Segment, Geographic and Other Revenue Information

3 Months Ended

Mar. 29, 2020

Segment, Geographic and Other Revenue Information

A. Segment Information

At the beginning of our fiscal year 2019, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of three distinct business segments: Pfizer Biopharmaceuticals Group (Biopharma), Upjohn and through July 31, 2019, Pfizer’s Consumer Healthcare business (Consumer Healthcare), each led by a single manager. Each operating segment has responsibility for its commercial activities. Upjohn is and through July 31, 2019, Consumer Healthcare was responsible for its own R&D activities while Biopharma receives its R&D services from GPD and WRDM. These services include IPR&D projects for new investigational products and additional indications for in-line products. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation. Biopharma and Upjohn are the only reportable segments.

Beginning in 2020, Upjohn began managing our Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products, and a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan (Mylan-Japan). As a result, revenues and expenses associated with Meridian and Mylan-Japan are reported in our Upjohn business beginning in the first quarter of 2020. In 2019, revenues and expenses from Meridian and Mylan-Japan were recorded in our Biopharma business. We have revised prior-period information (Revenues and Earnings, as defined by management) to conform to the current management structure. As described in Notes to Consolidated Financial Statements—Note 1A. Basis of Presentation and Significant Accounting Policies: Basis of Presentation in our 2019 Financial Report, recent acquisitions and the contribution of our Consumer Healthcare business to the GSK Consumer Healthcare joint venture have impacted our results of operations. For additional information on the GSK Consumer Healthcare joint venture, see Note 2.

Operating Segments



Some additional information about our Biopharma and Upjohn business segments follows:
	Pfizer Biopharmaceuticals Group
Biopharma is a science-based innovative medicines business that includes six business units – Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine. The Hospital unit commercializes our global portfolio of sterile injectable and anti-infective medicines and includes Pfizer’s contract manufacturing operation, Pfizer CentreOne. Each business unit is committed to delivering breakthroughs that change patients’ lives.		Upjohn is a global, primarily off-patent branded and generic medicines business, which includes a portfolio of 20 globally recognized solid oral dose brands, as well as a U.S.-based generics platform, Greenstone.
Select products include: - Prevnar 13/Prevenar 13 - Eliquis - Ibrance - Xeljanz - Enbrel (outside the U.S. and Canada) - Chantix/Champix - Vyndaqel/Vyndamax - Xtandi - Sutent		Select products include: - Lipitor - Lyrica - Norvasc - Celebrex - Viagra - Certain generic medicines

Other Costs and Business Activities

Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:

•

WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payers and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.


•	GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including late stage portfolio spend. GPD also provides technical support and other services to Pfizer R&D projects. GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.


•	Other––the operating results of our Consumer Healthcare business, through July 31, 2019, and costs associated with other commercial activities not managed as part of Biopharma or Upjohn, including all strategy, business development, portfolio management and valuation capabilities, which previously had been reported in various parts of the organization.

•

Corporate and Other Unallocated––the costs associated with platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance, and worldwide procurement), patient advocacy activities and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments, as well as overhead expenses associated with our manufacturing (which include manufacturing variances associated with production) and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs.

•

Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as gains on the completion of joint venture transactions, restructuring charges, legal charges or gains and losses from equity securities) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

Segment Assets

We manage our assets on a Total Company basis, not by operating segment, as many of our operating assets are shared or commingled (such as accounts receivable, as many of our customers are served by multiple operating segments). Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately $166 billion as of March 29, 2020 and $167 billion as of December 31, 2019.

Selected Income Statement Information



The following table provides selected income statement information by reportable segment:
	Three Months Ended
	Revenues				Earnings^(a)
(MILLIONS OF DOLLARS)	March 29, 2020		March 31, 2019		March 29, 2020			March 31, 2019
Reportable Segments:
Biopharma	$	10,007	$	9,045	$	6,729		$	5,883
Upjohn	2,022		3,214		1,191			2,279
Total reportable segments	12,028		12,259		7,920			8,162
Other business activities	—		858		(1,489		)	(1,113		)
Reconciling Items:
Corporate and other unallocated	—		—		(1,110		)	(1,278		)
Purchase accounting adjustments	—		—		(812		)	(1,038		)
Acquisition-related costs	—		—		(13		)	(28		)
Certain significant items^(b)	—		—		(612		)	(382		)
	$	12,028	$	13,118	$	3,885		$	4,323


^(a)	Income from continuing operations before provision for taxes on income. Biopharma’s earnings include dividend income of $77 million in the first quarter of 2020 and $64 million in the first quarter of 2019 from our investment in ViiV. For additional information, see Note 4.


^(b)	Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

Equity in the net income of investees accounted for by the equity method is not significant for any of our operating segments.

The operating segment information does not purport to represent the revenues, costs and Income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

B. Geographic Information



The following table provides revenues by geographic area:
	Three Months Ended
(MILLIONS OF DOLLARS)	March 29, 2020		March 31, 2019		% Change
United States	$	5,651	$	6,175	(8	)
Developed Europe^(a)	1,921		2,086		(8	)
Developed Rest of World^(b)	1,456		1,535		(5	)
Emerging Markets^(c)	3,001		3,322		(10	)
Revenues	$	12,028	$	13,118	(8	)


^(a)	Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.5 billion in the first quarter of 2020 and $1.7 billion in the first quarter of 2019.


^(b)	Developed Rest of World region includes the following markets: Japan, Canada, South Korea, Australia and New Zealand.


^(c)	Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe, Africa, the Middle East, Central Europe and Turkey.

C. Other Revenue Information

Significant Product Revenues

The following table provides detailed revenue information for several of our major products:



(MILLIONS OF DOLLARS)		Three Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	March 29, 2020		March 31, 2019
TOTAL REVENUES		$	12,028	$	13,118
PFIZER BIOPHARMACEUTICALS GROUP (BIOPHARMA)		$	10,007	$	9,045
Internal Medicine^(a)		$	2,332	$	2,137
Eliquis alliance revenues and direct sales	Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism	1,300		1,011
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	270		273
Premarin family	Symptoms of menopause	152		168
BMP2	Development of bone and cartilage	69		67
Toviaz	Overactive bladder	60		60
All other Internal Medicine	Various	480		559
Oncology		$	2,435	$	1,961
Ibrance	Metastatic breast cancer	1,248		1,133
Xtandi alliance revenues	Non-metastatic and metastatic castration-resistant prostate cancer and non-metastatic castration-sensitive prostate cancer	209		168
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	205		232
Inlyta	Advanced RCC	169		73
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	149		123
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	100		80
Retacrit^(b)	Anemia	89		31
Braftovi	In combination with Mektovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation and, in combination with Erbitux^® (cetuximab), for the treatment of BRAF^V600E-mutant metastatic colorectal cancer after prior therapy	37		—
Mektovi	In combination with Braftovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation	37		—
All other Oncology	Various	192		122
Hospital^{(a), (c)}		$	2,012	$	1,827
Sulperazon	Bacterial infections	187		177
Zithromax	Bacterial infections	138		104
Medrol	Anti-inflammatory glucocorticoid	129		120
Vfend	Fungal infections	74		85
Panzyga	Primary humoral immunodeficiency	74		17
Zyvox	Bacterial infections	70		64
Fragmin	Treatment/prevention of venous thromboembolism	59		60
Pfizer CentreOne^(d)	Various	152		176
All other Anti-infectives	Various	444		405
All other Hospital^(c)	Various	684		620
Vaccines		$	1,611	$	1,612
Prevnar 13/Prevenar 13	Pneumococcal disease	1,450		1,486
Nimenrix	Meningococcal disease	75		50
All other Vaccines	Various	86		77
Inflammation & Immunology (I&I)		$	978	$	1,037
Xeljanz	RA, PsA, UC	451		423
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	347		451
Inflectra/Remsima^(b)	Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis	158		138
All other I&I	Various	22		25
Rare Disease		$	639	$	470
Vyndaqel/Vyndamax	ATTR-cardiomyopathy and polyneuropathy	231		41
BeneFIX	Hemophilia B	121		125
Genotropin	Replacement of human growth hormone	103		107
Refacto AF/Xyntha	Hemophilia A	89		106
Somavert	Acromegaly	64		59
All other Rare Disease	Various	31		31



(MILLIONS OF DOLLARS)		Three Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	March 29, 2020		March 31, 2019
UPJOHN^(a)		$	2,022	$	3,214
Lipitor	Reduction of LDL cholesterol	405		622
Lyrica	Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury	357		1,186
Norvasc	Hypertension	197		300
Celebrex	Arthritis pain and inflammation, acute pain	156		174
Viagra	Erectile dysfunction	127		145
Zoloft	Depression and certain anxiety disorders	78		69
Effexor	Depression and certain anxiety disorders	77		77
EpiPen^(a)	Epinephrine injection used in treatment of life-threatening allergic reactions	72		56
Xalatan/Xalacom	Glaucoma and ocular hypertension	61		62
All other Upjohn	Various	492		523
CONSUMER HEALTHCARE BUSINESS^(e)		$	—	$	858
Total Alliance revenues	Various	$	1,382	$	1,090
Total Biosimilars^(b)	Various	$	288	$	179
Total Sterile Injectable Pharmaceuticals^(f)		$	1,407	$	1,237

^(a)


^(b)	Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Inflectra/Remsima and Retacrit.

^(c)

Hospital is a business unit that commercializes our global portfolio of sterile injectable and anti-infective medicines. Hospital also includes Pfizer CentreOne^(d). All other Hospital primarily includes revenues from legacy Sterile Injectables Pharmaceuticals (SIP) products (that are not anti-infective products) and, to a much lesser extent, solid oral dose products (that are not anti-infective products). SIP anti-infective products that are not individually listed above are recorded in “All other Anti-infectives”.


^(d)	Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements.


^(e)	On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare joint venture. For additional information, see Note 2B.

^(f)

Total Sterile Injectable Pharmaceuticals represents the total of all branded and generic injectable products in the Hospital business, including anti-infective sterile injectable pharmaceuticals.