Pfizer 2010 Annual Report Download - page 34

Financial Review
Pfizer Inc. and Subsidiary Companies
expects to submit the AVERROES and ARISTOTLE studies together in the U.S., which will cover the broadest spectrum of patients
in one single dossier. The ARISTOTLE trial is event driven. As such, it is not possible to predict with certainty when the results of the
trial will be available. BMS expects to have top-line data from ARISTOTLE in the second quarter of 2011 and to submit in the U.S.
and the EU late in the third quarter or in the fourth quarter of 2011 depending on the results of the trial.
In November 2010, we and BMS discontinued the Phase 3 APPRAISE-2 clinical trial in patients with recent acute coronary
syndrome (ACS) treated with apixaban or placebo in addition to mono or dual antiplatelet therapy. The study was stopped early
based on the recommendation of an independent DMC due to clear evidence of a clinically important increase in bleeding among
patients randomized to apixaban, which was not offset by clinically meaningful reductions in ischemic events.
Our collaboration with Janssen AI on bapineuzumab, a potential treatment for Alzheimer’s disease, continues with four Phase 3
studies. In December 2010, Janssen AI confirmed that enrollment was complete for its two Phase 3 North American studies (301
and 302), including the biomarker sub studies. The other two Phase 3 global studies (3000 and 3001) continue to enroll. In April
2010, Johnson & Johnson announced that the two Janssen AI North American studies would be completed (last patient out) in
mid-2012. We announced in May 2010 that we expect that the last patient will have completed our two global 18-month trials,
including associated biomarker studies, in 2014.
In January 2011, we initiated the rolling submission of an NDA to the FDA for crizotinib (PF-02341066), an oral anaplastic lymphoma
kinase (ALK) and c-MET inhibitor for the treatment of patients with advanced non-small-cell lung cancer whose tumors are
ALK-positive. We expect to complete the submission in the first half of 2011.
In March 2010, Pfizer and Medivation, Inc. announced that a Phase 3 trial of Dimebon (latrepiridine) did not meet its co-primary or
secondary endpoints. Subsequently, we and Medivation, Inc. agreed to discontinue the CONSTELLATION and CONTACT Phase 3
trials in patients with moderate-to-severe Alzheimer’s disease. The two companies continue to investigate Dimebon’s potential
clinical benefit in the 12-month Phase 3 CONCERT trial in patients with mild-to-moderate Alzheimer’s disease and the six-month
Phase 3 HORIZON trial in patients with Huntington’s disease. In December 2010, we and Medivation, Inc. announced that patient
enrollment was completed on November 30, 2010, in the CONCERT study.
Following requests by the FDA in 2010, we suspended worldwide the osteoarthritis, chronic low back pain and painful diabetic
peripheral neuropathy studies of tanezumab. The FDA’s requests followed a small number of reports of osteoarthritis patients
treated with tanezumab who experienced the worsening of osteoarthritis leading to joint replacement and also reflected the FDA’s
concerns regarding the potential for such events in other patient populations. We subsequently terminated the osteoarthritis studies
of tanezumab. In December 2010, the FDA placed a clinical hold on all other anti-NGF therapies under clinical investigation in the
U.S., including our study for chronic pancreatitis. Studies of tanezumab in cancer pain were allowed to continue. We continue to
work with the FDA to reach an understanding about the appropriate scope of continued clinical investigation of tanezumab.
In December 2009, we discontinued a Phase 3 trial of figitumumab in first-line treatment of advanced non-small-cell lung cancer for
futility. In March 2010, we discontinued a Phase 3 trial of figitumumab in second/third line treatment of advanced non-small-cell lung
cancer for futility. After a detailed evaluation of all available figitumumab data, we decided to stop further clinical investigation of
figitumumab. No safety events led to this decision.
Additional product-related programs are in various stages of discovery and development. Also, see the discussion in the “Our
Business Development Initiatives” section of this Financial Review.
Costs and Expenses
Cost of Sales
2010 vs. 2009
Cost of sales increased 83% in 2010, compared to 2009, primarily as a result of:
•purchase accounting charges of approximately $2.9 billion in 2010, compared to approximately $970 million in 2009, primarily reflecting
the fair value adjustments to inventory acquired from Wyeth that was subsequently sold;
•a write-off of inventory of $212 million (which includes a purchase accounting fair value adjustment of $104 million), primarily related to
biopharmaceutical inventory acquired from Wyeth that became unusable after the acquisition date;
•the inclusion of Wyeth’s manufacturing operations for a full year in 2010, compared to part of the year in 2009; and
•the change in the mix of products and businesses as a result of the Wyeth acquisition,
partially offset by:
•lower costs as a result of our cost-reduction initiatives.
Foreign exchange had a minimal impact on cost of sales during 2010.
2009 vs. 2008
Cost of sales increased 10% in 2009 compared to 2008 primarily as a result of:
•purchase accounting charges of approximately $970 million primarily related to the fair value adjustments to inventory acquired from
Wyeth that subsequently was sold;
32 2010 Financial Report