See end of text prior to tables for notes.
NEW YORK, N.Y., Tuesday, October 21, 2008 – Pfizer Inc. (NYSE: PFE) today reported financial results for third-quarter 2008. The Company recorded reported revenues of $12.0 billion, consistent with the year-ago quarter, despite the negative impact of 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 third-quarter 2008 revenues decreased by $549 million ($428 million and $121 million, respectively), compared with the year-ago quarter. Foreign exchange favorably impacted reported revenues by approximately $620 million or 5%, as did the solid performance of many key products. Reported revenues in third-quarter 2008 were negatively impacted by a $217 million adjustment to prior years’ liabilities for product returns.
U.S.reported revenues accounted for 41% of the total compared with 48% in the year-ago quarter, while international reported revenues accounted for 59% of the total compared with 52% in the year-ago quarter. In the U.S., reported revenues were $4.9 billion, a decrease of 15%, while international reported revenues were $7.1 billion, an increase of 13%, compared to third-quarter 2007. The increase in international reported revenues reflects the favorable impact of foreign exchange of 10% and operational growth of 3%.
For third-quarter 2008, Pfizer posted reported net income of $2.3 billion, compared with $761 million in the prior-year quarter, and reported diluted EPS of $0.34, compared with $0.11 in the prior-year quarter. These increases were primarily attributable to the after-tax charges of $2.1 billion related to the decision to exit Exubera in the year-ago quarter, which was partially offset by the after-tax charge in third-quarter 2008 of approximately $640 million resulting from the previously announced agreements in principle to resolve certain litigation involving the Company’s non-steroidal anti-inflammatory (NSAID) pain medicines as well as the after-tax charge of approximately $150 million associated with the aforementioned adjustment to prior years’ product returns liabilities.
For the first nine months of 2008, Pfizer recorded reported revenues of $36.0 billion, an increase of 1% compared with $35.5 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 $2.1 billion. Foreign exchange favorably impacted revenues by approximately $2.0 billion or 6%, as did the solid performance of many key products. U.S. reported revenues accounted for 42% of the total compared with 49% in the year-ago period, while international reported revenues accounted for 58% of the total compared with 51% in the year-ago period. In the U.S., reported revenues were $15.2 billion, a decrease of 13%, while international reported revenues were $20.8 billion, an increase of 15% compared to the year-ago period. The increase in international reported revenues reflects the favorable impact of foreign exchange of 11% and operational growth of 4%.
For the first nine months of 2008, the Company posted reported net income of $7.8 billion, compared with $5.4 billion in the prior-year period, and reported diluted EPS of $1.16, compared with $0.78 in the prior-year period. These increases were primarily attributable to the previously mentioned after-tax charges of $2.1 billion related to Exubera in the year-ago quarter, lower restructuring charges associated with cost-reduction initiatives, as well as savings generated by those initiatives, which were partially offset by the previously mentioned after-tax charge of approximately $640 million associated with the resolution of certain NSAID litigation in third-quarter 2008.
For third-quarter 2008, Pfizer posted adjusted revenues (1) of $12.2 billion, an increase of 2% compared with $12.0 billion in the year-ago quarter. For the first nine months of 2008, Pfizer posted adjusted revenues(1) of $36.0 billion, an increase of 2% compared with $35.4 billion in the first nine months of 2007.
Adjusted revenues(1) were positively impacted by foreign exchange and the solid performance of many key products, and negatively impacted by the loss of U.S exclusivity of Norvasc, Zyrtec and Camptosar.
For third-quarter 2008, Pfizer recorded adjusted income(1) of $4.2 billion, an increase of 5% compared with $4.0 billion in the year-ago quarter, and adjusted diluted EPS(1) of $0.62, an increase of 7% compared with $0.58 in the year-ago quarter. For the first nine months of 2008, Pfizer recorded adjusted income(1) of $12.0 billion, an increase of 2% compared with $11.7 billion in the year-ago period, and adjusted diluted EPS(1) of $1.77, an increase of 5% compared with $1.68 in the year-ago period. In third-quarter 2008, adjusted income(1) and adjusted diluted EPS(1) were positively impacted by foreign exchange and savings associated with cost-reduction initiatives, which were partially offset by a decrease in net interest income. In the first nine months of 2008 compared with the same period in 2007, adjusted income(1) and adjusted diluted EPS(1) were impacted by the aforementioned factors in addition to the 2007 payment to Bristol-Myers Squibb Company in connection with the apixaban collaboration, as well as the 2008 favorable income tax adjustments.
Reported and adjusted diluted EPS(1) were also positively impacted by the full benefit of Pfizer’s purchase of $10.0 billion of the Company’s common stock in 2007.
“We remain on-track to meet our 2008 objectives, despite the turbulent global economy," said Chairman and Chief Executive Officer Jeff Kindler. “We continued to deliver steady results this quarter, with many of our most important medicines performing well around the world, including Lyrica, Celebrex, Viagra, Sutent, Zyvox and Geodon, as well as Lipitor in a highly competitive market. Looking ahead, we are making progress on our growth strategies, including increasing the number of programs in our Phase 3 portfolio from 16 to 25 in the last six months. With the formation of the Primary Care, Specialty Care and Emerging Markets units, which join the existing Oncology and Established Products units, we continue to evolve our pharmaceutical operations into smaller, more focused units that can anticipate and respond more quickly to our customers' and patients’ changing needs.”
Frank D’Amelio, Chief Financial Officer, commented, “Based on our year-to-date performance and outlook for the remainder of 2008, we are raising the lower end of our guidance range for full-year 2008 revenues to $48.0 to $49.0 billion from $47.0 to $49.0 billion. In addition, we have increased our guidance to at least a $2.0 billion reduction of absolute adjusted total costs(2) at the end of 2008 compared with 2006 on a constant currency basis(3). At the end of third-quarter 2008, cost reductions under this program totaled $1.7 billion. We are pleased with our progress and continue to look for new opportunities to further reduce and more effectively manage our costs. Finally, with our strong balance sheet and operating cash flow, we remain confident that we have the financial flexibility to successfully execute our strategies and meet our financial objectives in the face of the current macroeconomic environment.”
* Calculation not meaningful.
Pharmaceutical revenues for third-quarter 2008 were $11.0 billion, a decrease of 1% compared with the prior-year quarter, including the favorable impact of foreign exchange of approximately $570 million or 5%. Third-quarter 2008 revenues from in-line and new products(6) increased 8% compared with the year-ago quarter, which excludes the impact of the loss of U.S. exclusivity of Norvasc, Zyrtec and Camptosar, which collectively decreased revenues by $627 million compared with the year-ago quarter. Additionally, pharmaceutical revenues were impacted by a $217 million adjustment to the prior years’ product returns liabilities.
Lipitor revenues in third-quarter 2008 were $3.1 billion, a decrease of 1% compared with the prior-year quarter. In the U.S., Lipitor revenues were $1.6 billion, a decrease of 13% compared with the prior-year quarter, while revenues from international markets were $1.6 billion, an increase of 16%. The increase in international revenues reflects the favorable impact of foreign exchange of approximately $130 million, or 10%, and operational growth of 6%. The global statin market remains highly competitive, marked by decelerating market growth and increasing cost constraints. Pfizer continues to respond to these market dynamics by focusing on Lipitor’s differentiated clinical profile backed with strong landmark outcomes data. Pfizer recently launched a new multi-channel “Heart to Heart” direct-to-consumer campaign featuring patient testimonials to motivate new patients to speak with their physicians.
Lyrica revenues in third-quarter 2008 were $675 million, an increase of 45% compared with the prior-year quarter, driven by high patient and physician satisfaction globally demonstrated by strong physician prescribing patterns, as well as growth in the U.S. fibromyalgia market, where we continue to expand our leadership position. In the U.S., Lyrica revenues rose to $379 million, an increase of 40% compared with the prior-year quarter, while international revenues grew to $296 million, an increase of 51% primarily from operational growth.
Celebrex revenues in third-quarter 2008 were $625 million, an increase of 8% compared with the year-ago quarter, supported by continued educational and promotional efforts highlighting the benefit-risk proposition of Celebrex, as well as the favorable impact of foreign exchange. In the U.S., Celebrex revenues were $450 million, an increase of 4% compared with the prior-year quarter, while international revenues were $175 million, an increase of 21%.
Sutent revenues in third-quarter 2008 were $226 million, an increase of 49% compared with the year-ago quarter, demonstrating continued strong performance and market leadership in its approved indications. In the U.S., Sutent revenues were $62 million, an increase of 4% compared with the prior-year quarter, while international revenues were $164 million, an increase of 79%. Sutent is now available in all major markets and is supported by efficacy, survival and cost-effectiveness data. Further, our robust life cycle plan currently includes Phase 3 clinical trials in cancers with unmet medical need, such as breast, lung, colorectal, liver and prostate cancers.
Chantix (known as Champix outside the U.S.) revenues in third-quarter 2008 were $182 million, a decrease of 24% compared with third-quarter 2007. In the U.S., Chantix revenues were $96 million, a decline of 49% compared with the prior-year quarter, while international revenues were $86 million, an increase of 60%. Third-quarter 2008 U.S. results continued to be negatively impacted by the changes to the Chantix U.S. label in prior quarters. Pfizer continues its educational and promotional efforts focused on the Chantix benefit-risk proposition, the significant health consequences of smoking and the importance of physician-patient dialogue in helping patients quit smoking. In September, the U.S. branded direct-toconsumer campaign was re-launched with print, television and web advertising. Chantix has now been either approved or launched in all major markets
Animal Health revenues for third-quarter 2008 were $708 million, an increase of 11% compared with $636 million in the year-ago quarter. The increase was driven by the favorable impact of foreign exchange, which increased revenues by approximately $35 million or 6%, in addition to strong global livestock and companion animal product performance.
In third-quarter 2008, adjusted cost of sales(1) as a percentage of revenues was 14.5% compared with 15.1% in third-quarter 2007. This improvement reflects the benefits from our cost-reduction initiatives, partially offset by a less favorable geographic mix.
Adjusted selling, informational and administrative (SI&A) expenses(1) were $3.4 billion in third-quarter 2008, a decrease of 6% compared with the prior-year quarter, due to the continued favorable impact of our cost-reduction initiatives, which was partially offset by the unfavorable impact of foreign exchange compared with the year-ago period.
Adjusted research and development (R&D) expenses were $1.8 billion in third-quarter 2008, an increase of 2% compared with the prior-year period. This primarily reflects increased spending on Phase 3 programs, partially offset by the favorable impact of cost-reduction initiatives.
Overall, foreign exchange increased adjusted total costs(2) by $242 million or 3% in third-quarter 2008 compared with the prior-year period. Excluding the impact of foreign exchange, adjusted total costs(2) decreased by approximately $460 million, or 6%, compared with the year-ago quarter. The operational improvement was driven partially by the reduction in workforce to 83,400 at the end of third-quarter 2008, a decline of 3,600 compared with the end of third-quarter 2007, as well as manufacturing and research and development site exits.
At the end of third-quarter 2008, Pfizer achieved its goal to reduce absolute adjusted total costs(2) by at least $1.5 to $2.0 billion at the end of 2008 compared with 2006 on a constant currency basis(3), having realized a total reduction of $1.7 billion. Pfizer now expects to reduce absolute adjusted total costs(2) by at least $2.0 billion by the end of 2008. These initiatives span essentially all divisions, functions, markets and sites, and reflect a workforce reduction of 14,600 since the target was established in January 2007.
For full-year 2008, Pfizer’s financial guidance, at current exchange rates(9) is summarized below. Revenue guidance has been narrowed to a range of $48.0 to $49.0 billion from $47.0 to $49.0 billion, adjusted SI&A expenses(1) guidance has been narrowed to a range of $14.4 to $14.7 billion from $14.4 to $14.9 billion, and adjusted diluted EPS(1) guidance has been narrowed to a range of $2.36 to $2.41 from $2.35 to $2.45. Additionally, reported diluted EPS(10) guidance has been reduced to a range of $1.61 to $1.71 from $1.73 to $1.88, reflecting in part the charges associated with the previously mentioned resolution of certain NSAID litigation.
For additional details, please see the attached financial schedules, product revenue tables, supplemental information and disclosure notice.
(a) Exclusive of amortization of intangible assets, except as discussed in footnote 5 below.
* Calculation not meaningful. Certain amounts and percentages may reflect rounding adjustments.
(millions of dollars, except per common share data)
Quarter Ended September 28, 2008
Quarter Ended September 30, 2007
1) Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function are included in Cost of sales , Selling, informational and administrative expenses or Research and development expenses , as appropriate.
2) Certain significant items includes the following:
Third Quarter Nine Months (millions of dollars) 2008 2007 2008 2007
Restructuring charges -Cost-reduction initiatives (a) $ 338 $ 437 $ 1,077 $ 2,267 Implementation costs -Cost-reduction initiatives (b) 378 373 1,140 864 Litigation-related matters(c) 936 35 936 61 Returns liabilities adjustment(d) 217 -217 Asset impairment charges and other associated costs(e)115 2,804 115 2,804 Consumer Healthcare business transition activity(f)9 (8) (3) (24)
Other 38 18134 43
Total certain significant items, pre-tax 2,031 3,659 3,616 6,015 Income taxes(g) (588) (1,050) (1,467) (1,812) Total certain significant items--net of tax $ 1,443 $ 2,609 $ 2,149 $ 4,203
Twelve Months Ended December 31, 2007
(a) Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function are included in Cost of sales , Selling, informational and administrative expenses or Research and development expenses , as appropriate.
Certain amounts may reflect rounding adjustments. Certain prior period amounts were reclassified to conform to the current period presentation.
(millions of dollars)
QUARTER-TO-DATE
YEAR-TO-DATE
Third Quarter % Incr. / Nine Months % Incr. /
2008 2007 (Decr.)2008 2007 (Decr.)Total reported Pharmaceutical revenues $ 10,976 $ 11,036 (1) $ 32,933$ 32,722 1Norvasc 562 640 (12)1,702 2,351 (28)Camptosar 122 243 (50)451 713 (37)Zyrtec/Zyrtec D -428 * 125 1,274 (90)
Other (1) (217) -*(217) -*Total in-line products and new products(2)
Pharmaceutical revenues$ 10,509 $ 9,725 8 $ 30,872$ 28,384 9
2008 2007 (Decr.)2008 2007 (Decr.)Total reported Pharmaceutical revenues $ 4,525 $ 5,352 (15) $ 14,048$ 16,287 (14)Norvasc 22 48 (53)59 577 (90)Camptosar (3) 137 *86 397 (78)Zyrtec/Zyrtec D -428 * 125 1,274 (90)
Other (1) (157) -*(157) -*Total in-line products and new products(2)
Pharmaceutical revenues $ 4,663 $ 4,739 (2) $ 13,935$ 14,039 (1)
2008 2007 (Decr.)2008 2007 (Decr.)Total reported Pharmaceutical revenues $ 6,451 $ 5,684 13 $ 18,885$ 16,435 15Norvasc 540 592 (9)1,643 1,774 (7)Camptosar 125 106 17365 316 16Zyrtec/Zyrtec D -----
Other (1) (60) -*(60) -*Total in-line products and new products(2)
Pharmaceutical revenues(3) $ 5,846 $ 4,986 17 $ 16,937$ 14,345 18
* Calculation not meaningful.Certain amounts and percentages may reflect rounding adjustments.
The weakening of the U.S. dollar relative to other currencies, primarily the euro, Japanese yen and Canadian dollar, favorably impacted our revenues by approximately $620 million, or 5%, in third-quarter 2008, compared to the same period in 2007, and by approximately $2.0 billion, or 6%, in the first nine months of 2008, compared to the same period in 2007.
Reported revenues in third-quarter 2008 include a reduction of $217 million to adjust our prior years’ liabilities for product returns. We previously accrued for returns based on our overall returns experience, as well as our understanding of the amount of product in the wholesale and retail channel. After a recent detailed review of our returns experience, we determined that our previous methodology needed to be revised, as the lag time between product sale and return was actually much longer than we had previously assumed. Although fully recorded in the current period, virtually all of the adjustment relates back several years. We have also reviewed our expense calculations for the prior years and determined that the expense recorded in those years was not materially different from what would have been recorded under our revised approach.
Reported cost of sales decreased 54% in third-quarter 2008, compared to the same period in 2007, and decreased 26% in the first nine months of 2008, compared to the same period in 2007. The decreases primarily reflect a $2.6 billion charge in third-quarter 2007 related to our decision to exit Exubera and the savings impact of our cost-reduction initiatives, partially offset by the unfavorable impact of foreign exchange, and for the first nine months of 2008, higher implementation costs associated with our cost-reduction initiatives.
Reported cost of sales included implementation charges related to our cost-reduction initiatives of $172 million for third-quarter 2008, $520 million for the nine months ended September 28, 2008, $173 million for third-quarter 2007, and $437 million for the nine months ended September 30, 2007.
Reported cost of sales also included $38 million for third-quarter 2008, $131 million for the nine months ended September 28, 2008, $41 million for third-quarter 2007, and $121 million for the nine months ended September 30, 2007, related to business-transition activities associated with the sale of our Consumer Healthcare business, completed in December 2006. This continuing activity is transitional in nature and generally results from agreements that seek to facilitate the orderly transfer of operations of our former Consumer Healthcare business to the new owner.
Reported cost of sales as a percentage of revenues decreased 20.8 percentage points to 17.7% in third-quarter 2008, compared to third-quarter 2007, reflecting a $2.6 billion charge in third-quarter 2007 related to our decision to exit Exubera and the favorable impact of our cost-reduction initiatives, partially offset by the impact of foreign exchange.
Reported SI&A expenses decreased 7% in third-quarter 2008, and decreased 1% in the nine months ended September 28, 2008, compared to the same periods in 2007, reflecting the savings associated with our cost-reduction initiatives and a $83 million charge in third-quarter 2007 related to our decision to exit Exubera, partially offset by the impact of foreign exchange and the impact of higher implementation costs associated with our cost-reduction initiatives.
Reported SI&A expenses included implementation charges related to our cost-reduction initiatives of $95 million for third-quarter 2008, $270 million for the nine months ended September 28, 2008, $70 million for third-quarter 2007, and $198 million for the nine months ended September 30, 2007.
Reported R&D expenses, excluding acquisition-related in-process research and development charges (IPR&D), decreased 6% in third-quarter 2008, and decreased 3% in the nine months ended September 28, 2008, compared to the same periods in 2007. The decreases were primarily due to collaboration payments made to Bristol-Myers Squibb Company in second-quarter 2007 in connection with our collaboration to develop and commercialize apixaban and a $131 million charge in third-quarter 2007 related to our decision to exit Exubera, in addition to the realization of savings associated with our cost-reduction initiatives. These decreases were partially offset by higher R&D spending related to Phase 3 clinical trials in third-quarter 2008 and the unfavorable impact of foreign exchange.
Reported R&D expenses included implementation charges related to our cost-reduction initiatives of $108 million for third-quarter 2008, $348 million for the nine months ended September 28, 2008, $130 million for third-quarter 2007, and $292 million for the nine months ended September 30, 2007.
IPR&D charges of $567 million in the first nine months of 2008 primarily related to our acquisitions of Serenex, Inc., Encysive Pharmaceuticals, Inc., CovX, Coley Pharmaceutical Group, Inc. and two smaller acquisitions related to Animal Health. IPR&D charges in the first nine months of 2007 of $283 million, primarily related to our acquisitions of BioRexis Pharmaceutical Corp. and Embrex, Inc.
In third-quarter 2007, after an assessment of the financial performance of Exubera, an inhalable form of insulin for the treatment of diabetes, as well as its lack of acceptance by patients, physicians and payers, we decided to exit the product.
Total pre-tax charges for the third quarter and first nine months of 2007 were $2.8 billion and were primarily included in Cost of sales ($2.6 billion), Selling, informational and administrative expenses ($83 million), and Research and development expenses ($131 million). Total pre-tax charges for the third quarter and first nine months of 2008 were not significant.
*Certain prior period amounts were reclassified to conform to the current period presentation.
The effective tax rate on reported Income from continuing operations before provision/(benefit) for taxes on income and minority interests for third-quarter 2008 was a 17.0% cost compared to a 25.4% benefit in third-quarter 2007, and in the first nine months of 2008 was a 13.8% cost compared to a 12.7% cost in the first nine months of 2007, reflecting tax benefits in second-quarter 2008 of $305 million related to favorable tax settlements for multiple tax years and $426 million related to the sale of one of our biopharmaceutical companies (Esperion Therapeutic Inc.), higher acquired IPR&D expenses in 2008, which are not deductible for tax purposes, and a tax benefit in third-quarter 2007 of $681 million related to charges associated with Exubera.
The effective tax rate on adjusted income(1) was a cost of 22.3% in third-quarter 2008, a cost of 21.4% in the first nine months of 2008, a cost of 21.7% in third-quarter 2007, and a cost of 21.8% in the first nine months of 2007. The lower rate on adjusted income(1) in the first nine months of 2008 reflects the $305 million in tax benefits related to the resolution of tax issues noted above, partially offset by a change in geographical mix of income.
On October 3, 2008, the Tax Extenders and Alternative Minimum Tax Relief Act (the Extenders Act) extended the research and development tax credit from January 1, 2008 through December 31, 2009. We estimate that this research and development credit will reduce income tax expense in fourth-quarter 2008 by approximately $120 million to $150 million. Certain provisions of the Tax Increase and Prevention Reconciliation Act (TIPRA) have been extended through 2010. These provisions reduce our
U.S. tax cost on certain types of foreign income and were originally due to expire for us in 2009.
Previous Full-Year 2008 Revised Full-Year 2008 Guidance Guidance
($ billions, except per-share amounts) Net Income(a) Diluted EPS(a) Net Income(a) Diluted EPS(a)
Income/(Expense)
Adjusted Income/Diluted EPS(1)
Guidance ~$15.8 - $16.6 ~$2.35 - $2.45 ~$15.9 - $16.3 ~$2.36 - $2.41
Purchase Accounting Impacts:
Business Development Transactions(2.1) (0.31) (1.9) (0.28)
Completed as of 12/31/07
Business Development Transactions Completed from 1/1/08 through (0.5) (0.08) (0.6) (0.08) 9/28/08
Costs Related to Cost-Reduction Initiatives (1.6 – 1.9) (0.24 – 0.29) (1.6 – 1.9) (0.24 – 0.29)
Litigation-Related Matters(b) --(0.7) (0.10)
Returns Liabilities Adjustment(c) --(0.1) (0.02)
Tax Benefits Related to Sale of Esperion 0.4 0.06 0.4 0.06
Other, Net --(0.2) (0.04)
Reported Net Income/Diluted EPS
Guidance ~$11.7 - $12.8 ~$1.73 - $1.88 ~$10.9 - $11.6 ~$1.61 - $1.71
(1) “Adjusted income” and “adjusted diluted earnings per share (EPS)” are defined as reported net income and reported diluted EPS excluding purchase-accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. As described under Adjusted Income in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer’s Form 10-Q for the quarterly period ended June 29, 2008, management uses adjusted income, among other factors, to set performance goals and to measure the performance of the overall company. We believe that investors’ understanding of our performance is enhanced by disclosing this measure.
The adjusted income and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and diluted EPS.
DISCLOSURE NOTICE: The information contained in this earnings release and the attachments is as of October 21, 2008. The Company assumes no obligation to update any forward-looking statements contained in this earnings release or the attachments as a result of new information or future events or developments.
This earnings release and the attachments contain forward-looking information about the Company’s financial results and estimates, business plans and prospects, in-line products and product candidates that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects. Among the factors that could cause actual results to differ materially are the following: the success of research and development activities; decisions by regulatory authorities regarding whether and when to approve our drug applications as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of our products; the speed with which regulatory authorizations, pricing approvals and product launches may be achieved; the success of external business development activities; competitive developments, including with respect to competitor drugs and drug candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates; the ability to successfully market both new and existing products domestically and internationally; difficulties or delays in manufacturing; trade buying patterns; the ability to meet generic and branded competition after the loss of patent protection for our products and competitor products; the impact of existing and future legislation and regulatory provisions on product exclusivity; trends toward managed care and healthcare cost containment; U.S. legislation or regulatory action affecting, among other things, pharmaceutical product pricing, reimbursement or access, including under Medicaid and Medicare, the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries, direct-toconsumer advertising and interactions with healthcare professionals and the involuntary approval of prescription medicines for over-thecounter use; the impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003; legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access; contingencies related to actual or alleged environmental contamination; claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates; significant breakdown, infiltration or interruption of our information technology systems and infrastructure; legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent protection, governmental investigations, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings; the Company’s ability to protect its patents and other intellectual property both domestically and internationally; interest rate and foreign currency exchange rate fluctuations; governmental laws and regulations affecting domestic and foreign operations, including tax obligations; changes in generally accepted accounting principles; uncertainties related to general economic, political, business, industry, regulatory and market conditions; any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas; growth in costs and expenses; changes in our product, segment and geographic mix; and the impact of acquisitions, divestitures, restructurings, product withdrawals and other unusual items, including our ability to realize the projected benefits of our cost-reduction initiatives. A further list and description of risks, uncertainties, and other matters can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and in its reports on Forms 10-Q and 8-K.
This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data.