Pfizer(PFE) - 2024 Q2 - Quarterly Report

Emergency Use Authorizations (EUA) and Regulatory Updates - Comirnaty (COVID-19 Vaccine, mRNA) 2023-2024 Formula has been authorized for emergency use by the FDA under an EUA for individuals aged 6 months through 11 years[7] - Paxlovid has been authorized for emergency use by the FDA under an EUA for the treatment of mild-to-moderate COVID-19 in pediatric patients aged 12 years and older weighing at least 40 kg[7] - The emergency use authorization for Comirnaty and Paxlovid is contingent on the COVID-19 pandemic declaration under Section 564(b)(1) of the U.S. Federal Food, Drug and Cosmetics Act[7] - Clinical trial data discussed in the Form 10-Q are subject to differing interpretations and regulatory authorities may require additional data or deny approval[7] Financial Performance and Revenues - Total revenues for the three months ended June 30, 2024, were $13.283 billion, compared to$13.007 billion for the same period in 2023, representing a 2.1% increase[10] - Product revenues for the six months ended June 30, 2024, were $23.314 billion, down 13.6$26.988 billion in the same period in 2023[10] - Total revenues for Q2 2024 were $13.283 billion, compared to$13.007 billion in Q2 2023[131] - Total revenues for the six months ended June 30, 2024, were $28.162 billion, an 11$31.492 billion in the same period in 2023[133] - Revenues from the U.S. government comprised 7% and 9% of total revenues for the six months ended June 30, 2024, and July 2, 2023, respectively[134] - Paxlovid recorded revenues of $251 million for the three months ended June 30, 2024, compared to$143 million in the same period in 2023[135] - Comirnaty recorded revenues of $195 million for the three months ended June 30, 2024, a significant decrease from$1.488 billion in the same period in 2023[135] - Oncology revenues for the three months ended June 30, 2024, were $3.956 billion, a 26$3.149 billion in the same period in 2023[138] - Ibrance recorded revenues of $1.130 billion for the three months ended June 30, 2024, a 9$1.247 billion in the same period in 2023[138] - Xtandi recorded revenues of $495 million for the three months ended June 30, 2024, a 17$423 million in the same period in 2023[138] Research and Development (R&D) and Expenses - Research and development expenses for the six months ended June 30, 2024, were $5.189 billion, slightly up from$5.153 billion in the same period in 2023[10] - Selling, informational, and administrative expenses for the six months ended June 30, 2024, were $7.212 billion, up 4.3$6.914 billion in the same period in 2023[10] - Restructuring charges and certain acquisition-related costs for the six months ended June 30, 2024, were $1.356 billion, significantly higher than$222 million in the same period in 2023[10] - The company recorded a $240 million intangible asset impairment charge in Q2 2024 related to a Phase 3 study for DMD treatment in the Biopharma segment[41] Net Income and Comprehensive Income - Net income attributable to Pfizer Inc. common shareholders for the six months ended June 30, 2024, was$3.156 billion, a 59.9% decrease from $7.870 billion in the same period in 2023[10] - Comprehensive income attributable to Pfizer Inc. for the six months ended June 30, 2024, was$3.302 billion, down 59.2% from $8.072 billion in the same period in 2023[12] - Net income for Q2 2024 was$41 million, compared to $2,327 million in Q2 2023, reflecting a significant decline[15] - Total earnings for Q2 2024 were a loss of$103 million, compared to a gain of $2.269 billion in Q2 2023[131] - Total earnings for the first six months of 2024 were$3.318 billion, compared to $8.539 billion in the same period of 2023[131] Cash Flow and Financial Position - Cash and cash equivalents decreased to$1.052 billion as of June 30, 2024, from $2.853 billion as of December 31, 2023[13] - Net cash used in operating activities was$691 million for the six months ended June 2024, compared to $4 million provided in the same period in 2023[17] - Net cash provided by investing activities was$6,332 million for the six months ended June 2024, compared to $22,170 million used in the same period in 2023[17] - Net cash used in financing activities was$7,390 million for the six months ended June 2024, compared to $24,403 million provided in the same period in 2023[17] - Short-term investments increased to$6,048 million as of June 30, 2024, compared to $9,837 million as of December 31, 2023[57] - Long-term investments decreased to$3,119 million as of June 30, 2024, from $3,731 million as of December 31, 2023[57] - Equity-method investments decreased to$8,029 million as of June 30, 2024, from $11,637 million as of December 31, 2023[57] - Total assets decreased to$9,322 million as of June 30, 2024, from $13,943 million as of December 31, 2023[53] - Total liabilities decreased to$1,228 million as of June 30, 2024, from $1,420 million as of December 31, 2023[53] Debt and Equity - Long-term debt decreased to$57.506 billion as of June 30, 2024, from $61.538 billion as of December 31, 2023[13] - Total equity decreased from$92,558 million at the end of March 2024 to $87,975 million by June 30, 2024[15] - Retained earnings dropped from$121,318 million at the end of March 2024 to $116,596 million by June 30, 2024[15] - Share-based payment transactions contributed$196 million to equity in Q2 2024, compared to $164 million in Q2 2023[15] - Other comprehensive loss for Q2 2024 was$58 million, compared to a gain of $187 million in Q2 2023[15] - Total shareholders' equity decreased from$92,282 million at the end of March 2024 to $87,700 million by June 30, 2024[15] - Noncontrolling interests remained relatively stable at$275 million by June 30, 2024, compared to $276 million at the end of March 2024[15] - Accumulated other comprehensive loss increased from$7,758 million at the end of March 2024 to $7,816 million by June 30, 2024[15] - Treasury stock cost remained nearly unchanged at$114,757 million by June 30, 2024, compared to $114,755 million at the end of March 2024[15] Acquisitions and Investments - The company acquired Seagen for$44.2 billion ($43.4 billion, net of cash acquired) on December 14, 2023, with provisional amounts recognized for assets acquired and liabilities assumed[24] - Identifiable intangible assets, excluding in-process research and development, were$7,395 million as of the acquisition date, adjusted from $7,970 million[26] - In-process research and development was$20,750 million as of the acquisition date, adjusted from $20,800 million[26] - Goodwill was$16,803 million as of the acquisition date, adjusted from $16,126 million[26] - Total identifiable net assets were$27,431 million as of the acquisition date, adjusted from $28,108 million[26] - Pfizer sold 30$3.5 billion, recognizing a gain of $150 million in Q1 2024, reducing its ownership to 23$8.4 billion[29] Litigation and Legal Matters - The company is involved in patent litigation, including challenges to the validity and coverage of patents on various products, processes, or dosage forms[88] - Adverse outcomes in patent litigation could result in loss of patent protection, significant revenue loss, or impairment of associated assets[88] - The company is subject to product liability and other product-related litigation, including personal injury, consumer, off-label promotion, securities, antitrust, and breach of contract claims[88] - Xeljanz (tofacitinib) patent-infringement actions against generic manufacturers, including Sinotherapeutics and Biocon, for 5 mg, 10 mg, 11 mg, and 22 mg dosage strengths[90] - Mektovi (binimetinib) patent-infringement actions against generic companies, including Teva, for method of use patents expiring in 2030, 2031, and 2033[91][93] - Vyndaqel-Vyndamax (tafamidis/tafamidis meglumine) patent-infringement actions against generic companies for 61 mg and 20 mg capsules[94] - Oxbryta (voxelotor) patent-infringement actions against Zydus and MSN for 300 mg and 500 mg tablets[95] - Nurtec (rimegepant) patent-infringement actions against multiple generic companies for 75 mg orally disintegrating tablets[96] - Comirnaty patent-infringement lawsuits filed by Alnylam, Moderna, Arbutus, and GlaxoSmithKline in multiple jurisdictions[97][98] - Paxlovid patent-infringement lawsuit filed by Enanta Pharmaceuticals for the active ingredient nirmatrelvir[99] - Abrysvo patent-infringement lawsuit filed by GlaxoSmithKline for the active ingredient in the RSV vaccine[100] - Comirnaty declaratory judgment actions and counterclaims involving CureVac in the U.S. and U.K.[101] - Effexor XR antitrust litigation settled in April 2024, involving claims of delayed generic launch and price overcharges[105] - Pfizer and Ranbaxy reached agreements to settle Lipitor-related litigation in April 2024, with certain settlements subject to court approval[106] - Pfizer settled EpiPen litigation in October 2023 on terms not material to the company, with court approval granted in July 2024[107] - Pfizer and Hospira face lawsuits related to Docetaxel, with the Mississippi Attorney General voluntarily dismissing a case in June 2024[110] - Pfizer has settled or entered into agreements to settle a substantial majority of Zantac-related state court cases as of July 2024[111] - Pfizer faces class actions related to Chantix recall, with federal cases consolidated in an MDL in December 2022[112] - New Monsanto continues to defend and indemnify Pharmacia for liabilities related to Former Monsanto's chemical businesses[114] - Pfizer assumed environmental remediation responsibilities at the Bound Brook facility following the 2009 Wyeth acquisition[115] - The U.S. Supreme Court granted certiorari in June 2024, vacating a Court of Appeals decision related to Pfizer's contracts with the Iraqi Ministry of Health[116] - Pfizer and BioNTech initiated proceedings against Poland, Romania, and Hungary in 2023 over COVID-19 vaccine order commitments[120] Segment Performance - Biopharma segment revenues for Q2 2024 were $12.991 billion, compared to$12.690 billion in Q2 2023[131] - Biopharma segment earnings for Q2 2024 were $5.897 billion, compared to$5.042 billion in Q2 2023[131] - Biopharma segment revenues for the first six months of 2024 were $27.595 billion, compared to$30.863 billion in the same period of 2023[131] - Biopharma segment earnings for the first six months of 2024 were $13.519 billion, compared to$14.559 billion in the same period of 2023[131] - Biopharma's earnings in Q2 2024 included a $74 million dividend income from the investment in ViiV, compared to$91 million in Q2 2023[130] Deferred Revenues and Contractual Obligations - Deferred revenues related to Paxlovid and Comirnaty totaled $4.3 billion as of June 30, 2024, with$2.5 billion in current liabilities and $1.8 billion in noncurrent liabilities[140] - Deferred revenues related to Paxlovid and Comirnaty decreased by$771 million in the first six months of 2024 due to a favorable final adjustment recorded in Q1 2024[140] - Revenue recognized from Paxlovid and Comirnaty deferred revenues was approximately $200 million in Q2 2024 and$1.2 billion in the first six months of 2024[140] - The $4.3 billion deferred revenues as of June 30, 2024, will be recognized in Product revenues proportionately as control of the products is transferred to customers[140] - Amounts in current liabilities ($2.5 billion) are expected to be recognized in Product revenues within the next 12 months[140] - Amounts in noncurrent liabilities ($1.8 billion) are expected to be recognized in Product revenues from 2025 through 2028[140] - Deferred revenues related to Paxlovid and Comirnaty totaled$5.1 billion as of December 31, 2023, with $2.6 billion in current liabilities and$2.5 billion in noncurrent liabilities[140] - The decrease in deferred revenues was partially offset by additional advance payments received in the first six months of 2024 as amended contracts were entered into[140] - Deferred revenues associated with contracts for other products were not significant as of June 30, 2024, or December 31, 2023[140] Tax and Repatriation - Pfizer's effective tax rate for Q2 2024 was 130.2%, a significant increase from (3.1)% in Q2 2023, primarily due to nonrecurrence of tax benefits[44] - The company paid $15 billion in repatriation tax liability over eight years, with the sixth installment paid by April 15, 2024, and the seventh due by April 15, 2025[45] - Pfizer's cash paid for income taxes in 2023 was$3.1 billion, with $1.9 billion paid in the U.S.[45] - The company recognized a$150 million gain on the partial sale of its investment in Haleon and $135 million in dividend income from ViiV in the first six months of 2024[41] - Pfizer's accumulated other comprehensive loss decreased to$7.816 billion as of June 30, 2024, from $7.961 billion at the end of 2023[50] - The company's tax provision on other comprehensive income was$22 million for Q2 2024, compared to $9 million in Q2 2023[47] Pension and Postretirement Plans - Net periodic benefit cost/(credit) for U.S. Pension Plans was$(69) million for the three months ended June 30, 2024, compared to $(37) million for the same period in 2023[83] - Net periodic benefit cost/(credit) for International Pension Plans was$23 million for the three months ended June 30, 2024, compared to $18 million for the same period in 2023[83] - Net periodic benefit cost/(credit) for Postretirement Plans was$(33) million for the three months ended June 30, 2024, compared to $(39) million for the same period in 2023[83] - The company contributed$83 million to U.S. Pension Plans and $98 million to International Pension Plans from general assets for the six months ended June 30, 2024[83] Derivative and Hedging Activities - The notional amount of outstanding foreign exchange contracts hedging intercompany forecasted inventory sales was$5.6 billion as of June 30, 2024, up from $4.9 billion as of December 31, 2023[67] - Derivative financial instruments designated as hedging instruments included foreign exchange contracts with a notional amount of$22,740 million and interest rate contracts with a notional amount of $6,750 million as of June 30, 2024[67] - Foreign exchange contracts not designated as hedging instruments had a notional amount of$22,055 million as of June 30, 2024, with a fair value asset of $97 million and a liability of$116 million[67] - Interest rate contracts in cash flow hedge relationships showed no gains or losses recognized in OID for the three months ended June 30, 2024[70] - Foreign exchange contracts in cash flow hedge relationships recognized gains of $117 million in OID for the three months ended June 30, 2024[70] - Interest rate contracts in fair value hedge relationships showed a loss of$36 million recognized in OID for the three months ended June 30, 2024[70] - Foreign exchange contracts in net investment hedge relationships recognized gains of $81 million in OID for the three months ended June 30, 2024[70] - Non-derivative financial instruments in net investment hedge relationships recognized gains of$31 million in OID for the three months ended June 30, 2024[70] - Net gain reclassified from OCI into COS: $38 million in Q2 2024,$70 million in the first six months of 2024, $55 million in Q2 2023, and$146 million in the first six months of 2023[71] - Expected pretax gain reclassification from OCI into income within the next