Pfizer 2011 Annual Review | Pfizer: the world's largest research-based pharmaceutical company

We are pleased with the results we have seen with tofacitinib in the Phase III rheumatoid arthritis (RA) program, which demonstrated efficacy in an extensive clinical program involving more than 5,000 RA patients. The FDA and the European Medicines Agency accepted for review our new drug applications for adult patients with moderately to severely active RA, and we have submitted that indication for review in Japan as well.

We expect that in five years many of our late-stage clinical trial starts will reflect a precision medicine R&D approach."

In 2011, we launched Xalkori (crizotinib), a treatment for a certain type of lung cancer marked by a specific gene mutation, in the U.S. It is a breakthrough in lung cancer treatment and is the first new drug approved by the FDA for lung cancer in six years. Xalkori represents our first entry into precision medicine—an R&D approach that defines the molecular and biologic predictors of efficacy and then groups patients based on the unique molecular or genetic characteristics of their disease. With this approach, medicines can be developed for better-defined populations of patients, often with superior efficacy when compared to medicines that are developed through non-precision approaches. We expect that in five years many of our late-stage clinical trial starts will reflect a precision medicine R&D approach.

Early in 2012, we received FDA approval for Inlyta for patients with previously treated advanced renal cell carcinoma. With the approval of Inlyta and with other medicines such as Sutent and Xalkori as well as the work under way in finding new treatments in hematology and lung cancer, we are building a leading oncology business.

Behind these therapies, there is a next wave of new molecules in development aimed at significant unmet medical needs, including Alzheimer's disease, Crohn's disease, a range of cancers, severe pain, and cardiovascular and metabolic diseases. We are also investing in several promising vaccine candidates aimed at preventing life-threatening infectious diseases, such as meningitis.

I am encouraged by the depth and breadth of our current pipeline and believe it positions us well for the future.

Making the Right Capital Allocation Decisions

In 2011, we reduced our operating expenses and took several steps to allocate capital in ways that resulted in greater shareholder value. In fact, we returned more than $15 billion in capital to shareholders through dividend payments of over $6 billion and stock repurchases of approximately $9 billion.

During 2011, we also embarked upon a rigorous process to look at the long-term value-creation potential of all of our businesses. After completing this process, we determined that our Animal Health and Nutrition businesses are distinct enough from our core businesses that their value may not be fully realized within Pfizer and, therefore, may best be optimized outside. For this reason, we decided to explore strategic alternatives, including a full or partial separation of each of these businesses from Pfizer through a spin-off, sale or other transaction. We have been making good progress and remain on track to announce our strategic decision for each business in 2012, with any separations occurring between July 2012 and July 2013.

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