[July 29, 2014] |
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PFIZER REPORTS SECOND-QUARTER 2014 RESULTS
NEW YORK --(Business Wire)--
Pfizer Inc. (NYSE:PFE) reported financial results for second-quarter
2014. At the beginning of fiscal year 2014, the company began managing
its commercial operations through a new global commercial structure
consisting of three operating segments: the Global Innovative
Pharmaceutical segment (GIP)(3); the Global Vaccines,
Oncology and Consumer Healthcare segment (VOC)(3); and
the Global Established Pharmaceutical segment (GEP)(3).
Financial results for each of these segments are presented in the Operating
Segment Information section. As a result of the full disposition of
Zoetis Inc. (Zoetis) on June 24, 2013, the financial
results of the Animal Health business are reported as a discontinued
operation in the consolidated statements of income for the
second-quarter and first six months of 2013. Results are summarized
below.
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OVERALL RESULTS
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($ in millions, except per share amounts)
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Second-Quarter
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Six Months
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2014
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2013
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Change
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2014
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2013
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Change
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Reported Revenues(1)
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$
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12,773
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$
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12,973
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(2
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%)
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$
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24,126
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$
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25,383
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(5
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%)
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Adjusted Income(2)
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3,769
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4,003
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(6
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%)
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7,434
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7,743
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(4
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%)
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Adjusted Diluted EPS(2)
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0.58
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0.56
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4
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%
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1.15
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1.08
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6
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%
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Reported Net Income(1)
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2,912
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14,095
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(79
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%)
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5,241
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16,845
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(69
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%)
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Reported Diluted EPS(1)
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0.45
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1.98
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(77
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%)
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0.81
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2.34
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(65
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%)
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REVENUES
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($ in millions) Favorable/(Unfavorable)
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Second-Quarter
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Six Months
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2014
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2013
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% Change
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2014
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2013
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% Change
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Total
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Oper.
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Total
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Oper.
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GEP(3)
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$
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6,513
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$
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6,921
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(6
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%)
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(5
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$
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12,503
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$
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13,782
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(9
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%)
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(7
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%)
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GIP(3)
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3,547
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3,726
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(5
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%)
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(5
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%)
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6,623
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7,032
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(6
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%)
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(5
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%)
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Global Vaccines(3)
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1,097
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970
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13
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%
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14
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%
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2,022
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1,893
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7
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9
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%
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Consumer Healthcare(3)
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912
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800
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14
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%
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15
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%
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1,673
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1,611
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4
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%
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6
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%
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Global Oncology(3)
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570
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493
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16
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%
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16
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%
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1,058
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949
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11
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12
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%
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Other(4)
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134
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63
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*
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*
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247
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116
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*
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*
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Total
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$
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12,773
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$
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12,973
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(2
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%)
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(1
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%)
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$
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24,126
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$
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25,383
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(5
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%)
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(3
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%)
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* Calculation not meaningful.
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SELECTED TOTAL COMPANY ADJUSTED COSTS AND EXPENSES(2)
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($ in millions) (Favorable)/Unfavorable
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Second-Quarter
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Six Months
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2014
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2013
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% Change
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2014
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2013
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% Change
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Total
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Oper.
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Total
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Oper.
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Cost of Sales(2)
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$
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2,320
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$
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2,194
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6
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%
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6
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%
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$
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4,306
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$
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4,423
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(3
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-
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Percent of Revenues(2)
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18.3
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%
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16.9
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%
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N/A
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N/A
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17.9
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%
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17.4
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%
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N/A
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N/A
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SI&A Expenses(2)
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3,486
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3,550
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(2
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%)
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(1
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%)
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6,506
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6,728
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(3
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%)
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(2
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%)
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R&D Expenses(2)
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1,714
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1,521
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13
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%
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13
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%
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3,326
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3,139
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6
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%
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6
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%
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Total
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$
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7,520
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$
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7,265
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4
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%
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4
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%
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$
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14,138
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$
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14,290
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(1
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%)
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-
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Effective Tax Rate(2)
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27.9
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%
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27.9
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%
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26.5
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%
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27.4
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%
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2014 FINANCIAL GUIDANCE(5)
Certain financial guidance components have been updated to reflect
performance in the first six months of the year as well as the following
factors:
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Adjusted Revenues(2): The expected negative impact from
anticipated multi-source generic competition for Celebrex in the U.S.
beginning in December 2014. In addition to the approximate one month
of multi-source generic competition, Celebrex revenues also are
expected to be negatively impacted in fourth-quarter 2014 by
associated wholesaler and retailer destocking.
-
Adjusted SI&A Expenses(2): The expected reduction in
promotional spending for Celebrex in second-half 2014 attributable to
the aforementioned anticipated multi-source generic competition in the
U.S. beginning in December 2014.
-
Adjusted R&D Expenses(2): The impact from the planned
$80 million upfront payment to Cellectis SA (Cellectis) associated
with the recently announced global strategic collaboration as well as
higher expected expenses related to the planned acceleration of
certain late-stage clinical programs, including palbociclib and
bococizumab, among other programs.
-
Adjusted Other (Income)/Deductions(2): The favorable
impacts of lower expected net interest expense over the remainder of
2014 as well as gains realized in the first six months of 2014 on
sales of product rights and of investments in equity securities, among
various other factors.
-
Reported Diluted EPS(1): The negative impact from charges
related to certain legal matters, primarily related to Neurontin,
incurred in first-quarter 2014.
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Adjusted Revenues(2)
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$48.7 to $50.7 billion
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(previously $49.2 to $51.2 billion)
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Adjusted Cost of Sales(2) as a Percentage of Adjusted
Revenues(2)
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19.0% to 20.0%
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Adjusted SI&A Expenses(2)
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$13.3 to $14.3 billion
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(previously $13.5 to $14.5 billion)
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Adjusted R&D Expenses(2)
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$6.7 to $7.2 billion
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(previously $6.4 to $6.9 billion)
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Adjusted Other (Income)/Deductions(2)
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Approximately ($200 million) of income
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(previously approx. $100 million of deductions)
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Effective Tax Rate on Adjusted Income(2)
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Approximately 27.0%
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Reported Diluted EPS(1)
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$1.47 to $1.62
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(previously $1.57 to $1.72)
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Adjusted Diluted EPS(2)
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$2.20 to $2.30
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EXECUTIVE COMMENTARY
Ian Read, Chairman and Chief Executive Officer, stated, "I am pleased
with our operating performance to date. Our recently launched products
continued to gain traction during the quarter while our mid- and
late-stage pipeline continued to progress with a regulatory submission
in the U.S. completed for our meningitis B vaccine candidate and our
palbociclib regulatory submission in the U.S. underway. We also look
forward to the recently announced meeting in August of the U.S. Centers
for Disease Control and Prevention's (CDC) Advisory Committee on
Immunization Practices (ACIP) to evaluate and make a recommendation
regarding usage of our Prevnar 13 vaccine in the adult population. In
addition, we also announced targeted business development transactions
within our Global Oncology(3) and GEP(3)
businesses."
"I continue to see Pfizer as well positioned to effectively execute on
our strategy to further strengthen each of our businesses on a global
basis and deliver value to all of our stakeholders," Mr. Read concluded.
Frank D'Amelio, Chief Financial Officer, stated, "Overall, I am pleased
with our second-quarter 2014 financial results despite the continued
negative impact from product losses of exclusivity and the termination
of certain co-promotion collaborations. We updated our 2014 adjusted
revenue(2) guidance to reflect the anticipated negative
impact associated with expected multi-source generic competition for
Celebrex in the U.S. beginning in December 2014. Importantly, we
reaffirmed our adjusted diluted EPS(2) guidance, absorbing an
approximate $0.05 per share anticipated negative impact from this loss
of exclusivity and an approximate $0.01 per share negative impact from
the planned upfront payment to Cellectis, which reflects our financial
flexibility and confidence in the business going forward. Given our
strong operating cash flow, we continue to expect to repurchase
approximately $5 billion of our shares this year, with $2.9 billion
repurchased through July 28. These 2014 repurchases and planned
repurchases are expected to reduce total shares outstanding by
approximately 100 million shares by the end of the year after factoring
in actual and projected dilution related to employee compensation
programs."
QUARTERLY FINANCIAL HIGHLIGHTS (Second-Quarter 2014 vs.
Second-Quarter 2013)
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Reported revenues(1) decreased $200 million, or 2%, which
reflects an operational decline of $113 million, or 1%, and the
unfavorable impact of foreign exchange of $87 million, or 1%. The
operational decrease was primarily due to the expiration of the
co-promotion term of the collaboration agreement for Enbrel in the
U.S. and Canada, the ongoing termination of the Spiriva collaboration
in certain countries as well as the loss of exclusivity and subsequent
multi-source generic competition for Detrol LA in the U.S. and other
product losses of exclusivity in certain markets. Revenues in
developed markets were favorably impacted by the operational growth of
certain key products including: Lyrica, Nexium 24HR in the U.S. as a
result of its recent launch, Prevnar, Eliquis, Xeljanz, Celebrex,
Xalkori and Inlyta. Additionally, revenues in emerging markets
increased 11% operationally, including strong operational growth from
Prevenar as well as from Lipitor, primarily in China. Second-quarter
2014 reported revenues(1) included $71 million from the
transitional manufacturing and supply agreements with Zoetis.
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GEP(3) revenues decreased 5% operationally, primarily due
to the loss of exclusivity and subsequent launch of multi-source
generic competition for Detrol LA in the U.S. in January 2014, Viagra
in most major European markets in June 2013 as well as Aricept in
Canada in December 2013. Additionally, the co-promotion collaboration
for Spiriva has terminated in most countries, including the U.S. in
April 2014, or has entered its final year in other major markets,
which, per the terms of the collaboration agreement, has resulted in a
decline in Pfizer's share of Spiriva revenues. These declines were
partially offset by the strong operational performance of Celebrex
worldwide, Lyrica in Europe as well as Lipitor, primarily in China.
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GIP(3) revenues declined 5% operationally, primarily due to
the expiration of the co-promotion term of the collaboration agreement
for Enbrel in the U.S. and Canada on October 31, 2013; for a 36-month
period thereafter, Pfizer is entitled to royalty payments that have
been and are expected to continue to be significantly less than the
share of Enbrel profits prior to the expiration of the co-promotion
term, and those royalty payments are and will be included in Other
(income)/deductions-net rather than in Revenues. GIP(3)
revenues were also negatively impacted by certain product losses of
exclusivity, primarily for Lyrica in Canada in February 2013. These
declines were partially offset by strong operational growth from
Lyrica, primarily in the U.S. and Japan, as well as the performance of
recently launched products, including Eliquis globally and Xeljanz
primarily in the U.S.
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VOC(3) revenues increased 15% operationally, reflecting the
following:
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Global Vaccines(3) revenues grew 14% operationally.
Prevnar 13 revenue in the U.S. increased 12%, driven by government
purchasing patterns and increased demand. International sales of the
Prevenar family were up 15% on an operational basis, primarily
reflecting increased shipments associated with the Global Alliance
for Vaccines and Immunization (GAVI) as well as the timing of
government purchases in various emerging markets compared with the
year-ago quarter.
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Consumer Healthcare(3) revenues increased 15%
operationally, primarily due to the launch of Nexium 24HR in the
U.S. in late-May 2014.
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Global Oncology(3) revenues increased 16% operationally,
primarily driven by the continued strong uptake of Xalkori and
Inlyta globally. Xalkori revenues were positively impacted by a
greater accumulation of patients on therapy as a result of an
increase in the testing rate for the anaplastic lymphoma kinase
(ALK) gene abnormality, which has led to more patients being
treated, as well as an extended duration of therapy. Inlyta revenues
were favorably impacted by continued increases in renal cell
carcinoma market share. This growth was partially offset by the
timing of purchases for Sutent in China.
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Adjusted cost of sales, adjusted SI&A expenses and adjusted R&D
expenses(2) in the aggregate increased 4% operationally.
Overall, they increased $255 million, or 4%, primarily reflecting:
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higher adjusted cost of sales(2), primarily reflecting
an unfavorable change in product mix;
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lower adjusted SI&A expense(2) as a result of
benefits from cost-reduction and productivity initiatives
partially offset by investments to support several recent product
launches; and
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higher adjusted R&D expense(2), primarily due to
recently initiated Phase 3 programs for bococizumab, ertugliflozin
and certain other new drug candidates as well as for studies of
Xeljanz and certain other products in potential new indications.
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The effective tax rate on adjusted income(2) was 27.9%,
consistent with the prior-year quarter, primarily reflecting the
favorable impact of the resolution in second-quarter 2014 of certain
tax positions, pertaining to prior years with various foreign tax
authorities, offset by an unfavorable change in the jurisdictional mix
of earnings.
-
The diluted weighted-average shares outstanding declined by 673
million shares, due to the company's ongoing share repurchase program
and the impact of the Zoetis exchange offer, which was completed on
June 24, 2013.
-
In addition to the aforementioned factors, second-quarter 2014
reported earnings were primarily impacted by the following:
Unfavorable impacts:
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the non-recurrence in second-quarter 2014 of income from
discontinued operations in the year-ago quarter attributable to the
company's Animal Health business, including the gain associated with
the full disposition of Zoetis; and
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the non-recurrence in second-quarter 2014 of income in the year-ago
quarter from a litigation settlement with Teva Pharmaceuticals
Industries Ltd. and Sun Pharmaceutical Industries Ltd. for
patent-infringement damages resulting from their "at-risk" launches
of generic Protonix in the U.S.
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Favorable impacts:
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lower acquisition-related costs, purchase accounting adjustments and
asset impairment charges compared to the prior-year quarter; and
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a lower effective tax rate, primarily due to the favorable impact of
the resolution in second-quarter 2014 of certain tax positions,
pertaining to prior years with various foreign tax authorities, a
favorable change in the jurisdictional mix of earnings as well as
the non-recurrence of the unfavorable tax liability attributable to
the income associated with the aforementioned patent litigation
settlement.
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RECENT NOTABLE DEVELOPMENTS
Product Developments
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Pfizer discussed with the CDC's ACIP at their scheduled June meeting
the results of the Community-Acquired Pneumonia Immunization Trial
in Adults (CAPiTA) as well as other considerations regarding a
potential expanded recommendation for Prevnar 13 use in adults.
Pfizer looks forward to continued dialogue with the ACIP as well as
its decision on a potential expanded recommendation at a meeting
scheduled for August 13, 2014.
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Pfizer announced that Prevenar 13 was approved in Japan for adults
65 years of age and older for the prevention of pneumococcal
disease caused by 13 S. pneumoniae serotypes covered
by the vaccine.
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Xeljanz (tofacitinib) -- Pfizer announced positive top-line
results from two pivotal Phase 3 clinical trials of tofacitinib in
adults with moderate-to-severe chronic plaque psoriasis. Pfizer
intends to submit a supplemental New Drug Application (sNDA) to the
U.S. Food and Drug Administration (FDA) seeking approval of
tofacitinib 5 mg and 10 mg twice-daily for the treatment of adults
with moderate-to-severe chronic plaque psoriasis by early 2015.
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Eliquis -- The European Commission approved Eliquis for the
treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE),
and the prevention of recurrent DVT and PE in adults.
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BeneFIX -- Pfizer announced positive top-line results of a
Phase 3 study comparing a prophylaxis regimen of BeneFIX Coagulation
Factor IX (Recombinant) 100 IU/kg once-weekly to on-demand treatment
in people with moderately severe to severe hemophilia B. The top-line
results of the study showed that the primary study endpoint was met
and hemophilia B patients taking once-weekly BeneFIX (100 IU/kg)
showed a statistically significant reduction in the annualized
bleeding rate relative to on-demand treatment with BeneFIX. Adverse
events observed in the study, for both the prophylaxis and on-demand
periods, were consistent with the known adverse event profile of
BeneFIX. Complete results from this study will be submitted for
presentation at upcoming medical congresses and submitted for
publication in a peer-reviewed journal.
-
Embeda -- Pfizer recently received notification from the FDA
that the July 2014 Prescription Drug User Fee Act date was extended by
three months to October 2014 with respect to an sNDA for Embeda
(morphine sulfate and naltrexone hydrochloride) extended-release
capsules. Pfizer submitted the sNDA in September 2013 seeking to
update the Embeda label to include data from abuse-deterrent studies.
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Celebrex -- In March 2014, the U.S. District Court for the
Eastern District of Virginia granted summary judgment invalidating
Pfizer's reissue patent (U.S. Patent No. RE44,048), covering methods
of treating osteoarthritis and other approved conditions with
celecoxib, the active ingredient in Celebrex. Pfizer has appealed this
decision. Several generic drug companies previously filed abbreviated
new drug applications with the FDA seeking approval to market their
generic forms of celecoxib in the U.S. beginning on May 30, 2014, when
Pfizer's basic Celebrex compound patent (including the six-month
pediatric exclusivity period) expired. This was 18 months prior to the
December 2, 2015 expiration of the reissue patent (including the
six-month pediatric exclusivity period). Since the court's decision,
Pfizer has entered into settlement agreements with Teva
Pharmaceuticals USA, Inc., Watson Laboratories, Inc. (a subsidiary of
Actavis plc), and Mylan Pharmaceuticals, Inc. granting them licenses
to launch generic versions of celecoxib in the U.S. beginning in
December 2014, or earlier under certain circumstances. Under certain
conditions, the licenses may be royalty-bearing through the remaining
term of the reissue patent. The FDA approved the first generic
versions of celecoxib in May 2014.
-
Nexium 24HR -- Pfizer introduced Nexium 24HR (esomeprazole, 20
mg) for over-the-counter use in the U.S. for the treatment of frequent
heartburn in adults 18 years of age and older. In 2012, Pfizer
acquired exclusive global rights from AstraZeneca to market
non-prescription Nexium.
Pipeline Developments
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Palbociclib (PD-0332991) -- In June 2014, Pfizer initiated its
rolling submission of a New Drug Application (NDA) to the FDA seeking
approval for palbociclib, combined with letrozole, as a first-line
systemic treatment for post-menopausal women with estrogen receptor
positive (ER+), human epidermal growth factor receptor 2 negative
(HER2-) locally advanced or metastatic breast cancer. The submission
is based on the final results of PALOMA-1, a randomized, Phase 2
clinical trial comparing the combination of palbociclib plus letrozole
versus letrozole alone in this population of patients. Pfizer expects
to complete its submission in August 2014.
-
rLP2086 (Meningococcal Serogroup B Bivalent Recombinant Lipoprotein
Vaccine)
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In June 2014, Pfizer announced that it submitted a Biologics
License Application (BLA) to the FDA for rLP2086, the company's
vaccine candidate for the prevention of invasive meningococcal
disease caused by Neisseria meningitidis serogroup B in 10
to 25 year olds. The FDA has a 60-day filing review period from
the date of the BLA submission to determine whether the BLA is
complete and acceptable for filing. Pfizer will communicate the
FDA's decision once available.
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Pfizer announced results from two Phase 2 studies of rLP2086. In
both studies, rLP2086 was observed to generate bactericidal
responses, a measurement of functional immune response, against
diverse meningococcal serogroup B test strains following either
two or three doses. Also, in the study evaluating
co-administration of rLP2086 and a diphtheria, tetanus, pertussis
and inactivated polio vaccine (dTaP-IPV), no impact was observed
on the immune response to the dTaP-IPV vaccine. The most common
local reaction observed in both studies was mild-to-moderate
injection site pain; headache and fatigue were the most common
systemic events in both studies. The data were presented at the 32nd
Annual Meeting of the European Society for Paediatric Infectious
Diseases (ESPID 2014).
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Corporate Developments
-
Pfizer announced on May 26, 2014 that it did not intend to make an
offer for AstraZeneca. The announcement was made in accordance with
Rule 2.8 of the U.K. City Code on Takeovers and Mergers (the "Code").
As a result of this announcement, Pfizer, together with any party
acting in concert with Pfizer, is bound by the restrictions contained
in Rule 2.8 of the Code.
-
Pfizer and Cellectis announced that they have entered into a global
strategic collaboration to develop Chimeric Antigen Receptor T-cell
(CAR-T) immunotherapies in the field of oncology directed at select
cellular surface antigen targets. Cellectis will receive an upfront
payment of $80 million, as well as funding for research and
development costs associated with Pfizer-selected targets and the four
Cellectis-selected targets within the collaboration. Cellectis is
eligible to receive development, regulatory and commercial milestone
payments of up to $185 million per Pfizer product. Cellectis is also
eligible to receive tiered royalties on net sales of any products that
are commercialized by Pfizer. Additionally, Pfizer entered into an
agreement to acquire approximately 10% of the Cellectis capital
through the purchase of newly issued shares at 9.25 Euro per share,
subject to approval by Cellectis' shareholders. In the event the sale
of equity is not approved by the Cellectis shareholders, Pfizer has
the option to terminate the collaboration agreement.
-
Pfizer and InnoPharma, Inc. (InnoPharma), a privately held
pharmaceutical development company, announced that they have entered
into an agreement under which Pfizer will acquire InnoPharma. Under
the terms of the agreement, Pfizer will acquire InnoPharma for an
upfront cash payment of $225 million and up to $135 million of
contingent milestone payments. InnoPharma's current portfolio includes
10 generic products approved by the FDA. InnoPharma also has a
pipeline of 19 products filed with the FDA and more than 30 injectable
and ophthalmic products under development. The closing of the
transaction is subject to U.S. regulatory approval and is expected to
occur during third-quarter 2014.
Please find Pfizer's press release and associated financial tables,
including reconciliations of certain GAAP reported to non-GAAP adjusted
information, at the following hyperlink: http://www.pfizer.com/system/files/Q2_2014_PFE_Earnings_Press_Release_gpjte7kbxgpj4.pdf
(Note: If clicking on the above link does not open up a new web page,
you may need to cut and paste the above URL into your browser's address
bar.)
For additional details, see the associated financial schedules and
product revenue tables attached to the press release located at the
hyperlink referred to above and the attached disclosure notice.
(1)
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"Reported Revenues" is defined as revenues in accordance with U.S.
generally accepted accounting principles (GAAP). "Reported Net
Income" is defined as net income attributable to Pfizer Inc. in
accordance with U.S. GAAP. "Reported Diluted EPS" is defined as
reported diluted EPS attributable to Pfizer Inc. common shareholders
in accordance with U.S. GAAP.
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(2)
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"Adjusted Income" and its components and "Adjusted Diluted
Earnings Per Share (EPS)" are defined as reported U.S. GAAP net
income(1) and its components and reported diluted EPS(1)
excluding purchase accounting adjustments, acquisition-related
costs, discontinued operations and certain significant items.
Adjusted Revenues, Adjusted Cost of Sales, Adjusted Selling,
Informational and Administrative (SI&A) expenses, Adjusted
Research and Development (R&D) expenses and Adjusted Other
(Income)/Deductions are income statement line items prepared on
the same basis as, and therefore components of, the overall
adjusted income measure. As described under Adjusted Income
in the Management's Discussion and Analysis of Financial Condition
and Results of Operations section of Pfizer's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 30, 2014, management
uses adjusted income, among other factors, to set performance
goals and to measure the performance of the overall company. We
believe that investors' understanding of our performance is
enhanced by disclosing this measure. See the accompanying
reconciliations of certain GAAP reported to non-GAAP adjusted
information for the second quarter and first six months of 2014
and 2013, as well as reconciliations of full-year 2014 guidance
for adjusted income and adjusted diluted EPS to full-year 2014
guidance for reported net income(1) and reported
diluted EPS(1). The adjusted income and its components
and adjusted diluted EPS measures are not, and should not be
viewed as, substitutes for U.S. GAAP net income and its components
and diluted EPS.
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(3)
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For a description of the revenues in each business, see the "Our
Strategy--Commercial Operations" sub-section in the Overview of
Our Performance, Operating Environment, Strategy and Outlook
section of Pfizer's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 30, 2014.
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(4)
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Other includes revenues generated from Pfizer CentreSource, our
contract manufacturing and bulk pharmaceutical chemical sales
organization, and also includes, in 2014, the revenues related to
our transitional manufacturing and supply agreements with Zoetis.
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(5)
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The 2014 financial guidance reflects the following:
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Does not assume the completion of any business development
transactions not completed as of June 29, 2014, including any one-time
upfront payments associated with such transactions, except for the
planned $80 million upfront payment to Cellectis.
-
Excludes the potential effects of the resolution of litigation-related
matters not substantially resolved as of June 29, 2014.
-
Exchange rates assumed are a blend of the actual exchange rates in
effect through June 29, 2014 and the mid-July 2014 exchange rates for
the remainder of the year.
-
Assumes diluted weighted-average shares outstanding of approximately
6.4 billion shares.
-
Revenues and cost of sales from the transitional manufacturing and
supply agreements with Zoetis have been excluded from the applicable
Adjusted components of the financial guidance.
-
Reconciliation of the 2014 Adjusted Income(2) and Adjusted
Diluted EPS(2) guidance to the 2014 Reported Net Income
Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to
Pfizer Inc. common shareholders guidance:
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($ in billions, except per share amounts)
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Income/(Expense)
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Net Income
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Diluted EPS
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Adjusted income/diluted EPS(2) guidance
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$14.1 - $14.8
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$2.20 - $2.30
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Purchase accounting impacts of transactions completed as of June 29,
2014
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(2.8)
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(0.43)
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Restructuring and implementation costs
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(1.1) - (1.4)
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(0.17) - (0.22)
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Certain other items incurred through June 29, 2014
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(0.6)
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(0.09)
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Discontinued operations
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0.1
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0.01
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Reported net income attributable to Pfizer Inc./diluted EPS(1)
guidance
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$9.4 - $10.4
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$1.47 - $1.62
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DISCLOSURE NOTICE: The information contained in this earnings release
and the attachments is as of July 29, 2014. We assume no obligation to
update forward-looking statements contained in this earnings release and
the attachments as a result of new information or future events or
developments.
This earnings release and the attachments contain forward-looking
statements about our future operating and financial performance,
business plans and prospects, in-line products and product candidates,
strategic reviews, capital allocation, business-development plans, and
plans relating to share repurchases and dividends, among other things,
that involve substantial risks and uncertainties. You can identify these
statements by the fact that they use future dates or use words such as
"will," "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "target," "forecast," "goal," "objective," "aim" and other
words and terms of similar meaning. Among the factors that could cause
actual results to differ materially from past results and future plans
and projected future results are the following:
-
the outcome of research and development activities, including, without
limitation, the ability to meet anticipated clinical trial
commencement and completion dates, regulatory submission and approval
dates, and launch dates for product candidates, as well as the
possibility of unfavorable clinical trial results, including
unfavorable new clinical data and additional analyses of existing
clinical data;
-
decisions by regulatory authorities regarding whether and when to
approve our drug applications, which will depend on the assessment by
such regulatory authorities of the benefit-risk profile suggested by
the totality of the efficacy and safety information submitted; and
decisions by regulatory authorities regarding labeling, ingredients
and other matters that could affect the availability or commercial
potential of our products;
-
the speed with which regulatory authorizations, pricing approvals and
product launches may be achieved;
-
the outcome of post-approval clinical trials, which could result in
the loss of marketing approval for a product or changes in the
labeling for, and/or increased or new concerns about the safety or
efficacy of, a product that could affect its availability or
commercial potential;
-
the success of external business-development activities, including the
ability to satisfy the conditions to closing of announced transactions
in the anticipated timeframe or at all;
-
competitive developments, including the impact on our competitive
position of new product entrants, in-line branded products, generic
products, private label products and product candidates that treat
diseases and conditions similar to those treated by our in-line drugs
and drug candidates;
-
the implementation by the FDA of an abbreviated legal pathway to
approve biosimilar products, which could subject our biologic products
to competition from biosimilar products in the U.S., with attendant
competitive pressures, after the expiration of any applicable
exclusivity period and patent rights;
-
the ability to meet generic and branded competition after the loss of
patent protection for our products or competitor products;
-
the ability to successfully market both new and existing products
domestically and internationally;
-
difficulties or delays in manufacturing;
-
trade buying patterns;
-
the impact of existing and future legislation and regulatory
provisions on product exclusivity;
-
trends toward managed care and healthcare cost containment;
-
the impact of the U.S. Budget Control Act of 2011 (the Budget Control
Act) and the deficit-reduction actions to be taken pursuant to the
Budget Control Act in order to achieve the deficit-reduction targets
provided for therein, and the impact of any broader deficit-reduction
efforts;
-
the impact of U.S. healthcare legislation enacted in 2010-the Patient
Protection and Affordable Care Act, as amended by the Health Care and
Education Reconciliation Act-and of any modification or repeal of any
of the provisions thereof;
-
U.S. federal or state legislation or regulatory action affecting,
among other things: pharmaceutical product pricing, reimbursement or
access, including under Medicaid, Medicare and other publicly funded
or subsidized health programs; the importation of prescription drugs
from outside the U.S. at prices that are regulated by governments of
various foreign countries; direct-to-consumer advertising and
interactions with healthcare professionals; and the use of comparative
effectiveness methodologies that could be implemented in a manner that
focuses primarily on the cost differences and minimizes the
therapeutic differences among pharmaceutical products and restricts
access to innovative medicines; as well as pricing pressures as a
result of highly competitive insurance markets;
-
legislation or regulatory action in markets outside the U.S. affecting
pharmaceutical product pricing, reimbursement or access, including, in
particular, continued government-mandated price reductions for certain
biopharmaceutical products in certain European and emerging market
countries and Japan and government-imposed access restrictions in
certain countries;
-
the exposure of our operations outside the U.S. to possible capital
and exchange controls, expropriation and other restrictive government
actions, changes in intellectual property legal protections and
remedies, as well as political unrest and unstable governments and
legal systems;
-
contingencies related to actual or alleged environmental contamination;
-
claims and concerns that may arise regarding the safety or efficacy of
in-line products and product candidates;
-
any significant breakdown, infiltration, or interruption of our
information technology systems and infrastructure;
-
legal defense costs, insurance expenses, settlement costs, the risk of
an adverse decision or settlement and the adequacy of reserves related
to product liability, patent protection, government investigations,
consumer, commercial, securities, antitrust, environmental and tax
issues, ongoing efforts to explore various means for resolving
asbestos litigation, and other legal proceedings;
-
our ability to protect our patents and other intellectual property,
both domestically and internationally;
-
interest rate and foreign currency exchange rate fluctuations,
including the impact of possible currency devaluations in countries
experiencing high inflation rates;
-
governmental laws and regulations affecting domestic and foreign
operations, including, without limitation, tax obligations and changes
affecting the tax treatment by the U.S. of income earned outside of
the U.S. that may result from pending and possible future proposals;
-
any significant issues involving our largest wholesaler customers,
which account for a substantial portion of our revenues;
-
the possible impact of the increased presence of counterfeit medicines
in the pharmaceutical supply chain on our revenues and on patient
confidence in the integrity of our medicines;
-
any significant issues that may arise related to the outsourcing of
certain operational and staff functions to third parties, including
with regard to quality, timeliness and compliance with applicable
legal requirements and industry standards;
-
changes in U.S. generally accepted accounting principles;
-
uncertainties related to general economic, political, business,
industry, regulatory and market conditions including, without
limitation, uncertainties related to the impact on us, our customers,
suppliers and lenders and counterparties to our foreign-exchange and
interest-rate agreements of challenging global economic conditions and
recent and possible future changes in global financial markets; and
the related risk that our allowance for doubtful accounts may not be
adequate;
-
any changes in business, political and economic conditions due to
actual or threatened terrorist activity in the U.S. and other parts of
the world, and related U.S. military action overseas;
-
growth in costs and expenses;
-
changes in our product, segment and geographic mix; and
-
the impact of acquisitions, divestitures, restructurings, internal
reorganizations, product recalls and withdrawals and other unusual
items, including our ability to realize the projected benefits of our
cost-reduction and productivity initiatives, including those related
to our research and development organization, and of the internal
separation of our commercial operations into three new global
businesses.
A further list and description of risks, uncertainties and other matters
can be found in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2013 and in our subsequent reports on Form 10-Q, in each
case including in the sections thereof captioned "Forward-Looking
Information and Factors That May Affect Future Results" and "Item 1A.
Risk Factors", and in our subsequent reports on Form 8-K.
The operating segment information provided in this earnings release and
the attachments does not purport to represent the revenues, costs and
income from continuing operations before provision for taxes on income
that each of our operating segments would have reported had each segment
operated as a standalone company during the periods presented.
This earnings release may include discussion of certain clinical studies
relating to various in-line products and/or product candidates. These
studies typically are part of a larger body of clinical data relating to
such products or product candidates, and the discussion herein should be
considered in the context of the larger body of data.
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