Segment, Geographic and Other Revenue Information

3 Months Ended

Apr. 03, 2022

Segment Reporting [Abstract]

Segment, Geographic and Other Revenue Information

Segment, Geographic and Other Revenue Information

A. Segment Information

We manage our commercial operations through two operating segments: Biopharma and PC1. The Biopharma and PC1 segments are each led by a single manager. Biopharma is the only reportable segment. Biopharma is a science-based medicines business that includes six therapeutic areas – Vaccines, Hospital, Oncology, Internal Medicine, Rare Disease, and Inflammation & Immunology. The Hospital therapeutic area commercializes our global portfolio of sterile injectable and anti-infective medicines, as well as an oral COVID-19 treatment.

Each operating segment has responsibility for its commercial activities. Regional commercial organizations market, distribute and sell our products and are supported by global platform functions that are responsible for the research, development, manufacturing and supply of our products and global corporate enabling functions. Biopharma receives its R&D services from WRDM and GPD. These services include IPR&D projects for new investigational products and additional indications for in-line products. Each operating segment 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.

Other Costs and Business Activities––Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with: (i) R&D and medical expenses managed by our WRDM and GPD organizations, (ii) corporate enabling functions and other corporate costs, (iii) overhead costs primarily associated with our manufacturing operations, (iv) our share of earnings from the Consumer Healthcare JV, as well as (v) all amortization of intangible assets, acquisition-related items, and certain significant items representing substantive and/or unusual, and in some cases recurring, items 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. Beginning in the first quarter of 2022, acquisition-related items may now include the following purchase accounting impacts that previously would have been included as part of a reconciling item entitled “Purchase accounting adjustments” that we no longer separately present: (i) the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, (ii) depreciation related to the increase/decrease in fair value of acquired fixed assets, (iii) amortization related to the increase in fair value of acquired debt and (iv) the fair value changes for contingent

consideration. The operating results of PC1, our global contract development and manufacturing organization, are included in Other business activities.

Segment Assets––We manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled. 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 $184 billion as of April 3, 2022 and $181 billion as of December 31, 2021.

Selected Income Statement Information

The following provides selected income statement information by reportable segment:
	Three Months Ended
	Revenues				Earnings(a)
(MILLIONS)	April 3, 2022		April 4, 2021		April 3, 2022		April 4, 2021
Reportable Segment:
Biopharma	$	25,323	$	14,125	$	13,438	$	8,383
Other business activities(b)	338		391		(2,475)		(2,048)
Reconciling Items:
Amortization of intangible assets	—		—		(835)		(870)
Acquisition-related items	—		—		(187)		61
Certain significant items(c)	—		—		(891)		166
	$	25,661	$	14,516	$	9,050	$	5,692

(a)Income from continuing operations before provision/(benefit) for taxes on income. Biopharma’s earnings include dividend income from our investment in ViiV of $56 million in the first quarter of 2022 and $27 million in the first quarter of 2021.

(b)Other business activities include revenues and costs associated with PC1, as well as costs that we do not allocate to our operating segments, per above.

(c)Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above). For earnings in the first quarter of 2022, includes, among other items, net losses on equity securities of $698 million recorded in Other (income)/deductions––net. For earnings in the first quarter of 2021, includes, among other items, net gains on equity securities of $399 million recorded in Other (income)/deductions––net.

B. Geographic Information

The following summarizes revenues by geographic area:
	Three Months Ended
(MILLIONS)	April 3, 2022		April 4, 2021		% Change
United States	$	8,918	$	7,530	18
Developed Europe	6,090		3,038		100
Developed Rest of World	3,286		1,123		193
Emerging Markets	7,367		2,824		161
Revenues	$	25,661	$	14,516	77

C. Other Revenue Information

Significant Customers––For information on our significant wholesale customers, see Note 17C in our 2021 Form 10-K. Additionally, revenues from the U.S. government represented 19% of total revenues for the three months ended April 3, 2022, and primarily represent sales of Comirnaty and Paxlovid. Accounts receivable from the U.S. government represented 11% of total trade accounts receivable as of April 3, 2022, and primarily relate to sales of Comirnaty and Paxlovid.

Significant Product Revenues

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

(MILLIONS)		Three Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	April 3, 2022		April. 4, 2021
TOTAL REVENUES(a)		$	25,661	$	14,516
PFIZER BIOPHARMACEUTICALS GROUP (BIOPHARMA)(a), (b)		$	25,323	$	14,125
Vaccines		$	14,941	$	4,894
Comirnaty direct sales and alliance revenues	Active immunization to prevent COVID-19	13,227		3,462
Prevnar family(c)	Pneumococcal disease	1,565		1,284
Nimenrix	Meningococcal ACWY disease	77		46
FSME-IMMUN/TicoVac	Tick-borne encephalitis disease	42		53
All other Vaccines	Various	29		49
Hospital(a)		$	3,191	$	1,886
Paxlovid	COVID-19 infection (high risk population)	1,470		—
Sulperazon	Bacterial infections	210		192
Zithromax	Bacterial infections	125		89
Ig Portfolio(d)	Various	107		105
Zavicefta	Bacterial infections	104		94
Medrol	Anti-inflammatory glucocorticoid	76		99
Fragmin	Treatment/prevention of venous thromboembolism	70		71
Vfend	Fungal infections	65		80
All other Anti-infectives	Various	381		455
All other Hospital	Various	583		700
Oncology		$	2,967	$	2,862
Ibrance	HR-positive/HER2-negative metastatic breast cancer	1,237		1,254
Xtandi alliance revenues	mCRPC, nmCRPC, mCSPC	268		267
Inlyta	Advanced RCC	234		229
Zirabev(e)	Treatment of mCRC; unresectable, locally advanced, recurrent or metastatic NSCLC; recurrent glioblastoma; metastatic RCC; and persistent, recurrent or metastatic cervical cancer	147		86
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	128		123
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	127		134
Ruxience(e)	Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis	124		98
Retacrit(e)	Anemia	115		109
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	114		200
Lorbrena	ALK-positive metastatic NSCLC	72		60
Bavencio alliance revenues	Locally advanced or metastatic urothelial carcinoma; metastatic Merkel cell carcinoma; immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC	67		32
Aromasin	Post-menopausal early and advanced breast cancer	62		52
Trazimera(e)	HER-positive breast cancer and metastatic stomach cancers	52		45
Besponsa	Relapsed or refractory B-cell acute lymphoblastic leukemia	51		50
Braftovi	In combination with Mektovi for metastatic melanoma in patients with a BRAFV600E/K mutation and, in combination with Erbitux® (cetuximab), for the treatment of BRAFV600E-mutant mCRC after prior therapy	48		47
Mektovi	In combination with Braftovi for metastatic melanoma in patients with a BRAFV600E/K mutation	40		35
All other Oncology	Various	81		41
Internal Medicine		$	2,440	$	2,594
Eliquis alliance revenues and direct sales	Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism	1,793		1,643
Premarin family	Symptoms of menopause	102		143
BMP2	Development of bone and cartilage	67		49
Toviaz	Overactive bladder	54		57
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	2		217
All other Internal Medicine	Various	423		484
Rare Disease		$	963	$	824
Vyndaqel/Vyndamax	ATTR-cardiomyopathy and polyneuropathy	612		453
BeneFIX	Hemophilia B	112		112

(MILLIONS)		Three Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	April 3, 2022		April. 4, 2021
Genotropin	Replacement of human growth hormone	80		80
Somavert	Acromegaly	68		65
Refacto AF/Xyntha	Hemophilia A	66		89
All other Rare Disease	Various	25		26
Inflammation & Immunology (I&I)		$	821	$	1,065
Xeljanz	RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis, ankylosing spondylitis	372		538
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	280		319
Inflectra(e)	Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis	135		177
All other I&I	Various	35		31
PFIZER CENTREONE(b)		$	338	$	391
Total Alliance revenues		$	2,314	$	1,770
Total Biosimilars(e)		$	605	$	530
Total Sterile Injectable Pharmaceuticals(f)		$	1,331	$	1,482

(a)On December 31, 2021, we completed the sale of our Meridian subsidiary. Prior to its sale, Meridian was managed as part of the Hospital therapeutic area. Beginning in the fourth quarter of 2021, the financial results of Meridian were reflected as discontinued operations. Prior-period financial information has been restated, as appropriate. See Note 1A.

(b)At the beginning of our fiscal fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of two operating segments, each led by a single manager: Biopharma, our innovative science-based biopharmaceutical business, and PC1. PC1, which previously had been managed within the Hospital therapeutic area, includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($47 million for the first quarter of 2022), and revenues from our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships, including but not limited to, transitional manufacturing and supply agreements with Viatris following the spin-off of the Upjohn Business. We have revised prior period information to conform to the current management structure.

(c)Prevnar family include revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult).

(d)Immunoglobulin (Ig) portfolio includes the revenues from Panzyga, Octagam and Cutaquig.

(e)Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Zirabev, Inflectra, Ruxience, Retacrit, and Trazimera.

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

Remaining Performance Obligations––Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty to our customers totaled approximately $30 billion as of April 3, 2022, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods. Of this amount, we expect to recognize revenue of approximately $18 billion in 2022, $12 billion in 2023 and $300 million in 2024. Remaining performance obligations exclude arrangements with an original expected contract duration of less than one year.

Deferred Revenues––Our deferred revenues primarily relate to advance payments received or receivable in connection with contracts that we entered into during 2022 and 2021 with various government or government sponsored customers in international markets for supply of Comirnaty and Paxlovid. The deferred revenues associated with the advance payments related to Comirnaty and Paxlovid total $3.3 billion as of April 3, 2022 and the deferred revenues associated with the advance payments of Comirnaty total $3.3 billion as of December 31, 2021, with $3.0 billion and $258 million recorded in current liabilities and noncurrent liabilities, respectively, as of April 3, 2022, and $3.0 billion and $249 million recorded in current liabilities and noncurrent liabilities, respectively, as of December 31, 2021. There were no deferred revenues associated with Paxlovid as of December 31, 2021. The Comirnaty and Paxlovid deferred revenue balances were effectively unchanged during the first three months of 2022 as amounts recognized in Revenues as we delivered the products to our customers were offset by additional advance payments received as we entered into new or amended contracts, including new advance payments received for Paxlovid contracts, and additional advance payments received as we invoiced customers in advance of product deliveries. During the first quarter of 2022, we recognized revenue of $1.6 billion that was included in the balance of Comirnaty deferred revenues as of December 31, 2021. The Comirnaty and Paxlovid deferred revenues as of April 3, 2022 will be recognized in Revenues proportionately as we transfer control of the products to our customers and satisfy our performance obligation under the contracts, with the amounts included in current liabilities expected to be recognized in Revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Revenues in 2023 and in the first quarter of 2024. Deferred revenues associated with contracts for other products were not significant as of April 3, 2022 or December 31, 2021.