Pfizer 2011 Annual Report Download - page 9

Financial Review
Pfizer Inc. and Subsidiary Companies
Our Strategy
We believe that our medicines provide significant value for both healthcare providers and patients, not only from the improved
treatment of diseases but also from a reduction in other healthcare costs, such as emergency room or hospitalization costs, as well
as improvements in health, wellness and productivity. We continue to actively engage in dialogues about the value of our products
and how we can best work with patients, physicians and payers to prevent and treat disease and improve outcomes. We will work
within the current legal and pricing structures, as well as continue to review our pricing arrangements and contracting methods with
payers, to maximize access to patients and minimize any adverse impact on our revenues.
If a decision is made to separate Animal Health and Nutrition from the Company, then, following those separations, Pfizer will be a
global biopharmaceutical company with a portfolio of innovative in-line products and a productive R&D organization; a portfolio of
unpatented products that help meet the global need for less expensive, quality medicines; and a complementary Consumer
Healthcare business with several well-known brands.
In response to the challenging operating environment, we have taken and continue to take many steps to strengthen our Company
and better position ourselves for the future. We believe in a comprehensive approach to our challenges—organizing our business to
maximize research, development and commercial opportunities, improving the performance of our innovative core, making the right
capital allocation decisions, and protecting our intellectual property.
We continue to closely evaluate our global research and development function and pursue strategies to improve innovation and
overall productivity by prioritizing areas with the greatest scientific and commercial promise, utilizing appropriate risk/return profiles
and focusing on areas with the highest potential to deliver value in the near term and over time. To that end, our research primarily
focuses on five high-priority areas that have a mix of small and large molecules—immunology and inflammation; oncology;
cardiovascular, metabolic and endocrine diseases; neuroscience and pain; and vaccines. In addition to reducing the number of
disease areas of focus, we are realigning and reducing our research and development footprint, and outsourcing certain functions
that do not drive competitive advantage for Pfizer. As a result of these actions, we expect significant reductions in our annual
research and development expenses, which are reflected in our 2012 financial guidance, and we expect to incur significant costs,
which are also reflected in our 2012 financial guidance. For additional information, see the “Our Financial Guidance for 2012” and
“Costs and Expenses—Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity
Initiatives” sections of this Financial Review.
While a significant portion of R&D is done internally, we continue to seek to expand our pipeline by entering into agreements with
other companies to develop, license or acquire promising compounds, technologies or capabilities. Collaboration, alliance and
license agreements and acquisitions allow us to capitalize on these compounds to expand our pipeline of potential future products.
In addition, collaborations and alliances allow us to share risk and to access external scientific and technological expertise.
For information about our pending new drug applications (NDA) and supplemental filings, see the “Revenues—Product
Developments-Biopharmaceutical” section of this Financial Review.
Our acquisition strategy included the acquisition of Wyeth in 2009. We continue to build on our broad portfolio of businesses through
various business development transactions. See the “Our Business Development Initiatives” section of this Financial Review for
information on our recent transactions and strategic investments that we believe complement our businesses.
We continue to aggressively defend our patent rights against increasingly aggressive infringement whenever appropriate (see Notes
to Consolidated Financial Statements—Note 17. Commitments and Contingencies), and we will continue to support efforts that
strengthen worldwide recognition of patent rights while taking necessary steps to ensure appropriate patient access. In addition, we
will continue to employ innovative approaches to prevent counterfeit pharmaceuticals from entering the supply chain and to achieve
greater control over the distribution of our products, and we will continue to participate in the generics market for our products,
whenever appropriate, once they lose exclusivity.
We remain focused on achieving an appropriate cost structure for the Company. For information regarding our cost-reduction and
productivity initiatives, see the “Costs and Expenses—Restructuring Charges and Other Costs Associated with Acquisitions and
Cost-Reduction/Productivity Initiatives” section of this Financial Review.
Our strategy also includes directly enhancing shareholder value through dividends and share repurchases. On December 12 2011,
our Board of Directors declared a first-quarter 2012 dividend of $0.22 per share, an increase from the $0.20 per-share quarterly
dividend paid during 2011. Also on December 12, 2011, our Board of Directors authorized a new $10 billion share-repurchase plan.
We expect to repurchase approximately $5 billion of our common stock during 2012, with the remaining authorized amount available
in 2013 and beyond.
8 2011 Financial Report