PFIZER INC
For the period ended Mar 31, 2024. Filed May 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 8, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Total Revenues––Selected Product Discussion
Biopharma
| (MILLIONS) · Revenue · % Change | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Product · GlobalRevenues · Region · March 31,2024 · April 2,2023 · Total · Oper. · Operational Results Commentary | |||||||||||||||
| Eliquis | $2,040Up 10%(operationally) | U.S. | $1,413 | $1,261 | 12 | Growth driven primarily by continued oral anti-coagulant adoption and market share gains in the non-valvular atrial fibrillation indication in the U.S. and certain markets in Europe, partially offset by declines due to loss of patent-based exclusivity and generic competition in certain international markets. | |||||||||
| Int’l. | 626 | 613 | 2 | 5 | |||||||||||
| Worldwide | $2,040 | $1,874 | 9 | 10 | |||||||||||
| Paxlovid | $2,035Down 50%(operationally) | U.S. | $1,800 | $1,960 | (8) | Declines primarily driven by:• lower contractual deliveries in most international markets and in the U.S. as a result of the transition to traditional commercial market sales; and• lower demand in China due to the non-recurrent surge in COVID-19 infection during the first quarter of 2023,partially offset by:• a $771 million favorable final adjustment to the estimated non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023 (see Note 13C). | |||||||||
| Int’l. | 234 | 2,109 | (89) | (89) | |||||||||||
| Worldwide | $2,035 | $4,069 | (50) | (50) | |||||||||||
| Prevnar family | $1,691Up 7% (operationally) | U.S. | $1,149 | $1,084 | 6 | Growth primarily driven by the pediatric indication in the U.S. due to favorable timing of government purchases and higher patient demand in the private market, as well as strong uptake of the adult indication in certain international markets, partially offset by fewer adult vaccinations in the U.S. | |||||||||
| Int’l. | 542 | 518 | 5 | 8 | |||||||||||
| Worldwide | $1,691 | $1,602 | 6 | 7 | |||||||||||
| Vyndaqel family | $1,137Up 66%(operationally) | U.S. | $751 | $384 | 96 | Growth largely driven by continued strong uptake of the ATTR-CM indication, primarily in the U.S. and developed markets in Europe. | |||||||||
| Int’l. | 386 | 302 | 28 | 28 | |||||||||||
| Worldwide | $1,137 | $686 | 66 | 66 | |||||||||||
| Ibrance | $1,054Down 7% (operationally) | U.S. | $679 | $750 | (9) | Declines primarily driven by lower demand globally due to competitive pressure and price decreases in certain international developed markets. | |||||||||
| Int’l. | 375 | 394 | (5) | (4) | |||||||||||
| Worldwide | $1,054 | $1,144 | (8) | (7) | |||||||||||
| Xtandi | $418Up 23% (operationally) | U.S. | $418 | $339 | 23 | Growth largely driven by strong patient demand and higher net price mainly due to favorable changes in channel mix. | |||||||||
| Int’l. | — | — | — | — | |||||||||||
| Worldwide | $418 | $339 | 23 | 23 | |||||||||||
| Comirnaty | $354Down 88%(operationally) | U.S. | $118 | $329 | (64) | Declines largely driven by lower contractual deliveries and demand in international markets as well as lower U.S. volumes, reflecting the anticipated seasonality of demand for vaccinations and as certain markets, including the U.S., transition to traditional commercial market sales. | |||||||||
| Int’l. | 236 | 2,735 | (91) | (91) | |||||||||||
| Worldwide | $354 | $3,064 | (88) | (88) | |||||||||||
| Padcev | $341 * | U.S. | $334 | $— | * | Growth driven by the acquisition of Seagen in the fourth quarter of 2023. | |||||||||
| Int’l. | 7 | — | * | * | |||||||||||
| Worldwide | $341 | $— | * | * | |||||||||||
| Adcetris | $257 * | U.S. | $252 | $— | * | Growth driven by the acquisition of Seagen in the fourth quarter of 2023. | |||||||||
| Int’l. | 5 | — | * | * | |||||||||||
| Worldwide | $257 | $— | * | * | |||||||||||
| Inlyta | $237Down 8% (operationally) | U.S. | $141 | $155 | (9) | Declines primarily driven by lower demand in the U.S. as well as lower volumes and lower net price in international developed markets. | |||||||||
| Int’l. | 96 | 104 | (8) | (7) | |||||||||||
| Worldwide | $237 | $259 | (9) | (8) | |||||||||||
| Xeljanz | $194Down 17% (operationally) | U.S. | $74 | $90 | (18) | Declines driven primarily by decreased prescription volumes globally resulting from ongoing shifts in prescribing patterns related to label changes, as well as lower net price in the U.S. due to unfavorable changes in channel mix and the impact of regulatory exclusivity expiry in Canada. | |||||||||
| Int’l. | 120 | 147 | (18) | (17) | |||||||||||
| Worldwide | $194 | $237 | (18) | (17) | |||||||||||
| Nurtec ODT/Vydura | $178Up 7% (operationally) | U.S. | $167 | $163 | 3 | Growth primarily driven by strong patient demand in the U.S. largely offset by lower net price in the U.S. due to unfavorable changes in channel mix, as well as recent launches in international markets. | |||||||||
| Int’l. | 10 | 4 | * | * | |||||||||||
| Worldwide | $178 | $167 | 7 | 7 | |||||||||||
| Abrysvo | $145* | U.S. | $131 | $— | * | Growth primarily driven by the launch of the older adult indication in the U.S. in July 2023. | |||||||||
| Int’l. | 14 | — | * | * | |||||||||||
| Worldwide | $145 | $— | * | * | |||||||||||
Business Innovation
| (MILLIONS) · Revenue · % Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating Segment · GlobalRevenues · Region · March 31, 2024 · April 2, 2023 · Total · Oper. · Operational Results Commentary | |||||||||
| Business Innovation | $275Down 12%(operationally) | U.S. | $88 | $113 | (22) | Declines primarily driven by lower manufacturing of divested products under manufacturing and supply agreements, partially offset by growth in manufacturing-related services as well as an increase in R&D services to select innovative biotech companies under our Pfizer Ignite operations. | |||
| Int’l. | 187 | 200 | (7) | (6) | |||||
| Worldwide | $275 | $313 | (12) | (12) | |||||
- Indicates calculation not meaningful.
See the Item 1. Business—Patents and Other Intellectual Property Rights section of our 2023 Form 10-K for information regarding the expiration of various patent rights, Note 12 for a discussion of recent developments concerning patent and product litigation relating to certain of the products discussed above and Note 13C for additional information regarding the primary indications or class of the selected products discussed above.
Costs and Expenses
| Costs and expenses follow: | |||
|---|---|---|---|
| Three Months Ended | |||
| (MILLIONS) | March 31,2024 | April 2,2023 | % Change |
| Cost of sales | $3,379 | $4,886 | (31) |
| Percentage of Total revenues | 22.7% | 26.4% | |
| Selling, informational and administrative expenses | 3,495 | 3,418 | 2 |
| Research and development expenses | 2,493 | 2,505 | — |
| Acquired in-process research and development expenses | — | 21 | (100) |
| Amortization of intangible assets | 1,308 | 1,103 | 19 |
| Restructuring charges and certain acquisition-related costs | 102 | 9 | * |
| Other (income)/deductions—net | 680 | 275 | * |
| * Indicates calculation not meaningful. | |||
First Quarter of 2024 vs. First Quarter of 2023
Cost of Sales
Cost of sales decreased $1.5 billion in the first quarter of 2024, primarily due to:
reductions of $1.9 billion and $440 million from lower sales of Comirnaty and Paxlovid, respectively,
partially offset by:
an impact of $420 million from our Seagen acquisition, inclusive of the amortization of the fair value step-up of inventory.
The decrease in Cost of sales as a percentage of Total revenues in the first quarter of 2024 was driven primarily by favorable changes in sales mix, including lower sales of Comirnaty which resulted in a lower related charge for the 50% gross profit split with BioNTech and applicable royalty expenses; and, to a much lesser extent, the impact of a $771 million favorable final adjustment to the non-cash Paxlovid revenue reversal, partially offset by the amortization of the fair value step-up of inventory related to the Seagen acquisition, as well as lower sales of Paxlovid.
Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues and related cost of sales anticipated in the fall and winter seasons. See also The Global Economic Environment––COVID-19 section for information about our COVID-19 products.
Selling, Informational and Administrative Expenses
Selling, informational and administrative expenses increased $77 million in the first quarter of 2024, primarily due to:
an increase of $220 million in marketing and promotional expenses for recently acquired and launched products,
partially offset by:
a decrease of $180 million in marketing and promotional expenses for Paxlovid and Comirnaty.
Research and Development Expenses
Research and development expenses were relatively flat in the first quarter of 2024, primarily due to:
lower spending of $320 million as a result of our cost realignment program as well as lower spending on certain ongoing vaccine programs, largely offset by:
increased investments of $300 million, mainly to develop certain medicines acquired from Seagen.
Amortization of Intangible Assets
Amortization of intangible assets increased $205 million in the first quarter of 2024 primarily driven by an increase of $140 million related to assets reclassified in 2023 from IPR&D to developed technology rights and $130 million of amortization from our December 2023 acquisition of Seagen, partially offset by a decrease of $80 million from fully amortized assets.
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
Realigning our Cost Base Program––This program, described in Note 3A, is expected to deliver net cost savings of at least $4 billion, to be achieved primarily from 2023 through 2024.
Certain qualifying costs for these programs in all periods since inception were recorded and reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the Non-GAAP Financial Measure: Adjusted Income section within MD&A.
In connection with our acquisition of Seagen, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $1 billion of annual cost synergies, to be achieved by 2026. The one-time costs to generate these synergies are expected to be approximately $1.5 billion, incurred primarily from 2023 through 2025.
The program savings discussed above may be rounded and represent approximations. In addition to these programs, we continuously monitor our operations for cost reduction and/or productivity opportunities, especially in light of the losses of exclusivity and the expiration of collaborative arrangements for various products. Improvement of gross margin will continue to be an important focus for the Company going forward.
Other (Income)/Deductions—Net
The unfavorable period-over-period change of $406 million was primarily driven by higher net interest expense and lower dividend income, partially offset by net gains on equity securities in the first quarter of 2024 versus net losses on equity securities in the first quarter of 2023. See Note 4.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.