Pfizer Reports Second-Quarter 2008 Results

Pfizer IncPfizer Inc (NYSE: PFE) reported financial results for the second-quarter 2008. The Company recorded revenues of $12.1 billion, an increase of 9% compared with $11.1 billion in the year-ago quarter. In the U.S., revenues were $4.8 billion, a decrease of 2%, while international revenues were $7.4 billion, an increase of 18%. Revenues reflect the positive impact of foreign exchange, which increased revenues by approximately $800 million or 7%, as well as the solid performance of many key products. These factors more than offset the revenue declines due to the loss of U.S. exclusivity for Zyrtec, which Pfizer ceased selling in late January 2008, and for Camptosar in February 2008. Zyrtec and Camptosar second-quarter 2008 revenues decreased by $377 million and $104 million, respectively, compared with the year-ago quarter.

For the second-quarter 2008, Pfizer posted reported net income of $2.8 billion, an increase of 119% compared with $1.3 billion in the prior-year quarter, and reported diluted EPS of $0.41, an increase of 128% compared with $0.18 in the prior-year quarter. These increases were primarily attributable to lower restructuring charges from cost-reduction initiatives, as well as savings generated by those initiatives, the positive impact of foreign exchange and favorable income tax adjustments; these positive factors were partially offset by increased in-process research and development expenses associated with the acquisitions of Serenex, Inc. and Encysive Pharmaceuticals Inc., which closed in the second-quarter 2008.

For the first-half 2008, Pfizer recorded revenues of $24.0 billion, an increase of 2% compared with $23.6 billion in the same period in 2007, despite the loss of U.S. exclusivity of Norvasc (March 2007), Zyrtec (January 2008) and Camptosar (February 2008), which collectively decreased revenues by $1.4 billion during the first-half 2008. The 2% increase reflects the favorable impact of foreign exchange, which increased revenues by approximately $1.4 billion or 6%, in addition to the solid performance of many key products. In the U.S., revenues were $10.3 billion, a decrease of 12%, while international revenues were $13.7 billion, an increase of 15%.

For the first-half 2008, the Company posted reported net income of $5.6 billion, an increase of 19% compared with $4.7 billion in the prior-year period, and reported diluted EPS of $0.82, an increase of 24% compared with $0.66 in the prior-year period. These increases were primarily attributable to the favorable impact of foreign exchange and lower restructuring charges associated with cost-reduction initiatives, mainly employee-related costs, as well as the savings generated by those initiatives.

"We are pleased with the financial results we delivered this quarter, which were driven in part by the solid performance in our Pharmaceutical and Animal Health businesses," stated Chairman and Chief Executive Officer Jeff Kindler. "Many of our key products continued to perform well both in the U.S. and international markets, including Lyrica, Celebrex, Viagra and Geodon, as well as Lipitor in the face of a highly competitive statin market. The benefit of our broad-based portfolio of products, our geographic reach and our diverse strategies for growth was evident in this quarter's financial results, which clearly demonstrate our ability to continue to deliver solid performance in an increasingly challenging environment."

Pharmaceutical revenues for the second-quarter 2008 were $11.1 billion, an increase of 9% compared with the prior-year quarter, including the favorable impact of foreign exchange, which increased revenues by approximately $730 million or 7%. Second-quarter 2008 revenues from in-line and new products increased 16% compared with the year-ago quarter; this excludes the impact of the loss of U.S. exclusivity of Norvasc, Zyrtec and Camptosar, which collectively resulted in a revenue decline of $496 million or 39% compared with the year-ago quarter.

Lipitor revenues in the second-quarter 2008 were $3.0 billion, an increase of 9% compared with the prior-year quarter, reflecting the favorable impact of foreign exchange, which increased revenues by approximately $170 million or 6%. In the U.S., Lipitor revenues increased 1% compared with the prior-year quarter, while revenues from international markets rose 18%, due to the favorable impact of foreign exchange of 13% and operational growth of 5%. The global statin market continues to be highly competitive, with both branded and generic competition in an increasingly cost-sensitive environment. Pfizer continues to respond to these market dynamics with an integrated, multi-channel effort, emphasizing Lipitor’s strong clinical profile demonstrated in over 400 completed or ongoing clinical trials including more than 80,000 patients and in more than 151 million patient years of experience over 15 years.

Lyrica revenues in the second-quarter 2008 were $614 million, an increase of 52% compared with the prior-year quarter, driven by strong efficacy and high patient and physician satisfaction in managing nerve pain associated with diabetes and nerve pain after shingles, the June 2007 U.S. approval for the management of fibromyalgia, a branded and unbranded advertising strategy focused on increasing both Lyrica and fibromyalgia awareness as well as the favorable impact of foreign exchange. In the U.S., Lyrica revenues rose to $335 million, an increase of 55% compared to the prior-year quarter, while international revenues grew to $279 million, an increase of 48%.

Celebrex revenues in the second-quarter 2008 were $589 million, an increase of 23% compared with the year-ago quarter, primarily driven by the continued educational and promotional efforts supporting the risk-benefit proposition of this medicine, as well as the favorable impact of foreign exchange. In the U.S., Celebrex revenues rose to $416 million, an increase of 22% compared with the prior-year quarter, while international revenues grew to $173 million, an increase of 27%.

Sutent revenues in the second-quarter 2008 continued to demonstrate strong performance and market leadership in its approved indications, advanced renal cell carcinoma (RCC) and gastrointestinal stromal tumor (GIST), with revenues of $211 million, an increase of 45% compared with the year-ago quarter. In the U.S., Sutent revenues were $60 million, a decrease of 2% compared with the prior-year quarter, while international revenues grew to $151 million, an increase of 80%. To date, Sutent has launched in 61 countries, with four in the second-quarter 2008 including Japan, China and Russia, and six planned in the next 12 months. As part of Pfizer’s robust life cycle plan, clinical trials continue for potential additional indications where Sutent shows promise and where there is a need for additional treatments, most notably breast, colorectal and lung cancers.

Chantix (known as Champix outside the U.S.) revenues in the second-quarter 2008 were $207 million, an increase of 3% compared with the second-quarter 2007. In the U.S., Chantix revenues declined to $109 million, a decrease of 35% compared with the prior-year quarter, while international revenues grew to $98 million, an increase of 197%. U.S. results were negatively impacted by the recent updates to the Chantix U.S. label to include additional safety information, as well as certain external events relating to Chantix. Pfizer continues its educational and promotional efforts focused on the Chantix risk-benefit proposition, the significant health consequences of smoking and the importance of the physician-patient dialogue to help patients effectively use Chantix to reach their health goal of becoming smoke free. Since its approval in the U.S. in May 2006, Chantix/Champix has been approved in 76 countries and has been used by more than six million patients, an increasing number of whom are covered by third-party payers. In the second-quarter 2008, Champix launched in Japan, which has more than 30 million smokers, as well as Malaysia and Singapore, with nine launches planned in the next 12 months, including Russia, Turkey and China.

For further information, visit www.pfiser.com.

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