Dividend

On December 13, 2010, Pfizer’s board of directors declared a dividend of $0.20 for 1Q11. Pfizer increased the dividend by approximately 11% to $0.20 from $0.18 per share. The company continues to target a dividend comparable to the current industry average of approximately 40% in three years.

Alliances, Agreements, Collaborations, and Acquisitions

On April 20, 2011, Pfizer signed a memorandum of understanding (MOU) with Shanghai Pharmaceutical Co. Ltd. for potential business opportunities in China. The companies are currently looking to commercialize a Pfizer product in China.

On March 1, 2011, Pfizer acquired King Pharmaceuticals Inc. for $14.25 per share in cash. The acquisition will help Pfizer strengthen its footing in the market for painkillers where it already has a large stake. King’s expertise in the pain drug segment, particularly its focus on abuse-resistant pain drugs, is expected to help Pfizer boost its portfolio of drugs before its top selling cholesterol drug Lipitor goes off patent later this year. Pfizer expects the transaction to be accretive to earnings by 2 cents annually in 2011 and 2012, and $0.03 - $0.04 annually from 2013 through 2015. The company expects to achieve initial cost savings from operating expenses of at least $200 million, which are expected to be fully realized by the end of 2013.

On February 7, 2011, Pfizer announced its intention to purchase Ferrosan’s consumer healthcare business, which includes dietary supplements and lifestyle products. Ferrosan, which is based in Copenhagen, has a broad presence in the Nordic region as well as Russia, the Ukraine, Poland, Turkey and many countries throughout Central and Eastern Europe. The deal is scheduled to close in 2Q11.

In October 2009, Pfizer entered into an agreement with Mylan regarding a generic version of Vfend. The agreement is limited to the tablet form of Vfend and does not cover Pfizer’s Vfend products for intravenous use or oral suspension. Pursuant to the agreement, Mylan launched its generic version of Vfend tablets in February 2011.

Pfizer lacks a drug that would add to its top-line after the patent on Lipitor expires in November 2011.

Many of the key drugs that heightened Pfizer’s stature are experiencing stiff direct competition. Pfizer is a major financial and pharmaceutical company, but its ability to withstand threats to its core franchise remains uncertain.

Pfizer’s pipeline needs to deliver. Major high-profile development setbacks include torcetrapib for high cholesterol, tanezumab for pain (phase III), dalbavancin (Zeven), an antibiotic for the treatment of skin infections, inhaled insulin drug Exubera, Sutent (liver cancer) and melanoma candidate tremelimumab.