- Raises 2015 Financial Guidance(1)
Ranges for Reported Revenues(2) by $1.5 Billion and Adjusted
Diluted EPS(3) by $0.03 Solely Due to the Inclusion of Legacy
Hospira Operations in Pfizer's Financial Results
- Lowers 2015 Financial Guidance(1) Range
for Reported Diluted EPS(2) by $0.09 Reflecting Inclusion of Legacy
Hospira Operations More than Offset by Anticipated Negative Impacts
of Associated Purchase Accounting Adjustments as well as
Restructuring and Other Acquisition-Related Costs
Pfizer Inc. (NYSE:PFE) announced updates to certain components
of its 2015 financial guidance(1) solely to reflect the impact of
the recently completed acquisition of Hospira, Inc. (Hospira).
On September 3, 2015, Pfizer completed the acquisition of
Hospira. Pfizer's fiscal year-end for international subsidiaries is
November 30, 2015, and Pfizer's fiscal year-end for U.S.
subsidiaries is December 31, 2015. Consequently, Pfizer's 2015
financial results will include approximately three months of legacy
Hospira international operations and approximately four months of
legacy Hospira U.S. operations.
Financial results for Pfizer's third-quarter 2015 and
nine-months ended September 27, 2015 will reflect approximately one
month of legacy Hospira U.S. operations but will not include
financial results from legacy Hospira international operations.
2015 FINANCIAL GUIDANCE(1)
The ranges for certain components of Pfizer's 2015 financial
guidance(1) were updated solely to reflect the inclusion of legacy
Hospira operations in Pfizer's financial results from September 3,
2015 through fiscal year-end 2015. These updates do not reflect any
recent changes in foreign exchange rates since mid-July 2015 or any
operational factors other than the inclusion of legacy Hospira
operations.
Pfizer intends to provide a comprehensive update to all of its
2015 financial guidance(1) components, including to reflect the
impact of legacy Hospira operations on other financial guidance(1)
components, when Pfizer's third-quarter 2015 financial results are
announced on October 27, 2015.
The ranges for certain components of Pfizer's 2015 financial
guidance(1) have been updated as set forth below:
Reported Revenues(2) $46.5 to $47.5
billion (previously $45.0 to $46.0 billion)
Reported Diluted EPS(2) $1.29 to $1.38
(previously $1.38 to $1.47) Adjusted Diluted EPS(3) $2.04 to $2.10
(previously $2.01 to $2.07)
A reconciliation of certain components of Pfizer's 2015
financial guidance(1) provided on July 28, 2015 to Pfizer's current
2015 financial guidance(1) is below.
2015 Financial Guidance(1)
Provided on July 28, 2015
Anticipated Impact of
Legacy Hospira Operations
from September 3, 2015
2015 Financial Guidance(1)
Reported Revenues(2) $45.0 to $46.0
billion $1.5 billion $46.5 to $47.5
billion Reported Diluted EPS(2) $1.38 to $1.47
($0.09) $1.29 to $1.38 Adjusted Diluted EPS(3)
$2.01 to $2.07 $0.03
$2.04 to $2.10
For additional details, see footnotes below and the attached
disclosure notice.
(1) The 2015 financial guidance reflects the following:
- Does not assume the completion of any
business development transactions not completed as of June 28,
2015, including any one-time upfront payments associated with such
transactions, except for the completion of the Hospira acquisition
on September 3, 2015.
- Excludes the potential effects of the
resolution of litigation-related matters not substantially resolved
as of June 28, 2015.
- Exchange rates assumed for legacy
Pfizer financial guidance updated on July 28, 2015 are a blend of
the actual exchange rates in effect through second-quarter 2015 and
the mid-July 2015 exchange rates for the remainder of the year.
Exchange rates assumed for projected legacy Hospira operations are
from mid-September 2015. Excludes the impact of a potential
devaluation of the Venezuelan bolivar.
- Guidance for legacy Pfizer reported
revenues(2) reflects the anticipated negative impact of $3.4
billion due to recent and expected generic competition for certain
products that have recently lost or are anticipated to soon lose
patent protection.
- Guidance for legacy Pfizer reported
revenues(2) also reflects the anticipated negative impact of $3.3
billion as a result of unfavorable changes in essentially all
foreign exchange rates relative to the U.S. dollar through mid-July
2015 compared to foreign exchange rates from 2014. The anticipated
negative impact on legacy Pfizer reported(2) and adjusted(3)
diluted EPS resulting from unfavorable changes in foreign exchange
rates through mid-July 2015 compared to foreign exchange rates from
2014 is approximately $0.19.
- Guidance for reported(2) and
adjusted(3) diluted EPS assumes diluted weighted-average shares
outstanding of approximately 6.25 billion shares.
- Reconciliation of the 2015 Adjusted
income(3) and Adjusted diluted EPS(3) guidance to the 2015 Reported
net income(2) attributable to Pfizer Inc. and Reported diluted
EPS(2) attributable to Pfizer Inc. common shareholders guidance.
Some amounts below may not add due to rounding:
($ in billions, except per share amounts)
Income/(Expense)
Net Income
Diluted EPS Adjusted income/diluted EPS(3) guidance $12.9 -
$13.3 $2.04 - $2.10 Purchase accounting impacts of transactions
completed as of September 27, 2015 (3.0) (0.48) Restructuring,
implementation and other acquisition-related costs (1.1) - (1.3)
(0.17) - (0.20) Business and legal entity alignment costs (0.3)
(0.05) Certain other items incurred through June 28, 2015
(0.2)
(0.03) Reported net income attributable to Pfizer Inc./diluted
EPS(2) guidance $8.2 -
$8.8 $1.29 - $1.38
(2) Reported revenues is defined as revenues in accordance with
U.S. generally accepted accounting principles (GAAP). Reported
net income is defined as net income attributable to Pfizer Inc. in
accordance with U.S. GAAP. Reported diluted earnings per share
(EPS) is defined as reported diluted EPS attributable to Pfizer
Inc. common shareholders in accordance with U.S. GAAP.
(3) Adjusted income and its components and Adjusted diluted EPS
are defined as reported U.S. GAAP net income(2) and its components
and reported diluted EPS(2) excluding purchase accounting
adjustments, acquisition-related costs, discontinued operations and
certain significant items. Adjusted revenues, Adjusted cost of
sales, Adjusted selling, informational and administrative
(SI&A) expenses, Adjusted research and development (R&D)
expenses and Adjusted other (income)/deductions are income
statement line items prepared on the same basis as, and therefore
components of, the overall Adjusted income measure. As
described under Adjusted income in the Management’s Discussion and
Analysis of Financial Condition and Results of Operations section
of Pfizer’s Quarterly Report on Form 10-Q for the fiscal quarter
ended June 28, 2015, management uses Adjusted income, among other
factors, to set performance goals and to measure the performance of
the overall company. We believe that investors’ understanding
of our performance is enhanced by disclosing this measure. The
Adjusted income and its components and Adjusted diluted EPS
measures are not, and should not be viewed as, substitutes for U.S.
GAAP net income and its components and diluted EPS.
DISCLOSURE NOTICE: The information contained in this release is
as of September 30, 2015. We assume no obligation to update
forward-looking statements contained in this release as a result of
new information or future events or developments.
This release contains forward-looking statements about our
anticipated future operating and financial performance, business
plans and prospects and our recent acquisition of Hospira, among
other things, that involve substantial risks and
uncertainties. You can identify these statements by the fact
that they use future dates or use words such as “will,” “may,”
“could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe,” “target,” “forecast,”
“goal,” “objective,” “aim” and other words and terms of similar
meaning. Among the factors that could cause actual results to
differ materially from past results and future plans and projected
future results are the following:
- the outcome of research and development
activities, including, without limitation, the ability to meet
anticipated clinical trial commencement and completion dates,
regulatory submission and approval dates, and launch dates for
product candidates, as well as the possibility of unfavorable
clinical trial results, including unfavorable new clinical data and
additional analyses of existing clinical data;
- decisions by regulatory authorities
regarding whether and when to approve our drug applications, which
will depend on the assessment by such regulatory authorities of the
benefit-risk profile suggested by the totality of the efficacy and
safety information submitted; and decisions by regulatory
authorities regarding labeling, ingredients and other matters that
could affect the availability or commercial potential of our
products;
- the speed with which regulatory
authorizations, pricing approvals and product launches may be
achieved;
- the outcome of post-approval clinical
trials, which could result in the loss of marketing approval for a
product or changes in the labeling for, and/or increased or new
concerns about the safety or efficacy of, a product that could
affect its availability or commercial potential;
- risks associated with interim data,
including the risk that final results of studies for which interim
data have been provided and/or additional clinical trials may be
different from (including less favorable than) the interim data
results and may not support further clinical development of the
applicable product candidate or indication;
- the success of external
business-development activities, including the ability to satisfy
the conditions to closing of announced transactions in the
anticipated timeframe or at all;
- competitive developments, including the
impact on our competitive position of new product entrants, in-line
branded products, generic products, private label products and
product candidates that treat diseases and conditions similar to
those treated by our in-line drugs and drug candidates;
- the implementation by the FDA of an
abbreviated legal pathway to approve biosimilar products, which
could subject our biologic products to competition from biosimilar
products in the U.S., with attendant competitive pressures, after
the expiration of any applicable exclusivity period and patent
rights;
- the ability to meet generic and branded
competition after the loss of patent protection for our products or
competitor products;
- the ability to successfully market both
new and existing products domestically and internationally;
- difficulties or delays in
manufacturing;
- trade buying patterns;
- the impact of existing and future
legislation and regulatory provisions on product exclusivity;
- trends toward managed care and
healthcare cost containment;
- the impact of any significant spending
reductions affecting Medicare, Medicaid or other publicly funded or
subsidized health programs or changes in the tax treatment of
employer-sponsored health insurance that may be implemented, and/or
any significant additional taxes or fees that may be imposed on the
pharmaceutical industry as part of any broad deficit-reduction
effort;
- the impact of U.S. healthcare
legislation enacted in 2010-the Patient Protection and Affordable
Care Act, as amended by the Health Care and Education
Reconciliation Act-and of any modification or repeal of any of the
provisions thereof;
- U.S. federal or state legislation or
regulatory action affecting, among other things, pharmaceutical
product pricing, reimbursement or access, including under Medicaid,
Medicare and other publicly funded or subsidized health programs;
the importation of prescription drugs from outside the U.S. at
prices that are regulated by governments of various foreign
countries; direct-to-consumer advertising and interactions with
healthcare professionals; and the use of comparative effectiveness
methodologies that could be implemented in a manner that focuses
primarily on the cost differences and minimizes the therapeutic
differences among pharmaceutical products and restricts access to
innovative medicines; as well as pricing pressures as a result of
highly competitive insurance markets;
- legislation or regulatory action in
markets outside the U.S. affecting pharmaceutical product pricing,
reimbursement or access, including, in particular, continued
government-mandated price reductions for certain biopharmaceutical
products and government-imposed access restrictions in certain
countries;
- the exposure of our operations outside
the U.S. to possible capital and exchange controls, expropriation
and other restrictive government actions, changes in intellectual
property legal protections and remedies, as well as political
unrest and unstable governments and legal systems;
- contingencies related to actual or
alleged environmental contamination;
- claims and concerns that may arise
regarding the safety or efficacy of in-line products and product
candidates;
- any significant breakdown, infiltration
or interruption of our information technology systems and
infrastructure;
- legal defense costs, insurance
expenses, settlement costs, the risk of an adverse decision or
settlement and the adequacy of reserves related to product
liability, patent protection, government investigations, consumer,
commercial, securities, antitrust, environmental and tax issues,
ongoing efforts to explore various means for resolving asbestos
litigation, and other legal proceedings;
- our ability to protect our patents and
other intellectual property, both domestically and
internationally;
- interest rate and foreign currency
exchange rate fluctuations, including the impact of possible
currency devaluations in countries experiencing high inflation
rates;
- governmental laws and regulations
affecting domestic and foreign operations, including, without
limitation, tax obligations and changes affecting the tax treatment
by the U.S. of income earned outside the U.S. that may result from
pending and possible future proposals;
- any significant issues involving our
largest wholesaler customers, which account for a substantial
portion of our revenues;
- the possible impact of the increased
presence of counterfeit medicines in the pharmaceutical supply
chain on our revenues and on patient confidence in the integrity of
our medicines;
- any significant issues that may arise
related to the outsourcing of certain operational and staff
functions to third parties, including with regard to quality,
timeliness and compliance with applicable legal requirements and
industry standards;
- any significant issues that may arise
related to our joint ventures and other third-party business
arrangements;
- changes in U.S. generally accepted
accounting principles;
- uncertainties related to general
economic, political, business, industry, regulatory and market
conditions including, without limitation, uncertainties related to
the impact on us, our customers, suppliers and lenders and
counterparties to our foreign-exchange and interest-rate agreements
of challenging global economic conditions and recent and possible
future changes in global financial markets; and the related risk
that our allowance for doubtful accounts may not be adequate;
- any changes in business, political and
economic conditions due to actual or threatened terrorist activity
in the U.S. and other parts of the world, and related U.S. military
action overseas;
- growth in costs and expenses;
- changes in our product, segment and
geographic mix;
- the impact of purchase accounting
adjustments, acquisition-related costs, discontinued operations and
certain significant items;
- the impact of acquisitions,
divestitures, restructurings, internal reorganizations, product
recalls and withdrawals and other unusual items, including our
ability to realize the projected benefits of our cost-reduction and
productivity initiatives, including those related to our research
and development organization, and of the internal separation of our
commercial operations into our new operating structure; and
- risks and uncertainties related to our
recent acquisition of Hospira, including, among other things, the
ability to realize the anticipated benefits of the acquisition of
Hospira, including the possibility that expected synergies will not
be realized or will not be realized within the expected time frame;
the risk that the businesses will not be integrated successfully;
disruption from the transaction making it more difficult to
maintain business and operational relationships; significant
transaction costs; and unknown liabilities.
A further list and description of risks, uncertainties and other
matters can be found in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2014 and in our subsequent
reports on Form 10-Q, in each case including in the sections
thereof captioned “Forward-Looking Information and Factors That May
Affect Future Results” and “Item 1A. Risk Factors”, and in our
subsequent reports on Form 8-K.
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version on businesswire.com: http://www.businesswire.com/news/home/20150930005921/en/
Pfizer Inc.Media:Joan Campion, 212-733-2798orInvestor:Chuck
Triano, 212-733-3901orRyan Crowe, 212-733-8160
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