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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended April 2,2023OR TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For t
2、he transition period from _ to _COMMISSION FILE NUMBER 1-3619-PFIZER INC.(Exact name of registrant as specified in its charter)Delaware13-5315170(State of Incorporation)(I.R.S.Employer Identification No.)66 Hudson Boulevard East,New York,New York 10001-2192(Address of principal executive offices)(zi
3、p code)(212)733-2323(Registrants telephone number including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.05 par valuePFENew York Stock Exchange1.000%Notes due 2027PFE27New York Stock E
4、xchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during thepreceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to suc
5、h filing requirements for the past 90days.YesxNoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period tha
6、t the registrant was required to submit such files).YesxNoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerginggrowth company.See the definitions of“large accelerated filer,”“accelerated file
7、r,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 ofthe Exchange Act:Large Accelerated filer x Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to us
8、e the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).YesNoxAt May 5,2023,5,645,307,020
9、shares of the issuers voting common stock were outstanding.TABLE OF CONTENTSPART I.FINANCIAL INFORMATIONPageItem 1.Financial Statements Condensed Consolidated Statements of Income5Condensed Consolidated Statements of Comprehensive Income6Condensed Consolidated Balance Sheets7Condensed Consolidated S
10、tatements of Equity8Condensed Consolidated Statements of Cash Flows9Notes to Condensed Consolidated Financial Statements10Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations34Item 3.Quantitative and Qualitative Disclosures About Market Risk53Item 4.Controls an
11、d Procedures53PART II.OTHER INFORMATION Item 1.Legal Proceedings53Item 1A.Risk Factors53Item 2.Unregistered Sales of Equity Securities and Use of Proceeds54Item 3.Defaults Upon Senior SecuritiesN/AItem 4.Mine Safety DisclosuresN/AItem 5.Other InformationN/AItem 6.Exhibits54Signature54N/A=Not Applica
12、ble2DEFINED TERMSUnless the context requires otherwise,references to“Pfizer,”“the Company,”“we,”“us”or“our”in this Form 10-Q(defined below)refer to Pfizer Inc.and itssubsidiaries.Pfizers fiscal quarter-end for subsidiaries operating outside the U.S.is as of and for the three months ended February 26
13、,2023 and February 27,2022,and for U.S.subsidiaries is as of and for the three months ended April 2,2023 and April 3,2022.References to“Notes”in this Form 10-Q are to theNotes to the Condensed or Consolidated Financial Statements in this Form 10-Q or in our 2022 Form 10-K.We also have used several o
14、ther terms in this Form10-Q,most of which are explained or defined below:2022 Form 10-KAnnual Report on Form 10-K for the fiscal year ended December 31,2022ACIPAdvisory Committee on Immunization PracticesALKanaplastic lymphoma kinaseAlliance revenuesRevenues from alliance agreements under which we c
15、o-promote products discovered or developed by other companies or usArenaArena Pharmaceuticals,Inc.AstellasAstellas Pharma Inc.,Astellas US LLC and Astellas Pharma US,Inc.ATTR-CMtransthyretin amyloid cardiomyopathyBiohavenBiohaven Pharmaceutical Holding Company Ltd.BioNTechBioNTech SEBiopharmaGlobal
16、Biopharmaceuticals BusinessBMSBristol-Myers Squibb CompanyBODBoard of DirectorsCDCU.S.Centers for Disease Control and PreventionCMAconditional marketing authorisationComirnaty*Unless otherwise noted,refers to,as applicable,and as authorized or approved,the Pfizer-BioNTech COVID-19 Vaccine,the Pfizer
17、-BioNTech COVID-19 Vaccine,Bivalent(Original and Omicron BA.4/BA.5),the Comirnaty Original/Omicron BA.1 Vaccine,andComirnaty Original/Omicron BA.4/BA.5 Vaccine.In the U.S.,monovalent mRNA COVID-19 vaccines are no longer emergency useauthorized or CDC-recommended,although Comirnaty remains a licensed
18、 vaccine.Cond.J-NDAConditional Japan New Drug ApplicationConsumer Healthcare JVGSK Consumer Healthcare JVCOVID-19novel coronavirus disease of 2019Developed EuropeIncludes the following markets:Western Europe,Scandinavian countries and FinlandDeveloped MarketsIncludes the following markets:U.S.,Devel
19、oped Europe,Japan,South Korea,Canada,Australia and New ZealandDeveloped Rest of WorldIncludes the following markets:Japan,South Korea,Canada,Australia and New ZealandECEuropean CommissionEMAEuropean Medicines AgencyEmerging MarketsIncludes,but is not limited to,the following markets:Asia(excluding J
20、apan and South Korea),Latin America,Eastern Europe,Central Europe,the Middle East,Africa and TurkeyEPSearnings per shareESGEnvironmental,Social and GovernanceEUEuropean UnionEUAemergency use authorizationExchange ActSecurities Exchange Act of 1934,as amendedFASBFinancial Accounting Standards BoardFD
21、AU.S.Food and Drug AdministrationFFDCAU.S.Federal Food,Drug and Cosmetic ActForm 10-QThis Quarterly Report on Form 10-Q for the quarterly period ended April 2,2023GAAPGenerally Accepted Accounting PrinciplesGBTGlobal Blood Therapeutics,Inc.GPDGlobal Product Development organizationGSKGSK plcHaleonHa
22、leon plcHIPAAHealth Insurance Portability and Accountability Act of 1996HospiraHospira,Inc.IPR&Din-process research and developmentIRAInflation Reduction Act of 2022IRSU.S.Internal Revenue ServiceJAKJanus kinaseJVjoint ventureKingKing Pharmaceuticals LLC(formerly King Pharmaceuticals,Inc.)LIBORLondo
23、n Interbank Offered RateLOEloss of exclusivitymCRCmetastatic colorectal cancer3mCRPCmetastatic castration-resistant prostate cancermCSPCmetastatic castration-sensitive prostate cancerMD&AManagements Discussion and Analysis of Financial Condition and Results of OperationsMDLMulti-District LitigationM
24、eridianMeridian Medical Technologies,Inc.mRNAmessenger ribonucleic acidMSAManufacturing Supply AgreementMylanMylan N.V.MyovantMyovant Sciences Ltd.NDANew Drug ApplicationNimbusNimbus Therapeutics,LLCnmCRPCnon-metastatic castration-resistant prostate cancerNSCLCnon-small cell lung cancerODToral disin
25、tegrating tabletOnoOno Pharmaceutical Co.,Ltd.OPKOOPKO Health,Inc.OTCover-the-counterPaxlovid*an oral COVID-19 treatment(nirmatrelvir PF-07321332 tablets and ritonavir tablets)PC1Pfizer CentreOnePharmaciaPharmacia CorporationPrevnar familyIncludes Prevnar 13/Prevenar 13(pediatric and adult)and Prevn
26、ar 20/Apexxnar(adult)PsApsoriatic arthritisRArheumatoid arthritisRCCrenal cell carcinomaR&Dresearch and developmentSeagenSeagen Inc.SECU.S.Securities and Exchange CommissionSI&Aselling,informational and administrativeTSAstransition service arrangementsUCulcerative colitisU.K.United KingdomU.S.United
27、 StatesUpjohn BusinessPfizers former global,primarily off-patent branded and generics business,which included a portfolio of 20 globally recognized solidoral dose brands,including Lipitor,Lyrica,Norvasc,Celebrex and Viagra,as well as a U.S.-based generics platform,Greenstone,thatwas spun-off on Nove
28、mber 16,2020 and combined with Mylan to create ViatrisViatrisViatris Inc.ViiVViiV Healthcare LimitedVyndaqel familyIncludes Vyndaqel,Vyndamax and VynmacWRDMWorldwide Research,Development and Medical*Paxlovid and the Pfizer-BioNTech COVID-19 Vaccine,Bivalent(Original and Omicron BA.4/BA.5)have not be
29、en approved or licensed by the FDA.Paxlovid has been authorized for emergency use by theFDA under an EUA,for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients(12 years of age and older weighing at least 40 kg)with a current diagnosis of mild-to-moderate COVID-19 and who are
30、 at high risk for progression to severe COVID-19,including hospitalization or death.The Pfizer-BioNTech COVID-19 Vaccine,Bivalent has been authorized by the FDA under an EUA toprevent COVID-19 in individuals aged 6 months and older.The emergency uses are only authorized for the duration of the decla
31、ration that circumstances exist justifying the authorization of emergency use ofthe medical product during the COVID-19 pandemic under Section 564(b)(1)of the FFDCA unless the declaration is terminated or authorization revoked sooner.Please see the EUA Fact Sheets and www.cvdvaccine-.This Form 10-Q
32、includes discussion of certain clinical studies relating to various in-line products and/or product candidates.These studies typically are part ofa larger body of clinical data relating to such products or product candidates,and the discussion herein should be considered in the context of the larger
33、 body ofdata.In addition,clinical trial data are subject to differing interpretations,and,even when we view data as sufficient to support the safety and/or effectivenessof a product candidate or a new indication for an in-line product,regulatory authorities may not share our views and may require ad
34、ditional data or may denyapproval altogether.Some amounts in this Form 10-Q may not add due to rounding.All percentages have been calculated using unrounded amounts.All trademarks mentioned arethe property of their owners.The information contained on our website,our Facebook,Instagram,YouTube and Li
35、nkedIn pages or our Twitter accounts,or any third-party website,is notincorporated by reference into this Form 10-Q.4PART I.FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTSPFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)Three Months Ended(MILLIONS,EXCEPT PER
36、SHARE DATA)April 2,2023April 3,2022Revenues$18,282$25,661 Costs and expenses:Cost of sales4,886 9,984 Selling,informational and administrative expenses3,418 2,593 Research and development expenses2,505 2,301 Acquired in-process research and development expenses21 355 Amortization of intangible asset
37、s1,103 835 Restructuring charges and certain acquisition-related costs9 192 Other(income)/deductionsnet70 350 Income from continuing operations before provision/(benefit)for taxes on income6,270 9,050 Provision/(benefit)for taxes on income715 1,172 Income from continuing operations5,555 7,879 Discon
38、tinued operationsnet of tax1(9)Net income before allocation to noncontrolling interests5,556 7,870 Less:Net income attributable to noncontrolling interests13 6 Net income attributable to Pfizer Imon shareholders$5,543$7,864 Earnings per common sharebasic:Income from continuing operations attributabl
39、e to Pfizer Imon shareholders$0.98$1.40 Discontinued operationsnet of tax Net income attributable to Pfizer Imon shareholders$0.98$1.40 Earnings per common sharediluted:Income from continuing operations attributable to Pfizer Imon shareholders$0.97$1.37 Discontinued operationsnet of tax Net income a
40、ttributable to Pfizer Imon shareholders$0.97$1.37 Weighted-average sharesbasic5,634 5,617 Weighted-average sharesdiluted5,727 5,758 Exclusive of amortization of intangible assets.See Accompanying Notes.(a)(a)(a)(a)5PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
41、 INCOME(UNAUDITED)Three Months Ended(MILLIONS)April 2,2023April 3,2022Net income before allocation to noncontrolling interests$5,556$7,870 Foreign currency translation adjustments,net101(363)Unrealized holding gains/(losses)on derivative financial instruments,net2 203 Reclassification adjustments fo
42、r(gains)/losses included in net income303(213)305(10)Unrealized holding gains/(losses)on available-for-sale securities,net87(133)Reclassification adjustments for(gains)/losses included in net income(509)233 (422)99 Reclassification adjustments related to amortization of prior service costs and other
43、,net(30)(36)Reclassification adjustments related to curtailments of prior service costs and other,net(5)(11)(35)(47)Other comprehensive income/(loss),before tax(50)(321)Tax provision/(benefit)on other comprehensive income/(loss)(63)(60)Other comprehensive income/(loss)before allocation to noncontrol
44、ling interests$12$(260)Comprehensive income/(loss)before allocation to noncontrolling interests$5,569$7,610 Less:Comprehensive income/(loss)attributable to noncontrolling interests10 6 Comprehensive income/(loss)attributable to Pfizer Inc.$5,558$7,604 Reclassified into Other(income)/deductionsnet an
45、d Cost of sales.See Note 7E.Reclassified into Other(income)/deductionsnet.See Accompanying Notes.(a)(b)(a)(b)6PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED BALANCE SHEETS(MILLIONS)April 2,2023December 31,2022(Unaudited)AssetsCash and cash equivalents$2,166$416 Short-term investments17,80
46、6 22,316 Trade accounts receivable,less allowance for doubtful accounts:2023$465;2022$44912,305 10,952 Inventories9,541 8,981 Current tax assets3,140 3,577 Other current assets5,120 5,017 Total current assets50,078 51,259 Equity-method investments11,175 11,033 Long-term investments3,568 4,036 Proper
47、ty,plant and equipment,less accumulated depreciation:2023$15,514;2022$15,17417,052 16,274 Identifiable intangible assets42,002 43,370 Goodwill51,476 51,375 Noncurrent deferred tax assets and other noncurrent tax assets7,302 6,693 Other noncurrent assets12,965 13,163 Total assets$195,617$197,205 Liab
48、ilities and Equity Short-term borrowings,including current portion of long-term debt:2023$3,567;2022$2,560$4,188$2,945 Trade accounts payable6,123 6,809 Dividends payable 2,303 Income taxes payable1,969 1,587 Accrued compensation and related items2,277 3,407 Deferred revenues1,750 2,520 Other curren
49、t liabilities20,255 22,568 Total current liabilities36,562 42,138 Long-term debt31,704 32,884 Pension and postretirement benefit obligations2,179 2,250 Noncurrent deferred tax liabilities1,067 1,023 Other taxes payable9,860 9,812 Other noncurrent liabilities13,009 13,180 Total liabilities94,381 101,
50、288 Commitments and ContingenciesCommon stock478 476 Additional paid-in capital92,153 91,802 Treasury stock(114,473)(113,969)Retained earnings131,102 125,656 Accumulated other comprehensive loss(8,289)(8,304)Total Pfizer Inc.shareholders equity100,970 95,661 Equity attributable to noncontrolling int
51、erests266 256 Total equity101,236 95,916 Total liabilities and equity$195,617$197,205 See Accompanying Notes.7PFIZER INC.AND SUBSIDIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF EQUITY(UNAUDITED)PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlP
52、aid-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,January 1,20239,519$476$91,802(3,903)$(113,969)$125,656$(8,304)$95,661$256$95,916 Net income5,543 5,543 13 5,556 Other comprehensive income/(loss),net of tax15 15(3)12 Cash divi
53、dends declared,per share:$Common stock Share-based payment transactions41 2 350(12)(504)(97)(249)(249)Other Balance,April 2,20239,560$478$92,153(3,915)$(114,473)$131,102$(8,289)$100,970$266$101,236 PFIZER INC.SHAREHOLDERSCommon StockTreasury Stock(MILLIONS,EXCEPT PER SHARE DATA)SharesPar ValueAddlPa
54、id-InCapitalSharesCostRetainedEarningsAccum.OtherComp.LossShare-holders EquityNon-controllinginterestsTotal EquityBalance,January 1,20229,471$473$90,591(3,851)$(111,361)$103,394$(5,897)$77,201$262$77,462 Net income7,864 7,864 6 7,870 Other comprehensive income/(loss),net of tax(260)(260)(260)Cash di
55、vidends declared,per share:$Common stock Share-based payment transactions23 2 249(12)(570)(65)(383)(383)Purchases of common stock(39)(2,000)(2,000)(2,000)Other3 3(7)(4)Balance,April 3,20229,494$476$90,844(3,903)$(113,931)$111,193$(6,157)$82,424$261$82,685 See Accompanying Notes.8PFIZER INC.AND SUBSI
56、DIARY COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)Three Months Ended(MILLIONS)April 2,2023April 3,2022Operating Activities Net income before allocation to noncontrolling interests$5,556$7,870 Discontinued operationsnet of tax1(9)Net income from continuing operations before all
57、ocation to noncontrolling interests5,555 7,879 Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:Depreciation and amortization1,487 1,187 Asset write-offs and impairments270 31 Deferred taxes(598)(2,321)Share-based compensa
58、tion expense105 86 Benefit plan contributions in excess of expense/income(200)(404)Other adjustments,net99 815 Other changes in assets and liabilities,net of acquisitions and divestitures(5,507)(730)Net cash provided by operating activities1,212 6,541 Investing Activities Purchases of property,plant
59、 and equipment(1,139)(643)Purchases of short-term investments(6,665)(8,758)Proceeds from redemptions/sales of short-term investments6,400 13,421 Net(purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less4,665 3,409 Purchases of long-t
60、erm investments(51)(676)Proceeds from redemptions/sales of long-term investments124 52 Acquisition of business,net of cash acquired(6,225)Other investing activities,net(18)(13)Net cash provided by/(used in)investing activities3,315 567 Financing Activities Proceeds from short-term borrowings11 Net(p
61、ayments on)/proceeds from short-term borrowings with original maturities of three months or less226(220)Payments on long-term debt(269)(1,609)Purchases of common stock(2,000)Cash dividends paid(2,303)(2,249)Other financing activities,net(436)(501)Net cash provided by/(used in)financing activities(2,
62、771)(6,578)Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents(2)(1)Net increase/(decrease)in cash and cash equivalents and restricted cash and cash equivalents1,754 529 Cash and cash equivalents and restricted cash and cash equivalents,at beginning
63、of period468 1,983 Cash and cash equivalents and restricted cash and cash equivalents,at end of period$2,222$2,513 Supplemental Cash Flow InformationCash paid during the period for:Income taxes$329$354 Interest paid419 453 Interest rate hedges60 26 See Accompanying Notes.9PFIZER INC.AND SUBSIDIARY C
64、OMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 1.Basis of Presentation and Significant Accounting PoliciesA.Basis of PresentationWe prepared these condensed consolidated financial statements in conformity with U.S.GAAP,consistent in all material respects with those appli
65、ed in our2022 Form 10-K.As permitted under the SEC requirements for interim reporting,certain footnotes or other financial information have been condensed oromitted.These financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results
66、 for the interim periodspresented.The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notesincluded in our 2022 Form 10-K.Revenues,expenses,assets and liabilities can vary during each quarter of the year.Therefore,the r
67、esults and trends in theseinterim financial statements may not be representative of those for the full year.Pfizers fiscal quarter-end for subsidiaries operating outside the U.S.is as of and for the three months ended February 26,2023 and February 27,2022,and forU.S.subsidiaries is as of and for the
68、 three months ended April 2,2023 and April 3,2022.We manage our commercial operations through two operating segments,each led by a single manager:Biopharma and Business Innovation.Biopharma is theonly reportable segment.See Note 13A below and Note 17A in our 2022 Form 10-K.Business development activ
69、ities impacted financial results in the periods presented.See Notes 2A and 2B below as well as Notes 1A and 2 in our 2022 Form10-K.We have made certain reclassification adjustments to conform prior-period amounts to the current presentation for segment reporting.B.New Accounting Standard Adopted in
70、2023On January 1,2023,we adopted a new accounting standard for supplier finance programs which requires increased disclosures in the notes to our financialstatements.See Note 8C.C.Revenues and Trade Accounts ReceivableCustomersOur prescription biopharmaceutical products,with the exception of Paxlovi
71、d,are sold principally to wholesalers,but we also sell directly toretailers,hospitals,clinics,government agencies and pharmacies.We principally sell Paxlovid to government agencies and distributors.In the U.S.,weprimarily sell our vaccines directly to the federal government,CDC,wholesalers,individua
72、l provider offices,retail pharmacies and integrated delivery systems.Outside the U.S.,we primarily sell our vaccines to government and non-government institutions.Deductions from RevenuesOur accruals for Medicare,Medicaid and related state program and performance-based contract rebates,chargebacks,s
73、alesallowances and sales returns and cash discounts are as follows:(MILLIONS)April 2,2023December 31,2022Reserve against Trade accounts receivable,less allowance for doubtful accounts$1,068$1,200 Other current liabilities:Accrued rebates4,743 4,479 Other accruals521 430 Other noncurrent liabilities3
74、24 612 Total accrued rebates and other sales-related accruals$6,656$6,722 Trade Accounts ReceivableTrade accounts receivable are stated at their net realizable value.The allowance for credit losses reflects our best estimate ofexpected credit losses of the receivables portfolio determined on the bas
75、is of historical experience,current information,and forecasts of future economicconditions.In developing the estimate for expected credit losses,trade accounts receivables are segmented into pools of assets depending on market(U.S.versus international),delinquency status,and customer type(high risk
76、versus low risk and government versus non-government),and fixed reserve percentagesare established for each pool of trade accounts receivables.In determining the reserve percentages for each pool of trade accounts receivables,we considered our historical experience with certain customers andcustomer
77、 types,regulatory and legal environments,country and political risk,and other relevant current10PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)and future forecasted macroeconomic factors.When management becomes aware of certain customer-specific fac
78、tors that impact credit risk,specificallowances for these known troubled accounts are recorded.During the three months ended April 2,2023 and April 3,2022,additions to the allowance for credit losses,write-offs and recoveries of customer receivableswere not material to our condensed consolidated fin
79、ancial statements.For additional information on our trade accounts receivable,see Note 1G in our 2022Form 10-K.Note 2.Acquisitions,Discontinued Operations and Equity-Method InvestmentA.AcquisitionsGBTOn October 5,2022,we acquired GBT,a biopharmaceutical company dedicated to the discovery,development
80、 and delivery of life-changing treatmentsfor underserved patient communities,starting with sickle cell disease.The total fair value of the consideration transferred was$5.7 billion($5.2 billion,net ofcash acquired).In connection with this business combination,we provisionally recorded:(i)$4.4 billio
81、n in Identifiable intangible assets,consisting of$3.0billion of IPR&D and$1.4 billion of developed technology rights with a useful life of six years,(ii)$1.1 billion of Goodwill,(iii)$672 million of inventories tobe sold over approximately three years,(iv)$568 million of net deferred tax liabilities
82、 and(v)$331 million of assumed long-term debt that was paid in full inthe fourth quarter of 2022.The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.BiohavenOn October 3,2022,we acquired Biohaven,the maker of Nurtec ODT/Vydura(rim
83、egepant),an innovative therapy approved for both acutetreatment of migraine and prevention of episodic migraine in adults.The total fair value of the consideration transferred was$11.8 billion,which includes thefair value of Pfizers previous investment in Biohaven on the acquisition date of approxim
84、ately$300 million.In connection with this business combination,weprovisionally recorded:(i)$12.1 billion in Identifiable intangible assets,consisting of$11.6 billion of developed technology rights with a useful life of 11 yearsand$450 million of IPR&D,(ii)$817 million of inventories to be sold over
85、approximately two years,(iii)$797 million of Goodwill,(iv)$398 million of tradeaccounts receivable,(v)$1.4 billion of assumed long-term debt that was paid in full in the fourth quarter of 2022,(vi)$566 million of net deferred taxliabilities and(vii)$476 million of Other current liabilities.The alloc
86、ation of the consideration transferred to the assets acquired and liabilities assumed has notyet been finalized.ArenaOn March 11,2022,we acquired Arena,a clinical stage company with development-stage therapeutic candidates in gastroenterology,dermatology andcardiology.The total fair value of the con
87、sideration transferred was$6.6 billion($6.2 billion,net of cash acquired).The final allocation of the considerationtransferred to the assets acquired and the liabilities assumed was completed in the first quarter of 2023.In connection with this business combination,werecorded:(i)$5.5 billion in Iden
88、tifiable intangible assets,consisting of$5.0 billion of IPR&D and$460 million of indefinite-lived licensing agreements andother,(ii)$1.0 billion of Goodwill and(iii)$490 million of net deferred tax liabilities.B.Discontinued OperationsDiscontinued operationsnet of tax in the periods presented are po
89、st-close adjustments related to the previously disposed discontinued Meridian subsidiaryand the Upjohn Business.In the three months ended April 2,2023 and April 3,2022,amounts recorded under interim agreements,including TSAs and MSAs,associated with these disposals were not material.Under agreements
90、 related to the 2020 spin-off and the combination of the Upjohn Business with Mylan toform Viatris,net amounts due from Viatris were approximately$57 million as of April 2,2023 and net amounts due to Viatris were$94 million as of December31,2022.The cash flows associated with the agreements are incl
91、uded in Net cash provided by operating activities.For information about the nature of theseagreements,see Note 2B in our 2022 Form 10-K.C.Equity-Method InvestmentHaleon/Consumer Healthcare JVOn July 18,2022,GSK completed a demerger of the Consumer Healthcare JV which became Haleon,an independent,pub
92、licly traded company listed on the London Stock Exchange that holds the joint historical consumer healthcare business of GSK and Pfizer following thedemerger.We continue to own 32%of the ordinary shares of Haleon after the demerger.The carrying value of our investment in Haleon as of April 2,2023 an
93、d as of December 31,2022 is$11.0 billion and$10.8 billion,respectively,and is reportedin Equity-method investments.The fair value of our investment in Haleon as of April 2,2023,based on quoted market prices of Haleon stock,was$11.8 billion.Haleon/the Consumer Healthcare JV is a foreign investee whos
94、e reporting currency is the U.K.pound,and therefore we translate its financial statements intoU.S.dollars and recognize the impact of foreign currency translation adjustments in the carrying value of our investment and in other comprehensive income.The increase in the value of our investment from De
95、cember 31,2022 is primarily due to$90 million in11PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)pre-tax foreign currency translation adjustments(see Note 6)and our share of Haleons earnings.We record our share of earnings from Haleon/the ConsumerHe
96、althcare JV on a quarterly basis on a one-quarter lag in Other(income)/deductionsnet.Our total share of Haleons earnings generated in the fourth quarterof 2022,which we recorded in our operating results in the first quarter of 2023,was$68 million.Our total share of the JVs earnings generated in the
97、fourthquarter of 2021,which we recorded in our operating results in the first quarter of 2022,was$185 million.The total amortization and adjustment of basisdifferences resulting from the excess of the initial fair value of our investment over the underlying equity in the carrying value of the net as
98、sets of Haleon/theConsumer Healthcare JV was not material to our results of operations in the periods presented.See Note 4.Summarized financial information for our equity-method investee,Haleon/the Consumer Healthcare JV,for the three months ending December 31,2022,the most recent period available,a
99、nd for the three months ending December 31,2021,is as follows:Three Months Ended(MILLIONS)December 31,2022December 31,2021Net sales$3,261$3,420 Cost of sales(1,496)(1,312)Gross profit$1,766$2,108 Income from continuing operations225 590 Net income225 590 Income attributable to shareholders211 578 No
100、te 3.Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity InitiativesA.Transforming to a More Focused Company ProgramIn 2019,we announced that we would be incurring costs associated with our Transforming to a More Focused Company Program,a multi-year eff
101、ort to ensureour cost base aligns appropriately with our operating structure following Pfizers transformation into a more focused,innovative science-based globalbiopharmaceutical business.This program includes activities to(i)restructure our corporate enabling functions to appropriately support our
102、operating structure;(ii)transform our commercial go-to-market model;and(iii)optimize our manufacturing network and R&D operations.The activities associated with transforming our commercial go-to-market model are substantially complete.Activities associated with restructuring ourcorporate enabling fu
103、nctions and optimizing our manufacturing network and R&D operations are ongoing and are expected to be substantially completed bythe end of 2023.The costs to restructure our corporate enabling functions,and to optimize our R&D operations and reduce cycle times,as well as to furtherprioritize our int
104、ernal R&D portfolio,primarily include severance and implementation costs.The costs to optimize our manufacturing network largely includeseverance,implementation costs,product transfer costs,site exit costs,and accelerated depreciation.From the start of this program in the fourth quarter of 2019 thro
105、ugh April 2,2023,we incurred costs of$3.5 billion,of which$1.4 billion($1.1 billion ofrestructuring charges)is associated with Biopharma.We have incurred approximately 85%of total expected costs to date,and we expect the remaining costs tobe substantially incurred through 2023.12PFIZER INC.AND SUBSI
106、DIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)B.Key ActivitiesThe following summarizes costs and credits for acquisitions and cost-reduction/productivity initiatives:Three Months Ended(MILLIONS)April 2,2023April 3,2022Restructuring charges/(credits):Employee terminati
107、ons$(36)$25 Asset impairments(10)8 Exit costs/(credits)2 11 Restructuring charges/(credits)(44)43 Transaction costs 6 Integration costs and other52 142 Restructuring charges and certain acquisition-related costs9 192 Net periodic benefit costs/(credits)recorded in Other(income)/deductionsnet(5)(6)Ad
108、ditional depreciationasset restructuring recorded in our condensed consolidated statements of income,mainly inCost of sales18 9 Implementation costs recorded in our condensed consolidated statements of income as follows:Cost of sales15 12 Selling,informational and administrative expenses59 74 Resear
109、ch and development expenses11 Total implementation costs85 85 Total costs associated with acquisitions and cost-reduction/productivity initiatives$107$280 Primarily represents cost reduction initiatives.Restructuring charges/(credits)associated with Biopharma:credits of$28 million for the three mont
110、hs ended April 2,2023 and credits of$4 millionfor the three months ended April 3,2022.Represents external costs for banking,legal,accounting and other similar services.Represents external,incremental costs directly related to integrating acquired businesses,such as expenditures for consulting and th
111、e integration of systems and processes,and certain otherqualifying costs.In the first quarter of 2022,integration costs and other were mostly related to our acquisition of Arena,including$138 million in payments to Arena employees for the fair value ofpreviously unvested long-term incentive awards t
112、hat was recognized as post-closing compensation expense.Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.Represents external,incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiative
113、s.The following summarizes the components and changes in restructuring accruals:(MILLIONS)EmployeeTerminationCostsAssetImpairmentChargesExit CostsAccrualBalance,December 31,2022$1,196$8$1,204 Provision/(credit)(36)(10)2(44)Utilization and other(420)10(1)(411)Balance,April 2,2023$740$9$750 Included i
114、n Other current liabilities($991 million)and Other noncurrent liabilities($213 million).Includes adjustments for foreign currency translation.Included in Other current liabilities($548 million)and Other noncurrent liabilities($202 million).(a)(b)(c)(d)(e)(a)(b)(c)(d)(e)(a)(b)(c)(a)(b)(c)13PFIZER INC
115、.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 4.Other(Income)/DeductionsNetComponents of Other(income)/deductionsnet include:Three Months Ended(MILLIONS)April 2,2023April 3,2022Interest income$(177)$(14)Interest expense318 322 Net interest expense141 30
116、8 Royalty-related income(204)(173)Net(gains)/losses on asset disposals(7)(1)Net(gains)/losses recognized during the period on equity securities451 699 Income from collaborations,out-licensing arrangements and sales of compound/product rights(68)(9)Net periodic benefit costs/(credits)other than servi
117、ce costs(80)(283)Certain legal matters,net36 79 Certain asset impairments264 Haleon/Consumer Healthcare JV equity method(income)/loss(68)(184)Other,net(396)(88)Other(income)/deductionsnet$70$350 The losses in the first quarter of 2023 include,among other things,unrealized losses of$363 million relat
118、ed to our investments in Cerevel Therapeutics Holdings,Inc.and BioNTech.The losses inthe first quarter of 2022 included,among other things,unrealized losses of$473 million related to our investment in BioNTech.The first quarter of 2023 primarily includes certain product liability expenses related to
119、 products discontinued and/or divested by Pfizer.The first quarter of 2022 includes certain product liabilityexpenses related to products discontinued and/or divested by Pfizer,and to a lesser extent,legal obligations related to pre-acquisition commitments.The first quarter of 2023 primarily represe
120、nts intangible asset impairment charges,including$128 million associated with Other business activities,related to IPR&D and developed technologyrights for acquired software assets and reflects unfavorable pivotal trial results and updated commercial forecasts,and$120 million associated with our Bio
121、pharma segment due to thediscontinuation of a study related to an out-licensed IPR&D asset for the treatment of prostate cancer,acquired in our Array BioPharma Inc.acquisition.See Note 2C.The first quarter of 2023 primarily includes,among other things,dividend income of$211 million from our investme
122、nt in Nimbus resulting from Takeda Pharmaceutical Company Limitedsacquisition of Nimbuss oral,selective allosteric tyrosine kinase 2(TYK2)inhibitor program subsidiary,and$92 million from our investment in ViiV.Additional information about the intangible assets that were impaired during 2023 follows:
123、Three Months EndedFair ValueApril 2,2023(MILLIONS)AmountLevel 1Level 2Level 3ImpairmentIntangible assetsLicensing agreements and other$120 Intangible assetsIPR&D 94 Intangible assetsDeveloped technology rights 34 Total$248 The fair value amount is presented as of the date of impairment,as this asset
124、 is not measured at fair value on a recurring basis.See also Note 1E in our 2022 Form 10-K.Reflects intangible assets written down to fair value in 2023.Fair value was determined using the income approach,specifically the multi-period excess earnings method,also known as thediscounted cash flow meth
125、od.We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount.Someof the more significant estimates and assumptions inherent in this approach include:the amount and timing of the projected net c
126、ash flows,which includes the expected impact of competitive,legaland/or regulatory forces on the product;the discount rate,which seeks to reflect the various risks inherent in the projected cash flows;and the tax rate,which seeks to incorporate the geographicdiversity of the projected cash flows.Not
127、e 5.Tax MattersA.Taxes on Income from Continuing OperationsOur effective tax rate for continuing operations was 11.4%for the first quarter of 2023,compared to 12.9%for the first quarter of 2022.The lower effective taxrate for the first quarter of 2023,was due to a favorable change in the jurisdictio
128、nal mix of earnings.(a)(b)(c)(d)(e)(a)(b)(c)(d)(e)(a)(b)(b)(b)(a)(b)14PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)We elected,with the filing of our 2018 U.S.Federal Consolidated Income Tax Return,to pay our initial estimated$15 billion repatriati
129、on tax liability onaccumulated post-1986 foreign earnings over eight years through 2026.The fifth annual installment of this liability was paid by its April 18,2023 due date andis reported in current Income taxes payable and the remaining liability is reported in noncurrent Other taxes payable as of
130、 April 2,2023.Our obligations mayvary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards.B.Tax ContingenciesWe are subject to income tax in many jurisdictions,and a certain degree of estimation is required in rec
131、ording the assets and liabilities related to income taxes.All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction.These tax audits can involve complex issues,interpretationsand judgments and the resolution of matters may span multiple years,particularly
132、 if subject to negotiation or litigation.The U.S.is one of our major tax jurisdictions,and we are regularly audited by the IRS.With respect to Pfizer,tax years 2016-2018 are under audit.Tax years2019-2023 are open but not under audit.All other tax years are closed.In addition to the open audit years
133、 in the U.S.,we have open audit years and certainrelated audits,appeals and investigations in certain major international tax jurisdictions dating back to 2012.See Note 5D in our 2022 Form 10-K.C.Tax Provision/(Benefit)on Other Comprehensive Income/(Loss)Components of Tax provision/(benefit)on other
134、 comprehensive income/(loss)include:Three Months Ended(MILLIONS)April 2,2023April 3,2022Foreign currency translation adjustments,net$(25)$(72)Unrealized holding gains/(losses)on derivative financial instruments,net3 32 Reclassification adjustments for(gains)/losses included in net income21(22)24 10
135、Unrealized holding gains/(losses)on available-for-sale securities,net11(17)Reclassification adjustments for(gains)/losses included in net income(64)29(53)12 Reclassification adjustments related to amortization of prior service costs and other,net(7)(9)Reclassification adjustments related to curtailm
136、ents of prior service costs and other,net(1)(2)(9)(11)Tax provision/(benefit)on other comprehensive income/(loss)$(63)$(60)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that we intend to hold indefinitely.Note 6.Accumulated
137、Other Comprehensive Loss,Excluding Noncontrolling InterestsThe following summarizes the changes,net of tax,in Accumulated other comprehensive loss:Net Unrealized Gains/(Losses)Benefit Plans(MILLIONS)Foreign CurrencyTranslationAdjustmentsDerivativeFinancialInstrumentsAvailable-For-Sale SecuritiesPrio
138、r Service(Costs)/Credits andOtherAccumulated OtherComprehensiveIncome/(Loss)Balance,December 31,2022$(8,360)$(412)$220$248$(8,304)Other comprehensive income/(loss)129 281(369)(27)15 Balance,April 2,2023$(8,231)$(131)$(149)$222$(8,289)Amounts do not include foreign currency translation adjustments at
139、tributable to noncontrolling interests.Foreign currency translation adjustments include net gains related to our equity-method investment in Haleon(see Note 2C)and the impact of our net investment hedging program.(a)(a)(a)(b)(a)(b)15PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED
140、FINANCIAL STATEMENTS(UNAUDITED)Note 7.Financial InstrumentsA.Fair Value MeasurementsFinancial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy,using a Market Approach:April 2,2023December 31,2022(MILLIONS)TotalLevel 1Level 2TotalLevel 1Level 2Financial asse
141、ts:Short-term investmentsEquity securities with readily determinable fair values:Money market funds$1,165$1,165$1,588$1,588 Available-for-sale debt securities:Government and agencynon-U.S.13,278 13,278 15,915 15,915 Government and agencyU.S.927 927 1,313 1,313 Corporate and other1,914 1,914 1,514 1,
142、514 16,118 16,118 18,743 18,743 Total short-term investments17,283 17,283 20,331 20,331 Other current assetsDerivative assets:Foreign exchange contracts734 734 714 714 Total other current assets734 734 714 714 Long-term investmentsEquity securities with readily determinable fair values2,355 2,348 7
143、2,836 2,823 13 Available-for-sale debt securities:Government and agencynon-U.S.261 261 280 280 Corporate and other72 72 72 72 333 333 352 352 Total long-term investments2,688 2,348 340 3,188 2,823 365 Other noncurrent assetsDerivative assets:Foreign exchange contracts295 295 364 364 Total derivative
144、 assets295 295 364 364 Insurance contracts700 700 665 665 Total other noncurrent assets995 995 1,028 1,028 Total assets$21,699$2,348$19,352$25,261$2,823$22,439 Financial liabilities:Other current liabilitiesDerivative liabilities:Interest rate contracts$10$10 Foreign exchange contracts382 382 694 69
145、4 Total other current liabilities383 383 704 704 Other noncurrent liabilitiesDerivative liabilities:Interest rate contracts274 274 321 321 Foreign exchange contracts832 832 864 864 Total other noncurrent liabilities1,105 1,105 1,185 1,185 Total liabilities$1,488$1,488$1,889$1,889 Long-term equity se
146、curities of$115 million as of April 2,2023 and$143 million as of December 31,2022 were held in restricted trusts for U.S.non-qualified employee benefit plans.Includes life insurance policies held in restricted trusts for U.S.non-qualified employee benefit plans.The underlying invested assets in thes
147、e contracts are marketable securities,which are carriedat fair value,with changes in fair value recognized in Other(income)/deductionsnet(see Note 4).Financial Assets and Liabilities Not Measured at Fair Value on a Recurring BasisThe carrying value of Long-term debt,excluding the current portion was
148、$32 billion as of April 2,2023 and$33 billion as of December 31,2022.The estimated fair value of such debt,using a market approach and Level 2 inputs,was$30 billion as of April 2,2023 and$30 billion as of December 31,2022.The differences between the estimated fair values and carrying values of held-
149、to-maturity debt securities,private equity securities,long-term receivables andshort-term borrowings not measured at fair value on a recurring basis were not significant(a)(b)(a)(b)16PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)as of April 2,2023
150、and December 31,2022.The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level2 inputs.The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.B.InvestmentsTotal Short-Term,Long-Term and
151、 Equity-Method InvestmentsThe following summarizes our investments by classification type:(MILLIONS)April 2,2023December 31,2022Short-term investmentsEquity securities with readily determinable fair values$1,165$1,588 Available-for-sale debt securities16,118 18,743 Held-to-maturity debt securities52
152、3 1,985 Total Short-term investments$17,806$22,316 Long-term investmentsEquity securities with readily determinable fair values$2,355$2,836 Available-for-sale debt securities333 352 Held-to-maturity debt securities52 48 Private equity securities at cost828 800 Total Long-term investments$3,568$4,036
153、 Equity-method investments11,175 11,033 Total long-term investments and equity-method investments$14,743$15,069 Held-to-maturity cash equivalents$436$679 Includes money market funds primarily invested in U.S.Treasury and government debt.Represent investments in the life sciences sector.Debt Securiti
154、esOur investment portfolio consists of investment-grade debt securities issued across diverse governments,corporate and financial institutions:April 2,2023December 31,2022Gross UnrealizedContractual or Estimated Maturities(inYears)Gross Unrealized(MILLIONS)AmortizedCostGainsLossesFair ValueWithin 1O
155、ver 1to 5Over 5AmortizedCostGainsLossesFair ValueAvailable-for-sale debt securitiesGovernment and agencynon-U.S.$13,702$51$(214)$13,539$13,278$261$15,946$297$(48)$16,195 Government and agencyU.S.927 927 927 1,313 1,313 Corporate and other1,992 (7)1,985 1,914 72 1,584 7(4)1,586 Held-to-maturity debt
156、securitiesTime deposits and other936 936 888 34 14 1,171 1,171 Government and agencynon-U.S.75 75 71 3 1 1,542 1,542 Total debt securities$17,632$51$(221)$17,462$17,077$371$15$21,556$304$(53)$21,807 Any expected credit losses to these portfolios would be immaterial to our financial statements.Equity
157、 SecuritiesThe following presents the calculation of the portion of unrealized(gains)/losses that relates to equity securities,excluding equity-method investments,held atthe reporting date:Three Months Ended(MILLIONS)April 2,2023April 3,2022Net(gains)/losses recognized during the period on equity se
158、curities$451$699 Less:Net(gains)/losses recognized during the period on equity securities sold during the period(33)(11)Net unrealized(gains)/losses during the reporting period on equity securities still held at the reporting date$485$710 Reported in Other(income)/deductionsnet.See Note 4.(a)(b)(b)(
159、a)(b)(a)(b)(a)17PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Included in net unrealized(gains)/losses are observable price changes on equity securities without readily determinable fair values.As of April 2,2023,there were cumulative impairments a
160、nddownward adjustments of$171 million and upward adjustments of$203 million.Impairments,downward and upward adjustments were not significant in the first quarters of 2023 and 2022.C.Short-Term BorrowingsShort-term borrowings include:(MILLIONS)April 2,2023December 31,2022Current portion of long-term
161、debt,principal amount$3,550$2,550 Other short-term borrowings,principal amount622 385 Total short-term borrowings,principal amount4,172 2,935 Net fair value adjustments17 10 Total Short-term borrowings,including current portion of long-term debt,carried at historical proceeds,asadjusted$4,188$2,945
162、Primarily includes cash collateral.See Note 7F.D.Long-Term DebtThe following summarizes the aggregate principal amount of our senior unsecured long-term debt,and adjustments to report our aggregate long-term debt:(MILLIONS)April 2,2023December 31,2022Total long-term debt,principal amount$30,909$32,0
163、80 Net fair value adjustments related to hedging and purchase accounting966 959 Net unamortized discounts,premiums and debt issuance costs(171)(175)Other long-term debt 20 Total long-term debt,carried at historical proceeds,as adjusted$31,704$32,884 E.Derivative Financial Instruments and Hedging Act
164、ivitiesForeign Exchange RiskA significant portion of our revenues,earnings and net investments in foreign affiliates is exposed to changes in foreign exchangerates.Where foreign exchange risk is not offset by other exposures,we manage our foreign exchange risk principally through the use of derivati
165、ve financialinstruments and foreign currency debt.These financial instruments serve to mitigate the impact on net income as a result of remeasurement into anothercurrency,or against the impact of translation into U.S.dollars of certain foreign exchange-denominated transactions.The derivative financi
166、al instruments primarily hedge or offset exposures in the euro,U.K.pound,Japanese yen,Chinese renminbi,Canadian dollar andSingapore dollar,and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years.We may seek toprotect against possible d
167、eclines in the reported net investments of our foreign business entities.Interest Rate RiskOur interest-bearing investments and borrowings are subject to interest rate risk.Depending on market conditions,we may change theprofile of our outstanding debt or investments by entering into derivative fina
168、ncial instruments like interest rate swaps,either to hedge or offset the exposure tochanges in the fair value of hedged items with fixed interest rates,or to convert variable rate debt or investments to fixed rates.The derivative financialinstruments primarily hedge U.S.dollar fixed-rate debt.(b)(a)
169、(a)18PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)The following summarizes the fair value of the derivative financial instruments and notional amounts:April 2,2023December 31,2022Fair ValueFair Value(MILLIONS)NotionalAssetLiabilityNotionalAssetLia
170、bilityDerivatives designated as hedging instruments:Foreign exchange contracts$26,179$809$1,038$26,603$838$1,196 Interest rate contracts2,250 274 2,250 331 809 1,311 838 1,527 Derivatives not designated as hedging instruments:Foreign exchange contracts$21,870 220 177$29,814 240 362 Total$1,029$1,488
171、$1,078$1,889 The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was$4.5 billion as of April 2,2023 and$4.4 billion as of December 31,2022.The following summarizes information about the gains/(losses)incurred to hedge or offset operationa
172、l foreign exchange or interest rate risk exposures:Gains/(Losses)Recognized in OIDGains/(Losses)Recognized in OCIGains/(Losses)Reclassified fromOCI into OID and COSThree Months Ended(MILLIONS)April 2,2023April 3,2022April 2,2023April 3,2022April 2,2023April 3,2022Derivative Financial Instruments in
173、Cash Flow HedgeRelationships:Foreign exchange contracts$(53)$187$(356)$195 Amount excluded from effectiveness testing andamortized into earnings 55 16 53 18 Derivative Financial Instruments in Fair Value HedgeRelationships:Interest rate contracts48(156)Hedged item(48)156 Derivative Financial Instrum
174、ents in Net Investment HedgeRelationships:Foreign exchange contracts (213)259 Amount excluded from effectiveness testing andamortized into earnings 67(74)34 30 Non-Derivative Financial Instruments in Net InvestmentHedge Relationships:Foreign currency short-term borrowings 26 Foreign currency long-te
175、rm debt (16)23 Derivative Financial Instruments Not Designated as Hedges:Foreign exchange contracts17(19)$17$(19)$(160)$436$(269)$243 OID=Other(income)/deductionsnet,included in Other(income)/deductionsnet in the condensed consolidated statements of income.COS=Cost of Sales,included in Cost of sales
176、 in thecondensed consolidated statements of income.OCI=Other comprehensive income/(loss),included in the condensed consolidated statements of comprehensive income.The amounts reclassified from OCI into COS were a net gain of$91 million in the first quarter of 2023 and a net gain of$34 million in the
177、 first quarter of 2022.The remaining amounts werereclassified from OCI into OID.Based on quarter-end foreign exchange rates that are subject to change,we expect to reclassify a pre-tax gain of$235 million within the next 12 months intoincome.The maximum length of time over which we are hedging our e
178、xposure to the variability in future foreign exchange cash flows is approximately 20 years and relates to foreign currencydebt.The amounts reclassified from OCI were reclassified into OID.Short-term borrowings and long-term debt include foreign currency borrowings,which are used in net investment he
179、dges.The related long-term debt carrying values as of April 2,2023 andDecember 31,2022 were$811 million and$795 million,respectively.(a)(a)(a)(a)(a)(b)(c)(c)(d)(a)(b)(c)(d)19PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)The following summarizes cum
180、ulative basis adjustments to our debt in fair value hedges:April 2,2023December 31,2022Cumulative Amount of Fair ValueHedging AdjustmentIncrease/(Decrease)toCarrying AmountCumulative Amount of Fair ValueHedging AdjustmentIncrease/(Decrease)toCarrying Amount(MILLIONS)Carrying Amount ofHedgedAssets/Li
181、abilitiesActive HedgingRelationshipsDiscontinuedHedgingRelationshipsCarrying Amount ofHedgedAssets/LiabilitiesActive HedgingRelationshipsDiscontinuedHedgingRelationshipsShort-term borrowings,including currentportion of long-term debt$12$10 Long-term debt$2,236$(274)$1,014$2,235$(321)$1,042 Carrying
182、amounts exclude the cumulative amount of fair value hedging adjustments.F.Credit RiskA significant portion of our trade accounts receivable balances are due from wholesalers and governments.For additional information on our trade accountsreceivables with significant customers,see Note 13C below and
183、Note 17C in our 2022 Form 10-K.As of April 2,2023,the largest investment exposures in our portfolio represent primarily sovereign debt instruments issued by Canada,Japan,Germany,France,the U.S.,and the U.K.With respect to our derivative financial instrument agreements with financial institutions,we
184、do not expect to incur a significant loss from failure of anycounterparty.Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-supportannexes that contain zero threshold provisions requiring collateral to be exchanged daily
185、 depending on levels of exposure.As a result,there are no significantconcentrations of credit risk with any individual financial institution.As of April 2,2023,the aggregate fair value of these derivative financial instruments thatare in a net payable position was$763 million,for which we have poste
186、d collateral of$831 million with a corresponding amount reported in Short-terminvestments.As of April 2,2023,the aggregate fair value of our derivative financial instruments that are in a net receivable position was$715 million,forwhich we have received collateral of$530 million with a corresponding
187、 amount reported in Short-term borrowings,including current portion of long-termdebt.Note 8.Other Financial InformationA.InventoriesThe following summarizes the components of Inventories:(MILLIONS)April 2,2023December 31,2022Finished goods$2,657$2,603 Work-in-process6,129 5,519 Raw materials and sup
188、plies755 859 Inventories$9,541$8,981 Noncurrent inventories not included above$5,616$5,827 The increase from December 31,2022 reflects higher inventory levels for Paxlovid and increases for certain products due to supply recovery and inventory build,partially offset by decreases due tomarket demand.
189、Included in Other noncurrent assets.Based on our current estimates and assumptions,there are no recoverability issues for these amounts,which are primarily related to Paxlovid.B.Other Current LiabilitiesOther current liabilities includes,among other things,amounts payable to BioNTech for the gross p
190、rofit split for Comirnaty,which totaled$4.7 billion as ofApril 2,2023 and$5.2 billion as of December 31,2022.C.Supplier Finance Program ObligationWe maintain voluntary supply chain finance agreements with several participating financial institutions.Under these agreements,participating suppliers may
191、voluntarily elect to sell their accounts receivable with Pfizer to these financial institutions.Our suppliers negotiate their financing agreements directly with therespective financial institutions and we are not a party to these agreements.We have no economic interest in our suppliers decision to p
192、articipate and we paythe financial institutions the stated amount of confirmed invoices on the original maturity dates,which is generally within 90 to 120 days of(a)(a)(a)(a)(b)(a)(b)20PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)the invoice date.
193、The agreements with the financial institutions do not require Pfizer to provide assets pledged as security or other forms of guarantees for thesupplier finance program.All outstanding amounts related to suppliers participating in such financing arrangements are recorded within trade payables in ourc
194、onsolidated balance sheet.As of April 2,2023 and December 31,2022,respectively,$755 million and$849 million of our trade payables to suppliers whoparticipate in these financing arrangements are outstanding.Note 9.Identifiable Intangible AssetsA.Identifiable Intangible AssetsThe following summarizes
195、the components of Identifiable intangible assets:April 2,2023December 31,2022(MILLIONS)GrossCarryingAmountAccumulatedAmortizationIdentifiableIntangibleAssets,lessAccumulatedAmortizationGrossCarryingAmountAccumulatedAmortizationIdentifiableIntangibleAssets,lessAccumulatedAmortizationFinite-lived inta
196、ngible assetsDeveloped technology rights$84,973$(56,887)$28,086$85,604$(56,307)$29,297 Brands922(854)68 922(844)78 Licensing agreements and other2,420(1,433)987 2,237(1,397)841 88,315(59,174)29,141 88,763(58,548)30,215 Indefinite-lived intangible assetsBrands827 827 827 827 IPR&D11,269 11,269 11,357
197、 11,357 Licensing agreements and other764 764 971 971 12,860 12,860 13,155 13,155 Identifiable intangible assets$101,176$(59,174)$42,002$101,919$(58,548)$43,370 The decrease is primarily due to amortization expense and impairments(see Note 4).Note 10.Pension and Postretirement Benefit PlansThe follo
198、wing summarizes the components of net periodic benefit cost/(credit):Pension Plans U.S.InternationalPostretirementPlansThree Months Ended(MILLIONS)April 2,2023April 3,2022April 2,2023April 3,2022April 2,2023April 3,2022Service cost$22$30$3$7 Interest cost148 118 71 42 5 7 Expected return on plan ass
199、ets(194)(245)(76)(79)(11)(12)Amortization of prior service cost/(credit)(30)(36)Actuarial(gains)/losses9(65)3 Curtailments (1)(5)(13)Special termination benefits2 6 Net periodic benefit cost/(credit)reported in income$(36)$(186)$18$(8)$(37)$(46)The components of net periodic benefit cost/(credit)oth
200、er than the service cost component are primarily included in Other(income)/deductionsnet(see Note4).For the three months ended April 2,2023,we contributed$85 million,$39 million,and$20 million to our U.S.Pension Plans,International Pension Plans,andPostretirement Plans,respectively,from our general
201、assets,which include direct employer benefit payments.(a)(a)21PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Note 11.Earnings Per Common Share Attributable to Pfizer Inc.Common ShareholdersThe following presents the detailed calculation of EPS:Three
202、 Months Ended(MILLIONS)April 2,2023April 3,2022EPS NumeratorBasicIncome from continuing operations attributable to Pfizer Imon shareholders$5,542$7,872 Discontinued operationsnet of tax1(9)Net income attributable to Pfizer Imon shareholders$5,543$7,864 EPS NumeratorDiluted Income from continuing ope
203、rations attributable to Pfizer Imon shareholders and assumed conversions$5,542$7,872 Discontinued operationsnet of tax,attributable to Pfizer Imon shareholders and assumed conversions1(9)Net income attributable to Pfizer Imon shareholders and assumed conversions$5,543$7,864 EPS Denominator Weighted-
204、average number of common shares outstandingBasic5,634 5,617 Common-share equivalents93 141 Weighted-average number of common shares outstandingDiluted5,727 5,758 Anti-dilutive common stock equivalents2 These common stock equivalents were outstanding for the periods presented,but were not included in
205、 the computation of diluted EPS for those periods because their inclusion would have had ananti-dilutive effect.Note 12.Contingencies and Certain CommitmentsWe and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business,including tax and legal con
206、tingencies,guarantees and indemnifications.The following outlines our legal contingencies,guarantees and indemnifications.For a discussion of our tax contingencies,see Note 5B.A.Legal ProceedingsOur legal contingencies include,but are not limited to,the following:Patent litigation,which typically in
207、volves challenges to the coverage and/or validity of patents on various products,processes or dosage forms.An adverseoutcome could result in loss of patent protection for a product,a significant loss of revenues from a product or impairment of the value of associated assets.We are the plaintiff in t
208、he majority of these actions.Product liability and other product-related litigation related to current or former products,which can include personal injury,consumer,off-label promotion,securities,antitrust and breach of contract claims,among others,and often involves highly complex issues relating t
209、o medical causation,label warnings andreliance on those warnings,scientific evidence and findings,actual,provable injury and other matters.Commercial and other asserted or unasserted matters,which can include acquisition-,licensing-,intellectual property-,collaboration-or co-promotion-related and pr
210、oduct-pricing claims and environmental claims and proceedings,and can involve complexities that will vary from matter to matter.Government investigations,which often are related to the extensive regulation of pharmaceutical companies by national,state and local government agenciesin the U.S.and in o
211、ther jurisdictions.Certain of these contingencies could result in increased expenses and/or losses,including damages,royalty payments,fines and/or civil penalties,which couldbe substantial,and/or criminal charges.We believe that our claims and defenses in matters in which we are a defendant are subs
212、tantial,but litigation is inherently unpredictable and excessive verdictsdo occur.We do not believe that any of these matters will have a material adverse effect on our financial position.However,we could incur judgments,enterinto settlements or revise our expectations regarding the outcome of matte
213、rs,which could have a material adverse effect on our results of operations and/or ourcash flows in the period in which the amounts are accrued or paid.We have accrued for losses that are both probable and reasonably estimable.Substantially all of our contingencies are subject to significant uncertai
214、nties and,therefore,determining the likelihood of a loss and/or the measurement of any loss can be complex.(a)(a)22PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Consequently,we are unable to estimate the range of reasonably possible loss in excess
215、of amounts accrued.Our assessments,which result from a complexseries of judgments about future events and uncertainties,are based on estimates and assumptions that have been deemed reasonable by management,but thatmay prove to be incomplete or inaccurate,and unanticipated events and circumstances ma
216、y occur that might cause us to change those estimates andassumptions.Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can relyheavily on estimates and assumptions.For proceedings under environmental law
217、s to which a governmental authority is a party,we have adopted a disclosurethreshold of$1 million in potential or actual governmental monetary sanctions.The principal pending matters to which we are a party are discussed below.In determining whether a pending matter is a principal matter,we consider
218、 bothquantitative and qualitative factors to assess materiality,such as,among others,the amount of damages and the nature of other relief sought,if specified;ourview of the merits of the claims and of the strength of our defenses;whether the action purports to be,or is,a class action and,if not cert
219、ified,our view of thelikelihood that a class will be certified by the court;the jurisdiction in which the proceeding is pending;whether related actions have been transferred tomultidistrict litigation;any experience that we or,to our knowledge,other companies have had in similar proceedings;whether
220、disclosure of the action wouldbe important to a reader of our financial statements,including whether disclosure might change a readers judgment about our financial statements in light ofall of the information that is available to the reader;the potential impact of the proceeding on our reputation;an
221、d the extent of public interest in the matter.Inaddition,with respect to patent matters in which we are the plaintiff,we consider,among other things,the financial significance of the product protected by thepatent(s)at issue.Some of the matters discussed below include those which management believes
222、 that the likelihood of possible loss in excess of amountsaccrued is remote.A1.Legal ProceedingsPatent LitigationWe are involved in suits relating to our patents(or those of our collaboration/licensing partners to which we have licenses or co-promotion rights),includingbut not limited to,those discu
223、ssed below.We face claims by generic drug manufacturers that patents covering our products(or those of ourcollaboration/licensing partners to which we have licenses or co-promotion rights and to which we may or may not be a party),processes or dosage forms areinvalid and/or do not cover the product
224、of the generic drug manufacturer.Also,counterclaims,as well as various independent actions,have been filed allegingthat our assertions of,or attempts to enforce,patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws.Inaddition to the challeng
225、es to the U.S.patents that are discussed below,patent rights to certain of our products or those of our collaboration/licensing partnersare being challenged in various other jurisdictions.Some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.
226、S.jurisdictions.For example,in April 2022,the U.K.High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026.InNovember 2022,BMS received permission to appeal the High Courts decision and the appeal hearing was held in April 2023.In May 2023,the Court ofAppeal
227、 dismissed the appeal.Additional challenges are pending in other jurisdictions.Also,in July 2022,CureVac AG(CureVac)brought a patent infringementaction against BioNTech and certain of its subsidiaries in the German Regional Court alleging that Comirnaty infringes certain German utility model patents
228、and certain expired and unexpired European patents.Additional challenges involving Comirnaty patents may be filed against us and/or BioNTech in otherjurisdictions in the future.Adverse decisions in these matters could have a material adverse effect on our results of operations.We are also party to p
229、atentdamages suits in various jurisdictions pursuant to which generic drug manufacturers,payers,governments or other parties are seeking damages from us forallegedly causing delay of generic entry.We also are often involved in other proceedings,such as inter partes review,post-grant review,re-examin
230、ation or opposition proceedings,before the U.S.Patent and Trademark Office,the European Patent Office,or other foreign counterparts,as well as court proceedings relating to our intellectual property or theintellectual property rights of others,including challenges to such rights initiated by us.Also
231、,if one of our patents(or one of our collaboration/licensingpartners patents)is found to be invalid by such proceedings,generic or competitive products could be introduced into the market resulting in the erosion ofsales of our existing products.For example,several of the patents in our pneumococcal
232、 vaccine portfolio have been challenged in inter partes review and post-grant review proceedings in the U.S.Patent and Trademark Office,as well as outside the U.S.The invalidation of any of the patents in our pneumococcalportfolio could potentially allow additional competitor vaccines,if approved,to
233、 enter the marketplace earlier than anticipated.In the event that any of thepatents are found valid and infringed,a competitors vaccine,if approved,might be prohibited from entering the market or a competitor might be required topay us a royalty.We are also subject to patent litigation pursuant to w
234、hich one or more third parties seek damages and/or injunctive relief to compensate for allegedinfringement of its patents by our commercial or other activities.If one of our marketed products(or a product of our collaboration/licensing partners to whichwe have licenses or co-promotion rights)is foun
235、d to infringe valid patent rights of a third party,such third party may be awarded significant damages or royaltypayments,or we may be23PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)prevented from further sales of that product.Such damages may be e
236、nhanced as much as three-fold if we or one of our subsidiaries is found to have willfullyinfringed valid patent rights of a third party.Actions In Which We Are The PlaintiffXeljanz(tofacitinib)Beginning in 2017,we brought patent-infringement actions against several generic manufacturers that filed s
237、eparate abbreviated new drug applications(ANDAs)with the FDA seeking approval to market their generic versions of tofacitinib tablets in one or both of 5 mg and 10 mg dosage strengths,and in bothimmediate and extended release forms.To date,we have settled actions with several manufacturers on terms
238、not material to us.The remaining action continuesin the U.S.District Court for the District of Delaware as described below.In October 2021,we brought a separate patent-infringement action against Sinotherapeutics Inc.(Sinotherapeutics)asserting the infringement and validity ofour patent covering ext
239、ended release formulations of tofacitinib that was challenged by Sinotherapeutics in its ANDA seeking approval to market a genericversion of tofacitinib 11 mg extended release tablets.In November 2022,we filed an additional patent-infringement action against Sinotherapeutics relating toits challenge
240、 of our extended release formulation and method of treatment patents in its ANDA seeking approval to market a generic version of tofacitinib 22mg extended release tablets.Ibrance(palbociclib)Beginning in January 2021,several generic companies notified us that they had filed ANDAs with the FDA seekin
241、g approval to market generic versions ofIbrance tablets.The generic companies challenged some or all of the following patents:(i)the composition of matter patent expiring in 2027;(ii)thecomposition of matter patent expiring in 2023;(iii)the method of use patent expiring in 2023;(iv)the crystalline f
242、orm patent expiring in 2034;and(v)a tabletformulation patent expiring in 2036.We brought patent infringement actions against each of the generic filers in various U.S.federal courts,asserting thevalidity and infringement of the patents challenged by the generic companies.We have settled with one of
243、these generic companies on terms not material to us,and we dismissed the patent infringement actions relating to the crystalline form of patent,the composition of matter patent expiring in 2023,the method of usepatent,and the tablet formulation patent against the generic companies that had challenge
244、d these patents.The composition of matter patent expiring in 2027remains in suit.EucrisaBeginning in September 2021,several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions ofEucrisa.The companies assert the invalidity and non-infringem
245、ent of a composition of matter patent expiring in 2026,two method of use patents expiring in2027,and one other method of use patent expiring in 2030.In September 2021,we brought patent infringement actions against the generic filers in the U.S.District Court for the District of Delaware,asserting th
246、e validity and infringement of the patents challenged by the generic companies.Mektovi(binimetinib)Beginning in August 2022,several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions ofMektovi.The companies assert the invalidity and non-i
247、nfringement of two method of use patents expiring in 2030,a method of use patent expiring in 2031,two method of use patents expiring in 2033,and a product by process patent expiring in 2033.Beginning in September 2022,we brought patent infringementactions against the generic filers in the U.S.Distri
248、ct Court for the District of Delaware,asserting the validity and infringement of all six patents.Actions in Which We are the DefendantComirnatyIn March 2022,Alnylam Pharmaceuticals,Inc.(Alnylam)filed a complaint in the U.S.District Court for the District of Delaware against Pfizer and Pharmacia&Upjo
249、hn Co.LLC,our wholly owned subsidiary,alleging that Comirnaty infringes U.S.Patent No.11,246,933,which was issued in February 2022,andseeking unspecified monetary damages.In July 2022,Alnylam filed a second complaint in the U.S.District Court for the District of Delaware against Pfizer,Pharmacia&Upj
250、ohn Co.LLC,BioNTech and BioNTech Manufacturing GmbH,alleging that Comirnaty infringes U.S.Patent No.11,382,979,which wasissued in July 2022,and seeking unspecified monetary damages.In August 2022,ModernaTX,Inc.(ModernaTX)and Moderna US,Inc.(Moderna)sued Pfizer,BioNTech,BioNTech Manufacturing GmbH an
251、d BioNTech USInc.in the U.S.District Court for the District of Massachusetts,alleging that Comirnaty infringes three U.S.patents.In its complaint,Moderna stated that it isseeking damages for alleged infringement occurring after March 7,2022.In August 2022,ModernaTX filed a patent infringement action
252、 in Germany against Pfizer and certain subsidiary companies,as well as BioNTech and certainsubsidiary companies,alleging that Comirnaty infringes two European patents.In September 2022,ModernaTX filed patent infringement actions in the U.K.and in the Netherlands against Pfizer and certain subsidiary
253、24PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)companies,as well as BioNTech and certain subsidiary companies,on the same two patents.In its complaints,ModernaTX stated that it is seeking damages foralleged infringement occurring after March 7,202
254、2.In the U.K.,Pfizer and BioNTech have brought an action against ModernaTX seeking to revoke theseEuropean patents,which was consolidated with the September 2022 action filed by ModernaTX.In April 2023,Arbutus Biopharma Corp.(Arbutus)and Genevant Sciences GmbH(Genevant)filed a complaint in the U.S.D
255、istrict Court for the District ofNew Jersey against Pfizer and BioNTech alleging that Comirnaty and its manufacture infringe five U.S.patents,and seeking unspecified monetary damages.PaxlovidIn June 2022,Enanta Pharmaceuticals,Inc.filed a complaint in the U.S.District Court for the District of Massa
256、chusetts against Pfizer alleging that the activeingredient in Paxlovid,nirmatrelvir,infringes U.S.Patent No.11,358,953,which was issued in June 2022,and seeking unspecified monetary damages.Matters Involving Pfizer and its Collaboration/Licensing PartnersComirnatyIn July 2022,Pfizer,BioNTech and Bio
257、NTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S.District Court for theDistrict of Massachusetts seeking a judgment of non-infringement for the following three patents relating to Comirnaty:U.S.Patent Nos.11,135,312,11,149,278,and 11,241,493.Outside of the U
258、.S.,in the U.K.,Pfizer and BioNTech have sued CureVac seeking a judgment of invalidity of several patents andCureVac has made certain infringement counterclaims.Xtandi(enzalutamide)In July 2022,Medivation LLC and Medivation Prostate Therapeutics LLC(wholly owned subsidiaries of Pfizer);Astellas Phar
259、ma Inc.,Astellas US LLC andAstellas Pharma US,Inc.;and The Regents of the University of California filed a patent-infringement suit in the U.S.District Court for the District of NewJersey against Zydus Pharmaceuticals(USA)Inc.and Zydus Lifesciences Ltd.;and in December 2022,the same entities filed a
260、 patent-infringement suit in theU.S.District Court for the District of New Jersey against Sun in connection with those companies respective ANDAs seeking approval to market genericversions of enzalutamide.The generic manufacturers are challenging the composition of matter patent,which expires in 202
261、7,covering enzalutamide andpharmaceutical compositions thereof,for treating prostate cancer.EliquisIn April 2023,we and BMS brought separate patent-infringement actions in Federal Court in Delaware against each of Biocon Pharma Limited(Biocon)andScieGen Pharmaceuticals Inc.(ScieGen)asserting the inf
262、ringement and validity of the formulation patent for Eliquis,expiring in 2031,challenged by Bioconand ScieGen in their respective ANDAs seeking approval to market generic versions of Eliquis.In April 2023,we settled our action against ScieGen on termsnot material to us.A2.Legal ProceedingsProduct Li
263、tigationWe are defendants in numerous cases,including but not limited to those discussed below,related to our pharmaceutical and other products.Plaintiffs in thesecases seek damages and other relief on various grounds for alleged personal injury and economic loss.AsbestosBetween 1967 and 1982,Warner
264、-Lambert owned American Optical Corporation(American Optical),which manufactured and sold respiratory protectivedevices and asbestos safety clothing.In connection with the sale of American Optical in 1982,Warner-Lambert agreed to indemnify the purchaser for certainliabilities,including certain asbes
265、tos-related and other claims.Warner-Lambert was acquired by Pfizer in 2000 and is a wholly owned subsidiary of Pfizer.Warner-Lambert is actively engaged in the defense of,and will continue to explore various means of resolving,these claims.Numerous lawsuits against American Optical,Pfizer and certai
266、n of its previously owned subsidiaries are pending in various federal and state courts seekingdamages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certainof its previously owned subsidiaries.There also
267、are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned orformerly owned by Pfizer or its subsidiaries.EffexorBeginning in 2011,actions,including purported class actions,were filed in various federal courts again
268、st Wyeth and,in certain of the actions,affiliates ofWyeth and certain other defendants relating to Effexor XR,which is the extended-release formulation of Effexor.The plaintiffs in each of the class actions seekto represent a class consisting of all persons in the U.S.and its territories who directl
269、y purchased,indirectly purchased or reimbursed patients for the purchaseof Effexor XR or generic25PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)Effexor XR from any of the defendants from June 14,2008 until the time the defendants allegedly unlawful
270、 conduct ceased.The plaintiffs in all of the actionsallege delay in the launch of generic Effexor XR in the U.S.and its territories,in violation of federal antitrust laws and,in certain of the actions,the antitrust,consumer protection and various other laws of certain states,as the result of Wyeth f
271、raudulently obtaining and improperly listing certain patents for Effexor XRin the Orange Book,enforcing certain patents for Effexor XR and entering into a litigation settlement agreement with a generic drug manufacturer with respectto Effexor XR.Each of the plaintiffs seeks treble damages(for itself
272、 in the individual actions or on behalf of the putative class in the purported class actions)for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S.and its territories since June 14,2008.All of these actions have beenconsolidated in the U.S.District Court for the District of N
273、ew Jersey.In 2014,the District Court dismissed the direct purchaser plaintiffs claims based on the litigation settlement agreement,but declined to dismiss the other directpurchaser plaintiff claims.In 2015,the District Court entered partial final judgments as to all settlement agreement claims,inclu
274、ding those asserted by directpurchasers and end-payer plaintiffs,which plaintiffs appealed to the U.S.Court of Appeals for the Third Circuit.In 2017,the U.S.Court of Appeals for theThird Circuit reversed the District Courts decisions and remanded the claims to the District Court.LipitorBeginning in
275、2011,purported class actions relating to Lipitor were filed in various federal courts against,among others,Pfizer,certain Pfizer affiliates,and,inmost of the actions,Ranbaxy Laboratories Ltd.(Ranbaxy)and certain Ranbaxy affiliates.The plaintiffs in these various actions seek to represent nationwide,
276、multi-state or statewide classes consisting of persons or entities who directly purchased,indirectly purchased or reimbursed patients for the purchase of Lipitor(or,in certain of the actions,generic Lipitor)from any of the defendants from March 2010 until the cessation of the defendants allegedly un
277、lawful conduct(theClass Period).The plaintiffs allege delay in the launch of generic Lipitor,in violation of federal antitrust laws and/or state antitrust,consumer protection andvarious other laws,resulting from(i)the 2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigat
278、ion involving Lipitor and Pfizergranted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates,and(ii)in certain of the actions,the procurementand/or enforcement of certain patents for Lipitor.Each of the actions seeks,among other things,treble damages o
279、n behalf of the putative class for alleged priceovercharges for Lipitor(or,in certain of the actions,generic Lipitor)during the Class Period.In addition,individual actions have been filed against Pfizer,Ranbaxy and certain of their affiliates,among others,that assert claims and seek relief for the p
280、laintiffs that are substantially similar to the claims asserted andthe relief sought in the purported class actions described above.These various actions have been consolidated for pre-trial proceedings in a MDL in the U.S.District Court for the District of New Jersey.In September 2013 and 2014,the
281、District Court dismissed with prejudice the claims of the direct purchasers.In October and November 2014,the District Courtdismissed with prejudice the claims of all other MDL plaintiffs.All plaintiffs appealed the District Courts orders dismissing their claims with prejudice to theU.S.Court of Appe
282、als for the Third Circuit.In addition,the direct purchaser class plaintiffs appealed the order denying their motion to amend the judgment andfor leave to amend their complaint to the Court of Appeals.In 2017,the Court of Appeals reversed the District Courts decisions and remanded the claims tothe Di
283、strict Court.Also,in 2013,the State of West Virginia filed an action in West Virginia state court against Pfizer and Ranbaxy,among others,that asserts claims and seeksrelief on behalf of the State of West Virginia and residents of that state that are substantially similar to the claims asserted and
284、the relief sought in the purportedclass actions described above.EpiPen(Direct Purchaser)In February 2020,a lawsuit was filed in the U.S.District Court for the District of Kansas against Pfizer,its current and former affiliates King and Meridian,andvarious Mylan entities,on behalf of a purported U.S.
285、nationwide class of direct purchaser plaintiffs who purchased EpiPen devices directly from thedefendants.Plaintiffs in this action generally allege that Pfizer and Mylan conspired to delay market entry of generic EpiPen through the settlement of patentlitigation regarding EpiPen,and thereby delayed
286、market entry of generic EpiPen in violation of federal antitrust law.Plaintiffs seek treble damages for allegedovercharges for EpiPen since 2011.In July 2021,the District Court granted defendants motion to dismiss the direct purchaser complaint,without prejudice.InSeptember 2021,plaintiffs filed an
287、amended complaint.In August 2022,the District Court granted Pfizers motion to dismiss the complaint,and plaintiffs haveappealed to the U.S.Court of Appeals for the Tenth Circuit.Nexium 24HR and ProtonixA number of individual and multi-plaintiff lawsuits have been filed against Pfizer,certain of its
288、subsidiaries and/or other pharmaceutical manufacturers invarious federal and state courts alleging that the plaintiffs developed kidney-related injuries purportedly as a result of the ingestion of certain proton pumpinhibitors.The cases against Pfizer involve Protonix and/or Nexium 24HR and seek com
289、pensatory and punitive damages and,in some cases,treble damages,restitution or disgorgement.In 2017,the federal actions were ordered transferred for coordinated pre-trial proceedings to a MDL in the U.S.District Court for26PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL
290、STATEMENTS(UNAUDITED)the District of New Jersey.As part of the combination of our and GSKs consumer healthcare businesses to form Haleon,Haleon assumed,and agreed toindemnify Pfizer for,liabilities arising out of such litigation to the extent related to Nexium 24HR.Docetaxel Personal Injury ActionsA
291、 number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxeldeveloped permanent hair loss.The significant majority of the cases also name other defendants,including the manufacturer of the branded product,
292、Taxotere.Plaintiffs seek compensatory and punitive damages.Additional lawsuits have been filed in which plaintiffs allege they developed blocked tear ducts followingtheir treatment with Docetaxel.In 2016,the federal cases were transferred for coordinated pre-trial proceedings to a MDL in the U.S.Dis
293、trict Court for the Eastern District of Louisiana.In2022,the eye injury cases were transferred for coordinated pre-trial proceedings to a MDL in the U.S.District Court for the Eastern District of Louisiana.Mississippi Attorney General Government ActionIn 2018,the Attorney General of Mississippi file
294、d a complaint in Mississippi state court against the manufacturer of the branded product and eight othermanufacturers including Pfizer and Hospira,alleging,with respect to Pfizer and Hospira,a failure to warn about a risk of permanent hair loss in violation of theMississippi Consumer Protection Act.
295、The action seeks civil penalties and injunctive relief.ZantacA number of lawsuits have been filed against Pfizer in various federal and state courts alleging that plaintiffs developed various types of cancer,or face anincreased risk of developing cancer,purportedly as a result of the ingestion of Za
296、ntac.The significant majority of these cases also name other defendants thathave historically manufactured and/or sold Zantac.Pfizer has not sold Zantac since 2006,and only sold an OTC version of the product.In 2006,Pfizer sold theconsumer business that included its Zantac OTC rights to Johnson&John
297、son and transferred the assets and liabilities related to Zantac OTC to Johnson&Johnson in connection with the sale.Plaintiffs in these cases seek compensatory and punitive damages.In February 2020,the federal actions were transferred for coordinated pre-trial proceedings to a MDL in the U.S.Distric
298、t Court for the Southern District ofFlorida(the Federal MDL Court).Plaintiffs in the MDL have filed against Pfizer and many other defendants a master personal injury complaint,asserting aconsolidated consumer class action alleging,among other things,claims under consumer protection statutes of all 5
299、0 states,and a medical monitoringcomplaint seeking to certify medical monitoring classes under the laws of 13 states.In December 2022,the Federal MDL Court granted defendants Daubertmotions to exclude plaintiffs expert testimony and motion for summary judgment on general causation,and dismissed the
300、litigation.In addition,(i)Pfizer has received service of Canadian class action complaints naming Pfizer and other defendants,and seeking compensatory and punitivedamages for personal injury and economic loss,allegedly arising from the defendants sale of Zantac in Canada;and(ii)the State of New Mexic
301、o and theMayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state courts,alleging various state statutory andcommon law claims in connection with the defendants alleged sale of Zantac in those jurisdictions.In April 2021,a Judicial Council
302、Coordinated Proceedingwas created in the Superior Court of California in Alameda County to coordinate personal injury actions against Pfizer and other defendants filed in Californiastate court.Coordinated proceedings have also been created in other state courts.ChantixBeginning in August 2021,a numb
303、er of putative class actions have been filed against Pfizer in various U.S.federal courts following Pfizers voluntary recall ofChantix due to the presence of a nitrosamine,N-nitroso-varenicline.Plaintiffs assert that they suffered economic harm purportedly as a result of purchasingChantix or generic
304、 varenicline medicines sold by Pfizer.Plaintiffs seek to represent nationwide and state-specific classes and seek various remedies,includingdamages and medical monitoring.In December 2022,the federal actions were transferred for coordinated pre-trial proceedings to a MDL in the U.S.DistrictCourt for
305、 the Southern District of New York.Similar putative class actions have been filed in Canada and Israel,where the product brand is Champix.A3.Legal ProceedingsCommercial and Other MattersMonsanto-Related MattersIn 1997,Monsanto Company(Former Monsanto)contributed certain chemical manufacturing operat
306、ions and facilities to a newly formed corporation,SolutiaInc.(Solutia),and spun off the shares of Solutia.In 2000,Former Monsanto merged with Pharmacia&Upjohn Company to form Pharmacia.Pharmacia thentransferred its agricultural operations to a newly created27PFIZER INC.AND SUBSIDIARY COMPANIESNOTES
307、TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)subsidiary,named Monsanto Company(New Monsanto),which it spun off in a two-stage process that was completed in 2002.Pharmacia was acquired byPfizer in 2003 and is a wholly owned subsidiary of Pfizer.In connection with its spin-off that was com
308、pleted in 2002,New Monsanto assumed,and agreed to indemnify Pharmacia for,any liabilities related toPharmacias former agricultural business.New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arisingout of,or related to,the agricultural business,a
309、nd has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regardingsuch claims and litigation.In connection with its spin-off in 1997,Solutia assumed,and agreed to indemnify Pharmacia for,liabilities related to Former Monsantos chemical businesses.As the resul
310、t of its reorganization under Chapter 11 of the U.S.Bankruptcy Code,Solutias indemnification obligations relating to Former Monsantos chemicalbusinesses are primarily limited to sites that Solutia has owned or operated.In addition,in connection with its spin-off that was completed in 2002,NewMonsant
311、o assumed,and agreed to indemnify Pharmacia for,any liabilities primarily related to Former Monsantos chemical businesses,including,but notlimited to,any such liabilities that Solutia assumed.Solutias and New Monsantos assumption of,and agreement to indemnify Pharmacia for,these liabilitiesapply to
312、pending actions and any future actions related to Former Monsantos chemical businesses in which Pharmacia is named as a defendant,including,without limitation,actions asserting environmental claims,including alleged exposure to polychlorinated biphenyls.Solutia and/or New Monsanto aredefending Pharm
313、acia in connection with various claims and litigation arising out of,or related to,Former Monsantos chemical businesses,and have beenindemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.Environmental MattersIn 2009,as part of our
314、acquisition of Wyeth,we assumed responsibility for environmental remediation at the Wyeth Holdings LLC(formerly known as,WyethHoldings Corporation and American Cyanamid Company)discontinued industrial chemical facility in Bound Brook,New Jersey.Since that time,we haveexecuted or have become a party
315、to a number of administrative settlement agreements,orders on consent,and/or judicial consent decrees,with the U.S.Environmental Protection Agency and/or New Jersey Department of Environmental Protection to perform remedial design,removal and remedial actions,andrelated environmental remediation act
316、ivities at the Bound Brook facility.We have accrued for the currently estimated costs of these activities.We are a party to a number of other proceedings brought under the Comprehensive Environmental Response,Compensation,and Liability Act of 1980,asamended,and other state,local or foreign laws in w
317、hich the primary relief sought is the cost of past and/or future remediation.Contracts with Iraqi Ministry of HealthIn 2017,a number of U.S.service members,civilians,and their families brought a complaint in the U.S.District Court for the District of Columbia against anumber of pharmaceutical and me
318、dical devices companies,including Pfizer and certain of its subsidiaries,alleging that the defendants violated the U.S.Anti-Terrorism Act.The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceuticaland medical device
319、contracts with the Iraqi Ministry of Health,and seeks monetary relief.In July 2020,the District Court granted defendants motions todismiss and dismissed all of plaintiffs claims.In January 2022,the Court of Appeals reversed the District Courts decision.In February 2022,the defendantsfiled for en ban
320、c review of the Court of Appeals decision.In February 2023,the Court of Appeals denied defendants en banc petitions.Allergan Complaint for IndemnityIn 2019,Pfizer was named as a defendant in a complaint,along with King,filed by Allergan Finance LLC(Allergan)in the Supreme Court of the State of NewYo
321、rk,asserting claims for indemnity related to Kadian,which was owned for a short period by King in 2008,prior to Pfizers acquisition of King in 2010.Thissuit was voluntarily discontinued without prejudice in January 2021.Viatris Securities LitigationIn October 2021,a putative class action was filed i
322、n the Court of Common Pleas of Allegheny County,Pennsylvania on behalf of former Mylan N.V.shareholders who received Viatris common stock in exchange for Mylan shares in connection with the spin-off of the Upjohn Business and its combinationwith Mylan(the Transactions).Viatris,Pfizer,and certain of
323、each companys current and former officers,directors and employees are named as defendants.Anamended complaint was filed in January 2023,and alleges that the defendants violated certain provisions of the Securities Act of 1933 in connection withcertain disclosures made in or omitted from the registra
324、tion statement and related prospectus issued in connection with the Transactions,as well as relatedcommunications.Plaintiff seeks damages,costs and expenses and other equitable and injunctive relief.28PFIZER INC.AND SUBSIDIARY COMPANIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)A
325、4.Legal ProceedingsGovernment InvestigationsWe are subject to extensive regulation by government agencies in the U.S.,other developed markets and multiple emerging markets in which we operate.Criminal charges,substantial fines and/or civil penalties,limitations on our ability to conduct business in
326、applicable jurisdictions,corporate integrity ordeferred prosecution agreements,as well as reputational harm and increased public interest in the matter could result from government investigations in theU.S.and other jurisdictions in which we do business.These matters often involve government request
327、s for information on a voluntary basis or throughsubpoenas after which the government may seek additional information through follow-up requests or additional subpoenas.In addition,in a qui tam lawsuit inwhich the government declines to intervene,the relator may still pursue a suit for the recovery
328、of civil damages and penalties on behalf of the government.Among the investigations by government agencies are the matters discussed below.Greenstone Investigations U.S.Department of Justice Antitrust Division InvestigationSince July 2017,the U.S.Department of Justices Antitrust Division has been in
329、vestigating our former Greenstone generics business.We believe this is relatedto an ongoing broader antitrust investigation of the generic pharmaceutical industry.We have produced records relating to this investigation.State Attorneys General and Multi-District Generics Antitrust LitigationIn April
330、2018,Greenstone received requests for information from the Antitrust Department of the Connecticut Office of the Attorney General.In May 2019,Attorneys General of more than 40 states plus the District of Columbia and Puerto Rico filed a complaint against a number of pharmaceutical companies,includin
331、g Greenstone and Pfizer.The matter has been consolidated with a MDL in the Eastern District of Pennsylvania.As to Greenstone and Pfizer,thecomplaint alleges anticompetitive conduct in violation of federal and state antitrust laws and state consumer protection laws.In June 2020,the State AttorneysGen
332、eral filed a new complaint against a large number of companies,including Greenstone and Pfizer,making similar allegations,but concerning a new set ofdrugs.This complaint was transferred to the MDL in July 2020.The MDL also includes civil complaints filed by private plaintiffs and state counties agai
333、nstPfizer,Greenstone and a significant number of other defendants asserting allegations that generally overlap with those asserted by the State Attorneys General.Subpoena&Civil Investigative Demand relating to Tris Pharma/Quillivant XRIn October 2018,we received a subpoena from the U.S.Attorneys Office for the Southern District of New York(SDNY)seeking records relating to ourrelationship with anot