Pfizer 2012 Annual Report Download - page 65

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
64
2012 Financial Report
XR received approval from the U.S. Food and Drug Administration on September 27, 2012, and was launched in the U.S. on January 14,
2013. The total consideration for the acquisition was approximately $442 million, which consisted of upfront payments to NextWave's
shareholders of about $278 million and contingent consideration with an estimated acquisition-date fair value of about $164 million. The
contingent consideration consists of up to $425 million in additional payments that are contingent upon attainment of certain revenue
milestones. In connection with this Established Products acquisition, we recorded approximately $516 million in Identifiable intangible assets,
consisting primarily of $472 million in Developed technology rights and $44 million in In-process research and development, $165 million in net
deferred tax liabilities and $91 million in Goodwill. The allocation of the consideration transferred to the assets acquired and the liabilities
assumed has not been finalized.
Nexium Over-the-Counter Rights
On August 13, 2012, we announced that we entered into an agreement with AstraZeneca for the global over-the-counter (OTC) rights for
Nexium, a leading prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. Under the terms of the
agreement, we acquired the exclusive global rights to market Nexium for the OTC indications, which are subject to regulatory approval. We
made an upfront payment of $250 million to AstraZeneca, and AstraZeneca is eligible to receive milestone payments of up to $550 million
based on product launches and level of sales, as well as royalty payments based on sales. The upfront payment for this Consumer Healthcare
asset acquisition was expensed and included in Research and development expenses in our consolidated statement of income for the year
ended December 31, 2012.
Alacer Corp.
On February 26, 2012, we completed our acquisition of Alacer Corp., a company that manufactures, markets and distributes Emergen-C, a
line of effervescent, powdered drink mix vitamin supplements that is the largest-selling branded vitamin C line in the U.S. In connection with
this Consumer Healthcare acquisition, we recorded $181 million in Identifiable intangible assets, consisting primarily of the Emergen-C
indefinite-lived brand, $69 million in net deferred tax liabilities and $192 million in Goodwill. The allocation of the consideration transferred to
the assets acquired and the liabilities assumed has been finalized.
Ferrosan Holding A/S
On December 1, 2011, we completed our acquisition of the consumer healthcare business of Ferrosan Holding A/S (Ferrosan), a Danish
company engaged in the sale of science-based consumer healthcare products, including dietary supplements and lifestyle products, primarily
in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. This acquisition is reflected in our consolidated
financial statements beginning in the first fiscal quarter of 2012. Our acquisition of Ferrosan’s consumer healthcare business increases our
presence in dietary supplements with a new set of brands and pipeline products. Also, we believe that the acquisition allows us to expand the
marketing of Ferrosan’s brands through Pfizer’s global footprint and provide greater distribution and scale for certain Pfizer brands, such as
Centrum and Caltrate, in Ferrosan’s key markets. In connection with this Consumer Healthcare acquisition, we recorded $362 million in
Identifiable intangible assets, consisting of indefinite-lived and finite-lived brands, $94 million in net deferred tax liabilities and $322 million in
Goodwill. The allocation of the consideration transferred to the assets acquired and the liabilities assumed has been finalized.
Excaliard
On November 30, 2011, we completed our acquisition of Excaliard Pharmaceuticals, Inc. (Excaliard), a privately owned biopharmaceutical
company. Excaliard's lead compound, EXC-001, a Phase 2 compound, is an antisense oligonucleotide designed to interrupt the process of
skin fibrosis by inhibiting expression of connective tissue growth factor (CTGF). The total consideration for the acquisition was approximately
$174 million, which consisted of an upfront payment to Excaliard's shareholders of about $86 million and contingent consideration with an
estimated acquisition-date fair value of about $88 million. The contingent consideration consists of up to $230 million in additional payments
that are contingent upon the attainment of certain regulatory and revenue milestones. Payments under the contingent consideration
arrangement were $30 million in 2012 as a regulatory milestone was reached. In connection with this Worldwide Research and Development
acquisition, we recorded approximately $257 million in Identifiable intangible assets––In-process research and development, approximately
$87 million in net deferred tax liabilities and approximately $8 million in Goodwill.
Icagen
On September 20, 2011, we completed our cash tender offer for the outstanding shares of Icagen, Inc. (Icagen), resulting in an approximate
70% ownership of the outstanding shares of Icagen, a biopharmaceutical company focused on discovery, development and commercialization
of novel orally-administered small molecule drugs that modulate ion channel targets. On October 27, 2011, we acquired all of the remaining
shares of Icagen. In connection with this Worldwide Research and Development acquisition, we recorded approximately $19 million in
Identifiable intangible assets.
King Pharmaceuticals, Inc.
Description of the Transaction
On January 31, 2011 (the acquisition date), we completed a tender offer for the outstanding shares of common stock of King at a purchase
price of $14.25 per share in cash and acquired approximately 92.5% of the outstanding shares. On February 28, 2011, we acquired all of the
remaining shares of King for $14.25 per share in cash. As a result, the total fair value of consideration transferred for King was approximately
$3.6 billion in cash ($3.2 billion, net of cash acquired).