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

To Our Stakeholders:

Last year I said we would create value in the short and long term by improving the performance of our innovative core, making the right capital allocation decisions, earning respect from society, and continuing to promote an ownership culture of confidence and trust.

Ian C. Read Chairman and CEO

Our goal with this annual review is to highlight the actions we are taking and the progress we are making through our four imperatives—to invest in the right areas for growth that take advantage of our core capabilities; to manage how we are allocating our capital; to earn respect from society; and to build an ownership culture that makes the most effective use of our global talent.

Our 2011 Performance—Hitting All Targets

Our financial performance in 2011 was strong. We met or exceeded every component of our full-year financial guidance, despite the headwinds from a challenging global business environment and the reality of absorbing about $5 billion in revenue declines due to changes in the patent status of some products, most notably Lipitor in the U.S. We also made substantial progress in our nonfinancial performance indicators, including access to medicines, environmental stewardship and other measures of our social responsibility. Complete information on our 2011 performance can be found here.

Building Value Through Our Four Imperatives

Our current and future success is rooted in the progress we make in executing against our imperatives. Here is a brief summary of our progress in 2011.

Improving the Performance of Our Innovative Core

In 2011, we recast our approach to science and innovation. We reduced our adjusted R&D1 spending by nearly $1 billion compared with 2010 and embarked on a series of actions designed to increase our probability of success and help us deliver more differentiated products in areas of high unmet medical need and on a smaller and more flexible cost base.

These actions included narrowing our therapeutic areas of focus, improving our ability to identify failures earlier in the research cycle, advancing the most promising compounds in our pipeline, and investing in our R&D network and the capabilities needed to drive sustainable biomedical innovation.

Throughout 2011, we saw a steady cadence of late-stage pipeline progress, including positive clinical data presentations, regulatory submissions, regulatory approvals and new product launches. We also saw the emergence of a promising mix of early- to mid-stage compounds.

We have five assets that we believe are positioned to be near- and mid-term drivers for our business units—Prevnar 13/Prevenar 13 Adult, Eliquis, tofacitinib, Xalkori and Inlyta.

In December 2011, we received U.S. Food and Drug Administration (FDA) approval for the use of Prevnar 13 by adults 50 years of age and older. It is now approved in more than 40 countries, including markets within the European Union, and represents a significant expansion of our successful Prevnar/Prevenar franchise for preventing pneumococcal disease.

In 2011, Pfizer and our partner, Bristol-Myers Squibb (BMS), received approval in the European Union for Eliquis, a twice-daily oral anticoagulant, for the treatment of blood clots in patients after elective hip- or knee-replacement surgery. In addition, in late 2011, the FDA and the European Medicines Agency accepted for review the Pfizer and BMS applications for Eliquis for an indication in a larger patient population, to prevent strokes in patients with atrial fibrillation. The companies also have submitted that indication for review in Japan.

1 See the Company's Annual Report on Form 10-K for the year ended December 31, 2011 for the definition of "adjusted income" and its components, including "adjusted research and development expenses", and for a reconciliation of 2011 "adjusted income" and its components to 2011 net income attributable to Pfizer Inc. and its components.

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