INVEST - Pfizer to Repatriate US$24B of Offshore Capital

The Repatriation of Offshore Capital Continues

In her FiercePharma article earlier today Carly Helfand suggested that '

Pfizer’s finally getting what it always wanted in U.S. tax reform.' According to Carly, analysts are watching to see what Pfizer plans to do next. 

In the fourth-quarter conference call, Pfizer CEO, Ian Read, suggested the company will repatriate US$24B but downplayed the possibility of a big M&A deal with the money Pfizer intends to bring home. 

“We had the capacity before tax reform to do M&A,” Read said, adding “in fact, we attempted to do two large ones that were thwarted by government interventions.”

Pfizer said it will invest about US$5B in capital projects in the US, contribute US$500M to its American pension plan, spend US$100M in bonuses for non-executive employees and contribute US$200M to the Pfizer Foundation. The Pfizer 4th Quarter report and earnings forecast was released earlier today. 

Pfizer, CFO Frank D’Amelio, said the repatriation will involve a US$15B tax payment to the US Treasury over the next 8 years and noted the effective tax rate on adjusted income will be about 17 percent next year, down from 20 percent this year.

Pfizer says the capital allocation decisions of 2017 enhanced shareholder value. In addition to investing in the business, they returned $12.7 billion directly to shareholders through a combination of dividends and share repurchases.  Pfizer anticipates share repurchases totaling $5.0 billion in 2018 that will be partially  offset due to dilution related to share-based employee compensation programs.

Pfizer reported ten approvals from the FDA, which is significantly more than the company has achieved in any year of the past decade. Read concluded the conference by saying:

“I believe our current management and business structure, the tireless dedication of our colleagues and the strong culture we have nurtured, position Pfizer especially well for continued success."

A number of analyst seemed to feel that capital would flow to the economy through shareholders rather than through direct acquisitions. Even so, these funds may contribute to new investment within the innovation framework of the digital economy.

INVEST - Repatriation of Offshore Capital Begins

Citigroup Says There is a Whopping $2.5 trillion of Capital Stashed Internationally by US Companies.

Apple's announcement on Wednesday shows the move to repatriate capital has begun. Apple will pay US$38B in US taxes on the cash it brings back to the US and claims it will add $US350B to the US economy over the next five years, create 20,000 new jobs and open a new Apple Campus.

On making the announcement, Tim Cook, Apple's CEO remarked:

"Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy. We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible."

Apple identified several investment priorities:

• Growing Apple's US Operations and Direct Employment Over $10 billion of Apple's expanded capital expenditures will be investments in data centers across the US.
• Investing in Apple's Domestic Suppliers and Manufacturing Partners Apple works with over 9,000 American suppliers in 50 states and each of Apple's core products relies on parts or materials provided by US-based suppliers.
• Preparing Students for the App Economy Apple has a 40-year history in education and plans to accelerate its efforts across the US in support of coding education. Apple says there are more than 500,000 unfilled programming-related positions across the country and noted a US Bureau of Labor Statistic that predicts by 2020 there will be 1.4 million more software development jobs than applicants qualified to fill them.

Apple is just the first company to announce. In a late December article, Business Insider identified 14 companies that would benefit from President Donald Trump's new tax plan and included a slide analyzing each of the 14 companies.

The new Tax Policy provides two options for capital repatriated under this program:

• Reinvestment into core businesses which is expected to have a direct bearing on economic expansion; or,
• Repurchasing company shares which would be beneficial to the market since it signals that a stock is undervalued.

To give the repatriation discussion and numbers some context, InfoStream captured the market capitalization of the largest companies at the end of trading yesterday (18 January 2018).

• US$920.38B World's largest Technology Company Apple
• US$526.13B Largest US Conglomerate Berkshire Hathaway 
• US$228.06B World's largest Telecom Company AT&T
• US$220.49B World's largest Pharma Company Pfizer
• US$145.43B World's largest Industrial Company GE

According to 24/7 Wall Street, the largest 5 US companies by market capitalization at October, 2017 were Apple, Alphabet/Google, Microsoft, Facebook and Amazon.

Two questions come to mind:

1. Will there be an impact from taking this money out of foreign financial institutions and markets?
2. Where can this capital be re-deployed in a market that is already awash with under employed capital?

One wonders if capital will be deployed to support innovation and earlier stage plays.

PFIZER AND ALLERGAN TO MERGE

Pfizer and Allergan have agreed to combine forces. This 160 Billion USD merger is expected to generate the following results:

• Creates a new global biopharmaceutical leader with best-in-class innovative and established businesses
• Enhances revenue and earnings growth profile of innovative and established businesses
• Broadens innovative pipeline with more than 100 combined mid-to-late stage programs in development
• Transaction expected to close in the second half of 2016
• Expect combined Operating Cash Flow in excess of $25 Billion beginning in 2018
• Increased financial flexibility facilitates continued investment in the United States
• Preserves opportunity for a potential future separation of innovative and established businesses 

Pfizer Inc. (NYSE: PFE) and Allergan plc (NYSE: AGN) today announced that their boards of directors have unanimously approved, and the companies have entered into, a definitive merger agreement under which Pfizer, a global innovative biopharmaceutical company, will combine with Allergan, a global pharmaceutical company and a leader in a new industry model – Growth Pharma. The stock transaction is valued at $363.63 per Allergan share, for a total enterprise value of approximately $160 billion, based on the closing price of Pfizer common stock of $32.18 on November 20, 2015. The transaction represents more than a 30 percent premium based on Pfizer’s and Allergan’s unaffected share prices as of October 28, 2015. Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares. 

“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world,” stated Ian Read, Chairman and Chief Executive Officer, Pfizer. “Allergan’s businesses align with and enhance Pfizer’s businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth. Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry.” 

“The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better,” said Brent Saunders, Chief Executive Officer, Allergan. “This bold action is the next chapter in the successful transformation of Allergan allowing us to operate with greater resources at a much bigger scale.  Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer’s leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader.” 

Under the terms of the proposed transaction, the businesses of Pfizer and Allergan will be combined under Allergan plc, and be renamed as “Pfizer plc.” The companies expect that shares of the combined company will be listed on the New York Stock Exchange and trade under the “PFE” ticker.  Upon the closing of the transaction, the combined company is expected to maintain Allergan’s Irish legal domicile.  Pfizer plc will have its global operational headquarters in New York and its principal executive offices in Ireland.

View presentation and listen to the webcast

About Pfizer

About Allergan

Pfizer Agrees to Acquire Nimenrix and Mencevax from GlaxoSmithKline

On June 22, 2015, Pfizer Inc. announced that it entered an agreement with GlaxoSmithKline to acquire the meningitis vaccines Nimenrix and Mencevax. The acquisition will cost approximately $130 million USD and is expected to occur in the second half of 2015. The vaccine acquisition will allow Pfizer to service a broader population. This acquisition is not expected to have a significant financial impact on Pfizer’s 2015 financial performance and is subject to customary closing conditions and regulatory approvals.

Nimenrix (meningococcal serogroups A, C, W-135 and Y conjugate vaccine) is a meningococcal ACWY-TT conjugated vaccine that protects against Neisseria meningitidis. Nimenrix became available three years ago and is approved for sale in 61 countries and it’s registration is under review in 18 countries.

Mencevax (meningococcal polysaccharide serogroups A, C, Y and W-135 vaccine) is a meningococcal ACWY unconjugated polysaccharide vaccine used against meningococcal outbreaks and for travelers. Mencevax is available in 79 countries.

President of Pfizer Vaccines, Susan Silbermann said, “The addition of Nimenrix and Mencevax is an important milestone for Pfizer Vaccines. Adding these two innovative and complementary vaccines to our current portfolio will allow us to more completely respond to meningococcal disease outbreaks as well as proactively address a critical public health need – the prevention of meningococcal disease across all ages. Acquiring these quadrivalent vaccines will broaden our ability to address the burden of meningococcal meningitis – an uncommon but serious and sometimes fatal disease. This helps us to further fulfill our vision to protect lives with innovative vaccines to fight serious diseases worldwide and gives us even greater capability to meet the needs of the global community we serve.”

Pfizer’s goal for several years has been to bring new therapies to patients that significantly improve their lives. Pfizer Vaccines has the goal to increase business and enhance their portfolio through targeted external opportunities.      

  

About Nimenrix and Mencevax

Nimenrix is indicated for active immunization of individuals from the age of 12 months and above against invasive meningococcal diseases caused by Neisseria meningitidis group A, C, W-135 and Y.

Mencevax is indicated for active immunization of children older than two years, adolescents and adults against invasive meningococcal disease caused by meningococci of groups A, C, W135 and Y.

About Pfizer Inc.

At Pfizer, we apply science and our global resources to bring therapies to people that extend and significantly improve their lives.  We strive to set the standard for quality, safety and value in the discovery, development and manufacture of health care products. Our global portfolio includes medicines and vaccines as well as many of the world's best-known consumer health care products.  Every day, Pfizer colleagues work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time.  Consistent with our responsibility as one of the world's premier innovative biopharmaceutical companies, we collaborate with health care providers, governments and local communities to support and expand access to reliable, affordable health care around the world.  For more than 150 years, Pfizer has worked to make a difference for all who rely on us.  

READ THE PRESS RELEASE

Pfizer India sells Animal Health Division

Dow Jones reports that Pfizer India has sold the Animal Health Division in keeping with the parent company's strategy of exiting animal health, nutrition businesses.

The move is part of the U.S. parent's aim of reorganizing its operations in a manner that will give it the most flexibility to focus on its core pharmaceuticals business. About 80% of Pfizer Ltd.'s sales come from the pharmaceuticals division.  "The decision to get out of the animal health business is positive for Pfizer as the division's margins were below those of its main pharmaceuticals business," said an analyst at a local brokerage.

Pfizer Chief Executive Ian Read said last week that the company remains on track with its timeline of finalizing strategic decisions for the animal health and nutrition businesses this year.  He added that the company continues to expect that any separation of these businesses from Pfizer will occur between July 2012 and July 2013. 

Pfizer, Pharmacies Warn of Counterfeit Drug Risks

Pfizer (PFE: 17.68, -0.30, -1.67%) has launched a new effort in connection with various pharmacies to draw attention to the risks associated with counterfeit prescription drugs.

The campaign comes amid growing concerns over illegitimate drugs and a recent spike in online purchases of them. Worldwide sales of counterfeit medicines were estimated to exceed $75 billion last year, an increase of 90% since 2005.

The announcement also comes on the same day a Boeing (BA: 60.51, -1.86, -2.98%) plant was raided by the FBI and DEA, leading to the arrest of 23 individuals and chargers against another 14 for illegally distributing or possessing prescription drugs.

The New York-based pharmaceutical giant warned that counterfeit medicines could cause serious health consequences, either because they include dangerous substances such as rat poison or lead paint, or because they do not include the appropriate amount of ingredients as approved by the FDA.

Read the full article by Jennifer Booton at foxbusiness.com

Pfizer starts animal health joint venture in China

Drugmaker Pfizer Inc. is aiming to boost sales of veterinary medicines in China — and its global dominance in the animal health business — via a joint venture with a Chinese startup company.

Pfizer said Thursday that it has reached a deal to jointly develop, manufacture and sell vaccines for animals with Jilin Guoyan Animal Health Company Ltd.

The joint venture, called Jilin Pfizer Guoyuan Animal Health Co., plans to start marketing its first product — a vaccine against a reproductive and respiratory condition pigs get — next year.

Executives from Pfizer and the Chinese company are reviewing options and planning future strategy. That could include developing additional vaccines for pigs, poultry, cattle and perhaps pets, as well as new animal medicines. All will target diseases common in China.

Read the full article by LINDA A. JOHNSON, AP Business Writer

Pfizer Explores Alternatives For Its Animal Health Business

Recently Pfizer Inc. (NYSE: PFE) announced that it is exploring strategic alternatives for its Animal Health and Nutrition businesses based on its recent business portfolio review to determine the optimal mix of businesses for maximizing shareholder value.

The company is considering options that may include, among others, a full or partial separation of each of these businesses from Pfizer through a spin-off, sale or other transaction. Given the separate and distinct nature of Animal Health and Nutrition, the company may pursue a different strategic alternative for each business.

“Both Animal Health and Nutrition are strong businesses with attractive customer bases and solid fundamentals, but distinct enough from our core businesses that their value may be best maximized outside the company,” said Ian Read, president and chief executive officer, Pfizer. “In exploring these alternatives, we can determine what options will best drive their future growth opportunities and expansion, and enable shareholders to potentially realize higher value for these businesses.”

Pfizer Animal Health is a world leader in the discovery, development, manufacture and commercialization of products, including vaccines, medicines, diagnostics and genetic tests, to prevent and treat disease in livestock and companion animals. This business has operations in more than 60 countries, an extensive research and development network with major research centers on four continents and strong market positions across several geographic regions, including the United States, Europe, Africa and Middle East, Canada and Latin America, and Asia-Pacific. In 2010, Animal Health achieved revenues of approximately $3.6 billion.

Pfizer Nutrition is a leader in infant and pediatric nutrition, providing quality formulas and nutritional products for infants and children up to seven years old. This business has operations on six continents, products available in more than 60 countries, and a focused presence in key markets throughout Asia, the Middle East, Europe and Latin America, with China, Philippines, United Kingdom, Mexico and Australia being among its top markets. Nutrition generated revenues of approximately $1.9 billion in 2010.

Pfizer will continue to enhance the value of its Established Products business within the company. The pharmaceutical industry’s fastest-growing markets are in the emerging markets, and within the emerging markets, the fastest-growing segment is off-patent medicines and their generic equivalents. Given these dynamics and the company’s footprint and asset base, the company believes that the Established Products business is well positioned to capture the opportunities being created by the demographics and rising economic power within these markets. Also based on this portfolio review, the company believes that it can continue to enhance the value of its Consumer Healthcare business within Pfizer. Consumer Healthcare has a strong connection to the company’s core biopharmaceutical businesses, including the potential opportunity to extend the value of certain Pfizer legacy biopharmaceutical products, and strong connections with emerging markets and pharmacy customers worldwide.

“The actions we’re announcing today are driven by the potential to create value for shareholders and enable Pfizer to become a more focused organization, better positioned for future success,” said Mr. Read. “Ultimately, our decisions will continue to support our long-term strategy to allocate our resources, investments and people to the areas that best serve our patients and customers, and generate the best value for our shareholders.”

The company will continue to assess its businesses and assets as part of its regular, ongoing portfolio review process and also continue to consider business development activities for its businesses.

Pfizer has engaged J.P. Morgan in connection with the evaluation of strategic alternatives for its Animal Health business and Morgan Stanley and Centerview Partners’ advisory business in connection with the evaluation of strategic alternatives for its Nutrition business. Although the timeline for each evaluation may differ, Pfizer expects to complete any transactions that may result from these evaluations in 12 to up to 24 months, and does not anticipate making any further announcements regarding strategic alternatives for Animal Health and Nutrition until sometime in 2012.

Pfizer Inc.: Working Together for a Healthier World™
At Pfizer, we apply science and our global resources to improve health and well-being at every stage of life. We strive to set the standard for quality, safety and value in the discovery, development and manufacturing of medicines for people and animals. Our diversified global health care portfolio includes human and animal biologic and small molecule medicines and vaccines, as well as nutritional products and many of the world’s best-known consumer products. Every day, Pfizer colleagues work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time.

Consistent with our responsibility as the world’s leading biopharmaceutical company, we also collaborate with health care providers, governments and local communities to support and expand access to reliable, affordable health care around the world. For more than 150 years, Pfizer has worked to make a difference for all who rely on us.

Pfizer to Fund Research on the Power of Pets for Pediatric Cancer Patients

Pfizer Animal Health And American Humane Association Partner To Conduct Research On The Power Of The Human-Animal Bond In Pediatric Cancer Patients


Pfizer Animal Health and American Humane Association today announced a
partnership to conduct a study on the impact of animal-assisted therapy on pediatric oncology patients, as well as on their parents, caregivers, siblings, and other close family members.  The partnership - which includes a $282,000 grant from Pfizer and the Pfizer Foundation - exemplifies the strategic goal of both organizations to better quantify in clinical terms what many in health care already realize