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Wyeth Reports Earnings Results for the 2007 Second Quarter and First Half

Posted on: 25 Jul 07

Summary

Madison, N.J., July 19, 2007 - Wyeth (NYSE: WYE) today reported results for the 2007 second quarter and first half ending June 30, 2007. Worldwide net revenue increased 10% to $5.6 billion for the 2007 second quarter and 10% to $11.0 billion for the 2007 first half. Excluding the favorable impact of foreign exchange, worldwide net revenue increased 7% for the 2007 second quarter and 8% for the 2007 first half.


 + 2007 Second Quarter Worldwide Net Revenue Increased 10% to $5.6 Billion and Reported Diluted Earnings per Share Increased 12% to $0.87. Diluted Earnings per Share, Before Certain Significant Items Increased 13% to $0.90

+2007 First Half Worldwide Net Revenue Increased 10% to $11.0 Billion and Reported Diluted Earnings per Share Increased 12% to $1.79. Diluted Earnings per Share, Before Certain Significant  Items Increased 12% to $1.84 

+ Lybrel™ and Torisel™ Received FDA Approval 

+ 2007 Full Year Pro Forma Diluted Earnings per Share Guidance Raised to $3.48 to $3.56

Madison, N.J., July 19, 2007 - Wyeth (NYSE: WYE) today reported results for the 2007 second quarter and first half ending June 30, 2007. Worldwide net revenue increased 10% to  $5.6 billion for the 2007 second quarter and 10% to $11.0 billion for the 2007 first half.  Excluding the favorable impact of foreign exchange, worldwide net revenue increased 7%  for the 2007 second quarter and 8% for the 2007 first half.

“Wyeth delivered another outstanding quarter and a solid 2007 first half led by growth of  the biotech product Enbrel and Prevnar vaccine,” said Robert Essner, Chairman and Chief  Executive Officer. “Wyeth also received FDA approval for the novel contraceptive Lybrel,
as well as Torisel for the treatment of advanced renal cancer during the quarter. We are on  track for another excellent year, and have increased our full year pro forma diluted earnings  per share guidance to a range of $3.48 to $3.56.”

ENBREL® continued to post strong global revenue growth in the 2007 second quarter.  
Wyeth has exclusive rights to Enbrel outside the United States and Canada. Enbrel sales in  the United States and Canada, our share of which is reflected in alliance revenue, are  expected to be reported by Wyeth’s marketing partner Amgen Inc. on Thursday, July 26.
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 ranks eighth in global sales among the best-selling
pharmaceutical products and is the second fastest growing among the top ten. It is ranked
second in total global sales among all biotech products.


PREVNAR®, Wyeth’s vaccine to prevent invasive pneumococcal disease in infants and young children, continues to be the world’s best-selling vaccine. International net revenue continued its steady growth increasing 35% for the 2007 second quarter largely due to the positive impact of national immunization programs that began in late 2006 in several countries including Germany, Mexico, and the Netherlands.

EFFEXOR® (Effexor and Effexor XR) continues to be the number one selling antidepressant globally and an important therapy in treating adult patients with major depressive disorder, generalized anxiety disorder, social anxiety disorder and panic disorder.
Strong sales in key European markets, including Germany and France, contributed to the increase in the 2007 second quarter net revenue.
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.

R&D Update
Wyeth R&D also experienced a successful 2007 second quarter. In April, the Company  received an approvable letter from the U.S. Food and Drug Administration (FDA) for  VIVIANT™ (bazedoxifene) for the prevention of postmenopausal osteoporosis.
During May, two exciting new products gained FDA approval: LYBREL™, the first  low-dose combination oral contraceptive that is taken 365 days a year so that over time  women may become cycle- free; and, TORISEL™ (temsirolimus) for the treatment of  renal cell carcinoma. Also during May, the Company submitted an application to European authorities for approval to market a subcutaneous formulation of methylnaltrexone for the treatment of opioid- induced constipation in patients with
advanced illness.


During May and June, Wyeth presented important clinical data for four potential new products – bifeprunox for schizophrenia, PRISTIQ™ (desvenlafaxine succinate) for prevention of vasomotor symptoms and major depressive disorder, and Torisel. In addition, Wyeth and its partner, Elan Corporation, plc, announced that a Phase 3 clinical trial for its Alzheimer’s compound, bapineuzumab (AAB-001), would be initiated later this year to treat patients with mild to moderate Alzheimer’s disease.

2007 Second Quarter Results
Net income and diluted earnings per share for the 2007 second quarter were $1,198.5  million and $0.87, respectively, compared with $1,064.8 million and $0.78 for the 2006  second quarter. The 2007 second quarter results included net charges of $49.8 million.

($37.0 million after-tax or $0.03 per share-diluted) related to the Company’s productivity  initiatives. The 2006 second quarter results included net charges of $39.5 million ($27.3
million after-tax or $0.02 per share-diluted) related to the Company’s productivity initiatives. The 2007 and 2006 productivity initiatives charges are considered to be certain significant items for purposes of analyzing the Company’s results of operations. Net  income and diluted earnings per share, before certain significant items, for the 2007 second  quarter were $1,235.5 million and $0.90, respectively, compared with $1,092.1 million and $0.80, respectively, for the 2006 second quarter.
The increase in net income and diluted earnings per share for the 2007 second quarter, before
certain significant items, resulted from higher net revenue, lower selling, general and  administrative expenses, as a percentage of net revenue, higher interest income, net and  higher other income, net offset, in part, by higher research and development spending and  increased income taxes. Cost of goods sold, as a percentage of net revenue, was slightly  higher than the 2006 second quarter. Included in other income, net were pre-tax gains from product divestitures of $41.3 million and $16.7 million for the 2007 and 2006 second quarter, respectively.

2007 First Half Results
Net income and diluted earnings per share for the 2007 first half were $2,452.6 million and
$1.79, respectively, compared with $2,184.4 million and $1.60 for the 2006 first half. The
2007 first half results included net charges of $92.4 million ($66.5 million after-tax or  $0.05 per share-diluted) related to the Company’s productivity initiatives. The 2006 first  half results included net charges of $74.6 million ($51.5 million after-tax or $0.04 per moreshare-
diluted) related to the Company’s productivity initiatives. The 2007 and 2006  productivity initiatives charges are considered to be certain significant items for purposes  of analyzing the Company’s results of operations. Net income and diluted earnings per  share, before certain significant items, for the 2007 first half were $2,519.1 million and  $1.84, respectively, compared with $2,235.9 million and $1.64, respectively, for the 2006  first half.


The increase in net income and diluted earnings per share for the 2007 first half, before  certain significant items, resulted from higher net revenue, lower selling, general and administrative expenses, as a percentage of net revenue, higher interest income, net and  higher other income, net offset, in part, by higher research and development spending and
increased income taxes. Cost of goods sold, as a percentage of net revenue, was consistent
with the 2006 first half. Included in other income, net were pre-tax gains from product  divestitures of $57.6 million and $34.3 million for the 2007 and 2006 first half, respectively.
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” at the end of this press release.

2007 Earnings Guidance
The Company has raised its 2007 full year pro forma diluted earnings per share guidance range to $3.48 to $3.56. This guidance is considered pro forma as it excludes the impact of charges relating to the Company’s productivity initiatives. 

Pharmaceuticals
Worldwide Pharmaceuticals net revenue increased 11% for the 2007 second quarter and first half due primarily to higher sales of Prevnar, Protonix®, Enbrel, Nutrition products and  Zosyn®. Effexor sales increased 6% for the 2007 second quarter and remained consistent
with the prior year for the 2007 first half. The increase in Pharmaceuticals net revenue was
offset, in part, by lower sales of Zoton® and Inderal® LA due to generic competition.
Alliance revenue decreased 1% to $355 million for the 2007 second quarter, and increased  8% to $659 million for the 2007 first half, due primarily to higher sales of Enbrel in the
United States and Canada for the 2007 second quarter and first half, which were more than
offset by lower alliance revenue associated with sales of the CYPHER stent and Altace in the
2007 second quarter and partially offset by lower alliance revenue associated with sales of
the CYPHER stent in the 2007 first half. Excluding the favorable impact of foreign exchange, worldwide Pharmaceuticals net revenue increased 9% for the 2007 second quarter and first half.

Consumer Healthcare
Worldwide Consumer Healthcare net revenue increased 4% for the 2007 second quarter due
primarily to an increase in sales of Centrum®, Advil®, and Caltrate®. The increase was  partially offset by lower year over year sales of Dimetapp® and Robitussin® due to higher
than normal off-season sales during the 2006 second quarter resulting from the transition to
phenylephrine (PE) replacement formulations in connection with retailer actions and federal and state legislation related topseudoephedrine-containing products. Sales of Advil® Cold  & Sinus were also lower during the 2007 second quarter as the brand continues to be sold behind the counter pending FDA review of a PE reformulation. Net revenue increased 7%
for the 2007 first half due primarily to an increase in sales of Centrum, Advil, Advil® PM, Caltrate and Robitussin. Excluding the favorable impact of foreign exchange, worldwide Consumer Healthcare net revenue increased 1% for the 2007 second quarter and 5% for the 2007 first half.

Animal Health
Worldwide Animal Health net revenue increased 2% for the 2007 second quarter due to higher sales of livestock and poultry products, offset, in part, by lower sales of companion animal products. Net revenue for the 2007 first half increased 6% due primarily to higher sales of companion animal, livestock, equine and poultry products. Excluding the favorable impact of foreign exchange, worldwide Animal Health net revenue decreased 1% for the 2007 second quarter and increased 3% for the 2007 first half.

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, including the entire section under the caption “2007
Earnings Guidance,” and on the related conference call, that are not historical facts are
forward-looking statements based on current expectations of future events and are subject
to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In particular, the statements in this press release regarding clinical data and/or the regulatory status of our pipeline products are based on a preliminary analysis of the data and our expectations as to how that data will impact the regulatory approval process, which is subject to risks and uncertainties related to both the timing and success of regulatory approval. Other risks and uncertainties include 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 (including uncertainties relating to our anticipated receipt on July 23, 2007 of an action letter from the FDA regarding our pending NDA for Pristiq for the treatment of vasomotor symptoms), government cost -containment initiatives; restrictions on third-party payments for our products; substantial competition in our industry, including from
branded and generic products; data generated on our 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.” The forward-looking statements in this press release 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
Saving Time today. The purpose of the call is to review the financial results of the Company for the 2007 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.

Douglas Petkus

Last updated on: 27/08/2010 11:40:18

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