- 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
- 2008 First Half Worldwide Net Revenue Increased 6% to $11.7 Billion and
Reported Diluted Earnings per Share Decreased 4% to $1.72. Diluted Earnings
per Share, before Certain Significant Items, Increased 1% to $1.85
- Relistor for Opioid-Induced Constipation Received FDA and European
Commission Approval
- Encouraging Phase 2 Results Announced for Bapineuzumab in Patients with
Mild to Moderate Alzheimer's Disease; Results to Be Presented at ICAD on
July 29, 2008
- 2008 Full Year Pro Forma Diluted Earnings per Share Guidance Raised to a
Range of $3.47 to $3.55
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 http://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 http://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
 back to top
Related links:
http://www.wyeth.com
CONTACT:
Media: Douglas Petkus, +1-973-660-5218, or
Investor: Justin Victoria, +1-973-660-5340
|
