and
promotional efforts highlighting its efficacy and safety profile for
appropriate patients.
|
|
●
|
Zyvox is the world’s
best-selling branded agent for the treatment of certain serious
Gram-positive pathogens, including Methicillin-Resistant
Staphylococcus-Aureus (MRSA). MRSA remains a serious and growing threat in
hospitals and the community. Zyvox is an excellent first-line choice for
the treatment of adults and children with complicated skin and skin
structure infections and hospital-acquired pneumonia due to known or
suspected MRSA. Zyvox is the only FDA-approved agent for MRSA that offers
intravenous and oral formulations for these indications. Its unique
mechanism of action makes cross-resistance unlikely. Zyvox worldwide
revenues decreased 3% in the third quarter of 2009 and 2% in the first
nine months of 2009, compared to the same periods in 2008, mainly due to a
decrease in the number of patients treated for pneumonia and to 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.
|
|
●
|
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 declined 8% in the third quarter of 2009 and 6% in the
first nine months of 2009, compared to the same periods in 2008. In the
U.S., revenues decreased 1% in the third quarter of 2009 and increased 6%
in the first nine months of 2009, compared to the same periods in 2008.
Internationally, Viagra revenues decreased by 14% in the third quarter of
2009 and 17% in the first nine months of 2009, compared to the same
periods in 2008, due primarily to the unfavorable impact of foreign
exchange.
|
|
●
|
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
5% in the third quarter of 2009 and 6% in the first nine months of 2009,
compared to the same periods in 2008, primarily due to increased
competition from other branded
medicines.
|
|
●
|
Sutent, for the treatment
of advanced renal cell carcinoma, including metastatic renal cell
carcinoma, and gastrointestinal stromal tumors (GIST) after disease
progression on, or intolerance to, imatinib mesylate, was launched in the
U.S. in January 2006. It has now been launched in all major markets.
Sutent worldwide revenues increased 9% in the third quarter of 2009 and 7%
in the first nine months of 2009, compared to the same periods in 2008. We
continue to drive total revenue and prescription growth, supported by
cost-effectiveness data and efficacy data in first-line mRCC – including
2-year survival data, which represents the first time overall survival of
two years has been seen in the treatment of advanced kidney cancer, as
well as through access and health care coverage. As of September 27, 2009,
Sutent was the best-selling medicine in the world for the treatment of
first-line mRCC.
|
|
●
|
Camptosar, indicated as
first-line therapy for metastatic colorectal cancer in combination with
5-fluorouracil and leucovorin, lost exclusivity in the U.S. in February
2008 and major European countries in July 2009. It is also indicated for
patients in whom metastatic colorectal cancer has recurred or progressed
following initial fluorouracil-based therapy. Camptosar is for intravenous
use only. Camptosar worldwide revenues decreased 33% in the third quarter
of 2009 and 39% in the first nine months of 2009, compared to the same
periods in 2008, primarily as a result of the loss of
exclusivity.
|
|
●
|
Xalatan, a
prostaglandin, is the world’s leading branded agent to reduce elevated eye
pressure in patients with open-angle glaucoma or ocular hypertension.
Xalacom, a fixed
combination prostaglandin (Xalatan) and beta blocker (timolol), is
available outside the U.S. Xalatan/Xalacom worldwide revenues decreased 3%
in the third quarter of 2009 and 4% in the first nine months of 2009,
compared to the same periods in 2008, due to the unfavorable impact of
foreign exchange.
|
|
●
|
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 increased 3% in
the third quarter of 2009 and decreased 5% in the first nine months of
2009. The unfavorable impact of foreign exchange was more than
offset by the operational revenue increases in the third quarter of 2009
and partially offset by the operational revenue increases in the first
nine months of 2009, compared to the same periods in
2008.
|
|
●
|
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.
Vfend’s overall global sales continue to be driven by its acceptance as an
excellent broad-spectrum agent for treating yeast and molds. Vfend
worldwide revenues increased 3% in the third quarter of 2009 and 1% in the
first nine months of 2009, compared to the same periods in
2008.
|
|
●
|
Alliance Revenues increased 21%
in the third quarter of 2009 and 15% in the first nine months of 2009,
compared to the same periods last year. The growth was due to the strong
performance of Aricept, Spiriva and
Rebif.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
Livestock
products
|
$ | 417 | $ | 436 | (4 | ) % | $ | 1,102 | $ | 1,251 | (12 | ) % | ||||||||||||
|
Companion
animal products
|
261 | 272 | (4 | ) | 761 | 791 | (4 | ) | ||||||||||||||||
|
Total
Animal Health
|
$ | 678 | $ | 708 | (4 | ) | $ | 1,863 | $ | 2,042 | (9 | ) | ||||||||||||
|
●
|
the
global recession, which negatively affected global spending on veterinary
care;
|
|
●
|
historically
low milk prices, which have hurt the profitability of dairy farmers and
negatively impacted our livestock business;
and
|
|
●
|
a
planned change in terms with U.S. distributors resulting in an
anticipated, one-time reduction in U.S. distributor inventories in the
first quarter of 2009.
|
|
Product
|
Indication
|
Date
Submitted
|
|
Genotropin
|
Adult
growth hormone deficiency (Mark VII multidose disposable
device)
|
October
2009
|
|
Celebrex
|
Chronic
Pain
|
August
2009
|
|
Lyrica
|
Adjunctive
treatment for generalized anxiety disorder
Generalized
anxiety disorder – Monotherapy
|
July
2009
June
2009
|
|
Selzentry
(maraviroc)
|
HIV
in treatment-naïve patients
|
December
2008
|
|
Geodon
|
Maintenance
treatment of bipolar mania
|
December
2008
|
|
Geodon
|
Treatment
of bipolar mania – Pediatric filing
|
October
2008
|
|
Fablyn
(lasofoxifene)
|
Treatment
of osteoporosis
|
December
2007
|
|
Spiriva
|
Respimat
device for chronic obstructive pulmonary disease
|
November
2007
|
|
Zmax
|
Treatment
of bacterial infections—sustained release—acute otitis
media and sinusitis – Pediatric
filing
|
November
2006
|
|
Vfend
|
Treatment
of fungal infections – Pediatric filing
|
June
2005
|
|
Thelin
|
Treatment
of pulmonary arterial hypertension
|
May
2005
|
|
Product
|
Description
of Event
|
Date
Approved
|
Date
Submitted
|
|
|
Geodon
|
Approval
in the EU for pediatric bipolar disorders
|
September
2009
|
––
|
|
|
Toviaz
|
Application
submitted in Japan for overactive bladder
|
––
|
September
2009
|
|
|
Genotropin
|
Application
submitted in the EU for adult growth hormone deficiency (Mark
VII
multidose
disposable device)
|
––
|
September
2009
|
|
|
Lyrica
|
Application
submitted in Japan for neuropathic pain
|
––
|
August
2009
|
|
|
Caduet
|
Approval
in Japan for concomitant hypertension and
hypercholesterolemia
|
July
2009
|
––
|
|
|
Celebrex
|
Approval
in Japan for treatment of low back pain
|
June
2009
|
––
|
|
|
Fablyn
(lasofoxifene)
|
Approval
in the EU for the treatment of osteoporosis
|
February
2009
|
––
|
|
|
Zithromac
|
Approval
in Japan for bacterial infections
|
January
2009
|
––
|
|
|
Lyrica
|
Application
submitted in Japan for the treatment of pain associated
with
post-herpetic neuralgia
|
––
|
May
2008
|
|
|
Xalacom
|
Application
submitted in Japan for the treatment of glaucoma
|
––
|
February
2008
|
|
Product
|
Indication
|
|
Celebrex
|
Acute
gouty arthritis
|
|
Eraxis/Vfend
Combination
|
Aspergillosis
fungal infections
|
|
Lyrica
|
Epilepsy
monotherapy; post-operative pain; restless legs
syndrome
|
|
Macugen
|
Diabetic
macular edema
|
|
Revatio
|
Pediatric
pulmonary arterial hypertension
|
|
Sutent
|
Breast
cancer; non-small cell lung cancer; prostate cancer; liver
cancer
|
|
Zmax/chloroquine
|
Malaria
|
|
●
|
PF-02341066,
an oral c-Met and ALK inhibitor for the treatment of advanced non-small
cell lung cancer;
|
|
●
|
CP-690550,
a JAK-3 kinase inhibitor for the treatment of rheumatoid
arthritis;
|
|
●
|
axitinib,
a multi-targeted kinase inhibitor for the treatment of renal cell
carcinoma;
|
|
●
|
Dimebon,
a novel mitochondrial protectant and enhancer being developed in
partnership with Medivation, Inc. for the treatment of Alzheimer’s disease
and Huntington’s disease;
|
|
●
|
figitumumab
(CP-751871), an anti-insulin-like growth factor receptor 1 (IGF1R) human
monoclonal antibody for the treatment of non-small cell lung
cancer;
|
|
●
|
dalbavancin
for treatment of skin and skin structure
infections;
|
|
●
|
tanezumab,
an anti-nerve growth factor monoclonal antibody for the treatment of pain;
and
|
|
●
|
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).
|
|
●
|
savings
related to our Pfizer cost-reduction
initiatives;
|
|
●
|
the
impact of lower implementation costs associated with our Pfizer
cost-reduction initiatives of $23 million in the third quarter of 2009,
compared to $172 million in the third quarter of 2008, and $144 million in
the first nine months of 2009, compared to $520 million in the first nine
months of 2008; and
|
|
●
|
the
favorable impact of foreign exchange in the first nine months of
2009;
|
|
●
|
the
unfavorable impact of foreign exchange in the third quarter of
2009.
|
|
●
|
savings
related to our Pfizer cost-reduction
initiatives;
|
|
●
|
the
favorable impact of foreign
exchange;
|
|
●
|
the
impact of lower implementation costs associated with our Pfizer
cost-reduction initiatives of $51 million in the third quarter of 2009,
compared to $95 million in the third quarter of 2008, and $182 million in
the first nine months of 2009, compared to $270 million in the first nine
months of 2008; and
|
|
●
|
certain
insurance recoveries of $165 million in the first nine months of 2009,
related to legal-defense costs.
|
|
●
|
savings
related to our Pfizer cost-reduction
initiatives;
|
|
●
|
the
favorable impact of foreign exchange;
and
|
|
●
|
the
impact of lower implementation costs associated with our Pfizer
cost-reduction initiatives of $5 million in the third quarter of 2009,
compared to $108 million in the third quarter of 2008, and $78 million in
the first nine months of 2009, compared to $348 million in the first nine
months of 2008;
|
|
●
|
a
$150 million milestone payment to BMS recorded in the first nine months of
2009 in connection with the collaboration on
apixaban.
|
|
●
|
the
closing of duplicative facilities and other site rationalization actions
company-wide, including research and development facilities, manufacturing
plants, sales offices and other corporate
facilities;
|
|
●
|
workforce
reductions and other organizational
changes;
|
|
●
|
the
increased use of shared services;
and
|
|
●
|
procurement
savings.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Implementation
costs(a)
|
$ | 80 | $ | 378 | $ | 410 | $ | 1,140 | ||||||||
|
Restructuring
charges(b)
|
61 | 338 | 392 | 1,077 | ||||||||||||
|
Total
costs related to our cost-reduction initiatives
|
$ | 141 | $ | 716 | $ | 802 | $ | 2,217 | ||||||||
|
(a)
|
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 (income)/deductions -
net ($1 million). For the third quarter of 2008, included in Cost of sales ($172
million), Selling,
informational and administrative expenses ($95 million), Research and development
expenses ($108 million) and Other (income)/deductions -
net ($3 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 (income)/deductions -
net ($6 million). For the first nine months of 2008, included in
Cost of sales
($520 million), Selling,
informational and administrative expenses ($270 million), Research and development
expenses ($348 million) and Other (income)/deductions -
net ($2 million).
|
|
(b)
|
Included
in Restructuring charges
and acquisition-related
costs.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Transaction
costs (a)
|
$ | 19 | $ | –– | $ | 572 | $ | –– | ||||||||
|
Pre-integration
costs and other(b)
|
113 | 28 | 242 | 36 | ||||||||||||
|
Total
acquisition-related costs(c)
|
$ | 132 | $ | 28 | $ | 814 | $ | 36 | ||||||||
|
(a)
|
Transaction
costs include banking, legal, accounting and other costs directly related
to our acquisition of Wyeth. Substantially all of the costs incurred to
date are 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 during the first half of 2009. All
bridge term loan commitment fees have been expensed, and we are no longer
subject to the covenants under that agreement. (See Note 8D: Financial
Instruments: Long-Term
Debt).
|
|
(b)
|
Pre-integration
costs and other in the 2009 periods primarily represent external,
incremental costs of integration planning that are directly related to our
acquisition of Wyeth and include costs associated with preparing for
systems and other integration activities. 2008 amounts relate to other
restructuring charges.
|
|
(c)
|
Included
in Restructuring charges
and acquisition-related
costs.
|
|
●
|
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. These metrics derived from Adjusted income account for
(i) 17% 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)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
Sept.
27,
2009
|
Sept.
28,
2008
|
%
Change
|
||||||||||||||||||
|
Reported
net income attributable to Pfizer Inc.
|
$ | 2,878 | $ | 2,278 | 26 | % | $ | 7,868 | $ | 7,838 | –– | % | ||||||||||||
|
Purchase accounting adjustments -
net of tax
|
397 | 460 | (14 | ) | 1,167 | 1,998 | (42 | ) | ||||||||||||||||
|
Acquisition-related costs - net
of tax
|
87 | 24 | * | 524 | 30 | * | ||||||||||||||||||
|
Discontinued operations - net of
tax
|
(2 | ) | (25 | ) | 92 | (6 | ) | (38 | ) | 84 | ||||||||||||||
|
Certain significant items - net of
tax
|
101 | 1,443 | (93 | ) | 824 | 2,149 | (62 | ) | ||||||||||||||||
|
Adjusted
income
|
$ | 3,461 | $ | 4,180 | (17 | ) | $ | 10,377 | $ | 11,977 | (13 | ) | ||||||||||||
|
*
|
Calculation not
meaningful.
|
|
|
Certain
amounts and percentages may reflect rounding
adjustments.
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(millions
of dollars)
|
Sept.
27,
2009
|
Sept.
28,
2008
|
Sept.
27,
2009
|
Sept.
28,
2008
|
||||||||||||
|
Purchase
accounting adjustments:
|
||||||||||||||||
|
Intangible amortization and
other(a)
|
$ | 564 | $ | 591 | $ | 1,671 | $ | 1,981 | ||||||||
|
In-process research and
development charges(b)
|
–– | 13 | 20 | 567 | ||||||||||||
|
Total purchase accounting
adjustments, pre-tax
|
564 | 604 | 1,691 | 2,548 | ||||||||||||
|
Income taxes
|
(167 | ) | (144 | ) | (524 | ) | (550 | ) | ||||||||
|
Total purchase accounting
adjustments - net of tax
|
397 | 460 | 1,167 | 1,998 | ||||||||||||
|
Acquisition-related
costs:
|
||||||||||||||||
|
Transaction costs(c)
|
19 | –– | 572 | –– | ||||||||||||
|
Pre-integration costs and
other(c)
|
113 | 28 | 242 | 36 | ||||||||||||
|
Total acquisition-related costs,
pre-tax
|
132 | 28 | 814 | 36 | ||||||||||||
|
Income taxes
|
(45 | ) | (4 | ) | (290 | ) | (6 | ) | ||||||||
|
Total acquisition-related costs -
net of tax
|
87 | 24 | 524 | 30 | ||||||||||||
|
Discontinued
operations:
|
||||||||||||||||
|
Total discontinued operations -
net of tax
|
(2 | ) | (25 | ) | (6 | ) | (38 | ) | ||||||||
|
Certain
significant items:
|
||||||||||||||||
|
Restructuring charges –
cost-reduction initiatives(c)
|
61 | 338 | 392 | 1,077 | ||||||||||||
|
Implementation costs –
cost-reduction initiatives(d)
|
80 | 378 | 410 | 1,140 | ||||||||||||
|
Certain legal matters(e)
|
40 | 936 | 170 | 936 | ||||||||||||
|
Net interest expense – Wyeth
acquisition(f)
|
299 | — | 528 | — | ||||||||||||
|
Returns liabilities
adjustment(g)
|
–– | 217 | –– | 217 | ||||||||||||
|
Other(h)
|
(67 | ) | 162 | (4 | ) | 246 | ||||||||||
|
Total certain significant items,
pre-tax
|
413 | 2,031 | 1,496 | 3,616 | ||||||||||||
|
Income taxes(i)
|
(312 | ) | (588 | ) | (672 | ) | (1,467 | ) | ||||||||
|
Total certain significant items -
net of tax
|
101 | 1,443 | 824 | 2,149 | ||||||||||||
|
Total
purchase accounting adjustments, acquisition-related
costs, discontinued operations and
certain significant
items - net of tax
|
$ | 583 | $ | 1,902 | $ | 2,509 | $ | 4,139 | ||||||||
|
(a)
|
Included
primarily in Amortization of intangible
assets.
|
|
(b)
|
In
the first nine months of 2009, we recorded $20 million of Acquisition-related in-process
research and development charges (IPR&D) due to the resolution
of a contingency associated with our 2008 acquisition of CovX. In the
first nine months of 2008, we expensed $567 million of IPR&D,
primarily related to our acquisitions of Serenex, Inc., Encysive
Pharmaceuticals, Inc., CovX, Coley Pharmaceutical Group, Inc., and two
smaller acquisitions related to Animal Health. As a result of adopting the
provisions of a new accounting standard for business combinations issued
by the FASB, beginning January 1, 2009, IPR&D related to acquisitions
after adoption will be recorded on our consolidated balance sheet as
indefinite-lived intangible assets. No acquisitions were consummated in
the first nine months of 2009.
|
|
(c)
|
Included
in Restructuring charges
and acquisition-related
costs.
|
|
(d)
|
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 (income)/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 (income)/ deductions –
net ($6 million). For the third quarter of 2008, included in Cost of sales ($172
million), Selling,
informational and administrative expenses ($95 million), Research and development
expenses ($108 million) and Other (income)/deductions -
net ($3 million). For the first nine months of 2008, included in
Cost of Sales
($520 million), Selling Informational and
administrative expenses ($270 million), Research and development
expenses ($348 million) and Other (income)/deductions –
net ($2 million).
|
|
(e)
|
Included
in Other
(income)/deductions – net and, for the third quarter and first nine
months of 2008, includes approximately $900 million related to the
resolution of certain NSAID litigation.
|
|
(f)
|
Included
in Other
(income)/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.
|
|
(g)
|
Included
in Revenues and
reflects an adjustment to the prior years’ liabilities for product
returns.
|
|
(h)
|
Included
in the three-month and nine-month periods ended September 28, 2008 are
$115 million in asset impairment charges and other associated
costs.
|
|
(i)
|
Included
in Provision for taxes
on income and includes a tax benefit of approximately $174 million
in the three and nine-month periods ended September 27, 2009 related to
the final resolution of a previously disclosed agreement-in-principle with
the U.S. Department of Justice to settle investigations of past
promotional practices and certain other matters. This resulted in the
receipt of information that raised our assessment of the likelihood of
prevailing on the technical merits of our tax position. Also includes a
tax benefit of approximately $426 million in the first nine months of 2008
related to the sale of one of our biopharmaceutical companies (Esperion
Therapeutics Inc.).
|
|
(millions
of dollars)
|
Sept.
27,
2009
|
Dec.
31,
2008
|
||||||
|
Financial
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 4,234 | $ | 2,122 | ||||
|
Short-term
investments
|
48,239 | 21,609 | ||||||
|
Short-term loans
|
791 | 824 | ||||||
|
Long-term investments and
loans
|
12,166 | 11,478 | ||||||
|
Total select financial
assets
|
65,430 | 36,033 | ||||||
|
Debt:
|
||||||||
|
Short-term borrowings, including
current portion of long-term debt
|
6,954 | 9,320 | ||||||
|
Long-term debt
|
32,402 | 7,963 | ||||||
|
Total
debt
|
39,356 | 17,283 | ||||||
|
Net financial
assets
|
$ | 26,074 | $ | 18,750 | ||||
|
●
|
We
issued $13.5 billion of senior unsecured notes on March 24, 2009 and
approximately $10.5 billion of senior unsecured notes on June 3, 2009, of
which virtually all of the proceeds were used to partially finance our
acquisition of Wyeth on October 15, 2009. As of September 27, 2009, prior
to the close of the Wyeth acquisition, the note proceeds were generally
invested in short-term available-for-sale investments. Our long-term debt
increased in the first nine months of 2009 primarily as a result of the
issuances of these senior unsecured
notes.
|
|
●
|
Our
short-term and long-term investments consist primarily of high-quality,
investment-grade available-for-sale debt securities. Wherever possible,
cash management is centralized and intercompany financing is used to
provide working capital to our operations. Where local restrictions
prevent intercompany financing, working capital needs are met through
operating cash flows and/or external borrowings. Our portfolio of
financial assets increased in the first nine months of 2009 as a result of
the proceeds of the notes issued in anticipation of the acquisition of
Wyeth.
|
|
Long-Term-Debt
|
Date
of Last Action
|
|||
|
Name
of Rating Agency
|
Commercial
Paper
|
Rating
|
Outlook
|
|
|
Moody’s
|
P-1
|
A1
|
Stable
|
October
2009
|
|
S&P
|
A1+
|
AA
|
Stable
|
October
2009
|
|
(millions
of dollars, except ratios and per common share data)
|
Sept.
27,
2009
|
Dec.
31,
2008
|
||||||
|
Cash
and cash equivalents and short-term investments and loans
|
$ | 53,264 | $ | 24,555 | ||||
|
Working
capital(a)
|
$ | 49,792 | $ | 16,067 | ||||
|
Ratio
of current assets to current liabilities
|
3.07:1
|
1.59:1
|
||||||
|
Shareholders’
equity per common share(b)
|
$ | 9.83 | $ | 8.56 | ||||
|
(a)
|
Working
capital includes Assets
held for sale of $231 million as of September 27, 2009, and $148
million as of December 31, 2008.
|
|
(b)
|
Represents
total Pfizer Inc. shareholders’ equity divided by the actual number of
common shares outstanding (which excludes treasury shares and shares held
by our employee benefit trust).
|
|
●
|
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 the proceeds from our
issuance of approximately $10.5 billion of senior unsecured notes in the
second quarter of 2009, compared to $2.6 billion in
2008;
|
|
●
|
lower
dividend payments in 2009; and
|
|
●
|
no
open market purchases of common stock in
2009.
|
|
(millions
of dollars)
|
Total
|
Through
2010
|
2011
to 2012
|
2013
to 2014
|
After
2014
|
|||||||||||||||
|
Long-term
debt and associated interest (a)
|
$ | 49,372 | $ | 1,726 | $ | 8,797 | $ | 5,822 | $ | 33,027 | ||||||||||
|
(a)
|
Our
long-term debt obligations include both our expected principal and
interest obligations. Our calculation of expected interest payments
incorporates only current-period assumptions for interest rates, foreign
currency translation rates and hedging strategies. (See Notes to
Consolidated Financial Statements—Note 8D. Financial
Instruments: Long-Term Debt). Long-term debt consists of senior,
fixed-rate and floating-rate, unsecured notes, foreign currency
denominated notes, and other borrowings and
mortgages.
|
|
●
|
An
amendment to the recognition and measurement guidance for the transfers of
financial assets.
|
|
●
|
An
amendment to the guidelines for determining the existence of a variable
interest entity and the related primary
beneficiary.
|
|
Previous
Full-Year 2009
Guidance
|
Revised
Full-Year 2009
Guidance
|
|||||||||||||||
|
($
billions, except per share amounts)
|
Net
Income
|
Diluted
EPS
|
Net
Income(a)
|
Diluted
EPS(a)
|
||||||||||||
|
Adjusted
income/diluted EPS(1)
guidance
|
~$12.8-$13.5
|
~$1.90-$2.00
|
~$14.1-$14.4
|
~$2.00-$2.05
|
||||||||||||
|
Purchase
accounting impacts from Wyeth acquisition
and
business-development transactions completed as
of
12/31/08
|
(1.5) | (0.23) | (2.5)(b) | (0.36)(b) | ||||||||||||
|
Costs
related to cost-reduction initiatives
|
(0.9-1.2) | (0.14-0.17) | (0.6)(c) | (0.08)(c) | ||||||||||||
|
Wyeth
acquisition-related costs (d)
|
(1.1-1.2) | (0.16-0.18) | (0.9) | (0.12) | ||||||||||||
|
Certain
legal matters
|
(.1) | (0.01) | –– | –– | ||||||||||||
|
Other,
net
|
(.1) | (0.01) | 0.1 | 0.01 | ||||||||||||
|
Reported
Net income attributable to Pfizer
Inc./diluted
EPS attributable to Pfizer Inc. common
shareholders
guidance
|
~$8.7-$9.8
|
~$1.30-$1.45
|
~$10.2-$10.5
|
~$1.45-$1.50
|
||||||||||||
|
(a)
|
The
revised guidance in the table above includes projected results of
operations for Wyeth, in accordance with Pfizer’s international and
domestic year-ends. Therefore, the guidance includes approximately
one-and-a-half months of the fourth calendar quarter of 2009 in the case
of Wyeth’s international operations and approximately two-and-a-half
months of the fourth calendar quarter of 2009 in the case of Wyeth’s U.S.
operations. This guidance does not assume the completion of any other
business-development transactions, including divestitures, not completed
as of September 27, 2009, and excludes the potential effects of
litigation-related matters not substantially resolved as of September 27,
2009.
|
|
(b)
|
Includes
estimated amounts that are dependent upon certain valuations and other
studies of the assets acquired and liabilities assumed from Wyeth that
have yet to commence or progress to a stage where there is sufficient
information for a definitive measurement. Accordingly, the
estimated purchase accounting impacts are preliminary and may not be
indicative of actual amounts that will be recorded as additional
information becomes available and as additional analyses are performed.
Differences between the preliminary estimates reflected in this guidance
and the final acquisition accounting will likely occur and could have a
material impact on the guidance presented
above.
|
|
(c)
|
Includes
restructuring and implementation costs incurred for Pfizer legacy
cost-reduction initiatives through the closing date of the Wyeth
acquisition. Does not reflect an estimate for subsequent restructuring and
implementation costs associated with Pfizer legacy cost-reduction
initiatives. The Company will include an estimate for acquisition-related
restructuring and integration costs in its full-year 2010 financial
guidance in conjunction with its fourth-quarter 2009 earnings release in
January 2010.
|
|
(d)
|
Includes
certain costs incurred in connection with the Wyeth acquisition from the
announcement of the agreement to acquire Wyeth on January 26, 2009 through
the acquisition closing date including, but not limited to,
pre-integration, transaction and financing costs. Due to the recent timing
of the acquisition closing, the guidance does not reflect an estimate for
any restructuring or integration charges expected to be incurred in
connection with the acquisition of Wyeth. The Company will include an
estimate for acquisition-related restructuring and integration costs in
its full-year 2010 financial guidance in conjunction with its
fourth-quarter 2009 earnings release in January
2010.
|
|
(1)
|
For
an understanding of Adjusted income, see the “Adjusted income” section of
this MD&A.
|
|
●
|
Success
of research and development
activities;
|
|
●
|
Decisions
by regulatory authorities regarding whether and when to approve our drug
applications, as well as their decisions regarding labeling 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;
|
|
●
|
Competitive
developments, including with respect to competitor drugs and drug
candidates that treat diseases and conditions similar to those treated by
our in-line drugs and drug
candidates;
|
|
●
|
Ability
to successfully market both new and existing products domestically and
internationally;
|
|
●
|
Difficulties
or delays in manufacturing;
|
|
●
|
Trade
buying patterns;
|
|
●
|
Ability
to meet generic and branded competition after the loss of patent
protection for our products and competitor
products;
|
|
●
|
Impact
of existing and future legislation and regulatory provisions on product
exclusivity;
|
|
●
|
Trends
toward managed care and healthcare cost
containment;
|
|
●
|
U.S.
legislation or regulatory action, including legislation or regulatory
action that may result from pending and possible future healthcare reform
proposals, 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;
|
|
●
|
Impact
of the Medicare Prescription Drug, Improvement, and Modernization Act of
2003;
|
|
●
|
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, governmental investigations, 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
tax obligations and changes affecting the taxation by the U.S. of income
earned outside of the U.S. 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 the
global recession 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 withdrawals and
other unusual items, including our ability to successfully integrate Wyeth
and realize the projected benefits of our acquisition of Wyeth and of our
cost-reduction initiatives.
|
|
●
|
Healthcare
and tax reform proposals in the
U.S.
|
|
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)
|
||||||||||||
|
June
29, 2009 through
July
26, 2009
|
93,621 | $ | 14.96 | — | $ | 5,033,723,295 | ||||||||||
|
July
27, 2009 through
August
23, 2009
|
22,945 | $ | 18.93 | — | $ | 5,033,723,295 | ||||||||||
|
August
24, 2009 through
September
27, 2009
|
165,512 | $ | 16.24 | — | $ | 5,033,723,295 | ||||||||||
|
Total
|
282,078 | $ | 16.03 | — | ||||||||||||
|
(a)
|
On
June 23, 2005, we announced that the Board of Directors authorized a $5
billion share-purchase plan (the “2005 Stock Purchase Plan”). On June 26,
2006, we announced that the Board of Directors increased the authorized
amount of shares to be purchased under the 2005 Stock Purchase Plan from
$5 billion to $18 billion. On January 23, 2008, we announced that the
Board of Directors had authorized a new $5 billion share-purchase plan to
be utilized from time to time.
|
|
(b)
|
These
columns reflect the following transactions during the fiscal third quarter
of 2009: (i) the open-market purchase by the trustee of 114,301 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, (ii) the surrender to Pfizer of 102,948 shares of common stock to
satisfy tax withholding obligations in connection with vesting of
restricted stock units issued to employees and (iii) the surrender to
Pfizer of 64,829 shares of common stock to satisfy tax withholding
obligations in connection with the vesting of performance-contingent share
awards issued to employees.
|
|
1)
Exhibit 4.1
|
- |
Eighth
Supplemental Indenture, dated October 30, 2009, among Wyeth, Pfizer and
The Bank of New York Mellon, is incorporated by reference from our 8-K
report filed on November 3, 2009.
|
|
|
2)
Exhibit 12
|
-
|
Computation
of Ratio of Earnings to Fixed Charges
|
|
|
3)
Exhibit 15
|
-
|
Accountants’
Acknowledgement
|
|
|
4)
Exhibit 31.1
|
-
|
Certification
by the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
5)
Exhibit 31.2
|
-
|
Certification
by the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
6)
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
|
|
|
7)
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
|
|
|
8)
Exhibit 101:
|
|||
|
EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.LAB
EX-101.PRE
EX-101.DEF
|
XBRL
Instance Document
XBRL
Taxonomy Extension Schema
XBRL
Taxonomy Extension Calculation Linkbase
XBRL
Taxonomy Extension Label Linkbase
XBRL
Taxonomy Extension Presentation Linkbase
XBRL
Taxonomy Extension Definition
Document
|
||
|
Pfizer
Inc.
|
|
|
(Registrant)
|
|
|
Dated: November
5, 2009
|
/s/
Loretta V. Cangialosi
|
|
Loretta
V. Cangialosi, Senior Vice President and
Controller
(Principal
Accounting Officer and
Duly
Authorized Officer)
|