Pfizer 2011 Annual Report Download - page 11

Financial Review
Pfizer Inc. and Subsidiary Companies
As a result of our acquisition of King, we recorded Inventories of $340 million, Property, plant and equipment (PP&E) of $412 million,
Identifiable intangible assets of $2.1 billion and Goodwill of $765 million. For additional information, see Notes to Consolidated
Financial Statements—Note 2B. Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Acquisition
of King Pharmaceuticals, Inc.
As of the acquisition date, Identifiable intangible assets included the following:
ODeveloped technology rights of approximately $1.8 billion, which includes EpiPen, Thrombin, Bicillin, Levoxyl, Skelaxin and Flector
Patch, among others.
OIn-Process Research and Development (IPR&D) of approximately $300 million, which includes Vanquix, Embeda and Remoxy,
among others.
•On November 8, 2010 we consummated our partnership to develop and commercialize generic medicines with Laboratório Teuto
Brasileiro S.A. (Teuto) a leading generics company in Brazil. As part of the transaction, we acquired a 40 percent equity stake in Teuto,
and entered into a series of commercial agreements. The partnership is enhancing our position in Brazil, a key emerging market, by
providing access to Teuto’s portfolio of products. Through this partnership, we have access to significant distribution networks in rural
and suburban areas in Brazil and the opportunity to register and commercialize Teuto’s products in various markets outside of Brazil.
For additional information, see also Notes to Consolidated Financial Statements—Note 2F. Acquisitions, Divestitures, Collaborative
Arrangements and Equity-Method Investments: Equity-Method Investments.
•On October 18, 2010, we entered into a strategic global agreement with Biocon, a biotechnology company based in India, for the
worldwide commercialization of Biocon’s biosimilar versions of insulin and insulin analog products: Recombinant Human Insulin,
Glargine, Aspart and Lispro. We will have exclusive rights to commercialize these products globally, with certain exceptions, including
co-exclusive rights for all of the products with Biocon in Germany, India and Malaysia. We will also have co-exclusive rights with
existing Biocon licensees with respect to certain of these products, primarily in a number of developing markets. Biocon will remain
responsible for the clinical development, manufacture and supply of these biosimilar insulin products, as well as for regulatory activities
to secure approval for these products in various markets.
•On October 6, 2010, we completed our acquisition of FoldRx Pharmaceuticals, Inc. (FoldRx), a privately held drug discovery and
clinical development company, whose portfolio includes clinical and preclinical programs for investigational compounds to treat
diseases caused by protein misfolding. FoldRx’s lead product candidate, Vyndaqel (tafamidis meglumine), was approved in the EU in
November 2011 and our new drug application was accepted for review in the U.S. in February 2012. This product is a first-in-class oral
therapy for the treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP), a progressively fatal genetic neurodegenerative
disease, for which liver transplant is the only treatment option currently available. Our acquisition of FoldRx is expected to strengthen
our presence in the growing rare medical disease market, which complements our Specialty Care unit.
For additional information regarding Vyndaqel (tafamidis meglumine), see the “Product Developments – Biopharmaceutical”
section of this Financial Review. For additional information about the acquisition, see Notes to Consolidated Financial
Statements—Note 2C. Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Other
Acquisitions.
•On October 30, 2009, we and GlaxoSmithKline plc (GSK) created a new company, ViiV Healthcare Limited (ViiV), which is focused
solely on research, development and commercialization of human immunodeficiency virus (HIV) medicines. We and GSK have
contributed certain HIV-related 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), and has a
pipeline of three medicines. ViiV has contracted R&D and manufacturing services directly from GSK and us and also has entered into a
research alliance agreement with GSK and us. Under this alliance, ViiV is investing 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. For additional information, see Notes to Consolidated Financial Statements––Note 2F. Acquisitions,
Divestitures, Collaborative Arrangements and Equity-Method Investments: Equity-Method Investments.
•On October 15, 2009 (the acquisition date), we acquired all of the outstanding equity of Wyeth in a cash-and-stock transaction, valued
at $50.40 per share of Wyeth common stock, or a total of approximately $68.2 billion, based on the closing market price of Pfizer
common stock on the acquisition date. In connection with our acquisition of Wyeth, we are required to divest certain animal health
assets. Certain of these assets were sold in 2009. In addition, in 2010, we completed the divestiture of certain animal health products
and related assets in Australia, China, the EU, Switzerland and Mexico, and in 2011, we divested certain animal health products and
related assets in South Korea. It is possible that additional divestitures of animal health assets may be required based on ongoing
regulatory reviews in other jurisdictions worldwide, but they are not expected to be significant to our business. For additional
information, see the “Acquisition of Wyeth” section of this Financial Review and see Notes to Consolidated Financial Statements—Note
2A. Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Acquisition of Wyeth.
Our Financial Guidance for 2012
We forecast 2012 revenues of $60.5 billion to $62.5 billion, Reported diluted earnings per common share (EPS) of $1.37 to $1.52
and Adjusted diluted EPS of $2.20 to $2.30. The current exchange rates assumed in connection with the 2012 financial guidance
are the mid-January 2012 exchange rates. For an understanding of Adjusted income, see the “Adjusted Income” section of this
Financial Review.
10 2011 Financial Report