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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-3619
PFIZER INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-5315170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
235 East 42nd Street
New York, New York 10017
(Address of principal executive (Zip Code)
offices)
(212) 573-2323
(Registrant's telephone number including area code)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, $.05 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
4% Convertible Subordinated Debentures Due 1997 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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Indicate 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 the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X__ No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
The aggregate market value of the voting stock held by non-affiliates of
the registrant computed by reference to the closing price at which the stock was
sold as of February 26, 1996 was approximately $42.1 billion.
The number of shares outstanding of each of the registrant's classes of
common stock as of February 26, 1996 was: 639,181,479 shares of common stock,
all of one class.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareholders for the fiscal year ended
December 31, 1995 Parts I, II and IV
Proxy Statement dated March 19, 1996 Part III
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TABLE OF CONTENTS
PART I
ITEM PAGE
- ----- ----
1. Business......................................................... 2
General.......................................................... 2
Comparative Segment and Geographic Data.......................... 2
Health Care...................................................... 2
Animal Health.................................................... 5
Consumer Health Care............................................. 5
Discontinued Operations: Food Science Business................... 6
Financial Subsidiaries........................................... 6
International Operations......................................... 6
Tax Matters...................................................... 7
Patents and Research............................................. 8
Employees........................................................ 8
Regulation....................................................... 8
Raw Materials and Energy......................................... 9
Environment...................................................... 9
2. Properties....................................................... 10
3. Legal Proceedings................................................ 12
4. Submission of Matters to a Vote of Security Holders.............. 16
4a. Executive Officers of the Company................................ 17
PART II
5. Market for the Registrant's Common Equity and Related Stockholder
Matters......................................................... 22
6. Selected Financial Data.......................................... 22
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................... 22
8. Financial Statements and Supplementary Data...................... 22
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................ 22
PART III
10. Directors and Executive Officers of the Registrant............... 22
11. Executive Compensation........................................... 23
12. Security Ownership of Certain Beneficial Owners and Management... 23
13. Certain Relationships and Related Transactions................... 23
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form
8-K............................................................. 23
Signatures....................................................... 25
Financial Statement Schedule
Exhibit 11
Exhibit 12
Exhibit 23
Exhibit 99
PART I
ITEM 1. BUSINESS
GENERAL
Pfizer Inc. (the "Company") is a research-based global health care company.
The Company discovers, develops, manufactures and sells innovative
technology-intensive products in three business segments: Health Care, which
includes a broad range of prescription pharmaceuticals, orthopedic implants,
medical devices and surgical equipment; Animal Health, which includes animal
health products and feed supplements; and Consumer Health Care, which includes a
variety of nonprescription drugs and personal care products. Additionally, the
Company's Financial Subsidiaries include a banking operation in Europe and a
small captive insurance operation.
COMPARATIVE SEGMENT AND GEOGRAPHIC DATA
Comparative segment information and geographic data as of and for the years
ended December 31, 1995, 1994 and 1993 are set forth on pages 40 and 41, and in
the Note "Financial Subsidiaries" on page 47 and a description of the Company's
business segments is set forth on page 58 of the Company's Annual Report to
Shareholders for the year ended December 31, 1995 and are incorporated herein by
reference.
HEALTH CARE
The Company's Health Care business is comprised of pharmaceuticals and
hospital products. The Company competes with numerous other health care
companies in the discovery and development of new, technologically advanced
pharmaceutical and hospital products; in seeking use of its products by the
medical profession; and in the sale of its product lines to wholesale and retail
outlets, public and private hospitals, managed care organizations, government
and the medical profession.
The principal methods of competition in health care vary by product
category. There are a significant number of innovative companies in the field. A
critical factor in most markets in which the Company competes is the ability to
offer technological advances over competitive products. The productivity of
scientific discovery and clinical development efforts is central to long-term
operational success since there are many companies that specialize in marketing
products that no longer have patent or regulatory protection. Other important
factors in these markets include the ability to transfer knowledge of
technological advances to the medical community, product quality, prompt
delivery and price.
The United States pharmaceutical marketplace has in recent years experienced
intensified price competition, brought about by a range of market forces,
including: new product development, increased generic competition, growth of
managed care organizations and legislation requiring pharmaceutical companies to
provide rebates and discounts to government agencies. Similar competitive
forces, in varying degrees, have also been present in various other countries in
which the Company operates.
Prescription pharmaceutical and hospital products, both in the United States
and abroad, are promoted directly to physicians, as well as to a variety of
managed care organizations. The Company conducts corporate advertising
nationally, using both print and television media, to inform the general public
about the Company and its innovative medical research. Certain specific products
have also been advertised directly to consumers beginning in 1995.
Pharmaceutical products are distributed in large part to wholesalers, retail
outlets, hospitals, clinics, government agencies and managed care organizations.
Hospital products are generally sold directly to medical institutions and, in
some cases, through distributors and surgical supply dealers.
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PHARMACEUTICALS
The Company's worldwide pharmaceutical products are comprised primarily of
drugs which fall into the following major therapeutic classes: cardiovasculars,
anti-infectives, central nervous system agents, anti-inflammatories and
antidiabetes agents. In 1995, pharmaceuticals contributed 71% of the Company's
consolidated net sales, as compared to 73% in 1994 and 72% in 1993. Increases in
both United States and international pharmaceutical revenues in 1995 were
principally the result of strong sales of products launched in the 1990s,
including Norvasc (amlodipine besylate), Cardura (doxazosin mesylate), Diflucan
(fluconazole), Zithromax (azithromycin), Zoloft (sertraline) and Glucotrol XL
(glipizide GITS).
Cardiovascular products are the Company's largest therapeutic product line
accounting for 30% of the Company's 1995 consolidated net sales as compared to
30% and 28% in 1994 and 1993, respectively. Sales of these products grew 23% in
1995, including a 65% increase in sales of Norvasc, a long-lasting (once-a-day)
calcium channel blocker for hypertension and angina, as well as a 32% increase
in sales of Cardura, an alpha blocker for hypertension. Sales of Procardia XL
(nifedipine GITS), a long-lasting (once-a-day) calcium channel blocker for
hypertension and angina, decreased by 4% in 1995. A supplemental New Drug
Application for the use of Cardura in the treatment of benign prostatic
hyperplasia ("BPH"), an enlargement of the prostate gland, was approved by the
United States Food and Drug Administration ("FDA") in February 1995. Usage of
Cardura for this indication contributed to its increase in sales for the year.
Worldwide anti-infective sales increased 23% in 1995 mainly on the strength
of Diflucan and Zithromax. U.S. anti-infective sales grew 24% while
international sales rose by 22%. Diflucan, an anti-fungal agent, is indicated
for use in a variety of fungal infections including certain types which afflict
AIDS and immunosuppressed cancer patients. The product also received U.S.
approval for the indication of vaginal candidiasis in 1994. Diflucan posted a
sales increase of 22% in 1995 and Zithromax, an oral antibiotic, posted a sales
increase of 97%. Part of the growth of Zithromax in the U.S. can be attributed
to the October 1995 approval from the FDA for pediatric use of Zithromax oral
suspension for acute otitis media and streptococcal pharnygitis/tonsillitis.
Total anti-infective sales accounted for 21% of the Company's consolidated 1995
net sales, compared to 22% in 1994 and 23% in 1993.
U.S. sales of Pfizer's central nervous system agents rose 41% in 1995,
reflecting increased sales of Zoloft, an anti-depressant introduced in the U.S.
in 1992. In August 1995, the Company received an approvable letter from the FDA
for an indication of obsessive compulsive disorder ("OCD"). Central nervous
system agents grew to 11% of the Company's consolidated 1995 net sales from 10%
in 1994 and 7% in 1993.
In September 1995, the Company received an approvable letter from the FDA
for pediatric use of the antihistamine, Zyrtec (cetirizine HCl). In December
1995, the FDA granted marketing clearance to Zyrtec for the treatment of
seasonal and perennial allergic rhinitis, and chronic urticaria. Zyrtec, the
most widely prescribed antihistamine in Europe, is currently marketed worldwide
by the Belgian company, UCB S.A., and is licensed to the Company for the U.S.
and Canada. Pfizer and UCB Pharma, a subsidiary of UCB S.A., will copromote
Zyrtec in the U.S. This product was launched in Canada in 1991 under the name
Reactine. It was launched in the United States in February 1996.
In February 1996, the Company acquired Bioindustria Farmaceutici S.p.A. an
Italian company engaged in the production and distribution of prescription and
over-the-counter pharmaceutical products.
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The Company currently is seeking approval by the FDA for the following
products for the indications listed:
PRODUCT INDICATIONS DATE FILED
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Zithromax Lower respiratory tract infection -- pediatric December 1995
Zithromax MYCOBACTERIUM AVIUM COMPLEX (MAC) December 1995
Zithromax Atypical pneumonia December 1995
Zoloft Panic disorder December 1995
Norvasc Safety-label change for treatment of hypertension and April 1995
angina among those with congestive heart failure
Zithromax Certain sexually transmitted diseases December 1994
tenidap Osteo- and rheumatoid arthritis December 1993
Unasyn Injectible antibiotic -- pediatric November 1993
Zyrtec Pediatric January 1993
Zoloft Obsessive-compulsive disorder May 1992
In addition, the Company has marketing rights in the United States and Japan
to XOMA Corporation, Inc.'s E5, a monoclonal antibody for the treatment of gram
negative sepsis, which is undergoing FDA regulatory review.
HOSPITAL PRODUCTS
The Company's Hospital Products Group consists of two divisions -- Howmedica
and the Medical Devices Division. Howmedica manufactures and markets orthopedic
implants. Medical Devices consists of four core businesses -- Schneider, NAMIC
U.S.A. Corporation ("NAMIC"), Valleylab and American Medical Systems as well as
smaller businesses, including Strato/Infusaid. In 1995, the sales of the
Hospital Products Group accounted for 13% of the Company's consolidated net
sales compared with 14% in 1994 and 15% in 1993.
Howmedica's reconstructive hip, knee and bone cement products are used to
replace joints which have deteriorated as a result of disease or injury.
Howmedica's internal and external fixation devices are used by orthopedic
surgeons to manage bone fractures. In January 1996, Pfizer acquired the
Leibinger Companies headquartered in Freiburg, Germany and Dallas, Texas. The
Leibinger Companies, which will operate as a division of Howmedica, are leaders
in the development, manufacture and distribution of implantable devices used in
oral and craniomaxillofacial surgery and specialty surgical instruments. They
have also pioneered advances in stereotaxy equipment and computer software for
sophisticated neurological procedures.
Schneider, an international leader in angioplasty catheters, is a leading
supplier of stents for vascular and non-vascular applications. NAMIC, acquired
in March 1995, designs, manufactures and markets a broad range of
single-patient-use medical products, primarily for use in the diagnosis and
treatment of atherosclerotic cardiovascular disease. NAMIC's product lines
complement those of Schneider and are expected to expand opportunities for both
businesses.
Valleylab is a leading manufacturer of electrosurgical and ultrasonic
surgical equipment used in open and minimally invasive surgical procedures.
Valleylab continues to invest in new product lines to improve surgical outcomes
and enhance both patient and physician safety.
American Medical Systems is a manufacturer and marketer of impotence and
incontinence implants. In September 1995, AMS entered into an agreement with
Reprogenesis L.P. to collaborate on novel applications of tissue engineering for
the treatment of urological disorders.
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Strato/Infusaid is a manufacturer and supplier of vascular access devices
and advanced drug delivery systems. In October 1995, Strato/Infusaid received
FDA approval for sale of implantable pumps for the intrathecal administration of
morphine.
ANIMAL HEALTH
In January 1995, the Company acquired the SmithKline Beecham Animal Health
("SBAH") business, a world leader in animal vaccines and companion animal health
products, which complemented the Company's existing animal health business in
terms of product, species and geographic sales coverage. The acquired business
has been fully integrated into the Company's animal health business.
The Company's Animal Health Group discovers, develops, manufactures and
sells animal health products for the prevention and treatment of diseases in
livestock, poultry, companion animals and other animals. The Company is a
significant manufacturer of injectable antibiotics, anthelmintics and
anticoccidial products for food animals, and with the acquisition of SBAH, the
Company became a significant manufacturer of biologicals and pet products. In
1995, the Animal Health Group contributed 12% of the Company's consolidated net
sales, compared with 8% in 1994 and in 1993.
The principal products of the Animal Health Group are: Dectomax
(doramectin), the Company's antiparasitic which was first launched in 1993 and
is now available in much of Latin America, South Africa and Europe; Stafac
(virginiamycin), a feed additive anti-infective for poultry, cattle and swine;
Terramycin LA-200 (oxytetracycline) (marketed as TM/LA outside of North
America), a broad-spectrum injectable antibiotic; the Banminth (pyrantel
tartrate), Nemex (pyrantel pamoate) and Paratect (morantel tartrate)
anthelmintics; Coxistac and Posistac (salinomycin) anticoccidials primarily for
poultry; Valbazen (albendazole), a bovine parasiticide; Terramycin
(oxytetracycline), a broad-spectrum antibiotic used for a variety of animal
diseases; Mecadox (carbadox), an antibacterial for pigs; and Advocin
(danofloxacin), the Company's new antibacterial for treating respiratory
diseases in livestock and poultry. Aviax (semduramicin), a potent,
broad-spectrum ionophore anticoccidial used to prevent coccidiosis in poultry,
was launched in 1995 in Japan and Latin America. The Company also manufactures
and sells an extensive line of cattle, swine and companion animal vaccines
including BoviShield, Leukocell, RespiSure and Vanguard.
Animal health and nutrition products are sold through veterinarians, drug
wholesalers, distributors, retail outlets and directly to users, including feed
manufacturers and animal producers. The principal methods of competition with
respect to animal health products vary somewhat but include product innovation,
service, price, quality and effective transfer of technological advances to the
market through advertising and promotion. A substantial number of other
companies manufacture and sell one or more products that are similar to the
Company's animal health products. There are hundreds of producers of animal
health products throughout the world.
CONSUMER HEALTH CARE
The Company's Consumer Health Care Group's products include proprietary
health items, baby care products and toiletries, and a number of products sold
only in selected international markets, including Vanart hair care products in
Mexico and Migraleve over-the-counter ("OTC") migraine medication and the TCP
line of antiseptic and germicidal products marketed primarily in the United
Kingdom.
Among the better-known OTC brands manufactured and marketed by Consumer
Health Care are Visine (tetrahydrozoline HCl) eyedrops, Ben-Gay topical
analgesics, Desitin diaper rash ointments, Unisom (doxylamine succinate) sleep
aids, Plax pre-brushing dental rinse, Rid anti-lice products and Barbasol shave
creams and gels. Line extensions introduced in recent years include: Unisom
SleepGels, soft liquid-filled gels with a maximum-strength sleep aid formula;
Daily Care from Desitin, a lotion for the prevention of diaper rash; Barbasol
Pure Silk women's shave products; and new
5
formulations of Rid and Plax. In August 1995, the Company purchased Bain de
Soleil skin care products from Procter & Gamble. In March 1996, the Company
agreed to acquire the Cortizone and Hemorid brands from Thompson Medical Co.,
Inc. Cortizone is a leading brand of over-the-counter hydrocortisone products
and Hemorid is the only brand of hemorrhoidal preparations expressly designed
for women.
The Company completed several successful prescription--to--over-the-counter
(OTC) launches in 1995. An OTC version of Reactine, Canada's leading Rx
antihistamine (cetirizine HCl), was launched in that country in April. OTC
formulations of tioconazole were introduced in Canada as GyneCure for vaginal
candidiasis and Trosyd AF for athlete's foot. In November, Diflucan One
(fluconazole) was launched in the United Kingdom as a one-pill OTC treatment for
vaginal candidiasis. In February 1996, Juscoat (piroxicam gel) was launched in
Japan for treatment of chronic shoulder and back pain.
Many other companies, large and small, manufacture and sell one or more
products that are similar to the Company's consumer health products. The Company
is a significant competitor in this extensive OTC market, and its principal
methods of competition include product quality, product innovation, customer
satisfaction, broad distribution capabilities, significant advertising and
promotion efforts and price. In general, the winning and retaining of consumer
acceptance of the Company's consumer products involve heavy expenditures for
advertising, promotion and marketing.
DISCONTINUED OPERATIONS: FOOD SCIENCE BUSINESS
In December 1995, the Company agreed to sell substantially all the net
assets of its food science business to Cultor Ltd., a publicly held
international nutrition company based in Finland, for approximately $350 million
in cash. The sale was completed in January 1996. Disposal of the remaining
assets, which are not material to the Company's business or the food science
business, is expected to be completed over several years. The food science
business has been reported in the Company's financial statements as a
discontinued operation.
FINANCIAL SUBSIDIARIES
The Company conducts international banking operations through a subsidiary,
Pfizer International Bank Europe (PIBE), based in Dublin, Ireland. PIBE,
incorporated under the laws of Ireland, operates under a full banking license
from the Central Bank of Ireland. It makes loans and accepts deposits in a
number of currencies in international markets. PIBE is an active Euromarket
lender through its portfolio of loans and money market instruments to high
quality corporations and sovereigns. Loans are made on a short and medium term
basis, with floating interest rates.
The Company's insurance operation, The Kodiak Company Limited, reinsures
certain assets, inland transport and marine cargo of Pfizer's international
operations.
INTERNATIONAL OPERATIONS
Outside the United States, the Company has significant operations, both
direct and through distributors that, in general, parallel its United States
businesses. In 1995, the Company registered net sales in excess of $10 million
in each of 45 countries outside the U.S., with no single country other than the
U.S. and Japan, contributing more than 10% of total net sales. The Company's
international businesses are subject, in varying degrees, to a number of risks
inherent in carrying on business in certain countries outside the United States,
including possible nationalization, expropriation and other restrictive
government actions such as capital regulations. In addition, the values of
currencies change and can either favorably or unfavorably impact the financial
position and the results of operations of the Company. It is impossible to
predict future changes in foreign exchange values or the effect they will have
on the Company. The Company actively manages its foreign exchange risk through a
variety of techniques including the use of foreign currency contracts. In
addition, the
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Company engages in hedging programs designed to protect selected balance sheet
positions and future cash flow exposures. Further information with respect to
the financial instruments used to carry out these hedging programs is
incorporated by reference to the note entitled "Financial Instruments and
Concentrations of Credit Risk" beginning on page 47 of the Annual Report to
Shareholders for the fiscal year ended December 31, 1995.
TAX MATTERS
The earnings of the Company's pharmaceutical subsidiary operating in Puerto
Rico are subject to taxes pursuant to an incentive grant effective through
December 31, 2002. Under this grant, the Company is partially exempt from
income, property and municipal taxes. For tax years beginning after December 31,
1993, the Omnibus Budget Reconciliation Act of 1993 ("OBRA") reduced by 40% the
benefits accruing to the Company under Section 936 of the Internal Revenue Code
(the "Puerto Rico tax credit"). Such tax benefits will decline an additional
five percentage points per year through 1998. For tax years beginning after
December 31, 1997, the Puerto Rico tax credit will be fixed at 40% of the level
allowed prior to the enactment of OBRA.
The Internal Revenue Service ("IRS") has completed its examination of the
Company's federal income tax returns for the years 1987 through 1989. As part of
this process, the Company received an examination report from the IRS in August
1995, requesting a response within 30 days, which sets forth the adjustments the
IRS is proposing for those years. The Company has filed a response protesting
the proposed adjustments and is awaiting communication from the IRS Appeals
office. The proposed adjustments relate primarily to the tax accounting
treatment of certain swaps and related transactions undertaken by the Company in
1987 and 1988. These transactions resulted in the receipt of cash in those
years, which the Company duly reported as income for tax purposes. In 1989 (in
Notice 89-21), the IRS announced that it believed cash received in certain swap
transactions should be reported as income for tax purposes over the life of the
swaps, rather than when received. In the case of the Company, this would cause
some of the income to be reported in years subject to the Tax Reform Act of
1986. The IRS proposed adjustment involves approximately $72 million in federal
taxes for the years 1987 through 1989, plus interest. If the proposed adjustment
is carried through to the maturity of the transactions in 1992, an additional
tax deficiency of approximately $86 million, plus interest, would result. The
Company disagrees with the proposed adjustment and continues to believe that its
tax accounting treatment for the transactions in question was proper. The
Company is protesting and appealing the proposed adjustments. While it is
impossible to determine the final disposition, the Company is of the opinion
that the ultimate resolution of this matter should not have a material adverse
effect on the financial position or the results of operations of the Company.
In November 1994, Belgian tax authorities notified Pfizer Research and
Development Company N.V./S.A. ("PRDCO"), an indirect wholly owned subsidiary of
the Company, of a proposed adjustment to the taxable income of PRDCO for fiscal
year 1992. The proposed adjustment arises from an assertion by the Belgian tax
authorities of jurisdiction with respect to income resulting primarily from
certain transfers of property by non-Belgian subsidiaries of the Company to the
Irish branch of PRDCO. In January 1995, PRDCO received an assessment from the
tax authorities for additional taxes and interest of approximately $432 million
and $97 million, respectively, relating to these matters. In January 1996, PRDCO
received an assessment from the tax authorities, for fiscal year 1993, for
additional taxes and interest of approximately $86 million and $18 million,
respectively. The new assessment arises from the same assertion by the Belgian
tax authorities of jurisdiction with respect to all income of the Irish branch
of PRDCO. Based upon the relevant facts regarding the Irish branch of PRDCO and
the provisions of Belgium tax laws and the written opinions of outside legal
counsel, the Company believes that the assessments are wholly without merit.
The Company believes that its accrued tax liabilities are adequate for all
open years.
7
PATENTS AND RESEARCH
The Company owns or is licensed under a number of patents relating to its
products and manufacturing processes which, in the aggregate, are believed to be
of material importance in its businesses. Based on current product sales, and in
view of the vigorous competition with products sold by others, the Company does
not consider any single patent or related group of patents to be significant in
relation to the enterprise as a whole, except for the Procardia XL, Zithromax,
Diflucan, Zoloft and Norvasc patents. Procardia XL employs a novel drug delivery
system developed and patented by Alza Corporation. The Company holds an
exclusive license to use this delivery system with nifedipine until 2003. In
mid-1993, the FDA approved a New Drug Application (" NDA") for a competitor's
sustained-release form of nifedipine for the treatment of hypertension. This
product uses a different delivery system from the patented technology used in
Procardia XL. Other forms of sustained-release nifedipine have been reported to
be in various stages of development and in the marketplace by other companies.
It is not possible to predict the timing and impact on sales of Procardia XL of
possible future competition. Zithromax is a novel, broad spectrum macrolide
antibiotic patented by Pliva and exclusively licensed to the Company for sales
and marketing in all major countries of the world. The U.S. product patent on
Zithromax (azithromycin) expires in 2005. The Company holds patents relating to
Diflucan, Zoloft, and Norvasc.
The Company spent in excess of $1.4 billion in 1995, $1.1 billion in 1994,
and $960 million in 1993 on Company-sponsored research and development
throughout the world. In 1996, the Company plans to spend approximately $1.7
billion on research and development. In 1991, the Company also established
Pfizer Research and Development Company (PRDCO) in Ireland. In 1992, the Company
provided PRDCO with an initial capitalization of approximately $1 billion to
enable PRDCO to engage in research and development through a cost-sharing
arrangement with Pfizer Ltd. (a Pfizer U.K. subsidiary) in exchange for PRDCO's
receiving a portion of property rights relating to the development of specific
products.
Competition in research, involving the development of new products and
processes and the improvement of existing products and processes, is
particularly significant and results from time to time in product and process
obsolescence. The development of new and improved products is important to the
Company's success in all areas of its business.
EMPLOYEES
As of December 31, 1995, the Company employed approximately 43,800 persons
in its continuing operations throughout the world as follows: United States,
17,800; Europe, 12,500; Asia, 7,200; Canada/Latin America, 4,900; and
Africa/Middle East, 1,400. The Company has a good relationship with its
employees. The Food Science business, which was sold in January 1996, employed
approximately 500 persons as of December 31, 1995.
REGULATION
Most of the Company's businesses are subject to varying degrees of
governmental regulation in the countries in which operations are conducted. Such
regulation in the United States involves a more complex product approval process
than in many other countries and therefore often results in later marketing
clearances and a corresponding increase in the expense of introducing new
products in the United States. In many international markets, prices of
pharmaceuticals are controlled by the government.
The 1990 Omnibus Budget Reconciliation Act requires pharmaceutical companies
to extend rebates to state Medicaid agencies based on each state's reimbursement
of pharmaceutical products under the Medicaid program. The Veterans Health Care
Act, passed in 1992, requires manufacturers to provide discounts on purchases of
pharmaceutical products by the Department of Veterans Affairs ("DVA") and by
certain entities funded by the Public Health Service. The Company's net sales in
1995
8
were reduced by Medicaid rebates and rebates under related state programs which
amounted to $85 million. In addition, in 1995, Pfizer provided $80 million in
discounts to the federal government, primarily to the DVA and the Department of
Defense, for drugs purchased in accordance with the Veterans Health Care Act.
In 1990, the FDA announced a call for data for ingredients contained in
products bearing anti-plaque and related claims. The call for data is part of
the FDA's ongoing review, begun in 1972, of OTC drug products. The FDA is taking
this administrative approach to evaluate the safety and efficacy of anti-plaque
products and has not proceeded further with regard to 1989 regulatory letters it
issued to the Company and several other manufacturers of products bearing
anti-plaque claims. The Company submitted its response to the call for data
relating to Plax, its pre-brushing dental rinse, on June 17, 1991. This filing,
as well as filings of other manufacturers, is still under review and is
currently being considered by an FDA Advisory Panel.
On January 1, 1995, the new European Medicines Evaluation Agency ("EMEA")
instituted a new drug-approval process for the member states of the European
Union ("EU"). The EMEA provides two new drug-approval procedures. A "centralized
procedure" supplements the traditional decentralized approach and allows for a
single central approval that is valid in all EU states. The first such approval,
for a non-Pfizer pharmaceutical, was issued in 1995. While it is envisioned that
it will take several years for EMEA to be fully operational, it is expected that
a harmonized, centralized regulatory agency in Europe would offer benefits to
the human and veterinary drug industries. The Company continues to assess
developments in this area and is implementing strategies designed to maximize
benefits to the Company's products.
During 1995, Congress set aside its debate on reform of the U.S. healthcare
system and focused on balancing the Federal budget. As part of the budget
process, proposals from both parties call for substantial reforms of the
Medicare and Medicaid programs. As with the Congressional coordination of
healthcare reform in 1994, Congress has not, to date, been able to reach a
consensus. If consensus is reached, and Medicare and/or Medicaid legislation is
enacted, it may require significant reductions from currently projected
expenditures for the Medicare and Medicaid programs. Medicaid managed care
systems driven by budget concerns are already under consideration in several
states. If the Medicare and Medicaid programs implement systems that severely
restrict the access of program participants to innovative new medicines, this
could have a significant adverse effect on the Company.
RAW MATERIALS AND ENERGY
Raw materials essential to the business of the Company and its subsidiaries
are generally obtainable from multiple sources. The Company did not experience
any significant restrictions on availability of raw materials or supplies during
the last year and none is expected in 1996. Energy was available to the Company
in sufficient quantities to meet Company requirements and this condition is
expected to continue in 1996.
ENVIRONMENT
Certain of the Company's operations are affected by Federal, State and local
laws and regulations relating to environmental quality. The Company has made and
intends to continue to make the
9
necessary expenditures for environmental protection. Compliance with such laws
and regulations is not expected to have a material adverse effect on the
financial position or the results of operations of the Company.
UNITED ALL
STATES OTHER TOTAL
------ ----- -----
(MILLIONS OF DOLLARS)
Environment-related capital expenditures:
1995 Actual.......................................... $41.9 $ 4.0 $45.9
1996 Estimated....................................... 49.5 11.8 61.3
1997 Estimated....................................... 42.7 3.5 46.2
Other environmental-related expenses:
1995 Actual.......................................... 35.7 13.0 48.7
1996 Estimated....................................... 43.5 20.3 63.8
ITEM 2. PROPERTIES
Following is a summary description of the Company's principal plants and
properties:
The Company's world headquarters is located at 235 East 42nd Street, New
York, NY. The Company owns this 33-story office building which contains
approximately 650,000 square feet. The building stands on slightly less than one
acre of land which is leased under an agreement expiring in 2057. In 1983, the
Company purchased a nine-story office building located at 219 East 42nd Street,
containing approximately 263,400 square feet which is immediately adjacent to
the Company's headquarters. The Company also leases additional office space in
New York City consisting of approximately 111,000 square feet.
All of the following properties are owned in fee by the Company.
Groton Research Laboratories and Plant Facilities -- These facilities are
located in Groton, Connecticut, and surrounding towns, on approximately 649
acres, and include a number of buildings of one to eight stories, containing
approximately 3,088,000 square feet of floor space either existing or under
construction.
In the research complex at Groton, construction of significant new buildings
is continuing, with major expansion (116,000 square feet) of the pharmaceutical
research and development facilities scheduled for completion in 1996.
Construction was completed in 1993 on several research expansions including a
156,000-square-foot drug-safety building addition, a 30,000-square-foot
central-utilities building, and a 442,000-square-foot parking facility.
Principal products produced at Groton are bulk pharmaceuticals. Since acquiring
the plant in 1946, the Company has made major improvements, including
construction of production facilities, a powerhouse and generating equipment and
a large research complex adjacent to the plant. In 1992, major improvements to
plant facilities were initiated, including a process effluent and waste water
treatment facility and a major pharmaceutical capacity replacement project. Both
projects are expected to be completed in 1996.
Brooklyn Plant -- The Company's site in Brooklyn, New York, is on
approximately 17 acres, including a number of buildings containing approximately
596,000 square feet of floor space. The primary operations, pharmaceutical
dosage-form manufacturing and packaging, are housed in an eight-story production
facility containing 545,000 square feet.
Memphis Logistics Center -- This distribution and order fulfillment
operation is located on a 20-acre site in Memphis, Tennessee. Three former
distribution centers (Atlanta, Chicago and Dallas) merged into the Memphis
Logistics Center in 1995, creating this geographically centralized facility. The
Center provides the Company with 262,440 square feet of warehouse space and
15,000 square feet of office space. In addition, the warehouse has the
capability of expanding by another 175,000 square feet. Besides distribution and
transportation services, the Memphis facility is also used as a center for
certain customer service operations of the Company.
10
Vigo Plant and Research Facility -- These facilities, located in Vigo County
near Terre Haute, Indiana, are on a site of approximately 2,000 acres and
consist of a number of buildings of one to five stories containing approximately
575,000 square feet of floor space. Principal products produced at this plant
are pharmaceutical products and bulk antibiotics. Animal health research is also
performed on this site. The acreage and floor space reflect the sale of Pfizer's
Food Science Group to Cultor Ltd. The sale was consummated on January 28, 1996.
Barceloneta Plant -- Pfizer Pharmaceuticals Inc. is located on an 89-acre
property owned by the Company at Barceloneta, Puerto Rico. An additional 151
acres of land adjacent to this property were purchased in 1991 for future
utilization. An adjacent 9-acre site was purchased in 1995 and integrated into
existing facilities. The facilities contain four major manufacturing buildings
(of two to four floors) and twelve support buildings with a total approximate
area of 419,700 square feet of floor space; and ten additional facilities (tank
farms, electrical substations, cooling towers, etc.) with an approximate area of
81,000 square feet, for a total plant facilities area of approximately 500,700
square feet. The plant houses organic synthesis manufacturing, pharmaceutical
dosage-form manufacturing and packaging facilities and the required service
areas, such as bulk and drum liquid storage, laboratories, utilities,
engineering shops, employee services and administration.
Lincoln Plant and Research Facility and Lee's Summit Facility -- The
Company's principal Animal Health facilities are located in Lincoln, Nebraska
and Lee's Summit, Missouri. The extensive Lincoln property encompasses 850,651
square feet, including a biological production facility covering 285,348 square
feet of floor space, a pharmaceutical production facility covering 87,640 square
feet, 18 satellite buildings and two offsite research farms. Operations at
Lincoln include a manufacturing center for biological and pharmaceutical animal
health products, and a research and development center for biological products.
The Lee's Summit Facility is located on a site of approximately 104 acres
owned by the Company in the City of Lee's Summit, Jackson County, Missouri.
There are five major buildings on the site of one to five floors with a total
floor space of approximately 215,000 square feet. Primary operations at the
facility are manufacturing and packaging of sterile injectible products,
blending and packaging of medicated premix products, and distribution
operations.
Other U.S. Locations -- The Company also operates 9 other production
facilities in the United States and has five regional sales centers and two
additional distribution centers in various parts of the country which are owned
in fee.
Outside the United States -- The Company's major manufacturing facilities
outside the United States are located in Australia, Belgium, Brazil, China,
France, Germany, Great Britain, India, Ireland, Italy, Japan, Mexico and
Venezuela. The plants in these thirteen countries have an aggregate of over 2.5
million square feet of floor space. Other plants are located in over 16 other
countries around the world.
Sandwich -- A large medicinal and animal health research unit is located in
Sandwich, England where an 82,000-square-foot clinical-sciences building became
operational in 1993 and a 99,000-square-foot animal-sciences building became
operational in early 1994. Construction of a 97,000-square-foot pharmaceutical
sciences building is in the advanced stage of completion. An effluent treatment
plant is also under construction for this site.
Ringaskiddy -- The Ringaskiddy facility in Ireland comprises three fully
operational bulk organic synthesis manufacturing plants which are of key
importance to bulk organic substance sourcing. The last unit began operating in
early 1995 and is now operating at design capacity. Ringaskiddy manufactures the
majority of bulk products required by the International Pharmaceuticals Group in
its worldwide dosage-form operations. These manufacturing plants, which are
computer controlled, provide considerable flexibility in supplying both the
current and foreseeable requirements for the Group. The facility also has the
capacity to support the manufacture of substances being developed for
11
future products. Ringaskiddy's manufacturing operations are self-supported by a
modern and efficient infrastructure, providing such services as utilities,
quality assurance, environmental treatment systems and maintenance.
Nagoya -- The Nagoya facility in Japan encompasses several significant
individual operations in addition to its research function and is the sole
supplier of certain bulk substances. Fermentation, bulk organic synthesis and
dosage-form manufacturing are important to the supply of the Company's
operations in Japan (the country with the largest sales after the United States)
as well as elsewhere in the world. Various facilities on the site are computer
controlled and, similar to Ringaskiddy, the manufacturing operations are
self-supported by utility services, quality assurance, environmental treatment
systems and maintenance functions. Manufacturing facilities for fermentation and
refining are being expanded to meet the growing demand for specialized drug
substances and are expected to be operational by the end of 1996.
In addition to the facilities outlined above, research laboratories also
exist in France and Germany.
The Company's major manufacturing facilities in the U.S. and the other
locations referred to above manufacture various products for all of the
Company's businesses. These properties are maintained in good operating
condition and the manufacturing facilities have capacities considered adequate
to meet the Company's needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in a number of claims and litigations, including
product liability claims and litigations considered normal in the nature of its
businesses. These include suits involving various pharmaceutical and hospital
products that allege either reaction to or injury from use of the product.
As previously disclosed, numerous claims have been brought against the
Company and Shiley Incorporated, a wholly owned subsidiary, alleging either
personal injury from fracture of 60 DEG. or 70 DEG. Shiley Convexo-Concave (C/C)
heart valves, or anxiety that properly functioning implanted valves might
fracture in the future or personal injury from a prophylactic replacement of a
functioning valve.
In an attempt to resolve all claims alleging anxiety that properly
functioning valves might fracture in the future, the Company entered into a
settlement agreement in January 1992 in Bowling v. Shiley, et al., a case
brought in the United States District Court for the Southern District of Ohio,
that establishes a worldwide settlement class of people with C/C heart valves
and their spouses, except those who elect to exclude themselves. The settlement
provides for a Consultation Fund of $90 million to $140 million (depending on
the number of claims filed) from which valve recipients who make claims will
receive payments that are intended to cover their cost of consultation with
cardiologists or other health care providers with respect to their valves. The
settlement agreement establishes a second fund of at least $75 million to
support C/C valve-related research, including the development of techniques to
identify valve recipients who may have significant risk of fracture, and to
cover the unreimbursed medical expenses that valve recipients may incur for
certain procedures related to the valves. The Company's obligation as to
coverage of these unreimbursed medical expenses is not subject to any dollar
limitation. Following a hearing on the fairness of the settlement, it was
approved by the court on August 19, 1992. An appeal of the court's approval of
the settlement was dismissed on December 21, 1993 by the United States Court of
Appeals for the Sixth Circuit. A motion for rehearing en banc was denied on
March 4, 1994, and the U.S. Supreme Court denied a writ of certiorari on October
3, 1994. On August 8, 1994, the Sixth Circuit dismissed an appeal from the
denial of a motion by the same appellants to vacate the judgment approving the
settlement, and the U.S. Supreme Court denied a writ of certiorari on January 9,
1995. Another appeal to the Sixth Circuit by the same appellants regarding the
denial of their earlier motion to intervene is pending. It is expected that most
of the costs arising from the Bowling class settlement will be covered by
insurance and the proceeds of
12
the sale of certain product lines of the Shiley businesses in 1992. Of
approximately 900 implantees (and spouses of some of them) who opted out of the
Bowling settlement class, nine have cases pending; approximately 792 have been
resolved; and approximately 100 have never filed a case or claim.
Several claims relating to elective reoperations of valve recipients are
currently pending. Some of these claims relate to elective reoperations covered
by the Bowling class settlement described above, and, therefore, the claimants
are entitled to certain benefits in accordance with the settlement. Such
claimants, if they irrevocably waive all of the benefits of the settlement, may
pursue separate litigation to recover damages in spite of the class settlement.
The Company is defending these claims.
Generally, the plaintiffs in all of the pending heart valve litigations
discussed above seek money damages. Based on the experience of the Company in
defending these claims to date, including available insurance and reserves, the
Company is of the opinion that these actions should not have a material adverse
effect on the financial position or the results of operations of the Company.
On September 30, 1993, Dairyland Insurance Co., a carrier providing excess
liability coverage ("excess carrier") in the early 1980s, commenced an action in
the California Superior Court in Orange County, seeking a declaratory judgment
that it was not obligated to provide insurance coverage for Shiley heart valve
liability claims. On October 8, 1993, Pfizer filed cross-complaints against
Dairyland and filed third-party complaints against 73 other excess carriers who
sold excess liability policies covering periods from 1978 to 1985, seeking
damages and declaratory judgments that they are obligated to pay for defense and
indemnity to the extent not paid by other carriers. Several such claims have
been resolved and the remainder are involved in pretrial discovery.
The Company's operations are subject to federal, state, local and foreign
environmental laws and regulations. Under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA" or
"Superfund"), the Company has been designated as a potentially responsible party
by the United States Environmental Protection Agency with respect to certain
waste sites with which the Company may have had direct or indirect involvement.
Similar designations have been made by some state environmental agencies under
applicable state superfund laws. Such designations are made regardless of the
extent of the Company's involvement. There are also claims that the Company may
be a responsible party or participant with respect to several waste site matters
in foreign jurisdictions. Such claims have been made by the filing of a
complaint, the issuance of an administrative directive or order, or the issuance
of a notice or demand letter. These claims are in various stages of
administrative or judicial proceedings. They include demands for recovery of
past governmental costs and for future investigative or remedial actions. In
many cases, the dollar amount of the claim is not specified. In most cases,
claims have been asserted against a number of other entities for the same
recovery or other relief as was asserted against the Company. The Company is
currently participating in remedial action at a number of sites under federal,
state, local and foreign laws.
To the extent possible with the limited amount of information available at
this time, the Company has evaluated its responsibility for costs and related
liability with respect to the above sites and is of the opinion that the
Company's liability with respect to these sites should not have a material
adverse effect on the financial position or the results of operations of the
Company. In arriving at this conclusion, the Company has considered, among other
things, the payments that have been made with respect to the sites in the past;
the factors, such as volume and relative toxicity, ordinarily applied to
allocate defense and remedial costs at such sites; the probable costs to be paid
by the other potentially responsible parties; total projected remedial costs for
a site, if known; existing technology; and the currently enacted laws and
regulations. The Company anticipates that a portion of these costs and related
liability will be covered by available insurance.
Through the early 1970s, Pfizer (Minerals Division) and Quigley Company,
Inc., a wholly owned subsidiary, sold a minimal amount of one construction
product and several refractory products containing some asbestos. These sales
were discontinued thereafter. Although these sales represented a minor market
share, the Company has been named as one of a number of defendants in numerous
13
lawsuits. These actions, and actions related to the Company's sale of talc
products in the past, claim personal injury resulting from exposure to
asbestos-containing products, and nearly all seek general and punitive damages.
In these actions, the Company or Quigley is typically one of a number of
defendants, and both are members of the Center for Claims Resolution (the
"CCR"), a joint defense organization of twenty defendants that is defending
these claims. The Company and Quigley are responsible for varying percentages of
defense and liability payments for all members of the CCR. Prior to September
1990, the cases involving talc products were defended by the CCR, but the
Company is now overseeing its own defense of these actions. A number of cases
alleging property damage from asbestos-containing products installed in
buildings have also been brought against Pfizer.
On January 15, 1993, a class action complaint and settlement agreement were
filed in the United States District Court for the Eastern District of
Pennsylvania involving all personal injury claims by persons who have been
exposed to asbestos-containing products but who have not yet filed a personal
injury action against the members of the CCR. The settlement agreement
establishes a claims-processing mechanism that will provide historic settlement
values upon proof of impaired medical condition as well as claims-processing
rates over ten years. In addition, the shares allocated to the CCR members
eliminate joint and several liability. The court has determined that the
settlement is fair and reasonable. Subsequently, the court entered an injunction
enforcing its determination. An appeal from that injunction is pending in the
United States Court of Appeals for the Third Circuit.
At approximately the time it filed the future claims class action, the CCR
settled approximately 16,360 personal injury cases on behalf of its members
including Pfizer and Quigley. The CCR has continued to settle remaining and
opt-out cases and claims on a similar basis to past settlements. The total
pending number of cases as of December 31, 1995 is 14,305 asbestos cases against
Quigley; 5,764 asbestos cases against Pfizer Inc.; and 70 talc cases against
Pfizer Inc.
Costs incurred by the Company in defending the asbestos personal injury
claims and the property damage claims, as well as settlements and damage awards
in connection therewith, are largely insured against under policies issued by
several primary insurance carriers and a number of excess carriers.
The Company believes that its costs incurred in defending and ultimately
disposing of the asbestos personal injury claims, as well as the property damage
claims, will be largely covered by insurance policies issued by carriers that
have agreed to provide coverage, subject to deductibles, exclusions, retentions
and policy limits. In connection with the future claims settlement, the
defendants have commenced a third-party action against their respective excess
insurance carriers that have not agreed to provide coverage seeking a
declaratory judgment that (a) the future claims settlement is fair and
reasonable as to the carriers; (b) the carriers had adequate notice of the
future claims class settlement; and (c) the carriers are obligated to provide
coverage for asbestos personal injury claims. Based on the Company's experience
in defending the claims to date and the amount of insurance coverage available,
the Company is of the opinion that the actions should not ultimately have a
material adverse effect on the financial position or the results of operations
of the Company.
The United States Environmental Protection Agency -- Region 1 and the
Department of Justice have informed the Company that the federal government is
contemplating an enforcement action arising primarily out of a December 1993
multimedia environmental inspection, as well as certain state inspections, of
the Company's Groton, Connecticut facility. The Company is engaged in
discussions with the governmental agencies and does not believe that an
enforcement action, if brought, will have a material adverse effect on the
financial position or the results of operations of the Company.
The Company has been named, together with numerous other manufacturers of
brand name prescription drugs and certain companies that distribute brand name
prescription drugs, in suits in federal and state courts brought by various
groups of retail pharmacy companies. The federal cases consist principally of a
class action by retail pharmacies (including approximately 30 named
plaintiffs)(the Federal Class Action), as well as additional actions by
approximately 3,500 individual retail pharmacies and a group of chain and
supermarket pharmacies (the "individual actions"). These cases,
14
which have been transferred to the United States District Court for the Northern
District of Illinois and coordinated for pretrial purposes, allege that the
defendant drug manufacturers violated the Sherman Act by unlawfully agreeing
with each other (and, as alleged in some cases, with wholesalers) not to extend
to retail pharmacy companies the same discounts allegedly extended to mail order
pharmacies, managed care companies and certain other customers, and by
unlawfully discriminating against retail pharmacy companies by not extending
them such discounts. On November 15, 1994, the federal court certified a class
(the Federal Class Action) consisting of all persons or entities who, since
October 15, 1989, bought brand name prescription drugs from any manufacturer or
wholesaler defendant, but specifically excluding government entities, mail order
pharmacies, HMOs, hospitals, clinics and nursing homes. Fifteen manufacturer
defendants, including the Company, have agreed to settle the Federal Class
Action subject to court approval. The Company's share, pursuant to an Agreement
as of January 31, 1996, is $31.25 million, payable in four annual installments
without interest. The Company continues to believe that there was no conspiracy,
and specifically denies liability in the Settlement Agreement, but has agreed to
settle to avoid the monetary and other costs of litigation. The Settlement was
filed with the Court on February 9, 1996. A hearing was held on February 14, and
the settlement was preliminarily approved and a final fairness hearing was set
for March 27. The Court has tentatively scheduled the Federal Class Action for
trial commencing May 7, 1996. No other action has been scheduled for trial.
In addition, consumer class actions have been filed in state courts,
alleging injury to consumers as well as retail pharmacies from the failure to
give discounts to retail pharmacy companies. Both a consumer class and a
retailer class have been certified in separate California actions. Consumer
class actions filed in Colorado and Washington have been dismissed, and are now
on appeal. The Company was dismissed from a consumer class action in Wisconsin,
but a determination of the finality of that dismissal is pending. Consumer class
actions are also pending in Alabama, Arizona, Maine, Michigan, and New York.
Retailer class actions are also pending in Alabama and Minnesota.
The Company believes that these cases, which generally seek damages and
certain injunctive relief, are without merit.
Schneider (USA) Inc. and Schneider (Europe) AG have been named, together
with Advanced Cardiovascular Systems, Inc., in a federal antitrust action
brought on January 2, 1996, by Boston Scientific Corporation and SciMed Life
Systems, Inc. (a subsidiary of Boston Scientific) in the U.S. District Court,
District of Massachusetts . The suit alleges that the defendants unlawfully
obtained and enforced certain patents covering rapid exchange angioplasty
catheters, and conspired against the plaintiffs by, among other allegations,
their settlement of patent infringement litigation in December of 1991. The suit
seeks unspecified treble damages and injunctive relief. The Company believes
that the case is without merit.
FDA administrative proceedings relating to Plax are pending, principally an
industry-wide call for data on all anti-plaque products by the FDA. The call for
data notice specified that products that have been marketed for a material time
and to a material extent may remain on the market pending FDA review of the
data, provided the manufacturer has a good faith belief that the product is
generally recognized as safe and effective and is not misbranded. The Company
believes that Plax satisfied these requirements and prepared a response to the
FDA's request, which was filed on June 17, 1991. This filing, as well as the
filings of other manufacturers, is still under review and is currently being
considered by an FDA Advisory Committee.
A consolidated class action on behalf of persons who allegedly purchased
Pfizer common stock during the March 24, 1989 through February 26, 1990 period
is pending in the United States District Court for the Southern District of New
York. This lawsuit, which commenced on July 13, 1990, alleges that the Company
and certain officers and former directors and officers violated federal
securities law by failing to disclose potential liability arising out of
personal injury suits involving Shiley heart valves and seeks damages in an
unspecified amount. The defendants in this action believe that the suit is
without merit. A derivative action commenced on April 2, 1990, against certain
directors and officers
15
and former directors and officers alleging breaches of fiduciary duty and other
common law violations in connection with the manufacture and distribution of
Shiley heart valves is pending in the Superior Court, Orange County, California.
The complaint seeks, among other forms of relief, damages in an unspecified
amount. The defendants in the action believe that the suit is without merit.
A purported class action entitled Bradshaw v. Pfizer Inc. and Howmedica Inc.
is pending in the U.S. District Court, Northern District of Ohio. The action
seeks monetary and injunctive relief, including medical monitoring, on behalf of
patients implanted with the Howmedica P.C.A. one-piece acetabular hip component,
which was manufactured by Howmedica from 1983 to 1990. The complaint alleges
that the prostheses were defectively designed and manufactured and posed
undisclosed risks to implantees. The federal magistrate judge has recommended
that the district court deny the plaintiffs' motion to certify the case as a
class action. The Company believes that the suit is without merit.
From 1994 to 1995, seven purported class actions were filed against American
Medical Systems ("AMS") in federal courts in South Carolina, California,
Minnesota (2), Indiana, Ohio and Louisiana. The California, Ohio and Indiana
suits and one Minnesota suit also name Pfizer Inc. as a defendant, based on its
ownership of AMS. The suits seek monetary and injunctive relief on the basis of
allegations that implantable penile prostheses are prone to unreasonably high
rates of mechanical failure and/or various autoimmune diseases as a result of
silicone materials. On September 30, 1994, the federal Judicial Panel on
Multidistrict Litigation denied the various plaintiffs' motions to consolidate
or coordinate the cases for pretrial proceedings. On February 28, 1995, the
Court in the Ohio suit conditionally granted plaintiffs' motion for class
certification; on March 3, 1995, the court in the California suit denied
plaintiffs' motion for class certification; and on October 25, 1995, the court
in the Indiana suit denied plaintiffs' motion for class certification; on
February 15, 1996 the United States Court of Appeals for the Sixth Circuit
reversed the Ohio Court's conditional certification. The Company believes the
suits are without merit.
In June, 1993, the Ministry of Justice of the State of Sao Paulo, Brazil
commenced a civil public action against the Company's Brazilian subsidiary,
Laboratorios Pfizer Ltda. (Pfizer Brazil) asserting that during a period in
1991, Pfizer Brazil withheld sale of the pharmaceutical product Diabinese in
violation of antitrust and consumer protection laws. The action seeks the award
of moral, economic and personal damages to individuals and the payment to a
public reserve fund. On February 8, 1996, the trial court issued a decision
holding Pfizer Brazil liable. The award of damages to individuals and the
payment into the public reserve fund will be determined in a subsequent phase of
the proceedings. The trial court's opinion sets out a formula for calculating
the payment into the public reserve fund which could result in a sum of
approximately $88 million. The total amount of damages payable to eligible
individuals under the decision would depend on the number of persons eventually
making claims. Pfizer Brazil is appealing this decision. The Company believes
that this action is without merit and should not have a material adverse effect
on the financial position or the results of operations of the Company.
Information on income tax adjustments proposed by the U.S. and Belgian tax
authorities is incorporated by reference to the Tax Matters section in Item 1 on
page 7.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
16
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY
AGE AS OF THE
DATE OF THE
COMPANY'S ANNUAL
MEETING APRIL 25, POSITIONS AND OFFICES
NAME 1996 WITH COMPANY PRESENTLY HELD
- -------------------- ----------------- -------------------------------------------------------
Brian W. Barrett.... 56 Vice President; Executive Vice President --
International Pharmaceuticals Group
M. Kenneth Bowler... 53 Vice President -- Federal Government Relations
C. L. Clemente...... 58 Senior Vice President -- Corporate Affairs; Secretary
and Corporate Counsel; Member of the Corporate
Management Committee
Bruce R. Ellig...... 59 Vice President -- Employee Resources
Donald F. Farley.... 53 Vice President; President -- Consumer Health Care Group
George A. Forcier... 57 Vice President -- Quality Control
P. Nigel Gray....... 57 Vice President; President -- Hospital Products Group
Gary N. Jortner..... 51 Vice President; Group Vice President, Disease
Management -- U.S. Pharmaceuticals Group
Karen L. Katen...... 47 Vice President; President -- U.S. Pharmaceuticals Group
Alan G. Levin....... 34 Treasurer
Henry A. 53 Executive Vice President; Member of the Corporate
McKinnell.......... Management Committee
Brower A. Merriam... 61 Vice President; President -- Animal Health Group
Victor P. Micati.... 56 Vice President; Executive Vice President --
International Pharmaceuticals Group
Paul S. Miller...... 57 Senior Vice President; General Counsel; Member of the
Corporate Management Committee
George M. Milne, 52
Jr................. Vice President; President -- Central Research
Robert Neimeth...... 60 Executive Vice President; President -- International
Pharmaceuticals Group; Member of the Corporate
Management Committee
John F. Niblack..... 57 Executive Vice President -- Research and Development;
Member of the Corporate Management Committee
William J. 60
Robison............ Senior Vice President -- Employee Resources
Herbert V. Ryan..... 59 Controller
Craig Saxton........ 53 Vice President; Executive Vice President -- Central
Research
David L. Shedlarz... 48 Vice President -- Finance and Chief Financial Officer
17
AGE AS OF THE
DATE OF THE
COMPANY'S ANNUAL
MEETING APRIL 25, POSITIONS AND OFFICES
NAME 1996 WITH COMPANY PRESENTLY HELD
- -------------------- ----------------- -------------------------------------------------------
William C. Steere, 59 Chairman and Chief Executive Officer; Chair of the
Jr................. Corporate Management Committee
Frederick W. 44 Vice President -- Corporate Strategic Planning and
Telling............ Policy
BUSINESS EXPERIENCE OF NON-DIRECTOR OFFICERS
BRIAN W. BARRETT
Mr. Barrett joined Pfizer Canada in 1966, where he served in various
financial positions, including Chief Financial Officer of the Canadian
subsidiary. In 1971, he was appointed Assistant Controller of Pfizer
International in New York; in 1973, Director of International Planning and in
1976, Director of Planning. In 1980, Mr. Barrett was appointed Vice President --
Corporate Strategic Planning; in 1983, he became Vice President -- Finance for
Pfizer International; and in 1985, President -- Africa/ Middle East and in 1991,
President -- Asia/Canada. In 1992, Mr. Barrett was elected Vice President of the
Company and in 1993 became President, Northern Asia, Australasia and Canada --
International Pharmaceuticals Group. Mr. Barrett has recently been named
Executive Vice President, International Pharmaceuticals Group, effective January
1, 1996.
M. KENNETH BOWLER
Mr. Bowler joined the Company in 1989, and has been Vice President --
Federal Government Relations since 1990. He formerly served as Staff Director
for the House Ways and Means Committee.
C. L. CLEMENTE
Mr. Clemente joined the Company in 1964 and has served in a number of
domestic and international positions, including Vice President; General Counsel
and Secretary, Pfizer International, Inc. and Vice President of Coty, formerly
Pfizer's fragrance and cosmetic division. In 1983, he was named Associate
General Counsel of Pfizer Inc. In 1986, he was elected Vice President; General
Counsel and Secretary of the Company. He became a member of the Corporate
Management Committee of the Company in 1991. In 1992, he was elected Senior Vice
President -- Corporate Affairs; Secretary and Corporate Counsel.
BRUCE R. ELLIG
Mr. Ellig joined the Company in 1960. He progressed through a number of
positions of increasing responsibility in the Corporate Personnel Division
including Vice President -- Compensation and Benefits in 1978 and Vice President
- -- Employee Relations in 1983. In 1985, he was elected Vice President --
Personnel of Pfizer Inc., the title of which recently was changed to Vice
President -- Employee Resources.
DONALD F. FARLEY
Mr. Farley joined the Company in 1965 as Production Engineer for the
Chemical Division. After serving in a number of positions of increasing
responsibility within the Chemical Division, he was named its Vice President,
Operations in 1982. In 1986 he became Senior Vice President of the Division, and
in 1988, Executive Vice President -- Specialty Chemicals. In 1992, Mr. Farley
was named President of the Food Science Group, and in February 1993 was elected
a Vice President of the Company. Mr. Farley was recently named President of the
Company's Consumer Health Care Group, effective January 1, 1996.
18
GEORGE A. FORCIER
Dr. Forcier joined the Company in 1966 as Analytical Research Chemist for
the Company's Medical Research Laboratories. In 1970, he was named Project
Leader, in 1979 Manager, and in 1981, Assistant Director, of the Analytical
Research Department. In 1986 he was named Director of the Analytical Research
and Development Department and in 1991, he became Group Director. In 1994, Dr.
Forcier became Vice President -- Quality Control of the Company.
P. NIGEL GRAY
Mr. Gray joined the Company in 1975 as Export Sales Manager for Howmedica
U.K., Ltd. in England, and progressed through a number of positions of
increasing responsibility before being named Vice President, Marketing for
Howmedica Europe in 1983. In 1987, Mr. Gray became Senior Vice President and
General Manager of Howmedica International in Staines, England, then President
of Howmedica International in 1992. In 1993, he came to New York as Executive
Vice President of the Company's Hospital Products Division and President of the
Medical Devices Division, and in 1994, he was elected a Vice President of the
Company. In July 1995, Mr. Gray assumed his current position as President of the
Company's Hospital Products Group.
GARY N. JORTNER
Mr. Jortner joined the Company in 1973 as a Systems Analyst for Pfizer
Pharmaceuticals. In 1974, he transferred to product management and progressed
through a series of promotions that resulted in his being named Group Product
Manager for Pfizer Labs in 1978. In 1981, he became Vice President of Marketing
for Pfizer Labs. In 1986, he was promoted to Vice President of Operations for
Pfizer Labs. In 1991, he was named Vice President and General Manager, Pfizer
Labs Division. In 1992, Mr. Jortner was elected Vice President of the Company.
In 1994, he was named Vice President; Group Vice President, Disease Management
- -- U.S. Pharmamaceuticals Group.
KAREN L. KATEN
Ms. Katen joined the Company in 1974 as a Marketing Associate for Pfizer
Pharmaceuticals. Beginning in 1975, she progressed through a number of positions
of increasing responsibility in the Roerig product management group which
resulted in her being named Group Product Manager in 1978. In 1980, she
transferred to Pfizer Labs as a Group Product Manager and later became Director,
Product Management. In 1983, she returned to Roerig as Vice President --
Marketing. In 1986, she was named Vice President and General Manager -- Roerig
Division. In 1992, she was elected Vice President of the Company. In 1993, Ms.
Katen became Executive Vice President of the U.S. Pharmaceuticals Group and,
effective August 1, 1995, Ms. Katen assumed her present position as President of
the U.S. Pharmaceuticals Group.
ALAN G. LEVIN
Mr. Levin joined the Company in 1987 as Senior Operations Auditor for the
Controllers Division. In 1988 he joined the Treasurer's Division as Controller
of the Pfizer International Bank in San Juan, Puerto Rico. He returned to New
York in 1991 as Director -- Finance, Asia, and in 1993 was named Senior Director
- -- Finance, Asia. In January 1995, Mr. Levin assumed his present position as
Treasurer of the Company.
HENRY A. MCKINNELL
Dr. McKinnell joined the Company in 1971. In 1977, he became Vice President
- -- Area Manager for Pfizer Asia. In 1979, he became Executive Vice President and
in 1981, President of Pfizer Asia. In 1984, Dr. McKinnell was named Vice
President -- Corporate Strategic Planning, and in 1986, he was elected a Vice
President of the Company. In 1990, Dr. McKinnell became the Company's Chief
19
Financial Officer and was named Vice President -- Finance of the Company. In
1992, he became a member of the Corporate Management Committee of the Company.
In that same year, he became Executive Vice President of the Company, and
President of the Company's Hospital Products Group, in addition to remaining the
Company's Chief Financial Officer. In 1995, Dr. McKinnell's responsibilities
changed, with the Vice Presidents in charge of the U.S. Pharmaceuticals Group,
the Consumer Health Care Group and the Food Science Group reporting to him, as
well as the Vice President -- Finance and Chief Financial Officer, and the Vice
President in charge of Corporate Strategic Planning and Policy.
BROWER A. MERRIAM
Mr. Merriam joined the Company in 1969 as Country Manager for Peru, and in
1971, he was appointed Country Manager for Argentina. In 1973, he was appointed
President of Pfizer Latin America. He was appointed Director of Pfizer
International in 1984, and in 1988 assumed the position of President for Latin
America, Southeast Asia, Indo-Pacific and Canada. In 1990, he was appointed
Executive Vice President of Pfizer International. In 1991, he became Executive
Vice President of the Animal Health Group and in 1992 was appointed its
President. Mr. Merriam was elected a Vice President of the Company in 1992.
VICTOR P. MICATI
Mr. Micati joined the Company in 1965 as a Management Candidate for Pfizer
Labs. Beginning in 1966, he progressed through a number of positions of
increasing responsibility in the Pfizer Labs division, which resulted in his
being named Vice President -- Marketing in 1971. In 1972 he became Vice
President of Pharmaceutical Development for International Pharmaceuticals. In
1980, he was named Executive Vice President of the European Management Center.
Mr. Micati returned to the International Pharmaceutical Division in 1984 as
Senior Vice President, and in 1990 was named President, Europe. In 1992, he was
elected Vice President of the Company. Mr. Micati has recently been named
Executive Vice President, International Pharmaceuticals Group, effective January
1, 1996.
PAUL S. MILLER
Mr. Miller joined the Company in 1971 and was appointed an Assistant
Secretary and Assistant General Counsel in 1975. In 1983, he was named Associate
General Counsel. In 1986, he became Secretary of the Corporate Management
Committee, and in that same year he was elected Vice President; General Counsel
of the Company. He became a member of the Corporate Management Committee of the
Company in 1991. In 1992, Mr. Miller was elected Senior Vice President; General
Counsel of the Company.
GEORGE M. MILNE, JR.
Dr. Milne joined the Company in 1970 as a Research Scientist. In 1973, he
was named Senior Research Scientist and progressed through a number of positions
of increasing responsibility which resulted in his being named Vice President,
Research and Development Operations in 1985. In 1988, Dr. Milne became Senior
Vice President, Research and Development, and in 1993, he was elected Vice
President of the Company and President, Central Research.
ROBERT NEIMETH
Mr. Neimeth joined the Company in 1962 as a management trainee, subsequently
serving as Country Manager, Nigeria, as Vice President, Pharmaceutical
Development in Asia, and then as President of Pfizer Asia from 1972 to 1977. He
then served as Vice President and Director of Operations for Pfizer Labs in the
U.S. In 1980 he became President Pfizer Europe and, in 1983,
20
Mr. Neimeth became Vice President of the Company. In 1984, he was also elected
Executive Vice President of Pfizer International Subsidiaries and assumed
supervision of the pharmaceutical business in Africa and the Middle East, in
addition to his responsibilities in Europe. In 1990, he was named President,
Pfizer International Subsidiaries. In 1991, he became Chairman, President and
Chief Executive Officer of Pfizer International. He also became a member of the
Corporate Management Committee of the Company in 1991. In 1992, he was elected
Executive Vice President of the Company, and President, International
Pharmaceuticals Group. In this capacity, Mr. Neimeth supervises the Company's
International Pharmaceutical and worldwide Animal Health operations and,
beginning in 1995, the Hospital Products Group as well.
JOHN F. NIBLACK
Dr. Niblack joined the Company in 1967 and held various management positions
in new drug discovery operations before being appointed in 1984 as Vice
President, Medicinal Products Research and in 1986 as Executive Vice President,
Central Research. In 1990, Dr. Niblack was named President -- Central Research
and elected a Vice President of the Company. In 1993, Dr. Niblack was elected
Executive Vice President -- Research and Development, and became a member of the
Corporate Management Committee of the Company.
WILLIAM J. ROBISON
Mr. Robison joined the Company in 1961 as a Sales Representative for Pfizer
Labs. After serving in a number of positions of increasing responsibility in the
Labs division, he was appointed Vice President of Sales in 1980, and Senior Vice
President Pfizer Labs in 1986. In 1990 he was appointed Vice President and
General Manager of Pratt Pharmaceuticals, and in 1992 was named President of the
Consumer Health Care Group, and was elected Vice President of the Company. Mr.
Robison was recently elected Senior Vice President -- Employee Resources,
effective January 1, 1996.
HERBERT V. RYAN
Mr. Ryan joined Pfizer in 1962 as Supervisor, Capital Assets. In 1964 he was
named Supervisor, Corporate Ledger, and in 1966 became Director, Corporate
Accounting. In 1981 he was appointed Assistant Controller, Corporate Accounting.
In 1993, Mr. Ryan was elected Controller.
CRAIG SAXTON
Dr. Saxton joined the Company in 1976 as Clinical Projects Director for the
Central Research Division of Pfizer Limited in Sandwich, England. In 1981, he
was named Senior Associate Medical Director for the International Division of
Pfizer Inc., and in 1982 became the Division's Vice President, Medical Director.
Dr. Saxton became Senior Vice President, Clinical Research and Development for
the Central Research Division in 1988. In 1993, he was named Executive Vice
President -- Central Research and was elected a Vice President of the Company.
DAVID L. SHEDLARZ
Mr. Shedlarz joined the Company in 1976 as Senior Financial Analyst for the
Pharmaceuticals Division. After serving in a number of positions of increasing
responsibility, he was named Production Controller in 1979 and Assistant Group
Controller in 1981. In 1984, he became Group Controller and in 1989 was named
Vice President of Finance for the Pharmaceuticals Group. In 1992, Mr. Shedlarz
was elected Vice President -- Finance of the Company. In August 1995, Mr.
Shedlarz became Chief Financial Officer of the Company.
21
FREDERICK W. TELLING
Dr. Telling joined the Company in 1977 as Associate Personnel Manager for
the Pharmaceuticals Division, and progressed through a number of positions of
increasing responsibility before being named Director of Planning for the
Pharmaceuticals Division in 1981. In 1987, he was named the Vice President of
Planning and Policy, and in 1994, Senior Vice President of Planning and Policy
for USPG. In 1994, Dr. Telling was elected Vice President, Corporate Strategic
Planning and Policy.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The principal market for the Company's Common Stock is the New York Stock
Exchange. It is also listed on the London, Paris, Brussels, and Swiss Stock
Exchanges. The Company's Common Stock is also traded on various United States
regional stock exchanges. Additional information required by this item is
incorporated by reference to the "Quarterly Consolidated Statement of Income
(Unaudited)" found on page 59 of the Annual Report to Shareholders for the
fiscal year ended December 31, 1995.
ITEM 6. SELECTED FINANCIAL DATA
Financial information for the five most recent fiscal years, as required by
this item, is incorporated by reference to the "Financial Summary" on pages 60
and 61 of the Annual Report to Shareholders for the fiscal year ended December
31, 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information required by this item is incorporated by reference to the
"Financial Review" on pages 30 through 37 of the Annual Report to Shareholders
for the fiscal year ended December 31, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is incorporated by reference to the
"Independent Auditors' Report" found on page 39 and to consolidated financial
statements and supplementary data found on pages 40 through 59 of the Annual
Report to Shareholders for the fiscal year ended December 31, 1995.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with regard to the Directors of the Company, including those of
the Executive Officers who are Directors, is incorporated by reference to pages
2 through 7 of the Company's Proxy Statement dated March 19, 1996.
The Board of Directors elects officers at its first meeting after each
annual meeting of shareholders. The Board may also elect officers from time to
time throughout the year. Elected officers of the Company hold office until
their successors are chosen or until their earlier death, resignation or
removal. Information with regard to the Executive Officers of the Company is
incorporated by reference to pages 17 through 22 of this Form 10-K under the
heading "Executive Officers of the Company."
22
ITEM 11. EXECUTIVE COMPENSATION
Information with regard to executive compensation is incorporated by
reference to pages 8 through 20 of the Company's Proxy Statement dated March 19,
1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with regard to security ownership of certain beneficial owners
and management is incorporated by reference to pages 2 through 7 of the
Company's Proxy Statement dated March 19, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with regard to certain relationships and related transactions is
incorporated by reference to page 21 of the Company's Proxy Statement dated
March 19, 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following documents are filed as a part of this report.
(a)(1) Financial Statements
The following consolidated financial statements, related notes and
independent auditors' report, included on pages 39 through 59 of the Annual
Report to Shareholders for the year ended December 31, 1995 have previously been
incorporated by reference in Item 8 of Part II of this report:
PAGE IN THE
ANNUAL REPORT TO
SHAREHOLDERS
-----------------
Independent Auditors' Report...................................... 39
Segment Information............................................... 40
Geographic Data................................................... 41
Consolidated Statement of Income.................................. 42
Consolidated Statement of Shareholders' Equity.................... 43
Consolidated Balance Sheet........................................ 44
Consolidated Statement of Cash Flows.............................. 45
Notes to Consolidated Financial Statements........................ 46-58
Quarterly Consolidated Statement of Income........................ 59
(a)(2) Financial Statement Schedule
PAGE
-----
Schedule II -- Valuation and Qualifying Accounts........................... 27
Schedules not listed above have been omitted for the reason that they are
not applicable or not required or the information is given elsewhere in the
financial statements. The financial statements of unconsolidated subsidiaries
are omitted on the basis that these subsidiaries, considered in the aggregate,
would not constitute a significant subsidiary.
(a)(3) Exhibits
3(i) -- Restated Certificate of Incorporation of the Company, as of
April 1991 (incorporated by reference to Exhibit 4(a) of Form
S-8, Registration No. 33-44053), as corrected by the
Certificate of Correction of the Restated Certificate of
Incorporation of the Company (incorporated by reference to
Exhibit 3(i) of the Company's Form 10-K for the fiscal year
ended December 31, 1994).
3(ii) -- By-laws of the Company, as amended June 23, 1994
(incorporated by reference to Exhibit 3(ii) of the Company's
Form 8-K Current Report dated June 23, 1994).
23
10(i) -- Executive Compensation Plans and Arrangements:
-- 10.1 -- Form of Severance Agreement for Certain Executive
Officers of the Company (incorporated by reference to Exhibit
10(a)(1) of the Company's Form 10-K for the fiscal year ended
December 31, 1994).
-- 10.2 -- Pfizer Inc. Performance-Contingent Share Award
Program (incorporated by reference to Exhibit 4 of Form S-8,
Registration No. 33-56977).
(ii) -- Stock and Asset Purchase Agreement:
-- 10.3 -- The Stock and Asset Purchase Agreement, dated as of
November 23, 1994 between the Company and SmithKline Beecham
plc is incorporated by reference to the Company's Form 8-K
dated January 19, 1995.
11 -- Computation of Earnings Per Common Share and Fully Diluted
Earnings Per Common Share.
12 -- Computation of Ratio of Earnings to Fixed Charges.
13(a) -- Portions of the Annual Report of the Company for the fiscal
year ended December 31, 1995 which are expressly incorporated
by reference herein.
13(b) -- Copy of the Annual Report of the Pfizer Savings and
Investment Plan on Form 11-K for the fiscal year ended
December 31, 1995.
13(c) -- Copy of the Annual Report of the Pfizer Savings and
Investment Plan for Employees Resident in Puerto Rico on Form
11-K for the fiscal year ended December 31, 1995.
21 -- Subsidiaries of the Registrant.
23 -- Report and consent of KPMG Peat Marwick LLP, independent
certified public accountants.
27 -- Financial Data Schedule
99 -- Cautionary Statements Regarding "Safe Harbor" Provisions of
the Private Securities Litigation Reform Act of 1995.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated November 29, 1995.
Exhibits to the Form 10-K are available upon request at a charge of ten
cents per page. Requests should be directed to C. L. Clemente, Secretary, Pfizer
Inc., 235 East 42nd Street, New York, N.Y. 10017.
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Pfizer Inc.
(Registrant)
By /s/ C.L. Clemente
-----------------------------------
C.L. Clemente
(Secretary)
Dated: March 28, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
SIGNATURES TITLE DATE
- -------------------------------- ------------------------------------------ --------------
/s/ WILLIAM C. STEERE, JR.
- -------------------------------- Chairman of the Board, Director (Principal March 28, 1996
(William C. Steere, Jr.) Executive Officer)
/s/ DAVID L. SHEDLARZ Vice President -- Finance and Chief
- -------------------------------- Financial Officer (Principal Financial March 28, 1996
(David L. Shedlarz) Officer)
/s/ HERBERT V. RYAN
- -------------------------------- Controller (Principal Accounting Officer) March 28, 1996
(Herbert V. Ryan)
- -------------------------------- Director March , 1996
(M. Anthony Burns)
/s/ GRACE J. FIPPINGER
- -------------------------------- Director March 28, 1996
(Grace J. Fippinger)
/s/ GEORGE B. HARVEY
- -------------------------------- Director March 28, 1996
(George B. Harvey)
/s/ CONSTANCE J. HORNER
- -------------------------------- Director March 28, 1996
(Constance J. Horner)
25
SIGNATURES TITLE DATE
- -------------------------------- ------------------------------------------ --------------
/s/ STANLEY O. IKENBERRY
- -------------------------------- Director March 28, 1996
(Stanley O. Ikenberry)
/s/ THOMAS G. LABRECQUE
- -------------------------------- Director March 28, 1996
(Thomas G. Labrecque)
/s/ JAMES T. LYNN
- -------------------------------- Director March 28, 1996
(James T. Lynn)
- -------------------------------- Director March , 1996
(Paul A. Marks)
/s/ EDMUND T. PRATT, JR.
- -------------------------------- Director March 28, 1996
(Edmund T. Pratt, Jr.)
- -------------------------------- Director March , 1996
(Franklin D. Raines)
/s/ FELIX G. ROHATYN
- -------------------------------- Director March 28, 1996
(Felix G. Rohatyn)
/s/ JEAN-PAUL VALLES
- -------------------------------- Director March 28, 1996
(Jean-Paul Valles)
26
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Additions Balance
BALANCE AT ------------------------- at
BEGINNING CHARGED TO CHARGED TO End
OF COSTS AND OTHER of
DESCRIPTION PERIOD EXPENSES ACCOUNTS(a) Deductions(b) Period
- --------------------------------------------- ----------- ----------- ----------- ----------- -----
(millions of dollars)
Year ended December 31, 1995
Valuation and qualifying accounts deducted
from assets to which they apply:
Allowance for doubtful accounts........ $44.1 $23.9 $ 0.3 $ 7.3(c) $61.0
----- ----- --- --- -----
----- ----- --- --- -----
Allowance for credit losses............ $20.5 $ 3.0 $-- $-- $23.5
----- ----- --- --- -----
----- ----- --- --- -----
Year ended December 31, 1994
Valuation and qualifying accounts deducted
from assets to which they apply:
Allowance for doubtful accounts........ $40.6 $11.5 $-- $ 8.0 $44.1
----- ----- --- --- -----
----- ----- --- --- -----
Allowance for credit losses............ $13.5 $ 7.0 $-- $-- $20.5
----- ----- --- --- -----
----- ----- --- --- -----
Year ended December 31, 1993
Valuation and qualifying accounts deducted
from assets to which they apply:
Allowance for doubtful accounts........ $36.2 $12.1 $ 0.4 $ 8.1 $40.6
----- ----- --- --- -----
----- ----- --- --- -----
Allowance for credit losses............ $14.5 $-- $-- $ 1.0 $13.5
----- ----- --- --- -----
----- ----- --- --- -----
- ------------------------
(a) Recoveries of accounts previously written off.
(b) Primarily consists of uncollectible accounts charged against the allowance
accounts. Deductions also include the impact of translation of foreign
currencies.
(c) Amount includes approximately $2.2 million of allowances related to the food
science business that were classified as net assets held for sale as of
December 31, 1995.
27
The following trademarks, found in this report, are among those used by
Pfizer Inc.
CARDURA (DOXAZOSIN MESYLATE)
DIFLUCAN (FLUCONAZOLE)
ENABLE (TENIDAP)
ENABLEX (TENIDAP)
E5 (ANTI-ENDOTOXIN ANTIBODY)
GLUCOTROL XL (GLIPIZIDE GITS)
NORVASC (AMLODIPINE BESYLATE)
PROCARDIA XL (NIFEDIPINE GITS)
REACTINE (CETIRIZINE HCL)
UNASYN (SULBACTAM/AMPICILLIN)
ZITHROMAX (AZITHROMYCIN)
ZOLOFT (SERTRALINE)
ZYRTEC (CETIRIZINE HCL)
ADVOCIN (DANOFLOXACIN)
AVIAX (SEMDURAMICIN)
BANMINTH (PYRANTEL TARTRATE)
BOVISHIELD
COXISTAC (SALINOMYCIN)
DECTOMAX (DORAMECTIN)
LEUKOCELL
MECADOX (CARBADOX)
NEMEX (PYRANTEL PAMOATE)
RESPISURE
STAFAC (VIRGINIAMYCIN)
TERRAMYCIN (OXYTETRACYCLINE)
TERRAMYCIN LA-200 (OXYTETRACYCLINE)
TM/LA (OXYTETRACYCLINE)
PARATECT (MORANTEL TARTRATE)
POSISTAC (SALINOMYCIN)
VALBAZEN (ALBENDAZOLE)
VANGUARD
BAIN DE SOLEIL
BARBASOL
BARBASOL PURE SILK
BEN-GAY
DAILY CARE FROM DESITIN
DESITIN
DIFLUCAN ONE
GYNECURE
JUSCOAT
MIGRALEVE
PLAX
RID
TCP
TROSYD AF
UNISOM
UNISOM SLEEPGELS
VANART
VISINE