Exhibit 99.2
IMMEDIATE RELEASE
Investor Relations Contact: Media Contact:
Justin Victoria Lowell Weiner
(973) 660-5340 (973) 660-5013
Wyeth Reports
Results for the
2003 Third Quarter and First Nine Months
Madison, New Jersey, October 22, 2003 - Wyeth (the Company) (NYSE: WYE) today
reported results for the 2003 third quarter and first nine months. Worldwide net
revenue increased 13% for the 2003 third quarter and 7% for the 2003 first nine
months. Excluding the impact of foreign exchange, worldwide net revenue
increased 9% for the 2003 third quarter and 3% for the 2003 first nine months.
2003 Third Quarter Results
- --------------------------
Net income, before unusual items discussed below, increased 39% to $873.6
million for the 2003 third quarter compared with $626.7 million in the prior
year. Diluted earnings per share, before unusual items, increased 38% to $0.65
compared with $0.47 in the prior year. The 2003 third quarter unusual items
included a charge of $2,000.0 million ($1,300.0 million after-tax or $0.98 per
share-diluted) to increase the reserve relating to the Redux(R) and Pondimin(R)
diet drug litigation. Including the impact of unusual items, net loss and
diluted loss per share for the 2003 third quarter were $426.4 million and $0.32,
1
respectively, compared with net income and diluted earnings per share of
$1,401.4 million and $1.05 in the prior year.
The increases in net income and diluted earnings per share for the 2003 third
quarter, before unusual items, were due primarily to higher net revenue, lower
cost of goods sold, as a percentage of net revenue, and decreased interest
expense offset by higher selling, general and administrative expenses and lower
other income, net. The lower cost of goods sold, as a percentage of net revenue,
was due in part to the non-recurrence of certain additional costs that were
incurred in the 2002 third quarter to address various manufacturing issues, as
well as a 2002 third quarter write-off of approximately $35.0 million of
FluShield(R) inventory. These improvements in cost of goods sold, as a
percentage of net revenue, were partially offset by a slightly less profitable
product mix for the 2003 third quarter which was due primarily to decreased
sales of higher margin products, including the Premarin(R) family of products
and Cordarone(R) I.V., and higher sales of lower margin products such as
Protonix(R), Zosyn(R) and Enbrel(R) (international) offset, in part, by higher
sales of Effexor(R) XR and Prevnar(R), high margin products.
Unusual Items
- -------------
As noted above, the Company recorded a charge of $2,000.0 million ($1,300.0
million after-tax or $0.98 per share-diluted) in the 2003 third quarter to
increase the reserve relating to the Redux and Pondimin diet drug litigation.
The Company has provided updated information related to this litigation on its
website at www.wyeth.com which information may be accessed by clicking on the
"Investor Relations" hyperlink. This information has also been furnished on a
Form 8-K filed with the Securities and Exchange Commission.
2
The 2002 third quarter results also included a diet drug litigation charge of
$1,400.0 million ($910.0 million after-tax or $0.68 per share-diluted).
A reconciliation of net income and diluted earnings per share before unusual
items to net income (loss) and diluted earnings (loss) per share as reported
under generally accepted accounting principles (GAAP) is presented in the
following table:
(In millions except per share amounts)
Three Months Ended Nine Months Ended
--------------------- ---------------------
Item Description 9/30/2003 9/30/2002 9/30/2003 9/30/2002
- ---------------------------------- --------- --------- --------- ---------
Net Income before unusual items(1) $873.6 $626.7 $2,457.2 $2,098.5
Gains related to Immunex/Amgen
common stock transactions(2) - 1,684.7 558.7 1,684.7
Litigation charges (1,300.0) (910.0) (1,300.0) (910.0)
--------- --------- --------- ---------
As reported net income (loss) ($426.4) $1,401.4 $1,715.9 $2,873.2
========= ========= ========= =========
Diluted earnings per share before
unusual items including the
dilutive effect of common stock
equivalents (CSE)(1) $0.65 $0.47 $1.84 $1.57
Dilutive effect of CSE(3) 0.01 - - -
Gains related to Immunex/Amgen
common stock transactions(2) - 1.26 0.42 1.26
Litigation charges(4) (0.98) (0.68) (0.97) (0.68)
--------- --------- --------- ---------
As reported diluted earnings
(loss) per share(4) ($0.32) $1.05 $1.29 $2.15
========= ========= ========= =========
(1) The Company calculates net income before unusual items by excluding the
after-tax effect of items considered by management to be unusual from the
net income (loss) reported under GAAP. Management uses this measure to
focus on on-going operations and believes that it is useful to investors
because it enables them to perform meaningful comparisons of past and
present operating results. The Company believes that using this
information along with net income (loss) provides for a more complete
analysis of the results of operations by quarter. Net income (loss) is the
most directly comparable GAAP measure.
(2) The gains related to the Immunex/Amgen common stock transactions consist
of the following:
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- $2,627.6 million ($1,684.7 million after-tax or $1.26 per
share-diluted) recorded during the 2002 third quarter related to
the acquisition of Immunex by Amgen. The gain represents the
excess of $1,005.2 million in cash plus the fair value of
98,286,358 Amgen shares received, $2,500.1 million, over the
Company's book basis of its investment in Immunex and certain
transaction costs.
- $860.6 million ($558.7 million after-tax or $0.42 per
share-diluted) recorded during the 2003 first quarter related to
the gain on the sale of the remaining 31,235,958 shares of the
Company's Amgen common stock holdings.
(3) The $0.01 per share benefit represents the impact on diluted earnings per
share of excluding the dilutive effect of CSE.
(4) The average number of common shares outstanding used to calculate the
diluted loss per share for the 2003 third quarter items does not include
CSE, as the effect on these items would be antidilutive.
2003 First Nine Months Results
- ------------------------------
Net income and diluted earnings per share, before unusual items discussed above,
each increased 17% for the 2003 first nine months to $2,457.2 million and $1.84,
respectively, compared with $2,098.5 million and $1.57 in the prior year.
Including the impact of unusual items, net income and diluted earnings per share
for the 2003 first nine months each decreased 40% to $1,715.9 million and $1.29,
respectively, compared with $2,873.2 million and $2.15 in the prior year.
Higher net income for the 2003 first nine months, before unusual items, was
impacted by increases in net revenue and other income and lower interest
expense, partially offset by a less profitable product mix and higher
manufacturing costs, as well as higher selling, general and administrative
expenses. Higher other income was a result of 2003 second quarter gains from the
divestiture of certain pharmaceutical and consumer healthcare products amounting
to approximately $290 million.
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Segment Information
- -------------------
The following table sets forth worldwide net revenue by operating segment
together with the percentage changes from the comparable period in the prior
year:
Three Months Nine Months
Ended 9/30/03 Ended 9/30/03
-------------------- --------------------
Operating Segment ($ in 000's) Inc ($ in 000's) Inc
- ---------------------- ------------ --- ------------ ---
Human Pharmaceuticals $ 3,211,615 11% $ 9,166,201 5%
Animal Health Products 209,159 63% 605,097 25%
------------ --- ------------ ---
Pharmaceuticals 3,420,774 13% 9,771,298 6%
Consumer Healthcare 660,835 10% 1,745,924 10%
------------ --- ------------ ---
Total $ 4,081,609 13% $11,517,222 7%
============ === ============ ===
Pharmaceuticals
---------------
Worldwide pharmaceutical net revenue increased 13% for the 2003 third quarter
and 6% for the 2003 first nine months. Excluding the favorable impact of foreign
exchange, worldwide pharmaceutical net revenue increased 9% for the 2003 third
quarter and 2% for the 2003 first nine months.
Human Pharmaceuticals
---------------------
Worldwide human pharmaceutical net revenue increased 11% for the 2003 third
quarter and 5% for the 2003 first nine months due primarily to higher sales of
Effexor XR (global growth and higher volume caused by an increase in
prescriptions), Protonix (strong prescription volume growth), Enbrel
(international), Prevnar and Zosyn (each reflecting consistent increased
manufacturing capability) and increased alliance revenue offset, in part, by
lower sales of the Premarin family of products and Cordarone I.V. (market
exclusivity ended October 2002). Excluding the favorable impact of foreign
exchange,
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worldwide human pharmaceutical net revenue increased 7% for the 2003 third
quarter and 1% for the 2003 first nine months.
Animal Health Products
----------------------
Worldwide animal health product net revenue increased 63% for the 2003 third
quarter and 25% for the 2003 first nine months due primarily to higher domestic
sales of ProHeart(R) 6 compared with the similar period in the prior year which
was impacted by significant ProHeart 6 product returns. The increase in sales
for the 2003 first nine months was also due to higher domestic sales of the
Company's West Nile - Innovator(TM), a biological vaccine for horses. Excluding
the favorable impact of foreign exchange, worldwide animal health product net
revenue increased 57% for the 2003 third quarter and 21% for the 2003 first nine
months.
Consumer Healthcare
-------------------
Worldwide consumer healthcare net revenue increased 10% for both the 2003 third
quarter and first nine months. The increases were due primarily to sales of
Alavert(TM) (introduced in the 2002 fourth quarter) and higher sales of
Centrum(R), Advil(R) and Caltrate(R). The 2003 first nine months increase was
also attributable to higher sales of cough/cold/allergy products. Excluding the
impact of foreign exchange, worldwide consumer healthcare net revenue increased
7% for both the 2003 third quarter and first nine months.
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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 that are not historical facts, are
forward-looking statements based on current expectations of future events that
involve risks and uncertainties including, without limitation, risks associated
with the inherent uncertainty of the timing and successfulness of pharmaceutical
research, product development, manufacturing, commercialization, economic
conditions including interest and currency exchange rate fluctuations, changes
in generally accepted accounting principles, the impact of competitive or
generic products, trade buying patterns, wars or terrorist acts, product
liability and other types of lawsuits, the impact of legislation and regulatory
compliance and obtaining reimbursement, favorable drug pricing, access and other
approvals, environmental liabilities, and patent, and other risks and
uncertainties, including those detailed from time to time in the Company's
periodic reports, including current reports on Form 8-K, quarterly reports on
Form 10-Q and the annual report on Form 10-K, filed with the Securities and
Exchange Commission. Actual results may vary materially from the forward-looking
statements. The Company assumes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
The Company will hold a conference call with research analysts at 8:00 a.m.
Eastern Time today. The purpose of the call is to review the financial results
of the Company for the third quarter and first nine months. 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 website 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 website.
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The comparative results of operations are as follows:
(In thousands except per share amounts)
Three Months Ended Nine Months Ended
----------------------- -------------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
---------- ---------- ----------- -----------
Net Revenue $4,081,609 $3,623,672 $11,517,222 $10,770,041
Cost of Goods Sold 1,126,356 1,058,122 3,074,555 2,747,516
Selling, General and Administrative
Expenses 1,313,870 1,216,073 3,967,362 3,796,457
Research and Development Expenses 502,758 518,608 1,517,123 1,525,681
Interest Expense, Net 24,304 52,367 77,182 161,326
Other Income, Net (5,732) (21,850) (269,299) (155,188)
Gains related to Immunex/Amgen
Common Stock Transactions - (2,627,600) (860,554) (2,627,600)
Litigation Charges 2,000,000 1,400,000 2,000,000 1,400,000
---------- ---------- ----------- -----------
Income (Loss) Before Federal and
Foreign Taxes (879,947) 2,027,952 2,010,853 3,921,849
Provision (Benefit) for Federal
and Foreign Taxes (453,589) 626,553 294,924 1,048,671
---------- ---------- ----------- -----------
Net Income (Loss)(1) ($426,358) $1,401,399 $1,715,929 $2,873,178
========== ========== =========== ===========
Basic Earnings (Loss) Per Share ($0.32) $1.06 $1.29 $2.17
========== ========== =========== ===========
Average Number of Common Shares
Outstanding During Each
Period - Basic(2) 1,331,958 1,325,930 1,329,492 1,325,294
Diluted Earnings (Loss) Per Share(1) ($0.32) $1.05 $1.29 $2.15
========== ========== =========== ===========
Average Number of Common Shares
Outstanding During Each
Period - Diluted(2) 1,331,958 1,331,068 1,335,315 1,335,298
(1) Net loss and diluted loss per share for the 2003 third quarter were
$426,358 and $0.32, respectively, compared with net income and diluted
earnings per share of $1,401,399 and $1.05 in the prior year. The 2003
third quarter net loss and diluted loss per share included a charge of
$2,000,000 ($1,300,000 after-tax or $0.98 per share-diluted) related to the
Redux and Pondimin diet drug litigation. The 2002 third quarter net income
and diluted earnings per share included a gain of $2,627,600 ($1,684,723
after-tax or $1.26 per share-diluted) related to the acquisition of Immunex
by Amgen and an additional diet drug litigation charge
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of $1,400,000 ($910,000 after-tax or $0.68 per share-diluted). Excluding
these items from both the 2003 and 2002 third quarter results, net income
and diluted earnings per share for the 2003 third quarter increased 39%
and 38%, respectively.
Net income and diluted earnings per share for the 2003 first nine months
were $1,715,929 and $1.29 compared with $2,873,178 and $2.15 in the prior
year. The 2003 first nine months net income and diluted earnings per share
included a first quarter gain of $860,554 ($558,694 after-tax or $0.42 per
share-diluted) related to the sale of the remaining 31,235,958 shares of
the Company's Amgen common stock holdings and a third quarter charge of
$2,000,000 ($1,300,000 after-tax or $0.97 per share-diluted) related to
the Redux and Pondimin diet drug litigation. Excluding these items and the
unusual items noted above from the 2002 third quarter results, net income
and diluted earnings per share for the 2003 first nine months each
increased 17%.
(2) The average number of common shares outstanding for diluted loss per share
for the 2003 third quarter does not include common stock equivalents, as
the effect on the diluted loss per share would be antidilutive. Therefore,
the average number of common shares outstanding for diluted loss per share
is the same as for basic loss per share.
The average number of common shares outstanding for diluted earnings per
share is higher than for basic earnings per share for the 2003 first nine
months and the 2002 third quarter and first nine months due to the assumed
conversion of outstanding stock options into common stock equivalents
using the treasury stock method.