Pfizer 2013 Annual Report Download - page 68

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2013 Financial Report 67
hydrochloride), the first once-daily liquid medication approved in the U.S. for the treatment of attention deficit hyperactivity disorder. Quillivant
XR received approval from the U.S. Food and Drug Administration (FDA) on September 27, 2012, and was launched in the U.S. on January
14, 2013. The total consideration for the acquisition was approximately $442 million, which consisted of upfront payments to NextWave's
shareholders of approximately $278 million and contingent consideration with an estimated acquisition-date fair value of approximately $164
million. The contingent consideration consisted of up to $425 million in additional payments that are contingent upon attainment of certain
revenue milestones. In 2013, we finalized the allocation of the consideration transferred to the assets acquired and the liabilities assumed in
this acquisition. We recorded $519 million in Identifiable intangible assets, consisting of $474 million in Developed technology rights and $45
million in In-process research and development; $166 million in net deferred tax liabilities; and $89 million in Goodwill. In 2013, as a result of
lowered commercial forecasts, the fair value of the contingent consideration decreased and we recognized a pre-tax gain of approximately
$114 million in Other (income)/deductions––net.
Nexium Over-The-Counter Rights
In August 2012, we entered into an agreement with AstraZeneca for the exclusive, global, over-the-counter (OTC) rights for Nexium, a leading
prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. We made an upfront payment of $250 million
to AstraZeneca, and AstraZeneca is eligible to receive milestone payments of up to $550 million based on product launches and level of sales,
as well as royalty payments based on sales. The upfront payment for this Consumer Healthcare asset acquisition was expensed and included
in Research and development expenses in our consolidated statement of income for the year ended December 31, 2012.
Alacer Corp.
On February 26, 2012, we completed our acquisition of Alacer Corp., a company that manufactured, marketed and distributed Emergen-C, a
line of effervescent, powdered drink mix vitamin supplements. In connection with this Consumer Healthcare acquisition, we recorded $181
million in Identifiable intangible assets, consisting primarily of the Emergen-C indefinite-lived brand; $69 million in net deferred tax liabilities;
and $192 million in Goodwill.
Ferrosan Holding A/S
On December 1, 2011, we completed our acquisition of the consumer healthcare business of Ferrosan Holding A/S (Ferrosan), a Danish
company engaged in the sale of science-based consumer healthcare products, including dietary supplements and lifestyle products, primarily
in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. This acquisition is reflected in our consolidated
financial statements beginning in the first fiscal quarter of 2012. Our acquisition of Ferrosan’s consumer healthcare business increases our
presence in dietary supplements with a new set of brands and pipeline products. Also, we believed that the acquisition would allow us to
expand the marketing of Ferrosan's brands through Pfizer's global footprint and provide greater distribution and scale for certain Pfizer brands,
such as Centrum and Caltrate, in Ferrosan's key markets. In connection with this Consumer Healthcare acquisition, we recorded $362 million
in Identifiable intangible assets, consisting of indefinite-lived and finite-lived brands; $94 million in net deferred tax liabilities; and $322 million
in Goodwill.
Excaliard Pharmaceuticals, Inc.
On November 30, 2011, we completed our acquisition of Excaliard Pharmaceuticals, Inc. (Excaliard), a privately owned biopharmaceutical
company. Excaliard's lead compound, EXC-001, a Phase 2 compound, is an antisense oligonucleotide designed to interrupt the process of
skin fibrosis by inhibiting expression of connective tissue growth factor (CTGF). The total consideration for the acquisition was approximately
$174 million, which consisted of an upfront payment to Excaliard's shareholders of approximately $86 million and contingent consideration
with an estimated acquisition-date fair value of approximately $88 million. The contingent consideration consists of up to $230 million in
additional payments that are contingent upon the attainment of certain regulatory and revenue milestones. Payments under the contingent
consideration arrangement were $30 million in 2012 as a regulatory milestone was reached. In connection with this Worldwide Research and
Development acquisition, we recorded $257 million in Identifiable intangible assets––In-process research and development; $87 million in net
deferred tax liabilities; and $8 million in Goodwill.
Icagen, Inc.
On September 20, 2011, we completed our cash tender offer for the outstanding shares of Icagen, Inc. (Icagen), resulting in an approximate
70% ownership of the outstanding shares of Icagen, a biopharmaceutical company focused on discovery, development and commercialization
of novel orally-administered small molecule drugs that modulate ion channel targets. On October 27, 2011, we acquired all of the remaining
shares of Icagen. In connection with this Worldwide Research and Development acquisition, we recorded $19 million in Identifiable intangible
assets.
King Pharmaceuticals, Inc.
Description of the Transaction
On January 31, 2011 (the acquisition date), we completed a tender offer for the outstanding shares of common stock of King Pharmaceuticals,
Inc. (King), at a purchase price of $14.25 per share in cash and acquired approximately 92.5% of the outstanding shares. On February 28,
2011, we acquired all of the remaining shares of King for $14.25 per share in cash. As a result, the total fair value of consideration transferred
for King was approximately $3.6 billion in cash ($3.2 billion, net of cash acquired).