Wyeth Reports Earnings Results for the 2008 Second Quarter and First Half and Raises...

Wyeth Reports Earnings Results for the 2008 Second Quarter and First Half and
Raises Earnings Guidance
- 2008 Second Quarter Worldwide Net Revenue Increased 5% to $5.9 Billion and
Reported Diluted Earnings per Share Decreased 5% to $0.83. Diluted Earnings
per Share, before Certain Significant Items, Increased 1% to $0.91

MADISON, N.J., July 23 /PRNewswire-FirstCall/ -- Wyeth (NYSE: WYE) today
reported results for the 2008 second quarter and first half ending June 30,
2008. Worldwide net revenue increased 5% to $5.9 billion for the 2008 second
quarter and 6% to $11.7 billion for the 2008 first half. Excluding the
favorable impact of foreign exchange, worldwide net revenue for the 2008
second quarter was comparable to the 2007 second quarter and increased 1% for
the 2008 first half.
"We are increasing 2008 pro forma earnings guidance due to the positive
results achieved to date and the momentum we see going forward," said Bernard
Poussot, Chairman, President and Chief Executive Officer, Wyeth. "We are
pleased with the volume growth we experienced internationally which was
enhanced by foreign exchange rates, and continue to build upon the strength of
our biotech products Enbrel and Prevnar, as well as our growing nutritional
franchise. We also have the advantage of diverse businesses --
pharmaceuticals, consumer healthcare and animal health. In addition, we are
optimistic about the future -- having secured five product approvals in the
past 14 months, and we are encouraged by the Phase 2 results for bapineuzumab
in Alzheimer's disease that support our decision to initiate Phase 3 trials."
2008 Second Quarter and First Half Product Highlights
Net revenue from Wyeth's principal products for the 2008 second quarter
and first half together with the percentage changes from the comparable period
in the prior year are presented in the following table:

(UNAUDITED)
Three Months Ended Six Months Ended
6/30/2008 6/30/2008

Principal Products Increase/ Increase/
($ in millions) (Decrease) ($ in millions) (Decrease)

Effexor $1,022 5% $2,044 9%
Prevnar 691 9% 1,396 12%
Enbrel
Outside U.S. and Canada 692 36% 1,298 36%
Alliance Revenue -
U.S. and Canada 284 6% 610 23%
Nutrition 430 20% 841 19%
Zosyn/Tazocin 319 14% 661 18%
Premarin family 271 1% 547 8%
Protonix family(1) 228 (59)% 387 (62)%
Centrum 184 10% 372 14%
Advil 165 2% 337 5%

(1) Protonix family net revenue for the 2008 second quarter and first half
reflects revenue from both the branded product, $105 and $188,
respectively, and Wyeth's own generic version, $123 and $199,
respectively.

Product Highlights
ENBREL(R) continued to post strong revenue growth during the 2008 second
quarter. Enbrel sales in the United States and Canada, our share of which is
reflected in alliance revenue, are scheduled to be reported on July 28 by
Wyeth's marketing partner, Amgen Inc. Wyeth has exclusive rights to Enbrel
outside the United States and Canada.
Enbrel is a breakthrough product approved for the treatment of chronic
inflammatory diseases, including rheumatoid arthritis, juvenile rheumatoid
arthritis, ankylosing spondylitis, psoriatic arthritis and psoriasis. Enbrel
continues as the leading biotechnology brand in the world and maintains its
position as the fifth largest among the top pharmaceutical products worldwide
ranked by sales.
PREVNAR(R), Wyeth's vaccine to prevent invasive pneumococcal disease in
both infants and young children, is the world's best selling pediatric
vaccine. Prevnar is available in 88 countries worldwide and now is included
in 24 national immunization programs (NIPs), with several additional countries
announcing intentions to initiate NIPs.
EFFEXOR(R) (Effexor and Effexor XR) continues to be the number one global
antidepressant in sales and an important therapy in treating adult patients
with major depressive disorder, generalized anxiety disorder, social anxiety
disorder and panic disorder. In the United States, demand for Effexor XR
prescriptions declined slightly in the 2008 second quarter as the Company
shifted promotional support to the launch of PRISTIQ(TM), its new product for
the treatment of adult patients with major depressive disorder.
Wyeth Nutrition continued its strong performance during the 2008 second
quarter driven by outstanding performance from key markets, including China
and Australia as well as the continued expansion of the Company's new premium
Gold Line formula with Lutein -- a nutrient to help with children's visual
health.
Sales of PROTONIX(R) (pantoprazole sodium), Wyeth's branded proton pump
inhibitor indicated for gastroesophageal reflux disease, continued to be
adversely affected during the 2008 second quarter and first half by the "at
risk" launch of generic pantoprazole tablets in the United States by Teva
Pharmaceuticals USA, Inc. (Teva) and Sun Pharmaceutical Industries, Ltd.
(Sun). Wyeth launched its own generic version of Protonix tablets in the 2008
first quarter. While Wyeth's own generic has had some success in the
marketplace, the sales of Wyeth's own generic have not, and cannot, offset the
substantial harm caused by the launch of infringing generics. The Company
will continue to vigorously pursue its litigation against Teva, Sun and other
infringing generics.
Additional information regarding Wyeth's product sales may be accessed on
the Company's Internet Web site at www.wyeth.com by clicking on the "Investor
Relations" hyperlink.
New Product Update
The Company achieved several regulatory and development milestones for its
key new and investigational products during the 2008 second quarter:
In April, RELISTOR(TM) subcutaneous injection was approved by the U.S.
Food and Drug Administration (FDA) for the treatment of opioid-induced
constipation in advanced illness patients who are receiving palliative care
when response to laxative therapy has not been sufficient. In July, Relistor
subcutaneous injection, for the same indication, received marketing approval
from the European Commission. It is now approved in the 27 member states of
the European Union.
In May, the FDA granted Fast Track designation to the Company's
investigational 13-valent pneumococcal conjugate vaccine for infants and
toddlers. The Company is seeking a pediatric indication for active
immunization against invasive pneumococcal disease and otitis media caused by
serotypes included in the vaccine.
In June, Fort Dodge Animal Health reintroduced PROHEART(R) 6, a unique
heartworm preventative, to the U.S. veterinary market.
Finally, in June, Wyeth and Elan Corporation, plc (NYSE: ELN) announced
encouraging preliminary findings from a Phase 2 study of bapineuzumab
(AAB-001) in patients with mild to moderate Alzheimer's disease. Results will
be presented at the International Conference on Alzheimer's Disease (ICAD) on
July 29, 2008.
2008 Second Quarter Results
Net revenue increased 5% for the 2008 second quarter primarily driven by
our core products, Enbrel, Prevnar and Nutrition products, and the favorable
impact of foreign exchange. Sales of Effexor also increased in the second
quarter due primarily to price increases. ZOSYN(R) sales also increased in
the quarter. These increases in net revenue were offset, in part, by
declining Protonix sales due to ongoing generic competition.
Selling, general and administrative expenses, excluding certain
significant items, for the 2008 second quarter increased 3%, and decreased 1%
excluding the impact of foreign exchange, versus the 2007 second quarter,
demonstrating our commitment to cost control throughout the Company.
Research and development expenses, excluding certain significant items,
for the 2008 second quarter increased 1% versus the 2007 second quarter and
excluding the impact of foreign exchange, were comparable to the 2007 second
quarter.
Net income and diluted earnings per share for the 2008 second quarter were
$1,122.1 million and $0.83, compared with $1,198.5 million and $0.87 for the
2007 second quarter. The 2008 second quarter results included charges of
$155.2 million ($110.5 million after-tax or $0.08 per share-diluted) related
to the Company's productivity initiatives. The 2007 second quarter results
included productivity initiatives charges of $49.8 million ($37.0 million
after-tax or $0.03 per share-diluted). Net income and diluted earnings per
share, before these certain significant items, for the 2008 second quarter
were $1,232.6 million and $0.91, compared with $1,235.5 million and $0.90 for
the 2007 second quarter.
2008 First Half Results
Net revenue increased 6% for the 2008 first half primarily driven by our
core products, Enbrel, Prevnar and Nutrition products and the favorable impact
of foreign exchange. Sales of Effexor and the Premarin family of products
also increased for the 2008 first half due primarily to price increases.
Zosyn sales also increased in the 2008 first half. Partially offsetting the
increases were Protonix sales, which declined substantially due to generic
competition.
Selling, general and administrative expenses, excluding certain
significant items, for the 2008 first half increased 5%, and increased 1%
excluding the impact of foreign exchange, versus the 2007 first half.
Research and development expenses, excluding certain significant items,
for the 2008 first half increased 5% and increased 4% excluding the impact of
foreign exchange, versus the 2007 first half due to higher late-stage clinical
trial spending.
The 2008 first half tax rate, excluding certain significant items,
increased to 30.8% from 29.1% in the 2007 first half. The tax rate for the
2008 first half does not include any benefit from the U.S. Research and
Development Tax Credit, which expired in December 2007.
Net income and diluted earnings per share for the 2008 first half were
$2,319.0 million and $1.72, compared with $2,452.6 million and $1.79 for the
2007 first half. The 2008 first half results included net charges of $236.2
million ($180.1 million after-tax or $0.13 per share-diluted) related to the
Company's productivity initiatives. The 2007 first half results included
productivity initiatives charges of $92.4 million ($66.5 million after-tax or
$0.05 per share-diluted). Net income and diluted earnings per share, before
these certain significant items, for the 2008 first half were $2,499.1 million
and $1.85, compared with $2,519.1 million and $1.84 for the 2007 first half.
Productivity Initiatives
In 2008, the Company continued its productivity initiatives by launching
Project Impact, a company-wide program designed to initially address short-
term fiscal challenges, particularly the significant loss of sales and profits
resulting from the launch of generic versions of Protonix. Longer-term,
Project Impact will include strategic actions to fundamentally change how we
conduct business across the entire Company and to adapt to the continuously
changing environment. The 2008 second quarter and first half charges included
expenses of $155.2 million and $340.8 million, respectively, primarily for
severance and other employee-related costs associated with a reduction in
workforce of approximately 6%, many of whom were selling and marketing
personnel who supported Protonix. The 2008 first half productivity
initiatives expenses were offset, in part, by a $104.7 million gain on the
sale of a manufacturing facility in Japan in the 2008 first quarter. The 2007
second quarter and first half included productivity initiatives expenses of
$49.8 million and $92.4 million, respectively, primarily related to
manufacturing site network consolidation initiatives.
To assist in performing second quarter and first half comparisons, a pro
forma presentation, which excludes our productivity initiatives, is provided
under "Results of Operations - As Adjusted."
2008 Earnings Guidance
The Company has raised its 2008 full year pro forma diluted earnings per
share guidance range to $3.47 to $3.55. This guidance is considered pro forma
as it excludes the impact of charges relating to the Company's productivity
initiatives.
Segment Information
The following table sets forth worldwide net revenue by reportable segment
together with the percentage changes from the comparable period in the prior
year:

(UNAUDITED)
Net Revenue by Three Months Ended Six Months Ended
Reportable Segment 6/30/2008 6/30/2008

($ in millions) Increase ($ in millions) Increase

Pharmaceuticals $4,967 5% $9,726 5%
Consumer Healthcare 665 7% 1,340 9%
Animal Health 313 12% 590 6%

Consolidated Total $5,945 5% $11,656 6%

Pharmaceuticals
Worldwide Pharmaceuticals net revenue increased 5% for both the 2008
second quarter and first half due primarily to higher sales of Effexor,
Enbrel, Prevnar, Nutrition products and Zosyn, and the favorable impact of
foreign exchange. Also contributing to net revenue growth were our new
products TYGACIL(R), TORISEL(TM) and Pristiq. In addition, the Premarin
family of products added to the 2008 first half net revenue growth. The
increase in Pharmaceuticals net revenue was offset, in part, by lower sales of
Protonix due to generic competition. Excluding the favorable impact of
foreign exchange, worldwide Pharmaceuticals net revenue for the 2008 second
quarter and first half was comparable to the 2007 second quarter and first
half.
Consumer Healthcare
Worldwide Consumer Healthcare net revenue increased 7% for the 2008 second
quarter and 9% for the 2008 first half due primarily to an increase in sales
of CENTRUM(R), ADVIL(R) and CALTRATE(R) and the favorable impact of foreign
exchange, partially offset by lower sales of ALAVERT(R) and DIMETAPP(R). In
addition, CHAPSTICK(R) also contributed to the 2008 second quarter net revenue
increase. Excluding the favorable impact of foreign exchange, worldwide
Consumer Healthcare net revenue increased 2% for the 2008 second quarter and
3% for the 2008 first half.
Finally, in an effort to accelerate growth through strategic acquisitions,
Consumer Healthcare announced earlier this month it has agreed to purchase
ThermaCare(R), a leading over-the-counter heat wrap, from Procter & Gamble
(NYSE: PG). The transaction is expected to enhance Wyeth's global position in
pain management.
Animal Health
Worldwide Animal Health net revenue increased 12% for the 2008 second
quarter and 6% for the 2008 first half due primarily to higher sales of
poultry products and livestock products driven by ZULVAC(R) bluetongue
vaccine, and the favorable impact of foreign exchange. Also contributing to
the 2008 second quarter net revenue increase were higher sales of companion
animal products, including PROMERIS(R) flea and tick products. Partially
offsetting these increases were lower sales of equine products. Excluding the
favorable impact of foreign exchange, worldwide Animal Health net revenue
increased 7% for the 2008 second quarter and the 2008 first half was
comparable to the 2007 first half.
Results of Operations
The comparative results of operations are as follows:
(In thousands except per share amounts)

(UNAUDITED)
Three Months Ended Six Months Ended
6/30/2008 6/30/2007 6/30/2008 6/30/2007

Net Revenue $5,945,358 $5,648,050 $11,656,007 $11,016,736
Cost of Goods Sold 1,683,937 1,530,177 3,245,950 3,004,688
Selling, General and
Administrative Expenses 1,832,500 1,688,012 3,554,713 3,200,551
Research and Development
Expenses 836,067 825,123 1,675,444 1,575,855
Interest (Income)
Expense, Net 18,685 (19,018) (8,771) (33,818)
Other Income, Net (44,677) (90,696) (188,162) (190,332)
Income before Income
Taxes 1,618,846 1,714,452 3,376,833 3,459,792
Provision for Income
Taxes 496,752 515,931 1,057,792 1,007,167
Net Income $1,122,094 $1,198,521 $2,319,041 $2,452,625

Basic Earnings per Share $0.84 $0.89 $1.74 $1.82

Average Number of Common
Shares Outstanding
During Each Period -
Basic 1,332,682 1,345,769 1,333,945 1,344,335

Diluted Earnings per Share $0.83 $0.87 $1.72 $1.79

Average Number of Common
Shares Outstanding
During Each Period -
Diluted 1,359,496 1,382,094 1,359,903 1,378,693

See Notes to Results of Operations.

Results of Operations - As Adjusted
Wyeth has prepared the following presentation of its results of operations
for the three and six months ended June 30, 2008 and 2007, adjusted to exclude
charges, which are considered certain significant items during the 2008 and
2007 second quarter and first half.
The comparative results of operations - as adjusted are as follows:
(In thousands except per share amounts)

(UNAUDITED) - AS ADJUSTED
Three Months Ended Six Months Ended
6/30/2008 6/30/2007 6/30/2008 6/30/2007

Net Revenue $5,945,358 $5,648,050 $11,656,007 $11,016,736
Cost of Goods Sold 1,636,296 1,488,054 3,132,381 2,933,509
Selling, General and
Administrative Expenses 1,730,949 1,680,479 3,352,588 3,179,540
Research and Development
Expenses 830,059 824,979 1,650,323 1,575,645
Interest (Income)
Expense, Net 18,685 (19,018) (8,771) (33,818)
Other Income, Net (44,677) (90,696) (83,507) (190,332)
Income before Income
Taxes 1,774,046 1,764,252 3,612,993 3,552,192
Provision for Income
Taxes 541,472 528,731 1,113,862 1,033,067
Net Income $1,232,574 $1,235,521 $2,499,131 $2,519,125

Basic Earnings per Share $0.92 $0.92 $1.87 $1.87

Average Number of Common
Shares Outstanding
During Each Period -
Basic 1,332,682 1,345,769 1,333,945 1,344,335

Diluted Earnings per Share $0.91 $0.90 $1.85 $1.84

Average Number of Common
Shares Outstanding
During Each Period -
Diluted 1,359,496 1,382,094 1,359,903 1,378,693

See Notes to Results of Operations.

Notes to Results of Operations

(1) The average number of common shares outstanding for diluted earnings
per share is higher than for basic earnings per share due to the
assumed conversion of the Company's outstanding convertible senior
debentures, outstanding stock options, deferred contingent common
stock awards, performance share awards, restricted stock awards and
convertible preferred stock into common stock equivalents using the
treasury stock method. For purposes of calculating diluted earnings
per share, interest expense, net of capitalized interest and taxes
related to the Company's outstanding convertible senior debentures is
added back to reported net income, and the additional shares of common
stock (assuming conversion) are included in total shares outstanding.
Interest expense, net of capitalized interest and taxes related to
these debentures was $6,765 and $13,836 for the 2008 second quarter
and first half, respectively, compared with $7,907 and $15,779 for the
2007 second quarter and first half, respectively.

(2) Other income, net included royalty income for the 2008 second quarter
and first half of $112,231 and $167,989, respectively, compared with
$61,819 and $138,783 for the prior year. The 2008 second quarter and
first half include a one-time royalty milestone payment of $60,000
related to the previously divested SYNVISC(R) product line. Other
income, net also included pre-tax gains from product divestitures of
$10,143 for the 2008 second quarter and $33,201 for the 2008 first
half compared with $41,281 for the 2007 second quarter and $57,584 for
the 2007 first half.

(3) Certain significant items, which have been described under
"Productivity Initiatives," have been excluded from the results of
operations - as adjusted for the 2008 and 2007 second quarter and
first half as follows:

(UNAUDITED)
(In thousands, except Three Months Ended Six Months Ended
per share amounts) 6/30/2008 6/30/2007 6/30/2008 6/30/2007

Cost of Goods Sold $47,641 $42,123 $113,569 $71,179
Selling, General and
Administrative Expenses 101,551 7,533 202,125 21,011
Research and Development
Expenses 6,008 144 25,121 210
Total Productivity
Initiatives Charges(a) 155,200 49,800 340,815 92,400
Other Income, Net(b) - - (104,655) -
Net Productivity
Initiatives Charges $155,200 $49,800 $236,160 $92,400

Net Productivity
Initiatives Charges,
After-Tax $110,480 $37,000 $180,090 $66,500

Decrease in Diluted
Earnings per Share $0.08 $0.03 $0.13 $0.05

(a) 2008 charges are primarily severance and other employee-related
costs associated with an approximate 6% reduction in workforce.
2007 charges were primarily related to manufacturing site
network consolidation initiatives.

(b) Other income, net represents the net gain on the sale of a
manufacturing facility in Japan.

Wyeth calculates net income before certain significant items by excluding
the after-tax effect of items considered by management to be unusual from the
net income reported under generally accepted accounting principles (GAAP).
Wyeth's management uses this measure to manage and evaluate the Company's
performance and believes it is appropriate to disclose this non-GAAP measure
to assist investors with analyzing business performance and trends. Wyeth's
management believes that excluding these items from the Company's results
provides a more appropriate view of the Company's operations for the
accounting periods presented. These measures should not be considered in
isolation or as a substitute for the results of operations and diluted
earnings per share prepared in accordance with GAAP.
Wyeth is one of the world's largest research-driven pharmaceutical and
health care products companies. It is a leader in the discovery, development,
manufacturing and marketing of pharmaceuticals, vaccines, biotechnology
products and non-prescription medicines that improve the quality of life for
people worldwide. The Company's major divisions include Wyeth
Pharmaceuticals, Wyeth Consumer Healthcare and Fort Dodge Animal Health.
The statements in this press release and on the related conference call
that are not historical facts, including our revised 2008 financial guidance,
are forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those expressed or
implied by such statements. In particular, our revised 2008 financial
guidance is based in part on key assumptions regarding, among other things,
the impact of generic pantoprazole tablets on sales of Protonix, achievement
of cost reductions relating to Project Impact, the timing and impact of
potential generic competition for Zosyn and Effexor XR, and continued growth
in sales of certain of our principal products, including Prevnar, Enbrel and
our Nutrition products. If the assumptions underlying our revised 2008
financial guidance prove incorrect, our actual results could differ materially
from our guidance. In addition, the statements in this press release and on
the related conference call regarding development and regulatory timelines for
our pipeline products are subject to risks and uncertainties related to both
the timing and success of regulatory submissions and review and decisions by
regulatory authorities, including the possibility that regulatory authorities
will not agree with our assessments of clinical data or the sufficiency of
regulatory submissions, will require additional clinical trials or other data,
will take longer to review our submissions than we expect, or will determine
not to approve our applications. Other risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by
forward-looking statements include, without limitation, the inherent
uncertainty of the timing and success of, and expense associated with,
research, development, regulatory approval and commercialization of our
products and pipeline products; government cost-containment initiatives;
restrictions on third-party payments for our products; substantial competition
in our industry, including from branded and generic products; emerging data on
our products and pipeline products; the importance of strong performance from
our principal products and our anticipated new product introductions; the
highly regulated nature of our business; product liability, intellectual
property and other litigation risks and environmental liabilities; uncertainty
regarding our intellectual property rights and those of others; difficulties
associated with, and regulatory compliance with respect to, manufacturing of
our products; risks associated with our strategic relationships; economic
conditions including interest and currency exchange rate fluctuations; changes
in generally accepted accounting principles; trade buying patterns; the impact
of legislation and regulatory compliance; risks and uncertainties associated
with global operations and sales; and other risks and uncertainties, including
those detailed from time to time in our periodic reports filed with the
Securities and Exchange Commission, including our current reports on Form 8-K,
quarterly reports on Form 10-Q and annual report on Form 10-K, particularly
the discussion under the caption "Item 1A, RISK FACTORS" in our annual report
on Form 10-K for the year ended December 31, 2007, which was filed with the
Securities and Exchange Commission on February 29, 2008. The forward-looking
statements in this press release and on the related conference call are
qualified by these risk factors. We assume no obligation to publicly update
any forward-looking statements, whether as a result of new information, future
developments or otherwise.
The Company will hold a conference call with research analysts at 8 a.m.
Eastern Daylight Time today. The purpose of the call is to review the
financial results of the Company for the 2008 second quarter and first half.
Interested investors and others may listen to the call live or on a delayed
basis through the Internet webcast, which may be accessed by visiting the
Company's Internet Web site at www.wyeth.com and clicking on the "Investor
Relations" hyperlink.
Also, for recent announcements and additional information, including
product sales information, please refer to the Company's Internet Web site.
SOURCE Wyeth

Media: Douglas Petkus, +1-973-660-5218, or Investor: Justin Victoria,
+1-973-660-5340